Shane Leary joins Miles Yu to discuss Chinese Foreign Minister Wang Yi's statements during the 2024 Munich Security Conference, and the broader landscape of European Union–China relations. They then turn to the 2023 Democracy Index, which ranks China #148 globally and Taiwan #1 in Asia. Lastly, they discuss the thousands of German automobiles impounded by United States Customs and Border Protection under the 2021 Uyghur Forced Labor Prevention Act, after their electrical components were found to be sourced from western China.
China Insider is a weekly podcast project from Hudson Institute's China Center, hosted by Miles Yu, who provides weekly news that mainstream American outlets often miss, as well as in-depth commentary and analysis on the China challenge and the free world’s future.
Episode Transcript
This transcription is automatically generated and edited lightly for accuracy. Please excuse any errors.
Miles Yu:
Welcome to China Insider, a podcast from Hudson Institute's China Center.
It's Wednesday, February 21st, and Shane and Miles have three topics for us this week. The first is Miles's analysis of Wang Yi's statements made at the 2024 Munich Security Conference and what they tell us about the broader pattern of China's behavior in the international system. Second, they discuss the 2023 Global Democracy Index from the Economist, which ranks Taiwan #1 in Asia and China at #148 globally. Lastly, they discuss the thousands of German automobiles impounded by US customs for sourcing electronic parts from Western China under the suspicion of relying on slave labor. Here's Shane.
Shane Leary:
Miles, how are you?
Miles Yu:
Very good, Shane. Glad to be with you again.
Shane Leary:
Me as well. So, for our first topic, this past weekend, the 2024 Munich Security Conference took place, which saw world leaders presenting and debating on diplomacy and international security. European countries, including Germany, the conference's host, have made public their intentions to de-risk from China and diversify their own supply chain, something we've talked about a number of times. Chinese foreign minister Wang Yi caused a bit of a stir, taking aim at these trends and policies. In his speech, he made several statements to this effect, including “those who attempt to shut China out in the name of de-risking will make a historical mistake,” and he pushed back against accusations of forced labor in the country, calling these claims, ‘fabricated information from different parties, which seek to stop the development of China.’ Another note would be that speaking to US Secretary of State Blinken, on the sidelines of the conference, Wang Yi complained about US sanctions on Chinese corporations whose activities have been linked to the PLA. So Miles, to start off, I just want to get your thoughts on Wang's statements here and China's overall presence at the conference.
Miles Yu:
I think you can see the international reaction to China's traditional rhetoric is exactly opposite of what China tries to achieve. That in the past, people may have some kind of degree of trust in Chinese rhetoric, but right now Wang Yi presented a disgrace because everything he said is just contrary to facts and everybody knows those facts. Wang Yi, for example, he said there is no such thing called slave labor. He said Xinjiang is open, everybody can go. That is completely, completely untrue. I mean, if you want to go to Xinjiang, you probably would not be able to go because that's one of the most controlled areas in all of China. If you and I can go, of course [inaudible] definitely no. So, this is absolutely just a boldfaced lie. Wang Yi also, this something very interesting because he was warning with very strong words against cutting China out of global trade.
He also said the so-called decoupling from China will be a catastrophe. And I think both cutting China out of global trade and decoupling from China will be a catastrophe. I agree with him on that. But who is the reason behind all this, who caused all these things? Wang Yi does not say because it is not the world that wants to cut China out of global trade. It’s not the world that wants to decouple from China. It's China that creates a condition for the world impossible to continue normal trade with China, impossible to continue to be coupled with China economically and technologically. It fits into a traditional Chinese pattern of argument, which is pretty anemic right now. Wang Yi also says something else that is dominating the Munich Security Conference this year is a sudden death of the Russian dissident and very popular, supporter of democracy Alexei Navalny. Everybody's condemning that untimely death and suspicious death of this Russian champion for human rights, except China.
China doesn't want to say anything. And when pressed, Wangyi said, no, it's Russia's internal affairs, we're not going to interfere. And this caused another outrage. You heard very tough words from say, NATO secretary Stoltenberg and from virtually every other leader attending the conference. So, China does not act like a member of the responsible international community. China sides with Russia on everything––on war, even on human rights, of course that's the case. And also, I noticed that it's very interesting when pressed China to make a statement about the Russia-Ukraine peace talk, China said, Wangyi said, no, it's not the time right now. So, China supports Wang Yi’s, rather Putin's refusal to enter any kind of a peace negotiation. The reason is very interesting because you remember almost exactly a year ago, China had the opposite position. It says, hey, listen, I'm going to play in broker to put Russia and Ukraine together for a peace settlement. Why the change, because a year ago, Russia was in very bad shape with regard to this war in Ukraine? So, China want[ed] to save Russia from total defeat. This year, the battlefield situation changed quite a bit. Russia is in the upper hand, so China does not want to have peace in Ukraine because China wants Ukraine's total defeat by Russia.
Shane Leary:
And so how do you think the statements made here reflect the larger pattern of China's behavior in the international system?
Miles Yu:
I think implicit in your question is a very salient point that China has a very consistent logic of its international behavior. To understand this logic is not really difficult. All you have to do is understand three metaphors. The first metaphor is the logic of a robber. The robber robs the house. When the cops arrive to arrest the robber, the rob points the gun at the head of the wife in the house and then shouts to the cops, ‘hey, if you come to arrest and punish me, there will be severe consequences.’ China's assiduous efforts of decades in the making to create a global supply chain dependency and its entrapment of huge international investments into the PRC for decades is a perfect example. So Wang Yi said about the warning against the world of cutting China out of the global trade, decoupling from China follows the exact same logic.
So, the world is being blackmailed by the CCP, in essence. The second logic is the logic of an arsonist. China sets the house on fire, then calls the fire department. When the fire is put out by the firefighters, China wants to be thanked and rewarded for its act of calling the fire department. This is a very persistent pattern as well. The BRI project, for example, is another example. The BRI projects create enormous political instability and a corruptive impact on national sovereignty and economic independence worldwide. Yet the CCP wants to be thanked for such a terrible scheme. The third logic of the Chinese international behavior is logic of a thief. He steals from the others but calls for catching the thief. Or there's a Chinese phrase called 贼喊捉贼 (Zéihǎnzhuōzéi), the thief cries thief. China blames the US for spreading Covid virus to China. China also blames the United States of human rights violation while itself commits genocide and progressive dictatorship of the [inaudible] on its entire population, which is a fifth of humanity. So, if you wrap all the things together, you look at Wang Yi’s performance at the 2024 Munich Security Conference, and you'll see Wang Yi started out wanting to be a wolf warrior applying these three logics, or occasionally he pretends to be a sheep in wolf's clothing. However, in the end, Wang Yi looks weak and his remarks anemic with a little impact. In other words, I will call Wang Yi, in fact, he is a sheep in sheep clothing.
Shane Leary:
And I want to go a little bit deeper on something you mentioned at the start here, which is China's role in the Ukrainian conflict. How has that changed perhaps since the beginning? How does China conceive of that role? But more importantly maybe how do European leaders see China's role in the conflict?
Miles Yu:
Oh, China has its loss of credibility a long time ago, but particularly poignant is China's role in the Ukrainian war. China is now totally on the side of Russia. Three weeks ago, China's defense minister Admiral Dong Jun called Russia Defense Minister Shoigu. In that call, which is broadcast live to the entire world. China's defense minister stated, China is completely on the side of Russia with regard to the war in Ukraine. And that's pretty blatant. China does not have a credibility to be an honest broker in this whole thing. The reason why China sided with Russia is very peculiar because China is a country that has signed numerous strategic partnership agreements, even a security guarantee agreement with Ukraine in the past. Yet because Ukrainians war launched by Russia is basically an anti-west provocation, so China and Russia are united on that anti-West front. So that's why China is willing to go to the deep end with Russia on the Ukrainian war.
So, I don't think China really has any positive role to play at all in the Ukrainian war scenario because China right now of course does not supply lethal weapons to Russia. However, China does supply enormous material, particularly trucks and railway cars and low-end chips for Russia's war in Ukraine. And China basically is supporting Russia's wartime economy. Without China's persistent and increased the economic, financial, and then material support, Russia would have to have a very bad time in Ukraine. And the China Russia trade in last year has a dramatically increased to the tune of somewhere around $300 billion and even more by some other statistics. So, I don’t think that China can play a very positive role in war in Ukraine.
Shane Leary:
And I want to latch onto something you said there, which is China's anti-West posturing, which would obviously include Europe, even if it's more acutely focused on the US. Do you think the Europeans fully perceive this? I mean, we know in the past they've referred to it as a systemic rivalry. How is Europe thinking broadly about EU-China relations today?
Miles Yu:
Well, up until probably like five years ago, the EU had a pervasive illusion about how the positive relationship could go further between Europe and China, mostly based upon economic self-interest. But two things changed. European's position number one is related to Covid. The Covid pandemic shows China's strategic intent. That really educated a lot of Europeans, and they came much closer to the position of the United States on our view on China as the number one national security threat. So, Europeans were very, very close to that. A second issue really is about China's role and stance on the war in Ukraine. Nothing would concern Europeans more than the war in Ukraine launched by Russia because Russia for practical purposes is a European country. One major European country invented another European country, obviously cause Europeans a deep concern and China is on the wrong side of history, is on the wrong side of Europe. So that's why China has become a sort of pariah in the eyes of most European countries with the possible exception of Hungary, who is pretty close to Russia and [inaudible] to China.
Shane Leary:
And one last question on this topic further sort of complicating things is at least some European countries desire for strategic autonomy. So I want to ask how Europe maybe perceives itself in the midst of US-China relations, whether it's caught in the middle or just how it thinks about that.
Miles Yu:
Well, I think the strategic autonomy sounds like a pretty nice idea, but in practicality, it's not going to work because you are autonomous from the US in terms of what? Values, principles, and our shared interest in global stability? I don't see how they could possibly separate Europe from the United States in a very fundamental way. On the contrast, you can see Europe and the NATO countries in particular have reached agreement with the United States on the issue of China, and they basically have discredited the idea somehow the number one problem in the world is between China and the United States. And they began to realize the issue is not China versus the United States, it’s China versus the entire world, Europe and the United States included. So, the transatlantic relationship will be enhanced and will be expanded in the coming years, not because of growing differences between Europe and United States, but precisely the opposite because of the common ground and the shared values have become much more intertwined and interconnected, and this intertwined relationship has further distanced Europe and the United States from China and Russia.
Shane Leary:
I want to switch gears here a little bit. The Economist intelligence unit releases a Global Democracy Index each year, which ranks each country in the world on a 0 to 10 scale, with 10 being the most democratic and 0 being most authoritarian. Out of 167 countries ranked, China took the 148th spot and Taiwan took #10 globally, but number one in Asia, really showing the stark difference between the regimes of each country. Miles, we've spoken quite a bit about the robust democratic elements of Taiwan, especially in light of their latest election. Did these results surprise you at all or are they well within your expectations? I wonder if you could talk a little bit about this.
Miles Yu:
About Taiwan's ranking of number one in Asia, that did not surprise me at all. I've been watching what's going on in Taiwan, and I recently visited Taiwan, and it is totally true. Taiwan is completely transparent, completely open, completely free. People in Taiwan should be very proud of that incredible accomplishment in such a short period of time. What's surprising to me is China ranked #148. In my view, it should be much, much lower because China does not have any major element or even basic elements of a democracy. The elections, yes, there are, but they're all fake. All candidates have to be agreed, approved by the Chinese Communist Party. It’s in its essence a pure and unadulterated Marxist-Leninist communist country. So, #148 is very low, and I don't think China can take any pride in being that kind of ranking. But also, I think China not only ranked a very low in this category, China is ranking extremely low even to the bottom in some other major index of global standing.
China's press freedom is ranked near the bottom, sometimes always bottom or second from the bottom or third from the bottom. Last year, China's ranking of press freedom was 175th in the world, and that's pretty low. China has incredible economic growth in the last several decades, but China's GDP per capita is very, very low. The World Bank and other international institutions where China has a lot of inference rank China somewhere along mid to low 70s. That ranking is also not to be trusted because much of that is from China itself. The CIA ranks China's GDP per capita 100th at $17,000 a year, behind Libya, Guyana, and Mauritius, and way below even Russia. Russia is $27,500 a year, according to the CIA. Not only the GDP per capita is low, but the GINI coefficient is very also low. Also, China ranked at #72. In my opinion, should be much, much lower because the enormous wealth generated by China's non-state sector in the last several decades did not go to the Chinese people.
The Chinese government is enormously wealthy, is enormously powerful. Most of the money, the wealth, went to the Chinese government. The government right now has the world's largest foreign currency reserve of over $3 trillion, far ahead of everybody. Well, in the United States, we have $33 trillion in debt. According to China's own statistical bureau's information, the average income of 1.3 billion Chinese population is below $500 a month. That is pretty low. So, on economic ground, on democracy, ground on freedom ground, China definitely is a failed state under communist rule. There are some other good news about ranking, though. China's main soccer has become laughingstock in China and in the world, yet this year they improved a little bit. They are ranked at #88. So, this is pretty good for a lot of the Chinese soccer fans. Nevertheless, it's the better of the worst.
Shane Leary:
For our last topic, I just want to bring up thousands of German luxury vehicles, including those from Porsche, Audi, and Bentley, all of which are owned by the Volkswagen Group, are currently stuck in US ports having been impounded by US customs due to electronic components sourced from Western China. These parts are believed to have been in Xinjiang and are thus being blocked and scrutinized by the Uyghur Forced Labor Prevention Act of 2021 in the United States, which seeks to prevent the importation of products produced by forced labor in China. The CCP of course denies any human rights abuses in the region, and Volkswagen claims to have been unaware of the source of the components and is independently investigating. Miles, I just want to get your thoughts on this before we close out.
Miles Yu:
Well, basically, China is in violation of a lot of international laws. However, the United States has taken a lead in sort of sanctioning in China for its misbehavior violation of human rights. But this has not been very efficient because other countries, particularly our friends and allies in Europe, try to sort of skirt these kind of US laws and restrictions, and they always basically try to get away. They are getting away. For example, they are dumping a lot of European products, vehicles, manufactured goods, and electronics into the US market in violation of Section 307 of America's Uyghur Forced Labor Prevention Act. And there's a lot of other laws too. I mean, this is a major problem in the new global geopolitics with regard to China. In the Cold War, we had some kind of international agreement, that is, all western democracies should act together under what we call the coordinated committee in Paris, CoCOM.
That is the collective effort mechanism by Western countries to collectively exercise export control, major capital flows, and assets control to the Eastern Bloc. So, that was very efficient. We don't have that right now. So, this actually is a very encouraging development. The German automobile manufacturers had a very big market in China. They invest a lot of their products in Chinese market, and Volkswagen in particular, Europe's number one automobile manufacturer, by the way, has built a huge plant in the heart of the Uyghur region, and they use a lot of slave labors and in violation of US Uyghur Forced Labor Prevention Act. They got away for a long time. This time we finally called them. So, I think this is a very, very good development. Hopefully from this incident, our European allies should learn the lessons and basically divest from the area where there's a severe genocide and human rights violations.
Shane Leary:
Well, I think that's all the time we have for today, Miles. Thanks so much for taking the time, and I look forward to doing this again next week.
Miles Yu:
Okay, I'll see you next week.
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