Chinese Spies in Europe
More arrests last week and more protests by Beijing that they are being unfairly maligned... for their malign behavior
Friends,
Last week I was in Singapore attending the 5th Trilateral Exchange in which Singapore enabled conversations between former officials from the United States and the PRC. The event was hosted by the think tank, RSIS (Rajaratnam School of International Studies at the Nanyang Technological University) and sponsored by the Singaporean Ministry of Defense.
Our Singaporean hosts did a spectacular job and I really appreciated their hospitality. I’m also grateful that my Chinese colleagues made the trip and were willing to participate. RSIS and the Singaporean Ministry of Defense are committed to enabling communication between Washington and Beijing, and for that they deserve gratitude.
To give you a sense of how seriously Singapore takes these efforts, the Singaporean Defense Minister, Dr. Ng Eng Hen, hosted us on Wednesday for lunch and helped guide some pretty frank conversations.
While little was “solved,” we all came away with a better understanding of each others positions and that we will be dealing with an intense Sino-American rivalry for the foreseeable future.
PRC Espionage in Europe
Big week for PRC spying in Europe with multiple arrests across Germany and Britain. As the New York Times pointed out, “Chinese spies seem to be popping up all over Europe.”
I noticed these cases when the Singaporean news outlet, CNA (Channel NewsAsia), featured them prominently in their morning news shows.
The arrests of four individuals in Germany in two separate cases (here and here) appeared to have been delayed until after German Chancellor Olaf Scholz returned from his visit to Beijing. This was a bit passive aggressive in my opinion. It would have been more powerful had the arrests taken place before the Chancellor’s visit, signally that Berlin was willing to accept greater fiction in the relationship and strengthen Berlin’s leverage, but as my friend James Crabtree points out in his latest Foreign Policy piece (“The Strategic Unseriousness of Olaf Scholz”), perhaps we shouldn’t be surprised. The case in Britain stems from news that broke a year ago about how the PRC compromised two parliamentary researchers.
How has the PRC responded to these latest examples of interference in the internal affairs of other countries?
Well, there was the usual feigning of complete innocence and that any and all accusations are the product of a Cold War mentality and/or being puppets of the United States. To quote the PRC Foreign Ministry Spokesperson:
"Let me stress that China carries out cooperation with European and all other countries on the basis of mutual respect and non-interference in each other's internal affairs, and advances mutually beneficial cooperation with relevant parties in accordance with laws and regulations. We hope that relevant people in Germany will ditch the Cold War mentality and stop the political manipulation aimed at China with so-called "spy risks.""
There was also the acceleration of Beijing’s own counterintelligence obsession… in celebration of National Security Education Day (April 15), the PRC released this video showing how any Chinese citizen might be working for the CIA and that only vigilance by patriotic Chinese to report on anything suspicious will save the country.
Blinken’s Visit to the PRC
U.S. Secretary of State Anthony Blinken visited Beijing and Shanghai this week. From my perspective, there were six main take-aways:
For the umpteenth time, the U.S. warned the PRC about supplying the Russian war machine… and the Chinese Communist Party again refused to acknowledge what anyone with a modicum of objectivity can see plainly.
In an equally repetitive manner, the U.S. warned the PRC about how the export of Chinese industrial overcapacity, and other trade practices, harm American prosperity… again Beijing denied its culpability and made counteraccusations.
Blinken likely warned the PRC again to stop attacking U.S. critical infrastructure, which Beijing denies doing and makes counteraccusations.
In keeping with this theme of repetition, Blinken expressed deep concern over Beijing’s aggression and coercion of the Philippines. This stems from territory in the South China Sea that Beijing claims sovereignty over and eight years ago an international tribunal ruled against the PRC on. Again, Beijing refuses to acknowledge its own culpability and simultaneously, the PRC’s senior most military leader was in Qingdao demanding that all of the South China Sea belongs to Beijing and the PRC Ministry of Foreign Affairs was issuing clownish documents like this.
Blinken likely tried again to encourage the PRC to act responsibly towards Taiwan. I suspect that was greeted with blank stares and counteraccusations.
Blinken also tried to make progress on counternarcotics (i.e. getting Beijing to cease the flow of fentanyl to the U.S. that has killed hundreds of thousands of Americans), strengthening military-to-military communications (which has never provided much utility), furthering talks on AI safety, and strengthening people-to-people ties, which cannot proceed until Beijing lets up on its campaign against foreigners.
These trips are becoming quite tiresome and their utility is in question.
Encouraging Beijing to act responsibly and “managing competition” does not seem to be generating much success in achieving outcomes in the issue areas America cares about. It seems Beijing is content to ride out the rest of this Administration and see what happens in November.
Advocates of this approach to “managing competition” through endless engagement claim that “talking” should be seen as a success in and of itself. Under this interpretation, these meetings are examples of “good diplomacy.”
This is a low bar indeed.
Anyone sitting outside of the rarified world of diplomacy might question whether “talking” really is a good measure of success. They might wonder whether progress on issues that we care about is actually a better measure of success. When looked at through that lens, we have made almost no progress on the issues that Blinken says are the most important to the United States:
Fentanyl and its precursors still flow out of the PRC and the PRC turns a blind eye to money-laundering for drug cartels in the Western Hemisphere.
The PRC is providing massive industrial assistance, diplomatic support, and waging information warfare campaigns against Ukraine, NATO, and the United States to help Moscow achieve its objective of defeating and annexing Ukraine.
The PRC provides diplomatic, rhetorical, financial, and material support to both Iran and North Korea in violation of Beijing’s responsibilities as permanent member of the UN Security Council.
The PRC wages cyber-attacks against U.S. and allied critical infrastructure.
The PRC wages economic espionage campaigns against the U.S. and other countries to gain both military and economic advantages.
The PRC runs its economy and conducts its own trade policies to undermine the prosperity of its neighbors and the United States.
The PRC wages coercion campaigns and threatens military aggression against its neighbors to either annex them (Taiwan) or take portions of their territory (India, Vietnam, the Philippines, and Japan).
The PRC continues to wage genocide against Uyghur Muslims and conducts other crimes against humanity on other minority groups in China, while seeking to undermine international efforts to protect human rights.
If we want to measure whether diplomacy has been successful or not, we must measure it against progress on these issues, not whether a meeting took place or how often senior officials have spoken to one another.
Diplomats, like other professionals and experts, don’t like to be measured by outside metrics and feel that they should be insulated from a capricious public. They prefer to design their own metrics and they feel that judgment on whether they succeed in their tasks be reserved to professionals like themselves. There is an entire literature on Professionalism and these dynamics… professionals (doctors, military leaders, engineers) are granted autonomy by the public when they demonstrate an effectiveness in achieving societal objectives. But the public withdraws this support when these experts fail to achieve these broader objectives.
I suspect that this is happening with regards to our diplomatic efforts with Beijing.
There is a gap opening between the way in which diplomats and foreign policy professionals define success in their dealings with the PRC and the way in which the public judges that success against the results they can see.
The natural reaction of these professionals is to close ranks and reject this outside interference in their domain of expertise. That reaction drives the public to push harder on limiting the autonomy of those experts and it becomes a vicious cycle.
Diplomats, just like other professionals, stand the best chance of rescuing their positions as experts by taking these outside criticisms to heart and implementing serious reforms to their own metrics, their own processes, and make changes to hold individuals within the profession responsible. Very little of that has happened yet.
Tweet of the Week – U.S. Ambassador to Japan wins again!
Ambassador Rahm Emanuel continues to demonstrate his unwavering commitment to illuminating the malign activities of the Chinese Communist Party… and for that he has my eternal respect.
Thanks for reading!
Matt
MUST READ
1. China should have confidence to talk to us, Taiwan's president-elect says
Yimou Lee and Ben Blanchard, Reuters, April 25, 2024
China should have the confidence to talk to Taiwan's legally elected government, President-elect Lai Ching-te said on Thursday as he appointed his new national security and diplomacy team amid what he called unprecedented challenges.
China, which views democratically governed Taiwan as its own territory, over the island's strong objections, has ramped up military and political pressure against Taipei during the past four years as it seeks to press sovereignty claims.
Lai, who takes office on May 20, is particularly disliked by Beijing, which views him as a dangerous separatist. Lai has repeatedly offered to talk with China has but been rebuffed.
The challenge the new national security team is facing is unprecedented, given the rise of authoritarianism, and China pressing closer all the time, Lai told reporters as he announced the teams, staffed by people in the current administration.
COMMENT – Beijing should be talking to Lai Ching-te, the Taiwanese President-elect. That is what the international community should expect of a Great Power like the PRC. Since the election of President Tsai in January 2016, the Chinese Communist Party has refused to communicate with the elected leaders of Taiwan, preferring to wage political interference campaigns against Taipei and seeking to create divisions within Taiwanese society.
The fact that Xi Jinping is willing to host Tsai’s predecessor, former Taiwanese President Ma Ying-jeou, in Beijing two weeks ago and appear to have a warm talks, suggests that Xi and the CCP are both petty and insecure, and have very little interest in sincerely managing Cross Strait tensions.
Everyone who considers themselves a friend of the Chinese people should be encouraging Xi and his cadres to end their ridiculous temper tantrum and meet with the elected leaders of Taiwan.
Sincere engagement across the Taiwan Strait, initiated by Beijing and without preconditions, would do much to reduce the tensions and threat of war.
Will the PRC’s leadership act responsibly (as it continuously says it does) and engage with Taiwan’s leadership or will Xi purposefully drive the region, and the world, towards a showdown of Beijing’s creation all to fulfill its imperialistic fantasies?
Only Xi Jinping can make that decision and all the evidence we have so far is that he prefers the latter. That is certainly the path Xi and his cadres have chosen with Manila in the South China Sea, 1500 miles south of the Taiwan Strait.
2. China’s ‘red circle’ law firms rush to tap other markets
Chan Ho-him, Financial Times, April 17, 2024
The PRC’s top law firms, known as the "red circle," are expanding globally, opening offices in Asia and the US at a rapid pace, driven by demand for legal services related to China's Belt and Road Initiative and other projects.
COMMENT – This bears watching over the long term.
3. Back in Stock? The State of Russia's Defense Industry after Two Years of the War
Maria Snegovaya, Max Bergmann, Tina Dolbaia, Nick Fenton, and Samuel Bendett, CSIS, April 22, 2024
This report examines Russia’s evolving defense industrial capabilities and limitations during the second year of the Russia-Ukraine war and analyzes how these changes have affected and will continue to affect battlefield outcomes in Ukraine.
The report starts with an overview of Russia’s domestic arms production efforts throughout 2023, followed by a detailed examination of key Russian weapons systems (such as tanks, artillery, drones, missiles, and electronic warfare systems) and their changing roles on the battlefield.
The report then analyzes Russia’s general procurement dynamics and identifies the imported components and weapons categories that Russia’s defense industry has particularly relied on in the second year of the war. This part includes a case study on China to illuminate Russia’s evolving procurement patterns.
The report then dives into analysis of the Kremlin’s remaining weaknesses, which have been aggravated by a long war of attrition and which can have both short- and long-term effects on its military.
The final part of the report assesses how Russia’s performance throughout 2023 and its evolving defense capabilities might be translated into its offensive posture in Ukraine in 2024. This part of the report is followed by recommendations to Western policymakers on how to counter the Kremlin’s war effort by capitalizing on the Russian military’s existing vulnerabilities.
COMMENT – Starting in early 2023, just as Ukraine was organizing its counteroffensive with the support of NATO, the PRC made the important decision to provide massive support to the Russian defense industrial establishment, so that Moscow could fend off this effort by Ukraine and NATO.
We should openly recognize the situation we are in: for over a year, the PRC and NATO have waged a proxy war against each other in Ukraine.
Washington, Brussels, Berlin, Paris, London and Kyiv refuse to recognize this proxy war openly and Beijing (and Moscow) are more than happy to exploit this situation.
Rather than seeing this as a deliberate policy decision by Xi and his closest advisors to prop up Moscow and help them defeat Ukraine, the U.S. and its European partners appear willing to deceive themselves that empty threats of retaliation and gentle persuasion can get the PRC to change its mind.
4. How Chinese networks clean dirty money on a vast scale
The Economist, April 22, 2024
It is rare these days for America and China to co-operate on anything. As The Economist went to press, America’s secretary of state, Antony Blinken, was on a trip to China, in part to press his hosts to stop sending weapons-related materials to Russia’s defence industries. He will be lucky to get a polite smile. So it is noteworthy that the two countries have recently decided to boost mutual support in another domain: the fight against money-laundering. This month they launched a bilateral forum to discuss the problem. Unlike Russia, it is a big one for both of them.
The menace has grown in recent years, fuelled by underground Chinese networks equipped with new technologies that can enable dirty money to be washed clean in minutes. For transnational criminal gangs, these shadowy “banks” are becoming the financiers of choice. Suppressing them requires the two great powers to talk. Amid their political rancour, discussions about money-laundering had been on ice for years. Their resumption marks “a big change, a big positive change”, says an official from America’s Treasury Department.
COMMENT – Beijing has no intention of dismantling these money laundering networks.
As long as Beijing can feign plausible deniability, this is a feature, not a bug.
Rather than enter into open ended dialogue on money laundering, the U.S. Treasury Department should be imposing massive and asymmetrical costs on the PRC economy for operating these networks.
5. China’s Alternative Order: And What America Should Learn From It
Elizabeth Economy, Foreign Affairs, April 23, 2024
By now, Chinese President Xi Jinping’s ambition to remake the world is undeniable. He wants to dissolve Washington’s network of alliances and purge what he dismisses as “Western” values from international bodies. He wants to knock the U.S. dollar off its pedestal and eliminate Washington’s chokehold over critical technology. In his new multipolar order, global institutions and norms will be underpinned by Chinese notions of common security and economic development, Chinese values of state-determined political rights, and Chinese technology. China will no longer have to fight for leadership. Its centrality will be guaranteed.
To hear Xi tell it, this world is within reach. At the Central Conference on Work Relating to Foreign Affairs last December, he boasted that Beijing was (in the words of a government press release) a “confident, self-reliant, open and inclusive major country,” one that had created the world’s “largest platform for international cooperation” and led the way in “reforming the international system.” He asserted that his conception for the global order—a “community with a shared future for mankind”—had evolved from a “Chinese initiative” to an “international consensus,” to be realized through the implementation of four Chinese programs: the Belt and Road Initiative, the Global Development Initiative, the Global Security Initiative, and the Global Civilization Initiative.
Outside China, such brash, self-congratulatory proclamations are generally disregarded or dismissed—including by American officials, who have tended to discount the appeal of Beijing’s strategy. It is easy to see why: a large number of China’s plans appear to be failing or backfiring. Many of China’s neighbors are drawing closer to Washington, and its economy is faltering. The country’s confrontational “Wolf Warrior” style of diplomacy may have pleased Xi, but it won China few friends overseas. And polls indicate that Beijing is broadly unpopular worldwide: A 2023 Pew Research Center study, for example, surveyed attitudes toward China and the United States in 24 countries on six continents. It found that only 28 percent of respondents had a favorable opinion of Beijing, and just 23 percent said China contributes to global peace. Nearly 60 percent of respondents, by contrast, had a positive view of the United States, and 61 percent said Washington contributes to peace and stability.
6. China blasts US military aid to Taiwan, saying the island is entering a ‘dangerous situation’
Associated Press, April 24, 2024
China on Wednesday blasted the latest package of U.S. military assistance to Taiwan on Wednesday, saying that such funding was pushing the self-governing island republic into a “dangerous situation.”
The U.S. Senate late Tuesday passed $95 billion in war aid to Ukraine, Israel and Taiwan after months of delays and contentious debate over how involved the United States should be in foreign wars. China claims the entire island of Taiwan as its own territory and has threatened to take it by force if necessary.
The mainland’s Taiwan Affairs Office said the aid “seriously violates” U.S. commitments to China and “sends a wrong signal to the Taiwan independence separatist forces.”
Office spokesperson Zhu Fenglian added that Taiwan’s ruling pro-independence Democratic Progressive Party, which won a third four-year presidential term in January, is willing to “become a pawn for external forces to use Taiwan to contain China, bringing Taiwan into a dangerous situation.”
COMMENT – The only thing that is dangerous about this situation is that Beijing threatens to start a war to justify its annexation of Taiwan… that threat exists regardless of whether the United States or other countries provide Taiwan with arms or rhetorical support.
Beijing is seeking to justify its coercion of Taiwan and a potential war of aggression by blaming everyone except themselves.
7. Inside Lawmakers’ Secretive Push to Pass the TikTok Bill
Sapna Maheshwari, David McCabe, and Cecilia Kang, New York Times, April 24, 2024
Just over a year ago, lawmakers displayed a rare show of bipartisanship when they grilled Shou Chew, TikTok’s chief executive, about the video app’s ties to China. Their harsh questioning suggested that Washington was gearing up to force the company to sever ties with its Chinese owner — or even ban the app.
Then came mostly silence. Little emerged from the House committee that held the hearing, and a proposal to enable the administration to force a sale or ban TikTok fizzled in the Senate.
But behind the scenes, a tiny group of lawmakers began plotting a secretive effort that culminated on Wednesday, when President Biden signed a bill that forces TikTok to be sold by its Chinese owner, ByteDance, or risk being banned. The measure, which the Senate passed late Tuesday, upends the future of an app that claims 170 million users in the United States and that touches virtually every aspect of American life.
For nearly a year, lawmakers and some of their aides worked to write a version of the bill, concealing their efforts to avoid setting off TikTok’s lobbying might. To bulletproof the bill from expected legal challenges and persuade uncertain lawmakers, the group worked with the Justice Department and White House.
COMMENT – It remains to be seen whether this will hold up to legal challenges, but from a national security perspective there should be nothing objectionable about ensuring that a hostile foreign power with a long history of political interference into the internal affairs of other countries should not have control over a major media outlet in the United States (if TikTok were a radio station or a TV station, ByteDance would have to get a license from the FCC and its would almost certainly be denied… it is mind-boggling that we’ve allowed media outlets on the internet escape this nearly 90 year-old requirement).
If sovereignty means anything, Washington should be able to take this action through legislation.
When the Senate passed this Bill on Tuesday evening, I was in a closed-door dialogue with PRC representatives in Singapore on Wednesday… I was proud to inform them of this passage within 30 minutes of it happening.
None of this was possible without the hard work of Representative Mike Gallagher of Wisconsin. Unfortunately, Representative Gallagher resigned from the House this week, though I’m certain this isn’t the last we will see of him in public service.
Godspeed Mike, the American people are lucky to count you as one of our own.
8. Chinese general takes a harsh line on Taiwan and other disputes at an international naval gathering
Ng Han Guan and Christopher Bodeen, Associated Press, April 23, 2024
One of China’s top military leaders took a harsh line on regional territorial disputes, telling an international naval gathering in northeastern China on Monday that the country would strike back with force if its interests came under threat.
The 19th biennial meeting of the Western Pacific Naval Symposium opened in Qingdao, where China’s northern naval force is based, providing a vivid backdrop to China’s massive military expansion over the past two decades that has seen it build or refurbish three aircraft carriers.
The two-day talks have drawn representatives from partners and competitors including Australia, Cambodia, Chile, France, India and the U.S. and comes amid heightened tensions over China’s assertive actions in the Taiwan Strait and the East and South China seas, and as China’s navy has grown into the world’s largest by number of hulls.
COMMENT – As the PRC was hosting this meeting in Qingdao, other representatives of the People’s Liberation Army were in Singapore at the 5th RSIS Trilateral Exchange that I had the opportunity to participate in.
The PLA representatives in Singapore were just outspoken and hostile to the interests of their neighbors in the region and the United States.
Those representatives largely dismissed the Philippines as ‘not being a real country’ and that their territorial concerns were irrelevant.
The only interests that mattered to these PLA representatives was Beijing’s. In their telling, the PRC is the only Great Power who hasn’t been allowed to take back all the territory that is theirs (of course that period of time they point to is the height of Chinese Imperialism under the Qing Dynasty in the early 19th Century… if we were to make that the standard of measure then presumably Britain deserves India back, France deserves North Africa, and Spain deserves portions of Central and South America… claims that we would rightly dismiss as ridiculous).
My Chinese colleagues argued that the Chinese people deserve this territory and they are fully justified in taking it back, regardless of international law.
Interestingly, the PLA representatives failed to recognize that this is the exact same argument that Putin is making about Ukraine… that Russia, as a “Great Power” has had its rightful territory taken away from it when it was weak, they are justified in taking it back, Ukrainians are just Russians, and that Ukraine isn’t a real country either.
When permanent members of the UN Security Council and nuclear powers (the most privileged countries in the world) start basing their foreign policies on righting imagined grievances and portraying themselves as victims, we are in a really, really dangerous world.
My Chinese colleagues also repeatedly stated over two days that “China is NOT a bully.”
[Sidebar – If you have to tell people over and over that you are not a bully, you are probably a bully.]
Authoritarianism
9. China’s security ministry hails move to reward postal and parcel workers for spy tip-offs in eastern province
Yuanyue Dang, South China Morning Post, April 24, 2024
10. Censors in China clamp down on micro-dramas
Aw Cheng wei, Straits Times, April 26, 2024
Censors in China have imposed their toughest restrictions to date on micro-dramas by requiring all content to be vetted before release, following the short-video format’s runaway popularity in recent months.
The new regulations will kick in on June 1, and are aimed at making sure production companies and streaming platforms do not overstep the existing boundaries established by censors for video content in a race to grab eyeballs as competition hots up, analysts said.
COMMENT – Paranoid… no wonder that thousands of Chinese citizens, rich and poor, are looking for ways to get out of the PRC.
11. Blinken expected to deliver strong warning on Russia support as he arrives in China for key meetings
Jennifer Hansler, Kylie Atwood, an Nectar Gan, CNN, April 24, 2024
12. U.S. Takes Aim at Chinese Banks Aiding Russia War Effort
Ian Talley and Alan Cullison, Wall Street Journal, April 23, 2024
The U.S. is drafting sanctions that threaten to cut some Chinese banks off from the global financial system, arming Washington’s top envoy with diplomatic leverage that officials hope will stop Beijing’s commercial support of Russia’s military production, according to people familiar with the matter.
But as Secretary of State Antony Blinken heads to Beijing on Tuesday, the question is whether even the threat of the U.S. using one of its most potent tools of financial coercion can put a dent in complex and burgeoning trade between Beijing and Moscow that has allowed the Kremlin to rebuild a military badly mauled by more than two years of fighting in Ukraine.
China has heeded Western warnings not to send arms to Russia since the beginning of the war, but since Blinken’s trip to Beijing last year, China’s exports of commercial goods that also have military uses have surged. With China now the primary supplier of circuitry, aircraft parts, machines and machine tools, U.S. officials say Beijing’s aid has allowed Moscow to rebuild its military industrial capacity.
The West now worries Russia could win against Ukraine in a war of attrition, particularly if allies don’t mobilize their own industries to match Russian production.
Blinken and other top cabinet officials have been sounding the alarm among Western allies, including last week at a meeting of the Group of Seven industrialized nations in Capri, Italy.
COMMENT – We have been “taking aim” for over two years, the question now is: will Washington and its European partners ever actually go beyond warnings and rhetoric?
13. Pharma groups warn of supply crunch over China spying law
Arjun Neil Alim, Oliver Barnes, and Ian Johnston, Financial Times, April 20, 2024
14. US business group says policy ‘inconsistency’ hurting China investment
Thomas Hale, Financial Times, April 23, 2024
15. U.S.-China relations 'stable but fragile,' AmCham chief says
Grace Li, Nikkei Asia, April 23, 2024
16. The Axis of Upheaval
Andrea Kendall-Taylor and Richard Fontaine, Foreign Affairs, April 23, 2024
17. Why Xi and Biden chose the same day to send a message on Taiwan
Katsuji Nakazawa, Nikkei Asia, April 18, 2024
18. China acquired recently banned Nvidia chips in Super Micro, Dell servers, tenders show
Eduardo Baptista, Fanny Potkin, and Max A. Cherney, Reuters, April 23, 2024
Chinese universities and research institutes recently obtained high-end Nvidia artificial intelligence chips through resellers, despite the U.S. widening a ban last year on the sale of such technology to China.
A Reuters review of hundreds of tender documents shows 10 Chinese entities acquired advanced Nvidia chips embedded in server products made by Super Micro Computer Inc., Dell Technologies Inc. and Taiwan's Gigabyte Technology Co Ltd after the U.S. on Nov. 17 expanded the embargo to subject more chips and countries to licensing rules.
Specifically, the servers contained some of Nvidia's most advanced chips, according to the previously unreported tenders fulfilled between Nov. 20 and Feb. 28. While the U.S. bars Nvidia and its partners from selling advanced chips to China, including via third parties, the sale and purchase of the chips are not illegal in China.
The 11 sellers of the chips were little-known Chinese retailers. Reuters could not determine whether, in fulfilling the orders, they used stockpiles acquired before the U.S. tightened chip-export restrictions in November.
Contacted by Reuters, Nvidia said the tenders specify products that were exported and widely available before the restrictions. "They do not indicate that any of our partners violated the export control rules and are a negligible fraction of the products sold worldwide," a spokesperson said.
The server makers said they complied with applicable laws or would investigate further.
Among the buyers were the Chinese Academy of Sciences, the Shandong Artificial Intelligence Institute, Hubei Earthquake Administration, the Shandong and Southwest universities, a tech investment firm owned by the Heilongjiang provincial government, a state-run aviation research centre, and a space science centre.
None of the Chinese buyers and retail sellers responded to questions from Reuters about the matter.
Daniel Gerkin, a Washington-based partner at law firm Kirkland & Ellis, said Nvidia chips could have been diverted to China without a manufacturer's knowledge, given a lack of visibility into downstream supply chains.
If the manufacturer had performed sufficient due diligence, "it presumably would be challenging for the U.S. government to pursue an enforcement action", he said.
COMMENT – Unless and until, companies like Nvidia are forced to implement ‘Know Your Customer’ procedures like banks are in terrorist financing, we should expect to see more of this. Companies that produce these advanced dual-use items are simply not incentivized to protect U.S. national security.
They will avoid obvious violations of export control laws, but will do next to nothing to prevent diversion as long as they are not held responsible for where their chips end up.
19. Desmond Shum on how Xi Jinping beat down China’s red aristocrats
The Economist, April 22, 2024
20. Xi Jinping is quietly sanction-proofing China
Miquel Vila, UnHerd, April 22, 2024
21. The Societal Basis for National Competitiveness
Timothy R. Heath, Clint Reach, Michael J. Mazarr, RAND, March 12, 2024
Environmental Harms
22. Tesla Co-Founder JB Straubel Built an EV Battery Colossus to Rival China
Tom Randall, Bloomberg, April 18, 2024
23. China can't quit coal by 2040, researchers say, despite global climate goals
Colleen Howe, Reuters, April 22, 2024
Foreign Interference and Coercion
24. TikTok Ban in US Looms as Biden Kicks Off 270-Day Countdown
Alex Barinka, Bloomberg, April 24, 2024
25. TikTok Vows Legal Battle as the US Presses for App’s Sale or Ban
Zheping Huang, Bloomberg, April 21, 2024
26. TikTok ‘ban’ passes in the House again, moving to the Senate in foreign aid package
Lauren Feiner, The Verge, April 20, 2024
27. TikTok and China’s Digital Platforms: Issues for Congress
Congressional Research Service, April 22, 2024
28. New Zealand Becomes the Latest Country to Pivot to the U.S.
Derek Grossman, Foreign Policy, April 23, 2024
29. Toxic: How the search for the origins of COVID-19 turned politically poisonous
Dake Kang and Maria Cheng, Associated Press, April 22, 2024
30. Cambodia’s ‘most reliable friend’? China’s Wang Yi goes on the charm offensive
Zhao Ziwen, South China Morning Post, April 23, 2024
31. Japan 'two-faced' for seeking closer ties while warning of China threat, Chinese state media says
Reuters, April 17, 2024
32. San Francisco Mayor Gives Panda Diplomacy a Try
Heather Knight, New York Times, April 23, 2024
33. Top Chinese Swimmers Tested Positive for Banned Drug, Then Won Olympic Gold
Michael S. Schmidt And Tariq Panja, New York Times, April 20, 2024
34. Senate Passes $95 Billion Package to Help Ukraine and Israel
Katy Stech Ferek and Lindsay Wise, New York Times, April 24, 2024
Human Rights and Religious Persecution
35. PODCAST - How the Chinese state is hollowing out religion in Xinjiang
Drum Tower, The Economist, April 23, 2024
Industrial Policies and Economic Espionage
36. Hong Kong hit by third straight weak IPO as AI player Mobvoi disappoints
Echo Wong, Nikkei Asia, April 24, 2024
37. Nokia cuts orders with China-listed supplier as U.S. pushes 'clean network'
Lauly Li, Nikkei Asia, April 18, 2024
38. Europe wants two things from China. It may not get far on either of them
Ken Moritsugu, Associated Press, April 18, 2024
39. Can the IMF solve the poor world’s debt crisis?
The Economist, April 18, 2024
40. China’s Surging Steel Exports Are Inflaming Global Trade Tension
Bloomberg, April 22, 2024
41. Sagging Real Estate and Bad Debts: China’s Banking System Risk
Antonio Graceffo, Geopolitical Monitor, April 16, 2024
42. Proposals to Regulate U.S. Outbound Investment to China
Congressional Research Service, April 8, 2024
43. UBS shuts some China private funds, will lay off staff, sources say
Selena Li and Samuel Shen, Reuters, April 18, 2024
44. Mexico, facing US pressure, will halt incentives to Chinese EV makers
Diego Oré, Reuters, April 18, 2024
45. One French Company’s Lonely Struggle to Survive Fierce Competition From China
Matthew Dalton, Wall Street Journal, April 20, 2024
46. Chinese Villagers Jumped at the Deal of a Lifetime—Then It Turned Sour
Cao Li, Wall Street Journal, April 23, 2024
47. China’s Economy Is ‘Failing,’ U.S. Indo-Pacific Commander Says
Peter Landers, Wall Street Journal, April 23, 2024
48. Chinese Bubble Tea Maker Slides in Hong Kong’s Largest Listing This Year
Jiahui Huang and Ben Otto, Wall Street Journal, April 23, 2024
49. China turns the heat up on cross-border investments in local govt debt, sources say
Xie Yu, Reuters, April 23, 2024
Cyber & Information Technology
50. Huawei starts sales of new Pura 70 smartphone to crowds amid chip scrutiny
Josh Ye, David Kirton, and Brenda Goh, Reuters, April 18, 2024
51. Biden signs bill that could ban TikTok, a strike years in the making
Cristiano Lima-Strong, Washington Post, April 24, 2024
52. China's Huawei launches new software brand for intelligent driving
Qiaoyi Li and Brenda Goh, Reuters, April 23, 2024
Military and Security Threats
53. French Navy makes debut in annual US-Philippine war games amid South China Sea tensions
Mara Cepeda, Straits Times
The French Navy has joined the annual war games between the Philippines and the US for the first time in 2024, in a move that analysts say demonstrates the solidarity among Washington and its allies in backing Manila’s claims over the disputed South China Sea.
France’s Floreal-class frigate FS Vendemiaire began its 10-day multilateral maritime exercise alongside the Philippines’ offshore patrol vessel BRP Ramon Alcaraz and landing dock BRP Davao del Sur, as well as the US’ landing ship dock USS Harpers Ferry on April 25.
The vessels from the three countries will be conducting various maritime drills within the eastern parts of the South China Sea that lie in the Philippines’ 200-nautical mile exclusive economic zone, where tensions have been boiling in the past months between Manila and Beijing.
54. South China Sea: will Beijing ramp up militarisation after US missile system deployed in the Philippines?
Seong Hyeon Choi, South China Morning Post, April 18, 2024
55. Germany spying: Three suspected Chinese agents arrested
Ido Vock, BBC, April 24, 2024
56. China wants ability to invade Taiwan by 2027, U.S. admiral says
Hiroyuki Akita, Nikkei Asia, April 24, 2024
57. Russia Hosts China, Iran Security Chiefs to Discuss Cooperation
Bloomberg, April 23, 2024
58. South China Sea: ‘upsurge’ in Chinese militia vessels as Balikatan drills begin ‘out of the norm’, Philippines says
Jeoffrey Maitem, South China Morning Post, April 24, 2024
59. Cause for concern: US watching China’s ‘breathtakingly fast’ space development ‘very, very closely’, top commander says
Seong Hyeon Choi, South China Morning Post, April 24, 2024
60. Modernizing US Alliances and Partnerships in the Indo-Pacific
Walter Russell Mead, Hudson, April 22, 2024
61. UK Tory researcher charged with spying for China
Noah Keate, Politico, April 22, 2024
62. China’s military elevates information, space and cyber operations in biggest defence shakeup in 9 years
CNA, April 22, 2024
63. China Could Threaten Critical Infrastructure in a Conflict, N.S.A. Chief Says
Julian E. Barnes, New York Times, April 17, 2024
64. Water Facilities Warned to Improve Cybersecurity as Nation-State Hackers Pounce
Catherine Stupp, Wall Street Journal, April 19, 2024
65. Wall Street Steered Billions to Blacklisted Chinese Companies, House Probe Finds
Lingling Wei, Wall Street Journal, April 18, 2024
66. Germany Detains Lawmaker’s Assistant in Fourth Suspected China Spying Arrest This Week
Bertrand Benoit, Wall Street Journal, April 23, 2024
67. Germany Arrests 3 Suspected of Passing Secrets to China
Christopher F. Schuetze, New York Times, April 22, 2024
68. EU conducts ‘dawn raid’ on Chinese security equipment supplier
Henry Foy, Joe Leahy, and Andy Bounds, Financial Times, April 23, 2024
One Belt, One Road Strategy
69. China is extending its lead over the US in Africa’s energy transition
Martin K.N Siele, Semafor, April 23, 2024
70. Solomon Islands election yields no majority for pro-China party
Sophie Mak and Rurika Imahashi, Nikkei Asia, April 24, 2024
Opinion Pieces
71. The Strategic Unseriousness of Olaf Scholz
James Crabtree, Foreign Policy, April 22, 2024
The deep and enduring divisions between Europe and the United States over how best to handle China are on full display once again. U.S. Secretary State Antony Blinken is scheduled to land in China on April 24. Prior to touching down, he threatened tough measures unless Beijing stopped supporting Russia in its war against Ukraine through sending weapons-linked technologies to the Kremlin. German Chancellor Olaf Scholz, by contrast, just wrapped up a China trip that was far more conciliatory in both tone and substance—an approach that leaves Germany, and by extension Europe, at risk of looking alarmingly naive in the face of the economic and security challenges posed by China.
Blinken’s visit follows a period of improving U.S.-China ties. Presidents Joe Biden and Xi Jinping held a productive meeting in Woodside, California, in November 2023, with a follow-up phone call this month. U.S. Treasury Secretary Janet Yellen visited Beijing earlier in April as well. New cabinet-level communication channels have stabilized a relationship that only last year seemed in danger of spinning out of control. Yellen now deals with Chinese Vice Premier He Lifeng on economic issues, while U.S. National Security Advisor Jake Sullivan talks with Chinese Foreign Minister Wang Yi.
The White House views the latter channel as notably successful, in part because Wang now combines the twin roles of foreign-policy chief for both the government and the Chinese Communist Party. This allows a more streamlined communication compared to the time when these roles were split in two.
Yet despite this, the U.S. approach remains basically competitive. Just like Blinken brandishing warnings about Ukraine as he arrives this week, so too did Yellen pepper her trip with tough comments about what she described as China’s unfair manufacturing practices.
Scholz’s approach was markedly different—and not in a good way. This was obvious from the moment that details of his delegation emerged. There are senior figures in Germany with a hard-headed, strategic view of China, not least Vice Chancellor Robert Habeck and Foreign Minister Annalena Baerbock. But neither were in Beijing. Instead, Scholz took ministers in areas such as agriculture, who favor close cooperation with Beijing, along with a bevy of industrial CEOs promoting Sino-German trade and investment.
He also declined to make a big set-piece speech. Indeed, Scholz said remarkably little in public about issues that strike at critical European economic and security interests, from China’s support for Russia to the growing risks of industrial overcapacity. China’s media was understandably delighted. “I would describe the coverage as ebullient,” as Rhodium Group China advisor Noah Barkin wrote following the trip. “Clearly there is a sense that China dodged a bullet.”
Scholz’s approach is rooted in perceptions of German economic interests. These have worsened markedly over the last year. Speaking during the National People’s Congress in early March, Xi demanded that China unleash “new quality productive forces”—code for ploughing huge sums into advanced manufacturing, including electric vehicles (EVs) and batteries, to prop up China’s faltering economic model. Given limited domestic demand, the results will inevitably be exported, putting China on a collision course with advanced manufacturing economies in Europe and North America.
The European Union, which is investigating whether China’s subsidies give a competitive advantage to companies in industries including cars and solar panels, is already considering tariffs on Chinese EVs, as Scholz noted. Yet even in the exceedingly unlikely scenario of China reducing state support, its vast output and low costs make it extremely difficult for Europeans to compete. From EVs to energy transition technologies to simpler types of semiconductors, Europe now clearly risks a future dominated by Chinese-made industrial products.
72. The Delusion of Peak China
Evan S. Medeiros, Foreign Affairs, April 24, 2024
73. There’s No Easy Answer to Chinese EVs
Rogé Karma, Atlantic, April 18, 2024
74. Making Sense of China’s Magical 5.3% Growth
Shuli Ren, Bloomberg, April 17, 2024
75. The White House Has a New Trade Weapon Against China
Liam Denning, Bloomberg, April 18, 2024
76. Security for Chinese workers in Pakistan will always be elusive
Ayesha Siddiqa, Nikkei Asia, April 23, 2024
77. Is the U.S. Preparing to Ban Future LNG Sales to China?
Gabriel B. Collins and Steven R. Miles, Foreign Policy, April 23, 2024
78. China is moving towards full monetary independence
Russell Napier, Financial Times, April 17, 2024
79. The White House knows that the global south has a point
Rana Foroohar, Financial Times, April 22, 2024
80. China’s search for an answer to ChatGPT is just beginning
Financial Times, April 24, 2024