China News - 28 February 2022
This newsletter is a little longer to include key China-related stories from the unfolding Russian invasion of Ukraine. It will resume in the usual format tomorrow.
Next CRG event: China and Russia: A deepening alliance? Maria Repnikova, Sergey Radchenko and Bonny Lin will unpack what Russia’s invasion of Ukraine means for the trajectory of China-Russia relations.
Monday 7 March, 5pm GMT. Register for this online event here.
China’s Ukraine crisis
Xi pursues policy of ‘pro-Russia neutrality’ despite Ukraine war. Chinese diplomats’ attempts to balance Beijing’s policy of support for global peace and stability while avoiding any criticism of Moscow are a sign that the war is unlikely to derail China’s quasi-alliance with Russia, some analysts say. Others wonder, however, whether this time, by starting a war in Europe, Putin may be putting too great a strain on the partnership. FT, The Guardian, 27 February
China abstains from voting on UN Security Council resolution condemning Russia. China's move was seen as a diplomatic win for countries who want to show Russia as being isolated internationally. UK-based diplomats, looking at the stance adopted by China last week, were expecting Beijing to join Russia in voting against the US-sponsored motion. Sky News, Caixin, 26 February
Cracks emerge between Beijing and Moscow as two Chinese banks restrict lending. Offshore units of Industrial & Commercial Bank of China have stopped issuing dollar-denominated letters of credit for Russian physical commodity exports, while Bank of China has also cut down on funding. The move comes after Russia’s invasion of Ukraine prompted a wave of sanctions aimed at shutting the country out of financial markets. The Telegraph, Bloomberg, 25 February
US sought China’s help to avoid Ukraine invasion, but Beijing passed information to Russia. An insider revealed that US officials alerted Foreign Minister Wang Yi and Ambassador Qin Gang, who discounted the idea of an invasion and passed Washington’s information along to Moscow with assurances that it would not try to stop any action. SCMP, 26 February
For Chinese in Ukraine, it’s an anxious wait for a flight out to safety. SCMP, 26 February
‘Of course I worry’: shock waves from Ukraine reach Taiwan. The Guardian, 25 February
Analysis & opinion:
What will China do? There are signs it is uneasy about Putin’s methods. China’s abstention will send a nervous tremor through the Russian ministry of foreign affairs that China’s protection is not unconditional. Patrick Wintour. The Observer, 27 February
Why the Chinese internet is cheering Russia’s invasion. As the world overwhelmingly condemns the assault on Ukraine, online opinion in China is mostly pro-Russia, pro-war and pro-Putin. Li Yuan. NYT, 27 February
China, Russia and the race to a post-dollar world. Financial markets are going to become a major field of battle - a place to defend liberal values and renew old alliances. Rana Foroohar. FT, 27 February
Investment giants hugging China should pause and look at BP’s Rosneft plight. Oliver Shah. The Sunday Times, 27 February
It’s time to stop letting despots weaponise our Western freedoms. Nick Timothy. The Telegraph, 27 February
Other international
Chinese lenders squeeze African borrowers even harder. Under a $200mn loan from China Eximbank for the expansion and modernisation of Uganda’s Entebbe airport, the Ugandan government is required to channel all revenue from the country’s only international airport into an escrow account, according to the contract obtained by AidData. “This is more aggressive than what we have previously seen,” said Bradley Parks, executive director at the US-based research lab. FT, 28 February
China opens party school in Africa to teach its model to continent’s officials. SCMP, 26 February
China buys power in the Middle East with new Iraq pact. Mustafa al-Kadhimi, Iraq’s prime minister, is promoting an economic alliance with China and has announced investments which, if fulfilled, will transform the lives of hundreds of thousands of Iraqis. The Times, 26 February
China willing to work with G7 on Build Back Better World initiative. Reuters, 28 February
‘Damp squib’: Beijing condemns UK’s plan to expand visa eligibility for younger Hongkongers. HKFP, 25 February
Economy & tech
Arm China CEO wants to IPO independently of British parent. Allen Wu commented that the intellectual property licensing and royalty fees Arm China generates account for about 25% of British semiconductor design firm Arm’s total revenue. He also asserted that it had developed a portfolio of technologies that allow it to continue operations without its parent company. Reuters, 26 February
Hong Kong bankers plot escape from zero-Covid nightmare. With no end in sight, the extremities of ‘zero Covid’ are pushing financiers out. Banking giants are consulting with staff members who want exit routes: Citigroup has moved senior staff out, and Bank of America is reviewing which teams it could relocate to Singapore. The Telegraph, 26 February
China’s economy suffers blow as Beijing’s stimulus push fails to jolt construction. SCMP, 28 February
Evergrande sells 4 projects to Chinese state-owned enterprises. Nikkei Asia, 26 February
China demands Morgan Stanley share details on US block trade probe. FT, 25 February
Long reads
The Reshuffling reports: Anticipated major leadership changes at China’s 20th Party Congress. Cheng Li. Brookings, 26 February
Why did a Peking University paper on China’s tech deficiencies get deleted? Paul Triolo. SupChina, 25 February
Uncharmed: why Chinese film fans are shunning Hollywood. Vincent Ni. The Observer, 27 February