Table.Briefing: China

Beijing violates human rights + Tech crackdown as opportunity

  • New Silk Road: Beijing violates human rights
  • Tech crackdown driving competition and innovation?
  • China’s car market declines
  • Death sentence for Canadian confirmed
  • Lithuania and China clash over Taiwan
  • High Covid numbers in Jiangsu
  • Covid origin: Swiss embassy corrects Chinese media
  • IPCC report: Beijing undeterred
  • In Profile: Jackie Chan
Dear reader,

China likes to present its Belt and Road Initiative as the project of the century. For the people and communities along the Belt and Road, however, the supposed progress often brings misery and exploitation. A new study by the Business and Human Rights Resource Centre lists numerous human rights abuses of China’s outbound investments: From displacement to labor rights violations and land grabs. Almost 680 allegations are only the tip of the iceberg, as Nico Beckert analyses.

Be it Facebook, Google, Amazon – US tech companies dominate our lives, for the most part, more than ever before. But concerns over data protection and the power of their monopolies are the cause for political debates in Europe and the US: Which regulatory approaches are the right ones? Should, and can, companies be split up like Rockefeller’s Standard Oil once was? Frank Sieren took a closer look at the recent tech crackdown in China. Analysts say Beijing’s regulatory approach could boost competition and innovation in the economy. A model for Western lawmakers?

Your
Nico Beckert
Image of Nico  Beckert

Feature

New Silk Road: Beijing violates human rights

Beijing’s Belt and Road Initiative (BRI) is a multi-billion dollar project with dozens of partner nations worldwide. While many numbers on the reach and scope of the initiative are artificially inflated, there are constant reports of human rights abuses in Belt and Road projects. The Business and Human Rights Resource Centre has compiled these allegations in a new study. According to the study, from the launch of the BRI (2013) to the end of 2020, the NGO registered 679 publicly available information on allegations of human rights violations. These include land conflicts, destruction of livelihoods, environmental pollution, labor rights violations and the use of violence. The report is based on research by local and international NGOs and media reports.

The Business and Human Rights Resource Centre accuses Beijing of presenting itself as a “responsible superpower”. However, Chinese companies regularly violate environmental and social standards in foreign projects, according to the NGO, which investigates the impact of economic activities of more than 10,000 companies on human rights.

The authors stress that “each allegation involves a number of human rights violations” because individual human rights violations (such as land grabbing) often lead to others (such as the destruction of livelihoods). Since the organization has to limit itself to publicly available information, the figure of 679 cases is only the “tip of the iceberg,” a spokeswoman said. It was also difficult to estimate how many people were affected by human rights violations in total.

Human rights violations in mining, infrastructure and fossil fuel sectors

Chinese overseas mining projects record the highest number of allegations of human rights violations (236), followed by the infrastructure sector (152 allegations) and fossil fuel projects (118 allegations). These three project types thus account for more than two-thirds of the incidents registered.

In regard to the nature of the violations, most allegations relate to violations of land rights (194 allegations) and, closely related, threats to the livelihoods of individuals affected by Chinese overseas projects (190 allegations). In certain infrastructure projects, for example, people are resettled without receiving compensation for their expropriated land, according to the study’s authors. The destruction and pollution of the environment and resulting effect on human health were also among the most common consequences of Chinese projects (125 allegations).

The Business and Human Rights Resource Centre counted 125 cases of labor rights violations in Chinese projects abroad. The NGO provides few details on individual cases. However, reports by other NGOs, such as China Labor Watch, have highlighted the sometimes inhumane working conditions of Chinese workers in overseas projects in greater detail. In dozens of cases, wage theft, debt bondage, or lack of medical care was discovered (as reported by China.Table).

About eight percent (118) of alleged human rights violations counted are also found in the sector of renewable energy, with most occurring in hydropower projects. On Tuesday, Human Rights Watch (HRW) published a report on a dam project in Cambodia that is financed by China and belongs to the BRI. HRW calls it a “human rights disaster”, accusing the dam project of destroying the livelihoods of local communities who rely on fishing, agriculture and forestry. Chinese investment in renewable energy has increased in recent years as Beijing pushes a “Green Belt and Road Initiative.”

Forced labor on fishing trawlers

Sectors outside the media spotlight are also marked by numerous allegations of human rights abuses. According to the Business and Human Rights Resource Centre, China has increased overseas investment in agriculture and food production in recent years. Chinese companies have been accused of conflicts over land as well as labor rights violations and environmental damage in various investment fields such as pig farms in Argentina and banana plantations in Myanmar, the study said. There also is evidence of forced labor and physical assaults by Chinese crews on fishing trawlers in Indonesia and other regions of the world.

Geographically, the allegations are relatively evenly distributed among the regions with the largest BRI investments: Most allegations were made in Asia and the Pacific (270), Africa (181) and Latin America (177). In Europe, 22 human rights violations allegations have been made.

Over a period of several years, the Business and Human Rights Resource Centre has asked the accused Chinese companies for a comment on the allegations. However, responses were received for only 101 allegations, i.e. less than one in six allegations – a lower response rate than for similar requests to companies from other countries. According to the study, half of the Chinese companies responded with a truism, while the other half commented specifically on individual points, which presupposed an internal investigation. Such responses at least showed “greater will to dialogue,” the NGO said. Only five companies referred to international standards in their responses, while all others simply stressed that they abide by the local rules of the host countries. The study authors called this approach problematic, “especially when companies operate in countries where local laws are barely developed or enforced.”

Only “green” and “sustainable” on paper?

In recent years, Beijing has enacted a series of political initiatives and regulations to ensure compliance with human rights and environmental protection standards. However, numerous allegations of human rights violations show that paper is patient and there is a lack of implementation at sites. The verdict of the Business and Human Rights Resource Centre: “China’s regulations fall short.” They do not provide “systematic protection of human rights in overseas business activities”.

Golda S. Benjamin, Program Director of the Business and Human Rights Resource Centre says: China’s image as a responsible major power is at risk of being tarnished “if the government and companies do not adequately focus on the urgent need for action to address human rights risks in their overseas projects”. The NGO calls for “effective human rights due diligence” by Chinese companies and “appropriate grievance mechanisms to enable victims of human rights abuses” to pursue claims for compensation and legal action.

  • Geopolitics
  • Myanmar
  • New Silk Road
  • Society

New opportunities through tech crackdown

China’s recent crackdown on major tech corporations could potentially boost competition and put the economy on a “healthier,” more diverse footing. That’s the conclusion of analysts at U.S. rating agency S&P Global. Instead of anti-competitive practices, takeovers and listings abroad, China’s companies could aim for more organic growth in the future, for example through additional investment spending.

China is doing what the US can’t seem to do: regulate its domestic tech giants,” notes Will Oremus, specialist on digitalization at the Washington Post. Beijing had for the longest time allowed its big tech companies to grow unchecked, while keeping major foreign competitors like Facebook at bay. Internet giants like Alibaba and Tencent were seen as proof of the great economic potential of China’s global rise.

In the meantime, however, companies have become huge conglomerates, reaching market shares of more than 80 percent, and are now seen as a risk to social stability by China’s authorities. With a major reform package, China now wants to break or at least soften their monopolies. In addition, it wants to take stronger action against usury, distortion of competition, poor working conditions, dumping, violations of data protection, and violations of child and youth protection. “The goals of the Chinese government are not so different from those of its Western counterparts,” Oremus writes, while the latter “have fewer control mechanisms and levers to achieve their goals.”

China does not destroy the technology sector

Rui Ma, one of the leading experts on China’s tech sector and founder of the tech podcast Tech Buzz China, agrees: “China is not destroying its tech industry.” Ma has been commuting between the two tech centers of China and the US for 15 years and was educated at Berkeley as well as at the renowned Tsinghua University in Beijing. She has worked for Morgan Stanley and Merrill Lynch, both in Silicon Valley and China. Rui Ma is convinced that China is only rearranging the market to make it work more efficiently – in other words, to make it more diverse and open to competition.

This includes a new rule mandating a review of foreign IPOs of Chinese companies in possession of data on more than one million Chinese consumers. A number of companies have already shelved their plans for IPOs as a result, including bike-sharing company Hello Inc backed by Alibaba’s Ant Group, social media platform Xiaohongshu, e-commerce platform Meicai and TikTok parent ByteDance.

Reconciling social stability with growth and innovation

But Stephen Roach, an economist at Yale University, is concerned that Beijing’s policies could jeopardize confidence in China’s emerging consumer society:These actions are going to the core of what has been so exciting about China for years,” he says, adding that the more private companies depend on the Communist Party’s goodwill, the greater and more opaque the risks for investors. But Roach has always been a free-market liberal who dislikes government interference in business. He overlooks the fact that the Chinese tech boom he celebrated for years could only come about because Western competitors were kept out of the Chinese market by a state ban.

Loopholes for Big Tech remain

U.S. capital markets are likely to remain a source of funding for Chinese companies despite increased scrutiny, analysts at S&P Global believe, adding that there is no end to the Chinese IPO boom in the U.S. in the foreseeable future. Many Chinese companies listed in the U.S. are taking advantage of a legal loophole in China by setting up a so-called Variable Interest Entity (VIE) holding company in tax havens and listing them overseas.

Through such VIE companies, companies are able to circumvent Chinese regulations that prohibit foreign investors from any involvement in key sectors such as the tech sector. This enabled the value of Chinese stocks on Wall Street to rise from just a few billion dollars to two trillion dollars in two decades. Companies like ride-hailing service Didi Chuxing are not listed on the New York Stock Exchange themselves, but as holding companies, in this specific case “Didi Global” based in the Cayman Islands. The VIE holding structure will remain safe for now, S&P expects.

U.S. regulators have stopped approving new listings of Chinese companies in recent weeks amid uncertainty surrounding VIEs and China’s regulatory actions. “They will probably gain new tools to regulate these companies but that doesn’t mean they will necessarily ban the whole structure as the consequences would be too significant. But we just don’t know yet.” explains a Hong Kong IPO lawyer. In the end, Beijing could come up with rules that set a trend that will also be felt in the US and Europe – if Western policymakers are willing to stand up to the tech giants.

  • Alibaba
  • Didi
  • Technology
  • Tencent
  • USA

News

Automotive market: combustion engines struggle, electric vehicles grow

China’s car market continues to weaken. In July, passenger car sales continued to perform below the previous year’s level. With a minus of 6.4 percent, the decline was even stronger than in June, according to the Passenger Car Association (PCA) on Tuesday. Even when including commercial vehicles such as minivans, the overall market was on the decline. CAAM, the state-affiliated automakers’ association, recently reported a nearly 14 percent month-on-month decline in vehicle sales to 1.82 million units. At the same time, CAAM stressed that despite the decline in June and July, vehicle sales were still up by almost one-fifth in the first seven months compared to the same period last year, dominated by Covid. In general, however, it is safe to say that the automotive market is still in a difficult phase – partly due to the chip shortage.

However, according to initial company reports for July, the electric segment is performing better: sales of startup’s Li Auto (8,569) and Xpeng (8,040) more than tripled in July compared to the previous year, according to a report by news agency Reuters. For Nio, sales still more than doubled to 7,930 cars, up 125 percent. July’s data for the overall electric segment has not yet been released. ck

  • Batteries
  • CAAM
  • Car Industry
  • Electromobility
  • PCA

Controversial death sentence against Canadian upheld

Against a backdrop of diplomatic tensions between China and Canada, several sentences are being handed down these days to Canadians imprisoned in the People’s Republic. The court of appeal in the northeastern Chinese province of Liaoning announced on Tuesday that the death sentence for Canadian citizen Robert Lloyd Schellenberg made in January 2019 would be upheld. Today, on Wednesday, a Chinese court is already expected to rule in the case of jailed Canadian businessman Michael Spavor. This was reported by news agency Reuters, citing unnamed Canadian sources.

Both cases are more or less directly related to the arrest of the chief financial officer of Chinese telecom giant Huawei, Meng Wanzhou, in Vancouver, Canada. A trial is currently underway in Canada to decide whether to extradite the daughter of Huawei founder Ren Zhengfei to the US – where she is accused of bank fraud, among other things. Meng is currently under house arrest in Vancouver. Her lawyers are currently trying to avert extradition to the US by presenting exculpatory material (as reported by China.Table).

Schellenberg had received a 15-year prison sentence in November 2018. However, a short time later the verdict was deemed to be too lax – after Meng’s arrest. In the last instance, China’s Supreme People’s Court must now confirm the death sentence – as is the case for every death penalty in China. Spavor was charged with espionage in June 2020 along with fellow Canadian and former diplomat Michael Kovrig. Both face lengthy prison sentences. The governments of China and Canada accuse each other of acting out of political motives and have called on each other to release their citizens. ck

  • Canada
  • Geopolitics
  • Huawei
  • Justice
  • Meng Wanzhou
  • Michael Kovrig
  • Michael Spavor
  • USA

China recalls ambassador from Lithuania

Relations between Lithuania and China continue to deteriorate. Beijing has now recalled its ambassador Shen Zhifei from the Baltic state. Also, according to a report by South China Morning Post, China asked the government in Vilnius on Tuesday to withdraw its ambassador Diana Mickeviciene from Beijing as well. The reason: Lithuania allowed Taiwan to open an official trade office in July, which also bears the name “Taiwan” in its title (as reported by China.Table). Conversely, Lithuania wants to open a trade representative office on the island of Taiwan.

Even a hint of official relations between other nations and Taiwan, which Beijing regards as a renegade province, is taboo for China as this violates its one-China principle. No other state in Europe has yet dared to host an official Taiwan office. The Foreign Ministry in Beijing urged Lithuania to “correct its wrong decision immediately.”

Whether Lithuania will follow this demand is uncertain. However, Vilnius already showed Beijing the cold shoulder in May when it withdrew from the 17+1 initiative, in which China cooperates with Central and Eastern Europe. 17+1 had not brought the hoped-for market access to China and would divide Europe, Lithuania argued. Meanwhile, it is in support of Taiwan’s bid for observer status at the World Health Organization (WHO). As of 2019, China ranks only 22nd among Lithuania’s export markets and is the 10th largest supplier of imported goods to the Baltic state. ck

  • Diplomacy
  • Geopolitics
  • Taiwan

New peak in Covid infections

Earlier this week, China recorded an all-time high in Covid infections since the latest wave began on July 20. A total of 181 new COVID-19 infections have been registered, the South China Morning Post reported on Tuesday, citing information provided by authorities. According to the report, the National Health Commission (NHC) reported 143 new symptomatic cases. The remaining infections showed no symptoms. Of the 143 cases with symptoms, 108 were due to local infection; 35 occurred in people arriving from abroad. No deaths were recorded. Just under half of the newly recorded infections had occurred in the province of Jiangsu, 48 of them in the city of Yangzhou, according to the report. So the province remains the biggest hotspot of the recent outbreak.

NHC director Ma Xiaowei urged officials in a speech to “make epidemic prevention work a matter of paramount importance,” according to reports, including by the Financial Times (FT). To combat the virus, “paralysis of thought” must be overcome, the report further quotes Ma as saying.

Beijing is trying to stem a rise in cases with the highly contagious delta variant. But the worst outbreak of the coronavirus since last year has now heightened concerns about a slowdown in economic growth in the country. Goldman Sachs lowered its expectations for China’s third-quarter gross domestic product growth to 2.3 percent from the previous quarter; the investment bank had previously forecast 5.8 percent. Goldman nevertheless expects an economic recovery toward the end of the year. “Our forecasts predict that the government will bring the Covid outbreak under control in about a month and the related control measures will then mainly hit the services sector,” the FT quoted Goldman analysts as saying. ari

  • Coronavirus
  • Delta
  • Goldman Sachs
  • Health
  • Jiangsu
  • Society
  • Yangzhou

Switzerland warns media against phantom biologists

The Swiss embassy in Beijing has called on Chinese media to stop referring to the supposed Swiss biologist “Wilson Edwards” in their reporting on the origin of the Covid virus and to delete articles that cite him as a source. There is simply no Swiss person registered under that name. Nor are there any scientific articles published under this name in the field of biology.

Why all the fuss? Chinese media outlets such as the Global Times and China Daily had cited social media posts by an alleged Swiss named “Wilson Edwards” in which he expressed concern about the independence of the World Health Organization (WHO). Scientists tasked with the investigation of the origins of COVID-19 in Wuhan had been pressured by the US, the cited posts claimed.

However, the posts were apparently deliberately launched via a phantom account. According to the Swiss embassy, the fake biologist’s Facebook account was only public for a single day and had only three followers. The embassy writes: “We assume that the media have spread this story in good faith. However, we ask anyone who has published this story to delete it and publish a correction.”

In the debate over the origin of the COVID-19 virus, newspapers and television stations are forbidden to conduct their own investigations. Instead, the media must, per government instructions, continually put forward the thesis that the virus probably originated outside China. nib

  • Coronavirus
  • Media
  • Society
  • WHO

Beijing sticks to climate plans

China will not tighten its climate plans in the short term, despite Monday’s alarming report by the Intergovernmental Panel on Climate Change. China’s foreign ministry proclaimed “full confidence in the implementation of China’s climate action,” news agency AFP reported Tuesday. In July, China missed a deadline to send updated 2030 mitigation plans to the United Nations. The People’s Republic plans to peak emissions before 2030 and achieve climate neutrality by 2060.

China’s special climate envoy Xie Zhenhua recently announced that the government would publish strategy papers and detailed implementation plans for reducing emissions before the global climate summit in November. Xie announced a framework focusing on ten areas. These include the reduction of the use of fossil fuels, a low-CO2 building and mobility sector, green finance, further improvement of emissions trading (as reported by China.Table) and generally promoting green and low-CO2 technologies and innovations. Following its rapid economic rise, China is now the world’s largest CO2 emitter in absolute terms – not per capita. Accordingly, emissions must fall again quickly in order to achieve climate goals. nib

  • Climate
  • Sustainability
  • Xie Zhenhua

Profile

Jackie Chan: Wannabe Party Member

The relationship between action movie star Jackie Chan and his hometown of Hong Kong was once a very special one. People loved the actor for his martial arts, his move, and his role as an ambassador for the city, whose image he helped shape since the 1980s as a comedic gadfly with outstanding kung fu skills. As a child, he even acted alongside legendary Bruce Lee, and many considered him his legitimate successor.

Jackie Chan, whose Chinese name is Cheng Long, is also outside of China, synonymous with the cultural creativity of the metropolis. However, Chan, who has starred in around 200 movies, has since dramatically lost the affection of many of his Hong Kong compatriots over recent years. Most recently, he caused outrage and head shaking in July when he told his audience at a China Film Association symposium in the People’s Republic, “I’m very lucky to be a Chinese person, but I also am very jealous that you all are Party members. I just think the Chinese Communist Party is really so magnificent.” What the Party said and promised it would accomplish in a few decades, while other (parties) would take 100 years to do it: “I want to be a Party member!”

It was not the first acknowledgment by the 67-year-old of the CCP’s monopoly on power and its increasing influence over his hometown. In 2009, he had once mischievously remarked that he was no longer sure whether freedom was good or not. He had gradually come to realize the importance of Chinese people living under strict control. “Otherwise, we’ll do what we want. Just look at road traffic,” he said. He appeared on state television as a regular guest on the New Year’s show, and in 2008 he was part of the Olympic torch relay heading to Beijing.

Jackie Chan: Support for the Security Act

Hong Kong’s love was already beginning to crumble. By 2019 at the latest, it had turned to pure hatred among many of the city’s pro-democracy citizens when Chan publicly condemned the protest movement. Later, Chan, like many other celebrities in the city, signed a joint statement claiming that the introduction of the National Security Law for Hong Kong was an urgent tool to restore stability and peace in the city.

He had already fallen out with many Taiwanese citizens much earlier, after calling the 2004 presidential election in the island state “the biggest joke”. A few years later, during a promotional tour to Taiwan, which Beijing considers part of its territory, he faced a lot of hostility. Demonstrators waited for him at the airport, urging him to “Get lost”.

His support for the authoritarian policies of the CCP eventually turned into a political mission. Since 2013, Chan has been a member of the Chinese People’s Political Consultative Conference in Beijing. As such, he has the opportunity to introduce proposals into the policy-making process of the People’s Republic. In turn, the party and state media use his name to popularize their policies in Hong Kong and around the globe. Another example is professional basketball player Yao Ming, who has tens of millions of fans in China, and since the end of his career has been used as a poster boy for the authoritarian regime. For no one dares to turn down an invitation to the Consultative Conference, not unless he or she wants to be perceived at least as ungrateful or, at worst, even as a dissident.

The commercial consequences for celebrities can be devastating should they choose not to follow the Party’s will, as John Lee of the Hudson Institute in Washington told Vice Magazine about the Jackie Chan case. “There are potentially serious commercial consequences for celebrities and entertainment executives who make sensitive comments that are deemed as being critical of China and the Communist Party,” Lee says. Especially when their own movies rely on whopping revenues at the Chinese box office. While Hong Kong stars like Chan have opted to kowtow, actor Chow Yun-fat (The Assassins, Pirates of the Caribbean) or singer Denise Ho have been punished with exile from the Chinese market for supporting the pro-democracy movement.

Philanthropist in tax havens

Jackie Chan is not only an actor, but also an entrepreneur. His film production company and cinema chain are also active in China. Chan has promised to donate half of his fortune of several hundred million US dollars posthumously to good causes. His own foundation aims to provide young people in Hong Kong with better educational opportunities. He is also committed to the welfare of endangered species. The sheen of his philanthropy was scratched, however, when his name came up in 2016 in connection with the publication of the Panama Papers. Through an obscure law company, he owned six companies managed in tax havens. A legal practice, but for many ordinary mortals, it was reason enough to accuse him of contributing to social inequality in the world.

In the meantime, Chan subtly promotes changes among the world’s major powers in his movies. Take, for example, the 2010 remake of Karate Kid, which Chan also directed and starred as a Beijing janitor introducing an African-American boy who immigrated from the US to the world of kung fu. In one scene, the boy, talking to his single mother from the US working class, laments that he wants to go back home. Her response: “This is our home.” The idea of portraying China as a country of immigration, as the U.S. is for Chinese, might seem hilarious – but is pure fiction for the time being

But who knows how the world will develop; perhaps the People’s Republic will soon become dependent on wage labor from abroad because of its demographic change. Thirty years ago, no one would have expected Jackie Chan to support an authoritarian regime. A week before the Tiananmen Square massacre in 1989, Chan attended the benefit Concert for Democracy in China at the Hong Kong Happy Valley Racecourse, in which all the artists had volunteered to take part. grz

  • Chinese Communist Party
  • Culture
  • Film
  • Hongkong

Executive Moves

Martin Königsmann was appointed VP and Partner Management Consulting Asia-Pacific at Bosch China Investment Ltd. in Shanghai in August. Königsmann had previously held several positions at Robert Bosch GmbH. Most recently, he was Director of Consulting at Robert Bosch GmbH from February 2017 to August 2021. Königsmann studied chemistry at the University of Bremen and holds a doctorate in chemistry.

  • Bosch

Dessert

A food delivery man checks new orders on an empty street in Zhangjiajie, Hunan. Since last Tuesday, residents and tourists have not been allowed to leave the central Chinese city in an effort to contain the recent local Covid outbreak. Delivery services are providing people with essential supplies such as food and medical products. Zhangjiajie is located near a national park with globally unique quartzite sandstone formations, considered a UNESCO World Heritage Site.

China.Table Editors

CHINA.TABLE EDITORIAL OFFICE

Licenses:

    • New Silk Road: Beijing violates human rights
    • Tech crackdown driving competition and innovation?
    • China’s car market declines
    • Death sentence for Canadian confirmed
    • Lithuania and China clash over Taiwan
    • High Covid numbers in Jiangsu
    • Covid origin: Swiss embassy corrects Chinese media
    • IPCC report: Beijing undeterred
    • In Profile: Jackie Chan
    Dear reader,

    China likes to present its Belt and Road Initiative as the project of the century. For the people and communities along the Belt and Road, however, the supposed progress often brings misery and exploitation. A new study by the Business and Human Rights Resource Centre lists numerous human rights abuses of China’s outbound investments: From displacement to labor rights violations and land grabs. Almost 680 allegations are only the tip of the iceberg, as Nico Beckert analyses.

    Be it Facebook, Google, Amazon – US tech companies dominate our lives, for the most part, more than ever before. But concerns over data protection and the power of their monopolies are the cause for political debates in Europe and the US: Which regulatory approaches are the right ones? Should, and can, companies be split up like Rockefeller’s Standard Oil once was? Frank Sieren took a closer look at the recent tech crackdown in China. Analysts say Beijing’s regulatory approach could boost competition and innovation in the economy. A model for Western lawmakers?

    Your
    Nico Beckert
    Image of Nico  Beckert

    Feature

    New Silk Road: Beijing violates human rights

    Beijing’s Belt and Road Initiative (BRI) is a multi-billion dollar project with dozens of partner nations worldwide. While many numbers on the reach and scope of the initiative are artificially inflated, there are constant reports of human rights abuses in Belt and Road projects. The Business and Human Rights Resource Centre has compiled these allegations in a new study. According to the study, from the launch of the BRI (2013) to the end of 2020, the NGO registered 679 publicly available information on allegations of human rights violations. These include land conflicts, destruction of livelihoods, environmental pollution, labor rights violations and the use of violence. The report is based on research by local and international NGOs and media reports.

    The Business and Human Rights Resource Centre accuses Beijing of presenting itself as a “responsible superpower”. However, Chinese companies regularly violate environmental and social standards in foreign projects, according to the NGO, which investigates the impact of economic activities of more than 10,000 companies on human rights.

    The authors stress that “each allegation involves a number of human rights violations” because individual human rights violations (such as land grabbing) often lead to others (such as the destruction of livelihoods). Since the organization has to limit itself to publicly available information, the figure of 679 cases is only the “tip of the iceberg,” a spokeswoman said. It was also difficult to estimate how many people were affected by human rights violations in total.

    Human rights violations in mining, infrastructure and fossil fuel sectors

    Chinese overseas mining projects record the highest number of allegations of human rights violations (236), followed by the infrastructure sector (152 allegations) and fossil fuel projects (118 allegations). These three project types thus account for more than two-thirds of the incidents registered.

    In regard to the nature of the violations, most allegations relate to violations of land rights (194 allegations) and, closely related, threats to the livelihoods of individuals affected by Chinese overseas projects (190 allegations). In certain infrastructure projects, for example, people are resettled without receiving compensation for their expropriated land, according to the study’s authors. The destruction and pollution of the environment and resulting effect on human health were also among the most common consequences of Chinese projects (125 allegations).

    The Business and Human Rights Resource Centre counted 125 cases of labor rights violations in Chinese projects abroad. The NGO provides few details on individual cases. However, reports by other NGOs, such as China Labor Watch, have highlighted the sometimes inhumane working conditions of Chinese workers in overseas projects in greater detail. In dozens of cases, wage theft, debt bondage, or lack of medical care was discovered (as reported by China.Table).

    About eight percent (118) of alleged human rights violations counted are also found in the sector of renewable energy, with most occurring in hydropower projects. On Tuesday, Human Rights Watch (HRW) published a report on a dam project in Cambodia that is financed by China and belongs to the BRI. HRW calls it a “human rights disaster”, accusing the dam project of destroying the livelihoods of local communities who rely on fishing, agriculture and forestry. Chinese investment in renewable energy has increased in recent years as Beijing pushes a “Green Belt and Road Initiative.”

    Forced labor on fishing trawlers

    Sectors outside the media spotlight are also marked by numerous allegations of human rights abuses. According to the Business and Human Rights Resource Centre, China has increased overseas investment in agriculture and food production in recent years. Chinese companies have been accused of conflicts over land as well as labor rights violations and environmental damage in various investment fields such as pig farms in Argentina and banana plantations in Myanmar, the study said. There also is evidence of forced labor and physical assaults by Chinese crews on fishing trawlers in Indonesia and other regions of the world.

    Geographically, the allegations are relatively evenly distributed among the regions with the largest BRI investments: Most allegations were made in Asia and the Pacific (270), Africa (181) and Latin America (177). In Europe, 22 human rights violations allegations have been made.

    Over a period of several years, the Business and Human Rights Resource Centre has asked the accused Chinese companies for a comment on the allegations. However, responses were received for only 101 allegations, i.e. less than one in six allegations – a lower response rate than for similar requests to companies from other countries. According to the study, half of the Chinese companies responded with a truism, while the other half commented specifically on individual points, which presupposed an internal investigation. Such responses at least showed “greater will to dialogue,” the NGO said. Only five companies referred to international standards in their responses, while all others simply stressed that they abide by the local rules of the host countries. The study authors called this approach problematic, “especially when companies operate in countries where local laws are barely developed or enforced.”

    Only “green” and “sustainable” on paper?

    In recent years, Beijing has enacted a series of political initiatives and regulations to ensure compliance with human rights and environmental protection standards. However, numerous allegations of human rights violations show that paper is patient and there is a lack of implementation at sites. The verdict of the Business and Human Rights Resource Centre: “China’s regulations fall short.” They do not provide “systematic protection of human rights in overseas business activities”.

    Golda S. Benjamin, Program Director of the Business and Human Rights Resource Centre says: China’s image as a responsible major power is at risk of being tarnished “if the government and companies do not adequately focus on the urgent need for action to address human rights risks in their overseas projects”. The NGO calls for “effective human rights due diligence” by Chinese companies and “appropriate grievance mechanisms to enable victims of human rights abuses” to pursue claims for compensation and legal action.

    • Geopolitics
    • Myanmar
    • New Silk Road
    • Society

    New opportunities through tech crackdown

    China’s recent crackdown on major tech corporations could potentially boost competition and put the economy on a “healthier,” more diverse footing. That’s the conclusion of analysts at U.S. rating agency S&P Global. Instead of anti-competitive practices, takeovers and listings abroad, China’s companies could aim for more organic growth in the future, for example through additional investment spending.

    China is doing what the US can’t seem to do: regulate its domestic tech giants,” notes Will Oremus, specialist on digitalization at the Washington Post. Beijing had for the longest time allowed its big tech companies to grow unchecked, while keeping major foreign competitors like Facebook at bay. Internet giants like Alibaba and Tencent were seen as proof of the great economic potential of China’s global rise.

    In the meantime, however, companies have become huge conglomerates, reaching market shares of more than 80 percent, and are now seen as a risk to social stability by China’s authorities. With a major reform package, China now wants to break or at least soften their monopolies. In addition, it wants to take stronger action against usury, distortion of competition, poor working conditions, dumping, violations of data protection, and violations of child and youth protection. “The goals of the Chinese government are not so different from those of its Western counterparts,” Oremus writes, while the latter “have fewer control mechanisms and levers to achieve their goals.”

    China does not destroy the technology sector

    Rui Ma, one of the leading experts on China’s tech sector and founder of the tech podcast Tech Buzz China, agrees: “China is not destroying its tech industry.” Ma has been commuting between the two tech centers of China and the US for 15 years and was educated at Berkeley as well as at the renowned Tsinghua University in Beijing. She has worked for Morgan Stanley and Merrill Lynch, both in Silicon Valley and China. Rui Ma is convinced that China is only rearranging the market to make it work more efficiently – in other words, to make it more diverse and open to competition.

    This includes a new rule mandating a review of foreign IPOs of Chinese companies in possession of data on more than one million Chinese consumers. A number of companies have already shelved their plans for IPOs as a result, including bike-sharing company Hello Inc backed by Alibaba’s Ant Group, social media platform Xiaohongshu, e-commerce platform Meicai and TikTok parent ByteDance.

    Reconciling social stability with growth and innovation

    But Stephen Roach, an economist at Yale University, is concerned that Beijing’s policies could jeopardize confidence in China’s emerging consumer society:These actions are going to the core of what has been so exciting about China for years,” he says, adding that the more private companies depend on the Communist Party’s goodwill, the greater and more opaque the risks for investors. But Roach has always been a free-market liberal who dislikes government interference in business. He overlooks the fact that the Chinese tech boom he celebrated for years could only come about because Western competitors were kept out of the Chinese market by a state ban.

    Loopholes for Big Tech remain

    U.S. capital markets are likely to remain a source of funding for Chinese companies despite increased scrutiny, analysts at S&P Global believe, adding that there is no end to the Chinese IPO boom in the U.S. in the foreseeable future. Many Chinese companies listed in the U.S. are taking advantage of a legal loophole in China by setting up a so-called Variable Interest Entity (VIE) holding company in tax havens and listing them overseas.

    Through such VIE companies, companies are able to circumvent Chinese regulations that prohibit foreign investors from any involvement in key sectors such as the tech sector. This enabled the value of Chinese stocks on Wall Street to rise from just a few billion dollars to two trillion dollars in two decades. Companies like ride-hailing service Didi Chuxing are not listed on the New York Stock Exchange themselves, but as holding companies, in this specific case “Didi Global” based in the Cayman Islands. The VIE holding structure will remain safe for now, S&P expects.

    U.S. regulators have stopped approving new listings of Chinese companies in recent weeks amid uncertainty surrounding VIEs and China’s regulatory actions. “They will probably gain new tools to regulate these companies but that doesn’t mean they will necessarily ban the whole structure as the consequences would be too significant. But we just don’t know yet.” explains a Hong Kong IPO lawyer. In the end, Beijing could come up with rules that set a trend that will also be felt in the US and Europe – if Western policymakers are willing to stand up to the tech giants.

    • Alibaba
    • Didi
    • Technology
    • Tencent
    • USA

    News

    Automotive market: combustion engines struggle, electric vehicles grow

    China’s car market continues to weaken. In July, passenger car sales continued to perform below the previous year’s level. With a minus of 6.4 percent, the decline was even stronger than in June, according to the Passenger Car Association (PCA) on Tuesday. Even when including commercial vehicles such as minivans, the overall market was on the decline. CAAM, the state-affiliated automakers’ association, recently reported a nearly 14 percent month-on-month decline in vehicle sales to 1.82 million units. At the same time, CAAM stressed that despite the decline in June and July, vehicle sales were still up by almost one-fifth in the first seven months compared to the same period last year, dominated by Covid. In general, however, it is safe to say that the automotive market is still in a difficult phase – partly due to the chip shortage.

    However, according to initial company reports for July, the electric segment is performing better: sales of startup’s Li Auto (8,569) and Xpeng (8,040) more than tripled in July compared to the previous year, according to a report by news agency Reuters. For Nio, sales still more than doubled to 7,930 cars, up 125 percent. July’s data for the overall electric segment has not yet been released. ck

    • Batteries
    • CAAM
    • Car Industry
    • Electromobility
    • PCA

    Controversial death sentence against Canadian upheld

    Against a backdrop of diplomatic tensions between China and Canada, several sentences are being handed down these days to Canadians imprisoned in the People’s Republic. The court of appeal in the northeastern Chinese province of Liaoning announced on Tuesday that the death sentence for Canadian citizen Robert Lloyd Schellenberg made in January 2019 would be upheld. Today, on Wednesday, a Chinese court is already expected to rule in the case of jailed Canadian businessman Michael Spavor. This was reported by news agency Reuters, citing unnamed Canadian sources.

    Both cases are more or less directly related to the arrest of the chief financial officer of Chinese telecom giant Huawei, Meng Wanzhou, in Vancouver, Canada. A trial is currently underway in Canada to decide whether to extradite the daughter of Huawei founder Ren Zhengfei to the US – where she is accused of bank fraud, among other things. Meng is currently under house arrest in Vancouver. Her lawyers are currently trying to avert extradition to the US by presenting exculpatory material (as reported by China.Table).

    Schellenberg had received a 15-year prison sentence in November 2018. However, a short time later the verdict was deemed to be too lax – after Meng’s arrest. In the last instance, China’s Supreme People’s Court must now confirm the death sentence – as is the case for every death penalty in China. Spavor was charged with espionage in June 2020 along with fellow Canadian and former diplomat Michael Kovrig. Both face lengthy prison sentences. The governments of China and Canada accuse each other of acting out of political motives and have called on each other to release their citizens. ck

    • Canada
    • Geopolitics
    • Huawei
    • Justice
    • Meng Wanzhou
    • Michael Kovrig
    • Michael Spavor
    • USA

    China recalls ambassador from Lithuania

    Relations between Lithuania and China continue to deteriorate. Beijing has now recalled its ambassador Shen Zhifei from the Baltic state. Also, according to a report by South China Morning Post, China asked the government in Vilnius on Tuesday to withdraw its ambassador Diana Mickeviciene from Beijing as well. The reason: Lithuania allowed Taiwan to open an official trade office in July, which also bears the name “Taiwan” in its title (as reported by China.Table). Conversely, Lithuania wants to open a trade representative office on the island of Taiwan.

    Even a hint of official relations between other nations and Taiwan, which Beijing regards as a renegade province, is taboo for China as this violates its one-China principle. No other state in Europe has yet dared to host an official Taiwan office. The Foreign Ministry in Beijing urged Lithuania to “correct its wrong decision immediately.”

    Whether Lithuania will follow this demand is uncertain. However, Vilnius already showed Beijing the cold shoulder in May when it withdrew from the 17+1 initiative, in which China cooperates with Central and Eastern Europe. 17+1 had not brought the hoped-for market access to China and would divide Europe, Lithuania argued. Meanwhile, it is in support of Taiwan’s bid for observer status at the World Health Organization (WHO). As of 2019, China ranks only 22nd among Lithuania’s export markets and is the 10th largest supplier of imported goods to the Baltic state. ck

    • Diplomacy
    • Geopolitics
    • Taiwan

    New peak in Covid infections

    Earlier this week, China recorded an all-time high in Covid infections since the latest wave began on July 20. A total of 181 new COVID-19 infections have been registered, the South China Morning Post reported on Tuesday, citing information provided by authorities. According to the report, the National Health Commission (NHC) reported 143 new symptomatic cases. The remaining infections showed no symptoms. Of the 143 cases with symptoms, 108 were due to local infection; 35 occurred in people arriving from abroad. No deaths were recorded. Just under half of the newly recorded infections had occurred in the province of Jiangsu, 48 of them in the city of Yangzhou, according to the report. So the province remains the biggest hotspot of the recent outbreak.

    NHC director Ma Xiaowei urged officials in a speech to “make epidemic prevention work a matter of paramount importance,” according to reports, including by the Financial Times (FT). To combat the virus, “paralysis of thought” must be overcome, the report further quotes Ma as saying.

    Beijing is trying to stem a rise in cases with the highly contagious delta variant. But the worst outbreak of the coronavirus since last year has now heightened concerns about a slowdown in economic growth in the country. Goldman Sachs lowered its expectations for China’s third-quarter gross domestic product growth to 2.3 percent from the previous quarter; the investment bank had previously forecast 5.8 percent. Goldman nevertheless expects an economic recovery toward the end of the year. “Our forecasts predict that the government will bring the Covid outbreak under control in about a month and the related control measures will then mainly hit the services sector,” the FT quoted Goldman analysts as saying. ari

    • Coronavirus
    • Delta
    • Goldman Sachs
    • Health
    • Jiangsu
    • Society
    • Yangzhou

    Switzerland warns media against phantom biologists

    The Swiss embassy in Beijing has called on Chinese media to stop referring to the supposed Swiss biologist “Wilson Edwards” in their reporting on the origin of the Covid virus and to delete articles that cite him as a source. There is simply no Swiss person registered under that name. Nor are there any scientific articles published under this name in the field of biology.

    Why all the fuss? Chinese media outlets such as the Global Times and China Daily had cited social media posts by an alleged Swiss named “Wilson Edwards” in which he expressed concern about the independence of the World Health Organization (WHO). Scientists tasked with the investigation of the origins of COVID-19 in Wuhan had been pressured by the US, the cited posts claimed.

    However, the posts were apparently deliberately launched via a phantom account. According to the Swiss embassy, the fake biologist’s Facebook account was only public for a single day and had only three followers. The embassy writes: “We assume that the media have spread this story in good faith. However, we ask anyone who has published this story to delete it and publish a correction.”

    In the debate over the origin of the COVID-19 virus, newspapers and television stations are forbidden to conduct their own investigations. Instead, the media must, per government instructions, continually put forward the thesis that the virus probably originated outside China. nib

    • Coronavirus
    • Media
    • Society
    • WHO

    Beijing sticks to climate plans

    China will not tighten its climate plans in the short term, despite Monday’s alarming report by the Intergovernmental Panel on Climate Change. China’s foreign ministry proclaimed “full confidence in the implementation of China’s climate action,” news agency AFP reported Tuesday. In July, China missed a deadline to send updated 2030 mitigation plans to the United Nations. The People’s Republic plans to peak emissions before 2030 and achieve climate neutrality by 2060.

    China’s special climate envoy Xie Zhenhua recently announced that the government would publish strategy papers and detailed implementation plans for reducing emissions before the global climate summit in November. Xie announced a framework focusing on ten areas. These include the reduction of the use of fossil fuels, a low-CO2 building and mobility sector, green finance, further improvement of emissions trading (as reported by China.Table) and generally promoting green and low-CO2 technologies and innovations. Following its rapid economic rise, China is now the world’s largest CO2 emitter in absolute terms – not per capita. Accordingly, emissions must fall again quickly in order to achieve climate goals. nib

    • Climate
    • Sustainability
    • Xie Zhenhua

    Profile

    Jackie Chan: Wannabe Party Member

    The relationship between action movie star Jackie Chan and his hometown of Hong Kong was once a very special one. People loved the actor for his martial arts, his move, and his role as an ambassador for the city, whose image he helped shape since the 1980s as a comedic gadfly with outstanding kung fu skills. As a child, he even acted alongside legendary Bruce Lee, and many considered him his legitimate successor.

    Jackie Chan, whose Chinese name is Cheng Long, is also outside of China, synonymous with the cultural creativity of the metropolis. However, Chan, who has starred in around 200 movies, has since dramatically lost the affection of many of his Hong Kong compatriots over recent years. Most recently, he caused outrage and head shaking in July when he told his audience at a China Film Association symposium in the People’s Republic, “I’m very lucky to be a Chinese person, but I also am very jealous that you all are Party members. I just think the Chinese Communist Party is really so magnificent.” What the Party said and promised it would accomplish in a few decades, while other (parties) would take 100 years to do it: “I want to be a Party member!”

    It was not the first acknowledgment by the 67-year-old of the CCP’s monopoly on power and its increasing influence over his hometown. In 2009, he had once mischievously remarked that he was no longer sure whether freedom was good or not. He had gradually come to realize the importance of Chinese people living under strict control. “Otherwise, we’ll do what we want. Just look at road traffic,” he said. He appeared on state television as a regular guest on the New Year’s show, and in 2008 he was part of the Olympic torch relay heading to Beijing.

    Jackie Chan: Support for the Security Act

    Hong Kong’s love was already beginning to crumble. By 2019 at the latest, it had turned to pure hatred among many of the city’s pro-democracy citizens when Chan publicly condemned the protest movement. Later, Chan, like many other celebrities in the city, signed a joint statement claiming that the introduction of the National Security Law for Hong Kong was an urgent tool to restore stability and peace in the city.

    He had already fallen out with many Taiwanese citizens much earlier, after calling the 2004 presidential election in the island state “the biggest joke”. A few years later, during a promotional tour to Taiwan, which Beijing considers part of its territory, he faced a lot of hostility. Demonstrators waited for him at the airport, urging him to “Get lost”.

    His support for the authoritarian policies of the CCP eventually turned into a political mission. Since 2013, Chan has been a member of the Chinese People’s Political Consultative Conference in Beijing. As such, he has the opportunity to introduce proposals into the policy-making process of the People’s Republic. In turn, the party and state media use his name to popularize their policies in Hong Kong and around the globe. Another example is professional basketball player Yao Ming, who has tens of millions of fans in China, and since the end of his career has been used as a poster boy for the authoritarian regime. For no one dares to turn down an invitation to the Consultative Conference, not unless he or she wants to be perceived at least as ungrateful or, at worst, even as a dissident.

    The commercial consequences for celebrities can be devastating should they choose not to follow the Party’s will, as John Lee of the Hudson Institute in Washington told Vice Magazine about the Jackie Chan case. “There are potentially serious commercial consequences for celebrities and entertainment executives who make sensitive comments that are deemed as being critical of China and the Communist Party,” Lee says. Especially when their own movies rely on whopping revenues at the Chinese box office. While Hong Kong stars like Chan have opted to kowtow, actor Chow Yun-fat (The Assassins, Pirates of the Caribbean) or singer Denise Ho have been punished with exile from the Chinese market for supporting the pro-democracy movement.

    Philanthropist in tax havens

    Jackie Chan is not only an actor, but also an entrepreneur. His film production company and cinema chain are also active in China. Chan has promised to donate half of his fortune of several hundred million US dollars posthumously to good causes. His own foundation aims to provide young people in Hong Kong with better educational opportunities. He is also committed to the welfare of endangered species. The sheen of his philanthropy was scratched, however, when his name came up in 2016 in connection with the publication of the Panama Papers. Through an obscure law company, he owned six companies managed in tax havens. A legal practice, but for many ordinary mortals, it was reason enough to accuse him of contributing to social inequality in the world.

    In the meantime, Chan subtly promotes changes among the world’s major powers in his movies. Take, for example, the 2010 remake of Karate Kid, which Chan also directed and starred as a Beijing janitor introducing an African-American boy who immigrated from the US to the world of kung fu. In one scene, the boy, talking to his single mother from the US working class, laments that he wants to go back home. Her response: “This is our home.” The idea of portraying China as a country of immigration, as the U.S. is for Chinese, might seem hilarious – but is pure fiction for the time being

    But who knows how the world will develop; perhaps the People’s Republic will soon become dependent on wage labor from abroad because of its demographic change. Thirty years ago, no one would have expected Jackie Chan to support an authoritarian regime. A week before the Tiananmen Square massacre in 1989, Chan attended the benefit Concert for Democracy in China at the Hong Kong Happy Valley Racecourse, in which all the artists had volunteered to take part. grz

    • Chinese Communist Party
    • Culture
    • Film
    • Hongkong

    Executive Moves

    Martin Königsmann was appointed VP and Partner Management Consulting Asia-Pacific at Bosch China Investment Ltd. in Shanghai in August. Königsmann had previously held several positions at Robert Bosch GmbH. Most recently, he was Director of Consulting at Robert Bosch GmbH from February 2017 to August 2021. Königsmann studied chemistry at the University of Bremen and holds a doctorate in chemistry.

    • Bosch

    Dessert

    A food delivery man checks new orders on an empty street in Zhangjiajie, Hunan. Since last Tuesday, residents and tourists have not been allowed to leave the central Chinese city in an effort to contain the recent local Covid outbreak. Delivery services are providing people with essential supplies such as food and medical products. Zhangjiajie is located near a national park with globally unique quartzite sandstone formations, considered a UNESCO World Heritage Site.

    China.Table Editors

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