Asia Communique — Week 14

Alibaba under investigation - Taiwan Strait tensions - Political crisis in Nepal

Alibaba under investigation

‘Acting on information, China's State Administration for Market Regulation has started investigation on Alibaba Group for alleged monopoly conduct including implementing an “exclusive dealing agreement.”’ reported Xinhua.

Alibaba’s statement in response to the news:

Why China Turned Against Alibaba's Jack Ma - NYT

“The tactic, in which online merchants are forced to choose only one platform as their exclusive distribution channel, is widespread in China, especially during the shopping festivals such as November 11,” reported SCMP.

“Chinese regulators have long warned about the practice, although until the State Administration for Market Regulation (SAMR) announced its probe on Thursday, authorities had failed to take action,” added SCMP.

This week, I will highly recommend reading a profile of Xi Jinping in the Wall Street Journal by Jeremy Page.

“Early hopes that Xi Jinping would want closer integration with the U.S.-led global order have become one of the biggest strategic miscalculations of the post-Cold War era,” wrote Jeremy Page in WSJ.

Analysis: Deleted words from Xi's economic policy speak volumes — Asia Nikkei Review

Political crisis in Nepal

“President Bidya Devi Bhandari has endorsed the Oli government’s recommendation for the dissolution of the House of Representatives.
The Office of the President said in a notice that President Bidya Devi Bhandari has approved the recommendation, pursuant to Article 76 (1) and (7) and Article 85 of the constitution, of the Council of Ministers to dissolve the House of Representatives,” reported Kathmandu Post.

“Amid political turmoil in Nepal, Chinese Ambassador Hou Yanqi has suddenly stepped up her meetings with the Nepali political leadership,” reported Kathmandu Post.

“As tensions with New Delhi rose, Beijing moved in. China has pumped money into Nepal which it sees as crucial to its efforts to build influence in the region. That campaign got a boost in 2017, when the communists won the election” reported New York Times.

“Preparatory work is underway for a cross-border railway connecting China's Tibet autonomous region with Nepal's capital, Kathmandu,” reported China Daily.

“These two projects form part of the Trans-Himalayan Multi-Dimensional Connectivity Network, which China and Nepal vowed to bring about after signing a memorandum of understanding on Belt and Road Initiative cooperation in 2017” added China Daily.

New commander of Western Theatre Command

“The Central Military Commission’s promotion ceremony to the rank of general was grandly held on the 18th at the Bayi Building in Beijing. Xi Jinping, chairman of the Central Military Commission, issued orders to officers and police officers who were promoted to the rank of general. Reports show that Zhang Xudong, who has been promoted to general, will serve as commander of the Western Theatre Command,” reported Beijing News.

“Chinese commanders are understood to have proposed that Indian and Chinese troops move back to either side of the eight spurs that overlook the north bank of Pangong lake - named Finger 1 to 8 - and convert the area in between to a no-activity buffer zone, or a no-man’s land,” reported Hindustan Times.

Zhang Xudong will replace Zhao Zongqi who has been the Commander of Western Theatre Command since 2016. Zhang Xudong has no prior experience in Tibet or Xinjiang.

“Geopolitically, moving into South Asia is necessary to avoid encirclement. With America’s allies to the east, China’s aspirations may include thwarting reinforcements that might flow in from the west in, say, a Taiwan scenario” wrote Patrick M. Cronin in The Hill.

“China has sought additional guarantees before sanctioning $6 billion loan for Main Line-1 (ML-1) project due to weakening financial position of Pakistan and also proposed a mix of commercial and concessional loan against Islamabad’s desire to secure the cheapest lending,” reported Express Tribune.

“Prime Minister Narendra Modi and his Vietnamese counterpart Nguyen Xuan Phuc Monday discussed mostly issues concerning China’s increasing assertion in the region, and vowed to further strengthen their defence and security cooperation,” The Print reported.

India, Vietnam to boost defence, security ties in ‘uncertain’ world, envoy says before PMs’ meet - The Print.

“An Indian warship reached Ho Chi Minh City on Thursday with 15 tonnes of humanitarian relief supplies for people affected by floods in central Vietnam as part of New Delhi’s efforts to assist countries in the region amid the Covid-19 pandemic” reported The Hindustan Times.

Interesting remarks by Shivshankar Menon about Tibet and China policy.

Taiwan Strait remains tense

The situation in Taiwan Strait and the South China Sea remains very tense as military assets of the US, China, and Taiwan have been moving across the region.

According to sources, two US B-1B bombers flew over the South China Sea on December 22. The B-1B bombers flew close to Parcel Islands.

Here is leaked audio of the B-1B bombers preparing to depart for the South China Sea. I haven’t been able to verify the authenticity of the audio.

“On December 22, the US guided-missile destroyer USS John S. McCain trespassed into the waters adjacent to China's Nansha islands and reefs without Chinese Government’s permission, and the naval and aerial forces of the Chinese PLA Southern Theater Command conducted whole-process tracking and monitoring on the US destroyer and warned it off,” said Air Force Senior Colonel Tian Junli, Spokesperson for the PLA Southern Theater Command.

“Two Chinese military Y-8 aircraft entered Taiwan's southwest air defence identification zone (ADIZ) on Tuesday, marking the 14th time such maneuvers have occurred in December, the Ministry of National Defence (MND) said that day,” reported Focus Taiwan.

“Two PLA aircraft (Y-8 ASW and Y-8 EW) entered #Taiwan’s southwest ADIZ on Dec. 24,” said Taiwan Ministry of National Defence on Twitter.

“Around the time Joe Biden was giving his victory speech in Delaware as U.S. president-elect on Nov. 8, two B-1B strategic bombers took off from Andersen U.S. Air Force Base in Guam and set a course for the South China Sea,” reported Asahi.

The National Committee on American Foreign Policy issued a new report titled Avoiding a Taiwan Crisis: Improving Signals and Reducing Mistrust.

‘According to the report, participants agreed that the “total cut-off” of communications between Washington and Beijing as well as Beijing and Taipei has led to “substantial amounts of miscommunication, mistrust and miscalculation in the second half of 2020,” significantly raising the risk of conflict,’ reported Focus Taiwan.

China is looking to propose legislation which will protect investment into its defence industry. A proposal has been put forward to amend “Law of the People’s Republic of China on National Defence.”

One of the proposal includes “the state encourages and supports eligible citizens and organizations to invest in national defence, protects the legitimate rights and interests of investors, and grants preferential policies in accordance with the law.”

Don’t Miss Out

India and the UK held consultations on UN Security Council-related matters.

“Both sides discussed in detail a wide range of issues on the UN Security Council agenda. The Indian delegation briefed their UK counterparts on its priorities during its upcoming UNSC tenure, including reformed multilateralism and counter-terrorism. The UK side also informed of its priorities during its upcoming Presidency of UNSC, including Climate and Security and famine and hunger in conflict situations” said Ministry of External Affairs in a statement about the consultation.

“Canada rejected Shandong Gold Mining’s bid for indebted TMAC Resources, the companies said, amid concerns about a Chinese state-owned entity operating in the country’s sensitive Arctic region,” reported Reuters.

“The chances of China and the European Union concluding a landmark investment deal before the end of the year appear to be diminishing, as opposition grows, including from the U.S., to any agreement that fails to tackle the issue of forced labor,” reported Politico.

“The People’s Alliance for Gupkar Declaration (PAGD) have swept the first-ever District Development Council (DDC) polls held in Jammu and Kashmir after the state lost its special status to abrogation of Article 370. The Farooq Abdullah-led seven-party coalition, which comprises Abdullah’s National Conference (NC), and Mehbooba Mufti’s People’s Democratic Party (PDP), has won 110 seats. The BJP has, meanwhile, bagged 75 seats after securing the largest vote share in the polls, the results of which were declared Wednesday” reported Indian Express.

Movers and Shakers

The Risk of John Kerry Following His Own China Policy - Thomas Wright

China Used Stolen Data to Expose CIA Operatives in Africa and Europe - Zach Dorfman (3 part series)


Tech Giants Are Giving China a Vital Edge in Espionage - Zach Dorfman (3 part series)

Business Street

Google, Microsoft invest in DailyHunt for its short video platform Josh – making it the latest unicorn in India — Business Insider

Sina, New York's first Chinese internet stock, prepares to depart - Nikkei Asian Review

Merry Christmas and happy holidays!