125 Chinese Jets Encircle Taiwan; Trump Hints at High Tariffs | China in Focus

Welcome to China In Focus. I'm Tiffany Meyer. Our top story. Communist China launches new war games near Taiwan, sparking anger in Taipei and concerns in Washington. What the CCP says the drills are for, plus the U.S. reaction. They've shown no signs of any sort of conciliation towards Taiwan. And this is very, very serious. A wave of sanctions by Beijing against one of Taiwan's wealthiest and a prominent lawmaker. A look at China's latest move amid large-scale military drills. Trade negotiations with Mexico, China and the European Union have harmed the U.S., that's according to former President Trump. He proposes a renegotiation of major trade deals. And former President Donald Trump's VP pick Senator J.D. Vance sheds light on why he says America needs Trump's trade policy, specifically when it comes to China. A show force like never before, the Chinese regime is flying a record 125 warplanes in large-scale military drills encircling Taiwan from all sides. The exercises range from the Taiwan Strait to the north, south and east of the island. China has been ramping up its military aggression around Taiwan since early Sunday, despite Washington's warning. Let's zoom in. China's military launched a new round of war games near Taiwan on Monday, drawing condemnation from the governments in Taipei and the U.S. Chinese state media reported that China's Coast Guard circled Taiwan and staged rare operations of quote law enforcement patrols close to Taiwan's offshore islands. The Chinese military's Eastern Theater Command said the drills were taking place in the Taiwan Strait and nine areas around the island. Taiwan's defense ministry and Coast Guard said Monday that both agencies had dispatched their own forces. Fighter jets were seen taking off and landing at Taiwan's Hsinchu Air Base Monday morning. And Taiwan's Coast Guard released this video said to show one of its ships broadcasting a message asking a Chinese Coast Guard vessel to leave its waters. A Taiwan security source said there were no signs so far of any missile launches. Democratically governed Taiwan, which China views as its own territory, had been on alert for more war games since last week's National Day speech by President Lai Ching-te. Lai's address was condemned by Beijing after he said China had no right to represent Taiwan, even as he offered to cooperate with Beijing. China's Eastern Theater Command released this propaganda video Monday, which showed a cartoon caricature of Lai with pointed ears like a devil. Taiwanese officials said Lai's National Security Council convened on Monday to discuss the situation. The council's secretary-general, Joseph Wu, said that Taiwan would not escalate the conflict. We also need to stay calm and confident to prevail in the struggle between democracy and authoritarianism. We will stay moderate and responsible and work hard to maintain the peace and stability in the region. A senior Taiwan security official said they believe China was practicing blockading Taiwanese ports and international shipping lanes, as well as repelling the arrival of foreign forces. In Washington, officials from the administration of U.S. President Joe Biden said there was no justification for the drills and that they were continuing to monitor them. The Chinese military on Sunday released a propaganda video on its social media account. It shows various military drill exercises, featuring a slogan reading, prepared for battle, alongside a map of Taiwan. The U.S. State Department said it's monitoring the drills. It also noted there was no justification for the war games after President Lai's quote, routine speech. Washington is calling on China to act with restraint and to avoid any further actions that may undermine peace and stability across the region. The U.S. is Taiwan's ally and is bound by law to provide it with weapons to help in its defense. And how are Chinese citizens reacting to China's latest war games around Taiwan? In the capital city of Beijing, residents said despite their wish for peace in the region, they won't go against the Communist Party's decision. For us ordinary people, war is definitely not wanted. Whether it is for Taiwan or any other country, we do not want such a horrible event as war to happen. If something really damages the rights and interests of our country, we ordinary people will also stand on the side of our country and support the country. And what consequences could China possibly face if Beijing's military invaded the island? In early April, Congressman Blaine Lutkemeyer said the U.S. would immediately enact massive financial sanctions and major trade restrictions on China. And China would do the same to the U.S. He went on to say that military actions would follow. He said the two largest economies in the world, for all intents and purposes, would be at war. As Beijing launched military drills around Taiwan, it also announced sanctions against two Taiwanese individuals Monday for acting in support of Taiwan. They are Taiwanese businessman Robert Cao and lawmaker Puma Shin. Beijing accuses them of seeking to incite separatism that could endanger cross-strait ties. Here's what they did to spark Beijing's ire. Two years ago, Cao pledged to provide millions of dollars to two Taiwanese civilian defense training programs. Shin, a lawmaker with Taiwan's ruling party, helps run the training. As part of Beijing's sanctions, both would be barred from traveling to China, including Hong Kong. What's more, all Chinese companies and individuals will be barred from doing business with them. In addition, Black Bear Academy is also on the sanction list, the institution that offers the defense training. Shin, the lawmaker, described the measure as a provocation from China. He said it reflected Beijing's great sensitivity towards any civilian defense initiatives in Taiwan. Cao is one of Taiwan's richest men. He's the founder and former chairman of Chipmaker United Microelectronics Corp., or UMC. The company stands as one of Taiwan's major chipmakers, and it owns a factory in China. To talk more about the record 125 Chinese warplanes flying past Taiwan in a single day, we're joined by Grant Newsham, retired Marine colonel and author of When China Attacks. Grant Newsham, thank you so much for joining us. Great to have you back on the show. I'm glad to be here. Now, Beijing just deployed a record 125 warplanes around Taiwan. Now, this just comes days after Taiwan's president stated that China has no right to represent Taiwan and declared his commitment to resist annexation or encroachment. How do you read this latest military drill around Taiwan? Well, it's China tightening the noose. They get closer and closer to Taiwan. Most recently, they're within this gap, about 12 to 25 miles from Taiwan, which means if they were to actually fire a missile while they're there, it would probably take less than a minute to get to Taiwan. So if they do want to make it all real and actually attack Taiwan, it is going to be with very short notice. They were practicing combat operations, which is what they always do, but also they threw in the Coast Guard. And by putting the Coast Guard into the mix, if you do want to just have a blockade at some point and just warn foreign ships away and say, look, this is internal matter, it's law enforcement matter. So it's really best to think of it as tightening the noose or an anaconda. It's got its prey in its coils. And it's just gradually tightening and tightening it. They've shown no signs of any sort of conciliation towards Taiwan. And this is very, very serious. Expanding on that, we have seen Beijing stage similar exercises. There was one in May after Lai's inauguration as president, and then also two years ago after then House Speaker Nancy Pelosi's visit to Taiwan. Given this record number, though, of 125 warplanes this time, is this a serious escalation? How close are we to a full blown attack, if you will? Well, I get asked that question a lot. I think if you do, if you're part of a commentariat, you ought to be able to give an estimate. And I would say that any time from September, I think China could go after Taiwan. So September was last month. That's how I would look at it. Others people say it'll be a few years from now. Others will say it will never happen. But that's my prediction, that China has the capabilities to think that they could attack Taiwan and have some prospects for success. They're also watching very closely what happens in the United States and what the state of affairs is in our country. Now, that very much weighs on Xi Jinping's decision making. Grant Newsham, thank you so much for your time. Well, thanks for having me. I appreciate it. Just weeks ahead of the presidential election, former President Donald Trump revealed his plan for tariff hikes on goods coming out of Mexico. Here's Trump during a Fox interview. But what about the criticism? And the Journal has done this as well, that if you do put something like a 200 percent tariff on a product, that it's only going to mean higher prices for consumers. No, no, it doesn't mean that. Got to be passed on somehow. All I'm doing is saying I'll put 200 or 500. I don't care. I'll put a number where they can't sell one car into the United. I don't want them to sell their car because I don't want them hurting our car companies. We're going to have a lot of companies moving into the United States. When I use 200, I'm using it as a number. I don't want their car. They will not be able to sell cars. I'm not going to let them build a factory right across the border and sell millions of cars into the United States and destroy Detroit further. You know, we lost over the years 70 percent of our car. We're going to bring back those those companies. And I'll tell you what, they're going to come back in spades and they're going to come back fast. During the interview, Trump said the U.S. has been harmed by Mexico, China, Canada and the E.U. Those countries are some of Washington's most important trade partners. Trump opposed a new U.S.-Mexico-Canada trade agreement aiming to create more jobs at home and revive an auto industry that was faltering because of cheap imported cars. Following the former president's comments, a closer look at economic policy promises from the Trump-Vance ticket, Republican vice presidential nominee Senator J.D. Vance highlighted the need to boost American supply chains. In a Fox interview Sunday, Vance explained why he supports former President Trump's proposal for high tariffs. Vance mentioned that China occupies nearly one-third of global manufacturing GDP, almost double the U.S. share. He warned that in the coming decade, the U.S. will find itself relying on China for everything from pharmaceuticals to weapons and added that reliance on communist China would prove dire for the U.S. Vance also pointed out that under his and Trump's plan, major penalties will be imposed on cheap Chinese products made with slave labor that's to protect American wages and manufacturers. Vance previously labeled China as the number one threat to the U.S. Coming up, a slump for one of China's economic bright spots as outbound shipments take a drastic dip this month. We have the latest numbers. They're striving to make a five percent GDP target. They're not actually anywhere near that. China is gearing up to increase its state debt insurance to revive its sluggish economy. But key details of the stimulus remain a mystery. Defense ministers from China and Russia meet in Beijing for talks aimed at deepening defense cooperation. In the meantime, the two navies are drilling together, putting the U.S. and its allies on high alert. More on that after the break. You're on China In Focus. Welcome back to China In Focus. I'm Tiffany Meyer. One of China's economic bright spots is showing signs of dimming. Export growth slowed sharply last month to its slowest in six months. Customs data shows outbound shipments grew 2.4 percent year-on-year in September. Compare that to a nearly nine percent rise in August. The weak data does not bode well for exports since about one-third of China's purchases are parts that are used in manufacturing and later re-exported, particularly in the electronics sector. Manufacturers may be slashing prices to move inventory ahead of tariffs from several trade partners. The EU, U.S. and Canada have recently tightened trade measures against China. The European Commission earlier this month voted to impose additional tariffs on electric vehicles built in China. Beijing leaving the world to play guessing games about its financial stimulus plans. China says it's about to increase its state debt issuance to revive its sluggish economy. But it's keeping details scarce about the size of stimulus being prepared. The silence has left investors wondering if the plan will actually jumpstart growth. Here's more. China pledged on Saturday to significantly increase debt in a push to revive its sputtering economy. But it left investors guessing on the overall size of the stimulus package, a vital detail to gauge the longevity of its recent stock market rally. At a news conference, Finance Minister Lan Fo'an announced a series of measures, including helping local governments tackle their debt problems by issuing bonds. The ministry also said it would replenish state banks' capital, support the property market, and offer subsidies to people with low incomes. These are all steps investors have been urging Beijing to take as the world's second-largest economy struggles to overcome deflationary pressures and lift consumer confidence amid a sharp property market downturn. But Lan's omission of a dollar figure for the package is set to prolong investors' nervous wait for a clearer policy roadmap. That's not going to come until the next meeting of China's rubber-stamp legislature, which approves extra debt issuance. A date for the meeting has yet to be announced, but it's expected in the coming weeks. A wide range of economic data in recent months has missed forecasts. It's raised concerns among economists and investors that the government's roughly 5% growth target this year was at risk and that a longer-term structural slowdown could be in play. Data for September to be released over the coming week is expected to show further weakness, though Beijing leaders pledged last month to use necessary fiscal spending to meet the 2024 target. Policymakers also rolled out aggressive stimulus measures that pushed Chinese stocks to two-year highs before retreating as nerves set in given the absence of further policy details from officials. China's Economic Planning Agency has announced new measures to rev up its economy, but can Beijing hit its elusive 5% growth target this year? NTD's Dawn Ma spoke with McCarthy, Chief Strategist at Macro Lens, for details. This is weighing on the rate of nominal growth. They're struggling to get interest rates down to levels below the nominal growth rate, which would incentivize people to borrow, so people outside of the government sector don't want to borrow. This is exacerbating the deflation problems. The weak asset prices in the wake of the housing bubble are weighing on all this, and it's the kind of situation that cries out for an aggressive monetary response to break the deflation. But I don't really think, other than a 20 basis point rate cut from the PBOC, we've seen anything yet that you could term aggressive. So with the issues that you mentioned just now, do you think the country is going to achieve its 5% growth target? I think they'll probably tell us they grew at something like 4.7 or 4.8, and then next year they'll try to tell us they're going to take that down to 4.5 perhaps. But those are real growth rates. They're experiencing deflation, so inflation is negative. So even if they are growing at, say, 4.7 real, it's only 4 nominal, which is really where corporate revenues come from, where return on investment comes from. The debt you might borrow to invest in something is nominal. You need nominal returns. This is the problem with being in deflation. So honestly, I don't think they're anywhere near 4%, but they can call it whatever they want to call it. All right, Brian, that's all the time we have for you today. Thank you very much for coming on. Thanks, Don. Elsewhere, Taiwan's semiconductor manufacturing company is cementing its place in the AI revolution. Asia's most valuable company is the main producer of advanced chips used in artificial intelligence applications. A boom in AI demand is expected to have sent TSMC's third quarter profit soaring 40%. TSMC is scheduled to share quarterly earnings on Thursday. That report will include an update on its outlook for the current quarter and full year. Taiwan produces over 90% of the world's most advanced microchips. U.S. Commerce Secretary Gina Raimondo has warned that the impact of a Chinese seizure of Taiwan's biggest chipmaker by way of invading the island would be devastating. Russia's defense minister just arrived in Beijing, scheduled to meet with his Chinese counterpart and a slew of the country's senior defense officials. Russia's defense ministry released a video on the same day, announcing more joint exercises between the Russian and Chinese navies in the northwestern Pacific Ocean. It's part of their joint patrol in the Asia-Pacific region, which kicked off last month. The two militaries have conducted anti-submarine, missile and artillery firing drills. KLM Royal Dutch Airlines is calling on the EU to take action in China. The air travel company wants measures in place to address unfair competition from Chinese competitors, which benefit from flying over Russian airspace. Here are the details. KLM Airlines CEO Marion Rental is asking Brussels to support Europe-based airlines. She believes they need an advantage over Chinese competitors. Rental points out that Chinese airlines don't have to fly around Russia as Moscow allows them to traverse its airspace. Speaking on a Dutch TV program, Rental explained that flying over Russia can create a two-to-four-hour difference in travel time, which affects ticket prices. As a result, tickets are much more expensive for European airlines, giving Chinese competitors an edge. Xu Ziyun is a military analyst for a Taiwan-based think tank. He says the EU could take steps to help level the playing field and eliminate unfair competition. He said the first step is to ask Beijing to cut back on flights. This would help stop unfair competition on ticket prices. If Beijing doesn't agree, the EU could then close parts of its own airspace. This would prevent Chinese planes from landing or force them to take longer routes, making them raise ticket prices. He said Europe is Beijing's second largest international trade market. The trade volume plays a key role in China's GDP. The effectiveness of any measures would depend on whether the EU can come together to force Beijing to comply with international trade rules. That's all for today's China In Focus. I'm 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 chinainfocusntd.com. We'd love to hear from you. For around-the-clock original news coverage, visit us at ntd.com or download our NTD app. Thanks for watching. See you soon. Coming up on NTD, stay tuned for America's Hope with Kelly Wright. Tonight, former Governor of Arkansas Mike Huckabee shares his insight on the U.S. presidential election. Plus, former Congressmember Michelle Bachmann discusses her concerns about the latest actions taken by the United Nations and the World Health Organization, and shares her own take about the election. What's more, AJ Nolte brings a discussion on developments in Israel and their impact on America. That's tonight at 10 p.m. after China In Focus. Thanks for watching. See you tomorrow.