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EU must learn from #ANZ mistakes in the #BogacOzdemir case with China

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The German government is rightly facing questions both from its politicians and from the European Union over its capitulation to China over Taiwan, removing the Taiwanese flag from the website of its Foreign Ministry and replacing it with a white square – the international symbol for surrender, writes Maria Murphy.

But it is not only German leaders who are coming under scrutiny for showing fealty to China.

The leadership of ANZ – Australia’s multinational bank which has offices across Europe – now find themselves under mounting pressure to explain their own appeasement of China linked to the Bogac Ozdemir case.

As governments and the private sector “bend the knee” to China in a short-term quest to appease relations, it is increasingly apparent to those familiar with diplomatic and security issues that a new Chinese iron curtain is rapidly descending across the globe. A new cold war is erupting which has already placed countries like Germany and enterprises like ANZ on the front line.

Bogac Ozdemir was the Singapore-based Global Head of Credit at Australia and New Zealand Banking Group (ANZ), and has been a senior and respected figure in banking for many years. Formerly the Global Head of US Dollar swaps trading at Barclays Plc in New York, he has also worked for BNP Paribas, Credit Agricole and Citigroup. However, all this changed when, while working at ANZ, he wrote in early March about the response to the COVID-19 crisis on LinkedIn stating that “we are all in this mess because of China and I don’t believe anything from there.”

In response, Mr Ozdemir was viciously attacked – both on Chinese and English language social media, and in several Chinese language media outlets – by hordes of “wumao” (Chinese nationalist internet trolls paid by Beijing to harass critics of the regime).

As is typical in modern memetic warfare, the bots and trolls quickly deployed the usual smear tactics, asserting that any criticism of the Chinese Communist Party is somehow a “racist” and “prejudiced” attack on the Chinese people as a whole.

ANZ immediately buckled in the face of such manufactured outrage, issuing a knee jerk statement that indirectly agreed with the party-line that Ozdemir’s criticism of the Chinese government was somehow a racial slur, claiming that the post “showed a distinct lack of judgement. In doing so, the bank’s board and executive unitedly promised a full inquiry.

For those in the know, there are suggestions that the Chinese financial regulator and the CEOs of other Chinese companies also lobbied ANZ behind the scenes, adding to the pressure to remove Mr Ozdemir. Before long, he was placed on “special leave” before ANZ promptly moved to fire him.

From the outset, ANZ seem to have acted not only as complicit co-conspirators in Beijing’s plot but they quickly became the proxies for a totalitarian regime increasingly attacking the security and wellbeing of Australia itself – not to mention Hong Kong, India or indeed its own internal minorities such as the Uighur peoples, who Amnesty International claim are facing genocide.

Such an approach as seen here is reminiscent of historical diplomatic policies of appeasement, all of which have inevitably resulted in not only a shortfall of respective governments’ driving objectives, but also catapulted them into all-out conflict with authoritarian regimes. Governments with tyrannical instincts and totalitarian goals are never content with a single pander from foreign parties to prevent confrontation; yielding to Chinese authorities risks the treatment of Bogac Ozdemir, and other capitulations happening across many global sectors, becoming the Munich Betrayal of our century, with subsequent events being potentially dire.

From the EU’s perspective, and no doubt the perspectives of NATO and SEATO, it is concerning that ANZ fell for such obvious and mendacious bullying tactics. There is rising concern that under CEO Shayne Elliott the bank’s security, communications and human resources defences simply crumbled. When push came to shove, ANZ was unable or unwilling to deal with the realities of being a major investor in what remains a communist state and the knock-on consequences of such a reality.

EU member states can get as tough as they want with China, but when inexperienced corporate leaderships are willing to throw their own star performers under an unsustainable bus to keep a totalitarian power sweet, what realistic expectation could there be that Europe’s corporate leaderships or organisations would fare any better? That when push comes to shove, the contradictions between all these organisations’ professed values and corporate social responsibility statements simply turn to dust.

It could be argued that ANZ is a special case as it is already so mired in scandal and intrigue that its submissiveness to China is simply just another regrettable step along a well-trodden path.

In 2019, ANZ had to take a $682 million hit to compensate customers it had ripped off over the previous decade. And in 2018, it was embroiled in a murky affair over allegedly forming a cartel to fix the price of its shares to keep them artificially high.

Not only do such scandals demonstrate that Australia’s Royal Commission into its banks has failed to get them to clean up their act, but they leave such corporations open to espionage and blackmail by an even more unscrupulous Chinese intelligence community.

It is in this context that some in Brussels are worried that weak, scandal-prone financial institutions like ANZ, not to mention HSBC and UBS, are themselves potential weak links in the West’s armoury against a bellicose China determined to throw its weight around in an ever more desperate quest for power.

It is no surprise that, as a US citizen, Bogac Ozdemir has reputedly been called in for recent meetings with senior advisors at the White House to discuss the problems raised by ANZ. While this may be one of the worst examples of abuse in recent months, it is not the only case that Washington, London and Brussels are aware of.

In an age increasingly struggling with Chinese and Russian information warfare, EU leaders are right to want citizens and employees to be able to exercise their democratic rights to free speech without employers giving in and becoming part of the problem.

In the face of Chinese and Russian aggression, many in Europe want greater solidarity in standing up for the rule of law, including the rights of employees. That is why now is the time for the EU to develop a comprehensive plan to take on China. To learn the lessons of Bogac Ozdemir’s experience with ANZ and others like it.

If the EU is going to take seriously its struggle against tyranny in an age of fake news and information hostility, it is going to have to make sure that the leaderships and practices of all organisations across the public, private and not-for-profit sectors do not fall into the traps set by the world’s worst tyrants.

For those major banks and corporations who do continue to invest in China and thereby run the risk of becoming twenty-first century Krupps or IG Farbens, they should at least be open, transparent and self-aware of what they are really about.

As with wealth, so it is with morality – there is no such thing as a free lunch.

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China-EU relations face challenges, Xi tells Germany's Merkel

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President Xi Jinping told German Chancellor Angela Merkel on Wednesday (7 April) that he saw “various challenges” in relations between China and the European Union and hoped the EU could “independently” make correct judgements, a Chinese government statement said, writes Michael Nienaber in Berlin.

The statement quoted Xi as saying during a phone call that the EU and China should respect each other and “eliminate interference”, adding that China is willing to work with the global community to promote “fair and reasonable distribution” of COVID-19 vaccines and opposes vaccine nationalism.

Last month, the EU imposed its first significant sanctions against Chinese officials since 1989 over alleged human rights abuses in China’s Xinjiang region. Beijing, which denies the allegations, hit back by blacklisting some EU lawmakers and entities.

The United States, Britain and Canada also sanctioned Chinese officials over Xinjiang, and the row threatens to derail an EU-China investment pact agreed in late 2020 after years of negotiations.

German government spokeswoman Ulrike Demmer said Merkel and Xi had discussed international efforts to produce and distribute COVID-19 vaccines, deepen economic cooperation and steps to protect the climate and biodiversity.

She said the leaders agreed to deepen bilateral ties in Sino-German government consultations planned for late April.

“The Chancellor stressed the importance of dialogue on the full range of ties, including issues on which there are different opinions,” Demmer said, without giving details of the areas where Germany and China differ.

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The Belt and Road in Italy: Two years later

Belt & Road News Network

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On 23 March 2019, Italy officially became part of the Belt and Road Initiative (BRI). Two years since the first G-7 country became part of the controversial Chinese project, it is time to make an initial assessment of Italy’s highly contested membership in the BRI, writes Francesca Ghiretti.

Three important elements, two external and one internal, have been fundamental in shaping the development of the BRI in Italy. The two exogenous elements are the increasing tensions between the China and the United States, and the outbreak of the COVID-19 pandemic. The former has translated into more U.S. engagement with Europe, including Italy, to secure alignment in policies toward China. A sample result of this effort was the cancellation of a potential collaboration between the Italian Space Agency (ISA) and China National Space Administration (CNSA) to build habitational modules for the Chinese space station Tiangong 3. Another result, which falls in line with steps taken in other EU countries, regards changes that curtail the possibility of Huawei participating in development of the Italian 5G network.

Admittedly, neither example cited above directly relates to the Memorandum of Understanding signed during Chinese President Xi Jinping’s state visit to Italy in March 2019. However, both are examples of a change of Italy’s position toward collaboration with Chinese entities, whether public or private, following pressure from the United States. The collaboration regarding the Chinese space station, interestingly, was abandoned soon after March 2019.

The second external element is the outbreak of COVID-19. Last year was meant to be very important for the relationship between Italy and China. In 2020, Italy and China celebrated the 50th anniversary of their diplomatic relationship and were meant to celebrate the Year of Tourism Italy-China, now postponed to 2022. A line-up of events and celebrations had been organized for both, which had to be cancelled amid the pandemic. Furthermore, as the first year after the signing of the MoU, 2020 should have seen the initial materialization of the agreements signed on the occasion of Xi’s state visit. It is difficult to say whether in the absence of the pandemic, most of the BRI-related agreements would have materialized, but it can be confidently stated that without the pandemic we would have witnessed further developments. In fact, even with the pandemic, a series of deals materialized, and a limited number of new ones were reached, although mostly among private actors, at least on the Italian side.

The internal element shaping the BRI’s development in Italy is the numerous changes to the Italian government in the past two years. When the MoU for the BRI was signed, Italy was governed by a populist coalition formed by the Five-Star Movement (5SM) and the far-right League. The latter would rediscover its transatlantic call shortly before Xi’s state visit. Within this coalition, a mixture of rejection of Italy’s traditional alliances, Euro-skepticism, naïveté, and interests that pointed in favor of China led to the decision to sign the MoU. In September 2019, however, that government was replaced by a new coalition, which saw the 5SM being joined by the mainstream center-left Democratic Party (PD). The prime minister, Giuseppe Conte, remained the same.

The new coalition did not necessarily have a less favorable view of China. Historically, Italy’s left has cultivated very positive relations with China. However, it adopted a less sensationalistic approach and placed Italy back into its traditional alliance systems. Notably, after September 2019, Italy adopted a very European approach in its dealings with China. Italy quietly maintained a rather positive relationship with China, while joining with the other EU countries in occasional critiques of China, and, as already mentioned, adopting a response to 5G similar to its fellow Europeans: excluding Huawei without imposing a blanket ban.

At the beginning of 2021, Italy underwent another change of government. It is now led by Mario Draghi and is even more embedded in Italy’s traditional alliances than the previous government. Given that this government has not been in power long, the assessments that will be made here mostly relate to the government of Conte II, when the 5SM governed with PD.

Keeping in mind what has so far been said, the examples that follow will show that the great majority of MoUs signed between Italy and China were either an expression of intentions that were rarely materialized or the consolidation of an already established relationship.

A notable lack of materialization can be found in the MoUs signed between the port of Genoa and the port of Trieste with China Communications Construction Company (CCCC). In brief, so far, there has been a lack of developments in the collaborations in this sector and it seems there will not be any in the future. The new BRI terminal of Vado Ligure, near Genoa, is the result of an agreement that long predates the MoU of March 2019. It dates back to the creation of the joint venture APM Terminals Vado Ligure Spa back in 2016. Furthermore, the joint venture does not involve of CCCC, the signatory of the MoU, but of COSCO and Qingdao Port. In other words, so far, the only development in the maritime sector linked to the BRI involves a project that is not part of the MoUs of March 2019.

Another example is the collaboration between the Italian Space Agency and the China National Space Administration for the mission “China Seismo-Electromegnatic Satellite 02” (CSES-02). This project is also predated the signing of the MoUs. It represents phase two of an already ongoing collaboration between ISA and CNSA on CSES-01. The collaboration in the energy sector between Ansaldo Energia and both China United Gas Turbine Technology Co. and Shanghai Electric Power Corp. was also established before 2019. Other examples of already existing relationships that were formalized by signing MoUs in March 2019 are those of Cassa Depositi and Prestiti, Eni and Intesa San Paolo with Chinese counterparts such as Bank of China and the city of Qingdao.

Some successful developments of the MoUs have been the restitution of 796 archaeological artifacts from Italy to China, which occurred in March 2019. There was also collaboration between the Italian Trade Agency (ITA) and the Alibaba Group for the creation in 2020 of an online Made in Italy Pavilion for Business to Business (B2B) commerce. Finally, one notable successful MoU has been that between the Italian news agency Ansa and its Chinese counterpart Xinhua. Despite the relationship again predating March 2019, it was only after March 2019 that news from Xinhua translated in Italian began to appear on the website of Ansa, labelled as Xinhua News.

All in all, Italy has undeniably witnessed the developments of many of the MoUs signed in March 2019. However, as anticipated, most of the MoUs were the result of collaboration that already existed before 2019 and thus, arguably, Italy would have witnessed the same type of developments even without joining the BRI, with some exceptions. Furthermore, if the BRI is analyzed uniquely as a connectivity and infrastructure project, then only a handful of the examples presented above can be considered as being part of the BRI.

However, the mere fact that alongside the signing of the BRI MoU, other MoUs belonging to diverse sectors were also signed means that not only for China, but also for Italy, the BRI is about a lot more than just connectivity. The BRI is a way to frame the relationship between a country and China. In both cases, one can easily say that yes, the BRI has not been as successful as one would have thought, in Italy and elsewhere. But it is not dead. Authors

Francesca Ghiretti is a research fellow at Istituto Affari Internazionali (IAI), where she specializes in the Italy-China relationship, Europe-China relationship and Chinese foreign policy. She is a Leverhulme doctoral fellow at King’s College London, looking at Chinese FDI in the EU.

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China: Bomb attack in Mingjing kills 5

EU Reporter Correspondent

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A man detonated a homemade bomb blowing up four other people besides himself in Mingjing, a small village in Guangzhou on 22 March. Jeimian, a news website, shared a video of the aftermath, a destroyed office, with blood splattered on the walls and at least two people motionless on the ground.

The Guangzhou Panyu Security Bureau confirmed the bomb blast on its Weibo account. Investigations into the explosion are still ongoing. Xinhua, China’s news agency, described the blast as an ‘act of sabotage’, while several others are attributing it to an ongoing dispute due to the forcible land grab by the government that is causing hardship to the residents. Meanwhile, the blast was claimed online by a pro-TIP telegram channel. The message indicated the blast as the result of the oppression of the Uyghurs by China. It urged more attacks on government buildings and officials across China. The message ended with a shout out call to all Uyghurs to make their voices heard.

However, this is not the first time such a blast has happened in Guangzhou. In 2013, a similar blast had happened in a storehouse for shoe-making materials, in Baiyun district, killing 4 people and injuring 36. The coercion  of Uyghurs is causing a lot of resentment and the brunt of this resentment has been borne by Beijing (2013) and Kunming (2014) as well.

Guangzhou has been witness to several such incidents which have highlighted the simmering resistance in the society. Guangzhou is a commercial hub and hosts a lot of industries. The labour in these industries is sourced from Xinjiang. This serves the twin purpose of changing the demography of Xinjiang and providing for cheap captive labour. Studies have pointed out that between 2017-2019 alone, 80,000 Uyghurs have been relocated from Xinjiang to other parts of China. Footage of these Uyghurs being transported to remote parts of China as forced labour (CBN News, Channel 4 News, BBC) confirms this. The policy involves a high degree of coercion and is designed to assimilate minorities by changing their lifestyles.

Guangzhou by virtue of being an industrial hub has afforded more opportunities for the expression of this angst. Guangzhou hosts a large number of people from Africa and Middle East, who demand halal meat. This is provided by ethnic Uyghur restaurants in the city. The increasing crackdown on Islam in China initially forced these restaurants remove the Arabic signage’s, which brought a dip in their business. Added to this was the ousting of foreigners by the Chinese government to rein in the corona virus spread has resulted in hardships to these Uyghur eateries.

The forced relocation and the restrictive employment opportunities have added to the frustration of the Uyghur minority. This oppression has formed the bulk of the propaganda for Uyghur militant groups such as TIP. Last year, the TIP chief Abdul Haq Turkistani, had appealed to the Taliban and Al Qaeda to support the Uyghur cause. It is not surprising that inspired by the success of the Taliban, the Uyghurs are emboldened to stand up for their rights. A pro-TIP telegram channel claimed the blast as retribution for the injustices met out to the Uyghurs. It further warned of similar attacks across China.

The growing restlessness and insecurity amongst the Uyghur is a cause for concern. Irrespective of the justification and success stories that the government peddles to support its education camps, the fact remains that denying the Uyghurs right to religion and freedom of expression is not only a violation of the Chinese constitution, it is also repression of the human rights. The government will have to rework its policy and ideate on a more heterogeneous approach to the issue.

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