China’s new space science plan + BRICS+ Summit + Steel exports

China pulled off a balancing act this week in its first mid- to long-term plan on space science, as our Senior Analyst Antonia Hmaidi says: “The plan lays out ambitious targets on space science missions but does not mention military issues of concern to Western countries. As such, it is emblematic for a China that wants to be perceived as a great power but is also worried about providing too many details that would enable US restrictions.”

Bilateral relations between regional rivals China and India appear to be thawing, with Xi Jinping and Narendra Modi holding their first bilateral meeting since 2019 at the BRICS summit in Kazan, Russia. “While not much information is available on the Sino-Indian deal on patrolling arrangements along the so-called Line of Actual Control in their shared border area, its announcement one day before the BRICS+ summit in Kazan allows for some positive headlines related to the relevance and efficiency of the enlarged organization,” says MERICS Analyst Eva Seiwert. “

Cheap steel and steel-intensive exports from China are likely to surge, including to the EU, as China’s demand for steel drops below half of global consumption and its overcapacity problems worsen. Jacob Gunter, Lead Analyst at MERICS: “While the share of steel consumption in China going to buildings and infrastructure has been steadily declining, the share going to machinery has risen. Europeans should prepare not only for the flood of steel but also for China-made machinery, now cheaper through low-price steel, to be a source of fierce competition.”

Beijing may hope to revive business confidence by swiftly pushing out the first draft of its new Private Economy Promotion Law, but the proof of concept will be in its implementation. “Getting the draft through the pipeline so quickly is significant as a signal. The government needs to support the private economy,” says Katja Drinhausen, Head of Politics and Society at MERICS. “But the big challenge is reconciling top-level ambitions to reignite momentum in the private sector with realities on the ground – especially at the cash-strapped local level.”

Read the latest issue of MERICS China Essentials on our website: https://merics.org/en/merics-briefs/chinas-new-space-science-plan-brics-summit-steel-exports