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The China-Africa Business Council and the Ministry of Foreign Affairs organized a seminar in Beijing this week that brought together high-level representatives from government, industry and civil society to discuss how to increase the value of African exports to China.

The conference also focused on boosting the level of industrialization within some African supply chains.

WHY IS THIS IMPORTANT? The outcomes of conferences like this are often not very substantive, but these gatherings are nonetheless important. Beyond the obvious networking benefits, the discussions that take place at these events also help to keep Africa relevant in the broader conversation in China.

They also provide a venue to showcase many of China's increasingly creative policy innovations related to African trade, such as all the different initiatives underway in Hunan province that range from new Africa currency swap centers to agricultural air bridges and coffee/cocoa trading centers.

Equatorial Guinea (EG) Foreign Minister Simeón Oyono Esono Angue began a four-day visit to Beijing on Wednesday, where he will meet with his Chinese counterpart Qin Gang.

Normally, a visit like this from such a small country doesn't generate much interest from the U.S. embassy in Beijing, but this time may be different, given longstanding U.S. concerns that EG is the desired place for a second Chinese military base in Africa.

The Pentagon is particularly concerned about a Chinese base in West Africa as it would provide the PLA Navy access to the Atlantic Ocean and put cities like New York and Washington, D.C., within reach of submarine-based Chinese nuclear missiles.

CMOC Group is forecast to overtake Swiss mining giant Glencore as the largest producer of cobalt when the Chinese company brings another massive mine online later this year.

Cobalt is a critical ingredient used to manufacture batteries for electric vehicles and the DR Congo is home to an estimated 70% of the world's known reserves.

Although Glencore has been the dominant mining company in the sector, CMOC's acquisitions of new mines, along with improvements in productivity, have led to a surge in output. Unfortunately, though, for the Chinese company, much of that cobalt is still stuck in the DR Congo due to an ongoing contractual dispute with the state-owned mining company Gécamines.

But there are new hints that a breakthrough is imminent. Finance Minister Nicolas Kazadi also said he’s hopeful a deal will be agreed “very soon.” (BLOOMBERG)

Vietnamese customs authorities in the northern port city of Hai Phong intercepted a massive seven-ton shipment of illicit ivory that originated in Angola and traveled via Singapore.

Inspectors discovered the contraband on Monday after seeing a discrepancy in shipping documents that listed the contents of the containers as "peanuts."

Monday's haul follows a similar seizure of 600 kilograms of African ivory last month also in Hai Phong.

Vietnam in recent years, has become a major transshipment country for illegal wildlife products to be smuggled across the border into China.

SUGGESTED READING:

• Hai Phong City Portal: Hai Phong Customs Department discovered and seized about 7 tons of smuggled ivory at Nam Hai Dinh Vu Port (in Vietnamese)
• Reuters: Vietnam seizes 7 tonnes ivory in largest wildlife smuggling case in years

New satellite photos show that Chinese contractors have made considerable progress in building an extension of the Ream Naval Base in Cambodia.

The images taken by the private company Blacksky reveal the submerged foundation for a long pier that will extend out from the base.

The Chinese-financed construction of the base has caused quite a bit of consternation among the U.S., Vietnam and other countries concerned about PLA expansion in Southeast Asia. China repeatedly denied that it will station troops at the new facility.

The Chinese Foreign Ministry did not formally respond to this week's Japan-India summit, but as is so often the case, Beijing leveraged the sharp-tongued CPC-run Global Times newspaper to speak on its behalf.

And if Monday's editorial is anything to go by, the Chinese government isn't very concerned about closer economic and security ties between its two rivals.

First, China feels it has real leverage over India due to New Delhi hosting two major international summits, the China-initiated Shanghai Cooperation Organization (SCO) and the G20. "Without China's support, none of them will be held successfully," warned Global Times.

Secondly, the Chinese genuinely doubt that the interests of wealthy G7 countries like Japan and the United States will converge sufficiently with those of poorer developing states like India to present a meaningful threat to China. "On major international issues, developing countries have their own thinking which clearly differs from that of the Western world," the newspaper said.

Read the full editorial on The Global Times website.

Speculating about Chinese President Xi Jinping's motives for meeting with Vladimir Putin and whether he's serious about brokering a peace settlement between Russia and Ukraine or just trolling the West has become something of a parlor game among China Watchers.

But while most commentators in the U.S. and Europe are focusing on the potential impact that Xi could have on Putin vis-à-vis the war in Ukraine, Evan Feigenbaum, vice president of the Carnegie Endowment for International Peace and one of Washington's most highly regarded Asia analysts, wrote a column on Monday that encouraged observers to take a broader view of Xi's agenda in Moscow this week:

Beijing is playing to the many countries around the world, from Southeast Asia to Latin America, that are less invested in the outcome of the war in Ukraine.

These audiences cluster in the Global South, which has proven to be fertile ground for Chinese diplomacy. Beijing may bet that these countries will openly express reassurance that China is a “productive” player in brokering an end to the war.

Indeed, many of them have welcomed the Chinese position paper and may even praise Beijing for its efforts. Just take President Lula da Silva in Brazil as an example: he has called for China to become more involved in brokering peace and has floated his own plan that includes a role for China.

Read the full column on the Carnegie Endowment for International Peace website.

Russia overtook Saudi Arabia in the first two months of the year as China's largest oil supplier, with purchases surging 24% compared to the same time last year, according to new Chinese customs data.

Chinese buyers were seemingly keen to take advantage of the heavily discounted Russian crude that's struggled to find markets amid the U.S.-European-led sanctions brought on in response to Moscow's invasion of Ukraine.

Shipments from Brazil jumped 46% in the January-February period, while deliveries by Angola, the only African supplier in the top ten, fell by almost 30%.

Meanwhile, customs officials also released coal import data for the first two months of the year that also showed strong demand for Russian coal but nowhere near the 83% surge in Indonesian coal purchases.

Indonesia is China's top coal supplier.

WHY IS THIS IMPORTANT? Chinese energy purchases from Russia provide a vital lifeline for the beleaguered Russian economy and help to offset the impact of Western sanctions. It also provides the Chinese with valuable political leverage over Russia should the need arise in the future.

SUGGESTED READING:

• Reuters: Russia is China's top crude supplier for Jan-Feb; volumes up 23.8% yoy
• Reuters: China's Jan-Feb coal imports from Russia rise, Australia supply resumes by Muyu Xu

Chinese President Xi Jinping called on the Central African Republic (CAR) to find the attackers who raided a mining company early Sunday morning and killed 9 Chinese nationals.

The President called for the perpetrators to receive "severe punishment." It's extremely rare, if not unprecedented, for Xi to publicly speak out on these kinds of security incidents.

Over the past year, for example, dozens of Chinese nationals have been injured and killed in attacks across Africa that have failed to generate any response from the President.

It's still not clear who is behind Sunday's attack and what the motive was for their assault.

WHY IS THIS IMPORTANT? Security conditions for Chinese expatriates in Africa have deteriorated considerably in recent weeks, with embassies in CAR, Nigeria and South Africa issuing travel advisories this week alone.

The President may also be under pressure to respond given heightened expectations from the public following a number of blockbuster movies that depicted a proactive Chinese government response to attacks on Chinese nationals abroad.

SUGGESTED READING:

• South China Morning Post: Xi Jinping calls for ‘severe punishment’ after Chinese killed in mine attack in Central African Republic by Jack Lau
• Reuters: China warns its nationals after killings in Central African Republic

The Chinese embassy in Zimbabwe published a blistering response to comments made by U.S. Ambassador-designate Pamela Tremont during her Senate confirmation hearings last week in Washington, D.C.

During questioning, Tremont was pressed by senators to contrast China's engagement in Zimbabwe with that of the United States:

I think the difference between Chinese investments in Zimbabwe and perhaps other places in Africa is the U.S. investments, the $4.5 billion that we have invested in Zimbabwean people have been for the people to promote their health, to defend the democratic space, to improve the electoral systems, to increase food security.

700,000 Zimbabweans benefitted from our food security and agricultural programs last year that's tremendously important in light of Russia's unprovoked war against Ukraine.

Whereas the Chinese investments are much more for the government of Zimbabwe. The parliament building doesn't necessarily benefit the Zimbabwean people the way U.S. investment does. 

Not surprisingly, the Chinese mission in Harare strongly objected to Tremont's remarks and sarcastically responded in a long Q&A posted on their Twitter page:

May I have a question? Is the U.S. Capitol not serving the interests of the U.S. people? Is it just benefitting the U.S. Congressmen and Senators? If so, the U.S. should stop its budget for maintaining and protecting the Capitol?

The embassy also questioned the ambassador-designate's investment figures:

We noticed that the new ambassador alleged the U.S. invested $4.5 billion in Zimbabwe. Is is more than one-third of the foreign currency inflows of Zimbabwe for a whole year. We are curious where the money went, what projects have been completed, what benefits have been brought to Zimbabwean people and how much has been spent on "defending democratic space to improve the election system?"

WHY IS THIS IMPORTANT? Tremont had better brace herself for this kind of public sparring with the Chinese embassy when she arrives in Harare.

This Chinese embassy, more than almost any other in Africa, is uniquely vocal and outspoken on Twitter, so it goes without saying that if she plans to speak out against Chinese engagement in the country, then she had better be ready for a strong response.

SUGGESTED READING:

• The Zimbabwe Mail: Chinese Embassy In Zimbabwe Criticises United States Over Diplomat’s Remarks
• The Chinese Embassy in Zimbabwe: Interview with the spokesperson of the Embassy of the People's Republic of China in Zimbabwe

U.S. President Joe Biden dispatched his special envoy for the Americas, former senator Chris Dodd, to Honduras this weekend to convey the White House's displeasure with the government's decision to switch diplomatic recognition from Taiwan to China.

Dodd will also visit Panama during his four-day tour.

Meantime, U.S. diplomats in Tegucigalpa are working behind the scenes to try and persuade President Xiomara Castro to reverse last week's decision to sever diplomatic ties with Taiwan.

"We truly don't know whether it will be days or weeks or months," a U.S. government official told Reuters on the background. "Is it a negotiating tactic? We don't know for sure, but we will continue to make our case."

WHY IS THIS IMPORTANT? Honduras's decision plays into an increasingly prominent narrative in Washington about the dangers of China's growing influence in the Americas. Watch for this issue to become a key topic of discussion in future hearings of the House Select Committee on China, for example.

SUGGESTED READING:

• Taiwan News: US attempting to deter Honduras from severing ties with Taiwan by Kelvin Chen
• Taipei Times: Taiwan still willing to help Honduras: foreign ministry by Liu Tzu-hsuan

A delegation of lawmakers from Paraguay arrived in Taiwan on Sunday for what will be a critical test for Taipei to hold on to one of its last remaining diplomatic allies. 

Last September, President Mario Abdo Benítez said it would cost Taipei $1 billion of investment if it wants to maintain diplomatic relations.

If the delegation leaves Taiwan this week with a batch of investment agreements, it could be an indication that President Tsai Ing-wen may be willing to fulfill Benítez's demand.

If not, then Paraguay may be the next country in the Americas to follow Honduras's lead to transfer diplomatic relations from Taiwan to China.

Three of the U.S. military's regional theater commanders for Asia, Africa and the Middle East spoke publicly last week in testimony and speeches that highlighted how the Pentagon now sees China as its top global challenge.

The top commander of U.S. forces in Africa (AFRICOM), General Michael Langley and Central Command (CENTCOM) commander General Michael Kurilla appeared together last Thursday at the Senate Armed Services Committee, where China was referenced 84 times during the hearing.

Also on Thursday, Indo-Pacific commander Admiral John Aquilino spoke of the challenges he's facing in managing military-to-military ties with the PLA during an event in Singapore organized by the International Institute for Strategic Studies.

Key Highlights From the Three U.S. Regional Commanders Comments Regarding China:

• AFRICA: "Our focus is on [China] trying to change the international order, trying to change the international system that is very compelling and how they engage with African nations on the continent, and how they vote in the UN General Assembly. That's an indication that they cannot gain a strategic advantage unless it's along their norms or what they consider their norms" -- U.S. Africa Command commander General Michael Langley (CENTCOM TRANSCRIPT)

• THE MIDDLE EAST: "China is often viewed by regional partners as more accommodating than the U.S., offering lower costs, favorable financing, faster delivery times and 12 no end-use monitoring agreements. During my trips to the region and calls with regional Chiefs of Defense, I routinely hear how much faster and easier China’s foreign military sales program is than ours" -- U.S. Central Command commander General Michael Kurilla (i24 NEWS)

• ASIA-PACIFIC: "First and foremost, the United States is not seeking conflict in the Indo-Pacific region. Second, we do not seek to contain the People’s Republic of China ... Third, the United States has not changed our policies toward Taiwan, and we do not support independence" -- U.S. Indo-Pacific commander Admiral John Aquilino (AUSTRALIAN FINANCIAL REVIEW) 

WHY IS THIS IMPORTANT? The U.S. military's regional theater commanders are among the most important stakeholders in the U.S. policymaking process. Their collective assessment that China is now the central threat facing U.S. global hegemony carries disproportionate weight among lawmakers on Capitol Hill and down the street at the White House. Basically, what they have to say matters... a lot.

SUGGESTED READING:

• i24: US CENTCOM chief rings alarm over China's growing Mideast influence by Mike Wagenheim
• Today News Africa: China is America’s greatest threat in Africa, top U.S. commander Michael Langley tells senate by Simon Ateba

United States Marine Corps General Michael Langley made his first appearance before the Senate Armed Services Committee as the top commander for U.S. forces in Africa or AFRICOM.

Langley replaced Army General Stephen J. Townsend last year, who played a critical role in elevating concern on Capitol Hill about China's growing influence on the continent, particularly related to unconfirmed reports that the PLA was seeking to build a second military base in Africa.

Based on his testimony last week, it appears that General Langley will build on the narrative set by his predecessor. The AFRICOM leader told Senators that China's aims on the continent can broadly be categorized into three distinct areas:

1. GEOPOLITICAL:  "They're trying to change the international norms and they're using some African countries within the UN construct whether it be the General Assembly or the Security Council trying to affect votes to change those international norms and international system writ large."

2. GEOSTRATEGIC: "[The Chinese have] aspirations for military bases on the continent of Africa. Just talked to my African partners, they don't want to be militarized in a strategic sense."

3. GEOECONOMIC: "[O]ur future economy is dependent upon a number of rare earth minerals, and also some are clean energy technologies depend upon the rare earth minerals. About 30 to 40% of those minerals are on the continent of Africa, that -- that's forward thinking by the PRC."

WHY IS THIS IMPORTANT? Regional U.S. military commanders like General Langley have a much more prominent role in the policymaking process than military leaders in other countries. Therefore, how these commanders perceive certain issues can have a disproportionate impact on Congressional lawmakers.

SUGGESTED READING AND VIEWING:

• U.S. Africa Command: Watch full testimony to the Senate Armed Services Committee, March 16, 2023
• Associated Press: Marine general takes over Africa Command, sees challenges by Lolita Baldor

Fresh off his success in brokering a restoration of diplomatic ties between Iran and Saudi Arabia, Chinese President Xi Jinping will next head to Russia. Xi reportedly plans to visit Moscow next week where he is widely expected to discuss Beijing's Ukraine peace proposal with his counterpart Vladimir Putin. (REUTERS)

U.S. Secretary of State Antony Blinken is headed back to Africa this week for a short three-day, two-nation trip to Ethiopia and Nigeria. While some U.S. media are framing the visit as part of a broader effort to counter China, the State Department said post-conflict stability will be the focus in both countries. (ASSOCIATED PRESS)

The China Exim Bank approved $622 million in new loans for Ethiopia to build 14 water, road and railway infrastructure projects. The new financing comes as Addis Ababa is working to restructure it's $26 billion total public debt, around half of which is owed to Chinese creditors. (REUTERS)

The Chinese embassy in Manila accused the United States of "endangering peace" by trying to expand its military presence in the Philippines.  The embassy's comments came in response to remarks by U.S. Undersecretary of State Victoria Nuland who said the opening of new bases in the Philippines would create new economic opportunities. (CNN PHILIPPINES)

The Philippines and the U.S. launched army-to-army exercises on Monday, with a focus on enhancing the Southeast Asian nation's ability to protect and defend its territory from external threats. The exercises are bound to upset China. Beijing has denounced Manila's plan to allow greater U.S. military presence in the country. (REUTERS)

The President of the South Pacific island country Micronesia accused China of engaging in “political warfare,” in a letter to other national leaders. David Panuelo said China had been using nefarious tactics, including spying and offering bribes, in an effort to ensure that if Beijing goes to war with Taiwan, Micronesia would be aligned with China rather than the U.S., or would at least abstain from taking sides. (ASSOCIATED PRESS)

Brazilian corn exports to China plummeted from almost a million tons in January and December to just 70,000 tons in last month. Analysts say Chinese buyers shifted to suppliers in the U.S. and Ukraine in February but are widely expected to return to Brazil later in the year. (REUTERS)

South African trade authorities announced they have opened an investigation into Chinese fast-fashion giant Shein in response to complaints from the local textile industry that the company is exploiting tax loopholes. Unions accuse Shein of deliberately shipping goods in small packages of lesser value to reduce import duties. (WALL STREET JOURNAL)

India's IT ministry is planning to introduce new security rules ostensibly aimed at Chinese phone makers that will allow for the removal of pre-installed apps. "Pre-installed apps can be a weak security point and we want to ensure no foreign nations, including China, are exploiting it. It's a matter of national security," said an unnamed senior government official. (REUTERS)

Chinese, Russian and Iranian naval forces began four days of exercises in the Gulf of Oman on Wednesday. These latest drills mark the second time in two months that the Russian and Chinese navies have trained together following similar exercises in South Africa. (ASSOCIATED PRESS)

Braziian beef packers are losing upwards of $25 million a day in lost sales to China due to an ongoing export ban brought on by the discovery of a case of mad cow disease. The Brazilian government hopes it will be able to persuade Beijing to lift the ban during President Luiz Inacio Lula da Silva's upcoming visit to China at end of the month. (REUTERS)

The China Exim Bank announced its first-ever yuan denominated loan in Saudi Arabia that will be used to finance Belt & Road projects. The amount of the loan to the Saudi National Bank was not disclosed but it nonetheless highlights Beijing's ambition to reduce its dependency on the dollar. (GLOBAL TIMES)

Senior diplomats from the United States and China, along with the Prime Minister of Denmark, are currently in Africa. No doubt they all have watchful eyes on each other:

• CHINA: Beijing's Special Envoy for the Horn of Africa, Xue Bing, made a surprise appearance in Addis Ababa on Tuesday where he reaffirmed China's support for the Tigray peace process and pushed back on accusations that China engages in predatory lending in Africa. (XINHUA) INSIGHT: Xue is ostensibly there to ensure China is relevant in the ongoing peace process but so far he's had little impact.

• UNITED STATES: Secretary of State Antony Blinken praised Prime Minister Abiy Ahmed on the implementation of the Tigray peace process but did not, as some expected, restore Ethiopia's free trade access to the U.S. market. (REUTERS) INSIGHT: Unlike previous Secretary of State visits where U.S. competition with China was always a prominent issue, this time China has barely come up in Blinken's rhetoric or in the press coverage.

• DENMARK: Prime Minister Mette Frederiksen is traveling to Egypt in a dual capacity, both representing her country and as an ambassador of Europe. She has framed her visit as a way to avoid Europe from becoming "isolated in a new world" amid a "battle for influence on the African continent." (AL MAYADEEN ENGLISH) INSIGHT: While Denmark is by no means a "great power," it is a prominent development funder in Africa. Frederiksen's visit follows French President Emmanuel Macron's recent tour of Africa. Together they highlight Europe's renewed enthusiasm to challenge Russia and China's influence in the region.

WHY IS THIS IMPORTANT? While high-level visits from U.S. and European leaders have increased dramatically in 2023 compared to previous years, the key question is whether this enhanced engagement will lead to tangible outcomes on the ground or if the focus is more on posturing against the Chinese and Russia. At this point, it's still too early to tell.

SUGGESTED READING:

• Xinhua: Chinese envoy refutes allegations of "debt trap" in Africa
• The Wall Street Journal: Kamala Harris, Antony Blinken Head to Africa in a Bid to Counter China by William Mauldin and Nicholas Bariyo

Canadian mining giant Ivanhoe released its 2022 full-year earnings on Monday that revealed the company made a robust profit of $434 million from the Kamoa-Kakula copper mine in the Democratic Republic of the Congo, which it jointly operates with Chinese mining major Zijin Mining Group.

The Kamoa-Kakula mine generated 215 percent more copper in 2022 than it did in 2021 and Ivanhoe expects it to produce even more in 2023. (MUGGLEHEAD MAGAZINE)

The Chinese government warned that the deployment of nuclear-powered attack submarines to Australia would provoke a dangerous new arms race and undermine the increasingly fragile stability in the Asia-Pacific region.

Chinese Foreign Ministry Spokesperson Wang Wenbin issued a blunt response when asked on Tuesday at the Foreign Ministry's regular press briefing for China's reaction to the news that the U.S. and UK will sell Australia at least half-a-dozen submarines valued at an estimated $368 billion:

We’ve repeatedly said that the establishment of the so-called AUKUS security partnership between the U.S., the UK and Australia to promote cooperation on nuclear submarines and other cutting-edge military technologies is a typical Cold War mentality. It will only exacerbate arms race, undermine the international nuclear non-proliferation regime and hurt regional peace and stability.

It's important to note that statements from Chinese officials, including Wang, that the AUKUS submarine deal would violate the nuclear non-proliferation treaty (NPT) doesn't seem accurate based on currently available information.

While the new Australian submarines would be propelled by nuclear power, nothing in Tuesday's agreement hints that these subs would actually carry nuclear weapons.

Chinese Analysts on Why They Think Australia is the Big Loser in AUKUS

• AUSTRALIA GOT PLAYED: "Although Australia appears to be a "winner" - it will be the seventh country in the world to have a nuclear submarine, the other six being the United States, the United Kingdom, France, China, India and Russia - Australia is only one of the funders and users of the three-way partnership. The core technology and manufacturing is still in the hands of the U.S. and U.K., making Australia a "big loser" in the tripartite cooperation" -- Yu Lei, Principal Researcher at the Pacific Islands Research Center at Liaocheng University (GLOBAL TIMES -- in Chinese)

• AUSTRALIA GETS STUCK WITH THE BILL: "Australia will need to spend hundreds of billions of dollars to create a nuclear submarine base that can produce both Australian submarines and U.S. and British submarines, which have limited production capacity. Not only that, but Australia needs to make the base a maintenance and security facility, with the ability to maintain and secure U.S. and British nuclear submarines in the Asia-Pacific region, spending Australian money to do the work of the U.S. and serve the U.S. Indo-Pacific strategy, which is unprecedented" -- Song Zhongping, adjunct professor and popular TV commentator (GLOBAL TIMES -- in Chinese)

• NEW U.S. "ARMS ALLIANCE": "The U.S. is currently creating "arms alliances" in its military alliance system. On the one hand, the U.S. will use its leading joint weapons and equipment research and development programs to better control its allies and use their resources and funds to make U.S. arms dealers earn a lot of money" -- Wei Dongxu, a Beijing-based military analyst (GLOBAL TIMES -- in Chinese)

WHY IS THIS IMPORTANT? The fact that Global Times appears to be focusing the bulk of its ire on Australia is notable and may indicate that they see Canberra as the most vulnerable to Chinese pressure and countermeasures.

SUGGESTED READING:

• China Daily: AUKUS nuclear submarine 'cooperation' reckless acceleration on a dangerous road: China Daily editorial 
• Global Times: Australia may 'pay expensive price' as AUKUS nuke sub deal only serves US hegemony: experts by Wang Qi

Indonesia's Foreign Ministry took to Twitter on Tuesday to restate its longstanding concern that Australia's acquisition of U.S. and UK-made nuclear-powered attack submarines could destabilize the Asia-Pacific region and violate the nuclear non-proliferation treaty (NPT) of which Australia is a signatory.

Jakarta's statement closely aligns with China's position on the issue, specifically that the submarines threaten to undermine the NPT, which is a bit odd, given that the AUKUS agreement unveiled on Tuesday in California does not make any reference to nuclear weapons, only to nuclear propulsion submarines.

But some analysts saw the Foreign Ministry's position as performative, given Indonesia's increasingly close security cooperation with Australia. "Check out how Indonesia has furthered its defense and security ties with Australia and the U.S., especially after AUKUS was first announced in September 2021," said Collin Koh, a research fellow at the S. Rajaratnam School of International Studies Policy in Singapore.

"Actions count over rhetoric," he added.

WHY IS THIS IMPORTANT? This is what diplomatic hedging looks like in Southeast Asia. Indonesia, like all of its neighboring states, is confronted with the reality that it's stuck in between China and its Asian and Western rivals. So, tweets like this send a conciliatory message to Beijing while not alienating the U.S. and its partners.

SUGGESTED READING:

• ABC Australia: Indonesia and Australia promise new defence cooperation agreement despite AUKUS tensions by Stephen Dziedzic
• The Guardian: Indonesian ambassador warns Australia Aukus pact must not fuel a hypersonic arms race by Daniel Hurst

This year-old map produced by the UK-based think tank Council on Geostrategy is circulating widely on Twitter this week following Tuesday's AUKUS summit in California and last week's comments by President Xi Jinping that the U.S. and its allies are "encircling" China.

For the second time in a week, the Chinese government has issued a warning to the Philippines not to grant the U.S. military access to more bases in the country.

An editorial in Tuesday's edition of the state-run China Daily newspaper was clear: get too close to the U.S. and suffer economic consequences:

China has for six consecutive years been the Philippines' largest trade partner. That's a good reason for the Philippines to maintain good ties with China, rather than giving in to the nefarious designs of the United States.

The China Daily editorial was published just three days after a spokesperson for the Chinese embassy in Manila warned that collaborating too closely with the U.S. will lead to "strife that will seriously harm Philippine national interests and endanger regional peace and stability."

WHY IS THIS IMPORTANT? These two warnings are the latest indications that Sino-Philippines ties have declined seriously, at least in the near term. It's likely that this kind of rhetoric will fuel anti-Chinese hostility within Manila's governing class and push President Ferdinand Marcos, Jr. even closer to the United States.

SUGGESTED READING:

• China Daily: Manila must rethink defense ties with Washington
• The Diplomat: China Warns Philippines Over US Access to Military Bases by Sebastian Strangio

The U.S. State Department dismissed suggestions that China’s brokering of a diplomatic thaw between Iran and Saudi Arabia reflects a diminishment of the United States’s influence in the Middle East. Spokesperson Ned Price told reporters that: “In any way you look at it, America is deeply engaged with the Middle East.”

Price said the U.S. is in favor of dialogue that reduces tensions in the region and that the Biden administration has supported earlier outreach by Oman and Iraq to bring the two together “every step of the way.” However, he refused to frame the deal as an example of Chinese leadership:

When it comes to our role in the region... this (the deal) was not about the PRC [People's Republic of China] this was about what Iran and the Kingdom of Saudi Arabia committed to.

When it comes to our role in the region and whether, as I've read, our role may be supplanted, some allege, I have a difficult time wrapping my head around how our role could be supplanted when no country on earth has done more to build a more stable, a more integrated region.

WHY IS THIS IMPORTANT? Even as the State Department plays down China's involvement, many in Washington see it as a major shift: “A summit would reflect not only the greater success of Gulf states’ hedging toward China, but reciprocally, Beijing’s willingness to be involved in the region in a manner beyond the economic and commercial ties many in the U.S. and Middle East insisted were the limits of China’s interests in the region,” said John Panikoff, of the Atlantic Council. 

SUGGESTED READING:

• Reuters: China role in Saudi, Iran deal a tricky test for U.S. by Phil Stewart and Michelle Nichols
• NBC News: What does the Iran-Saudi Arabia truce mean for Washington’s standing on the global stage? by Phil McCausland

India has asked banks and traders to avoid using Chinese yuan to pay for Russian imports, three government officials involved in policy making and two banking sources said, because of long-running political differences with its neighbor.

India, which has emerged as a top buyer of Russian oil as well as discounted coal, would prefer the use of United Arab Emirates dirhams to settle trade, three government officials said. (REUTERS)