The Christmas season brings more than just contemplative topics. China.Table takes the ongoing dispute over the automotive supplier Continental as an opportunity to look back on what was a difficult year for European-Chinese relations. Amelie Richter’s 2021 in review analyses what has happened in China-EU relations: Brussels is getting snappy, China is becoming more belligerent.
The dispute over CAI, mutual sanctions, and, not the least, China’s aggressive stance towards Taiwan and Lithuania – all these conflicts are also putting the new German government to the test. The Greens, SPD, and FDP are by no means in unison on how to deal with China. While the new Foreign Minister Annalena Baerbock has announced a “value-oriented foreign policy” and is focusing more on confrontation with Beijing, former SPD grandees (Gerhard Schröder, Sigmar Gabriel, Rudolf Scharping) have rallied around Chancellor Olaf Scholz. They are worried about German-Chinese business relations.
One thing is undeniable, after all: Germany has benefited more from China’s economic rise than any other country. Accordingly, the dependence of at least some key sectors on the People’s Republic is relatively high. A conflict that will stay with us in 2022. But perhaps it is also a chance? After all, this dependence is mutual, and Germany has little choice but to join forces with China.
Another year in review focuses on the events in Hong Kong. Fabian Peltsch talks with a former journalist of the newspaper Apple Daily. She recounts the turbulent times before the Beijing-critical paper was ultimately shut down. Looking back at last weekend’s election, she says: “My preferred candidates are all in jail.”
Even though we can’t quite elude serious topics: This is our last issue before the holidays. We wish you a Merry Christmas and a Happy New Year! China.Table will be back on December 28 with an issue between holidays. We will then resume our regular schedule on Monday, January 3rd.
Ms. Leung, you are one of the few journalists in Hong Kong that still gives pro-democracy angles a voice. How did you feel about the general election last Sunday?
That was the first election that I didn’t take part in, nor as a journalist or with my vote. I am reluctant to recognize this type of election as a real, legitimate election. The circle of candidates was limited to well-known patriots. The turnout was the lowest in history.
Was there no candidate you might have considered a compromise?
My preferred candidates are all in jail. You see: Hong Kong has changed completely within a year. The elections are a clear sign of this. The media no longer reports critically about politics. As a journalist, you can hardly find conversation partners who want to speak openly. A system of checks and balances no longer exists. That’s not my idea of democracy.
You worked for Apple Daily, the city’s last major pro-democracy media institution until the editorial office was shut down in the summer of 2021. How did you experience the end of the newspaper?
I was a senior reporter at Apple Daily and was responsible for local news for three years. After the National Security Act was passed, the entire editorial team was under constant stress. We have been attacked from all sides, we were branded by pro-government media outlets as criminals, they were claiming that we are spreading fake news. Then our editor, Jimmy Lai, and our two editors-in-chief were arrested and our editorial office was raided twice by the police. From then on, we expected the government to shut us down every day. We went to work every day feeling like it might be the last. In order not to endanger the employees any further, the board of directors finally ceased operations.
Were you afraid that you might also get arrested?
Rumors spread that individual reporters and certain teams were about to be arrested. Some employees had therefore already quit beforehand. Some even fled abroad. However, I have always felt relatively safe because I was and still am not such a visible journalist compared to others. But things can change suddenly. There is great uncertainty in the city. You don’t know what will happen tomorrow. You have to endure this fear if you decide to stay in Hong Kong.
What are you working on now?
I’m putting together a series about pro-democracy activists and protesters who have been arrested and released again. Most have spent a few months to a year in prison. I want to tell their story: how has their life changed? How did imprisonment affect their families, their studies, their work? Each of these stories is a piece of the puzzle in a larger narrative that needs to be told and archived. In a very practical way, these personal experiences can also be important for people whose trials are still ongoing. So that they know what to expect in prison.
Many activists are very young. How did these people experience incarceration?
Most of them only knew such places from movies. Now we have the situation in Hong Kong that many young people live together with drug dealers and members of the triads in a very small space and that they have to fit into this hierarchy. Of course, criminalization also changes the self-image of these people.
And regular media doesn’t report on these things anymore?
Articles with a pro-democracy focus rarely appear in the mainstream press. You get cynical if you work as a journalist in Hong Kong these days. Nobody wants to say anything anymore or comment on the situation. Anyone who wants to get out of prison on probation must guarantee not to speak publicly about politics. People are muted. All Hong Kong residents are aware of this. Talking to the foreign press is also dangerous after the National Security Law was passed. I could be arrested for this.
What made you decide to give interviews to foreign media regardless?
Maybe I’m naive, but I believe that it is my responsibility as a journalist to keep reporting these things visibly. Others have stopped doing it because, for example, they have a steady job with which they have to feed their children and their families. That’s not the case with me. I am a freelance journalist and am only responsible for myself. I don’t want the people who fought for more democracy to be erased from the collective consciousness.
You finance through crowdfunding and publish your articles mainly on social media channels like Facebook, where you now have 27,000 followers. Is your past at Apple Daily more of a blessing or a curse?
At first, a lot of people didn’t want to talk to me because I worked for Apple Daily. Now it’s almost the other way around: People open up because there aren’t many reporters left who report on pro-democratic issues. All the major newspapers are pro-establishment. Freedom of the press is no longer something I take for granted, but something that you have to fight for. The few journalists who still report stick closely together. There is no longer any competition between us. We’re all sitting in the same boat.
Do you think the protests will continue after the Covid restrictions have been lifted? The general impression outside Hong Kong is that the city has lost its political counterculture.
There is a core of dissatisfaction and a social pessimism that still wants to discharge. I don’t know when and how, but that energy is still there, and it continues to build up. Not everyone pretends that nothing has happened.
What would make you turn your back on Hong Kong for good?
A new law to curb “fake news” is currently being discussed. The definition of fake news is then entirely up to the government. The scope for interpretation is wide. In principle, everything can fall under “fake news”. That would be the point at which free reporting is no longer possible at all. Then I will no longer be able to work either. However, what I learned during the protests is: Be like water, be flexible. There is no point in despairing and breaking down. When the time comes, I will respond accordingly. Until then, I’ll just keep doing my job.
Sometimes there is only a year between success and failure. It was only on 30 December 2020 that an illustrious round of high-ranking politicians gathered for the video call to finalize the China-EU Investment Agreement (CAI). German Chancellor Angela Merkel, China’s President Xi Jinping, President of the European Council Charles Michel, President of the European Commission Ursula von der Leyen, and French leader Emmanuel Macron announced the political agreement for the years-long negotiated EU-China investment agreement on the eve of the New Year. One year later, CAI is practically dead.
And not only that: The leadership in Beijing recently widened a dispute over imports from EU member Lithuania to other member states. The relations between the EU and China are anything but rosy right now. But Brussels, above all the European Parliament, and also the member states are quite determined to assess relations with the People’s Republic more critically. They plan to bear their fangs towards Beijing. A chronology of the “annus horribilis” for EU-China relations.
December 2020: Shortly before the end of the German EU Council Presidency, after about seven years of negotiations, a political agreement is reached for CAI – originally planned as an investment protection agreement. However, no agreement is reached on the protection of investments. Brussels’ negotiators subsequently declare that investment protection is also to be regulated within two years. The EU wants to create a level playing field with CAI: facilitate mutual market access, achieve fairer competitive conditions and limit the transfer of technology from European companies to China. Ratification is scheduled for spring 2022, during the French EU Council Presidency.
January 2021: The EU Commission releases a first short text on CAI towards the end of the month. There is a strong headwind, especially from the EU Parliament: MEPs call it a “hasty agreement” and, above all, criticize what they see as China’s inadequate human rights commitments. “Positive, on the one hand, disappointing in other respects.” business circles say.
February: Brussels unveils a new direction for EU trading strategy. Trade relations must be “reciprocal, balanced and fair”, says EU Commission Vice-President and Trade Commissioner Valdis Dombrovskis, addressing leaders in Beijing. “This means: doing more to level the global playing field, making sure that our partners live up to their obligations,” Dombrovskis says. The People’s Republic would have to make greater commitments in international trade. The EU Commission’s proposals directly mention Beijing several times: “The degree to which China has reformed and opened is not commensurate with its weight in the global economy“. The fact that the government further continues to exert a decisive influence on China’s economic environment leads to distortions of competition that cannot be sufficiently taken into account by the current rules of the World Trade Organization, the EU criticizes.
March: If there is one specific month of 2021 where the situation between Brussels and Beijing changed dramatically – it would be March. In the middle of the month, the EU Commission publishes the long-awaited annexes to the CAI agreement. The details of the deal receive plenty of criticism. In particular, a passage on the possible further restriction of the operations of foreign non-governmental organizations in China is causing uncertainty. The Chinese side’s promises regarding the International Labour Organization’s (ILO) requirements for the protection of human rights are also considered insufficient.
On March 22, the EU imposes sanctions on four Chinese officials and one organization over human rights violations in Xinjiang. Only a day later, Beijing retaliates with a barrage of punitive measures and sanctions to EU MEPs, scientists, and organizations. The European Parliament react immediately and cancel a meeting of a planned monitoring group on the CAI agreement. Since then, the European Parliament’s work on the CAI has been on hold. Berlin and other EU capitals call the sanctions from the People’s Republic “disproportionate”. Josep Borrell, the EU’s High Representative for Foreign Affairs, is noticeably shocked and announces a change in Brussels’ general strategy towards Beijing.
April: Merkel, Macron, and Xi talk on the phone for the first time since the sanctions debacle. The agenda includes climate and Covid issues – an attempt at talks in difficult diplomatic waters.
May: The EU Parliament formally freezes its work on the CAI. It is to be resumed only after a lift of the punitive measures against MEPs. China’s sanctions are “miscalculated”, says MEP Reinhard Bütikofer (Greens), who is among those hit by Beijing’s sanctions. There is now growing realism in the EU Commission about China, Bütikofer said. “Merkel’s China policy is losing weight.” French President Macron also “miscalculated” his support for the CAI, he adds. The finalization of the agreement during France’s EU presidency is becoming unlikely. The EU Commission is also presenting, not one, but two initiatives that indirectly target China: The revised economic strategy and a legislative proposal to take action against state-subsidized enterprises in the EU’s single market.
Meanwhile, however, things are starting to heat up in the EU Council, where the heads of state and government are represented. Hungary is blocking a joint resolution by member states that rebuke Beijing over its controversial electoral law reform. In May, there is a brief consideration of adopting the resolution without Budapest. There will not be an agreement on this until the end of July.
Lithuania also decides to leave the so-called “17+1” format. The cooperation program between Beijing and 17 Eastern and Central European countries (CEEC) has brought Lithuania “almost no benefits”, explains Gabrielius Landsbergis, the foreign minister of the EU and NATO member.
July: Merkel, Xi, and Macron talk on the phone. According to the Elysée Palace, Merkel and Macron express their “serious concern about the human rights situation in China” and call for a decisive “fight against forced labor”. According to Chinese sources, Macron and Merkel reiterate their support for the CAI and hope for a timely conclusion.
The EU Parliament is calling for a diplomatic boycott of the Winter Olympics in Beijing because of the human rights situation. MEPs also condemn the restrictions on freedom of speech and the press in Hong Kong and call on China to revoke the controversial National Security Act.
The summer month will also see the start of an issue that will continue to cause trouble until the end of the year: Lithuania allows Taiwan to open a representative office in Vilnius under its own name. As a result, China withdraws its ambassador and demands the Lithuanian government to recall its ambassador in Beijing as well. China also stops freight train traffic to Lithuania.
September: Commission President Ursula von der Leyen presents “Global Gateway”, the EU’s new infrastructure initiative, in her State of the European Union Address (SOTEU). She clearly states her goal: To counter China’s aggressive expansion of the Belt and Road Initiative (BRI), a gigantic infrastructure project designed to connect the world with China, also known as the New Silk Road. Europe needs to get smarter when it comes to financing infrastructure, von der Leyen argues: “We are good at financing roads. But it does not make sense for Europe to build a perfect road between a Chinese-owned copper mine and a Chinese-owned harbor.” In her speech, she also announces a semiconductor offensive and an EU import ban on products from forced labor. The latter will still cause trouble in the drafting of the planned EU supply chain law, as it is unclear whether the import ban should be part of the regulation or a stand-alone law.
In her speech, von der Leyen calls Brussels’ Indo-Pacific strategy a “milestone”. But just hours before the strategy’s publication, the US-led security pact “Aukus” is taking the wind out of the plan’s sails, angering France – and fundamentally calling transatlantic cooperation in Asia into question. In its Indo-Pacific paper, the EU announces that it will increase the military protection of shipping routes through the South China Sea by increasing its naval presence with warships and “more joint military exercises” with its partners. What particularly angers Beijing is the fact that Taiwan is mentioned as an Indo-Pacific partner.
October: In the fourth quarter of the year, the debate over Taiwan is starting to gain momentum. For the first time, the EU Parliament addresses Brussels’ relations with Taipei in an independent report. In the paper, MEPs call, among other things, for the name of the “European Economic and Trade Office in Taiwan” to be changed to “European Union Office in Taiwan”.
At the end of October, Taiwanese Foreign Minister Joseph Wu travels through several EU countries to meet business representatives and politicians. At a stop in Brussels, he talks to many MEPs and Belgian parliamentarians. Wu will not meet with representatives of the EU Commission or the European External Action Service (EEAS).
November: A few days after Wu’s trip to Europe, a return visit arrives in Taipei. The European Parliament is the first EU institution to send an official delegation to Taiwan. At a final press conference, the European politicians stress that the trip was not a provocation towards Beijing. “We do not define our policy against anyone, but we support our friends and our principles,” says the head of the delegation and French MEP Raphaël Glucksmann.
In mid-November, the “Taiwan Office” opens in the Lithuanian capital Vilnius. Taiwan’s representative office “is open & ready to expand exchanges”, the Taiwanese Foreign Ministry declares. The opening of the diplomatic representation will set “a new and promising course for the bilateral relations between Taiwan and Lithuania”. Beijing then downgrades diplomatic relations with the EU country to the chargé d’affaires level. In the following month of December, Lithuania will recall its diplomats to Vilnius over safety concerns. The embassy is to continue its work remotely.
December: The last weeks of 2021 have it all. On the 1st of the month, Brussels presents details of the EU counter to the Belt and Road Initiative. Up to €300 billion are to be mobilized for “Global Gateway” by 2027. To this end, the EU Commission is not only bringing member states on board, but also the private sector, as well as the European Investment Bank and other European financial institutions, including the European Bank for Reconstruction and Development. Beijing reacted noticeably angrily, and Global Times did not take kindly to the infrastructure initiative. In early December, the EU extends its sanctions against China over human rights violations.
At the end of the first December week, reports first emerged about problems for Lithuanian companies importing goods into China – the EU state could no longer be found in the People’s Republic’s customs system. For a short time, Lithuania reappeared, only to disappear again on December 8. Chinese exports destined for Lithuania also remain in the ports. There is a de facto trade stop.
On the same day Lithuania is once again blocked in the customs system, the EU is presenting a proposal to prevent precisely such behavior and give Brussels the tools to react. The somewhat inelegantly called “Anti-Coercion Instrument” (ACI) allows the EU and the member states to react with their own sanctions in the worst case of economic blackmail.
The EU is also entering into talks with Chinese authorities to resolve the Lithuania situation – so far without success. Instead, the dispute is drawing wider circles: China is putting pressure on companies from other EU states to drop Lithuanian suppliers. Among them are German automotive suppliers like Continental. Whether the trade dispute can still be resolved in 2021 remains an open question.
It flickers, it jitters, then the video call hangs briefly. Axel Schweitzer apologizes. It is the beginning of October. The 52-year-old is currently staying in a quarantine hotel in the port city of Qingdao. Anyone currently entering China must spend at least 14 days in quarantine.
Schweitzer says he hasn’t been to mainland China for over a year. Normally he is usually here every week. Together with his brother Eric Schweitzer, he runs Germany’s third-largest waste and recycling company, Alba. In the summer of this year, both brothers announced that they would divide their family business between them. Axel Schweitzer will then hold, among other things, a 100 percent stake in the offshoot company Alba Group Asia. “In brotherly solidarity”, as he emphasizes.
In the mid-1990s, Schweitzer became a member of the board at Alba, which was founded by his father. He was just 26 at the time. He recounts that he was in Beijing for the first time together with Angela Merkel, then Federal Minister for the Environment. “At that time, the tallest building still had five floors.” He was curious about the country, he says. With Schweitzer, that always means curious about the garbage, too. “The garbage contains much more organic material than in Europe, such as food scraps,” he explains. In addition, there are more rice cookers and, because of the partly subtropical climate, more air conditioners.
Apart from his affinity for Asia, little is known about Axel Schweitzer. At most, that he is somewhat quieter than his older brother Eric, that he is president of the basketball team ALBA Berlin, that he runs regularly and is constantly on the road. His family even has a second home in Hong Kong. Since 2013, he has been involved in the Asia-Pacific Committee of German Business (APA) as Vice-Chairman and is a member of the German-Chinese Dialogue Forum.
For a long time, German waste management companies such as Alba exported plastic waste to Hong Kong or China via German or Dutch ports. In 2017, China informed the World Trade Organization (WTO) that it would stop imports of paper and plastic waste altogether. In Schweitzer’s opinion, the Chinese import ban is a good thing.
To finally get a grip on the growing waste mountains, more and more recycling companies and waste incineration plants are currently being set up in China. The aim is to increase the recycling rate. The country is investing in this – and European companies such as Veolia, Remondis, and Alba want to profit. “Asia is our most important market internationally,” explains Schweitzer.
Since 2018, Alba has been operating a plant for the processing of electronic waste in Hong Kong. Last year, the construction began for a new facility for recycling plastics by a joint venture company. Here, at Ecopark, an industrial and recycling site in Hong Kong, the materials will first be sorted and then used to produce PET flakes for food packaging, for example. A photo of the start of construction shows Schweitzer with a gold-plated helmet and spade. Alba’s only comment on how lucrative the business is in Asia is that the plants are achieving positive results and are doubling in size every two to three years.
Schweitzer sees China as a kind of future laboratory for a zero-waste society. He talks about plastics that can be tracked along the entire value chain for recycling. Of autonomously driving sweepers that clean up streets in smart cities. At China’s pace, the idea of a modern recycling sector could quickly become reality and thus turn into money for German companies like Alba. But that is still uncertain – German-Chinese business relations are also becoming increasingly politicized. “I am watching the current developments with concern, which makes it all the more important to build bridges,” says Schweitzer. Pauline Schinkels
They have to look graceful, and they are required to hold their breath for as long as possible. Because oxygen tanks are not allowed. More than 40 participants dived for first place at the first mermaid competition on Tuesday in Sanya, China’s southernmost city on the tropical island of Hainan. But even those who don’t win: Everyone is allowed to attend the banquet of lots of fish and seafood.
The Christmas season brings more than just contemplative topics. China.Table takes the ongoing dispute over the automotive supplier Continental as an opportunity to look back on what was a difficult year for European-Chinese relations. Amelie Richter’s 2021 in review analyses what has happened in China-EU relations: Brussels is getting snappy, China is becoming more belligerent.
The dispute over CAI, mutual sanctions, and, not the least, China’s aggressive stance towards Taiwan and Lithuania – all these conflicts are also putting the new German government to the test. The Greens, SPD, and FDP are by no means in unison on how to deal with China. While the new Foreign Minister Annalena Baerbock has announced a “value-oriented foreign policy” and is focusing more on confrontation with Beijing, former SPD grandees (Gerhard Schröder, Sigmar Gabriel, Rudolf Scharping) have rallied around Chancellor Olaf Scholz. They are worried about German-Chinese business relations.
One thing is undeniable, after all: Germany has benefited more from China’s economic rise than any other country. Accordingly, the dependence of at least some key sectors on the People’s Republic is relatively high. A conflict that will stay with us in 2022. But perhaps it is also a chance? After all, this dependence is mutual, and Germany has little choice but to join forces with China.
Another year in review focuses on the events in Hong Kong. Fabian Peltsch talks with a former journalist of the newspaper Apple Daily. She recounts the turbulent times before the Beijing-critical paper was ultimately shut down. Looking back at last weekend’s election, she says: “My preferred candidates are all in jail.”
Even though we can’t quite elude serious topics: This is our last issue before the holidays. We wish you a Merry Christmas and a Happy New Year! China.Table will be back on December 28 with an issue between holidays. We will then resume our regular schedule on Monday, January 3rd.
Ms. Leung, you are one of the few journalists in Hong Kong that still gives pro-democracy angles a voice. How did you feel about the general election last Sunday?
That was the first election that I didn’t take part in, nor as a journalist or with my vote. I am reluctant to recognize this type of election as a real, legitimate election. The circle of candidates was limited to well-known patriots. The turnout was the lowest in history.
Was there no candidate you might have considered a compromise?
My preferred candidates are all in jail. You see: Hong Kong has changed completely within a year. The elections are a clear sign of this. The media no longer reports critically about politics. As a journalist, you can hardly find conversation partners who want to speak openly. A system of checks and balances no longer exists. That’s not my idea of democracy.
You worked for Apple Daily, the city’s last major pro-democracy media institution until the editorial office was shut down in the summer of 2021. How did you experience the end of the newspaper?
I was a senior reporter at Apple Daily and was responsible for local news for three years. After the National Security Act was passed, the entire editorial team was under constant stress. We have been attacked from all sides, we were branded by pro-government media outlets as criminals, they were claiming that we are spreading fake news. Then our editor, Jimmy Lai, and our two editors-in-chief were arrested and our editorial office was raided twice by the police. From then on, we expected the government to shut us down every day. We went to work every day feeling like it might be the last. In order not to endanger the employees any further, the board of directors finally ceased operations.
Were you afraid that you might also get arrested?
Rumors spread that individual reporters and certain teams were about to be arrested. Some employees had therefore already quit beforehand. Some even fled abroad. However, I have always felt relatively safe because I was and still am not such a visible journalist compared to others. But things can change suddenly. There is great uncertainty in the city. You don’t know what will happen tomorrow. You have to endure this fear if you decide to stay in Hong Kong.
What are you working on now?
I’m putting together a series about pro-democracy activists and protesters who have been arrested and released again. Most have spent a few months to a year in prison. I want to tell their story: how has their life changed? How did imprisonment affect their families, their studies, their work? Each of these stories is a piece of the puzzle in a larger narrative that needs to be told and archived. In a very practical way, these personal experiences can also be important for people whose trials are still ongoing. So that they know what to expect in prison.
Many activists are very young. How did these people experience incarceration?
Most of them only knew such places from movies. Now we have the situation in Hong Kong that many young people live together with drug dealers and members of the triads in a very small space and that they have to fit into this hierarchy. Of course, criminalization also changes the self-image of these people.
And regular media doesn’t report on these things anymore?
Articles with a pro-democracy focus rarely appear in the mainstream press. You get cynical if you work as a journalist in Hong Kong these days. Nobody wants to say anything anymore or comment on the situation. Anyone who wants to get out of prison on probation must guarantee not to speak publicly about politics. People are muted. All Hong Kong residents are aware of this. Talking to the foreign press is also dangerous after the National Security Law was passed. I could be arrested for this.
What made you decide to give interviews to foreign media regardless?
Maybe I’m naive, but I believe that it is my responsibility as a journalist to keep reporting these things visibly. Others have stopped doing it because, for example, they have a steady job with which they have to feed their children and their families. That’s not the case with me. I am a freelance journalist and am only responsible for myself. I don’t want the people who fought for more democracy to be erased from the collective consciousness.
You finance through crowdfunding and publish your articles mainly on social media channels like Facebook, where you now have 27,000 followers. Is your past at Apple Daily more of a blessing or a curse?
At first, a lot of people didn’t want to talk to me because I worked for Apple Daily. Now it’s almost the other way around: People open up because there aren’t many reporters left who report on pro-democratic issues. All the major newspapers are pro-establishment. Freedom of the press is no longer something I take for granted, but something that you have to fight for. The few journalists who still report stick closely together. There is no longer any competition between us. We’re all sitting in the same boat.
Do you think the protests will continue after the Covid restrictions have been lifted? The general impression outside Hong Kong is that the city has lost its political counterculture.
There is a core of dissatisfaction and a social pessimism that still wants to discharge. I don’t know when and how, but that energy is still there, and it continues to build up. Not everyone pretends that nothing has happened.
What would make you turn your back on Hong Kong for good?
A new law to curb “fake news” is currently being discussed. The definition of fake news is then entirely up to the government. The scope for interpretation is wide. In principle, everything can fall under “fake news”. That would be the point at which free reporting is no longer possible at all. Then I will no longer be able to work either. However, what I learned during the protests is: Be like water, be flexible. There is no point in despairing and breaking down. When the time comes, I will respond accordingly. Until then, I’ll just keep doing my job.
Sometimes there is only a year between success and failure. It was only on 30 December 2020 that an illustrious round of high-ranking politicians gathered for the video call to finalize the China-EU Investment Agreement (CAI). German Chancellor Angela Merkel, China’s President Xi Jinping, President of the European Council Charles Michel, President of the European Commission Ursula von der Leyen, and French leader Emmanuel Macron announced the political agreement for the years-long negotiated EU-China investment agreement on the eve of the New Year. One year later, CAI is practically dead.
And not only that: The leadership in Beijing recently widened a dispute over imports from EU member Lithuania to other member states. The relations between the EU and China are anything but rosy right now. But Brussels, above all the European Parliament, and also the member states are quite determined to assess relations with the People’s Republic more critically. They plan to bear their fangs towards Beijing. A chronology of the “annus horribilis” for EU-China relations.
December 2020: Shortly before the end of the German EU Council Presidency, after about seven years of negotiations, a political agreement is reached for CAI – originally planned as an investment protection agreement. However, no agreement is reached on the protection of investments. Brussels’ negotiators subsequently declare that investment protection is also to be regulated within two years. The EU wants to create a level playing field with CAI: facilitate mutual market access, achieve fairer competitive conditions and limit the transfer of technology from European companies to China. Ratification is scheduled for spring 2022, during the French EU Council Presidency.
January 2021: The EU Commission releases a first short text on CAI towards the end of the month. There is a strong headwind, especially from the EU Parliament: MEPs call it a “hasty agreement” and, above all, criticize what they see as China’s inadequate human rights commitments. “Positive, on the one hand, disappointing in other respects.” business circles say.
February: Brussels unveils a new direction for EU trading strategy. Trade relations must be “reciprocal, balanced and fair”, says EU Commission Vice-President and Trade Commissioner Valdis Dombrovskis, addressing leaders in Beijing. “This means: doing more to level the global playing field, making sure that our partners live up to their obligations,” Dombrovskis says. The People’s Republic would have to make greater commitments in international trade. The EU Commission’s proposals directly mention Beijing several times: “The degree to which China has reformed and opened is not commensurate with its weight in the global economy“. The fact that the government further continues to exert a decisive influence on China’s economic environment leads to distortions of competition that cannot be sufficiently taken into account by the current rules of the World Trade Organization, the EU criticizes.
March: If there is one specific month of 2021 where the situation between Brussels and Beijing changed dramatically – it would be March. In the middle of the month, the EU Commission publishes the long-awaited annexes to the CAI agreement. The details of the deal receive plenty of criticism. In particular, a passage on the possible further restriction of the operations of foreign non-governmental organizations in China is causing uncertainty. The Chinese side’s promises regarding the International Labour Organization’s (ILO) requirements for the protection of human rights are also considered insufficient.
On March 22, the EU imposes sanctions on four Chinese officials and one organization over human rights violations in Xinjiang. Only a day later, Beijing retaliates with a barrage of punitive measures and sanctions to EU MEPs, scientists, and organizations. The European Parliament react immediately and cancel a meeting of a planned monitoring group on the CAI agreement. Since then, the European Parliament’s work on the CAI has been on hold. Berlin and other EU capitals call the sanctions from the People’s Republic “disproportionate”. Josep Borrell, the EU’s High Representative for Foreign Affairs, is noticeably shocked and announces a change in Brussels’ general strategy towards Beijing.
April: Merkel, Macron, and Xi talk on the phone for the first time since the sanctions debacle. The agenda includes climate and Covid issues – an attempt at talks in difficult diplomatic waters.
May: The EU Parliament formally freezes its work on the CAI. It is to be resumed only after a lift of the punitive measures against MEPs. China’s sanctions are “miscalculated”, says MEP Reinhard Bütikofer (Greens), who is among those hit by Beijing’s sanctions. There is now growing realism in the EU Commission about China, Bütikofer said. “Merkel’s China policy is losing weight.” French President Macron also “miscalculated” his support for the CAI, he adds. The finalization of the agreement during France’s EU presidency is becoming unlikely. The EU Commission is also presenting, not one, but two initiatives that indirectly target China: The revised economic strategy and a legislative proposal to take action against state-subsidized enterprises in the EU’s single market.
Meanwhile, however, things are starting to heat up in the EU Council, where the heads of state and government are represented. Hungary is blocking a joint resolution by member states that rebuke Beijing over its controversial electoral law reform. In May, there is a brief consideration of adopting the resolution without Budapest. There will not be an agreement on this until the end of July.
Lithuania also decides to leave the so-called “17+1” format. The cooperation program between Beijing and 17 Eastern and Central European countries (CEEC) has brought Lithuania “almost no benefits”, explains Gabrielius Landsbergis, the foreign minister of the EU and NATO member.
July: Merkel, Xi, and Macron talk on the phone. According to the Elysée Palace, Merkel and Macron express their “serious concern about the human rights situation in China” and call for a decisive “fight against forced labor”. According to Chinese sources, Macron and Merkel reiterate their support for the CAI and hope for a timely conclusion.
The EU Parliament is calling for a diplomatic boycott of the Winter Olympics in Beijing because of the human rights situation. MEPs also condemn the restrictions on freedom of speech and the press in Hong Kong and call on China to revoke the controversial National Security Act.
The summer month will also see the start of an issue that will continue to cause trouble until the end of the year: Lithuania allows Taiwan to open a representative office in Vilnius under its own name. As a result, China withdraws its ambassador and demands the Lithuanian government to recall its ambassador in Beijing as well. China also stops freight train traffic to Lithuania.
September: Commission President Ursula von der Leyen presents “Global Gateway”, the EU’s new infrastructure initiative, in her State of the European Union Address (SOTEU). She clearly states her goal: To counter China’s aggressive expansion of the Belt and Road Initiative (BRI), a gigantic infrastructure project designed to connect the world with China, also known as the New Silk Road. Europe needs to get smarter when it comes to financing infrastructure, von der Leyen argues: “We are good at financing roads. But it does not make sense for Europe to build a perfect road between a Chinese-owned copper mine and a Chinese-owned harbor.” In her speech, she also announces a semiconductor offensive and an EU import ban on products from forced labor. The latter will still cause trouble in the drafting of the planned EU supply chain law, as it is unclear whether the import ban should be part of the regulation or a stand-alone law.
In her speech, von der Leyen calls Brussels’ Indo-Pacific strategy a “milestone”. But just hours before the strategy’s publication, the US-led security pact “Aukus” is taking the wind out of the plan’s sails, angering France – and fundamentally calling transatlantic cooperation in Asia into question. In its Indo-Pacific paper, the EU announces that it will increase the military protection of shipping routes through the South China Sea by increasing its naval presence with warships and “more joint military exercises” with its partners. What particularly angers Beijing is the fact that Taiwan is mentioned as an Indo-Pacific partner.
October: In the fourth quarter of the year, the debate over Taiwan is starting to gain momentum. For the first time, the EU Parliament addresses Brussels’ relations with Taipei in an independent report. In the paper, MEPs call, among other things, for the name of the “European Economic and Trade Office in Taiwan” to be changed to “European Union Office in Taiwan”.
At the end of October, Taiwanese Foreign Minister Joseph Wu travels through several EU countries to meet business representatives and politicians. At a stop in Brussels, he talks to many MEPs and Belgian parliamentarians. Wu will not meet with representatives of the EU Commission or the European External Action Service (EEAS).
November: A few days after Wu’s trip to Europe, a return visit arrives in Taipei. The European Parliament is the first EU institution to send an official delegation to Taiwan. At a final press conference, the European politicians stress that the trip was not a provocation towards Beijing. “We do not define our policy against anyone, but we support our friends and our principles,” says the head of the delegation and French MEP Raphaël Glucksmann.
In mid-November, the “Taiwan Office” opens in the Lithuanian capital Vilnius. Taiwan’s representative office “is open & ready to expand exchanges”, the Taiwanese Foreign Ministry declares. The opening of the diplomatic representation will set “a new and promising course for the bilateral relations between Taiwan and Lithuania”. Beijing then downgrades diplomatic relations with the EU country to the chargé d’affaires level. In the following month of December, Lithuania will recall its diplomats to Vilnius over safety concerns. The embassy is to continue its work remotely.
December: The last weeks of 2021 have it all. On the 1st of the month, Brussels presents details of the EU counter to the Belt and Road Initiative. Up to €300 billion are to be mobilized for “Global Gateway” by 2027. To this end, the EU Commission is not only bringing member states on board, but also the private sector, as well as the European Investment Bank and other European financial institutions, including the European Bank for Reconstruction and Development. Beijing reacted noticeably angrily, and Global Times did not take kindly to the infrastructure initiative. In early December, the EU extends its sanctions against China over human rights violations.
At the end of the first December week, reports first emerged about problems for Lithuanian companies importing goods into China – the EU state could no longer be found in the People’s Republic’s customs system. For a short time, Lithuania reappeared, only to disappear again on December 8. Chinese exports destined for Lithuania also remain in the ports. There is a de facto trade stop.
On the same day Lithuania is once again blocked in the customs system, the EU is presenting a proposal to prevent precisely such behavior and give Brussels the tools to react. The somewhat inelegantly called “Anti-Coercion Instrument” (ACI) allows the EU and the member states to react with their own sanctions in the worst case of economic blackmail.
The EU is also entering into talks with Chinese authorities to resolve the Lithuania situation – so far without success. Instead, the dispute is drawing wider circles: China is putting pressure on companies from other EU states to drop Lithuanian suppliers. Among them are German automotive suppliers like Continental. Whether the trade dispute can still be resolved in 2021 remains an open question.
It flickers, it jitters, then the video call hangs briefly. Axel Schweitzer apologizes. It is the beginning of October. The 52-year-old is currently staying in a quarantine hotel in the port city of Qingdao. Anyone currently entering China must spend at least 14 days in quarantine.
Schweitzer says he hasn’t been to mainland China for over a year. Normally he is usually here every week. Together with his brother Eric Schweitzer, he runs Germany’s third-largest waste and recycling company, Alba. In the summer of this year, both brothers announced that they would divide their family business between them. Axel Schweitzer will then hold, among other things, a 100 percent stake in the offshoot company Alba Group Asia. “In brotherly solidarity”, as he emphasizes.
In the mid-1990s, Schweitzer became a member of the board at Alba, which was founded by his father. He was just 26 at the time. He recounts that he was in Beijing for the first time together with Angela Merkel, then Federal Minister for the Environment. “At that time, the tallest building still had five floors.” He was curious about the country, he says. With Schweitzer, that always means curious about the garbage, too. “The garbage contains much more organic material than in Europe, such as food scraps,” he explains. In addition, there are more rice cookers and, because of the partly subtropical climate, more air conditioners.
Apart from his affinity for Asia, little is known about Axel Schweitzer. At most, that he is somewhat quieter than his older brother Eric, that he is president of the basketball team ALBA Berlin, that he runs regularly and is constantly on the road. His family even has a second home in Hong Kong. Since 2013, he has been involved in the Asia-Pacific Committee of German Business (APA) as Vice-Chairman and is a member of the German-Chinese Dialogue Forum.
For a long time, German waste management companies such as Alba exported plastic waste to Hong Kong or China via German or Dutch ports. In 2017, China informed the World Trade Organization (WTO) that it would stop imports of paper and plastic waste altogether. In Schweitzer’s opinion, the Chinese import ban is a good thing.
To finally get a grip on the growing waste mountains, more and more recycling companies and waste incineration plants are currently being set up in China. The aim is to increase the recycling rate. The country is investing in this – and European companies such as Veolia, Remondis, and Alba want to profit. “Asia is our most important market internationally,” explains Schweitzer.
Since 2018, Alba has been operating a plant for the processing of electronic waste in Hong Kong. Last year, the construction began for a new facility for recycling plastics by a joint venture company. Here, at Ecopark, an industrial and recycling site in Hong Kong, the materials will first be sorted and then used to produce PET flakes for food packaging, for example. A photo of the start of construction shows Schweitzer with a gold-plated helmet and spade. Alba’s only comment on how lucrative the business is in Asia is that the plants are achieving positive results and are doubling in size every two to three years.
Schweitzer sees China as a kind of future laboratory for a zero-waste society. He talks about plastics that can be tracked along the entire value chain for recycling. Of autonomously driving sweepers that clean up streets in smart cities. At China’s pace, the idea of a modern recycling sector could quickly become reality and thus turn into money for German companies like Alba. But that is still uncertain – German-Chinese business relations are also becoming increasingly politicized. “I am watching the current developments with concern, which makes it all the more important to build bridges,” says Schweitzer. Pauline Schinkels
They have to look graceful, and they are required to hold their breath for as long as possible. Because oxygen tanks are not allowed. More than 40 participants dived for first place at the first mermaid competition on Tuesday in Sanya, China’s southernmost city on the tropical island of Hainan. But even those who don’t win: Everyone is allowed to attend the banquet of lots of fish and seafood.
