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Wednesday, January 3, 2024

2023 in Review for the People’s Republic of China

For People’s Republic of China (PRC), 2023 has been a roller-coaster ride. A few recurring themes were present in the Chinese politics and Foreign Policy approach like the Human Rights violations in Xinjiang and Hong Kong, the Trade war with Western countries, the stand on Russia-Ukraine and Israel-HAMAS war, etc.

Here we try to break down a few of these events throughout the year:

  1. Downward economic trend

On 5 December, Moody’s downgraded its outlook for Chinese sovereign bonds from stable to negative, citing concerns over China’s ability to repay government borrowing. The credit rating agency highlighted the ripple effects of a crisis in the property sector, warning that Beijing might need to bail out local and regional governments and state-owned enterprises struggling with rising debts. This move highlights global concerns about the level of debt in the world’s second-largest economy and suggests that China’s credit rating could be cut in the future. This came amid the reports in August that the Chinese Economy is slipping into deflation as consumer prices fell year on year in July for the first time in over two years. The decline is attributed to slowing domestic spending and weaker demand for Chinese products globally. Lesser domestic spending can be attributed to the decline in population. According to the reports released by the government in August, China’s fertility rate had hit an estimated record low of 1.09 in 2022, making it the lowest among countries with a population over 100 million. The working-age population contracted by over 40 million between 2019 and 2022. The decline in the economy prompted Evergrande, China’s heavily indebted property developer, to file for bankruptcy protection in a US court under Chapter 15 of the US bankruptcy code. The company’s collapse fears sent shockwaves through China’s economy. The step came as China’s property sector continued to face challenges, impacting economic growth. Another shock came from Country Garden, once China’s largest developer by revenue, which faced the risk of default. Until August, the company had missed two-dollar bond payments last week and has until early September to address concerns of a potential default. This negative economic trend prompted the Chinese government to suspend the release of youth unemployment figures when youth unemployment had hit a record high of 21.3% in June, citing the need to “further improve and optimize labour force survey statistics.”

In contrast to its declining trend, according to news reports in November, China has become the world’s largest debt collector, with the money owed to the country from developing nations surging to between $1.1 trillion and $1.5 trillion. However, as the debts to Chinese lenders have mounted, the number of suspended or cancelled projects increased which raised concerns in China about the risk of defaults. Chinese lenders are also increasing penalties for late repayments, although this move may alienate borrowers.

  1. Human Rights Violations in Hong Kong, Xinjiang and Tibet

On 18 January, Hong Kong police raided a Lunar New Year shopping fair, arresting six people for selling a “seditious” book related to the 2019 anti-government protests, just days before the celebrations. The individuals, aged between 18 and 62, were accused of producing and publishing a “seditious book about a series of riots that occurred in Hong Kong from June 2019 to February 2020.” These actions spread terror and are part of the ongoing political crackdown on freedom of speech and expression in Hong Kong under the national security law. Then in February, United Kingdom’s MPs through an inquiry by the All-Party Parliamentary Group (APPG) on Hong Kong accused HSBC Bank of complicity in human rights abuses against Hong Kong residents by siding with Chinese authorities and denying pension payouts to those who fled the authoritarian crackdown. The APPG argues that HSBC’s decision has hindered Hong Kong residents from establishing new lives in the UK and deems the bank complicit in human rights abuses. On 4 March, three former members of a Hong Kong organization that arranged annual vigils commemorating China’s Tiananmen Square crackdown were convicted of failing to comply with a national security police request for information. The group disbanded in September 2021, and the charges against its former members were part of a broader crackdown on pro-democracy activists and organizations in Hong Kong. Later that same month, Hong Kong’s national security police arrested two men for possessing children’s books deemed seditious. The arrests were the first known incidents where individuals were detained for possessing books considered seditious which raised concerns about vague definitions of sedition charges in Hong Kong. On 24 July, Hong Kong’s national security police detained the daughter, son, and daughter-in-law of activist Elmer Yuen, accusing them of aiding wanted activists. Elmer Yuen is accused of encouraging foreign countries to impose sanctions on Hong Kong officials and promoting Hong Kong’s self-determination. The arrest was part of a broader crackdown on pro-democracy figures in exile. Authorities in Hong Kong had issued bounties for the arrest of eight activists based overseas, including the UK, US, and Australia.

Not only Hong Kong, there are Human Rights violations in Xinjiang as well. On 24 September, Rahile Dawut, a prominent Uyghur professor specializing in Uyghur folklore and traditions, who disappeared six years ago, was sentenced to life in prison by Chinese authorities for “endangering state security.” Dawut is one among more than 300 Uyghur intellectuals detained since 2016, while an estimated 1.5 million Uyghurs have been held in re-education camps. On 13 October, a report based on a four-year long investigation by the Outlaw Ocean Project revealed the extensive use of forced labour in China’s government-backed fishing industry, including the deployment of Uyghur forced labour in seafood processing facilities. The investigation sheds light on the appalling conditions faced by workers on China’s distant-water fishing fleet and underscores the large-scale use of Uyghur forced labour in seafood processing. The report warns that Beijing’s persecution of Uyghurs has evolved, with some being moved into forced labour after facing global scrutiny. In another case in November, a Uyghur filmmaker Ikram Nurmehmet alleged that he was tortured and forced to confess during his detention in Xinjiang province. Nurmehmet was denied the right to appoint his legal representation and was instead represented by a state-appointed attorney, who allegedly stated that a term of more than eight years in jail was likely, with the result to be made public at a later date. Furthermore, a Human Rights Watch report, in November, suggested that Chinese authorities have closed or altered hundreds of mosques in the northern regions of Ningxia and Gansu, in Xinjiang, as part of broader efforts to “sinicise” religious minorities. Researchers at HRW analysed satellite imagery to examine the mosque consolidation policy in two villages in Ningxia. The study found that between 2019 and 2021, the domes and minarets were removed from all seven mosques, and four were significantly altered, with three main buildings razed and the ablution hall of one damaged. HRW estimates that about 1,300 mosques in Ningxia, a third of the total registered, have been closed since 2020.

Similarly, Human Rights violations are happening in Tibet as well. In July, a study by the Rand Europe Research Institute was released which suggested a pattern of increased activity at high-security detention facilities in Tibet, indicating a potential rise in harsher imprisonments by Chinese authorities. The report used overhead satellite imagery analysis and night-time lighting data to examine 79 detention facilities in Tibet. It found patterns of growth in night-time lighting concentrated in the 14 higher-security facilities, with increases across prisons in 2019-2020 and high-security detention facilities in 2021-2022. To counter such actions by the CCP and gain international support, Norzin Dolma, the Minister for Information and International Relations of the Central Tibetan Administration, in November, visited Australia to urge the government not to compromise on human rights in its relationship with China. She urged the use of Magnitsky-style sanctions laws to target Chinese Communist Party (CCP) officials responsible for threatening Tibetan identity, culture, and language.

  1. Military Aggression in its Neighborhood

On 13 February, the Philippines accused a Chinese Coast Guard (CG) ship of aiming a “military-grade laser light” at one of its vessels in the South China Sea (SCS), temporarily blinding a crew member and disrupting a resupply mission. Again on 6 August, the Philippines accused China’s CG of using water cannons to obstruct Philippine vessels delivering supplies to Filipino military personnel at Second Thomas Shoal in the disputed SCS. Similarly, on 24 September, the Philippines again accused China’s CG of installing a “floating barrier” in a disputed area of the South China Sea, specifically in the Scarborough Shoal, preventing Filipino fishermen from entering the area.

On 8 April, the People’s Liberation Army (PLA) announced three days of drills in the Taiwan Strait and sent dozens of planes across the median line in response to Taiwan’s President Tsai Ing-wen’s visit to the US and her meeting with US House Speaker Kevin McCarthy. Taiwan’s defence ministry reported 42 Chinese fighter jets and eight warships in its air defence identification zone, with 29 planes crossing the median line. Also, in late May, a Chinese fighter pilot engaged in an “unnecessarily aggressive manoeuvre” close to a US surveillance aircraft over the South China Sea, according to the US Indo-Pacific Command. The incident occurred as the Chinese plane flew in front of and within 400 feet of the nose of a US RC-135, causing the American aircraft to fly through its wake turbulence. The Pentagon saw it as part of a wider pattern of risky aerial confrontations by China. This incident happened amid heightened tensions between the US and China over issues like Taiwan and after China refused a US invitation for a meeting between defence officials at the Shangri-La Dialogue Security Forum in Singapore. This was seen as a reciprocal of the incident of February where a US warplane shot down a Chinese high-altitude balloon over the Atlantic Ocean. China claimed the balloon was for meteorological purposes, while the US insisted it was used for spying. Repeating the same pattern towards Taiwan, China conducted military drills around Taiwan in August, issuing a “stern warning” following the stopover of Taiwan’s Vice-President, William Lai, in the US. Furthermore, in October, the Pentagon released a report on China’s military power which suggested that China is rapidly expanding its nuclear weapons arsenal, exceeding previous projections. It also warns about China’s potential development of a new intercontinental missile system that could threaten targets in the continental United States.

On the other side of China’s borders, India’s Defence Minister, Rajnath Singh, during the SCO summit on 27 April, accused China of border aggressions that have “eroded the entire basis” of their relationship. The situation along the disputed Line of Actual Control (LAC) remains unresolved despite 18 rounds of military talks, and there are concerns about the potential for large-scale conflict. China continues border provocations, and India denies any loss of territory. Furthermore, satellite images taken in January 2023 revealed the military modernization on Great Coco, a small island in the Bay of Bengal which led to concerns about China’s influence in the region. Great Coco’s strategic location near the Strait of Malacca and proximity to India’s Andaman and Nicobar Islands increased the concerns. Analysts suggest Myanmar’s military may use Great Coco as leverage in negotiations between India and China for economic and diplomatic support.

  1. Chinese Censorship, anti-espionage law and disinformation campaign

China is manipulating global media through censorship, data harvesting and covert purchases of foreign news outlets. In September, a US report stated that China has spent billions annually on information manipulation, including acquiring stakes in foreign media through public and non-public means, sponsoring online influencers, and securing distribution agreements promoting unlabeled Chinese government content.

Domestically China keeps a close surveillance and censorship. Close to the anniversary of the June 1989 massacre, Chinese censors systematically removed any words or symbols from the internet that could potentially reference the Tiananmen Square massacre. Further on 30 June, China revised its anti-espionage law which broadened the definition of espionage, giving authorities more leeway to punish perceived threats to national security. The US National Counterintelligence and Security Center then warned that the vague revisions could give Beijing more power to access and control data held by US firms in China. The law also raised concerns among businesses, fearing even tighter scrutiny. There were also worries about the law’s impact on human rights and rule of law issues as there were reports that Chinese authorities are using Tik Tok to monitor its people. In April, China expanded its anti-espionage laws which heightened concerns for foreign individuals and entities operating in the country. The amendments expanded the scope of the law to cover anything deemed to threaten national security, broadening the search and seizure powers of authorities, and implementing entry and exit bans on individuals.

In early January, to increase the government’s sway over Alibaba and Tencent, two major tech firms, China offered to purchase “golden shares” in each of them. This policy change is a break from the two-year tech crackdown’s prior approach of enforcing fines and punishments. This action comes after Beijing recently acquired a tiny stock share in ByteDance and Weibo. To protect foreign investment and the competitiveness of Chinese IT companies, the government is shifting its policy and becoming more lenient towards these companies.

On 7 June, a former executive at ByteDance alleged that the CCP accessed user data from TikTok, targeting Hong Kong protesters and civil rights activists. Just a few days before these claims, Chinese President Xi Jinping and top officials had pushed for increased state oversight of Artificial Intelligence (AI) to counter perceived national security threats.

Such restrictions and surveillance led to a nearly 30% decline in WeChat user numbers in Australia over the past three years. WeChat has drawn criticism for similar reasons to those that led to the banning of TikTok from Australian government devices: connections to China and the possibility of data sharing that violates China’s national security regulations. Earlier in February, Canada had also imposed a ban on TikTok preventing its installation on all government-issued mobile devices over concerns about data security and potential Chinese influence.

In response to the Chinese influence over social media platforms, in August, Meta Company shut down nearly 9,000 Facebook and Instagram accounts linked to a Chinese political spam network targeting users globally, including in Australia. The company removed 7,704 Facebook accounts, 954 pages, 15 groups, and 15 Instagram accounts violating its inauthentic behaviour policy. The ‘Spamouflage’ network originated in China and targeted regions worldwide, posting positive content about China and Xinjiang province and criticizing the US, Western foreign policies and critics of the Chinese government. In September, China proposed amendments to the 2005 Public Security Administration punishment law, which seek to criminalize comments, clothing, or symbols that “undermine the spirit” or “harm the feelings” of China which raised concerns among legal experts.

  1. Disappearance of Top Leaders

In July, China’s former Foreign Minister, Qin Gang, was replaced by Wang Yi following Qin’s month-long disappearance from official events. The details surrounding Qin’s absence were unclear, and despite being removed as Foreign Minister, he remained on the State Council. The abrupt reshuffle reflected the mysterious nature of high-profile personnel changes in Chinese politics, where officials can vanish from public view without clear explanations. In August, President Xi Jinping sacked two top leaders of the PLA Rocket Force (PLARF). Two men from outside the PLARF were appointed to lead the unit. The move underscored Xi Jinping’s commitment to tightening the control over the armed forces. The reshuffle came amid a broader campaign to strengthen the CCP’s control over various aspects of society through anti-corruption measures. Then on 24 October, China removed its Defence Minister, Li Shangfu, and ousted former foreign minister Qin Gang from the cabinet. While the reasons for their removal were not provided, the US government had earlier suggested that Li was under investigation.


The year of 2023 indeed has been tricky for Beijing and the 2024 will pose it some great challenges. Xi will likely face a tough time dealing with problems in the West Philippines sea, human rights violations accusations in Xinjiang, Hong Kong & Tibet, and most importantly with the downward spiral of economy the PRC finds itself in currently.

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