Chindia Alert: You’ll be Living in their World Very Soon
aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.
Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.
The POSTs (front webpages) are mainly 'cuttings' from reliable sources, updated continuously.
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The trip comes amid growing resistance from European leaders over what they see as China’s failure to change long-term practices unfair to foreign investors
French President’s trip to Beijing follows Chinese leader’s visit to France in March
President Emmanuel Macron of France speaks to the Council of Europe parliamentary assembly on Tuesday. Photo: AFP
French President Emmanuel Macron will visit China next month as Europe’s most diplomatically active leader focuses on climate change cooperation and trade promotion with Asia’s leading power, a source briefed on the Elysee Palace’s discussions said.
This will be the second Chinese tour for Macron since he took office in 2017, and it will come amid escalating resistance from European politicians and business communities over what they see as China’s failure to change long-standing practices unfair to foreign investors.
His visit also comes at a time when France – as well as the European Union as a whole – is bracing for Washington’s potential levies of tariffs on European products, and the lack of progress on climate change policies with US President Donald Trump’s administration.
“President Macron will meet President Xi [Jinping], while France strives for better cooperation with China on climate and trade,” the source said. “His itinerary is still in the pipeline, but he is expected to visit Beijing and Shanghai.”
Macron, 41, who is widely seen as emerging as Europe’s most aggressive leader filling the political vacuum left by German Chancellor Angela Merkel’s political twilight, has cast himself as an honest broker between Russia and Ukraine, and between the US and Iran.
He has also been critical of China’s influence in Europe, joining forces with Merkel to push for a tougher EU stance on the world’s second biggest economy.
In March, when Xi claimed a major diplomatic victory by clinching a memorandum of understanding with Italy on the Belt and Road Initiative, Macron declared: “The time of European naivety is ended. For many years we had an uncoordinated approach and China took advantage of our divisions.”
Macron also backed investment screening mechanisms for Chinese business moves in Europe, while endorsing plans to change the EU’s notoriously strict antitrust rules in order to facilitate mergers between large European groups and companies to counter Chinese companies’ global ambitions.
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The EU is also wary of China’s effort to “divide and rule” the European Union. Greece and Hungary – both recipients of large amounts of Chinese investments – have repeatedly wanted to water down EU’s stance on issues deemed sensitive to Beijing, including the South China Sea and China’s human rights violations.
“It would be good [for Macron] to stress that 17+1 is irritating,” said Joerg Wuttke, president of EU Chamber of Commerce in China, in reference to China’s engagement with a group of EU and non-EU member states in eastern and southeastern Europe.
“After all, the EU has a ‘one China’ policy, [so] EU could expect this position from China too.”
Macron’s domestic call for EU unity has translated into diplomatic appeals, with China being one of the targets.
(From left) Jean-Claude Juncker, president of the European Commission; Xi Jinping, China’s leader; Emmanuel Macron, France’s president; and Angela Merkel, Germany’s chancellor, ahead of a meeting in Paris on March 26. Photo: Christophe Morin/Bloomberg
When Xi visited France in March, Macron hosted him at the Elysee Palace in the presence of Merkel and European Commission President Jean-Claude Juncker, showcasing European solidarity when it comes to EU-China policies.
In terms of French-Chinese bilateral ties, trade imbalances have persisted after Macron called for a “rebalancing” during his last visit.
France has a 1.4 per cent market share in China, compared with China’s 9 per cent market share in France. China represents France’s largest bilateral trade deficit, totalling €US$29.2 billion (US$31.9 billion) last year, ahead of Germany.
The EU has been calling for reciprocal investment treatment with China, a call that European business leaders in China expect Macron to make.
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“We [Europe] need … a solid investment agreement to allow EU business to conduct their affairs in a similar manner as Chinese companies can operate in Europe. The agreement should be finalised in 2020, but not at all cost,” said Wuttke.
“The last thing EU business needs in China is a weak agreement that institutionalises imbalances,” he added.
Part of that involves building “more efficient defensive tools to prevent abusive technology transfers and to address the deep asymmetry in EU-China relations when it comes to access to public procurement markets,” said Mathieu Duchâtel, director of Asia programme at the Paris-based think tank Institut Montaigne.
Duchâtel added that it was also important to convey the message to Beijing that there are areas for cooperation even amid a more defensive China policy from France.
Chinese President Xi Jinping and French leader Emmanuel Macron toast raise a toast during a state dinner in Paris on March 25. Photo: EPA-EFE
One such area is the climate and environment, where China is “an important partner” for France to reach its goal of global carbon neutrality by 2050, he said.
“The energy/environment agenda is a political priority in Paris and one of very few issues on which cooperation with China remains promising and will continue to create business opportunities,” he said.
China is the world’s biggest carbon polluter, producing around 30 per cent of the planet’s man-made carbon dioxide. It remains committed to the 2015 Paris accord on climate change, even after Trump pulled the US out of the deal.
Under the agreement, the long-term temperature goal is to keep the increase in global average temperature to well below 2°C above pre-industrial levels, and to pursue efforts to limit the increase to 1.5°C.
When Kazakh actress Reyizha Alimjan arrived in Shanghai last month wearing jeans and a camisole it reignited a long-running debate over who gets a say on how Chinese women should dress
Fashion choices that would be regarded as unremarkable in Europe or North America are often seen as outrageous in the world’s most populous nation
Kazakh actress Reyizha Alimjan’s fashion choices sparked a social media storm in China last month. Photo: Weibo
When Li Xiang broke up with her boyfriend over a selfie she posted on social media, it was not just about a woman letting a man know he wasn’t entitled to tell her how to dress in public, but a matter of personal freedom, social norms and cultural tradition.
A few weeks ago, the 24-year-old media worker from Shanghai shared a photo on WeChat that showed her posing at her bedroom door in a camisole and mini shorts. Her boyfriend said it made him very “uncomfortable”, and they quarrelled.
“‘Look how scantily clad you are, and [if] that is not enough, you shared it online,’ he said,” Li recalled.
“I got mad when he said, ‘You should go and ask other men if they’d like their girlfriends to dress like that’, as if he should decide what I wear – as if I were his appendage,” she said, referring to the archaic notion that a woman is secondary to a man in their relationship.
What clothes Chinese women should or should not wear has been the subject of intense online debate in recent weeks. Photo: EPA
Their argument was not unusual in China, especially over the past month when the online world became embroiled in a war of words about women’s freedom to dress as they please.
The controversy erupted when an article defending Reyizha Alimjan – the Kazakh actress criticised for showing too much flesh when she arrived at an airport in Shanghai in late July wearing jeans and a camisole – appeared on a WeChat movie review account called Staff of the 3rd Hall on August 12.
Reyizha Alimjan was criticised for her outfit on Chinese social media. Photo: Weibo
While that perspective was supported by many women online, others disagreed and said that society was open and tolerant but that people had the right to disagree.
By coincidence, a poll about women wearing camisoles in public was launched on August 10 by a WeChat account called Cicada Creativity. About 70 per cent of the nearly 14,000 respondents said they did not dare to do so.
More than 40 per cent avoided doing so for reasons such as thinking they were “not thin enough”, but a quarter said they said no because either their boyfriends disapproved or would not allow it, or they feared they would be harassed.
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Joy Lin, a feminist from Shanghai, said the debate was so fierce because it was not just about dress.
“It’s more about people’s judgment about one’s character and morals behind what she wears,” Lin said. “If you wear revealing clothes, they would say you are asking for harassment. If you show a little skin, you are frigid. And if you are casual, they call you ‘dama’ [Chinese slang, often derogatory, for middle-aged and elderly women].”
Some women say they are often judged by the clothes they wear. Photo: AP
In her experience, Lin said that if she appeared on the streets of Shanghai – the most cosmopolitan city in China – without a bra, there would be judgmental looks from passers-by before she had walked 10 metres (33 feet).
In contrast, she did just that in Paris in July, and, “no one stared at me or came near me at all”.
“Usually, when it comes to comments about what we wear, they’re not about whether the dress matches the hairstyle or things like that, but about our bodies, whether we’re slim or not and stuff like that,” she said. “Some [comments] can be very malicious and insulting.”
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While shaming women for their clothing choices has been an issue for many years, it reached peak public awareness in China after the #MeToo movement took off in the US.
The social media campaign went viral in 2017 when dozens of women accused American film producer Harvey Weinstein of sexual assaults over a period of nearly 30 years.
The #MeToo movement took off in the US in 2017 after dozens of women accused film producer Harvey Weinstein of sexual assault. Photo: Shutterstock
Lu Peng, a researcher from the Shanghai Academy of Social Sciences, said the online debate helped encapsulate conflicts between a growing desire for freedom, gender norms and generations of tradition.
“There will hardly be a consensus on such a question about whether women have the freedom to dress,” he said. “But if this discussion can make people realise that men, not just women, also face restrictions in dressing, then it’s bringing progress.”
The simplest example was to dress for the occasion, which applies to both sexes.
“We have never been free in dressing. We’re only free within a certain extent … About what to wear in public, I don’t think we should emphasise freedom only and ignore the local culture and society,” Lu said.
Keeping a low profile has long been part of the Chinese philosophy. Photo: Xinhua
In China, there is no law banning states of dress or undress in public, nor do the Han people, who make up most of the population, have religious beliefs that restrict their mode of dress. But keeping a low profile and avoiding unwanted attention has long been part of the Chinese philosophy.
“My father will also ask me not to be ‘overexposed’, because he believes it’s increasing the risk of being harassed,” Li, the Shanghai media worker, said.
“They think they mean well, but I just want to be myself. I’m not breaking any law. I want to make my own contribution in changing this culture,” she said.
Beijing has lent billions of dollars to countries on the continent to build railways, highways and airports but critics say the borrowings are unsustainable
Chinese officials say the projects will pay off in the long run and host nations are well aware of their limits and needs
Illustration: Lau Kakuen
When Clement Mouamba went to Beijing last year, he had two main tasks.
The prime minister of the Republic of Congo needed to find out exactly how much his country owed to China, a number the struggling, oil-rich central African nation had until then not been able to provide the International Monetary Fund (IMF) to qualify for a bailout. He also needed to convince Beijing to restructure its debt to ensure sustainability.
The IMF had put talks for further loans on hold until Mouamba’s administration could say exactly how much it had to repay to the country’s external creditors, including China – the republic’s single largest bilateral lender – and oil multinationals such as Glencore and Trafigura.
The country, which heavily depends on oil revenue, turned to China and private oil majors for funding to run the government when in 2014 oil prices fell from a high of US$100 per barrel to as low as US$30.
The Republic of Congo has since restructured its borrowings from China, which holds about a third, or US$2.5 billion, of the Congolese debt, by extending the repayment period by an additional 15 years.
A number of other African countries struggling to service their loans from Beijing have also pursued concessions. Ethiopia has had part of its Chinese debt written off and terms relaxed for the US$3.3 billion loan it took to build its railway, while Zambia is seeking similar adjustments for its borrowings used to build airports and highways.
Critics say countries on the continent are being burdened with unrealistic levels of debt for inviable infrastructure backed and built by China without adequate transparency and scrutiny.
The biggest concern is that several African countries will be left with huge debts and grandiose infrastructure that they cannot maintain and run profitably. I liken it to borrowing money to buy a Tesla when you don’t have adequate access to electricity: Obert Hodzi of the University of Helsinki in Finland
But Chinese observers say the West must take some of the blame for the countries’ debt problems and that the support China offers will benefit the host countries in the long run.
In the early 1990s, when China began to embrace Africa again after years of isolation from the outside world, the aspiring manufacturer was at a serious disadvantage in the race for raw materials and markets for its industrial goods.
The former colonial powers of the West had already sewn up deals for many of the continent’s most lucrative and readily exploitable reserves, from fossil fuels to minerals.
China needed new strategies to convince African governments to allow it access raw materials for its industries and markets for its products to a largely unfamiliar partner.
China also wanted to challenge the dominance of the US in global trade and politics so it courted allies in Africa to help it push for political legitimacy in international institutions.
A Kenya Railways freight train leaves the port station on the Mombasa-Nairobi railway in Mombasa, Kenya, a huge project backed by China. Photo: Bloomberg
At the time, many African leaders were under fire to liberalise their economies. China’s approach was to promise not to meddle in individual country’s internal affairs and assure African countries that they could get billions in exchange for future delivery of minerals through resource-backed deals.
Beijing sold its policies that it had no conditions attached to its development finance. In the drive to drum up business, China promised affordable loans for African countries to build roads, bridges, highways, airports and power dams.
Is Kenya’s Chinese-built railway a massive white elephant?
But Beijing also pursued tied finance, ensuring that countries borrowing from China used Chinese contractors to implement the projects rather than open them up to outside bids.
In addition, many of the deals were built on weak financial, technical and environmental conditions, with Chinese state firms conducting the technical feasibility, environmental impact assessment and financial viability studies for free for projects that they also build.
For example, in Kenya, the China Road and Bridge Corporation conducted a free feasibility study that was used in the construction of the railway.
The same company was handed the contract to implement the project and is operating both the passenger and cargo train service for a fee.
Chinese companies were responsible for the construction of a rail line between Addis Ababa and Djibouti. Photo: AFP
In contrast, the World Bank and its partner institution, the IMF, demand that such studies be done by an independent consultant and not by the company that implements the project.
According to data compiled by the China-Africa Research Initiative, at the Johns Hopkins University School of Advanced International Studies, Beijing has advanced loans worth US$143 billion to African countries since 2000, levels that some critics say are unsustainable for the borrowers.
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For many of China’s new African partners, these arrangements – from easy lending terms, to non-competitive bidding and opaque contract details – have led to new problems – problems that corrupt or poorly managed governments now share substantial responsibility.
Some critics, both in the West and in host countries, suggest there is a “debt-trap strategy” at the heart of Beijing’s push for international business and influence, but there is no evidence that China deliberately pushes other countries into debt to seize their assets or gain sway.
However, the drive for overseas contracts and big business has led some countries into difficulties with new debts, and there are question marks over the viability of many of the projects the money is funding.
Obert Hodzi, an international relations expert at the University of Helsinki in Finland, said the Addis Ababa-Djibouti railway and the Mombasa-Nairobi railway were good examples of huge projects that were financed by easy borrowing terms from China but were not sustainable and that had in turn forced the African partners to seek further Chinese help.
“The biggest concern is that several African countries will be left with huge debts and grandiose infrastructure that they cannot maintain and run profitably,” Hodzi said. “I liken it to borrowing money to buy a Tesla when you don’t have adequate access to electricity.”
Ken Opalo, a Kenyan scholar at Georgetown University in Washington, said the key issue was the inability of African countries to design projects that were actually needed for the local economies.
A road is not just a means of transport but an economic belt or corridor that will catalyse the development of the whole region: Huang Xueqing, spokeswoman for the Chinese embassy in Nairobi
“Most African countries have been willing to accept projects designed, financed, and implemented by Chinese firms,” Opalo said.
“It would be better to decouple the feasibility studies and design phases of projects from the financing. That way African governments can ensure that they are truly getting value for money.”
But Chinese officials said Beijing had invested in infrastructure largely at the request of the host countries, adding that it could take time to yield returns on the projects.
Huang Xueqing, spokeswoman for the Chinese embassy in Nairobi, said the projects were valid assets with value that would grow in time.
“So, in the long run, it is beneficial to the host countries. Just like when young people buy a house with a mortgage, they may take some debts, but they have a place to live in and have their own assets,” Huang said.
“Underdeveloped infrastructure is the bottleneck that has been holding back Africa’s development. Up to today, many African countries, although in the same continent, are not connected with direct flights, railways or even roads. You have to fly to Paris or Zurich in order to get to some African countries.
“A road is not just a means of transport but an economic belt or corridor that will catalyse the development of the whole region.”
Huang said Beijing had advised the countries to act within their means and not to overstretch themselves when they considered projects that might not be in line with local conditions.
“When making investment decisions, the Chinese side, along with the recipient countries, carry out rigorous feasibility studies and evaluations. We do things according to our ability,” she said.
China’s leadership has also said it is paying close attention to the fiscal and financial difficulties faced by some African countries.
“As a good friend and good brother … the Chinese side is willing to lend a helping hand when needed by the African people to help them overcome temporary difficulties,” State Councillor and Foreign Minister Wang Yi said in January while on a trip to Ethiopia, adding that the debt situation in Africa is also a legacy issue.
China must allay any debt-trap fears in its dealings with Africa
“The African debt issue does not come up today, still less is it caused by the Chinese side. The African people know who are the initiators of African debt.”
The West should take a lot of the blame for worsening debt problems in some African countries, according to Li Anshan, from Peking University’s Centre for African Studies.
He cited the cases of Liberia and the Democratic Republic of Congo, two countries that have had close relations with the West for many years but remain ravaged by war and poverty despite immense natural resources.
“China-Africa relations have been going on for quite some time. Is there any African country which has got poorer because of its deal with China?” Li said.
Gyude Moore, a former Liberian minister of public works whose department oversaw construction and maintenance of various public infrastructure funded and built by China, said it would be difficult to imagine that China would knowingly ensnare its partners in debt.
“China attempts to differentiate itself from Western donors by limiting non loan-related conditionality. China also practices non-interference, so how a country manages its resources, treats its people or deploy its finances were considered ‘internal’,” he said.
“So, Chinese loans are negotiated faster and place less emphasis on public financial management.”
Moore, now a visiting fellow at the Centre for Global Development, said there were trade-offs in such situations.
China focuses on sustainable projects to dismiss fears of African debt trap
“If the loans are going to be fast – the due diligence will not be as rigorous. Chinese project selection mixes political with economic considerations. So, while a project may not make as much economic sense, it may pay political dividends,” he said.
He said non-transparent processes would invite abuse, be they Chinese, Western or African.
Other observers say the question of opacity is more directly related to China’s own economic system.
Howard French, author of China’s Second Continent: How a Million Migrants are Building a New Empire in Africa, said China has very limited transparency and public accountability in its own domestic processes.
The Mombasa railway station is seen in Mombasa, Kenya, in 2018. Photo: Xinhua
“So it would be unusual to expect that China would introduce greater transparency and accountability in its dealings with African countries than it is used to at home – that is, unless African governments insist on it,” French said.
“And this is where African governance comes in. African states should insist on contract transparency but often don’t do so because that offers leaders plentiful opportunities for graft.”
David Shinn, professor of international relations at George Washington University in Washington, agreed that China’s lack of loan transparency was a huge problem and increased the risk of corruption on both the African and Chinese sides. But he also said that in some cases, African governments might have negotiated poorly.
“This is, however, the responsibility of the African government. I don’t think China is purposely trying to encourage African debts in order to gain leverage,” Shinn said.
“In fact, China is becoming more careful about its lending because it is concerned it has made too much credit available to some African countries.”
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Huang Hongxiang, director of China House, a Nairobi-based consultancy that helps Chinese in Africa integrate better, agreed, saying the Chinese government needs to communicate more about projects in Africa but African countries also have a bigger part to play in ensuring better deals.
“On commercial viability, accountability, transparency and governance, I believe the responsibility does not lie with China, the US or the West but in the hands of African countries,” he said.
Wherever the fault lies, one thing is clear when money is wasted on ill-designed projects that have little to no economic return, according to Opalo.
“The lack of planning and transparency creates default risks … [and] African taxpayers will be left holding the bag.”
This article is the third in a series examining the local impact of Chinese investment and infrastructure projects in Africa. Read part one here and part two
Civil affairs ministry reaffirms plan to eradicate names that ‘violate the core values of socialism, damage national confidence’
One man says it reminds him of the dark days of the Cultural Revolution
Beijing wants to eradicate place and property names, like “East Rome’s Garden”, that are influenced by foreign or “weird” words. Photo: Weibo
Beijing has reiterated its commitment to rid Chinese cities of “big, foreign and weird” property and place names, sparking a backlash from the public.
The campaign began last year when six government departments introduced a joint policy requiring provincial and county authorities to identify all such properties within their jurisdictions and rename them by the end of March.
On Friday, the Ministry of Civil Affairs reaffirmed its support for the plan, but reminded local governments to implement it “prudently and appropriately”.
Many Chinese properties, especially hotels and apartment buildings, incorporate famous foreign places, like Manhattan, California or Paris, into their names, but under the new rule they all have to go. According to a report by local newspaper Sanqin Metropolis Daily, in one city in Xian, the capital of Shaanxi province, at least 98 apartment projects, hotels, townships, communities and office towers need to be rebranded.
Many Chinese properties, like the Vienna International Hotel, incorporate famous foreign places into their names. Photo: Weibo
But for some people, the plan is nothing more than a waste of time and money.
“If projects are forced to change their names, what about the name on the property certificate, the enterprise licence and tax registration? Do they have to be changed too?” asked Zhu Yun, a woman who lives in Guangzhou, the capital of south China’s Guangdong province.
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“And what’s the standard for the new names, and who’s going to do the renaming? It’s just a waste of people’s energy and money, and will do nothing for the national culture or confidence.”
Zhu Min, an octogenarian who also lives in Guangdong, said the scheme had echoes of a darker time in China’s history.
“It reminds me of the bad times of the Cultural Revolution,” he said. “At that time, a great number of streets, roads and stores were forced to rename, because they contained elements of old customs and old culture.”
The debate has also been raging online, with tens of thousands of people airing their views on social media.
“Cultural and national confidence is about respect for multiculturalism,” one person wrote on Weibo, China’s Twitter-like platform.
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Despite the outcry, the civil affairs ministry said the implementation of the scheme was “an important measure … to carry forward the national and local culture”, Xinhua reported.
“The relevant regulations and guidelines of the campaign should be strictly observed to prevent the campaign from being expanded in an arbitrary manner,” it said.
The plan announced last year stated that “big, foreign, weird” place names and those based on homonyms “violate the core values of socialism, damage national confidence, and affect the production and lives of the people, and must be rectified and cleaned up”.
One of the 20th Century’s most prolific architects, he has designed municipal buildings, hotels, schools and other structures across North America, Asia and Europe.
Image copyright GETTY IMAGESImage caption Qatar’s Islamic Museum of Art is one of Pei’s most famous designsImage copyright AFP/GETTYImage caption The architect also designed the Suzhou Museum in China, which was completed in 2006
His style was described as modernist with cubist themes, and was influenced by his love of Islamic architecture. His favoured building materials were glass and steel, with a combination of concrete.
Pei sparked controversy for his pyramid at the Louvre Museum. The glass structure, completed in 1989, is now one of Paris’ most famous landmarks.
Image copyright GETTY IMAGESImage caption Pei designed Boston’s John F Kennedy Library and MuseumImage copyright GETTY IMAGESImage caption I M Pei designed Dallas City Hall with fellow architect Theodore J MushoImage copyright REUTERSImage caption I M Pei’s Bank of China tower (L) in Hong Kong
His other work includes Dallas City Hall and Japan’s Miho Museum.
“I believe that architecture is a pragmatic art. To become art it must be built on a foundation of necessity,” he once said.
He was won a variety awards and prizes for his buildings, including the AIA Gold Medal, the Praemium Imperiale for Architecture.
In 1983 Pei was given the prestigious Pritzker Prize. The jury said he had he “has given this century some of its most beautiful interior spaces and exterior forms”.
He used his $100,000 prize money to start a scholarship fund for Chinese students to study architecture in America.
Notice says holidaymaker found his wallet and mobile phone missing after being asked for directions by an attractive woman on the Champs-Élysées
Warnings come just days after Beijing withdraws invitation to join navy’s anniversary parade for French frigate that sailed through Taiwan Strait
Chinese tourists have been warned to be on their guard when visiting France. Photo: AFP
Chinese visitors to Paris have been warned to be on the look out for a bewitching blonde who preys on the good nature and naivety of tourists to relieve them of their valuables.
According to a series of notices posted on the website of the Chinese embassy in the French capital, the alluring larcenist is just one of a number of con artists and crooks that prowl the city in search of easy targets.
Holidaymaker “Shen” became their latest victim earlier this month, the mission said.
“On April 1, a Chinese citizen surnamed Shen was appreciating the beautiful scenery at Avenue des Champs-Élysées, when a blonde approached him and asked for directions,” according to one of the notices posted on the site on Thursday.
The Arc de Triomphe stands at the western end of the Champs-Élysées, where a Chinese tourist identified only as “Shen” was allegedly robbed on April 1. Photo: Xinhua
“Although Shen was curious why the blonde would chose a foreigner like him for directions, he still replied as he had made some travel preparations.”
It was only after the woman had walked away that Shen realised his mobile phone and wallet were missing, it said.
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Pickpockets and sneak thieves are a threat to all visitors to France, but the Chinese are often regarded as prime targets because of the belief they carry lots of cash and valuables, the embassy said.
As well as the Champs-Élysées, tourists were warned to take extra care when visiting attractions like the Palace of Versailles and Sacré-Coeur, and when travelling on the subway.
“Be aware of strangers in public places and on public transport, and always pay attention to your belongings,” the embassy said.
The notice about Shen did not say if he had reported the suspected theft to the local police.
Pickpockets and sneak thieves are a threat to all visitors to France, but the Chinese are often regarded as prime targets, the embassy said. Photo: AFP
According to the Paris Region Tourism Board, China accounts for the third largest number of visitors to France after the United States and Britain. Chinese tourists made 1.1 million trips to the country in 2017 and the figure is forecast to grow to 2 million by 2022.
While most experience trouble-free trips, there have been reports of Chinese visitors to France being robbed or even assaulted in recent years.
in the car park of their hotel in the Val-de-Marne suburb of Paris after returning from a shopping trip. Their four assailants made off with nine bags filled with luxury goods.
A year earlier, 27 Chinese tourists were attacked by a group of six Frenchmen as they boarded a bus that was about to take them to the airport.
Foreign Minister Wang Yi tells French counterpart Jean-Yves Le Drian the two sides should ensure ties ‘continue to develop in a healthy way’
Meeting comes after Paris angers Beijing by sending a warship through the sensitive Taiwan Strait
Paris upset Beijing earlier this month by sending its frigate Vendémiaire through the Taiwan Strait. Photo: Reuters
France and China should value their strong relationship and not take actions that disrupt it, China’s foreign minister told his French counterpart on Thursday, just days after
at Paris for sending a warship through the Taiwan Strait earlier this month.
Speaking at a meeting on the sidelines of the Belt and Road Forum in Beijing, Wang Yi told Jean-Yves Le Drian that the two nations “should cherish their hard-won and good relations”.
“[We should] avoid unnecessary disruptions and ensure that bilateral relations continue to develop in a healthy and progressive way,” he was quoted as saying in a statement issued on Friday by the Chinese foreign ministry.
Le Drian responded by saying France was willing to cooperate with China to “maintain the growth momentum of bilateral relations”, according to the statement.
French Foreign Minister Jean-Yves Le Drian told his Chinese counterpart Wang Yi that Paris was willing to cooperate with Beijing. Photo: Xinhua
passed through the Taiwan Strait on April 6. It had been expected to take part in a naval parade on Tuesday to celebrate the 70th anniversary of China’s navy, but Beijing withdrew the invitation in response to the action.
The defence ministry in Paris said this week it had been “in close contact with the Chinese authorities” about the incident.
EU’s connectivity plan ‘more sustainable’ than belt and road
A spokesman for the European Union said the trading bloc was committed to a rules-based maritime order based on international law, including freedom of navigation, and that it was in regular contact with the member states.
Chinese academics said that after the transit by the French warship it was likely that more Western countries would make their presence known in the region and that Beijing should remain vigilant.
“France wants to show that as a great power it has a broader concern in Asia-Pacific beyond trade and other ‘soft’ fields,” said Shi Yinhong, an international relations professor at Renmin University of China in Beijing.
“And it will exert its right to free navigation in any international waters regardless of China’s position or sensitivities.”
The Taiwan Strait is about 160km (100 miles) wide and divides mainland China from Taiwan, which Beijing regards as a breakaway province awaiting reunification, by force if necessary. The US, meanwhile, is bound by law to help the self-ruled defend itself and frequently sends warships through the strait in a show of support.
Shi said that US President Donald Trump’s Indo-Pacific strategy, which regards China as a “strategic competitor”, might draw “opportunistic associates” – like France and Britain – into the region.
“Some other states could be encouraged by the French action to do the same,” he said. “But [they] may also be deterred by China’s probable military and diplomatic responses, which would be determined on a case-by-case basis.”
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Zhu Feng, a professor of international relations at Nanjing University, said France’s conduct was intended to show the “shared concern of Western allies” regarding the security aspect of cross-strait relations.
“China must be vigilant to the new tendency [for nations] to internationalise the Taiwan Strait issue,” he said, though added that the transit of the French warship was “more of a symbolic gesture than actual action”.
Philippe Le Corre, a senior fellow at the Carnegie Endowment for International Peace in Washington and former special assistant for international affairs to the French defence minister, said the Taiwan Strait did not belong to any one nation and, therefore, ships were within their rights to sail through it without prior authorisation.
“From Paris’s point of view, like the rest of the EU, the principles of freedom of navigation are critical to the world economy and trade, therefore there is no reason why European navies or even commercial ships should not be allowed to cross the Taiwan Strait,” he said.
“This is EU policy, not just France or the UK. It has nothing to do with the US, it is international law.”
These were the latest flights to be grounded and it was not clear how many of its fleet of more than 100 planes was still in operation. Local reports suggested that it was barely a dozen.
The airline flies on 600 domestic and 380 international routes – but carriers in India must maintain a fleet of least 20 aircraft to continue to operate international services.
From London, the airline initially confirmed it had cancelled its flights between London, Paris and Amsterdam and India for 12 April, but later said that all international flights would be cancelled between 12 and 15 April.
It said it “regrets the inconvenience caused” to its passengers and was “working to minimise guest inconvenience”.
“In parallel, the airline’s management and its key stakeholders including its consortium of lenders, continue to work closely towards resolving the current situation,” it said.
There was no statement about the status of domestic flights.
Wedding party delay
Sandeep Kooner and her three children had been expecting to be on a flight from London to India on Friday evening to attend her niece’s wedding in Punjab.
But the 40 year-old who lives in Walsall will now miss the first few days of the week-long celebrations after her Jet Airways flight was cancelled.
“I had just sat down in the nail salon when I got a text message to say my flight had been cancelled,” she told the BBC.
She has now arranged to fly with Air India, but that will be days later and to Delhi – an eight hour drive to her destination – rather than a local one.
“I’m not 100% sure my problem is 100% sorted,” she says.
‘Necessary steps’
Television channels in India reported that the prime minister’s office had called for an urgent meeting to discuss the airline.
They also reported remarks by government officials saying Jet Airways only had funds to operate six to seven aircraft over the weekend.
India’s Aviation Minister, Suresh Prabhu, had tweeted that his ministry would “review issues related to Jet Airways” and “take necessary steps to minimise passenger inconvenience and ensure their safety”.
Jet Airways owes money to employees and suppliers and in recent weeks it has grounded aircraft and cancelled thousands of flights as its financial strains worsened.
The pilots union in India is planning a protest on Saturday and has written to the airline demanding that employees are paid. Staff of the airline were pictured by Priyanka Iyer of Business Television India marching to the company’s headquarters in Mumbai.
In March, when the crisis at Jet Airways led to thousands of flights being cancelled, the government immediately stepped in and asked public sector banks to rescue the private carrier.
It was a rare move. With India holding a national election, Prime Minister Narendra Modi’s government did not want the airline to be grounded as that would have affected 23,000 jobs.
The lenders which took control of the airline have only released a fraction of the amount they had promised so the airline has not been able to pay aircraft leasing companies. This means its fleet has shrunk further from the 100-plus it had at the start of the year.
The lenders have started accepting bids from potential investors, but that process will take a couple of months to complete. And many analysts fear that Jet Airways will not survive even a week if immediate cash is not provided to keep the operations running.
Investment sought
The airline was founded by Naresh Goyal more than 25 years ago and he and his family currently own 52% of the airline, although that majority stake is expected to be lost as lenders’ restructure the debt.
A consortium of investors led by the State Bank of India (SBI) took control of the airline in March.
The group is searching for a new investor to acquire a stake of up to 75% in Jet Airways. The deadline for bids had been extended to Friday, according to reports.
Ellis Taylor, deputy Asia editor of Flight Global, told the BBC the airline was in a “precarious position”.
“The interim lifeline that the carrier talked about two weeks ago looks like it won’t materialise any time soon, and that really leaves its future looking bleak,” he said.
There were reports in local media that India’s aviation ministry might review the regulations setting the fleet cap, which could allow the airline to resume international services.
BRUSSELS, April 6 (Xinhua) — China-European Union (EU) relations in tourism get a boost as the 2018 EU-China Tourism Year has scored a success, an official recently said.
During the tourism year, China and the EU held more than 100 promotional activities. It “has been extremely successful,” said Eduardo Santander, executive director of the European Travel Commission (ETC).
There was a 5.1-percent year-on-year increase in Chinese arrivals in EU destinations in 2018, and among the top ones in terms of the volume of Chinese arrivals were Britain, Germany and France, according to the latest figures from the ETC and the air travel analysis agency ForwardKeys.
“We continue to see the benefits in 2019,” Santander added. “The growth in Chinese travellers has been solid, and the near future, judging by current bookings, will see the EU continuing to increase its share of this valuable market, not just to traditional destinations, but lesser-known and emerging ones as well.”
Chinese bookings to the EU for the first four months of 2019 are 16.9 percent ahead of where they were at the end of 2017, said the ETC, adding that this compares very favorably to the global trend, which is 9.3 percent ahead.
According to a recent report by China Tourism Academy and China’s online travel agency Ctrip, 70 percent of Chinese tourists in 2018 chose “package tours” when traveling in Europe, due to language, visa, culture and other factors.
Nevertheless, the proportion of independent and customized travel continues to rise. In 2018, the demand for customized European tours booked by the travel website increased by 127 percent over the past year, far higher than the growth rate of the overall market, said the report.
In addition, a number of new routes were launched between China and Europe in 2018, including direct flights from Fuzhou to Moscow, Changsha to London, Jinan to Paris, and Shenzhen to Brussels. In 2018, there were more than 600 flights a week between China and Europe, according to the report.
Ctrip in 2018 forecast that consumption of each tourist in Europe will exceed 25,000 yuan (about 3,721 U.S. dollars) in two years, with the total annual consumption to reach 150 billion yuan (about 22.3 billion dollars).
“Our findings confirm what a concerted effort to boost tourism can achieve. It also appears to have lasting effects, as we can see in the forward booking figures,” said Olivier Jager, CEO of ForwardKeys.
China’s domestic travel agencies are also deepening the cooperation with Europe. For example, the SkyScanner, Ctrip’s online travel search platform, set up its first overseas calling service center in Edinburgh in April 2018.
The African Union headquarters in Addis Ababa is a shiny spaceship-like structure that glistens in the afternoon sun.
With its accompanying skyscraper, it stands out in the Ethiopian capital.
Greetings in Mandarin welcome visitors as they enter the lifts, and the plastic palm trees bear the logos of the China Development Bank.
African Union HQ, Addis Ababa
Everywhere, there are small indications that the building was made possible through Chinese financial aid.
In 2006, Beijing pledged $200m to build the headquarters. Completed in 2012, everything was custom-built by the Chinese – including a state-of-the-art computer system.
For several years, the building stood as a proud testament to ever-closer ties between China and Africa. Trade has rocketed over the past two decades, growing by about 20% a year, according to international consultancy McKinsey. China is Africa’s largest economic partner.
But in January 2018, French newspaper Le Monde Afrique dropped a bombshell.
It reported that the AU’s computer system had been compromised.
The newspaper, citing multiple sources, said that for five years, between the hours of midnight and 0200, data from the AU’s servers was transferred more than 8,000km away – to servers in Shanghai.
This had allegedly continued for 1,825 days in a row.
Le Monde Afrique reported that it had come to light in 2017, when a conscientious scientist working for the AU recorded an unusually high amount of computer activity on its servers during hours when the offices would have been deserted.
It was also reported that microphones and listening devices had been discovered in the walls and desks of the building, following a sweep for bugs.
The reaction was swift.
Both AU and Chinese officials publicly condemned the report as false and sensationalist – an attempt by the Western media to damage relations between a more assertive China and an increasingly independent Africa.
But Le Monde Afrique said that AU officials had privately expressed concerns about just how dependent they were on Chinese aid – and what the consequences of that could be.
In the midst of all of this, one fact remained largely unreported.
The main supplier of information and communication technology systems to the AU headquarters was China’s best-known telecoms equipment company – Huawei.
The company says it had “nothing” to do with any alleged breach.
Huawei “served as the key ICT provider inside the AU’s headquarters”, said Danielle Cave of the Australian Strategic Policy Institute, in a review of the alleged incident.
Huawei headquarters in Shenzhen, China
“This doesn’t mean the company was complicit in any theft of data. But… it’s hard to see how – given Huawei’s role in providing equipment and key ICT services to the AU building and specifically to the AU’s data centre – the company could have remained completely unaware of the apparent theft of large amounts of data, every day, for five years.”
There is no evidence to indicate that Huawei’s telecoms network equipment was ever used by the Chinese government – or anyone else – to gain access to the data of their customers.
Indeed, no-one has ever gone on record to confirm that the AU system was compromised in the first place.
But these reports played into years of suspicions about Huawei – that a large Chinese company might find itself unduly influenced by the Chinese government.
Ren and the rise of Huawei
“When I first started out 30 years ago… we didn’t really have any telephones. The only phones we had were those hand-cranked phones that you see in old World War II films. We were pretty undeveloped then.”
Huawei’s founder and chairman Ren Zhengfei is reminiscing to the BBC about the origins of the world’s second-biggest smartphone firm, while sitting in the Huawei headquarters in Shenzhen – a symbol of the success that he’s worked his whole lifetime for.
A long marbled staircase, covered in plush red carpet, greets you as you first walk in.
At the top of the stairs, a giant painting depicts a traditional Chinese New Year scene.
Inside Huawei’s Shenzhen HQ
A few kilometres away in Dongguan, Huawei’s latest campus is even more eye-catching.
The site – designed to accommodate the company’s 25,000 R&D staff – comprises 12 “villages”, each of which recreates the architecture of a different European city, among them Paris, Bologna and Granada.
It’s as if Silicon Valley had been re-imagined by Walt Disney. Long corridors of Roman pillars and picturesque French cafes adorn the campus, with a train connecting the different areas, running through manicured gardens and past an artificial lake.
It’s a world away from the environment that Mr Ren found himself in when he first started the company in 1987. “I founded Huawei when China began to implement its reform and opening up policy,” he says. “At that time, China was shifting from a planned economy to a market economy. Not only people like myself, but even the most senior government officials, did not have the vaguest idea of what a market economy was. It seemed it was hard to survive.”
Ren was born in 1944 in Southern China – a tumultuous, chaotic place, one of the poorest regions in an already destitute country.
For a long time, hardship was all he ever knew.
He was from a family of seven children. “They were very poor,” says David De Cremer, who has co-written a book on Ren and Huawei.
“I think hardship is something that you can see throughout his life, and which he keeps emphasising himself.”
To escape that life of poverty and drudgery, Ren did what many young Chinese men of that era did. He joined the army.
Soldiers from the People’s Liberation Army, 1972
“I was a very low-ranking officer in the People’s Liberation Army,” he says. “I served in an ordinary construction project, not a field unit. At the time, I was a technician of a company in the military, and then I became an engineer.”
He left the military in 1983 when China began to downsize its forces, and went into the electronics business.
By his own admission, he wasn’t a great businessman at first.
“I was someone who had been in the military all my life at the time, used to doing what I was told,” he says. “Suddenly, I began to work in a market economy. I was at a total loss. So I too suffered losses, I too was deceived, and I was cheated.”
But he was quick to learn, and was a keen student of Western business practices and European history.
“I did research on what exactly a market economy was all about,” he says. “I read books on laws, including those about European and US laws. At that time, there were very few books on Chinese laws, and I had to read those on European and US laws.”
Five years later, he founded Huawei – the name can be translated as “splendid achievement” or “China is able” – to sell simple telecoms equipment to the rural Chinese market. Within a few years, Huawei was developing and producing the equipment itself.
Sometime in the early 90s, Huawei won a government contract to provide telecoms equipment for the People’s Liberation Army.
By 1995, the company was generating sales of around US$220,000, mainly from selling to the rural market.
The following year Huawei was given the status of a Chinese “national champion”. In practice, this meant the government closed the market to foreign competition.
At a time when China’s economy was growing by an average of 10% per year, this was no small advantage. But it was only when Huawei started to expand overseas in 2000, that it really saw its sales soar.
In 2002, Huawei made US$552m from its international market sales. By 2005 its international market contracts exceeded its domestic business for the first time.
Ren’s early days in business instilled in him a desire to protect his company from the whims and fancies of the stock market. Huawei is privately held and employee-owned. This gave Ren the power to plough more money back into research and development. Each year, Huawei spends US$20bn on R&D – one of the biggest such budgets in the world.
“Publicly listed companies have to pay a lot of attention to their balance sheets,” he says. “They can’t invest too much, otherwise profits will drop and so will their share prices. At Huawei, we fight for our ideals. We know that if we fertilise our ‘soil’ it will become more bountiful. That’s how we’ve managed to pull ahead and succeed.”
One story from the early days of the company tells how Ren was cooking for his staff (he loves to cook, or so the story goes). Suddenly he rushed out of the kitchen and announced to the room: “Huawei will be a top three player in the global communications market 20 years from now!”
And that’s exactly what happened. In fact, those ambitions were surpassed.
Today, Huawei is the world’s biggest seller of network telecommunications equipment.
From aspiring to be a company like Apple, it now sells more smartphones than Apple.
But shadows have continued to loom over Huawei’s international success.
Ren and Huawei’s links to the Chinese Communist Party have raised suspicions that the company owes its meteoric rise to its powerful political connections in China. The US has accused Huawei of being a tool of the Chinese government.
It’s an accusation which Ren denies. “Please don’t think that Huawei has become what it is today because we have special connections,” he says. “Even 100% state-owned companies have failed. Do good connections mean you will succeed then? Huawei’s success is still very much due to our hard work.”
The case against
It was 1 December 2018. US President Donald Trump and China’s President Xi Jinping were dining on grilled sirloin followed by caramel rolled pancakes at the G20 summit in Buenos Aires.
They had a lot to discuss. The US and China were in the middle of a trade war – imposing tariffs on each other’s goods – and growth forecasts for both countries had recently been cut as a result. This was adding to the fear of a slowing global economy.
In the event, the two leaders agreed a truce in the trade war, with Donald Trump tweeting that “Relations with China have taken a BIG leap forward!”
Xi Jinping and Donald Trump at dinner, December 2018
But thousands of kilometres north in Canada, an arrest was taking place that would throw doubt on this rapprochement.
Meng Wanzhou, Huawei’s chief financial officer and Ren Zhengfei’s eldest daughter, had been detained by Canadian officials while transferring between flights at Vancouver airport.
The arrest had come at the request of the US, who accused her of breaking sanctions against Iran.
“When she was detained, as her father, my heart broke,” says Ren, visibly emotional. “How could I watch my child suffer like this? But what happened, has happened. We can only depend on the law to solve this problem.”
Meng Wanzhou being driven to court in Canada
Huawei’s problems were just beginning. Nearly two months later, the US Department of Justice filed two indictments against Huawei and Ms Meng.
Under the first indictment, Huawei and Ms Meng were charged with misleading banks and the US government about their business in Iran.
The second indictment – against Huawei – involved criminal charges including obstruction of justice and the attempted theft of trade secrets.
Both Huawei and Ms Meng deny the charges.
January 2019: Acting US attorney general Matthew Whittaker announces charges against Huawei and Meng Wanzhou
The charge of stealing trade secrets centres on a robotic tool – developed by T-Mobile – known as Tappy.
According to legal documents, Huawei had tried to buy Tappy, a device which mimicked human fingers by tapping mobile phone screens rapidly to test responsiveness.
T-Mobile was in partnership with Huawei at the time, but it rebuffed the Chinese firm’s offers, fearing it would use the technology to make phones for T-Mobile’s competitors.
It’s alleged that one of Huawei’s US employees then smuggled Tappy’s robotic arm into his satchel so that he could send its details to colleagues in China.
After the alleged theft was discovered, the Huawei employee claimed that the arm had mistakenly fallen into his bag.
Huawei claimed that the employee had been acting alone, and the case was settled out of court in 2014. But the latest case is built on email trails between managers in China and the company’s US employees, linking Huawei management to the alleged theft.
The indictment also details evidence of a bonus scheme from 2013, offering Huawei employees financial rewards for stealing confidential information from competitors.
Huawei has denied any such scheme exists.
Meng Wanzhou, photographed in 2014
This is not the first time that Huawei has been accused of stealing trade secrets. Over the years companies like Cisco, Nortel and Motorola have all pointed the finger at the Chinese firm.
But US fears about Huawei are about much more than industrial espionage. For more than a decade, the US government has seen the company as little more than an arm of the Chinese Communist Party.
These concerns have been brought to the fore with the advent of “fifth generation” or 5G mobile internet, which promises download speeds 10 or 20 times faster than at present, and much greater connectivity between devices.
As the world’s biggest telecoms infrastructure provider, Huawei is one of the companies best placed to build new 5G networks. But the US has warned its intelligence partners that awarding contracts to Huawei would be tantamount to allowing the Chinese spy on them.
US Secretary of State Mike Pompeo recently cautioned against Huawei, saying, “If a country adopts this and puts it in some of their critical information systems, we won’t be able to share information with them.”
US Secretary of State Mike Pompeo
The UK, Germany and Canada are reviewing whether Huawei’s products pose a security threat.
Australia went a step further last year, and banned equipment suppliers “likely to be subject to extrajudicial directions from a foreign government”.
Huawei was not mentioned by name, but Danielle Cave of the Australian Strategic Policy Institute says the company posed a national security risk because of its government links.
She cites an article in Chinese law that makes it impossible for any company to refuse to help the Chinese Communist Party in intelligence gathering.
“Admittedly, what is missing from this debate is the smoking gun,” she says.
“For the average person who has a Huawei smartphone it’s not a big deal. But if you’re a Western government that has key national security to protect – why would you allow this access to a company that is in the political system that China is in?”
For his part, Ren says that Huawei’s resources have never and would never be used to spy for the Chinese government.
“The Chinese government has clearly said that it won’t ask companies to install backdoors,” he says. A “backdoor” is a term used to describe a secret entry point in software or a computer system that gives access to the person or entity who installed it to the inner workings of the system.
“Huawei will not do it either,” he continues. “Our sales revenues are now hundreds of billions of dollars. We are not going to risk the disgust of our country and our customers all over the world because of something like that. We will lose all our business. I’m not going to take that risk.”
Xi’s China
Zhou Daiqi is Huawei’s chief ethics and compliance officer.
He’s been with the company for nearly 25 years, in a number of different positions – chief engineer, director of the hardware department, head of the research centre in Xi’an, according to his biography on the company’s website. He is also understood to combine his high-ranking executive duties with another role – party secretary of Huawei’s Communist Party committee.
All companies in China are required by law to have a Communist Party committee.
Zhou Daiqi’s profile on Huawei’s website
The official line is that they exist to ensure that employees uphold the country’s moral and social values. Representatives of the committee are also often tasked with helping workers with financial problems.
But critics of China’s one-party system argue that they allow the state to exert control on corporate China. And they say the level of this control has increased in recent years.
“[President] Xi Jinping is exerting greater control over the business community in China,” says Elliott Zaagman, who regularly advises Chinese companies on their PR strategy. “As these companies gain power and influence overseas, the party doesn’t want to lose control over them.”
Ren, however, argues that the role of Huawei’s Communist Party committee is far less important than many in the West believe.
“[It] serves only to educate its employees,” he says. “It is not involved in any business decisions.”
In China, most chief executives are Communist Party members.
Every year, they dutifully turn up to the National People’s Congress along with local and national party chiefs, officials and chief executives.
It’s where the big economic decisions are voted on – although no proposal is put forward which hasn’t already been agreed upon.
Still, big CEOs come to show their commitment to the party, and to contribute to working papers that are meant to help the government understand the concerns of the business community.
Being a member of the party is very much a networking opportunity – in the way one would join a business association.
Elliott Zaagman argues that this is a system that demands loyalty.
“There is no separation from the party and the state,” he says.
“The system in China encourages the lack of transparency in companies like Huawei.”
The worry is that these close links mean that if the Communist Party asked a company to do something, they would have no choice but to comply.
And if that company is one that is involved in sensitive global telecoms infrastructure projects, it’s easy to see why Western observers would be worried.
There is no evidence to indicate that Huawei is in any way under the orders of the Chinese government, or that Beijing has any plans to dictate business plans and strategy at Huawei – particularly when it comes to spying.
But the way in which the Chinese Communist Party has robustly defended Huawei has raised questions about how independent the company is of its influence.
For example, Beijing stated that Ms Meng’s detention was a rights abuse .
And while her extradition case to the US was moving forward, China detained two Canadian citizens and accused them of stealing state secrets. Critics say the detentions are linked to Ms Meng’s arrest.
December 2018: Chinese police patrol outside Canada’s embassy in Beijing
While not commenting on the arrest of the Canadians, Ren says China’s defence of Huawei is understandable.
“It is the Chinese government’s duty to protect its people,” he says. “If the US attempts to gain competitive edge by undermining China’s most outstanding hi-tech talent, then it is understandable if the Chinese government, in turn, protects its hi-tech companies.”
Over the past few years, there have been signs of a bigger push by the government to get private companies, and in particular tech firms, to cooperate with party rules – even when they are firmly resistant.
A Didi Chuxing logo adorns a building in Hangzhou, China
China’s ride-hailing giant Didi Chuxing’s troubles are an example of the struggles Chinese firms face when they try to uphold their independence in the face of government pressure.
Chinese attitudes to data collection and data privacy are different to those in the West – many people don’t care if businesses have access to their data, arguing that it adds to the convenience of life and work.
Government access to data in China is not the free-for-all that many outside of China assume it to be
Samm Sacks, CSIS
So it wasn’t unusual when, after the murders of two of its passengers by Didi drivers, regulators used the scandal to force Didi to share more corporate data with the government. But Didi resisted – citing customer privacy. Under Chinese law, it had no choice but to comply.
When it did, it handed over “three boxes of data printed on paper, including 95 hard copies for authorities to review”.
According to Samm Sacks of the Center for Strategic and International Studies (CSIS), the case demonstrates that “government access to data in China is not the free-for-all that many outside China assume it to be”.
She says this indicates that there appears to be “a kind of tug of war between the government and companies over data”.
How this plays out will determine how Chinese companies are viewed by foreign governments when they do business overseas.
Companies like Huawei have grown up in a system where to survive and thrive they needed strong links to the Chinese government – there was and is no other choice. But these links could harm their reputation abroad.
“It’s two different systems,” says Zaagman. “Think of it like an electrical outlet. China’s plug doesn’t fit in to the outlets we have in the West.”
What’s at stake
“Basically you want to connect to everything that can be connected.”
Zhu Peiying, head of Huawei’s 5G wireless labs, is showing off devices that can connect to the new technology. From a smart toothbrush that collects data about how well you brush your teeth, to a smart cup that reminds you when you should drink some water, this is a world where everything you can think of is being measured and analysed.
At its most sophisticated, everything in entire cities would be connected – driverless cars, the temperature of buildings, the speed of public transport – the list is endless.
Huawei is thought to be a year ahead of its competitors in terms of its technological expertise and what it can offer customers, according to industry sources.
It’s also thought that the company can offer prices that are about 10% cheaper than its competitors, although critics claim this is because of state support.
Ren dismisses this, saying that Huawei doesn’t receive government subsidies.
He says the real reason behind the US resistance to Huawei is its superior technology.
“There’s no way the US can crush us,” he says. “The world needs Huawei because we are more advanced. Even if they persuade more countries not to use us temporarily we could just scale things down a bit.”
Many analysts say that Huawei’s exclusion from US networks could actually cause the US to fall behind in its 5G capabilities.
“It would mean we wouldn’t be able to participate in any blended network [using Huawei] in Europe or Asia,” says Samm Sacks of CSIS. “That would put us at a significant disadvantage.”
What this would mean in reality is a world of two internets – or what analysts are calling a “digital iron curtain” – dividing the world into parts that do business with Chinese companies like Huawei, and those that don’t.
Because of US pressure on its allies, Huawei has been on an aggressive public relations campaign to win over customers and government stakeholders.
In recent days, Vodafone’s boss Nick Read called on the US to share any evidence it has about Huawei, while Andrus Ansip, the European Commission’s vice president for the digital single market, said in a tweet that he had met with Huawei’s rotating CEO to discuss the importance of being open and transparent, as they explored ways of working together.
But suspicions about Huawei remain.
One security firm reports a sharp rise in inquiries by Asian government clients about Huawei.
“Some have asked us how much they should worry about whether Huawei is really a liability,” says an analyst who consults to Asian governments, on condition of anonymity.
Ren is sanguine about such concerns.
“For countries who believe in them [suspicions about Huawei] we will hold off,” he says. “For countries who feel Huawei is trustworthy, we may move a little faster. The world is so big. We can’t walk across every corner of it.”
But this is about more than just one company or one CEO and his family.
Increasingly, this is perceived as a battle between two world orders, and which one is the future.
In the early days of China opening up, US presidents like George HW Bush espoused the merits of engagement.
“No nation on Earth has discovered a way to import the world’s goods and services while stopping foreign ideas at the border,” he said in a 1991 speech. “Just as the democratic idea has transformed nations on every continent, so, too, change will inevitably come to China.”
1989: George HW Bush in Beijing – he encouraged economic engagement with China
Previous US administrations believed that economic engagement in China would lead to China following a freer, more “liberal” path.
There’s no denying China has made remarkable strides in the past 40 years. The economy grew by an annual average of 10% for three decades, helping to lift 800 million people out of poverty. It is now the second-largest economy in the world, only surpassed by the US.
Some estimates put China’s economy ahead of America’s by 2030.
It achieved this while maintaining one-party rule and the supremacy of the Communist Party.
But its success has raised concerns that it is only possible with a huge amount of government control over the country’s companies. The fear is that control could be used to achieve the Communist Party’s goals – which are at this point unclear.
“It’s a double-edged sword for China,” says Danielle Cave. “[Because of its laws] the Chinese Communist Party has made it virtually impossible for Chinese companies to expand without attracting understandable and legitimate suspicion.”
Added to this, China has become more authoritarian under Xi Jinping’s rule.
President Xi Jinping
“Xi is systematically undermining virtually every feature that made China so distinct and helped it work so well in the past,” writes Jonathan Tepperman, editor in chief of Foreign Policy.
“His efforts may boost his own power and prestige in the short term and reduce some forms of corruption. On balance, however, Xi’s campaign will have disastrous long-term consequences for his country and the world.”
But Ren dismisses this, insisting that China is more open than ever before.
“If this meeting took place 30 years ago,” he says of our interview, “it would have been very dangerous for me. Today, I can be straightforward when answering difficult questions. This shows that China has a more open political environment.”
Still, Ren is hopeful of the direction China will take in the future.
“China has more or less tried to close itself off from the outside world for 5,000 years,” he says. “Yet we had found ourselves poor, lagging behind other nations. It was only in the past 30 years since Deng Xiaoping opened China’s doors to the world that China has become more prosperous. Therefore, China must continue to move forward on the path of reform and opening-up.”
In one of Huawei’s vast campus sites across Shenzen, lies a man-made lake. Swimming in these serene waters are two black swans.
There is a story that Ren put the birds here to remind employees of “black swan” events – unpredictable and catastrophic financial eventualities that are impossible to prepare for. He dismisses this as an urban myth, but it’s hard not to read something into it.
For Huawei, and Ren, these are highly uncertain times with no way of telling what lies ahead.
CHINDIA ALERT: You'll be living in their world, very soon 