MERICS Blog - European Voices on China https://www.merics.org/en/blog/rss?field_topics_target_id=All en Losing ground in space https://www.merics.org/en/blog/losing-ground-space <span>Losing ground in space</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Wed, 09/18/2019 - 13:23</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-19T12:00:00Z">2019-09-19</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/kai-von-carnap" hreflang="en">Kai von Carnap</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Selina Morell</span></span></span></span></span></p> <p><strong><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>In the space realm, Europe still seeks cooperation with China despite having framed it a systemic rival. This creates serious strategic and economic risks, because Europe is too fragmented to keep up with China’s concerted commercial and military efforts to challenge the US dominance in space.</span></span></span></span></span></strong></p> <p><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>This article is part 1 of a mini-series to present the outcomes of the<a href="https://www.merics.org/en/events/merics-european-china-talent-program-2019"> MERICS European China Talent Program 2019.</a></span></span></span></span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/bjl13075616.jpg?itok=ldN1rJzn 325w, /sites/default/files/styles/max_650x650/public/2019-09/bjl13075616.jpg?itok=hHt7HjP5 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/bjl13075616.jpg?itok=yL0_UYvM 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/bjl13075616.jpg?itok=Qs0HYWVY 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/bjl13075616.jpg?itok=ldN1rJzn" alt="Chang Zheng 2C carrier rocket, Sichuan Province China, 26 July 2019 Source: ImagneChina bjl13075616" title="Chang Zheng 2C carrier rocket, Sichuan Province, China, July 2019 Source: ImagineChina bjl13075616" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>Fifty years after Neil Armstrong became the first man to set foot on the lunar surface, China provided humanity with the first picture of the far side of the moon, captured during the Chang'e 4 mission in January 2019. This event is exemplary for the great advances China has made in space:</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> Within a relatively short time, <span>China has emerged as a major space power that is about to overtake Europe</span>.</span></span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Outer space has become indispensable for our current and future society.</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> Whether getting cash from ATMs, checking the weather forecast or making phone calls, all these everyday activities rely on space infrastructure. Satellite navigation alone contributes to about </span></span></span></span><a href="https://ec.europa.eu/commission/sites/beta-political/files/budget-june2018-space-programme-impact-assessment1_en.pdf"><span><span><span><span><span>ten</span></span></span></span></span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> percent of Europe’s GDP</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>. It also lays the foundations for upcoming emerging technologies: the Internet of Things, 5G and 6G mobile telecommunications standards and quantum technology will all rely heavily on satellite networks. Longterm, our economic prospects may depend on mining resources from asteroids or space-based solar power</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>.</span></span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>Unlike Europe, China aims for military expansion</span></span></span></span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>China is turning into a global powerhouse in space matters. Beijing declared the development of its space sector a national priority, with the intention of becoming the world’s leading space power by </span></span></span></span><a href="https://www.uscc.gov/sites/default/files/Namrata%20Goswami%20USCC%2025%20April.pdf"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>2045</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>. It is well on track. In 2018, it had more orbital space launches than any other country. In the year to come, Beijing aims to send a probe to Mars</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> and make its <span>navigation system Beidou (China's answer to GPS) fully operational. A Chinese space station called “Heavenly Palace” is under construction and set to ascend in 2022, potentially replacing the International Space Station (ISS), which is planned to be retired 2024</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>.</span></span></span></span></span></span></p> <a href="https://www.merics.org/sites/default/files/inline-images/190909_Blogpost-Graph_Space.jpg"><img alt="Graph Space" data-entity-type="file" data-entity-uuid="04407dc7-21bb-45b5-827d-7697a08af20f" src="/sites/default/files/inline-images/190909_Blogpost-Graph_Space.jpg" class="align-center" /></a> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>Many of China’s space efforts are part of a strategic and military race with the US<strong>.</strong> </span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Back in 2015, the Chinese army set up a </span></span></span><a href="https://www.rand.org/content/dam/rand/pubs/research_reports/RR2000/RR2058/RAND_RR2058.pdf"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Strategic Support Force</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> to intensify efforts to challenge </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>the US space military. Since 2007, China has had the technology to shoot satellites out of earth’s lower orbits with ground-based weapons and </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>perhaps attack higher stationed satellites with its own satellites</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>.</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> It has made similar advances in developing non-physical space weapons</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>, such as signal interference and cyber-attacks. It even has the technology ready to field a </span></span><a href="https://www.csis.org/analysis/space-threat-assessment-2019"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>nuclear-armed anti-satellite weapon</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>.</span></span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Unlevel playing field vis-à-vis Chinese companies may extend to space</span></span></span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>In a trend known as “New Space" private space enterprises ar</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>e proliferating <span>everywhere. </span>Two thirds of US satellites today serve civil or commercial applications. In the EU, too, civil and commercial satellites dominate. In contrast, of four Chinese satellites, only one is used for civil and commercial use; the other three satellites are deployed for governmental and military applications.</span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>This is, in part, because Ch</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>ina is a latecomer to New Space, but also because it is attempting to integrate the emerging commercial industry into its defense industrial base. The People's Liberation Army </span></span></span><a href="http://www.chinadaily.com.cn/a/201902/18/WS5c69ef0fa3106c65c34e9bea.html"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>opened its Jiuqua<span>n Satellite Launch Center</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> for private launches and is increasing partnerships with the private sector and leading research universities. By transferring private sector innovation into the defense sector, China clearly hopes to create leapfrog development.</span></span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>This interaction of private and military sectors should not only raise concerns for Western companies because of dual use technology, it will also make competition in this emerging market increasingly difficult. The "unlevel playing field" vis-à-vis Chinese companies, with which other industries have already been confronted, could soon extend to space.</span></span></span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>The curse of fragmentation</span></span></span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>To date, Euro<span>pe has been a major player in the space domain. </span>Traditionally,<span> EU member countries have had full authority in space matters</span>. In some areas they collaborate within the intergovernmental ESA, a non-EU body<span>, but by and large European countries are </span></span></span></span><a href="https://www.institutmontaigne.org/en/publications/space-will-europe-strike-back"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>hesitant to shift</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> from their national space programs towards a joint strategy. To complicate matte</span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>rs further, Britain, one of Europe’s most present space nations, is leaving the <span>EU. Its fragmentation leaves Europe vulnerable to growing dependency and stagnating innovation. </span></span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Brushing away the </span></span><a href="https://www.reuters.com/article/breakout-beidou/special-report-in-satellite-tech-race-china-hitched-a-ride-from-europe-idUSL4N0JJ0J320131222"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>unfavorable</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span> Beidou cooperation, Europe is maintaining a collaborative stance towards China and still </span></span><a href="https://ec.europa.eu/research/iscp/pdf/policy/cn_roadmap_2018.pdf"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>sounds very positive</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span> about future cooperation prospects.</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> Embracing this opportunity, China has established an overseas satellite </span></span></span></span><a href="https://www.scmp.com/news/china/diplomacy/article/2182026/swedish-defence-agency-warns-satellite-station-could-be-serving"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>ground station in Sweden</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>, signed a Memorandum of Understanding (MoU) </span></span></span></span><a href="https://spaceresources.public.lu/en/actualites/2018/Luxembourg-cooperates-with-China-in-the-exploration-and-use-of-outer-space-for-peaceful-purpose.html"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>with Luxembourg</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>,</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> and now hopes to </span></span></span></span><a href="http://www.globaltimes.cn/content/1157850.shtml"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>export its Beidou</span></span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> navigational standard to Europe.</span></span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>In an increasingly complex and militarized space sector, cooperation with other countries always entails a risk. Europe must avoid losing agency over sensitive space infrastructure and should be aware of becoming too dependent on foreign space technology, especially from systemic rivals. To prevent such scenarios, Europeans should acknowledge the strategic significance of the space domain, rather than treating it as a </span></span></span><a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2018:0327:FIN"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>user-</span></span></span></span></a><a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2018:0327:FIN"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>driven market</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>. This would pave the way for long-term investment, something the sector has for a long time </span></span></span><a href="https://www.eib.org/attachments/thematic/future_of_european_space_sector_en.pdf"><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>called for</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>. When it comes to outer space, joi<span>nt efforts are the only option for Europe to ensure its lasting independence.</span></span></span></span></span></span></span></span></p> <p><strong>About the authors:</strong></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><strong>Kai von Carnap</strong> is a junior analyst at MERICS. </span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><strong>Selina Morell</strong> is a member of the Asia program at the Swiss foreign policy think tank foraus <span>and holds an MA in European Global Studies from the University of Basel. She spend one semester at the Tsinghua University in Beijing and worked as Junior Officer at the Swiss Embassy in China.</span></span></span></span></span></span></p> <p><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>The authors participated in the fifth annual <a href="https://www.merics.org/en/events/merics-european-china-talent-program-2019"><span>MERICS European China Talent Program</span></a> in May 2019, during which parts of the argumentation presented in this blogpost were developed. </span></span></span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span><span><span>The authors bear sole responsibility for the content. </span></span></span></span></span></strong></p></div> </div> </div> Wed, 18 Sep 2019 11:23:31 +0000 komprakti 10276 at https://www.merics.org Italy’s new government lays the foundation for a more balanced China policy https://www.merics.org/en/blog/italys-new-government-lays-foundation-more-balanced-china-policy <span>Italy’s new government lays the foundation for a more balanced China policy</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Tue, 09/17/2019 - 14:44</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-17T12:00:00Z">2019-09-17</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/lucrezia-poggetti" hreflang="en">Lucrezia Poggetti</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Italy raised eyebrows in Europe and across the Atlantic when it joined China’s Belt and Road Initiative (BRI) in March. Under the new coalition, Italian China policy promises to be better aligned with that of Brussels. If complemented with strategic and value-based considerations, an increased attention to China inherited from the previous government might not be a bad thing, says Lucrezia Poggetti.</span></span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/181011_flaggen%20China%20Italien_123rf_97116174_m.jpg?itok=x_D8vg1j 325w, /sites/default/files/styles/max_650x650/public/2019-09/181011_flaggen%20China%20Italien_123rf_97116174_m.jpg?itok=aPPKwcoR 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/181011_flaggen%20China%20Italien_123rf_97116174_m.jpg?itok=FFvE5H7q 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/181011_flaggen%20China%20Italien_123rf_97116174_m.jpg?itok=dAczM8y2 2463w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/181011_flaggen%20China%20Italien_123rf_97116174_m.jpg?itok=x_D8vg1j" alt="Italy&#039;s new coalition government charts a new course in it&#039;s China policy. Source: bakai / 123rf." title="Italy&#039;s new coalition government charts a new course in it&#039;s China policy. Source: bakai / 123rf." typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Just one day in office after being sworn in on September 4, the new Italian government immediately indicated that it will not continue on the course of all-out cooperation with Beijing initiated by its predecessors. During its </span><a href="http://www.governo.it/it/articolo/consiglio-dei-ministri-n-1/12725"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">very first meeting</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">, the new Conte government, a coalition between the anti-establishment 5 Star Movement (M5S) and the center-left Democratic Party (PD), exercised its “Golden Power” – special powers to examine foreign investment in strategic sectors and critical infrastructure – to scrutinize a number of supply deals for 5G networks, including two that involve Chinese ICT companies Huawei and ZTE. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">By so doing, it showed resolve where the previous government had hesitated. The former Interior Minister and Vice Premier, League’s leader Matteo Salvini, had expressed security concerns, but did not act with his coalition partners to actually approve the use of special powers on 5G deals. The new government has now done this and imposed undisclosed “</span><a href="https://www.reuters.com/article/us-huawei-tech-5g-italy/italy-approves-use-of-special-powers-over-5g-supply-deals-idUSKCN1VQ1YG"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">conditions and requirements</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">” on the contracts. The introduction of balanced assessments in the cooperation with Chinese actors can help Italy pursue economic opportunities without exposing itself to excessive risks. It can also serve Italy well in earning back the credibility it had lost in European capitals and DC.     </span></span></span></p> <p><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Coordination with the EU and the US will be central to Italian China policy </span></strong></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The </span><a href="https://www.repubblica.it/politica/2019/09/04/news/programma_governo_conte_2_bis-235177774/"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">new government </span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">has put Italy’s European and Transatlantic relations back in focus by stating clearly in its program that the Euro-Atlantic alliance and European integration will be pillars on which the pursuit of national interests in foreign policy will be based. For China policy, this means that cooperation with Beijing will be circumscribed by wider European and Transatlantic interests, preventing eccentric moves like the ones that led to Italy signing a Memorandum of Understanding on the Belt &amp; Road Initiative with China in March. Its swift action on 5G is itself indicative of a more cautious approach to China – something that should reassure Brussels and Washington. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">At the same time, some elements of continuity with the previous China-friendly government remain. 5 Star leader and former Economic and Labor Minister Luigi Di Maio, signer of the controversial MoU, is now Foreign Minister. He </span><a href="https://www.esteri.it/mae/it/sala_stampa/archivionotizie/comunicati/il-ministro-di-maio-ha-nominato-capo-di-gabinetto-l-ambasciatore-sequi.html"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">picked the current Ambassador</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> to China, Ettore Sequi – who was also a strong promoter of the MoU signature – as his Head of Cabinet at the Foreign Ministry. Their new roles signal to China that Italy is still interested in cooperation.   </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Nevertheless, the 5 Stars’ new coalition partner might provide some counterbalances. Democratic Party’s Paolo Gentiloni is back with an important role as Economic Commissioner in Brussels. In 2017, he attended the </span><a href="https://www.reuters.com/article/us-china-silkroad-summit-idUSKBN17K0FL"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Belt and Road Forum in Beijing</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> as Prime Minister of a PD-majority government, while at the same time </span><a href="https://www.mise.gov.it/index.php/it/198-notizie-stampa/2037237-calenda-abbiamo-varato-regole-per-mettere-in-sicurezza-gli-asset-strategici-del-paese"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">promoting, along with Germany and France</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">, the creation of the EU framework for foreign investment screening that entered into force this year. His more balanced approach to cooperation with China could inspire the new government to pursue economic opportunities without cozying up to Beijing politically. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">A remarkable step has already been suggested to signal where Italy should stand politically. In an unprecedented move, Italian lawmakers Lia Quartapelle </span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">(Democratic Party, she also heads </span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">the Parliament’s Foreign Affairs Committee) and Maurizio Lupi (Us with Italy, a Christian-democratic group), have </span><a href="https://twitter.com/LiaQuartapelle/status/1171779202145759232"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">proposed a parliamentary hearing</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> to listen to Hong Kong protesters, saying that Italy should stand with Hong Kong and “hold high the banner of freedom and civil rights”. The proposal came as </span><a href="https://www.reuters.com/article/us-hongkong-protests-germany-china/china-summons-german-envoy-to-foreign-ministry-over-hong-kong-activist-idUSKCN1VW1WI"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Beijing summoned the German ambassador</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> to China because of a meeting between Hong Kong activist Joshua Wong and German Foreign Minister Heiko Maas. </span></span></span></p> <p><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Beijing hopes that Italy will keep pursuing a pro-China stance</span></strong></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Beijing has welcomed Di Maio’s and Sequi’s appointments as good news. Chinese Foreign Minister Wang Yi communicated his approval in a congratulatory message delivered to the Italian Foreign Ministry. In hopes that the new government will keep pursuing China-friendly policies, Beijing is being very careful not to upset its new partners. Xinhua, mouthpiece of the ruling Chinese Communist Party (CCP), was quick to </span><a href="https://www.corriere.it/politica/19_settembre_05/di-maio-si-insedia-esteri-dubbi-nuova-cina-scelta-insolita-36a6d054-cfed-11e9-b1b2-ea5000c0ac17.shtml"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">remove a statement</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> depicting Di Maio as an unusual choice for his new role. The deleted comment stated that the 33-year old “never graduated from university, has very limited foreign language skills, and has shown little interest in global affairs in his public life”. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Similarly, the new government’s decision to scrutinize deals involving Huawei and ZTE has not provoked the expected outrage in Beijing. In a balancing act, Chinese foreign ministry spokesperson Geng Shuang limited himself to expressing hope that Italy will grant “</span><a href="http://www.ansa.it/english/news/2019/09/06/china-urges-fair-conditions-for-its-companies-with-5g_4d847d0c-703f-439d-93e4-abee1d0aceb8.html"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">fair conditions</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">” to Chinese businesses. This is somewhat misleading, given that Golden Power legislation applies to all non-EU companies when critical infrastructures are concerned, without discrimination.  </span></span></span></p> <p><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Italy should build on the increased number of government and public debates on China</span></strong></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">One positive legacy that the current government has inherited from the previous coalition is the increased attention to China. However, Italian China policy has so far been governed only by economic interests, with the Economic and Finance ministries taking over large parts of the portfolio on China. Recent moves on 5G and Hong Kong indicate that more strategic and value-based considerations are slowly making their way into debates about China.</span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">In addition, the Italian industry has started to position itself more clearly on China. In April 2019, the General Confederation of Italian Industry (Confindustria), issued a </span><a href="https://www.confindustria.it/wcm/connect/18dffb75-6660-48e6-bbcf-ceda0818e26c/Position+Paper_Cina_12042019_Confindustria.pdf?MOD=AJPERES&amp;CACHEID=ROOTWORKSPACE-18dffb75-6660-48e6-bbcf-ceda0818e26c-mEw3nmF"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">position paper</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> advocating for a more strategic and cohesive EU approach to dealing with economic challenges in the relationship with Beijing. </span><a href="https://www.corrieremarittimo.it/ports/musolino-via-della-seta-opportunita-di-sviluppo-per-la-cina-necessaria-una-politica-europea/"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Port authorities</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> and </span><a href="https://rep.repubblica.it/pwa/generale/2019/08/25/news/miliardi_e_appalti_ma_la_via_della_seta_parla_solo_cinese-234242687/"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">shipowner associations</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> involved in Belt and Road projects are increasingly calling for more reciprocity, as they see the initiative still mostly serving Chinese interests, and for a European approach to BRI.</span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">With increased government and public discussion on China, Italy has an opportunity to devise a more strategic approach to relations with Beijing. Working closely with the European Commission President-elect Ursula von der Leyen, who plans to “</span><a href="https://www.scmp.com/news/china/politics/article/3026809/incoming-eu-chief-ursula-von-der-leyen-vows-define-relations?utm_term=Autofeed&amp;utm_medium=Social&amp;utm_content=article&amp;utm_source=Twitter#Echobox=1568219174"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">define our relations</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> with a more self-assertive China”, would be a very good start.</span></span></span></p></div> </div> </div> Tue, 17 Sep 2019 12:44:08 +0000 komprakti 10271 at https://www.merics.org What shall we do with China? https://www.merics.org/en/blog/what-shall-we-do-china <span>What shall we do with China?</span> <span><span lang="" about="/en/user/646" typeof="schema:Person" property="schema:name" datatype="">jheller</span></span> <span>Fri, 09/13/2019 - 10:31</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-13T12:00:00Z">2019-09-13</time> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p>MERICS Guest Author Miguel Otero-Iglesias</p> <p><strong><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The geopolitical rivalry between the United States and China will be the most defining, and permanent, question in international relations for decades to come. And Europe needs to decide how to position itself.</span></span></span></span></span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=T5uWZuQd 325w, /sites/default/files/styles/max_650x650/public/2019-09/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=mfXkxZZP 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=Zv4JCb-w 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=ki03e_TD 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=T5uWZuQd" alt="Europe needs to find a position in the rivalry between China and the US. Source: ImagineChina." title="Europe needs to find a position in the rivalry between China and the US. Source: ImagineChina." typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Although some believe the situation will improve once Donald Trump and Xi Jinping reach an agreement, or once we have a new American president in the White House next year, the reality is that the most likely scenario is that the geopolitical rivalry (and tension) between the United States and China will be the most defining, and permanent, question in international relations for decades to come. Hence, there is no point in burying the head in the sand and hoping for the storm to pass. We must think strategically and in the long term. </span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Option 1: Join forces with the United States</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The European Union, including Spain as a key member of the richest club in the world, has four options. The first one is to stop messing around and join forces with our American cousins. True, the Americans have a very different mentality to us. They have the death penalty, love firearms, hate social democracy and wash their chicken in chlorine, but there are so many factors that bring us together. We both believe in liberal democracy, with its rights and liberties for the individual, and we should not be naïve: thanks to the NATO alliance, the United States remains our military guarantor.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Option 2: Align with China</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The second option is to look to the future and leave the past behind and understand that China will be the great superpower of the 21<sup>st</sup> century. It is just a question of scale, dynamism and inertia. The same way British leaders begrudgingly conceded in the 19<sup>th</sup> century that the US was unstoppable and the smart thing to do was to jump on the wave and not resist it to maintain the prosperity of  the society, the same needs to do now the EU with the rise of China. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The Chinese economy is already today bigger than the US economy in 2005 (in the midst of the real estate and financial bubble), and according to the projections of Goldman Sachs, it will be almost double the size of the American economy by mid-century. Europe, with aging and less dynamic societies, simply cannot afford to miss out on such a big market.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Option 3: Become divided</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The third option is to divide us and become ever more peripheral and insignificant. Many people think that we are already here. Countries like the UK have decided that they will side with the US, and other countries in the East (Hungary) and the South (Greece and Portugal) are already under the Chinese orbit. Of course, reality is a bit more complex. Within every European society there are groups that remain strongly transatlantic and others that have started to look to the Far East to increase their business. Italy is a good example. While Di Maio, from the Five Star Movement, was keen on signing the Memorandum of Understanding in order to join China’s Belt and Road Initiative, Salvini, from La Lega, was adamant to stick to the military umbrella provided by the US. But the point remains. Divisions are widespread, and this makes us weaker.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Option 4: European Strategic Autonomy</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The fourth option is to develop the so-called European strategic autonomy. In concrete terms, this would mean that the EU would build its own technological (including a European Google) and military (yes, a European army) capacities in order to be fully independent in all areas. Many believe this is impossible (the differences and divisions are just too big) so the default strategy should be option 1. The question is whether option 1 does not push us irremediably toward option 3. It is not just that the weaker countries of the East and the South of the EU club look increasingly to Beijing, a lot of the stronger, exporter countries of the north, including Germany, will continue to want to export to China. Even Switzerland, proudly independent and neutral, has a free trade agreement with Beijing. The Chinese market is just too attractive. </span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Where to go from here?</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>From a Spanish perspective, given its strong Europeanism, the strategy should be as follows: we need to try to avoid option 3 like the pest, and to do that we need to work with France and Germany (while including the smaller countries) in building option 4. At the same time, we cannot close the door of option 1. The United States remains our most important ally. Nevertheless, we need to be smart and keep option 2 alive. Obviously, this needs to be done through critical engagement. If China wants to enter the European market, its needs to open its market to European goods and services. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>What about the Chinese socio-political system? Is that not a threat? As long as the European system delivers (and unfortunately this is now in doubt), the Chinese system will never be attractive. However, to achieve this we need to improve <em>our</em> model, and this brings us unavoidably back to embrace option number 4.</span></span></span></span></span></span></p> <p><span><span><span><em><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Miguel Otero-Iglesias is senior analyst in International Political Economy at Elcano Royal Institute and Professor of Practice at IE School of Global and Public Affairs. The views expressed in this article represent the views of the author and not necessarily those of the Mercator Institute for China Studies.</span></span></span></em></span></span></span></p> <p><span><span><span><em><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The article has originally been published in Spanish by <a href="https://blogs.elconfidencial.com/mercados/tribuna-mercados/2019-08-17/guerra-comercial-china-eeuu-union-europea-eurozona_2180899/">El Confidencial on August 17, 2019</a>.</span></span></span></em></span></span></span></p></div> </div> </div> Fri, 13 Sep 2019 08:31:35 +0000 jheller 10251 at https://www.merics.org A vulnerable Germany finds it hard to say no to China https://www.merics.org/en/blog/vulnerable-germany-finds-it-hard-say-no-china <span>A vulnerable Germany finds it hard to say no to China</span> <span><span lang="" about="/en/user/646" typeof="schema:Person" property="schema:name" datatype="">jheller</span></span> <span>Mon, 09/09/2019 - 13:25</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-09T12:00:00Z">2019-09-09</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/noah-barkin" hreflang="en">Noah Barkin</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><span><span><span><strong>On her trip to China, Chancellor Angela Merkel did little to distance Berlin from Beijing, despite its actions in Hong Kong and Xinjiang. It’s a stance that may alarm her European partners as well as the Americans.</strong></span></span></span></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/190909_Merkel%20Rede%20Wuhan_ImagineChina_bjl15537269.jpg?itok=om4zU07r 325w, /sites/default/files/styles/max_650x650/public/2019-09/190909_Merkel%20Rede%20Wuhan_ImagineChina_bjl15537269.jpg?itok=u_W0WY5g 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/190909_Merkel%20Rede%20Wuhan_ImagineChina_bjl15537269.jpg?itok=YbbyfgK9 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/190909_Merkel%20Rede%20Wuhan_ImagineChina_bjl15537269.jpg?itok=gG8a2YCY 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/190909_Merkel%20Rede%20Wuhan_ImagineChina_bjl15537269.jpg?itok=om4zU07r" alt="German chancellor Angela Merkel gives a speech at the Wuhan University of Science and Technology in Wuhan, Hubei province, on September 7, 2019. Source: ImagineChina." title="German chancellor Angela Merkel gives a speech at the Wuhan University of Science and Technology in Wuhan, Hubei province, on September 7, 2019. Source: ImagineChina." typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span>Near the end of her speech at the Munich Security Conference in February, Chancellor Angela Merkel struck a resigned, almost plaintive note about Germany’s place in a world dominated by a more hostile United States and China.</span></span></span></p> <p><span><span><span>Germans could work day and night to be the best, she told her audience, but they would still come up short against the Americans, with their massive economy and all-powerful dollar, and the rising Chinese, with a population more than 16 times the size of Germany’s.</span></span></span></p> <p><span><span><span>“The odds look pretty bad for us,” Merkel concluded in a remarkable admission of frailty.</span></span></span></p> <p><span><span><span>That moment in Munich is instructive when trying to understand Merkel’s trip to China last week, her twelfth in 14 years as chancellor and perhaps the most challenging of all her visits, amid violent protests in Hong Kong, an escalating trade war between Washington and Beijing, and nascent European attempts to push back against the master plans of Chinese President Xi Jinping.</span></span></span></p> <p><span><span><span><strong>Constant criticism from Trump</strong></span></span></span></p> <p><span><span><span>Germany is feeling especially vulnerable these days. Its economy, held up for the past decade as the growth locomotive of Europe, is heading into recession, buffeted by the decline in international trade and investment, Brexit, and a struggle by its industrial champions to adapt to a digital future.</span></span></span></p> <p><span><span><span>The United States, guarantor of Germany’s security since World War II, has turned into its biggest critic. Hardly a day goes by when US President Donald Trump or one of his allies doesn’t lob a verbal grenade at Germany, for its lack of defense spending, its outsized trade surplus, or its addiction to Russian gas.</span></span></span></p> <p><span><span><span>Against this gloomy backdrop, China looms with open arms. It believes in climate change. It pays lip service to the idea of a free, multilateral trading system. Despite recent signs of weakness, it remains a vast, growing market for German firms. And it doesn’t engage in Germany-bashing. On the contrary: at a time when the Trump administration is gearing up for a new Cold War, Beijing is doing all in its power to lure Europe’s largest economy into its camp.</span></span></span></p> <p><span><span><span>But there is a price for doing business with China, and Merkel paid it during her two-day visit to Beijing and Wuhan. Not once did she utter the word “Xinjiang,” the western Chinese province where more than a million members of the Muslim minority have been detained in reeducation camps. And not once did she criticize Beijing for its handling of the protests in Hong Kong, limiting herself to calls for dialogue and de-escalation.</span></span></span></p> <p><span><span><span><strong>Open for business</strong></span></span></span></p> <p><span><span><span>At her news conference with Chinese Premier Li Keqiang, Merkel sounded almost apologetic about her government’s moves to shield German companies from the opportunistic embrace of state-backed Chinese rivals, reassuring her hosts that the German market remained open for acquisitive Chinese firms. And she praised Beijing for granting German companies like Allianz, BASF, and BMW opportunities in China that have been denied to other Western firms—moves that skeptics dismiss as symbolic gifts designed to soften up the Germans.</span></span></span></p> <p><span><span><span>Merkel’s trip came after a year in which Europe, in the words of French President Emmanuel Macron, overcame its “naivety” vis-à-vis China, erecting its own barriers to Chinese investments in its critical infrastructure and declaring the rising Asian superpower to be a “strategic rival.”</span></span></span></p> <p><span><span><span>In January, the Federation of German Industries, an influential business lobby, issued a toughly worded paper that questioned whether China would ever fully open up its market to foreign investment and urged European countries to work closely together, and with like-minded partners including the United States, to coordinate their response.</span></span></span></p> <p><span><span><span><strong>European shift</strong></span></span></span></p> <p><span><span><span>Spooked by China’s economic ambitions, a new European Commission is expected to explore changes to the bloc’s industrial, competition and procurement policies when it takes over later this year.</span></span></span></p> <p><span><span><span>Yet there was little evidence of this European shift during Merkel’s visit. And her partners, in Paris, Brussels, and other capitals, may be alarmed by its “back to business” tone. </span></span></span></p> <p><span><span><span>Merkel travelled with a large delegation of German CEOs, the most prominent of whom was Siemens boss Joe Kaeser, who once referred to China’s controversial Belt and Road Initiative as “the new WTO.” Also along for the ride was Volkswagen’s chairman, Herbert Diess, who only a few months ago caused outrage when he denied knowing anything about the mass detentions in Xinjiang, where VW has a plant, despite months of front-page stories about the plight of the Uighurs.</span></span></span></p> <p><span><span><span>The Trump administration, which has been piling pressure on Germany and other European countries to follow its lead and decouple from China, will also be alarmed. A transatlantic split <span><span><a href="https://berlinpolicyjournal.com/the-huawei-conundrum/"><span>over the inclusion of Chinese telecommunications supplier Huawei in next-generation 5G networks</span></a></span></span> is looming. And that may provide just a taste of the tensions to come. </span></span></span></p> <p><span><span><span>At a time when Washington is eyeing new export controls against China, Germany is doubling down on research collaboration with the Chinese and pressing Beijing to clinch an elusive investment agreement with Europe in time for an EU-China summit that Merkel will host in the eastern city of Leipzig in September 2020. If the deal comes together, two months before the US presidential election, it would mark the death knell of Trump’s clumsy attempt to pry the Europeans away from China.</span></span></span></p> <p><span><span><span><strong>Antithesis to German Values</strong></span></span></span></p> <p><span><span><span>The Americans must see this. On the same day that Merkel was meeting with Li in Beijing, US Defense Secretary Mark Esper was in London warning Europe to be wary of China.</span></span></span></p> <p><span><span><span>“The more dependent a country becomes on Chinese investment and trade, the more susceptible they are to coercion and retribution when they act outside of Beijing’s wishes,” Esper told the Royal United Services Institute, a think tank.</span></span></span></p> <p><span><span><span>Merkel is not naive. As Hong Kong pro-democracy activist Joshua Wong pointed out in an open letter to the German leader before her trip, she grew up under authoritarian rule in communist East Germany. She sees what is happening in China, from the rollout of a Social Credit System grounded in big-data surveillance, to Beijing’s attempts to chip away at democratic freedoms in Hong Kong and its crackdown in Xinjiang.</span></span></span></p> <p><span><span><span>All this is antithetical to German values. And yet, unable to count on the support of the United States, Merkel seems to feel she has no choice but to cozy up to Beijing.</span></span></span></p> <p><em><strong>This article was first published at the <a href="https://berlinpolicyjournal.com/a-vulnerable-germany-finds-it-hard-to-say-no-to-china/">Berlin Policy Journal website</a> on September 9, 2019.</strong></em></p> <p><em><strong><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Noah Barkin</span></span> </span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">is a Berlin-based journalist </span></span></span>who has written about European political and economic themes for Reuters and other publications for more than two decades. He is a</strong><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><strong> Visiting Academic Fellow at MERICS.</strong> </span></span></span></em></p> <p><em><strong>The views expressed in this article represent the views of the author and not necessarily those of the Mercator Institute for China Studies.</strong></em></p></div> </div> </div> Mon, 09 Sep 2019 11:25:32 +0000 jheller 10236 at https://www.merics.org Merkel’s China challenge – signaling distance and conditional engagement https://www.merics.org/en/blog/merkels-china-challenge-signaling-distance-and-conditional-engagement <span>Merkel’s China challenge – signaling distance and conditional engagement</span> <span><span lang="" about="/en/user/646" typeof="schema:Person" property="schema:name" datatype="">jheller</span></span> <span>Wed, 09/04/2019 - 16:25</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-05T12:00:00Z">2019-09-05</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/mikko-huotari" hreflang="en">Mikko Huotari</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong>The German Chancellor’s visit must signal Beijing that Europe is serious and united in its newly critical approach to China and show Washington that there are less destructive ways to deal with differences, says Mikko Huotari.</strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/190905_Merkel%20mit%20Li%20in%20China_Mai_2018_Bundesbildstelle.jpg?itok=dE7t7cKW 325w, /sites/default/files/styles/max_650x650/public/2019-09/190905_Merkel%20mit%20Li%20in%20China_Mai_2018_Bundesbildstelle.jpg?itok=u57OWkxy 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/190905_Merkel%20mit%20Li%20in%20China_Mai_2018_Bundesbildstelle.jpg?itok=-h1Nz3m- 1300w, /sites/default/files/styles/max_2600x2600/public/2019-09/190905_Merkel%20mit%20Li%20in%20China_Mai_2018_Bundesbildstelle.jpg?itok=50ysv4SX 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/190905_Merkel%20mit%20Li%20in%20China_Mai_2018_Bundesbildstelle.jpg?itok=dE7t7cKW" alt="Chancellor Merkel and Chinese Premier Li Keqiang in Beijing in May 2018. Source: Bundesarchiv, Photo 00405590 / Guido Bergmann." title="Chancellor Merkel and Chinese Premier Li Keqiang in Beijing in May 2018. Source: Bundesarchiv, Photo 00405590 / Guido Bergmann." typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">With the US and China locked in a destructive spiral of muscle-flexing over trade and technology, German Chancellor Angela Merkel’s visit to China, which starts today, will be a litmus test for whether the European Union stands any hope of tackling the West’s differences with China in a more goals-oriented way. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Any sign during Ms Merkel’s two-day trip that Beijing can be better persuaded than bullied into dealing with its lack of economic reciprocity and discrimination of foreign companies would be good for the EU and the world economy. One win would be movement in the tough talks about an EU-China investment agreement, which Merkel would like to have signed next year when Germany hosts a summit between all 27 EU member states and China. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><strong>Europe’s weakness demands a smarter play</strong></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Since announcing she would not run again for Chancellor, Ms Merkel has variously been suspected of having lost her touch or even of being a lame-duck head of government. But the complexities and dangers the EU faces in triangulating the positions of the US and China demand the kind of canny operator Ms Merkel has often proved herself to be – one that can engage one side without prompting the other to dis-engage, and vice versa. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The EU and the US might be at odds over how to deal with China’s economic and other policies, but not over the need to get Beijing to change them. This spring, the EU Commission used its new strategic outlook for EU-China relations to describe Beijing as a strategic competitor and systemic rival for the first time. In this spirit, the French government is pushing the EU to set conditions for Chinese companies bidding for public contracts, a demand Berlin might yet support, if only to create leverage in ongoing EU-China negotiations.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">But the EU is no geopolitical superpower like the US. No European leader would risk the kind of confrontation Washington is seeking with Beijing – and Germany would not want to fully back Washington for the reasonable fear of being isolated in the event of an about-face by the Trump administration. Merkel knows Europe’s weakness demands a smarter play. </span></span></span></span></span></p> <p><strong>Open and clear communication with China is needed</strong> </p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Playing it smart can’t mean business-as-usual for Merkel – even with a massive German business delegation accompanying her to China. The Hong Kong protests and Beijing’s strong-arming of multinational companies bring into focus the myriad ways in which Beijing exerts pressure on its citizens and businesses. The increasing systemic tensions between China and liberal democracies demand that Merkel reinforce Europe’s coordinated stance that Beijing’s approach to Hong Kong’s fundamental freedoms and autonomy is a test case for the EU’s willingness to treat China as a partner.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Berlin has been central to shaping the EU’s new, less naïve China policy – and Ms Merkel needs to show that even economic expediency will not see Germany backsliding. For now, Merkel’s government is pursuing a wobbly policy on the role of Huawei in the 5G telecoms rollout and shying away from the clear political decision that would be necessary to align European forces. Berlin kicking the can down the road on 5G threatens Europe’s late awakening to the importance of technological sovereignty and consensus-building on infrastructure security. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The ongoing European debate about how to better deal with China’s state-led economy and unfair competition needs to be underpinned by concrete and speedy steps by the EU at home – together with loud and clear demands for equal treatment of state and private (foreign) firms or “competitive neutrality” in China. Merkel needs to counter vague rhetorical commitments by China’s leaders to multilateralism with specific requests to reform the World Trade Organization to tackle distortions caused by China’s industrial subsidies.</span></span></span></span></span></p> <p><strong>Engagement is possible - if it aligns with European interests</strong></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Constructively delineating the differences between the EU and China should serve Merkel as a foundation to pursue clear-eyed engagement in a few, well-defined areas if they are aligned with long-term pan-European interests. With the backing of of EU member states, these might include research and innovation cooperation in smart manufacturing, standard-setting for the industrial internet and autonomous driving, and what could be called a strategic sustainability agenda focusing on climate and environmental technologies. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">It’s time for Germany to match its rhetoric about the need to “Europeanize” approaches to China with concrete actions. The EU’s ambition of forging a forceful, coordinated and competitive China policy can only be fulfilled if Berlin demonstrates its willingness to act as its guarantor while continuing to test China-policy alignment with more reliable partners in the US. Moderate disengagement from China also needs to be among the cards for European governments to play. A realist, nuanced and incremental European approach to China would then have the chance of proving itself a credible alternative to Donald Trump’s gunboat economic diplomacy.</span></span></span></span></span></p> <p><strong><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">This article was first published by the <a href="https://euobserver.com/opinion/145822">EUobserver on September 5, 2019</a>.</span></span></span></span></span></strong></p></div> </div> </div> Wed, 04 Sep 2019 14:25:45 +0000 jheller 10221 at https://www.merics.org Values as a quality seal: Germany should be more active in shaping cooperation with China https://www.merics.org/en/blog/values-quality-seal-germany-should-be-more-active-shaping-cooperation-china <span>Values as a quality seal: Germany should be more active in shaping cooperation with China </span> <span><span lang="" about="/en/user/646" typeof="schema:Person" property="schema:name" datatype="">jheller</span></span> <span>Thu, 09/05/2019 - 15:29</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-09-04T12:00:00Z">2019-09-04</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/kai-von-carnap" hreflang="en">Kai von Carnap</a>, <a href="/en/team/kristin-shi-kupfer" hreflang="en">Kristin Shi-Kupfer</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span><span><span><span>In areas such as data protection and ethics AI, Europe should use debates with China to present itself as a role model, argue Kai von Carnap and Kristin Shi-Kupfer. </span></span></span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-09/180124_Made_in_China_romsvetnik_via_123rf.jpg?itok=Sim0atmB 325w, /sites/default/files/styles/max_650x650/public/2019-09/180124_Made_in_China_romsvetnik_via_123rf.jpg?itok=w0Bnl1xi 650w, /sites/default/files/styles/max_1300x1300/public/2019-09/180124_Made_in_China_romsvetnik_via_123rf.jpg?itok=GpIzYRwS 848w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-09/180124_Made_in_China_romsvetnik_via_123rf.jpg?itok=Sim0atmB" alt="&quot;Made in Europe&quot; should be a synonym for the successful integration of values. Source: 123rf." title="“Made in Europe” should be a synonym for the successful integration of values. Source: 123rf." typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span>When Margarete Bause, a German Green politician and human rights activist, recently had her visa application for a trip to China rejected, the entire Bundestag committee she was due to travel with cancelled their trip.</span></span></span></span></p> <p><span><span><span><span>It is rare to see such a clear stand taken in German policy toward China. Yet this attitude should be standard, because this is the only way to establish a clear framework for future cooperation between Berlin and Beijing.</span></span></span></span></p> <p><span><span><span><span>The cause of the recent friction is, at heart, the difference between the two value systems. China has seen it as an unjustified intrusion into its domestic affairs. Cases like this will likely become more frequent in the future. Representatives of the German government and parliamentarians should continue to express their views on human rights – and China will continue to be touchy about the subject.</span></span></span></span></p> <p><span><span><span><span><strong>Debates on digital ethics will reveal political and cultural differences with China </strong></span></span></span></span></p> <p><span><span><span><span>There should certainly not be any concessions. The Chinese leadership is increasingly inclined to see foreign players who compromise as weak and spineless. Tacit acceptance also entails the risk of experiencing human rights violations - at least indirectly - for oneself. Mass surveillance in the autonomous region of Xinjiang in northwest China shows what digital technology, at its worst, can do.</span></span></span></span></p> <p><span><span><span><span>There is a good reason why in Germany and Europe the development of future technologies is increasingly linked with ethical questions. The EU is pushing ahead with requirements for the development of trustworthy Artificial Intelligence (AI) that respects privacy, creates transparency and prevents discrimination. It also wants to create guidelines for cyber security certification in order to better protect personal data.  </span></span></span></span></p> <p><span><span><span><span>These debates will continue to reveal political and cultural differences with China, with very different implications. Take, for example, the question of how AI should behave in a moral dilemma. Should an autonomous vehicle protect passengers or pedestrians in an accident? Who should decide which criteria an autonomous vehicle uses? Could this decision be based on the evaluation of individuals under the social credit rating system? Automobile manufacturers in China and Germany have to ask themselves whether they want to limit themselves to the domestic market or offer both variants and thereby risk a public outcry.</span></span></span></span></p> <p><span><span><span><span>Another example is the protection of private data. Earlier this year, Cambridge Analytics was blamed for the failure of a free voting system in the West because it had created and sold psychographic profiles based on social media data. Similar practices in China cause less outcry - often because the media is not allowed to report on such cases.</span></span></span></span></p> <p><span><span><span><span><strong>Chinese government is under increased pressure to take action on data security</strong></span></span></span></span></p> <p><span><span><span><span>This does not mean that data security is not an issue in the People's Republic. On the contrary, the Chinese government is under increasing pressure to take action in this sphere. It is China's privately-owned companies that have put the protection of private data on the agenda because Beijing has to date placed almost all responsibility for the matter on them. With many cases of personal information being obtained by fraudulent means, there is a growing need within the Chinese population to protect their personal information. It is true that, according to surveys, many Chinese see video cameras as fundamentally positive, but at the same time just as many fear the psychological consequences of surveillance. Around 80 percent of Chinese citizens say in the annual official report on the state of the Internet that they have already been a victim of data leaks.</span></span></span></span></p> <p><span><span><span><span><strong>Many Chinese are concerned about tech ethics – the EU can contribute to the debate</strong></span></span></span></span></p> <p><span><span><span><span>Many Chinese are concerned not only about their own interests but also about ethical principles. A large part of the population reacted with horror to the news that one of their compatriots was the first scientist to help parents have genetically manipulated babies modified with the CRISPR gene editing method. What has been missing in China so far is the translation of these discussions into political action.</span></span></span></span></p> <p><span><span><span><span>This is exactly what the EU is good at – publicly discussing values and incorporating the results into the design and certification of technology. Europe should use debates with China to present itself as a role model and cooperation partner in areas such as data protection and ethics in AI. “Made in Europe” should be a synonym for the successful integration of values.</span></span></span></span></p> <p><span><span><span><span>German companies should take their Made-in-Germany reputation for quality into the digital world and actively advertise with it in China. Why not bring competent and committed ethics or human rights experts on board? There are plenty of opportunities – the Chancellor's next trip to China starts on Thursday. </span></span></span></span></p> <p><strong><span><span><span><span>This is a slightly shortened version of an article that first appeared in the German newspaper <a href="https://background.tagesspiegel.de/deutschland-sollte-kooperationen-mit-china-aktiver-gestalten">Tagesspiegel on August 26, 2019</a>.</span></span></span></span></strong></p></div> </div> </div> Thu, 05 Sep 2019 13:29:26 +0000 jheller 10231 at https://www.merics.org Palpable misconceptions and possible over-reactions https://www.merics.org/en/blog/palpable-misconceptions-and-possible-over-reactions <span>Palpable misconceptions and possible over-reactions</span> <span><span lang="" about="/en/user/286" typeof="schema:Person" property="schema:name" datatype="">h.seidl</span></span> <span>Mon, 08/26/2019 - 13:10</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-08-27T12:00:00Z">2019-08-27</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/frank-n-pieke" hreflang="en">Frank N. Pieke</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span><span><span><span><span><span>A perilous cycle of misunderstanding and disappointment with the West means Beijing could react to world events in panic for the first time since 1989, says Frank Pieke. To ease tensions, Europe needs a more nuanced China policy.</span></span></span></span></span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-08/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=_KyoWCQF 325w, /sites/default/files/styles/max_650x650/public/2019-08/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=DG_NCB6O 650w, /sites/default/files/styles/max_1300x1300/public/2019-08/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=bK5-eb-B 1300w, /sites/default/files/styles/max_2600x2600/public/2019-08/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=H_z6Zh2X 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-08/190826_US_Chinese_EU_Flags_Imagine_China_20190408_305101.jpg?itok=_KyoWCQF" alt="US, European Union and Chinese flags" title="As it does not aspire to be a superpower, Europe can deal with Beijing with more nuance than the US. Image by ImagineChina" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span><span><span>Relations between China and the West are fraught to the point of being frightening. The United States is aggressive on a number of fronts (of which trade is only one), and Chinese anger about the broader motivation for this is so large there’s a danger Beijing could over-react. It might, for example, feel the need for a show-of-strength towards Taiwan – one that could easily spin out of control and lead to confrontation, especially if the Chinese Communist Party feels that the current protests in Hong Kong cannot be resolved. To offer Beijing new perspectives and to better serve its own interests, Europe needs a more nuanced China policy.</span></span></span></span></span></span></p> <p><span><span><span><span><span><span><span>Europe would do well to realize that profound misconceptions are at the heart of the stand-off. For one, </span></span></span><span><span><span>Chinese naiveté about the United States and Europe was long surprisingly high. Beijing firmly believed that China’s expansion through Belt and Road investments, military spending, and greater engagement in international organizations would benefit not just China but the world at large. Beijing expected other governments to understand that – and it certainly did not expect the reaction it is currently eliciting from Western powers.</span></span></span></span></span></span></span></p> <p><strong><span><span><span><span><span><span><span>Beijing thought the West would accept a much bigger Chinese role in the world</span></span></span></span></span></span></span></strong></p> <p>For our part, too many people in the West view China as a totalitarian system that is controlled by the people at the top, in which there is no freedom of expression, where the interests of the leadership fully determine what happens throughout society and the political system. In reality, the system is much less centralized and totalitarian than we think. It is highly fragmented - different factions, ministries, localities and regions have competing interests. They fight and try to undermine each other and push their own interests forward.  Even President Xi Jinping has many enemies that make him anything but all-powerful. On their part, the Chinese have enormously underestimated the violent nature and intolerance to genuine competition of Western civilization – and its power to make that felt. For sure, China is not a cuddly panda, it is striving for global power in a real and hard-nosed manner. But it never factored in that the West would not accept another country or culture trying to put itself on (at least) an equal footing - especially a non-democratic one.</p> <p><span><span><span><span><span>Beijing thought the West would accept a much bigger Chinese role in the world – and now it is waking up to the fact it won’t. Worse still, it is becoming aware that a growing number of Westerners believe we are entering a clash of civilizations. The US, in particular, is prepared for this fundamental clash for superpower status – and in a very Manichean way: there is good and evil, and one of the two shall win, so it had better be the good side, the American one. </span></span></span></span></span></p> <p><span><span><span><span><span>As this has encouraged the Chinese to adopt a similar worldview, there now emerges a growing perception on both sides of the globe that China and the West are entering a contest that can only produce one winner. That is extremely dangerous. The Chinese are already creating a rhetoric of unity out of 5,000 years of history that in reality was extremely diverse and disparate. China believes that it will always be a unit because it has always been one. Although this is not true, but it’s becoming an ever-stronger and politically useful conviction.</span></span></span></span></span></p> <p><strong>Europe can deal with China with more nuance than the US</strong></p> <p>China’s diplomacy is no longer driven by the assumption that people are fully rational. Beijing thought it made sense for the European Union to unite more as this would increase their power and benefit each country individually – and it lost faith when member states failed to deliver. Beijing is now having a similarly hard time with the US, as it thinks Washington is acting irrationally under President Donald Trump. China’s leaders cannot deal with a maverick president, because they do not know how mavericks think. They are observing and trying to figure out what to do, without as yet reaching any firm conclusions.We face the danger of China reacting to events in panic for the first time since Tian’anmen in 1989.  It is this - and not so much the possibility of American military aggression – that is so frightening. Trade sanctions are hurting China, and an outspoken independence candidate could win Taiwan’s general election in January – even more likely now that the events in Hong Kong have shown the Taiwanese that Beijing’s formula of “one country two system” is a fallacy. What if Xi, doubly under pressure, threatened Taiwan? Washington would certainly jump at the chance this would give to forge an alliance of democratic countries against China.</p> <p><span><span><span><span><span>Europe needs to disentangle itself from this spiral of aggression driven by binary, winner-takes-all perspectives. As it does not aspire to be a superpower, Europe can deal with Beijing with more nuance than the US – China is indeed a threat in some areas but remains a positive force in others. This is not an economic or a military challenge - it is a political one. How does Europe decide what to share and withhold? It needs to answer that question - not isolate China. </span></span></span></span></span></p> <p><strong><span><span><span><span><span>This article was first published by our partner publication<a href="https://thediplomat.com/2019/08/how-misconceptions-brought-china-west-relations-to-the-breaking-point/"> "The Diplomat" on August 22, 2019.</a></span></span></span></span></span></strong></p></div> </div> </div> Mon, 26 Aug 2019 11:10:02 +0000 h.seidl 10161 at https://www.merics.org Hong Kong: What China's tough approach means for the economy https://www.merics.org/en/blog/hong-kong-what-chinas-tough-approach-means-economy <span>Hong Kong: What China&#039;s tough approach means for the economy </span> <span><span lang="" about="/en/user/286" typeof="schema:Person" property="schema:name" datatype="">h.seidl</span></span> <span>Fri, 08/23/2019 - 13:21</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-08-23T12:00:00Z">2019-08-23</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/kristin-shi-kupfer" hreflang="en">Kristin Shi-Kupfer</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>The protests in Hong Kong that have been going on for weeks and the tough attitude of the city’s government, which is remotely controlled from Beijing, now make it unmistakably clear to everyone that the coexistence of totalitarian politics and a liberal economy does not work with China, says Kristin Shi-Kupfer.</span></span></span></span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-08/190823_HongKong_Protesters_in_front_of_LegCo_via123rf.jpg?itok=pb9Lg1h8 325w, /sites/default/files/styles/max_650x650/public/2019-08/190823_HongKong_Protesters_in_front_of_LegCo_via123rf.jpg?itok=-g3B_1nI 650w, /sites/default/files/styles/max_1300x1300/public/2019-08/190823_HongKong_Protesters_in_front_of_LegCo_via123rf.jpg?itok=hCKb_vqI 1300w, /sites/default/files/styles/max_2600x2600/public/2019-08/190823_HongKong_Protesters_in_front_of_LegCo_via123rf.jpg?itok=Lu6eysl9 2508w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-08/190823_HongKong_Protesters_in_front_of_LegCo_via123rf.jpg?itok=pb9Lg1h8" alt=" June 12, 2019: Anti-Extradition Bill Protest in Hong Kong. Protestors are surrounding HK Legislative Council building." title="Image by paulwongkwan via 123rf" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>"One country, two systems" – right from the beginning this magic formula sounded too simple to work. Its unifying magic lay in the fact that everyone involved - from China's CP to the international business community and democracy activists – believed, or wanted to believe, that a stable economic environment would in the end be sufficient to guarantee stability. They were all wrong. The protests in Hong Kong that have been going on for weeks and the tough attitude of the city’s government, which is remotely controlled from Beijing, now make it unmistakably clear to everyone that the coexistence of totalitarian politics and a liberal economy does not work with China. In this respect, Hong Kong is an important lesson for all of us. </span></span></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>It was China's hard-headed pragmatist Deng Xiaoping who came up with the idea of using the formula "One country, two systems" – originally developed to solve the Taiwan question – for Hong Kong: The former British Crown Colony would be able to maintain its capitalist system even within China, while the People's Republic would remain committed to the socialist system. Today it is clear that each side had a different understanding of what this meant from the outset.</span></span></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>Britain's government under Margret Thatcher believed that by signing the 1984 Joint Declaration it was doing the best it could for its former overseas territory. London had only leased it for 99 years. Some likely also hoped that, with growing prosperity over the years, China itself would become more liberal and open. The people of Hong Kong who could not or did not want to leave their city set their hopes on the inertia of existing structures and on the well-trained civil service. The Chinese government, on the other hand, seems to have believed that the inhabitants would be satisfied with the status quo and with the opening up of economic opportunities. And the international business community expected the new Special Administrative Zone to provide them with new business opportunities along with the usual security. </span></span></span></span></span></p> <p><strong><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>Hong Kong still ranks as the freest economic area in the world</span></span></span></span></span></strong></p> <p>The lowest common denominator for all of them has always been Hong Kong's comprehensive, independent and well-functioning legal system. Rules and treaties counted for something in Hong Kong, corruption was low, the free movement of goods, data and persons protected - for foreign companies as well as for Chinese companies raising international capital in Hong Kong. Hong Kong leads the rankings as the freest economic area in the world – that is so far still the case.</p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>The creeping erosion began when the state-capitalist system of the People's Republic found itself in a crisis and critics there began to talk about the other, free-liberal system in Hong Kong - imitating it in part with workers’ protests and experiments with the separation of powers. This was the moment when Beijing began to intervene increasingly in Hong Kong's autonomy and legal system. </span></span></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>In 2003, when it attempted to introduce a national security law in Hong Kong, the Chinese leadership had to bow to street pressure. In the years that followed, China's CP therefore changed its strategy and worked more covertly. Its influence was only felt by the politically engaged in Hong Kong's media, universities and schools. </span></span></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>When the Occupy movement first emerged in 2014, driven by the hope of universal, free elections or even independence for Hong Kong, the Chinese government once again managed to master the situation by waiting it out, making threats, imposing massive restrictions on freedom and through a continuing siege of parts of the city. It also quickly won over nearly every company, both domestic and foreign, to its side. </span></span></span></span></span></p> <p>By 2015 Beijing was no longer even bothering to pretend. Critical booksellers and publishers in Hong Kong "disappeared" - allegedly because they were involved in financial crimes. The kidnappings were an open breach of the law and a well-calculated demonstration of power by the CCP. At this point, however, the Chinese government was very careful that its actions only marginally affected the economic interests of business. Nevertheless, the impression was now growing that Hong Kong's judicial system would, in the long term, be eliminated. </p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>The current escalation can be traced back to Beijing's attempt to whip through two amendments to the law for fast-track extradition. This would require the Hong Kong judiciary to extradite to Beijing every "criminal" wanted in the People's Republic - including critical booksellers, for example - with almost no powers of review of its own. </span></span></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>This was the last straw for many Hong Kong residents. The protests became ever angrier as it became clear that peaceful means and moderate demands would elicit no concessions from the Hong Kong government. For the first time since the return of the former crown colony, influential foreign and local companies appealed to the common sense of Carrie Lam, the leader of the Special Administrative Zone and China-loyalist. </span></span></span></span></span></p> <p><strong><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>Beijing seems keen to avoid pictures of rolling tanks</span></span></span></span></span></strong></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>To date, with support from Beijing, she has shown no signs of giving in. In the meantime, China’s choice of words is becoming increasingly martial: there is talk of "violent unrest" or even a subversive "color revolution", instigated with the conspiracy of the West. In so doing, the Chinese leadership is slowly but steadily approaching the political vocabulary of 1989, only slightly altered. Back then the rhetoric was used to justify the People's Liberation Army’s tough intervention, using machine guns and tanks against the demonstrators on Tiananmen Square.</span></span></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>This time Beijing seems keen to avoid pictures of rolling tanks as far as possible. With good reasons: the economic significance of Hong Kong, particularly as an international financial centre, carries great weight in the People's Republic too. And politically, Hong Kong continues to be of importance as a laboratory for the experiment with the two systems. If this experiment is clearly seen to fail as a result of military violence, that would have devastating consequences for Beijing. The whole world would then look to Taiwan, which China regards as a renegade province. It is possible that China's influence on the island would be lost for good as a result of a violent intervention in Hong Kong.</span></span></span></span></span></p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>Last but not least, the sight of tanks rolling along Hong Kong's streets would change the geopolitical balance of power in Southeast Asia for the long term. Neighboring countries there as well as in South Asia, which are already alarmed by China's economic rise, would be all the more resolute in seeking protection from major powers such as the USA or, like Vietnam, even Russia. A Cold War of "many against one" would then be a conceivable scenario.</span></span></span></span></span></p> <p>Nevertheless, a demonstration of power from Beijing is not completely out of the question. Up to now, the Chinese government has always stuck to the rule that nothing – but absolutely nothing – should put the authority of the communist party in question. Despite all the reservations in Hong Kong, Beijing is therefore attempting to undermine the existing legal system so that the CCP alone has the say. This is another reason why Beijing’s rulers are finding the to and fro between open threats and covert provocation – mostly likely in cooperation with the Hong Kong underworld – increasingly uncontrollable. The 1st October marks the 70th anniversary of the founding of the People's Republic. Beijing wants to create peace in Hong Kong by then - and would be prepared to pay almost any price for it.</p> <p><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>And another current reason speaks for a tough crackdown: From Beijing's point of view it would be a sign of weakness if it lost face by giving in to the people of Hong Kong. A weakness that the communist leadership cannot and does not want to afford in view of the escalating trade conflict with the USA. </span></span></span></span></span></p> <p>This tricky situation makes it increasingly difficult to work out China's political calculations. One thing is certain: The belief that legal security could guarantee a lasting stable coexistence between totalitarian politics and a liberal economy has been deeply shaken. The resignation of the Cathy Pacific CEO over pressure of staff involvement into the protests, as well as the four big accounting firms KPMG, Deloitte, PwC, EY publicly distancing themselves from the protests, might be just the beginning. Foreign companies must now be asking themselves the question whether they want to go on as before. There is clearly a danger that Beijing could one day put them out of action too.</p> <p><strong><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>This article was <a href="https://www.manager-magazin.de/politik/weltwirtschaft/hongkong-china-koennte-mit-gewalt-auf-proteste-antworten-peking-harter-kurs-a-1281540.html">first published in German by "Manager Magazin" on August 12, 2019.</a></span></span></span></span></span></strong></p></div> </div> </div> Fri, 23 Aug 2019 11:21:52 +0000 h.seidl 10156 at https://www.merics.org European governments must take responsibility for their companies in Xinjiang https://www.merics.org/en/blog/european-governments-must-take-responsibility-their-companies-xinjiang <span>European governments must take responsibility for their companies in Xinjiang</span> <span><span lang="" about="/en/user/286" typeof="schema:Person" property="schema:name" datatype="">h.seidl</span></span> <span>Wed, 08/21/2019 - 15:05</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-08-21T12:00:00Z">2019-08-21</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/benjamin-haas" hreflang="en">Benjamin Haas</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>Dozens of European companies have business ties to Xinjiang, where according to UN estimates Chinese authorities have detained more than a million Uighurs and other Muslim minorities. European governments need to take a more active interest in their companies’ operations in the region, says MERICS Visiting Policy Fellow Benjamin Haas.</span></span></span></span></span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-08/190821_Xiniang_Harvest_bjl13705123_3_2.jpg?itok=lR2XAeXh 325w, /sites/default/files/styles/max_650x650/public/2019-08/190821_Xiniang_Harvest_bjl13705123_3_2.jpg?itok=q-ij_xJo 650w, /sites/default/files/styles/max_1300x1300/public/2019-08/190821_Xiniang_Harvest_bjl13705123_3_2.jpg?itok=N4IkfORO 1200w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-08/190821_Xiniang_Harvest_bjl13705123_3_2.jpg?itok=lR2XAeXh" alt="Tomatoes are dried in the sun in Bayingolin Mongol Autonomous Prefecture, southwest China&#039;s Xinjiang." title="Many European companies have business ties to Xinjiang, not only in the agricultural sector. (Tomato plant in the southwest of Xinjiang, Image by Imagine China)" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>Almost weekly there are new reports coming out of Xinjiang about the system of extrajudicial detention camps holding as many as 1.5 million Uighurs and other Muslim minorities. In the face of mounting evidence of widespread human rights abuses, European governments have remained fairly restrained in their response, issuing a joint letter to the UN human rights chief and occasional </span></span></span><a href="https://www.reuters.com/article/us-china-usa-rights/us-germany-slam-china-at-un-security-council-over-xinjiang-diplomats-idUSKCN1TX2YZ"><span><span><span><span>statements of condemnation</span></span></span></span></a><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>.</span></span></span></span></span></span></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>While foreign diplomats rarely have unfettered access to the region, if they are allowed to visit at all, European companies have extensive connections throughout Xinjiang. Major multinationals have built relationships with local governments, staff on the ground, large infrastructure projects and some even sponsor charity work.</span></span></span></span></span></span></p> <p><strong><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>Many large European companies have business ties to Xinjiang</span></span></span></span></span></span></strong></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>I looked at 150 large European companies - firms that appear on the EuroStoxx 50 index and the Global Fortune 500 - and found about half had some business ties to Xinjiang. But this sampling is far from complete, and in the course of my research I found more than a dozen other European firms with Xinjiang connections. Trade with Germany alone was nearly EUR 130 million in the first half of 2018, according to the </span></span></span><a href="http://www.xjdrc.gov.cn/info/10504/22011.htm"><span><span><span><span>most recent statistics</span></span></span></span></a><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span> available. Trade </span></span></span><a href="http://www.chinadaily.com.cn/a/201902/15/WS5c665f51a3106c65c34e9956.html"><span><span><span><span>doubled last year</span></span></span></span></a><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span> between the region and Spain, the Czech Republic, Slovakia, Hungary and Bulgaria.</span></span></span></span></span></span></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>Most of the economic ties between Europe and Xinjiang are straightforward. Companies have shops in the region, sell cars, buy fruit or build plants. But there are several companies that warrant more scrutiny, mostly dealing with technology and the extensive surveillance state. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>Siemens, the German industrial conglomerate, </span></span></span><a href="http://w1.siemens.com.cn/news_en/news_articles_en/6780.aspx"><span><span><span><span>collaborates</span></span></span></span></a><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span> on advanced technologies in automation, digitization, and networking with China Electronic Technology Group, a company that has developed a </span></span></span><a href="https://www.hrw.org/report/2019/05/01/chinas-algorithms-repression/reverse-engineering-xinjiang-police-mass-surveillance"><span><span><span><span>policing app used in Xinjiang</span></span></span></span></a><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span> that Human Rights Watch says violates “internationally guaranteed rights to privacy”.  </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>UBS, the Swiss bank, is one of the </span></span></span><a href="https://us.hikvision.com/en/about/hikvision-global"><span><span><span><span>top ten investors</span></span></span></span></a><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span> in Hikvision, a Chinese company that has built multiple government surveillance systems in Xinjiang. </span></span></span></span></span></span></p> <p><strong><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>There is little information on how products of tech joint ventures are being used</span></span></span></span></span></span></strong></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>Spanish telecommunications company Telefonica has a joint venture with China Unicom that uses big data to track individuals based on a host of criteria such as gender and age. While the company says the data is anonymous, an internal presentation showed unique ID numbers associated with individuals, and all mobile phone numbers in China are tied to national ID cards. The software has already been deployed in the region, according to a separate public company presentation.</span></span></span></span></span></span></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>There is little public information about how the products of these joint ventures are being used. The European Union and national parliaments should take an active interest in how their companies operate abroad, especially in places like Xinjiang where rights abuses are rampant. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>The European Union should also immediately ban the export of surveillance technologies to China. For years, China has courted foreign firms to bring investment and business to Xinjiang, part of its broader campaign to “develop the West”. Some companies have only opened businesses in the region after ultimatums from Chinese authorities, according to interviews with executives. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>This shows European companies have the connections and sway to push for change. While many executives are deeply reluctant to take any action that could potentially harm their business, China is not eager for another economic fight amid the trade war raging with the US.</span></span></span></span></span></span></p> <p><strong><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>Executives need to scrutinize their companies’ operations in Xinjiang</span></span></span></span></span></span></strong></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>Many companies are unaware that their </span></span></span><a href="https://www.wsj.com/articles/western-companies-get-tangled-in-chinas-muslim-clampdown-11558017472"><span><span><span><span>supply chains</span></span></span></span></a><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span> at least in part rely on Xinjiang, as a recent report by the Wall Street Journal showed when it found suppliers for Adidas and H&amp;M were using yarn produced by a Chinese company that uses labor from the camps. Clothing and food brands are particularly vulnerable, but companies in all sectors should not wait for others to present them with uncomfortable information. Executives need to scrutinize their companies’ Chinese operations to ensure products are made in ethical ways. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>Other companies need to work to protect their minority employees, using their relationships with local officials to make plain the personnel are essential to their operations continuing to operate. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>Indeed, the situation is not all gloom and doom. At least one large German industrial firm has warned local authorities in Xinjiang against sending their employees to the camps and has provided prayer rooms for Muslim workers. Bosch, a German engineering firm, helps the region’s desperately underfunded schools. One program requires teachers to be fluent in a</span></span></span><a href="https://china.ahk.de/fileadmin/AHK_China/News/More_than_a_Market_2017_Brochure_EN.PDF"><span><span><span><span> local minority language</span></span></span></span></a><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span> - even as Beijing discourages the use of Uighur in favor of Mandarin.</span></span></span></span></span></span></p> <p><span><span><span><span lang="EN" xml:lang="EN" xml:lang="EN"><span><span>While these steps are commendable, they do not go far enough. It is time for European companies and the governments that regulate them to stand up for European values. Statements of condemnation are no longer enough. </span></span></span></span></span></span></p> <p><strong><span><span><span>Benjamin Haas is a journalist who has covered China for nearly a decade. He is currently a Visiting Policy Fellow at MERICS. </span></span></span></strong></p> <p><span><span><strong><span>The views expressed in this article represent the views of the author and not necessarily those of the Mercator Institute for China Studies.</span></strong></span></span></p></div> </div> </div> Wed, 21 Aug 2019 13:05:12 +0000 h.seidl 10136 at https://www.merics.org Australia and New Zealand recalibrate their China policies https://www.merics.org/en/blog/australia-and-new-zealand-recalibrate-their-china-policies <span>Australia and New Zealand recalibrate their China policies</span> <span><span lang="" about="/en/user/646" typeof="schema:Person" property="schema:name" datatype="">jheller</span></span> <span>Wed, 08/07/2019 - 15:21</span> <div class="layout layout--onecol"> <div class="layout__region layout__region--content"> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field--item"><time datetime="2019-08-08T12:00:00Z">2019-08-08</time> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p>MERICS Guest Author Patrick Köllner</p> <p><strong><span><span>In 2017, Australia readjusted its China policy to a more critical and firm position. 2018 New Zealand followed suit, but fear of deteriorating relations has since led Wellington to change to a more conciliatory course. </span></span><span><span>The different sizes of Australia and New Zealand are an important factor in their differing policy outcomes.</span></span></strong></p></div> <div class="field field--name-field-main-image field--type-image field--label-hidden field--item"> <img srcset="/sites/default/files/styles/max_325x325/public/2019-08/190808_Australia_New%20Zealand_116671569_m.jpg?itok=NBoIRbhQ 325w, /sites/default/files/styles/max_650x650/public/2019-08/190808_Australia_New%20Zealand_116671569_m.jpg?itok=QatxRJYK 650w, /sites/default/files/styles/max_1300x1300/public/2019-08/190808_Australia_New%20Zealand_116671569_m.jpg?itok=W_F6dGTR 1300w, /sites/default/files/styles/max_2600x2600/public/2019-08/190808_Australia_New%20Zealand_116671569_m.jpg?itok=a-M6cvo7 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-08/190808_Australia_New%20Zealand_116671569_m.jpg?itok=NBoIRbhQ" alt="Australia as well as New Zealand have made adjustments to their China policy since 2017. Source: 123rf." title="Australia as well as New Zealand have made adjustments to their China policy since 2017. Source: 123rf." typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>The PRC’s intensifying authoritarian practices, assertive behavior in the South China Sea and state-led industrial-technological advances are all fueling concerns that have prompted several longstanding ‘Western’ democracies to rethink their China policies. In the United States, the Trump administration has decided on confrontation. Debates have become particularly heated on how to deal with China’s telecommunications giant Huawei in the transition to fifth generation (5G) mobile networks. The security and competition-related arguments conflict with one another and so far each country’s still largely tentative answers differ.   </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Developments in Australia and New Zealand deserve attention when assessing policy options as both countries have adjusted their China policies in the last two years, with differing outcomes.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Vital economic relationships </span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Australia and New Zealand both benefit enormously from economic exchanges with China. Bulk commodity exports are central to both economic relationships; iron ore and coal from Australia and New Zealand’s agricultural and forestry products. Roughly a quarter of Australia’s total trade consists of trade with China in goods and services. For New Zealand, China accounts for one fifth of total trade. The number of students and tourists arriving in both countries from China has also increased substantially in recent years, bringing more than purely economic links. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Nonetheless, it is worth remembering that both countries have simpler economic relations with China than either Germany or the United States. Foreign direct investment, questions of technological leadership, and intellectual property rights play a much more limited role.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Commonalities and differences</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Given Australia and New Zealand’s many commonalities, their military alliance, and the close integration of their economies, one might expect the two countries to speak the same language when it comes to China. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>However, they have different positions in the international system and different security relations with the United States. Australia is a middle power and a close US ally in the Indo-Pacific, a status that confers more options and more obligations. New Zealand is a small power, and hence more dependent on the goodwill of big powers. New Zealand has also long sought to pursue an ‘independent’ foreign policy with the goal of avoiding being drawn into big power conflicts.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Australia resets its China policy</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Australia reset its China policy during 2017 and 2018, by implementing changes in both domestic and external affairs. Scandals over dubious donations to Australian politicians from businessmen of Chinese descent, as well as other attempts to influence public affairs, led Australia’s federal government in Canberra to enact legislation in 2018 making foreign interference in domestic politics a crime. Foreign lobbyists now have to register. Foreign donations were outlawed – bringing Australian law in line with other liberal democracies such as the US, Canada and the UK - and the disclosure threshold for political donations was lowered. In 2017, parliament blocked a planned extradition treaty with China. In 201<span>8</span>, the federal government responded to US concerns by excluding Huawei and ZTE from the planned roll out of 5G in Australia.</span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>In matters of defense and diplomacy, more robust policies are being pursued. Senior cabinet ministers publicly criticized PRC naval activities in the South China Sea in 2017. New state-of-the art submarines and frigates feature prominently in Australia’s large-scale defense procurement plans. Canberra has also significantly stepped up economic aid and diplomatic efforts towards the South Pacific to counter China’s increasing diplomatic and economic presence in the region, and the risk of a possible future PRC military presence. Australia has agreed to set up a joint US-Australian naval base on Manus Island, in Papua New Guinea, taking pre-emptive action against any risk of future Chinese bases. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>The PRC government reacted to Canberra’s new, firmer tone by freezing high-level political exchanges until late 2018. Australian coal shipments to China have faced custom clearance delays this year, which exporters and analysts suspect are politically motivated.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>New Zealand’s shifting China policy  </span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>New Zealand’s long-standing approach has been to avoid criticism of China so as not to endanger economic ties. It changed course when a new center-left minority coalition took power in October 2017, replacing a three-term conservative government.  The coalition consisted of Labour and the New Zealand First supported by the Greens. The foreign affairs and defense portfolios went to the small, moderately populist NZ First party. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Policy towards China began to change notably in 2018. First came a high-profile government paper on defense that took a critical tone towards China. Soon after, the new government decided to invest substantially in military hardware: the biggest ticket items were four state-of-the-art Boeing P-8A Poseidon maritime patrol aircraft.</span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Foreign Minister Winston Peters also announced a significant increase in NZ’s economic aid to, and diplomatic presence in, the South Pacific. Peters implored the US to step up its efforts in the South Pacific, even drawing a parallel with US engagement there in World War II. Moreover, he called into question his country’s participation in China’s Belt and Road Initiative (BRI). By late 2018, the government had enacted new foreign investment regulations and blocked Huawei’s participation in a first local 5G project. Finally, the New Zealand intelligence agency GCSB named China as a source of cyber-attacks, something they had previously refrained from saying.</span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>However, China’s pushback has led the New Zealand government to focus more on damage control in the months since spring. The PRC has voiced its displeasure through various channels. The conservative National Party opposition in New Zealand chimed in, blaming the government for the deterioration in relations. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Prime Minister Jacinda Ardern’s first official visit to China – which had been postponed for a long time due to ‘scheduling problems’ – finally took place in April this year. Ardern emphasized that China is a valued partner and pledged there would be no discrimination against Chinese companies operating in New Zealand. Her visit happened a few weeks before the second BRI Forum in Beijing, which trade minister David Parker took part in, returning with proposals to cooperate with China in the BRI framework. Both governments demonstrated their shared interest in putting bilateral relations back on a more even keel. </span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Although diplomatic efforts have helped calm things down, New Zealand-China relations are unlikely to regain their former luster. The state-run Chinese media’s clumsy attempts to drive a wedge between Australia and New Zealand contribute to this. More importantly, the government and the broader public in New Zealand no longer see China only through the lens of economic opportunities. Arguably this is a healthy development. As one long-term steward of New Zealand’s relations with China points out, ‘We have not changed, China has.’ </span></span></span></span></span></span></p> <p><strong><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Patrick Köllner is vice president of the German Institute of Global and Area Studies (GIGA), director of the GIGA Institute of Asian Studies, and professor of political science at the University of Hamburg. In 2018 and 2019 he published briefing papers on <a href="https://www.giga-hamburg.de/en/publications/giga-focus/asia">Australia and New Zealand’s shifting China policy</a>.</span></span></span></span></span></span></strong></p> <p><strong>The views expressed in this article represent the views of the author and not necessarily those of the Mercator Institute for China Studies.</strong></p></div> </div> </div> Wed, 07 Aug 2019 13:21:04 +0000 jheller 9701 at https://www.merics.org