As a political decision maker, the Chinese Minister of Natural Resources, Lu Hao, is at the centre of a great transformation of today’s China.
Former Governor of Heilongjiang from 2013 to 2018, he was also First secretary of the Communist Youth League and later vice-mayor of Beijing.
He is also a full member of the Central Committee of the Communist Party of China (CPC), although he was born only in 1967, in Shanghai or probably in Xi’an.
The effective political systems favour and foster the careers of the best young people.
As President Xi Jinping has often pointed out, this is the right time for a comprehensive and in-depth ecological analysis of Chinese development.
Once the economic development of a country that initially hosted the “second processing activities” of global economy was over, China is now getting ready to be a large global economy, an advanced economy having no obligations towards “old” technologies and markets – hence also fully ecological.
Since the 18thCPC Congress, President Xi Jinping has been vigorously supporting the idea of a fully Chinese “ecological civilization” and certainly the choice of Lu Hao as Minister of Natural Resources goes in this direction.
As both President Xi and Minister Lu Hao underline, now also soil erosion has become a very severe phenomenon in China.
Currently the annual soil erosion of both agricultural and non-agricultural land totals approximately 5 billion tons.
The area currently down to agriculture in China is worth about a third of the available land.
The desertification area is now equal to 2,622,000 square kilometres, i.e. 27.3% of all the land surface available.
Despite the many efforts made to reverse this trend – and not only recently -currently China is the country with the lowest per capita share of forests in the world.
Pollution is still heavy, especially in the case of water, but President Xi (and Minister Lu Hao) have quickly got to work.
President Xi Jinping stated: “Clean waters and green mountains are as valuable as mountains of gold and silver”.
The President not only wants a high GDP, but above all a strong and stable “green” GDP.
The First World markets pollute the Second but, above all, the Third World – and today China is not Third World for anyone.
Being subject to pollution is like being subject to foreign powers.
Hence President Hi Jinping’s fundamental idea is that protecting the environment and increasing productivity are mutually reinforcing goals.
Just like Minister Lu Hao, President Xi Jinping believes that there is a scientific and rational connection between environmental protection and economic development and that the purpose of the CPC action is to enhance the people’s quality of life and their happiness index.
Hence President Xi Jinping’s fundamental idea is to strictly follow the scientific and technological criteria, by increasing the use of natural resources and – precisely for this reason – also developing the blue economy, while respecting the objective laws of nature and, hence, also the laws of socialist and rational economic development.
At the 18th CPC Congress, President Xi Jinping – and certainly also Minister Lu Hao – spoke of building a “beautiful China”.
As written in the documents of the 18th CPC Congress, “To meet the people’s desire for a better life is our mission” – hence President Xi Jinping (and Minister Lu Hao) maintain that “building an ecological society and civilization, which is connected to the people’s well-being, is our goal and the true future for the Chinese nation”.
President Xi Jinping’s policy line is – first and foremost – to “first protect, then scientifically demarcate the use and protection of nature, and later adhere to the red line of environmental and ecological protection”.
Here the primary concept is “protection first”.
The old industrialist and productivist criterion, whereby “merely keeping pollution under control” is enough, is now meaningless.
Therefore, whoever is in charge of the area where pollution has occurred must be considered – to all intents and purposes – liable both legally and practically.
We know that every year at least eight million tons of plastic are thrown into the oceans, and over half of this quantity comes from five Asian countries: China, Indonesia, the Philippines, Thailand and Vietnam.
This problem can be slowly solved with better collection, wider information and what President Xi Jinping precisely calls “ecological civilization”.
Furthermore, as early as 2017 China has begun its “action against air pollution, with the closure of over 150 coal-fired steel factories to reduce particulate matter in the air by at least 15% a year.
Again as from 2017, China has already achieved the 2020 target for the use of solar energy, with the even more ambitious goal of soon reaching the production level of 213 GW, five times higher than the current US annual production.
Considering the current technology data, it is like covering – only with solar panels – a surface larger than the Greater London area, namely 1,500 square kilometres.
Furthermore, also thanks to Minister Lu Hao’s action, in 2019 China rose from the 41stto the 33rd place in the world list of nations that are actively involved in climate change.
A great leap forward, although the greenhouse gas emissions increased in China both in 2017 and in 2019.
China, however, can currently meet the Paris Agreement criteria by stopping its greenhouse gas emissions within 2030, but only by increasing its renewable energy production by 20% and by using greater nuclear energy sources – a policy of which little is still said in the silly West.
Hence tripling the share of non-fossil fuels by the end of 2030 and establish a full market for Chinese emission trading.
If – as is very likely thanks to President Xi Jinping and Minister Lu Hao – China manages to do so, the global project to reduce the global temperature increase to “much less” than two degrees Celsius will be successful.
China is therefore fundamental for the ecology of the whole planet.
Moreover, China plans to increase the area of forests absorbing carbon dioxide by 45,000 square kilometres and it is slowly succeeding in reaching this goal, also thanks to the organization of natural parks, considering that China currently has over 12,000 perfectly organized natural parks and reserves.
There is a public health problem adding to the challenges outlined so far.
In China about 2.8 million children -mainly newborn babies – die due to pollution-related problems.
If we do not want to change the balance between generations – and certainly President Xi Jinping and Minsiter Lu Hao are very careful not to do so – the pollution issue becomes pivotal.
Just think about the retirement, employment and demographic transition between generations, with a burden of newborns’ deaths equal to 2.8 million a year.
The Chinese Climate and Ecological Policy System introduced in 2017, which Minister Lu Hao is greatly expanding, also provides for the careful monitoring of over 1,700 energy-producing companies and for the further final control of over three billion tons of greenhouse gases.
The size of China is still an outstanding issue and has led the country to have – in spite of everything – as many as 10 billion tons of CO2 released into the environment – about a quarter of the world total amount.
In any case, however, they are less than 23% compared to the Chinese CO2 production in the previous year.
As to water pollution, the State will spend as much as 30 billion for “cleaning” and purifying springs and water flows.
China will also improve its basic price system, with a view to fostering environmental protection and rural areas – a policy for the total cleaning of urban water and major springs, organized by Minister Lu Hao and supported by President Xi Jinping.
The first goal is to purify urban waste water, the major source of stable pollution of springs. Then China plans to “ecologizing” the Yangtze River and Lake Bohai, two other water flows that affect China’s whole rural and urban water system.
The project, however, will be completed and the cleaning of the big rivers and major water basins and reservoirs will go ahead.
There is a project to reduce the use of industrial water by 23% within 2020, when the first large national share of renewable energy will be massively used in China.
The law on the “prevention of soil and water pollution” entered into force on January 1, 2019, but it also provides for the census-taking of all Chinese land – to be carried out every ten years – as well as the establishment of monitoring stations everywhere – with data that can be spread at every level – and also the checking of toxic and noxious substances in soils and waters, with data that must become public – at least partially. It finally provides for the creation of funds for cleaning land and water, which every local and regional authority must envisage in the budget.
“Rehabilitation systems” for polluting agricultural or industrial companies are planned.
With specific reference to the desalination of sea water for industrial and human use, it should immediately be noted that China is one of the 13 countries with the lowest water availability in the world.
Moreover, most water resources are concentrated in the South, while Northern and Western regions tend to suffer from drought.
As President Xi Jinping and Minister Lu Hao point out, population growth, mass urbanization, climate change and gradual reduction of water reserves are all conditions that make the water issue crucial for continuing China’s economic development.
In addition to reorganizing national water reserves – as can be seen in projects such as the Diversion of Northern Waters – water is never really sufficient and, hence, the other fundamental issue of President Xi Jinping’s and Minister Lu Hao’s water scheme is desalination and the recycling-purification of waste water.
Here the real problem is desalination, considering that 43% of the Chinese population lives in the 11 coastal provinces, which anyway account for 13.7% of the Chinese territory.
In coastal areas, however, the water supply is even lower than the national average.
Nevertheless, coastal areas account for over 65% of China’s national GDP.
However, the water resources of China’s coastal areas are only about 28% of the total national ones.
Hence desalination is a solution.
Currently over 150 countries use this system.
Moreover, China’s desalination project has lasted for at least 60 years.
Currently, however, after a series of regional and sectoral attempts, a real desalination industry has developed in the Hebei Province, as early as the first project in Datang Wangtang in 2005.
The specific membrane technology is already well- developed, but also microfiltration is available – with a national production exceeding 10,000 square metres per day for each of the approximately 150 plants, but with additional 71 sea desalination plants, operating at a reduced pace, and with 35% of the total water resources used for people’s personal use.
Only 35% of water resources, however, is used for energy production and for other industrial uses, including paper and metal production.
The desalination plants are mainly located in four regions, namely Zhejiang, Shandong, Liaoning and Hainan.
The main technologies are Reverse Osmosis (RO) with UF (Ultra Filtration) membranes and Multi-Effect Distillation (MED), which is thermal desalination.
In China, 120 are RO plants and 7 are the largest ones with MED technology.
With regard to soil protection, it has been ascertained that 402 industrial sites and 1,401 agricultural areas record a high concentration of heavy metals.
36% of agricultural areas and 28% of industrial sites are contaminated.
China defined the regulations carefully and made them even stricter in 2016, but the final regulatory framework was designed in August 2018.
As already seen, the criterion used is prevention.
The relevant authorities must therefore evaluate each project ecologically, before its implementation.
The law lays down each party’s responsibility, with a sequence of obligations no one can escape.
However, the real problem in China is the relationship between arable land and urban areas.
New buildings have reduced the area down to agriculture by almost 60% compared to 1990.
2.47 million hectares – equivalent to the surface of the US State of Vermont – were reclaimed on the basis of the new legislation on the rebalancing between agricultural land and housing areas.
Nevertheless, only 37% of the land reclaimed on the basis of this legislation is reused for agricultural purposes, while 44% remains merely unploughed land and 19% becomes forests.
Moreover, the climate and bio-chemical change of soils is often at the basis of China’s great internal migrations, which are a further structural distortion of an already anomalous – and now stable-concentration of people from internal towards coastal areas.
According to the 2016 data, the Four Modernizations and the subsequent reforms pushed over 200 million migrants to the Chinese coasts.
In the future, however, the real core of the issue for China will be harvesting electric power from the dynamics of ocean wave movements.
Many energy market analysts believe that the market for this type of electricity will increase by 10.25% a year until 2023.
The market is expanding especially in Europe, which was the first continent to develop this technology, but now the idea has spread to the United States, Australia and, above all,China.
Currently there is a device available for harnessing the power of ocean waves known as “Penguin”, which is moored to the seabed at 50 metres depth. Only 2 meters are visible above the sea water surface.
This 1,600 ton device is around 30 m long.
It is manufactured by a Finnish company.
Devices for producing wave-based energy -with an average capacity of 40 MW – are already available in the Caribbean, Antigua, Bermuda and Curaçao, through a mechanism that will be operational in late 2019.
Nowadays also the microgrid technology is available, i.e. a mix of energy sources, users and storage systems that, in this case, combines solar sources with those from the ocean wave cycle, as currently happens off the Australian coast.
Today the energy available from waves, and hence from tides, is 8.2 GW for the whole China.
It is a huge amount.
China’s research for this type of technology is currently based on a vertical turbine, developed by the Harbin University, as well as on a horizontal axis turbine, studied by the University of Zhejiang, and on other prototypes.
Hence the potential energy available from the Chinese wave cycle is probably much greater than expected – by over 25% – and this does not regard the technologies currently applied, but the physical potential of wave movements, which can be easily calculated.
As early as the 1970s China has developed this sector, starting from Jangxia (3900 Kw), and later in the regions of Bachimen, Shandong and Maluan Bay, which are already active only partly.
There have also been attempts – far from useless – to produce energy from the sea heat exchanges.
But what are the structural limits of the Chinese marine renewable energy project?
In general terms, a certain and stable lack of investment in the sector, which enables Western technologies to evolve more rapidly and, above all, more suitably for the future massive consumption of “sea wave-based” energy.
We also need to consider the nature of places on the Chinese coast, with the spreading of typhoons and dangerous situations, and finally the use of oceans for security, desalination or fishing operations.
Still today, a massive spreading of these wave-based energy technologies is needed, as well as a common base between universities, government, local authorities, Party and users to create a strong and stable market for this type of energy.
The Inertial Sea Wave Energy Converter (ISWEC) could be the solution.
It is a device placed inside a float, with an operating criterion based on an inertial system to exploit the sea wave movements to produce energy.
The stability of the float and of the device is ensured by a gyroscopic inertial system, which works when the hull oscillations caused by the movement of waves induce the rotation of the gyroscope platform that is then converted into electricity by the power generator.
The additional aspect is that this system can be fine-tuned and adapted to the changes in sea conditions, which allows to relate the frequency of maximum productivity to the frequency of the incident wave.
Everything is regulated by the spin engine of the gyroscope flywheel and by the real-time dataon the area’s weather conditions.
You can also easily secure the system, if special sea conditions or other phenomena occur.
The hull of the float has dimensions of 8 m width, 15 m length and 4.5 m height, as well as a draft of 4 metres.
The two gyroscopes inside the “buoy”, i.e. the floating positioning system, have an installed electric power of 130 kW, as well as a sensor platform capable of immediately collecting data from the local sensors, to be related to the remote sensor data and the updated weather forecasts.
They can also predict the wave characteristics and finally generate the short-term control signal for all the device operations and drives.
The average annual productivity per each floating position system is 250 MWh, which allows to save 68 tons of CO2 emissions each year, and the structure will obviously occupy a sea area of approximately 150 square metres where fishing will be forbidden.
The device is the result of research carried out by the Polytechnic of Turin, developed by a spin off and put into operation thanks to an agreement between ENI, CDP, Cassa Depositi e Prestiti, Fincantieri and Terna.
As Arthur Rimbaud wrote in one of his poems, “Eternity.
It is the sea mingled with the sun.”
China & Nepal working towards a genuine good-neighbour tie
Authors: Himal Neupane & Jamal Ait Laadam
Although China and Nepal are very different in terms of each territorial size, population, economic capacity, technological prowess and above all military power, the bilateral relations between them have been undergone consistently and significantly. Since 1955 when China and Nepal formally recognized each with, their bilateral relationship has been characterized by equality, harmonious coexistence, everlasting friendship and overall cooperation. Particularly during the past over 40 years, China and Nepal have undergone substantial developments in view of mutual understandings. For example, in 1996 the two sides for the first time agreed to build up a good-neighbour partnership of the 21st century.
In line with this spirit of mutual respect and equality, Chinese President Xi Jinping paid a state visit to Nepal on October 12-13, during which the heads of the two states formally announced that they elevated the China-Nepal Comprehensive Partnership of Cooperation to Strategic Partnership of Cooperation in light of their many common values to enhance cooperation It is reported that President Xi frankly said Nepal wouldn’t be a landlocked country in the future as the trans-Himalayan connectivity network ultimately will support sustainable development and stability of the entire South Asia region. This is not only a promise from a large neighbor, but also a sort of responsibility from a rising major power of the world, which aims along with other parties, either large or small, to create an international community of shared future.
Accordingly, on October 12, Nepal and China signed 18 memorandums of understanding and two letters of exchange. The priority was laid down with a focus on the implementation of signed agreements and acknowledged policies. Besides, they also reaffirmed the commitment to broaden the level of cooperation under the spirit of the Belt and Road Initiative (BRI). Moreover, China and Nepal have agreed to enhance connectivity through ports, railways, roads, aviation and communications within the broad framework of the BRI and the Trans-Himalayan Multi-Dimensional Connectivity Network which are of strategic significance. As Chinese President Xi put it, “our two peoples have shared weal and woe, and set an example of friendly exchanges between neighboring countries, and we would act to carry forward the traditional friendship and take the bilateral relationship to a new and higher level via his state visit to Nepal.
For sure, nothing is free in the realm of international politics as the realists argue what China and Nepal need from each other are their common geopolitical and geo-economical interests? This kind of inquiry is sensible and also cynical. In fact, historically China and Nepal had been at good terms for a few centuries, and during the British colonial era, Nepal actually acted as a natural buffer state between imperial China and colonial India. Since 1949 when the People’s Republic of China was founded soon after the independence of India, Nepal ended its isolation and forged amicable ties with India and other countries. Initially, Nepal had close ties to India in terms of culture, ethnics and even military affair, but it never accepts external domination. In 1955 Nepal formally recognized Beijing as the legitimate government of China and since then, it has consistently supported China in foreign affairs. Meanwhile, China has offered economic aid to Nepali reconstruction in a gradual way.
However, since the 1980s, China has steadily transformed itself into the second largest economy of the world with its alarming manufacturing capability and progressive technologies. Due to this, China has provided more assistances to Nepal and other neighbours to share Chinese public goods, especially in terms of the infrastructure projects and alleviation of poverty. For example, President Xi announced in 2018, “In the coming three years, China will provide assistance worth RMB 60 billion to developing countries and international organizations participating in the Belt and Road Initiative, and contributing an additional RMB 100 billion to the Silk Road Fund.” As a developing country nestled in the heart of the Himalaya, Nepal surely needs to expand its infrastructure through involving itself into the BRI with the view to exploring and finally harnessing its huge potential sources —hydropower—for export.
Strategically speaking, China needs to maintain its border areas peaceful and stable in light of its “NEWS strategy” that means while China tries to consolidate its entente partnership with Russia on the North and pacifying its East coast, it necessarily aims to sustain the BRI projects to the West and the maritime silk route to the South. This is the core of the NEWS strategy initiated by the Chinese elite since President Xi took power. Consider Nepal’s strategic location and political stability, China is sure to promote the bilateral ties as the two previous MOUs were signed in Beijing including to rebuild Chinese—Nepali transit road network agreements. It will help northern Himalayan areas get an alternative transit route and also facilitate the local economics, as much important part of the BRI as the economic corridor between China and Pakistan. Moreover, since 2016, a freight rail line was even completed linking Lanzhou, a heavy industrial city in the West of China through Xigaze in Tibet, down to the capital of Nepal. This is a truly strategic pivot of the grand BRI project.
To that end, President Xi revealed to his Nepali counterpart Bidhya Devi Bhandari that the two sides should work closely to carry out the construction of a trans-Himalayan connectivity network, and expand exchanges and cooperation in various fields. For her part, Nepali President Bhandari graciously welcomed Xi’s state visit to Nepal and stressed that the rise of China backed up by its modernization drive will help bring benefits to Nepal and promote regional peace and prosperity. In light of this cordiality, the two governments issued a joint statement on Oct. 13, agreeing on more practical cooperation in the new phase of bilateral relations. For a few key points serve to inllustrate that first, the two sides agreed to take the BRI as an opportunity to deepen mutual benefits in arious fields including the Kathmandu-Pokhara-Lumbini Railway Project. Furthermore, cooperation will cover the Zhangmu/Khasa port, the Lizi/Nechung port, and the three North-South corridors in Nepal. Second, the two sides will hold comprehensive discussions to strengthen trade relations, including to take positive measures to increase Nepal’s exports to China and to facilitate Chinese banks to open their branches and other financial services in Nepal. Last, China promises to help Nepal shake off the status of being a least developed country and achieve the sustainable development goals in the next two decades.
Since states are committed to each other by the nature of the world in which they exist, any close cooperation between China and Nepal is never bilateral only, that means there is always local, regional and international concerns, suspicions and even hostilities towards either China or Nepal or both. Geopolitically, India is the first power, understandably, to feel uncomfortable if not angry. This is the reason why President Xi made his first trip to India prior to his state visit to Nepal, and held comprehensive talks with Indian Prime Minister Modi. Second, China and Nepal also need to coordinate each other deftly to convince other neighbours such as Sri Lanka and Bangladesh that any sort of their cooperation would never be exclusive but inclusive and open all others in the South Asia. Geo-economically, China has reiterated that it would not seek to use its economic or financial leverages to “dictate” the local affairs of the recipient countries. Meanwhile, Chinese companies also need to move in prudently and read the local laws and political norms before jumping into the businesses.
Xi has frequently said, China is the largest developing country and also a learning country all the time. In order to promote China’s strategy to link the countries involved, mutual respect and equality are the prior condition to the long-term cooperation. In light of this, it is expected that Xi’s state visit to Nepal, the first one by a president of China over the past 26 years, will unlock new strategic opportunities for bilateral relations, as well as positively promote their ties with India by understanding the prospects for trilateral cooperation. It is clear that Chinese-Nepali economic integration through BRI is unstoppable, so it is sensible for India and the others in the region to take the opportunity to extend the proposed high-speed railway between those two all the way south to the nearby West Bengal port of Kolkata to more closely tie the three together in a system of complex economic interdependence. This is a balanced approach to prevent an open rivalry between the key member states of the BRICS and the SCO over their common neighbors. Given this, Xi’s visit to both India and Nepal might be the very time to enhance the trilateral understanding among Nepal with its giant neighbor. To that end, Nepal, though a much smaller state compared to China and India, could play positively a role as the bridge for building a more trust-based relationship across this region.
China has showed its willingness to share with Nepal its development experiences, practices and inclusive economic governance approaches. In doing so, geopolitical factors should never be the obstacles for China-Nepal cooperation. Rather, Nepal could serve as a dynamic bridge between China and India, and China and South Asia.
Semiconductor War between Japan and South Korea
Authors: Gleb Toropchin and Anastasia Tolstukhina
In the summer of 2019, a trade conflict broke out between Tokyo and Seoul and the matter is about more than the history between the two countries. The two developed economies have long been locked in a competition on the global cutting-edge technologies market. At the same time, they are links in the same technological chain.
At first glance, the exchange of trade restrictions that is taking place against the background of mutual accusations is nobody’s business but Tokyo and Seoul’s. Nonetheless, the consequences of the confrontation between the two countries have a global nature. The present article analyses the causes of the disagreements and looks at how the situation may develop
Introducing Restrictions and Removal from the “White List”
Despite the events of the colonial past , as well as the current territorial disputes that are so typical of Asia’s international politics , South Korea is one of Japan’s three largest trade partners. Japan exports into South Korea up to $54 billion in goodsThe key commodities include semiconductors and materials for their manufacture
The dependence of South Korean companies on imports of fluorinated polyimides and photoresists exceeds 90 percent, and their dependence on imports of hydrogen fluoride is around 44 percent (although this figure has fallen gradually from 72 percent in 2010)
However, on July 1, 2019, the Government of Japan announced restrictions on the export of commodities to South Korea that are of critical importance for microelectronics, and on July 4, the changes to the procedure came into force
Given the long-established delivery mechanism, such a political step was a surprise for many. The restrictions mainly affected three key materials for the microelectronics industry: fluorinated polyimides, hydrogen fluoride, and photoresists (these materials are used in the manufacturing of semiconductors and display panels). This measure does not mean that deliveries of these materials to South Korea have been completely stopped; however, from now on, it may take up to 90 days to approve transactions. Additionally, Japan said it would be taking South Korea off its “white list” of trade partners. The list includes states that are believed to be safe from the point of view of exporting strategic commodities and that are granted trade preferences
Let us try to understand why the Government of Japan took such steps
Pressure from Taiwanese and South Korean competitors
In 1986, an agreement was signed between Tokyo and Washington that prohibited Japan from undercutting global semiconductor prices. This step was initially intended to make the United States more competitive. However, even in those circumstances, Japan managed to take a significant chunk of the global semiconductor market from the United States in the late 20th century and retain its high positions until the 2010s. However, as early as 2012, experts noted that pressure from Taiwanese and South Korean competitors resulted in semiconductor sales of Japan’s four chip-makers, Toshiba, Renesas, Sony and Fujitsu taking a marked dip
Samsung Electronics succeeded in mastering the subtleties of developing technologies just at the right time, while Japan began to lag behind in R&D due to problems with formal education, and its revenues from global sales of microelectronics were falling against the backdrop of falling prices and the high exchange rate of the Japanese yen. Among other causes of this phenomenon, Japanese experts cite the desire to create hi-tech goods without account for high costs, and lack of innovative ideas
Today, South Korea is the leading manufacturer of memory microchips. Samsung Electronics and SK Hynix hold two-thirds of the global market. Additionally, both the United States’ Apple and China’s Huawei depend on the products produced by South Korean companies. Integrated circuit units account for 17 percent of South Korea’s exports (the entire microelectronics sector accounts for nearly a quarter of its exports), compared to less than 4 percent for Japan
An analysis of the global microelectronics market demonstrates that, currently, the market particularly values dynamic random-access memory semiconductors (DRAMS) that hold tremendous significance for such cutting-edge technologies as artificial intelligence, the Internet of Things and robotics. South Korea holds impressive positions in this area as well: Samsung and SK Hynix control 72.8 percent of the DRAMS market and 46.8 percent of the global flash memory market
Reasons for Introducing Restrictive Measures
The East Asia Forum reports that Japan’s strategy of opposing Seoul was developed jointly by the country’s Ministry of Economy, Trade and Industry, Ministry of Foreign Affairs and Ministry of Agriculture, Forestry and Fisheries. The Cabinet of Ministers subsequently supported these measures, thereby making the key decision to transfer the issue into the political realm
It appears that Japan’s decision to impose restrictive measures was prompted by the fact that the country has clearly fallen behind technologically on the global microelectronic market, which negatively affects both the country’s economic indicators and its national security
According to the expert June Park, the Government of Japan decided to institute the restrictive measures out of concern for national security, since, in exporting rare materials to South Korea, Tokyo cannot be certain they will be used properly
The Japan Times notes that Tokyo justifies the introduction of increasingly strict export requirements by claiming that confidence in South Korea has been undermined. In particular, some media outlets report that between 2015 and March 2019, no fewer than 156 materials, including hydrogen fluoride, were smuggled out of South Korea. There were also reports of hydrogen fluoride being exported to countries that are under international sanctions (Iran, Syria and even North Korea). Another reason for the restrictions is Tokyo’s concerns that South Korea violates intellectual property rights
South Korea denies all accusations. Its arguments are logical: Iran and Syria are friends of North Korea, therefore, Seoul has no reasons to help their regimes. President of South Korea Moon Jae-in called for the differences to be resolved by diplomatic means. However, the talks held on July 12, 2019, in Tokyo did not yield any results. Consequently, Moon Jae-in instructed the relevant agencies to develop reciprocal measures. At about the same time, there were reports of South Korea possibly filing a grievance with the World Trade Organization. As a result, hearings on the issue were launched in Geneva on July 24, 2019
In late July 2019, news broke that Tokyo was considering further restrictions since Japan believes the re-selling of strategic materials by Seoul to be a violation of the non-proliferation regimes regarding both weapons of mass destruction and conventional weapons. In this case, the restrictions would extend to other types of commodities and materials. On August 2, the Cabinet of Japan approved the decision to take South Korea off its “white list” (where the Republic of Korea was the only Asian state), thereby depriving it of trade preferences in regard to the materials mentioned above. The full list exceeds 1100 items
Despite these events, several deliveries of these materials from Japan to South Korea were made in August. However, they did not result in a thaw in bilateral relations. Seoul reciprocated by putting Japan on a restrictive trade list and terminating the military intelligence-sharing pact with Tokyo
“Wu Wei” American Style
China holds leading positions in deposits of rare-earth metals. Moreover, approximately 90 percent of the world’s rare-earth magnets are manufactured in China. Japanese companies use China’s raw materials to manufacture fluorinated polyimides, hydrogen fluoride and photoresists that are subsequently supplied to South Korea, Taiwan and other countries to be used in manufacturing chips, displays, etc. The circle is complete when these commodities go back to China to be used in the manufacture of finished products (such as smartphones and tablets), creating a sort of a closed-loop. Thus, the manufacture of competitive hi-tech products today is impossible within a single economy, and Chinese companies depend on parts coming from other Asian countries
Tracing the entire technological chain, we can assume that the Japan–South Korea conflict is closely linked to the trade war between China and the United States. South Korea’s Samsung Electronics is hindered by the restrictions on deliveries of Huawei memory chips since the latter is under U.S. sanctions. In turn, interrupting the chain of semiconductors delivery from South Korea will slow down the development of artificial intelligence in China. And who benefits from this? This is a rhetorical question
It would seem that the United States should be interested in cordial relations between their allies in the region, allies that form a sort of counterbalance to China and are ideological antagonists to North Korea. The White House, however, intentionally or unintentionally, demonstrates adherence to the Taoist principle of inaction, or “wu wei” (无为 in simplified Chinese), which entails a conscious refusal to act and the assumption of a contemplative stance. From the outset of the confrontation in July 2019, the United States announced it would not interfere in the conflict. Despite individual experts calling upon the United States to act as an intermediary between the two Asian states, Washington did not change its position
We should also note here that the Japanese company Toshiba announced the construction of a facility for the production of NAND-type (from the English NOT-AND, that is, a binary logical element) flash memory devices in Iwate Prefecture in cooperation with U.S. chip manufacturer Western Digital. We can cautiously assume that the United States and Japan are progressing toward a “technological union” in order to defeat China in the race for domination of the semiconductor industry
Speaking of the impact that the conflict has on public opinion in both countries, we can quote a survey conducted by Japan’s Asahi Shimbun in mid-September 2019. Overall, slightly less than one third (29 per cent) of respondents admitted that they had a negative opinion of South Korea. This was far more pronounced among older people, which can be linked to their conservative views and the “proximity aberration” phenomenon (put simply, the older generations remember the events of the 20th century well)
As for South Korea, an anti-Japanese “grassroots” campaign has been launched in addition to the “top-down” process. In the second half of the summer of 2019, slogans『 가지않습니다 사지않습니다 』 (Korean for “Do not visit, do not buy”) calling for boycotting trips to Japan and Japanese goods spread on Korean social networks. And it looks like they were successful to a degree. For instance, the Yonhap News Agency reports that the number of South Koreans travelling to Japan in August fell by 60 per cent compared to the same period last year
In the run-up to the 2020 Summer Olympics in Tokyo, the trade conflict has become a reason for manipulating public opinion in South Korea. Additionally, we cannot rule out the possibility that populists use the disagreements between Japan and South Korea to advance their domestic agenda on the eve of the elections to South Korea’s unicameral parliament scheduled for April 15, 2020
Forecast: Cloudy in the East
Losses from the Japan–South Korea trade war may exceed $80 billion. There has already been a drop in sales of South Korean semiconductors manufactured by Samsung Electronics and SK Hynix. Moreover, the conflict threatens to disrupt the entire global technological production chain in microelectronics. The expert Robert Farley described this conflict (and the U.S.–China trade war) as “weaponizing interdependence.” One of the analysts with The Economist Intelligence Unit called this situation “mutually assured destruction.”
The Yonhap News reports that the consequences of the trade conflict have had greater negative effect on the Japanese economy than on the South Korean economy. For instance, in July–August, South Korean exports to Japan have fallen by 3.5 per cent, while Japanese exports to South Korea have dropped 8.1 per cent
The South Korean economy has also suffered against the backdrop of these events. Here, Seoul has only two ways out of this predicament:
-Transitioning to domestic analogues, which LG Display and Samsung Electronics already did in September of this year. Additionally, the country earmarked 2.1 trillion South Korean won in the 2020 budget to overcome the dependence on the export of rare materials from Japan
-Searching for alternative sources of hydrogen fluoride and other rare materials for microelectronics. Media outlets have reported that Russia might be a potential supplier of high-purity hydrogen fluoride. The head of the Korea International Trade Association said that Moscow had offered to supply hydrogen fluoride to Seoul. However, it is not easy for South Korean companies to transition to Russian imports of this and other materials for microelectronics. The physical and chemical properties of the products must be tested for a rather lengthy period of time (upwards of six months)
Apparently, the status quo on the microelectronic market will continue in the short-term, and both parties will seek ways to minimize losses. And we can already see evidence of this. In September and October, the Government of Japan approved deliveries of hydrogen fluoride to Samsung Electronics and SK Hynix
At the same time, if Tokyo and Seoul fail to find common ground in the medium and long term, then the current global technological chain in microelectronics may be dismantled, which will, of course, negatively affect the growth rate of the global economy. However, so as not to end our study on a pessimistic note, let us note that, under the current circumstances, many hi-tech companies around the world, including those in Russia, now have the chance to become new links in the value chain and occupy its niche in microelectronics
From our partner RIAC
 In 1910, the Empire of Japan annexed the entire Korean peninsula. Korea essentially became a Japanese colony. The Japanese language and culture were forced onto the Korean people. Up to 200,000 ethnic Koreans served in the Imperial Japanese Army during World War II (including future president of South Korea and “father of the economic miracle” Park Chung-hee). Today, Japanese war crimes are a subject of talks between South Korea and Japan. In 2015, Minister of Foreign Affairs of Japan Fumio Kishida promised 1 billion yen to the victims of violence in compensation, and Prime Minister Shinzo Abe offered a public apology for Japan’s actions during the war.
 The dispute concerns the Liancourt Rocks, a group of small islets that the Koreans call Dokdo (“Solitary Islands”) and the Japanese call Takeshima (“Bamboo Islands”). Back in the early 20th century, Japan claimed sovereignty over these islands; however, following its defeat in World War II, it was forced to abandon its colonial acquisitions. On the other hand, the 1951 Treaty of San Francisco does not mention this territory, which gives Japan formal grounds to dispute the sovereignty of the islands where South Korea maintains military and civil infrastructure.
Future Trends of China’s Diplomacy
This year 2019 marked the 70th anniversary of the founding of the People’s Republic of China (PRC), and China’s diplomacy has also gone through a journey of 70 years. The 70-year history of the PRC can be divided into the first 30 years after its founding and the second 40 years since opening and reform were initiated in 1978. The characteristic of china diplomacy is a responsible nation, rational behavior and the confidence of great power.
China had a clear break with the old diplomacy of humiliation; established a new kind of diplomatic relations with other countries on the basis of equality and mutual benefit; secured an equal position and dignity on the global stage; gained diplomatic independence by safeguarding and strengthening national independence, and protecting national security and territorial integrity; settled the border disputes left over from history with most neighbors by peaceful means, creating a stable neighborhood in general; established strong friendships with the vast majority of developing countries through mutual support; and set up a new diplomatic contingent for seeking the diplomacy of independence. The following are the future expectations of China diplomacy:
Firstly, Deng Xiaoping’s directive, “Don’t seek for leadership,” stays powerful in China’s new diplomacy, so China’s future diplomacy will keep on emphasizing on the management of the crisis, economic diplomacy, multilateral diplomacy, cultural diplomacy, cooperation, and accommodation while protecting the main national interest. Solving problems and managing crises will stay an important characteristic of China’s diplomacy, particularly in its ties with other major powers. Meanwhile, in cooperation with other major powers, China will appear to be more active in managing fundamental global issues at the strategic level.
Secondly, The Chinese government has repeatedly said that China does not have a plan of challenging the international system and has focused on the importance of being a “responsible member” of the universal society. As of late, China has developed new concepts for its foreign policy orientation, just as (1) “new security” emphasizing shared and cooperative security, (2) “peaceful development” focusing on non-violence commitment, (3) “win-win” cooperation denying a zero-sum comprehension of international affairs, and (4) building a “harmonious world” that promoting harmony with diversity, solving conflict through dialogue, and democratization of world governmental issues.
As these concepts demonstrate, China has no desire of being revolutionary in the international system, rather, it intends to be a responsible member of world affairs. Economic diplomacy will remain to be emphasized by china. While trade will keep on being a fundamental diplomatic focus, energy security and energy diplomacy will be given additional accentuation. Energy supply, energy shipment, and energy-saving cooperation will be fields where the diplomacy of china will move forward.
Lastly, Multilateral diplomacy will take on an even greater role in the future diplomacy of China. China will become more involved at the global level and in regional affairs at the United Nations. As the identity of China is more globally and regionally established, the current concept of multilateralism in the overall diplomatic strategy of china can be re-defined to realize national interests, address thorny issues, and provide governance in a complex world. More attempts will be created to improve regional integration between the SCO and East Asian. Finally, various needed diplomatic attempts may need to be further reinforced. China will keep on being cooperative, however, it will likewise be more active. All things considered; cultural diplomacy will be a new attribute of China’s diplomacy. Confucianism, an extremely cosmopolitan doctrine that promotes harmony and peace through human relations, will be an important component of cultural diplomacy, both to strengthen China’s soft power and to reduce the negative result of the China threat theory.
China has accumulated a wealth of experience over the past 70 years, understanding that China cannot develop without the world and that without China the world cannot prosper. China’s future and fate have been closely linked to the rest of the world. What is certain is that China will adhere to the path of peaceful development and that the people of China will join the people from all other countries in working to realize the lofty dream of a harmonious world.
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