Beijing pursues power politics in the Gulf of Aden + New Fuxing high-speed train even faster

Dear reader,

When the train is delayed by an hour or more, or the train drivers go on strike, you might wish you were in China. Not only are there no strikes there. The high-speed trains there are as fast as the name suggests. Trains travel at 300 km/h on many routes and even up to 350 km/h between Beijing and Shanghai.

The Fuxing CR 400, a symbol of China’s technological prowess, has made the train a genuine alternative to air travel. In the near future, traveling by train is set to become even more attractive. China’s state-owned manufacturer CRRC has announced the successor model, Fuxing CR 450, for 2025. The new model series is expected to reach a top speed of 450 km/h. Joern Petring reports on these and other innovations.

The Fuxing is not the only example of China’s massive investment in rail transport. The country also spent billions on the railway lines along the New Silk Road. During the COVID-19 pandemic, when ships were often stuck outside China’s ports, and everything came to a grinding halt, the railway proved to be a backup for transporting goods and parts from A to B.

Now, maritime traffic has come to a standstill again: Houthi rebels are attacking cargo traffic in the Gulf of Aden and the Bab-el-Mandeb Strait. However, China is not participating in the international anti-Houthi alliance. This may seem surprising at first. After all, as the world’s leading exporter, China is just as severely affected as other nations. However, power-political motives play a large role in Beijing’s position in the conflict, writes Michael Radunski. Moreover, the overland route of the New Silk Road gains significance.

Your
Julia Fiedler

Anti-Houthi alliance: China abstains for political reasons

By

Michael Radunski

Houthi rebels from Yemen continue to attack ships in the Gulf of Aden and the Bab-el-Mandeb Strait. Sometimes, they use drones; sometimes, they fire missiles at international freighters. To ensure safe passage and the free flow of global goods, the USA has formed an anti-Houthi alliance. The alliance includes countries such as the UK and Australia, as well as Bahrain and Singapore.

The EU also wants to help and has decided on its own military mission this week. Germany could deploy the frigate “Hessen.” Unlike the US strategy, the EU mission is to be purely defensive. A spokesperson for the Federal Foreign Office in Berlin clarified that “firing on Houthi positions on land” was not planned.

Houthi attacks hit China

The Houthi attacks have particularly hit large trading nations and China in particular, as the world’s leading exporter:

Indirectly because, as a trading power, it is heavily reliant on sea trade. Around 40 percent of trade between Asia and Europe passes through the Red Sea. It is an important transit route for energy supplies from the Middle East and Africa. The Red Sea is also an important gateway for Chinese products to the African, European, Arab and American markets.
Directly, because China has made several investments around the Suez Canal, including a 20 percent stake in the Suez Canal Container Terminal.

“The Red Sea is an important international trade route for goods and energy. Safeguarding the security and stability of the region serves the common interest of the international community,” the Chinese Foreign Ministry spokesperson emphasized.

China’s opportunities to participate

But China is holding back when it comes to ensuring this security and stability. Yet, Chinese involvement would be possible at any time. Since 2008, Beijing has regularly deployed naval task forces to the Gulf of Aden near the Yemeni coast to carry out escort missions and anti-piracy operations. China also maintains a military base in nearby Djibouti. The US State Department said it would “welcome China playing a constructive role in trying to prevent those attacks.”

US National Security Advisor Jake Sullivan is also said to have raised the issue at his meeting in Washington this month. He reportedly urged Liu Jianchao, head of the CP’s international department, to at least put pressure on Iran to end the Houthi attacks.

But China is obviously unwilling to actively ensure security and stability. Beijing rejects any involvement in the anti-Houthi alliance. Instead, it says: “We believe relevant parties, especially major countries with influence, need to play a constructive and responsible role in keeping the shipping lanes safe in the Red Sea.”

China’s reasons for not participating

A closer look shows that China has selfish but perfectly rational reasons for not getting more involved.

Fuelling sentiment against the United States

The leadership in Beijing sees itself in a duel with the United States. And so they take every opportunity to blame the US for conflicts. This is also the case here. An editorial in the Global Times on 19 December argues that the “crisis” in the Red Sea is a direct result of the war in Gaza – and Beijing believes to have found the culprit here: “The root cause is that the US has never taken a fair stance, nor has it taken into consideration interests of the Middle Eastern countries, but rather approaches the Middle East issue based on its own hegemonic needs.”

China’s interests in the Arab world

China has found the Middle East to be an important component of its geopolitical strategy. With a combination of diplomatic skill, seemingly neutral restraint, and a dash of anti-Americanism, Beijing is trying to gain influence in the region. In order to score points with Arab and Muslim governments, China has taken a clear stance for Palestinians, in whose name the Houthis allegedly carry out their attacks. The result: As with the Hamas attacks, Beijing does not blame the Houthis by name.

China as the leader of the Global South

All these regional efforts are part of a much bigger picture: China considers itself the leader of the Global South. Ahmed Aboudouh, Middle East expert at Chatham House, explains the context as follows: “Beijing believes that any political support for the US-led maritime coalition against the Houthis would undermine its support for a permanent ceasefire and peace process in Gaza, antagonize regional populations, and delegitimize its long-term prospects for leadership of the Global South.”

China wants to strengthen BRI’s land route

However, economic aspects also play a role. The volatile security situation in the Red Sea is driving up freight costs. According to Drewry’s World Container Index, the price of transporting a 40-foot container from Shanghai to the Italian port of Genoa shot up by 21 percent on 18 January compared to the previous week – and by as much as 126 percent compared to January 2023.

However, the short-term effect is that land transport becomes more attractive. Eric Olander, co-founder of the China Global South Project initiative, mentions China’s Belt and Road Initiative in this context: China has spent billions over the past decade building three railway lines connecting Chinese industrial hubs with Europe. Olander is convinced that these rail links are now more in demand than ever, as maritime transport costs have increased tremendously.

Long and short-term gains

While Beijing’s diplomatic and power-political considerations are geared towards long-term gains, the economic aspects focus more on short-term gains. After all, railways or roads cannot replace Maritime transport in the long term – no matter how successful the Belt and Road Initiative is. Beijing is well aware of this. And China’s overarching trade interests will also suffer enormous damage.

However, Beijing’s current considerations follow a cold rationale – and are successful, at least in the short term. Indeed, the Houthi fighters have announced that they will not perform attacks on ships from China passing through the Red Sea. The result: As data from Lloyd’s List shows, Chinese cargo traffic in the region has increased steadily since the end of December.

Symbol of China’s technological progress: The Fuxing will become even faster

A Fuxing high speed train pulls into the station in Xining, Qinghai.

By

Jörn Petring

Eight years after its introduction, China’s Fuxing express train will soon receive a significant update: According to Chinese state media, the first trains of the new Fuxing CR450 series will make their debut next year and will be significantly faster with a maximum speed of 450 kilometres per hour.

After the first Fuxing trains went into regular service in 2017, China rightly celebrated it as a huge breakthrough. After all, the Fuxing was the first high-speed train developed entirely in China. Earlier trains were based on technologies from Siemens’ ICE, the Japanese Shinkansen and trains from Canadian manufacturer Bombardier. The Fuxing thus became an important symbol of China’s growing technological prowess.

The train is being overhauled in many respects. China’s state-owned manufacturer, CRRC, plans to complete the construction of CR450 prototypes this year and carry out extensive tests. Regular operation is planned for 2025.

400 km/h in everyday operation

Above all, the CR450 is set to become faster and more intelligent. The fastest Fuxing train version to date, the CR400, has a theoretical top speed of 400 km/h. In everyday use, however, it reaches 350 km/h.

This speed is reached, for example, on the roughly half-hour journey between Beijing and Tianjin. The express trains between Beijing and Shanghai also travel at 350 km/h. The fastest regular route between these two megacities currently takes 4 hours and 29 minutes, including short stops in Nanjing and Jinan. On many other express train routes in China, a speed of 300 km/h has been set.

The CR450 will speed up these journeys even more. In keeping with its designation, it will reach a top speed of 450 km/h. In everyday operations, however, it will be somewhat slower, like its predecessor, traveling at around 400 km/h.

The days of airplane traffic between Beijing and Shanghai are over

Although the party newspaper Global Times and other state media report that the travel time between Beijing and Shanghai could be reduced to just 2.5 hours, this seems questionable. The distance between the two cities is about 1,318 kilometers. Even when traveling at a speed of 400 km/h without stops, the journey would take well over three hours.

Despite this, there is no doubt that journeys between Beijing and Shanghai will soon become even faster. Traveling by plane is definitely no longer a viable alternative on this route. In addition to higher speeds, other innovations are to be expected:

The CR450 is expected to be more energy-efficient and eco-friendly than its predecessors. This will be achieved through improved drive systems, aerodynamic design and the use of sustainable materials.
Improved braking systems and control technologies, as well as advanced monitoring and diagnostic systems, are planned to ensure safety at high speeds.
Presumably, the CR450 will also offer improved passenger comfort.

This is actually the first major revision of the Fuxing, after previous adaptations were mainly made for different terrains. For example, after 2017, Fuxing trains were introduced for extreme weather conditions such as sandstorms or icy temperatures.

There is little reason to doubt that the CR450 will be on the tracks next year. After all, the new train is even mentioned in the current five-year plan, which ends in 2025.

Global China Conversations: Politics weaken growth potential

China will not recover from its economic slump any time soon. The People’s Republic remains below its growth potential due to political decisions. This was the general message of the webinar “Prospects of the Chinese economy: short malady or fundamental slow-down?” from the Global China Conversations series of the Kiel Institute for the World Economy. China.Table is the media partner of the event series.

Adam Posen, President of the Peterson Institute for International Economics (PIIE) in Washington, sees China’s economic development as a departure from Deng Xiaoping’s maxim of non-interference in the economy (“no politics, no problem”). This shift began with President and party leader Xi Jinping’s successful consolidation of power in 2015 and peaked during the zero-Covid. The result was lower investment and less consumption of durable goods. Conversely, savings have increased, particularly in low-risk investments.

China’s interventionism is no longer effective

Posen also sees a weaker response to Beijing’s attempts at stimulating the economy. This could tempt Xi to rely even more heavily on state-owned companies than before. Posen referred to a PIIE study, which found that the share of state ownership in the market capitalization of China’s 100 largest companies rose from just over 31 percent to 50 percent between June 2021 and the end of 2023.

China has not yet learned one thing, said Stefan Kooths, Director of the IfW’s Business Cycles and Growth Research Center, in his article: “The more developed an economy becomes, the less interventionism works.” This is also true for the annual growth targets, according to Kooths. Xi also prioritizes social stability over economic development.

Kooths recommends that the government focus on direct transfer payments to the people rather than subsidies to state-owned companies. This would be more effective and not lead to trade conflicts. Even if many Chinese companies owe their competitiveness not only to Beijing’s subsidies, but also to their own innovative power, says Kooths. He warned that the West must focus on its strengths vis-à-vis China and stay true to its model instead of relying on increased intervention. ck

Elon Musk warns of EV competition

Tesla CEO Elon Musk expects Chinese EV manufacturers to “demolish” their global competitors if trade restrictions such as import tariffs are implemented. “If there are no trade barriers established, they will pretty much demolish most other car companies in the world,” he said on a post-earnings call with analysts on Wednesday. “They’re extremely good.”

Asked about Musk’s comments, the Chinese foreign ministry said at a regular briefing on Thursday that it was unaware of the reports but advocated “maintaining a fair, just and open business environment.”

US market leader Tesla is facing particular pressure from BYD. The Shenzhen-based company grew by 62 percent in 2023 and overtook Tesla in global sales of new energy vehicles (NEVs) for the first time in the fourth quarter. Plug-in hybrids are included in this figure. Tesla continues to lead the premium EV segment in China.

Due to strong competition and weakening demand in China, Tesla had already lowered its prices several times, most recently at the beginning of the year. In early 2023, the company had already fuelled a price war for electric cars, which Chinese manufacturers and VW – for example, with the ID.3 – also had to join. The price war reduces the profit margin and worries investors. Musk now warned during the conference call that Tesla was reaching “the natural limit of cost down” with its existing lineup. rtr/jul

Study: Restructuring a few companies could achieve the 1.5-degree target

A full decarbonization of the world’s 1,000 most CO2-intensive industrial plants could save around eight billion tonnes of CO2 a year. That is around a third of the reduction required to achieve the 1.5-degree target. This is the result of the “Global Carbon Restructuring Plan” study presented by management consultancy Roland Berger. The necessary transformation would require investments of between 7.5 and 10.5 trillion US dollars between 2025 and 2050, depending on the technology used. Renewable energies would be the cheapest option.

According to the study, over three-quarters (77 percent) of emissions come from electricity generation, 18 percent from the iron and steel sector, and 3.5 percent from the oil and gas industry. Only 40 companies are responsible for over half of the emissions. According to the report, this shows the huge climate action potential of concerted action to decarbonize these main emitters.

Most of these high-emission plants are located in China (54 percent) and India (13 percent), followed by the USA (10 percent) and Europe (3 percent). This is a problem because these locations would mean that China and India would be significantly more affected by decarbonization. They would need to spend between 18 and 30 percent of their gross domestic product on this, while the USA and Europe would only have to spend between two and five percent. bpo

British steel trader Stemcor could change hands again

According to a media report, British steel trader Stemcor could soon become the property of a Chinese company with state connections. Sky News reported, citing sources in the London city administration, that takeover negotiations are currently underway with a company close to the Guangzhou Aerotropolis local government.

City sources said that the takeover by Guangzhou Aerotropolis was triggered by a pledge of Stemcor shares. The ownership of Stemcor has changed repeatedly in recent years. Since July 2022, Stemcor has been owned by ShouYe Holdings, a Hong Kong-based company.

ShouYe had acquired the company from the Cedar Holdings Group. The Guangzhou-based group reportedly had difficulties repaying its debts. If the deal goes through, Guangzhou Aerotropolis would be the third Chinese company to own Stemcor in less than two years. Stemcor did not initially comment on the matter. ari

The Mianzi myth

All expats to be sent to China would almost surely be lectured by an intercultural communication coach about the concept of mianzi (面子), but the interpretations are not always correct.

The biggest myth is that you should be indirect when making a refusal or a negative comment to your Chinese colleague. This is wrong. It’s totally fine to be direct in closed-door meetings. Business is business; the Chinese are well aware of what that means. Just don’t say it when a third party is present. But that is the rule for almost everywhere.

Also, like in other parts of the world, it is advisable not to over-generalize or link a problem to the local or national character when discussing it. Comments such as “The Chinese way of doing this is wrong…” are a slap on a Chinese face, an egregious loss of face.

Mianzi as newly rich vanity

That said, mianzi today, however, is often about pomp. Those needing an example could simply compare videos from the luxury version of the G20 Summit in Hangzhou, China, in 2016 and the working conference-style version in Hamburg in the following year.

The Chinese showy way is an indication of not being confident. As China tries to receive what it sees as due respect from other countries, this kind of practice will continue for some time. For guests, it could occasionally be exhausting, but generally enjoyable. The real problem is that the Chinese expect reciprocity and comparable treatment when being hosted by the same foreigners. Otherwise, they would feel lightly treated or even humiliated.

This mentality manifests itself not only at the state level, but also at local levels. The rule of thumb is that the more developed and business-friendly a place is, the less vain the people are. But when unsure, go for the ostentatious option to be safe.

The art of shaking hands

When German Economy Minister Robert Habeck bowed while shaking hands with the Emir of Qatar, it was widely discussed in Germany. If a Chinese politician or businessman were to be caught bowing to a foreigner this way, the sensation would be far greater, as it would be perceived as a scandalous loss of mianzi.

Chinese excellencies and VIPs shake hands in a fundamentalist or minimalist way: Standing straight, one hand, saying greeting words, no extra moves. For the Chinese, a pat on the back while shaking hands is an overly intimate and almost patronizing move. A pat on the shoulder is definitely patronizing. Americans often commit this offense.

Holding glasses low and finger kowtow

The Chinese also have quite some manners that they would use among themselves. The country’s holiday season starts from Christmas and will last until the Chinese New Year, which falls on February 10 this year. There will also be parties and group dinners. Alcohol will flow; wine glasses, beer steins, and spirits (白酒 bái jiǔ) cups are clinked. It’ll be a bit helpful to know the following.

When doing the clinking, non-boss Chinese would commonly try to keep their glasses a bit lower to show deference. Occasionally, they will start a funny competition of who can go lower. When others pour drinks or tea for them, many would tap the table surface with the index and middle fingers. This is supposed to be a symbolic kowtow to express gratitude. These apply not only in the holiday season, but also in everyday social drinking and dining.

Be yourself and stay sober

However, as in most other places in the world, a nod or a thank-you will be enough when somebody serves you drinks. And you don’t need to join the glass-lowering game or do the finger kowtow. It will most likely make you look clumsy and even a bit obsequious. A smiling eye contact will do for glass-clinking.

So stay friendly and calm and be yourself. And this is particularly true when your Chinese hosts try to make you drink more alcohol than you could. Chinese still sometimes do it among themselves, especially in smaller cities and the countryside. It’s a ridiculous social phenomenon, a weird combination of hospitality, power play and fun-seeking.

In big cities, Chinese people usually won’t be so pushy to a foreign guest, but there is still a tiny chance in smaller cities. So stay vigilant, and when you have had enough, stop and tell your hosts politely but firmly.

And one last note before finishing: when buying flowers for a dinner visit to somebody’s home, stay away from chrysanthemums, especially white and yellow ones; they are only for funerals.

If you turn up your Bluetooth speaker too loud in public, you can also expect harsh comments in China. However, anyone complaining about the sounds from the “Ideology Power Bank” could face a very different kind of trouble. The combination of speaker and power bank allows the user to charge their smartphone while listening to Xi Jinping’s wisdom – more precisely, 72 essays based on his book series “Governing China, Volumes 1-4”. The gadget was conceived by the state newspaper Guangming Daily. According to the inventors, it is to be distributed to cadres throughout the country.

CHINA.TABLE EDITORIAL OFFICE

Amelie
Richter

Marcel
Grzanna

Fabian
Peltsch

Julia
Fiedler

Angela
Köckritz

Jörn
Petring

Dear reader,

When the train is delayed by an hour or more, or the train drivers go on strike, you might wish you were in China. Not only are there no strikes there. The high-speed trains there are as fast as the name suggests. Trains travel at 300 km/h on many routes and even up to 350 km/h between Beijing and Shanghai.

The Fuxing CR 400, a symbol of China’s technological prowess, has made the train a genuine alternative to air travel. In the near future, traveling by train is set to become even more attractive. China’s state-owned manufacturer CRRC has announced the successor model, Fuxing CR 450, for 2025. The new model series is expected to reach a top speed of 450 km/h. Joern Petring reports on these and other innovations.

The Fuxing is not the only example of China’s massive investment in rail transport. The country also spent billions on the railway lines along the New Silk Road. During the COVID-19 pandemic, when ships were often stuck outside China’s ports, and everything came to a grinding halt, the railway proved to be a backup for transporting goods and parts from A to B.

Now, maritime traffic has come to a standstill again: Houthi rebels are attacking cargo traffic in the Gulf of Aden and the Bab-el-Mandeb Strait. However, China is not participating in the international anti-Houthi alliance. This may seem surprising at first. After all, as the world’s leading exporter, China is just as severely affected as other nations. However, power-political motives play a large role in Beijing’s position in the conflict, writes Michael Radunski. Moreover, the overland route of the New Silk Road gains significance.

Your
Julia Fiedler

Anti-Houthi alliance: China abstains for political reasons

By

Michael Radunski

Houthi rebels from Yemen continue to attack ships in the Gulf of Aden and the Bab-el-Mandeb Strait. Sometimes, they use drones; sometimes, they fire missiles at international freighters. To ensure safe passage and the free flow of global goods, the USA has formed an anti-Houthi alliance. The alliance includes countries such as the UK and Australia, as well as Bahrain and Singapore.

The EU also wants to help and has decided on its own military mission this week. Germany could deploy the frigate “Hessen.” Unlike the US strategy, the EU mission is to be purely defensive. A spokesperson for the Federal Foreign Office in Berlin clarified that “firing on Houthi positions on land” was not planned.

Houthi attacks hit China

The Houthi attacks have particularly hit large trading nations and China in particular, as the world’s leading exporter:

Indirectly because, as a trading power, it is heavily reliant on sea trade. Around 40 percent of trade between Asia and Europe passes through the Red Sea. It is an important transit route for energy supplies from the Middle East and Africa. The Red Sea is also an important gateway for Chinese products to the African, European, Arab and American markets.
Directly, because China has made several investments around the Suez Canal, including a 20 percent stake in the Suez Canal Container Terminal.

“The Red Sea is an important international trade route for goods and energy. Safeguarding the security and stability of the region serves the common interest of the international community,” the Chinese Foreign Ministry spokesperson emphasized.

China’s opportunities to participate

But China is holding back when it comes to ensuring this security and stability. Yet, Chinese involvement would be possible at any time. Since 2008, Beijing has regularly deployed naval task forces to the Gulf of Aden near the Yemeni coast to carry out escort missions and anti-piracy operations. China also maintains a military base in nearby Djibouti. The US State Department said it would “welcome China playing a constructive role in trying to prevent those attacks.”

US National Security Advisor Jake Sullivan is also said to have raised the issue at his meeting in Washington this month. He reportedly urged Liu Jianchao, head of the CP’s international department, to at least put pressure on Iran to end the Houthi attacks.

But China is obviously unwilling to actively ensure security and stability. Beijing rejects any involvement in the anti-Houthi alliance. Instead, it says: “We believe relevant parties, especially major countries with influence, need to play a constructive and responsible role in keeping the shipping lanes safe in the Red Sea.”

China’s reasons for not participating

A closer look shows that China has selfish but perfectly rational reasons for not getting more involved.

Fuelling sentiment against the United States

The leadership in Beijing sees itself in a duel with the United States. And so they take every opportunity to blame the US for conflicts. This is also the case here. An editorial in the Global Times on 19 December argues that the “crisis” in the Red Sea is a direct result of the war in Gaza – and Beijing believes to have found the culprit here: “The root cause is that the US has never taken a fair stance, nor has it taken into consideration interests of the Middle Eastern countries, but rather approaches the Middle East issue based on its own hegemonic needs.”

China’s interests in the Arab world

China has found the Middle East to be an important component of its geopolitical strategy. With a combination of diplomatic skill, seemingly neutral restraint, and a dash of anti-Americanism, Beijing is trying to gain influence in the region. In order to score points with Arab and Muslim governments, China has taken a clear stance for Palestinians, in whose name the Houthis allegedly carry out their attacks. The result: As with the Hamas attacks, Beijing does not blame the Houthis by name.

China as the leader of the Global South

All these regional efforts are part of a much bigger picture: China considers itself the leader of the Global South. Ahmed Aboudouh, Middle East expert at Chatham House, explains the context as follows: “Beijing believes that any political support for the US-led maritime coalition against the Houthis would undermine its support for a permanent ceasefire and peace process in Gaza, antagonize regional populations, and delegitimize its long-term prospects for leadership of the Global South.”

China wants to strengthen BRI’s land route

However, economic aspects also play a role. The volatile security situation in the Red Sea is driving up freight costs. According to Drewry’s World Container Index, the price of transporting a 40-foot container from Shanghai to the Italian port of Genoa shot up by 21 percent on 18 January compared to the previous week – and by as much as 126 percent compared to January 2023.

However, the short-term effect is that land transport becomes more attractive. Eric Olander, co-founder of the China Global South Project initiative, mentions China’s Belt and Road Initiative in this context: China has spent billions over the past decade building three railway lines connecting Chinese industrial hubs with Europe. Olander is convinced that these rail links are now more in demand than ever, as maritime transport costs have increased tremendously.

Long and short-term gains

While Beijing’s diplomatic and power-political considerations are geared towards long-term gains, the economic aspects focus more on short-term gains. After all, railways or roads cannot replace Maritime transport in the long term – no matter how successful the Belt and Road Initiative is. Beijing is well aware of this. And China’s overarching trade interests will also suffer enormous damage.

However, Beijing’s current considerations follow a cold rationale – and are successful, at least in the short term. Indeed, the Houthi fighters have announced that they will not perform attacks on ships from China passing through the Red Sea. The result: As data from Lloyd’s List shows, Chinese cargo traffic in the region has increased steadily since the end of December.

Symbol of China’s technological progress: The Fuxing will become even faster

By

Jörn Petring

Eight years after its introduction, China’s Fuxing express train will soon receive a significant update: According to Chinese state media, the first trains of the new Fuxing CR450 series will make their debut next year and will be significantly faster with a maximum speed of 450 kilometres per hour.

After the first Fuxing trains went into regular service in 2017, China rightly celebrated it as a huge breakthrough. After all, the Fuxing was the first high-speed train developed entirely in China. Earlier trains were based on technologies from Siemens’ ICE, the Japanese Shinkansen and trains from Canadian manufacturer Bombardier. The Fuxing thus became an important symbol of China’s growing technological prowess.

The train is being overhauled in many respects. China’s state-owned manufacturer, CRRC, plans to complete the construction of CR450 prototypes this year and carry out extensive tests. Regular operation is planned for 2025.

400 km/h in everyday operation

Above all, the CR450 is set to become faster and more intelligent. The fastest Fuxing train version to date, the CR400, has a theoretical top speed of 400 km/h. In everyday use, however, it reaches 350 km/h.

This speed is reached, for example, on the roughly half-hour journey between Beijing and Tianjin. The express trains between Beijing and Shanghai also travel at 350 km/h. The fastest regular route between these two megacities currently takes 4 hours and 29 minutes, including short stops in Nanjing and Jinan. On many other express train routes in China, a speed of 300 km/h has been set.

The CR450 will speed up these journeys even more. In keeping with its designation, it will reach a top speed of 450 km/h. In everyday operations, however, it will be somewhat slower, like its predecessor, traveling at around 400 km/h.

The days of airplane traffic between Beijing and Shanghai are over

Although the party newspaper Global Times and other state media report that the travel time between Beijing and Shanghai could be reduced to just 2.5 hours, this seems questionable. The distance between the two cities is about 1,318 kilometers. Even when traveling at a speed of 400 km/h without stops, the journey would take well over three hours.

Despite this, there is no doubt that journeys between Beijing and Shanghai will soon become even faster. Traveling by plane is definitely no longer a viable alternative on this route. In addition to higher speeds, other innovations are to be expected:

The CR450 is expected to be more energy-efficient and eco-friendly than its predecessors. This will be achieved through improved drive systems, aerodynamic design and the use of sustainable materials.
Improved braking systems and control technologies, as well as advanced monitoring and diagnostic systems, are planned to ensure safety at high speeds.
Presumably, the CR450 will also offer improved passenger comfort.

This is actually the first major revision of the Fuxing, after previous adaptations were mainly made for different terrains. For example, after 2017, Fuxing trains were introduced for extreme weather conditions such as sandstorms or icy temperatures.

There is little reason to doubt that the CR450 will be on the tracks next year. After all, the new train is even mentioned in the current five-year plan, which ends in 2025.

Global China Conversations: Politics weaken growth potential

China will not recover from its economic slump any time soon. The People’s Republic remains below its growth potential due to political decisions. This was the general message of the webinar “Prospects of the Chinese economy: short malady or fundamental slow-down?” from the Global China Conversations series of the Kiel Institute for the World Economy. China.Table is the media partner of the event series.

Adam Posen, President of the Peterson Institute for International Economics (PIIE) in Washington, sees China’s economic development as a departure from Deng Xiaoping’s maxim of non-interference in the economy (“no politics, no problem”). This shift began with President and party leader Xi Jinping’s successful consolidation of power in 2015 and peaked during the zero-Covid. The result was lower investment and less consumption of durable goods. Conversely, savings have increased, particularly in low-risk investments.

China’s interventionism is no longer effective

Posen also sees a weaker response to Beijing’s attempts at stimulating the economy. This could tempt Xi to rely even more heavily on state-owned companies than before. Posen referred to a PIIE study, which found that the share of state ownership in the market capitalization of China’s 100 largest companies rose from just over 31 percent to 50 percent between June 2021 and the end of 2023.

China has not yet learned one thing, said Stefan Kooths, Director of the IfW’s Business Cycles and Growth Research Center, in his article: “The more developed an economy becomes, the less interventionism works.” This is also true for the annual growth targets, according to Kooths. Xi also prioritizes social stability over economic development.

Kooths recommends that the government focus on direct transfer payments to the people rather than subsidies to state-owned companies. This would be more effective and not lead to trade conflicts. Even if many Chinese companies owe their competitiveness not only to Beijing’s subsidies, but also to their own innovative power, says Kooths. He warned that the West must focus on its strengths vis-à-vis China and stay true to its model instead of relying on increased intervention. ck

Elon Musk warns of EV competition

Tesla CEO Elon Musk expects Chinese EV manufacturers to “demolish” their global competitors if trade restrictions such as import tariffs are implemented. “If there are no trade barriers established, they will pretty much demolish most other car companies in the world,” he said on a post-earnings call with analysts on Wednesday. “They’re extremely good.”

Asked about Musk’s comments, the Chinese foreign ministry said at a regular briefing on Thursday that it was unaware of the reports but advocated “maintaining a fair, just and open business environment.”

US market leader Tesla is facing particular pressure from BYD. The Shenzhen-based company grew by 62 percent in 2023 and overtook Tesla in global sales of new energy vehicles (NEVs) for the first time in the fourth quarter. Plug-in hybrids are included in this figure. Tesla continues to lead the premium EV segment in China.

Due to strong competition and weakening demand in China, Tesla had already lowered its prices several times, most recently at the beginning of the year. In early 2023, the company had already fuelled a price war for electric cars, which Chinese manufacturers and VW – for example, with the ID.3 – also had to join. The price war reduces the profit margin and worries investors. Musk now warned during the conference call that Tesla was reaching “the natural limit of cost down” with its existing lineup. rtr/jul

Study: Restructuring a few companies could achieve the 1.5-degree target

A full decarbonization of the world’s 1,000 most CO2-intensive industrial plants could save around eight billion tonnes of CO2 a year. That is around a third of the reduction required to achieve the 1.5-degree target. This is the result of the “Global Carbon Restructuring Plan” study presented by management consultancy Roland Berger. The necessary transformation would require investments of between 7.5 and 10.5 trillion US dollars between 2025 and 2050, depending on the technology used. Renewable energies would be the cheapest option.

According to the study, over three-quarters (77 percent) of emissions come from electricity generation, 18 percent from the iron and steel sector, and 3.5 percent from the oil and gas industry. Only 40 companies are responsible for over half of the emissions. According to the report, this shows the huge climate action potential of concerted action to decarbonize these main emitters.

Most of these high-emission plants are located in China (54 percent) and India (13 percent), followed by the USA (10 percent) and Europe (3 percent). This is a problem because these locations would mean that China and India would be significantly more affected by decarbonization. They would need to spend between 18 and 30 percent of their gross domestic product on this, while the USA and Europe would only have to spend between two and five percent. bpo

British steel trader Stemcor could change hands again

According to a media report, British steel trader Stemcor could soon become the property of a Chinese company with state connections. Sky News reported, citing sources in the London city administration, that takeover negotiations are currently underway with a company close to the Guangzhou Aerotropolis local government.

City sources said that the takeover by Guangzhou Aerotropolis was triggered by a pledge of Stemcor shares. The ownership of Stemcor has changed repeatedly in recent years. Since July 2022, Stemcor has been owned by ShouYe Holdings, a Hong Kong-based company.

ShouYe had acquired the company from the Cedar Holdings Group. The Guangzhou-based group reportedly had difficulties repaying its debts. If the deal goes through, Guangzhou Aerotropolis would be the third Chinese company to own Stemcor in less than two years. Stemcor did not initially comment on the matter. ari

The Mianzi myth

All expats to be sent to China would almost surely be lectured by an intercultural communication coach about the concept of mianzi (面子), but the interpretations are not always correct.

The biggest myth is that you should be indirect when making a refusal or a negative comment to your Chinese colleague. This is wrong. It’s totally fine to be direct in closed-door meetings. Business is business; the Chinese are well aware of what that means. Just don’t say it when a third party is present. But that is the rule for almost everywhere.

Also, like in other parts of the world, it is advisable not to over-generalize or link a problem to the local or national character when discussing it. Comments such as “The Chinese way of doing this is wrong…” are a slap on a Chinese face, an egregious loss of face.

Mianzi as newly rich vanity

That said, mianzi today, however, is often about pomp. Those needing an example could simply compare videos from the luxury version of the G20 Summit in Hangzhou, China, in 2016 and the working conference-style version in Hamburg in the following year.

The Chinese showy way is an indication of not being confident. As China tries to receive what it sees as due respect from other countries, this kind of practice will continue for some time. For guests, it could occasionally be exhausting, but generally enjoyable. The real problem is that the Chinese expect reciprocity and comparable treatment when being hosted by the same foreigners. Otherwise, they would feel lightly treated or even humiliated.

This mentality manifests itself not only at the state level, but also at local levels. The rule of thumb is that the more developed and business-friendly a place is, the less vain the people are. But when unsure, go for the ostentatious option to be safe.

The art of shaking hands

When German Economy Minister Robert Habeck bowed while shaking hands with the Emir of Qatar, it was widely discussed in Germany. If a Chinese politician or businessman were to be caught bowing to a foreigner this way, the sensation would be far greater, as it would be perceived as a scandalous loss of mianzi.

Chinese excellencies and VIPs shake hands in a fundamentalist or minimalist way: Standing straight, one hand, saying greeting words, no extra moves. For the Chinese, a pat on the back while shaking hands is an overly intimate and almost patronizing move. A pat on the shoulder is definitely patronizing. Americans often commit this offense.

Holding glasses low and finger kowtow

The Chinese also have quite some manners that they would use among themselves. The country’s holiday season starts from Christmas and will last until the Chinese New Year, which falls on February 10 this year. There will also be parties and group dinners. Alcohol will flow; wine glasses, beer steins, and spirits (白酒 bái jiǔ) cups are clinked. It’ll be a bit helpful to know the following.

When doing the clinking, non-boss Chinese would commonly try to keep their glasses a bit lower to show deference. Occasionally, they will start a funny competition of who can go lower. When others pour drinks or tea for them, many would tap the table surface with the index and middle fingers. This is supposed to be a symbolic kowtow to express gratitude. These apply not only in the holiday season, but also in everyday social drinking and dining.

Be yourself and stay sober

However, as in most other places in the world, a nod or a thank-you will be enough when somebody serves you drinks. And you don’t need to join the glass-lowering game or do the finger kowtow. It will most likely make you look clumsy and even a bit obsequious. A smiling eye contact will do for glass-clinking.

So stay friendly and calm and be yourself. And this is particularly true when your Chinese hosts try to make you drink more alcohol than you could. Chinese still sometimes do it among themselves, especially in smaller cities and the countryside. It’s a ridiculous social phenomenon, a weird combination of hospitality, power play and fun-seeking.

In big cities, Chinese people usually won’t be so pushy to a foreign guest, but there is still a tiny chance in smaller cities. So stay vigilant, and when you have had enough, stop and tell your hosts politely but firmly.

And one last note before finishing: when buying flowers for a dinner visit to somebody’s home, stay away from chrysanthemums, especially white and yellow ones; they are only for funerals.

If you turn up your Bluetooth speaker too loud in public, you can also expect harsh comments in China. However, anyone complaining about the sounds from the “Ideology Power Bank” could face a very different kind of trouble. The combination of speaker and power bank allows the user to charge their smartphone while listening to Xi Jinping’s wisdom – more precisely, 72 essays based on his book series “Governing China, Volumes 1-4”. The gadget was conceived by the state newspaper Guangming Daily. According to the inventors, it is to be distributed to cadres throughout the country.

CHINA.TABLE EDITORIAL OFFICE

Amelie
Richter

Marcel
Grzanna

Fabian
Peltsch

Julia
Fiedler

Angela
Köckritz

Jörn
Petring

Feature

Anti-Houthi alliance: China abstains for political reasons

Houthi attacks hit China

China’s opportunities to participate

China’s reasons for not participating

Long and short-term gains

Symbol of China’s technological progress: The Fuxing will become even faster

400 km/h in everyday operation

The days of airplane traffic between Beijing and Shanghai are over

Events

News

Global China Conversations: Politics weaken growth potential

China’s interventionism is no longer effective

Elon Musk warns of EV competition

Study: Restructuring a few companies could achieve the 1.5-degree target

British steel trader Stemcor could change hands again

China Perspective

The Mianzi myth

Mianzi as newly rich vanity

The art of shaking hands

Holding glasses low and finger kowtow

Be yourself and stay sober

Executive Moves

Dessert

China.Table editorial team

CHINA.TABLE EDITORIAL OFFICE

Feature

Anti-Houthi alliance: China abstains for political reasons

Houthi attacks hit China

China’s opportunities to participate

China’s reasons for not participating

Long and short-term gains

Symbol of China’s technological progress: The Fuxing will become even faster

400 km/h in everyday operation

The days of airplane traffic between Beijing and Shanghai are over

Events

News

Global China Conversations: Politics weaken growth potential

China’s interventionism is no longer effective

Elon Musk warns of EV competition

Study: Restructuring a few companies could achieve the 1.5-degree target

British steel trader Stemcor could change hands again

China Perspective

The Mianzi myth

Mianzi as newly rich vanity

The art of shaking hands

Holding glasses low and finger kowtow

Be yourself and stay sober

Executive Moves

Dessert

China.Table editorial team

CHINA.TABLE EDITORIAL OFFICE

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