Taiwan trusts Trump’s tenuous support
Chinese tomatoes pummel Italy’s pride; British embassy in Beijing left in tatters
Observing China is the essential newsletter to understand the UK-PRC relationship, explained in the context of global developments.
Well, it has certainly been an eventful week. Following his victory in the United States (US) presidential election, Donald Trump, President Elect of the US, is likely to clash with the similarly fresh faces in His Majesty’s (HM) Government when it comes to defining a strategy on the People’s Republic of China (PRC). Leaders in London, Beijing and Washington, DC are all promising their citizens the same thing; glowing flames of prosperity to light the road out of an economically gloomy few years. But to what extent are they willing to share the flame?
Welcome back to Observing China.
1.1 PRC willing to cooperate with Trump under certain conditions
Mao Ning, Spokeswoman of the Foreign Ministry of the PRC, said on 7th November that Beijing will continue to cooperate with the US, but on its own preconditions. The preconditions and their explanations in real terms are as follows: mutual respect (adhering to Beijing’s territorial claims such as the ‘one-China principle’); win-win cooperation (accepting economic initiatives far more favourable to the PRC but disguised as mutually beneficial, for example mass imports of electric vehicles); and, peaceful coexistence (achievable through adherence to the above).
1.2 Beijing set to launch most aggressive fiscal stimulus package yet
On 4th November, lawmakers in the PRC commenced a week-long session to review what will be the country’s most aggressive fiscal stimulus package since the Covid-19 pandemic. The stimulus began in late September (see 1.6 of this newsletter) with measures to relieve government debt, but analysts say Beijing must now tackle household debt if the government wishes to restore economic confidence.
The US ambassador has decried the two nations’ ‘shameless’ protection of North Korea at the UN from ‘closer scrutiny of its sanctions-violating activities’. Both the PRC and Russia have vetoed the UN’s resolutions to demand an immediate end to the Kremlin’s illegal invasion of Ukraine. Wood’s comments echo the concerns of Andrew Shearer, Director General of Australia’s Office of National Intelligence. Shearer warned of an emerging ‘axis’ of countries supporting Russia (comprising the PRC, Iran, North Korea) which is a threat that the free and open nations can no longer ignore.
1.4 Asian-style North Atlantic Treaty Organisation (NATO) not feasible
The concept was first put forth by Shigeru Ishiba, the newly elected Prime Minister of Japan, prior to his appointment. But Gilberto Teodoro, Secretary of National Defence for the Philippines, stated this is unrealistic as many of the Association of Southeast Asian Nations (ASEAN) hold conflicting alliances with either the PRC or the US. Teodoro says that for now, mere recognition from ASEAN countries that the PRC is ‘overstepping’ in the South China Sea would be a desirable achievement for progress.
1.5 US Space Force warns of PRC’s rapid expansion in space military capabilities
Chance Saltzman, Chief of Space Operations of the US Space Force, warns of the PRC’s rapid development of equipment to conduct warfare in or from space. The People’s Liberation Army (PLA) is developing weapons in multiple categories and at breakneck speed. Saltzman reiterated the need for the US to cooperate with European allies in this domain, too.
1.6 ‘Please, anything but my tomatoes!’ Italians struggle to ketchup with Chinese tomato siege
Italian tomato sauce masters are calling for tariff protection against the PRC’s tomato exports to maintain the ‘dignity’ of their beloved fruit. While Chinese tomatoes are only the country’s 708th biggest export, even a sliver of capacity increase threatens demand for local, more expensive products.
1.7 Brazil third country to pull out of Beijing’s Belt and Road Initiative (BRI)
This will be a blow to Beijing, which designed the BRI with Brazil as a core part of its architecture. Observers believe Brazil is concerned about how the plan might affect relations with the US in the event of a Trump presidency, in addition to a doubt about how beneficial the project would be in real terms. Brazil’s extrication follows that of India and Italy, and casts doubt over the PRC’s primacy in BRICS.
1.8 PRC aims to ‘dominate the sensor space in South China Sea’
Satellite images released by Maxar Technologies show the construction of a new radar said to have counter-stealth capabilities on Triton Island, one of the Paracel islands (which are also claimed by Vietnam). The PLA military instalments on the island have notably increased in the last two years and also possess intelligence-gathering capabilities.
2.1 A piece by the MacDonald-Laurier Institute discusses Beijing’s interference in Canadian federal elections, as well as the collusion of parliamentarians with Chinese Communist Party (CCP) foreign intelligence agencies. Earlier this year, Canada’s National Security and Intelligence Committee of Parliamentarians (NSICOP), an advisory committee to the prime minister, published a report detailing the PRC’s interference in Canada’s democratic process.
3.1 The UK’s shift on PRC relations likely to stir Trump’s displeasure
Nadia Schadlow, Deputy National Security Adviser on Strategy during Trump’s first term, warns that Britain’s divergent approach to the PRC is likely to influence Trump’s own dealings with Britain in his second term.
3.2 London and Beijing in tug-of-war over construction of respective embassies
The British Embassy in Beijing direly needs renovation, but the CCP is reportedly blocking its facelift until the UK concedes to the PRC’s construction of a mega-embassy in the historic Royal Mint Court in London.
The CCP is not known for its willingness to compromise, even when the topic regards two completely different issues – in this case, one embassy desperately needs some tender loving care while the other simply wants a bombastic upgrade.
Should Beijing’s mega-embassy go ahead, it will be the country’s largest in Europe and nearly double the size of the one in Washington.
A welcome move by HM Government made on the grounds of national security concerns. The semiconductor technology and related intellectual property developed at the Scotland-based chip company was at high risk of being transferred back to the PRC for potentially harmful uses.
4.1 British businessman eulogises UK-PRC brotherly bond in Beijing publication
John McLean OBE, Chair of the China UK Business Development Centre, has written in the CCP publication China Daily about how ‘life changed’ after Sir Keir Starmer became prime minister. McLean’s dramatic opening words are attributed to the series of high-level ministerial meetings that took place between London and Beijing following the general election on the 4th July 2024.
Glaring inaccuracies appear in McLean’s praising of HM Government’s enthusiasm to enhance bilateral trade ties. First, his citation of the recent warnings made by Ken McCallum, Director General of MI5 (discussed in our previous newsletter, see 3.2), is so selective that it paints the security chief as praising the PRC:
Director General of MI5 Ken McCallum acknowledged that the economic relationship between the United Kingdom and China supports UK's growth, which in turn underpins UK's security.
While McCallum did truthfully state that bilateral economic ties provide some security (for now), he proceeded to explain that the CCP has attempted to steal the data of thousands of British individuals.
McLean claims that the PRC is ‘leading the world in its use of renewables’. This is not the case, which may be why there is no source provided. It was widely reported that nearly 60% of the PRC’s electricity supply was coal-powered in 2023. The PRC is the global leader for renewable energy manufacturing, not use.
Finally, McLean supports the current government’s discourse for a need of ‘consistent’ relationship with London and Beijing, if British businesses are to remain confident in its leadership’s expressed hopes. Consistency should be the aim of any objective. But is it wise to vow consistency with an authoritarian regime which continues to undergo significant changes in its eradication of civil liberties and militarisation efforts?
A different article by a Chinese journalist in the same publication includes quotes by McLean on a business trip to the PRC in September, with a delegation representing 130 British businesses. McLean states that he ‘converted people to be ambassadors’ for the PRC and criticised Britain’s media for vilifying Beijing. The locals’ hospitable nature and the country’s high-tech infrastructure apparently won the UK cohort over. As if the friendliness of the Chinese people, or their strength in modern development, was ever in doubt.
4.2 Chinese premier says the PRC will continue opening up its economy to fight global ‘protectionism’
Li Qiang, Premier of the PRC, reaffirms Beijing’s commitment to continue ‘opening up’ by upgrading its free trade zones and advancing investment agreements with other countries. The PRC will uphold its promise not only for itself, but to ‘combat rising unilateralism and protectionism globally’.
This is undoubtedly a jibe at the European Union’s (EU) recent tariffs placed on Chinese electric vehicles, and the ongoing US-PRC trade war. Li’s remarks are a thinly veiled attempt to portray Beijing as a beacon of trust and openness in a sea of self-isolating nations. In fact, Xi Jinping, General Secretary of the CCP, avowed to ‘opening up’ and intends ‘to decouple wherever possible, while continuing to benefit from foreign technology and expertise where it is needed and available.’ It is not to welcome foreign businesses with open arms to share profits joyously, and nor is the PRC truthfully against unilateralism – as we can see from its dual circulation strategy.
Gray Sergeant, Research Fellow in the Indo-Pacific at the Council on Geostrategy, writes:
‘China urges Palau to respect sovereignty’ proclaimed China Daily on 5th November, the day of the Palauan election. The irony of this headline, I hope, has not escaped newsletter readers. After all, is it not Beijing who is meddling here in the internal affairs of another country?
The problem, Palau’s relationship with Taiwan. The Melanesian microstate is one of a handful of countries which has formal diplomatic ties with Taipei – a situation which the Ministry of Foreign Affairs of the PRC believes ‘needs to be corrected’.
The PRC has held out economic incentives to encourage this split. Earlier this year, Surangel Whipps Jr., Palau’s current President, warned a US senator that Beijing had ‘already offered to “fill every hotel room” in our tourism-based private sector…and US$20 million a year for a “call centre”’.
Whipps also reported that a major cyberattack against his country took place in March this year which could, he claimed, be traced back to Beijing. Additionally, analysts have documented extensive CCP influence operations in the Pacific Island states in recent years, and they expect these operations to intensify in the lead up to this week’s vote.
There is another irony to all of this. The CCP routinely tells the world that adherence to their ‘One China’ principle is unstoppable. But if this was the case, then presumably diplomats from the PRC could sit back and simply watch the inevitable unfold.
Of course they cannot. Beijing’s ‘One China’ defies reality, an independent Taiwan is a fact. And adherence to the PRC’s principle can only be enforced through bribes or coercion.
Palau, it seems, is not the only one feeling the pressure. Recently, South Africa asked Taiwan to relocate its representative office outside its capital, Pretoria.
PRC efforts to isolate Taiwan are seemingly unstoppable, but their success is not, unless others simply decide to capitulate.
New leaders and alliances have been sworn in. On the 6th November, the upper house of the Russian parliament ratified the most comprehensive military pact with North Korea since the end of the Cold War. What will that mean for the PRC, and its engagement with the Euro Atlantic powers?
What will be the directives of Beijing’s most aggressive stimulus package since the pandemic? And what might the appointment of Priti Patel, new Shadow Foreign Secretary, mean for UK-PRC relations? She has previously expressed concern regarding the risk of espionage via electric cars made in the PRC, but we are likely to soon get a better understanding of her views.
Finally, Taiwan has expressed confidence that the US will continue to aid Taiwan in its self-defence efforts, even under the new president. But under Trump, it could all change by next week’s newsletter.
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.