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US risks enraging China by easing limits on Taiwan relations



Mike Pompeo, US secretary of state, has lifted longstanding restrictions that limit US diplomatic relations with Taiwan, in a move that is likely to incense China days before the Biden administration takes power.

Washington cut ties with Taiwan in 1979 in favour of those with China, which sees the self-governing and democratic island as its own territory. While successive US administrations have loosened diplomatic restrictions and sold weapons to the island, Mr Pompeo’s action goes further than any in the past.

“Today I am announcing that I am lifting all of these self-imposed restrictions,” Mr Pompeo said in a statement on Saturday. He added that government agencies should consider all such “contact guidelines” previously issued by the Department of State to be “null and void”.

While the US has no official diplomatic relations with Taiwan, contacts between the two are governed by an unpublished set of codes that limit where officials can meet and even how correspondence is conducted. 

“The United States government took these actions unilaterally, in an attempt to appease the Communist regime in Beijing,” Mr Pompeo added. “No more.”

Mr Pompeo, who is due to visit Europe next week to hammer home his concerns over China, has led the Trump administration’s hawkish turn against Beijing, demanding allies side with the US and declaring an end to “blind engagement” with the Asian power.

China did not immediately comment on the move. But it has condemned this week’s announcement that Kelly Craft, US ambassador to the UN, would visit Taiwan next week as “crazy provocation”. It suggested the US was playing with fire.

The twin moves appeared to mark a victory for Taiwan, which has spent months lobbying for closer ties. Taiwan’s diplomatic office in Washington said the state department’s action reflected “the strength and depth” of the Taiwan-US relationship and that it looked forward to “broadening” the partnership in the months and years ahead. 

Elbridge Colby, one of the architects of the Trump administration’s tougher stance against China, said the move freed the relationship from “anachronistic bureaucratic structures” and argued it would enable the pair to work “more effectively” in defence. Both the Trump and Obama administrations sold large weapons packages to the island.

But Evan Medeiros, a former Obama official who worked on US-China relations, described the decision as a “public relations stunt of the first order” that would inflame Beijing and harm relations with Taiwan.

“It does nothing two weeks before inauguration but politicise the Taiwan issue — to Taiwan’s detriment,” he said. “If Pompeo feels so strongly why didn’t he do this a year ago and stay to manage the fallout?”

Mr Medeiros added that Beijing would probably wait to see what the incoming Biden administration did before taking any retaliatory move.

Bonnie Glaser, Asia expert at the Center for Strategic and International Studies, described the policy change as “a precedent-setting decision” that an outgoing administration should not take during its final days in office.

“Taking it now seems intended to box in the Biden team,” she said.

Critics have accused the Trump administration of attempting to hamper the Biden team’s room for manoeuvre. The US last month broke with convention by recognising Western Sahara and is reportedly considering designating Cuba as a state sponsor of terrorism and Yemen’s Houthi rebels as a terrorist organisation, a move some say would complicate efforts to resolve the conflict.

David Stilwell, top Asia official at the state department, told the Financial Times the Taiwan decision was the result of a lengthy review of the relationship. He denied the decision was rushed out in the waning days of the administration. “It’s been busy. We’ve had a lot to do,” he said.

“We have been trying to rectify the overall US-China relationship and this is one more step in that direction,” he added. He urged the Biden administration, which has vowed to take a tougher line on China than previous Democratic administrations, to maintain the new policy.

A Biden transition official said the president-elect had made it clear on the campaign trail that he was committed to the 1979 Taiwan Relations Act, which has defined relations with the country, and to the one-China policy.

“Once in office, he will continue to support a peaceful resolution of cross-strait issues consistent with the wishes and best interests of the people of Taiwan,” the official said.

“He has long said that American support for Taiwan must remain strong, principled, and bipartisan, and he plans to work to ensure that.”

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Emerging Markets

Apple Car expected to shake up auto industry worldwide




Global information technology leader Apple is highly likely to break into the automobile sector. The US company is reportedly planning to create self-driving electric vehicles manufactured by an automaker under a tie-up agreement using a business model similar to its iPhone production.

A potential Apple Car, if realised, is thought certain to affect the competitive landscape of the auto industry. 

Following year-end reports on Apple’s possible entry into the auto market by Reuters and Taiwanese news media, share prices of US and Chinese high-tech companies moved upwards. 

In the US, companies such as Velodyne Lidar, a maker of light detection and ranging (lidar) sensors that act as the “eyes” of self-driving cars, have aroused strong investor attention. In China, investors flocked to Contemporary Amperex Technology, the world’s largest maker of batteries for electric vehicles, and other suppliers of EV-related components.

An Apple Car would be a “mass” of high technologies, said analysts at US and European auto market research firms, suggesting that suppliers of key automobile components may be changed.

The Apple EV project is expected to have a significant impact on the auto industry through the use of smartphone development and production knowhow to design cars and through the horizontal division of production. Apple is likely to focus entirely on designing cars while outsourcing production to companies such as Hon Hai Precision Industry, a top Taiwanese contract electronics manufacturer also known at Foxconn.

Electric vehicles for Chinese ride-hailer Didi, unveiled late last year, are manufactured by BYD Auto © Shunsuke Tabeta

As in the case of iPhones, Apple is expected to devote itself to design work, including self-driving technology, while outsourcing production. The approach is likely to shake the auto industry’s existing business model of vertical integration, in which carmakers engage in the entire process from designing to manufacturing.

The horizontal division of labour is already advancing in China’s auto sector. Baidu, a top Chinese internet company leading the development of self-driving technology, announced this month that it would produce EVs with Zhejiang Geely Holding Group, an automaker in China, on an original-equipment-manufacturing basis.

In addition, Didi Chuxing Technology took the wraps off an EV developed for its service in November. China’s biggest ride-hailing platform, used by 550m people around the world, aims to put 1m units into use by 2025. BYD Auto, a Chinese EV maker proud of its brand, will manufacture the EV for Didi.

This article is from Nikkei Asia, a global publication with a uniquely Asian perspective on politics, the economy, business and international affairs. Our own correspondents and outside commentators from around the world share their views on Asia, while our Asia300 section provides in-depth coverage of 300 of the biggest and fastest-growing listed companies from 11 economies outside Japan.

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Magna International, a top Canadian auto parts supplier that has advanced into production of cars on behalf of automakers, is seen as a leading candidate to manufacture the Apple Car. Foxconn, which has teamed up with Apple in smartphone production, also reportedly wants to win the order.

The Apple project has drawn interest from automakers as well. Hyundai Motor of South Korea said this month that it was in early talks with Apple over a tie-up to develop an EV. A large order for production of the vehicle, if received, would probably enable Hyundai to raise its capacity utilisation rate and stabilise earnings.

But the project may upset the superiority of carmakers at the top of the industry. Automakers may “become Apple’s subcontractors and lose their originality”, warned an executive at a Japanese carmaker.

BYD decided to produce EVs on behalf of Didi because it can expect to profit through increasing output, an auto industry analyst said.

While Asian companies are starting to move in a bid to capitalise on the Apple Car project, a question is whether Japanese groups are prepared for it. There remains concern that Japanese companies will lose the initiative to Chinese and South Korean rivals, as in the case of smartphones and consumer electronics.

A version of this article was first published by Nikkei Asia on January 12 2021. ©2021 Nikkei Inc. All rights reserved

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Brazil approves AstraZeneca and Chinese coronavirus vaccines




Brazil’s health regulator has given the green light to the Oxford/AstraZeneca and Chinese-made Sinovac coronavirus vaccines, paving the way for Latin America’s largest nation to begin an immunisation programme that has been marred by delays and political bickering.

Following a marathon five-hour presentation broadcast live on Sunday, the board of watchdog Anvisa (the Agência Nacional de Vigilância Sanitária) voted unanimously to grant emergency use approval to both vaccines in a country which has the second-highest Covid-19 death toll, at almost 210,000.

“There is only one enemy. Our best chance in this war has to be by changes to social behaviour. Without this, even with a vaccine, victory will not be achieved,” Antônio Barra Torres, head of the agency, said during the event.

Shortly after the decision, a 54-year-old nurse from São Paulo became the first to receive an injection, as health minister Eduardo Pazuello said the country could reach up to 1m people vaccinated a day.

The authorisation follows controversy about the effectiveness of the Sinovac jab, named CoronaVac, which was jointly developed by the Beijing-headquartered company and the Butantan Institute in São Paulo.

After initially disclosing that the jab showed an efficacy of 78 per cent during trials in Brazil, scientists from the biomedical institute earlier this week clarified that the “generalised efficacy rate,” which includes cases with very light symptoms, was just about 50 per cent — barely above the threshold for a vaccine to be considered viable.


Brazil’s population. The government has ordered 254m doses of the Oxford/AstraZeneca vaccine and 100m of CoronaVac

The new data on CoronaVac further fuelled scepticism about the Chinese-made vaccine, which has long been the target of attacks from rightwing President Jair Bolsonaro and his supporters. Some 22 per cent of Brazilians say they would not take a vaccine, in line with Mr Bolsonaro’s own stance, even as infections and mortalities rise.

The emergency approval from Anvisa, legally effective once published in the official government gazette, opens the door for Brazilian health authorities to begin administering injections as soon as this week. It covers 6m doses of CoronaVac imported from China and a batch of 2m Oxford/AstraZeneca jabs yet to be shipped from India, which has just started its own immunisation programme.

To inoculate its population of 210m, Brazil has ordered 254m doses of the Oxford/AstraZeneca vaccine and 100m of CoronaVac, respectively, most of which will be produced domestically. 

However, it is lagging behind not only developed nations but also others in the region, including Argentina and Mexico, which began immunisation programmes last month.

Ministers have said priority will be given to Manaus, the riverside capital of Amazonas state. The health system there has been overwhelmed by hospital admissions and deaths have resulted from a shortage of oxygen supplies.

Concerns have also emerged about the availability of supplies needed to administer the vaccines, particularly syringes.

Critics say the situation is a result of mismanagement by the ministry of health, which Mr Bolsonaro has stacked with military officers often in place of health professionals. Mr Pazuello, the minister, is an active duty general, but with a background in logistics.

“Except for some areas where there are still qualified people, most management roles are occupied by people who do not have the necessary qualifications, and they are unable to implement the machinery to develop already established programmes, such as the country’s immunisation programme,” said Fernando Aith, a professor of public health at the University of São Paulo.

Despite the delays, however, Mr Pazuello has predicted Brazil will “very soon” be exporting vaccines given the country’s pharmaceutical manufacturing capabilities.

In addition to the two vaccines approved on Sunday, the country is also considering purchasing the BioNTech/Pfizer vaccine, but ministers have baulked at the manufacturer’s request for exemption from liability for side effects. 

Brazil’s health regulator on Saturday requested further data on Russia’s Sputnik V vaccine, after finding that minimum requirements had not been met in an application for emergency use submitted by a local drugmaker. 

Additional reporting by Carolina Pulice

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Putin critic Navalny detained on return to Russia




Russian opposition activist Alexei Navalny was detained by police on Sunday evening as he landed in Russia, having returned from Germany where he had recovered from an assassination attempt blamed on the Kremlin.

Mr Navalny, president Vladimir Putin’s best known and most outspoken critic, was detained upon arrival in Moscow, after his flight from Berlin was diverted from Vnukovo airport where hundreds of his supporters had gathered and clashed with riot police.

The 44 year old anti-corruption activist and political organiser was airlifted to Berlin in August after being poisoned with the Soviet-developed nerve agent novichok while on a campaign trip.

He and many western governments blamed the attempted assassination on the Kremlin, which has denied involvement and instead made various claims including that he was poisoned after leaving Russia, or by the CIA.

Mr Navalny’s street protests, exposés of government corruption and political campaigns that have helped unseat Mr Putin’s allies have proven a major irritant to the Kremlin in recent years.

His attempted assassination and Sunday’s arrest come as he and his team prepare for September’s parliamentary election, with support for Mr Putin’s ruling party at record lows.

Announcing his intention to return earlier this week, he said he was not daunted by threats from Russian authorities to arrest him and lock him up, claiming that they were attempting to force him into voluntary exile.

His return marked a direct challenge to Mr Putin’s government, given that his jailing could spark large-scale protests at home and increased condemnation abroad.

“I am not afraid. I know that I am right. I know that criminal cases against me have been fabricated,” Mr Navalny told reporters after his plane landed, in remarks broadcast by TV channel Dozhd.

Minutes later, footage showed him being detained while passing through passport control at Moscow’s Sheremetyevo airport, pausing to kiss his wife goodbye before he was led away by police.

“[He] was taken away by police officers at the border,” said Kira Yarmush, his spokeswoman. “What happens to Alexey, what his status is and where he was taken to is unknown.”

Mr Navalny was detained at the capital’s main airport, after his flight was redirected minutes before landing at its scheduled arrival airport on the other side of the city, where his supporters had gathered.

“Navalny’s reception by the authorities at the airport is the best evidence of how afraid they are of him. They themselves are inflating the importance of Navalny,” Andrei Kolesnikov, chair of the Russian Domestic Politics Program at Carnegie Moscow, wrote on Twitter.

While his plane was the air, police arrested 37 people, including two of Mr Navalny’s closest associates, who were waiting at Vnukovo. Riot officers forced a large crowd of waiting supporters and journalists out of the airport building, where dozens of police vans had congregated during the day.

“Of course, this is quite in the style of Putin — another special operation,” said Tatiana Stanovaya, founder of R. Politik, a Russian political consultancy.

Moscow’s prison authorities have accused Mr Navanly of breaking the terms of a suspended sentence imposed for a 2014 fraud conviction. If found guilty he could be sentenced to three and a half years in jail.

The European Court of Human Rights has ruled that conviction was politically motivated. Russian investigators last month said they had opened a new fraud case against Mr Navalny that carries a maximum 10 years sentence.

His poisoning with a banned chemical weapon provoked condemnation from European capitals, sanctions against six Russian officials and has further soured relations between Berlin and Moscow.

Last month, Mr Navalny published an investigation he said confirmed he was poisoned by the FSB, Russia’s main security service, and then published a recording of what he said was one of the alleged hitmen confessing to the novichok attack.

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