So far, China has been held back from reacting to the announced anti-dumping duties on Chinese EVs, which the USA will increase to 100 percent from August and which the EU will probably decide on in June.
Now, however, Beijing is making its first threats. And they are directed, above all, against the country that is the weakest link in this matter: Germany. A 25 percent import duty on gasoline-powered cars with larger engines – that would hit Porsche, Mercedes and BMW much harder than Stellantis or Renault. And China could be successful with this strategy. There are signs that the EU’s punitive tariffs on Chinese EV imports are coming, albeit so low that China’s electric car manufacturers can live with them. Thanks to the Germans.
China has not only created huge overcapacities in the EV segment, but also in the photovoltaic sector. However, the German solar industry is not the only one affected by the low prices from the Far East. Overcapacity is also leading to many Chinese companies going bankrupt. Nevertheless, the dominance of Chinese companies on the global markets will not change any time soon, writes Christiane Kuehl in her analysis.
Tariffs of 25 percent on cars with an engine displacement of more than 2.5 liters: China joins the global tariff arms race. Liu Bin’s proposal in an interview with the Communist Party-affiliated newspaper Global Times can be interpreted as a threat. After all, the chief expert at China’s state automotive research institute, the China Automotive Technology & Research Centre (CATARC), wields considerable influence over China’s automotive strategy. He advises the government on industry, subsidy and tax issues and has contributed to the development plan for the new energy vehicle industry (2021-2035).
In the interview, Liu Bin used environmental concerns as a pretext: The 250,000 large engine cars imported to China would cause above-average emissions and thus hinder the green transformation. However, he also referred to import restrictions on Chinese EVs, which he said “violate market economy principles and WTO rules.” The tariff threat is a response to the punitive tariffs of 100 percent on Chinese EVs in the US and possible EU anti-dumping tariffs. And it is designed to hit the country considered a shaky variable when it comes to EU tariffs: Germany.
The German Association of the Automotive Industry (VDA) is highly critical of the EU’s anti-subsidy proceedings. “An escalation of trade conflicts would affect the German automotive industry in particular,” the VDA wrote in response to a question from Table.Briefings. “German manufacturers export around 87,700 cars from the USA to China and around 216,300 cars from Germany to China.”
Numerous premium vehicles from Mercedes-Benz, Audi and BMW could fall under the new regulation. Although the companies operate plants in China, high-powered saloons or SUVs are usually imported and not produced in the People’s Republic. For example, the Mercedes-Benz S-Class, Audi A8 or BMW 7 Series. Cars from Porsche are even imported exclusively. “This is one of the reasons why the German government is so firmly opposed to protective tariffs on Chinese products,” says Beatrix Keim, Director of Business Development & China Projects at CAR, the Centre Automotive Research.
But not only German brands would be affected. “The regulation would, of course, also apply to Stellantis, with the Maserati and Ferrari brands as luxury vehicles that are popular in China,” says CAR expert Keim. “As well as for PSA with the DS.” Volvo’s high-powered models could also be affected, even though it is owned by the Chinese group Geely, says Keim. “The question is to what extent Volvo would be treated separately here, due to the ownership structure.”
The details of the possible measures are also important. “If tariffs are imposed on components such as engines, for example, this could also affect the supplier industry or joint ventures, which do not always achieve a local content ratio of 100 percent for all models.”
Currently, China’s car import tariffs are already at 15 percent. The 25 percent rule would mean an increase of 10 percentage points. However, cars with a purchase price of over 130,000 euros are already subject to a ten percent higher tax rate in China. Nevertheless, higher prices could reinforce the already cautious consumer behavior.
Due to the poor economic situation, Chinese consumers are cautious and the savings rate is exceptionally high. Although customers who buy luxury vehicles tend to be wealthy, tariffs could undoubtedly hurt sales if manufacturers pass the surcharge on to customers. If they do not, their margins will shrink.
Even if they are indirect, the threats from China are falling on fertile ground in Europe. After all, the automotive industry does not think much of the EU’s tariff plans – it fears retaliatory measures. In an interview with the news agency Reuters on Wednesday, Stellantis CEO Carlos Tavares called tariffs a “major trap.” He said they would not prevent Western car manufacturers from adapting to the Chinese competition, but would merely drive up inflation. At the Annual General Meeting on 15 April, BMW CEO Oliver Zipse said protectionism would set a spiral in motion: tariffs lead to new tariffs.
When asked by Table.Briefings, the German premium manufacturers declined to comment on the new tariff proposals from China, saying they did not want to participate in “speculation.” Meanwhile, the EU is unlikely to change course, even despite Germany’s insistence. As trade falls under the exclusive competence of the EU, the countries can only stop Brussels with a qualified majority, meaning that at least 55 percent of the member states, representing at least 65 percent of the European population, would have to demand this change. And that is not in sight.
The overcapacity in China’s cleantech sector is not only causing concern in the West – they are also a big problem for China. For example, the country’s photovoltaic industry could lose many companies due to the sharp price drop. In 2023, falling prices suddenly forced many companies to sell at production costs or below. This led to accusations of dumping, for example, from Brussels, and also ate into company finances.
Neither the record expansion of solar installations in China in 2023 (216.9 gigawatts) nor the dominance of their sector on the global markets helped many companies. The industry expects a wave of bankruptcies amongst the mostly privately owned solar companies. In response, the affected companies are “trying to differentiate themselves from competitors with either innovative products or exceptional prices,” writes Clean Energy expert Edurne Zoco from S&P Global Commodity Insight in an article for pv magazine. She expects thin or negative margins to make 2024 another challenging year for manufacturers.
With the global renewables boom, many companies have expanded far beyond the rapid market growth. They have now suspended capacities, cut jobs and put investment plans on hold in an attempt to survive the price war.
For example, one of the industry leaders, Longi Green Energy Technology, started laying off employees in November 2023, mainly factory workers and management trainees. In March, Bloomberg reported that Longi was planning to lay off up to 30 percent of its workforce, which once comprised 80,000 employees. Longi is even cutting back on small expenses. For example, employees in the Shanghai office will no longer receive free coffee. Such seemingly trivial things are usually a sign of a certain desperation.
In March, Lingda Group shelved plans for a solar cell factory worth 1.3 billion US dollars. Around the same time, Lingda announced that it had also stopped production at its existing factory to avoid losses following the collapse in solar cell prices. Solar cells account for 90 percent of the company’s revenue, which has made millions of yuan in yearly losses since 2020.
In 2023, solar companies still announced gigantic expansion plans. Beijing ordered the construction of solar and wind parks in the deserts of western China to achieve its climate targets. There is also a campaign to install solar cells on roofs in rural regions. And China generally subsidizes the manufacturing industry, for example, through preferential bank loans and even rewards for achieving certain quotas when building factories.
According to a report by the business magazine Caixin, vast amounts of investor capital also flowed into the sector during the boom: Between 2019 and 2022, photovoltaic companies received around 380 billion yuan (around 49 billion euros) from the capital markets, the magazine writes, citing data from the China Photovoltaic Industry Association (CPIA), for example through IPOs, private placements and convertible bonds.
This euphoria led to companies biting off more than they could chew, as market leader Jinko Solar shows. According to Caixin, Jinko informed investors in August 2023 that it would build the largest integrated solar power plant ever in Shanxi province for the equivalent of around 7.2 billion euros. Jinko backed up its plans with figures showing a fourfold profit increase for the first half of 2023. However, investors reacted with skepticism whether this plan was not too aggressive in light of an almost saturated market. The following day, Jinko shares dropped by twelve percent – a warning shot in the early days of the crisis. Around this time, Europe also started to experience dramatically falling prices of solar systems and modules.
In view of its own plight, the Chinese industry cannot understand the accusations and subsidy investigations from the EU. In an interview with Carbon Brief, CPIA Deputy Secretary General Liu Yiyang said the central government does not subsidize the solar market or the solar production sector. Liu said that there is only a tiny budget of R&D funds to support pilot testing or technological advancement in the global solar industry. “This is commonly practiced across the world.” Indeed, the time of high subsidies for the solar sector is over. Nevertheless, the EU Commission now wants to examine whether certain projects still receive subsidies.
Longi already publicly criticized the EU debate on punitive tariffs. Yet at the same time, in an interview with the business newspaper Shanghai Securities News on the sidelines of the National People’s Congress, Longi Chairman Zhong Baoshen called on the Beijing government to take measures against low prices and ensure the quality of solar modules. Beijing should introduce new tendering rules to prevent dumping, Zhong said. It is not known if anyone listened to him.
In any case, the dominance of Chinese companies in the global markets will not change any time soon. “The problem is that China has no choice but to get rid of its massive capacities on export markets,” comments expert Nis Grünberg from the Merics Institute in Berlin. The cleantech sector has become so large, and given the weakness of other sectors, its growth impetus is too important, Gruenberg told Table.Briefings. “It is also Beijing’s declared goal to develop this sector into a successful export industry.”
In the heart of Taiwan’s diverse alternative popular culture, so-called drag performances have gained popularity in recent years. Drag artists create a stage persona for which they slip into the role of another gender. Using extravagant outfits and plenty of make-up, they play with social perceptions of gender.
Behind the drag queen, Nymphia Wind, is 28-year-old Leo Tsao. His stage persona is also an expression of his own turbulent life story. Tsao was born in Los Angeles and grew up in Hong Kong and Taiwan. After graduating from school in Taipei, he moved to London to study fashion. This is where he first came into contact with drag art. Upon returning to Taiwan, he became one of the country’s most famous drag artists.
His character’s trademark are banana yellow outfits, an ironic allusion to Tsao’s background. In the US, Asian-Americans are sometimes jokingly referred to as “bananas,” in some cases with racist undertones: yellow on the outside, white on the inside. Tsao plays with the cliché and uses the color banana yellow to express pride in his intercultural identity.
Leo Tsao now lives in New York, a bastion of queer subculture. But his artistic home is Café Dalida in Taipei, one of the birthplaces of the Taiwanese drag scene. In April this year, hundreds of fans regularly gathered there and in other gay bars and clubs in Taipei to see Nymphia Wind perform at RuPaul’s Drag Race, an international competition of drag artists. Dressed in banana yellow, many of them nicknamed themselves “banana believers.”
Nymphia Wind was the first East Asian artist to win a season of RuPaul’s Drag Race. “Taiwan, this is for you,” she said after her victory. Tsai Ing-wen congratulated her and added, “Taiwan thanks you for living fearlessly.”
Her flamboyant style and the way she plays with gender roles also symbolize Taiwan’s society’s increasing diversity and openness. In contrast, the Chinese leadership under Xi Jinping suppresses the LGBTQ scene in the country and condemns “unmanly” forms of expression in popular culture, such as what it sees as the overly soft appearance of pop idols. Nevertheless, some Chinese drag fans congratulated Nymphia Wind on her victory on the internet.
In an interview after the drag competition, Nymphia Wind also discussed Taiwan’s international political isolation and wished for political recognition for her country. Through her fame, she has become an important cultural ambassador for Taiwan.
This summer, she will have an opportunity to promote Taiwan to the world. Nymphia Wind will perform as a Taiwanese artist at the Paris Cultural Olympiad, an artistic event accompanying the Summer Olympics. Taiwan’s marginalized position in the international community is regularly evident in sports. Like almost all major international sporting events, the country can only participate in the competitions in Paris under the name “Chinese Taipei.” However, the accompanying program seems exempt from this – at the Cultural Olympiad, Nymphia Wind will officially perform in the Taiwan Pavilion.
Donald Duck is celebrating his 90th birthday – even in this shopping mall in Shanghai. Tang Laoya 唐老鸭 – as Donald is called in China – has admittedly not been known here for that long. In 1986, the first episodes with the hot-tempered duck appeared on Chinese state television CCTV – it was an instant hit. Today, Donald has the biggest fan community in the People’s Republic.
So far, China has been held back from reacting to the announced anti-dumping duties on Chinese EVs, which the USA will increase to 100 percent from August and which the EU will probably decide on in June.
Now, however, Beijing is making its first threats. And they are directed, above all, against the country that is the weakest link in this matter: Germany. A 25 percent import duty on gasoline-powered cars with larger engines – that would hit Porsche, Mercedes and BMW much harder than Stellantis or Renault. And China could be successful with this strategy. There are signs that the EU’s punitive tariffs on Chinese EV imports are coming, albeit so low that China’s electric car manufacturers can live with them. Thanks to the Germans.
China has not only created huge overcapacities in the EV segment, but also in the photovoltaic sector. However, the German solar industry is not the only one affected by the low prices from the Far East. Overcapacity is also leading to many Chinese companies going bankrupt. Nevertheless, the dominance of Chinese companies on the global markets will not change any time soon, writes Christiane Kuehl in her analysis.
Tariffs of 25 percent on cars with an engine displacement of more than 2.5 liters: China joins the global tariff arms race. Liu Bin’s proposal in an interview with the Communist Party-affiliated newspaper Global Times can be interpreted as a threat. After all, the chief expert at China’s state automotive research institute, the China Automotive Technology & Research Centre (CATARC), wields considerable influence over China’s automotive strategy. He advises the government on industry, subsidy and tax issues and has contributed to the development plan for the new energy vehicle industry (2021-2035).
In the interview, Liu Bin used environmental concerns as a pretext: The 250,000 large engine cars imported to China would cause above-average emissions and thus hinder the green transformation. However, he also referred to import restrictions on Chinese EVs, which he said “violate market economy principles and WTO rules.” The tariff threat is a response to the punitive tariffs of 100 percent on Chinese EVs in the US and possible EU anti-dumping tariffs. And it is designed to hit the country considered a shaky variable when it comes to EU tariffs: Germany.
The German Association of the Automotive Industry (VDA) is highly critical of the EU’s anti-subsidy proceedings. “An escalation of trade conflicts would affect the German automotive industry in particular,” the VDA wrote in response to a question from Table.Briefings. “German manufacturers export around 87,700 cars from the USA to China and around 216,300 cars from Germany to China.”
Numerous premium vehicles from Mercedes-Benz, Audi and BMW could fall under the new regulation. Although the companies operate plants in China, high-powered saloons or SUVs are usually imported and not produced in the People’s Republic. For example, the Mercedes-Benz S-Class, Audi A8 or BMW 7 Series. Cars from Porsche are even imported exclusively. “This is one of the reasons why the German government is so firmly opposed to protective tariffs on Chinese products,” says Beatrix Keim, Director of Business Development & China Projects at CAR, the Centre Automotive Research.
But not only German brands would be affected. “The regulation would, of course, also apply to Stellantis, with the Maserati and Ferrari brands as luxury vehicles that are popular in China,” says CAR expert Keim. “As well as for PSA with the DS.” Volvo’s high-powered models could also be affected, even though it is owned by the Chinese group Geely, says Keim. “The question is to what extent Volvo would be treated separately here, due to the ownership structure.”
The details of the possible measures are also important. “If tariffs are imposed on components such as engines, for example, this could also affect the supplier industry or joint ventures, which do not always achieve a local content ratio of 100 percent for all models.”
Currently, China’s car import tariffs are already at 15 percent. The 25 percent rule would mean an increase of 10 percentage points. However, cars with a purchase price of over 130,000 euros are already subject to a ten percent higher tax rate in China. Nevertheless, higher prices could reinforce the already cautious consumer behavior.
Due to the poor economic situation, Chinese consumers are cautious and the savings rate is exceptionally high. Although customers who buy luxury vehicles tend to be wealthy, tariffs could undoubtedly hurt sales if manufacturers pass the surcharge on to customers. If they do not, their margins will shrink.
Even if they are indirect, the threats from China are falling on fertile ground in Europe. After all, the automotive industry does not think much of the EU’s tariff plans – it fears retaliatory measures. In an interview with the news agency Reuters on Wednesday, Stellantis CEO Carlos Tavares called tariffs a “major trap.” He said they would not prevent Western car manufacturers from adapting to the Chinese competition, but would merely drive up inflation. At the Annual General Meeting on 15 April, BMW CEO Oliver Zipse said protectionism would set a spiral in motion: tariffs lead to new tariffs.
When asked by Table.Briefings, the German premium manufacturers declined to comment on the new tariff proposals from China, saying they did not want to participate in “speculation.” Meanwhile, the EU is unlikely to change course, even despite Germany’s insistence. As trade falls under the exclusive competence of the EU, the countries can only stop Brussels with a qualified majority, meaning that at least 55 percent of the member states, representing at least 65 percent of the European population, would have to demand this change. And that is not in sight.
The overcapacity in China’s cleantech sector is not only causing concern in the West – they are also a big problem for China. For example, the country’s photovoltaic industry could lose many companies due to the sharp price drop. In 2023, falling prices suddenly forced many companies to sell at production costs or below. This led to accusations of dumping, for example, from Brussels, and also ate into company finances.
Neither the record expansion of solar installations in China in 2023 (216.9 gigawatts) nor the dominance of their sector on the global markets helped many companies. The industry expects a wave of bankruptcies amongst the mostly privately owned solar companies. In response, the affected companies are “trying to differentiate themselves from competitors with either innovative products or exceptional prices,” writes Clean Energy expert Edurne Zoco from S&P Global Commodity Insight in an article for pv magazine. She expects thin or negative margins to make 2024 another challenging year for manufacturers.
With the global renewables boom, many companies have expanded far beyond the rapid market growth. They have now suspended capacities, cut jobs and put investment plans on hold in an attempt to survive the price war.
For example, one of the industry leaders, Longi Green Energy Technology, started laying off employees in November 2023, mainly factory workers and management trainees. In March, Bloomberg reported that Longi was planning to lay off up to 30 percent of its workforce, which once comprised 80,000 employees. Longi is even cutting back on small expenses. For example, employees in the Shanghai office will no longer receive free coffee. Such seemingly trivial things are usually a sign of a certain desperation.
In March, Lingda Group shelved plans for a solar cell factory worth 1.3 billion US dollars. Around the same time, Lingda announced that it had also stopped production at its existing factory to avoid losses following the collapse in solar cell prices. Solar cells account for 90 percent of the company’s revenue, which has made millions of yuan in yearly losses since 2020.
In 2023, solar companies still announced gigantic expansion plans. Beijing ordered the construction of solar and wind parks in the deserts of western China to achieve its climate targets. There is also a campaign to install solar cells on roofs in rural regions. And China generally subsidizes the manufacturing industry, for example, through preferential bank loans and even rewards for achieving certain quotas when building factories.
According to a report by the business magazine Caixin, vast amounts of investor capital also flowed into the sector during the boom: Between 2019 and 2022, photovoltaic companies received around 380 billion yuan (around 49 billion euros) from the capital markets, the magazine writes, citing data from the China Photovoltaic Industry Association (CPIA), for example through IPOs, private placements and convertible bonds.
This euphoria led to companies biting off more than they could chew, as market leader Jinko Solar shows. According to Caixin, Jinko informed investors in August 2023 that it would build the largest integrated solar power plant ever in Shanxi province for the equivalent of around 7.2 billion euros. Jinko backed up its plans with figures showing a fourfold profit increase for the first half of 2023. However, investors reacted with skepticism whether this plan was not too aggressive in light of an almost saturated market. The following day, Jinko shares dropped by twelve percent – a warning shot in the early days of the crisis. Around this time, Europe also started to experience dramatically falling prices of solar systems and modules.
In view of its own plight, the Chinese industry cannot understand the accusations and subsidy investigations from the EU. In an interview with Carbon Brief, CPIA Deputy Secretary General Liu Yiyang said the central government does not subsidize the solar market or the solar production sector. Liu said that there is only a tiny budget of R&D funds to support pilot testing or technological advancement in the global solar industry. “This is commonly practiced across the world.” Indeed, the time of high subsidies for the solar sector is over. Nevertheless, the EU Commission now wants to examine whether certain projects still receive subsidies.
Longi already publicly criticized the EU debate on punitive tariffs. Yet at the same time, in an interview with the business newspaper Shanghai Securities News on the sidelines of the National People’s Congress, Longi Chairman Zhong Baoshen called on the Beijing government to take measures against low prices and ensure the quality of solar modules. Beijing should introduce new tendering rules to prevent dumping, Zhong said. It is not known if anyone listened to him.
In any case, the dominance of Chinese companies in the global markets will not change any time soon. “The problem is that China has no choice but to get rid of its massive capacities on export markets,” comments expert Nis Grünberg from the Merics Institute in Berlin. The cleantech sector has become so large, and given the weakness of other sectors, its growth impetus is too important, Gruenberg told Table.Briefings. “It is also Beijing’s declared goal to develop this sector into a successful export industry.”
In the heart of Taiwan’s diverse alternative popular culture, so-called drag performances have gained popularity in recent years. Drag artists create a stage persona for which they slip into the role of another gender. Using extravagant outfits and plenty of make-up, they play with social perceptions of gender.
Behind the drag queen, Nymphia Wind, is 28-year-old Leo Tsao. His stage persona is also an expression of his own turbulent life story. Tsao was born in Los Angeles and grew up in Hong Kong and Taiwan. After graduating from school in Taipei, he moved to London to study fashion. This is where he first came into contact with drag art. Upon returning to Taiwan, he became one of the country’s most famous drag artists.
His character’s trademark are banana yellow outfits, an ironic allusion to Tsao’s background. In the US, Asian-Americans are sometimes jokingly referred to as “bananas,” in some cases with racist undertones: yellow on the outside, white on the inside. Tsao plays with the cliché and uses the color banana yellow to express pride in his intercultural identity.
Leo Tsao now lives in New York, a bastion of queer subculture. But his artistic home is Café Dalida in Taipei, one of the birthplaces of the Taiwanese drag scene. In April this year, hundreds of fans regularly gathered there and in other gay bars and clubs in Taipei to see Nymphia Wind perform at RuPaul’s Drag Race, an international competition of drag artists. Dressed in banana yellow, many of them nicknamed themselves “banana believers.”
Nymphia Wind was the first East Asian artist to win a season of RuPaul’s Drag Race. “Taiwan, this is for you,” she said after her victory. Tsai Ing-wen congratulated her and added, “Taiwan thanks you for living fearlessly.”
Her flamboyant style and the way she plays with gender roles also symbolize Taiwan’s society’s increasing diversity and openness. In contrast, the Chinese leadership under Xi Jinping suppresses the LGBTQ scene in the country and condemns “unmanly” forms of expression in popular culture, such as what it sees as the overly soft appearance of pop idols. Nevertheless, some Chinese drag fans congratulated Nymphia Wind on her victory on the internet.
In an interview after the drag competition, Nymphia Wind also discussed Taiwan’s international political isolation and wished for political recognition for her country. Through her fame, she has become an important cultural ambassador for Taiwan.
This summer, she will have an opportunity to promote Taiwan to the world. Nymphia Wind will perform as a Taiwanese artist at the Paris Cultural Olympiad, an artistic event accompanying the Summer Olympics. Taiwan’s marginalized position in the international community is regularly evident in sports. Like almost all major international sporting events, the country can only participate in the competitions in Paris under the name “Chinese Taipei.” However, the accompanying program seems exempt from this – at the Cultural Olympiad, Nymphia Wind will officially perform in the Taiwan Pavilion.
Donald Duck is celebrating his 90th birthday – even in this shopping mall in Shanghai. Tang Laoya 唐老鸭 – as Donald is called in China – has admittedly not been known here for that long. In 1986, the first episodes with the hot-tempered duck appeared on Chinese state television CCTV – it was an instant hit. Today, Donald has the biggest fan community in the People’s Republic.
