Tag: China

China positions itself as global powerbroker

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New Delhi: On the diplomatic front, China has wasted no time since emerging from Covid isolation.
In the last few months, President Xi Jinping has met Russia’s Vladimir Putin; hosted several world leaders, including Brazil President Luiz Inacio Lula da Silva who arrived this week; sent a top envoy to court Europe; and presented a 12-point solution to the Ukraine war, BBC reported.
Beijing also brokered a detente between Saudi Arabia and Iran in what is one of China’s biggest diplomatic coups; that it pulled this off in the Middle East, where US intervention has been mired in difficulties and failure, is especially significant, BBC reported.

At the same time, Beijing has unveiled various proposals for global security and development – a clear sign it is wooing the “global south” as it did with the earlier Belt and Road initiative where it poured billions into other countries.
This diplomatic push positioning China as a key global powerbroker can trace its roots to the “rejuvenation of the Chinese nation”, a long-held nationalist concept that sees the Middle Kingdom reclaiming its central position in the world, BBC reported.
But it is not just about spreading the gospel of the Chinese way – much of it is also aimed at securing global economic ties.
“Xi knows that you can’t rejuvenate a Chinese nation without a good economy,” said Neil Thomas, a fellow in Chinese politics at the Asia Society Policy Institute, BBC reported.
China has the capability to directly attempt to alter the rules-based global order in every realm and across multiple regions, as a near-peer competitor that is increasingly pushing to change global norms and potentially threatening its neighbours, as per the 2023 Annual Threat Assessment Report of the US intelligence community.

The report said Chinese Communist Party (CCP) will continue with its efforts to achieve President Xi Jinping’s vision of making China the pre-eminent power in East Asia and a major power on the world stage.
The CCP will work to press Taiwan on unification, undercut US influence, drive wedges between Washington and its partners, and foster some norms that favour its authoritarian system.
Beijing sees increasingly competitive US-China relations as part of an epochal geopolitical shift and views Washington’s diplomatic, economic, military, and technological measures against Beijing as part of a broader US effort to prevent China’s rise and undermine CCP’s rule, the report said.
Beijing is increasingly combining growing military power with its economic, technological, and diplomatic influence to strengthen CCP’s rule, secure what it views as its sovereign territory and regional pre-eminence, and pursue global influence. The Chinese government is capable of leveraging its dominant positions in key global supply chains in an attempt to accomplish its goals, although probably not without significant cost to itself.
China uses coordinated, whole-of-government tools to demonstrate strength and compel neighbours to acquiesce to its preferences, including its land, sea, and air claims in the region and its assertions of sovereignty over Taiwan.
In the South China Sea, Beijing will continue to use growing numbers of air, naval, coast guard, and militia forces to intimidate rival claimants and to attempt to signal that China has effective control over the contested areas. Similarly, China is pressuring Japan over contested areas in the East China Sea, the report said.
European leaders have been making a beeline to Beijing, weighing their strategy toward China just as the US intensifies pressure to pick sides in the growing acrimony between the two superpowers, The New York Times reported.
The flurry of diplomatic activity coincides with China’s announcement of “unlimited partnership” with Russia and Beijing’s awkward effort to mediate the war in Ukraine. China’s growing closeness to Moscow has placed Europe in a difficult spot.
China would like nothing more than to divide Europe from the US, and is eager to stress that a better footing would not only be good for business, but also benefit Europe’s quest for “strategic autonomy” – maintaining its independence of action, even from the US, The New York Times reported.
French President Emmanuel Macron has flown into a storm of criticism after he said Europe should not become a “vassal” and must avoid being drawn into any conflict between the US and China over Taiwan, The Guardian reported.
The French President made the remarks in an interview on his plane after a three-day state visit to China, where he was accorded a red carpet welcome by Xi Jinping – a show of pageantry that alarmed some European China watchers.
Mujtaba Rahman, the head of Europe at the research firm Eurasia Group, said the timing of Macron’s latest comments was poor.
“To make these remarks as Chinese military exercises encircled Taiwan – and just after his state visit to China – was a mistake. It will be interpreted as appeasement of Beijing and a green light to Chinese aggression,” Rahman said, The Guardian reported.
Russia risks becoming an “economic colony” of China as its isolation from the West deepens after the invasion of Ukraine, CIA Director William Burns said, The Guardian reported.
“Russia is becoming more and more dependent on China and, in some respects, runs the risk of becoming an economic colony of China over time, dependent for export of energy resources and raw materials,” Burns said at an event at Rice University in Houston.
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( With inputs from www.siasat.com )

April 16, 2023
China backs Macron’s remarks against following US policy on Taiwan

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Beijing: China on Wednesday waded into controversy over French President Emmanuel Macron’s comments in which he called for greater “European sovereignty” by not following the US policy over China and Taiwan.
“The question we need to answer, as Europeans, is the following: Is it in our interest to accelerate (a crisis) on Taiwan? No,” Macron was quoted as saying in the interview after his recent visit to China during which he held extensive talks with Chinese President Xi Jinping in Beijing and later Guangzhou.
“The worst thing would be to think that we Europeans must become followers on this topic and take our cue from the US agenda and a Chinese overreaction,” Macron said.

The comments were made last Friday before China launched large-scale combat drills around Taiwan that simulated sealing off the island in response to the Taiwanese president’s trip to the US last week.
Macron’s comments raised questions over the EU’s relationship with both the US and China.
“We have noticed that President Macron’s view that Europe should insist on strategic autonomy and avoid getting involved in group confrontations has attracted some criticism, especially from the United States. We are not surprised by this,” Chinese Foreign Ministry spokesman Wang Wenbin told the media here while responding to the controversy over the French President’s comments.
“What we want to tell you is that some countries do not want to see other countries become independent, and always want to coerce other countries to obey their will,” he said.
“But adhering to strategic autonomy will win more respect and more friends, while coercion and pressure will only result in more resistance and opposition,” Wang said.

He said Macron paid a successful visit to China and the two sides reached important consensus, injecting new impetus into deepening China-France and China-EU cooperation.
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( With inputs from www.siasat.com )

April 12, 2023
UK’s Truss warns of Western ‘weakness’ over China in wake of Macron visit

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LONDON — Former U.K. Prime Minister Liz Truss will take a not-so-subtle swipe at Emmanuel Macron over his attempt to build bridges with Beijing.
In a Wednesday morning speech to the Heritage Foundation think tank in Washington, D.C. Truss will argue that too many in the West have “appeased and accommodated” authoritarian regimes in China and Russia.
And she will say it is a “sign of weakness” for Western leaders to visit China and ask premier Xi Jinping for his support in the wake of Russia’s invasion of Ukraine — just days after Macron’s own high-profile trip there.
While Truss — who left office after just six weeks as crisis-hit U.K. prime minister — will not mention Macron by name, her comments follow an interview with POLITICO in which the French president said Europe should resist pressure to become “America’s followers.”
Macron said: “The question Europeans need to answer … is it in our interest to accelerate [a crisis] on Taiwan? No. The worse thing would be to think that we Europeans must become followers on this topic and take our cue from the U.S. agenda and a Chinese overreaction.”
Macron has already been criticized for those comments by the IPAC group of China-skeptic lawmakers, which said Monday his remarks were “ill-judged.”
And Truss — who had a frosty relationship with Macron during her brief stint in office last year — will use her speech to urge a more aggressive stance toward both China and Russia.
“We’ve seen Vladimir Putin launching an unprovoked attack on a free and democratic neighbor, we see the Chinese building up their armaments and their arsenal and menacing the free and democratic Taiwan,” Truss will say according to pre-released remarks. “Too many in the West have appeased and accommodated these regimes.”

She will add: “Western leaders visiting President Xi to ask for his support in ending the war is a mistake — and it is a sign of weakness. Instead our energies should go into taking more measures to support Taiwan. We need to make sure Taiwan is able to defend itself.”
Relations between Macron and Truss’ successor Rishi Sunak have been notably warmer. The pair hailed a “new chapter” in U.K.-France ties in March, after concluding a deal on cross-Channel migration.

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( With inputs from : www.politico.eu )

April 11, 2023
Europe’s eastern half claps back at Macron: We need the US

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Stop driving Europe away from the United States, dismayed central and eastern European officials fumed on Tuesday as French President Emmanuel Macron’s comments continued to ripple across the Continent.
Macron jolted allies in the EU’s eastern half after a visit to China last week when he cautioned the Continent against getting pulled into a U.S.-China dispute over Taiwan, the self-ruled island Beijing claims as its own, imploring his neighbors to avoid becoming Washington and Beijing’s “vassals.”
The comments rattled those near the EU’s eastern edge, who have historically favored closer ties with the Americans — especially on defense — and pushed for a hasher approach to Beijing.

“Instead of building strategic autonomy from the United States, I propose a strategic partnership with the United States,” Polish Prime Minister Mateusz Morawiecki said Tuesday before flying off to the U.S., of all places, for a three-day visit.
Privately, diplomats were even franker.
“We cannot understand [Macron’s] position on transatlantic relations during these very challenging times,” said one diplomat from an Eastern European country, who, like others, spoke on the condition of anonymity to freely express themselves. “We, as the EU, should be united. Unfortunately, this visit and French remarks following it are not helpful.”
The reactions reflect the long-simmering divisions within Europe over how to best defend itself. Macron has long argued for Europe to become more autonomous economically and militarily — a push many in Central and Eastern Europe fear could alienate a valuable U.S. helping keep Russia at bay, even if they support boosting the EU’s ability to act independently.
“In the current world of geopolitical shifts, and especially in the face of Russia’s war against Ukraine, it is obvious that democracies have to work closer together than ever before,” said another senior diplomat from Eastern Europe. “We should be all reminded of the wisdom of the first U.S ambassador to France Benjamin Franklin who rightly remarked that either we stick together or we will be hanged separately.”
Macron, a third senior diplomat from the same region huffed, was freelancing yet again: “It is not the first time that Macron has expressed views that are his own and do not represent the EU’s position.”
Walking into controversy
In his interview, Macron touched on a tense subject within Europe: how it should balance itself against the superpower fight between the U.S. and China.
The French president encouraged Europe to chart its own course, cautioning that Europe faces a “great risk” if it “gets caught up in crises that are not ours, which prevents it from building its strategic autonomy.”
Macron said he wants Europe to become a “third pole” to counterbalance China and the U.S. in the long term | Pool photo by Jacques Witt/AFP via Getty Images
It’s a stance that has many adherents within Europe — and has even worked its way into official EU policy as officials work to slowly ensure the Continent’s supply lines aren’t fully yoked to China and others on everything from weapons to electric vehicles.
Macron said he wants Europe to become a “third pole” to counterbalance China and the U.S. in the long term. An imminent conflict between Being and Washington, he argued, would put that goal at risk.
Yet out east, officials lamented that the French leader was simply treating the U.S. and China as if they were essentially the same in a global power play.
The comments, the second diplomat said, were “both ill-timed and inappropriate to put both the United States and China on a par and suggest that the EU should keep strategic distance to both of them.”
A Central European diplomat flatly dismissed Macron’s stance as “pretty outrageous,” while another official from the same region chalked it up to an attempt “to distract from other problems and show that France is bigger than what it is” — a reference to the protests roiling France amid Macron’s pension reforms.
The frustration in Central and Eastern Europe stems in part from a feeling that the French president has never made clear who would replace Washington in Europe — especially if Russia expands its war beyond Ukraine, said Kristi Raik, head of the foreign policy program at the International Centre for Defence and Security, a think tank in Estonia, a country of about 1.3 million people that borders Russia.
It’s an emotional point for Europe’s eastern half, where memories of the Soviet era linger.
“We hear Macron talking about European strategic autonomy, and somehow just being completely silent about the issue, which has become so clear in Ukraine, that actually European security and defense depends very strongly on the U.S.,” Raik said.
Raik noted, of course, that European countries, most notably Germany, are scrambling to update their militaries. France has also pledged large increases in its defense budgets.
But these changes, she cautioned, will take a “very long time.”
If Macron “wants to be serious in showing that he really aims at a Europe that is capable of defending itself,” Raik argued, “he also should be showing that France is willing to do much more to defend Europe vis-à-vis Russia.”

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( With inputs from : www.politico.eu )

April 11, 2023
Macron was ‘kissing Xi’s ass’ in China, Trump says

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Donald Trump accused French President Emmanuel Macron of sucking up to China late Wednesday.
“You’ve got this crazy world that’s blowing up and the United States have absolutely no say,” Trump, who became the first U.S. president — former or current — to be indicted last month, told Fox News.
“And Macron, who’s a friend of mine, is over with China kissing [Xi’s] ass in China, okay. I said France is now going to China?” said Trump, whose relationship with Macron gradually soured during his time in office.
Macron’s comments come after the French president suggested Europe avoid getting dragged into a U.S.-China confrontation over Taiwan, in an interview with POLITICO during his official visit to China.
The “great risk” Europe faces, Macron claimed, is that it “gets caught up in crises that are not ours, which prevents it from building its strategic autonomy.”
Macron’s comments have not made him new friends on the other side of the Atlantic.
In the U.S., Mike Gallagher, the Republican chairman of the U.S. House of Representatives Select Committee on the Chinese Communist Party, called them “embarrassing” and “disgraceful. The White House said only that it was “focused on the terrific collaboration and coordination that we have with France,” per National Security Council spokesperson John Kirby.
Despite his harsh words for Macron’s China trip, Trump — who more than once boasted about his excellent relationship with the Chinese president when he was in office — went on to praise Xi Jinping in his interview Wednesday.

“President Xi is a brilliant man: if you went all over Hollywood to look for somebody to play the role of President Xi, you couldn’t find him,” Trump said.
“There’s nobody like that: The look, the brains, the whole thing,” he added, describing Xi someone who is “top of the line smart.”

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( With inputs from : www.politico.eu )

April 11, 2023
Germany aims to ‘set the record straight’ on China after Macron’s Taiwan comments

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BERLIN — German Foreign Minister Annalena Baerbock is heading to China to represent Berlin, but she’ll likely have more explaining to do about Paris in the wake of French President Emmanuel Macron’s explosive comments on Taiwan.
As Baerbock embarked on her two-day visit Wednesday evening, officials in Berlin were eager to stress that Germany and the EU care about Taiwan and stability in the region, arguing it’s mainly China that must contribute to de-escalation by refraining from aggressive military maneuvers close to the island nation.
Baerbock’s trip comes amid international backlash against Macron’s comments in an interview with POLITICO, arguing Europe should avoid becoming America’s follower, including on the matter of Taiwan’s security. Although German government spokespeople refused to comment directly on the French president’s remarks, a spokesperson for the foreign ministry specifically called out Beijing when expressing “great concern” over the situation in the Taiwan Strait.
“We expect all parties in the region to contribute to peace. That applies equally to the People’s Republic of China,” the spokesperson said, adding: “And it seems to us that actions such as military threatening gestures are counter to that goal and, in fact, increase the risk of unintended military clashes.”
Nils Schmid, the foreign policy spokesperson for German Chancellor Olaf Scholz’s Social Democratic Party (SPD), said he expects Baerbock to “set the record straight” during her trip to China, which will involve meetings with Beijing’s Foreign Minister Qin Gang, Vice President Han Zheng and top diplomat Wang Yi.
“We clearly defined in the [government] coalition agreement that we need a changed China policy because China has changed. The chancellor made that clear during his visit. Above all, Scholz also issued clear warnings about Taiwan during his visit [last year],” Schmid wrote in a tweet. “I assume that Foreign Minister Baerbock will repeat exactly that and thus set the record straight and make a clarification after Macron’s botched visit.”
Berlin traditionally has been much more in sync with the U.S. on foreign and security policy than France has, which is why many politicians and officials in the German capital reacted with horror to Macron’s comments. The French president said Europe should not take its “cue from the U.S. agenda and a Chinese overreaction,” suggesting the EU stood between the two sides, rather than being aligned with its longtime democratic partners in Washington.
Macron gave the impression to some in the U.S. that Europeans see Beijing and Washington as “equidistant” from Brussels in terms of values and as allies, said SPD foreign policy lawmaker Metin Hakverdi, who is currently on a parliamentary visit to the U.S.

“That was foolish,” Hakverdi told POLITICO, adding that “Macron potentially damaged the peaceful status quo around Taiwan” by giving “the public impression that Europe has no particular interest in the conflict over Taiwan.
“The issue of Taiwan is not an internal matter for the People’s Republic of China. Anything else would virtually invite Beijing to attack Taiwan,” Hakverdi added. “I am confident that our foreign minister will make that clear during her trip to Asia — both to Beijing and to our Asian partners.”
Katja Leikert from the main German opposition party, the center-right CDU, criticized Macron’s comments as “extremely short-sighted,” and added: “Should China decide to strike Taiwan militarily, either by invading it or by starting a maritime blockade, this would have significant political and economic repercussions for us. We cannot just wish that away.
“What we actually need to do right now is strengthen our defense against aggressive measures from Beijing,” Leikert said.
For Berlin, Macron’s comments also come at a particularly bad moment for transatlantic ties. The German government is keen to mend cracks in its relationship with Washington that have emerged over the controversial benefits for U.S. businesses under Joe Biden’s Inflation Reduction Act. Europe hopes to reach an agreement so that its own companies may also be eligible for these subsidies.
Macron’s comments “will not help in renegotiations on the Inflation Reduction Act, nor will they help Joe Biden in the election campaign against populist Republican candidates,” said the SPD’s Hakverdi.
The German foreign ministry spokesperson was quick to stress that both France and Germany were involved in shaping a joint EU-China policy | Ludovic Marin/AFP via Getty Images
The German foreign ministry spokesperson was quick to stress that both France and Germany were involved in shaping a joint EU-China policy, which was also done in cooperation “with our transatlantic partner.”
During her trip to China, Baerbock plans to raise the situation in the Taiwan Strait; Russia’s war of aggression against Ukraine; the human rights situation in China; as well as the fight against climate crisis, the spokesperson said.
Baerbock’s foreign ministry is also currently drafting Germany’s first China strategy. A draft of this seen by POLITICO last year vowed to take a much harder line toward Beijing. Baerbock and her Green party are at the forefront of pushing such a tougher position, while Scholz has long preferred a softer approach.
Incidentally, however, the German government said Wednesday it is reassessing whether to potentially take a firmer stance and ban Chinese state company Cosco from going through with a highly controversial move to buy parts of a Hamburg port terminal.
Scholz had strongly pushed for the port deal ahead of his own trip to Beijing last year, but the future of the transaction is now in doubt after German security authorities classified the terminal as “critical infrastructure.”

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( With inputs from : www.politico.eu )

April 11, 2023
Poland’s Morawiecki plays Europe’s anti-Macron in Washington

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There’s an Emmanuel Macron-shaped shadow hovering over this week’s U.S. visit by Polish Prime Minister Mateusz Morawiecki.
In contrast to the French president — who in an interview with POLITICO tried to put some distance between the U.S. and Europe in any future confrontation with China over Taiwan and called for strengthening the Continent’s “strategic autonomy” — the Polish leader is underlining the critical importance of the alliance between America and Europe, not least because his country is one of Kyiv’s strongest allies in the war with Russia.
“Instead of building strategic autonomy from the United States, I propose a strategic partnership with the United States,” he said before flying to Washington.

In the U.S. capital, Morawiecki continued with his under-the-table kicks at the French president.
“I see no alternative, and we are absolutely on the same wavelength here, to building an even closer alliance with the Americans. If countries to the west of Poland understand this less, it is probably because of historical circumstances,” he said on Tuesday in Washington.
Unlike France, which has spent decades bristling at Europe’s reliance on the U.S. for its security, Poland is one of the Continent’s keenest American allies. Warsaw has pushed hard for years for U.S. troops to be stationed on its territory, and many of its recent arms contracts have gone to American companies. It signed a $1.4 billion deal earlier this year to buy a second batch of Abrams tanks, and has also agreed to spend $4.6 billion on advanced F-35 fighter jets.
“I am glad that this proposal for an even deeper strategic partnership is something that finds such fertile ground here in the United States, because we know that there are various concepts formulated by others in Europe, concepts that create more threats, more question marks, more unknowns,” Morawiecki said. “Poland is trying to maintain the most commonsense policy based on a close alliance with the United States within the framework of the European Union, and this is the best path for Poland.”
Fast friends
Poland has become one of Ukraine’s most important allies, and access to its roads, railways and airports is crucial in funneling weapons, ammunition and other aid to Ukraine.
That’s helped shift perceptions of Poland — seen before the war as an increasingly marginal member of the Western club thanks to its issues with violating the rule of law, into a key country of the NATO alliance.
Warsaw also sees the Russian attack on Ukraine as justifying its long-held suspicion of its historical foe, and it hasn’t been shy in pointing the finger at Paris and Berlin for being wrong about the threat posed by the Kremlin.
“Old Europe believed in an agreement with Russia, and old Europe failed,” Morawiecki said in a joint news conference with U.S. Vice President Kamala Harris. “But there is a new Europe — Europe that remembers what Russian communism was. And Poland is the leader of this new Europe.”
That’s why Macron’s comments have been seized on by Warsaw.
According to Poland’s PM Mateusz Morawiecki, Emmanuel Macron’s talks of distancing the EU from America “threatens to break up” the block | Ludovic Marin/AFP via Getty Images
“I absolutely don’t agree with President Macron. We believe that more America is needed in Europe … We want more cooperation with the U.S. on a partnership basis,” Marcin Przydacz, a foreign policy adviser to Polish President Andrzej Duda, told Poland’s Radio Zet, adding that the strategic autonomy idea pushed by Macron “has the goal of cutting links between Europe and the United States.”
While Poland is keen on European countries hitting NATO’s goal of spending at least 2 percent of gross domestic product on defense — a target that only seven alliance members, including Poland, but not France and Germany, are meeting — and has no problem with them building up military industries, it doesn’t want to weaken ties with the U.S., said Sławomir Dębski, head of the state-financed Polish Institute of International Affairs.
He warned that Macron’s talks of distancing Europe from America in the event of a conflict with China “threatens to break up the EU, which is against the interests not only of Poland, but also of most European countries.”

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( With inputs from : www.politico.eu )

April 11, 2023
China must act against rising global hunger, new WFP boss McCain says

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BRUSSELS — China and other powerful countries need to step up to help steer the world away from a potentially “catastrophic” hunger crisis this year, the new head of the United Nations’ World Food Programme said.
Cindy McCain, an American diplomat and the widow of the late U.S. Senator John McCain, also told POLITICO that the EU and U.S. should see world hunger as a national security issue due to its impact on migration. She furthermore accused Russia of using hunger as a “weapon of war” by hindering exports of Ukrainian grain.
McCain, formerly the U.S. ambassador to the U.N. food agencies, took the helm of the WFP on April 5 and begins her five-year term at a time of increasing world hunger. The number of people facing food insecurity around the world rose to a record 345 million at the end of last year, up from 282 million in 2021, according to the WFP’s figures, as Russia’s war in Ukraine deepened a food crisis driven by climate change, COVID-19 and other conflicts.

This year could be worse still, McCain warned, with the Horn of Africa experiencing its worst drought in 40 years and Haiti facing a sharp rise in food insecurity, among other factors. “2023 is going to be catastrophic if we don’t get to work and raise the money that we need,” she said. “We need a hell of a lot more than we used to.”
Non-Western countries, which have traditionally contributed much less to the WFP, need to step up to meet the shortfall, McCain said, pointing specifically to China and oil-rich Gulf Arab countries. China contributed just $11 million to WFP funds last year, compared to $7.2 billion donated by the U.S.
“There are some countries that have just basically not participated or participated in a very low fashion. I’d like to encourage our Middle Eastern friends to step up to the plate a little more; I’d like to encourage China to step up to the plate a little more,” said McCain. “Every region, every country needs to step up funding.”
Her entreaty may fall on deaf ears, however, given rising geopolitical tensions between the U.S. and China. The WFP’s last six executive directors have been American, dating back to 1992, and Beijing may prefer to distribute aid through its own channels. Last summer, for example, China shipped food aid directly to the Horn of Africa following a drought there.
National security
Countries hesitant to throw more money into food aid should think about the alternative, McCain said, particularly those in Europe that are likely to bear the brunt of any new wave of migration from Africa and the Middle East.
“Food security is a national security issue,” she said. “No refugee wants to leave their home country, but they’re forced to because they don’t have enough food, and they can’t feed their families. So it comes down to if you want a stable world, food is a major player in this.”
The WFP is already having to make brutal decisions despite raking in a record $14.2 billion last year — more than double what it raised in 2017. In February, for instance, it said a funding shortfall was forcing it to cut food rations for Rohingya refugees living in camps in Bangladesh.
The problem is compounded by surging costs following Russia’s invasion of Ukraine last year, which sent already-high food prices soaring further, as grain and oilseed exports through Ukraine’s Black Sea ports plunged from more than 5 million metric tons a month to zero.
A U.N.-brokered deal allowing Ukrainian grain exports to pass through Russia’s blockades in the Black Sea has brought some reprieve, but Moscow’s repeated threats to withdraw from the agreement have kept prices volatile.
Moscow claims that “hidden” Western sanctions are hindering its fertilizer and foods exports and causing hunger in the Global South | Yasuyoshi Chiba/AFP via Getty Images
The deal, initially brokered in July last year, was extended for 120 days last month; Russia, however, agreed to extend its side of the Black Sea grain initiative only for 60 days. Last week, Russian Foreign Minister Sergey Lavrov threatened, once again, to halt Moscow’s participation in the initiative unless obstacles to its own fertilizer and food exports are addressed.
Moscow claims that “hidden” Western sanctions — those targeting Russia’s fertilizer oligarchs and its main agricultural bank, as well as others excluding Russian banks from the international SWIFT payments system — are hindering its fertilizer and foods exports and causing hunger in the Global South.
Ukraine and its Western allies have countered that Russia is deliberately holding up inspections for ships heading to and from its Black Sea ports, creating a backlog of Ukraine-bound vessels off the Turkish coast and inflating prices.
These delayed food cargoes are hindering the WFP’s ability to respond to humanitarian crises, said McCain, who did not hold back on the issue.
“Let’s be very clear, there are no sanctions on [Russian] fertilizer,” she said. “It is not sanctioned and never has been sanctioned.”
Russia is “using hunger as a weapon of war,” said McCain. “it’s unconscionable that a country would do that — any country, not just Russia.”

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( With inputs from : www.politico.eu )

April 11, 2023
Japan prime minister vows to boost G7 security after smoke bomb attack

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Japan’s Prime Minister Fumio Kishida said he would increase security at G7 meetings taking place in his country, a day after a man threw a smoke bomb at him at a campaign event.
Kishida was campaigning Saturday ahead of next week’s by-elections for the Japanese parliament when an explosive device was hurled toward him. Footage on Twitter appeared to show a bodyguard kicking a smoke bomb away from the prime minister and bundling him away, after the device landed near them. A 24-year-old man was arrested at the scene.
Japan will host the leaders of the Group of Seven most industrialized nations at a summit in Hiroshima next month.
On Sunday, speaking after emerging unscathed from the smoke bomb incident, CNN quoted Kishida as saying: “Japan as a whole must strive to provide maximum security during the dates of the summit and other gatherings of dignitaries from around the world.”
G7 foreign ministers are meeting Sunday for a three-day conference in Karuizawa, where they are expected to discuss China’s aggression toward Taiwan, Russia’s war in Ukraine, and North Korea’s missile testing. G7 climate ministers, meanwhile, are completing a two-day meeting in Sapporo.
The Kishida incident had eerie echoes of the shocking assassination of former Prime Minister Shinzo Abe last July.

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( With inputs from : www.politico.eu )

April 11, 2023

The ‘rift is there’: China vs. the world on global debt

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That’s creating new tensions with the U.S. and its Western allies that will be on display as top finance officials gather this week in Washington for the spring meetings of the IMF and World Bank. The U.S. is pressing China to provide more debt relief in what will be one of the most significant areas of conflict at the event.

The IMF, World Bank and other development lenders have been running programs that under certain conditions forgive up to 100 percent of debt in struggling countries — an initiative that got a boost after Bono and other celebrities led a high-profile public pressure campaign in the 2000s.

Now Treasury Secretary Janet Yellen and other officials are growing adamant that what they view as China’s hardline approach to lending is squeezing countries and threatening to deepen poverty in Africa and elsewhere.

Yet the conflict also highlights a new potential fault line in the global economic order: China is pursuing a parallel system of development finance that challenges the Western model of providing assistance and negotiating debt relief with borrowers, which has been dominant since the end of World War II.

China’s approach to lending is widely considered more transactional and criticized as opaque. Beijing’s desire to access oil, minerals and other commodities made Chinese lenders less prone to applying strict conditions and less risk-averse in helping governments finance roads, bridges and railroads to unlock those resources.

The ascendance of China in developing country finance threatens to add to the broader trend of “decoupling” that is unraveling trade and technology ties with the West. The debt China is owed by poor countries only consolidates its influence in Africa and other regions.

“We are moving to more of a bipolar system with a very significant creditor to a great many countries bent on doing things bilaterally with its own rules,” said Carmen Reinhart, who served as the World Bank’s chief economist until last year and has directly participated in debt-relief talks. “That rift is there. … The tension could be cut with a knife.”

The issue will come to a head on April 12 when the two institutions host the Global Sovereign Debt Roundtable, which is meant to address the broader terms of restructuring sovereign debt in distressed countries.

Those talks will affect country-specific efforts that have been largely deadlocked. One of those is in Zambia, where China is a significant creditor. The country defaulted on its public debt two years ago and has become a test case for dealing with a potential onslaught of defaults as the U.S. Federal Reserve and other major central banks are raising interest rates to tamp down inflation. That’s making it more expensive to pay off debt denominated in dollars and other key currencies.

Other countries like Sri Lanka, Ghana, Ethiopia and Pakistan, where China has lent heavily, have already defaulted or are on the cusp of doing so.

“I’m very, very concerned about some of the activities that China engages in globally, investing in countries in ways that leave them trapped in debt and don’t promote economic development,” Yellen told U.S. lawmakers last month. “We are working very hard to counter that influence in all of the international institutions that we participate in.”

Yellen raised the issue with China’s then-Vice Premier Liu He in January in Zurich.

“It is both in the borrower’s interest but also the creditor’s interest to come to a speedy resolution,” said a senior Treasury official, who was granted anonymity because they were not authorized to discuss the issue. “Letting a debt overhang sit a long time winds up just meaning the country in the end can pay back less.”

Close observers say that argument — that China will never get repaid unless it moves to forgive some of its debt — is the best leverage the U.S. has with Beijing.

But since that meeting, China hasn’t taken any significant steps to write down its debt beyond some initial assurances. And while the country agreed to join a G-20-driven process known as the common framework two and a half years ago, that forum — meant to help the poorest countries resolve debt problems arising from the pandemic — has yet to deliver meaningful results.

IMF Managing Director Kristalina Georgieva said top Chinese officials expressed a willingness to cooperate on debt during her own recent visit to the country.

“It takes far too long for debt resolution,” Georgieva told POLITICO’s Ryan Heath in an April 6 interview. “Yes, China has multiple institutions that deal with debt,” she said. “It makes it complicated domestically, but they have to speed up their participation.”

China rebuffs claims about its lending. The government argues that its massive financing of projects has been central to development in regions like Africa and says the private sector, consisting mainly of bondholders in the U.S. and Europe, often owns more debt than China does in poor countries.

“We reject the unjustified accusation from the U.S.,” Chinese Foreign Ministry spokesperson Mao Ning said of Yellen’s recent comments. “China has always carried out investment and financing cooperation with developing countries based on international rules and the principle of openness and transparency. We never attach any political strings, or seek any selfish political interests.”

A senior Chinese central bank official said last month that China is reluctant to participate in sovereign debt restructuring unless the World Bank and other regional development banks also agree to write down their own loans. The World Bank dismisses that demand, arguing that development bank financing already comes with low interest rates and does not add significantly to a country’s debt burden.

China’s new approach

There are no set international rules that govern when a country defaults on its debt, unlike the specific legal processes that companies and individuals can rely on in many countries.

Instead, wealthy countries that have traditionally lent to developing nations formed what’s known as the Paris Club and would negotiate with governments in distress to write down their debt. That group, along with the IMF and World Bank, was able to help a number of highly indebted countries, primarily in Africa, restructure their debt in the 1990s and early 2000s.

That changed when China started massively lending to developing countries as part of its Belt and Road Initiative more than a decade ago. Chinese lenders were followed into riskier yet lucrative markets by private bondholders seeking to make money outside of the then ultra-low interest rate environment in advanced economies.

Since 2017, China has become the world’s largest official creditor, surpassing the World Bank, IMF and 22-member Paris Club combined, Brent Neiman, a counselor to Yellen, said last September. China’s financing of projects in other countries between 2000 and 2017 totaled more than $800 billion, most of that in the form of loans, according to one estimate.

China’s lending has tapered in the past five years but has left a legacy of unsustainable debt in a number of countries whose finances were hit hard by pandemic spending.

Lending from China often comes at commercial rates higher than those offered by other governments and development banks. Borrowing countries in many cases are required to sign non-disclosure agreements that prevent them from sharing with other creditors what they owe Chinese institutions. And when China does offer debt relief, it often comes in the form of offering a grace period on payments rather than taking a so-called haircut on the value of the loan.

Despite underlying state control, China’s lending is decentralized among various institutions reluctant to take losses on their loans. And while state-owned institutions like the China Development Bank are viewed by many as official government lenders, Beijing considers them corporate entities on par with the private sector and not subject to the same restructuring terms.

New research from a group of leading economists has also shown that China is becoming a growing lender of last resort in bailing out countries through credit swap lines from the People’s Bank of China, the central bank.

That has given borrower countries the space to continue servicing the debt they’ve taken on from Chinese institutions. In doing so, Beijing is drawing up a parallel system separate from the postwar economic order, where the IMF takes on the role of helping poorer nations restructure their economies to attain sustainable finances.

Quiet diplomacy

Beijing’s inaction has made it so that other official creditors and private sector bondholders are reluctant to make a move. The fear is that if one party agrees to write down its debt, the borrowing country would just turn around and use the savings to pay off the debt it owes to another creditor, such as China.

That’s raised the political stakes in Washington, where lawmakers are loath to see the U.S. write off debt and have the borrower give those payments to Chinese creditors.

The impasse has effectively prevented the IMF from being able to dole out financial support to desperate countries, as those mired in debt have to show they have achieved a sustainable strategy to address it.

But there is some hope that the issue can be approached in a practical manner.

“The administration is basically taking the view that this is a financial problem that needs a financial solution, and China as a big player in the countries’ debt structure obviously has to participate,” said Brad Setser, a senior fellow at the Council on Foreign Relations and former Treasury official.

“To be honest, the U.S. doesn’t have to convince China to participate in this process,” he said. “The countries defaulted. China has to participate in order to get repaid.”

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#rift #China #world #global #debt
( With inputs from : www.politico.com )

April 11, 2023

Tag: China

Walking into controversy

Fast friends

National security

China’s new approach

Quiet diplomacy