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Geo-Strategic Trend

Cooperation between China and Mexico

According to the Mexico News newspaper, China’s investment in Mexico has continued to grow, while Chinese companies engaged in exporting to the United States are also showing interest in Mexico. Last year, China invested a record of almost $500 million in Mexico, compared to less than $300 million in 2020 and less than $200 million in 2019. Within two years, “Hofusan Industrial Park,” the first industrial park built by the Chinese in North America, expects to have 35 companies from China. In a recent report, Bloomberg noted that the industrial park has become a haven for China to bypass U.S. tariffs and restart supply chains in the wake of the epidemic. In this way, it takes advantage of the tax exemptions between Mexico and the United States under the framework of the United States–Mexico–Canada Agreement (USMCA).

Victor Jeifets, a professor at St. Petersburg State University, told Sputnik News: “The Americans have leverage on Mexico, which is very interested in the U.S. market. At the moment, with the growth of Chinese companies’ influence there, the United States will not go down the road of intensifying conflict with Mexico. The United States needs allies when dealing with China-related issues, and will not take the risk of forcing Mexico to make a choice. Therefore, if the cooperation between China and Mexico does not undermine the USMCA, the United States will not set up obstacles.”

According to Mexican media reports, some new Sino-Mexican cooperation projects have been announced. They include a $1 billion investment over four years by Chinese solar panel maker Solarever Group in a Chinese-owned automotive battery plant in Jalisco. China’s Lingong Machinery Group announced plans to build a $140 million manufacturing plant in Nuevo León, on Mexico’s northern border.

Source: Sputnik News (Russia), September 24, 2022
https://sputniknews.cn/20220924/1044226872.html

Zelensky: China Is “Ambiguous” on Russia’s Invasion

Primary Taiwanese news agency Central News Agency (CNA) recently reported that Ukrainian President Volodymyr Zelensky said not long ago that he wants to mend relations with China. However, he described China’s position on Russia’s aggression into Ukraine as “ambiguous.” Zelensky said in a French media interview that he hopes China can help Ukraine, but he also said it would be “difficult,” at the moment, to arrange a call with Chinese President Xi Jinping. Zelensky also said that before Russia’s aggression against Ukraine seven months ago, there were ‘channels of communication” between Kyiv and Beijing. The two countries used to have “a lot of economic and trade cooperation.” Chinese Foreign Minister Wang Yi and Ukrainian Foreign Minister Dmytro Kuleba met on the sidelines of the UN General Assembly in New York last week. Kuleba later tweeted that Wang Yi told him that China respects Ukraine’s sovereignty and territorial integrity and opposes the use of force as a way to resolve differences between countries.

Source: CNA, September 24, 2022
https://www.cna.com.tw/news/aopl/202209240220.aspx

BBC Chinese: How Much Russian Oil Did China and India Buy?

BBC Chinese recently published a fact-check article looking into what the latest transportation data showed. China is buying more Russian oil, and India is ramping up imports from Russia as well. Russia’s invasion of Ukraine has been going on for more than half a year. Asian countries bought oil and gas from Russia at a discount as the West has imposed sanctions on Russia and plans gradually to to reduce its energy dependence on Russia. Since Russia invaded Ukraine, Russian energy exports to the EU have fallen.  Never-the-less, the EU is still buying huge amounts of oil, more than a million barrels a day. However, EU member states have said that, starting in December, they will ban all oil shipped by sea and most Russian oil is transported by sea rather than through pipelines. India and China, however, have recently become big buyers, accounting for more than half of all seaborne oil exports from Russia. In March, China and India imported more oil from Russia than the 27 EU member states combined. Ocean shipping information showed that India’s import of Russian oil known as Urals and ESPO (Eastern Siberia Pacific Ocean) showed sharp increases. Since March, China has also been buying a lot of Urals and ESPO. In early July, China reportedly bought a record amount for the second month in a row. By contrast, Japan has made it clear that it will phase out imports of Russian oil, while South Korea’s imports of Russian crude oil have also declined. While the price of Russian oil is attractive, India’s big refiners are facing difficulties in how to finance these purchases due to sanctions on Russian banks. One of the options India has is to trade in local currencies. Russia also asked India to pay in UAE currency. China’s state-owned oil companies are increasingly using Chinese Yuan instead of US. Dollars to buy oil from abroad. In July, Russia remained China’s largest oil supplier for three consecutive months.

Source: BBC Chinese, September 11, 2022
https://www.bbc.com/zhongwen/simp/world-62834711

The China Railway Construction Corporation (CRCC) Is Delinquent in Malaysia

More than 50 subcontractors and local suppliers for the Light Rail Transit 3 (LRT3) packages GS05 and GS06 in Malaysia protested to China’s Railway Construction Corporation (CRCC) because they have been delinquent on payments for over a year.

The peaceful demonstration took place at Seksyen 1, Shah Alam, on September 14.

The protesters said that the China Railway 17th Bureau Group, or CRCC 17, owed them payments coming to a total of 25 million MYR (Malaysian Ringgit), or US $5.5 million. CRCC 17 has promised to make the payment several times in the past, but has never done so.

In the past couple of years, China’s real estate companies have struggled to pay their debts on time, but those were mostly private companies and related to construction projects within China. This case involves a state-owned enterprise that is delinquent on an overseas project.

Source: eNanYang.my, September 14, 2022
https://www.enanyang.my/财经新闻/抗议拖欠2500万-承包商要中铁17局还钱

Boston University: How Much African Debt Did China Forgive?

On August 19, 2022, China announced it would waive 23 interest-free loans (IFLs) for 17 African countries. The loans  had been due by the end of 2021 . Beijing didn’t specify the details. The Global Development Policy Center of Boston University estimated that each of the forgiven debts might be between $45 million and $610 million, with a possible total of $2.2 billionl, or around 1 percent of the $159.98 billion that China committed to lend to African countries from 2000 to 2020.

The research also pointed out that,  from 2005-2022, Beijing did ten debt cancellations for African countries including the most recently announced one. IFL provisions and cancelations are important diplomatic and symbolic tools in China’s lending practices and are likely to continue to be in the future.

Source: Boston University, September 9, 2022

China’s Interest-Free Loans to Africa: Uses and Cancellations

 

 

RFA Chinese: WeChat Notified Overseas Users that Data will be Sent to China

Radio Free Asia (RFA) Chinese Edition recently reported that a large number of overseas WeChat users have been notified that, if they accept the WeChat service agreement, their personal information will be sent back to servers in China. Experts pointed out that WeChat once intended to set up domestic and overseas versions to avert any allegations of infringement overseas. The fact is, however, that WeChat has never stopped acting as the CCP’s censorship proxy. Jurists are calling on Western countries to legislate to ban Chinese apps to prevent the CCP from its long-arm intrusions. On September 6, WeChat users in many countries said that when they were about to read the content of their WeChat subscription, they suddenly received a prompt saying that once the overseas users activate the WeChat function, their personal information will be sent back to China for processing. Under international pressure and the requirements of privacy protection regulations, in September last year, WeChat “separated” into the domestic version of Weixin and the international version of WeChat. It then asked non-China-bound mobile phone users to re-sign the WeChat agreement to show that the company complied with the  laws and regulations of the host country. So now it has just torn off the original mask. Experts said that the Chinese government has always used WeChat in China as a tool to control society and censor speech, which is actually part of its establishment of China’s high-tech totalitarian control, and it has always used WeChat as a tool to export censorship overseas. The United States and other Western countries should consider and re-evaluate WeChat’s threats to national security, data security, personal privacy, etc. Western countries should pass legislation on Chinese apps, or even block Chinese apps, like India has done.

Source: RFA Chinese, September 7, 2022
https://www.rfa.org/cantonese/news/wechat-09072022123951.html

China-Latin America Cooperation in Science and Technology Innovation

According to China’s official newspaper People’s Daily, the 2022 China-Latin America and the Caribbean Forum on Science, Technology and Innovation was recently held via video conferencing. More than 20 participant representatives from the science and technology authorities in Latin American and Caribbean countries participated online. During the forum, China’s Ministry of Science and Technology and the counterpart officials in Latin American countries signed memorandums of understanding on cooperation to accelerate the construction of sustainable food innovation centers. Participants expressed their willingness to continue to deepen the cooperation between Latin America and China in the fields of clean energy, digital technology, agricultural technology, and satellite communications.

The report mentioned the Sino-Bolivian satellite cooperation project and China’s Sinovac Biotech’s vaccine plant in Chile.

Source: People’s Daily, September 8, 2022
http://paper.people.com.cn/rmrb/html/2022-09/08/nw.D110000renmrb_20220908_4-03.htm

Oriental Daily: Russia Bought Artillery Shells and Rockets from North Korea

The popular Hong Kong newspaper Oriental Daily recently reported that, according to newly declassified U.S. intelligence, the Russian Defense Ministry has purchased millions of rockets and artillery shells from North Korea, a move that shows that global sanctions have severely restricted Russian supply chains and forced Russia to turn to “excluded countries” for military supplies. According to British media, Russia only received the first batch of drones made in Iran very recently. Apparently, the U.S-led sanctions and export controls are hurting Russia’s ability to acquire military supplies. No details were provided about the North Korean deal on exact weapons, timing or size of the shipment. The transaction could not be independently verified at this time. Russia is expected to try to buy more North Korean arms in the future. North Korea has been seeking closer ties with Russia as European and Western countries have pulled out. North Korea even hinted at sending construction workers to help rebuild Russian-occupied territory in eastern Ukraine. North Korea’s ambassador to Moscow recently met with envoys from Ukraine’s Donbas region, two Russian-backed separatist territories, and expressed optimism about cooperation in the “field of labor migration.” North Korea is the only country other than Russia and Syria to recognize the self-proclaimed republics of Luhansk and Donetsk.

Source: Oriental Daily, September 6, 2022
httpps://www.orientaldaily.com.my/news/international/2022/09/06/510520