China Policy Monitor No. 1614

CHINA LAUNCHES $3.5 BILLION MEGAPORT IN PERU
Xi Jinping and Peru's President, Dina Boluarte, have inaugurated one of the largest deep-water ports in South America. Speaking via video link, the two leaders christened the Chancay project, which is situated about 80 km north of the country's capital, Lima, and will have four operating berths and send two mega ships to Shanghai per week. A consortium of Chinese banks is providing $3.5 billion in financing for the project, which is jointly owned by Peruvian mining company Volcan and PRC shipping group COSCO (which holds a 60% stake). The port is expected to cut shipping times to Asia and generate $4.5 billion in annual revenue by allowing perishable agricultural products like avocados, blueberries, soybeans, and coffee to be transported faster. "We are witnessing not only the solid and successful joint implementation of the Belt and Road Initiative in Peru, but also the birth of a new land-maritime corridor between Asia and Latin America," Xi said. (Nikkei Asia, November 15, 2024)

CHINA IS MAKING ARMED DRONES FOR RUSSIA TO USE IN UKRAINE
The European Union has "conclusive" evidence that China is manufacturing armed drones for the Russian military in Xinjiang. "A factory inside China is producing drones that are shipped to Russia, and used in the war in Ukraine," an EU official has confirmed. Last month, the U.S. sanctioned two PRC drone suppliers and their Russian partners for collaborating on the production of the Garpiya series of long-range drones. "The Garpiya, designed and produced in the PRC in collaboration with Russian defence firms, has been used to destroy critical infrastructure and has resulted in mass casualties," said the U.S. State Department. China has formally asserted its neutrality in the conflict since the Russian invasion of Ukraine in February 2022. (South China Morning Post, November 15, 2024)

THE MINISTRY OF STATE SECURITY'S GROWING POWER AND PURVIEW
Over the last two years, Minister of State Security Chen Yixin has expanded his ministry's role beyond intelligence and into China's economy, foreign policy and culture. The Ministry of State Security (MSS) now mobilizes government agencies, private firms and civilians to amass troves of information, with the mission of helping China prevail in its great power competition against the U.S. Under Chen, the MSS has cracked down on foreign companies in China, expanded its hacking of U.S. and European governments and firms, and run a social media campaign urging vigilance against U.S. subversion. By 2022, the MSS had 190 million followers across various social media apps and launched its own dedicated WeChat account in 2023. "The internet is the new battlefield, and new media is the new combat power," Chen has said. (Wall Street Journal, November 9, 2024)

PRC HACKS TELECOM DATA OF SENIOR U.S. OFFICIALS, CAMPAIGN STAFF...
Chinese hackers have accessed the networks of "multiple telecommunications companies" and intercepted surveillance data intended for U.S. law enforcement agencies. The hackers stole the communications records of "a limited number of individuals who are primarily involved in government or political activity," said an FBI statement. They opened a back door into the interception systems used by U.S. law enforcement to monitor domestic communications and copied "certain information that was subject to U.S. law enforcement requests pursuant to court orders." Among the targets were telephones belonging to senior political figures including President-elect Donald Trump and Vice President-elect JD Vance. (Nikkei Asia, November 14, 2024)

...AS CHINESE HACKERS TARGET TIBETAN WEBSITES
A PRC hacking group known as TAG-112 has targeted the Tibet Post and Gyudmed Tantric University to install malware on their users' computers. The Tibet Post is known for promoting democracy, freedom of speech and for advocating Tibetan independence from China, while Gyudmed Tantric University teaches Tibetan Buddhism, language, history, and culture. Visitors to their respective websites were prompted to download a malicious executable file disguised as a security certificate that gave the hackers access to their computers for the purposes of information collection and surveillance. (Associated Press, November 12, 2024)