Archive for ‘Chinese President Xi Jinping’

14/07/2019

Will Narendra Modi’s snub of Xi Jinping’s belt and road derail China-India ties?

  • The Indian prime minister refused to back the Chinese leader’s ambitious global infrastructure vision at a summit last week, but the apparent snub is not getting in the way of amicable ties between Asia’s two biggest economies
Chinese President Xi Jinping and Indian Prime Minister Narendra Modi at the BRICS Summit at the Xiamen International Conference and Exhibition Center in 2017. Photo: AFP
Chinese President Xi Jinping and Indian Prime Minister Narendra Modi at the BRICS Summit at the Xiamen International Conference and Exhibition Center in 2017. Photo: AFP
Their informal summit in Wuhan last year created all the right optics; even their chemistry seemed on point. So, when 
Indian Prime Minister Narendra Modi

and

Chinese President Xi Jinping

met last week on the sidelines of the Shanghai Cooperation Organisation (SCO), the bonhomie seemed like it was there to stay.

But a day later, cracks appeared to emerge. India, holding on to its long-stated position, delivered a public snub to China by refusing to endorse its ambitious, trillion-dollar 
Belt and Road Initiative

(BRI) in the SCO summit’s Bishkek declaration.

Now, after equal parts public bonhomie and disagreement over the BRI, where do 
India-China ties

finally stand? Somewhere in the middle, by all indications.

With just 10 days before Xi and Modi meet again at the Russia-India-China (RIC) trilateral meeting on the sidelines of the

Group of 20 (G20) summit

in Osaka, there have been increasing signs that both countries may now be trialling a fresh approach to diplomacy – one that neither sidesteps contentious issues nor does it allow differences to derail ties.

Chinese President Xi Jinping leads other leaders of Shanghai Cooperation Organisation: Russia’s Vladimir Putin and India’s Narendra Modi at the 2018 summit. Photo: Xinhua
Chinese President Xi Jinping leads other leaders of Shanghai Cooperation Organisation: Russia’s Vladimir Putin and India’s Narendra Modi at the 2018 summit. Photo: Xinhua
Such an approach would delink the thorny issues – like the

decades-old border dispute

and the BRI – from other non-contentious issues of cooperation in other sectors.

But the jury is still out on whether it will pay off, especially given the historical distrust and the baggage that both countries carry.

ROAD BUMPS GALORE

In the last week alone, there have been at least three flashpoints in the Sino-India relationship.

While the dust was still settling on India’s refusal to sign the Bishkek declaration endorsing the BRI, reports emerged that the 

Maldives

was expected to scrap plans to build jointly with China an ocean observatory overlooking the Indian Ocean. The news came a week after Modi had visited the Maldives capital Male in early June.

For Modi 2.0, India’s US-China balancing act just got trickier

The Maldives’ decision to build the observatory was first mulled in December 2017, raising the Indian establishment’s hackles as it would have given China a presence in the region.

Another irritant between India and China has seemed to be the proposed 16-nation 

Regional Comprehensive Economic Partnership

(RCEP). India has been lukewarm on the free-trade bloc, frustrating the Chinese. Indications have been that China is likely to push for a 13-member bloc at the coming RCEP meeting in Thailand on June 20, excluding India.

BRI and border issues have not managed to overshadow the remaining business between the two countries Narayani Basu

Yet, despite all this, there has been no let down in engagement levels between Modi and Xi. Both leaders are expected to meet at the RIC summit on June 29 to 30, and have at least two more meetings planned this year alone – an informal Xi-Modi summit in India
in October and the BRICS summit on November 13 to 14.
For Narayani Basu, a New Delhi-based author and independent foreign policy analyst with a special focus on China, such sustained engagement between the two countries signals a new level of maturity.
“There has been a fairly successful attempt at delinking historical geopolitical and territorial issues from issues which are economic in nature,” Basu said. “As a result, the BRI and border issues have not managed to overshadow the remaining business between the two countries.”
Indian Prime Minister Narendra Modi speaks with Chinese President Xi Jinping in Wuhan. Photo: Xinhua
Indian Prime Minister Narendra Modi speaks with Chinese President Xi Jinping in Wuhan. Photo: Xinhua

STRONG LEADERS, STRONGER AGENDAS

The approach might also have to do with where both leaders currently stand.

Modi and his Bharatiya Janata Party (BJP) have freshly emerged from a landslide

victory in the Indian polls

. Through the campaign, Modi portrayed a hardline image of himself and his government, especially on issues of national security. Similarly, Xi has emerged as a stronger leader since his reappointment last year – his approach marked by a higher-than-ever emphasis on economic nationalism and connectivity. Modi made a reference to this in his SCO meeting with Xi.

Basu said Sino-India ties were also being guided by the personalities of both leaders – strong, with harder-than-before agendas.
Did Japan and India just launch a counter to belt and road?
“They both came back on agendas based on consolidation of power, protection of sovereignty and nationalism. These are all issues that will not allow either side to blink easily. “So, even as both leaders are looking to move forward, they also do not want to compromise on their core issues – primary among them being territorial sovereignty,” she said.

The message is loud – India’s opposition to the BRI does not mean India will allow adversarial relations to develop between the two Sana Hashmi

In his SCO summit speech, Modi brought up territorial sovereignty as a thinly veiled reference to China’s BRI, saying India only supported connectivity projects that are based on “respect of sovereignty” and “regional integrity”.
Sana Hashmi, an analyst with Perth-based think tank Future Directions International and author of China’s Approach Towards Territorial Disputes: Lessons and Prospects, agreed that India was not letting historical issues get in the way of its relationship with Beijing.
Hashmi noted that India’s main objections to BRI revolved around one component – the China-
Pakistan

Economic Corridor (CPEC), which runs through the disputed region of Kashmir.

“But to make sure this does not affect the relationship, PM Modi and President Xi are meeting numerous times,” Hashmi said. “The message is loud – India’s opposition to the BRI does not mean India will allow adversarial relations to develop between the two.”

A NEED FOR EACH OTHER

Another factor that has likely prompted the new approach between India and China is their need for each other, particularly as both Asian powers navigate bumpy relationships with US under 

China is caught in a protracted

battle with the US over trade deficits

and is reeling from the tariffs imposed on Chinese imports to America. India, too, has seen a similar but smaller version of this trade battle play out – things have escalated especially since the Trump administration withdrew its preferential trade treatment towards India. Responding to this, India imposed tariffs on 28 US products over the weekend.

Move over, ‘Made in China’. It’s ‘Made in Bangladesh’ era now
In such a context, a stronger relationship between the two Asian giants might be in mutual interest.
Basu said the scope for the relationship to deliver on, especially economically, is vast.

“Despite the chemistry, India and China’s promises to each other on the economic front haven’t materialised on the ground. Major projects as well as investments in each country are stuck.”

Source: SCMP

Advertisements
14/07/2019

Indonesia asks China for special Belt and Road Initiative fund

  • Indonesian finance minister working on loan structure and criteria
Indonesian President Joko Widodo asked Chinese President Xi Jinping for a special belt and road fund at the G20 summit in Osaka last week. Photo: Reuters
Indonesian President Joko Widodo asked Chinese President Xi Jinping for a special belt and road fund at the G20 summit in Osaka last week. Photo: Reuters
Indonesia has asked China to set up a special fund within its Belt and Road Initiative for investment in Southeast Asia’s biggest economy, after offering China projects worth US$91 billion, Indonesian government officials said on Wednesday.
Indonesia has not been among the biggest beneficiaries of China’s trillion-dollar push to create a modern-day Silk Road.
Indonesia says this is because it has insisted that any loan within the initiative’s framework is done on a business-to-business basis to avoid exposing the government in case of default.
Indonesian President Joko Widodo made the request for a special fund during a meeting with Chinese President Xi Jinping on the sideline of the Group of 20 summit in Japan last week, Indonesia’s Finance Minister Sri Mulyani Indrawati said.
Japan still leads in Southeast Asia infrastructure race, even as China ramps up belt and road investments: report
Indrawati said she had been given the responsibility of coming up with the fund’s structure, including a proposal to China on the size of the fund and the criteria for loans from it.
“I am currently doing a study about its form, its mechanism, the size of it and of course the consequences of its costs,” she said.

Luhut Pandjaitan, coordinating minister for maritime affairs, said separately the fund should provide loans “with low interest in regards to investment in Indonesia, in partnership with Indonesian companies”.

Pandjaitan, who oversees belt and road projects in Indonesia, previously said the Indonesian government had offered China involvement in about 30 projects, worth US$91 billion, during the second Belt and Road Forum in April.

The most high-profile belt and road venture in Indonesia is a US$6 billion high-speed rail project connecting the capital, Jakarta, to the textile hub of Bandung, awarded to a consortium of Chinese and Indonesian state firms in 2015.

China expert lays out trillion yuan nuclear path for belt and road plan

The project has faced land ownership issues.

Another controversial project is a US$1.5 billion hydropower plant, funded by Chinese banks and being built by the Chinese state firm Sinohydro, in the heart of the Batang Toru rainforest on the island of Sumatra, which is home to the endangered Tapanuli orangutans.

Agus Djoko Ismanto, an executive of the power plant developer PT North Sumatra Hydro Energy, on Wednesday denied disrupting the orangutan habitat. He said 11 per cent of the construction had been completed and it was due to begin operation by 2022.

09/07/2019

China and India eye joint military drills as sides seek thaw after face-off on Himalayan border

  • Relations between the Asian giants had been strained after a 73-day military stand-off at their disputed border last year
The Chinese People’s Liberation Army in Beijing. Photo: EPA
The Chinese People’s Liberation Army in Beijing. Photo: EPA
China and India aim to hold joint army drills in China before the end of this year, China’s Defence Ministry said on Thursday, as the two countries continue a rapid rapprochement.
Relations between the Asian giants were strained last year over a 73-day military face-off in a remote, high-altitude stretch of their disputed Himalayan border.
Chinese ‘tourists’ face 7 years in Indian jail over shahtoosh shawls made from endangered antelope
But the neighbours have over recent months been working on mending ties and Chinese Defence Minister Wei Fenghe met Indian Prime Minister Narendra Modi in New Delhi in August.
Speaking at a regular monthly news briefing, Chinese Defence Ministry spokesman Wu Qian said that the joint exercise was planned for before the end of this year.
China and India are aiming to hold joint army drills this year as part of an ongoing rapprochement. Photo: EPA
China and India are aiming to hold joint army drills this year as part of an ongoing rapprochement. Photo: EPA

The two countries would meet in the southwestern Chinese city of Chengdu next month to discuss the arrangements, he added, without giving other details.

India and China fought a war in 1962 and the unresolved dispute over stretches of their 3,500km (2,200 miles) border has clouded relations ever since.

But the two big Asian economies share similar positions on a host of issues including concern about US tariffs and Chinese President Xi Jinping and Modi agreed in April to improve relations.

Source: SCMP

09/07/2019

Xi Jinping says China, Russia and India should take ‘global responsibility’ to protect interests

  • Chinese president also called for the three nations to uphold multilateralism in talks with Vladimir Putin and Narendra Modi in Osaka
  • In a separate meeting with other BRICS leaders, he said Beijing opposed ‘illegal and unilateral sanctions’ and ‘long-arm jurisdiction’
(From left) Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and Chinese leader Xi Jinping meet on the sidelines of the G20 summit in Osaka, Japan, on Friday. Photo: EPA-EFE
(From left) Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and Chinese leader Xi Jinping meet on the sidelines of the G20 summit in Osaka, Japan, on Friday. Photo: EPA-EFE
Chinese President Xi Jinping on Friday called on the leaders of Russia and India to take “global responsibility” to safeguard the three countries’ interests and uphold multilateralism, as Beijing seeks to rally support amid its protracted trade war with Washington.
Xi made the remarks during a trilateral meeting with Vladimir Putin and Narendra Modi on the sidelines of the annual 
Group of 20

summit of world leaders in Osaka, Japan.

The trilateral meeting was part of the Chinese leader’s efforts to marshal international support ahead of his 
high-stakes meeting

with US President Donald Trump, seeking to reach a truce on the year-long trade conflict between the world’s two biggest economies.

“The rise of protectionism and unilateralism has severely affected global stability and economic growth, as well as the existing international order which emerging economies and developing countries have relied on,” Xi was quoted as saying by state broadcaster CCTV.

“China, Russia and India should take on global responsibility to safeguard the fundamental and long-term interests of these three countries and the world,” he said.

Xi also called for the nations to promote “a more multipolar world and the democratisation of international relations” – meaning with less reliance on a US-led world order.

During a meeting with leaders of the other BRICS countries – major emerging economies Brazil, Russia, India, China and South Africa – Xi also said Beijing opposed what it saw as “illegal and unilateral sanctions” and “long-arm jurisdiction”.

The efforts to forge closer ties among China, Russia and India come as all three nations are locked in disputes with the United States.

New Delhi, a key strategic ally in Washington’s Indo-Pacific policy to contain China’s rise, has been upset over tariffs imposed on Indian goods by the Trump administration. Meanwhile, geopolitical rivalry and the Kremlin’s alleged meddling in US elections has strained relations between Moscow and Washington.

Beneath the smiles and handshakes, tensions simmer as world leaders meet for G20

Wu Jianghao, director general of the Chinese foreign ministry’s Asian affairs department, said the trilateral meeting laid out a framework for future cooperation.

“The three countries have spoken with one voice on some major global issues, helping stability and injecting positive energy to the current international situation – which is filled with instability and uncertainties,” Wu said at a briefing on Friday.

Wu said that the leaders did not talk about Huawei Technologies or 5G networks, but that the three countries had maintained good communication on telecoms issues and would continue to cooperate.

Washington has banned US companies from selling American technology to Huawei and put pressure on its allies to block the Chinese tech firm over security concerns.

(From left) US President Donald Trump, Japanese Prime Minister Shinzo Abe and Indian Prime Minister Narendra Modi pose for a photo before their meeting. Photo: AP
(From left) US President Donald Trump, Japanese Prime Minister Shinzo Abe and Indian Prime Minister Narendra Modi pose for a photo before their meeting. Photo: AP

Meanwhile, the United States is also seeking to build ties with India, with Trump holding trilateral talks with Modi and Japanese Prime Minister Shinzo Abe on Friday.

Indian Foreign Secretary Vijay Gokhale described that trilateral meeting as “very good”, saying it was “short but very productive”.

“The main topic of discussion was the Indo-Pacific, about how the three countries could work together in terms of connectivity, infrastructure and ensuring that peace and stability is maintained, and working together to build upon this new concept so that it would benefit the region as a whole and the three countries,” Gokhale said.

On the Modi-Trump bilateral meeting, he said the two leaders had “a very warm discussion”. They also briefly discussed 5G, with the focus on business cooperation between the two countries to leverage their technology and the potential of the Indian market, according to Gokhale.

He said the discussion of how to develop 5G networks was “in terms of business, not in terms of governments”. “It’s an exciting new area that India and the US can work together [on],” he said.

Source: SCMP

09/07/2019

‘We need to talk’: call for Chinese and Indian navies to communicate

  • Ambassador to China Vikram Misri says they will be ‘meeting more and more in common waters’, and more exchanges are needed
  • He also says preparations are under way for President Xi Jinping to visit India
The INS Kolkata arrives in Qingdao for PLA Navy 70th anniversary celebrations in April. The Indian ambassador called for more communication between the two navies. Photo: Reuters
The INS Kolkata arrives in Qingdao for PLA Navy 70th anniversary celebrations in April.
The Indian ambassador called for more communication between the two navies. Photo: Reuters
The Chinese and Indian navies should establish communication because they are increasingly operating within close proximity, according to India’s ambassador to China.

While the two nations’ militaries communicated extensively, it was mainly between their land forces, and that should be extended to the navies and air forces, Vikram Misri said.

“We need to talk about the two air forces and the two navies – especially the two navies – because we are operating in the same waters and increasingly in the coming years, we will be meeting more and more in common waters,” Misri said.

“I think it is important for us to develop those levels of understanding and communication,” he said. “There are some [navy and air force] exchanges now, but not as well developed as in the case of the land force.”
China and India have made efforts to repair their relations since a tense stand-off at the Doklam plateau two years ago, when communications between their forces along the border were seen as inadequate to contain the tension.
China and India have sought to repair relations after a tense stand-off at Doklam. Photo: AFP
China and India have sought to repair relations after a tense stand-off at Doklam. Photo: AFP

Misri said the two nations had made incremental progress, and opened new points where “border personnel can meet and exchange information, or exchange views about any particular situation”.

The ambassador was visiting the Indian consulate in Hong Kong over the weekend, six months after taking up the post and six weeks after Prime Minister Narendra Modi was re-elected.

He said preparations were under way for Chinese President Xi Jinping to visit India, which was expected to happen in the fourth quarter, after they pledged earlier to strengthen cooperation.

Tensions between 

China and India

have periodically flared along their 4,000km (2,485-mile) border, resulting in a brief war in 1962. Relations have also been strained by China’s ties with Pakistan, and India’s concern over China’s growing presence in the Indian Ocean.

India has also not signed on to China’s global trade and infrastructure strategy, the

Belt and Road Initiative

, which has projects that run through the disputed Kashmir region.

“Our concerns with regards to this particular initiative are very clear, and we have continued to share them very, very frankly with our Chinese partners,” Misri said. “I think there is understanding on the part of our Chinese partners with regard to this.”
Indian ambassador to China Vikram Misri said New Delhi’s concerns on the Belt and Road Initiative were clear. Photo: Xiaomei Chen
Indian ambassador to China Vikram Misri said New Delhi’s concerns on the Belt and Road Initiative were clear. Photo: Xiaomei Chen

But he said the two nations should not let their differences evolve into disputes, and they should focus on areas where they can cooperate.

One such area was maritime and investment cooperation in the Indo-Pacific region, including infrastructure and disaster response. The US in recent years has focused on the Indo-Pacific region, and has asked its allies to send naval vessels to the area as a counterbalance to Beijing.

“We have made the point that our vision of the Indo-Pacific is not a strategy, which sometimes is a concern on the part of some partners, aimed against any particular country,” Misri said. “It is definitely not a military alliance in any format.

“It is on the other hand a vision that aims at economic and development cooperation with our partners in the Indo-Pacific space,” he said, adding that India was discussing such cooperation with China.

He also said trilateral meetings between China, India and Russia would become more regular after their three leaders met on the sidelines of the 

Group of 20

summit in Osaka, Japan last month, when they vowed to uphold multilateralism.

Those meetings would allow the nations to address challenges facing the international trading system and pushback against globalisation, but Misri said they should not be seen as a bid to counter the US, which is also involved in a trade battle with India.

India also had a trilateral meeting with Japan and the United States during the G20 summit.

“The fact that these countries seek us out also shows that they see value in engaging with India, and we have important issues to discuss in each of these settings,” he said. “None of our individual relationships is going to come at the cost of a relationship with any other partner.”

The ambassador said there could be a broader consensus on counterterrorism. Photo: AP
The ambassador said there could be a broader consensus on counterterrorism. Photo: AP

Misri also said there could be a broader consensus between China and India on counterterrorism. The two nations have clashed over Indian efforts to blacklist Masood Azhar, leader of the Pakistan-based terror group Jaish-e-Mohammed (JeM), at the United Nations, which China objected to for years – a move seen in India as being done at the behest of Islamabad.

Azhar was finally listed as a global terrorist by the UN in May, after JeM claimed responsibility for a deadly terror attack on Indian security forces in Pulwama in February, although the listing did not directly reference the attack.

“It could have happened earlier … but I’m glad that it did happen, and we hope to build on that – that should be taken as progress, and we hope to build on that in the coming years,” Misri said.

“Everybody is aware of the context in which the listing happened, and therefore, I don’t think it’s hidden from anybody as to what this was aimed at or who this was aimed at, or what the motivation for the action might have been.”

As for the tensions between India and Pakistan following the terror strike in Indian-controlled Kashmir, Misri said progress would be “largely dependent on Pakistan” and the actions it needed to take to address the “ecosystem of terror that prevails in different parts of that country”.

Source: SCMP

08/07/2019

World cannot shut China out, vice president says, in jab at U.S.

BEIJING (Reuters) – China and the rest of the world must co-exist, Vice President Wang Qishan said on Monday, in an indirect jab at the United States, with which Beijing is trying to resolve a bitter trade war.

Top representatives of the world’s two biggest economies are trying to resume talks this week to try and resolve their year-long trade dispute, which has seen the two countries place increasingly harsh tariffs on each other’s imports.

The Trump administration has accused China of engaging in unfair trade practices that discriminate against U.S. firms, forced technology transfers and intellectual property rights theft. Beijing has denied all the charges.

“China’s development can’t shut out the rest of the world. The world’s development can’t shut out China,” Wang told the World Peace Forum at Beijing’s elite Tsinghua University.

He also warned against “protectionism in the name of national security”, but without mentioning the United States, and urged major powers to make greater contributions to world peace.

China has also been angered by U.S. sanctions against tech giant Huawei Technologies Co Ltd over national security concerns, and U.S. visa curbs on its students and academics.

In his speech, Wang, who is extremely close to Chinese President Xi Jinping and rarely speaks in public, reiterated China’s commitment to opening up.

“Large countries must assume their responsibilities and set an example, make more contributions to global peace and stability, and broaden the path of joint development,” he added.

“Development is the key to resolving all issues,” Wang, who became vice president last year, after having led Xi’s fight to root out corruption, told an audience that included Western diplomats based in Beijing and former European Council President Herman Van Rompuy.

“NOT A RATIONAL ACTION”

The United States should not blame China for the problems it is facing, Vice Foreign Minister Le Yucheng told the forum later.

“Viewing China as the enemy is not a rational action,” the foreign ministry quoted him as saying, adding that China would not put up “high walls” or “decouple itself from any country”.

China has been nervous that the United States is seeking to sever, or at least severely curb, economic links, in what has been called a “decoupling”.

Tariff, trade, finance and science and technology wars are “turning back the clock on history,” Le said. “The consequences will be extremely dangerous.”

The two sides have communicated by telephone since last month’s summit of leaders of Group of 20 major nations in Japan, at which U.S. President Donald Trump and Xi agreed to relaunch stalled talks.

Talks broke down in May, after U.S. officials accused China of pulling back from commitments previously made in the text of an agreement negotiators said was nearly finished.

The countries have also been at loggerheads over issues ranging from human rights to the disputed South China Sea and U.S. support of self-ruled Taiwan, which China claims as its own.

No matter how the international situation or China developed, Vice President Wang said, the country would follow the path of peace, and not seek spheres of influence or expansion.

“If there is no peaceful, stable international environment, there will be no development to talk of.”

Source: Reuters

07/07/2019

China says briefed by U.S. on latest Trump-Kim meeting

BEIJING (Reuters) – China has received a briefing from the United States on the latest meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un, China’s Foreign Ministry said on Saturday, in a call between two senior diplomats.

Trump became the first sitting U.S. president to set foot in North Korea on Sunday when he met Kim in the Demilitarized Zone (DMZ) at Panmunjom between the two Koreas and agreed to resume stalled nuclear talks.

Chinese Vice Foreign Minister Luo Zhaohui and U.S. Special Representative for North Korea Stephen Biegun discussed that meeting in a telephone call on Friday, China’s Foreign Ministry said in a short statement.

“Biegun introduced the meeting between the U.S. and North Korean leaders at Panmunjom, and said the U.S. side is willing to strengthen communication and coordination with the Chinese side on the peninsula issue,” the ministry added.

Luo told Biegun the recent “positive interactions” on the North Korean issue by all parties had important meaning for the peace talks process, the ministry said.

“China supports U.S.-North Korea exchanges and dialogue and hopes that the two sides will meet each other halfway and follow the consensus of the leaders of the two countries to resume consultations at the working level as soon as possible,” it added.

Trump’s meeting with Kim came around a week after Chinese President Xi Jinping met Kim himself during a state visit to Pyongyang.

While China has not officially announced it, Luo is likely China’s new special envoy for the North Korea issue, after predecessor Kong Xuanyou became China’s new ambassador in Tokyo in late May.

Luo was also involved in a briefing to Chinese reporters on Xi’s visit to North Korea before Xi went, according to state media.

Luo is an urbane career diplomat who speaks good English, according to diplomats who have met him.

He previously served as China’s ambassador in Canada, Pakistan and India, and also worked in the Chinese embassy in Washington from 1996-2000.

Source: Reuters

05/07/2019

Chinese president appoints new ambassadors

BEIJING, July 4 (Xinhua) — Chinese President Xi Jinping has appointed six new ambassadors in accordance with a decision by the Standing Committee of the National People’s Congress, according to a statement from the national legislature Thursday.

Chen Hai was appointed ambassador to Myanmar, replacing Hong Liang.

Chang Hua was appointed ambassador to Iran, replacing Pang Sen.

Liao Liqiang was appointed ambassador to Egypt, replacing Song Aiguo.

Xu Erwen was appointed ambassador to Croatia, replacing Hu Zhaoming.

Yi Xianliang was appointed ambassador to Norway, replacing Wang Min.

Chen Xu was appointed China’s permanent representative and ambassador to the United Nations Office at Geneva and other international organizations in Switzerland, replacing Yu Jianhua.

Source: Xinhua

04/07/2019

China, Bulgaria lift ties to strategic partnership

CHINA-BEIJING-XI JINPING-BULGARIAN PRESIDENT-TALKS (CN)

Chinese President Xi Jinping (2nd R) and his wife Peng Liyuan (1st R) pose for photos with Bulgarian President Rumen Radev (2nd L) and his wife in Beijing, capital of China, July 3, 2019. Chinese President Xi Jinping held talks with Bulgarian President Rumen Radev here Wednesday. (Xinhua/Huang Jingwen)

BEIJING, July 3 (Xinhua) — Chinese President Xi Jinping on Wednesday held talks with Bulgarian President Rumen Radev in the Great Hall of the People in Beijing, and they decided to lift state-to-state ties to a strategic partnership.

Bulgaria was one of the first countries to establish diplomatic relations with New China, Xi noted, hoping that the two countries take the strategic partnership as a new starting point, work together to cope with the test of international changes and inject new impetus into bilateral cooperation.

Xi stressed that the two sides should respect and trust each other and strengthen exchanges between the two governments, legislative bodies and political parties while maintaining mutual support on issues involving each other’s core interests and major concerns.

“The two countries share many of the same or similar views on the international situation and should jointly safeguard the international system based on multilateralism and the international law,” said Xi.

Bulgaria is also one of the first Central and Eastern European countries to sign intergovernmental cooperation documents with China on the Belt and Road Initiative. Xi said China is willing to strengthen the synergy between the two countries’ development strategies, promote infrastructure connectivity, expand trade and investment and cement people-to-people exchanges.

Xi reiterated China’s firm support for the European integration process, EU’s unity and growth and Europe’s more important role in international affairs, saying that China’s upholding such stances is not an expedient measure.

“It is hoped that the new EU institutions will maintain the stability and continuity of their China policy,” said Xi, who also expected the new EU institutions to work with China to promote the building of partnership on the basis of mutual respect, fairness and justice, cooperation and win-win result.

“Bulgaria is a good friend and partner of China in the EU and an important participant and advocate of the cooperation between China and the Central and Eastern European countries. It is hoped that the Bulgarian side will continue to play a constructive role in this regard,” said Xi.

Radev said he was very happy to visit China on the occasion of celebrating the 70th anniversary of the establishment of bilateral diplomatic ties.

Lifting the bilateral ties to a strategic partnership will further strengthen the foundation of bilateral relations, said Radev.

Radev said the Bulgarian side is ready to deeply participate in the Belt and Road Initiative by giving full play to its advantages of location in the region and trying to become a gateway and hub connecting Europe and Asia.

The Bulgarian side is willing to expand cooperation with the Chinese side in such areas as trade, transportation, aviation, logistics, finance, innovation, local areas and people-people exchanges, and welcomes Chinese enterprises to increase investment in Bulgaria, said Radev.

While expressing Bulgaria’s support for multilateralism and the World Trade Organization, the Bulgarian president said his country stands ready to step up communication and work for advancing Europe-China relations and cooperation between the Central and Eastern European countries and China.

Source: Xinhua

04/07/2019

Samsung and other South Korean companies’ exodus from China sets an example to Western firms fleeing trade war tariffs

  • Lotte, Kia and Hyundai are also gradually winding down their China business due to political risks, tariffs and losing market share
  • Western companies fleeing Donald Trump’s tariffs may not have luxury of a managed exit, but should look at the South Korean case studies closely, experts say
Samsung’s last mobile phone production line remaining in China in Huizhou is winding down, implementing a voluntary retirement programme. Photo: He Huifeng
Samsung’s last mobile phone production line remaining in China in Huizhou is winding down, implementing a voluntary retirement programme. Photo: He Huifeng
Upon landing in Australia in 2017 to attend a seminar, a senior politician with South Korea’s parliamentary defence committee was greeted by Julie Bishop, then Australia’s foreign minister, who had a burning question: “How are you dealing with the China threat?”
Bishop was referring to the treatment of South Korean firms in China, which escalated after Seoul agreed in 2016 to a long-standing request from the United States to allow the deployment of the Terminal High Altitude Area Defence system (THAAD) on South Korean soil.
Lotte Corporation, one of Korea’s chaebol conglomerates that dominate its economy, had sold a plot of land in Seongju county to the South Korean government, on which the system’s radar and interceptor missiles were set up. While both Washington and Seoul said it was meant to counter threats from North Korea, Beijing viewed THAAD as a security risk, since its radar had the range to monitor China’s nearby military facilities.
After it was deployed in 2017, THAAD triggered widespread boycotts of Lotte’s retail operations in China, with the state-owned media acting as aggressive cheerleaders. The company was sanctioned by Beijing, with its expansion plans in China grinding to a halt on the orders of the Chinese government.
The Terminal High Altitude Area Defence (THAAD) arrived in Seongju in September 2017. Photo: Reuters
The Terminal High Altitude Area Defence (THAAD) arrived in Seongju in September 2017. Photo: Reuters

Australia – like South Korea – is heavily dependent on trade with China, but is also closely bound to the US in defence and political terms, and Bishop feared that should Australia fall out of favour with Beijing, Australian companies could face similar risks, and so she sought the counsel of the politician, who asked not to be named.

The case of Canadian canola and meat exports being banned from China, reportedly in retaliation for the arrest of Huawei chief financial officer Meng Wanzhou, also known as Sabrina Meng and Cathy Meng, is an example of how third nations can be drawn into the modern day superpower rivalry.

Many analysts say the efforts of South Korean firms in China should be essential study material for Western governments and businesses about the political risks of doing business in the mainland, which are growing as the US-China trade war threatens to draw in other nations and expand into a broader geopolitical struggle.

But large South Korean firms have been gradually withdrawing from China for a number of years – even before the THAAD crisis – and have been able to leave on a managed basis. They are leaving to avoid a repeat of the political crisis that ruined Lotte’s China business, and to avoid tariffs on exports of their China-made products to the US.

Lotte have been forced to close retail operations in China. Photo: Reuters
Lotte have been forced to close retail operations in China. Photo: Reuters

But they are also leaving because Chinese firms have become much more competitive in the domestic market that South Korean companies had found so fruitful for more than a decade – a fate that could easily befall Western companies that are eyeing China’s burgeoning middle-class consumer market. Now, while American firms are considering exiting China and setting up in nations that have lower tariff access to the US, South

Korean competitors have had a few years’ head start.

“In a way, all the problems that some South Korean companies had since 2017 might be a blessing in disguise. It meant that they started all of this [supply chain shift] two years before all the other companies,” said Andrew Gilholm, Seoul-based director of analysis for China and Korea at political risk advisory, Control Risks.

Another chaebol, Samsung Electronics, opened its first plant in Vietnam in 2008 and this long-term presence has enabled it to build a supply chain of South Korean companies, which in turn makes it easier for other South Korean firms to establish a base in the Southeast Asian nation.

We have experienced some of the worst situations in China over the past few years and learnt that the political risk there wouldn’t just simply go away overnight Ex-Lotte Shopping manager

As a result, South Korean investment into Vietnam climbed to US$1.97 billion in the first half of 2018, exceeding the country’s investment in China of US$1.6 billion over the same period for the first time, according to the Export-Import Bank of Korea.

Overall in 2018, South Korea’s total investment to the Southeast Asian country totalled US$3.2 billion. Its exports to Vietnam also increased to US$48.6 billion, 121 times that of 1992, when the two countries established diplomatic relations, and the trend is expected to continue.

“We have experienced some of the worst situations in China over the past few years and learnt that the political risk there wouldn’t just simply go away overnight,” said a former manager of Lotte Shopping, the chaebol’s retail arm, who spoke on condition of anonymity.

“China may pass all the legislation ensuring the safety of foreign investments and the rights of multinational companies, but the chance of it swinging away again when there is another political confrontation is just too high … we cannot afford to take any more risk.”

China eventually lifted its economic sanctions on Lotte in April, and the municipal government of Shenyang, the capital of Liaoning province in Northeastern China, gave the company permission in May to resume work on the US$2.6 billion Lotte Town shopping and leisure development.

But according to a person close to the project, Lotte is considering selling the complex after its completion, as it does not wish to continue its retail business in China. A Lotte spokesman declined to comment, saying the situation is “complicated”.

On one hand, its eagerness to leave China reflects the volatility in the market, but on the other, its decision to complete the construction of project before leaving suggests an unwillingness to burn bridges in the process, analysts said.

Samsung is another South Korean giant downsizing its Chinese manufacturing presence after it closed its Shenzhen production line in May 2018, followed by its Tianjin factory in December.

Samsung has been very aware of the potential issues around those closuresJason Wright

Its last remaining mobile phone production line in

China, in Huizhou, is also winding down,

implementing a voluntary retirement programme. Samsung is also considering moving some television manufacturing from China to Vietnam, according to a company insider.

However, it too, is carefully managing its exit strategy, said Jason Wright, founder of Hong Kong-based intelligence firm Argo Associates, who is advising a growing number of South Korean companies seeking to leave China. Samsung is still a large supplier of microchips to Chinese companies like Huawei, and to exit on negative terms could disrupt its ongoing business.
“Samsung has been quite generous in the packages that have been offered [to workers in the factories that it has closed],” Wright said. “Samsung has been very aware of the potential issues around those closures.”
As well as the political risks and tariffs, Samsung has seen its mainland market share in several product queues shrink dramatically due to competition from Chinese rivals. Its share of China’s smartphone market, for example, fell from 20 per cent in 2013 to just 0.8 per cent last year, according to Strategy Analytics, a market research firm.
Over the same period, it has been moving its supply chain out of China in a “subtle and imperceptible” way, according to Julien Chaisse, a professor of trade law at City University of Hong Kong who has advised, among others, Lotte on its plans to relocate to Vietnam.
Samsung Electronics opened its first plant in Vietnam in 2008. Photo: Cissy Zhou
Samsung Electronics opened its first plant in Vietnam in 2008. Photo: Cissy Zhou
As stories emerged in June that Apple was considering a partial exit of China, it was impossible not to see parallels. iPhone sales in China fell 30 per cent in the first quarter of 2019, according to research firm Canalys, while smartphones will be among those facing a potential tariff of up to 25 per cent, although this has been at least delayed after the trade war truce agreed by

US President Donald Trump

and Chinese President Xi Jinping at the

G20 summit in Osaka.

Meanwhile, South Korean car companies Kia and Hyundai’s combined market share in China fell to 2.7 per cent last year, from about 10 per cent at the beginning of the decade. Both companies, which have shared ownership, are downsizing their Chinese operations.

“In the past, China was just a great market, but for Korea, now China has become a competitor. So that is really a change in the dynamic over the last five years. China was not really able to compete with Korea in most areas,” said Wright from Argo Associates.

City University of Hong Kong professor Chaisse traces the exodus of South Korean firms back to 2014, before THAAD and before the trade war, and highlighted an arcane arbitration case at the United Nations’ dispute settlement courts as a turning point. After that case, South Korean companies in China faced an increasingly hostile environment.

Filed in 2014 and settled in 2017, the case emerged after South Korean company Ansung Housing had been forced to sell a golf resort it was developing in Eastern China after a change in the country’s real estate legislation.

Ansung took the case to an arbitration panel, claiming it breached a Sino-Korean investment treaty. The company won – only the second defeat for China in two decades of participation in the court, but this ushered in a “change in atmosphere” for South Korean firms.

“My take is that while the Korean case is unique for a number of reasons, it highlights what is going to happen to many other foreign companies operating in China,” Chaisse said.

“I think very soon even European compa