Putin calls Xi an ally
CCP censors citizens’ sadness at deadly attack; Indonesia and PRC forge multidimensional ties
Observing China is the essential newsletter to understand the UK-PRC relationship, explained in the context of global developments.
Free and open countries can no longer ignore the budding closeness in the authoritarian regimes of Vladimir Putin, President of Russia, and Xi Jinping, General Secretary of the Chinese Communist Party (CCP). Both leaders have declared mutual support for each other’s respective endeavours to cement their legacies by securing additional territories (Ukraine and Taiwan). The comparison between the two territorial claims is explicit: on 7th November, Putin declared the People’s Republic of China (PRC) his ally and accused Taiwan of trying ‘to stir up a Ukraine-style crisis in Asia in order to attract outside support’. Putin believes that Xi’s aspiration to claim Taiwan is a ‘completely reasonable policy’.
And on that note…welcome back to Observing China.
1.1 Indonesia to sign investment agreements worth more than US$10billion with the PRC
Prabowo Subianto, President of Indonesia, visited the PRC last week to sign billions of dollars worth of investment deals in sectors such as new energy vehicles, lithium batteries, photovoltaics and the digital economy.
While Subianto is clearly eager for investment from Beijing, he also appears to understand the need to balance his country’s interests; he is currently on a trip to Washington. Subianto is aware that the PRC is both his country’s biggest trading partner but also its most significant security threat.
Maintaining and strengthening relations with Indonesia will be vital for the free and open nations, as the major economy is also essential to regional security in times of increased PRC aggression in the South China Sea. David Lammy, Foreign Secretary, visited Indonesia after his recent trip to Beijing.
1.2 Taiwanese Coast Guard to offer monetary reward for citizens’ report of Chinese vessel activity
Due to limited resources and manpower, the Coast Guard of Taiwan is offering rewards to anyone who reports illegal maritime activity around the island’s coasts or in the strait separating it from the PRC. Concerned over the increasing military activity by the People’s Liberation Army (PLA) – the Chinese armed forces – around the island, the Taiwanese Coast Guard is offering NT$50,000 (£1,200) to accurate reports of illegal stowaways from the PRC.
1.3 Shigeru Ishiba to stay on as Prime Minister of Japan leading a minority government
Legislators in Japan have voted for Shigeru Ishiba to remain prime minister following the loss of his scandal-ridden coalition’s parliamentary majority last month. The United States (US) and its allies welcome Ishiba’s vocal criticism of PRC aggression; he has intimated that Japan should defend Taiwan in the event of a Chinese invasion. While Ishiba’s aspirations for Japan to become a regional peacekeeper in its own right align with the United Kingdom (UK) and the US’ wish to contain the PRC, the latter will be cautious to maintain its own role in the region.
1.4 Beijing slices away at Manila’s territorial claims
Gilberto Teodoro, Minister of Defence for the Philippines, has spoken out against the pressure exerted by the PRC for his country to cede its sovereign rights in the South China Sea. On 10th November, Beijing established a baseline of ‘territorial waters’ around the Scarborough Shoal, claimed by both the PRC and the Philippines.
It appears that Teodoro was correct in doubting the sincerity of the PRC’s recent promise to reach a maritime code of conduct in the contested waters (see 1.4 of this newsletter).
In response to the Philippines’ opposition to the claims, Lin Jian, Spokesperson for the Ministry of Foreign Affairs of the PRC, said words to the effect of ‘the Philippines started it first’.
On 12th November, Sergei Shoigu, Secretary of Russia’s Security Council, told Wang Yi, Minister of Foreign Affairs for the PRC on a trip to Beijing that strong relations between the two countries are a ‘stabilising influence on the world’.
According to Russian state news agencies, Shoigu elaborated by declaring the most important bilateral task as ‘countering the policy of ‘dual containment' of Russia and China pursued by the US and its satellites’.
1.6 CCP censor online comments asking deeper questions about Zhuhai hit and run
On 11th November, a mentally unstable 62-year old man ploughed into a crowd with his car killing 35 people in the southern city of Zhuhai, the once sleepy fishing village turned metropolis after Deng Xiaoping’s Southern Tour in 1992.
Naturally, many took to social media to ponder potential deeper social issues behind the attacker’s mental instability, surmising ‘widespread lack of job security’. Others criticised the (state-owned) media for under-reporting the attack and focusing instead on the military airshows conducted in the city at the same time: ‘In the eyes of those in power, aeroplanes are more important than human lives.’
Government censors have removed these comments from social media, and acted quickly both online and offline to quell any signs of deeper social disquiet following the deeply upsetting attack. The euphemism used in PRC online discourse to allude to government censorship is ‘和谐’ (héxié’), meaning ‘to make harmonious’.
1.7 Beijing puts off fiscal stimulus until US trade policies become clear
The expected fiscal stimulus mentioned in last week’s newsletter has turned out to be little more than swapping local governments’ hidden debt – and therefore does not count as a stimulus given there will be no incremental government borrowing. Analysts expect the fiscal stimulus to take place once Donald Trump, President-Elect of the US, has been in power for enough time for Beijing to adjust relevant measures to the expected economic headwinds that Trump’s presidency will bring.
1.8 ‘We do not want a trade war’, says European Union (EU) Ambassador to the PRC
Speaking at an event in Shanghai on the 9th November, Jorge Toledo, the EU's Ambassador to the PRC, said that the bloc does not want a trade war with the PRC, but reiterated that the past five years of bilateral talks have been fruitless. In response to findings that European medical device manufacturers have been discriminated against in PRC public procurement contracts, Toledo stated: ‘We don't want a trade war. We just want transparency. We want a level playing field.’
The PRC echoes Toledo’s words in response, even though it is clear that the sheer volume of Chinese manufacturing output, and the amount they want to export, does not allow for ‘a level playing field’.
1.9 Italy’s automotive industry cuts financial support to avoid funding PRC-made vehicles
A short statement by Giancarlo Giorgetti, Minister of Finance for Italy, said that funds ‘aimed at supporting electric cars made in China or other countries’ will be cut. Italy is a leading country in automobile manufacturing and was one of ten countries to vote in favour of tariffs imposed on PRC-made electric vehicles at the European Commission on 4th October.
2.1 A timely and concise article by Foreign Policy in Focus which explains the balancing act that Indonesia’s recently elected president will have to make as he negotiates bilateral relations with both the US and the PRC. Subianto faces increasing pressure as a non-aligned leader in the ongoing competition between Beijing and Washington.
2.2 Analysis by the Central European Institute of Asian Studies looks at PRC state media portrayal of Ukraine’s Kursk offensive, and Putin’s invasion overall. The media coverage characteristically favours Russian stances.
3.1 His Majesty’s (HM) Government in talks with Beijing-owned British Steel to save future furnace jobs
Jonathan Reynolds, Secretary of State for Business and Trade, has reportedly made ‘an offer no one can complain about’ in negotiations with Jingye, the Chinese steel giant who owns British Steel. The deal hopes to convince British Steel to keep its two blast furnaces open until the construction of its planned electric arc furnaces. This deal could see HM Government spend up to £2 billion. A government source has said they are baffled that Jingye has not yet accepted Reynolds’ proposal, and concludes that the reasons must be geopolitical.
3.3 New wave of HM Government sanctions against Russia targets PRC entities
The slew of sanctions announced on 9th November aim to cripple Russia’s military machine, and the statement issued by the Government explicitly mentions the PRC as one of the countries helping Putin’s war efforts by supplying components for drones.
4.1 The UK must stop ‘whitewashing’ criminals like Jimmy Lai and ‘interfering’ in Hong Kong
The Commissioner’s Office in Hong Kong (the regional arm of the PRC’s Foreign Ministry) has strongly opposed Lammy’s meeting with Sebastian Lai, the son of pro-democracy activist and British citizen Jimmy Lai, who has been detained in Hong Kong since December 2020. Lammy met Sebastian Lai in London last week.
In typical CCP language, it has called HM Government ‘hypocritical’, ‘meddlesome’ and ‘interfering’ in its support for the release of Jimmy Lai. What’s more interfering than imprisoning people for expressing their views on the government (and breaking international treaties)?
4.2 Lima’s participation in the Belt and Road Initiative (BRI) will benefit the world, says Beijing
Following a meeting on BRI outcomes in Peru, the CCP is pushing the narrative that the global connectivity project will benefit the world. This piece in Qiushi Theory cites the megaport construction in Chancay, which Observing China covered on 31st October. Lima was strong-armed into accepting a clause which cedes all executive control of the port to the PRC (and, legally, the PLA). Qiushi Theory claims that the port will ‘effectively promote the development of Peru’s science and technology and industrialisation’. How will this happen, exactly, when the PRC does not easily share its technology with other countries?
Gray Sergeant, Research Fellow in the Indo-Pacific at the Council on Geostrategy, writes:
As the world comes to terms with the result of last week’s presidential election, Taipei is attempting to Trump-proof the US-Taiwan relationship. The plan: buy more American weapons.
This is certainly necessary. Those who rely on the US for their protection, in both Europe and Asia, are going to have to demonstrate that they are taking their own security seriously. Taiwan can take some comfort in the fact that its defence budget has steadily risen since 2017 and now accounts for around 2.5% of Gross Domestic Product (GDP) (more than many NATO countries).
Buying more Patriot missiles and requesting F-35 Lightning II Joint Combat Aircraft from Washington would also certainly appeal to the next president’s transactional instincts. It would also go some way to answering Trump’s demand that Taiwan should pay the US for their protection.
The plan may work. But for many concerned about cross-strait relations this does not feel like enough. Trump’s disregard for liberal democracy (at home as well as abroad) does not make him a natural friend to tyrant-threatened free peoples.
All eyes have, therefore, been on the next president’s Cabinet picks. Here, some comfort can be found in the selection of the next National Security Advisor and the politician tipped to be Secretary of State. Mike Waltz and Marco Rubio instinctively understand why Taiwan matters and have both previously advocated giving greater support to Taipei too.
Of course, it is important to remember that they will only be advisors. At the end of the day, it is the man in the White House that matters. Also worth bearing in mind is that longevity in the Trump administration is far from guaranteed. Rex Tillerson, Trump’s first Secretary of State, survived just over a year, while during his first term, the former president had four National Security Advisors.
Despite the worrisome bonding of Putin and Xi, and ongoing assertiveness by the PRC both diplomatically and territorially, we may be in store for some positive outcomes by next week’s newsletter. At this year’s Conference of the Parties (COP) at the United Nations Climate Convention (UNFCCC), Ding Xuexiang, Vice Premier of the PRC, and Xi’s representative at the summit, hinted that Beijing may set more ambitious climate targets than in previous years. But then again, the PRC has a long way to go: it is by far the world’s largest polluter and Chinese C02 emissions per capita continue to rise fast.
Subscribe to Observing China to read our analysis of what the PRC’s climate pledges will mean for the world and for Britain.
Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk
If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.