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US Investigation Finds China Using “Unfair” Practices In the Maritime Sector; What Could Happen Next?

Newswire / /

The Biden administration has determined that China employs “unfair policies and practices” to dominate the global shipbuilding, logistics, and maritime sectors, according to three sources familiar with the findings of a months-long trade investigation.

The U.S. Trade Representative (USTR), Katherine Tai, initiated the investigation in April 2024 following a petition from the United Steelworkers and four other U.S. unions. The probe was conducted under Section 301 of the Trade Act of 1974, which allows the U.S. to impose penalties on foreign nations engaging in practices deemed “unjustifiable,” “unreasonable,” or detrimental to U.S. commerce.

Investigators found that China specifically targeted the shipbuilding and maritime sectors for global dominance. They concluded that the country utilized “financial support, barriers for foreign firms, forced technology transfer, intellectual property theft, and procurement policies” to bolster its competitive edge, according to one source who spoke on the condition of anonymity. The report also highlighted that Beijing “severely and artificially suppressed China’s labor costs in the maritime, shipbuilding, and logistics sectors,” the source added.

Although the findings have not been officially confirmed or denied by U.S. officials, they come at a time of growing competition between the two largest economies and as Washington seeks to reduce reliance on Chinese manufacturing and supply chains by rallying allied nations.

Shipyards in Asia, including those in South Korea and Japan, may see some benefits if penalties are imposed on China’s shipbuilders. However, analysts and a senior executive from a major Chinese shipbuilding firm noted that China’s shipbuilding industry, due to its sheer scale and cost advantages, remains robust enough to withstand such measures in the short term. 

According to the data cited by the US probe, China’s share of global shipbuilding has expanded to over 50% in 2023.

“China’s shipbuilders have overtaken the Japanese and the Koreans and everyone under the sun,” said James Chin, a professor of Asian studies at the University of Tasmania.

Chin added that Chinese shipbuilders are “safe in the near term – up to roughly 24 months – from any measures that the U.S. might take.”

US Investigation Finds China Using “Unfair” Practices In the Maritime Sector; What Could Happen Next? Read More »

The Road to Dependency: Chinese Banks Eyeing Georgia

New, Research / /

A new report by Civic IDEA examines a key development stemming from the Sino-Georgian strategic partnership: the potential entry of Chinese banks into the Georgian market.

The report highlights recent meetings between the central banks of Georgia and China, during which the National Bank of Georgia consistently expressed interest in the presence of Chinese state-owned banks in Georgia.

It also addresses the risks and challenges linked to Chinese financial institutions, citing examples of “debt-trap diplomacy” in countries such as Sri Lanka, Tajikistan, and Montenegro.

The Road to Dependency: Chinese Banks Eyeing Georgia Read More »

EU-China Trade Tensions

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Beijing has criticized the European Union for imposing unfair trade barriers on Chinese companies, as the world’s second-largest economy prepares for the possibility of new U.S. tariffs following Donald Trump’s anticipated return to the White House at the end of January.

China’s Ministry of Commerce has published the findings of an investigation, claiming that the European Commission’s selective enforcement of competition policy unfairly discriminates against Chinese companies. In October, the EU increased tariffs on electric cars made in China. Beijing argues that the definition of “foreign subsidies” is subjective and causes unfair harm, warning that it should anticipate retaliation.

A 20-page report from the Chinese Ministry of Commerce indicates that the European Commission has consistently warned companies about potential retaliatory actions for violating regulations and has threatened them with substantial fines. Furthermore, the report claims that some Chinese companies were forced to cancel projects to have investigations against them dropped. According to the Chinese Ministry of Commerce, this has resulted in losses exceeding 15.6 billion yuan, equivalent to approximately $2.13 billion.

Last year, the European Union initiated an investigation into a Chinese train manufacturer that planned to supply trains to Bulgaria. The scope of the investigation was later expanded to include Chinese-owned solar panel companies attempting to build a photovoltaic park in Romania. Additionally, European authorities conducted raids on the Dutch and Polish offices of Nuctech, a Chinese security equipment supplier. In response, Beijing launched its own trade investigation into European products, which could result in increased tariffs on luxury car imports from the EU.

China and the European Union share a strong “symbiotic” economic relationship, and President Xi Jinping expressed hope that the bloc can become a “reliable partner for cooperation” during his conversation with European Council President Antonio Costa on Tuesday. The EU official emphasized the need for Beijing to play a role in contributing to a just and lasting peace in Ukraine.

The EU’s foreign subsidy regulation is designed to safeguard businesses within the bloc’s 27 member states from unfair competition. The regulation grants Brussels the authority to investigate instances where state subsidies are suspected of distorting market conditions.

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China-Russia trade relations reach record highs amid US sanctions

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In 2024, the trade volume between China and Russia increased significantly. The value of Chinese imports and exports to Russia in 2024 was 1.75 trillion yuan ($237 billion), a record high. The value of China-Russia bilateral trade has reached 244.8 billion dollars in 2024, which is 4 billion more than the previous year.

According to the General Administration of Customs of China, China-Russia yuan-denominated trade value increased by 2.9% in 2024 compared to 2023, although this growth was much slower than in 2023. At the same time, the supply of Chinese goods to Russia in 2024 increased by 5% in yuan terms in 2024 compared to the previous year, which is sharply below the 53.9% increase in 2023.

Such close economic ties between China and Russia have long been a subject of attention for America. Back in July 2024, Biden made a clear statement that China and Xi Jinping would definitely have to be held accountable for providing Russia with a lot of help in the fight against Ukraine.

According to Russian President Vladimir Putin, the main challenge for trade between China and Russia is the agreement on settlement and payment methods for each other. Despite this, Putin emphasized that in 2024 the relations between the two states reached an unprecedented level, which he assessed as a positive process. In his New Year’s greetings to Putin, Chinese President Xi Jinping expressed a similar position and said that China and Russia have always “hand in hand” moved forward in the right direction. Russia’s state news agency RIA also reported a promise made by Moscow’s ambassador to Beijing in December that Xi Jinping would visit Russia in 2025.

Increased trade between China and Russia is due to Western sanctions against Russia. As Alfredo Montuffar-Helou, head of the China Center of the Conference Board, a US-based think tank, states, Russian consumers have fewer alternatives to choose from in the domestic market due to Western sanctions, which increases the demand for Chinese goods. According to his prediction, the trade between these two states will continue in 2025 as well, as China becomes a bigger market for Russian exports, Chinese products fill the deficit caused by the limited supply of products from Western countries to the Russian market.

However, this bilateral trade will face a big test in 2025. On January 10, the US Treasury Department announced the imposition of additional sanctions against the Russian energy sector. The sanctions target Gazprom Neft and Surgutneftegaz, two of Russia’s most important oil producers and exporters, as well as block 183 vessels to cut Moscow’s energy revenues. The States believe that the energy industry is the Kremlin’s main source of income, which allows it to finance military aggression in Ukraine.

Cui Dongshu, the general secretary of the China Passenger Car Association, told Chinese media that in 2025, the export of cars to Russia may even decrease, which is caused by the increase in taxes.

US Treasury Secretary Janet Yellen warned Chinese Vice Premier He Lifeng during the talks that Chinese firms would face repercussions and consequences if they provided material aid to Russia against Ukraine.

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EMERGING CONCERN Chinese Surveillance Cameras in Georgia

New, Research / /

A new report by Civic IDEA explores an emerging dimension of China-Georgia law enforcement cooperation: the procurement of Chinese surveillance technology by Georgian government institutions.

Drawing on publicly available data, the report examines state procurement of Chinese surveillance cameras between 2019 and 2024, revealing a growing trend in the acquisition of this technology by Georgian authorities.

The report’s final section highlights the significant challenges associated with Chinese surveillance technology, including data insecurity, vulnerability to cyber-attacks, human rights concerns, and close ties to the Chinese Communist Party. These issues have led to the banning of Chinese surveillance technology in several Western countries.

CHINESE SURVEILLANCE CAMERAS REMAIN A GLOBAL CONCERN

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Chinese cyber-espionage campaign reached the US Foreign Investments Office

Newswire / /

According to CNN, Chinese hackers breached the US government office, which assesses foreign investment in the context of national security. This action underlines the Chinese interest in American institutions that have the power to block Chinese investments in the US once more.

The targeted office of the hacking campaign, the US Foreign Investment Committee (CFIUS), expanded its authority to learn about the sales of real estate near the US military bases extensively since national security experts believe that China or its proxies could purchase the lands to spy on said bases.

Aside from CFIUS, the hacking campaign reached the Office of Foreign Assets Control as well, which is responsible for sanctions enforcement. Notably, the office recently sanctioned a Chinese company for alleged involvement in cyber attacks.

According to an article published by Bloomberg, Silk Typhoon, a Chinese group, is behind these cyber attacks. The group was involved in an attack on Microsoft Exchange Server as well.

The Chinese embassy in Washington, D.C., spokesperson Liu Pengyu denied Chinese involvement in hacking operations once again.

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CHINESE COMPANY CRTG: SECURITY RISKS AND INFRASTRUCTURE FAILURES

Research / /

“Civic Idea” is pleased to present a new publication examining the recent entry of the Chinese state-owned company, China Railway Tunnel Group (CRTG), into the Georgian market.

The report delves into the controversies and challenges surrounding CRTG, which is overseeing two critical infrastructure projects: the Kvesheti-Kobi highway connecting Georgia to Russia and the Stepantsminda-Gveleti connecting road.

This study highlights key concerns, including security risks, infrastructure deficiencies, and the company’s history of serious international violations. It provides an in-depth analysis of CRTG’s operations in Georgia and explores its track record in other countries.

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Biden extends sanctions on Hong Kong officials

Newswire / /

US President Joe Biden has signed legislation extending the Hong Kong Human Rights and Democracy Act of 2019 for another five years. The Act authorizes sanctions on key Chinese officials and authority figures, justified by violations of Hong Kong’s autonomy and the suppression of fundamental rights, including freedom of expression and assembly.

The legislation is included in the annual National Defense Authorization Act (NDAA), which outlines the budget and U.S. military policy for the upcoming fiscal year. Alongside the extension of the Hong Kong Act, the Reciprocal Access to Tibet Act and the Uyghur Human Rights Policy Act were also renewed.

Hong Kong and Beijing have condemned the U.S. sanctions, warning Washington that such measures are ultimately detrimental to the United States itself. They argue that the sanctions risk undermining the longstanding trade relationship between the U.S. and Hong Kong.

The severity of U.S. sanctions is reinforced by the dominant influence of the U.S. dollar in the global financial system. Individuals targeted by these measures face both financial restrictions and travel bans, amplifying the impact of the sanctions.

Hong Kong’s current Chief Security Officer, Carrie Lam, has stated that she evaded U.S. sanctions by receiving her salary in cash and keeping it at her residence.

In addition to the above, the U.S. State Department announced further sanctions in November, primarily focusing on visa restrictions.

The decision to impose these measures was made by the U.S. after 45 opposition representatives were arrested in Hong Kong on charges of attempting to overthrow the government.

In response, China is imposing sanctions on American individuals whose actions (concerning Hong Kong) it deems unfavorable.

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Russia is Reducing Investments in One of the Main Sectors of Trade with China

Newswire / /

One of Russia’s main trade channels with China is experiencing significant disruptions as Russia’s war-torn economy, under pressure, has significantly slowed the country’s railway industry. It should also be noted that the railway system is a necessary component for trade between Moscow and Beijing.

During the first nine months of 2023, more than 128 million tons of cargo were transported by rail between the two countries. This represents a 51.5 percent increase over the same period in 2022 recorded last year.

Sanctions have made it more difficult for Russian exports and imports of technology. Russia has increased its imports of military technology and equipment from “Third World” countries, including China. According to the Atlantic Council, increased rail trade with China has thwarted the desired goal of Western sanctions, involving isolating Russia’s economy and fueling Putin’s wartime resource shortages. 

Despite the positive indicators recorded last year, the current situation does not look so favorable. Russia’s rail industry is facing its sharpest slowdown since the Great Financial Crisis, and the trend is on the rise, according to a report from Russian research firm MMI Research. 

MMI data cited by Bloomberg show that the volume of cargo carried by Russian State Railways in the first 11 months of 2024 fell by 5% compared to last year. This slowdown is partly due to Russia prioritizing the transportation of war-related materials. All this hampered the transportation of such important goods as coal and aluminum.

The reduction of investments in Russian railways is another factor that causes the mentioned slowdown. According to the state news agency Tass, high interest rates in the country make project financing even more difficult.

In addition, as reported by Tass, in 2025 Russian Railways plans to allocate only 890 billion rubles ($8.5 billion) for the investment program, which means that compared to 2024, this figure will decrease by 30%. As reported by the Russian news outlet Kommersant, the company may reduce investments by another third by the end of the decade.

The changes are also bad news for Russia’s trade with China, which depends on rail transport due to Western sanctions. Russia invested billions in railways in early 2024 to boost trade with China, but ongoing economic woes continue to hamper progress.

The issues discussed above highlight the growing costs of Russia’s war against Ukraine, which is causing the country many economic challenges. It is also significant that earlier this year, to combat high inflation, the Central Bank of Russia raised interest rates to a record 21%. In a decision last week, the bank kept interest rates on hold because of what they believe are risks of excessive cooling in Russia’s war economy.

It should be noted that Russia’s military strategy is completely dependent on its railway networks. Railroads are logistically critical to Putin’s all-out war in Ukraine. With relatively limited alternatives for large-scale transportation, Russia needs efficient railroads to move troops, equipment, and supplies.

Ukrainian intelligence services and guerrilla groups are working with Russian anti-war groups to strategically target Russian railway logistics points. “Stop the Wagons” is one of the most famous Russian political groups that express their opposition to Russia’s war in Ukraine by sabotaging railway infrastructure.

Russia is Reducing Investments in One of the Main Sectors of Trade with China Read More »

New wave of mass protests in Serbia – students demand release of documents on train station restored by Chinese companies

Newswire / /

After nearly two months of non-stop demonstrations, the largest protest in decades took place in Belgrade, the capital of Serbia, on Sunday, December 22. Since the first week of November, protesters have been demanding the resignation of President Vučić and his ruling party, the Serbian Progressive Party. They accuse the current leader of corruption, nepotism and lack of transparency– all of that, as they think, has been s a concomitant event during the renovation works in Novi Sad.

The train station has undergone two renovations in recent years as part of questionable mega projects involving Chinese state-owned enterprises. All these led to poor workmanship and ultimately to the death of 15 people on November 1 when a ceiling collapsed at the Novi Sad train station.  

The Novi Sad railway station underwent a major renovation as part of a Chinese-led project to upgrade Serbia’s railway network, focusing on the route north from Belgrade. This effort is tied to China’s expansive Belt and Road Initiative, aimed at speeding up the transport of Chinese goods to Europe.

Renovation work began in 2021, with parts of the station unveiled during the 2022 election campaign. However, reconstruction continued until July 2024, when local authorities announced that the station had been rebuilt “to European standards.” According to Novi Sad news outlet 021, key documents related to the renovation were classified as confidential.

Chinese investments in Serbia—spanning infrastructure, mining, and surveillance—have often been surrounded by controversy, with persistent concerns about standards and transparency. In 2021, a construction permit was issued for the complete overhaul of the railway infrastructure between Novi Sad and the Hungarian border. The permit mentioned the “reconstruction, adaptation, and extension” of Novi Sad’s railway station but didn’t specify which parts of the building would be impacted. Among the supporting documents was a project titled “Architecture Project for the Extension and Adaptation of the Underpass and Canopy of the Novi Sad Railway Station,” though it offered no additional details.

Within days of the catastrophic event, Transport Minister Goran Sevic, the Serbian State Railways Company, the State Transport Institute, and the Chinese consortium – China Railway International Co. Ltd. and China Communications Construction Company (CRIC-CCCC), which was involved in the renovation of the building, denied the allegations and stated that the ceiling that collapsed was not part of their work. But they were soon exposed. The footage shared on social media indicates that the collapse may have been triggered by the weight of newly installed heavy glass. “It’s not true that no work was done on the awning, because it was covered with glass post-factum,” said geologist and engineer Zoran Đajić, who supervised the railway station reconstruction works until 2023, to the domestic press. 

Although CRIC and CCCC assert that they did not directly construct the canopy, legal experts contend that, as umbrella contractors, they hold responsibility for the performance of their subcontractors. This brings up wider concerns regarding the quality and safety of BRI projects, especially those involving local subcontractors.

When asked about unconfirmed reports of an extraordinary inspection of other projects involving CRIC and CCCC, Vucevic stated, “I will never take part in this potential anti-Chinese hysteria that is being imposed…“. After, he also mentioned sarcastically, that maybe they should arrest all the representatives of Chinese companies.

To eliminate the lack of transparency and identify the main culprits, the participants of the action are demanding the opening of restoration work documents and declarations, as well as holding those responsible for the case accountable.

New wave of mass protests in Serbia – students demand release of documents on train station restored by Chinese companies Read More »

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