Beijing applies more pressure on West, tries to ease sanctions on Moscow
FSB executes(?) Chinese spy
Beijing appears to be applying more pressure on the West in an attempt to reduce sanctions on Moscow. You can read more on Beijing’s efforts here, or below. The PRC may be edging towards greater (and more open) support for Putin, although another surge in domestic COVID cases could lead to more lockdowns and reduce Beijing’s enthusiasm for the Kremlin’s war. As The Report went to press China’s Anhui province reported hundreds of new infections.
The FSB claims to have uncovered two Chinese spies in the past week: physicist Dmitry Kolker, who reportedly worked on lasers, and Anatoly Maslov, a chief scientist who reportedly worked on hypersonics. Both Kolker and Maslov hail from Novosibirsk which, it’s worth noting, doesn’t have a Chinese consulate. I strongly caution against drawing any strong conclusions from the case, with one exception: the incident appears to demonstrate that elements within the FSB and the Russian state are willing to enforce red lines against Chinese espionage. While TASS hasn’t reported on the incident in its English-language press, perhaps in an effort to preserve ties with China and present a united front to the West, neither the FSB nor Russian state media have shied from publicizing the incident domestically, in Russian-language media. Readers may also recall that the FSB also publicized Chinese submarine-related espionage in the summer of 2020.
Kolker reportedly died two days after his arrest, as the FSB flew him to Moscow despite his status as an advanced pancreatic cancer patient. Did the FSB deny medical care to Kolker and (deniably) execute the supposed Chinese spy? Potentially. Alternatively, Kolker may simply be a victim of the FSB’s incompetence. It’s unwise to draw many conclusions from the case.
If we can speculate, however, it’s possible that Xi Jinping’s zero-COVID policy may have contributed to the unraveling of the purported Novosibirsk spy ring. The Siberian city of 1.6 million individuals doesn’t have a Chinese consulate, so any on-the-ground Chinese case officers would have had to manage their Russian assets via trade, business, or tourist cover. With Russian counterintelligence having to vet fewer legitimate tourist and business travelers due to reduced international travel, particularly from China, the FSB may have been able to track Chinese case officers meeting with their sources. China’s zero-COVID policy may be harming its HUMINT espionage goals in Russia and elsewhere.
Uzbekistan is experiencing protests sparked by its domestic politics. The protests have little relevance for Sino-Russia relations, at least so far.
Beijing’s perspectives on the war, Europe, and NATO
FSB deniably executes(?) Chinese(?) spy(?)
Biolab information campaigns and Jeffrey Sachs
RIC (Russia-India-China) and food markets
BRICS
Worth Your Time
1. Beijing’s perspectives on the war, Europe, and NATO
As Europe is suffering from the sweltering heat and is trying its best to store gas for this winter, Russia has cut its natural gas supply to Europe sharply, leading to an aggravated “gas shortage” in Europe. Natural gas prices have soared, and the European inflation rate, which has repeatedly hit record highs, has come under pressure again. Industry is worried that it will be difficult for Europe to find a suitable gas source in the short term. Even restarting coal power will be a drop in the bucket, and the European economy will face the risk of a downturn.
Russian ruble hits seven-year high – People’s Daily [俄罗斯卢布汇率达到7年来最高水平]
After the Russian side announced the launch of a special military operation on February 24, the ruble began to show signs of rapid depreciation. The exchange rate against the US dollar fell below 80 to 1 on the same day, and then continued to fall. On March 9, it once fell below 120 to 1, a record low. As the Russian side has taken various measures to deal with sanctions, stabilize the financial market and boost market confidence, the ruble exchange rate has gradually recovered and has now surpassed the level before the conflict between Russia and Ukraine.
Comment: As experts (see below) note, the ruble exchange rate is something of a “Potemkin rate,” as Russia faces difficulties servicing import needs with its foreign currency earnings. Still, this isn’t well understood by non-specialists, which is why the PD is amplifying stories about the ruble setting seven-year highs.
Russia’s ruble hit its strongest level in 7 years despite massive sanctions. Here’s why – CNBC
Because Russia is now cut off from the SWIFT international banking system and blocked from trading internationally in dollars and euros, it’s been left to essentially trade with itself, [FPRI’s Max Hess] said. That means that while Russia’s built up a formidable volume of foreign reserves that bolster its currency at home, it can’t use those reserves to serve its import needs, thanks to sanctions.
The ruble’s exchange rate “is really a Potemkin rate, because sending money from Russia abroad given the sanctions — both on Russian individuals and Russian banks — is incredibly difficult, not to mention Russia’s own capital controls,” Hess said.
It is NATO that poses systemic challenges to world security and stability. NATO claims to be a regional defensive alliance, but it has constantly sought to make advances into new areas and domains and waged wars in various countries in the world. NATO has the blood of their people on its hands. The Chinese people will not forget the crimes NATO committed 23 years ago when US-led NATO bombed the Chinese Embassy in the Federal Republic of Yugoslavia. Now NATO has extended its tentacles to the Asia-Pacific and sought to export the Cold War mentality and replicate bloc confrontation. The Asia-Pacific is one of the most peaceful and stable regions in the world and a promising land for cooperation and development. Any attempt to undermine its peace and stability and sabotage regional solidarity and cooperation will be unanimously rejected by the people in China and the rest of the Asia-Pacific. Such attempts are bound to fail.
NATO expansion only begets confrontation, threatening global security
NATO has formally invited Sweden and Finland to join the military alliance, a sign of how deeply "the product of the Cold War" indulges itself in ideological confrontation and bloc politics.
While emphasizing self-proclaimed security assurances for members, its latest northward expansion amid the ongoing Ukraine crisis poses a grave challenge to global security, especially in the Baltic Sea region and the North Pole region, experts have said.
US eyes Russia, China at G7 summit amid woes at home – People’s Daily
Aiming to keep pressure on Russia and seek solidarity to cope with challenges from so-called systemic rival China, the G7 summit is convening in southern Germany, as leaders of the group including US President Joe Biden began arriving on Saturday afternoon local time.
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Already having many problems ranging from galloping domestic inflation to a looming food crisis and energy shortages, the US is still promoting its anti-China agenda of seeking bloc politics and camp confrontation against China, and according to the White House on Saturday, the G7 leaders will address "what they see as China's use of forced labor and intellectual property theft and other issues."
The G7 summit and the imminent NATO Summit in Madrid, Spain, would very likely be Biden's last dance in Europe, as the Democrats will probably lose the midterm election in November. [Bolded by The Report, as this is a rather unsubtle commentary on US domestic politics by the People’s Daily] Biden is making a final charge to convince and rally European leaders to come onboard the anti-China chariot, Wang Yiwei, director of the Institute of International Affairs at the Renmin University of China, told the Global Times.
The US will exploit topics related to Russia to push for its ultimate goal of containing and competing with China in order to maintain its hegemonic status in the world, Wang noted.
The CNN report spelled out the US' logic as Russia's special operation in Ukraine has amplified Biden's oft-spoken warnings of autocracies versus democracies, and Biden would hope to convince fellow leaders to take a tougher line toward China and make China's "coercive economic practices" a bigger topic of conversation" than during last year's G7 summit.
2. FSB deniably executes(?) Chinese(?) spy(?)
Russia arrests scientist for alleged collaboration with Chinese secret services – Reuters [July 1]
Russia has detained a scientist in Siberia on suspicion of state treason for allegedly collaborating with China's security services, the state news agency TASS reported on Friday, citing regional authorities and the man's family.
Comment: TASS didn’t report this in English-language sources but distributed the story domestically. Still, it’s clear that the Russian state wanted this story in the public sphere and seeks to deter Russians from agreeing to spy for China.
Russian laser scientist dies two days after arrest for state treason – Reuters [July 3]
A Russian scientist who was arrested in Siberia last week on suspicion of state treason and flown to Moscow despite suffering from advanced pancreatic cancer has died, lawyers and a family member said on Sunday.
Comment: Since the scientist, Dmitry Kolker, was on his death bed and couldn’t be “traded” for Russian assets in the PRC, the FSB may have settled on a “next-best” option: by withholding medical treatment, the FSB may have deniably executed Kolker to deter other would-be spies.
Of course, one also shouldn’t underestimate the FSB’s incompetence: Kolker may simply have been a victim of bureaucracy. And, as ever, one should resist drawing firm conclusions about espionage cases, with rare exceptions.
Second Russian scientist from Siberian city detained on treason charges, TASS reports – Reuters [July 2]
Russia has detained a second scientist in the Siberian city of Novosibirsk on suspicion of state treason in the space of a few days, the TASS news agency reported on Saturday, citing a source close to the investigation.
Comment: There is no Chinese consulate in Novosibirsk, so any on-the-ground Chinese case officers would have had to manage their Russian assets via trade or tourist cover. However, since Kolker (and potentially the second scientist) often traveled to China on official business, Chinese security services might have felt it unnecessary (and unwise) to risk detection via in-person contact. Finally, there is no certainty that Kolker actually was a Chinese spy – it’s plausible that the Russian security services may have found someone near death and invented the case to deter other would-be spies. While that scenario is ghoulish, it’s not an implausible one and is something that Russian security services are very capable of.
Closer ties coming between Siberia's largest city and China – Siberia Times
Already around 100 Chinese companies are accredited in Novosibirsk but there are prospects for much closer ties, says the city's mayor Vladimir Gorodetsky.
Comment: If the MSS was indeed running a spy ring in Novosibirsk, any Chinese intelligence case officers were likely operating under non-official cover as businesspeople or tourists – not under official cover as diplomats, given the lack of a Chinese consulate in the city.
It’s plausible that Beijing’s zero-COVID policy exposed the spy ring and, indeed, may be hampering other HUMINT operations. Very few Chinese are traveling abroad for business or tourism due to COVID restrictions and quarantining procedures, unless absolutely necessary. Assuming a constant pace of espionage activities, the decline in legitimate business and tourist travel by Chinese would mechanically lead to an increase in the share of espionage-related travel by outbound Chinese travelers.
Similarly, the marked decline in international travel (particularly by Chinese travelers) has likely enabled Russian counterintelligence services to concentrate resources across a smaller number of individuals/potential targets. I’m obviously speculating, but it seems quite possible, perhaps even likely, that Russian counterintelligence services uncovered the spy ring on their own, without the assistance of “offensive counterintelligence,” (i.e. intelligence on Chinese operations gained via human sources or signals methods).
3. Biolab information campaigns and Jeffrey Sachs
Covid-19 may have originated in US biolab – Lancet chair – RT
Covid-19 did not come from nature but rather was an accidental release "out of US lab biotechnology", world-renowned economist and author Jeffrey Sachs has claimed. He was speaking at a conference hosted by the think tank GATE Center, in Spain, in mid-June.
While introducing this “provocative statement,” Sachs suggested that he was in the loop, as he chairs the Covid-19 commission at prestigious medical journal The Lancet.
“So it’s a blunder, in my view, of biotech, not an accident of a natural spillover,” he reiterated.
The academic noted that while “we don’t know for sure” if this is the case, there is “enough evidence” pointing to this, which “should be looked into.” Sachs lamented that this version is, however, “not being investigated, not in the United States, not anywhere.”
Comment: Sachs’ comments are noteworthy because of his curious views on other topics, which very often align with Beijing’s objectives in information campaigns
US Ambassador Urges China to Stop Spreading Russian ‘Lies’ – Bloomberg
Ambassador Burns reiterates no US bioweapons labs in Ukraine; Russian claim has been point of tension between China, US
Interview: U.S. fails to recognize its own human rights' violations, says senior UN advisor – Xinhua
The United States, instead of recognizing its own violations of human rights, criticizes other countries with "biased" human rights application, a senior United Nations (UN) advisor told Xinhua in a recent email interview.
"All countries should strive to honor and achieve the human rights identified in the Universal Declaration of Human Rights (UDHR), and the political standards embodied in the UN Charter," said Jeffrey Sachs, who is the director of the UN Sustainable Development Solutions Network.
Rights groups question Columbia over professor's interview – Axios
In a Jan. 24 interview with The Wire China, Sachs responded to two questions about China's genocidal policies in Xinjiang by accounting America's own human rights failings.
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Sachs said nothing about China's repression of the Uyghurs despite repeated prompting from the interviewer.
Jeffrey Sachs on Not Pointing Fingers – The Wire China
The economist and UN stalwart says the U.S. should stop trying to gang up on or destabilize China.
US President Joe Biden's administration has doubled down on the claim that China is mounting a genocide against the Uighur people in the Xinjiang region. But it has offered no proof, and unless it can, the State Department should withdraw the charge and support a UN-based investigation of the situation in Xinjiang.
China Is Detaining Muslims in Vast Numbers. The Goal: ‘Transformation.’ – NY Times
Comment: This article is from 2018, although Beijing’s brutal suppression of Xinjiang extends back farther. Hopefully Jeffrey Sachs can find the time to read an article on the region.
The [Lancet’s] commission’s chair, Columbia University economist Jeffrey Sachs, says he was concerned that five of the 12 task force members, including the original and current chairs, had potential conflicts of interest because of their direct and indirect ties to a lab in Wuhan, China, at the center of the origin debate. But Gerald Keusch, the current chair, charges that Sachs didn’t trust that the task force members would give the lab-origin hypothesis a fair evaluation and attempted to influence how they conducted their work, including demanding access to confidential interviews with experts on both sides of the debate whom they promised not to identify.
Comment: Why on earth did the Lancet pick Jeffrey Sachs to chair the commission? Sachs is not credible
4. RIC (Russia-India-China) and food markets
Telephone conversation with Prime Minister of India Narendra Modi – The Kremlin
The leaders had a detailed discussion of topical issues of Russian-Indian relations and focused on the subsequent development of mutually beneficial economic ties. They were pleased to note a substantial increase in bilateral trade volumes, including mutual deliveries of agricultural produce. Vladimir Putin and Narendra Modi voiced their mutual commitment to strengthening the specially privileged strategic partnership between Russia and India.
At the request of Narendra Modi, Vladimir Putin gave an update on the key aspects of Russia’s ongoing special military operation and underscored the dangerous and provocative nature of the approach of the Kiev regime and its Western patrons to escalate the crisis and torpedo efforts to resolve it by political and diplomatic methods.
They reviewed in detail the situation in the global food market. Vladimir Putin drew attention to systemic mistakes by a number of countries that disrupted the entire system of free trade in foodstuffs and provoked substantial price hikes. The illegitimate anti-Russia sanctions have compounded the already complicated situation. The very same factors have also impacted the global energy market. The President also noted that Russia had been and remained a reliable producer and supplier of grain crops, fertiliser and energy carriers to Indian partners, among others.
Vladimir Putin and Narendra Modi agreed to continue their personal contacts and interaction at other levels.
Prime Minister Shri Narendra Modi had a telephone conversation today with His Excellency Vladimir Putin, President of the Russian Federation.
The two leaders reviewed the implementation of the decisions taken during President Putin’s visit to India in December 2021. In particular, they exchanged ideas on how bilateral trade in agricultural goods, fertilizers and pharma products could be encouraged further.
The leaders also discussed global issues, including the state of the international energy and food markets.
In the context of the ongoing situation in Ukraine, Prime Minister reiterated India’s long-standing position in favour of dialogue and diplomacy.
The leaders agreed to maintain regular consultations on global and bilateral issues.
5. BRICS
Russia favors BRICS enlargement, wants candidate criteria first — Kremlin aide says – TASS
Russia favors the enlargement of the BRICS association (Brazil, Russia, India, China and South Africa) but suggests defining procedures and criteria for future candidates first, Russian Presidential Aide Yury Ushakov told a press briefing on Monday.
Comment: The Kremlin continues to try to slow walk BRICS expansion
BRICS cooperation injects vitality into global development, wins worldwide applause – People’s Daily
Experts told Xinhua that they are impressed by Xi's emphasis on and China's commitment to promoting global unity and cooperation, and the BRICS partnership has set an example of South-South cooperation and of seeking strength through unity among emerging markets and developing countries.
The BRICS mechanism has been taken by many around the world as an important cooperation platform for emerging markets and developing countries, which is expected to bring positive, stabilizing and constructive strength to the world.
Xi: BRICS should bring positive, stabilizing and constructive strength to the world – People’s Daily
Xi proposed to foster a development paradigm featuring benefits for all, balance, coordination, inclusiveness, win-win cooperation and common prosperity, and announced important measures taken by China to implement the Global Development Initiative (GDI), charting the course for revitalizing global development and building confidence and strength in achieving common prosperity.
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Some countries, politicizing and marginalizing development issues, resort to the approach of building "exclusive yards with high walls" and extreme sanctions, creating division and confrontation.
What they are doing is placing impacts on the global economic system, which will hurt not only themselves, but also the rest of the world if they are loosed to keep doing so, destroying decades of efforts made in international economic cooperation and costing a huge price for the people around the world.
6. Worth Your Time
The partnership between China and Russia has become one of the most critical features of the contemporary strategic relationship. Russia’s war in Ukraine has created economic and diplomatic dilemmas for China, but it hasn’t altered the fundamental alignment of interests and autocratic values that drives that relationship. In this Marshall Paper, David Shullman and Andrea Kendall-Taylor explain why the Sino-Russian relationship will only get deeper as a result of the war—even as it reveals strains and divisions that the United States and its allies may, eventually, be able to exploit.
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To be sure, there will be limits to the “no limits” partnership. Beijing will undoubtedly seek to avoid provoking unnecessary blowback as a result of its support for its most important strategic partner. But make no mistake, China and Russia are fundamentally aligned—Moscow and Beijing share a view of the United States as their most important security challenge, and together they seek to erode U.S. power and influence.
Comment: This analysis also makes key points about how personalization may make both Russian *and* Chinese foreign policy more unpredictable and dangerous, Xi’s significant commitment to Putin, and Moscow’s growing dependency on Beijing.
In Moscow's Shadows 71: Russia, Ukraine and beyond - another miscellany – Mark Galeotti podcast
Comment: I don’t agree with everything Galeotti says, but I highly recommend this podcast.
How America tries to grapple with China while confronting Russia – The Economist
Travels with the defence secretary in quest of stronger ties
v/r,
Joe Webster
The China-Russia Report is an independent, nonpartisan newsletter covering political, economic, and security affairs within and between China and Russia. All articles, comments, op-eds, etc represent only the personal opinion of the author(s) and do not necessarily represent the position(s) of The China-Russia Report.