China Observers

Australia has been a prominent target of China's foreign interference. Beijing has been involved in various covert operations, including cyber espionage, attempts to infiltrate local politics, and efforts to sway public opinion through media and social platforms. Chinese government-linked entities have been accused of leveraging Chinese student associations to promote Beijing's agenda. Hacker groups associated with Beijing have carried out attacks against the computer networks of the Parliament and the three main political parties, as well as individual MPs who are part of the Inter-Parliamentary Alliance on China (IPAC). Furthermore, an Australian politician was offered a financial contribution in exchange for changing their stance on China-related issues. These activities aim to undermine Australia's sovereignty, democratic institutions, and strategic interests. In response, the Australian government passed legislation criminalizing foreign interference and introduced the Foreign Influence Transparency Scheme. Despite these efforts, the challenge of countering China's sophisticated and persistent tactics persists.

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In October 2023, The European Commission launched an anti-subsidy investigation into the imports of Chinese battery electric vehicles. Furthermore, the commission has instructed customs authorities to start registering the import of electric vehicles from China so that the EU could impose retroactive tariffs. As the decision day on whether to impose definitive duties approaches, Beijing becomes increasingly agitated. Meanwhile, Chinese carmakers BYD and Geely-owned Volvo are ramping up investments in electric vehicle (EV) production across Central Europe, with other companies likely to follow suit. While these investments are generally welcomed by local governments, they are viewed by some as posing additional risks to the European automotive industry.

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In early May, Chinese President Xi Jinping made a state visit to France to celebrate the 60th anniversary of diplomatic relations between China and France. This visit, his first to Europe since the pandemic began, occurred against the backdrop of the EU investigation into Chinese electric vehicle exports and Beijing’s retaliatory probe into imports of French-made brandy. Ursula von der Leyen, President of the European Commission, participated in the tripartite meeting, adding a European dimension to the discussions. The leaders jointly urged Xi to tackle issues related to China’s overcapacity in electric vehicles and green technologies and addressed the issue of China’s export of dual-use technologies to Russia. Despite raising these concerns, the two sides concluded 32 agreements during the visit. Xi then continued his European tour to Serbia and Hungary, where he sought to strengthen ties, a move perceived by some as an attempt to create divisions within Europe.

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While it is true that China has served as a crucial economic support for Russia during the war in Ukraine, it has not fully compensated for the decline in Russian export revenue from the EU. Beijing has supplied Moscow with dual-use goods and technology but there has been no direct provision of lethal military equipment from China to Russia, as the Chinese government and businesses are wary of triggering Western secondary sanctions and losing access to the European market. Thus, It is unlikely that the Chinese government and defense companies will substantially support Russia with heavy weaponry and ammunition in its ongoing conflict against Ukraine. One reason for China holding back is the nuanced and cautious attitude of its foreign policy elites on Russia’s war.

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In the past few years, Hungary has seen a surge in new investments from Chinese companies in the EV industry. Chinese battery and EV makers have been attracted by the favorable political climate and generous state support. Additionally, Hungary and China have been working towards closer collaboration in the areas of policing and security. During a recent visit by China's Minister of Public Security, Wang Xiaohong, the two countries signed a series of agreements aimed at improving cooperation in these areas. This will allow Chinese police to patrol alongside Hungarian police on Hungarian soil. As a result of these developments, Hungary is increasingly becoming a hub of Chinese influence in the region. In the past, Hungarian Prime Minister Viktor Orbán has been accused of acting as a trojan horse for China within the EU, as he has opposed measures aimed at China. With Hungary's growing dependency on China, this trend is likely to continue.

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Szabolcs Panyi, Investigative Editor at the VSquare Project.

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In January 2024, the European Commission revealed five new initiatives aimed at advancing the implementation of its Economic Security Strategy, which was formally introduced in the summer of the previous year. The proposal seeks to tighten inbound investment screening rules and create greater export control conformity within the EU. With regard to outbound investment screening, which is the most controversial issue of the package, the Commission remains relatively sober. The strategy calls for a risk assessment of outbound investment and related security issues through a public consultation process. The package puts a strong focus on research security. However, there is little that can be done at the EU level since the competencies are mainly spread among national, sub-national, and institutional levels in the Member States. While the package aims to scale up dual-use and advanced research, it lacks a financial strategy to strengthen the bloc’s technological and industrial capabilities.

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Tobias Gehrke, Senior Policy Fellow at the Global European Council on Foreign Relations.

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Despite Beijing’s attempts to influence the elections, Taiwan’s commitment to democracy has prevailed, and the people of Taiwan elected their new leader last week. William Lai, from the Democratic Progressive Party (DPP), emerged victorious in the recent presidential race. This result is likely to sustain the status quo in cross-strait relations, characterized by continued tensions and limited dialogue. Beijing’s reaction to the elections has been relatively muted compared to the massive incursions following US House Speaker Nancy Pelosi’s visit to Taiwan in 2022. However, Nauru’s announcement to sever ties with Taiwan and establish relations with Beijing came as a surprise to many. Taiwan is grappling with diminishing international recognition, struggling to keep pace with China’s dollar diplomacy. The question now is whether Taiwan can offset these losses by expanding unofficial relations with like-minded countries.

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Michael Mazza, Senior Director at the Project 2049 Institute and Senior Non-resident Fellow at the Global Taiwan Institute.

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The 2024 presidential election in Taiwan holds great significance as it will determine the future of Taiwan's relationship with China, the United States, and the rest of the world. Though the West often views Taiwan's elections through the lens of cross-strait relations and the risk of Beijing's invasion, most Taiwanese voters are more concerned with domestic issues such as housing policy, low wages, and energy security. The elections will also reflect how the Taiwanese people view their national identity and sovereignty. The three candidates have different strategies for dealing with the cross-strait issues and enhancing Taiwan's global presence. Contrary to previous elections, the results remain uncertain as the race is expected to be tight. One of the significant challenges facing Taiwan is the threat of disinformation and propaganda from China, which aims to sway public opinion and undermine democracy in Taiwan.

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After the honeymoon period of Czech-China relations that started in 2013, the bilateral ties gradually soured. This shift was linked to the perceived lack of benefits stemming from economic cooperation and various security-related events that gave rise to skepticism regarding the profitability and viability of closer ties with China. The current government, sworn in 2021, has been cautious towards Beijing and has worked towards improvement of ties with Taiwan. In March this year, Speaker of the Parliament Markéta Pekarová Adamová led a strong delegation to Taipei, resulting in the signing of a number of business deals and establishing cooperation between academia, and even military, and security services. The new President Petr Pavel made news for speaking over the phone with Tsai Ying-wen, who called him in January to congratulate him on his election victory. Czechia thus established itself as one of Taiwan’s best friends within the EU.

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In recent years, the US imposed a set of restrictions on exports of advanced semiconductors and chipmaking equipment to China. While China’s nanoelectronics sector has been cut off from access to leading technology necessary to produce cutting-edge chips competitively, side effect of the restrictions has been China‘s growing market share in mature nodes as it doubles down on self-reliance. In face of the global chip shortage and Europe’s struggles to keep pace with the global semiconductor industry, the bloc decided to boost its own domestic chip production through the EU Chips Act. The legislation aims to strengthen the EU’s supply chain resilience and reduce geopolitical risks linked to the growing US-China tensions. While experts diverge on the consequences of a potential Taiwan contingency on the semiconductor industry, the island’s visibility has significantly increased thanks to the issue.

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