Beijing actually only wanted to support the economy after the pandemic by injecting money selectively. This policy of cosmetic measures seems to have finally come to an end this month. For the third time in just a few days, the government presented a comprehensive economic stimulus package this week. Beijing’s “bazooka” is now worth 229 billion US dollars – almost half the size of China’s gigantic economic stimulus program introduced to rescue the economy after the 2008 financial crisis.
The latest financial injection of 47.5 billion dollars goes to the “Big Fund” to promote the semiconductor industry. With this step, Beijing signals that it continues to link the country’s economic recovery to long-term technological goals. Creating a robust chip production supply chain plays an important role. Joern Petring reports in his analysis that the investments are aimed at emancipating the industry from foreign suppliers as quickly as possible.
In the upcoming European elections, far-right parties could gain ground. This, in turn, benefits China, as a new study by the Prague-based Association for International Affairs (AMO) explains in detail. In the past, far-right and, to some extent, left-wing parties have done much to steer the EU in a more pro-China direction. MEPs from the ID bloc have often voted against common EU positions, for example, in de-risking, the EU-China strategy, or questions concerning Taiwan’s freedom.
Beijing may still be a newcomer when it comes to influencing the EU, Lisa-Martina Klein from our German sister briefing Security.Table writes. However, the Chinese have already devised an effective strategy to spread their narrative in the EU. For example, Chinese players tend to establish contacts in the left-wing spectrum first, then in government parties or right-wing opposition parties that could be part of future governments. The recent case of German AFD politician Maximilian Krah shows how far they have already come. However, he is probably just one of many.
For the third time in just a few days, Beijing has unveiled a financial bazooka worth hundreds of billions to boost the economy. The latest stimulus injection is 344 billion yuan (around 47.5 billion dollars) for the country’s existing chip investment fund, which was registered in Beijing at the end of last week.
It is the third phase of the chip fund, officially called the China Integrated Circuit Industry Investment Fund, also known as the Big Fund. The fund was launched in 2014 to promote the development of the Chinese semiconductor industry – at that time with 138.7 billion yuan (19.2 billion dollars) of investable capital. The second phase followed in 2019 with capital of 204.1 billion yuan (28.2 billion dollars).
This third Big Fund phase, also known as Big Fund III, was expected, but its timing is remarkable. It is the third major financial decision taken by the government in May, showing that it is now willing to spend a lot of money to achieve its technological goals and boost the economy after all. After the end of the pandemic, Beijing initially hesitated to take more than just cosmetic measures, always focusing on supply-sided stimulus rather than boosting consumption.
Now, it appears that both supply and demand are being promoted:
All three decisions combined result in a package worth the equivalent of 229 billion US dollars. This means that the measures implemented in May alone are almost half the size of China’s gigantic economic stimulus program in 2008 to rescue the economy after the financial crisis. At that time, the government spent the equivalent of 586 billion US dollars.
The multi-billion chip fund is not only a defensive measure against Western sanctions, but also part of Xi’s long-standing ambition to turn China into a global technology leader.
The financing for Big Fund III comes from various sources, including the Ministry of Finance, which alone contributed 17 percent – as well as local governments, state-owned enterprises, and, for the first time, state-owned banks. Following the announcement of Big Fund III, Chinese chip shares experienced a significant rally on Friday. Analysts, including from Goldman Sachs, believe that the recently improved sentiment on the Chinese financial markets could continue.
Thanks to Beijing’s financial support, the chip industry has made great strides in recent years. One of the most significant technological breakthroughs was the development of 7-nanometer chips by the Chinese chip company SMIC. This technology is crucial for the production of modern high-end processors. Meanwhile, SMIC can also produce 5-nanometer chips.
Since 2014, the chip fund has also helped build a robust domestic semiconductor manufacturing supply chain, for example, by investing in businesses that manufacture semiconductor production equipment and materials. This reduces dependence on foreign suppliers.
However, there has also been waste and setbacks. For example, the Big Fund has been hit by corruption scandals in recent years. In 2022, corruption investigators launched a crackdown on the semiconductor industry and investigated leading figures in state-owned chip companies. In March, Lu Jun, former CEO of Sino IC Capital, was charged with bribery. Sino IC Capital managed the Big Fund at the time. The chip fund’s new chairman is Zhang Xin, a former official of the Chinese Ministry of Industry and Information Technology (MIIT).
In the meantime, China’s industry showed signs of recovery in April. According to official data released on Monday, the profits of large industrial companies rose by four percent in April 2024 compared to the previous year. In March, the National Bureau of Statistics reported a decline of 3.5 percent.
The upcoming European elections will likely strengthen far-right and far-left parties. A study by the Prague-based Association for International Affairs (AMO) has analyzed how the rise of these fringe parties could steer the EU in a pro-China direction. The study, which AMO published on Tuesday, was compiled in cooperation with the Friedrich Naumann Foundation in Brussels (FNF Europe). FNF Europe will publish the study after the European elections. It has been made available to Table.Briefings in advance.
Although China primarily influences the EU member states themselves, it also increasingly influences EU institutions and members of parliament, the authors Kara Němečková and Ivana Karáskováie analyze. The developments surrounding the exclusion of the German Alternative for Germany (AfD) from the Identity and Democracy Group (ID) were not foreseeable when the study was completed.
Four trends are emerging for the European elections:
The gains for the far-right are particularly problematic because their voting behavior on EU-China-related issues could steer the EU in a more China-positive direction. MEPs from the ID group often voted against common EU positions, for example, on de-risking, the new EU-China strategy, or issues relating to the Taiwan Strait. In contrast, the far-right tends to be less concerned with China’s human rights violations.
The study looks at various leading candidates, including Maximilian Krah, German AfD MP and former lead candidate for the European elections. In the last legislative period, Krah sat on sensitive committees on security and defense, foreign affairs, and human rights. He consistently took a pro-Chinese stance, for example, opposing economic decoupling and sanctions against China and arguing that these measures were detrimental to European interests.
According to the authors’ analysis, the voting behavior of the left-wing group is not quite as clear. With 22 parties, the parliamentary group is very fragmented. Thomas Geisel, one of the BSW’s lead candidates, takes a pro-China stance and calls for closer cooperation with Beijing. On the other hand, Carola Rackete, candidate of the German Left Party, has openly criticized the support of China’s authoritarian leadership in the past. Martin Schirdewan, currently a Left MEP, rejects confrontation with China and openly seeks dialogue with Beijing.
In principle, like other countries, China acts primarily at member state level. However, EU institutions and MEPs are increasingly shifting into focus, as Beijing is aware that important initiatives that could have a significant impact on Chinese policy originate from the EU institutions and are discussed there, the study states.
An EP with pro-China political groups could elect a less China-skeptical Commission President. The new President could then, in turn, reassess the positions of the entire Commission on China. The ID, in particular, could hamper legislative processes that promote de-risking. However, the study states that such developments are still “highly speculative.”
The study found that one of the main differences between Russian and Chinese influence is that Russia mainly aims to undermine trust in democratic processes. On the other hand, Beijing prefers to “present an emphatically positive image of its own authoritarian state” to gain influence and sway public opinion in other countries.
Although China is still somewhat of a “newcomer” when it comes to influencing European politics, it already uses a complex and sometimes very subtle range of instruments. The diplomatic efforts of Chinese players tend first to establish contacts on the left-wing spectrum, then in governing parties, and later also in (right-wing) opposition parties that could be part of future governments. The means used include reciprocal delegation visits, individual meetings with politicians or contacts with “friendship groups” in national and European parliaments.
Furthermore, the authors say China uses disinformation to promote its narratives, including cyber operations such as hacking voter registration databases or spear phishing attacks. China also influences MPs in “traditional” ways, such as through financial benefits for sympathetic candidates or parties or by encouraging espionage, as in the recent case of Krah’s employee, Jian Guo.
The case of Jian Guo, but also that of Latvian MEP and suspected Russian spy Tatjana Ždanoka, has heightened awareness of such attempts to exert influence in the EP. MEPs have called for improvements to the parliamentary security infrastructure. According to the study’s authors, the task of protecting the EU from being further undermined will now fall to the next EP, which the rising fringe parties could make even more difficult.
Click here for all specialist briefings on the European elections.
Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.
The Taiwan parliament has granted itself far-reaching powers with the opposition’s votes. The reform package passed on Tuesday after three readings strengthens the Legislative Yuan’s supervision over the government of the new President, Lai Ching-te, who has just been sworn in. His DPP party no longer has a majority in parliament and could not prevent the reform pushed through by the opposition Kuomintang Party (KMT).
The changes give the Legislative Yuan more power over the national budget, including the defense budget. The reform also penalizes government officials’ contempt of parliament. In the future, the president will be obliged to report regularly to parliament and answer questions from MPs-a first for Taiwan. The parliamentary reforms also allow MPs to request information from the military, private companies, or individuals if they deem it relevant.
The DPP argues that the reforms were passed without proper consultation, calling their content either vague or tantamount to a power grab. “You can seize parliament but you cannot seize public opinion,” DPP parliament leader Ker Chien-ming said in an address to the chamber. He accused Beijing of influencing the Taiwanese opposition. The KMT, in turn, accused the DPP of being close to the Chinese Communists, obstructing the investigation of corruption cases and stirring up unfounded fears about the reforms.
The vote was accompanied by shouting and shoving. Many had brought banners with them. MPs from the ruling DPP party also threw paper airplanes and garbage bags towards the KMT benches (see photo). Last week, violent brawls had erupted in the plenary chamber, resulting in several MPs having to be treated in hospital. Outside the parliament building, thousands once again gathered to protest against the reform.
Since the January elections, the KMT has joined forces with the other opposition party, the Taiwan People’s Party (TPP), to jointly expand the power of parliament and block all legislative proposals from the DPP. ck/rtr
For the first time, Hong Kong’s security authorities have arrested people on the basis of the controversial new Security Law, which came into force in March. The six arrested individuals are accused of posting messages with “seditious intent” on social media shortly ahead of an “upcoming sensitive date.”
Although the actual date is not mentioned, it is the 35th anniversary of the bloody suppression of the democracy movement on Tiananmen Square in Beijing on June 4, 1989.
Among those arrested is civil rights activist Chow Hang-tung, who was sentenced to prison two years ago for a different offense and was already in custody. Chow served as vice president of the now-defunct Hong Kong Alliance in Support of Patriotic Democratic Movements of China. Over three decades, the Alliance had organized a large annual rally in Hong Kong’s Victoria Park, attended by tens of thousands of people. The Hong Kong authorities banned this commemorative event for the first time in 2021 at the behest of the Chinese leadership. It has remained banned. flee
Over the past few days, several Western media outlets have reported on a chatbot that has been trained with “Xi Jinping thought,” giving it the ability to respond just as the head of state would. Some jokingly referred to the Large Language Model (LLM) as “Chat Xi PT.” In fact, the “Cyberspace Information Research Large Model” (网信研究大模型应用) presented by the Cyberspace Academy is not an AI bot like ChatGPT. Instead, it is more of an aid to digital administration, for example, when navigating databases. Xi Jinping’s philosophy only plays a secondary role – in contrast to other Chinese apps that allow users to study Xi Jinping’s philosophies in their free time, as shown above.
Beijing actually only wanted to support the economy after the pandemic by injecting money selectively. This policy of cosmetic measures seems to have finally come to an end this month. For the third time in just a few days, the government presented a comprehensive economic stimulus package this week. Beijing’s “bazooka” is now worth 229 billion US dollars – almost half the size of China’s gigantic economic stimulus program introduced to rescue the economy after the 2008 financial crisis.
The latest financial injection of 47.5 billion dollars goes to the “Big Fund” to promote the semiconductor industry. With this step, Beijing signals that it continues to link the country’s economic recovery to long-term technological goals. Creating a robust chip production supply chain plays an important role. Joern Petring reports in his analysis that the investments are aimed at emancipating the industry from foreign suppliers as quickly as possible.
In the upcoming European elections, far-right parties could gain ground. This, in turn, benefits China, as a new study by the Prague-based Association for International Affairs (AMO) explains in detail. In the past, far-right and, to some extent, left-wing parties have done much to steer the EU in a more pro-China direction. MEPs from the ID bloc have often voted against common EU positions, for example, in de-risking, the EU-China strategy, or questions concerning Taiwan’s freedom.
Beijing may still be a newcomer when it comes to influencing the EU, Lisa-Martina Klein from our German sister briefing Security.Table writes. However, the Chinese have already devised an effective strategy to spread their narrative in the EU. For example, Chinese players tend to establish contacts in the left-wing spectrum first, then in government parties or right-wing opposition parties that could be part of future governments. The recent case of German AFD politician Maximilian Krah shows how far they have already come. However, he is probably just one of many.
For the third time in just a few days, Beijing has unveiled a financial bazooka worth hundreds of billions to boost the economy. The latest stimulus injection is 344 billion yuan (around 47.5 billion dollars) for the country’s existing chip investment fund, which was registered in Beijing at the end of last week.
It is the third phase of the chip fund, officially called the China Integrated Circuit Industry Investment Fund, also known as the Big Fund. The fund was launched in 2014 to promote the development of the Chinese semiconductor industry – at that time with 138.7 billion yuan (19.2 billion dollars) of investable capital. The second phase followed in 2019 with capital of 204.1 billion yuan (28.2 billion dollars).
This third Big Fund phase, also known as Big Fund III, was expected, but its timing is remarkable. It is the third major financial decision taken by the government in May, showing that it is now willing to spend a lot of money to achieve its technological goals and boost the economy after all. After the end of the pandemic, Beijing initially hesitated to take more than just cosmetic measures, always focusing on supply-sided stimulus rather than boosting consumption.
Now, it appears that both supply and demand are being promoted:
All three decisions combined result in a package worth the equivalent of 229 billion US dollars. This means that the measures implemented in May alone are almost half the size of China’s gigantic economic stimulus program in 2008 to rescue the economy after the financial crisis. At that time, the government spent the equivalent of 586 billion US dollars.
The multi-billion chip fund is not only a defensive measure against Western sanctions, but also part of Xi’s long-standing ambition to turn China into a global technology leader.
The financing for Big Fund III comes from various sources, including the Ministry of Finance, which alone contributed 17 percent – as well as local governments, state-owned enterprises, and, for the first time, state-owned banks. Following the announcement of Big Fund III, Chinese chip shares experienced a significant rally on Friday. Analysts, including from Goldman Sachs, believe that the recently improved sentiment on the Chinese financial markets could continue.
Thanks to Beijing’s financial support, the chip industry has made great strides in recent years. One of the most significant technological breakthroughs was the development of 7-nanometer chips by the Chinese chip company SMIC. This technology is crucial for the production of modern high-end processors. Meanwhile, SMIC can also produce 5-nanometer chips.
Since 2014, the chip fund has also helped build a robust domestic semiconductor manufacturing supply chain, for example, by investing in businesses that manufacture semiconductor production equipment and materials. This reduces dependence on foreign suppliers.
However, there has also been waste and setbacks. For example, the Big Fund has been hit by corruption scandals in recent years. In 2022, corruption investigators launched a crackdown on the semiconductor industry and investigated leading figures in state-owned chip companies. In March, Lu Jun, former CEO of Sino IC Capital, was charged with bribery. Sino IC Capital managed the Big Fund at the time. The chip fund’s new chairman is Zhang Xin, a former official of the Chinese Ministry of Industry and Information Technology (MIIT).
In the meantime, China’s industry showed signs of recovery in April. According to official data released on Monday, the profits of large industrial companies rose by four percent in April 2024 compared to the previous year. In March, the National Bureau of Statistics reported a decline of 3.5 percent.
The upcoming European elections will likely strengthen far-right and far-left parties. A study by the Prague-based Association for International Affairs (AMO) has analyzed how the rise of these fringe parties could steer the EU in a pro-China direction. The study, which AMO published on Tuesday, was compiled in cooperation with the Friedrich Naumann Foundation in Brussels (FNF Europe). FNF Europe will publish the study after the European elections. It has been made available to Table.Briefings in advance.
Although China primarily influences the EU member states themselves, it also increasingly influences EU institutions and members of parliament, the authors Kara Němečková and Ivana Karáskováie analyze. The developments surrounding the exclusion of the German Alternative for Germany (AfD) from the Identity and Democracy Group (ID) were not foreseeable when the study was completed.
Four trends are emerging for the European elections:
The gains for the far-right are particularly problematic because their voting behavior on EU-China-related issues could steer the EU in a more China-positive direction. MEPs from the ID group often voted against common EU positions, for example, on de-risking, the new EU-China strategy, or issues relating to the Taiwan Strait. In contrast, the far-right tends to be less concerned with China’s human rights violations.
The study looks at various leading candidates, including Maximilian Krah, German AfD MP and former lead candidate for the European elections. In the last legislative period, Krah sat on sensitive committees on security and defense, foreign affairs, and human rights. He consistently took a pro-Chinese stance, for example, opposing economic decoupling and sanctions against China and arguing that these measures were detrimental to European interests.
According to the authors’ analysis, the voting behavior of the left-wing group is not quite as clear. With 22 parties, the parliamentary group is very fragmented. Thomas Geisel, one of the BSW’s lead candidates, takes a pro-China stance and calls for closer cooperation with Beijing. On the other hand, Carola Rackete, candidate of the German Left Party, has openly criticized the support of China’s authoritarian leadership in the past. Martin Schirdewan, currently a Left MEP, rejects confrontation with China and openly seeks dialogue with Beijing.
In principle, like other countries, China acts primarily at member state level. However, EU institutions and MEPs are increasingly shifting into focus, as Beijing is aware that important initiatives that could have a significant impact on Chinese policy originate from the EU institutions and are discussed there, the study states.
An EP with pro-China political groups could elect a less China-skeptical Commission President. The new President could then, in turn, reassess the positions of the entire Commission on China. The ID, in particular, could hamper legislative processes that promote de-risking. However, the study states that such developments are still “highly speculative.”
The study found that one of the main differences between Russian and Chinese influence is that Russia mainly aims to undermine trust in democratic processes. On the other hand, Beijing prefers to “present an emphatically positive image of its own authoritarian state” to gain influence and sway public opinion in other countries.
Although China is still somewhat of a “newcomer” when it comes to influencing European politics, it already uses a complex and sometimes very subtle range of instruments. The diplomatic efforts of Chinese players tend first to establish contacts on the left-wing spectrum, then in governing parties, and later also in (right-wing) opposition parties that could be part of future governments. The means used include reciprocal delegation visits, individual meetings with politicians or contacts with “friendship groups” in national and European parliaments.
Furthermore, the authors say China uses disinformation to promote its narratives, including cyber operations such as hacking voter registration databases or spear phishing attacks. China also influences MPs in “traditional” ways, such as through financial benefits for sympathetic candidates or parties or by encouraging espionage, as in the recent case of Krah’s employee, Jian Guo.
The case of Jian Guo, but also that of Latvian MEP and suspected Russian spy Tatjana Ždanoka, has heightened awareness of such attempts to exert influence in the EP. MEPs have called for improvements to the parliamentary security infrastructure. According to the study’s authors, the task of protecting the EU from being further undermined will now fall to the next EP, which the rising fringe parties could make even more difficult.
Click here for all specialist briefings on the European elections.
Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.
The Taiwan parliament has granted itself far-reaching powers with the opposition’s votes. The reform package passed on Tuesday after three readings strengthens the Legislative Yuan’s supervision over the government of the new President, Lai Ching-te, who has just been sworn in. His DPP party no longer has a majority in parliament and could not prevent the reform pushed through by the opposition Kuomintang Party (KMT).
The changes give the Legislative Yuan more power over the national budget, including the defense budget. The reform also penalizes government officials’ contempt of parliament. In the future, the president will be obliged to report regularly to parliament and answer questions from MPs-a first for Taiwan. The parliamentary reforms also allow MPs to request information from the military, private companies, or individuals if they deem it relevant.
The DPP argues that the reforms were passed without proper consultation, calling their content either vague or tantamount to a power grab. “You can seize parliament but you cannot seize public opinion,” DPP parliament leader Ker Chien-ming said in an address to the chamber. He accused Beijing of influencing the Taiwanese opposition. The KMT, in turn, accused the DPP of being close to the Chinese Communists, obstructing the investigation of corruption cases and stirring up unfounded fears about the reforms.
The vote was accompanied by shouting and shoving. Many had brought banners with them. MPs from the ruling DPP party also threw paper airplanes and garbage bags towards the KMT benches (see photo). Last week, violent brawls had erupted in the plenary chamber, resulting in several MPs having to be treated in hospital. Outside the parliament building, thousands once again gathered to protest against the reform.
Since the January elections, the KMT has joined forces with the other opposition party, the Taiwan People’s Party (TPP), to jointly expand the power of parliament and block all legislative proposals from the DPP. ck/rtr
For the first time, Hong Kong’s security authorities have arrested people on the basis of the controversial new Security Law, which came into force in March. The six arrested individuals are accused of posting messages with “seditious intent” on social media shortly ahead of an “upcoming sensitive date.”
Although the actual date is not mentioned, it is the 35th anniversary of the bloody suppression of the democracy movement on Tiananmen Square in Beijing on June 4, 1989.
Among those arrested is civil rights activist Chow Hang-tung, who was sentenced to prison two years ago for a different offense and was already in custody. Chow served as vice president of the now-defunct Hong Kong Alliance in Support of Patriotic Democratic Movements of China. Over three decades, the Alliance had organized a large annual rally in Hong Kong’s Victoria Park, attended by tens of thousands of people. The Hong Kong authorities banned this commemorative event for the first time in 2021 at the behest of the Chinese leadership. It has remained banned. flee
Over the past few days, several Western media outlets have reported on a chatbot that has been trained with “Xi Jinping thought,” giving it the ability to respond just as the head of state would. Some jokingly referred to the Large Language Model (LLM) as “Chat Xi PT.” In fact, the “Cyberspace Information Research Large Model” (网信研究大模型应用) presented by the Cyberspace Academy is not an AI bot like ChatGPT. Instead, it is more of an aid to digital administration, for example, when navigating databases. Xi Jinping’s philosophy only plays a secondary role – in contrast to other Chinese apps that allow users to study Xi Jinping’s philosophies in their free time, as shown above.
