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From Didi stock to Chinese military exercises, US China Taiwan relations explained - YouTube
Channel: Lei's Real Talk
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After banning new users and opening an investigation
into Chinese rideshare app Didi, causing its
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stock to fall by 40%, Beijing extended its
crack down on Chinese companies listed on
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the US market to the gaming, education, and
e-cigarette industries.
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Three tutoring companies--New Oriental Education,
TAL Education, and Gaotu--saw their shares
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fall more than 85% YTD.
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And Six months after its IPO on the New York
Stock Exchange, shares of the Chinese e-cigarette
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company, RLX Technology, are down 80%.
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In total, Beijing's recent actions have erased
more than $1 trillion from the market value
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of U.S.-listed Chinese stocks.
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What is Xi Jinping's motivation for targeting
these companies?
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Hi everyone.
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Welcome to my show.
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I'm Lei.
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One thing that's obvious is that he wants
to pull them out of the American capital markets
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and move them to Hong Kong.
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But is it just to avoid American regulatory
scrutiny? to prevent data from being leaked
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to the Americans? or to clamp down on the
financial pipelines of his political enemies?
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Or does he intend to boost Hong Kong’s stock
market?
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There might be some truth to all of the above.
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But there is something else that people haven't
talked much about.
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Xi Jinping is taking a big gamble politically
for the Chinese Communist Party to survive
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another existential crisis.
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Let's first take a look at the current dynamics
of Sino-US relations.
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When Joe Biden first took office, the CCP
was eager to resume high-level dialogues with
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the US.
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At the World Economic Forum in Davos in January,
Xi Jinping urged attendees to resist the American
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effort to "decouple" from China, and said,
"arrogant isolation will always fail."
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In March this year, you may remember that
Chinese foreign secretary Wang Yi and the
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highest-ranking official in charge of foreign
affairs, Yang Jiechi, came to Alaska in order
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to meet with Secretary of State Anthony Blinken,
who was returning from a trip to Asia.
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However, recently, Xi's attitude has changed;
that is, the United States has signaled to
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resume high-level dialogues with him, but
he has avoided or even rejected them, playing
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hard to get.
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A few days before the US Deputy Secretary
of State Wendy Sherman visited China in July,
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the CCP deliberately turned a cold shoulder
to her, and her trip was almost canceled.
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The "Financial Times" disclosed in a report
in May that US Secretary of Defense Lloyd
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Austin had three times asked for dialogue
with 许其亮Xu Qiliang, who is the Vice
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Chairman of the CCP Central Military Commission,
but the CCP rejected them all.
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And the chairman of the US Joint Chiefs of
Staff, General Mark Milley, also failed to
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meet with officials at the equivalent level
of the CCP.
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CNN reported that the Biden administration
hopes to setup an emergency hotline with China,
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which is similar to the "red phone" between
the US and the Soviet Union during the Cold
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War.
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This hotline will allow the president and
senior national security officials to immediately
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send encrypted calls or messages to Xi and
people close to him.
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But a Chinese government spokesperson (Zhao
Lijian) said that there is no need since such
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hotlines between the two countries already
exist.
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So what made Xi Jinping take such a different
approach now?
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Xi and his advisors had seriously believed
that Biden would derail Trump's position on
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China.
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And they pinned their hope on the Biden administration's
soft China policy.
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Five months after Biden took office, the policy
started taking shape.
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But for the most part, it has inherited the
Trump administration's hardline approach.
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For example, it expanded the list of Chinese
companies banned from US investments and launched
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trade and investment talks
with Taiwan.
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The Wall Street Journal quoted a senior Biden
official as saying, "We think some of the
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work the Trump administration was doing was
essential."
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What upsets and worries Beijing even more
is that the new administration is broadening
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the framework to include allies and partners
against China.
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The Biden administration further annoyed Xi
by approving the sale, on August 4, of $750
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million US dollars worth of "M109A6 Paladin
self-propelled artillery" to Taiwan.
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And then the next day, CNN reported that US
intelligence agencies were digging through
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a huge database that contains genetic data
extracted from virus samples researched by
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the Wuhan Institute of Virology.
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This effort may be the key to uncovering the
origins of the coronavirus.
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Starting on July 20, the CCP mouthpiece People's
Daily published a series of 16 articles titled
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"Political Manipulation Cannot Cover Up the
US's Ineffective Pandemic Effort."
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The articles were published for 16 consecutive
days and attacked the US for lack of control
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and accountability during the pandemic.
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On August 3, the official state Xinhua News
Agency published a 24,000-word article titled
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"The Seven Sins of America and Its Allies."
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It's a cultural-revolution-style hit piece
that attacks America and American policies.
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It name-called former president Donald Trump
21 times and President Joe Biden 7 times.
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Some China experts say that this massive anti-US
propaganda campaign is extremely rare in the
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42 years since China established diplomatic
relations with the United States.
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This temper tantrum shows that the regime
is in crisis, as a result of both external
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pressure and internal disorder.
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The CCP just celebrated its centennial anniversary,
but mounting internal conflicts are a ticking
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time bomb for Xi Jinping.
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First, The infighting among various CCP political
factions is getting intense: the Xi Jinping
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faction, the Jiang Zemin faction, the Hu Jintao
faction, the old leader faction, and the princeling
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faction are fighting over power redistribution
at the CCP's 20th National Congress next year.
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Then, there’s the ongoing struggle between
Xi Jinping and the vast number of senior officials
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he has investigated and reprimanded during
his anti-corruption campaign.
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Also, the conflicts between Xi and the powerful
investors and red families behind large companies
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such as Alibaba, Tencent, Ant Group, and Didi,
as well as the fight to control data and technology,
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are being pushed from behind the scenes to
front-page news.
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The conflicts between the wealthy princelings,
who control China's major businesses and industries,
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and the 600 million Chinese people, which
is about half of China's population, with
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an income of only 1,000 yuan or less per month
(that’s $150 dollars or less per month)
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is causing social instability.
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And then, the tumult caused by the CCP's persecution
of its own people is threatening the regime
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daily: Hong Kongers, Xinjiang Uyghurs, Mongolians,
Tibetans, Falun Gong practitioners, underground
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Christians, human rights lawyers, citizen
journalists, "Tiananmen Mothers," pro-democracy
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activists, truth-telling scholars, disgruntled
workers, landless farmers, and now the flood
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victims.
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The list goes on and on…
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In fact, the CCP is sitting on a volcano of
boiling resentment that can erupt at any time.
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This internal instability is more threatening
than any external pressure coming from the
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US and the West.
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Xi Jinping needs an external conflict that's
big and dramatic enough to divert attention,
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shift blame, and reunite the Chinese people
under the banner of nationalism.
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Creating a new conflict to cover up an existing
one is the most typical survival tactic that
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the CCP has used in the past 100 years.
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Mao Zedong once said that the CCP has two
weapons: one being the gun and the other the
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pen.
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In all of its political campaigns or battles
with internal or external enemies, the CCP's
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propaganda machines always preceded physical
or military attacks.
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A few days ago, the regime announced a military
exercise in the South China Sea from August
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6th to the 10th.
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It also issued a warning to declare a 100,000
square kilometer area as having restricted
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access.
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No ships are allowed to enter during this
exercise, which is the largest in recent years.
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From August 3rd to the 16th, the US Navy is
also conducting its largest military exercise
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since the Cold War, with 5 US fleets deployed
across 17 time zones, covering Europe, Africa,
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and Asia.
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Almost concurrently, there is a joint military
exercise led by the US Indo-Pacific Command
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with participation by Japan, Australia, and
the United Kingdom.
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Now, in light of this military activity, and
in regard to Didi and other companies in the
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US markets, some experts say that Xi wants
to see large Chinese companies delisted from
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American stock exchanges in preparation for
a war to take over Taiwan.
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A war to unify China might be his only option
for holding on to power, for the CCP to survive
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yet again by solidifying support from his
countrymen under the banner of nationalism.
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But it's a big gamble for Xi, and it's his
last gamble to save the Chinese Communist
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Party.
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And the stakes are very, very high.
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Interestingly enough, it seems that the United
States is testing Xi.
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At about 4 pm on August 6, 2021, the US Marine
Traffic website showed that a US Navy surveillance
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ship, the Victorious T-AGOS-19, entered the
Chinese military’s restricted area during
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the exercise.
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I don't know what will happen next, but it
certainly is a nail biter.
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We’ll be keeping an eye on the developments.
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You can watch my previous video on Chinese
factional politics and also my series on common
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Western misconceptions about China.
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And I will certainly keep you updated.
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