Main Topic: China's state security ministry calls for citizens to participate in counter-espionage work.
Key Points:
1. China aims to establish a system that encourages citizens to report suspicious activity and participate in counter-espionage efforts.
2. The expansion of China's counter-espionage law in July has raised concerns among foreign companies operating in China.
3. China's focus on political security and safeguarding the Communist Party's leadership is emphasized in its efforts to combat espionage.
### Summary
🇩🇪 German Economy Minister, Robert Habeck, plans to tighten the process for reviewing foreign investments with a new law to enhance economic security and reduce reliance on China.
### Facts
- 📜 German Economy Minister Robert Habeck aims to enhance economic security by tightening the process for reviewing foreign investments.
- 🌍 Berlin urges companies to reduce their dependence on China and examines whether current regulations are sufficient for this goal.
- 🇩🇪 Germany's strong business ties with China have raised concerns about the country's commitment to the Western approach to China.
- 🔍 The new law would audit investments made through contractual agreements instead of acquiring voting shares.
- 🏭 The ministry is also considering checking the security significance of new factories built in Germany by foreign companies.
- 🤝 Security-critical research cooperation deals may also be scrutinized for potential risks.
- 🌐 The move reflects a broader Western push to reduce strategic dependence on China and de-risk supply chains.
Source: Reuters
Beijing needs to provide clarity on its economic plans and the national security crackdown in order to rebuild confidence in the future trajectory of China and address uncertainties, according to the head of a European business lobby in China.
China's economic slowdown is causing alarm worldwide, with countries experiencing a slump in trade, falling commodity prices, and a decrease in Chinese demand for goods and services, while global investors are pulling billions of dollars from China's stock markets and cutting their targets for Chinese equities.
US companies are becoming increasingly hesitant to invest in China due to concerns over new anti-spying laws, competition from state-funded firms, and the country's economic challenges such as deflation and a property crisis.
China's economic challenges and failed rebound post-Covid are causing U.S. investors and businesses to view Chinese exposure as a liability, leading to underperformance in companies with high China exposure and potential bans on foreign devices, signaling a potential decline in China's economic growth.
China has dismissed allegations of spying by a man arrested in London as "malicious slander" and a "political farce," urging the UK to stop its "anti-China political manipulation."
It is unclear why China would allocate resources in spying on and gathering information about two outspoken UK MPs, Alicia Kearns and Tom Tugendhat, who have been public about their views on China, leading some to question the motive behind the alleged espionage.
China's economy is facing potential decline due to high debt levels, government interference, and an aging population, with warnings of a full-blown financial crisis echoing the 2008 US recession. Failure to liberalize the economy could have long-term consequences, as foreign investments are restricted and the lack of capital inflow and outflow could harm businesses.
Chinese spies have infiltrated Congress and attempted to gain access to classified information, prompting warnings for increased vigilance and education about the threat of infiltration, as seen in a recent incident in the UK involving a suspected Beijing espionage plot in British parliament.
China and the US are engaged in a spy game, with both countries taking bold steps to collect intelligence on military capabilities and leadership thinking.
Amid an ideological battle with the US and a looming economic slowdown, Beijing is encouraging citizens to be on constant alert for foreign spies, leading to growing mistrust and a deep suspicion of foreigners.
China's President Xi Jinping emphasizes the need for reform and opening up the economy as foreign investors consider leaving, calling for a greater opening up of free-trade zones and a focus on playing by international trade rules. Despite these efforts, China's foreign direct investment has fallen and US businesses remain skeptical due to regulatory uncertainties and geopolitical risks.
Tensions between the West and China are rising, impacting global markets by increasing inflation and interest rates, shifting supply chains, creating opportunities for emerging nations and tech giants, and affecting industries such as manufacturing, infrastructure, luxury goods, and technology. Investors are split on how to approach the Chinese market amidst these tensions.
China's foreign policy is often misunderstood by the west, as it is not a grand scheme for world leadership, China deals with democracies, has a role in the world order, draws on its historical experience, and offers appealing aid packages to developing countries.
China's technological advancements, particularly in chipmaking and artificial intelligence, challenge Western sanctions and raise concerns about China becoming a major weapons supplier and dominating critical industries like robotics and high-speed trains. The importance of rethinking outsourcing manufacturing to China and securing supply chains for national security is highlighted.
