‘Freedom of Speech' in the United States: Truth and Facts; TikTok; Influence operation; New quality combat capability for MSS and MPS; 75th anniversary

Summary of today’s Essential Eight:

1. MoFa: ‘Freedom of Speech' in the United States: Truth and Facts - The Ministry of Foreign Affairs has released another in its occasional series of “Truth and Facts” documents attacking the United States. This one is titled “‘Freedom of Speech' in the United States: Truth and Facts”. The introduction to the document begins with “The United States has long purported its freedom of speech and pursued double standards, covering up domestic political manipulation and social injustice with empty political slogans and a hypocritical moral mask of so-called "freedom of speech” and goes from there. It does mention TikTok [See Item 3], saying the crackdown “set a worrying precedent by damaging freedom of more than 150 million TikTok American users on the platform”. It is not clear if the TikTok mess was the spark for this document and its release today, but it appears final edits were done before the final vote in the House of Representatives last Thursday. The report also quotes Senator Rand Paul for saying at a hearing in 2022 that “Do you know who the greatest propagator of disinformation in the history of the world is? The U.S. government”. This document would seem to be against the “San Francisco Vision” the PRC side says Xi and Biden agreed to last November, a vision so far only mentioned by the PRC side. A Reuters story [See Item 2] today about a CIA operation to spread negative narratives about China and its leaders inside the PRC and in some of other countries tarting in 2019 fits nicely with some of the accusations in this report. The publication of the Reuters report and the release of this document on the same day is quite the coincidence...

2. US influence operation against the PRC - Reuters reports that in 2019 the CIA “created a small team of operatives who used bogus internet identities to spread negative narratives about Xi Jinping’s government while leaking disparaging intelligence to overseas news outlets”. According to the story written by two reports with the US intel beat, the officials said “the disparaging narratives were based in fact despite being secretly released by intelligence operatives under false cover”. The timing of this leak is interesting given the TikTok frenzy in DC. And why are three former officials talking about this publicly? It is unclear how effective the operation was and this disclosure of it, assuming the PRC security services were unaware, may blowback badly and further confirm to Xi and his team everything they have been saying about US infiltration and destabilization attempts. We may hear about it in a future MSS WeChat post, and/or arrests of anyone they can find who amplified these narratives inside China. Did any of those “negative narratives” spread inside China get recycled back into US discourse about China by people picking up “rumors” from inside China and then pushing them out to the rest of the world?

3. TikTok - Former Treasury Secretary Mnuchin, who chaired CFIUS and pushed to ban TikTok, now says he is trying to buy it. You could not write a better storyline for the Ministry of Propaganda if you tried. The lobbying in the Senate against the bill is getting quite frantic, and one of the bits of disinformation going around, the origin of which is unclear, is the idea that this bill means that while today it may be TikTok, tomorrow it could be Twitter and Elon Musk that are targeted.

4. New quality combat capacity for MPS and MSS - Both the Ministry of Public Security (MPS) and Ministry of State Security (MSS) held expanded Party Committee meetings to go over the spirit of and tasks from the Two Sessions. Both mentioned the need to develop new quality combat capabilities 新质战斗力. The readout from the MSS meeting also said “Treat advanced technology as the new productive force and combat capability of national security organs, press the fast-forward button on generating and releasing new quality combat capabilities, create strategic high grounds on the hidden front, and focus on improving the ability to use science and technology to maintain national security”.

5. PBoC Party Committee meeting - The Party Committee of the People's Bank of China held an expanded meeting "to deeply study and implement the spirit of the important speeches made by General Secretary Xi Jinping during the National Two Sessions, the spirit of the National Two Sessions, as well as the spirit of meetings held by the Central Financial Committee and the Office of the Central Financial Committee ". The readout said the PBoC will continue to ensure its monetary policy will be “flexible and appropriate,” as well as “precise and effective”, vowed to continue to help reduce financing costs and said “finance is the bloodline of the national economy” and that the bank will spare no effort in supporting the key economic goals laid out in the government work report.

6. Making payments easier for foreigners - The PBoC has published a “Guide to Payment Services in China” to help foreigners figure out how to pay for things with a mobile device. There are videos and a friendly cartoon panda to guide you through the process. They are serious about fixing this problem.

7. Hangzhou drops restrictions on second-home purchases - Hangzhou has dropped restrictions in place since 2011 to limit the purchases of second-hand homes to prevent speculation. It is a sign of how weak the market is in Hangzhou. In previous real estate cycles a move like this would spur a pickup in transactions, but as I have written several times this time is not like the previous real estate cycles.

8. Preparing for the the PRC’s 75th Anniversary - The General Office of the Central Committee issued a notice about the process for issuing medals and honorary titles for the October 1st 75th anniversary of the founding of the PRC. The notice itself may not seem that interesting but it is a reminder that this a really big year for the PRC and the CPC and that there will likely be quite a parade on October 1st. There may also be even more political pressure to make sure nothing too bad happens, the economy stays stable and the markets don’t crash again, as any of those would look bad in this big anniversary year, and potentially be career limiting for responsible officials.