Anyone dealing with China has to put up with ambivalence and apparent contradictions. Painting things in black and white is usually not helpful in the search for explanations. This realization runs like a red thread through today’s briefing.
The Russian war of aggression in Ukraine is entering its third winter and there is still talk of Beijing’s role: Peace broker or war supporter? The plans of Chinese companies to produce long-range drones with Russian partners speak for themselves. So why is the Chinese government allowing this if it likes to present itself to the world as a force for peace? Angela Köckritz has analyzed Beijing’s strategic reasons for supporting Putin based on the drone issue.
German companies are also facing a complex reality in China. They are experiencing a historic low in sentiment. This is shown by the annual survey of the German Chamber of Commerce. And yet the overwhelming majority of respondents believe it is necessary to stay in China. Some even want to invest even more. How can this be reconciled? Jörn Petring has analyzed the results.
Latin American countries are cooperating intensively with China, as Xi Jinping’s recent visit has shown. Investments not only create new trade routes but also economic dependencies. However, Europeans need not see any malicious intentions on China’s part, says Benjamin Creutzfeldt in today’s Standpunkt. Instead, the head of the Confucius Institute in Leipzig argues that we should learn from Latin America.
I wish you an informed start to the day.
China would like to present itself to the world as a force for peace. But why then does the Chinese government allow Chinese and Russian companies to jointly produce long-range drones for Russia’s military campaign? Its traditional response to such accusations is that it knows nothing about it. The companies will be investigated, it will take time. A lot of time.
It is virtually impossible that this is a state-controlled drone program. It is equally inconceivable that the leadership is not aware of it. According to European intelligence information, this is not just some small company that wanted to produce a few mini drones.
The long-range drone Garpiya 3, which Russia wants to have produced in China with the help of Chinese experts, is to be produced in monthly quantities of 300 to 400 drones. That would be up to 4,800 units per year, around a fifth of Russia’s total drone production. If this project were to become reality, Chinese companies would be providing massive support for Russia’s war of aggression.
The same Russian defense company, IEMZ Kupol, had previously produced more than 2,500 units of the predecessor model Garpiya 1, which are huge kamikaze drones. They have a Chinese engine and other Chinese components and cost the lives of numerous Ukrainians. The Garpiya 3 can even carry explosive charges of up to 80 kilograms over a distance of more than 2,000 kilometers.
IEMZ Kupol is a subsidiary of the state-owned Russian defense company Almaz-Antey. In documents available to European intelligence services, Kupol reports on the progress of the program to the Russian Ministry of Defense. In addition, Kupol and its Chinese business partners want to develop their drone research and development center in the hyper-surveilled Kashgar in Xinjiang province, of all places. And, of course, the Chinese government has imposed extremely strict conditions on the production and export of drones.
But if the leadership knew about this, why did it not stop this program immediately? After all, it has always emphasized to the outside world that it is a neutral mediator in this conflict (even though it supports Putin politically, economically, and technologically to the best of its ability). Is it not afraid that this could fundamentally destroy its carefully cultivated image as a neutral force for peace?
“The Chinese government does not want Putin to win in a big way,” says a British security adviser, “because it does care about territorial integrity.” However, it is undisputed that the war brings China political and economic benefits. Only through it did Putin become Xi’s junior partner, China receives Russian energy at discount prices and China was able to increase its exports to Russia by 60 percent. While Russia and the West are embroiled in this war, China is using the image gain as a seemingly neutral mediator.
Above all, the war keeps Europeans and Americans busy, tying up attention and resources that could otherwise be directed elsewhere. For example, in Taiwan and the South China Sea. Barack Obama had already declared the pivot – the strategic orientation towards Asia – in 2012, thereby programmatically focusing on the geopolitical challenge of the 21st century. Prior to this, the USA had concentrated on hunting terrorists for 20 years. But the war on terror, writes Taipei-based author Stefan Thome, “demanded different types of weapons, strategies, and skills than the confrontation with the People’s Liberation Army, which had consistently prepared itself for it during the same period”, namely “a powerful navy with a well-stocked missile arsenal.”
It takes time to build these up. To make matters worse, a number of US Navy cruisers are obsolete and need to be decommissioned. In 2021, an American naval commander therefore stated in a Senate hearing with regard to the possibility of a Chinese invasion of Taiwan. “In my estimation, the mid-to-late 2020s could be the most likely timeframe for a failure of deterrence in the region.” For former Australian Prime Minister and renowned sinologist Kevin Rudd, the decade to 2032 is also the “decade in which to live dangerously.” 2032 would mark the end of Xi Jinping’s fourth term of office, which he is expected to take up in 2027 at the age of 74. Xi hopes that by then his country will have overtaken the USA as the largest economy and become the region’s pre-eminent military power.
So there are enough strategic reasons for the Chinese government to simply let a Sino-Russian drone program run its course. It may hope that the news will simply go down – that might be more difficult in the West than in the Global South, where the Chinese government has invested a lot of money in satellite providers, media cooperation, and journalism programs in recent years to build a friendly resonance space. However, the Global South is becoming increasingly important for China both politically and economically. This is precisely what the Europeans want to prevent. They hope that the threat of a loss of reputation will persuade China to give in.
Incidentally, Garpiya, the name of the drone, refers to the Russian name for the harpy. The harpies are Greek mythical creatures, half woman, half bird, around which many sinister myths are entwined. They live in a cave on Crete and must carry the souls of the dead to the underworld or kill people who arouse his wrath at the behest of the stuff.
The mood of German companies in China has reached a new low. This year’s business climate survey by the German Chamber of Commerce in China, which was presented in Shanghai on Wednesday, shows more clearly than ever the complex reality facing companies in the Chinese market. Despite the poor mood, an overwhelming majority do not want to turn their backs on the People’s Republic.
Clas Neumann, Chairman of the German Chamber of Commerce in East China, says: “This year has been difficult for the majority of German companies, which has led to a downward revision of their business expectations.” Nevertheless, according to Neumann, 92 percent of companies plan to continue their business. And not only that. Many wanted to use the current circumstances to reposition themselves and “take advantage of opportunities in the market”, according to Neumann.
Initially, the chamber had a whole series of negative results to announce:
However, none of this seems to be a reason for German companies to give up. Every second company (51%) plans to increase investment within the next two years. Of these, 87% cite the need to remain competitive as the main reason – an increase of 8 percentage points compared to the previous year.
According to Neumann and his colleague Maximilian Butek, Managing Director of the German Chamber of Commerce in East China, more and more companies are focusing on working “with the mindset of a Chinese company”. In concrete terms, this means that fewer and fewer decisions about business in China are being made at the head office back home in Germany. In order to take account of the fast pace in China, decisions are being made directly on-site. In addition, companies are trying to serve global markets directly from China and are thus pursuing the approach “in China for China, plus in China for the world”.
The Chamber has coined yet another new term for this trend, referring to “Localization 3.0” as a “major strategic shift”. Localization 1.0 was still aimed at overcoming market access restrictions, such as the requirement to establish joint ventures with partners. In 2021, the Chamber then coined the term Localization 2.0 to describe how companies were adapting to China’s drive for local innovation and increasingly stringent regulation.
The survey also included a political statement addressed to the federal government. It clearly shows the dissatisfaction of companies with Berlin’s work. This part was so important to the Chamber of Commerce that it published it on Monday – just in time for Annalena Baerbock’s visit to Beijing. According to the survey, 73% of the companies surveyed wanted the German government to place greater emphasis on China as a partner. 58% of the German companies surveyed see the negative perception of China in Germany and the EU as a particular challenge for their business with China.
“The involvement of German companies in China strengthens their innovative power and global competitiveness. This aspect is often overlooked in public discourse,” explained Oliver Oehms, Managing Director of the German Chamber of Commerce in North China. The German economy expects more support from politicians, for example through targeted cooperation formats that strengthen German companies in their partnerships.
On Nov. 14, China’s head of state Xi Jinping inaugurated the Chancay Port, financed with 3.5 billion US dollars, as part of the APEC summit in Peru. This project will be a catalyst for global trade and in particular a key link between Latin America and East Asia. Peruvian voices emphasize that the country is very interested in expanding Chinese investment – especially in high-value-added sectors that can drive sustainable development. That doesn’t sound like a “debt trap”, it’s a promising connection.
While Xi was opening a “smart” high-tech port in Peru, US Secretary of State Antony Blinken overlooked a ceremony just a few kilometers away at which used diesel locomotives from the 1980s worth six million dollars were transferred to the Andean state. The Andean state had to pay the transportation costs of 24 million dollars itself.
The contrast could hardly be more striking. It shows how Beijing is actively reshaping the geopolitical and economic space in Latin America – a region that was long considered the “backyard” of the US.
Shortly afterwards – at the G20 summit in Brazil – Xi Jinping emphasized the importance of the Belt and Road Initiative (BRI), which aims to diversify trade routes while positioning it as a platform for joint development. Although Brazil itself is not a formal participant in the BRI, the country is nevertheless attracting significant Chinese investment in areas such as renewable energy and the production of electric vehicles.
It is true that these investments not only create new trade routes but also economic dependencies that strengthen China’s influence in the region. And despite China’s many successes, not all projects have gone smoothly: Infrastructure projects such as a hydroelectric power plant in Ecuador have suffered from quality issues, and promised investments have not always been fully realized. Nevertheless, China remains an attractive option for countries looking for alternatives to their traditional dependence on the USA.
However, the USA feels that it has stepped on its toes: China’s growing influence is perceived as a threat to US hegemony. While Washington relies on protectionist measures and tariffs, Beijing is expanding its network through investments and partnerships. China is positioning itself as an advocate of globalization and trade liberalization, a narrative that is becoming increasingly attractive, especially in times of US protectionism and Trump’s “America First” policy. In Peru, Xi spoke of the need to promote economic cooperation and overcome protectionist tendencies.
What does this mean for Europe? If the Greek historian Thucydides is anything to go by, tensions between the hegemon and the rising power inevitably escalate into war, and third countries are forced to take sides. But Greek history cannot be applied 1:1 to the rest of the world. China does not seek war. And if Western states accepted this basic principle, they might suspect less malice behind every Chinese investment on the continent.
A completely different scenario emerges if we go back to the time of the Three Kingdoms at the end of the Han dynasty: As an alternative theory to the “Thucydides Trap”, the “Yizhou Dilemma” speaks of symbolic diplomacy in order to avoid direct confrontation, and recommends active non-alignment to third countries. For Latin America, this means not clearly categorizing itself, not reducing the world to a simplistic black and white, to democratic and authoritarian adversaries.
Diversity exists not only at a societal level but also in global affairs! Latin American countries have different views on the crises in Gaza and Ukraine, reflecting the diversity of the region’s political landscapes and priorities. This is why it is so important for Europe to build very individual relationships with the individual actors.
Paving the way for transformative change in the global order while respecting the different points of view and complex realities of these countries remains a challenge. Europe can learn a lot from Latin America and at the same time help these countries to maintain and expand their strategic independence.
Benjamin Creutzfeldt is head of the Confucius Institute in Leipzig. He completed his doctorate at the Universidad Externado de Colombia in Bogotá on China’s relations with Latin America and was a postdoctoral fellow at the Johns Hopkins School of Advanced International Studies in Washington. In addition to his academic career, he also worked for the auction house Christie’s as an art expert and auctioneer for Chinese porcelain.
Editor’s note: Discussing China today means – more than ever – engaging in controversial debate. We want to reflect the diversity of opinions so that you can gain an insight into the breadth of the debate. Opinion articles do not reflect the opinion of the editorial team.
We know paper tigers and house tigers, but in China you may also come across “wall tigers” (壁 bì “wall, wall, rock face”; 虎 hǔ as in 老虎 Lǎohǔ “tiger”). But don’t worry: contrary to what the word might suggest, these are harmless “tigers”, meaning geckos or salamanders.
Fancy more? www.new-chinese.org
Anyone dealing with China has to put up with ambivalence and apparent contradictions. Painting things in black and white is usually not helpful in the search for explanations. This realization runs like a red thread through today’s briefing.
The Russian war of aggression in Ukraine is entering its third winter and there is still talk of Beijing’s role: Peace broker or war supporter? The plans of Chinese companies to produce long-range drones with Russian partners speak for themselves. So why is the Chinese government allowing this if it likes to present itself to the world as a force for peace? Angela Köckritz has analyzed Beijing’s strategic reasons for supporting Putin based on the drone issue.
German companies are also facing a complex reality in China. They are experiencing a historic low in sentiment. This is shown by the annual survey of the German Chamber of Commerce. And yet the overwhelming majority of respondents believe it is necessary to stay in China. Some even want to invest even more. How can this be reconciled? Jörn Petring has analyzed the results.
Latin American countries are cooperating intensively with China, as Xi Jinping’s recent visit has shown. Investments not only create new trade routes but also economic dependencies. However, Europeans need not see any malicious intentions on China’s part, says Benjamin Creutzfeldt in today’s Standpunkt. Instead, the head of the Confucius Institute in Leipzig argues that we should learn from Latin America.
I wish you an informed start to the day.
China would like to present itself to the world as a force for peace. But why then does the Chinese government allow Chinese and Russian companies to jointly produce long-range drones for Russia’s military campaign? Its traditional response to such accusations is that it knows nothing about it. The companies will be investigated, it will take time. A lot of time.
It is virtually impossible that this is a state-controlled drone program. It is equally inconceivable that the leadership is not aware of it. According to European intelligence information, this is not just some small company that wanted to produce a few mini drones.
The long-range drone Garpiya 3, which Russia wants to have produced in China with the help of Chinese experts, is to be produced in monthly quantities of 300 to 400 drones. That would be up to 4,800 units per year, around a fifth of Russia’s total drone production. If this project were to become reality, Chinese companies would be providing massive support for Russia’s war of aggression.
The same Russian defense company, IEMZ Kupol, had previously produced more than 2,500 units of the predecessor model Garpiya 1, which are huge kamikaze drones. They have a Chinese engine and other Chinese components and cost the lives of numerous Ukrainians. The Garpiya 3 can even carry explosive charges of up to 80 kilograms over a distance of more than 2,000 kilometers.
IEMZ Kupol is a subsidiary of the state-owned Russian defense company Almaz-Antey. In documents available to European intelligence services, Kupol reports on the progress of the program to the Russian Ministry of Defense. In addition, Kupol and its Chinese business partners want to develop their drone research and development center in the hyper-surveilled Kashgar in Xinjiang province, of all places. And, of course, the Chinese government has imposed extremely strict conditions on the production and export of drones.
But if the leadership knew about this, why did it not stop this program immediately? After all, it has always emphasized to the outside world that it is a neutral mediator in this conflict (even though it supports Putin politically, economically, and technologically to the best of its ability). Is it not afraid that this could fundamentally destroy its carefully cultivated image as a neutral force for peace?
“The Chinese government does not want Putin to win in a big way,” says a British security adviser, “because it does care about territorial integrity.” However, it is undisputed that the war brings China political and economic benefits. Only through it did Putin become Xi’s junior partner, China receives Russian energy at discount prices and China was able to increase its exports to Russia by 60 percent. While Russia and the West are embroiled in this war, China is using the image gain as a seemingly neutral mediator.
Above all, the war keeps Europeans and Americans busy, tying up attention and resources that could otherwise be directed elsewhere. For example, in Taiwan and the South China Sea. Barack Obama had already declared the pivot – the strategic orientation towards Asia – in 2012, thereby programmatically focusing on the geopolitical challenge of the 21st century. Prior to this, the USA had concentrated on hunting terrorists for 20 years. But the war on terror, writes Taipei-based author Stefan Thome, “demanded different types of weapons, strategies, and skills than the confrontation with the People’s Liberation Army, which had consistently prepared itself for it during the same period”, namely “a powerful navy with a well-stocked missile arsenal.”
It takes time to build these up. To make matters worse, a number of US Navy cruisers are obsolete and need to be decommissioned. In 2021, an American naval commander therefore stated in a Senate hearing with regard to the possibility of a Chinese invasion of Taiwan. “In my estimation, the mid-to-late 2020s could be the most likely timeframe for a failure of deterrence in the region.” For former Australian Prime Minister and renowned sinologist Kevin Rudd, the decade to 2032 is also the “decade in which to live dangerously.” 2032 would mark the end of Xi Jinping’s fourth term of office, which he is expected to take up in 2027 at the age of 74. Xi hopes that by then his country will have overtaken the USA as the largest economy and become the region’s pre-eminent military power.
So there are enough strategic reasons for the Chinese government to simply let a Sino-Russian drone program run its course. It may hope that the news will simply go down – that might be more difficult in the West than in the Global South, where the Chinese government has invested a lot of money in satellite providers, media cooperation, and journalism programs in recent years to build a friendly resonance space. However, the Global South is becoming increasingly important for China both politically and economically. This is precisely what the Europeans want to prevent. They hope that the threat of a loss of reputation will persuade China to give in.
Incidentally, Garpiya, the name of the drone, refers to the Russian name for the harpy. The harpies are Greek mythical creatures, half woman, half bird, around which many sinister myths are entwined. They live in a cave on Crete and must carry the souls of the dead to the underworld or kill people who arouse his wrath at the behest of the stuff.
The mood of German companies in China has reached a new low. This year’s business climate survey by the German Chamber of Commerce in China, which was presented in Shanghai on Wednesday, shows more clearly than ever the complex reality facing companies in the Chinese market. Despite the poor mood, an overwhelming majority do not want to turn their backs on the People’s Republic.
Clas Neumann, Chairman of the German Chamber of Commerce in East China, says: “This year has been difficult for the majority of German companies, which has led to a downward revision of their business expectations.” Nevertheless, according to Neumann, 92 percent of companies plan to continue their business. And not only that. Many wanted to use the current circumstances to reposition themselves and “take advantage of opportunities in the market”, according to Neumann.
Initially, the chamber had a whole series of negative results to announce:
However, none of this seems to be a reason for German companies to give up. Every second company (51%) plans to increase investment within the next two years. Of these, 87% cite the need to remain competitive as the main reason – an increase of 8 percentage points compared to the previous year.
According to Neumann and his colleague Maximilian Butek, Managing Director of the German Chamber of Commerce in East China, more and more companies are focusing on working “with the mindset of a Chinese company”. In concrete terms, this means that fewer and fewer decisions about business in China are being made at the head office back home in Germany. In order to take account of the fast pace in China, decisions are being made directly on-site. In addition, companies are trying to serve global markets directly from China and are thus pursuing the approach “in China for China, plus in China for the world”.
The Chamber has coined yet another new term for this trend, referring to “Localization 3.0” as a “major strategic shift”. Localization 1.0 was still aimed at overcoming market access restrictions, such as the requirement to establish joint ventures with partners. In 2021, the Chamber then coined the term Localization 2.0 to describe how companies were adapting to China’s drive for local innovation and increasingly stringent regulation.
The survey also included a political statement addressed to the federal government. It clearly shows the dissatisfaction of companies with Berlin’s work. This part was so important to the Chamber of Commerce that it published it on Monday – just in time for Annalena Baerbock’s visit to Beijing. According to the survey, 73% of the companies surveyed wanted the German government to place greater emphasis on China as a partner. 58% of the German companies surveyed see the negative perception of China in Germany and the EU as a particular challenge for their business with China.
“The involvement of German companies in China strengthens their innovative power and global competitiveness. This aspect is often overlooked in public discourse,” explained Oliver Oehms, Managing Director of the German Chamber of Commerce in North China. The German economy expects more support from politicians, for example through targeted cooperation formats that strengthen German companies in their partnerships.
On Nov. 14, China’s head of state Xi Jinping inaugurated the Chancay Port, financed with 3.5 billion US dollars, as part of the APEC summit in Peru. This project will be a catalyst for global trade and in particular a key link between Latin America and East Asia. Peruvian voices emphasize that the country is very interested in expanding Chinese investment – especially in high-value-added sectors that can drive sustainable development. That doesn’t sound like a “debt trap”, it’s a promising connection.
While Xi was opening a “smart” high-tech port in Peru, US Secretary of State Antony Blinken overlooked a ceremony just a few kilometers away at which used diesel locomotives from the 1980s worth six million dollars were transferred to the Andean state. The Andean state had to pay the transportation costs of 24 million dollars itself.
The contrast could hardly be more striking. It shows how Beijing is actively reshaping the geopolitical and economic space in Latin America – a region that was long considered the “backyard” of the US.
Shortly afterwards – at the G20 summit in Brazil – Xi Jinping emphasized the importance of the Belt and Road Initiative (BRI), which aims to diversify trade routes while positioning it as a platform for joint development. Although Brazil itself is not a formal participant in the BRI, the country is nevertheless attracting significant Chinese investment in areas such as renewable energy and the production of electric vehicles.
It is true that these investments not only create new trade routes but also economic dependencies that strengthen China’s influence in the region. And despite China’s many successes, not all projects have gone smoothly: Infrastructure projects such as a hydroelectric power plant in Ecuador have suffered from quality issues, and promised investments have not always been fully realized. Nevertheless, China remains an attractive option for countries looking for alternatives to their traditional dependence on the USA.
However, the USA feels that it has stepped on its toes: China’s growing influence is perceived as a threat to US hegemony. While Washington relies on protectionist measures and tariffs, Beijing is expanding its network through investments and partnerships. China is positioning itself as an advocate of globalization and trade liberalization, a narrative that is becoming increasingly attractive, especially in times of US protectionism and Trump’s “America First” policy. In Peru, Xi spoke of the need to promote economic cooperation and overcome protectionist tendencies.
What does this mean for Europe? If the Greek historian Thucydides is anything to go by, tensions between the hegemon and the rising power inevitably escalate into war, and third countries are forced to take sides. But Greek history cannot be applied 1:1 to the rest of the world. China does not seek war. And if Western states accepted this basic principle, they might suspect less malice behind every Chinese investment on the continent.
A completely different scenario emerges if we go back to the time of the Three Kingdoms at the end of the Han dynasty: As an alternative theory to the “Thucydides Trap”, the “Yizhou Dilemma” speaks of symbolic diplomacy in order to avoid direct confrontation, and recommends active non-alignment to third countries. For Latin America, this means not clearly categorizing itself, not reducing the world to a simplistic black and white, to democratic and authoritarian adversaries.
Diversity exists not only at a societal level but also in global affairs! Latin American countries have different views on the crises in Gaza and Ukraine, reflecting the diversity of the region’s political landscapes and priorities. This is why it is so important for Europe to build very individual relationships with the individual actors.
Paving the way for transformative change in the global order while respecting the different points of view and complex realities of these countries remains a challenge. Europe can learn a lot from Latin America and at the same time help these countries to maintain and expand their strategic independence.
Benjamin Creutzfeldt is head of the Confucius Institute in Leipzig. He completed his doctorate at the Universidad Externado de Colombia in Bogotá on China’s relations with Latin America and was a postdoctoral fellow at the Johns Hopkins School of Advanced International Studies in Washington. In addition to his academic career, he also worked for the auction house Christie’s as an art expert and auctioneer for Chinese porcelain.
Editor’s note: Discussing China today means – more than ever – engaging in controversial debate. We want to reflect the diversity of opinions so that you can gain an insight into the breadth of the debate. Opinion articles do not reflect the opinion of the editorial team.
We know paper tigers and house tigers, but in China you may also come across “wall tigers” (壁 bì “wall, wall, rock face”; 虎 hǔ as in 老虎 Lǎohǔ “tiger”). But don’t worry: contrary to what the word might suggest, these are harmless “tigers”, meaning geckos or salamanders.
Fancy more? www.new-chinese.org
