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  • The CCP's Personnel Purge and Its Implications for Foreign Investment in China

    On February 14th, the official Chinese Communist Party media Xinhua News Agency published a commentary on Xi Jinping's speech at the opening ceremony of a training session for newly appointed Central Committee members, alternate members, and senior officials from provinces and ministries. The word "struggle" appeared 26 times in the entire text. Xi Jinping emphasized that the Chinese Communist Party is facing "severe and complex struggles" within the party, which are unprecedented. During the Chinese Communist Party's National People's Congress and Chinese People's Political Consultative Conference in March, there will be an unusual large-scale personnel change in the high-level officials of the CCP government. The previous leadership of the State Council during Li Keqiang's tenure will all be replaced, and most of the department heads will also be changed. This massive personnel purge is considered unprecedented in the history of the CCP's State Council. Under the leadership of the new Standing Committee selected by Xi Jinping, China cannot develop in a positive direction. Of the seven Standing Committee members, except for Li Keqiang, who attended a vocational school, the rest are mostly from a background of workers, peasants, and soldiers. They have no deep understanding of modern economics or modern law. Under their governance, it will inevitably lead to a major social collapse. Prior to the CCP's National People's Congress and Chinese People's Political Consultative Conference, a large-scale "White-Haired Movement" initiated by retired workers broke out in many provinces of mainland China. As the conference approaches, high-level personnel of the CCP government will also face a major shuffle. Some experts have pointed out that Xi Jinping is facing a personal crisis of reputation, and many senior officials who served during Li Keqiang's tenure have "voluntarily stepped down". Following the "Blank Paper Revolution" initiated by people in more than ten cities such as Shanghai, Beijing, and Wuhan at the end of November last year, large-scale mass activities protesting against dissatisfaction with the CCP's medical insurance reform took place in Wuhan, Hubei, and Dalian, Liaoning on February 15. The CCP's National People's Congress and Chinese People's Political Consultative Conference will be held next month, and public opinion believes that the "White-Haired Movement" has brought new crises to the Beijing authorities. Chinese retirees returned to the streets of Wuhan to protest the government's reduction of medical welfare, highlighting the new challenges faced by Xi Jinping's government after last November's historic anti-lockdown protests. In March of this year, Xi Jinping will officially enter his third term as the President of the country, while Li Keqiang will step down, and the previous leadership of the State Council during Li Keqiang's tenure will face a reshuffle. Over the past three years, the CCP has implemented a severe "zero tolerance" policy, severely damaging the Chinese economy, and relaxing epidemic control measures have led to the deaths of many people, causing public anger to boil over. Meanwhile, the voices of dissatisfaction within the system towards the CCP authorities are also growing. The ongoing internal struggles within the Chinese Communist Party and the potential for a major social collapse could have significant implications for foreign investors who are interested in the Chinese market. As the government seeks to address its economic and social challenges, it may introduce policies that could negatively impact foreign investment and business operations in the country. Foreign investors should be mindful of the potential for policy changes and restrictions on foreign investment in certain sectors or industries. The CCP's recent focus on self-reliance and reducing dependence on foreign technology and goods could also result in increased regulatory scrutiny for foreign companies operating in the country. Furthermore, the potential for social unrest and instability could lead to increased political risk, making it difficult for foreign investors to navigate the Chinese market. The risk of protests, strikes, and other forms of civil unrest could result in supply chain disruptions and increased operational costs. Foreign investors should conduct thorough due diligence and risk assessments before investing in the Chinese market. They should also monitor political and social developments in the country and be prepared to adjust their strategies in response to any changes. Building strong relationships with local partners and understanding the local business culture can also help mitigate risks and increase the likelihood of success in the Chinese market. - Brian Su, CEO/President, Artisan Business Group Contact:

  • Emergency Preparedness Plan for Possible Escalation of Tension between China and Taiwan

    Based on the current situation and historical context, it is possible that the tension between China and Taiwan may continue to escalate, especially with the ongoing military buildup and patrol activities in the region. It is also likely that the United States will continue to support Taiwan and its allies in the region, including Japan, South Korea and the Philippines, by deploying more troops and increasing military presence. This could potentially lead to a more complex and volatile geopolitical situation in the Asia-Pacific region. That said, here are some general tips that may be helpful for foreign employers and expats in the region in preparing an exit plan: Stay informed: Keep up to date with the news and developments related to the political situation between Taiwan and China. You can do this by subscribing to reputable news sources, joining local expat forums or social media groups, and attending relevant meetings or events. Have an emergency kit ready: It's important to have an emergency kit ready in case you need to leave your home quickly. This kit should include items such as a first-aid kit, non-perishable food and water, important documents (e.g., passport, visa, identification papers), a flashlight, and a portable radio. Identify potential exit routes: Determine possible routes out of Taiwan and research transportation options. Keep in mind that airports and ports may be closed or have limited access during a crisis, so it's best to have several backup plans. Develop a communication plan: Create a communication plan with your family, friends, and colleagues so that you can stay in touch during a crisis. This should include phone numbers, email addresses, and social media accounts. Consider setting up a communication protocol or designated point of contact in case communication networks are disrupted. Register with your embassy: Register with your home country's embassy so that they are aware of your presence and can provide assistance if needed. They may also have up-to-date information about evacuation procedures and plans. Consider personal safety: It's important to consider your personal safety when developing an exit plan. Avoid public gatherings or areas where tensions are high and keep a low profile. If possible, consider taking self-defense classes or martial arts training. Keep cash on hand: In case of an emergency, it's important to have cash on hand as ATMs and banks may not be accessible. Assess the risks: Consider the likelihood and potential impact of an invasion by China and evaluate the risks involved in staying in Taiwan versus leaving. Consult with your employer, family members, or other trusted advisors to help you make an informed decision. Keep your travel documents up to date: Ensure that your passport and other travel documents are up-to-date and readily accessible in case you need to leave Taiwan quickly. Have a backup plan for pets: If you have pets, make sure you have a plan in place for their evacuation as well. This may involve identifying pet-friendly hotels or arranging for a trusted friend or family member to care for them. Consider having a pre-arranged meeting point: If you are traveling with others, it may be helpful to have a pre-arranged meeting point in case you get separated during an evacuation. Stay flexible: Keep in mind that plans may need to change quickly in an emergency, so it's important to remain flexible and adapt to changing circumstances. It's important to remember that an exit plan is only one aspect of being prepared for an emergency. It's also a good idea to have a plan in place for emergency communication, sheltering in place, and obtaining food and water in case you are unable to leave. By staying informed and taking proactive steps to prepare, you can increase your chances of staying safe and secure in the event of an emergency. Again, it's important to note that political situations can be unpredictable, and it's always better to take the advice of official sources and experts who have access to the latest information. You can also contact your embassy for specific guidance and assistance in preparing an exit plan. - Brian Su, CEO/President, Artisan Business Group Contact:

  • Political Risks & Vietnam's Economic Future: Examining Potential Threats to the Country's Progress

    Vietnam's economic recovery and forecast in 2023 is a topic of great interest as the country has shown remarkable resilience and growth over the past few years, despite the challenges posed by the COVID-19 pandemic. In this analysis essay, we will examine various factors that have contributed to Vietnam's economic recovery, such as supply chain and manufacturing factories relocating from China, having closer ties with the US, Japan, and European countries, as well as the potential political risks that could hinder Vietnam's progress. One of the main drivers of Vietnam's economic recovery has been the relocation of supply chain and manufacturing factories from China to Vietnam. This trend started several years ago but has accelerated in recent years, especially after the US-China trade tensions and the COVID-19 pandemic highlighted the risks of over-reliance on China for manufacturing and supply chains. Vietnam's strategic location, favorable labor costs, and improving infrastructure have made it an attractive alternative for manufacturers looking to diversify their supply chains. The COVID-19 pandemic has also accelerated Vietnam's shift towards a more digital economy, with the government launching various initiatives to promote digital transformation and e-commerce. The pandemic has also led to an increase in demand for online shopping and delivery services, leading to the growth of e-commerce platforms in Vietnam. This shift towards a more digital economy is expected to continue in 2023 and beyond. Another factor that has contributed to Vietnam's economic recovery is its closer ties with the US, Japan, and European countries. Vietnam's participation in various free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) has opened up new markets for Vietnamese businesses, providing them with access to a larger customer base and more opportunities for growth. In addition to trade agreements, the US has also been a major investor in Vietnam, with many US companies investing in Vietnam in recent years. This investment has helped to create jobs and boost the country's economic growth. Vietnam's relationship with Japan has also been beneficial, with Japanese companies investing heavily in the country's infrastructure and manufacturing industries. Despite these positive developments, Vietnam still faces potential political risks that could hinder its progress. One of the main concerns is the country's relationship with China. While Vietnam has been able to attract supply chain and manufacturing factories from China, the two countries have a long history of tensions and disputes, particularly over territorial claims in the South China Sea. Any escalation of tensions between the two countries could have an impact on Vietnam's economy, especially if it leads to disruptions in the supply chain or a decrease in foreign investment. Another potential risk is the country's political stability. Vietnam is a one-party state, and there have been concerns about restrictions on freedom of speech and political dissent. Any political unrest or instability could have a negative impact on the country's economy, especially if it leads to disruptions in supply chains or a decrease in foreign investment. In conclusion, Vietnam's economic recovery and forecast for 2023 is looking positive, with the country's strategic location, favorable labor costs, and improving infrastructure making it an attractive destination for supply chain and manufacturing factories. Closer ties with the US, Japan, and European countries have also provided Vietnam with new markets and opportunities for growth. However, potential political risks, particularly tensions with China and political instability, could pose a threat to Vietnam's progress. As Vietnam continues to grow and develop, it will be important for the government to address these risks and continue to promote a stable and prosperous business environment. - Brian Su, CEO/President, Artisan Business Group Contact:

  • After the Storm: a Forecast of Hong Kong's Economic Recovery in the Post-Covid World

    The implementation of the national security law in Hong Kong has raised concerns about the city's future as a financial hub. The law has already had a significant impact on Hong Kong's economy, with companies and investors expressing concern about the potential impact on the city's business environment. Impact of the National Security Law on Hong Kong's Economy: The national security law has led to a decline in the city's tourism industry, which has been one of the key drivers of its economic growth in recent years. Multinational companies have begun to shift their operations out of the city, while some have announced plans to relocate their regional headquarters to other Asian cities. Hong Kong's Economic Recovery: Hong Kong's economy is expected to rebound strongly once Covid-19 restrictions are lifted. Hong Kong has a highly diversified economy, with a strong financial sector, a vibrant tech industry, and a thriving tourism industry. The government has implemented a range of measures to support businesses and households during the pandemic, including cash handouts, tax relief, and low-interest loans. Hong Kong's proximity to mainland China and its role as a gateway to the world's second-largest economy are likely to be key factors in its economic recovery. The Hong Kong government has announced a series of stimulus measures worth HK$120 billion to revive the pandemic-hit economy in the new financial year. Challenges Faced by Hong Kong: Hong Kong's GDP contracted 6.1% in 2020, surpassing the decline of 5.9% seen during the Asian financial crisis in 1998. The unemployment rate also neared a 17-year-high of 7% in January. The imposition of the national security law by Beijing in 2020 has sparked criticism and concerns about the city's future as a financial center. Steps Taken to Mitigate Challenges: Despite the huge deficits, Hong Kong's ample fiscal reserves allow the authorities to continue pumping out stimulus measures to shore up the economy. Hong Kong plans to strengthen its economic ties with mainland China and pursue membership in the Regional Comprehensive Economic Partnership, a trade alliance of 15 Asia-Pacific nations. In conclusion, the implementation of the national security law has raised concerns about Hong Kong's future as a global financial center. However, Hong Kong's ample fiscal reserves, diversified economy, and plans to strengthen its economic ties with mainland China and pursue membership in the Regional Comprehensive Economic Partnership offer hope for the city's economic recovery. The stimulus measures introduced by the government, coupled with the expected mass vaccination drive against Covid-19, are expected to lead to a strong rebound of the economy. - Brian Su, CEO/President, Artisan Business Group Contact:

  • Close Collaboration between Iran and China Drives Tension with the US

    During his state visit to China on February 14, 2023, Iranian President Ebrahim Raisi met with Chinese President Xi Jinping, who reaffirmed China's commitment to promoting their strategic partnership. President Xi pledged to deepen practical cooperation with Iran in various fields, including trade, agriculture, industry, and infrastructure development, and expressed China's willingness to participate in negotiations on the Iranian nuclear issue and to support Iran in safeguarding its lawful rights and interests. In response, President Raisi emphasized the importance of the comprehensive strategic partnership between Iran and China and expressed a commitment to further deepening their cooperation. He welcomed Chinese investment in Iran and looked forward to strengthening exchanges in trade and infrastructure development. President Raisi also expressed Iran's support for China's Belt and Road Initiative. Beyond oil and gas development, China is supporting Iran's ambition to export Caspian Sea oil and gas to Europe and Asia through pipelines to Southern Iranian ports. Under a 25-year agreement signed in Beijing on June 24, 2020, China will invest $400 billion in Iran's economy over the next quarter-century in exchange for a steady supply of heavily discounted oil from Iran. Although the exact number of Chinese companies operating in Iran is uncertain, many Chinese companies are active in various sectors, including oil and gas, transportation, construction, and telecommunications. Some estimates suggest that there are more than 100 Chinese companies doing business in Iran, with major players like Huawei, China Construction, and China Railroad among them. These economic ties between China and Iran are significant and could have an impact on the global economy. Despite their close collaboration, the US and Israel may view this partnership with concern due to their shared interests in the region. The US has already imposed sanctions on a network of companies, including Chinese entities, accused of facilitating the delivery and sale of Iranian petroleum and petrochemical products to East Asia. Washington's increasing targeting of Chinese companies involved in the export of Iran's petrochemicals, along with China's potential military modernization, could lead to further tension with the US and Israel in the region. - Brian Su, CEO/President, Artisan Business Group Email:

  • New Developments in Chinese Balloon Technology: A Challenge for US Military?

    China's development of advanced stratospheric airship technology, specifically the "Dream" airship, has significant military and civilian applications. Developed through collaboration between the Beijing Nanjiang Aerospace Science and Technology Corporation and Beijing University of Aeronautics and Astronautics, the "Dream" airship can stay airborne for up to six months utilizing helium for lift and solar-powered electric propellers. With the ability to carry mission payloads, it offers ultra-long-range detection and monitoring capabilities, making it a valuable tool for monitoring aircraft carriers and stealth carrier-based aircraft. The "Dream" airship has the potential to address issues such as continuous location and relay guidance for "Nimitz"-class carriers and the lack of carrier-based fixed-wing early warning aircraft on the Liaoning aircraft carrier of Chinese PLA Navy. Its flexibility, reusability, and low cost make it an excellent choice. China has extensively researched stratospheric airships and has made significant progress in developing near-space airships such as the "Dream" and "Tianheng." These airships offer numerous advantages, including long-term hovering, regional coverage, and multiple uses, making them suitable for various market applications. One academic paper published in the "Chinese Journal of Aeronautics" in 2018 discussed the design of the "Tianheng" airship, which can perform various tasks, including Earth observation, ocean monitoring, missile warning, and communication signal relay. China's progress in stratospheric airships demonstrates its growing capabilities in the aerospace industry. China's efforts to develop stratospheric airship technology have been ongoing since the 1990s, with the tackling of key technologies and technical cooperation in relevant fields. In the new century, the engineering development phase began, and experimental airships were developed and tested at different altitudes. This led to the research of stratospheric experimental airships with significant progress in related fields such as synthetic aperture radar, electro-optical payloads, data links, comprehensive information processing, solar cell and energy supply, and thermal control. Chinese military commentator Shi Hong published an article in the March 2022 issue of Global magazine titled "Near Space: A New Militarized Territory," highlighting the importance of low-altitude near space vehicles for early warning, reconnaissance and surveillance, communication support, electronic countermeasures, navigation and positioning, and other tasks. Stratospheric airships and floating balloons are well-suited for long-term early warning, reconnaissance, surveillance, communication support, and other tasks as they can remain stationary for a long time and have excellent concealment due to their activity altitude above 20 kilometers. China's increasing investment in balloon technology, an area ignored by the United States, has led to an increase in its aggressiveness and arrogance. The pursuit of military technology, often obtained through theft from the United States and other Western countries, has been a significant focus of China's resources. With its ultimate goal of global hegemony, China views the advancement of near-space vehicles as an essential tool in future wars, making it imperative for the United States to remain vigilant in monitoring China's progress in this field. The United States has targeted and sanctioned six entities, including Beijing Nanjiang Aerospace Technology Company, Dongguan Lingkong Remote Sensing Technology Company, Eagles Men Aviation Science and Technology Group Company, Guangzhou Tian-Hai-Xiang Aviation Technology Company, Shanxi Eagles Men Aviation Science and Technology Group Company, and China Electronics Technology Group Corporation 48th Research Institute. Of these six units, four have connections to a mysterious scientist named Wu Zhe. The reporter was able to confirm through public information on the mainland network that Wu Zhe's team, consisting of Wu Zhe, Zhu Ming, and Liu Dongxu, had cooperated with the equally enigmatic financial trader Wang Dong. Wu Zhe is a prominent figure in the development of high-tech surveillance balloons and is believed to be leading a group of businesses in this field. He was born on February 10, 1957, in Taiyuan City, Shanxi Province, and is a member of the Communist Party of China. Wu Zhe is a Changjiang Scholar of the Ministry of Education and graduated from Harbin Institute of Technology. It is worth noting that Harbin Institute of Technology, Wu Zhe's alma mater, was sanctioned by the United States in 2020 for its association with the military. Beijing University of Aeronautics and Astronautics, where Wu Zhe worked, was also sanctioned by the United States for its military ties. In October 2015, Wu Zhe was appointed as the vice president of Dongguan Institute of Technology for a two-year term. Dongguan is a city that is known for its manufacturing and technology industries, and Wu Zhe has several companies in the Dongguan Songshan Lake High-tech Industrial Development Zone. On July 27, 2016, the official website of Beijing University of Aeronautics and Astronautics announced that Wu Zhe was a part-time member of the Science and Technology Committee of the General Armament Department (now the Equipment Development Department) of the military. He was the leader of the stealth technology professional group, a member of the Science and Technology Committee of China Aviation Industry Corporation First Group Corporation, and the deputy group leader of the aircraft professional. Since the beginning of 2015, Wu Zhe has collaborated with Shanghai-listed company "Deluxe Family" (Huali Family) with a market value of $690 million to establish Beijing Nanjiang Aerospace Technology Co., Ltd. and Beijing Nanjiang Aerospace Co., Ltd. Nanjiang Aerospace is responsible for the research, development, and sales of near-space vehicles and their application products. On the other hand, Nanjiang Aviation is in charge of the construction of production bases and the manufacturing of near-space vehicles and their application products. Wang Dong chaired Shanghai Nanjiang (Group) Co., Ltd., the major shareholder of the "Huali Family" at the time. Wu Zhe's team members, including Zhu Ming and Liu Dongxu, are all experts in the field of aerospace and have extensive experience in the research of near-space vehicles. They are also from Beijing University of Aeronautics and Astronautics, where Zhu Ming received his Ph.D., and Liu Dongxu currently teaches at the School of Aeronautical Science and Engineering. Zhu Ming served as the deputy chief designer of a national 863 project and the deputy chief commander of a certain aircraft overall project of the China's national high-resolution earth observation major project. He also undertook national defense pre-research projects and won military science and technology and national defense science and technology awards. He is the director of Nanjiang Aerospace. In addition to these developments, former secretary Zhang Jun of Beijing University of Aeronautics and Astronautics has served as a member of the Central Commission for Discipline Inspection for two consecutive terms. It is unclear whether these companies and institute targeted by the US Commerce Department played a direct role in developing or operating the balloon that flew across the United States. However, the Biden administration stated earlier this week that it would take action against any entities that had aided in the balloon's flight. - Brian Su, CEO/President, Artisan Business Group, Contact:

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