BEIJING FACING SCRUTINY ON UKRAINE
Xi’s trip to France, Serbia and Hungary comes as West is increasingly wary of China’s ties to Russia
China’s position on the war in Ukraine will face scrutiny next month when President Xi Jinping is expected to set off on a European tour and receive his Russian counterpart Vladimir Putin at home.
Putin announced at a business forum on Thursday that “a visit in May is planned”. It was the latest sign of deepening ties between China and Russia since the war broke out in 2022. Putin last visited China in October.
Xi is also expected to kick off a European swing next month, with stops in France, Serbia and Hungary. China has yet to confirm the trip to France and Serbia, but Gergely Gulyas, Hungarian Prime Minister Viktor Orban’s chief of staff, said Xi would visit the country from May 8 to 10.
Dylan Loh, an assistant professor of foreign policy at Nanyang Technological University in Singapore, said the war in Ukraine would feature “heavily” in talks during Xi’s time in Europe.
Loh said this was especially true for the meetings with French officials, but he did not expect Hungarian officials to discuss Ukraine as prominently due to Budapest’s links with Moscow.
Reuters quoted Gulyas as saying China was among the world’s leading powers – “stronger than the European Union” – and that it was in Hungary’s interests to have a good economic relationship with as many countries as possible.
“Hungary thinks that it is not worth setting up ideological boundaries when it comes to economic relationships, and we are happy about the Chinese president’s two-day visit,” he said.
Xi will visit the continent as the West grows increasingly concerned about China’s support for Russia.
US Secretary of State Antony Blinken, who is in Beijing, is expected to press Chinese officials to halt exports of machine tools and other dual-use items that have helped Russia’s defence industry. China has dismissed allegations that it has aided Russia in the war.
“I think the pressure [from the West] has always been there, but so far we have not seen any concrete effects of that pressure other than for China to largely sit on the sidelines of the war,” Loh said.
He suggested the “limits of persuasion and diplomacy on reining in Russian behaviour was quite clear”, and that talks with Xi would probably be centred on preventing China from providing direct, substantial support for Russia.
Loh said China’s diplomatic activities in May – especially Putin’s visit – would be closely watched. People would be watching for any substantive outcomes to help prop up Russia’s economy and any indication that China was shifting towards directly supporting Moscow’s war effort.
Although the president was likely to be pulled in two directions, Loh suggested there were few expectations of a significant shift when Xi visited Europe. “I do not think China’s position on the war will be tested,” he said.
He said China’s position so far had generally been to allow events to unfold without intervening too much by directly supporting Russia’s war efforts or directly condemning Moscow.
Wang Yiwei, a professor of international relations at Renmin University in Beijing, said Putin’s visit to China, his first overseas trip of his new presidential term, showed the “strategic mutual trust” between Moscow and
Beijing. Putin also made China his first foreign visit in 2018 after securing his fourth term.
But Wang, noting that Putin also had plans to travel to North Korea, cautioned that the Russian leader’s visit might add to Western concerns about how China and North Korea could aid Russia’s war efforts.
Washington earlier raised concerns with China over North Korea’s growing ties with Russia amid reports that Moscow was using Pyongyang-supplied missiles in Ukraine.
In a rare overseas trip, North Korean leader Kim Jong-un travelled to Russia last year and met Putin, sparking Western concerns about a potential arms deal.
Wang said China could seek to use Putin’s visit to reach an agreement with Russia over a Ukraine peace summit in Switzerland next month. China and Switzerland have pushed for Russia to be invited to the summit, which will take place outside the city of Luzern. Similar conferences in the past have left out Russia.
Wang said it would be “great” if China could reach a consensus on the issue with Russia, noting that the summit would be “pointless” if there was no Russian representation.
If a truce or some form of peace measure were achieved, Wang said it would benefit not just the countries involved but also Western powers such as the US and Europe. “China has always been willing to facilitate negotiations. This has always been China’s position,” he said.
American sanctions on Chinese banks for their trade with Russia are not imminent, according to US Treasury Secretary Janet Yellen.
“I have nothing to announce in terms of sanctions [on Chinese banks],” Yellen stated during an interview with Reuters.
But the policy option was something the US “would be prepared to use if necessary”. “We’ve had intensive discussions with the Chinese about this. I think they understand our position, and it is a tool that’s available,” she said.
In December, United States President Joe Biden signed an executive order giving the US Treasury authority to sanction foreign banks that facilitate the flow of military goods to Russia.
More recently, Washington was weighing sanctions against Chinese banks to help US Secretary of State Antony Blinken – who was on a visit to China from Wednesday to yesterday – persuade Beijing to halt commercial support for Russia’s military production, according to a Wall Street Journal report on Monday.
The visit, his second to the country in 12 months, comes as the US and China scale up official contacts to keep their relations from fraying amid their disputes over issues like trade and Taiwan.
Yellen earlier this month travelled for a week to China, meeting senior Chinese officials and members of the American business community. She voiced US concerns about China’s industrial overcapacity, especially in the new-energy supply chain.
“My responsibility is to emphasise the undesirable spillovers of excessive subsidies to everything in the clean-energy supply chain. And to make sure that that’s heard at the highest level,” Yellen said in Thursday’s interview.
Chinese overcapacity was not just a US issue, she added, describing it as affecting Europe, Japan and emerging markets such as India and Mexico. “We’re not trying to dominate the global market. We have no problem with China producing and selling globally and exporting,” she continued.
“But the United States and Europe and other countries also want to have some involvement in the ability to produce cleanenergy products that are going to be of great importance.”
In the past decade, China has grown into the biggest player in the global new-energy industrial chain, helped by policy support, heavy government subsidies and the world’s most complete manufacturing infrastructure network.
It now dominates 80 per cent of the global supply chains of photovoltaic products and automotive batteries, while more than 60 per cent of electric cars in operation globally were made in China. As a result, the country’s perceived monopoly of the sector has evoked some backlash.
The US has largely kept Chinese electric vehicles at bay, thanks to an additional 25 per cent tariff imposed since the administration of former president Donald Trump. In 2022, the Biden administration enacted the Inflation Reduction Act that entails comprehensive subsidies for US domestic new-energy manufacturers.
Yellen said she had been engaging in “intense discussion” with Chinese senior officials on the issue of industrial overcapacity, including during the fourth meetings of the US-China economic and financial working groups that took place on the sidelines of the International Monetary Fund and World Bank spring meetings in mid-April.
“This is a problem that developed over many years. It’s not going to be solved in a day or a week,” Yellen said. “So it’s important that China recognises the concerns and begins to act to address them. But we don’t want our industry wiped out in the meantime, so I wouldn’t want to take anything off the table.”
The treasury secretary noted her thoughts on comparative advantage – a foundational principle in international trade referring to an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners – had changed with respect to China, while denying it presaged further protectionism.
“It’s well documented that the United States experienced what’s referred to as a ‘China shock’, which was after China was admitted to the WTO, its exports to the United States utterly surged,” she said. “And that really ended up with the huge loss of good manufacturing jobs in parts of the country that have really never seen employment recover.”
“I’ve been in favour of free trade. But it has to be something that broadly benefits people throughout the country.”
On Thursday, He Yadong, spokesman for the commerce ministry, told a press conference in Beijing that Western “hype” over China’s overcapacity was “unreasonable” and that the country firmly opposed it.
“The issue of production capacity must be based on the background of economic globalisation, fully consider the reality of the global division of labour and the international market and uphold an objective, fair and scientific stance,” He said.
In the new-energy sector, there was no overcapacity, he said, but rather a shortage of capacity from a global perspective, with China providing affordable, high-quality products for the world’s green development.
“Relevant countries and regions cannot hold high the banner of green development while wielding the big stick of protectionism,” He said.
The issue of production capacity must be based on the background of economic globalisation HE YADONG, COMMERCE MINISTRY SPOKESMAN