Some remain peeved at Reeves’ trip to China
Shein prepares for London IPO; Beijing calls Africa the ‘cornerstone’ of its foreign policy;
Observing China is the essential newsletter to understand the UK-PRC relationship, explained in the context of global developments.
Like many leaders around the world, Rachel Reeves, Chancellor of the Exchequer, has started the new year rearing to go. Her trip to the People’s Republic of China (PRC) last week was met with criticism due to recent market turmoil in the United Kingdom (UK) and human rights concerns (analysed in greater detail below in our London to Beijing section), as well as the needy and desperate tone of an article she penned for The Times prior to the trip, where she declared that ‘choosing not to engage with China is no choice at all.’
Reeves’ trip to the PRC saw the resumption of the Economic and Financial Dialogue (EFD) between the two countries after a six-year hiatus. The EFD meeting will officiate formal economic and trade ties, and the outcome of this year’s one sees a very large focus on cooperation in financial services and regulation, with some focus on trade in various goods (vaccines, pet food, and pork).
But the lack of clarity around the focus of the EFD raises questions: why is there such a focus on finance? Is it perhaps because this is considered a safer option for national security than science and technology? If so, why hasn’t this been explicitly mentioned or communicated to the public?
What His Majesty’s (HM) Government and the British public needs is evidence of a clear strategy; to know that UK politicians are acting with a well thought out, long-term, purpose. It is peculiar that this visit comes before the publication of the Government’s ‘China audit’.
Reeves says that ‘the previous government failed to realise the value of engagement with China’. This is a hard sell; recall that the so-called ‘Golden Era’ of UK-PRC relations happened under the previous Conservative government, which was criticised for precisely too much engagement with Beijing. Her choice of words ‘choosing not to engage with China’ is polarising: few who have criticised her visit are saying that the UK should not engage with the PRC; they simply encourage caution.
We need reassurance that HM Government’s dealings with the PRC are borne of a thorough strategy and not simply by attempting to be different to the previous government (however true this may be).
Reeves is not the only one starting off 2025 on a new path. This year, Observing China will continue to expand to offer our readership even more comprehensive analysis on the PRC and its relations with the UK. This weekly newsletter, from now on entitled the ‘Tracker’, will be published alongside weekly ‘Thinker’ and ‘Investigator’ pieces – opinion and analysis – articles by leading experts on the PRC, covering its foreign policy, economy and technological developments. Every two weeks we will publish the ‘Tangram’, where we ask specialists in different fields to answer a question relating to the PRC’s development. The ‘Taiwan Take’ by Gray Sergeant will now be published every three weeks as a piece of greater depth to give readers a more holistic understanding of cross-strait developments.
Welcome back to Observing China!
1.1 Xi to send high-level envoy to Trump’s inauguration
Analysts say that Beijing is very eager to start relations with Donald Trump, President-elect of the United States (US), on the right foot, for fear of further economic fallout in bilateral trade that Trump has already promised. As such, Xi Jinping, General Secretary of the Chinese Communist Party (CCP), will send a high-level envoy in his place to attend the inauguration ceremony. But members of the president-elect’s team have warned that the envoy should be as high-level as possible to avoid upsetting Trump.
1.2 Trump requests more time on TikTok
ByteDance, the Chinese parent company of TikTok, is required to sell TikTok or be banned in the US. The deadline is 19th January 2025, the eve of Trump’s inauguration. But the president-elect has now requested an extension of the deadline so that he can pursue a ‘political resolution’ to the issue. The brief submitted by Trump points to his prolific use of the social media platform, where he has amassed a large number of followers.
1.3 Nigeria and the PRC forge closer ties
Wang Yi, Minister of Foreign Affairs of the PRC, recently embarked on a four-nation tour in Africa, comprising Chad, Nigeria, the Republic of Congo and Namibia. While in Nigeria, Wang stated that Beijing will support Abuja’s request to join the BRICS and reiterated the CCP’s commitment to provide the continent with US$50 billion (£41.2 billion) in aid over three years.
As Nigeria faces its most severe cost-of-living crisis in years, the two nations pledged closer cooperation on clean energy, finance, security and trade.
1.4 Taiwan suspects PRC-linked ship severed undersea data cable
On 3rd January, Taiwan’s main telecommunications provider reported that the Trans-Pacific Express Cable had been damaged. The vessel intercepted by the Taiwanese Coast Guard was registered under Cameroon and Tanzania. The shipowner company has a Chinese national as a director, who has denied any claims that the cable was severed deliberately. The Taiwanese Coast Guard Administration stated that ‘the possibility of a Chinese flag-of-convenience ship engaging in grey zone harassment cannot be ruled out.’
1.5 US Treasury maintains cyberattack originated from Beijing
The US Treasury maintains that the cyberattack it experienced last month through a third-party cybersecurity vendor was perpetrated by Beijing. As a result, the US Government has placed sanctions on Integrity Technology Group, the PRC cybersecurity firm, accused of supporting the hacking group Flax Typhoon in similar campaigns.
1.6 Beijing calls Washington’s potential banning of Chinese drones ‘irresponsible’
In the latest instalment of the PRC-US trade conflict, on 2nd January, Washington announced it was considering new regulations to restrict or ban drones made in the PRC from entering the US, citing national security concerns.
1.7 Tencent and battery maker CATL to be closely monitored by US Government
The US Department of Defence annually updates a list of companies it considers to work with the People’s Liberation Army (PLA), the PRC’s armed forces. While the list does not constitute a ban of the companies’ operations in the US, it can increase pressure on the Treasury Department to sanction the listed firms. The list forms part of Washington’s efforts to limit what it sees as Beijing’s aims to boost its military power by using technology from Chinese firms, universities and research programmes.
1.8 Prison sentence for documentary filmmaker on Covid-19 protests in the PRC
In late 2022, nationwide protests swept across the PRC in response to Beijing’s handling of the Covid-19 restrictions. Known as the ‘White Paper’ protests, they included rare criticism of the CCP and Xi himself. Some analysts believe that these protests formed part of Beijing’s lifting of restrictions shortly after. Chen Pinlin, a Chinese film director, released a documentary on these protests a year after their anniversary in November 2023, and was subsequently detained by police.
1.9 Protests in PRC over student death reach a violent end
On 2nd January, a teenage student in north-west Shaanxi province was found dead on school grounds. Authorities stated that he fell to his death, but the student’s friends and family do not believe this to be true. Protests broke out over the authorities reticence to allow further investigation, and demonstrations were brought to a violent end by police.
Public demonstrations are allowed in the PRC, but the state is particularly cautious about protests since the ‘White Paper’ protests mentioned above against the CCP’s handling of the Covid-19 pandemic.
2.1 A commentary by the Institute for Security and Development Policy considers how the recent improvement in relations between Beijing and New Delhi might be compromised by the incoming Trump administration.
2.2 A piece by the Central European Institute of Asian Studies looks at the various ways that the European Union (EU) can play its part in deterring an invasion of Taiwan by the PRC.
2.3 A topical analysis by the Africa Centre for Strategic Studies on what to expect from the burgeoning relations between the PRC and Africa in 2025.
3.1 Shein representative falters over Xinjiang cotton question in UK parliament
Shein is preparing for a potential £50 billion listing on the London Stock Exchange in the first business quarter of this year. If it obtains regulatory approval, it could be listed as early as the end of April.
On 7th January, the Business and Trade Select Committee questioned a representative of Shein about the provenance of its cotton, and found the representative’s answers to be evasive.
In 2023, Shein was hopeful it could list on US stock exchanges, but after regulators demanded evidence that its products were free from forced labour emanating in the Xinjiang region, the e-commerce giant diverted its efforts for an initial public offering (IPO) to the UK.
3.2 Minister defends Chancellor’s trip to the PRC
Catherine West, Minister for the Indo-Pacific, rejected calls from parliamentarians to cancel Reeves’ trip to Beijing aimed to boost trade and economic cooperation.
A number of UK parliamentarians from various political parties called for Reeves’ trip to be cancelled after Hong Kong issued arrest warrants last month for pro-democracy activists, several of whom fled to the UK and still reside in the country.
4.1 Last year, Beijing hosted its biggest diplomatic event in recent years – the 2024 Forum on China-Africa Cooperation (FOCAC) Summit. The Summit was entitled ‘Joining hands to promote modernisation and build a high-level Chinese-African community of destiny,’ and aims to increase the PRC’s presence in African countries overlooked by the US and the UK in recent years.
Between 5th and 11th January, Wang visited Chad, the Republic of the Congo, Namibia, and Nigeria. According to Xinhua news agency, the PRC’s ‘enduring solidarity and cooperation with Africa, is the cornerstone of China’s foreign policy’.
The Republic of Congo, a co-chair of last year’s FOCAC summit, has pledged to help execute the agreed outcomes from 2024. This includes cooperating on large-scale infrastructure projects under the Belt and Road Initiative (BRI), and learning from global initiatives put out by Beijing which seek to impart the PRC’s governance model.
4.2 When looking back at the previous year, in his New Year’s Eve message to the Chinese people, Xi made proud proclamations of CCP achievements and issued some stern statements about the road ahead. In 2024, the PLA Navy (PLAN) and Air Force celebrated the 75th anniversary of their establishment; and the PRC, according to Xi, contributed ‘greatly to the maintenance of world peace and stability.’ This would be news to Ukraine, which has looked on as Russia has received support from the PRC.
It would also be news to Taiwan, which reported record cyberattacks and military drills from the PRC in 2024. The proclamation of being a peaceful nation is particularly incongruous with the ominous words that followed in Xi’s message regarding Taiwan: ‘We Chinese on both sides of the Taiwan Strait belong to one and the same family. No one can ever sever the bond of kinship between us, and no one can ever stop China’s reunification’.
On New Year’s Eve, Xi and Putin exchanged messages of New Year’s greetings. Russia was the only country which Xi engaged with to mark the new year, where the two leaders reflected on how far their bilateral relations progressed in the previous 12 months.
2024 marked 75 years of diplomatic ties between the two countries, and Xi said to Putin that the PRC and Russia will ‘always move forward hand in hand along the right path of non-alliance, non-confrontation, and not targeting any third party.’
How will Reeves navigate the ever-deepening relationship between the PRC and Russia? How will she counter the criticism over pursuing closer ties with Beijing, when Xi is so effusive about the benefits his friendship with Putin brings to his people (and, to his view, the world)?
Stay tuned to Observing China to find out.
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Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk
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