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By PHELIM KINE
with STUART LAU
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Hi, China Watchers. Today we gauge the prospects for Treasury Secretary Janet Yellen's Beijing trip, unpack the uproar over the State Department's downgrading of its travel advisory for Hong Kong and parse the appeal of China's latest export to Russia: Xi Jinping Thought. And to mark what appears to be that Biden-predicted "thaw" in high-level bilateral contacts, we profile a book that urges a return to serious U.S.-China engagement to reverse a "trajectory toward open conflict."
Let's get to it. — Phelim
Yellen braves spat over tech export limits in Beijing
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Alex Wong/Getty Images |
The Chinese government is likely hoping that hosting Treasury Secretary Janet Yellen in Beijing this week will encourage the U.S. to pause its high technology export restrictions.
In October, the U.S. throttled Beijing's access to semiconductors used in advanced computing and military applications. Others are following suit. On Friday the Netherlands required a major semiconductor equipment maker to obtain export licenses to send advanced microchip printing machines to China. And the Wall Street Journal reported on Tuesday that the Biden administration is considering limiting access of Chinese firms to U.S. corporate cloud-computing services.
Beijing has punched back by imposing export restrictions on gallium and germanium, materials essential for semiconductor production. "This is just the beginning of China’s countermeasures," former Vice-Minister of Commerce, Wei Jianguo, told the China Daily newspaper on Wednesday.
Yellen got a foretaste of her Beijing reception while meeting on Monday with China's ambassador to the U.S., Xie Feng. Xie "raised #China’s main concerns in economic & trade areas, and required the U.S. side to take them seriously and take actions to resolve them," Liu Pengyu, the embassy's spokesperson, tweeted on Tuesday.
Beijing wants Yellen's support in limiting what national security adviser Jake Sullivan in April called the administration's "small yard and high fence" approach to blocking high technology experts that could benefit China's military.
Beijing wants "the yard to stay small and the walls to stay as low as possible," said Brad Setser, former deputy assistant secretary for international economic analysis at the Treasury Department during the Obama administration. The Chinese leadership at minimum wants "a world where there aren't further [tech export] restrictions and their best-case scenario is a reduction in some of the frictions," said Setser, who's currently a fellow at the Council on Foreign Relations.
Yellen's China trip comes just two weeks after Secretary of State Antony Blinken's Beijing visit, suggesting that President Joe Biden's prediction in May of a looming "thaw" in high level bilateral contacts is now fully underway.
Yellen's advantage: She's on the Chinese leadership's short-list of senior U.S. officials — think Secretary of Commerce Gina Raimondo and U.S. Trade Representative Katherine Tai — relevant to Beijing's efforts to jumpstart a sputtering economy. And she has distanced herself from China hawks on Capitol Hill by warning last month that decoupling the U.S. economy from China's would be "disastrous." That may get her the red carpet welcome that Chinese officials denied Blinken last month.
But Yellen may disappoint her hosts. "While Beijing is likely to press Yellen to unwind tariffs and lift export controls as a demonstration of good faith, she will not be in a position to do so," said Wendy Cutler, former USTR senior trade negotiator in the George W. Bush administration.
Some GOP lawmakers are already calling Yellen's Beijing visit counterproductive. The Biden administration is pursuing "zombie engagement" with Beijing while failing to hold China accountable for human right abuses in Xinjiang, said Mike Gallagher (R-Wis.), chair of the House Select Committee on China. "After Secretary Blinken left Beijing with little to show for his trip, doubling down by sending additional cabinet-level officials like Secretary Yellen only perpetuates this vicious cycle — we self-censor while the CCP takes full advantage," Gallagher said.
State's Hong Kong advisory change draws fire
The State Department has raised eyebrows by downgrading its travel advisory for Hong Kong last week to Level 2: "Exercise Increased Caution due to the arbitrary enforcement of local laws."
That's despite the rollback of rule of law in the city since the 2020 introduction of its National Security Law, which has effectively criminalized political protest. The State Department had imposed a Level 3 "Reconsider Travel" advisory in September 2020 that applied to mainland China, Macau and Hong Kong. Secretary of State Blinken decried "the ongoing crackdown on civil society, media, and dissenting voices in Hong Kong," as recently as March.
Pro-democracy activists are drawing a direct line between the downgrade in the travel advisory on Friday and the Hong Kong government's move on Monday to issue arrest warrants — complete with $128,000 arrest bounties — for eight exiled Hong Kong pro-democracy activists for "collusion with a foreign country."
"It's uncanny timing," said Anna Kwok, U.S.-based executive director of the Hong Kong Democracy Council and one of the eight exiles sought by Hong Kong authorities. "The Hong Kong government got a signal that the U.S. government is getting off their backs," Kwok said.
The State Department denies any political motive behind the change, saying it reflects a move to assess travel conditions in Hong Kong, Macau and mainland China separately rather than as a single entity. "We are now providing assessments for each one individually to better inform travelers of the unique conditions in each geographical area," a State Department official, granted anonymity because they were not authorized to speak on the record, told POLITICO.
But the risk downgrade could mislead U.S. citizens about the potential dangers they may encounter in Hong Kong, activists say. Beijing warned last month that U.S. citizens with dual Chinese citizenship detained in Hong Kong would not be allowed to receive visits from U.S. consular services in violation of a U.S.-China treaty that guarantees such access. That makes the advisory change "divorced from reality" and may put "American lives and freedom in jeopardy," said Samuel Chu, president of the pro-democracy non-profit The Campaign For Hong Kong.
That State Department says it's closely tracking the situation in Hong Kong and won't pull any punches on perceived violations of rights and freedoms in the territory. "We have called out, and will continue to call out, the PRC's use of its National Security Law to deny people in Hong Kong protected rights and freedoms, undermine Hong Kong's autonomy, and chip away at Hong Kong's remaining democratic processes and institutions," the State Department official said.
TRANSLATING WASHINGTON
— STATE SLAMS HK ACTIVISTS' ARREST WARRANTS: The State Department has decried the Hong Kong government's issuance of arrest warrants for eight exiled pro-democracy activists on Monday as a "transnational repression" initiative. The warrants — backed by $128,000 arrest bounties — are "a dangerous precedent that threatens the human rights and fundamental freedoms of people all over the world," State Department spokesperson Matthew Miller said on Monday. The warrants are essential for "ending chaos and ensuring lasting stability in Hong Kong," Chinese Foreign Ministry spokesperson Mao Ning responded on Tuesday. The eight activists will be "pursued for life," Hong Kong Chief Executive John Lee Ka-chiu warned on Tuesday.
TRANSLATING EUROPE
LITHUANIA DOUBLES DOWN ON TAIWAN TIES: In a new government strategy on the Indo-Pacific published on Wednesday, Lithuania reiterated its decision to build strong economic ties with Taiwan, in defiance of Chinese coercion that hit the Baltic country two years ago. "The development of economic relations with Taiwan is one of Lithuania's strategic priorities," it said, slamming China as a country prepared to utilize "economic, political, diplomatic, and other types of coercion" to achieve its goals. Foreign Minister Gabrielius Landsbergis called the strategy a "new and significant step in strengthening comprehensive cooperation between Lithuania and the region."
MINERAL EXPORT CONTROL 'JUST LIKE WHAT EU'S DOING': China's move to impose export controls on two critical minerals for semiconductor manufacturing continues to rattle the EU, with trade diplomats from the bloc's 27 countries set to discuss the impact in a regular meeting today. Justifying the measure, Chinese Foreign Ministry spokesperson Wang Wenbin took a dig at the EU, saying the EU has also implemented such export controls, and calling gallium and germanium "potentially of a dual-use nature." The new measures were announced just days after the Netherlands made the final decision to block the export of semiconductor manufacturing machines to China.
EU CLIMATE CHIEF: BEIJING TALKS 'POSITIVE': European Commissioner for climate Frans Timmermans wrapped up what he called a "positive" visit to China with a high-level meeting with Ding Xuexiang, the Politburo Standing Committee member in charge of climate talks and a former chief of staff of Xi's. "The strong feeling I have is that China subscribes to our analysis that, whatever differences we may have, … tackling the climate crisis transcends these political differences," Timmermans told reporters on Wednesday, "I hope that the way we discussed this in the last couple of days, the agreements we reached to work together in preparation of COP28, could also be mirrored … when my good friend John Kerry visits China, I hope, shortly."
LESS LUCK FOR TOP EU DIPLOMAT: China canceled the plan by EU foreign policy chief Josep Borrell to visit Beijing next week, without offering any explanation. In Brussels' corridors, speculation is that Chinese Foreign Minister Qin Gang may have health issues since he's been out of public view for 10 days. An EU spokesperson said Borrell would try to look for an alternative date to carry out the visit, which was already postponed in April when the Spanish politician was infected with Covid-19. When Borrell eventually gets to Beijing the issue of arrest warrants for exiled Hong Kong activists will likely be on his agenda. That move "is only adding to our existing concerns," Borrell tweeted on Wednesday.
HOT FROM THE CHINA WATCHERSPHERE
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— REPORT: HK'S 'HEAVYWEIGHT' WASHINGTON LOBBYISTS: Hong Kong government-linked groups have spent more than $35 million since 2019 on lobbying in Washington, including on initiatives to derail legislation aimed at protecting human rights in the territory, the nonprofit Hong Kong Democracy Council said in a report published on Wednesday. Lobbyists including Akin Gump Strauss Hauer & Feld LLP, Venable LLP and BGR Government Affairs have served the Hong Kong government's interests by "monitoring developments in U.S. policy toward Hong Kong and lobbying American lawmakers to adopt pro-[Hong Kong] government policies," said the report by the pro-democracy group. None of the three firms responded to a request for comment.
— BEIJING BRISTLES AT TAIWAN ARMS SALE: China's Defense Ministry has lashed out at the U.S. for its approval last week of the sale a $108 million Cooperative Logistics Supply Support Arrangement and $332 million worth of 30 mm ammunition and related equipment for Taiwan. The approval "is tantamount to turning Taiwan into a 'powder keg' and pushing the people of Taiwan into an abyss of disaster," Defense Ministry spokesperson Senior Colonel Tan Kefei said in a statement on Wednesday.
— TAIWAN PRESIDENTIAL HOPEFUL PLUGS PEACE PLAN: Taiwan's Vice President Lai Ching-te, who is vying to replace outgoing President Tsai Ing-wen in the self-governing island's January 2024 elections, has unveiled a four-part plan to maintain peace across the Taiwan Strait. It includes boosting Taiwan's military deterrence, diversifying supply chains away from China, bolstering the island's ties to other democratic countries and committing to "dialogue without preconditions" with Beijing, Lai said in a Wall Street Journal op-ed on Tuesday. The latest polling puts Lai, the Democratic Progressive Party candidate, as one of the election front-runners followed closely by the Taiwan People's Party Ko Wen-je (you can read China Watcher's interview with Ko here).
— WANG YI TOUTS RACIALIZED 'STRATEGIC AUTONOMY': China's top diplomat Wang Yi urged Japan and South Korea to develop an "Asian values"-based "strategic autonomy" from the U.S. "No matter how blonde you dye your hair, how sharp you shape your nose, you can never become a European or American, you can never become a Westerner. We must know where our roots lie," Wang said in a discussion on Monday at the 2023 International Forum for Trilateral Cooperation in the Chinese eastern coastal city of Qingdao. "This is one of the most astounding racist baiting statements I have seen from a Chinese 'diplomat' in a long time," Dennis Wilder, former CIA deputy assistant director for East Asia and the Pacific, tweeted in response on Tuesday.
TRANSLATING CHINA
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Alexey Nokolsky/Sputnik/AFP via Getty Images |
— RUSSIA EMBRACES XI JINPING THOUGHT: Russian academia has delivered Xi Jinping the ultimate compliment: a state-funded research center dedicated to his signature political doctrine. First flagged by POLITICO's Elena Giordano, the Russian Academy of Sciences at its Institute of China and Contemporary Asia in Moscow has launched the Modern Ideology of China Research Laboratory which will focus exclusively on "Xi Jinping thought on socialism with Chinese characteristics for a new era," per the South China Morning Post. XJP Thought "encapsulates the practical experience and collective wisdom of the Communist Party of China and the people," according to Chinese state news agency Xinhua.
The laboratory has echoes of the Russian Academy of Sciences' Institute for U.S. and Canadian Studies, which was founded at the height of the Cold War in 1967. "It could be that some parts of the Russian establishment realize that they're going to be dependent on and perhaps subordinate to China in some ways and they're interested in institutionalizing some knowledge about China," said Daniel Fried, former assistant secretary of State for European and Eurasian affairs and now a distinguished fellow at the Atlantic Council. But if the facility focuses mainly on XJP thought, "it may be more toadying and less serious than the U.S. Institute was at its best," Fried argued.
At the very least the laboratory renders Beijing a useful propaganda victory. "In Communist political culture being seen as someone who understands ideology and then can interpret ideology is a powerful legitimation narrative," said George Washington University's Sino-Russian elite politics expert Joseph Torigian. Beijing can now say "Look — even the Russian Federation, from whom we learned Communism, have created a center so they can learn from us and from Xi Jinping," Torigian said.
THREE MINUTES WITH …
Joseph Torigian is a professor of political science at American University and an expert on Chinese-Russian elite politics. Torigian spoke to China Watcher about the Chinese government's muted response to Russian warlord Yevgeny Prigozhin's 36-hour insurrection against the regime of Russian President Vladimir Putin last month and its potential impact on the Xi-Putin "no limits" partnership.
Responses have been edited for length and clarity.
Why has the Chinese government been so tight-lipped about the Prigozhin crisis?
A full-throated statement could have actually counter intuitively signaled more concern that they needed to. Beijing will be worried about a narrative appearing that they bet on the wrong guy, that Xi Jinping made this mistake by getting so close to a regime that's [potentially] collapsing.
What longer-term impact will the Prigozhin crisis have on Chinese-Russian ties?
Beijing is not going to back someone else [in Russia] because they know that would be hugely destabilizing and probably wouldn't work. I don't think it will lead to any fundamental changes in China's Russia policy. They bet on Putin, and they won't give up on Putin and they probably see Putin as still the best chance of stability and holding things together even though he has created these problems for himself.
What happens next?
The Russians will probably expect there to be a conversation between Putin and Xi and some of the language will indicate that the Chinese are still confident about Putin and his regime. Maybe they're not rushing to do it to avoid making it seem like there's a sense of crisis. It will be expected and valued for there to be a sense in the Russian elite that the Chinese see Putin as their guy.
HEADLINES
South China Morning Post: Why reports of Chinese spy base in Cuba are met with shrugs in Latin America, where US influence is waning
Foreign Policy: Xi's schadenfreude over Moscow's mutiny
Wall Street Journal: How China's overseas security forces differ from Wagner
HEADS UP
— IPEF NEGOTIATIONS TO RESUME IN SEOUL: The Biden administration is moving forward its Indo-Pacific Economic Framework — a grouping of 14 countries seeking to reduce overreliance on China — with a fourth round of negotiations in Busan, South Korea, July 9-15. The U.S. delegation will be co-led by Sharon H. Yuan, U.S. Department of Commerce Counselor, and Sarah Ellerman, acting Assistant United States Trade Representative for Southeast Asia and the Pacific. IPEF is Biden's response to competing trade pacts in the region — none of which his administration is keen to join — and seeks to bind together Indo-Pacific economies through non-trade initiatives in areas including green energy, anti-corruption and supply-chain resiliency.
ONE BOOK, THREE QUESTIONS
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Piper Wallis |
The Book: Engaging China: Rebuilding Sino-U.S. relations
The Author: Mel Gurtov is professor emeritus of political science at Portland State University and senior editor of Asian Perspective, an international quarterly journal published in Seoul.
Responses have been edited for length and clarity.
What is the most important takeaway from your book?
Despite profound policy and values differences, the U.S. and China must — and can — find common ground on the great security issues of our time: climate change, pandemics, nuclear weapons and the war in Ukraine. To do so requires serious engagement, not just contact — a strategy for reaching mutual understanding without forfeiting principles. The U.S. needs to substitute creative diplomacy for militarization of its China policy. China needs to rein in its wolf warrior diplomats and stop interfering in others' politics. Dialogue must be regularized and institutionalized.
What was the most surprising thing you learned while researching and writing this book?
Leading Chinese experts in national security believe the U.S. is the driver of relations with China, and that the U.S. considers China less important to the U.S. than the U.S. is to China. These experts and the PRC leadership operate more from defensiveness than is commonly believed. The leadership is concerned more about internal security than — like the U.S. — about national or global security.
What does your book tell us about the trajectory and future of U.S.-China relations?
The U.S.-China trajectory is toward open conflict, either over Taiwan or in the South China Sea. Whereas China is the more aggressive party on the latter, the U.S. is the more aggressive party in the former — upgrading Taiwan's status and military in ways that cross China's "red line" on Taiwan independence. Beijing's warnings, such as after Nancy Pelosi's Taiwan visit, are not being heeded, and the longstanding PRC policy of "peaceful reunification" could change abruptly.
Got a book to recommend? Tell me about it at pkine@politico.com.
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