News Brief: Taiwan Military Readiness, China Takes Central Asia, US-Taiwan Trade Pact

(20 MAY 23)

May 20, 2023

The news brief was on hold for a while for bandwidth reasons. The plan is to bring it back for the next month or so and test out different formats. We’re looking for someone who can help out with this, but in the meantime, please let us know what you think of the changes.

-Vermilion Team

Military

VERMILION: Taiwan held reservist drills last week. From photos and videos, it looks like much of the training was scripted and soldiers lacked basic fundamentals. Taiwan is taking major steps to resolve these issues, but it is unknown whether these efforts will be too little too late. Tsai Ing-wen observed female reservist combat readiness training and it did little to placate fears that Taiwan’s military is woefully unprepared.

Business

VERMILION: Life in China is not getting any easier for non-Chinese firms. Recent security raids and increased regulatory scrutiny highlight the primacy of national security in China’s business environment and it is unlikely that China will try to roll this image back. Xi Jinping wants companies to know that if you are doing business in China, Chinese national security comes first.

China Puts Spymaster in Charge of U.S. Corporate Crackdown - WSJ

Beijing enlists Chinese Big Tech firms Alibaba, Baidu to boost AI models, computing power - SCMP

Business tough in China as national security trumps all - Channel News Asia

Diplomacy

VERMILION: All roads lead to Beijing. In the midst of Russia’s fraught war in Ukraine, Beijing is taking the opportunity to bring former Soviet states (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) into their own sphere of influence. This will only heighten Russia’s image as a “vassal-state” of China and it is likely that these types of diplomatic moves will create long-terms rifts in the Sino-Russian alliance. Aside from this, China and Russia are already pushing back against the G7 joint statement.

China's Xi pledges billions in loans to Central Asian nations - Nikkei Asia

G7 issues strongest condemnation of China as it intensifies response to Beijing - FT

Taiwan

VERMILION: All major contenders for Taiwan’s 2024 presidential election were unveiled this week. Hou Yu-ih is the KMT’s best chance at defeating the DPP’s William Lai, and Ko Wen-je supposedly has broad appeal with under 30s in Taiwan. Aside from this, Taiwan and the US continue to work on the “U.S.-Taiwan Initiative on 21st Century Trade.” This trade deal will likely strengthen Taiwan’s ability to resist China’s economic coercion and it also serves as a tool to diplomatically bolster Taiwan. This is increasingly important in the midst of China’s ongoing campaign to diplomatically isolate the country.