- IOC rejects criticism of Olympics app
- Beijing uses cybersecurity as leverage
- German Research minister urges caution on China cooperation
- Baerbock and Yi meet
- French parliament classifies situation in Xinjiang as genocide
- Massive expansion of high-speed rail network planned
- On every second roof – record expansion of photovoltaics
- Johnny Erling: ration cards, shortages and the right lessons
Beijing and the IOC will celebrate the Winter Olympics with splendor and fanfare. It’s China’s next opportunity to use the big world stage to show the world its best side. Athletes will be mere extras in the big spectacle.
That much is already obvious, even before the Games actually begin. One giveaway is the app that all athletes, officials, journalists, and helpers are required to use – otherwise, they won’t even get access to the competition venues. An investigation uncovered security gaps in the app. Instead of addressing them, however, the IOC is brushing concerns aside, as Marcel Grzanna writes. This example reveals the problems that arise when major sporting events are awarded to authoritarian regimes.
Not only the IOC is criticized for its close ties to China. Big international corporations are facing growing criticism if they continue to source products from Xinjiang which are believed to have been made through forced labor. But China is also turning the tables. Currently, authorities are using the cybersecurity law to expose Walmart, Frank Sieren reports. The US retail giant has been reprimanded for alleged security holes on its website. But this is merely a thinly veiled retaliation for Walmart’s decision to partially pull goods from Xinjiang.
International companies find themselves in a quandary: Their countries are passing more and more laws against products made under forced labor – but if they comply, they could invoke China’s wrath. Easy solutions? Not in this case.
I hope you enjoy today’s issue and have a pleasant weekend!
IOC justifies risks of Olympics app: turning a blind eye
The friendship between the People’s Republic of China and Thomas Bach is literally carved in stone. Just last week, a 72-cm stone bust depicting the likeness of the president of the International Olympic Committee (IOC) was erected in the Dongsi Olympic Community Park, just north of the Forbidden City. The face of the former world-class fencer, who is responsible for bringing the Winter Olympics (Feb. 4-20) to Beijing, joins existing statues of some of his predecessors in office. Among them, Juan Antonio Samaranch and Jacques Rogge, who brought the 2008 Summer Games to Beijing.
The stone immortalization is an expression of the Communist Party’s gratitude to Bach. The regime appreciates his tireless efforts to defend the renewed awarding of the Olympic Games to a dictatorship and to parry every attack on the hosts.
The IOC once again proved its reliability as Beijing’s advocate in the middle of this week. The powerful sports organization defended the Olympic app My2022, which has come under criticism. An investigation by the University of Toronto’s Citizen Lab had exposed significant security flaws. But instead of publicly addressing the IT experts’ concerns, the IOC swept the discussion under the rug.
Possible outflow of data and censorship of keywords
The Covid pandemic would demand “special measures” to “protect the participants of the Olympic and Paralympic Winter Games Beijing 2022 and the Chinese people,” an IOC spokesperson told ZDNet, an industry magazine. The My2022 app would support the measures as a health tracker.
The application is mandatory for all accredited athletes, officials, sponsors, journalists, and volunteers. Without registration through My2022, access to the Olympic Games is forbidden. Even to Thomas Bach. However, the investigation has now revealed that the app is designed to leak personal data and voice or text messages. In addition, there are indications that the app can filter and censor specific key terms such as Xinjiang or Tibet.
This suspicion alone should alarm the IOC. Instead, the guardians of the five rings are trying to ease the waves. Users would have control over the app and could change the software’s settings at any time. The major software platforms of Google and Apple had given their permission for the download. Furthermore, no one would be obligated to download the application to one’s own cell phone. Registration could also be made via the website. In practice, however, this would lead to considerable delays in everyday transactions for all involved.
DOSB in contact with the German Federal Office for IT Security
Ron Deibert of Citizen Lab accused the IOC on ZDNet of not taking its responsibility seriously. Instead, the organization hopes that users will minimize personal data risks. However, the researchers see a violation of both Google’s and Apple’s terms of service. Even Chinese data protection laws are said to be violated by My2022, according to Citizen Lab.
This issue also gained the attention of the German Olympic Sports Confederation (DOSB), which is sending 146 athletes to the Chinese capital. On Wednesday evening, a representative of the German Federal Office for Information Security (BSI) was a guest at the digital meeting of the German team. At the regular meeting, DOSB officials “share the latest information with athletes and coaches before the Olympics,” according to the federation. This time, the topic was the My2022 app.
“Our athletes will be provided a smartphone by IOC partner Samsung in Beijing. The BSI recommends using ‘My2022’ on these devices during their stay and to delete the app when returning to Germany and resetting the devices to factory settings,” the DOSB told China.Table in a statement.
To not try and avoid possible data theft and censorship in any way possible is not only against democratic common sense. It also conflicts with the spirit of the Olympic Charter, which the IOC insists on upholding everywhere else. For this year’s Games, however, it is willing to bend its principles until they coincide with Beijing’s authoritarian agenda.
Beijing officials warn athletes not to criticize China
Article 50 of the Charter, for example, guarantees athletes the right to make political statements. The only condition: They are not to be made during competitions or medal ceremonies. During press conferences, on the other hand, they are permitted. Nevertheless, the IOC instructed all participants to comply with local laws. The association also supports Beijing’s position with this statement.
On Tuesday, a representative of the organizing committee BOCOG had issued a warning to foreign athletes: “Behavior or speeches that is against the Olympic spirit, especially against Chinese laws and regulations, are also subject to certain punishment.” The Global Athletes Association accused the IOC of complicity by failing to adequately protect athletes.
On Wednesday, Human rights organization Amnesty International had warned that “the Beijing Winter Olympics should not be used for sportswashing.” (China.Table reported.) This new word refers to efforts to improve a country’s reputation by organizing a major sporting event. If Beijing wants to use the Games as a flagship event, it must release all detained individuals “who are prosecuted and imprisoned for merely peacefully exercising their human rights,” said Julia Duchrow, Deputy Secretary-General of Amnesty Germany.
Walmart case: cybersecurity as leverage
Walmart has been reprimanded in China for cybersecurity law violations. In November, authorities in the tech metropolis of Shenzhen had already identified 19 security loopholes on the company’s Chinese website that could potentially be used to exploit customers. The US company had also failed to respond to complaints from the Shenzhen Public Security Bureau in time and had not fixed the problems.
With the Cybersecurity Law, which will be amended on February 15, China wants to exert greater control, especially over the way customer data is gathered, stored and used by companies. With this, China is closely following the European data protection law.
The Chinese Ministry of Industry and Information Technology urged companies in the country to identify potential exploits in their software and report them via a government website. Chinese companies, such as the ride-hailing service provider DiDi Chuxing, have also been reprimanded on several occasions over Security Law violations (China Table reported). A progressive and sensible approach. At least as long as the rules are not abused by the state to create political pressure against companies.
Audit of Walmart: the timing is no coincidence
The fact that the rebuke against Walmart is now made public is no coincidence. Walmart, the world’s largest retailer, has come under fire in China over the past few weeks. Chinese Internet users had discovered that Walmart’s “Sam’s Club” division was no longer selling products from Xinjiang on its online store. Sam’s Club is a separate section that is only accessible for members.
Dates and raisins from the predominantly Muslim province are now particularly absent there. “Pulling all products from a region without a good reason hides a hidden agenda,” the Central Commission for Discipline Inspection (CCDI) stated in reaction to the surge of online outrage. The authority also accused the US company of “stupidity” and “shortsightedness.” Walmart would now have to expect consequences.
China Quality News, the online mouthpiece of the State Administration for Market Regulation, now even accuses Walmart of repeatedly violating Chinese laws for as long as five years: “From 2017 to 2020, Walmart repeatedly violated laws related to food, health products, advertising and customer rights, and market regulators punished the company in accordance with relevant laws,” the article states.
China is an important growth market for Walmart. The retail chain is not only active in China as an online retailer but also operates 423 stores. In the last fiscal year, which ended on January 31, the US company generated revenue of $11 billion in China. However, this is only just over two percent of its total revenue of around 560 billion US dollars.
Xinjiang: International companies are sitting on the fence
At the end of December, US President Joe Biden had signed the Uyghur Forced Labor Prevention Act, which bans all US imports from Xinjiang. In the province, at least according to the US State Department, up to two million Uyghurs and other Muslim minorities are detained in camps, where, they are used for forced labor, according to US allegations.
Other Western companies such as H&M, Nike, Adidas and Intel have also already been threatened with boycotts after declaring their commitment to respect human rights and working conditions in the region. Intel apologized with an open letter after massive pressure on China’s social media channels. “We deeply apologize for the confusion caused to our respected Chinese customers, partners, and the public.” Unfortunately, the company said, it was forced to comply with US regulations.
Xinjiang is becoming a balancing act for the global economy. According to Sam’s Club customer service, the whole thing was simply a “misunderstanding.” The products were not available due to supply bottlenecks and storage difficulties. But the scandal was already a fact. The hashtag “Sam’s Club Card Cancellation” went viral on China’s social media platforms, and Walmart’s competitors used the media attention to patriotically promote products from Xinjiang.
Tesla is currently experiencing the other side of the medal. The EV manufacturer is facing criticism in the West for opening a showroom in Xinjiang (China Table reported). Tesla CEO Elon Musk has so far refused to comment. In all of these cases, the new data protection law may prove to be leverage to discipline Western companies to bring them back in line with Beijing’s interests.
Stark-Watzinger: careful cooperation with China
Federal Research Minister Bettina Stark-Watzinger has urged caution for scientific cooperation with Russia and China. It “generally makes sense” to cooperate with both countries on major projects, such as the ITER nuclear fusion research project (China.Table reported), the FPD politician said in a Reuters interview on Thursday. “But when a project partner escalates, like Russia currently does, we have to ask ourselves how we handle it in the future,” she added, alluding to the Russian troop buildup on the Ukrainian border.
She also urged caution regarding China. “We are in a systemic competition and represent different values than China. We cannot deny that this also applies to the sciences,” Stark-Watzinger said. In scientific fields with strategic know-how, limits would have to be set. “When it comes to third-party funding from China at German universities, contracts have to be closely examined. We must fundamentally question what happens with this knowledge, is there any undesirable influence?” stressed Stark-Watzinger. Reports have emerged that China is exerting influence on German universities by providing financial support for research projects. The French EU Council Presidency intends to address these issues in its agenda about academic freedom, said the research minister.
Stark-Watzinger wants to prevent technology transfer
“We need to exercise caution, especially when it comes to technology transfer,” she said. Scientific cooperation with China in the field of science must therefore be viewed in a differentiated manner, she added. Scientific cooperation with China should therefore be viewed in a nuanced manner. Cooperation on major challenges such as climate change, for example, would make sense. “But we should not be naive. Moreover, in China, state and science, state and companies are much more intertwined than in our country.” According to the Handelsblatt, the Dutch data analysis company Datenna had pointed out that in 13,000 joint ventures with foreign companies in China, the Chinese government was significantly involved in about 30 percent of all cases.
However, Stark-Watzinger made it clear that it would be a wrong signal to limit the number of Chinese students in Germany. “Exchange is and remains important. It is good when young people come to Germany and experience our pluralistic society and democracy,” she said. According to the Federal Statistical Office, Chinese students were the largest national group of foreign students in the 2020/21 winter semester.
The FDP politician generally spoke out in favor of a continuous review of major international research projects. She also does not expect any objections from her Green coalition partner concerning the continued funding of research on the ITER nuclear fusion reactor. “After all, as a country, we want to move away from fossil fuels. Unlike nuclear fission, there is also no radioactive waste,” she said. Nuclear fusion research is taking place in Germany, for example in Greifswald or Garching – “even after the phase-out of nuclear power. We need to preserve our knowledge about this technology.” rtr/nib
Baerbock talks with Wang Yi
First contact between top diplomats: German Foreign Minister Annalena Baerbock met with her Chinese counterpart Wang Yi via video conference on Thursday. Baerbock and Wang assured each other that their countries’ cooperation should be based on international law. Coordination between China and Germany would be important in dealing with numerous crises.
The German version also includes a reference to the respect of human rights. This detail was missing in the Chinese version. Wang emphasized that the relationship between the two countries is a “win-win cooperation”. Both countries should maintain “the fundamental tone of dialogue and cooperation.”Baerbock had assured that Germany would adhere to the One-China policy.
The meeting thus consisted of the repetition of the same old phrases straight from the diplomatic toolbox of both countries. It offered no major surprises. It thus matched the expectations of a first meeting in a complex international situation. fin
France: Genocide takes place in Xinjiang
The French National Assembly has classified the Chinese government’s human rights violations against the Uyghur minority in Xinjiang as genocide. In a vote on Thursday, the verdict of the deputies was clear. 169 parliamentarians voted yes. There was only one “no” vote.
The result of the vote will now be officially submitted to the French government, which is to formulate a public statement on “the crimes against humanity and of genocide” and take foreign policy measures to end the genocide. However, the vote is not binding for the government. The vote was initiated by the Socialist opposition. But the LREM party of President Emmanuel Macron’s ruling also supported the resolution. “China is a great power. We love the Chinese people. But we refuse to submit to the propaganda of a regime that relies on our cowardice and our greed to commit genocide in front of everyone,” said the leader of the Socialist party, Olivier Faure.
Independent investigation into Xinjiang allegations hampered
The French deputies thus came to the same conclusion as the parliamentarians in Canada, the Netherlands, and Lithuania, as well as the Czech Senate. The governments of the United States and the UK also officially speak of genocide. The Belgian parliament considers the Uyghur people to be at “high risk” of becoming victims of genocide.
According to estimates, about one million Uyghurs are detained in internment camps in Xinjiang. China’s government claims that these camps are training centers to give the local population better opportunities on the labor market. The People’s Republic does not allow independent investigations or studies by the United Nations, EU politicians, diplomats, human rights groups, or journalists.
However, former detainees report torture, rape, and brainwashing. Uyghur exiles accuse Beijing of strict and sometimes brutal means of birth control to prevent pregnancies. grz
Infrastructure to spur economic growth
China plans to build tens of thousands of kilometers of new highways and high-speed railways over the next few years. This is according to the recently published Five-Year plan on the development of a modern transport system, as reported by the state news agency Xinhua. By 2025, the high-speed train network is to be expanded by 12,000 kilometers to 50,000 kilometers. In the same period, nearly 30,000 kilometers of new highways (currently 161,000 kilometers) and 3,400 kilometers of urban subways are to be built (currently 6,600 kilometers).
The expansion of the high-speed network exceeds the railway network of Spain, Japan, France, Germany, and Finland combined, according to the South China Morning Post. While the plans sound impressive, they could also increase inefficiencies. In the People’s Republic, the majority of routes do not operate profitably due to insufficient passenger traffic. Experts also agree that China is once again relying on expensive infrastructure projects to spur economic growth. nib
Record for expansion of rooftop photovoltaic systems
China set a record for building rooftop photovoltaic systems last year. According to Bloomberg, more solar panels were installed in residential areas than in solar parks. The People’s Republic has 108 gigawatts of solar capacity on the roofs of buildings – an increase from 29 gigawatts last year. The construction of solar farms has stalled due to high costs and project delays.
Last year, China launched a pilot program to boost the expansion of solar panels on rooftops. Hundreds of cities and villages are participating. According to Bloomberg, participants are to install photovoltaic systems on:
- 50 percent of the space available on government buildings
- 40 percent of the space available on schools and hospitals
- 30 percent of industrial buildings
- and on 20 percent of the roof area of households in rural areas.
Experts consider the strong expansion of decentralized photovoltaic systems as a positive signal.
In recent months, the price for polysilicon, the base material for solar modules, had risen to a new high. But in the medium term, the price is expected to fall again, analysts say (China.Table reported), which will also bring down the cost of solar expansion in China and other ambitious countries. Despite the strong expansion of renewables, coal, and gas still account for 71 percent of China’s electricity mix. Solar energy accounts for 2.3 percent. nib
Ration cards – China’s second currency
Exactly 30 years have passed since Deng Xiaoping’s legendary inspection tour of China’s south (南巡). In Wuhan, Shanghai, Canton, and Shenzhen, he once again took up the cudgel for an opening-up policy, which was threatened by a relapse into a planned economy. Deng’s trip spark the introduction of stock exchanges and special economic zones, encouraged private initiative, and ended the ideological debate over whether the country was “capitalist or socialist” (姓资姓社). In January 1992, three years after the Tiananmen massacre, which happened on the orders of Deng, the party was on the threshold of its return to old-style dogmatic socialism.
Deng’s plea for market reforms broke up the old structures, but at the same time led to extreme social injustices. They served today’s leader Xi Jinping as an excuse to change course. He did not acknowledge Deng’s trip to the south with a single word in his New Year’s speech. Instead, high-tech and artificial intelligence are to lead his preferred command economy to success. Yet he knows better. He personally suffered under China’s systemic shortage economy and chronic rationing. But control takes priority for him.
Our daughter Anita was born in Beijing at the end of 1981. Her mother was a Chinese citizen at that time. Despite having a German father, Anita was documented as an only child in my wife’s passport according to her mother’s nationality. We received a special pass for one-child families with an accompanying bonus of five yuan (five euros at the time), a bath towel, and soap. Also included were some postage stamp-sized ration cards for buying rationed grain, cooking oil, and cotton.
When I recently came across this collection again, I was reminded of what China owes to the now controversial free-market reforms of the Deng Xiaoping era, which brought an end to shortages that had lasted for more than four decades.
The rationing enforced from 1953 onward became the symbol of China’s planned economy. Just how much, I realized only when I stumbled across a bulky set of documents from the Beijing Grain Bureau, issued at the end of 1991, at Beijing’s Panjiayuan flea market.
This hardcover tome with over 1,600 pages is a treasure trove for economists and historians. The book was publicly peddled when Beijing officially stopped issuing the last Liangpiao grain stamps after 40 years on October 16, 1993.
China’s planned economy was guarded by hundreds of thousands of bureaucrats with increasingly sophisticated rationing decrees. It all began on October 16, 1953, with the Central Committee’s decision to place the buying and selling of grain under a unified state monopoly. Then, on August 25, 1955, the State Council issued detailed regulations for all cities and towns on how much grain (rice, wheat, millet, corn) a city resident was entitled to according to the type of work, gender, and age. For adults, the rations ranged from 12.5 to 17.5 kilos, and for children, from 1.5 to 10 kilos, who received liangpiao. Soon, other foods, meat and vegetables, wool or cloth, and finally commodities and industrial goods of all kinds were also rationed. China’s researchers found, according to the legal newspaper “Fazhi Zhoumo” on December 26, 2013, that there were at least 14,000 different ration stamps. Only officials, official travelers, and soldiers could receive cards valid nationwide. Otherwise, each city and province distributed only regionally valid ration cards.
Travel was impossible without ration cards, especially for China’s peasants. “The Party and the government gained complete control over the daily lives of the urban population,” wrote the 2012 monograph, “Change in China’s Social Life” (中国社会生活变迁高智勇). “Ration cards became symbols of personal identity.” Among the populace, they became known as “second currency.”
In later investigative books, he accused Mao of being responsible for the country’s severe economic and supply crisis and more than 36 million starving Chinese as a result of his disastrous Great Leap Forward and People’s Communes policies from 1959 to 1961. Ration stamps reflected the crisis. The number of rationed products rose to 156 different goods in 1961. Even the capital, which rationed only eight foodstuffs, cotton and cooking oil at the beginning of 1962, had to do the same for 102 goods from mid-June.
Hungarian economist János Kornai (1928-2021) was the first to demonstrate how chronic shortages were systemic consequences of the socialist economy in his 1980 study on the “Economics of Shortage.” The CCP’s planned and special command economy, whose alleged benefits Xi Jinping is again promoting today, was the actual culprit, wrote Kornai, whose thinking influenced China’s reforms in their early stages. His book sold millions of copies, shaped Beijing’s leadership and the first generation of economic reformers, who lose more and more influence today.
The end of shortages thanks to Deng’s reforms in the 1990s suddenly transformed these once loathed colorful ration stamps into collector’s items. Swap meets, special auctions, and price catalogs made them as valuable as stamps. Private collectors opened museums. Li Santai gathered more than 50,000 coupons in his exhibition in southwest China’s Liuzhou until 2014. Even the propaganda paper China Daily smugly remarked after a visit: “Everything was rationed, only the little red book with Mao’s quotes was available without a ration card.” The hype has since died down. The party, which is rewriting China’s history under Xi, doesn’t want to be reminded of how it once ruined the country.
China’s bureaucracy was able to use ration cards to control all transactions in individual households in a system without free movement. But since then, hundreds of millions of peasants have flocked to the cities in search of work, and more than 500 million Chinese were living outside their registered households by the end of 2021. With cash, credit cards and smartphones, everything is readily available for purchase. Beijing needs to change. That’s probably one of the reasons why the People’s Republic is at the forefront of the world’s most advanced surveillance technologies and artificial intelligence.
Although China now has record harvests of more than 650 million tons of grain annually thanks to its farming economy, which has been privately organized again since Deng Xiaoping, and is the world’s largest producer of cotton, vegetables, fruit, or nuts, its leadership constantly fears an agricultural crisis.
Most recently, at the end of December, Party leader Xi warned to not underestimate this risk: “The Chinese people’s rice bowl must be firmly held in their own hands at all times, and the rice bowl must mainly contain Chinese grain” (中国人的饭碗任何时候都要牢牢端在自己手中，饭碗主要装中国粮。). This would also apply to meat and vegetables.
Xi has been driven by this idea since taking office. As early as December 23, 2013, he said at an agricultural conference (在中央农村工作会议上的讲话), “When it comes to the issue of grain security, I immediately remember the grain coupons. They were abolished 20 years ago today. (…) That was a milestone in the reform development of our country. (…) A small, thin piece of paper directly decided people’s right to eat.” Xi wrote that he “still belongs to a generation for whom hearing the word ‘ration cards’ feels like yesterday.” He then warned that China’s long-term agricultural problems should not be ignored “just because we have had good harvests for several years in a row. We must not be naive.” No more than 300 million tons of commercial grain would be offered on the entire global market, he said. “Even if we bought up all of it in the event of a crisis, it would not be enough for even half of China’s annual grain needs. Moreover, we would plunge the global supply and world prices into chaos.”
But eight years later, Xi is returning to socialist models for agricultural planning. He seems to have repressed his earlier insights.
Hungary’s shortage economist Kornai, once an adviser to Chinese reformers, died in Budapest in October 2021 at the age of 94. He had recently criticized the increasingly autocratic regime under Xi. Three months before his death, Korsai settled accounts with Beijing in an essay for the Financial Times. He said he regretted helping to create an anti-reform “Frankenstein’s monster system” in his role as an adviser to China. He also felt responsible. Beijing has so far remained silent about Korsai’s bitter judgment.
Dennis Tak Yeung Hau is stepping down from his post as Group Vice President of Tencent Music Entertainment Group. He cites private reasons for his decision. CEO Ross Liang is taking over some of his responsibilities for the time being.
Randy Jernejcic will be CEO of the first hospital opened by US hospital operator University of Pittsburgh Medical Center in Chengdu. Jernejcic was previously medical director of Beijing United Family Hospital.
Children climb around on a frozen waterfall near the village of Huyu near Beijing. This, too, may be one of the winter sports activities that China hopes to have brought to the masses in the years leading up to the Winter Games. Or maybe Beijingers just realized on their own how much fun can be had on the frozen lakes outside the capital.
China.Table editorial office
CHINA.TABLE EDITORIAL OFFICE
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