AI-augmented games from China have gained commercial success worldwide. Tencent and NetEase, China’s two largest gaming companies, have achieved significant global reach with their gaming portfolios. Popular games such as Tencent’s Honor of Kings and NetEase’s Justice use AI technologies such as machine learning and natural language processing to create dynamic, adaptable non-player characters that interact with players in sophisticated ways.[2] Tencent continues to invest in its global presence, recently announcing a US$15 million investment to develop a comprehensive global esports ecosystem.[3] NetEase also has made strides in the international market with titles like Harry Potter: Magic Awakened, a mobile game co-developed with Warner Bros. This demonstrates NetEase’s strategy of leveraging high-profile IPs and partnerships to expand its global reach.[4]

The recent global hit Black Myth: Wukong, developed by Game Science, garnered over US $400 million on gaming platform Steam within three days.[5] In the game, AI enhances character animations and refines facial expressions, including for the main character, the Monkey King Wukong. AI also creates an immersive sound environment with dynamic, real-time adjustments.[6]

The tightening of the approval process for domestic game releases in 2018 and government restrictions on the time children and teenagers can spend on video games from 2021 have spurred Chinese game developers to turn to international markets.[7] The COVID-19 pandemic fueled the gaming industry’s explosive growth.[8] A wave of new gamers worldwide presented developers everywhere with a much larger audience and diverse opportunities for profit. This is evident in the case of Honkai: Star Rail, developed by Chinese game developer miHoYo, where over 40 percent of its revenue in 2023 came from overseas.[9] Released in April 2023, the game integrated AI technologies to improve the facial expressions and actions of characters, and enhance the immersive experience.[10] It won Apple’s iPhone Game of the Year Award in 2023[11] Similarly, Genshin Impact, released in 2020 by miHoYo, reached an accumulated revenue of US$5 billion by February 2024.[12] To capitalise on this global market, miHoYo established Cognosphere in 2022, a publishing arm based in Singapore. According to its website, it has 5000 employees across offices in the United States, Canada, Korea, Japan, and Singapore.[13]

AI-powered, globally appealing content

Genshin Impact is about an adventure to seven different imaginary lands;[14] its locales feature the architectural styles of six world regions, including China (Liyue), Japan (Inazumau), Germany (Mondstadt), France (Fontaine), South Asia and Middle East (Sumeru), and South America (Natlan). For example, Inazuma features structures inspired by traditional Japanese pagodas and Shinto shrines. The Cathedral of Mondstadt is a prominent example of Gothic architecture with pointed arches, ribbed vaults, and large stained-glass windows. Sumeru’s architecture features Islamic design elements such as intricate tilework, large domes, and minarets. Honkai: Star Rail features an interstellar travel story woven through with themes of commercial space travel, Mars exploration, and the climate crisis. This narrative blend of futuristic space travel and dystopian concerns has global resonance.

MiHoYo also frequently releases promotional materials such as videos combining scenes in video games with Chinese cuisine,[15] festivals,[16] and arts.[17] gameplay trailers, and songs in multiple languages to create an inclusive experience for players in different countries.[18] Genshin Impact supports thirteen text languages (English, Simplified Chinese, Traditional Chinese, Japanese, Korean, Indonesian, Thai, Vietnamese, German, French, Portuguese, Spanish, Russian) and four voice-over languages (English, Chinese, Japanese, Korean).[19]

The founder of miHoYo, Cai Haoyu 蔡浩宇, graduated with a computer science degree from Shanghai Jiaotong University. He founded the company’s AI research lab in 2020, establishing the company as a leaders in enhancing game designs with AI technologies.[20] The company developed an AI tool[21] allowing players to upload their photographs into the system and transform them into the pink-haired main character ‘March 7’ in the game Honkai: Star Rail. This AI-driven customisation enhances player engagement.

MiHoYo aims also to harness the power of large language models to generate scripts for gaming characters.[22] The company’s AI lab has co-authored academic papers with Fudan University on the topic of AI agents[23]—autonomous characters whose behaviour and dialogue can be dynamically generated. This research promises to enhance efficiency and enrich player experiences with diverse and dynamic dialogue. The challenge lies in ensuring that AI-generated narratives are contextually appropriate and meaningful.

Strengthening ‘cultural confidence’

The Communist Party of China’s policy focus on strengthening ‘cultural confidence’ 文化自信 also guides its video game industry’s global expansion. An often-overlooked section of the entertainment industry, the global video game market is in fact more than twice the size of the combined cinema and music markets.[24] Video games showcase technological innovation, cultural dynamism, and aesthetic values and are potential powerful ways to promote cultural narratives and soft power.  MiHoYo consciously infuses state-approved cultural elements in its AI augmented game design. Lumi, an all-singing, all-dancing digital avatar, for example, references the poem ‘youyou luming’ 呦呦鹿鸣 from the classical Book of Songs 诗经. The phrase means the joyful bellowing of deer but in nationalistic discourse signifies a prosperous country and harmonious society.[25] The Genshin Impact theme song The Divine Damsel of Devastation 神女劈观 is sung in the style of Peking opera. The music video drew a remarkable and over 13,000 comments on YouTube.[26]

Media reports in China celebrated Lumi, Genshin Impact, and other miHoYo products for their dedicated efforts in promoting traditional culture as IP content to a global audience, quoting glowing fan reviews that mention the attraction of Chinese culture.[27] One report credited miHoYo as an exemplary case of ‘Chinese culture going global’ 文化出海.[28]

MiHoYo has also collaborated with the Sanxingdui Museum in Sichuan province,[29] creating characters, narratives, and treasures in Genshin Impact inspired by gold mask and bronze sculptures discovered in the Sanxingdui archeology site, which the CPC has been touting as part of its campaign to promote the notion of continuous Chinese civilisation.[30] MiHoYo also announced its plan to develop Genshin Impact and Honkai: Star Rail into animated films.[31] The project is supported by the Shanghai Municipal Government as part of its efforts to boost the city’s movie industry.[32]

Concerns over censorship and data privacy

The international success of Chinese gaming companies such as Game Science, Tencent, NetEase, and miHoYo, as with the short-video platform TikTok, has engendered concerns over data privacy, national security in countries including the United States and Australia, and content policy.[33] For instance, ahead of the debut of Black Myth: Wukong, a company affiliated with the game’s developer sparked controversy by issuing a list of forbidden topics for livestreams, including politics, feminism, and China’s video game industry policies.[34] The game developers have been accused of fostering a misogynistic culture within the company.[35] The lack of inclusivity and the promotion of such an anti-feminist stance alienates a significant portion of the gaming community.

Adding to this criticism, Black Myth: Wukong which draws inspiration from the sixteenth century novel Journey to the West 西游记 has significantly altered the portrayal of female characters. The original story includes powerful female characters like the Princess Iron Fan and the Female King of Women’s Country, who possess significant agency.[36] These characters have special powers and play crucial roles, either aiding or obstructing the journey of the monk and the Monkey King. Yet, Black Myth: Wukong largely sidelines female characters, simplifying and demonising them in ways that strip away their original complexity.

Regarding to the issue of data privacy, The collection of massive amounts of user data also poses ethical issues not confined to Chinese companies: the US social media giant Meta was fined for $1.3 billion for violating EU data privacy laws in 2023.[37] The issue for Chinese firms is compounded by concerns about the lack of transparency and explicit rejection of global human rights standards by China’s governing Communist Party. Faced with such concerns, Cognosphere, miHoYo’s Singapore-based publisher, has made several updates to its privacy policy outlining user rights, including over personal data, the right to rectify inaccurate data and request the deletion of personal data.[38] The company stores user data on servers located in several regions, including the United States, Hong Kong, the European Union, Singapore, and Japan.

There is still room for bilateral or multilateral negotiations about the kind of personal information about players the Chinese companies are allowed to collect, the location and monitoring of data servers and clear consent regarding the collection and use of personal data such as voice and location.

In conclusion, the global expansion of China’s AI-augmented games has largely been propelled by restrictive government policies at home. Yet while China’s gaming companies have enjoyed wide popularity and economic success internationally through inclusive narratives, successful marketing and AI technology, governments need to address data privacy. Proactive measures on data privacy and less content restriction would help the games’ potential to enhance Chinese cultural soft power.

Notes:

[1] Niall Firth, ‘How generative AI could reinvent what it means to play’, MIT Technology Review, 20 June 2024, online at: https://www.technologyreview.com/2024/06/20/1093428/generative-ai-reinventing-video-games-immersive-npcs/

[2] Kai Er, ‘How does AI improve video games?’ AI 怎么把游戏变好玩? Sina Finance, 17 May 2023, online at: https://finance.sina.cn/blockchain/2023-05-17/detail-imyuaqhw5560477.d.html

[3] Craig Chapple , ‘Honor of Kings set for June 20th global launch after $15 billion+ revenue in China’, PocketGamer, 16 May 2024, online at: https://www.pocketgamer.biz/honor-of-kings-set-for-june-20th-global-launch-after-15-billion-in-revenue-in-china/

[4] Carson Taylor, ‘NetEase’s Shifting Global Strategy,’ Naavik, 7 November 2023, online at: https://naavik.co/digest/netease-global-strategy/

[5] Kelly Le and Ann Cao, ‘Black Myth: Wukong is increasing China’s appetite for AAA games, but next one could take years’, South China Morning Post, 24 August 2024, online at: https://www.scmp.com/tech/big-tech/article/3275709/black-myth-wukong-increasing-chinas-appetite-aaa-games-next-one-could-take-years’

[6] Pengpai News 澎湃新闻, ‘Dang chuantong IP yudao xiandai AI, hei shenhua, wukong yong zhongguo wenhua jingyan waiguo wangyou’ 当传统IP遇到现代AI《黑神话：悟空》用中国文化惊艳外国网友, The Paper, 21 August 2024, online at: https://www.thepaper.cn/newsDetail_forward_28481173

[7] Ben Dooley and Paul Mozur, ‘Beating Japan at Its Own (Video) Game: A Smash Hit From China’, New York Times, 18 March 2022, online at: https://www.nytimes.com/2022/03/16/business/genshin-impact-china-japan.html

[8] Simon Read, ‘Gaming is booming and is expected to keep growing. This chart tells you all you need to know’, World Economic Forum, 28 July 2022, online at: https://www.weforum.org/agenda/2022/07/gaming-pandemic-lockdowns-pwc-growth/

[9] Feng Ye, “Tecent, NetEase and miHoYo compete in global market” 腾讯、网易和米哈游的海外战事, 29 March, 2024, online at: https://m.jiemian.com/article/10984774.html

[10] Rebekah Valentine, ‘How Honkai: Star Rail Is Using AI Technology to Supplement Development’, IGN, 2 MAY 2023, online at: https://www.ign.com/articles/how-honkai-star-rail-is-using-ai-technology-to-supplement-development

[11] Apple Newsroom, ‘Apple Unveils App Store Award Winners: The Best Apps and Games of 2023’, Apple Newsroom, 11 November 2023, online at: https://www.apple.com/newsroom/2023/11/apple-unveils-app-store-award-winners-the-best-apps-and-games-of-2023

[12] Nick Rodriguez, ‘Genshin Impact Revenue Record’, Game Rant, 15 March 2023, online at: https://gamerant.com/genshin-impact-revenue-record

[13] miHoYo, online at: https://www.mihoyo.com/en/?page=about

[14] Emily Rose Marlow, ‘Genshin Impact: Every Statue Of The Seven And Where to Find Them’, The Gamer, online at: https://www.thegamer.com/genshin-impact-every-statue-seven-map-location

[15] Genshin Impact, ‘Gourmet Tour: “Liyue’s Cuisine Collection” Issue No. 1 | Genshin Impact Pause (k) 0:07 / 3:50 Gourmet Tour: “Liyue’s Cuisine Collection” Issue No. 2’ , online at: https://www.youtube.com/watch?v=X5Dd78jiSi8&pp=ygUfZ2Vuc2hpbiBpbXBhY3QgY2hpbmVzZSBjdWlzaW5lIA%3D%3D

[16] Genshin Impact, ‘Lantern Rite Promotional Video: Dream Upon a Lantern ‘ online at: https://www.youtube.com/watch?v=2kY4raFWXtM&pp=ygUfZ2Vuc2hpbiBpbXBhY3QgY2hpbmVzZSBmZXN0aXZhbA%3D%3D

[17] Genshin Impact, ‘Genshin Impact X Sanxingdui Museum Collaboration Event Teaser’ online at: https://www.youtube.com/watch?v=g_o9kN3LF5s&t=12s&pp=ygUZZ2Vuc2hpbiBpbXBhY3Qgc2FueGluZ2R1aQ%3D%3D

[18] Andrea Knezovic, ‘Genshin Impact Advertising Strategy Explained’, Udonis, 25 March 2024, online at: https://www.blog.udonis.co/mobile-marketing/mobile-games/genshin-impact-advertising

[19] Genshin Impact, “How to Change Languages in Genshin Impact”, October 4, 2020, online at: https://genshin.hoyoverse.com/en/news/detail/103728

[20] Zhu Taowei, ‘MiHoyo building Metaverse: AI Lab, Digital Avatar, and Neural Link’ 揭秘米哈游Metaverse布局：组建AI“逆熵”团队，自研Avatar，探索脑机接口, Core E-sport, 7 June 2021, online at: http://www.coreesports.net/15932.html

[21] The Paper News, ‘AI becomes a must for MiHoYo’成为了米哈游们的必选项, The Paper, 10 May 2023, online at: https://www.thepaper.cn/newsDetail_forward_23009338

[22] The Paper News, ‘AI becomes a must for MiHoYo’成为了米哈游们的必选项, The Paper, 10 May 2023, online at: https://www.thepaper.cn/newsDetail_forward_23009338

[23] Lumina, ‘AI Agent Launched! Fudan NLP Team Releases 86-Page Paper, Intelligent Society Is Close at Hand’ AI Agent启动！复旦NLP团队发86页长文综述，智能体社会近在眼前, Xinzhiyuan 新智元, online at: https://cloud.tencent.com/developer/article/2351355’

[25] Ren Jiang, ‘Between humans and deer: from the cry of the deer to longevity and prosperity人鹿之间：从呦呦鹿鸣到寿禄呈祥, The Paper, 26 May 2022, online at: https://www.thepaper.cn/newsDetail_forward_18266888

[26] Lumi Dances with the Moon, https://www.youtube.com/watch?v=yqeJM33NKlU

[27] Zhengguan Xinwen, ‘miHoYo Evokes Cultural Heritate to Promote Chinese Traditional Culture米哈游用非遗的形式展现中国传统文化，推动文化出口’, Sohu, 9 June 2023, online at: https://www.sohu.com/a/683502302_120546417

[28] Pan Yu, ‘The Divine Damsel of Devastation Attracts Cover Versions and Sparked Interests in Chinese Opera among Foreign Players《神女劈观》掀起翻唱“内卷”，也让外国玩家迷上中国戏曲’, The Paper, 28 January 2022, Online at: https://m.thepaper.cn/newsDetail_forward_16493488

[29] Genshin Impact, ‘Genshin Impact X Sanxingdui Museum Collaboration Event Teaser’, Genshin Impact Youtube Channel, online at: https://www.youtube.com/watch?v=g_o9kN3LF5s

[30] Christy Choi, ‘Faces of Sanxingdui: Bronze Age relics shed light on mysterious ancient kingdom’, CNN, 16 November 2023, online at: https://www.cnn.com/style/china-sanxingdui-relics-exhibition-nationalism-palace-museum-hong-kong/index.html

[31] Shanghai Municipal People’s Government, ‘Popular Chinese game to have own animation’, Government Online Shanghai, 23 September 2022, online at: https://www.shanghai.gov.cn/nw48081/20220923/015765806ffd4aab97c3395f89ca23cd.html

[32]Kevin Chu, ‘Genshin Impact Movie Update’, Screen Rant, 19 April 2024, online at: https://screenrant.com/genshin-impact-movie-update-hoyoverse-production-ufotable/

[33]  Samantha Hoffman, Tilla Hoja, Yvonne Lau & Lilly Min-Chen Lee, ‘Truth and reality with Chinese characteristics’, May 2024, online at:

https://www.aspi.org.au/report/truth-and-reality-chinese-characteristics; see also Dave Aitel and Jordan Schneider, ‘If You Play Videogames, China May Be Spying on You’, Wall Street Journal, 28 October 2020, online at: https://www.wsj.com/articles/if-you-play-videogames-china-may-be-spying-on-you-11603926979

[34] Daisuke Wakabayashi and Claire Fu, ‘Hit Chinese Video Game Seeks to Curb ‘Negative Discourse’, The New York Times, 20 August 2024, online at: https://www.nytimes.com/2024/08/20/world/asia/chinese-videogame-wukong-censorship.html

[35] Rebekah Valentine and Khee Hoon Chan, “How Black Myth: Wukong Developer’s History of Sexism Is Complicating its Journey to the West,” IGN, 20 November 2023, online at: https://www.ign.com/articles/how-black-myth-wukong-developers-history-of-sexism-is-complicating-its-journey-to-the-west

[36] Yanyuan Xu 許燕園, ‘Lun Xiyouji zhong san nvxing renwu xingxiang zhi yiyi ji zhuti huying’論《西遊記》中三女性人物形象之意義及主題呼應, Dissertation, Lingnan University, 2023, online at: https://commons.ln.edu.hk/cgi/viewcontent.cgi?article=1225&context=chi_diss

[37] Adam Satariano, ‘Meta Fined $1.3 Billion for Violating E.U. Data Privacy Rules’, The New York Times, 22 May 2023, online at: https://www.nytimes.com/2023/05/22/business/meta-facebook-eu-privacy-fine.html

[38] Cognosphere PTE. LTD, ‘Privacy Policy’, 18 January 2023, online at: https://genshin.hoyoverse.com/en/company/privacy

The post Games Gone Global: How China’s AI-augmented Games Found International Success appeared first on The China Story.

The editors

Kou Aizhe: Late in 2022, ChatGPT, an artificial intelligence (AI) chatbot, made a sudden yet impressive debut, sparking a wave of discussion in 2023. Suddenly, the spotlight was on the world of generative AI technologies, which use artificial intelligence to generate speech, images, videos and more. These technologies, often referred to as AIGC (Artificial Intelligence Generative Content), have also gained attention across various industries alongside ChatGPT’s skyrocketing popularity.

In the first six months of 2023, a wave of new technological advancement swept into the workplace. But what changes has this wave brought to the professional landscape? And how have these changes affected individuals within the workplace? We’ve invited four people from different industries to share some of the transformations they’ve experienced at work.

Our first speaker today, ‘Big Dragon’ (Da Long), is the founder of a small company. He was proactive in introducing AIGC tools to the workplace, which has already become the norm.

AI saves us money

Hello, everyone. My name is Zhu Bolong, and people around here call me Big Dragon. I’m the founder of a tech company, and we currently have about 20 employees. Our main business centres around dance-related fitness, games and training. Back in 2016, we switched from teaching dance offline to online. In 2020, we directed our focus towards motion-sensing dance
games that could be played on home TVs.

I majored in computer science at university. Although what I learned was not related to algorithms, I’ve always been interested in the tech industry. After just a week or two experimenting with ChatGPT, my business partner and I realised the huge potential of AI drawing tools.

We worried about facing competitors who could utilise AI more effectively and potentially push us out of the market. So, starting in February 2023, we made it a requirement for all our employees to start exploring the use of these AI tools. They had to learn even if they needed to put aside their regular tasks.

My business partner’s office is a few cubicles away from mine. One day, I was in my office when suddenly I heard him yell, ‘This is amazing!’ along with the F-word. I went over to his office to find out what was happening. I couldn’t see his face at first because his dual-monitor set-up blocked my vision. But as I got closer, I saw him kneeling in front of his computer.

Still facing the screen, he said, ‘You see this? It’s way better than what I can draw.’ My business partner started his career as a cartoon artist, and he’s worked as an animation director. He takes a lot of pride in his artistic ability. But on that day, it was like AI completely ‘broke’ him. He said, ‘There’s no way I can compete with this. I might as well team up with it.’ I told him, ‘All right. In the coming months, you can put most of your focus into exploring it and making it even better.’

Over the next month and a half, my business partner spent roughly 6 to 8 hours every day studying these AI drawing tools, often staying at the company until around 10 or 11 in the evening. They excited him immensely. Sometimes, I would also be in the office in the evening, and I’d hear him eating while the computer was busy creating pictures. He would often exclaim with surprise mid-mouthful.

Even before he familiarised himself with the use of prompts, plug-ins and so on, he achieved an impressive 50 percent or so increase in work efficiency. Now, several months on, we can almost generate what we want instantly, which is truly astonishing.

Initially, our colleagues from the technical team were quite dismissive of ChatGPT. When they heard that ChatGPT could assist with coding, they felt there were plenty of open-source codes online and that the code of ChatGPT didn’t necessarily adhere to coding standards better than theirs. However, once they mastered it, they realised that it could replace at least 30 percent of their workload, which is quite significant.

Our colleagues in the operations department initially attempted to use ChatGPT for writing, including articles for WeChat pages and video scripts. Similar to the initial experiences of our technical colleagues, when they didn’t know how to communicate effectively with ChatGPT, the generated content turned out overly artificial and formulaic. It lacked depth and substance.

I then showed them how to use AI to write about China’s 5,000 years of dance history with a summary of several important periods. I first used their method to ask AI to write on the topic and showed them the copy. Then I said: ‘This is your way of thinking. Let’s try it my way.’ I gave ChatGPT the prompt ‘Imagine you’re a stand-up comedian. Please summarise China’s dance history in a stand-up comedy style’, then it generated something quite different. My colleagues immediately understood that you can get ChatGPT to role-play, to write in a certain style and to word-count, paragraph and other requirements. This experience transformed their understanding of AI. It actually functions like a real human assistant. Once my colleagues learnt to communicate with it in the same way we communicate with humans, they were able to quickly put AI into effective use.

After that, my business partner and I have put ourselves in the position of the company’s managers and applied AI tools to our daily work to see what problems it can solve and how much efficiency it brings. Then we had to take action.

There was someone in our company who was responsible for design-related work. This does require a certain degree of originality, but his main job was to make poster images, characters and background effects. In February 2023, we discovered that AI could do this very well, and, unlike when using creativity tools such as Chuangkit, we don’t need to consider copyright issues with AI. When a colleague in the operations department discovered that he could complete this part of the design work through AI without designers, I contacted him directly to confirm whether he could complete the work by himself. After getting a definite answer, I went to the designer.

I called him to the stairwell to have a chat. At first, he thought I wanted to talk about something related to his current work. I said: ‘No. You know we are using AI now, and your position is consumption-oriented, not a revenue-generating one. What we need are employees who can bring in web traffic or profits to the company.’ Considering the optimisation of the personnel structure, I said to him, ‘I’m sorry. Your current position is no longer required. You can either transfer to another position or you can leave.’

He said that he needed some time to think. A day later, he came to me and said that he wanted to try a position in operations. But after another day, he said he’d decided to give up. He said, ‘I feel like even if I put in a lot of time on this new job, I still may not make much progress. I’d rather leave.’ The whole thing was brutal, and it was the first time I made a lay-off decision so quickly. Nonetheless, I still believe I made the right call because it was AI that replaced him.

Later, I heard from someone in the operations team that the sacked colleague was hit hard by the experience. He couldn’t find a new job for several months and stayed in his apartment every day. He was aware that he had been replaced by AI. Moreover, the apartment he rented was in the same building as our company, only a few floors above us, and he had just paid the rent. I felt really sorry, but there was nothing that I could do. We didn’t save a lot of money from his salary, but it was enough for a subscription fee to Midjourney [a generative artificial intelligence program], so now everyone else in our company can use it freely.

Later, we realised that we still needed a full-time UI designer to monitor the computer. It does seem cruel that we hired someone exclusively for the purpose of assisting the computer.

Only one week after the job was posted, we received close to 150 résumés, which was pretty scary. Our colleague responsible for recruitment interviewed approximately 20 to 30 of them. Almost all were high performers, but they lowered their salary expectations themselves. AI gives us advantages in recruiting people and negotiating salaries.

During the interviews, we told them that there was the possibility that their positions would be replaced by AI. Our current focus is on recruiting individuals who aren’t at the A level but are at the D level with the potential, with AI’s assistance, to do A-level work. In this way, our costs can be greatly reduced.

One of the candidates lowered his monthly salary requirement from RMB 12,000 to 8,000. He had previously worked in Beijing, where he could earn about RMB 15,000. Returning to Chengdu, he was hoping for RMB 12,000. I asked. ‘What is your salary expectation now?’ He replied, ‘RMB 8,000.’

Our colleagues’ PCs always have ChatGPT open, as they have become accustomed to using it as a search engine. Colleagues in the animation department always have Stable Diffusion or Midjourney open. As everyone’s productivity rises, it frees up a lot of time for breaks and even a little loafing on the job.

The first area we’re looking forward to is AI-generated animated videos, although the quality isn’t yet up to commercial standards. We think that will take three to six months.

Second, for dance-related products, we normally have to pay for the use of copyrighted music, a relatively big investment. There is a lot of music for which we cannot track down the copyright holders, and we have faced lawsuits in the past. But we expect that within the next three months AI will be able to produce any style of music we want. We do respect copyright, but when the creators charge an astronomical price for use of their work, say RMB 200,000, there’s no way we can use it. But AI can replicate their style, and it’s actually the musical style we’re after. So we hold great expectations for the ability of AI-generated music to subvert the music copyrights market.

My client is not at fault, and neither am I

Kou Aizhe: Our second speaker, A Li, works in the music industry. The law of demand and supply means that when companies like Big Dragon’s turn to AI-generated music, someone like A Li will begin losing customers.

My name is A Li. I’m 29 years old and live in Xi’an. I’ve been working in the music industry for six or seven years, doing things like soundtrack creation and song customisation.

I have a coding background and have always enjoyed learning new technologies. After I returned to work when the COVID-19 pandemic [restrictions] ceased at the end of 2022, I noticed a surge in AI-related content on the Internet. At the time, I was most interested in the emergence of AI ‘singers’: AI that could be trained to mimic perfectly a recorded human voice.

I joined a chat group on the subject. The shared document in the chat group was so long, even for someone like me with some coding experience, that it was tough to follow. I had to refresh my knowledge of coding, but after a week or so, I got the program running. I tried inputting my own voice first. I’ve done a lot of recording jobs in studios, so I uploaded the materials to the cloud processor for 20 hours of memory training. I kept the computer running overnight.

The next morning, I downloaded the generated voice. Both my partner and I were in shock because it sounded exactly like mine. My mind was racing, and the next thing I knew, I was sending it to my mother, who heard it and said, ‘You still sing so badly!’ It chilled me that my own mother couldn’t differentiate my voice from AI.

It was thrilling and terrifying at the same time. It occurred to me that AI singing is so developed that there must be AI-generated content and product in all fields related to music.

I’m self-employed. Normally, I get commissions from clients, and there’s a collaborative process. This part of the business has not been lost. The area where I have experienced a greater loss of business is in the customisation of songs and soundtracks. I used to get a dozen or so orders a month, but now I get none. After asking around, I discovered that [AI] is so cheap that human labour simply cannot compete. What would have cost thousands of yuan in the past now cost only hundreds or less. This is a very natural market selection process.

When I first began experimenting with AI for work, I couldn’t use it effectively. After a client heard a demo I sent, he asked, ‘Who wrote this song? It sounds like it’s by someone who has little experience arranging music.’

After a week of using AI, I sent the client a new demo, and he said, ‘That’s pretty good. Can you sell it to me?’ The transformation was interesting and scary. He couldn’t tell the difference between human and AI any more. When I told him that the demo was made by AI, he was so shocked that his pupils dilatated. ‘This is AI?!’ he asked. I told him it took only 30 seconds to
produce, and he fell silent. He was struggling to process this shocking piece of information.

What the market pursues is efficiency. Although what we produce [as humans] may be better, it is inefficient. If our clients can’t tell if a song is written by a human or not, it just proves that AI-generated content has reached commercial standards.

After showing the demo to the client, he stopped contacting me. When I asked him why, he was honest and said that he had found someone else who was willing to use AI to generate content. After all, he wants to receive products in the fastest and most efficient way. What I aim for is higher-quality content, so it’s all right for him to stop cooperating with me.

The impact of AI is comparable to the Industrial Revolution. Textile workers stormed the factories and smashed the steam engine, but progress cannot be reversed. If you can really get the unit price down through AI, it’s not necessarily a bad thing for the individual consumer. While it’s painful for us in the music industry, and our profits will go down, it’s actually a boost for the consumer to be able to get the product they are looking for at a lower price.

In the past, if the client didn’t like our demo, we had to start from scratch and rewrite everything. Now if we use AI to make a demo, and the client thinks the style and content is OK, I only have to customise it further based on the client’s demand. This reduces communication costs and improves productivity.

This situation will force us to step up our game. If we don’t raise the quality of our work and create something artistic and original, we’ll definitely be replaced in the future.

My boss asked us, ‘You’re using AI. How come you’re still slow?’

Kou Aizhe: Our third speaker, Xiao A, is a rookie with only a year of work experience.

Hi, my name is Xiao A, and I’m 24 years old. I work as a game concept designer in Xiamen. I design characters, patterns and special effects for online games. The company I work for specialises in art and design, with more than fifty employees in the design team.

I have been fond of drawing since I was a kid, and considered becoming an art student. However, I came from a less developed region, and there’s a preconception that only students who fail academically studied art. I ended up studying engineering. I didn’t enjoy the courses at university. After graduation, I learned about game concept design and enrolled in several training courses. About two years after graduation, I started to work in the industry.

I joined the company last March, just over a year ago. Early this year, I began hearing about AI-generated paintings, and thought ‘Here we go again’. Starting from March, I began seeing a lot of AI-generated paintings on the Internet. At that time, it was less developed-people drawn with a dozen or so fingers. But it learned really fast and corrected mistakes, so that after a
short while most people couldn’t tell which paintings were generated by AI.

Back then I was involved in a project. The demand for illustrations suddenly surged. All my other colleagues were busy, so the company hired another person. He was given a draft sketch that had already been approved by the client, and was asked to refine it into a full version. The new colleague asked me, ‘How long would it take for me to finish refining the drawing?’ I said, ‘A week or so.’ He sent me an emoji meaning ‘Wow’, and I wondered what he meant. Did he think a week was too short for the task?

The new colleague used AI. I was right next to him. After he finished, he showed me the drawing and asked, ‘Is this OK?’ I didn’t want to be overly critical, so I just pointed out a few problems and told him, ‘Change this and that, and then send it to the manager.’

The manager told him frankly that the quality of the drawing was bad. It was not a particularly difficult task. Since the clothing in the picture was single-layered, at the beginning it worked quite smoothly with AI. However, some of the finer accessories tended to trip up AI. After the colleague had his work rejected, he asked me, ‘What should I do now?’

I said, ‘Didn’t I send you a bunch of guidelines and reference drawings? Why don’t you revise it according to those?

‘Do you mean I need to draw it by hand?’ he asked. He was in disbelief. ‘What about AI? Can AI help me?’ I was speechless.

We use an AI image generator called Stable Diffusion, and I’ve been learning how to communicate with it. But I never get what I want. I think the quality is still pretty poor. There is also a very serious issue: characters drawn by AI don’t seem to have genuine human emotions. Their facial expressions are so dull, and there is always some inexplicable blush on their faces, probably because people have been inputting a lot of images of this kind.

Most gamers now are quite averse to seeing traces of AI in the games they play, so after using AI to generate the illustrations, we have to erase the traces of AI manually. It’s like putting the cart before the horse. People say AI is here to assist humans, but in fact I feel like it’s quite the opposite. It is humans who now have to wipe AI’s arse.

I think our boss’s judgement has already been clouded by AI. He thinks that what it does is good and what humans draw is bad. It is fine for him to criticise young team members like me, but he even criticises our team leader. Our team leader is a relatively senior artist who’s been in the industry for almost eight years. Sometimes when the team leader is editing AI’s work, the boss comes up and says, ‘I think the AI’s drawing looks better’ Our team leader must be furious, but he doesn’t dare to say anything. When the boss isn’t busy, he just sits in the office and uses AI. Because of this, he thinks he can draw too and that he can teach others how to draw.

Editing is a huge workload for us. AI has not reduced our workload by much. Yet our boss has laid off a few people. As a result, my colleagues and I had to work overtime until 10.30pm for more than 20 consecutive days! The overtime work made everyone very depressed, and we all felt like we were on the verge of collapsing. Our team leader was also working overtime, and he said to us, ‘If you want to quit, make sure you have another job lined up. The job market is really bad.’

I have a couple of colleagues who left their previous jobs, and their job-searching journeys haven’t been smooth. They are all much better at game illustrations than I am. If you search the hashtag #failedinterview on social media, you will see many talented artists and designers struggling to find employment. Browsing these posts has been making me increasingly depressed; for a while, I was staying up until two or three in the morning scrolling. Honestly, I have no idea what my future holds. What if I quit my job and can’t find another one and am forced to change careers? Truth is, I don’t have the courage to resign because of this economic environment. I hope that my company fires me because at least I could get some compensation.

Anyway, I have never stopped drawing all these years. After work, before AI and now, I draw for myself. I still hope that my drawing skills can improve.

We want to be ‘preachers’ of Artificial Intelligence Generated Content (AIGC)

Kou Aizhe: Initially, the introduction of AI tools was meant to improve efficiency, but who actually benefits from this high efficiency? There is another group of individuals who have profited from the enormous technological transformations. The fourth speaker, Hu Bo, is one of them.

Hi, everyone. My name’s Hu Bo. I am a lead instructor of the AIGC program at Qieman Education. Our team is based in Beijing and consists of five members.

We discovered AIGC at the end of last year. Some AI drawing tools within the industry suddenly made headlines, and we believed at the time that this would affect the entire design industry in the future.

We already were doing online training, specialising in training graphic designers. So, initially, we integrated new materials, whether it’s how to use Midjourney or Stable Diffusion, as module supplements within our existing employment courses. It was only later that we separated them into a short course.

We stayed up for two nights and came up with the materials for the foundational course on AIGC: writing lesson plans, filming, recording and editing, all in two days. We needed to rush it because if we waited until everyone started doing this, we would have missed the boat.

At the beginning, the foundational course was relatively cheap, around RMB 300. We usually do live Q&A sessions with students on Douyin, and explain the contents of our courses on live stream. During one live session, we casually mentioned the pre-sale of this stand-alone foundational course, and in only about an hour and a half, nearly 80 people signed up for it.

Kou Aizhe: In the following month, Hu Bo gradually expanded and improved the course content, initially consisting of eight sessions focusing on the AI drawing software Midjourney. Eventually, this course was priced at RMB 1,099 and comprised more than 20 video lessons, a collection of software operation manuals and related materials, as well as guides on how to monetise contents on social media platforms like Xiaohongshu and Douyin.

Over the past few months, this new AIGC business line has generated several million yuan in additional revenue for his training institution.

Many companies have swiftly added proficiency in AIGC tools as a requirement in their job postings. But where do the eligible candidates come from? When universities are not responsive enough to provide new graduates with necessary skill training, after-school training institutions like Hu Bo’s seize the newly emerged opportunity and bridge the gap.

Many universities have invited him to give lectures on AIGC to students who are about to graduate.

For those big tech companies, the first requirement in their job descriptions is that candidates should be able to use Midjourney or Stable Diffusion. This means that AI operation skills have become a must. For example, a former student of mine worked for the ride-sharing app Didi. He told me that Didi is no longer hiring traditional designers; they only hire AIGC designers who can train AI using keyword descriptions. These positions are completely new. I’m not afraid of sharing what we teach: we study the job descriptions of companies and teach whatever the employer needs. To gain employment, students only need to complete their study accordingly.

Universities are forcing their students to learn about these new developments because they want their students to gain employment. This is brand-new and highly sought after. The students may have heard of things like ChatGPT or Midjourney yet have no idea of what they are.

My job is to get my students interested in AIGC. To achieve this I’ll have to keep up with industry developments. For instance, at Osaka University in Japan, researchers have successfully combined Stable Diffusion with MRIs in the hospitals to create a ‘human eye camera’; that is, AI can directly re-create what people see by reading their brain scans. The tremendous potential of AI is very intriguing for my students. This is also a topic for them to discuss in job interviews to give the interviewer the impression that they have a deep understanding of the industry. We pay attention to what is being researched in companies and universities, then we pass on the information to our students. Companies also see our students as ‘geeks’ who won’t need to be retrained after recruitment.

Kou Aizhe: According to Hu Bo, the employment rate of their students this year has increased by 30 percent compared to previous years thanks to the new AIGC content. He is so busy he now has time to research new developments in the industry only when travelling on trains and planes.

***

Translated by Master of Translation students Yuan Cai, Zhirui Chen, Yurun Dai, Yifan Li, Wenjing Liu, Jiaqi Tan, and Ke Wu at the University of Melbourne, under the guidance of Mr Yahia Ma. This translation has been edited by Annie Luman Ren and Linda Jaivin for clarity and length.

The post How AI Changed the Way We Work appeared first on The China Story.

Innovation in science and technology has become the main battleground of the global strategic contest.[1]

— Xi Jinping, 28 May 2021

Realising the complete reunification of the Motherland is the shared longing of all Chinese sons and daughters and represents the essence of National Rejuvenation.[2]

— Xi Jinping, 13 March 2023

Introduction

At the Two Sessions in March 2023, President of the People’s Republic of China (PRC) Xi Jinping defined complete ‘reunification’[3] with Taiwan as the ‘essence’ of China’s goal of National Rejuvenation, to recover the partly-imagined power, dignity, and territory enjoyed by China’s last imperial dynasty at its apex. However, the ‘Taiwan problem’ in recent years has been complicated by an issue that dominates global headlines: the emergence of Taiwan Semiconductor Manufacturing Company Limited (TSMC) as the global leader in the manufacturing of advanced logic chips. Taiwan now sits at the centre of a global contest for hard power and systemic legitimacy.

A country’s access to — or control over — TSMC’s advanced semiconductor manufacturing capabilities determines its ability to acquire the critical military and economic power enabled by frontier technologies such as artificial intelligence (AI). TSMC’s leading role has complicated both the Chinese and the American strategic calculus on Taiwan. On the one hand, the company’s advance to global prominence has increased both China’s incentive to pursue reunification and the United States’ incentive to prevent it. On the other, the reliance of both countries on TSMC has historically acted as a deterrent to any conflict that would compromise their access to its critical technology. The United States’ move to sever Chinese access to TSMC and reshore its own manufacturing capabilities could decrease the deterrent value of the company to both sides, further destabilising what President Xi in his report to the Twentieth Party Congress described as a ‘turbulent period of transformation’ 动荡变革期 in global affairs.

At a deeper level for the Communist Party of China (CPC), Taiwan’s leadership in a fundamental technology also inflames deep-rooted historical wounds. China was forced to cede Taiwan in 1895 after losing a war against Japan, which had beaten China to the modernisation process and grown strong by adopting Western technology from the Industrial Revolution. Taiwan is therefore a symbol of national humiliation as well as a cautionary tale of the risks of falling behind the global technological frontier. These issues of power, technology, and history are crystallised in US–China competition over TSMC.

The Global Semiconductor Industry

Semiconductors 半导体 — also called chips 芯片 and integrated circuits 集成电路 — fall into three categories. Logic chips act as the processing centre of devices and systems; memory chips store information; and analogue chips typically convert electrical signals into another type of energy, such as sound or movement, which interacts with the real world.

The semiconductor supply chain has three main steps — design, manufacturing, and assembly — that are underpinned by intellectual property, specialised software, equipment, and chemicals. Because of its high capital costs and complexity, the semiconductor supply chain has evolved to become globally distributed and specialised in a small number of countries. These global hubs of specialisation have created mutual dependencies across national borders, but also strategic chokepoints in the supply chain. Through its world-leading corporations, the United States occupies a dominant position in several crucial segments: the industry’s underlying intellectual property (IP), chip design — especially electronic design automation (EDA) software — and manufacturing equipment. Over the past ten to fifteen years, TSMC has become the world’s leading contract manufacturer of advanced logic chips, serving global giants such as Apple and Qualcomm, and conveying a major geopolitical advantage to Taiwan. China, a late starter in the global technology race, has long been uncomfortable with its dependence on foreign, and especially US and Taiwanese, semiconductor technology.

Hard Power

Semiconductors, as a fundamental and enabling technology, go to the core of hard-power considerations in Beijing and Washington. They are the building blocks of the digital world and a prerequisite for any country intending to lead the technologies of the future, including AI, quantum computing, biotechnology, and next-generation weaponry. The State Council’s Outline for Advancing the Development of the Nation’s Integrated Circuit Industry 国家集成电路产业发展推进纲要, published in 2014, offers the following assessment: ‘Accelerating the development of the integrated circuit industry is of major strategic significance to the transformation of the model of economic development, to safeguarding national security, and to increasing comprehensive national power.’

It is advantageous for any nation to have a certain level of self-sufficiency in semiconductor technology. Defensively, it offers secure priority access to the semiconductor technology required for the economic and military applications that underpin national strength. Offensively, it provides leverage over weaker countries, whether deployed as strategic denial through trade restrictions or as offensive cyber-capabilities. It is worth noting that in the wake of the revelations of Edward Snowden in 2013, official Chinese media insinuated — despite a lack of evidence in the public domain — that American semiconductor companies were complicit in the extraterritorial data-collection activities of the US National Security Agency.

Advanced logic chips — the production of which TSMC leads — are especially significant as they are crucial to AI, which the State Council’s 2017 New Generation Artificial Intelligence Development Plan identified as ‘a new focus of international competition’ and ‘a strategic technology that will lead in the future’. AI supports a wide range of Chinese government objectives, such as an ‘intelligent’ 智能化 military, an upgraded industrial base, and ‘smart’ governmen. Given the centrality of AI to the economic and military goals of Beijing, Washington, and other capitals, the stakes for access to TSMC-produced leading-edge logic chips are only rising.

The Historical Stakes for China

In modern history, one of the root causes of China’s backwardness and vulnerability to attack was its backwardness in science and technology.[4]

— Xi Jinping, 9 June 2014

For China, the presence of TSMC in Taiwan is not simply a hard-power consideration. It is inseparable from Beijing’s deeper historical commitment to ‘reunify’ with Taiwan and a present-day incarnation of old anxieties. Central to the narrative of China’s Hundred Years of Humiliation is the decisive role played by advanced technology in determining national power. Recent official accounts trace the Qing dynasty’s (1644–1912 CE) most shameful defeats to its failure to grasp critical inflection points in the global development of technology. According to CPC historiography, the failure of the Qing to engage with the First Industrial Revolution that emerged in the United Kingdom in the 1760s led to China’s vulnerability to attack and exploitation by the British Empire in the Opium Wars. Likewise, the failure of the late-Qing reforms starting in the 1860s — often called the Self-Strengthening Movement 自强运动 or Western Affairs Movement 洋务运动 — saw China miss the Second Industrial Revolution and lose the First Sino-Japanese War (1894–1895) that resulted in Taiwan coming under Japanese control. That is, the loss of Taiwan itself is directly connected to China’s historical failure to, in the Party’s language, ‘occupy the strategic high ground’ in advanced technology.

Since the turn of the twenty-first century, the Party has identified developments in information technology, biotechnology, new materials, and new energy as an emergent technological revolution on the scale of the Industrial Revolution. The opportunity to seize the unfolding technological revolution is ‘fleeting’ and the spoils of history await those who can successfully translate technology into power and prosperity. For Beijing, against the backdrop of China’s history of missed opportunities, US actions to deny its access to TSMC are freighted with a sense of foreboding that likely informed Xi’s prediction of ‘high winds and even stormy seas’ in his report to the Twentieth Party Congress. That is, for China’s leaders, acquiring world-leading capabilities in science and technology is central to the broader goal of ‘recovering’ national strength, dignity, and prosperity — an objective described by Xi as ‘growing strong’ 强起来 and achieving National Rejuvenation. Taiwan, by offering a version of Chinese modernity that differs from Xi’s ‘Chinese-style modernisation’ but has also successfully developed world-leading capabilities in a technology central to the new technological revolution (that is, semiconductors), represents an existential threat to the Party’s claim to being the sole steward of Chinese civilisation. In this respect, power and history converge in the ‘problem’ of TSMC.

Towards Decoupling

The Biden administration’s move on 7 October 2022 to significantly broaden technology export restrictions on Chinese semiconductor firms was the latest major step in an unravelling in relations over a decade or more.

Since at least the issuance of the US White Paper on China in 1949, Beijing has been concerned about American subversion, which evolved into a fear of containment during the Cold War. This translates into a longstanding discomfort with its dependence on foreign, and especially American, technology. This discomfort informed China’s renewed drive for technological self-sufficiency in 2006 with the issuance of its National Medium and Long-Term Plan for the Development of Science and Technology (2006–2020), the techno-nationalist ideas of which took shape in the Made in China 2025 initiative.

Since the release of the State Council’s 2014 Outline, the Chinese State has intensified its campaign to increase self-sufficiency in semiconductor technology. The first major pillar of this effort was the establishment of the two so-called Big Funds, capitalised in 2014 and 2019 with a total of 343 billion yuan. These are state-funded investment vehicles designed to support China’s domestic semiconductor industry. They were complemented by generous tax, land-use, and financing policies. The second pillar was an aggressive international mergers and acquisitions drive, often funded by capital from the Big Funds, to acquire overseas talent and technology. These strategies, combined with China’s willingness to use its increasing economic and military power in ways potentially damaging to American interests, alarmed business, political, and military constituencies in the United States and elsewhere, leading to an American policy response with two dimensions.

The first is a strategy to constrain China’s advanced semiconductor capabilities for the stated reason of safeguarding US national security. Starting in 2019, the United States utilised its dominance of the research and development that underlie the global semiconductor supply chain to target China’s two most important semiconductor companies: the semiconductor design company HiSilicon (a Huawei subsidiary) and foundry player Semiconductor Manufacturing International Corporation (SMIC). Both firms were added to the US Bureau of Industry and Security’s Entity List, which names companies and individuals subject to licence-based trade restrictions. The US Foreign Direct Product Rule (FDPR), meanwhile, restricted HiSilicon’s access to third-nation suppliers that use US technology, including TSMC, for advanced manufacturing.

The United States’ diplomatic strategy to convince allies and partners to constrain China’s advanced semiconductor capabilities has scored key victories. Most recently, Japan announced — without naming China — that it plans to impose export restrictions on twenty-three types of semiconductor manufacturing equipment. Dutch company ASML, the world’s monopoly supplier of extreme ultraviolet (EUV) lithography, has withheld or restricted the sale of key manufacturing equipment to Chinese firms. Without EUV lithography machines, SMIC will be unable to manufacture commercially at leading-edge nodes of five nanometres and below. Logic chips of that complexity — over which TSMC has a near production monopoly — are vital to advanced industrial economies because they enable the most powerful computational capabilities.

The second US policy response is a state-led effort to ensure US leadership in semiconductor technology and the reshoring of production of advanced semiconductors, for which the United States currently depends on Samsung and TSMC. The enactment of the CHIPS and Science Act on 9 August 2022 appropriated US$52.7 billion dollars to this end, of which US$39 billion is for manufacturing incentives.

In an important speech on 16 September 2022, National Security Advisor Jake Sullivan signalled an expansion of US technological containment of China. He discarded the previous approach of maintaining ‘relative’ advantages over competitors in a small subset of critical technologies: ‘Given the foundational nature of certain technologies, such as advanced logic and memory chips, we must maintain as large of a lead as possible.’ He also conceptualised technology export controls as ‘a new strategic asset in the US and allied toolkit to impose costs on adversaries’. On 7 October 2022, the Department of Commerce’s Bureau for Industry and Security issued a set of rules that restrict China’s ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors. At the core of these rules is a broadening of the scope of companies and persons restricted from selling to China and the deployment of the FDPR against a further twenty-eight Chinese advanced computing companies, preventing them from benefiting from US-origin technology that would enable access advanced semiconductors (defined as sixteen nanometres or below) for logic chips.[5]

As the decoupling of American and Chinese supply chains continues, there are implications for TSMC and its function as a deterrent to war.

Declining Deterrent: Taiwan’s ‘Silicon Shield’?

In her article in the November–December 2021 issue of Foreign Affairs, entitled ‘Taiwan and the fight for democracy’, Taiwanese President Tsai Ing-wen referred to her country’s semiconductor industry as ‘a “silicon shield” that allows Taiwan to protect itself and others from aggressive attempts by authoritarian regimes to disrupt global supply chains’. There was a degree of consensus among technologists and those engaged with global trade that TSMC acted as a strong deterrent to a hot war over Taiwan. Before the United States severed China’s access to TSMC’s manufacturing capabilities, both Chinese and American corporations were dependent on TSMC for the production of their leading-edge logic chips. TSMC’s factories operate under specific conditions and depend on uninterrupted sources of materials, water, and energy, as well as the highly trained scientists and professionals that operate them. A hot war would imperil these conditions and prove disastrous for both US and Chinese technological ambitions. But American measures to cut off China from TSMC’s advanced logic-chip manufacturing capabilities reduce the costs to China of any disruption to TSMC caused by war, thereby decreasing the deterrent effect of the ‘silicon shield’.

If technologists approached the question of war over Taiwan in terms of the stabilising role of TSMC, military planners saw the problem in terms of relative military capabilities. While the enormous costs of any war are obvious, some military experts are expressing concern about the deterrent effect of US military capabilities. Oriana Skyler Mastro of Stanford University has written that, in late 2020, her contacts in the Chinese military expressed for the first time the belief that the People’s Liberation Army (PLA) could successfully invade Taiwan. A March 2023 piece by veteran defence intelligence officer Lonnie Henley offered a sobering assessment of US military capabilities to overcome a sustained Chinese blockade of Taiwan. If the Chinese side perceives a favourable military balance or tentative American resolve, it will only further destabilise an already fragile status quo.

The strategic situation surrounding Taiwan is deteriorating, as longstanding and irreconcilable Chinese and American strategic interests with respect to the island move to the surface. The visit to Taiwan of Nancy Pelosi’s delegation on 2 August 2022 precipitated extensive military exercises by the PLA Eastern Theatre Command that effectively blockaded the island and triggered an increase in military activity in the Taiwan Strait. In his report to the Twentieth Party Congress in October, President Xi reaffirmed that unification with Taiwan ‘will certainly be realised, and can certainly be realised’, preferably by peaceful means, but by other means if necessary. Around the same time, US Secretary of State Antony Blinken and Chief of Naval Operations Admiral Mike Gilday both asserted the possibility that China’s timeline for unification with Taiwan had been brought forward.

While the looming danger of American power is a constant in the Party’s collective psyche, at the Two Sessions in March 2023, Xi for the first time squared off against the United States directly. He named the ‘unprecedentedly severe’ threat of American-led containment, foresaw a deteriorating international environment in which ‘the risks and challenges China faces will only become more and more severe’, and used a more decisive formulation to signal that reunification with Taiwan is absolutely integral to the destiny of the Chinese nation. Xi’s carefully chosen words matter, and these rhetorical shifts indicate that Beijing’s strategic posture is hardening against the perceived Western threat. The gravity of such pronouncements should not be underestimated.

Wartime Stories

Amid worsening relations and as the fabric of the globally integrated supply chain in advanced technology continues to fray, both Washington and Beijing are employing wartime metaphors and rhetoric to inspire national efforts for strategic security in semiconductors.

In his remarks delivered on 16 September 2022, Jake Sullivan referred to the CHIPS Act as ‘an investment larger than the real cost of the Manhattan Project’ — the United States’ era-defining acquisition of the atomic bomb, which ended the Pacific War and laid the foundation for the postwar order that China sees as preserving American interests. China’s leaders, state media, and the scientific community have long touted the Two Bombs, One Satellite 两弹一星 achievement of the Mao Zedong era as the model for China’s proven ability to realise technological breakthroughs that dramatically improve its security situation. China’s successful testing of an atomic bomb through the Two Bombs, One Satellite program in 1964 provided an effective deterrent to US encroachment into Asia and attack from the Soviet Union, with which it had severed relations. In a January 2021 interview, the prominent scientist and Fellow of the Chinese Academy of Engineering Li Guojie 李国杰 referred to lithography machines, etching technology, and EDA semiconductor design software as the ‘Two Bombs One Satellite project for the new era’.

Achieving self-sufficiency in core technologies that convey strategic advantage now sits at the centre of China’s economic model. This was reinforced by bureaucratic reforms announced at the Two Sessions that restructured the Ministry of Science and Technology to focus on breaking technological chokepoints. China’s quest for strategic autonomy in a febrile geopolitical context recalls the 1950s and early 1960s: it signifies a broadened role for the Party-State and a likely return to major national technology projects led by scientists who will devote their efforts to the patriotic cause. Mao called such reliable technocrats ‘red and expert’ 又红又专.

Despite SMIC’s reported breakthrough in manufacturing at seven nanometres, the medium-term prospects for China’s advanced semiconductor capabilities are not bright. It is uncertain how the US Department of Commerce’s rules will be implemented, but the stated intention of the Biden administration, building on the strategy of the Trump administration, is to utilise its extraterritorial reach to contain China’s development in advanced semiconductor technology to the greatest possible extent. The wheel of decoupling is now turning with its own internal momentum.

Conclusion

Since the 16th century, the world has gone through several revolutions in science and technology, each of which has profoundly shaped the structure of global power. In a sense, strength in science and technology determines the changes in the balance of political and economic forces in the world, and also determines the future and destiny of all countries and nations.[6]

— Xi Jinping, 9 June 2014

The lessons of history are never far from President Xi’s mind. He gave the above speech in 2014, which he observed was a Jiawu 甲午 year in the traditional Chinese calendar of sixty-year cycles — one of ‘special meaning’. The most famous Jiawu year in modern Chinese history was the disastrous year of 1894 when the Sino-Japanese War broke out, resulting in a humiliating peace treaty that granted sovereignty over Taiwan to the Japanese Empire. Xi’s mention of the Jiawu year freights China’s pursuit of technology with existential significance and indirectly links it to the fate of Taiwan.

From his recent language at the Two Sessions, President Xi appears to perceive that the Party’s protracted struggle against the American-led capitalist West has entered a new and potentially decisive phase. In attempting to deny China the very lifeblood of the new technological revolution — advanced semiconductors — the United States has struck at the heart of both Beijing’s anxieties and its ambitions. For US policy not only threatens China’s ability to rectify its history of missed technological revolutions; in doing so, it also imperils Xi’s vision for a rising Chinese world order that would use control over Taiwan to break through the American postwar ‘island chain’ containment strategy. In the narrow battle for technological primacy and the broader contest of systems between Beijing and Washington, history, power and destiny converge on Taiwan.

References

[1] Author’s own translation. For a bilingual version of this speech, see Wang Zichen, ‘Xi Jinping’s speech on science & tech on May 28, 2021’, Pekingnology, 9 June 2021, online at: https://www.pekingnology.com/p/xi-jinpings-speech-on-science-and?s=r

[2] Xinhuanet, ‘Xi Jinping delivered an important speech at the closing of the Fourteenth National People’s Congress in Beijing 十四届全国人大一次会议在京闭幕 习近平发表重要讲话’, Xinhuanet, 13 March 2023, online at: http://www.news.cn/politics/2023lh/2023-03/13/c_1129430109.htm

[3] This article uses the Party’s translation, ‘reunification’, for the Chinese term 统一, putting it in quotation marks to signify that Taiwan and mainland China have never been unified under the rule of the CPC.

[4] Xinhuanet, ‘Xi Jinping: Control key technology in own hands 习近平: 把关键技术掌握在自己手里’, Xinhuanet, 9 June 2014, online at: http://www.xinhuanet.com/politics/2014-06/09/c_1111056694.htm

[5] Access to advanced NAND and DRAM memory chips is also targeted.

[6] Xinhuanet, ‘Xi Jinping: Control key technology in own hands 习近平: 把关键技术掌握在自己手里’, Xinhuanet, 9 June 2014, online at: http://www.xinhuanet.com/politics/2014-06/09/c_1111056694.htm

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Australia is increasingly concerned about China’s military ambitions. The Defence Strategic Review 2023, released on 24 April 2023, suggests that ‘China’s military build-up is now the largest and most ambitious of any country since the end of the Second world War’. Whether the statement is true or not, it warns that China’s military rise, ‘without transparency or reassurance to the Indo-Pacific region… threatens the global rules-based order…that adversely impacts Australia’s national interests’. According to the Lowy Institute Poll 2022, 75 percent of Australians believe that China is very likely or somewhat likely to become a military threat to Australia in the next twenty years; 88 percent said they were either very or somewhat concerned about China potentially opening a military base in a Pacific Island country.

The governments of the United States (US) and its allies are certainly responding to China’s military rise. The Quadrilateral Security Dialogue (QUAD), a diplomatic and security network consisting of Australia, the US, India and Japan, was revived in 2017 to promote ‘an open, stable and prosperous Indo-Pacific that is inclusive and resilient’. Since 2015, the US Navy has been patrolling in the South China Sea. By 23 March 2023, the US Navy has conducted 43 reported freedom of navigation operations in the area. Particularly, during the Trump administration, it navigated once every two months between 2018 and 2020. Moreover, in September 2021, Australia, the United Kingdom (UK), and the US announced a trilateral security pact, known as AUKUS. On 13 March 2023, the three countries agreed to increase nuclear submarine (SSN) port visits and training in Australia. More significantly, Australia will purchase at least three Virginia-class SSNs from the US in the 2030s and build its first SSN with technical support from the two countries in the 2040s.

Some media outlets have been hyping up the possibility of war with China, suggesting China will invade Taiwan by 2026 or engage in a war with the US over freedom of navigation in the South China Sea. However, many China analysts have argued these claims are exaggerated and ‘devoid of concrete analyses on China’s intention and capability’. So, how much should Australia and its allies fear the PLA? While there are numerous intelligence and defence reports available, mostly from Washington, the public needs more context to understand China’s military rise.

Military Transformation Under Xi Jinping

Amidst China’s economic development, it has steadily increased its defence spending and military capability over the past three decades. According to the Stockholm International Peace Research Institute (SIPRI), China’s military budget has increased by an average of 13 percent annually, with spending around 5 percent of the government’s total budget throughout the last decade.[1] The PLA has developed numerous new types of military equipment, including the J-20 fighters, Jin-class nuclear-powered ballistic missile submarines, Shang-II-class SSNs, aircraft carriers, DF-41 Intercontinental Ballistic Missiles (ICBMs), and other materiel researched, designed, and built in China.[2]

China’s military rise appears to have become more ambitious during the mid-2010s. The country has been in the thrall of the ‘strong army dream’ 强军梦, an integral part of the goal of national rejuvenation. Xi Jinping, who is the Chairman of the Central Military Commission, also made a few speeches on China’s military modernisation. For instance, in 2013, he advocated building armed forces that would ‘obey the Party’s command, that are able to fight and to win, and that maintain excellent conduct’ in order to ‘safeguard national sovereignty, security, and development interests’. In a series of speeches around 2016, he described the goal of PLA modernisation as being to ‘achieve the goal of a strong army’ and ‘build a world-class military’. In 2017, he set out the three milestones for PLA development: basic mechanisation and major progress in ‘informatisation’ 信息化 by 2020, modernisation of national defence by 2035, and building an all-round world-class military by mid-century. As a political rhetoric, the military’s three milestones echo the Party’s ‘Two Centennial Goals’; as military objectives, Chinese commentators and scholars describe the world-class military as having world-class operational theories, personnel, training, weapons and equipment, law-based management, combat power, innovation abilities. Some also use these milestones to address the military’s shortcoming in mechanisation, informatisation, intellectualisation and operation.

The PLA has undergone several significant reforms during this period. In 2015, the People’s Liberation Army Rocket Force (PLARF) was established to coordinate China’s arsenal of land-based ballistic missiles, including nuclear weapons. In 2016, the PLA reorganised its seven theatre commands into five, each designed to counter different security threats: Eastern Theatre Command is responsible for Taiwan, Southern Theatre Command for the South China Sea, Western Theatre Command for the Sino-Indian border, and Northern Theatre Command for North Korea. In 2019, the Central Military Commission adopted a new military strategy for the PLA titled ‘Military Strategic Guidelines for the New Era’ to address the shift of strategic assessment outlined in the 2019 National Defence White Paper aimed at countering growing threats from the US and Taiwan. However, as Joel Wuthnow and M. Taylor Fravel have suggested, this ‘new’ strategy was proposed against the backdrop of Xi’s ideological consolidation and indicated little operational or strategic changes. Concepts from previous military doctrines, such as ‘near sea active defence’, ‘informatisation war’ and ‘integrated joint operations’, are still included in the 2019 military doctrine.

Xi’s speech at the Two Sessions merely summarises China’s continual military development, rather than signifying substantial changes in the timeline of national defence modernisation. The PLA is still gradually addressing its technological and operational limitations. The State Council Institutional Reform Plan 2023 unveiled significant steps to restructure the Ministry of Science and Technology, including the establishment of a Central Commission on Science and Technology 中央科技委员会 to enhance the Party’s leadership over scientific and technological development.

The reform intended to ‘[push] forward the building of a national innovation system and structural scientific and technological reform, [study] and deliberating major strategies, plans and policies for the country’s sci-tech development, and coordinat[e] efforts to resolve major issues of strategic, guiding and fundamental significance in the sci-tech sector’. Although the PLA’s structure is not affected by the reform, the goal of the reform, including to address the limitation of technological self-reliance and promoting integrated research between civil and the military, falls in line with some of the PLA’s objectives in its military modernisation. Defence science and technology has been crucial in China’s technological innovation, so institutional reform in science and technology is relevant to national defence modernisation. Following the State Council reform focused on the sci-tech sector this year, we should see further reforms within the PLA to ground force, logistics and maintenance support, military staff training, and integrated warfare.

Will China Wage a War?

The large-scale military exercises around Taiwan in early April (as a response to President Tsai Ing-wen’s meeting with US Speaker of the House Kevin McCarthy) suggest that the PLA has become more capable in integrated warfare and deployment of aircraft carriers. Nonetheless, military capability building is a gradual process. While the PLA has the budget and resources for research development, personnel training lags behind technological advances. For instance, a report from the US Naval War College suggests that the Chinese navy has ‘faced tremendous pressure to keep pace with the rapid expansion and modernisation of the [naval] surface fleet and its growing mission set’. According to an article published in a Chinese military magazine last year, the PLA Navy needs at least 200 pilots for its aircraft carriers, but it lacks of a fighter trainer specifically designed for carrier-based operations. Therefore, although the PLA Navy built its third aircraft carrier last year, construction of the fourth one was stalled. More importantly, apart from the a border skirmish with Vietnam in 1979 and a minor naval battle at the Johnson South Reef in 1988, also against Vietnam, the PLA has not fought in a war for more than four decades. It still lacks experience in warfare.

Multiple organisations in the US, including the US Air Force and the Centre for a New American Security (CNAS), have already simulated few war games of the PLA pursuing military operation against Taiwan, but with varying results. Some suggest that in a war between China and Taiwan, China would likely win. However, we should factor in US domestic political consideration in the hype of a war scenario. The outcome of those war game simulation needs to be weighed against the fact that there are often intentionally skewed in favour of US forces in order to strive for more resources for national defence.

Whether China has the capability to wage war, and whether China will go to war are two different questions. As the US Director of National Intelligence Avril Haines told the House Intelligence Committee, ‘It is not our assessment that China wants to go to war’. The concept of a world-class military, as Taylor Fravel, an expert in Chinese military strategy, argued, does not ‘illuminate the PLA’s global ambitions or how it envisions using force’. It has limited geopolitical implication of where China would project its military power. Rather, it expresses ‘China’s aspiration to become a leading military power in the world’. It is essential to distinguish the differences between China’s military ambition and policy outcomes.

Launching a war in the Indo-Pacific is complicated. Strategically as well as politically, the PRC would prefer to win Taiwan without fighting. It needs to consider the consequences of sanctions and sea lane supply blockages from the West if there is a war across the Strait.

Will AUKUS Help to Deter China’s Military Rise?

There is no doubt China’s military capability is on the rise. The AUKUS security pact has been described as a ‘demonstration of unity and resolve is as powerful deterrence signal to the region’. To the US, AUKUS indicates its commitment in maintaining its pivotal role in the Indo-Pacific. To Australia, AUKUS suggests Australia is more likely to rely on ‘the US committing to the “integrated deterrence” approach that the Biden administration set out in its 2022 Indo-Pacific strategy’. As Ben Herscovitch suggests, ‘if Australia chooses to deploy its nuclear-powered submarines in support of a US-led effort to defend Taiwan, then AUKUS will have made China’s military goals harder to achieve’.

However, it is important to note that the submarines themselves do not serve as a deterrent. The AUD 368 billion deal is a long-term process, and the first of the new submarines are not expected to be delivered until at least the 2040s. By that time, it is likely that the PLA will have developed sufficient means for countering the AUKUS-class submarines, such as anti-ship missiles, SSNs, and ballistic missile nuclear submarines, which China is currently building. In fact, the US Congress Research Service report suggested in 2022 it is likely China will have a new class of SSN by the mid-2020s. Furthermore, China’s naval development consists of an aspiration to expand its influence globally, beyond the close water of Taiwan, in which a submarine deal is simply incapable to deter.

What, then, is AUKUS for? Since the deal was announced in March 2023, Australian experts have debated its strategic implications.[3] As the Lowy Institute’s Sam Roggeveen submits, there is a bigger question the Albanese government must answer: ‘how exactly will these submarines make Australia safer’? Australia must take China’s military rise seriously, but it is not helpful to assume this will lead to war. Instead, Canberra should approach this comprehensively and cautiously, and develop a clearer understanding of China’s military rise under Xi Jinping as well as its strategic goals and institutional reforms. There also needs to be a wider and more constructive public debate about the best ways to respond to China’s rise and safeguard Australia’s security in the broadest sense of the term.

References

[1] However, the official defence budget in China can sometimes be misleading, as some research and development may fall under the category of science and technology. See: China Power Team, ‘Making sense of China’s government budget’, China Power, 15 March 2023, online at: https://chinapower.csis.org/making-sense-of-chinas-government-budget/

[2] For China’s naval capability building, see: Chan, Edward Sing Yue (2021), China’s Maritime Security Strategy: The Evolution of a Growing Sea Power. Routledge. Congressional Research Service (2022), China Naval Modernization: Implications for U.S. Navy Capabilities—Background and Issues for Congress, RL33153.

[3] See: Rory Medcalf, ‘The AUKUS debate needs clear reasoning, not hot air’, Australian Financial Review, 24 March 2023, online at: https://www.afr.com/policy/foreign-affairs/the-aukus-debate-needs-clear-reasoning-not-hot-air-20230322-p5cugo; Stephen Nagy and Jonathan Ping, ‘The end of the normative middle power ship’, Australian Outlook, 13 March 2023, online at: https://www.internationalaffairs.org.au/australianoutlook/the-end-of-the-normative-middle-power-ship/; Matthew Sussex, ‘Time to grow up: Australia’s national security dilemma demands a mature debate’, The Conversation, 24 March 2023, online at: https://theconversation.com/time-to-grow-up-australias-national-security-dilemma-demands-a-mature-debate-202040; and Sam Roggeveen, ‘What “Utopia” got
wrong about China and defence policy’, The Interpreter, 6 April 2023, online at: https://www.lowyinstitute.org/the-interpreter/what-utopia-got-wrong-about-china-defence-policy

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One of the most fertile grounds for such personalised speculation in recent years has been the regulatory offensive against the platform economy. Why, for instance, did Jack Ma 马云 disappear from public view for three months after the Ant Financial IPO — slated to be the largest in history – was cancelled? Did Xi Jinping personally axe the deal because Jiang Zemin’s grandson, Jiang Zhicheng, was a major investor through Boyu Capital, a private equity firm he co-founded, as one shot in a larger, internecine battle? Did Tencent get into trouble, as an academic colleague attempted to convince me at a conference, because it had been prominently posting information favourable to Li Keqiang in the run-up to the 20^th Party Congress? What happened to Bao Fan 包凡, the rainmaker for big tech investment deals, who resurfaced in early March after being reported as missing by his firm in late February; it was subsequently revealed that he is assisting authorities with an inquiry into Cong Lin the former president of Renaissance Holdings, an investment company he founded.

The standard story presented by foreign news media of what became known in the West as the ‘tech crackdown’ is as follows: Xi Jinping got angry with Jack Ma after the latter gave a speech, in October 2020, to the good and the great in China’s financial sector, at the ‘Bund Summit’ of China Finance 40, a leading economic think tank. Ma belittled regulators and government banks as being behind the times, directly opposing the message of greater regulatory prudence delivered by Wang Qishan at the same meeting, that same morning [1]. Seeing an opportunity not just to take an uppity Ma down a peg, but also to take a swing at the interests of the Jiang family, Xi killed off the Ant Financial IPO and, for good measure, fired off a barrage of rules to constrain other platform companies and ensure absolute Party control over the digital sector. Predictably, this ‘crackdown’ has gone too far. Faced with catastrophic consequences in the platform economy, and economic malaise across the board, the leadership is now seeking ways to roll it back and return to growth.

This common narrative attempts to provide an explanation for something Western observers have found difficult to fathom: why would China inflict so much damage on the most innovative sector of its economy? Moreover, it’s an explanation that confirms our prior assumptions: authoritarian states are going to do authoritarian things, Xi Jinping is the puppet master of the entire Party apparat, Chinese policy decisions are primarily taken in view of top leaders’ personal political interests, and as long as those decisions diverge from the dictates of neoliberal market economics, they are predictably misguided and incompetent.

The problem with that story, however, is that it is highly selective in many instances, and plain incorrect in others. This regulatory wave was not a sudden whim of Xi Jinping’s, but had been in preparation for quite some time. The drafting of the Personal Information Protection Law 个人信息保护法, for instance, started in 2018. In 2019, the State Council published a document outlining the problems and abuses it saw existing within the platform economy, and listing the regulatory tasks intended to be undertaken, as well as the ministries to which those would be assigned. In other words, anyone claiming the regulatory offensive came out of nowhere simply wasn’t paying attention.

The problems identified in this 2019 document and elsewhere are real. For example, the success of platform companies depends on legions of immiserated delivery drivers and gig workers, as well as overworked programmers and software engineers. Third-party merchants, reliant on platform firms for their businesses, suffer from onerous contract obligations and monopolistic practices. Telecommunications fraud, enabled by platform firms’ lax data protection practices, is rife. Poor risk management practices in fintech had already caused the meltdown of the P2P lending industry, evaporating the savings of millions of retail investors.

Those elements are, however, far less dramatic and eye-catching than the disappearance or detention of high-profile CEOs or gossip about palace intrigue. Moreover, to assess them requires consistent engagement with the drudgery of analysing Chinese policy and regulatory documents — a calvary the great Belgian Sinologist Simon Leys (Pierre Ryckmans) memorably described as ‘akin to munching rhinoceros sausage, or to swallowing sawdust by the bucketful’. Doing so reveals a stack of dozens of texts, issued by multiple Party and government organs, which paint a somewhat more complex picture, where there is no single discernible cause or motivation, nor even clear evidence of much interagency coordination. Regulations in fintech, for instance, have evolved nearly in parallel with interventions in the realm of competition, or protection for consumers and workers more generally. Some of the fintech rules resemble market regulation initiatives undertaken elsewhere, most notably in the European Union. The Personal Information Protection Law, for instance reproduces many of the General Data Protection Regulation’s (GDPR) terms, concepts and mechanisms, defining largely similar legal grounds for personal information processing, introducing similar procedures for data transfer abroad and imposing similar levels of punishment for violations. New Chinese regulations on competition in the platform sector contain similar definitions for large-scale ‘gatekeepers’ to Europe’s Digital Markets Act.

Traversing the turgid prose of such documents is time-consuming. Journalists, think tank experts and even academics are rarely able to concentrate on tracing single policy areas across time, beholden as they are to the demands of their editors, to news cycles and the demands of immediate hot takes. The Chinese written language, too, forms a layer of encryption: many non-native readers (myself included) simply process Chinese documents far more slowly than texts in English. In those circumstances, it’s easier to reach for a standard narrative, spice it up with details of the latest scandal, and serve while it’s piping hot. Deep engagement with the matter at hand doesn’t necessarily carry a reward: ‘Chinese Regulators Attempt Incremental Improvement of Working Conditions for Gig Workers’ is a far less attractive headline than ‘Xi Jinping Assaults Jack Ma’s Empire’.

Doing the work requires taking Chinese policy thinking around certain questions seriously, and recognising that it might diverge from Western instincts for reasons other than the wielding of blunt authoritarian power. Consumer-oriented online services may be seen as the pinnacle of innovation in the United States, but policymakers in Beijing disagree somewhat. Beijing recognises that big tech has contributed in no small way to enhancing the convenience of Chinese citizens’ daily lives, but at the same time, does not believe it makes a durable contribution to the fundamental qualities of the Chinese economy. Instead, China’s techno-industrial policy under the Fourteenth Five-Year Plan (2021-2025) focuses on upgrading the efficiency and productivity of the manufacturing industry. Platform firms are expected to support that effort, for instance by providing innovative services in logistics and supply chain management. Cryptocurrencies, in the eyes of Chinese regulators, moreover, are mere vehicles for non-productive speculation and law-breaking, and consume vast amounts of electricity to boot. No wonder they have now been banned completely.

Beijing’s willingness to damage the fintech sector, which has lost over US$ two trillion in market capitalisation, for instance, becomes a lot more explicable when it is recognised that nearly all publicly traded Chinese fintech companies are listed on stock exchanges outside of mainland China. The shareholders receiving a haircut are, therefore, far less Chinese than one might initially think. However, to admit Chinese authorities might have good reasons for acting in the way they do implies that the Western political and economic model is not universally applicable, and undermines an easy dismissal of Chinese policy solutions. The fact is that China acts in many ways similar to, say, the EU, and the bureaucracy in Beijing is beset by the same pathologies that trouble Washington, Brussels, Canberra or any other capital.

A similar problem lies in discussions of the ‘end of the crackdown’. This phrase seems to imply the regulatory campaign was temporary, and the normal order of business will resume. This is incorrect: it is better to understand what happened as a ‘rectification’: the introduction of a new governance paradigm for a sector that Chinese authorities view as highly important and therefore in need of effective and strict regulation. Safety requirements in cars aren’t an effort to stop people driving, but to ensure they are not killed or maimed as often while doing so. Not only are the new rules here to stay, so are the structures designed to enforce them. The State Administration of Market Regulation, China’s relatively new competition regulator, has established a new Anti-Monopoly Bureau and hired scores of new enforcement personnel. Multiple recent policy releases suggest satisfaction with progress thus far, and there is no evidence that any department intends to roll back any of the measures that were introduced. If that results in the sector’s profitability being permanently depressed, so be it: those profits would have come from unsustainable or undesirable practices anyway. One can reasonably disagree with that logic, but we need to recognise why it exists in the first place.

The inability or unwillingness of much Western commentary and analysis to engage with the drudgery of deep policy analysis relate both to our human fondness for a good yarn, as well as a predisposition for making sense of China in ways that are psychologically comfortable to those of us who closely identify with the Western liberal order. However, that comes at a cost: we are less able to make sense of the Communist Party of China’s motivations and actions. This not only impacts our direct engagement with China, but also the broader world with which it is inextricably intertwined.

[1] See, for instance, The Economist, ‘China’s tech crackdown starts to ease’, The Economist, 19 January 2023, online at: https://www.economist.com/business/2023/01/19/chinas-tech-crackdown-starts-to-ease; Giulia Interesse, ‘Is China’s ‘Tech Crackdown’ over? Our 2023 regulatory outlook for the sector’, China Briefing, 22 February 2023, online at: https://www.china-briefing.com/news/is-chinas-tech-crackdown-over-our-2023-regulatory-outlook-for-the-sector/; Coco Liu, Zheping Huang and Sarah Zheng, ‘China’s tech giants lost their swagger and may never get it back’, Bloomberg, 24 June 2022, online at: https://www.bloomberg.com/news/articles/2022-06-23/china-tech-crackdown-eases-but-startups-worry-xi-may-up-regulatory-pressure 

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The Taiwanese Government recorded twenty-three times more cyberattacks than usual on 2 August. Government websites, including the Office of the President and Ministry of Foreign Affairs, came under especially serious attack. It has been reported that a significant number of attacks came from IPs located in Russia and China.

One popular type of attack that occurred during Pelosi’s visit, but also happens with less intensity in normal times, is the Distributed Denial of Service. Through sending a huge number of messages to a website at the same time, a DDoS attack can be used to shut down the website. This happened to the websites of the Office of the President, the Ministry of Foreign Affairs, and the Ministry of National Defense multiple times during this period. For example, the Ministry of Foreign Affairs website received, within a single minute, more than 8.5 million requests to access their site, which is significantly over the site’s capacity. This leaves the government unable to communicate to its people through their websites.

Website defacement is another popular approach by hackers, and one used intensively during the period of Pelosi’s visit. Hackers even replaced the webpages of some government and universities and the screens at train stations were replaced with messages such as ‘There is only one China’ 世界只有一個中國 and ‘The old witch’s visit to Taiwan is a serious provocation to the Chinese government’ 老巫婆竄訪台灣，是對祖國的嚴重挑釁.

Significantly, screens at convenience stores also came under attack, their content replaced with similar messages. This caused serious concern since cyber-defense for Taiwan’s private sector not in the critical infrastructure list has not previously been seen as a priority but now emerges as a worrying vulnerability.

The timing and intensity of these attacks raise a concern that what has previously been thought of as ‘cybercrime’ or isolated ‘cyberattacks’ should instead be seen as a concerted strategy of ‘cyberwarfare.’

The Blurred Line Between Cybercrime and Cyberwarfare

The use of DDoS and website defacement as tactics of cyberwarfare can go further than simple disruption of business. These measures can also facilitate the dissemination of fake news and even enable extended disinformation campaigns.

War in the digital era can be very different from traditional warfare in that it can be launched without its victims even being aware that they are being targeted. Indeed, as outlined in the Australian Government’s 2022 Defence Strategic Update, disinformation campaigns have already been used to achieve strategic goals without provoking conflict. In Australia and the Indo-Pacific region, especially among democratic nations, there is growing concern about disinformation campaigns, especially those believed to originate in China and from the Chinese Government.

Some people might associate a disinformation campaign with ‘fake news’ or ‘misinformation’. However, it is not synonymous with either of these things, which are better thought of as ‘misinformation’. In a misinformation campaign, people share false or misleading information that they think is true, without intention to mislead others. But a disinformation campiagn is different. As defined by the Australian Department of Foreign Affairs and Trade, it is ‘the intentional creation and dissemination of wholly or partly false and/or manipulated information that is intended to deceive and mislead audiences and/or obscure the truth for the purposes of causing strategic, political, economic, social, or personal harm or financial/commercial gain.’ The purpose of disinformation is to mislead others deliberately. The creation and distribution of disinformation can cause great harm to a society or government.

The information distributed in the disinformation campaign may not necessary be entirely fake news, either. Even verifiable information can be presented in a misleading way to target certain groups of people. An example of a disinformation campaign of this sort involves allegations that the Taiwan government paid NT$94 million lobbying Pelosi to visit Taiwan. Taiwan’s Ministry of Foreign Affairs clarified that money was paid to a lobbying company to expand ties with the US government, not to lobby Pelosi to visit Taiwan, nor to pay for her trip to Taiwan.

We see disinformation disseminated not only through state-owned Chinese official channels, including official Twitter accounts, Facebook pages, websites, TV and radio, but also in collaboration with individuals, political and civil groups. Some examples of such collaboration include the voluntary participation of ‘little pinks’ 小粉紅, typically young self-identified Chinese patriots, including students; the so-called ’50 cents party’ 五毛党 – predecessors of the ‘little pinks’ alleged to receive a small payment for each post or repost of desired content; and ‘content farms’, organised groups that receive support from companies to disseminate information to the public but also to create content.

Humour over Rumour

The crucial lesson is that war might already have appeared in a new guise, one that we do not even think of as war. Psychological operations – PSYOPS – are an integral part of the contemporary military strategy of many countries including the United States and Australia. Through influencing public opinion, encourating political polarisation, and otherwise causing conflict within a country, hostile objectives can be accomplished with less effort and bloodshed. Taiwan has long been a target of PSYOPS over the past dacades and has built good counter-measures to tackle PSYOPS. However, technology-facilitated PSYOPS are spreading faster and wider than before. While it is important that Taiwan’s government continues to improve its measures against PSYOPS, it is also crucial that it adopt new technologies and ideas in providing correct information in real-time. The tactic ‘humour over rumour’ used by the Taiwanese Governemnt during the COVID-19 pandemic successfully reduced fear and panic buying by the public for items such as toilet paper.  However there is a risk in times of disaster that the use of humour as a tactic might not be appropriate and careful consideration needs to be given to its design and content to ensure its effectiveness. In order to protect the country, it is important to study how disinformation compaigns are created and disseminated, and how people are influenced by disinformation, with particular attention to the role of culture and language.

Countering cyber attacks and disinformation campaigns will need to involve the public and private sectors, as well as individual effort. That is, co-production is critical to tackle cyber attacks and disinforamtion campaigns.

*The article was based on a previous paper presented at the inaugural ANU Taiwan Update at the Australian Centre on China in the World.

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A Potent Mix

The most expensive component of an EV is its battery. Almost all (up to 99 percent) of the batteries currently installed in EVs as well as hybrids (which have an internal combustion engine as well as a battery) are lithium-ion batteries. Lithium-ion batteries contain base metals such as aluminium, copper, and iron as well as expensive precious metals, notably lithium, cobalt, nickel, and manganese.

To produce electricity, lithium-ion batteries move lithium ions from the anode to the cathode electrodes (which are kept apart by a microporous separator) via the electrolyte layer. Graphite, the only natural form of carbon apart from diamonds, is used to conduct heat and electricity in the anode, and is the only material that can be used for this purpose. Lithium is the battery’s active material and key component, but most of the precious metals are contained in the cathode, which is hence the most expensive part of the battery. The cathodes contain an ever-increasing share of nickel, which facilitates energy density and longer battery life; cobalt, which prevents the cathodes from easily overheating or igniting; and manganese, which decreases the risk of combustibility.

Given the complexity of the battery and the various components, it is difficult to establish exactly how much of these precious metals go into each battery. One estimate puts the proportion of precious metals at about 8 kg of lithium, 35 kg of nickel, 20 kg of manganese, 14 kg of cobalt, and as much as 70-100 kg of graphite. Other estimates differ.

Extracting all these metals poses a variety of environmental and human rights challenges. For one thing, the mining required is highly energy-intensive. Large lithium mining areas feature big lithium ‘ponds’ of varying hues (depending on the concentration of lithium carbonate). These have been described as ‘surreal landscapes where batteries are born’, and have begun to appear in the ‘lithium triangle’ of Chile, Bolivia and Argentina. High pressure acid leach (HPAL) nickel plants in Indonesia, the leading producer, have a high carbon footprint among other environmental concerns. Two-thirds of the global supply of cobalt are mined in the Democratic Republic of the Congo, where concerns have been raised about human rights abuses and labour issues. All these mining operations cause soil degradation and environmental damage, and use vast amounts of water: In the ‘lithium triangle’, for example, every ton of lithium requires the use of about 2.2 million liters of water as the mineral is found dissolved in salt flats, and requires evaporation to be separated.

Battery and EV Kings

In 2021, almost seven million EVs were sold worldwide, and a full 51 percent were sold in China. Germany (10.2 percent) and the U.S. (9.3 percent) were a long way behind. According to data by China’s Ministry of Public Security, as of the end of September 2022, there were 412 million vehicles in China, including 315 million cars; and 499 million drivers.  Of the vehicles, 3.65 percent, or 11.49 million vehicles, were EVs, of which 3.713 million were newly registered in 2022.  The EVs included 9.26 million pure electric vehicles, a proportion of 80 percent.

EV sales in China are riding a wave of government support policies and incentives, including cash subsidies and purchase tax exemptions. EVs are also a key component of China’s ‘double carbon’ objectives — first proclaimed by Xi Jinping at the United Nations General Assembly in September 2020 — to reach peak carbon use by 2030 and carbon neutrality by 2060. In September 2022, the Ministry of Finance announced that EVs purchased throughout 2023 will remain exempt from vehicle purchase taxes, the third time the policy was extended since it was first implemented in 2014.

The year 2022 has been a steady drumbeat of achievements in the meteoric rise of BYD (Build Your Dreams) Auto 比亚迪, a company from Guangdong province that was founded as a battery manufacturer in 1995. In the first half of the year, BYD became the world’s leading EV company with sales of 640,748 units, a fourfold increase on the previous year, and 76,748 units more than Tesla, its closest rival. In just one year, it increased its global market share from 5.9 percent to 15.4 percent. In April, BYD announced that it had ceased building combustion engine vehicles and would focus exclusively on EVs. In May, BYD’s monthly EV sales in China breached 100,000 units for the first time. In June, the company’s market capitalisation exceeded a trillion yuan (almost $150 billion), larger than Volkswagen Group and third on the list of auto giants behind Tesla and Toyota. In October, BYD sold a record 217,800 EVs in China, the eighth month in a row of record sales. This represented a year-on-year increase of 168.78 percent and 16,541 more than in September. According to the China Passenger Car Association, a total of 680,000 EVs were sold in China in October, which would give BYD a market share of 32 percent. From January to October, BYD sold 1.185 million passenger vehicles, a year-on-year increase of more than 160 percent, and surpassing Tesla’s 909,000 units.

The profits are rolling in for BYD: In the third quarter of 2022, the company announced net profit of 5.72 billion yuan ($788.09 million), an increase of 350.3 percent year-on-year. Its global market offensive is in full swing as well. In September, it entered the European market with the Han sedan, the SUV Tang and compact SUV Yuan Plus. Through the course of 2022, BYD entered markets in Australia (February), New Zealand and Japan (July), Cambodia and Israel (August), Thailand (September), and India (October). In October, the company signed an agreement with SIXT for the European rental car company to purchase 100,000 BYD EVs over the next six years. BYD also announced it was ordering eight cargo ships, at a total cost of 5 billion yuan ($688.89 million), to ship its vehicles to overseas markets.

Yet an even more meteoric and relentless rise is that achieved by China’s largest battery manufacturer: Contemporary Amperex Technology Limited (CATL) 宁德时代, a company founded in 2011 in Fujian province. In 2021, the average capacity of a single EV battery was around 55 kilowatt-hours (kWh). By the end of June 2022, the cumulative installed capacity of batteries in China was 110.1 gigawatt hours (GWh) – each gigawatt hour equal to one million kilowatt hours. This represented an almost doubling of cumulative installed battery capacity from the year before; CATL accounted for nearly 48 percent of this total.  Globally, by the end of the third quarter of 2022, cumulative battery capacity had reached 341.3 gigawatt-hours (GWh), with CATL supplying 35.1 percent of that. (BYD ranked third with a market share of 12.8 percent – it too had seen tremendous growth in this area, with a year-on-year increase of 177 percent.) Profits at CATL are soaring: in the third quarter of 2022, CATL announced total revenue of 97.37 billion yuan ($13.32 billion), a year-on-year increase of 232 percent, and net profit of 9.42 billion yuan ($1.3 billion), an increase of 188 percent.

In June 2022, just when CATL joined the ‘trillion yuan club’ market capitalisation club, the company launched its third-generation Qilin 麒麟 EV battery, named after a mythical Chinese beast sometimes likened to a unicorn. The Qilin has a record volume utilisation rate (the percentage of a battery used for driving) of over 72 percent, and an EV with this battery can drive 1,000 kilometers without having to recharge. When it does need to be recharged, it can get to 80 percent capacity in ten minutes, outperforming Tesla’s batteries, thanks to CATL’s large surface cooling technology.

Yet for CATL’s founder and chairperson, Robin Zeng (曾毓群 Zeng Yuqun), the Qilin is just the first step. He has promised more advanced batteries to come, including ones based on “condensed matter” which, as he said at the Qilin’s launch in June, ‘no one has heard about.’ Zeng, who did a Ph.D. in condensed matter physics at the Chinese Academy of Sciences from 2002 to 2006, did not elaborate further, but it is likely that condensed-matter batteries will make use of graphene technology — graphene is a material consisting of a one-atom-thick layer of carbon that has virtually unlimited industrial potential, including as a conductor of heat and electricity.

All Chains Lead to China

For BYD, CATL, and all the EV and battery companies around the world, getting access to lithium and the various precious metals is the key to success. But the Chinese companies have one key advantage: China controls crucial links in the supply chains.

The four key metals used to produce batteries, plus the metal-like graphite, each require different conditions for production. Lithium is extracted from brine water in high elevation areas in South America or from hard rock, mostly in Australia. In 2021, China produced 14,000 metric tons (MT) of lithium, making it the world’s third-largest producer after Australia (55,000 MT) and Chile (26,000 MT). In 2021, at least 65 percent of China’s lithium needs were provided for by imports.

Nickel is extracted from two types of deposits, namely sulphide (mostly in Russia, Canada, and Australia) and laterite (mostly in Indonesia and the Philippines). In 2021, Indonesia was the world’s largest producer with 1 million MT, while China was the seventh largest, with 120,000 MT.

Cobalt is a by-product of copper or nickel mining. About 70 percent of cobalt comes from the Democratic Republic of Congo (DRC). Chinese companies are estimated to control 60 percent of cobalt mining and 80 percent of cobalt refining in the DRC. In 2021, Chinese companies owned or partially owned fifteen of the nineteen cobalt mines in the DRC.

Manganese and graphite are easier to obtain. Manganese, the most widely distributed of all the metals used in batteries, can be extracted at relatively low cost. As for graphite, the relatively common crystalline form of carbon, it can be mined or produced synthetically, and China controls around 80 percent of global graphite mining.

From 2021, high demand for lithium-ion batteries has led to a spike in the prices of lithium, nickel, and cobalt, exacerbated by supply chain pressures such as COVID, Russia’s invasion of Ukraine, and limited production capacity. From January 2021 to May 2022, lithium prices increased sevenfold and cobalt prices doubled, while nickel prices almost doubled. In order to increase their access to lithium, nickel, and cobalt reserves, Chinese companies have undertaken a range of direct investments, equity deals, and supply sales agreements with mining companies in Africa, South America, Indonesia, Australia, and Canada. In January 2022, BYD, for example, was granted a contract by the Chilean Ministry of Mining to extract 80,000 tons of metallic lithium for $61 million — although the deal was suspended by a court in Santiago two days later after the court accepted an appeal by the local governor and a group of indigenous communities on the grounds that the bidding process violated the principles of environmental protection and economic development. In May, however, BYD had reportedly identified six lithium mines for acquisition in Africa which would yield a million tons of lithium carbonate, enough to guarantee the company’s production for a full decade.

Downstream of mining, China dominates production at every stage of the battery supply chain, from the fabrication of the positive and negative electrodes to the manufacturing of the cells and their assembly into modules and then battery packs. Around 75 percent of the global production of battery cells takes place in China, as does 70 percent of production of specialised cathode and 85 percent of anode materials. China also produces 66 percent of separators and 62 percent of electrolytes.

The Epic Rush for Lithium

In June 2021, CATL opened the world’s largest single battery plant in Yibin, Sichuan province, with a total investment of 64 billion yuan ($8.99 billion). The plant has an annual capacity of 30 GWh. By the end of September 2022, a Chinese newspaper counted twenty-six new projects to expand battery production in China in the year to date. They involved all of the largest battery producers and a cumulative investment of 290 billion yuan ($40.74 billion). Collectively, they would account for a total production capacity of 820 GWh. According to China’s Ministry of Industry and Information Technology, national lithium-ion battery production in the first half of 2022 had already exceeded 280 GWh, a year-on-year increase of 150 percent. CATL’s total electric battery production capacity alone was set to reach 440 GWh by the end of 2022, and the company expects to enter the 1 terawatt-hour (TWh) era by 2025. By 2030, global battery production capacity is expected to exceed 3 TWh, of which China will account for about 45 percent.

This headlong expansion of battery production has driven up the price of lithium relentlessly. As more exploration has taken place, estimated global lithium reserves increased from 3.4 million MT in 2001 to 21 million MT in 2020.  In May 2022, a majority stake in a lithium mine in Sichuan province sold for 2 billion yuan ($298.58 million) on the auction platform of online retailer JD.com 京东商城 — which was 596 times the opening price. By September 2022, the price of lithium carbonate was hovering around 500,000 yuan ($72,179) per ton, compared to only 40,000 yuan ($5,706) a year earlier. On October 28, the price was 559,000 yuan ($76,668) per ton.

According to Robin Zeng of CATL, current global reserves of lithium can produce 160 TWh of lithium batteries, so there is not actually a shortage. But there is pressure on supply until investment in exploration and mining can catch up. According to the International Energy Agency (IEA), lithium shortages could occur by 2025 — before an expansion in mining can be fully implemented. Because of the complicated processes involved, lithium mining has a very long lead time: According to an IEA report, lithium mines could take an average of 16.5 years to develop ‘from discovery to operation’.

With the sharp increase in the price of lithium from 2021, the largest profits in China are currently going to the upstream mining companies rather than the battery or EV manufacturers. In the second quarter of 2022, for example, companies extracting lithium from brine achieved a gross profit margin of more than 90 percent, while the gross profit margin of battery manufacturers was below 15 percent, or as low as 10 percent. In the first three quarters of 2022, the net profits of nine Chinese listed lithium mining companies more than doubled. These included market leaders Tianqi Lithium 天齐锂业 with 15.98 billion yuan ($2.19 billion) and Ganfeng Lithium 赣锋锂业 with 14.79 billion yuan ($2.02 billion). Tianqi Lithium holds a controlling stake in Chile’s largest lithium producer, Sociedad Química y Minera de Chile (SQM). Ganfeng Lithium, which supplies lithium to Tesla as well as BMW, Volkswagen, and others, obtains most of its lithium from the Mount Marion mine in Australia (which holds the world’s second-largest reserves of high-grade lithium concentrate), of which it holds a 50 percent share.

With the highest profits concentrated in upstream mining, China’s lithium battery industry in 2022 was marked by a trend of vertical integration, in which electric battery companies invested in raw materials, and raw material companies produced batteries. In April 2022, BYD, for example, made an investment in a lithium mining and battery factory project in Yichun, Sichuan province, of 28.5 billion yuan ($4.06 billion). In July, mining company Ganfeng Lithium started construction of a 5.4 billion yuan ($758.61 million) battery production base in Chongqing. Much of the focus of new lithium mining projects in China is in Sichuan, which contains 6.1 percent of global and 57 percent of China’s lithium ore reserves. By 2025, Sichuan could have a total lithium mining capacity of 5 million tons.

Alternatives: Can Anything Replace Lithium?

Lithium-ion batteries currently constitute as much as 99 percent of all batteries used in transportation. A more sustainable type of lithium battery, the solid state battery, is expected to be used in EVs from 2025. Solid state batteries use solid ceramic material instead of liquid electrolytes, making the batteries lighter, faster to charge, and cheaper. They will reduce the carbon footprint of an EV battery by 24 percent. Although the batteries use up to 35 percent more lithium than current lithium-ion batteries, they use far less graphite and cobalt.

Alternative types of batteries that do not operate with lithium or the other precious metals have been under development for decades, but none of these have reached the stage of mass production. This, however, is about to change: In October 2022, CATL announced that it would start mass producing sodium-ion batteries in 2023. And CATL is not alone: In September 2022, there were 36 companies listed on China’s main stock markets involved in the development of sodium-ion batteries, and some of these companies will start to mass produce cathode and electrode materials for sodium-ion batteries in 2023. Sodium-ion batteries are 20-30 percent cheaper than lithium-ion batteries because they do not require lithium, cobalt, nickel, or manganese. The energy density of sodium-ion batteries is still inferior to lithium-ion batteries, however, so they are so far mostly used in small vehicles operating over short distances, such as two-wheeled scooters.

Toyota, Hyundai, and BMW have released cars with hydrogen fuel cell batteries that convert hydrogen into electricity with the use of a hydrogen tank. In May 2022, Great Wall Motors 长城汽车announced plans to launch a new hydrogen fuel cell brand as well. Hydrogen-powered vehicles produce waste emissions of water instead of carbon dioxide. These batteries are still very expensive, however. The technology depends on a highly complex production chain, and hydrogen refueling stations are much more costly to construct than regular EV recharging stations.

Nevertheless, the hydrogen energy industry has strong government backing, and the fuel cell vehicle industry is being pushed forward in five national fuel cell vehicle demonstration clusters. Although the number of fuel cell vehicles is still small: From August 2021 to August 2022, a total of 2,590 number plates were issued for fuel cell vehicles in the five demonstration clusters.

Another emerging battery technology is redox flow batteries that use vanadium, a malleable metal. Vanadium batteries are much safer than lithium-ion batteries, have a long life cycle, are almost completely recyclable, and China has 39 percent of global vanadium reserves. So far, such batteries have only been used for large-scale power storage for electric grids as current versions have relatively low energy density. Still other options that are currently in the exploratory research stage include batteries using seawater, iron, magnesium, hemp, and silicon. For now, however, lithium is king, and China is the centre of the EV world.

The post Supercharged China: Cars, Batteries, and Lithium  appeared first on The China Story.

• ‘,’ I message my friend, who is an LGBTQI+ activist in China, on WeChat.
• ‘I’ll be there in a minute!’, she answers to let me know that she is online and available to connect to a VPN and talk to me via an encrypted platform.

A clever code of rainbows and secret words that avoid online censorship is a must for talking to my LGBTQI+ activist friends in China these days. While a dictionary of this language does not exist and it is constantly changing, fluency in double-speak allows queer 酷儿 communities to communicate without directly mentioning ‘politically sensitive’ and increasingly banned phrases like ‘gender and sexual diversity’ or ‘LGBTQI’. Just like when Chinese feminists replaced the censored #MeToo hashtag with the homophonous #MiTu/米兔 which was then translated as #RiceBunny, double-speak helps LGBTQI+ people avoid direct censorship online.

Queer Activism on the Field

The majority of my own LGBTQI+ activism in China occurred between 2014 and 2017 when I contributed to establishing Diversity — a formally registered LGBTQI+ student society in a sino-foreign University of Nottingham Ningbo China. Over a period of three years, we ran workshops within the University, created a student support group, and engaged with staff and students through social awareness raising activities, such as celebrating the International Day Against Homophobia, Biphobia, and Transphobia. Although Xi Jinping had been leader of China’s Party-State since 2012, many of his most restrictive policies had not yet been rolled out during that time. Living in a second-tier city with a relatively relaxed political atmosphere, our activities were only directly targeted once, when we planned to host a national gathering with twenty attendees to support the trans community. A volunteer loosely connected to our student group told us they were called by a police officer, who mumbled:

‘What… erm… do you know about this event that is set to happen over the weekend?’

‘I’m not a part of it, I’m not really sure what’s happening,’ they responded. Having inquired about the event, the police officer must have felt that his duty was complete and did not directly approach us.

It did, however, give us a big scare. While being invited to ‘drink tea’ 喝茶 — a euphemism for being asked to speak with police about something — is in some ways a badge of activist honour, the police interest prompted everyone to move their conversations to an encrypted platform and change venues. It was the sort of vaguely threatening encounter more common in first-tier cities that are political centres. Despite that isolated incident, those years were overall a flourishing time of community-building and raising awareness about LGBTQI+ issues in society.

Shrinking Digital Space under Xi Jinping

The current censorship landscape is dire: In July 2022 University administration at the top Tsinghua University in Beijing issued penalties to two students for placing handheld rainbow flags at an on-campus supermarket with notes encouraging passers-by to take them and celebrate #PRIDE. ‘Raising awareness’ 社会意识 is now a key term on the list for censorship. National legislation that is not LGBTQI+ friendly, such as the ‘sissy ban’ of 2021 that prohibited effeminate presentations of men on visual media, adds insult to injury. LGBTQI+ activists speculate that the goal of increased coercive control of LGBTQI+ communities and individuals through media, universities, and legislation is to silo queer individuals. If authorities discover evidence of my friends’ conversations with me, a researcher in a university outside of China, they will become a target of surveillance. Similarly, conversations among themselves about an LGBTQI+ group event or gathering is likely to draw attention from the ever-vigilant police, who monitor the digital communications of targeted groups and individuals as a matter of course.

The surveillance and censorship of LGBTQI+ activist and advocate groups is most intense in the Chinese digital space. For example, WeChat, the ‘everything app’ of China, is known to be a direct window for public security agencies to observe the activities of both informal LGBTQI+ groups and registered organisations. These agencies even use the collected data to map organisational relationships between activists, according to my recent research. No conversation on the app can be presumed to be private – a fact about which no repressed group can afford to be unaware.

In their recent book on China’s surveillance state, Josh Chin and Liza Lin unpack how surveillance on WeChat works in practice. The authors note that WeChat’s parent company Tencent ‘has vehemently denied suggestions that it gives police unfettered access to WeChat’s treasure trove of behavioural data’ [1]. However, numerous ‘coincidences’ that Chin and Lin uncover in the book suggest otherwise: for instance, in 2017, Hu Jia 胡佳, a civil rights activist and advocate for HIV-positive individuals, got a phone call from a state security agent who asked why he had bought a slingshot online using WeChat Pay the day before. Dr Li Wenliang, the COVID-19 whistleblower, had similarly been investigated on account of messages sent via WeChat to a private group of other medical practitioners to raise alarm over early signs that a highly infectious coronavirus was going around.

Other social media apps run by Chinese companies, including Weibo or Douban, are also required to monitor for ‘sensitive terms’ that entail censoring and cooperation with government authorities in other ways as well. In some cases, user accounts that are targeted by government agencies may also undergo ‘account bombing’, a practice where the authorities simply ‘bomb’ 炸号, or freeze, social media accounts which they consider sensitive for whatever reason at the time. Another covert means of online censorship is ‘shadow banning’—by which the authorities allow social media users to see their own posts while making them invisible to others. While significantly less harrowing than direct police harassment, such practices can seriously hamper online discourse.

My recent research suggests that, as early as 2020, COVID-19 became an excuse to justify extensive surveillance and police monitoring beyond subjects directly related to the pandemic itself. As many cities were sent into lockdown beginning in 2020 with Wuhan hitting the record with 76 days, LGBTQI+ communities – like many others – shifted their activities to the digital space. At the same time, the digital space allowed to LGBTQI+ communities started shrinking. Moving activities online also meant they became more susceptible to monitoring. Many activists I spoke to reported being repeatedly rung up and even threatened by police because of their online activity.

LGBTQI+ conversations on WeChat have been heavily restricted since July 2021 when hundreds of student-run LGBTQI+ public accounts on WeChat were shuttered overnight and replaced with a vague message:

In response to relevant complaints, all content has been blocked for violating the ‘Regulations on the Management of Internet User Official Account Information Services’, and the account has been suspended.

July 2021 was the end of relatively free online communication among the LGBTQI+ communities in China, which had been able to share queer content online. From then onwards, each LGBTQI+ group or individual posting about LGBTQI+ issues online could expect to be targeted for police monitoring and censorship. The situation is similar on Weibo, an online microblogging platform run by Sina. While LGBTQI+ groups in different geographic locations face unequal amounts of intrusive censorship and police attention, most agree that civil society under Xi Jinping’s leadership is extremely restrictive, unlike in the relatively tolerant times under the previous leader Hu Jintao.

Queer Double-speak

Developing double-speak, a set of linguistic codes and emojis that express meaning without triggering censorship, is now a crucial part of the queer activism and advocacy landscape. It plays two key functions of helping to dodge automated censorship against suspected banned keyword lists and re-appropriating language to protect LGBTQI+ community organising. Instead of an ‘awareness raising’ activity, it may be a call for a gathering of friends. An opaque rainbow background on an event poster, technically more difficult for censors to pick up than text, is a sufficient signal that a forthcoming event invites the LGBTQI+ community.

The practice of re-appropriated language to create queer double-speak is an established tradition. The word tongzhi 同志 (comrade), re-appropriated from Communist lingo by the queer community, is perhaps the most salient example. It was an approved form of address with a history dating back to 1950s when personally mandated by Mao Zedong and had been used widely up through the early reform period even to address waitstaff or salespeople. The term was first used at the Gay and Lesbian Film Festival in Hong Kong in 1989 and was quickly adopted by the LGBTQI+ community in mainland China. Because it was also the correct term by which fellow party members addressed one another, the it could not be easily censored. For example, in 2001, Peking University students organised a queer film festival that they named ‘the first Chinese Tongzhi Cultural Festival’; not familiar with the double-speak, the Youth League of the University approved the event, which went on for a couple of days before it was shut down by University authorities.

A queer double-speak dictionary is unlikely to be made available to the public anytime soon. Such attempt might risk placing a direct spotlight on words used to avoid online censorship, and if placed in the wrong hands, can be used as an actual censorship dictionary. Moreover, LGBTQI+ double-speak is fluidly moving with the needs of the community, emerging organically and spontaneously. As new political and social pressures develop under Xi Jinping’s leadership, new terms of queer double-speak are sure to emerge in the future.

Despite the fact that some groups avoid the risks of the online world altogether and rely on (offline) word of mouth to share information, including about events; LGBTQI+ communities are surviving — if not thriving — in the digital space under the current political climate. Queerness is not something that can be suppressed, including by censorship, and resistance inevitably follows control and surveillance.  A practice with historical roots when sexual and gender diversity was outlawed, double-speak is an important strategy for self-preservation of LGBTQI+ individuals, and to preserve their digitally connected communities. As one of LGBTQI+ activists and advocates put it in conversation with me, ‘even if lotus seeds are dormant for a hundred years, they will bloom when the conditions improve.’

References

[1] Josh Chin and Liza Lin, Surveillance State: Inside China’s Quest to Launch a New Era of Social Control, New York: St. Martin’s Press, 2022, p.111.

The post Double-speak as Resistance to LGBTQI+ Repression in China appeared first on The China Story.

Coming out less than two years after President Xi Jinping announced the PRC’s 2030-2060 targets, the Strategy reaffirms China’s determination to achieve its decarbonisation goals, stating that China’s CO₂ emissions would peak before 2030 and reach carbon neutrality before 2060.

The iron and steel industry is the second largest carbon emitter in China and accounts for about 17 percent of its total emissions. ‘Green steel’, made from a carbon-free reductant such as hydrogen (a source of renewable energy) instead of coal, is hailed by scientists and policy makers as a global solution for reducing carbon emissions. China’s push towards greener steel production, even though this cannot happen overnight and requires costly changes within the industry, will have a profound impact on Australia’s export industry.

Decarbonising the Steel Industry

Adopting low-emission technologies is just one of the three main approaches that the PRC has adopted to accelerate the decarbonisation of the steel industry.

Less production means less emission. In the early 2010s, China addressed the issue of over-production by closing down steel mills that failed to meet standards of pollutant emissions and energy consumption. In 2018, the Ministry of Industry and Information Technology (MIIT) set up ‘capacity replacement’ rules, stating that a new steel mill can only be built if its capacity is less than 80 percent of the one that it’s replacing. Essentially, new steel mills are required to produce less.

Since the 2030-2060 targets were announced in September 2020, the steel sector has moved further to reduce steel output. In 2021, China’s crude steel output was 1.03 billion tons, a 3 percent drop from the year before. It was the first decrease in six years. Steel output during the first five months of 2022 dropped a further 3.81 million tons, or 8.7 percent year-on-year.

To further decarbonise the steel sector, China plans to use more recycled scrap steel as feedstock, instead of iron ore. Scrap steel comes from various sources including offcuts from the steel industry itself as well as obsolete materials, such as railroad tracks, ships, cars and steel cans. Comparatively speaking, the proportion of China’s crude steel production from scrap steel is still relatively low, lagging far behind other big steel producing powers, like the European Union and the United States, where steel produced from scrap accounts for half of the overall production. However, things are changing quickly. In 2020, China used 220.3 million tons of scrap to produce 20.7 percent of its crude steel, replacing 410 million tons of iron ore. The lifting of China’s ban on the import of scrap steel in January 2021 is a clear sign of an increased domestic demand for recycled steel. Experts have projected an increase of around 500 million tons in China’s domestic scrap steel resources in the next three decades, with the majority of it coming from end-of-life of steel-containing products.

Hydrogen-based Steelmaking Comes Slowly and With a Price Tag

There are two ways that hydrogen can be used in steelmaking, either as an auxiliary reducing agent being injected in a blast furnace (technically referred to as H₂-BF), or as the sole reducing agent in a process known as direct reduction of iron (H₂-DRI). Although the former shows promise, the cooling effect of hydrogen limits injection rates (the volume of hydrogen being injected per minute). This method reduces emissions by only about 15 percent. The second method, on the other hand, requires high-quality iron ore with an iron content of 67 percent or more. High grade iron ores are in short supply and can be very costly to produce.

In January 2022, the Ministry of Industry and Information Technology, the National Development and Reform Commission and the Ministry of Ecology and Environment jointly published the ‘Guiding Opinion on Promoting High-Quality Development of the Iron and Steel Industry’. The guide stipulated that the steel industry should invest 1.5 percent of its profit on developing green technologies, including the use of hydrogen in steel production. This is the first time that hydrogen-based steel making has been formally included in national policy.

Although major state-owned steelmakers like Baowu Steel (the world’s top steel producer since 2020) and Ansteel Group have started trialing hydrogen-based steel production, this does not mean China is already entering into a new era of carbon-free steelmaking. A shift towards hydrogen entails a total reconstruction of the steel industry and its value chain, including various processes from producing goods to delivering products.

Currently, more than 92 percent of steel in China is still produced using blast furnace-basic oxygen furnaces (BF-BOF) with coking coal acting as both a heating source and reductant. And the average age of China’s BF-BOF mills is just over eight years old, since most of them were built or rebuilt to meet the high standards on air pollutants emissions set in the early 2010s. Upgrading or rebuilding steel mills is not only wasteful but also financially risky as new technologies are still under development.

So for now, reducing steel output remains the primary approach to reducing emissions and is projected to account for 45 percent of China’s decarbonisation of steel industry to be achieved by 2060. Scrap-use will reduce emissions by another 39 percent; hydrogen’s contribution will be less than 10 percent.

End of the Road for Australian Iron Ore?

China is the world’s largest importer of iron ore. It imports around one billion tons of iron ore annually, constituting 82.3 percent of China’s iron ore consumption. Australian iron ore accounts for about 67 percent of the total imports.

However, Australia is close to losing its place as China’s number one supplier for several reasons. First, China has been looking for new suppliers of high-grade iron ores. It has previously turned to Brazilian producers and more recently towards Guinea’s iron ore to wean itself off reliance on Australia. Second, China is unhappy with Australia’s domination over the pricing of iron ore. To counter this, Beijing plans to set up a centrally controlled group that will act on behalf of all Chinese companies to get lower prices on iron ore through larger bulk purchases. Last but not least, China’s move to decarbonise the steel sector will in itself reduce demands for Australia’s iron ore as well as other raw materials such as coking coal. Recent research projects Australian coal exports to fall by 20 percent by 2025.

Australia has abundant natural resources. But it is not sustainable for its economy and environment to depend on metallurgical coal and iron ore exports to China. Australian policy makers and investors need to proactively consider a more sustainable use of Australia’s resources, such as shifting to domestic manufacturing of ‘green’ steel, which aided by Australia’s abundant solar and wind resources, will be of significant value to Australia’s future exports.

The post China’s ‘Green Steel’ and its Implications for Australia appeared first on The China Story.

The launch of the Fujian was a defining moment for the PLAN, marking its rise as a world-class navy. The story of how the PLAN acquired its first aircraft carrier — a second-hand Soviet ship bought from Ukraine — is filled with plot twists worthy of a good spy novel.

Admiral Liu Huaqing’s Vision

Liu Huaqing 刘华清 (1916-2011), who served as Navy Commander-in-Chief from 1982 to 1988, was the first to articulate the dream of a Chinese-built aircraft carrier. During his term in office, Liu laid down two fundamental strategies for the PLAN: ‘near sea active defence’ 近海防御 and the development of a Chinese aircraft carrier. A ‘near sea active defence’ shifted the PRC’s geostrategic focus from land borders and coastlines to the maritime domain. It emphasised defence against immediate maritime threats, especially offshore territorial disputes.[1] The doctrine remains influential, cited in the most recent National Defence White Paper, in 2019.

Liu stipulated that China should build an aircraft carrier by 2000. He saw this as necessary to manage security in the Taiwan Strait, assert Chinese sovereignty over the Spratly Islands (which are also claimed by the Philippines, Malaysia, Vietnam and Brunei), and generally safeguard China’s maritime rights and interests.[2] The navy set up a research institute in Shanghai in the early 1980s to design an aircraft carrier.[3] In 1985, Chinese shipbreakers purchased the HMAS Melbourne, a damaged light aircraft carrier, from the Royal Australian Navy. According to some observers, the Australian government did not oppose the sale at that time, because China was seen as an important strategic counterweight to Soviet expansion in the Asia-Pacific region. Chinese naval architects were able to study the design and build of the HMAS Melbourne and the Chinese Navy used its flight deck for pilot training.[4]

However, Liu’s vision was met with some resistance. Some military officers argued that there was no need for China to have such a powerful warship. The Ministry of Foreign Affairs also raised concerns regarding the profound impact this would have on China’s foreign relations, especially with ASEAN countries, as well as New Zealand and Australia.[5] More critically, the West imposed bans on military technology transfers following the June Fourth Massacre in 1989. Research and development stalled.

Getting the Varyag home

The turning point in the achievement of Liu’s vision came after the collapse of the Soviet Union in 1991. Ukraine had inherited two unfinished carriers, the Ulyanovsk and the Varyag. Since the new Ukrainian government was unable to continue to build them due to insufficient funding, it scrapped the Ulyanovsk and searched for potential buyers for the Varyag, which was about seventy percent complete. Both China and India expressed interest in acquiring it.[6] However, the United States and Japan were putting pressure on Ukraine not to sell to China, accusing it of engaging with a state that was under an arms embargo. Beijing was also unable to pay the US$ 2 billion price tag the Ukrainians had put on the vessel.[7]

In 1998, the Varyag was put up for auction. A Chinese businessman, Xu Zengping 徐增平 bid US$ 20 million.[8] He bought the vessel under the name of the Chong Lot Tourism and Entertainment Company 长乐旅游与娱乐公司, a company registered in Macau. Even though the Chinese government denied any association with Chong Lot,[9] newspapers in Hong Kong reported that Xu was a retired PLA soldier, and that most of Chong Lot’s board was made up of former naval officers and Chinese nationals from the province of Shandong, which happened to be home to the North Sea Fleet.[10]

In November that year, Chong Lot unveiled plans to turn the Varyag into a floating casino and entertainment complex anchored in Macau harbor,[11] supposed evidence that it was not intended for military use. However, the Macanese authorities never received an application to operate a casino on an aircraft carrier. It would also have been impossible for the Varyag to dock at the shallow harbour of Macau.[12]

Getting the Varyag back to China also proved slow and costly. Some design blueprints went missing, and Xu had to request a new copy from the Ukraine government, which took months of waiting. Then, Turkey refused the Varyag permission to pass through its territorial waters as the ship ‘had not taken certain technical measures’, given that it was such a large vessel, but without an engine.[13] And the Turkish authority was concerned about sea lane safety. It was not until Beijing promised to boost trade and tourism links with Ankara that the eighteen months of deadlock ended.[14] During this time, Xu had to pay Ukraine approximate US$ 272,000 per month for mooring and towing costs. When the Varyag finally passed the Black Sea, it was again denied entry to the Suez Canal by Egypt for the same reason. In the end, the Varyag had to detour from the Strait of Gibraltar to the Cape of Good Hope towards the Indian Ocean. It was not until 3 March 2002, when it finally arrived in the port of Dalian in Liaoning province.

The Chinese government secretly reimbursed Xu for his expenses and the ownership of the Varyag was transferred to the PLAN. It took another nine years to transform the vessel into China’s first aircraft carrier, the Liaoning 辽宁舰, which was launched in 2012. Five years later, the first domestically built carrier, the Shandong 山东舰, built on the basis of the Liaoning, entered active service in 2019. A fourth and fifth aircraft carrier are currently in the planning stages.

Building a world-class navy

Addressing a parade of naval forces in April 2018, Xi Jinping, as Chairman of the Central Military Commission, announced the goal of constructing a world-class navy. His speech clearly signalled to the world that China intended to expand its influence across the oceans in the coming decades.

Three years before Xi’s speech, in the PRC’s National Defence White Paper of 2015, the Ministry of Defence proposed extending the PRC’s naval strategy to ‘far sea protection’ 远海护卫 in addition to ‘near sea defence’. The role of the navy would no longer be limited to defending Chinese maritime territory. Far sea protection is about safeguarding China’s expanding interests overseas, including the protection of sea lines of communication, maritime cargoes, ships, and trade routes as well as the security of its citizens and businesses overseas.[15]

From 2005 to 2021, the Navy added eighty-six ships to its fleet. Many of these are missile-armed fast patrol crafts, corvettes and cruisers. It also acquired new classes of submarines, destroyers, frigates and amphibious ships, most of which were put into operation after 2019.[16] To accommodate the expansion of the naval force, China’s shipyard is also expanding. The Jiangnan Shipyard 江南造船厂 in Shanghai, one of the important shipyards of the PLAN, currently occupies an area of over 7.3 kilometres while its neighbouring Hudong-Zhonghua Yard 沪东中华造船厂 will be expanding its shipbuilding area by around 50 percent. Such significant shipbuilding development — all the vessels were constructed in China — has allowed the PLAN to enhance its maritime defence capability in both near and far seas.

Military leaders and official media have defined a ‘world-class navy’ as playing a more crucial role in national rejuvenation than other parts of the military because of its overseas role. Robert Ross, a professor at Boston College, describes China’s maritime ambition as ‘naval nationalism’, following the historical pattern that great powers turn seaward with the growth of mass nationalism and nationalist leadership.[17] Although initially, the goal of building an aircraft carrier was to enhance the PRC’s naval capability, Chinese state media now typically portrays its construction as a symbol of great power status, showcasing the country’s technological capacity and resources. It presents the deployment of warships, on the other hand, as representing China’s ability to defend its own territory and prevent foreign intervention in Chinese affairs, an antidote to the bitter history of the century of humiliation.

The Party also views the navy as a tool for power projection. Hu Jintao made ‘constructing a strong maritime state’ 建设海洋强国 a national objective close to the end of his term as Party and state leader in 2012. The Navy supports this national goal by increasing its presence in the open oceans. In 2017, the PLAN established the PRC’s first overseas base in Djibouti, located in the Horn of Africa. Although state media claim that the base is only for logistical support, it is certainly strategically advantageous. Prior to the COVID-19 pandemic, the PLAN had conducted ports of call and joint exercises with foreign navies, including those of the United States, Russia, Pakistan and Thailand, as a type of naval diplomacy. It has also been involved in non-military operations in the Indian Ocean, such as search and rescue, escort and anti-piracy, through which run some of the world’s busiest trade routes. To date, forty Chinese fleet groups have conducted anti-piracy escort missions in the Gulf of Aden. The PLAN has also been training civilian vessels to act as maritime militias when necessary, such as escorting other Chinese civilian vessels for fishing activities and tracking and monitoring foreign vessels in disputed waters.[18] It also provides professional guidance to several domestic maritime law enforcement agencies, such as the China Coast Guard. Clearly, the navy has become more than a warfighting tool.

A world-class navy also helps protect the PRC’s regional interests. Since 2012, the Chinese government has largely employed non-military measures to increase its maritime influence in the East and South China Seas, such as law enforcement operations and land reclamation (reef building). China perceives itself as encircled by regional naval powers, including Russia, Japan and India, as well as the presence of the global US navy in nearby waters. Beijing sees a world-class navy as required to prevent the United States and its allies from contravening its interests in the Asia-Pacific region.

Challenges ahead

Despite investing considerable resources into constructing a world-class navy, the PLAN still faces many challenges. Similar to its other armed forces, the Chinese Navy lacks real-life, modern combat experience. The last time the PLAN was involved in a military confrontation was the Johnson South Reef Skirmish with Vietnamese forces in 1988. Even though it has conducted much training and many exercises throughout the years, its ability to operate modern warships and weaponry systems in a sea battle remains untested.

A lesson of the Russo–Ukrainian War is that a weakness in modern joint operations is coordination between land, sea, air, cyber, and space forces.[19] Most strategists would still describe the Chinese Navy as a semi-blue-water navy with the capability to navigate globally but lacking operational experience. In addition, the expansion of the carrier fleet is yet to offer a direct challenge to the United States’ dominant global sea power. The Fujian is catching up with the United States’ naval technology, but the PLAN is still unable to compete with the United States Navy in overall fleet size and capability. As Sam Roggeveen, the Director of the International Security Program at the Lowy Institute, points out, ‘Carriers are a sign of Chinese power—but that doesn’t mean Beijing has to rule the waves’.

A complicated geopolitical environment hinders the Chinese Navy’s further expansion. Blocked by Japan, Taiwan, the Philippines, as well as India and the United States from projecting its influence beyond the near seas, the PLAN does not have direct access to the open ocean — one reason for the PRC’s push for security cooperation with other developing states in the Indian and Pacific Oceans, such as Cambodia and Sri Lanka.

Moreover, because of the on-going territorial disputes in the East and South China Seas, neighbouring countries tend to view China’s assertive naval expansion, especially any build-up of forces in the Asia-Pacific region, as a security threat. Such a view is echoed in a March 2022 report by the US Congressional Research Service which stated, ‘In an era of renewed great power competition, China’s military moderni[s]ation effort, including its naval moderni[s]ation effort, has become the top focus of U.S. defen[c]e planning and budgeting.’ Regardless, as Chinese overseas interests increase, its maritime ambition will continue to expand. The goal, as Xi Jinping has stated, is nothing less than the PRC’s transformation into a ‘true maritime power’ 海洋强国.

References

[1] Edward Sing Yue Chan, China’s Maritime Security Strategy: The Evolution of a Growing Sea Power (New York: Routledge, 2022), 46-8; Taylor M. Fravel, Active Defense: China’s Military Dtrategy Since 1949 (Princeton: Princeton University Press, 2019), 162-3.

[2] Liu Huaqing 刘华清, Liu Huaqing memoir 刘华清回忆录, (Beijing: Jiefangjun chubanshe, 2004), 479.

[3] You Xu and You Ji, In Search of Blue Water Power: The PLA Navy’s Maritime Strategy in the 1990s and Beyond (Canberra: Strategic and Defence Studies Centre, The Australian National University, 1990), 11-13.

[4] Ian Storey and You Ji , ‘China’s Aircraft Carrier Ambitions,’ Naval War College Review 57, no. 1 (2004): 79.

[5] You and You, In Search of Blue Water Power, 12.

[6] Vladimir Matyash, ‘Minister comments on state of defence industry,’ BBC. 19 September, 1992.

[7] ‘China Seeking Aircraft Carrier to Secure South China Sea’, Asian Political News Kyodo News, 17 August, 1992.

[8] Storey and You, ‘China’s Aircraft Carrier Ambitions,’ 82.

[9] Sergei Blagov, ‘No connection to naval ship, says embassy,’ South China Morning Post, 4 April, 1998.

[10] ‘Intelligence,’ Far Eastern Economic Review, 16 April 1998.

[11] Storey and You, ‘China’s Aircraft Carrier Ambitions,’ 83.

[12] Ibid.; ‘Macau says waters too shallow for ex-Soviet carrier,’ Reuters, 11 January 2001.

[13] ‘Chinese aircraft carrier not allowed through Turkish strait – Turkish official,’ BBC, 4 December 2000.

[14] Adam Luck and Raymond Ma, ‘Beijing clams waters for “floating casino”’, South China Morning Post, 9 September, 2001.

[15] Fravel, Active defense, 232.

[16] Chan, China’s Maritime Security Strategy, 149-52.

[17] Robert S. Ross, ‘Nationalism, geopolitics, and naval expansionism: from the nineteeth century to the rise of China,’ Naval War College Review 71, no. 4 (2018): 11-44; Robert S. Ross, ‘China’s naval nationalism: sources, prospects, and the U.S. response,’ International Security 34, no. 2 (2009): 46-81.

[18] Conor M. Kennedy, ‘Gray fores in blue territory: the grammar of Chinese Maritime Militia Gray Zone Operations,’ in China’s Maritime Gray Zone Operations, edited by Andrew S. Erickson and Ryan D. Martinson (Annapolis: Naval Institute Press, 2019), 168-185.

[19] David D. Chen, ‘Lessons of Ukraine raise doubts about PLA modernization,’ China Brief 22, no. 7 (2022): 16-21.

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