Ukraine war: Russia and China before the SCO summit

Ukraine war: Russia and China before the SCO summit

After the military setbacks in Ukraine, Putin now appears to have suffered other defeats as well. After warnings of a gas winter, a two-week blackout, a „popular uprising“ (Baerbock), the collapse of German industry, the government, economic researchers and BILD are now trying to calm the waves of fear and are reporting like the Münchner Merkur:

„Putin’s gas plan is about to fail: Russia’s blackmail is unlikely to work

 (…) Putin’s gas pressure is falling: prices are falling But this plan seems to be increasingly failing. „Even if it gets really tight, we’ll probably get through the winter,“ predicted Olaf Scholz at the beginning of September, before Putin’s complete gas stop. Now Commission President Ursula von der Leyen made it clear in her State of the Union speech: „Putin will fail“. And not only in the military field. Economics professor Jan Schnellenbach from the TU Cottbus says to BILD: „Russia will lose this gas war“. Economics professor Moritz Schularick from the University of Bonn agrees and says: „Russia is also losing the economic war“. And in fact, a kind of turning point seems to have been reached – if you look at the gas prices that Putin drove up with his delivery stop. On Monday, the price of the TTF futures contract for Dutch natural gas (regarding the European price level) fell by eight percent to 189 euros per megawatt hour. Only a week earlier – after Putin announced the continued stop of deliveries via Nord Stream 1 – the price had hiked towards 300 euros. „I would be surprised if the prices rose again so much,“ predicted energy economist Andreas Loechel from the Ruhr University Bochum to ZDF. The paradox: prices are falling because it is now clear that Russia is not delivering. According to Loechel, the uncertainty on the market had previously caused prices to rise. Nevertheless, the prices are currently still far above the normal level. But that will probably change soon: According to the FAZ, the analysts at Goldman Sachs expect prices to fall below 100 euros in the first quarter of 2023.

Europe is reacting – and Putin’s blackmail will probably fail

In addition, Europe has reacted. On the one hand, new ways of getting gas and reducing dependence on Russia have been sought. For example, the EU wants to purchase significantly more gas from the South Caucasus Republic of Azerbaijan in the future. EU Commission President Ursula von der Leyen and Azerbaijan’s President Ilham Aliyev signed a declaration of intent in July, according to which twice as much gas is to be delivered annually via the southern gas corridor within five years as in the past. Just an example. Norway is also supplying around eight percent more gas to Europe than before the Ukraine war broke out In addition, Europe is already successfully saving gas. According to a survey for the Hans Böckler Foundation, the high prices are currently causing many German private households to save energy. Industry has already significantly reduced its consumption in this country. And the high memory levels in this country also give hope. The filling level for Germany on September 11 was over 88 percent. Analysts at Goldman Sachs assume that storage will still be more than 20 percent full by the end of March. All of this now enormously reduces the pressure that Putin was able to build up on Europe.

After about 2 months of systematic scaremongering, now the opposite. But the articles by BILD, Münchner Merkur and the statements by Scholz, Van der Leyen, Goldmann Sachs and the two economic researchers also have many „probably“, „maybe“, „tendencies“ and other relativating and vague terms on which they base their forecasts or maybe they are just Valium for the worried people. In addition, these are also short-term observations that are highly forecasted as long-term trends. The spectrum of meta messages ranges from „It doesn’t get any worse“, „We’ve got the worst behind us“ to „We’re winning“. It remains to be seen.

Now that the district council of St. Petersburg has initiated a hightreason charge against Putin with the Russian public prosecutor’s office, the first TV moderators seem to be leaving:

“Even on Russia’s state TV, the tone is changing: Putin’s propaganda machine is stuck

Open criticism of Vladimir Putin can suddenly be heard on Russian state television – and the moderators who are loyal to the Kremlin seem overwhelmed.

Moscow – The program of the Russian state television is usually the same as pro-Putin festivals, even in the Ukraine war, which officially cannot be called that. The successes of the Ukrainian counter-offensive are now provoking public criticism of the Kremlin chief. Former Duma member Boris Nadezhdin, for example, openly questioned the strategy of the Russian military in a political talk on NTW on Sunday – an affront. Contradiction against Vladimir Putin is so rare on TV that the US news agency AP asked Nadezhin directly. After all, the politician called for peace negotiations between Russia and Ukraine, an undertaking that is currently failing due to the reluctance of Volodymyr Zelenskyy’s government, as the Kremlin claims. However, Nadezhin told AP that negotiations are possible “anytime, anywhere”. In front of the NTW audience, he even underlined that he did not fear any penalties for „fake news“ about the „military special operation“. Putin criticism on Russia TV: „Hard questions“ about the Ukraine war The fact that propaganda TV suddenly had „tough questions“ ready for the Kremlin chief was also noticed by the US broadcaster CBS on the occasion of the NTW talk. The political expert Viktor Olevich, who also no longer wanted to believe Putin’s narrative, was also in the group with Nadezhin: „You say everything is going according to plan,“ he exclaimed incredulously, according to CBS. „Do they really want to tell us that half a year ago it was planned to fend off a counter-offensive?“

The Russian-speaking Russia expert Dr. Rahr, whom the Ukrainian propaganda organization Underdog Ukrainians called the „Voice of Putin“, also reported:

“I heard a TV discussion in Russia yesterday. There are great doubts about the special operation. The hardliners are now demanding general mobilization and war. The doves are demanding negotiations and secret diplomacy with West.”

Developments in Central Asia and around Kazakhstan in the run-up to the SCO summit are now just as significant. After border skirmishes broke out again in the South Caucasus between Azerbaijan and Armenia and Russia seemed overwhelmed as a mediator, Kazakhstan is now stepping out of line.

Former Putin and Gazprom adviser Dr. Alexander Rahr reported:

Bad news for Putin ahead of the SCO summit. Kazakhstan has moved trade with Russia under US sanctions. The agreements will not be implemented without the permission of American officials. The goal is not to resort to secondary sanctions. Kazakhstan is a member of the CSTO and the EAEU, which also includes Russia. At the same time, Kazakhstan shows that cooperation with the USA is more important than trade with Russia. But what can Russia give its eastern neighbor? They have their own oil and gas. Kazakhs buy consumer goods in China, and the latest modern technologies and production facilities are practically absent in Russia. Therefore, it turns out that contacts with the West are more important than with Russia. Everything, as we see, rests on the economy. It is possible that Samarkand will become a Stalingrad for Russia!”

 It should not be forgotten that Putin has been saying for a long time that Kazakhstan and above all the north inhabited by Kazakhs of Russian origin is the „Russian world“ and that the Kazakhs now feel threatened, even after the Ukraine war. It remains to be seen whether Kazakhstan, in spite of the SCO, CSTO and EAEU, will again try to get close to the NATO Partnership for Peace programs. Meanwhile, China is stepping into the Russian gap with Xi Jinping visiting Kazakhstan and Uzbekistan ahead of the SCO summit, announcing a „Golden Age“ via the New Silk Road, seeing the bilateral relationship as a „model“ and the Global Times emphasizing that China in the „Ukraine conflict“ would country adopt a neutral stance, although it holds NATO responsible for the war and has always supported Putin diplomatically up to now, one could at best speak of a pro-Russian neutrality. It is remarkable how long China has given the Kazakhstan article in the Global Times and Xi also finds the country so important that he visits it first. Firstly because it is the most important among the Central Asians in terms of both size and resources, but it is also important for Xi to show that China was the first country to recognize Kazakhstan’s independence from the Soviet Union and was tacitly different from Russia, which claims that Kazakhstan and Ukraine are part of a Russian world while Xi never talked about a Chinese world in the context of Central Asia or even has territorial annexation demands at the moment, even though these Central Asian countries were already considered part and core of the Silk Road. But Chinese military is currently more focused to fight the 3 evils of cross-border drug smuggling, organized crime and extremism within the SCO. So in the latter case, stabilization of the post-Soviet despot authorities against democratic color revolutions or Islamism. Of course, things can also develop from this if China becomes a stronger military power with global power projection and, like the USA or Russia in their backyards and near abroad, then intervenes in its Central Asian backyard or establishes puppet governments, should someone dare to oppose China´s interests.

“Xi kicks off 1st foreign trip since pandemic, ushers in new ‚golden‘ era of ties with Kazakhstan

By GT staff reporters Published: Sep 14, 2022 04:37 PM Updated: Sep 14, 2022 11:59 PM

Chinese President Xi Jinping pays state visit to Kazakhstan and attends a welcome ceremony held by Kazakh President Kassym-Jomart Tokayev on September 14, 2022. Photo: Xinhua

Chinese President Xi Jinping pays state visit to Kazakhstan and attends a welcome ceremony held by Kazakh President Kassym-Jomart Tokayev on September 14, 2022. Photo: Xinhua

Chinese President Xi Jinping on Wednesday kicked off his first trip abroad since the COVID-19 pandemic, during which he is scheduled to attend the 22nd meeting of the Council of Heads of State of the Shanghai Cooperation Organization (SCO) and pay state visits to Kazakhstan and Uzbekistan. The first stop took him to Kazakhstan on Wednesday, underscoring that he highly values the bilateral relations with the Central Asian country and indicating such visit will inject new growth momentum for the country, Chinese officials and experts said.

Xi first arrived at Nur-sultan on Wednesday afternoon for a state visit to Kazakhstan before landing in Samarkand in the evening to pay a state visit to Uzbekistan and attend the SCO summit.

Experts believed that as China’s permanent comprehensive strategic partner, Kazakhstan, the Chinese president’s first stop in his ongoing foreign trip, is considered as a bridge connecting China with Central Asia and Europe, as it’s also where the Chinese president first proposed the Belt and Road Initiative (BRI) and on the first stop of the BRI’s westward routes from China, bringing tremendous benefits for the region and the world.

Kazakhstan has been striking a balance between China and Russia in terms of political influence, and serving as a bridge for major powers also sets a good example for other Central Asian countries. Kazakhstan, Uzbekistan and Central Asia are in a very important position in China’s overall diplomacy, as all five Central Asian states are China’s strategic partners, and among them, China-Kazakhstan partnership has reached one of the highest levels, experts said.

When the Chinese president arrived at the Nursultan Nazarbayev International Airport on Wednesday afternoon, he was warmly welcomed by Kazakh President Kassym-Jomart Tokayev, and a group of senior officials including Kazakh Deputy Prime Minister and Minister of Foreign Affairs Mukhtar Tileuberdi and Nur-Sultan Mayor Altai Kulginov.

Xi was later awarded by Tokayev with the „Order of the Golden Eagle“ — the highest honor to recognize outstanding people who have made significant contributions to Kazakhstan including foreign heads of state promoting Kazakhstan’s friendly relations with other countries.

During a meeting between Xi and Tokayev, the Chinese top leader said this is his first foreign visit since the COVID-19 pandemic, and choosing Kazakhstan as the first stop demonstrates the high level and uniqueness of China-Kazakhstan ties.

Kazakhstan is a major country in Central Asia and Eurasian region with important influence, Xi said, reiterating that the Chinese government attaches great importance to China-Kazakhstan ties and always supports Kazakhstan in maintaining national independence, sovereignty and territorial integrity.

China firmly supports Kazakh President’s reform measures to maintain the country’s stability and development, and firmly opposes any interference into Kazakhstan’s internal affairs. China will always be Kazakhstan’s trustworthy friend and partner, Xi said.

Xi also called on the two countries to promote high-quality Belt and Road development, expand cooperation in such areas as trade, the economy and interconnectivity, and explore cooperation in new fields including big data, digital finance and green energy.

Tokayev said that Xi’s visit, the Chinese president’s first foreign trip since the outbreak of the COVID-19 pandemic, fully demonstrated the two countries‘ high-level mutual trust and will surely become a new milestone in the history of Kazakhstan-China relations.

As next year marks the 10th anniversary of Xi’s proposing the Belt and Road Initiative in Kazakhstan, Tokayev said his country will continue to support and participate in the joint building of the Belt and Road.

After their meeting, the two leaders signed a joint statement commemorating the 30th anniversary of the establishment of diplomatic relations between the two countries.

The two governments also signed a number of cooperative documents in areas such as finance and the media, and decided to set up consulates general in Xi’an and Aktobe.

Build together the next golden 30 years of China-Kazakhstan Relations. Graphic: GT

Build together the next golden 30 years of China-Kazakhstan Relations. Graphic: GT

A model

This year marks the 30th anniversary of the establishment of diplomatic relations between China and Kazakhstan. Standing at a new historical starting point of China-Kazakhstan relations, President Xi’s visit will surely draw a new blueprint, inject new momentum to the bilateral relations, opening up a new chapter and another golden thirty years of bilateral relations, Zhang Xiao, Chinese Ambassador to Kazakhstan said in a recent interview with media.

The bilateral relations have withstood a changing international situation, and the two countries firmly support each other on issues concerning their core interests, making important contribution to the regional and world peace and stability, Zhang noted. In recent years, under the strategic guidance of the two heads of state, the political mutual trust between the two countries has been continuously strengthened, and the two countries will continue to consolidate the political foundation of bilateral relations and create favorable conditions for bilateral cooperation in various fields, he said.

Almost a decade ago, Xi visited Kazakhstan, making a significant proposal that China and Central Asian countries build an „economic belt along the Silk Road“, a trans-Eurasian project spanning from the Pacific Ocean to the Baltic Sea, during a speech at Nazarbayev University in Astana, now known Nur-sultan. He also visited the Central Asian country in 2015 and in 2017 to boost the bilateral ties and regional cooperation through the Belt and Road Initiative.

„President Xi’s first visit abroad since the pandemic highlights the importance he attaches to Kazakhstan and Central Asia, which is also seen as a breakthrough in terms of China’s foreign exchanges and diplomacy,“ Zhao Huirong, a research fellow at the Chinese Academy of Social Sciences‘ Institute of Russian, Eastern European and Central Asian Studies, told the Global Times on Wednesday.

Central Asia could be seen as China’s key „strategic partner zone“ in the world, she said, as the five Central Asian countries are all China’s strategic partners. Among them, Kazakhstan was one of the first to become China’s strategic partners, which enjoyed one of the highest-levels of strategic partnership, Zhao said.

In a signed article by Xi titled „Build on the Past to Make Greater Strides in China-Kazakhstan Relations“ published Tuesday on the Kazakhstanskaya Pravda newspaper ahead of his state visit, the Chinese top leader described the two countries as being bound together by mountains and rivers and common interests, which are good neighbors, good friends and good partners.

Having stood the test of the changing circumstances and the passage of time, China-Kazakhstan relations have long become rock-solid, Xi said in the article.

Setting our sight beyond the pandemic, China would like to partner with Kazakhstan to remain pioneers in Belt and Road cooperation, Xi stressed.

China would like to deepen law enforcement, security and defense cooperation with Kazakhstan. Guided by the Global Security Initiative, the two countries should act on the concept of common, comprehensive, cooperative and sustainable security, and work together to promote the implementation of the Data Security Cooperation Initiative of China+Central Asia, the article said.

We should join hands to combat terrorism, separatism, extremism, drug trafficking and transnational organized crimes, and ensure the security of oil and gas pipelines and other large cooperation projects and their personnel. We should resolutely oppose interference by external forces and work together for lasting peace and long-term stability of our region, Xi said.

The world has been witnessing more uncertainties now including the uncertainties in supply chain and in foreign relations. China’s good neighborhood lays a foundation for the country’s prosperity, and as a corridor in Central Asia, Kazakhstan stands at a central stage of China’s interaction with the Central Asian countries, Wang Yiwei, director of the Institute of International Affairs at the Renmin University of China, told the Global Times on Wednesday.

„The Central Asian country has been always hoping to serve as a bridge between China and Russia,“ Wang said, noting that striking such balance between major powers also serves as a good example for other Central Asian countries.

Belt and Road cooperation is a major highlight in China-Kazakhstan cooperation. In 1992, the bilateral trade volume was only $368 million, but it has reached $25.25 billion in 2021, said Zhang, the Chinese envoy to Kazakhstan. From January to July 2022, China-Kazakhstan trade reached $17.67 billion, up 18.9 percent year-on-year, which is expected to hit a record high for the whole year.

The two countries have established a dialogue mechanism for production capacity and investment, and established a special fund for China-Kazakhstan production capacity cooperation, providing strong support for the development of Kazakhstan’s energy, industry, transportation and other fields, the Chinese envoy said.

Also, among the Central Asian countries, Kazakhstan plays a fundamental role in the trade between China and the Eurasian region, while serving as an important channel for China to link Eurasian countries as the northern line of the China-Europe freight train service.

„China-Europe freight trains pass through Kazakhstan to Europe, and Kazakhstan has gained a lot of benefits from Belt and Road cooperation, which also helped it achieve its long-standing will of serving as a transportation hub in Eurasia,“ Zhao said.

As more countries have been struggling in energy crisis amid Russia-Ukraine conflict and rampant inflation, trade activities between China and the Central Asian countries have been keeping their momentum. Such close partnership also triggered some speculation from the West on whether Russia’s influence in the region has been overshadowed by China’s presence.

„This is the typical intention of sowing discord between China and Russia. China and Kazakhstan are eyeing on strategic and concrete cooperation,“ Wang said.

Experts said the stability and development of Central Asia is not only the concern of the Central Asian countries, but also the concern of both China and Russia, as the two countries have many consensus and common interests in the region.

The current instability in the international and regional situation directly leads to a greater desire for regional stability, peace and development, so there is more demand for closer and more efficient cooperation, Zhao noted. „As Xi’s visit will not only enhance bilateral relations but also boost multilateral cooperation to meet those demand,“ she said.

Following the state visit to Kazakhstan, Xi arrived in Samarkand on Wednesday evening to pay a state visit to Uzbekistan and attend the SCO summit, a strategically important occasion of gathering of world leaders such as Russian President Vladimir Putin and Prime Minister Narendra Modi, according to media reports.

While China-Kazakhstan relations serve as an example for China-Central Asia ties, the geopolitical situation in the region has becoming more complex, and experts suggested that China and Central Asian countries should enhance communication and coordination in combating extremist forces.

„To crack down on ‚Three Evils‘, China and Central Asian countries need to enhance security cooperation under the SCO framework including intelligence sharing, staff training, joint exercise in fighting drugs, cross-border organized crimes and preventing the spread of extremist ideas,“ Zhao said.

At the same time, the Global Times proclaims that China’s non-dollar-based energy deals with other countries are now breaking dollar hegemony, just as more countries are rising up against the Federal Reserve Bank’s irresponsible monetary policies and dollar dominance—much like India’s Ex-General Asthana sees the emergence of a non-dollar financial system dawning:

“GT Voice: Non-dollar settlement in energy trade will break US hegemony

By Global Times Published: Sep 14, 2022 10:34 PM

·  ·  ·  · 

As the US Federal Reserve’s monetary tightening policy is set to wreak havoc and cause shocks across the global economy, there is increasing urgency for China, Russia, and other economies to step up cooperation to break the US dollar’s dominance in the energy market.

The dollar has been strengthening against the world’s other major currencies, and it has reached a level not seen in almost two decades. As the US central bank keeps raising federal funds rates to curb runaway inflation, the dollar is set to continue to appreciate significantly in the coming months. 

In Europe, the euro has fallen below parity with the dollar, reaching its lowest level in 20 years. In Asia, the Japanese yen has been traded at around 140 per dollar, which nears a 24-year low. Sharp currency depreciations will bring more pain and risks for non-dollar economies, including the EU, Japan and others.

In the global energy markets, commodities such as crude oil and natural gas are usually traded in US dollars. A strong dollar means energy products will become more expensive in terms of other currencies. When energy and raw material prices rise, the prices of other products will go up, leading to high inflation globally. The only exception will be the US where a strong dollar makes imported goods cheaper, thus helping keep its inflation in check.

The reason why the US can, time and again, export its own inflation crisis caused by its previous monetary easing policy to the world is mainly because the dollar still holds the dominant position in the global foreign exchange market, reserve assets, trade settlement and other fields.

To break the dollar’s dominance, it is essential to first weaken its anchor with major energy products such as crude oil. With the Fed’s irresponsible monetary policy now plunging the world economy into a tempest, more countries have been waking up to the growing urgency of breaking the dollar’s dominance in global energy trading. It has become more frequent than ever to see crude oil producing countries and consuming countries use non-dollar currencies to settle their energy trade in recent months.

For instance, Russia has sought payment in United Arab Emirates dirhams for oil exports to some Indian customers, Reuters reported in July. In the same month, India’s central bank announced an arrangement to allow trade settlements between India and other countries in rupee. And, Saudi Arabia has been in discussions with China about pricing some Saudi oil sales to China in yuan instead of dollar, according to a Wall Street Journal report.

Most recently, Russia’s Gazprom and China National Petroleum Corporation have agreed to switch payments for gas supplies to Russian ruble and the Chinese yuan instead of the US dollar. Oil and gas cooperation has always been the most fruitful and extensive area of practical cooperation between China and Russia. At present, Russia has become one of the main oil and gas supply sources for China, while China is also an important export market for Russian oil and gas.

During a recent visit to Russia, Li Zhanshu, chairman of China’s National People’s Congress (NPC) Standing Committee, said that the China-Russia comprehensive strategic partnership of coordination for the new era has maintained strong development momentum. 

It is worth noting that as the global economy is facing growing shocks from the stronger dollar, China and Russia need not only to accelerate their cooperation in energy settlement by facilitating relevant coordination and negotiation mechanism, but also studying the possibility of integrating that exploration into the cooperation under the Shanghai Cooperation Organisation and the BRICS framework.

There is real and common need for both developing and developed economies to seek non-dollar settlement in their energy trade. It is time for the concerned economies to act and fully coordinate and experiment with the possibility.

It is questionable whether a few oil deals will already break dollar hegemony, whether this theory of oil price coverage and energy as the main pillar of dollar hegemony is correct at all, especially since no specific figures are given. And what about other manufactured goods and services that are priced in dollars, even in the hi-tech sector? China expert and sinology professor at the LMU, Professor van Ess commented: „Wishful thinking!“

Furthermore, China announces a breakthrough on the chip front: The breakthrough in the 14 nm chips has now been achieved and the development of the 7 nm chip is making great progress:

Shanghai confirms 14-nm chips being mass produced now

By Qi Xijia Published: Sep 14, 2022 08:24 PM

Authorities in Shanghai, the hub of China’s semiconductors industry, on Wednesday said 14-nanometer chips are now being mass produced in the city. 

The achievement is a milestone for Shanghai in building a modern technology center, and a major event for China’s chips-making sector to break the blockade of the US government, amid the intensified China-US tech competition, experts said.

Shanghai-based firms have achieved mass production of semiconductors with 14-nm process and made breakthroughs in 90-nm lithography machines, 5-nm etching machines, 12-inch large silicon wafers, central processing units and 5G chips, Wu Jincheng, director of the Shanghai Municipal Commission of Economy and Digitalization, said at a press conference on Wednesday.

It marks the first official recognition of the ability of Chinese companies to mass produce 14-nm chips, Xiang Ligang, an independent technology analyst, told the Global Times on Wednesday.

The validation also comes as a powerful response to an expanded US blockade on high-end chip exports to China, which will only accelerate China’s breakthroughs in core technology, experts said 

„The broader the US blockades are, the faster that China will research and develop its own technology,“ Xiang said.

The Biden administration plans to broaden curbs on US shipments to China of semiconductors used for artificial intelligence and chip-making tools, Reuters reported on Monday.

The US Commerce Department has sent letters to companies including KLA Corp, Lam Research Corp and Applied Materials Inc, forbidding them from exporting chip-making equipment to Chinese factories that produce advanced semiconductors with sub-14-nm processes unless the sellers obtain Commerce Department licenses, according to the report.

While 10-nm has often been taken as a benchmark for advanced processes, for China, mature processes above 14-nm can meet the majority of Chinese market demands, Xiang said.

Chen Jia, an independent research fellow on strategy, told the Global Times on Wednesday that demand for 14-nm process in the industry is represented by new-energy vehicles.

The large-scale production of 14-nm chips in Shanghai will greatly help the development of such sectors as new-energy cars, smart cities, intelligent manufacturing and the Internet of Things, which will help China consolidate its advantage as the world’s top manufacturing factory, Chen said.

Experts said that the 14-nam breakthrough shows that China will allocate resources for breakthroughs in more advanced manufacturing processes.

With the completion of Shanghai’s industry cluster for the 14-nm chips, more advanced projects in the 7- and 5-nm processes will be accelerated, Chen said.

„The manufacturing of 7-nm chips in China is also progressing faster than expected,“ Xiang said.

Shanghai is the backbone of the nation’s semiconductors industry, with a market size reaching 250 billion yuan ($35.91 billion) in 2021, accounting for 25 percent of the nation’s total. More than 1,000 leading enterprises have settled in Shanghai, attracting 40 percent of the talent nationwide, officials said.

At the beginning this year, the Shanghai municipal government announced a set of new policies to bolster China’s advanced chip-making capacity

The USA, Japan and Taiwan are already producing 4 nm chips and are currently developing 2 nm chips. Similar to how people in Europe still dream of 5G in telecommunications, but China and the USA have long been developing 6G.

 Meanwhile, China is praising and hailing India´s stay away from Biden’s Indo Paciifc Economic Framework (IPEF)  as a success for China and the SCO and a major defeat for the US:

“India keeps independent diplomacy as Modi to attend SCO summit while New Delhi walks away from US-led IPEF


Yang Sheng

Published: Sep 14, 2022 09:25 PM

Shanghai Cooperation Organization Photo: VCG

Shanghai Cooperation Organization

Indian Prime Minister Narendra Modi has confirmed his attendance at the upcoming Shanghai Cooperation Organisation (SCO) Summit which will be held in Samarkand, Uzbekistan from Thursday to Friday, just days after India’s decision to walk away from part of the US-led Indo-Pacific Economic Framework (IPEF) last week. Analysts said India is sticking to an independent and autonomous diplomacy and they hope India will be more united with other SCO members including China and Russia, and play a more positive role to promote multipolarization of the world together. 

Modi is likely to hold bilateral meetings on the sidelines of the summit, said a statement the Indian Ministry of External Affairs released on Sunday. 

As to whether Chinese President Xi Jinping will meet with Russian President Vladimir Putin or Modi, Chinese Foreign Ministry spokesperson Mao Ning said at Tuesday’s routine press conference, „I have no information to offer at the moment. We will release information in a timely manner if there is any.“

Wang Yiwei, director of the Institute of International Affairs at the Renmin University of China, told the Global Times on Wednesday that India has always stressed independence and autonomy in its diplomacy and strategy, so it has always been open to joining different international organizations to maximize its own interests. The  latest move to walk away from the US-led IPEF means New Delhi will not be cheated or fooled by Washington easily.

India has stayed out of the trade pillar of the IPEF, it announced after the IPEF ministerial meeting held in Los Angeles on September 8-9. India’s Union Commerce Minister Piyush Goyal cited concerns over possible discrimination against developing economies. India was the only one of the 14 IPEF countries, which include Southeast Asian countries, Australia, New Zealand, South Korea and Japan, not to join the declaration on trade.

The conspicuous absence of India in the trade pillar, one of the four pillars of the IPEF, underlines the dispute between India and the US regarding the mechanism, a US-led geopolitical tool hiding behind economy issues, and implies an uncertain future for the framework, said analysts.

Although India wants to gain benefits from US‘ Indo-Pacific Strategy to serve its competition with China in the region, New Delhi is very clear that where it can get real interests and who will set a trap for it or even use it to contain others, experts said. 

Lin Minwang, a professor at the Institute of International Studies of Fudan University, told the Global Times on Wednesday that India’s diplomatic tradition is to get interests by keeping a balance between different major world powers, so ahead of the SCO Summit, it will release some positive signals to show that India is not teaming up with the US to contain China and Russia. 

„Joining the SCO serves India’s demand to increase cooperation with the Central Asian countries and Russia, to strengthen the connectivity with other countries in the region. For other SCO founding members, to include India, the fifth-biggest economy in the world with a huge population, will also strengthen the influence of the organization. So it’s mutually beneficial,“ Lin said.

In recent years, due to the impact of the US Indo-Pacific Strategy, there are some signs that India’s strategy is getting more and more pro-US, which is different from other members of the SCO, so the role that New Delhi could play in the SCO is limited. To change the situation, India needs to show more positive signals and become more united with other SCO members, analysts said. They noted that this has changed somewhat after the outbreak of the Russia-Ukraine conflict and the latest decision that India made to stay away from the trade pillar of the IPEF.   

India needs to follow the consensus reached by the SCO members, so it can benefit more from the organization and have a more positive role to play, experts noted.

Lin said the SCO is also valuable for India to communicate with Pakistan, which is an SCO member, to avoid miscalculations and conflict and solve disputes through dialogue. Regarding China-India relations, the SCO is an important mechanism for the two sides to ease border tensions and seek more possibilities for cooperation.

Compared with the US-led „multilateral mechanism“ which in fact serves the unipolar world order dominated by US hegemony, the SCO formed by non-Western key powers like China, Russia, India and Pakistan is much more collaborative and is really promoting the multipolarization of the world that benefits the majority of the international community, which is why countries like Iran, Egypt, Saudi Arabia and Belarus are seeking membership or deeper connection with the SCO, analysts said.

The fact that India is still in the Quad and does not want to be a member of China’s free trade zone RCEP or even the BRI New Silk Road is not emphasized. Sino-Indian relations in the border region in the Himalayas are easing at the moment:

“India, China troops begin disengagement at Gogra-Hot Springs in Ladakh “

Read more at:

At the same time, however, Indo-Chinese competition in the Indian Ocean is intensifying, especially around Sri Lanka and the Chinese port, with India and Japan now promising the government economic aid and a loan to counteract Sri Lanka’s dependence on China’s loans and funds. India is also angrys because of  the dispatch of a Chinese ship off the coast of Sri Lanka, which India claims is a Chinese „spy ship“, which China denies. Let’s see if Xi now wants to meet Putin as well, but Focus reports that the alliance is said to be „crumbling“. In any case, the Russian statements on the Vostok maneuver appear to be greatly exaggerated. However, the article does not provide any more details, only the British are quoted. According to other reports, India also sent only 75 soldiers to the maneuver and Indian General (retired) Astahana emphasized that the maneuvers were planned before the Ukraine war and that India also had maneuvers with the USA in the Himalya and in the Indian Ocean, which is why one shouldn’t attach too much importance to it or even misunderstand it as  India’s partisanship in favor of Russia in the Ukraine war.

“Although China participates in maneuvers – the alliance between Putin and Xi is crumbling

Friday, 09/09/2022

Putin announced the military exercise „Vostok 2022“ with much fanfare. Now it turns out that the announced high number of participants was obviously extremely embellished.

Vostok 2022 – Russia’s military exercise in the Eastern Military District (Vostok), which began on September 1, ended yesterday. According to official Russian data, 50,000 soldiers took part. Accordingly, 140 aircraft and 60 warships were also deployed. However, military observers doubt that so many soldiers took part in the maneuver. They estimate that no more than 15,000 soldiers were actively involved in the military exercises. The exercise in the East Military District takes place every four years. Compared to the military maneuvers in 2018, significantly fewer soldiers were involved this time, even according to official information, even if the official number of 300,000 soldiers at the time was clearly exaggerated. In fact, there were probably around 100,000 maneuver participants at the time. (…)

Russian maneuvers with China, which, however, refrain from providing military aid to Putin

China and India are probably Russia’s most important partner states at the moment. Their participation in the exercise should also demonstrate that Russia is isolated by the collective West, but not globally. China’s renewed participation demonstrates that military cooperation with Russia is unbroken. Chinese troops also value training with experienced Russian soldiers. Despite this, China has not provided any military goods for the Russian war in Ukraine. Even high-tech deliveries for the Russian armaments industry, which has to do without Western components, have probably only been made to a limited extent. Chinese companies fear secondary sanctions if they supply goods sanctioned by the West to Russia. The North American and European markets are much more important for China than the Russian one.

This also shows that the “partnership without limits” invoked by Putin and Xi in February 2022 does have its limits. Russian and Chinese ships have been conducting exercises in the Sea of ​​Japan. The Japanese government had previously urged that the Russia-Japan disputed island chain of the southern Kuril Islands (called the „Northern Territories“ in Japan) should not be included in the manoeuvre. Of course, the Russian leadership refused. On the contrary, during the military exercise in the Sea of ​​Japan, an enemy attack on the southern Kuril Islands was fought and repelled.”

Meanwhile, new trouble is brewing in the Indo-Pacific with a possible new bill in the US by the US Senate Committee on Foreign Relations that wants to upgrade Taiwan to a non-NATO ally. As the Global Times comments, this would further undermine the One China principle and stronger reactions can be expected this time than during the Pelosi visit. Secretary of State Blinken and other members of the government are opposed to this law, but would not have Congress under control, as Pelosi’s visit would have shown, and even if it does not go through directly this time, there is a risk that individual important passages will nevertheless become US foreign policy. China would not let this salami slicing tactic unanswered.

“US to consider ‚comprehensively restructuring‘ policy toward Taiwan island; may lead to ‘China’s strong countermeasures’

By Cui Fandi Published: Sep 13, 2022 10:34 PM

The US Senate Committee on Foreign Relations will consider a draft of the Taiwan Policy Act of 2022, which is described as the most comprehensive restructuring of US policy toward China’s Taiwan region since the Taiwan Relations Act of 1979. Chinese experts warned that if the bill gets passed, it will lead to the complete elimination of the US‘ „one-China policy,“ and that China will take strong countermeasures.

The proposed Taiwan Policy Act intends to change the language of providing arms to Taiwan from being in a „defensive manner“ to „arms conducive to deterring acts of aggression by the People’s Liberation Army.“ It also intends to authorize the island of Taiwan with „$4.5 billion over four years in Foreign Military Financing, and prioritizes Taiwan’s requests for assistance.“ Taiwan will be designated as a Major Non-NATO Ally for the US, according to the website of the US Foreign Relations Committee.  

If this draft or most of its provisions are passed, it is further hollowing out the content of the US‘ „one-China policy,“ Xin Qiang, director of the Taiwan studies center with the Shanghai-based Fudan University and deputy head of the university’s US studies center, told the Global Times on Tuesday. 

„The US‘ de facto ‚one-China, one-Taiwan‘ policy would take another big step forward, making the ‚one-China policy‘ exist in name only,“ Xin said.

„It is far more serious than [house speaker] Nancy Pelosi’s provocative visit to Taiwan island because the law’s enforcement is above the policy and likely to continue to exert influence for decades to come,“ he said. The draft, if passed, would almost certainly follow a higher level of US security commitment to the island, he noted.

However, it is clear that this draft, which will be considered by the Congress, is not in large part a US government aspiration.

On September 7, US National Security Advisor Jake Sullivan said in a TV interview with Bloomberg that „there are other elements [of the draft] that give us some concern.“

Sullivan is the only US government official to have made a public negative statement on the matter so far, though media reports imply that more people in the White House do not support the draft. According to a Bloomberg report in August, the Biden administration is concerned that the bill’s strong language on Taiwan’s status could upset the established US balance on Taiwan and is lobbying Democratic lawmakers to put the brakes on the bill.

Although the White House and the US Congress often disagree on Taiwan-related affairs, the White House and the US president – who under the Constitution can ultimately determine the policy – do not appear to have enough say and decision-making power, observers noted.

The White House is well aware of the dire consequences if the draft passes, yet its ability to influence the Congress is not as great as we might have thought, Xin said.

The scholar cited the example of Pelosi’s provocative visit to Taiwan. Before Pelosi’s visit to Taiwan, even President Joe Biden publicly expressed his disapproval, yet Pelosi’s trip was not canceled, and the White House chose to acquiesce.

The US midterm elections are about to take place. Many lawmakers are taking this opportunity to hype foreign affairs issues, especially those related to Taiwan, in an effort to earn more votes, Xin notes.

And this draft entirely about Taiwan is not even what the Taiwan authorities want,  Xin said. No senior officials in the Taiwan island have yet publicly stated their support for the draft.

If the draft is passed, it is likely that Taiwan will be the party other than the US that can no longer afford the Chinese mainland’s stronger countermeasures, he said. 

„This is more proof that Taiwan is just a pawn of the US.“ 

On September 5, China vowed to take firm countermeasures against the US‘ latest approval of $1.1 billion in arms sales to the island of Taiwan, the largest since Biden took office. China has long urged the US to halt arms sales and military interactions with the island, including the mega-deal this time.

On September 8, the Chinese Foreign Ministry urged US politicians to immediately stop any form of official exchanges with China’s Taiwan region, and stop sending wrong signals to Taiwan secessionists, in response to a trip made by a US bipartisan delegation led by Representative Stephanie Murphy, vice chair of the House Subcommittee on Intelligence and Special Operations.

China also needs to be wary of further US „salami slicing,“ such as this draft being blocked, but the provisions get scattered through other bills later to achieve the same effect, Xin said.

Also, inspired by Putin’s energy war, China is also considering attacking Taiwan at its most vulnerable point:

“Taiwan’s Greatest Vulnerability Is Its Energy Supply

Taiwan imports nearly all of its energy and would struggle to keep power flowing during a disruption to supply lines.(…)

Taiwan’s economy and its manufacturing prowess is in turn highly dependent on steady, reliable sources of energy. Taiwan manufactures about 65 percent of the world’s semiconductors and almost 90 percent of the most advanced chips. Producing these chips consumes huge amounts of electricity. TSMC alone accounted for 6 percent of Taiwan’s total energy consumption in 2020 and this is expected to rise to 12.5 percent by 2025 as the company continues to build new chip plants.

Taiwan is an island with no physical power interconnections with neighboring countries. In addition, there are very few indigenous energy sources available – hydro and pumped storage are limited by a lack of adequate river systems, utility-scale solar power is limited by available land, geothermal energy is limited by suitable locations and public opinion, and there are no domestic sources of fossil fuels. In addition, there is opposition to nuclear power, dams, and even to onshore wind installations. This is partially offset by excellent offshore wind resources in the Taiwan Strait.

Taiwan is therefore almost totally dependent on imports for its energy requirements. In 2021 Taiwan relied on imports of fossil fuels for 97.7 percent of its total energy supply. Electricity is primarily generated from coal and natural gas, representing 81.5 percent of total generation, while nuclear power accounted for only 9.6 percent and renewables (mostly solar and wind) for 6.0 percent. Taiwan began implementing an energy transition policy in 2016 which has set goals to promote green energy, increase use of natural gas, reduce coal-fired power, and end the use of nuclear power. The one remaining operational nuclear power plant is to be decommissioned by 2025.

Taiwan’s energy system vulnerabilities are an ongoing concern. While Taiwan’s government has specific energy resource stockpile requirements, the resiliency of Taiwan’s energy system to potential disruptions is limited in part by the relatively low level of its oil, natural gas, and coal stockpiles. Currently stockpiles slightly exceed the minimum requirements with 39 days of coal, 146 days of oil, and 11 days of natural gas, according to the Bureau of Energy, part of Taiwan’s Ministry of Economic Affairs. Should China implement a full or even partial blockade, Taiwan would incur severe damage to its economy after 11 days since natural gas accounts for about 37 percent of electricity generation and oil-fired generation is negligible, leaving coal as the only baseload backstop since Taiwan’s remaining nuclear power plants are set for phase out.

Electricity grid stability is vitally important to Taiwan’s manufacturing industry, particularly the semiconductor industry. Taiwan has experienced frequent blackouts due to malfunctions in feedlines and transformers, much of which is due to centralized and aging infrastructure. In its latest sustainability report, TSMC noted that the risk of power outages or disruptions are rising and that grid instability could impact on its operations on the island within the next three years.

There is already some evidence that China’s recent actions may have started to have an impact on major energy projects in Taiwan. An offshore wind project being built off Taiwan’s west coast has seen some international financial institutions drop out of project financing while others are flagging the increased level of risk associated with financing such projects in Taiwan.

China’s actions have highlighted the vulnerability of Taiwan’s economy to disruptions in the surrounding sea lanes and airspace. The Joint War Committee (JWC) of insurers based in London, which classifies the world’s waters according to risk, says that while some shippers have had to take detours around Taiwan’s eastern coast, they do not currently consider China’s actions to pose an elevated risk to shipping. However, if militarization in the region were to increase in level and/or frequency, risk assessments could change.

A blockade or even an increase in frequency of Chinese drills and military maneuvers in the airspace or the sea lanes around Taiwan could potentially disrupt Taiwan’s exports and delay or disrupt inbound shipments of energy, minerals, food products and other critical components needed to keep Taiwan’s economy running. China could also employ a selective “blockade” by attempting to limit certain types of freight or goods from entering or leaving Taiwan. If airlines and shipping companies are compelled to take alternate routes as a result of increased risk, it could cause delays and increased freight costs and insurance, not only in the Indo-Pacific but globally. Because of Taiwan’s importance in global trade, especially for electronic components such as semiconductors, such disruptions could be catastrophic for the world economy.

The risks to Taiwan’s economy and its energy security are rising in the wake of China’s more aggressive stance, as the island faces an elevated level of security threats that could further disrupt trade and cause financial and investment risk to rise. Given Taiwan’s almost total reliance on imports of energy resources to sustain its economy and the global reliance on Taiwan’s “democracy chips” – as President Tsai Ing-wen has quipped – Taiwan’s allies and partners have a real self interest in promoting peace and security in the Taiwan Strait and pressuring China to stand down on its provocations. At the same time, Taiwan should review its energy policies with a view toward further diversifying its energy sources, developing contingency plans in the case of disruptions, and reviewing its policy on nuclear power.

Which doesn’t seem to impress Taiwan’s DDP very much. Southeast Asia and Asia expert Dr. Wolfgang Sachsenröder commented: “China can cut off raw materials for Taiwan. Today, my Strait Times writes that Taiwan’s de facto ambassador to Washington, Bi-kim Hsiao, is calling for economic sanctions against China. I have known her for many years as a very committed DPP politician. but now, in my opinion, they are making a mistake with the sanctions.”

 While China is arming itself with submarines, aircraft carriers, ships, land and underwater drones and others for the conflict with the USA over the new multipolar world order, it is now also announcing another breakthrough: the Cargo Transporter Y-20, which has already been around flown the world as far as Serbia and Austria to demonstrate its reach and radius. Not only as an commercial export hit, but also for China´s own future power ambitions far beyond Taiwan. Of course, this “cargo” transporter, which was initially used for disaster relief and evacuations, can also be used as a weapon and troop transporter for the Chinese military, which is why the PLA is also in charge. So it is hoped that in the future Chinese military transporters, like the American Galaxy, Hercules and other US large-capacity transporters, will project Chinese military power around the world and then also transport combat troops for future foreign missions. This is still camouflaged with melodious slogans such as: „The PLA Air Force is a force of peace“.

“Y-20 cargo plane debuts at European air show, displays China’s aviation achievements

By Liu Xuanzun

Published: Sep 01, 2022 08:55 PM Updated: Sep 01, 2022 08:51 PM

A Y-20 large transport aircraft of the Chinese People’s Liberation Army (PLA) Air Force has arrived in Austria to participate in the largest air show in Europe starting on Friday. 

This is the first time that the Y-20 will be put on static display for the public in Europe, a move experts believe will display the tremendous achievements made by the Chinese aviation industry and the PLA Air Force, showing transparency and confidence.

The Austrian Armed Forces on Wednesday released a video showing the arrival of the Y-20, which will participate in the upcoming Airpower22 air show, after Senior Colonel Shen Jinke, a spokesperson for the PLA Air Force, announced on Monday that the aircraft would fly to Europe and join an international air show for the first time.

Organized by the Austrian Armed Forces and advertised as the largest air show in Europe, the two-day Airpower22 is scheduled to kick off on Friday. About 200 aircraft from 20 countries and regions will participate, according to the event’s website.

The Chinese transport plane will be put on static display for the general public at the air show, said the organizer.

The PLA Air Force open day event kicked off in Changchun, NE China's Jilin on Friday. During Friday's air show, the Y-20, J-20, J-16 and other star fighter jets were on full display. The PLA Air Force's August 1 aerobatics team also delivered a wonderful aerial display. (Photos: Cui Meng/GT)

A Y-20 large transport aircraft perform at the PLA Air Force open day event kicked off in Changchun, Northeast China’s Jilin. Photos: Cui Meng/GT

The Y-20’s participation in the event comes after large groups of Y-20s flew to Serbia in April to deliver air defense missiles procured by the Eastern European country, which attracted wide attention in Europe.

By participating in an international air show in Europe, the PLA Air Force shows its transparency and confidence, and the display of the Y-20 will allow European visitors to the event to better understand China’s achievements in aviation and realize that the PLA Air Force is a force of peace, analysts said.

There are only few countries in the world that can independently develop military large transport aircraft like the Y-20, which reflected the Chinese aviation industry’s world-class level, Wei Dongxu, a Beijing-based military expert, told the Global Times on Thursday.

Being able to travel such a long distance from China to Austria also demonstrated Y-20’s capabilities, Wei said.

The Y-20 has made frequent appearances on the world stage, and it has become China’s latest “calling card” that highlights the country’s commitment to fulfilling its responsibilities and obligations as a major power, analysts said.

Among the Y-20’s overseas missions was a disaster relief supply delivery mission to Tonga in January after the island country in the South Pacific was hit by a volcanic eruption and subsequent tsunami. The plane also carried out an anti-epidemic material delivery mission to the Solomon Islands in February, as well as a disaster relief supply delivery mission to Afghanistan in June after an earthquake. In a latest development, the aircraft delivered relief supplies to Pakistan in late August after a flood hit the country.

China could also offer the Y-20 as an export-ready product now that the country has made breakthroughs in the development of domestic engines, Wei said.

Thanks to its outstanding cost performance, the Y-20 will be more competitive in the international market than its Russian and US counterparts, the Il-76 and the C-17, Wei said.

And accompanying J-20 fighter jets were also sent, initially to South Korea because of the martyrs of the Korean War, but as an exercise for other upcoming future military missions:

“J-20 fighters to escort Y-20 aircraft for 1st time in repatriating remains of CPV martyrs from S.Korea

By GT staff reporters Published: Sep 14, 2022 08:23 PM

The Chinese People’s Liberation Army (PLA) Air Force will on Friday send its J-20 stealth fighter jets to escort the Y-20 large transport aircraft for the first time in the repatriation from South Korea of the remains of Chinese People’s Volunteers (CPV) martyrs who sacrificed their lives in the War to Resist US Aggression and Aid Korea (1950-53) mission. 

J-20 fighter jets attached to an aviation brigade under the PLA Air Force taxi in close formation during a flight training exercise on January 7, 2022. Photo:

J-20 fighter jets attached to an aviation brigade under the PLA Air Force taxi in close formation during a flight training exercise on January 7, 2022. Photo:

This is a move that will not only pay tribute to the CPV martyrs but also display the increasing number of J-20s in service, experts said on Wednesday.(…) The CPV martyrs had made tremendous sacrifices in the War to Resist US Aggression and Aid Korea, and as their remains return to motherland, the PLA welcome them back home with latest transport aircraft and fighter jets, telling them that the motherland and its military are becoming ever stronger, with advanced weapons and equipment, Song said.

„No other country can bully China, as the Chinese military is capable of safeguarding China’s national sovereignty, security and development interests,“ Song said.”

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