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By STUART LAU
with PHELIM KINE
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WELCOME TO CHINA WATCHER. Since this newsletter’s creation, EU and Chinese leaders have never sat down for a summit — and that’s about to change this week. This is Stuart Lau guiding you through this high-stakes (for Brussels) and highly-choreographed (for Beijing) event in the Chinese capital. Phelim Kine will be reporting from Washington on Thursday.
EU DUO MEET XI
SUMMIT IN PERSON, AT LAST: We’ve just passed the four-year mark since Ursula von der Leyen and Charles Michel became presidents of the European Commission and European Council, and the pair are flying to Beijing this week for their first face-to-face summit with their Chinese counterpart, Xi Jinping.
Much to worry about, little to expect: While the two EU leaders have a lot to talk to Xi about — from the war in Gaza to potential conflict in Taiwan, from climate change to trade imbalances — there’s little expectation in Brussels that Beijing is going to change tack, especially on the broader geopolitical challenges and China’s increasingly security-minded political apparatus.
Reality check 1 — No deliverables: “I think we need to be slightly realistic that there’s not a kind of single outstanding deliverable which will be crowning the summit,” a senior EU official said. That’s a contrast from Xi’s much-watched meeting with U.S. President Joe Biden last month, in which the world’s two biggest superpowers de-escalated tensions with a pledge to restore some military-to-military communications, while Beijing also agreed to act tougher on fentanyl exports to America. (EU officials, while agreeing with that comparison, stressed that the EU’s relations with China are never as bad as those between Washington and Beijing.)
Reality check 2 — See who sees Xi first? Xi didn’t begin his week without a not-so-subtle message to Europe — by receiving his “great friend“, the Belarusian President Alexander Lukashenko, who’s also Moscow’s closest ally in its war against Ukraine. “China is willing to continue to strengthen strategic cooperation with Belarus, promote practical cooperation and deepen bilateral relations,” Xi told his Western-sanctioned guest, according to Chinese state news agency Xinhua.
Reality check 3 — Economic downturn: China’s economic woes are also adding to the EU’s fear of Chinese overcapacity. In short: If Chinese customers are less well-off and buying less, those goods will be exported even more. Think electric vehicles, or steel (when China’s cash-strapped real estate developers aren’t building.)
THE LOW EXPECTATIONS for the summit are partly a result of the fact that the EU and China already restored a number of so-called high-level dialogues over the past few months, ranging from strategic and digital policies to trade and climate. The kind of issues that Brussels’ Eurocrats consider top-priority — like cross-border data flows, baby milk formula export backlogs, or carbon border tax — have already been addressed during those conversations.
Beijing’s not even pretending: This time, EU officials were slightly taken aback when Beijing never came to them with a draft joint statement, a move typically expected of the host country. Even though EU officials would possibly have declined that draft, Beijing’s move still speaks volume to how little hope it has in trying to seek common language with Brussels.
In the words of Gunnar Wiegand, who recently stepped down as the EU foreign service’s top Asia official and works for the German Marshall Fund think tank: “The times when we were in intensive negotiations, finalizing the joint statements over days and sometimes nights, seem to be over indeed."
Instead, the EU is expected to issue its own statement.
“There was no request from the host to have a common statement, nor have we been asked by member states,” a senior EU official said.
Talking of member states: The European Council’s Michel will have to cut short his trip — with a planned stop in Shanghai now scrapped — due to the rush to fly back to Europe to handle Hungary’s block of Ukraine’s EU membership bid at the next Council summit.
Could climate save the summit? EU officials pointed out that the summit will take place while the COP28 climate change talks are still ongoing in the United Arab Emirates. As Zia Weise and Sara Schonhardt report, China — which plays the “developing country” card — is under increasing pressure to send money to help smaller countries compensate for the destruction wrought by extreme weather and other consequences of global warming. EU leaders are expected to push Xi on this.
SUMMIT CHEAT SHEET
WHEN THE SUMMIT TAKES PLACE ON THURSDAY, here’s what we can look forward to:
— In terms of logistics: The EU pair, together with EU foreign policy chief Josep Borrell, will first sit down with Xi in the morning, followed by an afternoon session with Premier Li Qiang.
— EU to quiz Xi on his bromance with Putin: Expect the EU pair to tell Xi to do more to cut support for Moscow. While there’s been a decline in “high-priority battlefield items” from China to Russia, an EU official noted there’s still a sizeable volume of trade in potentially dual-use goods. There could be a discussion on including Chinese companies in the EU’s upcoming 12th package of sanctions, if Beijing turns a blind eye to the EU’s concerns.
— A brief lecture on de-risking: Michel and von der Leyen are expected to tell Xi that de-risking is not targeted against China, and that all Europe’s trade defense measures would be compatible with World Trade Organization rules, the EU officials say. (Chinese Premier Li already lambasted the D-word as “unharmonious voices.”)
— Concerns over Taiwan: With the Taiwanese presidential election slated for mid-January, fears are mounting about possible Chinese escalation in the event a candidate it considers secessionist wins. EU leaders are expected to raise issues about Taiwan, the Indo-Pacific, and the South China Sea, EU officials say.
—And in case Xi asks about the electric car probe: “I suspect this is likely to be coming up with the voices in China saying they consider this as protectionist. We will also be explaining how we consider that our investigation is in full compliance with the WTO rules,” the EU official said.
— Walk your talk on Gaza: The EU pair will also likely press Xi to deliver for the Palestinians, amid a largely anti-U.S. diplomatic effort to discredit Israel and support Gaza. “I think this is a really good opportunity to encourage our Chinese partners to really step up supply of humanitarian assistance. We haven’t seen significant volumes of aid being offered by China to Palestine, or flowed from China,” the EU official said.
— Keep the human rights dialogue, please: EU has viewed it as a positive move for Beijing to resume the (low-level) human rights dialogue, after Michel’s meeting with Xi a year ago. That format, though, has been heavily criticized by rights advocates. “The EU's human rights dialogue with the Chinese government has become a meaningless tick-the-box exercise,” Tirana Hassan, executive director at Human Rights Watch, said Monday. “When it comes to human rights, the level of EU action and ambition does not match the urgency or magnitude of the threats posed by the Chinese government.”
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UKRAINE STRIKES BACK
SECRET MISSION — WITH A MESSAGE TO BEIJING: Ukraine's security service blew up railway connections linking Russia to China, in a clandestine strike carried out deep into enemy territory, with pro-Kremlin media reporting that investigators have opened a criminal case into a "terrorist attack."
Act 1: The SBU set off several explosions inside the Severomuysky tunnel of the Baikal-Amur highway in Buryatia, located some 6,000 kilometers east of Ukraine, a senior Ukrainian official with direct knowledge of the operation told POLITICO’s Veronika Melkozerova.
Four explosive devices went off while a cargo train was moving inside the tunnel. "Now the (Russian) Federal Security Service is working on the spot, the railway workers are unsuccessfully trying to minimize the consequences of the SBU special operation," the Ukrainian official said.
Act 2: Later, another train was blown up in the same area on a bypass route, pro-Kremlin Telegram channel Baza reported. This happened when the Russians began to use the detour route through the so-called Devil's Bridge — a 35-meter high viaduct structure, which is part of the Trans-Siberian Railway. At that point, SBU saboteurs struck again.
This hurts: "When the train was passing over this 35-meter high bridge, the explosive devices embedded in it went off," the same official added. According to preliminary data, aviation fuel on the second cargo train was spilled over an area of 150 square meters.
The main artery: "This is the only serious railway connection between the Russian Federation and China. And currently, this route, which Russia uses, including for military supplies, is paralyzed," the official said.
No public admission: Ukraine's security service has not publicly confirmed the attack. Russia has also so far not confirmed the sabotage.
Here’s Veronika’s full report.
TRANSLATING WASHINGTON
U.S. WARNS ON TAIWAN ELECTION DISINFORMATION: The U.S. diplomatic outpost in Taiwan is warning of the threat of "cyberattacks and online information manipulation" to the island's Jan. 13 presidential election. "We believe it is for Taiwan voters to decide their next leader, free from outside interference," Sandra Oudkirk, Taipei-based director of the American Institute in Taiwan, said in a speech on Monday. Oudkirk warned that unnamed "foreign actors seek to use social media and emerging technologies to manipulate public discourse, divide the public, sow discord, influence our elections, and essentially undermine confidence in our democratic institutions."
Taiwan's authorities are bracing for the possibility that Beijing will try "manipulating opinion polls and issuing them to interfere in the elections,” a senior Taiwan security official warned last month per Reuters. U.S. allegations of Chinese disinformation efforts are "an ugly attempt to perpetuate its supremacy by weaving lies," China's Foreign Ministry said in a statement in September.
RAIMONDO SAYS CHINA 'IS NOT OUR FRIEND': Commerce Secretary Gina Raimondo justified Biden administration curbs on Beijing's access to high technology semiconductors and other strategic hardware by declaring that China "is not our friend" and is instead "the biggest threat we've ever had," in a speech she made on Saturday at the Reagan National Defense Forum, per the South China Morning Post.
Beijing punched back. Raimondo's comments reflect "the deep-seated Cold-War mentality and hegemonic mindset of some in the U.S.," Chinese Foreign Ministry spokesperson Wang Wenbin said on Monday. Raimondo's comments followed those she made in a Friday interview in which she announced plans for a more "muscular" export control office and to seek more congressional funding to keep vital technologies out of the hands of adversaries including China. POLITICO'S Alexander Ward has the full story here.
PENTAGON: U.S. STRUGGLING IN ARMS RACE: America's defense industry is struggling to achieve the kind of speed and responsiveness needed to stay ahead in a high-tech arms race with competitors such as China, an unreleased draft of a new Pentagon report on the defense industry warns. The first ever National Defense Industrial Strategy, which is set to be released in the coming weeks by Pentagon acquisition chief William LaPlante, is meant to be a comprehensive look at what the Pentagon needs in order to tap into the expertise of small tech firms, while funding and supporting traditional companies to move faster to develop new tech. POLITICO'S Joe Gould and Paul McLeary reported the full story here on Saturday.
LAWMAKERS: FREEZE INBOUND TRAVEL FROM CHINA: A group of five GOP lawmakers including Sens. Marco Rubio (R-Fla.) and Rick Scott (R-Fla.) have urged the Biden administration to suspend inbound travel from China due to concerns over the country's ongoing outbreak of a pneumonia-like illness among children. "A ban on travel now could save our country from death, lockdowns, mandates, and further outbreaks later," the lawmakers said in a letter to President Joe Biden on Friday, warning of Beijing's "long history of lying about public health crises." China's current outbreak is not from "a new or novel pathogen," Mandy Cohen, director of the U.S. Centers for Disease Control and Prevention, told a congressional committee hearing last week.
TREASURY EXCLUDES CHINA FROM EV CHAINS: The Biden administration released long-awaited rules Friday to exclude China from the U.S. electric vehicle and battery supply chain, with a set of proposed tests to determine which EVs qualify for a big tax rebate and which don't. The announcement didn’t clarify whether the rule will increase or decrease the number of cars and batteries that qualify for a consumer EV tax credit. And it left some important questions unanswered, including whether companies such as Ford can use technology that they’ve licensed from Chinese companies. POLITICO's David Ferris, Mike Lee and Hannah Northey have the full story here.
MORE HEADLINES
BLOOMBERG: TikTok struggles to take down deepfake videos of Hamas' victims.
CNBC: Nvidia CEO says U.S. chipmakers at least a decade away from China supply chain independence.
KYODO: Hong Kong journalist goes missing following business trip to Beijing.
REUTERS: Ghana court jails Chinese national over illegal gold mining.
SOUTH CHINA MORNING POST: How Modi's India is tiptoeing towards Taiwan.
MANY THANKS: Editor Christian Oliver and producer Seb Starcevic.
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