CDU: China check + Data Protection Act + Sinovac + Decoupling + VW + WHO mission
CDU: the China candidate check
Tech sectors to drive growth in 2021
New Data Protection Act
Suspicion over Sinovac vaccine
Limits of decoupling
China saves VW sales balance
WHO mission without Germans
Heads: Alexander Goerlach
Dear reader,
Tonight, the super election year 2021 starts with the digital CDU party conference in Berlin – on thousands of monitors. 1001 delegates will virtually elect a new party leader on Saturday morning. The candidates Friedrich Merz, Armin Laschet and Norbert Roettgen have already made clear that China is not a marginal topic for them. China.Table is subjecting them to a candidate check before the election.
What do the Chinese think about data protection? They are increasingly sensitized about it, observes Frank Sieren in Beijing. He spoke with lawyers about the new Data Protection Act, which in detail is very similar to European regulations.
China’s vaccine manufacturer Sinovac is having trouble explaining itself. Researchers have doubts about the efficacy of the anti-Covid drug, which is to be used as a vaccine mainly in emerging countries. Now the resentment of the population in Brazil and Pakistan is growing, as Finn Mayer-Kuckuk reports.
Gregor Koppenburg and Joern Petring have taken a closer look at the Chinese government’s next five-year plan. Their findings: China wants to make a technological leap and offers new opportunities for investors. European entrepreneurs in China are barely noticing the recently much discussed decoupling. Amelie Richter has the details of the study by the Merics Institute and the EU Chamber of Commerce in China.
Your Antje Sirleschtov
Feature
CDU: the China candidate check
Armin Laschet, Friedrich Merz, Norbert Roettgen
When it comes to the CDU’s attitude toward China, observers of the ruling party like to speak of the eternal yin and yang, a perpetual struggle between rejection and dissociation from the authoritarian state power in Beijing, on the one hand, and the will to cooperate with the emerging economic power, on the other.
People like to remember November 2019, when the CDU met for the Leipzig party conference. The public focus at the time was the Huawei question: Should Germany go along with the American demand and exclude the Chinese network supplier from the construction of the 5G network? “All providers under the influence of undemocratic states should be excluded,” was the core sentence of a motion by the implacable party around foreign policy expert Norbert Roettgen, which was supposed to decide the China issue once and for all and almost led to a severe clash between the domestic and human rights policy wing of the party and the economic policy experts – and even to a rift with the party’s own chancellor. In the end, partly due to the active intervention of Angela Merkel, who feared such a ban, the delegates finally agreed on a watered-down formula that would not mean an exclusion of the Chinese but a demand for compliance with a safety catalog for all those who want to help build the 5G network. This could be called a pragmatic compromise. For many in the CDU, however, it felt more like a band-aid, a makeshift seal over an open wound. The conflict persists to this day. And if Friedrich Merz is to be believed (“The relationship with China is the top transatlantic issue.”), then, in the coming years, the CDU will have to deal even more intensively with the question: What to do about China?
Roettgen: too much consideration for economic interests
If Norbert Roettgen heads the CDU and is then possibly the CDU/CSU’s candidate for chancellor, inner-party economic policymakers can brace themselves for tougher times ahead. “Germany must understand that China is more than just a big marketplace,“ foreign policy expert Roettgen tweeted recently, making no secret of the fact that he thinks the CAI concluded between China and the EU shortly before US President Joe Biden took officeis a mistake. Because it is “inconceivable” to him that the EU would conclude a treaty implicitly accepting forced labor in China. But above all, because he is counting on a revival of the Europeans’ transatlantic relationship with the Americans and sees the conclusion of the agreement shortly before Biden’s inauguration as a disruptive factor.
For Roettgen, the focus is on security policy issues, the stability of the international world order, and compliance with multilateral rules. In his view, violations of the law, such as the Chinese government’s security law in Hong Kong, endanger stability and security, are an expression of the Communist Party’s striving for power in Beijing, and “ultimately contradict Germany’s political and economic interests.” When Beijing enacted the security law, Roettgen sharply criticized the German government for protesting too quietly against it. He said too much consideration was given to economic interests, and in his view, the law was a “weapon against democracy”.
But is Roettgen striving for isolation? Not at all. From his point of view, it is about clear stances and a common position of the Europeans, who, in his opinion, play off their national economic interests against each other far too often.In a letter co-initiated by him, around 70 members of national parliaments and the EU Parliament called on their heads of state and government to take a united and courageous stand against the behavior of the People’s Republic. Reputational costs instead of economic sanctions or economic decoupling –this is how Norbert Roettgen’s plan for dealing with China could be described. Because China is concerned about its international image, its government is also vulnerable here, which is why the Western world must denounce violations of the law more loudly and clearly.
Friedrich Merz: more sovereignty for Europeans
Friedrich Merz is as much a foreign policy expert as an economic politician. When it comes to democracy, openness and freedom, Europe is clearly on the side ofthe US, he said recently in an interview with the Neue Zuercher Zeitung. At the same time, Germany and China are too dependent on each other as trading nations for Germany to make “an opposing decision for one or against the other”. For Merz, one of the most important questions in the coming years is thus how Germany can succeed in asserting its interests in an increasingly economically interdependent world. And for him, the key to this clearly lies in Europe. In his book “Neue Zeit. Neue Verantwortung” (New time. New responsibility), Merz writes that Europe will no longer be able to avoid the question of its own sovereignty. Sovereignty is meant in a comprehensive sense, in terms of foreign and security policy as well as technology and economic policy. The dependencies that the large economic areas of Europe, the United States and China have entered into in recent decades are mutual, but the European Union is usually in a weaker position, in terms of security policy vis-à-vis the United States and economically vis-à-vis China.
Friedrich Merz speaks of a “consistent China strategy,” by which he means a clear common stance by the West on questions of international law as well as a common line on economic interdependence by the Europeans. Merz warns that dependence on China must not go too far. The Covid pandemic had recently shown that this led to bottlenecks in the supply of medicines in the pharmaceutical sector, for example.
Armin Laschet: pragmatic weighing of interests
Concerning China, Armin Laschet is probably the candidate for CDU leader and possible chancellor closest to Angela Merkel’s pragmatic credo of “change through trade”. When China’s Ambassador Wu Ken met North Rhine-Westphalia’s Prime Minister Laschet for his inaugural visit to Dusseldorf in the autumn of 2019, his state chancellery noted that the “partners” had discussed economic, scientific, and cultural exchanges and that the common pursuit centered on solving global challenges, such as in climate policy. However, little was said about human rights violations, China’s authoritarian appearance on the world stage, or the dispute over the crisisin Hong Kong.
Now it is necessary to know: Armin Laschet governs Little China in Germany, to an extent. In no other federal state do more Chinese live and study, and are there more Chinese companies and German companies with Chinese holdings than in North Rhine-Westphalia. In the internal party dispute about the participation of the Chinese company Huawei in the 5G network expansion, Armin Laschet is clearly on the side of the economic policy pragmatists. The consequence of exclusion, he argues, would be setbacks in the expansion of the important network – and Germany could not afford that. Especially since the country has clear interests in free global trade and the German economy lives on exports, including to China. Huawei’s German headquarters, by the way, is in Dusseldorf. Nico Beckert/Antje Sirleschtov
CDU
Deutschland
Federal election
Geopolitics
Technologies to drive growth in 2021
When the Beijing statistics office officially reports on gross domestic product (GDP) growth for the past year next Monday at 10 a.m., breaking news will go around the world just seconds later. In all likelihood, the reports will please the Chinese leadership. If what the International Monetary Fund (IMF) predicts in its latest forecast occurs, China’s economy will have grown by 1.9 percent in 2020.
This result is worse than the previous years. However, China would still be the only major economy with positive growth in the Covid chaos year. According to one forecast, the People’s Republic, which used autocratic tools to get to grips with Covid more quickly than large parts of the West, will now replace the USA as the largest economy even earlier than expected, namely as early as 2028.
It’s a remarkable comeback story. As recently as the spring of 2020, the Financial Times expected a so-called “Chernobyl moment”. As with the then-Soviet nuclear reactor, the disaster would bring China’s political system and the Chinese Communist Party to its demise. Instead, as with the 2008 financial crisis, China’s recovering economy became a stabilizer of the global economy.
IMF: possible GDP increase of 7.9 percent
Most analysts believe 2021 will continue just like 2020 ended. “The swift recovery of our economy will help the global economy even more than it did during the financial crisis,” Chinese economist Wang Huiyao is convinced. Admittedly, there are smaller Covid outbreaks in China again. Overall, however, the situation is under control, which is the most important prerequisite for a continuation of the recovery. The IMF predicts a healthy growth rate of 7.9 percent for 2021.
The new five-year plan, which will be adopted by the Beijing People’s Congress on March 5, is expected to provide new impetus. The plan starts where China has suffered the greatest setbacks in recent years. The US trade and technology war with China has made it painfully aware of its dependence on foreign countries. According to initial communications from the Communist Party’s ruling elite on the new plan, a new economic course is now to be embarked upon, described by the catchphrase “two cycles“.
The strategy of state and party leaderXi Jinping is to promote “internal circulation,” i.e., domestic demand and own innovation. China wants to become more independent from the US and the rest of the world. The “external circulation” – Trade and foreign investment – are supposed to support this main engine.
The plan is not dissimilar to the “indigenous innovation” policy introduced in 2006 and, above all, to the “Made in China 2025” policy of 2015. Although the grandiose rhetoric of China’s “technological leadership” has been scaled back considerably, investment and research cooperation with other countries remain key priorities and offer opportunities for German companies.
Internet industry at the heart of growth
According to an analysis by US investment firm Pimco, investors should keep a close eye on sectors related to technology, infrastructure, advanced manufacturing, and renewable energy. The education and healthcare sectors can also benefit from government support.
“Technology is at the center of the five-year plan as China aims to be less dependent on semiconductor imports and technology,” Pimco analysts write. Automakers with a strong focus on EVs and EV battery makers would thus be among the big winners. However, closing the gap with the US in computer chips could prove difficult. Pimco believes the sector could face further headwinds in the short term. Further US restrictions and sanctions cannot be ruled out under US President Joe Biden.
A sure winner in the coming years, however, is China’s Internet industry, it said. Despite the stricter data protection regulation Beijing is currently working on, Internet companies are “key beneficiaries under the new economic framework,” it said. Online circulation has unexpectedly accelerated due to Covid-19, especially in services such as fresh food delivery, online education, and healthcare, it said.
Significant investments in areas such as cloud, big data, artificial intelligence and smart manufacturing will play a more significant role as the Chinese government expands its industrial activities into higher value-added manufacturing, Pimco said. Gregor Koppenburg/Joern Petring
As Chinese pharmaceutical manufacturer Sinovac ramps up the output of its Covid vaccine to one billion doses per year, doubts are mounting about the validity of the published efficacy data. Last week, the Brazilian Butantan Institute was still talking about a protective effect of 78 percent; before Christmas, there was talk of it “generating an immune response in 97 percent of cases.” This week it had to retract that figure to a disappointing 50.4 percent. Meanwhile, Sinovac points out that further continuation of the studies is necessary to obtain clear values.
The Butantan Institute in São Paulo has taken on the main burden of the testing that the Sinovac vaccine has to undergo. It is a prestigious institution with long experience in immunology. Sinovac Biotech, in turn, has positioned itself as a major vaccine supplier to emerging markets. The Beijing-based company’s active ingredient is already being injected in Indonesia. Other major customers include the Philippines, Turkey, and Brazil. The drug is generally considered safe and was effective in all studies in that the test subjects developed antibodies against Sars-CoV-2.
In contrast to the usual calculation of efficacy rates, the researchers of the Butantan Institute distinguished between different severe courses of the Covid disease and certified efficacy when the substance already prevents the worst. The 78 percent referred to the protective effect against moderate and severe courses. Nevertheless, the institute now admittedthat mild courses of the disease had occurred in the vaccinated group. Including these, the effectiveness was only 50.4 percent, the researchers said at a press conference. Only this figure can be compared with the values published by companies such as Biontech, Moderna, and AstraZeneca. Here, every registered infection counts, regardless of whether the symptoms are strong or weak. Biontech and Moderna come to about 95 percent, and AstraZeneca reaches 70 percent.
The effectiveness rate determines whether a vaccine can stop the pandemic. After all, even those who have a mild course can still pass on the pathogen. In the end, however, not only those vaccinated should be protected from severe symptoms, but the chains of infection should ideally end completely. It is still unclear whether symptomless courses also occur under Biontech vaccination protection. Given the overall high protective effect, however, this is considered unlikely.
Indonesia continues using Sinovac vaccines
Indonesia and other buyer countries don’t want to change their plans because even a vaccine with only 50 percent efficacy makes a huge difference in a pandemic.
The Sinovac vaccine differs significantly in its mode of action from those currently used in the West. Biontech, Moderna and AstraZeneca use genetic engineering to produce virus molecules in body cells. Sinovac, on the other hand, has taken a traditional route. The company breeds Covid viruses and takes away their ability to replicate. That means less high-tech and is more about the active principle of the first vaccines that came on the market in the last century.
With the contradictory data from the Butantan Institute, there are now four widely divergent efficacy values. Turkey reports 91.25 percent in its own study, Indonesia came to 65.30 percent. However, the decimal places here suggest an accuracy neither study could achieve at all. They only tested the Sinovac product on about 1500 people each. The head of the company, Yin Weidong, defended his product: The low efficacy rate in the Brazilian study was because there was medical personnel among the test subjects. However, it was not clear why this should distort the values. On the contrary, the efficacy rate can be determined particularly accurately where many infections occur.
The conflicting claims are now contributing to some distrust of the Chinese product. In Indonesia, the vaccination campaign began Wednesday with a live broadcast of a shot for President Joko Widodo. But the theory that the vaccine contains products from pigs and is therefore unacceptable is already spreading among the predominantly Muslim population, according to the AP news agency.
Brazilian President Jair Bolsonaro had already declared in his typical populist style, “We’re not buying it from China, that’s my decision.” The country is now accepting a shipment from China after all – but only 10.8 million Sinovac doses for a population of 200 million people. In a poll conducted by the polling institute Datafolha, half of the respondents now said they would reject the Chinese vaccine. The Bloomberg news agency also quoted citizens of Pakistan who are uneasy about the drug.
China has three major vaccine manufacturers. Besides Sinovac, these are Sinopharm and CanSino Biologics. The government in Beijing is currently scoring points in emerging markets with unbureaucratic vaccine deliveries.
In Europe, the dominant perception is that the Chinese have little interest in data protection and that information about it is withheld from them because of censorship. The understanding of data protection is actually less developed in China than in the West. “But if you leave it at that, you run the risk of overlooking the concerns of the Chinese population,” says Matthias Schroeder of the Beijing law firm Ding, Schroeder & Partner.
In a study conducted by the Beijing-based Nandu Personal Information Protection Research Centre on the topic in China in 2019, 30 percent of respondents said they had already been victims of data misuse, for example, by having their phone numbers, addresses and bank details shared or even sold without their knowledge. And as many as half of those surveyed were concerned that they could be victimized by companies. Schroeder says that the Chinese’s biggest concern is not so much data misuse by the state but by companies.
Because of the growing discontent among the population, it was already decided to expand the data protection law in December 2017 at a meeting of the Politburo. In September 2018, the law was put on the list of legislative projects to be drafted. A draft law has since been available. The Personal Information Protection Law (PIPL) follows the Cybersecurity Law of 2017 and the E-Commerce Law of 2019.
What is particularly astonishing is that the Chinese draft law resembles the European Data Protection Act in every detail. One would actually assume that Beijing would develop its own law with its own priorities out of national pride. But pragmatism has won out under time pressure.
Making consumption safer
The development in this area is comparable to that of environmental protection: At first, people in China wanted to earn money above all else. Then, as prosperity grew, so did awareness of the disadvantages of the boom. Problems such as smog or contaminated groundwater became more and more of a concern. Appropriate laws were passed. With the rapid progress of future technologies such as facial recognition or artificial intelligence, their (data protection) risks are now also coming into focus.
The government must now make consumption safer while maintaining openness to new technologies among the population. This cannot be done without the trust of the people. This is also evidenced by the fact that the new law was put up for public discussion before it was passed. It is a practice that Beijing first tried in 2008 with the Labor Contract Law and found that citizens, academics, lawyers, and business experts provided much useful input. To be sure, unlike in the West, the Chinese state can hardly be forced to act on the suggestions. But the days when the Chinese government could rule completely over the heads of its citizens are over.
Thus, in the spirit of the EU data protection law, the Chinese version also makes it clear that personal data belongs to the data owner. And both regulations balance two goals: protecting individuals’ data with punitive measures while allowing for the orderly movement of data in the economy. Both laws also require that the data owner must consent before their data can be used.
However, there is an important difference between Chinese law and the European text: The Chinese state reserves the right to collect data it deems crucial for maintaining public security, protecting the health and property of natural persons, as well as for public opinion monitoring in the public interest. “This is a very broad, poorly defined field,” says Schroeder.
New obligations for companies
In Europe, too, governments balance data protection and security needs differently. Compared to Germany, in the UK, the need for protection against terrorism is more pronounced than the desire for data protection. This is why Londonhas a top ranking worldwide (3rd place) regarding the number of surveillance cameras, while thetop ten places are otherwise exclusively held by Chinese cities.
In China, the scales tilt much more strongly towards security. The state is taking advantage of that. “We should certainly not be under any illusion here. Through this law, the state does not become a democratic constitutional state as we know it,” Schröder says. He said it is written in such a way that the state can continue to govern as it wishes. “And it wants to collect, store and analyze a lot of data, both to know the mood in the country and to control the behavior of its citizens and to be able to make propaganda with it.” The law itself, however, does not give the state more possibilities than it had before but tends to give it fewer, and creates a justification pressure that did not exist before, says Schroeder.
German companies must now adapt to the new requirements. As in European law, they must set up a security department that monitors risks, analyses data security, and reports to the authorities. Any data transfer out of China must be approved in advance. “It wouldn’t be a surprise if Chinese regulators follow the same path as in the European data protection law,” says Gil Zhang, a lawyer in Shanghai at Fangda Partners, one of China’s major law firms. In short, for consumers’ rights vis-à-vis companies, the law is a big step forward. And for the rights of citizens vis-à-vis the state, it’s not a step backward. However, more steps in this direction would be appreciated.
Artificial intelligence
Big data
Data protection
E-commerce
Technology
Limits of decoupling
In the spring of 2020, when protective masks could hardly be bought in any pharmacy in France, rumors circulated that the delivery from China intended for the French had been bought up directly on the tarmac by another country. French politicians were outraged; France had ordered a billion masks from the People’s Republic – which were urgently needed. Head of State Emmanuel Macron made an ambitious announcement not only concerning the supply bottlenecks: Important goods must once again be able to be produced in one’s own country – and not only concerning the fight against the pandemic. France’s and Europe’s independence must be restored and dependence on global – and above all Chinese – supply chains reduced, Macron said. That was well received politically.
The coronavirus has made the disadvantages of globalizationmore visible than ever before. But it is rapidly becoming clear that despite all the political assurances, neither Europeans nor Americans will get rid of their dependence on Chinese supply chains in the short term. Despite Covid, or perhaps because of it, the US recorded its highest trade deficit with China in 14 years last November. The same trend in the EU: In the first ten months of 2020, the EU deficit with China rose by 3.5 percent.
EU economy not worried about decoupling
However, European businesses are apparently not very worried about this at the moment, as a study presented on Thursdayby the EU Chamber of Commerce in China and the Berlin-based Merics Institute shows, in which members of the Chamber of Commerce were surveyed in autumn 2020. Only 11 percent said they are highly exposed to the issue of decoupling. Most respondents (48 percent) are only exposed to decoupling trends to a “moderate” degree, and 37 percent to a “low” degree. However, smaller companies are hit harder by this than corporate groups.
“Contrary to what has almost become the consensus in Washington, there is still a strong conviction in Europe that decoupling from China is not the way forward,” the authors summarize the study. The public debate about this has only “limited influence on everyday economic life.” Policy demands, such as Germany’s recent Indo-Pacific guidelines, “remain at a rhetorical level.” While there are many problems, it said, the European economy as a whole is not moving away from China; rather, “many European companies have the desire to invest more in China.” Most European companies would “expand locally and further develop their supply chains,” the authors said.
“Organising globalization in such a way that everything is done where production is most efficient – that’s over,” said Joerg Wuttke, Chairman of the EU Chamber of Commerce in China, at the beginning of last year, at the start of the Covid crisis. The fact that the US business magazine Forbes even sees the virus as China’s “swan song” as the world’s largest and most cost-effective producer turned out to be more of a pious hope.
Relocation from China means cost increase
The reasons for this are obvious. The worse the economic times are, the more customers pay attention to the price and thus production takes place where it is cheapest. If production is relocated in this situation to reduce dependence on supplies from China, then it is not relocated back to Germany but to another emerging countryin Asia, such as Bangladesh or Vietnam.
The new Asian free trade zone RCEP opens the way. The dependence on China may decrease as a result, but the complexity of the supply chains may even increase. The study could no longer consider this issue because it was conducted before the agreement was reached. However, there are limits to even this trend of diversifying supply chains. Because Beijing’s maxim is: If you want to sell in China, you also have to produce in China. And European manufacturers need the Chinese sales market more than ever in the Covid crisis.
One way to change the situation would be to price the environmental costs of products manufactured in China more strongly. For example, the environmental pollution of ships or the costs of bringing production in China up to the same environmental standard as in Germany. This would increase the chances of producing more in one’s own region at reasonable prices. But this is hardly politically feasible in times of crisis. Because in practice, it means that the products become more expensive.
This is probably one of the reasons why France’s President Macron did not even make progress on the issue of masks last year. If you buy protective masks in Parisian pharmacies at the moment, the first thing you see is a piece of paper with the words “Made in China” printed on it. Frank Sieren/Amelie Richter
Coronavirus
Decoupling
EU
Health
RCEP
Supply chains
Trade
News
WHO mission without Germans
The international team of experts investigating the sources of the coronaviruson behalf of the World Health Organization (WHO) arrived in China on Thursday – without German participation, as the Robert Koch Institute RKI confirmed on request. The only German participant, the epidemiologist Fabian Leendertz, had to cancel at short notice for family reasons, the RKI said. The RKI did not provide a substitute.
After months of persuading the Chinese government and negotiating the conditions under which research can be carried out, the international experts of the WHO team are now working with Chinese scientists to find the source of Covid-19. Details of the research process could not be obtained from the Chinese health commission.
Leendertz from the RKI sees the WHO mission as politically charged. The RKI epidemiologistwas originally supposed to travel to China with a team of ten at the beginning of January. Whether the team of experts will be able to collect data at all and what quality it will have, is an open question in Leendertz’s opinion. For the WHO, it is “primarily a matter ofplanning the phase 2 studies,” in which the focus is on geographical focal points, animal species to be considered, and scientific approaches that will be used to draw up plans for global tracking of origin.
The WHO team is expected to return shortly before the Chinese New Year on Feb. 12. Clear findings from the trip are also not expected because, after the outbreak, Chinese authorities promptly closed and thoroughly disinfected the wildlife market in Wuhan, which is believed to be the source of the virus. “Unfortunately, no one can say when data will be available,” Leendertz told China.Table. “It may be years before we understand how the transmission took place.”
WHO findings are hardly expected
Beijing has delayed the WHO mission several times in recent weeks. Just yesterday, two scientists were delayed as they tried traveling to Wuhan from Singapore. Both tested positive for IgM antibodies, which could indicate that they were recently infected. Last week, WHO experts were denied entry because of visa issues.
WHO Director-General Tedros Adhanom Ghebreyesus criticized this surprisingly sharp a week ago: “I am very disappointed by the news, as two members had already started their journey and others were unable to travel at the last minute.” So far, the WHO chief has held back from open criticism of China.
Very early on, Beijing doubted that the virus originated in China. Rather, high-ranking officials have been stressing incessantly for months that there have been previous cases of infection in other countries as well. China’s Foreign Minister, Wang Yi, in particular, persists in saying that the pandemic began in several places around the world.
The fact that “patient zero” in Europe may have been infected with Sars-CoV-2 as early as November 2019, as a British trade journal recently reported, is partly seen in Chinese social media as confirmation that outgoing US President Donald Trump was just trying to polarize with his “China virus” label. niw
Coronavirus
Health
Wang Yi
WHO
China saves VW sales balance
In the past year of Covid, China has also become a lifeline for Volkswagen. VW sold around 3.85 million cars of the various group brands in mainland China and Hong Kong in 2020, with about 9.1 percent fewer vehicles than in 2019. But this decline was far more lenient than elsewhere: Globally, VW was down 15.2 percent, while in Western Europe, it was down as much as 23.4 percent.
International car manufacturers benefit from the fact that China’s economy has been recovering from the effects of the Covid pandemic since early summer. While all car sales outlets had died out or closed in the winter and spring, the car market surprisingly recorded a plus again in May 2020; 95 percent of dealers had reopened their doors. Although this did not ensure positive annual growth due to the dramatic slumps of the winter, it at least mitigated the fall: China’s passenger car market fell by only six percent for 2020 as a whole.
This figure is slightly glossed over by the fact that the baseline figures for recent years have also been low. Since 2018, fewer cars – including commercial vehicles – have been sold in China every year. The removal of financial incentives to buy cars, restrictions on cars in many cities, destocking at dealers, and economic uncertainty due to the trade dispute with the US made many people hesitate. And then came the pandemic. So the overall market is still smaller than in the already difficult year 2018.
VW is not the only one struggling with negative growth
Volkswagen is thus not alone in its struggle with negative growth. General Motors also had to report a decline of 6.1 percent. According to its own figures, VW remains the market leader, with a share of 19.3 percent. The group has increasingly relied on “a digital approach to marketing and the car-buying journey” and, among other things, made operational progress despite the difficult situation, said VW China boss Stephan Woellenstein. Local brands have also been focusing more on online sales since 2020.
Only the premium segment has developed positively since 2018. The momentum from the summer of 2020 was thus even strong enough to give the traditionally strong German premium brands positive annual growth in China. BMW/MINI and Daimler were in a neck-and-neck race for first place with around 775,000 cars – thanks to increases of 7.4 and 12 percent respectively. Worldwide, both groups were also writing red numbers.
Also popular were cars from Audi. The VW subsidiary sold 727,000 cars last year, 5.4 percent more than in 2019.
China is becoming an increasingly important sales market for German carmakers. Daimler, for example, sold every third model of the Mercedes-Benz brand in the People’s Republic. China is also the world’s most important market for VW’s sports car subsidiary Porsche – ahead of Germany. ck
BMW
Car Industry
Stephan Wöllenstein
VW
Heads
Alexander Goerlach
Senior Fellow at the Carnegie Council for Ethics in International Affairs
Alexander Goerlach is a jack of all trades. The former journalist and founding editor of the debate magazine “The European” has devoted himself to science for several years. Goerlach, who holds two doctorates in Catholic theology and linguistics, has been in and out of Harvard and Cambridge. His field of research: the future of liberal democracy. Inevitably, he thus also began to look more closely at China, as well as Taiwan and Hong Kong. A stay in 2017/18 took Goerlach to the National Taiwan University and the City University of Hong Kong.
In September 2020, Alexander Goerlach published the book “Focus on Hong Kong: Why the future of the free world will be decided in China”. Another book comparing democratic Taiwan and the autocratic People’s Republic of China is already planned. The 43-year-old is particularly fond of Taiwan. “If you ever travel to such a young democracy, you experience many interesting things,” Goerlach tells us. From his point of view, a Taiwanese person has more in common with a German than with a mainland Chinese. “We are united by the same values, an order based on respect for Human Rights,” he says.
Alexander Goerlach: ‘China is acting hegemonically’
For AlexanderGoerlach, the future of the free world will be decided in China. Beijing “killed the democracy movement in Hong Kong” during the pandemic. Goerlach fears that President Xi Jinping will annex the independent neighboring country of Taiwan next. “China is acting hegemonically today,” Goerlach says worriedly. “Countries all over the world feel that.”
Germany should thus not back down, even if economic interests depended on the relationship with China. “There is no legal certainty for companies. This goes hand in hand with other violations of the law,” says Alexander Goerlach. Looking ahead to 2021, Goerlach predicts that Western European countries such as France and the United Kingdom will orient on Joe Bidens’ course in their relations with Chin and invoke a “human rights transatlantic consensus of values”.
Germany, however, could be on a special pathdespite all its agreement with Biden: “The Chinese market is extremely important for the German economy,” says Alexander Goerlach. He adds that there are also many similarities with the People’s Republic, from work ethics to the state as an actor that invests and gets involved in the economy. Something that is still viewed with skepticism in the US today. “But due to the massive human rights violations in the country, you can’t have a normal policy with China right now,” says Goerlach.
His interest in developments in China will also take him back to the region in the future. Alexander Goerlach is keen to return to Taiwan but not to Hong Kong. “I can’t go back there after the many articles I’ve written on China’s actions in Hong Kong,” he says. Constantin Eckner
Tonight, the super election year 2021 starts with the digital CDU party conference in Berlin – on thousands of monitors. 1001 delegates will virtually elect a new party leader on Saturday morning. The candidates Friedrich Merz, Armin Laschet and Norbert Roettgen have already made clear that China is not a marginal topic for them. China.Table is subjecting them to a candidate check before the election.
What do the Chinese think about data protection? They are increasingly sensitized about it, observes Frank Sieren in Beijing. He spoke with lawyers about the new Data Protection Act, which in detail is very similar to European regulations.
China’s vaccine manufacturer Sinovac is having trouble explaining itself. Researchers have doubts about the efficacy of the anti-Covid drug, which is to be used as a vaccine mainly in emerging countries. Now the resentment of the population in Brazil and Pakistan is growing, as Finn Mayer-Kuckuk reports.
Gregor Koppenburg and Joern Petring have taken a closer look at the Chinese government’s next five-year plan. Their findings: China wants to make a technological leap and offers new opportunities for investors. European entrepreneurs in China are barely noticing the recently much discussed decoupling. Amelie Richter has the details of the study by the Merics Institute and the EU Chamber of Commerce in China.
Your Antje Sirleschtov
Feature
CDU: the China candidate check
Armin Laschet, Friedrich Merz, Norbert Roettgen
When it comes to the CDU’s attitude toward China, observers of the ruling party like to speak of the eternal yin and yang, a perpetual struggle between rejection and dissociation from the authoritarian state power in Beijing, on the one hand, and the will to cooperate with the emerging economic power, on the other.
People like to remember November 2019, when the CDU met for the Leipzig party conference. The public focus at the time was the Huawei question: Should Germany go along with the American demand and exclude the Chinese network supplier from the construction of the 5G network? “All providers under the influence of undemocratic states should be excluded,” was the core sentence of a motion by the implacable party around foreign policy expert Norbert Roettgen, which was supposed to decide the China issue once and for all and almost led to a severe clash between the domestic and human rights policy wing of the party and the economic policy experts – and even to a rift with the party’s own chancellor. In the end, partly due to the active intervention of Angela Merkel, who feared such a ban, the delegates finally agreed on a watered-down formula that would not mean an exclusion of the Chinese but a demand for compliance with a safety catalog for all those who want to help build the 5G network. This could be called a pragmatic compromise. For many in the CDU, however, it felt more like a band-aid, a makeshift seal over an open wound. The conflict persists to this day. And if Friedrich Merz is to be believed (“The relationship with China is the top transatlantic issue.”), then, in the coming years, the CDU will have to deal even more intensively with the question: What to do about China?
Roettgen: too much consideration for economic interests
If Norbert Roettgen heads the CDU and is then possibly the CDU/CSU’s candidate for chancellor, inner-party economic policymakers can brace themselves for tougher times ahead. “Germany must understand that China is more than just a big marketplace,“ foreign policy expert Roettgen tweeted recently, making no secret of the fact that he thinks the CAI concluded between China and the EU shortly before US President Joe Biden took officeis a mistake. Because it is “inconceivable” to him that the EU would conclude a treaty implicitly accepting forced labor in China. But above all, because he is counting on a revival of the Europeans’ transatlantic relationship with the Americans and sees the conclusion of the agreement shortly before Biden’s inauguration as a disruptive factor.
For Roettgen, the focus is on security policy issues, the stability of the international world order, and compliance with multilateral rules. In his view, violations of the law, such as the Chinese government’s security law in Hong Kong, endanger stability and security, are an expression of the Communist Party’s striving for power in Beijing, and “ultimately contradict Germany’s political and economic interests.” When Beijing enacted the security law, Roettgen sharply criticized the German government for protesting too quietly against it. He said too much consideration was given to economic interests, and in his view, the law was a “weapon against democracy”.
But is Roettgen striving for isolation? Not at all. From his point of view, it is about clear stances and a common position of the Europeans, who, in his opinion, play off their national economic interests against each other far too often.In a letter co-initiated by him, around 70 members of national parliaments and the EU Parliament called on their heads of state and government to take a united and courageous stand against the behavior of the People’s Republic. Reputational costs instead of economic sanctions or economic decoupling –this is how Norbert Roettgen’s plan for dealing with China could be described. Because China is concerned about its international image, its government is also vulnerable here, which is why the Western world must denounce violations of the law more loudly and clearly.
Friedrich Merz: more sovereignty for Europeans
Friedrich Merz is as much a foreign policy expert as an economic politician. When it comes to democracy, openness and freedom, Europe is clearly on the side ofthe US, he said recently in an interview with the Neue Zuercher Zeitung. At the same time, Germany and China are too dependent on each other as trading nations for Germany to make “an opposing decision for one or against the other”. For Merz, one of the most important questions in the coming years is thus how Germany can succeed in asserting its interests in an increasingly economically interdependent world. And for him, the key to this clearly lies in Europe. In his book “Neue Zeit. Neue Verantwortung” (New time. New responsibility), Merz writes that Europe will no longer be able to avoid the question of its own sovereignty. Sovereignty is meant in a comprehensive sense, in terms of foreign and security policy as well as technology and economic policy. The dependencies that the large economic areas of Europe, the United States and China have entered into in recent decades are mutual, but the European Union is usually in a weaker position, in terms of security policy vis-à-vis the United States and economically vis-à-vis China.
Friedrich Merz speaks of a “consistent China strategy,” by which he means a clear common stance by the West on questions of international law as well as a common line on economic interdependence by the Europeans. Merz warns that dependence on China must not go too far. The Covid pandemic had recently shown that this led to bottlenecks in the supply of medicines in the pharmaceutical sector, for example.
Armin Laschet: pragmatic weighing of interests
Concerning China, Armin Laschet is probably the candidate for CDU leader and possible chancellor closest to Angela Merkel’s pragmatic credo of “change through trade”. When China’s Ambassador Wu Ken met North Rhine-Westphalia’s Prime Minister Laschet for his inaugural visit to Dusseldorf in the autumn of 2019, his state chancellery noted that the “partners” had discussed economic, scientific, and cultural exchanges and that the common pursuit centered on solving global challenges, such as in climate policy. However, little was said about human rights violations, China’s authoritarian appearance on the world stage, or the dispute over the crisisin Hong Kong.
Now it is necessary to know: Armin Laschet governs Little China in Germany, to an extent. In no other federal state do more Chinese live and study, and are there more Chinese companies and German companies with Chinese holdings than in North Rhine-Westphalia. In the internal party dispute about the participation of the Chinese company Huawei in the 5G network expansion, Armin Laschet is clearly on the side of the economic policy pragmatists. The consequence of exclusion, he argues, would be setbacks in the expansion of the important network – and Germany could not afford that. Especially since the country has clear interests in free global trade and the German economy lives on exports, including to China. Huawei’s German headquarters, by the way, is in Dusseldorf. Nico Beckert/Antje Sirleschtov
CDU
Deutschland
Federal election
Geopolitics
Technologies to drive growth in 2021
When the Beijing statistics office officially reports on gross domestic product (GDP) growth for the past year next Monday at 10 a.m., breaking news will go around the world just seconds later. In all likelihood, the reports will please the Chinese leadership. If what the International Monetary Fund (IMF) predicts in its latest forecast occurs, China’s economy will have grown by 1.9 percent in 2020.
This result is worse than the previous years. However, China would still be the only major economy with positive growth in the Covid chaos year. According to one forecast, the People’s Republic, which used autocratic tools to get to grips with Covid more quickly than large parts of the West, will now replace the USA as the largest economy even earlier than expected, namely as early as 2028.
It’s a remarkable comeback story. As recently as the spring of 2020, the Financial Times expected a so-called “Chernobyl moment”. As with the then-Soviet nuclear reactor, the disaster would bring China’s political system and the Chinese Communist Party to its demise. Instead, as with the 2008 financial crisis, China’s recovering economy became a stabilizer of the global economy.
IMF: possible GDP increase of 7.9 percent
Most analysts believe 2021 will continue just like 2020 ended. “The swift recovery of our economy will help the global economy even more than it did during the financial crisis,” Chinese economist Wang Huiyao is convinced. Admittedly, there are smaller Covid outbreaks in China again. Overall, however, the situation is under control, which is the most important prerequisite for a continuation of the recovery. The IMF predicts a healthy growth rate of 7.9 percent for 2021.
The new five-year plan, which will be adopted by the Beijing People’s Congress on March 5, is expected to provide new impetus. The plan starts where China has suffered the greatest setbacks in recent years. The US trade and technology war with China has made it painfully aware of its dependence on foreign countries. According to initial communications from the Communist Party’s ruling elite on the new plan, a new economic course is now to be embarked upon, described by the catchphrase “two cycles“.
The strategy of state and party leaderXi Jinping is to promote “internal circulation,” i.e., domestic demand and own innovation. China wants to become more independent from the US and the rest of the world. The “external circulation” – Trade and foreign investment – are supposed to support this main engine.
The plan is not dissimilar to the “indigenous innovation” policy introduced in 2006 and, above all, to the “Made in China 2025” policy of 2015. Although the grandiose rhetoric of China’s “technological leadership” has been scaled back considerably, investment and research cooperation with other countries remain key priorities and offer opportunities for German companies.
Internet industry at the heart of growth
According to an analysis by US investment firm Pimco, investors should keep a close eye on sectors related to technology, infrastructure, advanced manufacturing, and renewable energy. The education and healthcare sectors can also benefit from government support.
“Technology is at the center of the five-year plan as China aims to be less dependent on semiconductor imports and technology,” Pimco analysts write. Automakers with a strong focus on EVs and EV battery makers would thus be among the big winners. However, closing the gap with the US in computer chips could prove difficult. Pimco believes the sector could face further headwinds in the short term. Further US restrictions and sanctions cannot be ruled out under US President Joe Biden.
A sure winner in the coming years, however, is China’s Internet industry, it said. Despite the stricter data protection regulation Beijing is currently working on, Internet companies are “key beneficiaries under the new economic framework,” it said. Online circulation has unexpectedly accelerated due to Covid-19, especially in services such as fresh food delivery, online education, and healthcare, it said.
Significant investments in areas such as cloud, big data, artificial intelligence and smart manufacturing will play a more significant role as the Chinese government expands its industrial activities into higher value-added manufacturing, Pimco said. Gregor Koppenburg/Joern Petring
As Chinese pharmaceutical manufacturer Sinovac ramps up the output of its Covid vaccine to one billion doses per year, doubts are mounting about the validity of the published efficacy data. Last week, the Brazilian Butantan Institute was still talking about a protective effect of 78 percent; before Christmas, there was talk of it “generating an immune response in 97 percent of cases.” This week it had to retract that figure to a disappointing 50.4 percent. Meanwhile, Sinovac points out that further continuation of the studies is necessary to obtain clear values.
The Butantan Institute in São Paulo has taken on the main burden of the testing that the Sinovac vaccine has to undergo. It is a prestigious institution with long experience in immunology. Sinovac Biotech, in turn, has positioned itself as a major vaccine supplier to emerging markets. The Beijing-based company’s active ingredient is already being injected in Indonesia. Other major customers include the Philippines, Turkey, and Brazil. The drug is generally considered safe and was effective in all studies in that the test subjects developed antibodies against Sars-CoV-2.
In contrast to the usual calculation of efficacy rates, the researchers of the Butantan Institute distinguished between different severe courses of the Covid disease and certified efficacy when the substance already prevents the worst. The 78 percent referred to the protective effect against moderate and severe courses. Nevertheless, the institute now admittedthat mild courses of the disease had occurred in the vaccinated group. Including these, the effectiveness was only 50.4 percent, the researchers said at a press conference. Only this figure can be compared with the values published by companies such as Biontech, Moderna, and AstraZeneca. Here, every registered infection counts, regardless of whether the symptoms are strong or weak. Biontech and Moderna come to about 95 percent, and AstraZeneca reaches 70 percent.
The effectiveness rate determines whether a vaccine can stop the pandemic. After all, even those who have a mild course can still pass on the pathogen. In the end, however, not only those vaccinated should be protected from severe symptoms, but the chains of infection should ideally end completely. It is still unclear whether symptomless courses also occur under Biontech vaccination protection. Given the overall high protective effect, however, this is considered unlikely.
Indonesia continues using Sinovac vaccines
Indonesia and other buyer countries don’t want to change their plans because even a vaccine with only 50 percent efficacy makes a huge difference in a pandemic.
The Sinovac vaccine differs significantly in its mode of action from those currently used in the West. Biontech, Moderna and AstraZeneca use genetic engineering to produce virus molecules in body cells. Sinovac, on the other hand, has taken a traditional route. The company breeds Covid viruses and takes away their ability to replicate. That means less high-tech and is more about the active principle of the first vaccines that came on the market in the last century.
With the contradictory data from the Butantan Institute, there are now four widely divergent efficacy values. Turkey reports 91.25 percent in its own study, Indonesia came to 65.30 percent. However, the decimal places here suggest an accuracy neither study could achieve at all. They only tested the Sinovac product on about 1500 people each. The head of the company, Yin Weidong, defended his product: The low efficacy rate in the Brazilian study was because there was medical personnel among the test subjects. However, it was not clear why this should distort the values. On the contrary, the efficacy rate can be determined particularly accurately where many infections occur.
The conflicting claims are now contributing to some distrust of the Chinese product. In Indonesia, the vaccination campaign began Wednesday with a live broadcast of a shot for President Joko Widodo. But the theory that the vaccine contains products from pigs and is therefore unacceptable is already spreading among the predominantly Muslim population, according to the AP news agency.
Brazilian President Jair Bolsonaro had already declared in his typical populist style, “We’re not buying it from China, that’s my decision.” The country is now accepting a shipment from China after all – but only 10.8 million Sinovac doses for a population of 200 million people. In a poll conducted by the polling institute Datafolha, half of the respondents now said they would reject the Chinese vaccine. The Bloomberg news agency also quoted citizens of Pakistan who are uneasy about the drug.
China has three major vaccine manufacturers. Besides Sinovac, these are Sinopharm and CanSino Biologics. The government in Beijing is currently scoring points in emerging markets with unbureaucratic vaccine deliveries.
In Europe, the dominant perception is that the Chinese have little interest in data protection and that information about it is withheld from them because of censorship. The understanding of data protection is actually less developed in China than in the West. “But if you leave it at that, you run the risk of overlooking the concerns of the Chinese population,” says Matthias Schroeder of the Beijing law firm Ding, Schroeder & Partner.
In a study conducted by the Beijing-based Nandu Personal Information Protection Research Centre on the topic in China in 2019, 30 percent of respondents said they had already been victims of data misuse, for example, by having their phone numbers, addresses and bank details shared or even sold without their knowledge. And as many as half of those surveyed were concerned that they could be victimized by companies. Schroeder says that the Chinese’s biggest concern is not so much data misuse by the state but by companies.
Because of the growing discontent among the population, it was already decided to expand the data protection law in December 2017 at a meeting of the Politburo. In September 2018, the law was put on the list of legislative projects to be drafted. A draft law has since been available. The Personal Information Protection Law (PIPL) follows the Cybersecurity Law of 2017 and the E-Commerce Law of 2019.
What is particularly astonishing is that the Chinese draft law resembles the European Data Protection Act in every detail. One would actually assume that Beijing would develop its own law with its own priorities out of national pride. But pragmatism has won out under time pressure.
Making consumption safer
The development in this area is comparable to that of environmental protection: At first, people in China wanted to earn money above all else. Then, as prosperity grew, so did awareness of the disadvantages of the boom. Problems such as smog or contaminated groundwater became more and more of a concern. Appropriate laws were passed. With the rapid progress of future technologies such as facial recognition or artificial intelligence, their (data protection) risks are now also coming into focus.
The government must now make consumption safer while maintaining openness to new technologies among the population. This cannot be done without the trust of the people. This is also evidenced by the fact that the new law was put up for public discussion before it was passed. It is a practice that Beijing first tried in 2008 with the Labor Contract Law and found that citizens, academics, lawyers, and business experts provided much useful input. To be sure, unlike in the West, the Chinese state can hardly be forced to act on the suggestions. But the days when the Chinese government could rule completely over the heads of its citizens are over.
Thus, in the spirit of the EU data protection law, the Chinese version also makes it clear that personal data belongs to the data owner. And both regulations balance two goals: protecting individuals’ data with punitive measures while allowing for the orderly movement of data in the economy. Both laws also require that the data owner must consent before their data can be used.
However, there is an important difference between Chinese law and the European text: The Chinese state reserves the right to collect data it deems crucial for maintaining public security, protecting the health and property of natural persons, as well as for public opinion monitoring in the public interest. “This is a very broad, poorly defined field,” says Schroeder.
New obligations for companies
In Europe, too, governments balance data protection and security needs differently. Compared to Germany, in the UK, the need for protection against terrorism is more pronounced than the desire for data protection. This is why Londonhas a top ranking worldwide (3rd place) regarding the number of surveillance cameras, while thetop ten places are otherwise exclusively held by Chinese cities.
In China, the scales tilt much more strongly towards security. The state is taking advantage of that. “We should certainly not be under any illusion here. Through this law, the state does not become a democratic constitutional state as we know it,” Schröder says. He said it is written in such a way that the state can continue to govern as it wishes. “And it wants to collect, store and analyze a lot of data, both to know the mood in the country and to control the behavior of its citizens and to be able to make propaganda with it.” The law itself, however, does not give the state more possibilities than it had before but tends to give it fewer, and creates a justification pressure that did not exist before, says Schroeder.
German companies must now adapt to the new requirements. As in European law, they must set up a security department that monitors risks, analyses data security, and reports to the authorities. Any data transfer out of China must be approved in advance. “It wouldn’t be a surprise if Chinese regulators follow the same path as in the European data protection law,” says Gil Zhang, a lawyer in Shanghai at Fangda Partners, one of China’s major law firms. In short, for consumers’ rights vis-à-vis companies, the law is a big step forward. And for the rights of citizens vis-à-vis the state, it’s not a step backward. However, more steps in this direction would be appreciated.
Artificial intelligence
Big data
Data protection
E-commerce
Technology
Limits of decoupling
In the spring of 2020, when protective masks could hardly be bought in any pharmacy in France, rumors circulated that the delivery from China intended for the French had been bought up directly on the tarmac by another country. French politicians were outraged; France had ordered a billion masks from the People’s Republic – which were urgently needed. Head of State Emmanuel Macron made an ambitious announcement not only concerning the supply bottlenecks: Important goods must once again be able to be produced in one’s own country – and not only concerning the fight against the pandemic. France’s and Europe’s independence must be restored and dependence on global – and above all Chinese – supply chains reduced, Macron said. That was well received politically.
The coronavirus has made the disadvantages of globalizationmore visible than ever before. But it is rapidly becoming clear that despite all the political assurances, neither Europeans nor Americans will get rid of their dependence on Chinese supply chains in the short term. Despite Covid, or perhaps because of it, the US recorded its highest trade deficit with China in 14 years last November. The same trend in the EU: In the first ten months of 2020, the EU deficit with China rose by 3.5 percent.
EU economy not worried about decoupling
However, European businesses are apparently not very worried about this at the moment, as a study presented on Thursdayby the EU Chamber of Commerce in China and the Berlin-based Merics Institute shows, in which members of the Chamber of Commerce were surveyed in autumn 2020. Only 11 percent said they are highly exposed to the issue of decoupling. Most respondents (48 percent) are only exposed to decoupling trends to a “moderate” degree, and 37 percent to a “low” degree. However, smaller companies are hit harder by this than corporate groups.
“Contrary to what has almost become the consensus in Washington, there is still a strong conviction in Europe that decoupling from China is not the way forward,” the authors summarize the study. The public debate about this has only “limited influence on everyday economic life.” Policy demands, such as Germany’s recent Indo-Pacific guidelines, “remain at a rhetorical level.” While there are many problems, it said, the European economy as a whole is not moving away from China; rather, “many European companies have the desire to invest more in China.” Most European companies would “expand locally and further develop their supply chains,” the authors said.
“Organising globalization in such a way that everything is done where production is most efficient – that’s over,” said Joerg Wuttke, Chairman of the EU Chamber of Commerce in China, at the beginning of last year, at the start of the Covid crisis. The fact that the US business magazine Forbes even sees the virus as China’s “swan song” as the world’s largest and most cost-effective producer turned out to be more of a pious hope.
Relocation from China means cost increase
The reasons for this are obvious. The worse the economic times are, the more customers pay attention to the price and thus production takes place where it is cheapest. If production is relocated in this situation to reduce dependence on supplies from China, then it is not relocated back to Germany but to another emerging countryin Asia, such as Bangladesh or Vietnam.
The new Asian free trade zone RCEP opens the way. The dependence on China may decrease as a result, but the complexity of the supply chains may even increase. The study could no longer consider this issue because it was conducted before the agreement was reached. However, there are limits to even this trend of diversifying supply chains. Because Beijing’s maxim is: If you want to sell in China, you also have to produce in China. And European manufacturers need the Chinese sales market more than ever in the Covid crisis.
One way to change the situation would be to price the environmental costs of products manufactured in China more strongly. For example, the environmental pollution of ships or the costs of bringing production in China up to the same environmental standard as in Germany. This would increase the chances of producing more in one’s own region at reasonable prices. But this is hardly politically feasible in times of crisis. Because in practice, it means that the products become more expensive.
This is probably one of the reasons why France’s President Macron did not even make progress on the issue of masks last year. If you buy protective masks in Parisian pharmacies at the moment, the first thing you see is a piece of paper with the words “Made in China” printed on it. Frank Sieren/Amelie Richter
Coronavirus
Decoupling
EU
Health
RCEP
Supply chains
Trade
News
WHO mission without Germans
The international team of experts investigating the sources of the coronaviruson behalf of the World Health Organization (WHO) arrived in China on Thursday – without German participation, as the Robert Koch Institute RKI confirmed on request. The only German participant, the epidemiologist Fabian Leendertz, had to cancel at short notice for family reasons, the RKI said. The RKI did not provide a substitute.
After months of persuading the Chinese government and negotiating the conditions under which research can be carried out, the international experts of the WHO team are now working with Chinese scientists to find the source of Covid-19. Details of the research process could not be obtained from the Chinese health commission.
Leendertz from the RKI sees the WHO mission as politically charged. The RKI epidemiologistwas originally supposed to travel to China with a team of ten at the beginning of January. Whether the team of experts will be able to collect data at all and what quality it will have, is an open question in Leendertz’s opinion. For the WHO, it is “primarily a matter ofplanning the phase 2 studies,” in which the focus is on geographical focal points, animal species to be considered, and scientific approaches that will be used to draw up plans for global tracking of origin.
The WHO team is expected to return shortly before the Chinese New Year on Feb. 12. Clear findings from the trip are also not expected because, after the outbreak, Chinese authorities promptly closed and thoroughly disinfected the wildlife market in Wuhan, which is believed to be the source of the virus. “Unfortunately, no one can say when data will be available,” Leendertz told China.Table. “It may be years before we understand how the transmission took place.”
WHO findings are hardly expected
Beijing has delayed the WHO mission several times in recent weeks. Just yesterday, two scientists were delayed as they tried traveling to Wuhan from Singapore. Both tested positive for IgM antibodies, which could indicate that they were recently infected. Last week, WHO experts were denied entry because of visa issues.
WHO Director-General Tedros Adhanom Ghebreyesus criticized this surprisingly sharp a week ago: “I am very disappointed by the news, as two members had already started their journey and others were unable to travel at the last minute.” So far, the WHO chief has held back from open criticism of China.
Very early on, Beijing doubted that the virus originated in China. Rather, high-ranking officials have been stressing incessantly for months that there have been previous cases of infection in other countries as well. China’s Foreign Minister, Wang Yi, in particular, persists in saying that the pandemic began in several places around the world.
The fact that “patient zero” in Europe may have been infected with Sars-CoV-2 as early as November 2019, as a British trade journal recently reported, is partly seen in Chinese social media as confirmation that outgoing US President Donald Trump was just trying to polarize with his “China virus” label. niw
Coronavirus
Health
Wang Yi
WHO
China saves VW sales balance
In the past year of Covid, China has also become a lifeline for Volkswagen. VW sold around 3.85 million cars of the various group brands in mainland China and Hong Kong in 2020, with about 9.1 percent fewer vehicles than in 2019. But this decline was far more lenient than elsewhere: Globally, VW was down 15.2 percent, while in Western Europe, it was down as much as 23.4 percent.
International car manufacturers benefit from the fact that China’s economy has been recovering from the effects of the Covid pandemic since early summer. While all car sales outlets had died out or closed in the winter and spring, the car market surprisingly recorded a plus again in May 2020; 95 percent of dealers had reopened their doors. Although this did not ensure positive annual growth due to the dramatic slumps of the winter, it at least mitigated the fall: China’s passenger car market fell by only six percent for 2020 as a whole.
This figure is slightly glossed over by the fact that the baseline figures for recent years have also been low. Since 2018, fewer cars – including commercial vehicles – have been sold in China every year. The removal of financial incentives to buy cars, restrictions on cars in many cities, destocking at dealers, and economic uncertainty due to the trade dispute with the US made many people hesitate. And then came the pandemic. So the overall market is still smaller than in the already difficult year 2018.
VW is not the only one struggling with negative growth
Volkswagen is thus not alone in its struggle with negative growth. General Motors also had to report a decline of 6.1 percent. According to its own figures, VW remains the market leader, with a share of 19.3 percent. The group has increasingly relied on “a digital approach to marketing and the car-buying journey” and, among other things, made operational progress despite the difficult situation, said VW China boss Stephan Woellenstein. Local brands have also been focusing more on online sales since 2020.
Only the premium segment has developed positively since 2018. The momentum from the summer of 2020 was thus even strong enough to give the traditionally strong German premium brands positive annual growth in China. BMW/MINI and Daimler were in a neck-and-neck race for first place with around 775,000 cars – thanks to increases of 7.4 and 12 percent respectively. Worldwide, both groups were also writing red numbers.
Also popular were cars from Audi. The VW subsidiary sold 727,000 cars last year, 5.4 percent more than in 2019.
China is becoming an increasingly important sales market for German carmakers. Daimler, for example, sold every third model of the Mercedes-Benz brand in the People’s Republic. China is also the world’s most important market for VW’s sports car subsidiary Porsche – ahead of Germany. ck
BMW
Car Industry
Stephan Wöllenstein
VW
Heads
Alexander Goerlach
Senior Fellow at the Carnegie Council for Ethics in International Affairs
Alexander Goerlach is a jack of all trades. The former journalist and founding editor of the debate magazine “The European” has devoted himself to science for several years. Goerlach, who holds two doctorates in Catholic theology and linguistics, has been in and out of Harvard and Cambridge. His field of research: the future of liberal democracy. Inevitably, he thus also began to look more closely at China, as well as Taiwan and Hong Kong. A stay in 2017/18 took Goerlach to the National Taiwan University and the City University of Hong Kong.
In September 2020, Alexander Goerlach published the book “Focus on Hong Kong: Why the future of the free world will be decided in China”. Another book comparing democratic Taiwan and the autocratic People’s Republic of China is already planned. The 43-year-old is particularly fond of Taiwan. “If you ever travel to such a young democracy, you experience many interesting things,” Goerlach tells us. From his point of view, a Taiwanese person has more in common with a German than with a mainland Chinese. “We are united by the same values, an order based on respect for Human Rights,” he says.
Alexander Goerlach: ‘China is acting hegemonically’
For AlexanderGoerlach, the future of the free world will be decided in China. Beijing “killed the democracy movement in Hong Kong” during the pandemic. Goerlach fears that President Xi Jinping will annex the independent neighboring country of Taiwan next. “China is acting hegemonically today,” Goerlach says worriedly. “Countries all over the world feel that.”
Germany should thus not back down, even if economic interests depended on the relationship with China. “There is no legal certainty for companies. This goes hand in hand with other violations of the law,” says Alexander Goerlach. Looking ahead to 2021, Goerlach predicts that Western European countries such as France and the United Kingdom will orient on Joe Bidens’ course in their relations with Chin and invoke a “human rights transatlantic consensus of values”.
Germany, however, could be on a special pathdespite all its agreement with Biden: “The Chinese market is extremely important for the German economy,” says Alexander Goerlach. He adds that there are also many similarities with the People’s Republic, from work ethics to the state as an actor that invests and gets involved in the economy. Something that is still viewed with skepticism in the US today. “But due to the massive human rights violations in the country, you can’t have a normal policy with China right now,” says Goerlach.
His interest in developments in China will also take him back to the region in the future. Alexander Goerlach is keen to return to Taiwan but not to Hong Kong. “I can’t go back there after the many articles I’ve written on China’s actions in Hong Kong,” he says. Constantin Eckner
