Decoding transatlantic relations with Beijing.

POLITICO China Watcher

By STUART LAU

with PHELIM KINE

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GOOD TUESDAY MORNING. This is Stuart Lau in Brussels. Just before this weekly ritual of penning China Watcher, I spent a wonderful Sunday evening at a Wong Kar Wai film festival. It does make me a little nostalgic about the old Hong Kong. Phelim Kine will be with you from the U.S. on Thursday.

On our radar today is the announcement from NATO that North Korean troops sent to fight with Moscow are now in a Russian region partly controlled by Ukraine. We’ll have more on that — and why China won’t enjoy listening to the new batch of top EU officials in their impending confirmation hearings.

Unhappy Halloween: The cops are for real in their crackdown on costumed revellers, in case you’re wondering about their not-so-fancy-dress uniforms in Shanghai. The BBC has more.

MEET THE NEW HAWKISH EU COMMISSION

NEW TEAM TALKS TOUGH: As Ursula von der Leyen prepares to start her second term as president of the European Commission — the EU’s executive body — we take a look at how critical her incoming commissioners are on China, as they await European Parliament hearings beginning next week. These views are based on their initial written statements of their positions.

ON FOREIGN POLICY: The EU’s foreign policy chief-designate Kaja Kallas is set to reshape EU-China relations. She telegraphed what could be perhaps the most significant shift when she stopped short of repeating in full the EU’s official line on China, which traditionally calls calls the country a “partner, economic competitor and systemic rival” all in one.

Instead, she focused on the last aspect only. “I will … spare no effort in defending the EU’s values and protecting the EU’s interest vis-à-vis systemic rivals. My priority in engaging with China will be to safeguard the EU’s geopolitical and economic security,” she wrote to MEPs.

ON BEIJING-MOSCOW: Kallas called China’s support for Russia and the EU’s structural imbalances with China “the most pressing challenges here.” She also named “Russia, Iran, North Korea, and partly China” as “malign” actors that want to weaponize interdependencies with the EU.

ON CLIMATE/GREEN GOODS: “The Commission has taken important steps to address dependencies on China, but more is needed,” says Wopke Hoekstra, who’s running to be re-confirmed as the EU’s climate commissioner. I have the full story here.

ON TECH: The EU’s next tech and security chief Henna Virkkunen will have the critical mission of boosting “secure” and “trustworthy” connectivity — which is code for Chinese-free networks — in line with the bloc’s 5G security toolbox and overall “de-risking” strategy, according to her mission letter.

For Virkkunen, this certainly hits home too, as her country Finland has felt the pressure of a telecoms industry struggling to reconcile global competition with security concerns. (Mathieu Pollet has full story here.)

WITH FRIENDS LIKE KIM

NATO NOW HAS EVERY REASON TO LOOK EAST: China has for years been asking NATO to stay away from the Indo-Pacific. This week, though, North Korea is doing everything it could to make sure the opposite happens.

KIM’S BATTLE-READY BOYS NEAR UKRAINE: NATO chief Mark Rutte confirmed Monday that North Korean soldiers deployed to Russia are now active in Kursk, the Russian region partly controlled by Ukrainian troops. Rutte made the statement soon after a meeting with South Korea’s top intelligence officials.

Rutte sends warning: That marks “a significant escalation in [Pyongyang’s] ongoing involvement in Russia’s illegal war” and “a dangerous expansion of Russia’s war,” he added. The Ukrainian incursion into Russia, which began in August, was aimed at diverting the attention of Russian invading forces in eastern Ukraine.

Ukraine’s watching: Ukraine’s state resistance center reports that more than 3,000 North Korean soldiers are in the Kursk region, our Kyiv correspondent Veronika Melkozerova writes in to report. “Personnel are transported mainly at night. Together with them, employees of the DPRK embassy arrived at the training ground, acting as translators and observers of the mercenaries,” the center said.

We can see you:While it remains unclear when they will be sent to fight, “the locations of the militants are known,” it added.

EU READY FOR DEAL WITH SEOUL: European Commission President von der Leyen weighed in. On Monday, following a call with South Korean President Yoon Suk Yeol, she announced the “imminent launch” of a new EU-South Korea Security and Defence Partnership pact. “The launch of this partnership is timely and its logic more valid than ever,” von der Leyen said.

LONDON WANTS RAPPROACHEMENT

CHINA HAWKS BLAST RESET: In Britain, Conservative backbenchers gave Foreign Secretary David Lammy both barrels in parliament yesterday over his trip to Beijing and the new government’s wider rethink of its China policy, my colleague Bethany Dawson writes in to say.

IDS unleashed: Ex-Tory leader Iain Duncan Smith bagged an urgent question and claimed there is now a move afoot in the Foreign Office “to lift British sanctions on Chinese officials responsible” for the “brutal genocide in Xinjiang” in exchange for easing Chinese sanctions on outspoken British politicians — including IDS himself. “I for one would not accept such a shameful deal at any price,” the Conservative MP thundered.

Not impressed: Lammy shot back that he is “not going to take any lessons from the opposition on how to handle China,” pointing out that IDS was part of David Cameron‘s government during the “golden era” of “drinking pints with President Xi.”

BUT THE RESET IS COMING: Britain’s business chief is “open” to reviving a key trade dialogue with China as the new U.K. government ramps up its engagement with Beijing after years in the deep freeze, my colleague Graham Lanktree reports. Business and Trade Secretary Jonathan Reynolds told Graham that trade is an area “where cooperation is possible with China.”

Complicated relationship:“It’s a relationship where sometimes you’ve got to have quite difficult conversations because you’re unhappy with moves on the Chinese side, but at the same time, where co-operation is possible with China, trade is [a] space where you’d expect that to be taking place,” Reynolds said.

TRADE AND TECH CORNER

DON’T DIVIDE US: China has asked the EU to stop negotiating with individual Chinese car makers on its incoming anti-subsidy duties, my ace colleagues Koen Verhelst and Camille Gijs write in.

Talk to the state: Instead, Beijing wants Brussels to talk to the state-backed China Chamber of Commerce for the Import and Export of Machinery and Electronics, or CCCME.

Trust busting: “If the EU conducts price commitment negotiations with some companies separately while negotiating with the Chinese side, it will shake mutual trust,” the ministry said. It warned such an approach will also “interfere with the overall process of consultations, and will also add more administrative costs to the subsequent implementation and supervision of the price commitment agreement.”

EU proposal on the table? A Chinese business insider told Camille and Koen that the European Commission put a proposal on the table on Friday on potential minimum import prices for made-in-China electric vehicles. A spokesperson for the European Commission declined to comment.

Happening today: Finnish President Alexander Stubb will meet with Chinese President Xi Jinping today as part of a large state visit that runs until Thursday.

And later this week: Slovakia’s Prime Minister Robert Fico will visit China from Thursday to November 5 (the day of U.S. presidential election), the Chinese foreign ministry said Monday. His trip was postponed after an assassination attempt.

DUTCH WARNING ON NEW CHINESE HACKING CAPABILITY: Dutch counter-terror agency NCTV said in its annual cybersecurity report that China’s state-backed cyberattacks were on the up, with the capability to potentially launch sabotage activities if it so wishes. (H/t my colleague Sam Clark.)

“Until now, the Chinese cyber threat has mainly consisted of possible espionage, but a striking feature … is that Chinese hackers may also have been preparing for sabotage, and not only for spying. As yet, there have been no known activities from this program against Europe. However, Chinese capacity in this field is growing rapidly, and could be deployed anywhere in the world within a relatively short time.” Read the full report.

TRANSLATING WASHINGTON

CHINA DENIES HACKING TRUMP, VANCE PHONES: Beijing has dismissed allegation that Chinese state-backed hackers targeted the cell phones of Republican presidential nominee Donald Trump and his running mate, Sen. JD Vance. Those accusations reflect how the U.S. “ created false narratives about the origin-tracing of cyberattacks to frame up China,” Chinese Foreign Ministry spokesperson Lin Jian said Monday. Authorities notified Trump’s campaign last week of the potential breach. It was unclear what information, if any, was accessed, but the former president frequently uses his personal iPhone to post on social media, make phone calls and send text messages to billionaires and lawmakers — all private communications that foreign adversaries would be eager to get their hands on. POLITICO’S Meridith McGraw, John Sakellariadis and Maggie Miller have the full story here.

BEIJING BLASTS THE CIA, SPACE FORCE: China’s Foreign Ministry had harsh words for both the CIA and the U.S. Space Force on Monday. Spokesperson Lin Jian responded to allegations of Chinese espionage efforts by accusing the CIA of “using all kinds of despicable methods to steal other countries’ secrets, interfere in their internal affairs and commit subversion…[and] has never stopped its espionage activities against China.” Lin also scolded the U.S. Space Force for trying to “turn outer space into a battlefield” and for threatening “the common security and development rights and interests of other countries in outer space.” Neither the CIA nor Space Force immediately responded to requests for comment.

‘COUNTERMEASURES’ COMING FOR TAIWAN ARMS SALE: Beijing has warned of unspecified “countermeasures” in response to the U.S. government’s latest sale of weaponry to Taiwan. That deal reflects the Biden administration’s efforts “to use Taiwan to contain China and help advance ‘Taiwan independence’ agenda by arming Taiwan,” China’s Foreign Ministry said in a statement Saturday. The equipment includes a $1.2 billion purchase of three National Advanced Surface-to-Air Missile System medium-range air defense systems priced at $1.2 billion and an $828 million “Radar Turnkey Package,” the State Department said on X Friday. Taiwan’s Foreign Ministry hailed the sale on Saturday as proof of U.S. “unwavering support for strengthening Taiwan’s defensive resilience and deterrence capabilities.”

ECONOMIC WORKING GROUP TALKS ‘LIQUIDITY CHALLENGES’: The U.S.-China Economic Working group convened in Washington Friday to discuss areas of macroeconomic cooperation and concern. The meeting which included Treasury Secretary Janet Yellen, Treasury Under Secretary for International Affairs Jay Shambaugh and China’s Vice Minister of Finance Liao Min entered “pragmatic and constructive communication” on issues including “liquidity challenges” in developing countries, China’s ambassador to the U.S., Xie Feng said on X. It wasn’t all smooth sailing — Shambaugh raised U.S. concerns, again, about “ China’s industrial overcapacity and its impact on U.S. workers and firms,” the Treasury Department said in a statement.

BEIJING BASHES USTR ON BRAZIL WARNING: U.S. Trade Representative Katherine Tai’s warning to the Brazilian government to be wary of joining China’s Belt and Road international infrastructure investment initiative drew a sharp rebuke from China’s embassy. The Chinese government expressed “vehement opposition” to those remarks and said Tai’s comment “lacks respect for Brazil,” according to an embassy statement Saturday. That scolding followed Tai’s comments last week that Brazil should evaluate possible BRI membership “through a risk management lens.” Those comments are an implicit reference to concerns that China’s investment is fueling unsustainable debt levels in developing countries.

TRUMP UNLOADS ON TAIWAN, AGAIN: Republican presidential candidate Donald Trump made time in his three-hour interview Friday with podcaster Joe Rogan to repeat his criticisms of Taiwan. The self-governing island “stole” the U.S. semiconductor industry and “don’t pay us money for the protection” from a possible Chinese invasion attempt, Trump said during the interview. He also suggested that stiff tariffs on Taiwanese semiconductor imports would be more prudent than investment to rebuild that industry in the U.S. through the CHIPS and Science Act. Trump’s comments echo those he made in a Bloomberg interview published in July. Taiwan’s diplomatic outpost in Washington declined to comment.

IN OTHER HEADLINES

FINANCIAL TIMES: Lunch with the FT with sinologist Li Cheng.

GUARDIAN: China’s kindergarten numbers shrink.

NEW YORK TIMES: Vietnam fishermen bullied by China at sea.

MANY THANKS: To editor Christian Oliver, reporters Mathieu Pollet, Veronika Melkozerova, Eva Hartog, Koen Verhelst, Camille Gijs, Bethany Dawson, Graham Lanktree, Sam Clark, Meridith McGraw, John Sakellariadis, Maggie Miller and producer Catherine Bouris.

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