In the case of rare earths and chemical precursors for medicines, our mistakes and risks associated with our dependence on China are well known. Less well-known is our dependence on cellulose nitrate. This is an essential ingredient for the production of gunpowder, which is extracted from cotton. This is why the raw material is also known as guncotton.
The dependence on this raw material, 70 percent of which is imported from China, has several worrying dimensions. If the EU wants to supply Ukraine with more ammunition as promised, it cannot do without the guncotton from China. This is tricky, as Beijing is known to be a close ally of Moscow and could stop the supply of the raw material at any time for political reasons. The other problem for the EU is that the cotton comes mainly from Xinjiang, where it is likely to be produced using forced labor. A dilemma from which there are only unsatisfactory ways out, as Michael Radunski reports.
Meanwhile, Beijing has responded with another threatening gesture in the dispute over the EU’s punitive tariffs on EVs. One day after the EU Commission imposed additional tariffs on Chinese EVs, the Chinese Ministry of Commerce launched an anti-subsidy investigation into dairy products such as milk and cheese imported from the EU.
France would be the country most affected by the potential punitive tariffs on the dairy products in question. As the driver of the EU tariffs on Chinese EVs, it is probably no coincidence that the country has found itself in Beijing’s crosshairs. Italy and Denmark would currently be the second most affected countries. But German producers are also concerned, reports Amelie Richter.
We wish you a successful day!
There are many different perspectives on the war in Ukraine. However, almost all experts agree on one point: Ukraine urgently needs more ammunition for its defense. While aid from the USA is currently uncertain due to the election campaign, Europe wants to supply – and is even building new production facilities to do so.
In addition to ammunition factories, however, there is also a lack of the necessary raw material for ammunition, commonly known as guncotton. The problem is that Europe is largely dependent on China, which is so closely allied with Russia.
European manufacturers import an indispensable component for ammunition from the People’s Republic – cellulose nitrate, also known colloquially as nitrocellulose or guncotton – or its precursor, linter cotton.
Linters are cotton fibers that are too short to be spun. The website of the German armaments company Rheinmetall states: “For military requirements, a uniformly nitrified nitrocellulose made from bleached linters is used or, alternatively, blends of two to three different nitrified nitrocellulose types.”
However, Europe only has a very small cotton industry – in contrast to the USA. The EU therefore has to buy from abroad. Europe imports around 70 percent of these fibers from China, Rheinmetall CEO Armin Papperger recently admitted in the British newspaper “Financial Times”. He fears that China could stop the supply of liners at any time for political reasons.
This is not a completely absurd idea. Time and again, China uses its trading power to achieve political goals. Sometimes certain products are no longer exported, sometimes they are simply no longer imported. Countries such as South Korea, Japan, but also Lithuania and France can report on such processes.
The German government has also recognized the risk of potential restrictions and has clearly stated this in its China strategy. The solution: de-risking. But now a kind of multiple staircase joke of history is looming. Because in order to solve the ammunition problem quickly, the West must abandon three of its plans vis-à-vis China – at least temporarily.
But de-risking is a process that takes time. Something that Europe does not have in the case of the missing ammunition. EU foreign policy chief Josep Borrell described the situation as “dramatic”. Ukraine is running out of ammunition on the front line, especially artillery shells, warned Borrell. And the EU could not deliver anywhere near the quantities of ammunition it had promised.
The plan is now to increase production of the most important NATO artillery calibers to 1.5 million units per year by the end of 2024. Ammunition factories are to be built quickly to achieve this. Chancellor Olaf Scholz took over the ground-breaking ceremony for a Rheinmetall factory in Lower Saxony, while Minister Robert Habeck is looking into shorter approval procedures. But all this doesn’t just take time. It also requires the necessary raw materials from China.
And according to Papperger, there is a risk of problems if Beijing decides it no longer wants to supply. “That is the reason why we are currently buying as much as possible to fill our warehouses“, the Rheinmetall boss told the FT. So far, the deliveries from China have arrived. “But the point is that Europe should be independent in the long term”, warned the Rheinmetall boss.
Supply problems are already being complained about elsewhere. EU Internal Market Commissioner Thierry Breton, for example, reported initial import problems. The supply of cotton linters from China was stopped “a few months ago as if by chance”, said Breton. In mid-August, Beijing also placed the metal antimony, which is frequently used in ammunition and other military applications, under export controls, similar to those for the metals gallium and germanium, for which Chinese exporters have had to apply for licenses since then.
Chinese experts concede in the Hong Kong newspaper South China Morning Post that China certainly has scope to reduce exports of nitrocellulose for geopolitical reasons – but immediately add that the leadership in Beijing will not use this as a means of exerting pressure.
EU Internal Market Commissioner Breton sums up the current situation in sobering terms: “To produce the powder, we need a special type of cotton, and most of it comes from China.” But from where in China? This is where the next problem lies. Almost 90 percent of Chinese cotton comes from the province of Xinjiang, where the Muslim Uyghur minority is oppressed.
Adrian Zenz has become famous for his Xinjiang research. He once uncovered the extensive Chinese camp system in the region. Now the scientist from the Victims of Communism Memorial Foundation in Washington warns that hundreds of thousands of Uyghurs are being forced to work in Xinjiang’s cotton industry.
In the fight against forced labor, the West is trying to ensure that such goods are no longer sold in Europe or the USA by means of corresponding supply chain laws. And so Europe is faced with a political and an economic dilemma, as well as a moral one: Chinese linter cotton is needed to quickly produce ammunition for Ukraine. However, it is almost inevitable that nitrocellulose produced in China will ultimately be supplied from Xinjiang.
One day after the EU Commission imposed additional tariffs on Chinese EVs, Beijing has responded: China has launched an anti-subsidy investigation into dairy products imported from the European Union. This was announced by the Chinese Ministry of Commerce in a statement on Wednesday.
The Chinese authorities are targeting, among other things:
As a result, there is a threat of punitive tariffs on the corresponding goods from the EU, the ministry announced. The subsidies are being investigated as part of the common agricultural policy of the EU member states as well as national programs in Ireland, Austria, Belgium, Italy, Croatia, Finland, Romania and the Czech Republic, which were listed individually in the notification.
According to official information, the action is the result of a complaint from Chinese manufacturers of dairy products. Discussions on the subject were also held with EU representatives last week. The investigation is to be completed within twelve months, but could be extended by a further six months.
The move is seen as a further threatening gesture in the dispute over EU punitive tariffs on Chinese EVs. The EU Commission set the tariffs for vehicles from China on Tuesday. They amount to up to 36.3 percent and will come into force by the end of October at the latest, initially for five years.
France – which is also considered to be the driver of EU tariffs on EVs from China – would be the largest affected country by the potential punitive tariffs on certain dairy products. France is the largest exporter of dairy products to the People’s Republic within the EU this year, according to Chinese customs data. Italy and Denmark have followed in second place so far in 2024. In 2023, French dairy product exports to China amounted to €665 million, which accounts for around eight percent of France’s global dairy product sales. Excluding infant milk, export sales fall to €386 million.
The dairy market in China is also important for the German agricultural sector: last year, 294,000 tons of milk and dairy products – excluding cheese and butter – were exported to the People’s Republic. With a value of €386 million, this was the highest item within German agricultural exports to China. According to the German government, fresh consumer and processed milk accounted for almost half of this.
The German Dairy Industry Association expressed concern on Wednesday: “China continues to be an important global importer of German dairy products and ingredients, despite growing Chinese production”´, the association told Table.Briefings.
Reliable and trusting trade relations have developed between Germany and China over the years. “It should therefore be the goal for both sides that the dairy and food sector is not unduly dragged into the ongoing industrial dispute between China and the EU over electric vehicles and related technologies”, said the association, which represents around 90 milk processing companies in Germany. There were clear demands to politicians: “We expect the German government and the European Commission to work at the highest level to resolve this dispute quickly.”
Of the countries in which Beijing wants to scrutinize state subsidy programs, only Italy and Belgium voted in favor of the EU’s additional tariffs on e-cars in July. Ireland, Austria, Croatia, Finland, Romania and the Czech Republic abstained.
According to information from EU circles, negotiations with Beijing are still possible in order to avert the tariffs on EVs. So far, these talks have not produced any results. The Chairman of the Trade Committee in the EU Parliament, Bernd Lange (SPD), believes there is still “time for constructive dialog and a joint solution“. The higher tariffs “have not yet been imposed and will not apply retroactively”, he explained. There will now be further talks with the companies and negotiations with the Chinese side “on the possible elimination of illegal subsidies”.
The EU Commission announced the additional tariffs in June. At the time, Beijing had already responded with an anti-subsidy investigation into pork from the EU. This would primarily affect Spain, the Netherlands and Denmark. And since January, the Chinese authorities have also been investigating suspected illegal subsidies on European brandies such as cognac – which, like cheese, would also hit France the hardest.
According to data from the European Commission’s Directorate-General for Agriculture and Rural Development, the EU exported €1.7 billion worth of dairy products to China in 2023. This is less than in the previous year, when it was still around two billion euros. With a share of twelve percent, dairy products are the third most exported agricultural product from the EU to China. Pork accounts for 17 percent and grain for 19 percent.
China imported a total of 2.6 million tons of dairy products in 2023, a good twelve percent less than in the previous year. Imports of milk powder, liquid milk and cream have also fallen compared to previous years. Milk powder, such as that used for baby food, is not included in the anti-subsidy investigation that has now been announced.
China still has a need for imported milk powder due to possible food scandals. Due to increasingly secure domestic production and falling demand as a result of a decline in the birth rate, imports are falling – most recently by 38%. Meanwhile, demand for foreign yogurt and whey products is increasing. New Zealand holds the largest market share for dairy products in China, with a good 48% in 2023.
The Commission stated on Wednesday that it was taking note of the investigation. The procedure will be analyzed “very closely”. “The Commission will vigorously defend the interests of the EU dairy industry“, it said. If necessary, intervention would not be ruled out to ensure that the investigation complies with WTO rules.
The EU Chamber of Commerce in China was not moved by the move on Wednesday: Beijing’s actions “should not be seen as a surprise”. “Regrettably, the use of trade defense instruments by one government is increasingly reciprocated in kind by the other”, the EU Chamber said, adding that it hoped the investigation would be “conducted fairly and transparently”.
At an event in Spain this week, EU foreign policy chief Josep Borrell emphasized that the EU “ must not be naive” and that a trade war was “perhaps unavoidable”.
Germany likes to boast that it is a world champion when it comes to the circular economy. From sorting packaging in private households to the glass bottle deposit system and impressive recycling rates for metals and paper. “Made in Germany” also means that today’s waste is tomorrow’s raw materials. China, on the other hand, is conspicuous in the public eye for its air pollution and mountains of waste, as well as its access to strategic raw materials.
Our article provides a counterpoint: Germany can learn a lot from China in the transition to a circular economy! China is ahead in the following areas when it comes to the interaction between politics and companies.
China has more than doubled its resource productivity since 1990. In other words: more growth with less use of raw materials. In Germany and the EU, however, both have stagnated. The target of the German sustainability strategy, an increase of 40 percent by 2020, was clearly missed.
Why? On the one hand, China has recorded double-digit growth rates for years – with an increase in environmental pollution and dynamic growth in services. Nevertheless, China has decoupled its economy from the consumption of raw materials. Fewer and fewer raw materials need to be used per percentage of growth. There have been increasing trends in the recycling of waste materials and the use of secondary materials.
Germany’s learning objective: finally get serious about increasing raw material productivity. The current draft of the National Circular Economy Strategy is moving forward in line with EU targets. The proportion of secondary raw materials in the total of all raw materials used is to double by 2030. That’s good, Germany can learn and do.
Large parts of Chinese production take place in large networks of companies, known there as “industrial parks”. Eco-industrial networks have also been established for years. Seamless transitions from innovations to demonstration projects, from niche production to mass markets, are created there. Experiments are carried out, comparatively evaluated and scaled up.
Scaling up works better in China than in Germany. This includes robust financing and controlled market development through quotas for the marketing and acceptance of new products. The triumph of electromobility may serve as an example. More recent approaches are developing roadmaps for the transformation of existing industrial parks.
Germany’s learning objective: a mission-oriented innovation policy with ESG top performers for the climate-neutral circular economy of tomorrow. In line with Mariana Mazzucato, the Fraunhofer ISI and the German government’s strategy for the future, a cross-sector and cross-departmental approach to achieve ambitious and clearly formulated goals that address pressing societal challenges by generating and applying knowledge and innovation.
In China, there are measurable indicators and technical standards for all production areas, which are continuously raised in five-year plans and policies. Germany is no stranger to this dynamic standard setting. The only problem is that it is too rarely driven forward systematically. Unfortunately, lobby interests at EU level play an inglorious role in this.
The Ecodesign Directive could show the way. Learning from China would mean deriving concrete indicators and dynamic targets for companies and production processes from ambitious targets for the economy as a whole, industrial sectors and product groups.
Germany’s learning objective: a circular economy for building materials, biogenic raw materials such as wood, vehicles and batteries, renewable energy technologies, plastics, clothing and textiles, information and communication technology and electrical appliances. In other words, a task for almost all companies and the value chains of tomorrow.
This is not to say that the circular economy in China is a sure-fire success. There are considerable differences between the provinces. The role of consumption is rarely addressed. Awarding social points for virtuous waste behavior, as in Shanghai, should be viewed critically as a real laboratory for new lifestyles. Especially in line with our fundamental values of democracy, diversity and the rule of law.
There is no doubt that China itself is facing huge challenges. For decades, CO2 emissions have risen almost inexorably. However, according to the International Energy Agency and a number of insiders, the peak has been reached. No country in the world is investing more in renewable energies than China. The circular economy is being further developed into the engine of climate neutrality. The German government’s strategy for China identifies climate protection as one of the few areas in which cooperation is being sought in view of the competition between systems.
A current study for the China Council for International Cooperation on Environment and Development (CCICED) is intended to prepare a dialog to bring the benefits of the German circular economy strategy closer to China. There is much to be said for seeing future dialogs on an equal footing. Germany can learn from China in the transition to a circular economy. The two countries can also work together on critical raw materials by facilitating the tracking of these materials in the product cycle and enabling their recovery. China itself speaks of a future “ecological civilization” – this is also an invitation for us to reflect.
Raimund Bleischwitz is Scientific Director at the Leibniz Center for Tropical Marine Research (ZMT) and Professor of Global Sustainable Resources at the University of Bremen. He has been working on the circular economy with Shanghai Jiao Tong University and colleagues in China for many years and has advised the European Commission and the British government, among others, on this topic.
Is this what going to the movies will look like in the future? Under VR glasses, two visitors in Hangzhou watch the animated film “Crayon Shin-chan: Me and the Professor on Summer Vacation” – the first full-length anime blockbuster to be completely designed for the immersive technology of virtual reality. The Japanese manga series about the cheeky five-year-old Shin-chan, which was first broadcast in the early 1990s, is a long-running hit in China. In addition to the VR screenings, the 31st part of the series was officially launched in regular Chinese cinemas last Saturday. The title: “New Dimension! Flying Sushi.”
In the case of rare earths and chemical precursors for medicines, our mistakes and risks associated with our dependence on China are well known. Less well-known is our dependence on cellulose nitrate. This is an essential ingredient for the production of gunpowder, which is extracted from cotton. This is why the raw material is also known as guncotton.
The dependence on this raw material, 70 percent of which is imported from China, has several worrying dimensions. If the EU wants to supply Ukraine with more ammunition as promised, it cannot do without the guncotton from China. This is tricky, as Beijing is known to be a close ally of Moscow and could stop the supply of the raw material at any time for political reasons. The other problem for the EU is that the cotton comes mainly from Xinjiang, where it is likely to be produced using forced labor. A dilemma from which there are only unsatisfactory ways out, as Michael Radunski reports.
Meanwhile, Beijing has responded with another threatening gesture in the dispute over the EU’s punitive tariffs on EVs. One day after the EU Commission imposed additional tariffs on Chinese EVs, the Chinese Ministry of Commerce launched an anti-subsidy investigation into dairy products such as milk and cheese imported from the EU.
France would be the country most affected by the potential punitive tariffs on the dairy products in question. As the driver of the EU tariffs on Chinese EVs, it is probably no coincidence that the country has found itself in Beijing’s crosshairs. Italy and Denmark would currently be the second most affected countries. But German producers are also concerned, reports Amelie Richter.
We wish you a successful day!
There are many different perspectives on the war in Ukraine. However, almost all experts agree on one point: Ukraine urgently needs more ammunition for its defense. While aid from the USA is currently uncertain due to the election campaign, Europe wants to supply – and is even building new production facilities to do so.
In addition to ammunition factories, however, there is also a lack of the necessary raw material for ammunition, commonly known as guncotton. The problem is that Europe is largely dependent on China, which is so closely allied with Russia.
European manufacturers import an indispensable component for ammunition from the People’s Republic – cellulose nitrate, also known colloquially as nitrocellulose or guncotton – or its precursor, linter cotton.
Linters are cotton fibers that are too short to be spun. The website of the German armaments company Rheinmetall states: “For military requirements, a uniformly nitrified nitrocellulose made from bleached linters is used or, alternatively, blends of two to three different nitrified nitrocellulose types.”
However, Europe only has a very small cotton industry – in contrast to the USA. The EU therefore has to buy from abroad. Europe imports around 70 percent of these fibers from China, Rheinmetall CEO Armin Papperger recently admitted in the British newspaper “Financial Times”. He fears that China could stop the supply of liners at any time for political reasons.
This is not a completely absurd idea. Time and again, China uses its trading power to achieve political goals. Sometimes certain products are no longer exported, sometimes they are simply no longer imported. Countries such as South Korea, Japan, but also Lithuania and France can report on such processes.
The German government has also recognized the risk of potential restrictions and has clearly stated this in its China strategy. The solution: de-risking. But now a kind of multiple staircase joke of history is looming. Because in order to solve the ammunition problem quickly, the West must abandon three of its plans vis-à-vis China – at least temporarily.
But de-risking is a process that takes time. Something that Europe does not have in the case of the missing ammunition. EU foreign policy chief Josep Borrell described the situation as “dramatic”. Ukraine is running out of ammunition on the front line, especially artillery shells, warned Borrell. And the EU could not deliver anywhere near the quantities of ammunition it had promised.
The plan is now to increase production of the most important NATO artillery calibers to 1.5 million units per year by the end of 2024. Ammunition factories are to be built quickly to achieve this. Chancellor Olaf Scholz took over the ground-breaking ceremony for a Rheinmetall factory in Lower Saxony, while Minister Robert Habeck is looking into shorter approval procedures. But all this doesn’t just take time. It also requires the necessary raw materials from China.
And according to Papperger, there is a risk of problems if Beijing decides it no longer wants to supply. “That is the reason why we are currently buying as much as possible to fill our warehouses“, the Rheinmetall boss told the FT. So far, the deliveries from China have arrived. “But the point is that Europe should be independent in the long term”, warned the Rheinmetall boss.
Supply problems are already being complained about elsewhere. EU Internal Market Commissioner Thierry Breton, for example, reported initial import problems. The supply of cotton linters from China was stopped “a few months ago as if by chance”, said Breton. In mid-August, Beijing also placed the metal antimony, which is frequently used in ammunition and other military applications, under export controls, similar to those for the metals gallium and germanium, for which Chinese exporters have had to apply for licenses since then.
Chinese experts concede in the Hong Kong newspaper South China Morning Post that China certainly has scope to reduce exports of nitrocellulose for geopolitical reasons – but immediately add that the leadership in Beijing will not use this as a means of exerting pressure.
EU Internal Market Commissioner Breton sums up the current situation in sobering terms: “To produce the powder, we need a special type of cotton, and most of it comes from China.” But from where in China? This is where the next problem lies. Almost 90 percent of Chinese cotton comes from the province of Xinjiang, where the Muslim Uyghur minority is oppressed.
Adrian Zenz has become famous for his Xinjiang research. He once uncovered the extensive Chinese camp system in the region. Now the scientist from the Victims of Communism Memorial Foundation in Washington warns that hundreds of thousands of Uyghurs are being forced to work in Xinjiang’s cotton industry.
In the fight against forced labor, the West is trying to ensure that such goods are no longer sold in Europe or the USA by means of corresponding supply chain laws. And so Europe is faced with a political and an economic dilemma, as well as a moral one: Chinese linter cotton is needed to quickly produce ammunition for Ukraine. However, it is almost inevitable that nitrocellulose produced in China will ultimately be supplied from Xinjiang.
One day after the EU Commission imposed additional tariffs on Chinese EVs, Beijing has responded: China has launched an anti-subsidy investigation into dairy products imported from the European Union. This was announced by the Chinese Ministry of Commerce in a statement on Wednesday.
The Chinese authorities are targeting, among other things:
As a result, there is a threat of punitive tariffs on the corresponding goods from the EU, the ministry announced. The subsidies are being investigated as part of the common agricultural policy of the EU member states as well as national programs in Ireland, Austria, Belgium, Italy, Croatia, Finland, Romania and the Czech Republic, which were listed individually in the notification.
According to official information, the action is the result of a complaint from Chinese manufacturers of dairy products. Discussions on the subject were also held with EU representatives last week. The investigation is to be completed within twelve months, but could be extended by a further six months.
The move is seen as a further threatening gesture in the dispute over EU punitive tariffs on Chinese EVs. The EU Commission set the tariffs for vehicles from China on Tuesday. They amount to up to 36.3 percent and will come into force by the end of October at the latest, initially for five years.
France – which is also considered to be the driver of EU tariffs on EVs from China – would be the largest affected country by the potential punitive tariffs on certain dairy products. France is the largest exporter of dairy products to the People’s Republic within the EU this year, according to Chinese customs data. Italy and Denmark have followed in second place so far in 2024. In 2023, French dairy product exports to China amounted to €665 million, which accounts for around eight percent of France’s global dairy product sales. Excluding infant milk, export sales fall to €386 million.
The dairy market in China is also important for the German agricultural sector: last year, 294,000 tons of milk and dairy products – excluding cheese and butter – were exported to the People’s Republic. With a value of €386 million, this was the highest item within German agricultural exports to China. According to the German government, fresh consumer and processed milk accounted for almost half of this.
The German Dairy Industry Association expressed concern on Wednesday: “China continues to be an important global importer of German dairy products and ingredients, despite growing Chinese production”´, the association told Table.Briefings.
Reliable and trusting trade relations have developed between Germany and China over the years. “It should therefore be the goal for both sides that the dairy and food sector is not unduly dragged into the ongoing industrial dispute between China and the EU over electric vehicles and related technologies”, said the association, which represents around 90 milk processing companies in Germany. There were clear demands to politicians: “We expect the German government and the European Commission to work at the highest level to resolve this dispute quickly.”
Of the countries in which Beijing wants to scrutinize state subsidy programs, only Italy and Belgium voted in favor of the EU’s additional tariffs on e-cars in July. Ireland, Austria, Croatia, Finland, Romania and the Czech Republic abstained.
According to information from EU circles, negotiations with Beijing are still possible in order to avert the tariffs on EVs. So far, these talks have not produced any results. The Chairman of the Trade Committee in the EU Parliament, Bernd Lange (SPD), believes there is still “time for constructive dialog and a joint solution“. The higher tariffs “have not yet been imposed and will not apply retroactively”, he explained. There will now be further talks with the companies and negotiations with the Chinese side “on the possible elimination of illegal subsidies”.
The EU Commission announced the additional tariffs in June. At the time, Beijing had already responded with an anti-subsidy investigation into pork from the EU. This would primarily affect Spain, the Netherlands and Denmark. And since January, the Chinese authorities have also been investigating suspected illegal subsidies on European brandies such as cognac – which, like cheese, would also hit France the hardest.
According to data from the European Commission’s Directorate-General for Agriculture and Rural Development, the EU exported €1.7 billion worth of dairy products to China in 2023. This is less than in the previous year, when it was still around two billion euros. With a share of twelve percent, dairy products are the third most exported agricultural product from the EU to China. Pork accounts for 17 percent and grain for 19 percent.
China imported a total of 2.6 million tons of dairy products in 2023, a good twelve percent less than in the previous year. Imports of milk powder, liquid milk and cream have also fallen compared to previous years. Milk powder, such as that used for baby food, is not included in the anti-subsidy investigation that has now been announced.
China still has a need for imported milk powder due to possible food scandals. Due to increasingly secure domestic production and falling demand as a result of a decline in the birth rate, imports are falling – most recently by 38%. Meanwhile, demand for foreign yogurt and whey products is increasing. New Zealand holds the largest market share for dairy products in China, with a good 48% in 2023.
The Commission stated on Wednesday that it was taking note of the investigation. The procedure will be analyzed “very closely”. “The Commission will vigorously defend the interests of the EU dairy industry“, it said. If necessary, intervention would not be ruled out to ensure that the investigation complies with WTO rules.
The EU Chamber of Commerce in China was not moved by the move on Wednesday: Beijing’s actions “should not be seen as a surprise”. “Regrettably, the use of trade defense instruments by one government is increasingly reciprocated in kind by the other”, the EU Chamber said, adding that it hoped the investigation would be “conducted fairly and transparently”.
At an event in Spain this week, EU foreign policy chief Josep Borrell emphasized that the EU “ must not be naive” and that a trade war was “perhaps unavoidable”.
Germany likes to boast that it is a world champion when it comes to the circular economy. From sorting packaging in private households to the glass bottle deposit system and impressive recycling rates for metals and paper. “Made in Germany” also means that today’s waste is tomorrow’s raw materials. China, on the other hand, is conspicuous in the public eye for its air pollution and mountains of waste, as well as its access to strategic raw materials.
Our article provides a counterpoint: Germany can learn a lot from China in the transition to a circular economy! China is ahead in the following areas when it comes to the interaction between politics and companies.
China has more than doubled its resource productivity since 1990. In other words: more growth with less use of raw materials. In Germany and the EU, however, both have stagnated. The target of the German sustainability strategy, an increase of 40 percent by 2020, was clearly missed.
Why? On the one hand, China has recorded double-digit growth rates for years – with an increase in environmental pollution and dynamic growth in services. Nevertheless, China has decoupled its economy from the consumption of raw materials. Fewer and fewer raw materials need to be used per percentage of growth. There have been increasing trends in the recycling of waste materials and the use of secondary materials.
Germany’s learning objective: finally get serious about increasing raw material productivity. The current draft of the National Circular Economy Strategy is moving forward in line with EU targets. The proportion of secondary raw materials in the total of all raw materials used is to double by 2030. That’s good, Germany can learn and do.
Large parts of Chinese production take place in large networks of companies, known there as “industrial parks”. Eco-industrial networks have also been established for years. Seamless transitions from innovations to demonstration projects, from niche production to mass markets, are created there. Experiments are carried out, comparatively evaluated and scaled up.
Scaling up works better in China than in Germany. This includes robust financing and controlled market development through quotas for the marketing and acceptance of new products. The triumph of electromobility may serve as an example. More recent approaches are developing roadmaps for the transformation of existing industrial parks.
Germany’s learning objective: a mission-oriented innovation policy with ESG top performers for the climate-neutral circular economy of tomorrow. In line with Mariana Mazzucato, the Fraunhofer ISI and the German government’s strategy for the future, a cross-sector and cross-departmental approach to achieve ambitious and clearly formulated goals that address pressing societal challenges by generating and applying knowledge and innovation.
In China, there are measurable indicators and technical standards for all production areas, which are continuously raised in five-year plans and policies. Germany is no stranger to this dynamic standard setting. The only problem is that it is too rarely driven forward systematically. Unfortunately, lobby interests at EU level play an inglorious role in this.
The Ecodesign Directive could show the way. Learning from China would mean deriving concrete indicators and dynamic targets for companies and production processes from ambitious targets for the economy as a whole, industrial sectors and product groups.
Germany’s learning objective: a circular economy for building materials, biogenic raw materials such as wood, vehicles and batteries, renewable energy technologies, plastics, clothing and textiles, information and communication technology and electrical appliances. In other words, a task for almost all companies and the value chains of tomorrow.
This is not to say that the circular economy in China is a sure-fire success. There are considerable differences between the provinces. The role of consumption is rarely addressed. Awarding social points for virtuous waste behavior, as in Shanghai, should be viewed critically as a real laboratory for new lifestyles. Especially in line with our fundamental values of democracy, diversity and the rule of law.
There is no doubt that China itself is facing huge challenges. For decades, CO2 emissions have risen almost inexorably. However, according to the International Energy Agency and a number of insiders, the peak has been reached. No country in the world is investing more in renewable energies than China. The circular economy is being further developed into the engine of climate neutrality. The German government’s strategy for China identifies climate protection as one of the few areas in which cooperation is being sought in view of the competition between systems.
A current study for the China Council for International Cooperation on Environment and Development (CCICED) is intended to prepare a dialog to bring the benefits of the German circular economy strategy closer to China. There is much to be said for seeing future dialogs on an equal footing. Germany can learn from China in the transition to a circular economy. The two countries can also work together on critical raw materials by facilitating the tracking of these materials in the product cycle and enabling their recovery. China itself speaks of a future “ecological civilization” – this is also an invitation for us to reflect.
Raimund Bleischwitz is Scientific Director at the Leibniz Center for Tropical Marine Research (ZMT) and Professor of Global Sustainable Resources at the University of Bremen. He has been working on the circular economy with Shanghai Jiao Tong University and colleagues in China for many years and has advised the European Commission and the British government, among others, on this topic.
Is this what going to the movies will look like in the future? Under VR glasses, two visitors in Hangzhou watch the animated film “Crayon Shin-chan: Me and the Professor on Summer Vacation” – the first full-length anime blockbuster to be completely designed for the immersive technology of virtual reality. The Japanese manga series about the cheeky five-year-old Shin-chan, which was first broadcast in the early 1990s, is a long-running hit in China. In addition to the VR screenings, the 31st part of the series was officially launched in regular Chinese cinemas last Saturday. The title: “New Dimension! Flying Sushi.”
