China News - 3 May 2022
Next event: China's Energy Security. How is Beijing’s quest for energy security impacting global energy markets and geopolitics? Tom Tugendhat MP is joined by Helen Thompson, Dr Michal Meidan and Lara Dong on 11 May at 10:30am BST. Register here.
International
US holds high-level talks with UK over China threat to Taiwan. Kurt Campbell, the White House Indo-Pacific co-ordinator, and Laura Rosenberger, the top National Security Council China official, held a meeting with UK representatives on how they can co-operate more closely to reduce the chances of war with China over Taiwan and to explore conflict contingency plans, according to people familiar with the situation. The Taiwan dialogue is, reportedly, intended to complement advanced discussions that the US has been holding with Japan and Australia as Beijing has stepped up military activity around Taiwan. FT, 1 May
Beijing teeters on edge of Covid lockdown. China’s capital is tightening coronavirus restrictions after reporting 41 cases on Sunday. Officials in the city of 22 million have closed gyms and cinemas and raised Covid-19 testing requirements in an effort to avoid a similar situation to Shanghai. The ratcheting up of controls in Beijing followed small-scale protests that have flared in Shanghai amid food shortages, as well as online complaints over the implementation of President Xi Jinping’s zero-Covid policy. FT, 2 May
Impact of China’s Covid lockdowns being felt in West. The Times, 30 April
Taiwan and Hong Kong relax Covid measures. Reuters, Bloomberg, 3 May
HSBC's top shareholder calls for banking giant's break-up. Chinese insurance giant Ping An has set out a plan to split the company to HSBC's board, according to media reports. The plan would unlock greater value for HSBC shareholders by separating its Asia operations, where the bank makes most of its money, and other parts of its business. The London-headquartered bank went on the defensive, arguing it has the right strategy as the global financier for trade between the East and the West. Reuters, 1 May
China meets banks to discuss protecting assets from US sanctions. Chinese regulators have held an emergency meeting with domestic and foreign banks to discuss how they could protect the country’s overseas assets from US-led sanctions similar to those imposed on Russia for its invasion of Ukraine, according to people familiar with the discussion. FT, 1 May
Ukraine renews calls to China to mediate in war with Russia. Further conflict would not be in China’s interests and Beijing should act as a guarantor of Ukraine’s security, Ukrainian Foreign Minister Dmytro Kuleba said in an uncensored interview with Chinese state news agency Xinhua. SCMP, 1 May
As China maintains ties with Russia, Europe turns to Japan and India. Politico, 1 May
Solomon Islands to supervise Chinese police operating there. Reuters, 2 May
Dozens missing after building collapses in China in latest incident. The Guardian, 30 April
Economy & tech
China’s economy appears to be stalling, threatening to drag down global growth. Purchasing manager indexes released by China’s government showed contractions in factory and service-sector activity for a second straight month. Economists say that underlying conditions, worsened by Covid lockdowns in Shanghai and elsewhere, are starting to feel more akin to a recession. WSJ, 1 May
China to end regulatory storm over Big Tech, sources say. China is scheduled to have a symposium with the country’s Big Tech firms on the heels of Friday’s Politburo meeting, raising hopes that Beijing will stop its sweeping regulatory clampdown on the tech sector and give internet platforms larger roles to help prop up the ailing economy. Technology stocks led a broad rally in Chinese equities on Friday. SCMP, 29 April
Boris Johnson joins last-ditch bid to win Arm listing for London. As part of a last-ditch effort to persuade chip designer Arm’s Japanese owner SoftBank to rethink its strong preference for listing in New York, the British Prime Minister has written to SoftBank executives, according to people familiar with the matter. FT, 2 May
Chinese developer sells another London Nine Elms project for £187m loss. The Telegraph, 29 April
Japan, US to deepen cooperation in securing cutting-edge chips. Nikkei Asia, 2 May
Opinion & editorial
Xi has made his choice: he is sticking with Vladimir Putin. Their axis of autocracy presents a far-reaching challenge to western democracies, which the UK in particular is struggling to come to terms with. Ian Williams. The Spectator, 1 May
How the West got China so catastrophically wrong. Fifty years of encouraging closer economic links with Beijing has proved misguided. George Magnus. The Sunday Telegraph, 1 May
Why Europe will have to face the true cost of being in debt to China. Nick Beake. BBC, 3 May
Breaking up is hard to do for HSBC. Jim Armitage. The Sunday Times, 1 May
Long reads
China’s Ukraine Conundrum. Why the war necessitates a balancing act. Yan Xuetong. Foreign Affairs, 2 May
Xi Jinping is fighting a war for China’s history. Fear of “historical nihilism” has haunted China’s leadership for years. Katie Stallard. Foreign Policy, 1 May
Who owns the Earth? The scramble for minerals turns critical. China controls the metals that are vital to the modern economy. Is the West’s fightback too late? Jon Yeomans and Fred Harter. The Sunday Times, 1 May
Chartbook #118: China's growth prospects. Adam Tooze. Substack, 1 May