China is not weakening us – “we are weakening ourselves.” This is the ruthless assessment of the overall situation by geopolitical strategist Grégoire Roos in an interview with Michael Radunski. Roos says that China is merely exploiting the huge gaps left by Europe and the USA by not standing up for what they believe in.
After all, China is a superpower that is defending its interests. Fully recognizing this would certainly benefit our relations with the country.
The United States is about to take the US version of TikTok away from the Chinese company ByteDance. This would probably mean the end of the popular app in its current form for young American users, as the new owner will probably not obtain all the data and algorithms.
Marcel Grzanna has analyzed the implications of this for TikTok in Europe. After all, the EU has followed the US on other issues, such as products from forced labor. However, whether the forced sale will pass US courts remains to be seen.
How dangerous is China for Western democracies?
I think one should not frame the question in that way. If you look at what has shaken liberal democracies over the past decade, I see three main problems: First, the polarization of the political discussions. Second, the widespread rise of disinformation through social media. Third, we have a credibility problem. We are weakened because Western societies do not stand up for what they believe in. This does not come from China. We are weakening ourselves.
So it is all our fault – and has nothing to do with China?
No, not all. China is a big power that defends its interests. The problem is that Western democracies cannot accept that a power like China defends its interests. The moment you understand that it is within the nature of a great power to uphold and defend its interests, then you understand that it might be worth defending your own.
Nonetheless, China openly challenges Western democracies.
Yes. And China is a challenge that can become a threat – as any challenge. But threats are also coming from the US. The American law is that if you use the US dollar, you can fall under US sanctions even if you do business in a third country. This is far more threatening to our economy than what the Chinese are trying to do along the same lines or with the Belt and Road Initiative.
In what way?
Just one example: The EU parliament banned the combustion engine, a technology in which we are world-class. With this, we are pushing and, in a way, subsidizing the Chinese car manufacturing industry. A decade ago, I remember people laughing, saying: Sorry, Chinese making cars, forget about it. Now, the Chinese are laughing because not only do they sell their cars in China, but we buy their cars here in Europe. So, we really should be self-critical because I think we are creating our own weaknesses, and in that way, we turn normal challenges into fundamental threats.
But isn’t it fundamental when Xi Jinping openly claims that the Chinese model is superior to democracy?
For years, we thought that our model was the best. That’s why some countries invaded Iraq. I’m from France. The French, along with the British, went to Libya. I’m not China’s advocate, but I try to take a step back and look at our own contradictions.
And China?
I don’t see them interfering so openly and radically as our liberal democracies have done in the past decades, more recently in Russia. They let us enjoy our democratic institutions, but they expect us to respect the fact that their institutions are different from this. We should focus on our own weaknesses rather than trying to lecture people in China or in other countries.
You are saying that China respects our system, and we should respect their system – and then all is fine. But I think that does not work in an interconnected world. We are not separated but deeply intertwined.
That is why it is absolutely vital to keep the door open for dialogue. Over the past few months, I have met many members of Congress, including Republicans. They are worried about this emotional anti-China rhetoric, which they think will lead nowhere.
Let us discuss concrete cases. When it comes to what is going on in Xinjiang or Tibet, should we defend our values or respect that China has a different system and approach?
No, I think we should fight for it. But what does that mean?
You tell me…
We must start at home and make everyone understand that as citizens, we are also consumers. We should ban anything manufactured in those regions. So you don’t support that economy. But…
But why? The situation is clear.
Yes. Because that is true for China – as for many other countries. People praise values. That is easily said and very theoretical. Do they know how their phone was made and what the consequences are when they change phones every year or two? The president of Ghana told me that their country has become one of the most polluted countries in the world because of fast fashion that is being bought in Europe and in the United States – not in China.
What does this say about our societies?
I think responsible citizenry is fundamental. The West is characterized by the individual coming first – whether it’s good or bad, I’m not judging. But if it’s the individual first, then you should make everyone in society responsible for their actions.
That’s one side. The other is the systemic rivalry.
Correct. But here we have a credibility problem. In the past, countries had to choose between Washington and Moscow. Today, we would say Beijing or Washington. But today some countries say: Are we allowed not to choose? And are we allowed just to fight for our own national interests? In this situation you need to be credible to convince people to be appealing. Change must start here.
What can we learn from China?
We can learn – and they do very well – the ability to think in the long run. Democracies nowadays seem unable to do that. Western politics fell into a kind of decadence because only re-election matters. The moment responsible leadership left the political scene, democracy started to crumble. It is as simple as that.
Why are we so short-sighted?
It’s the decay of the political system. It’s the total absence of interest in what you will hand over to the next generation. You know what makes a responsible leader, especially in politics, is someone who says: Even if my political competitor is my successor, my pride will be that I will hand over a country that is much more resilient.
What are the global consequences of China’s success?
I don’t know. But I know what it’s not: I’ve had lots of discussions with members of government from Asia and Africa. They don’t want to turn into a Chinese system. That shows: We are not witnessing the end of democracy, it’s just being tested. And if you survive when you’re being tested, then you increase your resilience. I’m very optimistic. But there’s a lot to be done.
Grégoire Roos is in charge of coordinating Political Dialogue & Policy Innovation at the BMW Foundation Herbert Quandt.
The video platform TikTok is an example of how multilateral tech companies can become victims of the conflict between power blocs. Wedged between a possible ban in the US on the one side and threats from the Chinese government on the other, the company is faced with a choice between two bad business decisions.
By passing a bill last week, the US parliament made it clear that it no longer tolerates the ties between the popular smartphone app and its Chinese parent company ByteDance.
If the Senate also approves the bill, the US version of TikTok would have to be sold. A predicament: This is precisely what the Chinese government effectively banned a few years ago when it imposed an export ban on the algorithms of Chinese tech companies.
This leaves the company’s executives with two options should the law come into force: Either they accept a ban and lose their largest single market to avoid damaging the parent company in the People’s Republic, or they accept regulatory sanctions against ByteDance back home to at least pocket the billions and billions of US dollars that the sale could bring.
A few days ago, it became clear that TikTok will not give up without a fight. The company used its greatest asset in the United States – its 170 million users. TikTok had called for a protest on its app by motivating users to contact their representatives in the House of Representatives and veto the bill. “Tell your senator how important TikTok is to you. Ask them to vote no on the TikTok ban,” the notice said. “Speak up now – before your government strips 170 million Americans of their Constitutional right to free expression,” it continued.
TikTok painted a scenario in which millions of businesses would suffer damages, the livelihoods of countless creators across the country would be destroyed, and artists would be deprived of an audience. All users had to do was enter their zip code to receive their local representative’s contact details on the display so they could voice their protest against a potential ban.
However, the plan only partially paid off. Although the offices of lawmakers were bombarded with phone calls, the vote in favor of a forced sale still received a majority of 35:1. The protest with the help of the company’s own app and the dissemination of contact details perhaps reinforced the skepticism of the representatives instead of persuading them to reconsider. The company tapped into precisely those fears that – justified or not – are circulating among the US political elite: Influence on public opinion, access to personal data of US citizens and their overly lax handling.
Furthermore, tech companies bring expertise that means more in the 21st century than mere economic power. Instead, their know-how, technological developments, and employees’ skills are assets in global cyberspace if you have them on your side. Their profound knowledge of customers and control over algorithms make them relevant players in the digital theater of war. Chinese tech companies are obliged to cooperate with the Chinese authorities.
Therefore, TikTok’s communication strategy is to stress its independence from ByteDance and, by extension, from the Chinese authorities. If this rhetorical distance actually exists, the Chinese government wouldn’t care about a TikTok ban outside the People’s Republic. Instead, the Foreign Ministry speaks of oppression and bullying and sees fair competition violated. Chinese state media echo this sentiment.
Social media has immense power. Users regularly take up political issues on social media – and not just in the US. The potential misuse of platforms as a tool to gain control over the interpretation of events or to interfere in local debates and elections in other countries further fuels concerns. It is not without reason that China blocks access to platforms that the regime cannot control. In turn, the Chinese government is accused of using TikTok as a propaganda tool in the rest of the world.
India banned the app years ago due to concerns about Chinese influence. The authorities in Iran, Nepal and Kyrgyzstan criticize violations of religious or social norms. Many other countries have lifted temporary bans on TikTok after the platform fulfilled the demands of the respective authorities.
The debate about a TikTok ban in democratic countries always provokes concerns about the curtailment of freedom of expression. That is why TikTok very deliberately played this card in its protest appeal to US customers. Freedom of expression is highly valued in democracies and is protected by the courts. This was one of the reasons why a court in the US state of Montana overturned a law passed there last year that would have banned TikTok downloads within Montana.
In Europe, the debate mainly revolves around TikTok’s handling of user data. In Germany, France and the Netherlands, the provider’s handling of customer data has come under scrutiny from the authorities. The Irish Data Protection Commission has even launched a formal investigation into TikTok’s data protection practices. TikTok has its European headquarters in Ireland.
Many EU member states and the Brussels administration itself have banned the use of TikTok on employees’ mobile phones. However, the dilemma that European politics faces is revealed by the EU Parliament’s plans to launch a TikTok campaign for the upcoming European elections in June.
“The Directorate General for Communication plans to set up an institutional presence on the platform without initially using European Parliament devices and networks,” the press service told Euractiv. This would allow Parliament to “fight disinformation and get the message across while keeping Parliament systems secure.”
According to a media report, China’s EU ambassador, Fu Cong, will be appointed to another post. Fu will leave Brussels for New York to become the new Chinese ambassador to the United Nations, Bloomberg reported, citing people familiar with the matter. 58-year-old Fu has served in Brussels since December 2022.
The post had previously stood vacant for almost a year. During Fu’s time in office, EU-China relations had tended to deteriorate. The fact that Fu is leaving the Belgian capital after only a short time in office does not necessarily indicate that Beijing is pleased with his work. ari
Almost five years after the climax of the pro-democracy protests in Hong Kong, a court sentenced twelve activists to prison terms of between four and a half and six years and ten months on Saturday. Among those convicted by District Judge Li Chi-ho are the well-known Hong Kong political activists Ventus Lau, Owen Chow, Althea Suen and actor Gregory Wong.
The convictions relate to the storming of the city parliament on July 1, 2019, when hundreds of protesters broke into the Hong Kong parliament building, smashed windows and rushed inside. The protesters left the building after police deployed tear gas in the surrounding streets and retook control of the building.
Judge Li justified the unusually harsh ruling by pointing to the Legislative Council’s “unique constitutional status.” The protesters’ actions were “aimed at the city government.” After the verdicts were read, some of the defendants’ supporters burst into tears in the courtroom. Some shouted, “Hang in there!”
At the “Snow Lion” human rights award ceremony organized by the International Campaign for Tibet (ICT), award winner Ray Wong commemorated those convicted. “I thank all Hongkongers who have never stopped fighting for our freedom,” said Wong, who, like tens of thousands of Hong Kong citizens, had to leave his homeland due to the massive increase in repression and now lives in exile abroad. His fellow campaigner Amy Siu added: “Together we are stronger, and together we are fighting for a better future.”
This year’s “Snow Lion” human rights award went to the German organization “Freedom for Hong Kong.” Tibetan activist Lhadon Tethong, who works in the US, was also honored. She recently uncovered the forced boarding school system that separates more than one million Tibetan children from their families. The ICT presents the awards to individuals or organizations campaigning for human rights and democracy in Tibet, China, Xinjiang, Southern Mongolia, Hong Kong and Taiwan. flee
With increasing external conflicts and the Chinese government’s growing focus on security policy issues, the renminbi’s internationalization has taken on a new urgency for Beijing.
When China’s central bank began to take the first steps towards the renminbi’s internationalization in the wake of the global financial crisis, the main reason was financial policy. The priority was to establish the renminbi as a payment method in international trade, making China independent of the availability of US dollars and reducing exchange rate risks.
However, in the long term, Beijing hoped that the Chinese currency would develop into a global reserve currency in which international investors would invest their assets and central banks would hold their currency reserves. This would not only give the Chinese government greater macroeconomic freedom but also provide it with a versatile foreign policy instrument for securing autonomy and influence.
With the West’s reaction to the Russian war of aggression in Ukraine, the foreign policy dimension of currency internationalization has gained considerable importance. The extensive sanctions the US and its allies have imposed on Moscow have made Beijing aware of its vulnerability. The Chinese leadership intensified its efforts to establish the renminbi as an international currency to make itself less vulnerable to Western financial sanctions, for example, in the event of a military conflict over Taiwan.
It was successful in China’s cross-border financial transactions, in which the renminbi played a bigger role than the US dollar for the first time in March 2023, with a share of 48 percent. However, the renminbi continues to play only a minor role in global payment transactions. In January 2024, the renminbi accounted for a mere 4.5 percent of international payments made via Swift, putting China’s currency far behind
While the renminbi is becoming increasingly important for China’s cross-border payment transactions, there are developments in China’s political, economic and financial system pushing the renminbi’s potential status as a global reserve currency further and further away. One fundamental obstacle that has stood in the way of all internationalization efforts from the beginning is China’s capital controls, with which the government is securing its influence over the Chinese financial system – while simultaneously restricting the access of international investors and central banks to China’s capital markets.
Beijing uses its influence on the financial system to support state-owned enterprises and pursue industrial policy goals by providing low-cost financing. As these control functions have become more important in the context of a general tightening of political control over the economy under Xi Jinping, a far-reaching liberalization of capital controls has become less likely.
To make matters worse, such a liberalization would be extremely risky in light of China’s economic woes. Massive slumps in China’s stock markets, a deteriorating property crisis, falling growth rates, and dwindling confidence among Chinese consumers and investors in China’s economic future have already led to considerable capital outflows in the past year despite existing capital controls.
This trend would likely intensify if controls were to be relaxed further while economic problems persist. Such a move would be particularly problematic because of the rising debt, which already reached 288 percent of gross domestic product in 2023. A large-scale capital flight could significantly complicate the refinancing of the debt of property companies and local governments, further exacerbating China’s economic problems.
However, China’s political development is also increasingly hindering the establishment of the renminbi as a global reserve currency. After all, such a function can only grow based on the confidence of private investors and state institutions in the security of the assets invested in this currency, which, in turn, relies on trust in property rights, economic resilience, and the governmental competence of the state issuing the currency.
However, this trust is being increasingly undermined by the growing concentration of power in Xi Jinping’s hands, an often seemingly erratic and ideologically motivated economic policy, and an ever-increasing lack of transparency – not least when it comes to economic data. If Beijing stays this course, the renminbi will struggle to overcome its status as an important instrument in China’s cross-border payment transactions. This may give China geopolitical autonomy but also prevent it from developing a powerful set of financial sanctions.
This article is part of the “Global China Conversations” event series by the Kiel Institute for the World Economy (IfW). China.Table is the media partner of this series.
On Friday, the Italian cruise ship MSC Bellissima finally returned to Shanghai with passengers after a four-year absence. Due to China’s COVID-19 restrictions, the sector was forced to take a longer hiatus than in Europe or the USA.
Cruise tourism is considered a growth market in China, but one that is difficult to crack. From April to September 2024, the 5,700-passenger ship will now be based in Shanghai and Shenzhen to focus entirely on Chinese customers.
China is not weakening us – “we are weakening ourselves.” This is the ruthless assessment of the overall situation by geopolitical strategist Grégoire Roos in an interview with Michael Radunski. Roos says that China is merely exploiting the huge gaps left by Europe and the USA by not standing up for what they believe in.
After all, China is a superpower that is defending its interests. Fully recognizing this would certainly benefit our relations with the country.
The United States is about to take the US version of TikTok away from the Chinese company ByteDance. This would probably mean the end of the popular app in its current form for young American users, as the new owner will probably not obtain all the data and algorithms.
Marcel Grzanna has analyzed the implications of this for TikTok in Europe. After all, the EU has followed the US on other issues, such as products from forced labor. However, whether the forced sale will pass US courts remains to be seen.
How dangerous is China for Western democracies?
I think one should not frame the question in that way. If you look at what has shaken liberal democracies over the past decade, I see three main problems: First, the polarization of the political discussions. Second, the widespread rise of disinformation through social media. Third, we have a credibility problem. We are weakened because Western societies do not stand up for what they believe in. This does not come from China. We are weakening ourselves.
So it is all our fault – and has nothing to do with China?
No, not all. China is a big power that defends its interests. The problem is that Western democracies cannot accept that a power like China defends its interests. The moment you understand that it is within the nature of a great power to uphold and defend its interests, then you understand that it might be worth defending your own.
Nonetheless, China openly challenges Western democracies.
Yes. And China is a challenge that can become a threat – as any challenge. But threats are also coming from the US. The American law is that if you use the US dollar, you can fall under US sanctions even if you do business in a third country. This is far more threatening to our economy than what the Chinese are trying to do along the same lines or with the Belt and Road Initiative.
In what way?
Just one example: The EU parliament banned the combustion engine, a technology in which we are world-class. With this, we are pushing and, in a way, subsidizing the Chinese car manufacturing industry. A decade ago, I remember people laughing, saying: Sorry, Chinese making cars, forget about it. Now, the Chinese are laughing because not only do they sell their cars in China, but we buy their cars here in Europe. So, we really should be self-critical because I think we are creating our own weaknesses, and in that way, we turn normal challenges into fundamental threats.
But isn’t it fundamental when Xi Jinping openly claims that the Chinese model is superior to democracy?
For years, we thought that our model was the best. That’s why some countries invaded Iraq. I’m from France. The French, along with the British, went to Libya. I’m not China’s advocate, but I try to take a step back and look at our own contradictions.
And China?
I don’t see them interfering so openly and radically as our liberal democracies have done in the past decades, more recently in Russia. They let us enjoy our democratic institutions, but they expect us to respect the fact that their institutions are different from this. We should focus on our own weaknesses rather than trying to lecture people in China or in other countries.
You are saying that China respects our system, and we should respect their system – and then all is fine. But I think that does not work in an interconnected world. We are not separated but deeply intertwined.
That is why it is absolutely vital to keep the door open for dialogue. Over the past few months, I have met many members of Congress, including Republicans. They are worried about this emotional anti-China rhetoric, which they think will lead nowhere.
Let us discuss concrete cases. When it comes to what is going on in Xinjiang or Tibet, should we defend our values or respect that China has a different system and approach?
No, I think we should fight for it. But what does that mean?
You tell me…
We must start at home and make everyone understand that as citizens, we are also consumers. We should ban anything manufactured in those regions. So you don’t support that economy. But…
But why? The situation is clear.
Yes. Because that is true for China – as for many other countries. People praise values. That is easily said and very theoretical. Do they know how their phone was made and what the consequences are when they change phones every year or two? The president of Ghana told me that their country has become one of the most polluted countries in the world because of fast fashion that is being bought in Europe and in the United States – not in China.
What does this say about our societies?
I think responsible citizenry is fundamental. The West is characterized by the individual coming first – whether it’s good or bad, I’m not judging. But if it’s the individual first, then you should make everyone in society responsible for their actions.
That’s one side. The other is the systemic rivalry.
Correct. But here we have a credibility problem. In the past, countries had to choose between Washington and Moscow. Today, we would say Beijing or Washington. But today some countries say: Are we allowed not to choose? And are we allowed just to fight for our own national interests? In this situation you need to be credible to convince people to be appealing. Change must start here.
What can we learn from China?
We can learn – and they do very well – the ability to think in the long run. Democracies nowadays seem unable to do that. Western politics fell into a kind of decadence because only re-election matters. The moment responsible leadership left the political scene, democracy started to crumble. It is as simple as that.
Why are we so short-sighted?
It’s the decay of the political system. It’s the total absence of interest in what you will hand over to the next generation. You know what makes a responsible leader, especially in politics, is someone who says: Even if my political competitor is my successor, my pride will be that I will hand over a country that is much more resilient.
What are the global consequences of China’s success?
I don’t know. But I know what it’s not: I’ve had lots of discussions with members of government from Asia and Africa. They don’t want to turn into a Chinese system. That shows: We are not witnessing the end of democracy, it’s just being tested. And if you survive when you’re being tested, then you increase your resilience. I’m very optimistic. But there’s a lot to be done.
Grégoire Roos is in charge of coordinating Political Dialogue & Policy Innovation at the BMW Foundation Herbert Quandt.
The video platform TikTok is an example of how multilateral tech companies can become victims of the conflict between power blocs. Wedged between a possible ban in the US on the one side and threats from the Chinese government on the other, the company is faced with a choice between two bad business decisions.
By passing a bill last week, the US parliament made it clear that it no longer tolerates the ties between the popular smartphone app and its Chinese parent company ByteDance.
If the Senate also approves the bill, the US version of TikTok would have to be sold. A predicament: This is precisely what the Chinese government effectively banned a few years ago when it imposed an export ban on the algorithms of Chinese tech companies.
This leaves the company’s executives with two options should the law come into force: Either they accept a ban and lose their largest single market to avoid damaging the parent company in the People’s Republic, or they accept regulatory sanctions against ByteDance back home to at least pocket the billions and billions of US dollars that the sale could bring.
A few days ago, it became clear that TikTok will not give up without a fight. The company used its greatest asset in the United States – its 170 million users. TikTok had called for a protest on its app by motivating users to contact their representatives in the House of Representatives and veto the bill. “Tell your senator how important TikTok is to you. Ask them to vote no on the TikTok ban,” the notice said. “Speak up now – before your government strips 170 million Americans of their Constitutional right to free expression,” it continued.
TikTok painted a scenario in which millions of businesses would suffer damages, the livelihoods of countless creators across the country would be destroyed, and artists would be deprived of an audience. All users had to do was enter their zip code to receive their local representative’s contact details on the display so they could voice their protest against a potential ban.
However, the plan only partially paid off. Although the offices of lawmakers were bombarded with phone calls, the vote in favor of a forced sale still received a majority of 35:1. The protest with the help of the company’s own app and the dissemination of contact details perhaps reinforced the skepticism of the representatives instead of persuading them to reconsider. The company tapped into precisely those fears that – justified or not – are circulating among the US political elite: Influence on public opinion, access to personal data of US citizens and their overly lax handling.
Furthermore, tech companies bring expertise that means more in the 21st century than mere economic power. Instead, their know-how, technological developments, and employees’ skills are assets in global cyberspace if you have them on your side. Their profound knowledge of customers and control over algorithms make them relevant players in the digital theater of war. Chinese tech companies are obliged to cooperate with the Chinese authorities.
Therefore, TikTok’s communication strategy is to stress its independence from ByteDance and, by extension, from the Chinese authorities. If this rhetorical distance actually exists, the Chinese government wouldn’t care about a TikTok ban outside the People’s Republic. Instead, the Foreign Ministry speaks of oppression and bullying and sees fair competition violated. Chinese state media echo this sentiment.
Social media has immense power. Users regularly take up political issues on social media – and not just in the US. The potential misuse of platforms as a tool to gain control over the interpretation of events or to interfere in local debates and elections in other countries further fuels concerns. It is not without reason that China blocks access to platforms that the regime cannot control. In turn, the Chinese government is accused of using TikTok as a propaganda tool in the rest of the world.
India banned the app years ago due to concerns about Chinese influence. The authorities in Iran, Nepal and Kyrgyzstan criticize violations of religious or social norms. Many other countries have lifted temporary bans on TikTok after the platform fulfilled the demands of the respective authorities.
The debate about a TikTok ban in democratic countries always provokes concerns about the curtailment of freedom of expression. That is why TikTok very deliberately played this card in its protest appeal to US customers. Freedom of expression is highly valued in democracies and is protected by the courts. This was one of the reasons why a court in the US state of Montana overturned a law passed there last year that would have banned TikTok downloads within Montana.
In Europe, the debate mainly revolves around TikTok’s handling of user data. In Germany, France and the Netherlands, the provider’s handling of customer data has come under scrutiny from the authorities. The Irish Data Protection Commission has even launched a formal investigation into TikTok’s data protection practices. TikTok has its European headquarters in Ireland.
Many EU member states and the Brussels administration itself have banned the use of TikTok on employees’ mobile phones. However, the dilemma that European politics faces is revealed by the EU Parliament’s plans to launch a TikTok campaign for the upcoming European elections in June.
“The Directorate General for Communication plans to set up an institutional presence on the platform without initially using European Parliament devices and networks,” the press service told Euractiv. This would allow Parliament to “fight disinformation and get the message across while keeping Parliament systems secure.”
According to a media report, China’s EU ambassador, Fu Cong, will be appointed to another post. Fu will leave Brussels for New York to become the new Chinese ambassador to the United Nations, Bloomberg reported, citing people familiar with the matter. 58-year-old Fu has served in Brussels since December 2022.
The post had previously stood vacant for almost a year. During Fu’s time in office, EU-China relations had tended to deteriorate. The fact that Fu is leaving the Belgian capital after only a short time in office does not necessarily indicate that Beijing is pleased with his work. ari
Almost five years after the climax of the pro-democracy protests in Hong Kong, a court sentenced twelve activists to prison terms of between four and a half and six years and ten months on Saturday. Among those convicted by District Judge Li Chi-ho are the well-known Hong Kong political activists Ventus Lau, Owen Chow, Althea Suen and actor Gregory Wong.
The convictions relate to the storming of the city parliament on July 1, 2019, when hundreds of protesters broke into the Hong Kong parliament building, smashed windows and rushed inside. The protesters left the building after police deployed tear gas in the surrounding streets and retook control of the building.
Judge Li justified the unusually harsh ruling by pointing to the Legislative Council’s “unique constitutional status.” The protesters’ actions were “aimed at the city government.” After the verdicts were read, some of the defendants’ supporters burst into tears in the courtroom. Some shouted, “Hang in there!”
At the “Snow Lion” human rights award ceremony organized by the International Campaign for Tibet (ICT), award winner Ray Wong commemorated those convicted. “I thank all Hongkongers who have never stopped fighting for our freedom,” said Wong, who, like tens of thousands of Hong Kong citizens, had to leave his homeland due to the massive increase in repression and now lives in exile abroad. His fellow campaigner Amy Siu added: “Together we are stronger, and together we are fighting for a better future.”
This year’s “Snow Lion” human rights award went to the German organization “Freedom for Hong Kong.” Tibetan activist Lhadon Tethong, who works in the US, was also honored. She recently uncovered the forced boarding school system that separates more than one million Tibetan children from their families. The ICT presents the awards to individuals or organizations campaigning for human rights and democracy in Tibet, China, Xinjiang, Southern Mongolia, Hong Kong and Taiwan. flee
With increasing external conflicts and the Chinese government’s growing focus on security policy issues, the renminbi’s internationalization has taken on a new urgency for Beijing.
When China’s central bank began to take the first steps towards the renminbi’s internationalization in the wake of the global financial crisis, the main reason was financial policy. The priority was to establish the renminbi as a payment method in international trade, making China independent of the availability of US dollars and reducing exchange rate risks.
However, in the long term, Beijing hoped that the Chinese currency would develop into a global reserve currency in which international investors would invest their assets and central banks would hold their currency reserves. This would not only give the Chinese government greater macroeconomic freedom but also provide it with a versatile foreign policy instrument for securing autonomy and influence.
With the West’s reaction to the Russian war of aggression in Ukraine, the foreign policy dimension of currency internationalization has gained considerable importance. The extensive sanctions the US and its allies have imposed on Moscow have made Beijing aware of its vulnerability. The Chinese leadership intensified its efforts to establish the renminbi as an international currency to make itself less vulnerable to Western financial sanctions, for example, in the event of a military conflict over Taiwan.
It was successful in China’s cross-border financial transactions, in which the renminbi played a bigger role than the US dollar for the first time in March 2023, with a share of 48 percent. However, the renminbi continues to play only a minor role in global payment transactions. In January 2024, the renminbi accounted for a mere 4.5 percent of international payments made via Swift, putting China’s currency far behind
While the renminbi is becoming increasingly important for China’s cross-border payment transactions, there are developments in China’s political, economic and financial system pushing the renminbi’s potential status as a global reserve currency further and further away. One fundamental obstacle that has stood in the way of all internationalization efforts from the beginning is China’s capital controls, with which the government is securing its influence over the Chinese financial system – while simultaneously restricting the access of international investors and central banks to China’s capital markets.
Beijing uses its influence on the financial system to support state-owned enterprises and pursue industrial policy goals by providing low-cost financing. As these control functions have become more important in the context of a general tightening of political control over the economy under Xi Jinping, a far-reaching liberalization of capital controls has become less likely.
To make matters worse, such a liberalization would be extremely risky in light of China’s economic woes. Massive slumps in China’s stock markets, a deteriorating property crisis, falling growth rates, and dwindling confidence among Chinese consumers and investors in China’s economic future have already led to considerable capital outflows in the past year despite existing capital controls.
This trend would likely intensify if controls were to be relaxed further while economic problems persist. Such a move would be particularly problematic because of the rising debt, which already reached 288 percent of gross domestic product in 2023. A large-scale capital flight could significantly complicate the refinancing of the debt of property companies and local governments, further exacerbating China’s economic problems.
However, China’s political development is also increasingly hindering the establishment of the renminbi as a global reserve currency. After all, such a function can only grow based on the confidence of private investors and state institutions in the security of the assets invested in this currency, which, in turn, relies on trust in property rights, economic resilience, and the governmental competence of the state issuing the currency.
However, this trust is being increasingly undermined by the growing concentration of power in Xi Jinping’s hands, an often seemingly erratic and ideologically motivated economic policy, and an ever-increasing lack of transparency – not least when it comes to economic data. If Beijing stays this course, the renminbi will struggle to overcome its status as an important instrument in China’s cross-border payment transactions. This may give China geopolitical autonomy but also prevent it from developing a powerful set of financial sanctions.
This article is part of the “Global China Conversations” event series by the Kiel Institute for the World Economy (IfW). China.Table is the media partner of this series.
On Friday, the Italian cruise ship MSC Bellissima finally returned to Shanghai with passengers after a four-year absence. Due to China’s COVID-19 restrictions, the sector was forced to take a longer hiatus than in Europe or the USA.
Cruise tourism is considered a growth market in China, but one that is difficult to crack. From April to September 2024, the 5,700-passenger ship will now be based in Shanghai and Shenzhen to focus entirely on Chinese customers.
