Geo-Strategic Trend - 152. page

Well-known Chinese news site Sina recently reported that, based on official government documents dated February 23, Li Shufu, founder and chairman of China’s Geely Automobile, acquired 9.69 percent (around US$9 billion) of German automaker Daimler AG, thus becoming its largest shareholder. Daimler is one of the world’s top ten automakers, the world’s largest commercial vehicle manufacturer, and the world’s second largest truck manufacturer. It is also famous for its Mercedes-Benz product line. Geely Automobile is China’s largest privately-owned automaker. Li Shufu, currently also the owner of Volvo, described his strategic vision as forming an alliance with Daimler to become the “final two or three” automakers that will dominate the global market in the future. Daimler did not disclose whether Li will be on the Board of the company or not. However, Brigitte Zypries, Minister for Economics and Energy in the government of Chancellor Angela Merkel, commented on February 26, that the German government will look carefully into this deal and will seek an explanation from Daimler. She expressed the concern that it is troublesome to see Daimler have a competitor sit in its Board of Supervisors.

Sources:
(1) Sina, February 24, 2016
http://auto.sina.com.cn/news/hy/2018-02-24/detail-ifyrvspi1285407.shtml
(2) Reuters Chinese, February 26, 2016
https://cn.reuters.com/article/germany-geely-daimler-stock-0226-idCNKCS1GA1LQ?il=0

According to an article that Radio Free Asia published, Mikhail Krutikhin, a Russian expert with 25 years of experience in the energy field, recently stated that the Power of Siberia, the natural gas pipeline under construction in Eastern Siberia, represents the complete failure of Putin’s Asia policy. Krutikhin’s comments indicated that, as Beijing is abandoning Russia as a supplier of natural gas and has turned to the U.S. for natural gas imports, the official project launch date in May of 2019, would be postponed. Even if it weren’t postponed, the total volume would be less than the original projection. Power of Siberia, which is worth US$4 billion is a natural gas project for which an agreement was signed in May 2014. Due to Beijing’s lack of trust, Putin didn’t build a pipeline that directly connected to the pipeline from China but rather built a pipeline for China that was part of the pipeline that expands around the Russia-China border connecting to Vladivostok. Unlike what was officially communicated, the current project has two pipelines. One of them has a source of natural gas which is almost depleted and the other one does not even have a customer. The timing, however, is ironic in that, just when the Siberia natural gas pipeline project was about to be completed, the U.S. succeeded in its shale oil technology and China turned to the U.S. for its natural gas, which increased its domestic natural gas supply. The article stated that, meanwhile, oil prices have continued to be weak, which means that Russia may not be able to recover its investment on this project.

Source: Radio Free Asia, February 28, 2018
https://www.rfa.org/mandarin/yataibaodao/junshiwaijiao/lxy-02282018130955.html

In its Chinese Edition, South Korea’s largest newspaper, Chosun, recently reported that the daily distribution of Rodong Sinmun, North Korea’s official newspaper of the Central Committee of the Workers’ Party of Korea, dropped in volume from 600,000 down to 200,000. Sources said the Party stopped the distribution to all individual families due to a lack of paper. Rodong Sinmun is North Korea’s official newspaper; it has been serving three million Party members since 1945, with an original distribution population of 1.5 million. The volume got cut in half in the 1990’s due to an economic downturn. Last year it was reduced down to 600,000. North Korea does not produce enough paper with good quality and half of the paper supply depends on China. With the recent tightened international sanctions in place, there has been a sharp decline in paper imports. Analysts expressed the belief that the importation of paper is not the issue since paper does not fall within the scope of the sanctions and that, therefore, the cause must be the lack of funds.

Source: Chosun, February 22, 2018
http://cnnews.chosun.com/client/news/viw.asp?cate=C01&mcate=M1001&nNewsNumb=20180249333&nidx=49334

The BBC reported that China’s One Belt One Road Project is facing resistance from countries around the world. German Foreign Minister Sigmar Gabriel said at the Munich Security Conference on Saturday, February 17, that “China’s ‘One Belt, One Road’ initiative amounts to a struggle between democracy and a dictatorship, so the West should come up with an alternative.” In his speech, Gabriel said that, “China is using ‘One Belt, One Road’ to influence the world and create a value system different from that in the West and is pushing back the conflict between democracy and dictatorship to the fore again.” France’s Prime Minister Philippe endorsed Gabriel’s statement. Also in his visit to China, French President Macron verbally supported the “One Belt One Road” project with the condition that it can’t become a new hegemony path for China where the countries on the path become subordinate to China. When the Prime Minister of the United Kingdom, Theresa May, visited China, she refused to sign any written statement to support the “One Belt One Road” project, saying that she welcomes the new opportunities that the project brings, but it should also come with transparency and compliance with international standards. Meanwhile on February 19, an Australian media reported that the U.S., Australia, Japan, and India are discussing a replacement plan for China’s One Belt One Road project to counter Beijing’s international influence. It also mentioned that the prime minister of Australia will discuss the replacement plan with President Trump when he visits the U.S. later this week.

Source: BBC, February 19, 2018
http://www.bbc.com/zhongwen/simp/world-43120078

Well-known Chinese news site Sina recently reported that the South Korean leadership team had a very hasty discussion right after Kim Jong-un, in his New Year’s Day speech, expressed the intent to participate in the Winter Olympics. The United States was not in the loop regarding the decision making to send a quick and friendly response. To the surprise of the U.S. officials, South Korea notified its U.S. ally only hours before they officially proposed to North Korea that they start a negotiation session. This caused tension between South Korea and the United States, although both emphasized their unity publicly thereafter. Anonymous sources said the officials from the U.S. Embassy in South Korea expressed their unhappiness. South Korea explained that they had an extremely tight window of time to accommodate the sudden change, which left them no time to go through formal communications. A South Korean government official also expressed the hope that, when U.S. Vice President Pence visits South Korea for the Winter Olympics, he could talk more about peace.

Source: Sina, February 6, 2018
http://news.sina.com.cn/w/2018-02-06/doc-ifyremfz5586584.shtml

DailyNK, a news site based in South Korea that focuses on North Korean activities, recently reported, based on its own sources, that the North Korean authorities suddenly ordered a ban on Chinese products in the retail market, especially Chinese food products and home appliances. The current ban does not include Chinese “industrial products.” Typically, this type of ban only applies to South Korean products. The ban started in late December in some regions and is now widespread. However, most of the products in the North Korean markets are made in China, especially food and daily necessities. A large number of people complained that the ban is too “reckless,” and it is very hard to fill the market gaps with domestic products in a short period of time. Anonymous sources said that the primary goals of the Chinese product ban are to demonstrate “confidence” and also to tell people the danger of depending on nations that “help the United States.” The ban is causing major damage to those who rely on trade with China for a living. In many areas, law enforcement officers have not fully implemented the government’s policies; they have a dependency on Chinese products as well.

Source: DailyNK, January 25, 2018
http://www1.dailynk.com/chinese/read.php?num=15926&cataId=nk00600