Editor's Note: Greetings! Two events this week underscore the critical importance of China's participation in global cooperation and the complex challenges China faces. This week, the AI Safety Summit took place in the UK, where China, the United States, and the European Union agreed to cooperate. In a speech directed at Indian Ocean-Pacific nations, U.S. Treasury Secretary Janet Yellen stated that the United States has no intention of forcing Asian countries to choose sides. Enjoy your read and have a great weekend.

▶︎ Focus

AI Safety Summit: A Multilateral Approach

According to the Reuters, the AI Safety Summit, held in the UK on 1st November, marked a crucial moment in the global quest for responsible AI governance. With participants representing more than 25 countries, the summit demonstrated the rising concerns about the unchecked development of artificial intelligence (AI) and its potential existential threats. This shared unease led to a call for international cooperation and the establishment of regulations and safeguards.

China's active participation in the summit, alongside the United States and the European Union, is particularly noteworthy. The summit extended an invitation to China due to its essential role in advancing artificial intelligence (AI) and its prominent position within the AI landscape. Wu Zhaohui, China's vice minister of science and technology, expressed Beijing's readiness to increase cooperation on AI safety, emphasizing the need for an international "governance framework." This inclusive approach recognizes that countries, regardless of their size or scale, have equal rights to develop and use AI, reinforcing the concept of shared responsibility in the AI ecosystem.

The "Bletchley Declaration" signed by the participating nations, outlined a comprehensive agenda. It emphasized the need to identify shared concerns related to AI risks and foster a deeper scientific understanding of these challenges. The agreement also called for the development of cross-country policies to mitigate AI risks. The summit, held at Bletchley Park, the historical site of Britain's World War II code-breakers, underscores the critical nature of AI safety in the 21st century, where the threat landscape has evolved from physical conflicts to technological challenges.

Concerns about AI's impact on economies and society gained significant attention when OpenAI made ChatGPT, a natural language processing AI model, available to the public. The fear of machines achieving greater intelligence than humans, potentially leading to unintended consequences, prompted governments and officials to chart a path forward. The challenge is to establish fair and effective rules and oversight without stifling AI's potential before it reaches its zenith. The summit discussions included suggestions for a "third-party referee" that could sound the alarm when AI risks develop.

Yellen's Perspective on U.S.-China Relations

According to the Reuters, on Thursday, U.S. Treasury Secretary Janet Yellen delivered a speech to the Indo-Pacific region, reassuring Asian countries that the U.S. does not intend to force them into choosing sides in the ongoing U.S.-China dynamics. She pointed out that the intricate Asian supply chains and deep economic interdependencies with China make such a move undesirable, as it could have significant negative global repercussions

Later this month on 11th to 17th , the 30th Asia Pacific Economic Cooperation Summit (APEC), will be hosted by the U.S. in San Francisco. President Xi was invited, yet, the attendance has not been confirmed.

Complexities and Importance of China in International Collaboration

China's active involvement in the AI Safety Summit and its recognition as a key player in the global AI landscape underscore its significance in international collaboration. The invitation from the summit is a testament to China's significant investments, extensive research initiatives, and remarkable progress in the field of AI. Some British lawmakers have raised questions about China's presence, given Washington and many European capitals concerning Chinese involvement in technology discussion. However, the UK, as the host of the event, finds itself in a "middle grounded" diplomatic position. Jane Hartley, the U.S. Ambassador to London, clarified that the initiative was a "UK invitation, not the U.S."

This indicates the intermediary role of the United Kingdom in AI diplomacy while also confirming the complex situation that China currently faces in promoting global cooperation.

On the economic front, Yellen's remarks underscore the recognition of China as a vital player in the global economy. The complexity of Asian supply chains and the deep economic ties between the region and China highlight China's significance in international trade and commerce. Yellen's assertion that the full decoupling of the U.S. and Chinese economies is impractical further underscores China's centrality in international economic relations.

▶︎ Hot Topics

>>Xi meets Scholz via video link

Chinese President Xi Jinping on Friday met with German Chancellor Olaf Scholz via video link, Xinhua reported.

Noting China-Germany relations have entered the second 50 years, Xi said that China and Germany, as all-round strategic partners, had worked together in the spirit of mutual benefit and grown together in the spirit of mutual learning and exchange.

"This is the valuable experience of the smooth development of China-Germany relations over the past decades, which should be cherished and passed on by both sides," Xi said, describing China-Germany cooperation as open and pragmatic, which has been continuously enriched and developed.

Scholz said that over the past year, a new round of Germany-China governmental consultations has been successfully held, dialogue and exchanges at all levels have been rapidly resumed, economic and trade relations have become closer, and cooperation projects have been continuously promoted, showing more possibilities and broad prospects of deepening bilateral relations.

 >>Xi meets Greek prime minister

Chinese President Xi Jinping on Friday met with Greek Prime Minister Kyriakos Mitsotakis in Beijing.

Noting China and Greece are partners in jointly building the Belt and Road and in exchanges and mutual learning among civilizations, Xi pointed out that China-Greece relations have enjoyed sound development and sustained growth since the establishment of diplomatic ties more than half a century ago.

China cherishes its traditional friendship with Greece and stands ready to work with Greece to adhere to strategic guidance, openness and cooperation to promote bilateral comprehensive strategic partnership to shine in a new era, Xi said.

Noting President Xi's successful state visit to Greece in 2019 left a deep impression on the Greek people, Mitsotakis said since then, Greece-China relations have maintained a strong momentum of development, and the economic cooperation between the two countries has yielded remarkable results.

Greece is willing to continue to promote the high-quality Belt and Road cooperation and further tap potential and expand mutually beneficial cooperation in such fields as shipbuilding, shipping and clean energy, and welcomes more Chinese tourists to visit Greece, Mitsotakis said.

 >>China opposes abuse of trade remedy measures

China firmly opposes protectionist actions through the misuse of trade remedy measures, said the Ministry of Commerce at a news conference in Beijing.

In response to a question regarding the European Commission's latest plan to enhance the competitiveness of its wind power industry, including conducting a review of the development of China's wind power sector, ministry spokeswoman Shu Jueting said China and the European Union are both committed to promoting green transformation and addressing climate change.

Shu said that wind power equipment manufactured by Chinese companies has played a significant role in the EU's green transition and emission reduction efforts in recent years.

"Collaboration between companies from both sides in the wind power sector is advantageous for achieving mutual benefits, enhancing people's well-being and collectively addressing climate change," said Shu, adding China will closely monitor the subsequent actions taken by the EU.

  >>Euro zone economy shrank 0.3 percent y/y in Q3- Eurostat

The euro zone economy shrank 0.3 percent year on year in the third quarter, less than the 0.4 percent contraction estimated earlier, the EU's Statistics Office said on Friday in its third and final revision of the data, Reuter reported.

Eurostat confirmed that quarter-on-quarter, the economy of the then 17 countries sharing the euro grew 0.1 percent in the three months to September after a 0.3 percent expansion in the second quarter.

   >>Zelensky Struggles to Keep Ukraine in the Fight

Times has published a long read on Ukrainian President Volodymyr Zelensky's recent visit to Washington at a time when the focus of Ukraine's allies in the U.S. and Europe, and of the global media, quickly shifted to the Gaza Strip.

"It's logical," Zelensky was quoted as saying to the Magazine. "Of course we lose out from the events in the Middle East. People are dying, and the world's help is needed there to save lives, to save humanity." Zelensky wanted to help. After the crisis meeting with aides, he asked the Israeli government for permission to visit their country in a show of solidarity. The answer appeared the following week in Israeli media reports: "The time is not right."

 >>TikTok CEO to Meet Top EU Chiefs

According to Reuters, TikTok CEO Shou Zi Chew will meet EU industry chief Thierry Breton, EU digital chief Vera Jourova and EU antitrust chief Didier Reynders in Brussels next week, TikTok said on Friday.

The visit by Chew, his second to Brussels, comes amid heightened regulatory scrutiny of TikTok's role in the proliferation of disinformation following Hamas' attack on Israel last month and the Israel-Hamas war in Gaza.Chew will meet Breton on Nov. 6 and Jourova and Reynders on Nov. 7, a TikTok spokesperson said.

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EU's "de-risking" Policy Could Become a Risk Itself

Author: Yan Shaohua

Source: The Center for China-Europe Relations, Fudan University

The adoption of a recommendation on critical technology areas for the EU's economic security, for further risk assessment with EU member states by the European Commission on Oct 3, is seen by many as a concrete move by the EU to "de-risk" its economy from China's.

The EU has said the recommendation relates to the assessment of technology risk and technology leakage. After being referred to by European Commission President Ursula von der Leyen in March this year, "de-risking", as a term, has gained in popularity in the EU's policymaking circle, as well as among British politicians. When von der Leyen put forward the idea in a speech on EU-China ties in March, she might not have expected it to become so catchy.

Over the past few months, there have been intensive discussions on China in the European Union, with "de-risking" finding mention in some of the most important policy documents on China, including the European Economic Security Strategy, German National Security Strategy, and European Council statements.

"De-risking" is also becoming the preferred term, instead of "decoupling", for US politicians when referring to future Sino-US relations. Other G7 leaders, too, are using the term "de-risking" to describe their countries' future ties with China. Even the latest G7 Summit communique mentions "de-risking". For the EU, "de-risking" seems to have become the new prism through which to look at its relations with China.

But while everybody is talking about "de-risking", few have paid attention to the risks inherent in the "de-risking" approach itself, because it has psychological, practical and political dimensions.

At the psychological level, the term "de-risking" carries negative connotations for both Chinese and European people. Since "de-risking" is mainly associated with China, it puts China in an uncomfortable position, giving the Chinese people the impression that their country itself is a risk. It sounds like another form of "China threat" theory which, according to Joseph Nye, Harvard political scientist, could become a self-fulfilling prophecy.

A Third-Time Lucky? China's Push to Internationalise the Yuan

Source: Bruegel Think Tank

Authors: Alessia Amighini and Alicia García-Herrero

Western concerns that the renminbi could rival the dollar as an international currency contrast with underwhelming numbers in terms of global settlements in renminbi and with the experience of China's two main previous failed attempts to achieve renminbi internationalisation. However, China is moving towards a more realistic plan for renminbi internationalisation, focusing on China's strengths in trade and financing. China is now the main trading partner for a very large number of countries and has become a major creditor for a good part of the Global South. This, together with the increasingly frequent restrictions on the use of the dollar, is strengthening the renminbi.

The cross-border use of the renminbi for trade settlements and financing (Chinese banks' overseas loans denominated in renminbi and official renminbi swap lines offered by the People's Bank of China) has been on the rise since 2022. The increase is notable considering that the renminbi has been depreciating since January 2023 and China's economic performance has been underwhelming. However, the use of the renminbi as investment currency has declined since 2022, in terms of both the share of foreign-exchange reserves denominated in renminbi and the share of Chinese onshore assets held by foreign investors.

The current push is so far proving successful compared to previous attempts, but it remains hard to tell if China will succeed in this renewed attempt to internationalise its currency through use of its heavy weight among trading nations. Obvious constraints remain that could hold back full internationalisation of the renminbi, especially the absence of full capital account convertibility. Nevertheless, China's somewhat heterodox approach to internationalising its currency could succeed given the ongoing placing of restrictions on use of the dollar. How the dollar, the euro or the international monetary system may be further affected by the rise of the renminbi is a major policy question that must be explored further.

Please note: the English version of this issue is slightly different from our Chinese one. The views and opinions expressed in this article do not necessarily reflect the official position of the CCCEU.