Newsletter 153 - February 26, 2023
Welcome to the 153rd edition of Trade War.
First, I want to highlight this nice little milestone: Trade War has been recognized as a Substack bestseller. Consider becoming a paid subscriber if you haven’t already and help keep your weekly dose of China news coming strong!
Consider signing up now for your dose of weekly China news!
Now on to the news:
China issues 12-point plan for peace in Ukraine, but Europeans say Beijing still favoring Moscow. Certain that confrontation with the U.S. is inevitable, China won’t turn its back on ally Russia.
Hedge funds that were first to rush into China after the end to Covid Zero last year, are starting to exit. Missing top investment banker was trying to move funds out of China to Singapore. And Beijing tells its state firms to stop using Big Four accounting firms.
Six out of ten American are ‘gravely concerned’ about China, more than are worried about Russia. And 40 percent disapprove of Biden’s handling of Beijing.
China’s fragmented social safety net a further complication for Beijing as it faces protests from elderly retirees. Beijing’s plans to roll out a Chinese ChatGPT as part of its plans for AI success are being hindered by censorship. And Taiwan offers reparations to its citizens for mistreatment during its authoritarian past.
A new in-depth report shows that the Biden administration’s measures to block the development of China’s advanced chips industry will overturn business strategies in the U.S. and overseas and disrupt global supply chains.
And a survey shows there are 600 million residential, commercial, and industrial buildings in China or roughly 2.3 structures for every person
‘China has taken Russia’s side’
China’s effort to show it is being a responsible international player by coming up with its own plan for peace in Ukraine, so far isn’t winning it much support.
The 12-point position paper, released Friday to coincide with the one-year anniversary of the war, calls for an immediate ceasefire, and in a clear rebuke aimed at the U.S. and Europe, criticizes sanctions, and calls on unnamed countries to stop “fanning the flames” and using “long-arm jurisdiction” against other countries.
China’s paper also says a “cold war mentality” should be scrapped and that “the security of a region should not be achieved by strengthening or expanding military blocs.”
“You have to see [it] against a specific backdrop. And that is the backdrop that China has taken a side by signing an unlimited friendship right before invasion of Ukraine started,” said European Commission President Ursula von der Leyen, referring to the agreement signed by Xi Jinping and Vladimir Putin in Beijing around the time of the Winter Olympics last year.
“So we will look at the principles of course, but we will look at them against the backdrop that China has taken sides.”
German Chancellor Olaf Scholz took a similar critical stance, telling German TV ZDF: “We should have no illusions about China. They have up until now not taken a stand against Russia.”
China’s proposal is “politically motivated to conceal Russia’s crimes and to blame ‘the West’ instead,” said Dutch ambassador to China Wim Geerts in an article published Friday. “This may fool some, but Ukrainians understand the basic truth that the responsibility for the murder of their compatriots lies with the one who points the gun and pulls the trigger.”
“We have taken careful note of China’s 12-point position paper. It emphasizes certain principles of the UN Charter, but is selective and insufficient about the implications for Russia’s war of aggression against Ukraine,” EU spokeswoman Nabila Massrali said to the South China Morning Post.
The paper propagates a “misplaced focus on the so-called legitimate security interests and concerns of parties, implying a justification for Russia’s illegal invasion, and blurring the roles of the aggressor and the aggressed.”
Beijing abstained in a UN vote Thursday that called for Russian troops to withdraw from Ukraine.
As I wrote last March in an Atlantic Council analysis of China’s position: “Beijing believes that Moscow is right to feel aggrieved” and sees the NATO-Russia standoff as comparable to perceived U.S. meddling in the Indo-Pacific and with Taiwan. And China’s leaders “hope to have Russia’s support, including at the UN if necessary, when they eventually move more forcefully to rein in Taiwan.”