China & Hong Kong
Image Source: civils daily
Hong Kong May Join AIIB By Year’s End
At this year’s Boao Forum For Asia that took place in Sanya of Hainan province, president of the AIIB, Jin Liqun, said that Hong Kong may be able to join the AIIB as a sub-sovereign member by the end of this year.
Hong Kong is likely to act as a financing platform for the bank, including forms of bond issuance and arranging currency swaps, according to Jin.
It is believed that the AIIB can help Hong Kong to strengthen its status as an international financial centre, as Hong Kong as a relatively weak bond market.
Jin also mentioned that representatives from Hong Kong have already started on negotiating on a charter that helps settle the AIIB’s institutional issues.
Image Source: Michal Cizek (AFP)
Czech Inks Strategic Partnership With China During Xi’s Historical State Visit
Chinese president Xi Jinping made a historical state-visit to the Eastern European country earlier this week. The visit marked the very first time that Czech Republic was visited by the top leader of China during the diplomatic relationship of more than 60 years.
Following the MOU that was signed between Czech and China to develop the Belt & Road last year, the 2 countries inked a strategic partnership during president Xi’s short stay in Prague.
Czech’s president, Milos Zeman, said $3.9billion worth of Chinese investment is expected to be spent into the country this year, covering healthcare, tourism, banking, transport, IT and sciences.
Czech Republic was the only stop in Europe by the Chinese president before he went off to attend the Nuclear Security Summit held in Washington D.C. few days later.
What We Think:
In the past, China and Czech had some hiccups over issues such as human rights, Tibet and Taiwan during the presidency of the late Czech president Václave Havel.
Lately, relationship between the two countries seem to be unprecedentedly warm.
A new leaf was turned over when the current president Milos Zeman took a more friendly approach towards the Chinese government since 2013, and downplayed previous conflicts. In a visit to China in 2014, Zeman said that he was there to “learn how to increase economic growth and how to stabilise society” rather than “teach market economy or human rights”. Zeman was also the only EU state leader who attended the military parade that marked 70th anniversary of the end of WWII last September in Beijing.
The fact the Czech was the only country Xi visited in Europe this time, was seen as reciprocation and a gesture implying that Czech has become one of China’s new best friends. Of course, we must not forget that this is also the very first state visit by the top leader of China to the Eastern European country.
Now, China is the biggest trading partner of Czech apart from the EU, and Czech the biggest trading partner of China in Central Eastern Europe region. The massive private conglomerate CEFC China Energy has also invested heavily in the country, owning substantial amounts of stake in bank, media house, airline, football club and brewery group.
However, friendly terms between the top leaders and powerful businessmen may not fully represent the big picture.
Upon the arrival of the Chinese president, there had been some rather intensive demonstrations in Prague (involving some 800 Czech residents). Chinese national flags were vandalized, and a number of arrests were made. On the side, some residents are in the habit of displaying Tibetan flags in March each year (including the opposition party). There has also been fear of Chinese intrusion due to the uprising trade and investment.
Also to note, in the text of the strategic partnership agreement, the Czech government did not give specific explanations to the reference “One China” just like other European countries, possibly in order to maintain some forms of relations with Taiwan (and Tibet), and also to avoid backlash from the public.
Although China has gained support from the current Czech president, power from the opposition party is not minimal either. With significant up-rise of right-wing support throughout countries around the globe in the past five years (to some degree it is an outcome of over-globalization where well-being of local residents are neglected), it is important that China works harder on its soft power and positive image through culture and other activities, especially targeting the general public in other countries, in order to achieve a positive outcome from the Belt & Road Initiative and any other forms of international cooperation.