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By STUART LAU
with PHELIM KINE
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WELCOME. This is Stuart Lau covering Europe-China from Brussels, with our Berlin chief’s superb input directly from Beijing, where German Chancellor Olaf Scholz is visiting. Phelim Kine will be with you from the U.S. on Thursday.
SCHOLZ IN CHINA
TALK AND WALK: After Scholz’s meeting this morning with Chinese leader Xi Jinping, Beijing was eager to portray a nice, cordial atmosphere. “After the meeting, Xi and Scholz had a walk and lunch together,” according to the official readout.
Don’t de-risk: Xi warned the EU not to de-risk China’s economic links — especially electric vehicles. “China’s complementary cooperation with Germany is not a risk,” Xi said. “Be it traditional fields such as machine manufacturing and automobiles, or new areas like green transition, digitalization or Artificial Intelligence, the two countries have huge potential for win-win cooperation yet to be explored.”
Watch out for Washington and Brussels: Xi continued: “The two sides should beware of the rise of protectionism.” That comes just days after Commerce Minister Wang Wentao accused the European Commission of protectionism over proposed curbs on the Chinese green tech industry.
Message for von der Leyen: The Chinese leader stressed that “China’s exports of electric vehicles, lithium batteries and photovoltaic products” — meaning solar panels — “are a massive contribution to the world’s effort to tackle climate change.” He added that “capacity issues” (note that he didn’t say “overcapacity,” the core EU argument) should be “viewed objectively.”
Testing charm offensive: Scholz was keen to put his diplomatic rhetoric to the test when he sat down with Xi earlier today for hours of talks, including over lunch at the Diaoyutai State Guest House. While Xi was widely expected to lobby Scholz to kill the EU’s bid to impose tariffs on Chinese electric vehicles, Scholz had something else to say.
Key mission on Scholz’s mind: He wanted to convince Xi to show up at the Ukraine peace conference that Switzerland is planning. The Swiss government is planning to host the conference near Lucerne around mid-June. About 100 countries have been invited — but not Russia. Beijing’s special envoy for Ukraine earlier warned the EU that Xi wouldn’t be present if Vladimir Putin isn’t invited.
But not at any price: Scholz also vowed to exert pressure to stop both the export of dual-use goods to Russia and the sale of war-capable drones.
Xi sounds vaguely committal: According to the Chinese readout, Xi “supports all efforts conducive to peaceful resolution of the [Ukraine] crisis, as well as the timely convening of an international peace conference recognized by both Russia and Ukraine, with the equal participation of all sides, and where all peace plans could be discussed.” He again asked the West not to “pour fuel in the fire,” a Chinese euphemism for sending weapons to Ukraine.
And on Mideast … There’s no word on Iran, but Xi again is playing the role of the top justice guarantor for Palestine, calling for unhindered access of humanitarian aid and negotiations based on a two-state solution with Israel.
SCHOLZ’S TRADE DELEGATION KNOWS NOTHING ABOUT DE-RISKING: For CEOs from the likes of Mercedes and BMW, China remains a land of opportunity. But they’re keen to tell Beijing not to punish them, whatever the European Commission plans to do after an ongoing anti-subsidy probe against Chinese electric vehicles.
Don’t be thieves, students told: On Monday, Scholz visited Tongji University in Shanghai and spoke (in German) with students. He warned that one should “not copy” and in general he thinks “that one should not infringe on copyrights.”
Trade’s fine if you’re fair: “Of course we want our companies to have no restrictions. But vice versa, we behave exactly as we intend to do here,” he said. Just as it was “nonsense” to warn against Japanese or Korean cars in the 1990s, there is no need to fear Chinese e-cars now, said the German leader, who on Wednesday will head to Brussels for an EU summit, and meet European Commission President Ursula von der Leyen, who’s in charge of the EV probe.
Difficult balance: The question of whether the EU should take action against subsidized cars from China splits European industry. The Germans don’t want it, the French do. Writing in from Beijing, Berlin Playbook’s Gordon Repinski heard from the German trade delegation traveling with Scholz that Europe should “act confidently” instead of calling for regulation.
MORE CHINA DIPLOMACY
BIDEN'S CHINA DIPLOMACY SPREE CONTINUES: The Biden administration's spring diplomatic outreach to Beijing continues. Assistant Secretary of State for East Asian and Pacific Affairs Daniel Kritenbrink will wrap up a three-day trip to China today with National Security Council senior director for China and Taiwan Affairs Sarah Beran.
The duo's mission: continue the administration's efforts to "responsibly manage competition" with Beijing, said an otherwise detail-free State Department statement.
Their trip overlapped with that of Under Secretary of Commerce for Intellectual Property Kathi Vidal, who is in Beijing and Shanghai until Thursday to "engage substantively on intellectual property and related pressing issues facing the U.S. business community," the U.S. Patent and Trademark Office said in a statement.
EU TOP ASIA DIPLOMAT IN HONG KONG: Meanwhile, the EU diplomatic arm’s Asia chief, Niclas Kvarnström, was visiting Hong Kong over the weekend. “Great to be back in Hong Kong for discussions with both officials and broad civil society,” he wrote on X, adding that the city “matters to the EU, and we work with determination for its openness and respect for fundamental freedoms.” Kvarnström is the most senior EU official to visit Hong Kong since Beijing invoked the national security law in 2020.
EXCLUSIVE: UN FORCED LABOR REWRITE
UN FORCED LABOR HANDBOOK REWRITE SHEDS LIGHT ON EU INADEQUACY: The EU's bid to take a weak approach to imports originating from forced labor compared to the U.S. could meet a new hurdle, this time coming from the U.N. body regulating labor rights, according to leading scholar Adrian Zenz's new research.
The crux: The International Labour Organization's forced labor handbook, newly (and quietly) updated about a month ago, effectively means that the burden of proof of forced labor rests on those who participate in the affected economic system, or are connected to it through their supply chains, argues Zenz, director in China Studies at the Washington-based Victims of Communism Memorial Foundation.
U.N. for EU: The new text, he adds, could have "interesting implications for the European Union's forced labor regulation."
Remind me: The final version of the EU's ban on products made with forced labor — which is meant to receive its final sign-off from European lawmakers next week — does not shift the burden to prove the existence of forced labor from authorities to importing entities, as initially pushed for by the European Parliament. The proposition, which would have aligned Brussels more closely with Washington, mostly received pushback from member countries in the Council of the EU.
Tips for EU authorities: Even though the ILO guideline would not reverse the burden of proof in the EU's law, the investigating authority could determine the presence of forced labor simply based on the prevalence of forced labor in Xinjiang, as well as a demonstrable connection of an imported good with the supply chains linked to Xinjiang, says Zenz.
Berlin’s problem: Zenz, who's sanctioned by China for his extensive research on Xinjiang forced labor against the Muslim-majority population, criticized Scholz for his visit to China.
"The message to Olaf Scholz is … that this kind of compromise doesn’t work," Zenz says. "Now he’s doing this economic diplomacy, going to Beijing with a group of businesses, making himself dependent on an authoritarian country that’s operating the largest system of state-imposed forced labor in the world today."
You can read the new research here, on the Jamestown Foundation website.
TRANSLATING WASHINGTON
BEIJING GLARES AT TRILATERAL 'JOINT VISION': The Chinese government isn't happy with the "Joint Vision" cooperation statement produced by the trilateral meeting in Washington on Thursday between President Joe Biden, Japanese Prime Minister Fumio Kishida and Philippine President Ferdinand Marcos Jr.
Tokyo and Manila "should not introduce bloc confrontation into this region, still less engage in trilateral cooperation at the expense of other countries' interests … what else could it be if it's not a smear and attack against China?" Chinese Foreign Ministry spokesperson Mao Ning said of the statement on Friday.
Beijing took issue with the three leaders' call for "peace and security" across the Taiwan Strait as well as their warning about China's "dangerous and aggressive behavior in the South China Sea." The Chinese embassy also took Biden and Kishida to task for their similar messaging about China during their summit on Wednesday. The two leaders "smeared China on the Taiwan question, maritime issues and policy on nuclear weapons," embassy spokesperson Liu Pengyu said in a statement Friday.
AMBASSADOR MOUNTS SOUTH CHINA SEA DEFENSE: China's ambassador to the U.S., Xie Feng, joined in a coordinated propaganda blitz by foreign ministry social media accounts aiming to justify China's increasingly aggressive moves against the Philippines in the South China Sea. That campaign — spurred by intense media coverage of the issue during Biden's twin summits last week — seeks to blame Manila for ongoing Chinese Coast Guard incursions into Philippine waters. Xie weighed in with a quartet of quote card X posts on Friday that included accusations of Manila's "repeated provocations" in the region and its unwillingness to remove a military outpost on the Second Thomas Shoal. A glaring omission in Xie's thread: the International Tribunal of the Law of the Sea ruled against China's claims in the region in 2016.
US DETAILS CHINA'S RUSSIAN MILITARY SUPPORT: The Biden administration spilled fresh details on China's support for Russia's war in Ukraine. The Chinese government and its state-owned industrial sector are undertaking a "systematic" effort to provide Russia with hundreds of millions of dollars of components necessary for its defense sector, said a senior administration official who was granted anonymity to discuss sensitive information on Friday.
Those supplies ensure Russian factories can continue to produce the weaponry that is pummeling Ukrainian forces trying to hold back Russian military advances. Phelim and POLITICO's Erin Banco have the full story here (for U.S. Pros!). "China is not a producer of or party involved in the #Ukraine Crisis… We urge the U.S. side to refrain from disparaging and scapegoating the normal relationship between China and Russia," Chinese embassy spokesperson Liu Pengyu said on X on Saturday in response.
BEIJING CONDEMNS US, CANADA TRAVEL ADVISORIES: Chinese authorities in Hong Kong have lashed out at U.S. State Department and Canadian government moves to add warnings about the territory's new Safeguarding National Security Ordinance to travel advisories for their citizens. Those advisories "ignore the objective facts, maliciously tarnish Hong Kong’s international reputation and attempt to obstruct normal business and people-to-people exchanges," a spokesman for the Office of China's Ministry of Foreign Affairs in Hong Kong said in a statement on Saturday.
The U.S. and Canadian advisories, updated on Friday, both reference the potential dangers of the new ordinance to their citizens who travel to the territory. The ordinance will allow Hong Kong authorities "to take additional actions to further restrict civil liberties," the State Department statement said.
BURNS, RUBIO CLASH OVER RELIGIOUS FREEDOM: China's disregard for religious freedom has sparked an online tiff between U.S. Ambassador to China Nicholas Burns and Sen. Marco Rubio (R-Fla.). Rubio and Rep. Chris Smith (R-N.J.) took issue with Burns' X post last month praising an "Uplifting Easter Morning Mass at the Catholic North Church in Beijing." The two lawmakers fired off a letter to Burns last week asserting that the post "amplified the CCP-narrative that religious freedom in China is prominent" and urged him to make amends with "a public statement condemning the CCP's persecution of individuals trying to live out their faith."
Burns won't budge. Attending government-supervised religious services in China is "the right thing to do to stand with brave people trying to worship under severe CCP restrictions and oppression," Burns said on X on Sunday.
HEADLINES
BLOOMBERG: China ramps up scrutiny of illegal bond trading on bubble risks.
GUARDIAN: China's influence in Pacific draws scrutiny amid Solomon Islands election.
REUTERS: Russia and China trade new copper disguised as scrap to skirt sanctions.
TAIWAN PLUS: Taiwan military to set up new combatant command in 2026.
WALL STREET JOURNAL: Chinese money flows to American universities.
MANY THANKS: To editor Paul Dallison, Gordon Repinski, Hans von der Burchard, Antonia Zimmerman, Erin Banco and producer Giulia Poloni.
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