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U.S. anxieties about China's increasingly influential presence in Latin America and the Caribbean will be a popular topic of discussion on Capitol Hill this week.

Conservative Texas Senator Ted Cruz will introduce a new bipartisan resolution that calls on the United States to develop closer ties with the four-nation group Alliance for Development in Democracy, which includes the Dominican Republic, Panama, Costa Rica and Ecuador, to confront Chinese influence in the region.

On the other side of the legislature, the House Foreign Affairs Committee Subcommittee on the Western Hemisphere will convene a hearing to discuss "the threat of China's malign influence in Latin America."

The timing of these new China-focused legislative initiatives on The Hill coincides with mounting anti-immigrant sentiment in the United States fueled by a surge of illegal border crossings and a refugee crisis in many of America's largest (Democrat-run) cities.

This means it's going to be very difficult to get the public's buy-in to fund any kind of large-scale development or trade initiatives that could potentially rival China's economic engagement in the region.

Already, the Biden administration is under pressure for the billions it has spent to support Ukraine rather than on social programs at home -- making it impossible to consider that Congress would then turn around and finance any kind of major initiative in the Americas, even if it is against China.

So, it's likely there will be a lot of "counter China" rhetoric from U.S. lawmakers this week but little else in the way of substantive foreign policy initiatives.

WHY IS THIS IMPORTANT?  China's presence in the Americas touches a raw nerve in the U.S. body politic, far more than what Beijing does in any other Global South region. Even though the Monroe Doctrine is no longer an official policy, there's still this feeling among many high-level U.S. stakeholders that other major powers like the Chinese or the Russians just shouldn't be allowed to operate freely in the Western Hemisphere.

You won't hear many express it that way, but they're thinking it. But the problem for those folks, whether they know it or not, is there really isn't anything they can do about it.

SUGGESTED READING:

• South China Morning Post: Latin America expert takes over as head of Chinese friendship association by Sylvie Zhang
• United States Institute of Peace: How Should the U.S. Respond to China’s Influence in Latin America? by Nicolás Devia-Valbuena and Alberto Mejia

The local head of Chinese construction major CCECC, Jason Zheng, pledged that it would only take eight months to build the once-abandoned light rail in the Nigerian capital Abuja.

Zheng made the promise during a meeting last week with Nigerian Vice President Kashim Shettima, where the two discussed the $824 million project that is mostly financed by the China Exim Bank. Construction stalled in 2020 due to the pandemic. (PUNCH)

For much of the past year, since the passage of the Inflation Reduction Act (IRA) in 2022, U.S. officials have spoken at length about the urgent need to remove China from the critical minerals supply chain used, among other things, to manufacture electric vehicle batteries.

In fact, there are several provisions in the IRA that penalize automakers from using EV batteries that include resources that were either mined or refined by Chinese companies.

Now, one of the U.S. State Department's top officials is acknowledging that will not be possible.

“This is not about China,” Jose Fernandez, the U.S. undersecretary for economic growth and the environment, told a briefing in New York. “We are perfectly happy to work with them on this and right now we purchase many of the minerals from Chinese companies. It’s about diversifying.”

But even diversifying supply chains won't be easy for the U.S. given that Chinese mining companies and battery manufacturers are tightly integrated with firms from so-called "friendly countries."

Take, for example, the recent multi-billion dollar announcement by South Korea's LG Chem to partner with Chinese mining major Zhejiang Huayou Cobalt to build EV battery plants in both Morocco and Indonesia.

Washington's own efforts to build a new alternate battery metal supply chain have shown little progress. A MOU signed nearly a year ago among the U.S., Zambia and the DRC that aimed to "strengthen the EV battery value chain" is stillborn.

WHY IS THIS IMPORTANT? Reality may now finally be settling in among certain senior U.S. officials that no matter how much they want to remove China from the critical minerals production ecosystem, it's just not going to happen.

China's lead in both mining and refining are insurmountable, combined with the fact that many companies from U.S.-aligned countries are deeply engaged with Chinese firms in this arena -- which means that it's not going to be possible to create some kind of alternate China-less supply chain.

SUGGESTED READING:

• Bloomberg: US Says It Can’t Cut China Out of Critical-Minerals Supply Chain by Iain Marlow
• The Washington Post: U.S. plan envisions factories in Africa for surging EV battery demand by Joe Davidson

Chinese tourists landing in Bangkok on Monday were greeted with a heroes welcome, including Prime Minister Srettha Thavisin, who went to the airport to personally welcome the first batch of visa-free visitors.

Thailand is desperate to revive its Chinese tourism business, which has taken an enormous hit due to the popularity of a blockbuster movie "No More Bets" which has seemingly scared many of the 10 million Chinese travelers who used to go to the Southeast Asian country.

"No More Bets" is wracking up huge returns at the box office, where it's already grossed more than half a billion dollars and is currently the third most popular movie of the year.

That's bad news for the Thais because the movie tells the "inspired by real events" story of a computer programmer kidnapped and trafficked to a fictitious country that looks and feels a lot like Thailand to work in an online scam operation.

The movie has sparked a lively online discussion on social media where people are discouraging others from traveling to Southeast Asia, particularly Thailand.

WHY IS THIS IMPORTANT? This is the second blockbuster this year set in a fictitious developing country where Chinese nationals are either victimized or subject to violence. "Home Alone" was the big movie during last year's national holiday that depicted a Chinese evacuation from a North African country that was presumably Libya.

These two movies together point to a growing Chinese anxiety about a much more hostile world beyond their borders that is also reflected in a lot of the commentary today on social media.

SUGGESTED READING AND VIEWING:

• Agence France Presse: Chinese tourists shun Thailand as crime film stokes kidnapping fears on social media
• TGV Cinemas: Watch the trailer for No More Bets (english subtitles)

The Association of Southeast Asian Nations (ASEAN) kicked off its first-ever joint naval drills in the South China Sea on Tuesday near Indonesia's Nantuna island. The five-day exercise comes at a sensitive time when many ASEAN members are locked in bitter maritime territorial disputes with China. (ASSOCIATED PRESS)

Taiwan's Foreign Minister Joseph Wu arrived in St. Kitts over the year to participate in the Caribbean island country's Independence Day festivities on Tuesday. St. Kitts is one of only 13 countries that still maintain diplomatic ties with Taiwan. So far, Beijing has not commented on Wu's trip as it commonly does when senior Taiwan officials travel abroad. (TAIWAN NEWS)

One of Apple's largest suppliers, Foxconn, said it plans to double its workforce and investment in India as part of the company's ongoing efforts to reduce its reliance on China. Foxconn already employs 40,000 workers at an iPhone factory in Tamil Nadu and recently announced plans to invest $600 million to build new plants in Karnataka state. (SOUTH CHINA MORNING POST)

Oil, copper and other key commodities will open higher in Monday trading, buoyed by better-than-expected Chinese economic data released at the end of last week. Improved Chinese factory output and higher retail sales in August are both welcome news for raw material exporters in Asia, Africa and elsewhere that are now heavily dependent on Chinese demand. (REUTERS)

Saudi Arabia’s Ministry of Finance appointed Industrial and Commercial Bank of China (ICBC) as the coordinator and bookmaker for a $11 billion syndicated loan, likely to be this year’s largest financing deal in the Middle East, Europe or Africa. ICBC has reportedly invited other banks to participate in the loan. The specific purpose of the loan is still unknown, but the kingdom has recently lined up several projects to diversify its economy away from oil. (SOUTH CHINA MORNING POST)

The Philippine Coast Guard accused Chinese maritime forces in the South China Sea of “indiscriminate illegal and destructive fishing activities” following a maritime survey. Chinese large-scale coral harvesting and attempts at land reclamation resulted in parts of the marine zone near the Rozul Reef and Escoda Shoal “appear[ing] lifeless, with minimal to no signs of life,” according to a PCG spokesperson.  (ARAB NEWS)

The Chinese e-commerce giant Alibaba committed to investing $2 billion in Türkiye via its Trendyol online retail platform. The pledge, made by Alibaba’s president Michael Evans to Turkish President Tayyip Erdogan, comes as Trendyol grew 47% between April 2022 and March 2023. Alibaba owns 86.5% of Trendyol, which has expanded rapidly over the last few years, including setting up offices in Germany. (SOUTH CHINA MORNING POST)

Sri Lanka's President Ranil Wickremesinghe said the U.S., UK, Australian alliance known as AUKUS was a "strategic misstep" since it focused specifically on confronting China. The president, speaking on the sidelines of the UN General Assembly, also expressed that Sri Lanka is being dragged into the U.S.-China-India rivalry. (NEWSWIRE)

Brazilian President Luiz Inácio Lula da Silva delivered a forceful denunciation of Western-led international institutions during his address to the UN General Assembly on Tuesday. The President said the failure of groups like the IMF to address economic inequality led to the rise of Chinese-initiated groups like the BRICS. (SOUTH CHINA MORNING POST)

The China-led Asian Infrastructure Investment Bank (AIIB) has set up its first overseas office in Abu Dhabi. The choice of the UAE reflects the AIIB’s interest in expanding its operations in the Middle East and North Africa. The UAE is a founding member of the bank, with a $1,185 billion stake. (THE NATIONAL NEWS)

China is reportedly installing ground stations for its BeiDou satellite navigation system in the South China Sea. The stations are being placed on the North and Bombay reefs in the disputed Paracel archipelago, claimed by China, Taiwan, and Vietnam. According to Chinese state media, the stations will monitor shipping traffic in the region and support navigation. (WION)

Neither China nor the U.S. were invited by UN Secretary General Antonio Guterres to a summit of heads of state and business leaders he identified as taking forthright action on climate change. The Climate Ambition Summit took place on the sidelines of the UN General Assembly and featured leaders from such countries as Brazil, Pakistan, and Tuvalu, as well as the European Union, the World Bank, the city of London, and the state of California. (REUTERS)

Nepal’s Prime Minister Pushpa Kamal Dahal (nicknamed “Prachanda”) arrives in China on Friday for the second overseas visit since he took office. His first, in June, was to India, and the choice of destinations shows the delicate balance Nepal has to strike between its giant neighbors.

In addition, the United States is increasingly active in Nepal, partly to counter the influence of China’s Belt and Road Initiative.

The visit will likely aim to speed up exchanges after the COVID-19 pandemic. The border only reopened five months ago. Trade is expected to speed up with the completion of a new inland port in Lizi, Tibet, which will correspond with a facility on the Nepalese side of the border, as well as road links to other areas.

China has big plans for cooperation, including a BRI-related Trans-Himalayan Multi-Dimentional Connectivity Network involving roads and data links, as well as a railway link between Kathmandu and Tibet, which will serve a cross-border economic zone that opened in 2022.

However, Nepal’s hesitance about the economic impacts of Chinese loans and the growing great power competition between India and China present hurdles.

Key Issues Facing Nepal's PM in Beijing

• LOANS: While China’s infrastructure capacity spurred enthusiasm for the BRI in Nepal, the mode of financing has been a sticking point. Kathmandu has a strong preference for grant-based financing, and China’s offer of loans at 2% interest raised concern about debt being used as leverage. While interest in shared infrastructure seems to be reviving, current economic woes in China make an increase in the grant component of the relationship unlikely.

• U.S.: The United States has established a growing presence in Nepal via its Millenium Challenge Corporation, which extended grants for the improvement of road and electricity access and to boost cross-border trade with India. This has drawn criticism in China, which see the cooperation as an attempt by the U.S. and India to destabilize Tibet.

• AMBASSADOR: These issues came to a head earlier this month when China’s ambassador Chen Song told a gathering of the the Foundation for Trans-Himalayan Research and Studies and Friends of Silk Road Club Nepal that: “Unfortunately, you have a neighbor like India, but fortunately you have a neighbor like India because India is a huge market with huge potential you can tap in to … But at the same time, India's policy towards Nepal and other neighbors is not so friendly and not so beneficial to Nepal. So we call that policy of constraints.” The comment poked at sensitivities about Nepal’s dependence on India and the asymmetry of the relationship and was framed as stirring up trouble.

WHY IS THIS IMPORTANT? Nepal’s position between India and China and its border with Tibet makes it a perpetual geopolitical hot spot.

SUGGESTED READING:

• Manohar Parrikar Institute for Defense Studies and Analyses: Prachanda’s Visit to China: Opportunities and Challenges by Saurav Raj Pant
• Asia Society: Nepal’s Geopolitical Crossroads:Balancing China, India and the U.S. by Rishi Gupta

Fossil fuel subsidies in 2022 amounted to $7 trillion globally, about 7.1% of global gross domestic product. It shot up by 18.3% year on year, partly in response to the Ukraine war, according to research by the IMF.

The subsidies worsen climate impacts, by making fossil fuels seem cheaper than they are, and obscuring the cost of carbon pollution, which is borne by populations. 

Kuwait's Crown Prince Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah left for China on Wednesday for an official visit that will likely include a meeting with Chinese President Xi Jinping (the Foreign Ministry has to confirm whether it will happen).

The focus of the Crown Prince's visit, according to Kuwaiti media reports, will be on signing a number of unspecified deals that are part of Sheikh Meshal's plan to transition the emirate's oil- dependent economy to include more diversified post-carbon industries.

Kuwait is currently China's seventh largest oil supplier. (KUWAIT TIMES)

Fu Cong, the Chinese ambassador to the European Union in Brussels, challenged the widely-held perception in Brussels and other Western capitals that the Belt and Road Initiative aims to undermine U.S. and European influence around the world.

If that was the case, he said, "I don’t think that would be welcome by the other part of the world, by the Global South.”

Fu made the remarks during an unusually candid discussion on Tuesday hosted by the European news site Euractiv where he also addressed the new initiatives from the U.S. and Europe that are ostensibly intended to challenge China's BRI:

• WELCOME THE COMPETITION: "As far as China is concerned, we are ready to cooperate. In fact, we are heartened to see that the BRI has motivated some major initiatives on the part of Western countries. The latest IMEC and the Global Gateway initiative from Europe. We see this as a good thing, even though some Western politicians say all of these are counterbalancing to the BRI, but in our view, we do not see them as a counterweight, we see them as complementary."

• CHINA CAN'T DO IT ALONE: "We know the world needs much more investment in terms of basic infrastructure in the Global South and China alone cannot afford to make all of this happen, so there is no reason we should become counterweights against each other."

• WE DON'T CARE WHAT THE WEST SAYS: "When it comes to the BRI, whether it's good or bad, we need to listen more to the receiving countries. We know there is a lot of criticism in the Western media and also from Western governments sometimes but we care more about the reactions from the receiving states, especially in the Global South."

WHY IS THIS IMPORTANT? The biggest takeaway from Tuesday's discussion with Ambassador Fu was that a Chinese representative was there at all to participate in this kind of unscripted event. Chinese diplomats, scholars and other stakeholders have become reluctant to engage in any kind of on-the-record public discussion that Fu's presence alone was notable.

SUGGESGTED READING AND VIEWING:

• Euractiv: Chinese ambassador: Belt-and-Road is not an effort to undermine the West by Georgi Gotev
• Watch the full event: The Belt and Road Initiative - Where are we 10 years on?

Three Republican legislators in the United States feel enough isn't being done to counter China's Belt and Road Initiative and want the State Department to come up with yet another plan to blunt Beijing's "debt-trap diplomacy disguised as infrastructure development" in developing countries.

The lawmakers on Tuesday introduced the BRIDGE Act (Build Responsible Infrastructure Development for the Global Economy) that calls for a new "inter-agency effort to counter the BRI."

“China poses the greatest threat not only to our own nation but to the sovereignty of countless nations across the globe. The Belt and Road Initiative is modern economic warfare; we need to use every tool at our disposal to counter it. The BRIDGE Act will ensure we can help other countries reject China’s Trojan horse aid and maintain a competitive edge on the global economy,” said Oklahoma representative Kevin Hern, one of the bill's three co-sponsors.

WHY IS THIS IMPORTANT? Both the bill and the alarmist tone of its authors are representative of the mood on Capitol Hill today when it comes to China and the BRI. The inaccurate reference to "debt-trap diplomacy" is also typical of many legislators on Capitol Hill who remain poorly informed about Chinese lending practices in the Global South.

Read the full statement on the WisPolitics website.

One of China's foremost scholars on international debt says accusations that Beijing engages in predatory lending, or "debt trap diplomacy" do not align with the facts -- and that it's actually the U.S., or more precisely the U.S. dollar, that's really to blame.

Tsinghua University Professor Tang Xiaoyang presented his findings last weekend at a forum at Shanghai's Fudan University to mark the 10th anniversary of the Belt and Road.

Tang's central argument is that bilateral loans from China typically account for a rather small share of developing countries' debt portfolio, whereas dollar-denominated loans from private creditors and multilateral lenders are far more prevalent.

And when the U.S. Federal Reserve hikes interest rates, as it's done 11 times since March 2022, the cost to service that debt surges and pushes borrowing countries into distress.

Key Highlights From Tang Xiaoyang's Presentation at Fudan University:

• IT'S NOT CHINA'S BILATERAL DEBT THAT'S THE PROBLEM: "In the 20 years from 2000 to 2020, total bilateral debt [in developing countries] did not increase... [but] international bonds alone, they account for more than half of the guaranteed foreign debt of low- and middle-income countries, and the main holders of international bonds are investment institutions in developed countries in Europe and the United States."

• DOLLAR-DENOMINATED DEBT IS THE REAL CULPRIT: "So why have developing countries experienced so many debt defaults in the past few years? This is because the interest rates of the U.S. dollar and the sharp increase in the U.S. dollar exchange rate have greatly increased the interest costs and repayment pressure of these developing countries, thus leading to a debt crisis."

WHY IS THIS IMPORTANT? Tang is one of the most important scholars on Chinese debt issues and his framing often finds its way into official thinking. He was one of the key architects of the Chinese government's evolving response over the past year to U.S./EU/Indian criticism of Chinese lending practices -- so what he says really matters a lot.

SUGGESTED READING:

• Observer: The international media is hyping up the "Belt and Road Debt Trap" for geopolitical purposes by Tang Xiaoyang (in Chinese)
• The China-Global South Project: Chinese Scholar Makes the Case That It’s Bond Debt, Not Bilateral Loans That Trap Developing Countries

Russian flags have become a regular sight among supporters of military juntas that have thrown governments across West Africa this year -- but never a Chinese flag, until now.

A bright red five-star Chinese flag mysteriously appeared at a protest in the Nigerien capital Niamey, outside of the French airbase. Curiously, someone nearby was also carrying a flag of the Russian private military contractor Wagner Group.

It's not clear what those flag holders were trying to convey or where the flags came from.

China has been one of the most important development lenders to Africa over the last quarter of a century. This has transformed the African development landscape in helpful and problematic ways. It is also changing very rapidly. 

A new report from Boston University's Global Development Policy Center uses the latest data from their Chinese Loans to Africa (CLA) database to provide a state of play of Chinese loans to Africa and identify key trends. 

Important Things to Know About China's Financing to the Continent

• Total loans: The CLA Database estimates that from 2000-2022, 39 Chinese lenders provided 1,243 loans amounting to $170.08 billion to 49 African governments and seven regional institutions.

• Comparing loan totals to the World Bank and African Development Bank: At $170.08 billion, China’s estimated total lending from 2000-2022 is 64 percent of the World Bank’s $264.15 billion and almost five times the African Development Bank’s (AfDB) $36.85 billion in sovereign loans to Africa.

• New loans: For 2021 and 2022, the CLA Database recorded 16 new loan commitments worth $2.22 billion from Chinese lenders to African government borrowers, signifying two consecutive years of lending to Africa below $2 billion.

• Lenders and Borrowers: The China Exim Bank continued to be the top lender in Africa, providing nine out of the 16 loans, amounting to $1.42 billion or 64% of all loans by amount in 2021-2022. Senegal, Benin, Cote d’Ivoire, Angola, Uganda, Ghana, Rwanda and the DR Congo were the borrowers in 2021-2022. The prominence of West African borrowers is a new trend.

WHY IS THIS IMPORTANT? This report provides definitive confirmation that China is no longer in the business of financing large-scale infrastructure projects in Africa. To be sure, China is still an important source of development finance, just nowhere near as generous as it was a few years ago.

SUGGESTED READING:

• Boston University Global Development Policy Center: A New State of Lending: Chinese Loans to Africa by Oyintarelado Moses, Jyhjong Hwang, Lucas Engel & Victoria Yvonne Bien-Aimé
• Reuters: Chinese loans to Africa plummet to near two-decade low - study by Joe Bavier and Rachel Savage

From 2000-2022, countries in Southern Africa and East Africa historically borrowed the most from China primarily due to large-scale loans in Angola, Zambia, South Africa, Ethiopia and Kenya.

In 2021 and 2022, the regional composition is distinct from previous years; lending to West Africa was prominent while financing to North, Central, Southern and East Africa was minimal. West African countries who were not major borrowers in the past 20 years received a significant portion of loans. (BOSTON UNIVERSITY GLOBAL DEVELOPMENT POLICY CENTER)

The last few weeks have been punctuated by both an alphabet soup of big summits (BRICS, ASEAN, G20) and much discussion of the optics of Chinese President Xi Jinping’s presence or absence from them.

Amid the fray, a significant shift in Africa-China relations has passed largely undiscussed: the emergence of a new set of talking points around which Africa-China cooperation on the state level seems to be organized.

These resulted from the China-Africa Leaders’ Roundtable Dialogue, which took place on the sidelines of the BRICS summit in Johannesburg in late August, and they are expected to shape negotiations going into 2024’s Forum on China-Africa Cooperation (FOCAC) gathering in Beijing.

The themes are now appearing in Chinese diplomats’ messaging and placed in media across Africa, for example, in Kenya and Nigeria. The trend was outlined in an article in The Diplomat by the Africa-China experts Hannah Ryder and Ovigwe Eguegu.

The themes provide a glimpse into the current conversations between African and Chinese policymakers that are likely to shape the agenda of next year's Forum on China-Africa Cooperation summit in Beijing.

Some of the trends in 2021 have only intensified: Africa's debt-energy-development crisis is even more central to the relationship than in 2021. However, the rise of multipolarity and new non-alignment has also added a new degree of urgency to the geopolitics that will inevitably affect the discussions. 

New Africa-China Priorities

• Initiative on Supporting Africa’s Industrialization: Aimed at channeling funds to promote industrialization and value addition to Africa via the tools of the FOCAC, the BRI and the Global Development Initiative. This is a response to high demand from African governments for increased industrialization, especially in the field of adding value to raw commodity exports. It also feeds into the emerging theme of the special benefits of ‘Chinese modernization’ for national development plans throughout the Global South.

• Plan for China Supporting Africa’s Agricultural Modernization: This is aimed at mobilizing more Chinese corporate investment in African agriculture and increasing the cultivation of grains. It both responds to African calls for greater food sovereignty and possibly feeds into China’s commitment to increase African agricultural imports under the ‘green lanes’ agreed to at FOCAC 2021 in Dakar.

• The Plan for China-Africa Cooperation on Talent Development. This initiative aims to train 500 vocational school principals and high-level teachers, as well as providing both vocational skills and Mandarin-language education to 10,000 technical personnel. Training workshops in China will also be arranged for 20,000 African government officials and technicians. This both continues China’s use of training as a form of relationship-building and expands from the current FOCAC commitment to supporting African students in China.

WHY IS THIS IMPORTANT? These initiatives go beyond aid. During the leaders’ dialogue, Xi said China “will support Africa in speaking with one voice on international affairs and continuously elevating its international standing.” In 2022, China became the first country to call at the leadership level for the African Union to join the G20.

Now that that goal has been reached, the Chinese government followed up last week with a call for an Africa-focused expansion of the UN Security Council. These data points seem to signal a new field of Africa-China cooperation aimed at targeting the Western bias in global governance institutions, which could provide China much traction in Africa and the wider Global South.

SUGGESTED READING:

• The Diplomat: The Latest China-Africa Leaders Dialogue: What Has Changed? By Hannah Ryder and Ovigwe Eguegu
• Global Times: China-Africa Ties Deepen with Blueprint for Future Cooperation by Xie Wenting and Liu Xin

China sent its most senior official in recent years to the G77 gathering in Havana on Friday. The presence of Li Xi, the CPC's seventh-ranking member and the head of the corruption watchdog, arguably signaled a continuance of China's recent focus on Global South diplomacy.

Li emphasized three issues in his speech: G77 autonomy from great powers, the inclusion of developing countries in global governance, and equal access to technology and development: all talking points aimed at positioning China with the Global South against Western alliances.

Malaysian Prime Minister Anwar Ibrahim met with his Chinese counterpart Li Qiang on Sunday on the sides of the 20th China-ASEAN Expo in the southern Chinese city of Nanning.

The two PMs addressed the politically sensitive issue of competing territorial claims in the South China Sea and agreed to maintain "continued, open communication" on the issue.

Kuala Lumpur was among the first countries to publicly reject China's newly-published map that included the ten-dash line that demarcates China's expansive claim of virtually the entire South China Sea.

The Malaysian PM also oversaw the signing of $4.3 billion in Chinese investment deals and held closed-door talks with both Huawei and the state-run construction giant China Communications Construction Company (CCCC).

WHY IS THIS IMPORTANT? Anwar's foreign policy towards China reflects the same kind of pragmatism displayed by both Vietnam and Indonesia, among others, where territorial disputes are managed separately from the broader economic relationship.

SUGGESTED READING:

• Straits Times: Malaysia, China to have open communication over South China Sea issue: Anwar
• Carnegie Endowment for International Peace: Anwar’s Visit to China: Striving for Consistency Amid Global Uncertainty by Thomas Daniel

Cambodia's new prime minister, Hun Manet, promised even closer ties with China during a meeting with President Xi Jinping in Beijing on Friday.

The newly-named Cambodian leader thanked Xi for China's economic support and said he would deepen cooperation with Beijing's Belt and Road Initiative.

China is Cambodia's largest trade partner, source of FDI and aid provider, so it's not surprising that Hun Manet would choose to go to Beijing first since he was appointed to replace his father, Hun Sen, last month.

WHY IS THIS IMPORTANT? China's ties with many other SE Asian countries are becoming increasingly fraught over territorial disputes and the escalating Great Power competition with the U.S., but that is not the case with Cambodia, which is firmly aligned with China. The fact that Xi, not Prime Minister Li Qiang, met with Hun Manet is another sign of just how important this relationship is to Beijing.

SUGGESTED READING:

• Nikkei Asia: Cambodian PM Hun Manet pledges stronger China ties in Beijing visit by Yuji Nitta and Yukio Tajima
• South China Morning Post: China, Cambodia pledge stronger ties as Xi Jinping welcomes new PM Hun Manet to Beijing by Zhao Ziwen

Zambian President Haikinde Hichilema returned home this weekend from a week-long trip to China that appeared to be as much about sightseeing as it was about conducting substantive diplomacy.

During the last stop of his tour in Beijing on Friday, Hichilema met with Chinese President Xi Jinping for what appeared to be congenial albeit generic talks where the highlight was the modest upgrade of diplomatic ties to a "comprehensive strategic cooperative partnership."

But Zambia's pressing debt issues were apparently not addressed, at least according to the joint statement released after their meeting.

Zambia is in the midst of a multi-year debt restructuring process that still requires major bilateral creditors like China to ratify a deal they signed in Paris last June.

It was widely expected that Hichilema's trip to China last week was going to put that at the top of the agenda but there's no indication, at least publicly, that he met with creditors or made any progress in finalizing the deal.

Key Highlights of Hichilema's China Tour

• SIX MOUS: The president touted that he signed six MOUs for energy, housing, telecommunications and a ZTE smartphone assembly in Zambia. He also held talks with EV battery giant CATL for possible future collaborations. (@HHICHILEMA)

• CHINA'S STORY: Hichilema seemed inspired by China's economic development trajectory, where the country went from poor to powerful within a single generation and noted We can accomplish our vision for Zambia by learning lessons from the economic success story of China." (@HHICHILEMA)

WHY IS THIS IMPORTANT? The lack of any announcement on the debt restructuring deal is likely going to frustrate Zambian investors and other creditors who are eager to see Lusaka put the debt restructuring issue behind them.

SUGGESTED READING:

• Reuters: China, Zambia upgrade ties, focus on key economic sectors
• South China Morning Post: China firms up ties with debt-laden, resource-rich Zambia by Jevans Nybiage

Debt servicing costs have been steadily rising across Africa, largely due to the falling value of local currencies that are used to repay dollar-denominated loans.

But in Angola and Uganda, interest payments to Chinese creditors have jumped considerably in recent months as some of the loans have exited the grace period:

ANGOLA: Interest payments, mostly to Chinese creditors, doubled from $775 million in the first quarter of the year to $1.57 billion once a three-year debt repayment moratorium expired. (SOUTH CHINA MORNING POST)

UGANDA: Debt servicing costs increased from $584 million last year to $816 million in the current fiscal year due in part to increased interest payments to the China Exim Bank used to build the Karuma and Nsimbe dams. (MONITOR)

Chinese creditors account for just 4.1%, or $4.7 billion, of Nigeria's $114 billion total public debt, according to the latest figures released by the Debt Management Office in Abuja.

While China's share is significantly larger than other bilateral creditors, France is a distant second with just $572 million, the amount owed to Chinese creditors is nonetheless considerably smaller than that of other major external lenders:

• $16 billion owed to Eurobond holders
• $14 billion owed to the World Bank

WHY IS THIS IMPORTANT? Nigeria is often listed among African countries as a major borrower from China. While that's true compared to most African countries, when measured against the country's entire public debt, China's share is relatively small. Furthermore, all of the Chinese loans to Nigeria were used to build specific infrastructure projects and not used for general budgetary support.

SUGGESTED READING:

• Legit.ng: Nigeria Owes China $4.7bn, World Bank $14bn, France $573m, Indebted to Others by Zainab Iwayemi
• Nigeria's Debt Management Office: Facts about Chinese loans to Nigeria

India's top diplomat, S. Jaishankar, pushed back forcefully against accusations Prime Minister Narendra Modi "fears China" saying New Delhi is the only in the world today country that stands "eye-to-eye against China" with more than 70,000 troops now deployed against the PLA along the two countries' disputed border.

Jaishankar made the rebuttal during an interview this weekend on the national network India TV, where he said the deployment of so many troops was in response to the PLA's troop mobilization along the border in the Himalayas:

Modi decided that since there was a threat from China, we must counter-deploy. We used air force, railway and road systems. Our air force alone airlifted nearly 70,000 jawans. We also airlifted tanks, heavy guns and trucks.

If there is one country which stands eye-to-eye against China, it's us.

The External Affairs Minister was also asked to comment on the publication of China's controversial map that New Delhi claims includes large swathes of Indian territory:

Forget the map, the land is ours, which they have named on their own. Let them name it, the land is ours. That's a different matter. Point is, the manner in which people are trying to mislead. The land that China occupied in 1962 and before that, they are trying to shift the blame on us today.

WHY IS THIS IMPORTANT? The audience for this interview was entirely domestic and reveals the increasingly coarse militaristic language used in New Delhi to frame the country's rapidly deteriorating relationship with China.

SUGGESTED READING AND VIEWING:

• India TV: EAM Jaishankar in Aap Ki Adalat: 'India is only country which stands eye-to-eye against China' by Nivedita Dash
• India Today: S Jaishankar Interview: S Jaishankar Exclusive Interview With Rahul Kanwal On India Today

If you look at the specific demands of many African countries, they are now more focused on production-related activities rather than fancy highways that lead to nowhere.

Chinese President Xi Jinping will not attend this week's G77 Summit in Havana, making this the third major international event in as many weeks that he's avoided. Li Xi, head of the Chinese Communist Party's powerful anti-corruption body, will go in his place as part of a three-nation tour that also includes Brazil and Egypt. (AGENCE FRANCE PRESSE)

The U.S. and Saudi Arabia are reportedly in talks to form a strategic metals mining partnership in Africa, Washington's latest effort to reduce China's dominance in the EV battery supply chain. Under the purported deal, Saudi would invest in cobalt, lithium and other strategic metals mines that U.S. firms would then purchase the output. (WALL STREET JOURNAL)

Voters in the Maldives will go back to the polls at the end of the month for a presidential run-off in a contest widely seen as a referendum on whether the Indian Ocean island state should lean more towards India or China. Pro-China opposition candidate Mohammed Muiz performed better in Saturday's first round of voting with 46%. (ASSOCIATED PRESS)

Authorities are investigating an explosion at a Chinese-owned quarry in western Ghana that killed four people on Saturday, including one Chinese national. Four others are still missing. It's not clear what caused the blast that also destroyed nearby farmland and damaged a number of buildings in the area. (REUTERS)

China’s embassy in Niger has called on its citizens to leave the country. This follows the opening of Nigerien airspace to foreign and commercial flights following the military coup that deposed its civilian president in late July. A statement from the embassy read: “At present, the domestic situation in Niger is generally stable, but there is still some uncertainty in the future development of the situation. In view of the above situation, the Chinese Embassy in Niger reminds all overseas Chinese in Niger to leave Niger as soon as possible for a third country.” (CAJ NEWS AFRICA)

China’s Red Cross has donated $200,000 to Morocco’s Red Crescent to aid its rescue efforts after a devastating earthquake that killed at least 3,000 people and wiped out whole villages. China International Development Cooperation Agency also “stands ready to provide emergency humanitarian assistance,” according to Foreign Ministry spokesperson Mao Ning. (CHINESE FOREIGN MINISTRY)

The Saudi national real estate developer ROSHN has signed a $2.1 billion deal with China Harbor Engineering Company. It will see the state-owned construction giant build 6,700 residential units, mosques, commercial, retail, and other buildings as part of two urban developments driven by the company. (ZAWYA)

Chinese Defense Minister Li Shangfu hasn't been seen in public since he gave the keynote address at the China-Africa Security Forum two-weeks ago, prompting speculation about his fate. Li is now the second Chinese minister to go missing since former foreign minister Qin Gang disappeared from public view on June 25. (NIKKEI ASIA)

The aircraft carrier Shandong along with more than 20 other warships are headed to waters between Taiwan, the Philippines and Guam for China's largest-ever maneuvers in the Western Pacific. The upcoming exercises are seen as a response to recent U.S. Navy drills near China that involved more than two dozen countries. (FINANCIAL TIMES)

The Saudi power company ACWA signed a series of deals with Chinese companies, including China Southern Power Grid International and MingYang Smart Energy Group Ltd, which focuses on integrating renewable enrgy into power grids. The deals will focus on renewable energy, smart grid integration and the production of green hydrogen and ammonia. (ZAWYA)

Singapore tops the 2023 edition of the China Going Out Investment Index as the top international destination for Chinese capital. The city state’s strong status as a business destination, cultural overlaps with China and its neutral position between the two superpowers are all important factors. Positions 2 to 5 are occupied by: Indonesia, Malaysia, Hong Kong and Thailand. (FIBRE2FASHION)

China became the first country to officially appoint an ambassador to Afghanistan since the Taliban took over in August 2021. Zhao Xing presented his credentials te the government in Kabul on Wednesday. The Taliban leadership isn’t recognized by any country and it’s unclear whether the appointment indicates a step in that direction. A Foreign Ministry statement read: "This is the normal rotation of China's ambassador to Afghanistan, and is intended to continue advancing dialogue and cooperation between China and Afghanistan … China's policy towards Afghanistan is clear and consistent." (REUTERS)

Indonesian police arrested 43 people during large-scale protests against a Chinese-led glass and solar panel factory. The factory that’s being planned for Rempang, a small island close to the border with Singapore, would displace thousands of local residents.

About 1,000 demonstrators took part in the protests, with some throwing rocks and bottles at security personnel and damaging local buildings.

The $11.6 billion factory is being planned by Batam state authorities in collaboration with PT Makmur Elok Graha from Indonesia and China’s Xinyi International Investments Ltd., a subsidiary of the world’s largest maker of glass and solar panels, Xinyi Glass Holdings.

The glass factory, the world’s second-largest, would form part of Rempang Eco City, a business park that would displace all 7,500 residents of Rempang Island. It is seen as a way for Indonesia to gain value from a large natural deposit of quartz sand, which is used to make glass. The zone is expected to become an industrial and tourist hub and to create 35,000 jobs.

This is only the latest protest against the project by residents determined not to be relocated. It was prompted by a land surveying process linked to the development. Indonesia’s President Joko Widodo chalked the protests up to bad communication.

WHY IS THIS IMPORTANT: Chinese companies hold 70% of the world’s solar panel market share, This directly involves them in local politics resulting from the massive scaling up of production any real transition to sustainable energy would entail.

SUGGESTED READING:

• Benar News: Indonesian Police Arrest Dozens Protesting China-Backed Project Near Singapore by Nazarudin Latif and Pizaro Gozali Idrus
• Time: As Indonesia Courts Chinese Infrastructure Investments, Locals are Pushing Back by Koh Ewe

The Philippine parliament is reportedly calling for funding to construct a permanent structure on the Second Thomas Shoal (known as the Ayungin Shoal in the Philippines and Ren’ai Jiao in China.) The atoll is at the heart of competing territorial claims between the two countries.

The structure would presumably bolster the BRP Sierra Madre, a WWII-era warship currently used as a makeshift base by Philippine soldiers.

The call comes as China is embarking on its largest-ever military exercise in the region. While these haven’t been officially announced, the Chinese aircraft carrier Shandong and about two dozen Chinese warships are massing in the region, with Taiwanese authorities also reporting 28 Chinese warplanes in its air defense zone.

The exercise is reportedly in response to U.S. and Canadian vessels sailing through the Taiwan Strait on Saturday.

Meanwhile, the Philippines is reportedly considering a change in strategy in the region, with a Coast Guard spokesperson saying they might use smaller vessels to avoid Chinese blockades and to deploy more patrol ships. Manila also defended the coordinated presence of a U.S. reconnaissance plane during the recent successful resupply mission to the shoal against charges that it could further worsen relations with China.

Defense Undersecretary Ignacio Madriaga told senators during a hearing about the issue: “The American presence there is just a way to boost our maritime domain awareness and to have like an ‘eye in the sky’ watching over the waters.”

WHY IS THIS IMPORTANT? The news that Manila could build on the Second Thomas Shoal will inevitably raise tensions in the region further following the Philippines’ recent upgrading of its strategic relationship with Australia.

SUGGESTED READING:

• Philippine Star: Funding Pushed for Permanent Structure in Ayungin by Michael Punongbayan
• The Wall Street Journal: Chinese Warships Gather in Sign of Major Naval Exercises by Alastair Gale

On Wednesday, the Chinese Ministry of Foreign Affairs issued an expansive statement titled “Proposal of the People's Republic of China on the Reform and Development of Global Governance.”

According to FM spokesperson Mao Ning, the timing is aimed at informing discussions at the UN General Assembly, which starts on Monday. It is arguably also aimed at the G77 Plus China summit happening in Havana later this week.

The statement reiterates China’s position on a list of key foreign policy questions, including the Ukraine war, the North Korean stalemate, the Israel/Palestine dispute, the Iran nuclear standoff, and several more. It also discusses China’s viewpoint on human rights at some length.

Most of these talking points are not new, and the statement hasn’t received much attention in the international press so far.

However, toward the end of the document, in a section on global governance reform, it includes perhaps the most explicit note of support for the expansion of the UN Security Council heard from China so far:

“The Security Council should not become a club of the big countries or rich countries. Its reform should credibly increase the representation and voice of developing countries, redress the historical injustices done to Africa, and give more developing countries with independent foreign policies and just positions the opportunity to sit on the Security Council and participate in its decision-making. China supports making special arrangements to meet Africa's aspiration as a priority.”

There still is some room for maneuver in the statement because it leaves unclear whether China supports the expansion of the permanent members who carry veto rights or possibly adding more rotating members who don’t.

However, even if it represents a call for (say) the consistent inclusion of a rotating African member, it would still be a significant shift. It seems intended to send a message to the Global South leaders at the G77 and next week’s General Assembly that China is its truest friend in the Security Council.

It also positions Beijing with the developing world, which is increasingly clamoring for more real power in these bodies, against the U.S. and its allies on the P5, who will almost certainly oppose such reforms. 

Read the full proposal here.