Table.Briefing: China

Desmond Shum on Qin Gang’s disappearance + AI Series: progress on Chats

Dear reader,

Where is Foreign Minister Qin Gang? Desmond Shum cannot answer this question in detail either. But he is very familiar with the subject of disappearing officials. As a businessman, Shum maintained close contact with the CCP leadership, but fell out of favor and now lives in the UK. He is the author of the book “Chinese Roulette” about the world of communist billionaires.

Fabian Peltsch spoke with him about the disappearance of the foreign minister – and learned that Shum’s ex-wife is now free again. She, too, had disappeared and had been held without trial for four years in an undisclosed location. Incidentally, a special meeting of the Standing Committee of the National People’s Congress is scheduled for today, Tuesday. Perhaps then, the public will learn more about Qin’s whereabouts.

The first demonstrations of Chinese alternatives to ChatGPT were rather disappointing. But this should not mislead us, writes Joern Petring to kick off our series on artificial intelligence. China’s tech billionaires outdo each other with investments in new applications. Although the shortage of high-performance chips due to the US sanctions continues to impede growth, given the high level of state and private efforts, it is only a matter of time before China catches up.

Elon Musk has rebranded Twitter as X and removed the bird from the logo. He wants to turn Twitter into a Western WeChat. Frank Sieren has already taken a look at what to make of this over a year ago. In the meantime, however, it became clear that these plans are a bit lofty. While WeChat has entered an empty market in China due to tech controls, “X” will have to take on WhatsApp, Paypal, Teams, Facebook and so on, depending on the intended use. A super app cannot be built so easily nowadays.

Your
Finn Mayer-Kuckuk
Image of Finn  Mayer-Kuckuk

Interview

‘It’s an abnormal, unpredictable state’

Entrepreneur Desmond Shum once maintained close ties with China’s top cadres. So he knows the enigmatic Chinese system from the inside.

Your ex-wife Duan Weihong used to be one of China’s wealthiest women. Before her sudden disappearance in 2017, she maintained close contact with high-ranking government cadres under Hu Jintao and Wen Jiabao. In your book “Red Roulette,” you give a profound insight into the corruption and intransparency of a system in which even the most powerful can suddenly disappear, as is the case now with Foreign Minister Qin Gang, the most prominent case so far. Since you know the apparatus from the inside: What do you think happened to him?

His disappearance can have all kinds of causes. It’s like that in regimes like China or Russia. Decisions are made in secrecy, there is no transparency and no open process, from Qin’s rapid rise through the ranks to his downfall last week. Everyone is trying to read through the tea leaves now, including the bureaucrats of the Communist Party of China themselves.

What signal does the sudden disappearance of China’s foreign minister send to the world?

From the outside, it looks terrible for Xi Jinping. He’s indecisive and incompetent in handling the current situation. One would think any government leader would be more competent: preparing a storyline, appointing a successor, or letting him reappear, all in quick succession. Any execution is better than having the nation’s foreign minister disappear for weeks, refusing to answer questions about his whereabouts and keeping the entire world in suspense. It demonstrates the current state of China. It is an abnormal state, an unpredictable state.

Qin Gang
China’s Foreign Minister Qin Gang has been missing for almost a month.

And what message does his disappearance convey internally?

For the system’s bureaucrats, the case shows that no one is safe. Qin, after all, was supposedly Xi’s favorite. Now the whole affair could paralyze the entire party-bureaucracy, especially that of the foreign ministry. When the state’s top dog disappears, everyone in the organization freezes. Because no one is certain why the person has been taken. So you are not sure how any of your actions and decisions would be looked upon by the incoming replacement or by Qin himself if he reappears. If you work in the ministry, you don’t know who can be trusted now or who you can safely collaborate with. As a consequence, nothing gets done except for the most routine operations.

You met Qin Gang several times when you were still close to Beijing’s elites. What was your impression of him?

I know and have worked with many bureaucrats in the foreign ministry. And I have met Qin Gang on several occasions throughout the years. He’s more personable, more international in outlook, and a better communicator than most of the other bureaucrats around him. But Xi ignored and overruled protocols in Qin’s promotions. Foreign ministry employees tend to follow a very specific career path. They usually have a degree from one to three particular schools in Beijing, often majoring in languages. They end up at the Foreign Ministry after graduation and patiently work on their careers there, rising through the ranks. Qin has leapfrogged many others with his advancement in recent years. Many director generals and vice ministers in the foreign ministry could be jealous and angry about that. Backstabbing is a common practice within the party-bureaucracy.

Your ex-wife had apparently also made enemies at the highest level. Shortly before publishing your book about her story, she suddenly contacted you for the first time in years. From an unknown location, she demanded over the phone that you reconsider publishing the book for the sake of your son. What has happened since then? Have you heard from her again?

She was actually released after my book came out. She talks to our son from time to time on the phone. But she can’t really talk about her experiences. Every call can be expected to be monitored. She watches carefully what she says. Imagine: Four years in solitary confinement. Four weeks would be hard already. People that go through that are scarred for life. And she can’t leave China to meet our son here in the UK. And we can’t visit her in China either. Otherwise, we risk disappearing as well.

Desmond Shum and Whitney Duan with their son on a family trip before Duan’s arrest.

Did she describe to you where and under what conditions she was held during those years?

No. But she did not receive special treatment. In these cases, the authorities usually use an entire building, like a three-star hotel, and convert every room into a cell. The rooms are padded, so that you can not kill yourself. Cameras are in every corner. You are monitored 24/7, including in the bathroom. They will interrogate you continuously. You will have to write confessions. They make you study Xi-Jinping-thoughts. That’s the usual practice.

Beijing apparently doesn’t care what it looks like to the outside world. Domestically, reports and online speculation about the disappearances are being censored. Does the leadership continue to see arrests under the guise of anti-corruption as a tried and tested strategy to put certain people in their place, or did the system spiral out of control at some point?

In this kind of regime, everything is unpredictable. Who would have thought four months ago that the foreign minister could disappear? But this unpredictability is, in many ways, deliberate. That’s how you scare people. That’s how a dictatorship forces people to self-regulates. The anti-corruption ministry was set up in the 1950s. Back then, tens of thousands were already arrested with a much smaller bureaucracy. If you look into Chinese history, you realize these campaigns repeat themselves. Without independent judicatory, without a free press, it will always come back.

Are you afraid that China might export this model if it becomes an even more influential world power?

No. Because I think that China has peaked already. From here on, it just goes downward, the only question is with what pace. It will never be the biggest economy in the world. The economic model is flawed and has run its course. Since 2008 they have put stimulus in every sector, whether it’s consumption, manufacturing, real estate or finance. Another stimulus is not solving the problem. You need to change the model. Changing the model would change the political power structure. You need to give more power to the people, to the consumers. But the party is unwilling to do that because that would take away their power.

Desmond Shum 沈棟 was born 1968 in Shanghai and raised in Hong Kong. As businessman and real estate expert, he developed many prestigious projects, including the Beijing Airport Cargo Terminal, China’s largest air cargo logistics facility. He was married to Whitney Duan, once one of the wealthiest businesswomen in China. Together they have a son. Duan was detained in 2017, possibly in relation to an anti-corruption investigation into her close business partner Sun Zhengcai. Shum published a book about her story and his experience with the political elites of Beijing. “Red Roulette: An Insider’s Story of Wealth, Power, Corruption, and Vengeance in Today’s China” was published in 2021. Shum lives with his son in the UK.

  • Human Rights
  • Qin Gang
  • Society

Feature

Tech billionaires outdo each other with AI investments

The Chinese company MIDU presented a versatile AI model at the World Artificial Intelligence Conference in Shanghai last June: In addition to knowledge questions and answers, it can also produce public opinion analysis reports and write personal letters.

After their failed debut, Chinese companies are keen to make up lost ground as quickly as possible in the race for AI language models such as ChatGPT. The Chinese internet company Baidu recently announced to have already significantly improved its Ernie Bot.

In late June, the company pointed to a test in the state-run newspaper China Science Daily, which supposedly found that some capabilities of Ernie’s latest version are now even superior to industry leader ChatGPT. Just three months after the release of the first version of Ernie Bot, “significant improvements” have been made, according to a statement from Baidu’s CTO Haifeng Wang.

These claims are certainly hard to verify. But the tone in China’s social media has also changed as of late. While the Chinese internet was still poking fun at Ernie’s abilities after the failed debut of China’s first AI language model in March, testers now seem increasingly satisfied with the product.

Tech companies aim to challenge Google and Amazon

It is also clear that the hype surrounding ChatGPT has been a wake-up call for Chinese companies. China’s tech industry calls it a new “iPhone moment.” No one wants to miss out on being there when AI language models penetrate more and more areas of everyday life and the workplace.

The industry describes this as a “race” between Chinese tech billionaires. They are said to be “obsessed” with rivaling US giants Google, Microsoft and Amazon when it comes to artificial intelligence. “We all heard the sound of the starter pistol in the race,” Bloomberg quoted Wang Xiaochuan, who once sold his search engine Sogou to Tencent and is now also working on an AI language model with his startup A Hundred Rivers. “China is still three years behind the US, but we may not need three years to catch up,” Wang says.

Investors are lining up

Among China’s major technology companies, Alibaba and SenseTime, which is best known for its intelligent facial recognition, have already introduced their own voice models alongside Baidu. But a large number of other investors are currently pushing into the sector.

They include Wang Changhu, former director of ByteDance’s AI lab; Zhou Bowen, former president of JD.com’s AI and cloud computing division; Meituan co-founder Wang Huiwen; and venture capitalist Kai-fu Lee. According to estimates, around 50 startups in China are working on their own AI language models.

Not only do these companies have abundant capital, but they can also count on Beijing’s support. Its leadership has recognized that developing its own AI language models is of great importance to its own economy, especially in light of the tensions with the United States. Washington already tries to slow down China’s progress.

Lack of chips

Due to the restrictions imposed by the United States, AI companies in China still do not have enough powerful chips at their disposal. Their hardware-demanding models are therefore making only slow progress. Nvidia’s A100 processor and its successor H100, which are considered the gold standard in the industry, are not allowed to be sold to China.

Nvidia has so far been allowed to offer a scaled-down version, the A800, in the People’s Republic. However, this chip could also soon fall under the stricter US ban.

  • Alibaba
  • Artificial intelligence
  • Baidu
  • Chips
  • Technology

News

Putin wants to replace Ukrainian grain

A week after Russia canceled its grain agreement, Russia’s President Vladimir Putin stated that his country was ready to replace Ukrainian grain supplies. His country is in a position to “replace Ukrainian grain on both a commercial and gratuitous basis, especially as we expect another record harvest this year,” Putin wrote on the Kremlin’s website. Russia allowed the international grain agreement to expire last week.

The United Nations, but also China, criticized Putin for suspending the agreement. They fear famine, especially in Africa. The leadership in Beijing explicitly urged Putin to allow exports of Ukrainian grain via the Black Sea again.

In his letter, Putin countered that the export corridor agreed a year ago had lost its humanitarian significance. Of the total of nearly 33 million tons of grain exported under the agreement, the majority went to high-income and upper-middle-income countries, he said. Thus, The grain deal was “shamelessly used exclusively for the enrichment of large American and European businesses that exported and resold grain from Ukraine,” Putin claimed shortly before the upcoming Russia-Africa summit scheduled for Thursday in St. Petersburg.

Ukraine is indeed the third largest grain supplier to China after the US and Australia. But if deliveries from Ukraine were to cease, wealthy countries would order grain from other parts of the world, resulting in skyrocketing prices on the global market. And that, in turn, would hit the poor countries particularly hard. flee

  • Geopolitics
  • Russland
  • Ukraine

Politburo boosts the economy

The Communist Party has adopted moderate economic stimulus measures. The situation in the real estate market will be optimized and adjusted “in due course,” the official Xinhua news agency reported Monday after a Politburo meeting. The leadership is also very concerned about the debt of local authorities. The labor market is to be stabilized. CP leader Xi Jinping chaired the Politburo meeting.

According to the announcement, special support is to be given to the research and application of artificial intelligence and the platform economy. The plans are aimed at restoring investors’ confidence in the Chinese markets. In parallel, the Development and Reform Commission (NDRC) announced plans to stimulate private investment. Details such as the amount of funding were generally not disclosed.

The Chinese economy is currently struggling to gain momentum due to a number of overlapping problems. Economists had puzzled over whether a massive stimulus package would now be introduced, as was the case in 2008 when Beijing mobilized half a billion euros. But the national economy is much larger today than it was then – even such a large sum would not make that much difference. The Politburo is therefore focusing more on strengthening the economy’s own momentum. fin

  • Economic policy
  • Economic Situation
  • NDRC

Philips concerned about China business

Political tensions over China have Dutch medical technology manufacturer Philips casting doubt over business developments around the People’s Republic. The development of relations between the United States and China, along with the European Union and the People’s Republic, is a cause for concern, as are attempts by China to become more self-reliant in critical technologies such as medical technology, Philips said Monday in its second-quarter report. The United States, the EU and China account for about two-thirds of the group’s sales.

Despite this, the group increased its adjusted operating profit (EBITDA) to 453 million euros between April and June, which was stronger than expected. Sales increased by around 9 percent to 4.5 billion euros. For the full year, Philips now expects revenue growth in the mid-single-digit percentage – previously, the Dutch company had expected growth in the low single-digit percentage. Philips is also more optimistic about the adjusted EBITDA margin.

Nevertheless, Philips shares fell by more than seven percent at times. ING analysts wrote, for instance, that the outlook did not seem very ambitious in view of the first-half result. rtr

  • Geopolitics
  • Technology

Foxconn acquires stake in automotive supplier ZF

Automotive supplier ZF Friedrichshafen is bringing Taiwanese company Foxconn, known primarily as an Apple supplier, on board as a co-owner for its axle assembly division. The group, operating under the name Hon Hai Technology, will acquire 50 percent of ZF Chassis Modules, the two companies announced.

For some time, ZF had been looking for a partner for its low-margin business with 3,300 employees, which is expected to generate more than four billion euros in sales this year. ZF Chassis Modules GmbH is valued at around one billion euros. This means that Foxconn is likely to pay about 500 million euros. ZF intends to use the money to reduce its debt burden.

Electromobility is one of Foxconn’s declared development fields. ZF Chassis Modules assembles axle components with other components such as brakes and entire drive systems, typically near large car assembly plants in countries such as China, South Africa, or Mexico, and delivers them to the assembly lines on time. rtr

  • Autoindustrie

Propaganda puts Lu Shaye on front page

Wolf-warrior diplomat Lu Shaye has apparently not fallen as far from Beijing’s graces as news reports in recent months suggested. The state newspaper China Daily devoted a front-page story to the ambassador in Paris, in which Lu praised French-Chinese relations. The occasion was the return of a panda.

Lu is known for his harsh criticism of Western countries and their media, while at the same time defending his own country with particular zeal. In April, he had denied the former Soviet states the right to exist, thus crossing a red line, according to observers. Since many of these countries count among China’s close allies, Beijing promptly issued a public correction. Shortly after, news circulated that Lu had been recalled and would become president of a friendship association. No date was given for the change.

The latest article in the China Daily no longer mentions that Lu is changing jobs. The prominent placement of the article on relations between the two countries at least suggests that he continues to be favored as a mouthpiece for Chinese views. At least those who are to be silenced do not appear on the first page. Nothing has been heard for weeks from China’s Foreign Minister Qin Gang, who has probably fallen out of favor in some way. ari/fin

  • Diplomacy
  • Lu Shaye

Heads

Andreas Landwehr – three decades of China correspondence

For over 30 years, Andreas Landwehr was dpa’s China correspondent in Beijing. Now he is returning.

Andreas Landwehr is not concerned about reverse culture shock. “I honestly have no worries at all. We are totally looking forward to going back to Germany,” says the 64-year-old. He was a foreign correspondent for Deutsche Presse-Agentur dpa for a full 33 years, 30 of them in China. Now Landwehr is moving to Berlin. With him, one of the most experienced China correspondents in the German-language media world is leaving the People’s Republic. “It was always clear that we would leave at some point,” Landwehr says. “For us, the time has now come.”

Landwehr had lived in the Chinese capital since February 1993. He learned Mandarin while studying at the Seminar for Oriental Languages at the Rheinische Wilhelms University in Bonn, where he graduated in 1983. During his studies, he spent two years in Taiwan. In 1984, he began his traineeship at dpa. After several years in the foreign and domestic editorial departments, he moved to the United States for his first post as a foreign correspondent. “In 1990, I went to Washington. There I watched the (German) reunification celebration on CNN.” Landwehr says that every day felt like history was being made during that time. Three years later, he headed for the Far East.

As a dpa correspondent, Landwehr has been a contact and guidance source for German media professionals in China for 30 years. What goes over the ticker at the German news agency provides orientation for other journalists in the region.

The way foreign correspondents work in China has changed several times over the past three decades. Landwehr recalls experiencing the 1990s as somewhat of an initial and getting-to-know-each-other phase from both sides. “Then came the 2000s and with it an amazing openness.” He is particularly positive about the year leading up to the 2008 Olympics. “We were able to interview anyone who would agree on their own. We didn’t need permission to travel. That was already a real breakthrough.”

The opening was followed by increasing restrictions for fear of a spillover of the “Jasmine Revolution” in 2011. When Xi Jinping took office in 2012, the political climate changed fundamentally anyway. Chinese experts and researchers often stopped talking to foreign journalists because they feared problems for themselves. It is too “delicate,” Landwehr often hears in response to his interview requests. Permits usually have to be obtained for interviews. This has become even more difficult in the past three years during the Covid pandemic. However, Landwehr emphasizes that it is still possible to talk about politics with Chinese citizens in private. He is often surprised by the openness of people.

From a purely professional perspective, China has always fascinated him precisely because of these difficulties – you have to dig there. “I always found China to be the greatest job because you still really have to do journalism here. There’s more of a lack of information.” And getting it, after all, is the whole appeal of the job. In 2011, the Reemtsma Foundation presented Landwehr with the Liberty Award for his work, because he has made a special contribution to human rights issues. Ten years ago, Landwehr took over as regional office manager for East Asia, then for the entire Asia-Pacific region in 2020.

From being a digging field reporter, he now returns to the office at dpa headquarters, from Sanlitun to the heart of Berlin. “For me personally, this closes a journalistic circle. I left the politics desk to work abroad back then, and now I’m returning there.” Since 2005, Landwehr has also reported on G8, G7 and G20 summits and has covered non-governmental organizations (NGOs), among other things – most recently in Hiroshima in May. Of course, he will miss the colleagues with whom he worked closely for days on end at summit meetings, Landwehr says. But he is already looking forward to working with the team in Berlin.

However, he will not bring one of his dream stories with him on his return trip: “I would have loved to write about my attendance at a Politburo meeting. Unfortunately, that hasn’t worked out in 30 years,” says Landwehr with a wink, because the innermost circle of power only meets behind closed doors. He would also have loved to travel to Tibet again before leaving. The encounters with its people, especially those outside the political power structure impressed him most during his time in China.

He particularly recalls a trip to a village in Guangxi in 1997 as part of a World Bank project to fight poverty. One of the extremely poor villagers, a young man who was taking care of his elderly parents, invited him into his hut, told him about his story and shared bananas with him. “That moved me very much and is actually almost symbolic for me of many encounters with people here.” China must be seen in a more differentiated way, the journalist emphasizes: “Looking at China from the outside, it all looks like a threat. But you have to distinguish between the system, the regime, the leadership and the people.”

He will certainly miss the daily encounters with them, says Landwehr. The same goes for the Chinese cuisine. “It’s just amazing.” There are also some good restaurants in Berlin that are relatively authentic, he says. But he has made other provisions: “I love cooking, and I’m in the process of rehearsing a few Chinese dishes so that I can make them as well in the future,” he says proudly.

Executive Moves

Xu Song becomes CEO of port operator China Merchants Ports. He was previously the company’s Chief Operating Officer. Xu was also head of the Port of Liaoning. Xu’s successor as COO of China Merchants Ports will be Lu Yongxin.

Weidong Ye is the new CEO at German biotechnology company Airnergy umwelttechnik GmbH. He was previously General Manager at Emco Precision Hardware China in Chuzou.

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

Dessert

Sports in the heat wave: These men play water basketball in Liuzhou.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    Where is Foreign Minister Qin Gang? Desmond Shum cannot answer this question in detail either. But he is very familiar with the subject of disappearing officials. As a businessman, Shum maintained close contact with the CCP leadership, but fell out of favor and now lives in the UK. He is the author of the book “Chinese Roulette” about the world of communist billionaires.

    Fabian Peltsch spoke with him about the disappearance of the foreign minister – and learned that Shum’s ex-wife is now free again. She, too, had disappeared and had been held without trial for four years in an undisclosed location. Incidentally, a special meeting of the Standing Committee of the National People’s Congress is scheduled for today, Tuesday. Perhaps then, the public will learn more about Qin’s whereabouts.

    The first demonstrations of Chinese alternatives to ChatGPT were rather disappointing. But this should not mislead us, writes Joern Petring to kick off our series on artificial intelligence. China’s tech billionaires outdo each other with investments in new applications. Although the shortage of high-performance chips due to the US sanctions continues to impede growth, given the high level of state and private efforts, it is only a matter of time before China catches up.

    Elon Musk has rebranded Twitter as X and removed the bird from the logo. He wants to turn Twitter into a Western WeChat. Frank Sieren has already taken a look at what to make of this over a year ago. In the meantime, however, it became clear that these plans are a bit lofty. While WeChat has entered an empty market in China due to tech controls, “X” will have to take on WhatsApp, Paypal, Teams, Facebook and so on, depending on the intended use. A super app cannot be built so easily nowadays.

    Your
    Finn Mayer-Kuckuk
    Image of Finn  Mayer-Kuckuk

    Interview

    ‘It’s an abnormal, unpredictable state’

    Entrepreneur Desmond Shum once maintained close ties with China’s top cadres. So he knows the enigmatic Chinese system from the inside.

    Your ex-wife Duan Weihong used to be one of China’s wealthiest women. Before her sudden disappearance in 2017, she maintained close contact with high-ranking government cadres under Hu Jintao and Wen Jiabao. In your book “Red Roulette,” you give a profound insight into the corruption and intransparency of a system in which even the most powerful can suddenly disappear, as is the case now with Foreign Minister Qin Gang, the most prominent case so far. Since you know the apparatus from the inside: What do you think happened to him?

    His disappearance can have all kinds of causes. It’s like that in regimes like China or Russia. Decisions are made in secrecy, there is no transparency and no open process, from Qin’s rapid rise through the ranks to his downfall last week. Everyone is trying to read through the tea leaves now, including the bureaucrats of the Communist Party of China themselves.

    What signal does the sudden disappearance of China’s foreign minister send to the world?

    From the outside, it looks terrible for Xi Jinping. He’s indecisive and incompetent in handling the current situation. One would think any government leader would be more competent: preparing a storyline, appointing a successor, or letting him reappear, all in quick succession. Any execution is better than having the nation’s foreign minister disappear for weeks, refusing to answer questions about his whereabouts and keeping the entire world in suspense. It demonstrates the current state of China. It is an abnormal state, an unpredictable state.

    Qin Gang
    China’s Foreign Minister Qin Gang has been missing for almost a month.

    And what message does his disappearance convey internally?

    For the system’s bureaucrats, the case shows that no one is safe. Qin, after all, was supposedly Xi’s favorite. Now the whole affair could paralyze the entire party-bureaucracy, especially that of the foreign ministry. When the state’s top dog disappears, everyone in the organization freezes. Because no one is certain why the person has been taken. So you are not sure how any of your actions and decisions would be looked upon by the incoming replacement or by Qin himself if he reappears. If you work in the ministry, you don’t know who can be trusted now or who you can safely collaborate with. As a consequence, nothing gets done except for the most routine operations.

    You met Qin Gang several times when you were still close to Beijing’s elites. What was your impression of him?

    I know and have worked with many bureaucrats in the foreign ministry. And I have met Qin Gang on several occasions throughout the years. He’s more personable, more international in outlook, and a better communicator than most of the other bureaucrats around him. But Xi ignored and overruled protocols in Qin’s promotions. Foreign ministry employees tend to follow a very specific career path. They usually have a degree from one to three particular schools in Beijing, often majoring in languages. They end up at the Foreign Ministry after graduation and patiently work on their careers there, rising through the ranks. Qin has leapfrogged many others with his advancement in recent years. Many director generals and vice ministers in the foreign ministry could be jealous and angry about that. Backstabbing is a common practice within the party-bureaucracy.

    Your ex-wife had apparently also made enemies at the highest level. Shortly before publishing your book about her story, she suddenly contacted you for the first time in years. From an unknown location, she demanded over the phone that you reconsider publishing the book for the sake of your son. What has happened since then? Have you heard from her again?

    She was actually released after my book came out. She talks to our son from time to time on the phone. But she can’t really talk about her experiences. Every call can be expected to be monitored. She watches carefully what she says. Imagine: Four years in solitary confinement. Four weeks would be hard already. People that go through that are scarred for life. And she can’t leave China to meet our son here in the UK. And we can’t visit her in China either. Otherwise, we risk disappearing as well.

    Desmond Shum and Whitney Duan with their son on a family trip before Duan’s arrest.

    Did she describe to you where and under what conditions she was held during those years?

    No. But she did not receive special treatment. In these cases, the authorities usually use an entire building, like a three-star hotel, and convert every room into a cell. The rooms are padded, so that you can not kill yourself. Cameras are in every corner. You are monitored 24/7, including in the bathroom. They will interrogate you continuously. You will have to write confessions. They make you study Xi-Jinping-thoughts. That’s the usual practice.

    Beijing apparently doesn’t care what it looks like to the outside world. Domestically, reports and online speculation about the disappearances are being censored. Does the leadership continue to see arrests under the guise of anti-corruption as a tried and tested strategy to put certain people in their place, or did the system spiral out of control at some point?

    In this kind of regime, everything is unpredictable. Who would have thought four months ago that the foreign minister could disappear? But this unpredictability is, in many ways, deliberate. That’s how you scare people. That’s how a dictatorship forces people to self-regulates. The anti-corruption ministry was set up in the 1950s. Back then, tens of thousands were already arrested with a much smaller bureaucracy. If you look into Chinese history, you realize these campaigns repeat themselves. Without independent judicatory, without a free press, it will always come back.

    Are you afraid that China might export this model if it becomes an even more influential world power?

    No. Because I think that China has peaked already. From here on, it just goes downward, the only question is with what pace. It will never be the biggest economy in the world. The economic model is flawed and has run its course. Since 2008 they have put stimulus in every sector, whether it’s consumption, manufacturing, real estate or finance. Another stimulus is not solving the problem. You need to change the model. Changing the model would change the political power structure. You need to give more power to the people, to the consumers. But the party is unwilling to do that because that would take away their power.

    Desmond Shum 沈棟 was born 1968 in Shanghai and raised in Hong Kong. As businessman and real estate expert, he developed many prestigious projects, including the Beijing Airport Cargo Terminal, China’s largest air cargo logistics facility. He was married to Whitney Duan, once one of the wealthiest businesswomen in China. Together they have a son. Duan was detained in 2017, possibly in relation to an anti-corruption investigation into her close business partner Sun Zhengcai. Shum published a book about her story and his experience with the political elites of Beijing. “Red Roulette: An Insider’s Story of Wealth, Power, Corruption, and Vengeance in Today’s China” was published in 2021. Shum lives with his son in the UK.

    • Human Rights
    • Qin Gang
    • Society

    Feature

    Tech billionaires outdo each other with AI investments

    The Chinese company MIDU presented a versatile AI model at the World Artificial Intelligence Conference in Shanghai last June: In addition to knowledge questions and answers, it can also produce public opinion analysis reports and write personal letters.

    After their failed debut, Chinese companies are keen to make up lost ground as quickly as possible in the race for AI language models such as ChatGPT. The Chinese internet company Baidu recently announced to have already significantly improved its Ernie Bot.

    In late June, the company pointed to a test in the state-run newspaper China Science Daily, which supposedly found that some capabilities of Ernie’s latest version are now even superior to industry leader ChatGPT. Just three months after the release of the first version of Ernie Bot, “significant improvements” have been made, according to a statement from Baidu’s CTO Haifeng Wang.

    These claims are certainly hard to verify. But the tone in China’s social media has also changed as of late. While the Chinese internet was still poking fun at Ernie’s abilities after the failed debut of China’s first AI language model in March, testers now seem increasingly satisfied with the product.

    Tech companies aim to challenge Google and Amazon

    It is also clear that the hype surrounding ChatGPT has been a wake-up call for Chinese companies. China’s tech industry calls it a new “iPhone moment.” No one wants to miss out on being there when AI language models penetrate more and more areas of everyday life and the workplace.

    The industry describes this as a “race” between Chinese tech billionaires. They are said to be “obsessed” with rivaling US giants Google, Microsoft and Amazon when it comes to artificial intelligence. “We all heard the sound of the starter pistol in the race,” Bloomberg quoted Wang Xiaochuan, who once sold his search engine Sogou to Tencent and is now also working on an AI language model with his startup A Hundred Rivers. “China is still three years behind the US, but we may not need three years to catch up,” Wang says.

    Investors are lining up

    Among China’s major technology companies, Alibaba and SenseTime, which is best known for its intelligent facial recognition, have already introduced their own voice models alongside Baidu. But a large number of other investors are currently pushing into the sector.

    They include Wang Changhu, former director of ByteDance’s AI lab; Zhou Bowen, former president of JD.com’s AI and cloud computing division; Meituan co-founder Wang Huiwen; and venture capitalist Kai-fu Lee. According to estimates, around 50 startups in China are working on their own AI language models.

    Not only do these companies have abundant capital, but they can also count on Beijing’s support. Its leadership has recognized that developing its own AI language models is of great importance to its own economy, especially in light of the tensions with the United States. Washington already tries to slow down China’s progress.

    Lack of chips

    Due to the restrictions imposed by the United States, AI companies in China still do not have enough powerful chips at their disposal. Their hardware-demanding models are therefore making only slow progress. Nvidia’s A100 processor and its successor H100, which are considered the gold standard in the industry, are not allowed to be sold to China.

    Nvidia has so far been allowed to offer a scaled-down version, the A800, in the People’s Republic. However, this chip could also soon fall under the stricter US ban.

    • Alibaba
    • Artificial intelligence
    • Baidu
    • Chips
    • Technology

    News

    Putin wants to replace Ukrainian grain

    A week after Russia canceled its grain agreement, Russia’s President Vladimir Putin stated that his country was ready to replace Ukrainian grain supplies. His country is in a position to “replace Ukrainian grain on both a commercial and gratuitous basis, especially as we expect another record harvest this year,” Putin wrote on the Kremlin’s website. Russia allowed the international grain agreement to expire last week.

    The United Nations, but also China, criticized Putin for suspending the agreement. They fear famine, especially in Africa. The leadership in Beijing explicitly urged Putin to allow exports of Ukrainian grain via the Black Sea again.

    In his letter, Putin countered that the export corridor agreed a year ago had lost its humanitarian significance. Of the total of nearly 33 million tons of grain exported under the agreement, the majority went to high-income and upper-middle-income countries, he said. Thus, The grain deal was “shamelessly used exclusively for the enrichment of large American and European businesses that exported and resold grain from Ukraine,” Putin claimed shortly before the upcoming Russia-Africa summit scheduled for Thursday in St. Petersburg.

    Ukraine is indeed the third largest grain supplier to China after the US and Australia. But if deliveries from Ukraine were to cease, wealthy countries would order grain from other parts of the world, resulting in skyrocketing prices on the global market. And that, in turn, would hit the poor countries particularly hard. flee

    • Geopolitics
    • Russland
    • Ukraine

    Politburo boosts the economy

    The Communist Party has adopted moderate economic stimulus measures. The situation in the real estate market will be optimized and adjusted “in due course,” the official Xinhua news agency reported Monday after a Politburo meeting. The leadership is also very concerned about the debt of local authorities. The labor market is to be stabilized. CP leader Xi Jinping chaired the Politburo meeting.

    According to the announcement, special support is to be given to the research and application of artificial intelligence and the platform economy. The plans are aimed at restoring investors’ confidence in the Chinese markets. In parallel, the Development and Reform Commission (NDRC) announced plans to stimulate private investment. Details such as the amount of funding were generally not disclosed.

    The Chinese economy is currently struggling to gain momentum due to a number of overlapping problems. Economists had puzzled over whether a massive stimulus package would now be introduced, as was the case in 2008 when Beijing mobilized half a billion euros. But the national economy is much larger today than it was then – even such a large sum would not make that much difference. The Politburo is therefore focusing more on strengthening the economy’s own momentum. fin

    • Economic policy
    • Economic Situation
    • NDRC

    Philips concerned about China business

    Political tensions over China have Dutch medical technology manufacturer Philips casting doubt over business developments around the People’s Republic. The development of relations between the United States and China, along with the European Union and the People’s Republic, is a cause for concern, as are attempts by China to become more self-reliant in critical technologies such as medical technology, Philips said Monday in its second-quarter report. The United States, the EU and China account for about two-thirds of the group’s sales.

    Despite this, the group increased its adjusted operating profit (EBITDA) to 453 million euros between April and June, which was stronger than expected. Sales increased by around 9 percent to 4.5 billion euros. For the full year, Philips now expects revenue growth in the mid-single-digit percentage – previously, the Dutch company had expected growth in the low single-digit percentage. Philips is also more optimistic about the adjusted EBITDA margin.

    Nevertheless, Philips shares fell by more than seven percent at times. ING analysts wrote, for instance, that the outlook did not seem very ambitious in view of the first-half result. rtr

    • Geopolitics
    • Technology

    Foxconn acquires stake in automotive supplier ZF

    Automotive supplier ZF Friedrichshafen is bringing Taiwanese company Foxconn, known primarily as an Apple supplier, on board as a co-owner for its axle assembly division. The group, operating under the name Hon Hai Technology, will acquire 50 percent of ZF Chassis Modules, the two companies announced.

    For some time, ZF had been looking for a partner for its low-margin business with 3,300 employees, which is expected to generate more than four billion euros in sales this year. ZF Chassis Modules GmbH is valued at around one billion euros. This means that Foxconn is likely to pay about 500 million euros. ZF intends to use the money to reduce its debt burden.

    Electromobility is one of Foxconn’s declared development fields. ZF Chassis Modules assembles axle components with other components such as brakes and entire drive systems, typically near large car assembly plants in countries such as China, South Africa, or Mexico, and delivers them to the assembly lines on time. rtr

    • Autoindustrie

    Propaganda puts Lu Shaye on front page

    Wolf-warrior diplomat Lu Shaye has apparently not fallen as far from Beijing’s graces as news reports in recent months suggested. The state newspaper China Daily devoted a front-page story to the ambassador in Paris, in which Lu praised French-Chinese relations. The occasion was the return of a panda.

    Lu is known for his harsh criticism of Western countries and their media, while at the same time defending his own country with particular zeal. In April, he had denied the former Soviet states the right to exist, thus crossing a red line, according to observers. Since many of these countries count among China’s close allies, Beijing promptly issued a public correction. Shortly after, news circulated that Lu had been recalled and would become president of a friendship association. No date was given for the change.

    The latest article in the China Daily no longer mentions that Lu is changing jobs. The prominent placement of the article on relations between the two countries at least suggests that he continues to be favored as a mouthpiece for Chinese views. At least those who are to be silenced do not appear on the first page. Nothing has been heard for weeks from China’s Foreign Minister Qin Gang, who has probably fallen out of favor in some way. ari/fin

    • Diplomacy
    • Lu Shaye

    Heads

    Andreas Landwehr – three decades of China correspondence

    For over 30 years, Andreas Landwehr was dpa’s China correspondent in Beijing. Now he is returning.

    Andreas Landwehr is not concerned about reverse culture shock. “I honestly have no worries at all. We are totally looking forward to going back to Germany,” says the 64-year-old. He was a foreign correspondent for Deutsche Presse-Agentur dpa for a full 33 years, 30 of them in China. Now Landwehr is moving to Berlin. With him, one of the most experienced China correspondents in the German-language media world is leaving the People’s Republic. “It was always clear that we would leave at some point,” Landwehr says. “For us, the time has now come.”

    Landwehr had lived in the Chinese capital since February 1993. He learned Mandarin while studying at the Seminar for Oriental Languages at the Rheinische Wilhelms University in Bonn, where he graduated in 1983. During his studies, he spent two years in Taiwan. In 1984, he began his traineeship at dpa. After several years in the foreign and domestic editorial departments, he moved to the United States for his first post as a foreign correspondent. “In 1990, I went to Washington. There I watched the (German) reunification celebration on CNN.” Landwehr says that every day felt like history was being made during that time. Three years later, he headed for the Far East.

    As a dpa correspondent, Landwehr has been a contact and guidance source for German media professionals in China for 30 years. What goes over the ticker at the German news agency provides orientation for other journalists in the region.

    The way foreign correspondents work in China has changed several times over the past three decades. Landwehr recalls experiencing the 1990s as somewhat of an initial and getting-to-know-each-other phase from both sides. “Then came the 2000s and with it an amazing openness.” He is particularly positive about the year leading up to the 2008 Olympics. “We were able to interview anyone who would agree on their own. We didn’t need permission to travel. That was already a real breakthrough.”

    The opening was followed by increasing restrictions for fear of a spillover of the “Jasmine Revolution” in 2011. When Xi Jinping took office in 2012, the political climate changed fundamentally anyway. Chinese experts and researchers often stopped talking to foreign journalists because they feared problems for themselves. It is too “delicate,” Landwehr often hears in response to his interview requests. Permits usually have to be obtained for interviews. This has become even more difficult in the past three years during the Covid pandemic. However, Landwehr emphasizes that it is still possible to talk about politics with Chinese citizens in private. He is often surprised by the openness of people.

    From a purely professional perspective, China has always fascinated him precisely because of these difficulties – you have to dig there. “I always found China to be the greatest job because you still really have to do journalism here. There’s more of a lack of information.” And getting it, after all, is the whole appeal of the job. In 2011, the Reemtsma Foundation presented Landwehr with the Liberty Award for his work, because he has made a special contribution to human rights issues. Ten years ago, Landwehr took over as regional office manager for East Asia, then for the entire Asia-Pacific region in 2020.

    From being a digging field reporter, he now returns to the office at dpa headquarters, from Sanlitun to the heart of Berlin. “For me personally, this closes a journalistic circle. I left the politics desk to work abroad back then, and now I’m returning there.” Since 2005, Landwehr has also reported on G8, G7 and G20 summits and has covered non-governmental organizations (NGOs), among other things – most recently in Hiroshima in May. Of course, he will miss the colleagues with whom he worked closely for days on end at summit meetings, Landwehr says. But he is already looking forward to working with the team in Berlin.

    However, he will not bring one of his dream stories with him on his return trip: “I would have loved to write about my attendance at a Politburo meeting. Unfortunately, that hasn’t worked out in 30 years,” says Landwehr with a wink, because the innermost circle of power only meets behind closed doors. He would also have loved to travel to Tibet again before leaving. The encounters with its people, especially those outside the political power structure impressed him most during his time in China.

    He particularly recalls a trip to a village in Guangxi in 1997 as part of a World Bank project to fight poverty. One of the extremely poor villagers, a young man who was taking care of his elderly parents, invited him into his hut, told him about his story and shared bananas with him. “That moved me very much and is actually almost symbolic for me of many encounters with people here.” China must be seen in a more differentiated way, the journalist emphasizes: “Looking at China from the outside, it all looks like a threat. But you have to distinguish between the system, the regime, the leadership and the people.”

    He will certainly miss the daily encounters with them, says Landwehr. The same goes for the Chinese cuisine. “It’s just amazing.” There are also some good restaurants in Berlin that are relatively authentic, he says. But he has made other provisions: “I love cooking, and I’m in the process of rehearsing a few Chinese dishes so that I can make them as well in the future,” he says proudly.

    Executive Moves

    Xu Song becomes CEO of port operator China Merchants Ports. He was previously the company’s Chief Operating Officer. Xu was also head of the Port of Liaoning. Xu’s successor as COO of China Merchants Ports will be Lu Yongxin.

    Weidong Ye is the new CEO at German biotechnology company Airnergy umwelttechnik GmbH. He was previously General Manager at Emco Precision Hardware China in Chuzou.

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

    Dessert

    Sports in the heat wave: These men play water basketball in Liuzhou.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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