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China-Central Asia’s growing cooperation irks US

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A milestone two-day summit is about to take place from tomorrow (18th and 19th) in the northwest Chinese city of Xian where leaders from five-Asian States will attend and they will be welcomed by the Chinese President Xi Jinping.

Beijing for the first time will host an in-person summit of central Asian leaders with core intention to cement ties in a region, where President Xi is expected to discuss deepening economic and security links with counterparts of the five-Asian countries.

The presidents of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan will discuss ways and means to further strengthen ties among themselves and with China collectively. The core goal behind the summit is to build a strong foundation of cooperation and send a clear message of solidarity, peace and development to the world in such a tense situation.

The world is in dire of need of healing and solidarity. There is hardly any good news, rather the headlines are more on war, political crisis, economic hardship, racism, unhealthy competition, and so on… In such a tense situation, seeing at least leaders from Central Asians under one roof with the leader of China to work for peace and economic development is encouraging.

Diplomatic relations between China and five Central Asian countries goes back to 30 years ago, and since then they developed strategic partnership and tried to open new ways and paths to explore good neighborliness and engage in win-win situations.

The countries have gone through a batch of cooperation projects with China has been the main executor of them as Beijing is running big projects to create a good economic atmosphere for these five countries.

Achievements in exploring cultural communication, initiating people-to-people exchange programs with bigger development projects in oil and gas extrication plus transportation, trade, connectivity, investment and other projects made relations between China and these countries much different and unique. Meanwhile, it is not the way that all is good and there is no external threat to undermine their ties and great gap between them.

US unhappy with China-Central Asian countries growing relations

The Joe Biden administration has never wanted China and the Central Asian countries to come closer and engage in politics, economic, culture, educational and other mutual activities.

The US has recently tried to strengthen ties with Central-Asian states amid the Russian-Ukraine crisis and also to stop the rapid path of progress between China-Central Asian states. It is believed that the US is trying to gain influence in the region to secure its own interest in the region, especially after leaving Afghanistan in a hasty withdrawal process.

The US’s sudden interest in the region speaks loudly of US desperation to find a new alliance, but it seems difficult and the US is no more trust-worthy after looking at what it has done in regards to the situation in Syria, Iraq, and Afghanistan.

China-region ties won’t affect

The irresponsible withdrawal from Afghanistan after 20 years can serve as a concrete example of Central Asian states to avoid falling down to each empty promise of the US. In a clear attempt, earlier this year, US Secretary of State Antony Blinken visited Kazakhstan and Uzbekistan, where he signaled that his country is changing tack in the region.

Bringing the Russian-Ukraine war as an excuse, the US said that Washington is seeking to step up engagement with the region in order to help countries facing economic fallout as a result of the conflict.

The US is undermining the relation between China-Central Asian states, and thinks it can easily penetrate and spoil the process. The US must understand that relations between China and Central Asian states are based on win-win results and mutual trust and respect. No chance stands for the US to affect China’s ties with the region, especially in such a time when it has become clear that the US is only serving its own interests and really doesn’t care about others.

Mutual trust

China wants to promote a new alternative to the global order and the Central Asian region is the best option for that achievement. This year, Xi also visited for the first time Turkmenistan, Kazakhstan, Uzbekistan and Kyrgyzstan, where he said they were “neighbors” connected by common mountains and rivers.

Xi also paid a state visit to Tajikistan where the leaders reached an important consensus to further deepen bilateral ties. During his speech, Xi said that China highly values its friendship and cooperation with these countries and takes them as a foreign policy priority.

To show in reality the policy priority, President Xi’s active involvement and personal engagement to the summit has been delivering the commitment he has to strengthen ties with Central Asian states. The summit also indicates the successful diplomatic efforts and growing regional influence of China by establishing comprehensive strategic partnerships with all five Central Asian countries. The process also demonstrates high levels of trust and cooperation between them.

It is worth mentioning that the summit comes just days before the G7 Summit due to be held from Friday to Sunday in Hiroshima, Japan. Reportedly the G7 member states are expected to discuss issues related to economic security and how to counter China’s economic coercion and ending dependence on China in fields such as semiconductors and critical minerals.

China is unstoppable

China is following its vision of Belt and Road Initiative (BRI) where the Central Asian countries will be benefited the most. No power can stop China from pursuing BRI and the Central Asian states understand the economic and security benefits of the multi-billion dollar project.

Meanwhile, China’s trade with these five countries increased to $70.2 billion in 2022, a great achievement that could be doubled once BRI further implemented. Moreover, as of the end of March, China’s direct investment stock in the five Central Asian countries stood at over $15 billion.

In a press conference, China’s Foreign Ministry spokesman Wang Wenbin had said that the summit, historically known as Chang’an, the starting point of the ancient Silk Road, will further build up the consensus between China and the Central Asian countries on high-quality development of the Belt and Road.

China invests in Afghanistan

Afghanistan is also one of the neighbors of China, and a great contributor to the Silk Road before war. Now when BRI is replacing the Silk Road, Afghanistan under the Taliban rule also showed interest to be part of the project. The Taliban has become a pioneer to promote the BRI and turn Afghanistan toward an economic country through active engagement in the project.

China has shown interest to invest in the gas and oil sectors in Afghanistan, and the spokesman for the Ministry of Mines and Petroleum,  Homyaoon Afghan, said that they have provided essential facilities for the investors.

While thanking Chinese investors, Afghan said that Afghanistan is rich in gas and oil and it will help bolster up the economy once the extraction process starts.

In January, Taliban also signed a contract with a Chinese company to extract oil from the Amu Darya basin, where Afghan Minister of Mines and Petroleum Shahabuddin Delawar, said the first three years will be exploratory and that in this period more than $540 million will be invested.

It is worth mentioning that the Ministry of Industry and Commerce had earlier reported that China had invested and signed contracts worth $2 billion in investment in Afghanistan since the takeover of Taliban in 2021.

ASIA

Afraid of the gun; Taliban supreme leader fears of a coup

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Hibatullah Akhundzada, the supreme leader of the Taliban, has ordered the security institutions that without his permission, “no one can distribute or use the military equipment registered by the ministries of defense and interior, the directorate of intelligence and other independent institutions.”

Experts and analysts have considered this move by Hibatullah as last resort to weaken the position of defense minister, Yaqoob Mujahid, interior minister, Sirajuddin Haqqani and the head of Taliban intelligence, Abdul Haq Wasiq in order to prevent a possible internal coup that was initiated by these three top officials.

In the first article of the order, it is mentioned that no person can distribute military equipment registered in the reserves of the ministries of defense, interior and intelligence, or issue an order to distribute it without the order of Hibatullah.

This decree titled “Regarding the distribution, protection and supervision of registered military equipment”, specifies that whenever an Emirate entity (Taliban-related entity) needs weapons, ammunition, night vision cameras, telecommunications and other military equipment” must receive the approval order from the leader of the Taliban.

Also, in the second article of this decree, it is stated that whenever one of the military departments of the Taliban needs military equipment, it must send its request to Hibatullah’s office in Kandahar.

In the third article of the decree, it is emphasized that if the military equipment was distributed or used without the permission of the Taliban leader before the issuance of this decree, they must be returned to the reserves.

Ministries of defense, interior and head of intelligence department are banned from disturbing military weapons.

According to this article, Hibatullah entrusted the ministries of defense and interior, as well as the general directorate of Taliban intelligence, with the responsibility to report the list of available military equipment to the directorate of registration, and protection of military equipment.

This order of the Taliban leader has been considered as another step in the direction of concentrating more power in the hands of Mullah Hibatullah in Kandahar. Many have seen it as a sign of Hibatullah’s increasing distrust of senior Taliban officials in Kabul. Previously, some senior Taliban officials, including Sirajuddin Haqqani, have openly disobeyed Hibatullah’s order to prohibit photography and filming and have not followed the order of their supreme leader.

(R) Defense Minister Mullah Yaqoob Mujahid and (L) Interior Minister Sirajuddin Haqqani.

Previously, several reports have been published about the sale of military equipment left over from the US troops and Afghan security forces during the republic government. Even the US-elected president Donald Trump, repeatedly mentioned this issue during his election campaigns. Not long ago, the government of Pakistan also announced that the Pakistan security forces have discovered and confiscated a car carrying US weapons smuggled from Afghanistan.

Pakistani media reported that this equipment included M4 assault rifles, night vision cameras and thousands of rounds of ammunition, which were transported in a truck carrying vegetables. Pakistani security officials have estimated the total value of weapons smuggled from Afghanistan in this truck to be 126,354 US dollars.

The cost of US’s remaining equipment in Afghanistan estimated over 7 billion US dollars

The Pentagon has already announced that after the withdrawal of US forces from Afghanistan, about 7 billion dollars of military equipment fell into the hands of the Taliban. This equipment reached the hands of the Taliban after the fall of Afghanistan on 15 August, 2021.

It has been reported that when the US forces left Afghanistan, there were 78 US-made aircrafts in the country, whose value reached 1 billion dollars. According to CNN, with the end of the US military presence, a total of more than 9,000 air-to-ground munitions worth more than six and a half million dollars have remained in Afghanistan.

The report also states that out of a total of 96,000 military vehicles, more than 40,000 units, including 12,000 Humvees (armored tanks), fell into the hands of the Taliban. Moreover, out of a total of more than 400,000 weapons that the US gave to the forces of the former Afghan government, about 300,000 remain in the country.

Almost all “communications equipment, including mobile base stations, portable and hand-held commercial and military radio systems, and associated transmitters and encryption devices, all remain in Afghanistan,” according to the report.

The report added that “almost all” of the equipment for night vision cameras, surveillance, biometric and positioning equipment,” a total of nearly 42 thousand pieces of specialized equipment, remained in Afghanistan.

Meanwhile, Five Mi 17 helicopters of the then Afghan army, which were transferred to Ukraine for repair before the collapse of the government, have also returned to Afghanistan and now are used by the Taliban.

It should be noted that the internal rivalries in the Taliban, especially among the different factions of this group, is one of the important reasons for Mullah Hibatullah’s distrust of some Taliban officials. Some officials, including interior minister Sirajuddin Haqqani and defense minister Mohammad Yaqub Mujahid, gained a lot of power, especially during the Taliban’s war against foreign forces, and Mullah Hibatullah may be worried that these officials are trying to expand their power, which is a clear threat to his position as the Taliban leader.

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China’s BYD prepares to launch latest SUV, the Sealion 07, in Europe despite EU tariffs

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BYD, the world’s largest electric vehicle (EV) maker, is set to launch its latest SUV, the Sealion 07, in Europe, undeterred by recent tariff increases on Chinese-made electric vehicles. This strategic move highlights BYD’s commitment to expanding overseas sales despite economic barriers.

Deliveries of the Sealion 07 are scheduled to begin in 2025, marking BYD’s seventh all-electric model in the European market, the company announced on Wednesday. Additionally, BYD plans to enter the South Korean market next year, adding to its existing presence in 95 countries worldwide.

This European expansion comes on the heels of the European Union’s decision last month to impose new tariffs—ranging from 17% to 35.3%—on Chinese electric vehicles following an anti-subsidy investigation. BYD’s EVs are subject to a 17% tariff, in addition to the standard 10% tariff applied to all pure electric cars imported from China. These tariffs, which took effect last month, will remain in place for five years. Meanwhile, U.S. tariffs on Chinese-made EVs increased from 25% to 100% as of September, citing similar concerns.

Despite the added costs, BYD’s vehicles continue to hold strong appeal in export markets. “BYD’s vehicles remain attractive even after the additional tariffs, so it’s not really a big problem for the company,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, a leading industry consultancy. “The Sealion 07 exemplifies how BYD’s cost advantage enables it to counteract such trade barriers in key export markets.”

Shenzhen-based BYD has yet to disclose the European pricing for the Sealion 07. On the mainland, the SUV—featuring a range of 450 kilometers—starts at 189,800 yuan (approximately US$26,272), with deliveries beginning in May.

According to a report last year from UBS analysts, BYD has a sustainable cost advantage of 25% over traditional European brands.

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Singles’ day promotions target overseas Chinese as China’s domestic demand slows

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After last year’s Singles’ Day shopping festival in China was dubbed the “quietest in history,” China’s e-commerce platforms focused on a new strategy this year.

For this year’s Singles’ Day event, major e-commerce companies such as Alibaba, JD.com, and Pinduoduo invested heavily in expanding overseas markets, targeting the estimated 100 million Chinese living abroad with offers like discounts and free or low-cost shipping.

The central question, however, is not whether these efforts will succeed in the short term, but rather if this shift can help platforms grow their user bases as online sales growth in China reaches a bottleneck.

“Domestic consumption is quite weak right now, and every company is certainly considering new ways to drive growth for Singles’ Day,” said an executive at a leading online retailer, who requested anonymity. “The overseas market is widely seen as a promising source for additional growth,” he added in an interview with Nikkei Asia.

Singles’ Day, a one-day sales event launched by Alibaba in 2009 as a celebration for singles, has since evolved into a month-long campaign with special offers and deep discounts, culminating on or around November 11.

This year, China aimed to revitalize its retail sector with the event. Total consumer goods sales rose by 3.3% year-on-year in the first three quarters of 2024, though high-end consumer spending remained stagnant. Cosmetics sales fell by 1%, while gold and silver jewelry sales declined by 3.1% year-on-year.

Last month, Alibaba’s Taobao launched a significant marketing campaign in Hong Kong and Taiwan, flooding subway stations with advertisements for “free shipping on orders over 99 yuan,” among other offers. According to the company, the campaign cost 2 billion New Taiwan dollars ($61.7 million) in Taiwan and 1 billion yuan ($138 million) in Hong Kong.

Following Alibaba’s move, JD.com announced it had invested 1.5 billion yuan to offer discounted product prices and cheaper shipping to Hong Kong shoppers. Bargain platform Pinduoduo took it a step further, offering free shipping via courier SF Express for Hong Kong shoppers, regardless of the item’s price. All products on these platforms are shipped from mainland China.

A spokesperson from Alibaba’s International Digital Commerce Group noted that since the overseas initiative launched in October, Taobao Hong Kong has achieved double-digit growth in both orders and gross merchandise value (GMV)—a metric that excludes canceled orders—on both a monthly and year-on-year basis.

The platforms are also targeting Chinese shoppers in Malaysia, Thailand, and Singapore.

This year, unlike in previous years, shoppers could combine online discounts with a subsidy program introduced by the Chinese government to boost domestic consumption, primarily for home appliances and household products. Analysts suggest these incentives will likely boost sales for JD.com, which is known for selling high-quality large appliances and offering after-sales services.

While JD.com has yet to release sales or GMV figures for home appliances during the shopping festival, it is expected to share its June-September results, along with Alibaba, later this week.

Last year, data provider Syntun estimated that total GMV on major e-commerce platforms grew by only 2.1% to 1.14 trillion yuan, falling short of the 2.9% growth forecast for 2022. Similarly, consultancy Bain predicted that Singles’ Day sales would reach 1.15 trillion yuan in 2023.

On Tuesday morning, Alibaba announced “strong GMV growth” and a “record number” of active shoppers for this year’s Singles’ Day event.

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