Megvii, an artificial intelligence start-up, told Chinese state media that the surveillance system could give the police a search engine for crime, analyzing huge amounts of video footage to intuit patterns and warn the authorities about suspicious behavior. He explained that if cameras detected a person spending too much time at a train station, the system could flag a possible pickpocket.

Hikvision, that aims to predict protests. The system collects data on legions of Chinese petitioners, a general term in China that describes people who try to file complaints about local officials with higher authorities.

It then scores petitioners on the likelihood that they will travel to Beijing. In the future, the data will be used to train machine-learning models, according to a procurement document.

Local officials want to prevent such trips to avoid political embarrassment or exposure of wrongdoing. And the central government doesn’t want groups of disgruntled citizens gathering in the capital.

A Hikvision representative declined to comment on the system.

Under Mr. Xi, official efforts to control petitioners have grown increasingly invasive. Zekun Wang, a 32-year-old member of a group that for years sought redress over a real estate fraud, said the authorities in 2017 had intercepted fellow petitioners in Shanghai before they could even buy tickets to Beijing. He suspected that the authorities were watching their communications on the social media app WeChat.

The Hikvision system in Tianjin, which is run in cooperation with the police in nearby Beijing and Hebei Province, is more sophisticated.

The platform analyzes individuals’ likelihood to petition based on their social and family relationships, past trips and personal situations, according to the procurement document. It helps the police create a profile of each, with fields for officers to describe the temperament of the protester, including “paranoid,” “meticulous” and “short tempered.”

Many people who petition do so over government mishandling of a tragic accident or neglect in the case — all of which goes into the algorithm. “Increase a person’s early-warning risk level if they have low social status or went through a major tragedy,” reads the procurement document.

When the police in Zhouning, a rural county in Fujian Province, bought a new set of 439 cameras in 2018, they listed coordinates where each would go. Some hung above intersections and others near schools, according to a procurement document.

Nine were installed outside the homes of people with something in common: mental illness.

While some software tries to use data to uncover new threats, a more common type is based on the preconceived notions of the police. In over a hundred procurement documents reviewed by The Times, the surveillance targeted blacklists of “key persons.”

These people, according to some of the procurement documents, included those with mental illness, convicted criminals, fugitives, drug users, petitioners, suspected terrorists, political agitators and threats to social stability. Other systems targeted migrant workers, idle youths (teenagers without school or a job), ethnic minorities, foreigners and those infected with H.I.V.

The authorities decide who goes on the lists, and there is often no process to notify people when they do. Once individuals are in a database, they are rarely removed, said experts, who worried that the new technologies reinforce disparities within China, imposing surveillance on the least fortunate parts of its population.

In many cases the software goes further than simply targeting a population, allowing the authorities to set up digital tripwires that indicate a possible threat. In one Megvii presentation detailing a rival product by Yitu, the system’s interface allowed the police to devise their own early warnings.

With a simple fill-in-the-blank menu, the police can base alarms on specific parameters, including where a blacklisted person appears, when the person moves around, whether he or she meets with other blacklisted people and the frequency of certain activities. The police could set the system to send a warning each time two people with a history of drug use check into the same hotel or when four people with a history of protest enter the same park.

Yitu did not respond to emailed requests for comment.

In 2020 in the city of Nanning, the police bought software that could look for “more than three key people checking into the same or nearby hotels” and “a drug user calling a new out-of-town number frequently,” according to a bidding document. In Yangshuo, a tourist town famous for its otherworldly karst mountains, the authorities bought a system to alert them if a foreigner without a work permit spent too much time hanging around foreign-language schools or bars, an apparent effort to catch people overstaying their visas or working illegally.

In Shanghai, one party-run publication described how the authorities used software to identify those who exceeded normal water and electricity use. The system would send a “digital whistle” to the police when it found suspicious consumption patterns.

The tactic was likely designed to detect migrant workers, who often live together in close quarters to save money. In some places, the police consider them an elusive, and often impoverished, group who can bring crime into communities.

The automated alerts don’t result in the same level of police response. Often, the police give priority to warnings that point to political problems, like protests or other threats to social stability, said Suzanne E. Scoggins, a professor at Clark University who studies China’s policing.

At times, the police have stated outright the need to profile people. “Through the application of big data, we paint a picture of people and give them labels with different attributes,” Li Wei, a researcher at China’s national police university, said in a 2016 speech. “For those who receive one or more types of labels, we infer their identities and behavior, and then carry out targeted pre-emptive security measures.”

Mr. Zhang first started petitioning the government for compensation over the torture of his family during the Cultural Revolution. He has since petitioned over what he says is police targeting of his family.

As China has built out its techno-authoritarian tools, he has had to use spy movie tactics to circumvent surveillance that, he said, has become “high tech and Nazified.”

When he traveled to Beijing in January from his village in Shandong Province, he turned off his phone and paid for transportation in cash to minimize his digital footprint. He bought train tickets to the wrong destination to foil police tracking. He hired private drivers to get around checkpoints where his identification card would set off an alarm.

The system in Tianjin has a special feature for people like him who have “a certain awareness of anti-reconnaissance” and regularly change vehicles to evade detection, according to the police procurement document.

Whether or not he triggered the system, Mr. Zhang has noticed a change. Whenever he turns off his phone, he said, officers show up at his house to check that he hasn’t left on a new trip to Beijing.

Credit…Zhang Yuqiao

Even if police systems cannot accurately predict behavior, the authorities may consider them successful because of the threat, said Noam Yuchtman, an economics professor at the London School of Economics who has studied the impact of surveillance in China.

“In a context where there isn’t real political accountability,” having a surveillance system that frequently sends police officers “can work pretty well” at discouraging unrest, he said.

Once the metrics are set and the warnings are triggered, police officers have little flexibility, centralizing control. They are evaluated for their responsiveness to automated alarms and effectiveness at preventing protests, according to experts and public police reports.

The technology has encoded power imbalances. Some bidding documents refer to a “red list” of people whom the surveillance system must ignore.

One national procurement document said the function was for “people who need privacy protection or V.I.P. protection.” Another, from Guangdong Province, got more specific, stipulating that the red list was for government officials.

Mr. Zhang expressed frustration at the ways technology had cut off those in political power from regular people.

“The authorities do not seriously solve problems but do whatever it takes to silence the people who raise the problems,” he said. “This is a big step backward for society.”

Mr. Zhang said that he still believed in the power of technology to do good, but that in the wrong hands it could be a “scourge and a shackle.”

“In the past if you left your home and took to the countryside, all roads led to Beijing,” he said. “Now, the entire country is a net.”

Isabelle Qian and Aaron Krolik contributed research and reporting. Production by Agnes Chang and Alexander Cardia.

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To Pressure Taiwan, China is Now Targeting its Grouper Exports

FANGLIAO, Taiwan — Lin Chun-lai bought his grouper farm in southern Taiwan about a decade ago with an eye on mainland China’s growing appetite for live fish. In just a few years, the former electrician made enough money to comfortably support his family of four and even open a small inn.

Then China abruptly banned all imports of grouper from the island, in an apparent attempt at turning the economic screws on Taiwan, a self-governed island that Beijing claims as its own territory. The move cut Mr. Lin and other farmers like him off from their main market, putting their livelihoods at risk and dealing a huge blow to a lucrative industry.

Taiwan’s unification with China is inevitable, but most of Taiwan’s 23 million people are in favor of maintaining the island’s de facto independence. As Beijing has ramped up pressure on the island, Taiwan has moved to strengthen economic and diplomatic ties with friendlier countries, including the United States, those in the European Union and Japan.

In recent years, Beijing has sent military aircraft toward the island almost daily. It has tried to isolate Taiwan, peeling off its few remaining diplomatic allies and blocking it from joining international organizations. It has also increasingly sought to restrict the island’s access to China’s vast consumer market, banning Taiwanese pineapples, then wax apples, last year after it said the fruits brought in pests.

their ties to forced labor practices could portend trouble for industries that depend on materials from China.

In recent days, Taiwanese agricultural authorities have contacted grouper farmers to discuss ways that the government can help, including by providing low-interest loans and feed subsidies and expanding access to domestic consumers and overseas markets. Another idea being floated is to include the fish in individually packaged meal boxes sold at train stations and on trains by Taiwan’s railway administration. Taiwan’s Fisheries Agency said on Tuesday that the agency would spend more than $13 million to support the grouper industry.

Taiwan’s Council of Agriculture has said it would consider filing a complaint about the grouper ban to the World Trade Organization. Lin Kuo-ping, the deputy director general of the official Fisheries Agency, said the government had reached out to their Chinese counterparts to discuss the inspection process but had not heard back. China’s General Administration of Customs did not respond to an emailed request for comment.

Some grouper farmers said that if the ban was not lifted, they would have to settle for selling the fish on the domestic market at a huge loss. Until then, the fish will remain in the ponds. Mr. Lin, the grouper farmer, said he worried the groupers could die as a result of overcrowding.

He is now pinning his hopes on another kind of fish that he has been farming, the four-finger threadfin fish, which is also popular on the mainland. But he acknowledged that even this backup strategy was vulnerable to geopolitical shifts. Last year, Taiwan’s exports of the fish were worth nearly $40 million — and more than 70 percent went to China.

“Our biggest customer,” he said, “is still China.”

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A Chinese Entrepreneur Who Says What Others Only Think

China’s entrepreneur class is grappling with the worst economic slump in decades as the government’s zero Covid policy has shut down cities and kept would-be customers at home. Yet they can’t seem to agree on how loudly they should complain — or even whether they should at all.

A tech entrepreneur wrote in a big group chat in May that many members were too critical. “What people here do every day is criticizing the government and the system,” she wrote. “I can’t see any entrepreneurship in this.”

A top venture capitalist told his nearly nine million social media followers that as much as everyone had suffered from the pandemic, they should try to stay away from negative news and information.

zero Covid policy, which has put hundreds of millions of people under some kind of lockdowns in the past few months, costing jobs and revenues. He’s saying what many others are whispering in private but fear to say in public.

“The questions we should ask ourselves are,” he wrote in an article that was censored within an hour of posting but shared widely in other formats, “what caused such widespread negative sentiment across the society? Who should be responsible for this? And how can we change it?”

He said the lockdowns in Shanghai and other cities made it clear that wealth and social status meant little to a government determined to pursue its zero Covid policy. “We’re all nobodies who could be sent to the quarantine camps, and our homes could be broken into,” he wrote. “If we still choose to adapt to and put up with this, all of us will face the same destiny: trapped.”

staying out of politics is no longer an option for China’s business leaders. But some of his peers are reluctant, given the potential penalties.

steered away from the market economy and cracked down on some industries. It demonized entrepreneurs and went after some of the most prominent of them. Then when the mild, albeit contagious, Omicron variant of the coronavirus emerged in China this year, the government meddled with free enterprise as it hadn’t in decades.

The lockdowns and restrictions have done so much damage to the economy that Premier Li Keqiang summoned about 100,000 cadres to an emergency meeting in late May. He called the situation “severe” and “urgent,” citing sharp drops in employment, industrial production, electricity consumption and freight traffic.

Many business leaders believe that it will be hard to reverse the damage if the government doesn’t stop the zero Covid policy. Yet they feel that there’s nothing they can do to make Beijing change course.

The chairman of a big internet company told me that with all the pandemic restrictions, he and others were operating as if dancing with shackles on while expecting the sword of a lockdown to strike at any moment. With a big public company to run, he said, it would be too risky to be vocal. He hoped the economists could be more outspoken.

The chairman of a publicly listed conglomerate with many consumer-facing businesses said he had to shut down a few of his companies and let people go as revenues dropped off a cliff. He’s not a Christian, he said, but he has been praying to God every day to help him get through this tough period.

articles that compared the pros and cons of different pandemic policies. Then, in mid-May, his social media Weibo account was suspended.

Jack Ma, the founder of the e-commerce behemoth Alibaba, largely disappeared from public view after he criticized banking regulators in late 2019. The regulators quashed the initial public offering of Ant Group, the tech and financial company controlled by Mr. Ma, and fined Alibaba a record $2.8 billion last year.

Ren Zhiqiang, a retired real estate developer, was sentenced to 18 years in prison on charges of committing graft, taking bribes, misusing public funds and abusing his power. His real crime, his supporters say, was criticizing Mr. Xi’s handling of the coronavirus outbreak in early 2020.

Mr. Zhou, 49, is known as a maverick in Chinese business circles. He founded his first business in stereo systems with his brother in the mid-1990s when he was still in college. In 2010, he started Yongche, one of the first ride-hailing companies.

Unlike most Chinese bosses, he didn’t demand that his employees work overtime, and he didn’t like liquor-filled business meals. He turned down hundreds of millions of dollars in funding and refused to participate in subsidy wars because doing so didn’t make economic sense. He ended up losing out to his more aggressive competitor Didi.

He later wrote a best seller about his failure and became a partner at a venture capital firm in Beijing. In April, he was named chairman of the ride-sharing company Caocao, a subsidiary of auto manufacturing giant Geely Auto Group.

A Chinese citizen with his family in Canada, Mr. Zhou said in an interview that in the past many wealthy Chinese people like him would move their families and some of their assets abroad but work in China because there were more opportunities.

Now, some of the top talent are trying to move their businesses out of the country, too. It doesn’t bode well for China’s future, he said.

“Entrepreneurs have good survivor’s instinct,” he said. “Now they’re forced to look beyond China.” He coined a term — “passive globalization” — based on his discussions with other entrepreneurs. “Many of us are starting to take such actions,” he said.

The prospect depressed him. China used to be the best market in the world: big, vibrant, full of ambitious entrepreneurs and hungry workers, he said, but the senseless and destructive zero Covid policy and the business crackdowns have forced many of them to think twice.

“Even if your company is a so-called giant, we’re all nobodies in front of the bigger force,” he said. “A whiff of wind could crush us.”

All the business leaders I spoke to said they were reluctant to make long-term investment in China and fearful that they and their companies could become the next victim of the government’s iron fist. They’re focusing on their international operations if they have them or seeking opportunities abroad.

Mr. Zhou left for Vancouver, British Columbia, in a hurry in late April when Beijing was locking down many neighborhoods. Then he wrote the article, urging his peers to try to speak up and change their powerless status.

He said he understood the fear and the pressure they faced. “Honestly speaking, I’m scared, too.” But he would probably regret it more if he did nothing. “Our country can’t go on like this,” he said. “We can’t allow it to deteriorate like this.”

In recent years, a few of Mr. Zhou’s articles and social media accounts have been deleted. His outspokenness has caused uneasiness among his friends, he said. Some have told him to shut up because it didn’t change anything and was creating unnecessary risks for himself, his family, his companies and the stakeholders in his businesses.

But Mr. Zhou can’t help himself. He’s worried that China could become more like it was under Mao: impoverished and repressive. His generation of entrepreneurs owes much of their success to China’s reform and opening up policies, he said. They have the responsibilities to initiate change instead of waiting for a free ride.

Maybe they can start by speaking up, even if just a little bit.

“Any change starts with disagreement and disobedience,” he said.

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The World Tries to Move Beyond Covid. China May Stand in the Way.

As the rest of the world learns to live with Covid-19, China’s top leader, Xi Jinping, wants his country to keep striving to live without it — no matter the cost.

China won a battle against its first outbreak in Wuhan, Mr. Xi said last week, and “we will certainly be able to win the battle to defend Shanghai,” he added, referring to the epicenter of the current outbreak in China.

summarized it as “zero movement, zero G.D.P.” Multinational companies have grown wary of further investments in the country.

For more than two years, China kept its Covid numbers enviably low by doggedly reacting to signs of an outbreak with testing and snap lockdowns. The success allowed the Communist Party to boast that it had prioritized life over death in the pandemic, unlike Western democracies where deaths from the virus soared.

More transmissible variants like Omicron threaten to dent that success, posing a dilemma for Mr. Xi and the Chinese Communist Party. Harsher lockdowns have been imposed to keep infections from spreading, stifling economic activity and threatening millions of jobs. Chinese citizens have grown restless, pushing back against being forced to stay home or to move into grim, government-run isolation facilities.

politically important year for Mr. Xi, China’s censors have moved quickly to muffle calls for a change in course on Covid-19. The head of the World Health Organization, whose recommendations China once held up as a model, was silenced this week when he called on the country to rethink its strategy.

Photographs and references to Tedros Adhanom Ghebreyesus, the director general of the W.H.O., were promptly scrubbed from the Chinese internet after the statement. The foreign ministry responded by calling Mr. Tedros’s remarks “irresponsible,” and accusing the W.H.O. of not having a “proper understanding of the facts.”

China’s state-controlled media has also glossed over the draconian measures officials have deployed to deal with outbreaks. This week, as some authorities in Shanghai erected new fences around quarantine zones, boarded up more homes and asked residents not to leave their apartments, state media painted a picture of a city slowly returning to normal.

One article described the “hustle and bustle of city life” returning, while another focused on statistics for how many stores had reopened.

has not happened. Several Chinese companies are in the testing phase of a homegrown mRNA option, and China also recently approved for emergency use a Covid-19 antiviral pill made by Pfizer called Paxlovid.

Administering three vaccine shots, using antiviral therapies and offering more effective vaccines could help China find a path out of zero Covid, Mr. Ajelli said.

disappointing winter wheat harvest in June could drive food prices — already high because of the war in Ukraine and bad weather in Asia and the United States — further up, compounding hunger in the world’s poorest countries.

By one estimate, nearly 400 million people in 45 cities have been under some form of lockdown in China in the past month, accounting for $7.2 trillion in annual gross domestic product. Economists are concerned that the lockdowns will have a major impact on growth; one economist has warned that if lockdown measures remain in place for another month, China could enter into a recession.

European and American multinational companies have said they are discussing ways to shift some of their operations out of China. Big companies that increasingly depend on China’s consumer market for growth are also sounding the alarm. Apple said it could see a $4 billion to $8 billion hit to its sales because of the lockdowns.

struggle to find and keep jobs during lockdowns.

Even as daily virus cases in Shanghai are steadily dropping, authorities have tightened measures in recent days following Mr. Xi’s call last week to double down. Officials also began to force entire residential buildings into government isolation if just one resident tested positive.

The new measures are harsher than those early on in the pandemic and have been met with pockets of unrest, previously rare in China where citizens have mostly supported the country’s pandemic policies.

In one video widely circulated online before it was taken down by censors, an exasperated woman shouts as officials in white hazmat suits smash her door down to take her away to an isolation facility. She protests and asks them to give her evidence that she has tested positive. Eventually she takes her phone to call the police.

“If you called the police,” one of the men replies, “I’d still be the one coming.”

Isabelle Qian contributed reporting, and Claire Fu contributed research.

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COVID expected to hit China economic activity in March data, article with image

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Workers watch as a crane lifts a structure at a construction site in Shanghai, China January 14, 2022. REUTERS/Aly Song

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  • China Q1 GDP growth seen at 4.4%, vs Q4’s 4.0%
  • March data likely deteriorated sharply on COVID lockdowns, April expected to be worse
  • Q1 GDP, March activity data due Monday at 0200 GMT
  • C.bank expected to ease policy to cushion slowdown

BEIJING, April 17 (Reuters) – China is expected to report a sharp deterioration in economic activity in March as COVID-19 outbreaks and lockdowns hit consumers and factories, although first-quarter growth may have perked up due to a strong start early in the year.

Data on Monday is expected to show gross domestic product (GDP) grew 4.4 in January-March from a year earlier, a Reuters poll showed, outpacing the fourth-quarter’s 4.0% pace due to a surprisingly solid start in the first two months.

But on a quarterly basis, GDP growth is forecast to fall to 0.6% in the first quarter from 1.6% in October-December, the poll showed, pointing to cooling momentum.

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Separate data on March activity, especially retail sales, is likely to show an even sharper slowdown, analysts say, hit hard by China’s strict efforts to contain its biggest COVID outbreak since the coronavirus was first discovered in the city of Wuhan in late 2019.

Analysts say April readings will likely be worse, with lockdowns in commercial centre Shanghai and elsewhere dragging on. Some economists say the risks of a recession are rising.

The government is due to release the Q1 and March figures on Monday at 0200 GMT, with investor speculation mounting over whether there will be more moves to stimulate the economy.

Late on Friday, China’s central bank said it would cut the amount of cash that banks must hold as reserves for the first time this year, releasing about 530 billion yuan ($83.25 billion) in long-term liquidity. read more

The move was largely expected after the State Council, or cabinet, said on Wednesday that monetary policy tools – including cuts in banks’ reserve requirement ratios (RRRs) – should be used in a timely way.

Policymakers need to ensure nothing goes wrong before a twice-a-decade meeting of the ruling Communist Party in autumn, when President Xi Jinping is almost certain to secure a precedent-breaking third term as leader, policy insiders said.

But Beijing’s strict zero tolerance policy on COVID-19 is taking an increasing toll on the world’s second-largest economy, and is starting to disrupt supply chains globally ranging from cars to iPhones. read more

“In the run-up to the Party Congress, we think the central bank will prioritise growth, especially as the COVID battle drags on and housing markets fail to rebound,” analysts at Barclays said in a note.

Retail sales, a gauge of consumption which has been lagging since COVID-19 first hit, likely shrank 1.6% in March from a year earlier. That would be the worst showing since June 2020, reversing a 6.7% rise in the first two months, the poll showed.

Industrial output likely grew 4.5% in March from a year earlier, slowing from 7.5% in the first two months, while fixed-asset investment may have expanded 8.5% in the January-March, slowing from 12.2% in the first two months.

The Reuters poll forecast China’s growth to slow to 5.0% in 2022, suggesting the government faces an uphill battle in hitting this year’s target of around 5.5%. read more

Barclays estimates that the second-quarter GDP growth could dip to 3%, dragging 2022 growth to 4.2%, if Shanghai’s extended lockdown were to last for one month and partial lockdowns in the rest of the country remained in place for two months.

Reflecting weakening domestic demand and COVID-related logistical snarls, China’s imports contracted in March, while exports — the last major growth driver — are showing signs of fatigue. read more

The government has unveiled more fiscal stimulus this year, including stepping up local bond issuance to fund infrastructure projects, and cutting taxes for businesses.

But analysts are not sure if rate cuts would do much to arrest the economic slump in the near term, as factories and businesses struggle and consumers remain cautious about spending. More aggressive easing could also trigger capital outflows, putting more pressure on Chinese financial markets.

“I don’t think this RRR cut (on Friday) matters that much for the economy at this stage,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, noting it was less than markets had expected.

“The main challenge the economy faces is the Omicron outbreaks and the lockdown policies that restrict mobility. More liquidity may help on the margin, but it doesn’t address the root of the problem. Manufacturers face the daunting risk of supply chain disruptions.

“Unless we see effective policies to address the mobility problem, the economy will slow. I expect GDP growth in Q2 to turn negative.”

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Reporting by Kevin Yao; Editing by Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

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China’s ‘Zero Covid’ Mess Proves Autocracy Hurts Everyone

After the city locked down its 25 million residents and grounded most delivery services in early April, many people encountered problems sourcing food, regardless of their socioeconomic status. Some set alarms for the different restocking times of grocery delivery apps that start as early as 6 a.m.

In the past few days, a hot topic in WeChat groups has been whether sprouted potatoes were safe to eat, a few Shanghai residents told me. Neighbors resorted to a barter system to exchange, say, a cabbage for a bottle of soy sauce. Coca-Cola is hard currency.

After nearly two weeks under lockdown, Dai Xin, a restaurant owner, is running out of food to provide for her household of four. Now she slices ginger paper thin, pickles vegetables so they won’t spoil and eats two meals a day instead of three.

Even the moneyed class is facing food supply shortages. The head of a big retailer told me last week that she got many requests from Shanghai-based chief executives. But there was little she could do under lockdown rules, the executive said, who spoke on the condition of anonymity given the political sensitivities.

Wang Lixiong, the author of the apocalyptic novel “China Tidal Wave,” which ended with a great famine in the aftermath of a nuclear winter, believes that a man-made crisis like the one in Shanghai is inevitable under China’s authoritarian system. In recent years, he said in an interview, the risk increased after Beijing clamped down on nearly every aspect of civil society.

After moving into a friend’s vacant apartment in Shanghai last winter, he stocked up on rice, noodles, canned food and whiskey to sustain him for a few months in case of a crisis.

But many residents in the luxury apartment complex, with units valued at more than $3 million, weren’t as prepared when the lockdown started. He saw his neighbors, who dashed around in designer suits a month ago, venture into the complex’s lush garden to dig up bamboo shoots for a meal.

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Analysis: China’s balancing act over Ukraine offers Washington a subtle ‘win’, article with image

WASHINGTON/UNITED NATIONS, April 7 (Reuters) – China’s abstentions on U.N. votes to condemn Russia’s invasion of Ukraine are a “win”, said the U.S. envoy to the United Nations, underscoring how Beijing’s balancing act between its partner Russia and the West may be the best outcome for Washington.

Beijing has refused to call Russia’s actions in Ukraine an invasion and has repeatedly criticized what it says are illegal Western sanctions to punish Moscow.

But U.S.-led pressure on China, including the specter of secondary sanctions should it provide material support for Russia’s war, appears to be helping keep Beijing on the fence over the conflict.

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China abstained from two non-binding U.N. General Assembly votes last month that criticized Russia for the ongoing war and its humanitarian costs.

“That is a win when China abstains. We’d love them to vote yes, but an abstention is better than them voting no,” U.N. ambassador Linda Thomas-Greenfield told Reuters.

“I’m not sure they expected that Russia would go this far. They continue to support Russia publicly, but I do get a sense of discomfort,” she said.

China’s U.N. Ambassador Zhang Jun, responding to Thomas-Greenfield’s remarks, said: “The whole world is not comfortable. Do you think that anyone should be comfortable with this crisis?”

China and Russia declared a “no-limits” strategic partnership several weeks before the Feb. 24 invasion and have been forging closer energy and security ties in recent years to push back on the United States and the West.

In a tilt toward Moscow, China’s leader Xi Jinping has discussed the conflict in Ukraine during calls with leaders of many major countries, but has yet to offer such diplomatic validation to Ukrainian President Volodymyr Zelenskiy.

While Beijing has given some humanitarian aid to Ukraine – about $2.37 million worth of items such as blankets and baby formula – those contributions are outmatched by much smaller donors.

Analysts say they have yet to see any major indication that China is violating strict Western sanctions on Russia, but there are strong signs that China is hedging its bets, particularly on the economic front.

China’s state oil refiners are avoiding new oil contracts with Russia despite steep discounts, sources told Reuters. read more

State-run Sinopec, Asia’s biggest oil refiner, also suspended talks for a major petrochemical investment and a gas marketing venture in Russia. read more

Sanctions on Russia should give China a “good understanding” of the consequences it could face if it provides material support to Moscow, U.S. Deputy Secretary of State Wendy Sherman warned on Wednesday. read more

China appears unlikely to back away from its tacit diplomatic support for Russia – even in light of graphic images showing widespread civilian killings in the Ukrainian town of Bucha, north of the capital Kyiv. Moscow rejects Western charges of war crimes.

Zhang said China did not want to be dragged into the crisis.

“The focus is really for the parties concerned to find a solution as quick as possible, instead of trying to look at some indirect party, and to drag those indirect parties into this crisis,” Zhang told Reuters.

‘PLAY BOTH SIDES’

China, which itself has been accused by Washington of committing genocide towards its Uyghur population, voted no on Thursday on a resolution that suspended Russia from the U.N. Human Rights Council. read more

Before the vote, Zhang called it a “hasty move” that forced countries to choose sides.

U.S. officials appear to be expecting that China’s support for Russia won’t violate major red lines set by the United States and the European Union, which together represent a quarter of China’s global trade, compared to just 2.4% for Russia, according to the EU. read more

“We are likely to continue to see some amount of Chinese support for the Russian economy, but a dance that Beijing tries to do to keep up its economic ties to the European Union in particular, but also to the United States,” Mira Rapp-Hooper, director for the Indo-Pacific at the White House National Security Council, said in March. read more

U.S. President Joe Biden has leaned heavily on allies to help make the case – as he did in a call with Xi last month – that there would be consequences for supporting Russia.

Following a virtual summit between EU and Chinese leaders last week, China’s foreign ministry said it was not deliberately circumventing sanctions. read more

It has also denied being asked for, or supplying, any military support for Russia.

Scott Kennedy, a China expert at the Center for Strategic and International Studies, told a recent online forum there was little indication that Chinese banks were supporting sanctioned Russian financial institutions, and that some Chinese firms were selling less to Russia, from cell phones to car parts.

Experts say the United States’ ability to monitor and track small-scale Chinese sanctions violations is limited, as shipments could be driven over land borders where U.S. monitoring does not occur. They say preventing Chinese firms from large sanctioned trade with Russia should be the goal.

“The realists are going to win this one and understand that the Chinese are going to play both sides toward the middle and they’ll take what few victories they can get,” said Donald Pearce, a former export control attaché at the U.S. embassy in Moscow who works with Torres Trade Advisory.

“If you’ve got at least a tacit admission that China respects the idea that the U.S. could start imposing secondary sanctions, that may be enough,” Pearce said.

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Reporting by Michael Martina in Washington and Michelle Nichols at the United Nations; Editing by Mary Milliken and Michael Perry

Our Standards: The Thomson Reuters Trust Principles.

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Biden and Xi set to clash over Putin’s war in Ukraine, article with image

  • Biden tells Xi China would face costs from U.S. and wider world
  • Xi says sanctions could trigger serious crisis in global economy
  • Xi and Biden both stress need for diplomatic solution

WASHINGTON/BEIJING, March 18 (Reuters) – U.S. President Joe Biden warned Chinese leader Xi Jinping on Friday of ‘consequences’ if Beijing gave material support to Russia’s invasion of Ukraine, the White House said, while both sides stressed the need for a diplomatic solution to the crisis.

While the White House did not detail what those consequences could be, or how the U.S. would define “material support”, press secretary Jen Psaki indicated China’s massive trade flows could be impacted.

“Sanctions are certainly one tool in the tool box,” Psaki told a regular news briefing when asked whether China, the world’s largest exporter, could face trade tariffs or sanctions.

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Speaking after a nearly two-hour video call between Biden and Xi, Psaki said the United States would communicate any consequences directly to Beijing “with our European partners and counterparts.”

In the call, which came at a time of deepening acrimony between the world’s two biggest powers, Biden detailed efforts of the United States and its allies to respond to the invasion of Ukraine, including by imposing costs on Russia.

“He described the implications and consequences if China provides material support to Russia as it conducts brutal attacks against Ukrainian cities and civilians,” the White House said in statement, adding that Biden “underscored his support for a diplomatic resolution to the crisis.”

A senior U.S. official briefing reporters on the call said Biden communicated that Beijing would face consequences not just from the United States but the wider world.

“The president really wasn’t making specific requests of China,” the official said. “I think our view is that China will make its own decisions.”

China’s foreign ministry said Xi told Biden the war in Ukraine must end as soon as possible and called on NATO nations to hold a dialogue with Moscow. He did not, however, assign blame to Russia for the invasion, based on Beijing’s statements about the call.

“The top priorities now are to continue dialogue and negotiations, avoid civilian casualties, prevent a humanitarian crisis, cease fighting and end the war as soon as possible,” Xi said.

Xi advocated Russia-Ukraine dialogue and negotiations, and suggested Washington and NATO conduct talks with Russia to solve the “crux” of the Ukraine crisis and resolve the security concerns of both Russia and Ukraine.

“The Ukraine crisis is something that we don’t want to see,” Chinese state media quoted Xi saying in the call, which it said was requested by the U.S. side.

Xi warned against sanctions.

A TV screen shows news of a video meeting between U.S. President Joe Biden and Chinese President Xi Jinping, in Hong Kong, China November 16, 2021. REUTERS/Tyrone Siu

“Sweeping and indiscriminate sanctions would only make the people suffer. If further escalated, they could trigger serious crises in global economy and trade, finance, energy, food, and industrial and supply chains, crippling the already languishing world economy and causing irrevocable losses,” the ministry quoted him as saying.

On Thursday, U.S. Secretary of State Antony Blinken said Washington was concerned China was considering directly assisting Russia with military equipment for use in Ukraine, something Beijing has denied.

Washington is also worried that China could help Russia circumvent Western economic sanctions.

Targeting Beijing with the sort of extensive economic sanctions already imposed on Russia would have potentially dire consequences for the United States and the world, given that China is the world’s second-largest economy and the largest exporter.

Russia’s invasion of Ukraine, now in its fourth week, has killed hundreds of civilians, reduced city areas to rubble and sparked a humanitarian crisis as millions flee the country. read more

China has refused to condemn Russia’s action in Ukraine or call it an invasion.

Russia fired missiles at an airport near Lviv on Friday, a city where hundreds of thousands had sought refuge far from Ukraine’s battlefields, as Moscow tries to regain the initiative in its stalled campaign against Ukraine, which it calls a special military operation. read more

U.S.-CHINA TENSIONS

Ukraine has added a new front in a U.S.-Chinese relationship already at its worst level in decades, further deflating Biden’s initial hopes of easing a wide range of disputes by using a personal connection with Xi that predates his term in office.

Biden has been anxious to avoid a new “Cold War” with China, seeking instead to define the relationship as one of competitive coexistence, but China’s “no-limits” strategic partnership with Russia announced last month and its stance on Ukraine has called that into question.

Ahead of the call, a Chinese aircraft carrier sailed through the sensitive Taiwan Strait on Friday. The USS Ralph Johnson, an Arleigh Burke guided missile destroyer, shadowed the carrier at least partly on its route. read more

China claims Taiwan as its own, and has stepped up its military activity near the islands, alarming Taipei and Washington amid concerns that Beijing might follow Russia’s example and use force.

While saying it recognizes Ukraine’s sovereignty, Beijing has repeatedly said that Russia has legitimate security concerns that should be addressed and urged a diplomatic solution to the conflict.

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Reporting by Trevor Hunnicutt, David Brunnstrom, Michael Martina, Steve Holland, Doina Chiacu and Susan Heavey in Washington and Martin Quin Pollard, Ryan Woo and Beijing Newsroom; Writing by David Brunnstrom; Editing by Heather Timmons, Alistair Bell and Raissa Kasolowsky

Our Standards: The Thomson Reuters Trust Principles.

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