Oh, no he didn’t…Trump appoints PRC tariff fanatic
UK wants in at the Indo-Pacific; US swears to fight Beijing on fentanyl
Observing China is the essential newsletter to understand the UK-PRC relationship, explained in the context of global developments.
As the dust begins to settle on the election of Donald Trump as President-elect of the United States (US) – if the dust can ever settle before he shakes the world again – we see what is likely to be prioritised in regards to relations with Beijing when he takes office next January. He seems dead-set on tariffs and going hard on the People’s Republic of China (PRC) for its part in America’s fentanyl crisis. While the means he uses to achieve his goals, and the duration with which he pursues them, may remain ever as unpredictable, he is unlikely to let these issues slide as they directly impact the thing he holds dearest – the US economy.
Welcome back to Observing China.
1.1 Party boy son of ex-CCP official family marred by scandal marries Taiwanese healthcare heiress
The patrilineal trajectory of one high-profile family in the PRC shows the precarious nature of a career in CCP politics, and how quickly a turn in favour with a superior can determine one’s lifelong fate.
Bo Guagua, a graduate of Harrow School, the University of Oxford and Harvard University, has tied the knot with a Taiwanese woman in a ceremony on the island his forefathers swore would be unified with the PRC.
His father, Bo Xilai, was highly senior in the CCP and described as a rival to Xi Jinping; accusations of murder implications have seen him sentenced to life imprisonment. His grandfather was one of the PRC’s most revered revolutionaries and a close ally to Mao Zedong, before falling out of favour with the Chairman during the Cultural Revolution, only to then reappear as one of Deng Xiaoping’s closest advisors.
Perhaps because of his father’s association with scandal, Bo Guagua has kept a low profile for a long time, though his party lifestyle as a student at Oxford and Harvard was widely documented in the Western media.
1.2 The modern Opium War? Trump vows sanctions to halt PRC’s perpetuation of US fentanyl crisis
It has been known for approximately a decade that the PRC is the major source for chemical components used by Mexican cartels in the creation of fentanyl, which is pushed across the border to the US and is the biggest driver of overdose deaths in the country.
Joe Biden, President of the US, has made consistent diplomatic efforts to persuade Xi Jinping, General Secretary of the Chinese Communist Party (CCP), to agree to take measures against this, but many US analysts complain of meagre results. Trump says sanctions are the only way, particularly against the PRC banks thought to be involved in the complex web of money laundering and drug trafficking.
1.3 PRC’s defence minister barely serves a year before being cloaked in corruption investigation
Admiral Dong Jun was appointed as Minister of Defence for the PRC last December after his predecessor was dismissed on corruption charges. Both men were appointed by Xi, which points to a question pondered by analysts across the world: is Xi not as shrewd at identifying potential bad elements as previously thought, or is corruption simply sewn into the lining of the People’s Liberation Army (PLA) – or could it be both? Many experts also wonder whether these corruption purges are a means for Xi to eliminate competition.
Mao Ning, Spokeswoman of the Foreign Ministry of the PRC, has dismissed the investigation by the Financial Times as nothing but ‘shadow-chasing’.
1.4 Trump says tariffs will go ahead for the PRC, Canada and Mexico
On 25th November, Trump said that he will impose 25% tariffs on imports from Mexico and Canada and an additional 10% on imports from the PRC, on top of any current duties.
Trump has since announced that Jamieson Greer will be the new trade representative when the president-elect takes office in January 2025. Back for a second round, perhaps Trump wants Greer to finish off what he started; he was a key figure in the imposition of tariffs on Chinese imports during Trump’s first term.
1.5 Updated European Chips Act may include legacy chips to counter increased PRC manufacturing output
The European Commission is discussing the expansion of its European Chips Act from 2023 to include ‘foundational and legacy’ semiconductors, the manufacturing of which is a key strength area for the trade bloc. The €43 billion (£35.8 billion) subsidy plan aims to boost Europe’s share of the global chip market to 20% by 2030.
Rene Schroeder, Head of the European Semiconductor Industry Association, has said that his group advocates for relevant cooperation with countries such as the US, Japan and South Korea ‘rather than a defensive approach that relies on restrictive and protective measures.’
Since the reporting of the PRC-backed hackers’ infiltration of key US telecommunication company networks (see 1.5 of this October newsletter), Mark Warner, Chairman of the Senate Intelligence Committee, has said the breach is the worst in his country’s history.
This further underlines a sentiment shared by many experts that cyber is an important element in future warfare.
1.7 PRC warns New Zealand against joining AUKUS
The PRC says that the trilateral security partnership (comprising the US, Britain and Australia) undermines regional peace and security. Wellington is reportedly in the ‘information-gathering’ phase in its consideration to join Pillar II of the agreement, and Wang Xiaolong, PRC Ambassador to New Zealand, said the country’s accession would inevitably have negative consequences on bilateral ties.
1.8 PLA’s US$9billion (£7.1billion) secret warship spotted conducting military drills
The Liaoning is the first aircraft carrier commissioned into the PLA’s Navy Surface Force and has been photographed roaming the Pacific Ocean once again. The PLA confirmed on its Chinese social media account earlier this year that the Liaoning and Shandong vessels sailed through the Yellow Sea, East China Sea and South China Sea. The PRC is pursuing its territorial claims in the latter region and said that the ship formations were executed to ‘hone and improve’ their combat capabilities.
Meanwhile, a puzzling PRC vessel has set sail which has the characteristics of both an aircraft carrier and a commercial vessel. As a ‘non-military vessel configured like an amphibious assault ship’, analysts have concluded that nothing quite like this ship, built at breakneck speed by the PLA, exists elsewhere in the world.
2.1 A piece by the Lowy Institute looks at how diplomatic relations between Beijing and Islamabad are being tested in light of the recent terrorist attacks on Chinese nationals as part of violent protest against the PRC’s Belt and Road Initiative (BRI) infrastructure projects in Pakistan.
2.2 A piece by the International Institute for Strategic Studies looks more in-depth at the development of the PLA aircraft carriers mentioned above (see 1.8).
3.1 Up to Rayner to rein in the PRC’s London mega-embassy
At the Group of 20 (G20) Summit in Brazil on 18th November, Sir Keir Starmer, Prime Minister, raised the PRC’s request to upgrade its current embassy in London to a supersize one located in the Royal Mint Court. Sir Keir said that the CCP’s application would be reconsidered, after its rejection by the Tower Hamlets council (the local authority), which was backed by Sadiq Khan, Mayor of London.
Of the many grave issues that could arise from the supersize embassy, the counterterrorism police highlighted the risk to protesters who may gather in the area given Beijing’s ongoing human rights abuses. Such protesters would likely be subject to CCP scrutiny and potential mistreatment for protesting, as in the case of Bob Chan, a pro-democracy Hongkonger, who was beaten outside the Chinese consulate in Manchester in 2022.
Angela Rayner, Deputy Prime Minister and Secretary of State for Housing, Communities and Local Government, will make the final decision next year.
Catherine West, Parliamentary Under-Secretary of State for the Indo-Pacific, said in a speech on 25th November that the UK remains committed to developing its foreign policy strategy in the Indo-Pacific region. This is not a surprise: the region is expected to be home to around half of the world’s middle class consumers by 2035 and Britain has been ramping up its presence there significantly since 2021.
West said that the UK will remain cognisant of the security challenges posed by the PRC, but that it cannot negate the economic opportunities of cooperation. Perhaps this is why His Majesty’s (HM) Government is placing a proportionately larger focus on Singapore and Australia – because they are less tricky customers.
4.1 Wang Yi, Minister of Foreign Affairs of the PRC, met with Xavier Bettel, Deputy Prime Minister of Luxembourg, on 25th November, where he said the European Union (EU) and the PRC are partners and not rivals. This will be in reference to an increased action on national and economic security concerns from the European Commission, for example the tariffs on electric vehicles and the creation of the Chips act. In response to these measures, Wang Yi said he hopes the EU will ‘uphold its strategic autonomy’. This patronises the EU’s efforts at upholding its interests as being a client state to the US.
Bettel expressed views that will be palatable to the PRC; he wants to deepen bilateral cooperation and wants Luxembourg to be a gateway for EU-PRC relations.
4.2 Beijing and Singapore signed 26 investment agreements on 25th November in an inter-governmental deal spanning biopharmaceuticals and the digital economy. The deal took place at Suzhou Industrial Park, a mammoth CCP innovation project which now houses over 400 Singaporean enterprises.
Ties like these inevitably impact how countries will vote in international fora where Beijing is present. Taiwan was thought to be the next country to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), given its qualifications and eagerness. But the PRC has also requested to join, and, although not as qualified as Taiwan, existing members Singapore, Vietnam and Malaysia have publicly said they will support the PRC’s accession over Taiwan’s. They do not want to risk upsetting the PRC when their trade networks and investment infrastructures are so inter-linked. Costa Rica is now billed to be the next country to join.
Gray Sergeant, Research Fellow in the Indo-Pacific at the Council on Geostrategy, writes:
On 28th November, British parliamentarians will debate Taiwan’s international status. It is a topic which has the potential to cause a rift in UK-PRC relations.
The fact is the British government does not see eye to eye with the CCP. Beijing’s expansive ‘One China’ principle claims Taiwan as part of the PRC. London disagrees and has long maintained that the island’s status is undetermined.
Yet, the government seems incredibly unwilling to articulate this, so much so that talk of Taiwan has not appeared on the British readouts of the conversations that David Lammy, Foreign Secretary, and Sir Keir have had with their Chinese counterparts, but has on Beijing’s version.
Keeping quiet about Taiwan’s status is unhelpful. During a cross-strait crisis, Beijing will likely present their aggressive actions as law enforcement, as an ‘internal matter’. Beijing is already laying the groundwork by getting leaders across Asia and Africa to echo their expansive ‘One China’ claim.
If global opinion favours Beijing, supporting Taiwan in such circumstances will become even more difficult. As things stand, it is unlikely that the international community would react to a Chinese annexation of Taiwan in the same way they did following the Russian invasion of Ukraine. This gives yet another reason for Britain and like-minded partners to clarify their position on Taiwan’s status and pushback against disinformation around Resolution 2758, which seeks to legitimise Beijing’s expansionist claims.
This Taiwan Take was based on an article published this week in The Spectator - a full version can be read here.
By next week’s newsletter, we will know how British parliamentarians debate Taiwan’s international status, which is fundamental in setting the tone for ongoing UK-PRC relations. We will also see if Britain is the next of Trump’s tariff targets – and if so, how might we ingratiate ourselves to him to soften the blow? We could offer to help uncover the dark dealings in fentanyl with our world-class financial crime investigations sector, but perhaps the US has other ideas in store…
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Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk
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