Table.Briefing: China (English)

Chancellor’s trip ends – Scholz is satisfied despite limited results

Editorial

Dear reader,

This trip to China led back to the future. Olaf Scholz’s trip with a large business delegation could have been from the era of every German chancellor since the late 1990s, when German business with China was booming, without any self-doubt or suspicions. And we have seen the fishing for concessions regarding Russia’s war against Ukraine during the Chancellor’s trip in 2022. However, China’s support for Russia has not changed substantially since then.

It shows: The time of the China illusion is not over yet. China appeases European politicians with pretty words and tiny concessions. In Beijing, they are told exactly what they want to hear. But China has changed under Xi Jinping. Instead of becoming part of the Western-dominated world order, it wants to shake it up and reshape it.

This is why parts of the German government and the Federation of German Industries (BDI) also urge the country to de-risk. However, Scholz’s visit showed little sign of this. Xi insisted that everything was fine with his country’s high exports.

Michael Radunski analyzes word for word what is known about what Xi Jinping said to Olaf Scholz. We also provide an overview of what the other ministers in the delegation had to discuss in Beijing: Cem Oezdemir negotiated meat imports, Steffi Lemke the circular economy, and Volker Wissing autonomous driving standards.

And then there was Jens Spahn. The politician from the conservative Christian Democratic Union (CDU) happened to be in China at the same time as Scholz, and yet he managed to somewhat steal the show from the Chancellor.

Your
Finn Mayer-Kuckuk
Image of Finn  Mayer-Kuckuk

Feature

Xi makes minimal concessions – Scholz seems satisfied

The talks between Scholz and Xi took longer than initially planned. Here in front of the teahouse in the garden of the official guest house called the “Hall of Ten Thousand Willows.”

Although Xi Jinping has only minimally changed his stance on Russia and Ukraine, German Chancellor Olaf Scholz has already drawn considerable hope from this. He identified growing common ground with China: “We agreed: China and Germany want to support and encourage efforts to achieve peace in Ukraine,” said Scholz in Beijing on Tuesday. Both sides were willing to “coordinate intensively and positively” on a potential peace conference in Switzerland.

The Chancellor spoke with the Chinese head of state and party leader for over three hours in Beijing on Tuesday. Xi praised the excellent Chinese-German relations, which “goes beyond the bilateral scope, and has a major impact on the Eurasian continent and the entire world.”

Xi dodges with vague formulations

A closer look at Xi’s words regarding Russia-Ukraine shows that both sides continue to see things very differently, including the peace conference. China still tends to side with Russia. The “peace” that China has repeatedly called for would have considerable advantages for Russia in this form.

The Chinese President’s reaction shows that this is unlikely to change. Xi explained to Scholz which role the People’s Republic plays in his opinion: China is not a party or a participant in the Ukraine crisis. Instead, Xi named four vague principles to avoid further escalation:

  • Focusing on the overall interest of peace and stability rather than seeking selfish gains,
  • cooling down the situation rather than adding fuel to the fire,
  • accumulating conditions for restoring peace rather than further aggravating tensions,
  • and reducing the negative impact on the world economy rather than undermining the stability of global industrial and supply chains.

With this, Xi is trying to blame the “Ukraine crisis” not on Russia (overall interest), but rather on the USA and the West (selfish gains and oil on the fire). In contrast, according to Xi, China has always “promoted the peace talks in its own way.” In other words, Russia is not the aggressor and the West is somehow to blame for the war. Presenting these points to Scholz in such a way could also be interpreted as impertinence, not as a concession.

At the very least, Xi promised that China would support an international peace conference-”in due course” and only if both Ukraine and Russia participated. Switzerland currently plans such a conference, to which it is also inviting pro-Russian states. However, Russian President Vladimir Putin has already rejected the initiative and was not even invited.

Scholz had announced much

The meager results contradict Scholz’s announcements. Before the talks with Xi, Scholz said he would speak frankly with China’s President. “The Russian war of aggression in Ukraine and Russia’s armament have a very significant negative impact on security in Europe.”

During the talks, he then asked Xi “to influence Russia so that Putin finally calls off his senseless campaign, withdraws his troops and ends this terrible war.” Scholz warned of damage to the “entire international order.” The war and Russia’s armament violated “a principle of the United Nations Charter, the principle of the inviolability of state borders.” China is Russia’s closest ally. Only a few days ago, the United States accused Beijing and several companies of supporting the Russian war machine.

Xi: looking at relations strategically and in the long term

Overall, China’s President had many kind words for his guest from Berlin. “The two countries do not have clashing fundamental interests between them and pose no security threat to each other. Cooperation between China and Germany benefits not just the two sides but also the world at large.” Relations should be viewed “from a long-term and strategic perspective.”

Xi’s words are the expected charm offensive toward the German Chancellor. Beijing sees Germany as having a key role in an increasingly critical environment, from the United States, Canada, and the United Kingdom to Japan, South Korea, and Australia. Beijing also counts on the Federal Chancellor in Germany. Scholz is expected to balance out the critical stance of Foreign Minister Baerbock and Economy Minister Habeck and thus ensure a China-friendly policy in Germany.

Wang Yi on the phone with Iran and Saudi Arabia

The Middle East conflict also came up in Beijing on Tuesday. China’s Foreign Minister Wang Yi spoke on the phone with his Iranian counterpart Hossein Amir-Abdollahian. The latter promised that Iran was willing to exercise restraint, adding that Iran had only acted in self-defense to the attack on the Iranian embassy in Syria. According to Xinhua, Wang said that China condemned the attack on the Iranian embassy in the strongest possible terms – as for Iran’s current attack on Israel, he only said that it was a consequence of the conflict in Gaza.

In a second phone call, Wang agreed to work closely with Saudi Arabian Foreign Minister Faisal bin Farhan bin Abdullah to avoid further escalation of the confrontation. According to Xinhua, Saudi Arabia expects China to play an active and important role in this regard.

Xi warns against protectionism in Europe

Xi warned Scholz against economic protectionism: Germany and China depended on industry and supported free trade, Xi said at the meeting with the Chancellor, according to Chinese sources. “It is important for the two countries to stay vigilant against the rise of protectionism,” he said. According to the Chinese readout after the meeting, Germany rejects protectionism (德国反对保护主义,支持自由贸易). “As an important member of the EU, Germany is willing to play an active role in promoting the good development of EU-China relations,” Scholz said.

Cooperation between Germany and China does not represent a risk, but is “a guarantee for a stable bilateral relationship.” Xi cited sectors such as mechanical engineering and the automotive industry as examples. He believes that Berlin and Beijing should also look at issues of production capacity from a market and global perspective based on the laws of economics.

Recently, the focus has been on the accusation that China was using state investment to ensure that Chinese companies were producing too much and damaging other markets with their cheap products. However, Beijing sees things differently: China’s exports of electric vehicles, lithium batteries and photovoltaic products have not only enriched global supply and alleviated global inflationary pressure, but also contributed greatly to the global response to climate change (中国电动汽车、锂电池、光伏产品等出口不仅丰富了全球供给、缓解了全球通胀压力,也为全球应对气候变化和绿色低碳转型做出了巨大贡献), Xi said, according to Chinese reports.

BMW and Mercedes see China as more of an opportunity than a risk

Meanwhile, Scholz advocated a rules-based trading system, as embodied by the World Trade Organisation (WTO): “Both China and Germany are trading nations that benefit greatly” from membership in the World Trade Organisation. “We are committed to strengthening the rules for global trade and developing them further together with the other WTO members.” Scholz said at a press conference in the evening that there was clearly a need to discuss the issue of overcapacity. “We need to talk about subsidy competition.” However, subsidies exist “everywhere in the world.” Scholz again emphasized the position of the WTO. He did not directly criticize Beijing’s economic policy. This clearly showed the differing tone of Berlin and Brussels.

The CEOs of the two German car manufacturers, BMW and Mercedes, warned of a trade dispute, for example, over Chinese EVs in Europe. “What we can’t afford as an export nation are increasing trade barriers,” Mercedes CEO Ole Kallenius told German public broadcaster ARD in Beijing regarding the EU investigation into whether Chinese EVs are distorting market competition.

Like BMW CEO Oliver Zipse, Kallenius described China as an opportunity rather than a risk. Referring to Scholz’s visit, Kallenius said that Sino-German economic relations should not only be cultivated, but also expanded. “Withdrawing from such a large market is not an alternative, but rather strengthening our position,” he said about the company’s strategy in China, the world’s second-largest economy. BMW already has a global presence, which is the best strategy for minimizing dependencies on one market, said the BMW CEO in response to political calls for diversification. He also voiced skepticism about EU investigations into Chinese EVs.

  • Economic policy
  • Geopolitics
  • Olaf Scholz
  • WTO
  • Xinhua

Three ministers negotiate norms and standards in Beijing

Die Delegation von Bundeskanzler Scholz mit Chinas Ministerpräsident Li Qiang und drei Bundesministern und ihren chinesischen Counterparts steht auf einer Treppe zum Porträt.
Chancellor Scholz’s delegation with China’s Premier Li Qiang and the three federal ministers (front left) Wissing, Oezdemir and Lemke in Beijing.

The unusually large contingent of three ministers almost resembled the format of the government consultations held every two years – and not a routine trip by the Federal Chancellor to China. However, Environment Minister Steffi Lemke, Agriculture Minister Cem Oezdemir (both Green Party), and Transport and Digital Minister Volker Wissing (FDP) did not hesitate to accompany Olaf Scholz to Beijing.

The line-up of government members once again underlined China’s importance – and that the government is well aware of this. The ministers all presented concerns from their respective ministries that require close coordination with China. They discussed data privacy in cars, swine fever and plastics recycling.

Wissing wants to learn from China’s autonomous driving system

When it comes to artificial intelligence and autonomous driving, international standards are inconceivable without China. The People’s Republic has already invested billions in both areas and is a world leader in autonomous driving. Minister of Transport and Digital Affairs Wissing and State Secretary for Economic Affairs Franziska Brantner (Greens) traveled to China to look closely at the trend. They agreed on a declaration of intent with the Chinese Minister for Industry and Information Technology, Jin Zhuanglong, on “cooperation in autonomous driving.” This shows that, unlike the US, for example, China continues to focus on cooperation in future technologies wherever possible.

“We are currently in a crucial development phase in which the aim is to bring the technology from the laboratories to the streets,” said Wissing in a statement. Like Chancellor Scholz before him, he emphasized that the key to this lies in fair competition and stressed the importance of common standards and norms. The joint declaration of intent is intended to contribute to this. Meanwhile, Brantner mentioned the increasingly restrictive data legislation in China, which in some cases places tight limits on cross-border data transfer in particular. She also reiterated the call for a level playing field, a recurring theme throughout the German visit.

Lemke seals circular economy action plan with NDRC leader

Federal Environment Minister Steffi Lemke also signed a joint action plan on “Circular Economy and Resource Efficiency” with the Chairman of the powerful Development and Reform Commission (NDRC), Zheng Shanjie, on Tuesday. The plan envisages a regular exchange on value chains of important materials, including plastics and metals. The aim is to achieve more efficient use of these materials in packaging, construction, and industry. According to a report by the German press agency dpa, particular focus will be placed on the automotive industry and the manufacture of batteries.

The action plan is part of the Sino-German climate and transformation dialogue agreed at the intergovernmental consultations in June 2023. However, the two countries have so far had different ideas about the circular economy. China tends to focus more on resource efficiency and productivity, while Europe prioritizes how product volumes can be reduced to conserve natural resources. The German side would also like to provide China with elements of the German National Circular Economy Strategy (NKWS), which the German government hopes to adopt by summer 2024.

Oezdemir represents the interests of German livestock farmers

Agriculture Minister Cem Oezdemir met his counterpart Tang Renjian on Tuesday. According to a post by his ministry on X, discussion topics included cooperation in the protection of global goods as a prerequisite for food security as well as market access for beef, apples, and veterinary medicines. Another topic was African swine fever.

The Ministry of Agriculture will provide more detailed information about Oezdemir’s meeting this Wednesday. In the run-up to the visit, Oezdemir was already expected to negotiate in Beijing about lifting the Chinese import ban on German pork, among other things. This is in the interests of livestock farmers, who used to export large quantities to China, where pork consumption has increased in recent years. Like other countries, China had suspended imports in 2021 due to African Swine Fever (ASF). However, South Korea had already resumed trade in May 2023. This could mean that Beijing’s continued ban could also have political reasons. Collaboration: Nicolas Heronymus

  • Cem Özdemir
  • De-risking
  • Geopolitik
  • Volker Wissing

Sinolytics.Radar

Public opinion in ASEAN countries shifts for the first time

Dieser Inhalt ist Lizenznehmern unserer Vollversion vorbehalten.
  • When asked to pick a side between China and the US, ASEAN public opinion pivoted towards China for the first time since 2020. ​
  • Major sentiment shifts were observed in Indonesia, Laos and Malaysia, where support for China increased by 20-30 percentage points. The Philippines moved against the trend, where support for the US increased by 4.5 percentage points. ​
  • Indonesia, Laos and Malaysia are major beneficiaries of China’s Belt and Road Initiative. Indonesia and Malaysia, both Muslim-majority countries, also saw rising anti-American sentiments due to perceived US support for Israel in the Israel-Hamas war.​
  • The Philippines and Vietnam, which are on the front lines of territorial disputes with China, maintained strong support for the US. In 2023, the US and the Philippines updated their mutual defense treaty and expanded defense cooperation agreements. Vietnam upgraded its bilateral relations with the US and entered into a maritime cooperation agreement with the Philippines in January 2024. ​
  • With the US facing an election year in 2024, ASEAN’s confidence in the US as a reliable partner declined significantly. 47.2 percent of respondents were confident in the US in 2023, while only 34.9 percent still are in 2024. ​
  • Despite the pivot, more than half of ASEAN respondents still reported concerns about China’s ever-growing economic, political and strategic influence.
  • In addition, only 8 percent of respondents believe that ASEAN has to pick a side, while the overwhelming majority of 92 percent prefer some sort of neutral position or balancing option. ​

Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.

  • Geopolitik

News

Human rights remain a side note

German Chancellor Olaf Scholz has received harsh backlash for giving human rights virtually no space during his trip to China. The Tibet Initiative Germany accused Chancellor Olaf Scholz of sending a fatal signal to Beijing – that despite the disastrous development of its human rights record, the Chinese government can expect “at best only mild criticism.” Scholz even did worse than his predecessor Angela Merkel, “who at least always met with victims of Chinese tyranny.”

Human Rights Watch Germany had hoped that Scholz would not just “play second fiddle to Germany’s narrow-minded economic interests” and would instead “put German-Chinese relations on a footing that respects human rights.” grz

  • Human Rights Watch
  • Menschenrechte
  • Olaf Scholz
  • Tibet

Spahn calls for more assertive relations with China

Jens Spahn, deputy leader of the German CDU/CSU parliamentary group responsible for economic policy, has demanded a more assertive attitude towards China. If there is no progress in the reciprocity of conditions for the economy, “the German government cannot promote further German and European investments in China,” the CDU politician demanded on Tuesday. Given its current economic situation, China could have no interest in this, he added.

China benefits from economic cooperation, just like Germany. “But we have clear national interests: We will protect our national security. We are committed to fair, equal economic opportunities and we must strengthen our own competitiveness,” he demanded. At a recent Bundestag’s Economic Affairs Committee hearing, several China experts emphasized that Germany should not sell itself short.

Spahn spends several days in China in parallel with Federal Chancellor Olaf Scholz. The trip has been planned for months. He wants to talk to representatives from politics, business, the media and civil society and visit the harbor city of Qingdao as well as Beijing.

Meanwhile, Juergen Hardt, foreign policy spokesman for the CDU/CSU parliamentary group in the Bundestag, has called on the Chinese government to contribute to de-escalation in the Middle East. At the same time, the CDU politician praised the Chancellor for rightly traveling to China “and this time he also seems to have coordinated his trip with his closest allies.” Spahn, on the other hand, used his trip to criticize the chancellor across the board. “China is keeping a close eye on the German economic crisis. China takes us seriously because we are economically strong,” said Spahn. “The voice of a Chancellor loses weight in a downturn.” That is why Scholz can not be allowed to solely handle China policy, he said.

Spahn also spoke to a reporter from the China Media Group, making him one of the few top European politicians without fear of contact with Chinese propaganda media. In the interview, he emphasized Germany’s wish for good cooperation: “But we want it to be fair and open.” cyb/ck

  • De-risking
  • Economic policy
  • Olaf Scholz

Report: Xi travels to Belgrade for the 25th anniversary of embassy bombing

According to a media report, China’s Head of State will visit Serbia early next month. Xi Jinping is expected to arrive in Belgrade on May 8, the Serbian online platform Demostat reported on Tuesday. The exact dates of Xi’s trip to Europe have not yet been confirmed. During his stay in Serbia, the Chinese president will meet with his Serbian counterpart, Aleksandar Vučić, and other state officials. Vučić last met with Xi in October 2023 during the Belt and Road Forum in Beijing.

The date for Xi’s trip to Serbia was probably not picked by chance. The day marks the 25th anniversary of the night of May 7, 1999, when NATO bombed the Chinese embassy in Belgrade shortly before midnight, leaving three Chinese journalists dead and 21 people injured. The incident attracted international attention and criticism as it involved the embassy of a state not involved in the Kosovo conflict. NATO has consistently emphasized that it was an accident.

Xi will reportedly also travel to Paris and Budapest. China is celebrating 60 years of diplomatic relations with France this year. ari

  • Serbien

Growth exceeds expectations

The Chinese economy grew 5.3 percent in the first quarter of 2024, year-on-year. This is according to the National Bureau of Statistics in Beijing on Tuesday. This growth exceeded experts’ expectations; economists surveyed by Reuters had expected growth of 4.6 percent. Growth was thus slightly higher than in the previous quarter: Between October and December 2023, the Chinese economy grew by 5.2 percent. The software and IT sector grew remarkably strongly by 13.7 percent, which was significantly higher than the 11.2 percent growth in the previous quarter, according to analysts from the consulting agency Trivium China.

The figures should come as a relief to the Beijing government, which has been using various measures to stabilize the ailing economy for some time now. According to experts, however, the upturn was primarily driven by successful export business, while domestic demand continues to disappoint. The government aims for an overall economic growth of around five percent in 2024.

However, the International Monetary Fund (IMF) appeared unimpressed and maintained its forecast for the current year at 4.6 percent. The IMF pointed to the ongoing real estate crisis, which has worsened recently. Prices for new apartments dropped by 2.2 percent in March, the sharpest decline in more than eight years. rtr/cyb/ck

  • Immobilienkrise

BYD unveils first luxury cars

China’s largest car manufacturer, BYD, has unveiled its first two luxury models. According to Bloomberg, BYD presented the Super 3 and Bao 8 SUVs at its headquarters in Shenzhen on Tuesday evening in a glamorous, live-streamed event. It was unclear whether the new SUVs were hybrid or purely electric cars. In addition to the two new models, the car manufacturer also presented the Super 9 in Shenzhen, a concept for a high-performance racing car.

As recently as February, BYD announced that it would launch a series of high-end luxury models this year to capture a larger share of the premium car market. So far, BYD has mainly been known for its electric cars in the volume segment. The BYD presentation is the first in a series of expected premieres by the car brands ahead of the Beijing Auto Show from April 25 to May 4. ck

  • BYD
  • Car Industry

Heads

Jin Zhuanglong – open-minded space expert

China’s Minister of Industry and Information Jin Zhuanglong.

Germany and China intend to cooperate more closely on autonomous and connected driving. On the Chinese side, Jin Zhuanglong, Minister of Industry and Information Technology, signed a corresponding declaration of intent with German Transport Minister Volker Wissing, Federal Minister and State Secretary for Economic Affairs Franziska Brantner on Tuesday.

Jin Zhuanglong (金壮龙) is regarded as a technological authority in China. Until he was appointed Minister of Information in July 2022, he was primarily known as an aerospace specialist. It is not uncommon in China for engineers to also pursue a political career all the way to the top of the Communist Party, especially if they work in the state economy.

Just like Jin. From 2012 to 2017, he headed the Commercial Aircraft Corporation of China – Comac for short – China’s state-owned aircraft manufacturer as Chairman of the Board, Party Secretary and General Manager. In these positions, he promoted the development of the C919, the country’s first domestically developed passenger aircraft. When the aircraft embarked on its maiden flight in 2017, it was considered a new chapter in the global aviation market, and not just in the People’s Republic.

Born in 1964 in Zhoushan in Zhejiang province, Jin embarked on this path as soon as he started studying at the Shanghai Academy of Spaceflight Technology (SAST) in the 1980s, where he also earned his Master of Engineering in missile development and design. His PhD in industrial economics followed in 2003 at Fudan University, also in Shanghai. On the side, Jin attended training courses at the Central Party School in preparation for a political career. He had already joined the CCP in 1984 at the age of 20.

After a stint as Director of the Shanghai Aerospace Bureau, where he further developed the Long March 4B missile, among other things, Jin was appointed Secretary-General of the Commission for Science, Technology and Industry for National Defense in 2004. In 2017, he became Executive Deputy Director of the Central Military-Civilian Integration Development Committee Office. He was also a delegate to the 20th Party Congress of the Communist Party.

‘Winning the game of superpowers’

As minister, Jin is now responsible for sectors such as the internet, telecommunications, new energy vehicles and big data. Shortly after taking office, he declared that he wanted to promote greater international cooperation. Photos of him courting Tesla boss Elon Musk and Apple CEO Tim Cook during their visits to China in 2023 went around the world. However, Jin also called for China to become independent of foreign countries in critical technologies in the party magazine Qiushi last year. “In the face of increasingly fierce international competition,” China must “increase the resilience of the industrial supply chain” and the “level of security.” This is the only way to ensure “that our country can win in the game of superpowers.”

When talking to foreign companies, Jin maintains a friendly and open-minded demeanor. At the Beijing China Development Forum in late March, he invited foreign and multinational companies to come to China to set up research and development centers. “We will provide service and safeguards for worldwide scientists, entrepreneurs and investors who come to China to innovate and start businesses,” he said. China would continue to expand its high-level opening-up to create a “first-class, market-orientated, rule-of-law and international business environment.”

After Jin’s speech, Mercedes CEO Ola Kallenius took the stage at the forum. He explained that China’s openness to different technological concepts – especially in rapidly developing technologies such as autonomous driving – would certainly help strengthen China’s position as an innovation hub. However, China must create “harmonized international standards and regulations” that are fair and guarantee free trade. Fabian Peltsch

  • autonomous driving
  • Economic policy
  • Technology

Executive Moves

Lucas Rondez has been National Chairman of the Swiss Chamber of Commerce in China since the beginning of the month. He was previously confirmed as President of the Shanghai Chamber of Commerce (SwissCham Shanghai) in March.

Liang Zhou has been Global Operations Vice President Business Group at the French automotive supplier Faurecia Clarion Electronics in Shanghai since the beginning of March. He was previously China Operations Director.

Correction: Frank Schulze, Head of DB Cargo Transasia, is a member of the board of the German Chamber of Commerce East China, not its chairman, as incorrectly reported. We apologize for the error.

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

Dessert

The bright yellow rape blossom is followed by the bright pink color of the bougainvillea in Chinese spring. The false flowers, which mainly grow in subtropical regions, have also become a tourist attraction, like here in a valley in the Qingxiu Mountains near Nanning, capital of the Guangxi Autonomous Region.

A visitor center has been built here on the hillside specifically for admiring the magnificent flowers. The bougainvillea is also popular as a potted plant in southern China – it would not survive the cold winter in the north.

China.Table editorial team

CHINA.TABLE EDITORIAL OFFICE

Licenses:

    Editorial

    Dear reader,

    This trip to China led back to the future. Olaf Scholz’s trip with a large business delegation could have been from the era of every German chancellor since the late 1990s, when German business with China was booming, without any self-doubt or suspicions. And we have seen the fishing for concessions regarding Russia’s war against Ukraine during the Chancellor’s trip in 2022. However, China’s support for Russia has not changed substantially since then.

    It shows: The time of the China illusion is not over yet. China appeases European politicians with pretty words and tiny concessions. In Beijing, they are told exactly what they want to hear. But China has changed under Xi Jinping. Instead of becoming part of the Western-dominated world order, it wants to shake it up and reshape it.

    This is why parts of the German government and the Federation of German Industries (BDI) also urge the country to de-risk. However, Scholz’s visit showed little sign of this. Xi insisted that everything was fine with his country’s high exports.

    Michael Radunski analyzes word for word what is known about what Xi Jinping said to Olaf Scholz. We also provide an overview of what the other ministers in the delegation had to discuss in Beijing: Cem Oezdemir negotiated meat imports, Steffi Lemke the circular economy, and Volker Wissing autonomous driving standards.

    And then there was Jens Spahn. The politician from the conservative Christian Democratic Union (CDU) happened to be in China at the same time as Scholz, and yet he managed to somewhat steal the show from the Chancellor.

    Your
    Finn Mayer-Kuckuk
    Image of Finn  Mayer-Kuckuk

    Feature

    Xi makes minimal concessions – Scholz seems satisfied

    The talks between Scholz and Xi took longer than initially planned. Here in front of the teahouse in the garden of the official guest house called the “Hall of Ten Thousand Willows.”

    Although Xi Jinping has only minimally changed his stance on Russia and Ukraine, German Chancellor Olaf Scholz has already drawn considerable hope from this. He identified growing common ground with China: “We agreed: China and Germany want to support and encourage efforts to achieve peace in Ukraine,” said Scholz in Beijing on Tuesday. Both sides were willing to “coordinate intensively and positively” on a potential peace conference in Switzerland.

    The Chancellor spoke with the Chinese head of state and party leader for over three hours in Beijing on Tuesday. Xi praised the excellent Chinese-German relations, which “goes beyond the bilateral scope, and has a major impact on the Eurasian continent and the entire world.”

    Xi dodges with vague formulations

    A closer look at Xi’s words regarding Russia-Ukraine shows that both sides continue to see things very differently, including the peace conference. China still tends to side with Russia. The “peace” that China has repeatedly called for would have considerable advantages for Russia in this form.

    The Chinese President’s reaction shows that this is unlikely to change. Xi explained to Scholz which role the People’s Republic plays in his opinion: China is not a party or a participant in the Ukraine crisis. Instead, Xi named four vague principles to avoid further escalation:

    • Focusing on the overall interest of peace and stability rather than seeking selfish gains,
    • cooling down the situation rather than adding fuel to the fire,
    • accumulating conditions for restoring peace rather than further aggravating tensions,
    • and reducing the negative impact on the world economy rather than undermining the stability of global industrial and supply chains.

    With this, Xi is trying to blame the “Ukraine crisis” not on Russia (overall interest), but rather on the USA and the West (selfish gains and oil on the fire). In contrast, according to Xi, China has always “promoted the peace talks in its own way.” In other words, Russia is not the aggressor and the West is somehow to blame for the war. Presenting these points to Scholz in such a way could also be interpreted as impertinence, not as a concession.

    At the very least, Xi promised that China would support an international peace conference-”in due course” and only if both Ukraine and Russia participated. Switzerland currently plans such a conference, to which it is also inviting pro-Russian states. However, Russian President Vladimir Putin has already rejected the initiative and was not even invited.

    Scholz had announced much

    The meager results contradict Scholz’s announcements. Before the talks with Xi, Scholz said he would speak frankly with China’s President. “The Russian war of aggression in Ukraine and Russia’s armament have a very significant negative impact on security in Europe.”

    During the talks, he then asked Xi “to influence Russia so that Putin finally calls off his senseless campaign, withdraws his troops and ends this terrible war.” Scholz warned of damage to the “entire international order.” The war and Russia’s armament violated “a principle of the United Nations Charter, the principle of the inviolability of state borders.” China is Russia’s closest ally. Only a few days ago, the United States accused Beijing and several companies of supporting the Russian war machine.

    Xi: looking at relations strategically and in the long term

    Overall, China’s President had many kind words for his guest from Berlin. “The two countries do not have clashing fundamental interests between them and pose no security threat to each other. Cooperation between China and Germany benefits not just the two sides but also the world at large.” Relations should be viewed “from a long-term and strategic perspective.”

    Xi’s words are the expected charm offensive toward the German Chancellor. Beijing sees Germany as having a key role in an increasingly critical environment, from the United States, Canada, and the United Kingdom to Japan, South Korea, and Australia. Beijing also counts on the Federal Chancellor in Germany. Scholz is expected to balance out the critical stance of Foreign Minister Baerbock and Economy Minister Habeck and thus ensure a China-friendly policy in Germany.

    Wang Yi on the phone with Iran and Saudi Arabia

    The Middle East conflict also came up in Beijing on Tuesday. China’s Foreign Minister Wang Yi spoke on the phone with his Iranian counterpart Hossein Amir-Abdollahian. The latter promised that Iran was willing to exercise restraint, adding that Iran had only acted in self-defense to the attack on the Iranian embassy in Syria. According to Xinhua, Wang said that China condemned the attack on the Iranian embassy in the strongest possible terms – as for Iran’s current attack on Israel, he only said that it was a consequence of the conflict in Gaza.

    In a second phone call, Wang agreed to work closely with Saudi Arabian Foreign Minister Faisal bin Farhan bin Abdullah to avoid further escalation of the confrontation. According to Xinhua, Saudi Arabia expects China to play an active and important role in this regard.

    Xi warns against protectionism in Europe

    Xi warned Scholz against economic protectionism: Germany and China depended on industry and supported free trade, Xi said at the meeting with the Chancellor, according to Chinese sources. “It is important for the two countries to stay vigilant against the rise of protectionism,” he said. According to the Chinese readout after the meeting, Germany rejects protectionism (德国反对保护主义,支持自由贸易). “As an important member of the EU, Germany is willing to play an active role in promoting the good development of EU-China relations,” Scholz said.

    Cooperation between Germany and China does not represent a risk, but is “a guarantee for a stable bilateral relationship.” Xi cited sectors such as mechanical engineering and the automotive industry as examples. He believes that Berlin and Beijing should also look at issues of production capacity from a market and global perspective based on the laws of economics.

    Recently, the focus has been on the accusation that China was using state investment to ensure that Chinese companies were producing too much and damaging other markets with their cheap products. However, Beijing sees things differently: China’s exports of electric vehicles, lithium batteries and photovoltaic products have not only enriched global supply and alleviated global inflationary pressure, but also contributed greatly to the global response to climate change (中国电动汽车、锂电池、光伏产品等出口不仅丰富了全球供给、缓解了全球通胀压力,也为全球应对气候变化和绿色低碳转型做出了巨大贡献), Xi said, according to Chinese reports.

    BMW and Mercedes see China as more of an opportunity than a risk

    Meanwhile, Scholz advocated a rules-based trading system, as embodied by the World Trade Organisation (WTO): “Both China and Germany are trading nations that benefit greatly” from membership in the World Trade Organisation. “We are committed to strengthening the rules for global trade and developing them further together with the other WTO members.” Scholz said at a press conference in the evening that there was clearly a need to discuss the issue of overcapacity. “We need to talk about subsidy competition.” However, subsidies exist “everywhere in the world.” Scholz again emphasized the position of the WTO. He did not directly criticize Beijing’s economic policy. This clearly showed the differing tone of Berlin and Brussels.

    The CEOs of the two German car manufacturers, BMW and Mercedes, warned of a trade dispute, for example, over Chinese EVs in Europe. “What we can’t afford as an export nation are increasing trade barriers,” Mercedes CEO Ole Kallenius told German public broadcaster ARD in Beijing regarding the EU investigation into whether Chinese EVs are distorting market competition.

    Like BMW CEO Oliver Zipse, Kallenius described China as an opportunity rather than a risk. Referring to Scholz’s visit, Kallenius said that Sino-German economic relations should not only be cultivated, but also expanded. “Withdrawing from such a large market is not an alternative, but rather strengthening our position,” he said about the company’s strategy in China, the world’s second-largest economy. BMW already has a global presence, which is the best strategy for minimizing dependencies on one market, said the BMW CEO in response to political calls for diversification. He also voiced skepticism about EU investigations into Chinese EVs.

    • Economic policy
    • Geopolitics
    • Olaf Scholz
    • WTO
    • Xinhua

    Three ministers negotiate norms and standards in Beijing

    Die Delegation von Bundeskanzler Scholz mit Chinas Ministerpräsident Li Qiang und drei Bundesministern und ihren chinesischen Counterparts steht auf einer Treppe zum Porträt.
    Chancellor Scholz’s delegation with China’s Premier Li Qiang and the three federal ministers (front left) Wissing, Oezdemir and Lemke in Beijing.

    The unusually large contingent of three ministers almost resembled the format of the government consultations held every two years – and not a routine trip by the Federal Chancellor to China. However, Environment Minister Steffi Lemke, Agriculture Minister Cem Oezdemir (both Green Party), and Transport and Digital Minister Volker Wissing (FDP) did not hesitate to accompany Olaf Scholz to Beijing.

    The line-up of government members once again underlined China’s importance – and that the government is well aware of this. The ministers all presented concerns from their respective ministries that require close coordination with China. They discussed data privacy in cars, swine fever and plastics recycling.

    Wissing wants to learn from China’s autonomous driving system

    When it comes to artificial intelligence and autonomous driving, international standards are inconceivable without China. The People’s Republic has already invested billions in both areas and is a world leader in autonomous driving. Minister of Transport and Digital Affairs Wissing and State Secretary for Economic Affairs Franziska Brantner (Greens) traveled to China to look closely at the trend. They agreed on a declaration of intent with the Chinese Minister for Industry and Information Technology, Jin Zhuanglong, on “cooperation in autonomous driving.” This shows that, unlike the US, for example, China continues to focus on cooperation in future technologies wherever possible.

    “We are currently in a crucial development phase in which the aim is to bring the technology from the laboratories to the streets,” said Wissing in a statement. Like Chancellor Scholz before him, he emphasized that the key to this lies in fair competition and stressed the importance of common standards and norms. The joint declaration of intent is intended to contribute to this. Meanwhile, Brantner mentioned the increasingly restrictive data legislation in China, which in some cases places tight limits on cross-border data transfer in particular. She also reiterated the call for a level playing field, a recurring theme throughout the German visit.

    Lemke seals circular economy action plan with NDRC leader

    Federal Environment Minister Steffi Lemke also signed a joint action plan on “Circular Economy and Resource Efficiency” with the Chairman of the powerful Development and Reform Commission (NDRC), Zheng Shanjie, on Tuesday. The plan envisages a regular exchange on value chains of important materials, including plastics and metals. The aim is to achieve more efficient use of these materials in packaging, construction, and industry. According to a report by the German press agency dpa, particular focus will be placed on the automotive industry and the manufacture of batteries.

    The action plan is part of the Sino-German climate and transformation dialogue agreed at the intergovernmental consultations in June 2023. However, the two countries have so far had different ideas about the circular economy. China tends to focus more on resource efficiency and productivity, while Europe prioritizes how product volumes can be reduced to conserve natural resources. The German side would also like to provide China with elements of the German National Circular Economy Strategy (NKWS), which the German government hopes to adopt by summer 2024.

    Oezdemir represents the interests of German livestock farmers

    Agriculture Minister Cem Oezdemir met his counterpart Tang Renjian on Tuesday. According to a post by his ministry on X, discussion topics included cooperation in the protection of global goods as a prerequisite for food security as well as market access for beef, apples, and veterinary medicines. Another topic was African swine fever.

    The Ministry of Agriculture will provide more detailed information about Oezdemir’s meeting this Wednesday. In the run-up to the visit, Oezdemir was already expected to negotiate in Beijing about lifting the Chinese import ban on German pork, among other things. This is in the interests of livestock farmers, who used to export large quantities to China, where pork consumption has increased in recent years. Like other countries, China had suspended imports in 2021 due to African Swine Fever (ASF). However, South Korea had already resumed trade in May 2023. This could mean that Beijing’s continued ban could also have political reasons. Collaboration: Nicolas Heronymus

    • Cem Özdemir
    • De-risking
    • Geopolitik
    • Volker Wissing

    Sinolytics.Radar

    Public opinion in ASEAN countries shifts for the first time

    Dieser Inhalt ist Lizenznehmern unserer Vollversion vorbehalten.
    • When asked to pick a side between China and the US, ASEAN public opinion pivoted towards China for the first time since 2020. ​
    • Major sentiment shifts were observed in Indonesia, Laos and Malaysia, where support for China increased by 20-30 percentage points. The Philippines moved against the trend, where support for the US increased by 4.5 percentage points. ​
    • Indonesia, Laos and Malaysia are major beneficiaries of China’s Belt and Road Initiative. Indonesia and Malaysia, both Muslim-majority countries, also saw rising anti-American sentiments due to perceived US support for Israel in the Israel-Hamas war.​
    • The Philippines and Vietnam, which are on the front lines of territorial disputes with China, maintained strong support for the US. In 2023, the US and the Philippines updated their mutual defense treaty and expanded defense cooperation agreements. Vietnam upgraded its bilateral relations with the US and entered into a maritime cooperation agreement with the Philippines in January 2024. ​
    • With the US facing an election year in 2024, ASEAN’s confidence in the US as a reliable partner declined significantly. 47.2 percent of respondents were confident in the US in 2023, while only 34.9 percent still are in 2024. ​
    • Despite the pivot, more than half of ASEAN respondents still reported concerns about China’s ever-growing economic, political and strategic influence.
    • In addition, only 8 percent of respondents believe that ASEAN has to pick a side, while the overwhelming majority of 92 percent prefer some sort of neutral position or balancing option. ​

    Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.

    • Geopolitik

    News

    Human rights remain a side note

    German Chancellor Olaf Scholz has received harsh backlash for giving human rights virtually no space during his trip to China. The Tibet Initiative Germany accused Chancellor Olaf Scholz of sending a fatal signal to Beijing – that despite the disastrous development of its human rights record, the Chinese government can expect “at best only mild criticism.” Scholz even did worse than his predecessor Angela Merkel, “who at least always met with victims of Chinese tyranny.”

    Human Rights Watch Germany had hoped that Scholz would not just “play second fiddle to Germany’s narrow-minded economic interests” and would instead “put German-Chinese relations on a footing that respects human rights.” grz

    • Human Rights Watch
    • Menschenrechte
    • Olaf Scholz
    • Tibet

    Spahn calls for more assertive relations with China

    Jens Spahn, deputy leader of the German CDU/CSU parliamentary group responsible for economic policy, has demanded a more assertive attitude towards China. If there is no progress in the reciprocity of conditions for the economy, “the German government cannot promote further German and European investments in China,” the CDU politician demanded on Tuesday. Given its current economic situation, China could have no interest in this, he added.

    China benefits from economic cooperation, just like Germany. “But we have clear national interests: We will protect our national security. We are committed to fair, equal economic opportunities and we must strengthen our own competitiveness,” he demanded. At a recent Bundestag’s Economic Affairs Committee hearing, several China experts emphasized that Germany should not sell itself short.

    Spahn spends several days in China in parallel with Federal Chancellor Olaf Scholz. The trip has been planned for months. He wants to talk to representatives from politics, business, the media and civil society and visit the harbor city of Qingdao as well as Beijing.

    Meanwhile, Juergen Hardt, foreign policy spokesman for the CDU/CSU parliamentary group in the Bundestag, has called on the Chinese government to contribute to de-escalation in the Middle East. At the same time, the CDU politician praised the Chancellor for rightly traveling to China “and this time he also seems to have coordinated his trip with his closest allies.” Spahn, on the other hand, used his trip to criticize the chancellor across the board. “China is keeping a close eye on the German economic crisis. China takes us seriously because we are economically strong,” said Spahn. “The voice of a Chancellor loses weight in a downturn.” That is why Scholz can not be allowed to solely handle China policy, he said.

    Spahn also spoke to a reporter from the China Media Group, making him one of the few top European politicians without fear of contact with Chinese propaganda media. In the interview, he emphasized Germany’s wish for good cooperation: “But we want it to be fair and open.” cyb/ck

    • De-risking
    • Economic policy
    • Olaf Scholz

    Report: Xi travels to Belgrade for the 25th anniversary of embassy bombing

    According to a media report, China’s Head of State will visit Serbia early next month. Xi Jinping is expected to arrive in Belgrade on May 8, the Serbian online platform Demostat reported on Tuesday. The exact dates of Xi’s trip to Europe have not yet been confirmed. During his stay in Serbia, the Chinese president will meet with his Serbian counterpart, Aleksandar Vučić, and other state officials. Vučić last met with Xi in October 2023 during the Belt and Road Forum in Beijing.

    The date for Xi’s trip to Serbia was probably not picked by chance. The day marks the 25th anniversary of the night of May 7, 1999, when NATO bombed the Chinese embassy in Belgrade shortly before midnight, leaving three Chinese journalists dead and 21 people injured. The incident attracted international attention and criticism as it involved the embassy of a state not involved in the Kosovo conflict. NATO has consistently emphasized that it was an accident.

    Xi will reportedly also travel to Paris and Budapest. China is celebrating 60 years of diplomatic relations with France this year. ari

    • Serbien

    Growth exceeds expectations

    The Chinese economy grew 5.3 percent in the first quarter of 2024, year-on-year. This is according to the National Bureau of Statistics in Beijing on Tuesday. This growth exceeded experts’ expectations; economists surveyed by Reuters had expected growth of 4.6 percent. Growth was thus slightly higher than in the previous quarter: Between October and December 2023, the Chinese economy grew by 5.2 percent. The software and IT sector grew remarkably strongly by 13.7 percent, which was significantly higher than the 11.2 percent growth in the previous quarter, according to analysts from the consulting agency Trivium China.

    The figures should come as a relief to the Beijing government, which has been using various measures to stabilize the ailing economy for some time now. According to experts, however, the upturn was primarily driven by successful export business, while domestic demand continues to disappoint. The government aims for an overall economic growth of around five percent in 2024.

    However, the International Monetary Fund (IMF) appeared unimpressed and maintained its forecast for the current year at 4.6 percent. The IMF pointed to the ongoing real estate crisis, which has worsened recently. Prices for new apartments dropped by 2.2 percent in March, the sharpest decline in more than eight years. rtr/cyb/ck

    • Immobilienkrise

    BYD unveils first luxury cars

    China’s largest car manufacturer, BYD, has unveiled its first two luxury models. According to Bloomberg, BYD presented the Super 3 and Bao 8 SUVs at its headquarters in Shenzhen on Tuesday evening in a glamorous, live-streamed event. It was unclear whether the new SUVs were hybrid or purely electric cars. In addition to the two new models, the car manufacturer also presented the Super 9 in Shenzhen, a concept for a high-performance racing car.

    As recently as February, BYD announced that it would launch a series of high-end luxury models this year to capture a larger share of the premium car market. So far, BYD has mainly been known for its electric cars in the volume segment. The BYD presentation is the first in a series of expected premieres by the car brands ahead of the Beijing Auto Show from April 25 to May 4. ck

    • BYD
    • Car Industry

    Heads

    Jin Zhuanglong – open-minded space expert

    China’s Minister of Industry and Information Jin Zhuanglong.

    Germany and China intend to cooperate more closely on autonomous and connected driving. On the Chinese side, Jin Zhuanglong, Minister of Industry and Information Technology, signed a corresponding declaration of intent with German Transport Minister Volker Wissing, Federal Minister and State Secretary for Economic Affairs Franziska Brantner on Tuesday.

    Jin Zhuanglong (金壮龙) is regarded as a technological authority in China. Until he was appointed Minister of Information in July 2022, he was primarily known as an aerospace specialist. It is not uncommon in China for engineers to also pursue a political career all the way to the top of the Communist Party, especially if they work in the state economy.

    Just like Jin. From 2012 to 2017, he headed the Commercial Aircraft Corporation of China – Comac for short – China’s state-owned aircraft manufacturer as Chairman of the Board, Party Secretary and General Manager. In these positions, he promoted the development of the C919, the country’s first domestically developed passenger aircraft. When the aircraft embarked on its maiden flight in 2017, it was considered a new chapter in the global aviation market, and not just in the People’s Republic.

    Born in 1964 in Zhoushan in Zhejiang province, Jin embarked on this path as soon as he started studying at the Shanghai Academy of Spaceflight Technology (SAST) in the 1980s, where he also earned his Master of Engineering in missile development and design. His PhD in industrial economics followed in 2003 at Fudan University, also in Shanghai. On the side, Jin attended training courses at the Central Party School in preparation for a political career. He had already joined the CCP in 1984 at the age of 20.

    After a stint as Director of the Shanghai Aerospace Bureau, where he further developed the Long March 4B missile, among other things, Jin was appointed Secretary-General of the Commission for Science, Technology and Industry for National Defense in 2004. In 2017, he became Executive Deputy Director of the Central Military-Civilian Integration Development Committee Office. He was also a delegate to the 20th Party Congress of the Communist Party.

    ‘Winning the game of superpowers’

    As minister, Jin is now responsible for sectors such as the internet, telecommunications, new energy vehicles and big data. Shortly after taking office, he declared that he wanted to promote greater international cooperation. Photos of him courting Tesla boss Elon Musk and Apple CEO Tim Cook during their visits to China in 2023 went around the world. However, Jin also called for China to become independent of foreign countries in critical technologies in the party magazine Qiushi last year. “In the face of increasingly fierce international competition,” China must “increase the resilience of the industrial supply chain” and the “level of security.” This is the only way to ensure “that our country can win in the game of superpowers.”

    When talking to foreign companies, Jin maintains a friendly and open-minded demeanor. At the Beijing China Development Forum in late March, he invited foreign and multinational companies to come to China to set up research and development centers. “We will provide service and safeguards for worldwide scientists, entrepreneurs and investors who come to China to innovate and start businesses,” he said. China would continue to expand its high-level opening-up to create a “first-class, market-orientated, rule-of-law and international business environment.”

    After Jin’s speech, Mercedes CEO Ola Kallenius took the stage at the forum. He explained that China’s openness to different technological concepts – especially in rapidly developing technologies such as autonomous driving – would certainly help strengthen China’s position as an innovation hub. However, China must create “harmonized international standards and regulations” that are fair and guarantee free trade. Fabian Peltsch

    • autonomous driving
    • Economic policy
    • Technology

    Executive Moves

    Lucas Rondez has been National Chairman of the Swiss Chamber of Commerce in China since the beginning of the month. He was previously confirmed as President of the Shanghai Chamber of Commerce (SwissCham Shanghai) in March.

    Liang Zhou has been Global Operations Vice President Business Group at the French automotive supplier Faurecia Clarion Electronics in Shanghai since the beginning of March. He was previously China Operations Director.

    Correction: Frank Schulze, Head of DB Cargo Transasia, is a member of the board of the German Chamber of Commerce East China, not its chairman, as incorrectly reported. We apologize for the error.

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

    Dessert

    The bright yellow rape blossom is followed by the bright pink color of the bougainvillea in Chinese spring. The false flowers, which mainly grow in subtropical regions, have also become a tourist attraction, like here in a valley in the Qingxiu Mountains near Nanning, capital of the Guangxi Autonomous Region.

    A visitor center has been built here on the hillside specifically for admiring the magnificent flowers. The bougainvillea is also popular as a potted plant in southern China – it would not survive the cold winter in the north.

    China.Table editorial team

    CHINA.TABLE EDITORIAL OFFICE

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