CRG Weekly: Indo-Pacific event, Chinese gigafactory in UK and ASEAN
News from the China Research Group
Next event: Join Claire Coutinho MP and Michael Auslin (Hoover Institution) in conversation for an assessment of Britain’s tilt to the Indo-Pacific on Wednesday 7 July from 5-6pm. Both contributed to Policy Exchange’s Indo-Pacific Commission report. Register here.
New paper: Last week, we published a new paper, written by Robert D. Atkinson, which explores whether the UK and other democratic countries should form a new treaty to defend against economic coercion. Read here. (SCMP, Global Times)
In the press: On the use of Hikvision in government (FT, The Australian), the Chinese takeover of UK’s largest semiconductor foundry (CNBC, The Telegraph), and the UK-China higher education relationship (BBC Chinese).
The week in review
The week was dominated by celebrations of 100 years of the Chinese Communist Party. It was also the 24th anniversary of the handover of Hong Kong. Both events were extensively covered in almost every news outlet and all over China.
Instead, we’ll focus on the UK’s Indo-Pacific tilt ahead of Wednesday’s event. Rewind to two weeks ago: Foreign Secretary Dominic Raab paid his fifth visit to South East Asia, advertised as a sign of Britain’s new commitment to the Indo-Pacific. On a flying three-day trip, Raab met with President Nguyen Xuan Phuc of Vietnam to discuss the UK-Vietnam Strategic Partnership Agreement, headed over to Cambodia to discuss ASEAN membership before Cambodia assumes its role as chair, and finished with meetings in Singapore.
The UK’s accession to ASEAN as dialogue partner is a big moment, given the group has not admitted a new full dialogue partner for two decades (a period of expansion in the two decades leading up to the 1990s saw ten partners join, including Australia, New Zealand, Russia, China, the US and the EU). The UK has been laying significant groundwork for this part of its Indo-Pacific strategy; it appointed the UK’s first dedicated ambassador to ASEAN, Jon Lambe, in November 2019, and invited the ASEAN Chair to attend the G7 Foreign Ministers’ meeting for the first time in London in May.
But the UK’s accession also comes at a tricky time for ASEAN. The bloc is currently under real pressure over the crisis in Myanmar; it has struggled to formulate a cohesive response to the ongoing coup, and faced criticism after Myanmar’s military government chief Senior Gen. Min Aung Hlaing was invited to attend a Leaders Meeting in Jakarta.
A recent short conversation between CSIS experts Greg Poling and Huong Le Thu focused on the fears of diminishing regional relevance, particularly after Secretary of State Antony Blinken missed an ASEAN meeting in May. Poling said “the US government increasingly views ASEAN as incapable of dealing with major issues of importance.” It is also worth remembering that when Cambodia last chaired the grouping in 2012, the group failed to deliver a joint statement for the first time in its 45-year history because it was unable to agree a consensus stance over Chinese aggression in the South China Sea.
The difficulties ASEAN faces are a microcosm of the challenges of the UK’s Indo-Pacific tilt. But on a more optimistic note, one piece of little noticed news this week was the launch of the new UK Graduate Route, which allows international students to stay in the UK for up to three years after degree completion to look for a job. Given there is no salary requirement, nor a cap on applications, this is a policy change which will be welcomed by Indo-Pacific partners like India and Indonesia. It could also be a valuable policy step to diversifying funding for British universities.
In brief
Chinese battery giant Envision AESC is set to build two new gigafactories; one in Sunderland and one in France.
Chancellor Rishi Sunak’s Mansion House speech included a lengthy mention of China, saying we should seek a “mature and balanced” relationship “without compromising our values or security”.
Italian Foreign Minister Luigi Di Maio affirmed that the US is a much more important ally for Italy than China, amid speculation about Italy’s Belt and Road membership.
Putin and Xi announced a five-year extension of the Sino-Russian Treaty of Friendship, first signed in 2001.
Taiwan and the US held their first trade talks in five years, focusing on supply chain security and digital trade.
Hong Kong banned all incoming flights from the UK over concerns about the Delta variant.
China switched on the world’s second-largest hydropower plant in Sichuan, hailed by Xi as the “largest and most technically difficult hydropower project under construction”.
The Washington Post reported that China is building more than 100 new missile silos in its western desert.
Just two days after its massive IPO in New York, China’s internet regulator launched an investigation into ride-hailing service Didi.
H&M's sales in China fell 23% for the second quarter of 2021 compared to the same time last year, reflecting the costs of a consumer boycott over Xinjiang.
What we’re reading:
The UK’s application to join the CPTPP could be a signal for the emerging role of middle powers in reviving free trade and multilateralism, argues Stewart Paterson for Hinrich Foundation.
The EU is developing a new regime to deal with economic coercion. This ECFR paper lays out the mechanics.
What we’re listening to:
The Chinese Communist Party at 100: this week’s Sinica podcast discusses continuity and change within the Party, as well as its uneasy relationship with China’s intelligentsia.
The SCMP’s China Geopolitics podcast analyses Xi Jinping’s speech for the CCP centenary event, and what may have been missed in the headlines about ‘bloodied heads (头破血流)’.
When it comes to China, Africa and Central Asia have quite a bit in common. The China in Africa podcast discusses the current dynamics surrounding China’s engagement in Central Asia and what lessons might be applied to Africa and beyond.
Interesting events next week:
Money Talks: How the Digital Yuan Will Change China - and the World. 7:30pm, 8 July with China Institute
Anxious China: book launch and discussion. 5:30pm, 7 July with King’s College London’s Lau China Institute
Sourcing from China in an age of uncertainty. 6pm, 7 July with SupChina