Pandas are members of the ailuropodidae family, a very small family of mammals evolutionarily (but not very closely) linked to bears and racoons, now believed to be closer to bears. They are thought of as peaceful, vegetarian creatures that eat only bamboo, which they have to do for up to 75% of their waking hours – 16 hours a day – because it has so little nutritional value. Pandas are believed to munch on other types of vegetation from time to time and also to eat eggs, small animals, carrion, and to forage in farmland for pumpkin, kidney beans, wheat and domestic pig food, although bamboo makes up by far the bulk of their diet. They have been known to attack humans, too, although given the inroads humans have been making, bringing industry and development into the Yangtze Basin region where most of them live – dams, roads, railways, factories – one can sympathise if they occasionally lose their tempers. The great panda, ailuropoda melanoleuca, is held in high regard in China as a national symbol, but not high enough to prevent encroachment on its habitat. And if a male great panda was annoyed with you, you wouldn’t want to stay around and argue; they can be almost two metres long and weigh up to 160 kilos. Of course, China’s other great symbol is the dragon, a fiercer beast but entirely fictional. One would probably think twice before cosying up to either, but a lot of people involved in European politics and administration seem to be doing so.
China has been heavily involved in lobbying the European Union. The coronavirus lockdown has been providing an ideal opportunity to do so, like many other lobbyists at present, ‘under the radar’. Indeed, there has been an upsurge in lobbying generally by all sorts of groups, aided by the fact that many of the lobbying meetings have to be held through visual communication apps and are not therefore subject to the usual lists of visitors to the Commission building. They enter only via a computer or smartphone link and some of the meetings have not been entered into the official records, according to the Corporate Europe Observatory (COE), a pro-transparency NGO. Much of the lobbying has been aimed at toning down tough new restrictions on certain industries and activities on the basis that they’re not appropriate while the coronavirus outbreak is continuing. For example, the medical industry have called for a moratorium on stricter safer rules for medical equipment, the European Banking Federation has asked the European Commission to suspend an anti-tax-avoidance directive, as well as a requirement to report bank account information. It’s hard to see how a viral pandemic justifies that; criminality remains illegal, even when lawyers are unwell. The plastics industry has written to Commission President Ursula von der Leyen, urging her to think again about the ‘Single Use Plastics Directive’. They got short shrift. The steel and cement industries, big polluters, have asked the Commission to postpone the date on which they report their carbon emissions, but again it seems the Commission was not sympathetic.
According to German Green MEP Sven Giegold, writing for Brave New Europe, an NGO opposed to neo-liberalism in Europe, car industry lobbyists want to prevent a tightening of CO2 emissions rules, airlines are campaigning to prevent more taxes on kerosene, farming groups, backed by the political centre right, want to delay the ‘farm to fork’ initiative for more sustainable agriculture, and Business Europe, the most powerful lobby association in Brussels, wants all climate and environmental consultations to be suspended. The Prime Minister of the Czech Republic, Andrej Babiš, wants the EU to forget the Green Deal completely. Reading the list offers no great surprises, although it is sadly depressing. These are, in most cases, industries using the pandemic to postpone compliance with rules, often proposed years ago, and designed to make the world safer, cleaner or more honest, simply because they can boost their profits that way. Even something as nasty as the SARS-CoV-2 virus shouldn’t really get the blame for acts of egregious human venality.
Given the current circumstances, however, it’s not so surprising that companies and sectoral industries bodies should be vying for cash hand-outs, and in most of Europe it’s Brussels that holds the purse strings, just as in the United States it’s Washington. Despite the way in which it is being generously spread about, bail-out money is in finite supply; everyone wants a share before it runs out. After the EU countries’ faltering response when the crisis first arose, there has been a rather sudden awareness that the EU must be seen to act or lose all credibility. With business wanting financial help and the economy in freefall, it was clear that money must be found. “We are not talking about billion, we are talking about trillion,” said European Commission President Ursula von der Leyen. In fact, even that scary-sounding figure – a one followed by twelve zeros – is unlikely to be enough and no-one has yet said how much of any help on offer will be in the form of grants or loans. Loans, of course, have to be repaid. Meanwhile, the Commission has relaxed its rules on state aid, which means that the majority of bail-out funds will be coming from national treasuries. Interest rates globally have never been so low, so money is ‘cheap’, in banking terms; whether it will remain so throughout the several generations needed to pay off the debt, if it ever can be repaid, remains to be seen.
European Commission President Ursula von der Leyen saying that the European Union was grateful for China’s support shortly after her telephone conversation with Chinese Premier Li Keqiang.
ENTER THE DRAGON
That aside, however, China has jumped on the ‘lobby-while-it’s-easy’ bandwagon, using its ‘soft power’ in Europe, and its wealth has allowed it to hire policy experts and think tank members to argue its various cases on Beijing’s behalf. COE reports how willingly European tech lobbyists have been trying to exert influence on behalf of China, the company ranked last in the world for internet freedom. To make things worse, the EU’s lobby transparency rules mean that all this persuasion is largely going on in secret. It’s complicated by the fact that contacts between lobbying firms and commissioners or their staff normally begin with a telephone call, in which the caller is urged to make contact by one of the apps that allow the caller to be seen and to see whoever they’re calling. It’s how the Commission conducts its midday briefings with journalists these days and also how the European Parliament holds many of its committee meetings. But they start as telephone calls, even if they quickly turn into visual contacts; when does a phone call, which does not have to be logged, turn into outright lobbying, which does? In the United States, lobbyists are required by law to register if they are representing foreign governments. As a result, the US watchdog Open Secrets can show that Chinese telecoms giants spent hundreds of thousands of dollars on agents seeking to influence decision-makers on trade, telecoms and even the coronavirus.
Take China Telecom, for example. According to Open Secrets, China Telecom hired Ogilvy Group to target the US with lobbying, public relations campaigns and other operations designed to influence throughout the first half of 2019, “including ‘social media research and analysis, influencer identification’ and ‘audience analysis’.” The strategy was to use third-party ‘influencers’ to ‘reinforce a positive narrative’ about China Telecom with tactics such as posting content on social media, publishing research briefs and opinion pieces and submitting information to policymakers. One assumes we’re talking only positive information here.
Joe Yu, president of the public relations and influence capability of Ogilvy China © ogilvy.com.cn
Ogilivy office in Shenzhen, China© ogilvy.com
The China Telecom campaign didn’t end there, says Open Secrets. “In October 2019, China Telecom inked a new agreement with Levick Communications, a PR firm with a history of handling crisis communications for high-profile cases. Levick was promised a $45,000 (€42,000)-per-month retainer from China Telecom and a $400 (€370) hourly rate for crisis communications support. Originally slated to last through the end of that year, China Telecom’s arrangement with Levick continued through at least March 2020.” These agreements were all logged under the Foreign Agents Registration Act (FARA), as they must be under US law. No such law exists in Europe and the EU’s Transparency Register contains no mention of the Government of the People’s Republic of China. But as a chambermaid carrying a huge bug-killer spray said of her insect targets when she knocked on the door of my hotel room, near Lake Victoria, “Just because you can’t see ‘em doesn’t mean they’re not there!”
Xi Jinping and former European Commission President Jean-Claude Juncker © china-embassy.org
The lack of true transparency is regrettable, especially with China so keen to press ahead with President Xi Jinping’s ‘Belt and Road initiative’, his recreation of the historic Silk Road which was established as an East-West trade route in the 2nd century BCE. Back then, the journeys made along it were most often on foot, camel or horse, and stayed that way throughout its history; Xi’s version is rather more ambitious. The Belt and Road Project aims to establish direct transport links, by land, sea and electronic means, between China and a great many other countries around the world. China’s current strategy has remained fairly constant: form direct links with individual countries or groups of nations. That sidesteps the European Union and in so doing subtly weakens it. For example, if you want to pick an EU member state that worries the people in Brussels, you could hardly choose anywhere better than Hungary under its autocratic leader, Viktor Orbán. You get the feeling that he and Xi would have a lot in common. China has set up a programme called 16+1, or CEEC, which stands for China and Central and Eastern European Countries, which co-ordinates think tanks and events all over Europe. Run in conjunction with the highly-respected CASS business school at City, University of London, it is itself based in Budapest.
Professor Cai Fang, the Vice-President of the Chinese Academy of Social Sciences making a speech about “Opportunities and Challenges of 16+1 Cooperation” © china-cee.eu
MAKING FRIENDS IN ODD PLACES
COE also highlights a body called ChinaEU, which serves as a major lobbyist for Chinese interests in Europe. It’s a lobby for businesses, based in Brussels but with an office in Beijing, promoting business cooperation between China and Europe. On its website, under the entwined flags of China and Europe, it says: “Areas where ChinaEU excel include organizing events and providing advice to its partners regarding the development of new digital services in the EU. In particular, ChinaEU assists Chinese and EU businesses in identifying new partnerships and promoting their digital applications and innovative services in the European markets. Where relevant, ChinaEU also shares its expertise on the applicable EU regulatory framework, including through trainings and events.” That’s pretty comprehensive. Now the European Commission has begun to sit up and take notice, especially as China seems to be trying to forge closer links with extremist and anti-immigrant parties like Alternatif für Deutschland (AfD) in Germany, Austria’s Freedom Party and Lega Norte in Italy. The Commission produced a communication in 2019 that sets out some of its concerns, despite welcoming closer relations overall. “Yet there is a growing appreciation in Europe that the balance of challenges and opportunities presented by China has shifted,” says the Communication. “In the last decade, China’s economic power and political influence have grown with unprecedented scale and speed, reflecting its ambitions to become a leading global power. China can no longer be regarded as a developing country. It is a key global actor and leading technological power. Its increasing presence in the world, including in Europe, should be accompanied by greater responsibilities for upholding the rules-based international order, as well as greater reciprocity, non-discrimination, and openness of its system.” Meanwhile, Bloomberg is quoted as mentioning that “Multiple European diplomats said that China has taken an unusual degree of interest in the EU elections, and especially what populist candidates might mean for the bloc’s China policies.”
Huawei Technology in Shenzhen, China © Wikipedia
Italy and Greece have both got involved with the Belt and Road project, perhaps attracted by their own wealth of strategically useful ports and by the austerity forced upon them by the EU, in the eyes of the populists, and by their own governments’ profligacy in the eyes of others. In Greece’s case, Goldman Sachs arranged credit default swaps that allowed it to borrow a billion euros without the sum appearing as national debt, thus arguably making things worse. In March of last year, China signed a Memorandum of Understanding with Italy and a number of Italian lobbyists are now working on China’s behalf, according to COE. One is left to wonder how the locals who live near and maybe work in the ports feel about the Chinese buy-out. One hopes they fare better than the bees mentioned in a poem by the 18th century English poet, washerwoman and early feminist, Mary Collier:
“So the industrious bees do daily strive
To bring their loads of honey to the hive;
Their sordid owners always reap the gains,
And poorly recompense their toils and pains.”
Not that I’m accusing China of being sordid, merely of being the owner. But maybe in this globalised world the actual ownership of a place of work – even a strategically important place of work – is of less importance than the labour laws which are applied. A former EU employee I know worked for a while in China and found the long working hours a bit of a strain. He was glad to get back to Brussels.
China has changed. It is now imposing its greater influence on those with which it trades. As the publication The Diplomat notes: “China is moving from a ‘strategic partner’ (as depicted for more than 15 years in EU parlance) to a ‘negotiating partner.’ Ideally, the EU needs to find a balance of interests with China as an ‘economic competitor’ in the pursuit of technological leadership, and as a ‘systemic rival’ promoting alternative models of governance.” In other words, Europe, wake up and smell the…tea.
There has been far less concern over Huawei, despite its lobbying to win the contract to provide Europe’s 5G network, which it has been doing in partnership with the other Chinese tech giant, ZTE. It has employed lobbying agencies around the EU, including in Brussels, but Huawei is privately owned, despite retaining close relations with the Chinese government and is generally seen as less of a threat.
Brussels Academy for China and European Studies (BACES) conference in Brussels, 3 October 2019 © eurasiaproject.eu
No doubt Beijing would be happy to see Huawei and/or ZTE get that contract – after all the new Belt and Road initiative includes digital, as well as physical, connections and it would be happy see the network in Chinese hands. Huawei has no obvious link with ChinaEU. It is, however, the co-funder of the Brussels Academy for China and European Studies (BACES), an academic platform and think tank shared by Renmin University of China, Sichuan University, Fudan University and the Vrije Universiteit Brussel (VUB). The other co-funder is the China Scholarship Council and the Academy has links with the Confucius Institutes, of which there are well over a hundred in Europe, organising cultural exchanges, language learning and such like, but controversial because they actively stifle debate on Tibet, Taiwan and other sensitive issues. They have been closed down at some universities, according to Corporate Europe Observatory, for being too closely linked with Beijing. Huawei is also a major user of corporate lobbying companies, allegedly declaring €2,190,000 for 2017 and with a Brussels office very near the European Parliament. In its EU Transparency Register, Huawei revealed procurement funding of €2,956,199, which means money received through public funding from the European Commission or indirectly through EU-funded programmes in the member states.
From the Chinese government’s point of view there could be no better founder and president of ChinaEU than Luigi Gambardella. He is a well-known and high-profile lobbyist for the telecoms industry and chairs the board of the European Telecommunications Network Operators’ Association. He is a big supporter of Beijing and boasts a unique “worldwide network of top-level industry decision-makers, governments, regulators and trade organisations.” The website of ChinaEU writes: “Luigi Gambardella has long and extensive experience as an international leader in the telecoms field, and in all things digital. Luigi has for several years stewarded international relations as Vice President of Relations with International Institutions and Organizations for Telecom Italia, and from 2011 to 2014 he has chaired the Executive Board of the European Telecommunications Network Operators’ Association (ETNO).” With such connections, he should have no problems lobbying for “a connected digital single market” and – among other things – “annual EU-China summits”. Beijing also wants an “EU-China Year of tourism”. Better wait until after the pandemic for that one, although the Italy-China Year of Culture and Tourism has already begun. On the side lines of the opening ceremony on January 21, ChinaEU held an exclusive event in Rome. You may not be surprised. It seems unlikely, under current circumstances, that many people have taken advantage of the travel opportunities.
Maria Cristina Russo, Director for International Cooperation, Directorate-General for Research and Innovation, European Commission and Deputy Director General Zhao from the Chinese Ministry of Science and Technology, International Department in December 2019 during their meeting to discuss the way forward for the preparation of the joint EU-China roadmap for R&I cooperation © europa.eu
One of ChinaEU’s partners is Tencent, listed as one of the world’s ten most valuable brands and the owner of the social media platform WeChat, which boasts a billion users. In that capacity, it developed and deployed one of the world’s largest and most technologically sophisticated censorship systems. If you want true free speech, and accept there may be risks from trolls and Russian fake news, you don’t want to let China get involved. Tencent also helped develop China’s ‘Social Credit System’, which is due to come into effect this year. This is a nightmarish concept which will award or deduct credit points from every Chinese citizen, depending upon their behaviour, using data from facial recognition technology (which is still not 100% reliable), financial credit and on-line activity to assess if they’re ‘good citizens’ or not. George Orwell never foresaw anything quite so far-reaching but it seems that under this system Big Brother is not only watching you but monitoring your every move. At least Winston Smith could hide around the corner from that all-intrusive camera. Xi Jinping seems to subscribe to Lenin’s dictum, quoted by Sidney and Beatrice Webb in their 1936 book, Soviet Communism: “Liberty is precious – so precious that it must be rationed.”
French President Macron and Xi Jinping
To promote the Belt and Road Initiative – normally referred to as One Belt One Road (OBOR) or the New Silk Road, as China likes to call it – China has developed a number of think tanks, among them the Silk Road Think Tank Network, which is located at the Department of International cooperation of the Development Research Centre of the State Council of the PRC under the leadership of the Secretary-General. It has an important rôle – several, in fact, according to its website. “The Secretariat is tasked with first, strengthening collaboration among its members and partners while promoting knowledge sharing and common development of members and partners; second, boosting the influence of the Silk Road Think Tank Network and affording high-calibre intellectual support for the “Belt and Road Initiative”; third, conducting cooperative research, discussion and exchanges with members regarding the priorities of the “Belt and Road Initiative”; fourth, jointly organizing the Silk Road International Forum and related special conferences with relevant institutions; fifth, facilitating the network communication and online platform development, including the publications of SiLKS Newsletter, database, and e-SiLKS update, etc.; sixth, making daily work contacts with members and partners and providing service and support for them.”
The organisation has the support of the France China Foundation, which has offices in Paris and Shanghai and has links with former French Prime Minister Jean-Pierre Raffarin of the right-leaning UMP party, who is also a former member of the European Parliament. He was a speaker at the Silk Road International Forum, held in a variety of places, where he is reported as saying “We are opposed to conflict and in support of cooperation as China does. Cooperation is the key to global balance. Now in Europe, we have seen opportunities brought about by the ‘Belt and Road Initiative’ and I think we should take the chance.” You may recall that Raffarin has long been friendly towards China, arguing for Europe to lift its arms embargo against the country during a state visit there in 2005. However, the France China Foundation (FCF) should not be confused with La Fondation France-Chine (FFC), whose aims, according to its website, are research into better mutual understanding between France and China of each other’s politics, economics, culture and so on.
One of its leading lights is former French Socialist politician Dominique Strauss-Kahn, who had to step down as Managing Director of the International Monetary Fund after allegations that he had sexually assaulted a hotel maid in New York. Other allegations followed and DSK, as he likes to be called, stepped out of the limelight. Meanwhile, the Silk Road International Forum remains a very active body. If the Belt and Road plan goes ahead, it will create a vast web of interconnected countries and continents with China right at its centre.
SPANNING THE WORLD
The Belt and Road idea sounds like a good one. The Washington-based Centre for Global Development (CGD) sets out its basic premise: “As envisioned, BRI spans at least 68 countries with an announced investment as high as $8-trillion (€7.4-trillion) for a vast network of transportation, energy, and telecommunications infrastructure linking Europe, Africa, and Asia. It is an infrastructure financing initiative for a large part of the global economy that will also serve key economic, foreign policy, and security objectives for the Chinese government.” It all sounds rosy, offering some seriously poor countries the chance to develop world-spanning connections they could not normally afford. The question arises, however, of what this would mean for national debt, as the CGD report points out. “It remains unclear the degree to which BRI, a Chinese-led bilateral initiative that seeks to employ some multilateral mechanisms to achieve its financing goals, will be guided by multilateral standards on debt sustainability.”
WHO PAYS WHAT TO WHOM?
The idea for the OBOR, though, was conceived to help China’s expansion, as one might expect, and help it out of a jam. It was first presented by a former deputy director of China’s State Administration of Taxation, Xu Shanda, in a submission to China’s Ministry of Commerce in a proposal titled the ‘Chinese Marshall Plan.’ Not surprisingly it was warmly received because of its obvious benefits for the Chinese economy, especially in the immediate aftermath of the global financial crisis.
Xi Jinping and Angela Merkel Chancellor of Germany © fmcoprc.gov
It was formally announced by President Xi Jinping in 2013. “In short, this so-called Marshall Plan would be a roundabout subsidy,” reports the OGD, “keeping Chinese industry and production robust, employment in place, and GDP growth high. Such projects would literally and figuratively pave the roads for Chinese goods and services to enter new markets, as one of the explicit goals of Xu’s strategy was also to find outlets for China’s excess production capacity.” China invested trillions in creating the overcapacity to ward off the worst effects of the global financial crisis, and like Roosevelt’s ‘New Deal’, it worked. John Maynard Keynes would have approved. Possibly. But he would also have foreseen the consequences. The problem now is to turn that over-capacity to advantage, as suggested by He Yafei, vice minister of the Overseas Chinese Affairs Office of the State Council, writing in the South China Post. “The most important thing is to turn the challenge into an opportunity by ‘moving out’ this overcapacity on the basis of its development strategy abroad and foreign policy. In so doing, China will share her developmental dividends with other developing nations for common prosperity.” In other words, OBOR provides an opportunity to use up quite a lot of China’s over-production in a profitable way and with the country in which it is deployed subsequently paying for it in the end.
The issue comes under close examination in a report for the Vienna Institute of International Economic Studies report, written by Philipp Heimberger, Mario Holzner and Artem Kochnev. “Since 2013 and under the project name Belt and Road Initiative (BRI) or New Silk Road, (China) pursues the ambitious project to connect China with its neighbouring states, the Asian continent in general, and Africa and Europe with enhanced infrastructure by land and sea. The BRI routes are not described very precisely. But rather a variety of construction projects is carried out under the umbrella term ‘New Silk Road’, financed by Chinese banks, designed by Chinese construction companies and to a large part executed by Chinese workers with Chinese building materials. Accordingly, the cost estimates vary immensely; they range from around US$ 1,000-billion (€924-billion) up to US$ 8,000-billion (€7,392-billion).”
But Chinese lobbying continues, apparently based on the idea of divide and rule. The Stockholm-based Institute for Security and Development Policy cites an instructive example of how Beijing works. “Beijing has for years being successfully operating on a strategy where it offers economic and financial carrots to individual EU member countries in need for investment.
The port of Piraeus in Greece © wikipedia
For instance, through investing substantial funds into the Greek port of Piraeus, Beijing’s policymakers learned, that Greece would return the favour by, for example, vetoing a joint EU statement on human rights in China.”
Chinese President Xi Jinping and Greek Prime Minister Kyriakos Mitsotakis visiting the port of Piraeus on November 2019
The ISDP report also highlights concern over the involvement of Chinese companies run by the government, state-owned enterprises (SOE), which have in the past shown themselves to be poorly controlled and governed. “Generally, Chinese supply-driven projects are victim to waste, inefficiency and unaccountability. For these reasons, it remains to be seen whether the initiative can rise above these problems. At the same time, the structure of SOEs make these concerns even more critical. Typically, SOEs import Chinese materials, equipment and labour. One can easily envisage how this arrangement would be ripe for tension, resentment and distrust between SOEs and local populations.” On the other hand, it could provide an extensive global trade project that will potentially cover a region of some 68 countries with a combined population of 4.4 billion people.
So what should the EU do? Nobody seems to have a coherent answer to that question, although it has been an issue for quite a long time. The Washington-based Brooking Institute, a non-profit public policy organisation, notes that: “The lack of strategy to address China’s growing role in Europe has been compounded by domestic instability within Europe. Powerful capitals including Paris, Berlin and London are mired in political turmoil or stagnation. The coming months are unlikely to produce better results. The EU will continue to face domestic and regional challenges.” From China’s perspective, it’s clear that Beijing expects a more cooperative line from Brussels on issue such as Taiwan and Tibet, despite apparently liking the EU’s unity, even when trying to disrupt it. “Despite events including Brexit, the EU has remained committed to the direction of integration, pressed ahead with reforms in response to challenges and played a major role in regional and international affairs,” China’s EU policy document says, as quoted by the Chinese news agency Xinhuanet. “As major participants in and contributors to world multi-polarity and economic globalization, China and the EU share extensive common interests in upholding world peace and stability, promoting global prosperity and sustainable development and advancing human civilization, making the two sides indispensable partners to each other’s reform and development.”
From where we all stand right now, many of us in self-imposed or legally required isolation and with the World Health Organisation warning that we may never be free from the coronavirus, it’s hard to predict any sort of future. With much vital work suspended, Planet Earth would seem to be running on empty, unless the kleptocrats’ cash reserves, hidden from tax authorities in offshore tax havens can be traced and put to use. That seems unlikely as long as so many of their friends remain in positions of power. The Belt and Road project was always meant to be long term. By the time our grandchildren are asking why it was never built after all, the world will have moved on, even if no-one can predict its direction. But in the meanwhile, expect much more arm-twisting from a China determined to punch above its already considerable weight. That way we may discover whether China more closely resembles a panda or a dragon. I suspect the latter, but a real one.
Click here to read the 2020 June edition of Europe Diplomatic Magazine