EU Presidency Czech Republic + Zero-Covid as a long-term recipe
EU Council Presidency: What the Czech Republic plans about China policy
Another five years of zero-Covid?
Sinolytics.Radar: ASEAN countries between USA and China
China cuts quarantine time by half
Human rights, Ukraine, Hong Kong – G7 sends clear message to China
Car manufacturers continue to suffer under chip shortage
Central bank warns against greenwashing
Competitors drive innovation
Profile: Yu Zhang – ‘China is sorting itself out’
Dear reader,
With a half-sentence, Beijing’s top party secretary Cai Qi had sparked a minor mass panic in China. In an article in the state newspaper Beijing Ribao, the 66-year-old declared that “in the next five years, Beijing will resolutely, unremittingly, do a good job in normalizing pandemic prevention controls”. In plain language, that would mean five more years of lockdowns, mass testing, and closed borders. The many outraged comments on social media channels such as Weibo show that the population no longer simply supports the whole thing – censors were hardly able to keep up with deleting posts, as Fabian Kretschmer reports from Beijing. Even though Cai Qi’s comment has since been changed, the question remains the elephant in the room: Does China really want to isolate itself and its citizens from the rest of the world in the long term with its zero-Covid policy?
In a few days, the Czech Republic will take over the EU presidency from France. Amelie Richter analyzes what this could mean for EU-China policy. Because although the Czech Republic, unlike France, is part of Beijing’s “16+1” format, the fronts are anything but clear. Under the chairmanship of Prague, which is sympathetic to Kyiv, the EU will keep a close eye on the relationship between Beijing and Moscow in particular. Other potentially controversial issues include Taiwan, Lithuania and closer ties with Indo-Pacific neighbors such as Australia, Korea and India.
Meanwhile, the G7 countries have taken a clear stance against China. The final document of the G7 summit in Elmau reads like a full-frontal swipe against China. An entire page is devoted to old and new problem areas, from China’s unclear stance in the Ukraine war to human rights violations in Xinjiang and unfair trade practices. No wonder Chinese diplomats are currently criticizing the summit on all channels and pointing to the BRICS alliance as an alternative power alliance.
In a few days, the Czech Republic will take over the EU Council presidency from France. In the second half of the year, the Russian attack against Ukraine and its effects will continue to dominate the agendas. Indirectly, this will continue to have an impact on the China policy of the EU states – because, under the presidency of Prague, which is sympathetic to Kyiv, the EU will keep a close eye on the relationship between Beijing and Moscow. Bilateral relations are less clear. This is because Prague has different ideas about how to deal with Beijing.
The Czech Republic has chosen “Europe as a task: rethink, rebuild, repower” as the guiding principle for its presidency. The motto refers to a work of the same name by human rights activist and politician Václav Havel. Strengthening democracy and how it can stand up to autocracies can thus be expected as a framework of the Czech EU presidency. Beijing might find this juxtaposition less appealing.
Key items of the Czech Presidency for the EU-China relationship:
War in Ukraine: In foreign policy with China, the “democracy versus autocracy” approach could increasingly shape Council meetings and prevent attempts by member states like Hungary to quickly return to “business as usual” with Beijing. China’s behavior toward Russia will be crucial in this regard. The Czech Republic has shown itself to be a staunch supporter of Ukraine since the beginning of the war, including through arms deliveries. Prague hopes to advance plans for the reconstruction of the country during its EU presidency. Speaking to China’s envoy for Central and Eastern Europe, Huo Yuzhen, Czech Foreign Minister Jan Lipavský recently made clear that China’s stance on the Ukraine war and its relations with Russia are being closely monitored. Lipavský also noted, according to media reports, that the EU would not shy away from changing its tune if China decided to support Russia more forcefully.
16+1 and the Lithuania trade dispute: Prague is likely to campaign for more support for Lithuania from the EU in its trade dispute with Beijing. Chinese customs have been blocking goods from the Baltic EU state since December. Brussels has called the World Trade Organization into action on this. France, during its EU Council presidency, pledged to support Vilnius, but the pressure was not increased The WTO proceedings were initiated in January, and talks are still ongoing (China.Table reported). With the Czech Republic, an EU state is now participating which, unlike France, is part of the “16+1” format – for the time being. Lithuania has already left the dialogue forum between China and several Central and Eastern European countries. The Czech Republic could soon follow suit; the Committee on Foreign Affairs of the Czech Chamber of Deputies recently called for steps toward a withdrawal in a resolution. In addition, the Foreign Ministry concurred with the assessment that the format had brought the Czech Republic virtually no benefit in a decade of membership. An early exit seems likely. Senate President Miloš Vystrčil, however, warned against a too rapid and uncoordinated withdrawal of his country, which China would “retaliate”. Vystrčil urged to join forces with other countries interested in leaving in order to send a signal.
Indo-Pacific: The region will also play a role under the Czech EU presidency. Prague says it would step up to provide new impetus: “We should focus on strategic partners, think about who are our allies and increase our trade ties with them.,” Czech Ambassador to the EU Edita Hrdá told Politico. This, she said, means “closer ties with the Indo-Pacific, including Australia, Korea and India”. According to Hrdá, it should also be reconsidered, “how much space is there for new projects with China”. Unlike France, which has a larger historical presence in the Indo-Pacific region, the Czech Republic is not automatically seen as a driving force in this area of foreign policy. However, Prague has maintained strategic partnerships with Korea and Japan for several years. Libor Sečka, former Czech ambassador to China, has been the Special Envoy of the Czech Republic for the Indo-Pacific since last year. Since November 2021, there have also been official talks with Indian and Indonesian representatives to build stronger bilateral relations in the field of security and innovation.
Taiwan: Taipei could also play a greater role in the next six months of the Council Presidency. Prague is working bilaterally to expand relations between the Czech Republic and Taiwan. Taiwan’s Foreign Minister Joseph Wu and a Taiwanese trade delegation visited the country last October. In April, Taipei announced the establishment of a $200 million Central and Eastern Europe Investment Fund that will focus on projects in the Czech Republic, Lithuania and Slovakia. Whether the Czech Republic will also push for closer cooperation with Taiwan in the EU framework is still unclear. There are no indications yet whether there will be any progress on a bilateral trade agreement between the EU and China under the Czech presidency.
Bilateral relations: Just a few years ago, Czech-Chinese relations were flourishing under Czech President Miloš Zeman. However, unfulfilled economic promises and a scandal involving a disappeared China advisor of President Zeman tarnished the public image of the People’s Republic. The new center-right coalition government, formed late last year under Prime Minister Petr Fiala, decided to change the tune toward China (China.Table reported). Zeman is still in office and attended the last 16+1 meeting for the Czech Republic (then 17+1 with Lithuania) in February 2021. The President also instructed the Czech ambassador to China, Vladimír Tomšík, to support the Beijing Winter Olympics – against the wishes of Foreign Minister Lipavský, who had openly called for a boycott. Lipavský also showed up in person at the opening of the Prague exhibition by Badiucao, a dissident artist hated by Beijing. The disagreement between the government and the presidential office is obvious. That could change early next year: In January, a new president will be elected in the Czech Republic. Zeman will not be allowed to run again.
Czech Republic
EU
Geopolitics
‘Zero-Covid’ for another five years?
It is a mere half of a sentence that made the proverbial jaws of many Chinese drop. “In the next five years, Beijing will resolutely, unremittingly, do a good job in normalizing pandemic prevention controls,” Beijing’s top Party Secretary Cai Qi announced in the state newspaper Beijing Ribao. What sounds like a trivial statement in the flowery words of the 66-year-old government official means in simple words: 1.4 billion Chinese will likely have to come to terms with the exhausting zero-Covid normalcy of lockdowns, mass testing, and closed borders in the Given
In view of the high economic costs, most experts have so far assumed that the Chinese government will seek a gradual relaxation of its COVID-19 strategy after the important 20th Party Congress in the fall; the industry sector’s demands also carry a similar tenor (China.Table reported). Skeptics, on the other hand, have long feared that Beijing will retain many of the measures introduced during the pandemic – above all, digital surveillance and restrictions on freedom of movement – indefinitely.
Another five years of lockdowns – these are bad news, even for the stoically patient Chinese people. And lo and behold, just a few hours after the controversial statement by Party Secretary Cai Qi, state media unceremoniously changed the quote and removed the concrete time specification. One can only speculate about the background to the decision, but the outraged reaction of the public can be considered the cause: Rarely have the people so openly expressed their frustration with the government’s strict zero-Covid strategy
The quote caused a storm of outrage on social media
The posts on social media were unequivocally clear. “It seems that everyone has already forgotten that the goal of fighting the pandemic is to return to normal life at some point,” wrote one user on the short message service Weibo. Another wrote that he would now set a “countdown” to “flee the country”. Countless users joined in the chorus before censors intervened as usual and deleted critical comments.
Users also receive support from official sources. Hu Xijin, editor-in-chief at the influential propaganda newspaper Global Times until his retirement, wrote on his personal account: “No one wants to live in Beijing for the next five years the way they have for the past six months.”
Most residents of the capital would probably wholeheartedly agree. After all, since 2022 at the latest, with the emergence of Omicron, the cost-benefit calculation of China’s zero-Covid policy has been off-balance in the eyes of its citizens. At times, a third of the Chinese population was affected by lockdowns, and regular mass testing remains part of the new daily routine in the country’s metropolises (China.Table reported).
More ‘ceasefire’ than ‘victory over the virus’
But despite all this, China has once again managed to bring all outbreaks in the country back under control. After months of lockdowns, the authorities currently count only a few dozen cases per day, despite widespread PCR mass testing. However, it is impossible to speak ofa“victory” over the virus, as official propaganda often portrays it. A “temporary ceasefire” would be more appropriate, since the fragile normalcy can change again at any time. Or, as one German manager cynically puts it, “After the lockdown is before the lockdown.” Virologists confirm this statement: Omicron is too contagious to be kept under control by mere contact restrictions (China.Table reported).
The European Chamber of Commerce in Beijing also assumes that China “may not be able to open its borders completely beyond the summer of 2023. This is mainly due to the “comparatively low vaccination rate among the over-60s.” And indeed, the vaccination campaign has slowed significantly since the beginning of the year, with fewer than 800,000 people currently receiving a jab. The International Monetary Fund (IMF) recently criticized that sufficient herd immunity would now be “a matter of years”.
And yet, tentative signs of relaxation can also be felt from Beijing. On Tuesday, the State Council announced that quarantine periods for arrivals from abroad had been shortened to one week in a hotel or other quarantine facility followed by three more days of home isolation. The news has been met with euphoria on Facebook groups where thousands of China expats stranded abroad for months have organized themselves.
But for most people, a return flight is impossible thanks to the number of available flights, which are often fully booked for months at a time. Anyone who wants to fly from Frankfurt to Shanghai in September, for example, has to plan for at least €10,000 – not including the one-week quarantine after arrival. Fabian Kretschmer
Corona Vaccines
Coronavirus
Health
Pharma
Sinolytics.Radar
Asean countries want to remain neutral
Dieser Inhalt ist Lizenznehmern unserer Vollversion vorbehalten.
During his trip to Tokyo in May, US President Biden announced negotiations on the Indo-Pacific Economic Framework (IPEF), strongly focusing on supply chain divergence and reducing China’s economic dominance in the region.
This is a tall task for IPEF: China is now the biggest trading partner for almost all countries willing to participate in IPEF, except for the Philippines and India (see graphic).
Nonetheless, the willingness of several important ASEAN countries and India to participate signals the demand for US leadership in the region and over time IPEF might offer an attractive alternative to the China-centered trade framework.
Whether IPEF can deliver on this objective remains to be seen. While some countries have explicitly stressed the desire to reduce dependence on China, most countries do not actually want to choose between the US and China.
In a survey of ASEAN countries, the majority of respondents voiced the desire to hedge between the US and China and enhance resilience to fend off pressure from both of the two major countries (see graphic).
The complexity of regional interests is also visible in the overlap between different regional trade frameworks. Most IPEF members are also members of RCEP and CPTPP, and many are signatories to the BRI.
Sinolytics is a European consulting and analysis company specializing in China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.
ASEAN
Geopolitics
RCEP
News
Quarantine time halved
China has reduced the quarantine time for travelers from abroad by half. The isolation period in the central Covid quarantine facilities has been shortened from 14 to 7 days. After that, travelers must isolate themselves at home for another three days. Previously, this time was seven days. This was announced by the National Health Commission in a statement. According to the statement, there are also relaxations for close contacts of individuals who have tested positive. The shorter incubation period of the Omicron variant makes the shorter quarantine possible, health experts said. In Beijing, the quarantine in quarantine facilities had already been shortened from 14 to 10 days. The European Chamber of Commerce in China welcomed the change. However, it points out that it remains to be seen whether all local authorities will follow the new, eased rules.
As of Tuesday, no new Covid cases were registered in Shanghai or Beijing, according to authorities. Shanghai Communist Party Chief Li Qiang said on Saturday that authorities had won “the war to defend Shanghai” against Covid-19 after an oppressive two-months of citywide lockdown was lifted in early June. Despite the lifting of Covid restrictions, the city’s 47 million residents were asked to test themselves every few days in order to still be able to enter public spaces and use transportation. nib
Coronavirus
Health
G7: China should increase pressure on Russia
The G7 countries have called on China to urge Russia to end its invasion of Ukraine. Beijing should put pressure on Moscow to withdraw troops from Ukraine immediately and without conditions, the G7 reported. In the G7 Leaders’ Communiqué of the three-day summit, the G7 countries also expressed concern about the situation in the East and South China Seas and spoke out against unilateral attempts to change the status quo by force or coercion. This time, the final declaration of the G7 summit contained almost an entire page just on China policy.
The G7 countries expressed particular concern about the human rights situation in China. China should respect universal human rights and guarantee basic freedoms – including in Tibet and Xinjiang. Accordingly, the G7 countries want to take stronger joint action against forced labor in China. For example, products made under forced labor are to be excluded from global supply chains. The move is aimed primarily at China, which uses forced labor on a large scale in Xinjiang province, according to a fact sheet published on the White House website. The G7 also agreed to take united action against unfair economic practices by the People’s Republic.
Reduce dependencies on China
With regard to China’s protectionist economic policy, the G7 complain about non-transparent and market-distorting measures by the People’s Republic. The seven major industrialized nations have agreed to continue to exchange views on this and to develop joint countermeasures outside the G7 forum. They want to reduce economic dependencies on China and arm themselves against coercive economic measures, according to the final document. The EU states are currently working on an instrument against economic coercion (China.Table reported).
With regard to the situation in Hong Kong, the G7 call on China to fulfill the commitments made in the Sino-British Joint Declaration and Basic Law and to ensure Hong Kong’s rights, freedoms, and autonomy. What is needed, they said, is to cooperate with China on common global challenges such as climate change and biodiversity loss. nib/fpe/rtr
Civil Society
Geopolitics
Human Rights
Supply chains
Trade
Chip shortage continues to weigh on automakers
The chip shortage could continue to plague Chinese automakers for several more years. That is according to statements from industry officials. Yuan Feng, General Manager of GAC Capital, the investment branch of state-owned Guangzhou Automobile Group (GAC), said the chip shortage could last into 2023 and 2024, according to business portal Caixin. GAC is the fifth-largest automaker in the People’s Republic. Chen Yudong, President of Bosch China, also sees no end tothe chip shortage. Chen said Bosch China could currently meet only 31 percent of customer demand due to the chip shortage.
The shortage has major financial implications. The lack of a chip worth a few yuan can stall the production of a car worth hundreds of thousands of yuan, Chen said. The production of circa one million carswas affected by the chip shortage in the first half of 2022 alone. Chen hopes chip production in China will increase in the near future. According to the report, domestic suppliers meet less than five percent of China’s demand for auto chips. GAC and other automakers have invested in local chipmakers or established their own chip manufacturing companies. nib
Autoindustrie
Central bank warns against greenwashing
China’s central bank has warned against “greenwashing and sustainable project fraud”. With the influx of capital into green investments, greenwashing has increased, meaning the disguising of environmentally and climate-damaging investments as sustainable, central bank Chairman Yi Gang said in an interview. “Information disclosure and strict monitoring are required” if the central bank is to pursue green policies, Yi said.
Greater transparency is seen as a means of preventing greenwashing in the area of sustainable investments. Most recently, there have also been allegations of greenwashing in Germany. Investigators accuse DWS, a subsidiary of Deutsche Bank, of misconduct and misleading investors. The asset management company allegedly sold investments as “greener” or “more sustainable” than they actually were. nib
Banks
Climate
Finance
green finance
PBOC
Chinese competitors drive innovation
87 percent of German companies in China perceive the innovative strength of Chinese competitors as a driving force for advancing their own innovations. This was the result of a recent survey by the German Chamber of Foreign Trade in China entitled: “German Innovation From China Going Global“.
The high quality of German products is still a competitive advantage, “but faster development cycles and time-to-market product implementation is a must to keep up with Chinese competition,” says Martin Klose, Managing Director of the German Chamber of Commerce in China.
More than half of the companies surveyed say that Chinese competitors are becoming stronger in establishing and expanding local research and development (R&D) capacities. This also applies to the period between the product development process and the market launch (time-to-market) of products or services (50 percent).
In the current 14th Five-Year Plan, China focuses on an even more innovation-based economy. In this way, China aims to become the world leader in science and technology by 2050 (China.Table reported). To achieve this, the state is relying on considerable incentives for companies if they conduct research and development domestically. However, this gives the Chinese side insight into the companies’ know-how.
Yu Zhang is an entrepreneur and Chairwoman of the Society for German-Chinese Cultural Exchange.
“It was not my decision to come to Germany, but it was my decision to stay in Germany,” explains Yu Zhang, Chairwoman of the Society for German-Chinese Cultural Exchange. Her adventure in Germany started in 1992 with a wish from her parents. They wanted Zhang to go to Berlin to study journalism. They never saw it coming that their daughter would stay in Germany for so long. Thirty years later, Zhang has made a name for herself as a businesswoman and arts promoter, is excellently networked and is not discouraged by the pandemic or the political bad weather.
It took Zhang a while to warm up to the foreign culture. She found Germany very exciting from the start, but the lack of a sense of family immediately stood out for her. “My 83-year-old landlady was very lonely, while her son lived only a few hundred meters away. The old lady was looked after by others, which was of course a total culture shock for me as a Chinese,” Zhang recalls of the early days. But she wasn’t put off by the cultural differences. She settled down and started a family.
And she becomes a bridge-builder between Germany and China. The timing is right. After all, the motto in Germany after the turn of the millennium is “change through trade,” and China’s huge market attracts German companies like a magnet. Zhang founded two consulting companies to support German-Chinese joint ventures, was appointed to numerous supervisory boards, and acquired stakes in companies. As a member of the board of trustees of Chinabrücke, Zhang has a quick line into politics.
‘China is sorting itself out’
The climate between Germany and China has now become noticeably rougher. Nevertheless, Zhang would like to see more positive stories about China. That is because the many negative reports also hinder the integration of Chinese in the country. “For the general population in Germany, who have never been to China, this is already very formative. That’s where I get worried.”
Zhang combines this with a call to the Chinese community in Germany: “Stand out more! We need to be more active in the current society, then everyone will be more visible.” Chinese compartmentalization during the pandemic did not contribute to more exchange, Zhang says. Still, she believes the country remains fundamentally interested. “China is sorting itself out right now, and the West’s absolutely dismissive attitude will back China into a corner. We need to place China at the table.”
Art is the last bridge to China
Zhang herself has found her own way to keep the channels open: Art. To do this, Zhang makes contemporary art the focus of her volunteer work. Organizing concerts or fundraising galas is also part of this.
For her next project, Zhang is bringing the up-and-coming young pianist Paul Ji from China to the Berlin Philharmonie in October. The concert is part of the Love Storm project, an initiative against hate on the Internet and for more tolerance. A five-meter-wide installation by Berlin artist Mia Florentine Weiss will initially be on display in the lobby of the Philharmonie. After the concert, the installation will then travel on to Beijing – completely without quarantine. Jonathan Kaspar Teacher
Art
Culture
Music
Executive Moves
Patrick Kremer took over the position of Business Development Manager China at Mercedes-Benz in June. His responsibilities include optimizing the Vans China Business division, developing vehicle solutions tailored to the Chinese market and optimizing the steering models used in China. His place of work is Stuttgart.
Michael Strass takes over the position of Homologation Manager (VTP) Incentives NEV Vehicles at BMW China. Strass has several years of experience in China. Most recently, the e-car specialist, who now lives in Beijing again, worked for three and a half years as Line Manager NEV for BMW Brilliance in Shenyang.
Dessert
As we all know, it’s easy to argue about appropriate toys for the little ones – on the Chinese shopping platform Taobao, small dolls that represent the notorious Dabai are sold (China.Table reported) – true to style with cotton swabs in their hands. These “Great Whites” conduct the COVID-19 mass tests and have been monitoring compliance with Covid lockdowns in China’s cities.
EU Council Presidency: What the Czech Republic plans about China policy
Another five years of zero-Covid?
Sinolytics.Radar: ASEAN countries between USA and China
China cuts quarantine time by half
Human rights, Ukraine, Hong Kong – G7 sends clear message to China
Car manufacturers continue to suffer under chip shortage
Central bank warns against greenwashing
Competitors drive innovation
Profile: Yu Zhang – ‘China is sorting itself out’
Dear reader,
With a half-sentence, Beijing’s top party secretary Cai Qi had sparked a minor mass panic in China. In an article in the state newspaper Beijing Ribao, the 66-year-old declared that “in the next five years, Beijing will resolutely, unremittingly, do a good job in normalizing pandemic prevention controls”. In plain language, that would mean five more years of lockdowns, mass testing, and closed borders. The many outraged comments on social media channels such as Weibo show that the population no longer simply supports the whole thing – censors were hardly able to keep up with deleting posts, as Fabian Kretschmer reports from Beijing. Even though Cai Qi’s comment has since been changed, the question remains the elephant in the room: Does China really want to isolate itself and its citizens from the rest of the world in the long term with its zero-Covid policy?
In a few days, the Czech Republic will take over the EU presidency from France. Amelie Richter analyzes what this could mean for EU-China policy. Because although the Czech Republic, unlike France, is part of Beijing’s “16+1” format, the fronts are anything but clear. Under the chairmanship of Prague, which is sympathetic to Kyiv, the EU will keep a close eye on the relationship between Beijing and Moscow in particular. Other potentially controversial issues include Taiwan, Lithuania and closer ties with Indo-Pacific neighbors such as Australia, Korea and India.
Meanwhile, the G7 countries have taken a clear stance against China. The final document of the G7 summit in Elmau reads like a full-frontal swipe against China. An entire page is devoted to old and new problem areas, from China’s unclear stance in the Ukraine war to human rights violations in Xinjiang and unfair trade practices. No wonder Chinese diplomats are currently criticizing the summit on all channels and pointing to the BRICS alliance as an alternative power alliance.
In a few days, the Czech Republic will take over the EU Council presidency from France. In the second half of the year, the Russian attack against Ukraine and its effects will continue to dominate the agendas. Indirectly, this will continue to have an impact on the China policy of the EU states – because, under the presidency of Prague, which is sympathetic to Kyiv, the EU will keep a close eye on the relationship between Beijing and Moscow. Bilateral relations are less clear. This is because Prague has different ideas about how to deal with Beijing.
The Czech Republic has chosen “Europe as a task: rethink, rebuild, repower” as the guiding principle for its presidency. The motto refers to a work of the same name by human rights activist and politician Václav Havel. Strengthening democracy and how it can stand up to autocracies can thus be expected as a framework of the Czech EU presidency. Beijing might find this juxtaposition less appealing.
Key items of the Czech Presidency for the EU-China relationship:
War in Ukraine: In foreign policy with China, the “democracy versus autocracy” approach could increasingly shape Council meetings and prevent attempts by member states like Hungary to quickly return to “business as usual” with Beijing. China’s behavior toward Russia will be crucial in this regard. The Czech Republic has shown itself to be a staunch supporter of Ukraine since the beginning of the war, including through arms deliveries. Prague hopes to advance plans for the reconstruction of the country during its EU presidency. Speaking to China’s envoy for Central and Eastern Europe, Huo Yuzhen, Czech Foreign Minister Jan Lipavský recently made clear that China’s stance on the Ukraine war and its relations with Russia are being closely monitored. Lipavský also noted, according to media reports, that the EU would not shy away from changing its tune if China decided to support Russia more forcefully.
16+1 and the Lithuania trade dispute: Prague is likely to campaign for more support for Lithuania from the EU in its trade dispute with Beijing. Chinese customs have been blocking goods from the Baltic EU state since December. Brussels has called the World Trade Organization into action on this. France, during its EU Council presidency, pledged to support Vilnius, but the pressure was not increased The WTO proceedings were initiated in January, and talks are still ongoing (China.Table reported). With the Czech Republic, an EU state is now participating which, unlike France, is part of the “16+1” format – for the time being. Lithuania has already left the dialogue forum between China and several Central and Eastern European countries. The Czech Republic could soon follow suit; the Committee on Foreign Affairs of the Czech Chamber of Deputies recently called for steps toward a withdrawal in a resolution. In addition, the Foreign Ministry concurred with the assessment that the format had brought the Czech Republic virtually no benefit in a decade of membership. An early exit seems likely. Senate President Miloš Vystrčil, however, warned against a too rapid and uncoordinated withdrawal of his country, which China would “retaliate”. Vystrčil urged to join forces with other countries interested in leaving in order to send a signal.
Indo-Pacific: The region will also play a role under the Czech EU presidency. Prague says it would step up to provide new impetus: “We should focus on strategic partners, think about who are our allies and increase our trade ties with them.,” Czech Ambassador to the EU Edita Hrdá told Politico. This, she said, means “closer ties with the Indo-Pacific, including Australia, Korea and India”. According to Hrdá, it should also be reconsidered, “how much space is there for new projects with China”. Unlike France, which has a larger historical presence in the Indo-Pacific region, the Czech Republic is not automatically seen as a driving force in this area of foreign policy. However, Prague has maintained strategic partnerships with Korea and Japan for several years. Libor Sečka, former Czech ambassador to China, has been the Special Envoy of the Czech Republic for the Indo-Pacific since last year. Since November 2021, there have also been official talks with Indian and Indonesian representatives to build stronger bilateral relations in the field of security and innovation.
Taiwan: Taipei could also play a greater role in the next six months of the Council Presidency. Prague is working bilaterally to expand relations between the Czech Republic and Taiwan. Taiwan’s Foreign Minister Joseph Wu and a Taiwanese trade delegation visited the country last October. In April, Taipei announced the establishment of a $200 million Central and Eastern Europe Investment Fund that will focus on projects in the Czech Republic, Lithuania and Slovakia. Whether the Czech Republic will also push for closer cooperation with Taiwan in the EU framework is still unclear. There are no indications yet whether there will be any progress on a bilateral trade agreement between the EU and China under the Czech presidency.
Bilateral relations: Just a few years ago, Czech-Chinese relations were flourishing under Czech President Miloš Zeman. However, unfulfilled economic promises and a scandal involving a disappeared China advisor of President Zeman tarnished the public image of the People’s Republic. The new center-right coalition government, formed late last year under Prime Minister Petr Fiala, decided to change the tune toward China (China.Table reported). Zeman is still in office and attended the last 16+1 meeting for the Czech Republic (then 17+1 with Lithuania) in February 2021. The President also instructed the Czech ambassador to China, Vladimír Tomšík, to support the Beijing Winter Olympics – against the wishes of Foreign Minister Lipavský, who had openly called for a boycott. Lipavský also showed up in person at the opening of the Prague exhibition by Badiucao, a dissident artist hated by Beijing. The disagreement between the government and the presidential office is obvious. That could change early next year: In January, a new president will be elected in the Czech Republic. Zeman will not be allowed to run again.
Czech Republic
EU
Geopolitics
‘Zero-Covid’ for another five years?
It is a mere half of a sentence that made the proverbial jaws of many Chinese drop. “In the next five years, Beijing will resolutely, unremittingly, do a good job in normalizing pandemic prevention controls,” Beijing’s top Party Secretary Cai Qi announced in the state newspaper Beijing Ribao. What sounds like a trivial statement in the flowery words of the 66-year-old government official means in simple words: 1.4 billion Chinese will likely have to come to terms with the exhausting zero-Covid normalcy of lockdowns, mass testing, and closed borders in the Given
In view of the high economic costs, most experts have so far assumed that the Chinese government will seek a gradual relaxation of its COVID-19 strategy after the important 20th Party Congress in the fall; the industry sector’s demands also carry a similar tenor (China.Table reported). Skeptics, on the other hand, have long feared that Beijing will retain many of the measures introduced during the pandemic – above all, digital surveillance and restrictions on freedom of movement – indefinitely.
Another five years of lockdowns – these are bad news, even for the stoically patient Chinese people. And lo and behold, just a few hours after the controversial statement by Party Secretary Cai Qi, state media unceremoniously changed the quote and removed the concrete time specification. One can only speculate about the background to the decision, but the outraged reaction of the public can be considered the cause: Rarely have the people so openly expressed their frustration with the government’s strict zero-Covid strategy
The quote caused a storm of outrage on social media
The posts on social media were unequivocally clear. “It seems that everyone has already forgotten that the goal of fighting the pandemic is to return to normal life at some point,” wrote one user on the short message service Weibo. Another wrote that he would now set a “countdown” to “flee the country”. Countless users joined in the chorus before censors intervened as usual and deleted critical comments.
Users also receive support from official sources. Hu Xijin, editor-in-chief at the influential propaganda newspaper Global Times until his retirement, wrote on his personal account: “No one wants to live in Beijing for the next five years the way they have for the past six months.”
Most residents of the capital would probably wholeheartedly agree. After all, since 2022 at the latest, with the emergence of Omicron, the cost-benefit calculation of China’s zero-Covid policy has been off-balance in the eyes of its citizens. At times, a third of the Chinese population was affected by lockdowns, and regular mass testing remains part of the new daily routine in the country’s metropolises (China.Table reported).
More ‘ceasefire’ than ‘victory over the virus’
But despite all this, China has once again managed to bring all outbreaks in the country back under control. After months of lockdowns, the authorities currently count only a few dozen cases per day, despite widespread PCR mass testing. However, it is impossible to speak ofa“victory” over the virus, as official propaganda often portrays it. A “temporary ceasefire” would be more appropriate, since the fragile normalcy can change again at any time. Or, as one German manager cynically puts it, “After the lockdown is before the lockdown.” Virologists confirm this statement: Omicron is too contagious to be kept under control by mere contact restrictions (China.Table reported).
The European Chamber of Commerce in Beijing also assumes that China “may not be able to open its borders completely beyond the summer of 2023. This is mainly due to the “comparatively low vaccination rate among the over-60s.” And indeed, the vaccination campaign has slowed significantly since the beginning of the year, with fewer than 800,000 people currently receiving a jab. The International Monetary Fund (IMF) recently criticized that sufficient herd immunity would now be “a matter of years”.
And yet, tentative signs of relaxation can also be felt from Beijing. On Tuesday, the State Council announced that quarantine periods for arrivals from abroad had been shortened to one week in a hotel or other quarantine facility followed by three more days of home isolation. The news has been met with euphoria on Facebook groups where thousands of China expats stranded abroad for months have organized themselves.
But for most people, a return flight is impossible thanks to the number of available flights, which are often fully booked for months at a time. Anyone who wants to fly from Frankfurt to Shanghai in September, for example, has to plan for at least €10,000 – not including the one-week quarantine after arrival. Fabian Kretschmer
Corona Vaccines
Coronavirus
Health
Pharma
Sinolytics.Radar
Asean countries want to remain neutral
Dieser Inhalt ist Lizenznehmern unserer Vollversion vorbehalten.
During his trip to Tokyo in May, US President Biden announced negotiations on the Indo-Pacific Economic Framework (IPEF), strongly focusing on supply chain divergence and reducing China’s economic dominance in the region.
This is a tall task for IPEF: China is now the biggest trading partner for almost all countries willing to participate in IPEF, except for the Philippines and India (see graphic).
Nonetheless, the willingness of several important ASEAN countries and India to participate signals the demand for US leadership in the region and over time IPEF might offer an attractive alternative to the China-centered trade framework.
Whether IPEF can deliver on this objective remains to be seen. While some countries have explicitly stressed the desire to reduce dependence on China, most countries do not actually want to choose between the US and China.
In a survey of ASEAN countries, the majority of respondents voiced the desire to hedge between the US and China and enhance resilience to fend off pressure from both of the two major countries (see graphic).
The complexity of regional interests is also visible in the overlap between different regional trade frameworks. Most IPEF members are also members of RCEP and CPTPP, and many are signatories to the BRI.
Sinolytics is a European consulting and analysis company specializing in China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.
ASEAN
Geopolitics
RCEP
News
Quarantine time halved
China has reduced the quarantine time for travelers from abroad by half. The isolation period in the central Covid quarantine facilities has been shortened from 14 to 7 days. After that, travelers must isolate themselves at home for another three days. Previously, this time was seven days. This was announced by the National Health Commission in a statement. According to the statement, there are also relaxations for close contacts of individuals who have tested positive. The shorter incubation period of the Omicron variant makes the shorter quarantine possible, health experts said. In Beijing, the quarantine in quarantine facilities had already been shortened from 14 to 10 days. The European Chamber of Commerce in China welcomed the change. However, it points out that it remains to be seen whether all local authorities will follow the new, eased rules.
As of Tuesday, no new Covid cases were registered in Shanghai or Beijing, according to authorities. Shanghai Communist Party Chief Li Qiang said on Saturday that authorities had won “the war to defend Shanghai” against Covid-19 after an oppressive two-months of citywide lockdown was lifted in early June. Despite the lifting of Covid restrictions, the city’s 47 million residents were asked to test themselves every few days in order to still be able to enter public spaces and use transportation. nib
Coronavirus
Health
G7: China should increase pressure on Russia
The G7 countries have called on China to urge Russia to end its invasion of Ukraine. Beijing should put pressure on Moscow to withdraw troops from Ukraine immediately and without conditions, the G7 reported. In the G7 Leaders’ Communiqué of the three-day summit, the G7 countries also expressed concern about the situation in the East and South China Seas and spoke out against unilateral attempts to change the status quo by force or coercion. This time, the final declaration of the G7 summit contained almost an entire page just on China policy.
The G7 countries expressed particular concern about the human rights situation in China. China should respect universal human rights and guarantee basic freedoms – including in Tibet and Xinjiang. Accordingly, the G7 countries want to take stronger joint action against forced labor in China. For example, products made under forced labor are to be excluded from global supply chains. The move is aimed primarily at China, which uses forced labor on a large scale in Xinjiang province, according to a fact sheet published on the White House website. The G7 also agreed to take united action against unfair economic practices by the People’s Republic.
Reduce dependencies on China
With regard to China’s protectionist economic policy, the G7 complain about non-transparent and market-distorting measures by the People’s Republic. The seven major industrialized nations have agreed to continue to exchange views on this and to develop joint countermeasures outside the G7 forum. They want to reduce economic dependencies on China and arm themselves against coercive economic measures, according to the final document. The EU states are currently working on an instrument against economic coercion (China.Table reported).
With regard to the situation in Hong Kong, the G7 call on China to fulfill the commitments made in the Sino-British Joint Declaration and Basic Law and to ensure Hong Kong’s rights, freedoms, and autonomy. What is needed, they said, is to cooperate with China on common global challenges such as climate change and biodiversity loss. nib/fpe/rtr
Civil Society
Geopolitics
Human Rights
Supply chains
Trade
Chip shortage continues to weigh on automakers
The chip shortage could continue to plague Chinese automakers for several more years. That is according to statements from industry officials. Yuan Feng, General Manager of GAC Capital, the investment branch of state-owned Guangzhou Automobile Group (GAC), said the chip shortage could last into 2023 and 2024, according to business portal Caixin. GAC is the fifth-largest automaker in the People’s Republic. Chen Yudong, President of Bosch China, also sees no end tothe chip shortage. Chen said Bosch China could currently meet only 31 percent of customer demand due to the chip shortage.
The shortage has major financial implications. The lack of a chip worth a few yuan can stall the production of a car worth hundreds of thousands of yuan, Chen said. The production of circa one million carswas affected by the chip shortage in the first half of 2022 alone. Chen hopes chip production in China will increase in the near future. According to the report, domestic suppliers meet less than five percent of China’s demand for auto chips. GAC and other automakers have invested in local chipmakers or established their own chip manufacturing companies. nib
Autoindustrie
Central bank warns against greenwashing
China’s central bank has warned against “greenwashing and sustainable project fraud”. With the influx of capital into green investments, greenwashing has increased, meaning the disguising of environmentally and climate-damaging investments as sustainable, central bank Chairman Yi Gang said in an interview. “Information disclosure and strict monitoring are required” if the central bank is to pursue green policies, Yi said.
Greater transparency is seen as a means of preventing greenwashing in the area of sustainable investments. Most recently, there have also been allegations of greenwashing in Germany. Investigators accuse DWS, a subsidiary of Deutsche Bank, of misconduct and misleading investors. The asset management company allegedly sold investments as “greener” or “more sustainable” than they actually were. nib
Banks
Climate
Finance
green finance
PBOC
Chinese competitors drive innovation
87 percent of German companies in China perceive the innovative strength of Chinese competitors as a driving force for advancing their own innovations. This was the result of a recent survey by the German Chamber of Foreign Trade in China entitled: “German Innovation From China Going Global“.
The high quality of German products is still a competitive advantage, “but faster development cycles and time-to-market product implementation is a must to keep up with Chinese competition,” says Martin Klose, Managing Director of the German Chamber of Commerce in China.
More than half of the companies surveyed say that Chinese competitors are becoming stronger in establishing and expanding local research and development (R&D) capacities. This also applies to the period between the product development process and the market launch (time-to-market) of products or services (50 percent).
In the current 14th Five-Year Plan, China focuses on an even more innovation-based economy. In this way, China aims to become the world leader in science and technology by 2050 (China.Table reported). To achieve this, the state is relying on considerable incentives for companies if they conduct research and development domestically. However, this gives the Chinese side insight into the companies’ know-how.
Yu Zhang is an entrepreneur and Chairwoman of the Society for German-Chinese Cultural Exchange.
“It was not my decision to come to Germany, but it was my decision to stay in Germany,” explains Yu Zhang, Chairwoman of the Society for German-Chinese Cultural Exchange. Her adventure in Germany started in 1992 with a wish from her parents. They wanted Zhang to go to Berlin to study journalism. They never saw it coming that their daughter would stay in Germany for so long. Thirty years later, Zhang has made a name for herself as a businesswoman and arts promoter, is excellently networked and is not discouraged by the pandemic or the political bad weather.
It took Zhang a while to warm up to the foreign culture. She found Germany very exciting from the start, but the lack of a sense of family immediately stood out for her. “My 83-year-old landlady was very lonely, while her son lived only a few hundred meters away. The old lady was looked after by others, which was of course a total culture shock for me as a Chinese,” Zhang recalls of the early days. But she wasn’t put off by the cultural differences. She settled down and started a family.
And she becomes a bridge-builder between Germany and China. The timing is right. After all, the motto in Germany after the turn of the millennium is “change through trade,” and China’s huge market attracts German companies like a magnet. Zhang founded two consulting companies to support German-Chinese joint ventures, was appointed to numerous supervisory boards, and acquired stakes in companies. As a member of the board of trustees of Chinabrücke, Zhang has a quick line into politics.
‘China is sorting itself out’
The climate between Germany and China has now become noticeably rougher. Nevertheless, Zhang would like to see more positive stories about China. That is because the many negative reports also hinder the integration of Chinese in the country. “For the general population in Germany, who have never been to China, this is already very formative. That’s where I get worried.”
Zhang combines this with a call to the Chinese community in Germany: “Stand out more! We need to be more active in the current society, then everyone will be more visible.” Chinese compartmentalization during the pandemic did not contribute to more exchange, Zhang says. Still, she believes the country remains fundamentally interested. “China is sorting itself out right now, and the West’s absolutely dismissive attitude will back China into a corner. We need to place China at the table.”
Art is the last bridge to China
Zhang herself has found her own way to keep the channels open: Art. To do this, Zhang makes contemporary art the focus of her volunteer work. Organizing concerts or fundraising galas is also part of this.
For her next project, Zhang is bringing the up-and-coming young pianist Paul Ji from China to the Berlin Philharmonie in October. The concert is part of the Love Storm project, an initiative against hate on the Internet and for more tolerance. A five-meter-wide installation by Berlin artist Mia Florentine Weiss will initially be on display in the lobby of the Philharmonie. After the concert, the installation will then travel on to Beijing – completely without quarantine. Jonathan Kaspar Teacher
Art
Culture
Music
Executive Moves
Patrick Kremer took over the position of Business Development Manager China at Mercedes-Benz in June. His responsibilities include optimizing the Vans China Business division, developing vehicle solutions tailored to the Chinese market and optimizing the steering models used in China. His place of work is Stuttgart.
Michael Strass takes over the position of Homologation Manager (VTP) Incentives NEV Vehicles at BMW China. Strass has several years of experience in China. Most recently, the e-car specialist, who now lives in Beijing again, worked for three and a half years as Line Manager NEV for BMW Brilliance in Shenyang.
Dessert
As we all know, it’s easy to argue about appropriate toys for the little ones – on the Chinese shopping platform Taobao, small dolls that represent the notorious Dabai are sold (China.Table reported) – true to style with cotton swabs in their hands. These “Great Whites” conduct the COVID-19 mass tests and have been monitoring compliance with Covid lockdowns in China’s cities.
