* Feature: Texas State Legislature Debated Litany of Measures to Counter China in 2023 Session
* Chinese Space Program Announces Plan to Land Man on Moon by 2030
* Chinese Phone Maker Honor Sets Up Microchip Design Unit
* PLA Plans Multilateral Military Drills with Five Southeast Asian Partners
* Palau Reports that China has Made Multiple Incursions into its Territorial Waters
Texas State Legislature Debated Litany of Measures to Counter China in 2023 Session
By Flora Yan
The majority of U.S. state legislatures have adjourned for their sessions this year (Ballotpedia, undated). Among the over 200 China-related measures introduced in statehouses around the country, Texas lawmakers considered 26 measures, including 22 bills and four resolutions, more than any other state. In their proposals for new legislation, Texas lawmakers were most concerned about security-related issues, followed by economic and human rights issues. It is important to note that many of these measures were not exclusively focused on China, with many mentioning China along with other “countries of concern” or “scrutinized countries.”
Security and Economics
The only bill that has been passed and signed by Governor Greg Abbott this session is the bipartisan SB 1260, which forbids local government and officials from entering into an airport infrastructure or equipment contract with PRC state-owned or funded enterprises or entities that have entered into an agreement with the Chinese government (Texas Legislature Online, undated). The bill is the companion legislation to bipartisan measure HB 1196, introduced three weeks ago, which sought to prohibit a local government or official from entering into an airport infrastructure or equipment contract with any entity that “a federal court determines has misappropriated intellectual property or trade secrets from another entity organized under federal, state, or local law” and “is owned wholly or partly by, is controlled by, or receives subsidies from the government of the People’s Republic of China” (Texas Legislature Online, undated).
Other bipartisan efforts, HB 4102/ SB 1986, sought to prohibit government acquisition or use of unmanned aircraft produced by any company owned by or headquartered in China, Iran, North Korea, Russia or Syria (Texas Legislature Online, undated; Texas Legislature Online, undated).
Similarly, SB 1030 would allow the Public Utility Commission to ban the “acquisition, importation, transfer, or installation of bulk-power system equipment” that was “designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction of China, Iran, Russia, or a country designated by the governor as a threat to critical infrastructure” (Texas Legislature Online, undated).
While hotly debated property acquisition bills, SB 147, which failed in the State Senate and SB 552, which failed to receive a hearing in the House after passing the Senate, have attracted the most public attention, lawmakers also considered SB 552, which sought to forbid business entities and individuals from entering into an agreement related to agricultural land with citizens of China, Iran, North Korea, and Russia (NBC News, May 25; Texas Legislature Online, undated; Texas Legislature Online, undated; Texas Legislature Online, undated).
In terms of data security, legislators introduced HB 2206, a broad measure seeking to ban all social media platforms developed in or controlled by China, Iran, North Korea and Russia from operating in the state (Texas Legislature Online, undated).
HB 2758 sought to prohibit state agencies from entering into a contract with a company owned by the governments of China, Iran, North Korea or Russia. Notably, it also included another clause forbidding such contracts with any “nonprofit organization or government-organized nongovernmental organization headquartered” in these countries (Texas Legislature Online, undated).
Last week, the legislature adopted a bipartisan bill to prohibit health benefit plan coverage of an organ transplant operation should the procedure be performed in China or if the organ was procured by a sale or donation originating in China or another country known to have participated in forced organ harvesting. The bill is pending passage following the signature of Governor Abbott (Texas Legislature Online, undated). Another bill forbidding grants managed by the Cancer Prevention and Research Institute of Texas from being awarded to projects that obtain organs from Chinese hospitals was also introduced (Texas Legislature Online, undated).
Other notable measures that were introduced, but failed to pass during this legislative session, include: HB4736, a broad bill seeking to ban citizens of China, Iran, North Korea and Russia from admission to state higher education institutions; and HCR 89, which expressed support for the Bitcoin economy in Texas by citing the Chinese government’s cryptocurrency ban in 2021, noting “this decision represents an authoritarian form of rule that is in complete opposition to the values of the United States,” and that “many Bitcoin miners left China to continue their work in other countries; known as the ‘great mining migration,’ this event benefited Texas, both as a state and as one of the largest economies in the world.” (Texas Legislature Online, undated; Texas Legislature Online, undated).
Only three out of the 26 China-related measures introduced in the 2023 Texas legislature session have passed. However, the consideration of these measures underscores that growing concern about China pervades the U.S, not only at the Federal level, but also at the state levels of government.
Flora Yan is a Templeton Fellow in the Asia Program at the Foreign Policy Research Institute.
Chinese Space Program Announces Plan to Land Man on Moon by 2030
At a press conference at the Jiuquan Satellite Launch Center on May 29, Lin Xiqiang, Deputy Director of the China Manned Space Agency (CMSA), announced that that his agency’s “main goal is to send Chinese astronauts to land on the Moon for the first time by 2030.” Lin made this announcement shortly before the launch of the Shenzhou-16 mission to China’s Tiangong space station.
Shenzhou-16 was touted as a major step forward for China’s manned space program, as it was the first in a series of six planned missions of a sort of “new generation” of Shenzhou spacecraft. These new Shenzhou spacecraft will benefit from more than 100 upgrades and improvements gleaned from the program’s two decades of experiences. The lessons from Shenzhou will be further applied to China’s “next-generation crewed spacecraft,” which is expected to be used in manned flights around 2025-2026—and the eventual Chinese Moon landing.
While the program has not been declared as an official goal by higher Party organs, it has been suggested as a priority before by Chinese space officials as well as in a 2022 White Paper on “China’s Space Program: A 2021 Perspective.” Likewise, the goal accords with General Secretary Xi Jinping’s statement at the 20th Party Congress that “to explore the vast cosmos, develop the space industry and build China into a space power is our eternal dream.”
The Chinese space program is moving towards a Lunar landing in other areas as well: space suits designed for Lunar use were announced concurrently by Lin at the press conference, as were plans for a crewed lunar rover. Similarly, China is expanding Wenchang Space Launch Site on Hainan Island, building launch pads that would support the deployment of larger, super-heavy rockets like the Long March 9.
In April, China also announced that it was forming a diplomatic pact along the lines of the U.S.’s Artemis Accords to support their planned joint Lunar base with Russia (the International Lunar Research Station). The “International Lunar Research Station Cooperation Organization” (ILRSCO) will be composed of many countries that already partner with China in space affairs (or have signed letters of intent to that effect), to include Argentina, Bangladesh, Brazil, Iran, Mongolia, Pakistan, Peru, Thailand, and the United Arab Emirates. While membership in the ILRSCO and Artemis Accords is not mutually exclusive—Brazil and the UAE are on track to do just that—it appears to be the case that China is preparing for the extension of bloc-based geopolitical competition beyond the exosphere.
Chinese Phone Maker Honor Sets Up Microchip Design Unit
On May 31, Honor registered the creation of “Shanghai Honor Intelligence Technology Development Co.” in Lingang Free Trade Zone (FTZ). In order to escape U.S. sanctions on Huawei, Honor, a former subsidiary of the Shenzhen-based technology giant, was sold off to become a state-owned enterprise in November 2020. The new company will focus on the design and sales of microchips, as well as artificial intelligence software.
In general, there are fewer restrictions on the registration of companies in China’s FTZs. While Honor’s new subsidiary will be 100 percent owned by its parent company, its registration within the Lingang FTZ would make any potential future foreign investment in the company easier.
China’s semiconductor design sector is in flux. In 2022, 3,243 companies existed in the field, of which 433 were new, a growth of 15.4 percent. This represented a decrease in the rate of growth from the previous year, however. With total sales increasing in line with the rise in the number of companies, it has been reported that most companies in the sector are quite limited in terms of their potential revenue.
The relative unprofitability of these companies has caused them to rely heavily on support from local governments and the “National Integrated Circuit Industry Investment Fund,” more commonly known as the “Big Fund.” The fund was set up in 2014 to subsidize China’s developing microchip manufacturing base. While the goal laid out in “Made in China 2025” was missed (58 percent of chips used domestically were to be produced in China by 2020; in fact, this number was a mere 16 percent in 2021), Beijing still hopes that it might achieve 80 percent self-sufficiency in microchip production by 2030.
Despite major failures in the market—Oppo, another major Chinese phone company, disbanded their chip design subsidiary in early May, and the sector as a whole is still reeling from HSMC’s collapse in 2021—China’s chip design sector is considered to be passable, if inefficient. In fact, China is a leader in the field of assembly and testing, composing some 38 percent of the world market.
Where China lags furthest behind is in actually manufacturing cutting-edge chips. This is an extremely complicated process, requiring chemicals and equipment currently manufactured in Japan, the U.S. and the Netherlands. These nations have moved towards restricting Chinese access to those items, in the hopes of restricting China’s ambition in these areas. Within China, one source went so far as to suggest that the country would struggle to produce chips at 28 nm until 2030, a standard that is already five to six generations behind the West.
PLA Plans Multilateral Military Drills with Five Southeast Asian Partners
It is no secret that the PLA has long been envious of the sorts of large-scale, multi-nation exercises that the U.S. military has a long track record of organizing around the world. In Asia, the long-running, U.S.-led Cobra Gold exercises in Thailand involved 7,000 troops from seven countries this year. Last year, the biennial Rim of the Pacific (RIMPAC) exercises, which are hosted and organized by the U.S. Indo-Pacific Command, involved 26 countries and over 25,000 participating personnel. As regards Cobra Gold, the U.S. may soon have some competition from China. According to a post on the PLA Southern Theater Command’s (STC) Weibo page, last week, the STC held an initial planning conference for Exercise “Aman Youyi “ 2023, comprising military leaders from Cambodia, Laos, Malaysia, Thailand and Vietnam. A previous iteration of the exercises, which derive their name from combining “Aman,” the Malay word for “peace” and “Youyi,” the Chinese word for friendship, were held by the PLA, Malaysian and Thai militaries in 2018.
Palau Reports that China has Made Multiple Incursions into its Territorial Waters
On May 24, the Chinese research vessel Haiyang Dizhi Six encroached upon Palau’s Exclusive Economic Zone with neither permission nor advanced notice to the Palau government. The Chinese vessel slowed down about 45 nautical miles away from Kayangel, Paulau’s northernmost island, and passed directly over Palau’s undersea fiber optic cable. Under international law, a state has economic and territorial rights to 200 nautical miles around their land borders, and thus should be informed if a foreign vessel is passing through. However, attempts from Palau to contact the Chinese vessel through VHF radio failed. Palau, a Pacific Island nation that recognizes Taiwan and has a close partnership with the US, has now reported four unwanted advances from Chinese vessels into its territorial waters in the past five years. Palau’s President Surangel Whipps Jr. stated that “Clearly they [China] do not respect the rules-based order.” Grey zone tactics such as these are emblematic of Beijing’s influence operations to isolate allies of Taiwan diplomatically, as well as to advance the PRC’s economic and security interests in the Pacific Islands region and beyond.