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China

Central Asian elites choose China over Russia

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Kazakh President Kassym-Jomart Tokayev shakes hands with Chinese President Xi Jinping at the end of the signing ceremony at the Great Hall of the People, Beijing, China, 11 September 2019 (Andrea Verdelli/ Pool via REUTERS)

Author: Jon Yuan Jiang

Since 2019, more than 40 protests were held against ‘Chinese expansion’ in Central Asia. Yet Central Asian elites have hardly had a bad word to say. On the contrary, they suppressed these protests, denied that China’s goal was expansion and even requested their publics be grateful to China. No wonder some Russian commentators are worried about Russia’s waning influence.

The rationale to explain these Central Asian elites’ choices is that they may be better off embracing China while subtly distancing themselves from Russia, as Beijing increasingly aligns with its Central Asian counterparts with greater success than Moscow. Despite Central Asian countries being independent for three decades, it is common to find Russian assertions that they still effectively own the region. Some Russian officials have even publicly claimed that the entire territory of Kazakhstan was a gift from Russia, which was denounced severely among Kazakh elites.

Arguments about expansion and loss of sovereignty are dubious in Central Asia. Nowadays, Central Asian elites enjoy full sovereignty to defend their national interests. When the legislation around long-term land leases by foreign countries stirred up massive protests against the Kazakhstan government and Chinese influence, the bill was ditched and Beijing did not react. Kazakh elites also rejected Russian President Vladimir Putin’s proposal to construct nuclear power plants there. When Turkmenistan closed Russian language courses, the local Russian embassy expressed regret, but nothing tougher.

Numerous ethnic Russians live in Central Asia and the annexation of Crimea looms as a precedent. Central Asian elites might never express their fear of Russian annexation freely, but it is certainly a concern. In contrast, very few ethnic Han Chinese reside in Central Asia. The cardinal interest of China in this part of the world is to eliminate terrorism and separatism, purchase resources and trade with Europe through Central Asia. None of these interests constitute any potential territorial threat to Central Asia.

The dubious benefits of alignment with Russia’s stagnating economy pale in comparison to China’s economic might. With the implementation of the Belt and Road Initiative (BRI), China was a larger trading partner than Russia for most Central Asian nations by 2019. As Alexander Grishin noted, Chinese investment has now surpassed Russia in almost all Central Asian countries. Russian investment in Kazakhstan in 2016 was just over US$12 billion, whereas Chinese investment, according to official data, exceeded US$20 billion. Unofficial figures of Chinese investment ranged from US$55 billion to US$80 billion.

As Benno Zogg argued, compared to the economic power of China, ‘particularly the volume of funds for infrastructure in the framework of the BRI, Russia and its rigid, protectionist, and politicised Eurasian projects pale’. Russia is a direct competitor to Central Asia’s natural resources exports to the Chinese market, which may push Central Asian elites to the Chinese side.

According to Adil Kaukenov and Bakhtiyor Ergashev, Moscow consulted minimally with Central Asian partners concerning Eurasian integration, preferring to offer feelings of kinship and shared history rather than practical benefits. This may be effective in winning over the public and some of the more sensationalist media in the region, but it is much less persuasive to Central Asian elites who see the relationship with China as more business-like.

This explains why Central Asian elites have endeavoured to ‘de-Russianise’ themselves to enhance their own national identity by promoting local languages. Uzbekistan and Kazakhstan deliberately implemented the latinisation of their national languages, eschewing the Russian Cyrillic alphabet. In this context, increasing cooperation with China — which also entails enhancing its influence — not only accords with the economic interests and diversity of Central Asian nations, but also indirectly promotes their nation-building efforts.

The leadership shift in Central Asia may reflect their willingness to negotiate more with Beijing. Kazakhstan President Kassym-Jomart Tokayev is a fluent Mandarin speaker with diplomatic experience and connections in China. Former deputy prime minister Dariga Nazarbayev, the eldest daughter of the first president of Kazakhstan, extolled the virtue of learning Chinese, arguing closer ties to China is Kazakhstan’s destiny. The incumbent Kyrgyzstan President, Sadyr Japarov, was purportedly…

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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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