Geo-Strategic Trend - 82. page

The United Nations Educational, Scientific and Cultural Organization (UNESCO) publishes its science report once every five years. The report for 2021 shows that the global average science expenditure, as a share of GDP, increased from 1.73 percent in 2014 to 1.79 percent in 2018.

The data show that China is the most aggressive of all countries in the world in increasing its science spending, with 44 percent of the incremental global R&D investment coming from China. In 2018, 24.5 percent of global R&D spending was from China, compared to 21.2 percent in 2014.

The report reads that China’s spending on science increased to 2.19 percent of GDP in 2018, compared with 2.03 percent in 2014. Meanwhile, in absolute terms, the U.S. still spends more on science than China, taking into account purchasing power parity, with $460.6 billion in the U.S. and $439 billion in China. Science spending as a share of U.S. GDP rose to 2.84 percent in 2018 from 2.72 percent in 2014. The country with the largest share of science spending in GDP is Germany, where this share increased to 3.09 percent in 2018 from 2.87 percent in 2014.

In addition, the report notes that the country with the most international patents registered is China (31.7 percent of the global total), followed by the U.S. (21.7 percent), Japan (20 percent) and the EU (13.9 percent).

Source: UNESCO
https://www.unesco.org/reports/science/2021/en/race4smarter-development

According to a joint report by the US-based Rhodium Group and the Mercator Center for China Studies (MERICS) in Berlin, China’s FDI in Europe continued to fall, to a 10-year low: Shrinking M&A activity meant the EU-27 and the United Kingdom saw a 45 percent decline in completed Chinese foreign direct investment (FDI) last year, down to EUR 6.5 billion from EUR 11.7 billion in 2019, taking investment in Europe to a 10-year low.

The UK saw Chinese investment plummet by 77 percent, although more than half of total Chinese investment in Europe went to the “Big Three” economies – Germany, the UK and France. Infrastructure, ICT and electronics were the top three sectors, attracting 51 percent of the total investment from China. Poland rose to become a popular destination, though inflows of EUR 815 million were largely concentrated on one acquisition.

Chinese FDI faces greater scrutiny by EU member states: The Covid-19 crisis prompted the EU to issue guidelines stepping up scrutiny of FDI in Europe’s critical assets. 14 EU member states, including Italy, France, Poland and Hungary, updated their FDI screening mechanisms last year. Member states have also moved to block several acquisitions by Chinese firms.

Headwinds against Chinese investment in Europe will grow in 2021: Chinese FDI activity into Europe continued to fall in the first quarter of 2021 and has remained weak elsewhere. Europe remains an attractive investment location. However, continued disruption from Covid-19, high barriers to outward capital flows in China and rising regulatory barriers to foreign investment in Europe have all contributed to low levels of Chinese investments. Deteriorating EU-China relations will create additional headwinds for Chinese investors going forward.

Source: Radio France International, June 16, 2021
https://rfi.my/7Uin.T

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, according to the data released by the United States Department of Labor, the U.S. May CPI (Consumer Price Index) arrived at a surprising five percent. Some analysts expressed the belief that, even if next May the U.S. CPI drops to four percent, the lost purchasing power might never recover. Analysts showed that the U.S. dollar purchasing power is declining at a pace never seen in the past 40 years. In the past three months, the U.S. dollar purchasing power declined by 2.4 percent, which was the largest three-month decline since 1982. Calculated at an annual rate, the three-month decline represents a 9.5 percent annually. In May, the U.S. market saw durable goods prices skyrocket year-over-year by 10.3 percent, especially for a 30 percent price increase for used cars. Housing costs, which represent one third of the CPI, increased by 2.2 percent in the past 12 months. The S&P CoreLogic Case-Shiller Home Price Index increased by 13.2 percent year-over-year, which is the highest increase since December 2005.

Source: Sina, June 12, 2021
https://finance.sina.com.cn/stock/hkstock/hkstocknews/2021-06-12/doc-ikqciyzi9271144.shtml

Major Taiwanese news network China Times recently reported that the authorities from the capital city of Chile, Santiago, announced the closing down of the whole capital region again. In the past two weeks, Chile saw a 17 percent daily increase in confirmed cases of Covid-19. The Santiago capital region, which holds half of the nation’s population, saw a daily increase of 25 percent. The capital region ICU capacity has reached 98 percent. In the meantime, Chile is currently ranked as having the fifth highest vaccination rate in the world. Around 75 percent of the nation’s 15 million population have received at least one shot of the vaccination and 58 percent of the total population have already completed all of the required doses. Chile’s vaccination rate is leading in the Americas. Among the total 23 million doses of vaccine used, 17.2 million were Chinese CoronaVac and 4.6 million were Pfizer-BioNTech. AstraZeneca and the Chinese CanSino were both less than 1 million doses. Medical experts explained that vaccines are not expected to be 100 percent effective and the multiple variants of the Covid-19 virus might also have played a role.

Source: China Times, June 11, 2021
https://www.chinatimes.com/realtimenews/20210611004269-260410?chdtv

According to a report from the Foundation for Investigative Journalism (FIJ), a Nigeria based not-for-profit organization, Internet users in Nigeria suddenly found themselves unable to log on to Twitter over the weekend and had to use a virtual private network (VPN) to access it. The report indicated that the Nigerian government is discussing plans with the Chinese government to build an Internet firewall, with the intention of following China’s lead in controlling social networking platforms such as Twitter and Facebook.

For the past several years, the Nigerian government has been seeking a way to control online speech. Less than a year after the new president Muhammadu Buhari came to power in 2015, he stepped up legislation to control cyberspace as well as news media.

In November 2017, the Nigerian Communications Commission (NCC) ordered the shutdown of 21 websites that supported anti-government groups. Between 2018 and 2019, the government was exploring the use of Open Source Internet Intelligence (OSINT) to track Internet users on social media who are critical of the government. 2019 saw the introduction of two bills in Nigeria’s parliament: a comprehensive bill to ban hate speech and a bill to prevent fake news and other related crimes on the Internet. Such proposals caused a public outcry in Nigeria and did not receive a final vote in parliament.

The FIJ has learned that the Nigerian government, through the office of the President, reached out to the Cyberspace Administration of China (CAC) to discuss plans to build an Internet firewall. This would enable the Nigerian government to control the media space and to create laws that would criminalize speech against the government.

The CAC is the central internet regulator, censor, oversight and control agency for China. It answers to the Central Cyberspace Affairs Commission, headed by Xi Jinping, China’s President. Since it came into existence, the CAC, which also gives approval to the data of Chinese companies outside of China, has been regulating user names on the Chinese Internet, licensing news information services, and banning comments that “harm national security” or “harm the nations honor.”

Nigeria’s surveillance capabilities rank high on the continent. In 2018, the Office of the National Security Adviser (ONSA) was allocated $12.8 million for a surveillance project called Stravinsky Project 2. Other budget allocations intended to increase the surveillance capabilities of both the ONSA and the Department of State Security (DSS) included a ‘Social Media Mining Suite,’ a ‘Wolverine Next Generation SDRIMSI,’ a ‘Surveillance Drone’ and ‘Mobile Surveillance Facilities.’

Freedom House, a US-based advocacy group, revealed that the surveillance projects such as Stravinsky Project 2 still received allocation in the 2019 and 2020 budget proposals.

Source: Radio France International, June 7, 2021
https://rfi.my/7T34.T

Xinhua News Agency reported that, on July 7, the Standing Committee of the National People’s Congress (NPC) of China was deliberating the “Anti-Foreign Sanctions Law (Draft).”

A spokesperson of the Standing Committee was quoted as saying that “certain Western countries, out of a need for political manipulation and ideological bias, have grossly interfered in China’s internal affairs on issues related to Xinjiang and Hong Kong, and have imposed ‘sanctions’ on China in accordance with their own laws.”

The spokesperson said that, many people proposed that it was necessary for the country to enact a special anti-foreign sanctions law to provide “strong legal support and protection for China to counter discriminatory measures from foreign countries in accordance with the law.”

In addition, the Standing Committee of the NPC also proposed in one report to “enrich the legal ‘toolbox’ to deal with challenges and prevent risks, considering the sanctions and interference.”

In recent years, China and Europe and the United States have been engaged in battles of sanctions against each other over Xinjiang and Hong Kong. Following China’s imposition of the national security law on Hong Kong, the U.S. sanctioned 14 vice chairmen of the National People’s Congress, as well as Hong Kong and the Macau Affairs Office Director Xia Baolong, Hong Kong Chief Executive Carrie Lam, and a couple of senior Hong Kong officials, among others. In retaliation, China sanctioned former U.S. Secretary of State Mike Pompeo and a group of “anti-Beijing” Members of Congress by banning them from entering China, Hong Kong and Macau.

Source: Central News Agency, June 8, 2021
https://www.cna.com.tw/news/acn/202106080034.aspx

On June 7, German Foreign Minister Heiko Maas, in his annual speech to German diplomats, criticized Hungary without naming it. “We can’t let ourselves be held hostage by the people who hobble European foreign policy with their vetoes. If you do that then sooner or later you are risking the cohesion of Europe. The veto has to go, even if that means we can be outvoted.”

Hungary is seen by the media as a Trojan horse that China planted into Europe. It has become the spokesman for China in the EU and has repeatedly prevented the body from condemning human rights in China, putting Europe under the risk of being divided. After Hungary used its veto three times within two months to prevent the EU from issuing statements on Hong Kong’s national security law and electoral reform, German Foreign Ministry of State Secretary Miguel Berger tweeted against Hungary. “Hungary again blocked an EU statement on Hong Kong. Three weeks ago it was on the Middle East. Common foreign and security policy cannot work on the basis of a blocking policy.”

Asked to comment on the Friday veto, the Hungarian government’s media office said EU sanctions on China were “pointless, presumptuous and harmful.” Hungary blocked an earlier EU statement in April criticizing China’s new security law in Hong Kong, thereby undermining the bloc’s efforts to confront Beijing’s curbing of freedoms in the former British colony.

Berger’s tweet raises concern because it is unusual for a member state to criticize another member state publicly over diplomatic issues, reflecting the fact that other EU countries, especially large ones like Germany, are getting closer to the bottom of their tolerance for Hungary. Some member states and the EU may already be thinking of taking action against Hungary.

Three weeks ago, Josep Borrell, the EU High Representative for Foreign Affairs and Security Policy, complained about Hungary’s obstruction and warned that the other 26 member states may issue their own joint statement on Hong Kong. Maas called on the EU to stop making decisions on foreign action by unanimity. Because the EU’s foreign policy decisions are made by unanimous vote, any member state can boycott them, making it difficult for the EU to speak out in a unified voice.

The EU said it would investigate Hungary for violating democratic values. The European Court of Justice said that Hungary’s public displeasure with the EU and its request to dismiss the accusation of serious violations of democratic values against Hungary was rejected. Next, Hungary will be investigated by the European Court of Justice and, if it is found to be in serious violation of democratic values, it will be subject to economic and political penalties .

Source: Radio Free Asia, June 9, 2021
https://www.rfa.org/mandarin/yataibaodao/junshiwaijiao/cl-06092021142842.html