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China’s crucial role in #APEC

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In 1994 the Bogor goals were established in APEC with the aim to achieve by 2020 an area of free trade and investment among all member economies, but within three years of that date, it will be difficult to reach that objective. That is why some years ago the idea of having a Free Trade Area of the Asia Pacific, or FTAAP, was proposed, and in the 2014 APEC Leaders’ Summit in Beijing, at China initiative, a study on how to achieve that was launched, writes Professor Carlos Aquino Rodriguez of San Marcos National University, Peru.

In the 2016 APEC Leaders’ meeting in Lima, Peru, the study was presented. It recommended that member economies should continue to work towards eliminating barriers to trade and investment, facilitate business and encourage cooperation, and to work in the existing efforts by regional groups, like the TPP and RCEP, to have a broad Free Trade Area of the Asia Pacific.

But after the 2016 APEC Leaders’ summit the environment surrounding members´ economies efforts towards a free and open system of trade and investment changed with the election of a new administration in the USA. This country, that was the main one pushing for the TPP agreement, supposed one of the pillars of the future FTAAP, decided to withdraw from the TPP, preferring bilateral to multilateral trade negotiations, and assume an attitude of isolating itself of the APEC members aim to have an open system of trade and investment.

Giving that situation, and the fact that China is the most important member of APEC in terms of economic weight, and the main engine of growth in the world economy, China role in APEC should become bigger. How can this be achieved? Below are some proposals for that.

With the withdrawal of the USA the TPP scheme weakened, but now under the leadership of mainly Japan and Australia, a TPP with eleven members is being pushed up. Another round of negotiations for this TPP11 agreement has just finished in Tokyo and its members hope to conclude a deal by the coming 2017 APEC Leaders’ Summit in Vietnam. As said before, the other pillar of the FTAAP is supposed to be the RCEP, but negotiations are not advanced as desired and an agreement will be not achieved this year. China, as the biggest economy in this group should assume a leadership role in the RCEP. How? USA could attract countries with the incentive of access to its big market. China could do also the same in the RCEP, as its economy is increasing in its size and becoming more attractive. Opening China economy more is also one objective of its economic reforms as it will give its consumers access to a wider variety of goods and services and will encourage its companies to be more competitive

China could work within the mechanism of the Economic and Technical Cooperation (ECOTECH) scheme in APEC, where more advanced member economies give cooperation and technical advice to other members in several fields. China has already achieved advances in several areas where could give that cooperation, as in the following:

Environment protection: China still suffers environmental contamination in some cities and at certain periods of the year, and because of that it is becoming the world leader in technologies to replace fossil fuels, such as solar panels, wind power, electric cars, etc. China can give technical advice and co-operation to other member economies in this field, as this is a common problem, especially for the less advanced economies.

Achieving food security is one of the main priorities in APEC, and is one of the four priorities that Vietnam has for this 2017 APEC year having putting it as “enhancing food security and sustainable agriculture in response to climate change”. In this case China is also making great contributions. It is already a big achievement that China can feed a fifth of the world population with less than 7% of available land. Not only that, recently Chinese scientists had made possible to grow rice in salty waters. The increasing presence of saline and alkaline soil in arable land areas is a growing problem in many countries, and this achievement by Chinese scientists will be of great help to many people in the APEC region, especially in Asia where rice is still the main dish.

The development of human resources is a question of the utmost importance in the APEC member economies and is a priority issue in ECOTECH agenda. China has also achieved great advances in this field as has been show by the upgrading of its industry, having transformed from being mainly a producer of cheap goods using unskilled labor to becoming more and more a producer of high value added goods using skilled labor. China investment in education and on research and development is allowing this, experience that could share with other less developed APEC member economies.

The lack of physical infrastructure (roads, seaports, railways, power grids, etc.), that makes connectivity difficult to achieve is a problem for many APEC members, and its solution will facilitate trade and business in the region. In this regard the Chinese initiative of Belt and Road is a proposal that should be promoted in the APEC fora. China has the experience, the technology, the companies, the human and the financial resources to contribute with APEC economies in solving that problem and building the needed infrastructure. But the question of facilitating business in the region is not only a question of building physical infrastructure but also of promoting a payment system to increase online shopping and a cashless economy. In this regard China is the most advanced country in the world providing a system of mobile payments with its Alipay o Wechat Pay Schemes.

More than half of China's population already use this system, making it easier for business and people, and allowing millions of small businesses (including grocery stores, and taxis drivers for example) to do business just with their mobile phones. China should promote this technology and system payment in the APEC member economies.

The fight to corruption is also an important issue in APEC agenda. China fighting the corruption at all levels is showing how when a government has the willingness to carry on it could achieve success. China experience in this field could also be shared with other member economies.

Lastly, but not of the least importance, is the fact that China economy should continue growing and continue being the main engine of the world economy. Also it should continue its economic reforms and open more its economy. China importance in APEC could not be underestimated as it is already the biggest trade partner for most of its members (except of Mexico, Canada and perhaps another economy), is the main investors in many of them, the one that send most of the tourists (except to the economies of the American side of the Pacific), and most of its members will directly benefit from its One Belt One Road (OBOR) initiative.

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Despite talk of digital sovereignty, Europe sleepwalks into Chinese dominance on drones

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In her State of the European Union speech, European Commission President Ursula von der Leyen delivered a clear-eyed assessment of the European Union’s position within the global digital economy. Alongside predictions of a European “digital decade” shaped by initiatives such as GaiaX, von der Leyen admitted Europe had lost the race on defining the parameters of personalized data, leaving Europeans “dependent on others”, writes Louis Auge.

Despite that straightforward admission, the question remains whether European leaders are willing to mount a consistent defence of their citizens’ data privacy, even as they accept reliance on American and Chinese firms. When it comes to challenging American social media or e-commerce giants like Google, Facebook, and Amazon, Europe has no problem seeing itself as the global regulator.

In facing China, however, the European position often seems weaker, with governments only acting to curb the influence of Chinese technology suppliers such as Huawei under intense US pressure. Indeed, in one key area with serious implications for several economic sectors Commission President von der Leyen cited in her speech – unmanned aerial vehicles, otherwise known as drones – Europe is allowing a single Chinese firm, DJI, to corner the market practically unopposed.

A trend accelerated by the pandemic

Shenzhen Dajiang Innovation Technologies Co. (DJI) is the unquestioned leader of a global drone market predicted to skyrocket to $42.8 billion in 2025; by 2018, DJI already controlled 70% of the market in consumer drones. In Europe, DJI has long been the unmanned aerial vehicle (UAV) supplier of choice for military and civilian government clients. The French military uses “commercial off-the-shelf DJI drones” in combat zones like the Sahel, while British police forces uses DJI drones to search for missing persons and manage major events.

The pandemic kicked that trend into high gear. In European cities including Nice and Brussels, DJI drones equipped with loudspeakers admonished citizens about confinement measures and monitored social distancing. DJI representatives have even tried to convince European governments to use their drones to take body temperatures or transport COVID-19 test samples.

This rapid expansion in the use of DJI drones runs counter to decisions being taken by key allies. In the United States, the Departments of Defense (the Pentagon) and the Interior have banned the use of DJI’s drones in their operations, driven by concerns over data security first uncovered by the US Navy in 2017. In the time since, multiple analyses have identified similar flaws in DJI systems.

In May, River Loop Security analyzed DJI’s Mimo app and found the software not only failed to adhere to basic data security protocols, but also that it sent sensitive data “to servers behind the Great Firewall of China.” Another cybersecurity firm, Synacktiv, released an analysis of DJI’s mobile DJI GO 4 application in July, finding the company’s Android software “makes use of the similar anti-analysis techniques as malware,” in addition to forcibly installing updates or software while circumventing Google’s safeguards. Synacktiv’s results were confirmed by GRIMM, which concluded DJI or Weibo (whose software development kit transmitted user data to servers in China) had “created an effective targeting system” for attackers – or the Chinese government, as US officials fear – to exploit.

To address the potential threat, the Pentagon’s Defense Innovation Unit (DIU) has introduced a small Unmanned Aircraft Systems (sUAS) initiative to procure drones from trusted American and allied manufacturers; France’s Parrot is the only European (and, indeed, non-American) firm currently included. Last week, the Department of the Interior announced it would resume purchasing drones through the DIU sUAS program.

DJI’s security flaws have also sparked concern in Australia. In a consultation paper released last month, the Australian transport and infrastructure department flagged weaknesses in Australia’s defenses against “the malicious use of drones,” finding UAVs could potentially be used to attack the country’s infrastructure or other sensitive targets, or otherwise for purposes of “image and signals gathering” and other types of reconnaissance by hostile actors.

In Europe, on the other hand, neither the European Data Protection Board (EDPB), the German Federal Commissioner for Data Protection and Freedom of Information (BfDI), nor the French National Commission on Informatics and Liberty (CNIL) have taken public action on the potential dangers represented by DJI, even after the company’s products were found forcibly installing software and transferring European user data to Chinese servers without allowing consumers to control or object to those actions. Instead, the use of DJI drones by European military and police forces may appear to offer consumers a tacit endorsement of their security.

Despite an opaque ownership structure, links to Chinese state abound

Suspicions of DJI’s motives are not helped by the opacity of its ownership structure. DJI Company Limited, the holding company for the firm via the Hong Kong-based iFlight Technology Co., is based in the British Virgin Islands, which does not disclose shareholders. DJI’s fundraising rounds nonetheless point to a preponderance of Chinese capital, as well as linkages with China’s most prominent administrative bodies.

In September 2015, for example, New Horizon Capital – cofounded by Wen Yunsong, son of former premier Wen Jiabao – invested $300 million in DJI. That same month, New China Life Insurance, partly owned by China’s State Council, also invested in the firm. In 2018, DJI may have raised up to $1 billion ahead of a supposed public listing, although the identify of those investors remains a mystery.

DJI’s leadership structure also points to links with China’s military establishment. Co-founder Li Zexiang has studied or taught at a number of universities linked to the military, including the Harbin Institute of Technology – one of the 'Seven Sons of National Defence' controlled by China’s Ministry of Industry and Information Technology – as well as the National University of Defense Technology (NUDT), directly supervised by the Central Military Commission (CMC). Another executive, Zhu Xiaorui, served as DJI’s head of research and development up until 2013 – and now teaches at the Harbin University of Technology.

These links between DJI’s leadership and China’s military would seem to explain DJI’s prominent role in Beijing’s repression of ethnic minority groups. In December 2017, DJI signed a strategic partnership agreement with the Bureau of Public Security of the Autonomous Region of Xinjiang, outfitting Chinese police units in Xinjiang with drones but also developing specialized software to facilitate missions for the “preservation of social stability.” DJI’s complicity in the campaign of “cultural genocide” against the Uighur population of Xinjiang burst into the headlines last year, when a leaked video – shot by a police-controlled DJI drone – documented a mass transfer of interned Uighurs. The company has also signed agreements with authorities in Tibet.

An inevitable crisis?

While DJI has gone to considerable efforts to counteract the findings of Western governments and researchers, even commissioning a study from consultancy FTI that promotes the security of its new “Local Data Mode” while sidestepping existing flaws, the monopolistic control of this emerging sector by a single firm with links to China’s security establishment and direct involvement in systemic human rights abuses could quickly become a problem for regulators in Brussels and the European capitals.

Given how prevalent drones have become across the wider economy, the security of the data they capture and transmit is a question European leaders will have to address – even if they prefer to ignore it.

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European Union and West urged to take action against Chinese 'genocide' of Uyghurs

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The international community has been urged to respond to the “genocide” being perpetrated by the Chinese regime against the country’s Uyghurs and take “concrete action”.

An event in Brussels was told that up to 3 million Uyghurs are held in Nazi-style “concentration camps” with “insidious” pressure also being applied on those who try to champion the rights of the Uyghur community in China.

Many companies still do business with China and pretend the reported horrors against Uyghurs “is not happening” and Beijing is “not held accountable” for its actions.

Branding the current situation as a “genocide”, Rushan Abbas, a Uyghur activist, even drew a comparison with the Holocaust in WW2, saying, “history is repeating itself”.

In a passionate plea, she said: “China must be held accountable for these unspeakable crimes. If we don’t it will affect all our futures.”

Abbas was speaking at a virtual debate on the issue on 13 October, organized by The European Foundation for Democracy, in cooperation with the U.S. Embassy to Belgium and the US Mission to the EU.

New evidence of China’s persecution of the Uyghurs, its 12 million strong “minority” in the Xinjiang Uyghur Autonomous Region, continues to emerge with reports of torture, forced labour, coercive family planning (including forced abortion and forced sterilization), sexual assault, and attempts to “Sinicise” the exercise of the Islamic faith.

China’s repressive policies and so-called “re-education centres” are described as being like ethnic cleansing and gross violations of human rights targeting its own Muslim population.

Rushan Abbas, founder and Executive Director of Campaign for Uyghurs, began with a quote from a Holocaust survivor, adding, “here we are in the modern age and the most brutal side of human nature is manifesting itself again. You would hope the world would learn from its mistakes but the international community is failing its own conscious.

“The world, after WW2, said ‘never again’ but again a regime is  waging a war on freedom of speech and religion. The Chinese call the Uyghur religion a  disease and say they don’t have human rights and what is happening is a dangerous ideology that will spread with even more people being brutalized.”

“There are 3 million Uyghurs in concentration camps, with crematoria attached. My own sister, a retired doctor who was abducted from her home, is among them.  Artists, intellectuals and successful businessmen are included.  More than two years later I still do not know if she is still alive. Where is my sister? Where are our loved ones?  Will no one call out the Chinese regime?”

She added: “The world continues to buy the Chinese narrative on this genocide. At first China denied the camps existed then, when they had to accept they did, they called them “schools,” and said the world should not interfere.

“But it is not China’s internal issue and the world must intervene.The West is complicit in massed rape, forced marriage and abortion, sterialisation, child abduction and organ harvesting and conducting genocide against Uyghurs. These crimes by a barbaric regime against humanity must be addressed. China’s blood money has won the compliance of the UN and the international community which has failed to stand up to China and its money.”

She suggested that ordinary people can take proactive action by speaking with their local mayors and politicians along with grassroots organizations. They should, she argued, also boycott Chinese products “made from slave labour”.

The coronavirus crisis has brought further suffering as they have been “denied treatment and locked in their homes without food”.

Vanessa Frangville, director of the Research Center for East Asian Studies, ULB, told the meeting: “We know that China resorts to all sorts of strategies to attack academics who speak out including being condemned to life sentences and this is happening to Uyghur academics.

"There are several who have vanished or sentenced to death and that includes Uyghurs living outside China in countries like Turkey.

“The regime also pressurizes scholars who work on the Uyghur situation which forces them to stop their work because they are worried. For example, my university published a public motion to support Uyghurs and the ULB president got an angry letter from the Chinese embassy who sent representatives to meet him and to demand that he remove the motion and my articles from the ULB website. They warned that further collaboration with our Chinese partners could be impacted if we refused.

“They also asked for information on Chinese students at ULB. This is typical of the intimidation by the Chinese. If you complain about such pressure they just mention ‘China bashing.’ Increasingly, this is typical of our situation as scholars who work on the Uyghur crisis. We have to be aware of these sort of insidious things and should not accept it.”

She admitted some universities still work closely with China because they fear that a collapse in collaboration, angry letters or even threats against colleagues in China.

She said: “You try not to let it affect your work but at some point you have to make a choice between speaking out or not. The same goes for the EU. If, for example, Spain or France speaks out and is not backed up by other member states it will be isolated. This is another Chinese tactic.”

On what action might be taken she cited the example of France where she said 56 national MPs had been “mobilised” to support Uyghurs, saying “this is important”.

“China is leading a misinformation campaign and it is important for people to distance themselves from this.”

 

Further comment came from Ilhan Kyuchyuk, an MEP and Vice President of the ALDE Party, who said, “We have seen enough of what is going on in the region and things are getting worse.”

 

The deputy, who has worked on the issue for some time and helped draft a parliamentary resolution last year on the Uyghur situation, added, “Europe is not united or consistent. We have to move this matter to the centre of EU debate. I know it is not easy to deal with China but we have to be more vocal and strengthen cooperation on this. Let us support the voice of voiceless people. Europe needs to act on this.”

He said the Uyghur issue was addressed at a recent EU/china summit but said: “Much needs to be done as the situation is deteriorating.”

“The dialogue has not resulted in any meaningful change by the Chinese. It is obvious the EU must act to protect the fundamental rights of the Uyghurs. We must speak out against this unacceptable repression against minorities for ethnic and religious reasons.”

In a Q and A session, he said: "The EU is much more aware of this issue compared with four or five years ago when they did not talk about the Uyghurs. There are no easy answers in how to deal with this though but the EU must get rid of the unanimity rule which requires member state agreement on acting against authoritarian regimes. The problem is at member state (council) level which must come up with a common approach when it comes to China.”

He added: “I am not saying we should sit and wait but to counter this problem you need a strategy and a holistic approach. It is easy for a great power like China to buy a member state. We will get nowhere if we deal with this persecution against the Uyghur minority and China’s counter narrative at member state level alone and that is why we need a European strategy.

He also suggested an EU version of the Magnitsky Act might be useful in its dealings with China.

This is a bipartisan bill passed by the U.S. Congress and signed into law by President Barack Obama in December 2012, intending to punish Russian officials responsible for the death of Russian tax lawyer Sergei Magnitsky in a Moscow jail.

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EU and China co-operation in research and science is vitally important – in the delivery of economic development.

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The EU-China Business Association (EUCBA) today held a highly successful and interactive webinar. The subject under discussion was on the importance of research and science co-operation in the delivery of economic recovery.

Gwenn Sonck the executive director of the EUCBA explained that “the EU-China Business Association promotes trade and investment between the EU and China and vice-versa.

It unites 19 Chinese business associations from 19 different countries in Europe, representing over 20,000 companies. This webinar is timely because both the EU and China are prioritising investment into research and science. Such investment accounts for 2.5% of Chinese GDP while the EU target for investment in research under Horizon Europe is 3%. The innovation co-operation dialogue that is taking place between the EU and China at this time will also set the framework conditions for this future bilateral relationship.”

 

Frances Fitzgerald MEP is a member of the European Parliament–China delegation and she is a former deputy Prime Minister from Ireland.

She said that “the research, science and innovation sectors are totally inter-linked. Countries and companies cannot do all the research on their own.

International collaboration is a key element in the delivery of new innovative products and solutions. This is particularly the case when the world is seeking to find a vaccine against Covid-19. Researchers from all over the world must work together to find a secure and trustworthy Covid-19 vaccine.

Openness, transparency, reciprocity and a rules based approach to international trade must underpin the EU-China relationship. But there is clearly a challenging geo-political environment. We are at a crossroads with regard to the EU-China relationship and EU leaders will meet on November 16th next to review EU-China relations.

455 Chinese companies took part in the Horizon 2020 research, innovation and science programme during the period 2014-2020. Chinese companies will continue to participate in Horizon Europe which is the new research, innovation and science framework programme that will run between the period 2021-2027.”

 

Zhiwei Song is the President of the EU-China Association for innovation and entrepreneurship. He said that “his association is supporting incubators and it is bridging the knowledge gap between the EU and China and between China and the EU.

His organisation is also organising online presentations to promote research mobility from the EU to China and vice-versa. It is participating in European Commission supported programmes such as Enrich and Euraxess. The former initiative furthers research co-operation between Europe and China while the later scheme promotes scientific collaboration in an international context.”

 

Abraham Liukang is the chief representative for Huawei to the EU institutions.

He said “Don’t believe all the press headlines. Huawei is no stranger to Europe. Huawei has been based in Europe for over 20 years.

Huawei has 23 research centres in Europe and we employ 2,400 researchers in Europe, 90% of whom are local hires. Huawei has been an active participant in research projects under the Horizon 2020 research, innovation and science programme 2014-2020.

Huawei has 230 technology agreements with research institutes in Europe and we have partnerships with over 150 universities in Europe.

Abraham Liukang is the chief representatve for Huawei to the EU institutions.

Abraham Liukang is the chief representative for Huawei to the EU institutions.

Our engagement in Horizon 2020 related to research into improving the quality of digital infrastructure and this included 5G and big data research.

The roll-out of 5G has been politicised and this has had the direct effect of slowing down 5G deployment in Europe.

Huawei takes security issues very seriously and that is why Huawei has a cyber-security evaluation centre in the UK and we have an agreement on security isssues with BSI in Germany.

Huawei wants to engage actively in Horizon Europe and in particular in building the smart networks and services of the future.

Over the next 5 years, Huawei plans to invest 100 million euro into our AI eco-system programme in Europe, helping industry organisations, 200,000 developers, 500 ISV partners and 50 universities. Huawei will work with our partners to shape the AI industry in Europe.”

 

Veerle Van Wassenhove is the Vice-President for R&D and Innovation at Bekaert, a globally leading company with headquarters in Belgium and a strong research foothold in China. She said that “Bekaert’s research operations in China leverage the company’s global innovation capabilities. Together, we are building expertise for both the Chinese market and globally. Covid-19 brought along some difficulties because we, as researchers, want to keep direct contact with our customers in our technology approach, but we manage.”
 
Yu Zhigao is the SVP Technology Rubber Reinforcement and head of the Bardec (R&D center in China). He said that “Bekaert has very strong confidence in China. There is excellent research and technical expertise in China. The company operates 18 sites in 10 cities in China and employs 220 researchers in the Jiangyin R&D center and 250 engineers and technicians in the Engineering site. The Chinese operations contribute to both world class research actions and to achieving the strategies of the company. Our research teams in China create value for our customers.”

Jochum Haakma is the chairperson of the EU-China Business Association.

He said that “the new EU investment screening regulation has only come into force since last Sunday. This means that from now on EU member states will have to consult with Brussels when screening Chinese direct investment measures in strategic sectors. I believe that it would be a very positive development if China and the EU were to agree the terms of a new trade and investment treaty. This is a matter that both sides are actively engaged in at this time. EU leaders will be discussing this important issue too when they convene for their European Council meeting in mid-November.

But the reality is that we do live in a complex world – where trade, politics and security issues at times seem to be inter-linked.

The digital economy is growing faster than the global economy.

And increased activity within the digital economy is going to play a key role in driving economic growth in both Europe and in China. However, one cannot build a strong digital economy without a sound foundation. And this foundation is built by governments in Europe and in China investing strongly in research, innovation and science. It is through advances in both basic and applied sciences that will deliver the innovation that is driving positive change within society today.”

 

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