March 26, 2021 – Stealth War Newsletter 30

By: Jamestown Foundation

Fri March, 2021, Age: 2 years



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March 26, 2021

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Strategic Indicator
This issue’s number to watch

$60 billion

Approximate market loss of four major Chinese technology companies after the United States Securities and Exchange Commission unveiled a new law seeking to delist Chinese technology firms from U.S. stock exchanges.

Top Stories

In a coordinated campaign, the United States, United Kingdom, European Union and Canada announced a slate of sanctions against China over its human rights crackdown against its Uyghur population. On Monday the EU announced its first sanctions against China since the 1989 Tiananmen Square Massacre, narrowly targeting four Chinese officials as well as the Xinjiang Production and Construction Corps Public Security Bureau. U.S. Secretary of State Antony Blinken later announced that the White House would sanction two additional Chinese officials, while Britain and Canada implemented travel restrictions and asset freezes to the same targets as the EU. New Zealand and Australia released statements welcoming the sanctions.

Beijing retaliated against the EU by leveling its own sanctions against a range of individuals and organizations, including scholars Adrian Zenz and Bjoren Jerden, several members of the European Parliament and the Mercator Institute for China Studies. China also listed nine British Members of Parliament on its sanctions list. All targeted individuals will be barred from traveling to China, including Hong Kong and Macau, and unable to conduct business with Chinese citizens and institutions. Nick Turner from the law firm Steptoe & Johnson noted that China’s sanctions are more detailed than previous ones. Several EU member states have summoned their Chinese envoys to express their disapproval over China’s retaliatory sanctions.

Straining relations between Europe and China may also jeopardize the ratification of the Comprehensive Agreement on Investment, announced at the end of last year. China has continued to deny any wrongdoing in Xinjiang, calling the allegations “lies and disinformation.” In another sign of the EU’s rapid disenchantment with China, the NATO Secretary-General Jens Stoltenberg called China’s tit-for-tat sanctions “bullying” and signalled his intention to pursue closer cooperation with NATO and non-NATO allies alike in the face of growing global challenges from Russia and China.

As global criticism of China’s activities in Xinjiang has coalesced, Western companies have felt obligated to weigh in. Multinational clothing retailers such as Nike, Adidas, H&M, Tommy Hilfiger, Zara and Burberry have been targeted by Chinese consumers after the companies pledged to eliminate Xinjiang cotton from their supply chains following allegations of forced labor in cotton supply chains. On social media, Chinese nationalists called for a boycott of Western clothing brands in favor of domestic sellers. Companies’ online shops have been blocked, although physical stores remain open. Chinese celebrities have also joined in on the effort, with over 30 stars cutting partnerships with firms including Adidas, Nike and H&M. China’s Ministry of Commerce issued a statement hoping that the companies would “correct their wrongdoings” and return their investments in Xinjiang.

Chinese and Russian officials met this Tuesday in the southern Chinese city of Guilin, where they affirmed their ties and rebuked outside criticism of their authoritarian political structures. Foreign Minister Wang Yi and his Russian counterpart Sergei Lavrov issued a joint statement after the meetings, stating that, “Interference in a sovereign nation’s internal affairs under the excuse of ‘advancing democracy’ is unacceptable.” China, as noted above, has been sanctioned by European Union countries for human rights abuses in its western province of Xinjiang, which include allegations of forced labor and coercive birth control. Russia has been sanctioned by Western countries for the attempted assassination of dissident Alexei Navalny and interference in the 2020 U.S. elections.

The meetings between Chinese and Russian officials are another signal of the growing alignment between the two countries. According to a recent Chicago Council poll, 74 percent of Russians express a favorable view of China. Reflecting this, Lavrov noted on Tuesday that the EU has shut the door on cooperation with Russia, but noting that “…in the East there is an intensive agenda which grows richer every year.”

Growing ties between Moscow and Beijing is centered on opposition to the current rules-based international order. Wang and Lavrov’s meeting pushed an alternative version of human rights and democracy, according to the Global Times, which is regarded as reflecting Beijing’s views. Both leaders accused Western countries of interference in their sovereign affairs and national development

This week saw numerous developments in the ongoing controversy involving China’s illegal fishing industry. Fleets of hundreds of private Chinese vessels have regularly illegally operated in the territorial waters of Southeast Asia, Pacific islands and South America. Beijing views the vessels as a geopolitical priority, allowing China to extend its state power beyond its territory.

On Tuesday, Axios reported that a U.S. intelligence agency had recommended that the United States organize and lead a coalition of South American countries to combat and push back on illegal Chinese fishing vessels. Last year, Chile, Colombia, Ecuador and Peru announced that they would “prevent, discourage [and] confront” these illegal practices in their waters. South American nations have previously stated that illegal fishing stress their fisheries and cause intense environmental damage, but that they lack the resources and ability to and monitor and combat the problem. The report from the U.S. intelligence agencies states that the United States could play a prominent role in organizing and providing training and equipment to help solve the issue, furthering ties in the region at the same time.

China’s fishing vessels, organized into “maritime militias,” have also recently caused controversy in the Philippines. Approximately 220 vessels have been docked near Whitsun Reef, claimed by the Philippines, since at least March 7. On March 21, Filipino Defense Secretary Delfin Lorenzana demanded that they leave. China denied that they were part of their maritime militia forces and stated the ships were sheltering from “unobservable” inclement weather. China claims these islands as its territory. The U.S. embassy in Manila expressed its concerns at the Chinese vessels docking near Whitsun Reef and stated that it stands with the Philippines.

Following persistent pressure by the U.S., most of Europe has now either outright blocked or at a minimum increased scrutiny over Huawei’s participation in international 5G infrastructure networks over national security concerns. Efforts to impede Huawei’s expansion in 5G networks elsewhere—such as in Latin America or Africa—have been somewhat successful. But a new report from the Center for European Policy Analysis (CEPA), which closely follows Chinese influence operations in Europe, notes that even as European regulators have taken a closer look at Huawei’s 5G business, the company has simultaneously pursued academic partnerships and deals in AI research and smart city development that “are a backdoor for China to access European data, and influence the industries of the future without the need for Huawei 5G infrastructure.” Axios reported last week that China is set to “deploy the Huawei playbook” of heavily subsiding state-backed companies to undercut global competition and gain market share as it seeks to enter the emerging satellite internet market. This would extend its existing telecommunications infrastructure, exacerbating what some have termed a “splinter-net” effect on global networks. The China expert Bethany Allen-Ebrahimian has noted that China could potentially use such a satellite network for mass data collection and surveillance of internet traffic. Both reports conclude that the U.S. and its allies will need closer cooperation and more comprehensive policies to counter these emerging threats.

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