Sources claim some Mintz Group staff based in Hong Kong left after the company's Beijing office was raided by Chinese authorities, with fears the crackdown has led companies to feel threatened in the global financial hub. The temporary move to Singapore, according to sources, was made to ensure workers' safety during an uncertain time, concerning a police probe surrounding Mintz. It is unknown why the firm's office was raided, potentially due to previous inquiries related to human rights violations in China's Xinjiang region. Other foreign firms carrying out similar duties have reportedly been warned off from the location. The law change will see Beijing introduce stricter anti-espionage laws from July. Mintz has said it would work with Chinese authorities to "resolve any misunderstanding".
China will build an international science and technology innovation complex in Beijing to compete with Silicon Valley by 2025. The Beijing International Science and Technology Innovation Centre's plan is to offer attractive visa, work permit and long-term residency options for foreign talent, and to build world-class scientific and technological infrastructure clusters. National research institutions and private companies will be expected to make advancements and China aims to remain spending 6% of the country's gross domestic product on research and development by 2025. However, US sanctions are blocking China's technological progress, prompting Beijing to embark on a quest for technological self-reliance.
The G7 summit is seeking to adopt a common approach on Beijing and is planning to introduce measures to respond to Chinese "economic coercion" in an announcement on Saturday. A “platform” is to be unveiled which will provide a forum for the identification of economic vulnerabilities and coordination of protective measures. This follows two years of efforts by the US administration of Joe Biden, helped by Japan, to foster unity among G7 members on challenges posed by Beijing. China has taken issue with the G7’s language on “economic coercion”, saying in a statement "it is, in fact, the United States itself that instigates coercive diplomacy".
Ukrainian President, Volodymyr Zelenskiy, is making the 9,000 km journey to Hiroshima to attend the G7, while also seeking support from leaders who have taken a neutral stance over Russia's invasion of Ukraine. He hopes to reach out to India's PM, Narendra Modi, and Brazilian President, Luiz Inacio Lula de Silva, two countries that have continued to trade with Russia despite sanctions imposed by the EU and G-7. Zelenskiy is keen to help Ukraine become influential in nations that the country has rarely connected with on a diplomatic level, described as "a significant diplomatic opportunity".
Ukrainian President Volodymyr Zelenskiy will use his attendance at this year's G7 summit, set to be held in Japan, to appeal to countries such as Brazil and India for greater support while continuing to build on the support of the US and its allies in the struggle against Russia's invasion. Meanwhile, the G7 has also announced measures to counter economic coercion from China, in a bid to further push-back against Beijing's "hostile" actions.
Brazil has felt pressure to meet with Ukrainian president Volodymyr Zelenskiy following the unannounced attendance of Zelenskiy to the G7 summit in Japan. Brazilian officials have said that the Brazilian delegation felt nervous about the event and considered it to be a “trap” scene. The Brazilian President Lula, who is attending as an invitee, was urged by French President Emmanuel Macron to meet with Zelenskiy. Some tensions may arise from Brazil’s more neutral stance on the war in Ukraine, feeling that both Ukraine, the US and EU share the blame for Russia’s invasion.
As part of a drive to reduce poverty, Chinese officials are warning of the risks of mounting rural debt. They point to weaknesses, particularly in the agricultural sector, and a lack of options as collateral for loans as contributing to risk in the sector. A deputy head of the Ministry of Agriculture and Rural Affairs’ budget and finance department warned there is "too much risk" for lenders operating in rural areas. The Chinese central government is continuing to provide financial support for rural areas with loans totalling ¥49.25tn ($7.03tn) across agriculture and rural development.
The US is hoping to counter China's foreign policy initiatives in the Middle East by proposing an infrastructure project that would construct a network of ports and railways to connect Indian territories and Gulf states. Earlier this month, Jake Sullivan, US national security adviser, travelled to Saudi Arabia to present the proposal to Crown Prince Mohammed bin Salman and representatives from the United Arab Emirates (UAE) and India. Analysts suggest that despite being a welcome gesture from India, it is likely to be met with suspicion in the region, given it has been set up as an alternative to China's Belt and Road Initiative. Saudi Arabia and the UAE are both participants in the Belt and Road, and received the second-largest amount of investment benefits from the initiative last year.
The Cyberspace Administration of China (CAC) has told critical information infrastructure providers they must stop purchasing equipment from Micron Technology due to unspecified "serious network security risks" which might affect the country's national security. It is uncertain what disclosures led to the regulatory crackdown. Foreign companies operating in China remain concerned following a number of security warnings over the past few weeks, which included police raids on consultancy firms Bain & Co, Capvision, and Mintz Group. US, European, and Japanese regulators have withheld some technology from their Chinese counterparts out of fear it might be used in weapons.
Profits at Western banks in China slumped in 2021 due to COVID-19 lockdowns and tensions between the US and China, according to data seen by the Financial Times. Credit Suisse, Deutsche Bank, Goldman Sachs and HSBC all reported losses, while Morgan Stanley's profits fell. UBS and JP Morgan were the only banks to post higher profits, although HSBC's unit lost less money than in previous years. Seven Western banks have units in China and all have been operating at losses in the country for years, investing in lossmaking outfits in the expectation they would eventually prove profitable.
Two ancient merchant ships that were recently discovered in the South China Sea are being mapped and researched by the Chinese government. The shipwrecks are from the late 15th and early 16th century periods during China's Ming Dynasty and were both laden with cargo. Researchers expect that the discovery will bolster China's status as a maritime power and build the case for their territorial claims in the South China Sea, which are contested by the Philippines, Malaysia, Vietnam and Brunei. The discovery may also hold clues for Chinese traders participating in the Belt and Road Initiative.
The president of the Democratic Republic of Congo, Felix Tshisekedi, is set to visit China later this month for talks with Chinese officials, including President Xi Jinping, to discuss trade deals and the formalisation of a $6bn infrastructure-for-minerals deal between the two nations. During the visit, the heads of state are expected to attend a signing ceremony for several key trade and cooperation documents. The African nation is the world's leading producer of cobalt, which is found in batteries for electric vehicles.
China has ordered its infrastructure companies to stop buying from Micron, the US chipmaker, shortly after US president Joe Biden called for a thaw in relations between the two countries. Chinese foreign policy analysts said the call maintained and exacerbated existing tensions. While experts do not expect the diplomatic conflict to derail high-level engagement efforts entirely, they suggest stabilisation will be held up by issues of economic coercion, national security issues related to technology and worsening tension over Taiwan, as China tries to maintain its grip on Taiwan and the US looks to support Taiwan as a sovereign nation.
FT columnist Rana Foroohar has backed US de-risking rather than decoupling when it comes to China. She said targeting economic chokepoints and concentrations of power that granted monopoly power to nations or private businesses would lessen economic coercion by safeguarding chips, gas, digital data, raw materials, and manufacturing capacity. This allowed for cooler US-China relations while still tackling the core issues. However, she also questioned China's reasons for pursuing tougher espionage rules, which will hinder any foreign business sending digital information across its borders.
President Biden's prediction of a "thaw" in relations with Beijing after what he called the "silly" act of China sending a giant surveillance balloon over the United States has been overshadowed by US plans to support Ukraine with new arms packages, including an avenue to provide F-16 fighter planes. President Biden sees a struggle in China between factions that want to restart the economic relationship with the United States and a far more powerful group that aligns with the country's emphasis on national security over economic growth. Though the G7 have assured China that they are not trying to contain the country, a string of diplomatic wins for the US and losses for China has created a tighter nuclear alliance between the US, Japan, and now South Korea in Beijing's neighbourhood. In response, China accused the G7 of "vilifying and attacking China" and "crudely meddling in China’s domestic affairs."
Administration officials hope that a more regular dialogue with China will eventually be established, although the war in Ukraine will continue to shadow the relationship and the course of the relationship between Moscow and Beijing. Analysts have predicted that while the US’s de-risking strategy may seem like risk reduction for the US and Europe, it could be perceived as nicely worded containment strategy in Beijing.
The Group of Seven (G-7) summit in Japan on 28 and 29 May has triggered another round of confrontational statements with China. A G-7 communiqué said that Beijing must do more to stop Russia's invasion of Ukraine, condemned its so-called "malign" trade practices and vowed to "foster resilience to economic coercion" by shielding their economies from having too much exposure to China's thriving market and export industry. However, the communiqué also stated that the group's nations "stand prepared to build constructive and stable relations with China." China summoned the Japanese ambassador on 30 May for a dressing down over what a Chinese diplomat termed the G-7's "bloc confrontation and Cold War mentality". A Chinese Foreign Ministry statement lambasted the G-7's "bullying". It began: "The era when a few developed countries in the West willfully interfered in the internal affairs of other countries and manipulated global affairs is gone forever." The summit is seen as the latest proof of increasing Western concern over China's influence. Public opinion has been hardened by Beijing's continent-wide, ambitious infrastructure projects, its belligerence over self-ruled Taiwan and its alleged failure to condemn Russia's presence in Ukraine.
