China News - 4 January 2021
Happy new year! Today’s newsletter is longer as it covers the past two weeks of China news. Our usual daily summaries will continue from tomorrow. Sign up to the CRG Weekly if you would prefer weekly updates.
International
EU and China strike new investment agreement. The EU and China agreed on a new investment deal that seeks to reduce non-tariff barriers faced by European companies operating in China. The agreement was negotiated for nearly seven years, with European firms securing access to new Chinese markets and a reduction in joint venture requirements. The deal includes a commitment by China to “continued and sustained” efforts to ratifying ILO conventions on the prevention of forced labour. The deal must still pass through the European Parliament. EU Summary, The Guardian, Reuters, NYT, 30 December
China-EU ties: all eyes on Macron as Merkel prepares to hand over policy reins. SCMP, 2 January
China orders Alibaba founder Jack Ma to pare down fintech empire. Over the past two weeks, Beijing has accelerated plans to bring Alibaba and Ant Group more closely under its control. In the final week of December, China’s market regulators announced an antitrust investigation into monopolistic practices at Alibaba - the first of its kind. Last weekend, central bank regulators met with Ant Group executives and ordered Ant to return to its origins as a payments services provider - and rectify “illegal credit, insurance and wealth management financial activities”. Jack Ma has not been seen in public for several weeks, and has even been replaced as a judge in his self-created reality TV show. NYT, Nikkei Asia, FT, 30 December
Liu Xiaoming to quit his role of Chinese ambassador to Britain. Liu Xiaoming, the current Chinese ambassador to the United Kingdom, is set to be replaced by Zheng Zeguang. Liu has served as ambassador to the UK since 2010. Called one of China’s “original wolf warriors” by CNN, he was seen as fierce critic of the UK decision to ban Huawei from 5G networks. His replacement, Zheng Zeguang, is a current vice foreign minister, having previously served as a senior diplomat in the US. Zheng also studied at Cardiff University for a year in 1986. SCMP, CNN, The Guardian, Beijing to Britain, FMPRC Profile, 28 December
China-US relations: Beijing says ‘new window of hope’ is opening as it offers Biden administration an olive branch. “China-US relations have come to a new crossroads, and a new window of hope is opening,” Foreign Minister Wang Yi said. “We hope that the next US administration will return to a sensible approach, resume dialogue with China, restore normalcy to the bilateral relations and restart cooperation.” SCMP, 2 January
Pompeo weighs genocide designation for China. Secretary of State Mike Pompeo has ordered a review to determine whether China’s repression of ethnic Uighurs in Xinjiang amounts to genocide. The timing of any final determination is unclear, but it has raised the prospect of the US’ top diplomat charging China with committing genocide before he leaves office. Foreign Policy, 23 December
China’s secret prisons in spotlight over Canadians held since 2018. Michael Kovrig, a former diplomat, and entrepreneur Michael Spavor are among almost 30,000 people who have been held in secret prison facilities from 2013-19. FT, 4 January
Pressure on Turkey to protect Uighurs as China ratifies extradition treaty. Yet to be ratified by Turkey, activists have warned that the treaty could endanger Uighur families and activists fleeing persecution by Chinese authorities. The Guardian, 29 December
Belt and Road: Turkey, Iran, Pakistan set to revive rail link to China's Belt and Road in 2021. Sri Lanka is also set to scrap two Japan-funded infrastructure projects, opening up a national conversation about foreign debt dependency. Nikkei Asia, SL, 29 December
Japan gave US and UK intelligence last year on China’s crackdown on Uyghurs in Xinjiang, in a sign of its role as the “Sixth Eye”. SCMP, 29 December
Canadian government blocks Chinese state-owned company from C$230 million deal for Arctic goldmine on grounds of national security. The Times, 29 December
UK, China and other UN Security Council members convene for talks on Iran nuclear deal. Al Jazeera, The Guardian, Gov announcement, 21 December
UK-China relations
Liz Truss and Foreign Office split over policy on China and Uyghurs. The Guardian reported that the trade secretary supports a Lords amendment to the trade bill which would give UK courts a preliminary role in determining whether genocide is being committed. MPs are set to vote on the amendment in the coming weeks. Patrick Wintour’s report also adds that the Foreign Office is due to present a new cross-government approach to China in the new year, focusing on setting stricter obligations on firms trading in Xinjiang to ensure their supply chains do not involve slavery. The Guardian, 23 December
Chinese media coverage of Brexit: How will Brexit impact Sino-British relations? A China Daily opinion article argues that Beijing can open more doors for 'global' UK. In the first nine months of this year, UK exports to China grew at over 11 percent (excluding crude oil and non-monetary gold). CGTN, China Daily, 30 December
China blasts Nato with British aircraft carrier ‘heading to South China Sea’, saying it would take the necessary measures to safeguard its sovereignty. The Chinese government have warned against the British navy dispatching warships to the disputed South China Sea. SCMP, 1 January
Hong Kong
Shenzhen 12: China jails 10 activists who fled by boat to Taiwan for up to three years. Foreign Secretary Dominic Raab said the UK government was "deeply concerned" that members of the group were "tried in secret" on Monday and were given "just three days' notice of their trial". The Guardian, Sky News, 28 December
Hong Kong activist Nathan Law applies for asylum in Britain. Law said he hoped he could “sound an alarm” over threats to democracy in Europe from the Chinese Communist party. The Guardian, New York Times, 21 December
Hong Kong media tycoon Jimmy Lai ordered back to jail after bail decision reverted. BBC, 31 December
Covid-19
Zhang Zhan: China jails citizen journalist for four years for Wuhan coronavirus reporting. The independent Chinese journalist was jailed for four years for “picking quarrels and provoking trouble” with her reporting on the Wuhan coronavirus outbreak. BBC, The Times, The Economist, 28 December
No ‘Negative’ News: How China censored the coronavirus. A new investigation by NYT and ProPublica highlights CCP directives that sought to control the narrative around coronavirus as early as January. The BBC also ran a report on state media censorship. NYT, BBC, 29 December
China promises free jabs for all as Sinopharm’s Covid-19 vaccine approved for general use. In late December, China also reported the detection of its first case of the new coronavirus variant found in Britain. BBC, SCMP, Inkstone, SCMP, 31 December
Nearly 500,000 in Wuhan may have had virus, says Chinese Centre for Disease Control and Prevention study. Researchers found an antibody prevalence rate of 4.43% in Wuhan - which would be 10 times higher than official case rates. BBC, 30 December
Covid: Wuhan scientist says she would 'welcome' visit probing lab leak theory. A team of 10 international scientists from WHO will travel to Wuhan in January. BBC, 21 December
Economy & tech
Forecasts: China to leapfrog U.S. as world's biggest economy by 2028 - five years earlier than previously estimated. A new report by CEBR attributed the faster growth to China’s pandemic recovery, while Nikkei Asia report that China’s economy is forecast to expand 8.2% in 2021. Nikkei Asia, Reuters, 26 December
NYSE delists three Chinese telco giants to comply with US executive order. While shares are thinly trade on the NYSE compared to their primary listings in Hong Kong, China’s Ministry of Commerce has pledged to respond. Bloomberg, Yahoo, 2 January
China grapples with stagnant inflation of 0.5% as consumers remain cautious. Despite surging industrial production, core inflation has stagnated, indicating subdued household demand. FT, 29 December
Debt: Chinese local government investment vehicles evade borrowing limits. Regional governments are transferring assets on to the books of local investment companies to lower their official debt-to-asset ratios. FT, 3 January
China’s elderly left marginalised by Covid surveillance tech. A lack of digital literacy has disproportionately affected China’s senior citizens as the pandemic has made mobile apps and programs indispensable. The Telegraph, 1 January
Longer reads & opinion
UK newspaper editorials on how the West should approach China in 2021:
The West will have to push back more effectively against a Beijing that has recovered its global swagger. The Times, 2 January
Xi Jinping’s expansionist policies abroad and dictatorship at home make pressing the need for new geopolitical strategy. The Observer, 3 January
2020 should mark the end of Western naivety about the nature of China’s regime. The Telegraph, 29 December
Year in Review: How the pandemic strengthened the Chinese Communist party. In 2020 Mr Xi may have won a political battle at home. Success abroad is far less assured. The Economist, 30 December
The EU’s China deal is bad for democracy. Britain can make its case on China, and also reinforce American thinking, effectively and consistently in European capitals. Edward Lucas in The Times, 4 January
Chaguan: China uses mass tourism to smother Xinjiang’s culture. An influx of Han tourism is changing Kashgar. The Economist, 2 January
China’s Belt and Road: Down but not Out. China’s overseas infrastructure lending has declined over the past four years, but other forms of investment have held up. Rhodium Group, 4 January
China used stolen data to expose CIA operatives in Africa and Europe. In 2010, Chinese officials discovered that US spy networks had systematically penetrated their government - and CIA agents had bribed Chinese officials to rise up the Chinese bureaucracy. Foreign Policy, 21 December
With concessions and deals, China’s leader tries to box out Biden. RCEP, climate change pledges and an EU investment agreement underline the difficulties Biden will face in forging a united front. NYT, 3 January
As a liberal democracy, Taiwan needs to be part of the UK’s China strategy. The Diplomat, 31 December
There’s no place for a Jack Ma in today’s China. Ma’s outspokenness eventually cost him. Quartz, 31 December
Please email comments, feedback or articles to julia@chinaresearchgroup.org.