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By PHELIM KINE
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Hi, China Watchers. Today we look at Japan's fears about the incoming U.S. president, consider U.S. reliance on China for critical minerals, and revisit the last time a foreign military tried to invade Taiwan. And we profile a book that argues that Beijing deploys private "thugs-for-hire" to do its dirty work.
Let's get to it. — Phelim.
What Greenland means for Japan
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Biden officials were in Japan this week talking about the strength of the U.S. alliance with Tokyo. But President-elect Donald Trump's recent threats to raise tariffs on allies or even seize territory from friendly countries like Denmark and Panama has some in Japan worried that it could be next to fall out of favor.
"It is one thing to talk about raising tariffs against China, but it is very different to raise tariffs against Canada or Mexico and potentially other allies… Hitting against your allies first — it’s the wrong approach," Tatsuya Terazawa former vice-minister for international affairs at Japan's Ministry of Economy, Trade and Industry said at a briefing at the Center for the National Interest think tank in Washington on Monday.
Even if Trump doesn't target Japan itself, he could be alienating countries that are needed to challenge China's growing economic and military influence in the Indo-Pacific, Terazawa argued.
"If the U.S. can stand up against China alone and be much more effective in dealing with the Chinese rise alone, then President Trump’s approach may not be wrong, but the reality is it is extremely difficult," he explained.
Senior officials say all is well. Secretary of State Antony Blinken met with Japanese Prime Minister Shigeru Ishiba in Tokyo on Tuesday and talked up the U.S.-Japan "strong economic and trade relationship." Shigeru lauded their "cooperation as global partners" in a statement. That's despite Tokyo's dismay at the Biden administration's rejection last week of Nippon Steel's bid to buy Pittsburgh-based U.S. Steel on "national security" grounds.
Behind the scenes Japanese officials are fretting about "potential 'deals' with China at the expense of Japan's interests, U.S. military or security responses to China and to North Korea that could be either too accommodating or too provocative," said Paul Saunders, a senior adviser to the Under Secretary of State for Global Affairs in the George W. Bush administration who has close ties to current and former Japanese officials.
Tokyo is leery of any possible move by Trump to deal with China unilaterally.
"No single country can ensure peace and security alone," Minoru Kihara, Japanese defense minister under former Prime Minister Fumio Kishida, said at a Stimson Center think tank event on Wednesday. He added that a move by Trump to buy Greenland "is not something that we could approve of," if doing so violates "a free and open international order.".
While Trump in his first presidency had strong rapport with Japan's then-Prime Minister Shinzo Abe, it's unclear whether Ishiba can do likewise.
Ishiba said last month that he wanted to meet with Trump "at an early date" and Japanese media says that may happen as early as next month. The Japanese PM also said he'd seek "a common understanding about the situation in Northeast Asia" when they eventually meet. That's code for Ishiba's hopes that the two countries can remain aligned on their management of the regional security threats posed by both Beijing and Pyongyang.
Japanese policymakers have vivid memories of how Trump sidelined Tokyo in his efforts to engage with North Korean leader Kim Jong Un in 2018. And both Trump's deputy national security adviser nominee, Alex Wong, and his pick for deputy chief of staff of operations, William "Beau" Harrison, had key roles in organizing the two Trump-Kim summits.
Ishiba's advantages are that Trump didn't make Japan an issue in his election campaign and that Tokyo sought to curry his favor by dispatching former Prime Minister Taro Aso to meet with Trump in April while he was on trial in New York in a criminal hush money case.
Export-Import Bank targets China's critical mineral dominance
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The Export-Import Bank of the U.S., the federal government's foreign credit agency, has launched a funding program to wean the U.S. from reliance on China for certain critical minerals.
The bank's board of directors approved a proposal on Wednesday for a new Supply Chain Resiliency Initiative that can tap tens of billions of dollars in lending for mining and processing projects free of Chinese involvement that will supply critical minerals to U.S. firms.
The initiative won rare bipartisan praise on Capitol Hill. The new funding program marks a "crucial step" in countering "Beijing's malign efforts to manipulate critical minerals markets at the expense of American industry," said the the House Select Committee on China's Critical Minerals Policy Working Group's chair, Rep. Rob Wittman (R-Va.) in an ExIm statement.
Beijing has a stranglehold on sources of many minerals — including gallium, germanium and antimony — that are essential to production of everything from semiconductors and solar panels to wind turbines. Biden administration concerns about Chinese dominance of the sector have soared since Beijing banned exports of those minerals to the U.S. last month. Wittman's Working Group responded a week later by introducing three bills to protect and expand U.S. access to critical mineral supply chains.
TRANSLATING WASHINGTON
— USTR: CHINA RETAINS 'NOTORIOUS' COUNTERFEITER STATUS: China's at the top of a list it would rather not talk about — the Office of the U.S. Trade Representative's annual "2024 Review of Notorious Markets for Counterfeiting and Piracy" — a ranking published Wednesday.
China is yet again "the number one source of counterfeit products in the world," the report said. Ninety percent of U.S. Customs and Border protection seizures in 2023 of pirated and counterfeit items came directly from China or Hong Kong. Brick-and-mortar markets in China as well as Chinese e-commerce sites — including Baidu Wangpan, DHGate and Douyin Shangcheng — peddle counterfeit goods at high volume, the report added.
Chinese embassy spokesperson Liu Pengyu accused USTR of "politicizing economic and trade issues" with the report. Beijing "attaches great importance to intellectual property protection…and continues to increase its crackdown on products that infringe intellectual property rights," Liu said.
— BURNS BLASTS CHINESE COURT: U.S. Ambassador to China Nicholas Burns took to social media on Tuesday to criticize a Chinese court's denial of human rights lawyer Yu Wensheng's appeal of a prison sentence handed down in October. "Very disappointed to see the Jiangsu court on January 6 reject the appeal of human rights lawyer Yu Wensheng and uphold the original three-year sentence for 'inciting subversion of state power,'" Burns said on X. Police arrested Yu and his activist wife, Xu Yan, as they were en route to Beijing to meet with a visiting European Union delegation in 2023. Burns demanded that authorities "immediately release" Yan. The Chinese embassy didn't respond to a request for comment.
TRANSLATING EUROPE
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— SERBIA DEPLOYS CHINESE AIR DEFENSE SYSTEM: Serbia has signaled its deepening ties with Beijing by becoming the first European country to deploy a Chinese-produced air-defense missile system. Personnel from Serbia's 250th Air Defense Missile Brigade are currently training on the FK-3 system, China's equivalent of the U.S. Patriot missile platform, the Defense Post reported Wednesday. Serbia has embraced tighter relations with Beijing in recent years and was one of only three European countries that Chinese leader Xi Jinping traveled to during his state visit to Europe in April.
— CHINESE EV FIRM EYES TARIFF DODGE: The Chinese electrical vehicle manufacturer Nio plans to relocate an unspecified portion of its production facilities to the European Union to avoid punishing tariffs. The firm will first have to reach annual EU sales of at least 100,000 vehicles to justify that investment, the online Automotive News Europe reported Wednesday, quoting Nio's chief executive officer William Li. Li didn't provide details of Nio's current sales within the region or the target date for the firm's EU production. The E.U. imposed tariffs of up to 45 percent on Chinese EV imports in October.
HOT FROM THE CHINA WATCHERSPHERE
— REPORT: CHARTING CHINA'S EXPORT CONTROLS: Brace for Beijing to increasingly adopt a key trade weapon of the U.S. in curbing China's access to high tech semiconductors — restrictions on exports of commodities (think gallium and germanium) for which China is the main global supplier. The Chinese government has overhauled its traditionally "piecemeal" export control system into an expansive tool that allows Beijing "to weaponize supply chains by targeting specific critical minerals," according to a report released today by the Washington-based research non-profit the National Bureau of Asian Research. Expect China to increasingly respond to U.S. curbs on high technology exports by cutting off supplies of materials "critical to U.S. technology and national security strategies," the report said.
— BRITISH LAWMAKERS LASH CHINA'S SHEIN: Lawmakers in the United Kingdom accused the Chinese fast fashion firm Shein — now based in Singapore — for stonewalling on its possible links to slave labor in Xinjiang. A lawyer for Shein, Yinan Zhu, repeatedly dodged questions from members of a U.K. parliamentary committee on Tuesday who wanted details about the firm's supply chains," per Reuters. Zhu provided "almost zero confidence in the integrity of your supply chains… and the reluctance to answer basic questions has frankly bordered on contempt of the committee," said committee chair Liam Byrne.
THREE MINUTES WITH …
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Scott Savitz is a senior engineer at RAND who has done a deep dive into the modern day lessons of the last time a foreign military tried to invade Taiwan. French forces failed repeatedly to capture the island when it became a front in France's confrontation with Qing dynasty forces in the 1884-1885 Tonkin War.
Responses have been edited for length and clarity.
French efforts to blockade Taiwan weren't successful. Could the People's Liberation Army meet similar challenges?
If people are willing to do the risky work of blockade-running there are a lot of places to sneak around it. If China wants to take the approach of "Okay, we’re going to surround them and starve them out," Taiwan could find ways to sustain itself through severe rationing. And China could find itself confronting a population that is willing to buckle down and find ways to sustain themselves, longer than the People's Liberation Army would desire, and long enough that there would start to be a lot of international anger about why Beijing is trying to starve out people who it's claiming as its citizens.
The 19th century defenders of Taiwan adopted a scorched earth policy to deny the French resources to sustain their invasion. What is the 21st century equivalent of that strategy?
The first thing the Chinese will want to do is seize a port, because you can move quantities of materiel and personnel on an order of magnitude faster from an established port than you can via the beaches. Taiwan's forces are fully capable of wrecking their own ports in a number of ways — sinking ships in inconvenient places, laying mines on land and sea, filling them with booby traps and putting malware into everything. And all kinds of simple sabotage such as destroying rail and road links, airports and airfields is a tremendous inhibitor of the PLA's ability to move forward in any kind of a campaign.
Taiwan's geography — mountains and what were then thick forests — helped the island's defenders against the French. How might Taiwan's modern terrain benefit its defenders?
There's less forest and more urban areas. Urban warfare is one of the worst kinds. It is so easy for a defender who has interior lines of communication, knows the environment well and has support from the civilian population to inflict considerable damage.
And as the Germans found at Stalingrad, even when an attacking force tries reducing an urban area to rubble, rubble makes a very good opportunity for cover and concealment by the defending force. So there are a lot of reasons why today’s Taiwan environment may be more challenging than the one that the French faced.
HEADLINES
Forbes: Asian governments and markets face a strategic whirlwind from Trump
Caixin Global: Chart of the day: The military brass ensnared in China's anti-corruption campaign
The Atlantic: The global outrage machine skips the Uyghurs
China Media Project: Total war for global minds
HEADS UP
— MIKE PENCE IS HONG KONG-BOUND: Former Vice President Mike Pence will be in Hong Kong on Jan. 16 to give a keynote address at the Swiss financial services firm UBS' "Wealth Insights 2025" conference. The event's web page says Pence will offer an "insider view into the U.S. elections and its far-reaching global implications" for a crowd of international investment bankers, hedge funders and Hong Kong government officials. Pence's visit is a boon to their efforts to push back against Biden administration criticism of the territory's business environment. That has included a State Department advisory to U.S. firms in September that warned Hong Kong regulations — including its national security law — "may negatively affect businesses' staff, finances, legal compliance, reputation, and operations." Pence declined to comment.
ONE BOOK, THREE QUESTIONS
Outsourcing Repression | Lynette Ong |
The Book: Outsourcing Repression: Everyday State Power in Contemporary China
The Author: Lynette Ong is a distinguished professor of Chinese politics at the University of Toronto.
Responses have been edited for length and clarity.
What is the most important takeaway from your book?
That the Chinese Communist Party's strength stems not from state institutions, such as the police, but by mobilizing non-government private "thugs-for-hire" and street-level volunteers to do its bidding. That has allowed the Chinese government to undertake a state-led urbanization project that has forcibly displaced millions of farmers and relocated thousands of urban families to free up land for modern development, while minimizing resistance and backlash.
What was the most surprising thing you learned while writing this book?
Chinese citizens are often not aware that they're targets of state repression. That's because the government often deploys trusted individuals at the local level to compel obedience with government directives that would spark resistance if uniformed officers tried to do so.
During the first two and a half years of the Zero-Covid policy there was widespread social compliance with intrusive policies like taking temperatures and restricting people's movements because neighborhood "aunties and uncles" led those efforts, rather than faceless government bureaucrats.
How is grassroots state repression in China evolving from its traditional "thugs for hire" intimidation model?
The government gradually replaced violent repression conducted by plainclothes "thugs-for-hire" that were prevalent during the late 1990s and the 2000s with nonviolent persuasion. That's because government officials realized that the cost of using violence against citizens rose with the prevalence of smartphones. That technology, wielded by an increasingly rights-conscious citizenry, meant people could more easily record such abuses and use it as evidence to demand accountability.
Got a book to recommend? Tell me about it at pkine@politico.com.
Thanks to: Heidi Vogt and digital producers Emma Cordover and Dean Southwell.
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