Xi’s 3 EU magi — Huawei scoop — Biden’s democracy summit – POLITICO

Decoding transatlantic relations with Beijing.

By STUART LAU

with PHELIM KINE

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GOOD TUESDAY MORNING, EUROPE AND AMERICA. A warm welcome to our very first — drumroll, drumroll — transatlantic China Watcher, helmed jointly by Stuart Lau in Brussels and Phelim Kine in Washington D.C. The name will be familiar to our American readers, but our European devotees, previously subscribed to China Direct, may need to sit down and steady themselves over the dramatic rebrand. But fear not, this twice-a-week newsletter will continue to bring you all the unmissable whispers on China from Europe’s corridors of power. From now on, our Tuesday edition will focus more on Europe-China ties, while the Thursday issue will bring you the latest on U.S.-China relations. Who says you can’t have the best of both worlds?

A WEEK LIKE NO OTHER: Our debut relaunch hits your inbox on a remarkably action-packed week, full of diplomatic fanfare. In Washington, the White House today begins a three-day Summit for Democracy to confront Beijing. China’s leaders, in the meantime, are preparing to welcome their first European guests of the year at the end of March and in early April. Stay with us, and you won’t miss a beat. As always, email Stuart and Phelim with comments and tips.

DEBUT CHEAT SHEET

— U.S. President Joe Biden’s democracy summit kicks off today and there are signs the Europeans are finally getting the message on China.

— France’s Emmanuel Macron, Spain’s Pedro Sánchez and the EU’s Ursula von der Leyen are off to China to talk to Xi about Ukraine.

— POLITICO has a zinging scoop on Belgium’s spies looking into Huawei’s activities in Brussels — home to the EU and NATO.

TRANSATLANTIC MOVES ON CHINA

DEMOCRACY VS AUTHORITARIANISM: Today marks the beginning of the Biden administration’s second Summit for Democracy, and it comes amid signs that U.S. warnings to the EU — along with a full-blown war in Ukraine — are finally starting to sway European thinking on the threat to the liberal political order.

Welkom! The Netherlands will be the European co-host for the event, alongside South Korea, Zambia and Costa Rica. “From wars of aggression to changes in climate, societal mistrust and technological transformation, it could not be clearer that all around the world, democracy needs champions at all levels,” the White House said in a joint statement with the other hosts. This is obviously all about providing a counterweight to the Putin-Xi show and, remarkably, it’s not always been clear which way Europe would jump.

Biden snubbed: Think back to just after Biden won the November 2020 election and you’ll recall the Europeans were in no mood to listen to dire tidings from the U.S. about China and democracy. When Biden’s incoming administration sought to dissuade the Europeans from concluding an ill-fated investment deal with Beijing at the end of 2020, their concerns were brushed aside by EU kingpin, Germany, under the control of then-Chancellor Angela Merkel. Merkel gave short shrift to Biden’s idea of an alliance of democracies pitted against China — positioning herself more closely with President Xi Jinping — by saying she wanted to avoid going back to Cold War blocs.

How things have changed: Europe is waking up to the security threat identified by Washington. Earlier this month, the Dutch government buckled to U.S. pressure and said that it would impose export restrictions on key machinery for microchip making destined for China. Several EU countries are also instructing their officials to stay off TikTok.

Even Germany is having a change of heart: Berlin has long been the EU heavyweight that finds it easiest to shrug off rights abuses against the Uyghur Muslim minority in Xinjiang as long as things are OK for car factory investments. But even here a significant rethink is under way, as Merkel’s own party now wants to disown her business-first ideology on China.

The Christian Democrats, now Germany’s largest opposition group, are arguing that the idea of keeping peace through economic cooperation “has failed with regard to Russia, but increasingly also China,” according to a 22-page draft paper seen by POLITICO’s Gabriel Rinaldi. “The rise of communist China is the central, epochal challenge of the 21st century for all states seeking to preserve, strengthen, and sustain the rules-based international order.”

Working with partners: Washington would love to read this. “The paper calls for a ‘Zeitenwende in China policy,’ too, concluding that Germany should … expand alliances and partnerships with interest and value partners.” Read Gabriel’s full story here. (Zeitenwende refers to Germany’s major security policy shift after the invasion of Ukraine in which it vowed to pour resources back into defense.)

Read the story on the state of the global battle for democracy by Phelim and yours truly.

CHINA-RUSSIA COLLAB: A Russian distributor is importing fibers and other items from China to manufacture body armor, including armored vests that have previously ended up on the battlefield in Ukraine, according to trade and customs data obtained by POLITICO’s Erin Banco and Steven Overly.

A review of the data from November and December 2022 shows a Russian company linked to Moscow’s national guard and other law enforcement agencies is using parts imported by several Chinese companies, including one directly linked to the state, to manufacture the body armor. Some of those vests have been used by Russian troops in Ukraine, according to photos and videos posted online, and Ukrainians who are selling on eBay the vests they say they took from the battlefield. Here is the full story by Erin and Steven.

XI’S EUROPEAN GUESTS

CAN THEY CHANGE HIS MIND? Europe somehow believes it can talk China out of deepening ties with Russia. And that impression — shared above all by France’s President Emmanuel Macron — is of course what Beijing most desires, as it will look to exploit even the tiniest of transatlantic rifts as it prepares to welcome Macron and two other European guests at the end of this month and beginning of April.

Apart from Macron who leaves for Beijing a week from today (on April 4), Chinese President Xi Jinping will also receive European Commission President Ursula von der Leyen, who will travel with the French president, and Spanish Prime Minister Pedro Sánchez.

For European leaders, the more support Russian obtains from China, the harder it will be to defeat Moscow economically and strategically. But what can they really hope to achieve?

MACRON’S GAME PLAN: The French president likes to style himself as Europe’s real leader, taking von der Leyen in tow. In a similar Roi-Soleil mode, back in 2019, he invited the German and EU leaders to a Parisian meeting with the visiting Xi.

Personal charm at play: Macron’s plan to build a personal rapport with Xi is clear from his itinerary. Apart from Beijing, he will also tour Guangzhou with Xi, whose father used to be the governor of the Guangdong province, where the city is located.

— C’est la liberté ! The choice of Guangzhou is also symbolic because the city historically stood for openness and an outward-facing mentality. Macron’s expected to meet university students there — a big gamble by the Chinese propaganda officials. It’s also a Chinese city no French president has ever visited.

Back to the main menu — Ukraine: All eyes will be on whether Macron can extract new pledges on Ukraine from Xi. Let’s remember that the French president’s strangely optimistic diplomatic whirligig with Russian President Vladimir Putin around the beginning of the war got exactly nowhere.

A French diplomatic source said: “President Macron will engage President Xi in order to convey strong messages on the war led by Russia, on issues such as stopping all attacks on civilian infrastructure or the illegal transfer of Ukrainian children.”

In his own words, Macron told journalists last week he would “try as much as possible to engage China … to put pressure on Russia to obviously not use chemical and nuclear weapons, but also do everything to stop the conflict, get back around the table of negotiations, and allow international law to be respected, i.e. the integrity territorial and sovereignty of Ukraine.”

HIS TRAVELING COMPANION WILL ALSO GIVE A SPEECH: EU Commission chief von der Leyen, who will be traveling with Macron, will first give a speech on EU-China relations this Thursday. Her choice of venue speaks volumes: The event will be hosted by the Mercator Institute for China Studies — currently under Chinese sanctions which have caused the EU-China investment agreement to be frozen by EU parliamentarians — as well as the European Policy Centre.

BUT FIRST, THE SPANISH ARRIVAL: Sánchez will arrive in Hainan Island on March 30, due to appear at the Boao Forum, China’s equivalent to the Davos World Economic Forum. He will then travel to Beijing to meet Xi.

Debating with Xi: According to Sánchez he will focus on “territorial integrity” when explaining the Ukraine question with Xi. “The most important thing … is that when this peace is reached in Ukraine, it will be fair and lasting,” he told journalists at the Ibero-American Summit meeting in the Dominican Republic on Sunday. “When we talk about ‘fair’, I mean the respect for the territorial integrity of Ukraine, which has been violated by Putin.”

TALKING BUSINESS, OF COURSE: Neither Spain nor France would expect to leave China without a focus on trade. Diplomats told China Watcher that Spain was expected to focus on tourism, while Macron pinned hopes on agriculture and aviation. Remember Macron used Xi’s trip to Paris in 2019 to deliver a devastating blow to then-U.S. President Donald Trump by landing a massive €30 billion deal for Airbus planes.

The French diplomatic source stressed that trade would be one of the topics with Xi, since EU businesses continue to see a lack of reciprocity and level-playing field in China. President Macron is expected to urge Xi to ensure the Chinese market will be opened further for French and European businesses.

EU CAN’T LOSE CHINA: Together with my colleagues Jacopo Barigazzi, Clea Caulcutt and Gregorio Sorgi, I had this write-up from European leaders’ reaction to the Xi-Putin meeting over last week’s European Council summit.

HUAWEI SCOOP

BELGIUM’S SPIES EYE HUAWEI: Belgium’s state intelligence services are scrutinizing the operations of Chinese technology giant Huawei in and around the EU and NATO headquarters in Brussels, POLITICO’s Samuel Stolton and Laurens Cerulus report this morning, citing confidential documents and three people familiar with the matter.

In recent months, Belgium’s spooks have requested interviews with former employees of the company’s lobbying operation in the heart of Brussels’ European district. The intelligence gathering is part of security officials’ activities to appraise how China may be using non-state actors to advance the interests of the Chinese state and its Communist party in Europe, the people said.

BELGIUM MATTERS: The country is host to the European Union and NATO HQs, which makes its intelligence service responsible for monitoring the spy threats these institutions face. But that’s not all: The country’s judicial investigators are also behind the massive probe into foreign state influence and corruption in the European Parliament dubbed Qatargate. 

Belgian spies want to determine whether there are any direct ties between the Chinese state and the operation of Huawei’s Brussels office, the people said. Of particular interest, they added, are Huawei representatives who may have previously held posts in Brussels institutions with access to a network of EU contacts.

A Huawei spokesperson said the company was unaware of the company’s Brussels office staff being questioned by the intelligence service. The spokesperson reiterated Huawei’s insistence that the company is independent from the Chinese state. 

Read our bombshell report online.

THREE MINUTES WITH…

STEFANO SANNINO, secretary-general of the European External Action Service, is Brussels’ man on the EU-U.S. Dialogue on China, with U.S. Deputy Secretary of State Wendy Sherman being his counterpart.

Responses have been edited for length and clarity.

How do you assess Xi’s visit to Moscow?

I think that the symbolism is self-explanatory, in the sense that they’re in a situation where Putin is very isolated internationally, [and there] is one country which is still providing political support to Putin. We do not see any pressure coming from China on Russia to withdraw their troops and to restore the international order.

China seems to be willing to be the one who will be mediating, but as a matter of fact, it looks like Russia is almost not willing to have any mediation, because they want their own direct contact with the United States. But the bottom line from this communiqué is that there is no opening to any kind of meaningful possibility to have an approach that could hint at the willingness of Russia to stop their military action.

Some in Europe seem to believe that having a tough line against China will push it toward Russia.

I honestly don’t think the balance of the strength is that we are pushing China towards Russia, because China does not need to be pushed. Russia is going directly to China, at a relatively cheap price, to be honest.

What’s the EU’s view of China’s wish to play a mediating role?

I don’t think there is any request on our side. For us the peace plan is [Ukrainian President] Zelenskyy’s point — that is what we are supporting politically. So from that point of view, I do not see a sort of matching between the peace formula of President Zelenskyy and the 12 points of the Chinese government.

What will be EU chief diplomat Josep Borrell’s message to his Chinese counterpart in the next exchange?

We need to be stressing that the European Union is not [having] any kind of policy to isolate [China] or to decouple. On the contrary, China [is] always a very relevant factor in the international scene. And so we need to be able to manage a complex relationship.

We will continue within the EU to continue discussing this. Because, again, it’s a fast, rapidly evolving situation, so it needs to be reconsidered on a regular basis.

Before his last meeting with Xi, Macron said Europe shouldn’t be naïve about China. Is today’s Europe still naïve?

Honestly, I think nobody’s naïve about it. I think that there is a very clear sense of what is happening. We need to have the maturity on both sides to understand that we are not necessarily sharing the same model, but these two models have to live together and have to interact. And we have to do in a way which is not naïve, where we understand the potential risk. The more we do that, the better I think we can move this relationship forward.

China likes to remind Europe about strategic autonomy — presumably to be autonomous from the U.S.?

Autonomy is a general concept. Autonomy does not mean being autonomous only from the United States. If you want to be autonomous, you have to be able to be autonomous from everybody. So it’s a global concept.

TRANSLATING WASHINGTON

TIKTOK’S HEARING FROM HELL: TikTok CEO Shou Zi Chew’s Thursday visit to Capitol Hill didn’t go well. A bipartisan cavalcade of lawmakers went after TikTok’s Chinese owner ByteDance and its relationship with China’s government, as well as TikTok’s alleged noxious effects on mental health, especially for teenagers.

Chew’s defense of the platform — that he has no working relationship with the CCP, that it’s working on content moderation, that user data from U.S. consumers is stored in America — was unconvincing to lawmakers. Chinese Foreign Ministry spokesperson Mao Ning said U.S. lawmakers“attacked the company based on the presumption of guilt.” POLITICO’s Calder McHugh and Ari Hawkins have the full story here.

BEIJING SLAMS U.S. NAVY ‘SOVEREIGNTY VIOLATION’: Beijing said that Chinese naval forces “warned off” an “illegal entry” by the guided missile destroyer USS Milius into Chinese territorial waters in the South China Sea last week. The Milius’s alleged intrusion “violated China’s sovereignty…and jeopardized the peace and stability in the relevant waters,” Chinese Foreign Ministry spokesperson Wang Wenbin said on Thursday. The U.S. 7th Fleet published a statement that dismissed that allegation as “false” and said that the Milius “was not expelled” by any Chinese vessel.  China’s Defense Ministry accused the Milius of a second incursion into Chinese waters on Friday. That constituted “provocative behaviors” that could reap “serious consequences,” Defense Ministry spokesperson Senior Colonel Tan Kefei warned in a statement. 

BIDEN, TRUDEAU SLAM CHINA’S ‘DISRUPTIVE ACTIONS’: U.S. President Biden and Canadian Prime Minister Justin Trudeau declared China “serious long-term challenge to the international order,” in a joint statement following their meeting in Ottawa on Friday.  The statement singled out Beijing’s “disruptive actions such as economic coercion, non-market policies and practices and human rights abuses.” 

BLINKEN: FY24 BUDGET WILL ‘OUTCOMPETE’ CHINA: Biden’s 2024 financial year budget allocations for the State Department and USAID are necessary to “outcompete” China,” said Secretary of State Antony Blinken.  That spending aims to ensure that “what we and our fellow democracies have to offer…is more attractive than the alternative being proposed” by Beijing,  Blinken told a House Foreign Affairs Committee hearing on Thursday.  

CHINA HOUSE CHIEF’S SECRET SHANGHAI VISIT: Deputy Assistant Secretary of State for China and Taiwan, Rick Waters, made a low key visit to Hong Kong and Shanghai last week, Hong Kong media reported on Friday. Waters’ itinerary in Shanghai included meetings with senior staff at the Shanghai Institute of International Affairs, said a statement posted Wednesday on the organization’s website. Waters – who is also the coordinator of the State Department’s Office of China Coordination, or China House – may have been testing the waters for a rescheduling of Secretary of State Blinken’s trip to China after the furor over the Chinese spy balloon postponed his originally-planned visit. A China House spokesperson didn’t respond to a request for comment.

TRANSLATING CHINA

MEETING THE LIVING AND THE DEAD: Former Taiwanese President Ma Ying-jeou is keen to undercut his successor Tsai Ing-wen, and he’s found his moment. As Tsai’s getting ready to travel to Central America via the U.S., Ma began an unprecedented trip to mainland China — to “pay respects to his ancestors” according to his spokespeople.

The trip, which started yesterday, made Ma the first former Taiwanese president to visit the other side of the Taiwan Strait since the split in 1949. A proponent of closer ties with China, Ma will stay until April 7, while he’s also leading a group of Taiwanese students to meet some Chinese counterparts.

Ma met Chinese President Xi in Singapore in late 2015 while he was about to leave office. Will he meet Xi or other top officials again this time? His aides say Ma’s not planning to visit Beijing, but didn’t rule out the possibility. “As guests, we are at our hosts’ disposal,” the aide told journalists.

MANY THANKS TO: Editor Christian Oliver, Laurens Cerulus, reporters Samuel Stolton, Gabriel Rinaldi, Clea Caulcutt, Jacopo Barigazzi, Gregorio Sorgi, Calder McHugh, Ari Hawkins, Erin Banco, Steven Overly and producer Grace Stranger.

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