Two Sessions - GDP Target @ 5.5% - Ukraine War: China's Diplomacy, Narrative, Impact on Tech Sector & Analysis - Quad Leaders Meet - Indo-Pacific States' Views on Ukraine - Hong Kong COVID Outbreak
I. The Two Sessions
by Manoj Kewalramani
The annual two sessions, i.e., the meetings of the NPC and CPPCC began this week. On Friday, Wang Yang, who is the Chairperson of the Standing Committee of the CPPCC National Committee, kicked off the sessions by delivering a work report. Xinhua reports:
“In 2022, the CPPCC committees will see their work revolving around the 20th National Congress of the Communist Party of China (CPC), said Wang. He urged contributions to maintaining a stable and sound economic environment, a social climate enabling prosperity for the people and the country, and a healthy political atmosphere of integrity. Wang called on political advisors to rally more people around the CPC and channel more strength into national rejuvenation.”
SCMP’s report on Wang’s speech has more details:
Citing “unprecedented challenges” to governance and reform, Wang said it was of paramount importance for the advisory body to emphasise national unity.
“Strengthening the great unity among all the sons and daughters of the Chinese nation is the historic responsibility of the CPPCC in the new era,” Wang said, adding the party was the “centre for the Chinese nation’s unity”.
In his 40-minute speech, Wang called on the nearly 2,000 CPPCC members to “earnestly fulfil” their responsibility to search for “the biggest common factors” to promote a harmonious relationship among political parties, ethnic and religious groups, social strata, and with Chinese compatriots abroad.
Echoing his report from last year, Wang again said the CPPCC’s mission was to support the central government’s overhaul of Hong Kong’s electoral system to ensure that the city was governed by “patriots”. He also again made no mention of the “one country, two systems” governing formula that grants Hong Kong a high degree of autonomy. Wang also did not mention Taiwan specifically except in a passing reference to a seminar on cross-strait exchanges.
In addition, if you read through Xinhua’s Chinese language report on the speech, there are a couple of things that are worth noting:
Wang said that in the past year work had been done to guide the CPPCC members to deeply understand the decisive significance of ‘Two Establishments’, and strengthen their political, ideological and action consciousness towards achieving the ‘two safeguards.’
On the 14 FYP or economy related tasks, he talked about work done regarding high-quality development, improving people’s livelihood, promoting the construction of ecological civilisation, and expanding high-level opening to the outside world.
In 2022, Wang talked about the CPPCC being guided by Xi Jinping Thought of socialism with Chinese characteristics for a new era and working by adhering to the general tone of making progress while maintaining stability and adhering to the two themes of unity and democracy.
On unity, he added: “Unity must have a center, and only by sticking to the center can everyone be united. The Communist Party of China has become the center of the great unity of the sons and daughters of China. It is the choice of history and the choice of the people.” 团结要有圆心,固守圆心才能万众一心。中国共产党成为中华儿女大团结的圆心,是历史的选择、人民的选择.
On Saturday then, Premier Li Keqiang delivered his annual work report. For those unfamiliar, this document largely outlines the government’s economic priorities over the coming year. I am highlighting a few points below, but it’s really tough to do a summary of such a document. Instead, I am uploading the English PDF of the speech with my highlights and notes and linked media coverage and some analysis marked therein. You can download and go through this.
Li said: China’s gross domestic product (GDP) reached 114 trillion yuan, growing 8.1 percent. National fiscal revenue exceeded 20 trillion yuan, growing 10.7 percent. A total of 12.69 million urban jobs were added, and the average surveyed unemployment rate stood at 5.1percent.
The main targets for 2022 are:
GDP growth of around 5.5 percent
over 11 million new urban jobs
surveyed urban unemployment rate of no more than 5.5 percent
CPI increase of around 3 percent
growth in personal income that is basically in step with economic growth
steady increases in both the volume and quality of imports and exports
a basic equilibrium in the balance of payments
grain output of over 650million metric tons
further improvement in the environment
continued reduction in the discharge of major pollutants
energy consumption per unit of GDP to be assessed with appropriate flexibility within the framework of the 14th Five-Year Plan; and the exclusion of newly added renewable energy and coal, petroleum, and natural gas consumed as raw materials in the total amount of energy consumption.
Also, Zichen’s thread below is really useful if you’d like to access some of the other documents, such as the budget report, released by the the NPC.
From the draft budget document, here are the key points for 2022:
On the whole, the outlook for government revenue and expenditure in 2022 remains quite grave. We must therefore strengthen coordinated planning over fiscal resources, maintain spending in some areas while cutting it in others, focus on key priorities, and make every effort while working within our me ans. We must see that budgets are well formulated through a rational approach, and ensure that the decisions and plans of the Party Central Committee and the State Council are implemented. While acknowledging the difficulties that lie before us, we should also remain confident in ourselves. China boasts a highly resilient economy, the economic fundamentals that will sustain long term growth remain unchanged , and we have room to maneuver and measures at our disposal on the level of macro policy. China is thus equipped with the foundation and conditions necessary to drive healthy and sustained economic and social development.”
Revenue in the centra l government’s general public budget is projected at 9.488 trillion yuan, up 3.8 % over the actual figure in 20 21 . Adding in 276.5 billion yuan from the Central Budget Stabilization Fund and 990 billion yuan from the budgets of central government managed funds and central government state capital operations, total revenue is expected to be 10.7545 trillion yuan. Expenditures in the central general public budget are projected to be 13.4045 trillion yuan, an increase of 14.3 %. Total expenditure will exceed total revenue, leaving a deficit of 2.65 trillion yuan, which is 100 billion yuan lower than in 2021.
It says that Central government expenditures are projected at 3.557 trillion yuan, up 3.9%. Main expenditures include:
150.782 billion yuan on general public services, down 1.9 %;
50.266 billion yuan on diplomatic endeavors, up 2.4 %;
1.45045 trillion yuan on national defense, up 7.1 %;
194.993 billion yuan on public security, up 4.7 %;
152.578 billion yuan on education, the same as the year before (national spending, which includes local outlays, will increase by 10.6 %);
318.727 billion yuan on science and technology, equivalent to the previous year (national spending, which includes local outlays, will rise by 7.2 %);
113.647 billion yuan on stockpiling grain, edible oils, and other materials, an increase of 2.3%;
638.2 billion yuan on debt interest payments, up 8.8%;
also, total of 8.9975 trillion yuan will be transferred to local governments, an increase of 8.4%.
Finally, some political reports from the Two Sessions. First, Xi Jinping participated in the Inner Mongolia Autonomous Region delegation’s deliberation. This is an annual activity for him. Xi chose to represent the region in 2018 when the 13th NPC was constituted. Xinhua English has an unusually detailed report on Xi’s comments at the session. He made some key points:
First, uphold the overall Party leadership is the path we must take to stick to and develop socialism with Chinese characteristics.
Second, socialism with Chinese characteristics is the path we must take to realize the rejuvenation of the Chinese nation.
Third, working hard in unity is the path the Chinese people must take to make historic achievements.
Fourth, putting into practice our new development philosophy is the path we must take to develop our country into a strong nation in the new era.
Fifth, exercising full and rigorous self-governance of the Party…as long as we make great efforts to carry forward the great founding spirit of the Party, stay true to our founding mission, have the courage to reform ourselves, consistently remove all elements that harm the Party's advanced nature and integrity and eliminate all viruses that erode its health, we will definitely be able to ensure that the Party preserves its essence, color and character.
He added:
“The CPC Central Committee has made fostering a strong sense of community for the Chinese nation the main task in its work related to ethnic affairs in the new era. It is a major decision made to maintain the great unity of the Chinese nation and to realize the Chinese Dream of national rejuvenation. It is also an important conclusion drawn from a thorough review of the historical experience and lessons.”
And then this:
“The requirements for fostering a strong sense of community for the Chinese nation should be carried out in relevant fields across the whole autonomous region, including historical and cultural education and publicity, construction of public cultural infrastructure and urban landmark structures, and exhibitions and displays in tourism sites. The relationship between the Chinese culture and the culture of an ethnic group must be dealt with properly. With all these efforts, we can lay a solid theoretical and cultural foundation for fostering a strong sense of community for the Chinese nation.”
There’s also another report about top leaders, Li Zhanshu, Wang Yang, Wang Huning, Zhao Leji, Han Zheng, and Wang Qishan meeting different delegations. The big message that they delivered as per Xinhua is this:
“They stressed the significance of establishing Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole, and of defining the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era (i.e., the Two Establishments) They also gave their support for the government work report delivered by Premier Li Keqiang at the session.”
Also Read:
China Defense Budget Rises 7.1%, Fastest Pace in Three Years
China Seeks to Ease Simmering Social Issues in Political Year
In China, Fewer Are Willing to Splurge as Economic Worries Mount
‘Two sessions’ 2022: Beijing urges EU not to ‘amplify’ China-Lithuania dispute
II Ukraine War: China’s Diplomacy, Narrative & Did Xi Know?
by Manoj Kewalramani
I don’t know if it’s just me but each week seems at least at least a month long nowadays. There are a lot below by my colleagues on China and the Ukraine war, so in this section, I am just focussing on key official engagements and some analyses that I found interesting.
First, Wang Yi spoke to Ukranian Foreign Minister Dmytro Kuleba earlier in the week. Xinhua English reported:
‘Kuleba briefed Wang about the first round of Ukraine-Russia talks, saying that the end of the fighting is the top priority for Ukraine. Ukraine stays open to a negotiated settlement to the current issue and treats the talks with Russia with positive sincerity, said Kuleba, adding that despite current difficulties, the Ukrainian side remains calm and willing to push forward the talks. China has played a constructive role in the Ukrainian issue, said Kuleba, mentioning that Ukraine stands ready to strengthen communication with the Chinese side and looks forward to China's mediation in achieving a ceasefire.” – I thought it was interesting that Beijing put this out like this.
From Wang Yi’s viewpoint, the piece says:
“Wang said that the situation in Ukraine has changed rapidly, and that China laments the outbreak of the conflict between Ukraine and Russia and is extremely concerned with the harm to civilians. China's basic position on the Ukrainian issue is open, transparent and consistent, said Wang, noting that China always stands for respecting the sovereignty and territorial integrity of all countries. Regarding the current crisis, China calls on Ukraine and Russia to find a solution to the issue through negotiations, and supports all constructive international efforts conducive to a political settlement, said Wang. China always believes that one country's security cannot be at the expense of others' security, and security of one region cannot be achieved by expanding military blocs, Wang stressed. As the fighting continues to expand, the top priority is to ease the situation as much as possible to prevent the conflict from escalating or even getting out of control, especially to prevent harm to civilians as well as a humanitarian crisis, and to ensure the safe and timely access of humanitarian aid, he said.
— My view at the time of reading the details of the call: I simply do not see this as a significant shift in Beijing’s position. In fact, I agree with Wang Yi: “China's basic position on the Ukrainian issue is open, transparent and consistent.” China is worried about civilian casualties, of course. Part of this is because there are still many Chinese nationals in Ukraine, and there have been some reports about them getting caught in the violence. Also, mounting civilian deaths will only make it more difficult for Beijing to maintain this balance, which is essentially an uneven balance favouring Moscow. But it is worth noting that Beijing calls the current situation a “conflict between Ukraine and Russia.” I am sorry, but this is not a conflict between the two countries. This is an act of aggression by Russia on Ukraine. Instead of acknowledging this, Wang, it seems, spent time lecturing Kuleba about NATO. I also find it fascinating that Beijing says that its position is based on the “merits of the Ukraine issue itself.” What does this really mean? Does Beijing see merit in Russian bombing of a sovereign state because it feels insecure with the possible choices that a legitimately elected government in that country may make?
The other aspect of the Chinese readout focuses on safety “ensuring the safety of Chinese nationals in Ukraine.” Wang “urged the Ukrainian side to assume corresponding international responsibilities. The Chinese government attaches great importance to the safety of Chinese nationals in Ukraine and cares about their safety every moment, Wang noted, adding that all Chinese nationals in Ukraine are envoys of China-Ukraine friendship and friends of the Ukrainian people…Wang said he hopes the Ukrainian side will take all necessary measures to ensure the safety of Chinese nationals in Ukraine and continue to provide guarantee and facilitation for their evacuation. Kuleba said that it is an important duty for Ukraine to ensure the safety of foreign nationals, and that Ukraine pays great attention to China's concerns and is assisting Chinese students and nationals to evacuate smoothly. Ukraine will continue to ensure the safe evacuation of foreign nationals responsibly, Kuleba added.”
On Saturday then, Wang Yi spoke to US Secretary of State Antony Blinken. This came amid reports of Israel’s Prime Minister Naftali Bennett having visited Moscow to meet Vladimir Putin. NYT reports that:
Mr. Bennett’s office said in a statement on Saturday evening that the meeting with Mr. Putin lasted about three hours and took place “in coordination and with the blessing of the U.S. administration.” In addition, the statement added, Mr. Bennett was working in coordination with Germany and France and was “in ongoing dialogue with Ukraine.” There was no immediate information about any outcome from the meeting. A spokeswoman for Mr. Bennett said that he had spoken with Mr. Zelensky after his meeting with Mr. Putin.
Anyway, the Blinken-Wang Yi call also came amid EU foreign policy chief Josep Borrell saying that China should mediate future peace talks between Russia and Ukraine as Western powers cannot fulfil the role.
“There is no alternative... It must be China, I am sure of that,” Borrell said in an interview with Spanish daily El Mundo published on Friday evening. “Diplomacy cannot only be European or American. Chinese diplomacy has a role to play here,” he added. “We have not asked for it and neither have they (China), but since it has to be a power and neither the US nor Europe can be (mediators), China could be.”
But in the call with Blinken, Wang Yi seemed to rule out the possibility of mediation. Wang said that Russia and Ukraine should negotiate directly. Also, he didn’t sound optimistic about the negotiation process. He said that “as things stand negotiations may not proceed smoothly, the international society should still cooperate and support bilateral talks until their negotiations come to fruition, and peace is agreed upon.”
I don’t see any fundamental shift in China’s position on the issue, despite the language around the UN charter and basic norms. But the framing by Wang was interesting. The readout says:
“The Ukraine issue is complicated, which not only concerns the basic norms of international relations, but also is closely related to the security interests of various parties, Wang said, urging for focusing on not only solving the current crisis, but also maintaining long-term stability of the region.” — I wonder if this implies that basic norms can be jettisoned when it comes to security interests of various parties. — “As a permanent member of the UN Security Council, China always forms its own position and policy according to the merits of the matter itself, Wang said, adding that China believes that the Ukraine crisis should be resolved in accordance with the purposes and principles of the UN Charter.”
He added that China had not wanted to see the Ukraine crisis escalate to the current situation. He said that he hopes 战火 (Global Times translated this as “crossfire,” Xinhua calls it “fighting”) can be stopped as soon as possible and the situation can be eased so as to prevent large scale humanitarian crisis. Wang also called on the US, NATO, EU and Russia to engage in “dialogue on an equal footing” over accumulated problems, placing emphasis on the negative effects of NATO's eastward expansion on Russia's security environment.
The US readout of the call says:
“Secretary of State Antony J. Blinken spoke today with PRC State Councilor and Foreign Minister Wang Yi about Moscow’s premeditated, unprovoked, and unjustified war against Ukraine. The Secretary noted the world is watching to see which nations stand up for the basic principles of freedom, self-determination and sovereignty. He underscored that the world is acting in unison to repudiate and respond to the Russian aggression, ensuring that Moscow will pay a high price.”
Reports and Analyses:
Can China Shield Russia From Ukraine-Linked Sanctions? - Must Read
China opposes US, EU sanctions against Russia; says will carry out normal trade with Moscow
Analysis: Chinese banks scramble for 'workarounds' as Russia sanctions impinge
Analysis: China can't do much to help Russia's sanction-hit economy
Finally, on the narrative front, I highly recommend this piece by Li Yuan for NYT. She writes:
“As European and American officials press Facebook, Twitter, TikTok and other online platforms to clamp down on Russian disinformation, China has embraced Russia’s propaganda and lies about the war. China’s state-owned media outlets quoted their Russian counterparts’ coverage without verification, helping to magnify their disinformation on the Chinese internet. They put Russian officials on state television networks with little pushback on their claims. When it comes to information, the Chinese government is a control freak, dictating and censoring what its 1.4 billion people consume. Beijing has silenced and jailed its critics and journalists. It has coerced and co-opted the biggest Chinese online platforms to enforce its censorship guidelines. It blocks nearly all major western news and information websites, including Google, Twitter, YouTube, Wikipedia, The New York Times, The Wall Street Journal and the BBC. Yet as the world faces one of its most serious geopolitical crises since the end of the Cold War, China let down its digital defenses and allowed Kremlin’s propaganda machine to help shape public perception of the war. No wonder the Chinese internet is overwhelmingly pro-Russia, pro-war and pro-Putin. If China wants to remain officially ambiguous about whether it supports Vladimir V. Putin’s war — refusing to call it an invasion and abstaining from a U.N. vote to condemn the invasion — its state-controlled media nonetheless makes very clear where China stands.”
On the narrative also note China’s boycott of Premier League games owing to messages of support for Ukraine and the censorship by China’s state-run broadcaster of remarks by International Paralympic Committee president Andrew Parsons. CCTV refused to translate Parsons’ remarks as he derided Russia’s invasion of Ukraine during the Winter Paralympic opening ceremony in Beijing on Friday.
Also, there’s this whole controversy about how much and what exactly did Beijing or Xi Jinping know. NYT reported this week that “a Western intelligence report said senior Chinese officials told senior Russian officials in early February not to invade Ukraine before the end of the Winter Olympics in Beijing, according to senior Biden administration officials and a European official. The report indicates that senior Chinese officials had some level of direct knowledge about Russia’s war plans or intentions before the invasion started last week.”
SCMP also had a report with two sources with ties to the White House telling them that “senior Russian officials told their Chinese counterparts on February 4 that Moscow was going to conduct a military operation in Ukraine.” The report adds:
“It is apparent that what the Chinese understood in early February was very different from what transpired, one of the sources said, adding that it was wrong to say that Xi was “played” or “lied to” by Putin. The source added that it was unclear whether the exchange took place in a direct conversation between Xi and Putin or through other senior channels. The source added that it was apparent from Beijing’s lack of warning to its approximately 6,000 citizens stranded in Ukraine in recent days – amid news that a Chinese national was wounded by gunfire – that it did not expect a major war.”
Linked to all of this controversy, there have been reports that there is some pushback in Beijing. For instance, Lingling Wei’s report for WSJ seems to suggest that Beijing was so focussed on Washington and putting together a united front with Moscow in this regard that it was blindsided by the Russian approach to Ukraine. She writes that:
“in Beijing, the ripple effects of a move that may cost China dearly (referring to the war in Ukraine) are now sinking in, say the officials and advisers. Some officials say they are fearful of the consequences of getting so close to Russia at the expense of other relationships—especially when Russian aggression against Ukraine is isolating Moscow in much of the world.”
Later the report says:
“It was Beijing that suggested including that the two countries’ friendship has “no limits”—wording read with apprehension in the West—according to the officials and advisers. The intention was less a declaration China would stand by Russia in case of war than a strong message to the U.S. about the resolve the two have in confronting what they see as increased American threats, the people said. Mr. Putin at the 2022 Winter Olympics opening ceremony in Beijing. What didn’t factor into Beijing’s planning was Moscow’s increasingly heated rhetoric on Ukraine, those people said. Even as the Russian troop buildup along the border of the Eastern European country intensified and Chinese officials were presented with American intelligence on a likely Russian invasion, Beijing still dismissed that scenario as unlikely. And, these people said, China saw Mr. Putin’s brinkmanship as already getting him desired results, including a divided North Atlantic Treaty Organization. “China’s eagerness to present a strong alignment with Russia to counter the U.S. caused it to miss all the signs and to go in a dangerous direction,” said Yun Sun, director of the China program at the Stimson Center, a Washington think tank focused on promoting peace and security.
This is essentially the incompetence argument that Megha and I had referred to in our note. I am very skeptical of this argument. But here’s what we had written:
Finally, it is worth remembering that 2022 is a critical year for Xi Jinping’s continued leadership of the Communist Party. Political calculations heading into the 20th Party Congress will weigh on the Chinese leadership’s mind as it responds to unfolding events. The fact that Putin launched the offensive weeks after the bilateral summit with Xi in February and immediately after the closing of the Winter Olympics puts Beijing in an awkward position. At worst, it is likely to cement the perception of China’s complicity in the decision for war. At best, it implies that Xi Jinping locked the Chinese side into a situation in which the tail could wag the dog. Either way, this is likely to be the source of some frustration among the political elite in China.
Also, while there might be some elite frustration, but so far, Xi appears to be firmly in control.
Finally, there was also a Quad leaders meeting this week. The Ukraine issue was discussed there. Here’s the joint statement after the call.
“Today the Quad Leaders – Prime Minister Scott Morrison of Australia, Prime Minister Narendra Modi of India, Prime Minister Fumio Kishida of Japan, and President Joe Biden of the United States – convened to reaffirm their commitment to a free and open Indo-Pacific, in which the sovereignty and territorial integrity of all states is respected and countries are free from military, economic, and political coercion. They reaffirmed their dedication to the Quad as a mechanism to promote regional stability and prosperity. The Quad leaders discussed the ongoing conflict and humanitarian crisis in Ukraine and assessed its broader implications. They agreed to stand up a new humanitarian assistance and disaster relief mechanism which will enable the Quad to meet future humanitarian challenges in the Indo-Pacific and provide a channel for communication as they each address and respond to the crisis in Ukraine. In their continuing pursuit of a free and open Indo-Pacific, the Quad Leaders agreed to meet in person in Tokyo in the coming months.”
The thread below also captures what the individual countries said.
There’s been a lot of commentary on how India is caught in a bind. Well, yes current developments do present a challenge for Indian foreign policy, but I don’t think the Quad call exposed any major divisions. My take on this was:
“India’s position at the Quad meeting has been consistent with its earlier statements at the UN on Ukraine. India has called for the cessation of the conflict in earlier statements, and at the Quad meeting, it called for a return to dialogue and diplomacy. It has also emphasised the importance of respecting sovereignty and territorial integrity of states. So while there are specific differences in approaches that different Quad members do have, there are some basic principles that they all agree upon. First, all parties want an end to Russian aggression against Ukraine. Second, the joint statement that was issued after the meeting expressly talks about all members’ commitment to an Indo-Pacific where “sovereignty and territorial integrity of all states is respected and countries are free from military, economic, and political coercion.” This is important. Finally, on the impact of the war in Ukraine on the group, I think the informality of the Quad mechanism permits for specific differences. The Quad is being developed as a special purpose vehicle for providing public goods and pursuing stability and prosperity in the Indo-Pacific. That’s its primary objective.”
Also, do note this fantastic thread by Dr. Tanvi Madan on India’s policy amid all this.
Also Read:
China, Russia trade continues despite Western sanctions, but Beijing ‘will not ride to the rescue’
EXCLUSIVE China asks state insurers to review exposure to Russia, Ukraine-sources
III. Ukraine War & Chinese Tech Sector
by Megha Pardhi
The heat of the Ukraine War and Western sanctions on Russia was also felt by the Chinese tech sector this week. The war in Ukraine affects Chinese companies in three ways. First, operations of Chinese companies and Ukraine-China trade were affected due to the war. Second, sanctions by the US, EU, and other countries affect China-Russia trade. Sanctions on Russia and its removal from the SWIFT global payments system are likely to make the Russian market difficult to operate for many Chinese companies. Third, Chinese multinational companies are trying to balance their positions vis-a-vis Russian, Chinese, and Western governments on the war in Ukraine. For example, ByteDance’s Tik-Tok has emerged as a platform of propaganda for Russia and Ukraine. Both the UK and EU have asked to ban Kremlin-backed media on Tik-Tok in the EU and UK. It is not banned in Russia so far.
The Chinese government's official position does not endorse the sanctions; however, tech giants which have consumers both inside and outside China are in a fix. Not following the directions of Western nations could bring legal challenges over operations of Chinese companies in America and Europe. The possibility of such action is not unwarranted since the arrest of Huawei's CFO Meng Wanzhou was based on flouting US sanctions on Iran. Some Chinese companies had already taken heat due to the trade war between the US and China. Huawei, ZTE, Zhuhai Zhenrong, and many other Chinese companies have been placed under the US Entity List. Now Russian invasion of Ukraine has further put Chinese companies in a difficult position.
Additionally, Chinese social media companies are struggling to manage content related to Ukraine. There are many pro-war (pro-Russia) and anti-war sentiments among Chinese internet users. Some Chinese social media companies are reportedly removing anti-war content being posted outside of China. For example, Weibo reportedly deleted posts of a person who attended an anti-war protest in LA and posted about it on Weibo.
SCMP reported that e-commerce merchants in the Shenzhen area have also reported disruptions with AliExpress taking the hardest hit. The exclusion of Russia from SWIFT global payment systems has halted economic transactions between Chinese merchants and Russian customers. Ukraine is a member of the BRI. Hence, this war will affect the prospects of Chinese investments in Ukraine. This Reuters report aptly summarizes China's business interests in Ukraine.
According to a Quartz report that cites the UN COMTRADE database, China is a top tech exporter to Russia. Chinese exports to Russia include machinery, semiconductors, and other tech products. Some of these exports are likely to get affected by sanctions from the EU and US. For example, the US sanctions forbid any company from using American tech to trade with Russia. SMIC uses equipment from American suppliers like Applied Materials Inc. to make its chips. Hence, it comes under the preview of the US sanctions on Russia. However, SMIC hasn't clarified its position yet.
Effect of the war and actions of select Chinese companies:
Tik Tok / Douyin:
In China
No Public statement from ByteDance yet.
Banned 6,400 videos and suspended 1,620 live-streaming sessions that violated its rules as part of a targeted crackdown against users who "make a joke out of news events."
Took down videos calling for "capture of beautiful Ukrainian women."
Outside China
Banned RT and Sputnik in EU (because of EU's ban on Russian media).
The UK also asked Tik Tok to ban Russian media
Not banned in Russia. Had banned the account of RIA Novosti earlier but reportedly restored it later after the Russian government's intervention.
Tik Tok is very popular in Russia and Ukraine and hence has become a popular medium of spreading Russian propaganda. Ukrainians are also using Tik Tok to document the Russian invasion.
WeChat/Weixin
Posted note appealing to users to be objective when discussing international topics i.e. Ukraine.
Shut down improper content. For example, false information alleging that students can receive course credits for enlisting to fight in Ukraine.
Vulgar messages call on "beautiful Ukrainian women" to go to China.
A joint statement by five Chinese professors urging Russia to stop the invasion was reportedly deleted by WeChat.
Banned accounts and removed posts mocking situation in Ukraine (in China)
Bilibili
Actions against jokes on Ukraine (in China)
Didi
Ceased operations in Russia and Kazakhstan. However, this happened a few days before Russia invaded Ukraine. So the motivation is unclear. Didi has reportedly issued clarification now that it will not stop operations in Russia.
Lenovo
Halted shipments to Russia, but no official statement yet. Some Chinese internet users have criticized this move by Lenovo, apparently calling it “shame of the nation.”
Xiaomi
Product launch of Redmi Note 1 canceled in Ukraine. Xiaomi is the top smartphone brand in Ukraine (around 45% shipments).
Xiaomi is second top in Russia (around 26% shipments). Operations disrupted due to war.
Oppo
Ranked third in Ukraine (around 6% shipments). Operations disrupted due to war.
SMIC
SMIC uses equipment from American suppliers like Applied Materials Inc to make its chips. Hence, it comes under the preview of the US sanctions on Russia. However, SMIC hasn't clarified its position yet.
ZTE
Was important in building Ukraine's internet infrastructure. Operations disrupted due to war.
Huawei
Fourth most popular smartphone brand in Ukraine. Operations disrupted due to war.
Also Read:
IV. Chinese Analysts on the War
by Swayamsiddha Samal
On 27 February, 2022, five renowned Chinese historians, including Xu Guoqi, issued an open letter condemning Russia’s actions against its neighbour and calling for peace. The letter’s authors hoped to persuade Beijing to clarify its position: what Russia is doing is wrong, and China should say so loudly.
“This is simply a black and white matter. This is an invasion. As the Chinese saying goes: you cannot call a deer a horse. As Chinese historians, we do not wish to see China being dragged into something that will fundamentally harm the current world order. For the love of mankind, world peace and development, we should make this clear.”
However, just after two hours and forty minutes, Xu and his colleagues’ open letter was quickly removed by internet censors. Unsurprisingly, pro-war Chinese trolls attacked the authors, who are based in Nanjing, Beijing, Hong Kong, and Shanghai, calling them “shameful” and “traitorous.” “Why didn't you say anything during the West’s invasion of Iraq?” one sarcastically remarked.
In the Global Times, Chinese analysts commented on US President Joe Biden’s State of the Union address in which he devoted most of his time to the Russia-Ukraine crisis. Some observers believe that Biden’s speech, which traditionally focused on internal affairs, has been influenced by the ongoing geopolitical conflict in Europe, and that the strong words Biden used against Russia may signal the return of the Cold War, but Chinese analysts believe that Biden’s speech was not on the same level as late British Prime Minister Winston Churchill’s “Iron Curtain” speech, and that behind the over-effusive words of Biden’s speech, they found a weakening US.
According to Diao Daming, an associate professor at Beijing's Renmin University of China, the Iron Curtain speech signalled a significant shift in future international relations because the Iron Curtain divided the world into two major blocs and Biden did not mention anything about making Russia as its main enemy. Biden’s approval ratings range between 37 and 41 percent, according to various polls conducted by US media and institutes. “It appears that Biden was empowered to simply end Donald Trump’s term, but he did not get authorized to push any reform, even within the Democrats,” Diao said.
Fan Yongpeng, a US studies expert and deputy director of the China Institute at Fudan University in Shanghai, said that Biden’s handling of the coronavirus pandemic and inflation in 2022 were not well done and his term would be full of misfortunes and miseries.
According to Lü Xiang, a research fellow at the Institute of American Studies at the Chinese Academy of Social Sciences, the US wants to focus on dealing with Russia during the Ukraine crisis, so it did not further provoke China in terms of language and tone.
Shen Yi, a professor at the School of International Relations and Public Affairs of Fudan University said that Biden wanted to show his country's toughness against the Russian crisis but instead ended up showing the US’ vulnerabilities. He further criticized US’ unpreparedness to impose sanctions on Russia and said that the country’s capability and national strength were in trouble.
Biden said in his speech that “Our forces are not going to Europe to fight in Ukraine, but to defend our NATO Allies.” Shen said that this particular line was pointless and showed Biden’s weakness. He added that Russia never said that it would invade NATO. According to him, it meant that the US would leave Ukraine alone even though Kiev had pinned high hopes on Washington.
Many Chinese analysts believe that the only “thank you” China will receive for its assistance to the United States during the Ukraine crisis will be increased Western support for Taiwan, a more aggressive NATO, and another round of anti-Chinese alliance building in its neighborhood, such as the AUKUS. It is a well-known fact that the priority of American diplomacy in Asia is to forge alliances against China. Because of Beijing's deep distrust of the US, Chinese officials initially dismissed the information the Americans shared on Russia's invasion plan as psychological warfare.
The war has been a big discussion point on social media in China, such as on WeChat, the Douyin video app, and Weibo. Some are urging the Chinese government to seize Taiwan while the Ukrainian crisis is still unfolding. On Chinese social media, there is also an outpouring of support for Russia and criticism of the United States for its support for Ukraine. Some wonder why Russian President Vladimir Putin attempted to meddle in the affairs of another country by inciting Russian-speaking residents of Ukraine to revolt against their local governments. Notably, some commentators are questioning why the Chinese government did not support its ally Russia during a recent United Nations Security Council vote on a resolution condemning Russia's attack on Ukraine.
“It is not an easy situation for the government. It cannot support the war. But it is also uncomfortable about intense parading of anti-war sentiment because this has implications on the political situation in Taiwan, Tibet and Hong Kong,” said an unidentified Chinese university professor to Al Jazeera.
Sun Jiashan, a researcher at the Chinese National Academy of Arts, said that anti-Beijing supporters were behind the anti-war postings.
V. Ukraine War: Reactions Across the Indo-Pacific
by Shrey Khanna
a. Japan: Following the Russian invasion of Ukraine, Japan has moved quickly to impose sanctions on Russia. On February 23, Tokyo announced a ban on the issuing and trade of Russian government bonds in Japan. It also imposed sanctions on the Russian banks. The three Russian banks targeted by Japan’s sanctions are VEB, Russia’s state development bank; state-backed Promsvyazbank, which focuses on the country’s defense sector, and Bank Rossiya, reported The Wall Street Journal on February 24.
Then, on Friday, Kishida announced that his country “will sanction exports to Russian military-related organizations, and exports to Russia of general-purpose goods such as semiconductors and items on a restricted list based on international agreements”. He also announced that asset freezes and the suspension of visa issuance for Russian individuals and organizations" as well as asset freezes "targeting Russian financial institutions".
Previously, on February 17, Kishida had a phone call with Putin amid the growing scare of the Russian invasion of Ukraine.
During the phone call, Kishida had urged Putin to pursue a solution through diplomatic negotiations that all countries involved can accept," rather than "change the status quo through force". The latter course "would send the wrong message to Asia and the international community as a whole".
Kishida had also called Zelenskyy on February 15 to reaffirm that Ukraine was an important partner for Japan, which shares such fundamental values as freedom and democracy. He said:
“Japan, which is watching with great concern the increase in Russian troops on the border with Ukraine, continues to consistently support Ukraine's sovereignty and territorial integrity and doesn't recognize unilateral attempts to change the status quo by force”.
An article in The Japan Times argued that the government’s “energized” response to the crisis is starkly different compared to the Japanese response to Russia’s annexation of Crimea in 2014 and the Kerch Strait incident in 2018. An important consideration for Japan
“is the precedent it threatens to set for certain status quo-changing behavior. Russia is creating false justification for carving territory off of a sovereign country and then using its military forces to accomplish a fait accompli — that is, an action that once done is difficult to undo. The Japanese government, who is concerned about China doing the same thing in Taiwan and/or the Senkaku Islands, has likely deduced that such a precedent is dangerous and demands recourse.”
This leads Japan to feel “the need to reinforce the rules-based international order. If certain players are seeking to change or exploit the rules in ways that create existential crises, it is incumbent upon others to reinforce those rules whenever challenged; hence why we see so many countries right now championing the “rules-based international order.” For much of the international community, this is not just a buzzword, it is the architecture that underpins relations among countries in the post-World War, United Nations system.”
Another article in The Japan Times reported on February 26 that there were protests in Japan attended by around 2,000 people including Ukrainian nationals, Russians and Japanese nationals. Protestors held Ukrainian flags and signs reading "Stop the war in Ukraine" and "Hands off Ukraine."
Also, former Prime Minister, Shinzo Abe has asked the US to abandon strategic ambiguity on Taiwan defense. He said:
“The U.S. takes a strategy of ambiguity, meaning it may or may not intervene militarily if Taiwan is attacked. By showing it may intervene, it keeps China in check, but by leaving the possibility that it may not intervene, it makes sure that the [Taiwanese] forces for independence do not run out of control. It is time to abandon this ambiguity strategy. The people of Taiwan share our universal values, so I think the U.S. should firmly abandon its ambiguity.”
As this piece in The Washington Post argues, the Russian invasion is prompting assertive foreign policy from Japan. In the aftermath of the invasion, Japan has announced that “it would accept refugees from Ukraine and send bulletproof vests to Kyiv — extraordinary measures taken by a country that has historically been unwelcoming to refugees and also has a self-imposed arms exports ban because of its militaristic past.” The article also quotes the Japanese Prime Minister saying that “Japan needs to implement a fundamental upgrade of its defense capabilities.”
Meanwhile, as this article in DW points out that the Japanese response makes it likely any negotiations on the disputed Northern Territories with Russia will remain “dead in the water”.
b. Australia: The Australian government has condemned the Russian invasion of Ukraine. A statement released by Foreign Minister Marise Payne on February 22 said that Putin’s declaration
“flagrantly undermines Ukraine's sovereignty and territorial integrity and has no validity under international law. We also condemn President Putin's announcement that Russia is deploying so-called “peacekeepers” to eastern Ukraine. These personnel are not peacekeepers.
The Australian Government is coordinating closely with the United States, United Kingdom, European Union and other governments around the world to ensure there are severe costs for Russia's aggression. Along with our partners, we are prepared to announce swift and severe sanctions that would target key Russian individuals and entities responsible for undermining Ukraine's sovereignty and territorial integrity.”
In his remarks on the situation, Prime Minister Scott Morrison said Russian government had “launched a brutal invasion, unprovoked, on Ukraine, and should be condemned for doing so”.
On February 23, the government announced sanctions on Eight senior Russian security officials in the first round of sanctions and vowed to go after anyone “aiding and abetting” the invasion of Ukraine.
Morrison said that the Chinese government’s language about respecting Ukraine’s sovereignty and territorial integrity had improved over the past week, but Beijing should go further in denouncing Moscow’s actions. He said the Russian government “should be called out as thugs and bullies”.
A day after announcing sanctions, Morrison extended sanctions on additional 25 people. “This includes army commanders, deputy defence ministers and Russian mercenaries who have been responsible for the unprovoked and unacceptable aggression”. He further stated that “there will be further waves of sanctions as we identify those responsible for these egregious acts, including moving on over 300 members of the Russian parliament.”
On February 27, Morrison also said that “we'll be seeking to provide whatever support we can for lethal aid through our NATO partners, particularly the United States and the United Kingdom”.
In a statement on March 1, the Australian PM's Office issued a media statement, “Australian support to Ukraine”. It said:
Australia will provide around $70 million in lethal military assistance to support the defence of Ukraine, including missiles and weapons. We will also provide a range of non-lethal military equipment and medical supplies in response to a specific request from the Ukrainian Government.
Australia will also commit immediate humanitarian assistance of an initial $35 million to help meet the urgent needs of the Ukrainian people. This assistance will deliver lifesaving services and supplies, including the provision of shelter, food, medical care and water.
Our lethal and non-lethal military assistance, along with our humanitarian funding, are in addition to the significant sanctions we have already imposed on Russia.
On March 3, ABC News reported that the Australian government has approved more than 1,000 visas for Ukrainians displaced by the Russian invasion, with several people due to arrive in Australia this weekend.
After the reports of the Russian attack on the Zaporizhzhia nuclear power plant came out, Australian FM Payne wrote on Twitter:
“Deeply concerned about reports of shelling & fire at Zaporizhzia Nuclear Power Plant. The recklessness & dangers of Putin’s war are demonstrated by the direct threat & risks Russia is posing to critical infrastructure in #Ukraine, including nuclear power facilities.”
On the other hand, Australian PM told radio station 6PR it was important to send a “very clear message to anyone else, any other autocratic regime, and we know about a few of those in our own region … [to] not take the wrong lesson out of this”, reported The Guardian.
c. Singapore: On February 24, Singapore government said that it is “gravely concerned” at the escalation of tensions at the Ukraine-Russia. In a statement, Singapore’s Ministry of Foreign Affairs spokesperson said:
“Singapore is gravely concerned by Russia’s announcement of the start of a “special military operation” in the Donbas region; and reports of land and air attacks on multiple targets in Ukraine on 24 February 2022.
Singapore strongly condemns any unprovoked invasion of a sovereign country under any pretext. We reiterate that the sovereignty, independence and territorial integrity of Ukraine must be respected. We hope military actions will cease immediately; and urge a peaceful settlement of the dispute, in accordance with the UN Charter and international law.”
On March 3, Singapore's Permanent Representative to the United Nations Umej Bhatia said Singapore co-sponsored the resolution on the “situation of human rights in Ukraine stemming from the Russian aggression” tabled by Ukraine. The statement said:
“Singapore has always taken a consistent and principled position in support of the sovereignty, independence and territorial integrity of all countries. All states, big or small, must observe international law and the principles of the UN Charter. For a small state like Singapore, this is an existential issue. Accordingly, we have always condemned in the strongest terms possible any unprovoked invasion of a sovereign country under any pretext.”
He further stated:
“This is not about taking a side, but about taking a stand. This stand underlines Singapore's clear support, as a small state, for the key principles of sovereignty, independence and territorial integrity of all countries.”
On March 5, The Straits Times reported that the Singaporean government has banned its banks and other financial institutions from doing business with four Russian banks, as part of sanctions the Republic is imposing to hit the Russian economy for the invasion of Ukraine.
"Where there are existing business relationships, financial institutions must freeze any assets and funds of these four banks," the MFA statement said.
d. Indonesia: On February 22, Indonesian President Joko Widodo that said the crisis in Ukraine “must be dealt with carefully to prevent a major disaster for mankind. However, this peace effort must be swift and cannot be delayed.”
On February 24, He also posted on Twitter – without referring to Russia or Ukraine: “Stop the war. War brings misery to mankind and puts the whole world at risk.” Indonesia also released a five-point statement on February 25 “regarding Military Attacks in Ukraine”. It said:
Adherence to the purposes and principles of the UN Charter and International Law, including respect for territorial integrity and sovereignty, must continuously be upheld.
Therefore, the military attack on Ukraine is unacceptable. Moreover, the attack puts the people’s lives in grave danger and threatens regional as well as global peace and stability.
Indonesia calls for this situation to be put to an end and further calls on all parties to cease hostilities and put forward peaceful resolution through diplomacy.
Indonesia urges the UN Security Council to take concrete steps to prevent the situation from further deteriorating.
The Indonesian government, through the Ministry of Foreign Affairs, has prepared evacuation plans for Indonesian citizens in Ukraine. The safety of the Indonesian people is always the priority of the government.
Even though the Indonesian government condemned the military attacks in Ukraine, it stopped short of actually mentioning Russia.
This Radio Free Asia piece quotes analysts to point out that:
Indonesia “will refrain from commenting because we want the G-20 to run well,” Teuku Rezasyah, a professor of international politics at Padjadjaran University in Bandung, told BenarNews.
“The G-20 meeting in Bali will be attended by leaders of the U.S., Russia, and the European Union. So, Indonesia needs to make a statement that won’t be interpreted as taking sides. …As president of the G-20, Indonesia has a strategic position, but it also poses a dilemma.”
In his statement to the UN Emergency Special Session on Ukraine, the Permanent Representative of the Republic of Indonesia stated that the situation in Ukraine has harmed the peace in Eastern Europe. He stressed that military action in Ukraine is unacceptable. "Military actions in Ukraine put the lives of civilians at risk and threaten the regional and global peace and stability".
He further stated that “All parties must respect the goals and principles of the United Nations Charter and international law, including respect for sovereignty and territorial integrity”.
e. Vietnam: On February 23, Le Thi Thu Hang, Spokesperson of the Ministry of Foreign Affairs, stated that:
Viet Nam follows with keen attention the tensions in Ukraine, and calls on all parties to exercise restraint, step up dialogue and promote diplomatic measures to peacefully resolve disputes on the basis of respect for the United Nations Charter and the fundamental principles of international law, thereby contributing to peace, security and stability in the region and the world.
On February 25, the Spokesperson reiterated the call for restraint. Hang said:
“Viet Nam is deeply concerned with the armed conflict in Ukraine. We call on all relevant parties to exercise restraint, observe the United Nations Charter and the fundamental principles of international law, avoid the use of force, protect the people, and keep up dialogue to seek a peaceful solution. Such efforts would serve to ensure peace, security, stability and cooperation in the region and the world.
Viet Nam follows with keen attention the situation of the Vietnamese community in Ukraine, and upholds the need to ensure the life, property, and lawful rights and interests of Vietnamese nationals and businesses in this country. The Vietnamese diplomatic mission in Ukraine and domestic competent authorities are working closely to put in place necessary citizen protection measures.”
Unlike other Southeast Asian Nations, Vietnam has a strong trade relationship with Russia. As this Nikkei Asia piece argues, “Vietnam's electronics trade with Russia stands out. Vietnam exported $1.5 billion worth of electrical machinery and equipment, including smartphones, to Russia in 2020. This trade could be wiped out should the U.S. impose a Russia-focused Foreign Direct Product Rule -- the same rule it used for China's Huawei -- which would restrict the export of products using U.S. technology.”
However, Radio Free Asia reported that unlike the 2014 Euromaidan protests, this time the “Vietnamese media are covering the conflict in great detail, surprisingly without much of their usual pro-Russia bias.”
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