US whistleblower Frances Haugen is currently on tour in Europe: In Brussels, Paris, and Berlin, the 37-year-old warned of the power of the Facebook platform and its newly named parent company Metaverse. Chances are that Beijing listened eagerly to the deliberations on data theft and manipulation because, while it is not news that Western networks are not particularly welcome in the People’s Republic, it did come as a surprise how relentlessly the leadership in China has been cracking down on the tech sector since the middle of this year. After all, the sector is highly innovative and a growth engine for the country.
For economist Doris Fischer of the Julius-Maximilians-Universität of Würzburg, however, the move is understandable to a certain extent: “Of course the leadership knows that the country needs these vital companies. At the same time, however, it also looks at other countries and sees how uncontrollable and dangerous social networks, in particular, can become. They want to prevent that.”
In an interview with Felix Lee, Fischer talks about the Chinese government’s “headache” regarding tech companies. The economist also explains why bad news in individual sectors does not immediately mean that growth will collapse. Unlike other experts, she cannot currently identify any foreclosure in the country.
But it is precisely such an increasingly isolated China that observers now fear after the “historic resolution” of the 6th Plenum last week. China.Table asked politicians and China experts for their assessment of President Xi Jinping’s expansion of power. It turns out that the hope that Xi’s hard-line could weaken internally and externally is visibly fading into the sand. The personality cult around the “party emperor” does not suggest an easy diplomatic future between Brussels and Beijing.
We wish you a good start to the week!
Disclaimer: This interview has been translated into English and is not considered an official translation by any party involved in the interview.
Ms. Fischer, delivery bottlenecks, power outages, tech companies under pressure, then the crisis of the real estate giant Evergrande – the problems are piling up. What is the current state of the world’s second-largest economy?
I recently spoke to a German entrepreneur who described how rapidly the transport costs from China to Germany have risen for many companies. There are not enough containers. There are various reasons for this. But COVID is still one of them. Although China has the pandemic mostly under control in its own country, the virus still plays a serious role. In the summer months, it was the ports of Ningbo and Shenzhen that the authorities partially closed down because of a few cases. Now it is also hitting rail traffic. The Chinese authorities recently closed two border crossings for freight trains because there were two cases. There is now also a backlog in rail traffic.
One COVID case in China – already the entire world trade is stagnating? How could it come to this?
Since the turn of the millennium, global supply chains have become so finely chiseled and perfectly coordinated that companies in Germany also notice immediately if there is a hitch at just one point. There are currently also clearance problems in Great Britain and the USA. The entire system is highly vulnerable. And as the largest producer not only of consumer goods but also of industrial primary products, China has a key role to play.
Most countries have long since resigned themselves to living with the virus somehow – especially since vaccines are available. Is China not overreacting?
A year and a half ago, the Chinese government set itself the goal of eradicating the virus. Now it is finding it difficult to back away from that promise.
The side effects of the “Zero COVID” strategy are significant.
Of course, it hurts. The party secretary of Inner Mongolia had to leave after only two months in office because of an outbreak in his province. More than five million Nanjing citizens were not allowed to leave over the October holidays because of a few cases. The leadership is really about suppressing the virus. It is taking a particularly rigid approach in the capital, Beijing. There, for the 6th Plenum of the National People’s Congress and a few months before the Winter Olympics, stricter restrictions on entry are already taking effect.
Unlike his predecessors, Xi Jinping does not seem to put economic growth above everything?
Growth in the third quarter was 4.9 percent. That is less than some expected. But I think the belief that China always has high growth figures is misguided. After all, the absolute base is getting bigger and bigger, which would make for exponential expansion. China’s prediction that growth will first level off at an average of 6 percent over the next few years – and that is without COVID – and then gradually decline seems realistic to me.
What role does the pandemic play in economic activity?
Of course, the pandemic also has an impact on China’s economy. There was also the great flood in Henan and other effects of climate change. The crisis with Evergrande will dampen the real estate market. And the crackdown on tech corporations will have an economic impact. Still, I wouldn’t overstate all of this. After all, China is really like a continent. If there are problems in one region, it doesn’t mean that the whole country is having a hard time.
You sound optimistic.
I do think that the Chinese government is nervous. It has quite a lot of problems to deal with at the same time at the moment. But some of them are deliberate. The regulation of the tech sector in China has been a long time coming. These big companies have had a free hand and have become very large and influential. They engage in unfair competition and let shady characters do business. And then, Alibaba CEO Jack Ma also publicly claims that his company can do better than the state banks. That’s the straw that broke the camel’s back.
But China’s tech sector is the area that is highly innovative.
Of course, the leadership knows that the country needs these vital companies. But at the same time, it looks at other countries and sees how uncontrollable and dangerous social networks can become. That’s what it wants to prevent. In a civilized society, people don’t spit in the corner. That’s what the CCP leadership wanted to prevent in the eighties. Today it wants a civilized society in which decency also prevails in business. Many entrepreneurs in China still have a Wild West attitude. Their business models are geared towards exploiting as many legal loopholes as possible. And for a long time, there were quite a lot of them in China. But the government prefers business ideas that develop within the framework of the rules and regulations.
But isn’t it going too far? It even restricts online gaming for children.
There is probably a bit of populism behind this. In China, too, many parents are worried about their children’s gaming preferences. Certainly, the idea behind this measure is to create better people. Mao had already tried to do that via campaigns. Xi is now trying to do that via regulation and the social credit system that rates citizens’ behavior. Some businesses may not like this. They will have to adapt to the new rules. And indeed, some people are annoyed that their business model no longer works. But Xi certainly won’t go so far as to break up the big tech companies. He certainly doesn’t want to do that.
Maybe not completely crushed. But it does take away their innovative power.
I remember well a conversation I had with Chinese government-related experts before the pandemic. In that conversation, it became clear to me that the Chinese government has a bellyache with tech corporations. One even said: “If we had your hidden champions, we would gladly hand over our Alibabas to you.” Behind that statement is this deep belief that economics has to be something real, that is, something you can touch, build, or eat. The whole Internet economy is suspect from this perspective.
However, the IT industry has brought China enormously forward technologically.
It has. But there is another aspect that the Chinese government is concerned about, which is also an issue in the West: the question of the power of these platforms. They have become very large and very rich companies that have collected an incredible amount of data. That makes them very influential. We also discuss the power of Facebook and its competitors for a reason. In our country, the question is: Are these platforms a threat to democracy? In China, it is: Do they endanger the party? I find it astonishing how long the leadership has allowed these companies to operate at all.
China’s leadership, however, in many cases follows familiar patterns in its policies.
We know this procedure from other areas: You let it run its course first, and then you try to curb the excesses. In the Alibaba case, there is evidence that Jack Ma knew what was coming and that he made this speech in October last year to warn about these upcoming regulations. But in doing so, he went too far from the government’s perspective. I think that message has gotten through to tech companies. From what I understand, though, these companies continue to do well.
And the crisis of the Evergrande real estate group? A crash of the completely overheated Chinese real estate market has already been predicted several times in the past ten years.
In fact, there are several real estate companies that have major financial problems. So the Evergrande crisis is affecting the real estate market. And pretty sure some heads will roll. I get the impression that the Chinese government is trying to socially cushion small investors and private homeowners. But the government is more likely not to save the company as such. The leadership deliberately tightened the reins on this sector last year to prevent the property market from overheating. Perhaps they did not expect such a big shock. Now the motto is: Grit your teeth and get to it!
Already there is talk of the Chinese Lehman.
No, I don’t see that danger. The Chinese government will always bail out the banking sector. It is predominantly state-owned anyway – with gritted teeth, to be sure, and some people will be held accountable. But I think a complete collapse is unlikely.
Even before the pandemic began, China suggested to foreign companies: We don’t need you anymore, we can do everything ourselves by now. Now they are using the pandemic as a reason to close themselves off. What are you observing?
I think there is a misunderstanding there. But the net result may still be that there are fewer foreigners in China. The whole thing has to do with the concept of dual circulation that was introduced last year. China wants to strengthen its domestic market. The concept says a lot about breaking down market barriers within China. There are two other goals associated with this.
Which one?
Indeed, the country should become less dependent on foreign technology. Beijing wants to prevent the US from using China’s technological dependence as leverage to keep China down. At the same time, however, the leadership knows that the country still needs raw materials and markets abroad. And that’s where China actually wants to expand. With this strategy, the leadership hopes for the following: The Chinese market should be so large and so important that foreign companies will come of their own accord – but without the privileges that foreign companies have enjoyed so far, but on the conditions under which Chinese private companies must also operate.
Foreign companies in China, on the other hand, do not necessarily perceive their position as privileged. They complain that they are already disadvantaged.
Then it will now be even more difficult for them. Because the Chinese competition has become really good at the same time. In the automotive industry, there is also the fact that foreign manufacturers are not exactly the avant-garde in the trend towards electromobility. China does not want to close itself off but wants to change the previous orientation of the global markets. In the past, the compass needle of international trade flows ultimately pointed towards the US and Europe. China wants the compass needle to turn.
Doris Fischer, 56, is an economist and sinologist at the Julius-Maximilian-Universität of Würzburg. She heads the Chair of China Business and Economics there. Fischer is also Vice President of the university. In her current research projects, she is investigating the role and design of industrial policy for the energy transition as well as the effects of the Chinese social points system on companies.
Following the “historic resolution” of the 6th Plenum of the Central Committee, officials of the sole ruling Communist Party pathetically elevated head of state Xi Jinping to “helmsman”. “As long as we recognize Comrade Xi as the core, the giant ship of China’s national rejuvenation will have a helmsman and be able to weather any storm,” the head of the party’s own policy research bureau, Jiang Jinquan, said at a closing press conference of the plenum last Friday. Xi deserved to be called the “leader of the people,” he said.
Because protocol, as well as rhetoric, is of paramount symbolic importance in socialist dictatorships, Xi’s latest attribute is a sign of his central role for years to come. State founder Mao Zedong was the only chairman to date whom cadres had elevated to the unofficial status of “helmsman,” the “Great Helmsman” mind you. Mao still has the adjective ahead of his fifth-generation successor.
“If you compare the current so-called ‘historic resolution’ with the previous two by Mao Zedong and Deng Xiaoping, there is one important difference: This time, it is not about replacing China’s previous political and economic system with a new one,” China researcher Marc Oliver Rieger, head of the Confucius Institute in Trier, tells China.Table. Instead, the copy-and-paste approach would emphasize continuity in the final document. “The only historic thing is that it is implicitly announced that Xi Jinping’s term will be extended beyond next year,” Rieger says.
Noah Barkin, China expert at Rhodium Group and the German Marshall Fund, looks ahead with concern: “The main message of the 6th Plenum is that both Xi Jinping and his policies will be around for many years to come. We can expect a more authoritarian China, a more nationalist China, a more isolated China, and a more assertive China in the future.” Europe must also clearly set its red lines in response and then stick to them, Barkin said. He sees a rather complicated future for cooperation between Brussels and Beijing: The EU must also prepare for a world where cooperation will become much more difficult, Barkin stresses.
The fact that Xi has succeeded in forcing the party to change the constitution in his favor in just a few years and has now also rallied the Central Committee behind him is undoubtedly a masterstroke of power politics. After almost 50 years, the powerful party organ with its nearly 400 members supposedly paved the way by consensus for the People’s Republic to become a “personalized dictatorship”, as political scientist Andreas Fulda describes the country under Xi’s leadership. At the upcoming party congress in the second half of 2022, Xi could seek a third term, something his predecessors Hu Jintao and Jiang Zemin were denied.
“For the foreseeable future, the world will have to deal with Xi Jinping as Chinese party emperor. This also makes it clear that any hope that his tough course, both internally and externally, might weaken is built on sand,” Reinhard Bütikofer tells China.Table. In spring, the Green Party member of the European Parliament was declared persona non grata by China: He belongs to a group of sanctioned individuals and institutions from the EU. “With his mixture of aggressive nationalism, triumphalism, and centralism, he is forcing us into systems competition, whether we like it or not,” says Bütikofer.
Bütikofer’s colleague in the EU Parliament, MEP Evelyne Gebhardt, warns: “The expansion of Xi Jinping’s position of power became apparent years ago and is developing into a personality cult. The central control of all political activities makes diplomatic relations between the European Union and the People’s Republic very difficult, said Gebhardt, who is part of the EU Parliament’s delegation for relations with China. “Diplomacy needs a willingness to compromise, which we lack under the current Chinese leadership.”
Journalist Qin Liwen also fears that Xi’s consolidation of power means the continuation of an “aggressive and domineering foreign policy” by the People’s Republic. “Xi wants to make China the ‘most important nation’ in the world, which in his perception means China imposing its rules on the world,” says Qin.
This goes hand in hand with a strict rejection of a democratic value system. Rarely do party officials speak out so clearly against the West’s dominant political system as CCP policy researcher Jiang did Friday. “Democracy is not an exclusive empowerment of Western states, and less still should it be defined and imposed by Western states,” Jiang said. Democracy is a “rich man’s game” whose rules are determined by money.
The 6th Plenum also warned in its communiqué that the country must avoid “catastrophic mistakes in fundamental affairs”. In the past, “fundamental affairs” of the People’s Republic of China usually touched foreign countries only marginally. As the second-largest economy, the largest CO2 emitter, the largest consumer market, the largest global lender, the largest trading partner of numerous regions and nations, or the largest nuclear reformer, the consequences of Chinese policies are now felt all over the world.
Publicist Qin, who worked for many years as news director of a Chinese online portal and now lives in Berlin, sees clear signals in this that in many respects, Beijing “will not prove to be the cooperative, international partner that the Western agenda needs to solve problems.”
The most urgent international concern is the fight against climate change. The resolution states that the country wants to achieve climate neutrality “step by step”. Qin expects that the necessary reduction of CO2 emissions must be subordinated to China’s economic development and thus its social stability under all circumstances. The Communist Party fears the loss of its monopoly on power more than the possible consequences of global warming of several degrees, says Qin.
An agenda that reflects what China’s leaders have been saying for years is the guiding principle is supposed to contribute to the country’s retention of power. The country wants to grow in an innovative and green way, promoting both the public and the private sector. In the process, monopolies and a “disorderly expansion of capital” should be fought. The party wants to provide incentives so that people in the country can “get rich” through entrepreneurship. At the same time, the concept of general prosperity should be realized, for which a more equal distribution of income must be achieved.
Foreign policy aspects are also part of the document. The situation in Hong Kong had led head of state Xi “from chaos to control” after the mass protests. In the conflict over Taiwan, the resolution praises Beijing’s leadership role and decisiveness. The Chinese government describes the island state as an inseparable part of the People’s Republic and condemns its diplomatic efforts to gain greater international recognition.
By contrast, there is no mention of the New Silk Road Initiative. Jie Yu of the London-based think tank China at Chatham House told the Bloomberg news agency that she thought this was an indication that the initiative had become “more of a foreign policy liability” than a benefit. The global investment program has sparked not only advocacy over potential boosts to global trade but also much suspicion of Chinese ambitions. Collaboration: Amelie Richter
Becoming the face of the Hong Kong protest movement in Germany was not something Glacier Kwong had planned. When the pro-democracy protests in her hometown escalated two years ago, the 25-year-old was in Hamburg, where she has been enrolled at university since 2018. From afar, she watched as former classmates were surrounded by police amid clouds of teargas. Many of her closest friends were arrested.
Kwong, who was already politically active as a teenager, watched powerlessly. When Joshua Wong, whom she still knows from the times of the 2014 Umbrella Movement, announced a series of lectures in Europe shortly afterwards, Kwong didn’t take long: In places like Berlin’s Humboldt University and the German Federal Press Conference, she sat on the podium next to Hong Kong’s best-known activist, talking about her specialties: Beijing’s growing surveillance and the possibilities of digital resistance.
Joshua Wong was arrested again not long after his return to Hong Kong. Glacier Kwong remained in Germany, where she became the most sought-after Hong Kong exile. She gives interviews, lectures, writes newspaper columns, and has initiated a petition in the German Bundestag to enforce sanctions against Chinese officials. “Sometimes I wish I wasn’t so visible,” says the activist, who is currently writing her doctoral thesis on data protection at the University of Hamburg. “But at the same time, I know I’m quite privileged with my notoriety. If I get into trouble, there will always be people to help me.”
With the COVID restrictions and especially the new security law, the Hong Kong democracy movement is barely visible on the ground. “At this stage, all the basic freedoms guaranteed by the principle of “one country, two systems” have been eroded. Hong Kong’s civil society is shrinking, and with the National Security Act, we have also lost our freedom of speech and press.” This makes it all the more important now for the diaspora to unite, Kwong said. “We are trying to find new ways to keep up the struggle.” Together with other exiles, the PhD student has been publishing the magazine “The Flow” since the beginning of the year, which is aimed at the politically persecuted: “We want to create a platform for discussions that can no longer exist like this in Hong Kong.”
She herself has contributed several articles on the topics of online activism and censorship, most recently one titled: “Silent War.” Meanwhile, Kwong advises other activists on how best to protect themselves from surveillance. When she meets with friends or for interviews, she puts her cell phone in what’s called a Faraday bag, which uses a metalized protective cover to block all signals and make eavesdropping impossible.
The hup to now free Internet is the next target of Beijing’s grip on Hong Kong after the banning of pro-democracy publications such as Apple Daily, Kwong believes. “I wouldn’t be surprised if the government blocks even more websites and bans access to VPN channels soon. The city will become a kind of black box from which no information can get out or in. The world should slowly forget about Hong Kong’s democratic community this way.”
Beijing’s attempt to link Hong Kong even more closely with the economic cluster of the Greater Bay Area on the South China mainland, for example, with new train connections and cross-border job programs, is also aimed at choking off the last of Hong Kong’s political resisters. But he said there should be no illusions about the city remaining as economically free as before. “I think the recent crackdown by the government on tech companies like Alibaba has clearly shown that there is always an invisible hand pulling the strings in China’s markets.”
For the time being, Kwong does not want to risk a return to Hong Kong. “I think the authorities would arrest me as soon as I get off the plane. In their eyes, I am definitely a criminal because I am working abroad to promote freedom and democracy in Hong Kong.”
Kwong has since cut off contact with her parents and siblings – to protect them, she says. “Normally, I’m not a person who gets homesick easily. But lately, emotions often overwhelm me. After more than a year in exile, I have to accept the possibility that I may never see my home again.” Fabian Peltsch
The city of Tongliao in Inner Mongolia is experiencing a record winter – it was hit by the strongest snowstorm ever recorded. Faced with the cold and snowstorms, local authorities have launched an emergency program. This includes lending a hand with clearing traffic routes. If necessary, even with simple snow shovels, as paramilitary police forces do here at the Tongliao marshaling yard.
US whistleblower Frances Haugen is currently on tour in Europe: In Brussels, Paris, and Berlin, the 37-year-old warned of the power of the Facebook platform and its newly named parent company Metaverse. Chances are that Beijing listened eagerly to the deliberations on data theft and manipulation because, while it is not news that Western networks are not particularly welcome in the People’s Republic, it did come as a surprise how relentlessly the leadership in China has been cracking down on the tech sector since the middle of this year. After all, the sector is highly innovative and a growth engine for the country.
For economist Doris Fischer of the Julius-Maximilians-Universität of Würzburg, however, the move is understandable to a certain extent: “Of course the leadership knows that the country needs these vital companies. At the same time, however, it also looks at other countries and sees how uncontrollable and dangerous social networks, in particular, can become. They want to prevent that.”
In an interview with Felix Lee, Fischer talks about the Chinese government’s “headache” regarding tech companies. The economist also explains why bad news in individual sectors does not immediately mean that growth will collapse. Unlike other experts, she cannot currently identify any foreclosure in the country.
But it is precisely such an increasingly isolated China that observers now fear after the “historic resolution” of the 6th Plenum last week. China.Table asked politicians and China experts for their assessment of President Xi Jinping’s expansion of power. It turns out that the hope that Xi’s hard-line could weaken internally and externally is visibly fading into the sand. The personality cult around the “party emperor” does not suggest an easy diplomatic future between Brussels and Beijing.
We wish you a good start to the week!
Disclaimer: This interview has been translated into English and is not considered an official translation by any party involved in the interview.
Ms. Fischer, delivery bottlenecks, power outages, tech companies under pressure, then the crisis of the real estate giant Evergrande – the problems are piling up. What is the current state of the world’s second-largest economy?
I recently spoke to a German entrepreneur who described how rapidly the transport costs from China to Germany have risen for many companies. There are not enough containers. There are various reasons for this. But COVID is still one of them. Although China has the pandemic mostly under control in its own country, the virus still plays a serious role. In the summer months, it was the ports of Ningbo and Shenzhen that the authorities partially closed down because of a few cases. Now it is also hitting rail traffic. The Chinese authorities recently closed two border crossings for freight trains because there were two cases. There is now also a backlog in rail traffic.
One COVID case in China – already the entire world trade is stagnating? How could it come to this?
Since the turn of the millennium, global supply chains have become so finely chiseled and perfectly coordinated that companies in Germany also notice immediately if there is a hitch at just one point. There are currently also clearance problems in Great Britain and the USA. The entire system is highly vulnerable. And as the largest producer not only of consumer goods but also of industrial primary products, China has a key role to play.
Most countries have long since resigned themselves to living with the virus somehow – especially since vaccines are available. Is China not overreacting?
A year and a half ago, the Chinese government set itself the goal of eradicating the virus. Now it is finding it difficult to back away from that promise.
The side effects of the “Zero COVID” strategy are significant.
Of course, it hurts. The party secretary of Inner Mongolia had to leave after only two months in office because of an outbreak in his province. More than five million Nanjing citizens were not allowed to leave over the October holidays because of a few cases. The leadership is really about suppressing the virus. It is taking a particularly rigid approach in the capital, Beijing. There, for the 6th Plenum of the National People’s Congress and a few months before the Winter Olympics, stricter restrictions on entry are already taking effect.
Unlike his predecessors, Xi Jinping does not seem to put economic growth above everything?
Growth in the third quarter was 4.9 percent. That is less than some expected. But I think the belief that China always has high growth figures is misguided. After all, the absolute base is getting bigger and bigger, which would make for exponential expansion. China’s prediction that growth will first level off at an average of 6 percent over the next few years – and that is without COVID – and then gradually decline seems realistic to me.
What role does the pandemic play in economic activity?
Of course, the pandemic also has an impact on China’s economy. There was also the great flood in Henan and other effects of climate change. The crisis with Evergrande will dampen the real estate market. And the crackdown on tech corporations will have an economic impact. Still, I wouldn’t overstate all of this. After all, China is really like a continent. If there are problems in one region, it doesn’t mean that the whole country is having a hard time.
You sound optimistic.
I do think that the Chinese government is nervous. It has quite a lot of problems to deal with at the same time at the moment. But some of them are deliberate. The regulation of the tech sector in China has been a long time coming. These big companies have had a free hand and have become very large and influential. They engage in unfair competition and let shady characters do business. And then, Alibaba CEO Jack Ma also publicly claims that his company can do better than the state banks. That’s the straw that broke the camel’s back.
But China’s tech sector is the area that is highly innovative.
Of course, the leadership knows that the country needs these vital companies. But at the same time, it looks at other countries and sees how uncontrollable and dangerous social networks can become. That’s what it wants to prevent. In a civilized society, people don’t spit in the corner. That’s what the CCP leadership wanted to prevent in the eighties. Today it wants a civilized society in which decency also prevails in business. Many entrepreneurs in China still have a Wild West attitude. Their business models are geared towards exploiting as many legal loopholes as possible. And for a long time, there were quite a lot of them in China. But the government prefers business ideas that develop within the framework of the rules and regulations.
But isn’t it going too far? It even restricts online gaming for children.
There is probably a bit of populism behind this. In China, too, many parents are worried about their children’s gaming preferences. Certainly, the idea behind this measure is to create better people. Mao had already tried to do that via campaigns. Xi is now trying to do that via regulation and the social credit system that rates citizens’ behavior. Some businesses may not like this. They will have to adapt to the new rules. And indeed, some people are annoyed that their business model no longer works. But Xi certainly won’t go so far as to break up the big tech companies. He certainly doesn’t want to do that.
Maybe not completely crushed. But it does take away their innovative power.
I remember well a conversation I had with Chinese government-related experts before the pandemic. In that conversation, it became clear to me that the Chinese government has a bellyache with tech corporations. One even said: “If we had your hidden champions, we would gladly hand over our Alibabas to you.” Behind that statement is this deep belief that economics has to be something real, that is, something you can touch, build, or eat. The whole Internet economy is suspect from this perspective.
However, the IT industry has brought China enormously forward technologically.
It has. But there is another aspect that the Chinese government is concerned about, which is also an issue in the West: the question of the power of these platforms. They have become very large and very rich companies that have collected an incredible amount of data. That makes them very influential. We also discuss the power of Facebook and its competitors for a reason. In our country, the question is: Are these platforms a threat to democracy? In China, it is: Do they endanger the party? I find it astonishing how long the leadership has allowed these companies to operate at all.
China’s leadership, however, in many cases follows familiar patterns in its policies.
We know this procedure from other areas: You let it run its course first, and then you try to curb the excesses. In the Alibaba case, there is evidence that Jack Ma knew what was coming and that he made this speech in October last year to warn about these upcoming regulations. But in doing so, he went too far from the government’s perspective. I think that message has gotten through to tech companies. From what I understand, though, these companies continue to do well.
And the crisis of the Evergrande real estate group? A crash of the completely overheated Chinese real estate market has already been predicted several times in the past ten years.
In fact, there are several real estate companies that have major financial problems. So the Evergrande crisis is affecting the real estate market. And pretty sure some heads will roll. I get the impression that the Chinese government is trying to socially cushion small investors and private homeowners. But the government is more likely not to save the company as such. The leadership deliberately tightened the reins on this sector last year to prevent the property market from overheating. Perhaps they did not expect such a big shock. Now the motto is: Grit your teeth and get to it!
Already there is talk of the Chinese Lehman.
No, I don’t see that danger. The Chinese government will always bail out the banking sector. It is predominantly state-owned anyway – with gritted teeth, to be sure, and some people will be held accountable. But I think a complete collapse is unlikely.
Even before the pandemic began, China suggested to foreign companies: We don’t need you anymore, we can do everything ourselves by now. Now they are using the pandemic as a reason to close themselves off. What are you observing?
I think there is a misunderstanding there. But the net result may still be that there are fewer foreigners in China. The whole thing has to do with the concept of dual circulation that was introduced last year. China wants to strengthen its domestic market. The concept says a lot about breaking down market barriers within China. There are two other goals associated with this.
Which one?
Indeed, the country should become less dependent on foreign technology. Beijing wants to prevent the US from using China’s technological dependence as leverage to keep China down. At the same time, however, the leadership knows that the country still needs raw materials and markets abroad. And that’s where China actually wants to expand. With this strategy, the leadership hopes for the following: The Chinese market should be so large and so important that foreign companies will come of their own accord – but without the privileges that foreign companies have enjoyed so far, but on the conditions under which Chinese private companies must also operate.
Foreign companies in China, on the other hand, do not necessarily perceive their position as privileged. They complain that they are already disadvantaged.
Then it will now be even more difficult for them. Because the Chinese competition has become really good at the same time. In the automotive industry, there is also the fact that foreign manufacturers are not exactly the avant-garde in the trend towards electromobility. China does not want to close itself off but wants to change the previous orientation of the global markets. In the past, the compass needle of international trade flows ultimately pointed towards the US and Europe. China wants the compass needle to turn.
Doris Fischer, 56, is an economist and sinologist at the Julius-Maximilian-Universität of Würzburg. She heads the Chair of China Business and Economics there. Fischer is also Vice President of the university. In her current research projects, she is investigating the role and design of industrial policy for the energy transition as well as the effects of the Chinese social points system on companies.
Following the “historic resolution” of the 6th Plenum of the Central Committee, officials of the sole ruling Communist Party pathetically elevated head of state Xi Jinping to “helmsman”. “As long as we recognize Comrade Xi as the core, the giant ship of China’s national rejuvenation will have a helmsman and be able to weather any storm,” the head of the party’s own policy research bureau, Jiang Jinquan, said at a closing press conference of the plenum last Friday. Xi deserved to be called the “leader of the people,” he said.
Because protocol, as well as rhetoric, is of paramount symbolic importance in socialist dictatorships, Xi’s latest attribute is a sign of his central role for years to come. State founder Mao Zedong was the only chairman to date whom cadres had elevated to the unofficial status of “helmsman,” the “Great Helmsman” mind you. Mao still has the adjective ahead of his fifth-generation successor.
“If you compare the current so-called ‘historic resolution’ with the previous two by Mao Zedong and Deng Xiaoping, there is one important difference: This time, it is not about replacing China’s previous political and economic system with a new one,” China researcher Marc Oliver Rieger, head of the Confucius Institute in Trier, tells China.Table. Instead, the copy-and-paste approach would emphasize continuity in the final document. “The only historic thing is that it is implicitly announced that Xi Jinping’s term will be extended beyond next year,” Rieger says.
Noah Barkin, China expert at Rhodium Group and the German Marshall Fund, looks ahead with concern: “The main message of the 6th Plenum is that both Xi Jinping and his policies will be around for many years to come. We can expect a more authoritarian China, a more nationalist China, a more isolated China, and a more assertive China in the future.” Europe must also clearly set its red lines in response and then stick to them, Barkin said. He sees a rather complicated future for cooperation between Brussels and Beijing: The EU must also prepare for a world where cooperation will become much more difficult, Barkin stresses.
The fact that Xi has succeeded in forcing the party to change the constitution in his favor in just a few years and has now also rallied the Central Committee behind him is undoubtedly a masterstroke of power politics. After almost 50 years, the powerful party organ with its nearly 400 members supposedly paved the way by consensus for the People’s Republic to become a “personalized dictatorship”, as political scientist Andreas Fulda describes the country under Xi’s leadership. At the upcoming party congress in the second half of 2022, Xi could seek a third term, something his predecessors Hu Jintao and Jiang Zemin were denied.
“For the foreseeable future, the world will have to deal with Xi Jinping as Chinese party emperor. This also makes it clear that any hope that his tough course, both internally and externally, might weaken is built on sand,” Reinhard Bütikofer tells China.Table. In spring, the Green Party member of the European Parliament was declared persona non grata by China: He belongs to a group of sanctioned individuals and institutions from the EU. “With his mixture of aggressive nationalism, triumphalism, and centralism, he is forcing us into systems competition, whether we like it or not,” says Bütikofer.
Bütikofer’s colleague in the EU Parliament, MEP Evelyne Gebhardt, warns: “The expansion of Xi Jinping’s position of power became apparent years ago and is developing into a personality cult. The central control of all political activities makes diplomatic relations between the European Union and the People’s Republic very difficult, said Gebhardt, who is part of the EU Parliament’s delegation for relations with China. “Diplomacy needs a willingness to compromise, which we lack under the current Chinese leadership.”
Journalist Qin Liwen also fears that Xi’s consolidation of power means the continuation of an “aggressive and domineering foreign policy” by the People’s Republic. “Xi wants to make China the ‘most important nation’ in the world, which in his perception means China imposing its rules on the world,” says Qin.
This goes hand in hand with a strict rejection of a democratic value system. Rarely do party officials speak out so clearly against the West’s dominant political system as CCP policy researcher Jiang did Friday. “Democracy is not an exclusive empowerment of Western states, and less still should it be defined and imposed by Western states,” Jiang said. Democracy is a “rich man’s game” whose rules are determined by money.
The 6th Plenum also warned in its communiqué that the country must avoid “catastrophic mistakes in fundamental affairs”. In the past, “fundamental affairs” of the People’s Republic of China usually touched foreign countries only marginally. As the second-largest economy, the largest CO2 emitter, the largest consumer market, the largest global lender, the largest trading partner of numerous regions and nations, or the largest nuclear reformer, the consequences of Chinese policies are now felt all over the world.
Publicist Qin, who worked for many years as news director of a Chinese online portal and now lives in Berlin, sees clear signals in this that in many respects, Beijing “will not prove to be the cooperative, international partner that the Western agenda needs to solve problems.”
The most urgent international concern is the fight against climate change. The resolution states that the country wants to achieve climate neutrality “step by step”. Qin expects that the necessary reduction of CO2 emissions must be subordinated to China’s economic development and thus its social stability under all circumstances. The Communist Party fears the loss of its monopoly on power more than the possible consequences of global warming of several degrees, says Qin.
An agenda that reflects what China’s leaders have been saying for years is the guiding principle is supposed to contribute to the country’s retention of power. The country wants to grow in an innovative and green way, promoting both the public and the private sector. In the process, monopolies and a “disorderly expansion of capital” should be fought. The party wants to provide incentives so that people in the country can “get rich” through entrepreneurship. At the same time, the concept of general prosperity should be realized, for which a more equal distribution of income must be achieved.
Foreign policy aspects are also part of the document. The situation in Hong Kong had led head of state Xi “from chaos to control” after the mass protests. In the conflict over Taiwan, the resolution praises Beijing’s leadership role and decisiveness. The Chinese government describes the island state as an inseparable part of the People’s Republic and condemns its diplomatic efforts to gain greater international recognition.
By contrast, there is no mention of the New Silk Road Initiative. Jie Yu of the London-based think tank China at Chatham House told the Bloomberg news agency that she thought this was an indication that the initiative had become “more of a foreign policy liability” than a benefit. The global investment program has sparked not only advocacy over potential boosts to global trade but also much suspicion of Chinese ambitions. Collaboration: Amelie Richter
Becoming the face of the Hong Kong protest movement in Germany was not something Glacier Kwong had planned. When the pro-democracy protests in her hometown escalated two years ago, the 25-year-old was in Hamburg, where she has been enrolled at university since 2018. From afar, she watched as former classmates were surrounded by police amid clouds of teargas. Many of her closest friends were arrested.
Kwong, who was already politically active as a teenager, watched powerlessly. When Joshua Wong, whom she still knows from the times of the 2014 Umbrella Movement, announced a series of lectures in Europe shortly afterwards, Kwong didn’t take long: In places like Berlin’s Humboldt University and the German Federal Press Conference, she sat on the podium next to Hong Kong’s best-known activist, talking about her specialties: Beijing’s growing surveillance and the possibilities of digital resistance.
Joshua Wong was arrested again not long after his return to Hong Kong. Glacier Kwong remained in Germany, where she became the most sought-after Hong Kong exile. She gives interviews, lectures, writes newspaper columns, and has initiated a petition in the German Bundestag to enforce sanctions against Chinese officials. “Sometimes I wish I wasn’t so visible,” says the activist, who is currently writing her doctoral thesis on data protection at the University of Hamburg. “But at the same time, I know I’m quite privileged with my notoriety. If I get into trouble, there will always be people to help me.”
With the COVID restrictions and especially the new security law, the Hong Kong democracy movement is barely visible on the ground. “At this stage, all the basic freedoms guaranteed by the principle of “one country, two systems” have been eroded. Hong Kong’s civil society is shrinking, and with the National Security Act, we have also lost our freedom of speech and press.” This makes it all the more important now for the diaspora to unite, Kwong said. “We are trying to find new ways to keep up the struggle.” Together with other exiles, the PhD student has been publishing the magazine “The Flow” since the beginning of the year, which is aimed at the politically persecuted: “We want to create a platform for discussions that can no longer exist like this in Hong Kong.”
She herself has contributed several articles on the topics of online activism and censorship, most recently one titled: “Silent War.” Meanwhile, Kwong advises other activists on how best to protect themselves from surveillance. When she meets with friends or for interviews, she puts her cell phone in what’s called a Faraday bag, which uses a metalized protective cover to block all signals and make eavesdropping impossible.
The hup to now free Internet is the next target of Beijing’s grip on Hong Kong after the banning of pro-democracy publications such as Apple Daily, Kwong believes. “I wouldn’t be surprised if the government blocks even more websites and bans access to VPN channels soon. The city will become a kind of black box from which no information can get out or in. The world should slowly forget about Hong Kong’s democratic community this way.”
Beijing’s attempt to link Hong Kong even more closely with the economic cluster of the Greater Bay Area on the South China mainland, for example, with new train connections and cross-border job programs, is also aimed at choking off the last of Hong Kong’s political resisters. But he said there should be no illusions about the city remaining as economically free as before. “I think the recent crackdown by the government on tech companies like Alibaba has clearly shown that there is always an invisible hand pulling the strings in China’s markets.”
For the time being, Kwong does not want to risk a return to Hong Kong. “I think the authorities would arrest me as soon as I get off the plane. In their eyes, I am definitely a criminal because I am working abroad to promote freedom and democracy in Hong Kong.”
Kwong has since cut off contact with her parents and siblings – to protect them, she says. “Normally, I’m not a person who gets homesick easily. But lately, emotions often overwhelm me. After more than a year in exile, I have to accept the possibility that I may never see my home again.” Fabian Peltsch
The city of Tongliao in Inner Mongolia is experiencing a record winter – it was hit by the strongest snowstorm ever recorded. Faced with the cold and snowstorms, local authorities have launched an emergency program. This includes lending a hand with clearing traffic routes. If necessary, even with simple snow shovels, as paramilitary police forces do here at the Tongliao marshaling yard.
