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21. Money Alone Is Not Enough: The Future Of The China-Argentina Relationship

Author:
Román D. Ortiz
Publication Date:
11-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Observers assessed the outcome of the first round of Argentina’s presidential elections held on October 22 as good news for the Chinese government (VOA, October 26). Against the odds, Sergio Massa, the Peronist candidate and current minister of economy, emerged on top, despite his overseeing an annual inflation rate of almost 140 percent. Meanwhile, Javier Milei, the libertarian opposition candidate, took the second place (Yahoo Noticias, October 23). These two politicians will compete for the presidency in the second round of the election scheduled for November 19. At first glance, the victory of Massa should be an encouraging sign for the People’s Republic of China (PRC) since it keeps open the possibility that the China-friendly Peronist party remains in government. However, a more granular analysis suggests two alternative outcomes: First, Milei is likely to be the eventual winner after the second round of voting, which would make the new occupant of the Casa Rosada (the Argentinian presidential palace) a politician who has called the PRC an “assassin” and who plans to freeze relations with Beijing. Second, if Massa wins the presidency, his more moderate Peronism is far from the Third-World foreign policy promoted by the outgoing president, Alberto Fernandez, and his vice-president and former president, Cristina Fernandez. Thus, regardless of the outcome of the presidential election, Beijing’s desires to increase political influence over Buenos Aires, which have focused particularly on its defense policy, are likely to be curtailed. A decrease in political influence with Buenos Aires would deal a serious blow to the Chinese strategy in Latin America, in which Argentina plays a critical role. Argentina is the only large country in the region to join the Belt and Road Initiative (BRI). It also exports food, minerals, and oil needed by the Chinese industrial sector. Argentina’s expansive territory represents a natural platform to project power within South America and to the South Atlantic. Buenos Aires’s geopolitics makes it particularly attractive for Beijing, which is exploring opportunities to secure rights for a naval base on the west coast of Africa in order to gain access to the Atlantic. Argentina also forms a key part of PRC efforts to consolidate its hegemony over the Global South. Specifically, the PRC views Argentina as a counterbalance to Brazilian regional hegemony, which motivated China’s interest in Argentina joining the BRICS grouping of countries, against Brazilian opposition.
Topic:
Foreign Policy, Bilateral Relations, Belt and Road Initiative (BRI), and Industry
Political Geography:
China, Asia, Argentina, and South America

22. Hong Kong: The Keystone in China’s Economic Statecraft

Author:
Sunny Cheung
Publication Date:
10-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
The recent decision by Hong Kong to join China in banning Japanese seafood took many observers by surprise (Reuters, August 23). At first glance, the ban seemed an overblown reaction to Japan’s handling of nuclear wastewater, which many international bodies have deemed safe and compliant with established procedures. And while it is commonly understood that Hong Kong’s government is politically influenced by the Chinese Communist Party (CCP), many still believe in its economic autonomy. Considering the significant economic reliance of Japan on Hong Kong for its seafood trade, among other sectors, the ban startled numerous stakeholders (Nikkei Asia, August 25). However, the move is less shocking when Hong Kong is viewed as an integral cog in China’s economic statecraft machine. Traditionally, Western governments lack strategic foresight regarding Hong Kong’s long-term position. Often, this oversight stems from an inadequate comprehension of Hong Kong’s pivotal financial role relative to China, as well as an underestimation of its potential as a node for strategic leverage, both for and against China. China’s rise as a global superpower is inextricably linked to its adept use of economic statecraft, a fusion of economic might and strategic prowess. Its pressure on South Korea to stop the production of Taiwanese military submarines provides a recent example (Reuters, October 16). Hong Kong is a pulsating metropolis at the heart of this strategy. It not only exemplifies China’s ambitions but also acts as a crucial conduit for realizing them. There are two key strands of Hong Kong’s centrality to Beijing: its function as an economic lifeline to the global financial system and its role in the clandestine acquisition of technology and intellectual assets for China from overseas. The US and its allies must focus more on Beijing’s overt and covert leveraging of Hong Kong and think harder about what the city’s function should be in an era of de-risking, geoeconomic competition, and weaponized interdependence.
Topic:
Economy, Chinese Communist Party (CCP), Statecraft, Regional Politics, and Superpower
Political Geography:
China, Asia, and Hong Kong

23. Chinese National Security Laws Hinder Foreign Companies’ Operations in China

Author:
Martin Purbrick
Publication Date:
10-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Investigations into alleged misconduct and criminality by companies are to be expected, and welcomed, in any country. However, the problems facing foreign companies in the People’s Republic of China (PRC) depart from normal legal checks and balances. The lack of separation between the judiciary and the state, and the uncertainty around China’s interpretation of the “rule of law,” is a risk factor for companies doing business there (See: China Brief, September 8). In addition, “state secrets” in the PRC are defined widely in relation to national interest. Consequently, a foreign company can inadvertently breach the law by obtaining and using commercial data. This week the US Department of Commerce’s Bureau of Industry and Security (BIS) announced updated export controls on advanced computing semiconductors, semiconductor manufacturing equipment, and supercomputing items to the PRC (BIS, October 17). Foreign companies doing business in the PRC are likely to face continued uncertainty as a consequence. The response from the PRC was swift, stating that the United States has constantly “overstretched the concept of national security” and resorted to “unilateral bullying” (China Daily, October 18), which suggests that there is a risk the PRC will take retaliatory measures against foreign companies. Western companies involved in the PRC have long understood that when investing in China they must lose a little bit of money in the short term to win a lot of money in the long term. Doing business in China has always been complex, but with the continued expansive approach to national security, it may now be increasingly untenable (See: China Brief, September 22). After three decades of huge investment in the PRC by international companies, there are growing concerns that the growing emphasis on national security is harming the confidence of overseas investors. As the European Union Chamber of Commerce in China reports, “the politicisation of business, and ambiguous laws and regulations…increases risk for companies operating in Chinas” (EU Chamber, September 20). In recent weeks, this ambiguity has been exacerbated by the growing number of “exit bans,” whereby PRC authorities forbid specific business executives at international companies, such as Kroll and Nomura, from leaving the country (Stratfor, September 29).
Topic:
National Security, Law, and Business
Political Geography:
China and Asia

24. Characterizing China’s Rule of Law

Author:
Ben Lowsen
Publication Date:
09-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Chinese President Xi Jinping is working in earnest to develop for China what his government calls “rule by law” (法治). It is sometimes translated into English as “rule of law,” though this is misleading, as Chinese law cannot restrict arbitrary exercise of power at the highest levels: the Party leads everything. As such, an awareness of the term’s precise meaning in the PRC’s legal-political context is crucial for understanding Xi’s intent. The Chinese president has stated that “the rule of law is an important component of the country’s core competitiveness” (People’s Daily, November 22, 2020). In light of this, the recently promulgated Foreign Relations Law (对外关系法), which emphasizes China’s competitiveness, provides an opportunity to interrogate Xi’s conception of the rule of law. [1] The Foreign Relations Law (henceforth, the Law) is timely. The head of the powerful Legislative Affairs Committee said in an interview that out of the PRC’s 297 national laws, 52 were dedicated to foreign relations and 150 more had provisions relating to foreign relations. [2] The Law is therefore an important addition, “consolidating and describing the major policies and principles of China’s foreign affairs,” in the words of current (and former) foreign minister Wang Yi. [3] Moreover, it comes at a moment in which China is at once increasingly emboldened on the international stage, and whose relations with many developed countries are increasingly fraught. Support from abroad could be helpful for China as it attempts to navigate out of a mismanaged end to the Covid-19 pandemic, but there is little to reassure foreign partners that their investments in the country will be protected by its laws.
Topic:
Foreign Policy, Governance, and Rule of Law
Political Geography:
China and Asia

25. Coalitions of the Week: BRICS, ASEAN, the G20

Author:
Willy Wo-Lap Lam
Publication Date:
09-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Supreme leader Xi Jinping’s failure to attend the G20 summit in New Delhi this weekend (September 9-10) — thus nullifying the possibility of a meeting with top Western leaders including American counterpart President Joe Biden — is symptomatic of the isolation that China is facing on the international stage. Instead, Xi is sending Premier Li Qiang, not only to New Delhi but also to a series of meetings between Western and Asian powerhouses, including between the United States, Japan, and the ten members of the Association of Southeast Asian Nations (ASEAN) in Jakarta, Indonesia. ASEAN members seem eager to seize the opportunity to promote free trade and high-tech cooperation with the United States and its Western allies, agreeing this week to inject more funds into projects under the U.S.—ASEAN Comprehensive Strategic Partnership (InvestASEAN.org, September 7; The White House, September 5). By contrast, China’s recent business ties with ASEAN nations has been dominated by a continuous exodus of multinational corporations moving production bases from China and into countries such as Vietnam, Thailand, and Indonesia. Xi’s absence has raised eyebrows, particularly due to the fact that the Chinese Communist Party (CCP) General Secretary has pulled out all the stops when it comes to expanding the People’s Republic of China’s (PRC) clout on the global stage, even while ignoring worsening socio-economic conditions at home, such as rising youth unemployment, declining exports and consumer spending, and disappointing new home sales. Deemed a crypto-Maoist by China’s critics, the CCP chief remains convinced that, in the words of both Mao and himself, “the East is rising and the West is declining,” conditions which would allow the PRC to seize the geopolitical high ground given “opportunities that only come once in a century” (Gov.cn, June 23 ; Xinhua, March 23).
Topic:
International Relations, Diplomacy, G20, Geopolitics, ASEAN, and BRICS
Political Geography:
Asia

26. The Chinese Debate on Economic Reform

Author:
Arran Hope
Publication Date:
09-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
A steady drumbeat of ominous data and troubling commentary on the state of China’s economy has punctuated the summer months. Reports from the commentariat in the anglosphere have provided diagnostic analysis and detailed potential policy solutions that the Chinese government might pursue. However, China’s central decision makers in the Politburo or in the National Development and Reform Commission (NDRC), are more likely to take their cues from internal advisors and domestic experts within the PRC than from those outside. As such, one fruitful exercise is to take the temperature of voices within the system to determine the extent to which their perceptions align or diverge from those in the West, and to ascertain which views carry weight with the final arbiters of economic policy in Beijing. By doing so, analysts outside of China may better comprehend the future (mis)steps that China will take as it struggles to achieve its aim of “basically realizing socialist modernization.” In July, the Chinese government held several meetings and released documents pertaining the economy. On July 24 the Politburo met to discuss the economy as it usually does this time of year. But on the same day, a 17-point plan was issued by the NDRC, following on from a 31-point plan co-issued by the State Council and the Central Committee ten days prior. These send a clear message about the concern in government over China’s straitened circumstances. Indeed, just this week, the NDRC announced a new “private economy development bureau” to further support private industry (NDRC, September 4). The assessment of the situation is put bluntly in the Politburo readout: “the current economic system is facing new challenges… insufficient domestic demand, difficulties in some enterprise’s operations, multiple risks in key areas, and a complex and severe external environment.”
Topic:
Development, Economics, and Reform
Political Geography:
China and Asia

27. A Belt and Road to Nowhere? Italy on the Frontlines of Europe’s Changing Strategy Toward China

Author:
Andrew R. Novo
Publication Date:
08-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
During her tenure as Prime Minister, Giorgia Meloni has been far more active on the international scene than most observers predicted. Within the first ten months of her tenure, she has traveled to capitals across Europe, Asia, and North Africa and has hosted numerous foreign leaders on official visits. In July, Meloni visited Washington, D.C. where she and President Biden affirmed their commitment to deepening collaboration across various areas of shared interests. Meloni’s foreign policy agenda has touched on a range of issues including, but not limited to, European security, migration, energy policy, and international trade. It is on this last issue that Italy’s decision-making might be most impactful. As the Meloni administration reassesses its economic partnerships around the world, Italy’s relations—and by extension the European Union’s (EU) overarching position—towards the People’s Republic of China (PRC) could witness lasting changes. At the heart of the new government’s economic policy lies its choice of whether to withdraw from China’s Belt and Road Initiative (BRI). Meloni—along with many members of her cabinet—have voiced skepticism towards the agreement. As such, everything is on the table in the run-up to the decision at the end of the year.
Topic:
Foreign Policy, Economics, Infrastructure, and Belt and Road Initiative (BRI)
Political Geography:
China, Europe, Asia, and Italy

28. The No Limits Partnership: PRC Weapons Support for Russia

Author:
Martin Purbrick
Publication Date:
08-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Amid the ongoing war in Ukraine, there is growing concern about the possible involvement of the People’s Republic of China (PRC) in supplying Russia with weapons, munitions, and various other technology that could have dual-use applications. Notably, no significant provision of large-scale military hardware from the PRC to Russia is evident, as such equipment would have been easily identified on the battlefield amongst the major equipment losses suffered by Russian forces. There are, however, consistent reports substantiating the claim that Chinese companies are providing military and dual-use equipment to Russia. In the PRC’s political system, this type of transaction would be difficult to conduct without the government’s tacit approval or—at the very least—the Chinese Communist Party (CCP) authorities turning a blind eye. In February 2022, following a meeting ahead of the opening ceremony of the Beijing Winter Olympic Games, Chinese leader Xi Jinping and Russian President Vladimir Putin discussed the dimensions of their two countries’ strategic partnership (Global Times, February 5, 2022). Xi and Putin reiterated that “friendship between the two states has no limits, there are no ‘forbidden’ areas of cooperation, [and the] strengthening of bilateral strategic cooperation is neither aimed against third countries nor affected by the changing international environment and circumstantial changes in third countries” (The Kremlin, February 4, 2022). The closing ceremony for the Beijing Winter Olympics was held on February 20. Four days later, Russia invaded Ukraine. Since then, there has been widespread speculation that the PRC leadership knew about the Russian invasion. Additionally, there have been heightened concerns regarding the extent of Chinese support for Russia since the start of the war in Ukraine. In July, the US Office of the Director of National Intelligence (ODNI) reported on the “Support Provided by the People’s Republic of China to Russia”, with indications of increased Russian reliance on the PRC (ODNI, July 2023). In 2022 total Russian imports from the PRC increased by 13 percent to $76 billion. In the same year, PRC chip exports to Russia increased by 19 percent. Many of these transactions were facilitated by shell companies in Hong Kong acting as agents of secondary sales from international suppliers via the PRC to Russia. The ODNI report stated that “the PRC is providing some dual-use technology that Moscow’s military uses to continue the war in Ukraine, despite an international cordon of sanctions and export controls. The customs records show PRC state-owned defense companies shipping navigation equipment, jamming technology, and fighter jet parts to sanctioned Russian government-owned defense companies” (ODNI, July 2023). French diplomats further corroborated this report, notifying the public of intelligence indicating that the PRC has been supplying Russia with dual-use technologies as well as non-lethal assistance equipment, such as helmets and body armor (SCMP, July 22). When asked if the PRC is assisting Russia’s war efforts in Ukraine, French presidential advisor Emmanuel Bonne responded by saying “there are indications that they are doing things we would prefer them not to do” (SCMP, July 22). The PRC government has emphatically denied allegations that it has provided any weapons or military assistance to Russia. Former PRC Foreign Minister Qin Gang was reported by his own ministry as saying that “China does not sell weapons to parties involved in the Ukraine crisis and prudently handles the export of dual-use items in accordance with laws and regulations. Normal exchanges and cooperation between Chinese and Russian enterprises should not be affected” (PRC Ministry of Foreign Affairs, May 10). The second part of Qin Gang’s statement is significant, as he clearly states that exchanges between Chinese and Russian enterprises—such as commercial ties—are not be impacted by the war in Ukraine. Upon closer examination, his comments appear to suggest that dual-use technologies and equipment could be subject to the PRC government turning a blind eye.
Topic:
Partnerships, Weapons, Drones, and Russia-Ukraine War
Political Geography:
Russia, China, and Asia

29. China’s Floods and Party Priorities

Author:
Arran Hope
Publication Date:
08-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Typhoon Doksuri (杜苏芮) crashed onto the Chinese mainland over Fujian Province on Friday, July 28. From there it pushed northward, where a constellation of meteorological factors led it to slow down over North China, where it unleashed huge volumes of rain over the Beijing-Tianjin-Hebei region. Over 1600 weather stations in Hebei Province, which surrounds Beijing, recorded rainfall in excess of 250 mm across a 72 hour period, with one station in Xingtai City recording a maximum of over 1003 mm. Beijing saw the highest rainfall since its meteorological records began in 1860 (Xinhua, August 9). The storm was the proximate cause for severe flooding. Already by Tuesday, August 1, state media was reporting that 20 people had been killed in the floods, and 127,000 had already been evacuated from the capital (Global Times, August 1). However, the full-scale of the human impact is unlikely to be clarified by the government any time soon: much information about the floods has already been censored or deleted from China’s internet, and official statistics, when they have been released, are almost certainly underplaying the costs. [1] Perhaps most unhelpfully, the website for China’s Ministry of Water Resources, has been inaccessible all week (水利部, Ministry of Water Resources). Nevertheless, drawing on the information that has been forthcoming from China’s central and regional governments, as well as firsthand accounts posting on Chinese social media and Twitter (X), we can make a preliminary assessment of the potential political and economic consequences of this event.
Topic:
Natural Disasters, Crisis Management, and Flood
Political Geography:
China and Asia

30. The Demise of Diplomatic Ambiguity: Parsing South Korea’s Estrangement From China

Author:
Matthew Fulco
Publication Date:
08-2023
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
In July, the US Ohio-class ballistic-missile submarine (SSBN) visited South Korea for the first time since 1981. Not one, but two of the 560-foot-long warships—which carried a payload of 24 long-range Trident ballistic missiles—surfaced in South Korean waters (Korea JoongAn Daily, July 24, 2023). From Washington and Seoul’s perspective, the SSBN deployment was a pointed reminder to the mercurial North Korean regime to exercise restraint, but the symbolism of the SSBN visit was not lost on China—Pyongyang’s closest ally. For all its military modernization efforts, Beijing has no effective defense against the Ohio-class sub. That South Korea would support the deployment of the SSBNs to its territory illustrates both its concern about rising North Korean brinkmanship and newfound willingness to risk Beijing’s ire. Indeed, after three decades of stable ties anchored in economic interdependence, major changes are afoot in the South Korea-China relationship. Compared to Japan, which also counts China as its largest trading partner, South Korea has historically been less willing to stand its ground in the face of political pressure from Beijing. On the one hand, Seoul and Beijing have no major territorial disputes, but more importantly, South Korea had previously calculated that its political deference—especially on China’s “core interests” like Taiwan—would encourage Beijing to support denuclearization of the Korean Peninsula, the Republic of Korea’s (ROK) top foreign policy objective. For many years, South Korea handled Beijing with kid gloves, irrespective of who was in the Blue House. While the left-leaning Democratic Party of Korea (DPK) is traditionally more China-friendly, it was the conservative President Park Geun-hye who attended China’s jingoistic September 2015 military parade. After a summit between Xi Jinping and Park, both leaders made a commitment to oppose any unilateral actions that could lead to tension on the Korean Peninsula. The following day, President Park joined Xi and Russian President Vladimir Putin in China’s military parade. South Korea was the only US ally to attend the event (The Korea Herald, September 3, 2015). Since then, however, the two countries have drifted apart. The catalyst for this change was Seoul’s decision to deploy the THAAD missile defense system in 2017, which China views as a security threat and South Korea deems essential for self-defense. China has repeatedly demanded that South Korea dismantle its THAAD system (Xinhua, September 21, 2017). When those demands failed to bear fruit, it resorted to sanctions against South Korea (The Korea Herald, March 8, 2017). Furthermore, both China’s imposition of a draconian national security law in Hong Kong and its mismanagement of the coronavirus pandemic have hurt its reputation in South Korea (The South China Morning Post, October 20, 2020). It is against this backdrop that the ROK’s anti-China sentiment has surged to an all-time high—a development that will inevitably spill over into Seoul’s foreign policy. According to a 2021 survey conducted by SisaIN, for the first time since the ROK and the PRC normalized relations in 1992, South Koreans view China even more negatively than they do Japan (SisaIN, November 29, 2021). China’s ruling Communist Party seems oblivious to the existential threat that South Korea feels in the face of surging missile tests by North Korea. The JoongAng Daily noted in June that it takes just two minutes for a North Korean missile to hit Seoul. According to the editorial, “South Korea is technically still at war with North Korea. The government and people must not forget that” (Yonhap News Agency, June 1, 2023). Concluding that political appeasement and economic engagement with China have failed to pay off, South Korea is taking two significant steps: strengthening its ties with its top security partner, the US, and mending fences with its former rival, Japan. The implications of Seoul’s estrangement from Beijing could have far-reaching implications for geopolitics in the broader Indo Pacific region.
Topic:
International Relations, Diplomacy, Economics, and Regional Security
Political Geography:
China, Asia, and South Korea