Eye on China

May 15, 2020
There's been a lot of talk about the impact of the pandemic on the Belt and Road Initiative. In this piece, I argue that BRI will sustain and allow China opportunities to expand its influence in the post-Covid world despite the challenges of debt and project execution.

I. Boundary Scuffles

It's a bit of a cliche to say that the India-China relationship has strands of cooperation, competition and even conflict. But it’s true. And this week, all three strands were evident.

First, there was much excitement along the disputed boundary, with both sides eventually downplaying the incidents. On May 10, reports emerged of two incidents between Indian and Chinese troops in Eastern Ladakh on May 5 and at Naku La, Sikkim, on May 9. Dinakar Peri’s report in The Hindu informes of injuries to both sets of troops in both incidents. The report also informed that local-level dialogue had allowed the resolution of both face-offs. PTI reported that some 150 troops in all were involved in the face-off in Sikkim. Mayank Singh reported in The New Indian Express that, confirming the face-off, three different sources admitted that it was the PLA which took an offensive posture since end April and it began first by a movement of the vehicle inside the Indian side of the LAC on 27 April. The Indian Army confronted the PLA personnel and the issue was resolved. 

Snehesh Alex Philip reports for ThePrint that the incident in Ladakh involved a “fist fight and stone pelting.” His report adds that “the official ‘disengagement’ in Ladakh happened on 6 May after formation commanders spoke to each other. However, the sources said, the matter has been noted for the next formal discussions between higher military authorities on both sides. They added that the situation is under control now.” In Quint, Subir Bhaumik reported that the Sikkim incident flared up after a Indian Army lieutenant punched a Chinese PLA major. The “officer's infantry unit had stopped the intruding Chinese PLA at Muguthang last week, and were furious at the Chinese commissar for shouting, ‘This (Sikkim) is not your land, this is not Indian territory... so just go back.’” The report adds: “Though for diplomatic reasons, the Indian Army will not go ga-ga over the incident and will downplay the whole thing, there is a quiet admiration for the young officer who ‘took on a Chinese major much bigger than him.’"

Amid all this, PTI also reported that “front-line combat jets were carrying out sorties on May 6, the day a couple of Chinese military helicopters were spotted flying close to the un-demarcated Sino-India border area.” IAF subsequently played down the reports, with unnamed sources telling The Hindu that “There was no border violation on either side. IAF SU-30MKI fighters were airborne in Ladakh on routine flying and were not scrambled in response to the helicopters.” There’s also this report by Rahul Tripathi and Manu Pubby, which talks about PLA soldiers setting up tents close to the Galwan River in Ladakh.

So what does one make of all this? Some in the Indian media have speculated that this is part of a pattern of Beijing’s pandemic opportunism, as evident in its maritime periphery. Others reported that “an assessment being pursued in New Delhi is that the current round of aggression on all borders could be linked to the fact that over 1,000 firms are in talks to relocate operations from China to India and other nations in the post-Covid scenario. Others argue that it’s about India’s stance on Taiwan and part of a pattern, but also about diverting its public attention “amid financial duress through cynically timed revanchism.” There’s also the infrastructure angle. Last week, India inaugurated what has been described as a “strategically vital link road” connecting to the Lipulekh Pass along with LAC - much more on this later. And finally, there’s the larger strategic issue of the Indo-US relationship and Beijing’s anxieties in that regard. Whatever the reasons from the PLA’s perspective, I concur with this assessment by Jeff Smith that this isn’t “an opportune time for Beijing to be picking fights with its neighbors."

In the end, here’s how both sides officially responded. China’s Foreign Ministry’s Zhao Lijian said that PLA troops were committed to maintaining peace and stability, and both sides remain in close communication and coordination. The Indian Army Chief General Manoj Naravane said that “aggressive behaviour by both sides” was responsible for the face-offs and that “both these incidents are neither co-related nor do they have any connection with other global or local activities.” He added that infrastructure building will continue. The Ministry of External Affairs also downplayed the incidents but added this: “Occasionally, however, on account of difference in perception of the alignment of the Line of Actual Control (LAC), situations have arisen on the ground that could have been avoided if we had a common perception of the Line of Control (LAC)."

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II. Taiwan, Indo-Pacific, SCO & Investments

There’s been much debate in the Indian media about the government’s position on Taiwan’s participation in the WHO’s World Health Assembly meeting next week. Apart from the reports highlighted above, an editorial Times of India said that India “should not shy away from supporting Taiwan” and there was no need for New Delhi to be “overly deferential to Beijing.” TV Network WION was blunt, saying that “India should utilise this window of opportunity as well and ensure an observer status for Taiwan at future WHO engagements to counter China." 

The Hindu’s Ananth Krishnan interviewed Taiwan’s Foreign Minister Joseph Wu, who proposed a regular communication channel with India to link up medical agencies to better cooperate in the fight against COVID-19. He also spoke about Taiwan’s participation in the WHO: “If Taiwan could participate fully in WHO and if it could interact with other countries on an equal basis under the WHO framework, more nations would receive Taiwan’s early warning. The world might be a different place today.” As expected, in response to the interview, Chinese embassy spokesperson Ji Rong issued a strongly-worded statement. It called on the “relevant Indian media take a correct stance on issues of core interests concerning China’s sovereignty and territorial integrity..."

Beijing’s statements are framing any support for Taiwan’s participation of the WHA in the context of support for Taiwan’s independence. For instance, Reuters reports that China’s Foreign Ministry said on Thursday that Taiwan’s ruling Democratic Progressive Party refused to accept the one-China principle, and so the political foundation for Taiwan’s WHO participation had “ceased to exist.” In response, Taiwan’s Health Minister Chen Shih-chung responded, saying “I have no way to accept something which does not exist."

Anyway, as an aside, for those following Chinese digital diplomacy in India, on May 13, Ji also put out a Twitter thread titled: “Truth You Need to Know.” It’s a reiteration of key Chinese talking points around the origin of the virus and questions over bats, Dr. Li Wenliang, legal claims against China, casualty figures, aid and Taiwan. I wonder how much of this is working when people like Union Minister Nitin Gadkari are going on national TV and saying that the virus is lab-made and not natural. Gadkari is not the only Indian politician to have courted controversy vis-a-vis China this week. Congress Party’s Lok Sabha MP Adhir Ranjan Chowdhury’s clearly racist tweet, which he subsequently deleted, earned him a reprimand.

Oh, well back to India straddling both sides on the Taiwan issue. Shubhajit Roy reports in the Indian Express that while India has been engaging with a number of countries who issued a joint demarche to the WHO, pushing for Taiwan’s inclusion in the WHA, a final decision is yet to be taken. The MEA this week outlined Foreign Secretary Harsh Vardhan Shringla’s engagement regarding the pandemic over the past few months with Qaud plus partners. At the same time, this engagement was upgraded this week to the Foreign Minister level. S Jaishankar had a virtual call with his Quad counterparts and ministers from Brazil, Israel and South Korea. While Jaishankar post-meeting remarks didn’t touch on controversial issues, the US State Department’s statement mentioned issues like “transparency and accountability."

Also this week, Jaishankar participated in a Shanghai Cooperation organisation foreign ministers’ dialogue. The MEA readout says that he highlighted the steps taken by India to combat the pandemic and the threat of terrorism. Wang Yi’s remarks at the meeting touched upon the key Chinese talking points, i.e., the need for “solidarity and coordination,” rejecting politicisation of the pandemic, focus on multilateralism calling on the media “to observe professional ethics, adhere to science and reason, stick to facts and truth,” etc. He also talked about security in Afghanistan. Both Wang and Sergei Lavrov were also particularly critical of US policies.

The joint statement adopted thereafter is rather interesting, in that it didn’t include anything about politicisation of the pandemic. Two noteworthy points in the state are: “stressing the responsibility of every state to ensure the sanitary and epidemiological wellbeing of the population, the ministers believe that fighting the COVID-19 pandemic requires decisive, well-coordinated and inclusive multilateral action with the United Nations system retaining its central role.” Second, it talks about “creating free, just, non-discriminatory, transparent and stable conditions for trade and investment."

Two good pieces to read on all of this. Rajesh Rajagopalan in ThePrint provides great perspective on the stresses that will burden India’s attempts at multi-alignment. Also read this Yan Xuetong interview, who says that Sino-US tensions will drive India to adopt “hedging” policies. “Since India is currently closer to the U.S. than China, India’s hedging strategy will mean improving relations with, rather than confronting, China. Trump’s “America first” principle leaves very limited room for India to further improve its strategic cooperation with the U.S. Therefore, I am optimistic about China-India relations as long as Trump stays in power."

Finally, some of the stories that are noteworthy. China’s Ambassador to India had a lengthy interview with News18. He touched on issues of the virus’ origin, Chinese medical supplies, the investment climate in India and broader cooperation in combating Covid. Second, Reuters reports that “tougher scrutiny of foreign investment in India has soured the plans of China's smartphone manufacturers seeking to expand beyond selling hardware for a bigger share of the South Asian country's competitive financial services market...the RBI has been cautious about issuing such approvals after the near collapse of one major lender in 2018, and it may now go even slower.” But in general, it looks like things are not going to get easier for Chinese investors. The earlier rule about approvals was for FDI; now TOI reports that the government is contemplating adding an approvals mechanism for Foreign Portfolio Investment from Chinese players, too. Economic Times also reports that Chinese VCs are increasingly anxious about the changes and lack of clarity, with this reflecting in deals. Lastly, Lava International, a leading Indian mobile device player, has said that it is shifting its production for export markets from China to India within six months.

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III. Region Watch

Pakistan has signed a PKR 442 billion deal for the construction of the Diamer-Bhasha dam. State-run China Power holds 70% and the Frontier Works Organisation (FWO), a commercial arm of the Armed Forces of Pakistan, 30% share in the consortium. The dam’s been controversial to say the least, as the timeline in Dawn’s editorial informs. But what’s also interesting to note is that two years ago, it was excluded from the list of CPEC projects. India’s MEA reacted to the deal, saying “Our position is consistent and clear that the entire territory of the union territories of Jammu and Kashmir and Ladakh have been, are, and will continue to be an integral and inalienable part of India. We have consistently conveyed our protest and shared concerns with both China and Pakistan on all such projects in the Indian territories under Pakistan’s illegal occupation."

Meanwhile, Shah Me­hmood Qureshi participated in the SCO meeting mentioned above. He reportedly praised China’s re­sponsible handling of the crisis and its leading role in assisting the internation­al community. Along with that, he talked about the need for debt relief. Other reports inform that Pakistan is considering exploring the possibility of debt relief from China at bilateral level but discreetly. The report was based on a video conference held between Federal Minister for Economic Affairs Makhdum Khusro Bakhtyar and Reza Baqir, Governor State Bank of Pakistan along with other senior bureaucrats. Nikkei Asian Review reports that Islamabad sought the extension of a debt repayment period on $30 billion in CPEC loans. China agreeing could save Pakistan around $500 million in annual cash flow. The report adds that Pakistan has also requested that G-20 countries provide debt relief, which could potentially result in the deferment of $1.8 billion in obligations for a year, Hafeez Shaik, a government adviser, was quoted as saying after a Ministry of Finance meeting. Finally, Pakistan’s Senate unanimously passed a resolution this week to express gratitude to China for supporting Pakistan during the COVID-19 crisis.

In Nepal, CGTN’s tweet on Mount Everest created a bit of a ripple, but then the organisation did revise the tweet. The more serious issue has been between Nepal and India. The inauguration of the new Indian road via Lipulekh did not go down well in Kathmandu, with parliamentarians demanding answers. Nepal's foreign minister summoned India's ambassador on Monday on the issue. India’s MEA said that the road lies within Indian territory. Nepal has also sought talks but these from an Indian point of view aren’t likely anytime soon. Meanwhile, The Hindu reports that Nepal’s Prime Minister K.P. Sharma Oli on Wednesday proposed a solution, saying that Nepal can allow India to use the link road to the Lipulekh Pass as part of an agreement, but will not surrender the Kalapani territory on which India has been carrying out construction. Amid all this, there’s two interesting strands linking China.

Check out this piece in Nepali Times by Kunda Dixit, where he talks about how Beijing and New Delhi have more in common on this issue than Beijing and Kathmandu. Discussing the history of talks on Lipulekh Pass, he writes, “a joint communiqué between Indian Prime Minister Narendra Modi and President Xi in 2015 in Beijing listed Lipu Lekh as one of the Sino-Indian border passes through which the two countries agreed to conduct trade. All this goes to show that Beijing and New Delhi are on the same page on Nepal’s claim to Kalapani.” Interesting to keep this in mind amid Indian news reports of Chinese influence forcing Nepal to protest against India, which Nepal’s Foreign Minister Pradeep Gyawali dismissed while speaking to India Today. However, these reports were lent credibility on Friday, with the Indian Army chief saying that “there is reason to believe that they might have raised the issue at the behest of someone else and that is very much a possibility."

Meanwhile, in a first, a PLA aircraft landed in Nepal this week, carrying medical supplies. Also earlier in the week, around 47 Chinese nationals protested Nepal’s lockdown, creating more than a bit of ruckus. All were detained but only four seem to have been charged.

Xi Jinping this week spoke to Sri Lankan President Gotabaya Rajapaksa. Xinhua reports that Rajapaksa told Xi he “appreciates the vision put forward by Xi of building a community with a shared future for mankind.” Xi called on his Sri Lankan counterpart to work together to “gradually resume practical cooperation,” i.e., let’s start getting on with BRI projects. He also promised “firm support and as much assistance as its capacity allows” for Sri Lanka “in line with its needs.” This Nikkei Asian Review piece captures some of the recent financial exchanges. “Rajapaksa has twice turned to China in the last two months, desperate for a bailout as Sri Lanka's foreign reserves dwindled to $7.2 billion in April. So far, Beijing has granted an ‘urgent’ loan of $500 million to help it fight the virus.” This is said to be half of a $1 billion deal. “Then, last week, cabinet ministers approved a decision to borrow another 15 billion Sri Lankan rupees ($80 million) from the China Development Bank, to improve 105 km of roads,” the report adds. Also noteworthy, just like in Nepal, in a first in Sri Lanka, a PLA jet carrying supplies landed this week.

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IV. In China

China’s major economic indicators showed modest signs of recovery in April, as per data from the National Bureau of Statistics. Industrial output last month was up 3.9% from a year earlier, recovering from a 1.1% fall in March. Caxin reports that fixed-asset investment, a key driver of domestic demand that includes infrastructure investment, fell 10.3% year-on-year. The rate of decline was more modest than the 16.1% drop for the first quarter, and record low 24.5% fall in the first two months. Retail sales, which include spending by households, governments and businesses, fell 7.5% year-on-year in April, better than a 15.8% decline the previous month. That’s going to be a worry, given the efforts to boost consumption. As per the Ministry of Commerce, consumption vouchers totalling to nearly $3 billion have been distributed across 28 provincial-level regions and over 170 prefecture-level cities. One explanation for why these haven’t been as effective is underlined in this SCMP report, which shows that these subsidies aren’t necessarily reaching the targeted individuals. For instance, often these are issued digitally and therefore not accessible for the poorest or the elderly.

Moving on Finance Minister Liu Kun on Thursday called for a “more active fiscal policy” to counter economic downward pressure, pledging the government will expand its deficit and boost bond issuance. Earlier, the NDRC’s He Lifeng called for more government support in the form of special anti-epidemic bonds, special local government bonds, and improved efficiency of capital use, along with support for small and medium-sized enterprises. He also called for maintaining stability and competitiveness of China's industrial supply chain along with coordinated efforts for work resumption and stabilising employment and addressing livelihood issues.

The People’s Bank of China, meanwhile, has pledged greater support. In its first-quarter monetary policy implementation report, the bank said its policies would put more emphasis on growth and employment and reiterated its pledge to adopt a “more flexible” monetary policy to counter the “unprecedented” impact of the Covid-19 outbreak on the economy. Unlike previous reports, the phrase “avoid flood-like stimulus” was missing in this report. Let’s see what all of the above does for debt. WSJ reports that “regional bosses are ramping up infrastructure spending...Off-balance-sheet entities are selling bonds to finance projects such as investing in warehouses, expanding underground metro networks, building data centers or renovating shantytowns. These bonds are ostensibly an arm’s-length way for cities and other levels of local government to fund infrastructure programs."

Reuters reports that new bank lending in China fell less than expected in April from the previous month while growth of broad money supply quickened. Chinese banks extended 1.7 trillion yuan ($240 billion) in new loans in April, down from 2.85 trillion yuan in March but exceeding expectations. For those tracking unemployment data from China, according to the NBS, official urban unemployment hit 6.0% in April, just off February’s record 6.2%. If you are interested in more on the challenge that all this poses, I recommend this SCMP series.

The economy was one of the focuses of the Politburo Standing Committee’s meeting this week. Xinhua reports that the meeting stressed “further deepening the supply-side structural reform and leveraging the advantages of China’s super-large market and domestic demand potential.” In addition, the focus needs to be on “coordinated business resumption focusing on major industrial chains, leading enterprises and key investment projects,” along with facilitating various shopping malls, markets and life service sectors to return to normal operations. Life appears to be gradually returning to somewhat normal in different parts of China. One big event this week was the reopening of Shanghai’s Disneyland. Earlier in the month, the Palace Museum and the National Museum of China also reopened. The processes followed at these locations can provide useful learnings. As is also the case with schools and universities. Beijing this week said that it will open universities from June 6.

While the economy was a focus, the top priority of the PSC meeting was epidemic control. In particular, there was a reference to new clusters in Heilongjiang and Jilin. Vice Premier Sun Chunlan, who led the central government’s effort in Hubei, visited Heilongjiang this week. Jilin, meanwhile, imposed a partial lockdown, with schools closed, transport and gatherings restricted. Expect this to continue a while since four new cases were reported on Thursday. Moreover, there’s evidence that the clusters are growing, with cases being reported from Shenyang in Liaoning Province. Transport services in Shulan and the city of Jilin have been halted while residents are not allowed to leave the cities without a negative virus test. Meanwhile, with six new cases also being reported from Wuhan, the authorities have decided to conduct mass testing of the city’s over 10 million population. Unlike earlier reports, as this NYT report informs, this process is not likely to be done in 10 days. Yet, the move is significant. As testing capacity increases, there’s all likelihood, as this Reuters report points out, that authorities will make mass testing the new normal around the country. But there’s something to be said about the cost and effectiveness of this strategy. For instance, this WSJ piece quotes Jiang Qingwu, former director of the Institute of Public Health at Fudan University, saying that testing every resident of Wuhan would cost two billion yuan ($282 million), to uncertain effect. “I hope that Wuhan’s government officials can calm down,” he adds.

Also earlier this week, Xi Jinping was in Shanxi province. The propaganda focus during the visit was about the goal of establishing a moderately prosperous society. Xinhua said that he “inspected work on coordinating the regular epidemic response with economic and social development, and on consolidating the poverty eradication results.” This commentary underscores the political importance of the goal of poverty alleviation, despite the economic slowdown and threat of outbreaks.

Finally, on the foreign policy front, this SCMP piece offers a bit of insight with regard to the pushback against “Wolf Warrior” diplomacy. Here’s Shi Yinhong, scholar and former advisor to the State Council: “The aim is to promote the Chinese political system as superior, and to project the image of China as a world leader in combating a global health crisis. But the problem is, [these efforts] have failed to recognise the complexities that have emerged on the global stage during the pandemic, and they are being done too hastily, too soon and too loudly in tone, so there is a huge gap between what is intended and what is achieved.” 

Yan Xuetong to Caixin on April 30: “Some media outlets compare the progress made in China and in Europe in fighting against the epidemic, and they attribute [China’s relative success] to the difference in political systems. This kind of rhetoric risks creating a backlash in some of the European countries still battling the outbreak. Any direct or indirect criticism of other countries’ political systems will only exacerbate the ideological conflict.”

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V. Breaking Up?

US President Donald Trump upped the rhetoric on China this week. Speaking on Fox Business, he warned that “we could cut off the whole relationship...You’d save $500 billion if you cut off the whole relationship.” He further warned that while the US would be careful in doing so, his administration was examining Chinese companies that trade on the NYSE and Nasdaq stock exchanges but don’t follow U.S. accounting rules. “We are looking at that very strongly,” he said. Bloomberg reports Trump also threatened to replace board members of the Thrift Savings Plan, a retirement plan for federal workers, if they don’t follow through with a plan to defer shifting some of its investments into the stocks of Chinese companies. Reacting to reports of Trump’s threats to cut off ties, here’s a pertinent question from Global Times: “Is Trump totally insane?"

Meanwhile, as expected, China is a big factor in the developing Trump-Biden race. NYT reports that “in May alone, the Trump campaign has spent or reserved about $7 million on television airtime in local markets, fueling negative ads that repeat xenophobic tropes regarding the Chinese origin of the coronavirus, and unearth positive comments Mr. Biden has made about China in the past...The new ads that focus on China have two lines of attack. One criticizes Mr. Biden for saying the president’s decision to restrict travel from China because of the coronavirus outbreak was ‘hysterical xenophobia.’ But most of the ads simply highlight statements that Mr. Biden made when he was vice president, like ‘China is not our enemy’.” Meanwhile Reuters has Jake Sullivan, a senior adviser to Biden, as saying: “The vice president intends to do two things: hold Trump accountable for a catastrophic set of failures in his approach to China, and a colossal gap between tough talk and weak action." 

Across the political spectrum views in the US are hardening. This week, US National Security Advisor Robert O’Brien said that People across the globe are going to rise up and tell the Chinese government that “we can no longer have these plagues coming out of China,” whether it is from labs or wet markets, neither one is a good answer. On Covid, he said “we know it came from Wuhan and I think there’s circumstantial evidence that it could have come from the lab or the wet market. But, again, if you’re China, neither one’s a good answer...We’ve had five plagues from China in the last 20 years. We’ve had SARS, avian flu, swine flu, COVID-19 now and how longer can the world put up with this terrible public health situation that you’ve got in the People’s Republic of China that is being unleashed on the world.” China’s MOFA’s response to this: “Scapegoating will not help the US solve its own problem. US politicians should rather focus on enhancing their response efforts and international cooperation, which is the right way out of this crisis.”

NYT reports that Republican attorneys general in 14 states have written to Trump to form a state-federal partnership to hold China accountable for damages caused by the spread of the new coronavirus. Senator Lindsey Graham, a close ally of Trump, is meanwhile pushing for the “COVID-19 Accountability Act.” This would require the president to make a certification to Congress within 60 days that China had “provided a full and complete accounting to any COVID-19 investigation led by the United States, its allies or U.N. affiliate such as the World Health Organization.” It would also require certification that China had closed all “wet markets” that can expose humans to health risks, and released all Hong Kong pro-democracy advocates arrested in post-pandemic crack-downs. Responding to these changes in the US, Zhao Lijian remarked on Thursday that “We urge the US side to stop smearing China, pushing anti-China bills or pursuing frivolous litigation against China. They should focus on combating the virus and saving American lives instead of playing the boring and preposterous blame game.” But there’s more that Beijing appears to be hinting at.

Naming a number of American officials, a Global Times piece warns of countermeasures and sanctions. The piece says: “At least six lawsuits have been filed against China in US federal courts, while some lawmakers have also introduced bills to make it easier to sue China despite legal hurdles and no realistic possibility for US states to achieve their goal.” It further adds: “China could impose the countermeasures on the relevant states represented by those anti-China lawmakers, including measures targeting trade and exchanges…For some US states, China's sanctions might have a direct impact on the upcoming elections in November if local Republicans have been targeted by the Chinese government for their groundless accusations."

Amid all this, the trade deal that was signed between the two sides appears to be holding for the moment. Reuters reports that Chinese officials are keen to keep up purchases. Zhang Hua, vice general manager of China, COFCO International, says that China will speed up farm purchases. And now there are reports that Australia’s loss could be American’s gain, at least when it comes to barley.

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VI. The Long & Short of It

Virus Origins Probe: Expect the World Health Assembly meeting next week to be very interesting. Reports state that the European Union will put forward a proposal to the calling for an independent probe into the origins of the coronavirus. In addition, Australian Prime Minister Scott Morrison told reporters in Canberra this week that he has written to all Group of 20 leaders this week in his bid to create support for the investigation into how the virus started and spread. 

Meanwhile, WSJ reports that Beijing appears to be stalling international efforts to find the source of the virus amid an escalating US push to blame China. The report says: “Initially, Chinese officials seemed to be homing in quickly on the origins of the pathogen, they said. China’s disease-control agency said in January it suspected the virus had come from a wild animal at the Huanan market and that identifying the beast was “only a matter of time.” Since then, Chinese officials have increasingly questioned whether the virus originated in the country and rejected calls for an international investigation from U.S., Australian and European officials.” It adds: “Although Chinese officials said they were tracing the suppliers of wild meat in the market, they have not published any information on those people or animals they handled...Officials from the Chinese Center for Disease Control and Prevention told (a visiting WHO) mission they would eventually be able to create an epidemiological map of the market showing details such as which animals were where, and which patients visited which section of the market, according to Dr. Lane. Such a map has yet to be shared...The WHO has since made regular requests for updates on the search from the Chinese government, but has received none, the organization said in an emailed response to the Journal.”

Coercing Australia: It’s been a tricky few years of diplomacy between China and Australia, and this just continues. This week Beijing’s economic coercion was on display. China suspended beef imports from four of Australia’s largest meat processors. This came just days after China proposed introducing an 80% tariff on Australian barley shipments. All of this because of the push by Canberra for a probe into the origins of Covid-19. Australian Trade Minister Simon Birmingham has reportedly requested a call with Chinese Commerce Minister Zhong Shan. But things haven’t moved forward. China’s Foreign Ministry says that the beef ban is an outcome of “repeated violations of inspection and quarantine requirements.”

Here’s Global Times explaining why this is not “economic coercion,” while actually letting us know that it is indeed economic coercion. “You can't have your cake and eat it too is a proverb that could be of use to some Australian officials, who continue to escalate tensions with China while hoping bilateral trade will remain intact...China has made it clear that the recent beef import suspensions and tariff threats on barley shipments are not politically motivated, and that its decisions are made based on normal market rules and facts. While China has no interest in "economically coercing" Australia, as was speculated by some politicians, it is no secret that unfriendly moves from the Morrison government have thrown bilateral ties into a deep freeze.” 

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Hong Kong Police Cleared: A report by Hong Kong’s Independent Police Complaints Council has defended the force’s handling of the 2019 protests. Here’s the IPCC’s full report. The document concludes that “from the facts collected in this study, it can be seen that the use of force by the Police in the past months of protests has been in reaction to illegal action by protesters and for protection of themselves and others when attacked by violent protesters.” Soon after it was made public, there has been much criticism. “The Independent Police Complaints Council’s report is a shocking whitewash which shows that there is no viable mechanism in Hong Kong to ensure accountability either for police brutality or police complicity with violence by criminal thugs,” said Benedict Rogers, co-founder and chair of Hong Kong Watch. “This is just one-sided, it’s the police coming out with their own report -- the pro democracy movement will reject this. The general demand is for an independent commission of inquiry. This is not only based on a demand to know the truth, it’s seen as a very important gesture and concession,” said Joseph Cheng, a retired political science professor and veteran pro-democracy activist.

This settles nothing. Expect it to instead galvanise the opposition. Meanwhile, a 21-year-old Hong Kong lifeguard, the first anti-government protester to plead guilty to the charge of rioting during last year’s unrest, was sentenced to four years’ jail on Friday. Also pro-Beijing NPCSC member Tam Yiu-chung this week called for the Carrie Lam administration to push ahead with legislation on national security law under Article 23 by August next year. But it’s not all sticks from Beijing. This week, the PBOC together with the country’s banking, securities and foreign exchange regulators announced a slew of potential measures to support the so-called Greater Bay Area.

Also Read: Hong Kong history exam questions sparks China rebuke

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Thank you for subscribing to the Eye on China newsletter. This newsletter is written by Manoj Kewalramani, Fellow-China Studies at The Takshashila Institution. If you have any suggestions or feedback, do feel free to share at 
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