2023 Issue 33

First, we highlight a Bloomberg story we missed from June about Huawei’s desparate, and illegal, efforts to win a contract in Denmark, as well as Beijing’s efforts to gain dominance in Low-Earth Orbit satellites, like the ones employed by Starlink to aid Ukraine against Russia.  That effort involves attacks on American and European companies, as well as the manipulation of United Nations bodies to aid Beijing.

The Beidaihe summer retreat for CCP elites is taking place, but this year, it appears that retired party elders were not invited, further proof of Xi’s iron grip on the Party.  That goes hand-in-hand with what James Kynge points out in the Financial Times as a ‘psycho-political funk’ setting in across the PRC.  Late Soviet-era jokes are popping up faster than the censors can respond, as Chinese citizens become ever more cynical about the Party’s rule.  This encourages even greater efforts by the Party to insist on its unquestioned legitimacy.

Finally, two examples of American companies suggest that the U.S. still has a long way to go on competing in the economic domain with the PRC.  Despite much hand-wringing by the U.S. Treasury and an effort to narrowly scope CFIUS restrictions on a DuPont deal with a PRC entity, it appears that Beijing was able to gain access to the sensitive technology.  This suggests that the entire “small yard, high fence” approach is just a fence with many, many holes.  Simultaneously, as the United States seeks to bolster its semiconductor manufacturing, Beijing uses a regulatory tool as a weapon to harm Intel by withholding approval of a merger with Tower Semiconductor.  This suggests that Beijing is not self-limiting to purely “national security” priorities as the Biden Administration claims that it is doing.