Evergrande choking on debt + Hong Kong’s freedom + Farasis
Evergrande Group struggles to service loans
Hong Kong: One year of ‘security’
Daimler intensifies cooperation with Farasis
US ban Import of goods from Xinjiang
New battery storage for green power
Greenpeace: The climate’s iron grip on cities
Spahn calls for investigation on Covid origin
Games: Tencent may acquire Crytek
Exhibition on anti-Asian racism
Johnny Erling on Kissinger and the Temple of Heaven
Dear reader,
China’s economic miracle is fueled by exuberant capital injections. Ever since the 1990s, this pattern is repeating: Ambitious company executives take out far too many loans in their relentless desire to expand their business. Public banks then have to painstakingly deleverage sprawling groups of companies. Now it looks like the Evergrande real estate group is next in line. The company has created many millions of square meters of residential and commercial space all over China. Now debt-servicing difficulties are emerging. Our team of writers in Beijing explains whether a ‘second HNA’ is imminent. In case you need to refresh your memory: After the company HNA went on an investment spree that lasted for several years, the Hainan-based tourism group had to declare bankruptcy in January, which resulted in its divestment.
It has now been a year since the Hong Kong Security Law has been introduced. Its implementation marks the end of the free enclave of Hong Kong on Chinese territory. Marcel Grzanna summarizes how close-meshed surveillance has become since. There is virtually no hope left for a return to democracy.
Henry Kissinger is a diplomatic legend. In 1971, he secretly traveled to Beijing on two occasions to bring about a chance for open talks. Since then, he has strived to create a sustainable and predictable relationship between the US and China. Now, at the ripe age of 98, he faces the downfall of his efforts. A new confrontation seems almost inevitable. US-Americans refuse to understand that China will never allow itself to be tied into the old world order. And our columnist Johnny Erling explains how all of this is connected to the Temple of Heaven in Beijing.
Your Finn Mayer-Kuckuk
Feature
Is Evergrande the new HNA?
As the Communist Party celebrated its 100th birthday in Beijing on July 1, guests included some of the country’s most influential entrepreneurs. Of particular note was Xu Jiayin, the head of Chinese real estate developer Evergrande, who shortly after published photos of himself at the celebration. Did the entrepreneur try to prove with his appearance that he remains on good terms with Beijing despite all his financial problems?
If that was his intention, the maneuver didn’t help Xu much. Evergrande, which is one of China’s largest real estate companies, can’t seem to get a break from negative publicity. The company’s stock price dropped again this week to a new annual low, following six months of virtually uninterrupted decline.
Investors are fleeing in droves amid concerns that the company is facing a serious debt crisis. “Could Evergrande collapse?” Hong Kong newspaper South China Morning Post recently asked, recalling the fate of HNA, the mega-corporation based in the southern Chinese province of Hainan. In January, after years of aggressive expansion, the travel group and major investor was forced to file for bankruptcy practically overnight. A government-appointed task force is now restructuring the company.
A mountain of debt
Like HNA, Evergrande had expanded rapidly in recent years, amassing an exorbitant amount of debt equivalent to over 104 billion dollars by the end of last year. By the end of June this year, the amount had been reduced to around 88 billion dollars, but there is no relief on the markets.
According to the financial agency Bloomberg, several Chinese banks have turned their backs on Evergrande. Three unnamed institutions with a credit exposure of around seven billion US dollars are said to have decided not to extend Evergrande’s maturing loans this year. Three other banks, while allowing Evergrande to extend existing lines of credit, reduced the company’s access to new capital.
Evergrande’s troubles have long since drawn the attention of the Chinese government. As Bloomberg further reported, Evergrande founder Xu was reprimanded in Beijing just days before the party’s anniversary. The meeting suggests that Chinese authorities are growing concerned that Evergrande could pose systemic risks to the world’s second-largest economy. Officials of the Financial Stability and Development Committee are rumored to have urged Xu to resolve his company’s debt problems as quickly as possible. The entrepreneur should find new strategic investors to stabilize the real estate giant.
Just four years ago, the 62-year-old company founder probably would have never imagined that his empire could crumble so rapidly. At the time, the booming stock market in China had briefly made the construction entrepreneur China’s richest man, with an estimated net worth of 43 billion dollars, since Evergrande shares had soared by almost 500 percent within half a year on the Hong Kong stock exchange. This high has long since ended. Evergrande shares, which were worth 31 Hong Kong dollars at their peak, were last traded at a price of less than nine Hong Kong dollars.
With the National Security Law for Hong Kong, the Chinese government sought to bring calm to the city. After months of mass protests in 2019 against Beijing’s growing influence, authorities declared “stabilization” a top priority by drastically tightening the law. Government leader Carrie Lam had also hoped to give foreign companies and investors the sense that, despite a political purge of the past 12 months, things would just carry on as before. Business as usual, so to speak.
The supposed trust-building measure had apparently not the desired effect. On the contrary, the US government is now warning American companies about increasing risks associated with their economic and financial involvement in the city since the introduction of the security law. Authorities are gaining access to sensitive data, legal security is declining, and retaliation by Chinese authorities is becoming a real scenario. All this in a metropolis that for decades was one of the most liberal financial centers in the world. Washington wants to prepare its companies accordingly for the new challenges, the Financial Times reported.
The Security Act has softened the border between the People’s Republic and Hong Kong, as US diplomats argue. Foreign companies have seen this border as a protective wall against Chinese interests. Therefore, the diplomats elaborate, companies need to be aware that their data is no longer safe. The legal situation enables Chinese authorities to access that data. The recently passed Beijing Anti-Sanctions Law creates additional uncertainty because it makes foreign companies vulnerable to blackmail.
Most of the defendants have been in custody since February. Authorities consider their participation in organizing unauthorized primaries last summer a conspiracy against the government. Now, the group won’t stand trial until September at the earliest. And even then, it is highly unlikely that they will even receive a verdict by then. A transfer of jurisdiction to the High Court is expected.
Former Hong Kong MP Ted Hui, who fled the city with his family for fear of prosecution and now lives in exile in Australia, believes the postponement is deliberate. “The delay is politically motivated. The regime’s goal is to lock up the prisoners for as long as possible and wear them and their families down, both mentally and physically,” Hui tells China.Table. The ex-parliamentarian also expects the upcoming trial to be deliberately dragged out by up to two years. The adjournment to September already prevents the 47 defendants from becoming politically active before the parliamentary elections in the autumn. After the electoral law reform in Hong Kong, which was also decided in Beijing, the city’s democrats have only minimal chances of political participation anyway.
The Chinese government has clearly stopped the protest movement in its tracks. Its leaders either have fled Hong Kong, are in prison or awaiting trial. This is causing frustration among those who took to the streets during the protests. Rallies of up to two million people had supported the demands of the democratic opposition two years ago. Ted Hui thinks it is possible that a small part of the frustrated will become radicalized. Young people in particular had always stressed that they wanted to fight to the end for the preservation of their civil rights, instead of submitting to the authoritarian policies of the People’s Republic.
Verbal justification of terror now punishable by law
Still, Hui doesn’t really believe in recent reports of planned bombings in Hong Kong. “I can’t rule out the possibility that some are thinking about using other means, but I think it’s more likely that this story has been completely orchestrated by propaganda to fabricate a clear and present threat for the public to justify the introduction of the security law,” Hui said. Police arrested a total of 17 suspects since early July, including many under the age of 18. The boys and girls were allegedly recruited by a group called ‘Returning Valiant’ to carry out attacks against infrastructure and government facilities around the city.
In an article published by pro-Beijing Sing Tao Daily, Hong Kong’s Secretary for Justice Teresa Cheng reminded the city’s population after the arrests have been made, that even verbally justifying or glorifying ‘acts of terrorism’ are violations of the Security Act. Step by step, the freedom of speech in Hong Kong is being restricted, even though it should still be guaranteed by treaty until 2047.
Daimler continues cooperation with Farasis, despite troubles
Spirits were high in the region when two years ago, Chinese battery manufacturer and Daimler supplier Farasis announced the construction of a new plant in Bitterfeld-Wolfen (Saxony-Anhalt), which had been particularly hit after the German reunification. The Chinese company promised 600 million euros in investments and about 600 new high-quality jobs. Now, Farasis announced that it would review its construction plans. The company is revising its Europe-wide ‘localization strategy’. German business newspaper Handelsblatt reported that the project in Bitterfeld might not even happenafter all, and a delay in construction of around two years until autumn 2024 was to be expected at the least.
The plant was originally scheduled to open next year. There were also talks of Bitterfeld becoming the new European headquarters of Farasis. The company, which was initially founded in Silicon Valley in 2002, is currently headquartered in Ganzhou, China, and its German headquarters are located in Frickenhausen near Esslingen. Farasis stated that Bitterfeld would remain part of its revised European strategy. Further details will be made available within the next six weeks.
Farasis is one of three Chinese battery manufacturers that have planned production sites in Germany. Currently, CATL, a company based in Ningde and most prominent of the three, is currently building a plant for vehicle batteries in Erfurt while fellow competitor Svolt is building a battery production facility in the German federal state of Saarland (as China.Table reported).
Farasis is particularly important to Daimler. Although the Stuttgart-based automaker manufactures its own batteries, most of the cells for its batteries are supplied by manufacturers like Farasis. When asked by China.Table, Daimler stressed that Farasisremainsa“strategic partner for battery cells.” Daimler’s stake in Farasis in China also remains unchanged, the company added. Daimler had just launched its strategic partnership with the company last year, including an equity investment of around three percent.
Daimler does not comment on the details of supplier relationships. Only this much is known: The supply of the Mercedes-EQ Offensive is secured for the future, as the partners will continue to supply “innovative and high-performance battery cells according to our specifications“. flee
Akkus
Car Industry
CATL
Daimler
Electromobility
Farasis
SVOLT
Technology
US pushes for import ban on goods from Xinjiang
Ketchup by the popular brand Heinz labeled “Made in China” had been banned from import to the US at the beginning of the year. Many T-shirts made with cotton from Xinjiang are also blacklisted. Soon all products from Xinjiang are likely to be affected. On Wednesday, the US Senate passed a bill banning the import of all goods from China’s Northwestern Province.
The reason for this new bill is the Chinese leadership’s treatment of the region’s Muslim Uighur minority. “We will not turn a blind eye to the Chinese Communist Party’s ongoing crimes against humanity, and we will not allow corporations to have a free pass to profit from these horrific abuses”, stated Republican Senator Marco Rubio. “No American company should profit from these abuses. No American consumer should inadvertently buy products made by slave labor,” added Democrat Jeff Merkley, as reported by Reuters news agency. Rubio and Merkley had introduced the bill together.
The Uyghur Forced Labor Prevention Act would create a “rebuttable presumption” assuming goods manufactured in Xinjiang are made with forced labor and therefore banned under the 1930 Tariff Act, according to the draft. The burden of proof would be shifted to importers. The resolution passed unanimously in the Senate. The bill will now go to the House of Representatives. Approval is considered certain there as well. flee
Diplomacy
Forced Labor
Import
Trade
USA
Xinjiang
China plans to increase battery storage eightfold by 2025
Battery storage systems are intended to support theexpansion of solar and wind power plants. They are able to contribute to the stability of the electricity grid during so-called ‘dark periods’ – times when neither wind nor solar power plants are generating electricity. Electricity storage systems are therefore regarded as an important instrument for achieving the energy transition. So far, battery-based storage solutions are still considered very cost-intensive. However, prices could drop in the future with increasing demand, new innovations and utilization of used e-car batteries. nib
Batteries
Energy
Industry
Renewable energies
Extreme weather to hit Chinese cities hard in the future
The Guangzhou-Shenzhen region in particular, which includes Hong Kong, has been suffering more and more from severe heat since 1998. Since 1998, 73 heat waves have hit the region. In the metropolitan region of Shanghai, the average temperature has risen consistently since 1961, but the trend has accelerated since 1990. In the greater Beijing-Tianjin-Hebei area, the average temperature has risen by 0.32 degrees every ten years.
The frequency and duration of torrential rainstorms also increased around Shanghai and Guangzhou-Shenzhen. Over the period studied, extreme precipitation alternated with periods of relative drought. Even if global emissions were to peak around 2040, the average temperature in certain parts of Beijing will rise by 2.6 degrees by 2100, Greenpeace calculated. Summers would become 24 to 40 days longer in regions in which the study was conducted.
China’s coastal regions must also prepare for rising sea levels as a result of the climate crisis. According to forecasts, Shanghai will be the world’s most affected by rising sea levels in terms of population. With a temperature increase of two degrees, about 40 percent of the population is threatened by floods (China.Table reported). Hong Kong is also present in the list of cities most at risk. Sea levels off China’s coasts are rising even faster than the global average. This was indicated in a new report by the Ministry of National Resources. nib
Beijing
Climate
Guangzhou
Shenzhen
Storm
Spahn calls for further investigation into Covid origin
WHO Chairman Tedros Adhanom Ghebreyesus also called on China to “be transparent and open” and to “cooperate” in investigating the pandemic. Investigations into the origins of the Covid pandemic in China have been hampered because China has not provided access to relevant raw data, Tedros said. In March, a team of Western and Chinese scientists visited the area of Wuhan and investigated the origins of the virus during a 4-week period. In a joint report, the scientists concluded that the virus had probably passed from bats to humans via another animal. Tedros will brief WHO member states today on a proposed second phase of the study into the origin of the virus, as Reuters reported. nib
Coronavirus
Jens Spahn
Pandemic
Pharma
WHO
Games: Tencent may acquire German developer Crytek
Chinese app company Tencent may have plans to acquire the successful German video game developer Crytek located in Frankfurt, as German newspaper Bild reports on a potential takeover bid. The acquisition would make strategic sense for Tencent because it would allow the Shenzhen-based company to expand its position as market leader in the video game industry. Tencent already acquired Berlin-based game developer Yager in the past. Crytek is known for popular hits such as “Crysis” and “Far Cry”, which offer particularly realistic simulations of combat. Bild therefore quickly jumped to the conclusion that the Chinese army wants to use Crytek’s technology for war simulations. fin
Games
Military
Technology
Tencent
Museum plans reopening with exhibition on anti-Asian racism
The Museum of Chinese in America in New York plans to come out of its Covid hiatus with an exhibition on racism against Asian Americans. The exhibition focuses on an increase in hate against Asian Americans during the pandemic. The exact reopening date remains unclear. It will feature a timeline of low points in the treatment of U.S. Asian-Americans, along with videos, photos, music, protest posters and other documents documenting assault and discrimination. Founded in 1980 as the New York Chinatown History Project, the museum states its mission is to “preserve and present the history, heritage, culture, and diverse experiences of people of Chinese descent in the United States.” fin
Coronavirus
Culture
Society
Column
Kissinger’s secret passion for Beijing’s Temple of Heaven
By Johnny Erling
Kissinger was last in Beijing in November 2019 – where he also met with President Xi Jinping.
To gain a better understanding of China, Beijing prefers foreign politicians to visit its provinces instead of short trips to the capital city. German chancellors followed this advice. Helmut Schmidt went to Xinjiang on his inaugural visit in 1975, and Helmut Kohl was the first head of government to visit Tibet in 1987. Angela Merkel has been the most active. Most recently, the chancellor toured the central Chinese city of Wuhan in September 2019. Since taking office, she has visited China a total of twelve times and spent time in around 40 percent of all Chinese provinces.
The thought that Washington and Beijing are sliding into a hostile confrontation and forcing other countries under their wing in the process keeps him up at night. As a historian, he worries whether the Middle Kingdom’s rise will inexorably turn it into a rival to the Western order and detaches itself from the international system in the process.
During one of his many China travels, Kissinger discovered a place where he could reflect. It was the Tiantan (天坛) in southern Beijing, also known as the Temple of Heaven. I learned about it when I once interviewed the caretakers of the Ming-era temple complex. They proudly told me how fond Kissinger was of their park. He had visited it fifteen times, and in June 2013, at the age of 90, he even brought his grandson with him.
What fascinated him about the complex, which was built between 1406 and 1420 and served as an altar for the emperor to implore heaven for good harvests? As the “son of heaven”, the emperor presided over the annual sacrificial ceremony in the three-story rotunda with a roof of blue-glazed tiles. Its ingenious wooden construction did not require nails. The round temple situated on a square space embodied heaven above earth and also the hierarchical world order “Tian Xia” (天下) – Everything under China’s Heaven.
Kissinger praised the Tiantan as a “masterpiece of classical architecture” and was especially fond of the adjacent cypress forest with its old trees. The “ancient Chinese” ambiance also captivated him for another reason. It was the time when he contemplated the mystery of China. He published his findings in two books, “China: Between Tradition and Challenge” in 2011 and “World Order” in 2014. His initial question on traditional diplomacy was “how to balance rival forces and thus balance the interests of states and the clash of nationalism.” He found his answer in the pacts of the Peace of Westphalia (1648) and the Congress of Vienna (1815). Europe thus succeeded in “redefining the international order.”
Kissinger first visited Tiantan Park in October 1971, three months after his coup of July 9. He was back in Beijing to pre-negotiate with China on the draft of a Joint Communiqué, which was to be released during Richard Nixon’s visit in February 1972. His negotiating partner was Vice Foreign Minister Qiao Guanhua (乔冠华), who had earned his doctorate in 1937 in Germany at the University of Tübingen on the ancient Chinese philosopher Zhuangzi. Biographer Luo Yingsheng describes that after two days, both negotiators were bogged down in the question of finding an acceptable arrangement on the Taiwan issue. Qiao suggested to Kissinger a half-day break to accompany him through the Temple of Heaven. There, the two continued to argue. But Qiao’s calculation worked out: “Some things can only be addressed directly during a walk.” Kissinger had relented.
Kissinger and Qiao also arranged to meet again for a walk through Tiantan Park in 1973 after a negotiation impasse. Qiao showed him the oval stone enclosure around the frontal sacrificial temple, which had been completed in the 18th century and was called the Echo Wall by the locals because its construction transmitted sound. Standing 60 meters apart, the two could still hear and understand each other. Kissinger called it the world’s first “cordless wall telephone.” If Beijing allowed him to take a few bricks, he would have the first “hotline to China”.
Kissinger and all other US presidents, from Nixon to Bush to Obama, stayed the course of continued efforts to integrate China into the international order of the West-Westphalian concept, even after their initial mutual interest of warding off the Soviet threat was no longer relevant. For this reason, Beijing’s World Trade Organization membership was an important next step.
Kissinger planted “the seeds of a policy of engagement that became the operating system for U.S.-China relations,” wrote U.S.-China scholar Orville Schell in his brilliant essay. Things went well “until China, under Xi Jinping, began to adopt an aggressive and belligerent stance.” Schell then quotes Kurt Campell, the leading specialist on Asia in Biden’s National Security Council. He officially declared in May what everyone already knew at that point: “This endeavor is over.” There is “a growing bipartisan consensus in the United States to move on from Kissinger’s engagement policy to a strategy of strategic competition, including intensified confrontational measures to compete with Beijing,” Schell concludes.
Recently, Kissinger came forward with increasingly strong words of warning. He wondered whether the current development will lead to a major conflict, as inevitable as the First World War once was. He no longer finds the answers to this question in the Temple of Heaven.
Diplomacy
Geopolitics
WTO
Xi Jinping
Dessert
Shanghai likes it big. Now the metropolis owns another record-breaking attraction. The world’s largest planetarium will open this Saturday, with an area of more than 38,000 square meters. The centerpiece is a vaulted hall with a gigantic sphere in its midst. It is supposed to symbolize the celestial bodies – and thus also stands for China’s reach for the stars.
Johnny Erling on Kissinger and the Temple of Heaven
Dear reader,
China’s economic miracle is fueled by exuberant capital injections. Ever since the 1990s, this pattern is repeating: Ambitious company executives take out far too many loans in their relentless desire to expand their business. Public banks then have to painstakingly deleverage sprawling groups of companies. Now it looks like the Evergrande real estate group is next in line. The company has created many millions of square meters of residential and commercial space all over China. Now debt-servicing difficulties are emerging. Our team of writers in Beijing explains whether a ‘second HNA’ is imminent. In case you need to refresh your memory: After the company HNA went on an investment spree that lasted for several years, the Hainan-based tourism group had to declare bankruptcy in January, which resulted in its divestment.
It has now been a year since the Hong Kong Security Law has been introduced. Its implementation marks the end of the free enclave of Hong Kong on Chinese territory. Marcel Grzanna summarizes how close-meshed surveillance has become since. There is virtually no hope left for a return to democracy.
Henry Kissinger is a diplomatic legend. In 1971, he secretly traveled to Beijing on two occasions to bring about a chance for open talks. Since then, he has strived to create a sustainable and predictable relationship between the US and China. Now, at the ripe age of 98, he faces the downfall of his efforts. A new confrontation seems almost inevitable. US-Americans refuse to understand that China will never allow itself to be tied into the old world order. And our columnist Johnny Erling explains how all of this is connected to the Temple of Heaven in Beijing.
Your Finn Mayer-Kuckuk
Feature
Is Evergrande the new HNA?
As the Communist Party celebrated its 100th birthday in Beijing on July 1, guests included some of the country’s most influential entrepreneurs. Of particular note was Xu Jiayin, the head of Chinese real estate developer Evergrande, who shortly after published photos of himself at the celebration. Did the entrepreneur try to prove with his appearance that he remains on good terms with Beijing despite all his financial problems?
If that was his intention, the maneuver didn’t help Xu much. Evergrande, which is one of China’s largest real estate companies, can’t seem to get a break from negative publicity. The company’s stock price dropped again this week to a new annual low, following six months of virtually uninterrupted decline.
Investors are fleeing in droves amid concerns that the company is facing a serious debt crisis. “Could Evergrande collapse?” Hong Kong newspaper South China Morning Post recently asked, recalling the fate of HNA, the mega-corporation based in the southern Chinese province of Hainan. In January, after years of aggressive expansion, the travel group and major investor was forced to file for bankruptcy practically overnight. A government-appointed task force is now restructuring the company.
A mountain of debt
Like HNA, Evergrande had expanded rapidly in recent years, amassing an exorbitant amount of debt equivalent to over 104 billion dollars by the end of last year. By the end of June this year, the amount had been reduced to around 88 billion dollars, but there is no relief on the markets.
According to the financial agency Bloomberg, several Chinese banks have turned their backs on Evergrande. Three unnamed institutions with a credit exposure of around seven billion US dollars are said to have decided not to extend Evergrande’s maturing loans this year. Three other banks, while allowing Evergrande to extend existing lines of credit, reduced the company’s access to new capital.
Evergrande’s troubles have long since drawn the attention of the Chinese government. As Bloomberg further reported, Evergrande founder Xu was reprimanded in Beijing just days before the party’s anniversary. The meeting suggests that Chinese authorities are growing concerned that Evergrande could pose systemic risks to the world’s second-largest economy. Officials of the Financial Stability and Development Committee are rumored to have urged Xu to resolve his company’s debt problems as quickly as possible. The entrepreneur should find new strategic investors to stabilize the real estate giant.
Just four years ago, the 62-year-old company founder probably would have never imagined that his empire could crumble so rapidly. At the time, the booming stock market in China had briefly made the construction entrepreneur China’s richest man, with an estimated net worth of 43 billion dollars, since Evergrande shares had soared by almost 500 percent within half a year on the Hong Kong stock exchange. This high has long since ended. Evergrande shares, which were worth 31 Hong Kong dollars at their peak, were last traded at a price of less than nine Hong Kong dollars.
With the National Security Law for Hong Kong, the Chinese government sought to bring calm to the city. After months of mass protests in 2019 against Beijing’s growing influence, authorities declared “stabilization” a top priority by drastically tightening the law. Government leader Carrie Lam had also hoped to give foreign companies and investors the sense that, despite a political purge of the past 12 months, things would just carry on as before. Business as usual, so to speak.
The supposed trust-building measure had apparently not the desired effect. On the contrary, the US government is now warning American companies about increasing risks associated with their economic and financial involvement in the city since the introduction of the security law. Authorities are gaining access to sensitive data, legal security is declining, and retaliation by Chinese authorities is becoming a real scenario. All this in a metropolis that for decades was one of the most liberal financial centers in the world. Washington wants to prepare its companies accordingly for the new challenges, the Financial Times reported.
The Security Act has softened the border between the People’s Republic and Hong Kong, as US diplomats argue. Foreign companies have seen this border as a protective wall against Chinese interests. Therefore, the diplomats elaborate, companies need to be aware that their data is no longer safe. The legal situation enables Chinese authorities to access that data. The recently passed Beijing Anti-Sanctions Law creates additional uncertainty because it makes foreign companies vulnerable to blackmail.
Most of the defendants have been in custody since February. Authorities consider their participation in organizing unauthorized primaries last summer a conspiracy against the government. Now, the group won’t stand trial until September at the earliest. And even then, it is highly unlikely that they will even receive a verdict by then. A transfer of jurisdiction to the High Court is expected.
Former Hong Kong MP Ted Hui, who fled the city with his family for fear of prosecution and now lives in exile in Australia, believes the postponement is deliberate. “The delay is politically motivated. The regime’s goal is to lock up the prisoners for as long as possible and wear them and their families down, both mentally and physically,” Hui tells China.Table. The ex-parliamentarian also expects the upcoming trial to be deliberately dragged out by up to two years. The adjournment to September already prevents the 47 defendants from becoming politically active before the parliamentary elections in the autumn. After the electoral law reform in Hong Kong, which was also decided in Beijing, the city’s democrats have only minimal chances of political participation anyway.
The Chinese government has clearly stopped the protest movement in its tracks. Its leaders either have fled Hong Kong, are in prison or awaiting trial. This is causing frustration among those who took to the streets during the protests. Rallies of up to two million people had supported the demands of the democratic opposition two years ago. Ted Hui thinks it is possible that a small part of the frustrated will become radicalized. Young people in particular had always stressed that they wanted to fight to the end for the preservation of their civil rights, instead of submitting to the authoritarian policies of the People’s Republic.
Verbal justification of terror now punishable by law
Still, Hui doesn’t really believe in recent reports of planned bombings in Hong Kong. “I can’t rule out the possibility that some are thinking about using other means, but I think it’s more likely that this story has been completely orchestrated by propaganda to fabricate a clear and present threat for the public to justify the introduction of the security law,” Hui said. Police arrested a total of 17 suspects since early July, including many under the age of 18. The boys and girls were allegedly recruited by a group called ‘Returning Valiant’ to carry out attacks against infrastructure and government facilities around the city.
In an article published by pro-Beijing Sing Tao Daily, Hong Kong’s Secretary for Justice Teresa Cheng reminded the city’s population after the arrests have been made, that even verbally justifying or glorifying ‘acts of terrorism’ are violations of the Security Act. Step by step, the freedom of speech in Hong Kong is being restricted, even though it should still be guaranteed by treaty until 2047.
Daimler continues cooperation with Farasis, despite troubles
Spirits were high in the region when two years ago, Chinese battery manufacturer and Daimler supplier Farasis announced the construction of a new plant in Bitterfeld-Wolfen (Saxony-Anhalt), which had been particularly hit after the German reunification. The Chinese company promised 600 million euros in investments and about 600 new high-quality jobs. Now, Farasis announced that it would review its construction plans. The company is revising its Europe-wide ‘localization strategy’. German business newspaper Handelsblatt reported that the project in Bitterfeld might not even happenafter all, and a delay in construction of around two years until autumn 2024 was to be expected at the least.
The plant was originally scheduled to open next year. There were also talks of Bitterfeld becoming the new European headquarters of Farasis. The company, which was initially founded in Silicon Valley in 2002, is currently headquartered in Ganzhou, China, and its German headquarters are located in Frickenhausen near Esslingen. Farasis stated that Bitterfeld would remain part of its revised European strategy. Further details will be made available within the next six weeks.
Farasis is one of three Chinese battery manufacturers that have planned production sites in Germany. Currently, CATL, a company based in Ningde and most prominent of the three, is currently building a plant for vehicle batteries in Erfurt while fellow competitor Svolt is building a battery production facility in the German federal state of Saarland (as China.Table reported).
Farasis is particularly important to Daimler. Although the Stuttgart-based automaker manufactures its own batteries, most of the cells for its batteries are supplied by manufacturers like Farasis. When asked by China.Table, Daimler stressed that Farasisremainsa“strategic partner for battery cells.” Daimler’s stake in Farasis in China also remains unchanged, the company added. Daimler had just launched its strategic partnership with the company last year, including an equity investment of around three percent.
Daimler does not comment on the details of supplier relationships. Only this much is known: The supply of the Mercedes-EQ Offensive is secured for the future, as the partners will continue to supply “innovative and high-performance battery cells according to our specifications“. flee
Akkus
Car Industry
CATL
Daimler
Electromobility
Farasis
SVOLT
Technology
US pushes for import ban on goods from Xinjiang
Ketchup by the popular brand Heinz labeled “Made in China” had been banned from import to the US at the beginning of the year. Many T-shirts made with cotton from Xinjiang are also blacklisted. Soon all products from Xinjiang are likely to be affected. On Wednesday, the US Senate passed a bill banning the import of all goods from China’s Northwestern Province.
The reason for this new bill is the Chinese leadership’s treatment of the region’s Muslim Uighur minority. “We will not turn a blind eye to the Chinese Communist Party’s ongoing crimes against humanity, and we will not allow corporations to have a free pass to profit from these horrific abuses”, stated Republican Senator Marco Rubio. “No American company should profit from these abuses. No American consumer should inadvertently buy products made by slave labor,” added Democrat Jeff Merkley, as reported by Reuters news agency. Rubio and Merkley had introduced the bill together.
The Uyghur Forced Labor Prevention Act would create a “rebuttable presumption” assuming goods manufactured in Xinjiang are made with forced labor and therefore banned under the 1930 Tariff Act, according to the draft. The burden of proof would be shifted to importers. The resolution passed unanimously in the Senate. The bill will now go to the House of Representatives. Approval is considered certain there as well. flee
Diplomacy
Forced Labor
Import
Trade
USA
Xinjiang
China plans to increase battery storage eightfold by 2025
Battery storage systems are intended to support theexpansion of solar and wind power plants. They are able to contribute to the stability of the electricity grid during so-called ‘dark periods’ – times when neither wind nor solar power plants are generating electricity. Electricity storage systems are therefore regarded as an important instrument for achieving the energy transition. So far, battery-based storage solutions are still considered very cost-intensive. However, prices could drop in the future with increasing demand, new innovations and utilization of used e-car batteries. nib
Batteries
Energy
Industry
Renewable energies
Extreme weather to hit Chinese cities hard in the future
The Guangzhou-Shenzhen region in particular, which includes Hong Kong, has been suffering more and more from severe heat since 1998. Since 1998, 73 heat waves have hit the region. In the metropolitan region of Shanghai, the average temperature has risen consistently since 1961, but the trend has accelerated since 1990. In the greater Beijing-Tianjin-Hebei area, the average temperature has risen by 0.32 degrees every ten years.
The frequency and duration of torrential rainstorms also increased around Shanghai and Guangzhou-Shenzhen. Over the period studied, extreme precipitation alternated with periods of relative drought. Even if global emissions were to peak around 2040, the average temperature in certain parts of Beijing will rise by 2.6 degrees by 2100, Greenpeace calculated. Summers would become 24 to 40 days longer in regions in which the study was conducted.
China’s coastal regions must also prepare for rising sea levels as a result of the climate crisis. According to forecasts, Shanghai will be the world’s most affected by rising sea levels in terms of population. With a temperature increase of two degrees, about 40 percent of the population is threatened by floods (China.Table reported). Hong Kong is also present in the list of cities most at risk. Sea levels off China’s coasts are rising even faster than the global average. This was indicated in a new report by the Ministry of National Resources. nib
Beijing
Climate
Guangzhou
Shenzhen
Storm
Spahn calls for further investigation into Covid origin
WHO Chairman Tedros Adhanom Ghebreyesus also called on China to “be transparent and open” and to “cooperate” in investigating the pandemic. Investigations into the origins of the Covid pandemic in China have been hampered because China has not provided access to relevant raw data, Tedros said. In March, a team of Western and Chinese scientists visited the area of Wuhan and investigated the origins of the virus during a 4-week period. In a joint report, the scientists concluded that the virus had probably passed from bats to humans via another animal. Tedros will brief WHO member states today on a proposed second phase of the study into the origin of the virus, as Reuters reported. nib
Coronavirus
Jens Spahn
Pandemic
Pharma
WHO
Games: Tencent may acquire German developer Crytek
Chinese app company Tencent may have plans to acquire the successful German video game developer Crytek located in Frankfurt, as German newspaper Bild reports on a potential takeover bid. The acquisition would make strategic sense for Tencent because it would allow the Shenzhen-based company to expand its position as market leader in the video game industry. Tencent already acquired Berlin-based game developer Yager in the past. Crytek is known for popular hits such as “Crysis” and “Far Cry”, which offer particularly realistic simulations of combat. Bild therefore quickly jumped to the conclusion that the Chinese army wants to use Crytek’s technology for war simulations. fin
Games
Military
Technology
Tencent
Museum plans reopening with exhibition on anti-Asian racism
The Museum of Chinese in America in New York plans to come out of its Covid hiatus with an exhibition on racism against Asian Americans. The exhibition focuses on an increase in hate against Asian Americans during the pandemic. The exact reopening date remains unclear. It will feature a timeline of low points in the treatment of U.S. Asian-Americans, along with videos, photos, music, protest posters and other documents documenting assault and discrimination. Founded in 1980 as the New York Chinatown History Project, the museum states its mission is to “preserve and present the history, heritage, culture, and diverse experiences of people of Chinese descent in the United States.” fin
Coronavirus
Culture
Society
Column
Kissinger’s secret passion for Beijing’s Temple of Heaven
By Johnny Erling
Kissinger was last in Beijing in November 2019 – where he also met with President Xi Jinping.
To gain a better understanding of China, Beijing prefers foreign politicians to visit its provinces instead of short trips to the capital city. German chancellors followed this advice. Helmut Schmidt went to Xinjiang on his inaugural visit in 1975, and Helmut Kohl was the first head of government to visit Tibet in 1987. Angela Merkel has been the most active. Most recently, the chancellor toured the central Chinese city of Wuhan in September 2019. Since taking office, she has visited China a total of twelve times and spent time in around 40 percent of all Chinese provinces.
The thought that Washington and Beijing are sliding into a hostile confrontation and forcing other countries under their wing in the process keeps him up at night. As a historian, he worries whether the Middle Kingdom’s rise will inexorably turn it into a rival to the Western order and detaches itself from the international system in the process.
During one of his many China travels, Kissinger discovered a place where he could reflect. It was the Tiantan (天坛) in southern Beijing, also known as the Temple of Heaven. I learned about it when I once interviewed the caretakers of the Ming-era temple complex. They proudly told me how fond Kissinger was of their park. He had visited it fifteen times, and in June 2013, at the age of 90, he even brought his grandson with him.
What fascinated him about the complex, which was built between 1406 and 1420 and served as an altar for the emperor to implore heaven for good harvests? As the “son of heaven”, the emperor presided over the annual sacrificial ceremony in the three-story rotunda with a roof of blue-glazed tiles. Its ingenious wooden construction did not require nails. The round temple situated on a square space embodied heaven above earth and also the hierarchical world order “Tian Xia” (天下) – Everything under China’s Heaven.
Kissinger praised the Tiantan as a “masterpiece of classical architecture” and was especially fond of the adjacent cypress forest with its old trees. The “ancient Chinese” ambiance also captivated him for another reason. It was the time when he contemplated the mystery of China. He published his findings in two books, “China: Between Tradition and Challenge” in 2011 and “World Order” in 2014. His initial question on traditional diplomacy was “how to balance rival forces and thus balance the interests of states and the clash of nationalism.” He found his answer in the pacts of the Peace of Westphalia (1648) and the Congress of Vienna (1815). Europe thus succeeded in “redefining the international order.”
Kissinger first visited Tiantan Park in October 1971, three months after his coup of July 9. He was back in Beijing to pre-negotiate with China on the draft of a Joint Communiqué, which was to be released during Richard Nixon’s visit in February 1972. His negotiating partner was Vice Foreign Minister Qiao Guanhua (乔冠华), who had earned his doctorate in 1937 in Germany at the University of Tübingen on the ancient Chinese philosopher Zhuangzi. Biographer Luo Yingsheng describes that after two days, both negotiators were bogged down in the question of finding an acceptable arrangement on the Taiwan issue. Qiao suggested to Kissinger a half-day break to accompany him through the Temple of Heaven. There, the two continued to argue. But Qiao’s calculation worked out: “Some things can only be addressed directly during a walk.” Kissinger had relented.
Kissinger and Qiao also arranged to meet again for a walk through Tiantan Park in 1973 after a negotiation impasse. Qiao showed him the oval stone enclosure around the frontal sacrificial temple, which had been completed in the 18th century and was called the Echo Wall by the locals because its construction transmitted sound. Standing 60 meters apart, the two could still hear and understand each other. Kissinger called it the world’s first “cordless wall telephone.” If Beijing allowed him to take a few bricks, he would have the first “hotline to China”.
Kissinger and all other US presidents, from Nixon to Bush to Obama, stayed the course of continued efforts to integrate China into the international order of the West-Westphalian concept, even after their initial mutual interest of warding off the Soviet threat was no longer relevant. For this reason, Beijing’s World Trade Organization membership was an important next step.
Kissinger planted “the seeds of a policy of engagement that became the operating system for U.S.-China relations,” wrote U.S.-China scholar Orville Schell in his brilliant essay. Things went well “until China, under Xi Jinping, began to adopt an aggressive and belligerent stance.” Schell then quotes Kurt Campell, the leading specialist on Asia in Biden’s National Security Council. He officially declared in May what everyone already knew at that point: “This endeavor is over.” There is “a growing bipartisan consensus in the United States to move on from Kissinger’s engagement policy to a strategy of strategic competition, including intensified confrontational measures to compete with Beijing,” Schell concludes.
Recently, Kissinger came forward with increasingly strong words of warning. He wondered whether the current development will lead to a major conflict, as inevitable as the First World War once was. He no longer finds the answers to this question in the Temple of Heaven.
Diplomacy
Geopolitics
WTO
Xi Jinping
Dessert
Shanghai likes it big. Now the metropolis owns another record-breaking attraction. The world’s largest planetarium will open this Saturday, with an area of more than 38,000 square meters. The centerpiece is a vaulted hall with a gigantic sphere in its midst. It is supposed to symbolize the celestial bodies – and thus also stands for China’s reach for the stars.
