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China will likely speed up its Belt and Road projects amid US tensions: Citi

Source:CNBC
Writer:Kelly Olsen
Date: December 12, 2018

China will likely speed up infrastructure projects in its ambitious Belt and Road Initiative amid trade tensions with the United States, Citi said in a report Tuesday.

Several Chinese companies and various sectors, including mining and transportation, are poised to benefit from that development, the report said.

The Asian giant announced the BRI in 2013, aimed at recreating and modernizing ancient Silk Road trade routes. It has become the signature foreign policy program of Chinese President Xi Jinping’s government.

 The program is an ambitious infrastructure project aimed at connecting more than 60 countries in Asia, Europe, Africa and the Middle East through overland and maritime routes.

But it has been widely criticized, amid concerns that the high debt incurred for projects might become unsustainable for countries such as Sri Lanka, and others could face risks due to political changes, including those in Malaysia.

China has elevated the program to a top national strategy, Citi said, adding that tensions with the U.S. mean Beijing is prepared to take a different approach in the construction projects in order to expand its influence in countries that are part of the initiative.

 China will likely “escalate the loan and shorten the project approval” process to quicken the pace of infrastructure building “so as to diversify trade and economic activities there away from the U.S.,” Citi analysts said in the report.

“We believe the BRI will primarily benefit the railway sector, given China’s distinct advantages globally in terms of technology and cost in railway infrastructure,” they said, noting that building of power plants, telecommunications facilities and ports should also increase.

‘Kinder, gentler’

Some Chinese firms stand to benefit from this, the report said, stating the examples of China Railway Group and China Railway Construction.

Others include Chinese train manufacturer CRRC — which produces rolling stock such as railroad cars, wagons and coaches — as well as equipment maker China Railway Signal & Communication, Citi said in its report. All are listed in Hong Kong.

Some industries are also set to make inroads.

“We see near-term opportunities for sectors such as commodity and mining, transportation and logistics, as well as finance,” Citi said, citing specific firms such as Chinese oil and gas company PetroChina and the Bank of China, both listed in Hong Kong. Shanghai-listed Conch Cement is also “well positioned to benefit from the initiative,” it said.

In a separate Citi report assessing the progress of the Belt and Road Initiative after its first five years, the U.S. bank suggested that China may be forced to modify the BRI into a “kinder, gentler” version that would sit better with its critics.

Some challenges include the heavy reliance on the U.S. dollar in order to fund the infrastructure projects, Citi said. Other pressures China continues to face include criticisms from recipient countries that projects are too favorable to China and “explicit opposition” from the U.S., the report said.

However, all that could contribute to Beijing becoming more open to changes, as seen in China’s “growing interest” in working with multilateral development banks to jointly finance projects, the report said.

But whatever modifications are made, the program is here to stay.

“Though it might change shape, the BRI is certainly not going away,” Citi noted.

 

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What you need to know to understand Belt and Road

Source: World Economic Forum

Writer: Bruno Maçães

There are two things everyone needs to know about the Belt and Road. First, as officials in Beijing will tell you, this grand project is measured in decades, with its conclusion planned for 2049, the centenary of the founding of the People’s Republic of China. Second, the initiative is both global and revolutionary. Its aim is to create a new order in world politics and the world economy.

Past equivalents to the Belt and Road would have to be just as shapeless and ambitious. Perhaps concepts such as “the West” come the closest — even in the manner that a metaphor came to acquire epochal significance. If the initiative succeeds, it is very likely that we shall use the name to refer to the new arrangements, much as we use “West” as a shorthand for the existing order.

What will the world look like after the Belt and Road? In the first Belt and Road summit in 2017 Xi Jinping hailed it as the “project of the century.” If all goes according to plan, the Belt and Road will change the shape of the world economy and world politics, returning us to a time when China occupied the center of global networks.

There will be new infrastructure, of course, and that will be an obvious and easy metric of success. In twenty or thirty years some of the new Belt and Road projects will likely stand as the highest example of what human ingenuity can achieve in its drive to master natural forces. A bridge crossing the Caspian Sea may make road transport between Europe and China fast and easy, changing old mental maps separating continents. The Kra Isthmus Canal in Thailand will do the same for the Indian and Pacific Oceans.

But infrastructure is ultimately a means. The geographic space being transformed must be connected before it can start to grow areas of economic activity; industrial parks along infrastructure routes are slowly integrated to establish regional value chains and eventually support China’s rise to a technological superpower, leading the transformations of the future.

Artificial intelligence, robotics, genetic engineering and space exploration. As it expands, the Belt and Road is bound to become increasingly futuristic. Self-driving vehicles on land, sea and air and trillions of connected devices worldwide will be empowered by a Belt, Road and Space fleet of China-centered satellites. Chinese companies are already planning to engage in deep-space economic activity, like building orbit solar power plants, and mining asteroids and the moon. One or more Sputnik moments – when Chinese technology leaps far ahead of what the West can do – will offer the final and most meaningful metric of success for the Belt and Road.

The Belt and Road will never become universal—just as the West never became universal—but in some areas of the world it will rule unimpeded and different shades of influence will be felt everywhere.

The problem is to determine the core of the new Chinese world picture and identify the main traits which it will come to impress upon the whole. Many of those traits are already visible in what is but the construction stage of the Belt and Road.

Virtues are regularly invoked. Countries have relations of dependence, generosity, gratitude, respect and retribution. Relations between countries are much more diverse and complex than in the more formal Western-led order. Ritual is important, and so is history. Nations are better seen as intersecting stories and power the ability to determine where the story goes next.

Even in its formative stage the Belt and Road is an exercise in the opacity of power. There is an exoteric doctrine of the initiative and then an esoteric practice where deals are agreed upon, often with no written evidence, and where hierarchy resembles that of security-clearance levels of access. The Belt and Road is like holy writ—never revealed completely and all at once, but only bit by bit and over many decades.

Rapid change, old-fashioned morality, and secret communication. This will be a world of soothsayers, saints, and spooks.

The Belt and Road may well never realize its goals. It may be abandoned as it runs into problems and the goals it sets out to achieve recede further into the distance. But success and failure are to be measured in terms of these goals, so we must start from them.

The new world the initiative will try to create is not one where one piece on the chessboard will be replaced, not even one where the pieces will have been reorganized. It will be a world built anew by very different people and according to very different ideas.

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How A Growing U.S.-China Rivalry Is Reshaping The Global Tech Landscape

Source: Forbes
Writer: Alex Capri
Date: December 09, 2018

For observers of the U.S.-China geopolitical rivalry, the arrest of Huawei’s CFO, Meng Wanzhou, in Canada, should serve as a wakeup call for the rest of the tech sector. The allegations against China’s telecom giant for breaching U.S. sanctions highlights the escalating technology race and hybrid cold war between the world’s two superpowers.

Washington and Beijing are now at a historical tipping point, and national security priorities are driving policies that will lead to further decoupling of American and Chinese interests. This, in turn, will lead to further fragmentation of global value chains in the tech sector.

Tech companies—or any firms that depend on cutting edge technology—will need to gauge their risk environment around two key factors: First, how to react to a wave of disruptive policy measures such as export controls, sanctions, blocked acquisitions and blocked technology transfers. Second, how to minimize the damage that will come as a result of disentanglement from existing technology ecosystems.

 Beijing’s provocative tech agenda

At the heart of this competition is the Made in China 2025 plan, Beijing’s strategy to lead the world in AI, robotics, aerospace and other industries.

China’s rapid advancement in technological capability has in many ways caught Washington and its allies flatfooted. Since 2017, For example, Beijing has been creating a navigational satellite constellation to rival America’s GPS. In 2018 alone, it launched 11 BeiDou satellites, some as few as 17 days apart.

 Beijing can now offer its partners an alternate version of America’s GPS, thereby undermining Washington’s geopolitical monopoly in this area, and it can  leverage the BeiDou program to extract concessions from its client states, such as agreements to buy more Chinese digital infrastructure and equipment.In the competition to win the battle of 5G standards— the technology that provides lightning-fast connectivity and better bandwidth in the internet of things (IOT)—China is leveraging its 650 million mobile internet users and its planned infrastructure along the digital Belt and Road to expand its global influence.

In a bid to become self-sufficient and cut its reliance on foreign semiconductor technology, Beijing is reportedly investing $31.5 billion in a National Integrated Circuit Industry Investment Fund, among other funds.

Lately, Beijing’s focus has increasingly turned to what it calls “civil-military fusion.” Recently, a series of state-backed venture capital funds have brought together tech startups and other private companies with the Peoples Liberation Army. In 2017, for example, the Foshan Civil-Military Innovation Industries Fund was launched to the tune of $28.75 billion.

Washington’s technology counter-offensive

The U.S. Department of Defence (DOD) now officially lists China as an “adversary.” A recent DOD report list key areas of strategic focus including Beijing’s efforts to leverage technology to modernize its military, and its plans to harness the Belt and Road Initiative to further enhance its economic clout. This has fed a popular narrative in Washington and beyond that China’s strategic ambitions need to be confronted and contained. Thus, firms should expect to see fewer technology transfers to Chinese companies, the blocking of deals (such as Huawei getting locked out of the U.S., Australia and possibly the U.K. and Japan) and the placement of targeted individuals and firms on sanctions lists. Whether all of this will produce the desired outcome by Washington and its allies is, of course, debatable.

The U.S. Export Control Reform Act, passed in August, will lead to the expansion of an export controls list. There will be new export licensing requirements for a broad range of so-called dual-use technologies–defined as technologies that can be use for commercial and military purposes. In the digital economy, this will impact a wide range of industries: robotics, AI, autonomous vehicles, even facial recognition technology. The effects could be widespread, with collateral damage to foreign firms.

Chinese smartphone maker ZTE serves as a cautionary tale. Its reliance on U.S. technology for both components like microchips and software from the Android operating system highlights China’s dependence on foreign suppliers.

Hikvision, China’s largest maker of facial recognition surveillance equipment, may suffer a fate similar to ZTE, as the U.S. government is threatening to ban Silicon Valley chipmakers from selling it American technology. Unlike ZTE, however, which avoided a likely collapse when Washington agreed to waive the technology ban, Hikvision may not be so lucky.

China’s major Achilles heel continues to be its dependence on foreign semiconductor technology. Every area of Beijing’s Made in China 2025 plan relies on foreign-owned integrated circuit technology, with much of it coming from five American manufacturers: AMD, Intel, Micron, Nvidia and Qualcomm.

Even Yangtze Memory, Beijing’s state-funded national champion, which recently announced that it had developed a state-of-the-art 64-layer 3D NAND flash memory chip, will depend entirely on critical early-stage equipment—needed for mass production—from foreign firms. Primary partners are Applied Materials and KLA-Tencor, both American companies.

The Scale of disentanglement

All of this leaves the global tech sector in a highly vulnerable position. Increasing U.S. export controls that restrict or block access to American technology could cause major damage to Beijing’s geopolitical aims. But foreign firms will suffer collateral damage as well, as they will be penalized for being imbedded with denied parties.

Over the past three decades, for example, the American companies named above have invested billions of dollars in collaborative ventures and production facilities in China. For all the world’s leading semiconductor firms, China will soon become their largest market.

According to PWC’s Global Strategy group, 80% of the corporate research and development (R&D) money spent in China in 2017 came from non-Chinese multinationals. Disentangling these ecosystems will require dismantling complex, intertwined relationships, with potentially heavy economic and financial consequences across global value chains.

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China’s real endgame in the trade war runs through Europe

Source: CNBC
Date: December 08, 2018

SCHLOSS ELMAU, GERMANY – Hungarian Prime Minister Viktor Orban recently shared some history with a friend, explaining why he reached out to China’s then-Premier Wen Jiabao in 2011, seeking urgent financial support and providing Beijing one of several European inroads in the wake of the 2008 financial crisis.

Orban’s reason was a simple one: survival. Facing a potential debt crisis and unwilling to accept austere loan conditions from Western institutions, Beijing offered a lifeline. For his part, Orban convened some Central European leaders with Beijing, and they laid the groundwork for the “16-plus-one” initiative based in Budapest that since then has provided China unprecedented regional influence.

It didn’t take long for China’s investment to bear fruit. In March 2017, Hungary took the rare step to break European Union consensus on human rights violations, refusing to sign a joint letter denouncing the alleged torture of detailed lawyers. In July of the same year, Hungary joined Greece – another distressed European target of Chinese largesse – in blocking reference to Beijing in a Brussels statement on the illegality of Chinese claims in the South China Sea.

 The Bavarian Alps might seem an unusual place to reflect on China’s growing global influence, in a week that begin with U.S. President Donald Trump and Chinese President Xi Jinping working to avoid a trade war in Argentina and advanced to Canadian authorities arrest of Chinese tech company Huawei’s CFO in Vancouver, at US request on suspicion of Iran sanctions violations.

Transatlantic strategy experts – convened at this breath-taking resort by the Munich Security Conference – were left to reflect on Europe’s unique vulnerability to this major power conflict in a world where they are absorbing the unanticipated shocks of greater US unpredictability, greater Chinese assertiveness and deeper European divisions about how to navigate it all.

“China already has shown it can have a veto power over European Union policy,” said Wolfgang Ischinger, chairman of the Munich Security Conference, on the margins of the off-record gathering he convened. He notes that while West European companies are driven by profit, their Chinese counterparts invariably also represent Chinese state interests. “That doesn’t have to be malign, but it can also be malign.”

European Union officials concede that China already has exercised veto power it has over policies that require unanimity, and because some officials are pushing privately for a change to majority voting. Concerns are growing as Beijing’s influence has grown more rapidly than anyone anticipated. Chinese foreign direct investment in the EU has risen to $30 billion in 2017 from 700 million before 2008.

That influence has grown more rapidly than anyone anticipated. Since the 2008 financial crisis, Chinese foreign direct investment in the EU has risen from 700 million Euro to 30 billion Euro in 2017.

A report by two German think tanks, the GPPI and Mercator Institute for China Studies, found that Beijing has taken full advantage of Europe’s openness and has been “rapidly increasing political influencing efforts in Europe.”

Political warfare

Some call it political warfare, using a nonmilitary toolbox of overt and covert means to exert its influence on political and economic elites, academia and public opinion. With these efforts, it weakens Western unity (and US attraction) and improves its image as an alternative to liberal democracy, the report concluded.

Growing Sino-US tensions have brought Europe new export chances in China but at the same time China has shifted considerable export and foreign investment efforts to Europe to replace lost American markets. In the first six months of this year, newly announced Chinese mergers and acquisitions into Europe were nine-fold the North America number at $20 billion compared to $2.5 billion and completed investments were six times higher at $12 billion compare to $2 billion.

At the same time, a new Trump-Xi trade deal could shake Europe as well, as China’s state driven economy could decide overnight to replace European products with US goods for political purposes.

The potential for an escalated Beijing-US struggle has left European experts scratching their heads over how they would choose sides or navigate the perils, particularly in the case where some countries and industries have much more at stake in China.

Some European officials speak of the need for “strategic autonomy” in the face of US sanctions extraterritorial reach on Iran and Secretary of State Mike Pompeo’s speech in Brussels this week where he questioned multilateralism and the European Union. At the same time, they worry more about what some call China’s “political warfare” of gathering economic, financial and thus also diplomatic influence.

The European Union hasn’t yet applied anything as restrictive on foreign investment as the US Committee on Foreign Investment in the United States (CFIUS), an interagency committee that reviews the impact of foreign investments on US national security. However, the EU this month passed a bill creating an unprecedented, if non-binding, screening scheme aimed at predatory Chinese investments.

Germans this week increased their focus on questions regarding a company called KUKA Robotics, which has become the poster child for the perils of high tech sales to the Chinese. With its industrial robotics production, KUKA was one of the nation’s greatest innovators for the 21st century economy until it was taken over by the Chinese company Midea in 2016.

Just last month, Midea was reversing previous assurances that it would not remove KUKA’s highly respected and long-time CEO, underscoring China’s ultimate control over cutting-edge robotics technology.

Despite facing new scrutiny, China is undeterred in its European strategy, taking advantage of European divisions, America’s trade strains with Europe and the urgent investment needs of particularly Southern and Eastern European countries.

Xi’s first state visits Spain and Portugal

Tellingly, President Xi made a stop in Spain on his way to Argentina and then again in Portugal for a two-day stint on his way back from the G-20 meeting, his first state visits to both countries.

Even before Xi’s visit, China had invested $12 billion in Portuguese projects ranging from energy, to transport, to insurance, financial services and media. During Xi’s visit, China and Portugal further deepened their economic partnership, with Lisbon agreeing to cooperate in China’s Belt and Road Initiative as it hopes to garner increased Chinese infrastructure and energy investments. China is also poised to take over a majority stake in EDP, Portugal’s largest business and a major EU energy provider.

In short, global markets and news reports miss the real story with their single-minded focus on whether or not President Trump and President Xi can reduce tensions and close a trade deal over the next 90 days. The bigger game, increasingly apparent in Europe, is whether China can replace the United States over time or at the very least significantly reduce its influence.

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One Belt, One Road, One Big Mistake

Source: Foreign Policy
Author: 
Date:  

The headlines coming out of this year’s APEC conference in Papua New Guinea focused on the conflict between America and China that kept the forum from issuing a joint communiqué. Less noticed were two short memorandums released on the sidelines of the conference by the island nations of Vanuatu and Tonga. In return for renegotiating existing debt, both agreed to become the newest participants—following other Pacific nations like Papua New Guinea and Fiji—in Chinese President Xi Jinping’s signature foreign-policy venture, the Belt and Road Initiative (BRI).

As Xi’s trillion-dollar development strategy has snaked away from the Eurasian heartland and into the South Pacific, western Africa, and Latin America, concern has grown. Many Americans fear that the Belt and Road Initiative is an extension of efforts by the Chinese Communist Party (CCP) to undermine the security and economic architecture of the international order. China’s growing largesse, they worry, comes largely at the expense of international institutions and American influence.

This angst lies behind another announcement made at last month’s APEC gathering: Australia, Japan, and the United States declared that they had formed their own trilateral investment initiative to help meet infrastructure needs in the Indo-Pacific. For some this is not enough: In its most recent report to the United States Congress, the bipartisan U.S.-China Economic and Security Review Commission recommended that Congress create an additional fund “to provide additional bilateral assistance for countries that are a target of or vulnerable to Chinese economic or diplomatic pressure.”

This is the wrong response to the Belt and Road Initiative. Ignore the hype: For the Chinese, this initiative has been a strategic blunder. By buying into the flawed idea that barrels of money are all that is needed to solve complex geopolitical problems, China has committed a colossal error. Xi’s dictatorship makes it almost impossible for the country to admit this mistake or abandon his pet project. The United States and its allies gain nothing from making China’s blunders their own.

In Xi’s speeches, the phrase most closely associated with the Belt and Road Initiative is “community of common destiny.” Xi’s use of this term is meant to link the BRI to the deeper purpose party leaders have articulated for the CCP over the last three decades. China’s leaders believe that not only is it their “historic mission” to bring about China’s “national rejuvenation” as the world’s most prestigious power, but that China has a unique role to play in the development of “political civilization” writ large.

It is the Chinese, Xi maintains (as Hu and Jiang did before him), who have adapted socialism to modern conditions, and in so doing have created a unique Chinese answer to “the problems facing mankind.” Though this answer began in China, Xi is clear that the time has come for “Chinese wisdom and a Chinese approach” to benefit those outside of China. The Belt and Road Initiative is intended to do just that. By using the Chinese model of socialism to develop the world’s poorer regions, the initiative justifies Xi’s grandiose claims about the party’s historic mission on the international stage.

To match these lofty aims, Chinese academics and policy analysts at prestigious party think tanks have articulated more down-to-earth goals for the initiative. According to them, the BRI promises to integrate China’s internal markets with those of its neighbours. Doing so will bring its neighbours closer to China geopolitically and bring stability to the region. By increasing economic activity in China’s border regions, such as Xinjiang and Tibet, the Belt and Road Initiative will lessen the appeal that separatist ideology might have to the residents. Another projected benefit is the energy security that will come through the construction of BRI-funded transport routes. Finally, by articulating and then following through on an initiative that puts common development over power politics, China will gain an advantage over other major countries (read: Japan and the United States) who present the world as a black-and-white competition for hegemony. The community of common destiny, these analysts have claimed, is a community that will immensely benefit China.

As the Belt and Road Initiative is only five years old (and many of its main members have been involved for a far shorter time) its full results cannot yet be judged. However, a preliminary assessment can be offered for BRI projects in South and Southeast Asia, the region described by Chinese leaders as the “main axis” of the Belt and Road Initiative. It is here that BRI investment is strongest and has been around longest. The picture is not promising. The hundreds of billions spent in these countries has not produced returns for investors, nor political returns for the party. Whether Chinese leaders actually seek a financial return from the Belt and Road Initiative has always been questionable—the sovereign debt of 27 BRI countries is regarded as “junk” by the three main ratings agencies, while another 14 have no rating at all.

Investment decisions often seem to be driven by geopolitical needs instead of sound financial sense. In South and Southeast Asia expensive port development is an excellent case study. A 2016 CSIS report judged that none of the Indian Ocean port projects funded through the BRI have much hope of financial success. They were likely prioritized for their geopolitical utility. Projects less clearly connected to China’s security needs have more difficulty getting off the ground: the research firm RWR Advisory Group notes that 270 BRI infrastructure projects in the region (or 32 per cent of the total value of the whole) have been put on hold because of problems with practicality or financial viability. There is a vast gap between what the Chinese have declared they will spend and what they have actually spent.

There is also a gap between how BRI projects are supposed to be chosen and how they actually have been selected. Xi and other party leaders have characterized BRI investment in Eurasia as following along defined “economic corridors” that would directly connect China to markets and peoples in other parts of the continent. By these means the party hopes to channel capital into areas where it will have the largest long-term benefit and will make cumulative infrastructure improvements possible.

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Huawei arrest of Meng Wangzhou: A ‘hostage’ in a new US-China tech war

Source: BBC
Writer: Karishma Vaswani
Date: December 6, 2018

It is hard to overstate the symbolism and significance of the arrest of Meng Wangzhou, Huawei’s chief financial officer and daughter of its founder. Huawei is the crown jewel of Chinese tech and Ms Meng is effectively its princess.

On December 1, the same day as President Trump and President Xi sat down at the G20 over grilled sirloin and caramel pancakes, to work on easing the trade war, Ms Meng was arrested in Canada and is now facing extradition to the US.

Although it’s still not clear what the charges against her are – we know that the US has been investigating Huawei for possible violations of US sanctions on Iran – this is not simply a case about the arrest of one woman, or just one company.

This arrest could materially damage the relationship between the US and China at possibly one of the most sensitive times between the two countries in their long and torrid history.

“It could not come at a worse time and it is probably going to put a cloud over any upcoming negotiations,” Vinesh Motwani of Silk Road Research told me. “The market had already turned more sceptical over the G20 agreement in recent days. This is only going to make the market more sceptical any deal can be reached.

Rapprochement averted

Tensions have been rising between Washington and Beijing, not just on trade. But at that G20 meeting in Buenos Aires, it looked like the two sides had at least decided to talk, and thrash things out over a 90-day period.

Amongst those issues are technology concerns, which are front and centre of this trade war. Even if it wasn’t clear how united China and the US may have been on the objectives, the very fact that discussions were taking place were seen as a semi-positive for the global economy.

‘Hostage taking’

But this arrest is likely to be seen by China as an attack and “hostage taking”, says Elliott Zaagman, who has covered the Chinese firm for the better part of the last two decades.

“China has a reputation for making agreements and not keeping them, not following through,” he told me on the phone from Boston. “There’s a theory that this could be a way for the US to hold Beijing to its word on the trade war.”

If so, it is a move the Chinese media has not taken well.

Meng Wanzhou, file picture 2 October 2014Image copyrightEPA
Image captionMeng Wanzhou, Huawei’s CFO, was detained while transferring between flights in Vancouver

“The US is trying to find a way to attack Huawei,” says Hu Xijin, editor in chief of the Chinese and English editions of the Global Times – a publication often seen as a mouthpiece of the Chinese government.

“It is trying to keep Huawei down. That’s why it has pressured its allies not to use Huawei’s products. It is trying to destroy Huawei’s reputation.”

What Mr Hu is referring to is the recent rejection of Huawei’s services by a number of US allies, including Australia, New Zealand and most recently the UK’s BTwhich says it won’t be using Huawei equipment in the heart of its 5G mobile network when it is rolled out in the UK (although it does still plan to use Huawei’s mast antennas and other products).

There’s no evidence of Huawei having ever been engaged in any spying or handing over of data to the Chinese government. In fact, whenever I talk to Huawei executives privately they tell me how frustrated they are because of how the US government and Western media unfairly paints them as a Chinese state-owned company that does Beijing’s bidding.

Company sources tell me that Huawei should be seen as the modern, dynamic and law-abiding global firm that it is, and that the US’s narrative is flawed and unfounded.

Still, Huawei’s founder, the father of Ms Meng, is Ren Zhengfei – a former military officer in the Chinese army. And the fact remains, as Mr Zaagman points out in a recent piece for The Lowy Institute, “the firm’s relationship with the Chinese People’s Liberation Army remains an issue of concern and opacity”.

Which is why the US says countries must be wary of Chinese companies like Huawei. Under China’s laws, private companies and individuals may be obliged to hand over information or data to the government if they are indeed asked.

It’s that possibility, government sources say, that is scaring them off doing business with Huawei.

Huawei has told me this is completely untrue, and other Chinese academics and business people have also rejected this notion.

Huawei logoImage copyrightGETTY IMAGES
Image captionHuawei is one of the largest telecommunications equipment and services providers in the world

Mr Hu of the Global Times agrees: “The Chinese government would not do this. China would not hurt its own enterprises. If it hurts its own companies, how would it benefit the country? Even if a middling or low-level official were to ask it, Huawei will have the power to refuse any kind of government request.”

Many in China will see this as yet another attempt to contain the country’s rise, by limiting its most global firms’ access to international markets.

“This could further endanger Huawei’s 5G aspirations outside of emerging markets,” says Tony Nash of Complete Intelligence, on the line from the US.

“If Huawei is being investigated it could put both Huawei and ZTE on the back foot as other equipment makers gain a lead in North America, and potentially other developed markets.”

Other countries

It’s not just developed markets where Huawei may be losing ground. The scrutiny is building in emerging markets too. Industry sources tell me that the US has been putting pressure on Asian allies to stop them from using Huawei’s equipment. The Solomon Islands and Papua New Guinea were the latest recipients of this pressure, and India is thought to be next.

So what does this mean? The gloves are off. You should be under no illusion what this latest move by the US means for the relationship between the world’s two largest economies: things have taken a dramatic turn for the worse.

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Pak, Bulgaria agree to enhance cooperation in the field of trade

ISLAMABAD: Pakistan and Bulgaria have agreed to further enhance cooperation in the field of trade, economy, investment and culture.

During 3rd round of bilateral political consultation in Sofia, Bulgaria, the two sides expressed satisfaction on the ongoing collaboration at the UN and other multilateral fora.

The two sides also identified possibilities to enhance cooperation in education, science and technology, defence, parliamentary exchanges and people-to-people contacts, said a statement of the Foreign Office here on Tuesday.

They also discussed peace and security situations in their respective regions.

The Pakistani delegation briefed the Bulgarian side on its efforts aimed at promoting peace and security in Afghanistan, Pakistan-India relations and human rights violations in the Indian Occupied Jammu and Kashmir.

The Bulgarian side appreciated Pakistan’s role in the fight against terrorism and sacrifices rendered by it.

Source: Pakistan Today, 12th Dec 2017.

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Papua New Guinea Prime Minister Peter O’Neill meets with Xi Jinping; signs up to China’s Belt and Road initiative

Chinese President Xi Jinping met with Papua New Guinea’s Prime Minister Peter O’Neill in the Great Hall of the People in Beijing as part of a trip that saw the Pacific nation signing on to Beijing’s One Belt One Road initiative.

During the meeting, the leaders agreed to promote bilateral relations between the two nations to a new level.

It was also revealed that during the same trip PNG had signed up to China’s “One Belt and One Road” initiative, according to a statement from the Chinese National Development and Reform Commission.

Mr Xi said PNG was an influential Pacific island country, noting that China-PNG relations had made historic progress since their establishment 42-years-ago, especially after a strategic partnership was established in 2014.

“Mutual political trust and mutually beneficial cooperation between the two sides have reached a new historical level,” Mr Xi said.

“China appreciates Papua New Guinea’s firm adherence to the One-China policy and is willing to work together with Papua New Guinea to strengthen communication, deepen cooperation, expand exchanges and push bilateral relations to a new level.”

Mr Xi stressed that not long ago PNG officially joined the Asian Infrastructure Investment Bank and is the first Pacific island country that signed a memorandum of understanding on the Belt and Road construction.

He said both sides should actively expand pragmatic cooperation under the framework of the Belt and Road so as to inject a new power to the sustainable and stable development of the bilateral relationship.

Mr O’Neill said PNG had been committed to deepening the strategic partnership with China, and firmly adhered to the one-China principle.

“Papua New Guinea is committed to deepening its strategic partnership with China, firmly pursuing the One-China policy, highly praising and actively supporting president Xi Jinping’s great ‘One Belt, One Road’ initiative,” he said.

He said that he hoped to expand “cooperation with China in the fields of economy and trade, investment, agriculture, tourism, and infrastructure”.

Mr Xi also said China was willing to enhance coordination in multilateral mechanism with PNG and supported the country to host this year’s Asia-Pacific Economic Cooperation (APEC) Leaders Meeting for building an open Asian-Pacific economy.

According to the Lowy Institute, China spent $858.4 million on 27 projects in PNG between 2006 and 2016.

China’s influence can be seen in the funding of Port Moresby’s new $35 million International Convention Centre, the venue for the upcoming APEC summit.

China has also been involved in large-scale road projects, building a six-lane boulevard between the convention centre and the nearby national parliament — worth an estimated $40 million — and an upgrade to the Port Moresby freeway.

Mr O’Neill arrived in China on Wednesday for a week-long visit to strengthen ties with China that will include visits to Shanghai, Zhejiang and Guangdong, according to the Chinese Foreign Ministry.

His visit comes amid continued concern in Australia about the growing influence of China in the Pacific region, with Foreign Affairs Minister Julie Bishop telling Fairfax Australia wanted to be the “natural partner of choice” to Pacific nations.

But Peter Hartcher, the political editor for the Sydney Morning Herald, said Australia had “already been caught napping” on investment in the Pacific.

“The Australian Government now finds itself in a catch-up phase,” Mr Hartcher told the ABC’s The World program.

“The reason that countries like Papua New Guinea and earlier Vanuatu and the Solomon Islands are interested in Belt and Road … is we haven’t been such great and generous benefactors ourselves over recent decades.”

Mr Hartcher added that it was unlikely Australia could keep up with the size of Beijing’s foreign aid warchest.

“You don’t need a begging bowl when you go to Beijing these days because the Chinese have put out a giant honeypot … a giant treasure chest,” he said.

“They’ve invited more than 100 countries in the world to participate and take some of the treasure, at least as a loan. You don’t need to beg. The Chinese are practically ladling it out.”

SOURCE:http://www.abc.net.au/news/2018-06-22/png-prime-minister-peter-oneill-meets-with-xi-jinping-in-beijing/9897248

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China launches meteorological satellite to benefit Belt and Road countries

XICHANG: China on Tuesday launched the new Fengyun-2H meteorological satellite to improve the accuracy of weather forecasting and provide better meteorological services to countries participating in the Belt and Road Initiative, reported Xinhua News

The Fengyun-2H was launched on a Long March-3A rocket at 9:07 p.m., Beijing Time, from the Xichang Satellite Launch Center in southwest China’s Sichuan Province.

It was the 277th mission of the Long March rocket series.

A geostationary orbit satellite, Fengyun-2H is the last in the Fengyun-2 series. The Fengyun-4 series will dominate China’s new generation geostationary orbit meteorological satellites, said Zhao Jian, deputy director of the Department of System Engineering of China National Space Administration (CNSA).

In response to a request from the World Meteorological Organization (WMO) and the Asia-Pacific Space Cooperation Organization (APSCO), the position of Fengyun-2H will be changed from original 86.5 degrees east longitude to 79 degrees east longitude.

This means the Fengyun series satellites will be able to cover all the territory of China, as well as countries along the Belt and Road, the Indian Ocean and most African countries, according to the CNSA.

The adjustment will enable the Fengyun series satellites to acquire meteorological data over a wider range, improve weather forecasting accuracy and the ability to cope with climate change and mitigate losses caused by natural disasters, Zhao said.

Equipped with a scanning radiometer and space environment monitor, Fengyun-2H will provide real timecloud and water vapour images and space weather information to clients in the Asia-Pacific region, said Wei Caiying, chief commander of the ground application system of Fengyun-2H and deputy director of the National Satellite Meteorological Center.

The Belt and Road region, which is mainly high mountains, deserts and oceans, lacks meteorological information. Damage from natural disasters, especially meteorological disasters, in the region is more than double the world average.

After four months of in-orbit tests, Fengyun-2H will provide data to help Belt and Road countries better cope with natural hazards, Zhao said.

“The move shows China’s willingness to construct a community with a shared future,” said Zhao.

It also addresses a WMO request to strengthen satellite observation of the Indian Ocean to fill a gap in the region, which is China’s contribution to the international community as a major power of the developing world, Zhao said.

China will offer data of the Fengyun series free to Belt and Road countries and APSCO member countries, said Zhao.

China has helped establish ground stations to receive the data in some APSCO member countries, including Pakistan, Indonesia, Thailand, Iran and Mongolia. China plans to upgrade the stations and provide training to technicians in those countries.

If countries along the Belt and Road are struck by disasters like typhoons, rainstorms, sandstorms and forest or prairie fires, they can apply for and quickly get the data, Wei said.

China’s meteorological satellites have played an important role in the Belt and Road region. For instance, the Fengyun-2E satellite captured an indication of heavy rainfall in Pakistan in August 2017 and issued a timely warning to avoid casualties.

China already has 17 Fengyun series meteorological satellites in space, with eight in operation, including five in geostationary orbit and three in polar orbit, to observe extreme weather, climate and environment events around the globe.

The WMO has included China’s Fengyun series of meteorological satellites as a major part of the global Earth observation system. They provide data to clients in more than 80 countries and regions. Weather forecasts in the eastern hemisphere depend mainly on China’s meteorological satellites, according to the CNSA.

Since Fengyun-2A was sent into orbit on June 10, 1997, the Fengyun-2 series satellites have monitored more than 470 typhoons emerging in the western Pacific Ocean and the South China Sea.

They helped improve the accuracy of typhoon forecasting. In 2015, the deviation of China’s prediction of typhoon tracks within 24 hours was less than 70 kilometers, among the world’s best, according to the Shanghai Academy of Spaceflight Technology (SAST), producer of the Fengyun series.

The new generation Fengyun-4A geostationary meteorological satellite launched at the end of 2016 can improve observation efficiency by 20 times compared with the Fengyun-2 series, said SAST.

SOURCE:https://nation.com.pk/06-Jun-2018/china-launches-meteorological-satellite-to-benefit-belt-and-road-countries

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CPEC — a solution to the Kashmir issue?

In December 2017, China offered the Afghan government a chance to become part of their ambitious $50 billion China-Pakistan Economic Corridor (CPEC). At the same time, they made it clear that the project was not in any way directed against India and that no third party should be concerned with its progress. This came after India complained that the corridor passes through Gilgit-Baltistan (GB)in Pakistan-administered Kashmir which is a territory claimed by both India and Pakistan.

After negotiating a border stand-off at Doklam Plateau (China-Bhutan disputed border) both India and China indicated that they wanted to build peaceful relations by solving their bilateral disputes through diplomacy instead of armed conflicts. Pakistan wants to follow the same path, and open a dialogue with India in order for CPEC to develop without any problems. However, another solution could be that the government of Pakistan could instead refer to the people of this region. The Kashmiris and the people of GB could also be brought into the loop. They could finally have the plebiscite that was promised these people by the UNCIP resolution so many years ago.  But this will never happen.

Pakistan fears the outcome of the plebiscite. Why do you think Pakistan has been so reluctant to grant GB provincial status? The usual response from Islamabad is that its due to its disputed nature yet the reality is quite different.

After the 18th amendment was passed under Asif Ali Zardari’s government, provinces were granted a semblance of autonomy. However, if GB was given provincial status, it would control its own economic and administrative polices and could claim a larger share of the benefits from CPEC. Another reason was their small population size of only two million people. If they were granted provincial status then the people of FATA, Southern Punjab, the Potohar region and Karachi could also end up demanding provincial status and full autonomy. Thus, by issuing Order 2018, Islamabad has made certain that the centre continues to enjoy the economic benefits and administrative powers that would’ve instead been under the control of the people of GB themselves.

In case of Azad Jammu Kashmir (AJK), Islamabad amended the Interim Act of 1974. The legislative, monetary and administrative status of the Kashmir Council has been reduced to an advisory role, with all powers reverted to the office of the prime minister. By reinforcing Section 7 of the Interim Act, and adding an additional clause, the government has essentially restricted the freedom movement in AJK and disillusioned the locals.

In October 2017, Afghanistan President Ashraf Ghani categorically said that his country would join the China-Pakistan Economic Corridor (CPEC) only if Islamabad allows connectivity between India and Afghanistan. Mentioning sovereignty issues raised by India, Ghani also warned that if Afghanistan was not given transit access to Wagah and Attari for trade with India via Pakistan, then Kabul would also restrict Islamabad’s access to central Asia. When Pakistan and India both reluctant to sit down for a civilised talk, China decided to use backdoor channels to open a dialogue with India and convince them to cooperate with Pakistan. As a result, an Indian delegation was spotted at a March 23 parade in Islamabad, and later the same year at the Shanghai Co-operation Summit.

“What the region needs is a strong group of leaders who are not afraid to take on the collective might of the Indian and Pakistani governments, in order to fight for the disenfranchised people of Gilgit-Baltistan and Azad Jammu Kashmir”

Now there is an interim government in charge. They have limited powers and this provides the establishment a freehand. As a first step the ISPR (Inter Services Public Relations) on May,29 2018 (soon after the announcement of interim PM) tweeted the first sign of the establishment’s anticipated strategy to calm tensions with India. The director generals of Military Operations (DGMOs) of both countries agreed to a ceasefire agreement on the border, including the LOC in AJK. India for their part realise that the only time relations with their neighbours to the West got better, was under Musharraf’s rule, which is why they believe talking to the establishment will lead to better results with respect to CPEC. If this turns out to be true, then India will be given the green light to join CPEC in the coming weeks. It would benefit them greatly as it would open up markets in central Asia, and, at the same time, ease tensions with Pakistan.

 

In the end, CPEC seems like a great opportunity for all countries involved yet there is one important community that is being ignored in all of this, the people of GB and AJK. If there had been a strong and unified leadership in the region then perhaps they could have used this opportunity to pressurise Pakistan, and India in to giving them more autonomy and letting them be in charge of their own fate.

However, current leaders are not brave enough to make these sacrifices and are, instead, happy to take whatever scraps Islamabad throws at them. What the region needs is a strong group of leaders who are not afraid to take on the collective might of the Indian and Pakistani governments, in order to fight for the disenfranchised people of GB and AJK. Only then can the years of oppression they have suffered through finally come to a stop and its citizens get the freedom they have craved for so long.

SOURCE:https://dailytimes.com.pk/250530/cpec-a-solution-to-the-kashmir-issue/