Table.Briefing: China (English)

City partnerships with ulterior motives + Mexico between US tariffs and China investments

Dear reader,

City partnerships seem to have gone a bit out of fashion. In Germany, school trips often went to twin cities in France or England. For many, it was the first deep contact with a different culture and language – and often the beginning of a lifelong bond.

China also seems to be fond of town twinning and has invested a lot of energy and personnel in this model. Unfortunately, Beijing appears to be more interested in achieving its own geostrategic goals rather than in cultural exchange. This is shown by a study exclusively available to Table.Briefings. Marcel Grzanna has taken a closer look at it and reveals the problems and risks that German local politicians have to deal with. Particularly in times of a realignment of relations with China, it shows highly reckless behavior.

China is also showing increased interest in Mexico. In our second analysis, Leonardo Pape explains the major challenges the election winner, Claudia Sheinbaum, will face. Her country is in a dilemma: On the one hand, it has a free trade agreement with the US, while on the other, it enjoys investment from China. The problem: Beijing wants to use Mexico to circumvent American punitive tariffs and sanctions.

Last but not least, I would like to draw your attention to our ranking of key China decision-makers. Today, we are looking at the top 10 from the business sector.

Feature

Study: How city partnerships jeopardize Germany’s China strategy

Städte-Partnerschaften zwischen Deutschland und China fördern den Austausch zwischen beiden Ländern. Dabei trifft deutsche Lokalpolitik auf staatliche chinesische Interessen.
City partnerships between Germany and China promote exchange between the two countries. This is where German local politics clashes with Chinese national interests.

The lack of nationwide coordination of partnerships between German cities and Chinese municipalities presents a strategic risk for Germany. This is the conclusion of the study “De-Risking on the Surface, Re-Risking Underneath” by the civil and human rights organization “Freiheit für Hongkong e.V.” The study, which is exclusively available to Table.Briefings, reveals a drastic imbalance in the institutional backgrounds of the respective partner municipalities.

The constellation’s unique nature is problematic. German local politics with the right to self-government meets Chinese partners who primarily represent central government interests. According to the authors, this autonomy, combined with the lack of a formal coordination mechanism, prevents the consistent implementation of the German government’s China strategy. Berlin has no real influence on how and based on which criteria municipalities arrange their exchanges with Chinese partners.

Political influence on local politics

The study emphasizes that the prospect of economic gains through a partnership with a Chinese city is never granted without concessions on a political and moral level. Particularly when joint projects or cooperation are financed with Chinese money, critical comments on Chinese human rights violations or the authoritarian political system are undesirable. The study also highlights cases where the door was opened directly to political influence on German local politics and business under the guise of promoting international cooperation.

In 1982, Duisburg and Wuhan became the first cities to form a partnership. Today, there are 115 such partnerships. In principle, German municipalities are obliged by a 1985 resolution of the Conference of Interior Ministers to limit foreign activities to local matters. In reality, however, not even federal state governments are fully informed about the partnerships of their municipalities. Just under two years ago, when the Bavarian state government responded to a written interpellation from the Green Party in the state parliament, it was forced to admit that it had no knowledge of the goals and activities of the partnerships with Chinese partners.

Traces of earlier naivety recognizable

The study’s authors, which was reviewed by external China experts before publication, consider this to be a considerable disadvantage for Germany in its relations with the autocratic regime. The German government’s China strategy represents a fundamental change in German cooperation with China, at least on paper. The mantra of “change through trade” has been replaced by a de-risking strategy. However, despite efforts to take a more realistic view of China, “traces of this earlier naivety are still recognizable,” it says.

Germany’s China strategy explicitly welcomes city and country twinning programs. According to a paper published by the German government last year, they contribute to bilateral cooperation, improve understanding and promote exchange between civil societies.

Chinese municipalities serve state interests

Local governments must realize that when cooperating with Chinese cities and municipalities, they are dealing with the extended arm of the Communist Party. All state bodies in China are subordinate to the authority of the Communist Party. Even approaches to decentralization, which would give municipalities greater autonomy, have fallen by the wayside in the People’s Republic since Xi Jinping took office in 2012. His political theories include “maintaining the authority of the Central Committee of the CCP as the overriding principle and strengthening the Party’s centralized and unified leadership in external work.” In other words, every Chinese municipality primarily serves government interests when partnering with German cities.

Since last year, Article 6 of the Chinese law on foreign relations has regulated city partnerships. They are coordinated by the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC), which is, in turn, overseen by the Chinese Ministry of Foreign Affairs. The US government is highly critical of the association. It is said to cooperate closely with the Communist Party’s United Front, a propaganda department for foreign countries.

Means of spreading Beijing’s narrative

How determined and with what capacities China sets the framework for cooperation is shown by the example of a meeting between a German city official and Chinese representatives. While the German municipality felt sufficiently represented by one person, the Chinese side brought a handful of participants to the table, including two representatives from local foreign affairs offices, the deputy mayor and the deputy party secretary of the city. The meeting was organized by a former German official who attended the meeting with three members of his consulting firm. The report’s authors have anonymized the identity of the participants.

The study presents examples of how China links and coordinates partnerships with economic cooperation. One example is Ingolstadt, where Audi is headquartered, which has signed a town twinning agreement with Foshan. At first, the partnership resulted in the opening of the Audi Confucius Institute in the city. “However, the Chinese United Front soon used this initiative to spread Beijing’s views and strategically establish political ties at a municipal level,” it says.

More China expertise needed at the municipal level

The High Commissioner for Human Rights in Geneva highlighted the importance of local governments for protecting and promoting human rights as early as 2019. Shortly after the Russian attack on Ukraine, the German Association of Towns and Municipalities (DStGB) also recommended that city partnerships should “openly advocate peace, human rights, democracy and the rule of law. And to position themselves clearly and beyond any doubt against a totalitarian and aggressive ruler.”

The city of Cologne, which has partnered with Beijing, shows this is possible. Last year, Cologne joined the “10, 100, 1000 Human Rights Cities and Territories by 2030” campaign by the United Cities and Local Governments (UCGL). The city council’s resolution reaffirmed that the values and principles of Cologne’s foreign policy are based on freedom, democracy and the rule of law. To remain true to its values and goals, the city has developed seven guidelines and 40 concrete measures to uphold human rights in its foreign policy.

Either way, the study recommends the urgent need for more China expertise in Germany’s municipalities. Only then can the country’s China strategy be better assessed, and potential obstacles to its implementation be recognized early on.

  • China-Strategie
Translation missing.

Punitive tariffs: Why the US increases the pressure on Mexico’s new president

Claudia Sheinbaum: The election winner in Mexico will probably not stand in the way of Chinese investments.

Mexico’s newly elected President, Claudia Sheinbaum, will have to deal with trade and investment policy in connection with China at the start of her term of office. This is because the US fears that Mexico will become a transit hub for goods to avoid its tariffs and sanctions against China.

Because Mexico is a free trade partner of the US. The United States-Mexico-Canada Agreement (USMCA) only applies to goods manufactured in this zone, i.e., from factories in Mexico. However, such rules always have loopholes. Specifically, preliminary products and parts from China that are merely assembled in Mexico and thus easily mutate into a Mexican product.

Chinese companies also want to invest in Mexico and make it their production base with their own factories. Until now, goods from Chinese brands have generally been exempt from US customs duties if they are manufactured in Mexico.

BYD looks for a plant in Mexico

In the US, Republicans and Democrats alike increasingly push for the development of international value chains, excluding China. The focus is primarily on future industries such as electromobility.

For example, a prerequisite for receiving generous EV subsidies is that the components that make up a car do not come from China. In mid-May, US President Joe Biden raised a series of tariffs on Chinese goods. The burden on EV imports quadrupled to 100 percent of the price. The United States is also now imposing high tariffs on batteries from China.

There are also growing concerns that Chinese companies could undermine the tariffs by relocating their production to third countries. This is where Sheinbaum and Mexico come into play. In March, EV manufacturer BYD announced plans to build new production capacities in Mexico. The search for a site is expected to be completed in the coming months. Like most Chinese companies, BYD does not yet have its own production EV facilities in Mexico.

The US views Chinese investments in Mexico with suspicion

The US is observing the plans with suspicion. This is already having an effect. While Mexico has so far actively sought Chinese investment, it has now become more cautious. According to Reuters news agency reports from April, Mexico has denied Chinese automakers access to government incentives due to pressures from the United States.

BYD recently insisted that it does not intend to produce in Mexico for the US, but for the domestic market. US Trade Representative Katherine Tai nevertheless pointed to possible countermeasures should Chinese companies attempt to export from Mexico to the US. Donald Trump even threatened to impose tariffs of 100 percent in the event of his election victory in November – despite the North American Free Trade Agreement.

Mexico’s divided relationship with China

Chinese investments are viewed with little criticism in Mexico. However, China has been more of an economic competitor than a partner for Mexico in the recent past. Mexico only reluctantly agreed to China’s accession to the WTO in 2001. Mexico’s trade deficit with China has grown continuously since then, and the country has lost large market shares in export industries such as electronics and textiles to China.

Unlike many other countries in Latin America, Mexico is also not a member of China’s Belt and Road Initiative. Although the government under Sheinbaum’s predecessor, López Obrador from the left-wing Morena party, kept the doors open to Chinese investment, it put little effort into cultivating bilateral political relations.

Mexico: What Sheinbaum thinks about China

Obrador’s party colleague Sheinbaum has not yet taken office, but she will likely continue the country’s unsteady China policy. Enrique Dussel Peters, Director of the Center for China-Mexico Studies at UNAM University in Mexico City, expects Sheinbaum to continue López Obrador’s economic policy in general.

He believes Sheinbaum will not restrict Chinese investments in Mexico on her own initiative. However, this does not reflect a conscious stance but rather great unawareness. Sheinbaum has hardly ever explicitly taken a position on China. Even before the presidential elections, the issue hardly plays a role in the public debate.

Tariffs on cars from Mexico: US fears breach of contract

Meanwhile, pressure from the United States is increasing. According to Dussel Peters, the fact that electric cars produced in Mexico containing Chinese components are excluded from the US purchase incentives is already making investments less attractive for Chinese companies. In his opinion, the United States’ threat to impose tariffs on EVs produced in Mexico with Chinese participation conflicts with the North American Free Trade Agreement.

He said that the authorities in Mexico have so far been indifferent to who invests in the country. The foreign investment laws do not set any political standards – precisely what the US could push to change.

Is China’s interest in investment not real?

However, Jorge Guajardo, former Mexican ambassador to China and partner at the international business consultancy Denton Global Advisors in Washington, believes the fears are exaggerated. He does not expect Chinese companies to be able to circumvent the US import tariffs on electric cars via Mexico.

Guajardo even doubts that Chinese car manufacturers plan any serious investments in Mexico at all. He says that China mainly uses Mexico as a sales market, while direct foreign investment by Chinese companies in Mexico is marginal. The market for electromobility in Mexico is relatively tiny overall – in 2023, just under 20,000 electric cars were sold in Mexico, only a fraction of which came from BYD.

Mexico lacks serious debate on China

Dussel Peters also sees the current race to outbid tariff demands in the United States as more of an election campaign bluster. However, the confrontation between the USA and China is real, as are the consequences for Mexico, he says. The country continues to successfully maintain an economic and political balance. However, he notes a lack of serious discussion about Mexico’s future course in the difficult relationship triangle with the United States and China.

Like most other Latin American countries, Mexico lacks a solid China strategy. However, the next government will have to take a stronger stance – pressure from the US is already making sure of this. Leonardo Pape

  • Geopolitik
Translation missing.

News

Ukraine war: How China reacts to Zelenskiy’s accusations

China has firmly rejected criticism of its efforts to achieve peace in Ukraine. On Monday, a spokesman for the Chinese Foreign Ministry in Beijing said that all efforts to support peace measures between Russia and Ukraine should be recognized. Unlike other countries, China has never “fanned fire or fuelled the flames,” Mao Ning said in response to a question regarding a peace summit.

Over the weekend, Ukrainian President Volodymyr Zelenskiy accused Russia and China of undermining the peace conference scheduled for mid-June in Switzerland. At the Shangri-La Dialogue in Singapore, Zelenskiy said: “Russia, using Chinese influence in the region, using Chinese diplomats also, does everything to disrupt the peace summit.” It is regrettable that “such a big independent powerful country as China is an instrument in the hands of [Russian President Vladimir] Putin.”

China rejected the criticism on Monday and stressed that it attaches great importance to its relations with Ukraine and remains its largest trading partner. China’s position on the peace conference is “open and transparent,” Mao said in Beijing. “We believe that we can get the understanding and support of all parties.”

Switzerland tries to persuade as many countries as possible to participate in the planned peace conference. The aim of the summit is to lay the foundations for a peace process in Ukraine. Zelenskiy had previously repeatedly emphasized the importance of China’s role in this process. rad

  • Geopolitics
  • Russland
  • Ukraine War

Human rights: Why German politician Alt calls for more solidarity with civil rights activists

On the occasion of the 35th anniversary of the Tiananmen massacre, Renata Alt, Chair of the Committee on Human Rights and Humanitarian Aid in the German Bundestag, has called for stronger international solidarity with Chinese civil rights activists. “The international community cannot remain silent about this. We must show solidarity with those who continue to fight for fundamental freedoms in China. It is our collective duty to keep the memory of June 4, 1989, alive and to ensure that the victims of the massacre are not forgotten,” a written statement by Alt reads.

35 years ago, courageous citizens in China took to the streets for democracy and human rights, the statement continued. “The peaceful demonstrations were bloodily crushed by the Chinese government,” and the Communist Party systematically suppressed the memory of these events. grz

  • Tiananmen-Massaker

Growth: Why Moody’s raises its forecast for China’s economic performance

The US rating agency Moody’s has significantly raised its growth forecast for the People’s Republic of China. For the current year, the agency expects the Chinese economy to expand by 4.5 percent, 50 basis points more than in its previous forecast. The agency announced this in a statement on Monday.

The agency explained its revised upward forecast by stating that China’s post-pandemic growth strategy in the manufacturing sector and export orientation is taking shape. Growth in the first quarter was boosted by trade and manufacturing. According to the agency, Beijing’s fiscal policy was a key driver of growth in the manufacturing sector.

The Chinese government has set itself a growth target of “around five percent” for 2024. rtr/grz

  • Wachstum

Taiwan: Why Taipei announces its own military exercises

Taiwan has announced plans for its own military exercises this month. They will be held along the coast and at the Matsu defense base. The live-fire exercises are intended to simulate defense against amphibious and naval attacks by the Chinese People’s Liberation Army. The exercises will begin tomorrow, Wednesday.

The exercises are conducted amid a tense atmosphere. Following a large-scale exercise by the People’s Liberation Army, China’s defense minister once again underlined the tense situation at the Shangri-La Dialogue on Sunday. “Anyone who dares to separate Taiwan from China will only end up in self-destruction,” Dong Jun said in Singapore.

The situation around the Taiwan Strait has deteriorated further since Taiwan’s new President Lai Ching-te took office on May 20. In his first speech as president, Lai stressed that Taiwan and the mainland are “not subordinate to each other” – a statement that Beijing saw as crossing a red line. Lai has a reputation for supporting Taiwan’s independence. However, “Lai has never actively called for Taiwan’s independence. This is the Chinese narrative and serves as a justification for the military exercises,” China expert Angela Stanzel told Table.Briefings. rad

  • Geopolitics
  • Military
  • Taiwan

Heads

The key players of the China scene – business

Economy


Jens Hildebrandt – Future Vice President Government Relations Greater China at BASF

Jens Hildebrandt has made a name for himself in the German business community in China as head of the Chamber of Foreign Trade (AHK) in Beijing since 2018. As of July 1, he will head the newly established department for contacts with the Chinese government in Beijing at BASF, the world’s largest chemical company. He was head of the East Asia department at the German Chamber of Industry and Commerce (DIHK) in Berlin. Hildebrandt has a background in sinology and political science.

Ralf Brandstaetter – Member of the Board of Management for China at Volkswagen

As Chairman and CEO of Volkswagen Group China, Ralf Brandstaetter has been in charge of Germany’s largest car manufacturer’s vital China business since August 2022. He is also a member of the Group’s Board of Management. He originally trained as a factory mechanic and later earned a degree in industrial engineering. Brandstaetter was head of the Volkswagen core brand and has many years of experience in purchasing.

Carsten Senz – Vice President Corporate Communications at Huawei Technologies Germany

As the voice of Huawei in Germany, Carsten Senz has a very special role. Discussions in Germany about Chinese influence and technical sovereignty have focused on the network supplier. Senz has been with Huawei for 13 years. He was previously with Wuhan Iron & Steel. He also worked for the city of Beijing. Wuhan was one of the stations of his university studies.

Johannes Roscheck – President of Audi China

Johannes Roscheck has only been the head of Audi in China since April 2024. His task is to maintain the premium manufacturer’s market position. Roscheck can look back on a varied international career with stops in Brazil and Hungary. In the interim, he has left the company to co-found a start-up. He has a background in mechanical and industrial engineering.

Chen Yudong – Former President of Bosch China

Chen Yudong worked at Bosch from 2007 to January 2024, from 2011 as head of the national subsidiary. Under his aegis, sales increased by a factor of 3.5. He comes from Jiangsu, studied in Chongqing and earned his PhD at the University of Michigan. Chen is now on the Board of Directors of Coherix, a provider of machines for the automatic and precise application of adhesives in the smart factory of the future.

Hubertus Troska

Hubertus Troska – Member of the Board of Management for China at the Mercedes-Benz Group

Hubertus Troska has been responsible for the China business of Mercedes-Benz Group AG, of which he has been a member of the Board of Management since 2012. Born in Spain, Troska studied economics and business administration as well as English and Hispanic studies. After four years in the construction industry, he joined the former Daimler-Benz AG in 1988 and rose through the ranks in various countries. Troska is also a member of the Board of Management of Mercedes-Benz AG.

Sean Green

Sean Green – President and CEO of BMW Group Region China

Sean Green joined BMW in 1988 as an automotive engineering apprentice and subsequently studied motor vehicle studies part-time at Windsor College and Maidenhead College in the UK. At BMW, he initially worked in the product area, for example, as parts manager and product planning manager, and from 2003 onwards, he held sales and marketing positions in various regions. Green first came to China in 2014 as Vice President MINI Region China. Since November, he has been responsible for BMW’s entire China business.

Hui Zhang

Zhang Hui – Vice President of NIO Europe

Zhang Hui heads NIO Europe with offices in Munich and Oxford, which focus on design, supply chain management and advanced engineering. He is also responsible for tapping into the EU market for the EV manufacturer. Zhang has been familiar with Germany for many years. He studied in Pforzheim and worked for Voith AG and automotive suppliers Kiekert and Leoni, among others. Zhang has been working at NIO since 2016, where he has been based in Europe since the beginning.

Christian Sommer – CEO and Chairman of the German Center Shanghai

Christian Sommer is an integral part of the German business scene in China. For almost 30 years, Sommer has been working in Shanghai and Beijing for the German Center, which is the first contact point and office site in China for many SMEs. From 1999, he headed the German Center in Shanghai and has been its General Manager since 2005. Sommer has a background in law and initially worked for a law firm in Shanghai from 1995.

Alicia García-Herrero

Alicia García-Herrero – Chief Economist Asia Pacific at Natixis

Alicia García-Herrero is known for her expert assessments of the Chinese economy. Her primary occupation is Chief Economist for Asia-Pacific at the investment consultancy Natixis, but she is also actively involved in several think tanks. For example, she is a Senior Fellow at the European think tank Bruegel, a Non-Resident Research Fellow at the East Asia Institute of the National University of Singapore and an Associate Professor at the Hong Kong University of Science and Technology.

  • Economy

Executive Moves

Mei Chen moved from LinkedIn China to BMW China in April after seven years. She will now work as a Marketing Manager. Prior to her time as Digital Marketing and Social Media Marketing Manager, Chen held various positions, such as journalist for China Radio International (CRI).

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

Dessert

Schüler einer Mittelschule in Suqian, Jiangsu, werden auf den Gaokao vorbereitet.
The students at a middle school in Suqian, Jiangsu, are preparing for the Gaokao. The university entrance exam is the stuff of drama. Many families see their child’s academic education as the only chance for a life of secure wealth. The young people are under enormous pressure not to disappoint their parents’ expectations. Many resort to the use of substances to keep them going during the intensive preparation phase. Without access to university, most graduates are left with a factory job or a low-paid position in the service sector.

China.Table editorial team

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    City partnerships seem to have gone a bit out of fashion. In Germany, school trips often went to twin cities in France or England. For many, it was the first deep contact with a different culture and language – and often the beginning of a lifelong bond.

    China also seems to be fond of town twinning and has invested a lot of energy and personnel in this model. Unfortunately, Beijing appears to be more interested in achieving its own geostrategic goals rather than in cultural exchange. This is shown by a study exclusively available to Table.Briefings. Marcel Grzanna has taken a closer look at it and reveals the problems and risks that German local politicians have to deal with. Particularly in times of a realignment of relations with China, it shows highly reckless behavior.

    China is also showing increased interest in Mexico. In our second analysis, Leonardo Pape explains the major challenges the election winner, Claudia Sheinbaum, will face. Her country is in a dilemma: On the one hand, it has a free trade agreement with the US, while on the other, it enjoys investment from China. The problem: Beijing wants to use Mexico to circumvent American punitive tariffs and sanctions.

    Last but not least, I would like to draw your attention to our ranking of key China decision-makers. Today, we are looking at the top 10 from the business sector.

    Feature

    Study: How city partnerships jeopardize Germany’s China strategy

    Städte-Partnerschaften zwischen Deutschland und China fördern den Austausch zwischen beiden Ländern. Dabei trifft deutsche Lokalpolitik auf staatliche chinesische Interessen.
    City partnerships between Germany and China promote exchange between the two countries. This is where German local politics clashes with Chinese national interests.

    The lack of nationwide coordination of partnerships between German cities and Chinese municipalities presents a strategic risk for Germany. This is the conclusion of the study “De-Risking on the Surface, Re-Risking Underneath” by the civil and human rights organization “Freiheit für Hongkong e.V.” The study, which is exclusively available to Table.Briefings, reveals a drastic imbalance in the institutional backgrounds of the respective partner municipalities.

    The constellation’s unique nature is problematic. German local politics with the right to self-government meets Chinese partners who primarily represent central government interests. According to the authors, this autonomy, combined with the lack of a formal coordination mechanism, prevents the consistent implementation of the German government’s China strategy. Berlin has no real influence on how and based on which criteria municipalities arrange their exchanges with Chinese partners.

    Political influence on local politics

    The study emphasizes that the prospect of economic gains through a partnership with a Chinese city is never granted without concessions on a political and moral level. Particularly when joint projects or cooperation are financed with Chinese money, critical comments on Chinese human rights violations or the authoritarian political system are undesirable. The study also highlights cases where the door was opened directly to political influence on German local politics and business under the guise of promoting international cooperation.

    In 1982, Duisburg and Wuhan became the first cities to form a partnership. Today, there are 115 such partnerships. In principle, German municipalities are obliged by a 1985 resolution of the Conference of Interior Ministers to limit foreign activities to local matters. In reality, however, not even federal state governments are fully informed about the partnerships of their municipalities. Just under two years ago, when the Bavarian state government responded to a written interpellation from the Green Party in the state parliament, it was forced to admit that it had no knowledge of the goals and activities of the partnerships with Chinese partners.

    Traces of earlier naivety recognizable

    The study’s authors, which was reviewed by external China experts before publication, consider this to be a considerable disadvantage for Germany in its relations with the autocratic regime. The German government’s China strategy represents a fundamental change in German cooperation with China, at least on paper. The mantra of “change through trade” has been replaced by a de-risking strategy. However, despite efforts to take a more realistic view of China, “traces of this earlier naivety are still recognizable,” it says.

    Germany’s China strategy explicitly welcomes city and country twinning programs. According to a paper published by the German government last year, they contribute to bilateral cooperation, improve understanding and promote exchange between civil societies.

    Chinese municipalities serve state interests

    Local governments must realize that when cooperating with Chinese cities and municipalities, they are dealing with the extended arm of the Communist Party. All state bodies in China are subordinate to the authority of the Communist Party. Even approaches to decentralization, which would give municipalities greater autonomy, have fallen by the wayside in the People’s Republic since Xi Jinping took office in 2012. His political theories include “maintaining the authority of the Central Committee of the CCP as the overriding principle and strengthening the Party’s centralized and unified leadership in external work.” In other words, every Chinese municipality primarily serves government interests when partnering with German cities.

    Since last year, Article 6 of the Chinese law on foreign relations has regulated city partnerships. They are coordinated by the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC), which is, in turn, overseen by the Chinese Ministry of Foreign Affairs. The US government is highly critical of the association. It is said to cooperate closely with the Communist Party’s United Front, a propaganda department for foreign countries.

    Means of spreading Beijing’s narrative

    How determined and with what capacities China sets the framework for cooperation is shown by the example of a meeting between a German city official and Chinese representatives. While the German municipality felt sufficiently represented by one person, the Chinese side brought a handful of participants to the table, including two representatives from local foreign affairs offices, the deputy mayor and the deputy party secretary of the city. The meeting was organized by a former German official who attended the meeting with three members of his consulting firm. The report’s authors have anonymized the identity of the participants.

    The study presents examples of how China links and coordinates partnerships with economic cooperation. One example is Ingolstadt, where Audi is headquartered, which has signed a town twinning agreement with Foshan. At first, the partnership resulted in the opening of the Audi Confucius Institute in the city. “However, the Chinese United Front soon used this initiative to spread Beijing’s views and strategically establish political ties at a municipal level,” it says.

    More China expertise needed at the municipal level

    The High Commissioner for Human Rights in Geneva highlighted the importance of local governments for protecting and promoting human rights as early as 2019. Shortly after the Russian attack on Ukraine, the German Association of Towns and Municipalities (DStGB) also recommended that city partnerships should “openly advocate peace, human rights, democracy and the rule of law. And to position themselves clearly and beyond any doubt against a totalitarian and aggressive ruler.”

    The city of Cologne, which has partnered with Beijing, shows this is possible. Last year, Cologne joined the “10, 100, 1000 Human Rights Cities and Territories by 2030” campaign by the United Cities and Local Governments (UCGL). The city council’s resolution reaffirmed that the values and principles of Cologne’s foreign policy are based on freedom, democracy and the rule of law. To remain true to its values and goals, the city has developed seven guidelines and 40 concrete measures to uphold human rights in its foreign policy.

    Either way, the study recommends the urgent need for more China expertise in Germany’s municipalities. Only then can the country’s China strategy be better assessed, and potential obstacles to its implementation be recognized early on.

    • China-Strategie
    Translation missing.

    Punitive tariffs: Why the US increases the pressure on Mexico’s new president

    Claudia Sheinbaum: The election winner in Mexico will probably not stand in the way of Chinese investments.

    Mexico’s newly elected President, Claudia Sheinbaum, will have to deal with trade and investment policy in connection with China at the start of her term of office. This is because the US fears that Mexico will become a transit hub for goods to avoid its tariffs and sanctions against China.

    Because Mexico is a free trade partner of the US. The United States-Mexico-Canada Agreement (USMCA) only applies to goods manufactured in this zone, i.e., from factories in Mexico. However, such rules always have loopholes. Specifically, preliminary products and parts from China that are merely assembled in Mexico and thus easily mutate into a Mexican product.

    Chinese companies also want to invest in Mexico and make it their production base with their own factories. Until now, goods from Chinese brands have generally been exempt from US customs duties if they are manufactured in Mexico.

    BYD looks for a plant in Mexico

    In the US, Republicans and Democrats alike increasingly push for the development of international value chains, excluding China. The focus is primarily on future industries such as electromobility.

    For example, a prerequisite for receiving generous EV subsidies is that the components that make up a car do not come from China. In mid-May, US President Joe Biden raised a series of tariffs on Chinese goods. The burden on EV imports quadrupled to 100 percent of the price. The United States is also now imposing high tariffs on batteries from China.

    There are also growing concerns that Chinese companies could undermine the tariffs by relocating their production to third countries. This is where Sheinbaum and Mexico come into play. In March, EV manufacturer BYD announced plans to build new production capacities in Mexico. The search for a site is expected to be completed in the coming months. Like most Chinese companies, BYD does not yet have its own production EV facilities in Mexico.

    The US views Chinese investments in Mexico with suspicion

    The US is observing the plans with suspicion. This is already having an effect. While Mexico has so far actively sought Chinese investment, it has now become more cautious. According to Reuters news agency reports from April, Mexico has denied Chinese automakers access to government incentives due to pressures from the United States.

    BYD recently insisted that it does not intend to produce in Mexico for the US, but for the domestic market. US Trade Representative Katherine Tai nevertheless pointed to possible countermeasures should Chinese companies attempt to export from Mexico to the US. Donald Trump even threatened to impose tariffs of 100 percent in the event of his election victory in November – despite the North American Free Trade Agreement.

    Mexico’s divided relationship with China

    Chinese investments are viewed with little criticism in Mexico. However, China has been more of an economic competitor than a partner for Mexico in the recent past. Mexico only reluctantly agreed to China’s accession to the WTO in 2001. Mexico’s trade deficit with China has grown continuously since then, and the country has lost large market shares in export industries such as electronics and textiles to China.

    Unlike many other countries in Latin America, Mexico is also not a member of China’s Belt and Road Initiative. Although the government under Sheinbaum’s predecessor, López Obrador from the left-wing Morena party, kept the doors open to Chinese investment, it put little effort into cultivating bilateral political relations.

    Mexico: What Sheinbaum thinks about China

    Obrador’s party colleague Sheinbaum has not yet taken office, but she will likely continue the country’s unsteady China policy. Enrique Dussel Peters, Director of the Center for China-Mexico Studies at UNAM University in Mexico City, expects Sheinbaum to continue López Obrador’s economic policy in general.

    He believes Sheinbaum will not restrict Chinese investments in Mexico on her own initiative. However, this does not reflect a conscious stance but rather great unawareness. Sheinbaum has hardly ever explicitly taken a position on China. Even before the presidential elections, the issue hardly plays a role in the public debate.

    Tariffs on cars from Mexico: US fears breach of contract

    Meanwhile, pressure from the United States is increasing. According to Dussel Peters, the fact that electric cars produced in Mexico containing Chinese components are excluded from the US purchase incentives is already making investments less attractive for Chinese companies. In his opinion, the United States’ threat to impose tariffs on EVs produced in Mexico with Chinese participation conflicts with the North American Free Trade Agreement.

    He said that the authorities in Mexico have so far been indifferent to who invests in the country. The foreign investment laws do not set any political standards – precisely what the US could push to change.

    Is China’s interest in investment not real?

    However, Jorge Guajardo, former Mexican ambassador to China and partner at the international business consultancy Denton Global Advisors in Washington, believes the fears are exaggerated. He does not expect Chinese companies to be able to circumvent the US import tariffs on electric cars via Mexico.

    Guajardo even doubts that Chinese car manufacturers plan any serious investments in Mexico at all. He says that China mainly uses Mexico as a sales market, while direct foreign investment by Chinese companies in Mexico is marginal. The market for electromobility in Mexico is relatively tiny overall – in 2023, just under 20,000 electric cars were sold in Mexico, only a fraction of which came from BYD.

    Mexico lacks serious debate on China

    Dussel Peters also sees the current race to outbid tariff demands in the United States as more of an election campaign bluster. However, the confrontation between the USA and China is real, as are the consequences for Mexico, he says. The country continues to successfully maintain an economic and political balance. However, he notes a lack of serious discussion about Mexico’s future course in the difficult relationship triangle with the United States and China.

    Like most other Latin American countries, Mexico lacks a solid China strategy. However, the next government will have to take a stronger stance – pressure from the US is already making sure of this. Leonardo Pape

    • Geopolitik
    Translation missing.

    News

    Ukraine war: How China reacts to Zelenskiy’s accusations

    China has firmly rejected criticism of its efforts to achieve peace in Ukraine. On Monday, a spokesman for the Chinese Foreign Ministry in Beijing said that all efforts to support peace measures between Russia and Ukraine should be recognized. Unlike other countries, China has never “fanned fire or fuelled the flames,” Mao Ning said in response to a question regarding a peace summit.

    Over the weekend, Ukrainian President Volodymyr Zelenskiy accused Russia and China of undermining the peace conference scheduled for mid-June in Switzerland. At the Shangri-La Dialogue in Singapore, Zelenskiy said: “Russia, using Chinese influence in the region, using Chinese diplomats also, does everything to disrupt the peace summit.” It is regrettable that “such a big independent powerful country as China is an instrument in the hands of [Russian President Vladimir] Putin.”

    China rejected the criticism on Monday and stressed that it attaches great importance to its relations with Ukraine and remains its largest trading partner. China’s position on the peace conference is “open and transparent,” Mao said in Beijing. “We believe that we can get the understanding and support of all parties.”

    Switzerland tries to persuade as many countries as possible to participate in the planned peace conference. The aim of the summit is to lay the foundations for a peace process in Ukraine. Zelenskiy had previously repeatedly emphasized the importance of China’s role in this process. rad

    • Geopolitics
    • Russland
    • Ukraine War

    Human rights: Why German politician Alt calls for more solidarity with civil rights activists

    On the occasion of the 35th anniversary of the Tiananmen massacre, Renata Alt, Chair of the Committee on Human Rights and Humanitarian Aid in the German Bundestag, has called for stronger international solidarity with Chinese civil rights activists. “The international community cannot remain silent about this. We must show solidarity with those who continue to fight for fundamental freedoms in China. It is our collective duty to keep the memory of June 4, 1989, alive and to ensure that the victims of the massacre are not forgotten,” a written statement by Alt reads.

    35 years ago, courageous citizens in China took to the streets for democracy and human rights, the statement continued. “The peaceful demonstrations were bloodily crushed by the Chinese government,” and the Communist Party systematically suppressed the memory of these events. grz

    • Tiananmen-Massaker

    Growth: Why Moody’s raises its forecast for China’s economic performance

    The US rating agency Moody’s has significantly raised its growth forecast for the People’s Republic of China. For the current year, the agency expects the Chinese economy to expand by 4.5 percent, 50 basis points more than in its previous forecast. The agency announced this in a statement on Monday.

    The agency explained its revised upward forecast by stating that China’s post-pandemic growth strategy in the manufacturing sector and export orientation is taking shape. Growth in the first quarter was boosted by trade and manufacturing. According to the agency, Beijing’s fiscal policy was a key driver of growth in the manufacturing sector.

    The Chinese government has set itself a growth target of “around five percent” for 2024. rtr/grz

    • Wachstum

    Taiwan: Why Taipei announces its own military exercises

    Taiwan has announced plans for its own military exercises this month. They will be held along the coast and at the Matsu defense base. The live-fire exercises are intended to simulate defense against amphibious and naval attacks by the Chinese People’s Liberation Army. The exercises will begin tomorrow, Wednesday.

    The exercises are conducted amid a tense atmosphere. Following a large-scale exercise by the People’s Liberation Army, China’s defense minister once again underlined the tense situation at the Shangri-La Dialogue on Sunday. “Anyone who dares to separate Taiwan from China will only end up in self-destruction,” Dong Jun said in Singapore.

    The situation around the Taiwan Strait has deteriorated further since Taiwan’s new President Lai Ching-te took office on May 20. In his first speech as president, Lai stressed that Taiwan and the mainland are “not subordinate to each other” – a statement that Beijing saw as crossing a red line. Lai has a reputation for supporting Taiwan’s independence. However, “Lai has never actively called for Taiwan’s independence. This is the Chinese narrative and serves as a justification for the military exercises,” China expert Angela Stanzel told Table.Briefings. rad

    • Geopolitics
    • Military
    • Taiwan

    Heads

    The key players of the China scene – business

    Economy


    Jens Hildebrandt – Future Vice President Government Relations Greater China at BASF

    Jens Hildebrandt has made a name for himself in the German business community in China as head of the Chamber of Foreign Trade (AHK) in Beijing since 2018. As of July 1, he will head the newly established department for contacts with the Chinese government in Beijing at BASF, the world’s largest chemical company. He was head of the East Asia department at the German Chamber of Industry and Commerce (DIHK) in Berlin. Hildebrandt has a background in sinology and political science.

    Ralf Brandstaetter – Member of the Board of Management for China at Volkswagen

    As Chairman and CEO of Volkswagen Group China, Ralf Brandstaetter has been in charge of Germany’s largest car manufacturer’s vital China business since August 2022. He is also a member of the Group’s Board of Management. He originally trained as a factory mechanic and later earned a degree in industrial engineering. Brandstaetter was head of the Volkswagen core brand and has many years of experience in purchasing.

    Carsten Senz – Vice President Corporate Communications at Huawei Technologies Germany

    As the voice of Huawei in Germany, Carsten Senz has a very special role. Discussions in Germany about Chinese influence and technical sovereignty have focused on the network supplier. Senz has been with Huawei for 13 years. He was previously with Wuhan Iron & Steel. He also worked for the city of Beijing. Wuhan was one of the stations of his university studies.

    Johannes Roscheck – President of Audi China

    Johannes Roscheck has only been the head of Audi in China since April 2024. His task is to maintain the premium manufacturer’s market position. Roscheck can look back on a varied international career with stops in Brazil and Hungary. In the interim, he has left the company to co-found a start-up. He has a background in mechanical and industrial engineering.

    Chen Yudong – Former President of Bosch China

    Chen Yudong worked at Bosch from 2007 to January 2024, from 2011 as head of the national subsidiary. Under his aegis, sales increased by a factor of 3.5. He comes from Jiangsu, studied in Chongqing and earned his PhD at the University of Michigan. Chen is now on the Board of Directors of Coherix, a provider of machines for the automatic and precise application of adhesives in the smart factory of the future.

    Hubertus Troska

    Hubertus Troska – Member of the Board of Management for China at the Mercedes-Benz Group

    Hubertus Troska has been responsible for the China business of Mercedes-Benz Group AG, of which he has been a member of the Board of Management since 2012. Born in Spain, Troska studied economics and business administration as well as English and Hispanic studies. After four years in the construction industry, he joined the former Daimler-Benz AG in 1988 and rose through the ranks in various countries. Troska is also a member of the Board of Management of Mercedes-Benz AG.

    Sean Green

    Sean Green – President and CEO of BMW Group Region China

    Sean Green joined BMW in 1988 as an automotive engineering apprentice and subsequently studied motor vehicle studies part-time at Windsor College and Maidenhead College in the UK. At BMW, he initially worked in the product area, for example, as parts manager and product planning manager, and from 2003 onwards, he held sales and marketing positions in various regions. Green first came to China in 2014 as Vice President MINI Region China. Since November, he has been responsible for BMW’s entire China business.

    Hui Zhang

    Zhang Hui – Vice President of NIO Europe

    Zhang Hui heads NIO Europe with offices in Munich and Oxford, which focus on design, supply chain management and advanced engineering. He is also responsible for tapping into the EU market for the EV manufacturer. Zhang has been familiar with Germany for many years. He studied in Pforzheim and worked for Voith AG and automotive suppliers Kiekert and Leoni, among others. Zhang has been working at NIO since 2016, where he has been based in Europe since the beginning.

    Christian Sommer – CEO and Chairman of the German Center Shanghai

    Christian Sommer is an integral part of the German business scene in China. For almost 30 years, Sommer has been working in Shanghai and Beijing for the German Center, which is the first contact point and office site in China for many SMEs. From 1999, he headed the German Center in Shanghai and has been its General Manager since 2005. Sommer has a background in law and initially worked for a law firm in Shanghai from 1995.

    Alicia García-Herrero

    Alicia García-Herrero – Chief Economist Asia Pacific at Natixis

    Alicia García-Herrero is known for her expert assessments of the Chinese economy. Her primary occupation is Chief Economist for Asia-Pacific at the investment consultancy Natixis, but she is also actively involved in several think tanks. For example, she is a Senior Fellow at the European think tank Bruegel, a Non-Resident Research Fellow at the East Asia Institute of the National University of Singapore and an Associate Professor at the Hong Kong University of Science and Technology.

    • Economy

    Executive Moves

    Mei Chen moved from LinkedIn China to BMW China in April after seven years. She will now work as a Marketing Manager. Prior to her time as Digital Marketing and Social Media Marketing Manager, Chen held various positions, such as journalist for China Radio International (CRI).

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

    Dessert

    Schüler einer Mittelschule in Suqian, Jiangsu, werden auf den Gaokao vorbereitet.
    The students at a middle school in Suqian, Jiangsu, are preparing for the Gaokao. The university entrance exam is the stuff of drama. Many families see their child’s academic education as the only chance for a life of secure wealth. The young people are under enormous pressure not to disappoint their parents’ expectations. Many resort to the use of substances to keep them going during the intensive preparation phase. Without access to university, most graduates are left with a factory job or a low-paid position in the service sector.

    China.Table editorial team

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