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MERICS: China Update


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Frank N. Pieke (CEO MERICS)
Kerstin Lohse-Friedrich (Director of Communications MERICS)

TOPIC OF THE WEEK:

Detention of Interpol president Meng Hongwei

China risks international reputation with arrest of Interpol president The detention of the Chinese president of Interpol in China has raised doubts over Beijing’s international trustworthiness. The Ministry of Public Security confirmed on October 8 that Meng Hongwei is under investigation for corruption accusations.The former vice-minister of public security had disappeared on September 25 while traveling from the Interpol headquarters in Lyon to China. China’s anti-corruption body, the National Supervisory Commission, is handling the case.  
The secretive detention of Meng has little precedence in international affairs. Read more...

CHINA AND THE WORLD

Speech by US vice-president Pence increases tensions with Beijing Relations between the United States and China have soured further after an aggressive speech by US vice-president Mike Pence. In his address at the conservative Hudson Institute in Washington D.C. on October 4, Pence claimed that China attempted to influence US public opinion and the upcoming congressional elections with the goal to undermine US president Donald Trump.„Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States,” Pence said. Read more...

Report on alleged hardware hack reignites fears of cyber espionage from China A report about an alleged Chinese hack into hardware used by US tech companies has reignited the debate about the risks of cyber espionage from China. Bloomberg Businessweek reported on October 4 that corrupted microchips had been found in motherboards used by companies including Amazon and Apple, as well as in secure government servers.Apple and Amazon issued strong denials of the report. The UK’s National Cyber Security Centre as well as the US Department of Homeland Security said they had no reason to doubt the companies’ assessments. The report is difficult to verify at this point. Read more...

POLITICS, SOCIETY AND MEDIA

Agreement between China and Vatican shows first results For the first time two Chinese bishops are participating in a synod in Rome. Their participation is the first visible outcome of the “Provisional Agreement on the Appointment of Bishops” between the Vatican and China that was reached on September 22, 2018. The agreement aims to regulate the appointment of bishops in a way that allows both Beijing and Rome to have a say in the process. Whereas the compromise was praised by supporters of the pope as a step towards the unification of the church, critics like the former archbishop of Hong Kong, Cardinal Joseph Zen, view it as a sellout of Catholics in China. Read more...

Hong Kong denies visa to foreign journalist for the first time For the first time since Hong Kong became a part of China, Hong Kong authorities have denied a work visa renewal for a foreign journalist. Victor Mallet, Asia news editor of the Financial Times and vice president of the Foreign Correspondents’ Club Hong Kong has to leave the former British crown colony within seven days. Mainland China has frequently refused to prolong visa from journalists in the past years and expelled them from the country. Hong Kong was previously considered a safe place for journalists who did not meet Chinese visa requirements due to their critical reporting on China. Read more...

ECONOMY, FINANCE AND TECHNOLOGY

New cyber security regulations give state easier access to corporate data  Beijing strengthens its access to corporate data through new cyber security regulations. This increases the unease felt by foreign businesses in China. Starting on November 1, agents of the Ministry of Public Security and the police may conduct on-site inspections and remotely access networks of internet service providers to safeguard national security.  The regulations were published on the website of the Ministry of Public Security on September 30. They add more details to the vague and controversial Cyber Security Law that entered into force in the summer of 2017. Read more...

Shanghai and London stock exchanges set up link China is opening its stock market to European financial markets. A link between the London and Shanghai stock exchanges is expected to be operative by December. Meanwhile, the home appliance maker Hai’er is set to be the first Chinese company to issue shares at the Frankfurt stock exchange in the coming days.The new programs are part of China’s cautious opening to global financial flows. The system would allow listed companies to issue depository receipts and enable investors to purchase these in either stock market. Read more...

THE EUROPEAN VIEW

Italy embarks on course of all-out cooperation with China After the formation of a right-wing populist coalition government in June, Italy has started to craft an unprecedentedly active China policy - as a balance to a perceived over-reliance on the EU. A “China Task Force” led by the China-friendly expert Michele Geraci was established and mandated to give new impetus to Italian economic actors, especially public ones, to seek greater cooperation with Beijing. Read more...

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