EU Commission: EU-China relations jeopardize CAI ratification
Sinovac vaccine must show what it can do
China correspondents nominated for Nannen Prize
US Commerce Department urges Taiwan to prioritize US automakers
Rocket debris threatens to crash on to Earth
Port in Darwin: Australia fears for national security
Huarong can service debts
Profile: Genia Kostka
Dear reader,
European companies will have to wait longer for the removal of market access restrictions as well as better investment conditions in China. This is largely because the CAI investment agreement between the EU and China is on thin ice. On Tuesday evening, EU Commission Vice-President Valdis Dombrovskis voiced what has been making the rounds in Brussels for days: The environment “for ratification of the agreement is not favorable at the moment”. Finn Mayer-Kuckuk has the background information.
The fact that a stronger China calls the self-confidence of the Western democracies into question became clear once again at the meeting of the G7 foreign ministers in London. As a reminder, the G7 are a bulwark of the old world order. They date back to the days of the Iron Curtain and Mao. In view of the provocations by Vladimir Putin and Xi Jinping, a new front of Western democracies is now forming against the authoritarian-ruled countries in the East. In any case, Heiko Maas and his US colleague Antony Blinken were in agreement in a way we’re no longer used to after four years of Trump.
How well does Sinovac work? Experts from different parts of the world have been dealing with this question ever since the vaccine was launched. Chinese vaccines work, but the high-tech competition from Europe and the US has set the bar very high for the efficacy rate. The European Medicines Agency, among other agencies, must now check on whether China has deliberately quoted higher efficacy rates than the vaccine actually achieves. A formal approval procedure for the Chinese vaccine is beginning at the agency in Amsterdam.
The agencies Moody’s and Fitch downgraded the credit rating of asset manager Huarong last week. Now the company reigns in state ownership and reassures foreign investors. That’s because they expect Huarong to repay about $3.7 billion in bonds this year, as Ning Wang reports.
Your Antje Sirleschtov
Feature
EU Commission: Sanctions jeopardise Ratification of the CAI
The EU-China Comprehensive Agreement on Investment (CAI) was supposed to facilitate European companies’ access to the Chinese market (China.Table reported) and is considered a precursor to free trade. Now its coming into force has been postponed indefinitely. With Valdis Dombrovskis, Vice-President of the EU Commission, the first high-ranking EU politician openly voiced on Tuesday evening what had long been clear in Brussels: with regards to the mood against the agreement, it hardly stands a chance in Parliament anyway.
The signing of the agreement by the Commission in December was initially a PR success for Beijing: While the US put the country under pressure with trade sanctions, the EU opened itself up to far-reaching economic cooperation. While the CAI addresses critical issues such as human rights and labor conditions, it does not provide for a real monitoring mechanism to enforce EU standards. Germany was one of the supporters of the agreement. Indeed, the ratification of an investment treaty has been one of the German government’s explicit wishes vis-à-vis Beijing for a decade.
Sanctions are the main reason for the U-turn
Dombrovskis cited recent diplomatic rifts with Beijing as the reason for his fears. In view of mutual sanctions, the environment is “not favorable for ratification of the agreement at the moment”, he told the AFP news agency on Tuesday evening. In doing so, he clearly relates the suspension to the sanctions China has imposed on European politicians and academics.
Dombrovskis’ statement caused great excitement in the short term. However, the development is not unexpected for observers (China.Table reported). Shortly after the agreement was signed by the EU Commission and the Chinese government in December, the same actors began to feud fiercely. The EU first imposed travel restrictions on Chinese officials allegedly responsible for reprisals in Xinjiang province. Beijing promptly retaliated – and is once again imposing much broader counter-sanctions. The travel bans affected not only critical EU parliamentarians like Bütikofer, but also, for example, the Merics research institute in Berlin.
In this environment, Dombrovskis’ statement could also serve to saveface – and give the agreement a chance after all. If the Parliament had explicitly decided against the CAI, it would have been off the table for the time being. So it hangs in the balance. Green MEP Reinhard Bütikofer told China.Table that it was clear there was no majority for a cooperation agreement with a country that imposes sanctions on its own parliamentarians. “For the Chancellor, her advocacy of the investment agreement is becoming an embarrassment despite all the criticism.” He said it was all the more clear that Germany needed a new China policy after Merkel.
G7 countries also counter China
The growing bellyache in dealing with China is also evident at the meeting of the G7 foreign ministers in London. Two topics dominated the summit: Russia and China. The front between the authoritarian-ruled states and the old Western democracies is clearly hardening here as well. US Secretary of State Antony Blinken and Heiko Maas showed trusting unity – which would not have been possible under Trump.
The foreign ministers stressed that human rights issues should once again be given greater prominence in the future and that they should speak with one voice as far as possible. “There are economic interests everywhere, but questions of human rights and freedoms must be given greater space when it comes to China,” Maas said on Tuesday. Blinken sounded a similar note: “We are trying to maintain the international rules-based order in which our countries have invested so much over so many decades,” he said.
In the four years of Donald Trump’s presidency, the G7 has not worked as a group. Trump had made a show of undermining the policies of the former partners. At the same time, he has unilaterally pursued a particularly tough trade policy and imposed uncoordinated sanctions against China. Europe, Japan, and Canada have shown little willingness to go along in the face of his behavior. Now it looks like it was Trump’s persona and style more than the substantive issues that led to the European and American positions drifting apart. In the post-Trump era, common ground is once again coming to the fore.
Blinken wants to defend the old order
However, despite the greater unity, the G7 seems outdated as an institution. No wonder, after all, that they are an association of important states of the world order of the 20th century. The members are the USA, Japan, Germany, Great Britain, France, Italy, and Canada. This composition has long ceased to represent the actual influence on world affairs. Brazil, Russia, India, and China (i.e., the so-called “BRICS” countries) have at least as much say in terms of population size, environmental and climate influence, and other factors. China and India, in particular, have larger economies than many G7 countries. South Korea and India are, after all, invited as guests and sit at the table. Nevertheless, the G7 is something of a bulwark of the old industrial nations. Blinken was quick to point this out: If a country like China challenges the existing order led by the democracies, “we will stand up and defend the order”.
Here, too, Maas sounded very similar: “More and more, authoritarian states or authoritarian state leaders are trying to set their model against that of liberal democracies.” The G7 should define common values and develop common strategies. “We, the G7, are the free world, and we want free trade instead of non-disclosure agreements as we know it from others.” However, on the same day as Maas’ commitment to free trade in London, the CAI in Brussels was now sided. With similar intentions, concrete policies thus contradict each other. For all its weaknesses, the CAI is a trade liberalization treaty.
The Greens as an influencing factor?
From an Anglo-Saxon perspective, the rise of the Greens in German politics also plays a role in these events. With the foreseeable participation of the eco-party in government from autumn, the issue of human rights could gain prominence in the largest EU country, while economic interests lose priority. According to this view, the signing of the CAI took place at the last possible moment when this was still possible. Trump had turned the Europeans against him and Merkel with her cooperation-oriented policy still set the tone. Bütikofer’s call for a new, green-influenced China policy “post-Merkel” now supports the thesis that such treaties will have a harder time in the future.
The suspension of efforts to whip the CAI through the Parliament in the face of opposition thus fits with the anticipated readjustment in Germany’s China policy that is evident in the positive poll numbers for the Greens. Still, there will almost certainly be no abrupt change. German foreign policy changes very slowly, regardless of party politics. Collaboration: Amelie Richter
G7
Geopolitics
Heiko Maas
Joe Biden
Russia
Sanctions
The Sinovac vaccine has to show what it can do
The European Medicines Agency (EMA) plans to assess in the coming months whether it will approve the vaccine of Chinese manufacturer Sinovac in the EU. “We will assess the extent to which EU standards for efficacy, safety and quality are met,” the EMA said in Amsterdam on Tuesday. However, it did not give a date when a final decision could be expected.
The process is sure to generate a great deal of interest. After all, depending on the area of the world and the study, the values for the product’s efficacy rate vary between 51 and 82 percent. The biggest disappointment surrounding Sinovac, however, concerns efficacy after the first dose. While Biontech, Astrazeneca, Moderna and many other competitors have already achieved high values of around 70 percent here, data from South America for Sinovac (China.Table reported) indicate rather weak rates in the 16 percent range. So both doses are really needed to produce any meaningful vaccine protection at all.
WHO examines emergency approval
The question of the actual effectiveness of the Sinovac vaccine is currently also being investigated by the World Health Organization (WHO). This concerns both Sinovac and its competitor Sinopharm. The WHO is currently examining the possibility of an emergency approval. This would be an important signal for authorities worldwide not to do without the Chinese vaccine. A rejection would be a loss of face for the Chinese pharmaceutical industry. The World Health Organization is expected to make a decision on the vaccine later this week. It would be the fifth approval of a Covid19 vaccine by the WHO, alongside vaccines from Pfizer and Biontech, Astrazeneca, Moderna and Johnson & Johnson.
For Beijing, vaccines are highly political at the moment. After all, China presents itself as the savior of the countries of the Global South (China.Table reported) – and not without good reason. The US has exported only a few million vaccine doses so far. It was only at the end of April that they announced they would export 60 million Astrazeneca doses in the coming months. The EU has exported more vaccines than the US, but even in this country, every export is viewed critically. At the same time, infection rates are exploding in disadvantaged countries (China.Table reported) and many countries in the Global South are forecast to have to wait until 2023 before universal vaccine coverage is achieved. If Sinovac were less effective than promised, there could even be a major setback in global vaccine supply.
Countries like Turkey and Indonesia rely heavily on supplies from China. The stakes are high for the respective heads of government. They have been promoting the effectiveness and safety of the supplies from China. If it turns out that the vaccine does not protect well, that would hurt them in the public perception.
Low efficacy after first dose
Itis already certain that the vaccines from Sinopharm and Sinovac basically work. However, it was also clear from the outset that they do not come close to the superior effect that can be achieved with high-tech medicine based on mRNA or vectors. The vaccines from Biontech, Moderna, and Curevac take a particularly sophisticated approach. They present virus parts directly to the responsible immune cells and use genetic engineering methods for this purpose. The cells then start the mass production of antibodies without any detours.
Theinactivated vaccines from Sinopharm and Sinovac, on the other hand, simply contain the Sars coronavirus 2 – only in a killed form. The immune system must first find these inactive viruses, identify them as foreign bodies, present them to the responsible cells, and only then can it produce antibodies. To stimulate this process, the twofold stimulation is necessary.
Even a 50 percent efficacy rate would be quite sufficient to make a difference. The figure does not mean that half of those vaccinated will still get sick. It is the percentage by which the visible disease becomes less frequent in the vaccinated group. But what is very important is that severe courses of disease, hospitalizations, transmissions to others, and deaths are reduced to zero. The Chinese products also seem to achieve this – at least after the second dose.
The EMA and WHO will now evaluate the available data scientifically and independently. There are criteria for what constitutes a well-done vaccination study and how the data should be read. If there are gaps or inconsistencies in the information that manufacturers are required to provide, there will be no approval. Finn Mayer-Kuckuk / Nico Beckert
Health
Pharma
News
Semiconductors – US Commerce Department presses Taiwan to prioritize US automakers
US Commerce Secretary, Gina Raimondo, is pressing Taiwan to prioritize supplying chips to the US auto industry. “We’re working hard to see if we can get the Taiwanese and TSMC, which is a big company there, to, you know, prioritize the needs of our auto companies since there’s so many American jobs on the line,” Raimondo said on Tuesday, according to Reuters. TSMC is the world’s leading maker of semiconductors for the auto industry.
The US also plans to increase its own manufacturing capacity and reduce dependence on China and Taiwan, the commerce secretary said, according to Bloomberg. She touted President Joe Biden’s proposal for a $50 billion fund for semiconductor manufacturing. Automakers are pushing for some of the money to be set aside for chips in for the auto industry. They warn of a potential loss of production of 1.3 million cars and light trucks in the US this year if their industry is not given priority. nib
Car Industry
Chips
Semiconductor
Technology
TSMC
USA
China correspondents nominated for the Nannen Prize
Working as a China correspondent was not easy, even in the past. The People’s Republic has always been at the bottom of the press freedom rankings. But the work of foreign journalists in the Middle Kingdom has never been as difficult as it was in the past pandemic year. They were hindered in their research, their interlocutors intimidated and put under pressure, foreign reporters had to be quarantined several times for weeks on end for reasons that are no longer comprehensible. It was made difficult for them to enter and leave the country, their relatives were not allowed to enter at all. And even when research trips within the country were officially allowed again, they were persecuted and monitored by state security.
The fact that they have continued to report so extensively and knowledgeably from the authoritarian-ruled country despite these massively difficult circumstances has persuaded the jury of the Nannen Prize, chaired by Ulrich Wickert, to nominate the China correspondents of the Frankfurter Allgemeine Zeitung, Süddeutsche Zeitung, and the weekly newspaper Die Zeit for the prestigious Nannen Prize in the newly created category “Republic”.
“Outstanding foreign reporting conveys a deep understanding of societies and cultures and acts as a journalistic corrective to ideologically motivated distorted images,” it says in the justification. Despite this, or precisely because of it, the work of foreign correspondents is becoming increasingly difficult and obstructed. And hardly anywhere is this as clear as in China. And further: “The fearless work of Friederike Böge, Lea Deuber, and Xifan Yang in China is representative of the courage and tenacity of correspondents worldwide.”flee
Rocket debris threatens to crash on to Earth
A 20-ton piece of Chinese Long March rocket wreckage is about to make an uncontrolled re-entry back into Earth’s atmosphere in the coming days. It is unclear where and when the rocket debris will crash. The rocket was launched into space a few days ago to initiate the construction of the Chinese space station “Tiangong – Heavenly Palace” (China.Table reported).
While much of the debriswillburn up upon re-entry into Earth’s atmosphere, enough fragments could remain to cause damage, the SCMP reports. However, it is more likelythat the pieces will crash onto uninhabited land or into the sea, according to the SpaceNews trade portal. Last year, debris from another Chinese Long March rocket fell on villages in the Ivory Coast, damaging several houses.
The design of the rocket is said to be the cause of the uncontrolled re-entry. The main part is not controllable and cannot be maneuvered into a trajectory, which is considered a basic condition for a controlled crash. The rockets of other countries are more advanced in this matter, he said. Further launches of the same type of rocket are planned for the construction of the space station. nib
Pollution
Sustainability
Tiangong
Port in Darwin: Australia fears for national security
The Australian government is considering terminating a lease with a Chinese port operator in Darwin, northern Australia. Out of concern for national security, the Department of Defence wants to examine whether the Chinese Landbridge Group should be stripped of its rights of use. This is based on the 2020 reformed Foreign Investment Act. In 2015, the oil and logistics company secured the rights of use for a period of 99 years for just under $400 million.
In addition to its commercial use, the port at Darwin is also a base for Australian and US naval forces. Landbridge only has access to the commercial part of the site and requires permission from the local authorities for naval visits by third countries. The deal between the company and the Northern Territory government was struck without consulting the Americans, which angered the US government in Washington at the time. According to its own information, the Northern Territory government had previously courted Canberra in vain for three decades to invest in the port area until the Chinese company stepped into the breach.
Termination of the contract would cost the Australian governmentdearly. On the one hand, compensation payments would be due to Landbridge, and on the other, the state would risk a downgrading of its credit rating, which could scare off foreign investors. The Australian government’s deliberations at this point in time are also the result of increasing tensions with Beijing. Over the past year, the People’s Republic of China imposed import bans and high tariffs against numerous Australian products, such as meat or wine, after Canberra launched anti-dumping investigations against Chinese companies in early 2020 and called for an independent investigation of the COVID outbreak in Wuhan shortly afterwards. grz
Military
Huarong can service Debts
China’s state-owned asset manager Huarong assured its investors that it would be able to repay its debts. Xu Yongli, vice president and board secretary of Huarong told the business daily Shanghai Securities News that the recent downgrades by international rating agencies “have no factual basis” and criticized them “as too pessimistic.” Agencies Moody’s and Fitch had downgraded the company’s credit rating last week. It was unclear whether Huarong enjoyed the full support of the government, he said.
A government bailout may be necessary as the company’s situation remains serious. It ran into financial trouble in March and unexpectedly delayed the release of its financial statements. Investors then dumped bonds issued by Huarong. In the next move, the company’s stock also slid. According to business portal Caixin, the Ministry of Finance in Beijing is the asset manager’s largest shareholder. State institutions had recently prepared to come to the company’s rescue. The asset manager has $22.9 billion in foreign bonds outstanding and must repay $3.7 billion of them to investors this year. Now the company is switching to appeasement. “Huarong is actively working with auditors to release 2020 financial results as soon as possible,” Xu told Xinhua news agency.
The payment problems have a dramatic history. Huarong’s former board chairman Lai Xiaomin was sentenced to death for corruption earlier this year. Between 2008 and 2018, Lai allegedly took bribes worth the equivalent of about €225 million. The sentence against Lai is considered one of the harshest handed down by a Chinese court in recent times for white-collar crimes. niw
Chinese Communist Party
Finance
Profile
Genia Kostka
Director of the Institute for Chinese Studies at Freie Universität Berlin
One could almost think that the Chinese policy is in the hands of one family at Berlin’s universities. Genia Kostka has headed the Institute of Chinese Studies at Freie Universität since 2020, while her wife Sarah Eaton is a professor on the same topic at Humboldt Universität. Whenever the 42-year-old gets stuck in her research on China’s technology policy, she has a sparring wife.
Genia Kostka describes her path into China research as accidental. When she was 17, the Chemnitz native was determined to do her Abitur abroad. Her first choice would have been Canada, but the exchange organization sent her to Hong Kong. “Today, I’d rather choose that any day,” Kostka says. In 1996 she set off, fell in love with the country and the people.
At the time, Genia Kostka was still thinking about working in some international organization “because it sounded sexy”. But when she started working as a consultant at McKinsey after completing her master’s degree in economics at Johns Hopkins University in Baltimore, it became clear to her that there was no way around China, “for better or for worse”. She earned her PhD from Oxford in 2009, conducted research in China, and became a fellow at Tsinghua University in Beijing. In 2017, she began specializing in China’s environmental policy at Freie Universität Berlin. The many technical solutions to environmental issues, such as scannable garbage bags and pollution reporting apps, brought her to her new field of research.
Germany can learn a lot about digital technologies and their advantages and disadvantages in China, says Kostka. Because a lot of things happen faster there than in bureaucratic Germany. Of course, the technology is also used for surveillance and must be viewed critically. “Nevertheless, one should not simply condemn everything, but learn from it.”
For example, this is the Chinese version COVID app. While we are still debating, the app in China has long had a QR code for vaccinated people to access public places. “It would help the economy if we introduce that too,” says Genia Kostka. The recent studies she did on the topic showed that for it to work, the technology has to be effective first and foremost, and people have to see their personal benefits in it. Germany could also learn from the negative example of China when it comes to the lack of transparency of technologies.
At the moment Kostka is working on a database about digital projects in China’s local governments. Unfortunately, without interviews in the country. Kostka is concerned about the academic “decoupling” that is taking place and making it difficult for foreign researchers. “I’d like to go back to help prevent the situation from becoming even more difficult,” she says. Maybe then with her four children, too. They’ve never been there before. Marita Wehlus
Apps
Decoupling
Environment
Sustainability
Technology
Executive Moves
Translation missing.
Dessert
Something sweet for dessert! COVID is considered over, the May travel wave is rolling in China, and at the Yungang Caves in northern China, a tourist holds up his ice cream on a stick. It’s amazing how the ice cream artist has recreated the caves faithfully.
EU Commission: EU-China relations jeopardize CAI ratification
Sinovac vaccine must show what it can do
China correspondents nominated for Nannen Prize
US Commerce Department urges Taiwan to prioritize US automakers
Rocket debris threatens to crash on to Earth
Port in Darwin: Australia fears for national security
Huarong can service debts
Profile: Genia Kostka
Dear reader,
European companies will have to wait longer for the removal of market access restrictions as well as better investment conditions in China. This is largely because the CAI investment agreement between the EU and China is on thin ice. On Tuesday evening, EU Commission Vice-President Valdis Dombrovskis voiced what has been making the rounds in Brussels for days: The environment “for ratification of the agreement is not favorable at the moment”. Finn Mayer-Kuckuk has the background information.
The fact that a stronger China calls the self-confidence of the Western democracies into question became clear once again at the meeting of the G7 foreign ministers in London. As a reminder, the G7 are a bulwark of the old world order. They date back to the days of the Iron Curtain and Mao. In view of the provocations by Vladimir Putin and Xi Jinping, a new front of Western democracies is now forming against the authoritarian-ruled countries in the East. In any case, Heiko Maas and his US colleague Antony Blinken were in agreement in a way we’re no longer used to after four years of Trump.
How well does Sinovac work? Experts from different parts of the world have been dealing with this question ever since the vaccine was launched. Chinese vaccines work, but the high-tech competition from Europe and the US has set the bar very high for the efficacy rate. The European Medicines Agency, among other agencies, must now check on whether China has deliberately quoted higher efficacy rates than the vaccine actually achieves. A formal approval procedure for the Chinese vaccine is beginning at the agency in Amsterdam.
The agencies Moody’s and Fitch downgraded the credit rating of asset manager Huarong last week. Now the company reigns in state ownership and reassures foreign investors. That’s because they expect Huarong to repay about $3.7 billion in bonds this year, as Ning Wang reports.
Your Antje Sirleschtov
Feature
EU Commission: Sanctions jeopardise Ratification of the CAI
The EU-China Comprehensive Agreement on Investment (CAI) was supposed to facilitate European companies’ access to the Chinese market (China.Table reported) and is considered a precursor to free trade. Now its coming into force has been postponed indefinitely. With Valdis Dombrovskis, Vice-President of the EU Commission, the first high-ranking EU politician openly voiced on Tuesday evening what had long been clear in Brussels: with regards to the mood against the agreement, it hardly stands a chance in Parliament anyway.
The signing of the agreement by the Commission in December was initially a PR success for Beijing: While the US put the country under pressure with trade sanctions, the EU opened itself up to far-reaching economic cooperation. While the CAI addresses critical issues such as human rights and labor conditions, it does not provide for a real monitoring mechanism to enforce EU standards. Germany was one of the supporters of the agreement. Indeed, the ratification of an investment treaty has been one of the German government’s explicit wishes vis-à-vis Beijing for a decade.
Sanctions are the main reason for the U-turn
Dombrovskis cited recent diplomatic rifts with Beijing as the reason for his fears. In view of mutual sanctions, the environment is “not favorable for ratification of the agreement at the moment”, he told the AFP news agency on Tuesday evening. In doing so, he clearly relates the suspension to the sanctions China has imposed on European politicians and academics.
Dombrovskis’ statement caused great excitement in the short term. However, the development is not unexpected for observers (China.Table reported). Shortly after the agreement was signed by the EU Commission and the Chinese government in December, the same actors began to feud fiercely. The EU first imposed travel restrictions on Chinese officials allegedly responsible for reprisals in Xinjiang province. Beijing promptly retaliated – and is once again imposing much broader counter-sanctions. The travel bans affected not only critical EU parliamentarians like Bütikofer, but also, for example, the Merics research institute in Berlin.
In this environment, Dombrovskis’ statement could also serve to saveface – and give the agreement a chance after all. If the Parliament had explicitly decided against the CAI, it would have been off the table for the time being. So it hangs in the balance. Green MEP Reinhard Bütikofer told China.Table that it was clear there was no majority for a cooperation agreement with a country that imposes sanctions on its own parliamentarians. “For the Chancellor, her advocacy of the investment agreement is becoming an embarrassment despite all the criticism.” He said it was all the more clear that Germany needed a new China policy after Merkel.
G7 countries also counter China
The growing bellyache in dealing with China is also evident at the meeting of the G7 foreign ministers in London. Two topics dominated the summit: Russia and China. The front between the authoritarian-ruled states and the old Western democracies is clearly hardening here as well. US Secretary of State Antony Blinken and Heiko Maas showed trusting unity – which would not have been possible under Trump.
The foreign ministers stressed that human rights issues should once again be given greater prominence in the future and that they should speak with one voice as far as possible. “There are economic interests everywhere, but questions of human rights and freedoms must be given greater space when it comes to China,” Maas said on Tuesday. Blinken sounded a similar note: “We are trying to maintain the international rules-based order in which our countries have invested so much over so many decades,” he said.
In the four years of Donald Trump’s presidency, the G7 has not worked as a group. Trump had made a show of undermining the policies of the former partners. At the same time, he has unilaterally pursued a particularly tough trade policy and imposed uncoordinated sanctions against China. Europe, Japan, and Canada have shown little willingness to go along in the face of his behavior. Now it looks like it was Trump’s persona and style more than the substantive issues that led to the European and American positions drifting apart. In the post-Trump era, common ground is once again coming to the fore.
Blinken wants to defend the old order
However, despite the greater unity, the G7 seems outdated as an institution. No wonder, after all, that they are an association of important states of the world order of the 20th century. The members are the USA, Japan, Germany, Great Britain, France, Italy, and Canada. This composition has long ceased to represent the actual influence on world affairs. Brazil, Russia, India, and China (i.e., the so-called “BRICS” countries) have at least as much say in terms of population size, environmental and climate influence, and other factors. China and India, in particular, have larger economies than many G7 countries. South Korea and India are, after all, invited as guests and sit at the table. Nevertheless, the G7 is something of a bulwark of the old industrial nations. Blinken was quick to point this out: If a country like China challenges the existing order led by the democracies, “we will stand up and defend the order”.
Here, too, Maas sounded very similar: “More and more, authoritarian states or authoritarian state leaders are trying to set their model against that of liberal democracies.” The G7 should define common values and develop common strategies. “We, the G7, are the free world, and we want free trade instead of non-disclosure agreements as we know it from others.” However, on the same day as Maas’ commitment to free trade in London, the CAI in Brussels was now sided. With similar intentions, concrete policies thus contradict each other. For all its weaknesses, the CAI is a trade liberalization treaty.
The Greens as an influencing factor?
From an Anglo-Saxon perspective, the rise of the Greens in German politics also plays a role in these events. With the foreseeable participation of the eco-party in government from autumn, the issue of human rights could gain prominence in the largest EU country, while economic interests lose priority. According to this view, the signing of the CAI took place at the last possible moment when this was still possible. Trump had turned the Europeans against him and Merkel with her cooperation-oriented policy still set the tone. Bütikofer’s call for a new, green-influenced China policy “post-Merkel” now supports the thesis that such treaties will have a harder time in the future.
The suspension of efforts to whip the CAI through the Parliament in the face of opposition thus fits with the anticipated readjustment in Germany’s China policy that is evident in the positive poll numbers for the Greens. Still, there will almost certainly be no abrupt change. German foreign policy changes very slowly, regardless of party politics. Collaboration: Amelie Richter
G7
Geopolitics
Heiko Maas
Joe Biden
Russia
Sanctions
The Sinovac vaccine has to show what it can do
The European Medicines Agency (EMA) plans to assess in the coming months whether it will approve the vaccine of Chinese manufacturer Sinovac in the EU. “We will assess the extent to which EU standards for efficacy, safety and quality are met,” the EMA said in Amsterdam on Tuesday. However, it did not give a date when a final decision could be expected.
The process is sure to generate a great deal of interest. After all, depending on the area of the world and the study, the values for the product’s efficacy rate vary between 51 and 82 percent. The biggest disappointment surrounding Sinovac, however, concerns efficacy after the first dose. While Biontech, Astrazeneca, Moderna and many other competitors have already achieved high values of around 70 percent here, data from South America for Sinovac (China.Table reported) indicate rather weak rates in the 16 percent range. So both doses are really needed to produce any meaningful vaccine protection at all.
WHO examines emergency approval
The question of the actual effectiveness of the Sinovac vaccine is currently also being investigated by the World Health Organization (WHO). This concerns both Sinovac and its competitor Sinopharm. The WHO is currently examining the possibility of an emergency approval. This would be an important signal for authorities worldwide not to do without the Chinese vaccine. A rejection would be a loss of face for the Chinese pharmaceutical industry. The World Health Organization is expected to make a decision on the vaccine later this week. It would be the fifth approval of a Covid19 vaccine by the WHO, alongside vaccines from Pfizer and Biontech, Astrazeneca, Moderna and Johnson & Johnson.
For Beijing, vaccines are highly political at the moment. After all, China presents itself as the savior of the countries of the Global South (China.Table reported) – and not without good reason. The US has exported only a few million vaccine doses so far. It was only at the end of April that they announced they would export 60 million Astrazeneca doses in the coming months. The EU has exported more vaccines than the US, but even in this country, every export is viewed critically. At the same time, infection rates are exploding in disadvantaged countries (China.Table reported) and many countries in the Global South are forecast to have to wait until 2023 before universal vaccine coverage is achieved. If Sinovac were less effective than promised, there could even be a major setback in global vaccine supply.
Countries like Turkey and Indonesia rely heavily on supplies from China. The stakes are high for the respective heads of government. They have been promoting the effectiveness and safety of the supplies from China. If it turns out that the vaccine does not protect well, that would hurt them in the public perception.
Low efficacy after first dose
Itis already certain that the vaccines from Sinopharm and Sinovac basically work. However, it was also clear from the outset that they do not come close to the superior effect that can be achieved with high-tech medicine based on mRNA or vectors. The vaccines from Biontech, Moderna, and Curevac take a particularly sophisticated approach. They present virus parts directly to the responsible immune cells and use genetic engineering methods for this purpose. The cells then start the mass production of antibodies without any detours.
Theinactivated vaccines from Sinopharm and Sinovac, on the other hand, simply contain the Sars coronavirus 2 – only in a killed form. The immune system must first find these inactive viruses, identify them as foreign bodies, present them to the responsible cells, and only then can it produce antibodies. To stimulate this process, the twofold stimulation is necessary.
Even a 50 percent efficacy rate would be quite sufficient to make a difference. The figure does not mean that half of those vaccinated will still get sick. It is the percentage by which the visible disease becomes less frequent in the vaccinated group. But what is very important is that severe courses of disease, hospitalizations, transmissions to others, and deaths are reduced to zero. The Chinese products also seem to achieve this – at least after the second dose.
The EMA and WHO will now evaluate the available data scientifically and independently. There are criteria for what constitutes a well-done vaccination study and how the data should be read. If there are gaps or inconsistencies in the information that manufacturers are required to provide, there will be no approval. Finn Mayer-Kuckuk / Nico Beckert
Health
Pharma
News
Semiconductors – US Commerce Department presses Taiwan to prioritize US automakers
US Commerce Secretary, Gina Raimondo, is pressing Taiwan to prioritize supplying chips to the US auto industry. “We’re working hard to see if we can get the Taiwanese and TSMC, which is a big company there, to, you know, prioritize the needs of our auto companies since there’s so many American jobs on the line,” Raimondo said on Tuesday, according to Reuters. TSMC is the world’s leading maker of semiconductors for the auto industry.
The US also plans to increase its own manufacturing capacity and reduce dependence on China and Taiwan, the commerce secretary said, according to Bloomberg. She touted President Joe Biden’s proposal for a $50 billion fund for semiconductor manufacturing. Automakers are pushing for some of the money to be set aside for chips in for the auto industry. They warn of a potential loss of production of 1.3 million cars and light trucks in the US this year if their industry is not given priority. nib
Car Industry
Chips
Semiconductor
Technology
TSMC
USA
China correspondents nominated for the Nannen Prize
Working as a China correspondent was not easy, even in the past. The People’s Republic has always been at the bottom of the press freedom rankings. But the work of foreign journalists in the Middle Kingdom has never been as difficult as it was in the past pandemic year. They were hindered in their research, their interlocutors intimidated and put under pressure, foreign reporters had to be quarantined several times for weeks on end for reasons that are no longer comprehensible. It was made difficult for them to enter and leave the country, their relatives were not allowed to enter at all. And even when research trips within the country were officially allowed again, they were persecuted and monitored by state security.
The fact that they have continued to report so extensively and knowledgeably from the authoritarian-ruled country despite these massively difficult circumstances has persuaded the jury of the Nannen Prize, chaired by Ulrich Wickert, to nominate the China correspondents of the Frankfurter Allgemeine Zeitung, Süddeutsche Zeitung, and the weekly newspaper Die Zeit for the prestigious Nannen Prize in the newly created category “Republic”.
“Outstanding foreign reporting conveys a deep understanding of societies and cultures and acts as a journalistic corrective to ideologically motivated distorted images,” it says in the justification. Despite this, or precisely because of it, the work of foreign correspondents is becoming increasingly difficult and obstructed. And hardly anywhere is this as clear as in China. And further: “The fearless work of Friederike Böge, Lea Deuber, and Xifan Yang in China is representative of the courage and tenacity of correspondents worldwide.”flee
Rocket debris threatens to crash on to Earth
A 20-ton piece of Chinese Long March rocket wreckage is about to make an uncontrolled re-entry back into Earth’s atmosphere in the coming days. It is unclear where and when the rocket debris will crash. The rocket was launched into space a few days ago to initiate the construction of the Chinese space station “Tiangong – Heavenly Palace” (China.Table reported).
While much of the debriswillburn up upon re-entry into Earth’s atmosphere, enough fragments could remain to cause damage, the SCMP reports. However, it is more likelythat the pieces will crash onto uninhabited land or into the sea, according to the SpaceNews trade portal. Last year, debris from another Chinese Long March rocket fell on villages in the Ivory Coast, damaging several houses.
The design of the rocket is said to be the cause of the uncontrolled re-entry. The main part is not controllable and cannot be maneuvered into a trajectory, which is considered a basic condition for a controlled crash. The rockets of other countries are more advanced in this matter, he said. Further launches of the same type of rocket are planned for the construction of the space station. nib
Pollution
Sustainability
Tiangong
Port in Darwin: Australia fears for national security
The Australian government is considering terminating a lease with a Chinese port operator in Darwin, northern Australia. Out of concern for national security, the Department of Defence wants to examine whether the Chinese Landbridge Group should be stripped of its rights of use. This is based on the 2020 reformed Foreign Investment Act. In 2015, the oil and logistics company secured the rights of use for a period of 99 years for just under $400 million.
In addition to its commercial use, the port at Darwin is also a base for Australian and US naval forces. Landbridge only has access to the commercial part of the site and requires permission from the local authorities for naval visits by third countries. The deal between the company and the Northern Territory government was struck without consulting the Americans, which angered the US government in Washington at the time. According to its own information, the Northern Territory government had previously courted Canberra in vain for three decades to invest in the port area until the Chinese company stepped into the breach.
Termination of the contract would cost the Australian governmentdearly. On the one hand, compensation payments would be due to Landbridge, and on the other, the state would risk a downgrading of its credit rating, which could scare off foreign investors. The Australian government’s deliberations at this point in time are also the result of increasing tensions with Beijing. Over the past year, the People’s Republic of China imposed import bans and high tariffs against numerous Australian products, such as meat or wine, after Canberra launched anti-dumping investigations against Chinese companies in early 2020 and called for an independent investigation of the COVID outbreak in Wuhan shortly afterwards. grz
Military
Huarong can service Debts
China’s state-owned asset manager Huarong assured its investors that it would be able to repay its debts. Xu Yongli, vice president and board secretary of Huarong told the business daily Shanghai Securities News that the recent downgrades by international rating agencies “have no factual basis” and criticized them “as too pessimistic.” Agencies Moody’s and Fitch had downgraded the company’s credit rating last week. It was unclear whether Huarong enjoyed the full support of the government, he said.
A government bailout may be necessary as the company’s situation remains serious. It ran into financial trouble in March and unexpectedly delayed the release of its financial statements. Investors then dumped bonds issued by Huarong. In the next move, the company’s stock also slid. According to business portal Caixin, the Ministry of Finance in Beijing is the asset manager’s largest shareholder. State institutions had recently prepared to come to the company’s rescue. The asset manager has $22.9 billion in foreign bonds outstanding and must repay $3.7 billion of them to investors this year. Now the company is switching to appeasement. “Huarong is actively working with auditors to release 2020 financial results as soon as possible,” Xu told Xinhua news agency.
The payment problems have a dramatic history. Huarong’s former board chairman Lai Xiaomin was sentenced to death for corruption earlier this year. Between 2008 and 2018, Lai allegedly took bribes worth the equivalent of about €225 million. The sentence against Lai is considered one of the harshest handed down by a Chinese court in recent times for white-collar crimes. niw
Chinese Communist Party
Finance
Profile
Genia Kostka
Director of the Institute for Chinese Studies at Freie Universität Berlin
One could almost think that the Chinese policy is in the hands of one family at Berlin’s universities. Genia Kostka has headed the Institute of Chinese Studies at Freie Universität since 2020, while her wife Sarah Eaton is a professor on the same topic at Humboldt Universität. Whenever the 42-year-old gets stuck in her research on China’s technology policy, she has a sparring wife.
Genia Kostka describes her path into China research as accidental. When she was 17, the Chemnitz native was determined to do her Abitur abroad. Her first choice would have been Canada, but the exchange organization sent her to Hong Kong. “Today, I’d rather choose that any day,” Kostka says. In 1996 she set off, fell in love with the country and the people.
At the time, Genia Kostka was still thinking about working in some international organization “because it sounded sexy”. But when she started working as a consultant at McKinsey after completing her master’s degree in economics at Johns Hopkins University in Baltimore, it became clear to her that there was no way around China, “for better or for worse”. She earned her PhD from Oxford in 2009, conducted research in China, and became a fellow at Tsinghua University in Beijing. In 2017, she began specializing in China’s environmental policy at Freie Universität Berlin. The many technical solutions to environmental issues, such as scannable garbage bags and pollution reporting apps, brought her to her new field of research.
Germany can learn a lot about digital technologies and their advantages and disadvantages in China, says Kostka. Because a lot of things happen faster there than in bureaucratic Germany. Of course, the technology is also used for surveillance and must be viewed critically. “Nevertheless, one should not simply condemn everything, but learn from it.”
For example, this is the Chinese version COVID app. While we are still debating, the app in China has long had a QR code for vaccinated people to access public places. “It would help the economy if we introduce that too,” says Genia Kostka. The recent studies she did on the topic showed that for it to work, the technology has to be effective first and foremost, and people have to see their personal benefits in it. Germany could also learn from the negative example of China when it comes to the lack of transparency of technologies.
At the moment Kostka is working on a database about digital projects in China’s local governments. Unfortunately, without interviews in the country. Kostka is concerned about the academic “decoupling” that is taking place and making it difficult for foreign researchers. “I’d like to go back to help prevent the situation from becoming even more difficult,” she says. Maybe then with her four children, too. They’ve never been there before. Marita Wehlus
Apps
Decoupling
Environment
Sustainability
Technology
Executive Moves
Translation missing.
Dessert
Something sweet for dessert! COVID is considered over, the May travel wave is rolling in China, and at the Yungang Caves in northern China, a tourist holds up his ice cream on a stick. It’s amazing how the ice cream artist has recreated the caves faithfully.
