China News 28 May 2020
International
Hong Kong
Pompeo says Hong Kong no longer autonomous, implies US will adopt sanctions. The US Secretary of State said: “No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground.” The security law was “only the latest in a series of actions that fundamentally undermine Hong Kong's autonomy and freedoms,” Mr Pompeo said. “It is now clear that China is modelling Hong Kong after itself.” He said he had a “productive call with UK Foreign Secretary Dominic Raab” on the issue. BBC, 27 May
State media says any US actions just “wastepaper.” The Global Times says: “The China-US "battle" over Hong Kong is on… Hong Kong is under China's sovereignty, and whatever act Washington passes is just wastepaper.” The paper says “A long-term rivalry between China and the US is inevitable” and China should “be prepared to engage in a long-term battle with the US.” Global Times, 27 May
Taiwan will help fleeing Hongkongers move to island, Tsai Ing-wen says. SCMP, 27 May
Bar Council of England and Wales condemns new security law and repression. Statement, 27 May
Lisa Nandy has written to the Foreign Secretary demanding action on Hong Kong. Twitter, 26 May
Hong Kong’s national security legislation was passed at the National People’s Congress by a margin of 2,878 for, and 1 against. CNBC, 27 May
Hong Kong's China national anthem bill aims to legislate 'respect.' Reuters, 27 May
“Escaping the dragon: the government’s new approach to China.” The Spectator’s cover piece by James Forsyth looks at how the UK government’s stance on China is changing. It says the aim is to get this country ‘off the trajectory of ever-increasing dependence’ on China. This includes reducing import dependence, controlling takeovers and stopping using Chinese cash to plug gaps. Regarding Huawei, Forsyth writes that “the choice now is between time limit for the use of Huawei kit in 5G infrastructure, or no role at all for the Chinese company — with ‘sentiment shifting to the harder position.’” On universities: “One No. 10 figure sums up the position as: ‘More Chinese students, fine. But universities can’t be proxies for Chinese state influence.’” The piece also looks at the role of the CRG and UK plans to try and build alliances in Europe and beyond. Spectator, 28 May
China must step up combat readiness, says Xi. The Chinese army must step up combat readiness, Chinese President Xi Jinping has said, as the country increases defence spending to tackle “security threats from Taiwan independence forces”. Wei Fenghe, the defence minister, said: “The United States has intensified the suppression and containment of our side since the outbreak, and the Sino-US strategic confrontation has entered a period of high risk.” He added: “We must strengthen our fighting spirit, be daring to fight and be good at fighting, and use fighting to promote stability.” Times, SCMP, 27 May
Huawei CFO Meng Wanzhou loses first round of Canada court battle, prompting Beijing anger. She had aimed to strike down attempts to extradite her, citing dual criminality requirements. “The Canadian side should immediately correct its mistake, release Ms. Meng and ensure her safe return to China at an early date so as to avoid any continuous harm to China-Canada relations,” Chinese Foreign Ministry spokesman Zhao Lijian said on Tuesday. The Global Times quotes an expert saying the ruling will be bad for Canada-China trade: "You can always give some projects or orders to other countries.”
Canada’s National Post quotes Charles Burton, a former diplomat in Beijing saying, “I think the Chinese government genuinely believes that the independence of the judiciary in Canada is a sham”. It quotes an article by Xi Jinping in which he argued, “We must never follow the path of Western ‘constitutionalism,’ ‘separation of powers,’ or ‘judicial independence,’” but that China “should be apt at using law when participating in international affairs. ” The China Collection, National Post, Global Times 27 May Globalnews, 26 May & The Diplomat
Merkel Says EU Has ‘Strategic Interest’ in Working With China. German Chancellor Angela Merkel said the European Union has a “great strategic interest” in maintaining cooperation with China in the face of a widening list of grievances with the government in Beijing. Germany takes over the six month EU presidency in July and will make the relationship with China a top priority according to the report. Bloomberg, 27 May
German FDP joins Greens in calling on Merkel to cancel Leipzig summit over Hong Kong, as Federation of German Industries condemns security law. The BDI said “China must not frivolously gamble away its credibility” and that by undermining the rule of law, the security law risked making Hong Kong a less attractive location. Twitter 28 May & BDI statement,
China and India move troops as border tensions escalate. Donald Trump has offered to mediate in the dispute. Guardian, FT, Reuters, 27 May
Motion backing Hong Kong blocked after campaign by Chinese students at Warwick. Times, 28 May
China Pressures Chinese Students in the U.S. WSJ, 26 May
U.S. to Expel Chinese Graduate Students With Ties to China’s Military Schools. NY Times, 28 May
Economy / tech
China's rich skirting Hong Kong to seek asset safety elsewhere. More than half of Hong Kong’s estimated private wealth of over $1 trillion is from mainland individuals who have parked money there, according to bankers. Hong Kong has benefited from its proximity to China and separate legal system, as well as its dollar-pegged currency, but there are now worries about it losing its edge as a global financial centre due to capital and talent flight. Reuters, 28 May
U.S. Falters in Bid to Replace Chinese Rare Earths. Foreign Policy, 25 May
China’s COMAC making progress to challenge Airbus and Boeing, with 815 orders for new passenger jet. ECNS, 27 May
Huawei builds up 2-year reserve of 'most important' US chips. Nikkei reports that for Huawei to deliver 5G base stations it needs Field Programmable Gate Arrays chips, for which there is currently no alternative outside the US. Nikkei Asia Review, 28 May
Long reads
“China’s Banking Sector Risks and Implications for the United States”. “As the COVID-19 fallout grows, exchange rates are the most likely channel through which economic pain could be transmitted to U.S. investors. But a number of other channels, such as the inclusion of Chinese equities into major international indexes, are also raising the exposure of U.S. investors and savers to China’s risky banking system.” USCC, 27 May
“We need a Pompeo Plan to tame the dragon.” Dominic Green - Spectator USA
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