Chinese authorities monitor Tibetans to prevent communication with outside world

Anyone who has contacted people abroad is called in for police interrogation.

By Sangyal Kunchok for RFA Tibetan

2023.06.30 

A Chinese flag flutters above surveillance cameras on a street near Jokhang Temple during a Chinese government-organized media tour to Lhasa, Tibet Autonomous Region, China in 2021

Chinese authorities in Tibet have intensified monitoring of Tibetans, and continue to interrogate them in the regional capital Lhasa to prevent communication with people outside of Tibet, RFA has learned.

The Chinese government has been intensifying its monitoring of Tibetans and maintained their interrogations of Tibetans living in Lhasa to determine if they have contacted people outside Tibet and stepped up surveillance measures to prevent such communication. Now the Chinese authorities are interrogating Tibetans in Lhasa specifically targeting and warning them to stop communication. 

In March, two major anniversaries prompted police to step up surveillance. The month marked the 15th anniversary of a 2008 riot, and the 64th anniversary of the 1959 uprising against Chinese troops that had invaded the region a decade earlier.

But the heightened security from March has continued well into June, and police have continued closely monitoring residents in Lhasa and random searches of their cell phone and online communications to discover whether they had communicated abroad.

A police officer searches a Tibetan woman's cell phone on a street in Lhasa, capital of western China's Tibet Autonomous Region, March 11, 2023. Chinese authorities in Tibet have intensified monitoring of Tibetans, and continue to interrogate them in the regional capital Lhasa to prevent communication with people outside of Tibet, RFA has learned. Credit: Chinese State Media

The police were particularly concerned that the Lhasa residents might be in contact with journalists or researchers outside of Tibet, a Tibetan resident told RFA’s Tibetan Service. 

“Tibetans are warned not to contact people outside and those who have, have been summoned and interrogated,” the source said. “Their cell phones are confiscated and they are under constant scrutiny.”

The source was among those who had contacted people outside of Tibet, and was summoned for interrogation along with some friends.

“They gave us warning to not ever contact people on the outside, especially researchers on Tibet and journalists,” said the source. “I also know that so many other Tibetans who contacted people outside Tibet were interrogated by the Chinese authorities too.”

Another resident said that people could be summoned even for casual conversations with outsiders.

“I was summoned two times already this year for interrogation and one of my friends had to bribe the authorities to release me the second time around,” the second resident said. “My name is now listed amongst those interrogated, therefore I have to get permission from the local police if I need to travel outside Lhasa.” 

Translated by Tenzin Dickyi. Edited by Eugene Whong.

https://www.rfa.org/english/news/tibet/communication-06302023172931.html

Hong Kong issues arrest warrants for 8 activists abroad

Nathan Law, Ted Hui among individuals wanted for alleged security offenses

Steven Li, the chief superintendent of the national security police, explains the arrest warrants for eight activists in Hong Kong on July 3.   © Reuters

PAK YIU, Nikkei staff writerJuly 3, 2023 18:48 JST

 

HONG KONG -- Eight Hong Kong activists living overseas were named in arrest warrants issued by the national security police on Monday.

The people wanted for allegedly endangering national security are barrister Kevin Yam, businessman Elmer Yuen, the Hong Kong Democracy Council's Anna Kwok, former legislators Ted Hui and Dennis Kwok, labor rights advocate Christopher Mung, and activists Finn Lau and Nathan Law.

National security officers said the eight are wanted for urging foreign countries to sanction members of the judiciary and other officials, constituting "very serious national security crimes."

U.S. lawmakers in May urged Washington to sanction 29 judges overseeing national security cases, while European Union parliament members also called for sanctions on Hong Kong and Chinese officials last Friday.

The eight individuals -- who reside in Canada, Australia, the U.S. and Britain -- are wanted on allegations ranging from colluding with foreign forces to secession and subverting the state. Some foreign governments, including those of the four countries in question, have suspended extradition and other criminal justice cooperation arrangements with Hong Kong since the security law was enacted.

"We are not stoking any fears or staging a show," said National Security Department Chief Superintendent Steven Li. "We are enforcing the law."

The Hong Kong police also offered bounties of up to 1 million Hong Kong dollars ($127,000) per person, saying they would provide financial incentives for anyone who assists in the arrest of the wanted individuals.

The ex-legislator Hui described the bounty on his head as a "ridiculous" gesture that shows Beijing's desperate efforts to persecute the Hong Kong diaspora. The bounty "even makes it clearer to Western democracies that China is going toward more extreme authoritarianism and [becoming] more of a threat to the world," he told Nikkei Asia, which has reached out to all the suspects for comment.

Bruce Hung Ngan, senior superintendent of the national security police, said the authorities would continue to investigate the eight individuals' communications with people in Hong Kong and overseas, while looking into any financial assistance they may have received.

"We must prevent any avenues including collaboration with the national security criminals through any means using accounts with financial institutions," he said.

The arrest warrants come days after the third anniversary of the national security law. Beijing forced the draconian law on Hong Kong following mass antigovernment demonstrations in 2019. The crackdown sparked an exodus of Hong Kongers, with many democracy activists now in self-exile.

Under articles 37 and 38, the security law has an extraterritorial application that has stoked fears among the Hong Kong diaspora about speaking out against rights abuses or advocating for democracy in the city.

Overall, Hong Kong's national security forces have arrested 260 people for endangering national security, the police said, while 79 have been convicted or are awaiting sentencing. The law has a conviction rate of 100% so far.

On the handover anniversary on Saturday, Hong Kong's Chief Executive John Lee urged vigilance against "soft resistance" that threatened national security. He added that "destructive forces ... are still lurking in our city."

The security law, which Chinese authorities say has brought stability back to Hong Kong, has imposed a chilling effect on society.

"In a city once known for its vibrant and diverse public square, no one feels comfortable sharing critical or even lightly satirical remarks or cartoons about the government in public, or sometimes even among friends in private," Johannes Chan, former law dean at the University of Hong Kong, wrote in an analysis of the law's impact.

https://asia.nikkei.com/Spotlight/Hong-Kong-security-law/Hong-Kong-issues-arrest-warrants-for-8-activists-abroad 

How risky is travel to Hong Kong under the national security law?

‘They treated me like a terrorist,’ says Taiwanese professor who was turned away

By Chang Chen-hung, Lee Hsue-li and Lee Yee-an for The Reporter/RFA Mandarin
2023.07.02

https://www.rfa.org/english/news/china/hong-kong-travel-07022023234856.html

US warns new Chinese counterespionage law puts companies at risk

By Michael Martina

July 1, 2023 4:14 AM GMT+7 

U.S. and Chinese flags are seen in this illustration taken, January 30, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

WASHINGTON, June 30 (Reuters) - The U.S. on Friday warned about a new Chinese counterespionage law, saying American and other foreign companies in the country could face penalties from Chinese authorities for regular business activities.

Chinese lawmakers this year passed a wide-ranging update to Beijing's anti-espionage legislation that goes into effect on July 1, banning the transfer of any information related to national security and broadening the definition of spying.

China this year has also cracked down on U.S. consultancy and due diligence firms, a move business lobbies have said unnerved foreign investors in the world's second-largest economy.

The U.S. National Counterintelligence and Security Center (NCSC) said in a bulletin that China viewed outbound flow of data as a national security risk, and that the new and existing laws could compel companies' locally employed Chinese nationals to assist in Chinese intelligence efforts.

"These laws provide the PRC (People's Republic of China) government with expanded legal grounds for accessing and controlling data held by U.S. firms in China," the NCSC said.

"U.S. companies and individuals in China could also face penalties for traditional business activities that Beijing deems acts of espionage or for actions that Beijing believes assist foreign sanctions against China," it said.

It said the ambiguities of the law meant that "any documents, data, materials or items" could be deemed relevant to Chinese national security, also putting journalists, academics and researchers at risk.

China's embassy in Washington said Beijing had a right to safeguard national security through domestic legislation.

"China will continue to promote high-level opening-up and provide a more law-based and international business environment for companies from all countries, including the United States," embassy spokesman Liu Pengyu said.

Chinese leader Xi Jinping has emphasized national security since taking office in 2012. Suspicion in China of the U.S. and its allies has grown as the U.S.-China rivalry has intensified, yet Beijing has insisted it is opening up to overseas investment.

U.S. officials have told Reuters that since the enactment of the Chinese law in April they have received a flood of questions from businesses and other groups about the risks of traveling to China.

The U.S. State Department also updated its travel advisory for China on Friday, upgrading the "risk of wrongful detentions" among its warnings for Americans to reconsider travel to the country.

U.S. Ambassador to China Nicholas Burns has said Beijing's targeting of U.S. firms was politically motivated and that Washington would push back.

Reporting by Michael Martina in Washington Editing by Chizu Nomiyama and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

https://www.reuters.com/business/us-warns-new-chinese-counterespionage-law-puts-companies-risk-2023-06-30/ 

New Chinese foreign relations law targets businesspeople, journalists

It embraces ambiguity to the point it could be used to clamp down on any perceived threat, analysts say.

By Chris Taylor for RFA

2023.07.02 

Flags flutter near the Chinese national emblem outside the Great Hall of the People in Beijing, China, Wednesday, March 7, 2012

China has enacted a new foreign relations law that takes a broad view of what constitutes espionage in a move that may make China even harder to safely navigate for foreign journalists and businesspeople.

The law – which came into effect on Saturday – appears to be an effort to provide a legal basis for punishing any individuals or organizations that threaten China’s interests, which may include any moves that suggest “de-risking” or “decoupling,” at least according to state media rhetoric over recent days.

The law has also been interpreted to be a move to provide a legal framework for Chinese President Xi Jinping’s world view, as it embraces two of his signature foreign policy initiatives: The Global Security Initiative and the Global Civilization Initiative.

Experts concurred roundly that the legislation’s ambiguous language would be open to interpretation on a case-by-case basis and could threaten the activities of foreign journalists and businesspeople in China.

It expands the definition of espionage to constitute accessing “documents, data, materials or items related to national security and interests,” leading Cedric Alviani of Reporters Without Borders to comment that it covered, “basically any type of information.”

The law was approved by the standing committee of the National People’s Congress last Wednesday, just days ahead of the Communist Party’s 102nd founding anniversary, which was on Saturday.

The revisions to China’s counterespionage law first came to light in late April this year, amid raids on foreign businesses in Shanghai and Beijing – notably, U.S. management consultancy firm Bain and Co. and U.S. due diligence company Mintz.

Mao Ning, spokesperson for China’s Foreign Ministry, said at a news conference: “There is no need to associate the counterespionage law with reporting activities of foreign journalists.

“China always welcomes media outlets and journalists of all countries to conduct interviews and run stories in China in accordance with laws and regulations, and we will provide facilitation and assistance to them.

“As long as one abides by laws and regulations, there is no need to worry,” Mao added.

Commentators countered that so-called “state secrets” and “activities that undermine social order” were so poorly defined it was difficult to know how to avoid being accused of breaking the rules.

Legitimizing foreign policy

Some legal experts were less convinced that the new law would be used as a dragnet to sweep up anyone the Communist Party doesn’t like or ban them from the country – given that China has regularly done so before the law was promulgated. Rather, they said that the law aims to provide a legitimizing framework for China’s resistance to an international rules-based system that Beijing perceives as biased against China’s development and rise.

Suisheng Zhao, a professor at the University of Denver’s Josef Korbel School of International Studies, described the law as a broad legal legitimization of Chinese President Xi Jinping’s stated goal of bringing about a post-Western, new world order.

“It’s a personalization of Chinese foreign policy through a legal process,” making it “clear that the party is in charge of foreign policy, and the foreign ministry and State Council is the implementing institution” Xhao said.

“In order to counter the ‘Western containment,’ Xi tries to mobilize everything available to him – including so-called legal instruments,” he added.

An editorial in state tabloid the Global Times said the new law would counteract frequent interference in China’s internal affairs, unilateral sanctions, and “long-arm jurisdiction” by certain Western hegemonic countries using “legal” means.

China’s top diplomat Wang Yi wrote in Chinese-language state media on Thursday that the law was a systematic integration of China’s long-standing diplomatic policies and conceptual practices.

“This legislation marks a new legal and institutional development stage in China's foreign relations,” the Global Times added.

Worsening relations

An increasingly isolated Beijing has been seeking ways to strike back at U.S. sanctions, tariffs and export controls, as it struggles to juggle its aggressive wolf-warrior diplomacy and simultaneously project an “open for business” façade to the West.

On Friday, in a further blow to China’s access to advanced chip technology, Dutch manufacturer ASML said in a statement that effective September 1, it will be necessary to apply for a license from The Hague to ship its most advanced chip-manufacturing lithography systems.

China has its own “unreliable entity list” but it has been largely ineffective in terms of pushing back on U.S. Defense contractors. Lockheed Martin Corp. and Raytheon Corp. have been named as entities but neither provides arms to China.

Beijing has put an effective ban on Micron Technology Inc., a U.S. manufacturer of memory chips, which was described as a “cautious move” because such chips can be locally sourced.

On Sunday, according to a U.S. Treasury Department press release, it was announced that Treasury Secretary Janet Yellen will travel to Beijing, from July 6-9 for meetings with senior Chinese officials, in a further effort to bolster Sino-U.S. relations, which are at their most fractious in decades.

The trip follows close on the heels of last month’s trip by U.S. Secretary of State Antony Blinken, during which both sides claimed to be “satisfied” that a first step had been made toward reestablishing communication between the two powers.

Edited by Mike Firn.

https://www.rfa.org/english/news/china/china-foreign-relations-law-07022023225715.html

Special report: Russia buying civilian drones from China for war effort

Moscow relying on 'dual use' equipment and third-party exporters

The DJI Mavic 3 Cine Drone shown here could be used in Ukraine to gather intelligence on the battlefield, according to a Japanese expert. (Source photos by Getty Images and AP)

Nikkei staff writers and JACOB FROMER, Contributing writer

July 1, 2023 17:59 JST

 

Russia has for months been importing drones from Chinese companies explicitly for use in its invasion of Ukraine, despite denials from Beijing that such equipment is being deployed in the war, a Nikkei Asia investigation has found.

Between December 2022 and April 2023, Russian companies imported at least 37 Chinese unmanned aerial vehicles worth around $103,000 that were designated in customs clearance records as being "for use in the special military operation," the Russian government's name for the Ukraine war. 

Since the beginning of the invasion 16 months ago, Beijing has repeatedly denied providing weapons to Moscow for use in the invasion. And while previous reporting has shown that Russia stepped up its imports of Chinese drones after the war began, Beijing has denied that China is exporting drones to the battlefields of Ukraine.

"China calls on all relevant parties to work together to strengthen controls, prevent all types of drones from being used on battlefields in conflict areas, and jointly promote international peace and regional stability," a spokesperson for China's Ministry of Commerce said in April.

But Nikkei's reporting shows that for months, Russian companies have been quietly filling out customs paperwork for the import of drones, including machines manufactured by U.S.-sanctioned DJI, China's biggest drone maker, marking them for use in the war. It is unclear whether the Chinese companies or government is aware of Russia's customs records regarding the drones.

Nikkei obtained the Russian customs records from multiple sources, including Indian companies Exim Trade Data and Export Genius, and analyzed shipments from China to Russia.

The label "for use in the special military operation" began appearing in customs records late last year, after Russian President Vladimir Putin ordered his government to increase the supply of goods needed for the war.

In November, the Federal Customs Service of Russia said on its official website that the agency would expedite and simplify the release of "dual-use goods and civilian products intended to support the combat and daily activities of Russian military units."

Drones "should be a must-have for combat units, platoons, companies and battalions," Putin told defense officials in December, according to a Kremlin transcript. Military analysts say Russia has been using drones to surveil and attack Ukraine.

Nikkei found that Russian companies also paid Chinese counterparts more than $1.2 million for 22 devices that detect and jam drones, and another $36,077 for 10 "rugged" portable personal computers. All were designated in customs records for use in the war.

In one case, on Feb. 1, Russian information technology company Status Compliances imported three drones, with takeoff weights of between 25 kg and 150 kg, from Shenzhen Kexin Smart Development, an electronic devices manufacturer in Shenzhen, for $28,292. They were made by Shenzhen Jarch Electromechanical Technology, according to Exim Trade Data.

The drones were described in the records as civilian models, but an additional note in the customs forms says they were being imported for the "special military operation carried out by the armed forces of the Russian Federation."

"Large drones weighing over 25 kg could be used for reconnaissance, and if modified, could be used for attack," said professor Tomoyuki Furutani of Keio University, an expert on unmanned aircraft. "They could be made into a self-destruct type, loaded with firepower to attack." He added that smaller drones like DJI's MAVIC 3 could be used to gather intelligence rather than attack.

Customs records show that in January and March, 34 drones manufactured by DJI, worth $75,100, were shipped to Russia, each with a takeoff weight of between 250 grams and 7 kg. Twenty-four were listed as DJI's Mavic 3 model.

In a statement to Nikkei, DJI said the company could not verify the customs records involving DJI this year and denied that the listed companies were DJI dealers. The company said that DJI, as well as its subsidiaries, had "voluntarily stopped all shipments to and operations in Russia and Ukraine" on April 26 last year, but added that the company "cannot control how our products are being used once they leave our management."

"We have taken all steps under our control to emphasize that our products should not be used in combat, to cause harm, or be modified into weapons," the company said.

When asked about the drones that the Russia customs data showed it had imported, Status Compliances initially told Nikkei that it was not aware of any such purchases. When Nikkei showed the company detailed transaction information, the company denied that it had taken place.

Status Compliances says on its website that it develops information security systems for companies.

The manufacturer listed in the customs records, Shenzhen Jarch Electromechanical Technology, says on its website that it makes electrical slip rings, a device used in the transmission of electricity or electrical signals, but does not mention drones. When asked for comment by a Nikkei reporter, Shenzhen Jarch Electromechanical Technology denied that it exports drones to Russia.

Shenzhen Kexin Smart Development, the Chinese seller listed in the customs records, did not respond to multiple inquiries.

Two Hong Kong-based companies, APIO Group and Shenwei Technology HK, were also listed as selling drones and drone suppressors, respectively, to Russia for the war, but neither of the two companies appears to have a physical presence in the city.

Their registered offices use addresses of company formation agents, which can offer one address for thousands of companies to use for registration simultaneously -- common practice in Hong Kong, where it is easy and inexpensive for businesses to incorporate.

APIO Group and Shenwei Technology did not respond to Nikkei's request for comment.

Damien Spleeters, deputy director at Operations at Conflict Armament Research, a U.K.-based investigative organization, said Russia has been relying on civilian goods and components in their weapon systems since before the February 2022 invasion.

"It should not be a surprise that they continue to do so, since they lack the domestic capability to effectively produce these goods and components themselves," he said.

Nikkei also requested interviews with the Russian government and the Chinese Embassy in Japan about the drones, but received no response.

From March 2022 to May 2023, China exported at least 30,000 drones to Russia, worth over $32 million, according to China's official customs data.

Russia's import records, however, did not mention the phrase "special military operation" until December 2022.

Multiple lawyers and other experts familiar with Russian customs practices speculated that importers may be declaring that the drones are being used for the war in order to speed them through the customs process.

Experts tracking the war say that Russia has been plagued by logistical problems and supply shortages since the beginning of the invasion. Russian President Vladimir Putin has spoken publicly about the need for more materiel.

On Oct. 25, Putin met with the head of Russia's Federal Customs Service, Vladimir Bulavin, who told Putin that the customs agency would "provide every possible assistance to our armed forces and defense industry companies," according to a transcript from the Kremlin.

The first mention of the "special military operation" in Russian customs records came on Dec. 21 -- a $296,550 shipment of five "passive scanners" that detect drones, and a $92,115 shipment of three jammers that block communications between a drone and its remote controller.

U.S. Secretary of State Antony Blinken said during his visit to Beijing last month that the U.S. has "ongoing concerns" that Chinese companies may be providing technology that Russia can use in its aggression against Ukraine and said he had urged his Chinese counterparts to be vigilant. He added, however, that he had seen no evidence that Beijing is providing lethal assistance to Moscow.

"If they [China] don't intend to be a part of Russia's war, they shouldn't sell the drones," said Kazuto Suzuki, a University of Tokyo professor who previously served on the Panel of Experts for the U.N. Security Council's Iran Sanctions Committee.

"The fact that they are putting them out there knowing Russia's intentions, from an ethical standpoint, is an act of not wanting to stop the war, and facilitating it," Suzuki said.

https://asia.nikkei.com/Politics/Ukraine-war/Special-report-Russia-buying-civilian-drones-from-China-for-war-effort

Wagner mutiny exposes risks for China's deep Russian ties

By Martin Quin Pollard and Yew Lun Tian

June 28, 2023   3:20 AM GMT+7 

Fighters of Wagner private mercenary group pull out of the headquarters of the Southern Military District to return to base, in the city of Rostov-on-Don, Russia, June 24, 2023. REUTERS/Stringer/File Photo

BEIJING, June 27 (Reuters) - As news broke on Saturday that mercenary Wagner troops were careering towards Moscow in a short-lived rebellion, several businessmen from southern China began frantically calling factories to halt shipments of goods destined for Russia.

While the mutiny - the biggest test of Russian President Vladimir Putin's leadership since his February 2022 invasion of Ukraine - quickly faded, some of these exporters are now left questioning their future dependence on Beijing's closest ally.

"We thought there was going to be a big problem," Shen Muhui, the head of the trade body for the firms in China's southern Fujian province said, recalling the scramble among its members exporting auto parts, machinery and garments to Russia.

Though the crisis has eased, "some people remain on the sidelines, as they're not sure what will happen later," he added, declining to name the companies pausing shipments.

China has sought to play down the weekend's events and voiced support for Moscow, with which it struck a "no limits" partnership shortly before Russia invaded Ukraine in what Moscow calls a "special military operation".

But a top U.S. official on Monday said the weekend uprising had unsettled Beijing's cloistered leadership, and some analysts inside and outside China have started to question whether Beijing needs to ease off its political and economic ties to Moscow.

"It has put a fly in the ointment of that 'no-limits' relationship," said Singapore-based security analyst Alexander Neill.

China's foreign ministry, which described the aborted mutiny as Russia's "internal affairs" and expressed support for Moscow's efforts to stabilise the situation, did not immediately respond to a Reuters request for comment.

CALLS FOR CAUTION

Yevgeny Prigozhin, head of the Wagner private army that has fought some of Russia's bloodiest battles in the Ukraine war, led the armed revolt after he alleged a huge number of his fighters had been killed in friendly fire.

But the mercenary leader abruptly called the uprising off on Saturday evening as his fighters approached Moscow while facing virtually no resistance during a dash of nearly 800 km (500 miles).

China did not comment as the crisis unfolded, but released a statement on Sunday when Foreign Minister Qin Gang hosted a surprise meeting with Russia's deputy foreign minister in Beijing.

At the heart of China and Russia's relations is a shared opposition to what they see as a world dominated by the United States and the expansion of the NATO military alliance that threatens their security.

After securing an unprecedented third term as president earlier this year, Chinese President Xi Jinping made his first overseas trip to Moscow to meet his "dear friend" Putin.

Russian President Vladimir Putin and Chinese President Xi Jinping attend a reception at the Kremlin in Moscow, Russia March 21, 2023. Sputnik/Pavel Byrkin/Kremlin via REUTERS /File Photo

While nationalistic commentators in state-run Chinese tabloids cheered Putin's swift efforts to stamp out the rebellion, even some in China - where critical speech is tightly controlled - have started to question Beijing's bet on Russia.

China "will be more cautious with its words and actions about Russia", said Shanghai-based international relations expert Shen Dingli.

Some Chinese scholars have gone even further.

Yang Jun, a professor at Beijing's China University of Political Science and Law, wrote a commentary published on Saturday that called for China to directly support Ukraine to avoid being "dragged into a quagmire of war by Russia".

"With the development of the current situation and the trend of the war...(China) should further adjust its position on Russia and Ukraine, make its attitude clearer, and decisively stand on the side of the victors of history," he wrote in Chinese-language Singaporean newspaper Lianhe Zaobao.

It was unclear if Yang's article was written before the Wagner rebellion and he did not respond to requests for an interview from Reuters.

Other China-based academics, however, said Beijing would not change its stance on Russia as a result of the incident.

INVESTOR UNCERTAINTY

China is Russia's top trading partner, with Beijing exporting everything from automobiles to smartphones and receiving cheap Russian crude oil that faces sanctions in much of the rest of the world.

But even in the energy sector, which fuelled a 40% jump in trade between Russia and China in the first five months of this year, there are some signs of caution in China.

Top company executives at Chinese state energy companies have routinely said it was too early to comment or sidestepped questions on new investments in Russia.

"Should Russia lose the war or see changes in the domestic leadership, it will create huge uncertainties for Chinese investors," said Michal Meidan, head of China energy research at The Oxford Institute for Energy Studies.

He said the Chinese government also seemed to be exercising caution, pointing out that Beijing had not yet signed a deal for a major new gas pipeline connecting the countries despite a push from Moscow.

While China is vital to Russia's economy, China's trade with the likes of the United States, the European Union and Japan - among the fiercest critics of Moscow's war in Ukraine - dwarfs its dealings with Russia.

"Beijing now has more reasons to have more reservations and to become more transactional in its dealings with Putin's Russia," said Wen-Ti Sung, a political scientist at the Australian National University.

"There's no point making long-term investment in someone who may not credibly survive into the long-term."

Reporting by Martin Quin Pollard and Yew Lun Tian in Beijing and the Shanghai newsroom; Writing by John Geddie; Editing by Alex Richardson

Our Standards: The Thomson Reuters Trust Principles.

https://www.reuters.com/world/wagner-mutiny-exposes-risks-chinas-deep-russian-ties-2023-06-27/

China fears Russia chaos after Wagner uprising

Revolt seen as wake-up call for Beijing as a weakened Putin may trigger further insurgencies

Russian President Vladimir Putin and Chinese President Xi Jinping attend a welcome ceremony at the Kremlin on March 21. (File photo by Reuters) 

AMY CHEW, Contributing writerJune 27, 2023 13:40 JST

 

China's special envoy for Ukraine declined to take part in a wreath-laying ceremony at the Memory Wall of the Fallen Heroes in Kyiv last month -- an act that most international visitors to the country perform.

On his two-day trip to the country, Liu Hui also skipped a visit to Bucha, a city near the capital where the BBC and other media reported more than 1,000 civilians and prisoners of war were killed in a massacre. Instead, he headed straight for talks with top Ukrainian officials and President Volodymyr Zelenskyy.

A senior Ukrainian official involved in the talks told Nikkei Asia that China at that time was already concerned about whether Russian President Vladimir Putin would hold onto his grip on power.

The trip was a "reconnaissance mission" to see how determined Kyiv was to push on with its counteroffensive, as even "a limited success of Ukraine's counteroffensive could trigger destabilization in Russia," said the official, who asked not to be named. "There would be fighting between the military, Chechens, Wagner, FSB [Russia's Federal Security Service] ... complete chaos. This is China's biggest fear."

China's fears were substantiated by the weekend insurrection of the Wagner paramilitary group.

The whole episode of Wagner's mutiny "evidently [has] been unnerving for China," said Andrew Small, senior fellow with the German Marshall Fund's Indo-Pacific Program.

"Internal unrest in Russia would be one of the worst possible scenarios for Beijing, and there will also be anxiety about whether they have a good read on power dynamics in Moscow," said Small, author of "No Limits: The Inside Story of China's War with the West."

For now, Small believes China will continue to provide support to Russia.

"I'm sure that they'll be thinking harder about alternative political scenarios than they were. For now though, I suspect they will be trying to get the best possible read on events rather than rethinking their approach," said Small.

Yevgeny Prigozhin, founder of the Wagner private mercenary group, speaks inside the headquarters of the Russian southern army military command center in this still image taken from a video released June 24.   © Concord/Reuters

Alexander Gabuev, director of the Carnegie Russia Eurasia Center, cautioned against an "early demise of Putin," who has served as either president or prime minister of Russia for more than two decades.

"This [mutiny] is an embarrassing event" for Putin, said Gabuev, who did not see the demise of the president any time soon. "There is no alternative power center in Russia right now and he is still in charge."

Gabuev added that Putin's current weakness gives China greater leverage, as the president is weaker at home and the overall Sino-Russian relationship will be guided by the strategic U.S.-China rivalry.

Economist Mark Savchuk, head of the oversight committee of the National Anti-Corruption Bureau of Ukraine, warned that nuclear-armed Russia could potentially break into five different countries.

"Russia breaking down into five smaller countries is a real possibility right now. This raises the serious question of who will control the nuclear weapons, and who does the West negotiate with in the event that happens," said Savchuk.

Savchuk doubts any new, smaller states will give up their nuclear weapons, as they will have seen what happened to Ukraine after it surrendered its nuclear weapons following the fall of the Soviet Union. Back then, Ukraine gave up the third-largest nuclear arsenal in the world under the 1994 Budapest Memorandum in return for Moscow's security guarantee and respect for its territorial integrity.

The weakened state of Putin is also expected to affect China's potential future plans to take over Taiwan, an island that Beijing views as a breakaway province.

"This will definitely play into any calculation of Beijing to 'retake' Taiwan now that they do not have a strong ally in Russia to back them anymore," said Savchuk.

"The coup attempt showed that Putin's regime is, in fact, even weaker than [what] China had estimated, and Putin's political demise may be much closer than it originally seemed," said the Ukrainian official, who added that the fall of dictators throughout Russia's history has always been chaotic and often bloody.

He said Russia is ruled like an organized criminal gang: When the boss is in full control, everyone bows and pledges loyalty to him. But once there is a sign of weakness, "they will go after the boss."

"Such struggle will inevitably generate instability all across Russia with hundreds of ethnic and religious minorities. China wants Russia to be weakened, as it already is, but stable and predictable," said the source.

https://asia.nikkei.com/Politics/Ukraine-war/China-fears-Russia-chaos-after-Wagner-uprising 

Market barriers, tensions hinder European companies in China

 Supply chain risks, politicized business climate bedevil operators

Jens Eskelund, president of the European Chamber, is framed by the Chinese and European Union flag during the launch of the European Business in China: Business Confidence Survey in Beijing on June 21.    © AP

Nikkei staff writersJune 21, 2023 18:37 JST

 

SHANGHAI/LONDON/BRUSSELS/PARIS -- A growing number of European companies operating in China find doing business there more difficult, according to a study by the European Chamber of Commerce in China, as a result of higher barriers to market access and rising tensions between Beijing and Washington.

The study, released Wednesday, found three quarters of the 570 companies surveyed have reviewed their supply chains to strengthen resilience while complying with both the European Union's de-risking strategy and U.S. legislation.

Some 64% of respondents said doing business in China has become more difficult, the highest share since 2014, as companies logged lower revenue as a result of the country's waning growth. China's contribution to average global profit margins fell from 51% in 2021 to 31% in 2023, as the country maintained COVID lockdowns while the rest of the world returned to normality.

The European Commission, the EU's executive body, on Tuesday unveiled a strategy aimed at mitigating economic coercion from China. While a majority of survey respondents remain committed to operating in China, the proportion who regard the country as a top-three destination for future investment declined to 55% from 68% a year ago.

Alicia Garcia Herrero, a senior research fellow at Bruegel, a think tank, cited growing caution among companies as one reason for the slowing growth of European foreign direct investment in China.

Chinese President Xi Jinping began an unprecedented third term in March and has vowed to ease market access to attract foreign investment following a sharp decline in the country's economic growth. China's gross domestic product rose just 3% in 2022, compared with an 8.1% expansion the previous year.

Wednesday's survey results suggest China faces an uphill battle in achieving that objective. A majority of respondents expressed concern over long-standing challenges, including market access and regulatory barriers.

Also, six out of 10 respondents said the business environment has became more politicized over the past year, with some stakeholders clamoring for businesses to pull out of parts of the country where Beijing is accused of human rights abuses, such as Xinjiang and Tibet, while others demand the opposite. Companies can also come under pressure to produce goods containing either no Chinese or no U.S. components, depending on which of the two markets the goods are bound for, the study said.

Commuters cross an intersection in Beijing: A growing number of European companies say doing business in China is harder than before.    © AP

Despite these concerns, China's growing middle class, estimated at over 400 million people, still makes the country attractive to consumer-driven businesses such as carmakers. Two thirds of the automakers surveyed regard China as among their top-three investment destinations.

"In a globalized world, we can only strengthen our business if we maintain and further develop our relations with major economic players such as China," a spokesperson from German automaker Volkswagen told Nikkei Asia.

Nevertheless, a majority of respondents said they are working to bolster their supply chain resilience, both for reasons of cost effectiveness and geopolitics. Other considerations include Chinese cybersecurity and other regulations, and U.S. export controls intended to keep certain high-technology goods and services out of China's reach.

The study, which was conducted from February to early March, also cited the difficulty European companies encounter in getting staff into China following an exodus of foreigners over the past three years. Nearly one in six respondents reported no presence of expatriates in their China operations.

"With China now 'reopening' to the world, following three years of isolation, there is a window of opportunity for the government to demonstrate that the pro-business promises recently made by its leadership are more than just words," the report said.

Reporting by Nikkei staff writers CK Tan, Rhyannon Bartlett-Imadegawa, Catherine De Beaurepaire and Mailys Pene-Lassus.

https://asia.nikkei.com/Business/Business-trends/Market-barriers-tensions-hinder-European-companies-in-China