Japan-Korea forced labor deal fails to heal old wounds

On March 15, 2023, the South Korean government announced its plan to strike a “deal” with the Japanese government regarding forced labor during Japan’s colonial period (1910–1945). 

Under the proposed arrangement, South Korean companies as the third party that benefited from Japanese economic cooperation in the past would provide compensation to the victims of forced labor.

As of May 7, 2023, 10 bereaved families of the laborers and one forced laborer have accepted the proposal. It is anticipated that this number will continue to rise.

The announcement stirred various responses, with some scholars criticizing the plan for leaving many questions unresolved. But both the South Korean and Japanese governments anticipate that this plan will improve bilateral relations and help resolve some diplomatic conflicts

Still, the deal faces historical challenges from its inception, bolstering South Korean opposition.

The plan may reinforce Japanese politicians’ ongoing attempts to distort the history of Japan’s colonial rule over Korea. Prominent Japanese political leaders have consistently denied the Japanese Empire’s responsibility for war crimes and exploitation during the colonial period. 

Despite offering official apologies as prime minister, Shinzo Abe refused to accept Japan’s accountability, arguing that the “definition of aggression” had not been established in 2013. Abe frequently contradicted his official statements through personal remarks, perpetuating the denial.

South Korean protesters hold a sign during a weekly anti-Japanese demonstration supporting comfort women who served as sex slaves for Japanese soldiers during World War II, near the Japanese embassy in Seoul on July 24, 2019. Photo: Asia Times Files / AFP / Jung Yeon-je

The Japanese government has also sought to glorify the past and conceal the dark history of Japan’s colonial rule. In 2015, the Japanese government succeeded in designating Hashima Island – also known as Battleship Island – as a UNESCO World Heritage site

The exhibit hall on Hashima Island primarily emphasizes its contribution to Japan’s modernization and rapid industrialization, neglecting the forced labor endured by approximately 60,000 conscripted Korean workers. 

This stark contrast raises questions about the Japanese government’s commitment to addressing forced labor issues as stated in its UNESCO application.

Japanese politicians have attempted to sanitize the past by portraying Japanese wartime criminals as victims of war. Several Japanese prime ministers have visited or provided ritual offerings to the Yasukuni Shrine, which commemorates and enshrines war dead, including class-A war criminals from the Second World War. 

Junichiro Koizumi visited the shrine annually as prime minister between 2001 and 2006 and Shinzo Abe visited in 2013. Prime Minister Fumio Kishida has also sent a number of ritual offerings to the Yasukuni Shrine. These actions underscore how major Japanese politicians perceive Japan’s history during the colonial period.

The Japanese government has also emphasized the Japanese people’s victimhood during the war, particularly concerning the 1945 atomic bombings of Hiroshima and Nagasaki by the United States. 

While former US president Barack Obama paid respects and laid a wreath at the Hiroshima Peace Memorial in 2016 and G7 leaders visited it during the 2023 G7 Hiroshima Summit in 2023, no apologies were offered for the nuclear bombings. 

But Japanese leaders have taken advantage of these visits to highlight the suffering of the Japanese people, without acknowledging the war crimes committed by the Japanese Empire.

Given Japanese leaders’ denial of the Japanese Empire’s atrocities, as opposed to the German government’s approach towards the Holocaust, South Koreans will likely oppose the forced labor deal. 

The decision to pursue the deal has faced backlash from South Korean NGOs and progressive groups who find it humiliating. A public poll on the forced labor deal reveals that 60% of South Koreans oppose it.

Despite the low approval rate, neither the South Korean government nor the ruling People Power Party has conducted a public hearing to address public concerns. Instead, the opposition Democratic Party held a public hearing on March 23, 2023 focusing on compensating the victims of forced laborers and comfort women — also known as sexual slaves.

On the forced labor issue, the South Korean Supreme Court issued a ruling in 2018 that officially recognized human rights abuses committed by certain Japanese companies against South Koreans and ordered the firms to pay compensation

A statue symbolizing former South Korean 'comfort women' is seen during an anti-Japan rally in Seoul, on March 1, 2017. Photo: Reuters / Kim Hong-Ji
A statue symbolizing former South Korean ‘comfort women’ is seen during an anti-Japan rally in Seoul, on March 1, 2017. Photo: Agencies

But these companies – including Mitsubishi Heavy Industries and Nippon Steel – have not yet complied with the court’s order. The Japanese government is believed to have obstructed these companies from adhering to the court ruling. The proposed deal could exacerbate the situation by further absolving the companies of their responsibility.

Considering the significant impact of diplomacy and new relations with Japan on South Korean President Yoon Suk Yeol’s low approval rating, he treads on delicate ground. Enforcing the deal without the consent of the South Korean people will render it ineffective. 

If this happens, it will meet the same fate as the failed 2015 comfort women deal between the South Korean and Japanese governments, which also faced public resentment in South Korea.

Jinsung Kim is a PhD candidate in the Department of Asian Studies and a Centre for Korean Research Fellow at the Institute of Asian Research, University of British Columbia.

This article was originally published by East Asia Forum and is republished under a Creative Commons license.

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How Wagner’s exploits in Africa could benefit China – and the US

The distribution of power and influence among the world’s major nations has been disturbed ever since February 24, 2022.  Russia, China, the United States and Europe are in state of disequilibrium that makes it difficult to foresee the consequences of ordinary, previously established strategies of foreign policy as practiced by the major nations. 

To state the case in its most simple form, statesmen cannot predict what will follow from even simple and ordinary policy actions that in the past were enacted in the ordinary course of international relations. Just as in finance, uncertainty results in mistakes and losses of a kind that are costly and obscure to even the most sophisticated practitioner-policymaker.

The causes have been several. First was the Russian invasion of the Ukraine. Second was the partial mutiny in Russia led by Yevgeny Prigozhin, the man who controls the private army called the Wagner Group.

While some members of that military group are now in Belarus, since 2017 as many as 5,000 of then have been used as an active foreign-policy instrument for Russia, operating and earning “protection money” in a half-dozen nations in Africa, where they have been active mercenaries. 

Third is the tilt toward, if not support for, at least an absence of criticism of, Russia on the part of China.

Fu Cong, China’s ambassador to the European Union, says China’s support for both Europe and Russia is “endless.” Lu Shaye, China’s ambassador to France, stated that countries that emerged from the former Soviet Union may not be fully independent because “there is no international agreement to materialize their status as a sovereign country.” 

An adviser to Ukrainian President Volodymyr Zelensky, Mykhailo Podolyak, said China is not a “major political player” so long as it supports Russia’s explanation of the invasion.

The events listed above have altered the effectiveness of a number of foreign-policy practices on the parts of various players. Several other students of policy have noted major changes. I will here list some effects noted by others, and then make my own contribution by drawing attention to what might be a small, but still potentially significant, event along with its possible consequences.  

I suggest this apparently small factor might be exploited by one or another daring and imaginative national leader in a way that could bring about a universally celebrated breakthrough in the general state of worldwide foreign-policy affairs.

I will write about the Wagner Group’s temptation to interfere with the smooth functioning and future profitability of China’s investments in Africa, and how the US could unwisely use the ensuing situation to restore to itself some of its former influence on the “Dark Continent.”

Other strategic thinkers have noted that the collection of events under discussion have caused Russian President Vladimir Putin to lose some of his previous reputation as an astute military leader who, for example, was able to restore Russia’s Sebastopol seaport (it was made the Black Sea home port for the Russian fleet in 1804 after Alexander I fortified the town), recapture Georgia, and cause the Baltic nations to worry about their sovereignty.

Moreover, when the Wagner forces began their march toward the Kremlin, there was no outpouring of domestic support for Putin’s cause. 

China’s ability to create a certain amount of trade and investment antagonism and jealousy between the US and Europe, and soften the impact the American anti-China strategies, was much diminished as the Europeans “rallied around” Ukraine and showed their disapproval of China’s solidarity with the Russian invaders.

That seems to have taken away some of President Xi Jinping’s reputation as an astute player, able to offset American sanctions by playing off the Western nations against one another. 

These points have been made by others.

An unnoticed subtle problem is raised by noting that the Wagner Group has a foothold in Africa. Wagner is almost certainly cut off from its line of financial support previously supplied by Russian entities controlled by Putin. But Africa is full of economic opportunities available to players who are tough enough to demand payoffs for “good behavior.”

Unfortunately for China, money, gold, diamonds, valuable tradable commodities, raw materials and political influence extracted from African entities that are connected to China by way of investments, military agreements, trade contracts and other forms of the New Brand of tightly focused neocolonialism invented by China’s international players, will require payments to Wagner out of sources that until recently have been totally devoted to serving the interests of their Asian investors.

Enter the USA 

American policy toward China has become bipartisan and aggressive to the point of near-hostility. US policymakers may very well see the Wagner forces as friendly insofar as they may become a tactical policy tool able to irritate, perhaps to frustrate China’s need for commodity inputs essential for future economic progress inside China’s industrial infrastructure. 

Moreover, since 2009 China has superseded the US as Africa’s main investor, de facto mentor if not neocolonial influencer.

The radical but naive American “experts” for whom President Joe Biden is a kind of hand puppet, made out of old socks and faded ribbons, do not think in sophisticated, long-run terms. 

They are likely to press ahead with existing anti-China policies, and eschew any idea that suggests that offering some easing of the cross-Pacific state of tension might induce China to pressure Russia, pushing it toward something like a ceasefire in Ukraine.

And so I come to my suggested way to use the African situation as a hidden way for America to help China with an irksome problem. In recognition of that help, the Chinese might see some kind of payoff for them in the case where they, at a minimum, cease their implicit support for the Russian invasion. 

China could push for a Korea-style armistice in Ukraine, overseen or at least promoted by Beijing, as a way to restore some of its influence over Europe, and put an end to the self-inflicted exile from international events that currently limits China’s scope for action in trade relations. 

Perhaps it is an idea too classically geopolitical, too Machiavellian, for President Xi and his cohort. But it has the potential to change today’s loss of international presence for China, while it also makes it possible for Xi to establish himself as very much the senior partner in respect of influence along his 4,250-kilometer-long border with his demoted neighbor.

A China-managed Ukranian armistice will produce its own set of uncertainties, and a changed international order. Perhaps it is only a 19th-century small-l liberal idea (that diplomacy is better than war), but after all, as measured by the mortality stats, the 19th century looks peaceable compared with numbers for the 20th, and its advocate, illiberal hardliner Friedrich Nietzsche.

Tom Velk is a libertarian-leaning American economist who writes and lives in Montreal, Canada. He has served as visiting professor at the Board of Governors of the US Federal Reserve system, at the US Congress and as the chairman of the North American Studies program at McGill University and a professor in that university’s Economics Department.

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World hunger and the war in Ukraine

On Monday, June 17, Dmitry Peskov, the spokesman for Russian President Vladimir Putin, announced, “The Black Sea agreements are no longer in effect.” This was a blunt statement to suspend the Black Sea grain initiative that emerged out of intense negotiations in the hours after Russian forces entered Ukraine in February 2022.

The initiative went into effect on July 22, 2022, after Russian and Ukrainian officials signed it in Istanbul in the presence of the United Nations Secretary General António Guterres and Turkish President Recep Tayyip Erdogan.

Guterres called the initiative a “beacon of hope,” for two reasons. First, it is remarkable to have an agreement of this kind between belligerents in an ongoing war. Second, Russia and Ukraine are major producers of wheat, barley, corn (maize), rapeseed and rapeseed oil, sunflower seeds and sunflower oil, as well as nitrogen, potassic, and phosphorus fertilizer, accounting for 12% of calories traded.

Disruption of supply from Russia and Ukraine, it was felt by a range of international organizations, would have a catastrophic impact on world food markets and on hunger. As Western – largely USUK and European – sanctions increased against Russia, the feasibility of the deal began to diminish.

It was suspended several times during the past year. In March, Russian Foreign Ministry spokeswoman Maria Zakharova, responding to the sanctions against Russian agriculture, said the main parameters provided for in the grain deal “do not work.”

Financialization leads to hunger

US Secretary of State Antony Blinken said his country regrets Russia’s “continued weaponization of food,” since this “harms millions of vulnerable people around the world.” Indeed, the timing of the suspension could not be worse.

A United Nations report, “The State of Food Security and Nutrition in the World 2023” (July 12, 2023), shows that one in 10 people in the world struggles with hunger and that 3.1 billion people cannot afford a healthy diet.

But the report itself makes an interesting point: that the war in Ukraine has driven 23 million people into hunger, a number that pales in comparison to the other drivers of hunger – such as the impact of commercialized food markets and the Covid-19 pandemic.

A 2011 report from World Development Movement called “Broken Markets: How Financial Market Regulation Can Help Prevent Another Global Food Crisis” showed that “financial speculators now dominate the [food] market, holding over 60% of some markets, compared [with] 12% 15 years ago.”

The situation has since worsened. Dr Sophie van Huellen, who studies financial speculation in food markets, pointed out in late 2022 that while there are indeed food shortages, “the current food crisis is a price crisis, rather than a supply crisis.”

The end of the Black Sea grain initiative is indeed regrettable, but it is not the leading cause of hunger in the world. The leading cause – as even the European Economic and Social Committee agrees – is financial speculation in food markets.

Why did Russia suspend the initiative?

To monitor the Black Sea grain initiative, the United Nations set up a Joint Coordination Center (JCC) in Istanbul. It is staffed by representatives of Russia, Turkey, Ukraine and the United Nations.

On several occasions, the JCC had to deal with tensions between Russia and Ukraine over the shipments, such as when Ukraine attacked Russia’s Black Sea Fleet – some of whose vessels carried the grain – in Sevastopol, Crimea, in October 2022.

Tensions remained over the initiative as Western sanctions tightened, making it difficult for Russia to export its own agricultural products into the world market.

Russia put three requirements on the table to the United Nations regarding its own agricultural system.

First, Moscow asked that the Russian Agricultural Bank – the premier credit and trade bank for Russian agriculture – be reconnected to the SWIFT system, from which it had been cut off by the European Union’s sixth package of sanctions in June 2022.

A Turkish banker told TASS that there was the possibility that the EU could “issue a general license to the Russian Agricultural Bank” and that the bank “has the opportunity to use JPMorgan to conduct transactions in US dollars” as long as the exporters being paid for were part of the Black Sea grain initiative.

Second, from the first discussions about the grain initiative, Moscow put on the table its export of ammonia fertilizer from Russia both through the port of Odessa and of supplies held in Latvia and the Netherlands.

A central part of the debate has been the reopening of the Togliatti-Odessa pipeline, the world’s longest ammonia pipeline. In July 2022, the UN and Russia signed an agreement that would facilitate the sale of Russian ammonia on the world market.

Guterres went to the UN Security Council to announce, “We are doing everything possible to … ease the serious fertilizer market crunch that is already affecting farming in West Africa and elsewhere. If the fertilizer market is not stabilized, next year could bring a food supply crisis. Simply put, the world may run out of food.”

On June 8, 2023, Ukrainian forces blew up a section of the Togliatti-Odessa pipeline in Kharkiv, increasing the tension over this dispute. Other than the Black Sea ports, Russia has no other safe way to export its ammonia-based fertilizers.

Third, Russia’s agricultural sector faces challenges from a lack of ability to import machinery and parts, and Russian ships are not able to buy insurance or enter many foreign ports. Despite the “carve-outs” in Western sanctions for agriculture, sanctions on firms and individuals have debilitated Russia’s agricultural sector.

To counter Western sanctions, Russia placed restrictions on the export of fertilizer and agricultural products. These restrictions included the ban on the export of certain goods (such as temporary bans of wheat exports to the Eurasian Economic Union), the increase of licensing requirements (including for compound fertilizers, requirements set in place before the war), and the increase of export taxes.

These Russian moves come alongside strategic direct sales to countries such as India that will re-export to other countries.

In late July, St Petersburg will host the Second Russia-Africa Economic and Humanitarian Forum, where these topics will surely be front and center. Ahead of the summit, President Putin called South Africa’s Cyril Ramaphosa to inform him about the problems faced by Russia in exporting its food and fertilizers to the African continent.

“The deal’s main goal,” he said of the Black Sea grain initiative, was “to supply grain to countries in need, including those on the African continent, has not been implemented.”

It is likely that the Black Sea grain initiative will restart within the month. Earlier suspensions have not lasted longer than a few weeks. But this time, it is not clear if the West will give Russia any relief on its ability to export its own agricultural products.

Certainly, the suspension will impact millions of people around the world who struggle with endemic hunger. Billions of others who are hungry because of financial speculation in food markets are not impacted directly by these developments.

This article was produced by Globetrotter, which provided it to Asia Times.

Vijay Prashad is an Indian historian, editor and journalist. He is a writing fellow and chief correspondent at Globetrotter. He is an editor of LeftWord Books and the director of Tricontinental: Institute for Social Research. He has written more than 20 books, including The Darker Nations and The Poorer Nations. His latest books are Struggle Makes Us Human: Learning from Movements for Socialism and (with Noam Chomsky) The Withdrawal: Iraq, Libya, Afghanistan, and the Fragility of US Power.

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NATO cracks emerge – but not how Putin expected

The cracks, long expected, are beginning to show. At the NATO summit in Vilnius, frictions between members and Ukraine boiled over. Ukrainian President Volodomyr Zelensky, angered that the North Atlantic Treaty Organization refused to set a timeline for Kiev to join the alliance, called the situation “absurd.”

That rare public criticism drew an immediate response from the two countries that have offered the most support. First Britain’s defense secretary, Ben Wallace, pointed out that “people want to see a bit of gratitude,” and noted that Ukrainian politicians had a habit of asking for one type of weapon, being given it, and immediately starting to ask for another type.

Speaking later, US national security adviser Jake Sullivan echoed Wallace’s message, saying he felt “the American people do deserve a degree of gratitude.”

Zelensky, clearly chastened and surprised at the response, told reporters later that day that Ukraine was grateful.

A rare spat, then, after more than a year of a bloody and bruising war. The Russian invasion of Ukraine has taken an enormous toll on Ukraine, first and foremost, but also on hundreds of millions of people around the world. For those NATO countries that have provided the most money and weapons, the war has resulted in a considerable cost in inflation and the daily cost of living.

That fracturing of the alliance was long predicted and exactly what Russia was counting on in a prolonged war. But these cracks are not what Moscow predicted. Far from being a sign of a fracturing among NATO allies, the cracks are actually a result of the alliance expanding – and taking on a new, more confrontational shape.

The idea that a prolonged war in Ukraine favors Moscow has been around since the start of the invasion; it must have provided some of the baseline calculation for going in. Western countries, no matter how supportive they were initially, would eventually tire, so the theory went, and find it harder to justify the toll the war was taking to their populations.

Broadly, that has happened. The Ukraine war has exacerbated inflation and a concurrent economic crisis across many parts of the West. (In the Global South, the effect has been much more pronounced.) Polls show that European publics are tiring of the war and its effect on the economy – but not by as much as expected.

The unexpected factor has been the political response and the unifying effect the war had, particularly in NATO, an alliance that had been adrift for years. This summit was the moment the change became real.

For the first time in years, members agreed a new comprehensive plan for its future security. The plans, which run to thousands of pages of classified text, are naturally secret, but reports indicate that they cover deployments, new equipment and investment.

In other words, NATO is finally telling its members how much to spend and what to spend it on – something that countries with bigger militaries, such as France and Turkey, have long chafed at.

This realignment of NATO is real, and irreversible in the medium term. Even as late as last autumn it was probably reversible. Had the war ended then, even in an imperfect truce, it’s possible the inertia that has gripped NATO members for two decades could have reasserted itself.

NATO in for the long haul

But now the alliance is committed, with a new military doctrine that emphasizes preparation for a prolonged, grinding, land and air war, conducted across the entirety of the European continent, as opposed to the bounded wars in Afghanistan and Iraq.

All of that means a new posture on the continent.

The positive side of that posture – from the perspective of the NATO members that will have to carry it out – is that the task is clear.

But the flip side is that NATO members are now starting to think seriously about their future and whether they can defend their countries.

Ukraine is using up vast quantities of weaponry, which, as Wallace pointed out in Vilnius, in essence means Kiev is “persuading countries to give up their own stocks” of weapons.

The most commonly cited example of this is the 155mm howitzer artillery shells that the US gives Ukraine.

Kiev is burning through these at an unsustainable rate – how unsustainable is a military secret, but Ukraine appears to be using more shells in two days, or perhaps 10 days, it hardly matters, as the US can produce in a month. In the long term, that presents a problem, for both Kiev and Washington.

The amount of weaponry given is getting to the point of either/or – either NATO countries have enough for their own defense, or they give Ukraine what it wants. Hence the jitters and irritation that seeped out at the summit.

None of this is good news for Russia, however social media tried to spin the spat. An invasion of Ukraine would have only worked for Russia if it could have been swift – which it turned out not to be – or swiftly forgotten, like the 2014 occupation of Crimea.

It may, however, be good news for Vladimir Putin. An invasion that provoked a complete realignment on the continent would cast Russia into the permanent role of outsider – a role in which Putin is comfortable and which he can sell rather too easily to the Russian public when elections next roll around.

The most consequential NATO summit in decades has seen the alliance take on a new role, one rather too similar to the role it played years ago.

This article was provided by Syndication Bureau, which holds copyright.

Faisal Al Yafai is currently writing a book on the Middle East and is a frequent commentator on international TV news networks. He has worked for news outlets such as The Guardian and the BBC, and reported on the Middle East, Eastern Europe, Asia and Africa. Follow him on Twitter @FaisalAlYafai.

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China to boost consumption, private investments

The Chinese government has launched new campaigns to boost domestic consumption and private fixed-asset-investments after foreign direct investments (FDIs) and exports showed a weakening trend.

The Ministry of Commerce and 12 other government departments on Tuesday unveiled an 11-point plan that aims to encourage people to buy household consumer goods, electric appliances and furniture and to refurbish their homes.

The State Council and the Chinese Communist Party (CCP)’s Central Committee also on Wednesday jointly issued new guidelines that call for supporting private companies in share listings, bond sales and overseas expansion. They instruct government departments to treat private companies in the same way as state-owned enterprises (SOEs).

Chinese officials warned that the West’s “de-risking” plan’s threats to the China economy are growing.

Last year, the US accelerated its “friend-shoring” and “near-shoring” plans. It treats India and Vietnam as its “friend-shoring” destinations and Mexico as its top “near-shoring” place. It also called on its allies to follow suit.

Falling orders

In the first half, China recorded a 3.97% year-on-year drop in total exports, the General Administration of Customs said on July 13. The fall was mainly caused by a slowing demand from western countries.

China’s FDIs fell 5.6% year-on-year in the first five months of this year, according to the Ministry of Commerce.

As many factories are either downsizing or leaving China, the youth unemployment rate recorded a high at 21.3% in June from 20.8% in May. Many workers also suffered from pay cuts and unstable income, said media reports.

The year-on-year growth of retail sales of consumer goods fell to 3.1% in June from 12.7% in May, partly because of a weak demand in the real estate markets.

Shen Quiping. Photo: State Council Office

“Due to the influence of multiple factors, the retail sales of home appliances, furniture, home decoration and other household products remained weak,” Shen Qiuping, vice minister of commerce, said in a media briefing about domestic consumption on Tuesday. He said retail sales of electric appliances and household products grew only 1% and 3.8%, respectively, in the first half from a year ago while sales of construction materials fell 6.7%.

He said the government’s 11-point plan is aimed at encouraging people to renovate their homes – for example, by allowing people to withdraw pensions in advance to upgrade their or their parents’ living facilities. He said that, from the supply side, the government will encourage manufacturers to launch innovative household products for the markets.

Xu Xingfeng, director general of the Department of Consumption Promotion of the Ministry of Commerce, said provincial and municipal governments will hold exhibitions and sales promotion activities.

He said the nation will groom five international consumption cities – Shanghai, Beijing, Guangzhou, Tianjin and Chongqing – and build 2,057 shopping centrer that can be reached by people within a five to 10 minute walk from home across 80 cities.  

He said the government will also set up recycling centres to handle old home appliances.

Last month, many cities announced their plan to deliver consumption vouchers to the public. Each person can get vouchers worth from 100 to 500 yuan to buy home appliances.

‘Three-horse carriage’

Consumption, fixed-asset investments and exports combined are dubbed the “three-horse carriage,” the main driver of the Chinese economy. When consumption and exports are weak, the Chinese government can order state-owned-enterprises (SOEs) to boost investments but cannot do much to motivate the private ones.

Fixed-asset investments grew 3.8% in the first half from a year earlier, thanks to an 8.1% growth in the investments by SOEs, the National Bureau of Statistics (NBS) said Monday. For the same period, private fixed-asset investments fell 0.2% as investment from Hong Kong, Macau and Taiwan companies dropped 3.4%.

According to the guidelines released by the CCP Central Committee and the State Council, China will help remove barriers in market access and fully implement policies and mechanisms for fair competition. 

The country said it will protect intellectual property rights, the property rights of private firms, and the legitimate rights and interests of entrepreneurs as part of the legal guarantee for the growth of the private economy. More policy support will be provided to facilitate financing for companies and meet labor demand.

“Some countries have forcibly promoted ‘decoupling’ and so-called ‘de-risking,’ artificially setting up obstacles to hinder normal economic and trade exchanges,” Li Xingqian, director general of the Department of Foreign Trade of the Ministry of Commerce, said in a media briefing on Wednesday.

“Companies told us that certain countries politicized trade issues, resulting in the forced outflow of orders and production capacity, which harmed the economic interests of both suppliers and buyers,” Li said

However, he added that China is still full of confidence that it can overcome these difficulties and challenges.

“The supply chain of China’s foreign trade industry chain has strong resilience,” he said. “China’s foreign trade enterprises have been honed and grown up in the international market competition and have inherent innovation capabilities.”

Li said on June 8 that after the pandemic, the resumption of production in neighboring countries had resulted in an outflow of China’s foreign trade orders but the trend is controllable while its impact has been limited. 

He said it’s normal for some companies to choose to move their manufacturing facilities outside China as the country continues to upgrade its industrial sectors. He said the shift can be attributed to the international industrial division of labor.

Other officials also offer optimism mixed with caution.
 
“Given that the first-half GDP growth reached 5.5% and the base in the fourth quarter of last year was low, it should not be a problem for China to meet its 5% GDP growth this year,” Xu Gao, chief economist of Bank of China International (China) Co Ltd, writes in an article published by Guancha.cn on Wednesday. “But it does not mean that the economic situation is satisfactory.” 

“To stabilise demand, we can only rely on boosting domestic consumption as we have no control of the external demand, especially when the future prospects remain not optimistic,” Xu says.  

He says China’s fixed-asset investment was slowed by the poor property markets while the government should do more to stimulate homebuyers’ demands.

Read: China’s June exports hit by weak Western demand

Follow Jeff Pao on Twitter at @jeffpao3

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Dollar angst boils up at worst moment for markets 

The investment world has seen no bigger widow-maker trade this last decade than shorting the US dollar. Yet recent volatility in the reserve currency has punters once again asking whether the great dollar reckoning is finally afoot?

No one knows, of course. The dollar’s sudden and sharp drop in recent days, though, has the whiff of exactly the sort of foreign-exchange shock for which markets have been bracing. As investors wait to see if things unravel, finally, it’s worth exploring how bad things might get.

For now, the dollar’s stumble can easily be explained by shifting considerations of interest rate differential expectations. As strategist Steven Barrow at Standard Bank puts it: “Our call for the dollar to enter a multi-year downtrend is partly based on the fact that the Fed’s tightening cycle will morph into an easing cycle, and this will pull the dollar down even as other central banks cut as well.”

News that inflation rose just 3% in June year on year, a third of the rate of increase a year before, suggests that the most aggressive Federal Reserve tightening cycle in three decades is winding down. The Bank of Japan, by comparison, is locked in place policy-wise, while the People’s Bank of China is in rate-cut mode.

Yet currency crises tend to come very suddenly. It doesn’t take much for a stumble to morph into the real thing. Once a critical mass of global investors starts taking a serious look at the dollar’s fundamentals, things could go south at warp speed.

Chief among the negative data points: a fast-widening current-account deficit; a national debt topping US$32 trillion; highly indebted households, buckling under the weight of hundreds of basis points worth of higher borrowing costs; President Joe Biden’s move to weaponize the dollar to punish Russia over Ukraine; trade friction with China; and a level of political bickering in Washington that has Fitch Ratings mulling a downgrade.

“There’s little evidence, however, of a sustainable uptrend in dollars at this point,” says J C Parets, founder and president of advisory AllStarCharts.com. “In fact, the majority of the data continues to point towards a lower US dollar.”

Strategist Masafumi Yamamoto at Mizuho Securities thinks the dollar will remain “under pressure” unless new evidence emerges that the US economy is “outperforming other countries.”

Economist Edward Bell at Emirates NBD says indications are that “the dollar’s prime position appears largely unchallenged, thus far. But there are developments that may yet drive a longer-term shift away from the US dollar, including the use of sanctions as a US foreign policy tool. There has also been a rise in bilateral agreements to settle trade in local currencies rather than the US dollar.”

A key problem, of course, is a lack of ready alternatives. Analysts at Fitch Analytics argue that “while the US dollar’s role will continue to decline over the coming years, it will be a slow erosion, rather than a paradigm shift. Most importantly, there is no real alternative to the US dollar, and the Chinese yuan is unlikely to become one in the near future.”

Bell adds that “despite a potential longer-term desire amongst some economies to diversify away from the dollar, there are also some fundamental stumbling blocks that may slow or limit this process.” As the International Monetary Fund has suggested, Bell notes, “there is significant inertia in reserve currency status, with a strong bias to using whichever reserve currency has been dominant in the most recent past.”

One possible reason for this inertia, Bell says, “may be the US dollar’s safe-haven status, evident in the perennial demand for US government bonds, even during times when there is heightened risk within the US economy itself. There is also a lack of feasible alternatives, with both the euro and the yuan facing their own issues as real challengers to the dollar.”

Yet little of this will matter if fundamentals get away from Washington. In 1971, Nixon-era Treasury Secretary John Connally famously said that the “dollar is our currency, but it’s your problem.” Fifty-two years later, Asia is on the frontlines of this very phenomenon.

The dollar has peaked both in cyclical and secular terms,” says strategist Luca Paolini at Pictet Asset Management. “The overvaluation is significant and our models show the dollar is 20% above its fair value versus a basket of currencies. US productivity growth is weak, fiscal policy is too loose and interest rate differentials are no longer supportive of the US currency. The dollar’s depreciation is likely to be particularly pronounced against low-yielding currencies, such as the Swiss franc.”

The risk is that investors turn on the dollar en masse, setting off a disastrous domino effect. It’s then that the poor financial fundamentals unnerving markets collide with geopolitical tensions. A big one is governments from China to Russia to Saudi Arabia searching for alternatives.

The ways in which the Biden White House moved in 2022 to freeze some of Russia’s currency reserves only encouraged the anti-dollar movement.

In April, US Treasury Secretary Janet Yellen acknowledged that “There is risk when we use financial sanctions that are linked to the role of the dollar that over time it could undermine the hegemony of the dollar.” Yet, she added, the dollar “is used as a global currency for reasons” that include the fact it is “not easy for other countries to find an alternative with the same properties.”

Julius Sen, a political economy expert at the London School of Economics, notes that the term weaponization is “apt as it explains how a relatively neutral but essential facility – the dollar and its accompanying payment system – have been turned into a powerful weapon by one UN member state against another without appropriate sanctions in place.” In addition to amounting to weaponization, the freeze on Russian currency reserves “also represents an aggressive form of extraterritoriality which has perhaps not been seen on this scale in the past.”

Washington’s use of the dollar to gain political leverage could drive other countries to “find their own coping mechanisms,” Sen says. Possible mechanisms that he lists include diversifying into other currencies, shunning dollar-denominated assets and turning to capital controls.

For China’s yuan, the lack of full convertibility remains a turnoff for many global investors. And, in the short run, so is concern that Asia’s biggest economy is veering toward deflation.

Analyst Kelvin Wong at OANDA warns that “further yuan weakness is likely to put more financial burden on the current offshore bonds payment obligations of Chinese property developers where the property industry still faces a credit crunch issue due to a weak internal demand environment.”

What’s more, Wong adds, “brewing financial stress of major Chinese property developers is on the rise again: Prices of their onshore dollar bonds tumbled significantly in the last two days.”

Adding to the PBOC’s list of worries, Wong says, are a trading halt announcement made by Sino-Ocean Group in a local note that is due to mature in two weeks and Dalian Wanda Group’s issuance of a warning to its creditors of a funding shortfall for a bond that is due for redemption on July 23.

The bottom line, Wong says, is that “failure to negate the current negative sentiment in the China stock market may further reinforce a negative feedback loop into the real economy which in turn increases the risk of a deflationary spiral.”

Yet the dollar’s downward trajectory could have the yuan moving higher in the second half of 2023. Strategist Kit Juckes at Société Générale thinks the dollar could soon return to its December 2020 lows.

“As was the case in January/February before the SVB mini crisis, the market is anticipating the peak in US rates and a further narrowing relative rates,” Juckes notes. “If nothing happens to scupper those expectations — another upside surprise in US growth, or further European growth disappointment — I would expect the Dollar Index to move closer but not all the way to the lows at the end of 2020.”

After that, no one really knows. The typical financial dynamics and yardsticks are far less applicable in today’s market environment.

“We’ve got a one-in-a-100-years pandemic and a once-in-75-years war and a-once-in-25-years energy crisis all thrown into the mix together,” Juckes explains. “You’ve got to be 120 years old to have any understanding of this.”

One such imponderable today is how central banks and governments tame inflation emanating from non-monetary sources — including from supply chain tensions beyond policymakers’ control.

“The great lingering fear among central banks is that the longer it takes to bring down inflation, the greater the risk of it becoming entrenched,” says economist David Bassanese at BetaShares Exchange Traded Funds.

That’s why, notes George Saravelos, global head of FX research at Deutsche Bank, “a confirmation that the US disinflation process is underway in soft landing conditions is for us the most important macro variable for the rest of the year.”

Yet no risk trumps that of the dollar, the linchpin of international finance, finally having its comeuppance. It’s too early to say that this long-awaited reckoning is afoot. If it is, economies everywhere will quickly find themselves in harm’s way.

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China exports shift south

Preview of this week’s Global Polarity Monitor: China’s exports fell 12.4% YoY in June, mainly due to weakness in development markets and the global electronics industry. Taiwan’s exports were down 19.6%, by way of comparison. But there are some notable patterns in the Chinese data. Exports to the Global South fell from an historic high, and continue to surpass exports to developed markets. EV exports led a surge in exports to Russia, shunned by European automakers. Turkey and Mexico both showed strong growth. Although exports to ASEAN were down, they are still at double the level of 2017. China’s exports to the Global South have a high proportion of capital and intermediate goods, including digital infrastructure. That contributes to China’s goal of raising productivity through AI and high-speed data transmission.

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New, thin-lensed telescope could see far beyond James Webb

Astronomers have discovered more than 5,000 planets outside of the solar system to date. The grand question is whether any of these planets are home to life. To find the answer, astronomers will likely need more powerful telescopes than exist today.

I am an astronomer who studies astrobiology and planets around distant stars. For the last seven years, I have been co-leading a team that is developing a new kind of space telescope that could collect a hundred times more light than the James Webb Space Telescope, the biggest space telescope ever built.

Almost all space telescopes, including Hubble and Webb, collect light using mirrors. Our proposed telescope, the Nautilus Space Observatory, would replace large, heavy mirrors with a novel, thin lens that is much lighter, cheaper and easier to produce than mirrored telescopes.

Because of these differences, it would be possible to launch many individual units into orbit and create a powerful network of telescopes.

A blue planet with clouds.
Exoplanets, like TOI-700d shown in this artist’s conception, are planets beyond our solar system and are prime candidates in the search for life. Photo: NASA’s Goddard Space Flight Center via The Conversation

The need for larger telescopes

Exoplanets – planets that orbit stars other than the Sun – are prime targets in the search for life. Astronomers need to use giant space telescopes that collect huge amounts of light to study these faint and faraway objects.

Existing telescopes can detect exoplanets as small as Earth. However, it takes a lot more sensitivity to begin to learn about the chemical composition of these planets. Even Webb is just barely powerful enough to search certain exoplanets for clues of life – namely gases in the atmosphere.

The James Webb Space Telescope cost more than US$8 billion and took over 20 years to build. The next flagship telescope is not expected to fly before 2045 and is estimated to cost $11 billion. These ambitious telescope projects are always expensive, laborious and produce a single powerful – but very specialized – observatory.

A new kind of telescope

In 2016, aerospace giant Northrop Grumman invited me and 14 other professors and NASA scientists – all experts on exoplanets and the search for extraterrestrial life – to Los Angeles to answer one question: What will exoplanet space telescopes look like in 50 years?

In our discussions, we realized that a major bottleneck preventing the construction of more powerful telescopes is the challenge of making larger mirrors and getting them into orbit. To bypass this bottleneck, a few of us came up with the idea of revisiting an old technology called diffractive lenses.

A cross section of two lenses, with the one on the left showing a jagged surface and the one on the right a rounded surface.
Diffractive lenses, left, are much thinner compared to similarly powerful refractive lenses, right. Photo: Pko / Wikimedia Commons

Conventional lenses use refraction to focus light. Refraction is when light changes direction as it passes from one medium to another – it is the reason light bends when it enters water. In contrast, diffraction is when light bends around corners and obstacles. A cleverly arranged pattern of steps and angles on a glass surface can form a diffractive lens.

The first such lenses were invented by the French scientist Augustin-Jean Fresnel in 1819 to provide lightweight lenses for lighthouses. Today, similar diffractive lenses can be found in many small-sized consumer optics – from camera lenses to virtual reality headsets.

Thin, simple diffractive lenses are notorious for their blurry images, so they have never been used in astronomical observatories. But if you could improve their clarity, using diffractive lenses instead of mirrors or refractive lenses would allow a space telescope to be much cheaper, lighter and larger.

A person holding a round, thin piece of glass.
One of the benefits of diffractive lenses is that they can remain thin while increasing in diameter. Photo: Daniel Apai/University of Arizona, CC BY-ND

A thin, high-resolution lens

After the meeting, I returned to the University of Arizona and decided to explore whether modern technology could produce diffractive lenses with better image quality. Lucky for me, Thomas Milster – one of the world’s leading experts on diffractive lens design – works in the building next to mine. We formed a team and got to work.

Over the following two years, our team invented a new type of diffractive lens that required new manufacturing technologies to etch a complex pattern of tiny grooves onto a piece of clear glass or plastic. The specific pattern and shape of the cuts focuses incoming light to a single point behind the lens.

The new design produces a near-perfect quality image, far better than previous diffractive lenses.

A triangular piece of glass with subtle etchings reflecting in the light.
A diffractive lens bends light using etchings and patterns on its surface. Photo: Daniel Apai / University of Arizona, CC BY-ND

Because it is the surface texture of the lens that does the focusing, not the thickness, you can easily make the lens bigger while keeping it very thin and lightweight. Bigger lenses collect more light, and low weight means cheaper launches to orbit – both great traits for a space telescope.

In August 2018, our team produced the first prototype, a 2-inch (5-centimeter) diameter lens. Over the next five years, we further improved the image quality and increased the size. We are now completing a 10-inch (24-cm) diameter lens that will be more than 10 times lighter than a conventional refractive lens would be.

The power of diffraction

This new lens design makes it possible to rethink how a space telescope might be built. In 2019, our team published a concept called the Nautilus Space Observatory.

Using the new technology, our team thinks it is possible to build a 29.5-foot (8.5-meter) diameter lens that would be only about 0.2 inches (0.5 cm) thick. The lens and support structure of our new telescope could weigh around 1,100 pounds (500 kilograms).

This is more than three times lighter than a Webb-style mirror of a similar size and would be bigger than Webb’s 21-foot (6.5-meter) diameter mirror.

A spherical object in space with a lens on one side.
The thin lens allowed the team to design a lighter, cheaper telescope, which they named the Nautilus Space Observatory. Photo: Daniel Apai / University of Arizona, CC BY-ND

The lenses have other benefits, too.

First, they are much easier and quicker to fabricate than mirrors and can be made en masse. Second, lens-based telescopes work well even when not aligned perfectly, making these telescopes easier to assemble and fly in space than mirror-based telescopes, which require extremely precise alignment.

Finally, since a single Nautilus unit would be light and relatively cheap to produce, it would be possible to put dozens of them into orbit. Our current design is in fact not a single telescope, but a constellation of 35 individual telescope units.

Each individual telescope would be an independent, highly sensitive observatory able to collect more light than Webb. But the real power of Nautilus would come from turning all the individual telescopes toward a single target.

By combining data from all the units, Nautilus’ light-collecting power would equal a telescope nearly 10 times larger than Webb. With this powerful telescope, astronomers could search hundreds of exoplanets for atmospheric gases that may indicate extraterrestrial life.

Although the Nautilus Space Observatory is still a long way from launch, our team has made a lot of progress. We have shown that all aspects of the technology work in small-scale prototypes and are now focusing on building a 3.3-foot (1-meter) diameter lens.

Our next steps are to send a small version of the telescope to the edge of space on a high-altitude balloon. With that, we will be ready to propose a revolutionary new space telescope to NASA and, hopefully, be on the way to exploring hundreds of worlds for signatures of life.

Daniel Apai, Associate Dean for Research and Professor of Astronomy and Planetary Sciences, University of Arizona

Disclosure: Daniel Apai receives funding from NASA, NSF, and the Gordon and Betty Moore Foundation. He works for The University of Arizona.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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How Chinese-Australians see Australia’s foreign policy

Since the Lowy Institute’s first “Being Chinese in Australia: Public Opinion in Chinese Communities” survey was published in 2021, Australia’s relations with China have undergone significant upheaval. 

The Covid-19 pandemic, the rupture in Australia–China relations, the election of a Labor government and the turbulence in both countries accompanying their re-openings after their Covid-19 lockdowns have placed Chinese-Australian communities in the public spotlight.

Chinese-Australians and their association with Beijing have come under the microscope from the Australian government, media and the public — often in intensely political circumstances.

While the Labor government has eschewed megaphone diplomacy with China — an approach favored by the former Coalition government — certain parameters have been set for the way Australia views and engages with China.

Still, Chinese-Australians have welcomed the political re-engagement between Australia and China.

The “Being Chinese in Australia: Public Opinion in Chinese Communities” survey report released in April 2023 shows that 37% of Chinese-Australians think Australia-China relations will be a “critical threat” to Australia’s vital interests in the next 10 years – a 14% drop since 2021.

The greater sense of optimism about Australia-China relations coincides with more positive feelings towards Australia in general. For example, 92% of Chinese-Australians say Australia is a “good” or “very good” place to live in the 2023 survey.

Chinese students strolling at an Australian university. Image: EAF

Chinese-Australians trust Australia most to act responsibly in the world, reinforcing their growing connections to Australia. Meanwhile, their sense of belonging to China and the Chinese people has declined, dovetailing with a drop in trust in China. Now less than half of the Chinese-Australian population has confidence in China’s President Xi Jinping.

Intense debates about China are now mainstream in Australian politics and this has placed Chinese-Australians in an uncomfortable position.

News headlines warning about the prospect of war do not align neatly with Chinese-Australians’ threat perception. Six out of ten Chinese-Australians say China is unlikely to be a military threat to Australia in the next 20 years.

Seven in ten Chinese-Australians believe Australia should remain neutral in the event of a military conflict between China and the United States – a view shared by only half of the Australian population. 

Yet there are differences within the Chinese-Australian communities. Of those born in mainland China, 73% say Australia should remain neutral compared to 65% of those born in Australia and 61% of those born in Hong Kong.

But the headlines and aggressive political rhetoric about China homogenizes and reinforces public perceptions about China and inadvertently, Chinese-Australians.

The political rhetoric about China has changed under the Labor government. But more work needs to be done to create a cohesive Australian society in the face of persistent discrimination and negative portrayals of China and ethnic Chinese in the media.

The evolution of the Australia-China debate and its impact on Chinese-Australian communities show that foreign and defense policies and national security should not be treated as separable from domestic politics. Public discussions about such policies have a quantifiable impact on a large proportion of Australia’s population.

How Australia should navigate the intersection of national security and social cohesion with China is uncertain. Increasing cultural and linguistic diversity among Australia’s national security and intelligence community could help.

Australia’s Chinese diaspora and their bicultural skills should be channeled as an asset into helping navigate the Australia-China relationship.

Workforce diversification is not a new argument and some will contend that it will not change Australia’s basic orientation when it comes to national security. But from a technical expertise perspective, Australia’s intelligence community is lacking cultural and linguistic diversity

Government departments involved in managing Australia-China relations appear to be ill-equipped for the strategic moment when only 1.2% and 1.7% of Department of Foreign Affairs and Trade staff and the defense workforce respectively are proficient in Mandarin.

Diversity in key intelligence institutions creates “a synergy of different perspectives” to address complex issues that can increase the array of policy options available to governments. Australia could start seeing Chinese politics in a more nuanced way rather than as a pyramid where President Xi sits on top. 

Australian Prime Minister Anthony Albanese and Chinese President Xi Jinping meet and greet at the Bali G20 Summit on November 15, 2022. Image: Twitter

There is a lot of policy entrepreneurialism at the local level in Chinese politics and local officials often conduct government affairs that subvert the complete control of the Chinese Communist Party.

Perhaps those who make calculations about China’s role in Australia’s region will see that a myriad of interests shape China – and that a one-size-fits-all policy does not suffice when managing Australia-China relations – if they accept that China is more complex than Xi and the Chinese Communist Party. 

Greater cultural and linguistic diversity in government will ultimately shape how Australia sees Chinese-Australian communities too. They are pluralistic and diverse with skills that can benefit the nation.

The lack of diversity across key Australian public and international facing institutions presents huge obstacles when addressing the complex nature of Australia’s relationship with China, let alone with the world.

Jennifer Hsu is Visiting Senior Fellow at the Social Policy Research Centre, UNSW and is the author of Being Chinese in Australia: Public Opinion in Chinese Communities and was previously the Project Director of the Multiculturalism, Identity and Influence Project at the Lowy Institute.

This article was originally published by East Asia Forum and is republished under a Creative Commons license.

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China’s foreign policy counter to US-led containment

At last week’s NATO summit, the members issued a final statement criticizing China’s coercive policies, which they said challenge the interests, security and values of the bloc.

The NATO members did, however, commit to “constructive engagement” with the rapidly rising superpower.

Beijing reacted strongly to the statement nonetheless. It accused the alliance of “smearing and lying” about China and warned against NATO’s outreach efforts in the Asia-Pacific.

Foreign Ministry spokesperson Wang Wenbin said in blunt terms:

NATO must abandon the outdated Cold War mentality and zero-sum mindset, renounce its blind faith in military might and misguided practice of seeking absolute security, halt the dangerous attempt to destabilize Europe and the Asia-Pacific and stop finding pretext for its continuous expansion.

How the US is challenging China

China’s strong reaction reflects its serious concerns over the global challenges it faces. These include:

  • the growing networks of US-led alliances and security partnerships, such as the Quad and AUKUS, which aim to constrain if not contain China
  • US and European Union policies of de-risking and diversifying their supply chains to reduce their reliance on China
  • and more restrictive export control regulations the US has enacted on high-tech transfers or exchanges. These are meant to prevent China from gaining the ability to manufacture semiconductors and slow its progress in quantum computing and artificial intelligence.

Even as it becomes more concerned over these challenges, Beijing is hopeful these US-led networks of alliances and partnerships will remain patchwork given their diversity of interests, priorities and commitments.

China also retains significant advantages given its close economic ties with America’s allies and partners. This will influence whether the US can successfully achieve what Beijing believes is its goal of containing China.

China’s strategy in response

Analysts have questioned whether Beijing is smart and patient enough to be able to apply a wedge strategy to divide the US and its allies, or if its misjudgment and hubris could cause it to become overconfident and even arrogant.

Indeed, Beijing’s wolf-warrior diplomacy and assertive policies in recent years have only served to help the US and its allies grow closer to counter these actions.

Beijing may have learned its lessons. It’s now adopting a more proactive and confident diplomacy to counter US encirclement. I’ve observed at least four tactics when it comes to this shifting foreign policy.

1) China is focusing on the region and leaning into its strengths

Beijing recognises it must focus its diplomatic energies on Asia given its importance to China’s security and economic interests.

It is deepening its economic ties with ASEAN, the 10-nation regional bloc, while also supporting ASEAN centrality in the region’s security structures. The Southeast Asian group is wary of being drawn into a US-China conflict and forced to choose sides. It is also concerned US-led initiatives such as the Quad could diminish its role in the region.

At the same time, China has been active in promoting the ASEAN-sponsored Regional Comprehensive Economic Partnership. It believes this group offers a more inclusive and cooperative approach to regional economic cooperation. The group includes the ASEAN members, China and several US allies, such as South Korea, Japan and Australia.

Beijing is billing it as an attractive alternative to the US-sponsored Indo-Pacific Economic Framework for Prosperity. This group, which includes 14 countries in the region, last month signed an agreement on making their supply chains more resilient.

Chinese Foreign Minister Wang Yi shakes hands with his Indonesian counterpart, Retno Marsudi, at the ASEAN foreign ministers’ meeting in Jakarta last week. Photo: Tatan Syuflana / AP via The Conversation

2) Beijing is boosting its diplomatic efforts with Europe

Since lifting its Covid border restrictions, Beijing has welcomed world leaders, hosted business groups and promoted trade and investment opportunities in China.

Europe, in particular, has been the focus of Beijing’s recent diplomacy. Premier Li Qiang’s first major international trip since taking office was to Germany and France last month, where he emphasized economic opportunities over geopolitical differences, partnership over rivalry.

European leaders such as French President Emmanuel Macron, Spanish Prime Minister Pedro Sánchez and German Chancellor Olaf Scholz have also become regular features in Beijing.

These efforts are allowing China to deepen its economic ties with Europe. In so doing, Beijing is hoping to undermine US efforts to develop a transatlantic approach toward China, including policies of de-risking or de-coupling their economies from China.

3) China is standing with Russia – for now

Beijing is likely annoyed, if not dismayed, by the fiasco Russia’s war in Ukraine has become. However, it is determined now is not the time to desert Russian President Vladimir Putin.

From energy supplies to military technology cooperation, Russia remains a vital strategic partner for China. The last thing China wants is a decimated Russia, leaving it to face the US and its networks of alliances and security groups alone. China also would not want to deal with any potential threats from Russia, given their long shared border.

Beijing has carefully, if not convincingly, presented itself as a neutral bystander in the conflict, interested in bringing it to an end. China is also taking advantage of Russia’s precarious position by expanding and consolidating its influence in Central Asia, while remaining respectful of Russia’s traditional ties to the region.

Russian President Vladimir Putin (left) speaks to Chinese President Xi Jinping during the Shanghai Cooperation Organisation summit in Uzbekistan in 2022. Photo: Sergei Bobylev / Pool Sputnik Kremlin / AP via The Conversation

4) China is promoting itself as a global leader

Finally, China has become more confident and active in promoting its models of global governance in security, development and community building.

Some efforts are still in the development stages, such as its Global Security Initiative, while others are more concrete. For example, Beijing sees itself as a global mediator after its success in brokering a truce between Saudi Arabia and Iran in March.

Beijing is also continuing to promote its preferred multilateral institutions, from the Shanghai Cooperation Organisation to the BRICS group, which currently includes China, Brazil, Russia, South Africa and India. Beijing has welcomed expanding the group.

Together with its ambitious and controversial Belt and Road Initiative, Beijing believes it can offer an alternative to the US-led groupings such as the Quad. By relying on institutions in this way, Beijing can promote its interests globally while avoiding direct confrontation with the US.

Jingdong Yuan is Associate Professor, Asia-Pacific security, University of Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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