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CUSEF Express - June 16, 2022

2022-06-16
Daily highlights of developments that affect China and the U.S.
Daily highlights of developments that affect China and the U.S.

Xi has call with Putin

  • Chinese President Xi Jinping talked (China’s readout: Ch/En) with Russian President Vladimir Putin (Russia’s readout: Ru/En) over the phone two days after Chinese Politburo Member and top diplomat Yang Jiechi blamed Washington for undermining China-U.S. relations. The call yesterday was the two presidents’ second conversation since the Ukraine crisis.

  • China’s attitude to the war in Ukraine is the primary focus. The Kremlin said President Xi “noted the legitimacy of Russia’s actions to protect fundamental national interests in the face of challenges to its security created by external forces.” The readout by China used more reserved language, stating that China would “continue to play its due role” to “push for a proper settlement of the Ukraine crisis in a responsible manner.”

  • Both leaders underscored the cooperation in economy and security, as well as in international platforms such as the UN, Shanghai Cooperation Organization (SCO), and BRICS. Although more details of the call are unknown to the public, it appears China is taking a more supportive stance toward Kremlin, facing the “all-around” challenges posed by Washington.

  • Last Friday, the two countries opened their first highway bridge across Heilongjiang (or Amur River, as known in Russian), marking a milestone for China-Russia trade relations.

China defends its Human Rights situation

  • “The days are over for you to ride roughshod over the developing countries!" (你们骑在广大发展中国家头上颐指气使的日子已经一去不复返了!) said a Chinese Foreign Ministry spokesperson when commenting “few Western countries’” double standards to human rights issues. The spokesperson made the remarks (Ch/En) in response to a question about a joint statement by nearly 70 countries at the UN Human Rights Council.

  • The document, which opposed the interference in the internal affairs of China, is a counter statement against another joint statement by 47 countries that criticized China over its human rights situation in Xinjiang and other places.

Fed signals more rate hikes after 75 bps increase

  • The U.S. Federal Reserve raised the Fed Fund rates by 0.75% in the latest Federal Open Market Committee (FOMC) meeting. The central bank also signaled ongoing rate hikes, saying it is “strongly committed” to returning inflation to 2%. The annual growth of the U.S. consumer price index (CPI) has not been below 2% since March 2021 and has quadrupled over the last two years to a 40-year high at 8.6% in May.

  • Nevertheless, the U.S. is not the only country suffering from inflation. Turkey recorded a 73.5% annual CPI increase last month and Argentina 58.0% in April. Many countries in Latin America and Eastern Europe have inflation rates above 10%. Europe Russia reported inflation at 16.7% in March. In comparison, China, Saudi Arabia, and Japan had much lower CPI growth in April at 2.1%, 2.3%, and 2.5%, respectively.

China adopts new rules for non-war military actions

  • China promulgated an outline of non-war military operations for its armed forces for trial implementation (《军队非战争军事行动纲要(试行)》) on Wednesday. The directive to launch the six-chapter outline (Ch), signed by President Xi Jinping as the Chairman of the Central Military Commission (CMC), has sparked much speculation as the full text of the document was not unveiled.

  • A typical theory is that the outline could pave the way for Beijing’s military operation in Taiwan. However, a Chinese military expert explained that “military operations other than war refer to operations…like disaster relief and humanitarian aid, as well as…maritime escorts and peacekeeping.”

U.S., EU plan to jointly aid countries for cybersecurity

  • The U.S. and EU are working on joint aid for developing countries to protect their critical infrastructure from cyberattacks. Being an effort to counter China’s global influence on digital infrastructure, the plan is discussed through the Trade and Technology Council (TTC) established last year. The U.S. has been aggressively promoting boycotts of China’s Huawei and ZTE, with the Biden administration seeing 5G security as “a high priority.”
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