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.

TOP CHINA INFLUENCE STORY OF THE WEEK

The European Union rarely misses a chance to miss a chance. Faced with the accelerating crackdown in Hong Kong, it could have imposed sanctions on the officials responsible, or asked all EU countries to cancel their extradition treaties. Instead, foreign policy chief Josep Borrell said the EU would (wow) increase outreach to civil society groups, coordinate with international partners and press the Chinese authorities. If things get worse (drumroll) further steps will be taken. 

Borrell’s disastrous trip to Moscow, however, where he was publicly humiliated after seeking a reset with the Kremlin, did spark a slightly tougher EU response to the jailing of the anti-corruption campaigner Alexei Navalny. Perhaps a visit to Beijing might have a similar effect?  

But some European governments, especially smaller ones, are showing oomph. It’s not just the pushback against Huawei.

• Slovenia, Croatia, the Czech Republic and Romania have suspended China-related public tenders. 
• Greece is debating whether a Chinese shipping company gets a bigger stake in the port of Piraeus. 
• Lithuania has banned Nuctech security equipment from Vilnius airport (we wrote about Nuctech in Estonia earlier). 

What this shows: China hoped that public procurement wins — rocketing lately according to a Wall St Journal analysis — would make up for slowing direct investment. But in hawkish countries, low-bid tactics don’t work any more. Screening trade and investment for national-security reasons is OK. Not least because the EU says so.   

Meanwhile, Germany has admitted that China harasses Hong Kong protestors on its soil. It would be nice to think that the police are investigating. We’ll keep you posted. 

OTHER KEY CHINA TRENDS: 

France is sending two more warships to the South China Sea for exercises with the US and Japan in May. This follows a nuclear submarine deployment there last week. A clear example of Emmanuel Macron’s tendency to say the wrong things — but do the right ones. The more European countries do to help the US in the Indo-Pacific, the more they can expect when their own security is at stake. It will be interesting to see whether the French vessels risk a trip through the Taiwan strait. 

Last year China overtook the US to become the EU’s biggest trading partner. Or did it? Experts have been picking over the claim. For a start, the pandemic-stricken 2020 figures make the comparison “meaningless”, Gregory Copley, president of the International Strategic Studies Association, told The Hill. More importantly, the Eurostat figure cited doesn’t include services, notes the sharp-eyed Daniel Hamilton. Do that, and EU trade with the US is still 40% higher than with China.

China’s vaccine diplomacy success in Eastern Europe is real. Amid surging coronavirus cases in Central Europe. Hungary (where China is now the biggest foreign investor) has approved the Sinopharm vaccine, getting 5 million doses. After the failure of the 17+1 summit, China is upping its efforts in the Western Balkans, particularly in Serbia, as this Deutsche Welle documentary outlines, and as this paean of praise for Xi Jinping by the mayor of Novi Sad exemplifies. Serbia’s vaccination efforts, boosted by AI software and Chinese help, are a stand-out success, with 1m vaccines reached so far. 

Meanwhile, EU’s own vaccination efforts in its backyard are shambolic. Bosnia is still waiting to receive its first Western vaccine shipments (Serbia is helping there), as is Montenegro, which just got 30,000 Chinese doses. Pro-Western Albania and Northern Macedonia have managed only a few hundred jabs. 

LAST BUT NOT LEAST: 

Here are three bits of news from Central Asia every China-watcher should be aware of:

•  Protests continue in Kazakhstan on behalf of relatives who have disappeared in China. 
• Tajikistan is getting antsy about repeated hints of territorial claims. 
• And the Kyrgyz leadership is grovelling in the hope of salvaging three infrastructure projects.

WHAT WE ARE READING: 

• This entertaining tale about Chinese spies in Afghanistan and their ties to the extremist Haqqani Network. (We wrote about this in January). Was the aim to pay for attacks on American soldiers, or to run a honeypot to entrap Uyghur militants? Either way, it’s dodgy. 
• This investigation (link in German) about how Otto Kölbl, an Austrian with no relevant qualifications but a fervent love of China, became a German government adviser on Covid-19. 

WHAT WE ARE WATCHING: the Swedish Parliament’s foreign policy debate (helpfully streamed in English). China’s bullying has turned this conciliatory Nordic country hawkish. The Moderate (conservative) party wants (link in Swedish) to boost the status of Sweden’s office in Taipei to a Dutch-style mission, and to push for an EU-Taiwan free trade agreement. 

Why it matters: each taboo-busting step towards stronger ties with Taiwan, even tiny ones, makes it a bit less risky for others to do likewise.

KEEP AN EYE ON: whether the French authorities accede to China’s cheeky request for a broadcast licence for CGTN, newly booted off air in Britain. 

My thanks to Coda’s Isobel Cockerell, Oleksandr Ignatenko, Mariam Kiparoidze and Mariia Pankova for their contributions to the newsletter, and we’ll be back in your inboxes next week.

Best regards
Edward