A German politician’s ties to a Chinese influence network are part of a pattern across Central and Eastern Europe.
Welcome to Foreign Policy’s China Brief.
The highlights this week: A German report reveals ties between a far-right politician and a Chinese influence network, the chair of China Evergrande Group is detained amid a growing property crisis, and China celebrates an extra-long Golden Week holiday.
This week, a German report from news site T-Online exposed a politician in the far-right Alternative for Germany (AfD) party, Maximilian Krah, as having extensive ties to a Chinese influence network. Krah is the AfD’s top candidate in next year’s European Parliament elections, running on the party’s Euroskeptic, anti-immigration, and nationalist platform. He is also a longtime defender of Beijing.
According to the report, several people working closely with Krah received funding from China. His longtime assistant seems to have links to both Chinese dissident groups in Germany and to Beijing—which looks suspiciously like an attempt to infiltrate and report on those movements. Krah denies the report, saying it is “without any proof,” and it seems unlikely to affect his support base.
Krah is hardly the only AfD leader with ties to China, with several other party politicians traveling to the country in the last year at Beijing’s invitation. The far-right party has positioned itself in opposition to Germany’s turn against China, which has come in response to state-sponsored atrocities in Xinjiang and Chinese support for Russia during the war in Ukraine. (Negative sentiment toward China is also on the rise among the German public.)
It’s worth noting that the AfD shares its pro-autocrat attitude with some far-left movements in Germany. But the party’s affinity for Beijing follows a clear pattern across Central and Eastern Europe’s far right, both because of China’s willingness to get out its checkbook and from far-right parties’ general friendliness with Russia, China’s de facto ally. With Beijing increasingly seen as a foe in both Washington and—to a lesser degree—Brussels, parties that defy U.S. and EU influence skew toward the Chinese line.
Hungarian Prime Minister Viktor Orban’s government remains a friend of Beijing, with the foreign minister recently citing “opportunities rather than risks” of working with China. Serbian President Aleksandar Vucic has kissed the Chinese flag. Former Czech President Milos Zeman, who shifted from the left to the populist right, was so close to Beijing that he appointed Chinese state-linked businessman Ye Jianming as an economic advisor in 2017. Sometimes the focus on individual politicians has backfired on Beijing, leading the political opposition to take up the anti-China cause.
By contrast, far-right parties in Western Europe have a mixed attitude toward China. In France, Marine Le Pen—a leader in the National Rally party—has called for a strategy against China in the Indo-Pacific. Italy under Prime Minister Giorgia Meloni is withdrawing from China’s Belt and Road Initiative. In Britain, an increasingly far-right-leaning Conservative Party also has a strong anti-China faction. (To some degree, that’s a result of affiliation with U.S. conservatism.)
From China’s side, cooperation with the far right in Central and Eastern Europe is not a case of ideological affinity, but rather of opportunism. It’s more about which governments will have Beijing, which has led Chinese officials to pour money into marginal groups. But for years, being courted by China was common among mainstream European politicians, from former British Prime Minister Tony Blair to former German Chancellor Gerhard Schröder.
For the most part, China isn’t doing anything particularly sinister in Europe; it’s playing a game of influence just as other great powers do. Although blackmail and bribery are certainly in China’s intelligence toolkit, most of Beijing’s influence campaign uses the same methods that the United States and other countries do: stroking politicians’ egos, offering them the chance of foreign deals, and sometimes providing them with funding. The difference is in the goals—silencing criticism of China’s human rights abuses—not the tools.
The AfD’s rise thus represents a genuine opportunity for China, which cares about Germany more than it does smaller countries such as Hungary or Serbia. (“They would sacrifice all their interests in the region for a slightly better position in a big German federal state like North-Rhine Westphalia,” one source told analyst Edward Lucas last year.) The danger may be not only Beijing’s allies on the fringes in Europe, but also the growing willingness of centrist parties to partner with those allies for power.
Evergrande chairman arrested. The arrests of former China Evergrande Group executives reported last week proved to be just a taster before the main course; last Thursday, authorities detained the property giant’s chair, Xu Jiayin (also known by his Cantonese name, Hui Ka Ya). His wife, Ding Yumei, is rumored to have fled Hong Kong, along with some of the couple’s assets; they may have divorced earlier this year, likely in an attempt to protect her.
Xu, who comes from a poor background, was once heralded as a standard-bearer for China’s new rich; in 2008, he was appointed to the Chinese People’s Political Consultative Conference, a nominal advisory body used as a reward for good behavior for businesspeople. Paradoxically, after being suspended Thursday, Evergrande shares jumped once trading resumed Monday. It’s likely Xu’s arrest was taken as a sign that a state acquisition of the firm is coming soon.
Around 80 percent of China’s property development sector remains privately owned, but that is changing fast. As the debt-ridden giants collapse—and more of their executives are jailed or flee—the government is likely to absorb most of the sector, posing new problems. According to industry insiders, some firms are holding up large-scale construction, anticipating dissolution once the projects are complete.
Holiday time. Golden Week, the weeklong holiday around China’s National Day, is unusually long this year, with workers getting eight consecutive days off—from Sept. 29 to Oct. 6. However, as is usual in China, they will have to work an extra-long week afterward to compensate for the eight days off. Meanwhile, the People’s Liberation Army is celebrating the traditional way: with threats against Taiwan.
Domestic tourism is a rare bright spot in China’s economy right now, although travelers may be operating on tighter budgets than normal. Chinese media is embracing the narrative that outbound travel has boomed since last year, when the country was in the middle of lockdown, but it’s still at less than half of pre-pandemic levels.
Pork market watch. It’s been a wild few years for China’s pork market. The Chinese government considers the meat so significant that it maintains a strategic pork reserve—which was needed after African swine fever devastated livestock in 2018 and 2019 and around 40 percent of pigs died or were culled. That event cost China an estimated 0.78 percent of GDP in 2019; pork prices rose sharply, and then reached new heights in the wake of the COVID-19 pandemic.
Prices fell sharply this year, which was good news for ordinary households but also added to China’s deflationary woes. The price swings are particularly bad for the 98 percent of Chinese swine farms with fewer than 50 animals. The mega-pig farms built in recent years are more resilient. Beijing has stepped in to make bulk purchases for the reserve, pushing prices back up for the moment.
Data law scaled back. China has signaled a retreat on a controversial data security law that foreign firms feared would undermine their ability to operate in the country. New draft regulations indicate key portions of the law, which would have effectively made the transfer of critical data illegal, are weakened or will no longer apply to foreign firms.
The changes could indicate that China’s economic crisis has led to a rethink, at least among figures seen as pro-business such as Chinese Premier Li Qiang. One analyst I spoke to described it as the first real sign of easing security policy in years.
Source : FP