U.S. President Joe Biden leaves following services at St. Edmond’s Catholic Church in Rehoboth Beach, Delaware, September 3, 2023.
Amanda Andrade-Rhoades | Reuters
WASHINGTON — President Joe Biden tested negative Monday night for Covid-19, a day after his wife tested positive and three days before he is scheduled to travel overseas.
Biden is negative and not experiencing any symptoms, White House press secretary Karine Jean-Pierre said Tuesday.
First lady Jill Biden tested positive on Monday night, but so far she has experienced mild symptoms, the White House said. The Bidens were at their home together in Rehoboth, Delaware, over Labor Day weekend after stopping in Florida on Saturday to survey damage caused by Hurricane Idalia. The president last saw the first lady on Monday morning before he traveled to an event in Philadelphia.
The first lady will remain in Delaware for the rest of the week, Jean-Pierre said.
The president is scheduled to depart for India on Thursday to attend the Group of 20 summit, and then go on to visit Hanoi, Vietnam, on Sunday. On Monday, Biden will be in Alaska to observe the 22nd anniversary of the 9/11 attacks.
If Biden were to test positive for Covid in the next few days, he could attend the G20 meetings virtually, like his predecessor Donald Trump did during the Covid pandemic.
If he were forced to stay home, the president could accidentally find himself in ignominious company. Russian President Vladimir Putin will not be attending the conference for the second year in a row, and Chinese President Xi Jinping also plans to skip it.
“I am disappointed,” Biden said of Xi’s absence, “but I am going to get to see him.”
US President Joe Biden, right, and Narendra Modi, India’s prime minister, at an arrival ceremony during a state visit on the South Lawn of the White House in Washington, DC, US, on Thursday, June 22, 2023.
Bloomberg | Bloomberg | Getty Images
Indian Prime Minister Narendra Modi has turned the normally sedate rotating presidency of the Group of 20 nations into a branding vehicle to burnish India’s geopolitical importance — underscoring India’s emergence as a key voice on the world stage.
The country’s diplomats now face a race against time to broker tangible multilateral outcomes at this weekend’s G20 leaders’ summit in New Delhi that will mark the end of India’s year-long presidency of the bloc of leading industrialized and developing economies.
India has so far not been able to foster consensus for a joint communique from the previous G20 meetings in other major tracks that it has convened. Member states haven’t been able to agree on binding action due largely to Russia’s and China’s objections to the language referring to the Ukraine crisis.
In a banner year for Indian diplomacy that also saw the world’s most populous nation take on the rotating presidency of Shanghai Cooperation Organization, India risks having little to show for its efforts that may in turn undercut the country’s credibility and Modi’s domestic messaging.
One of the risks is that by elevating India’s presidency of the G20 so much, there are now expectations for India to deliver some concrete breakthroughs.
Manjari Chatterjee Miller
Council on Foreign Relations
“What is different about India’s presidency of the G20 and what I’m amazed by is how the Modi government has turned the G20 into a nonstop advertisement for both India and his leadership,” said Manjari Chatterjee Miller, a senior fellow for India, Pakistan and South Asia at the Council on Foreign Relations in Washington, D.C.
“One of the risks is that by elevating India’s presidency of the G20 so much, there are now expectations for India to deliver some concrete breakthroughs,” she told CNBC in an email. “India has been trying to use the G20 to bring the Global South together and offer itself as a bridge between the Global South and the West. But there remains the problem of Russia and China.”
With Russian President Vladimir Putin and his Chinese counterpart Xi Jinping sitting out the Sept. 9-10 meeting, the prospect for any real breakthrough appears dim.
Indeed, the specter of Russia’s Ukraine invasion has loomed large over G20 meetings for the various tracks that India has convened.
India had hoped to forge consensus on a range of issues from a regulatory framework for cryptocurrencies to the resolution of crippling debt issues for developing countries.
Other areas include reforms in multilateral banks as part of its agenda to foster progress on sustainable development, as well as the admission of the African Union as a member of the G20.
Despite its neutral position on the Ukraine crisis, New Delhi has not been able to broker a single joint statement in any of the key discussion tracks since India took over the G20 presidency in December 2022. Instead, it has only managed non-binding chair’s summary and outcome documents.
In fact, Russia disassociated itself from the status of the outcome document in a June meeting on development issues in Varanasi, due to references to the Ukraine war. China said the meeting outcome should not include any reference to the Ukraine crisis.
“The original language was accepted by Russia at the Bali G20 — and Indian diplomats in fact, played a major part in getting Russian acceptance on that,” Pramit Pal Chaudhuri, Eurasia Group’s head for its South Asia practice, told CNBC in a telephone interview from New Delhi.
“But since then, Russia has hardened its position and joined by China to say that we don’t accept the original body language, which is taken from the UN Security Council resolution,” he added.
“Last I heard, India is still struggling to get an agreement on what type of language would be acceptable to all 20 countries,” Chaudhuri said. “If they fail to bridge that gap, then we may see the failure to issue a joint statement, and there probably won’t be an action plan afterwards.”
[Modi] is trying to portray this as a great recognition that India has arrived under his under his prime ministership.
Pramit Pal Chaudhuri
Eurasia Group
Russia’s Foreign Minister Sergei Lavrov — who is due to represent Russia at G20 leaders’ summit in place of Putin — reportedly warned there will be no general declaration at the meeting in New Delhi if Russia’s position is not reflected.
The Kremlin insists that its invasion of Ukraine is a “special military operation” in an existential war against the West that’s determined to take down Russia.
This could well be a setback for Modi’s government, which has convened more than 200 G20 meetings in more than two dozens cities across India.
“It’s actually quite brilliant and one has to give him and the BJP credit for making an event that is usually elitist and esoteric, and a rotating presidency that is routine into something the whole country can understand and be proud of,” CFR’s Miller said, referring to Modi’s ruling Bharatiya Janata Party.
More than just lining streets with banners and signs that injected plenty of visibility to the various G20 meetings, Modi has also used these meetings to clean up host cities, promote local products and more.
“At the national level, [Modi] is trying to portray this as a great recognition that India has arrived under his under his prime ministership,” Eurasia Group’s Chaudhuri said. “I think the messaging has been strong, but the reception is harder to work out, it’s harder to quantify.”
The biggest risk for Modi is the lack of tangible multilateral accomplishment out of the G20 presidency after all that has been done and invested, possibly with an eye on boosting the legacy and standing of his Hindu nationalist BJP after a decade in power and ahead of national elections next year.
Underscoring that wariness, India’s Foreign Minister Subrahmanyam Jaishankar was quick to tout the “unanimous support” from G20 member states, for twooutcomes that India proposed at the Varanasi G20 ministerial meeting on developmental issues. He even labeled it the “biggest achievement” of India’s G20 presidency so far — despite Russia and China abstaining.
“There may be a sort of backlash, or a degree of cynicism may set among voters who say — we have heard a lot — we seem to have spent a lot of money, but nothing really seems to have happened here,” Chaudhuri added.
India walked the diplomatic tightrope even as China pushed for an expansion of BRICS alliance of developing nations to build support for a broad coalition aimed at challenging U.S. dominance over the global political and economic system.
“India will continue to maintain healthy diplomatic relations with Russia amid an increasing reliance on that country’s energy imports,” Sumedha Dasgupta, a senior analyst with the Economist Intelligence Unit, told CNBC. Moscow is India’s leading source of crude oil.
“Simultaneously, India will develop stronger diplomatic bonds with the US and its allies through means such as the Quad, co-operation on critical technology and defense, which will over time amount to a gradual geopolitical shift,” she said in an email.
Underscoring India’s strategic importance, Biden hosted Modi in June in the Indian prime minister’s first state visit to the U.S.
Warming India-U.S. ties contrast with India’s continued standoff with China.
India — along with Malaysia, the Philippines, Vietnam and Taiwan — sharply rebuked China last week for a new national map that Beijing claims contested territories as its own.
As the U.S. ramps up efforts to limit the transfers of strategic technology to China on grounds of national security, India stands to gain from American companies looking to diversify their supply chains — at China’s expense.
In January, India’s commerce minister told CNBC that Apple was manufacturing its latest iPhone 14 in the country and aimed to produce 25% of all iPhones in the country.
This development serves to buttress India’s burgeoning economic clout, the basis of its greater confidence and assertiveness geopolitically.
It’s a happy coincidence for the moment, I think, for India to showcase itself as an improved economy; as an improved place for international investors … and as an alternative to China.
Pravin Krishna
Johns Hopkins University’s School of Advanced International Studies
In the last decade in power, Modi’s BJP has liberalized foreign direct investment policies, invested in infrastructure, pushed for digitalization in the world’s fifth-largest economy, along with several other neo-liberal economic policies.
“All of of these things are coming together at the right time, alongside the G20,” said Pravin Krishna, a professor of international economics at Johns Hopkins University’s School of Advanced International Studies.
“So it’s a happy coincidence for the moment, I think, for India to showcase itself as an improved economy; as an improved place for international investors; as an improved platform, potentially for manufacturing; and as an alternative to China, which India has been aspiring to be for a number of years,” he added.
A sign is seen in a stand during the Bitcoin Conference 2023, in Miami Beach, Florida, U.S., May 19, 2023.
Marco Bello | Reuters
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Dip in markets U.S. markets were closed Monday for the Labor Day holiday. The pan-European Stoxx 600 was flat, but major bourses dipped slightly and ended the day in the red. Germany’s DAX lost 0.1% as new data showed the country’s July exports dropping 0.9% on the month and 1% year on year, adding to fears about the German economy contracting in the third quarter.
‘Sick man of Europe’ Germany is once again the “sick man of Europe,” said Hans-Werner Sinn, president emeritus at the Ifo institute. The country’s business activity in August contracted sharply, according to the HCOB flash purchasing managers index. Moreover, Germany’s plans to be carbon neutral by 2045 poses a risk to its industry, which might cause a “backlash” from the population, Sinn said.
Missing Xi at G20 Premier Li Qiang will lead China’s delegation at the G20 summit in New Delhi this weekend, said China’s foreign ministry. While the ministry declined to confirm if President Xi Jinping would attend the summit, spokesperson Mao Ning didn’t correct reporters who asked if Li’s attendance meant Xi would not show up. Another noteworthy absence: Russian President Vladimir Putin.
Negotiating new grain deal Putin met his Turkish counterpart Recep Tayyip Erdogan in Sochi, Russia on Monday. Putin reportedly said Russia is ready to renew the Black Sea Grain Initiative which allowed Ukraine to export agricultural products — but only if concessions are made to Russia as well.
[PRO]Don’t sleep on these stocks Adults need seven to nine hours of sleep per day. Even though 63% of U.S. adults don’t meet that requirement, they are growing increasingly concerned about their wellbeing, according to a 2022 McKinsey survey. That’s the start of a good dream for these sleep-related stocks.
If charting the trajectory of interest rates in the U.S. economy is like “navigating by the stars under cloudy skies,” as Federal Reserve Chair Jerome Powell put it in his Jackson Hole speech, then predicting the movement of stocks is like doing so when the stars are snuffed out. As for forecasting the price of bitcoin? Add a blindfold to the intrepid navigator.
Let’s look at two predictions made earlier this year.
At the optimistic end of the spectrum is Geoff Kendrick, head of crypto research at Standard Chartered, who wrote in an April note that bitcoin’s value could jump to as much as $100,000 by the end of 2024.
What do the numbers tell us? As of publication time, bitcoin is trading at $25,774. On Jan. 1, it was at $16,606, so bitcoin’s up around 55% this year. That suggests bitcoin has legs. But if we take a longer-term view, the current price of the digital currency is about 62% lower than its all-time high of $68,990 reached in November 2021.
Adding to the confusion, bitcoin sometimes tracks the movement of stocks because it’s seen to benefit from a booming economy; bitcoin sometimes trades inversely with stocks because some consider it a safe haven in times of uncertainty. The story here, then, is that bitcoin is wildly volatile — and it’s impossible to prove or dismantle either prediction, at this point.
Still, investors are optimistic about bitcoin because a U.S. court recently sided with Grayscale in a lawsuit against the SEC, which denied the company’s application to convert its bitcoin trust into an ETF. That means bitcoin ETFs from major companies are on their way, allowing retail investors to trade the cryptocurrency without actually owning it. The price of bitcoin rallied more than 7% when news broke last Tuesday.
BRICS officials during the last day of the bloc’s 15th summit in South Africa.
Bloomberg | Bloomberg | Getty Images
The BRICS economic coalition of emerging markets on Thursday extended membership invitations to six nations, South African President and current BRICS Chair Cyril Ramaphosa said.
The BRICS alliance — which is composed of Brazil, Russia, India, China and South Africa — is set to invite Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates to join, Ramaphosa said in a speech published on the X social media platform, previously known as Twitter.
Their membership would take effect from Jan. 1, 2024.
South Africa is presently hosting the 15th BRICS summit, where the group’s expansion was a key point of the meeting agenda. Russian President Vladimir Putin was unable to attend in person, likely on account of an International Criminal Court warrant that would have theoretically obliged the host country — an ICC signatory — to proceed with his arrest.
“BRICS is a diverse group of nations,” Ramaphosa said. “It is an equal partnership of countries that have differing views but a shared vision for a better world. As the five #BRICS members, we have reached agreement on the guiding principles, standards, criteria and procedures of the #BRICS expansion process.”
A combined 23 countries have formally applied for BRICS membership, including the six that Ramaphosa said were hereby invited. Other major African players, such as Nigeria and Ghana, have expressed informal interest.
China’s president, Xi Jinping, said Thursday that the expansion is a “new starting point for BRICs cooperation.”
“It will bring new vigor to the BRICS cooperation mechanism, further strengthening a force for world peace and development,” he said at a press briefing, in comments officially translated by a summit interpreter.
Putin thanked Ramaphosa’s “unique diplomatic mastery as we negotiated all the positions, including when it comes to BRICS expansion,” noting the talks proved to be “challenging work,” according to an official summit translation.
Ramaphosa hinted at the possibility of future additions.
“We value the interest of other countries to form a partnership with BRICS. We have tasked our foreign ministers to further develop the BRICS country model and a list of prospective partner countries and report by the next summit,” he said during a press briefing of BRICS officials Thursday.
“The relevance of the BRICS is demonstrated by the growing interest of other countries to join our group,” said Brazilian leader Luiz Inácio Lula da Silva. “Now the BRICS is going up to 37% of the world’s GDP in terms of its purchasing power, and 46% in terms of the world population. BRICS will continue [being] open to new members.”
India’s prime minister, Narendra Modi, said, the “expansion and modernization of BRICS is a message that all institutions in the world need to mould themselves according to changing times.”
The UAE welcomed the membership announcement.
“We respect the vision of the BRICS leadership and appreciate the inclusion of the UAE as a member to this important group. We look forward to a continued commitment of cooperation for the prosperity, dignity and benefit of all nations and people around the world,” UAE President Mohammed bin Zayed said on X in the wake of the announcement.
Mohammad Jamshidi, deputy chief of staff for political affairs to the Iranian president, called Tehran’s BRICS membership “a strategic victory for Iran’s foreign policy” in a post on X.
Gustavo de Carvalho, policy analyst and senior researcher at the South African Institute of International Affairs, said on X that the prospective new members will not only increase the visibility of the BRICS bloc, but also provide an opportunity for coalition participants to trade with one another in local currencies.
Brazil’s da Silva on Thursday noted the BRICS group continues to study the possibility of a bloc currency, which could “increase our options for [a] means of payment and reduce our vulnerabilities,” according to an official summit translation.
“It’s still uncertain what will happen to the group dynamics, but clearly it brings a new space for trade within the Global South. Much of the arguments in the communique reflected the collective voice on need for change of international institutions, especially international financial institutions like the World Bank, IMF [International Monetary Fund] and WTO [World Trade Organization],” de Carvalho noted.
BRICS nations have struck different tones on their relationship with the West. Commercial and diplomatic tensions have risen between China and the U.S., while Russia is under a spate of Western sanctions for its invasion of Ukraine.
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“We are concerned about ongoing conflicts in many parts of the world. We stress our commitment to the peaceful resolution of differences and disputes through dialogue and inclusive consultation,” Ramaphosa said during the Thursday press briefing, without naming the conflicts in question.
The new BRICS members bring their own challenges. Iran contends with U.S. sanctions over its nuclear program, while fresh clashes in Ethiopia have raised concerns over internal stability. Egypt has faced economic pressures, and Argentina recently sharply devalued its national currency — the peso — and jacked up interest rates following the shock primary election win by far-right libertarian Javier Milei. The UAE and Saudi Arabia are both actively pursuing growth in nonoil sectors, even as Riyadh faces ongoing Western criticism of its human rights record.
China‘s President Xi Jinping missed a highly-anticipated speech at the BRICS global summit in South Africa on Tuesday, instead sending his commerce minister to deliver hostile remarks clearly directed toward the U.S.
The unexplained absence has triggered rumor and speculation. Such behavior at choreographed events are not part of Beijing’s political playbook for high-level officials — let alone for the president himself.
Chinese state media and China’s foreign ministry also appeared to have been caught off guard. News articles and social media posts from official channels were written as if Xi had made the speech, implying his absence was last-minute.
Hm. Except China’s President Xi Jinping did NOT in fact give this address. Xi was inexplicably absent. Commerce Minister Wang Wentao gave it. CGTN’s headline a bit clearer: Xi “made a speech” and added it was “read out” by Wang. Seems the president’s absence was last minute? https://t.co/sbuJtrBwRI
The speech was ultimately delivered by Commerce Minister Wang Wentao, with remarks including a fiery pushback against the United States.
“Should we embrace prosperity, openness and inclusiveness, or allow hegemonic and bullying acts to throw us into depression?” he said. Beijing traditionally uses the word “hegemon” when making veiled references to Washington.
“But some country, obsessed with maintaining its hegemony, has gone out of its way to cripple the EMDCs [Emerging Markets and Developing Countries]. Whoever is developing fast becomes its target of containment; whoever is catching up becomes its target of obstruction. But this is futile, as I have said more than once that blowing out others’ lamp will not bring light to oneself.”
The speech that Xi did not give also called for a faster expansion of the bloc — a call that could easily be interpreted as an attempt to push back against a U.S.-dominated world order. After Beijing dropped its “zero-COVID” policy early this year, China’s leaders have been eager to return to the world stage both politically and economically. The county’s economic growth is flagging and a hoped-for rebound post-COVID has not materialized. This month, Beijing said it would stop publishing youth unemployment numbers — another disappearance which implies unwelcome facts.
As for Xi, any explanation for his temporary disappearance is highly unlikely. Some have speculated that he may have fallen ill and quickly recovered. He later returned to the public eye and joined a dinner, keeping the reason for his earlier absence a secret.
The BRICS economic bloc is comprised of Brazil, Russia, India, China and South Africa. The five countries make up roughly 25% of global GDP and nearly 40% of the world’s population.
Chinese President Xi Jinping has called for the hardline approach to dealing with the Uyghurs in Xinjiang to continue, despite international criticisms.
Delivering a major speech on Saturday in Urumqi, the region’s capital city, Xi stressed that “social stability” remained the top priority there, as he highlighted the need for counterterrorism measures and further “Sinocizing” of Islam, the predominant religion for the Uyghurs who make up the majority of the indigenous population in the area.
China’s Xinjiang policies have come under international scrutiny in recent years, culminating in a U.N. human rights report that found Beijing to have potentially committed crimes against humanity. The U.S., which along with Europe has sanctioned some Xinjiang officials, has labeled the situation a genocide.
Xi, though, said he “recognizes” the Xinjiang policy in his Saturday speech.
“[We] have to combine the anti-terrorism and anti-secessionist struggle with the legalized and regularized efforts for stability maintenance,” Xi said during a surprise stopover on his way back from the BRICS summit in South Africa. “The Sinofication of Islam should be deepened in order to effectively handle all sorts of illegal religious activities.”
China will continue to teach Uyghurs the standard Chinese language, and to reallocate them for work outside the region, Xi said.
Activists have long said these policies are designed to dilute the ethnic identity, while Beijing says economic development is key to social stability.
“Xi stressed the need for more positive propaganda to show an open, confident Xinjiang,” according to state media CCTV. “Targeted efforts should be made to rebut any inaccurate and negative press.”
Australia has urged China to abolish all remaining trade restrictions after Beijing lifted tariffs on its barley imports, pointing to signs of a normalization in bilateral ties.
“We want all of the impediments removed that currently affect our trading relationship with China,” Trade Minister Don Farrell told CNBC Monday.
We think with some goodwill on both sides, that we can completely stabilize this relationship.
Don Farrell
Australian trade minister
“We always saw the barley application and the suspension of the barley application before the [World Trade Organisation] as a template for dealing with the wine issue,” he said. “So I think now’s the opportunity to have some further talks with the Chinese government.”
A decision on wine tariffs is “not very far away,” according to Farrell. “And of course, we’re extremely confident that the 220% tariffs that were applied to Australian wine will be removed.”
In April, Australia agreed to “temporarily suspend” its World Trade Organization complaint against China for its 2020 decision to impose 80.5% duties on Australian barley trade that was once worth about 1.5 billion Australian dollars ($988.1 million).
It paved the way for Beijing to expediate its review of the tariff decision.
Last Friday, the Chinese Commerce Ministry announced it was dropping all anti-dumping and countervailing duties on Australian barley starting Saturday — more than three years after they were imposed. The ministry cited “changes in the Chinese market” but did not further explain.
Bottles of wine imported from Australia are displayed for sale at a supermarket in Nantong Free Trade Zone on November 27, 2020 in Nantong, Jiangsu Province of China.
Vcg | Visual China Group | Getty Images
On Monday, Farrell said a “range of factors” were at play, with Chinese beer consumers and barley importers “very strongly in favor” of reintroducing Australian barley.
The move underscored thawing tensions between Australia and China, following the first meeting between China’s President Xi Jinping and Australian Prime Minister Anthony Albanese on the sidelines of the Group of 20 leaders’ summit in Bali in November.
Since then, Australia’s foreign minister Penny Wong and trade minister Farrell have made multiple visits to Beijing and have had direct meetings with their direct counterparts.
Relations between the two countries deteriorated in 2020 under the leadership of former prime minister Scott Morrison, after Australia supported a call for an international inquiry into China’s handling of the coronavirus pandemic, which was first reported in the Chinese city of Wuhan.
“I think our whole strategy throughout this process has been to de-escalate the issues, to try and resolve the issues between us and China through dialogue rather than disputation,” Farrell said. “And we think with some goodwill on both sides, that we can completely stabilize this relationship.”
China’s trade curbs forced Australian farmers and producers to find new markets for their produce as the Australian government sought to diversify its trading relationship with free trade agreements with India and the United Kingdom. Farrell said he is hopeful of a trade deal with the European Union “soon.”
The Camp David invitation President Joe Biden extended to his Japanese and South Korean counterparts this week – the first summit held at the legendary presidential retreat since 2015 – was a significant show of camaraderie for two increasingly essential US allies.
Undergirding the talks is the three nations’ mutual concern over China, whose leader Xi Jinping Biden has sought to cultivate, despite a hardening view of the leader as an autocrat and adversary.
“This is a guy who I think I understand,” Biden told Democratic donors last week in Utah after describing Xi’s China as a “ticking time bomb.”
“We’re not looking for a fight with China,” he went on. “But we’re looking for a rational relationship to have with China.”
Work toward a “rational relationship” has been halting, despite Biden’s long ties with Xi. After months of acrimony, administration officials have recently begun visiting Beijing in a bid to reestablish regular communication. Yet tensions persist, and US-China ties remain deeply fraught.
Perhaps no other relationship in the world is quite as consequential than the one between Biden and Xi, who last spoke in person on the sidelines of the G20 summit in Bali last November in the hopes of establishing what US officials called a “floor” in the US-China relationship.
Biden told CNN’s Arlette Saenz on Friday he hopes to follow up on last year’s meeting with Xi “this fall.”
“I expect and hope to follow up on our conversation from Bali this fall – that’s my expectation,” Biden said.
The talks were watched closely in Tokyo and Seoul, where China’s military and economic aggressions are an ever-present reality and a motivator in mending a long-tarnished relationship. At Camp David on Friday, agreements on joint military and technology initiatives will be made against the looming backdrop of Beijing’s growing power.
“China is just fact on the ground, a huge player in Asia. You can’t dismiss it away,” explained a senior administration official. “You’re trying to shape the environment in ways that both advance our interests, secure our partners, and send a clear signal about what kind of actions we think would be provocative.”
As of Thursday evening, discussions were underway about how to describe China in the joint documents that are expected to come out of the summit, Japanese Foreign Ministry press secretary Hikariko Ono told a group of reporters.
It wasn’t so long ago that Xi was invited to his own high-profile summits hosted by an American leader. President Barack Obama hosted him at Sunnylands, the sprawling Palm Springs resort intended by its builder as the “Camp David of the West,” for lengthy talks in 2013. President Donald Trump served him chocolate cake at Mar-a-Lago.
Those types of engagements are difficult to imagine now, particularly amid growing tensions around Taiwan, a battle over emerging technology, human rights concerns and a leader Biden has deemed a “dictator.”
Even though Biden often recounts the hours of meetings he held with Xi as vice president, he has been challenged in new ways by his relationship with Xi as the two men have risen to the leader level.
“When they engaged last time neither of them had power,” the official said. “Xi has an enormous amount of power now. Biden senses that, understands it.”
Biden-Xi meetings are now treated as the “biggest possible gametime” for Biden, the official explained.
“The most intense, the most focus that I’ve ever seen President Biden is in advance of these engagements with President Xi,” the official said. “The President’s level of focus is off the charts. He wants intelligence briefings, he wants to bring his advisers together, he wants to hear different perspectives and he brings outsiders in.”
That preparation demonstrates just how consumed Biden and his entire administration are by what the official called “relentless” competition between the US and China.
Still, Biden’s hugely consequential personal relationship with Xi remains a work in progress.
Some officials say that Biden has struggled to develop the type of personal relationship with Xi that he deeply values in fellow world leaders who share democratic values. When Biden met with Prime Minister Narendra Modi of India at the White House in June, they bonded over shared frustrations with Xi, according to a second senior administration official.
Biden often speaks to his personal relationship with Xi publicly on the campaign trail, and he has continued to highlight the many hours they have spent together.
“I’ve spent more time with Xi Jinping than any world leader has,” Biden told donors at his fundraiser, recounting the hours they’d spent getting to know each other when each was their country’s number two.
At the same event, Biden offered a warning that reverberated throughout the region. Describing China’s weakening economy as a “ticking time bomb,” Biden said it could prompt China’s leaders to lash out.
“That’s not good because when bad folks have problems, they do bad things,” Biden said.
It was the latest example of Biden offering candid observations donors off-camera. Earlier this summer, Biden himself demonstrated a willingness to characterize Xi in a negative light, calling him a dictator at a fundraiser.
Biden and Xi have spoken by phone several times and met in-person once, and officials said they expect the two men to speak again soon, potentially on the sidelines of an Asian leaders summit Biden is hosting in November in San Francisco.
And the extent to which their personal relationship will impact US-China relations overall has yet to be determined.
“How much does their personal relationship, their experience over you know, decades come into play? And I think the answer to that, honestly, is unknown,” the official said.
When the two leaders met in Bali, Biden drew on his personal experience in speaking with Xi about Taiwan – making commitments while he looked into Xi’s eyes, that appeared to have an impact.
“The President basically said, look, we’re not going to destabilize the status quo. We believe in the maintenance of peace and stability. We’re not going to push for Taiwan independence. And I could tell that had an impact on [Xi],” the first senior administration official said.
While leader-to-leader level engagement remains important in the eyes of US officials, its not the primary factor dictating the Biden administration’s China policy.
A senior State Department official explained it this way: “Biden and Xi do understand each other. That is borne out of years of getting to know one another. But Biden knows they aren’t changing one another’s minds.”
Former US officials closely watched Biden and Xi bond during the Obama administration, but they are not surprised by the tenor of the current relationship.
“The relationship that Biden and Xi had during the Obama administration was an unusual one. The two vice presidents bonded. They had extensive and deep conversions together. It felt like a healthy relationship,” explained Danny Russel, the assistant secretary of state for Asia during the Obama administration. “It is understandable to me that Biden might feel frustrated that the quality of the relationship he has with Xi now has little resemblance to what it used to be. Xi essentially won’t return his phone calls, and has become increasingly hardline, autocratic and ideological.”
Without the leaders’ relationship serving as the launchpad to steady the ship, Biden administration officials continue to put intense efforts into shoring up alliances. While investing in alliances has been central to the Biden administration’s foreign policy approach since day one, it has developed an outsized importance.
The trilateral meeting at Camp David on Friday between Biden, Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol on Friday will put those efforts on display.
“This summit is formalizing and institutionalizing a major strategic shift of the region,” explained a third senior administration official. “China has previously seen an unbridgeable wedge between Japan and South Korea. But now we are stronger because we are bringing them together, doubling down on our alliances.”
In the backdrop to challenging China by drawing in US allies, the Biden administration has maintained a willingness to engage at the working level with Chinese officials. Secretary of State Antony Blinken, Secretary of the Treasury Janet Yellen and Climate Envoy John Kerry have all visited Beijing in the last two months.
Their visits come as US officials continue to believe that engagement is key in order to prevent competition from veering into conflict. But they are not banking on those engagements resulting in major deliverables.
“It is about getting caught trying,” said a diplomat from the Indo-Pacific who has been briefed on the visits. “The Biden administration has always been clear that talking is best, they will keep showing up, and communication is necessary. But it is really to show the rest of the world that they are not giving up, even though they are not expecting anything major out of the engagements.”
The Chinese embassy in Moscow on Friday criticized “brutal and excessive law enforcement by Russia” after five Chinese citizens were denied entry into the country.
In a post on Chinese social media platform WeChat, the embassy said the incident had “seriously damaged the legitimate rights and interests of Chinese citizens.”
On attempting to enter Russia on July 29, the group of Chinese citizens was “repeatedly” questioned for “up to 4 hours,” according to the statement. They had their tourist visas canceled and were refused entry, it said.
The incident is “inconsistent with the overall situation of friendly Sino-Russian relations and the trend of increasingly close friendly exchanges of personnel between the two countries,” added the embassy. “The Russian side is required to immediately find out the cause of the incident, take active measures to eliminate the bad influence, and ensure that similar incidents will not recur in the future.”
Beijing committed to a “no-limits partnership” with Moscow just two days before Russia invaded Ukraine on February 24, 2022. It is among the Kremlin’s top remaining allies, and has not condemned Russian President Vladimir Putin for the invasion.
Representatives of the Chinese government this weekend are joining more than 40 countries in Jeddah, Saudi Arabia, for Saudi-hosted — and Kremlin-free — Ukraine peace talks.
Five weeks ago, the world watched as China’s Foreign Minister Qin Gang met US Secretary of State Antony Blinken in Beijing for high stakes talks between the two powers.
But anyone looking for reference to that important event on the website of China’s Foreign Ministry will be disappointed, as that meeting – and all of Qin’s activities as Foreign Minister – has been erased from the record following a head-spinning leadership shake-up Tuesday that saw Qin abruptly replaced by his predecessor Wang Yi.
The shock ouster, approved by a top body within China’s rubber-stamp legislature, had followed weeks of questions and speculation about Qin’s fate after he disappeared from public view in late June, without a clear explanation.
The latest twist in the saga – the complete erasure of Qin’s swift, six-month tenure as Foreign Minister and his replacement by Wang, who held that post for roughly a decade before a promotion late last year – only serves to deepen the mystery.
Qin’s whereabouts, the reason for his removal, and his ultimate fate as a member of China’s Communist Party all remain unknown.
Unanswered questions about official decision-making are standard in China, where the political system is notoriously opaque and has only become more so under Chinese leader Xi Jinping.
Senior Chinese officials have disappeared from public view in the past only to turn up months later in announcements they’ve been under secret disciplinary investigation.
But the circumstances that have played out in recent weeks surrounding Qin – widely seen as a trusted aide of Xi and one of China’s most recognizable officials as the face of its foreign policy and a former ambassador to the US – has brought those features of China’s political system into the global spotlight.
“The lack of transparency is already a well known issue for the Chinese bureaucracy. And decisions are fine until they are not. And when they are not, it usually creates much bigger trouble for the system,” said Yun Sun, director of the China Program at the Washington-based think tank Stimson Center.
“The swift replacement does not reflect well on Xi for sure. At the minimum, people will be questioning what went wrong and made the replacement necessary. But it also suggests that the cause must be grave for (Qin) to be removed,” she added.
Meanwhile, the timing of the episode, as China has been campaigning to present its leadership as an appealing alternative to that of the West, only ups the potentially damaging optics.
“Qin’s removal will reinforce perceptions abroad that the Communist Party is an opaque and unreliable diplomatic partner … (and) do no favors for Beijing’s international efforts to portray its governance system as worthy of praise and emulation,” said Neil Thomas, a fellow for Chinese Politics at Asia Society Policy Institute’s Center for China Analysis.
Qin’s appointment to the post of Foreign Minister last year over more experienced candidates was seen as a sign of deep trust bestowed on him by Xi, who stacked China’s leadership with his close allies as he consolidated power last year while entering a norm-breaking third term as leader.
“It is widely believed that Xi has a very small inner circle of people that he consults, and on top of that is over confident and makes decisions based on his own instincts,” said Bonnie Glaser, managing director of the German Marshall Fund’s Indo-Pacific program.
“Qin is his protege, and therefore this will necessarily reflect badly on Xi. However, that doesn’t mean that this episode will pose a challenge to his power,” she said.
As the news of the leadership changes were flashed by Chinese state media Tuesday evening, China’s vast apparatus for controlling public discussion around political and social events moved into gear.
Social media hashtags relating to Qin’s removal were censored on the popular Chinese social media app Weibo, including at least one that aimed to evade censors by discussing the decision under a hashtag about a television show set around the time of China’s ancient Qin dynasty.
Meanwhile, hashtags about Wang’s appointment remained live on the platform Wednesday morning, but were only showing posts from verified accounts, largely state media or government agencies, without any user generated comments visible.
“It is likely that the official media outlets will propagate the idea that the top leadership is wise in removing a senior official who had been trusted and henceforth was found making mistakes,” said Li Mingjiang, an associate professor of international relations at Singapore’s Nanyang Technological University.
Depending on what further information comes about Qin’s circumstances, Chinese media “can always spin around to say that this is an example of the Party’s determination to take strict disciplinary actions whenever a senior official is found of doing things wrong,” he added.
It remains unclear when, or if, further information will be released about the reasons for Qin’s removal, and that void in information has been filled with rampant rumor and speculation.
When asked earlier this month about why Qin had missed a diplomatic gathering, a ministry spokesperson cited “health reasons.”
During a regular ministry briefing Wednesday, a spokesperson refused to provide information on why Qin was replaced and said the ministry website was “updated in accordance with the relevant regulations,” when asked why records of Qin’s time as foreign minister were removed.
Qin for now appears to have retained his domestic-facing, high-level administrative post as State Councilor.
But observers of elite Chinese politics say that the silence around why he has been replaced and his erasure from the ministry website point to political reasons, which could become clear in coming months if there is an official announcement of an investigation against him.
“Beijing is reserving the flexibility to decide on their stories later. I don’t think an announcement about what happened will happen anytime soon. Beijing will wait till people almost forgot about it to avoid more attention,” said Sun in Washington.
The Foreign Ministry shake-up comes at a particularly sensitive time in China’s international relations. Beijing is seeking to stabilize fractious relations with the United States and woo back a Europe that has been increasingly suspicious of China’s close ties to Russia as it wages war on Ukraine.
And while Qin’s mysterious disappearance and ousting makes for awkward international optics, it also places China’s foreign policy back in the hands of a seasoned veteran who filled the role from 2013 to 2022.
When asked about Qin and Wang in a press briefing Tuesday, American diplomat Blinken said the US would engage with “whoever the relevant Chinese counterparts” are in order to manage the US-China relationship.
“I’ve also known Wang Yi for more than a decade. I’ve met with him repeatedly in my current capacity as Secretary of State and including just recently in Jakarta and I anticipate being able to work well with him as we have in the past,” Blinken said, noting that he “wished (Qin) well.”
Wang in recent years has been known for his combative “wolf warrior” stance, but has also been seen as a smooth operator, regularly dispatched to tackle China’s thorniest diplomatic issues and meet with close allies, including a February trip to Moscow to meet with Russian President Vladimir Putin.
Kept on by Xi despite having reached the standard retirement age during a five-yearly leadership reshuffle last October, he was promoted late last year to the role of China’s top diplomat, overseeing the foreign affairs arm of the ruling Communist Party (a separate and distinct body from that of the government foreign ministry).
It appears he’ll now fill that post and his old one – an arrangement that Asia Society’s Thomas suggests could be temporary while also allowing Wang to navigate a period of months that could see Xi visit the US in November for an economic summit.
His appointment, however, overlooks an ample bench of potential candidates, according to Victor Shih, director of the University of California San Diego’s 21st Century China Center, which “suggests that the top leadership is unsure of a good replacement and opted for a safe option and a pair of steady hands.”
“This desire might give us a hint of what exactly happened to Qin Gang,” he said.
China will follow its own path to cut carbon emissions, leader Xi Jinping vowed Tuesday, as US climate envoy John Kerry called for faster action to confront the climate crisis in a high-profile visit to Beijing.
Xi told a national conference on environmental protection that China’s commitment to its duel carbon goals – reaching a carbon peak by 2030 and carbon neutrality by 2060 – is “unwavering,” according to state news agency Xinhua.
“But the path, method, pace and intensity to achieve this goal should and must be determined by ourselves, and will never be influenced by others,” he said.
The comments came as Kerry met China’s Premier Li Qiang and top diplomat Wang Yi Tuesday, with Washington and Beijing – the world’s two largest polluters – resuming their long-stalled climate talks amid scorching heat waves across much of the globe.
In the meeting with Li, Kerry stressed the “need for China to decarbonize the power sector, cut methane emissions, and reduce deforestation,” a spokesperson for the US State Department said in a statement.
He also urged China to “take additional steps to enhance its climate ambition in order to avoid the worst impacts of the climate crisis.”
China has invested heavily in clean energy in recent years. Its solar capacity is now greater than the rest of the world combined, and the country is also leading the world in wind capacity and electric vehicles.
On the other hand, it has accelerated the approval of new coal plants due to a renewed focus on “energy security,” sparking concerns from environmentalists that these new projects will make the shift away from coal slower and more difficult.
But Xi’s remarks at the conference suggest that China has no desire to be pushed, or be seen to cave to pressure – especially from the United States.
China and the US are the world’s two biggest greenhouse gas emitters, so any attempt to address the climate crisis will need to involve deep emissions cuts from these two powerhouse nations.
China’s emissions are more than double those of the US, but historically, the US has emitted more than any other country in the world.
China and other fast developing nations have long argued that the world’s richest countries, especially those in the West, were able to become wealthy while churning out huge carbon emissions for decades.
Relations between the US and China are at their worst in years with the world’s two largest economies feuding over a host of issues, from geopolitics to trade and technology.
The US has said climate cooperation with China should be a standalone issue, separate from their disputes.
But Beijing views it differently. Last year, it cut off climate talks with the US in protest at then-House Speaker Nancy Pelosi’s visit to Taiwan – in the middle of the worst heat wave China had seen in six decades.
It also halted cooperation on other common causes issues, including communications between military and law enforcement.
That difference in views has been on full display in Beijing, even as the two sides return to the table to restart talks.
When meeting Wang, China’s top diplomat, on Tuesday, Kerry stressed the two countries “cannot let bilateral differences stand in the way of making concrete progress” on climate cooperation.
But Wang insisted this cooperation “cannot be separated from the overall environment of Sino-US relations.” He urged the US to pursue a “rational, pragmatic and positive policy toward China” and “properly handle the Taiwan issue,” referring to the democratic self-ruled island that Beijing claims sovereignty over.
On Wednesday, Kerry reiterated his message to Chinese Vice-President Han Zheng that climate should be handled separately from broader diplomatic issues, Reuters reported.
Acknowledging the diplomatic difficulties between the two sides in recent years, Kerry said climate should be treated as a “free-standing” challenge that requires the collective efforts of the world’s largest economies to resolve, according to Reuters.
New Delhi — China’s Xi Jinping urged the leaders of Russia, Iran and other allied allies to boost ties and resist Western sanctions on Tuesday as the leaders of the Shanghai Cooperation Organization met virtually for a summit hosted by India. The Shanghai alliance encompasses a vast stretch of the globe from Moscow to Beijing and includes around half the world’s population when observer and “dialogue partner” nations are included.
Alongside Russia, China, India and brand-new member Iran, the other full members of the trade and security alliance are Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan and Uzbekistan. Russian ally Belarus, which holds observer status, was also told it would become a member at the next SCO summit.
Below are some of the main points made by the bloc’s leaders on Tuesday, and what’s behind them.
Putin thanks allies for support during “rebellion”
Russian President Vladimir Putin thanked his Shanghai organization partners for their support during a brief, failed mutiny staged by the head of the Wagner mercenary group. Putin spoke via video link at the meeting, which was his first summit since Yevgeny Prigozhin ordered units from his private army — which has been a key component in Russia’s war in Ukraine for a year — to march on Moscow after accusing Russia’s military commanders of treason and ineptitude.
“Russia is confidently resisting and will continue to resist external pressure, sanctions and provocations,” Putin said, adding his thanks to the other SCO nations for their support during the Wagner putsch attempt, which he previously labelled a “rebellion.”
“I would like to thank my colleagues from the SCO countries who expressed support for the actions of the Russian leadership to protect the constitutional order and the life and security of citizens,” he said.
China and Russia have in recent years ramped up economic cooperation and diplomatic contacts, with their strategic partnership having only grown closer since Moscow’s invasion of Ukraine last year.
China wants to “ensure common security”
During the virtual meeting, Xi “called for efforts to safeguard regional peace and ensure common security,” China‘s state news agency Xinhua said, adding that he urged SCO member states to “enhance their solidarity.”
While China says it is a neutral party to the Ukraine conflict, it has been criticized by Western nations for refusing to condemn Moscow’s offensive, and accused by current and former U.S. officials of supporting Putin’s war effort by buying more Russian energy and other goods since the invasion began.
“We must be highly vigilant against external forces fomenting a ‘new Cold War’ and creating confrontation in the region, and resolutely oppose any country interfering in internal affairs and staging a ‘color revolution’ for any reason,” Xi said, referring to pro-Western popular uprisings in Eastern Europe in recent decades — most notably in Ukraine.
“Strengthening unity” with Iran
Iran joined the Shanghai Cooperation Organization as a full member on Tuesday, with Tehran having intensified its diplomacy with friends and foes alike in recent months, seeking to reduce its isolation, improve its economy and project strength.
Tehran’s membership will support “collective security… expanding ties and communications (and) strengthening unity,” Iranian President Ebrahim Raisi said.
Iran‘s membership will feed concerns of some Western critics who worry about “Russia, China, Pakistan and Iran coming together, so there is a collection of countries that are inherently anti-Western in their orientation,” said Harsh V. Pant, a professor at King’s College London. But he added that the SCO was not that organization.
“If this kind of an axis is to be formed, it will be formed independent of the SCO, because the Central Asians and countries like India do not see SCO as inherently anti-West,” Pant told AFP.
India’s Prime Minister Narendra Modi warned of the risk of Afghanistan serving as a base to “spread instability,” while his Pakistani counterpart Shehbaz Sharif called for an “urgent reset” in international engagement with Afghanistan’s Taliban rulers.
Since retaking power over Afghanistan when the U.S. and its allies withdrew in the summer of 2021, the hard-line Islamic Taliban movement has robbed women and girls of virtually every right they’d gained in the 20 years since they were last ousted from power by the U.S.-led invasion.
The group’s draconian policies and rampant human rights abuses have seen their de-facto Afghan government all but cut off from most of the world, with millions of dollars in cash reserves frozen and the a long list of sanctions in place. The circumstances for the Afghan people, meanwhile, have deteriorated significantly, with
Uniquely, it is a member of both the Shanghai Cooperation Organization and “The Quad,” a small cooperative group set up with the United States, Japan and Australia to counter Beijing’s growing assertiveness.
BEIJING (AP) — China on Wednesday called comments by President Joe Biden referring to Chinese leader Xi Jinping as a dictator “extremely absurd and irresponsible.”
Foreign Ministry spokesperson Mao Ning said Biden’s comments at a fundraiser in California “go totally against facts and seriously violate diplomatic protocol, and severely infringe on China’s political dignity.”
“It is a blatant political provocation. China expresses strong dissatisfaction and opposition,” Mao said at a daily briefing.
“The U.S. remarks are extremely absurd and irresponsible,” Mao said.
Blinken’s visit, during which he met with Xi, was aimed at easing tensions between the two superpowers but appeared not to have achieved any solid results.
Biden, at the fundraiser on Tuesday night local time, said that Xi was embarrassed over the recent tensions surrounding a suspected Chinese spy balloon that had been shot down by the Air Force over the East Coast.
“That’s a great embarrassment for dictators. When they didn’t know what happened,” Biden said.
Mao reiterated China’s contention that the balloon was intended for meteorological research and had been blown off course accidentally.
“The U.S. should have handled it in a calm and professional manner,” she said. ”“However, the U.S. distorted facts and used forces to hype up the incident, fully revealing its nature of bullying and hegemony.”
U.S. Secretary of State Antony Blinken meets with Chinese President Xi Jinping in the Great Hall of the People in Beijing, China, on June 19, 2023.
Leah Millis/Pool Photo via AP, File)
Blinken’s visit had been originally scheduled for February, but was put on hold after the balloon incident. While it marked a return to high-level contacts between the sides, China continues to refuse talks between their militaries.
In recent days, the U.S. says Chinese warplanes and naval ships have maneuvered in threatening ways to their U.S. counterparts in the Taiwan Strait and South China Sea, despite agreements between them on protocols for avoiding such incidents.
During Blinken’s visit, China reiterated its strong objections to U.S. support for the self-governing island democracy of Taiwan, which Beijing claims as its own territory. The U.S. has also sought to block Beijing’s access to cutting-edge computer chip manufacturing technology that could be used for military purposes, and accused China of stealing American intellectual property.
After meeting with Xi on Monday, Blinken acknowledged entrenched differences. “We have no illusions about the challenges of managing this relationship. There are many issues on which we profoundly, even vehemently, disagree,” he said.
China on Wednesday hit back at U.S. President Joe Biden’s recent comment that his Chinese counterpart Xi Jinping was a dictator.
“It is a blatant political provocation. China expresses strong dissatisfaction and opposition,” said Mao Ning, spokesperson for the Chinese foreign ministry, at a regular press briefing, AP reported.
“The U.S. remarks are extremely absurd and irresponsible,” Mao added.
China’s response comes a day after Biden, speaking at a campaign event in California, likened Xi to a dictator when referring to the U.S. downing a Chinese spy balloon in February.
“The reason why Xi Jinping got very upset in terms of when I shot that balloon down with two box cars full of spy equipment is he didn’t know it was there,” Biden said. “That was the great embarrassment for dictators, when they didn’t know what happened.”
The row is likely to complicate efforts to improve already strained Sino-American relations.
On Monday, U.S. Secretary of State Anthony Blinken met with Xi during a high-stakes trip to Beijing, which was aimed at easing mounting tensions between the two superpowers.
An annual meeting of Volkswagen shareholders in Berlin in May was disrupted by protesters, one of whom hurled the creamy confection at the assembled executives, forcing Chairman Hans DieterPötsch to flinch out of the way.
Among the subjects of their ire: A car plant some 3,500 miles away in the Chinese region of Xinjiang, where Beijing has carried out a campaign of mass detention, reeducation and forced labor that the United States has described as genocide of the Uyghur ethnic minority.
One topless woman in the room waved a banner with the words “End Uyghur Forced Labor” before the protesters were escorted away. Outside, other activists held up signs saying “Camps, forced labor, family separations: VW major shareholders in Lower Saxony must not remain silent about crimes against Uyghurs.”
Volkswagen denies it has ever utilized forced labor in Xinjiang. But it has been less willing to grapple with the broader accusation: That by maintaining the facility at the request of Beijing, the company — and by extension the German government, which supported the carmaker’s investments in China — is providing political cover for crimes against humanity.
“Even if there is no forced labor, it is such a big symbol for the Chinese government to show the world that they bring prosperity to the region,” said Eva Stocker, senior project officer from the World Uyghur Congress, an advocacy group for Uyghur rights and self-determination. “But we see it as a genocide.”
The rising criticism over Volkswagen’s presence in Xinjiang has been accompanied by a shifting in the political and economic winds. Russia’s war on Ukraine has kicked off a broader conversation about strategic dependency, with officials in Brussels and Washington calling for “de-risking” with regard to Beijing. At the same time, worries about climate change are upending the automobile market, with Chinese electric carmakers preparing to challenge legacy brands in Europe on their own soil.
This all poses a conundrum for Volkswagen, which led the Western charge into the Chinese market in the 1980s and remains dependent on business there for 15 percent of its pretax profit and 37 percent of its new car sales last year.
China’s treatment of Uyghurs is unlikely to be central to the discussions as German Chancellor Olaf Scholz hosts a Chinese delegation led by Prime Minister Li Qiang this week. But Volkswagen’s relationship to China, and the human rights abuses being carried out there, is illustrative of Berlin’s increasingly uncomfortable dependency on Beijing — and the challenges Germany is likely to face as the West seeks to turn de-risking from a slogan into action.
Slave labor
Potential complicity in genocide is a charge to which one might expect Volkswagen to be sensitive. When the company was founded in 1937 by the national labor organization of the Nazi Party, it used concentration camp prisoners as slave labor. Hundreds of infants kept at a children’s home run by Volkswagen were starved to death.
During the Holocaust, the Nazis sent their perceived enemies to extermination camps. In Xinjiang, human rights groups have documented mass incarceration, forced sterilization, the suppression of religious practices, including the burning of mosques, and the separation of hundreds of thousands of schoolchildren from their parents. Many believe these practices meet the definition of genocide as acts intended “to destroy, in whole or in part, a national, ethnic, racial or religious group.”
The United States government has denounced human rights abuses in Xinjiang as genocide, as have national legislatures in France, the Netherlands, the United Kingdom, Lithuania and Canada. The German Bundestag has not, though Foreign Minister Annalena Baerbock has called for a ban on goods made with forced labor and for investigations into China’s actions in Xinjiang.
Volkswagen denies it has ever utilized forced labor in Xinjiang | Freddy Chan/EPA via EFE
Investigative journalists have found traces of forced labor camps within 15 miles of Volkswagen’s Xinjiang plant, which is a joint venture initiative with SAIC Motor, the largest state-owned automobile manufacturer in China. As POLITICO and other media reported, the use of forced labor was so rampant in the region that schoolchildren were organized by schools to carry out manual labor.
“By the plant, there are seven concentration camps … so this is what Volkswagen cannot deny, but they say they are not connected with them,” Erkin Zunun, the chief coordinator of the World Uyghur Congress based in Munich, said. “Nobody can say 100 percent there is no connection to forced labor.”
Ralf Brandstätter, the head of Volkswagen’s China operations, said after a visit to the Xinjiang plant in March that he’d found no evidence of forced labor. “I can talk to people and draw my conclusions. I can try and verify the facts [from joint venture partner SAIC], and that’s what I did,” Brandstätter said. “I didn’t find any contradictions,” he added, citing seven staffers he’d spoken to via translators.
Over the past few years, European diplomats based in China have made repeated inquiries into Volkswagen’s presence in Xinjiang, according to three diplomats granted anonymity to speak frankly about their exchanges. Time and again, they received the same answer. “They always insist there’s no forced labor, and that the minorities they hire in the local plant are not forced labor,” one of them said. “They don’t care what happens outside the factory.”
Volkswagen rejected the accusation that by being in Xinjiang, the company is complicit in the human rights violations being perpetrated there. “Will something change if Volkswagen leaves?” said a Volkswagen spokesperson speaking on condition of anonymity. “We have doubts about this.”
The spokesperson said the company pays its employees at the plant on average 30 percent more than other automakers in the region and has had practically no staff turnover in recent years. “We are offering around 250 workers and their families a good … living in the region,” the spokesperson said.
‘Devil’s agreement’
On its own, Volkswagen’s investment in Xinjiang — and the company’s decision to stay there despite human rights violations in the area — makes little reputational or economic sense.
Since the COVID shutdowns, the plant hasn’t been used for vehicle assembly or production, but rather as a sorting center for cars heading to local dealerships. Last year, Volkswagen says some 10,000 cars — an average of less than 28 a day — were cleared through the facility, with plans to increase this over the next few years. Staff at the site carry out water resistance checks, quality controls and assess driver assistance systems, a spokesperson said.
The investment has to be considered in the broader context of Volkswagen’s engagement with Beijing. Unrestricted access to the Chinese market is mission-critical for all German automakers, but for Volkswagen, it’s what makes it a global heavyweight brand. Nearly 40 percent of Volkswagen’s global car sales were in China last year, up from 31 percent a decade ago, according to data from the Center for Automotive Management in Cologne.
According to a senior Western diplomat, Volkswagen’s Xinjiang presence is part of a “devil’s agreement” that the Chinese government imposed on the German car company 15 years ago. Under the deal, Volkswagen had to agree to build a new factory in Xinjiang — which was and has remained an economic backwater — in return for permission for a dozen new plants in the economically vibrant eastern coastal area, as well as the booming central provinces.
“The misleading assumption is that we were forced, that we opened the plant as a push from the government in Beijing,” said the Volkswagen spokesperson. “That isn’t true. It was part of a greater plan — the Go West strategy,” referring to the company’s ambitions to expand into less developed parts of China.
Today, pulling out would risk jeopardizing relations with Beijing, as China often treats expressions of concern about human rights violations in Xinjiang as endorsements of what it sees as U.S. pressure on the country.
The presentation of the new Golf GTI at the Shanghai car show in 2021 | Hector Retamal/AFP via Getty Images
Volkswagen is determined to live with its contractual obligation with SAIC to stay in Xinjiang at least until 2030, Volkswagen chief lobbyist Thomas Steg told journalists in March. “This plant is owned and operated by a non-controlled joint venture, all the decisions have to be taken unanimously,” the company spokesperson said.
In a written statement, Volkswagen Group said it “stands firmly against” forced labor, adding it “takes its responsibility for human rights very seriously in all regions of the world, including China.”
“In a globalized world, we can only really strengthen Germany as a business location if we maintain and further develop our relations with major economic players such as China,” it said.
Green evolution
While Volkswagen has traditionally enjoyed strong support from Berlin for its investments in China, the political winds back home have started to shift.
The main push comes from the Green Party, a junior partner in Germany’s coalition government, and its calls for “values-driven” diplomacy. In May 2022, the German Economy Ministry, led by Green Party heavyweight Robert Habeck, announced it would stop all investment guarantee schemes for companies looking to invest in the Xinjiang region of China due to the deteriorating human rights situation.
Volkswagen’s investment guarantees were not extended because the interministerial committee that decides on them determined that the company “has too little control and knowledge … within the joint venture to adequately counter the human rights risks,” a German official said.
Chinese carmakers with cheaper battery technology are making a play for Europe | Tobias Schwarz/AFP via Getty Images
Foreign Minister Baerbock has also taken a tougher line, warning companies that they won’t be bailed out with taxpayers’ money if “things go wrong” in other parts of the world. Her stance has not gone unnoticed by Beijing. When Baerbock visited China in April, her counterpart Qin Gang warned Berlin it should be thinking about its business interests.
“Both sides should maintain and advance existing cooperation, create a favorable environment and stable expectations for cooperation between enterprises of the two countries, and provide stronger growth drivers for the global economy,” Qin said.
Germany’s first National Security Strategy, released last week, criticizes China for disregarding human rights, although the document does not go further into detail. Berlin also plans to release a dedicated China strategy in July.
For the automaker, the Green Party’s China policy has become a headache. “It’s crazy what Habeck and Baerbock are doing at the moment … [They] just try to bring confrontation to the world,” said Ferdinand Dudenhöffer, director of Center for Automotive Research, an industry group with close ties to Volkswagen and to Chinese carmakers. “It’s really crazy.”
Dudenhöffer insisted the German carmaker had done everything within its capacity to ensure good labor standards in the Xinjiang plant. He didn’t believe the company had broached with Beijing the possibility of the plant’s closure or the transfer of its ownership to its Chinese partners. “I think they discussed it internally, but … if you start to talk about that issue [with the Chinese], then you start to go into opposition with the most important market you have in the world,” he said.
The EV threat
The irony is that Volkswagen’s morally expensive bet may not even pay off.
After enjoying decades of market leadership, the German auto giant is struggling to cope with the impending demise of the combustion engine and is facing unprecedented challenges from Chinese-made electric vehicles, which are now set to become the “greatest risk” facing European carmakers, according to a report by Allianz Trade.
Even as Volkswagen doubles down on the Chinese market, Chinese carmakers with cheaper battery technology are making a play for Europe, with brands like BYD, Great Wall, Nio and Xpeng launching across the Continent.
While electric vehicles only make up around 5 percent of European sales, EU regulators have mandated a phaseout of the combustion engine by 2035. One analysis predicts Chinese imports could make up nearly a fifth of all European sales by 2025 — bad news for local legacy brands.
Even if Volkswagen does find a way to hold out at home, its investments in China could be at risk if Europe raises trade barriers against Chinese vehicles, as France has been calling for. Such a move would almost certainly lead to reciprocal action from Beijing, which has not shied away from using its regulatory muscles to push its diplomatic interests.
In 2017, for example, when South Korea sought to buy a missile defense system from the U.S. in order to stave off the threat from North Korea, Beijing vocally opposed the move, and sales of Hyundai and Kia models subsequently plummeted, sparking rows with dealerships and plant closures.
Under President Xi Jinping, China has also sought to diminish the market share of foreign companies. In telecoms, for example, European players like Ericsson and Nokia have been crowded out by homegrown heavyweights Huawei and ZTE. China may have needed Western companies to jump-start its industrial development, but with Xi seeking to present China as an alternative to the West, that utility is quickly fading.
In other words, for Volkswagen’s executives, cake-throwing protesters may be the least of their worries.
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Stuart Lau , Joshua Posaner and Hans von der Burchard
A visit of America’s top diplomat to China this week ended with both Washington and Beijing expressing hope that this was a key first step to getting their broken relationship back on track.
But beneath those positive signals, the two-day visit to Beijing from US Secretary of State Antony Blinken highlighted another reality: a wide and dangerous gulf between the two powers.
On fundamental and pressing issues, such as whether the two countries are competing with one another, if there is mutual respect in the relationship, and how to mitigate a chance of conflict between them, the US and China still remain miles apart.
Finding common ground between the two sides – one, an authoritarian country keen to expand its global sway, and the other, a democratic superpower with sweeping international influence – was never going to be easy.
The fact that Blinken’s visit went ahead after a months-long delay due to a dispute over a Chinese surveillance balloon and then culminated in a meeting Monday with Chinese leader Xi Jinping, was widely seen as a positive step to stabilizing ties.
The timing of the visit, which followed two close encounters between Chinese and American armed forces in Asia in recent weeks, underscored the urgency of talking.
But the roughly 11 hours that the American envoy spent with senior Chinese officials also revealed some of the key fault lines that make navigating the relationship increasingly difficult – even with the dialogue that both sides pledged to support.
Xi highlighted one of the starkest areas where the US and China cannot – at least in their official positions – see eye-to-eye.
Positioned at the head of a table where the rest of the two delegations, including Blinken, sat facing each other on either side, Xi laid out his view that “major-country competition does not represent the trend of the times.”
“China respects US interests and does not seek to challenge or displace the United States. In the same vein, the United States needs to respect China and must not hurt China’s legitimate rights and interests,” he said.
That stance, that the US and China are not in competition with each other, sharply diverges from the American view, and indeed, implications for China’s own foreign policy.
Washington has been clear that it has entered into a phase of competition with China – with Blinken laying out the Biden’s administration’s view that Beijing is “the most serious long-term challenge to the international order” in a sweeping policy address last year.
As such, the US is taking steps to counter what it sees as the Chinese government’s efforts to expand its influence and dismantle a world order with universal values of human rights and democracy.
In recent months, US has slapped sanctions on Chinese companies, pushed allies to restrict semiconductor exports to China, rallied other advanced economies to counter Beijing’s “economic coercion” and “de-risk” supply chains, and signed a new trade deal with Taiwan, a self-ruling democracy China’s Communist Party claims but has never controlled.
Beijing, for its part, has called for a world where there’s not one major power but many, who agree not interfere in each other’s internal affairs, be they human rights violations, political repression or economic development. It sees the US as suppressing China’s growth and interfering its in affairs out of self-interest.
“Acknowledgment that the relationship is strategically competitive could require a reevaluation of Chinese domestic priorities and resources,” according to Bonnie Glaser, managing director of the German Marshall Fund of the United States’ Indo-Pacific Program.
And that has significant implications.
“The Chinese are not supportive of the US proposal to put in place guardrails to prevent competition veering into conflict,” she said, adding that, for example, Beijing doesn’t “want to make it safer for the US to conduct surveillance and reconnaissance close to China … deliberately increasing risk in the air and sea.”
The two sides have seen multiple dangerous military interactions in recent months, including a near collision of warships in the Taiwan Strait and a close Chinese interception of an American reconnaissance plane over the South China Sea.
China cut off talks with US military commanders following then-US House Speaker Nancy Pelosi’s visit last year to Taiwan, and the break in high-level communication has ratcheted fears a mishap could spiral into conflict.
Blinken was unable to win China’s agreement to restore high level military communication this week – another deep-rooted stumbling block.
Washington was fully aware why, Yang Tao, director-general of the ministry’s North American and Oceanian affairs department told reporters Monday evening, pointing to “unilateral sanctions” from America.
“The US needs to remove the obstacle first,” Yang said.
Chinese Defense Minister Gen. Li Shangfu has been under US sanction since 2018 over China’s purchase of Russian weapons.
For China, this comes down to respect, according to Shen Dingli, an expert on China’s foreign policy in Shanghai.
“China cannot accept the US talking to us in a condescending way while the Chinese Minister of Defense is under US sanctions. We don’t want to look up to the United States, at the very least we should look at each other at eye level,” he said.
In the lead-up to and during Blinken’s visit, China made clear who it thinks is responsible for the problems in the relationship.
The “root cause is US misperceptions toward China,” Beijing’s top diplomat Wang Yi told the visiting American during a meeting Monday morning.
Progress does not appear to have been made over issues at the core of this contention – from US relations with Taiwan to the implications of an American view of a competitive relationship.
Both sides did signal that they would work together on global challenges like climate change and drug trade, and agreed to “continue open lines of communication,” according to Washington.
Areas for cooperation cited by Beijing after the meetings this week appear scaled back as compared with those following an amicable and wide-ranging conversation between US President Joe Biden and Xi on the sidelines of the G20 meeting in Bali last November.
“It was clear coming in that the relationship was at a point of instability,” Blinken said at a news conference in the Chinese capital Monday. “And both sides recognized the need to work to stabilize it.”
This – and a potential visit from Xi to the United States in November for the Asia-Pacific Economic Cooperation summit – may be enough to ease tensions in the short-term in the coming months.
But how far this will advance to stabilize the ties over time remains to be seen.
“Talking is the first step and key to avoid ugly mishaps flaring into outright conflict,” Dexter Tiff Roberts, a nonresident senior fellow with the Washington-based think tank Atlantic Council.
“Senior discussions between the two sides, of course, doesn’t equal resolving the many deep disagreements … nor does it erase the deep suspicion each country’s leadership feels towards the other,” he said.
