Li Shangfu at the SCO Meet in New Delhi; Argentina ditches $ to settle Chinese imports
The 'Eye on China' newsletter features this week's most important developments on India-China relations, Chinese Domestic Politics and Foreign Policy, Economy and Tech, and the military!
Before we begin, a short note for our regular readers: we’re revamping our format just a tad! We shall now feature ‘India-China Relations’ in Section A, ‘Economy and Tech’ in Section B (instead of previously in Section C), ‘Military Developments in China’ in Section C (instead of previously in Section E), ‘Foreign Policy Watch’ in Section D, and ‘Chinese Domestic Politics’ in Section E (instead of previously in Section B). Happy Reading!
Section A: India-China Relations
- Anushka Saxena
This week, the big news comes from Chinese Defense Minister Li Shangfu’s visit to New Delhi for the Shanghai Cooperation Organization’s Defense Ministers’ meeting on 27-28 April, 2023.
While the Defense Ministers’ meeting itself has taken place on 28 April, Li Shangfu met with Indian defense minister Rajnath Singh on 27 April on the sidelines of the SCO meet, and as per the Indian government’s press release on the meet, the two ministers had frank discussions about the developments in the India-China border areas as well as bilateral relations.
The press release, which is quite short and succinct, further reads:
The Raksha Mantri categorically conveyed that development of relations between India and China is premised on prevalence of peace and tranquillity at the borders. He added that all issues at the LAC need to be resolved in accordance with existing bilateral agreements and commitments.
He reiterated that violation of existing agreements has eroded the entire basis of bilateral relations and disengagement at the border will logically be followed with de-escalation.
Comment: This reiteration of peace on the border comes right after the 18th round of Corps-Commander Level talks took place between the Indian Army and the Chinese PLA at the Chushul-Moldo border personnel meeting point on 23 April, and which have reportedly yielded no substantial results in discussions surrounding disengagement and de-escalation at Depsang (DBO) and Demchok (CNJ).
The two sides exchanged views on the relationship between the two countries and the two militaries. Li Shangfu said that as major neighboring countries and important developing countries, China and India share far more common interests than differences. The two sides should view bilateral relations and each other's development from a comprehensive, long-term and strategic perspective, and jointly contribute wisdom and strength to world and regional peace and stability.
Li Shangfu further added: Currently, the situation on China-India border is generally stable and the two sides have maintained communication through military and diplomatic channels. The two sides should take a long-term view, place the border issue in an appropriate position in bilateral relations, and promote the transition of the border situation to normalized management. It is hoped that the two sides will work together to continuously enhance mutual trust between the two militaries and make proper contributions to the development of bilateral relations.
Comment: The clear discrepancy on the interpretation of the border situation that emerges from the respective defense ministers’ statements is that while India accords the LAC issue a priority in normalizing overall India-China relations, China believes that India’s prioritization of the LAC issue is precisely what is stopping normalization of the border situation, as well as the overall relationship.
It is also ironic for Li Shangfu and every other Chinese politician to mention the words “mutual trust” on the border issue to India, while undermining the tool genuinely needed to enhance said mutual trust – the bilateral accords in place. India’s consistent position on the matter has been that if China does indeed want to enhance mutual trust, it must begin by respecting the border agreements. So far, that has not been the case – yet again highlighting the clear divergence between Chinese rhetoric and on-ground reality.
Li’s visit to India is the first visit by a Chinese defence minister after the June 2020 Galwan clash that derailed bilateral ties. Twenty Indian soldiers killed in the seven-hour deadly conflict near Patrolling Point 14 in Galwan Valley.
According to India’s assessment, PLA’s casualties were twice as many as Indian Army’s though Beijing officially claimed that only four Chinese soldiers were killed.
Despite four rounds of disengagement from Galwan Valley, Pangong Tso, Gogra (PP-17A) and Hot Springs (PP-15), the Indian and Chinese armies still have more than 60,000 troops each and advanced weaponry deployed in the Ladakh theatre. Problems at Depsang in Daulet Beg Oldi sector and Charding Nullah Junction (CNJ) in Demchok sector are still on the negotiating table.
On April 19 [2023], [Rajnath] Singh had expressed confidence in the Indian Army to handle any contingency along the country’s border with China even as he said talks would continue for peaceful resolution of the lingering row in the Ladakh sector, and disengagement and de-escalation were the best way forward.
Economic Times also reported on the matter that “Government sources said Singh conveyed to Li that after disengagement in remaining friction points in eastern Ladakh, there should be movement towards de-escalation and expressed hope for a "positive response".”
In this light, one should also refer to a recent editorial by China Daily, a state-backed English-language Chinese media platform, which had interesting things to say about the 18th round of CC-level talks, and the overall India-China border issue:
First, it stated that “Unlike the previous round held in December, the Sunday meeting did not conclude with a joint statement but that is reportedly because the focus of the meeting was on confidence-building measures in the coming months and avoiding confrontation at the border.”
Second, it argued that “In spite of the absence of substantial progress on frontline disengagement, what matters is the talks took place and both sides have signaled their desire for de-escalation. This has further consolidated the shift from frictions and standoffs to management of the border tensions.
Where it says “what matters is the talks took place and both sides have signaled their desire for de-escalation,” it is controversially incorrect in my opinion.
It adds: “A little more peace and tranquility along the Line of Actual Control is expected as a result, with the two sides apparently agreeing to stay in close contact and maintain dialogue through military and diplomatic channels with a view to working out a mutually-acceptable resolution of the remaining issues.”
Again, to me, it is interesting that the editorial used the words “working out a mutually-acceptable resolution of the remaining issues,” given that this is what the press release of the Indian Ministry of External Affairs said on the talks.
The wording of the Chinese statement was much more dismissive in that regard, stating that the two sides agreed to “speed up the settlement of relevant issues on the western section of the China-India boundary,” on which the Indian statement’s wording was: “In the interim, the two sides agreed to maintain the security and stability on the ground in the Western Sector.”
The dissonance of expectations between the two sides on how the border negotiations are going to proceed in the near future is clearly visible in this regard.
Third, the editorial argued that “there have been obvious external attempts to stoke tensions and sow discords in the "Indo-Pacific", especially as Washington sees India as a convenient tool in its efforts to contain China. And clearly some in India also want to exploit their country's new-found role as a geopolitical counterweight in dealing with China. Such opportunist calculations, however, will do no good in the end, because they misread both China's sincerity for good, peaceful bilateral ties and underestimate its determination when it comes to safeguarding its territorial integrity. Not to mention they only sink India deeper into a geostrategic pitfall.Outsiders left behind a legacy of disputed borders, and outsiders are now using it to create greater security dilemmas for India.”
The editorial even concluded by saying that “There is great potential to be tapped if New Delhi can remain clear-sighted and keep outside interference at bay.”
This is classic Chinese rhetoric about India’s inability to take autonomous decisions on how to deal with China, because it is a “pawn of the West” in the latter’s ‘China-containment’ strategy. It also, in a way, reiterates the Chinese position that the border issue is a ‘legacy’ of the past, which India doesn’t necessarily have to inflate now, but it does so because of pressure from the West.
Further, the SCO Defense Ministers meet took place on 28 April, and Rajnath Singh, who was chairing the meeting, gave opening remarks. Following are important excerpts from the same:
Firstly, in a clear dig at Pakistan, Singh said that “if a nation shelters terrorists, it not only poses a threat to others, but for itself too. Radicalisation of youth is a cause of concern not only from the point of view of security, but it is also a major obstacle in the path of socio-economic progress of society. If we want to make the SCO a stronger & more credible international organisation, our top-most priority should be to effectively deal with terrorism.”
Addressing mediapersons after the meeting, Defence Secretary Shri Giridhar Aramane also stated that all the member nations arrived at the consensus on several areas of cooperation, including dealing with terrorism, security of vulnerable populations in various countries as well as HADR. He stated that all member states were unanimous in their statements that terrorism, in all its forms, must be condemned and eliminated.
Here, these comments must be noted in the backdrop of the fact that on 20 April, five soldiers were killed and another critically injured in a terror attack in the Rajouri-Poonch Sector, close to the Line of Control (LoC) in the Jammu division. Preliminary reports have suggested that terrorists — their numbers and affiliations are not known immediately — attacked, in inclement weather, an Army vehicle that was on a counter-insurgency patrol between Bhimber Gali-Poonch in the Rajouri sector.
Pakistani defence minister Khawaja Muhammad Asif was not present at the event, and even though he was supposed to attent it virtually, Islamabad ultimately ended up being virtually represented by Malik Muhammad Ahmad Khan, special assistant to the Pakistan prime minister on defence.
In the past as well, India has urged the mobilization of the SCO Regional Anti-Terrorist Structure (RATS) to counter regional terror threats (especially those emerging from Afghanistan), and in September 2022, at an SCO meeting in Samarkand, the Organisation agreed to prepare a standard list of terrorist, separatist and extremist groups to provide an operational basis for effective counter-terrorism measures.
Interested readers may want to refer to a comprehensive article for IDSA on the SCO-RATS and India’s engagement with it.
Secondly, Singh added that “India envisions a robust framework of regional cooperation which mutually respects the sovereignty and territorial integrity of all member states by taking care of their legitimate interests.” He asserted that “New Delhi strives to further bolster trust and cooperation among the members of the SCO as it believes in maintaining peace and security based on the provisions of the Charter of the United Nations.”
Comment: This can be seen as an apparent dig at Chinese subversion of Indian sovereignty and territorial integrity, especially in line with recent events surrounding the mandarin-based standardisation of the names of 11 towns in Arunachal Pradesh by the CPC.
Moreover, in the past as well, India has talked about China disrespecting its “legitimate interests,” vis-a-vis normalization of the border situation and respecting India’s stature within idea of a multipolar order in the Asia-Pacific/ South Asia region.
Finally, drawing the attention of the member states to various dimensions of ‘SECURE’, Singh stated that “today a large part of the world is passing through a food crisis. He urged the SCO member countries to ensure food security under an integrated plan. This will establish SCO as a role model for the whole world, he said. To deal with the issue of climate change, he called for working on a common strategy, giving priority to mitigation and adaptation. Energy security should be a part of the common strategy, he added.”
The concept of ‘SECURE’ was floated by Prime Minister Shri Narendra Modi during the SCO summit in Qingdao, China in 2018. It stands for:
S - Security of citizens
E - Economic development for all
C - Connecting the region
U - Uniting the people
R - Respect for Sovereignty and Integrity
E - Environmental protection
Li Shangfu also made statements during the meet, important excerpts from which are as follows:
First, he said that “China is ready to cooperate with other members of the Shanghai Cooperation Organization (SCO) to build a balanced, effective and sustainable security architecture.”
Second, he stressed that “China is willing to join hands with other SCO members to implement the Global Security Initiative, deepen strategic mutual trust, enhance anti-terrorism cooperation, expand fields for cooperation and improve cooperation mechanisms, so as to contribute to global and regional peace and stability.”
The Chinese MOD said that during his stay in India, Li met with defense ministers from Belarus, Kyrgyzstan, India, Kazakhstan, Tajikistan, Russia, Uzbekistan and Iran on international and regional situations, bilateral and military ties as well as issues of common concern.
Additionally, even though the Chinese MOD’s release states that “a joint communique was released after the meeting,” The Week Magazine, reporting on the conclusion of the SCO meeting, said: “At the end of Friday’s meeting between defence ministers, all the SCO member countries signed a ‘protocol’—which in diplomatic terms falls short of a ‘joint statement’ which was not issued.”
The TRAI Press Release, highlighting the need for such elaborate recommendations, stated: Recent media reports have highlighted the challenges faced by the people living near the Line of Actual Control (LAC) in accessing high-speed internet, which is critical for pursuing online education and accessing digital banking. Furthermore, many remote areas in Ladakh lack mobile towers, resulting in network issues, particularly for those residing near the LAC and the Line of Control (LoC).
As these areas are of strategic importance, mobile connectivity is crucial for ensuring the safety of the region by facilitating round-the-clock communication to the security forces deployed in these regions.
The salient recommendations, as highlighted by TRAI, are as follows:
There are 19 villages in Ladakh which neither have 4G coverage nor are they included in the ongoing schemes for providing 4G coverage. The CAPEX and OPEX expenditure to be incurred for upgrading the existing non-4G based cellular mobile infrastructure at these 19 villages should be funded by Government through USOF. In 12 out of these 19 villages, the Authority recommends that the VSAT connectivity provided under BharatNet can also double as backhaul for 4G connectivity. In the remaining seven uncovered villages, VSAT connectivity on shared basis should be considered till connectivity on OFC media is extended to these villages.
There is one Block Headquarter (Rupshu) which has no optical fibre connectivity. The USOF should fund the backhaul connectivity on optical fiber from Rupshu Block Headquarters to Nyoma/ Chumathang.
Licensed TSPs [Telecom Service Providers] should maintain a waiting list of service demand. DoT [Department of Telecommunication] should establish a mechanism to obtain, examine and analyze the data on waitlist from all TSPs.
The DoT should plan for a VSAT based alternate communication overlay in all border areas of strategic importance in the country, including Ladakh, which should co-exist as backup communication medium in all such areas along with terrestrial connectivity. This will ensure continuity of crucial communication services during occurrence of natural calamity and/ or critical situations triggered due to border conflicts in such areas.
The TRAI has made recommendations to the Government on improving telecom connectivity/infrastructure in far-flung areas of Himachal Pradesh, many of which are valid for Ladakh also. Recommendations for providing electricity to telecom sites as a priority at Utility/Industrial tariff, waiving off last mile installation charges for extending electric connection to telecom sites etc. should be mutatis mutandis made applicable to Ladakh also.
The DoT should take up with the Ladakh UT Administration, NHAI and BRO that all road construction, road widening, or other related works should be undertaken with prior coordination involving TSPs, and the liability of Contractor for making the damages good to the TSPs should be included ab-initio in the contracts. The DoT should also explore the possibility of constructing utility ducts in all future road widening and new road construction projects, and any ban on giving RoW permissions to utility service providers during Defect Liability Period.
The DoT should do a site-wise analysis of all such sites that are being run by BSNL or any other TSP on VSAT in remote and hilly areas in Ladakh. For all such sites that are being run to serve strategic or service delivery needs of the Government, the entire operational costs of running these sites should be borne by the Government.
The extended policy makes it clear that mobile connectivity is strategically important for the locals as they are the first line of vigil who immediately inform the Indo Tibetan Border Police (ITBP) and the Army about any incursion by foreign troops along LAC in the region.
It states: “As an outcome of the above, the Authority has suo-moto decided to initiate consultation with various stakeholders to enhance the telecom connectivity in the remote and far-flung areas of the UT which will help in resolving the issues raised by the people.”
For interested readers, the complete, 70+ page policy document, is available here.
Finally, it is fascinating to note some of the rhetoric that has been going around in the media regarding India surpassing China as the world’s most populous nation.
To begin with, on 24 April, the UN Department of Economic and Social Affairs released a policy report stating: The latest estimates and projections of global population from the United Nations, indicate that China will soon cede its long-held status as the world’s most populous country. In April 2023, India’s population is expected to reach 1,425,775,850 people, matching and then surpassing the population of mainland China.
The report, carrying the thought-provoking subtitle “Two “population billionaires”, China and India, face divergent demographic futures,” adds: India’s population is virtually certain to continue to grow for several decades. By contrast, China’s population reached its peak size recently and experienced a decline during 2022. Projections indicate that the size of the Chinese population will continue to fall and could drop below 1 billion before the end of the century.
Even though the report itself came out 5 days ago, the debate surrounding this projection has been shaping up since mid-April. And China has presented us with all sorts of reactions to it:
First, at his regular press conference on 19 April, Wang Wenbin, the Chinese Foreign Ministry Spokesperson said that “when assessing a country’s demographic dividend, we need to look at not just its size but also its quality. Size matters, but what matters more is talent resource.”
Attempting to quell any concerns that collate population size with talent and growth, he added: “Nearly 900 million out of the 1.4 billion Chinese are of working age and on average have received 10.9 years of education. For those who have newly entered the workforce, their average length of education has risen to 14 years. China has implemented a national strategy to respond to population aging, including a third-child policy and supporting measures to address demographic changes. As Premier Li Qiang pointed out, China’s demographic dividend has not disappeared, and our talent dividend is in the making. The driving force for China’s development remains strong.”
Comment: Since population aging is now becoming a subject of contention in China, it makes sense that Wang Wenbin took such an approach of answering, where he attempted to assuage any concerns regarding China being left behind in terms of talent and economic growth, now that India will have the largest population size in the world.
Moreover, even the Indian twitterati has received well his measured words (which do not even mention India, even though the question posed to him does), around assessing a country not just by population size but also population quality.
Then, from an editorial in Global Times published on 20 April, this is what Chinese commentators had to say about the development:
Lou Chunhao, executive director of the Institute of South Asian Studies at the China Institutes of Contemporary International Relations, said: "India's economy will unlikely catch up with that of China in the foreseeable future. It's extremely hard for India to copy China's takeoff by taking advantage of its demographic dividend. While India wants to copy China's experience, it has missed the best opportunities brought about by hyper-globalization, while currently the anti-globalization and the COVID-19 outbreak has led to restructuring of global industrial and supply chains.”
Zhao Gancheng, a research fellow from the Shanghai Institute for International Studies, said: "India becoming the world's most populous country will unlikely bring significantly greater benefits than what it experienced as the world's second-largest populous country… its massive population may become a heavy burden for India without appropriate governance or industrial structure.”
Liu Xiaoxue, an associate research fellow at the National Institute of International Strategy of the Chinese Academy of Social Sciences, said: “Indian people care more about how Indian government will solve the burning challenge of high unemployment and how India's manufacturing sector could catch up with China's constantly upgrading manufacturing industry.”
Comment: Frankly, while it does seem to many that China is capitalizing on any opportunity available to it to undermine or downgrade India, which might be right from the narrative building point of view, I do not see the point in taking the comments surrounding lack of a robust manufacturing base in India (similar to that of China’s), or India’s tryst with unemployment, as something to take in a negative light.
I also see merit in the argument that India has not capitalized on opportunities of hyper-globalization as well as China has, though there may be various differing opiinions on the matter. And it’s not like we do not already acknowledge the need to balance a large population size with robust governance structures and economic mechanisms.
That said, there were obvious opportunities for media platforms to engage in a sensational back and forth with each other, bringing into the picture the geopolitical tensions between China and the US-led West. For example:
First, on 18 April, CNN published an opinion stating that “This time [since the 1960s], a combination of factors are behind the drop [in China’s population]: the far-reaching consequences of the one-child policy China introduced in the 1980s (but has since abandoned); changing attitudes toward marriage and family among Chinese youth; entrenched gender inequality and the challenges of raising children in China’s expensive cities.” It added: “A falling population is likely to exacerbate China’s problems with an aging workforce and drag on growth, adding to its woes as it struggles to recover from the pandemic.”
The existence of this, and similar other reports, explains why the very next day, Wang Wenbin chose to address concerns regarding aging amidst the Chinese media and populace.
On 19 April, in another opinion, CNN added: “India overtaking China will have significant economic implications for both Asian giants. Along with the flagging population data, China also reported one of its worst economic growth numbers in nearly half a century last year, underscoring the steep challenges the country faces as its labor force shrinks and the ranks of the retired swell.”
In response, the GT report from 20 April began by saying: “India has made headlines recently as the UN estimated that it may overtake China as the world's most populous country by mid-year. The data, though not based on solid national census, prompted Western media to hype claims that India's economy will also overtake China based on the theory that India's large population will create vast demographic dividend.”
The very next day, NBC News came out with an opinion arguing: “Size isn't everything — it's what you do with it that counts. That was Beijing's indignant reaction after news that India, its neighbor and fierce rival, will soon overtake China as the world's most populous country.”
It further added: “News of the population ranking made headlines around the world. But prominent voices in China accused the West of using it as another excuse to "bad mouth" Beijing as the latest episode in the long-running struggle with the U.S. and its allies.”
And of course, then there has been the Cartoon by the German magazine ‘Der Spiegel’ [The Mirror]:
This one has evoked a row among the Indian masses regarding the ‘bad taste’ in which the cartoon has been drawn, and has led even the former German Ambassador to India to critique the condescending and stereotypical attitude of the cartoonist towards the country.
Various media platforms have commented on the cartoon’s racist nature, stating: “Many Indians criticised the outlet and claimed it reeked of racism and was a “crass” attempt at “peddling old stereotypes” about the country.”
On this, Indian Union Minister Rajiv Chandrasekhar also commented: “No matter how much you laugh, victory is ours. Under the leadership of Modi, our country will move ahead of Germany, keep watching.”
However, some voices on this in the Indian media have also said: “German magazine's cartoon on India is actually a tribute to the country's uniqueness. Far from belittling India, I think the cartoon is a celebration of the hubbub of India’s democracy, its inclusiveness and its amazing ability to cobble heterogeneous elements into a workable homogeneity. It also perfectly sums up where China finds itself today, thanks to the draconian One Child rule of the 1980s which led to decades-long declines in the country’s fertility rates.”
Overall, much has been said about the evolving situation, and no clear deadline is set for when the Indian population size does indeed surpass China’s, on which the previous UN-DESA speculation was sometime in April. Regardless, the narrative building surrounding the matter has been interesting, and only continues to unfurl now with the release of the new UN report.
Section B: Economy and Tech
- Amit Kumar
Argentina ditches dollar; agrees to settle Chinese imports in yuan
Argentinian Economy Minister Sergio Massa stated on April 19 that Argentina would begin to pay for Chinese imports in yuan instead of US dollars. The announcement came after his meeting with the Chinese Ambassador Zou Xiaoli where a swap agreement between the two countries was reached. Around US$790 million worth of monthly payments is expected to be settled following the bilateral understanding.
Chinese police pay surprise visit to US consulting firm Bain and Co.’s Shanghai office
In what marks a divergence from China’s sustained efforts to boost a friendly and favourable business environment for foreign businesses, the Chinese authorities have lately begun a campaign of regulatory tightening over foreign companies, particularly those headquartered in the US.
In the latest of a series of crackdowns on foreign businesses which witnessed the launching of a cybersecurity review of imports from Micron Technology, detaining of a Japanese drugmaker Astellas Pharma employee, and the raiding of the Beijing office of the Mintz Group in March, the Chinese authorities last week questioned the staff of the Shanghai office of the US-based consulting firm Bain and Co.
The questioning of Bain and Co.’s staff comes days after the Standing Committee of the National Peoples Congress amended its counter-espionage law to expand the definition of espionage from previously ‘the illegal transfer of state secrets’ to include ‘transfer of documents, data, materials or items related to national security and interests’.
Xinhua reports: “The revised law refines the definition of espionage, specifying acts such as carrying out cyber attacks against state organs, confidential organs or crucial information infrastructure as acts of espionage.” The broadened law enables the authorities to counter perceived foreign threats, including allowing for the inspection of baggage and electronic devices of those suspected of espionage. The revised counter-espionage law, first introduced in 2014, will take effect from July 1, 2023.
The WSJ reports that the effort is directed toward controlling the “narrative about China’s governance and development, and limit the information collected by foreign companies such as auditors, management consultations and law firms that could influence how the outside world views China.”
A Beijing-based lawyer and chair of the policy committee of the American Chamber of Commerce in China in his statement to the WSJ said, “The business community necessarily needs information. There is therefore a risk that people will be unable on behalf of their companies to gather sufficient information for fear of being branded an espionage agent.”
The spokesperson for the Chinese Embassy in the US, Liu Pengyu stated, “China is committed to protecting foreign businesses’ lawful rights and interests and creating a favorable environment for foreign investment. All foreign companies abiding by Chinese laws and regulations enjoy full business autonomy in their operation. ”
Comment: Amidst all the US-led efforts to decouple its economy from China, the American business community has emerged as the most potent lobbyist for the Chinese market. The economic interest in China has so far prevented an alignment between the capitalist class and the state on the issue of decoupling. A friendly business environment as promised and repeatedly reiterated by the Chinese government has been the only hope for foreign companies to sustain their operations in China against the already worsening conditions owing to the deepening geopolitical contestation between the two largest economies.
But the series of latest moves by the Chinese authorities that have sought to penalise foreign entities by delaying their merger operations and increasing surveillance are likely to dwindle the support base China has among the foreign business community. While the percentage of respondents that are seeking to shift their priorities from China to other countries stood only at 27% according to an American Chamber of Commerce survey in April, the figure saw a steep rise compared to China Business Climate Survey (also conducted by AmCham) that pegged the figure at 6% last year.
The fact that the recent amendment in China's counter-espionage law doesn’t define what ‘national security’ constitutes and that the government under Xi Jinping has witnessed an increasing securitisation of almost every aspect of governance are likely to make it difficult for foreign entities to escape the charges once accused of espionage and spying.
AmCham China releases White Paper on Chinese Business Climate
On April 28, AmCham released a new ‘Flash Survey’ along with the ‘2023 American Business in China White Paper’ to follow up on their 2023 Business Climate Survey Report (BCS).
The key themes in the 2023 White Paper included:
The impact of the past three years of COVID-Zero is still being felt across many industries, despite the removal of COVID prevention measures and travel restrictions.
A lack of confidence in the bilateral relationship has increased the level of concern regarding US investment in China and overall risk exposure.
The government-led emphasis on self-reliance is creating additional uncertainty for foreign businesses.
Member companies are still committed to the China market, but many longstanding business challenges remain.
The AmCham China website reads: The Flash Survey, which was designed as a follow-up assessment to the 2023 China Business Climate Survey Report (2023 BCS) presents the latest business sentiment for American companies in China. Member companies’ most recent views on China’s two-year business outlook were more optimistic compared to the 2023 BCS results. The Flash Survey was conducted from April 18-20, drawing responses from 109 companies with operations throughout China.
The key highlights from the paper are as follows:
On China’s economic recovery
59% of members reported a positive outlook, a 22 percentage points (pp) increase compared to the 2023 BCS results (33%).
59% of members also expressed positive views on China’s domestic market growth, up from 42%, although the number of those who were optimistic about the potential for profitability only rose slightly, up 4pp to 37%.
On US-China relations
Views on the bilateral relationship worsened, rising from 73% who expressed a pessimistic outlook for US-China relations in the 2023 BCS survey results to 87% in this Flash Survey.
On Industry growth
nearly half (48%) of members said they expected their industry to grow this year, while 15% reported uncertainties.
20% of Consumer sector respondents said they predict industry growth of 20% or more in 2023, up sharply from the 2023 BCS, but respondents in the other three main sector groups – Resources & Industrial, Technology and Other R&D-intensive Industries, and Services – predicted very similar levels of growth compared with the previous survey. Meanwhile, 40% of members said they have no change in their short- to mid-term (2023-25) China investment plans, while another 24% said they plan to increase investment in China at different levels.
On moving supply chains and decoupling
majority of members (73%) are not moving their supply chains outside of China, while another 23% are either considering or already starting the relocation process
Risk management is the top reason given for those considering relocation, as reported by 44% of the respondents.
Additionally, 27% of the respondents reported that their companies had re-prioritized other countries, a 21pp increase from the 2023 BCS results.
China’s State Council rolls out 15-point measure to address weak job market
The Chinese job market is expected to face an influx of new job seekers as 11.5 million university students are set to graduate this year. Lately, China is witnessing a weak job market with the youth jobless rate (16-24 yrs) rising to 19.6 percent in March.
The State Council, as part of efforts to aid business expansion and hiring, will compile lists of companies with hiring intentions, offer job subsidies for employers, use the government’s unemployment fund and plan to create more jobs in rural areas, remote and border regions and sectors. State-owned enterprises and public institutions, including schools, hospitals, and neighbourhood services, have also been encouraged to employ more younger workers.
The Vice Minister for Human Resources, Yu Jiadong was quoted as saying: “The scale of college graduates this year is at a record high, while the foundation of the economic rebound is not yet solid, and employment of college graduates and other young people still faces some fresh obstacles and new challenges.”
The 15-measures announced this week also included continuing an internship programme proposed in 2019, which involves state-owned enterprises and social organisations creating no less than 1 million positions for young people with the help of subsidies.
Beijing is also offering financial incentives for young people to work in the country’s rural and northwestern regions, as well as shorter probationary periods and simplified registration requirements for medical students.
The country’s private sector is still expected to take on more responsibility by absorbing the young workforce, with Beijing pledging to continue to provide subsidies to companies that recruit fresh graduates.
China’s attempts to attract foreign talent insufficient: EU Chamber of Commerce
The EU Chamber of Commerce in China released the ‘European Business in China -Nanjing Position Paper 2023/2024’ on April 27. In the paper, it urged the Chinese local authorities to “increase efforts to attract international talent and treat foreign nationals equally,” reports SCMP. The paper compiled contributions from more than 120 members between January to May.
It highlighted the need for local governments to improve their work permit and residence policies, as well as training its public employees to “make foreign nationals feel welcome in the community”
Many international businesses cited China’s control policies, which included sudden lockdowns, mass screening and mandatory quarantines, as among the reasons that they have struggled to retain and attract foreign workers.
European Chamber of Commerce in China president Joerg Wuttke informed that China is facing “competition from other countries in Asia, including Japan and South Korea” in attracting foreign talent. But “costly air ticket prices to China are still putting off international visitors,” he said.
The paper said, “There are continuous hurdles for both companies and applicants, such as foreign students seeking to work after graduation.” The transition from student status to a working residence permit is also “unnecessarily difficult”, which discouraged recent graduates from staying in China to build their careers, it added.
The paper also pointed out language barriers, difficulty in accessing public services, and discrimination against foreign nationals post-COVID-19 as some hindrances.
China threatens countermeasures against Japan’s semiconductor export controls
China’s state-backed semiconductor trade group, China Semiconductor Industry Association has asked Japan to not “abuse export control measures” as it would damage bilateral relations.
Following the trilateral deal reached with the US and the Netherlands to restrict the export of advanced lithography tools to China, Japan announced in March that it would require local companies, including Tokyo Electron to apply for licenses to ship 23 categories of advanced chip-making tools. The new rules are slated to take effect from July this year.
CSIA opposes the act of interfering with global trade liberalisation and distorting the balance of supply and demand.
CSIA hopes that the Japanese government adheres to the principles of free trade and does not abuse export control measures to the detriment of the cooperative relationship between the semiconductor industries of China and Japan.
The CSIA is committed to safeguarding the legitimate rights of its 900 members and shall call on the Chinese government to take resolute countermeasures.
The China Council for the Promotion of International Trade, another state-backed trade group, released a similar bilingual statement on April 28, calling Japan’s move “discriminatory” towards China’s semiconductor industry. It said Tokyo’s action “obviously violates international rules”.
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Section C: Military Developments in China
- Anushka Saxena
To begin with, the US-China scrambling continues, as a US P-8A Poseidon patrol aircraft flew over the Taiwan Strait on 27 April 2023.
The US 7th Fleet made a statement on the matter, and it pretty much carries usual statements the US makes regarding its right to fly over international waters in accordance with International Law.
The statement reads: “A U.S. Navy P-8A Poseidon transited the Taiwan Strait in international airspace on April 28, 2023 (local time). By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations. The aircraft’s transit of the Taiwan Strait demonstrates the United States’ commitment to a free and open Indo-Pacific. The United States will continue to fly, sail, and operate anywhere international law allows including within the Taiwan Strait.”
The Chinese side retorted, again, in its usual manner, arguing that the transit of US warships and planes through the region is ‘provocative’. Colonel Shi Yi, spokesman for the Eastern Theater Command, said:
“The eastern theater of the Chinese People's Liberation Army organized fighter planes to follow and monitor the US planes throughout the process, and strictly guarded against them. In the recent period, U.S. warships and planes have frequently carried out provocative actions, fully proving that the U.S. is a disruptor of peace and stability in the Taiwan Strait and a creator of security risks in the Taiwan Strait. Theater troops maintain a high level of alert at all times and resolutely defend national sovereignty and security as well as regional peace and stability.”
Also, as the PLA has started doing continually in the past few months, it scrambled its own jets to “follow the US vessel out of the region.”
Before this, on 27 February this year, the US had similarly flown the Poseidon aircraft over the Taiwan Strait, and had similarly reiterated that it has the right to fly and sail wherever it wants. In response, Colonel Shi Yi had said that the flight “has deliberately disrupted the regional situation and jeopardized the peace and stability across the Taiwan Strait.”
Meanwhile, on Friday, two days after the Poseidon scrambled over the Straits, Taiwan's Ministry of National Defense reported that 38 PLA Air Force (PLAAF) military aircraft and six PLA Navy (PLAN) vessels had been tracked around Taiwan.
Among the aircraft that entered Taiwan's air defense identification zone (ADIZ) was a TB-001 reconnaissance (RECCE) and combat drone. On this, Taiwan News reports:
The TB-001 RECCE drone, dubbed the "Twin-Tailed Scorpion," entered the southwest corner of the ADIZ from the southwest edge of the median line. It then flew to the southeast, east, north, and northwest sections of the ADIZ before exiting over the northeast end of the median line.
This marks the first time that the MND has publicly acknowledged that a Chinese combat aircraft had encircled Taiwan in this way.
Chieh Chung, a military researcher at Taiwan's National Policy Foundation think tank, said that during a war, China was likely to send the TB-001 to spot targets on the island's east coast, where Taiwan would shelter reserve forces, as bases there do not face China.
He added that it was not the first time a Chinese drone has flown around Taiwan, but was most likely to first time it did so entirely within Taiwan's air defence zone.
Three weeks ago, it was reported that the US Navy has had the LRASM (Long Range Anti-Ship Missile) fitted on the P-8A Poseidon Maritime Patrol Aircraft.
Naval News reported: “Two pictures show “fit checks” of the next generation missile with the Poseidon MPA. More specifically, a single LRASM was fitted to an underwing pylon of P-8A aircraft #951, belonging to naval force aircraft test squadron VX-20.”
In this regard, even though the details of the MPA the US flew over the Taiwan Strait remain unconfimed, the future may see the retrofitted P-8A waved like a victory flag over the straits, affirming that the Taiwan Strait is a convenient playground of power projection by means of display of newest equipment obtained by the US and China.
Next, reportedly, on Wednesday [26 April], the Taiwanese Ministry of National Defense announced that it is preparing for the 39th edition of its annual ‘Han Kuang’ wargame exercises, to be conducted in May and July.
The tabletop war games phase will be held May 15-19 and the live-fire exercise component is scheduled for July 24-28, said Major General Lin Wen-huang (林文皇), who is in charge of planning at the MND, during a press briefing.
The computerized war games will be conducted using the United States-built Joint Theater Level Simulation (JTLS) platform that is used to simulate joint, combined, and coalition civil-military operations at the operational level, Lin said.
He also said that those simulations will be held around the clock for five days in a row to test the ability of military personnel to coordinate and launch a response to a Chinese invasion.
The main points of emphasis of the live-fire drills, Lin said, will be on testing the military's ability to preserve its forces in the event of a full-scale invasion and to conduct "maritime interceptions" to counter the PLA's attempt to blockade Taiwan.
Interestingly, he sidestepped a question, however, on whether this year's Han Kuang exercises would simulate a response to China's newest aircraft carrier, the Shandong, which recently engaged in its first-ever exercises in the Western Pacific in waters not far from Taiwan.
An unnamed source told CNA on March 28 that the drill to be staged at the airport in Taitung County in southeastern Taiwan will simulate a scenario in which Taiwan's military airports and airstrips are severely damaged by enemy fire, requiring fighter jets to land at civilian ones or on the highway.
An Al-Jazeera report added: “The naval element [of the exercises] will integrate sea, air and land forces to attack enemy troops and amphibious assault ships as well as to protect sea lanes and counter blockade efforts [as per the Taiwanese MND’s press briefing].”
The elements of this year’s exercise will be exciting to watch, in terms of how they pay out and how well they stimulate an actual war scenario with the Chinese PLA. In the past too, the Han Kuang exercises have focused on China in a primary enemy scenario.
But given the events of the past few months, wherein China has conducted intense power projection by deploying Shandong and other large warships, and conducting massive live fire exercises in zones around the island, the nature of the 39th wargames is likely to be more serious in testing the Taiwanese military’s actual on-ground preparedness for awartime scenario.
It would also be a test for American equipment, like the AGM-158B Joint Air to Surface Standoff Missile-Extended Range (JASSM-ER), the AH-64E “Apache” attack helicopters, or the Patriot missile battery, inprotecting Taiwan respectively from heavy-duty scenarios like a PLAN blockade or quarantine, anti-landing drills, and protecting command posts/ bases.
In the 2022 Han Kuang exercises, the Taiwanese military stimulated an amphibious assault in the city of Taipei and continuous counter-amphibious landing drills on Taiwan’s Eastern Coast.
Now that we are learning of projections that the PLA may scramble its TB-001 unmanned combat aerial vehicle to attack Taiwan on its East Coast in a war time scenario, where most of TW’s reserve forces have bases, such drills may see a repetition and expansion.
Last year, Global Times itself reported that a TB-001 armed reconnaissance drone of the PLA flew across the Miyako Strait and to the eastern side of the island of Taiwan (albeit quoting a press release by Japan's Ministry of Defense Joint Staff), in response to the 2022 exercises.
The reported also added: “Chinese mainland experts said that the Han Kuang exercises are nothing more than a show that does not change the cross-Straits military balance but only raises tensions that expose the attempts of the secessionist Democratic Progressive Party authorities to resist reunification by force and build up anxiety among ordinary people.” A similar but more aggressive response is expected from the PLA this time around too.
In the meantime, the PLA is conducting joint exercises with the Singapore military, as part of ‘Ex-Maritime Cooperation’:
To be held from April 28 to May 1, the drill is the second Exercise Maritime Cooperation, the flagship bilateral maritime exercise carried out by the two countries, following the first edition held in Singapore in 2015 and a hiatus caused in part by the COVID-19 pandemic, the Straits Times reported on Tuesday (25 April), citing a statement by Singapore's Ministry of Defense.
This year’s exercise will involve four ships: Singapore’s Formidable-class frigate RSS Intrepid and Bedok-class mine countermeasure vessel RSS Punggol, and China’s Jiangkai II-class frigate CNS Yulin and Wozang-class Minesweeper CNS Chibi.
Warships of the Chinese People's Liberation Army (PLA) Navy have set out for Singapore to participate in the upcoming bilateral joint military drills and an international defense expo, with analysts saying on Wednesday that the events reflect pragmatic cooperation between the Chinese and Singaporean militaries and promote military openness and understanding in the South China Sea.
The guided-missile frigate Yulin and the minesweeper hunter Chibi affiliated with the navy of the PLA Southern Theater Command have embarked in formation on a voyage to Singapore to participate in the China-Singapore Exercise Maritime Cooperation 2023 and the International Maritime Defense Exhibition (IMDEX) Asia, the PLA Daily reported on Wednesday.
During the event, the PLA Navy delegation will visit IMDEX Asia and join an international maritime security seminar, the Chinese Defense Ministry said.
Recently, the Philippines concluded its exercise ‘Balikatan’ with the US over a period of three days between April 24 and 27, and has sparked concerns within China. Moreover, much to China’s ire, the Philippines has agreed to provide the US with access to four military bases in addition to the five bases the US already had access to, under the 2014 Enhanced Defense Cooperation Agreement between the two sides.
In response to these developments, Chinese military commentator Fu Qingshao has told Global Times that “the joint exercise highlights the close relations between China and Singapore and shows that Singapore is not choosing sides between China and the US.” Additionally, he said: “This will positively contribute to the security situation in the South China Sea and make a model for other countries in the region, including the Philippines, which has been leaning toward the US.”
In terms of partnerships, officials from the PLA also participated in a meeting with Pakistani defense officials on 26 April 2023, to discuss bilateral security issues.
Pakistan's army chief Gen. Asim Munir met PLA commander Gen. Zhang Youxia on the first day of his four-day visit to Beijing, said the Inter-Services Public Relations (ISPR), the Pakistan military's media wing. Munir visited the PLA headquarters, where he was given a guard of honor. He also witnessed a demonstration of the PLA's operational capabilities and praised the "high standards of training and the professionalism displayed by the soldiers."
“Matters of mutual security interests and military cooperation were discussed. Both military commanders reiterated the need for maintaining peace and stability in the region and enhancing military to military cooperation,” the ISPR said.
The army chief also witnessed a demonstration of the operational capabilities of the PLA troops and praised the high standards of training and professionalism displayed by the soldiers, the military’s media wing added.
The visit to China by the army chief is being closely followed by Western diplomats in Islamabad since it will determine Pakistan’s future strategy in view of the growing tussle between Beijing and Washington – Pakistan has tried to maintain a balance in its ties with the big powers but many observers believe that eventually the country may have to take sides.
Meanwhile, Pang Chunxue, Charge’d Affairs, Embassy of the People’s Republic of China met Finance Minister Ishaq Dar at the Finance Division on Tuesday and assured Dar of continued support to neighbour, which remains engulfed in a balance payment crisis.
As per the statement from the Ministry of Finance, Dar highlighted historical bilateral relations between China and Pakistan and commended Chinese support for Pakistan.
He also underscored the need for further deepening relations in economic, trade and financial sectors. “The Chinese envoy praised close and shared friendly relations between the two countries. She assured the Finance Minister of continuous support of the Chinese government to the people of Pakistan,” read the statement.
Finally, there is extensive coverage of the PLA’s operations of evacuation Chinese citizens amidst the crisis in Sudan.
The People's Liberation Army Navy helped evacuate on Thursday (27 April) nearly 700 Chinese and foreign nationals from conflict-torn Sudan.
In a news release published in the afternoon, the PLA Navy said that 668 Chinese citizens and 10 foreign nationals have been relocated to Jeddah, a coastal city in Saudi Arabia, by two Chinese warships — CNS Nanning, a Type 052D guided-missile destroyer, and CNS Weishan Lake, a Type 903 resupply vessel.
According to the release, the two vessels with more than 490 sailors and special operations commandos onboard are part of the Navy's 43rd escort flotilla in the Gulf of Aden and waters off Somalia.
A Navy video clip showed sailors of the Weishan Lake putting up banners on the portside, and one of these read: "Our ships are moving territories of China, and you will be home safe and sound as soon as you board them."
As the security situation in Sudan continues to deteriorate, in order to protect the lives and property of Chinese personnel in Sudan, the Chinese military, in accordance with the unified deployment, sent naval vessels to Sudan on Wednesday, Beijing time, to evacuate Chinese personnel stranded in the country, Senior Colonel Tan Kefei, a spokesperson for China's Ministry of National Defense, said on Thursday.
Wu Xi, director-general of the Department of Consular Affairs of China's Foreign Ministry, said the Chinese People's Liberation Army (PLA) urgently mobilized warships in the Gulf of Aden to Sudan to carry out evacuation operations.
So far, more than 1,300 Chinese personnel have been safely evacuated. Upholding the vision of a community with a shared future for mankind, China has helped citizens of five other countries evacuate on Chinese vessels, Mao Ning, spokesperson for China's Foreign Ministry, said on Thursday.
The Global Times report also highlighted the work the PLA has conducted in the past in safely evacuating Chinese citizens from Libya and Yemen during conflict-induced crises in 2011 and 2015 respectively. It adds:
In 2011, missile frigate Xuzhou was sent to Libya to carry out an evacuation mission, which was the first time the Chinese Navy has participated in overseas evacuation operations, setting a new record for the Chinese military's non-war military deployment.
The evacuation of Chinese personnel from Yemen in 2015 was the first time that Chinese warships were directly docked at foreign ports for an evacuation mission.
The Takshashila Institution has done extensive research work on evacuation methods during crises, and recently, our Knowledge Manager has authored an Issue Brief on the crisis in Sudan and India’s options in evacuating its diaspora effectively. Interested readers may peruse it here.
To read more on developments concerning Chinese military forces, please refer to :
A Global Times movie review of the Mandarin language film ‘Born to Fly’ released on 28 April 2023. In it, GT credits the choreography of PLA Air Force fighting capabilities, and calls the movie a Chinese response to ‘Top Gun: Maverick’;
A report the US Naval Institute has recently published. Titled ‘The PLA Is Contemplating the Meaning of Force Design’, the report analyses various Chinese language documents to help US military observers and officials (especially the Marine Corps) better prepare to participate in a naval campaign against China;
Spacebattles (a more informal channel for public discussions)
Section D: Foreign Policy Watch
- Kingshuk Saha
Chinese Premier Li Qiang had a phone conversation with Pakistani Prime Minister Shahbaz Sharif
On Thursday Chinese Premier Li Qiang had a telephonic conversation with his Pakistani counterpart Shahbaz Sharif. During the call, both sides agreed to deepen their cooperation and work jointly for regional peace, prosperity and stability.
Prime Minister Shehbaz Sharif, during a telephonic conversation with Chinese counterpart Li Qiang on Thursday, vowed to bolster bilateral cooperation. The conversation was marked by the traditional warmth and cordiality that have always characterized the Pakistan-China All-Weather Strategic Cooperative Partnership, the Prime Minister’s Office said.
The Prime Minister extended his warm congratulations on the Chinese Premier’s recent election to this high office, which reflected the deep-seated trust and confidence of the Chinese nation in him, stemming from his many achievements in public service. As all-weather partners and close friends, Pakistan appreciated China’s peaceful development as a positive factor of international peace and stability and was confident that China would continue to achieve milestones on its journey towards modernization and rejuvenation.
The Prime Minister reiterated Pakistan’s unstinting support for China on its core issues, including the “One China” policy, Taiwan, Tibet, Xinjiang, Hong Kong, and the South China Sea. He expressed Pakistan’s sincere gratitude for China’s principled position on the Jammu and Kashmir dispute and support for Pakistan on core issues. The Chinese Premier appreciated Pakistan’s support for China and reaffirmed China’s continuing support for Pakistan’s national development, sovereignty, and territorial integrity.
As an all-weather friend, China would continue to stand with Pakistan at all times. Recalling the premier’s visit to China in November 2022 and wide-ranging conversations with President Xi Jinping and the Chinese leadership, the two leaders took stock of bilateral cooperation in key areas, including the China-Pakistan Economic Corridor (CPEC).
Pakistani Prime Minister Shahbaz Sharif tweeted: “Had a comprehensive & productive telephone call with Chinese Premier Li Qiang this morning. We discussed bilateral, regional and global issues of mutual interest. Pakistan appreciates China’s peaceful development as a positive factor ensuring international peace and stability. I reiterated Pakistan's firm support to China on its core issues while appreciating its unflinching support for Pakistan. We also reviewed progress on Pakistan-China initiatives including CPEC for greater win-win outcomes. Confident that China would continue making achievements towards modernization.”
Chinese Premier Li said: “China and Pakistan are good neighbours, friends and brothers. Both sides should maintain high-level exchanges and promote greater progress in bilateral cooperation in various fields, and jointly promote the construction of a closer China-Pakistan community of shared future in the new era. As this year marks the 10th anniversary of the China-proposed Belt and Road Initiative (BRI) and the launch of the China-Pakistan Economic Corridor (CPEC), China and Pakistan should promote the high-quality development of the corridor and make it a model project for the joint construction of BRI.”
China and Pakistan historically have been close allies however Pakistan's political chaos and economic instability are affecting the partnership. The rising attack on Chinese properties and people in Pakistan is further putting a strain on the relations between the two countries.
Chinese President Xi Jinping had first phone conversation with Ukrainian President Volodymyr Zelenskyy since Russia's invasion
Chinese President Xi on Wednesday had a nearly hour-long telephone conversation with Ukrainian President Zelenskyy. They spoke on China-Ukraine relations and the Ukraine crisis. Xi expressed his willingness to send a special envoy as a mediator to pursue a settlement between Russia and Ukraine.
President Zelenskyy tweeted: “I had a long and meaningful phone call with President Xi Jinping. I believe that this call, as well as the appointment of Ukraine's ambassador to China, will give a powerful impetus to the development of our bilateral relations.”
Chinese leader Xi Jinping and his Ukrainian counterpart Volodymyr Zelensky spoke by phone Wednesday, in their first known conversation since Russia’s invasion of Ukraine, as Beijing ramps up efforts to position itself as a potential peacemaker in the grinding conflict. Zelensky, who has long expressed interest in speaking with Xi, said he had “a long and meaningful phone call” with the Chinese leader that lasted for an hour.
The call between Xi and Zelensky comes weeks after Xi made a state visit to Russia and met Vladimir Putin in March when the Chinese and Russian leaders made a sweeping affirmation of their alignment across a host of issues — including their shared mistrust of the United States. Beijing has so far refused to condemn Russia’s invasion of Ukraine or call for a withdrawal of its troops, instead urging restraint by “all parties” and accusing NATO of fuelling the conflict. It has also continued to deepen diplomatic and economic ties with Moscow, despite its claims of neutrality.
Beijing’s lopsided position is also apparent in its diplomatic engagements with Moscow and Ukraine. Wednesday’s phone call is the first time Xi has spoken to Zelensky since Russia invaded Ukraine in February last year. In comparison, Xi has spoken to Putin five times since the invasion — including a face-to-face at the Kremlin when the Chinese leader visited Moscow last month and another in-person meeting at a regional summit in Central Asia last September.
Zhang Hong, an associate research fellow at the Chinese Academy of Social Sciences said: “Both Ukraine and Russia have welcomed China's effort to promote a cease-fire and a political solution to the crisis. China didn't fuel the flames, provide weapons to either side or attack them, which is why China has the channel to speak to both Russia and Ukraine.”
Xi Jinping wants to project China as a responsible global leader after facilitating the recent Iran Saudi Arabia peace talk it would be a feather in the cap for Xi Jinping if he can broker a peace settlement between Russia and Ukraine.
Chinese Foreign Minister Qin Gang Chair 4th China-Central Asia Foreign Ministers' Meeting
Chinese State Councillor and Foreign Minister Qin Gang on Thursday chaired the 4th China-Central Asia Foreign Ministers' Meeting with foreign ministers from Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan in Xi’an in the northwestern province of Shaanxi.
The China-Central Asia Summit will be held in May in Xi'an, the capital city of China's Shaanxi Province, a press release of the fourth China-Central Asia Foreign Ministers' Meeting said on Thursday. Chinese State Councillor and Foreign Minister Qin Gang chaired the meeting, which was attended by Kazakhstan's Deputy Prime Minister and Minister of Foreign Affairs Murat Nurtleu, Kyrgyzstan's Minister of Foreign Affairs Kulubaev Zheenbek Moldokanovich, Tajikistan's Minister of Foreign Affairs Sirojiddin Muhriddin, Uzbekistan's Minister of Foreign Affairs Bakhtiyor Saidov, and Turkmenistan's First Deputy Minister of Foreign Affairs Vepa Hajiyev.
Noting the historic and breakthrough achievements China and Central Asian countries have made as good neighbours, friends, partners, and brothers, Qin said China-Central Asia relations and regional development have shown unprecedented vitality. Qin said all sides should strengthen cooperation and unity in the face of complex situations and continue to firmly support each other on issues concerning each other's core interests.
He called on the six countries to jointly build the Belt and Road with high quality, crack down on religious extremists, ethnic separatists and violent terrorist forces, and firmly oppose any interference in the internal affairs of countries in the region by force under any pretext. Qin also calls for working together to build a Cultural Silk Road, strengthening multilateral coordination to make the international order more just and equitable. During the third China-Central Asia Foreign Ministers' Meeting in June 2022, all parties agreed to establish a China-Central Asia heads of state meeting mechanism.
Hailing the vital role Central Asia-China cooperation has played in consolidating strategic mutual trust, accelerating respective development, promoting connectivity, and safeguarding common security, the ministers expect that the summit will bring new opportunities to the region. Concerning the Ukraine crisis, ministers from Central Asia support China's initiative of persuading peace and promoting talks, and advocate that conflicts should be resolved through diplomatic means by the spirit of international law.
Central Asian countries are willing to strengthen coordination with China and work together for universal security, lasting peace, and sustainable development in the region, the ministers said.
Wang Xiaoquan, an expert at the Chinese Academy of Social Sciences said: “China-proposed Global Development Initiative, Global Security Initiative, and Global Civilization Initiative could be discussed further in the upcoming summit within the C+C5 mechanism and provide guidance for future cooperation, including the construction of a more stable security order and a fairer economic order. China and the five Central Asian countries share great common interests and needs in terms of maintaining regional security and stability, and related cooperation is becoming deeper and wider.”
The meeting with Central Asian Foreign Ministers highlights China’s deepening engagement with Central Asian countries as the region offers both economic opportunities and strategic challenges for China.
China’s ambassador to France sparks outrage over questions on the 'sovereign status' of former Soviet nations
Lu Shaye, China’s ambassador to France in an interview with French network TF1 questioned the sovereignty of former Soviet republics resulting in widespread outrage and fury in Europe. During the interview, Lu said, “In international law, even these ex-Soviet Union countries do not have the status, the effective status in international law, because there is no international agreement to materialise their status of a sovereign country.”
Chinese ambassador to France Lu Shaye has stayed true to his reputation of being a "wolf warrior," the term used to describe loyal Chinese diplomats who react vehemently to criticism of China. During a televised interview on Friday, April 21, Lu caused an uproar after questioning the sovereign status of the former countries of the Union of Soviet Socialist Republics (USSR), and Ukraine's interest in Crimea. Asked about the war in Ukraine on the French television channel LCI on April 21, Lu questioned the sovereign status of the countries from the former USSR, which was dissolved in 1991.
"The countries of the Soviet Union have no effective status in international law because there is no international agreement to recognize their status as sovereign countries," the ambassador claimed. Yet these 15 countries – like China – are members of the United Nations and signatories to its Charter, where Article 2 states that "the Organization is based on the principle of the sovereign equality of all its members.”
During the interview, the diplomat failed to acknowledge that Crimea, annexed in 2014 by Russia, belongs to Ukraine. These remarks caused an outcry in France and abroad. The statements by the Chinese ambassador were described as "unacceptable" by European foreign policy chief Joseph Borrell, who stated, "The EU can only assume that these statements do not represent the official position of China."
The ambassador was received on Monday, April 24, at the foreign ministry – a meeting scheduled before the controversy – by the chief of staff, who informed him of the "unacceptable nature" of his statements and reportedly called on him "to confine his public statements to those consistent with the official positions of his country."
François Godement, a senior resident fellow at the Institut Montaigne in Paris said: “I would not be surprised if Mr. Lu were withdrawn as ambassador, given the importance of the French-Chinese relationship and the speed at which Beijing disavowed his comments. At the European level, the damage is done and won’t be undone easily.”
Zhang Hong, an associate research fellow at the Chinese Academy of Social Sciences said: “To some extent, the Chinese Foreign Ministry clarified the interview, which has been over-interpreted and hyped with ulterior motives by some Western media.”
Lu’s foot-in-the-mouth act not only put China’s foreign office on a damage control exercise but also damaged its relations with Europe and put France in a tight spot as President Macron has been an advocate for greater cooperation with China.
Section E: Chinese Domestic Politics
- Amit Kumar
This week, Xi Jinping, on April 28, presided over a meeting of the Politburo Bureau of the CPC Central Committee to analyse current economic situation and economic work. Xinhua reported:
The meeting noted that “with macro policies well in place, the triple pressure of shrinking demand, supply shocks, and weakening expectations has been alleviated. The economic growth has exceeded expectations, market demand is picking up, economic growth is rebounding, and China's economy is off to a good start.
It pointed out that “the current upturn in China's economy is mainly in the process of recovering, with endogenous driving force still weak and demand insufficient. Economic transition and upgrading face new headwinds, and hardships and challenges are still to be overcome to promote high-quality development.”
The meeting stressed that “it is imperative to carry out the theoretical study program on the study and implementation of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, earnestly implement the guiding principles of the Central Economic Work Conference, adhere to the general principle of pursuing progress while ensuring stability, fully and faithfully apply the new development philosophy on all fronts, accelerate the forging of a new development pattern, and comprehensively deepen reform and opening up.”
It called for “boosting the vitality of business entities, so as to create a strong driving force for high-quality development” and the “guiding role of government investment and policy incentives should be well leveraged to effectively stimulate private investment.”
On the issue of the public and non-public sectors, the meeting called for “unswervingly consolidate and develop the public sector and unswervingly encourage, support and guide the development of the non-public sector.
It further noted: Efforts must be made to remove the obstacles and barriers in terms of laws and rules as well as hidden ones that hinder enterprises under all forms of ownership from competing and growing on a level playing field. Efforts must also be made to continuously boost the confidence of business entities and help enterprises regain strength. All enterprises must operate in compliance with law and regulations. Work must be done to ultimately address the issue of overdue payments to enterprises. Work should be done to promote the well-regulated and healthy development of platform companies, and encourage leading platform companies to explore and innovate.
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Eye on China is a weekly newsletter curated by the Indo-Pacific Studies Programme at The Takshashila Institution, a public policy think-tank based out of Bengaluru, India.
