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Putin and Xi: Beijing Belt and Road meeting highlighted Russia’s role as China’s junior partner

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The recent Belt and Road Forum in Beijing saw decreased attendance from world leaders, highlighting geopolitical tensions. Vladimir Putin emphasized Sino-Russian cooperation, but trade imbalances reveal Russia’s subordinate role.

The third Belt and Road Forum held in Beijing recently attracted fewer heads of state or senior officials than the previous forums in 2017 and 2019. There were 11 European presidents and prime ministers at the 2019 forum. But last week’s forum attracted only three.

This is understandable, given that the two-day meeting took place against the backdrop of high tension in the Middle East caused by the conflict between Israel and Hamas as well as the war in Ukraine – both wars which have highlighted differences in views on regional and global order between the west and a number of non-western countries.

One enthusiastic participant was the Russian president, Vladimir Putin. For Putin, the forum provided an opportunity to meet other leaders without fear of arrest, given his indictment by the International Criminal Court for war crimes which had kept him away from September’s Brics summit in South Africa.

While Putin was just one among 20 or so world leaders at the Forum, he was photographed at Xi Jinping’s right hand and given a prominent place in proceedings. Delivering a speech at the forum immediately after the Chinese president and staging a press conference for the Russian media before boarding the plane to Moscow, Putin attempted to convey the message of tight cooperation with China.

He was keen to remind his audience of Russia’s credentials as a UN security council member, together with China, responsible for the maintenance of international peace and security. He also noted that he and Xi had discussed both the situation in Gaza and the events in Ukraine, describing these situations as “common threats” which strengthen Sino-Russian “interaction”.

Putin drew particular attention to the high bilateral trade volume between Russia and China, which has reached nearly US$200 billion (£163 billion). This sounds impressive until you remember that the bulk of this trade consists of export of Russian hydrocarbons and other raw materials to China. This is nothing new – in fact trade in hydrocarbons between Russia and China have been boosted by western sanctions.

Perhaps the most instructive aspect of the visit was Putin’s explicit acknowledgement of the different roles played by Moscow and Beijing in international politics. Putin described the Russia-dominated Greater Eurasian Partnership (GEP) – a concept Moscow has promoted as a response to the Belt and Road Initiative (BRI) that would fuse the Eurasian Economic Union with the BRI – as a regional or “local” project. Meanwhile he happily described the BRI as “global” in scale.

For the past decade, Russian policymakers and experts have consistently held up the GEP as symbolising Russia’s equality with China. Russian foreign minister Sergei Lavrov has described it as “the creation of a continent-wide architecture”.

Putin’s words, coupled with the lack of any meaningful results of the meeting (bar a contract on food and agricultural products which has yet to be confirmed by Beijing), illustrate the extent to which Russia’s war against Ukraine has deepened the asymmetry between the two powers.

Holding back?

The lack of genuine progress on the issue of the Power of Siberia-2 pipeline, which will transport gas from Russia’s Yamal gas fields, which used to supply Europe, via Mongolia to China, was further evidence of this asymmetry. Xi was kind enough to express hope that the project could proceed quickly. But he did not outline any concrete steps in that direction.

China’s agreement, if confirmed by a contract, would have been the most clear signal of Beijing’s strategic support for Russia, especially given Gazprom’s shrinking European market. By prolonging negotiations, China seems to be trying to extract specific concessions from Russia, related to the price of gas, possible Chinese ownership of gas fields in Russia, or Beijing’s acquisition of shares in Gazprom.

Meanwhile, in May 2023, China revived the prospect of building the so-called section “D”, enlarging the capacity of the Central Asia-China gas pipeline system, which will bring gas from Turkmenistan via Kyrgyzstan and Tajikistan to China, emphasising China’s other sources of energy supplies.

While continuing to offer Moscow political support and not interfering with Chinese companies’ attempts to take advantage of the exodus of western companies to increase their presence in the Russian market, Beijing has clearly attempted to prevent any embarrassment related to Russia. A gas contract would have overshadowed the BRI summit and generated a strong reaction in the US and Europe, potentially strengthening China hawks in the west.

Beijing making its move

Putin’s delegation was full of ministers and CEOs of key Russian enterprises, from Rosneft and Gazprom to Novatek, so the conclusion of commercial agreements can’t be ruled out, but the probability is low. It is clear that Beijing does not want to be seen to be openly supporting Russia in resisting and bypassing western sanctions.

In the 1990s, Russian officials regularly warned of the dangers of becoming a “raw materials appendage” to China. Today the economic benefits that Russian elites gain from hydrocarbons mean this danger has now become a reality. Russia has locked itself into an economic partnership in which it is the supplicant, a role that Moscow seems happy to play.

But the BRI is not just about economics. It is also a key part of Beijing’s bid to project itself as a “global responsible power”. Beijing has recently outlined what it calls its “Global Security Initiative” which explicitly rejects the Western rules-based order. This comes alongside a “Global Development Initiative” and, nested within these, a “Global Civilisation initiative”. Taken together these question western universalist ideas about human rights and democracy.

China’s thinking has gained traction among many countries of the global south, providing a developmental path without lectures on human rights. China speaks to these countries using its dual identity as both a rapidly developing power and a member of the UN security council. By comparison, notwithstanding its security council position, Russia has few tangible benefits to offer these countries. Last week’s BRI forum has driven this point home.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

China

China’s FDI Trends for 2024: Major Sources, Destinations, and Industries

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Despite a 13.7% decline in FDI inflows to $163 billion in 2023, China remains a strong magnet for foreign capital, holding a 12.3% global share. Early 2024 shows recovery, with increased foreign investment in high-tech and services sectors.


Despite a challenging environment, including a significant downturn in 2023, where FDI inflows fell by 13.7 percent to US$163 billion following a 4.5 percent growth in 2022, China remains resilient in attracting foreign capital. This decline was attributed to several factors, including an uneven post-COVID economic recovery, ongoing geopolitical tensions, regulatory uncertainties, and stringent capital control measures.

According to the recently released Statistical Bulletin of FDI in China 2024, China’s FDI scale remained stable in 2023, with a 12.3 percent share of global cross-border direct investment, marking the fourth consecutive year exceeding 10 percent.

Encouragingly, the first nine months of 2024 have demonstrated signs of recovery, with China attracting RMB 640.6 billion (US$90.26 billion) in foreign investment. Notably, there has been an 11.4 percent increase in new foreign-invested enterprises (FIEs), with high-tech manufacturing, medical equipment, and professional technical services experiencing substantial growth in foreign capital utilization.

These trends signal a shift towards innovation and services, underscoring ongoing investor interest in China’s dynamic market.

In this article, we explore the key trends and government initiatives shaping China’s FDI landscape, providing insights for businesses seeking to navigate and capitalize on opportunities in the world’s second-largest economy.

In 2023, China’s FDI landscape demonstrated a strong concentration across various industries, underscoring the country’s continued appeal to international investors. The primary sectors attracting foreign capital included:


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 ChinaHong KongVietnamSingapore, and India . Readers may write to info@dezshira.com for more support.

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China

Why China now wants to put some limits on its ‘no limits’ friendship with Russia

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China’s “no-limits friendship” with Russia is evolving amid war scrutiny. Growing skepticism about Russia’s stability, economic dependencies, and differing international outlooks prompt China to reconsider its alignment with Moscow.

Just before Russia’s invasion of Ukraine, China announced to much fanfare a “no-limits friendship” with Russia, suggesting a future of close collaboration in trade, energy and, perhaps most importantly, security.

Now, more than two years into the war, the meaning and interpretation of this “no-limits” commitment has evolved.

There has been much debate in Chinese society in recent months about Beijing’s alignment with Moscow. While some have advocated for a more formal alliance with Russia, others have taken a more cautious stance.

In sharp contrast to 2022, China’s growing wariness is increasingly being discussed in the open, even among those who were previously censored. In early 2022, for instance, a joint letter by six Chinese emeritus historians opposing Russia’s invasion was censored by the government. The scholars were also warned.

Now, however, it appears the government is seeking to balance its relationships with both Russia and the West. Beijing may not want to be seen as a “decisive enabler” of the war.

For example, the once-prominent “no-limits” friendship language quietly vanished from a Sino-Russian joint statement in May.

And Beijing’s response to Russian President Vladimir Putin’s visit that month was notably subdued. Putin ingratiated himself with Xi, saying they were “as close as brothers”. Xi’s response was more perfunctory – he called Putin a “good friend and a good neighbour”.

When they met in May, Xi was less effusive towards Putin than he has been in the past.
Sergei Bobylev/Pool Sputnik Kremlin/AP

Scholars are also articulating their concerns about China’s political and economic investments in Russia, both publicly and privately.

Shen Dingli, a leading scholar of Chinese security strategy at Fudan University in Shanghai, said China doesn’t want to be seen as collaborating with Russia against Ukraine or any other country.

He also quoted Fu Cong, China’s former ambassador to the European Union, who said last year the “no-limits” [friendship] is “nothing but rhetoric”.

And in August, after Putin referred to China as an “ally” during a visit to far-eastern Russia, Chinese scholars promptly sought to clarify this statement to prevent any misunderstanding China wants a formal alliance with Russia.

These statements carry weight. In many respects, leading Chinese scholars at the government-affiliated universities act as propagandists to convey and justify the government’s stance on issues. As a result, subtle shifts in their commentary provide insights into the strategic mindset in Beijing.

Why China is rethinking its ‘no-limits’ friendship?

There are three elements driving this re-evaluation of the Russia-China alignment.

First, there is growing scepticism of Russia’s state capacities. The mutiny by the Wagner Group last year and Ukraine’s recent incursion into Russia’s Kursk region have prompted critical reassessments in Beijing of Russia’s political stability and military preparedness, as well as the growing anti-war sentiment in Russia.

As Feng Yujun, director of Fudan University’s Russia and Central Asia Study Centre, argued, the Wagner rebellion was a reflection of Russia’s internal conflicts and domestic security challenges. He noted every time Russia has faced both internal and external crises in history, its regimes have become less stable.

More recently, Feng has been even bolder, predicting Russian defeat in Ukraine. He argued China should keep its distance from Moscow and resume a policy of “non-alignment, non-confrontation and non-partisanship”.

Second, China’s sluggish economy and its underwhelming trade with Russia have further exposed how dependent both countries are on the West.

While Russia-China trade reached a record US$240 billion (A$360 billion) in 2023, it has slowed so far this year, as Chinese financial institutions have sought to limit connections with Russia.

The relationship still heavily favours Beijing. Russia accounts for only 4% of China’s trade, while China accounts for nearly 22% of Russia’s trade.

Many Chinese experts are now warning against an over-dependence on Russia, instead calling for more cooperation with neighbouring countries. This echoes a recent concern Russia has been using its natural resources as a bargaining chip to extract greater benefits from China.

Russia’s value as a military ally

Finally, there are rising Chinese concerns its international outlook does not align with Russia’s.

Zhao Long, deputy director of the Shanghai Institute of International Relations, says there is an important difference in how they view the world:

Russia wants to destroy the current international system to build a new one. China wants to transform the current system by taking a more prominent place in it.

Shi Yinhong, a strategist at Renmin University in Beijing, has highlighted an unbridgeable gap preventing a stronger China-Russia alliance. He says there’s a deep mutual mistrust on regional security. Russia has never promised support for China in the event of a conflict over Taiwan, just as China has avoided involvement in the war in Ukraine.

As Russia’s war in Ukraine reaches a stalemate, its value as a military ally is increasingly being questioned in China.

Recently, Feng Yujun warned China risks being led by the nose by Russia, despite being the stronger economic partner. He says every time China has attempted an alliance with Russia in history, it has had negative consequences for China.

Consequently, it is crucial for China to maintain its long-term partnership with Russia without undermining its constructive relationship with the West.

Russia has arguably benefited from the current competition between the US and China, as it has sought to exploit the rivalry for its own benefit. But this has also led to uncertainty in the China-Russia relationship.

As another analyst, Ji Zhiye, argues, relying too heavily on Russia will leave China isolated and vulnerable. And this is not a position China wants to be in.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Business

AstraZeneca Stock Declines Amid Reports of Possible Probe Fallout in China – Reuters

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AstraZeneca shares declined following reports of potential repercussions from a probe in China, highlighting concerns over regulatory scrutiny and its impact on the company’s operations and financial performance.


AstraZeneca Under Scrutiny

AstraZeneca faces potential fallout from a reported investigation in China, leading to a noticeable decline in its share price. Investors reacted sharply to the news, reflecting concerns over possible regulatory pressures that could impact the pharmaceutical company’s operations in the region. The drop in shares has prompted analysts to scrutinize the implications of this development for the company’s future prospects.

Market Reactions

The market’s immediate response indicates significant unease among shareholders as they weigh the risks associated with the potential probe. Financial analysts suggest that if the investigation leads to strict regulations or penalties, AstraZeneca could face challenges in maintaining its market position. This uncertainty highlights the fragile nature of investor confidence in the pharmaceutical sector, particularly in international markets like China.

Future Implications

As AstraZeneca navigates this turbulent situation, it remains to be seen how the investigation will unfold and what direct impact it will have on the company’s strategic direction. Keeping a close eye on the developments will be crucial for stakeholders. The pharmaceutical giant’s ability to respond effectively to these challenges will determine its future stability in the competitive global market.

Source : AstraZeneca shares fall on report of potential China probe fallout – Reuters

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