Geo-Strategic Trend - 12. page

The Georgian government announced that a Chinese consortium will build a strategic port on Georgia’s Black Sea coast, a move that could strain Georgia’s relations with the West. The decision comes just after Georgia’s parliament attempted to pass a controversial “foreign agents” law.

The Chinese consortium that will build the port includes Chinese state-owned enterprises with a history of international controversies, ranging from fraud allegations in the Philippines to bribery in Bangladesh. Two of the companies in the consortium have even been banned from participating in World Bank-funded construction projects. This choice by the Georgian government could further escalate tensions between Georgia and the West.

The port project in Anaklia, a small Black Sea resort town, is seen as a critical part of the “Middle Corridor,” a global trade network between Europe and Asia. Critics worry that giving China control over this key port would allow them to dominate a crucial trade route.

The main company in the Chinese port-building consortium is the China Communications Construction Company (CCCC), a key player in China’s Belt and Road Initiative. Despite its global presence, CCCC faces scrutiny for its overseas practices. These include fraud scandals in the Philippines and contract termination controversies in Tanzania.

The Georgian port deal marks the country’s second attempt to build a deep-sea port in Anaklia; a previous attempt led by Georgia’s TBC Bank and the U.S. firm Conti International was canceled in 2020 amid political controversies.

Some see the timing of the Georgian government’s decision regarding port construction as a message about Georgia’s geopolitical leanings. The move comes at a time when Georgia’s relationship with the West is already strained due to the Georgian “foreign agents” law. According to Wikipedia, the foreign agents law “would require non-governmental organizations (NGOs) to register as foreign agents or ‘organizations carrying the interests of a foreign power’ and disclose the sources of their income if the funds they receive from abroad amount to more than 20% of their total revenue.”

Sources:

Voice of America, June 4, 2024
https://www.voachinese.com/a/china-georgia-controversial-blacksea-project/7641737.html

Wikipedia, Retrieved Jun 6, 2024
https://en.wikipedia.org/wiki/2023%E2%80%932024_Georgian_protests

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that Chinese electric vehicle manufacturer Great Wall Motors will close its European headquarters in Munich, Germany. The company is facing dual pressures of slowing electric vehicle sales in the European market and uncertainty around EU policy. It also faces stiff price competition from other EV companies, some of which are offering large discounts to boost their car sales.

Great Wall Motors’ headquarters are expected to close at the end of August, with the company expected to hand off responsibility for European operations to a domestic department in China. Around 100 employees have received layoff notices so far. Employees to be laid off include Steffen Cost, head of Great Wall Motors’ European operations.

The closure of Great Wall Motors’ EU headquarters does not mean that the company will withdraw from the European market entirely. Sales business and after-sales services in the European market will still be handled by local dealers. Business units in China will conduct remote supervision and management. The previous market expansion plan, which include plans to enter eight new countries in Europe, will be suspended.

Great Wall Motors sold 1,621 units in the EU during the first four months of this year — the overall scale of the company’s market share is very small.

The EU has launched an investigation into possible Chinese government subsidy of Chinese electric vehicles; it may impose tariffs on Chinese EVs in the future. Recently, many Chinese car brands have planned to build factories in Europe to avoid the threat of tariffs.

Source: Sina, May 30, 2024
https://finance.sina.cn/2024-05-30/detail-inawyyru7266581.d.html?from=wap

Xinhua recently reported that the Chinese Ministry of Commerce has announced an anti-dumping investigation into imports of copolymer polyoxymethylene originating from the European Union, the United States, Taiwan and Japan. Chinese manufacturers in the copolymer polyoxymethylene industry have officially submitted an anti-dumping investigation application.

According to Xinhua, copolymer polyoxymethylene has good comprehensive mechanical characteristics such as high mechanical strength, fatigue resistance, and creep resistance. It can partially replace metal materials such as copper, zinc, tin, and lead. It can either be used directly or after modification, with applications in auto parts, electronic appliances, industrial machinery, daily necessities, sports equipment, medical equipment, pipe fittings, construction materials and other fields.

Deutsche Welle (DW) Chinese Edition reported that the Chinese anti-dumping investigation will last for one year and might be extended for another 6 months after that “under special circumstances.” Industry analysts expressed the belief that this Chinese government’s investigation is a countermeasure against Western countries’ recent intensification of crackdowns on Chinese electric vehicles and other products. China’s polyformaldehyde production capacity is 590,000 tons/year. Most of this capacity is low-end output. In recent years, China has typically needed to import over 300,000 tons of polyformaldehyde annually, with a large portion of imports being used in the high value-added auto parts industry as well as the high-end electronic and electrical industries.

Sources:
(1) Xinhua, May 19, 2024
http://www.xinhuanet.com/fortune/20240519/7a3f2ddecc404265b18569cb1e0ed119/c.html

(2) DW Chinese, May 19, 2024
https://p.dw.com/p/4g2r7

In February, exiled Chinese writer Yuan Hongbing revealed that China aims to use the Kuomintang’s (KMT’s) influence in Taiwan’s legislature to advance its united front strategy, sparking a political storm. Yuan stated in an interview that the information came from a “princeling” (child of a Chinese revolutionary leader) whom Xi Jinping does not dare to challenge. The Chinese Communist Party (CCP) wants to turn the KMT into the vanguard force of the People’s Liberation Army to achieve unification of Taiwan with mainland China from within.

According to Yuan’s analysis, the CCP is not just using military intimidation to destabilize Taiwan; it is also using propaganda, deployment of agents, and expansion of the KMT’s legislative power to override the Taiwanese administration. Yuan said that the CCP wants the KMT to pave the way for Xi Jinping to fully occupy Taiwan, and that the recent military drills are aimed at supporting the CCP’s agents in Taiwan.

While some members of Taiwan’s Democratic Progressive Party may have been co-opted by Beijing, Yuan said that the party as a whole rejects CCP influence. This stands in contrast to the political attitude of the pro-China KMT party.

Yuan stated that the CCP’s Taiwan policy has shifted from coercion and enticement to psychological warfare, aiming to demoralize Taiwanese. He praised the peaceful protests outside the of Taiwan’s Legislature as social forces advocating for self-defense that could resist Beijing’s intimidation.

Yuan, a former Beijing University law professor, was exiled from China for supporting the 1989 pro-democracy movement.

Source: Central News Agency (Taiwan), May 24, 2024
https://www.cna.com.tw/news/acn/202405240174.aspx

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, according to the European Chamber of Commerce in China, China may be considering raising temporary tariffs on imported cars from the United States and the European Union to up to 25 percent. This potential move would have implications for European and U.S. automakers. This news comes after the Biden administration increased tariffs on Chinese electric vehicles to 100 percent, and the EU is investigating the unfair advantages that Chinese automakers receive due to government subsidies.

Liu Bin, chief expert at the China Automotive Technology and Research Center, said in an interview that, according to World Trade Organization rules, China’s temporary tariff rate on imported cars can be raised to a maximum of 25 percent. The Chinese government tariff adjustments may cover imported gasoline cars and sports utility vehicles with engine displacements greater than 2.5 liters.

Amid price wars and a slowdown in China’s domestic economy, Chinese EV makers are expanding overseas, prompting accusations from the U.S. and EU countries that China is exporting excess EV production capacity. China’s auto exports have also raised Western concerns regarding the cybersecurity of China’s high-tech cars. In 2023, China imported 250,000 cars with engine displacements greater than 2.5 liters, accounting for approximately 32 percent of all imported cars. By comparison, China exported 1.55 million electric vehicles last year, according to Chinese customs data.

Source: Lianhe Zaobao, May 22, 2024
https://www.kzaobao.com/cngov/2024-05/22162313.html