Axios China

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February 05, 2020

Welcome to Axios China! If you're interested in exclusive scoops and big news about China's role in the world, this is the place for you.

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  • Smart Brevity count: 1,624 words, ~ 6 minutes.

1 big thing: A China-centric 21st century

Illustration of a hand painting a globe red.

Illustration: Aïda Amer/Axios

With the U.S. paralyzed by political gridlock and western institutions stagnating, China is positioning itself as the primary architect of new power structures in the 21st century.

Why it matters: If the U.S. continues to anger allies, withdraw from global institutions, and ignore much of the developing world, in 20 years it may wake up to find itself resigned to a small corner in a world defined and dominated by China.

Chinese President Xi Jinping's sweeping vision — the Belt and Road Initiative (BRI) — puts China at the commanding center of global economic and geopolitical relationships.

  • Individual countries — from Cambodia to Italy to Angola and in between — are now heavily reliant upon China for economic growth through BRI investments in infrastructure, trade, science and technology, and military projects.
  • Beijing is using that lever of power to influence their foreign policy and domestic decision-making.
  • The result: Chinese-led, largely opaque alternatives to Western-led institutions and global norms are emerging and drawing country after country into the new global framework.

Between the lines: The BRI is strengthened by Beijing's efforts to co-opt the World Bank and other institutions and to interfere in the politics of democratic countries like Taiwan and Australia.

  • Its ultimate goal is the "creation of an alternative world order," says Nadège Rolland of the National Bureau of Asian Research.

Beijing's strategy

1. The global economy: As the world's top exporter, Beijing economic heft is acutely felt.

  • Chinese state media stopped broadcasting NBA games after the Houston Rockets' manager tweeted in support of Hong Kong pro-democracy protesters, temporarily cutting off access to a massive market for the NBA.

2. Tech and telecommunications: Beijing views Huawei's position as global 5G leader as a key geopolitical strategy.

  • Britain just permitted the use of Huawei's equipment, the first key ally to defy U.S. efforts to block the company.
  • The concern is the Chinese government, which has close ties to Huawei, will have access to critical telecommunications infrastructure — useful not just for leverage over states but also mass data collection.
  • Meanwhile, Chinese tech companies are waging a steady campaign to set next-generation global tech standards, a feat likely to translate into market dominance and massive profits.

3. Scientific research: The Chinese government has poured hundreds of billions of dollars into R&D, with the aim of becoming a global tech superpower.

  • But China is also engaging in intellectual property theft, targeting U.S. research institutions and corporations.
  • And Chinese government-funded programs have sought to harness foreign expertise by paying sometimes lavish sums for researchers abroad to moonlight for Chinese research institutions, often without revealing these conflicting commitments to their home institutions.

4. Military: In October 2019, the U.S. House of Representatives created a bipartisan task force to assess America's ability to counter emerging threats.

  • Much of the group’s work has ended up focusing on China, Rep. Jim Banks (R-Ind.) told Axios in an interview.
  • China's military spending is on par with the U.S. and the two are approaching parity of power in East Asia, but China's military doesn't yet have the global reach of the United States.

The bottom line: China's power and leverage with nations around the world has reached a new level. Some of the Chinese-led power structures are obvious, some are hidden from view, but all are shaping the world on a grand and long-lasting scale.

2. China's leaders call for more censorship on coronavirus

Illustration of a hand in a suit hiding a virus

Illustration: Sarah Grillo/Axios

After a high-level meeting to address the deadly coronavirus, China's leaders have prescribed even tighter information controls around the outbreak.

Why it matters: The suppression of vital information about the coronavirus during its earliest weeks of transmission contributed to the devastating epidemic China is now facing.

Driving the news: In a Feb. 3 meeting, the Politburo standing committee called for authorities to "strengthen internet and media control."

  • “The outbreak is a major test of China’s system and capacity for governance, and we must sum up the experience and draw a lesson from it,” a meeting statement warned, per Bloomberg.

The early days of the epidemic marked a period of unusual openness for Chinese journalists to do high-impact reporting. Privately owned Chinese news outlets Caixin and Caijing published report after report documenting the victims and spread of the illness.

  • But that brief period has already shown signs of ending, as a spate of Chinese-language articles have now been removed, including a Feb. 1 Caijing article that claimed the number of cases and deaths was being underreported.

Go deeper: Here's a compilation of the best of Chinese media reporting over the past few weeks, archived and translated.

Bonus: The latest coronavirus numbers

Follow what's happening here.

3. Europe's loudest Huawei critic

Illustration of a warning sign featuring the Huawei logo

Illustration: Sarah Grillo/Axios

Britain will allow Huawei into its national 5G network. Germany may not be far behind. But one European country has unequivocally sounded the alarm on Huawei: the Czech Republic.

Why it matters: Europe's giants are having trouble resisting Chinese inducements to open their 5G networks to Huawei's less expensive equipment.

  • Despite its small economic footprint, the Czech Republic shows it's possible to turn back the tide of dependency on China.

Background: Just a few years ago, the central European country was heavily beholden to Chinese oil conglomerate CEFC China Energy, which had close ties to Beijing.

  • CEFC built up its stake in media and real estate across the country, and the CEFC chairman was named a personal adviser of Czech President Miloš Zeman, who supported Huawei's 5G bid and whose staff all used Huawei handsets.

But in December 2018, the country's cybersecurity agency, NÚKIB, issued a legally binding warning stating Huawei posed a security threat.

  • The surprise warning shocked the Czech government, including Zeman.
  • NÚKIB's warning, and CEFC's unexpected collapse after its chairman disappeared amid domestic political intrigue, brought about a reckoning over China's influence there.

Between the lines: "The strong Huawei position is part of a larger backlash in the Czech Republic," Martin Hála, a leading Sinologist in Prague, told me. The two European countries with the most unfavorable view of China were Sweden and the Czech Republic, according to a recent Pew Research survey.

  • That's because "both went through traumatic, but eye-opening episodes with their Chinese 'partners,'" Hála said.
  • Sweden has faced a lengthy diplomatic standoff over China's kidnapping of Swedish citizen Gui Minhai.
  • And Czech residents experienced China's thorough co-optation of the country's elites, only for it all to come crashing down after the fall of CEFC.

The bottom line: It was the superficial, and ultimately fragile, nature of Chinese economic investment in the Czech Republic that allowed a single rogue cybersecurity agency to push back so effectively against Huawei.

  • But "the U.K. and Germany are in a very different position," Hála said. Their economic engagement with China runs far deeper, so both have "much to lose if the relationship with China goes south."

4. FBI’s China tightrope

Federal Bureau of Investigation San Francisco Special Agent in Charge John F. Bennett speaks.

FBI special agent in charge John F. Bennett at a Sept. 30 news conference, announcing charges in a Chinese espionage case. Photo: Justin Sullivan/Getty Images

The U.S. government is trying to solve a difficult problem: How to protect scientific research from China-linked theft, without quashing international collaboration or resorting to racial profiling.

  • Working with the National Institutes of Health, the FBI last year launched a sweeping investigation into research institutions' links to China.

Driving the news: In one of the most high-profile cases to date, last week federal prosecutors charged Charles Lieber, chair of the Harvard University chemistry department, with lying about funds he obtained through a Chinese government recruitment program.

  • Lieber is a rare case of a non-Chinese person arrested for failing to disclose China ties.

A recent report proposes existing disclosure practices should be enough to address foreign influence in research, including problems with coercion and theft.

  • But the process of disclosure isn't standardized across agencies and institutions and can be unclear for researchers.
  • "Improving disclosure and transparency is probably the most important recommendation," Remco Zwetsloot of Georgetown's Center for Security and Emerging Technology said of the report from the JASON program at MITRE Corp.
  • "Universities and scientists are asking for clarification in guidance and standardization across the agencies."

The spate of investigations, largely of ethnic Chinese scientists and researchers, has raised fears that another era of race-based targeting may be nigh.

  • Former China correspondent Mara Hvistendahl reveals in her book "The Scientist and the Spy," out yesterday, that in the height of the Cold War the FBI spent years spying on Chinese scientists and students in the United States. Some lost their careers permanently without ever facing formal charges.

The bottom line: Law enforcement officials have to tread carefully to protect U.S. research and civil rights.

5. ICYMI: Stories from China's influence around the world

Each week, I'll highlight stories from all over the globe on China's influence. Today, the Scandinavia and Baltic states edition...

Sweden: A group of major media outlets condemned China's attacks on the Swedish media, the Guardian reports.

  • “It is unacceptable that the world’s largest dictatorship is trying to prevent free and independent journalism in a democracy like Sweden," Utgivarna, an association of Swedish publishers, said in a statement.
  • "These repeated attacks must cease immediately."

Lithuania: In a new threat assessment, the country's national security agency warned against “the malicious use of Chinese cyber capabilities in Lithuanian cyberspace.”

Finland and Estonia: "Foreign infrastructure can lead to political influence," says a new report from the Estonian Foreign Policy Institute on the Helsinki-Tallinn tunnel being built as part of China's BRI.

  • Other risks include technological dependence on Chinese expertise; debt risk that could lead to "non-financial concessions;" and dual-use infrastructure that the Chinese military could use as its security interests in the Baltic region grow.

6. 1 book thing: China's formidable spies

The front cover of the book Chinese Communist Espionage: An Intelligence Primer

Credit: U.S. Naval Institute

Chinese espionage hinges on a sophisticated network of spies focused on state-sponsored tech theft, according to a new book that dispels outdated theories of how Beijing collects intelligence around the world.

Between the lines: Research by co-author Peter Mattis, a former CIA counterintelligence analyst, has played a leading role in debunking the "thousand grains of sand" hypothesis.

  • That theory, popular among U.S. intelligence analysts during the Cold War, held that China lacked professional intelligence services and thus relied on ethnic Chinese civilians abroad to collect bits of intel for the motherland.
  • That hypothesis resulted in race-based targeting of Chinese-American scientists during the Cold War.
  • In reality, China's intelligence agencies employ highly trained professionals who operate much like spies from any other country.

But not everything China's spy agencies do is standard. "Other countries focus on stealing classified information," said co-author Matt Brazil. "The CCP pursues this standard espionage but also focuses on tech theft to benefit not only its military but also its state-owned enterprises."