The Mainland Affairs Council's "China Mainland Situation Report" for the 2nd quarter of 2023 provides the following key highlights:

(1) Internal Situation:

• In politics, Xi Jinping warned of the complex national security issues and emphasized the need to adhere to bottom-line thinking and limit thinking.
• The Standing Committee of the National People's Congress amended the "Counter-Espionage Law" to expand the definition of espionage activities and enacted the "Foreign Relations Law" as the basis for diplomatic work, granting legal authority for sanctions against foreign entities. Several foreign-related companies faced searches.
• China's State Councilor and Foreign Minister, Wang Yi, took over the role after the disappearance of Foreign Minister Qin Gang, and organizational reforms led to personnel changes.
• Xi Jinping emphasized loyalty to the party, cautioning against repeating the mistakes of the Soviet Union. He highlighted "Chinese-style modernization" and the development of Chinese national modern civilization, with national unity as a core interest.
• The top leadership acknowledged new economic challenges and promoted consumption and employment stability. Xi Jinping emphasized technological innovation and normalized anti-terrorism measures in Xinjiang.
• Severe flooding occurred in various regions, including Chongqing, Beijing-Tianjin-Hebei, and Northeast China, since July. Xi Jinping called for all-out rescue efforts to minimize losses, though he did not personally visit the disaster-stricken areas, leading to criticism from netizens.
• Several high-ranking officials faced investigations for corruption, and efforts were made to control the source of stability maintenance.

(2) Foreign Relations:

• China continued its summit diplomacy, with Xi Jinping hosting the inaugural "China-Central Asia Summit" and meeting with leaders from Russia, the Republic of the Congo, Honduras, Palestine, New Zealand, and Vietnam.
• In U.S.-China relations, Xi Jinping met with U.S. Secretary of State Antony Blinken, advocating that great power competition is against the trend of the times, and both countries can develop separately and prosper together.
• High-level Chinese officials engaged with European counterparts, signaling slight improvements in U.S.-China and EU-China relations.

(3) Military Developments and Regional Security:

• Xi Jinping appointed new commanders and political commissars for the Rocket Force, with several high-ranking officials in the Rocket Force disappearing amid rumors of purges.
• The Central Military Commission issued "Regulations on the Social Interaction Behavior of Military Leading Cadres" to strengthen discipline requirements.
• China conducted its 7th test of land-based mid-course anti-ballistic missile intercept technology, and unmanned aerial vehicles flew around Taiwan for the first time. China continued to explore composite air operations against Taiwan.
• China's aircraft carrier Liaoning and its battle group passed through the Taiwan Strait twice in May and June, and Chinese military aircraft entered Taiwan's air defense identification zone.
• The Shangri-La Dialogue in June indicated both the U.S. and China were seeking to stabilize bilateral relations.

(4) Hong Kong and Macau:

• The Hong Kong government significantly reduced the number of directly elected seats in district councils, implemented a qualification review mechanism, and took steps to ensure "patriots governing Hong Kong."
• Civic Party disbanded, and freedom of speech continued to be constrained.
• Hong Kong's GDP grew 2.7% in Q1, ending four consecutive quarters of decline, but external trade performance remained weak.
• The Macau government completed amendments to its national security law and announced plans to reform the election laws for Chief Executive and Legislative Assembly elections, emphasizing "patriots governing Macau."
• The Central Liaison Office in Hong Kong and Macau emphasized national security and comprehensive governance.

(5) Taiwan Work:

• China convened a "Taiwan Work Conference," reiterating Xi Jinping's thought and the "overall strategy" while deploying "Five Musts" as the focus of Taiwan work for this year.
• It is predicted that China will continue to pressure Taiwan to accept its political framework, promote cross-strait cultural and psychological resonance, and possibly conduct "extensive research" on Taiwan and an "interference campaign."

(6) Cross-Strait Relations:

• China continued to operate on tourism issues, first by resuming Taiwan tour groups to the mainland, then by opening up mainland tour groups to 78 countries but excluding Taiwan.
• China maintained a strategy of "large-scale exchanges and comprehensive united front work" and invited Taiwanese from various sectors to visit the mainland, promoting its political agenda.
• China held forums such as the "Straits Forum" and the "Hubei-Hunan Forum" to create an atmosphere of active cross-strait exchanges, though the actual number of participants decreased, indicating a weakened effect on Taiwan's united front strategy.
• Additionally, China utilized the summer to hold various youth exchange activities to attract young Taiwanese for learning and work experiences in the mainland.

(7) International Aspects:

• China utilized high-level communication with the U.S. to set its red lines on the Taiwan issue and tried to consolidate its "One China Principle" while reducing U.S. support for Taiwan.
• To avoid the advancement of U.S.-Taiwan cooperation, China opposed official exchanges between the U.S. and Taiwan, urged the U.S. to halt arms sales and military contacts with Taiwan, and engaged in military intimidation under the pretext of "taking necessary measures to safeguard sovereignty and interests."

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