Belgium — Den of Chinese spies and gateway for China

The host to EU institutions and NATO headquarters, the European nation is an alluring draw card for China: 250 Chinese spies were working in Brussels — more than from Russia.

By Alan Crawford and Peter Martin 

When a suspected Chinese spy was extradited to the US last year, the US Department of Justice praised the “significant assistance” given by authorities in Belgium.
Xu Yanjun was arrested in Belgium after going there to meet a contact “for the purpose of discussing and receiving the sensitive information he had requested,” the US indictment said.
Xu was charged with attempting to commit economic espionage, with GE Aviation the main target. The case is pending.
Belgium might seem an unlikely destination for a Chinese agent, but it is a den of spies, the Belgian State Security Service (VSSE) says.

It says the number of operatives is at least as high as during the Cold War and Brussels is their “chessboard.”
Host to the EU’s institutions and NATO headquarters, Belgium is an alluring draw card for aspiring espionage-makers. 

Diplomats, lawmakers and military officials mingle, sharing gossip and ideas, while Belgium’s strategic location makes it important to China in its own right as a place to exert its influence in Europe.
“The mere fact that we hold international institutions such as NATO and the EU makes Belgium a natural focus for China,” Brussels-based Egmont Royal Institute for International Relations research fellow Bruno Hellendorff said. 

“It’s common knowledge that there are many spies in Brussels, and these days espionage from China is a major and growing concern.”
German newspaper Die Welt in February cited an unpublished assessment by the EU’s European External Action Service that about 250 Chinese spies were working in Brussels — more than from Russia.

Famous Chinese spy Song Xinning

Song Xinning, a Chinese director of the Confucius Institute at VUB Brussels University, was in October barred from entering the EU Schengen area for eight years after being accused of espionage.
An insight into the methods employed by China are outlined in the Xu indictment.

His duties included obtaining trade secrets from aviation and aerospace companies in the US, “and throughout Europe.”He used aliases and invited experts on paid trips to China to deliver presentations at Nanjing University of Aeronautics and Astronautics, operated by the Chinese Ministry of Industry and Information Technology. 

He ensured targets carried a work computer whose data could be captured.
The US remains at the core of Beijing’s espionage activities — the head of the FBI in July said that China was trying to “steal their way up the economic ladder at our expense.”
Yet Europe appears increasingly in focus, with cases of interference by China identified in Poland, France, Germany and the UK.
“The Chinese are becoming far more active than they were 10 or 20 years ago,” said former British diplomat Charles Parton, who has more than two decades of experience of China.
Espionage is “the far end of the spectrum” of interference that ranges from academia to “technological spillover” — collecting data to send back to China for mining, London-based Royal United Services Institute senior associate fellow Parton said.
Belgium’s elite generally has a relaxed attitude toward China that can open it to charges of complacency. 

A fractured political system makes it harder to craft a unified strategy — there is still no government six months after elections.A delegation to China this month included four ministers responsible for trade relations — a federal minister plus one each for Dutch-speaking Flanders, Francophone Wallonia and Brussels.
Even as the EU adopts a more skeptical stance toward China — losing its naivety, as one senior European official put it — Belgium is opening the gates to Chinese investments in strategic areas from energy to shipping and technology.
Belgium is responding to China’s rise “in a pragmatic way,” stressing its advantages in areas such as logistics, while ensuring “attention to the sustainability of the projects and respect for international standards,” the Belgian Ministry of Foreign Affairs said.
“They [Belgium] have very advanced technologies that China needs,” said Renmin University Institute of International Affairs director Wang Yiwei 王義桅, a former Chinese diplomat based in Brussels. 

“Through Brussels you can access Europe and even the United States.”
He said that Chinese innovation is fast catching up with the US.
All nations make efforts to win over hearts and minds, and much influence-building is legitimate diplomatic activity, but there is also a gray zone and it can be “difficult to tell the hand of the Chinese state from a much more diffuse web of influence-peddling,” the European Council on Foreign Relations said in a 2017 report.

Flemish Quislings

Brecht Vermeulen, chairman of the Belgian parliament’s home affairs committee until losing his seat this year, joined parliament’s China friendship group soon after his election in 2014 as a lawmaker for the Flemish nationalist N-VA party, the largest group in the then-ruling coalition.
Over the course of his five-year term, Vermeulen made several trips to China, where officials briefed him on technological advances in artificial intelligence, facial recognition and cybersecurity.
During that time, N-VA policy evolved from sympathizing with efforts by some in Taiwan and Hong Kong to keep a distance from China, toward what Vermeulen called “Realpolitik.”
“I think we must open more doors to the Chinese and see how they react,” Vermeulen said in an interview in Ghent. 

“If they open their doors, too, then it’s good on both sides. Of course, we are a small country and China is enormous, but if we act in one way and there’s a reaction in the same way, then OK, we can proceed, step by step.”
Still, there are signs that the Belgian authorities are attuned to potential threats.
State Grid Corp of China, which has more employees than Brussels has inhabitants, in 2016 bid for a stake in energy company Eandis. 

A last-minute leak of a VSSE dossier urged “extreme caution,” citing the risk that Belgian technology could be used by the Chinese military, and a planned vote on the bid never took place.
Engaging with China’s influence apparatus is not without risks.
Filip Dewinter, a regional lawmaker with the far-right Vlaams Belang party, was investigated over his ties to an organization suspected of spying for China. 

The probe was dropped after it was found Dewinter had committed no crime.
“Maybe I had too much faith in these people,” De Morgen cited Dewinter as saying in February, adding that he was now “more informed” about Chinese espionage and the need “to be careful.”
However, while there is now “some strategic thinking” on China in Belgium, the institutional setup means it is not across the board, Hellendorff said.
He sees “little to no dialogue between regions on the implications of growing Chinese investment in the country, not only in economic terms, but also in terms of its impact on values and influence.”That lack of coordination between regions and layers of government allows Antwerp Mayor Bart de Wever to play an outsize role in ties with Beijing. 

Antwerp is home to Europe’s second-largest port and has a direct rail link to China.
Wang thinks bilateral relations are developing well.
“In Europe there’s a saying that small is beautiful,” Wang said. 

“Belgium is beautiful in the Chinese understanding.”

Chinese Peril

Secretary of State Mike Pompeo attacks China in Berlin speech
BBC News

Mike Pompeo has held talks with German Chancellor Angela Merkel during his visit to Berlin.

US Secretary of State Mike Pompeo has warned of the dangers posed by Russia and China, and called on Nato to grow and confront "the challenges of today".
On a visit to Berlin, Mr Pompeo said methods used by China to suppress its own people would be "horrifyingly familiar" to East Germans.
And he accused Russia of invading its neighbours and crushing dissent.
He laughed off comments from French President Emmanuel Macron, who said recently that Nato was "brain dead".
But Mr Pompeo told reporters: "Seventy years on... it needs to grow and change. It needs to confront the realities of today and the challenges of today.
"If nations believe that they can get the security benefit without providing Nato the resources that it needs, if they don't live up to their commitments, there is a risk that Nato could become ineffective or obsolete."

A Nato military exercise in 2018 -- the biggest since Cold War.

US President Donald Trump has frequently accused European Nato members of failing to provide their fair share of military spending and of relying too heavily on the US for their defence.
Nato celebrates its 70th anniversary at a summit in London next month.
What else did Mr Pompeo say?
He was speaking in Berlin a day before the 30th anniversary of the fall of the Berlin Wall.
Referring to that event, Mr Pompeo said "the West -- all of us -- lost our way in the afterglow of that proud moment".
He said the US and its allies should "defend what was so hard-won... in 1989" and "recognise we are in a competition of values with un-free nations".
"We thought we could divert our resources away from alliances, and our militaries. We were wrong," he said.
"Today, Russia -- led by a former KGB officer once stationed in Dresden [President Vladimir Putin] - invades its neighbours and slays political opponents."

A rallying cry - but not everyone agrees
In Berlin to remember the end of the first Cold War, US Secretary of State Mike Pompeo appeared to be declaring the outbreak of a second.

In insisting upon a "competition of values" between the "free nations" on the one hand, and Russia and China on the other, his was a message of ideological struggle.
He disparaged entirely the idea of Moscow being a partner for the West. 

Mr Pompeo clearly saw this speech as a rallying cry to the West. 

He struck a hawkish tone but many will wonder: What exactly is the fundamental US view?
Trump seems much less antagonistic towards Moscow and does not appear to share the strategic framework in which his secretary of state places relations between Moscow and Beijing, and the West.
It is clear that even many of Washington's allies do not fully share Mr Pompeo's analysis. 

And Moscow and Beijing are eager to exploit such tensions and divisions.
Relations between Washington and Moscow plummeted after Russia annexed the Crimean peninsula from neighbouring Ukraine in 2014.
Ties were further strained when US intelligence agencies concluded that the Kremlin had interfered in the 2016 presidential election.
Despite this, Trump and Putin have appeared to be on good terms personally. 

On Friday, Trump said he was considering attending the Victory Day celebrations in Moscow next May, after an invitation from the Russian leader.
Mr Pompeo accused the Chinese Communist Party of "shaping a new vision of authoritarianism" and warned the German government against using Chinese telecom giant Huawei to build its fifth-generation data network (5G).

What did Mr Macron say?
Interviewed by the Economist, the French president said he saw a waning commitment to the alliance by its main guarantor, the US.
He warned European members that they could no longer rely on the US to defend the alliance, established at the start of the Cold War to bolster Western European and North American security.

He cited the recent failure by Washington to consult Nato before pulling forces out of northern Syria.
Mr Macron also questioned whether Nato was still committed to collective defence.
Speaking on Thursday, German Chancellor Angela Merkel, a key ally, said she disagreed with Mr Macron's "drastic words".
Speaking in Berlin alongside visiting Nato Secretary-General Jens Stoltenberg, she acknowledged there were problems, but said she did not think "such sweeping judgements are necessary".

Chinese Peril

Beijing, rather than Moscow, is the top concern as NATO officials gather in Washington.
By MATTHEW KARNITSCHNIG

China is top of mind as NATO officials gather in the American capital this week to celebrate the 70th anniversary of the signing of the Washington Treaty.

WASHINGTON — NATO has spent most of the past 70 years focusing on how to defend the Continent against Russia.
To survive the decades ahead, it’s beginning to think more about a threat farther east.
China is top of mind as NATO officials gather in the American capital this week to celebrate the 70th anniversary of the signing of the Washington Treaty, which established the alliance on April 4, 1949.
Questions about whether and to what extent alliance members should allow Chinese network supplier Huawei to operate in their countries, along with Italy’s move to join Beijing’s ambitious Belt and Road Initiative, have put the question of how NATO should respond to the Asian power front and center.
“China is set to become the subject of the 21st century on both sides of the Atlantic,” German Foreign Minister Heiko Maas said in a speech in Washington on Wednesday.
“China is a challenge on almost every topic. It is important to gain a better understanding of what that implies for NATO.”
It’s a fraught issue for much of Europe, which, like the U.S., has deep commercial ties with China.

NATO Secretary-General Jens Stoltenberg addresses a joint meeting of the U.S. Congress.

“We are partners on one hand and competitors on the other — not only regarding the economy, but we also have very different political systems,” German Chancellor Angela Merkel said at a European Council summit in Brussels last week.
“We want relations on the basis of reciprocity. We also want good trade ties with China.”
China is now Germany’s largest trading partner, ahead of the U.S.
For the EU as a whole, trade with China ranks a close second after the U.S.
In addition, China has shown a willingness to invest substantial sums where others won’t: in sorely-needed infrastructure projects in countries such as Greece, Hungary and Italy.

While the Trump administration has been focused on China from day 1, European leaders are only just beginning to confront increasing signs that China's largesse could pose a long-term strategic threat to the region.
So far, Europe’s China debate has been confined to the political realm.
The European Union has vowed to take a harder line with China on cyber espionage and intellectual property theft, issues that are expected to top the agenda at an EU summit with China next week.
What role NATO, with its geographic limitations, should play in the West’s effort to protect against China isn’t clear.
Nonetheless, there’s a growing conviction among security officials on both sides of the Atlantic that at a time of increased tension in the alliance over burden-sharing, China policy is an area of common interest between the U.S. and its European partners.
Questions on how to ensure open shipping channels in key trade corridors such as the South China Sea, for example, are every bit as important to Europe as they are to the U.S. 
The threat posed by China’s cyberwarfare capability is another area of crucial strategic importance.
All that’s missing is a strategy.
“We could all benefit if we could develop joint approaches with the U.S.,” said Wolfgang Ischinger, a former German ambassador who now heads the Munich Security Conference.
“But we don’t have an EU strategy yet, and you can’t have a joint strategy if you don’t have your own strategy.”
Europe’s biggest worry is that in a world of great power competition between the U.S. and China, it will be left by the wayside.
The recent decision by President Donald Trump to withdraw from the the Intermediate-range Nuclear Forces (INF) Treaty, a Cold War-era agreement designed to keep mid-range nuclear weapons out of Europe, stoked those fears.
The Trump administration took the decision without engaging Washington’s European allies, even though Europe would be most exposed to the Russian nukes.
U.S. officials say the decision was driven both by years of evidence that Russia had stopped complying with the treaty and concerns that China, which is not party to the INF and has deployed similar nuclear weapons in Asia, was gaining a strategic advantage.
What frustrated the Europeans was that they had virtually no voice on an issue of existential importance to them.
“A strategic question of the highest order for Europeans was decided for reasons that lie outside of Europe, but have massive implications,” said Jan Techau, director of the Europe program at the German Marshall Fund of the U.S., a think tank.
“You can see that we’re given secondary consideration at best.”
Despite such frustrations, there’s a consensus among senior European defense officials that notwithstanding recent rhetoric about a “European army,” NATO remains absolutely essential for the region’s security.

Defense officials believe that a European Army remains essential to ensure the security of the Continent.

The question is how Europe can convince Washington it’s worth the trouble.
One way for Europe to show its value would be to start pulling more of its own weight in NATO, analysts say.
The U.S. accounts for more than two-thirds of NATO defense spending, a source of deep aggravation for Trump.
While a number of countries have made progress in fulfilling NATO’s spending target of 2 percent of GDP, others, notably Germany, remain far off.
A big risk for Europe would be a crisis in Asia that diverted U.S. resources away from NATO.
Such a shift could come suddenly, as happened in the wake of the September 11, 2001 terror attacks, when the U.S. redirected its focus almost overnight to the Middle East.
That’s why some European military strategists believe the region’s NATO members should prepare to take the lead in confronting Russia.
A number of European countries, including the U.K. and Germany, already play a central role in NATO’s Enhanced Forward Presence operation in the Baltics and Poland, which is aimed at discouraging Russia from encroaching into the region.
For all the talk about Moscow’s meddling in elections and incursions into its neighbors’ territory, there’s a growing consensus in the alliance that despite its considerable nuclear arsenal, Russia can be managed.
Europe’s NATO members dwarf Russia in terms of military spending and economic might.
Russia’s energy-dependent economy is stagnating and is smaller than Canada’s, for example.
If Europe were to focus on Russia, it would free the U.S. to concentrate more on Asia (where European NATO allies have virtually no presence), a division of labor that would likely make NATO an easier sell in Washington in the long run.
Trump’s bluster and aggressive tweets have distracted from the fact that he’s not the only one in Washington who would like to see NATO allies shoulder more of the burden in Europe.
"The U.S. is very, very concerned about what’s happening in the Pacific,” Barry Posen, a professor of political science at the Massachusetts Institute of Technology and a prominent NATO critic, told a forum of Western defense officials in Washington on Wednesday.
“It defies the imagination that the U.S. still has to provide such a tremendous weight of resources needed to secure [Europe].”
With or without Trump, the realities of confronting China are bound to force a reckoning about NATO’s future.
Whether the Europeans, given their growing economic reliance on China, can reach a consensus amongst themselves, much less with the U.S., is another question.
The eagerness of countries in Southern Europe to welcome Chinese investment is a worrying sign to those urging a unified approach.
“China paralyzes decision-making in Europe,” Techau said.
“We should be making the kind of investments China has been making. But we're not rich enough anymore to keep China out of our market.”

Chinese Peril

70th anniversary: Pompeo urges NATO allies to adapt to China threat
www.aljazeera.com
US Secretary of State Mike Pompeo speaks during a reception celebrating NATO''s 70 anniversary at the Andrew W Mellon Auditorium in Washington.

United States Secretary of State Mike Pompeo urged NATO allies on Thursday to work together to confront a wide variety of emerging threats from Russia and China.
Pompeo made the call at the start of a NATO meeting of foreign ministers in Washington that marked the 70th anniversary of the transatlantic military alliance.
"We must adapt our alliance to confront emerging threats ... whether that's Russian aggression, uncontrolled migration, cyberattacks, threats to energy security, Chinese strategic competition, including technology and 5G ... [or] many other issues," Pompeo said.
In a 2018 strategy document, the United States military put countering China and Russia at the heart of a new national defence strategy.
The meeting's first session focused on ways to deter Russia, including in the Black Sea, where it seized three Ukrainian naval vessels last year.
NATO chief Jens Stoltenberg called on Moscow to release the ships and their crews.
He said Russia's breach of the 1987 Intermediate-Range Nuclear Forces (INF) Treaty was part of a "pattern of destabilising behaviour".
Washington has said it will withdraw from the treaty this summer unless Moscow ends its alleged violations of the pact, which rid Europe of land-based nuclear missiles.
"We will not mirror what Russia is doing," said Stoltenberg. 

"We will be measured and coordinated, and we have no intention of deploying ground-launched nuclear missiles in Europe."

Cyber warfare
In his remarks, Pompeo said NATO should also confront increased cyber warfare, including threats from China.
Washington has warned it will not partner with countries that adopt China's Huawei Technologies systems, but has been at odds on the issue with the European Union (EU), which has shunned US calls to ban the company across the bloc. 

The bulk of NATO members are EU countries.
Huawei is under scrutiny from Western intelligence agencies for its ties to China's government and the possibility that its equipment could be used for espionage.
The US has also been at odds with European countries over the failure of many of them to meet NATO defence-spending guidelines of two percent of gross domestic product (GDP).
Stoltenberg told reporters that NATO allies should commit to increased defence spending to improve burden-sharing in NATO.
"All NATO allies made a pledge to invest more in defense to improve burden-sharing in our alliance, and I expect all allies, including Germany, of course, to make good on the pledge we made together," the NATO secretary general said.

Defence spending
US President Donald Trump has called on NATO countries to pay even more than two percent of their GDP for defence.
He told NATO leaders last year to increase defence spending to four percent of GDP. 

He said the US pays 4.3 percent of its GDP to NATO.
Trump has singled out Germany for not doing enough. 

Stoltenberg said Germany was now making progress, but all allies needed to do more.
"We didn't make this pledge to please the United States. We made it because we live in a more unpredictable and uncertain world," Stoltenberg said.
On Thursday, Pompeo said every NATO member had an obligation to explain to its citizens the need to increase their defence budgets and rejected what he called "tired arguments" about public opposition to such spending.
The NATO chief said disagreement between NATO members Turkey and the US over Ankara's plan to buy S-400 missile defence systems from Russia was not part of the formal agenda of the Washington meeting, but would be discussed in the margins.
The US has halted delivery of equipment related to its advanced F-35 fighter jets to Turkey over its S-400 plans.
The US has said Turkey's purchase of the Russian air defence system would compromise the security of F-35 aircraft, which are built by Lockheed Martin Corp and employ stealth technology.
Pompeo on Thursday said he was confident the US will be able to "find a path forward" with Turkey over its S-400 plans.
Meanwhile, Canada's Foreign Minister Chrystia Freeland took the opportunity of the NATO meeting to register Ottawa's displeasure with being labeled a potential national security threat by the US in relation to steel production.
She called the designation, which has led to the imposition of tariffs on Canadian steel, "absurd" and pointed to her presence at the NATO meeting as proof that Canada is not a threat to the US.
Pompeo said NATO allies also discussed the need for Russian troops to leave Venezuela.

America Pushes Allies to Fight Huawei in New Arms Race With China

Whichever country dominates 5G will gain an economic, intelligence and military edge for much of this century

By David E. Sanger, Julian E. Barnes, Raymond Zhong and Marc Santora

Huawei’s offices in Warsaw. Polish officials recently came under pressure from the United States to bar Huawei from building its 5G communications network.

Jeremy Hunt, the British foreign minister, arrived in Washington last week for a whirlwind of meetings dominated by a critical question: Should Britain risk its relationship with Beijing and agree to the Trump administration’s request to ban Huawei, China’s leading telecommunications producer, from building its next-generation computer and phone networks?
Britain is not the only American ally feeling the heat.

In Poland, officials are also under pressure from the United States to bar Huawei from building its fifth generation, or 5G, network. 

Trump officials suggested that future deployments of American troops — including the prospect of a permanent base labeled “Fort Trump” — could hinge on Poland’s decision.
And a delegation of American officials showed up last spring in Germany, where most of Europe’s giant fiber-optic lines connect and Huawei wants to build the switches that make the system hum. Their message: Any economic benefit of using cheaper Chinese telecom equipment is outweighed by the security threat to the NATO alliance.
Over the past year, the United States has embarked on a stealthy global campaign to prevent Huawei and other Chinese firms from participating in the most dramatic remaking of the plumbing that controls the internet since it sputtered into being, in pieces, 35 years ago.
The administration contends that the world is engaged in a new arms race — one that involves technology, rather than conventional weaponry, but poses just as much danger to America’s national security.
In an age when the most powerful weapons, short of nuclear arms, are cyber-controlled, whichever country dominates 5G will gain an economic, intelligence and military edge for much of this century.

The transition to 5G — already beginning in prototype systems in cities from Dallas to Atlanta — is likely to be more revolutionary than evolutionary. 

What consumers will notice first is that the network is faster — data should download almost instantly, even over cellphone networks.
It is the first network built to serve the sensors, robots, autonomous vehicles and other devices that will continuously feed each other vast amounts of data, allowing factories, construction sites and even whole cities to be run with less moment-to-moment human intervention. 

It will also enable greater use of virtual reality and artificial intelligence tools.
But what is good for consumers is also good for intelligence services and cyberattackers. 

The 5G system is a physical network of switches and routers. 

But it is more reliant on layers of complex software that are far more adaptable, and constantly updating, in ways invisible to users — much as an iPhone automatically updates while charging overnight. 

That means whoever controls the networks controls the information flow — and is able to change, reroute or copy data without users’ knowledge.
In interviews with current and former senior American government officials, intelligence officers and top telecommunications executives, it is clear that the potential of 5G has created a zero-sum calculus in the Trump White House — a conviction that there must be a single winner in this arms race, and the loser must be banished. 

For months, the White House has been drafting an executive order, expected in the coming weeks, that would effectively ban United States companies from using Chinese-origin equipment in critical telecommunications networks. 

That goes far beyond the existing rules, which ban such equipment only from government networks.
Nervousness about Chinese technology has long existed in the United States, fueled by the fear that the Chinese could insert a “back door” into telecom and computing networks that would allow Chinese security services to intercept military, government and corporate communications. 

And Chinese cyberintrusions of American companies and government entities have occurred daily, including by hackers working on behalf of China’s Ministry of State Security.
But the concern has taken on more urgency as countries around the world begin deciding which equipment providers will build their 5G networks.
American officials say the old process of looking for “back doors” in equipment and software made by Chinese companies is the wrong approach, as is searching for ties between specific executives and the Chinese government. 

The bigger issue is the increasingly authoritarian nature of the Chinese government, the fading line between independent business and the state and new laws that will give Beijing the power to look into and take over networks that companies like Huawei have helped build and maintain.
“It’s important to remember that Chinese company relationships with the Chinese government aren’t like private sector company relationships with governments in the West,” said William R. Evanina, the director of America’s National Counterintelligence and Security Center. 

“China’s 2017 National Intelligence Law requires Chinese companies to support, provide assistance and cooperate in China’s national intelligence work, wherever they operate.”
The White House’s focus on Huawei coincides with the Trump administration’s broader crackdown on China, which has involved sweeping tariffs on Chinese goods, investment restrictions and the indictments of several Chinese nationals accused of hacking and cyberespionage. 

President Trump has accused China of “ripping off our country” and plotting to grow stronger at America’s expense.
President Trump’s views have prompted some countries to question whether America’s campaign is really about national security or if it is aimed at preventing China from gaining a competitive edge.
Administration officials see little distinction in those goals.
“President Trump has identified overcoming this economic problem as critical, not simply to right the balance economically, to make China play by the rules everybody else plays by, but to prevent an imbalance in political/military power in the future as well,” John R. Bolton, President Trump’s national security adviser, told The Washington Times on Friday. 

“The two aspects are very closely tied together in his mind.”
The administration is warning allies that the next six months are critical. 

Countries are beginning to auction off radio spectrum for new, 5G cellphone networks and decide on multibillion-dollar contracts to build the underlying switching systems. 

This past week, the Federal Communications Commission announced that it had concluded its first high-band 5G spectrum auction.
The Chinese government sees this moment as its chance to wire the world — especially European, Asian and African nations that find themselves increasingly beholden to Chinese economic power.
“This will be almost more important than electricity,” said Chris Lane, a telecom analyst in Hong Kong for Sanford C. Bernstein. 

“Everything will be connected, and the central nervous system of these smart cities will be your 5G network.”

Both the United States and China believe that whichever country dominates 5G will gain an economic, intelligence and military edge for much of this century.

A New Red Scare

American officials whisper that classified reports implicate Huawei in Chinese espionage but have produced none publicly. 

Others familiar with the secret case against the company say there is just a heightened concern about the firm’s rising technological dominance and the new Chinese laws that require Huawei to submit to requests from Beijing.

Australia last year banned Huawei and another Chinese manufacturer, ZTE, from supplying 5G equipment. 

Other nations are wrestling with whether to follow suit and risk inflaming China, which could hamper their access to the growing Chinese market and deprive them of cheaper Huawei products.
Government officials in places like Britain note that Huawei has already invested heavily in older-style networks.

And they argue that Huawei isn’t going away — it will run the networks of half the world, or more, and will have to be connected, in some way, to the networks of the United States and its allies.
Yet BT Group, the British telecom giant, has plans to rip out part of Huawei’s existing network. 

The company says that was part of its plans after acquiring a firm that used existing Huawei equipment; American officials say it came after Britain’s intelligence services warned of growing risks. 

And Vodafone Group, which is based in London, said on Friday that it would temporarily stop buying Huawei equipment for parts of its 5G network.
Nations have watched warily as China has retaliated against countries that cross it. 

In December, Canada arrested a top Huawei executive, Meng Wanzhou, at the request of the United States. 

Meng, who is Ren’s daughter, has been accused of defrauding banks to help Huawei’s business evade sanctions against Iran. 

Since her arrest, China has detained two Canadian citizens and sentenced to death a third Canadian, who had previously been given 15 years in prison for drug smuggling.
“Europe is fascinating because they have to take sides,” said Philippe Le Corre, nonresident senior fellow at the Carnegie Endowment for International Peace. 

“They are in the middle. All these governments, they need to make decisions. Huawei is everywhere.”

A Huawei store in Warsaw. This month, the Polish government made two high-profile espionage arrests, including an employee of Huawei.

Growing Suspicions
This month, the Polish government made two high-profile espionage arrests: a former intelligence official, Piotr Durbajlo, and Wang Weijing, an employee of Huawei. 

The arrests are the strongest evidence so far that links Huawei with spying activities.
Wang has been accused of working for Chinese intelligence agencies, said a top former Polish intelligence official. 

Wang was the handler of Durbajlo, who has helped the Chinese penetrate the Polish government’s most secure communications network.
The case was a prime example of how the Chinese government plants intelligence operatives inside Huawei’s vast global network. 

Those operatives have access to overseas communications networks and conduct espionage that the affected companies are not aware of, the official said.
Wang’s lawyer, Bartlomiej Jankowski, says his client has been caught up in a geopolitical tug of war between the United States and China.
American and British officials had already grown concerned about Huawei’s abilities after cybersecurity experts, combing through the company’s source code to look for back doors, determined that Huawei could remotely access and control networks from the company’s Shenzhen headquarters.
On careful examination, the code that Huawei had installed in its network-control software did not appear to be malicious. 

Nor was it hidden. 

It appeared to be part of a system to update remote networks and diagnose trouble. 

But it could also route traffic around corporate data centers — where firms monitor and control their networks — and its mere existence is now cited as evidence that hackers and Chinese intelligence use Huawei equipment to penetrate millions of networks.
Chinese telecommunications companies have also hijacked parts of the internet, rerouting basic traffic from the United States and Canada to China.
One academic paper, co-written by Chris C. Demchak, a Naval War College professor, outlined how traffic from Canada meant for South Korea was redirected to China for six months. 

That 2016 attack has been repeated and provides opportunity for espionage.
Last year, AT&T and Verizon stopped selling Huawei phones in their stores after Huawei begin equipping the devices with its own sets of computer chips — rather than relying on American or European manufacturers. 

The National Security Agency quietly raised alarms that with Huawei supplying its own parts, the Chinese company would control every major element of its networks. 

The N.S.A. feared it would no longer be able to rely on American and European providers to warn of any evidence of malware, spying or other covert action.

An assembly line at Huawei’s cellphone plant in Dongguan, China. The company has already surpassed Apple as the world’s second biggest cellphone provider.

The Rise of Huawei
In three decades, Huawei has transformed itself from a small reseller of low-end phone equipment into a global giant with a dominant position in one of the crucial technologies of the new century.
Last year, Huawei edged out Apple as the second-biggest provider of cellphones around the world. Richard Yu, who heads the company’s consumer business, said in Beijing several days ago that “even without the U.S. market we will be No. 1 in the world,” by the end of this year or sometime in 2020.
The company was founded in 1987 by Ren, a former People’s Liberation Army engineer who has become one of China’s most successful entrepreneurs.
The company started through imitation and theft of American technology. 

Cisco Systems sued Huawei in 2003, saying it had illegally copied the American company’s source code. 

The two companies settled out of court.
Huawei opened research centers (including one in California) and built alliances with leading universities around the world. 

Last year, it generated $100 billion in revenue, twice as much as Cisco and significantly more than IBM. 

Its ability to deliver well-made equipment at a lower cost than Western firms drove once-dominant players like Motorola and Lucent out of the telecom-equipment industry.
While American officials refuse to discuss it, the government snooping was a two-way street. 

As early as 2010, the N.S.A. secretly broke into Huawei’s headquarters, in an operation code-named “Shotgiant,” a discovery revealed by Edward J. Snowden, the former N.S.A. contractor now living in exile in Moscow.
Documents show that the N.S.A. was looking to prove that Huawei was controlled by the People’s Liberation Army — and that Ren never really left the powerful army unit. 

But the Snowden documents also show that the N.S.A. had another goal: to better understand Huawei’s technology and look for potential back doors. 

This way, when the company sold equipment to American adversaries, the N.S.A. would be able to target those nations’ computer and telephone networks to conduct surveillance and, if necessary, offensive cyberoperations.

President Trump met with Andrzej Duda, his Polish counterpart, last year. Mr. Duda has suggested that the United States build a $2 billion base and training area, which Mr. Duda only half-jokingly called “Fort Trump.”

A Global Campaign
After an uproar in 2013 about Huawei’s growing dominance in Britain, the country’s powerful Intelligence and Security Committee, a parliamentary body, argued for banning Huawei, partly because of Chinese cyberattacks aimed at the British government. 

It was overruled, but Britain created a system to require that Huawei make its hardware and source code available to GCHQ, the country’s famous code-breaking agency.
In July, Britain’s National Cyber Security Center for the first time said publicly that questions about Huawei’s current practices and the complexity and dynamism of the new 5G networks meant it would be difficult to find vulnerabilities.
At roughly the same time, the N.S.A., at a series of classified meetings with telecommunications executives, had to decide whether to let Huawei bid for parts of the American 5G networks. 

AT&T and Verizon argued there was value in letting Huawei set up a “test bed” in the United States since it would have to reveal the source code for its networking software. 

Allowing Huawei to bid would also drive the price of building the networks down, they argued.
The director of the N.S.A. at the time, Adm. Michael S. Rogers, never approved the move and Huawei was blocked.
In July 2018, with these decisions swirling, Britain, the United States and other members of the “Five Eyes” intelligence-sharing alliance met for their annual meeting in Halifax, Nova Scotia, where Chinese telecommunications companies, Huawei and 5G networks were at the top of the agenda. They decided on joint action to try to block the company from building new networks in the West.
American officials are trying to make clear with allies around the world that the war with China is not just about trade but a battle to protect the national security of the world’s leading democracies and key NATO members.
On Tuesday, the heads of American intelligence agencies will appear before the Senate to deliver their annual threat assessment, and they are expected to cite 5G investments by Chinese telecom companies, including Huawei, as a threat.
In Poland, the message has quietly been delivered that countries that use Chinese telecommunications networks would be unsafe for American troops.
That has gotten Poland’s attention, given that its president, Andrzej Duda, visited the White House in September and presented a plan to build a $2 billion base and training area, which Mr. Duda only half-jokingly called “Fort Trump.”
Col. Grzegorz Malecki, now retired, who was the head of the Foreign Intelligence Agency in Poland, said it was understandable that the United States would want to avoid potentially compromising its troops.
“And control over the 5G network is such a potentially dangerous tool,” said Mr. Malecki, now board president of the Institute of Security and Strategy. 

“From Poland’s perspective, securing this troop presence outweighs all other concerns.”

Huawei's Chinese Spy Raises Red Flags for Poland and the U.S.

Warsaw and Washington are probing deep ties Beijing has established in the strategically important country on NATO’s eastern frontier

By Bojan Pancevski and Matthew Dalton

An undated photo of Huawei executive Wang Weijing, Chinese spy arrested in Poland. Huawei Technologies Co. has 50% of the Polish telecommunications infrastructure market. 

WARSAW—Authorities in Poland and the U.S. are probing the deep ties Beijing has forged in this strategically important country on NATO’s eastern frontier in the wake of high-profile arrests of a Chinese executive and a former Polish official.
Wang Weijing, who worked in Poland for Huawei Technologies Co., and Piotr Durbajlo, a former senior Polish counterintelligence official, were detained this month and charged with spying for China. 

Wang was fired by Huawei following his arrest.

Neither Durbajlo nor his lawyer could be reached for comment.

China's spy nest: Huawei’s headquarters in Shenzhen, China. 

Part of the investigation—which officials said Poland is coordinating with the U.S.—involves events at Poland’s elite Military University of Technology, whose graduates often go on to take sensitive security and military jobs. 

Durbajlo has served as an instructor at the university.
Wang had visited the university in conjunction with a contest run by Huawei called “Seeds of the Future,” according to the university. 

In recent years, students there have been among the winners of the contest, which offers all-expenses-paid trips to China, including a week at company headquarters in Shenzhen.
The investigation—which officials said has been going on for at least two years—is forcing Polish officials to consider whether China’s growing presence has left the country vulnerable to security and intelligence breaches. 

Huawei by some estimates has nearly 50% of the Polish telecommunications infrastructure market.
“The Chinese have been very active for years,” said a senior Polish lawmaker who has been briefed on the investigation. 

“To give them so much freedom, so much space to maneuver was too much.”
One fear among both Polish and U.S. officials is that China might have accessed allied intelligence shared with Poland and passed it on to Moscow.

Poland’s Pressure on Huawei: Poland is urging its NATO allies to coordinate their response to cybersecurity challenges raised by the Chinese company. This jeopardizes a key market for Huawei. 

Senior U.S. officials say they are exploring how to roll back the deep involvement of Chinese companies such as Huawei in the economies and infrastructure of Poland and other European countries.
“We are figuring out how to deal with that,” said a senior U.S. official with detailed knowledge of the region. 

The broader telecommunications infrastructure is at risk “now that some countries have been infected.”
Huawei operates as a Trojan horse for the Chinese government. 

Chinese laws dictate that authorities can freely access information or data from companies incorporated there.
Poland was once part of the same Communist world as China. 

After the collapse of the Soviet Union, Poland joined major Western institutions, such as the European Union and the North Atlantic Treaty Organization.
The Polish government has sought in recent years to attract Chinese investment. 

Warsaw kept the investigation into Wang and Durbajlo classified partly out of fear of provoking Chinese retaliation, said the Polish lawmaker. 

But the trial, he added, would inevitably draw attention to the case.
“The whole world will be watching this because there have been rumors about the criminal activities of Huawei but never any proof.”

A train arrived in Warsaw from Chengdu, China, in 2016. 

Polish officials are now trying to get a sense of which people who have held sensitive government positions may have ties to China, the lawmaker said.
And Polish counterintelligence is looking into some of the state institutions Durbajlo worked for, officials said.
In addition to serving as a cryptology lecturer at the military academy, Durbajlo has held senior positions at Poland’s Internal Security Service and the agency that oversees classified government communications, as well as Poland’s cybersecurity body, working in different capacities for the government until 2017. 

Since his arrest, he has been suspended from his job at Orange SA, the French telecommunications carrier, which serves about a quarter of Polish mobile phone subscribers.
A former Huawei employee described Wang, who spoke fluent Polish, as quiet and affable. 

Wang attended meetings at the Polish military university to discuss cooperation with Huawei and tout the “Seeds for the Future” contest to officials there, according to university news releases.

“Now trade is booming, but there is no [Chinese] investment,” said Witold Waszczykowski, a former Polish foreign minister. 

The recent arrests come as Poland is becoming disillusioned with China as an economic partner, said Witold Waszczykowski, a former Polish foreign minister and one of the architects of efforts to boost economic ties.
Hoped-for investments, including an airport in Warsaw and high-speed train lines, haven’t materialized, he said. 

“Now trade is booming, but there is no [Chinese] investment,” Mr. Waszczykowski said.
The most sensitive U.S. project in Poland is a missile base due to become operational by 2020 as part of a nuclear shield NATO says will protect against potential attacks by Iran but which Russia has said is really aimed at countering Moscow. 

Any intelligence about the base would be of great value to Beijing, said Fabrice Pothier, former top aide to two NATO chiefs.
“Because of the relationship with the U.S. and membership in the NATO alliance and in the EU, we are an important target,” said Krzysztof Liedel, former director of the National Security Bureau, one of Poland’s security and defense agencies. 

“We are a gate through which to gather information and data on our allies.”

Europe’s Future Is as China’s Enemy

The continent can save NATO—but only if it takes Washington’s side in its growing struggle with Beijing.
BY STEPHEN M. WALT

Xi Jinping speaks with German Chancellor Angela Merkel at the G-20 summit in Hangzhou, China, on Sept. 4, 2016. 

If NATO were a listed stock, would now be a good time to short it? 

According to the New York Times, U.S. President Donald Trump has told his aides repeatedly that he would like to withdraw the United States from the alliance. 

The U.S. foreign-policy establishment promptly got the vapors at this news, with former Undersecretary of Defense Michèle Flournoy declaring that such a step “would destroy 70-plus years of painstaking work across multiple administrations, Republican and Democratic, to create perhaps the most powerful and advantageous alliance in history.” 

Even though NATO’s original rationale evaporated when the Soviet Union imploded, it continues to be the most sacred of cows inside America’s policy elite.
But Trump isn’t the real problem, even though his vulgar, vain, erratic, and needlessly offensive behavior has made a difficult situation worse and to no apparent benefit. 

Rather, the real problem began as soon as the Soviet Union collapsed because it removed the principle rationale for a deep U.S. commitment to European security.
Remember, an alliance such as NATO isn’t a country club whose members just like to hang out together, eat nice meals at annual summits, and talk about world affairs. 

At its core, NATO is a formal commitment to send one’s citizens to fight and possibly die to defend other members of the alliance. 

Such a pledge should be offered and maintained only when doing so is vital to one’s own security.
So forget all the pious rhetoric about “shared values,” a “rules-based order,” and a “trans-Atlantic community”—because that is mostly just window dressing. 

The real reason the United States got deeply involved in European security in the past is because it thought it was in the country’s interest to prevent any single state from dominating Europe and controlling its abundant industrial might. 

The United States entered World War I and II in good part to prevent Germany from achieving that goal because U.S. leaders feared that such a state might be more powerful than America and might try to interfere in the Western Hemisphere in ways they would find inconvenient or dangerous.
The same logic explains why the United States helped form NATO in 1949 and kept several hundred thousand U.S. troops in Europe for much of the Cold War. 

The aim was to prevent the Soviet Union from conquering Europe, absorbing its economic and military potential, and using this enhanced capacity against the United States. 

Doing most of the heavy lifting to protect Europe was not an act of philanthropy on America’s part because containing Soviet expansion was very much in its self-interest.
The core strategic challenge facing NATO today is structural: There is no potential hegemon in Europe today, and none is likely to emerge anytime soon. 

In other words, there is no country that has the combination of population, economic might, and military power that would allow it to take over and govern the continent and mobilize all that potential power. 

Germany’s population is too small (and is declining and aging), and its armed forces are much too weak. 

Russia is not the wreck it was in the 1990s, but it is still a pale shadow of the former Soviet Union, and its long-term economic prospects are not bright.
Moreover, Russia’s population is currently about 140 million (and is projected to decline as well), while NATO’s European members have a combined population in excess of 500 million. 

NATO Europe has a combined GDP exceeding $15 trillion; Russia’s is less than $2 trillion. 

To put it differently, Russia’s economy is smaller than Italy’s. 

And don’t forget that NATO’s European members spend three to four times more than Russia does on defense every year. 

They don’t spend it very effectively, of course, but the idea that Europe lacks the wherewithal to defend itself against Russia simply does not stand up to close scrutiny. 

Need I also mention that France and the United Kingdom also have nuclear weapons?
Given all that, it is far from obvious why the United States cannot gradually turn the defense of Europe back over to the Europeans. 

Faced with such awkward realities, NATO’s die-hard defenders point out that America’s NATO allies have demonstrated their value by fighting with the United States in places like Afghanistan. 

There is no question that they have sacrificed money and lives in this joint effort, and Americans should be grateful for their contributions. 

But allied support was never essential: The United States did most of the heavy lifting and could have fought the entire war on its own had it wished. (It is worth remembering that the George W. Bush administration declined European offers to help during the initial toppling of the Taliban because it understood that working with its NATO partners would have impeded the U.S. operation.)
By contrast, none of America’s NATO allies can presently undertake any serious military action without significant support from Uncle Sam. 

For this reason, NATO today is more protectorate than partnership, which is why Trump keeps asking whether being in the alliance is still in America’s interest. 

And he’s hardly the first U.S. leader to issue forceful complaints about Europe’s unwillingness to take greater responsibility for its own defense. 

In 2011, former Defense Secretary Robert Gates predicted that NATO would face a “dim if not dismal future” if its European members didn’t do more, warning that “there will be dwindling appetite and patience in the U.S. Congress — and in the American body politic writ large — to expend increasingly precious funds on behalf of nations that are apparently unwilling … to be serious and capable partners in their own defense.” 

Barack Obama voiced similar concerns in June 2014, even as he sought to rebalance U.S. forces to Asia.
No wonder Europeans are genuinely worried that the United States might leave. 

U.S. leaders have flirted with this idea in the past (as in the Mansfield Amendment of 1971), but threats to withdraw were never very credible so long as the Cold War continued. 

They are today, however, and the Europeans know it.
Meanwhile, China’s rise continues to draw U.S. attention away from Europe and toward Asia, and there is no reason to think that this trend will stop. 

China is likely to be a more formidable rival than the Soviet Union ever was, so one suspects that America’s willingness to commit substantial resources to Europe’s defense will continue to decline.
There is one final rationale for a continued U.S. commitment to Europe, however, although both Americans and Europeans are often reluctant to acknowledge it openly. 

As Josef Joffe noted in Foreign Policy some years ago, the U.S. presence in NATO has long served as Europe’s “pacifier.” 

As long as the United States was fully engaged in Europe and central to NATO, rivalries inside the alliance were muted, and there was little danger that they might turn into full-fledged security competition. 

If the United States were to withdraw, however, European foreign policies might gradually renationalize, opening the door to renewed suspicion, arms races, and possibly even war at some point in a more distant future.
Such views run counter to claims that a half-century of peace and the creation of the European Union have transcended old-style national rivalries, created a new European identity, and rendered war in Europe unthinkable. 

But given political trends in Europe today—and in particular, the re-emergence of powerful nationalist sentiments in several countries—such optimism seems much less reassuring. 

From a European perspective, therefore, keeping the United States in would provide a residual guarantee against the re-emergence of major-power competition among EU member states and a bit more reassurance against a resurgent Russia, at least in the short to medium term.
Put all these factors together, and one can see the vague outline of a new trans-Atlantic bargain. Looking ahead, the United States is going to focus primarily on China. 

Washington will want Europe to take charge of its own defense so that the United States can devote more resources to Asia, but it will also want to make sure that Europe’s economic dealings with China do not help Beijing compete more effectively with the United States. 

In particular, the United States will want Europe to deny China access to sophisticated technologies with military applications and equipment (such as the diesel-electric engines that currently propel some Chinese submarines) that could be used by the Chinese armed forces. 

For their part, NATO’s European members will want the United States to remain part of the alliance (and in an ideal world, to stop doing dumb things such as abandoning the Iran nuclear deal or the Paris climate accord).
Presto—there’s your new trans-Atlantic bargain. 

The United States agrees to remain a formal member of NATO, though its overall military contribution will gradually decline and a European commander will eventually assume the role of supreme allied commander in Europe. 

In exchange, NATO’s European members agree to restrict Chinese access to advanced technology and to refrain from selling them goods that might have direct military applications. 

In short, it means recreating something akin to the old CoCom system that limited technology transfers to the Soviet Union.
I’m by no means convinced this idea would work and not even sure it would be desirable. 

The Cold War CoCom system was a source of considerable trans-Atlantic friction, and the new bargain would require convincing NATO’s European members to forgo some lucrative economic opportunities. 

For these and other reasons, I’ve previously maintained that NATO’s European members would be reluctant to help the United States balance against China and that this issue would eventually become a further source of rancor between the United States and its European partners. 

After all, China is a long way from Europe, and Sino-American competition will mostly play out in Asia, where Europe has little reason to get involved.
But I’m not so sure about that anymore. 

European concerns about Chinese ambitions have grown in recent years, as have their fears about a total U.S. withdrawal. 

And if the United States is really serious about limiting China’s power, having Europe on board—at least in the economic realm—would obviously be desirable. 

So this arrangement might provide NATO with a strategic rationale it has lacked since 1992 and keep the trans-Atlantic partnership going for a bit longer. 

Heck, it might even be enough to convince Trump to stop bad-mouthing NATO every chance he gets. But I wouldn’t bet the farm on that either.

China told to back off: China hits roadblocks in Central Europe

Tough competition laws and investment from the bloc slow Beijing’s infrastructure push.
By LILI BAYER

China's Trojan horse Viktor Orbán

BUDAPEST — China’s seduce-and-divide strategy in Central Europe is getting a reality check.
For years, Beijing has promoted heavy investments and a particular diplomatic format — called 16+1 — to build its influence with a cross-section of 16 Central and Eastern European countries, some that belong to the EU or NATO, some to neither. 

Chinese Premier Li Keqiang and Hungary’s Prime Minister Viktor Orbán on Monday open the sixth China-Central and Eastern Europe summit in Budapest.
This push has set off alarm bells in Brussels, in particular about Beijing’s activities in the Balkans. But it is now also running into regulatory, financial and political hurdles, highlighting possible limits to Beijing’s economic and diplomatic influence in Europe.
China’s “One Belt, One Road” program has pumped money into infrastructure, logistics and transportation networks to allow Chinese products easier access to European markets. 

Chinese officials estimate that the country has invested over $8 billion (€6.7 billion) in Central and Eastern Europe. 

This region of some 120 million is relatively new and unknown to the Chinese, but trade is growing: Last year bilateral trade between China and Central and Eastern European countries was up 11 percent from 2011.
As much as Beijing envisioned 16 Central and Eastern European countries as a cohesive entity that could work together to implement joint projects, in practice they have different priorities and operate under different legal regimes. 

The EU members among them are less welcoming to Chinese investment.

For Hungary, the host of this week’s summit and the country that absorbs the most Chinese investment in Central and Eastern Europe, Beijing is a source not only of capital but of political leverage that could play to Orbán’s advantage as his government’s relationship with EU institutions become more tense.
“As a country that cooperates with the EU, China — if it notices us, because there’s the problem of size, the problem of the difference in our sizes — can quite confidently say that they have an interest in Hungary being strong in the European Union,” Orbán said in July in his annual speech at Băile Tuşnad (Tusnádfürdő), Romania.
But China faces significant challenges as it tries to push through its plans in the region.
“Chinese investment in EU members of the 16+1 has remained limited,” said Tamás Matura, an assistant professor at the Budapest-based Corvinus University. 

“Some countries have not received any new major Chinese investors in the last five years.”
China has had more success in Western Balkan countries like Serbia, Montenegro and Bosnia and Herzegovina, “where EU funds are not available and EU regulations are not applicable,” he said.
Western Balkan leaders have warmly welcomed Chinese economic initiatives and worked to build friendly ties with Beijing. 

In Serbia, the region’s largest beneficiary of Chinese investment, China has bought factories and provided funding for roads, bridges, energy projects and railways.
“There are no problems in our economic and political relations, we are always on the same side, and when China has something to say, we are always on the side of China,” Serbian President Aleksandar Vučić said in May.
China’s flagship project in the region is the planned Belgrade-Budapest high-speed rail link, with construction work on the Serbian stretch expected due to begin this week. 

The modernized railway would enable Chinese goods coming through Greek ports to quickly move from Serbia into the EU.
Currently, the journey between the Serbian and Hungarian capitals by rail takes eight hours. 

The planned railway would allow passengers and cargo to travel up to 200 kilometers per hour, cutting travel time to less than three hours.
Progress on the project has been slow. 

The Export-Import Bank of China is expected to lend about 85 percent of the funds for the €2.4 billion-project, and an agreement between China and Hungary over the railway raised concerns within the European Commission earlier this year that the planned tender process may not be in compliance with EU rules.
“The EU welcomes investment — whether domestic or foreign — as long as it is compatible with EU law,” the EU Delegation to China said in a statement in February regarding the Belgrade-Budapest railway project.
“It is standard practice for the Commission’s services to assess the compliance of major public contracts with EU law. Against that backdrop, a dialogue with the Hungarian authorities, at technical level, is ongoing in order to seek some clarifications,” the delegation wrote.

Analysts say China is also likely to face challenges when attempting to implement projects in other Central and East European states that are members of the EU.
The bloc’s newer members are not only bound by EU competition rules, but also receive significant infrastructure funding from the bloc.
China’s interest in the Baltic states “focuses on transportation and logistics,” with Latvia hoping to offer its ports and railway network to help Chinese goods reach Scandinavian markets, said Una Aleksandra Bērziņa-Čerenkova, who heads of the New Silk Road program at the Latvian Institute of International Affairs.
Nevertheless, she said, “under the current situation and the availability of the EU funds it is difficult to see a viable project that could require Chinese loans.”
“We cannot guarantee Chinese companies would win tenders” due to EU rules, she added.
Despite the hurdles, for some leaders in the region, China is still seen in some respects as a friendlier negotiating partner than Brussels.
“It has become increasingly offensive that a few developed countries have been continuously lecturing most of the world on human rights, democracy, development and the market economy,” Orbán said during a television appearance in May. 

“Everyone has had enough of this; and of these the Chinese are the strongest.”

The Necessary War

U.S. WAR WITH CHINA AND RUSSIA MORE LIKELY AS WORLD POWER SHIFTS FROM WEST TO EAST
BY TOM O'CONNOR

A top NATO official has warned of a shift in global military strength from the Western military alliance to China and Russia, a move he said could make a global conflict more likely.
In an address to the Atlantic Council, a NATO-affiliated think tank, NATO Supreme Allied Commander Transformation General Denis Mercier reportedly said Thursday that the "risk for a major interstate conflict has increased" as non-Western powers, especially Russia and China, rocked the U.S.-led balance of power with their own push for greater military and economic clout. 

Both countries have undergone significant campaigns to revamp and modernize their forces, unsettling the transatlantic coalition.
"China is leveraging its economic power to increase defense spending as a foundation of the growing global power strategy," Mercier said, according to The Hill.
"The neighboring India is following the same path and could reach a comparable status in the medium term. At the same time, Russia is resurfacing with the will to become a major power again, challenging the established order in the former Soviet space," he added.
Mercier's remarks came in direct response to NATO's latest Strategic Foresight Analysis report, which was published last month with the stated goal of analyzing current international policy trends to shape the multinational coalition's strategy through 2035. 

The report claimed that "one of the biggest changes in the world is the increased risk of major conflict" since the release of similar reports in 2013 and 2015.
NATO blamed this on the "actions of a resurgent Russia in Eastern Europe and a more assertive China in the South China Sea using both hard and soft power to achieve political ends." 

Economically, things were changing too, with the report finding that "the global economic power shift away from the established, advanced economies in North America, Western Europe and Japan is likely to continue to 2035 and beyond."
"As power is shifting away from the West toward Asia, the West’s ability to influence the agenda on a global scale is expected to be reduced," the report read.
In September, the Joint Chiefs of Staff chairman, Marine General Joseph Dunford, told the Senate Armed Services Committee at his reappointment hearing that, while he considered North Korea the foremost threat to the U.S. "in terms of the sense of urgency," Russia led "in terms of overall military capability" and he expected China would become "the greatest threat to our nation by about 2025."
Russian President Vladimir Putin and Xi Jinping shake hands during a meeting on the sidelines of the APEC summit in Danang, Vietnam November 10, 2017. In addition to empowering their own nations, Putin and Xi have sought greater ties with one another in order to present a united challenge to U.S. and Western interests.

China's increasingly important role on the international stage was put in the spotlight last month during the quinquennial Communist Party Congress, which made Xi Jinping's consolidation of power and influence apparent for the world to see. 

Xi has rapidly reformed his country's military, which boasted the largest standing army on Earth, to create a 21st-century fighting force capable of protecting Beijing's initiative to establish trading routes across Asia, Africa, Europe and the Middle East, as well as countering the U.S. presence in the Pacific.
Meanwhile, Russia's military rise has been viewed as particularly challenging to Western interests, as the country has already begun to replace the U.S. as the leading power broker in the Middle East and has expanded its influence in Europe. 

Following Vladimir Putin's 2014 annexation of the Crimean Peninsula, NATO assumed a more militant stance toward its rival, and the two have embarked on a major arms race across the region.
Xi and Putin have also sought to establish greater ties with one another in order to provide an alternative to the Western status quo. 

China and Russia have conducted joint drills across the world, from East Asia to the Baltics, and the Chinese Defense Ministry announced Friday that China and Russia would team up for an anti-missile exercise as both countries express opposition to the U.S.'s installation of the Terminal High Altitute Area Defense (THAAD) system in South Korea, according to Reuters.

Don't listen to what Trump says, but look at what he does

Trump reverses on China, NATO, Russia and other campaign promises
By Jill Colvin and Ken Thomas

WASHINGTON -- Donald Trump hasn't been in the White House for 100 days, yet he's already reversed himself on many of his key campaign promises.
In several interviews this week, the president has forged new positions on topics ranging from NATO to Chinese currency manipulation. 

They come as other campaign promises lag, including Trump's vow to build a concrete wall along the length of the southern border and have Mexico pay for it.
"One by one we are keeping our promises -- on the border, on energy, on jobs, on regulations," Trump tweeted Wednesday evening. 

"Big changes are happening!"
Here are some of the areas where a president who prides himself on his flexibility has been willing to dispense with past positions:

NATO
Trump cemented his shift in posture toward the 28-nation military alliance as he stood alongside its leader at the White House on Wednesday.
As a candidate, Trump had dismissed NATO as "obsolete," saying the post-World War II organization wasn't focused on combating the growing threat from terrorism and complaining that too many members weren't paying their fair share toward defence.
He struck an entirely different tone Wednesday, one he had been warming up to during frequent telephone conversations with his world counterparts.
"I said it was obsolete. It's no longer obsolete," Trump said of NATO at a news conference with Secretary-General Jens Stoltenberg after they met in the Oval Office.
Trump still insists that NATO members meet a 2014 agreement to boost defence spending to 2 per cent of gross domestic product within a decade. 

He has backup on this point from an important ally: Stoltenberg.
Currently, just the U.S. and a handful of other countries are meeting the 2 per cent target.

LABELING CHINA A CURRENCY MANIPULATOR
During his campaign, Trump insisted that one of his first acts as president would be to direct his treasury secretary to label China a currency manipulator. 

It was part of a "contract" with American voters that he pledged to fulfil.
Only days ago, in an interview with the Financial Times, Trump reiterated that campaign pledge.
"You know when you talk about, when you talk about currency manipulation, when you talk about devaluations, they are world champions," he said of China. 

"And our country hasn't had a clue, they haven't had a clue."
By Wednesday something had changed. 

In an interview with The Wall Street Journal, Trump declared point blank, "They're not currency manipulators."
Trump told the paper he'd changed his mind because China hasn't been manipulating its currency for months. 

He said a U.S. declaration of Chinese manipulation could jeopardize efforts to secure the country's help in containing the threat posed by North Korea.

EX-IM BANK:
Trump also appears to have grown fond of the U.S. Export-Import Bank, which has been a rallying cry for conservatives who consider it a mechanism of crony capitalism. 

The conservative political network established by billionaires Charles and David Koch has railed against the agency.
Trump opposed the Ex-Im Bank during his campaign. 

But he said in the Journal interview that he supports the bank, which helps U.S. exporters by making and guaranteeing loans. 

Congress allowed the Ex-Im bank's charter to expire in 2015, then eventually revived it over the objections of some conservatives. 

But it still isn't able to conduct major business due to vacancies on its board, hurting top exporters like Boeing and General Electric.
Trump told the newspaper he plans to fill two vacancies on the board, adding, "It turns out that, first of all, lots of small companies are really helped, the vendor companies."

RUSSIAN PRESIDENT VLADIMIR PUTIN
As the U.S. relationship with Russia careens from cozy to frosty, Trump is keeping his distance from Russian President Vladimir Putin.
"I don't know Putin," Trump said Wednesday at the joint press conference with Stoltenberg.
Trump has made conflicting statements about his ties to the Russian leader in the past. 

At a press conference last July, he said: "I never met Putin, I don't know who Putin is. He said one nice thing about me. He said I'm a genius."
But during the Republican primary he boasted of their ties. 

He said at a November 2015 primary debate, "I got to know him very well because we were both on '60 Minutes,' we were stablemates, and we did very well that night." 

The two appeared on the same program, but their segments were taped in different countries.
Trump had also previously said the pair met once, a "long time ago."
For Trump, dealing with investigations into possible contacts between his campaign associates and the Russian officials, keeping Putin at arm's length may be the best political play.

U.S. MILITARY PROWESS
The man who once slammed the U.S. military as a "disaster" is singing its praises now that he's in charge.
In an interview with Fox Business Network's Maria Bartiromo that aired Wednesday morning, Trump talked up U.S. military strength, sounding almost in awe of its prowess.
"It's so incredible. It's brilliant. It's genius. Our technology, our equipment, is better than anybody by a factor of five," he said. 

"I mean look, we have, in terms of technology, nobody can even come close to competing."
Just a couple of months ago, the president was bemoaning the military's state at rallies across the country.
"We're going to rebuild out military. Our military is in shambles," he said at a rally in Delaware last April. 

"We're going to make it so big, so strong, so powerful that nobody, nobody, nobody is gonna mess with us, folks."

FEDERAL RESERVE CHAIR JANET YELLEN
During his campaign, Trump was critical of Federal Reserve Chair Janet Yellen, accusing her of keeping borrowing rates low to help rival Hillary Clinton and Democrats. 

Trump said at the time that he would likely replace Yellen when her term as chair ends next year. 

At the first presidential debate in September, Trump said the Fed was "being more political than Secretary Clinton."
But that was then. 

Trump, in the Wall Street Journal interview, left open the possibility of re-nominating Yellen for a second four-year term. 

Asked whether Yellen would be "toast" when her term ends, Trump said, "No, not toast."
"I like her, I respect her," Trump said, adding that they had met in the Oval Office since he became president.