Table.Briefing: China

Travel wave remains absent + Beijing’s diplomacy offensive

Dear reader,

The Chinese do not seem to have missed the Eiffel Tower that much. Although the population is once again allowed to travel freely, only a meager five percent of the pre-Covid tourist numbers visited France’s capital in the first two months of this year.

This is painful because tourists from China bring in a lot of money: In 2019, they spent 250 billion US dollars on international travel. Amelie Richter analyzes the reasons for the lack of tourists. She also reports on the most popular travel dreams in the People’s Republic and how Russia, of all places, wants to become an attractive alternative to Europe.

After seven years of diplomatic silence, Iran and Saudi Arabia have now resumed bilateral relations – a negotiation success on Beijing’s part. The People’s Republic has been active in the region for a long time and forged many strategic partnerships and built trust in the region. As a result, it has now become a reputable diplomatic player in the Middle East. Frank Sieren analyzes how power structures are changing.

Today, China Perspective takes you on a tour of Beijing. How is the former red-light district of the Eight Great Hutongs connected to Germany, where exactly was Tank Man standing in the iconic photo and why are monks in a Beijing temple might be secretly getting rich? Find out.

Your
Julia Fiedler
Image of Julia  Fiedler

Feature

Demands of Chinese tourists have changed

Blast from the past: A Chinese tourist group in Paris in 2019.

The first spring sun glistens on the Seine – and along its banks, there is something that has not been seen in this form since the pandemic: Tour buses are parked one after the other. In front of the pier for sightseeing boats, Chinese tourist groups are waiting. It seems they are back: The travelers from the People’s Republic.

But it is not what it seems: In the first two months of the year, Paris airports recorded only around 3,200 arrivals from China, as the city’s tourism office told Table.Media. This is around 95 percent less than in 2019, before the pandemic. Even in March, there was still no wave of travelers, explained the Paris tourism office.

While China has announced that it will also make it easier to obtain tourist visas, the other way around is still difficult. Until now, Germany, for example, has only issued business visas, but tourists are not yet able to visit the country again, travel industry sources confirm. A reason for this is that the German consulates in China are understaffed to process large numbers of visa applications.

Tourists’ demands have changed

According to the German Foreign Office, visa issuance is reciprocal. With China’s easing of restrictions on German tourists who wish to travel to China, the German side will also grant tourist visas to Chinese again. More than 10,000 Schengen visas have already been issued in China since the beginning of the year. The application centers in Canton, Shanghai, Beijing and Shenyang have already reopened. The center in Chengdu is also expected to open on Thursday. However, the number of appointments available before the pandemic has not yet been reached.

Travel agencies hope that the tourism wave from China will gain significant momentum after the Easter holidays. However, in order to remain attractive as a travel destination for the Chinese market, Europe will have to try a little harder than before, says Wolfgang Georg Arlt, head of the China Outbound Tourism Research Institute (COTRI), which examines travel trends to and from the People’s Republic. “The demands of Chinese tourists have changed in the times of the pandemic,” Arlt explains. Group tour packages – like “five countries in six days” – are at best only an option for visitors who have never been to Europe before. But even here, there are higher demands for sustainability or “special experiences” nowadays.

Outdoor vacation gains popularity

The photo in front of the Eiffel Tower, which everyone has, is no longer in demand, says Arlt. Chinese tourists would rather visit smaller cities and the countryside and really explore them. The tourism expert sees this as a great opportunity for places that were previously not at the top of the wish list of travel destinations. Creative concepts are needed, he says.

“Instead of going shopping, the money is being spent on activities.” Fine dining, for example, is currently very much in vogue, he says. “There are a lot of foodies who want to taste local delicacies above all else,” Arlt says. So in France, the dining-and-spa combo in the Champagne region could soon be more interesting as an event than the capital with its world-famous sights.

Outdoor activities are also gaining in popularity, explains Arlt. However, ordinary camping is less in demand. “Glamping“, i.e. camping with glamour, is the order of the day. “And Chinese tourists also like to be entertained at the campsite in the evening. A bit like in a resort.”

To top it off, Europe has also received big competition from the domestic market in China. “Since the pandemic, it is socially more accepted not to leave the country for vacation and spend a lot of money in China,” says Arlt.

Chinese tourists this week in Moscow.

Flights remain very expensive

However, how many tourists will arrive from the People’s Republic this year remains uncertain. Olivier Ponti of the market research institute ForwardKeys remains cautious: “There’s still a long way to go to full recovery,” Ponti told Reuters. This is because there are still a number of hurdles. For example, a staff shortage at the airlines and the approval process for flight routes are slowing down the expansion of flight capacities. Chinese citizens are waiting a long time for passports. Flights are also still expensive, explains Ray Chen, manager of the Chinese online travel portal Trip.com.

According to Ralf Ostendorf of the Berlin tourism agency VisitBerlin, there is currently one flight a week to China from the German capital. There had been negotiations on expanding air traffic between Germany and China before the pandemic, but these were interrupted because of Covid, he said. “It is important that these negotiations are resumed,” Ostendorf stressed. This did not happen, so far, because of political tensions caused by Russia’s war against Ukraine. “For tourism and the economy to function again, these direct flights are important for Berlin and Germany.”

Trip.com expects a rapid increase in international flights from China in the coming months. From the current 15 to 20 percent of pre-pandemic levels, capacity will increase to 50 percent by the end of June, it expects. People want to travel, demand is high.

Russian travel market adapts

Chinese tourists, who are known to be big spenders, remain an important economic factor. “The return of Chinese tourists will be felt here in Berlin, in all European countries and throughout the world,” said the Secretary-General of the World Tourism Organization (UNWTO), Zurab Pololikashvili, at the ITB industry trade show in early March. For example, vacationers from the People’s Republic had spent more than 250 billion US dollars on international travel in 2019, the year before the pandemic.

A country that is relying more on Chinese tourists this year than before: Russia. According to the Association of Tour Operators in Russia, the number of foreign tourists collapsed by 96 percent after Moscow invaded Ukraine. Russian travel agencies therefore have high hopes that Chinese tourists could be a permanent solution, Russian-language Current Time TV reported.

According to the report, Russia’s tourism industry is shifting its focus to the Chinese market: Major hotel chains are offering basic Mandarin training for their staff and adapting their breakfast buffets to Chinese preferences. With Reuters

  • Tourism

Beijing wants to play neutral role in the Middle East

Foreign Policy Czar Wang Yi with Musaad bin Mohammed Al-Aiban (l.), Minister of State of Saudi Arabia, and Admiral Ali Shamkhani (r.), Secretary of Iran’s Supreme National Security Council.

For the first time after years of conflict, the foreign ministers of Saudi Arabia and Iran spoke on the phone again on Thursday. At the beginning of the Muslim fasting month of Ramadan, Hussein Amirabdollahian and Faisal bin Farhan Al Saud exchanged greetings, the state media of both countries reported. During the conversation, they reportedly also discussed a planned ministerial meeting. The fact that the two countries are re-establishing bilateral relations after seven years of diplomatic standstill is a negotiating success for Beijing, one that is changing the balance of power in the Middle East.

The United States certainly continues to play an important role. And Russia also has close ties to the region’s rulers. But now Beijing is also joining the fray. Iran’s military adviser Major General Yahya Rahim Safavi even expresses the hope that “the post-American era in the Persian Gulf region has begun.” He probably goes too far with this assessment. The US television station CNN describes the developments more aptly: “China has shattered the assumption of US dominance in the Middle East.”

The US Wall Street Journal magazine calls it “a new chapter in competition between Beijing and Washington” China’s success undermines “the US contention that a US-led rules based order is the only responsible choice governments can make, and the only way to advance security,” Jon Alterman, an expert at the Center for Strategic and International Studies (CSIS) in Washington, summarizes the process.

The deal shows that Saudi Arabia “don’t trust Washington to have their back,” Mark Dubowitz, executive director of the Washington-based Foundation for Defense of Democracies (FDD), also emphasizes. As a result, “China is becoming the major-domo of Middle Eastern power politics”.

Riyadh now abstains in the UN

At the same time, however, Riyadh is leaving the door open to its biggest arms supplier: Just hours before the Saudi-Iran agreement was announced, Saudi Arabia had even floated the United States as a broker for relations with Israel. The Saudi proposal included security guarantees from the United States, help in developing a civilian nuclear program, and lighter restrictions on US arms deals with Riyadh.

But no longer at any cost, as US President Joe Biden already found out. After his meeting with Crown Prince Mohammed bin Salman in mid-2022, Saudi Arabia-dominated OPEC+ cut oil production. Biden, on the other hand, wanted OPEC to produce more and thus lower oil prices. This is how he wanted to take the pressure off the US economy. Instead, the development played into Russia’s President Vladimir Putin’s hands.

Biden’s second setback was when Riyadh abstained from the recent UN resolution against Putin’s Ukraine war, as did China and India. The Saudis have not forgotten that the US “hesitated” after the 2019 unmanned aerial attacks on Saudi Arabia against oil tankers and oil facilities, explained Eyal Zisser, Vice Rector of Tel Aviv University.

Furthermore, the US State Department removed the Iranian-backed Houthi movement from the US list of foreign terrorist organizations in 2021. For years before the ceasefire in April 2022, they fired missiles and suicide drones at Saudi Arabia.

China wants to play more neutral role in the region

But Beijing decided long before this development to play a more neutral role in the region. Beijing claims – for whatever reason – that China has no political interests in the region. Yet 40 percent of its gas and oil imports come from the region. The People’s Republic had very close ties with Iran. The United States has regarded Iran as hostile since the 1979 raid on the US Embassy in Tehran and the subsequent 444-day hostage situation involving more than 50 diplomats.

The Chinese already managed to defuse this confrontation in 2015 when, together with the Europeans, they convinced then US President Barack Obama to lift sanctions against Iran. At the time, German Foreign Minister and current German President Frank-Walter Steinmeier and his Chinese counterpart at the time, Wang Yi, played a key role. Diplomacy czar Wang Yi has now also negotiated the agreement between Saudi Arabia and Iran.

After the joint European-Chinese success, China’s diplomats then set out alone. One important step: The strategic partnership with Saudi Arabia in 2016, following Algeria, Egypt and Qatar (2014), Iraq (2015), Morocco and the United Arab Emirates (2016). Then in 2018, Oman and Kuwait.

In December 2022, China and Arab countries decided to cooperate in the strategically important satellite navigation, as a foundation for future cooperation in the space sector. As of January 2023, 20 Arab countries have signed cooperation agreements under the Belt and Road Initiative (BRI). In late 2022, during Xi Jinping’s visit, relations between Riyadh and Beijing were upgraded to a Comprehensive Strategic Cooperative Partnership.

Saudi Arabia could become part of the SCO

So trust in the region was now so great that China did not have to offer itself as a mediator between Iran and Saudi Arabia – instead, the Saudis requested Xi’s help in December 2022. China’s President then invited Iran’s President Ebrahim Raisi to Beijing in February and also agreed to closer economic ties.

After five days of intense negotiations, the breakthrough came on March 10. Chinese observers see Saudi Arabia’s rapprochement also as an indicator to Putin that Beijing is not dependent on his oil and gas. Saudi Arabia is China’s largest oil supplier and Putin’s biggest competitor. Now the chances for peace in Yemen, where Riyadh and Tehran have been waging a proxy war for eight years with more than 400,000 casualties already, are also rising: Tehran supports the Houthi rebels. Riyadh supports the government.

The Biden administration grudgingly welcomed the agreement, but immediately drew a new red line. It was okay as long as a deal did not involve “military and technological cooperation,” a senior US official told the portal Axios.

The question now is whether Saudi Arabia is still willing to accept such US demands. The admission of the Saudis to the Shanghai Cooperation Organization (SCO), which is already being discussed, could be a test of power. Its members include China, India, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan. So far, Iran has opposed the idea. This could now change.

  • Gas
  • Sanctions
  • Saudi Arabia

Events

March 27, 2023; 1:30 a.m. CET (March 28, 2023; 07:30 a.m. CST)
Harvard Fairbank Center, Lecture: Small Banks, Big Politics: The Cause and Consequences of Bank Proliferation in China More

March 28-31 2023; 6:00 p.m. CST
AHK Greater China, on site Shenzhen: Sino-German Economic Forum 德中(深圳)经济论坛 More

March 29, 2023; 6:00 p.m. CET (March 30, 2023; 12:00 a.m. CST)
Dezan Shira & Associates, Webinar: Decoding China’s 2023 Two Sessions: Takeaways for Businesses More

March 29, 2023; 6:00 p.m. CET (March 30, 2023; 12:00 a.m. CST)
Harvard Fairbank Center, Lecture: Challenges Confronting China’s Healthcare System Post-COVID: A conversation between Winnie Yip and William Hsiao More

March 30, 2023; 10:00 a.m. CET (4:00 p.m. CST)
Dezan Shira & Associates, Webinar: Seizing Opportunities in China’s Healthcare Industry: A Guide for Foreign Investors More

March 30, 2023; 10:00 a.m. CET (4:00 p.m. CST)
EU SME Centre, Webinar: About to Take Off: The Return of Chinese Outbound Tourism More

March 30, 2023; 09:15 a.m. CST
AHK Greater China, on site in Shanghai: GCC Knowledge Hub: 中国转让定价合规文档和非贸付汇 More

News

No TikTok ban planned in Germany

At a hearing before the US Congress, TikTok CEO Chew Shou Zi strongly denied accusations of espionage made against the Chinese app. All data from US users is stored on US servers and access to it is strictly monitored, the TikTok CEO stressed at Thursday’s hearing before the House Energy and Commerce Committee. TikTok’s recommendation algorithm, which selects videos for users, is also run by US software giant Oracle, Chew explained.

“We do not promote or remove content at the request of the Chinese government,” Chew said. He said TikTok has an obligation to users to keep the app “free from any manipulation by any government”. Committee Chairwoman Cathy Rogers set a sharp tone at the hearing. “TikTok is watching all of us,” the Republican said in her statement. She also called TikTok a “portal for drug traffickers.” Democratic Vice Chairman Frank Pallone called privacy assurances in the US inadequate.

Faeser: detect state influence early

According to German Interior Minister Nancy Faeser, there are no plans to ban TikTok in Germany. However, Faeser emphasized during a visit to Washington that it was necessary to raise awareness of the fact that TikTok is a company where “data can naturally flow out”. She added that great care is taken to ensure that state influence by China is detected as early as possible. “We are just coming out of a strong dependence on Russia in energy supply. We don’t want to create further dependencies,” Faeser said.

Due to the close links between TikTok, its parent company ByteDance, and the Chinese government, US and European security authorities, among others, are concerned that the People’s Republic is tapping into personal user data or misusing it to manipulate public opinion.

Several countries have banned government employees from using TikTok on their staff cell phones, including the US, Canada, and the UK. The ban also applies to employees of the EU Commission. The US would like to ban the app, but this is legally difficult – former US President Donald Trump already failed with an attempt during his term in office. However, a draft bill that could allow a ban is in the works. It is still unclear when Congress will vote on it. jul

Taiwan withdraws ambassador from Honduras

Taiwan has recalled its ambassador to Honduras after the Central American country’s foreign minister, Eduardo Enrique Reina, traveled to China. Reina plans to promote the establishment of diplomatic relations between Panama and Beijing, according to an official. To do so, Honduras would have to break off relations with Taiwan.

The Foreign Ministry in Taipei condemned the visit, saying Honduras ignored “Honduras ignored more than 80 years of friendship” when it sent its foreign minister to China. As a result, Taipei had decided to “immediately recall our ambassador in Honduras to express our strong dissatisfaction.”

Should Honduras sever relations with Taiwan, Taipei will be down to diplomatic relations with only 13 countries. Next week, Taiwan’s President Tsai Ing-wen leaves for a state visit to Central America, where she will visit Honduras’ neighboring countries Belize and Guatemala.

Honduras is heavily indebted

Foreign minister Reina said last week that Honduras was also making this decision because the country was “up to its neck” in financial difficulties. This included 600 million US dollars owed to Taiwan. Honduras, however, denied having demanded 2.5 billion US dollars in aid from Taiwan before making diplomatic steps toward China. Taiwan’s foreign minister, Joseph Wu, said the situation with Honduras was “not very good”. Honduras had allegedly demanded a high price. He did not directly confirm the 2.5 billion but said Taiwan would not engage in dollar diplomacy. rtr/jul

  • Honduras
  • Taiwan

USA currently sees no threat to Taiwan

The US government reports that it currently sees no imminent threat of a Chinese invasion of Taiwan. “I don’t certainly see any imminent threat”, said Air Force Under Secretary Frank Kendall on the sidelines of a military technology conference in Singapore on Thursday. He also expressed hope that it would never materialize. However, the US is prepared to defend the democratically governed island, he said.

China sees Taiwan as a breakaway province and seeks reunification. The Russian invasion of Ukraine has heightened fears that China might also resort to military means in the Taiwan conflict. rtr/jul

KfW loans for China under scrutiny

In light of geopolitical developments and shifts in China, the German government is currently deliberating on how to handle the promotional loan instrument of the Credit Institute for Reconstruction (KfW). A final decision has not yet been made, according to a response to a minor interpellation by the AfD parliamentary group in the Bundestag. The loans are under scrutiny in connection with Germany’s new China strategy.

The German government did not provide any information on the average interest rate agreed with China for KfW promotional loans since 2016, citing banking secrecy and contractual confidentiality obligations.

Classic bilateral development cooperation was already discontinued in 2009 due to China’s strong economic power. However, China still receives concessionary and government-backed loans from KfW. According to calculations by the German Federal Ministry for Economic Affairs and Climate Action, China was granted preferential loans amounting to just over three billion euros between 2013 and 2020; in 2021, KfW loans for the People’s Republic amounted to around 81 million euros, according to the Ministry of Development. Under OECD criteria, the People’s Republic is still classified as a developing country. jul

  • Loans

China Perspective

Tank Man, prostitutes, rich monks and Biden’s menu

China is finally open again for international tourism. Although it is now not Beijing’s best season, there could still be a few not-so-smoggy, not-so-windy days. Here are some suggestions on what to explore in China’s capital, or maybe where to stay away from.

1. The place where the Tank Man stood

On June 5, 1989, the second day after the military crushed the 50-day-long student movement, he was famously seen standing before a line of tanks, blocking their way and creating one of the most memorable images of the 20th century.

People are still not sure about his identity and what happened to him afterward. But with the photos and videos of him, it was not so hard to figure out where exactly he stood at that moment. It was on Chang An Avenue (Chang An means eternal peace. Tiananmen means Gate of Heavenly Peace), about 400 hundred meters from the eastern border of Tiananmen Square, and about 100 meters from the Grand Hotel (Gui Bin Lou 贵宾楼).

He was facing West, blocking tanks driving to the East. Almost all the photos and videos seen today were taken from a hotel standing next to the Grand Hotel, the Beijing Hotel, where quite some foreign journalists stayed.

2. Where a CCP co-founder groped a sex worker

The Eight Big Hutongs (八大胡同, Hutong means alley) was Beijing’s red-light district roughly from 1800 until Communists started to run the city in 1949. These alleys, located a few hundred meters to the southwest of Qian Men (前门), still exist. 

Like its counterparts in the rest of the world, these alleys also had connections to major political and social figures and events at the time.

In 1920, Chen Duxiu (1879-1942), then a professor at Peking University and an activist and major voice for communist thought, got involved in a physical fight in one of the brothels due to “jealousy, and scratched the private parts of a prostitute,” according to media reports of the time.  He was fired by the university for this. 

A year later, the Communist Party of China was founded and Chen, though absent from the party’s first congress, was elected its first general secretary because of its influence in the incipient communist movement in China. 

The Eight Big Hutongs also has a German connection through a courtesan, Sai Jinhua (赛金花1872-1936). Sai Jinhua, meaning “rivaling golden flowers”, is an alias for the profession. She started to be a prostitute at an early age before becoming a concubine of a diplomat, Hong Jun. When Hong was appointed as the Qing Dynasty’s envoy to Europe, his wife claimed to be ill and was unwilling to go with him. So Sai went as his spouse, in 1889. 

Hong died shortly after the couple returned to Beijing. Sai’s relationship with the Hong Family went sour and she picked up her old profession as a courtesan in two of the eight big Hutongs consecutively. Following the Boxers Rebellion in 1900, von Waldersee becoame the occupation army’s leader in the war between eight western countries and China, which ended in Beijing. He and Sai were reported to have reconnected and to have intimate encounters, an opportunity that Sai took advantage of to persuade him, with success, to contain brutality against local residents.

Some of the old brothels in the alleys are open to visitors, with an entrance fee. But the alleys and the buildings are generally not in very good condition, at least not as neat and elegant as those seen with Michelle Yeoh flying around in the film Crouching Tiger, Hidden Dragon.

3. The richest temple in the city

The rich and, sometimes even the powerful, compete to offer the first incense here for the Chinese New Year and major Tibetan Buddhist holidays to show how devout they are. Others must stand in line. This is the Lama Temple or Yong He Gong (雍和宫), the imperial temple during the Qing Dynasty.

The privilege to be able to jump the line comes with a price, unknown to the public. With contributions like this, the temple has allegedly become the wealthiest temple in the city and one of the wealthiest in the country. 

Buddhism is a big business in China. Many monks are believed to be among many of the country’s hidden rich. On the offering side, the big donors also have their requests for the Buddhas: please help me secure a higher position in the official hierarchy; survive the political fight; beat business rivals; or keep lasting stardom, among others.  

Across the intersection, by the way, is the huge, four-story Jin Ding Xuan (金鼎轩), a 24-hour restaurant, which offers decent food.

4. Joe Biden’s (anti)gastronomic China experience

When then vice US president Joe Biden visited Beijing in 2011, he ate in a modest eatery serving local Beijing snacks at the foot of the Drum Tower. The price there is low, but the food is abhorrent.  This, however, has not prevented curious people to come and try the “Biden menu”.

The Drum Tower and Bell Tower are beautiful buildings worth seeing. One of lodgings of Mao Zedong, when he was still nobody, is in Tofu Pond Hutong (豆腐池胡同) on the north of the two towers. 

  • Tourism

Executive Moves

Alex Zhang 张青林 has been General Manager for Asean and Greater China at RTS DG in Dongguan since the beginning of the month. Zhang previously worked for Liebherr Group.

Zhang Run is the new ambassador to Mexico. He succeeds Zhu Qingqiao.

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

Dessert

Flower carpet against karst cones: The landscape near Guiyang is known for its picturesque hills. But in the springtime, there is another highlight. The cherry grove in the Gui’an New Area is around 1,600 hectares in size and attracts flocks of tourists for the short duration of its bloom.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    The Chinese do not seem to have missed the Eiffel Tower that much. Although the population is once again allowed to travel freely, only a meager five percent of the pre-Covid tourist numbers visited France’s capital in the first two months of this year.

    This is painful because tourists from China bring in a lot of money: In 2019, they spent 250 billion US dollars on international travel. Amelie Richter analyzes the reasons for the lack of tourists. She also reports on the most popular travel dreams in the People’s Republic and how Russia, of all places, wants to become an attractive alternative to Europe.

    After seven years of diplomatic silence, Iran and Saudi Arabia have now resumed bilateral relations – a negotiation success on Beijing’s part. The People’s Republic has been active in the region for a long time and forged many strategic partnerships and built trust in the region. As a result, it has now become a reputable diplomatic player in the Middle East. Frank Sieren analyzes how power structures are changing.

    Today, China Perspective takes you on a tour of Beijing. How is the former red-light district of the Eight Great Hutongs connected to Germany, where exactly was Tank Man standing in the iconic photo and why are monks in a Beijing temple might be secretly getting rich? Find out.

    Your
    Julia Fiedler
    Image of Julia  Fiedler

    Feature

    Demands of Chinese tourists have changed

    Blast from the past: A Chinese tourist group in Paris in 2019.

    The first spring sun glistens on the Seine – and along its banks, there is something that has not been seen in this form since the pandemic: Tour buses are parked one after the other. In front of the pier for sightseeing boats, Chinese tourist groups are waiting. It seems they are back: The travelers from the People’s Republic.

    But it is not what it seems: In the first two months of the year, Paris airports recorded only around 3,200 arrivals from China, as the city’s tourism office told Table.Media. This is around 95 percent less than in 2019, before the pandemic. Even in March, there was still no wave of travelers, explained the Paris tourism office.

    While China has announced that it will also make it easier to obtain tourist visas, the other way around is still difficult. Until now, Germany, for example, has only issued business visas, but tourists are not yet able to visit the country again, travel industry sources confirm. A reason for this is that the German consulates in China are understaffed to process large numbers of visa applications.

    Tourists’ demands have changed

    According to the German Foreign Office, visa issuance is reciprocal. With China’s easing of restrictions on German tourists who wish to travel to China, the German side will also grant tourist visas to Chinese again. More than 10,000 Schengen visas have already been issued in China since the beginning of the year. The application centers in Canton, Shanghai, Beijing and Shenyang have already reopened. The center in Chengdu is also expected to open on Thursday. However, the number of appointments available before the pandemic has not yet been reached.

    Travel agencies hope that the tourism wave from China will gain significant momentum after the Easter holidays. However, in order to remain attractive as a travel destination for the Chinese market, Europe will have to try a little harder than before, says Wolfgang Georg Arlt, head of the China Outbound Tourism Research Institute (COTRI), which examines travel trends to and from the People’s Republic. “The demands of Chinese tourists have changed in the times of the pandemic,” Arlt explains. Group tour packages – like “five countries in six days” – are at best only an option for visitors who have never been to Europe before. But even here, there are higher demands for sustainability or “special experiences” nowadays.

    Outdoor vacation gains popularity

    The photo in front of the Eiffel Tower, which everyone has, is no longer in demand, says Arlt. Chinese tourists would rather visit smaller cities and the countryside and really explore them. The tourism expert sees this as a great opportunity for places that were previously not at the top of the wish list of travel destinations. Creative concepts are needed, he says.

    “Instead of going shopping, the money is being spent on activities.” Fine dining, for example, is currently very much in vogue, he says. “There are a lot of foodies who want to taste local delicacies above all else,” Arlt says. So in France, the dining-and-spa combo in the Champagne region could soon be more interesting as an event than the capital with its world-famous sights.

    Outdoor activities are also gaining in popularity, explains Arlt. However, ordinary camping is less in demand. “Glamping“, i.e. camping with glamour, is the order of the day. “And Chinese tourists also like to be entertained at the campsite in the evening. A bit like in a resort.”

    To top it off, Europe has also received big competition from the domestic market in China. “Since the pandemic, it is socially more accepted not to leave the country for vacation and spend a lot of money in China,” says Arlt.

    Chinese tourists this week in Moscow.

    Flights remain very expensive

    However, how many tourists will arrive from the People’s Republic this year remains uncertain. Olivier Ponti of the market research institute ForwardKeys remains cautious: “There’s still a long way to go to full recovery,” Ponti told Reuters. This is because there are still a number of hurdles. For example, a staff shortage at the airlines and the approval process for flight routes are slowing down the expansion of flight capacities. Chinese citizens are waiting a long time for passports. Flights are also still expensive, explains Ray Chen, manager of the Chinese online travel portal Trip.com.

    According to Ralf Ostendorf of the Berlin tourism agency VisitBerlin, there is currently one flight a week to China from the German capital. There had been negotiations on expanding air traffic between Germany and China before the pandemic, but these were interrupted because of Covid, he said. “It is important that these negotiations are resumed,” Ostendorf stressed. This did not happen, so far, because of political tensions caused by Russia’s war against Ukraine. “For tourism and the economy to function again, these direct flights are important for Berlin and Germany.”

    Trip.com expects a rapid increase in international flights from China in the coming months. From the current 15 to 20 percent of pre-pandemic levels, capacity will increase to 50 percent by the end of June, it expects. People want to travel, demand is high.

    Russian travel market adapts

    Chinese tourists, who are known to be big spenders, remain an important economic factor. “The return of Chinese tourists will be felt here in Berlin, in all European countries and throughout the world,” said the Secretary-General of the World Tourism Organization (UNWTO), Zurab Pololikashvili, at the ITB industry trade show in early March. For example, vacationers from the People’s Republic had spent more than 250 billion US dollars on international travel in 2019, the year before the pandemic.

    A country that is relying more on Chinese tourists this year than before: Russia. According to the Association of Tour Operators in Russia, the number of foreign tourists collapsed by 96 percent after Moscow invaded Ukraine. Russian travel agencies therefore have high hopes that Chinese tourists could be a permanent solution, Russian-language Current Time TV reported.

    According to the report, Russia’s tourism industry is shifting its focus to the Chinese market: Major hotel chains are offering basic Mandarin training for their staff and adapting their breakfast buffets to Chinese preferences. With Reuters

    • Tourism

    Beijing wants to play neutral role in the Middle East

    Foreign Policy Czar Wang Yi with Musaad bin Mohammed Al-Aiban (l.), Minister of State of Saudi Arabia, and Admiral Ali Shamkhani (r.), Secretary of Iran’s Supreme National Security Council.

    For the first time after years of conflict, the foreign ministers of Saudi Arabia and Iran spoke on the phone again on Thursday. At the beginning of the Muslim fasting month of Ramadan, Hussein Amirabdollahian and Faisal bin Farhan Al Saud exchanged greetings, the state media of both countries reported. During the conversation, they reportedly also discussed a planned ministerial meeting. The fact that the two countries are re-establishing bilateral relations after seven years of diplomatic standstill is a negotiating success for Beijing, one that is changing the balance of power in the Middle East.

    The United States certainly continues to play an important role. And Russia also has close ties to the region’s rulers. But now Beijing is also joining the fray. Iran’s military adviser Major General Yahya Rahim Safavi even expresses the hope that “the post-American era in the Persian Gulf region has begun.” He probably goes too far with this assessment. The US television station CNN describes the developments more aptly: “China has shattered the assumption of US dominance in the Middle East.”

    The US Wall Street Journal magazine calls it “a new chapter in competition between Beijing and Washington” China’s success undermines “the US contention that a US-led rules based order is the only responsible choice governments can make, and the only way to advance security,” Jon Alterman, an expert at the Center for Strategic and International Studies (CSIS) in Washington, summarizes the process.

    The deal shows that Saudi Arabia “don’t trust Washington to have their back,” Mark Dubowitz, executive director of the Washington-based Foundation for Defense of Democracies (FDD), also emphasizes. As a result, “China is becoming the major-domo of Middle Eastern power politics”.

    Riyadh now abstains in the UN

    At the same time, however, Riyadh is leaving the door open to its biggest arms supplier: Just hours before the Saudi-Iran agreement was announced, Saudi Arabia had even floated the United States as a broker for relations with Israel. The Saudi proposal included security guarantees from the United States, help in developing a civilian nuclear program, and lighter restrictions on US arms deals with Riyadh.

    But no longer at any cost, as US President Joe Biden already found out. After his meeting with Crown Prince Mohammed bin Salman in mid-2022, Saudi Arabia-dominated OPEC+ cut oil production. Biden, on the other hand, wanted OPEC to produce more and thus lower oil prices. This is how he wanted to take the pressure off the US economy. Instead, the development played into Russia’s President Vladimir Putin’s hands.

    Biden’s second setback was when Riyadh abstained from the recent UN resolution against Putin’s Ukraine war, as did China and India. The Saudis have not forgotten that the US “hesitated” after the 2019 unmanned aerial attacks on Saudi Arabia against oil tankers and oil facilities, explained Eyal Zisser, Vice Rector of Tel Aviv University.

    Furthermore, the US State Department removed the Iranian-backed Houthi movement from the US list of foreign terrorist organizations in 2021. For years before the ceasefire in April 2022, they fired missiles and suicide drones at Saudi Arabia.

    China wants to play more neutral role in the region

    But Beijing decided long before this development to play a more neutral role in the region. Beijing claims – for whatever reason – that China has no political interests in the region. Yet 40 percent of its gas and oil imports come from the region. The People’s Republic had very close ties with Iran. The United States has regarded Iran as hostile since the 1979 raid on the US Embassy in Tehran and the subsequent 444-day hostage situation involving more than 50 diplomats.

    The Chinese already managed to defuse this confrontation in 2015 when, together with the Europeans, they convinced then US President Barack Obama to lift sanctions against Iran. At the time, German Foreign Minister and current German President Frank-Walter Steinmeier and his Chinese counterpart at the time, Wang Yi, played a key role. Diplomacy czar Wang Yi has now also negotiated the agreement between Saudi Arabia and Iran.

    After the joint European-Chinese success, China’s diplomats then set out alone. One important step: The strategic partnership with Saudi Arabia in 2016, following Algeria, Egypt and Qatar (2014), Iraq (2015), Morocco and the United Arab Emirates (2016). Then in 2018, Oman and Kuwait.

    In December 2022, China and Arab countries decided to cooperate in the strategically important satellite navigation, as a foundation for future cooperation in the space sector. As of January 2023, 20 Arab countries have signed cooperation agreements under the Belt and Road Initiative (BRI). In late 2022, during Xi Jinping’s visit, relations between Riyadh and Beijing were upgraded to a Comprehensive Strategic Cooperative Partnership.

    Saudi Arabia could become part of the SCO

    So trust in the region was now so great that China did not have to offer itself as a mediator between Iran and Saudi Arabia – instead, the Saudis requested Xi’s help in December 2022. China’s President then invited Iran’s President Ebrahim Raisi to Beijing in February and also agreed to closer economic ties.

    After five days of intense negotiations, the breakthrough came on March 10. Chinese observers see Saudi Arabia’s rapprochement also as an indicator to Putin that Beijing is not dependent on his oil and gas. Saudi Arabia is China’s largest oil supplier and Putin’s biggest competitor. Now the chances for peace in Yemen, where Riyadh and Tehran have been waging a proxy war for eight years with more than 400,000 casualties already, are also rising: Tehran supports the Houthi rebels. Riyadh supports the government.

    The Biden administration grudgingly welcomed the agreement, but immediately drew a new red line. It was okay as long as a deal did not involve “military and technological cooperation,” a senior US official told the portal Axios.

    The question now is whether Saudi Arabia is still willing to accept such US demands. The admission of the Saudis to the Shanghai Cooperation Organization (SCO), which is already being discussed, could be a test of power. Its members include China, India, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan. So far, Iran has opposed the idea. This could now change.

    • Gas
    • Sanctions
    • Saudi Arabia

    Events

    March 27, 2023; 1:30 a.m. CET (March 28, 2023; 07:30 a.m. CST)
    Harvard Fairbank Center, Lecture: Small Banks, Big Politics: The Cause and Consequences of Bank Proliferation in China More

    March 28-31 2023; 6:00 p.m. CST
    AHK Greater China, on site Shenzhen: Sino-German Economic Forum 德中(深圳)经济论坛 More

    March 29, 2023; 6:00 p.m. CET (March 30, 2023; 12:00 a.m. CST)
    Dezan Shira & Associates, Webinar: Decoding China’s 2023 Two Sessions: Takeaways for Businesses More

    March 29, 2023; 6:00 p.m. CET (March 30, 2023; 12:00 a.m. CST)
    Harvard Fairbank Center, Lecture: Challenges Confronting China’s Healthcare System Post-COVID: A conversation between Winnie Yip and William Hsiao More

    March 30, 2023; 10:00 a.m. CET (4:00 p.m. CST)
    Dezan Shira & Associates, Webinar: Seizing Opportunities in China’s Healthcare Industry: A Guide for Foreign Investors More

    March 30, 2023; 10:00 a.m. CET (4:00 p.m. CST)
    EU SME Centre, Webinar: About to Take Off: The Return of Chinese Outbound Tourism More

    March 30, 2023; 09:15 a.m. CST
    AHK Greater China, on site in Shanghai: GCC Knowledge Hub: 中国转让定价合规文档和非贸付汇 More

    News

    No TikTok ban planned in Germany

    At a hearing before the US Congress, TikTok CEO Chew Shou Zi strongly denied accusations of espionage made against the Chinese app. All data from US users is stored on US servers and access to it is strictly monitored, the TikTok CEO stressed at Thursday’s hearing before the House Energy and Commerce Committee. TikTok’s recommendation algorithm, which selects videos for users, is also run by US software giant Oracle, Chew explained.

    “We do not promote or remove content at the request of the Chinese government,” Chew said. He said TikTok has an obligation to users to keep the app “free from any manipulation by any government”. Committee Chairwoman Cathy Rogers set a sharp tone at the hearing. “TikTok is watching all of us,” the Republican said in her statement. She also called TikTok a “portal for drug traffickers.” Democratic Vice Chairman Frank Pallone called privacy assurances in the US inadequate.

    Faeser: detect state influence early

    According to German Interior Minister Nancy Faeser, there are no plans to ban TikTok in Germany. However, Faeser emphasized during a visit to Washington that it was necessary to raise awareness of the fact that TikTok is a company where “data can naturally flow out”. She added that great care is taken to ensure that state influence by China is detected as early as possible. “We are just coming out of a strong dependence on Russia in energy supply. We don’t want to create further dependencies,” Faeser said.

    Due to the close links between TikTok, its parent company ByteDance, and the Chinese government, US and European security authorities, among others, are concerned that the People’s Republic is tapping into personal user data or misusing it to manipulate public opinion.

    Several countries have banned government employees from using TikTok on their staff cell phones, including the US, Canada, and the UK. The ban also applies to employees of the EU Commission. The US would like to ban the app, but this is legally difficult – former US President Donald Trump already failed with an attempt during his term in office. However, a draft bill that could allow a ban is in the works. It is still unclear when Congress will vote on it. jul

    Taiwan withdraws ambassador from Honduras

    Taiwan has recalled its ambassador to Honduras after the Central American country’s foreign minister, Eduardo Enrique Reina, traveled to China. Reina plans to promote the establishment of diplomatic relations between Panama and Beijing, according to an official. To do so, Honduras would have to break off relations with Taiwan.

    The Foreign Ministry in Taipei condemned the visit, saying Honduras ignored “Honduras ignored more than 80 years of friendship” when it sent its foreign minister to China. As a result, Taipei had decided to “immediately recall our ambassador in Honduras to express our strong dissatisfaction.”

    Should Honduras sever relations with Taiwan, Taipei will be down to diplomatic relations with only 13 countries. Next week, Taiwan’s President Tsai Ing-wen leaves for a state visit to Central America, where she will visit Honduras’ neighboring countries Belize and Guatemala.

    Honduras is heavily indebted

    Foreign minister Reina said last week that Honduras was also making this decision because the country was “up to its neck” in financial difficulties. This included 600 million US dollars owed to Taiwan. Honduras, however, denied having demanded 2.5 billion US dollars in aid from Taiwan before making diplomatic steps toward China. Taiwan’s foreign minister, Joseph Wu, said the situation with Honduras was “not very good”. Honduras had allegedly demanded a high price. He did not directly confirm the 2.5 billion but said Taiwan would not engage in dollar diplomacy. rtr/jul

    • Honduras
    • Taiwan

    USA currently sees no threat to Taiwan

    The US government reports that it currently sees no imminent threat of a Chinese invasion of Taiwan. “I don’t certainly see any imminent threat”, said Air Force Under Secretary Frank Kendall on the sidelines of a military technology conference in Singapore on Thursday. He also expressed hope that it would never materialize. However, the US is prepared to defend the democratically governed island, he said.

    China sees Taiwan as a breakaway province and seeks reunification. The Russian invasion of Ukraine has heightened fears that China might also resort to military means in the Taiwan conflict. rtr/jul

    KfW loans for China under scrutiny

    In light of geopolitical developments and shifts in China, the German government is currently deliberating on how to handle the promotional loan instrument of the Credit Institute for Reconstruction (KfW). A final decision has not yet been made, according to a response to a minor interpellation by the AfD parliamentary group in the Bundestag. The loans are under scrutiny in connection with Germany’s new China strategy.

    The German government did not provide any information on the average interest rate agreed with China for KfW promotional loans since 2016, citing banking secrecy and contractual confidentiality obligations.

    Classic bilateral development cooperation was already discontinued in 2009 due to China’s strong economic power. However, China still receives concessionary and government-backed loans from KfW. According to calculations by the German Federal Ministry for Economic Affairs and Climate Action, China was granted preferential loans amounting to just over three billion euros between 2013 and 2020; in 2021, KfW loans for the People’s Republic amounted to around 81 million euros, according to the Ministry of Development. Under OECD criteria, the People’s Republic is still classified as a developing country. jul

    • Loans

    China Perspective

    Tank Man, prostitutes, rich monks and Biden’s menu

    China is finally open again for international tourism. Although it is now not Beijing’s best season, there could still be a few not-so-smoggy, not-so-windy days. Here are some suggestions on what to explore in China’s capital, or maybe where to stay away from.

    1. The place where the Tank Man stood

    On June 5, 1989, the second day after the military crushed the 50-day-long student movement, he was famously seen standing before a line of tanks, blocking their way and creating one of the most memorable images of the 20th century.

    People are still not sure about his identity and what happened to him afterward. But with the photos and videos of him, it was not so hard to figure out where exactly he stood at that moment. It was on Chang An Avenue (Chang An means eternal peace. Tiananmen means Gate of Heavenly Peace), about 400 hundred meters from the eastern border of Tiananmen Square, and about 100 meters from the Grand Hotel (Gui Bin Lou 贵宾楼).

    He was facing West, blocking tanks driving to the East. Almost all the photos and videos seen today were taken from a hotel standing next to the Grand Hotel, the Beijing Hotel, where quite some foreign journalists stayed.

    2. Where a CCP co-founder groped a sex worker

    The Eight Big Hutongs (八大胡同, Hutong means alley) was Beijing’s red-light district roughly from 1800 until Communists started to run the city in 1949. These alleys, located a few hundred meters to the southwest of Qian Men (前门), still exist. 

    Like its counterparts in the rest of the world, these alleys also had connections to major political and social figures and events at the time.

    In 1920, Chen Duxiu (1879-1942), then a professor at Peking University and an activist and major voice for communist thought, got involved in a physical fight in one of the brothels due to “jealousy, and scratched the private parts of a prostitute,” according to media reports of the time.  He was fired by the university for this. 

    A year later, the Communist Party of China was founded and Chen, though absent from the party’s first congress, was elected its first general secretary because of its influence in the incipient communist movement in China. 

    The Eight Big Hutongs also has a German connection through a courtesan, Sai Jinhua (赛金花1872-1936). Sai Jinhua, meaning “rivaling golden flowers”, is an alias for the profession. She started to be a prostitute at an early age before becoming a concubine of a diplomat, Hong Jun. When Hong was appointed as the Qing Dynasty’s envoy to Europe, his wife claimed to be ill and was unwilling to go with him. So Sai went as his spouse, in 1889. 

    Hong died shortly after the couple returned to Beijing. Sai’s relationship with the Hong Family went sour and she picked up her old profession as a courtesan in two of the eight big Hutongs consecutively. Following the Boxers Rebellion in 1900, von Waldersee becoame the occupation army’s leader in the war between eight western countries and China, which ended in Beijing. He and Sai were reported to have reconnected and to have intimate encounters, an opportunity that Sai took advantage of to persuade him, with success, to contain brutality against local residents.

    Some of the old brothels in the alleys are open to visitors, with an entrance fee. But the alleys and the buildings are generally not in very good condition, at least not as neat and elegant as those seen with Michelle Yeoh flying around in the film Crouching Tiger, Hidden Dragon.

    3. The richest temple in the city

    The rich and, sometimes even the powerful, compete to offer the first incense here for the Chinese New Year and major Tibetan Buddhist holidays to show how devout they are. Others must stand in line. This is the Lama Temple or Yong He Gong (雍和宫), the imperial temple during the Qing Dynasty.

    The privilege to be able to jump the line comes with a price, unknown to the public. With contributions like this, the temple has allegedly become the wealthiest temple in the city and one of the wealthiest in the country. 

    Buddhism is a big business in China. Many monks are believed to be among many of the country’s hidden rich. On the offering side, the big donors also have their requests for the Buddhas: please help me secure a higher position in the official hierarchy; survive the political fight; beat business rivals; or keep lasting stardom, among others.  

    Across the intersection, by the way, is the huge, four-story Jin Ding Xuan (金鼎轩), a 24-hour restaurant, which offers decent food.

    4. Joe Biden’s (anti)gastronomic China experience

    When then vice US president Joe Biden visited Beijing in 2011, he ate in a modest eatery serving local Beijing snacks at the foot of the Drum Tower. The price there is low, but the food is abhorrent.  This, however, has not prevented curious people to come and try the “Biden menu”.

    The Drum Tower and Bell Tower are beautiful buildings worth seeing. One of lodgings of Mao Zedong, when he was still nobody, is in Tofu Pond Hutong (豆腐池胡同) on the north of the two towers. 

    • Tourism

    Executive Moves

    Alex Zhang 张青林 has been General Manager for Asean and Greater China at RTS DG in Dongguan since the beginning of the month. Zhang previously worked for Liebherr Group.

    Zhang Run is the new ambassador to Mexico. He succeeds Zhu Qingqiao.

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

    Dessert

    Flower carpet against karst cones: The landscape near Guiyang is known for its picturesque hills. But in the springtime, there is another highlight. The cherry grove in the Gui’an New Area is around 1,600 hectares in size and attracts flocks of tourists for the short duration of its bloom.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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