Tag: China

  • China’s Threat is Real, Warns Former Speaker of the House of Lords, Baroness D’Souza

    Baroness D’Souza on China: “The Threat is Real”

     

    There are three questions that come to mind in considering post-election Taiwan in a changing world.  These will focus on the People’s Republic of China (PRC) in relation to the Indo Pacific Region but most especially, on Taiwan itself.

    The questions are as follows:

    What does China want?
    How does it aim to achieve its goals?
    Will it succeed?

    As you will all know only too well, the West, by which I mean the UK, US and Europe, have consistently viewed the PRC through the prism of western democratic standards and an internationally accepted rules-based order. I’m not sure this is the most fruitful standard to analyse the PRC and its domestic and foreign policies if we want to understand China’s intentions.

    Looking at the various statements issued by the increasingly powerful President Xi Jinping over the last decade and more, the PRC is almost entirely focused on a Sino-centric approach – meaning that every policy, both domestic and foreign, is designed only to benefit China. Thus, Xi believes that the existing world order is biased against China and would be greatly improved if it evolved to embrace Chinese leadership – which he, and the greater majority of the population, see as an inherent force for good.

    This vision of China goes back to ancient history and aims to see China once again as the centre of civilisation, engaging with the world on its own terms, spreading knowledge and providing material benefit. Xi wishes to recreate the world order thereby righting an historic wrong and putting China’s interests and values above those of the rest of the world. The belief in the supremacy of Chinese systems and thought is in President Xi’s DNA and helps us to understand better, if not condone, some of the more aggressive actions of recent years.

    For example the ‘We Are One People’ mantra justifies the regime’s actions against the Uyghurs – with a complete disregard of the UN’s characterisation of forceful assimilation as a crime against humanity and possibly constituting genocide. This Sino-centric approach is presented to the world as altruistic, moral, and inclusive but is in fact self-centred, hierarchical, illiberal and coercive.

    So, the prevailing philosophy is the great rejuvenation of the Chinese nation and this ‘dream’ Xi has said will be achieved by 2050. Make China Great Again! The overriding condition for this rejuvenation is regime security, which Xi is taking to a new level, in order to formulate, implement and adjust Chinese foreign policy. Addressing new recruits to the People’s Liberation Army Xi has said their principal task is to enable China to ‘reclaim its place in the sun’, and this in turn entails recovering ‘lost territories’, establishing regional hegemony and furthering China’s global ambitions.

    His global ambitions are considerable. Xi argues that all countries must respect different political systems and assert that democracies are not superior to authoritarian regimes and therefore have no right to criticise the latter, especially on human rights and governance. He also aims to deter, or even defeat, the pre-eminent economic position of the USA, which would in Xi’s view substantially alter the global balance of power and establish China’s standing as a superpower. Finally, he wishes to extend the ‘soft power’ of Belt and Road initiatives especially in poorer countries, to gain leverage and control in loan repayments.

    Xi has spelt out and continues to refine an ideology to be accepted by the world. His pronouncements set out China’s direction of travel for the next decade and more, and is having a major impact on the world generally, but the Indo-Pacific region in particular.

    Again, you will be familiar with what China wishes to achieve in the short term: connect more closely with adversarial regimes such as Russia and North Korea and play an increasingly influential leadership roles in multilateral forums such as the UN, CPTTP and ASEAN.

    And then we come to Taiwan: in 2021 Xi said: ‘No one should underestimate the Chinese people’s powerful determination, will and ability to defend state sovereignty and territorial integrity.’ Recovery of Taiwan is vital for China’s geostrategic defence and offence but more than this, it is regarded as sacred territory, and this legitimises all the intimidation to which it is subjected by China.

    Mechanisms include legal, political, and psychological warfare; endless cyber-attacks, military harassment and brinkmanship, aggressive attacks in the South China sea, economic espionage, and regular spreading of disinformation. They also include isolation of Taiwan on the international front, including threatening those countries which have hitherto enjoyed diplomatic relations with Taiwan. The brutal National Security Law now being implemented in Hong Kong together with the astonishing offer of a bounty of $1 million for defectors, or promoters of freedom beyond Hong Kong, is a chilling reminder that the ‘one country, two systems’ promise is truly dead. In all these actions China is continuously testing the readiness of the International Community to hold it accountable to International Standards.

    Given the CCP appears intent on taking over Taiwan, how real is the threat, what is being done, what does the new administration in Taipei have to offer and what must it avoid? Furthermore what is the wider impact in the region and what can be done?

    The threat is real, and we are warned by serious China scholars that we should not take this lightly. Admiral Aquilino, head of the US Indo Pacific Command said at a Congressional hearing that in his view the People’s Liberation Army (PLA) would be able to attack Taiwan in 2027, even by force if necessary.

    China not only has a far-reaching strategy but tactics to which President Xi requires conformity by every citizen. The problem is that neither the US nor the UK appear, as yet, to have a strategy but have instead what some have defined as a muddled and inconsistent approach. The US policy of strategic ambiguity virtually encourages the CPP to test the West’s resolve to strenuously oppose any armed threat aimed at Taiwan. There are very few clear red lines.

    Is the future bleak for Taiwan and indeed for many other countries in the Indo-Pacific region? Would it be a good idea to wait until, as one expert has said, the Chinese Communist Party falls under the weight of its own internal contradictions? Another commentator writes that China faces a near-existential dilemma over its macroeconomic strategy due in large part to its over-reliance on property and infrastructure development.

    The accumulated debt by property developers and local government infrastructure expenditure has reached $2.5 trillion. It could take many decades to eliminate this debt. It is difficult to predict how the economy can improve dramatically in the next decade due to the possible over-production of manufactured electronic items flooding international markets. And, of course, China also faces the looming problem of an ageing population dependent on pensions, with an ever decreasing work-force.

    Let me summarise, China is intent upon usurping the supremacy of the USA and will restructure its economic policies and military strategies to control the international shipping lanes to control, and therefore influence, trade, to their own advantage. It aims to subdue neighbouring states or, as in case of the Hambantota Port in Sri Lanka, secure long leasehold on geostrategic territory.

    The economic about-turn as articulated by Premier Li Qiang focuses on economic growth underpinned by advanced manufacturing. In steering rapidly away from infrastructure development, the President has forbidden any public building in at least ten provinces. This will have consequences – particularly for employment. Let us not forget that the legitimacy and stability of the Chinese Communist Party is almost entirely dependent on a successful and growing economy.

    Given the future dangers the country faces, I have to say that I would not relish being the new President of Taiwan. Nor am I in any position to suggest a way forward. However, I note that President Lai will have greater difficulty in getting innovative laws through the legislative Yuan – given the DPP’s loss of a majority. This will be especially the case for divisive issues such as defence spending and strategy, and likely to be exploited by the PRC.

    I am perhaps better placed to suggest what a new government in the UK could do; in the wake of the Russian attack on Ukraine, we have woken up to the real danger China poses in this region. The task is to make it abundantly clear that we will take action including public and frequent condemnation of ‘grey zone’ attacks, the imposition of Magnitsky sanctions against selected Chinese officials; reducing the number of Chinese students accepted for further study in the UK; strict prohibitions on the importation of any technology capable of surveillance including electronic cars and all cellular IOT modules; establish full diplomatic relations with Taiwan.

    This would undoubtedly provoke retaliatory action from China, but would also signal to the world that the de facto independence of Taiwan must progress toward a de jure state.

    Impose strict criminal sentences on any attempts to kidnap or harm in any way – Chinese citizens, whether from Hong Kong, or defectors. Finally, as we all know that co-ordinated action is more effective and thus the UK, in its international relations, must help to build a body of consensus among nations to resist Chinese encroachment on freedoms. There will be an economic cost to all trading partners but the cost of not taking multilateral action now will be far, far greater.

    The overall message to the PRC must be first, that the world will not allow the Chinese destiny of territorial acquisition, the bullying and flouting of the existing rules-based order to prevail and that the consequences of gross intransigence will be severe. Second, a war between the West and China would be an unmitigated catastrophe affecting China as much as it would affect the entire world. This is the reason why China’s territorial ambitions must be confronted.

     

    This is an edited version of a talk given at the Graduate Institute of Journalism, Taiwan, Taiwan Foreign Correspondents Club in April 2024

     

    Go here for more from Baroness D’Souza

     

    Baroness D’Souza on the encroaching power of the executive

    The Baroness and the Mujahideen: the remarkable tale of Marefat school in Afghanistan

    The Baroness: Frances D’Souza on Sir Keir Starmer, Rishi Sunak and the current deluge of legislation in the House of Lords

  • Renewable Energy Tipping Point – A Powerful Shift in Investment

    Renewable Energy Investment, Dinesh Dhamija

    The world is witnessing a dramatic surge in solar energy generation, driven by falling costs and a newfound enthusiasm for renewables in China. According to the International Energy Agency (IEA), clean energy investment is expected to double that of fossil fuels in 2024. “For every dollar going to fossil fuels today, almost two dollars are invested in clean energy,” says IEA executive director Fatih Birol. The figures are staggering: $1 trillion for fossil fuels compared to $2 trillion in clean energy, which includes renewables, nuclear power, electric vehicles, power grids, energy storage, low-emission fuels, and energy efficiency improvements.

    Solar Energy Growth and the Renewable Energy Tipping Point
    The cost of solar technology has plummeted by 30 percent over the past two years, leading to a rapid expansion of solar farms across China and the United States. In the first four months of 2024 alone, the US saw nearly 8GW of new solar capacity and an additional 1.8GW from wind energy. The Federal Energy Regulatory Commission reports that more than 99 percent of new US generating capacity during this period came from renewable sources. This impressive growth underscores the Renewable Energy Tipping Point, as the global energy market pivots towards cleaner and more sustainable options.

    As renewable energy costs continue to decline, this trend is expected to accelerate. Despite efforts by the oil, gas, and coal industries to influence policymakers and argue for the continued use of hydrocarbons, the economics of power generation increasingly favor renewables. The question arises: why pay more for an energy source that harms both health and the environment?

    Global Investment and the Future of Renewable Energy
    Global investment in low-carbon electricity is forecasted to reach $900 billion in 2024, ten times higher than the investment in gas and coal power generation. In the United States, renewable energy capacity is projected to surpass natural gas by 2027. This shift will highlight whether countries are committed to outdated fossil fuel generation or are embracing more progressive energy policies that benefit their citizens.

    This transition presents a curious challenge for politicians like Donald Trump, who have historically been anti-renewables. If Trump were to be re-elected in November, he would face a burgeoning boom in clean energy generation, potentially challenging his previous stances. The broader question remains: how will political leaders worldwide respond to this unstoppable trend?

    The Irrepressible Shift Towards Renewable Energy
    The IEA notes that investment in fossil fuels remains higher than desired, with oil and gas companies allocating just 4 percent of their investment budgets to clean energy, despite their claims of being part of the solution. The agency urges governments to adhere to its target of tripling renewable energy generation by 2030. This goal, while ambitious, is crucial for mitigating climate change and ensuring a sustainable future.

    While more can always be done, the undeniable and accelerating flow of funds into renewable energy has indeed reached a tipping point. Soon, it will seem absurd to invest in anything else. This shift not only marks a significant economic change but also signals a broader societal transformation towards sustainability.

    Dinesh Dhamija, who founded and sold the online travel agency ebookers.com before serving as a Member of the European Parliament, has since established the largest solar PV and hydrogen businesses in Romania. Dhamija’s career transition from travel to renewable energy underscores the potential for innovative leaders to drive significant change in emerging industries. His latest book, The Indian Century, is now available to buy on Amazon at The Indian Century.

     

  • China’s Looming EV Dominance

    Dinesh Dhamija

     

    It’s now a decade since Tesla launched its Model S in the UK – the first battery-powered luxury car to reach the market – and there are now just over 1 million all-electric models, of all brands, on British roads. EVs are a common sight.

     

    What’s coming next? Rather than more Teslas, Nissan Leafs, VW ED-3s and Kia e-Niros, a new wave of cheap, mass-produced Chinese EVs is on its way. The highest number of electric vehicles produced by any company in the world is no longer Tesla, it’s the Chinese manufacturer BYD, which sold three million vehicles in 2023 and already has the capacity to make four million per year. It’s developing a new factory in Hungary to serve the European market, alongside others in Brazil, Thailand and Uzbekistan, with further plans for Mexico (to attack the vulnerable US market) and Indonesia.

     

    Just a couple of weeks ago, BYD launched a new plug-in hybrid model that had a good all-electric range and costs just £10,000. The company now plans to flood global markets with its vehicles, just as low-cost Chinese toys and electronic goods have proliferated for years. “The price will make petrol car assemblers tremble,” said BYD on the Chinese social media platform Weibo, as it launched its new model.

     

    It is not just the traditional carmakers that are trembling. Apple just announced this week that it is discontinuing its electric car making efforts, after spending billions on development and promising in 2020 to launch a model in 2024 or 2025. Even Tesla has scaled back its investment, faced with rising interest rates and softening demand. Things are even tougher at the traditional automakers: Ford reportedly lost more than $64,000 on every EV that it sold in 2023 and has delayed opening new battery plants, while GM has also had a troubled EV production history. All the big US manufacturers make their profits from selling pick-up trucks and SUVs. They are desperately trying to create EVs to compete with Tesla and the coming tide of Chinese electric vehicles, but it may already be too late. The same applies in Europe.

     

    Looking at the big picture, more EVs should be a good thing. They will hasten the spread of charging infrastructure, bring down the overall costs for consumers and make electric transportation available to the general public. But for the next few years, there could be a virtual bloodbath in the auto industry, as conventional market models are turned upside down.

     

    Dinesh Dhamija is a renewable energy investor and entrepreneur. He owns a solar energy and hydrogen business in Romania. Earlier, he founded, built and sold ebookers.com and served as an MEP. His latest book The Indian Century has just been published.

     

  • Sir Martin Sorrell on AI and the future of China

    The Founder of S4 Capital surveys the geopolitical landscape in 2022 and finds both dangers and opportunities

    While it’s true that the metaverse has been thoroughly hyped, I’ve been listening lately to Bill Gates and others, and it’s clear it will have a major impact. One obvious example is the question of work-from-home patterns and hybrid-working. But my sense is the impact will be much broader than that. For instance, I’ve seen some significant activity recently around training – for instance, the training of pilots and the training of factory processes.

    There’s also some fascinating movement on medical processes, and the carrying out of operations. It might even be that metaverse or haptic touch technology will be used to conduct operations. Incredible things are being done and my sense is that from what we’ve been through in the past years that these things will experience dramatic acceleration. We’re on the cusp of massive transformation – and I suspect that what we don’t realise is that inflation will also encourage that.

    However, I continue to be worried that the pandemic papered over the cracks of Brexit. I hesitate to say that we forgot about Brexit during the pandemic, but its impact was definitely backgrounded, and understandably so. My view is that as a result of Brexit, the UK growth rate has been badly hit and that it will take many years to get that back – and build businesses more like my own S4 Capital which we’ve built to be genuinely able to look beyond these shores.

    To do that you need to realise where the opportunity is. Talking to the forecaster gurus recently has confirmed me in the opinion that the economic opportunities are in Asia – but then nobody will be surprised to hear me say that there are opportunities in China and India. But I also see great possibilities in East Africa, North and South America and in the Middle East.

    By contrast the prognostication of Western Europe hasn’t been great. This is why we’re looking to increase our activity in Asia from around ten per cent of our work where it currently is, towards 40 per cent.

    The biggest problem our clients currently face is the question of what you do in China – even before the Russia-Ukraine conflict, you could have said that the US and China are at loggerheads, even in a kind of Cold War.

    It’s true that there are glimmers of hope – we’re beginning to see a light at the end of the tunnel in respect of the climate change question, in which instance China has come on board to some extent. But beyond that, progress hasn’t been good and we have to accept that the Chinese are moving in different directions, and increasing their soft power in Africa and Latin America enormously.

    All this should come as no surprise. Anyone who has witnessed the Belt Road Initiative – not to mention President Xi’s ‘dual circulation’ economics policy – will know that China is taking a more independent route. COP 26 seems a long time ago now, but in retrospect it’s still significant now to consider that neither Putin nor Xi were in attendance. We’ll have to see what happens in the Ukraine, and how it will feed into China’s calculations in respect of Taiwan, but I think the odds have always been in favour of China following suit in Taiwan.

    The luxury markets are worth watching too: premium and luxury do very well in China and I see nothing in the 14th five year plan to counter that. China’s growth rate is strong, and will remain strong. I also think it’s interesting to note that China is loosening its monetary policy while everyone else seems to be tightening.

    America is also difficult to predict. I can’t see the midterms going well for Joe Biden and the Democrats. If so, that will mean deadlock after 2022, with the effect that no significant legislation will be passed beyond that point. There have been significant successes: the infrastructure spending was needed, since as a portion of GDP infrastructure had been historically low in the US.

    But the bills Biden has passed are by their nature inflationary: going forwards, I expect that if clients think they can raise their prices they will.

    All of this makes the world a very interesting place in 2022. There are huge risks out there but I think 2022 will be strong – especially for those who seize the opportunity.

    Sir Martin Sorrell is the CEO of S4 Capital

  • China Focus: Behind the Red Wall

    China Focus: Behind the Red Wall

    Our Woman in China gives us her take on the nuclear arms race in education between China and the rest of the world

    This is going to be quite a year in China. There’s going to be about eight and a half million graduates in China – and that’s a figure which dwarfs any figure you can imagine in the UK. They’ll be graduating into the toughest job market in living memory.

    It’s worth considering the history. Before 1990, China’s was essentially a planned economy and everybody had roles given by the state. Since then, the economy has grown by around ten percent a year. Unemployment has been incredibly low. Now lots of factors are happening at once. With Covid-19, there’s speculation that you have 100 million unemployed people in China right now.

    Concurrently, you have automation which is happening dramatically in China, with every company becoming leaner. So all these graduates are going to be piling in to this very problematic situation. And there is such faith in education in China. In the 1980s and 90s, if you went abroad and studied, let’s say engineering, and you came back to China, it’s quite likely you’re a millionaire at this point, or senior in the government. Why? Because you brought back information that was incredibly valuable and gave you a massive strategic advantage. Because of that, you now have a generation of parents who believe education is a fast track to employment. That’s heart-breaking as the young today are ill-equipped for the modern world in terms of creativethinking and communication skills.

    It’s an incredibly depressing situation. I speak to a lot of students doing undergraduate degrees and they’re looking at the realities of the economy and thinking, ‘Should I go and get a Masters?’ But even that doesn’t guarantee a job now – when for their parents’ generation, it did.

    That means there’s a major problem for Chinese students studying in the UK: they’re not getting their return on investment. In China, these young people are called ‘sea turtles’: even after having studied in a good, solid university in the UK, they’re unable to get jobs. All this will be detrimental to the higher education system in the UK. There are 900,000 graduates from UK universities in China, and there could be a big shift where Chinese students start to wonder whether it’s worth studying abroad if you don’t get a job at the end of it.

    I don’t think the effects will be felt immediately. Xi Jinping sent his daughter to Harvard. These wealthy people will have better connections, and so they’ll end up with jobs and power, and will end up running the country and the biggest companies. That’s a powerful example; it might take 20 or 30 years for these trends to be felt.

    Working against all this is the fact that China is going to go global at some point. So if a young person understands the UK, they are going to be a natural person to go and work in that London office at some point. The historical trends are clear. In the 50s and 60s, China was all about manufacturing; suddenly in the 70s and 80s, we had Sony and all these other companies booming around the world. But global China is in the future. This year’s graduates will fall through the cracks because none of this will have kicked in yet.

    As someone who has been here for 15 years, I would say the UK doesn’t understand that China is absolutely zero sum. China doesn’t want its students to go to the UK and spend lots of money. It wants to learn as much as it can from the UK, the US and Australia and then it wants to export its own education. You only need to read the state media to understand the undertones of what they’re really thinking and what they’re really plotting right now. The longerterm goal is that they don’t want to send anyone to the UK. That’s not explicit, but I would guarantee you it’s the case if you speak to the highest levels of government in China. Why would they want to give money to the UK?

    I’ve probably become a bit more patriotic since I’ve been here: if I had to back a team, I’d like to back the UK. The UK education system is filled with people for whom education is a vocation. They believe in the system. They’re autonomous, and opinionated: it’s filled with brilliant people. In China, nobody has any autonomy; it is control-based. I don’t want that system to win. China’s version of history is that there is only one version of history. Our discipline of history is that you have analysis and the past is open to interpretation. It’s not a good thing when education is used as a weapon to control a population or to politicise everything. I would love to see the UK compete, but I fear that a lot of UK universities are very slow, siloed and very complacent. China is moving incredibly quickly.