- China’s economy between growth and control addiction
- Indimo brings Chinese cars to Germany
- Xi announces sector plans in Glasgow
- China applies for digital pact
- Hong Kong tightens quarantine rules
- Xpeng posts strong numbers
- Tools: new data laws for IT sector
As expected, Xi Jinping called for stronger action on climate change at the climate conference in Glasgow. At home, however, coal production is rising to record levels. That’s how the energy crisis is to be tackled. The power shortage, along with a host of other problems, is putting pressure on domestic growth. From supply bottlenecks to tech crackdowns and mountains of debt in the real estate sector – the mood in Beijing, Shanghai, and Guangdong is turning sour. Felix Lee has taken this opportunity to take a closer look at the state of the Chinese economy and found that President Xi Jinping’s leadership is the root of most problems. Looking to the future, the question, therefore, arises: Is China’s strongman sacrificing China’s growth to his obsession for control?
Indimo takes a different approach to its business model. The car importer sells Chinese cars in Germany – and with success. Despite the Covid pandemic, Indimo’s sales numbers are soaring. These are cars of European quality paired with Chinese bling-bling. Christian Domke Seidel, however, has identified a different reason for its sales success.
Last but not least, I would like to recommend today’s tools section: It looks at a draft published by the Chinese Ministry of Information. The draft specifies which measures companies will have to take in the future when it comes to storing, processing, and transmitting their data.
I hope you enjoy today’s issue!
Is Xi’s obsession for control stifling growth?
The port of Ningbo-Zhoushan is located about 250 kilometers south of Shanghai. It is the third-largest cargo port in the world. Almost 1.2 billion tons of goods were handled there last year alone. On August 11, one of the port’s workers tested positive for Covid. The man had been double-vaccinated with the Chinese Sinovac vaccine, and also showed no symptoms. Nevertheless, before dawn, authorities closed the entire Meishan terminal, including the associated bonded warehouse. Large parts of the port were closed for three weeks. The container backlog has still not been cleared.
In a globally coordinated just-in-time production, it only takes one Covid case in China – and all global trade comes to a grinding halt. China is the largest producer of both consumer goods and industrial intermediate products. At the same time, the Chinese leadership is adhering strictly to its “zero-covid” strategy – it reacts to every single case with massive restrictions. In return, it is ready to accept high economic losses. But the central government is not only cracking down on pandemic control.
Whether it is breaking up the recently booming tutoring sector, rigidly regulating equally highly successful IT corporations, or managing the crisis of the highly indebted Evergrande real estate group – unlike its predecessor governments, for whom economic growth was a top priority, China’s leadership under Xi Jinping is apparently not afraid to tackle problems with rules and bans. The leadership has had enough of “irrational expansion of capital” and “barbaric growth,” the Chinese state media blatantly say.