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By STUART LAU
with PHELIM KINE
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HELLO, CHINA WATCHERS. This is Stuart Lau reporting from Brussels. Phelim Kine will be with you from the U.S. on Thursday.
BIG DAY IN BEIJING: Communist China celebrates its 75th birthday today, beating the Soviet Union that collapsed after 74 years.
Hurray, we’re going live today! At 2.50pm (Brussels time) I’ll be moderating a panel on EU-China relations for POLITICO’s Competitive Europe Week event, with German Ambassador to the EU Michael Clauß, EU External Action Service’s secretary-general Stefano Sannino and Abigaël Vasselier, head of foreign relations team at the MERICS think tank. You can watch it live here.
EU VS BELT AND ROAD
STATUS — COMPLICATED: It’s been three years since European Commission President Ursula von der Leyen launched the €300 billion Global Gateway, the EU’s answer to the Belt and Road Initiative, China’s state-run global infrastructure and investment scheme. So how’s it going so far?
Not well enough, according to a report by several think tanks issued today. China Watcher’s got a sneak peek.
Don’t keep secrets: It’s time for a full disclosure of all the flagship projects under Global Gateway in 2023 and 2024, argues Gunnar Wiegand, former EU top diplomat on Asia and now of the GMF think tank. “Existing information maps do not reveal much more than the beneficiary and the overall project volume,” he says, adding that “far too many projects” are merely subcontracted.
Play hard to get: The EU should make sure that the so-called “flagship project” label isn’t given away too casually, lest it damage the credibility of the scheme, Wiegand says: “Far more needs to be done to increase speed and impact of [Global Gateway] projects.”
Just love, no hate: The report also suggests Europe distance itself from the great power game between the U.S. and China, as African countries are unwilling to take sides. “The narrative of competition with China is often perceived as problematic in Africa,” writes Nele Fabian, of the Friedrich Naumann Foundation which leads the research.
Not the right custodian: Global Gateway is currently run by the European Commission’s international partnerships unit, which traditionally focused on aid and development policies. Such a design has been criticized for not addressing the geostrategic needs of these projects. According to Wiegand, Global Gateway should also be managed directly by a more senior figure inside the Commission, as well as the EU’s foreign policy arm.
Read the full report here.
EU NEW FACES, ROUND 2
NEW EU COMMISSIONERS: Now we bring you another two new faces from European Commission President Ursula von der Leyen’s new list of de facto ministers. Let’s first stick to the Global Gateway one.
The EU’s new Global Gateway boss is a banker from a very anti-Beijing government: Czech Industry Minister Jozef Síkela has been named the new commissioner for international partnerships.
Within weeks of being at the helm of the EU's rotating presidency in 2022, he had to forge an EU-wide deal as energy prices soared to record level. That experience has now propelled Síkela — a banker and relative newcomer to politics — onto von der Leyen's team. Coincidentally (or not) Prague also has one of the most anti-Beijing governments across Europe. “You will strengthen Global Gateway to ensure it puts forward the most attractive integrated offer to our partners including on infrastructure investment, trade and macroeconomic support,” she wrote in the mission letter for his appointment, asking Síkela to make the EU scheme “a trusted and quality brand.” Read his profile by Victor Jack, Camille Gijs and Koen Verhelst.
EU’s new tech czar opposes dependence on China: Von der Leyen has also appointed Finland’s Henna Virkkunen as one of the Commission’s executive vice-presidents in charge of tech and security issues. On multiple occasions, Virkkunen has made clear that the EU is too dependent on China, my colleague Pieter Haeck writes in. The EU must "decisively reduce its dependencies on China," then-EU lawmaker Virkkunen added to a plenary debate in April last year.
It wasn't her first intervention on the matter. "Europe must learn from the mistakes we made with Russia," she argued in November 2022. "We were far too dependent on Russian fossil fuels … we must not allow ourselves to become dependent on Chinese critical raw materials." Around the same time, she wrote a scathing blog with the not-to-be-misunderstood title "Break free from Chinese dependencies."
BRUSSELS CRUNCH WEEK
ONE-TWO PUNCH ON EVs: Journalists love a casual Friday. Alas, EU officials just won’t allow it.
The 27 European Union member countries are set to take part in a long-awaited vote that will (barring massive last-minute U-turns) confirm the European Commission’s tariffs against Made-in-China electric vehicles.
Talking while taxing: In order to avert a full-blown trade conflict, the bloc will seek to impose import duties — to save face — while continuing talks with Beijing to reassure the bloc's more skeptical members. The Commission has shared a draft regulation with EU countries on the duties it seeks to impose on cars made by BYD, Geely, SAIC and others that range up to 35 percent, Camille and Koen write in to report.
According to excerpts of the document, Brussels will commit to imposing the duties the day after the law is published. At the same time, it will continue negotiations with Beijing on setting agreed minimum prices to avoid undercutting struggling European manufacturers.
Five years, more … or less: Such duties would normally be imposed for five years, but the Commission has complete autonomy over their duration. "[Consultations] are ongoing with a view to identifying price undertakings that are effective and enforceable," the text states, adding that a solution may be found with Beijing "even after the imposition of definitive measures."
Beijing ‘is pleased’: A senior diplomat in Brussels told me that Beijing “is quite pleased” with the ongoing negotiation with Brussels, given that they have the impression the EU is open to removing tariffs in exchange for a minimum price.
Three-hour green talks: EU Ambassador to China Jorge Toledo, flanked by his counterparts from Germany, Sweden, the Netherlands and Denmark, held a three-hour meeting with China’s Vice Minister for Ecology and Environment Zhao Yingmin on Friday. The two sides were exchanging notes on how to cooperate during key international meetings on climate and environment over the next two months, including COP29 in Azerbaijan and negotiations on the Global Plastics Treaty in Busan.
UKRAINE CORNER
PARTING WORDS FROM NATO CHIEF: NATO countries should fully back Ukraine's own plan for its future, the alliance's outgoing boss Jens Stoltenberg said Monday, in response to Turkey's decision to support a new Chinese initiative.
"We should support the Ukrainian initiative," Stoltenberg said in an interview with Stuart on Monday, a day before stepping down as NATO secretary-general. He was responding to a question about Ankara's participation in the "Friends for Peace" initiative launched by China and Brazil last week.
Here’s the full story, and here’s Stoltenberg’s broader appeal to Europe on a potential Trump comeback.
A group of 17 countries has joined the Chinese-Brazilian initiative and Turkey is the only NATO member in the group. According to Chinese Foreign Minister Wang Yi, "Friends for Peace is not about choosing sides in the conflict, not about bloc confrontation, and not about replacing existing platforms."
Alpine applause: Switzerland, a key mediator, praised the latest attempt by China. Switzerland's view of the Chinese plan, first issued in May, has shifted since a reference was added to the U.N. Charter — the founding treaty of the global body that commits nations to uphold peace.
"For us, this translates into a significant change in our view of these initiatives," Nicolas Bideau, chief spokesperson for the Swiss Foreign Affairs Ministry, said, according to Reuters. "A concrete diplomatic effort organized by the Sino-Brazilian group could be of interest to us."
TRANSLATING WASHINGTON
BEIJING BLASTS U.S. AID TO TAIWAN: The White House announcement on Sunday that it will use Presidential Drawdown Authority to provide $567 million in fresh military support to Taiwan has drawn fire from Beijing. That funding is "emboldening" what Beijing sees as Taiwan's pro-independence forces but won't deter China's determination to control the island "no matter how many weapons the U.S. provides," Chinese Foreign Ministry spokesperson Lin Jian said Monday. The U.S. funding will pay for "defense articles and services of the Department of Defense, and military education and training," the White House said.
REPORT: CHINESE MILITARY ALL-IN ON AI: China's People's Liberation Army has embraced the use of artificial intelligence to boost its online disinformation efforts, said a report released today by the nonprofit think tank RAND Corporation. The Chinese military is "well-placed to adopt generative AI for social media manipulation….in part based on a threat perception that the U.S. is seeking to undermine the Chinese Communist Party," the report said. The Chinese embassy dismissed those allegations. "Labeling others as 'spreaders of fake news' cannot change the fact that the U.S. wants to maintain its hegemony by smearing others," said embassy spokesperson Liu Pengyu.
NEW CHINA COPORATE RISK INDEX: The New York-based China-focused corporate risk consultancy, StrategyRisks, rolled out an online index of U.S. firms' China risk exposure on Monday. The top 10 most-exposed firms include Ford, Apple and Tesla while Wells Fargo and Kinder Morgan rank on the low end of potential China-related risk.
ACTIVISTS TARGET HONG KONG'S WASHINGTON OUTPOST: The nonprofit Hong Kong pro-democracy group DC4HK will protest outside the office of the Hong Kong Economic and Trade Office today. The protest aims to pressure the U.S. Senate to pass Rep. Chris Smith's (R-N.J.) Hong Kong Economic and Trade Office Certification Act that would strip the office of its diplomatic "privileges, exemptions and immunities." That's necessary to restrict HKETO's alleged role "in assisting the Chinese Communist Party carry out its surveillance against our community members," DC4HK said on X on Sunday. HKETO implicitly denied those allegations. The office operates "in accordance with the laws of the United States of America," HKETO said in a statement.
LAWMAKERS: GROUND CHINESE DRONES IN FAIRFAX: The co-chairs of the House Select Committee on China want Fairfax, Virginia authorities to ban the use of drones produced by the Chinese manufacturer DJI in the county's airspace. Fairfax's proximity to sensitive government sites including the offices of the Central Intelligence Agency and the Office of the Director of National Intelligence make the intelligence-gathering capabilities of DJI drones a national security risk, committee chair John Moolenaar (R-Mich.) and Raja Krishnamoorthi (D-Il) said in a letter to the Fairfax County Board of Supervisors released Friday. Those DJI drones "collect high-resolution imagery of facilities and individuals at risk, putting them at risk of being collected by the Chinese Communist Party," the lawmakers said. DJI didn't respond to a request for comment.
WANG YI CALLS THE U.S 'TWO-FACED': China's Foreign Minister Wang Yi gave Secretary of State Antony Blinken a verbal pummeling in their meeting on the sidelines of the United Nations General Assembly meeting on Friday. Wang told Blinken that the U.S. "should not always approach #China with two faces: On the one hand encircling and suppressing China brazenly, and on the other hand, having dialogue and cooperation with China as if nothing is wrong," Chinese Foreign Ministry spokesperson Lin Jian said in an X post relaying Wang's comments. Wang told Blinken that the U.S. should "establish a rational perception of China, and find the right way to get along with it." That harangue was apparently a response to Blinken's usual laundry list of U.S. beefs with China recounted in a State Department statement that included Beijing's support for Russian's war on Ukraine and its role in fueling tensions across the Taiwan Strait and in the South China Sea.
CHINESE DEFENSE MINISTRY TOUTS BETTER COMMUNICATIONS: The resumption of U.S.-China military-to-military communications since the meeting in San Francisco in November between President Joe Biden and China's leader Xi Jinping has helped ease bilateral tensions. "There is a stabler momentum in the overall and defense relations between China and the U.S…..[due to] high-level strategic communication, policy communication, institutionalized dialogues and exchanges in specialized fields," Chinese Defense Ministry spokesperson Snr. Col. Zhang Xiaogang told reporters Friday. Beijing suspended mil-mil communications following then-House Speaker Nancy Pelosi's Taiwan trip in 2022. But the revived contacts remain fragile — U.S. efforts to coax Beijing into nonproliferation talks hit a brick wall in July after China suspended negotiations to protest U.S. arms sales to Taiwan.
HEADLINES
ECONOMIST: Fear of a Soviet-style collapse keeps Xi Jinping up at night.
FINANCIAL TIMES: How a Chinese billionaire's Silicon Valley splurge caught the eye of the FBI.
NEW YORK TIMES: This is what can land you in jail for sedition in Hong Kong.
MANY THANKS: To editor Christian Oliver, reporters Camille Gijs, Koen Verhelst, Victor Jack and producer Catherine Bouris.
This email was sent to salenamartine360.news1@blogger.com
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