Wolf-warrior diplomacy + Indo-Pacific + Montenegro

Last week, the Chinese Ambassador to France, Lu Shaye, presented his views on the wolf-warrior diplomacy in interviews published by the Chinese news site Guancha.cn and the French newspaper L’Opinion.

What you need to know

• Diplomatic portrait: Lu is one of China’s most outspoken diplomats in Europe. In March, French media reported on his attempts to prevent Senator Alain Richard from visiting Taiwan and brought to light his letter to researcher Antoine Bondaz calling him a “little rascal” and a “crazy hyena.”
• Public opinion war: Lu argued that the West is waging a “war of public opinion (舆论战)” on China. According to Lu, China suffers from not having the “powerful media machine that the West has.” Consequently, he argues, it struggles with communicating its messages via Western outlets and should build up its discourse shaping capacity in the West, including in Europe.
• Wolf-warrior logic: China’s assertive style is a means of self-defense, and Chinese diplomats are “soldiers who defend China” countering the “crazy hyenas” attacking the country. In Lu’s words, Chinese diplomats “evaluate our own work not by how foreigners see us, but how the domestic public sees us.”

Quick take

Lu’s comments closely follow President Xi Jinping’s recent remarks about China’s need to “struggle” against the West to boost China’s discourse power and create a “trustworthy, lovable, respectable” image. European countries can expect an intensification of Chinese diplomats’ attempts to contain unfavorable narratives and to inject favorable ones into the public sphere. This could include experimenting with new channels of communication to connect to the European public, as shown by the China Global Television Network’s (CGTN) efforts to incentivize influencers and vloggers to create content promoting a positive image of China. If successful, such decentralized communication efforts conducted by European citizens could become more sophisticated and harder to track than already existing Chinese propaganda operations.

Read more

• Guancha.cn [CN]: Our diplomatic style has changed, and you must adapt to it
• Embassy of the PRC in France: Interview granted by Ambassador Lu Shaye to l'Opinion
• China Media Project: Influencers, activists and diplomats

The EU and its Indo-Pacific partners have been exploring avenues to boost security cooperation to address China’s growing maritime influence.

What you need to know

• Japan lobbies EU: Speaking to the European Parliament subcommittee on security and defense on June 17, the Japanese defense minister lobbied the European Union to boost its military and security involvement in the Indo-Pacific region in attempts to counter expansion of Beijing’s influence in the region.
• EU-India exercise: Between June 18 and 19, the EU (represented by French, Italian and Spanish vessels) and India conducted a joint naval exercise in the Gulf of Aden. While the exercise was part of the anti-piracy Atlanta operation, the two sides also released a statement expressing support for a vision of an Indo-Pacific rooted in “democracy, rule of law, transparency, freedom of navigation.”
• Borrell’s take: On June 22, the High Representative Josep Borrell released an opinion piece discussing the EU’s strategic priorities in the Indo-Pacific. The first of the strategic issues mentioned was maritime security, discussed in the context of the European foreign trade passing through the South China Sea. Borrell claimed that the EU does “not aim to create rival blocks,” but highlighted the bloc’s interest in upholding “democratic rights” and international law in the region as well as its ambition to extend the EU’s Critical Maritime Routes project to Indo-Pacific.

Quick take

The EU has little appetite for military tensions with China in the Indo-Pacific. But the bloc increasingly acknowledges that Beijing’s operations in the Indo-Pacific challenge the region’s stability, international rules and by extension Europe’s economic security. Still, there is no clear consensus among member states how far the security cooperation with Indo-Pacific partners should go. A clear signal would have been a joint European maritime mission to the region. So far, such operations have only been carried out by individual member states such as France or Germany.

Read more

• EEAS: EU-India Joint Naval Exercise
• Geopolitique: What the EU can do in and with the Indo-Pacific
• SCMP: Japan urges Europe to have stronger military presence in Asia to tackle China

On June 17, Montenegro’s finance minister Milojko Spajic announced that an undisclosed state-led European financial institution is ready to service his country’s debt to China. The debt in question is the EUR 809 million loan for the construction of a 41 km stretch of Bar-Boljare highway.

What you need to know

• How we got here: The project began in 2014 and is led by the China Road and Bridge Corporation with 85 percent of its financing provided by China’s ExIm Bank. The repayment was supposed to start this July. In April, the European Commission rejected the unprecedented plea by the Montenegrin Prime Minister for a block to service the debt. In May President Xi Jinping reportedly expressed his willingness to discuss extending the grace period until the end of 2022. China reportedly owns over 20 percent of Montenegro’s external debts.
• What now: Brussels has been reportedly working with the German Reconstruction Credit Bank, the French Development Agency state-development banks and the Italian state lender CDP to facilitate an alternative debt financing solution for Montenegro. Speaking to a parliamentary committee on June 17, Minister Spajic said that the discussions on the refinancing are “in the final phase.” According to Spajic the deal will change a USD-based 2 percent interest loan to China into a EUR-based 1 percent loan with a six-year grace period and repayment of 20 years.

Quick take

The debt refinancing negotiations show that the EU needs flexible solutions to counter China’s presence in the Balkans, as addressing erosion of sustainability and transparency standards puts the EU institutions in an awkward position. A few years ago, European Investment Bank and the European Bank for Reconstruction and Development advised against the launch of the Bar-Boljare highway project. Direct EU engagement in such a project, which was also deemed environmentally hazardous, would mean that the EU deviates from its own norms. Moreover, financing is only part of the problem as the EU needs to tackle the incorrect wider perception of falling behind Beijing in supporting and engaging with the region.

Read more

• Reuters: Montenegro in 'final phase' of talks with Europe to cut China debt
• MERICS: Global China Inc. Tracker - Beijing fills gaps left by Brussels in the Western Balkans

Chinese brands lead as EURO 2020 sponsors

Four out of the twelve brands sponsoring the European Football Championships come from China – Hisense, Alipay, Vivo and Tiktok - making it the country with the highest number of sponsors.

• Caixin: Chinese Brands Top Euro 2020 Sponsorship
• Global Times: Chinese companies grab attention as sponsors at UEFA event

European Parliament’s INTA reviews new EU-China strategy

On June 17, the International Trade Committee (INTA) approved the “new EU-China strategy” currently developed by the European Parliament, including a call to launch a bilateral investment treaty with Taiwan.

• European Parliament: Draft opinion of INTA on a new EU-China strategy
• Politico: MEPs push Brussels to follow Biden on Taiwan trade
• Twitter: INTA Rapporteur Iuliu Winkler on the committee’s opinion vote

Swedish court upholds Huawei ban

On June 22, a Swedish court upheld a ban on 5G equipment provided by Huawei increasing the chances of potential Chinese retaliation against Ericsson in China.

• Reuters: Swedish court upholds ban on Huawei selling 5G network gear
• SCMP: Huawei 5G ban is upheld by Swedish court in further blow to Chinese telecoms giant’s European plans

Lithuania donates vaccines to Taiwan

On June 22, Lithuanian government approved a donation of 20,000 vaccines to Taiwan with Foreign Minister Gabrielius Landsbergis stating that “freedom-loving people should look out for each other.”

• Twitter: Lithuanian Foreign Minister on the vaccine donation to Taiwan

Orban's challengers pledge to halt Chinese university, railway project

On June 22, in a joint letter addressed to President Xi Jinping six leading Hungarian opposition candidates (ahead of next year elections) vowed to immediately halt investments into the Fudan University campus and Belgrade-Budapest railway projects should they get elected.

• Euronews: Orban's challengers pledge to halt Chinese university, railway project
• Napi.hu: They will shut down Fudan University and Belgrade railways after the election - a letter written to China's president by the opposition