Table.Briefing: China

Consultations in Berlin + Blinken in Beijing

Dear reader,

A football legend from the Ruhr area once said, “Those who talk a lot also lie a lot.” Now, the former national player Ernst Kuzorra was by no means an intellectual luminary, but he compensated for the perceived lack with invaluable human instinct.

If we apply the pearls of wisdom of a simple man to world politics, Berlin and Beijing must be racking up on both of those accounts these days. Government consultations between nine ministries here, a hoped-for meeting between the party leader and the foreign minister of the number one superpower there. And China is always in the midst of it, serving as a new reference point for topics such as peace and security, economic growth or climate change.

However, we can safely assume that, in principle, a lot of truth is also being spoken when middleweights and heavyweights of the geopolitical political arena come together. Germany’s politicians will certainly tell their Chinese counterparts during the 7th government consultations what they don’t like, as predicted by Finn Mayer-Kuckuk. While US Secretary of State Antony Blinken and President Xi Jinping have already exchanged the interests of China, the USA, and indeed the whole world, as reported by Michael Radunski.

And the Chinese? They are brutally honest when it comes to expressing their opinion. Much more open than we Germans will ever be. And that’s a good thing. Dealing honestly with each other creates clear relationships. Then everyone knows where they stand and can align their own behavior accordingly.

To the late Kuzorra’s credit, we could replace the verb “lie” in his quote about the grassroots of life with the verb “fib”. Because it’s very likely that it’s part of the political craft these days as well. Which party would want to reveal all the details of their strategy?

In that case, the former striker would have hit the bullseye posthumously with his claim. No wonder, after all, he was the top scorer of Schalke 04.

Your
Marcel Grzanna
Image of Marcel  Grzanna

Feature

Change of pace at introductory consultations

First steps towards rapprochement: Premier Li Qiang with German President Frank-Walter Steinmeier at Bellevue Palace.

German President Frank-Walter Steinmeier has called on China to “use its global influence and leverage over Russia to work towards a just peace” in the Ukraine conflict. At the beginning of the multi-day government visit, Steinmeier received Chinese Premier Li Qiang at Bellevue Palace. Steinmeier did not hesitate to address the issue that weighs heavily on the meeting.

Steinmeier, however, otherwise followed the accepted government line. “Cooperation remains important but has changed in recent years,” according to the Federal President’s Office. China is a partner for Germany and Europe, “but also increasingly a competitor and rival on the political stage.” This corresponds to the assessment and wording of the National Security Strategy from last Wednesday.

New faces on both sides

Chinese government representatives did not have to listen to such confrontational tones during the past six consultations under Angela Merkel. However, even the current seventh ministerial meeting is already a certain success before it begins:

  • There are high-level discussions again. The previous consultations took place in person in 2018 and virtually in 2021. Since the personal encounters five years ago, the world has moved on. Germany’s stance towards China has become more critical, at the latest, since the Russian invasion of Ukraine. Despite the reservations of individual ministers, they are now forced into dialogue through this format.
  • Substantive issues are at the forefront. After the failure of the EU-China summit in 2022, which ended in silence and hostility due to differences over the Ukraine conflict, a broader dialogue is possible in the consultations. All ministries bring topics for which coordination with China is useful if a Chinese interlocutor has arrived.

On the negative side, the preparations were rather meager. The pandemic, not least, has damaged the relationship. There are different people in the government on both sides compared to the previous meeting. Scholz himself is one of the few constants. In Germany, the faces have changed due to the 2021 federal election, and in China, due to government reshuffles by Xi Jinping in March. This affects not only the ministerial level but also the bureaucracy. The web of personal contacts, of existing business cards, is torn. This makes the actual meeting of the heads of government, ministers, and their staff all the more important.

Cosco signs in Hamburg

The conclusion of Cosco’s entry into the port of Hamburg can be seen as a positive signal to Chancellor Olaf Scholz ahead of the consultations. The state-owned shipping company initially hesitated because it was only allowed to acquire 24.99 percent instead of the desired 35 percent of one of the terminals there – and because the deal became the focal point of a critical discussion about Chinese engagement in Europe. On Monday, Cosco signed the agreement, according to terminal operator HHLA.

Cosco has now accepted the conditions that were made more difficult by the federal government in October. Several ministries, including the Ministry for Economic Affairs, had security concerns about the deal. After it became known in spring, that HHLA had registered the terminal as “critical infrastructure”, further examinations were required.

The state-owned shipping company had previously let a decision deadline pass at the end of December 2022, causing unrest in Hamburg. The HHLA had always defended Cosco’s entry as necessary for the Port of Hamburg. Scholz is considered a supporter of the entry. The spirit of de-risking looks different.

Scholz hesitates with investment barriers

Scholz positioned himself similarly flexibly on Monday regarding investment control. He spoke out against comprehensive monitoring of economic relations with China. While it is correct that greater scrutiny is needed when delivering goods for defense or surveillance purposes, he said at a congress of the Federation of German Industries (BDI), “One must be very cautious. But that does not mean subjecting the entire economic activity to administration.”

The background to this is the proposals of the European Commission for enhanced economic security. Brussels will present proposals for the control of investments in China and exports to the People’s Republic on Tuesday. The European Commission is expected to move towards tighter controls.

The industry primarily wants unhindered business

At the BDI conference, there was great consensus between Scholz and the industry representatives in wanting to pursue de-risking but by no means decoupling. This is also claimed to be the line of the seven leading Western industrialized countries (G7), according to Scholz. In the meantime, the United States expressed surprise that the consultations were taking place in such a friendly spirit at all. From their perspective, the G7 consensus was to contain China’s interests as much as possible.

However, the BDI and the German Chambers of Commerce and Industry (DIHK) made it clear to Scholz that they primarily have an interest in unhindered business with China. While they paid lip service to de-risking, they also urged the Chancellor to advocate for improved market access. Officials from the two major umbrella organizations stated that the Chinese government needs to show more willingness to improve the framework conditions.

The unclear nature of de-risking

The stance of the leading associations BDI and DIHK, ahead of the consultations is indeed critical of China. However, it represents different goals compared to the recent positions of the Green-led ministries, the G7, or European Commission President Ursula von der Leyen. Although all actors currently align their position towards China with the term de-risking, they each mean something different by it.

The industry refers to a gradual reduction of business risks, while politics aim to eliminate geopolitical vulnerability. Both goals, if consistently implemented, would impose different requirements on the economy and politics. Risk elimination would entail a painful reduction in German-China business. However, so far, no one is willing to make such a hard decision, and it also remains questionable whether it would be sensible. Even a small reduction in dependency on China is not yet discernible in any form.

Therefore, the new China strategy is shaped far away from China. It does not manifest in demands that could be addressed directly to the Chinese delegation but rather in Germany doing its homework. The reasons for the painful dependence lie deeper. Germany still has not understood that it holds the weaker position in negotiations with the People’s Republic, said Marcel Fratzscher, the president of the German Institute for Economic Research (DIW), on Monday on the TV channel Phoenix. The reason is the lack of innovation power in the industry, which is falling behind in competition with China and the United States.

The traffic light government shows different colors

While Scholz received his special success from China with Cosco and spoke out against a too tough approach, the Greens do not hide their reservations about too much integration with China. Party chairman Omid Nouripour called on his own ministers to speak frankly and plainly on Tuesday. Human rights violations, especially the situation in the Xinjiang region, will be addressed, even if the Chinese side does not want that.

Practically all civil society organizations involved with China spoke out on Monday, including the Society for Threatened Peoples, the World Uyghur Congress, the Tibet Initiative Germany (TID) and the International Campaign for Tibet (ICT). They also want the German side to advocate for human rights issues in the talks. The NGOs demand more weight for values than for the profits of major corporations and plan to demonstrate in front of the Chancellery on Tuesday morning for this cause.

Consensus on climate action

On the other hand, another green topic is already receiving more support. Germany and China intend to intensify cooperation in climate and environmental protection, said German Minister for the Environment Steffi Lemke of the Greens and her Chinese counterpart Huang Runqiu after preliminary discussions. Finn Mayer-Kuckuk/Christiane Kuehl/rtr

  • Geopolitics
  • Li Qiang
  • Olaf Scholz

Xi to Blinken: ‘This is very good’

Are constructive talks possible? US Secretary of State Antony Blinken was received by Chinese President and Party Leader Xi Jinping on Monday at the Great Hall of the People.

Until the last moment, Xi Jinping kept his cards close to his chest: Would he meet with US Secretary of State Antony Blinken or not? On Monday afternoon, China’s President and Party Leader finally met with Blinken just before his departure. In the Great Hall of the People in the heart of Beijing, both sides made efforts to stabilize the bilateral relations between China and the United States. No major breakthroughs were achieved, but no one expected them either.

Nonetheless, the 35-minute meeting between Xi and Blinken sends a clear signal: China and the US want to prevent their rivalry from turning into open hostility.

Xi: China respects US interests

China’s President and Party Leader showed a conciliatory attitude towards Blinken. He stated that they respect US interests and do not seek to challenge the United States. Xi even mentioned progress in the relationship with the United States and added, “That is very good.”

He expressed hope that Blinken’s visit could make a positive contribution to stabilizing the relations between China and the United States. The Chinese Foreign Ministry even stated that Blinken’s visit marked a “new beginning”.

However, one should not overly interpret Blinken’s China trip as entirely positive. Nevertheless, the US Secretary of State also assured that the American government intends to handle its relations with China responsibly. Both countries agree that the relationship needs to be stabilized. “It is in the interest of the United States, China, and the world,” said Blinken. At least on a diplomatic level, this was achieved on Monday afternoon.

Wang Yi: relationships at a low point

However, as soon as the discussions in Beijing touched on substantive issues, the significant differences immediately came to the fore, especially during Blinken’s meeting with Wang Yi on Monday morning. China’s top diplomat bluntly stated that the relations between the US and China had reached a low point. He also placed the blame squarely on America’s flawed perception of China.

In the morning conversation with Wang Yi, Blinken had to listen to strong words from China’s chief diplomat.

Washington should “stop the downward spiral in China-US relations and bring them back to a healthy and stable track.” The US must decide on its behavior towards China, “between dialogue and confrontation, between cooperation or conflict”.

Wang made clear demands to Blinken:

  • lift sanctions against China.
  • cease suppressing the technological development of the People’s Republic
  • stop “recklessly interfering in China’s internal affairs” on issues like Taiwan

Still no exchange at military level

Blinken, on the other hand, raised the issue of halted communication at the military level in both meetings. “It is absolutely vital that we have this kind of military-to-military communication,” Blinken emphasized in Beijing. It is crucial to prevent the rivalry between China and the US from unintentionally turning into an open conflict. There have been enough dangerous incidents in recent times.

Unfortunately, no progress was made on this point. China will continue to reject any exchange at the military level, according to Beijing. The reason cited is the US sanctions, including those against China’s Defense Minister Li Shanfu.

Wang: no room for compromise on Taiwan issue

No less dangerous is the issue of Taiwan. Wang Yi remained firm and made it clear that “China has no room for compromise or concession on this issue.” The US must “adhere to the one-China principle, respect China’s sovereignty and territorial integrity, and make a clear stand against ‘Taiwan independence.’”

US President Joe Biden discarded the approach of “strategic ambiguity” regarding Taiwan last year and made it clear that the US would defend the island in the event of a Chinese invasion. Advisors later explained that it was merely a clarification and not a departure from the existing “one China” policy.

Despite all criticism: Constructive signal emerges

Wang Zichen from the Chinese think tank “Center for China and Globalization” draws a positive conclusion. “Secretary Blinken’s visit turned out to exceed expectations that were admittedly low, which shall be a good start to stabilizing China-US relations,” Wang said to Table.Media. The political expert hopes that this will pave the way for China visits by other senior US officials, including Janet Yellen, Gina Raimondo and John Kerry.

Marina Rudyak, speaking with Table.Media, is also convinced that Blinken’s trip and especially the meeting with Xi are very important for stabilizing relations. “Despite the sharp rhetoric and aside from Xi’s power play, leaving it open until the last moment whether he would meet Blinken or not, a constructive signal emerges from these two days,” says the sinologist and substitute professor for Chinese society and economy at the University of Goettingen.

  • Geopolitik

News

AstraZeneca considers spinning off its China business

British-Swedish pharmaceutical company AstraZeneca is reportedly considering a separation of its China business, according to a newspaper report. The listing of a separate unit in Hong Kong is seen as one option, the Financial Times reported, citing sources familiar with the matter.

Spinning off the China business could protect AstraZeneca from growing tensions between the People’s Republic and other countries while retaining control over the business. A listing in Shanghai is also possible. AstraZeneca stated that it does not comment on “rumors or speculation about future strategies or mergers”.

In May, Wang Lei, the company’s Deputy CEO and President of the Chinese unit, stated on the occasion of AstraZeneca’s 30th anniversary in China that the company aims to become a patriotic enterprise in China that “loves the Communist Party and the country”. AstraZeneca declined to comment on Lei’s remarks at that time.

In the past year, AstraZeneca generated 13 percent of its total revenue in the People’s Republic. The company is the largest pharmaceutical manufacturer in China. rtr/flee

UN Commissioner calls for funding for office in China

The United Nations High Commissioner for Human Rights plans to open an office in China. Volker Turk, who assumed his position last year, called for financial support for his plan at the opening of the 53rd session of the UN Human Rights Council in Geneva on Monday. Turk also intends to establish a representation in India. The UN Human Rights Office, established after World War II, is currently present in 95 countries.

“We want to strengthen our commitment now,” Turk said at the start of the four-week session of the council. 75 years after the adoption of the Universal Declaration of Human Rights, the world is at a “critical point”. “I also believe that it is important for us to be present for the first time in China and India,” Turk said. He would like to double the budget of his office to enhance global monitoring.

A spokesperson for the UN Human Rights organization added that Turk had discussed the idea of the two new offices with the governments during meetings but did not provide further details about their response. However, many countries would resist further monitoring due to sovereignty concerns. grz

  • UNO

EU Commission presents proposals for de-risking strategy

On Tuesday, the European Commission is unveiling its strategy for economic security, which aims to reduce the EU’s dependence on China. The strategy, although not a formal legislative proposal, intends to provide member states with suggestions for de-risking economic relations with the People’s Republic. Measures such as export restrictions or investment screenings are being considered to prevent the leakage of sensitive technology, particularly in the semiconductor sector.

Although the strategy does not explicitly target Beijing, it implicitly does – after all, Europe is now dependent on the People’s Republic for many critical raw materials and technologies. Europe should remain open to trade and investment, the Commission says, but should protect itself better in limited areas of military and intelligence relevance. This would include restrictive third-party access to key technologies (such as in the semiconductor sector) as well as to corresponding research projects or joint ventures. By the end of the year, the Commission also intends to propose a new instrument, a control regime for security-related investments by European companies in third countries.

The strategy is to comprise three pillars, which can be summarized under the keywords resilience, protection and partnership. Von der Leyen is trying to find a middle ground between countries like France, which insist on European sovereignty, and countries that are concerned about free trade. After all, the strategy paper will only be the start of the discussion.

The strategy also aims to improve coordination of decisions within the EU. Recently, the Netherlands unilaterally proposed export restrictions on semiconductor machinery manufacturer ASML. EU Commission President Ursula von der Leyen first mentioned the economic security strategy in her keynote speech on China. The strategy will be discussed by EU heads of state and government next week. ari/tho

  • De-Risking

Lilium air taxis for China

Munich-based air taxi developer Lilium has found a new major customer in China. Heli Eastern, a provider of helicopter services in the Guangdong-Hong Kong-Macao region, has signed a letter of intent to purchase 100 Lilium jets, Lilium announced on Monday.

Lilium CEO Klaus Roewe stated that his company sees significant potential for Lilium in the region. Lilium has now collected letters of intent for the purchase of 745 aircraft.

In addition, Lilium announced plans to open a regional hub in the area. The company has entered into a partnership with the Bao’an district, where Shenzhen is located. The collaboration will initially focus on the Guangdong-Hong Kong-Macao Greater Bay Area, home to over 85 million people. Expansion to the rest of China is planned for the future.

Lilium is developing an electric vertical takeoff and landing aircraft primarily for short-distance air travel. The company recently achieved a significant milestone by reaching a speed of 250 kilometers per hour with a demonstrator aircraft. With a 250 million dollars capital injection, according to the company, the development is funded until the first manned flight in the second half of 2024. Afterward, Lilium plans to secure further funding through down payments from potential buyers. rtr

Heads

Zheng Shanjie: from local to national chief planner in 20 years

More powerful than the economy minister: Zheng Shanjie, head of the influential National Development and Reform Commission (NDRC)

Two conditions are required to become the head of the National Development and Reform Commission (NDRC). Firstly, a clear vision of the economic and political direction in which the People’s Republic of China should steer. Secondly, trusted connections within the center of power, allowing promotion to this central position within the apparatus by the Organization Department of the Communist Party.

These conditions are interdependent. It is the vision that creates the final bit of trust among those pulling the strings in the Politburo Standing Committee. Zheng Shanjie has been the head of the NDRC since March, making him the 14th person to hold this position in the country’s history.

Zheng is part of the Chinese delegation entering consultations with the German government today. His official meetings in Berlin begin at 7 am. He will start by speaking with Minister for Economic Affairs Robert Habeck. Zheng is an especially important interlocutor for the German government representatives because he represents not only the interests of a single department but also encompasses the interests of all departments.

Two milestones in his career

Planning and development of the big picture have been recurring themes throughout Zheng Shanjie’s career. His various positions come together like puzzle pieces, symbolically uniting the key topics of Chinese politics.

In addition to the usual functions of a classic Communist Party cadre in his early 60s, serving as a functionary here and there, two posts seem to have been crucial milestones in his career. Twenty years ago, Zheng became the Director of the Development and Planning Commission of the city of Xiamen in the south of the country. Five years later, he advanced to the provincial-level Development Commission. After serving as Deputy Director for two years, he became the Director in 2010.

Zheng apparently performed his job to the utmost satisfaction of the party leadership, which can select from a vast pool of millions of officials and typically demands decades of preparation for a role at the heart of the regime. It seemed to be time for him to make a name for himself in the capital as well.

Zheng has been party secretary in Anhui since 2021

In 2015, Zheng was reassigned from Fujian province to Beijing. From then on, he took on numerous tasks, each for a short period of time, presumably to gain an understanding of the various areas in which a chief planner must be knowledgeable.

As one of the top officials of the National Energy Administration, he dedicated two years to a critical Chinese interest: energy supply. He gained foreign policy experience through his appointment as Deputy Director of the Taiwan Affairs Office of the State Council, the country’s quasi-cabinet.

His subsequent positions also fit the picture: Party Secretary in Ningbo and later Governor of Zhejiang province, where industry, trade, and craftsmanship thrive. Since 2021, Zheng has been the Party Secretary in Anhui. This central Chinese province represents the Party leadership’s determination to distribute the country’s income more equitably toward the hinterland. In recent years, more and more industries have settled in Anhui, triggering a structural transformation.

Graduate of Nanjing Tech University

Over the past 20 years, the head of the NDRC has gained a multifaceted understanding of the strengths and weaknesses of the Chinese economic system. As a graduate of Nanjing Tech University, he also possesses an understanding and affinity for the urgency of technological progress.

His academic expertise helps him understand the needs of the technology sector while also tightening regulatory reins where the Party fears losing control. Marcel Grzanna

  • NDRC

Executive Moves

Joachim Brodt has been manager for body store planning at Mercedes-Benz in China since April. Brodt was previously RD BIW engineer at Mercedes-AMG.

Daniel Albrecht is a new member of the Expert Tank IP Talent Port in Guangdong. Albrecht works as a lawyer in China.

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

Dessert

Admittedly, today’s dessert is not entirely fresh. However, we didn’t want to withhold this moment of great fan joy from you either. The photo is from last week’s friendly match between Argentina and Australia at the Workers’ Stadium in Beijing. A fan of the six-time world footballer Lionel Messi managed to run onto the field. He embraced the Argentine superstar and then embarked on a spectacular but ultimately unsuccessful sprint to escape from the security personnel. He managed to exchange a high-five with Argentina’s goalkeeper Emiliano Martinez before being grabbed and carried off the field, hanging on for dear life but with a blissful grin on his face. Later, video recordings of the teenager surfaced on social media, showing him back in the stands, posing for photos with other fans.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    A football legend from the Ruhr area once said, “Those who talk a lot also lie a lot.” Now, the former national player Ernst Kuzorra was by no means an intellectual luminary, but he compensated for the perceived lack with invaluable human instinct.

    If we apply the pearls of wisdom of a simple man to world politics, Berlin and Beijing must be racking up on both of those accounts these days. Government consultations between nine ministries here, a hoped-for meeting between the party leader and the foreign minister of the number one superpower there. And China is always in the midst of it, serving as a new reference point for topics such as peace and security, economic growth or climate change.

    However, we can safely assume that, in principle, a lot of truth is also being spoken when middleweights and heavyweights of the geopolitical political arena come together. Germany’s politicians will certainly tell their Chinese counterparts during the 7th government consultations what they don’t like, as predicted by Finn Mayer-Kuckuk. While US Secretary of State Antony Blinken and President Xi Jinping have already exchanged the interests of China, the USA, and indeed the whole world, as reported by Michael Radunski.

    And the Chinese? They are brutally honest when it comes to expressing their opinion. Much more open than we Germans will ever be. And that’s a good thing. Dealing honestly with each other creates clear relationships. Then everyone knows where they stand and can align their own behavior accordingly.

    To the late Kuzorra’s credit, we could replace the verb “lie” in his quote about the grassroots of life with the verb “fib”. Because it’s very likely that it’s part of the political craft these days as well. Which party would want to reveal all the details of their strategy?

    In that case, the former striker would have hit the bullseye posthumously with his claim. No wonder, after all, he was the top scorer of Schalke 04.

    Your
    Marcel Grzanna
    Image of Marcel  Grzanna

    Feature

    Change of pace at introductory consultations

    First steps towards rapprochement: Premier Li Qiang with German President Frank-Walter Steinmeier at Bellevue Palace.

    German President Frank-Walter Steinmeier has called on China to “use its global influence and leverage over Russia to work towards a just peace” in the Ukraine conflict. At the beginning of the multi-day government visit, Steinmeier received Chinese Premier Li Qiang at Bellevue Palace. Steinmeier did not hesitate to address the issue that weighs heavily on the meeting.

    Steinmeier, however, otherwise followed the accepted government line. “Cooperation remains important but has changed in recent years,” according to the Federal President’s Office. China is a partner for Germany and Europe, “but also increasingly a competitor and rival on the political stage.” This corresponds to the assessment and wording of the National Security Strategy from last Wednesday.

    New faces on both sides

    Chinese government representatives did not have to listen to such confrontational tones during the past six consultations under Angela Merkel. However, even the current seventh ministerial meeting is already a certain success before it begins:

    • There are high-level discussions again. The previous consultations took place in person in 2018 and virtually in 2021. Since the personal encounters five years ago, the world has moved on. Germany’s stance towards China has become more critical, at the latest, since the Russian invasion of Ukraine. Despite the reservations of individual ministers, they are now forced into dialogue through this format.
    • Substantive issues are at the forefront. After the failure of the EU-China summit in 2022, which ended in silence and hostility due to differences over the Ukraine conflict, a broader dialogue is possible in the consultations. All ministries bring topics for which coordination with China is useful if a Chinese interlocutor has arrived.

    On the negative side, the preparations were rather meager. The pandemic, not least, has damaged the relationship. There are different people in the government on both sides compared to the previous meeting. Scholz himself is one of the few constants. In Germany, the faces have changed due to the 2021 federal election, and in China, due to government reshuffles by Xi Jinping in March. This affects not only the ministerial level but also the bureaucracy. The web of personal contacts, of existing business cards, is torn. This makes the actual meeting of the heads of government, ministers, and their staff all the more important.

    Cosco signs in Hamburg

    The conclusion of Cosco’s entry into the port of Hamburg can be seen as a positive signal to Chancellor Olaf Scholz ahead of the consultations. The state-owned shipping company initially hesitated because it was only allowed to acquire 24.99 percent instead of the desired 35 percent of one of the terminals there – and because the deal became the focal point of a critical discussion about Chinese engagement in Europe. On Monday, Cosco signed the agreement, according to terminal operator HHLA.

    Cosco has now accepted the conditions that were made more difficult by the federal government in October. Several ministries, including the Ministry for Economic Affairs, had security concerns about the deal. After it became known in spring, that HHLA had registered the terminal as “critical infrastructure”, further examinations were required.

    The state-owned shipping company had previously let a decision deadline pass at the end of December 2022, causing unrest in Hamburg. The HHLA had always defended Cosco’s entry as necessary for the Port of Hamburg. Scholz is considered a supporter of the entry. The spirit of de-risking looks different.

    Scholz hesitates with investment barriers

    Scholz positioned himself similarly flexibly on Monday regarding investment control. He spoke out against comprehensive monitoring of economic relations with China. While it is correct that greater scrutiny is needed when delivering goods for defense or surveillance purposes, he said at a congress of the Federation of German Industries (BDI), “One must be very cautious. But that does not mean subjecting the entire economic activity to administration.”

    The background to this is the proposals of the European Commission for enhanced economic security. Brussels will present proposals for the control of investments in China and exports to the People’s Republic on Tuesday. The European Commission is expected to move towards tighter controls.

    The industry primarily wants unhindered business

    At the BDI conference, there was great consensus between Scholz and the industry representatives in wanting to pursue de-risking but by no means decoupling. This is also claimed to be the line of the seven leading Western industrialized countries (G7), according to Scholz. In the meantime, the United States expressed surprise that the consultations were taking place in such a friendly spirit at all. From their perspective, the G7 consensus was to contain China’s interests as much as possible.

    However, the BDI and the German Chambers of Commerce and Industry (DIHK) made it clear to Scholz that they primarily have an interest in unhindered business with China. While they paid lip service to de-risking, they also urged the Chancellor to advocate for improved market access. Officials from the two major umbrella organizations stated that the Chinese government needs to show more willingness to improve the framework conditions.

    The unclear nature of de-risking

    The stance of the leading associations BDI and DIHK, ahead of the consultations is indeed critical of China. However, it represents different goals compared to the recent positions of the Green-led ministries, the G7, or European Commission President Ursula von der Leyen. Although all actors currently align their position towards China with the term de-risking, they each mean something different by it.

    The industry refers to a gradual reduction of business risks, while politics aim to eliminate geopolitical vulnerability. Both goals, if consistently implemented, would impose different requirements on the economy and politics. Risk elimination would entail a painful reduction in German-China business. However, so far, no one is willing to make such a hard decision, and it also remains questionable whether it would be sensible. Even a small reduction in dependency on China is not yet discernible in any form.

    Therefore, the new China strategy is shaped far away from China. It does not manifest in demands that could be addressed directly to the Chinese delegation but rather in Germany doing its homework. The reasons for the painful dependence lie deeper. Germany still has not understood that it holds the weaker position in negotiations with the People’s Republic, said Marcel Fratzscher, the president of the German Institute for Economic Research (DIW), on Monday on the TV channel Phoenix. The reason is the lack of innovation power in the industry, which is falling behind in competition with China and the United States.

    The traffic light government shows different colors

    While Scholz received his special success from China with Cosco and spoke out against a too tough approach, the Greens do not hide their reservations about too much integration with China. Party chairman Omid Nouripour called on his own ministers to speak frankly and plainly on Tuesday. Human rights violations, especially the situation in the Xinjiang region, will be addressed, even if the Chinese side does not want that.

    Practically all civil society organizations involved with China spoke out on Monday, including the Society for Threatened Peoples, the World Uyghur Congress, the Tibet Initiative Germany (TID) and the International Campaign for Tibet (ICT). They also want the German side to advocate for human rights issues in the talks. The NGOs demand more weight for values than for the profits of major corporations and plan to demonstrate in front of the Chancellery on Tuesday morning for this cause.

    Consensus on climate action

    On the other hand, another green topic is already receiving more support. Germany and China intend to intensify cooperation in climate and environmental protection, said German Minister for the Environment Steffi Lemke of the Greens and her Chinese counterpart Huang Runqiu after preliminary discussions. Finn Mayer-Kuckuk/Christiane Kuehl/rtr

    • Geopolitics
    • Li Qiang
    • Olaf Scholz

    Xi to Blinken: ‘This is very good’

    Are constructive talks possible? US Secretary of State Antony Blinken was received by Chinese President and Party Leader Xi Jinping on Monday at the Great Hall of the People.

    Until the last moment, Xi Jinping kept his cards close to his chest: Would he meet with US Secretary of State Antony Blinken or not? On Monday afternoon, China’s President and Party Leader finally met with Blinken just before his departure. In the Great Hall of the People in the heart of Beijing, both sides made efforts to stabilize the bilateral relations between China and the United States. No major breakthroughs were achieved, but no one expected them either.

    Nonetheless, the 35-minute meeting between Xi and Blinken sends a clear signal: China and the US want to prevent their rivalry from turning into open hostility.

    Xi: China respects US interests

    China’s President and Party Leader showed a conciliatory attitude towards Blinken. He stated that they respect US interests and do not seek to challenge the United States. Xi even mentioned progress in the relationship with the United States and added, “That is very good.”

    He expressed hope that Blinken’s visit could make a positive contribution to stabilizing the relations between China and the United States. The Chinese Foreign Ministry even stated that Blinken’s visit marked a “new beginning”.

    However, one should not overly interpret Blinken’s China trip as entirely positive. Nevertheless, the US Secretary of State also assured that the American government intends to handle its relations with China responsibly. Both countries agree that the relationship needs to be stabilized. “It is in the interest of the United States, China, and the world,” said Blinken. At least on a diplomatic level, this was achieved on Monday afternoon.

    Wang Yi: relationships at a low point

    However, as soon as the discussions in Beijing touched on substantive issues, the significant differences immediately came to the fore, especially during Blinken’s meeting with Wang Yi on Monday morning. China’s top diplomat bluntly stated that the relations between the US and China had reached a low point. He also placed the blame squarely on America’s flawed perception of China.

    In the morning conversation with Wang Yi, Blinken had to listen to strong words from China’s chief diplomat.

    Washington should “stop the downward spiral in China-US relations and bring them back to a healthy and stable track.” The US must decide on its behavior towards China, “between dialogue and confrontation, between cooperation or conflict”.

    Wang made clear demands to Blinken:

    • lift sanctions against China.
    • cease suppressing the technological development of the People’s Republic
    • stop “recklessly interfering in China’s internal affairs” on issues like Taiwan

    Still no exchange at military level

    Blinken, on the other hand, raised the issue of halted communication at the military level in both meetings. “It is absolutely vital that we have this kind of military-to-military communication,” Blinken emphasized in Beijing. It is crucial to prevent the rivalry between China and the US from unintentionally turning into an open conflict. There have been enough dangerous incidents in recent times.

    Unfortunately, no progress was made on this point. China will continue to reject any exchange at the military level, according to Beijing. The reason cited is the US sanctions, including those against China’s Defense Minister Li Shanfu.

    Wang: no room for compromise on Taiwan issue

    No less dangerous is the issue of Taiwan. Wang Yi remained firm and made it clear that “China has no room for compromise or concession on this issue.” The US must “adhere to the one-China principle, respect China’s sovereignty and territorial integrity, and make a clear stand against ‘Taiwan independence.’”

    US President Joe Biden discarded the approach of “strategic ambiguity” regarding Taiwan last year and made it clear that the US would defend the island in the event of a Chinese invasion. Advisors later explained that it was merely a clarification and not a departure from the existing “one China” policy.

    Despite all criticism: Constructive signal emerges

    Wang Zichen from the Chinese think tank “Center for China and Globalization” draws a positive conclusion. “Secretary Blinken’s visit turned out to exceed expectations that were admittedly low, which shall be a good start to stabilizing China-US relations,” Wang said to Table.Media. The political expert hopes that this will pave the way for China visits by other senior US officials, including Janet Yellen, Gina Raimondo and John Kerry.

    Marina Rudyak, speaking with Table.Media, is also convinced that Blinken’s trip and especially the meeting with Xi are very important for stabilizing relations. “Despite the sharp rhetoric and aside from Xi’s power play, leaving it open until the last moment whether he would meet Blinken or not, a constructive signal emerges from these two days,” says the sinologist and substitute professor for Chinese society and economy at the University of Goettingen.

    • Geopolitik

    News

    AstraZeneca considers spinning off its China business

    British-Swedish pharmaceutical company AstraZeneca is reportedly considering a separation of its China business, according to a newspaper report. The listing of a separate unit in Hong Kong is seen as one option, the Financial Times reported, citing sources familiar with the matter.

    Spinning off the China business could protect AstraZeneca from growing tensions between the People’s Republic and other countries while retaining control over the business. A listing in Shanghai is also possible. AstraZeneca stated that it does not comment on “rumors or speculation about future strategies or mergers”.

    In May, Wang Lei, the company’s Deputy CEO and President of the Chinese unit, stated on the occasion of AstraZeneca’s 30th anniversary in China that the company aims to become a patriotic enterprise in China that “loves the Communist Party and the country”. AstraZeneca declined to comment on Lei’s remarks at that time.

    In the past year, AstraZeneca generated 13 percent of its total revenue in the People’s Republic. The company is the largest pharmaceutical manufacturer in China. rtr/flee

    UN Commissioner calls for funding for office in China

    The United Nations High Commissioner for Human Rights plans to open an office in China. Volker Turk, who assumed his position last year, called for financial support for his plan at the opening of the 53rd session of the UN Human Rights Council in Geneva on Monday. Turk also intends to establish a representation in India. The UN Human Rights Office, established after World War II, is currently present in 95 countries.

    “We want to strengthen our commitment now,” Turk said at the start of the four-week session of the council. 75 years after the adoption of the Universal Declaration of Human Rights, the world is at a “critical point”. “I also believe that it is important for us to be present for the first time in China and India,” Turk said. He would like to double the budget of his office to enhance global monitoring.

    A spokesperson for the UN Human Rights organization added that Turk had discussed the idea of the two new offices with the governments during meetings but did not provide further details about their response. However, many countries would resist further monitoring due to sovereignty concerns. grz

    • UNO

    EU Commission presents proposals for de-risking strategy

    On Tuesday, the European Commission is unveiling its strategy for economic security, which aims to reduce the EU’s dependence on China. The strategy, although not a formal legislative proposal, intends to provide member states with suggestions for de-risking economic relations with the People’s Republic. Measures such as export restrictions or investment screenings are being considered to prevent the leakage of sensitive technology, particularly in the semiconductor sector.

    Although the strategy does not explicitly target Beijing, it implicitly does – after all, Europe is now dependent on the People’s Republic for many critical raw materials and technologies. Europe should remain open to trade and investment, the Commission says, but should protect itself better in limited areas of military and intelligence relevance. This would include restrictive third-party access to key technologies (such as in the semiconductor sector) as well as to corresponding research projects or joint ventures. By the end of the year, the Commission also intends to propose a new instrument, a control regime for security-related investments by European companies in third countries.

    The strategy is to comprise three pillars, which can be summarized under the keywords resilience, protection and partnership. Von der Leyen is trying to find a middle ground between countries like France, which insist on European sovereignty, and countries that are concerned about free trade. After all, the strategy paper will only be the start of the discussion.

    The strategy also aims to improve coordination of decisions within the EU. Recently, the Netherlands unilaterally proposed export restrictions on semiconductor machinery manufacturer ASML. EU Commission President Ursula von der Leyen first mentioned the economic security strategy in her keynote speech on China. The strategy will be discussed by EU heads of state and government next week. ari/tho

    • De-Risking

    Lilium air taxis for China

    Munich-based air taxi developer Lilium has found a new major customer in China. Heli Eastern, a provider of helicopter services in the Guangdong-Hong Kong-Macao region, has signed a letter of intent to purchase 100 Lilium jets, Lilium announced on Monday.

    Lilium CEO Klaus Roewe stated that his company sees significant potential for Lilium in the region. Lilium has now collected letters of intent for the purchase of 745 aircraft.

    In addition, Lilium announced plans to open a regional hub in the area. The company has entered into a partnership with the Bao’an district, where Shenzhen is located. The collaboration will initially focus on the Guangdong-Hong Kong-Macao Greater Bay Area, home to over 85 million people. Expansion to the rest of China is planned for the future.

    Lilium is developing an electric vertical takeoff and landing aircraft primarily for short-distance air travel. The company recently achieved a significant milestone by reaching a speed of 250 kilometers per hour with a demonstrator aircraft. With a 250 million dollars capital injection, according to the company, the development is funded until the first manned flight in the second half of 2024. Afterward, Lilium plans to secure further funding through down payments from potential buyers. rtr

    Heads

    Zheng Shanjie: from local to national chief planner in 20 years

    More powerful than the economy minister: Zheng Shanjie, head of the influential National Development and Reform Commission (NDRC)

    Two conditions are required to become the head of the National Development and Reform Commission (NDRC). Firstly, a clear vision of the economic and political direction in which the People’s Republic of China should steer. Secondly, trusted connections within the center of power, allowing promotion to this central position within the apparatus by the Organization Department of the Communist Party.

    These conditions are interdependent. It is the vision that creates the final bit of trust among those pulling the strings in the Politburo Standing Committee. Zheng Shanjie has been the head of the NDRC since March, making him the 14th person to hold this position in the country’s history.

    Zheng is part of the Chinese delegation entering consultations with the German government today. His official meetings in Berlin begin at 7 am. He will start by speaking with Minister for Economic Affairs Robert Habeck. Zheng is an especially important interlocutor for the German government representatives because he represents not only the interests of a single department but also encompasses the interests of all departments.

    Two milestones in his career

    Planning and development of the big picture have been recurring themes throughout Zheng Shanjie’s career. His various positions come together like puzzle pieces, symbolically uniting the key topics of Chinese politics.

    In addition to the usual functions of a classic Communist Party cadre in his early 60s, serving as a functionary here and there, two posts seem to have been crucial milestones in his career. Twenty years ago, Zheng became the Director of the Development and Planning Commission of the city of Xiamen in the south of the country. Five years later, he advanced to the provincial-level Development Commission. After serving as Deputy Director for two years, he became the Director in 2010.

    Zheng apparently performed his job to the utmost satisfaction of the party leadership, which can select from a vast pool of millions of officials and typically demands decades of preparation for a role at the heart of the regime. It seemed to be time for him to make a name for himself in the capital as well.

    Zheng has been party secretary in Anhui since 2021

    In 2015, Zheng was reassigned from Fujian province to Beijing. From then on, he took on numerous tasks, each for a short period of time, presumably to gain an understanding of the various areas in which a chief planner must be knowledgeable.

    As one of the top officials of the National Energy Administration, he dedicated two years to a critical Chinese interest: energy supply. He gained foreign policy experience through his appointment as Deputy Director of the Taiwan Affairs Office of the State Council, the country’s quasi-cabinet.

    His subsequent positions also fit the picture: Party Secretary in Ningbo and later Governor of Zhejiang province, where industry, trade, and craftsmanship thrive. Since 2021, Zheng has been the Party Secretary in Anhui. This central Chinese province represents the Party leadership’s determination to distribute the country’s income more equitably toward the hinterland. In recent years, more and more industries have settled in Anhui, triggering a structural transformation.

    Graduate of Nanjing Tech University

    Over the past 20 years, the head of the NDRC has gained a multifaceted understanding of the strengths and weaknesses of the Chinese economic system. As a graduate of Nanjing Tech University, he also possesses an understanding and affinity for the urgency of technological progress.

    His academic expertise helps him understand the needs of the technology sector while also tightening regulatory reins where the Party fears losing control. Marcel Grzanna

    • NDRC

    Executive Moves

    Joachim Brodt has been manager for body store planning at Mercedes-Benz in China since April. Brodt was previously RD BIW engineer at Mercedes-AMG.

    Daniel Albrecht is a new member of the Expert Tank IP Talent Port in Guangdong. Albrecht works as a lawyer in China.

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

    Dessert

    Admittedly, today’s dessert is not entirely fresh. However, we didn’t want to withhold this moment of great fan joy from you either. The photo is from last week’s friendly match between Argentina and Australia at the Workers’ Stadium in Beijing. A fan of the six-time world footballer Lionel Messi managed to run onto the field. He embraced the Argentine superstar and then embarked on a spectacular but ultimately unsuccessful sprint to escape from the security personnel. He managed to exchange a high-five with Argentina’s goalkeeper Emiliano Martinez before being grabbed and carried off the field, hanging on for dear life but with a blissful grin on his face. Later, video recordings of the teenager surfaced on social media, showing him back in the stands, posing for photos with other fans.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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