U.S. Sanctions Russia, Iran, China and India | China in Focus

Welcome to China in Focus. I'm Tiffany Meyer. Our top story, a cross-border network under fire. The U.S. sanctioning entities in Russia, Iran and China. Officials say they provided support to Iran's military. Tesla, SpaceX and China. A new report raises questions about a potential merger while CEO Elon Musk pushes back. We'll explain what's behind the report and the growing trend China's economy is showing new signs of weakness. Factory activity fell in July as demand declined while ongoing trade tensions with the U.S. and Europe create more challenges for Beijing. And former White House chief medical advisor Dr. Anthony Fauci refuses to answer questions before Congress about the pandemic's early days. We examine Beijing's cover-up and the role played The Treasury Department has sanctioned six people and companies in China, India, Russia and Iran. The sanctions target companies acting as sales agents for Iran's Mahan Air along with a front company tied to the Islamic Revolutionary Guard. The Treasury says the airline Mahan Air has helped the Islamic Revolutionary Guard Corps or IRGC provide travel for the Quds Force which the U.S. has designated as a terrorist organization. The Treasury adds it also facilitates military training and helps transport drones and weapons. Treasury Secretary Scott Besson says anyone providing logistics, financial or commercial support to the IRGC or Mahan Air is helping sustain a terrorist enterprise. The sanctions block any property or financial assets those entities may have in the U.S. Two companies from the city of Shanghai and a Chinese executive are on the sanctioned list. One company helped coordinate the shipment of electronics from China to Iran. The other represents Mahan Air in China. The sanctioned individual serves as a director at both companies. A report suggesting Elon Musk is laying the groundwork to combine Tesla and SpaceX is getting a sharp denial. But even as Musk calls the report fake news, it highlights how Tesla has quietly prepared for the growing tensions between the U.S. and China. The Wall Street Journal on Thursday reported that Tesla spent the past few years organizing its U.S. and China operations so they could be separated if geopolitical tensions escalate. According to the report, executives have discussed several options for Tesla's China business. Those include making it a separate company, selling it or even shutting it down ahead of a possible merger with SpaceX. Musk pushed back on X calling the story absurdly fake news and saying the idea has never even come up in a discussion. However, the report suggests the planning wasn't only about a potential merger between SpaceX and Tesla. It says Musk wanted Tesla prepared in case tensions between the U.S. and China disrupted supply chains or access to critical technology. It also notes that keeping the businesses separate could help avoid regulatory hurdles. That's because SpaceX is a major U.S. defense contractor while Tesla operates one of its largest factories in China. Tesla wouldn't be the first company to separate its U.S. and Chinese business operations. Starbucks recently sold a majority stake in its China operations a couple months ago. And Yum! Brands, the parent company of popular fast food chains Pizza Hut and KFC, spun off its China division a decade ago. Meanwhile, in 2023, venture capital giant Sequoia split off its China business, citing increasingly complex geopolitical tensions. China's manufacturing sector is showing new signs of weakness. Factory activity declined in July, highlighting the challenges facing the world's second largest economy. China's National Bureau of Statistics reported Friday that the country's manufacturing PMI fell to 49.2. A reading below 50 means factory activity is shrinking. It marks the lowest level in five months as new orders fell and businesses saw weaker demand. It's also worth noting that the Chinese regime has a history of hiding actual statistics, so the true number may be even lower. One possible reason behind China's economic slowdown is continued trade pressure, including tensions with the U.S. and other European countries. The data also shows Beijing is still struggling with weak consumer demand, a worsening property market and higher production costs. Meanwhile, China's services and construction activity also declined, reaching the weakest level since late 2022. Economists say the latest numbers could increase pressure on Beijing to introduce more measures to boost spending and investment. After Dr. Anthony Fauci refused to answer questions before Congress on Wednesday, President Trump is accusing him of protecting China during the pandemic. NTD's Washington correspondent Jeff Bradley takes a look at the CCP's cover-up and the role played by the world health leaders. Amid Dr. Anthony Fauci's refusal to answer questions on Capitol Hill, President Trump explicitly calling out Fauci for always trying to protect China during the pandemic response. In a newly leaked diary, Fauci wrote while he was leading the U.S. response to COVID, he said. The WHO took China for its word at the start of the pandemic that there was no evidence of human-to-human transmission of the virus. That allowed for outbound international flights from China to continue, while the CCP was locking down domestic travel at home. That's as Chinese authorities silenced early warning signs of the pandemic, forcing Wuhan doctor whistleblower Li Wenliang and at least seven other doctors to sign statements admitting that they made false comments even though Li later died of COVID. China then blocked WHO investigators from accessing Wuhan for more than a year, and then refused to hand over raw data, lab records, and blood samples. We are asking actually China to be transparent. The raw data was not shared. President Trump then withdrew from the WHO during the pandemic. Chinese officials ignored their reporting obligations to the World Health Organization and pressured the World Health Organization to mislead the world when the virus was first discovered by Chinese authorities. And instead of demanding transparency from Beijing, Fauci publicly defended the WHO's move. The WHO is an imperfect organization. The world needs a WHO. Upon retaking office, President Trump immediately withdrew from the WHO once again. Jack Bradley, NTD News, Washington. Apple shareholders rejecting a proposal calling for more transparency around the company's exposure to China, but the questions it raises about supply chain risk and geopolitical uncertainty aren't going away. To discuss it, NTD's Steve Land spoke with the counsel for the organization behind that shareholder proposal, Paul Kaminar, counsel to the National Legal and Policy Center. Paul Kaminar, thanks so much for joining us in studio. Thank you for having me. Paul, talk to us about this China entanglement audit. The fact that Apple, so much backlash within the company to not want to reveal its ties to China and the risks that it might pose to its investors is sort of uncanny. Why do you think that is and what do you hope that this audit would ultimately achieve? Well, yeah, thank you for having me. The National Legal and Policy Center made a proposal under our corporate integrity project because we own some shares in Apple. And the purpose is to have Apple and other companies as well disclose the kind of ties they have with communist China. And this policy that we're looking at, this China entanglement audit, is just simply one to say, look, tell the shareholders what kind of involvement you have with China in terms of 90% of your products are made in China. And what you're doing there is working with the communist party there and subsidizing not only their economic warfare that they're using against the United States, but also repressing human rights, political rights. China, we all know, has forced labor camps and so forth. They go after minority groups like the Uyghurs, the Falun Gong, etc. And Apple and other companies are complicit in that. And so all we're just saying is, look, tell your shareholders what you're doing and how this affects the shareholders and the reputational risk of the company because also there's a financial risk because if China decides to pull the plug or do some kind of economic backfire to what Apple is doing, that could have obviously a ramification on the value of Apple. But again, the larger issue is transparency. They have this out in the public. It seems like a very responsible thing to do. As you fully disclosed, the National Legal and Policy Center is a shareholder in Apple. And so this was a shareholder-created proposal, Apple's board voting against it, giving existing tariffs and geopolitical tensions. How vulnerable do you think Apple shareholders are to a lot of the things that you just laid out? Well, I think they are very vulnerable, especially when you've got 90 percent of your products coming from China. Now, Apple tries to do a whitewash, saying, well, we're diversifying. We'll have something that the production done in India or Vietnam, etc. But as we look into it more, that's basically a sham because they're basically all connected to the dictates of what's coming from communist China. One thing we often ask ourselves when we have these discussions about the CCP and dark money and proxies is accountability. Talk to us about FARA, the Foreign Agents Registration Act. And are we enforcing it? Are we leaving something on the table? Is it tight enough? And is it a good method to target some of these things? That's a good point. The Foreign Agents Registration Act requires foreign agents to register with the Department of Justice to say, here, I'm being paid by this foreign entity or even a company. It's not necessary for the government itself to do their lobbying here in Washington, D.C. So we filed a complaint against actually Hunter Biden with the Department of Justice because he was getting money from China Energy Company and then trying to meet with folks in the State Department, etc. And we said, well, that's a violation of the Foreign Agents Registration Act. But there has been a couple of prosecutions on this relating to China. I was glad to see that. For example, in 2024, a Chinese operative here in California went after Shen Yun, the dance troupe sponsored by Falun Gong, saying that, oh, this organization should not be a 501c3 non-profit. And he went to the IRS saying, you should revoke their tax-exempt status. And it turns out he also gave a bribe to one of the IRS agents. And the government said, well, wait a minute. You're not doing this as some good government citizen. You're actually a front for the Communist Party in China. And therefore, you violated the Foreign Agents Registration Act. He was tried, he was convicted, and was given a 20-month sentence. Fast forward to a couple of months ago in New York, the government also indicted and convicted another Chinese agent for operating out of what's called a Chinese police station in New York, which actually is a cover to basically target and harass those dissidents here in America who oppose the Communist China. And he was convicted. Not sure what the sentence was. But those are two examples. And what this does is expose to the American people the kind of pernicious influence that the Communist Party of China is having here in America. Paul Kamen, our counsel to the National Legal and Policy Center, greatly appreciate you joining us. Thank you. My pleasure. Anytime. The European Union's biggest push yet to compete in the global AI race. The EU has opened bids to build up to seven massive AI gigafactories, dramatically expanding Europe's computing capacity. Tens of billions of dollars are expected to be invested. The move aims to reduce Europe's reliance on the US and China. President Trump has criticized the EU's tech regulations while China has tightened exports of critical minerals used by the industry. The project is backed by $11.5 billion in public funding. Officials hope to attract at least $23 billion more from private investors. The gigafactories would give Europe greater capability to train and run advanced AI models, reducing its dependence on cloud providers and data centers in countries like China and the US. While Europe seeks AI independence, the gigafactories will initially rely heavily on advanced chips from American companies like NVIDIA and AMD. On the software side, the EU wants to ensure all systems comply with the bloc's standards on privacy, safety and ethics, which are in some respects stricter than those in the US. Coming up, a controversial embassy project moves forward. Britain's High Court says Beijing can build in the heart of London. That's despite local residents protesting and calling it a spy base in London. And baton attacks, water cannons and combat jets. China is expanding military patrols around Scarborough Shoal after violent confrontations with Philippine forces. How the US is responding. More on that after the break here in China In Focus. Welcome back to China In Focus. I'm Tiffany Meyer, turning now to London, where Britain's High Court ruled that the government lawfully approved a massive new Chinese embassy. The decision rejects a legal challenge from local residents. They argued the facility could limit protests and be used to monitor Chinese dissidents. The embassy project was approved in January. It would become China's largest diplomatic mission in Europe, located near London's financial district and critical communications infrastructure. Supporters say British intelligence agencies have reviewed the plans and national security risks can be managed. Critics warn the facility could become a base for Chinese espionage and surveillance operations. They point to Beijing's history of targeting dissidents overseas. The ruling comes as Britain seeks closer economic ties with China despite ongoing security concerns. Tensions escalating in the South China Sea. Beijing has deployed guided missile frigates and combat jets to conduct aggressive patrols near Scarborough Shoal. It comes just days after a violent clash injured Philippine sailors in contested waters. Chinese state media released footage showing off warships and fighter jets in the region. China's Coast Guard says it has also stepped up law enforcement patrols. Beijing says the patrols are aimed at protecting what it calls its sovereignty. But the waters are also claimed by the Philippines. A 2016 international arbitration ruling found no legal basis for China's sweeping claims in the South China Sea. But China rejected that ruling. This show of force comes on the heels of a hostile incident where Chinese personnel attacked Philippine Navy troops with wooden batons and blasted vessels with high pressure water cannons. Washington is firing back. Secretary of State Marco Rubio criticized Beijing's actions, reaffirming that Washington stands firmly by its treaty ally, the Philippines. A U.S. Navy aircraft carrier strike group has also arrived in the region to reinforce a free and open Indo-Pacific. Meanwhile, Beijing is increasing pressure on Taiwan, expanding its reach beyond the Taiwan Strait. Taiwan is condemning China's latest Coast Guard patrols off its eastern coast. Taiwan says the patrol is a political operation designed to undermine regional stability and challenge its sovereignty. Taiwanese officials have dispatched their own vessels to monitor the Chinese ships. To discuss the conflicts between China and the Philippines, we spoke with Rick Fisher, senior fellow at the International Assessment and Strategy Center. Rick Fisher, thank you so much for joining us. Great to have you back on the show. Tiffany, thanks for having me back. So, the latest with the tensions around the Philippines, Beijing has deployed JL-10 jets and a Type 054B frigate. What do these tell you about the type of operation and message that China is sending? China is showing the Philippines and the world that it can send second tier platforms to enforce its illegal claim to Scarborough Shoal, which if they get away with it, Tiffany, will cement China's control of the South China Sea and its chokehold over the Asian maritime commercial arteries. And all of this just comes days after that violent clash that injured Philippine sailors and the USS George Washington had sailed through the area as well. What do you make of the timing here of China's operations? Well, yes, the United States has deployed significant force to the South China Sea, luckily to just follow the Chinese aggression against the Philippine around Second Thomas Shoal in the first week of the month. Unfortunately, the United States has been undertaking this kind of top level tier, top tier force signaling to China for probably close to two decades. And it has not resulted in convincing China to stop its incremental aggression against the Philippines and for that matter, Taiwan. As a consequence, the United States is beginning to take a new tack. In the last week, we've announced, the United States has announced that it's going to help the Philippines build a new pier on the island of Palawan, which is on the front line of the contest over Second Thomas Shoal in the southern part of the South China Sea. The United States has not yet taken an active response to Chinese aggression against Scarborough Shoal in the north. Both are necessary because if China takes control of both locations, that will complete its control of the South China Sea. I'm very interested in seeing where the Coast Guard cooperation with Philippines leads. Essentially, we're going to have to start bumping the Chinese ships. We're going to have to be physically pushing them out of the way in order to make our point. Yes, that's an escalation. It could lead to gunfire, but the United States is more than capable of being patient in that sense and simply amassing the ships necessary to push the Chinese aggressive Coast Guard out of the way. So that would be the escalate to de-escalate, as some like to say it sounds like. Given that the U.S. and the Philippines are mutual defense treaty allies, where if the Philippines is attacked, we would have to respond. How fragile is this area? It is on the knife edge. The Chinese are very serious. They want to control the South China Sea in order to protect their nuclear ballistic missile submarines, their second strike capability. They want to protect their aircraft carriers. They're going to be basing many of them on Hainan Island. And they also want to protect their space access from Hainan Island. They have a major space base, and that is the one that they will use to go to the moon, to go to Mars, to try to dominate the Earth-Moon system. So China has great incentives for controlling the South China Sea and conducting this current aggression against the Philippines. The United States, however, has every interest in stopping this aggression from succeeding and in containing all the force that China is putting on Hainan Island, which is not about the defense of China. It's about the domination of the world and then the Earth-Moon system. That's all for today's China In Focus. Tiffany Meyer, if you have any feedback on the show or have something you'd like to see us cover, send us an email at chinainfocusandtd.com. We'd love to hear from you. For on the clock original news coverage, visit us at ntd.com or download our NTD app. Thanks for watching. See you soon.