India-China Talks & Trade – Xi’s Party School Speech – Informatization Plan – China & P5 on Nukes – Wang Yi in Maldives & SL – EU, Lithuania & China – The Kazakhstan Situation

  • January 17, 2022
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By: Manoj Kewalramani

Dear Subscribers,

I’d like to begin by wishing you all a very happy new year. As promised, we’ve been thinking about ways to revamp the newsletter to be able to bring together more voices and reflect the work done under Takshashila’s Indo-Pacific Studies Programme.

This week, we begin with a new version of the Eye on China newsletter with contributions from analysts at Takshashila. Happy reading!

Warmly,

Manoj

I. India-China Brief

by Suyash Desai

Three months after the last border meeting, which failed to break the deadlock on the China-India border, the two countries engaged in the 14th round of Corps Commander talks on January 12, 2022. The Indian delegation was led by Lt Gen Anindya Sengupta, Commander of the Leh-based 14th Corps. Major Gen Yang Lin, the new South Xinjiang Military District Commander (SXMD), led the PLA on the Chinese side. The talks were held on the Chinese side of the Chushul-Moldo border point. 

While there was no agreement yet to disengage in the three remaining areas on the border — Hot Springs, Demchok and Depsang Plains – the two sides reportedly struck a more “positive note” than the previous round in October 2021. The two sides also issued a joint statement indicating progress had been made but that further work was needed to arrive at a resolution. The statement said the two sides “agreed to stay in close contact and maintain dialogue via military and diplomatic channels and work out a mutually acceptable resolution of the remaining issues at the earliest” and “also agreed that the next round of the Commanders’ talks should be held at the earliest.”

“The two sides also agreed to consolidate on the previous outcomes and take effective efforts to maintain the security and stability on the ground in the Western Sector, including during winter,” the statement said.

Previously, the 13th round ended in a stalemate and without a joint statement. Furthermore, despite notifications by the Indian Army, the Chinese side had dragged its feet in confirming dates for the latest 14th round of talks. 

The previous round was led by a stand-in Maj. Gen. Zhao Zhidan from the PLA, as Maj. Gen. Yang was yet to take charge of the SXMD.

The Indian Army is also believed to have raised the issue of the PLA building a bridge over Pangong Tso, east of Srijap Complex, for faster troop deployment and rapid militarisation. However, there is no known report discussing the PLA response to the Indian query during the meeting. 

Meanwhile, a day before the meeting, India’s Army Chief Gen Manoj Naravane said that the deployment of many PLA forces by the Chinese in eastern Ladakh was the root cause of the situation that developed. “Now that they are there and have made a lot of infrastructures, it remains to be seen whether they will permanently station themselves there or whether they will be amenable to some kind of de-induction in the times to come.” He also added that it was clear that the Indian Army’s response to Chinese attempts to change the status quo unilaterally was robust, and India was able to thwart this design. “Re-orientation of additional forces to the northern borders has been carried out while retaining our capability for punitive strikes on the western front.”  These remarks were made during his annual press conference before the Indian Army Day on January 15.

Meanwhile, China’s Foreign Ministry spokesperson Wang Wenbin responded to Gen Naravane’s comments claiming that the Indian officials should refrain from making unconstructive comments. “China and India are working through diplomatic and military channels to advance the easing of the border tension. We hope that certain individuals on the Indian side would refrain from making unconstructive remarks.”

Recapping the situation on the border now:  

The Indian Army and the PLA are still engaged in stand-offs at Hot Springs (PP15). The PLA is still actively blocking the Indian patrols around 18 km inside what India considers its own territory at approach roads to strategically located Depsang Plains at PP 10,11,12,12A and 13. Similarly, at Demchock, the two sides have not come to any resolution at the Charding Ninglung nullah. 

Away from the border issue, Chinese customs data show that trade between India and China reached a record $125 billion in 2021. HT reports that two way trade between India and China in 2021 stood at $125.66 billion, up 43.3% from 2020 when bilateral trade was worth $87.6 billion. In 2021, China’s exports to India were $97.52 billion, up 46.2%, while China imported $28.14 billion worth of goods from India, up 34.2%, according to statistics released by the General Administration of Customs (GAC) on Friday. Trade deficit between the two countries remained much in favour of China – at $69 billion.

Also Read

II. Party School Speech & 20th Congress Commentary

by Manoj Kewalramani

On Tuesday Xi Jinping addressed (English report) the opening of a study session at the Central Party School, which was attended by provincial and ministerial-level officials. The report on this says that Xi stressed that the purpose of the session was aimed to push a thorough learning and understanding of the history resolution, and to continue to deepen the learning, education and publicity of Party history, carry forward the great spirit of Party-building, increase historical self-confidence, enhance unity, strengthen the spirit of struggle, and mobilise the whole Party and people of all ethnic groups to strengthen their confidence and move towards the second centenary goal.

All PSC members and Wang Qishan are mentioned as present.

In his speech, Xi said that in order to progress, a nation needs theoretical thinking and correct ideological guidance. At the end of the day, Marxism is the reason behind why the CCP can deliver and why socialism with Chinese characteristics is good. 

“Xi said that the resolution of this plenary session provided a comprehensive summary of the Party’s continuous promotion of the sinicisation of Marxism over the course of the past century of struggle. Paying attention to analysing, studying and summarising the Party’s sinicisation and modernisation of Marxism over the past 100 years of struggle is an important aspect of the resolution, and we must thoroughly study and fully understand it. Marxism charts the course for the development and progress of human society, and is a powerful ideological weapon with which we can understand the world, grasp the laws governing it, pursue truth and transform the world. At the same time, Marxist theory is not dogma, but a guide to action, which must develop with the change of practice. Whether Marxism can play a role in practice depends on whether the basic principles of Marxism can be combined with China’s reality and the characteristics of the times. Faced with a rapidly changing world and China, if we stick to conventional ideas, function with rigidity and have no courage of theoretical innovation and if we cannot answer the questions before China, the world, the people and the times scientifically, then not only will the cause of the Party and the country be stymied, but Marxism will also lose its vitality and persuasiveness. Contemporary China is experiencing the greatest and most unique practical innovation in human history. The task of reform, development and stability is formidable; there are many contradictions, risks and challenges, and most of the challenges of governing the country are unprecedented. The world is going through unprecedented changes and a large number of theoretical and practical issues need to be addressed urgently. We should accurately grasp the general trend of the times, bravely stand at the forefront of human development, listen to people’s voices, respond to realistic needs, persist in emancipating the mind, seeking truth from facts and being upright and innovative… and continue to promote the combination of the basic principles of Marxism with China’s realities and Chinese excellent traditional culture, and continue to write a new chapter of sinicisation and modernisation of Marxism.” 习近平在讲话中指出，一个民族要走在时代前列，就一刻不能没有理论思维，一刻不能没有正确思想指引。中国共产党为什么能，中国特色社会主义为什么好，归根到底是因为马克思主义行。马克思主义之所以行，就在于党不断推进马克思主义中国化时代化并用以指导实践。这次全会决议对百年奋斗历程中党不断推进马克思主义中国化时代化作了全面总结。注重分析研究和总结党在百年奋斗历程中对马克思主义的中国化时代化，是贯穿全会决议的一个重要内容，我们一定要深入学习、全面领会。马克思主义为人类社会发展进步指明了方向，是我们认识世界、把握规律、追求真理、改造世界的强大思想武器。同时，马克思主义理论不是教条，而是行动指南，必须随着实践的变化而发展。马克思主义能不能在实践中发挥作用，关键在于能否把马克思主义基本原理同中国实际和时代特征结合起来。面对快速变化的世界和中国，如果墨守成规、思想僵化，没有理论创新的勇气，不能科学回答中国之问、世界之问、人民之问、时代之问，不仅党和国家事业无法继续前进，马克思主义也会失去生命力、说服力。当代中国正在经历人类历史上最为宏大而独特的实践创新，改革发展稳定任务之重、矛盾风险挑战之多、治国理政考验之大都前所未有，世界百年未有之大变局深刻变化前所未有，提出了大量亟待回答的理论和实践课题。我们要准确把握时代大势，勇于站在人类发展前沿，聆听人民心声，回应现实需要，坚持解放思想、实事求是、守正创新，更好把坚持马克思主义和发展马克思主义统一起来，坚持用马克思主义之“矢”去射新时代中国之“的”，继续推进马克思主义基本原理同中国具体实际相结合、同中华优秀传统文化相结合，续写马克思主义中国化时代化新篇章.

The next paragraph focuses on the changing contradictions in Chinese society, particularly the principal contradiction. Xi says that the history resolution “provides a comprehensive analysis of the Party’s ability to grasp the principal contradiction in society and the central task to drive the overall work.” 

He adds that:

In the face of complex situations and contradictions and onerous tasks, one cannot do a good job unless there is appropriate distinction and prioritisation…We should focus on the main contradictions and central tasks, give priority to solving the main aspects of the main contradictions, so as to promote the resolution of other contradictions and achieve key breakthroughs, which can lead to a leap in overall advancement of economic and social development, and keep advancing towards the goal of building a socialist modernisation power in an all-round way. 面对复杂形势、复杂矛盾、繁重任务，没有主次，不加区别，眉毛胡子一把抓，是做不好工作的。我们要有全局观，对各种矛盾做到了然于胸，同时又要紧紧围绕主要矛盾和中心任务，优先解决主要矛盾和矛盾的主要方面，以此带动其他矛盾的解决，在整体推进中实现重点突破，以重点突破带动经济社会发展水平整体跃升，朝着全面建成社会主义现代化强国的奋斗目标不断前进。

The next paragraph talks about strategic thinking. He says that the resolution comprehensively reviewed how the Party constantly put forward sound strategies and policies in the past century. 

I thought this was interesting: Strategy is about making judgments and decisions based on the overall, long-term and general situations. We are a large party, leading a major country, and pursuing a great cause, we must be good at strategic thinking and thinking strategically. The right strategy (战略) requires the right tactics (策略) to implement it. Tactics follow strategy and serve strategy. The relationship between strategy and tactics is dialectical and unified. We should combine strategic firmness with tactical flexibility. 战略是从全局、长远、大势上作出判断和决策。我们是一个大党，领导的是一个大国，进行的是伟大的事业，要善于进行战略思维，善于从战略上看问题、想问题。正确的战略需要正确的策略来落实。策略是在战略指导下为战略服务的。战略和策略是辩证统一的关系，要把战略的坚定性和策略的灵活性结合起来.

All regions and departments must cross-check their work with the Party’s theories, lines, principles and policies, he said, adding that the strategic decisions made by the CPC Central Committee must be implemented unconditionally without distortion or deviation. – I guess this is the challenge of the Party’s governance model. How much risk/innovation does this approach incentivise, regardless of what Xi is saying above theoretically about strategy and tactics.

The next paragraph is about pursuing self-revolution. Xi says that the analysis and review of the Party’s history of self-revolution is a key part of the resolution. He called on “all Party members to be “virtuous, abide by public morality, and be strict with private morality, be clean and honest, do things with integrity, be self-disciplined, serve the public, practice self-restraint, frugality and cultivate one’s morality, while always maintaining the political nature of being clean and honest.” 全党同志都要明大德、守公德、严私德，清清白白做人、干干净净做事，做到克己奉公、以俭修身，永葆清正廉洁的政治本色.

He added that the key to maintaining the Party’s true nature as a Marxist party lies in the Party itself. The key lies in having the courage to undertake self-revolution and turn the blade inward. While hailing the landslide victory in the anti-corruption campaign, Xi said that Party members should “always maintain the spirit of self-revolution and continue to enhance political consciousness” while not being complacent about the fact that strict governance of the Party is now in place.

Ergo, the fight against corruption will continue, without ceasing. This is a “protracted war” that must be fought with “tenacity and persistence,” regardless of who it is that violates discipline. 

The final paragraph discussing the speech talks about history. Xi says that the 6th Plenum resolution represents a “new understanding of the history of the Party’s centennial struggle,” and that this must be studied, understood and implemented. Xinhua English summarises the paragraph well. “Xi stressed that it has been a major political task for the whole Party to understand the Party’s past success and how it can continue to succeed in the future, guided by historical materialism and a rational outlook on the Party’s history. Demanding a long-term and regular mechanism for Party history education, Xi urged the whole Party to focus on studying and implementing the guiding principles of the sixth plenary session of the 19th CPC Central Committee and the resolution. Leading Party officials should take the lead, and the Party’s history should be better incorporated into the syllabus of Party schools and the curriculum of ordinary schools. It should be made a way of thinking and promoted properly among youngsters.”

The report finally mentions Li Keqiang’s comments praising Xi’s speech; he also emphasises the decisive significance of the two establishments, four consciousnesses, four confidences and two safeguards.

Also this week, the People’s Daily published a commentary regarding the 20th Party Congress elections. It spoke about ensuring the participation rate of grassroots party organizations and party members, “giving top priority to political standards in selecting candidates”, and keeping a check on “unhealthy practices such as vote-buying, lobbying, cheating, fraud and election sabotage and other violations of law and discipline.”

III. 14th Five-Year National Informatization Plan

by Megha Pardhi

The Central Network Security and Informatization Committee recently issued 14th Five-Year National Informatization Plan (十四五” 国家信息化规划). The Plan attempts to consolidate China’s informatization efforts. It is based on documents like National Informatization Development Strategic Outline, the 10th National Economic and Social Development Plan, Outline of Vision 2035, the 14th Five-year Plan, etc. 

While acknowledging the developments towards informatization made during the previous planned period, the Plan acknowledges several shortcomings of the informatization attempts in China. These shortcomings are:

  • Unbalanced and insufficient informatization.
  • A significant gap in urban and rural informatization.
  • Obstacles in institutional mechanisms in enhancing digital productivity.
  • Shortcomings in key core technologies.
  • Insufficient competitiveness.
  • Insufficient integration of the digital economy and the real economy.
  • Weak links in social governance informatization – need to improve grassroots governance capacity.
  • Sluggish construction of the national data service system.
  • The insufficient supply capacity of digital public services – it has not been able to meet the needs of the masses.

The Plan outlines the following development goals.

  • Make decisive progress in the development of digital China by 2025.
  • Complete digital infrastructure.
  • Form a digital technology innovation system with a focus on building core innovation ability in integrated circuits, basic software, equipment materials, core components, etc.
  • Achieve major breakthroughs in technology innovation capabilities.
  • Achieve world-class quality and efficiency in digital economic development.
  • Construct and maintain the progress of building a digital society.

Ten priority actions have been identified to achieve these development goals. All have phased deadlines of 2023 and 2025. These priority actions are:

  • National Digital Literacy and Skills Improvement (全民数字素养与技能提升行动)
  • Improve digital capabilities of enterprises (large and medium-sized enterprises) (企业数字能力提升行动)
  • Achieve a breakthrough in cutting-edge digital technologies, especially artificial intelligence, blockchain, quantum technologies. (前沿数字技术突破行动)
  • Open cooperation in digital trade (数字贸易开放合作行动)
  • Improve grassroots smart governance capabilities (基层智慧治理能力提升行动)
  • Construction of green, intelligent, and ecological civilization (绿色智慧生态文明建设行动)
  • Digital village development (数字乡村发展行动)
  • Inclusive digital financial services (数字普惠金融服务行动)
  • Construct digital emergency public health system (公共卫生应急数字化建设行动)
  • Expansion of smart elderly care services (智慧养老服务拓展行动)

Cyberspace Administration of China (CAC) and the National Development Reforms Commission (NDRC) are responsible for the overall promotion and supervision of the Plan.

Informatization broadly refers to a process where information and communication technologies (ICT) dominate either some or all aspects of an organization, society, governance, or economy. Think of it as a process that uses ICT and related technologies to improve the speed and quality of information being produced, distributed, and analyzed. Informatization and digitization are closely interrelated processes. 

This plan is also strategically important for China and the modernization goals of the People’s Liberation Army (PLA). Informatization of the military is one of the milestones of PLA modernization which China aims to achieve by 2027. The communique of the 5th Plenum of the 19th Central Committee of the Communist Party of China (CPC) emphasized speeding up the integrated development of the “mechanization, informatization, and intelligentization” process of the military. 

This attempt to informatize the military cannot happen in isolation. The civilian sectors which support the military also need to reach a certain level for the military modernization process to be practically successful. Hence, this National Informatization Plan can have long-term implications for PLA’s informatization and intelligentization goals.

An interesting quote in the Plan grabbed my attention. It says,

“In the period of deepening and consolidation of modernization and governance capabilities, it is necessary to speed up the construction of a digital society, greatly improve the modernization level of data-based national governance capabilities and integrate social media with Chinese characteristics.” (和治理能力现代化的深化巩固期，要加快构建数字社会，极大提升基于数据的国家治理能力现代化水平，把中国特色社)

The Chinese government has been trying to build “social media with Chinese characteristics” for a while. Over the years, the government and CPC have issued several guidelines, laws, and regulations in this direction. The most recent example is a guideline jointly issued by the CPC Central Committee and the State Council in September 2021 which aims to build a “civilised cyberspace.” Interestingly, this vision of civilized cyberspace aims to consolidate the “guiding status of Marxism in the ideological cyberspace.”

The upcoming issue of my China Tech Dispatch newsletter has more details on “14th Five Year Plan for National Informatization”, and why informatization and intelligentization are important for PLA.

IV. The P-5 Statement on Nuclear Weapons

by Shrey Khanna

On January 3, China, France, Russia, the United Kingdom, and the United States released a joint statement on “Preventing Nuclear War and Avoiding Arms Races”. In the backdrop of increasing Russia-Ukraine and China-Taiwan tensions, the statement by the five recognised nuclear-weapon states affirmed a cold war pledge, “a nuclear war cannot be won and must never be fought.”

The next day, Chinese Vice Foreign Minister Ma Zhaoxu held a press meet and outlined China’s efforts to strengthen the global governance in the nuclear field. 

“This is the first time for the leaders of the five nuclear-weapon states to issue such a joint statement on the issue of nuclear weapons, which has demonstrated the political will of the five states to prevent a nuclear war, and given the common voice of maintaining global strategic stability and reducing the risk of nuclear conflicts.”

Acknowledging that “the international strategic security field faces many major challenges”, Ma maintained that “replacing competition among major countries with coordination and cooperation is also of positive significance to the building of major-country relations featuring overall stability and balanced development.”

As for China’s “leading role” in promoting international cooperation, Ma claimed that it was China’s push “for the inclusion of such key content as reaffirming that none of our nuclear weapons are targeted at each other or any other state, which played an important role in reaching a positive and substantial statement among the five states.”

He also asserted that China’s “self-defensive nuclear strategy” through a policy of No First Use and “minimum level” of its nuclear forces is “in itself is an important contribution to global strategic stability.” This flies in the face of the US Defense Department’s 2021 China Military Power report, which claimed that Beijing intends to quadruple its nuclear arsenal by 2030. The report had also noted that “some ambiguity about conditions where Beijing’s no-first-use policy would no longer apply”, thereby calling into question China’s “future intent as it fields larger, more capable nuclear forces.”

In an interview with CGTN, the Director-General of the Department of Arms Control of the Foreign Ministry, Fu Cong, maintained that the joint statement is of “historical importance”. He said that:

“the fact that leaders of the five nuclear weapon states decided to issue a joint statement on issues related to nuclear weapons demonstrate their collective will to maintain world peace and reduce the risk of a nuclear war. This is important by itself but especially against the current background of high tension in both Europe and to a lesser extent in this part of the world and people need to realise this.”

Much like Ma, Fu also did not forget to highlight China’s contribution:

“China was the first country among the P-5 that we should collectively reaffirm this important principle that nuclear war cannot be won and thus not be fought. Originally, some countries were not enthusiastic, but China persisted, so this simple document was the result of 2-3 years of hard work. And, as far as China is concerned, we will, based on this very important document, to continue our dialogue with the P-5 and other nuclear weapon states in order to safeguard world stability and also to promote arms control and non-proliferation in general.”

According to a report in ThePrint, Fu termed “untrue” the US Department of Defense claims that China is expanding its nuclear capabilities.

Meanwhile, an article in Global Times argued that the joint statement “restrains AUKUS practices”. 

V. Wang Yi in Maldives & Sri Lanka

by Manoj Kewalramani

Chinese Foreign Minister Wang Yi visited the Maldives and Sri Lanka this week. In the Maldives, Wang met with President Ibrahim Solih and foreign minister Abdulla Shahid. 

Chinese media reports (English report) quoted Solih saying that “his country and China reached an important consensus last year on consolidating the ties and broadening pragmatic cooperation between the two countries. The president thanked China for its tremendous contribution to his country’s socio-economic development, the firm support to his country’s vaccination campaign against COVID-19, and its reduction and suspension of the Maldives’ debt within the framework of G20. The Maldives firmly upholds the one China policy, and their sound bilateral ties and solid mutual trust are rooted in the long and traditional friendship and adherence to the principles of sovereign equality and mutual respect.”

Wang said that their ties “have withstood the test of international vicissitudes and become more mature, thus contributing to the regional peace and stability…Appreciating the Maldives’ firm support on China’s core interests, Wang said China has always supported the Maldives in safeguarding its sovereignty and territorial integrity, seeking a development path suited to its own national conditions and pursuing an independent foreign policy, Wang said. China is willing to expand cooperation with the Maldives in all fields and back its efforts to push for the strategy of diversified development, he said, hoping that a free trade deal between the two countries will be approved at an early date so as to facilitate the economic transformation and upgrading of the Maldives.”

Also note The Hindu’s coverage on this visit:

“Maldivian Foreign Minister Abdulla Shahid and his Chinese counterpart unveiled a special official logo to mark 50 years of diplomatic relations between the countries. Describing China as ‘one of the most important development partners’ of the Maldives, Mr. Shahid said that China ‘has continued to contribute to the socio-economic development’ of the Maldives. The Foreign Ministers discussed ‘strengthening the many areas of cooperation’ during official talks, according to Mr. Shahid’s tweet on Saturday. A statement issued by the Maldivian Foreign Ministry said the visa-waiver agreement would allow Maldivians to travel to China on a 30-day visa free basis once the pandemic restrictions are lifted. The two governments signed an agreement of ‘Economic and Technical Cooperation’ on grant aid, focusing on social, livelihood, and infrastructure projects. Further, the Government of Maldives signed a ‘Letter of Exchange’ on a ‘Feasibility Study of Management and Maintenance of China-Maldives Friendship Bridge’, for Chinese assistance in maintaining the 1.4-km bridge connecting capital Male with the island of Hulhumale. It was built with $ 200 million Chinese assistance during the term of former President Abdulla Yameen, whose government was close to Beijing. The bridge is considered China’s flagship project in the Maldives. Male owes Beijing about $1.4 billion from past loans, which President Ibrahim Mohamed Solih’s government has sought to ‘restructure’. China also agreed to back a sea-water desalination project and cooperate in the health sector, the Foreign Ministry said. Minister Wang’s visit would be one of ‘great significance to the future development of our bilateral relations’, Chinese Ambassador in Male Wang Lixin said in a tweet.”

Finally, Abdulla Shahid is also UN General Assembly President, and he has confirmed that he will be attending the Beijing Olympics.

After the Maldives, Wang landed traveled to Sri Lanka. Xinhua English has a wrap story:

Wang met with Sri Lankan President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa and Foreign Minister G.L. Peiris, and attended a ceremony to launch a series of events marking the 65th anniversary of the establishment of diplomatic ties between China and Sri Lanka, and the 70th anniversary of the signing of the Rubber-Rice Pact. Wang said the two sides were “good friends” and “good partners in common development”;  he said that “China has provided a large amount of COVID-19 vaccines and other medical supplies to Sri Lanka.” He added that “Sri Lanka is on the key route of the China-proposed Belt and Road Initiative in South Asia.”

“The first phase of the Colombo Port City project has been completed and new programs are being launched, said Wang, citing that the cooperative management of the Port City has brought profits for Sri Lanka, the Hambantota Port’s cargo throughput has continued to see new high, and the industrial zone is developed in full swing.” He added: “the two sides should further deepen their mutual political trust, firmly support each other on issues of core interests, significant concerns and national dignity.”

This is useful to note: Wang “said the two countries opened the door for friendly exchanges by signing the Rubber-Rice Pact, demonstrating their national spirit in the fight against hegemony and power politics, and breaking the Cold War isolation imposed by the West. ‘The spirit of the pact characterized by independence, self-reliance, unity and mutual support is deeply rooted in the hearts of the two peoples, and such spirit should be carried forward’.”

Wang also spoke about restarting FTA talks between the two sides; he added that ties “do not target any third party and should not be interfered with by any third party.” 

Do also note this from The Hindu:

“‘The President pointed out that it would be a great relief to the country if the attention could be paid on restructuring the debt repayments as a solution to the economic crisis that has arisen in the face of the COVID-19 pandemic,’ the Presidential Media Division said in a statement on Mr. Gotabaya’s meeting with Chinese Foreign Minister Wang Yi in Colombo. Mr. Wang concluded his five-nation tour of littoral countries in the Indian Ocean Region, with a one-day visit to Colombo on Sunday, following a visit to the Maldives. Sri Lanka owes China over $5 billion, amounting to about 10% of the country’s total foreign debt. Mr. Gotabaya’s request to Beijing to restructure it comes during an unprecedented economic meltdown in Sri Lanka, with the country’s foreign reserves rapidly declining following the devastating impact of the pandemic on its crucial export and tourism sectors over the last two years. In November, Sri Lanka’s foreign reserves stood at $1.6 billion, triggering widespread concern about how Colombo might pay its high imports bill, especially when the Sri Lankan rupee has considerably weakened.”

VI. China & the Kazakhstan Situation

by Manoj Kewalramani

Wang Yi spoke to Russia’s Sergey Lavrov earlier this week. The Chinese readout of the conversation discusses them talking about bilateral ties and the Olympics before focussing on Kazakhstan.

“The two sides exchanged views mainly on the situation in Kazakhstan. Lavrov introduced the assessment of the situation in Kazakhstan made by the special summit of the Collective Security Treaty Organization (CSTO), saying that more and more information clearly shows that the current chaos in Kazakhstan is a riot orchestrated by external forces. This is also the view of President Kassym-Jomart Tokayev himself and Kazakhstan. The CSTO dispatched peacekeeping troops to take action at the request of the Kazakh side, and the situation in Kazakhstan has improved significantly. Wang Yi stressed, President Xi Jinping has specifically sent a verbal message to President Tokayev, publicly expressing that China firmly opposes any deliberate attempt by external forces to provoke unrest and instigate a “color revolution” in Kazakhstan. China agrees with President Tokayev’s judgment on the nature of the violent and terrorist incidents in Kazakhstan, and supports the CSTO in helping Kazakhstan crack down on violent and terrorist forces and in playing a positive role in restoring stability in Kazakhstan on the premise of respecting Kazakhstan’s sovereignty. Wang Yi said, China and Russia, as permanent members of the UN Security Council and friendly neighbors of Central Asian countries, should never allow chaos or war to erupt in the region. The two sides should continue to deepen coordination and cooperation, oppose interference by external forces in the internal affairs of Central Asian countries, and guard against “color revolutions” and the “three forces” of terrorism, separatism and extremism. We should leverage our respective strengths to help Central Asian countries fight the pandemic, develop their economies and eradicate the breeding ground for turmoil. We should support the Shanghai Cooperation Organization and the CSTO in strengthening coordination and cooperation to jointly and effectively address various challenges to regional security.

Wang also spoke this week to Wang’s discussion with his Kazakh counterpart Mukhtar Tileuberdi. Wang said:

“China is ready to firmly support Kazakhstan in maintaining stability and curbing violence at a critical moment when the future and destiny of Kazakhstan are at stake. Wang Yi stressed that three days ago, President Xi Jinping sent a verbal message to President Kassym-Jomart Tokayev, publicly expressing support, which fully reflects the high level of permanent comprehensive strategic partnership between China and Kazakhstan, and once again confirms the deep friendship between the two countries in times of crisis. China is ready to work with Kazakhstan to implement the important political consensus reached by the two heads of state, and is willing to do its best to provide Kazakhstan with necessary support and assistance.”

The readout further says:

“Wang Yi said that on this National Day of Mourning in Kazakhstan, China would like to pay tribute to the frontline law enforcement officers who died in the fight against violence and terrorism in Kazakhstan, and express our condolences and sympathies to the innocent people and the injured. At this moment, the Chinese government and people stand firmly together with the government and people of Kazakhstan. As a saying goes, ‘Rainbow comes after a storm’. We believe that under the strong leadership of President Tokayev, Kazakhstan will be able to fully restore peace and stability and overcome this ‘darkest hour’, and Kazakhstan will be even more resilient and stronger. Wang Yi said that the sudden chaos in Kazakhstan shows that Central Asia is still confronted with severe challenges, and once again reveals that certain external forces do not want peace and tranquility in our region. As a neighboring country, we hope more than anyone else that Central Asia will maintain long-term stability and achieve development and revitalization. Wang Yi proposed that China is willing to strengthen cooperation with Kazakhstan in law enforcement and security sectors, and increase bilateral cooperation in anti-interference so as to maintain the security of political systems and regimes of both countries. We will work together to prevent and oppose any attempts of ‘color revolutions’, and jointly oppose any interference and infiltration by external forces; ensure the security and smooth operation of major China-Kazakhstan cooperation projects, and believe that Kazakhstan will effectively guarantee the security of Chinese institutions and personnel in Kazakhstan.”

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VII. Lithuania, the EU & China

by Manoj Kewalramani

Earlier this week, Lithuania’s Foreign Minister Gabrielius Landsbergis told the Financial Times that he would be informing his EU counterparts about China’s harassment of Lithuania at a summit meeting later in the week. “Now there has to be a very clear answer from Europe. Europe has to say it’s not the way to treat the single market. It’s a test for the rules-based international trade order. Europe has to stand up,” Landsbergis added.

At the end of the summit, there was no clear statement of purpose or action from the EU. Finbarr Bermingham reported for SCMP that:

Following a two-day session of the bloc’s 27 foreign ministers in the French port city of Brest, EU foreign policy chief Josep Borrell said that members stood in “solidarity” with Lithuania – even if no new support measures were forthcoming. “Some things are going well, some less well,” he said of the EU-China relationship, adding that members “expressed clear solidarity with Lithuania and discussed how we could actively press on with de-escalation”.

The report later adds:

it looks like the EU will stick with two existing plans. The first, the potential WTO case, could take years to unfold. And since the WTO’s appeals function has expired, any case may never be fully resolved. The second is an anti-coercion instrument, a legislative tool now in draft form that would permit Brussels to strike back at economic bullying. This too could take months, if not years, to navigate a bureaucratically dense passage to becoming law. Standing next to Borrell, France’s foreign minister Jean-Yves Le Drian told reporters that his government would try to accelerate the measure’s passage. “We criticise the coercion by China. As you know, there is an anti-coercion system on the table and part of our response under the French presidency will be to speed up the text so that coercive measures by China in relation to Lithuania cease,” Le Drian said.

France’s position is important. It is not only one of the biggest political actors in the EU, but is also taking over the presidency. In reading through the above, it’s worth noting that Emmanuel Bonne, the diplomatic adviser to French President Macron visited China this week. Chinese media reported him engaging with Vice President Wang Qishan, Vice Premier Liu He and Foreign Minister Wang Yi. There was no mention of coercion or Lithuania in the reporting on the meeting.

One last bit to note, after the meeting in Brest, Josep Borrell said that the EU plans to hold a summit meeting with China in March.

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Finally, do check out this excellent thread below:Kendra Schaefer 凯娜 @kendraschaeferYesterday, CPPCC bigwig and econ policy advisor Liu Shijin published an essay outlining the next evolution of China’s digital economy — it’s a pretty enlightening read. Good bits below. 1/12 全国政协经济委员会副主任刘世锦：推动数字经济和实体经济有效融合全国政协经济委员会副主任刘世锦：推动数字经济和实体经济有效融合finance.sina.com.cn



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