China
China’s stake in the euro crisis
Author: Jonas Parello-Plesner, ECFR
Chinese leaders had a packed Valentine’s Day this year. Xi Jinping, the new leader-in-waiting, toured the US in an effort to develop a rapport with American leaders, while back in Beijing, Wen Jiabao hosted Herman Van Rompuy and José Manuel Barroso as part of the EU-China Summit.
The main question was whether China’s Valentine gift would be a larger financial stake in Europe, at a time when the EU is struggling to secure the continuity of the euro. Wen signalled the possibility of increased support for Europe’s ailing rescue fund, the European Financial Stability Facility, but added that China does not have the capacity to ‘buy up Europe’.
In light of these recent events, discussing China’s stake in the euro crisis calls for some preliminary myth-busting.
First, if China takes a larger stake in Europe’s debts, it does not mean that Europe’s free will is going to be sold off to China in a Faustian deal. Even though the US has a much larger debt with China, for example, no one is inclined to question whether US foreign policy is decided in Beijing. The same goes for Europe; fears that reaching out to China is akin to a ‘financial Munich agreement’ are overblown.
Another myth, relayed by the press, is that every positive word on Europe from a Chinese leader will translate into a buying of bonds. But when China says it has confidence that Europe will resolve the crisis and that China will do its part to assist, it does not necessarily mean that Chinese money will flow in. China discloses its total holdings of currency reserves, but these figures are not broken down into countries and currencies. And neither the EU nor its individual member states have sufficient monitoring systems to track foreign holders of treasury bonds. As a result, one way or the other, it is hard to know exactly how much European debt China holds.
Nevertheless, China has a fundamental interest in seeing the euro crisis recede, as it is dependent on the EU for the largest part of its exports. China is also seeking to move beyond dollars in its currency intake, and a world without the euro would be a return to a completely dollar-dominated system.
The top priority for China in pursuing this interest is risk-aversion — and this is no myth. Hence Beijing is seeking stable and secure returns on foreign currency reserves; it burnt its fingers by investing in Wall Street in 2007 through its sovereign wealth fund and by buying too many dollars relative to other currencies, with the former now showing dwindling returns as the US resorts to printing money. Also, with Chinese public awareness on the rise and the country’s wealth colloquially baptised the ‘blood and sweat’ of the Chinese people, many Chinese netizens are questioning why China has to bail out ‘lazy’ Europeans at a time when social inequality is rampant in China. Wen Jiabao’s remarks that helping Europe is in China’s best interest are partly meant to placate this blog-fuelled dissatisfaction.
An additional complicating factor for China is that its currency reserves are declining for the first time in years, and 2012 could be a bumpy year economically. China might need to draw on its reserves to pull up growth to the magical 8 per cent that will help ensure a smooth political transition at the end of the year.
This helps explain the tight balancing act to which Chinese leaders have committed, showing some public support for the EU’s currency ills while showing an equal dose of risk-averse reluctance at throwing too much money into the EU’s piecemeal solutions. For example, the head of China’s central bank, Governor Zhou, recently stated that China’s helping hand amounted to not reducing ‘the proportion of euro exposure in its reserves’ — hardly the same as a massive purchase. The announcement sends the message that Europe should work out its own solutions without waiting idly for an inflow of Chinese money. But at the same time it does not rule out additional Chinese financial support. The most likely scenario is that China will put additional money into the EU through an international body such as the IMF. This would presumably be in cooperation with other partners like Japan and the BRIC countries, meaning China would not stand alone with the risk. Yet here both the US and paradoxically also Germany are reluctant since it could enhance China’s say in the IMF.
Still, China’s support for Europe is not yet a done deal. A public commitment from China’s leaders quoting actual figures would help dispel myths both in Europe and China and would allow ordinary Chinese currency earners to track where their funds go.
Also, while China might also favour risk-aversion when it comes to buying euros, it is more than willing to accept a stake in Europe’s crisis by buying up companies. Chinese Commerce Minister Chen Deming said he looked forward to a sale of European assets, and China recently purchased a large stake in Portugal’s formerly state-owned energy company, which was sold off because of austerity cuts. This rapid move into European acquisitions could well be the most startling change in the relationship between the EU and China in recent years — and is likely to significantly affect the relationship for many more years to come.
Jonas Parello-Plesner is Senior Policy Fellow at the European Council on Foreign Relations. He has worked as a senior advisor with the Danish government on Asian affairs. He is on the board of editors of the Danish magazine Raeson.
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China’s stake in the euro crisis
Business
China Limits Apple Operations as BYD Manufacturing Moves to India and Southeast Asia Amid Trade Frictions | International Business News – The Times of India
China is restricting the export of high-tech manufacturing equipment and personnel to India and Southeast Asia, aiming to maintain domestic production amid potential US tariffs, impacting companies like Foxconn and BYD.
China Curbs on High-Tech Manufacturing
China is intensifying restrictions on the movement of employees and specialized equipment essential for high-tech manufacturing in India and Southeast Asia. This measure aims to prevent companies from relocating production due to potential tariffs under the incoming US administration. Beijing has urged local governments to restrict technology transfers and export of manufacturing tools as part of this strategy.
Impact on Foxconn and Apple’s Strategy
Foxconn, Apple’s primary assembly partner, is facing challenges in sending staff and receiving equipment in India, which could impact production. Despite these hurdles, current manufacturing operations remain unaffected. The Chinese government insists it treats all nations equally while reinforcing its domestic production to mitigate job losses and retain foreign investments.
Broader Implications for India
Additionally, these restrictions affect electric vehicle and solar panel manufacturers in India, notably BYD and Waaree Energies. Although the measures are not explicitly targeting India, they complicate the business landscape. As foreign companies seek alternatives to China, these developments are likely to reshape manufacturing strategies amidst ongoing geopolitical tensions.
China
China’s GDP Grows 5% in 2024: Key Insights and Main Factors
In 2024, China’s GDP grew by 5.0%, meeting its annual target. The fourth quarter saw a 5.4% increase, driven by exports and stimulus measures. The secondary industry grew 5.3%, while the tertiary increased by 5.0%, totaling RMB 134.91 trillion.
China’s GDP grew by 5.0 percent in in 2024, meeting the government’s annual economic target set at the beginning of the year. Fourth-quarter GDP exceeded expectations, rising by 5.4 percent, driven by exports and a flurry of stimulus measures. This article provides a brief overview of the key statistics and the main drivers behind this growth.
According to official data released by the National Bureau of Statistics (NBS) on January 17, 2025, China’s GDP reached RMB 134.91 trillion (US$18.80 trillion) in 2024, reflecting a 5.0 percent year-on-year growth at constant prices. During the 2024 Two Sessions, the government set the 2024 GDP growth target of “around 5 percent”.
By sector, the secondary industry expanded by 5.3 percent year-on-year to RMB 49.21 trillion (US$6.85 trillion), the fastest among the three sectors, while the tertiary industry grew by 5.0 percent, reaching RMB 76.56 trillion (US$10.63 trillion) and the primary industry contributed RMB 9.14 trillion (US$1.31 trillion), growing 3.5 percent.
A more detailed analysis of China’s economic performance in 2024 will be provided later.
(1USD = 7.1785 RMB)
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
Read the rest of the original article.
China
Can science be both open and secure? Nations grapple with tightening research security as China’s dominance grows
The U.S.-China science agreement renewal narrows collaboration scopes amid security concerns, highlighting tensions. Nations fear espionage, hindering vital international partnerships essential for scientific progress. Openness risks declining.
Amid heightened tensions between the United States and China, the two countries signed a bilateral science and technology agreement on Dec. 13, 2024. The event was billed as a “renewal” of a 45-year-old pact to encourage cooperation, but that may be misleading.
The revised agreement drastically narrows the scope of the original agreement, limits the topics allowed to be jointly studied, closes opportunities for collaboration and inserts a new dispute resolution mechanism.
This shift is in line with growing global concern about research security. Governments are worried about international rivals gaining military or trade advantages or security secrets via cross-border scientific collaborations.
The European Union, Canada, Japan and the United States unveiled sweeping new measures within months of each other to protect sensitive research from foreign interference. But there’s a catch: Too much security could strangle the international collaboration that drives scientific progress.
As a policy analyst and public affairs professor, I research international collaboration in science and technology and its implications for public and foreign policy. I have tracked the increasingly close relationship in science and technology between the U.S. and China. The relationship evolved from one of knowledge transfer to genuine collaboration and competition.
Now, as security provisions change this formerly open relationship, a crucial question emerges: Can nations tighten research security without undermining the very openness that makes science work?
Chinese Premier Deng Xiaoping and American President Jimmy Carter sign the original agreement on cooperation in science and technology in 1979.
Dirck Halstead/Hulton Archive via Getty Images
China’s ascent changes the global landscape
China’s rise in scientific publishing marks a dramatic shift in global research. In 1980, Chinese authors produced less than 2% of research articles included in the Web of Science, a curated database of scholarly output. By my count, they claimed 25% of Web of Science articles by 2023, overtaking the United States and ending its 75-year reign at the top, which had begun in 1948 when it surpassed the United Kingdom.
In 1980, China had no patented inventions. By 2022, Chinese companies led in U.S. patents issued to foreign companies, receiving 40,000 patents compared with fewer than 2,000 for U.K. companies. In the many advanced fields of science and technology, China is at the world frontier, if not in the lead.
Since 2013, China has been the top collaborator in science with the United States. Thousands of Chinese students and scholars have conducted joint research with U.S. counterparts.
Most American policymakers who championed the signing of the 1979 bilateral agreement thought science would liberalize China. Instead, China has used technology to shore up autocratic controls and to build a strong military with an eye toward regional power and global influence.
Leadership in science and technology wins wars and builds successful economies. China’s growing strength, backed by a state-controlled government, is shifting global power. Unlike open societies where research is public and shared, China often keeps its researchers’ work secret while also taking Western technology through hacking, forced technology transfers and industrial espionage. These practices are why many governments are now implementing strict security measures.
Nations respond
The FBI claims China has stolen sensitive technologies and research data to build up its defense capabilities. The China Initiative under the Trump administration sought to root out thieves and spies. The Biden administration did not let up the pressure. The 2022 Chips and Science Act requires the National Science Foundation to establish SECURE – a center to aid universities and small businesses in helping the research community make security-informed decisions. I am working with SECURE to evaluate the effectiveness of its mission.
Other advanced nations are on alert, too. The European Union is advising member states to boost security measures. Japan joined the United States in unveiling sweeping new measures to protect sensitive research from foreign interference and exploitation. European nations increasingly talk about technological sovereignty as a way to protect against exploitation by China. Similarly, Asian nations are wary of China’s intentions when it seeks to cooperate.
Australia has been especially vocal about the threat posed by China’s rise, but others, too, have issued warnings. The Netherlands issued a policy for secure international collaboration. Sweden raised the alarm after a study showed how spies had exploited its universities.
Canada has created the Research Security Centre for public safety and, like the U.S., has established regionally dispersed advisers to provide direct support to universities and researchers. Canada now requires mandatory risk assessment for research partnerships involving sensitive technologies. Similar approaches are underway in Australia and the U.K.
Germany’s 2023 provisions establish compliance units and ethics committees to oversee security-relevant research. They are tasked with advising researchers, mediating disputes and evaluating the ethical and security implications of research projects. The committees emphasize implementing safeguards, controlling access to sensitive data and assessing potential misuse.
Japan’s 2021 policy requires researchers to disclose and regularly update information regarding their affiliations, funding sources – both domestic and international – and potential conflicts of interest. A cross-ministerial R&D management system is unrolling seminars and briefings to educate researchers and institutions on emerging risks and best practices for maintaining research security.
The Organisation for Economic Co-operation and Development keeps a running database with more than 206 research security policy statements issued since 2022.
Emmanuelle Charpentier, left, from France, and Jennifer Doudna, from the U.S., shared the Nobel Prize in chemistry in 2020 for their joint research.
Miguel RiopaI/AFP via Getty Images
Openness waning
Emphasis on security can strangle the international collaboration that drives scientific progress. As much as 25% of all U.S. scientific articles result from international collaboration. Evidence shows that international engagement and openness produce higher-impact research. The most elite scientists work across national borders.
Even more critically, science depends on the free flow of ideas and talent across borders. After the Cold War, scientific advancement accelerated as borders opened. While national research output remained flat in recent years, international collaborations showed significant growth, revealing science’s increasingly global nature.
The challenge for research institutions will be implementing these new requirements without creating a climate of suspicion or isolation. Retrenchment to national borders could slow progress. Some degree of risk is inherent in scientific openness, but we may be coming to the end of a global, collaborative era in science.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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