CHINAMacroReporter

1 | The first U.S.-EU alliance against China

Building U.S. - EU Coalitions to Counter China: Why China Is Joe Biden's Biggest Asset

"Europeans will have to step up their reaction against China after insults, intimidation and sanctions against scholars and MPs. This isn't about siding with America, it's about defending European sovereignty against a bully."
by

|

CHINADebate

March 25, 2021
1 | The first U.S.-EU alliance against China
"Europeans will have to step up their reaction against China after insults, intimidation and sanctions against scholars and MPs. This isn't about siding with America, it's about defending European sovereignty against a bully."

'By the time Antony Blinken's plane touched down in Brussels on Monday night,' writes Stephan Lau of Politico EU, 'America's top diplomat had already acquired an unlikely ally in his push for a deeper transatlantic partnership: China.'

  • 'When Blinken meets European Commission President Ursula von der Leyen and EU foreign policy chief Josep Borrell on Wednesday, however, he will find the mood has shifted and that he has an unexpectedly ripe opportunity to press Europe to reconsider its choice and join the Americans.'
  • Here's why.  

As has been often noted, the chief thing that distinguishes President Biden’s China strategy from the previous administration’s is the aim to create coalitions to confront China on specific issues.

  • The problem with that is that a lot of other countries, especially in the EU, don’t seem ready to get on board.

Thank goodness for Mr. Biden that China is lending a helping hand.

  • The most recent example was on display this week.

‘This week Joe Biden made good on his campaign promise to work more with allies to pressure China, coordinating with U.S. partners to impose sanctions over alleged human-rights abuses in Xinjiang,’ says Bloomberg.

  • ‘Beijing’s response: Hit back at the allies as hard as possible.’

As the Editorial Board of the Financial Times notes:

  • ‘Co-ordinated western sanctions imposed this week on a small number of Chinese officials for their role in human rights abuses in Xinjiang are welcome if overdue.’
  • ‘On Monday the US, EU, UK and Canada together imposed asset freezes and travel bans on four officials and a security organisation implicated in the persecution and internment of Uyghurs.’

‘The retribution is modest given the crimes.'

  • 'But for the first time since the Tiananmen Square protests were crushed in 1989, western governments have taken co-ordinated action to punish human rights abuses in China.’

Given that China is keen to do its best to prevent the U.S. from bringing the EU into further coalitions – ‘Beijing has in recent years used a divide-and-conquer approach with national capitals to undermine a common EU front’ - you would think that China would have made a measured response. Nope.

  • ‘China retaliated against EU sanctions by punishing several parliamentarians, analysts, and Merics, a think-tank on China based in Berlin known for its judicious analysis.’
  • ‘It also targeted the committee of 27 member-state ambassadors to the EU who oversee foreign and security policy.’

‘With its Xinjiang abuses and overreaction on sanctions, Beijing has managed the rare feat of uniting the EU on a foreign policy issue.’

  • ‘By targeting critics of its actions and analysts who refuse to toe its line, Beijing has demonstrated its totalitarian mindset.’
  • ‘By punishing European Parliament members, it has made it all but impossible for that legislature to ratify the “Comprehensive Agreement on Investment” with China.’

This last point in particular is what makes China’s strong reaction to the EU’s relatively innocuous sanctions hard to understand.

  • Some have said that China didn’t have that much to gain, so perhaps Beijing doesn’t care if the  “Comprehensive Agreement on Investment” isn’t ratified. ·
  • Or, as others have suggested, one of China’s purposes in the deal was to drive a wedge between the U.S. and the EU. In that case, the work is already done. ·
  • Whatever the reason, China made it clear that asserting what it considers its rights is more important than this agreement.
  • [Pro Tip: If your corporate or investment strategy in any way depends on the EU’s ratifying “Comprehensive Agreement on Investment” with China, it’s time to start revising your strategy.]  

More

CHINAMacroReporter

January 31, 2021
China Tests Biden
In today’s issue: 1. China Tests Biden Over Taiwan / 2. The UK Stands Up, the U.S. Not So Much / 3. Why Impeding U.S.-China Capital Flows Isn't Easy
keep reading
January 27, 2021
Xi Jinping: 'Why We All Just Get Along?'
In today’s issue:1. Biden Shows his Hand on China / 2. Xi Shows his Hand on the U.S./ 3. Multi-Lateralism, Chinese-Style / 4. Cooperation or 'Strategic Competition'?
keep reading
January 27, 2021
'Xi Jinping Wows Them at Davos'
‘The test for the Biden team is whether it will be tripped up by the feints toward international norms and comity that punctuate Mr. Xi’s pattern of regional aggression.’
keep reading
December 30, 2021
Q&A 4 | Is China Exporting Inflation?
'‘China has its own issues. If you look at the CPI inflation, it looks more moderate. ‘If you look at the producer price inflation, it looks more severe.’
keep reading
December 30, 2021
Q&A 2 | Will the Gender Imbalance Keep Housing Prices Firm in the Medium Term?
‘The part of housing prices caused by gender-ratio imbalance is not going to go away in the medium term. But the government has ways to create volatility in the housing market.’
keep reading
December 30, 2021
Q&A 3 | Property 2022: Stabilization or Growth?
‘The goal is to stabilize housing prices while having housing sector grow.’
keep reading
December 30, 2021
Shang-jin Wei Presentation-3 | Analyzing the Gender Imbalance Data
‘Compare these with graph showing the impact of the same factors on rental prices...'
keep reading
December 30, 2021
Shang-jin Wei Presentation-2 | Gender Imbalance as a Driver of Housing Prices
‘Why does gender imbalance have such an outsize impact on China’s housing prices?'
keep reading
December 30, 2021
Q&A 5 | Will Xi Continue to Favor the State Over the Private Sector?
‘He wants to see a bigger role for the state in the economy. But in the last two years, he has done some course correction. For example, after talking up the role of state-owned firms and building stronger, bigger state-owned firms, he is talking about the equal importance for the private sector.’
keep reading
December 30, 2021
Q&A 7 | Why Did Beijing Ban Online Tutoring?
‘Each policy in isolation – whether its banning online tutoring or protecting data or enforcing anti-monopoly regulations or any other - has its rationale.’
keep reading
December 30, 2021
What Are Your Top of Mind Concerns?
I asked the participants what are their top of mind concerns about China.
keep reading
December 7, 2021
Getting (Xi Jingping's) Priorities Straight
How do you make investment or business decisions in the face of the uncertainties created by Xi Jinping's reshaping China's economy? In this issue, I'll give you a few different ideas on how you might deal with that uncertainty.
keep reading
December 7, 2021
Look Through the Rights Lenses
Getting down more to the nitty-gritty, if you’re evaluating a sector or a company, get your lenses right to get the details right.. Stonehorn’s Sam Le Cornu gives a good example of this in a Bloomberg interview.
keep reading
December 7, 2021
Sometimes You Just Have to Roll the Dice
Telling someone to align him or herself with Beijing's priorities still is generally good advice.And, when I tell you what those priorities are, I know I am right - until I'm not.
keep reading
December 7, 2021
Watch What Beijing Says - and Does
Besides listening to Xi Jinping, you can discern Beijing’s priorities and its likely actions through its big policies - and this is my point here.
keep reading
November 23, 2021
'Biden Has a Summit With Xi, but No Strategy for China'
‘Neither Taiwan nor strategic arms are a hot campaign topic, and China is not yet at the forefront of public consciousness. To ensure America’s eventual strategy is workable, political leaders need to debate the challenges so citizens can appreciate the implications of the choices they will have to make.’
keep reading
November 23, 2021
Xi Jinping's Leadership: 'The Inevitable Outcome of History'
Mr. Xi is the hero of a Resolution on the history of the Chinese Communist Party that painted his leadership as the inevitable outcome of history and all but gave him his third term. Tony Saich of the Harvard Kennedy School did a terrific analysis on this - you'll find it below, after my take.
keep reading
November 23, 2021
'Xi Jinping has made sure history is now officially on his side'
‘While there are murmurs of opposition, the historic plenary session would suggest that the future is in Xi’s hands. However, when politics is so deeply personalised and centralised, there is only one person to blame if things go wrong. Unless, of course, we get a new resolution on history that tells us who led the party astray, despite Xi’s earnest attempts to keep policy on the straight and narrow.’
keep reading
November 9, 2021
'America's China Plan: A Proposal' by Clyde Prestowitz
Outcompeting China and avoiding global extension of its authoritarian and coercive policies and practices is not really about China. It’s about America.
keep reading
October 27, 2021
Why China Won't Invade Taiwan - Yet
Forget Evergrande and the energy crunch. After the recent flurry of alarming headlines, here’s the question I get most often these days from CEO’s and institutional investors: Will China invade Taiwan in the next few years?
keep reading
October 17, 2021
An Energy Crunch. China's Latest Crisis. They Just Keep Piling Up.
‍‘Over the next six months or more, the energy crunch in China will be an even bigger challenge than Evergrande. Will make the Evergrande problem look tiny and has huge global implications. The lights go out in China!’ one experienced and very well-respected reader of long residence in China wrote to me in response the last issue on Evergrande.
keep reading
October 7, 2021
Just How Contagious is Evergrande?
Just as a personal crisis can lead you to dig deeper into yourself, so the rapid-fire events in China - with trillions of dollars of business and investment on the line - have led us to (finally) go deeper into how China works – and to come to grips with uncertainties caused by Xi Jinping’s recent moves to reshape the Chinese economy and the Party’s social contract with the Chinese people.
keep reading
September 27, 2021
'This Time Feels Different'
Just when we thought we were getting used to Xi Jinping’s tech reforms and social-engineering regulations, the Evergrande crisis heats up.
keep reading
September 19, 2021
AUKUS: A New World Order?
‍In case you passed over the news of AUKUS, the new strategic alliance among the U.S, the U.K., and Australia, here a few headlines to encourage a deeper look.
keep reading
September 7, 2021
Xi Jinping: Today, video games. Tomorrow, well ... just be good.
Today's issue is a heads up on what may be Xi Jinping's efforts to reshape Chinese society.
keep reading
August 28, 2021
The Taliban: 'China's Perfect Partner'?
Breaking through the blow-by-blow reporting that started when the Taliban began its sweep to victory are the geopolitical analyses of who gains and who loses in Afghanistan.
keep reading
August 15, 2021
'Xi’s Dictatorship Threatens the Chinese State'
‘Mr. Xi is determined to bring the creators of wealth under the control of the one-party state.’
keep reading
August 15, 2021
'Are you tired of losing yet, America?'
As I write this, Taliban forces have entered Kabul and are reportedly occupying the Presidential Palace.
keep reading
August 15, 2021
China Economy: Industrial Production Down, Demand Resilient
China’s industrial production down 10%. Demand resilient.
keep reading
August 15, 2021
'China Signals More Regulation for Businesses in Coming Years'
‘The State Council’s statement provides a guiding context to interpret current regulatory thrusts. The blueprint as an attempt by Chinese authorities to help investors understand the motives behind the regulatory push.’
keep reading
August 5, 2021
‘Global investors shocked to have discovered that China is run by Communists.’
‘Global investors are shocked to have discovered that China is run by Communists.’
keep reading
August 5, 2021
'Shocked Investors Scour Xi’s Old Speeches to Find Next Target'
‘While China’s policy moves can feel ad hoc particularly to foreign investors, the changes are quite targeted on certain sectors.’
keep reading
August 5, 2021
Don't Say Xi Jinping Didn't Warn You
‘Global investors are shocked to have discovered that China is run by Communists.’
keep reading
August 5, 2021
'China Wants Manufacturing—Not the Internet—to Lead the Economy'
‘Social media, e-commerce and other consumer internet companies are nice to have. But in his view national greatness doesn’t depend on having the world’s finest group chats or ride-sharing.’
keep reading
August 1, 2021
'Stock Market: China Doesn’t Care How Much Money Investors Lose'
‘Does Beijing not care how much money foreign investors have lost? Does the government really want to close China Inc.’s access to the deep pool of global capital? The short answer is, no, the government doesn’t care.
keep reading
August 1, 2021
'Xi's Four Pillars of Regulation'
‘Broadly, Beijing is concerned about four pillars of stability: banking, anti-trust regulation, data security and social equality. All of Beijing’s major interventions reflect these concerns.’
keep reading
August 1, 2021
China's Tech Crackdown: 'Nobody Saw It Coming.' — Huh?
‘Carnage in China's financial markets signals the beginning of a new era as the government puts socialism before shareholders, and regulatory changes rip apart the old playbook,’ writes Reuters’ Tom Westbrook.
keep reading

Heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.