Britain has its cake and eats it; a Wolf-Warrior winner; Liechtenstein’s China tie-up

Gogi Kamushadze

Hello, and welcome to China Influence Monitor, a weekly newsletter published by CEPA and Coda Story and edited by me, Edward Lucas. We track [the westward footprint of] China’s influence operations, and their effects on politics, economies, societies and alliances across Central Asia, the Caucasus, Russia and Europe.

BRITAIN’S CHINA FUMBLE 

A big rethink of the UK’s world role aims to integrate military, diplomatic, financial, soft-power and other responses to Russia (the “acute” threat) and China (the “systemic” one). The problem: Britain still wants strong trade and investment ties with China: “cakeism” say critics. 

An obvious start for the new approach would be to use Britain’s clout in eastern Europe against China’s divide-and-rule tactics there. But when foreign secretary Dominic Raab met his Baltic counterparts, talks focused on Russia and climate change: understandable, but he missed an opportunity on China. Raab should have publicly praised Lithuania for snubbing last month’s 17+1 summit and stiffened resolve in Estonia and Latvia to shun the Chinese-run beauty contest too. He could have also urged all three to boost ties with Taiwan — another quick symbolic win. 

Britain’s fumble is particularly galling as the 17+1 is looking wobbly. The Greek government has declined an invitation to host next year’s summit, citing the cost and Beijing’s overbearing role in the supposedly multilateral forum. That’s a poor return on China’s wily endorsement of Greece’s campaign to regain the looted Elgin marbles from the British Museum. 

Meanwhile, the EU is lumbering towards a tougher China policy. It has imposed sanctions on four individuals for the crackdown in Hong Kong. But it’s still lagging the US, which sanctioned 24. 

Newly published details of the EU investment deal with China are also prompting increasing criticism. The agreement treats Chinese media investors like locals, whereas the Beijing authorities keep foreigners under firm control. 11 EU members — all in central and eastern Europe — reserved the right to treat Chinese investors differently, while France won’t let Chinese investors own more than a fifth of any French-language media company. 

Until the EU gets its vaccine policy sorted, though, China’s will make headway. Serbia unveiled plans to produce the Sinopharm jab jointly with the UAE. Another 100,000 doses are heading to Hungary

But the story’s not all bright and shiny. Hungary uses a mysterious intermediary called Danubia Pharma. This investigation (summary in English: Hungarian original here) ranges colorfully from Russian tax fraud to Iran-North Korean arms smuggling and a company registration in the South Pacific. It carefully avoids alleging wrongdoing, but asks if a company with a “less chaotic history” might have been found to procure the vaccines. 

Read more here on the backwash from Orbán’s opportunist pro-Beijing policy. Not least: Chinese espionage flourishes. 

WOLF-WARRIOR WATCH 

Contenders for this week’s prize for obnoxious diplomacy include:

The embassy in Stockholm for its bossily worded letters to Swedish newspaper editors, urging them to “shake off the shackle of dictatorship” in their reporting on China. The reason: a flip-flop at Sweden’s public broadcaster prompted by the Taiwan-based foreign correspondent Jojje Olsson. He shamed SVT into reinstating a report on the Beijing Olympics boycott campaign, which it had removed for stating that China was, er, a “dictatorship”. 

The ambassador in Paris Lu Shaye, who acerbically rebuked the French senator Alain Richard for an upcoming Taiwan trip. Oddly, the Global Times then claimed that the warning was misinterpreted —  it was merely a “courteous heads-up.” Define “courteous” please, comrades:  among other richly phrased epithets the paper lambasted the French politician for “self-contradictory swaying in political stances.”

The winner is Zhang Ming, ambassador to the European Union, who has blamed the EU’s hardening stance (see below) on lying “China-haters”. And Uyghur “deradicalization camps” are “not entirely different” from American, British and French efforts, he says. His case might be stronger were China not blocking EU diplomats from visiting the region.

A lot more subtle was a full page advertorial in Germany’s FAZ newspaper, giving (with authentic newsroom typography and layout) ten case studies from China’s anti-poverty drive, one of the party-state’s main propaganda themes. We checked: three of the listed authors appear to be Germany-based Xinhua staff or connected to the state news agency, though an ordinary reader wouldn’t know. We’ve asked FAZ what it cost (in money, not self-respect). No answer so far. 

Business news

  • Norway’s $1.3 trillion sovereign-wealth fund probes links to Uyghur slave labor, while Denmark’s university pension fund explains why it dumped €54m of assets in Chinese state-owned businesses. High-minded outside investors increasingly flinch about putting their money into China.
  • Liechtenstein’s valuable satellite frequencies are snapped up by an ambitious operator with Chinese links. Another sign of how China uses commercial and legal loopholes in its drive to become a dominant space power. 
  • Ukraine nationalizes Motor Sich to keep the aerospace champion out of Chinese hands. That will please the United States, which worries about the firm’s high-end technology heading east.

WHAT WE ARE READING: 

  • Greater Black Sea Region: A big Globsec report on the overlap between China, Turkey, Russia and the EU. Takeaway: as Euro-Atlantic influence ebbs, other tides rise. 
  • Info-ops: CEPA looks at the rise of China’s media empire and reports on Sino-Russian pandemic propaganda.
  • Rare earths: a primer on supply chain resilience in this vital mining/refining business.
  • Vaccine passports: Isobel Cockerell on how China’s plans boost the party-state’s surveillance machine. 

What we’re listening to: Podcasts on environment policy from Isabel Hilton, the doyenne of British China-watchers, and on climate change from Janka Oertel of ECFR.

What we’re watching: A thought-provoking CEIAS panel on academic freedom. And a CEPA discussion on the levers of China’s economic power. 

What we’re eating: Economic coercion is a mainstay of China’s influence arsenal: used 60 times since 2000, according to the Authoritarian Interference Tracker. The latest target is Taiwan’s pineapple industry. Support the #freedompineapples campaign! 

That’s it for this week. Thanks to Coda Story’s Isobel Cockerell, Oleksandr Ignatenko, Mariia Pankova, Katia Patin and Burhan Wazir; to CEPA’s Michael Newton, and to Didi Kirsten Tatlow.

We will be back in your inboxes next Thursday, 

Best regards
Edward 

The story you just read is a small piece of a complex and an ever-changing storyline that Coda covers relentlessly and with singular focus. But we can’t do it without your help. Show your support for journalism that stays on the story by becoming a member today. Coda Story is a 501(c)3 U.S. non-profit. Your contribution to Coda Story is tax deductible.

Support Coda

Edward Lucas

Edward Lucas is a Nonresident Senior Fellow at the Center for European Policy Analysis (CEPA). He was formerly a senior editor at The Economist. Lucas has covered Central and Eastern European affairs since 1986, writing, broadcasting, and speaking on the politics, economics, and security of the region.

A graduate of the London School of Economics and long-serving foreign correspondent in Berlin, Vienna, Moscow, and the Baltic states, he is an internationally recognized expert on espionage, subversion, the use and abuse of history, energy security and information warfare.

He is the author of four books: The New Cold War (2008, newly revised and republished); Deception (2011); The Snowden Operation (2014), and Cyberphobia (2015).

@edwardlucas