EU must not get caught up in China-US rivalry, says Borrell

The EU’s top diplomat has told the bloc’s foreign affairs ministers that they must not get caught up in US-China rivalry as they re-evaluate their diplomatic and trade relations with the world's second-biggest economy due to rising geopolitical tension and Beijing's increased affirmativeness.

This would involve lowering the EU’s dependencies on Chinese industry, particularly when it comes to semiconductors and artificial intelligence, while pressing Beijing to push Russia to withdraw from Ukraine, according to a letter sent by Josep Borrell to the bloc’s 27 foreign affairs ministers' meeting in Stockholm on Friday.

The EU must remain strongly engaged with China due to its geopolitical significance, wrote Mr Borrell.

“China is here to stay,” the Spanish diplomat argued.

“Unlike Russia, China is a real systemic actor. Russia represents 1 per cent of the world's gross national product, while China is approaching 20 per cent and its GNP will be the highest in the world in only a few years.”

Mr Borrell warned that China was viewed as a counterweight to the West and, therefore, Europe, by many countries.

“Most countries … will seek to strengthen their own room for manoeuvre without picking sides,” he wrote.

The letter, which is not public but was seen by The National, may signal that the West is attempting to contain tension with China.

“The EU should not subscribe to an idea of a zero-sum game whereby there can only be one winner, in a binary contest between the US and China,” wrote Mr Borrell.

Relations with China and the war in Ukraine are on the agenda of a meeting of European foreign affairs ministers in Stockholm on Friday.

It comes after reports that the European Commission suggested last week that EU countries place sanctions on Chinese companies for selling products to Russia, supporting its war effort in Ukraine.

China responded by warning this would be “highly dangerous”.

The proposal, which is part of an 11th round of sanctions against Russia, is currently under discussion by EU ambassadors in Brussels. It reportedly caused alarm in certain member states including Germany.

Yet some of the bloc's foreign ministers told reporters in Stockholm that they thought that Mr Borrell was not being firm enough with China.

“The paper in principle is not bad,” said Lithuania's Foreign Minister Gabrielius Landsbergis.

But he said he wanted Brussels to talk to China “from a position of strength.”

“We also have instruments, we also have arrangements that we possess that could be used as leverage on changing China's position on one case or another,” he said.

“I suggest that we learn from the mistakes we've [made] with Russia and do not repeat them,” said Mr Landsbergis.

Baltic countries are among the most hawkishly anti-Russia in the bloc due to their land border with Russia and its ally Belarus.

Most ministers agreed that Europe needed to adopt a unified position towards China.

“Today we will have a significant important discussion on China, which, as a rising power, poses challenges, opportunities,” said Czech Foreign Affairs Minister Jan Lipavsky. “And we, as [the] EU, need to find a clarified way how to approach that.”

Wopke Hoekstra, the Foreign Minister of the Netherlands, said that “there were multiple layers” to the EU-China relationship.

“What we seek is partnership, but we cannot be naive, and we also have to be explicit that domestic interference is something that we’ll never allow,” he said.

The Dutch intelligence service said last month that China was the greatest threat to Dutch economic security.

In late 2022, the Netherlands opened an investigation into reports that China was running illegal police stations on its territory to monitor dissidents.

The EU has repeatedly dismissed Chinese claims that it is neutral in the Russia-Ukraine conflict, and said it is, in reality, siding with Moscow.

In his letter, Mr Borrell reaffirmed that the issue remains highly important for Brussels.

“The relationship between China and the European Union will be critically affected if China does not push Russia to withdraw from Ukraine,” he wrote.

There has been renewed attention on EU-China relations following the visit this week of China’s Foreign Minister Qin Gang to several countries including France, Germany and the Netherlands.

The US also used Mr Qin’s visit to engage Chinese officials on European soil.

US National Security Adviser Jake Sullivan met China’s top diplomat Wang Yi in Vienna on Wednesday and Thursday for “candid, substantive and constructive discussions”.

The White House said they discussed “global and regional security issues, Russia’s war against Ukraine and cross-strait issues, among other topics”.

The conversation set the stage for a future call between President Joe Biden and his Chinese counterpart Xi Jinping, Bloomberg reported, and is widely viewed as part of a US strategy to resume relations after the shooting of an alleged Chinese spy balloon in February.

The President's Cake

Director: Hasan Hadi

Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem

Rating: 4/5

While you're here ...

Damien McElroy: What happens to Brexit?

Con Coughlin: Could the virus break the EU?

Andrea Matteo Fontana: Europe to emerge stronger

David Haye record

Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4

Recipe: Spirulina Coconut Brothie

Ingredients
1 tbsp Spirulina powder
1 banana
1 cup unsweetened coconut milk (full fat preferable)
1 tbsp fresh turmeric or turmeric powder
½ cup fresh spinach leaves
½ cup vegan broth
2 crushed ice cubes (optional)

Method
Blend all the ingredients together on high in a high-speed blender until smooth and creamy.

Know your cyber adversaries

Cryptojacking: Compromises a device or network to mine cryptocurrencies without an organisation's knowledge.

Distributed denial-of-service: Floods systems, servers or networks with information, effectively blocking them.

Man-in-the-middle attack: Intercepts two-way communication to obtain information, spy on participants or alter the outcome.

Malware: Installs itself in a network when a user clicks on a compromised link or email attachment.

Phishing: Aims to secure personal information, such as passwords and credit card numbers.

Ransomware: Encrypts user data, denying access and demands a payment to decrypt it.

Spyware: Collects information without the user's knowledge, which is then passed on to bad actors.

Trojans: Create a backdoor into systems, which becomes a point of entry for an attack.

Viruses: Infect applications in a system and replicate themselves as they go, just like their biological counterparts.

Worms: Send copies of themselves to other users or contacts. They don't attack the system, but they overload it.

Zero-day exploit: Exploits a vulnerability in software before a fix is found.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Yemen's Bahais and the charges they often face

The Baha'i faith was made known in Yemen in the 19th century, first introduced by an Iranian man named Ali Muhammad Al Shirazi, considered the Herald of the Baha'i faith in 1844.

The Baha'i faith has had a growing number of followers in recent years despite persecution in Yemen and Iran.

Today, some 2,000 Baha'is reside in Yemen, according to Insaf.

"The 24 defendants represented by the House of Justice, which has intelligence outfits from the uS and the UK working to carry out an espionage scheme in Yemen under the guise of religion.. aimed to impant and found the Bahai sect on Yemeni soil by bringing foreign Bahais from abroad and homing them in Yemen," the charge sheet said.

Baha'Ullah, the founder of the Bahai faith, was exiled by the Ottoman Empire in 1868 from Iran to what is now Israel. Now, the Bahai faith's highest governing body, known as the Universal House of Justice, is based in the Israeli city of Haifa, which the Bahais turn towards during prayer.

The Houthis cite this as collective "evidence" of Bahai "links" to Israel - which the Houthis consider their enemy.