China in the global tech race
...and escalating South China Sea tensions; the British supply of military-related equipment to the PRC.
Hello everyone, I’m delighted to welcome you to the first edition of Observing China, the China Observatory’s new newsletter. Every Tuesday and Thursday, I’ll be posting a selection of news and views related to the People’s Republic of China (PRC) and relations between London and Beijing. This newsletter has been created with the aim of improving understanding of the PRC’s relationship with the United Kingdom (UK), and to help His Majesty’s (HM) Government formulate effective strategy for engaging with the Chinese Communist Party (CCP). Thank you for your interest, and I hope you find this newsletter informative and engaging! I’d like for this to become as valuable a resource as possible, so please feel free to provide me with feedback via email or over coffee. This first newsletter will be longer than normal as it is covering over a week of PRC-related news.
– Liddy (Elizabeth Lindley)
1.1 The Economist asks whether China is nearing the technological frontier and what this means for countries such as the UK. While it is not yet the world’s technological hegemon, the PRC is advancing quickly and closing the gap with leading nations, particularly in the fields of artificial intelligence (AI), telecommunications, and materials science. The PRC is already the world leader in chemistry, physical sciences and Earth and environmental sciences.Â
Xi Jinping, General Secretary of the CCP, intends to extend the PRC’s lead to other areas – such as quantum computing, next-generation energy, and synthetic biology – to become the world’s leading ‘science and technological power’ (‘科技强国’) by 2030. Dedicated policies and significant flows of investment are being targeted at sectors deemed of strategic importance to the CCP (see: Box 1).
Box 1: The PRC’s plans for technological supremacy
The CCP plans to dominate science and technology through several interlocking policies:
Made in China 2025 (2015)
Aims to upgrade China's manufacturing capabilities in key sectors such as robotics, aerospace, and biotechnology, to reduce reliance on foreign technology.Next Generation Artificial Intelligence Development Plan (2017)
Seeks to establish China as the world leader in AI by fostering innovation, developing AI infrastructure, and integrating AI across various industries.China Standards 2035 (2018)
Focuses on creating and promoting Chinese-developed standards for emerging technologies such as 5G, IoT, and advanced manufacturing, to influence global industry norms.
Will the PRC achieve its goals? Perhaps. But only if free and open nations fail to cultivate their own scientific powerbases. Britain has an uphill task, but one which, with political determination, can be overcome.
1.2 Second Thomas Shoal clash between China Coast Guard and Philippine navy
On 17th June 2024, China Coast Guard [ä¸å›½æµ·è¦] (CCG) personnel forcibly blocked the resupply of Philippine outpost BRP Sierra Madre in the Second Thomas Shoal, damaging Filipino boats, seizing equipment, and wounding several Filipino navy personnel. The PRC justifies such actions under its new ‘Regulation of the China Coast Guard (CCG) Organisation on Enforcing Law and Order’, effective two days prior. The incident challenges the US-Philippines Mutual Defence Treaty, and has led to heightened diplomatic efforts as Manila and Washington seek to de-escalate tensions. The Sierra Madre will need to be resupplied, and soon.
1.3 UK exporting civil-military equipment to China despite arms embargo
Despite a May 2022 arms embargo, HM Government has authorised £55.3 billion in military-related equipment sales to the PRC over the past two years. The embargo restricts complete weapons systems, lethal arms, and their components - but permits dual-use technology exports, including ballistic test tools, night-vision technology, uranium-233, nuclear reactor technology, lasers, imaging cameras, and information security software. Most exports were classified as ‘information security equipment’ for commercial purposes. However, the lack of transparency surrounding the licences obscures their final use - troubling to many observers given the CCP’s domestic surveillance apparatus, or its persecution of the Uyghur minority in Xinjiang, for example.
1.4 Beijing mandates the death penalty for ‘diehard’ Taiwan separatists
On 21st June 2024, the PRC issued new guidelines penalising actions which promote Taiwanese independence, with extreme cases subject to the death penalty. Advocating for Taiwan’s membership in international organisations, engaging in official exchanges, or establishing military contacts with foreign nations are now all punishable. These guidelines may discourage Taiwanese citizens from travelling to the PRC and other countries with which it holds extradition agreements, such as France, Italy, Spain, Mexico, Brazil, and Indonesia​​.
1.5 China and Russia’s plans for an Arctic silk road
Beijing and Moscow are expanding their collaboration to an Arctic region increasingly accessible due to global warming. The PRC aims to become a major Arctic power through establishing a ‘Polar silk road’ via the Northern Sea Route, which would cut shipping times from China to Europe and transform Northern Europe into a key hub for Chinese trade. Concurrently, Beijing is investing in Arctic infrastructure and resource extraction, moves welcomed by Moscow amidst Western sanctions and geopolitical isolation.
1.6 Edinburgh backtracks on closer links with Taiwan, fears PRC backlash
Edinburgh city council has suspended plans for a friendship agreement with Taiwanese city Kaohsiung. After consulting with Edinburgh’s business, academic and tourism sectors, the council decided that the agreement posed too great a risk of retaliation from Beijing.
1.7 Chinese state media: American submarine probe intercepted in South China Sea
On 26th June 2024, Chinese state media reported that the PRC had intercepted an American submarine probe in the South China Sea. The probe, dropped by United States (US) military aircraft, was retrieved by the PRC’s coastguard and is believed to detect submarine signals.
2.1 Charles Parton, Chief Advisor to the China Observatory, published an article on 25th June entitled: ‘China-European Union relations: Expectations for 2024 and beyond’. This report details the evolution in the European Union’s stance towards the PRC from early optimism to increasing assertiveness.Â
2.2 The Centre for Strategic and International Studies (CSIS) has published an analysis on the escalating global competition over electric vehicles (EVs), outlining the existential challenge posed to Western markets by the PRC’s state-driven industrial policies.Â
2.3 The Mercator Institute for China Studies (MERICS) has partnered with Rhodium Group to publish a report on Chinese investment in Europe. This report offers valuable insights into the trends of dwindling Chinese FDI in Europe, particularly the rise of Hungary as a key destination, and the dominance of greenfield investments in the EV industry.
3.1 On 14th June 2024, at the G7 press conference, Rishi Sunak, Prime Minister, delivered a statement which reaffirmed the UK’s support for Ukraine. For the first time, he condemned Beijing’s increasing alignment with authoritarian states and its provision of dual-use and defence-related equipment to Russia. In his words: ‘if you prop up Russia’s war economy, prolonging this illegal war, you will pay a price.’Â
3.2 On 19th June 2024, the Foreign, Commonwealth & Development Office (FCDO) released a statement condemning the PRC’s dangerous and unlawful actions against the Philippines in the Second Thomas Shoal, urging for adherence to international law - and the South China Sea Arbitration Tribunal’s rulings, which in 2016 affirmed the Philippines’ control over the disputed territory and found Beijing to be in violation of international law.
4.1 On 20th June 2024, the Chinese Embassy in the UK rebuked the FCDO’s statement as ‘wrongful’, asserting CCG actions were lawful and justified in response to Philippine provocations. The Chinese side ‘urge the UK to immediately stop making dangerous remarks that distort facts and provoke confrontation.’
CCP trope: The Great Wall of Virtue
The CCP often uses rhetorical discrediting and moral elevation in response to criticism, portraying detractors as factually incorrect while asserting its own moral superiority. This approach seeks to influence international opinion, undermine opposing perspectives, and highlight its own stance as more ethical, righteous and just. This tactic is a key element of the CCP’s diplomatic playbook and focuses on delegitimising its critics and advancing Chinese narratives on the global stage.
Gray Sergeant, Research Fellow on the Indo-Pacific at the Council on Geostrategy, writes:
Did Xi Jinping really think Brussels would buy it? Thanks to a Financial Times scoop we now know that in April 2023 Xi warned Ursula von der Leyen, President of the European Commission, that the United States (US) was goading him into attacking Taiwan. A war with the US, he went on to say, would undermine his own goal of achieving national rejuvenation.
Given the costs of a conflict this is certainly true. However, as one expert told the Financial Times, if Xi really believes this to be Washington’s intention then there are serious questions about the information he is being fed and the counsel he is keeping. Â
Beijing has long sought to reassure the outside world of its peaceful intentions and to make others blame Washington for heightened cross-strait tensions.
If Xi was hoping to draw European countries away from the US, it failed. The G7, demonstrating unity, once again underlined the importance of peace and stability across the Taiwan Strait. No doubt G7 leaders have paid more attention to Beijing’s ongoing ‘grey zone’ military manoeuvres around Taiwan, including the Joint Sword-2024a exercises following Lai Ching-te’s presidential inauguration.
While the EU’s mind may not have been changed, the question is: how many other foreign leaders have been fed this line? And how many of them believe it?
That’s all for this week! Please check back in on Tuesday for more China-related news and views.
If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.