SinoInsight 1
On July 31, U.S. President Donald Trump told reporters the U.S. “may be banning TikTok” or “doing some other things” with the Chinese-owned company. News reports around the time noted that Microsoft was in talks to buy TikTok from its parent company ByteDance.
On Aug. 2, Reuters reported that Trump was giving Microsoft only 45 days to negotiate the acquisition of TikTok. The following day, ByteDance founder Zhang Yiming wrote in an internal letter defending the company’s strategy to sell TikTok that “America and some countries” have created a challenging “anti-China” atmosphere with their recent “attacks” against China and Chinese companies.
On Aug. 5, U.S. Secretary of State Mike Pompeo announced the “Clean Network” initiative to “protect America’s critical telecommunications and technology infrastructure” from malign actors like the CCP. The initiative calls for the disconnecting of U.S. telecommunications networks from untrusted PRC carriers; the removal of untrusted PRC applications that threaten American “privacy, proliferate viruses, and spread propaganda and disinformation”; the prevention of pre-installing or installing untrusted PRC apps, including the removal of Huawei apps from app stores; securing America’s cloud-based systems accessible to “foreign adversaries through companies such as Alibaba, Baidu, and Tencent”; and ensuring that undersea cables that connect America to the global internet are not “subverted for intelligence gathering by the PRC at hyper scale.”
Pompeo noted that “more than thirty countries and territories are now Clean Countries, and many of the world’s biggest telecommunications companies are Clean Telcos.” He also called on allies and partners in government and industry around the world to join the U.S. in securing “data from the CCP’s surveillance state and other malign entities.”
OUR TAKE
1. Some observers have decried the Trump administration for creating a “Great Firewall” with its Clean Network initiative. While the analogy may seem reasonable at a glance (and is also headline-grabbing), it grossly misrepresents what the CCP and the U.S. are doing with their respective programs. The CCP uses its “Great Firewall of China” to strengthen its malign surveillance, persecution campaigns, and authoritarian control over China. In contrast, the U.S. and other nations that are part of the Clean Network program are trying to stop the CCP from stealing their data and compromising their national security. Even seemingly innocuous apps like TikTok can be turned to the CCP’s advantage; TikTok gathers large amounts of personal data from American citizens, and the CCP can legally force the company to hand over its data on “national security” grounds. Thus, it would be more accurate to say that the U.S. and the over thirty countries in the Clean Network program are rejecting the CCP’s technology “Trojan Horse” rather than erecting a pernicious “Great Firewall.”
2. Anecdotal evidence circulating on Chinese social media suggests that PRC apps may be more sinister than appearances suggest.
According to an overseas Chinese media outlet, some Chinese TikTok users suspect that the TikTok app is secretly listening in on them and sharing their conservations with advertisers on the Taobao e-commerce site because the latter app will promote certain products to them mentioned in conservations but not typed in the Taobao search function.
Another wide-circulated post on Chinese social media claims that the recently shuttered PRC consulate in Houston was involved in coordinating a cyber operation where clips of the BLM and Antifa riots were sent to African-Americans with the TikTok app, supposedly to gin up support for the riots in the African-American community. While the post cannot be independently verified, it is well within the CCP’s capability and character to conduct such influence operations.
3. The CCP resorted to the usual propagandistic cliches in attacking the Clean Network program, accusing the U.S. of “hegemonic behavior” and “political manipulation in an attempt to maintain its high-tech monopoly.” The Clean Network program, however, is far less nefarious than the CCP claims. As some commentators have pointed out, it is questionable how the new restrictions will be implemented and enforced. For instance, the State Department does not have the power to force Google to purge PRC apps, and the U.S. government cannot stop people from using the apps that are already installed on devices. And even if the U.S. and other countries participating in the program find a way to enforce it, the Clean Network will be nothing like the CCP’s techno-totalitarian “Great Firewall.”
4. The Clean Network program will create fresh headaches for Xi Jinping and the CCP. On the propaganda front, the CCP needs to de-escalate “new cold war” tensions with the U.S., but still has to find some way to hit back to avoid being cornered by its own skewed “century of humiliation” propaganda. On top of that, the CCP needs to project strength per Xi’s “Big Diplomacy” (大外交) strategic line announced at the 19th Party Congress. As the CCP struggles with its various strategic lines and “new cold war” priorities, its propaganda against the Clean Network could start sounding “confused” or become relatively muted. Once the CCP believes that there is no way back from a “new cold war,” it will likely play the “racism” card in earnest against the United States. The Trump administration will require a “culture strategy” to effectively counter a “no holds barred” CCP propaganda offensive.
Meanwhile, Xi’s factional rivals can now add the Clean Network to the list of Xi’s failures to handle the Sino-U.S. relationship and prevent escalating tensions, and capitalize on the situation to heap pressure on him. Domestic political pressure would force Xi to tighten control over the regime and even purge some high-level cadres to keep the rest in line. There is a good chance of political Black Swans emerging in China this year.
5. The Sino-U.S. “new cold war” is rapidly heightening political risks in China. Businesses, investors, and governments need to make contingencies for the event that a “Berlin Wall” moment befalls the CCP.
SinoInsight 2
On Aug. 3, a Chinese social media post on corruption by military vehicle manufacturer Dongfeng Motor Corporation and People’s Liberation Army went viral and was hotly discussed. According to the post, a number of PLA troops died during the recent Sino-Indian border skirmishes because Dongfeng reportedly used low-grade steel in constructing the “Dongfeng Warrior” armored light utility vehicle that was in use during the skirmishes. Also, members of the Dongfeng management from senior executives down to production unit leaders all took kickbacks from military orders to the tune of about 60 million yuan per person. The post also claimed that Dongfeng used to make 160 million yuan from producing 1.1 billion yuan worth of that particular armored light utility vehicle used at the border in the early period of production, but reported a profit of just 550,000 yuan from an output of 6.9 billion yuan worth of vehicles in 2019. The post claims that the PLA has since removed Dongfeng as a military contractor.
On Aug. 4, the official PLA Daily newspaper published two opinion pieces on “ammo wastage” during the Southern Theater Command’s recent naval operations in the South China Sea. The articles recalled an incident where troops firing naval artillery hit the target on the first try, but continued firing the remaining allotted ammunition for that particular live firing session (five shells). After the session, the troops were told off by an external detachment chief of staff attached to the naval vessel for “wasting ammunition.” The articles also recount the CCP Eighth Route Army’s hard times during the Sino-Japan conflict as a cautionary tale about why troops should be efficient and not “waste ammo” during training.
OUR TAKE
1. The Chinese social media post about corruption involving Dongfeng Motor Corporation and the PLA cannot be independently verified. However, recent disciplinary action against Dongfeng, as well as the motor company and the PLA’s history of corruption, suggest that the corruption incident is more than just apocryphal.
On June 15, Chinese and Indian troops clashed at locations in eastern Ladakh along the Line of Actual Control (LAC). News reports say that at least 20 Indian soldiers died in the skirmish, along with an unrevealed number of PLA troops. To this day, the PRC continues to withhold information about PLA deaths at the LAC.
On June 24, Chen Jianxian, a deputy chief engineer at Dongfeng, was investigated by the local disciplinary commission in Shiyan City, Hubei Province. On the same day, Zhou Wangsheng, a deputy general manager of Dongfeng’s Special Equipment Division, was investigated by the Central Commission for Discipline Inspection team stationed in Dongfeng.
According to publicly available information, Zhou Wangsheng was involved in the early research and development of the “Dongfeng Warrior” vehicle as a key researcher. Chen Jianxian was also a key researcher in the “Dongfeng Warrior” project, and later served as dean of Dongfeng’s military vehicle R&D institute alongside his position of deputy general manager.
In November 2014, the CCDI team stationed in Dongfeng announced that it had punished as many as 55 Dongfeng employees within a month in response to reports lodged against them. Prior to the CCDI team’s arrival at Dongfeng, 11 employees (8 managers and 3 senior executives) had been disciplined for corruption.
Because it takes two hands to clap in corruption cases, it is highly unlikely that Dongfeng alone was responsible for reportedly producing shoddy military vehicles. Indeed, the two Dongfeng employees who were recently investigated are likely scapegoats for a more complicated corruption case involving both Dongfeng and the PLA. The PLA became massively corrupt during the Jiang Zemin era when Jiang lieutenants Xu Caihou and Guo Boxiong were vice chairs of the powerful Central Military Commission. Under Xu and Guo, buying and selling of rank and office was commonplace, and senior officers amassed huge wealth through taking bribes and other corrupt activities. For instance, mainland media reported that 20 men took two nights to fill up four trucks worth of valuables, including a gold Mao statue and expensive maotai liquor, after deputy military logistics chief Gu Junshan’s house was raided following his arrest in 2012.
2. The “ammo wastage” articles in the PLA Daily point offers some useful insights into the current state of the PLA.
The fact that the PLA’s mouthpiece needs to caution the troops against “ammo wastage” suggests that belt-tightening policies are underway, which in turn hints at financial shortages in the PLA and the CCP regime at large.
As officers rush to comply with the “ammo wastage” policy in the CCP’s “prefer left rather than right” (寧左勿右) fashion, the quality of troop training and combat preparedness in the PLA, which is questionable to begin with, will be further compromised. Compromised training and preparedness, as well as a shortage of military funds, would in turn lead to more embarrassing incidents for the CCP like the Sino-India border clash.
The interference by an external naval detachment chief of staff in a training session is also irregular for military in a normal (i.e., non-communist) country. Put another way, the “ammo wastage” incident inadvertently exposes the problems of political interference in military operations, which would lead to unnecessary disruptions in peacetime training and complicate matters in war.
Given the PLA’s culture of corruption, it is reasonable to speculate that “ammo wastage” was not the true reason for the naval detachment chief of staff’s “anger.” For example, it would not be beyond PLA officers to pocket a slice of the training budget instead of buying the required ammunition, then fume at “wasteful” soldiers for using up limited ammo.
