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By STUART LAU
with ARI HAWKINS
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WELCOME TO CHINA WATCHER! This is Stuart Lau reporting from Brussels. For once the U.S. isn’t the biggest cause of trouble for China this week. Enter the Wagner Group, which until this weekend was on the (Chinese) right side of (Russia/Ukraine) history. We’ll bring you all the latest about how Chinese officials, media and state-affiliated academics see the political upheaval. Plus, we have got you the leaked draft statement of the European Council’s upcoming summit, in which EU-China relations will come up. Keep reading so you don’t have to wait until Friday for the EU’s official updates.
BUT FIRST, TUNE IN TODAY: At 3:30 p.m. CET (9:30 a.m. EST) today, as part of the POLITICO Live Competitive Europe Summit, join me for a panel on EU-China relations with European External Action Service Secretary-General Stefano Sannino, Japan’s Ambassador to the EU Yasushi Masaki, and Carlo D’Andrea, vice-president of the EU Chamber of Commerce in China. You’re also welcome to watch it live using this link.
RUSSIA DRAMA — WHAT DOES IT MEAN FOR BEIJING?
PUTIN’S PROBLEM IS XI’S PROBLEM: It’s barely three months since Chinese President Xi Jinping paid a visit to the Kremlin and his Russian counterpart-cum-best friend Vladimir Putin became mired in the most serious direct challenge to his 23-year reign. Yevgeny Prigozhin, the Wagner mercenary chief who attempted a mutiny against Putin on Friday, soon became a household name on Chinese social media — and a headache for Beijing.
Beijing sat silently throughout Saturday as Wagner fighters seized the Russian city of Rostov-on-Don and moved to storm Moscow with demands for military leadership changes from Putin. That contrasted with Western governments’ issuing concerned statements assuring they were monitoring the fast-evolving situation in Russia.
Breaking the silence, belatedly: When Beijing finally spoke out on Sunday, it was already well after Prigozhin agreed to end the military rebellion by way of a deal with Putin brokered by Belarusian leader Alexander Lukashenko. "This is a matter of Russia's domestic affairs," the Foreign Ministry in Beijing said in a statement. "China supports Russia in safeguarding national stability and delivering development and prosperity."
Timely meeting: Russian Deputy Foreign Minister Andrei Rudenko apparently scheduled a meeting in Beijing on Sunday, just as his government was thrown into a state of uncertainty back home. He met Chinese Foreign Minister Qin Gang, while Qin’s deputy Ma Zhaoxu relayed Beijing’s words of approval for Putin, saying: "Under the strategic guidance of President Xi Jinping and President Vladimir Putin, the Chinese-Russian political trust has continued to deepen.”
But but but: Beijing, though, made it public that it wanted Moscow to keep China informed as quickly as possible in the future. According to the ministry, Ma told Rudenko to "communicate and cross-check in a timely manner" in the face of the "complex and difficult international atmosphere."
Moscow’s feel-good account: The Russian Foreign Ministry said Rudenko's trip to Beijing was a follow-up to Xi's visit to Russia in March, aimed at entrenching and expanding bilateral ties. "The Chinese side expressed its support for the efforts made by Russia's leadership to stabilize the situation in the country in connection with the events of June 24 and affirmed its interest in Russia's strengthened unity and continued thriving," it said in a statement. China didn’t mention that particular date.
CHINA HAS DOUBTS: It doesn’t take a Ph.D. in Sinology to imagine a fair amount of shock in Beijing this weekend. “Of course, this incident illustrates the complexity, nuance and uncertainty in relation to Russia’s domestic situation,” Professor Shen Yi of Fudan University wrote in an article, even as the nationalist scholar ridiculed those who harbored hope for Ukraine as a result. “Some expect a positive change in favor of Ukraine. For now, such a view is detached from reality, a misjudgment of Russia’s internal affairs.” Yu Sui, a professor at the China Center for Contemporary World Studies, echoed the view. “It undoubtedly rings an alarm bell for Russia,” he told China Daily newspaper. “It [Wagner] reminded of the Chinese saying about feeding a tiger and then inviting trouble.”
Lesson for Xi: The Chinese president “cannot be happy about Putin's unending series of setbacks, which are weakening China's key ally in its confrontation with the West,” Professor Minxin Pei of Claremont McKenna College wrote in an opinion piece on Bloomberg. “But the Chinese leader cannot be entirely ungrateful either: Putin's woes are offering up lessons too precious not to learn.”
MORE EVIDENCE OF ARMS SHIPMENT: The New York Times reported on Friday two occasions last year where tens of thousands of kilograms of smokeless powder — enough propellant to collectively make at least 80 million rounds of ammunition — was sent from China to the remote Russian border town of Zabaykalsk. Here’s the story.
COMING UP: EUROPEAN COUNCIL SUMMIT
EU LEADERS RESORT TO SOFT TONE ON CHINA: The 27 national leaders will gather in Brussels on Thursday and Friday for the next EU Council summit. Leaked drafts of the post-summit statement obtained by POLITICO’s Suzanne Lynch and Barbara Moens show that the Council, led by President Charles Michel, is pondering a soft tone on China, especially in terms of trade.
“Despite their different political and economic systems, the European Union and China have a shared interest in pursuing constructive and stable relations, anchored in respect for the rules-based international order, balanced engagement and reciprocity,” according to the latest draft, which adds that the EU will “continue to engage” with China on global challenges.
While calling for derisking and diversification, the EU leaders are expected to say that the bloc “does not intend to decouple or to turn inwards” — nor does it design policies “to harm China nor to thwart China's economic progress and development.”
The exception — Taiwan: The EU leaders are expected to employ a tougher tone on Taiwan. “The East and South China Seas are of strategic importance for regional and global prosperity and security. The European Union is concerned about growing tensions in the Taiwan Strait,” the draft document shows. “The European Council opposes any unilateral attempts to change the status quo by force or coercion.”
FRENCH AGREEMENT: French President Emmanuel Macron also said he’s “dead against” Chinese aggression on Taiwan, in an interview with CNN aired this weekend. “I want to be clear first on Taiwan, we are in favor of the status quo, which means we are dead against any aggression. And we do respect the existing model. And this is what I reiterated with President Xi Jinping,” he told the “Fareed Zakaria GPS” program, when asked about controversial remarks about Taiwan that he made in a POLITICO interview.
GERMANY’S THE ONE TO WATCH: As is always the case, Berlin’s attitude will be key in the European Council summit — not least on the China file since Germany is the bloc’s biggest trading partner with China. Your correspondent was covering Chancellor Olaf Scholz‘s meeting with the visiting Chinese Premier Li Qiang in Berlin last week. The word “Taiwan” didn’t come up at all in Scholz’s remarks at the no-questions-allowed “press conference” with Li. Even though the Green Party, which runs the economy and foreign ministries in the coalition government, is in favor of values-based foreign policies, the chancellor is keen not to rock the boat with the Chinese economy. The degree to which he embraces the EU’s strategy of derisking will be indicative of Berlin’s way forward.
TRANSLATING WASHINGTON
WHITE HOUSE DOUBLES DOWN ON ‘DICTATOR’ REMARK: Secretary of State Antony Blinken stood by President Joe Biden after he referred to Chinese President Xi as a dictator during a fundraising event last week, per our own Kelly Garrity. "It's very clear that when it comes to China, we are going to do and say things that they don't like. They are going to do and say things that we don't like," Blinken said on CNN's “State of the Union” when asked if Biden was wrong to call the Chinese leader a dictator. He added that "the president always speaks candidly, he speaks directly. He speaks clearly, and he speaks for all of us," during a Sunday interview on CBS' “Face the Nation” program.
CHARGES FOR CHINESE FENTANYL: The U.S. Justice Department filed criminal charges against four Chinese manufacturing companies and eight of their employees over allegations they illegally trafficked chemicals to make fentanyl, federal officials said Friday. The indictments mark the first time Chinese companies have been prosecuted over the sale of precursor chemicals. Mexican cartels have used the chemical in vast quantities to produce the highly-addictive painkiller, which is later sold to the United States. The companies — Anhui Rencheng Technology, Anhui Moker New Material Technology, Hubei Amarvel Biotech, and Hefei GSK Trade — were charged in three separate cases filed by a federal court in New York. Just one of the companies shipped more than 200 kilograms for the purpose of making 50 kilograms of fentanyl, "a quantity that could contain enough deadly doses of fentanyl to kill 25 million Americans," Attorney General Merrick Garland said at a news conference.
COVID-19 ORIGIN DIVIDES INTEL COMMUNITY: The office of the Director of National Intelligence said in a report released Friday that all agencies of the government "continue to assess that both a natural and laboratory-associated origin remain plausible hypotheses to explain the first human infection." The 10-page report comes at the behest of Congress, and examines potential links between the Wuhan Institute of Virology and the start of the COVID-19 pandemic, per our Carmen Paun. The file also confirms disagreement between the National Intelligence Council and other intelligence agencies favoring the natural origin theory, while the FBI and Energy Department favor the lab leak hypothesis.
TRANSLATING CHINA
LOVE THY COUNTRY: China’s rubberstamp parliament is to introduce a new law regulating patriotism across the country, after a draft act was submitted to the National People’s Congress on Monday, according to state media Xinhua. “Patriotic education covers areas such as ideology and politics, history and culture, national symbols, the beauty of the motherland, national unity and ethnic solidarity, national security and defense, and the deeds of heroes and role models,” the report says.
For the young and for all: While young people are a key focus, the law will say that “all citizens should undertake patriotic education.”
AND LOVE THY FOOD: Another top agenda for the Chinese legislature this week is food security. A draft Food Security Law is also being submitted to the lawmakers, with the Chinese government acknowledging “multifaceted challenges, including limited and low-quality arable land and increasing difficulty in ensuring stable and high grain output.”
According to the draft, conversion of cultivated land to other agricultural uses, such as forests and grassland, is to be prohibited, while a national agriculture germplasm bank and a seed reserve system will be set up. More details on that here.
Growing problem: Extreme floods and heat in China are ravaging farms and killing animals, the New York Times reported.
OTHER HEADLINES THIS WEEK
AP: New Zealand leader's plane so prone to breakdowns he takes a backup on China trip.
Nikkei Asia: Frustration grows in China as banks limit early mortgage payments.
Reuters: Dragon Boat Festival tourism trips above pre-COVID levels.
Taipei Times: Taipei mayor to lead delegation on visit to Singapore.
Times of Israel: PM Netanyahu is set to visit China next month.
MANY THANKS: To editor Paul Dallison, reporters Suzanne Lynch, Barbara Moens, Kelly Garrity and Carmen Paun, and producer Jeanette Minns.
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