Chinese ties exclude Australian lithium miners from US cash Peter Ker Resources reporter Dec 4, 2023 https://www.afr.com/companies/minin...n-lithium-miners-from-us-cash-20231202-p5eoj0 Some of Australia’s biggest lithium mines could be ineligible for US government subsidies after Washington issued rules excluding critical minerals with high levels of Chinese ownership or processing. The US Department of Energy issued draft guidance on Saturday that defined a “foreign entity of concern” as any company more than 25 per cent owned by Chinese, North Korean, Iranian or Russian shareholders. The Greenbushes mine is owned jointly by IGO, China’s Tianqi and Albermarle. Greenbushes produced about 45 per cent of Australia’s lithium last year. Getty Such foreign entities will be excluded from billions of dollars of subsidies offered under US President Joe Biden’s two major green innovation reforms: the $US369 billion ($553 billion) Inflation Reduction Act and the $US550 billion Infrastructure and Jobs Act. Australian miners had expected to be big winners out of Mr Biden’s green agenda, which has incentivised US battery and car makers to source minerals such as lithium, nickel and cobalt from nations like Australia that have free trade agreements with the US. But China’s role as the dominant customer and original investor in the Australian lithium sector will prevent many miners from accessing the subsidies, while rewarding players such as Wesfarmers and Liontown Resources that have built non-Chinese lithium businesses in WA. Chinese companies such as Ganfeng and Tianqi were the earliest foreign investors in Australia’s lithium industry, and remain big shareholders in major mines like Mt Marion and Greenbushes respectively. Greenbushes produced about 45 per cent of Australia’s lithium last year and is widely viewed as the world’s biggest and best hard rock lithium mine. Chengdu-based Tianqi owns 26 per cent of Greenbushes and 51 per cent of the Kwinana refinery – located in the electorate of Resources Minister Madeleine King – that turns the Greenbushes ore into battery-grade lithium hydroxide. Ms King, who visited Washington in October, said the government continued to work with the US to “ensure Australian companies benefit from the IRA”. Both Greenbushes and the Kwinana assets would be ineligible for US subsidies under the draft’s suggestion that a 25 per cent “equity interest” from a Chinese company would make an entity “subject to the direction” of China. Mt Marion is 50 per cent owed by Ganfeng, with the other half owned by Rich Lister Chris Ellison’s Mineral Resources. An even larger part of the Australian lithium sector could be ruled out if the US adopts the draft’s approach to processing of critical minerals. China was the destination for 98 per cent of Australia’s major lithium product – spodumene concentrate – in the year to June, and the Department of Energy said it wanted to account for the fact that several critical segments of the battery supply chain are “predominantly processed and manufactured within covered nation boundaries”. China’s ability to halt foreign-owned processing facilities operating on Chinese soil was directly highlighted as a concern in the draft. “A covered nation will be able to exercise legal control (potentially forcing an entity to cease production or cease exports) over an entity with respect to any critical minerals that are physically extracted, processed, or recycled, any battery components that are manufactured or assembled, and any battery materials that are processed within those boundaries,” said the draft. However, the draft made clear that companies working in several jurisdictions could still be eligible for subsidies for the critical minerals they processed outside of China. The clause appears to mean the biggest American lithium producer, Albemarle, could theoretically be eligible for US government subsidies for the lithium hydroxide it processes at Kemerton in WA, but not for the lithium produced at its Meishan and Qinzhou plants in China. Kemerton has traditionally been fed with ore from Greenbushes, but Albemarle could claim there was no Chinese involvement if Kemerton was fed with ore from WA’s Wodgina mine, which it shares with Mineral Resources. Mineral Resources also wholly owns the Bald Hill lithium mine and has minority stakes in numerous lithium exploration companies. Wesfarmers, Liontown may still benefit Wesfarmers is building a lithium hydroxide processing plant at Kwinana that will be fed with ore from WA’s Mt Holland mine. Both assets are owned by Wesfarmers under a partnership with Chilean company SQM. Mineral Resources’ facility at Mount Marion in Western Australia. Chile is not considered a “foreign entity of concern” by US lawmakers, suggesting the Wesfarmers lithium production chain will be eligible for US subsidies. But Wesfarmers may need to keep a close watch on Chinese involvement with SQM, given Tianqi already owns 23.77 per cent of the Chilean company. The draft rules could also benefit Liontown, which has avoided Chinese customers when signing offtake agreements for the spodumene concentrate its Kathleen Valley mine will start producing next year. Liontown will instead sell 90 per cent of its product to non-Chinese customers like South Korea’s LG Chem and American companies Tesla and Ford. While the Greenbushes and Mt Marion mines have big individual Chinese shareholders, Saturday’s draft suggested that miners could fall foul of the new rules if 25 per cent of their stock was “cumulatively” held by Chinese investors. The Tianqi lithium hydroxide plant at Kwinana south of Perth. “For the purposes of determining control by a foreign entity (including the government of a foreign country), control is evaluated based on the combined interest in an entity held, directly or indirectly, by all other entities that qualify,” the draft said. That clause could have local miners scanning their share registers to ensure that at least 75 per cent of their stock is held by non-Chinese shareholders. The “collective” clause highlights the importance of the big changes on the register of $11 billion lithium exporter Pilbara Minerals this year; Ganfeng owns almost 6 per cent of Pilbara and Chinese battery maker CATL sold its 7 per cent stake in March, AustralianSuper spent big in November to acquire more than 5 per cent of Pilbara, which has recently sought to build a strong relationship with US ally South Korea. Directors of Pilbara Minerals were in the Korean city of Gwangyang on Friday to attend the official opening of the company’s new lithium hydroxide processing joint venture with Korean giant POSCO. BHP, IGO, Wyloo may benefit The hardline approach to Chinese ownership could benefit Australian nickel miners such as BHP, IGO and Andrew Forrest’s Wyloo, given many of their Indonesian nickel rivals have significant levels of Chinese ownership. IGO’s win in nickel could be offset by the fact it is Tianqi’s partner in the Greenbushes and Kwinana lithium assets. The US draft could also bifurcate the Australian rare earths sector between those with significant Chinese investors and those without. Treasurer Jim Chalmers is currently probing the register of rare earths aspirant Northern Minerals, where several Chinese investors are involved in a boardroom struggle. Chinese investors have also established a significant foothold in the many small companies hoping to unlock Australia’s next major mineral sands and rare earths province in Western Victoria. Ms King said mechanisms crucial for the US to enforce its foreign ownership policy in the critical minerals sector – such as transparency and traceability – were an area of collaboration between Canberra and Washington, after her October visit to the US. “We continue to work with Australian industry and the US government to ensure Australian companies benefit from the IRA,” she said. The draft published by the US Department of Energy on Saturday will now enter a consultation phase, meaning the rules could yet change before they are finalised. But major changes appear unlikely, given the draft largely echoes the approach taken to foreign ownership by Mr Biden’s “Chips Act”, which sought to break China’s stranglehold on the supply of semiconductors. It also raises the likelihood that Chinese links will prevent Australian miners from accessing the next big opportunity within the US political system; the looming reform of the Defence Production Act. Mr Biden has pledged to make Australia a “domestic source” under the DPA, thereby increasing the chances that the US Defence Department’s procurement teams will turn to Australian producers of rare earths, tantalum and other minerals to help make equipment such as night-vision goggles, helicopter rotors and fighter jets. While the Inflation Reduction Act has captured headlines for its promise of tax credits for carmakers that use prescribed levels of US and Australian minerals in their batteries, some mining industry executives believe the DPA could ultimately be more significant for Australian industry, given “domestic” status would permanently advantage Australian producers. Many of the incentives in the IRA, on the other hand, are subject to sunset clauses, meaning Australian miners may struggle to access certain IRA subsidies beyond 2032.
Chinese billionaire named as one of America’s biggest landowners Chen Tianqiao owns 198,000 acres (80,127ha) of Oregon timberland, making him the country’s 82nd-largest property owner. PHOTO: BLOOMBERG Updated 2 Hours Ago NEW YORK – A Chinese national who made his fortune from online gaming has emerged as one of the most significant non-American holders of land in the United States. Chen Tianqiao owns 198,000 acres (80,127ha) of Oregon timberland, making him the country’s 82nd-largest property owner, according to the Land Report’s latest ranking. Mr Chen, 50, acquired the acreage from Fidelity National Financial Ventures for US$85 million (S$113 million) in 2015. Oregon tax records in December disclosed the name of the beneficial owner as Shanda Asset Management, the same moniker as Mr Chen’s Singapore-based holding group. His Oregon property makes him one of the biggest individual owners of American land by a non-US citizen. Only the Irving family of Canada – No. 6 on the Land Report’s list with more than 1.2 million acres of Maine timberland – owns more. Foreign ownership of US land – particularly land used for farming – has become a sensitive political issue in recent years. About 40 million acres of American agricultural land was owned by non-US interests as at 2021, according to the most recent US Department of Agriculture data, with entities from China owning the equivalent of 0.03 per cent of all US farmland. Some lawmakers have pushed for national rules restricting foreign investment in American agricultural property. The Senate voted in July, 2023, to ban the sale of farmland beyond a certain acreage or value to people or businesses from China, Russia, Iran and North Korea, but the measure was not ultimately signed into law. Almost half of all states have some sort of restrictions on foreign ownership. A native of Zhejiang Province, Mr Chen started an online gaming company, Shanda Interactive, in 1999. Within five years it had become one of China’s largest Internet companies and was listed on the Nasdaq in the US. Mr Chen took the company private in 2012 and moved his holding group’s headquarters from China to Singapore. His investments span public and private equities, venture capital and real estate, according to Shanda’s website. He and his wife Chrissy Luo made an initial US$115 million donation to found the Tianqiao and Chrissy Chen Institute for Neuroscience at the California Institute of Technology in 2016 with the mission of advancing understanding of the brain. Ultra-wealthy investors seeking an inflation hedge and uncorrelated assets have increasingly flocked to farmland and other rural properties in recent years. The average value of US cropland jumped 8.1 per cent in 2023 and has risen by more than a third since 2020, according to the USDA. The gains are driven by food demand and high inflation but also by interest in rarefied properties, like classic western ranches, that offer recreation as well as investment return potential. The country’s biggest landowner is the Emmerson family, owners of timberland empire Sierra Pacific Industries, followed by billionaires John Malone, Ted Turner and Stan Kroenke. BLOOMBERG
Don't forget to thank your politicians for selling you out to China and to anyone else with (corrupt) dosh in their pockets. Money first, everything else comes second to a polly.
https://www.yahoo.com/news/china-population-time-bomb-explode-080000262.html China’s population time bomb is about to explode Matthew Henderson Sun, January 21, 2024 at 9:00 AM GMT+1·3 min read In his 2024 New Year message, Xi Jinping stated that the post-Covid Chinese economy had “sustained the momentum of recovery” and that all Chinese people, including in Taiwan, should share in the “glory of the rejuvenation of the Chinese nation”. Both these leaden phrases are fantasy. However confident Xi may feel in his autocratic grip on the Chinese Communist Party (CCP), he seemingly lacks both the vision and means to reverse China’s slide into a classic middle-income trap. The CCP’s expected economic bounce-back after the pandemic has not materialised; IMF forecasts are bleak. For 60 years, the Chinese population grew; we now learn it is beginning to contract. The death rate last year was the highest since 1974, when China was wracked by the chaos of Mao’s Cultural Revolution. But even more alarming, the 2023 birth rate fell by 5.7%, the lowest recorded in CCP history. China’s workforce is shrinking and its population aging. There are now 280 million CCP citizens aged 60 or over. Rather than Xi’s vaunted glorious rejuvenation, a massive demographic time bomb in China is ticking. How did this develop, and will Xi be able to defuse it? Around 1980, the CCP decided that the rate of population growth was harmful and launched mandatory birth planning measures known as the ‘One Child Policy’. Negative incentives and coercive force were then used to drive down birth rates for more than 30 years. By degrees it became clear that things had gone very wrong. Traditional patriarchal bias resulted in widespread selective female abortion, infanticide and abandonment. In China there are now 110 males for every 100 females, amounting to some 34 million ‘excess’ males. The productive labour and taxes of one young worker now have to boost the state pensions of 4 retired relatives. The number of retired CCP citizens will increase more than 30% in the next decade. The current pension system simply cannot handle this. In response, the CCP has recently adopted policies intended to encourage the young generation to have more children. However it’s proving much more difficult to achieve this than it was to bully people to have less. A measure of Xi’s desperation is his de facto order last May that China’s 2 million military personnel must take part. The rest of the population are unimpressed by the various material incentives to increased fertility. Like it or not, following Xi’s prolonged, ineffective Zero Covid lockdown the young people of China are increasingly inclined to passive resistance to the Party’s transactional interference in their private lives. Since the pandemic hit, Chinese social media have been full of nihilistic, disaffected exchanges between young people about the gap behind Xi’s fabricated ‘China Dream’ and their own hopeless existence. No amount of state censorship has stifled this. The realities are stark. Last year, 11.6 bn Chinese graduates tried to enter the workforce. One in five is likely to remain unemployed. Others who did find work are victims to an obsolete ethic of unrewarded hard work and sacrifice. They prefer to do the bare minimum and abandon vain hopes of career advancement, an approach known as “lying flat”. Xi has singled this idea out for strong criticism but has nothing to offer in return. Worse still, in one speech he told the young five times to toughen up and learn to “eat bitterness”. They are not the least impressed by his exhortation to ‘seek self-inflicted hardships’ in the new economic normal. Increasingly, Chinese people realise that their leaders have abandoned all pretence of a reliable social contract in justification for single-party rule. Neither they, nor the free citizens of Taiwan, have the least faith in talk of China’s “glorious rejuvenation”. Both sides of the Straits can see that the emperor in Beijing now has no clothes.
https://edition.cnn.com/2024/01/29/business/evergrande-ordered-to-liquidate-intl-hnk/index.html Evergrande, symbol of China’s property crisis, heads to liquidation
Opinion The West hasn’t grasped the scale of the disaster facing China By Matthew Henderson February 9, 2024 https://www.smh.com.au/business/the...he-disaster-facing-china-20240208-p5f3jz.html China’s Spring Festival has huge demographic and political significance. It’s the last surviving relic of a past world, where extended families gathered at their home villages to share respectful greetings to the old, wishes for prosperity (“Gong xi fa cai” in Mandarin) among the younger generation, and joy at the births of new heirs and descendants. Chinese President Xi Jinping has said China won’t be considered a “true power” until it has developed its own airliner.Credit: Bloomberg Nearly 40 years of the coercive One Child Policy, not to speak of uncounted deaths from Covid-19 among the elderly last Spring Festival, has taken an irreversible demographic toll on festival jollity. This year it is snow, not the pandemic, that is disrupting travel and spoiling the party. But this too is a starkly apt metaphor for the wintry grip of Xi Jinping’s authoritarian power. “Good wishes, get rich” rings hollow in these days of economic stagnation and decline. At home and abroad, much attention was paid on February 6 to an extraordinary Chinese stock market rally, apparently based largely on news that Xi Jinping was in conclave with market regulators over new measures to revive market confidence. No doubt the timing of this characteristically command economy intervention was carefully chosen to evoke festive cheer. Anyone in the West buying into it, however, needs to take a step back and think again. After all, the rise was led by recognisably state-directed investors. For years Xi has made much of his achievements in “lifting millions out of poverty”, quietly ignoring the point that this was more about removing Communist ideological blockers to prosperity than it was implementing a better-balanced economic model. This year, the other shoe has fallen. Bad loans, rent-seeking by inept local government and state-owned enterprises overproducing led to a disastrous property bubble that has now burst. The 30 per cent share that the property sector held in the economy is now a millstone dragging it into the mire, with other sectors falling into disarray around it. Beyond the immediate crisis, things aren’t much better in the longer term. China’s workforce is ageing and shrinking, creating a headwind for growth. Younger generations, meanwhile, are increasingly disaffected. Youth unemployment hit a record high of over 21 per cent in June 2023. The Government’s response was to stop publishing the figures. Small wonder then that market sentiment is so cautious. While Western media outlets are increasingly willing to publish harsh criticisms of the Chinese leadership’s economic ineptitude, international institutions are still treading cautiously. In December, the World Bank published a readable, elegant China Economic Update which outlined in meticulous detail the quantitative evidence for a slew of ills currently afflicting the Chinese economy. As befits the organisation’s expertise and credibility, the report also offers a series of suggestions as to what it would be “appropriate” for China to do to revive its fortunes. Given the degree to which Xi Jinping has taken personal control of the levers of state power, he is unquestionably the sole arbiter of high-level economic policy. It’s accordingly of note that there is nowhere in the entire 58-page document a single reference to the Chinese Communist Party (CCP), let alone Xi Jinping. China’s economy is locked in a population doom spiral, loaded with bad debts. But as bad as the economic situation is, the political risks should weigh even heavier. Diplomatic niceties and corporate nerves mean that this failure to name names is replicated in much heavy-weight Western assessment and analysis. The result is a widespread, misguided impression that China has an economy run much like any Western free market, with issues that might “appropriately” be dealt with in a relatively conventional manner. It is probably true that a well-planned and executed programme of coordinated reforms could lessen a number of China’s current economic headwinds. But they will not be so dealt with, because that is not what Xi Jinping does. An artificial, short-term surge in market optimism whipped up by the February 6 buying spree does not amount to a credible policy for fixing the mess that the CCP has made of its post-Covid revival, or for liberal economic reforms. China’s population is ageing more quickly than most of the world’s developed economies due to decades of family planning.Credit: Bloomberg Xi Jinping has a completely different agenda, which includes such economically risky aims as annexing Taiwan, and continuing his support for Putin’s Russia. All his intervention in the stock market has done is highlight how irrelevant conventional market forces are in China. Most rational Western analysis agrees that economic engagement with the PRC is unavoidable. China’s economy is locked in a population doom spiral, loaded with bad debts. But as bad as the economic situation is, the political risks should weigh even heavier. China’s national strategy under Xi is driven by a political, military and economic contest with the West. The autocrat has staked his reputation on hard, exclusive Chinese nationalism and independence from the Western-led rules-based order. He has already shown in Hong Kong something of his intentions for Taiwan. Last year, it was reported that 68 per cent of major corporations bought political risk insurance in 2022, compared with 25 per cent in 2019. China, where firms are subject to sudden expropriation, and operate at the whim of political overlords, was seen as a particular risk factor, and one it was increasingly hard to insure. The US investment bank chief executive who last September said he was “highly cautious” about Chinese risk in late November stated bluntly that if there was war in Taiwan, all bets would be off; his bank would exit China if the US government ordered him to. Economists and business analysts focusing on the prospects for a rise in GDP or a fall in unemployment are focusing on entirely the wrong issues. Our understanding of the Chinese economy was flawed, failing to see how much was built on debt and thin air. The next thing to unravel could be our last, treasured illusions about how Xi will react to his country sinking into an economic mire, with a falling population. It’s time to prepare for a new cold war. Telegraph, London
US, Japan, Australia, and Philippines Stage Military Drills in South China Sea By Web Staff April 8, 2024 https://www.ntd.com/us-japan-austra...ilitary-drills-in-south-china-sea_984529.html Navy ships from the United States, Japan, Australia, and Philippines participate in join exercises in South China Sea on April 7, 2024, in a still from video. (Armed Forces of the Philippines via Reuters/Screenshot via NTD) The United States, Japan, Australia, and the Philippines held their first joint naval exercises in the South China Sea on Sunday, where Beijing’s aggressive actions to assert its territorial claims have caused alarm. The show of force included anti-submarine warfare training. A statement by the Philippines’ armed forces said the drills were held within the Philippines’ Exclusive Economic Zone in the South China Sea and involved aircraft and naval vessels, including littoral combat ship USS Mobile, Australian frigate HMAS Warrumanga, and Japanese destroyer JS Akebono. The exercises involved communication activities and officers of watch maneuvers aimed at improving interoperability among the four countries’ forces, it said. China’s military said on Sunday that it had conducted air and sea patrols, and that all activities that “disrupt the South China Sea” are under control, an apparent response to naval exercises by the United States and its allies. The defense chiefs of the United States, Japan, Australia, and the Philippines had announced on Saturday that they would hold joint exercises in the sea to safeguard the rule of law and uphold the right to sail through and fly over the waters. China’s ruling communist party has long-simmering territorial disputes with a number of Southeast Asian nations in the South China Sea, a major shipping route. A brief statement from the Chinese military’s Southern Theater Command said it had organized patrols and that “all military activities that disrupt the South China Sea and create hotspots are under control.” The statement did not mention the United States or the joint exercises. Likewise, the United States and its allies did not mention China in their statement, but the four countries reaffirmed their stance that a 2016 international arbitration ruling—which invalidated the Chinese communist regime’s expansive claims in the South China Sea—was final and legally binding. The growing tensions in the disputed waters are expected to be high on the agenda when U.S. President Joe Biden hosts his Japanese and Philippine counterparts in a summit at the White House this week. Last year, the Chinese foreign ministry warned against military exercises involving the United States and its allies in the disputed waters harming its security and territorial interests. U.S. Defense Secretary Lloyd Austin said in a separate statement that the exercises “underscore our shared commitment to ensuring that all countries are free to fly, sail, and operate wherever international law allows.” Australian Defense Minister Richard Marles said “respect for national sovereignty and agreed rules and norms based on international law underpin the stability of our region.” Defense Secretary Gilberto Teodoro Jr. said the military drills on Sunday would be the first in a series of activities to build the Philippines’ “capacity for individual and collective self-defense.” Aside from China and the Philippines, the long-simmering disputes in the South China Sea, a key global trade route, also involve Vietnam, Malaysia, Brunei, Japan, and Taiwan. But skirmishes between Beijing and Manila have particularly flared since last year with China’s increasing presence in the region. Washington lays no claims to the strategic seaway but has repeatedly warned that it’s obligated to defend its longtime treaty ally the Philippines if Filipino forces, ships, and aircraft come under an armed attack, including in the South China Sea. China has warned the United States not to intervene in the disputes. In the latest hostilities last month, the Chinese coast guard used water cannons that injured a Filipino admiral and four of his navy personnel and heavily damaged their wooden supply boat near the Second Thomas Shoal. The cannon blast was so strong it threw a crewman off the floor but he hit a wall instead of plunging into the sea, Philippine military officials said. The Philippine government summoned a Chinese embassy diplomat in Manila to convey its “strongest protest” against China. Reuters and The Associated Press contributed to this report.
NZ's participation still ostracized (by USA) due to NZ's anti nuclear vessels stance. This has been going on for many years. The Australia, New Zealand, United States Security Treaty (ANZUS or ANZUS Treaty) is a 1951 non-binding collective security agreement initially formed as a trilateral agreement between Australia, New Zealand, and the United States;[1] and from 1986 an agreement between New Zealand and Australia, and separately, Australia and the United States, to co-operate on military matters in the Pacific Ocean region, although today the treaty is taken to relate to conflicts worldwide. It provides that an armed attack on any of the three parties would be dangerous to the others, and that each should act to meet the common threat. It set up a committee of foreign ministers that can meet for consultation. Australia, New Zealand, United States Security Treaty ANZUS member states Abbreviation ANZUS Formation 1 September 1951; 72 years ago Type Military alliance Purpose Collective security Region Pacific Rim Methods Intelligence sharing Joint military exercises Membership Australia New Zealand (partially suspended) United States The treaty was one of the series that the United States formed in the 1949–1955 era as part of its collective response to the threat of communism during the Cold War.[2] New Zealand was suspended from ANZUS in 1986 as it initiated a nuclear-free zone in its territorial waters. In late 2012, the United States lifted a 26-year-old ban on visits by New Zealand warships to US Department of Defense and US Coast Guard bases around the world. New Zealand maintains a nuclear-free zone as part of its foreign policy and is partially suspended from ANZUS, as the United States maintains an ambiguous policy whether or not the warships carry nuclear weapons and operates numerous nuclear-powered aircraft carriers and submarines; however New Zealand resumed key areas of the ANZUS treaty in 2007.[3][4] Wiki.
Chinese government linked to illicit fentanyl trade House select committee reveals direct evidence of Beijing subsidizing fentanyl exports A delegate walks to his seat … more > By Bill Gertz The Washington Times Tuesday, April 16, 2024 https://www.washingtontimes.com/news/2024/apr/16/chinese-government-linked-to-illicit-fentanyl-trad/ Beijing’s communist government is supporting illicit trade in deadly fentanyl by offering tax rebates and other incentives to manufacturers in China, according to a bipartisan report by the House Select Committee on the Chinese Communist Party. An investigation by the committee, based on data gathered from the Chinese government’s internet, revealed extensive links between fentanyl trafficking and the Chinese government which is under tight control by the CCP. The government “directly subsidizes the manufacturing and export of illicit fentanyl materials and other synthetic narcotics through tax rebates,” the report states. “Many of these substances are illegal under the PRC’s own laws and have no known legal use worldwide,” the report says. “Like its export tax rebates for legitimate goods, the CCP’s subsidizing of illegal drugs incentivizes international synthetic drug sales from the PRC. The CCP has never disclosed this program.” The findings of the report mark the first time direct connections between the Beijing government and illicit exports of fentanyl and related products have been disclosed. “The CCP are not just bystanders. They are prime movers,” former Attorney General William P. Barr said Tuesday during a committee hearing on the report. “They are knee-deep in actively sponsoring, encouraging and facilitating the production and export of fentanyl and fentanyl precursors for distribution in the U.S.,” he said. Mr. Barr said the United States is sustaining a casualty rate from drug overdoses comparable to those suffered in a world war. During the Trump administration, pressure on Beijing led to a halt in direct shipments of the deadly synthetic opioid that authorities say has killed more than 100,000 Americans a year, mainly through drug overdoses. Instead, exports of Chinese fentanyl, which is extremely potent and can be hidden in small packages, and the precursor chemicals used to make it, shifted to Mexico, where drug cartels operate, officials have said. Committee Chairman Mike Gallagher said at the hearing that President Ronald Reagan once said, “if you want more of something, subsidize it.” “Through its actions, the Chinese Communist Party is telling us that it wants more fentanyl entering our country. It wants the societal chaos and devastation that has resulted from this epidemic. And yes, it wants more dead Americans,” said Mr. Gallagher, Wisconsin Republican. The committee probe used open-source intelligence-gathering methods to reach its conclusions. The methods included data collection from government websites and documents, undercover communications with Chinese drug-trafficking companies and work with experts on the matter. The report states that the Chinese government regards support for fentanyl export as a form of asymmetric warfare that is part of its communist ideological battle with the United States and the West. The report quotes from the 1999 book by two PLA colonels called “Unrestricted Warfare,” which urges the military to use all forms of warfare to achieve its strategic goals, including “drug warfare — obtaining sudden and huge illicit profits by spreading disaster in other countries.” “The PRC-sourced illicit fentanyl and fentanyl precursors have indeed ‘spread disaster’ in the United States,” the report states. Key findings from the investigation reveal that the Chinese government provided grants and awards to companies “openly trafficking illicit fentanyl materials and other synthetic narcotics,” the report states. “There are even examples of some of these companies enjoying site visits from provincial PRC government officials who complimented them for their impact on the provincial economy,” the report said. A committee aide who briefed reporters on the report said the CCP provides government subsidies to Chinese companies that manufacture fentanyl precursors and other synthetic narcotics. The subsidies are provided in the form of rebates for value-added taxes that are used to promote other goods like electric vehicles. “We now know it does the same for illegal synthetic narcotics, and we know these subsidies work,” the aide said. The government incentive program has been in place since 2018 and committee investigators determined that it supports at least 17 Illegal synthetic narcotics, 14 deadly fentanyl forms. The government also owns stakes in several Chinese companies tied to drug trafficking, including a prison linked to human rights abuses that owns a drug-trafficking chemical company. Another publicly traded Chinese company was found to be hosting thousands of solicitations for open drug trafficking on its websites. China’s role in the U.S. fentanyl crisis was raised during the summit between President Biden and Chinese President Xi Jinping in California last November. The two leaders agreed both nations would resume discussions on curbing Chinese exports of fentanyl, which China cut off in August 2022 to protest the visit to Taiwan by then-House Speaker Nancy Pelosi. China’s government had denied any role in supplying fentanyl to the United States. Chinese Embassy spokesperson Liu Pengyu said China, at the United States’ request, cracked down on fentanyl-related criminal activities at the source in 2019 and stepped up drug controls after the November summit. “It is very clear that there is no fentanyl problem in China, and the fentanyl crisis in the United States is not caused by the Chinese side, and blindly blaming China cannot solve the U.S.’ own problem,” Mr. Liu said. Last year, a Foreign Ministry spokeswoman criticized Biden administration sanctions on Chinese companies for their role in fentanyl exports and said Americans’ demand for drugs is the main cause of the fentanyl problem. The House report said China has failed to prosecute cases involving illicit exporters of fentanyl and precursor chemicals. Instead of investigating drug trafficking, Chinese security services have failed to cooperate with U.S. law enforcement agencies and in some cases notified Chinese targets of investigators of American law enforcement probes, the report said. Additionally, despite appeals from the Biden administration to curb fentanyl-related exports, China’s government is allowing the open sale of fentanyl precursors and other illicit drug materials to be sold on the Internet, which is strictly controlled in China. Committee investigators found in a review of seven e-commerce sites in China more than 31,000 instances of Chinese companies selling controlled chemicals used by drug traffickers. “Undercover communications with PRC drug trafficking companies (whose identities were provided to U.S. law enforcement) revealed an eagerness to engage in clearly illicit drug sales with no fear of reprisal,” the report says. Extensive Chinese censorship of all online references to domestic drug sales is not matched to international sales. For example, the Chinese words for “fentanyl” and “cash on delivery” are blocked. But no similar electronic curbs are in place for the export of illicit narcotics from China, the report said. The report said China “strategically and economically” benefits from the fentanyl crisis that has helped Chinese organized crime groups prosper as leading global money launderers while enriching the Chinese chemical industry. “While the PRC government publicly acknowledged in November 2023 that the trafficking of fentanyl precursors and other illicit narcotics materials in the manner described above is illegal under Chinese law, the Select Committee found thousands of PRC companies openly selling these illicit materials on the Chinese internet—the most heavily surveilled country-wide network in the world,” the report says. The report recommends that the U.S. government take a series of steps to counteract Chinese fentanyl exports. One recommendation is to set up a joint task to counter opioids that would concentrate all non-military elements of U.S. power toward a strategy to destroy the global fentanyl supply chain. Other findings call for new authorities for law enforcement and intelligence agencies to prioritize targeting fentanyl trafficking; and strengthened U.S. sanctions against those involved in the fentanyl trade. The government also should enact and enforce trade and customs restrictions on fentanyl trafficking and close regulatory and enforcement gaps that are being exploited by Chinese criminals engaged in money laundering and fentanyl trafficking. In May 2023, the Treasury Department imposed sanctions on 17 entities in China and Mexico for their role in fentanyl trafficking.
Philippines sends ships to disputed atoll where China building 'artificial island' By Reuters May 11, 2024 https://www.reuters.com/world/asia-...-china-building-artificial-island-2024-05-11/ A Philippine Coast Guard personnel looks through a binocular while conducting a resupply mission for Filipino troops stationed at a grounded warship in the South China Sea, October 4, 2023. REUTERS/Adrian Portugal/File Photo MANILA, May 11 (Reuters) - The Philippines said on Saturday it has deployed ships to a disputed area in the South China Sea, where it accused China of building "an artificial island" in an escalating maritime row. The coast guard sent a ship "to monitor the supposed illegal activities of China, creating 'an artificial island'," the office of President Ferdinand Marcos Jr said in a statement, adding two other vessels were in rotational deployment in the area. Philippine Coast Guard spokesperson Commodore Jay Tarriela told a forum there had been "small-scale reclamation" of the Sabina Shoal, which Manila calls Escoda, and that China was "the most probable actor". The Chinese embassy in Manila did not immediately respond to a request for comment on the Philippine assertions, which could deepen the bilateral rift. The Philippine national security adviser called on Friday for expelling Chinese diplomats over an alleged leak of a phone conversation with a Filipino admiral about the maritime dispute. Beijing and Manila have been embroiled for a year in heated stand-offs over their competing claims in the South China Sea, where $3 trillion worth of trade passes annually. China claims almost all of the vital waterway, including parts claimed by the Philippines, Brunei, Malaysia, Taiwan and Vietnam. The Permanent Court of Arbitration ruled in 2016 that Beijing's claims had no basis under international law. China has carried out extensive land reclamation on some islands in the South China Sea, building air force and other military facilities, causing concern in Washington and around the region. A Philippine vessel has been anchored at the Sabina Shoal to "catch and document the dumping of crushed corals over the sandbars", Tarriela said, citing the "alarming" presence of dozens of Chinese ships, including research and navy vessels. Tarriela said the presence of Chinese vessels at the atoll 124 miles (200 km) from the Philippine province of Palawan coincided with the coast guard's discovery of piles of dead and crushed coral. The coast guard will take marine scientists to the areas to determine whether the coral piles were a natural occurrence or caused by human intervention, he said. He added it intends to have a "prolonged presence" at Sabina Shoal, a rendezvous point for Philippine vessels carrying out resupply missions to Filipino troops stationed on a grounded warship at the Second Thomas Shoal, where Manila and China have had frequent maritime run-ins.