Civicidea

“Corrosive capital” – financing that lacks transparency, accountability, and market orientation flowing from authoritarian regimes into new and transitioning democracies. It applies directly to big authoritarian countries which play a key role in Central Asia. Major economies such as Russia and China lack true forms of transparency, accountability, good governance in their foreign aid and capital granting schemes. It exploits and exaggerates governance gaps to influence economic, political, and social developments in recipient countries. The corrosive capital is understood as an influx of money that exploits weaknesses in governance and risks amplifying them, with the result of large agreements that are not well-documented, ending with countries losing ownership of key resources to their donor.

China deploys corrosive capital into these societies and the lack of transparency does real damage to accountability of institutions, good governance and breaks on public sector reform efforts. These practices not only affect Central Asia, but ripple in the Western Balkans, Eastern Europe and Africa as well. Tena Prelec analyzed that those non-transparent investments of China are often advanced through using informal political links or close relationship between top actors, bypassing competition rules and public procurement procedures; legislative changes introduced to favor investors and the political cultures underpinning these linkages are significant. The Belt and Road Initiative is coming to the participating countries with limited transparency and weak governance standards that could facilitate corruption and fraud around its projects. TI’s Corruption Perception Index indicates that countries along the initiative among the most corrupt countries in the world. Many countries that have taken Chinese loans are now reconsidering their deals with China due to allegations of corruption and low transparency.

A significant amount of capital influx comes to the region without an oversight and transparency on the funds, ruling kleptocratic elite will consider it as a new source of rent – illicit practices in the political system actively practices and China’s BRI will both create challenges to advance good governance and curbing corruption. In this light, advancing good governance and curbing corruption is a challenging task for Tajikistan.  Tajikistan is a country whose ruling elite have historically shown skill in capturing state resources in corrupt schemes. This presents a danger that any investment or aid coming to the country will ultimately benefit the ruling elite.

Corruption is a result of the confluence of a weak state and powerful criminal networks that mix illicit with licit activities with state and non-state actors. Only privileged groups can not only participate in and enrich themselves through corrupt practices, but also through legal and semi-legal activities (including lobbying). These groups traditionally consist of the country’ president, the family of the president and their associates.

In April 2019 during the second Belt and Road Forum, Xi Zinping vowed “zero tolerance” for corruption, pledged more transparency, good environmental practices and expressed the commitment of China to open up.  and that the cooperation within BRI initiative “will be open, green and clean”. Cooperation within the BRI “will be open, green and clean”, he said.

One of the elements of traditional Chinese social fabric is Guanxi, which to be used for achieving political goals.  Guanxi is translated as corruption, a bribe (facilitation payment) or nepotism. It provides an exclusive access to resources and operates through informal connections. The Tajik equivalent would be Taghabazi, using once (uncle) relative or friend as a connection to reach political goals. Guanxi and local Central Asian traditions of graft creates a perfect opportunity for more corruption but less governance and integrity.

Tajikistan is a source of copper, zinc, titanium, aluminum, gold, pig iron, radioactive isotopes and other mining metals and stones – all needed for Chinese economy. China prioritizes building hard infrastructure, which China believes will catalyze the improvement of investment climate, good governance and human skills. However Chinese firms engaged in BRI lack transparency on contract negotiation, lack corporate social responsibility, have a low degree of respect for environment and governance laws. The socio-economic impact of the Chinese BRI is minimal since China employs mostly Chinese citizens in infrastructure and other projects.

Beijing provided a state loan of $280 millions to Tajikistan to renovate Dushanbe-Chanak Highway connecting Tajikistan capital city Dushanbe with Uzbekistan border city of Chanak.  This project was completed in 2010 by China Road and Bridge Corporation. However, when the project was completed, the Dushanbe elite thought it could be used in a scheme and soon the highway transformed into toll road to be run by unknown company Innovative Road Solutions. This company has no corporate history, no prior experience in running highway projects and was registered in British Virgin Island, effectively becoming an offshore company located in a hyper secret tax haven. According to reporting from Deutsche Welle, it was traced to be belonged to Mr. Jamoliddin Nuraliev, the Son-in-Law of the President of Tajikistan.  Furthermore, the company was exempted from dozens of taxes.

Apparently, the contribution to Deutsche Welle paper was made by Journalist from Tajikistan Mr. Khayrullo Mirsaidov, who later ended up in prison. It is most definitely linked with this publication, which is sensitive to Tajikistan’s ruling elite. Chinese business and individuals have a “cover” in Tajikistan, when a violation occurred by that can be traced to Chinese individuals, it usually gets covered up. This is one example of how BRI offered a rent-seeking opportunity to connected insiders and the local elite. It will likely continue to provide incentives to engage in illicit income. According to Tajik economist, annual revenue of this toll road will be $49 million.

When China provides loans, in addition to repaying the principal and the accrued interest, the main precondition is involving Chinese companies in the implementation of projects such as debt financed infrastructure projects that provide short-term employment, create some growth abroad, unload industrial overcapacity and cement influence and ownership of assets. There is a clause in case of defaulting the repayment of the loan, greater control over assets will be transferred to China. China uses resource backed model where a loan for infrastructure is to be repaid in the form of exports of agreed natural resource over time. There is a speculation that the Tajikistan ceded its territory in Pamir region (about 1,137 sq. km) in 2011 due to its inability payment of the loan taken for renovation of Dushanbe-Chanak highway.

Khojimuhammad Umarov argues that why Chinese business is more active in mining and gold extraction in Tajikistan due to their knowledge about “Game rules” in this industry. He states that in China is domestically for transparency and accountability, but abroad in Tajikistan they are expanding business using corrupt means, as Maria Adele Carai coins “adaptive governance.” Bribing including payment to foreign government officials and officials of international public organizations is considered a criminal offence in China, however anti-corruption laws implementation outside of China is far from perfect.

They don’t listen to World Bank Doing Business rating, they just take risks and do and work with local people, fixers and senior government officials. Jacob Mardell observed while travelling to Tajikistan in 2019 an arising group of fixers – lawyers who help Chinese individuals and businesses and play as an intermediate between China and Tajik government. According to one of the fixers, “as a foreigner you need a krysha (roof) to work in Tajikistan – a local can protect you”, Chinese people work with local people, they know how to work – who to bribe – whom to make connections.

To fight with corrosive capital will not be an easy task for a developing state like Tajikistan. It will have to improve the quality of institutions and ensure the rule of law, improve governance. It will be especially challenging when the sole donor of infrastructure investment is not the traditional donor who provides aid on conditionality of good governance reform.

In Tajikistan it’s necessary to scrutinize the BRI loan and credit projects to assess possible risks, governance and ecological impact and minimize corruption, these funds should be returned eventually. Public discussion about equality, justice, governance and equal business opportunities should be hold beneficial not only for Tajikistan future but for China’s BRI trust, image and legitimacy. More professional civil servants with mortal integrity are needed to fight against corrosive capital. Civil society activists need to strengthen their oversight on investment and aid implementation. Civil society in Tajikistan was significantly circumscribed. For building huge infrastructure objects, the country should have a greater regulation, transparency, law enforcement, integrity of elect officials and member of the parliament, and civic activism so collectively can overcome the negative externalities caused by adaptive governance approach promoted by China

The complicated geopolitical situation that has arisen as a result of the war in Ukraine, as well as large-scale Western sanctions imposed on Russia and Belarus has raised a new question about how the Belt & Road Initiative will develop in the future. This is especially of concern to Kazakhstan, which has managed to take an important role in transcontinental routes. The blocking of the Russian, Belarusian and Ukrainian directions puts an end to the most important routes going to Europe. Bypass routes through the Caspian or the Middle East are working, but the cost of transportation and the labor costs of the trans-Caspian route are significantly inferior to the sea routes.

Under these conditions, BRI partners, including Kazakhstan, are setting the task of cultivating new points of growth in such areas as artificial intellect, big data, digital finance, e-commerce, and green energy. The implementation of this approach largely explains the sharp increase in trade turnover between Kazakhstan and China in 2022. The trade turnover between Kazakhstan and China in January-July 2022 reached $13.5 billion, which is 38.3% more than in the same period in 2021, which was then $9.7 billion. Moreover, the volume of Kazakhstani imports for seven months of 2022 from China is a record result for such a period: in 2022 Kazakhstani imports from China amounted to $5.5 billion, with an increase of 22.6% compared to the same period in 2021. Over the seven months of last year, imports amounted to $4.5 billion. The main growth in imports is observed in the commodity group “machinery, equipment, vehicles, devices and apparatuses” – by 19.4% (for the seven months of 2022 – $3.1 billion, for the seven months of 2021 – $2.6 billion).

In general, the program for development of IT industry within the framework of BRI has been called the Digital Silk Road (DSR). The DSR is a government initiative where Chinese companies are key players. Chinese telecommunications giants such as Huawei and ZTE, as the largest telecommunications service providers and major 5G technology providers, are successfully achieving their goal of dominating the 5G market worldwide. Leading Chinese video surveillance companies such as Hikvision, Dahua and Huawei are among the main providers of surveillance services and technologies in developing countries, including Kazakhstan. According to a Fudan University report, it is noted that over the past two years, 201 Chinese companies in the digital field have completed 1,334 overseas investment and cooperation projects, 57% of which are related to DSR. In general, by developing next-generation telecommunications infrastructure, smart city technology and surveillance systems, data centers and storage infrastructure, and other high-tech tools, Beijing is seeking to increase its role in Internet telecommunications governance and cyberspace regulation.

The rapid development of the IT sector in Kazakhstan, on the one hand, has a positive impact on the economy and makes the country more attractive for investment. On the other hand, the transfer of Chinese surveillance and censorship technologies is worrisome, and could further shrink civic space in Kazakhstan. The greatest concern is not only the import of Chinese technologies, but also the possible import of Chinese approaches to organizing the work of smart cities, which can now be called cities of surveillance and censorship. Smart cities built on Chinese surveillance technology promise increased security and convenience for residents, but at what cost?

The examples of China itself are widely known. The most well-known measure of the Chinese government “to combat cybercrime” (in fact, for content restriction and total surveillance) is the so-called Golden Shield, or Dragon Firewall. It is a nationwide electronic barrier that filters and controls information flows in such a way that all Internet user data in China passes through a limited number of checkpoints (gateways), operated by a limited number of Internet providers. Since 2006, the entire Chinese segment of the Internet has come under the control of this state system.

In Kazakhstan in the past few years, has been actively implemented the Smart City projects, within the framework of which CCTV cameras are installed on the streets of cities to ensure law and order and comply with traffic rules. For video surveillance systems implemented in Kazakhstan, Chinese products are mainly used.

Since 2017, Sergek hardware-software complexes (which means “vigilant” in Kazakh) have been operating in the biggest cities of Kazakhstan, which are supplied by Korkem Telecom (a subsidiary of Open Technologies Group). These companies are Kazakh, but Korkem Telecom’s technical partner is Chinese Dahua Technology.

Sergek is an intelligent video monitoring, analysis and forecasting system that includes:

– A network of video recording modules that control key areas of the urban space – highways, squares, road junctions, house adjoining areas;

– Image recording and recognition system;

– Intellectual system of information processing and analysis.

Sergek has computing power and special software that allows real-time processing of significant amounts of information. Hikvision, another Chinese manufacturer of CCTV cameras and security equipment, has been operating in Kazakhstan since 2015. Hikvision cameras in Kazakhstan monitor road safety as part of the Smart City projects, and are also used in the Unified Video Monitoring System of Almaty. This system should implement situational video analytics: recognize faces and license plates on cars.

In September 2019, Reuters, citing unnamed intelligence sources and security experts, reported that hackers working for the Chinese government had hacked telecommunications networks in several countries, including Kazakhstan, to track down Uyghur tourists in Central and Southeast Asia. China seeks to monitor Kazakhstan because it is the historical homeland of many residents of China’s Xinjiang Uygur Autonomous Region; over the past few years, Chinese authorities have arrested more than one million people in Xinjiang.

China has a lot more technical capabilities than it seems at first glance, and it’s not just about cameras, but also about Chinese-made mobile devices that are in high demand in Kazakhstan due to their low price, Kazakh cybersecurity experts say. Kazakhstani researchers consider the risks from the penetration of Chinese surveillance and censorship technologies to be very high, and point out that this aspect of the implementation of DSR initiatives occupies an undeservedly small place in public discussions on the topic of BRI in Kazakhstan.

NB

In January 2022, in Kazakhstan broke out protests, related to rising gas prices, which very quickly turned into political protests. A large number of citizens were detained – about 7,000 people, according to the Ministry of Internal Affairs – who were detained based on data from street surveillance cameras. In response to an official request to the Ministry of Internal Affairs whether Face ID cameras and artificial intellect systems were used during the detention of protesters, the Ministry of Internal Affairs replied that such systems were not used. However, given the scale of the protests, and the large number of detained participants, this is hard to believe.

China’s acceptability in Tajikistan comes after Russia – the Tajik people and the Tajik government; why Russia is popularly accepted as a significant or dominant power – is clear; China comes after Russia. According to the Kenan Institute (based on a Central Asian Barometer survey), 54% of people strongly favor/support (in contrast, 73% strongly favor Russia and 40% strongly prefer the United States); 30% are somewhat favorable, and only 13% don’t know or refused to answer; 20% of people think that China is a reliable and friendly great power – it’s significant considering the number of percentages for Russia is 78% and for the US is 2%. Elizabeth Wood and Thomas Baker summarized the Central Asian Barometer Survey on Public Perception of China in Central Asia conducted from 2017-to 2021:  China’s public diplomacy wins the Tajiks’ admiration through culture, language, and civilization; the degree to which citizens and leaders view the PRC favorably could also be instrumental in advancing other economic, geopolitical, and security interests.

Tajikistan presents high approval rates for the leadership of the PRC (63 percent on average). In contrast with the USA, it is less favorable (35 percent on average). Tajikistan is the case of China’s “extract” strategy, in which there are significant economic interests for the PRC, and the PRC has maintained high approval rates there.

Favorability ratings may indicate appreciation for a foreign power’s norms, rules, and values and China’s engagement to contest the US hegemony in the region. According to the Gallup World Poll, 2006-2020, based on AidData Analysis: How do citizens and leaders in SCA countries view the PRC versus other great powers? Consistently favorable (Pakistan and Tajikistan), China is perceived in Tajikistan as a great friend as it offers help without strings attached (this narrative was established by president and elite circles). The State imposed this narrative which welcomes blind emerging dependency on Chinese investment. Tajikistan. This will see Chinese investment in all spheres of economy. The leading government parliament-based newspaper Narodnaya gazeta described China in 2014 as “Good neighbor, true friend and reliable partner”. The leading scholars, experts on China in Tajikistan, Abdugani Mamadazimov and Rashid Gani Abdullo express their optimism that the Chinese vector of Tajik foreign policy as the “path toward future well-being of independent of Tajikistan”.

“China Threat theory” is non-existent in public spheres in Tajikistan. Some negative publications usually go around environment problems of renovation and construction of heating plants in Dushanbe, and about invasion of Chinese workers, leasing of agricultural land to Chinese farmers. Rustam Haidarov warns that the entry of Chinese farmers is only the first step towards something bigger: “It is China’s strategy to resettle its people in different countries. It’s China’s policy,” he said. “They occupy slowly, cautiously. They realize their own goals in Tajikistan and affect our economic policy. In time this will lead to an influence in politics”. Asia Plus, and Ozodi, covered the issue of disappearance of flora and fauna – snakes, turtles etc.

In Tajikistan construction sites, where Chinese labor are present. Unfortunately, with the lack of reporting about BRI, or even the lack of any systematic discussion of challenges and risks characterize Tajikistan in BRI, there is no public discussion and awareness about China’s BRI rapidly increasing control of resource extraction in Tajikistan. The general public has limited access to information related to Chinese involvement.

China’s “Going Global Strategy,” launched in 1999 to encourage Chinese investment abroad, has boosted Chinese overseas investment and lending. Since then, China has become one of the country’s largest creditors. China began allocating nominal sums for grant assistance. However, in 2016, China emerged as one of the largest donors to international development assistance, accepting the part of grant-based foreign aid engagement with developing countries. China’s lending abroad policy typically involves relatively high interest rates and short maturities, in contrast to the mostly concessional lending terms of other official lenders such as the World Bank, IMF or OECD governments. For the 50 most indebted recipients (located in low- and middle-income economies) of Chinese direct lending, the average stock of debt owed to China has increased from less than 1% of GDP in 2005 to more than 15% of debtor country GDP in 2017. For these countries, debt to China now accounts to 40% of external debt, on average.

China is pursuing “debt-trap diplomacy,” which involves luring poor, developing nations into agreeing on unsustainable loans to follow infrastructure projects. When they face financial difficulties, Beijing can seize the asset, thereby expanding its strategic or military reach. China lends money to countries, which must surrender control of vital assets if they cannot repay their debts. Sri Lanka is a good example of debt-trap, having taken significant credit for a large port project in Hambantota with Chinese investment years ago. In July 2017, Sri Lankan government and CMPort entered into a lease agreement, which saw the port leased for $1.1 billion, which Sri Lanka used to pay down other debts and increase foreign reserves. In exchange for debt relief, China offered to help. No right of the port was transferred, and no debts were forgiven. Colombo was provided with liquidity to repay Western creditors; the obligation to China remained the same as reported by Chatham House.

The researchers at AidData research lab developed a global dataset on China’s official development spending from 2000 to 2014. It has identified more than $350 billion in Chinese foreign aid and other forms of state financing through a thorough search of official public sources and verified by media and other additional sources. In official debt statistics, half of China’s lending to developing countries is not recorded (hidden debts). It is frequently kept off government balance sheets, rather than going directly from the government to the government, and directed to state-owned businesses and banks, joint ventures, or private institutions. Sebastian Horn, Carmen M. Reinhart, Christoph Trebesch at the US National Bureau of Economic Research went further and developed dataset spanning from 1949 until 2017, and covers a total of 1,974 Chinese loans and 2,947 Chinese grants to 152 emerging or developing countries, with total commitments of 520 billion US$. The Chinese loan projects do usually share some key characteristics:

1) All Chinese lenders’ contracts, including the debt itself, especially from Eximbank contain confidentiality clauses that prevent borrowers from disclosing their contents;

(2) A typical “No Paris Club” clause is present in the Chinese contract sample and are found in 43% of China Development Bank and 81% of Exim bank projects contracts;

(3) Collateral or security clauses to ensure that the lender has cash available in the event of default. Security arrangements are used in 75% of China Development Bank’s and 22% of Exim Bank’s contracts, whereas only 7% of OECD bilateral creditors and 1% of multilateral creditors set do so.

(4) Escrow or special accounts are used to secure repayment and are used by Chinese state-owned banks; Throughout the life of the loan, sovereign borrowers agree to maintain and fund bank accounts at the lending institution or at a bank “acceptable to the lender,” as well as route project revenues and cash flows through these accounts that are unrelated to the project funded by the loan; (5) Cross-default clauses are present in 100% of China Development Bank’s and Exim Bank contracts, “When the debtor defaults on its obligation to Creditor B, a cross-default clause allows Creditor A to pressure the debtor and protect its claim priority. If the debtor misses a payment to B, both A and B would have the ability to demand entire loan and accumulated interest repayment at the same time under a creditor-friendly version of the clause. A creditor may retain the right to cancel the loan and demand immediate repayment under various circumstances, including political and economic developments not directly connected to the lending relationship. Once the contracts are signed, the debtor’s exit options are very limited”.

After the Central Asian republics gained independence in 1991, the countries began to diversifying their infrastructure-based project by receiving grants and loans and external debts from international financial institutions as well as China; Each country of the Central Asian region total external debt had risen, making China the largest creditor in Asia: for example, Kyrgyzstan – 1.7 billion (40% of the total); Tajikistan – 1.2 billion (48 per cent of the total); Why is it easier and faster to get credit from China? A former president of Kazakhstan said: “China doesn’t dictate how we should live compared to Western creditors? What structural changes must be made before the Chinese credit becomes available? We will help you to become like us, China”.

However, China does impose some conditions on Central Asian countries: the recipient nations should only use Chinese equipment types, and labor for infrastructure projects should also come from China. Conditionalities work and they provide Chinese banks and companies such as Tebian Electric Apparatus (TBEA), China Road and Bridge Corporation (CRBC), China National Petroleum Corporation (CNPC) and others with access to Central Asian natural resources. One China policy means the recipient nation must recognize mainland China as the only legitimate Chinese government, and the recipients also cannot have official relations with Taiwan. In addition to one-China policy, Beijing expects recipient countries to refuse supporting the Uygur cause, collaborate in the extraditing the dissidents, and possibly expects support for China at the UN Security Council, as reported by Sherzod Shamiev.

Kyrgyzstan and Tajikistan (including Djibouti; Laos, Maldives; Mongolia, Montenegro; Pakistan) were all identified as highly indebted countries and unsustainable with possibility of falling into a debt-trap in a report in 2018 by the Centre for Global Development, meanwhile in top 5 countries located in a worst debt situation, Kyrgyzstan is enlisted (along with Djibouti, Tongo, Maldives, Congo). Export and Import Bank of China is the country’s largest single creditor, with reported loans totaling $1.5 billion by the end of 2016, or roughly 40% of the country’s total external debt. Kyrgyz and Chinese authorities are discussing the construction of a hydropower plant network, a China-Kyrgyzstan-Uzbekistan railway system, additional highway development, and the completion of the Central Asia-China gas pipeline. Risk of debt distress, Kyrgyzstan is still vulnerable to shocks due to a significant exchange rate depreciation, which is compounded by the scaling up of public investments.

Tajikistan is one of the poorest countries in Asia, and the IMF and World Bank have classified it as having a “high risk” of debt distress. The total foreign debt of the country is 3.2 billion US dollars which is 38.2% of Gross Domestic Product. Sputnik Tajikistan reports that it is coming to the critical point – 40% is defined in the country Strategy in Public Debt Management. Meanwhile, in a joint IMF/World Bank Debt Sustainability Analysis A public debt-to-GDP ratio above 25 per cent of GDP is considered. in 2006 China didn’t plan in Tajikistan debt structure, however by 2016 the country had borrowed more than US$1.1 billion from China. Tajikistan still plans to increase its external debt at concessional and non-concessional rates to fund infrastructure investments in the power and transportation sectors, including those supporting BRI. The single largest creditor in Tajikistan, China, accounts for nearly 80 percent of the total increase in Tajikistan’s external debt. Tajikistan in return for constructing phase one of Dushanbe coal plant granted TBEA rights to explore and mine gold deposits at the Eastern Duoba mine and Upper Kumarg mine. Tajikistan has swapped its natural resources to complete an initial phase of the coal plant, thus opening a risky dynamic of funding infrastructure projects by giving away licenses to mine precious metals.

Since Joe Biden came to power, relations between the US and China have been strained. Unlike Trump, the Biden administration directly opposed China’s policies in relation to Taiwan, human rights abuses, and economic and technological spheres. On November 14, Joe Biden met Xi Jinping face-to-face in Bali, Indonesia, on the sidelines of the G20 Summit. It was the first time since his presidency that the US president met with his Chinese colleague in person after numerous video and written correspondence. The meeting lasted for 3.5 hours and, as publicly announced, touched upon the following issues: US-China strategic competition, the Taiwan issue, the Russian-Ukrainian war, North Korea’s missile tests, and further grounds for improving relations in various areas, comprising technology, trade, climate change, and so on. A delegation of nine government members accompanied each side: while Biden showed up with senior officials including Antony Blinken, Janet Yellen, Jake Sullivan, Kurt Campbell, Daniel Kritenbrink, and members of the National Security Council, Xi Jinping brought all his trustees, who were promoted during his reelection for the third term a few weeks ago. For more information about the high-level officials traveling with Xi Jinping, see the previous blog “Inside the 20th national congress of the Chinese Communist party: What to expect”.

While shaking hands with his American counterpart, Xi Jinping did not seem very enthusiastic and avoided eye contact, which clearly manifests tense relations between the two states. Both parties realized that it was impossible to work everything out in one meeting; therefore, they agreed to frequent discussions. According to the white house readout, to keep the communication and talks dynamic and systematic between Washington and Beijing, the US president will send the US Secretary of State Antony Blinken to China for the first time without specifying the exact dates of the trip. Moreover, Biden mentioned the possibility that National Security Adviser Jake Sullivan and Defence Secretary Lloyd Austin will participate in negotiations with their Chinese colleagues as well. Since the meeting, the US president has been very convinced that no new cold war threatens humanity, as specifically outlined during his press conference.

The talks about Taiwan had a major significance due to the deteriorated US-China peace dialogue after Nancy Pelosi visited Taipei in August 2022. The two states even threatened one another with military interference. Beijing initiated arms mobilization while frequently violating Taiwan’s airspace and pressuring its economy. During the meeting, Biden assured that the official position of the US government has not changed, it seeks “peace and stability”, though it is ready to intervene conventionally in case the PRC invades Taiwan. Nonetheless, the president highlighted that such an occasion is unlikely to happen in the nearest future despite the warnings coming from US officials about Beijing’s plans to seize Taiwan several weeks prior to the Xi-Biden meeting. On the contrary, Xi Jinping called Taiwan the PRC’s core interest and the “first red line”, once again pinpointing that no such thing as “Taiwan Independence” exists within the policy of maintaining peace and stability across the Taiwan Strait and it is directly related to state’s internal affairs. Therefore, the contradictory statements of the leaders of the two countries do not prevent us from losing grip over further escalation. Indeed, both parties agreed on maintaining peace and stability in Taiwan; however, none have specified how to ensure these incentives.

More common grounds were found during the discussion of the Russian-Ukrainian war. Both presidents agreed that nuclear war should never happen and condemned the threat of using nuclear weapons in Ukraine. They also decided to continue talks and avoid further confrontation. In this respect, President Biden also stressed the constant provocations from DPRK concerning its continuous pursuit of nuclear weapons development and urged the PRC to try to talk with North Korean leaders regarding acting more responsibly.

Even though both parties clarified that there would be no joint statement after the meeting, certain tendencies have still been identified and left nobody wondering that the US-China struggle for power and world domination will continue. Nevertheless, both parties prefer to call it a competition rather than a conflict. As stated by Joe Biden,

“The United States will continue to compete vigorously with the PRC, including by investing in sources of strength at home and aligning efforts with allies and partners around the world”.

Despite certain confrontations, Xi Jinping seeks to stabilize the situation in the international arena after the turbulent year of his reelection. According to his statement,

“It should not be like you win and I lose, and I survive and you die…Both sides should view each other’s domestic and foreign policies and strategic intentions correctly and establish the tone of dialogue exchanges rather than confrontation.”

Both leaders intend to ease the tension between their respective states by foreseeing coexistence in competition.

A Smart City is a city built on the combination of endowments and activities of self-decisive, independent, and aware citizens. It follows strategies through the innovation and use of its natural resources, the city areas that collect large amounts of data and use it to improve city operations. Developers can produce applications based upon managed data to be converted into insights and insights into tools. These applications can serve as a form of public-private partnerships and create opportunities for the public sector, private sector, and the citizens. Privacy International  brings some clearance to the definition of “Smart Cities” based on global multinationals – For IBM – it is about finding “new ways for the city to work”; For Google’s Alphabet, “building innovation to help cities meet their biggest challenges.”; For Siemens, “open-air computers” make them “healthier, more comfortable, and more relaxed.”

The development of “digital cities” or “smart cities” in China started in 2011 with the adoption of the 12th Five-Year Plan, when it was announced the intention “to accelerate the construction of new-generation IT infrastructure, mobile communication networks, internet infrastructures, digital and television broadcasting networks, satellite communication facilities, and an ultra-high-speed, large capacity, and brilliant national trunk transmission network, broadband connection throughout urban and rural areas to strengthen interconnectivity.”

This is the basis of modern China’s smart cities and citizens’ surveillance.49% of the smart cities are located in Asia. Smart Cities projects are expanding in Central Asia; the main countries and tech companies introducing them are tech companies from the People’s Republic of China.

In Central Asia, the countries are accelerating the development of safe cities to focus on security and order with Chinese assistance in developing and financing them: Tajikistan in 2013, Kazakhstan in 2007, Kyrgyzstan in 2019; In China in the World index developed by Taiwan-based Doublethink Lab, Central Asian countries, at least Tajikistan, Kyrgyzstan, and Kazakhstan collaborated (such as data collection or exchange agreement, or adoption of related hardware) with the PRC government or PRC-connected entities on facial, voice recognition or other applications involving biometrics achieved by AI.

Xinxiang became a kind of frontline laboratory for “Smart City” and surveillance technology, where start-up and tech companies first test surveillance technologies. Xinjiang – a model of digital repression that China has developed first and foremost for security reasons and for enabling severe human rights violations and developed many novel forms of surveillance, making it a world leader in repressive uses of digital surveillance such as facial recognition and biometric data collection integrated widely in the Xinjiang-Uighur Autonomous Region in western China. In 2017, the government officials in Xinxiang started collecting Uighurs, 3D portraits, voiceprints, fingerprints” and iris scans from all residents of ages 12 and 65 in the framework of a free public-healthcare program called Physicals for All and collected.

The military personnel check the residents’ smartphones for banned mobile apps and require each vehicle to have a GPS tracking device.  Smart cities in Xinjiang Uighur Autonomous Region (XUAR) already form part of the state authorities’ systematic surveillance and repression of Muslim ethnic groups in the region. Facial and gait recognition, coupled with CCTV outside mosques, and powered by AI and analytics technology, enables authorities in Xinxiang to maintain a “digital police state.”

Famous tech company Huawei worked with facial recognition start-up Megvii in 2018 to test an AI camera system that could scan faces in a crowd and estimate each person’s age, sex, and ethnicity. The plan could trigger an ‘Uyghur alarm’ if it detected an Uyghur, flagging them to China police, where members of the group have been detained en-masse in the re-education camps. One of the authorities in Uighur studies, author of The Xinjiang Papers – Dr.Adrian Zens, an expert on Xinjiang, says that the companies like Huawei can develop such systems in regions like Xinjiang in tandem with the security services, which can enable intrusive surveillance – makes surveillance accessible and possibly palatable in other nations including Central Asia.

Electronic Frontier Foundation (EFF), based on a database leak discovered by Victor Gevers in MongoDB from SenseTime, which provides video-based crowd analysis and facial recognition technology, reported about live-tracking the locations of about 2.6 million Uighur residents of Xinjiang: the records include individuals’ national ID number, ethnicity, nationality, phone number, date of birth, home address, employer, and photos. Within 24 hours, 6.7 million individual GPS coordinates were streamed to and collected by the database, linking individuals to various public camera streams and identification checkpoints associated with location tags such as “hotel,” “mosque,” and “police station.” Police in Xinxiang force the residents (targeting Uyghur Muslim population) to install the mobile app called JingWang (Citizen Safety) developed by police forces from Ürümqi, Xinjiang’s capital. Urumqi Municipal Public Security Bureau launched the “People’s Safety” app on April 25, 2017, as information reporting software used by the municipal public security bureau to take the initiative and technical attack and successfully develop the grass-roots and ordinary people. The app (spyware) sends the government a user’s WeChat and Weibo chat records and the device’s IMSI and IMEI and Wi-Fi login details. Adam Lynn from Open Technology Fund confirmed that the JingWang app significantly lacks the security to protect the private, personally identifying information of its users: The app extracts a phone’s IMEI, MAC Address, manufacturer, model, phone number, subscriber ID, and filenames with hashes for all files stored on the person’s device; Jing Wang scans for specific files stored on the device, including HTML, text, and images, by comparing the phone’s contents to a list of MD5 hashes. A hash is a digital fingerprint of a piece of data. Full Jing Wang Report of OTF is available here.