MERICS Blog - European Voices on China https://www.merics.org/en/blog/rss?field_topics_target_id=All en Power to the People: Could EU bans on Huawei provoke a Chinese consumer backlash? https://www.merics.org/en/blog/power-people-could-eu-bans-huawei-provoke-chinese-consumer-backlash <span>Power to the People: Could EU bans on Huawei provoke a Chinese consumer backlash?</span> <span><span lang="" about="/en/user/286" typeof="schema:Person" property="schema:name" datatype="">h.seidl</span></span> <span>Fri, 03/27/2020 - 13:12</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="2020-03-27T12:00:00Z">2020-03-27</time> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p>Linda Liang</p> <p><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Nationalism is a powerful force in China – one that</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>, once mobilized, can</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span>serve<span> </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>the government’s</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span>purposes.</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span>As<span> </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>EU member states</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>weigh up<span> </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>their</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span>decision on Huawei, the possibility of a backlash<span> </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>by</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span>Chinese consumers<span> </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>has to</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span>be considered.</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Could the Chinese government<span> </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>let loose a</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span>retaliation</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span>from</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span>the bottom up</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>?</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Linda Liang</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span>weigh</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>s</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> </span>up the odds.</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/2020-03/200217_Huawei_sign_in%20Copenhagen_Francis%20Dean%20via%20123rf.jpg?itok=Y6ggz1L9 325w, /sites/default/files/styles/max_650x650/public/2020-03/200217_Huawei_sign_in%20Copenhagen_Francis%20Dean%20via%20123rf.jpg?itok=L9ENPaPJ 650w, /sites/default/files/styles/max_1300x1300/public/2020-03/200217_Huawei_sign_in%20Copenhagen_Francis%20Dean%20via%20123rf.jpg?itok=xWVd_kxX 1300w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2020-03/200217_Huawei_sign_in%20Copenhagen_Francis%20Dean%20via%20123rf.jpg?itok=Y6ggz1L9" alt="Huawei sign" title="Image by Francis Dean 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>In recent months, European countries have come under increasing pressure to include Huawei in their 5G networks as Chinese ambassadors across the continent, from Berlin to Paris and the Faroe Islands, have issued veiled threats of economic retaliation. These are not taken lightly – Chinese markets and consumers matter to European economies, as China’s lockdown in response to CoViD-19 has made clear. Could the Chinese government decide to ratchet up the pressure by indulging consumers who boycott European products?</p> <p>The Chinese government has used this card before. In the run up to the Olympic Games in 2008, the pro-Tibet stance taken by activists and local governments in France riled Chinese patriots so much that consumers decided to boycott French retailer Carrefour in protest. Tensions were only eased after multiple efforts by France’s central government. Politically motivated grassroot boycotts also followed the deployment of American anti-missile technology THAAD to South Korea in 2017. Anti-South Korean sentiment was directed at the supermarket chain Lotte Mart, with repercussions still felt in bilateral relations today.</p> <p>Apparently spontaneous expressions of nationalism such as these are very useful for Beijing. It is an argument that researchers such as associate professor of government at Cornell University Jessica Chen Weiss have been following for years. Whereas a Chinese state-led ban would provoke accusations of protectionism, a popular backlash is more like a high-pressure pot – the government would do little more than lift the lid and let it boil over, seeming to be helplessly standing back as patriotic consumers defend their “national champion”. Indeed, it is easy to see how the Chinese government could claim its hands are tied in such cases. After all, it has increasingly built its legitimacy on the back of nationalism. Beijing would undermine itself if it took action against nationalist sentiment.</p> <h4>European economies are vulnerable to a popular backlash from China</h4> <p>European economies are particularly susceptible to the threat of a popular backlash from China. While other countries like Australia have excluded Huawei from their 5G networks, their trade with China is primarily based on resources such as iron ore, metals and gold. In 2017, these and all mineral products made up over 85% of Australian exports to China. European trade with China, by contrast, is far more consumer-based, with cars and motor vehicles making up over 20% of exports in 2018.  </p> <p>However, if China decided to let patriotic consumers vent their anger against foreign trade partners, this would sure increase tensions. Japan has already decided to ban Huawei from public procurement, but their mistrust of China is so great that a popular protest would be unlikely to make them waver.  </p> <p>By the same token, the Chinese government should have an interest in keeping relations with European countries friendly. Economically, the EU is China’s second largest trading partner – in 2018 it imported US$465 bn worth of goods, making up 3.42% of China’s GDP that year. Indeed, against the background of rising tensions with the US, it might seem sensible for Beijing to tread carefully in its relations with Europe.</p> <h4>So far, there is no united front for Huawei on Chinese social media</h4> <p>What’s more, the question arises whether a ban on Huawei would be enough to incite real, tolerated or orchestrated, political action from the bottom up. Previous instances of Chinese consumer boycotts usually concerned China’s national sovereignty. While Huawei does receive a lot of cheering on Chinese social media, debates on Weibo about whether European countries will ban Huawei go in a different direction: either Europe is ridiculed for falling behind, or the US is blamed for bullying. Nor is there a united front on Weibo for Huawei – a substantial number of users root for other Chinese brands when decisions about Huawei are publicized, or criticize the company for exploiting its Chinese employees. There are frequent references to the “251” scandal, in which a former longtime Huawei employee was wrongfully detained for eight months.</p> <p>Of course, the Chinese government could attempt to orchestrate an ad hoc popular protest through state media. But that would undermine the credibility of its claim that it has little to no control over grassroots sentiment. It seems far more likely that popular nationalism will only be instrumentalized for foreign policy purposes if it is a genuine wave that the Chinese government can ride – and that, at present, does not exist.  </p> <p>For now, at least, China’s pressure on European countries is likely to come from its embassies, rather than Chinese consumer protests. The relevant actors in Beijing might take into consideration that unleashing popular collective action could do more damage than good to the economy – or unleash social forces that will be hard to control.</p> <p><strong>About the author:</strong></p> <p><strong>Linda Liang </strong>is a BA student at the University of Heidelberg, where she majors in Political Science and Sinology. Her thesis project is focused on protests, or the absence of protests, in China in the context of the US-China trade conflict. She is an intern in the Foreign Relations Program at MERICS from January until the end of March 2020.</p> <p><em>The views expressed in this article are those of the author and not necessarily reflect those of the Mercator Institute for China Studies.</em></p></div> </div> </div> Fri, 27 Mar 2020 12:12:14 +0000 h.seidl 11306 at https://www.merics.org China’s fight against COVID-19 - Clicking for a cure https://www.merics.org/en/blog/chinas-fight-against-covid-19-clicking-cure <span>China’s fight against COVID-19 - Clicking for a cure </span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Wed, 03/18/2020 - 22:01</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="2020-03-19T12:00:00Z">2020-03-19</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/kai-von-carnap" hreflang="en">Kai von Carnap</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>In its fight against the spread of the Coronavirus, Beijing is placing an awful lot of faith in untested AI and big data applications. Kai von Carnap says the world should use these new tools with caution. </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/2020-03/Facemask_smartphone_Benjawan%20Sittidech%20via%20123rf.jpg?itok=-e5ana1E 325w, /sites/default/files/styles/max_650x650/public/2020-03/Facemask_smartphone_Benjawan%20Sittidech%20via%20123rf.jpg?itok=WipTEg1A 650w, /sites/default/files/styles/max_1300x1300/public/2020-03/Facemask_smartphone_Benjawan%20Sittidech%20via%20123rf.jpg?itok=4PQPwrp0 1300w, /sites/default/files/styles/max_2600x2600/public/2020-03/Facemask_smartphone_Benjawan%20Sittidech%20via%20123rf.jpg?itok=wEoaTvjI 2508w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2020-03/Facemask_smartphone_Benjawan%20Sittidech%20via%20123rf.jpg?itok=-e5ana1E" alt="A young man wearing a face mask takes a look on his smartphone." title="Image by Benjawan Sittidech 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"><span><span>The Covid-19 epidemic is profoundly changing the trajectory of China’s digital development and the role of artificial intelligence (AI), big data and other technologies. Rushing out virus-fighting digital solutions over the last couple of months has led to an even deeper friendship between Beijing and China’s tech giants. The Chinese Communist Party (CCP) is taking great risks to rollout barely tested large-scale digital solutions ­– that are likely to </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>prove</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> flawed.</span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Anyone running an online business in China in early 2020 will have a hard time hiding their glee. During the long weeks at home, many of the quarantined embraced the digital age to enjoy surprisingly bearable daily routines compared to epidemics of old times. Food delivery services, online education platforms and conference call conveners saw demand jump and e-commerce platforms saw sales – of anything from hair trimmers to game consoles – spike.</span></span></span></span></span></span></span></p> <h4><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>China’s tech giants have been essential in tackling the epidemic</span></span></span></span></span></span></span></h4> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The CCP has recently cosied up to these online and technology companies, but not simply because they provide digital bread and games. China’s tech giants have proven themselves to be essential in tackling the corona epidemic: some have helped uphold the image of a successful national crisis management, for example, by combining facial recognition with the screening of body temperatures </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>at railway stations; others have helped reduce the evaluation time of corona tests from 10-15 minutes to only 20 seconds</span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>.</span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>This has created the hope that emerging technologies will be the key to solving the corona crisis. After Hangzhou was locked down on 4 February, the district government enlisted Alibaba to come up with a digital solution. Only five days later the “Hangzhou Health Code” (</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>杭州健康码</span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>) </span></span></span><a href="https://zjnews.zjol.com.cn/zjnews/hznews/202002/t20200218_11682094.shtml"><span><span><span>went live</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>, an app that estimates the likelihood of users having contracted the virus. After volunteering information about travel history, links to confirmed cases and self-assessed health status users get a QR-code with one of three colors: green for “allowed to move freely”, orange for “recommended for seven-day quarantine”, red for “recommended for 14-day quarantine”.</span></span></span></span></span></span></span></p> <h4><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Virus contraction screening apps proved unreliable</span></span></span></span></span></span></span></h4> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>The app issued more than seven million QR-verdicts in three days. Most </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Hangzhou residents were given the green QR-codes, with which they could gain access to supermarkets or public transport. But the app also issued </span></span></span><a href="https://www.abacusnews.com/tech/chinas-qr-health-code-system-brings-relief-some-and-new-problems/article/3051020"><span><span><span>316,000 red codes</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>, to the frustration of many. Users reported inexplicably receiving red or orange codes, even after </span></span></span><a href="https://www.zhihu.com/question/371151301"><span><span><span>self-isolating for up to 20 days</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span> before the app’s roll out or returning to Hangzhou from corona-free regions. That led to questions about the reliability of green codes: some recipients reported they had not </span></span></span><a href="https://www.zhihu.com/question/372917085"><span><span><span>disclosed their </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>symptoms</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>, others were more honest and surprised to get a green code. </span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Despite tens of thousands of complaints and apparent inaccuracies, similar health check apps were </span></span></span><a href="https://www.prnewswire.com/news-releases/health-qr-code-in-chinas-hangzhou-lends-steam-to-safe-orderly-work-resumption-301019208.html"><span><span><span>introduced in over 200 cities</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>, often </span></span></span><a href="https://www.rfa.org/mandarin/yataibaodao/huanjing/hx2-03042020111216.html"><span><span><span>replacing temperature checks</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span> and </span></span></span><a href="http://theindependent.sg/stories-from-china-life-under-lockdown-in-hangzhou/"><span><span><span>government issued paper clearances</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>. It is</span></span></span> <span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>not known how many green and red flags have been wrongly issued in Hangzhou and </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>how well this QR-code system can predict the spread of the virus. Alibaba would not be the first company to fail at such a task. </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Google Flu Trends (GFT) was launched in 2008 to predict the spread of flu based on users’ online searches. The project was abandoned in 2015 after it wrongly predicted a series of influenza waves.</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>GFT discovered it could not produce useful virus predictions by relying on users’ input as a main variable. Tracking mobile phones may be a more advanced approach, but the </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Hangzhou Health Code and apps like it still rely on </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>individuals’ input because other variables are too vague: </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Covid-19 transmission is not fully understood, satellite navigation is only accurate to within a few meters, people may not always carry their phones. Combining unreliable proxies of the virus’ spread does not make them reliable. These new </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>data-driven systems are inevitably producing erroneous results</span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span> – false positives and false negatives.</span></span></span></span></span></span></span></p> <h4><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>China’s government still wants more IT to support epidemic prevention</span></span></span></span></span></span></span></h4> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>But enthusiasm for tech-based cures is proving contagious. </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>China’s Ministry of Industry and Information Technology (MIIT) </span></span></span><a href="http://www.miit.gov.cn/n1146295/n1652858/n1652930/n3757022/c7702684/content.html"><span><span><span>wants more</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span> “next-generation information technology to support epidemic prevention“ – specifically by using artificial intelligence, big data, cloud computing to “analyze epidemic situations, personnel flow, and community management“. </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>It has </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>enlisted</span></span></span> <span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>China’s three telecoms companies to </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>roll out their version of the Alibaba-inspired mobile app. The</span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span> “</span></span></span><a href="http://www.miit.gov.cn/n973401/n7647394/n7647404/c7749485/content.html"><span><span><span>Information Big Data Itinerary Pass</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>” (</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>通信大数据行程卡</span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>) now tracks China’s 1.6 billion mobile phones and allows its owners to check their health status.</span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The apps help Beijing in other ways, too. They are helping</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> businesses to regain confidence, hence reviving the economy and reconnecting international supply chains</span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>. And they are establishing </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>large data troves that perfect China’s surveillance apparatus, with little public pushback</span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>. According to the New York Times, personal data collected by the Information Big Data Itinerary Pass is sent </span></span></span><a href="https://www.nytimes.com/2020/03/01/business/china-coronavirus-surveillance.html"><span><span><span>to police servers</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span> – creating a </span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>real-time surveillance map of China’s online population. MIIT has said it wants to </span></span></span><a href="https://www.chainnews.com/articles/365789423215.htm"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>keep using the tool</span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> even after the epidemic</span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>.</span></span></span></span></span></span></span></p> <h4><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Countries affected by Corona should resist the illusion of tech-driven quick fixes</span></span></span></span></span></span></span></h4> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The COVID-19 pandemic will no doubt produce technological breakthroughs in diagnosis and treatment. But l</span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>ifting proven disease control measures – like temperature checks – and sacrificing privacy for hastily coded and untested predictive algorithms ­– based on users’ self-assessments – will not be among them. Indeed, the new AI and big data tools could breed an overconfidence that </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>might prolong the spread. More and more countries around the world are turning to mobile phone data to fight the coronavirus waves engulfing them, including </span></span></span><a href="https://www.zeit.de/digital/mobil/2020-03/coronavirus-infektionen-handydaten-robert-koch-institut"><span><span><span>Germany</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span> and </span></span></span><a href="https://www.ynet.co.il/articles/0,7340,L-5697672,00.html"><span><span><span>Israel</span></span></span></a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>. They should resist the illusion of tech-driven quick fixes ­– and acknowledge the risk that the virus could re-emerge from within China.</span></span></span></span></span></span></span></p></div> </div> </div> Wed, 18 Mar 2020 21:01:38 +0000 komprakti 11251 at https://www.merics.org Open source of trouble: China’s efforts to decouple from foreign IT technologies https://www.merics.org/en/blog/open-source-trouble-chinas-efforts-decouple-foreign-it-technologies <span>Open source of trouble: China’s efforts to decouple from foreign IT technologies</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Tue, 03/10/2020 - 14:33</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="2020-03-18T12:00:00Z">2020-03-18</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/caroline-meinhardt" hreflang="en">Caroline Meinhardt</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>Chinese tech companies are turning to European suppliers and collaborative projects to cut their reliance on US suppliers. Caroline Meinhardt says Europe faces some tough choices. </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/2020-03/200318_Huawei%20Harmony%20OS_%20thamkc%20via%20123rf.jpg?itok=usuGZTAu 325w, /sites/default/files/styles/max_650x650/public/2020-03/200318_Huawei%20Harmony%20OS_%20thamkc%20via%20123rf.jpg?itok=VgGpWSFS 650w, /sites/default/files/styles/max_1300x1300/public/2020-03/200318_Huawei%20Harmony%20OS_%20thamkc%20via%20123rf.jpg?itok=6YJXNZNV 1300w, /sites/default/files/styles/max_2600x2600/public/2020-03/200318_Huawei%20Harmony%20OS_%20thamkc%20via%20123rf.jpg?itok=abUt26op 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2020-03/200318_Huawei%20Harmony%20OS_%20thamkc%20via%20123rf.jpg?itok=usuGZTAu" alt="Huawei&#039;s very own open-source operating system, HarmonyOS, which the company hopes will allow it to substitute Android permanently." title="Huawei&#039;s very own open-source operating system, HarmonyOS. Image by thamkc 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"><span><span>When the United States and China signed their “phase one” trade agreement in January, many hoped it signaled a thaw in the US-China trade relationship. But having experienced the devastating effect of US export controls, Chinese companies are now more determined than ever to end their dependency on American technology. Huawei’s Mate 30 is one shiny example: Unveiled four months after the Chinese telecoms giant landed on the US’ “Entity List,” the smartphone producer </span></span></span><a href="https://www.wsj.com/articles/huawei-manages-to-make-smartphones-without-american-chips-11575196201?mod=article_inline"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>replaced</span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> US audio chips and power amplifiers with Dutch and Chinese-made alternatives.</span></span></span></span></span></span></p> <h4><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Open-source research collaborations could make up for export controls</span></span></span></span></span></span></h4> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Ideally, of course, Beijing would like to decouple completely from foreign technology. So, while European companies are benefitting for now as China turns its back on US suppliers, this advantage will likely be short-lived. European interests are also at stake in the global open-source projects that China sees as an opportunity to move towards technological self-sufficiency. As China’s decoupling accelerates, Europe will have to assess its position within the triangle it forms with the US and China and find a way to evaluate commercial and academic technology relationships with China.</span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>Open-source research collaborations, in particular, are seen by China’s tech industry as a promising way to </span></span></span></span></span><a href="https://www.ft.com/content/c6993200-1ff3-11ea-b8a1-584213ee7b2b"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>make up for</span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span> US export controls. Open-source projects are communities in which hardware design or software code are made freely available for anyone to use, modify and redistribute – an alternative to commercial licenses sold by large technology companies. Amid fears that the US might permanently bar Chinese companies from access to its hard- and software, Chinese IT-industry officials </span></span></span></span></span><a href="http://hb.people.com.cn/n2/2020/0114/c192237-33714590.html"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>think</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span> open-source projects will give them secure access to technologies because they are not controlled by any one foreign country.</span></span></span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>One example is the open-source chip project RISC-V (pronounced “risk-five”). The project’s collaborative community includes global technology giants like Google, Alibaba and Huawei, and Dutch chipmaker NXP. Since 2015, they have jointly developed chip-design standards that companies and researchers can use free-of-charge to develop their own processors. China has fully embraced RISC-V: In 2018, several government entities helped </span></span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>found</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span> the “China RISC-V Alliance.” Made up of leading academic research institutes and private companies, the alliance aims to spur the development of China’s own open-source chip ecosystem. </span></span></span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>And, indeed, initial Chinese RISC-V success stories hint at a future where Chinese chip companies no longer depend on foreign chip-design licenses from the likes of Intel or ARM. Last year, Alibaba’s chip subsidiary Pingtouge and wearable device company Huami garnered attention for their </span></span></span></span></span><a href="https://www.techtimes.com/articles/244794/20190729/chinas-alibaba-unveils-worlds-most-powerful-risc-v-processor-xuantie-910.htm"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>Xuantie 910</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span> and </span></span></span></span></span><a href="https://www.gizmochina.com/2018/09/17/huami-huangshan-no-1-world-first-ai-powered-wearable-chipset/"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>Huangshan No.1</span></span></span></span></a><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> chips, </span></span></span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>their first artificial intelligence (AI) chips designed entirely with RISC-V instruction-set architecture. </span></span></span></span></span></span></span></span></p> <h4><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>An open-source software ecosystem is key to technological self-sufficiency</span></span></span></span></span></span></h4> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>China is also pursuing open-source software projects. Cut off from Google’s Android software, Huawei is relying on the open-source version of Android for its smartphones while rolling out its very own open-source operating system, </span></span></span></span></span><a href="https://www.theverge.com/2019/8/9/20798251/huawei-harmonyos-hongmengos-smartphones-internet-of-things-operating-system-android"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>HarmonyOS</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>, which the company hopes will allow it to substitute Android permanently. Huawei is also </span></span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>planning</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span> to build China’s first open-source software community, by partnering with companies and software developers around the world.</span></span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> A competitive software ecosystem built on open source rather than commercial licenses would be a key step towards technological self-sufficiency.</span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>But this also makes </span></span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>it likely that international open-source collaborations with strong participation from Chinese entities will encounter more and more political resistance from the US. Though RISC-V has not fallen within the scope of US export controls, American lawmakers have already expressed concern that the project advances China’s chip industry. RISC-V last year announced that its foundation would </span></span></span></span></span><a href="https://www.reuters.com/article/us-usa-china-semiconductors-insight/u-s-based-chip-tech-group-moving-to-switzerland-over-trade-curb-fears-idUSKBN1XZ16L"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>relocate</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span> from the US to Switzerland due to members’ concerns that US trade restrictions might jeopardize their work. </span></span></span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>A US crackdown on open-source research cooperation would present Europe with yet another area in which it could find itself squeezed between the US and China  – especially if more open-source collaborations are based in Europe and heavily involve European researchers and companies. The US is already pressuring Europe to stop supplying Chinese companies with core technologies. Dutch chip equipment manufacturer ASML, for example, </span></span></span></span></span><a href="https://www.reuters.com/article/us-asml-holding-usa-china-insight/trump-administration-pressed-dutch-hard-to-cancel-china-chip-equipment-sale-sources-idUSKBN1Z50HN"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>reportedly</span></span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span> had its export license for the sale of chip machinery to China revoked after US Secretary of State Mike Pompeo lobbied the Dutch government. Europe’s commercial and academic research cooperation with Chinese entities could easily become the focus of a wider US pushback.</span></span></span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span><span>Europe must brace for some tough choices. Its technology supply-chains are deeply intertwined with China, and EU-China collaborations have significant commercial and academic value, particularly in the area of emerging technologies. Decoupling from China on the scale envisaged by the US would be highly costly to Europe’s companies and citizens. Europe will have to balance its economic imperatives and political concerns. </span></span></span></span></span></span></span></span></p> <h4><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Europe must prepare better for more “Huawei moments”</span></span></span></span></span></span></h4> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>This year will be key in determining the scale and global impact of US and Chinese efforts to decouple in high-tech. The US government is poised to </span></span></span><a href="https://www.reuters.com/article/us-usa-huawei-tech-restrictions/pentagon-expected-to-back-additional-huawei-restrictions-source-idUSKBN2062WI"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>decide regarding</span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> regulatory changes that would significantly expand the scope of US export restrictions – possibly requiring European companies still able to do business with Huawei to apply for export licenses. An overall tightening of export controls and heightened attention to their enforcement could also throw the spotlight on China’s ability to use open-source technology cooperation to circumvent export controls, and initiate discussions about the risks of public and private European research cooperation with China.</span></span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Europe must define its own position as these new dangers loom. It needs a robust mechanism for balancing the risks of research cooperation with Chinese institutions against their commercial and academic opportunities – open source included. The tumultuous debate about Huawei’s participation in European 5G networks foreshadows many more debates about the Europe-China technology relationship. Without a strategy, Europe risks falling prey to US and Chinese pressure and losing control over critical decisions that will determine its technological future. Europe must prepare better for more “Huawei moments”.</span></span></span></span></span></span></p></div> </div> </div> Tue, 10 Mar 2020 13:33:12 +0000 komprakti 11191 at https://www.merics.org Exposure to China: A reality check https://www.merics.org/en/blog/exposure-china-reality-check <span>Exposure to China: A reality check</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Mon, 03/02/2020 - 14:40</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="2020-03-06T12:00:00Z">2020-03-06</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/lucrezia-poggetti" hreflang="en">Lucrezia Poggetti</a>, <a href="/en/team/max-j-zenglein" hreflang="en">Max J. Zenglein</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span>As European governments debate whether to allow Huawei to build critical 5G infrastructure, fears of economic retaliation by China play a major role in their thinking. While this is a legitimate concern, it would be a mistake if such concerns were allowed to dominate decision-making on strategic issues, argue Lucrezia Poggetti and Max J. Zenglein.</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/2020-03/200306_EU_Flag_andreykuzmin_123rf.jpg?itok=8isZziHe 325w, /sites/default/files/styles/max_650x650/public/2020-03/200306_EU_Flag_andreykuzmin_123rf.jpg?itok=jRUX0Ylc 650w, /sites/default/files/styles/max_1300x1300/public/2020-03/200306_EU_Flag_andreykuzmin_123rf.jpg?itok=XyLHTc3b 1300w, /sites/default/files/styles/max_2600x2600/public/2020-03/200306_EU_Flag_andreykuzmin_123rf.jpg?itok=nWnAQCB0 2508w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2020-03/200306_EU_Flag_andreykuzmin_123rf.jpg?itok=8isZziHe" alt="Flag of the European Union in front of the Berlaymont Building, Brussels" title="Image by andreykuzmin 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>China certainly has serious economic weight, and its market is increasingly important to some European countries, but its real retaliatory power is often overstated. Governments across Europe tend to overlook an obvious fact: the EU single market- not China - is by far their most important source of economic growth.</p> <h4>Following the Chinese call</h4> <p>As part of accelerated Chinese Outbound Foreign Direct Investment starting around 2012, Europe began to emerge as a preferred investment destination. A surge in Chinese companies’ activities to diversify their portfolio abroad resulted in mergers and acquisition of technology assets in the wealthiest European countries, and infrastructure investment in Europe’s periphery.</p> <p>Against this backdrop, China sought to institutionalize political and economic cooperation with EU members, both bilaterally and through sub-regional formats. In the aftermath of the eurozone crisis and in the context of rising euroskeptic movements, Beijing benefited from the perception that China could offer attractive economic opportunities in the face of weak GDP growth and be an alternative to Brussels. The launch in 2013 of China’s global trade and infrastructure project, the Belt and Road Initiative (BRI), further reinforced this perception. This has prompted European governments to sign Memoranda of Understanding (MoUs) with Beijing in hopes of securing economic benefits.<span> <span> </span></span>At the same time, they made sure to avoid criticism of China for fear of losing out on such opportunities.</p> <p>Now, the threat of Chinese retaliation if governments decide to exclude or limit the role of telecom equipment provider Huawei in their countries’ 5G is making countries that are more dependent on the Chinese market think twice. However, a look at the numbers shows that European nations have less reason to be afraid than one might expect.</p> <h4>A narrative of dependency</h4> <p>In 2018, the EU single market accounted for on average 66.1 percent total exports of the individual EU 27 members plus the United Kingdom, against an average of 2.4 percent going to China.<span> <span> </span></span>For member states (and the UK) exports outside the single market, the share of exports to the US was on average 9.3 percentage points larger than those going to China.</p> <p>These figures should help put the importance of the Chinese market for European economies in perspective and debunk the narrative that China is a source of unlimited economic opportunities. By the same token, these figures show the limits of China’s retaliatory power vis-à-vis European countries and indicate an untapped potential for the EU to leverage its economic power in relations with Beijing. In some states, the narrative about economic dependency on China is likely driven by an over-exposure of some large corporates, such as the German automotive industry, which is heavily invested in the country.</p> <p>Despite this reality, the economic opportunity/retaliation argument is still disproportionately affecting how governments think about China, including on issues that have strategic and national security implications. It is possible that Chinese ambassadors’ activism across Europe is contributing to this perception.</p> <h4>Ambassadorial pressure</h4> <p>In December 2019, Beijing’s envoy in Berlin, Ambassador Wu Ken, said that “If Germany were to make a decision that led to Huawei’s exclusion from the German market, there would be consequences. The Chinese government will not stand idly by.” Members of the Bundestag are convinced that in case of an unfavorable decision on Huawei, Beijing would go after the German car industry in China.</p> <p>It turns out that Germany–which along with France has promoted itself as a leading force behind a coordinated European China policy - may be the EU member state most vulnerable to Beijing’s pressure in bilateral economic relations. In Europe, Germany has the highest share of exports to China (7.1 percent of its total exports, and 17.3 percent of its exports outside of the EU in 2018 according to Eurostat), far above the EU member state average of 2.4 percent and 7.3 percent respectively. German investment in China is also the highest in the EU. The Chinese market is particularly vital to German carmakers. Volkswagen, for example, generates almost half of its revenue in China. All together BMW, Daimler, and Volkswagen made over one-third of their car sales in the People’s Republic in 2018. In January 2019, the influential Federation of German Industries (BDI) urged companies to reduce their dependence on the Chinese market in response to China’s selective market opening and its ambitious industrial policy, which aims at reducing its reliance on foreign companies.</p> <p>However, while China and the US are Germany’s single most important export markets outside the EU (7.1 percent and 8.7 percent respectively), its export markets are highly diversified, with the EU single market accounting for 59 percent of exports in 2018. So even though Germany is far more exposed than other member states to both the United States’ and China’s retaliatory power, its overall economic dependency on China is smaller than it is often made out to be, and not enough to justify an accommodating position on strategic issues.</p> <h4>Growing disappointment with China</h4> <p>For years, European governments’ China policies were based on the premise that maintaining friendly political relations, even at the expense of standing up for their own values and interests, was key to unlocking special economic treatment in bilateral relations. Euroskeptic governments have been especially keen on showing Brussels that they had an economic alternative in China. This has made them<span> <span> </span></span>cautious not to upset Beijing - an approach that has occasionally extended to economic policy, for example when the previous Italian government worked to water down and eventually abstained from voting on the EU investment screening framework that its predecessors in Rome had asked the European Commission to draw up.</p> <p>Different European countries are now starting to be more clear-eyed about the gap between China’s promises and the trade and investment reality. For example, the Chinese market still only plays a minor role in the economy of the twelve eastern EU states that are part of the 17+1 framework for cooperation with China. They all joined the China-led format and signed BRI MoUs to cash in on Beijing’s promises for trade and investment. But on average, exports to China still only account for 1.4 percent of their total exports, and Chinese investment has continued to flow to western Europe, neglecting their region. Some of the format’s members, like Poland and the Czech Republic, have voiced their disappointment. Importantly, an average of 72.4 percent of these 12 countries’ total exports go to the EU internal market.</p> <p>Italy finds itself in a similar situation. The previous euroskeptic government signed a BRI MoU with the stated goal of exporting more to China. However, Italian exports to China declined in 2019, and the Chinese market still accounts for just 2.8 percent of its total exports, compared with 56.6 percent of exports that go to the EU single market. Rome is now also taking a more realistic approach to China and has joined Berlin, Paris, and Warsaw in the push to revise EU competition policy to stand up to China and the US.</p> <h4>Learning from China’s neighbors</h4> <p>While countries like Germany, the UK, and Finland are slightly more reliant on the Chinese market, lessons from Japan, South Korea, and Taiwan show that economic dependency does not have to translate into an accommodating position toward China.</p> <p>Beijing’s East Asian neighbors depend much more strongly than European countries on China (individually, their export share to China was between 20 and 30 percent in 2018). However, they are forced to adopt a comprehensive approach that goes far beyond economic interests and factors in national security considerations, not least because of their proximity to China, which they see as a strategic rival. When Beijing weaponized its economic power against them in the past - for example over the Senkaku/Diaoyu islands dispute with Japan or over South Korea’s deployment of the THAAD missile shield - they took measures to foster economic sovereignty in response, effectively limiting China’s economic leverage instead of giving in to Chinese pressure.</p> <p>European governments should learn from East Asian nations. They should put strategic considerations first and not be overly worried about China’s economic retaliation. This requires growing more comfortable with compartmentalizing the relationship into areas of cooperation and competition. In addition, while the Chinese backlash temporarily hit individual companies (e.g. South Korea’s Lotte), economic ties between China and the three East Asian nations have remained stable overall.</p> <p>Indeed, another lesson from China’s immediate neighbors is that while Beijing would quickly take advantage of a Europe that was being too accommodating, it is unlikely to substantially follow through on its threats. If Europe took more measures to promote economic sovereignty, China would most likely adapt its own approach in order to continue profiting from good relations with the EU and its members instead of jeopardizing this crucial relationship.</p> <p>After all, European countries shouldn’t forget that close economic ties run both ways: the EU is China’s most important trading partner. China needs the EU bloc economically and geopolitically in its competition for global leadership with the United States. As Brussels works to rebalance its economic and political relationship with Beijing, leveraging the EU’s economic power should be part of the solution.</p> <p><em>This article was first published on February 26, 2020 by the <a href="https://berlinpolicyjournal.com/exposure-to-china-a-reality-check/">Berlin Policy Journal.</a></em></p></div> </div> </div> Mon, 02 Mar 2020 13:40:50 +0000 komprakti 11176 at https://www.merics.org WHO has Chinese characteristics? https://www.merics.org/en/blog/who-has-chinese-characteristics <span>WHO has Chinese characteristics?</span> <span><span lang="" about="/en/user/286" typeof="schema:Person" property="schema:name" datatype="">h.seidl</span></span> <span>Wed, 02/26/2020 - 11:42</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="2020-03-04T12:00:00Z">2020-03-04</time> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p>Thomas Geddes</p> <p><strong>The WHO’s excessive acclaim of China’s response to the coronavirus is a sign of Beijing’s growing sway over the UN agency, says Thomas Geddes.</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/2020-02/WHO%20Flag%20%20chelovek%20via%20123rf.jpg?itok=WriE4V_6 325w, /sites/default/files/styles/max_650x650/public/2020-02/WHO%20Flag%20%20chelovek%20via%20123rf.jpg?itok=wKm6eYNz 650w, /sites/default/files/styles/max_1300x1300/public/2020-02/WHO%20Flag%20%20chelovek%20via%20123rf.jpg?itok=Jg-N4dbo 1300w, /sites/default/files/styles/max_2600x2600/public/2020-02/WHO%20Flag%20%20chelovek%20via%20123rf.jpg?itok=kzDoSfy4 2470w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2020-02/WHO%20Flag%20%20chelovek%20via%20123rf.jpg?itok=WriE4V_6" alt="WHO flag" title="Ties between Beijing and the WHO have been strengthening and their cooperation increasing. Image by chelovek 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><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>As the Director-General of the World Health Organization (WHO) declared China’s coronavirus outbreak a “public health emergency of international concern” on January 30, he <a href="https://www.who.int/dg/speeches/detail/who-director-general-s-statement-on-ihr-emergency-committee-on-novel-coronavirus-(2019-ncov)">praised</a> China’s “<a href="https://www.youtube.com/watch?v=yz4vfoN9oUk">impressive</a>” leadership for “setting a new standard for outbreak response” and urged “other countries globally to have that kind of political commitment”. Tedros Adhanom Ghebreyesus’s plaudits were a godsend for a Chinese Communist Party (CCP) grappling with one of its gravest challenges since Tiananmen ­– but a blow to the WHO's credibility as an independent and trusted organisation.</span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>For sure, Beijing does deserve some praise. Since its belated acknowledgement of the severity of the problem, its engagement with the international community has been remarkable. Not many countries would have been able to respond to such a crisis the way China has. It has deployed legions of doctors to Wuhan, the epicentre of the coronavirus outbreak, <a href="https://www.wsj.com/articles/how-china-can-build-a-coronavirus-hospital-in-10-days-11580397751">built hospitals</a> in days and, somewhat controversially, quarantined tens of millions of its citizens. The entire country has slowed down to a crawl, but China seems as if it may be winning.  </span></span></span></span></span></span></span></p> <h4><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span><span>The WHO refrained from addressing Beijing’s failings</span></span></span></span></span></span></span></span></h4> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>But there is also much to criticise. Despite Beijing’s belated yet praiseworthy efforts, CCP censorship and stringent controls over the flow of information have led to deplorable results. The government initially <a href="https://www.nytimes.com/2020/02/01/world/asia/china-coronavirus.html">silenced doctors</a>, claimed that no new cases were emerging and covered up mounting evidence of human-to-human transmission of the disease. Not until <a href="https://www.poynter.org/fact-checking/2020/the-2019-coronavirus-virus-lands-in-the-u-s-after-killing-17-and-taking-eight-to-prison/">January 20</a> did the central government start warning its citizens of the seriousness of the outbreak. Only three days later, Wuhan was placed under total lockdown. </span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>But by then the damage had already been done. Some <a href="https://www.businessinsider.com/quarantine-history-following-china-wuhan-coronavirus-lockdowns-2020-1?r=US&amp;IR=T#the-wuhan-coronavirus-has-resulted-in-the-largest-quarantine-in-human-history-15">five million</a> people had been allowed to leave the city and the virus was spreading quickly across the country as well as being carried abroad. On January 26, Zhou Xianwang, the mayor of Wuhan, <a href="https://www.csis.org/analysis/novel-coronavirus-outbreak">apologised</a> for his mishandling of the outbreak, but stated that “as a local government official, after I get [sensitive information about the spread of a disease] I still have to wait for authorisation before I can release it”. He was saying, in other words, that Beijing was also to blame.</span></span></span></span></span></span></span></p> <h4><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>China’s growing influence over the WHO</span></span></span></span></span></span></span></h4> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Yet the WHO has proved unwilling to suggest such a thing. What’s more, on the day of Wuhan’s lockdown, the WHO decided against declaring a Public Health Emergency of International Concern (PHEIC), citing an absence of human-to-human transmission cases outside China. There is now little doubt that <a href="https://asia.nikkei.com/Spotlight/Coronavirus-outbreak/Did-WHO-s-China-ties-slow-decision-to-declare-emergency">China pushed</a> for this decision, fearing that such a declaration would hurt its economy. Only after meeting with President Xi Jinping in Beijing a few days later did Tedros declare a PHEIC — when the disease had already infected some 10,000 people and spread to at least <a href="https://www.nytimes.com/2020/01/30/world/asia/coronavirus-china.html">18 other countries</a>. </span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>China’s increasing sway over the WHO appears to have affected other officials who should know better, too.  Why else would Michael Ryan, head of the UN agency’s Health Emergencies Program, have sought to defend China on January 29 by <a href="https://www.who.int/docs/default-source/coronaviruse/transcripts/who-audio-script-ncov-rresser-unog-29jan2020.pdf?sfvrsn=a7158807_4">claiming</a>, quite erroneously, that “since the very beginning of this, they [the Wuhan authorities] have had red alerts and they’ve been warning the population”? “In fact”, he continued, “I think it’s probably state-of-the-art in terms of the amount of information that’s been published.”</span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Some observers have rightly <a href="https://www.ft.com/content/57c6a1d6-49a7-11ea-aeb3-955839e06441">argue</a><span><span>d</span></span> that criticism of China could have aggravated the crisis by putting the country on the defensive and prompting it to share less information. But was there no middle ground to be found between “face-losing” criticism of China and overblown – and possibly misleading – praise? The WHO did not need to condemn China, but could have refrained from both praising Beijing excessively and making spurious statements.</span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Compare Tedros’s <a href="https://www.who.int/docs/default-source/coronaviruse/transcripts/who-audio-script-ncov-rresser-unog-29jan2020.pdf?sfvrsn=a7158807_4">comments</a> at the outset of the outbreak that the CCP was “completely committed to transparency both internally and externally” and that he would “praise China again and again”, with former WHO director-general Gro Harlem Brundtland’s thinly veiled criticism of China during the SARS outbreak in 2003. “It would have been better if the Chinese government had been more open in the early stages,” <a href="https://books.google.co.uk/books?id=RToshuVf99QC&amp;pg=PA101&amp;dq=%22it+would+have+been+better+if+the+Chinese+government+had+been+more+open+in+the+early%22&amp;hl=en&amp;sa=X&amp;ved=0ahUKEwj_jOyrwODnAhWdQEEAHRtEDfwQ6AEIKjAA#v=onepage&amp;q=%22it%20would%20have%20been%20better%20if%20the%20Chinese%20government%20had%20been%20more%20open%20in%20the%20early%22&amp;f=false">she said</a>. “Next time something strange and new comes anywhere in the world, let us come in as quickly as possible.”</span></span></span></span></span></span></span></p> <h4><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>“Win-win relationship” with China also comes at a cost for the WHO</span></span></span></span></span></span></h4> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>Of course, the world has changed over those 17 years. For one thing, China and the international community learned some lessons from the SARS epidemic. But, more importantly perhaps, China has become an economic heavyweight and an expert in dollar diplomacy. </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>In sharp contrast to the Trump administration’s threats to cut global <a href="https://www.latimes.com/politics/la-na-pol-trump-global-health-20170410-story.html">health funding</a> and its <a href="https://www.foreignaffairs.com/articles/china/2019-09-16/coming-soon-united-nations-chinese-leadership-and-authoritarian-values">effective retreat</a> from a number of UN agencies, China has repeatedly demonstrated its firm commitment to supporting the WHO and, more broadly, the UN. Right now, Beijing may not be the WHO’s largest contributor, but its potential to become a major funder is one which Tedros cannot be insensitive to. Indeed, <a href="http://open.who.int/2018-19/country/CHN">Chinese contributions to the WHO’s budget</a> are up by over 50% since 2015.</span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>While ties between Beijing and the WHO have been strengthening, cooperation between the two sides has been increasing, be it along President Xi’s “<a href="https://www.who.int/dg/speeches/2017/health-silk-road/en/">Health Silk Road</a>” or in support of the WHO’s goal of universal health coverage by 2030. China has also become a <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6441123/">major funder</a> of independent health projects across the world, many of which the WHO supports. Last year, after lengthy Chinese <a href="https://edition.cnn.com/2019/05/24/health/traditional-chinese-medicine-who-controversy-intl/index.html">lobbying</a>, the WHO controversially included traditional Chinese medicine in its global medical compendium. </span></span></span></span></span></span></span></p> <p><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>This “win-win relationship”, as Xi might call it, has come at some cost to the WHO – and to the rest of the world. By waiting to declare a PHEIC, the WHO helped accelerate the virus’s spread; and by lavishing praise on Beijing, it helped legitimise an authoritarian regime whose initial cover-ups are now costing the lives of hundreds of people. The world needs a WHO that can not only be trusted, but also respond to epidemics independently from any political interference. </span></span></span></span></span></span></span></p> <p><strong><span><span><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>About the author:</span></span></span></span></span></span></span></strong></p> <p><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><strong>Thomas Geddes</strong> is an intern in the Economic Research Program at MERICS. He has recently completed his Bachelors degree in China Studies at SOAS. He has also studied at Yunnan University in Kunming for three years.</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></p> <p><em>The views expressed in this article are those of the author and not necessarily reflect those of the Mercator Institute for China Studies.</em></p></div> </div> </div> Wed, 26 Feb 2020 10:42:29 +0000 h.seidl 11161 at https://www.merics.org Coronavirus reveals China’s leaders’ obsession with information control https://www.merics.org/en/blog/coronavirus-reveals-chinas-leaders-obsession-information-control <span>Coronavirus reveals China’s leaders’ obsession with information control</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Mon, 02/24/2020 - 11:46</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="2020-02-25T12:00:00Z">2020-02-25</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/nis-grunberg" hreflang="en">Nis Grünberg</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>China’s leaders prize information control over information sharing, even at the risk of delaying actions to curb the spread of a disease. In that sense, the Corona epidemic has laid bare the weakness of centralized, top-down systems of authority, says Nis Grünberg.</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/2020-02/200225_Corona_virus_Community_workers_dpa_picture_alliance_130242196.jpg?itok=NJWXXWbG 325w, /sites/default/files/styles/max_650x650/public/2020-02/200225_Corona_virus_Community_workers_dpa_picture_alliance_130242196.jpg?itok=YHhAQu6m 650w, /sites/default/files/styles/max_1300x1300/public/2020-02/200225_Corona_virus_Community_workers_dpa_picture_alliance_130242196.jpg?itok=FJvRFzgK 1300w, /sites/default/files/styles/max_2600x2600/public/2020-02/200225_Corona_virus_Community_workers_dpa_picture_alliance_130242196.jpg?itok=EGwJoaHx 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2020-02/200225_Corona_virus_Community_workers_dpa_picture_alliance_130242196.jpg?itok=NJWXXWbG" alt="Chinese community volunteers disinfect a residential quarter for prevention of the new coronavirus and pneumonia in Wuhan, Hubei Province in February 2020. " title="Chinese community volunteers disinfect a residential quarter for prevention of the new coronavirus and pneumonia in Wuhan, Hubei Province in February 2020. Image by picture alliance/Costfoto" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The “hero of Wuhan” died on February 7, giving new life to accusations that the Chinese government initially tried to cover up the coronavirus outbreak. Doctor </span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Li Wenliang had been among a group of doctors discussing the earliest cases of the virus on an online chat forum in late December, earning himself a reprimand by local police for “spreading rumors”. For Beijing’s critics, Li‘s passing made him the double victim of a censorship system that had tried to contain information about the outbreak of the virus. This was likely not a targeted cover-up, as claimed by some, but merely routine censorship. </span></span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>China’s leaders are obsessed with information control, tightly managing the spread of “rumors” or information that might threaten social stability or stoke criticism of them. Information about the virus was passed on early – just not to the public. China’s Center for Disease Control and Prevention (CDC) has an online system for reporting cases like coronavirus infections, but discussing them outside the official channels is frowned upon. In a way, both disease reporting and censorship systems worked as they should, recording new diseases, and detecting and containing rumors of the new SARS-like disease before they could spread in public. </span></span></span></span></p> <h4><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Even a Supreme Court judge criticized extreme information suppression</span></span></span></span></h4> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Which is not to say that authorities were right to act as they did. Reporting systems such as the CDC’s are important mechanisms to detect new diseases and outbreaks. But the coronavirus epidemic shows that it didn’t trigger the crisis management response it should, and that China’s leaders prize information control over information sharing, even at the risk of delaying actions to curb the spread of a disease. In fact, censorship has become so extreme, even a judge on China’s Supreme Court criticized the suppression of information shared by Doctor Li and his colleagues, and even </span></span><a href="https://mp.weixin.qq.com/s/Wn3pEjfE47oBOrwEIJ7FVA"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>suggested</span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span> allowing “guided” criticism in the media to serve as a “pressure valve” for public anger.</span></span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The tension between information sharing and information control is one the Chinese system cannot solve. China’s Party-state loathes freely flowing information and discussion and has developed the world’s most sophisticated system of censorship and for steering public opinion in history – and it has internal channels for sharing sensitive information. But the corona crisis shows that these closed channels react slowly. Information asymmetry (local officials suppressing information) and centralized decision-making (officials waiting for commands from above about tricky issues) stand in the way of fast and efficient reactions. </span></span></span></span></p> <h4><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Slow political action was the catalyst of the corona crisis</span></span></span></span></h4> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>China learned from the SARS crisis in 2003, establishing the CDC’s reporting system in 2004. Doctors are required to use it for recording new infections and, when several cases have been recorded in one place, local authorities also have to be informed and the National Health Commission takes over public disclosure about the outbreak. In the case of COVID-2019, this means that both central authorities and local health officials were aware of the outbreak already in December. The catalyst of the corona crisis wasn’t a lack of information, it was slow political action.</span></span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Information was available to medical authorities, but this did not translate into action by political decision-makers. Xi Jinping is reported to have urged officials to act already during a Politburo meeting on January 7, 13 days before the public was alerted. While Wuhan’s medical professionals worked overtime to cope with mounting patient numbers and limited resources, and scientists raced to identify the new virus, political leaders ignored the alerts in order to finish political meetings. This inaction and underestimation of contagiousness was followed by the dramatic quarantining of entire cities ­­– but by this point the virus had already spread widely, including to large number of medical workers. The sacking of the party leaders of both Hubei Province and Wuhan city underscores Beijing’s disappointment with their ill-fated tardiness, while also putting the blame at the local level.</span></span></span></span></span></p> <h4><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>The crisis lays bare the weakness of top-down authoritarian rule</span></span></span></span></span></h4> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The crisis lays bare the weakness of centralized, top-down systems of authority: from hospital policy to provincial lockdowns, important decisions fall to party secretaries juggling conflicting political considerations; specialized departments like the CDC only have advisory but no administrative power. <span><span>Li Wenliang was a double victim of this system and so he became a symbol for two things – the risk medical professionals are taking in fighting the virus at the frontlines and the weakness of a system obsessed with information control and stability. </span></span></span></span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>When news of Li’s death began to circulate, it quickly became one of the top trending topics on social media. Taken aback by the strong public reaction, the system did – again – what it does best. Censors went online to take down reports of his death – only to publicize it officially hours later. Li’s own death had been censored until someone decided the public should know. </span></span></span></span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>China’s authoritarian reflexes remain quick, even or especially in the face of </span></span></span></span><a href="https://www.scmp.com/news/china/politics/article/3050086/coronavirus-hundreds-chinese-sign-petition-calling-freedom"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>calls for free speech</span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>. The system for dealing with outbreaks of diseases will be reformed. Already Xi has </span></span></span></span><a href="http://www.xinhuanet.com/english/2020-02/15/c_138784656.htm?mc_cid=505d00df96&amp;mc_eid=990ede2b0f"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>announced tougher regulation</span></span></span></a><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> on wild game consumption and crisis response. The narrative about fighting the virus – including Doctor Li’s heroic role – has already been taken over by the propaganda department, which has </span></span></span></span><a href="https://www.nytimes.com/2020/02/05/world/asia/china-coronavirus-censorship.html"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>dispatched 300</span></span></span></a><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span> media workers</span></span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span> to Wuhan to guide public opinion down paths positive for Beijing. The center has taken back narrative control, and while important structural reforms will likely follow the outbreak, the Party-state’s obsession with stability, information control, and centralized leadership will live on. </span></span></span></span></span></span></p> <p><em><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span><span>The <a href="https://www.tagesspiegel.de/politik/china-das-coronavirus-und-die-zensur-das-chinesische-krisenmanagement-zeigt-dass-die-kontrollwut-ueber-allem-steht/25570986.html#">German version of this blogpost</a> was first published in Der Tagesspiegel on February 23, 2020.</span></span></span></span></span></span></em></p></div> </div> </div> Mon, 24 Feb 2020 10:46:56 +0000 komprakti 11141 at https://www.merics.org China in 2020: Managing stress factors https://www.merics.org/en/blog/china-2020-managing-stress-factors <span>China in 2020: Managing stress factors</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Fri, 02/21/2020 - 13:52</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="2020-02-21T12:00:00Z">2020-02-21</time> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>By Mary Hennock</span></span></span></span></p> <p><strong><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>As the <a href="https://www.merics.org/en/events/merics-china-forecast-2020">MERICS China Forecast 2020 event</a> opened in Berlin it was already clear the outbreak of deadly coronavirus flu in Wuhan would ratchet up all the key political and economic stress patterns we were asking our panellists to consider. For China, <span>2020 will be shaped by the still-unknowable consequences of the outbreak.</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/2020-02/200221_China%20and%20EU%202020_%20Evgeny%20Gromov%20via%20123rf.jpg?itok=X8KS60LH 325w, /sites/default/files/styles/max_650x650/public/2020-02/200221_China%20and%20EU%202020_%20Evgeny%20Gromov%20via%20123rf.jpg?itok=Y3GCbHxo 650w, /sites/default/files/styles/max_1300x1300/public/2020-02/200221_China%20and%20EU%202020_%20Evgeny%20Gromov%20via%20123rf.jpg?itok=yFjXmMDv 1300w, /sites/default/files/styles/max_2600x2600/public/2020-02/200221_China%20and%20EU%202020_%20Evgeny%20Gromov%20via%20123rf.jpg?itok=7l5orpO9 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2020-02/200221_China%20and%20EU%202020_%20Evgeny%20Gromov%20via%20123rf.jpg?itok=X8KS60LH" alt="EU-China relations in 2020" title="2020 is a critical year not only for the CCP but also for EU-China relations. Image by Evgeny Gromov 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 lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>China enters the new decade in a radically different position from 10 years ago. Above all, the international repercussions of China’s problems and solutions have never been greater, as the </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>ongoing debate over Huawei’s involvement in 5G telecoms infrastructures and the </span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>US-China trade tensions show. </span></span></span></span></span></p> <p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>Discussion centred on the CCP’s level of capability in managing stress factors, and the uneasy position Europe finds itself in, caught in the middle of US and China trade tensions. </span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The hazards of managing the coronavirus epidemic and public responses to the government’s approach will go to the heart of China’s political system. </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>Since 2013, the CCP’s approach under Xi Jinping has been deliberately rigid. “</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Never give in an inch, never relent,” was how Volker Stanzel, a former German ambassador to Beijing, described it. </span></span></span></span></p> <h4><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Coronavirus outbreak throws up great risks to Xi’s legitimacy</span></span></span></span></h4> <p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>Participants agreed that how the coronavirus flu outbreak is handled would be crucial for Xi’s authority. An outbreak of deadly flu, with millions of citizens under lockdown, throws up greater risks to legitimacy than even the crisis in Hong Kong, which was felt to be more manageable as it could be presented as due to external factors. </span></span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The structure of China’s p</span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>arty state was perceived as amplifying pressure: “In a </span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>party led dictatorship, every minor crisis is considered a test: Are they up to it? Can they manage it?” said Stanzel. The CCP’s claims to sole legitimacy put it at heightened risk of failure by stimulating scepticism for which there is no other target. </span></span></span></span></span></p> <p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The crisis also demonstrates how China’s tight control of information breaks down when people are so directly affected. MERICS’ Kristin Shi-Kupfer pointed to “</span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>multiple efforts by citizen journalists to make up for lack of information from government” by using mobile phone video from hospital wards. It has enabled “remarkable venting of anger and information sharing despite censorship, and </span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>demonstrates the potential of China’s civil society,” she said. </span></span></span></span></span></p> <h4><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>CCP faces many dilemmas in 2020</span></span></span></span></span></h4> <p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>The febrile situation created by the coronavirus epidemic provides a prism through which to view the CCP’s governance skills in the many dilemmas it faces, in particular the effectiveness of Xi’s reform of the party’s own ranks, the main governance reform on his watch. The CCP also faces other formidable challenges, such as a slowing economy and a policy U-turn by the United States that sharply politicizes their economic relationship. </span></span></span></span></span></p> <p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>China’s economic slowdown is likely to intensify, as Spring Festival sales have been lost. Panellists concluded from the parallel with SARS that economic impacts would not peak before Q2 at best. More broadly, China has shifted towards more consumer- driven growth, with wide implications. This transition is the underlying reason its economy is slowing and has implications for reorganising global supply chains, said Bert Hofman of the National University of Singapore. </span></span></span></span></span></p> <p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>Panellists discussed economic prospects for 2020 and, above all, how the EU and European governments could engage positively to triangulate between twin pressures from China and the United States. A new reality is generating a new realism in Europe, though possibly not fast enough, said Norbert Röttgen, Chairman of the Bundestag’s foreign affairs committee.</span></span></span></span></p> <p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>There was consensus that European businesses will suffer from the US-China ‘Phase One’ trade deal, specifically the procurement clause under which China pledged to buy US goods worth an additional USD 200 billion. European exports will likely drop. The political implications for European trade negotiations – including current talks toward a Comprehensive Agreement on Investment (CAI) hoped for later this year - are that “</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>China uses agreement with the US to downplay agreements with the EU,” saying its choices are limited, warned Francois Godement of Institut Montaigne in Paris. </span></span></span></span></p> <h4><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Europe needs to resist pressure from China and the US </span></span></span></span></h4> <p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>Amid US pressure for Huawei’s exclusion from European 5G infrastructure, the panel explored how to deal with threats of retaliation from the US and China and still pursue the healthy triangulation that corresponds to European interests. </span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>“How will we deal with retaliation and protect our resilience which is based on innovation?” asked </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>Röttgen, who believes 5G is fundamental to European innovation and Huawei’s market access should depend on reciprocity.</span></span></span></span></p> <p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>“</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Anticipating retaliation should not influence the debate,” argued </span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>Max Zenglein, head of economic research at MERICS. </span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Decisions should be independent and informed, guided by </span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>European interests, he said. </span></span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>“We need </span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>an all-weather policy,” agreed Godement, adding that the dramatic US debate on Huawei is not one of principle for Europe: “Decoupling is an interest-based issue, that’s how we should have to deal with it.”</span></span></span></span></p> <p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>The year 2020 will see several significant summits; the EU-China summit in Beijing in spring and a German-led summit in Leipzig with Xi and the EU 27 in September. </span></span></span></span></p> <p><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span>One possible outcome of the Leipzig summit is the CAI, though panellists expect any deal to be minimal. Zenglein hoped high level summits would not be treated as the benchmark for EU-China relations, as it was </span></span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>crucial for long-term European interests to stand up to China’s demands and get progress. “Better to have a high-quality agreement than a showcase,” he said. </span></span></span></span></span></p> <p><strong><span><span><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"><span><span>This event report of a conference held at MERICS on January 28 was compiled by Mary Hennock, a London-based journalist and former correspondent for Newsweek in China whose work has appeared in the Guardian and The Diplomat. For more on China-EU relations and China’s challenges in 2020, see <a href="https://www.merics.org/en/blog/talk-action-europes-relations-beijing-year-ahead">Lucrezia Poggetti’s blog post</a><span lang="EN-GB" xml:lang="EN-GB" xml:lang="EN-GB"> </span>on our recent <a href="https://www.merics.org/en/merics-china-forecast-2020">MERICS survey</a>.  </span></span></span></span></span></strong></p></div> </div> </div> Fri, 21 Feb 2020 12:52:56 +0000 komprakti 11126 at https://www.merics.org Europe’s renminbi dilemma https://www.merics.org/en/blog/europes-renminbi-dilemma <span>Europe’s renminbi dilemma</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Mon, 02/10/2020 - 15:41</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="2020-02-19T12:00:00Z">2020-02-19</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 lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>China is pushing for its currency to be used all over the world and its renminbi trading infrastructure is particularly good in the European Union. Maximilian Kärnfelt says this looks set to bring the Europeans real commercial benefits – and create real geopolitical problems.  </span></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/2020-02/200217_Various%20currency%20banknotes%2C%20dollar%2C%20euro%2C%20yuan_Konstantin%20Kalishko%20via%20123rf.jpg?itok=jdoNZFcc 325w, /sites/default/files/styles/max_650x650/public/2020-02/200217_Various%20currency%20banknotes%2C%20dollar%2C%20euro%2C%20yuan_Konstantin%20Kalishko%20via%20123rf.jpg?itok=mmWECv6n 650w, /sites/default/files/styles/max_1300x1300/public/2020-02/200217_Various%20currency%20banknotes%2C%20dollar%2C%20euro%2C%20yuan_Konstantin%20Kalishko%20via%20123rf.jpg?itok=cM9E_R7f 1300w, /sites/default/files/styles/max_2600x2600/public/2020-02/200217_Various%20currency%20banknotes%2C%20dollar%2C%20euro%2C%20yuan_Konstantin%20Kalishko%20via%20123rf.jpg?itok=fanUUnZI 2507w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2020-02/200217_Various%20currency%20banknotes%2C%20dollar%2C%20euro%2C%20yuan_Konstantin%20Kalishko%20via%20123rf.jpg?itok=jdoNZFcc" alt="Image by Konstantin Kalishko via 123rf" title="Receiving commercial payments in renminbi is no longer as unattractive as it used to be. Image by Konstantin Kalishko 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"><span>Over the past decade, Beijing has attempted to promote its currency by making it easier for foreign investors to buy renminbi and RMB-denominated financial products. Aside from Hong Kong, the resulting rise of the RMB’s international popularity has been most marked in Europe, which accounts for one in ten cross-border RMB transactions. For the region, this is a mixed blessing – it could reap commercial benefit and encounter major strategic risks.</span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Receiving commercial payments in RMB is no longer as unattractive as it used to be. It is now much easier for international businesses to convert RMB-denominated earnings into interest-bearing financial products. This development has been driven largely by China opening its financial markets to Europe by establishing trading infrastructure in the region.</span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>In European financial centers, stock exchanges trading Chinese securities, market-connect mechanisms linking to Chinese exchanges, and RMB clearing banks have sprung up. European business can now settle RMB payments using clearing banks in the UK, France, Luxembourg, Germany, and Switzerland; European bourses are sponsoring special China-exchanges for Chinese securities, like the <a href="https://www.ceinex.com/">China Europe International Exchange</a> that runs on Deutsche Börse’s platform; in June 2019, the <a href="https://www.scmp.com/business/companies/article/3014809/london-shanghai-stock-connect-goes-live-allowing-foreign-firms">London-Shanghai Stock Connect</a> was launched.</span></span></span></span></span></p> <h4><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Europe is second only to Hong Kong when it comes to global cross-border renminbi transactions</span></span></span></span></span></h4> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>As a result, Europe in 2019 was second only to Hong Kong when it came to global cross-border RMB transactions. It <a href="https://www.swift.com/our-solutions/compliance-and-shared-services/business-intelligence/renminbi/rmb-tracker">cleared</a> 9.8 percent against Hong Kong’s 75.5 percent and there is every reason to think Europe’s market share will continue to rise. Much of the European RMB-trading infrastructure described above has only recently been put into place. Given EU-China trade links, this new financial infrastructure looks set to become more popular.</span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Europe will likely reap commercial benefits in the form of increased exports to China. Chinese companies do not have unlimited access to foreign currency with which to pay European counterparts. They will increasingly be able to use RMB instead as it becomes easier for European businesses to invest RMB-earnings in RMB-denominated financial instruments. The flow of goods from Europe to China should pick up as a result and bolster the European economy just as it starts to work through a phase of more sluggish growth.</span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Yet Europe also has reasons to be wary of deepening its financial ties with China. Increasing financial integration will lead to increasing use of the RMB, which will make it far easier for the Chinese state to finance its global economic objectives. China is getting economically ever more active outside its own borders: It is purchasing foreign high-tech companies to secure its future dominance in key industries, and it is bringing large parts of the world closer together through infrastructure investments as part of its Belt and Road Initiative.</span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Currently, The Chinese economy <a href="https://data.worldbank.org/">contributes</a> almost 16 percent of global GDP, while its currency’s share of global cross -border transactions is tiny, around two percent. One result is that China still has to finance most of its foreign projects with US Dollars. But, as the RMB becomes more readily accepted outside of China, this will change. It will China far greater leeway to act outside its borders as a result of being able to use its own currency. </span></span></span></span></span></p> <h4><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Historically, great powers have had currencies accepted around the globe</span></span></span></span></span></h4> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Historically, great powers such as the US ­– and even the UK before that ­– have had currencies that were widely accepted around the globe. They used the power of their currency to wield influence and finance interventions. This power is something that China still lacks, but its many efforts to change this situation do seem to be bearing some fruit. </span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>With China keen to build more RMB-trading infrastructure beyond its borders, European policy makers must be aware of the tradeoff they face between commercial benefits and political costs to the region. More RMB-trading infrastructure will deepen economic ties, raise RMB-use – and bring China another step towards being a financial superpower. </span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>How Europe should react largely depends on which view on the Sino-European relationship will come to prevail in the region. Are Europe and China powers on a collision course, like the US and China? Or are Europe’s and China’s spheres of influence geographically and geopolitically so far apart that there is nothing to fear from a more powerful China?</span></span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Hawkish Europeans would answer that helping China to grow the use of the renminbi is not advisable, and that further moves by Beijing should be resisted. Dovish Europeans would argue that there is little to fear from trade and more trading infrastructure. And both will probably partly prevail Europe will rightly or wrongly increasingly see China as a rival. But as a highly decentralized entity, it will not be able to distill its worries into a coherent policy of disengagement. Europe will continue deepening its economic ties to China and the RMB. </span></span></span></span></span></p> <p><em><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>For more on the topic, read the MERICS China Monitor <span><span><a href="https://www.merics.org/en/china-monitor/chinas-currency-push">“China’s Currency Push”</a> by Maximilian Kärnfelt.</span></span></span></span></span></span></span></em></p></div> </div> </div> Mon, 10 Feb 2020 14:41:16 +0000 komprakti 11066 at https://www.merics.org 5G and Huawei: Europe grapples with risk https://www.merics.org/en/blog/5g-and-huawei-europe-grapples-risk <span>5G and Huawei: Europe grapples with risk</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Mon, 02/17/2020 - 09:09</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="2020-02-18T12:00:00Z">2020-02-18</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/john-lee" hreflang="en">John Lee</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span><span><span>The US and Europe differ on using Chinese companies for next-generation mobile-phone networks. John Lee says that reflects different assessments of whether the benefits can outweigh the risks. </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/2020-02/200217_Chiense%20Huawei%20smartphone%20sells%20in%20Copenhagen_Francis%20Dean%20via%20123rf.jpg?itok=Y4PIDUFy 325w, /sites/default/files/styles/max_650x650/public/2020-02/200217_Chiense%20Huawei%20smartphone%20sells%20in%20Copenhagen_Francis%20Dean%20via%20123rf.jpg?itok=yOYteBHT 650w, /sites/default/files/styles/max_1300x1300/public/2020-02/200217_Chiense%20Huawei%20smartphone%20sells%20in%20Copenhagen_Francis%20Dean%20via%20123rf.jpg?itok=hMGWj1lD 1300w, /sites/default/files/styles/max_2600x2600/public/2020-02/200217_Chiense%20Huawei%20smartphone%20sells%20in%20Copenhagen_Francis%20Dean%20via%20123rf.jpg?itok=z7VVhUZg 2513w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2020-02/200217_Chiense%20Huawei%20smartphone%20sells%20in%20Copenhagen_Francis%20Dean%20via%20123rf.jpg?itok=Y4PIDUFy" alt="Image by Francis Dean via 123rf" title="Image by Francis Dean 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>The UK’s decision to allow “high-risk vendors” to equip parts of its 5G networks opens the door for Huawei’s involvement. This has drawn strong criticism at home and abroad, <a href="https://www.independent.co.uk/news/world/politics/huawei-5g-network-china-warn-trump-pelosi-nato-a9337491.html?amp">particularly from US officials and lawmakers</a>. While the UK’s decision has been blamed on pressure from Beijing and <a href="https://foreignpolicy.com/2020/01/31/boris-johnson-britain-knows-its-selling-out-its-national-security-to-huawei/">Beijing-backed business interests</a>, the controversy reflects deeper disagreements over the design of 5G networks and whether the risks of working with Chinese suppliers are manageable or fundamentally to be avoided. These diverging views will surface more often as Chinese companies expand their presence across the global economy.</span></span></span></p> <p>Technical debate over securing 5G networks centers on claims they will collapse the current <span><span><span><a href="https://www.bbc.com/news/technology-51178376">distinction between ‘core’ and ‘edge’</a> in telecommunications infrastructure. This is ‘untrue’ according to the <a href="https://www.ncsc.gov.uk/blog-post/the-future-of-telecoms-in-the-uk">UK’s cybersecurity agency</a>. It is therefore still feasible to design networks in ways that separate high-risk vendors from sensitive data and functions, although this may impose limitations on network performance.</span></span></span></p> <p><strong><span><span><span>The decisive factor in judging Huawei’s trustworthiness is China's political system</span></span></span></strong></p> <p><span><span><span>These judgments are <a href="https://www.aspistrategist.org.au/5g-choices-a-pivotal-moment-in-world-affairs/">disputed by </a><span><span>foreign commentators</span></span> who emphasize that to reach full potential, 5G networks will need to distribute sensitive data and functions dynamically, in ways impossible to thoroughly monitor. This view justifies a zero-risk approach towards untrustworthy vendors, treating the security of telecommunications as <a href="https://www.aspistrategist.org.au/5g-choices-a-pivotal-moment-in-world-affairs/">‘priceless’</a><span><span>.</span></span> In this context, the decisive factor in judging Huawei’s trustworthiness is the Chinese political system within which the company operates.</span></span></span></p> <p><span><span><span>This approach, advocated by the US government, seems to have been rejected in London and Brussels. The day after the UK’s decision, the European Commission published its “toolbox” of risk mitigation measures to guide EU member-states’ 5G deployments. Produced <a href="https://ec.europa.eu/commission/news/common-eu-approach-security-5g-networks-2019-mar-26_en">under a mandate</a> to coordinate a common European approach towards 5G, it draws on individual risk assessments by member-states and recognizes that a vendor’s relationship with foreign governments can affect its risk profile.</span></span></span></p> <p><span><span><span>This inclusion of political as well as technical criteria for assessing risk mirrors the UK’s framework, which <a href="https://www.politico.eu/article/uk-takes-the-european-way-on-huawei-us-5g-security/?utm_source=POLITICO.EU&amp;utm_campaign=bda63483ad-EMAIL_CAMPAIGN_2020_01_29_05_37&amp;utm_medium=email&amp;utm_term=0_10959edeb5-bda63483ad-189963121">reportedly inspired</a> the EU’s approach. The UK has <a href="https://www.ncsc.gov.uk/guidance/ncsc-advice-on-the-use-of-equipment-from-high-risk-vendors-in-uk-telecoms-networks">defined Huawei as a “high-risk vendor</a>,” taking into account China’s legal system and the history of cyberattacks by the Chinese state. High-risk vendors are restricted to the network’s “edge,” and even that presence is<a href="https://www.gov.uk/government/news/new-plans-to-safeguard-countrys-telecoms-network-and-pave-way-for-fast-reliable-and-secure-connectivity"> capped at 35 percent</a>.</span></span></span></p> <p><span><span><span>Individual EU member-states will decide how to implement the toolbox recommendations, which specify that vendors assessed as high-risk from sensitive 5G assets should be excluded ‘as necessary.’ Because the toolbox was developed jointly by representatives of all member-states, the Commission and the EU cybersecurity agency ENISA, it can be taken to reflect general agreement – despite controversies over Huawei in <a href="https://www.businesslive.co.za/bd/world/europe/2020-02-03-angela-merkel-cannot-get-germany-to-budge-on-huawei-stance/">some member-states</a> – that the security of telecommunications is not “priceless”, but must be balanced against other priorities.  </span></span></span></p> <p><span><span><span>These priorities concern not just short-term cost savings, but also long-term economic security and strategic positioning. The UK’s official <a href="https://www.gov.uk/government/news/new-plans-to-safeguard-countrys-telecoms-network-and-pave-way-for-fast-reliable-and-secure-connectivity">statement about its decision</a> and <a href="https://www.politico.eu/article/tech-before-us-trade-for-post-brexit-britain/">anonymous quotes from UK officials</a> show clearly the importance placed on securing future economic competitiveness through a rapid transition to 5G, which create an imperative to avoid <a href="https://twitter.com/jpkleinhans/status/1225101246325035015">potential delays and costs</a> implied by banning Huawei. </span></span></span></p> <p><span><span><span><strong>The European Commission seeks to achieve “technological sovereignty” </strong></span></span></span></p> <p><span><span><span>The EU’s goal is more ambitious. The European Commission seeks to achieve “technological sovereignty” by making the EU “the <a href="https://www.politico.eu/wp-content/uploads/2020/01/POLITICO_Data-strategy.pdf">most dynamic data-agile economy</a> in the world” and establishing “<a href="https://www.euractiv.com/section/economy-jobs/news/leak-eu-charts-6g-future-in-ambitious-industrial-plan/">European leadership in network technologies</a>”. In this context the US is expressly viewed as a competitor, and European decision-makers are unsurprisingly reluctant to delay 5G roll-outs at Washington’s behest, when the US is increasingly <a href="https://markets.businessinsider.com/news/stocks/trump-administration-threatened-tariffs-european-cars-report-no-iran-action-2020-1-1028822967">using its’ own economic power</a> against allies.</span></span></span></p> <p><span><span><span>Decision-makers in London and continental Europe seem to have concluded two things about the risks of the Chinese state <a href="https://www.mitpressjournals.org/doi/abs/10.1162/isec_a_00351?mobileUi=0&amp;">exploiting their interdependence</a> with Huawei: they can be managed through judicious controls, and must be weighed against potential gains from rapid transition to 5G-enabled economies. Both the EU and <a href="https://www.afr.com/politics/federal/uk-blames-market-failure-for-huawei-decision-20200206-p53yai">the UK</a> aim to avoid dependence on high-risk vendors, and to promote market diversity in <a href="https://twitter.com/JPKleinhans/status/1217003765829599232">vendors and technical solutions</a> as a long-term risk mitigation strategy.</span></span></span></p> <p><span><span><span>US Secretary of State Mike Pompeo has recently doubled down on the case against Huawei by describing the Chinese Communist Party (CCP) as “<a href="https://www.state.gov/secretary-michael-r-pompeo-and-british-foreign-secretary-dominic-raab-discussion-on-the-future-of-the-special-relationship/">the central threat of our times</a>”: the CCP’s malevolence, <a href="https://slate.com/news-and-politics/2019/12/huawei-britain-boris-johnson-china.html">driven by its’ political nature</a>, justifies sacrificing the benefits of connections with Chinese actors. This logic appears to be driving US efforts to “decouple” from China, at <a href="https://www.nytimes.com/2020/01/24/business/economy/huawei-restrictions.html/">significant cost to US firms</a> and the US economy. In this view, permitting Huawei a role in 5G networks amounts to <a href="https://www.independent.co.uk/news/world/politics/huawei-5g-network-china-warn-trump-pelosi-nato-a9337491.html?amp">choosing ‘autocracy over democracy’</a>.</span></span></span></p> <p><span><span><span>But Washington has largely failed to persuade governments in Europe <a href="https://asia.nikkei.com/Opinion/Asia-must-step-up-tech-security-as-it-hands-Huawei-5G-green-light">and elsewhere</a>, most of which seem to view the Huawei issue as one of <a href="https://www.ncsc.gov.uk/blog-post/the-future-of-telecoms-in-the-uk">risk management</a>, not of fundamental conflict over political values. The policies developed by the EU and UK on 5G reflect how much of the world is dealing with expanding Chinese influence – by treating the CCP’s political nature as a relevant but not determining factor. This points to an evolving paradigm for globalisation in an age of growing security concerns – <a href="https://www.bloomberg.com/opinion/articles/2019-11-14/u-s-china-should-seek-managed-interdependence/">managed interdependence</a> with, rather than implacable opposition to China.</span></span></span></p> <p><em><span><span>A <a href="https://thediplomat.com/2020/02/5g-and-huawei-the-uk-and-eu-decide/">longer version of this blogpost</a> was published by The Diplomat on February 15, 2020.</span></span></em></p></div> </div> </div> Mon, 17 Feb 2020 08:09:25 +0000 komprakti 11111 at https://www.merics.org "Westlessness" - Western restlessness at China's ascent https://www.merics.org/en/blog/westlessness-western-restlessness-chinas-ascent <span>&quot;Westlessness&quot; - Western restlessness at China&#039;s ascent</span> <span><span lang="" about="/en/user/306" typeof="schema:Person" property="schema:name" datatype="">komprakti</span></span> <span>Fri, 02/14/2020 - 09:55</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="2020-02-14T12:00:00Z">2020-02-14</time> </div> <div class="field field--name-field-authors field--type-entity-reference field--label-hidden field--items"> <a href="/en/team/helena-legarda" hreflang="en">Helena Legarda</a> </div> <div class="field field--name-field-announcement-text field--type-text-long field--label-hidden field--item"><p><strong><span>"Westlessness" is the slogan of this weekend's<span> </span></span><a href="https://securityconference.org/">Munich Security Conference (MSC)</a><span><span> </span>and a tribute in no small part to China: Beijing's rise and its growing influence on economic, political and security issues is having a clear impact on the Western-led liberal world order, argues MERICS expert Helena Legarda. (via EUobserver)</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/2020-02/200214_Kompass_China_Olivier_Le_Moal_via_123rf_24520451_m.jpg?itok=k1y8lxvZ 325w, /sites/default/files/styles/max_650x650/public/2020-02/200214_Kompass_China_Olivier_Le_Moal_via_123rf_24520451_m.jpg?itok=FTP_5jf0 650w, /sites/default/files/styles/max_1300x1300/public/2020-02/200214_Kompass_China_Olivier_Le_Moal_via_123rf_24520451_m.jpg?itok=ksIT_N2L 1300w, /sites/default/files/styles/max_2600x2600/public/2020-02/200214_Kompass_China_Olivier_Le_Moal_via_123rf_24520451_m.jpg?itok=zY6UDU18 2600w" sizes="(min-width: 1290px) 1290px, 100vw" src="/sites/default/files/styles/max_325x325/public/2020-02/200214_Kompass_China_Olivier_Le_Moal_via_123rf_24520451_m.jpg?itok=k1y8lxvZ" alt="Image by Olivier Le Moal via 123rf" title="Image by Olivier Le Moal 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>"Westlessness" is the slogan of this weekend's<span> </span><a href="https://securityconference.org/">Munich Security Conference (MSC)</a><span> </span>and a tribute in no small part to China: Beijing's rise and its growing influence on economic, political and security issues is having a clear impact on the Western-led liberal world order.</p> <p>For leaders in Brussels or Washington, Berlin or Paris, far-away China is more present than ever before in living memory - its strength and relevance can't be ignored or downplayed.</p> <p>In London, in December, those same leaders issued a declaration at the end of the Nato summit recognising the challenges posed by the rise of China - a first for the western defence alliance.</p> <p>Although the language of the statement was careful - it noted that China presents "both opportunities and challenges" - it was hugely significant, proof that China has become a concern for an alliance traditionally occupied with the North Atlantic region.</p> <p>Asia is normally outside the Nato's area of operations. But issues like<span> </span><a href="https://euobserver.com/science/147303">Huawei and 5G</a>, China-Russia relations, China's rapid military modernisation and Nato more frequently encountering the People's Liberation Army (PLA) overseas have brought China into close view.</p> <p>China has become a global security actor – and its international role will only grow.</p> <p>Defence spending will likely grow by about 7-8 percent in 2020, as it has over the last few years - China's military expenditure has almost doubled since 2010.</p> <p>Beijing has modernised the PLA and developed advanced platforms - its first domestically built aircraft carrier, stealth UAVs, fifth-generation fighter jets like the J-20 - that are allowing the PLA to project power further and further beyond China's borders.</p> <p>Beijing's goal is to have by 2049 a military that can fight and win wars – even if the PLA still has major hurdles to clear to get there.</p> <p>Or take arms control, long a field of activity for only Washington and Moscow. The<span> </span><a href="https://euobserver.com/opinion/143980">collapse of the Intermediate-Range Nuclear Forces treaty (INF)</a><span> </span>has lent a new urgency to establishing a new regime - one that includes China.</p> <p>The goal is to avoid a new arms race triggered by China's continued advances in the field of missile technology and the challenge that this may pose to the US in the western Pacific.</p> <p>The US and Germany have invited Beijing to help forge a new treaty, be it trilateral or multilateral, even if China refuses, arguing the US and Russia should reduce their arsenals before they ask others to do the same.</p> <p>And consider arms manufacturing and sales, another traditional Western forte. New research from the Stockholm International Peace Research Institute (SIPRI) suggests China is the world's second-largest arms producer, behind the USA but ahead of Russia.</p> <h4>Chinese arms to Africa and Middle East</h4> <p>China's defence industry is coy about arms sales, so it is difficult to exactly determine its size. But it is clear that China in recent years switched from being a net importer to net arms exporter.</p> <p>China is working to increase its global arms sales by moving beyond its traditional buyers in Asia, in particular Pakistan, Bangladesh and Myanmar.</p> <p>China is intent on expanding its foothold in new markets in Africa and the Middle East, where Russia and the US have long been dominant.</p> <p>Chinese platforms can already be found in conflict zones in Sudan, Somalian, Yemen and Libya, in part thanks to one advantage: though often less advanced, Chinese weapons are usually cheaper than Russian and especially American alternatives.</p> <p>China is using its growing influence in international organisations, its economic clout and its expanding global military footprint to present itself as an alternative to the West for many non-Western countries - and as an alternative to the United States for European states.</p> <p>This has created fault lines in the transatlantic relationship, in particular, as some countries try to balance traditional political ties to Washington with close economic ties with China.</p> <h4>Huawei hotspot</h4> <p>The debate over Huawei is a perfect example of this.</p> <p>Despite the existence of home-grown suppliers, many European governments seem happy to turn to a Chinese company like Huawei despite serious concerns over the potential for espionage or sabotage of Europe's critical infrastructure and the US's warnings.</p> <p>The ongoing war of words over the security implications of using Huawei equipment will most likely continue this year, as the final decisions over this issue are still to be made in most European countries.</p> <p>The US will continue to make the case for a Huawei ban, while the Chinese will push for Europe not to exclude Huawei, most likely threatening consequences if countries choose to ban the company.</p> <p>Many European countries will feel caught in the middle, torn between the potential economic costs of excluding Huawei and the potential damage to the transatlantic alliance - and the West more broadly - of letting the Chinese company in.</p> <p>US president Donald Trump has helped drive Europe's reconsideration of its role in the global order and its interests and allegiances. As a result of developments in Beijing and Washington, Europe is starting to recognise - is having to recognise - that the Western-led system has changed for good.</p> <p>There is no longer just one self-styled indispensable nation. But 'Westlessness' should not be used as a synonym for the breakdown of the Western, post-World War II order. That would be to lament the end of a system that can no longer exist in its current form.</p> <p>Instead, Westlessness can be most usefully used to stand for the rise of China alongside the US - and all the changes this brings with it.</p> <p>That does not imply the end of the West or an absence of the West, but a West that will have to consider - and sometimes confront - China as a new global player.</p> <p>The world is becoming less Western as other actors like China grow in importance. But this should not cause panic or defeatism. It is an invitation for the West to reflect and reinvent itself to remain a values-based, stabilising force in the world.</p> <p><strong><em>This article was originally published by <a href="https://euobserver.com/opinion/147446?utm_source=euobs&amp;utm_medium=email">EUobserver</a> on February 14, 2020.</em></strong></p></div> </div> </div> Fri, 14 Feb 2020 08:55:12 +0000 komprakti 11101 at https://www.merics.org