China review 2023-10. The Biden-Xi meeting

Context: During the meeting between US President Joe Biden and Chinese leader Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum in San Francisco, Xi stated that China “has no plan to surpass or unseat the United States” and he also noted that “the world is big enough to accommodate both China and the United States”. Xi’s messages are in stark contrast to his previous proclamation that “the East is rising and the West is falling.” This signifies that on the diplomatic front, Beijing has recognized the need to de-escalate tensions with the US by easing its stance and projecting a less confrontational and more positive, conciliatory tone.

DOMESTIC POLITICS & FOREIGN AFFAIRS

1. Unpacking the Biden–Xi meeting: will the positive momentum last?

The global coverage in November was extensively dominated by US President Joe Biden and Chinese President Xi Jinping’s first bilateral summit in almost a year on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum in San Francisco. Given the current deterioration cycle of the US–China relations, triggered by China’s aggressive military actions in the Taiwan Strait and the South China Sea, as well as by US restrictions on advanced semiconductor technology, the expectations for the meeting were kept exceedingly low regarding major breakthroughs or changes in the relationship. Nevertheless, the two leaders got what they wanted.

China, firstly, got the US one-China policy reaffirmed as President Biden emphasized that the US one-China policy has not changed and has been consistent. Secondly, China’s willingness to restart a direct dialogue with the US positioned China as a responsible actor on the global stage. This is important for Xi as it bolsters the country’s image in front of the audiences at home, where he is confronting challenges on multiple fronts, including an economic slowdown. Thus, as the concern of kick-starting economic growth has been at the forefront of Xi’s mind, it is not surprising that his trip to the US culminated in his charm offensive towards the US business elite, which welcomed Xi with a standing ovation. US businesses and investors have been wary of the business climate in China due to the sluggish economy and crackdown on the private sectors. The result of this has been a decline in foreign investment in China, which is turning negative this November for the first time in 25 years. Therefore, Xi, plagued with economic troubles, has sought to rekindle businesses’ and investors’ confidence with an overly friendly, heart-warming tone. This goal, however, is actually hardly achievable as scepticism looms large.

Meanwhile, the US has made progress in areas including the resumption of direct high-level military-to-military communication, which was put on hold by China since the former US Speaker of the House, Nancy Pelosi, visited Taiwan in 2022. Furthermore, President Biden called on the President of China to help stem the import of the synthetic drug fentanyl that has killed tens of thousands in the US over the past several years. Another priority for the US was addressing the risks of advanced AI systems and improving AI safety through talks.

Indeed, the two leaders managed to agree on a lot of areas of interest in their discussion. However, the agreements will take a significant political commitment from both sides. Therefore, it remains to be seen how faithfully the agreements will be implemented and whether these agreements can withstand another crisis in the relationship, be it another suspected espionage balloon from China or some other contingency. That said, the key outcome of the superpowers’ meeting is more predictability and stability in their relationship, and this will be enough, at least for now.

2. China’s diplomatic pressure on Estonia

On 3 November, The Estonian Minister of Foreign Affairs Margus Tsahkna released a statement on the People’s Republic of China’s policy, in which it voiced its decision to allow Taiwan to open its representative office in Tallinn. Unsurprisingly, given how sensitive it is for China, the announcement was particularly cautious in reaffirming Estonia’s one-China policy commitment and the willingness to develop exceptionally non-official ties with Taiwan with the potential presence of its office under the name of ‘Taipei’. Shortly after, the Taiwanese Ministry of Foreign Affairs released a statement emphasizing that the plans to open an office in Estonia are still under consideration – a signal that both sides might have disagreements on concrete details, and the naming may likely be one of them. Even though no concrete steps were taken in this regard, China has already begun to exert diplomatic pressure on Estonia. In a meeting with a chairman of the Estonia–China parliamentary group, Chinese ambassador Guo Xiaomei warned that opening the Taipei representative office could lead to her departure from Estonia. The Chinese Foreign Ministry also responded by emphasizing its opposition to “any form of official interaction between the Taiwan region and countries having diplomatic ties with China” and called on Estonia to “stay committed to adhering to the one-China principle”.

3. Arab-Islamic foreign ministers’ visit to China

With the Israel–Palestine conflict still raging, on November 20, Chinese Foreign Minister Wang Yi hosted a delegation of Arab-Islamic foreign ministers from Saudi Arabia, Jordan, Egypt, Indonesia, and Palestine, as well as the Secretary General of the Organisation of Islamic Cooperation. In a multilateral meeting, Wang Yi emphasized the need to maintain close communication among regional and world powers and act urgently to prevent the continuation and the spread of the conflict in Gaza.

China’s interest in building influence in the Middle East is increasingly evident. In the context of the current conflict, Beijing’s activeness is a continuation of the country’s positioning itself as a peacemaker in the Middle East and, on the broader level, promoting its position as a responsible major global power. Notably, its efforts had some significant achievements earlier this year following a Chinese-brokered agreement between Iran and Saudi Arabia.

4. China and Australia moving towards the normalization of relations

On 4 November, amidst warming ties between Australia and China, Australian Prime Minister Anthony Albanese arrived in Beijing for a highly anticipated four-day state visit. It is the first visit to China by the Australian head of government since 2016, and an important sign indicating a potential thawing of bilateral ties. The ties experienced significant turbulences throughout those years, involving Huawei-related disputes, espionage cases, and COVID-19. The Albanese government, which came to power last year, seems to be particularly active in efforts to stabilize the ties. In turn, China has responded positively by lifting most of the economic sanctions imposed in 2020, including a recent announcement about the resumption of Australian hay exports to China.

SECURITY & DEFENCE

1. China’s paranoia over its national security: another threat?

China’s foreign spy agency, the Ministry of State Security (MSS), announced that it found hundreds of “illegal” foreign-affiliated meteorological detection sites nationwide, which are directly funded by overseas governments and transmit meteorological data overseas in real time, posing potential risks to China’s national security. “Meteorological data is an integral element of data security and resource security. It is closely linked to military, food, and ecological security, climate change, and public interests,” the ministry claimed. “The illegal collection and cross-border transmission of meteorological data endangers China’s sovereignty, security, and development interests.”

The crackdown on these “illegal” foreign-affiliated meteorological detections is the latest measure in China’s broader efforts to tighten up the security on cross-border data flows and counter-espionage amid intensifying geopolitical tensions. It reflects Xi Jinping’s quest for “total security”, which is penetrating every conceivable area, including climate science data, and fuels the paranoia in China regarding potential threats to national security.

2. Myanmar’s civil unrest is making China increasingly worried

On 24 November, the Chinese ambassador to Myanmar met with the country’s officials for talks that revolved around recent signs of heightened tensions in their bilateral ties – a highly surprising development, given the extremely close and multidimensional cooperation between the two countries. And it seems that the issues are piling up. Beijing is witnessing a worrying development in the Myanmar region bordering China: an ethnic minority’s armed insurgency against Myanmar’s military junta that seems to be getting increasingly serious. Moreover, China and Myanmar recently initiated a joint crackdown in the region on internet fraud centres operated by gangs after Beijing acknowledged that these centres are exclusively targeting the Chinese.

It is likely that insurgents will continue their resistance in the region and, at the same time, voice their discontent with China due to the fact that since the 2021 coup, China has been the main supporter of the Myanmar military. And the situation is getting increasingly heated: while the Chinese ambassador was having talks with the country’s officials, a Chinese convoy of goods was set on fire shortly after crossing the border to Myanmar.

BUSINESS & TECHNOLOGY

1. China’s role in determining the future of cyberspace

During the opening ceremony of the 2023 World Internet Conference (WIC) Wuzhen Summit, which focuses on China’s internet governance and development, President Xi Jinping called for “building a community with a shared future in cyberspace” to enable the internet to better benefit people all over the world. In his speech, Xi said that in order to promote a more peaceful and secure cyberspace, there is a need to respect “cyber sovereignty” and each country’s ways of internet governance.

It is precisely the doctrine of “cyber sovereignty” that Xi Jinping has long been promoting as a revised global norm. According to James Griffiths, author of the book “The Great Firewall of China”, the doctrine is a vision of total internet control and emanates from a stance of deep suspicion about the internet and its potential risks to state power. As such, the doctrine goes way beyond the rules of any other country in spelling out the government’s right to control the web. Therefore, Xi Jinping’s most recent quest for “cyber sovereignty” undermines global internet freedom and represents a major threat to the existing global web order as we know it.

2. The EU’s struggle to transform hard-toned “de-risking” rhetoric into practice

Ahead of next month’s EU–China summit in Beijing, the EU Commission President Ursula von der Leyen delivered a speech at the event jointly organized by the European Council on Foreign Relations (ECFR) and MERICS, a Berlin-based think tank. Notably, von der Leyen doubled down on the need for the EU to investigate Beijing’s state subsidies into the electric vehicle (EV) industry, warning that as the Chinese economic recovery falters, the EV overcapacity will even worsen and distort the EU market. The investigation, launched in October and strongly criticized by Beijing, is built on the now popularly touted “de-risking” strategy, of which one of the core pillars is defending the EU’s legitimate economic interests.

However, as the Brussels probe into suspected Chinese subsidies in the sector continues, China’s EV exports to the EU hit record levels last month, rising by 32.25% in October versus a year earlier. This greatly hinders and weakens the broader EU efforts to “de-risk” ties with the world’s second-largest economy by countering “unfair” trade practices that distort the EU market.