May 21, 2021 – Stealth War Newsletter 38: Israel-Palestine; Huawei’s Cloud Business; the USS Curtis Wilbur

By: Jamestown Foundation

Fri May, 2021, Age: 2 years



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May 21, 2021

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Strategic Indicator
This issue’s number to watch

29 percent

The amount by which steel prices have risen since the beginning of the year in China, after global iron ore prices hit a record high of $200 per ton last week.

Top Stories

Following the sudden outbreak of hostilities in Gaza last week, China moved quickly to position itself as a mediator and accuse the U.S. of blocking a United Nations Security Council call to ease tensions in Gaza, with Chinese Foreign Minister Wang Yi telling his Pakistani counterpart on Saturday that “the U.S. has taken a position that stands on the opposite side of international justice.” During an emergency virtual meeting on the issue, Wang spoke of China’s “firm support” for a two-state solution and reiterated China’s “Four Point Proposal” on the settlement of the Palestinian question, calling for the cessation of violence, humanitarian assistance, and international support for Palestine. But one observer noted that Wang’s comments offer nothing new and that China’s rhetorical support for Palestine demonstrates “an essentially conservative disposition” towards supporting the Arab cause.

Additionally, China’s strong economic and security ties with Israel make it unlikely that Palestinians will see China as a supporter in the conflict. The Israeli embassy in Beijing also complained that China’s international state broadcaster CGTN had engaged in “blatant anti-Semitism” to score points against the U.S. China has made the most of the conflict to bolster its international reputation, offering to host Israeli-Palestinian peace talks and promising to send emergency aid and Covid-19 vaccines worth $1 million. The foreign ministry spokesperson Zhao Lijian also highlighted China’s contributions after a truce was brokered and implemented on Friday morning.

It is likely that China will continue to use its position as rotating head of the UN Security Council to spotlight the U.S.’s failings in the Middle East, even as it is still determining its own role to play in the region. In Afghanistan, China has exhibited a contradictory attitude towards the U.S. troop withdrawal, issuing harsh criticisms about Washington’s “irresponsible” behavior even as it also attributes the current “distortion” of Afghan politics to America’s long presence in the region. Another analysis concludes that although Beijing has been able to score geopolitical points by criticizing Washington’s Middle East policies, it still lacks the clout (and perhaps also the desire) to fill a larger mediation role in the region.

The Center for Strategic and International Studies (CSIS) issued a report on Monday detailing Huawei’s international cloud business expansion even as the company faces growing restrictions on involvement in national 5G networks due to national security concerns. The project examined 70 deals in 41 countries for cloud and e-infrastructure services. Most deals are in low- or middle-income countries, predominantly across Africa, Asia and Latin America, and cover services including document digitization, nationwide identification services and elections. CSIS noted that a significant portion of deals have faced technical, financial or security difficulties already, but Huawei’s cloud services have continued to grow in popularity due to their competitive prices. The Chinese government has poured $1.4 trillion into the development of cloud services domestically in its “new infrastructure” plan, and protectionist policies have allowed domestic firms to flourish while blocking foreign competitors such as Amazon and Google. China’s cloud policies have previously received pushback from the United States. In August 2020, then-Secretary of State Mike Pompeo threatened to crack down on Chinese cloud computing firms operating in the United States over concerns of user data privacy and national security. Despite these concerns, the CSIS report finds that China’s cloud computing services seem positioned to grow worldwide.

As China has continued to wage an antitrust campaign against its big technology companies, centralizing control over the economy, state regulators have issued massive fines against those deemed to be bad actors. These are beginning to have an impact on industry. Last week, the e-commerce giant Alibaba announced its first quarterly earnings loss since going public in 2014, and the share prices of Pinduoduo and Meituan have also seen significant drops in recent weeks as the companies come under investigation. Antitrust scrutiny caused a $200 billion valuation loss for Tencent this week, another technology giant which has also come under attention for its links to the son of China’s most influential financial policymaker. Company CEOs have also begun to shun the spotlight as they seek to avoid regulators’ attention. This week, Bytedance CEO Zhang Yiming announced that he will relinquish his day-to-day duties as head of the company, remaining as company chairman as ByteDance prepares for an initial public offering in either the U.S. or Hong Kong. Zhang’s announcement follows Pinduoduo founder Colin Huang’s similar decision two months ago to step down from the CEO position as well.

China has begun to administer a newly approved single-dose COVID-19 vaccine, Convidecia, in five major cities including Shanghai. The Chinese military and biotech firm CanSino Biologics Inc. developed the new adenovirus vector vaccine. The new vaccine comes as China seeks to accelerate its mass vaccination campaign after local outbreaks were reported in Yunnan, Anhui and Liaoning provinces. Despite government efforts, including cash incentives and free eggs, China is projected to miss its target of vaccinating 40 percent of the public by June.

Outside of China, Beijing’s export of vaccines and pandemic aid has resulted in growing influence and scrutiny around the world. As South Asia experiences a devastating surge in COVID-19 cases, China has sent 1.1 million Sinopharm vaccine doses to Sri Lanka, a key partner in its Belt and Road ambitions. China also sent 6 million vaccine doses to Thailand, which pledged to prioritize the inoculation of Chinese citizens in the country. But the Sinopharm vaccine has garnered concerns over its efficacy. The United Arab Emirates (UAE) recently announced that it would offer a third Sinopharm shot to individuals who already received the two-round vaccine. While the UAE also has approved Pfizer and AstroZeneca’s vaccines, its vaccination campaign primarily relies on Sinopharm, which is produced locally. The Prime Minister of Northern Macedonia, Zoran Zaev, warned the European Union that it was losing influence in the Balkan region to Russia and China amid the COVID-19 crisis, as both countries have stepped up their offers of aid in the EU’s notable absence.

In the Indo-Pacific, the United States and its allies have taken a stronger stance to counter China. On Wednesday, the USS Curtis Wilbur, a missile destroyer from the U.S. Navy’s 7th Fleet, sailed through the Taiwan Strait in a “routine transit.” China’s Eastern Theatre Command condemned the move as “endangering peace and stability across the Taiwan Strait,” while Taiwan’s Defense Ministry said the “situation was as normal.”

A joint investigation by Benar News and Radio Free Asia has uncovered evidence that China’s maritime militias, which have been active in asserting its maritime and territorial claims in the South China Sea, have links to national security projects under the administration of Sansha City, Hainan Province. Earlier reports have detailed how the maritime militia is involved in “salami slicing” and “cabbage tactics,” grayzone warfare techniques short of actual war that are intended to shore up China’s ahistoric claims to the region, and which recently sparked a diplomatic flare-up with the Philippines.

In an interview with Nikkei Asia, Japanese Defense Minister Nobuo Kishi expressed his interest in a meeting withQuad defense ministers (from Australia, India, Japan and the United States) to bolster their security alliance. Kishi also announced that Japan plans to lift its Cold War-era one percent of GDP limit on military spending as the country seeks to ramp up its effort to counter China’s increasing assertiveness in the Indo-Pacific. In response, China warned Japan against stoking tensions in the region, especially over Taiwan.

Cooperation with the Quad is likely to be on the agenda as well at South Korean President Moon Jae-in’s upcoming visit to the United States. Seoul is not a member of the security bloc currently, and it is unclear whether it will be invited to join. Currently, South Korea has carefully balanced its relations with the United States and China.

Finally, in Brussels, the European Parliament has voted to freeze consideration of its investment deal with China after tit-for-tat economic sanctions earlier this year over China’s treatment of Uyghurs hurt once-rosy prospects for mutual trade and investment. Foreign Ministry spokesperson Zhao Lijian promptly defended China’s sanctions against the European Union and demanded that it “immediately stop interfering in China’s internal affairs.”

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