Table.Briefing: China

BRICS meeting + Baerbock + Central Asia

Dear reader,

At the BRICS summit in South Africa, China is underscoring its expected claims of leadership over the Global South. Xi is pushing to swiftly add new countries to the BRICS family. He aims for the rapid utilization of the new development bank of the BRICS group as an alternative to the IMF and World Bank, as well as the joint utilization of AI and satellite data.

All of this is strategic. As the largest economy and leading technological power within the alliance, China can rapidly expand its influence, outpace competitors like India and Brazil, and swiftly render newly joining countries dependent on it.

The plan might succeed. What becomes particularly evident in Johannesburg is the strong desire of BRICS countries for greater independence from Western dominance.

Foreign Minister Baerbock also experienced this, as her South African counterpart dismissed her criticism of South Africa’s stance towards Russia with a brusque comment.

To win over these countries for future cooperation, thoughtful diplomacy on an equal footing is necessary, as Stefan Braun writes. Whether Baerbock can meld her sometimes assertive, values-based and feminist political style with more considerate and empathetic willingness to compromise must be revealed in the second half of her term.

For a long time, Central Asia was within Russia’s sphere of influence. Many in leadership roles spoke Russian and exhibited loyalty to Moscow. However, China has been steadily filling the void left by a weakened Russia due to the collapse of the Soviet Union and, more recently, the consequences of the Ukraine conflict.

Especially in the energy sector, Beijing is becoming indispensable through significant investments, as noted by Amelie Richter, who recently visited one of the five “Stans” of the Silk Road – Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan.

We should pay more attention to the region, she emphasizes upon her return from Kyrgyzstan. After all, even for European resource and energy security, Central Asia is becoming increasingly attractive after distancing itself from Russia.

Your
Fabian Peltsch
Image of Fabian  Peltsch

Feature

BRICS agree on admission of new members

Advocates of the Global South: Luiz Inácio Lula da Silva, Xi Jinping, Cyril Ramaphosa, Narendra Modi, Sergey Lavrov.

The great reformer Deng Xiaoping once advocated restraint in foreign policy for his country as a maxim. Under the current Chinese state and party leader Xi Jinping, this is no longer evident. His statements and demands reveal an undisguised pursuit of a leadership role in the Global South.

Unlike any of the three heads of state present at the BRICS summit in Johannesburg, Xi Jinping also, as expected, pushed for rapid expansion. The process of admitting more states to the “BRICS family” should be accelerated, Xi demanded on Wednesday.

Frame for expansion laid out

The other members heeded his request and simultaneously slowed him down. On the same day, the five members adopted a document outlining the approach to expanding the group. This was stated by South African Foreign Minister Naledi Pandor. However, on Wednesday, that was as far as it went. Details of the expansion mechanism would only be revealed to the public at the end of the summit on Thursday, according to Pandor.

The BRICS community will continue to grow “and contribute to peace and development in the world”. International standards should be written and maintained by all countries based on the goals and principles of the UN Charter “instead of being dictated by those with the strongest muscles and the loudest voice,” Xi vaguely expressed.

An expansion benefiting China

What may sound like the words of a peacemaker also reveal Xi’s ambition to create a world order centered around China. According to the South African government, more than 40 countries want to join BRICS, and more than 20 countries have already formally applied for membership. The most important candidates for membership are:

  • Saudi Arabia
  • Indonesia
  • Argentina
  • Mexico
  • Iran
  • United Arab Emirates
  • Algeria
  • Venezuela
  • Bangladesh

While China is pushing for speed, Brazil, India and South Africa are slowing down progress. Their leaders know that if BRICS is expanded quickly to include such countries, their significance in this bloc will decrease. China, as the overwhelmingly most powerful economy, could gain weight. Brazilian President Luiz Inácio Lula da Silva had already emphasized at the start on Tuesday that the BRICS group should not become a counterweight “to the G7, G20, or the United States”.

Consensus: weakening the dollar

On the second day of the summit on Wednesday, there was much more unity on the question of weakening the significance of the US dollar as the existing world currency. They discussed the use of local currencies to facilitate mutual trade and investment, confirmed South African President Cyril Ramaphosa, host of the BRICS summit.

Lula even advocated for a common BRICS currency. This could be used for trade and investment. This could increase payment options between BRICS members and reduce their vulnerability to exchange rate fluctuations. Xi promoted the rapid use of the new development bank of the BRICS group as an alternative to the existing development banks IMF and World Bank.

China pushes for a leadership role

Furthermore, the shared use of satellite data and joint development in artificial intelligence is also conceivable, according to Xi. The intention here is also quite clear: the BRICS development bank is already based in Shanghai. The Chinese are leading in satellite and AI research. Both would make the existing and possibly joining BRICS countries even more dependent on China.

Xi doesn’t see political differences between China’s autocracy and democracies like India or Brazil as a problem. He called for enhancing cultural exchange but avoiding “ideological and institutional confrontations”.

Bizarre scenes around the president

On Wednesday, however, it wasn’t these content matters that dominated discussions but astonishing organizational inconsistencies. Security personnel pushed Xi’s top advisers aside at a door in a football-style manner, separating them from the president. Xi appeared puzzled and turned to his officials, but at the same time tried to appear statesmanlike and unfazed. Then, he stood somewhat lost alone on the red carpet.

Shortly after the start of the summit on Tuesday, Xi caused a stir. He surprisingly did not appear at the BRICS Business Forum, where he was supposed to speak like the other BRICS chiefs. Although there was a speech by the Chinese state and party leader, unlike the program, it was delivered without further explanation by Chinese Minister of Commerce Wang Wentao.

Wang must represent Xi – Xinhua ignores it

The fact that the speech once again attacked the US as a hegemonic power no longer interested anyone. Among China watchers, wild speculation immediately began. “Xi Jinping fails to show up at the BRICS Business Forum. Something is amiss?” Bonnie Glaser from the German Marshall Fund asked on the social network X (formerly Twitter). “To say that this is extraordinary is an understatement because the Chinese leadership never misses highly choreographed events like this,” wrote the China Global South Project.

China clumsily contributed to the story escalating further. Instead of providing an explanation for Xi’s absence, Chinese state media created the impression that the president had indeed spoken. Even Hua Chunying, spokeswoman for the Beijing Ministry of Foreign Affairs, quoted Xi Jinping’s speech on Twitter on Tuesday.

Propaganda takes the farce to the extreme

The appearance of her colleague Wang Wenbin at the ministry’s daily press conference on Wednesday seemed almost eerie. Although Xi’s absence had long since become known worldwide by this time, the spokesperson continued to insist that Xi had delivered the speech.

Xi was seen at dinner on Tuesday evening. And on Wednesday, everything went according to plan. At least it seems clear that he was not seriously ill. However, as usual, Beijing is likely to keep what really happened a secret.

Climate hardly plays a role

Given the issue of expansion and the mishaps around Xi, the absence of a global top issue hardly stood out. Climate action is on the official agenda at the meeting but was barely discussed. Although China and India suffered from heatwaves and heavy rainfall, forest fires in Siberia got out of control, and Brazil expects an “eccentric winter” with extreme rain.

The host country, South Africa, is focusing its climate efforts at this summit on the transition to a post-fossil economy. However, the “Just Energy Transition Partnership” (JETP) mentioned in this context is a project that Pretoria has launched not with the BRICS countries but with the countries of the Global North.

In general, the familiar questions about climate policy will be debated at the summit:

  • Climate financing by industrialized countries: Failure to meet the promised 100 billion dollars in 2020.
  • Climate justice: Industrialized countries must act first and more than poor countries.
  • Rejection of climate action tariffs such as CBAM.

Urgent calls for emission reduction, expansion of renewables, or even phasing out fossil fuels have not yet appeared in the BRICS demands. Felix Lee/Finn Mayer-Kuckuk/Jörn Petring/Bernhard Poetter

  • Geopolitics
  • Xi Jinping

China courting Central Asia with energy

Xi and the “Stans” states at the China-Central Asia Summit in May (left to right): Kassym-Jomart Tokayev of Kazakhstan, Kyrgyzstan’s President Sadyr Japarov, Uzbekistan’s President Shavkat Mirziyoyev and Emomali Rahmon of Tajikistan. Turkmenistan’s President Serdar Berdimuhamedow is obscured.

At the first China-Central Asia Summit in May in Xi’an, China’s President Xi sat prominently in front of an array of flags. With the flags of China, Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan and Uzbekistan behind him, Xi described the necessity of “renewing our millennium-old friendship and opening up new perspectives for the future”. The timing was opportune. Until recently, Russia had been the unrivaled power in the region. However, with the massive northern neighbor apparently weakened due to the war with Ukraine, the five Central Asian countries are now experiencing a power vacuum that China aims to gradually fill.

The connectivity fostered by the Silk Road (“Belt & Road” Initiative, or BRI) is now gaining momentum. For about a decade, China has been increasingly overshadowing Russia both as the main trading partner and the primary source of foreign investment in Central Asia, explains Jeffrey Mankoff, a senior fellow with the Russia and Eurasia Program at the Center for Strategic and International Studies (CSIS). This trend has intensified since the start of Russia’s war against Ukraine, says Mankoff. “Russian influence has taken a hit, and it’s a blow from which it probably won’t recover.”

No longer a focus on Russia

For China, a weakened Russia offers unexpected opportunities in the region. Until recently, many Central Asian leaders spoke Russian and were educated within a system where Russia was considered the center of the universe, according to Mankoff. The population in Central Asian states is culturally and linguistically connected to Moscow. However, this is different for the younger generation of leadership. There is no longer a focus on Russia and firm loyalty to Moscow, according to Mankoff.

This is also evident in UN Security Council sessions: The five Central Asian countries abstained from voting on Russia’s invasion of Ukraine – a blow to Russia, which had hoped for support from the former Soviet states. Yet, for Western countries, abstention was not enough; they had wished for a clear “no,” which is nearly utopian given the geographical position of the five states. Wedged between Russia and China, this decision is only logical.

Central Asia has also become more attractive for European resource and energy security, offering an alternative corridor to the northern transit routes through Russia. Most goods subjected to an EU trade boycott still make their way into Russian stores, primarily through Kazakhstan.

Energy security as a key issue

However, China had already turned its attention to Central Asia before the war and recognized the region’s need: energy. Particularly Kazakhstan and Uzbekistan struggled with an extended cold spell last winter, resulting in power shortages, gas rationing, and disruptions in household heating. The crisis was further exacerbated by export cuts from Turkmenistan to Uzbekistan in January due to “technical issues that also affected Turkmen gas deliveries to China.”

Winter energy supply problems are not unprecedented in the region. However, it’s remarkable that Uzbekistan and Kazakhstan were unable to meet peak demand. Both countries are significant gas producers and net exporters of natural gas. Together, they officially supplied about eleven billion cubic meters of natural gas to China in 2021, equivalent to a fifth of China’s pipeline gas imports in that year.

Despite its vast natural gas reserves, Kazakhstan struggles to maintain a surplus due to growing domestic demand. Uzbekistan’s gas production, on the other hand, is in a phase of final decline, with a remaining lifespan of less than 18 years and no prospects for significant new discoveries. Therefore, a role reversal could occur eventually: China may transition from being an importer to a supplier.

Construction projects for water plants and photovoltaics

Even in Kyrgyzstan’s capital, Bishkek, people shivered last winter. In early August, amid a hot summer with temperatures reaching 40 degrees Celsius and with a looming frigid winter, a decree signed by President Sadyr Japarov came into effect, declaring an energy emergency for three years.

Now, China steps in for long-term assistance. Just a few days before the state of emergency was declared, Kyrgyz authorities signed a memorandum of understanding and an investment agreement with a consortium of Chinese companies to build four hydropower plants on the Naryn River. The construction costs are estimated to be up to three billion US dollars.

China is also collaborating with other Central Asian countries in the energy supply sector. During a state visit of Kazakhstan’s President Kassym-Jomart Tokayev to China, an expansion of energy cooperation was announced.

BRI summit in autumn

According to Zhu Hexin, chairman of state-owned financier CITIC, trade documents worth more than 1.6 billion US dollars were signed with Kazakh partners for the implementation of projects in the energy and petrochemical industries. In Uzbekistan, the government is working with China to build photovoltaic plants in the Kashkadarya and Bukhara regions with a total capacity of 1000 MW.

In October of this year, Xi will host the BRI Summit in China. An exact date has not been set. According to media reports, Russian President Vladimir Putin is also expected to attend the summit. Xi will likely not hesitate to underline who will be the dominant partner for the Central Asian states in the future.

News

Competition increases for German machinery manufacturers

In the competition for market share outside the EU, the position of German machinery manufacturers is increasingly weakened by competition from China. This is revealed by a survey conducted by the Ifo Institute for Economic Research, which was published on Wednesday. According to the survey, the competitive position score dropped to its lowest level since the survey began in July 1994 – specifically to minus 14.3 points, down from minus 7.3 points in April. The last time the indicator fell to a similarly low level was during the financial crisis in January 2009. In the EU markets, the competitive position now stands at minus 8.5 points, and in the German domestic market, it’s at minus 4.1 points.

“Skilled labor shortages are a particular challenge for the machinery industry in Germany, which is heavily characterized by medium-sized enterprises,” said Ifo industry expert Nicolas Bunde. This, along with a scarcity of important raw materials, often limits production in the machinery sector, as indicated by about 40 percent of surveyed companies. In production, there are many older employees, while the younger generation is often not willing to work in shift operations. Additionally, machinery manufacturers are located in rural areas. According to Ifo, these companies need to become even more attractive as employers in order to attract suitable personnel from major cities. Moreover, the increased energy and raw material costs can rarely be passed on to the selling price. rtr/fpe

  • Mechanical Engineering
  • Middle class
  • Technology

German government takes on fewer investment guarantees for China

The German government is assuming fewer investment guarantees for China than in the previous year. According to the response from the Federal Ministry for Economics to an inquiry from Left Party economic politician Christian Leye, which the Reuters news agency has obtained, investment guarantees totaling 51.9 million euros have been taken over until Aug. 14. For comparison: In the entire year 2022, it was still 745.9 million euros, and in 2021, it was even 1.9 billion euros.

Since the tightened new regulation of coverage conditions in November of last year, according to the ministry, companies have submitted eleven new applications for state insurance of projects in China. Of these, only four have been positively approved with small sums and three have been rejected. According to the response to the inquiry, decisions on four projects are still pending. The federal government also emphasizes in its China strategy that it wants to reduce the risks in its business with China.

Now, the new assessment of the applications is also having an impact: “In addition to an individual examination of the individual project, the risk concentration in the portfolio is now more closely scrutinized at the level of a country as well as at the level of a corporate group,” writes State Secretary for Economic Affairs Udo Philipp in the 24-page document. The federal government wants to reduce the risk of multiple projects failing simultaneously and leading to large commitments for the federal budget all at once.

Companies pay fees for the government’s investment guarantee, and the federal government is liable in the event of a default. However, the government admits that there hasn’t been a single case of guarantee payment in China-related business in the past ten years. Nevertheless, there are concerns within the government that events like a Chinese attack on Taiwan could heavily strain economic relations with Germany’s largest trading partner.

At the same time, the Ministry for Economics had limited the maximum amount for taking over investment guarantees to 3 billion euros per company and country. However, this doesn’t seem to have any impact: In the past ten years, not a single investment guarantee with a higher volume has been registered. Companies can also invest in China without applying for state insurance. rtr/ari

  • Economic policy
  • Investments
  • Trade

USA: Tariffs on Chinese solar modules being circumvented

Solar companies in Southeast Asia are circumventing US tariff regulations on Chinese solar panels. This is the result of an investigation by the US Department of Commerce. According to the investigation, five companies in Cambodia, Malaysia, Thailand, and Vietnam, either of Chinese origin or with connections to China, are bypassing tariff regulations. Starting from April 2024, products from these manufacturers could be subject to US tariffs of up to 254 percent. The USA had already decided on tariffs on Chinese solar products in 2022. However, there was a two-year transition period to allow US companies to explore alternative suppliers, as reported by Bloomberg.

The USA imports over 75 percent of its solar modules from Vietnam, Cambodia, Malaysia and Thailand. All other manufacturers in these countries must also prove that they are not circumventing the import tariffs on Chinese modules. Specifically, this means that certain components of the solar modules must be manufactured outside of China. Project developers in the USA criticize this decision, as it leads to higher costs for solar modules. American producers, on the other hand, support the tariffs.

The background for these tariffs is Chinese subsidies and unfair pricing. The USA has also taken measures to exclude forced Uyghur labor from the solar supply chain. Chinese solar companies are establishing a second supply chain that is supposed to be free from forced labor and are also investing in production facilities in neighboring states. nib

  • Climate
  • Solar
  • USA

Heads

Kwon Pyong – fleeing to South Korea by jet ski

Geflohener Dissident Kwon Pyong
An undated selfie of fleeing dissident Kwon Pyong.

The escape of 35-year-old Kwon Pyong by jet ski from China to South Korea has a long history. The North Chinese man with Korean roots from the Jilin province had spent over a decade advocating for civil rights in his homeland and regularly protested against the political rule of Party leader Xi Jinping. His activism led to his imprisonment for a year and a half at the end of 2016 on charges of “undermining state power and insulting the socialist system”.

According to media reports, his conviction in February 2017 by the intermediate people’s court in Yanbian was based on around 80 comments posted on social networks like Twitter and Facebook. There, he criticized China’s harsh approach towards lawyers in the country, as well as the Tiananmen Massacre and the human rights situation in Tibet.

Expressing criticism using his real name on social media

In 2012, Pyong briefly studied at Iowa State University in the USA before returning to Jilin. In 2014, he traveled to Hong Kong to participate in the “Occupy Hong Kong” umbrella movement, which demanded democratic elections in the region. Shortly before his arrest, he used his real name and the handle “BraveJohnny” on Twitter to express the desire for Hong Kong independence.

A month earlier, Pyong had posted a photo on Twitter wearing a T-shirt that compared China’s Party leader Xi Jinping to Hitler (#Xitler). He then insulted Xi in Chinese characters as “Xi Baozi” (steamed bun) and “Big Spender”. He told a friend at the time that he planned to wear the T-shirt on National Day (Oct. 1) while taking to the streets, which he had apparently done before. He had already drawn police attention for sending postcards to human rights lawyers imprisoned in China.

300 km from Shandong to Incheon

A few days before the trial began, Pyong’s parents dismissed his lawyers for no apparent reason and prevented them from appearing in court. Human rights organizations suspect that Chinese authorities pressured Pyong’s parents to prevent any effective legal assistance for their son. His mother asked foreign media and local supporters not to contact her anymore. The trial against Pyong took place behind closed doors.

Why Pyong fled to South Korea on a jet ski, covering around 300 kilometers across the Yellow Sea from Shandong, remains unclear. He is said to have towed five barrels of gasoline with the jet ski to avoid getting stranded at sea. The Korean Coast Guard eventually arrested him for illegal entry.

Dissidents who have fallen out of favor in China are usually subjected to exit bans. They are often deprived of their citizenship rights and closely monitored by Chinese authorities for years. State security and police regularly visit dissidents to warn them against further activism or contact with foreign media.

China seeks extradition of dissidents

Other dissidents report being denied any opportunity to reintegrate into society, even after serving their prison sentences. They are not allowed to enter regular employment to earn a living, nor are they allowed to change their place of residence. Landlords are warned against providing new accommodation to those affected.

Kwon, whose Chinese name is Qian Ping, has reportedly applied for political asylum, according to Korean media reports. The human rights organization “Lawyers for Public Interest Rights” has taken up his case. It is said that he will seek asylum in another country if Korean authorities reject his application.

Meanwhile, China is trying to persuade neighboring Asian countries to extradite fleeing dissidents. Recently, human rights lawyer Lu Siwei was arrested in Laos while in transit to Thailand on his way to the USA. His current status remains unclear. Marcel Grzanna

  • Regenschirm-Bewegung

Executive Moves

Teodoro Locsin Jr. becomes the Philippines’ special envoy to China. He is to mediate between the two countries in the dispute over islands in the South China Sea.

Qin Lu is the new head of Greater China at consulting firm Aon. Qin was previously co-head of China and CEO of Reinsurance Solutions for Greater China at Aon. Prior to that, he spent 19 years at Swiss Re.

Is something changing in your organization? Let us know at heads@table.media!

Dessert

This little pup in his current form isn’t a newcomer to the planet – he’s a clone, as declared on his chest harness: “我是克隆狗” (I am a cloned dog). He was showcased alongside other pets at the Pet Asia Show in Shanghai last week. The company Beijing Sinogu Biotechnology offers this service. Dog owners can purchase a replica of their deceased dog there, with prices starting at around 50,000 dollars.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    At the BRICS summit in South Africa, China is underscoring its expected claims of leadership over the Global South. Xi is pushing to swiftly add new countries to the BRICS family. He aims for the rapid utilization of the new development bank of the BRICS group as an alternative to the IMF and World Bank, as well as the joint utilization of AI and satellite data.

    All of this is strategic. As the largest economy and leading technological power within the alliance, China can rapidly expand its influence, outpace competitors like India and Brazil, and swiftly render newly joining countries dependent on it.

    The plan might succeed. What becomes particularly evident in Johannesburg is the strong desire of BRICS countries for greater independence from Western dominance.

    Foreign Minister Baerbock also experienced this, as her South African counterpart dismissed her criticism of South Africa’s stance towards Russia with a brusque comment.

    To win over these countries for future cooperation, thoughtful diplomacy on an equal footing is necessary, as Stefan Braun writes. Whether Baerbock can meld her sometimes assertive, values-based and feminist political style with more considerate and empathetic willingness to compromise must be revealed in the second half of her term.

    For a long time, Central Asia was within Russia’s sphere of influence. Many in leadership roles spoke Russian and exhibited loyalty to Moscow. However, China has been steadily filling the void left by a weakened Russia due to the collapse of the Soviet Union and, more recently, the consequences of the Ukraine conflict.

    Especially in the energy sector, Beijing is becoming indispensable through significant investments, as noted by Amelie Richter, who recently visited one of the five “Stans” of the Silk Road – Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan.

    We should pay more attention to the region, she emphasizes upon her return from Kyrgyzstan. After all, even for European resource and energy security, Central Asia is becoming increasingly attractive after distancing itself from Russia.

    Your
    Fabian Peltsch
    Image of Fabian  Peltsch

    Feature

    BRICS agree on admission of new members

    Advocates of the Global South: Luiz Inácio Lula da Silva, Xi Jinping, Cyril Ramaphosa, Narendra Modi, Sergey Lavrov.

    The great reformer Deng Xiaoping once advocated restraint in foreign policy for his country as a maxim. Under the current Chinese state and party leader Xi Jinping, this is no longer evident. His statements and demands reveal an undisguised pursuit of a leadership role in the Global South.

    Unlike any of the three heads of state present at the BRICS summit in Johannesburg, Xi Jinping also, as expected, pushed for rapid expansion. The process of admitting more states to the “BRICS family” should be accelerated, Xi demanded on Wednesday.

    Frame for expansion laid out

    The other members heeded his request and simultaneously slowed him down. On the same day, the five members adopted a document outlining the approach to expanding the group. This was stated by South African Foreign Minister Naledi Pandor. However, on Wednesday, that was as far as it went. Details of the expansion mechanism would only be revealed to the public at the end of the summit on Thursday, according to Pandor.

    The BRICS community will continue to grow “and contribute to peace and development in the world”. International standards should be written and maintained by all countries based on the goals and principles of the UN Charter “instead of being dictated by those with the strongest muscles and the loudest voice,” Xi vaguely expressed.

    An expansion benefiting China

    What may sound like the words of a peacemaker also reveal Xi’s ambition to create a world order centered around China. According to the South African government, more than 40 countries want to join BRICS, and more than 20 countries have already formally applied for membership. The most important candidates for membership are:

    • Saudi Arabia
    • Indonesia
    • Argentina
    • Mexico
    • Iran
    • United Arab Emirates
    • Algeria
    • Venezuela
    • Bangladesh

    While China is pushing for speed, Brazil, India and South Africa are slowing down progress. Their leaders know that if BRICS is expanded quickly to include such countries, their significance in this bloc will decrease. China, as the overwhelmingly most powerful economy, could gain weight. Brazilian President Luiz Inácio Lula da Silva had already emphasized at the start on Tuesday that the BRICS group should not become a counterweight “to the G7, G20, or the United States”.

    Consensus: weakening the dollar

    On the second day of the summit on Wednesday, there was much more unity on the question of weakening the significance of the US dollar as the existing world currency. They discussed the use of local currencies to facilitate mutual trade and investment, confirmed South African President Cyril Ramaphosa, host of the BRICS summit.

    Lula even advocated for a common BRICS currency. This could be used for trade and investment. This could increase payment options between BRICS members and reduce their vulnerability to exchange rate fluctuations. Xi promoted the rapid use of the new development bank of the BRICS group as an alternative to the existing development banks IMF and World Bank.

    China pushes for a leadership role

    Furthermore, the shared use of satellite data and joint development in artificial intelligence is also conceivable, according to Xi. The intention here is also quite clear: the BRICS development bank is already based in Shanghai. The Chinese are leading in satellite and AI research. Both would make the existing and possibly joining BRICS countries even more dependent on China.

    Xi doesn’t see political differences between China’s autocracy and democracies like India or Brazil as a problem. He called for enhancing cultural exchange but avoiding “ideological and institutional confrontations”.

    Bizarre scenes around the president

    On Wednesday, however, it wasn’t these content matters that dominated discussions but astonishing organizational inconsistencies. Security personnel pushed Xi’s top advisers aside at a door in a football-style manner, separating them from the president. Xi appeared puzzled and turned to his officials, but at the same time tried to appear statesmanlike and unfazed. Then, he stood somewhat lost alone on the red carpet.

    Shortly after the start of the summit on Tuesday, Xi caused a stir. He surprisingly did not appear at the BRICS Business Forum, where he was supposed to speak like the other BRICS chiefs. Although there was a speech by the Chinese state and party leader, unlike the program, it was delivered without further explanation by Chinese Minister of Commerce Wang Wentao.

    Wang must represent Xi – Xinhua ignores it

    The fact that the speech once again attacked the US as a hegemonic power no longer interested anyone. Among China watchers, wild speculation immediately began. “Xi Jinping fails to show up at the BRICS Business Forum. Something is amiss?” Bonnie Glaser from the German Marshall Fund asked on the social network X (formerly Twitter). “To say that this is extraordinary is an understatement because the Chinese leadership never misses highly choreographed events like this,” wrote the China Global South Project.

    China clumsily contributed to the story escalating further. Instead of providing an explanation for Xi’s absence, Chinese state media created the impression that the president had indeed spoken. Even Hua Chunying, spokeswoman for the Beijing Ministry of Foreign Affairs, quoted Xi Jinping’s speech on Twitter on Tuesday.

    Propaganda takes the farce to the extreme

    The appearance of her colleague Wang Wenbin at the ministry’s daily press conference on Wednesday seemed almost eerie. Although Xi’s absence had long since become known worldwide by this time, the spokesperson continued to insist that Xi had delivered the speech.

    Xi was seen at dinner on Tuesday evening. And on Wednesday, everything went according to plan. At least it seems clear that he was not seriously ill. However, as usual, Beijing is likely to keep what really happened a secret.

    Climate hardly plays a role

    Given the issue of expansion and the mishaps around Xi, the absence of a global top issue hardly stood out. Climate action is on the official agenda at the meeting but was barely discussed. Although China and India suffered from heatwaves and heavy rainfall, forest fires in Siberia got out of control, and Brazil expects an “eccentric winter” with extreme rain.

    The host country, South Africa, is focusing its climate efforts at this summit on the transition to a post-fossil economy. However, the “Just Energy Transition Partnership” (JETP) mentioned in this context is a project that Pretoria has launched not with the BRICS countries but with the countries of the Global North.

    In general, the familiar questions about climate policy will be debated at the summit:

    • Climate financing by industrialized countries: Failure to meet the promised 100 billion dollars in 2020.
    • Climate justice: Industrialized countries must act first and more than poor countries.
    • Rejection of climate action tariffs such as CBAM.

    Urgent calls for emission reduction, expansion of renewables, or even phasing out fossil fuels have not yet appeared in the BRICS demands. Felix Lee/Finn Mayer-Kuckuk/Jörn Petring/Bernhard Poetter

    • Geopolitics
    • Xi Jinping

    China courting Central Asia with energy

    Xi and the “Stans” states at the China-Central Asia Summit in May (left to right): Kassym-Jomart Tokayev of Kazakhstan, Kyrgyzstan’s President Sadyr Japarov, Uzbekistan’s President Shavkat Mirziyoyev and Emomali Rahmon of Tajikistan. Turkmenistan’s President Serdar Berdimuhamedow is obscured.

    At the first China-Central Asia Summit in May in Xi’an, China’s President Xi sat prominently in front of an array of flags. With the flags of China, Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan and Uzbekistan behind him, Xi described the necessity of “renewing our millennium-old friendship and opening up new perspectives for the future”. The timing was opportune. Until recently, Russia had been the unrivaled power in the region. However, with the massive northern neighbor apparently weakened due to the war with Ukraine, the five Central Asian countries are now experiencing a power vacuum that China aims to gradually fill.

    The connectivity fostered by the Silk Road (“Belt & Road” Initiative, or BRI) is now gaining momentum. For about a decade, China has been increasingly overshadowing Russia both as the main trading partner and the primary source of foreign investment in Central Asia, explains Jeffrey Mankoff, a senior fellow with the Russia and Eurasia Program at the Center for Strategic and International Studies (CSIS). This trend has intensified since the start of Russia’s war against Ukraine, says Mankoff. “Russian influence has taken a hit, and it’s a blow from which it probably won’t recover.”

    No longer a focus on Russia

    For China, a weakened Russia offers unexpected opportunities in the region. Until recently, many Central Asian leaders spoke Russian and were educated within a system where Russia was considered the center of the universe, according to Mankoff. The population in Central Asian states is culturally and linguistically connected to Moscow. However, this is different for the younger generation of leadership. There is no longer a focus on Russia and firm loyalty to Moscow, according to Mankoff.

    This is also evident in UN Security Council sessions: The five Central Asian countries abstained from voting on Russia’s invasion of Ukraine – a blow to Russia, which had hoped for support from the former Soviet states. Yet, for Western countries, abstention was not enough; they had wished for a clear “no,” which is nearly utopian given the geographical position of the five states. Wedged between Russia and China, this decision is only logical.

    Central Asia has also become more attractive for European resource and energy security, offering an alternative corridor to the northern transit routes through Russia. Most goods subjected to an EU trade boycott still make their way into Russian stores, primarily through Kazakhstan.

    Energy security as a key issue

    However, China had already turned its attention to Central Asia before the war and recognized the region’s need: energy. Particularly Kazakhstan and Uzbekistan struggled with an extended cold spell last winter, resulting in power shortages, gas rationing, and disruptions in household heating. The crisis was further exacerbated by export cuts from Turkmenistan to Uzbekistan in January due to “technical issues that also affected Turkmen gas deliveries to China.”

    Winter energy supply problems are not unprecedented in the region. However, it’s remarkable that Uzbekistan and Kazakhstan were unable to meet peak demand. Both countries are significant gas producers and net exporters of natural gas. Together, they officially supplied about eleven billion cubic meters of natural gas to China in 2021, equivalent to a fifth of China’s pipeline gas imports in that year.

    Despite its vast natural gas reserves, Kazakhstan struggles to maintain a surplus due to growing domestic demand. Uzbekistan’s gas production, on the other hand, is in a phase of final decline, with a remaining lifespan of less than 18 years and no prospects for significant new discoveries. Therefore, a role reversal could occur eventually: China may transition from being an importer to a supplier.

    Construction projects for water plants and photovoltaics

    Even in Kyrgyzstan’s capital, Bishkek, people shivered last winter. In early August, amid a hot summer with temperatures reaching 40 degrees Celsius and with a looming frigid winter, a decree signed by President Sadyr Japarov came into effect, declaring an energy emergency for three years.

    Now, China steps in for long-term assistance. Just a few days before the state of emergency was declared, Kyrgyz authorities signed a memorandum of understanding and an investment agreement with a consortium of Chinese companies to build four hydropower plants on the Naryn River. The construction costs are estimated to be up to three billion US dollars.

    China is also collaborating with other Central Asian countries in the energy supply sector. During a state visit of Kazakhstan’s President Kassym-Jomart Tokayev to China, an expansion of energy cooperation was announced.

    BRI summit in autumn

    According to Zhu Hexin, chairman of state-owned financier CITIC, trade documents worth more than 1.6 billion US dollars were signed with Kazakh partners for the implementation of projects in the energy and petrochemical industries. In Uzbekistan, the government is working with China to build photovoltaic plants in the Kashkadarya and Bukhara regions with a total capacity of 1000 MW.

    In October of this year, Xi will host the BRI Summit in China. An exact date has not been set. According to media reports, Russian President Vladimir Putin is also expected to attend the summit. Xi will likely not hesitate to underline who will be the dominant partner for the Central Asian states in the future.

    News

    Competition increases for German machinery manufacturers

    In the competition for market share outside the EU, the position of German machinery manufacturers is increasingly weakened by competition from China. This is revealed by a survey conducted by the Ifo Institute for Economic Research, which was published on Wednesday. According to the survey, the competitive position score dropped to its lowest level since the survey began in July 1994 – specifically to minus 14.3 points, down from minus 7.3 points in April. The last time the indicator fell to a similarly low level was during the financial crisis in January 2009. In the EU markets, the competitive position now stands at minus 8.5 points, and in the German domestic market, it’s at minus 4.1 points.

    “Skilled labor shortages are a particular challenge for the machinery industry in Germany, which is heavily characterized by medium-sized enterprises,” said Ifo industry expert Nicolas Bunde. This, along with a scarcity of important raw materials, often limits production in the machinery sector, as indicated by about 40 percent of surveyed companies. In production, there are many older employees, while the younger generation is often not willing to work in shift operations. Additionally, machinery manufacturers are located in rural areas. According to Ifo, these companies need to become even more attractive as employers in order to attract suitable personnel from major cities. Moreover, the increased energy and raw material costs can rarely be passed on to the selling price. rtr/fpe

    • Mechanical Engineering
    • Middle class
    • Technology

    German government takes on fewer investment guarantees for China

    The German government is assuming fewer investment guarantees for China than in the previous year. According to the response from the Federal Ministry for Economics to an inquiry from Left Party economic politician Christian Leye, which the Reuters news agency has obtained, investment guarantees totaling 51.9 million euros have been taken over until Aug. 14. For comparison: In the entire year 2022, it was still 745.9 million euros, and in 2021, it was even 1.9 billion euros.

    Since the tightened new regulation of coverage conditions in November of last year, according to the ministry, companies have submitted eleven new applications for state insurance of projects in China. Of these, only four have been positively approved with small sums and three have been rejected. According to the response to the inquiry, decisions on four projects are still pending. The federal government also emphasizes in its China strategy that it wants to reduce the risks in its business with China.

    Now, the new assessment of the applications is also having an impact: “In addition to an individual examination of the individual project, the risk concentration in the portfolio is now more closely scrutinized at the level of a country as well as at the level of a corporate group,” writes State Secretary for Economic Affairs Udo Philipp in the 24-page document. The federal government wants to reduce the risk of multiple projects failing simultaneously and leading to large commitments for the federal budget all at once.

    Companies pay fees for the government’s investment guarantee, and the federal government is liable in the event of a default. However, the government admits that there hasn’t been a single case of guarantee payment in China-related business in the past ten years. Nevertheless, there are concerns within the government that events like a Chinese attack on Taiwan could heavily strain economic relations with Germany’s largest trading partner.

    At the same time, the Ministry for Economics had limited the maximum amount for taking over investment guarantees to 3 billion euros per company and country. However, this doesn’t seem to have any impact: In the past ten years, not a single investment guarantee with a higher volume has been registered. Companies can also invest in China without applying for state insurance. rtr/ari

    • Economic policy
    • Investments
    • Trade

    USA: Tariffs on Chinese solar modules being circumvented

    Solar companies in Southeast Asia are circumventing US tariff regulations on Chinese solar panels. This is the result of an investigation by the US Department of Commerce. According to the investigation, five companies in Cambodia, Malaysia, Thailand, and Vietnam, either of Chinese origin or with connections to China, are bypassing tariff regulations. Starting from April 2024, products from these manufacturers could be subject to US tariffs of up to 254 percent. The USA had already decided on tariffs on Chinese solar products in 2022. However, there was a two-year transition period to allow US companies to explore alternative suppliers, as reported by Bloomberg.

    The USA imports over 75 percent of its solar modules from Vietnam, Cambodia, Malaysia and Thailand. All other manufacturers in these countries must also prove that they are not circumventing the import tariffs on Chinese modules. Specifically, this means that certain components of the solar modules must be manufactured outside of China. Project developers in the USA criticize this decision, as it leads to higher costs for solar modules. American producers, on the other hand, support the tariffs.

    The background for these tariffs is Chinese subsidies and unfair pricing. The USA has also taken measures to exclude forced Uyghur labor from the solar supply chain. Chinese solar companies are establishing a second supply chain that is supposed to be free from forced labor and are also investing in production facilities in neighboring states. nib

    • Climate
    • Solar
    • USA

    Heads

    Kwon Pyong – fleeing to South Korea by jet ski

    Geflohener Dissident Kwon Pyong
    An undated selfie of fleeing dissident Kwon Pyong.

    The escape of 35-year-old Kwon Pyong by jet ski from China to South Korea has a long history. The North Chinese man with Korean roots from the Jilin province had spent over a decade advocating for civil rights in his homeland and regularly protested against the political rule of Party leader Xi Jinping. His activism led to his imprisonment for a year and a half at the end of 2016 on charges of “undermining state power and insulting the socialist system”.

    According to media reports, his conviction in February 2017 by the intermediate people’s court in Yanbian was based on around 80 comments posted on social networks like Twitter and Facebook. There, he criticized China’s harsh approach towards lawyers in the country, as well as the Tiananmen Massacre and the human rights situation in Tibet.

    Expressing criticism using his real name on social media

    In 2012, Pyong briefly studied at Iowa State University in the USA before returning to Jilin. In 2014, he traveled to Hong Kong to participate in the “Occupy Hong Kong” umbrella movement, which demanded democratic elections in the region. Shortly before his arrest, he used his real name and the handle “BraveJohnny” on Twitter to express the desire for Hong Kong independence.

    A month earlier, Pyong had posted a photo on Twitter wearing a T-shirt that compared China’s Party leader Xi Jinping to Hitler (#Xitler). He then insulted Xi in Chinese characters as “Xi Baozi” (steamed bun) and “Big Spender”. He told a friend at the time that he planned to wear the T-shirt on National Day (Oct. 1) while taking to the streets, which he had apparently done before. He had already drawn police attention for sending postcards to human rights lawyers imprisoned in China.

    300 km from Shandong to Incheon

    A few days before the trial began, Pyong’s parents dismissed his lawyers for no apparent reason and prevented them from appearing in court. Human rights organizations suspect that Chinese authorities pressured Pyong’s parents to prevent any effective legal assistance for their son. His mother asked foreign media and local supporters not to contact her anymore. The trial against Pyong took place behind closed doors.

    Why Pyong fled to South Korea on a jet ski, covering around 300 kilometers across the Yellow Sea from Shandong, remains unclear. He is said to have towed five barrels of gasoline with the jet ski to avoid getting stranded at sea. The Korean Coast Guard eventually arrested him for illegal entry.

    Dissidents who have fallen out of favor in China are usually subjected to exit bans. They are often deprived of their citizenship rights and closely monitored by Chinese authorities for years. State security and police regularly visit dissidents to warn them against further activism or contact with foreign media.

    China seeks extradition of dissidents

    Other dissidents report being denied any opportunity to reintegrate into society, even after serving their prison sentences. They are not allowed to enter regular employment to earn a living, nor are they allowed to change their place of residence. Landlords are warned against providing new accommodation to those affected.

    Kwon, whose Chinese name is Qian Ping, has reportedly applied for political asylum, according to Korean media reports. The human rights organization “Lawyers for Public Interest Rights” has taken up his case. It is said that he will seek asylum in another country if Korean authorities reject his application.

    Meanwhile, China is trying to persuade neighboring Asian countries to extradite fleeing dissidents. Recently, human rights lawyer Lu Siwei was arrested in Laos while in transit to Thailand on his way to the USA. His current status remains unclear. Marcel Grzanna

    • Regenschirm-Bewegung

    Executive Moves

    Teodoro Locsin Jr. becomes the Philippines’ special envoy to China. He is to mediate between the two countries in the dispute over islands in the South China Sea.

    Qin Lu is the new head of Greater China at consulting firm Aon. Qin was previously co-head of China and CEO of Reinsurance Solutions for Greater China at Aon. Prior to that, he spent 19 years at Swiss Re.

    Is something changing in your organization? Let us know at heads@table.media!

    Dessert

    This little pup in his current form isn’t a newcomer to the planet – he’s a clone, as declared on his chest harness: “我是克隆狗” (I am a cloned dog). He was showcased alongside other pets at the Pet Asia Show in Shanghai last week. The company Beijing Sinogu Biotechnology offers this service. Dog owners can purchase a replica of their deceased dog there, with prices starting at around 50,000 dollars.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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