A weekly bulletin offering news and analysis related to the Middle Kingdom. This week, schools in China put politics first and India’s new ambassador lists his priorities.
Politics & Ideology
Xi Jinping kicked off this week with a speech at a symposium for teachers of ideological and political theory. There were two big points that Xi made. First, “the Party must nurture generations of talent who support the leadership of the CPC and the country’s socialist system.” In order to do this, ideological and political theory courses in primary, secondary and tertiary schools must be upgraded. Second, Xi wants such courses to be focussed on delivering “the country’s mainstream ideology and directly respond to false ideas and thoughts.” Do note that this is a sensitive anniversary year in China, with the centenary of the May Fourth Movement and the 30th anniversary of the Tiananmen protests.
If you’re unclear what political and ideological education entails, here’s Party School’s Cai Zhiqiang’s explanation: “It is an important way to pass down political culture and the great achievements the CPC has made to the young generation to help them clearly understand the CPC’s path and inherit the CPC’s lofty ideals to make contributions to the country as well as the people.” It’s not just loyalty of students that the Party is concerned about. The CPC Central Committee has revised rules for the selection and appointment of Party and government officials. This a revision of the rules issued in 2014. Under the new regulation, political loyalty – or as Xinhua’s report put it, “putting political standards first” — is the key criterion for cadres. Here’s the full regulation in Mandarin. What’s the big concern that the CPC leadership has with regard to cadres? Party theoretician Liu Junxian weighed in on this in a recent piece. He talks about the ideological challenges that China faces from the West, in the form of the ”peaceful evolution” strategy to subvert the socialist system. He then discusses “bad thoughts” that have infiltrated society, such as historical nihilism, liberalism, democratic socialism, consumerism, pan-entertainment, extreme nationalism and “universal values.” It also discusses the role of social media as a challenge for the party in maintaining ideological and narrative control, along with raising concerns about public alienation with party and government.
On Tuesday, Xi headed the seventh meeting of the central committee for deepening overall reform. This is the key body guiding overall reform. Xi stressed on the need to address formalism at the grass-roots level through reforms, i.e., bureaucratic bottlenecks across the system. Eight documents, covering a range of issues such as western region development, building oil and gas pipelines (a new national pipeline company will be set up), supporting research at universities, improving rural governance and providing a public legal service system, were approved. Interestingly, there was also much emphasis on supporting innovation and integration of artificial intelligence with the real economy.
A day later, PSC member and head of the central leading group on disciplinary inspection, Zhao Leji, addressed the country’s discipline inspectors. Once again the message was clear. Their job entails “enforcing political discipline, addressing the practice of formalities for formalities’ sake and bureaucratism, making political supervision a regular practice, and pushing for the implementation of major decisions and policies of the CPC Central Committee.” Caixin reports that the next round of inspections this time will look into three central government departments and 42 state-owned enterprises under the central government.
II. Xi’s Europe Trip
The Chinese president landed in Rome on Thursday night for a much-anticipated state visit. Xinhua tells us that Italian fighter jets escorted Xi’s aircraft as it entered the country’s airspace. Accompanying Xi is a 200-member-strong Chinese delegation. During his stay, there’s likely to be much pomp and pageantry. There’ll be private tours of historical museums and sites, and Andrea Bocelli will be performing for Xi and his wife Peng Liyuan. Ahead of his arrival, an article by Xi titled A New Chapter of Sino-Italian Friendship was published in the local press. Upon his arrival, Xi said that he hoped this visit would “draw the blueprint for the future development of bilateral relations.”
At the heart of that blueprint is the Belt and Road Initiative. Italy is set to become the first G7 country to sign up to BRI. Earlier this week, Italian Prime Minister Giuseppe Conte backed BRI in an interaction with Chinese media outlets. The policy appears to have the support of a majority of the Italian public according to this Valentina Romei piece in the Financial Times. The article uses to data from different sources to show that Italy lags behind major European states when it comes to trade, investment and connectivity with China. It then quotes a recent survey by EMG Acqua, which found that over half of Italians surveyed saw BRI deals as a “great economic opportunity.” That opportunity could be reflected in the development of “roads, railways, bridges, civil aviation, ports, energy, and telecommunications,” according to a Euractiv report. With regard to ports, the attention is focussed on four destinations, including Genoa, Palermo, Ravenna and Trieste. The last of these is apparently strategically important because it would connect the Mediterranean to landlocked countries such as Austria, Hungary, the Czech Republic, Slovakia and Serbia.
Rome’s decision to sign up to BRI has annoyed Washington. Last week, the White House criticized Italy saying that the deal would “lend legitimacy to China’s infrastructure vanity project.” Also, cooperation in telecommunications could further undermine the Trump administration’s anti-Huawei campaign. Bloomberg reports that in Europe, Italy is at odds with its EU partners – although there are grievances on either side. The report says that the “Rome-Beijing accord is seen in Paris as a breach in what was a united front against China’s pursuit of economic domination.” Xi is to visit Paris after the Italy trip; there he will be meeting with President Emmanuel Macron, who has also invited German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker for talks. This comes as Macron spoke of a “European awakening” ahead of an EU leaders summit in Brussels, which began on Thursday. Reuters reports that the EU is seeking deadlines for China to make good on trade and investment pledges. Politico reports that the EU wants reciprocity from China when it comes to big projects, and in that context, the bloc is expected to push through a law that will restrict the access of Chinese companies to the EU’s €2.4 trillion-per-year public procurement market. Amid all this, the two sides also held the ninth round of the China-EU High-level Strategic Dialogue on Monday. That conversation appeared to be less controversial. Xinhua reports that both sides emphasized the stabilizing role of the China-EU relationship amid a “turbulent international situation.” Also note this statement by EU High Representative for Foreign Affairs and Security Policy, Federica Mogherini: The EU’s new document on policy towards China published last week will not replace the current EU strategic cooperation with China.
III. Misri’s Priorities
India’s new ambassador to China, Vikram Misri, spoke to Global Times this week in what is a rather candid interview. Misri outlined his three priorities, i.e., the economic relationship with China to address the trade deficit (at $58 billion now), increasing people-to-people exchanges and promoting cooperation between India and China in regional and global affairs – such as climate change, counter-terrorism, energy security, trade, etc. On the specific question on the possibility of an Indian delegation attending the Belt and Road Forum, he was categorical in arguing that “no country can participate in an initiative that ignores its core concerns on sovereignty and territorial integrity.” On trade and investment, he said that: “There has been some progress in this regard and market access has been granted to some Indian agricultural products, even though we still need to translate this market access into actual exports.” On investments, he said: “We would also like to see more Chinese investment in infrastructure, such as roads and railways, industrial parks and in the food processing sector,” along with the hospitality sector.
Across in New Delhi, Chinese ambassador to India Luo Zhaohui spoke to ANI about the Masood Azhar issue, saying: “we fully understand and we fully believe this matter. We understand India’s concerns and are optimistic this matter will be resolved…This matter (of putting Masood Azhar on UNSC 1267 sanctions committee list) will be resolved; this is only a technical hold which means there is time for continued consultations. It will be resolved, believe me.” The reaction to Beijing’s technical hold continues to simmer in India. While Home Minister Rajnath Singh was rather sanguine about the need for India to understand China’s position, Reuters reports that hundreds of traders burned Chinese made laptops, mobile phones, computers, fax machines and toys on Tuesday, urging the government to raise import taxes on them to protest against China’s trade and foreign policies. Meanwhile, it does appear that the US is continuing to put pressure on China to act on the Azhar issue. For more on this, check out this conversation as The Hindu’s Suhasini Haidar talks to Alka Acharya and Jabin Jacob.
Finally, two other interesting India-China stories this week. First, PTI reports that India has decided to post Customs intelligence officers in China in its effort to check black money, trade-based money laundering and other financial frauds. Two posts of the Customs Overseas Intelligence Network have been created in the Indian Embassy in Beijing and in the Consulate General of India in Guangzhou. Second, India’s growing automobile market is increasingly becoming an important space for Chinese products. India already reportedly imports 10 times more auto components from China than it exports. FY 2018 saw Chinese exports to India hitting the $4.3 billion mark. Chinese exports to India are driven mainly by the electronic components in vehicles, which will be used in the impending launch of a slew of new electric vehicles.
IV. Trade War Watch
Xinhua reports that China and the US will be holding two more rounds of trade talks over the next few weeks. The first of these will be in Beijing on March 28 to 29. That will be followed by another round in Washington. Meanwhile, CNBC reports that the Trump administration continues to be divided on what a final deal would look like. The report says that “U.S. officials seeking a China trade deal are focused on long-term changes to that nation’s economy. But President Donald Trump is set on reducing the trade deficit, and is pushing his negotiators to get China to agree to purchase more goods.” Trump apparently wants China to double or triple its offer of purchasing up to $1.2 trillion in U.S. energy, agriculture and aircraft products over a period of six years. However, it appears that Beijing is pushing back against Boeing products in the aftermath of the 737 Max scandal.
That’s not the only issue at hand. Bloomberg reports that the talks have become trickier now. Citing unidentified sources it says that Chinese officials have shifted their stance on intellectual-property policies and data protection of pharmaceuticals since they haven’t received assurances from the Trump administration that tariffs imposed on their exports would be lifted. On the contrary, Donald Trump says he’s leaving tariffs in place “for a substantial period of time.” Bloomberg’s report further states that “In recent days, USTR has sent comments to its Chinese counterparts seeking to address concerns with language in China’s revised offer on intellectual-property protection, according to one person briefed on the discussions.”
V. Defending Xinjiang Policy
The Chinese government this week issued a white paper on terrorism, extremism and human rights in Xinjiang. The paper is divided into seven sections.
- It begins by claiming that Xinjiang first became part of Chinese territory in 60 BC, although linkages between the Western Regions and Central Plains date back to the pre-Qin period. It also talks about the origins of the Uygur ethnic group, claiming that it “came into being in the long process of migration and ethnic integration; they are not descendants of the Turks.”
- The next two sections present the government’s view about the historical problem of terrorism and extremism in the region, giving a breakdown of major attacks.
- The fourth and fifth sections discuss how the Chinese government’s policy in Xinjiang is “law-based.” Various regulations that form the basis of the effort to “contain and combat terrorism and extremism” are listed. The key argument is that the overall policy is based on the rule of law and “strikes the right balance between compassion and severity.” In terms of other data, the paper claims that “since 2014, Xinjiang has destroyed 1,588 violent and terrorist gangs, arrested 12,995 terrorists, seized 2,052 explosive devices, punished 30,645 people for 4,858 illegal religious activities, and confiscated 345,229 copies of illegal religious materials.” However, there is no number regarding how many people are currently detained in the so-called re-education centers.
- The seventh section discusses China’s contribution to the international fight against terrorism. It says China “advocates comprehensive measures to address both the symptoms and the root causes, with the dual purposes of striking at terrorist activities and eliminating poverty.” The section further states that “Xinjiang has contributed to the international fight on terrorism through effective counterterrorism and de-radicalization campaigns.” That’s a line that state media has been pushing too.
- The concluding section offers this ominous statement: “China has made significant progress in its counterterrorism and de-radicalization efforts in Xinjiang. However, the three forces of terrorism, separatism and extremism are not gone; their influence can still be felt…We still face a severe and complex situation…Focusing on social stability and lasting peace, Xinjiang will continue to fight terrorism in accordance with the law…”
The World Uyghur Congress responded to the white paper in a detailed tweet thread. “Accusations named in the white paper are hostile in nature and lack transparency. Uighurs suppressed and arrested by the local Chinese government there have never been legally convicted through due process before they are identified as terrorists,” said Dilxat Raxit, WUC spokesperson.
Meanwhile, Reuters reports that the Chinese government is planning on inviting Beijing-based European diplomats to visit Xinjiang. The report says that so far, this is sort of an informal sounding out of diplomats as opposed to a formal invite; so the details on the proposed visit are sketchy. Amid all the criticism by Western governments of the PRC’s policies in Xinjiang, this piece by Lindsay Gorman and Matt Schrader offers insight into how Western firms are “lending expertise, reputational credence, and even technology to Chinese surveillance companies, wittingly or otherwise.” The authors argue that “foreign firms, eager to access Chinese funding and data, have rushed into partnerships without heed to the ways the technologies they empower are being used in Xinjiang and elsewhere.”
VI. Pakistan-China Dialogue
The Chinese and Pakistani foreign ministers met in Beijing for the first strategic dialogue. The talks covered a range of issues, from tensions with India, CPEC and the Afghan peace talks. The two foreign ministers, on behalf of their states, reaffirmed support for one another on “all core issues of national interest,” says this Dawn report. Following talks, the two foreign ministers attended a press conference. Pakistan’s Shah Mahmood Qureshi told the media that the world should make a “new assessment” of the situation in Kashmir, adding that he had briefed Wang Yi about “the rapidly deteriorating situation on the Indian side of the Kashmir.” Wang, for his part, didn’t mention Kashmir. The Hindu’s Atul Aneja reports that the Chinese side reinforced its stated position that Beijing firmly upheld the maintenance of status quo along the borders. However, Wang did add that: “No matter how things change in the world and the region, China will firmly support Pakistan in upholding its independence and territorial integrity and dignity.” Wang also added that China calls “on the international community to adopt a fair perspective of the commitments made by Pakistan to combat terrorism over the years.”
Beyond India and terrorism, CPEC was the big focus for the two sides. The Chinese foreign ministry’s readout after the meeting focussed on CPEC. The two big points that the statement makes tell us about the key sources of friction. First, it claims CPEC as an initiative for the whole country, rather than being confined to some specific regions. Second, it argues that CPEC has not increased the burden of the Pakistani side, although the State Bank of Pakistan is set to receive a new Chinese loan of $2.1 billion on March 25.. Third, Beijing is still very wary of third-party participation. The statement reads: “The Chinese side welcomes these cooperation intentions as long as they are conducive to the development of Pakistan. Of course, these should be consulted by both China and Pakistan.”
Also this week, representatives of major Pakistani political parties and the Chinese government met at the First Meeting of CPEC Political Parties Joint Consultation Mechanism. The meeting ended with the adoption of the “Beijing Declaration.” The declaration says that CPEC has “contributed positively to peace, stability and prosperity of the region.” It further states that all Pakistani political parties pledge to “undertake to shoulder the due responsibilities as political parties towards creating favourable conditions for the building of the CPEC through providing effective political guidance and forging stronger consensus among different sectors of society in both countries.”
Finally, Chinese military hardware will be on display during Pakistan’s National Day parade on March 23. ET reports that besides the J-10 fighter jet, “several other Chinese made defence platform will be at display…The Pakistan Air Force’s JF-17, ZDK-03 early warning aircraft (also developed by China), MBT-2000 main battle tank developed by China North Industries Corporation (Norinco) & designated as Al-Khalid in the Pakistan Army would also be at display at Pak parade.”
VII. Long & Short of It
- The Next Dalai Lama: Speaking to Reuters, the current Dalai Lama took some choice shots at Beijing this week. He said that the Party was “more concern(ed) about the next Dalai Lama” that he was. He also added that his next incarnation could possibly be found in India. “In future, in case you see two Dalai Lamas come, one from here, in free country, one chosen by Chinese, then nobody will trust, nobody will respect (the one chosen by China). So that’s an additional problem for the Chinese! It’s possible, it can happen,” he said. Also important to note that he has ruled out the possibility of going to China. Responding to these remarks, the Chinese foreign ministry spokesperson said, “the reincarnation system for the living Buddhas should follow Chinese laws and regulations, religious rituals and conventions.” Also, do note this editorial in China Daily. It reiterates the official talking points, but adds: “If his (the Dalai Lama’s) intention now is to leave behind him a problem for the central government, he might want to reconsider. Because there will not be two Dalai Lamas. And no Living Buddha, Dalai Lamas included, can claim legitimacy without the central government’s endorsement.”
- Israel in the Middle: US Secretary of State Mike Pompeo has warned Israel on ties with China. “If certain systems go in certain places then America’s efforts to work alongside you will be more difficult, and in some places we won’t be able to do so…Intelligence sharing might have to be reduced, co-location of security facilities might have to be reduced, we want to make sure countries understand this and know the risks,” said Pompeo. Times of Israel reports that earlier in January, a senior US energy official warned that unless Israel implements stringent screening procedures for Chinese investments, intelligence sharing between the two allies could be threatened. In Beijing, the foreign ministry has urged the US to “reject the Cold War mentality.”
For more on the China-Israel relationship, do check out this new Rand report. Here’s a short summary from the report’s key findings sections: “China’s primary objectives in Israel are acquiring advanced technology and utilizing Israel’s location for trade connectivity. It wants to sustain its relationship with Israel while continuing to enjoy good relations with countries in the Arab and Muslim worlds, particularly Iran. Israel seeks to expand its diplomatic and economic ties with the world’s fastest growing major economy and diversify its export markets and sources of investments…The acquisition of Israeli companies and the knowledge generated through academic cooperation could enable China to gain crucial technologies, with insufficient returns for Israel. Chinese installation of and access to cameras, radio, fiber-optics, and cellular networks raise cybersecurity, data privacy, and espionage risks. Chinese involvement in commercial ports adjacent to Israeli naval bases raises security concerns for Israel and possibly the United States.”
- BRI Wrap: China Investment Corporation, the country’s sovereign wealth investment fund, is seeking global partners to finance Belt and Road projects. The fund’s potential shareholders may cover international organizations and countries along the BRI routes, Tu Guangshao, CIC vice-chairman and president, told China Daily. More international cooperation appears to be a concerted line leading into the Belt and Road Forum next month. For instance, Zhou Xiaofei, deputy secretary general of the NDRC, was quoted this week as saying that China wants to combine its manufacturing and construction know-how with the advanced technology of Western firms on the global trade-and-infrastructure program. “The Belt and Road Initiative is not a private path of one party, but an avenue of sunshine for everyone to go forward hand in hand…China is not singing solo, but in a chorus of countries along the Belt and Road,” Zhou said. Meanwhile, the Kenyan government is reportedly negotiating an almost $4 billion loan with China to complete the third phase of its standard gauge railway. On the other hand, Malaysia’s Mahathir Mohamad says that negotiations on the price of the ECRL project are unlikely to conclude before his visit to Beijing for next month’s Belt and Road Forum. Kuala Lumpur would clearly like the project the go ahead, but wants the pricing to be “on an appropriate scale.”
- Huawei’s Gains: This has been a big week for Chinese tech giant Huawei. First, Chinese Foreign Minister Wang Yi hit out at the US for what he called were “groundless accusations for political purposes and attempts to bring down a foreign company.” Second, founder Ren Zhengfei confirmed that the company’s revenue climbed 36% in January and February, despite all the controversies around it. Third, data shows that between 2013 and 2018, Huawei’s global telecom market share has grown by 8 percentage points. It currently leads the pack with 28.6% of the global market. Fourth, Germany started auctioning off its spectrum licenses for 5G on Tuesday, with Chancellor Angela Merkel saying that “Our approach is not to simply exclude one company or one actor…but rather we have requirements of the competitors for this 5G technology.” In India, Huawei CEO Jay Chen says that it is fully prepared to bring 5G to India market and can do so in a matter of 20 days once given the green light. The only blip this week was Denmark’s decision to award Sweden’s Ericsson 5G contracts as opposed to Huawei. One other related story this week is regarding remarks by AT&T Chief Executive Randall Stephenson accusing Huawei of making it difficult for European carriers to drop the company from its supply chain. “If you have deployed Huawei as your 4G network, Huawei is not allowing interoperability to 5G — meaning if you are 4G, you are stuck with Huawei for 5G,” he said.
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