Strategic Indicator
This issue’s number to watch
22.7%
The amount by which China’s grain imports have risen year-on-year between January and July, as record flooding threatens China’s food production in the Yangtze Delta region and Chairman Xi Jinping implements a nationwide “operation clean plate” effort to prevent food waste.
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A new report by the Dutch consulting firm Ddatenna BV has found evidence that, since 2010, more than 250 Chinese investments in Europe had a moderate to high degree of involvement by state-owned or state-controlled companies, including some in advanced technologies sectors. In many of the deals looked at, Datenna found that Chinese state influence was hidden by complex layers of ownership, opaque shareholding structures, and deals executed by European subsidiaries. Lacking a regulatory body comparable to the United States’ CFIUS framework, the EU is vulnerable to Chinese acquisitions of companies which might pose national security risks in the long term. China’s state-backed enterprises are facing increased scrutiny today amid Beijing’s growing appetite for advanced Western technologies and global ambitions, but over the past decade China’s state involvement in small and large-scale acquisitions alike has been largely overlooked. In a report last year, the EU Chamber of Commerce warned that, “’the continued mixing of politics and business, with the [Communist Party] insinuating itself into the governance structures of private companies,’ is blurring the distinction between business and the state.” |
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A new report by the House Intelligence Committee has found that, “absent a significant realignment,” the U.S. national intelligence apparatus is improperly focused, postured, and resourced to understand the many threats that China currently poses to American interests. The report offers recommendations on how policymakers should respond. U.S. intelligence agencies were chiefly oriented towards the counterterrorism mission in the years since 9/11, inadvertently deprioritizing resources and expertise away from the China mission even as Beijing made itself into a global power. Committee Chairman Adam Schiff (D-CA) concludes, that as things currently stand, “the United States will be ill-prepared to compete with China on the global stage for decades to come.” |
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In related news, a new Wall Street Journal report tracks China’s successful lobbying efforts at the UN, noting that of the UN’s fifteen specialized agencies and groups, Chinese representatives currently head four. No other country has its citizens running more than one UN agency. As a result of a decades-long effort, Chinese representatives now helm UN institutions that set the global standards for air travel, telecommunications, agriculture, and more. Although Beijing’s overt pressure campaigns in the UN Human Rights Council to silence criticisms of its human rights abuses in Hong Kong and Xinjiang have been widely reported on, the story of its gradual success in other sectors of the global governance system should not be overlooked. As one consultant puts it, “China has been able to make the UN more Chinese…it’s systematic.” |
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Finally, Oxford University announced this week that it has moved to implement policies allowing students to submit work related to China anonymously, amid fears of extraterritorial overreach from the harsh new Hong Kong security law. Oxford’s decision follows similar moves made by U.S. colleges earlier this year to shield their students from China’s national security apparatus while still maintaining academic freedom. International students are a valuable source of income for UK schools, since they often pay two to three times as much tuition as UK residents, and the number of Chinese students in the UK higher education system is now above 120,000. U.S. schools similarly rely on international students—and especially Chinese students—to pad their bottom line, along with lucrative partnerships with Chinese universities and research institutions. As U.S.-Chinese tensions have grown tenser over accusations of academic spying and censorship, lawmakers in the United States have begun calling on schools to divest their interests in China and draw a line between profit motivations and academic freedom. |
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In the second episode of Stealth War Flyover, Jamestown President Glen Howard and former Senior Director for Strategy to the President Robert Spalding discuss President Trump’s recent executive order potentially banning TikTok and WeChat; what policy options Washington has on the situation in Hong Kong; and recent comments made by Keith Krach, the undersecretary of state for economic growth, energy and the environment, on U.S. universities’ index funds holding Chinese stock.
Stealth War Flyover is a periodic series featuring Brigadier General (ret.) Robert Spalding and Jamestown Foundation President Glen Howard discussing and dissecting the latest news in the ongoing competition between China and the United States. |
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