Chinese and US Engagement with Developing Countries News Roundup: Jan. 21 – Feb. 1, 2019

Every two weeks, The Carter Center’s China Program releases an overview of major events involving Chinese and US global engagement, with a particular focus on emerging issues in Africa and Latin America. In addition to using news sources, the news roundup will analyze papers and reports from academic journals, governmental bodies, and NGOs, and will also summarize debates and other events organized by think tanks on select issues. The news roundup is intended to be a platform and resource for both China watchers and for readers interested in political and economic development in developing countries. It aims to deepen the understanding of China’s foreign policy, and emerging issues and trends in developing countries, as well as to enhance the prospect of multinational cooperation among China, the U.S., Africa and Latin America.

China bulls echo Wang Qishan’s view from Davos: the economy is fine  
(By Cissy Zhou South China Morning Post, 25 Jan. 2019)

Recent figures regarding China’s economy have demonstrated that the growth rate has fallen to 6.6%, a 28-year low. To many, these numbers signal a period of pessimism on the Chinese economy, whilst analysts and Chinese bulls alike are confident that the economy will not go belly-up. Individuals, such as Chen Dafei suggest that, while 6.6% is a historic low for China, in the global text such a growth rate is extremely high, and investors should not panic. Others who share this optimist with Mr. Chen, such as Dan Wang from the EIU, point to other positive statistics, particularly on consumer habits, “All companies can see that China’s consumer market is fundamentally sound. China’s demographic structure is at around its highest purchasing power level. The urban middle class is maturing. Thus, there are great potentials for foreign companies, especially those aiming for the high-end consumer market like quality food, drink, and dairy products,” (Wang, Interview with C. Zhou, article dated January 25, 2019). This optimist attitude that is shared by a few individuals and unlikely to gain popularity in the short term.

Huawei: Tappy the robot and the rest of the US charges 
(BBC News, 29 Jan. 2019)
Following a Department of Justice announcement on Monday, the U.S. Government has filed 23 charges against Huawei and its CFO “Sabrina” Meng Wanzhou. The charges range from money-laundering and fraud to stealing trade secrets, of which the chief focus is T-Mobile’s Tappy the Robot. These charges come during the U.S. and China’s trade war, though talks to diffuse the economic conflict appear to be on the horizon. Certain charges pursued by the U.S. government related to the actions of Huawei’s subsidiary, Skycom, and its business in Iran. Charges suggest that Skycom was a front for Huawei in the Islamic Republic to skirt around the U.S. sanctions. Ms. Meng, along with an unnamed “founder” of Huawei, is accused of lying to U.S. authorities on the actions of Huawei in Iran. The story of Tappy strikes a different tone, being more directly related to the theft of trade secrets, and at one-point Tappy’s arm. Tappy was a phone testing robot developed by T-mobile, that has become the center of the legal battle after Huawei employees were accused of taking photos of the technology, stealing schematics of the robot as well as its “tapping” robot arm.

US Spy Chiefs Break with Trump on Several Threats to the US 
(Aljazeera, 2019-01-30)
The directors of the CIA, FBI, National Security Agency, and other intelligence agencies told senators on Tuesday that China, Russia, Iran, and North Korea are posing the greatest security threats to the United States currently. They described the growing closeness of the Moscow-Beijing relationship as threatening in the economic, military, and intelligence sectors but also specifically to the upcoming 2020 presidential election. The experts warned of adversaries’ use of online tactics to sway opinion, influence policy, and steal information. The officials seemed to be particularly concerned about the cyber-espionage threat posed by China, which comes simultaneously with the U.S.’s charges against China’s Huawei Technologies.

China Focus: Draft Foreign Investment Law to be Reviewed at NPC Annual Session 
(Xinhua, 2019-01-30)
The National People’s Congress Standing Committee decided Wednesday to submit a draft of China’s foreign investment law to the upcoming plenary session of the National People’s Congress. The law will address foreign equity joint ventures, non-equity joint ventures, and wholly foreign-owned enterprises and is aimed at attracting foreign investment and making the investment environment favorable and safe for those investors. Chairman of the NPC Standing Committee, Li Zhanshu, said that this law will show China’s intent to continue opening its doors to the international community overall and specifically in the economic sector.

Spite Won’t Beat China in Africa 
(Foreign Policy, 2019-01-23)
Lina Benabdallah discusses the reasons Chinese involvement in Africa has been increasingly successful in the past couple of decades, which include the technical financial and infrastructure investment, but are more dependent on the high level of people-to-people exchanges between Chinese and African leadership, she argues. For example, Chinese foreign ministers make frequent visits to African countries, and China has provided scholarships and workshops for African students, among many other activities focused at enhancing bilateral relations on the people-to-people basis. Benabdallah points to the U.S.’ lack of this same attention and respect in its diplomacy with African nations as the main reason China may be “winning” Africa. Her main recommendation for Washington is that it needs to treat African leaders as equals, rather than as if they are a pawn between the U.S. and China, in order to cultivate the same personal relations that are causing them to turn to China in the first place.

Why China Feels It Has Little to Gain from Linking Huawei Case to Latest US Trade War Talks 
(SCMP, 2019-01-29)
Monday’s indictment by the U.S. Department of Justice came on the same day a trade delegation from China arrived for two days of trade talks. Chinese Foreign Ministry spokesman Geng Shuang addressed this by saying that Washington was aware of China’s position on the issue and hoped that the trade talks would make progress and keep the two issues separate. However, other scholars mentioned that although Beijing wants to keep the two issues “parallel”, the Chinese side may bring up the issue of Meng’s case if the circumstances are appropriate.

China’s ‘Belt and Road’ Plan in Pakistan Takes a Military Turn 
(By Maria Abi-Habib The New York Times 19 Dec. 2018)

Despite the previous connotation that the BRI, or Belt and Road Initiative was a peaceful project led by the PRC, activities in conjunction with Pakistani Government appears to be demonstrating otherwise. This has been demonstrated through a secret project to develop the next generation of fighter jets. The presence of military development by the Chinese government has brought to light a fear that many nations who have shunned the BRI hold, that the BRI is a plan to project China’s military might. In this case, as previously, Pakistan has served as a demonstration of China’s BRI with economic investment in CPEC that has resulted in the Gwadar Port and a host of Coal-Fired Plants. As Pakistan has built its relationship with the Chinese government, ties to the United States have frayed in a manner which may leave Pakistan attached at the hip to China, even if doesn’t wish to do so. Despite the leaps forward in economic investment, Pakistan has begun to suffer under the debt its accrued as a result of Chinese investment projects. Though the Pakistani government has sought to quell this by reviewing all Chinese infrastructure projects, should the government interfere too much, China retains ever-friendly relations with Pakistan’s Military, which functions in-its-own-right and has much to gain financially.

Blackwater founder Erik Prince’s new company is building training center in Xinjiang 
(The Washington Post, 2019-02-01)
Frontier Services Group (FSG), a security company based in Hongkong and has focused its business in China, recently signed a deal to build a training base in Xinjiang, a Chinese province where over 1 million Chinese Muslims have been put into political re-education camps. It is reported that the group would invest $6 million on this project, which could train 8000 people a year. Eric Prince, who is the former founder of the controversial Blackwater company, led the security contract but was initially impeded by Frontier through a spokesman as “Mr. Prince is a minority shareholder in FSG and deputy chairman”.