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By STUART LAU
with PHELIM KINE
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WELCOME. This is Stuart Lau in Luxembourg, with your dangerous dose of EU-China news this Tuesday. Phelim Kine will report from Washington on Thursday.
BREAKING ESPIONAGE NEWS: Authorities in London and Berlin made new moves yesterday, arresting Europeans accused of spying for the People’s Republic.
In the U.K., Christopher Cash, 29 — who was employed as a researcher by Conservative foreign affairs committee chair Alicia Kearns —was charged with spying for China alongside Christopher Berry, 32. They’re due to appear at Westminster Magistrates' Court on Friday. Noah Keate has the updates.
Meanwhile in Germany, authorities have arrested three German nationals who are "strongly suspected of having worked for a Chinese secret service," prosecutors said Monday. One of them was accused of being an agent for the Ministry of State Security, China’s spy agency. Claudia Chiappa has the story.
It emerged on Tuesday morning that German police arrested an employee of Maximilian Krah, the far-right Alternative für Deutschland party's lead European Parliament lawmaker, on suspicion of espionage for China, passing information about opposition legislators to the Chinese ministry, Reuters reports, citing local media.
XI’S GRAND TOUR
UNLIKELY TRIO: China’s supreme leader will visit an unusual threesome of France, Serbia and Hungary in May.
First trip in five years: Last time Chinese President Xi Jinping visited Europe, in 2019, the world was a very different place. The coronavirus pandemic was still months away, while the European Union could hardly imagine an all-out war waged by Beijing’s best friend, Moscow, right on its doorstep.
Best timing for NATO-bashing? Three European diplomats told China Watcher there’s a fear Paris could be tainted by a trip where Xi could take an anti-NATO tone, especially on his leg in Belgrade on May 7.
That marks the 25th anniversary of the U.S. bombing of the Chinese embassy that killed three state-media journalists. Washington called it an accident, while NATO was conducting air strikes during the Kosovo War in 1999.
Commemoration: During Xi’s 2016 state visit to Serbia, his first stop was to go to the embassy site to pay tribute to the victims. China’s Xinhua state news agency described “barbaric missile attacks at China’s embassy in Yugoslavia during the brazen bombings by the U.S.-led NATO against Yugoslavia.”
Expect a similar tone if Xi indeed has the same program next month.
For now, China strikes a careful balance. On Ukraine’s bid to join NATO, Beijing has refrained from mentioning NATO by name, saying only that bloc “mentality” is not relevant in today’s world, and that “the security concerns of all sides” — meaning Russia’s — should be taken into account.
But the distrust for the defense alliance is all too obvious. Beijing blames the NATO operation in Yugoslavia, while denouncing its partnerships in recent years with four Asia Pacific partners, including Japan, as “stretching its arm” to reach China and stoke conflicts.
HUNGARY DEAL: After his Belgrade visit, Xi is expected to move to Budapest. He’ll meet Prime Minister Viktor Orbán — who like Serbian President Aleksandar Vučić is considered one of Europe’s most pro-Russian leaders at present. Coincidence, eh?
There was fear last year that China’s economic downturn — coupled with Hungary’s “extreme inflation” — could derail China’s 20-year financing for a $1.9 billion Budapest-Belgrade rail link project.
Time to talk: Hungary’s Economy Minister Márton Nagy on Friday received a delegation from the Chinese National Development and Reform Commission, led by vice-chair Zhao Chenxin. “Discussions were held about the Budapest-Belgrade railway development project, business cooperation, and further infrastructure developments,” according to the Hungarian government.
Now, time for a really local angle: Xi’s visit in May could “paralyze traffic in Budapest” and there look likely to be more closures than when Pope Francis visited the Hungarian capital a year ago, according to local investigative portal VSquare. The Counter-Terrorism Center is in charge of the preparation, with 400 people expected to travel with Xi’s delegation.
BACK TO THE BEGINNING: Xi will begin his European tour in Paris. While it is well known that the visit will center on celebrating the 60th anniversary of Franco-Chinese diplomatic ties, French officials remain tightlipped about the details.
Fly me to Airbus? An official said there were plans for him to visit Toulouse, where Airbus is headquartered. It remains, however, unclear how French President Emmanuel Macron will seek to repeat his pan-EU focus in 2019, when he invited his German and European Commission counterparts to join a meeting with Xi.
DEFENSE CORNER
DEFENSE BOSS WARNS OF CHINA TIES: One of Europe’s leading defense bosses complains that the Continent is too reliant on China — but he’s not referring to the sales market, of course, as there are strict export embargoes in the wake of the 1989 Tiananmen Square crackdown.
According to Saab CEO Micael Johansson, Western defense firms remain heavily dependent on China for the supply of ingredients for gunpowder, the propellant used to fire out shells, our defense correspondent Laura Kayali reports.
Dire projection: "The risk of China sort of disconnecting the deliveries of nitrocellulose to do powder in Europe … would be detrimental,” said Johansson, whose company is one of Europe's main weapons manufacturers and, alongside France's Dassault Aviation, is the only European manufacturer capable of making a fighter jet — JAS 39 Gripen — on its own.
While lead times and prices for some components have improved, Johansson said that the European defense industry still faced "bottlenecks", especially on "powder and nitrocellulose to create powder."
Dilemma: As EU’s defense firms seek to ramp up shell manufacturing for the armed forces of both Ukraine and EU member countries, Beijing turns out to be a key actor in Europe's supply chain — and politicians and industry execs alike fear China could limit the export of these materials, if the West’s relations with the increasingly assertive superpower worsens.
Will China help EU make arms to fight Russia? As Ukraine is increasingly out-gunned by Russia, the failure of the West to send enough ammunition to Kyiv is already shaping the war's outcome. By the beginning of 2026, the European Commission reckons the EU will be producing 2 million shells a year. The shortage of propellant and explosive powder is one of the main bottlenecks to speed up production.
DERISKING
EU’S GOT ANOTHER PROBE FOR CHINA: The EU has shown no sign of slowing down its trade investigations into Chinese government practices, after subsidy-related probes into electric vehicles, solar panels, train-makers and wind turbines.
Next in line — Medical devices: The European Commission is expected shortly — as early as this week — to announce a new probe into China’s policy favoring local rather than European medical equipment providers in the public procurement bids. Camille Gijs and Koen Verhelst write in to report.
New tool for you, Beijing: It’s set to be the first time the Commission uses the tool known as “international procurement instrument”. Like the (also new) foreign subsidies regulation — used first against Chinese train giant CRRC just two months ago — China was the target of the EU’s first shot.
If it indeed goes through, the probe will assess whether China keeps its procurement for medical equipment excessively protected from European competition.
Spoiler alert: it does. “We have indeed been monitoring the situation closely and are aware of the rumors surrounding the potential launch of the IPI probe by the Commission,” said Miriam D'Ambrosio, spokesperson for MedTech Europe, a trade organization.
She added that Beijing only works with national level procurement tenders and encourages "Buy Chinese" schemes.
TRANSLATING WASHINGTON
RAHM MOCKS BEIJING'S HALF-MARATHON MESS: U.S. Ambassador to Japan Rahm Emanuel has linked a corruption scandal tainting last week's Beijing half-marathon with a "Chinese pattern of plunder." Race officials last week stripped Chinese runner He Jie of his winner's title over evidence that fellow racers had intentionally let him win. "Stealing trade secrets and tech knowledge from U.S. and Dutch firms to advance their economy…let's just say that corruption is not contained to the PRC Rocket Force only," Emanuel said on X on Sunday.
HOUSE PASSES TIKTOK, TAIWAN AID LEGISLATION: The House passed legislation on Saturday that will accelerate a bill for Senate consideration this week aimed at forcing TikTok's parent firm ByteDance to sell the app or face its removal from U.S. app stories. POLITICO's Rebecca Kern has the full story here. The House also passed an emergency supplemental appropriations bill for Indo-Pacific defense support that includes $1.9 billion for Taiwan. That allocation plus $2.2 billion "to support improvements to the submarine industrial base" constitute more than half of the total $8 billion that the bill allocates for Indo-Pacific defense purposes. Taiwan is "grateful to the U.S. Congress" for the bill's passage, the island's defense ministry said in a statement Sunday.
RUSSIA, FENTANYL TOP BLINKEN'S CHINA AGENDA: U.S. Secretary of State Antony Blinken will head to Beijing this week, with a warning for China to curb its technical support for Russia’s military — or else. Blinken’s three-day trip starting Wednesday comes after the approval of a $61 billion aid package for Ukraine by the U.S. House, and in the midst of fears in Western capitals that Chinese aid to Moscow for manufacturing of military hardware is ramping up. POLITICO's Joshua Posaner has the full story here.
Blinken will also push Beijing's senior leadership to do more to address China's role in the U.S. opioid overdose epidemic. The emphasis on counter narcotics follows a blistering report published last week by the House Select Committee on China that accused Beijing of actively encouraging Chinese chemical companies to produce and export dangerous narcotics including fentanyl (dished in China Watcher here). And it suggests administration dissatisfaction with the results of the bilateral Counter Narcotics Working Group launched in January.
PROTESTERS DISRUPT CHINESE AMBASSADOR'S HARVARD SPEECH: Protesters repeatedly disrupted Chinese Ambassador to the U.S. Xie Feng's speech at the Harvard Kennedy School's China Conference on Saturday. The protesters waved banners and loudly decried Beijing's policies toward Xinjiang Uyghurs, Tibet, Taiwan and Hong Kong before security guards removed them. Xie didn't respond or engage with the protesters. "The farce put up by anti-China forces to discredit China and undermine China-U.S. relations is doomed to failure," Chinese embassy spokesperson Liu Pengyu said in response to the protests.
EMBASSY SLAMS U.S. SUPPORT FOR PHILIPPINES: The Chinese embassy in Washington attacked U.S. support for Manila's pushback of Chinese Coast Guard incursions into Philippine waters of the South China Sea on Friday. In an email screed protesting Philippine support missions to its military outpost on the Second Thomas Shoal circulated Friday, the embassy accused the U.S. of using Manila as "a chess piece for the U.S. to contain China." The embassy said U.S. officials were openly supporting Manila in "breaching mutual understanding with China and violating China's sovereignty." A glaring omission in the embassy email: the International Tribunal of the Law of the Sea ruled against China's claims in the region in 2016.
PANDA-TO-PEOPLE RELATIONS RESUME: San Francisco Mayor London Breed is coming home from her trip to China with a big win: an agreement with Chinese authorities for a loan of Giant Pandas to the San Francisco Zoo in 2025. The bears will "honor our deep cultural connections and our Chinese and API heritage…[and] bring residents and visitors from all over who come to visit them at the SF Zoom," Breed said in an X post Friday. The panda loan will "contribute to the friendship between the two peoples," said the Chinese Foreign Ministry's Lin.
HEADLINES
Bloomberg: China's bubble tea boom creates a half-dozen billionaires.
Reuters: Maldives pro-China ruling party tipped to win election.
New York Times: China's cities are sinking below sea level, study finds.
Observer: Chinese students in U.S. tell of 'chilling' interrogations and deportations.
Wall Street Journal: One French solar panel company's lonely struggle to survive Chinese competition.
MANY THANKS: To editor Christian Oliver, reporters Laura Kayali, Camille Gijs, Koen Verhelst, Joshua Posaner, Rebecca Kern and producer Seb Starcevic.
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