Daily roundup Sept.22, 2022
Good evening, China watchers.
Today’s global news:
China nominates a new EU ambassador to fill a 10-month vacancy amid strained ties with the West. The nomination of Fu Cong, who is currently the director general at the foreign ministry’s Department of Arms Control, will now need to be vetted by the EU’s External Action Service but it is not clear when he may be posted.
One big trend: China continues to march on with allies in the Middle East and Central Asia while the rest of the world struggles to find a replacement.
Europe
Germany
Beijing dissuades Germany from cutting reliance on China —----- Global Times
In response to Berlin’s recent tougher trade policy with China, a spokesperson from China's Ministry of Commerce said the European country should “listen more to voices from its companies” and “safeguard the interests of the cooperation between enterprises of the two countries.”
Last week, Germany's economy minister Robert Habeck said in an interview with Reuters that he’s likely to veto China’s bid for the Hamburg Port terminal, citing worries over Chinese investment in critical infrastructure. However, his concern was dismissed by the port city’s mayor Peter Tschentscher. In addition, a spokesperson with the port operator Hamburg Hafen und Logistik AG said the deal would pose no national security threats. China’s Cosco Shipping Group announced Tuesday it had delayed the acquisition of a 35 per cent stake in the terminal.
Czech Republic
Czech Republic plans more cooperation with Taiwan amid China tensions - Taipei Times
Czech Senator Jiri Drahoš said he hoped to facilitate art exchange and the launch of direct flights between Taipei and Prague. Drahoš, along with a 14-member delegation, embarked on a six-day visit to Taiwan on Sunday. The trip, he said, was aimed at boosting collaboration in the semiconductor industry.
Drahos said the Czech Republic is a key supporter of the Ukrainian defence against Russia, having accepted about 400,000 Ukrainian refugees, and the financial support from Taiwan helps the integration of these refugees.
Italy
Italy's far-right politicians play the China card, again. — Bloomberg
Matteo Salvini, leader of the popular League Nord party, called for a referendum over the European Union’s ban on new fossil-fuel cars starting 2035.
Amid a last-minute push for votes ahead of a general election on Sept. 25, Salvini told the media that the traditional car factory workers should decide “if it’s fair to fire people in Italy and give China an advantage.”
Chinese electric car makers have already established a bridgehead in Europe by prioritizing sales volume over profit margin. According to this Forbes article, the “excessively high prices” of European EVs are leaving the affordable-vehicle market at the mercy of the Chinese.
Central Asia
Kazakhstan
China and Kazakhstan set up offshore Yuan clearing —--- Caixin
The National Bank of Kazakhstan and the People’s Bank of China signed a cooperation memorandum to establish the Chinese yuan’s clearing arrangements in the Central Asian country. The document allows the development of yuan-based mutual settlements in Kazakhstan, according to a Sept. 21 press statement from the National Bank. The move is part of Beijing’s years-long de-dollarisation plan. During last week’s SCO summit, Chinese President Xi Jinping proposed to expand the shares of local currency settlements, strengthen the development of local-currency cross-border payment and settlement systems, and even establish an SCO Development Bank.
East Asia
South Korea
South Korea reduces dependence on China, looks to Canada for natural resources - Globe and Mail
It seems that Seoul is cozying up to Canada amid trade tension with the U.S. and decoupling from China. In the first official visit of a South Korean leader to Canada in eight years, the recently-elected president Yoon Suk-yeol will meet Prime Minister Justin Trudeau to discuss ways to tackle China’s dominance in the global supply chains. The tech powerhouse is also keen to purchase Canadian liquified natural gas when it becomes available for export. During his visit to Canada, Yoon said he and his Canadian counterpart will share ideas on Indo-Pacific strategies that both countries are drawing up. Yoon has agreed to attend preliminary talks for a U.S.-led tech alliance named Chip 4 aimed at curbing China’s tech influence in the Indo-Pacific region.
Middle East
Egypt wants more loans from China - Bloomberg
Egypt is hoping to secure affordable loans from China and Japan as the debt-ridden country struggles with a financial crisis. Finance Minister Mohamed Maait said the country is looking to diversify its funding sources and has had discussions with government officials from both countries. The finance ministry is also looking into issuing bonds worth US$500 million in the Chinese market and offering another $500 million of green debt.
This is hardly the first time the Muslim-majority middle power has received money from China. The two countries have maintained a mutually beneficial partnership since 2014 where Beijing expanded its Belt and Road Initiative through infrastructure loans while Cairo received “emergency loans” from the Asian superpower. Unlike the western-led IMF, these Chinese loans keep the recipient’s economy afloat without requiring economic reforms or any restructuring of debt payment with all major creditors. But the IMF's stringent rules haven’t stopped Egypt from seeking a new loan following funding deals with the institute amounting to US$20 billion over the past five years.
China advocates for Middle East-China security collaboration - CGTN
Beijing said it’s ready to work with the Middle East to implement the CCP’s Global Security Initiative (GSI). The vague Initiative was first announced by Chinese President Xi Jinping in April 2022. At the announcement, Xi emphasized the importance of respecting and safeguarding each country's security and development model through dialogue and cooperation but gave no details about how it will be implemented. GSI is based on the principle of “indivisible security,” which is also endorsed by the Kremlin.
*More on “indivisible security” and what it could mean for China here.
China’s Foreign Minister Wang Yi made the promise to cooperate with the Middle East via video at the second Middle East Security Forum. The meeting was held Wednesday in Beijing and included keynote speeches by former officials from Jordan and the Palestinian Authority. Yi called on Middle Eastern nations to prioritize regional security dialogue, take ownership of their security issues, and adhere to UN security council resolutions.
Beijing’s involvement in the Middle East has been mostly focused on infrastructure projects and bilateral trade agreements. But the CCP could make its foray into security in order to protect its economic investments. China’s so far limited security engagement in the MENA region includes providing military training for troops in Syria, building a naval base in Djibouti, and setting up a drone factory in Saudi Arabia.
Thank you for reading. If you’d like to read previous issues of this newsletter, click here.
As always, feedback/tips/your views can be sent to themiddlepower@gmail.com.