 |
By STUART LAU
with PHELIM KINE
Send tips here | Tweet @StuartKLau or @PhelimKine | Subscribe for free | View in your browser
HELLO, CHINA WATCHERS. This is Stuart Lau in Brussels. Phelim Kine will write to you from the U.S. on Thursday.
Ready for Trump 2.0 in just two weeks? U.S. presidential hopeful Donald Trump says he’s pretty sure he won’t need to send troops to stop Chinese President Xi Jinping invading Taiwan. His reason? “Because he respects me and he knows I'm fucking crazy,” Trump told the Wall Street Journal.
DRIVING THE WEEK: XI IN RUSSIA
XI GOES TO RUSSIA: Chinese President Xi Jinping heads to Russia today for what will be his third meeting with his Russian counterpart Vladimir Putin this year. Putin will play host to a summit of BRICS leaders (even though the Brazilian president has a head injury and can’t attend) in the Russian city of Kazan, by the River Volga. Xi is keen to use his appearance to brush aside U.S. and Western pressure on Beijing to alienate Russia economically and strategically.
What’s at stake? More developing countries are keen to join the group despite the West’s efforts at isolating Russia. Last year, the BRICS (Brazil, Russia, India, China and South Africa) welcomed Iran, the UAE, Egypt and Ethiopia, and the group is now processing more applications. They’re not just from global outliers like Cuba, Syria and Belarus; Malaysia, Thailand, Sri Lanka and Pakistan also want to join.
Beijing wants to keep Moscow close: One of the leading articles on Chinese state news agency Xinhua in the lead up to the summit features an interview with Zhang Hanhui, the top Chinese envoy to Moscow. According to Zhang, “China and Russia are pioneers in … building a community with a shared future for mankind.” He also said the two countries are “strengthening the unity of developing countries and the Global South.”
Headline focus: The ambition will be again to challenge the Western and U.S.-led view of the world order, as the Russian and Iranian economies are hamstrung by sanctions. Putin is expected to push for an alternative platform for international payments (after Russia was banned from SWIFT following its invasion of Ukraine) and to get BRICS to collaborate more in the grain trade in order to exert more influence on the way international prices are set.
Russia’s message to the world: Putin will use the summit to show that Russia is not isolated, according to Alexander Gabuev, director of the Carnegie Russia Eurasia Center. With the exception of Brazilian President Luiz Inácio Lula da Silva and Saudi Crown Prince Mohammed bin Salman, “all other leaders just feel totally normal to come to Kazan and shake hands with him [Putin,]” he said.
Rubles or yuan? Nah: But Gabuev told China Watcher that BRICS countries don’t see eye to eye on economic issues: “We still see some tension inside BRICS on how far they are willing to go in this de-dollarization drive.” He said he wouldn’t expect big news on any new financial or energy announcements, such as the Power Siberia 2 gas pipeline.
But China's own aims are more global. "China uses BRICS to give it a mandate to push global visions and post-Western vision," Una Bērziņa-Čerenkova, director at Riga Stradins University’s China Studies Center, told my colleague Camille Gijs, pointing to international interest in the economic opportunities coming from Beijing.
Unlikely fans: One-time Russian warlord Yevgeny Prigozhin, who tried in vain to overthrow Putin and died in a plane crash, remains a popular figure on Chinese social media. Foreign Policy has more.
AROUND EUROPE
EU GETS READY FOR TRUMP: The European Commission’s secretive “Trump task force” is getting ready to deal with the scenario of a Republican victory in the Nov. 5 election. And in a bid to reduce tension, Brussels is poised to offer Washington greater cooperation on policy about China — after years of Brussels being more reluctant than Washington to get tough.
As a diplomat told my colleague Jakob Hanke Vela:"The Americans should be more friendly to Ursula if they are serious about taking on China together."
That’s despite Brussels also planning to strike back at Trump if he launches a trade war with the EU. "We will hit back fast and we will hit back hard," one senior European diplomat said about the EU's contingency plan for a Trump trade war. Here’s Jakob’s full story.
FABIUS IN CHINA: Beijing’s diplomatic charm offensive toward Paris continues — despite France’s successful push for the European Union to levy tariffs on Made-in-China electric vehicles. On Monday, Chinese Foreign Minister Wang Yi met an old friend and his one-time counterpart Laurent Fabius, who’s now President of France’s Constitutional Council.
According to the Chinese government readout, Wang told Fabius that “it’s not in the interest of China or the EU to experience some twists and turns in the the trade and economic relations.” He again called on the EU to settle the disputes through negotiations.
The EU has until late October to try to hammer out a deal, though Beijing’s refusal to accept the notion of overcapacity and unfair subsidies has made it difficult for the EU to work out solutions.
UK-CHINA
LAMMY IN CHINA: Britain's foreign minister urged China to investigate claims its companies supplied weapons to Russian forces in Ukraine after the United States slapped sanctions on a host of Chinese companies, my colleague Noah Keate writes.
David Lammy, who is on a diplomatic visit to Beijing as the new Labour government tries to smoothe engagement with China, told Foreign Minister Wang that the U.K. and China had a "shared interest in European peace and ending the war" in Ukraine.
He argued that Chinese supply of equipment to Russia "risks damaging China's relationships with Europe whilst helping to sustain Russia's war," according to a readout from the British government.
China's own readout, per state outlet CGTN, by contrast says only that the pair "exchanged views on international and regional matters such as the Ukraine crisis." Here’s Noah’s full write-up.
VIEW FROM NATO
EXCLUSIVE INTERVIEW: Stuart sat down with the outgoing U.S. Ambassador to NATO Julianne Smith on Monday, a day before she moves back to Washington. She highlighted that the alliance has got much more serious about the challenges posed by Beijing — compared to when she got the job in 2021.
“This is an alliance that spends more time talking about what the PRC [People’s Republic of China] is doing to support Russia, but also what the PRC is doing in and around Europe,” she said.
NATO has also grown more aware of the need to “build greater resilience, protect critical infrastructure, talk about securing supply chains and how we can all fortify ourselves against some of the tactics that the PRC is using to divide us from within in our societies, or to divide us across the NATO alliance,” Smith added. A full version of the interview will land on our website later today, so stay tuned.
TRANSLATING WASHINGTON
DRONE MAKER DJI SUES THE PENTAGON: Chinese drone company Shenzhen DJI Innovation Technology Co., Ltd., commonly known as DJI, is suing the U.S. Defense Department in a bid to overturn the department's designation of the firm as a "military company." The lawsuit alleges that the listing is unfair because "DJI is neither owned nor controlled by the Chinese military and … sells only 'consumer and commercial' — not military — drones." Phelim has the full story here. DJI has serious legal muscle behind its lawsuit filed by U.S. law firm Paul Weiss in the Washington, D.C., District Court on Friday. One of the lead lawyers arguing for DJI include none other than Loretta Lynch, former Attorney General in the Obama administration.
REPORT: 'FAIR TRADE' WITH CHINA ELUSIVE: China-targeted economic policies by both the Trump and Biden administrations from 2017-2024 have failed to prod Beijing to change policies that unfairly handicap U.S. exporters and companies based in China, a research analysis released today concludes. Tariffs imposed by both administrations have reduced Chinese imports and trimmed the U.S.-China trade deficit, but do little "in ensuring fair treatment for U.S. firms in China and even less in persuading the Chinese government to reduce its subsidies and other uncompetitive state assistance to its own manufacturers," said the report published by the nonprofit think tank RAND Corporation.
CHINA'S MILITARY FRETS U.S. MISSILE DEPLOYMENT: China's People's Liberation Army is signaling alarm at the U.S. decision to indefinitely deploy its land-based mid-range Typhon missile system in the Philippines. That deployment is a "calculated move aimed at dragging the Asia-Pacific into the quagmire of an arms race, signaling a potentially dangerous resurgence of the 'specter' of the Cold War," said a PLA analysis published Saturday. The PLA wants to rally ASEAN nations to "unite to collectively resist the provocative actions of the U.S. and the Philippines," the article said. That reflects Chinese concerns that its increasingly aggressive incursions into Philippine waters of the South China Sea might reap U.S. military intervention under the U.S.-Philippines Mutual Defense Treaty.
BEIJING SQUIRMS AT TRUMP'S TARIFF THREAT : The Chinese government would rather not talk about Republican presidential candidate Donald Trump's threat to impose "150 percent to 200 percent" tariffs in response to a possible Chinese invasion of Taiwan. "We have no comment on U.S. presidential elections and oppose anyone in the U.S. making China an issue in the presidential elections," Chinese Foreign Ministry spokesperson Lin Jian said Monday. Trump said tariffs —and his relationship with Chinese leader Xi —would obviate the need for a U.S. military response to possible Chinese aggression against the self-governing island. “I wouldn’t have to [use military force], because he respects me and he knows I’m fucking crazy,” he said in an interview last week with the Wall Street Journal.
FENTANYL VICTIMS' FAMILIES URGE USTR PROBE: Family members of U.S. victims of fentanyl overdoses have enlisted the assistance of a Washington-based law firm to press the office of the U.S. Trade Representative to launch a probe into China's role in fentanyl production and export. Wiley is petitioning USTR "to initiate an investigation into the PRC's acts, policies, and practices [on fentanyl]…and consider imposing countermeasures" the law firm said in a statement Friday. Beijing responded with a blame-the-victim approach. "The root cause of the overdose lies in the U.S. itself, which calls for more effective measures from the U.S. government," Chinese Foreign Ministry spokesperson Mao Ning said Friday. USTR confirmed to China Watcher on Monday that it had received and was reviewing the petition.
LAWMAKERS: PROBE MCKINSEY'S CHINA WORK: Republican lawmakers are urging the Defense and Justice Departments to investigate whether the consulting firm McKinsey & Co. misrepresented its work with Chinese government agencies. McKinsey "failed to disclose consulting engagements with the central and provincial government of the People's Republic of China (PRC) and state-owned enterprises (SOEs) ultimately under the control of the Chinese Communist Party (CCP) while McKinsey worked with DOD on sensitive national security matters," Rep. John Moolenaar (R-Mich.) and Sens. Marco Rubio (R-Fla.) and Joni Ernst (R-Iowa) said in letters to DOD and DOJ published Friday. The lawmakers allege that McKinsey's lack of transparency about its China work "pose a serious risk to U.S. national security and may have failed to meet McKinsey's obligations under federal law." The letters follow questions about the firm's Chinese government ties first reported by the Financial Times in February. McKinsey declined to comment.
BEIJING DENIES SHIPPING RUSSIA MILITARY DRONES: The Chinese government denied White House allegations that Chinese firms are designing, producing and exporting to Russia military aerial drones deployed against Ukrainian civilians and soldiers. The U.S. Treasury Department has imposed sanctions on two Chinese firms for their involvement in that trade. Beijing says that's wrong. China opposes "illegal unilateral sanctions against Chinese companies and does not accept groundless accusation and pressure from the U.S. …we urge the US to immediately stop using the Ukraine issue to smear or put pressure on China," Chinese Foreign Ministry spokesperson Mao said Friday.
IN HEADLINES
CHATHAM HOUSE: How Beijing is closing surveillance gaps in the South China Sea.
FINANCIAL TIMES: 'China is not Cuba's sugar daddy': ties between communist nations weaken.
NEW YORK TIMES: Five provisions in China's panda contracts with U.S. zoos.
MANY THANKS TO: Editor Christian Oliver, reporters Camille Gijs, Noah Keate, Jakob Hanke Vela and producer Dean Southwell.
SUBSCRIBE to the POLITICO newsletter family: Brussels Playbook | London Playbook | London Playbook PM | Playbook Paris | EU Election Playbook | Berlin Playbook | Global Playbook | POLITICO Confidential | Sunday Crunch | EU Influence | London Influence | China Watcher | Berlin Bulletin | Living Cities | D.C. Playbook | D.C. Influence | All our POLITICO Pro policy morning newsletters
This email was sent to salenamartine360.news1@blogger.com
update your preferences, or
unsubscribe from all POLITICO SRL emails
POLITICO SRL · Rue de la Loi 62 · Brussels 1040 · Belgium