Table.Briefing: China (English)

Elon Musk’s influence on US-China relations + Mega port in Chancay

Dear reader,

Do you use X? If you are (still) on the platform, you probably often see posts by X owner Elon Musk at the top of your timeline. Whether you follow him or not, the algorithm automatically flushes the Tesla CEO’s thoughts onto your screen. With goosebumps, one or two people realized at the end of the summer that they were increasingly became pro-Trump as the election date in the US drew closer. Musk has power. Not only in the US – but also in China.

Just how well-connected Musk is in Beijing became clear back in April. His EV brand Tesla was in crisis and investors called for improvements to the autonomous driving software in China. Musk spontaneously traveled to Beijing and met Premier Li Qiang. No sooner had he returned than the Chinese granted important approvals. Jörn Petring explains what Musk could potentially mean as part of the new Trump administration. Beijing certainly sees the tech billionaire as a helpful middleman.

Head of State Xi Jinping will travel to Peru this week. There, the port of Chancay on the Pacific coast is one of the most important infrastructure projects that China has launched on the South American continent. Its importance is by no means limited to container handling. Chancay is a political signal that reaches all of Latin America, writes Marcel Grzanna: Xi is in Lima for the Asia-Pacific Economic Community (APEC) meeting until Sunday, before traveling on to Brazil to attend the G20 summit there. With the opening of the port in his luggage, Xi will be able to display growing Chinese self-confidence to the other heads of state of the largest economies in Brazil.

Your
Amelie Richter
Image of Amelie  Richter

Feature

Diplomacy: Why Musk is an ace up Beijing’s sleeve

Musk books at the Shanghai Book Fair.

On election night, President-elect Donald Trump singled out one man in particular in his victory speech: Elon Musk. Trump spent several minutes praising the entrepreneur’s achievements, who builds electric cars and spaceships, controls a social network and provides the world with internet access via satellites. “We have a new star … a star is born – Elon!” Trump shouted to his cheering supporters.

Musk was a major donor to Trump’s election campaign. He spent around 130 million US dollars on supporting his favorite. Now, he can probably expect to play a significant role in the new US government – as the possible head of a “Department of Government Efficiency” (Doge), which is supposed to shave two trillion dollars off the federal budget. That is why Trump has already touted Musk as the “Secretary of Cost-Cutting.”

Trump’s trust in Musk could also impact the relationship between the US and China. Musk knows how to flatter the Chinese and has long received special treatment from Beijing in return, Derek Scissors, senior fellow at the American Enterprise Institute, told Bloomberg. “They will use that absolutely to try to influence the Trump administration.” Musk is “extremely pro-China.” This could be a strategic advantage for China.

Tesla ‘an example of success’ for China

Just how well-connected Musk is in Beijing was apparent again in April. His EV brand Tesla was in crisis and investors demanded progress on autonomous driving software in China. So Musk spontaneously traveled to Beijing and met Premier Li Qiang, apparently striking the right chord once again. No sooner had he returned than the Chinese granted important approvals. Li even described Tesla’s development in China as “an example of success” for cooperation between the USA and China.

Musk would never talk about the Chinese like he recently did about the German Chancellor (“Olaf is a fool”). However, in Shanghai, where the largest Tesla plant in the world is located, he does not have to deal with problems like in Germany. In Brandenburg, environmental activists hinder his expansion, while expansion in Shanghai is no problem. Tesla is building another plant next to the Gigafactory, which will soon produce megapacks – large energy storage batteries.

‘Interesting dynamic between Musk and China

Shanghai was a good deal for Musk right from the start. He received the necessary permits to become the first foreign car manufacturer in China to be allowed to build a factory without a Chinese joint venture partner. China is Tesla’s biggest market outside the United States. In the third quarter, the manufacturer reported 181,883 vehicles sold in China – an increase of 30 percent compared to the previous year.

Could now be the time for the Chinese to ask Musk for favors? “There’s a very interesting dynamic there between Musk and China in that he needs them, and he’s trying to pursue business interests there,” Kelly Griec from the Stimson Center think tank in Washington told US broadcaster NBC.

Commentators on the Chinese social network Weibo already see Musk as the next Henry Kissinger. The former US Secretary of State is revered in China for his diplomatic efforts in the 1970s. Unlike Kissinger, however, Musk is a business-motivated player with vested financial interests in both countries. Observers believe that he is trying to exert influence in both systems to benefit from Trump’s potential policies as well as relations with China.

The tariff controversy

One crucial point where his and Beijing’s interests coincide is on tariffs. In the past, Musk has criticized import tariffs on cars that affect Chinese manufacturers in the United States and elsewhere – such as those imposed by President Joe Biden on Chinese EVs. He probably fears that high countervailing duties would result in further decoupling, posing a challenge for Tesla despite local production in Shanghai.

Musk seeks a good business climate on both sides of the Pacific to further his interests. Keeping Trump’s “America First” policy in check is important for him to avert a US-Chinese trade war. And “America First” also has advantages for the billionaire. In particular, Musk’s space company SpaceX could benefit from even more government contracts. In his victory speech, Trump already emphasized the need to strengthen America’s leading role in space. And enthusiastically referred to SpaceX’s recent success in catching a rocket with mechanical arms.

SpaceX satellites are a thorn in Beijing’s side

However, this is another balancing act for Musk. Beijing is much more critical of SpaceX than Tesla, as the Chinese government sees the Starlink satellites deployed in orbit by Musk as a security risk. China would particularly frown upon Taiwan using this technology.

However, Musk’s stance on the Taiwan question should calm the Chinese leadership. In 2022, Musk even recommended treating Taiwan as “a kind of special administrative zone.” This is in line with China’s vision of placing the island under a model similar to that of Hong Kong and Macau. Musk also said that Beijing sees Taiwan as an “integral part of China,” similar to how the US would view Hawaii. That sounds like Beijing doesn’t need to worry about Taiwan receiving a Starlink delivery any time soon.

  • Handelskrieg

New Silk Road in Peru: How a billion-euro project is set to pay off for Beijing

Port project in Chancay on the Peruvian Pacific coast.

On Thursday, China’s President Xi Jinping will officially inaugurate a milestone on the New Silk Road. The port of Chancay on Peru’s Pacific coast is one of the most important infrastructure projects that China has launched on the South American continent. Its importance is by no means limited to container handling. Chancay is a political signal that reaches all of Latin America, reminding the United States of China’s growing presence in its backyard and Europe of its own shortcomings.

Xi will join Peru’s President Dina Boluarte in Lima for the digital inauguration of the port, which is just over an hour’s drive north of the capital. Xi is in Peru until Sunday for the Asia-Pacific Economic Community (APEC) meeting before traveling on to Brazil to attend the G20 summit. With the opening of the port in his luggage, Xi will be able to demonstrate growing Chinese self-confidence and increasing independence to the other heads of state of the largest economies in Brazil.

Port of call for the Chinese military

The port symbolizes a new ace up Beijing’s sleeve in the geostrategic poker game with the US and its allies. Chancay is not only funded by Chinese money, the port is also controlled by Chinese interests. If need be, it will become a port of call for the Chinese military off the American continent – while still a good distance from US waters, it is nevertheless in new territory.

Peru and China have long since set in motion their closer military exchange. On July 29, Peru celebrated its Independence Day with a military parade in Lima. Members of the Chinese People’s Liberation Army also participated in the parade for the first time. Although foreign military personnel have also marched in the parade in the past, it was highly unusual for them to come from China. “We are facing a sample of the influence that China exercises in Peru today,” Paolo Benza, Peruvian political analyst and economic journalist, told the online platform of the Diálogo Americas political forum.

A few months ago, the Peruvian parliament passed a law that guarantees Cosco exclusive maritime services in the port of Chancay in record time. Cosco had even threatened to halt construction and file a lawsuit if Peru did not comply with the demand. Argentine logistics expert Agustín Barletti called the law “a tailor-made suit for China to avoid economic reprisals from Beijing.”

Port significantly shortens shipping time

The port in Chancay will shift Latin American trade flows. Raw materials and agricultural production goods are to be shipped to the People’s Republic primarily from Brazil, Argentina, Bolivia, Chile, Ecuador, Colombia and Peru and from there will take ten days less on the high seas than before – just under four weeks.

With the completion of the first construction phase, four jetties will initially go into operation. The deep-sea port also allows freighters with a length of 400 meters to call at Chancay. These freighters, which are too large to pass through the Panama Canal, can carry up to 18,000 standard containers. The project was the Chinese state-owned shipping company Cosco worth an investment of 3.3 billion euros.

Numerous factors favor the dynamic growth of China’s influence in Latin America. The continent is not only experiencing lower economic growth compared to other emerging regions of the world, but is also paying a higher price for external shocks, as the United Nations Development Program (UNDP) notes under #GraphForThought. The negative swings of the 2008 financial crisis, the slump in commodity prices in 2014 and the outbreak of the Covid pandemic in 2020 were much more severe in the economies of Latin America and the Caribbean than elsewhere.

‘Port for the whole world’

This increases the desire for stability, which China promises through major investments and integration into the Belt and Road Initiative. Moreover, the People’s Republic is fuelling competition among many Latin American countries to climb into China’s good graces. When the port project was announced over five years ago, both sides emphasized “the great opportunity” for Peru and the project as a “port for the whole world.” Other countries in the region, whose economies are not getting off the ground, look to Chancay with envy and are increasingly open to comparable Chinese ideas.

Of 33 Latin America and the Caribbean countries, 22 have already signed an agreement with China as a BRI partner state. China is also forging free trade agreements wherever it can. The most recent such agreement between the People’s Republic and Ecuador came into force on May 1. However, China is not only acting out of economic motivation.

It is also about isolating Taiwan, which has long maintained diplomatic relations with numerous Latin American states. Meanwhile, only seven countries from Latin America and the Caribbean still officially recognize Taiwan as a state and have therefore renounced diplomatic relations with the People’s Republic. In 2023, Honduras – motivated by promises of economic benefits – opted for Beijing.

Uruguay would have to leave the Mercosur association

In Brazil, Xi Jinping will probably make a new attempt to convince the largest Latin American economy of a BRI partnership next week. However, Brazil is cautious and does not want to alienate the USA and Europe too much.

Uruguay, on the other hand, may soon sign a free trade agreement with China – depending on the outcome of the run-off election at the end of November. Such an agreement would mean the definitive end of the free trade agreement between the four South American Mercosur states and the EU – at least in the form that has been envisaged for years but has yet to be implemented. This is because Uruguay would have to leave the Mercosur group. It would be another Chinese move to increase its political influence on the continent.

  • Container
  • Diplomatie
  • Free trade agreement
  • Geopolitics
  • Peru
  • Raw materials
  • Security
  • Xi Jinping

News

Taiwan: German State Secretary Philipp in Taiwan for talks

Berlin has sent State Secretary Udo Philipp to Taiwan for talks. According to the Ministry of Economic Affairs, Philipp will be in the country on Monday and Tuesday. The State Secretary will hold talks on the continued expansion of economic cooperation and participate in the German-Taiwanese Joint Business Council. This year, the focus is on German-Taiwanese cooperation in the semiconductor sector. Philipp will also visit a Taiwan Semiconductor Manufacturing Company (TSMC) plant.

“In view of the growing geopolitical challenges, cooperation with value partners such as Taiwan is becoming increasingly important,” said the State Secretary, adding that Germany and Taiwan wanted to increase the resilience of their supply chains. “Closer economic cooperation between our two countries can make a significant contribution to this.” According to Philipp, Berlin wants to encourage Taiwanese companies to expand their business activities in Germany and the EU. TSMC is currently building a chip factory in Dresden. ari

  • Lieferketten
  • Semiconductor
  • Taiwan
  • TSMC

Economy: How the People’s Bank wants to do to tackle the downturn

Chinese People’s Bank Governor Pan Gongsheng emphasized on Monday that Beijing “will make every effort to maintain the overall stability of the financial system.” The announcement came a few days after China’s top legislative body, the National People’s Congress (NPC), passed a bill through its Standing Committee to raise the debt ceilings for local governments to combat the country’s economic slowdown.

Pan referred to a report he presented to the Standing Committee last week. According to Pan, the People’s Bank will:

  • strengthen the countercyclical adjustment,
  • maintain the stability of the yuan exchange rate at a reasonable and balanced level,
  • comprehensively strengthen financial supervision to prevent systemic risks,
  • reaffirm a supportive monetary policy stance.

Observers were not particularly impressed by Pan’s announcements and do not expect investors to be reassured after Friday’s rather disappointing stimulus program: OCBC Bank analysts expect that the People’s Bank will cut banks’ reserve requirement ratio again in November or December to support planned bond issuance.

China observers are skeptical whether all these steps will lead to a short-term economic boost, as most of the new funds are intended to reduce local government debt. rtr/ari

  • Wirtschaftswachstum

COP29: CBAM almost causes agenda dispute

The EU has prevailed: Climate action measures that impact trade will not be on the agenda at this year’s UN Climate Change Conference in Baku (COP29). China came to COP29 with the demand to discuss so-called “unilateral trade measures” in the negotiations. The EU’s Carbon Border Adjustment Mechanism (CBAM) is a particular thorn in Beijing’s side. Brazil, South Africa and India supported the motion.

Europe considers the climate negotiations to be the wrong place and believes the dispute is better handled at the World Trade Organization. The EU has thus managed to ensure that the issue is not included on the agenda. Instead, the Azerbaijani COP presidency wants to include issues like CBAM and the IRA in its “consultations” with the various states. China was satisfied with the decision.

Developing countries fear Trump will create new trade barriers

This compromise means that although the issue is not off the table, it does not play a role in the official negotiating rooms. However, the risk of another dispute erupting in Baku has not been averted, as developing countries fear that Trump’s re-election will lead to further trade barriers.

Clashes over the agenda at UN climate conferences are not uncommon, and CBAM has long been a source of disagreement. China sees climate action instruments such as CBAM, IRA or the EU’s anti-deforestation law as a violation of the Framework Convention on Climate Change, as Beijing believes they promote protectionism and discrimination against developing countries. luk

  • COP29

Heads

Manoj Kewalramani reads the People’s Daily every day

Political scientist Manoj Kewalramani

Manoj Kewalramani has to get up early because, besides his job at the Indian think tank Takshashila Institution, he spends two to three hours each day carefully reading the newspaper. On the front page, he always sees: Xi Jinping. Kewalramani reads the People’s Daily, China’s top propaganda newspaper, and has been publishing his assessments and analyses in the Tracking People’s Daily newsletter for three years now.

In between, he sometimes takes a break to take the children to school, Kewalramani said in a video interview from his office in Bangalore. The newsletter is usually published early in the day. In it, Kewalramani compares announcements from the Communist Party leadership with global events and deciphers their often cryptic propaganda language. The newsletter has become a valuable window into the inner logic of the Chinese state apparatus for China watchers around the world.

First Bollywood, then international relations

For a long time, Kewalramani actually wanted to become a Bollywood star. While studying in Mumbai, the center of the Indian film industry, he acted and modeled on the side. But in his mid-twenties, he decided against a career in film with a heavy heart. Instead, Kewalramani went to England for a master’s degree in international relations and then worked as a news journalist in India for several years.

At the time, it was unthinkable for Kewalramani to make a living reading Chinese state propaganda. The contact with China came through his father, who ran an import-export company between India and China. During a career break, Kewalramani moved in with him, started working for the company in 2011 and traveled extensively in China. “I know most of the Chinese provinces, especially the coast, the hub of industrial production.”

Work at the Chinese state broadcaster CCTV

Over time, Kewalramani realized that the businessman’s life was not his calling, but his passion for China persisted. He applied for several journalistic jobs and ended up at the English branch of the Chinese state news channel CCTV in 2013. The news value of his work was, of course, debatable. But the work gave him intriguing insights into the decision-making processes of China’s propaganda apparatus, says Kewalramani.

After three years in Beijing, he then moved back to India. At the time, there was a huge knowledge void about China. However, the renewed flare-up of Sino-Indian border disputes since 2017 and, most recently, the Covid pandemic have heightened awareness of China’s importance and potential risks. For Kewalramani, the pandemic also provided the opportunity to follow Chinese discourse more closely: “I suddenly had a lot of time on my hands.” He started reading the People’s Daily and became one of the most renowned experts on China-India relations.

China-India relations remain complicated

Kewalramani’s 2021 book “Smokeless War – China’s quest for geopolitical dominance” can also be understood as a warning of a more self-confident and aggressive China. Although it is debatable how the country sees its role in the world in detail, he is convinced that China wants to displace the USA as the leading power in the medium to long term.

Kewalramani sees the fact that Indian Prime Minister Modi and China’s President Xi Jinping recently met face-to-face for the first time in five years as a positive signal, as well as a recent signal of rapprochement in the border conflict. Nevertheless, the relationship between India and China will remain difficult. Kewalramani believes there is a lack of debate in his country, as in Europe, about the economic areas where Chinese investment is possible and perhaps even desirable, and which areas require greater safeguarding.

Chinese imports remain important for India

Compared to the West, India’s extreme poverty is also a stronger factor. India’s gross domestic product is around 3,000 US dollars per capita, compared to 80,000 dollars in the USA. “We can produce iPhones, but most people can’t afford them.” That is why China’s low-cost industrial production remains attractive to India’s population. However, according to Kewalramani, the aim should be to shape mutual dependencies so that they can also be used as negotiating leverage for India and not just as unilateral bargaining chips for China.

At the same time, Kewalramani hopes for more in-depth academic and cultural exchange. Above all, he sees a need for more stakeholders who try to generate original knowledge about China and its political discourse on the ground and by studying sources. This would be the only way to realistically assess what the Chinese leadership actually wants. It sounds as if the People’s Daily will accompany Manoj Kewalramani on a daily basis for some time to come. Leonardo Pape

  • Heads

Executive Moves

Heino Dannemann Tian has been Human Resources Director at Volkswagen in Taiwan since September. Dannemann Tian has worked in the automotive industry in China since 2003. Previously, he was Human Resources Director at the FAW-Volkswagen joint venture in Chengdu.

Devin Hou has been Sales Manager at Geely Auto International since October. Previously, he was International BD Manager at London EV Company (LEVC). There, Hou supported international sales and marketing teams in maintaining and developing dealerships in the EU. He will remain based in Hangzhou.

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

Dessert

In Tongren, Guizhou, farmers lay out camellia seeds to dry. They are used to obtain tea seed oil or camellia oil, an edible, solid oil with a sweet herbal aroma. In some Chinese provinces, tea seed oil is the most important edible oil. It is rich in vitamin E and other antioxidants.

China.Table editorial team

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    Do you use X? If you are (still) on the platform, you probably often see posts by X owner Elon Musk at the top of your timeline. Whether you follow him or not, the algorithm automatically flushes the Tesla CEO’s thoughts onto your screen. With goosebumps, one or two people realized at the end of the summer that they were increasingly became pro-Trump as the election date in the US drew closer. Musk has power. Not only in the US – but also in China.

    Just how well-connected Musk is in Beijing became clear back in April. His EV brand Tesla was in crisis and investors called for improvements to the autonomous driving software in China. Musk spontaneously traveled to Beijing and met Premier Li Qiang. No sooner had he returned than the Chinese granted important approvals. Jörn Petring explains what Musk could potentially mean as part of the new Trump administration. Beijing certainly sees the tech billionaire as a helpful middleman.

    Head of State Xi Jinping will travel to Peru this week. There, the port of Chancay on the Pacific coast is one of the most important infrastructure projects that China has launched on the South American continent. Its importance is by no means limited to container handling. Chancay is a political signal that reaches all of Latin America, writes Marcel Grzanna: Xi is in Lima for the Asia-Pacific Economic Community (APEC) meeting until Sunday, before traveling on to Brazil to attend the G20 summit there. With the opening of the port in his luggage, Xi will be able to display growing Chinese self-confidence to the other heads of state of the largest economies in Brazil.

    Your
    Amelie Richter
    Image of Amelie  Richter

    Feature

    Diplomacy: Why Musk is an ace up Beijing’s sleeve

    Musk books at the Shanghai Book Fair.

    On election night, President-elect Donald Trump singled out one man in particular in his victory speech: Elon Musk. Trump spent several minutes praising the entrepreneur’s achievements, who builds electric cars and spaceships, controls a social network and provides the world with internet access via satellites. “We have a new star … a star is born – Elon!” Trump shouted to his cheering supporters.

    Musk was a major donor to Trump’s election campaign. He spent around 130 million US dollars on supporting his favorite. Now, he can probably expect to play a significant role in the new US government – as the possible head of a “Department of Government Efficiency” (Doge), which is supposed to shave two trillion dollars off the federal budget. That is why Trump has already touted Musk as the “Secretary of Cost-Cutting.”

    Trump’s trust in Musk could also impact the relationship between the US and China. Musk knows how to flatter the Chinese and has long received special treatment from Beijing in return, Derek Scissors, senior fellow at the American Enterprise Institute, told Bloomberg. “They will use that absolutely to try to influence the Trump administration.” Musk is “extremely pro-China.” This could be a strategic advantage for China.

    Tesla ‘an example of success’ for China

    Just how well-connected Musk is in Beijing was apparent again in April. His EV brand Tesla was in crisis and investors demanded progress on autonomous driving software in China. So Musk spontaneously traveled to Beijing and met Premier Li Qiang, apparently striking the right chord once again. No sooner had he returned than the Chinese granted important approvals. Li even described Tesla’s development in China as “an example of success” for cooperation between the USA and China.

    Musk would never talk about the Chinese like he recently did about the German Chancellor (“Olaf is a fool”). However, in Shanghai, where the largest Tesla plant in the world is located, he does not have to deal with problems like in Germany. In Brandenburg, environmental activists hinder his expansion, while expansion in Shanghai is no problem. Tesla is building another plant next to the Gigafactory, which will soon produce megapacks – large energy storage batteries.

    ‘Interesting dynamic between Musk and China

    Shanghai was a good deal for Musk right from the start. He received the necessary permits to become the first foreign car manufacturer in China to be allowed to build a factory without a Chinese joint venture partner. China is Tesla’s biggest market outside the United States. In the third quarter, the manufacturer reported 181,883 vehicles sold in China – an increase of 30 percent compared to the previous year.

    Could now be the time for the Chinese to ask Musk for favors? “There’s a very interesting dynamic there between Musk and China in that he needs them, and he’s trying to pursue business interests there,” Kelly Griec from the Stimson Center think tank in Washington told US broadcaster NBC.

    Commentators on the Chinese social network Weibo already see Musk as the next Henry Kissinger. The former US Secretary of State is revered in China for his diplomatic efforts in the 1970s. Unlike Kissinger, however, Musk is a business-motivated player with vested financial interests in both countries. Observers believe that he is trying to exert influence in both systems to benefit from Trump’s potential policies as well as relations with China.

    The tariff controversy

    One crucial point where his and Beijing’s interests coincide is on tariffs. In the past, Musk has criticized import tariffs on cars that affect Chinese manufacturers in the United States and elsewhere – such as those imposed by President Joe Biden on Chinese EVs. He probably fears that high countervailing duties would result in further decoupling, posing a challenge for Tesla despite local production in Shanghai.

    Musk seeks a good business climate on both sides of the Pacific to further his interests. Keeping Trump’s “America First” policy in check is important for him to avert a US-Chinese trade war. And “America First” also has advantages for the billionaire. In particular, Musk’s space company SpaceX could benefit from even more government contracts. In his victory speech, Trump already emphasized the need to strengthen America’s leading role in space. And enthusiastically referred to SpaceX’s recent success in catching a rocket with mechanical arms.

    SpaceX satellites are a thorn in Beijing’s side

    However, this is another balancing act for Musk. Beijing is much more critical of SpaceX than Tesla, as the Chinese government sees the Starlink satellites deployed in orbit by Musk as a security risk. China would particularly frown upon Taiwan using this technology.

    However, Musk’s stance on the Taiwan question should calm the Chinese leadership. In 2022, Musk even recommended treating Taiwan as “a kind of special administrative zone.” This is in line with China’s vision of placing the island under a model similar to that of Hong Kong and Macau. Musk also said that Beijing sees Taiwan as an “integral part of China,” similar to how the US would view Hawaii. That sounds like Beijing doesn’t need to worry about Taiwan receiving a Starlink delivery any time soon.

    • Handelskrieg

    New Silk Road in Peru: How a billion-euro project is set to pay off for Beijing

    Port project in Chancay on the Peruvian Pacific coast.

    On Thursday, China’s President Xi Jinping will officially inaugurate a milestone on the New Silk Road. The port of Chancay on Peru’s Pacific coast is one of the most important infrastructure projects that China has launched on the South American continent. Its importance is by no means limited to container handling. Chancay is a political signal that reaches all of Latin America, reminding the United States of China’s growing presence in its backyard and Europe of its own shortcomings.

    Xi will join Peru’s President Dina Boluarte in Lima for the digital inauguration of the port, which is just over an hour’s drive north of the capital. Xi is in Peru until Sunday for the Asia-Pacific Economic Community (APEC) meeting before traveling on to Brazil to attend the G20 summit. With the opening of the port in his luggage, Xi will be able to demonstrate growing Chinese self-confidence and increasing independence to the other heads of state of the largest economies in Brazil.

    Port of call for the Chinese military

    The port symbolizes a new ace up Beijing’s sleeve in the geostrategic poker game with the US and its allies. Chancay is not only funded by Chinese money, the port is also controlled by Chinese interests. If need be, it will become a port of call for the Chinese military off the American continent – while still a good distance from US waters, it is nevertheless in new territory.

    Peru and China have long since set in motion their closer military exchange. On July 29, Peru celebrated its Independence Day with a military parade in Lima. Members of the Chinese People’s Liberation Army also participated in the parade for the first time. Although foreign military personnel have also marched in the parade in the past, it was highly unusual for them to come from China. “We are facing a sample of the influence that China exercises in Peru today,” Paolo Benza, Peruvian political analyst and economic journalist, told the online platform of the Diálogo Americas political forum.

    A few months ago, the Peruvian parliament passed a law that guarantees Cosco exclusive maritime services in the port of Chancay in record time. Cosco had even threatened to halt construction and file a lawsuit if Peru did not comply with the demand. Argentine logistics expert Agustín Barletti called the law “a tailor-made suit for China to avoid economic reprisals from Beijing.”

    Port significantly shortens shipping time

    The port in Chancay will shift Latin American trade flows. Raw materials and agricultural production goods are to be shipped to the People’s Republic primarily from Brazil, Argentina, Bolivia, Chile, Ecuador, Colombia and Peru and from there will take ten days less on the high seas than before – just under four weeks.

    With the completion of the first construction phase, four jetties will initially go into operation. The deep-sea port also allows freighters with a length of 400 meters to call at Chancay. These freighters, which are too large to pass through the Panama Canal, can carry up to 18,000 standard containers. The project was the Chinese state-owned shipping company Cosco worth an investment of 3.3 billion euros.

    Numerous factors favor the dynamic growth of China’s influence in Latin America. The continent is not only experiencing lower economic growth compared to other emerging regions of the world, but is also paying a higher price for external shocks, as the United Nations Development Program (UNDP) notes under #GraphForThought. The negative swings of the 2008 financial crisis, the slump in commodity prices in 2014 and the outbreak of the Covid pandemic in 2020 were much more severe in the economies of Latin America and the Caribbean than elsewhere.

    ‘Port for the whole world’

    This increases the desire for stability, which China promises through major investments and integration into the Belt and Road Initiative. Moreover, the People’s Republic is fuelling competition among many Latin American countries to climb into China’s good graces. When the port project was announced over five years ago, both sides emphasized “the great opportunity” for Peru and the project as a “port for the whole world.” Other countries in the region, whose economies are not getting off the ground, look to Chancay with envy and are increasingly open to comparable Chinese ideas.

    Of 33 Latin America and the Caribbean countries, 22 have already signed an agreement with China as a BRI partner state. China is also forging free trade agreements wherever it can. The most recent such agreement between the People’s Republic and Ecuador came into force on May 1. However, China is not only acting out of economic motivation.

    It is also about isolating Taiwan, which has long maintained diplomatic relations with numerous Latin American states. Meanwhile, only seven countries from Latin America and the Caribbean still officially recognize Taiwan as a state and have therefore renounced diplomatic relations with the People’s Republic. In 2023, Honduras – motivated by promises of economic benefits – opted for Beijing.

    Uruguay would have to leave the Mercosur association

    In Brazil, Xi Jinping will probably make a new attempt to convince the largest Latin American economy of a BRI partnership next week. However, Brazil is cautious and does not want to alienate the USA and Europe too much.

    Uruguay, on the other hand, may soon sign a free trade agreement with China – depending on the outcome of the run-off election at the end of November. Such an agreement would mean the definitive end of the free trade agreement between the four South American Mercosur states and the EU – at least in the form that has been envisaged for years but has yet to be implemented. This is because Uruguay would have to leave the Mercosur group. It would be another Chinese move to increase its political influence on the continent.

    • Container
    • Diplomatie
    • Free trade agreement
    • Geopolitics
    • Peru
    • Raw materials
    • Security
    • Xi Jinping

    News

    Taiwan: German State Secretary Philipp in Taiwan for talks

    Berlin has sent State Secretary Udo Philipp to Taiwan for talks. According to the Ministry of Economic Affairs, Philipp will be in the country on Monday and Tuesday. The State Secretary will hold talks on the continued expansion of economic cooperation and participate in the German-Taiwanese Joint Business Council. This year, the focus is on German-Taiwanese cooperation in the semiconductor sector. Philipp will also visit a Taiwan Semiconductor Manufacturing Company (TSMC) plant.

    “In view of the growing geopolitical challenges, cooperation with value partners such as Taiwan is becoming increasingly important,” said the State Secretary, adding that Germany and Taiwan wanted to increase the resilience of their supply chains. “Closer economic cooperation between our two countries can make a significant contribution to this.” According to Philipp, Berlin wants to encourage Taiwanese companies to expand their business activities in Germany and the EU. TSMC is currently building a chip factory in Dresden. ari

    • Lieferketten
    • Semiconductor
    • Taiwan
    • TSMC

    Economy: How the People’s Bank wants to do to tackle the downturn

    Chinese People’s Bank Governor Pan Gongsheng emphasized on Monday that Beijing “will make every effort to maintain the overall stability of the financial system.” The announcement came a few days after China’s top legislative body, the National People’s Congress (NPC), passed a bill through its Standing Committee to raise the debt ceilings for local governments to combat the country’s economic slowdown.

    Pan referred to a report he presented to the Standing Committee last week. According to Pan, the People’s Bank will:

    • strengthen the countercyclical adjustment,
    • maintain the stability of the yuan exchange rate at a reasonable and balanced level,
    • comprehensively strengthen financial supervision to prevent systemic risks,
    • reaffirm a supportive monetary policy stance.

    Observers were not particularly impressed by Pan’s announcements and do not expect investors to be reassured after Friday’s rather disappointing stimulus program: OCBC Bank analysts expect that the People’s Bank will cut banks’ reserve requirement ratio again in November or December to support planned bond issuance.

    China observers are skeptical whether all these steps will lead to a short-term economic boost, as most of the new funds are intended to reduce local government debt. rtr/ari

    • Wirtschaftswachstum

    COP29: CBAM almost causes agenda dispute

    The EU has prevailed: Climate action measures that impact trade will not be on the agenda at this year’s UN Climate Change Conference in Baku (COP29). China came to COP29 with the demand to discuss so-called “unilateral trade measures” in the negotiations. The EU’s Carbon Border Adjustment Mechanism (CBAM) is a particular thorn in Beijing’s side. Brazil, South Africa and India supported the motion.

    Europe considers the climate negotiations to be the wrong place and believes the dispute is better handled at the World Trade Organization. The EU has thus managed to ensure that the issue is not included on the agenda. Instead, the Azerbaijani COP presidency wants to include issues like CBAM and the IRA in its “consultations” with the various states. China was satisfied with the decision.

    Developing countries fear Trump will create new trade barriers

    This compromise means that although the issue is not off the table, it does not play a role in the official negotiating rooms. However, the risk of another dispute erupting in Baku has not been averted, as developing countries fear that Trump’s re-election will lead to further trade barriers.

    Clashes over the agenda at UN climate conferences are not uncommon, and CBAM has long been a source of disagreement. China sees climate action instruments such as CBAM, IRA or the EU’s anti-deforestation law as a violation of the Framework Convention on Climate Change, as Beijing believes they promote protectionism and discrimination against developing countries. luk

    • COP29

    Heads

    Manoj Kewalramani reads the People’s Daily every day

    Political scientist Manoj Kewalramani

    Manoj Kewalramani has to get up early because, besides his job at the Indian think tank Takshashila Institution, he spends two to three hours each day carefully reading the newspaper. On the front page, he always sees: Xi Jinping. Kewalramani reads the People’s Daily, China’s top propaganda newspaper, and has been publishing his assessments and analyses in the Tracking People’s Daily newsletter for three years now.

    In between, he sometimes takes a break to take the children to school, Kewalramani said in a video interview from his office in Bangalore. The newsletter is usually published early in the day. In it, Kewalramani compares announcements from the Communist Party leadership with global events and deciphers their often cryptic propaganda language. The newsletter has become a valuable window into the inner logic of the Chinese state apparatus for China watchers around the world.

    First Bollywood, then international relations

    For a long time, Kewalramani actually wanted to become a Bollywood star. While studying in Mumbai, the center of the Indian film industry, he acted and modeled on the side. But in his mid-twenties, he decided against a career in film with a heavy heart. Instead, Kewalramani went to England for a master’s degree in international relations and then worked as a news journalist in India for several years.

    At the time, it was unthinkable for Kewalramani to make a living reading Chinese state propaganda. The contact with China came through his father, who ran an import-export company between India and China. During a career break, Kewalramani moved in with him, started working for the company in 2011 and traveled extensively in China. “I know most of the Chinese provinces, especially the coast, the hub of industrial production.”

    Work at the Chinese state broadcaster CCTV

    Over time, Kewalramani realized that the businessman’s life was not his calling, but his passion for China persisted. He applied for several journalistic jobs and ended up at the English branch of the Chinese state news channel CCTV in 2013. The news value of his work was, of course, debatable. But the work gave him intriguing insights into the decision-making processes of China’s propaganda apparatus, says Kewalramani.

    After three years in Beijing, he then moved back to India. At the time, there was a huge knowledge void about China. However, the renewed flare-up of Sino-Indian border disputes since 2017 and, most recently, the Covid pandemic have heightened awareness of China’s importance and potential risks. For Kewalramani, the pandemic also provided the opportunity to follow Chinese discourse more closely: “I suddenly had a lot of time on my hands.” He started reading the People’s Daily and became one of the most renowned experts on China-India relations.

    China-India relations remain complicated

    Kewalramani’s 2021 book “Smokeless War – China’s quest for geopolitical dominance” can also be understood as a warning of a more self-confident and aggressive China. Although it is debatable how the country sees its role in the world in detail, he is convinced that China wants to displace the USA as the leading power in the medium to long term.

    Kewalramani sees the fact that Indian Prime Minister Modi and China’s President Xi Jinping recently met face-to-face for the first time in five years as a positive signal, as well as a recent signal of rapprochement in the border conflict. Nevertheless, the relationship between India and China will remain difficult. Kewalramani believes there is a lack of debate in his country, as in Europe, about the economic areas where Chinese investment is possible and perhaps even desirable, and which areas require greater safeguarding.

    Chinese imports remain important for India

    Compared to the West, India’s extreme poverty is also a stronger factor. India’s gross domestic product is around 3,000 US dollars per capita, compared to 80,000 dollars in the USA. “We can produce iPhones, but most people can’t afford them.” That is why China’s low-cost industrial production remains attractive to India’s population. However, according to Kewalramani, the aim should be to shape mutual dependencies so that they can also be used as negotiating leverage for India and not just as unilateral bargaining chips for China.

    At the same time, Kewalramani hopes for more in-depth academic and cultural exchange. Above all, he sees a need for more stakeholders who try to generate original knowledge about China and its political discourse on the ground and by studying sources. This would be the only way to realistically assess what the Chinese leadership actually wants. It sounds as if the People’s Daily will accompany Manoj Kewalramani on a daily basis for some time to come. Leonardo Pape

    • Heads

    Executive Moves

    Heino Dannemann Tian has been Human Resources Director at Volkswagen in Taiwan since September. Dannemann Tian has worked in the automotive industry in China since 2003. Previously, he was Human Resources Director at the FAW-Volkswagen joint venture in Chengdu.

    Devin Hou has been Sales Manager at Geely Auto International since October. Previously, he was International BD Manager at London EV Company (LEVC). There, Hou supported international sales and marketing teams in maintaining and developing dealerships in the EU. He will remain based in Hangzhou.

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

    Dessert

    In Tongren, Guizhou, farmers lay out camellia seeds to dry. They are used to obtain tea seed oil or camellia oil, an edible, solid oil with a sweet herbal aroma. In some Chinese provinces, tea seed oil is the most important edible oil. It is rich in vitamin E and other antioxidants.

    China.Table editorial team

    CHINA.TABLE EDITORIAL OFFICE

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