Authoritarian experience + The end for US-Asia chip alliance
Expats realize: they live in a dictatorship
South Korea rejects US chip alliance
Jorge Toledo Albiñana to become EU ambassador
US warns against support for Moscow
Oil companies show interest in Shell’s Russia project
UnionPay refuses cooperation with Sberbank
UN Human Rights Council investigates missing Tibetans
Profile: Fu Zhenghua – infamous security chief arrested
Dear reader,
Europeans who live in China, especially as employees of a large company, generally had a carefree life. The disadvantages of life in China were usually far away. Sometimes, the lack of the rule of law was a factor on a business level. But in private, life between meeting rooms, foreign schools, Starbucks and gyms was mostly pleasant.
The lockdown in Shanghai has changed that. The harsh measures of the government shocked many expats. Although there have been other drastic events in China’s big cities before, hardly anyone remembers them due to the rapid generational change of foreigners.
When Xi Jinping says that perseverance will lead to victory over the virus, he has a Chinese population in mind that the Party regularly inflicts hardships on. China’s politics sometimes moves with destructive power that crushes individuals on the sidelines. This is then considered collateral damage for the greater good. The ability to “eat bitter” 吃苦 is therefore vital for survival in China. Europeans and US-Americans never had to experience such things in their lives before. In today’s issue, Marcel Grzanna analyzes how the trauma of Shanghai affects foreigners.
Our second analysis looks at the US attempt to deal with the chip shortage. They courted South Korea to join a semiconductor alliance that would have been at least partly aimed at China. But Samsung country turned Joe Biden down, writes Frank Sieren. After all, China is a much larger and more important market.
Fu Zhenghua was officially arrested on Thursday. He is a real tiger – that is, a senior cadre who has been targeted by anti-corruption investigators. Fu is even a royal tiger: He was minister of justice and head of the intelligence service. Michael Radunski shows how closely Fu Zhenghua’s rise and fall are linked to the political course in the country.
Your Finn Mayer-Kuckuk
Feature
First-hand experience with dictatorship
Shanghai: A security guard oversees compliance with the curfew
In less than three weeks, the perception of China of 19-year-old Lisa from Muenster has changed dramatically. “I have to completely revise my opinion. I always thought the criticism of this political system was completely exaggerated. Now I’m appalled at what it actually means to live in a dictatorship,” says the young woman, whose Chinese parents had already migrated from Shanghai to Germany decades ago to escape the authoritarian politics of the People’s Republic.
Lisa grew up in Germany with freedom of expression and under the rule of law. Yet she never really took her family’s warnings about the ruthlessness of the Chinese leadership seriously. That is one reason why she went to Shanghai a few months ago in good spirits to brush up on her Mandarin.
When the lockdown approached in late March, she decided to flee to the Chinese resort island of Hainan. However, this did not save her from a positive Covid test. For more than two weeks now, Lisa has to live in quarantine at a hospital in the provincial capital of Sanya. “I feel completely helpless here, exposed to the arbitrariness of authorities and without privacy,” she says in an interview with China.Table. She has made the decision to leave the homeland of her parents and grandparents as soon as possible and not to live in China in the future, she says.
No escape: quarantine center in Shanghai
The unquestioning implementation of Covid regulations in China sends many foreigners into a state of shock. For the first time during their stay in China, they feel the loss of their own sovereignty vis-à-vis the state. Suddenly, the dictatorship is very close to the privileged guests from democratic countries. “As a foreigner, you live in the bubble of a subculture here, where you usually don’t notice the nature of the system and the consequences at all,” Lisa says.
Lockdown ‘chaotic, unstructured, and illogical’
This is not the first time in China’s recent history that romantic glorification of the People’s Republic by foreign locals has been hit hard by reality. The Tiananmen Square massacre in June 1989 marked a dramatic turning point. And the handling of the outbreak of the Covid precursor Sars in 2002 also showed numerous foreigners the dark side of a power monopoly in the hands of a single party.
But compared to then, China’s role in the world has changed drastically. Some see the country’s rise to become the second-largest economy as justification that the authoritarian system excludes its citizens from political participation. Twenty years after China’s accession to the World Trade Organization and the hosting of two Olympic Games, many guests in the country cannot fathom that the CP dictatorship no longer values its international reputation when it sees its own interests at risk.
The total dependence on the authorities and the feeling of helplessness also surprised Ralf Hayda. “On the one hand, I am shocked by the ruthlessness of the authorities towards the individual. On the other hand, it leaves me speechless how chaotic, unstructured and illogical the lockdown and the isolation of those who test positive are carried out,” says the 48-year-old, who has lived in Shanghai for almost three years. “What we experience here defies words. The left hand doesn’t know what the right hand is doing. No one wants to be responsible for anything, and no one makes any independent decisions here in the interest of the citizens,” Hayda says.
The lack of transparency troubles foreigners
The Berlin native admits that the situation leaves him with a sense of dread. “There is no transparency at all. At any time, there can be a knock at your apartment door and someone wants to ship you off to a quarantine camp,” he told China.Table. Just two days later, he was indeed taken to a hotel for isolation. The reason was a positive test that was already two weeks old.
A nine-minute phone call between him and a Chinese employee of a neighborhood committee about the matter gained attention on social media earlier this week. In it, Hayda complains about the local Covid policy. The comment sections include admiration for the open complaint, but also much criticism of the “foreigner” who only dares to do so because he does not have to expect drastic punishments like Chinese citizens. Hayda has since decided to leave China as soon as possible.
Janine Jakob experiences a similar impulse. “I no longer feel free in China,” says the 29-year-old. For several days, she has been subjected to a form of humiliation and intimidation that has been hard on her. After testing positive earlier this month, she, like Hayda, was not quarantined for some unknown reason. Instead, she has since isolated herself in her apartment in Shanghai’s Jing’an district.
However, after a series of negative antigen tests over several days, she had left her apartment on her own accord to line up in the courtyard of her apartment complex for a PCR test. A negative PCR test provides her with the only chance to at least step outside the front door of her apartment to take down the trash, for example. Otherwise, she is forbidden to do that as well.
What followed were accusations and finger-pointing by neighbors. They feared further infections in the apartment complex and potential weeks of isolation for everyone. Local police called Jacob and accused her of breaking Covid rules. “I apologized to neighbors and police and said I didn’t mean to break the rules,” she says.
‘Was I too naive? Yes’
Her Chinese roommate now keeps a close eye on the German and orders her via cell phone what to do and what not to do. Jakob had to watch helplessly as her roommate threw away most of her vegetables. She is only allowed to use the bathroom if her roommate gives her the okay via WeChat. “I can’t trust that woman anymore. I feel like a little girl being punished by her mother,” Jakob says. To make matters worse, a friend scared her that she could face three years in prison for violating quarantine rules.
“I try to see the positive side,” says Jakob, who started her own business as a personality coach and now applies all the mental techniques she usually teaches to her clients. She has always seen a future for her in China, she says. But after the experiences of the past few weeks, she now questions this vision. “Was I too naive?” she says. And sends the answer right after: “Yes.”
After the Tiananmen massacre and the Sars outbreak, the “aha” effect among foreigners did not have a broad lasting impact on the perception of the CP dictatorship outside China. However, the current close encounter with the authoritarian state overlaps with concerns about overdependence on China. Two or three decades ago, things were completely different. Back then, the desire for close cooperation was dominant. Moreover, the belief that China could change through trade was still common.
Civil Society
Health
Human Rights
South Korea turns down Biden’s semiconductor alliance
The plan for a semiconductor alliance by the United States between South Korea, Japan and Taiwan has been turned down. Out of fear of angering Beijing, the Koreans rejected the American proposal as “not fully acceptable,” according to South Korean media reports. The background: South Korean chip giants like Samsung and SK Hynix operate key factories in mainland China and fear sanctions should they cooperate too closely with the US industry.
The supply of microchips is currently one of the biggest bottlenecks for the economy and the main reason for the shortage of many high-value products. All major economies currently try to secure their supply of semiconductor components. The EU is also currently trying to forge a semiconductor alliance. One success of German business policy is that Intel decided to invest in the city of Magdeburg. The United States now wants to forge an alliance to prevent China from constantly snatching up its share of priceless semiconductors.
But that is precisely South Korea’s reason for refusing the American pitch. “Cooperation with the United States is the top priority of course, and yet the biggest market is also of paramount importance,” Business Korea quotes an industry insider as saying. He refers to China. Semiconductors represent Korea’s biggest export in trade with its big neighbor.
In 2021, the country achieved a trade surplus of $26 billion in chip trade with China, according to South Korean customs trade statistics. In 2020, the figure was $20 billion. China is already the world’s largest chip market, according to the Semiconductor Industry Association (SIA), with $192 billion in sales last year and a 27 percent growth. China is also South Korea’s biggest trading partner by a wide margin in other areas. It exports around twice as much to China as to the USA.
The South Korean Samsung Group has therefore already invested large sums in the People’s Republic. It has been operating a factory for advanced flash memory in Xi’an in the northwestern province of Shaanxi since February 2021. The $25 billion complex is the only Samsung factory located abroad and houses two wafer production lines and a packaging and testing facility, which accounts for more than 40 percent of the group’s total production capacity for NAND flash memory.
Samsung benefits from the high demand for semiconductors fueled by the global shortage. The South Korean company is the global market leader for flash memory chips. In the fourth quarter, Samsung’s operating profit climbed 52 percent to the equivalent of about $11 billion. This is the best result in four years, the company reported. Revenue simultaneously increased by almost a quarter to €56 billion – also a record figure.
Semiconductors: Who will be the first to become independent?
Meanwhile, the USA tries to become independent of Chinese products and, apart from cooperations with countries like South Korea, also focuses on the expansion of its own industry. The Biden administration, for example, wants to invest $52 billion in domestic semiconductor production and research with the America Competes Act. South Korea also plans to introduce legislation to trigger investments in chip manufacturing of $450 billion over ten years. Japan approved a €5.71 billion investment package in winter 2021 to strengthen its semiconductor sector. Japan’s share of global chip production was still over 50 percent in the late 1980s. Now it is only 10 percent.
According to latest market data from IC Insights, the US continues to be the dominant chip power. In 2021, US companies held a global market share of 54 percent. It was followed by South Korean companies with 22 percent and Taiwanese companies with 9 percent of the market. Europe as a whole came in at 6 percent, and China at 4 percent. However, the market research company calculates market shares based on where headquarters are located and not on where production is actually based. If you look at market shares based on actual production, the US only has a 12 percent share. In 1990, it was still around 40 percent. The German Marshall Fund fears that the position of the United States “erodes as strategic rivals advance efforts to develop their own domestic industry.”
China’s state-run Global Times believes that US sanctions against Huawei and Chinese chip maker Semiconductor Manufacturing International Corp (SMIC) are partly to blame for the global semiconductor shortage. “The US’ relentless political interference has overwhelmed global businesses,” the newspaper writes. The US attempt to exclude mainland China from the global chip supply chain is “unrealistic and counterproductive”. The result would be an even worse shortage.
However, China wants to do everything in its power to build up a powerful chip industry, preferably without having to rely on foreign suppliers. Beijing is not necessarily seeking to form alliances abroad, but is pooling the expertise of various tech companies at home. For example, Chinese carmaker SAIC Motor recently announced that it would enter the auto chip sector with tech company Horizon Robotics (China.Table reported).
Accusations of industrial espionage
So far, China’s companies have not been able to produce state-of-the-art chips with dimensions of just a few nanometers themselves. Nevertheless, the People’s Republic has set itself the goal of covering 70 percent of its semiconductor demand through domestic manufacturers by 2025. Companies like Oppo and Huawei want to be at the forefront with their own chips. China currently covers less than 20 percent of its semiconductor demand itself (China.Table reported).
However, things are clearly not yet working entirely without help from overseas. Taiwan’s government, for example, accuses Chinese companies of aggressively poaching Taiwan’s high-tech talent and engaging in technology theft.
Taiwan’s Ministry of Justice has already launched investigations against 60 Chinese nationals accused of, among other things, stealing corporate secrets. The list of companies under investigation reads like an industry index. It includes companies like Vimicro, GLC Semiconductor, Beijing Yinxing Technology and Analogix Semiconductor.
Chips
Geopolitics
Semiconductor
South Korea
Technology
USA
News
New EU Ambassador to China
Spanish diplomat Jorge Toledo Albiñana is to become the European Union’s new ambassador to China, EU circles told China.Table on Thursday. Toledo is currently Spain’s ambassador to Japan. The 57-year-old would succeed France’s Nicolas Chapuis as EU ambassador to Beijing, who is expected to step down from his post in the fall. The European External Action Service (EEAS) did not yet confirm the change.
Toledo is the second high-ranking European representative who transfers from Tokyo to China: Germany’s new ambassador to Beijing, Patricia Flor, also worked in the Japanese capital before her assignment in the People’s Republic (China.Table reported). Toledo was born in the German city of Ludwigshafen and has already served in various diplomatic positions for Spain and the EU. ari
EEAS
EU
Geopolitics
Japan
US Deputy Secretary warns against support for Moscow
During her visit to Brussels, US Deputy Secretary of State Wendy Sherman again warned China against providing “material support” to Russia. Beijing has seen what the West has imposed in terms of sanctions and export controls, Sherman said at an online event hosted by Brussels-based think tank Friends of Europe. “That should give them [the Chinese] some idea of the menu from which we can choose, if they were to provide material support.” Sherman did not specify whether this would include arms shipments or even financial aid. “We don’t want a conflict,” Sherman stressed after a meeting with European External Action Service (EEAS) Secretary-General Stefano Sannino on Thursday.
The US still hopes for cooperation, the Secretary of State said. However, that has limits, according to Sherman: “I think President Xi has made a decision about what the People’s Republic should be in the world. And that’s a very different view than the one we have.” Sherman arrived in the Belgian capital to meet with representatives of several organizations. In addition to EEAS, that includes NATO. On Friday, Sherman will attend the third EU-US dialogue on China. The Indo-Pacific is also expected to be on the agenda. ari
Geopolitics
Russia
Ukraine
USA
Shell wants to get rid of stake in Russian LNG plant
Energy giant Shell reportedly is in talks with Chinese companies to sell its stake in a major Russian gas project. The London-listed company is speaking with Chinese state oil companies CNOOC, CNPC and Sinopec about its 27.5 percent stake in the Sakhalin II liquefied natural gas venture, British newspaper The Telegraph reported on Thursday. According to the report, talks centered on the possible sale of Shell’s stake to one, two or all three companies. However, Shell is said to be open to potential buyers outside China as well.
Sakhalin II is controlled and operated by the Russian gas giant Gazprom. The project to produce natural gas and oil is located north of the Russian Pacific island of Sakhalin in the Sea of Okhotsk. Other stakeholders include the Japanese companies Mitsui & Co and Mitsubishi. Shell did not comment on the reports for the time being. According to Reuters, the Chinese oil companies also did not comment. Shell had announced in February that it would shut down its operations in Russia, including the Sakhalin II LNG plant, after sanctions were tightened against Moscow over the invasion of Ukraine. rtr/ari
Energy
Geopolitics
Raw materials
Russia
UnionPay refrains from involvement in Russia
Chinese financial service provider UnionPay is not taking over services of Mastercard and Visa in Russia, which have withdrawn from the country in response to the sanctions. As a result, Russian customers are currently unable to use credit cards. They have to continue to rely on the domestic debit card “Mir,” which only works within Russia.
Russia’s banks had hoped to draw on UnionPay and its well-established international network. China had already offered Russia to expand the use of UnionPay in the past. So far, however, the offer has been met with little interest, with only one percent of transactions at most going through the Chinese service provider.
Neither UnionPay nor its partner Sberbank gave an official explanation for the Chinese company’s withdrawal. However, it is safe to assume that UnionPay does not want to get caught in the crossfire of secondary sanctions imposed by the US and the EU. The latter is already talking about sanctioning companies that help Russia undermine the sanctions. fin
Finance
Geopolitics
Russia
USA
UN investigates missing Tibetans
The disappearance of three Tibetans is currently a matter of concern for the UN Human Rights Council. In a letter to the representative of the People’s Republic of China, the Special Rapporteurs of the Swiss-based body request information on the whereabouts and health status of the writer Lobsang Lhundup, singer Lhundrup Dhrakpa and teacher Rinchen Kyi. All three had been detained between 2019 and 2021. Lhundrup and Dhraka were sentenced to several years in prison. Kyi has been missing without an official conviction since August 2021.
The UN experts expressed concern that the intellectuals had been arbitrarily detained for exercising their freedom of speech, artistic freedom and participation in cultural life. According to the Special Rapporteurs, the detainees were committed to preserving the Tibetan language and culture. In their letter, the UN Special Rapporteurs also appeal to the Chinese government to guarantee the detainees “fair proceedings before an independent and impartial tribunal, in accordance with articles 9, 10 and 11 of the Universal Declaration of Human Rights.”
The International Campaign for Tibet welcomed the UN Special Rapporteurs’ initiative. “The cases represent many Tibetans who are persecuted for criticizing government policies, for their civic commitment, their religious beliefs, and for practicing their culture. The detainees must be given access to legal counsel, their families must be allowed to visit them in detention and they must be provided with adequate medical care” said ICT Executive Director Kai Mueller. grz
Civil Society
Human Rights
Tibet
United Nations
Profile
Fu Zhenghua – the hunter becomes the prey
Picture from better times: Fu Zhenghua as China’s Minister of Justice in Beijing in 2019
Fu Zhenghua was considered the most dangerous hunter in Chinese law enforcement and a close ally of President Xi Jinping. It was Fu who cornered shady bar owners with his special investigations and brought down China’s most powerful officials. But all that is in the past; now, Fu Zhenghua himself has been busted. On Thursday, Chinese state television CCTV succinctly reported that China’s Supreme People’s Procuratorate has decided to arrest Fu Zhenghua on suspicion of accepting bribes and bending the law for personal gain. It is the abrupt end of a stellar career.
Fu Zhenghua (傅政华) was born in 1955 in Luanzhou, in the northeastern province of Hebei. From an early age, Fu knows what he wants – and more importantly, how to get it: Just a few months after his 18th birthday, he joins the Chinese Communist Party. He is now one of more than 80 million CP members. They all know: If you want to be a civil servant, you have to join the largest and arguably the most powerful Party in the world. And so it is not surprising that only about five percent of the adult population actually make it into the Party. Fu manages it early. The foundation for a stellar career is set.
After graduating from Beijing Union University Law School 北京联合大学, Fu moves to the Beijing Public Security Bureau. He holds various positions there, persistently rising through the ranks until he is finally appointed director of the Chinese capital’s public security bureau in February 2010.
Fu steps into the spotlight
This is Fu’s first time in the spotlight. Only a few months in office, the city’s newly appointed chief of police immediately takes action against several owners of trendy luxury nightclubs, even though these establishments are all said to have influential ties to politics. But Fu’s plan pays off: His determination to also interfere with the business interests of powerful families earns him praise in the state media – and the trust of the political leadership.
It is Xi Jinping himself who, less than three years later, puts him in charge of the corruption investigation against Zhou Yongkang. At the time, Zhou was described by the media as “China’s security czar”; he was minister of public security and a member of the Standing Committee of the Politburo of the Chinese Communist Party. It doesn’t get much higher than that in the CP.
Victory over the former security czar
And Fu also masters this task to the satisfaction of the political leadership. In 2015, once powerful and influential Zhou is sentenced to life for corruption and abuse of power. He is the highest party official to be toppled as part of Xi Jinping’s anti-corruption campaign.
But Fu not only takes on corrupt elites. As deputy minister of public security, he ordered a sweeping crackdown on undesirable opinion-makers on the Chinese social media site Weibo in 2013. In 2015, he is responsible for a nationwide crackdown on human rights lawyers and activists. In addition, he heads the Central Leading Group on Dealing with Heretical Religions (中央防范和处理邪教问题领导小组办公室).
Unofficially, the department is known only as “Bureau 610” after its founding date of June 10, 1992. Originally founded to fight the Falun Gong organization, Bureau 610 now targets a number of groups deemed “heretical” or “harmful” by the Communist Party. In March 2018, Fu eventually even became minister of justice – until 2020.
Fu’s career is a reflection of politics
Then things got quiet around Fu Zhenghua at first, but that turned out to be the calm before the storm. In October, an investigation was launched against him for disciplinary violations (China.Table reported). Yesterday, on Thursday, the arrest followed.
The exact reasons for Fu’s fall from grace are not known. Officially, it is vaguely said that he accepted bribes and bent the law. And so Fu’s career must be seen in the larger political context: Fu is said to have once described his actions as an “iron fist” – so his rise exemplified the increasingly aggressive approach of the political leadership toward dissidents.
Now, the 20th party congress is set for this fall, including a major shake-up of the Party leadership. Moreover, Xi wants to remain in power for a third term – after abolishing term limits in 2018. Accordingly, tension within the leadership appears to be high. Officials in China’s state security apparatus have been urged to “turn the blade inward and scrape the poison from the bone” and expose “people with two faces” who are disloyal to the party.
And so Fu’s fall – like his rise – fits into the current political climate: Even high-ranking politicians are not safe from a deep fall (China.Table reported). Those who become too powerful face termination. Past achievements then become irrelevant. Michael Radunski
Chinese Communist Party
Domestic policy of the CP China
Society
Xi Jinping
Executive Moves
Dr. Wiebke Rabe has been an assistant professor at the Department of China Studies at Xi’an Jiaotong-Liverpool University in Suzhou since April. Previously, the researcher worked at the Institute of China Studies at the Free University of Berlin. Rabe’s research includes the digital integration of Chinese megacities.
Norbert Duetsch has been appointed Key Account Manager China & Oversea Offices by Volkswagen AG. Duetsch previously served as Manager and Senior Expert at Porsche Consulting.
Dessert
First trip on new rails: This proud train sets off from the oasis city of Dunhuang in western China toward Thailand’s capital Bangkok. It is the maiden voyage on the new Gansu-Laos line.
Oil companies show interest in Shell’s Russia project
UnionPay refuses cooperation with Sberbank
UN Human Rights Council investigates missing Tibetans
Profile: Fu Zhenghua – infamous security chief arrested
Dear reader,
Europeans who live in China, especially as employees of a large company, generally had a carefree life. The disadvantages of life in China were usually far away. Sometimes, the lack of the rule of law was a factor on a business level. But in private, life between meeting rooms, foreign schools, Starbucks and gyms was mostly pleasant.
The lockdown in Shanghai has changed that. The harsh measures of the government shocked many expats. Although there have been other drastic events in China’s big cities before, hardly anyone remembers them due to the rapid generational change of foreigners.
When Xi Jinping says that perseverance will lead to victory over the virus, he has a Chinese population in mind that the Party regularly inflicts hardships on. China’s politics sometimes moves with destructive power that crushes individuals on the sidelines. This is then considered collateral damage for the greater good. The ability to “eat bitter” 吃苦 is therefore vital for survival in China. Europeans and US-Americans never had to experience such things in their lives before. In today’s issue, Marcel Grzanna analyzes how the trauma of Shanghai affects foreigners.
Our second analysis looks at the US attempt to deal with the chip shortage. They courted South Korea to join a semiconductor alliance that would have been at least partly aimed at China. But Samsung country turned Joe Biden down, writes Frank Sieren. After all, China is a much larger and more important market.
Fu Zhenghua was officially arrested on Thursday. He is a real tiger – that is, a senior cadre who has been targeted by anti-corruption investigators. Fu is even a royal tiger: He was minister of justice and head of the intelligence service. Michael Radunski shows how closely Fu Zhenghua’s rise and fall are linked to the political course in the country.
Your Finn Mayer-Kuckuk
Feature
First-hand experience with dictatorship
Shanghai: A security guard oversees compliance with the curfew
In less than three weeks, the perception of China of 19-year-old Lisa from Muenster has changed dramatically. “I have to completely revise my opinion. I always thought the criticism of this political system was completely exaggerated. Now I’m appalled at what it actually means to live in a dictatorship,” says the young woman, whose Chinese parents had already migrated from Shanghai to Germany decades ago to escape the authoritarian politics of the People’s Republic.
Lisa grew up in Germany with freedom of expression and under the rule of law. Yet she never really took her family’s warnings about the ruthlessness of the Chinese leadership seriously. That is one reason why she went to Shanghai a few months ago in good spirits to brush up on her Mandarin.
When the lockdown approached in late March, she decided to flee to the Chinese resort island of Hainan. However, this did not save her from a positive Covid test. For more than two weeks now, Lisa has to live in quarantine at a hospital in the provincial capital of Sanya. “I feel completely helpless here, exposed to the arbitrariness of authorities and without privacy,” she says in an interview with China.Table. She has made the decision to leave the homeland of her parents and grandparents as soon as possible and not to live in China in the future, she says.
No escape: quarantine center in Shanghai
The unquestioning implementation of Covid regulations in China sends many foreigners into a state of shock. For the first time during their stay in China, they feel the loss of their own sovereignty vis-à-vis the state. Suddenly, the dictatorship is very close to the privileged guests from democratic countries. “As a foreigner, you live in the bubble of a subculture here, where you usually don’t notice the nature of the system and the consequences at all,” Lisa says.
Lockdown ‘chaotic, unstructured, and illogical’
This is not the first time in China’s recent history that romantic glorification of the People’s Republic by foreign locals has been hit hard by reality. The Tiananmen Square massacre in June 1989 marked a dramatic turning point. And the handling of the outbreak of the Covid precursor Sars in 2002 also showed numerous foreigners the dark side of a power monopoly in the hands of a single party.
But compared to then, China’s role in the world has changed drastically. Some see the country’s rise to become the second-largest economy as justification that the authoritarian system excludes its citizens from political participation. Twenty years after China’s accession to the World Trade Organization and the hosting of two Olympic Games, many guests in the country cannot fathom that the CP dictatorship no longer values its international reputation when it sees its own interests at risk.
The total dependence on the authorities and the feeling of helplessness also surprised Ralf Hayda. “On the one hand, I am shocked by the ruthlessness of the authorities towards the individual. On the other hand, it leaves me speechless how chaotic, unstructured and illogical the lockdown and the isolation of those who test positive are carried out,” says the 48-year-old, who has lived in Shanghai for almost three years. “What we experience here defies words. The left hand doesn’t know what the right hand is doing. No one wants to be responsible for anything, and no one makes any independent decisions here in the interest of the citizens,” Hayda says.
The lack of transparency troubles foreigners
The Berlin native admits that the situation leaves him with a sense of dread. “There is no transparency at all. At any time, there can be a knock at your apartment door and someone wants to ship you off to a quarantine camp,” he told China.Table. Just two days later, he was indeed taken to a hotel for isolation. The reason was a positive test that was already two weeks old.
A nine-minute phone call between him and a Chinese employee of a neighborhood committee about the matter gained attention on social media earlier this week. In it, Hayda complains about the local Covid policy. The comment sections include admiration for the open complaint, but also much criticism of the “foreigner” who only dares to do so because he does not have to expect drastic punishments like Chinese citizens. Hayda has since decided to leave China as soon as possible.
Janine Jakob experiences a similar impulse. “I no longer feel free in China,” says the 29-year-old. For several days, she has been subjected to a form of humiliation and intimidation that has been hard on her. After testing positive earlier this month, she, like Hayda, was not quarantined for some unknown reason. Instead, she has since isolated herself in her apartment in Shanghai’s Jing’an district.
However, after a series of negative antigen tests over several days, she had left her apartment on her own accord to line up in the courtyard of her apartment complex for a PCR test. A negative PCR test provides her with the only chance to at least step outside the front door of her apartment to take down the trash, for example. Otherwise, she is forbidden to do that as well.
What followed were accusations and finger-pointing by neighbors. They feared further infections in the apartment complex and potential weeks of isolation for everyone. Local police called Jacob and accused her of breaking Covid rules. “I apologized to neighbors and police and said I didn’t mean to break the rules,” she says.
‘Was I too naive? Yes’
Her Chinese roommate now keeps a close eye on the German and orders her via cell phone what to do and what not to do. Jakob had to watch helplessly as her roommate threw away most of her vegetables. She is only allowed to use the bathroom if her roommate gives her the okay via WeChat. “I can’t trust that woman anymore. I feel like a little girl being punished by her mother,” Jakob says. To make matters worse, a friend scared her that she could face three years in prison for violating quarantine rules.
“I try to see the positive side,” says Jakob, who started her own business as a personality coach and now applies all the mental techniques she usually teaches to her clients. She has always seen a future for her in China, she says. But after the experiences of the past few weeks, she now questions this vision. “Was I too naive?” she says. And sends the answer right after: “Yes.”
After the Tiananmen massacre and the Sars outbreak, the “aha” effect among foreigners did not have a broad lasting impact on the perception of the CP dictatorship outside China. However, the current close encounter with the authoritarian state overlaps with concerns about overdependence on China. Two or three decades ago, things were completely different. Back then, the desire for close cooperation was dominant. Moreover, the belief that China could change through trade was still common.
Civil Society
Health
Human Rights
South Korea turns down Biden’s semiconductor alliance
The plan for a semiconductor alliance by the United States between South Korea, Japan and Taiwan has been turned down. Out of fear of angering Beijing, the Koreans rejected the American proposal as “not fully acceptable,” according to South Korean media reports. The background: South Korean chip giants like Samsung and SK Hynix operate key factories in mainland China and fear sanctions should they cooperate too closely with the US industry.
The supply of microchips is currently one of the biggest bottlenecks for the economy and the main reason for the shortage of many high-value products. All major economies currently try to secure their supply of semiconductor components. The EU is also currently trying to forge a semiconductor alliance. One success of German business policy is that Intel decided to invest in the city of Magdeburg. The United States now wants to forge an alliance to prevent China from constantly snatching up its share of priceless semiconductors.
But that is precisely South Korea’s reason for refusing the American pitch. “Cooperation with the United States is the top priority of course, and yet the biggest market is also of paramount importance,” Business Korea quotes an industry insider as saying. He refers to China. Semiconductors represent Korea’s biggest export in trade with its big neighbor.
In 2021, the country achieved a trade surplus of $26 billion in chip trade with China, according to South Korean customs trade statistics. In 2020, the figure was $20 billion. China is already the world’s largest chip market, according to the Semiconductor Industry Association (SIA), with $192 billion in sales last year and a 27 percent growth. China is also South Korea’s biggest trading partner by a wide margin in other areas. It exports around twice as much to China as to the USA.
The South Korean Samsung Group has therefore already invested large sums in the People’s Republic. It has been operating a factory for advanced flash memory in Xi’an in the northwestern province of Shaanxi since February 2021. The $25 billion complex is the only Samsung factory located abroad and houses two wafer production lines and a packaging and testing facility, which accounts for more than 40 percent of the group’s total production capacity for NAND flash memory.
Samsung benefits from the high demand for semiconductors fueled by the global shortage. The South Korean company is the global market leader for flash memory chips. In the fourth quarter, Samsung’s operating profit climbed 52 percent to the equivalent of about $11 billion. This is the best result in four years, the company reported. Revenue simultaneously increased by almost a quarter to €56 billion – also a record figure.
Semiconductors: Who will be the first to become independent?
Meanwhile, the USA tries to become independent of Chinese products and, apart from cooperations with countries like South Korea, also focuses on the expansion of its own industry. The Biden administration, for example, wants to invest $52 billion in domestic semiconductor production and research with the America Competes Act. South Korea also plans to introduce legislation to trigger investments in chip manufacturing of $450 billion over ten years. Japan approved a €5.71 billion investment package in winter 2021 to strengthen its semiconductor sector. Japan’s share of global chip production was still over 50 percent in the late 1980s. Now it is only 10 percent.
According to latest market data from IC Insights, the US continues to be the dominant chip power. In 2021, US companies held a global market share of 54 percent. It was followed by South Korean companies with 22 percent and Taiwanese companies with 9 percent of the market. Europe as a whole came in at 6 percent, and China at 4 percent. However, the market research company calculates market shares based on where headquarters are located and not on where production is actually based. If you look at market shares based on actual production, the US only has a 12 percent share. In 1990, it was still around 40 percent. The German Marshall Fund fears that the position of the United States “erodes as strategic rivals advance efforts to develop their own domestic industry.”
China’s state-run Global Times believes that US sanctions against Huawei and Chinese chip maker Semiconductor Manufacturing International Corp (SMIC) are partly to blame for the global semiconductor shortage. “The US’ relentless political interference has overwhelmed global businesses,” the newspaper writes. The US attempt to exclude mainland China from the global chip supply chain is “unrealistic and counterproductive”. The result would be an even worse shortage.
However, China wants to do everything in its power to build up a powerful chip industry, preferably without having to rely on foreign suppliers. Beijing is not necessarily seeking to form alliances abroad, but is pooling the expertise of various tech companies at home. For example, Chinese carmaker SAIC Motor recently announced that it would enter the auto chip sector with tech company Horizon Robotics (China.Table reported).
Accusations of industrial espionage
So far, China’s companies have not been able to produce state-of-the-art chips with dimensions of just a few nanometers themselves. Nevertheless, the People’s Republic has set itself the goal of covering 70 percent of its semiconductor demand through domestic manufacturers by 2025. Companies like Oppo and Huawei want to be at the forefront with their own chips. China currently covers less than 20 percent of its semiconductor demand itself (China.Table reported).
However, things are clearly not yet working entirely without help from overseas. Taiwan’s government, for example, accuses Chinese companies of aggressively poaching Taiwan’s high-tech talent and engaging in technology theft.
Taiwan’s Ministry of Justice has already launched investigations against 60 Chinese nationals accused of, among other things, stealing corporate secrets. The list of companies under investigation reads like an industry index. It includes companies like Vimicro, GLC Semiconductor, Beijing Yinxing Technology and Analogix Semiconductor.
Chips
Geopolitics
Semiconductor
South Korea
Technology
USA
News
New EU Ambassador to China
Spanish diplomat Jorge Toledo Albiñana is to become the European Union’s new ambassador to China, EU circles told China.Table on Thursday. Toledo is currently Spain’s ambassador to Japan. The 57-year-old would succeed France’s Nicolas Chapuis as EU ambassador to Beijing, who is expected to step down from his post in the fall. The European External Action Service (EEAS) did not yet confirm the change.
Toledo is the second high-ranking European representative who transfers from Tokyo to China: Germany’s new ambassador to Beijing, Patricia Flor, also worked in the Japanese capital before her assignment in the People’s Republic (China.Table reported). Toledo was born in the German city of Ludwigshafen and has already served in various diplomatic positions for Spain and the EU. ari
EEAS
EU
Geopolitics
Japan
US Deputy Secretary warns against support for Moscow
During her visit to Brussels, US Deputy Secretary of State Wendy Sherman again warned China against providing “material support” to Russia. Beijing has seen what the West has imposed in terms of sanctions and export controls, Sherman said at an online event hosted by Brussels-based think tank Friends of Europe. “That should give them [the Chinese] some idea of the menu from which we can choose, if they were to provide material support.” Sherman did not specify whether this would include arms shipments or even financial aid. “We don’t want a conflict,” Sherman stressed after a meeting with European External Action Service (EEAS) Secretary-General Stefano Sannino on Thursday.
The US still hopes for cooperation, the Secretary of State said. However, that has limits, according to Sherman: “I think President Xi has made a decision about what the People’s Republic should be in the world. And that’s a very different view than the one we have.” Sherman arrived in the Belgian capital to meet with representatives of several organizations. In addition to EEAS, that includes NATO. On Friday, Sherman will attend the third EU-US dialogue on China. The Indo-Pacific is also expected to be on the agenda. ari
Geopolitics
Russia
Ukraine
USA
Shell wants to get rid of stake in Russian LNG plant
Energy giant Shell reportedly is in talks with Chinese companies to sell its stake in a major Russian gas project. The London-listed company is speaking with Chinese state oil companies CNOOC, CNPC and Sinopec about its 27.5 percent stake in the Sakhalin II liquefied natural gas venture, British newspaper The Telegraph reported on Thursday. According to the report, talks centered on the possible sale of Shell’s stake to one, two or all three companies. However, Shell is said to be open to potential buyers outside China as well.
Sakhalin II is controlled and operated by the Russian gas giant Gazprom. The project to produce natural gas and oil is located north of the Russian Pacific island of Sakhalin in the Sea of Okhotsk. Other stakeholders include the Japanese companies Mitsui & Co and Mitsubishi. Shell did not comment on the reports for the time being. According to Reuters, the Chinese oil companies also did not comment. Shell had announced in February that it would shut down its operations in Russia, including the Sakhalin II LNG plant, after sanctions were tightened against Moscow over the invasion of Ukraine. rtr/ari
Energy
Geopolitics
Raw materials
Russia
UnionPay refrains from involvement in Russia
Chinese financial service provider UnionPay is not taking over services of Mastercard and Visa in Russia, which have withdrawn from the country in response to the sanctions. As a result, Russian customers are currently unable to use credit cards. They have to continue to rely on the domestic debit card “Mir,” which only works within Russia.
Russia’s banks had hoped to draw on UnionPay and its well-established international network. China had already offered Russia to expand the use of UnionPay in the past. So far, however, the offer has been met with little interest, with only one percent of transactions at most going through the Chinese service provider.
Neither UnionPay nor its partner Sberbank gave an official explanation for the Chinese company’s withdrawal. However, it is safe to assume that UnionPay does not want to get caught in the crossfire of secondary sanctions imposed by the US and the EU. The latter is already talking about sanctioning companies that help Russia undermine the sanctions. fin
Finance
Geopolitics
Russia
USA
UN investigates missing Tibetans
The disappearance of three Tibetans is currently a matter of concern for the UN Human Rights Council. In a letter to the representative of the People’s Republic of China, the Special Rapporteurs of the Swiss-based body request information on the whereabouts and health status of the writer Lobsang Lhundup, singer Lhundrup Dhrakpa and teacher Rinchen Kyi. All three had been detained between 2019 and 2021. Lhundrup and Dhraka were sentenced to several years in prison. Kyi has been missing without an official conviction since August 2021.
The UN experts expressed concern that the intellectuals had been arbitrarily detained for exercising their freedom of speech, artistic freedom and participation in cultural life. According to the Special Rapporteurs, the detainees were committed to preserving the Tibetan language and culture. In their letter, the UN Special Rapporteurs also appeal to the Chinese government to guarantee the detainees “fair proceedings before an independent and impartial tribunal, in accordance with articles 9, 10 and 11 of the Universal Declaration of Human Rights.”
The International Campaign for Tibet welcomed the UN Special Rapporteurs’ initiative. “The cases represent many Tibetans who are persecuted for criticizing government policies, for their civic commitment, their religious beliefs, and for practicing their culture. The detainees must be given access to legal counsel, their families must be allowed to visit them in detention and they must be provided with adequate medical care” said ICT Executive Director Kai Mueller. grz
Civil Society
Human Rights
Tibet
United Nations
Profile
Fu Zhenghua – the hunter becomes the prey
Picture from better times: Fu Zhenghua as China’s Minister of Justice in Beijing in 2019
Fu Zhenghua was considered the most dangerous hunter in Chinese law enforcement and a close ally of President Xi Jinping. It was Fu who cornered shady bar owners with his special investigations and brought down China’s most powerful officials. But all that is in the past; now, Fu Zhenghua himself has been busted. On Thursday, Chinese state television CCTV succinctly reported that China’s Supreme People’s Procuratorate has decided to arrest Fu Zhenghua on suspicion of accepting bribes and bending the law for personal gain. It is the abrupt end of a stellar career.
Fu Zhenghua (傅政华) was born in 1955 in Luanzhou, in the northeastern province of Hebei. From an early age, Fu knows what he wants – and more importantly, how to get it: Just a few months after his 18th birthday, he joins the Chinese Communist Party. He is now one of more than 80 million CP members. They all know: If you want to be a civil servant, you have to join the largest and arguably the most powerful Party in the world. And so it is not surprising that only about five percent of the adult population actually make it into the Party. Fu manages it early. The foundation for a stellar career is set.
After graduating from Beijing Union University Law School 北京联合大学, Fu moves to the Beijing Public Security Bureau. He holds various positions there, persistently rising through the ranks until he is finally appointed director of the Chinese capital’s public security bureau in February 2010.
Fu steps into the spotlight
This is Fu’s first time in the spotlight. Only a few months in office, the city’s newly appointed chief of police immediately takes action against several owners of trendy luxury nightclubs, even though these establishments are all said to have influential ties to politics. But Fu’s plan pays off: His determination to also interfere with the business interests of powerful families earns him praise in the state media – and the trust of the political leadership.
It is Xi Jinping himself who, less than three years later, puts him in charge of the corruption investigation against Zhou Yongkang. At the time, Zhou was described by the media as “China’s security czar”; he was minister of public security and a member of the Standing Committee of the Politburo of the Chinese Communist Party. It doesn’t get much higher than that in the CP.
Victory over the former security czar
And Fu also masters this task to the satisfaction of the political leadership. In 2015, once powerful and influential Zhou is sentenced to life for corruption and abuse of power. He is the highest party official to be toppled as part of Xi Jinping’s anti-corruption campaign.
But Fu not only takes on corrupt elites. As deputy minister of public security, he ordered a sweeping crackdown on undesirable opinion-makers on the Chinese social media site Weibo in 2013. In 2015, he is responsible for a nationwide crackdown on human rights lawyers and activists. In addition, he heads the Central Leading Group on Dealing with Heretical Religions (中央防范和处理邪教问题领导小组办公室).
Unofficially, the department is known only as “Bureau 610” after its founding date of June 10, 1992. Originally founded to fight the Falun Gong organization, Bureau 610 now targets a number of groups deemed “heretical” or “harmful” by the Communist Party. In March 2018, Fu eventually even became minister of justice – until 2020.
Fu’s career is a reflection of politics
Then things got quiet around Fu Zhenghua at first, but that turned out to be the calm before the storm. In October, an investigation was launched against him for disciplinary violations (China.Table reported). Yesterday, on Thursday, the arrest followed.
The exact reasons for Fu’s fall from grace are not known. Officially, it is vaguely said that he accepted bribes and bent the law. And so Fu’s career must be seen in the larger political context: Fu is said to have once described his actions as an “iron fist” – so his rise exemplified the increasingly aggressive approach of the political leadership toward dissidents.
Now, the 20th party congress is set for this fall, including a major shake-up of the Party leadership. Moreover, Xi wants to remain in power for a third term – after abolishing term limits in 2018. Accordingly, tension within the leadership appears to be high. Officials in China’s state security apparatus have been urged to “turn the blade inward and scrape the poison from the bone” and expose “people with two faces” who are disloyal to the party.
And so Fu’s fall – like his rise – fits into the current political climate: Even high-ranking politicians are not safe from a deep fall (China.Table reported). Those who become too powerful face termination. Past achievements then become irrelevant. Michael Radunski
Chinese Communist Party
Domestic policy of the CP China
Society
Xi Jinping
Executive Moves
Dr. Wiebke Rabe has been an assistant professor at the Department of China Studies at Xi’an Jiaotong-Liverpool University in Suzhou since April. Previously, the researcher worked at the Institute of China Studies at the Free University of Berlin. Rabe’s research includes the digital integration of Chinese megacities.
Norbert Duetsch has been appointed Key Account Manager China & Oversea Offices by Volkswagen AG. Duetsch previously served as Manager and Senior Expert at Porsche Consulting.
Dessert
First trip on new rails: This proud train sets off from the oasis city of Dunhuang in western China toward Thailand’s capital Bangkok. It is the maiden voyage on the new Gansu-Laos line.
