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One of Hong Kong’s most distinctive restaurants – the Jumbo Floating Restaurant – has capsized in the South China Sea, days after it was towed away from its home of 46 years in the territory’s Aberdeen harbour.

Its owners said in a statement on Monday that the restaurant had encountered adverse weather conditions when passing the Paracel Islands – also known as the Xisha Islands – on its way to an undisclosed location.

“The water depth at the scene is over 1,000 metres, making it extremely difficult to carry out salvage works,” the statement from Aberdeen Restaurant Enterprises said, adding that no crew member was injured and that it was seeking more information from the towing agency. It said it was “very saddened by this accident”.

Opened in 1976 by the late Stanley Ho Hung-sun, a casino magnate in Macau, Jumbo restaurant has become a popular tourist attraction in the former British colony over the last four decades.

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The fashion industry has been told it must wean itself off cotton from China’s Xinjiang region, as a new law comes into force giving US border authorities greater powers to block or seize goods linked to forced labour in China.

The Uyghur Forced Labor Prevention Act (UFLPA), which comes into force today, assumes that any product partly or wholly made in Xinjiang, north-west China, is linked to the region’s labour camps. Since 2017, the Chinese authorities have detained as many as one million Uyghurs and subjected them to forced labour.

The fashion industry will be particularly affected by the new law. About 20% of the world’s cotton comes from China, and 84% of that comes from Xinjiang.
 
Japan Self-Defense Forces are continuing to monitor a flurry of Russian and Chinese naval activity in the general vicinity of the country. In the past four days alone, Japanese forces have tracked at least four Chinese and 16 Russian naval vessels sailing around the country's home islands and other outlying areas it controls. This is similar to a joint patrol by a flotilla of warships from China and Russia around the country's territory last year.

Just today, the Japanese Ministry of Defense issued a new press release regarding the movements of the trio of Chinese ships – a Type 055 destroyer, China's most modern and capable surface combatant, as well as a Type 052D destroyer and a Type 901 replenishment ship – southward in the Pacific to the west of the island of Honshu. The Japan Self-Defense Forces (JSDF) first tracked those ships passing from the East China Sea into the Sea of Japan via the Tsushima Strait on June 12-13, at which point they were also being accompanied by a Type 815 electronic intelligence-gathering vessel.
 
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Taiwan scrambled jets to warn away 29 Chinese aircraft in its air defence zone, including bombers that flew to the south of the island and into the Pacific, in the latest uptick in tensions and largest incursion since late May.

Taiwan, which China claims as its own territory, has complained for the past two years or so of repeated missions by the Chinese air force near the democratically governed island, often in the south-western part of its air defence identification zone, or ADIZ, close to the Taiwan-controlled Pratas islands.

Taiwan calls China’s repeated nearby military activities “grey zone” warfare, designed to both wear out Taiwanese forces by making them repeatedly scramble, and also to test Taiwanese responses.
 
An anonymous reader quotes a report from the Indian Express: The US should do more to attract overseas chipmakers to build plants on its territory as a matter of national security, former Google chief Eric Schmidt wrote in an opinion piece published Monday. Pointing to China's accelerating investment in chip fabrication technology and capacity, Schmidt urged the US to reduce its dependence on Taiwan and South Korea for the most advanced semiconductors powering everything from smartphones to ballistic missiles and build out its own capabilities. Instead, it should be incentivizing national champions Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. to partner with US chip designers and build more on US soil, he said.

International relations scholar Graham Allison, who shares the byline on the Wall Street Journal article with Schmidt, previously warned that the US and China could be on a path to war that neither country wants. The two men set out policy recommendations for improving American competitiveness in the chipmaking race so as to avoid a drastic imbalance between the two superpowers. "If Beijing develops durable advantages across the semiconductor supply chain, it would generate breakthroughs in foundational technologies that the U.S. cannot match," they wrote. "The U.S. can't spend its way out of this predicament."

In addition to President Joe Biden's proposed $52 billion investment plan -- which is still under consideration by US legislators -- the US should lean into its strengths of research and development, manufacturing less-advanced but more widely used slower chips through the likes of Intel Corp. and GlobalFoundries Inc., and redouble its efforts to bring TSMC and Samsung on shore. Both Asian companies are constructing fabs in the US, but Schmidt and Allison's message is that more needs to be done to ensure long-term US prosperity. "America is on the verge of losing the chip competition," they said, urging that "the U.S. government mobilizes a national effort similar to the one that created the technologies that won World War II."
 
Record floods were expected in parts of southern China Thursday as heavy rains pushed water levels in the Pearl River delta to their highest in almost a century.

Hundreds of thousands of people have been evacuated from the worst-hit parts of the region, which includes Guangdong province, a manufacturing and logistics hub that is home to China's tech capital Shenzhen.

China's ministry of water resources on Wednesday placed its highest flood alert on the Pearl River basin, saying water levels at one location "surpassed historical records" and that the provincial capital Guangzhou would be impacted.

Images from the city of Shaoguan, north of Guangzhou, showed residents on Wednesday making their way through flooded main roads, as water in some areas reached the tops of cars.
The muddy floodwater inundated shops and buildings, and people were seen clearing away the debris.

The low-lying Pearl River delta is home to the economic powerhouses of Guangzhou and Shenzhen, as well as several smaller but densely populated cities with major manufacturing and other industries.

Provincial emergency management authorities said earlier this week that direct economic losses were estimated at 1.7 billion yuan ($253 million).

Under the highest alert level, at-risk areas in Guangdong have been ordered to take all necessary measures including suspending work at factories and closing schools to minimise damage.

Other regions in southern China, including coastal Fujian province and Guangxi, have also been affected by record rains this month, forcing hundreds of thousands to evacuate.

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China’s proposal for a Common Development Vision with Pacific island countries (PICs) is by far its boldest pitch in the vast Blue Continent. The breadth of cooperation areas outlined ranged from education, people-to-people ties, and health to climate change, economics, and security. The move elevated the importance of PICs as a collective, which the region can leverage as it becomes a theater for geopolitical contest among great powers. Beijing’s forays may induce opportunistic but wary Oceanian nations to calibrate their foreign policy and seek greater agency through cohesion. But they can also amplify already existing fissures within the Pacific family.

Several factors drive Beijing’s Pacific gambit. These include access to the region’s rich marine resources, flipping Taiwan’s remaining diplomatic allies, breaking out from what it sees as U.S. and allied attempts to bottle it up in its near seas, and seeking potential overseas bases. Although minuscule by land area, the region is abundant in fisheries and untold seabed minerals and straddles vital sea lanes. The myriad of volcanic and coral islands strewn across the vast blue expanse are stepping stones to Latin America, wherein Chinese trade, investments and influence has grown by leaps and bounds. Some islands also host foreign military bases, and the underwater topography serves submarine cables and acts as passageways for subsurface ships. Signing access agreements with PICs will create spaces for Beijing to operate its bluewater navy and secure its burgeoning maritime traffic.
 
Taiwan's state-owned energy company is looking to raise prices for industrial users, a move likely to impact chipmakers such as TSMC, which may well have a knock-on effect on the semiconductor supply chain.


According to Bloomberg, the Taiwan Power Company, which produces electricity for the island nation, has proposed increasing electricity costs by 15 percent for industrial users, the first increase in four years.

The power company has itself been hit by the rising costs of fuel, including the imported coal and natural gas it uses to generate electricity. At the same time, the country is experiencing record demand for power because of increasing industrial requirements and because of high temperatures driving the use of air conditioning, as reported by the local Taipei Times.

Taiwan's peak electricity consumption topped 39GW towards the end of last week, which apparently set a new record. Taiwan Power is now predicting that the peak usage figure could easily surpass 40GW this summer.

While other countries are also facing rising energy costs, Taiwan holds a key position as one of the dominant players in the global chip market. Taiwanese companies account for 48 per cent of the semiconductor foundry industry and as much as 61 per cent of the world's capacity to manufacture chips using 16nm production nodes or better.

According to a report from McKinsey [PDF], electricity can account for up to 30 percent of the operating costs for a chip fabrication plant, with a typical semiconductor fab using as much power in a year as about 50,000 homes. A significant rise in energy prices is therefore likely to result in higher chip prices as the costs are passed on to customers.

Taiwan-based TSMC and other semiconductor foundry companies had already been planning to increase the prices they charge for manufacturing chips, as we reported previously.
 
Liz Truss, the UK’s foreign secretary, has told the Nato summit that invading Taiwan would be “a catastrophic miscalculation” by China, arguing that the UK and other countries should reconsider their trading relationships with countries that used their economic power in “coercive” ways.

“I do think that with China extending its influence through economic coercion and building a capable military, there is a real risk that they draw the wrong idea that results in a catastrophic miscalculation such as invading Taiwan,” Truss told a panel meeting alongside Anthony Albanese, the Australian prime minister, and Alexander De Croo, the Belgian prime minister.

With China expanding its strategic ambitions, Truss, said, Nato needed to expand its strategic concept, its core mission last updated in 2010 and due to be revamped at this summit in Madrid, to specifically reference China. Spain’s Prime Minister Pedro Sánchez has already indicated that the new strategic concept will specifically name Russia as a threat, following its latest invasion of Ukraine.

The G7 countries and nations like Australia should use their “economic weight” to challenge China, Truss said – adding that countries like the UK could even rethink their approach to trade with Beijing.

“I think historically we haven’t used that economic power,” she said. “We’ve been equidistant, if you like, about who we trade with, who we work with. And I think countries are becoming much more focused now on, is this trade with trust, do we trust this partner? Are they going to use it to undermine us, or are they going to use it for the mutual benefit of both of our economies? So trade has got a lot more geopolitical.”
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China’s ambassador to Tonga has denied engaging in “debt trap” diplomacy in the Pacific, saying in his first press conference in two years that if the heavily indebted country cannot repay its loans, “we can talk and negotiate in a friendly, diplomatic manner”.

Cao Xiaolin told Tuesday’s gathering in Nuku’alofa – a rare opportunity for journalists to question Chinese officials – that preferential loans from China came with “no political strings attached” and that Beijing would never force countries to repay the loans.
Xiaolin said on Tuesday: “For a long time, some media have misinterpreted the preferential loans from China to Tonga. They fabricated the so-called Chinese ‘debt trap’ in malicious intentions to defame and smear China and disrupt China’s cooperation with Tonga.”

He said Tonga’s government requested the loans from Exim bank and that it had started paying them back already, “which indicates a healthy status of Tonga’s fiscal and economic system, and has sent a positive signal to the international community”. When asked how much Tonga owes China, Xiaolin said he could not provide the figures.

Asked about the Sri Lankan port that China took over when Colombo couldn’t repay its loan, he said: “I don’t think we can compare these two preferential loans because every country has its own unique conditions. Tonga’s national condition and status cannot be compared to Sri Lanka.”

The ambassador again sought to allay concerns about China’s efforts to security a sweeping security agreement for the region, saying that China came to the Pacific region to build roads, bridges and improve the people’s standards of living, “not to station troops or build military bases”.
 
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Boris Johnson and his ministers are going into the Nato summit with fresh warnings that the Russian invasion of Ukraine has shown the need for extra vigilance and caution over potential Chinese action against Taiwan.

Liz Truss, the foreign secretary, who is joining the prime minister at the Nato gathering in Madrid, was most explicit, calling for faster action to help Taiwan with defensive weapons, a key requirement for Ukraine since the invasion.

“There’s always a tendency – and we’ve seen this prior to the Ukraine war – there’s always a tendency of wishful thinking, to hope that more bad things won’t happen and to wait until it’s too late,” Truss told the Commons foreign affairs committee. Her words went well beyond the standard government language on the issue.

“We should have done things earlier, we should have been supplying the defensive weapons into Ukraine earlier. We need to learn that lesson for Taiwan. Every piece of equipment we have sent takes months of training, so the sooner we do it, the better.”

Johnson has been more wary about referring to China directly, but in comments on Monday likening the need to support Ukraine with the second world war, he said the impact of allowing a Russian victory would “also be felt in east Asia”.

On his plane as he travelled from the G7 summit in southern Germany to Madrid, Johnson was asked by reporters about the comment and whether Taiwan needed more support.

“I just think it’s very important that countries around the world should not be able to read across from events in Europe and draw the conclusion that the world will simply stand idly by if boundaries are changed by force,” he said. “That’s one of the most important lessons that we pick up from Ukraine.”
 
The US Department of Defense said it's investigating Chinese disinformation campaigns against rare earth mining and processing companies — including one targeting Lynas Rare Earths, which has a $30 million contract with the Pentagon to build a plant in Texas.

Earlier today, Mandiant published research that analyzed a Beijing-linked influence operation, dubbed Dragonbridge, that used thousands of fake accounts across dozens of social media platforms, including Facebook, TikTok and Twitter, to spread misinformation about rare earth companies seeking to expand production in the US to the detriment of China, which wants to maintain its global dominance in that industry.

"The Department of Defense is aware of the recent disinformation campaign, first reported by Mandiant, against Lynas Rare Earth Ltd., a rare earth element firm seeking to establish production capacity in the United States and partner nations, as well as other rare earth mining companies," according to a statement by Uncle Sam. "The department has engaged the relevant interagency stakeholders and partner nations to assist in reviewing the matter.

Lynas Rare Earths, based in Australia, claims to be the world's second-largest producer of separated rare-earth materials, and the largest outside of China. And in 2021, the US Department of Defense signed an agreement with Lynas to build a Texas plant in response to supply-chain shortages.
 
China is not an adversary but it does represent serious challenges, Jens Stoltenberg, Nato’s secretary general, said on Wednesday, as the alliance agreed for the first time to include threats posed by Beijing into a blueprint guiding its future strategy.

While Russia’s war against Ukraine has dominated discussions at the Nato summit, China earned a place among the western alliance’s most worrying security concerns.

“We now face an era of strategic competition … China is substantially building up its forces, including in nuclear weapons, bullying its neighbours, including Taiwan,” Stoltenberg said. “China is not our adversary but we must be clear-eyed about the serious challenges it represents.”
“The PRC’s [People’s Republic of China] malicious hybrid and cyber operations and its confrontational rhetoric and disinformation target allies and harm alliance security,” the strategic concept reads, noting a deepening partnership with Russia in their shared attempts to “subvert the rules-based international order, including in the space, cyber and maritime domains”.

Nato warned that the Chinese government was “rapidly expanding” its nuclear capability without increasing transparency or engaging in good faith in arms control, and using economic leverage to “create strategic dependencies and enhance its influence”.

US secretary of state Antony Blinken accused Beijing of undermining the rules-based order “that we believe in, that we helped build”. “If China’s challenging it in one way or another, we will stand up to that,” he said.

The Australian prime minister, Anthony Albanese, attending his first Nato summit in Madrid, warned that the strengthening of relations between Beijing and Moscow posed a risk to all democratic nations.

“Just as Russia seeks to recreate a Russian or Soviet empire, the Chinese government is seeking friends, whether it be … through economic support to build up alliances to undermine what has historically been the western alliance in places like the Indo-Pacific,” he told the summit on Wednesday.
“There’s always a tendency – and we’ve seen this prior to the Ukraine war – there’s always a tendency of wishful thinking, to hope that more bad things won’t happen and to wait until it’s too late,” Truss told the UK’s foreign affairs committee.

“We should have done things earlier, we should have been supplying the defensive weapons into Ukraine earlier. We need to learn that lesson for Taiwan. Every piece of equipment we have sent takes months of training, so the sooner we do it, the better.”
 
Taiwan's concentration of tech manufacturing capability worries almost all stakeholders in the technology industry – if China reclaims the island, it would kick a colossal hole in global supply chains. Now the country has given Big Tech another reason to worry: transparency regulations of a kind social networks and surveillance capitalists detest.

The regulations – named the Digital Intermediary Service Act and released as a draft yesterday by Taiwan's National Communications Commission – require platform operators to create a complaints mechanism anyone can use to request content takedowns, remove illegal content at speed, undergo audits to demonstrate they can do so, and respond promptly to orders to remove content.

When platforms decide to take down content, they'll need to list each instance in a public database to promote accountability and transparency of their actions.
 
Xi Jinping has hailed China’s rule over Hong Kong as he led 25th anniversary celebrations of the city’s handover from Britain, insisting that democracy was flourishing despite a political crackdown that has silenced dissent.

After swearing in a new hardline chief executive, John Lee, in a solemn ceremony on Friday morning, the Chinese president laid out his vision for the city and its administrators.

On his first trip outside mainland China since the pandemic began, he vowed that “one country, two systems” – a governance model under which Hong Kong was promised it would retain some autonomy and freedoms for 50 years – would endure.
 
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