CRG Weekly: UK approves Chinese semiconductor takeover, Hong Kong judges resign and EU-China summit begins
News from the China Research Group
What Russia’s invasion of Ukraine means for UK-China relations and Taiwan. China Research Group co-chair Tom Tugendhat MP joined Professor Rana Mitter and Sophia Gaston for a British Foreign Policy Group event to discuss the knock-on effects of Russia’s invasion for UK-China relations and Taiwan’s security. Watch back here.
Podcast: China and Arctic geopolitics. Chris Cash was joined by Yenching scholar Lukas Wahden to discuss why the Arctic has emerged as a fiercely contested region and how the war in Ukraine might alter the regional balance of power. Listen here.
The stories driving the week
UK ministers approve Chinese semiconductor factory takeover
Ministers have decided not to intervene in the takeover of compound semiconductor producer Newport Wafer Fab by a Chinese-owned firm, following a review by the government’s national security adviser.
Sir Stephen Lovegrove concluded there were not enough security concerns to block it, according to two government officials.
Almost 30% of Wingtech - the owner of Netherlands-based Nexperia, which is set to acquire Newport Wafer Fab - shares can be traced back to the Chinese government, investment screening specialists Datenna found.
The UK only has around 15 semiconductor manufacturers, and only 4 silicon and compound semiconductor fabs.
CRG co-chair Tom Tugendhat commented: “It’s not clear why we haven’t used our new powers under the National Security and Investment Act to fully review the takeover of one of our leading compound semiconductor companies.”
Top UK judges resign from Hong Kong’s highest court
The UK has announced that two of its Supreme Court judges will no longer be sitting on Hong Kong's top court. UK Supreme Court President Lord Robert Reed and Lord Patrick Hodge said the threat to civil liberties had made their role on Hong Kong's Court of Final Appeal untenable.
The resignations came with Foreign Secretary Liz Truss’s support. Truss commented: “as National Security Law cases proceed through the Courts – and we see the far-reaching chilling effect of the legislation – it has become increasingly untenable for the UK government to endorse UK serving judges sitting on the Hong Kong Court of Final Appeal.”
Chinese Foreign Ministry spokesman Wang Wenbin expressed dissatisfaction with the resignations, blaming "British pressure" against a sweeping national security law.
The Times reported that six British judges on Hong Kong’s highest court defied calls to stand down after their colleagues quit over curbs on freedom of speech.
Meanwhile, the UK Government published its new six-monthly report on Hong Kong, declaring that China's National Security Law in the territory has seen opposition stifled and dissent criminalised.
EU-China summit kicks off with Ukraine high on the agenda
Ahead of Friday’s summit, in uncommonly open language, EU officials close to the preparations of the summit said any help given to Russia would damage China's international reputation and jeopardise relations with its biggest trade partners.
Chinese President Xi Jinping cited COVID, global economic challenges and “Ukraine crisis” as three current major crises, adding: “As two big global forces, two big markets, two big civilisation, China and EU should ... provide the turbulent word with some stabilising factors.”
A feature in The Economist suggested that it took Chinese diplomats a while to realise that European leaders would not agree to a conventional, trade-focused, summit, following China’s “cold-blooded response” to Russia’s invasion of Ukraine.
Politico’s Stuart Lau argued that European Commission President Ursula von der Leyen and European Council President Charles Michel have to satisfy a wide array of member countries - with diverging views on Beijing’s rhetorical support for Moscow - during talks with their Chinese counterparts.
Meanwhile, the head of Britain’s GCHQ spy agency, Jeremy Fleming, said that China’s long-term interests are not well served by an alliance with a country that ignores international rules. He said the Kremlin regards China as a supplier of weapons, technology, and a potential market for its oil and gas but suggested President Xi has a "more nuanced" view of the relationship.
China imposes city-wide Covid lockdown in Shanghai
The city is being locked down in two stages over a minimum of nine days while authorities carry out Covid-19 testing, in the biggest city-wide lockdown since the Covid outbreak began more than two years ago.
There were particular concerns over an Omicron outbreak given 130 million over-60s in China without full vaccine protection.
Economists at the Chinese University of Hong Kong (CUHK) said China’s Covid lockdowns are costing the country at least ($46bn) £35bn a month, with the hit likely to double if more cities impose stringent restrictions. Global crude oil prices fell over fears of dampening Chinese demand.
The Wall Street Journal scooped that many patients have died at a large Shanghai elderly-care hospital that is battling an outbreak, according to people familiar with the situation, a sign that a new wave of infections is hitting China’s financial capital harder than authorities have publicly disclosed.
Australian journalist on trial in China for spy charge
A Beijing court held a closed-door trial for Australian journalist and former TV anchor Cheng Lei, accused of “illegally supplying state secrets overseas”. Ms Cheng has been detained in China since August 13, 2020, and has not been allowed to speak to her family.
Foreign journalists and diplomats, including Australia’s ambassador Graham Fletcher, were denied entry to the courtroom on Thursday. The court deferred its verdict after the national security trial lasted less than a day.
“The sentencing could be between five to 10 years, depending on the severity, though it could be much less than that or much more, it’s a really broad charge,” Sky News Correspondent Annelise Nielsen and former colleague of Ms Cheng, said.
Weekend podcasts
How will Beijing Respond to the War in Ukraine? ChinaTalk
The Ukraine War and Great Power Politics in the Global South. The China in Africa Podcast
Should there be a boycott of China over human rights issues in Xinjiang? SOAS - China in Context