Chinese Premier Li’s G-20 Debut Eclipsed by Xi in State Media; Alleged Chinese spy was advising MPs on Beijing before arrest
PM Sunak raises concern over interference in UK democracy with China's Li; Meloni Signals to China That Italy Plans to Exit Belt and Road; Discussions on G20 leaders' declaration went on till last min
Welcome to this issue of The China Brief. Today is September 10, 2023. Here at The China Brief, we bring you the latest news on China's politics, economy, and society from global media sources, along with exclusive expert analysis. If you find our content helpful, please subscribe to our newsletter.
Chinese Premier Li’s G-20 Debut Eclipsed by Xi in State Media
Bloomberg
Chinese President Xi Jinping continued to dominate the news agenda in China, despite his absence from the G20 summit in India. The official media provided scant coverage of Premier Li Qiang’s attendance in Xi’s place, with Xi monopolising the first two pages of the People’s Daily on Sunday. The coverage focused on Xi’s recent trip to northeastern Heilongjiang province and the letters he sent out on Saturday. In contrast, Li’s attendance at the G20 summit received little coverage, with the Chinese embassy in India only posting a photo of an airplane to announce his landing. The G20 summit itself also did not receive much play in Chinese official media, with only a one-liner on the summit opening being reported by state broadcaster CCTV.
Alleged Chinese spy was advising MPs on Beijing before arrest
The Sydney Morning Herald
A parliamentary aide who advised two Conservative MPs on China policy has been arrested by British police on suspicion of spying for Beijing. The man, a British citizen who spent time living in China, is alleged to have been turned into a Chinese mole while in China and ordered to infiltrate political circles in the UK. The man advised Conservative MPs Tom Tugendhat and Alicia Kearns, both members of the China Research Group, formed to rival a cross-party grouping of hawkish MPs called the Inter-Parliamentary Alliance on China.
PM Sunak raises concern over interference in UK democracy with China's Li
Reuters
UK Prime Minister Rishi Sunak has expressed concern over potential Chinese interference in Britain's parliamentary democracy during a meeting with Chinese Premier Li Qiang at a G20 summit in India. This comes after the reported arrest of two alleged Chinese spies, one of whom was reportedly a researcher in the British parliament. Sunak stated that he raised his concerns with Premier Li and emphasized that any interference in parliamentary democracy is unacceptable. Despite these concerns, Sunak's Conservative government has sought to engage with China on issues such as climate change while also criticizing it in areas including human rights. The Chinese readout from the meeting did not mention the spying allegation but welcomed increased cooperation between the two countries.
India hands over G20 presidency to Brazil
Reuters
India has formally handed over the presidency of the G20 to Brazil at the closing ceremony of the annual summit. India has held the presidency since December 1, 2021, and will continue to hold the position until November 30, 2022. During the summit, the bloc adopted a consensus declaration on several issues, including food and energy security, climate change, and global debt vulnerabilities. India's Prime Minister, Narendra Modi, proposed a "virtual summit" at the end of November to assess the progress of the suggestions and proposals put forth by members.
President Biden concludes trip to G-20, heads to Vietnam
Washington Post
President Biden met with world leaders at a memorial site for Mahatma Gandhi in New Delhi, India, before departing for Hanoi, Vietnam. At the Gandhi memorial, Biden and other G20 leaders removed their shoes and placed wreaths in honor of the Indian independence leader. Later, Biden arrived in Vietnam for a 24-hour visit. He is scheduled to meet with General Secretary Nguyen Phu Trong and hold an evening news conference. The two leaders are expected to announce a comprehensive strategic partnership that will deepen diplomatic ties between the US and Vietnam. Biden has a long history with Trong, and the partnership is seen as a significant step in the relationship between the two countries. However, human rights groups have criticized the move, calling on the Biden administration to demand concessions from Vietnam on human rights before upgrading diplomatic relations. Biden’s visit to Vietnam is his first as president and comes as the US seeks to strengthen its alliances in the Asia-Pacific region as a counterbalance to China.
India’s G-20 Win Shows US Learning How to Counter China’s Rise
Bloomberg
India, along with the US and Europe, effectively countered China on the world stage at the recent G20 summit, according to Bloomberg. Fellow G20 nations praised India's success in reaching agreement on a joint communique that remained in doubt just days before the summit. The summit's outcome irked Ukraine, which saw the compromise on war language as weaker than that produced at the previous summit in Bali. However, the outcome gave Prime Minister Narendra Modi a win that bolsters India's status as a rising power capable of blunting China's global influence. President Joe Biden hailed India's administration's best hope of isolating China and Russia. The US and India also announced a deal with the European Union, Saudi Arabia, Israel, and other Middle Eastern countries to develop an ambitious rail and maritime network across the region. The US also denied that the deal was meant to counter China's growing influence in the Gulf.
Meloni Signals to China That Italy Plans to Exit Belt and Road
Bloomberg
Italian Prime Minister Giorgia Meloni has privately informed Chinese Premier Li Qiang that Italy plans to withdraw from Chinese President Xi Jinping's Belt and Road Initiative. Despite the withdrawal, Italy aims to maintain friendly relations with Beijing. Italy officially joined the initiative in 2019. Meloni has been hesitant to communicate the decision, fearing potential trade retaliation. The Italian prime minister plans to visit China in the coming months.
The Big Bet on Luxury Stocks Stumbles on Inflation, China Woes
Bloomberg
The luxury sector is experiencing a challenging period, with investors losing faith in the industry. A string of negative economic indicators from China and softer trends in the US have hit luxury stocks hard, with $180bn wiped out since July, leaving gains for the year in the balance. Economic issues in China, where up to 20% of European luxury retailers' sales come from, and soaring bond yields have further damaged the sector. Investors are also concerned about high valuations, which have left little room for disappointment.
Three Chinese cities lift house-buying curbs
Reuters
Last week, three major Chinese cities lifted restrictions on home buying as part of the country's efforts to revive its economy. Dalian and Shenyang in Liaoning province, as well as Nanjing in Jiangsu province, announced that they would remove restrictions on the number of properties residents can buy in most parts of the cities. Nanjing also stated that it would allow people to buy flats without proof of eligibility in four districts, effectively easing its last restrictions on home purchases. These moves follow nationwide support measures for the property sector, including lower mortgage rates for first-time homebuyers. China's property sector, which accounts for one-quarter of the country's economic activity, had been in decline since 2021 due to government efforts to limit debt accumulation by developers.
India forges compromise among divided world powers at the G20 summit in a diplomatic win for Modi
Associated Press
India's Prime Minister Narendra Modi has been praised for his success in bringing together the G20 nations to agree on a joint statement despite divisions over Russia's actions in Ukraine. The statement was softer than last year's and didn't directly denounce Russia, but all countries agreed. The success is seen as an achievement for Modi as he seeks to increase India's influence on the world stage and is an example of Western and non-Western powers and the Global South working together.
China tops the world in research output, now quality must catch up
South China Morning Post
Chinese cities are boosting their innovative capacity in response to intense global competition, according to two studies. The studies, conducted by Elsevier and Springer Nature, ranked Beijing as the most innovative city in the world, with Shanghai and Shenzhen also ranking highly. The studies also found that China's research output has improved in quality, although more needs to be done to encourage bolder and more imaginative research. The studies also found that attracting talent and premier research institutions remains a significant advantage for Chinese cities.
Chinese state oil companies falling short on climate pledges: Carbon Tracker
South China Morning Post
Chinese state oil companies, China Petroleum & Chemical Corporation (Sinopec), PetroChina, and CNOOC, rank near the bottom on a gauge of climate pledges made by the world’s largest oil and gas companies, just above Saudi Aramco, according to a report by Carbon Tracker. The report warned that the companies have no plans in place to reduce production by amounts sufficient to comply with the Paris Agreement goals. None of the Chinese state-owned oil and gas companies, along with all those on the list except for Italian energy company Eni, fulfilled the minimum requirements to align with the Paris Agreement, according to Carbon Tracker.
Soaring oil prices are an ominous sign of a new world order
Telegraph
Oil prices have risen almost 30% over the past three months, reaching a 10-month high. The price of a barrel of Brent crude reached over $90 towards the end of last week, up from around $70 in early June. This surge in oil prices has led to sharp increases in fuel prices, with petrol rising nearly 7p per litre in August and diesel rising 8p per litre. These are some of the sharpest monthly fuel price increases in over 20 years. The rise in oil prices comes despite weak economic data in Europe and a slowdown in China, which would usually be expected to reduce demand for oil and lower prices. The surge in prices has been attributed to OPEC's decision to withhold oil supplies in order to raise prices. OPEC, in collaboration with Russia, controls almost half of global production and nine-tenths of all reserves. The group agreed last year to gradual production cuts, which have now been extended until the end of 2024.
Shein sues Chinese rival in High Court copycat row
Telegraph
Chinese fashion retailer Shein has filed a lawsuit against rival app Temu in London's High Court, accusing it of copying thousands of images from Shein's website. Shein claims that Temu has been "competing unfairly" by passing off its products as those sold by Shein. Temu, which launched in the US in 2022 and quickly expanded globally, has grown to become one of the fastest-growing apps, with an estimated 9 million users in the UK and over 100 million downloads worldwide. Shein has previously faced accusations of copying designs from European rivals and is currently involved in ongoing legal battles.
Biden heads to Vietnam in latest attempt to draw one of China’s neighbors closer to the US
CNN
President Joe Biden will arrive at Chinese leader Xi Jinping’s doorstep on Sunday with a deal in hand to draw yet another one of China’s neighbors closer to the United States. In just the last five months, Biden has hosted the Philippines’ president at the White House for the first time in over a decade; he has fêted the Indian prime minister with a lavish state dinner; and he has hosted his Japanese and South Korean counterparts for a summit ripe with symbolism at the storied Camp David presidential retreat. At each turn, Biden’s courtship and his team’s steadfast diplomacy have secured stronger diplomatic, military and economic ties with a network of allies and partners joined if not by an outright sense of alarm at China’s increasingly aggressive military and economic posture, then at least by a growing sense of caution and concern.
The latest page in the US’s Indo-Pacific playbook will come via the establishment of a “comprehensive strategic partnership” that will put the US on par with Vietnam’s highest tier of partners, including China, according to US officials familiar with the matter. “It marks a new period of fundamental reorientation between the United States and Vietnam,” a senior administration official said ahead of Biden’s arrival in Hanoi, saying it would expand a range of issues between the two countries. “It’s not going to be easy for Vietnam, because they’re under enormous pressure from China,” the official went on. “We realize the stakes and the President is going to be very careful how he engages with Vietnamese friends.”
On a separate track, the Biden administration has also pursued more stable ties and improved communication with Beijing over the last year, with a series of top Cabinet secretaries making the trip to the Chinese capital in just the last few months. The latter part of that playbook has delivered fewer results thus far than Biden’s entreaties to China’s wary neighbors, a dichotomy that was on stark display as Biden attended the G20 in New Delhi, while Chinese leader Xi Jinping did not. The president did not appear overly concerned when questioned Saturday about his Chinese counterpart’s absence at the summit.
North Korea's Kim Jong Un has photo session, but quiet amid talk of Russia visit
Reuters
North Korean leader Kim Jong Un attended a photo session to mark the country's 75th anniversary, but did not participate in other events amid reports that he would soon travel to Russia. The celebrations included floral dedications, banquets, and concerts for a visiting Chinese delegation. Kim's visit to Russia's far-eastern city of Vladivostok is expected to involve discussions on weapons supplies and military cooperation. North Korea and Russia have denied being in arms negotiations, but the US has warned against Kim supplying weapons that Russia could use in Ukraine. Analysts suggest that North Korea may be seeking to fill shortfalls in military resources, such as nuclear weapons that can be delivered by ballistic missiles and submarines.
Russia says G20 declaration 'balanced' as summit moves to final day
Reuters
The G20 summit declaration praised Russia and avoided directly criticizing Moscow for the war in Ukraine. The declaration called on all states not to use force to grab territory but did not condemn Russia for its actions in Ukraine. The negotiations on the Ukraine issue were described as difficult, taking almost 20 days to agree on the declaration. The Ukraine war was the most contentious issue, but a consensus was eventually reached. The European Union official praised India's strong leadership and the roles played by Brazil and South Africa in the negotiations. Ukraine's foreign ministry criticized the declaration, stating that a Ukrainian presence would have given participants a better understanding of the situation. Russia's invasion of Ukraine in 2022 has caused significant damage and turmoil.
Discussions on G20 leaders' declaration went on till last minute, EU official says
Reuters
The G20 leaders' declaration at the recent summit in New Delhi was contentious, with the Ukraine conflict being the most debated issue. The West wanted countries to call out Russia for its invasion of Ukraine, but Russia threatened to block any resolution that did not reflect its views. In the end, the declaration called for all states to not use force to grab territory and for the implementation of the Black Sea initiative for the safe flow of grain, food, and fertiliser from Ukraine and Russia. However, the EU official noted that there was not a single word from Russia on the Black Sea grain deal and that the country finds itself more isolated following the summit.
Australian, and Indonesian forces deploy battle tanks in US-led combat drills amid Chinese concern
Associated Press
The US, Indonesia, Australia, Japan, Singapore, the UK and France have been participating in Garuda Shield, an annual drill, in Indonesia. The drills have been taking place on the Indonesian island of Java and have included live-fire exercises. The drills come amid increased Chinese aggression in the region and the US has been strengthening military alliances in the Indo-Pacific to reassure allies who are concerned about Beijing's actions in the disputed South China Sea.
Hong Kong luxury home market awaits return of affluent mainland Chinese buyers
South China Morning Post
Hong Kong's luxury property market is yet to see a return of affluent mainland Chinese buyers. High borrowing costs and economic uncertainty continue to weigh on investors' appetite for high-end flats in the city, according to industry analysts. The number of super prime residential sales, covering transactions worth $10m and above, fell 17.6% in Q2 2022, compared to Q4 2021, according to Knight Frank. Total consideration for these deals in the same period dropped 28.6% from their peak in Q4 2021.
Taipei raises hackles by omitting island’s official name from Double Tenth logo
South China Morning Post
A new logo created for Taiwan's Double Tenth holiday has sparked concerns that the government may try to change the official name of the self-ruled island, the Republic of China (ROC). The logo features the English words "2023 Taiwan National Day" without any mention of the ROC, leading critics to suggest that the government is pushing for independence. The government has denied this and said that the logo does not change the fact that Taiwan is the ROC government.
Biden finds a new friend in Vietnam as American CEOs look for alternatives to Chinese factories
Associated Press
Vietnam is looking to increase trade with the US as competition with China restructures relationships across Asia. Vietnam has designated China and Russia as comprehensive strategic partners, and the same status is now being extended to the US, a move seen as hedging its friendships as US and European firms look for alternatives to Chinese factories. President Joe Biden is visiting Vietnam as part of a trip to India and wants to bring more nations, including Vietnam and Cambodia, into the US's orbit as the Chinese economy slows and President Xi Jinping consolidates political power.
China, Europe should 'unite and co-operate', Premier Li says at G20
Reuters
Chinese Premier Li Keqiang has called for China and Europe to "unite and cooperate" against global uncertainties. This comes as the European Union grows more cautious about engaging with China, which it defines as a partner, competitor, and "systemic rival". Li urged the EU to provide a non-discriminatory environment for Chinese firms and expressed China's willingness to strengthen dialogue and cooperation in areas such as clean energy and green finance. The Chinese foreign ministry quoted Li as saying that China and the EU should use the stability of their relations as a hedge against the uncertainty of the world situation.
No hope China will rejoin the world, top Beijing-based businessman says
The Sydney Morning Herald
Jörg Wuttke, the president emeritus of the EU Chamber in China, has said that there is no hope of influencing Chinese President Xi Jinping to retreat from his aggressive foreign policy. Wuttke stated that China's days of blockbuster economic growth were over as Xi was willing to exchange growth for ideology. He also said that he did not believe this would lead to conflict over Taiwan, as he did not see any military conflict due to Xi's cautious nature and the risks and costs of starting a war being too great.
Panasonic expands staff at China-based software R&D hub by 40%
Nikkei Asia
Panasonic has increased its software development capabilities in China by expanding its staff in Dalian by 40% over the past few years. The Panasonic Software Development Center in Dalian now has around 1,000 employees, making it the company's largest overseas software development hub. The center focuses on automotive applications, consumer electronics, household appliances, and other fields. It plans to hire more staff in the future and aims to enhance its capabilities in voice and image recognition artificial intelligence. Panasonic's China and Northeast Asia operating company has set a revenue target of JPY 1 trillion ($6.77 billion) for FY2025.
In Myanmar, Chinese and Thai companies fill economic vacuum
Nikkei Asia
Chinese and Thai companies are expanding their presence in Myanmar as Western multinationals withdraw from the country following the military takeover in 2021. China accounted for 55% of Myanmar's foreign direct investment between February 2021 and March 2022, with Chinese companies taking the lead on infrastructure projects, including the China-Myanmar Economic Corridor. Chinese-owned garment factories in Myanmar have surpassed pre-takeover levels, accounting for more than half of all garment factories operating in the country. Thai companies are also increasing their investments in Myanmar, with Thai Beverage-owned Fraser and Neave planning to build a brewery through a joint venture with a local company. Consumer spending is recovering in Myanmar, with restaurants and shopping centers reopening in major cities. Energy companies from Thailand are also entering Myanmar, taking over projects abandoned by Japanese and European companies. European multinationals have withdrawn from Myanmar's telecom and energy sectors, as well as shrinking their presence in the garment industry, due to concerns over labor rights and the military regime.
1,200 Chinese nationals arrested by Myanmar militia over alleged scam links
South China Morning Post
The United Wa State Army (UWSA), one of Myanmar's largest ethnic minority militias, has arrested and repatriated over 1,200 Chinese nationals allegedly involved in criminal online scams. The arrests were carried out in territory controlled by the UWSA in eastern Shan state, with the individuals handed over to Chinese police at the border gate. Cybercrime scams have become a major issue in Asia, with criminal gangs forcing victims to work in conditions of virtual slavery. The UWSA has previously made similar arrests, as online fraud operations are not allowed in the territory administered by the militia.
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