Table.Briefing: China (English)

Concerns about parallel structures + Focus on Greenland + Wooden Snake approaches

Dear reader,

Western companies increasingly outsource activities to China in parallel structures – even if it makes no sense from a market economy perspective. In a new report, the EU Chamber of Commerce warns of the consequences of this silo formation. While companies still localize for commercial considerations, more than a third now also cite regulatory requirements and geopolitical concerns as reasons.

In addition to rising overall costs and global compliance risks, the formation of silos can impact innovation and competitiveness. Read Jörn Petring’s analysis to learn about the EU Chamber of Commerce’s other concerns.

President-elect Donald Trump has once again caused irritation with his fantasies of taking over Greenland. However, he also highlights the geostrategic importance of the island. Together with colleagues from Security.Table and Europe.Table, Fabian Peltsch explains why Greenland is so important for all major powers.

The Year of the Snake begins in China at the end of January. Only good spirits of luck and prosperity are expected from this zodiac sign. Fortune-tellers also predict 2025 to be an excellent year for head of state and party leader Xi Jinping, as he was also born under the zodiac sign of the snake in 1953. When “snake meets snake,” that person finds himself in a fateful year, writes Johnny Erling, who has explored the depths of Chinese astrology.

Have a great read!

Your
Julia Fiedler
Image of Julia  Fiedler

Feature

Geopolitics: Why localization worries the EU Chamber of Commerce

Container terminal in the port of Qingdao.

In a new report, the European Chamber of Commerce in China has strongly warned of the dangers of so-called “siloing.” This trend describes Western companies outsourcing more and more activities to China in parallel structures – although, according to the chamber, this does not actually make sense from a market economy perspective.

Many companies continue to localize for commercial reasons, said Chamber President Jens Eskelund on Thursday at the presentation of the Siloing report in Beijing. However, the chamber increasingly sees companies “separating their activities due to regulatory requirements or geopolitical concerns.”

Regulatory requirements and geopolitics

Around three-quarters of the 113 chamber members surveyed justified their adjustments to products and services in China with the aim of better adapting to the wishes of Chinese customers. However, more than one-third of the companies stated that they were adapting in order to comply with local regulations. A quarter did so to react to political changes.

Geopolitical tensions, trade conflicts and China’s policy of self-sufficiency, coupled with rising regulatory risks at national and global level, have led to this trend, according to the chamber.

Some members had made “significant investments” in this process, and they now closely resembled local companies in China. They have localized their supply chains, workforce, sales and procurement functions, and isolated their research and development departments and data and IT systems in order to adapt to evolving regulatory requirements and be seen as a “reliable partner” by Chinese authorities as well as their local partners and customers.

However, this is associated with considerable compromises. Silong would lead to “rising overall costs and global compliance risks.” It would also require doubling operating and production capacities, the chamber summarized. The result would be “inefficiencies, a reduced ability to innovate and a loss of international competitiveness”.

The chamber identified another problem. Although companies do everything they can to appear Chinese, there is no guarantee that this will pay off. For example, there are many examples of public contracts not being awarded to Western companies. And this even though they had essentially built up a completely Chinese company.

A threat to global competitiveness

Siloing might alleviate some problems in the China business, but according to the Chamber report, it also leads to negative side effects such as:

  • Higher costs due to the need to duplicate operations.
  • Although the siloing of IT infrastructures solves the compliance problems in China, it affects global connectivity and business as a whole.
  • This would put foreign companies at a considerable disadvantage compared to their Chinese competitors, as they could only operate with a single system.
  • The growing dominance of Chinese standards poses the risk that foreign companies will lose their global competitiveness if these standards are adopted internationally.

Also disadvantages for China’s economy

However, the chamber believes that the need to silo poses risks not just for EU companies, but also for China’s economy. “Although some European companies are onshoring supply chains into China to increase resilience, a similar number are moving their supply chains out for the same reason,” the report states. It argues that the outflow of foreign direct investment to other markets – which is already underway – could increase if companies find the cost of staying too high.

This could lead to significant losses of jobs and tax revenue in China. At the same time, it is conceivable that international markets will increasingly develop instruments to better protect their own companies from Chinese competition on domestic soil.

Trump makes the situation even more complicated

The chamber fears that with Donald Trump in the White House, uncertainty will continue to increase. “It is truly unique that we find ourselves in a situation where so much is a guessing game,” said Chamber President Eskelund. In light of Donald Trump’s inauguration as the new US president on January 20, it is impossible to form an opinion on what the world will look like in three weeks, he added. However, the chamber expects a relatively good year for global trade despite the threat of tariffs. Problems with trade could become more noticeable in 2026 due to a sharpening of geopolitical fronts.

  • EU-Handelskammer

Sea routes, resources, military supremacy: Why Greenland is so important

US soldiers at Thule Air Base, the northernmost base of the US Air Force, on the northwest coast of Greenland, October 8, 2019.

It is not the first time that US President-elect Donald Trump has irritated the world with his desire to seize Greenland. Yet he can already do whatever he wants there, says security expert Michael Paul from the German Institute for International and Security Affairs. “In last year’s Greenland Arctic strategy, Greenland – and therefore also Denmark – expressed the wish for increased American involvement and investment,” says Paul. This would also ease the burden on their own national budget.

Both Greenland and Denmark have rejected the purchase offer. However, on Thursday, Nuuk expressed its willingness to cooperate with the United States in developing raw materials. The USA also maintains the large Thule Air Base on the island. There is no need to soften the treaties on cooperation, explains Paul, and military threats are “completely inappropriate, with a good ally like Denmark anyway.” However, he argues that Trump’s strategy has always been to make big announcements in order to achieve minimal goals in the end. It is clear that Trump wants more influence in Greenland, he adds.

Denmark wants to avoid a verbal escalation

Many threats have not materialized, a spokesperson for the EU Commission said on Thursday, commenting on Trump’s statements that he would not shy away from using force. The Commission did not want to answer every hypothetical question. In other words, Brussels reacted evasively. Instead, they said they look forward to working with the future US administration on a strong transatlantic agenda. Their priority is to prepare as many avenues of cooperation as possible with a view to common strategic goals.

Cooperation may not be a priority for Trump, who likes to assert his own interests. When the US president-elect threatens Denmark with tariffs, he primarily demonstrates his unawareness: The US can only impose punitive tariffs against the EU as a whole, not against an individual member state. When asked, Trump said he would not rule out using military force to protect interests in Greenland. This also includes Denmark because although Greenland left what was known as the European Economic Community in 1982 following a referendum, it is still considered part of the Danish kingdom.

One spokesperson for the EU Commission stressed that the sovereignty of states must be respected. And yes, should Denmark call on its European partners for help in a hypothetical conflict over Greenland, the obligation to provide assistance under Article 42(7) would apply. But why has Brussels reacted so cautiously to the threats?

According to diplomats in Brussels, Denmark has no interest in a verbal escalation and has therefore requested restraint. Adding fuel to the fire with additional statements now will only make the negotiating position more difficult later. Accordingly, Trump’s threats regarding Greenland were not on the agenda of the EU ambassadors in Brussels on Thursday.

Moscow’s interests in the Arctic

However, Moscow reacted quickly to Trump’s bold plans: “The Arctic is a zone of our national interests, our strategic interests,” said Kremlin spokesman Dmitry Peskov on Thursday. “We are interested in preserving the atmosphere of peace and stability in the Arctic zone.”

In a spectacular submarine operation in the summer of 2007, Russia planted a flag on the seabed of the North Pole at a depth of more than 4,200 meters, underlining its claim to the area. Almost 20 years ago, Russia reactivated old Soviet military bases in the Arctic and is building up new forces. The modernization of the strategic submarines of the Northern Fleet is also underway. In December 2023, President Vladimir Putin visited the large Russian shipyard Sevmash on the White Sea, which is to build three Borey-A class strategic submarines in the coming years. It is the fourth and most modern generation of Russian nuclear submarines.

Russia’s maritime strategy, updated in the summer of 2022, attributes great importance to the Arctic. Russia’s plans are defined in 21 points, from exploiting natural resources and expanding ports and sea routes to research. Moscow’s main focus is to secure its claim to the Arctic region. As Table.Briefings reported, both NATO and the German government see a need to adjust their security policy in the Arctic and are adapting their considerations accordingly. A cooperative approach by neighboring states in the Arctic region no longer seems to be a reality.

Beijing also seeks to exploit raw materials

As if there weren’t enough disputes in the region, China also wants to benefit economically from Greenland. As part of its “Polar Silk Road,” the Arctic supplement to the “Belt and Road” initiative, Beijing wants to expand its influence in Greenland. China is already the island’s second-largest trading partner after Denmark, for example, for fishery products. However, Beijing primarily focuses on strategic resources such as rare earths and uranium. Large-scale projects such as the Kuannersuit uranium mining project or the construction of two airports by the state-owned China Communications Construction Company (CCCC) failed due to Washington’s veto.

China is currently reluctant to invest overseas due to its own economic downturn. Nevertheless, Greenland remains a key regional strategic target, as evidenced by regular meetings between Chinese and Greenlandic politicians. Greenland’s wish for more autonomy and the feeling of being patronized by Copenhagen and Washington could lead to Nuuk becoming more open to Chinese investment. Above all, if the geopolitical situation in the Arctic changes, Russia and China might further expand their partnership there militarily.

  • European Defense

Events

Jan 14, 2025; 11 a.m. CET (6 p.m. CST)
Sino German Center at Frankfurt School, Webinar: Outlook for China’s Economy in the Year of the Snake More

Jan 15, 2025; 2 p.m. CET (9 p.m. CST)
Merics, Wecast: Meric’s China Forecast 2025 More

Jan 15, 2025; 2 p.m. CST
German Chamber of Commerce, GCC Networking (in Changchun): Fireside Chat with Ambassador Dr. Patricia Flor More

Jan 17, 2025; 2 p.m. CST
German Chamber of Commerce, Knowledge Hub (in Shanghai): Global E-Commerce Logistics: Navigating Growth & Innovation in China and Germany More

Jan 17, 2025; 12 p.m. CET
sinokultur, Art over Lunch Tour (in Zurich): sinokultur in the salon with Xinyu Han More

News

Chinese cars: Fewer exports to Russia reduce growth

After two consecutive years of growth, Chinese car exporters now expect a slowdown. On Thursday, Cui Dongshu, Secretary General of the Chinese Car Industry Association (CPCA), said that he does not expect any export growth in the electric segment in 2025. In 2024, there had still been an increase of a good 24 percent to 1.29 million exported new energy vehicles (NEVs). Overall exports across all segments are also likely to slow down.

In 2024, China exported 4.8 million cars – an increase of 25 percent compared to the previous year. In 2023, exports had even increased by 36 percent. The China Passenger Car Association (CPCA) forecasts growth prospects of just ten percent for the current year. In particular, fewer exports to Russia are responsible for the subdued expectations. Nevertheless, China is likely to maintain its title as the world’s largest car exporter ahead of Japan for the third year in a row.

The main destinations for China’s cars in 2024 included Russia, Mexico and the United Arab Emirates. Exports to Thailand, Australia and the UK, on the other hand, declined. The investigations into possible EU countervailing duties for electric cars and their introduction in October also weighed on exports.

Less growth in the domestic market for 2025

Car sales in China grew by 5.3 percent to around 23 million vehicles in 2024 – the fourth consecutive year of significant growth. Electric cars grew even faster, with sales increasing by more than 40 percent. NEVs now account for 47.2 percent of car sales.

For 2025, on the other hand, the CPCA predicts overall growth of just two percent. However, NEV sales are expected to grow by 20 percent, driving the share of NEVs in total sales to 57 percent.

Over 6.6 million car buyers took advantage of government subsidies of up to 2,700 euros for NEVs and 2,130 euros for efficient gasoline cars. This year, owners of old cars can benefit from a trade-in program for new cars designed to stimulate the economy. Deutsche Bank expects this program to increase sales by three million vehicles. rtr

  • Autoindustrie

Healthcare system: Shanghai wants to approve foreign hospitals

The city of Shanghai plans to permit foreign-owned hospitals. It is China’s first city to move forward with such plans. In September, the central government announced that it would allow purely foreign-owned hospitals at nine locations in the country. In addition to Shanghai, Beijing is also one of these locations.

The aim is to attract investment, improve the business climate among foreign investors and boost the world’s second-largest economy, which has been experiencing slow growth. On Wednesday, the city government announced on its website that important economic zones such as Lingang and Hongqiao are being considered investment locations in Shanghai.

Expats are also likely to welcome the initiative. Potential foreign owners must provide advanced hospital management concepts, models and service standards as well as state-of-the-art medical technologies and equipment at an international level. Foreign-owned hospitals must also employ at least 50 percent of their medical and technical staff in mainland China. Facilities that wish to specialize in certain areas are not permitted. rtr/jul

  • Gesundheitssystem

Regulation: Beijing targets EU instrument

Beijing has declared the European Union’s measures to protect its companies from foreign subsidies a barrier to trade and investment. The Chinese Ministry of Commerce published the results of an investigation into the EU Foreign Subsidies Regulation on Thursday and highlighted the “selective implementation” as the main problem. The investigation began in July 2023.

The ministry proposed bilateral talks on this with the EU, but also said that “other appropriate measures” could be taken – including recommendations for “retaliatory measures.” A spokesman said that requesting the EU to discuss and amend or adjust the FSR was a possibility.

The Ministry of Commerce accuses the EU of initiating FSR investigations, including “surprise inspections,” only into Chinese companies that had participated in public procurement. This means that “Chinese products are being treated more unfavorably in the process of exporting to the EU than products from third countries.”

FSR also applied to other third countries

This has resulted in the abandonment of tendering projects worth around one billion euros, the Chinese Chamber of Commerce to the EU added in a statement, warning: “In addition, Chinese companies are reconsidering their investment strategies in the EU to avoid further scrutiny under the FSR, leading to a suspension, reduction or delay in participation in EU investment projects.”

Jens Eskelund, President of the European Union Chamber of Commerce in China, defended the regulation in a statement as “country-agnostic.” He said the measure was “aimed at counteracting the distortive effects of subsidies to ensure a level playing field for companies in the EU internal market.” The EU Commission has already applied the FSR in cases involving other third countries.

The FSR gives Brussels the authority to probe subsidies. The EU regulatory authorities can impose fines, suspend tenders or stop state takeovers altogether. Based on this law, the EU launched various investigations last year, including against a Chinese train manufacturer that wanted to sell trains in Bulgaria, which the company subsequently withdrew. Last year, the European Commission also searched the offices of Chinese safety equipment supplier Nuctech in Poland and the Netherlands. ari

  • EU-Binnenmarkt
  • EU-Handelskammer

Column

Xi Jinping and China’s Year of the Snake

By Johnny Erling
Johnny Erling schreibt die Kolumne für die China.Table Professional Briefings

Soon it will be that time again. Official China comes to a standstill while its billion-strong population heads home – for the world’s largest voluntary mass migration. Chinese New Year and the Chunjie Spring Festival (春节) are just around the corner. Like every year, city dwellers will work through the last weekend before the traditional family festival so they can increase their statutory vacation time to eight consecutive days. From January 28 除夕 (China’s New Year’s Eve) to February 4, the nation will have time off to visit family, relatives and friends and go on vacation.

You can already feel how the country is switching into spring festival mode, while its transport planners are going into overdrive. In 40 days from January 14 to February 22, they have to manage a gigantic travel exodus. Railway companies are already offering online tickets in advance to transport the expected 510 million travelers to, from and between cities and the countryside on time. Airports and airlines are expecting 90 million passengers. Hordes of car drivers will form long shapes of their own – in China’s Year of the Snake.

January 29 marks the beginning of China’s Spring Festival and a new year under the zodiac sign of the snake. Houses and streets are decorated with golden slogans and door frames are adorned with couplets. Portraits of Xi Jinping, who was born in the Year of the Snake in 1953, and Mao are a must at the New Year stalls. Source: Johnny Erling

Beijing has made consumption at all costs its first civic duty. It wants to use the Spring Festival to spark untapped demand and stimulate growth that is urgently needed for the stability of the system. The state retroactively increased monthly wages for civil servants and announced price cuts for cell phones, household appliances and electric cars. Cities like Shanghai are sprucing themselves up for a good mood and a new shopping appetite.

Thanks to its growing influence over the United Nations, China’s leadership has received a boost for its lavish celebrations. UNESCO presented Beijing with yet another treat: After declaring the construction ensemble of Beijing’s imperial north-south central axis – including Tiananmen Square, the Mao Mausoleum and colossal state buildings – a World Heritage Site last July, it now elevated the traditional Spring Festival, its customs and social traditions to the status of a new Intangible Cultural Heritage of Humanity in December. China is not only at the top of the UNESCO lists with 44 Chinese cultural assets and cultural practices that have been ennobled as a World Heritage Site; it can now also demonstrate to the world the superiority and unique selling point of its “more than 5,000-year-old civilization,” the CC theory magazine Qiushi proudly wrote: “It is the only major civilization in the world that has maintained its continuity and development in the form of a country to this day.”

State and party media celebrate UNESCO’s decision to designate China’s Spring Festival as an Intangible Cultural Heritage of Humanity as a political and cultural breakthrough for China as a nation and President Xi Jinping.

Beijing propagates the UNESCO decision as support for its plans to form a cultural united front of Chinese identity worldwide: “In a way, the Spring Festival is a symbol of Chinese culture that is generally accepted, recognized and appreciated. For every Chinese living in another country, it is a reason never to forget their homeland.” Referring to the global initiatives and strategies of President Xi Jinping, who repeatedly speaks of the global “Community of Common Destiny” with the People’s Republic, China Daily commented on the UNESCO decision: “The move helps to practice global civilization initiatives and promotes the building of a community with a shared future for mankind.”

According to the lunar calendar, the traditional Spring Festival begins on the first day (大年初一), which falls on January 29. This year, citizens have January 28 off to prepare for New Year’s Eve (除夕), when traditionally a lot of food is eaten, and at night, the evil spirits of the past dragon year are driven away with roaring noise (fireworks are banned in many cities).

The snake (蛇) is expected to bring only good spirits of luck and prosperity. It is in sixth place in the order of the twelve zodiac signs in the calendar. Fortune-tellers assign them one of the five elements: metal, wood, water, fire and earth. In 2025, snake and wood come together, representing environmentally friendly green and promising additional fortune.

The snake is the zodiac sign for the year 2025. Cantonese cartoonist Kuang Biao draws this year’s symbolic animal as a crowned flower snake and wishes everyone a better life. Source Courtesy Kuang Biao

Calendar interpreters need to know how to count. The cycle lasts 60 years before the same element again meets the same animal sign. Fengshui masters use the 24 solar terms of a year to determine the new year. The first is called Lichun (立春), the beginning of spring. According to Lee’s calculations, it falls on February 3. In the year of the snake 2025, the unique phenomenon of two Lichun periods occurs, a year with double spring 双春年. It ends with the second lichun on February 4, 2026.

As an avowed Marxist and atheist, China’s current autocrat Xi Jinping does not listen to fortune-tellers. But he does follow Chinese traditions. He once allowed himself to be filmed as he painted China’s lucky sign 福 on silk paper during the Spring Festival. Following ancient custom, he pinned it upside down on the door of the house he was entering, intended as a play on words with Chinese characters meaning: “May good fortune step into your home.”

The fortune-tellers tolerated by the party as folklore (as long as they only foretell positive things) praise 2025 as a good year for Xi, who was born in 1953 under the zodiac sign of the snake. However, if “snake meets snake,” they say, the person enters a fateful year (本命年).

Snake symbolizes positive change

Unlike in the West, where the reptile is considered devious and dangerous due to its role in the biblical Genesis creation narrative for tempting Eve to bite the apple of enlightenment and being cast from paradise with Adam, China’s snake symbolizes more positive change.

This was already the case in 2013, Xi’s first year in office after taking power of the Communist Party. As a correspondent in Beijing, I wrote: “If the new communist leaders of the world power China still need advice on how to master the new year shortly before the Year of the Snake, they don’t have to look far. A few blocks away from them, the world of fortune-tellers, after being banned for decades, has recently been allowed to re-emerge in Beijing.” In the Hutong alleyway between the Lama and Confucius temples, supposed fortune-tellers and horoscope interpreters were suddenly setting up shop, selling lucky amulets, Buddhist holy figures and magical accessories. The demand was huge.

The annual horoscope books by Hong Kong fengshui master Edward Li Kuiming have been bestsellers since 2013. The new edition for the Year of the Snake also offers predictions on the “Russia-Ukraine war”, the “China-US-Russia” relationship, “China-Europe-Japan” and also on “Musk and Trump.” The person Xi Jinping is taboo.

Back then, I discovered stacks of horoscope books in their stalls that had been flown in, written by Hong Kong fengshui master Edward Li Kuiming. His 2013 edition even made prophecies about the new leader Xi Jinping with his photo on the book cover and was a minor political sensation for Beijing. Until then, prophecies about Communist Party leaders had been prosecuted as spreading superstition.

Hong Kong’s soothsayer Edward Li carefully formulated his predictions about Xi. First, he noted that the Snake Year 2013 was not only Xi’s Benmingnian because he was born in 1953, but was also associated with the element of water, which was even rarer and only occurred every 60 years. Xi was therefore assured a bright future if he focused above all on solving China’s internal problems, paid attention to the succession arrangements and properly handled the development of Tibet and Xinjiang. From today’s perspective, Master Li was totally wrong. Xi had China’s constitution amended so that he could continue to rule without a successor, intensified repression in Xinjiang and Tibet, pursued an expansive foreign policy when he launched his Silk Road offensive in 2013 and literally cemented China’s claim to power in the South China Sea by building artificial islands.

Horoscopes with predictions about Trump and Musk

It has not tarnished the reputation of the fengshui master. Edward Li’s horoscopes are bestsellers in Hong Kong and continue to be published every year. In his new edition for the Snake Year 2025, he promises predictions about Trump and Musk, the triangle between China, the USA and Russia and about China, Europe and Japan. However, the cover no longer features a picture of Xi.

China is coloring up the snake for 2025. Cantonese cartoonist Kuang Biao, who can only publish his satirical drawings on his personal blog, followed suit. However, his colorful snake looks like a crowned, flower-painted monster. Perhaps he was inspired by the centuries-old ghost stories of Liaozhai 聊斋志异, where animal demons deceive people about their true form. Traditionally, the reptile was also considered evil in China before becoming a symbol of good luck after the 18th century.

Kuang’s second drawing for the Year of the Snake is entitled 一带一路 (Belt and Road). A snake whose body winds through the desert as a road, an allusion to China’s Silk Road offensive.

New Year 2025 cartoon: Kuang Biao’s allusion to the “Belt and Road” Silk Road Initiative initiated by Xi Jinping since the 2013 Snake Year. Source: Curtesy Kuang Biao

Because snakes are known to shed their skin regularly, Japan sees them as hopeful and auspicious messengers of transformation and regeneration, which also celebrates the Spring Festival. Xi, born in the Year of the Snake, takes a different view. For the new year 2025, he assured that he would do everything to ensure that his party keeps its skin, “neither degenerates nor changes its flag or color” (确保党永远不变质、不变色、不变味).

  • China
  • Transformation

Executive Moves

Robert Jäger has been Head of Interior Purchasing at BMW China since this month. Jäger has already gained more than seven years of experience as a purchasing specialist in the automotive industry at BMW in Munich. He is now based in Beijing.

Wei Tong has been Manager of Procurement Department, Greater China, at Pulcra Chemicals since November. Wei joins the Bavarian chemical group from BASF. He is based in Shanghai.

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

Dessert

Who is more curious about whom? In Kunming, A Dai and Meng Meng officially introduced themselves to visitors for the first time. The two red pandas are twins and six months old. They live in the Yunnan Wildlife Park, which is located a few kilometers outside of Kunming and borders the Jindian National Forest Park.

China.Table editorial team

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    Western companies increasingly outsource activities to China in parallel structures – even if it makes no sense from a market economy perspective. In a new report, the EU Chamber of Commerce warns of the consequences of this silo formation. While companies still localize for commercial considerations, more than a third now also cite regulatory requirements and geopolitical concerns as reasons.

    In addition to rising overall costs and global compliance risks, the formation of silos can impact innovation and competitiveness. Read Jörn Petring’s analysis to learn about the EU Chamber of Commerce’s other concerns.

    President-elect Donald Trump has once again caused irritation with his fantasies of taking over Greenland. However, he also highlights the geostrategic importance of the island. Together with colleagues from Security.Table and Europe.Table, Fabian Peltsch explains why Greenland is so important for all major powers.

    The Year of the Snake begins in China at the end of January. Only good spirits of luck and prosperity are expected from this zodiac sign. Fortune-tellers also predict 2025 to be an excellent year for head of state and party leader Xi Jinping, as he was also born under the zodiac sign of the snake in 1953. When “snake meets snake,” that person finds himself in a fateful year, writes Johnny Erling, who has explored the depths of Chinese astrology.

    Have a great read!

    Your
    Julia Fiedler
    Image of Julia  Fiedler

    Feature

    Geopolitics: Why localization worries the EU Chamber of Commerce

    Container terminal in the port of Qingdao.

    In a new report, the European Chamber of Commerce in China has strongly warned of the dangers of so-called “siloing.” This trend describes Western companies outsourcing more and more activities to China in parallel structures – although, according to the chamber, this does not actually make sense from a market economy perspective.

    Many companies continue to localize for commercial reasons, said Chamber President Jens Eskelund on Thursday at the presentation of the Siloing report in Beijing. However, the chamber increasingly sees companies “separating their activities due to regulatory requirements or geopolitical concerns.”

    Regulatory requirements and geopolitics

    Around three-quarters of the 113 chamber members surveyed justified their adjustments to products and services in China with the aim of better adapting to the wishes of Chinese customers. However, more than one-third of the companies stated that they were adapting in order to comply with local regulations. A quarter did so to react to political changes.

    Geopolitical tensions, trade conflicts and China’s policy of self-sufficiency, coupled with rising regulatory risks at national and global level, have led to this trend, according to the chamber.

    Some members had made “significant investments” in this process, and they now closely resembled local companies in China. They have localized their supply chains, workforce, sales and procurement functions, and isolated their research and development departments and data and IT systems in order to adapt to evolving regulatory requirements and be seen as a “reliable partner” by Chinese authorities as well as their local partners and customers.

    However, this is associated with considerable compromises. Silong would lead to “rising overall costs and global compliance risks.” It would also require doubling operating and production capacities, the chamber summarized. The result would be “inefficiencies, a reduced ability to innovate and a loss of international competitiveness”.

    The chamber identified another problem. Although companies do everything they can to appear Chinese, there is no guarantee that this will pay off. For example, there are many examples of public contracts not being awarded to Western companies. And this even though they had essentially built up a completely Chinese company.

    A threat to global competitiveness

    Siloing might alleviate some problems in the China business, but according to the Chamber report, it also leads to negative side effects such as:

    • Higher costs due to the need to duplicate operations.
    • Although the siloing of IT infrastructures solves the compliance problems in China, it affects global connectivity and business as a whole.
    • This would put foreign companies at a considerable disadvantage compared to their Chinese competitors, as they could only operate with a single system.
    • The growing dominance of Chinese standards poses the risk that foreign companies will lose their global competitiveness if these standards are adopted internationally.

    Also disadvantages for China’s economy

    However, the chamber believes that the need to silo poses risks not just for EU companies, but also for China’s economy. “Although some European companies are onshoring supply chains into China to increase resilience, a similar number are moving their supply chains out for the same reason,” the report states. It argues that the outflow of foreign direct investment to other markets – which is already underway – could increase if companies find the cost of staying too high.

    This could lead to significant losses of jobs and tax revenue in China. At the same time, it is conceivable that international markets will increasingly develop instruments to better protect their own companies from Chinese competition on domestic soil.

    Trump makes the situation even more complicated

    The chamber fears that with Donald Trump in the White House, uncertainty will continue to increase. “It is truly unique that we find ourselves in a situation where so much is a guessing game,” said Chamber President Eskelund. In light of Donald Trump’s inauguration as the new US president on January 20, it is impossible to form an opinion on what the world will look like in three weeks, he added. However, the chamber expects a relatively good year for global trade despite the threat of tariffs. Problems with trade could become more noticeable in 2026 due to a sharpening of geopolitical fronts.

    • EU-Handelskammer

    Sea routes, resources, military supremacy: Why Greenland is so important

    US soldiers at Thule Air Base, the northernmost base of the US Air Force, on the northwest coast of Greenland, October 8, 2019.

    It is not the first time that US President-elect Donald Trump has irritated the world with his desire to seize Greenland. Yet he can already do whatever he wants there, says security expert Michael Paul from the German Institute for International and Security Affairs. “In last year’s Greenland Arctic strategy, Greenland – and therefore also Denmark – expressed the wish for increased American involvement and investment,” says Paul. This would also ease the burden on their own national budget.

    Both Greenland and Denmark have rejected the purchase offer. However, on Thursday, Nuuk expressed its willingness to cooperate with the United States in developing raw materials. The USA also maintains the large Thule Air Base on the island. There is no need to soften the treaties on cooperation, explains Paul, and military threats are “completely inappropriate, with a good ally like Denmark anyway.” However, he argues that Trump’s strategy has always been to make big announcements in order to achieve minimal goals in the end. It is clear that Trump wants more influence in Greenland, he adds.

    Denmark wants to avoid a verbal escalation

    Many threats have not materialized, a spokesperson for the EU Commission said on Thursday, commenting on Trump’s statements that he would not shy away from using force. The Commission did not want to answer every hypothetical question. In other words, Brussels reacted evasively. Instead, they said they look forward to working with the future US administration on a strong transatlantic agenda. Their priority is to prepare as many avenues of cooperation as possible with a view to common strategic goals.

    Cooperation may not be a priority for Trump, who likes to assert his own interests. When the US president-elect threatens Denmark with tariffs, he primarily demonstrates his unawareness: The US can only impose punitive tariffs against the EU as a whole, not against an individual member state. When asked, Trump said he would not rule out using military force to protect interests in Greenland. This also includes Denmark because although Greenland left what was known as the European Economic Community in 1982 following a referendum, it is still considered part of the Danish kingdom.

    One spokesperson for the EU Commission stressed that the sovereignty of states must be respected. And yes, should Denmark call on its European partners for help in a hypothetical conflict over Greenland, the obligation to provide assistance under Article 42(7) would apply. But why has Brussels reacted so cautiously to the threats?

    According to diplomats in Brussels, Denmark has no interest in a verbal escalation and has therefore requested restraint. Adding fuel to the fire with additional statements now will only make the negotiating position more difficult later. Accordingly, Trump’s threats regarding Greenland were not on the agenda of the EU ambassadors in Brussels on Thursday.

    Moscow’s interests in the Arctic

    However, Moscow reacted quickly to Trump’s bold plans: “The Arctic is a zone of our national interests, our strategic interests,” said Kremlin spokesman Dmitry Peskov on Thursday. “We are interested in preserving the atmosphere of peace and stability in the Arctic zone.”

    In a spectacular submarine operation in the summer of 2007, Russia planted a flag on the seabed of the North Pole at a depth of more than 4,200 meters, underlining its claim to the area. Almost 20 years ago, Russia reactivated old Soviet military bases in the Arctic and is building up new forces. The modernization of the strategic submarines of the Northern Fleet is also underway. In December 2023, President Vladimir Putin visited the large Russian shipyard Sevmash on the White Sea, which is to build three Borey-A class strategic submarines in the coming years. It is the fourth and most modern generation of Russian nuclear submarines.

    Russia’s maritime strategy, updated in the summer of 2022, attributes great importance to the Arctic. Russia’s plans are defined in 21 points, from exploiting natural resources and expanding ports and sea routes to research. Moscow’s main focus is to secure its claim to the Arctic region. As Table.Briefings reported, both NATO and the German government see a need to adjust their security policy in the Arctic and are adapting their considerations accordingly. A cooperative approach by neighboring states in the Arctic region no longer seems to be a reality.

    Beijing also seeks to exploit raw materials

    As if there weren’t enough disputes in the region, China also wants to benefit economically from Greenland. As part of its “Polar Silk Road,” the Arctic supplement to the “Belt and Road” initiative, Beijing wants to expand its influence in Greenland. China is already the island’s second-largest trading partner after Denmark, for example, for fishery products. However, Beijing primarily focuses on strategic resources such as rare earths and uranium. Large-scale projects such as the Kuannersuit uranium mining project or the construction of two airports by the state-owned China Communications Construction Company (CCCC) failed due to Washington’s veto.

    China is currently reluctant to invest overseas due to its own economic downturn. Nevertheless, Greenland remains a key regional strategic target, as evidenced by regular meetings between Chinese and Greenlandic politicians. Greenland’s wish for more autonomy and the feeling of being patronized by Copenhagen and Washington could lead to Nuuk becoming more open to Chinese investment. Above all, if the geopolitical situation in the Arctic changes, Russia and China might further expand their partnership there militarily.

    • European Defense

    Events

    Jan 14, 2025; 11 a.m. CET (6 p.m. CST)
    Sino German Center at Frankfurt School, Webinar: Outlook for China’s Economy in the Year of the Snake More

    Jan 15, 2025; 2 p.m. CET (9 p.m. CST)
    Merics, Wecast: Meric’s China Forecast 2025 More

    Jan 15, 2025; 2 p.m. CST
    German Chamber of Commerce, GCC Networking (in Changchun): Fireside Chat with Ambassador Dr. Patricia Flor More

    Jan 17, 2025; 2 p.m. CST
    German Chamber of Commerce, Knowledge Hub (in Shanghai): Global E-Commerce Logistics: Navigating Growth & Innovation in China and Germany More

    Jan 17, 2025; 12 p.m. CET
    sinokultur, Art over Lunch Tour (in Zurich): sinokultur in the salon with Xinyu Han More

    News

    Chinese cars: Fewer exports to Russia reduce growth

    After two consecutive years of growth, Chinese car exporters now expect a slowdown. On Thursday, Cui Dongshu, Secretary General of the Chinese Car Industry Association (CPCA), said that he does not expect any export growth in the electric segment in 2025. In 2024, there had still been an increase of a good 24 percent to 1.29 million exported new energy vehicles (NEVs). Overall exports across all segments are also likely to slow down.

    In 2024, China exported 4.8 million cars – an increase of 25 percent compared to the previous year. In 2023, exports had even increased by 36 percent. The China Passenger Car Association (CPCA) forecasts growth prospects of just ten percent for the current year. In particular, fewer exports to Russia are responsible for the subdued expectations. Nevertheless, China is likely to maintain its title as the world’s largest car exporter ahead of Japan for the third year in a row.

    The main destinations for China’s cars in 2024 included Russia, Mexico and the United Arab Emirates. Exports to Thailand, Australia and the UK, on the other hand, declined. The investigations into possible EU countervailing duties for electric cars and their introduction in October also weighed on exports.

    Less growth in the domestic market for 2025

    Car sales in China grew by 5.3 percent to around 23 million vehicles in 2024 – the fourth consecutive year of significant growth. Electric cars grew even faster, with sales increasing by more than 40 percent. NEVs now account for 47.2 percent of car sales.

    For 2025, on the other hand, the CPCA predicts overall growth of just two percent. However, NEV sales are expected to grow by 20 percent, driving the share of NEVs in total sales to 57 percent.

    Over 6.6 million car buyers took advantage of government subsidies of up to 2,700 euros for NEVs and 2,130 euros for efficient gasoline cars. This year, owners of old cars can benefit from a trade-in program for new cars designed to stimulate the economy. Deutsche Bank expects this program to increase sales by three million vehicles. rtr

    • Autoindustrie

    Healthcare system: Shanghai wants to approve foreign hospitals

    The city of Shanghai plans to permit foreign-owned hospitals. It is China’s first city to move forward with such plans. In September, the central government announced that it would allow purely foreign-owned hospitals at nine locations in the country. In addition to Shanghai, Beijing is also one of these locations.

    The aim is to attract investment, improve the business climate among foreign investors and boost the world’s second-largest economy, which has been experiencing slow growth. On Wednesday, the city government announced on its website that important economic zones such as Lingang and Hongqiao are being considered investment locations in Shanghai.

    Expats are also likely to welcome the initiative. Potential foreign owners must provide advanced hospital management concepts, models and service standards as well as state-of-the-art medical technologies and equipment at an international level. Foreign-owned hospitals must also employ at least 50 percent of their medical and technical staff in mainland China. Facilities that wish to specialize in certain areas are not permitted. rtr/jul

    • Gesundheitssystem

    Regulation: Beijing targets EU instrument

    Beijing has declared the European Union’s measures to protect its companies from foreign subsidies a barrier to trade and investment. The Chinese Ministry of Commerce published the results of an investigation into the EU Foreign Subsidies Regulation on Thursday and highlighted the “selective implementation” as the main problem. The investigation began in July 2023.

    The ministry proposed bilateral talks on this with the EU, but also said that “other appropriate measures” could be taken – including recommendations for “retaliatory measures.” A spokesman said that requesting the EU to discuss and amend or adjust the FSR was a possibility.

    The Ministry of Commerce accuses the EU of initiating FSR investigations, including “surprise inspections,” only into Chinese companies that had participated in public procurement. This means that “Chinese products are being treated more unfavorably in the process of exporting to the EU than products from third countries.”

    FSR also applied to other third countries

    This has resulted in the abandonment of tendering projects worth around one billion euros, the Chinese Chamber of Commerce to the EU added in a statement, warning: “In addition, Chinese companies are reconsidering their investment strategies in the EU to avoid further scrutiny under the FSR, leading to a suspension, reduction or delay in participation in EU investment projects.”

    Jens Eskelund, President of the European Union Chamber of Commerce in China, defended the regulation in a statement as “country-agnostic.” He said the measure was “aimed at counteracting the distortive effects of subsidies to ensure a level playing field for companies in the EU internal market.” The EU Commission has already applied the FSR in cases involving other third countries.

    The FSR gives Brussels the authority to probe subsidies. The EU regulatory authorities can impose fines, suspend tenders or stop state takeovers altogether. Based on this law, the EU launched various investigations last year, including against a Chinese train manufacturer that wanted to sell trains in Bulgaria, which the company subsequently withdrew. Last year, the European Commission also searched the offices of Chinese safety equipment supplier Nuctech in Poland and the Netherlands. ari

    • EU-Binnenmarkt
    • EU-Handelskammer

    Column

    Xi Jinping and China’s Year of the Snake

    By Johnny Erling
    Johnny Erling schreibt die Kolumne für die China.Table Professional Briefings

    Soon it will be that time again. Official China comes to a standstill while its billion-strong population heads home – for the world’s largest voluntary mass migration. Chinese New Year and the Chunjie Spring Festival (春节) are just around the corner. Like every year, city dwellers will work through the last weekend before the traditional family festival so they can increase their statutory vacation time to eight consecutive days. From January 28 除夕 (China’s New Year’s Eve) to February 4, the nation will have time off to visit family, relatives and friends and go on vacation.

    You can already feel how the country is switching into spring festival mode, while its transport planners are going into overdrive. In 40 days from January 14 to February 22, they have to manage a gigantic travel exodus. Railway companies are already offering online tickets in advance to transport the expected 510 million travelers to, from and between cities and the countryside on time. Airports and airlines are expecting 90 million passengers. Hordes of car drivers will form long shapes of their own – in China’s Year of the Snake.

    January 29 marks the beginning of China’s Spring Festival and a new year under the zodiac sign of the snake. Houses and streets are decorated with golden slogans and door frames are adorned with couplets. Portraits of Xi Jinping, who was born in the Year of the Snake in 1953, and Mao are a must at the New Year stalls. Source: Johnny Erling

    Beijing has made consumption at all costs its first civic duty. It wants to use the Spring Festival to spark untapped demand and stimulate growth that is urgently needed for the stability of the system. The state retroactively increased monthly wages for civil servants and announced price cuts for cell phones, household appliances and electric cars. Cities like Shanghai are sprucing themselves up for a good mood and a new shopping appetite.

    Thanks to its growing influence over the United Nations, China’s leadership has received a boost for its lavish celebrations. UNESCO presented Beijing with yet another treat: After declaring the construction ensemble of Beijing’s imperial north-south central axis – including Tiananmen Square, the Mao Mausoleum and colossal state buildings – a World Heritage Site last July, it now elevated the traditional Spring Festival, its customs and social traditions to the status of a new Intangible Cultural Heritage of Humanity in December. China is not only at the top of the UNESCO lists with 44 Chinese cultural assets and cultural practices that have been ennobled as a World Heritage Site; it can now also demonstrate to the world the superiority and unique selling point of its “more than 5,000-year-old civilization,” the CC theory magazine Qiushi proudly wrote: “It is the only major civilization in the world that has maintained its continuity and development in the form of a country to this day.”

    State and party media celebrate UNESCO’s decision to designate China’s Spring Festival as an Intangible Cultural Heritage of Humanity as a political and cultural breakthrough for China as a nation and President Xi Jinping.

    Beijing propagates the UNESCO decision as support for its plans to form a cultural united front of Chinese identity worldwide: “In a way, the Spring Festival is a symbol of Chinese culture that is generally accepted, recognized and appreciated. For every Chinese living in another country, it is a reason never to forget their homeland.” Referring to the global initiatives and strategies of President Xi Jinping, who repeatedly speaks of the global “Community of Common Destiny” with the People’s Republic, China Daily commented on the UNESCO decision: “The move helps to practice global civilization initiatives and promotes the building of a community with a shared future for mankind.”

    According to the lunar calendar, the traditional Spring Festival begins on the first day (大年初一), which falls on January 29. This year, citizens have January 28 off to prepare for New Year’s Eve (除夕), when traditionally a lot of food is eaten, and at night, the evil spirits of the past dragon year are driven away with roaring noise (fireworks are banned in many cities).

    The snake (蛇) is expected to bring only good spirits of luck and prosperity. It is in sixth place in the order of the twelve zodiac signs in the calendar. Fortune-tellers assign them one of the five elements: metal, wood, water, fire and earth. In 2025, snake and wood come together, representing environmentally friendly green and promising additional fortune.

    The snake is the zodiac sign for the year 2025. Cantonese cartoonist Kuang Biao draws this year’s symbolic animal as a crowned flower snake and wishes everyone a better life. Source Courtesy Kuang Biao

    Calendar interpreters need to know how to count. The cycle lasts 60 years before the same element again meets the same animal sign. Fengshui masters use the 24 solar terms of a year to determine the new year. The first is called Lichun (立春), the beginning of spring. According to Lee’s calculations, it falls on February 3. In the year of the snake 2025, the unique phenomenon of two Lichun periods occurs, a year with double spring 双春年. It ends with the second lichun on February 4, 2026.

    As an avowed Marxist and atheist, China’s current autocrat Xi Jinping does not listen to fortune-tellers. But he does follow Chinese traditions. He once allowed himself to be filmed as he painted China’s lucky sign 福 on silk paper during the Spring Festival. Following ancient custom, he pinned it upside down on the door of the house he was entering, intended as a play on words with Chinese characters meaning: “May good fortune step into your home.”

    The fortune-tellers tolerated by the party as folklore (as long as they only foretell positive things) praise 2025 as a good year for Xi, who was born in 1953 under the zodiac sign of the snake. However, if “snake meets snake,” they say, the person enters a fateful year (本命年).

    Snake symbolizes positive change

    Unlike in the West, where the reptile is considered devious and dangerous due to its role in the biblical Genesis creation narrative for tempting Eve to bite the apple of enlightenment and being cast from paradise with Adam, China’s snake symbolizes more positive change.

    This was already the case in 2013, Xi’s first year in office after taking power of the Communist Party. As a correspondent in Beijing, I wrote: “If the new communist leaders of the world power China still need advice on how to master the new year shortly before the Year of the Snake, they don’t have to look far. A few blocks away from them, the world of fortune-tellers, after being banned for decades, has recently been allowed to re-emerge in Beijing.” In the Hutong alleyway between the Lama and Confucius temples, supposed fortune-tellers and horoscope interpreters were suddenly setting up shop, selling lucky amulets, Buddhist holy figures and magical accessories. The demand was huge.

    The annual horoscope books by Hong Kong fengshui master Edward Li Kuiming have been bestsellers since 2013. The new edition for the Year of the Snake also offers predictions on the “Russia-Ukraine war”, the “China-US-Russia” relationship, “China-Europe-Japan” and also on “Musk and Trump.” The person Xi Jinping is taboo.

    Back then, I discovered stacks of horoscope books in their stalls that had been flown in, written by Hong Kong fengshui master Edward Li Kuiming. His 2013 edition even made prophecies about the new leader Xi Jinping with his photo on the book cover and was a minor political sensation for Beijing. Until then, prophecies about Communist Party leaders had been prosecuted as spreading superstition.

    Hong Kong’s soothsayer Edward Li carefully formulated his predictions about Xi. First, he noted that the Snake Year 2013 was not only Xi’s Benmingnian because he was born in 1953, but was also associated with the element of water, which was even rarer and only occurred every 60 years. Xi was therefore assured a bright future if he focused above all on solving China’s internal problems, paid attention to the succession arrangements and properly handled the development of Tibet and Xinjiang. From today’s perspective, Master Li was totally wrong. Xi had China’s constitution amended so that he could continue to rule without a successor, intensified repression in Xinjiang and Tibet, pursued an expansive foreign policy when he launched his Silk Road offensive in 2013 and literally cemented China’s claim to power in the South China Sea by building artificial islands.

    Horoscopes with predictions about Trump and Musk

    It has not tarnished the reputation of the fengshui master. Edward Li’s horoscopes are bestsellers in Hong Kong and continue to be published every year. In his new edition for the Snake Year 2025, he promises predictions about Trump and Musk, the triangle between China, the USA and Russia and about China, Europe and Japan. However, the cover no longer features a picture of Xi.

    China is coloring up the snake for 2025. Cantonese cartoonist Kuang Biao, who can only publish his satirical drawings on his personal blog, followed suit. However, his colorful snake looks like a crowned, flower-painted monster. Perhaps he was inspired by the centuries-old ghost stories of Liaozhai 聊斋志异, where animal demons deceive people about their true form. Traditionally, the reptile was also considered evil in China before becoming a symbol of good luck after the 18th century.

    Kuang’s second drawing for the Year of the Snake is entitled 一带一路 (Belt and Road). A snake whose body winds through the desert as a road, an allusion to China’s Silk Road offensive.

    New Year 2025 cartoon: Kuang Biao’s allusion to the “Belt and Road” Silk Road Initiative initiated by Xi Jinping since the 2013 Snake Year. Source: Curtesy Kuang Biao

    Because snakes are known to shed their skin regularly, Japan sees them as hopeful and auspicious messengers of transformation and regeneration, which also celebrates the Spring Festival. Xi, born in the Year of the Snake, takes a different view. For the new year 2025, he assured that he would do everything to ensure that his party keeps its skin, “neither degenerates nor changes its flag or color” (确保党永远不变质、不变色、不变味).

    • China
    • Transformation

    Executive Moves

    Robert Jäger has been Head of Interior Purchasing at BMW China since this month. Jäger has already gained more than seven years of experience as a purchasing specialist in the automotive industry at BMW in Munich. He is now based in Beijing.

    Wei Tong has been Manager of Procurement Department, Greater China, at Pulcra Chemicals since November. Wei joins the Bavarian chemical group from BASF. He is based in Shanghai.

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

    Dessert

    Who is more curious about whom? In Kunming, A Dai and Meng Meng officially introduced themselves to visitors for the first time. The two red pandas are twins and six months old. They live in the Yunnan Wildlife Park, which is located a few kilometers outside of Kunming and borders the Jindian National Forest Park.

    China.Table editorial team

    CHINA.TABLE EDITORIAL OFFICE

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