China Influence Monitor

Hello, and welcome to China Influence Monitor, a weekly newsletter published by CEPA and Coda Story and edited by me, Edward Lucas. We track the westward footprint of China’s influence operations, and their effects on politics, economies, societies and alliances across Central Asia, the Caucasus, Russia and Europe.

TAKING INSTRUCTIONS

London lawyers and the world’s apparel industry are learning the same hard lesson about doing business with China: loyalty is expected and disobedience punished. Brands such as H&M have seen their business there obliterated overnight after quibbling about cotton from the repressively ruled western region that the Beijing authorities call “New Frontier” —  Xinjiang.

The stark choice is: lose your market in China or your reputation in the West. 

The rag trade, though, is not the guardian of a free society’s core principles. That is the role of lawyers, independent professionals whose first duty is to the law. But the legal industry is buckling under threats to its lucrative business in China, particularly in commercial arbitration, where fees can run into the millions.

As Matthew Scott, a prominent British lawyer, notes, the profession’s motto of “do right — fear no one” has turned into “do nothing to upset China.”

That’s the lesson from Essex Court Chambers (a British “chambers” is a co-operative law office for self-employed, specialist trial attorneys known as barristers). Four Essex Court lawyers wrote a long opinion arguing that China’s treatment of the Uyghurs amounted to genocide and that Xi Jinping and two other CCP officials might be guilty of crimes against humanity.

As a result, the authorities in Beijing included Essex Court in last month’s sanctions list, along with British MPs and academics.

Cue spirited resistance and solidarity by lawyers in London and elsewhere? Not exactly. 

A leading international arbitrator, Jern-Fei Ng, left Essex Court abruptly, while its Singapore branch disbanded. Its website replaced a news item about the genocide opinion with a cringing statement stressing that only the four individuals were responsible. 

“Barristers in retreat on lies,” trumpeted China Daily.

Taking on clients that China doesn’t like now means lawyers jeopardize their own — and their colleagues’ — careers. A dreadful blow to the rule of law everywhere. 

FACT AND FICTION 

The New Yorker’s gruelling insider account of an ethnic Kazakh’s ordeal in China’s gulag is just the latest piece highlighting repression there. The Beijing authorities are putting huge resources into trying to change outside perceptions, as this report for the ASPI think tank in Australia outlines. They’ve even produced a cheesy musical, “The Wings of Songs,” featuring a sanitized multi-ethnic trio pursuing their dreams.

But pressure is growing in parliaments to recognize the treatment of China’s Turkic Muslims (such as Kazakhs and Uyghurs) as genocide. The issue could bring down the Italian government: Prime Minister Mario Draghi opposes the idea, but his right-wing coalition partner backs it. Lithuania’s parliament has invited victims to testify at hearings on April 22. It’s also pulling out of the 17+1 and opening an office in Taiwan. 

WOLF WARRIOR WATCH

This week’s Wolf Warrior award for counterproductive diplomacy goes to Cheng Jingye, China’s ambassador to Australia, for his bizarre press conference featuring happy-clappy Uyghur propaganda videos and a threat to “respond in kind” if provoked.

A special irony award goes to China’s MFA for its self-righteous attacks on foreign countries’ historical misdeeds. This approach would be more effective if the articles critical of the West that the MFA quotes  were not published by just those foreign media outlets the Chinese authorities most dislike.

If we knew her name, we’d also give a prize to “Laurène Beaumond,” a pseudonymous French journalist whose heatedly positive impressions of life in Xinjiang prompted a media storm. The Chinese foreign ministry’s defense of her work probably won’t help her career.

Matt Debutts has compiled this handy spreadsheet of 158 Chinese diplomatic Twitter accounts. Curiously, 88 are verified, but far fewer labeled as Chinese government accounts. 

Business news

• Greenland’s opposition party won an election prompted by a controversy over a Chinese-backed rare-earths mine. The project now faces cancellation. Watch out for escalation: China can sanction Greenland’s seafood exports and also pressure Denmark, which runs the autonomous island’s foreign policy.

• China’s investments are corroding Serbia’s legal system. A noxious coal plant is riling environmentalists too. 

• Uzbekistan’s offering to pay for the Kyrgyz section of the railway to China, an attempt to breach the Kazakh-Russian rail monopoly in Central Asia. In theory, Russia should mind about this. But it seems to accept China’s growing influence in the region. Uzbekistan is also trying to win more high-value-added Chinese investment. 

 What we’re reading:

• Nice scoop from Hungary: China’s new €1.5 billion ($1.78 billion) Fudan University campus in Budapest will be built by Chinese workers with Chinese materials — and paid for by Chinese loan. (Asked to comment, a Hungarian government spokesman praised Fudan’s academic standards.) 
• The Iran-China deal sounds important but in reality is most likely a symbolic nothingburger, writes William Figueroa. Iran’s ambassador to Beijing praised the “soft, clean carpets” in the mosque he visited in Xinjiang, as part of a 30-strong diplomatic  party. We wonder what he really thought. 
• Mark Leonard for ASPI on how China is developing a two-tier economy: “external circulation” is the part that will remain in contact with the outside world, while “internal circulation” will “cultivate domestic demand, capital and ideas.”
• Andreas Fulda excoriates Germany’s mercantilist, weak-kneed China policy and suggests a new one. (English summary here).
• The EU needs a new Taiwan policy, writes Zsuzsa Anna Ferenczy.

Thanks to Coda Story’s Makuna Berkatsashvili, Isobel Cockerell, Oleksander Ignatenko, Mariam Kiparoidze, Mariia Pankova, Katia Patin, and to Michael Newton at CEPA.

We’ll be back in your inboxes next week.

Best regards 

Edward