MERICS Blog - European Voices on China https://www.merics.org/en/blog/rss?field_topics_target_id=All en Protests along the BRI: China’s prestige project meets growing resistance https://www.merics.org/en/blog/protests-along-bri-chinas-prestige-project-meets-growing-resistance <span>Protests along the BRI: China’s prestige project meets growing resistance</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Tue, 12/10/2019 - 10:54</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="2019-12-10T12:00:00Z">2019-12-10</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/oyuna-baldakova" hreflang="en">Oyuna Baldakova</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-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Anti-Chinese protests in Russia and Kazakhstan show that</span></span></span> <span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Beijing’s Belt and Road projects can be undone by the popular resistance and local politics of their host countries.</span></span></span> <span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Government support is not enough, </span></span>says Oyuna Baldakova.</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/2019-12/191210_Laike_Baikal_pbu783933_03.jpg?itok=z-9TXTku 325w, /sites/default/files/styles/max_650x650/public/2019-12/191210_Laike_Baikal_pbu783933_03.jpg?itok=LO3XDvl_ 650w, /sites/default/files/styles/max_1300x1300/public/2019-12/191210_Laike_Baikal_pbu783933_03.jpg?itok=9wNPa4FU 1300w, /sites/default/files/styles/max_2600x2600/public/2019-12/191210_Laike_Baikal_pbu783933_03.jpg?itok=3uI9ooJ2 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-12/191210_Laike_Baikal_pbu783933_03.jpg?itok=z-9TXTku" alt="Lake Baikal, Siberia" title="A public outcry led a court to shelve construction of a Chinese-financed water-bottling plant on Lake Baikal in Siberia. 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 lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Powerful anti-Chinese protests in Russia and Kazakhstan show that</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> popular prejudice and local politics can endanger Chinese projects even in countries whose governments regard Beijing as a crucial partner. China is learning the hard way that the greater its influence abroad and the more numerous its foreign initiatives, the more carefully it has to tread. </span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Russian President Vladimir Putin and his Chinese counterpart Xi Jinping declared Russia and China would form a “comprehensive strategic partnership of coordination for a new era” when they met in Moscow in June ­– only three months after a public outcry led a court to shelve construction of a Chinese-financed water-bottling plant on Lake Baikal in Siberia. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The Irkutsk court disagreed with previous findings that drawing water from the world’s largest freshwater resource would have no major environmental impact. This was noteworthy as t</span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>he plant at Kultuk would not have been the first one on Lake Baikal -</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> some </span><a href="https://www.scmp.com/news/china/diplomacy/article/3029729/russia-acts-protect-lake-baikal-amid-anger-moscow-concerns?fbclid=IwAR1P3ZLND_3WqHxC6IXF-JM_HhLpsmjHGX32OXPN-822rPdzpPmm7XfwwQw"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">environmentalists</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> did not even feature it in their Top Ten of regional environmental dangers.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The judge’s ruling that the AkvaSib plant was illegal cheered a population in which anti-Chinese sentiment is rife. Grievances range from local ones about an influx of </span><a href="https://www.nytimes.com/2019/05/02/world/europe/chinese-lake-baikal-tourism-russia.html"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Chinese tourists</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> and the mushrooming of illegally built, Chinese-owned lakeside hotels to wider regional worries about sizeable – and at times illegal – </span><a href="https://www.nytimes.com/2019/07/25/world/europe/russia-china-siberia-logging.html"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">logging of timber</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> for export to China and the large-scale </span><a href="https://www.ft.com/content/700a9450-1b26-11e5-8201-cbdb03d71480"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">lease of farmlands</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> in the Russian Far East to Chinese farmers.</span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Anti-Chinese sentiments are often instrumentalized </span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Historically conditioned Sinophobia feeds such attitudes, but so too does local mistrust of all levels of often intransparent and uncommunicative Russian government. When it combines with worries about China’s influence, potent dramatizations can result – for example, fears about corrupt officials “selling off” land or other assets to Chinese investors. Local elites too can instrumentalize such narratives to score points against local or national political rivals.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">One of the alleged sponsors of a massive </span><a href="http://spasi-baikal.ru/de/"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">online campaign</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> against the AkvaSib project was often said to have been the Russian oligarch </span><a href="https://meduza.io/en/feature/2019/05/17/xenophobia-masquerading-as-environmentalism"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Oleg Deripaska</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">. He owns one of the existing </span><a href="https://www.forbes.ru/milliardery/372889-voda-ot-deripaski-struktury-milliardera-zapuskayut-novyy-biznes-na-baykale"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">water-bottling plant</span></a><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">s</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> on Lake Baikal and has an interest in keeping the number of companies shipping water to China as low as possible. In September’s elections for Irkutsk city council, a number of candidates unabashedly used anti-Chinese rhetoric to attract voters.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Anti-Chinese sentiments are often instrumentalized not to score points against Beijing, but to send a message to the host countries’ rulers. With weak judiciaries and almost no independent media, populations are susceptible to strong political messages that spread via messaging apps and other unregulated social media channels.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Rumors spread by social media in Kazakhstan unleashed a wave of anti-Chinese rallies throughout its major cities in September – just before President Kassym-Jomart Tokayev traveled to Beijing to upgrade the Sino-Kazakh from an “all-round strategic partnership” to a “permanent comprehensive strategic” one. Popular mobilization was often attributed to </span><a href="https://www.economist.com/asia/2019/09/26/kazakhstan-promises-to-allow-public-protests-just-not-yet"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Mukhtar Ablyazov</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">, the exiled leader of the banned party Democratic Choice of Kazakhstan. </span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Local shows of dissent are a </span></strong><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>big problem for Xi Jinping</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">The protests started in Zhanaozen, an oil town in western Kazakhstan with high unemployment that witnessed the </span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>bloody repression of protests in </span></span><a href="https://www.bbc.com/news/world-asia-16221566"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">2011</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">. </span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Rumors spread that China planned to relocate factories to Kazakhstan. Stories of the “</span><a href="https://astanatimes.com/2019/09/kazakh-president-officials-deny-rumours-china-will-transfer-55-old-factories-to-kazakhstan/"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">55 Chinese factories</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">” came with warnings about potential Chinese expansion and an influx of Chinese workers, the mounting debt owed China, and the mass detention of co-ethnic Kazakhs in Xinjiang.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The episodes centered on Kultuk and Zhanaozen stand for a string of other anti-Chinese protests in countries whose governments declare themselves major BRI-supporters. Local shows of dissent are embarrassing for the leaders of these host countries. But they are a </span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>bigger and urgent problem for Xi, as they show how difficult</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> it has become for Beijing to avoid or control any unintended consequences related to its multitude of BRI projects.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">A growing number of China’s firms are “going out” to tackle projects abroad even though their ability to undertake a thorough analysis of complex realities on the ground and engage with local populations is limited. There is a real risk that more projects could be derailed for reasons other than the projects being ill advised. And this could feed a vicious circle as the negative effects of the “projects gone bad” reinforce popular anti-Chinese sentiments. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">China cannot control a host country’s local politics or the commercial interests of local oligarchs. But it does have considerable sway over Chinese companies venturing abroad. It is in Beijing’s interests to make these outward investments more transparent and to take tighter control over the projects being tackled by Chinese companies “going out”.</span></span></span></span></span></p> <p><span><span><span><span><strong><em><span><span><span>Oyuna Baldakova is a Visiting Academic Fellow at MERICS from October 2019 until January 2020. She is currently pursuing a PhD at the Graduate School of East Asian Studies at Freie Universität Berlin.<strong> </strong></span></span></span></em></strong></span></span></span></span></p> <p><span><span><span><span><strong><em><span><span><span>The views expressed in this article are those of the author and not necessarily reflect those of the Mercator Institute for China Studies.</span></span></span></em></strong></span></span></span></span></p></div> </div> </div> Tue, 10 Dec 2019 09:54:06 +0000 komprakti 10661 at https://www.merics.org Hong Kong: What’s next? https://www.merics.org/en/blog/hong-kong-whats-next <span>Hong Kong: What’s next?</span> <span><span lang="" about="/en/user/286" typeof="schema:Person" property="schema:name" datatype="">h.seidl</span></span> <span>Thu, 12/05/2019 - 14:45</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="2019-12-06T12:00:00Z">2019-12-06</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 lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">For months now Hong Kong has gone through a rollercoaster of escalating protest, police action and government intransigence. The impression is left of a government that is out of touch with the population, unable or unwilling to represent Hong Kong’s interests against China and, most of all, without a game plan.</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/2019-12/191031_HK_Journalist_runs_away_from_tear_gas_Lan_Kwai_Fong_Katherine_Cheng_via_Flickr_CC%20BY-ND%202.0.jpg?itok=5tobR4Eg 325w, /sites/default/files/styles/max_650x650/public/2019-12/191031_HK_Journalist_runs_away_from_tear_gas_Lan_Kwai_Fong_Katherine_Cheng_via_Flickr_CC%20BY-ND%202.0.jpg?itok=KgrVq1gM 650w, /sites/default/files/styles/max_1300x1300/public/2019-12/191031_HK_Journalist_runs_away_from_tear_gas_Lan_Kwai_Fong_Katherine_Cheng_via_Flickr_CC%20BY-ND%202.0.jpg?itok=dnao-DUO 1300w, /sites/default/files/styles/max_2600x2600/public/2019-12/191031_HK_Journalist_runs_away_from_tear_gas_Lan_Kwai_Fong_Katherine_Cheng_via_Flickr_CC%20BY-ND%202.0.jpg?itok=As5vhcx6 1920w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-12/191031_HK_Journalist_runs_away_from_tear_gas_Lan_Kwai_Fong_Katherine_Cheng_via_Flickr_CC%20BY-ND%202.0.jpg?itok=5tobR4Eg" alt="A journalist runs away from tear gas at Lan Kwai Fong, Hong Kong " title="Image by Katherine Cheng via Flickr (CC BY-ND 2.0)" 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-GB" xml:lang="EN-GB" xml:lang="EN-GB">In June, the administration of this Chinese “Special Economic Zone” and former British colony proposed a new bill for the extradition of people in Hong Kong to the People’s Republic of China. The bill triggered the growing apprehensions and fears of the Chinese government, whose mounting influence and interference in Hong Kong’s society, economy and government increasingly violated Hong Kong’s special status under the principle of “One Country, Two Systems”. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">In November, protestors’ violent occupation of several university campuses was met with an equally violent police response, escalating the anti-government movement to a level unheard of in Hong Kong since its retrocession to China in 1997. The occupations had happened in response to the government’s stubborn refusal to accept any further demands of the movement after it had withdrawn the extradition bill in September. Although some of the demands are indeed difficult simply to concede (universal suffrage, the resignation of Chief Executive Carrie Lam), even the very moderate and reasonable demands for </span><span lang="NL" xml:lang="NL" xml:lang="NL">retraction of the official characterization of the protests as “riots” or </span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">an independent inquiry into police brutality have been brushed aside as well.</span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">Beijing has little interest in a genuine understanding of Hong Kong</span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">The impression is left of a government that is out of touch with the population, unable or unwilling to represent Hong Kong’s interests against China and, most of all, without a game plan. Clearly, strategy is decided not in Hong Kong itself, but in Beijing. Although the Chinese authorities quite wisely have thus far refrained from direct interference, they seem to have little interest in a genuine understanding of Hong Kong or finding ways to allay the apprehensions about China among large sections of the population.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">Despite the escalation of violence over the last few months, Hong Kong remains in a stalemate. Neither the protestors nor the government or Beijing have a strategy that might lead to a solution. However, the district council elections on 24 November in which anti-establishment candidates won a landslide victory could be a turning point, especially after the US president signed two bills regarding Hong Kong into law just two days later. The first requires an annual review of Hong Kong’s human rights record in order for the territory to keep its separate status and thus remain excluded from US trade sanctions against China. The second bill bans the sale of crowd-control munitions like tear gas and rubber bullets to the Hong Kong police.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">The election result and the new legislation in the US have given the anti-establishment movement new hope, putting further pressure on to the Hong Kong government and Beijing. Although this might break through the current stalemate, it also raised the stakes enormously.</span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">Hong Kong’s newly elected district councillors could use their position to form a broad coalition to pressure the government to make genuine concessions. As councillors, they now have a legitimate platform as representatives of the vast majority of the population, giving the movement the leadership and public face that it lacked until now. However, they should be quick and decisive and not wait for a possible flareup of spontaneous demonstrations. Even more seriously, there is the danger of radicalization among some of the young participants in the demonstrations and university occupations of recent weeks. If terrorist attacks were to happen, Beijing will most likely conclude that there is no other option than direct intervention.</span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">New US legislation makes Hong Kong events part of the US-Chinese conflict</span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">The new US legislation is a distinctly two-edged sword. It increases the pressure on the government and Beijing, showing that the world is watching and no longer prepared to stand idly by. Hong Kong might be Chinese sovereign territory, but China is still beholden to the terms of the Joint Declaration with the UK in 1984 that guarantees the special status and separate system of Hong Kong. However, the two new US laws now also openly make the events in Hong Kong part of the conflict between China and the United States. As just one piece on the chessboard, Hong Kong might in the future find itself sacrificed for a higher aim if that suits either Beijing or Washington. </span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">Of course, as first a colony and then a special administrative zone, Hong Kong’s future never fully was in the hands of the people of Hong Kong anyway. However, recent developments have made the territory’s destiny even more contingent on a great power game over which it has no control. European governments could have a role to play here. Where the US seeks confrontation in stark human rights terms, Europe should continue to insist on the relevance of the 1984 Joint Declaration and focus on the continued relevance of the “One Country, Two Systems” formula. It would be a huge step forward to restore Hong Kong’s trust if China agrees to abide by this formula also after 2047 when the fifty-year term of the Joint Declaration ends.</span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">The protesters and the Hong Kong government must find ways to sort out differences</span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB">The only way for Hong Kong to decide its own future is for the Hong Kong government and protest movement to find ways to sort out their differences. The government must accept the movement’s most immediate demands (an independent inquiry in police brutality, no longer branding the protests as riots) and begin to act as a real government of Hong Kong rather than Beijing’s proxy. The latter will require genuine elections, also of the Chief Executive, and a timetable that needs to be negotiated. The movement in turn requires real and united leadership, must accept any genuine concessions from the government, and avoid any further dangerous escalation. All of this requires great wisdom and courage, and fast.  </span></span></span></span></span></p></div> </div> </div> Thu, 05 Dec 2019 13:45:29 +0000 h.seidl 10646 at https://www.merics.org Europe’s backlash against Huawei has arrived https://www.merics.org/en/blog/europes-backlash-against-huawei-has-arrived <span>Europe’s backlash against Huawei has arrived</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Fri, 11/29/2019 - 14:06</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="2019-11-29T12:00:00Z">2019-11-29</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><strong><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Resistance to Chinese technology is growing in Germany—and the ripple effects could reach across the continent.</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/2019-11/190129_Mobile_screen_5G_ImagineChina_bjl6613453.jpg?itok=lkTmFQMj 325w, /sites/default/files/styles/max_650x650/public/2019-11/190129_Mobile_screen_5G_ImagineChina_bjl6613453.jpg?itok=kSb82QMx 650w, /sites/default/files/styles/max_1300x1300/public/2019-11/190129_Mobile_screen_5G_ImagineChina_bjl6613453.jpg?itok=FoDG_VyC 1300w, /sites/default/files/styles/max_2600x2600/public/2019-11/190129_Mobile_screen_5G_ImagineChina_bjl6613453.jpg?itok=CWVR5bQR 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-11/190129_Mobile_screen_5G_ImagineChina_bjl6613453.jpg?itok=lkTmFQMj" alt="Image by ImagineChina " title="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 lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The eastern German city of Leipzig was supposed to be the site where Angela Merkel crowned her fourth and final term as chancellor with a foreign-policy coup: a comprehensive investment agreement with China sealed in the presence of President Xi Jinping and fellow EU leaders. Instead it could be remembered as the place where Merkel’s China policy was thrown irreversibly off course by rebels in her party who refused to accept her plans to allow the Chinese telecommunications group Huawei to build Germany’s fifth-generation mobile network.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">It is not clear yet whether the revolt—led by former Environment Minister Norbert Röttgen and supported by a cross-party grouping of lawmakers and cabinet officials as well as Germany’s intelligence agencies—will succeed. But there is a chance that it will. And if it does, we could look back on Leipzig as an inflection point in Germany’s—and Europe’s—relationship with China.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">That is because an exclusion of Huawei in Germany could have a ripple effect across Europe, encouraging other countries to follow suit. Excluding Huawei would also upset the delicate balance Merkel has been trying to strike between Washington and Beijing, Germany’s two biggest trading partners outside of Europe. And it would probably trigger a forceful response from Beijing that could undermine Germany’s already faltering economy and hit some of its biggest firms, inexorably pushing the country, and Europe, down a more confrontational path with Beijing.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">This is not how Merkel wants to end her 16-year reign as chancellor. After a year in which the European Union, encouraged by Germany, began to push back more aggressively against China, introducing a new mechanism to screen foreign investments and declaring Beijing a “systemic rival,” 2020 was supposed to be the year in which Berlin and Brussels reaped the fruits of their tougher stance. Under acute pressure from US President Donald Trump’s trade war, the reasoning went, Xi would be compelled to find common ground with Europe. It was a chance for the EU to wring concessions from China on a range of issues, including long-stalled negotiations on an investment agreement that would open up the Chinese market to European firms.</span></span></span></span></p> <p><strong><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">China's appetite for compromise seems limited</span></span></span></span></strong></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">In recent months, Merkel signaled that she wanted to sign off on the investment deal at a summit in Leipzig next September attended by Xi and fellow European leaders. But she is not off to a good start. With a year to go until the U.S. election, it is Trump, not Xi, who is under pressure to deliver his promised trade deal with China. Beijing has hunkered down, refusing to budge on the big structural changes that Trump’s negotiators want most. This has shifted the dynamic with Europe. China’s appetite for compromise, which seemed ample last April when it bowed to EU pressure and made a series of reform pledges—on technology transfers, subsidies, trade rules and investments—suddenly seems limited. Officials in Brussels say Beijing is refusing to take meaningful steps in negotiations on the investment agreement. </span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">If anything, Beijing has grown more defensive and combative with Europe in recent months amid new revelations about the mass detention of Muslims in China’s western region of Xinjiang and escalating protests in Hong Kong. In recent weeks, China has threatened Sweden with “consequences” for awarding a freedom of speech prize to Gui Minhai, a Chinese-born Swedish publisher imprisoned in China for printing books critical of the government. And a former employee of the British Consulate in Hong Kong has accused Chinese police of torture. Stories like this have added wind to the sails of those in Germany and elsewhere in Europe who are pressing for a ban of Huawei, a company they say is under the thumb of the Chinese Communist Party and an active enabler of its dystopian surveillance state, including in Xinjiang. (Huawei denies both.)</span></span></span></span></p> <p><strong>An increasingly charged debate over 5G in Germany</strong></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Relations between Berlin and Beijing have grown more tense in recent months. The Chinese leadership has still not forgiven German Foreign Minister Heiko Maas for meeting with the Hong Kong pro-democracy activist Joshua Wong in Berlin in September and has canceled a series of bilateral meetings. German officials say they are still waiting for China to propose a date for government consultations—Berlin and Beijing’s flagship annual meeting. The Germans want to hold this in the first quarter of next year, before an EU-China summit in Beijing, for which there is also no firm date. “Serious damage has been done to the bilateral relationship in many areas,” the Chinese ambassador to Germany said in a speech in Bonn this week.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The tensions are building against the backdrop of an increasingly charged German debate over 5G. After Peter Altmaier, Merkel’s economy minister, made a clumsy attempt to defend Huawei in the aftermath of the weekend rebellion—equating the risks of spying from China with those emanating from an “unreliable” United States—he came under attack from Trump’s envoy to Germany.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">While Huawei critics argue that the risks of entrusting critical 5G infrastructure to a company that under Chinese law is obliged to collaborate with the country’s intelligence apparatus, Merkel and Altmaier have highlighted the economic risks of excluding it.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Germany’s carmakers and big industrial heavyweights, from Siemens to the chemicals group BASF, rely heavily on the Chinese market. They are desperate to prevent  a backlash from China that seems certain to result from an exclusion of Huawei.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">And they have good reason to worry: During a visit to Beijing in September, Merkel was warned by Chinese leaders that an exclusion of the Shenzhen-based group from the German 5G network would have serious consequences for bilateral economic ties, according to German officials. It would certainly doom the chances of clinching Merkel’s cherished investment agreement. And her Leipzig summit next year, meant to be the high point of Germany’s EU presidency and a crowning achievement before she leaves the political stage, would probably go up in smoke.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">That could explain why, weeks after Merkel’s Beijing visit, German security criteria for 5G were watered down, with her approval, opening the door to Huawei. This softening triggered the rebellion last weekend, one of the biggest challenges to Merkel’s authority in recent years.</span></span></span></span></p> <p><strong>Growing resistance against Merkel's Huawei-friendly stance</strong></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The lead rebel Röttgen, who ran afoul of Merkel when he was environment minister and was sacked by her in 2012, is now head of the foreign affairs committee in the German parliament and a prominent critic of her government’s strategic inertia. Last month, he assembled a group of conservative allies to fight back against Merkel’s Huawei-friendly stance. Lawmakers from the Social Democrats, Merkel’s coalition partners, soon joined in, followed by Maas, the foreign minister. When Merkel’s hand-picked successor, Annegret Kramp-Karrenbauer, who is also defense minister and leader of the Christian Democratic Union, questioned the wisdom of including Chinese suppliers in early November, the battle was officially on.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">At their party conference in Leipzig, Merkel’s Christian Democrats backed a motion that would give the lower house of parliament a veto on the security criteria for 5G suppliers like Huawei. The text ensures the criteria will include language that rules out suppliers that might be subject to the influence of a foreign country. “This is not about Huawei,” Röttgen said. “It’s about the fact that Huawei is a company that can’t escape the influence of the Communist Party leadership, whether it wants to or not.”</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">It may take months to know for sure whether his rebellion will succeed. But Huawei’s prospects in Germany, and in Europe, are looking shakier by the day.</span></span></span></span></p> <p><em><strong>This article was first published in <a href="https://foreignpolicy.com/2019/11/27/europe-huawei-backlash-merkel-germany-summit/">"Foreign Policy"</a> on November 27, 2019.</strong></em></p> <p><em><strong>Noah Barkin is a Berlin-based journalist who has written about European political and economic themes for Reuters and other publications for more than two decades. He is a</strong><strong> Visiting Academic Fellow at MERICS.</strong></em></p> <p><em><strong>The views expressed in this article are those of the author and not necessarily reflect those of the Mercator Institute for China Studies.</strong></em></p></div> </div> </div> Fri, 29 Nov 2019 13:06:15 +0000 komprakti 10621 at https://www.merics.org Pricey currency exchange https://www.merics.org/en/blog/pricey-currency-exchange-0 <span>Pricey currency exchange </span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Fri, 11/22/2019 - 09:06</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="2019-11-22T12:00:00Z">2019-11-22</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/maximilian-karnfelt" hreflang="en">Maximilian Kärnfelt</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 lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>Beijing can’t allow the yuan to keep falling, says Maximilian Kärnfelt. A weaker currency is good for exporters, but bad for other parts of the economy. </span></span></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/2019-11/19102_Dollar_Yuan_123rf_kenishirotie_26158728_m.jpg?itok=U7gVhWmm 325w, /sites/default/files/styles/max_650x650/public/2019-11/19102_Dollar_Yuan_123rf_kenishirotie_26158728_m.jpg?itok=Ot2pTmJ4 650w, /sites/default/files/styles/max_1300x1300/public/2019-11/19102_Dollar_Yuan_123rf_kenishirotie_26158728_m.jpg?itok=8OpafsCr 1300w, /sites/default/files/styles/max_2600x2600/public/2019-11/19102_Dollar_Yuan_123rf_kenishirotie_26158728_m.jpg?itok=YErzoL7T 2507w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-11/19102_Dollar_Yuan_123rf_kenishirotie_26158728_m.jpg?itok=U7gVhWmm" alt="Pricey currency exchange " title="Image via 123rf by Kenishirotie 26158728" 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>Since the US-China trade war started in 2018, Beijing has thumbed its nose at higher US import duties by letting the yuan (CNY) depreciate by more than seven percent. This has kept Chinese exports from plummeting, but burdened other, less sturdy parts of the economy. As a result, China’s leadership does not have much room for further controlled depreciation – at some point, international investors could even sell CNY-denominated assets, although capital controls are in place.</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><span>Depreciation has shielded China’s exporters from the trade war, easing the pressure on corporate profits and jobs - two pillars of social stability. But it has shifted the burden onto external finances by making it more expensive to import, invest abroad, and service foreign debt. Government and consumers – and even companies – are feeling the pinch. </span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>If the US does not lift tariffs, China will only have limited room to use its currency to shield its export sector.</span></span></span></span></span></span></span></span></p> <p><strong>Supporting exports, hurting external purchasing power</strong></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>At the start of last year, the CNY traded at 6.5 yuan to the USD and it now trades around 7, a depreciation of 7.4 percent. Investors sold yuan when the US announced new tariffs and escalated the trade war; they bought yuan on news talks were progressing – and recently did so again on hopes of a “phase one” trade agreement. But there has been more escalation than de-escalation and, as Chinese economic growth slowed, downward pressure on the yuan left its mark.</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><span>The People’s Bank of China (PBOC) could have resisted that trend, but appears to have happily desisted. China’s central bank avoided selling foreign currency reserves to prop up or inflate the value of its currency – the country’s reserves increased by more than 27 billion USD last year. Instead, the PBOC was careful to move the CNY-rate of its daily dollar fixing gradually downwards with the market, while carefully controlling resulting capital outflows.</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><span>A weaker currency has ensured China’s exports only contracted slightly. In September, China’s year-to-date exports have fallen by only 0.2 percent. By supporting exports, China’s authorities have kept some of the negative effects from the trade war from causing social instability. This was an especially important goal ahead of the 70th anniversary of the founding of the People’s Republic of China (PRC), though it is a policy priority at any time.</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><span>But a depreciating yuan has hurt China’s external purchasing power, which means economic foreign policy has become more expensive. Foreign infrastructure projects like those connected to the Belt and Road Initiative (BRI) network have become more costly for their Chinese backers. Depreciation also worked against Beijing’s goal of internationalizing the yuan as foreign investors’ confidence in the value of the currency took a knock or two.</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><span>Depreciation has also made buying anything in USD more expensive for Chinese companies. They import enormous amounts of USD-denominated commodities such as oil and gas, have shown a large appetite for acquiring foreign businesses in recent years, and have steadily raised their exposure to debt in foreign currencies. In particular, servicing these foreign debts would become increasingly difficult if the yuan were to decline more. </span></span></span></span></span></span></span></span></p> <p><strong>Beijing cannot let the yuan lose much more in value</strong></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>The yuan’s falling value also looks set to hit consumers - imported goods will become more expensive and inflation risks increase. If exporters sell dollar earnings to the PBOC, the domestic money supply could rise as the central bank prints money. It had avoided this problem in the past by instructing banks to keep a large capital reserves, but recently cut requirements in response to slowing economic growth.</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><span>Beijing cannot let the yuan lose much more in value – there appears to be little room below the 2008 low of 7.2 to the dollar. Corporate debt defaults have not yet risen, but Chinese billions continue to flow into foreign projects and living costs are rising. Food prices in September were 8.4 percent higher than the year before, and average houses price in 70 cities in August were up 9 percent. Depreciation is not to blame for these trends, but could yet worsen them. </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><span>If that won’t deter Beijing, the specter of capital flight surely will. If investors fear more depreciation or view current exchange-rate losses on investments as too high, they could sell their yuan-denominated assets. Capital controls are meant to prevent this, but panicked investors could trigger capital flight, financial-sector turmoil and a drop in the currency. As in 2015, China would have to spend its prized currency reserves to <a href="https://www.merics.org/en/merics-trackers/economic-indicators-q3-2019/quarterly-analysis">defend the yuan</a></span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>.</span></span></span></span></span></span></span></span></p></div> </div> </div> Fri, 22 Nov 2019 08:06:41 +0000 komprakti 10551 at https://www.merics.org ASEAN’s elephant dance https://www.merics.org/en/blog/aseans-elephant-dance <span>ASEAN’s elephant dance</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Wed, 11/20/2019 - 10:18</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="2019-11-20T12:00:00Z">2019-11-20</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/hanns-w-maull" hreflang="en">Hanns W. Maull</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span><span><span>Lacklustre collective action means Southeast Asia countries are failing to constrain the USA and China shaping the future of their region. Hanns W. Maull says European nations should take note. </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/2019-11/191120_Flags_ASEAN_Abdul%20Razak%20Latif_via%20123rf.jpg?itok=Ocs_OP2N 325w, /sites/default/files/styles/max_650x650/public/2019-11/191120_Flags_ASEAN_Abdul%20Razak%20Latif_via%20123rf.jpg?itok=MKIrj8Wu 650w, /sites/default/files/styles/max_1300x1300/public/2019-11/191120_Flags_ASEAN_Abdul%20Razak%20Latif_via%20123rf.jpg?itok=xrKQRBld 847w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-11/191120_Flags_ASEAN_Abdul%20Razak%20Latif_via%20123rf.jpg?itok=Ocs_OP2N" alt="Flags ASEAN Abdul Razak Latif via 123rf" title="Image by Abdul Razak Latif 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>Small and middle powers the world over are facing up to the fact that there are now two elephants in the room that is world politics. As the USA and China circle each other ever more warily, countries in regions as far apart as Europe and South America are anxiously trying not to get trampled underfoot. Should they stick closely to one of them, choosing sides? Or might they be able to corral the two elephants into some form of co-habitation through joint efforts based on number, not size? </span></span></span></p> <p><span><span><span>Nowhere are these questions more urgent than in South East Asia, where ASEAN, the 10-member Association of Southeast Asian Nations, sees itself as the guardian of the regional order. Member states love that idea, but experience has shown that one thing they will not allow is ASEAN to adopt a common strategy. As a result, countries as big as Indonesia or the Philippines and as small as Singapore or Brunei have to look out for themselves as the superpower elephants dance.</span></span></span></p> <p><strong><span><span><span>A consensual agreement to disagree</span></span></span></strong></p> <p><span><span><span>Logic suggests that these countries join forces - working together might even allow the elephants to be corralled. But what prevents the ASEAN nations from doing so is the age-old price of concerted action, the erosion of national sovereignty through its pooling. The so-called ASEAN Way is a consensual agreement to disagree. As a result, ASEAN nations lack power and purpose, a weakness that crucially also hinders each of them conclusively choosing a side – what if it’s the losing one? </span></span></span></p> <p><span><span><span>Under these circumstances, ASEAN countries see the contortions of hedging their bets as eminently sensible, much like non-aligned regional powers like Australia, New Zealand, South Korea, the South Pacific island states and even Taiwan. Indeed, traditional <em>Realpolitik</em> wisdom would tell them to do exactly that: play the two great powers off against each other to maximize your own advantage; always keep your bets open, always make sure that you could if needed bet differently in the future. </span></span></span></p> <p><span><span><span>But the course ASEAN countries are steering between America and China also reflects domestic currents induced by logic that has little to do with the calculations of world affairs. Domestic and cross-border influences and interests, and the personalities of leaders also influence political decisions. Next to <em>Realpolitik, </em>commercial interests and financial temptations, nationalist sentiments and even racial prejudices shape how these countries are navigating between the two great powers<em>. </em></span></span></span></p> <p><strong><span><span><span>Different trajectories</span></span></span></strong></p> <p><span><span><span>Consider, by way of example, the different trajectories of Singapore, Malaysia and Cambodia in recent years. Singapore’s policies have been remarkably consistent and close to what <em>Realpolitik</em>  would suggest, including its efforts (so far futile) to turn ASEAN into a more effective organization. Singapore’s domestic politics gives the government the support and legitimacy it needs to pursue a foreign policy that tries to maximize the returns for the (collective) national interest of the country. </span></span></span></p> <p><span><span><span>On the other hand, there is Malaysia. Its previous government pursued a pro-China policy that helped fuel to a domestic backlash and UNMO, the traditional ruling party, being driven from power. The new government then sharply veered away from the previous China policy, renegotiating major infrastructure contracts and distancing itself from China. Recently, however, Prime Minister Mahathir Mohamad changed course again, signalling a renewed interest in close cooperation with Beijing. </span></span></span></p> <p><span><span><span>And there is Cambodia. Prime Minister Hun Sen appears to be siding more firmly with China. He did Beijing’s bidding by blocking a communique critical of China’s assertiveness in the South China Sea at the 2012 ASEAN Regional Forum in Phnom Penh, and may even be willing to provide land for military facilities. Yet even he remains keen to suggest he still can hedge his bets. Hun Sen has denied reports about a green light for a Chinese naval base – perhaps the US and Japan helped him get there.</span></span></span></p> <p><span><span><span>Such contortions suggest two things. First, small and middle powers in East Asia are unlikely to become pawns of the great powers - their fierce nationalism and external support will prevent that. But, second, they will not be able to shape their regional environment and constrain great-power activity within it. Without meaningful collective action, ASEAN’s self-image as the guardian of Southeast Asian security will likely remain a pipe dream. European nations need to take note. </span></span></span></p></div> </div> </div> Wed, 20 Nov 2019 09:18:40 +0000 komprakti 10546 at https://www.merics.org EU must not be naive about Chinese promises of fairer competition https://www.merics.org/en/blog/eu-must-not-be-naive-about-chinese-promises-fairer-competition <span>EU must not be naive about Chinese promises of fairer competition</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Mon, 11/18/2019 - 10:51</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="2019-11-18T12:00:00Z">2019-11-18</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>, <a href="/en/team/agatha-kratz" hreflang="en">Agatha Kratz</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong>Beijing talks up equality for foreign and domestic businesses but action is slow, say Mikko Huotari and Agatha Kratz.</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/2019-11/191118_Li_Keqiang_World%20Economic%20Forum_2018_World%20Economic%20Forum_via%20flickr.jpg?itok=-2t4xtHc 325w, /sites/default/files/styles/max_650x650/public/2019-11/191118_Li_Keqiang_World%20Economic%20Forum_2018_World%20Economic%20Forum_via%20flickr.jpg?itok=0AVSvw4L 650w, /sites/default/files/styles/max_1300x1300/public/2019-11/191118_Li_Keqiang_World%20Economic%20Forum_2018_World%20Economic%20Forum_via%20flickr.jpg?itok=K_qax9wG 1300w, /sites/default/files/styles/max_2600x2600/public/2019-11/191118_Li_Keqiang_World%20Economic%20Forum_2018_World%20Economic%20Forum_via%20flickr.jpg?itok=FOQoP5zw 2048w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-11/191118_Li_Keqiang_World%20Economic%20Forum_2018_World%20Economic%20Forum_via%20flickr.jpg?itok=-2t4xtHc" alt="China&#039;s premier Li Keqiang at the World Economic Forum 2018" title="Chinese Premier Li Keqiang at the World Economic Forum 2018. Image by World Economic Forum via flickr (CC BY-NC-SA 2.0)" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p>In mid-October, Chinese Premier Li Keqiang promised a delegation of foreign businesses that China would "create a market-oriented, law-based and international business environment... in which Chinese and foreign-invested enterprises will be treated as equals."</p> <p>Noise from the U.S.-China trade war is making it difficult to appreciate that these could be more than just empty words. But there is a real debate going on in China in which reformers are promoting the idea of greater competitive neutrality for foreign businesses and China's state and private companies.</p> <p>There is reason to doubt, however, that leaders in Beijing are willing and able today to implement necessary structural adjustments, and so the EU must prepare itself for a long-term struggle.</p> <p>At first glance, there are encouraging signs of moves toward competitive neutrality, and further steps toward greater market-opening. These include draft regulations for the latest foreign direct investment law, which also promise to address issues related to the protection of intellectual property and trade secrets.</p> <p>Western companies have long lobbied for Beijing to stop favoring state-owned companies and start allowing free and fair competition in its huge home market. A more even playing field between different economic actors in China would go a long way to tackle some of the most ingrained European and U.S. grievances about how unfair Chinese practices affect Western companies at home and abroad.</p> <p><strong> A fairer competitive environment would spur China's potential growth</strong></p> <p>Ensuring competitive neutrality would also boost China's own economic prospects by making the country more attractive to overseas capital and helping it tackle some of its most entrenched and costly economic distortions, from the preferential financing of inefficient state businesses to wasteful and distortive industrial policies.</p> <p>Establishing a fairer and more efficient competitive environment at home would spur China's potential growth, much to Beijing's own advantage.</p> <p>But whenever he has been faced with decisive reform opportunities in his six-year reign, Xi and his team have opted for stability, risk-averse strategies and often doubled down on a state-led approach.</p> <p>What is more, some of the economic policy features the West criticizes the most, including promoting state-owned enterprises, or SOEs, as national champions, market closure of strategic sectors and industrial subsidies, are still seen in Beijing as a recipe for success for China's techno-nationalist industrial policy approach.</p> <p>Beijing has a small window of opportunity to prove doubters wrong -- but the EU needs to assemble policy options in case Beijing once again does not make good on its reform promises.</p> <p>In a recent report, supported and published by the independent Bertelsmann Stiftung foundation, we took stock of concrete policy measures available to European stakeholders to tackle continued if not expanding China-induced economic distortions.</p> <p>Options include reforms of the EU's competition regime which might allow for greater market concentration at home to face China's globally expanding SOEs. Restricting access to European procurement markets is also on the table, with a view to creating leverage for greater market opening in China.</p> <p>More modest approaches would seek to further beef up existing trade defense instruments while proponents of a more ambitious approach suggest an expansive external application of European state aid policies.</p> <p>Some of these tools could be deployed at the EU level; others will necessitate a multilateral approach, alongside like-minded partners. Each of them involves important trade-offs and possibly economic and political costs in our relations with China while affecting partnerships with our closest allies.</p> <p><strong>A piecemeal approach will not be enough</strong></p> <p>EU leaders will need to weigh these factors carefully in prioritizing their next move in terms of China policy. But whichever option they chose, they will need keep three key considerations in mind.</p> <p>First, a piecemeal approach will not be enough. To confront a systemic China problem, the EU will have to pursue a much more integrated approach across policy fields.</p> <p>Second, the EU will need to avoid nonmarket practices it objects to abroad and stay true to its core market-based principles. Europe's response needs to be a positive agenda for member states and EU institutions to enable a thriving market environment that fosters innovation and growth.</p> <p>Third, EU efforts in tackling China-related distortions will benefit from a much higher degree of coordination with partners including Japan, Australia and Canada. OECD economies will struggle to compete with China's adaptive state capitalism if they do not have domestic and international rules in place to more forcefully tackle the market-distorting behaviors of SOEs, state-guidance funds and other forms of state intervention.</p> <p>To get there, the EU will first have to get some basic homework done. It urgently needs reliable mechanisms for coordinating China policy approaches across fields and between EU institutions and member states. It also needs much greater institutional capacity to monitor and analyze China's reform progress, delays or regress, and the implications for Europe.</p> <p>Only with such mechanisms and capacities in place will the EU be able to convince relevant stakeholders and to develop targeted responses adjusted to the emerging realities of China's changing path of reform. The key challenge will be to hold the EU together in pursuing a more assertive agenda if China's leaders see competitive neutrality only as fine words, not firm policy.</p> <p><strong>This article was first published by <a href="https://asia.nikkei.com/Opinion/EU-must-not-be-naive-about-Chinese-promises-of-fairer-competition">Nikkei Asian Review on November 17, 2019</a>.</strong></p></div> </div> </div> Mon, 18 Nov 2019 09:51:37 +0000 komprakti 10541 at https://www.merics.org Europe's hard choices on China https://www.merics.org/en/blog/europes-hard-choices-china <span>Europe&#039;s hard choices on China</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Thu, 10/31/2019 - 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="2019-11-04T12:00:00Z">2019-11-04</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><strong>Washington is escalating its campaign to contain China by blacklisting technology firms. It’s not clear if Europe is </strong><strong>prepared to follow suit. Either way, there will be a price to pay.</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/2019-11/191104_Smartphone_5G_73044601_m.jpg?itok=eua2dB6m 325w, /sites/default/files/styles/max_650x650/public/2019-11/191104_Smartphone_5G_73044601_m.jpg?itok=I9fwWYPg 650w, /sites/default/files/styles/max_1300x1300/public/2019-11/191104_Smartphone_5G_73044601_m.jpg?itok=JAbhEXyn 1300w, /sites/default/files/styles/max_2600x2600/public/2019-11/191104_Smartphone_5G_73044601_m.jpg?itok=bNqzKEDu 2508w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-11/191104_Smartphone_5G_73044601_m.jpg?itok=eua2dB6m" alt="Smartphone screen" title="Image by jevanto 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>It has been a year since US Vice President Mike Pence, speaking at the Hudson Institute in Washington, laid out the Trump administration’s case against China in unusually stark terms, triggering fears of a new Cold War. But across Europe, countries are still struggling to understand what this new world of “great power competition,” as it has come to be known within the Beltway, means for them—and there is nothing resembling a consensus on this crucial question.</p> <p>Poland has cozied up to the United States. France dreams of strategic autonomy for Europe. Britain is consumed by Brexit chaos. And Germany seems to believe it can navigate this new landscape in the same way it did the old—<a href="https://foreignpolicy.com/2019/10/21/germany-merkel-chooses-china-over-united-states-eu-huawei/">looking out for its short-term economic interests</a> without making hard choices or choosing a camp. The events of the past few months have shown that this approach is becoming increasingly untenable.</p> <p>Beneath Donald Trump’s erratic, scandal-ridden presidency lurks a well-organized “whole of government” effort by senior officials within his administration to push back against China on many levels, and to nudge, coax, or pressure allies, if necessary, to join the US campaign.</p> <p>This has been most obvious on the issue of 5G mobile networks, where Washington has mounted a forceful—if not entirely successful—campaign to convince its partners to reject Chinese suppliers like Huawei and ZTE. But the debate over 5G is just the beginning. Europe is likely to be confronted with a host of similarly difficult choices in the months and years to come. And it needs to think hard, at the national level and collectively, about where it wants to end up.</p> <p><strong>Black lists and surveillance</strong></p> <p>Earlier this month, the United States <a href="https://www.ft.com/content/2a40927e-e946-11e9-a240-3b065ef5fc55">blacklisted 28 Chinese organizations</a>, including Hikvision and Dahua Technology, two leading makers of video surveillance products. It accused them of being complicit in human rights abuses in Xinjiang, the western Chinese region where over a million Uighurs and other predominantly Muslim minorities have been detained in re-education camps.</p> <p>Placing these organizations on the so-called entity list essentially bars US companies from selling them technology without the prior consent of the government. Whether the US move was motivated by altruistic concerns about human rights or a desire to raise pressure on China to make concessions in long-running trade talks is irrelevant. The move shines a spotlight on Europe’s slow-moving effort to revamp its own rules on the export of cyber surveillance technologies, raising pressure on the European Commission, the European Parliament, and member states to overcome their differences and clinch a deal.</p> <p>In the coming months, the US Department of Commerce is expected to publish <a href="https://www.nytimes.com/2019/10/23/business/trump-technology-china-trade.html">new rules limiting the export of emerging technologies</a>, such as artificial intelligence, quantum computing, and 3-D printing, to China. These new policies could have profound implications for European governments and companies, potentially exposing them to extra-territorial US sanctions if they do not follow Washington’s lead. It is unclear whether Europe is prepared for this escalation, which will once again put it in a position of having to choose between the United States and China.</p> <p><strong>An impossible position</strong></p> <p>“No matter what European countries decide on 5G, there are bigger questions lurking around the corner,” Jan-Peter Kleinhans of the Stiftung Neue Verantwortung, a Berlin think tank focused on technology and society, told Berlin Policy Journal. “Hard choices are looming on artificial intelligence, the Internet of Things, and quantum computing, with China in similarly dominant positions.”</p> <p>This will put countries like Germany, whose big manufacturers rely heavily on the Chinese market, and the United Kingdom, which post-Brexit will be keen to bolster its economic ties to China, in an impossible position. But if they think they can carry on with business as usual, as their current approach to 5G suggests, they are deluding themselves.</p> <p>Washington’s threats to rein in intelligence sharing with allies if they allow Huawei into their 5G networks have been brushed off by some in Europe as Trumpian bluster. Perhaps there is an element of truth to that. But it would be wrong for European countries to believe they can continue down this path without eventually suffering a real backlash from Washington, regardless of whether Trump or a Democrat is sitting in the White House in 2021.</p> <p>A <a href="https://www.state.gov/bureaucracy-and-counterstrategy-meeting-the-china-challenge/">speech given in September</a> by US Assistant Secretary of State Christopher Ford offers important insight into the American approach. Ford, speaking to the US Defense Threat Reduction Agency in Fort Belvoir, Virginia, argued that a “concerted, system-wide effort to erase barriers between the military and civilian sectors of the Chinese economy” has rendered the traditional distinction between the two obsolete. From now on, he appeared to be saying, the US will be considering virtually all Chinese companies a national security threat.</p> <p>Ford, who passed through Europe in early October with a delegation of officials from the Pentagon and the National Security Council, also spoke of a growing international consensus that the “non-Chinese world” needs to work more closely together to guard against Chinese abuses.</p> <p><strong>Behind the curve</strong></p> <p>Would European capitals agree? That is not entirely clear. Put simply, the US is arguing that the geo-economic threat from China requires responses on two different levels: first, defensive measures like investment screening and procurement policies that protect vital technology and critical infrastructure like 5G networks; and second, policies that ensure Western countries are not unwittingly contributing to Chinese military advances and human rights violations through exports, corporate R&amp;D cooperation, or scientific collaboration. So far, Europe seems only partially on board with the first category and unconvinced, or at the very least well behind the curve, on the second.</p> <p>After a year in which Europe adopted a tougher stance toward China, introducing its own investment screening mechanism, labeling China a “systemic rival,” and eliciting pledges from Beijing to open up its economy at an EU-China summit back in April, 2020 will be a crucial year in determining whether the pushback will continue.</p> <p>If Beijing fails to deliver on its pledges from April 2019, will European capitals and the newly “geopolitical” European Commission have the will and wherewithal to muster a forceful response? And when Chancellor Angela Merkel says that she wants to make EU-China relations a focus of Germany’s EU presidency next year, as she did this month in a <a href="https://www.scmp.com/news/china/diplomacy/article/3033428/angela-merkel-make-relations-china-top-priority-when-germany">speech to parliament</a>, is this a sign that she is serious about standing up to China, or an indication that she wants to preserve ties at all costs, heralding more division within Europe? Her readiness to give Huawei a role in the German 5G network due to fears of a Chinese backlash—a position parliamentarians in her own party are trying to overturn—suggests it may be the latter. Either way, Washington will be watching closely.</p> <p><strong>This article was first published <a href="https://berlinpolicyjournal.com/hard-choices-on-china/">by the Berlin Policy Journal on October 31, 2019.</a></strong></p></div> </div> </div> Thu, 31 Oct 2019 14:21:15 +0000 komprakti 10496 at https://www.merics.org Social control or a fix for a non-law-abiding society? https://www.merics.org/en/blog/social-control-or-fix-non-law-abiding-society <span>Social control or a fix for a non-law-abiding society?</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Fri, 11/01/2019 - 09:57</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="2019-11-01T12:00:00Z">2019-11-01</time> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p>Lavender Au, Mats Kuuskemaa</p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">China’s personal social credit scoring has sparked controversy, but many in China appear willing to accept it. Lavender Au and Mats Kuuskemaa ask how far this acceptance goes. </span></strong><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>This article is part 4 of a mini-series to present the outcomes of the</span></span></span></strong><a href="https://www.merics.org/en/events/merics-european-china-talent-program-2019"><strong><span><span> MERICS European China Talent Program 2019.</span></span></strong></a></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/2019-11/191101_Camera_lens_only4denn_via_123rf_27269862_m.jpg?itok=lKLTOXL6 325w, /sites/default/files/styles/max_650x650/public/2019-11/191101_Camera_lens_only4denn_via_123rf_27269862_m.jpg?itok=8IfCGn2v 650w, /sites/default/files/styles/max_1300x1300/public/2019-11/191101_Camera_lens_only4denn_via_123rf_27269862_m.jpg?itok=kaLHRiFp 1300w, /sites/default/files/styles/max_2600x2600/public/2019-11/191101_Camera_lens_only4denn_via_123rf_27269862_m.jpg?itok=98G2ar_H 2472w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-11/191101_Camera_lens_only4denn_via_123rf_27269862_m.jpg?itok=lKLTOXL6" alt="Camera lens" title="Image by only4denn 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-US" xml:lang="EN-US" xml:lang="EN-US">From an outsiders’ perspective, China’s fast-developing concept of personal social credit rating seems outlandish. It was quickly dubbed a real-life ‘Black Mirror’ or ‘Orwellian dystopia’ by international media. </span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">But, to date, social credit initiatives seem to have met with little opposition in China, in spite of apparent intrusion into people’s private lives. From Chinese bureaucrats’ perspective, social credit systems are a collection of efforts to deal with lack of integrity in society and problems that ordinary Chinese people face every day. Various municipal and state-level schemes target not only citizens and enterprises, but also government officials themselves.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">So how advanced is China in implementing personal social credit systems? Although the concept of social credit was first introduced in 2001, a properly functioning national system is still many years away. Social credit isn’t even on the radar of many people. </span><a href="https://www.scmp.com/magazines/post-magazine/long-reads/article/3012574/village-testing-chinas-social-credit-system"><span>A SCMP reporter went to Yangqiao village</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> in Zhejiang province and found that even when local government has made a point of rolling out an individual rating system, villagers do not bother to check their scores. </span><a href="https://verfassungsblog.de/untrustworthy-social-credit-isnt-what-you-think-it-is/"><span>Daum (2019)</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> argues that “even the most prominent [municipal] point systems have so little impact on employment, education, and daily life that most citizens remain totally unaware of them.” </span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">An acceptable trade-off between security and privacy? </span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Nevertheless, social credit systems require the collection of large quantities of personal data. Does the apparent acceptance of these systems suggest that Chinese people place less value on data privacy? </span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The </span><a href="https://www.bloomberg.com/news/articles/2018-01-04/jack-ma-s-ant-apologizes-for-baiting-users-into-credit-system"><span>public outcry last year</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> directed at tech industry giant Alibaba for misleading users into sharing data with third parties suggests otherwise. It is not true that consumers do not care about privacy, but that many are willing to accept a trade-off if it ensures the security of the food they eat and the products they buy, and that those who owe them money pay them back. </span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">From the inside, Chinese society doesn’t feel overly controlled – it often feels chaotic. Consumers in China are bombarded by spam calls. They fall for financial scams mixed in with legitimate online investment opportunities. They take their children to be vaccinated and later find out that one of the largest providers was peddling ineffective jabs. They bring cases against debtors in court, but even if the judgment goes in their favor, lack of actual redress means that court orders are often dead letters. </span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Hundreds of people turned up in Beijing to protest against Ponzi schemes, suggesting that people expect their government to do more about fraud. Willingness to accept social credit was confirmed by </span><a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3215138"><span>Kostka (2018) survey</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> estimating 80 percent support for social credit implementation amongst Chinese citizens interviewed, with most favoring central, not local government to spearhead implementation. The study also found extra-high support amongst the wealthy, suggesting that have-nots may have less faith that schemes will benefit them.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">On the other hand, hoarding of public data creates entirely new risks. Local governments are regularly found leaving citizens’ personal information exposed. Yet another unsecured server was discovered in July with 60 million personal records. Who was responsible? Jiangsu provincial police had left the server without a password to protect it. </span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">There are also concerns that criteria used in creating blacklists or scores may be expanded to cover anything that the authorities see as unhelpful. In April for example, it emerged that officials in Zhejiang province were considering penalizing credit scores of workers who changed jobs too often.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Last year, a story about a student barred from university because of her father’s debts, despite scoring 710 in college entrance exams made the rounds. State media outlets dismissed it as fake news, but the traction it gained further demonstrates public dilemma about social credit.</span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Traffic violations – a key point of disagreement</span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">In July 2019, Nanjing’s traffic police kicked off a social credit scheme targeted at those violating traffic rules. At main intersections, facial recognition was used to identify rule breakers. The violations were broadcast on large screens and the violators themselves were sent alerts ordering them to attend traffic safety sessions. From 2020, unpaid parking bills are to affect Beijingers through the municipal social credit scheme. </span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Inclusion of traffic violations into social credit schemes continues to fuel heated discussions in China. Many are tired of others driving on the wrong side of the road, yet some find a fix by social credit too intrusive. Even an online state media poll by <em>People’s Daily Online</em> resulted with 61,000 favorable and 21,000 votes against. Regardless of the source, the poll reflects discord on this topic among the Chinese populace. </span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Municipal and all-China schemes are in different stages of development, a reason why personal social credit schemes’ impact on people’s everyday lives has been limited thus far. While twenty-three million people were barred from purchasing train and plane tickets in March, this had little effect amongst 1.4 billion. A recent </span><a href="https://www.europeanchamber.com.cn/en/press-releases/3045/european_chamber_report_on_china_s_corporate_social_credit_system_a_wake_up_call_for_european_business_in_china"><span>EUCCC survey</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">, on the other hand, argued that consequences on China’s business environment from the enterprise social credit scheme to be implemented next year may be far more significant. In particular, foreign enterprises’ social credit may be weaponized during trade or other disputes, while making corporate leadership personally liable for poor scores gives authorities further sway to demand loyalty and affect corporate decision-making.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Social credit is likely to continue to spark heated arguments amongst China-watchers for many years to come. Some warn of the potential for abuse by those in power. Others stress that credit schemes also address legitimate policy concerns. It is however abundantly clear that the systems are likely to advance. Various central ministries have released top-level documents, and local-level regulations related to social credit already number in the hundreds. Thus far, it appears that many amongst the Chinese populace support the concept and its implementation.</span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>About the authors:</span></span></span></strong></span></span></span></p> <p><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><strong>Lavender Au</strong> is a Lead Analyst specializing in governance and law at the Beijing-based research and strategic advisory firm China Policy.</span></span></p> <p><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><strong>Mats Kuuskemaa</strong> is Political Counsellor at the Embassy of Estonia in Beijing.</span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>The authors participated in the fifth annual </span></span></span></strong><a href="https://www.merics.org/en/events/merics-european-china-talent-program-2019"><strong><span><span>MERICS European China Talent Program</span></span></strong></a><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> in May 2019, during which parts of the argumentation presented in this blogpost were developed. The authors bear sole responsibility for the content.</span></span></span></strong></span></span></span></p></div> </div> </div> Fri, 01 Nov 2019 08:57:40 +0000 komprakti 10506 at https://www.merics.org Making China cool again: Chinese hip hop – an emerging soft power? https://www.merics.org/en/blog/making-china-cool-again-chinese-hip-hop-emerging-soft-power <span>Making China cool again: Chinese hip hop – an emerging soft power?</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Tue, 10/29/2019 - 08:32</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="2019-10-29T12:00:00Z">2019-10-29</time> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Manlai Nyamdorj</span></span></span></p> <p><strong><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Do artists like Higher Brothers have the potential to boost the image of China abroad and finally bring Chinese societal resources to generate soft power?</span></span></span></span></strong></p> <p> </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/2019-10/higher%20brothers.jpg?itok=5gQXmXXO 325w, /sites/default/files/styles/max_650x650/public/2019-10/higher%20brothers.jpg?itok=EayJMFSP 650w, /sites/default/files/styles/max_1300x1300/public/2019-10/higher%20brothers.jpg?itok=58UqrmbL 1300w, /sites/default/files/styles/max_2600x2600/public/2019-10/higher%20brothers.jpg?itok=2lcHVfQP 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-10/higher%20brothers.jpg?itok=5gQXmXXO" alt="Higher Brothers at The Come Up Show" title="Higher Brothers. Image from The Come up Shop via Flickr (CC BY-ND 2.0)" 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">This summer, a night club in central Frankfurt was full of young Chinese with </span><a href="https://www.scmp.com/lifestyle/fashion-beauty/article/2165639/chinese-millennials-embrace-supreme-streetwear-brand-and"><span>Supreme</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> caps, Jordan shoes and other high-end fashion brands. They were students, young professionals and other Chinese nationals – representatives of the new generation of post 1990s Chinese residing in Germany who had come to watch their homegrown heroes, Higher Brothers Chinese rap group concluding their World Tour, “Wish You Rich”.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Although Higher Brothers are nowhere near to global superstardom, they have been performing throughout Asia, in North America and in major cities in Europe including London, Amsterdam and Berlin. In fact, just weeks earlier Higher Brothers had shared a stage with the likes of Kings of Leon and Rita Ora at the one of the most popular festivals in Berlin, “Lollapalooza”.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Today, Higher Brothers is by far the most successful Chinese music export, especially within the new emerging musical genres such as hip hop. Until recently cultural products that came out of Mainland China struggled to find appeal in the world outside. Higher Brothers represent a new generation of Chinese artists that are gaining traction outside of China, allowing China to become active participants in cultural exchange, instead of merely being consumers of foreign imports.</span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">A new counterculture?</span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">What marks Higher Brothers out is that, unlike the vast majority of Chinese rappers throughout the 1990s and early 2000s, they are not just mimicking their western counterparts. The package they present contrasts sharply with the very dull cultural arena in China. Guided by the CCP, it combines elements of both systems: Carefully curated communist state ideology and transmission of these ideas through the means of conforming and manipulative pop culture from capitalist societies. Higher Brothers, on the other hand, seems to represent the bursting out of the next generation - post-Tiananmen Chinese who have grown up with a mix of patriotic education and an ever more competitive market mechanism.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">A key move for Higher Brothers’ global exposure was signing with New York-based music label “88rising”, a company founded to promote Asian-American artists on a bigger stage. Joining this label provided the group a gateway to American and broader foreign audiences. Many Chinese artists have since followed this route. Indeed “88rising” would be the reason many Germans and foreigners who had come to see Higher Brothers in Frankfurt would give if asked how they first heard about the band.</span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Hip hop as propaganda tool</span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Pioneering this new generation, Higher Brothers has played a key role in popularizing the genre. In 2017, Rap of China – a Chinese reality TV began airing. It has broken records in viewership, placing hip hop as a new medium in Chinese popular discourse. Previously categorized as subculture or “scene”, hip hop now became part of mainstream Chinese culture. Around the same time, the Chinese authorities noticed its growing popularity and decided to jump on the cultural bandwagon. They formed their own hip hop group called Chengdu Revolutionary, stylized as CD-REV, which operates directly under the Communist youth league, a youth organization run by the CCP.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Hip hop today is part of the CCP’s regular propaganda repertoire. The most recent example of this is CD-REV’s </span><a href="https://www.youtube.com/watch?v=p1us-0SVKcg"><span>Hong Kong</span></a><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> song, </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">which mirrors the official narrative portraying the protests as unlawful riots instigated by foreign “black hands”. The list includes several songs on politically “sensitive” topics: “One China policy” with a tasteless </span><a href="https://www.youtube.com/watch?v=5cWQGDW8Jb0"><span>attack on Tsai Ing-wen</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">, a 2017 song against </span><a href="https://www.youtube.com/watch?v=9p0nQdvHOOo"><span>South Korea deploying THAAD</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> (Terminal High Altitude Air Defense) system, and a 2018 song about an incident in which a </span><a href="https://www.youtube.com/watch?v=D2lTSbDqm2s"><span>Chinese tourist was “mistreated” </span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">by police in Sweden.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">In discussion among political and academic circles about Chinese hip hop and new emerging youth culture CD-REV have stolen the limelight. “Propaganda rap” is overshadowing the more naturally grown artists like Higher Brothers.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">In contrast to CD-REV, it seems like the path Higher Brothers are taking is what Joseph Nye, the man who coined the term “soft power”, meant when he talked about the importance of popular culture.<strong> </strong>He argued that societal forces are far more productive in creating soft power than state-led initiatives. A comparison between Higher Brothers and CD-REV confirms this. While CD-REV are mocked as the latest propaganda technique from the CCP and have no noticeable following, Higher Brothers have had significant impact on the global stage and generated a fanbase at home and abroad.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Unlike other “societal” rappers from China such as Gai, </span><a href="https://radiichina.com/rap-of-china-champion-gais-new-music-video-is-a-desperate-attempt-to-make-censors-happy/"><span>who fans criticize for coopting the CCP too soon</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">, Higher Brothers have always been seen on the “liberal” side of the conversation. In particular, they are some of very few Chinese artists that have been popular both in Hong Kong and Taiwan – something that is not easy for Mainland artists to achieve, especially for their younger audience because of the political tensions.</span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Propaganda or patriotism?</span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">However, things may look different after this summer, when two members of Higher Brothers followed many other Chinese public personas in expressing support for the Hong Kong police in the ongoing </span><a href="https://www.merics.org/en/newsletter/china-update-122019"><span>Hong Kong protests.</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> Given what’s at stake, it is possible “going political” </span><a href="https://radiichina.com/china-rappers-hong-kong-protest-meme/"><span>might have hurt their reputation among their international followers</span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">, specifically those in Taiwan and Hong Kong. </span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">While many were left disappointed, this expression of nationalism was not totally out of character – their most famous songs are called “Made in China” and “Wechat, and their 2019 album “Five Stars” refers to the five stars of the Chinese national flag. Whether pressure from higher authorities was involved or Higher Brothers were simply showing their patriotism remains unclear. Compared to other Chinese societal rappers, Higher Brothers are still at the milder end of the spectrum, but the question remains whether the move will backlash with their fans abroad.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">What the case of Higher Brothers shows is that while China may be learning how to gain cultural influence abroad and possibly project soft power through its societal resources, the very nationalism – even in its faintest form – that is a product of the nation-building process might undermine these efforts and render them less appealing to the global audience.</span></span></span></span></p> <p><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Manlai Nyamdorj is pursuing a master's degree in Contemporary East Asian Studies at University of Duisburg-Essen. </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>He is working as an intern in the MERICS society program from July to December 2019.</span></span></span></strong></p></div> </div> </div> Tue, 29 Oct 2019 07:32:01 +0000 komprakti 10476 at https://www.merics.org On the "Middle Corridor," China is largely absent https://www.merics.org/en/blog/middle-corridor-china-largely-absent <span>On the &quot;Middle Corridor,&quot; China is largely absent </span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Fri, 10/25/2019 - 10:16</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="2019-10-25T12:00:00Z">2019-10-25</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/jacob-mardell" hreflang="en">Jacob Mardell</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong>Linking China and Europe via the Caspian Sea, the “Middle Corridor” is one of the BRI’s six “official” corridor. But in the South Caucasus region, China is almost nowhere to be seen, says Jacob Mardell. He is currently travelling countries along the Belt and Road to investigate how the initiative is being implemented on the ground. </strong></p> <p> </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/2019-10/191925_BRI_Middle_Corridor_Jacob%20Mardell.jpg?itok=oWKfhlU9 325w, /sites/default/files/styles/max_650x650/public/2019-10/191925_BRI_Middle_Corridor_Jacob%20Mardell.jpg?itok=TcszWL3H 650w, /sites/default/files/styles/max_1300x1300/public/2019-10/191925_BRI_Middle_Corridor_Jacob%20Mardell.jpg?itok=ZkQsu1XW 1300w, /sites/default/files/styles/max_2600x2600/public/2019-10/191925_BRI_Middle_Corridor_Jacob%20Mardell.jpg?itok=egXDAK8E 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2019-10/191925_BRI_Middle_Corridor_Jacob%20Mardell.jpg?itok=oWKfhlU9" alt="Image by Jacob Mardell" title="Image by Jacob Mardell" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p>The Mercury II sank in 2002, leaving only eight survivors. So when I notice that I’m crossing the Caspian Sea on the Mercury I, I’m not exactly filled with confidence. The slot machine in the games room, which only takes Deutschmark, does nothing to alleviate my sense that this Soviet-era ferry has seen better days.</p> <p>But the crossing is smooth. We leave the port of Baku in the early hours of Saturday morning, and after twenty two hours of glorious stars and mess-room meals with Ukrainian truck drivers, we arrive in Kazakhstan at the port of Kuryk.</p> <p>This Caspian Sea crossing is an essential feature of the shortest route from China to the EU, otherwise known as the “Middle Corridor”—so called because it charts a middle passage between Russia in the North and Iran in the South. Some transport initiatives are more concrete than others. The EU’s trans-European transport network (TEN-T) program, for example, describes a specific list of studies and works funded by the EU. Like China’s Belt and Road Initiative (BRI), the Middle Corridor tends more toward the conceptual end of the spectrum. Although China’s BRI is far more complex, both the BRI and the Middle Corridor operate like slogans and are leveraged by various actors to tap into the zeitgeist of resurgent East-West overland connectivity.</p> <p><strong>Noticeable for its absence</strong></p> <p>The Middle Corridor is sometimes described as being a Chinese initiative, but Beijing’s role in recent Trans-Caspian and Caucasian infrastructure has been minimal. While “China-Central Asia-West Asia Corridor” is one of six official corridors of the BRI, its remit is vague, and it encompasses Iran rather than the Southern Caucasus. China is a party to the trans-Caspian agreement signed in 2013 between Kazakhstan, Azerbaijan, and Georgia, though despite frequent talk of synergy between “Turkey’s Middle Corridor” and the BRI, cooperation is limited to the signing of MoUs.</p> <p>The long-planned Baku-Tbilisi-Kars (BKT) railway connection from Azerbaijan to Northeastern Turkey is the most important infrastructure project to have been completed along the Middle Corridor. It was inaugurated in October 2017 and, as I found out when I took a shiny new Stadler car heading West from Baku, the service recently opened to passenger traffic. The BKT is often associated with the BRI in official statements, but neither Chinese finance nor Chinese companies were involved. Beijing has also been largely absent from port developments around the Caspian Sea. The new ports of Baku and Kuryk are keen to stress their relevance to the New Silk Road, but China played no role in their development.</p> <p>Georgia has good access to funds from international financial institutions (IFIs), and oil-rich Azerbaijan has enough money to pay for its own infrastructure—in fact, it also provided funds for the Georgian portion of the BTK. This self-sufficiency explains why Chinese funding might be absent from the Middle Corridor, but it doesn’t fully account for the shallow depth of China’s footprint. One plausible explanation is that Beijing isn’t convinced the Middle Corridor is viable.</p> <p><strong>Five borders, two seas</strong></p> <p>I talk to an expert at an IFI in Baku who dismisses the Middle Corridor as “cumbersome.” As well as referring to the Caspian as a “lake with bad weather that they call a sea,” he also says that a lack of infrastructure and multiple border crossings mean the Middle Corridor can’t compete with the “main overland route through Russia.” As the crow flies, it may be the shortest route between Europe and China, but the middle corridor involves crossing five borders and transiting one or two seas, depending on where the cargo’s heading.</p> <p>Multilateral institutions such as the Trans-Caspian International Transport Route (TITR) have been set up to coordinate trade, but linguistic, cultural, and legal differences make aligning customs procedures an uphill battle. As ever in the world of trade, “soft” institutional infrastructure is just as important as the “hard infrastructure” of railroads and port facilities. One Middle Corridor insider tells me he spends around 50 percent of his time waiting for signatures.</p> <p>Thanks to the help of a good friend at the port, I arrive an hour before boarding, but most of the foreign travelers I meet at the Port of Baku have been camping there for at least a day. The boat leaves only when it’s full, sometimes once or twice a week, sometimes less frequently. If there’s bad weather at sea, as there often is, the boat goes nowhere. There is a lot of paperwork and hours of unexplained waiting involved in crossing the Caspian Sea. For Silk Road travelers with time on their hands, it’s a fun, if bemusing experience, but it’s not the easiest way to get from A to B.</p> <p><strong>Beijing’s diversification game</strong></p> <p>In fairness, the port wasn’t built to service European thrill-seekers. The new cargo terminal is much more modern and efficient, and the ferry terminal is also scheduled for expansion. Yet the multi-day Caspian crossing does illustrate the problems faced by goods heading to and from China through the Middle Corridor. The overwhelming majority of trade between the EU and China is by sea, and for the small percentage of goods suited to the more expensive, but slightly quicker land routes, the Northern Corridor remains an easier option.</p> <p>The Middle Corridor’s main appeal is that it bypasses Russia. Despite currently healthy Sino-Russian relations, Beijing likes to build redundancies into global trade networks. Diversification is the name of the game, and the Middle Corridor provides a good alternative route to Europe should problems arise along the Northern Corridor. While the route through Russia remains the cheaper option, the Middle Corridor is an insurance policy that’s probably low on Beijing’s list of priorities.</p> <p>But the Middle Corridor isn’t all about end-to-end trade between China and the EU. When I visit ports, I tend to search for containers adorned with Chinese characters, which always provide easy photo opportunities. But at the Port of Baku, the starring role is played by a long train of fertilizer from Turkmenistan. Via Poti port in Georgia, the fertilizer will end up on the fields of Scotland. Onboard Merkury I, I talk to a Turkish truck driver who is hauling a cargo of heavy textile machinery, destined not for China but Kazakhstan. Because of a persistent global obsession with the BRI, stories about East-West connectivity often choose China as their main protagonist, but there are other markets and producers out there.</p> <p><strong>The race for the best logistics hub</strong></p> <p>The countries sandwiched between the European and Chinese markets are also capable of laying out their own plans for development. The Middle Corridor is partly led by a strong sense of competition between participating states. Every official I meet in every country I visit between the EU and China touts their country’s credentials as a regional logistics hub, and the race is on to establish the best facilities and the most preferential conditions for business.</p> <p>As Eugene Seah, Chief Operating Officer at the Port of Baku reminds me: “We’re not just talking about transit, we’re talking about hubs—about building viable supply chains and being able to manufacture and export from Azerbaijan.” Alongside a tidy, hi-tech port facility that was inaugurated in 2018, the Port of Baku is also developing a colossal Free Trade Zone (FTZ) that officials hope will attract businesses to base operations in Azerbaijan. Shah says he has seen “strong interest” from Chinese parties but suspects that Beijing is playing something of a waiting game.</p> <p>In the meantime, the Middle Corridor remains a firmly regional initiative. It faces serious obstacles to becoming an alternative China-EU route, but Trans-Caspian traffic can still flow without support from Beijing. In other words: China is big, and the BRI is important, but there’s a lot going on in the Southern Caucasus and Central Asia besides Beijing-sponsored initiatives.</p> <p><strong>This article was first published in<a href="https://berlinpolicyjournal.com/on-the-middle-corridor-china-is-largely-absent/"> the Berlin Policy Journal</a> on October 15, 2019.</strong></p></div> </div> </div> Fri, 25 Oct 2019 08:16:13 +0000 komprakti 10451 at https://www.merics.org