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As we discussed last week, Nancy Pelosi’s visit to Taiwan was bound to add fuel to the delicate Sino-American relationship, and it did. China reacted to the visit with retaliation, while discussions proliferated in the United States about the feasibility and effects of the strategy adopted by the Speaker of the House of Representatives.
Almost immediately upon arrival, Beijing announced military exercises with live ammunition around Taiwan, virtually encircling the island. It’s a delicate move: with the amount of American vessels circling the region for days, a miscalculation could lead to unpredictable repercussions.
Part of the missiles used in this exercise even crossed the border of Taiwanese and international waters, landing near Japan. Tokyo complained, interpreting the incident as an escalation in Chinese war speech against the Japanese.
- Economically, China also sent a message of disapproval and blocked the importation of goods from 35 Taiwanese companies. Among the banned products are cookies, candy, fishing items and fruit;
- Executives from technology companies – such as those in the fields of medical equipment production, cold chain management and solar power generation – were also banned from entering the Chinese mainland;
- So far, however, no restrictions have been put in place against the semiconductor industry, on which China remains dependent and on which Taiwan leads the world.
For her part, Nancy Pelosi published a long essay in the Washington Post in which she explains the reasons for the visit. The Democratic congresswoman says Americans should remember the “solemn pledge to support Taiwan’s defense” and “consider any efforts to determine the island’s future by other than peaceful means as a threat to regional peace and security in the Pacific. “
why it matters: Nancy Pelosi’s visit may have strong symbolism given the position she holds, but it does not serve to dispel a doubt that has plagued the region for several years: if China attacks, would the United States bail out Taiwan?
Decades ago, the answer would almost certainly have been positive, but Chinese economic growth and Beijing’s modernization of the military could make this a costly and difficult conflict to justify in Washington. At the same time, refraining from acting would give allies in that region the impression that American goodwill cannot be counted on, leading to an arms race that is difficult to control.
tip of the week
You’ve probably read a lot about the political repercussions of Nancy Pelosi’s visit to Taiwan, but if you want to understand the military dilemmas involved, I recommend watching this video by retired Colonel Paulo Roberto da Silva Gomes Filho. He also talked about it on our blog at Sheet.
what also matters
A Chinese Communist Party newspaper published an article on Thursday (4) in which it urges state media to use “offense as a means of defense” in dealing with sensitive issues in the country.
Signed by the China Central Radio and Television Station (CCTV) party and editorial group, the text also highlights the importance of the internationalization of Chinese media and the achievements achieved so far.
- “Propaganda and introducing foreign audiences to Xi Jinping’s thought for socialism with Chinese characteristics is our main political task, explaining to international audiences in a way that they can understand and accept it, expressing it in vivid words for integrate Chinese and people from other countries”, says the article.
- Officials also highlighted the success of productions such as “Frases Clássicas Citadas por Xi Jinping”, which, between airings on TV stations and online access, accumulated 4.79 billion views (in Brazil, it was shown in 2019 by Band News and Arte 1) .
The text also says that CCTV “dares to fight” and in the long term will continue to “use the attack” to break what it calls the “long-term monopoly of the Western media over public opinion”.
Alibaba, one of the largest e-commerce companies in the world, released a report that reports a 50% drop in annual net income. The numbers also show stagnation in sales, recording ¥205.56bn (R$158.76bn) compared to ¥205.74bn (R$158.9bn) last year.
The results slightly beat market forecasts, but indicate a slowdown in growth at one of China’s largest and most powerful conglomerates.
- Alibaba chairman and chief executive Daniel Zhang Yong told the South China Morning Post that merchandise volumes sold on platforms such as Taobao and Tmall have experienced a “mid-single-digit percentage decline year on year”;
- He assured, however, that there are “signs of recovery since June, as logistics and supply chain gradually improve after the relaxation of Covid restrictions” in China.
Reporting the results, Bloomberg highlighted that the bad metrics are also a reflection of the Chinese government’s repression of the big tech sector, responsible for reducing by almost US$ 1 trillion (R$ 5.21 trillion) the market value of Alibaba and Tencent in 2021.
keep an eye
What was “goal” became “orientation”. According to Bloomberg, Chinese ministerial and provincial officials acknowledged at a meeting that the 5.5% economic growth target in 2022 is likely not to be achieved. Thus, local and national leaders should use the number as “guidance”, abolishing possible penalties in the performance evaluation for those who fail to reach the goal.
why it matters: For a few months now, bureaucrats and political leaders in China have indicated that 5.5% would be an unrealistic number, especially after the long lockdown in Shanghai and other disruptions in production chains across the country given the arrival of the omni.
If it reached 5.5%, China would have the lowest annual growth since 1990 — except for 2020, when it grew 2.24% also due to the pandemic. At the time, the country registered a growth of 3.92%, mainly due to the effects of international isolation after the Tiananmen Square massacre. These are signs that the Chinese economy is faltering, with repercussions that will be felt worldwide.
to go deep
- Observa China welcomes on Saturday the historian and sinologist Giorgio Sinedino, a Brazilian professor who has taught in China for almost 20 years and a researcher on the country’s philosophy, art and literature. Subscriptions here. (free, in Portuguese)
- The University of Tokyo has opened registration for a digital event next Monday (8) that will discuss China’s digital sovereignty and the dispute with the US. The topic will be presented by Aynne Kokas, one of the leading experts in the field. (free, in English)
- Did Joe Biden force China to take a tougher response to Pelosi’s visit to Taiwan to open public dissent on the issue? Politico believes so and argues about it in this article. (porous paywall, in English)
