What to do when all the facts speak against one’s position in a large committee? These days, China is trying to drown out the Tibetans’ accusations in the United Nations Human Rights Council. Not only a particularly large contingent of official representatives but also a whole series of compliant organizations from the People’s Republic claim speaking time and thus exclude serious input. Yet Tibet’s cultural survival depends on the intervention of the international community. Marcel Grzanna reports.
Meanwhile, the EU Chamber in China is starting to recover from its bad mood. Last year, the statements of the business association were marked by doom and gloom. This was especially true for the Chamber’s Shanghai branch, which was stuck in a mad lockdown at the time. Now it is again expecting an upswing, as Christiane Kuehl writes. That would be particularly important for the German economy. The greater Shanghai area is home to 60,000 international companies. And when things are going well, some real money is earned there.
Your Finn Mayer-Kuckuk
Feature
UN Covenant: Beijing’s envoys sabotage the reappraisal in Geneva
China must appear before the United Nations Social Committee (CESCR) regarding human rights issues today, Wednesday. For four years, the People’s Republic has ignored the formal process and dragged out its reporting obligation on the implementation of economic, social and cultural rights.
Informal briefings have been underway since Monday, where non-governmental organizations can share their concerns and information with the committee before Chinese government officials are scheduled to address the body on Wednesday. Since 2019, the UN has been awaiting detailed comments on 31 issues it identified as problematic regarding China’s implementation of the UN Covenant on Social Rights.
Particular focus is being placed in Geneva on the systematic destruction of Tibetan culture. Four UN special rapporteurs accuse the People’s Republic of the forced assimilation of Tibetans into the dominant Han culture.
Gongos throw fog in Geneva
However, the barrier China erected to dismiss any accusations as fabrications is high. China wants to impress those present with sheer numbers. Beijing will apparently dispatch dozens of government representatives to Switzerland. The usual number is a handful of representatives.
China’s official representatives are joined by around 20 so-called “Gongos” – Governmental-Non-Governmental Organizations. Under the guise of civil society interests, state-controlled Chinese organizations are accredited as non-governmental bodies at the UN.
Taking up speaking time on behalf of the government
Gongos manipulate the debate about China’s practices by opposing the accusations of human rights activists and thereby displacing legitimate speakers. Because the more Gongos apply for speaking time in the informal briefings by civil society, the less time is left for critical observers. The social committee’s assessment of the Chinese account, which will follow in a few months, will likely be influenced by the Chinese litany coming from all sides.
Nevertheless, Tibetans hope that the world will become much more aware of the dramatically growing danger of systematic eradication of their culture. In the face of Chinese obstruction to address the allegations, they feel an increasingly growing existential dread.
Tibet’s exiled president sounds the alarm in interview
One of the methods used is a boarding school system in which up to 900,000 Tibetan children are cut off from their linguistic and cultural roots for most of the year. Penpa Tsering, Tibet’s exile president, recently voiced his concern in an interview with China.Table and also urged the German government to do more against China’s actions.
Forced relocation and labor programs for the Tibetan population are rapidly advancing the process of sinicization. For many years, Tibetan communities – especially from the high valleys above 4,000 meters – have been forced out of their home villages. To better justify these measures before the CESCR, the Chinese authorities are forcing a supposed consent from many villagers.
Closure of schools, city halls, doctors’ offices
The International Campaign for Tibet (ITC) reports systematic deprivation of livelihoods for those affected. First schools are closed, then the town halls and medical facilities, and finally the legal scope for commercial self-sufficiency is also curtailed in order to render people’s everyday lives as difficult as possible.
“After years of spatial isolation from government and economic structures, most people give up demoralized and agree to resettlement,” says Managing Director Kai Mueller of ITC Germany. Before the UN, China will then call this consent a mutual agreement.
‘Intimidation of lawyers and law firms’
To make it seem as if Tibetans are very much in agreement with the central state, China points to the lack of legal opposition from the affected ethnic groups. Indeed, there are only a handful of cases in which legal action is taken against forced resettlement. This does by no means surprise Mueller. “Tibetans know that they will face repression if they try to take formal legal action. Hardly anyone takes that risk,” he says.
China will also have to comment in detail on this accusation under item 4 of the UN list of problems at the Palais Wilson in Geneva. There, the Social Committee demands a statement on the allegations of “intimidation of lawyers and law firms” in China.
Human Rights
Tibet
United Nations
EU Chamber: Hopes for a fresh start in Shanghai
Pedestrians in front of the Pudong skyline, once a symbol of Shanghai’s dynamism: After the end of zero-Covide, the EU Chamber of Commerce is now promoting business-friendly conditions.
This year, the EU Chamber of Commerce wants to look forward again. This was evident from the tone of the position paper presented by the Shanghai branch on Tuesday, the first in a series of planned local editions. Last year, the position paper of the European Chamber of Commerce in China (EUCCC) was still dominated by frustration and disappointment over China’s zero-covid policy and increasing politicization of the business environment.
The EUCCC still highlights many uncertainties in the new paper. At the same time, however, it expresses careful optimism. Recovery could be in the cards after business was soured in 2022 by a shockingly erratic hardcore lockdown. EU firms are also expected to benefit. A fresh start in Shanghai could have an impact across the country, the Chamber believes. Bettina Schoen-Behanzin, EUCCC vice-president and chair of the Shanghai Chamber chapter, emphasized that the metropolis is a model city for recovery throughout China.
Shanghai: confidence at rock bottom post-lockdown
The reputation of the metropolis had suffered badly under the lockdown of spring 2022; trust in politics had hit an all-time low. “A recovery cannot be taken for granted,” Schoen-Behanzin emphasized. Looking at how other cities have dealt with zero-Covid, it becomes clear “that Shanghai has a problem”, says EUCCC President Joerg Wuttke. Although Beijing had forced Shanghai’s city leadership to take a tough anti-Covid approach, “Beijing also governs other cities,” Wuttke says.”
Shanghai’s government must restore trust, especially through transparent communication with the business community and by setting reliable conditions, Schoen-Behanzin demanded. The fact that the Chamber sees an opportunity for this is shown by the preface, which speaks of good relations with the local government and “constructive recommendations” it provided.
This includes concrete demands:
uniform environmental standards in the Yangtze River Delta,
local tax incentives
efficient protection of intellectual property,
stronger internationalization of the renminbi, and the
reduction of barriers to foreign direct investment.
According to Schoen-Behanzin, the local government is interested in talks and feedback.
EU Chamber warns Shanghai against complacency
But the Chamber also had a warning for the city of Shanghai: “Shanghai has taken it for granted to be number one. That is no longer the case,” Wuttke stressed. Other cities are practically scrambling to attract investment again – such as Chongqing, where Wuttke will meet the local CP leader Yuan Jiajun on Thursday. Shenzhen is now considered a high-tech innovation hub and could become an increasingly tough competitor for Shanghai.
But not everything is up to Shanghai; the overall economic framework is set by Beijing. But things like the environment for expats, schools or health care are things the city can decide for itself, Schoen-Behanzin said – issues that are crucial to stopping the exodus of foreign talent so important for exchanges between China and the world. About one in four of Shanghai’s large German community has reportedly left, as well as one-fifth of the Italians and French registered with their respective consulates.
If the city wants to achieve its ambitious goals – such as building a “headquarter economy” for foreign companies within the 14th Five-Year Plan (2021-25) – it needs to improve its appeal again. At present, Singapore, which more and more companies are choosing as the location for Asia-Pacific headquarters, is benefiting from the loss of Shanghai’s attractiveness, as Schoen-Behanzin pointed out. But she does have hope. “When the economy picks up, confidence can return. People forget quickly.”
Coronavirus
Geopolitics
Health
Industry
Shanghai
Trade
Sinolytics.Radar
Gap between the provinces continues to widen
Dieser Inhalt ist Lizenznehmern unserer Vollversion vorbehalten.
Recently released household consumption data emphasizes again the lost trust of Chinese consumers. Average consumption expenditures decreased by 0.2 percent in real terms in 2022 compared to the previous year, showing the negative consequences of the stringent covid restrictions.
Chinese households spend 31 percent on food and beverages, an area expected to quickly recover post Covid measures. Recovery will be harder to achieve for the 24 percent spending on housing and 13 percent spending on transport and communication. Chinese households have especially held back on less needed consumption, such as clothing and cultural activities.
Consumption levels fell despite an increase in available income. The disposable income of households grew by 5 percent in 2022 compared to 2021. After adjustment for inflation, the real growth is 2.9 percent with average household income reaching 36,900 RMB. Among different income sources, wages contribute to around 56 percent of total household income (20,600 RMB).
Still, the disparity between provinces is increasing as the economically developed provinces such as Beijing, Shanghai, Zhejiang and Jiangsu experienced strong growth of income since 2014.
However, income grew much less in economically weaker regions such as Jilin, Yunnan and Gansu.
FIEs who are relying on the less developed areas in China as new growth drivers and releasing consumption potential may need to be more patient before the income prospects are enhanced in such areas.
Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.
Consumption
Society
News
EU and China resume human rights talks
China and the EU will resume their human rights dialogue this week, which has been suspended for several years. A meeting as part of the dialogue is scheduled for this Friday, a spokeswoman for the EU Commission confirmed to China.Table on Tuesday. The EU expects the resumption to allow for “focused discussions on a broad range of issues”, the commission spokeswoman said. “The EU and China have different views on this issue, but that is exactly why this dialogue is important: to have an open discussion,” she added.
The meeting now planned for Friday will be the 38th as part of the dialogue. The last one took place in this form in April 2019. There was no dialogue meeting during the Covid pandemic. Both sides had already agreed to revive the format after last April’s EU-China summit.
Beijing is currently running a charm offensive in Europe and, among other things, is sending chief diplomat Wang Yi to the Munich Security Conference. Counteracting the Chinese views, visitors, therefore, saw a planned trip by the governor of Xinjiang, Erkin Tuniyaz. He is expected to tour several European countries this week to meet with political representatives. Tuniyaz is supposed to travel to the United Kingdom first. According to local media reports, it was unclear whether he had already arrived.
Meanwhile, the governor is rumored to have canceled his trip to Brussels. The Green Party European politician and China expert Reinhard Bütikofer, among others, posted on Twitter that the visit had been canceled. There was no initial official confirmation of the cancellation. Tuniyaz, however, is still expected to visit Paris. The governor is blacklisted in the USA and is thus not allowed to enter the country. Human rights organizations and politicians are also calling for banning Tuniyaz from entering Europe. ari
Civil Society
EU
Human Rights
US navy recovers balloon electronics
After more than a week, the US Navy recovered the first electronic parts of the downed suspected spy balloon from the seabed. “Crews have been able to recover significant debris from the site,” the US Army announced on Tuesday. Among them are key sensors that could have been used for reconnaissance.
Due to bad weather, cranes and divers were only able to work to a limited extent over the past few days. As a result, underwater drones were ultimately deployed. Specialists from the FBI are now expected to take over and assess the balloon’s capabilities.
The recovery of parts of a flying object shot down by the United States on Monday over Lake Huron on the border to Canada is proceeding in parallel. The three objects newly discovered in the past few days were not initially believed to have originated from China. However, there is a connection between the discoveries and the balloon that crossed the US the previous week. After its discovery, air surveillance recalibrated its radar for slower, smaller objects. fin
Geopolitics
Spy
USA
Philippines outraged over attack on fishermen
A Chinese vessel allegedly attacked a Philippine Coast Guard boat with a military laser. The incident occurred about 20 kilometers from a Philippine Navy base in the Spratly Islands, the Philippine Coast Guard said on Monday. The laser beam temporarily blinded some crew members of the BRP Malapascua. In addition, the Chinese ship is said to have carried out “dangerous maneuvers” in the vicinity of the Philippine boat. Only a few weeks ago, Philippine President Ferdinand Marcos Jr. proposed mechanisms for talks between the foreign ministries of both countries to resolve conflicts in disputed maritime areas.
China claims large parts of the South China Sea as its territory. Vessels from the People’s Republic repeatedly harassed Philippine boats in the past. However, this was the first case of Chinese vessels using a military-grade laser against Filipino sailors, coast guard spokesman Armand Balilo told the AP news agency. The Philippine foreign ministry lodged a protest with the Chinese embassy in Manila on Tuesday. The actions of the Chinese coast guard posed “a threat to Philippine sovereignty and security and the country”. fpe
Geopolitics
Philippines
South China Sea
China modernizes railroad in Namibia
The China Gezhouba Group Corporation has modernized a nearly 110-kilometer-long section of the Namibian railway. This was reported by the Chinese news agency Xinhua. The railway line connects the mining town of Arandis with Walvis Bay. Where previously only a travel speed of 40 kilometers per hour was possible, trains can now travel twice as fast. Another section between Arandis and Kranzberg is currently being modernized. The line extension is part of the Namibian government’s Vision 2030 program. ajs
Africa
Infrastructure
New Silk Road
Opinion
Lack of trade agreements – a threat to Taiwan’s future
Frank Bickenbach, Silas Dreier and Wan-Hsin Liu, IfW Kiel
Despite its small size of fewer than 24 million inhabitants, or 0.3 percent of the world’s population, Taiwan is one of the leading economies in global trade. With a share of almost 2 percent of global trade in goods, Taiwan ranks 16th among all economies in the world in 2021 – compared to just 57th place in terms of population. The most important export markets are China (including Hong Kong) with about 42 percent, followed by the ASEAN countries (16 percent), the US (15 percent), the EU (7 percent) and Japan (7 percent).
Taiwan is particularly successful in the electronics industry. Around half of Taiwan’s merchandise exports are electrical and electrotechnical goods. In addition to many successful small and medium-sized enterprises, there are also several large companies that are among the world market leaders in their respective fields.
For instance, TSMC accounts for more than half of the world’s contract manufacturing of semiconductors, and is the almost unrivalled technology leader in the production of semiconductors with particularly small structure widths. MediaTek held a global market share in smartphone processors of about 40 percent in 2022, and in the same year, about 14 percent of all PCs sold worldwide came from the two Taiwanese companies ASUS and Acer.
Lack of trade agreements brings massive disadvantages
Taiwan’s important role in global trade is all the more remarkable, as it has only been able to conclude very few bilateral or multilateral investment or trade agreements due to China’s vigorously advocated “One China Policy”. Nevertheless, with China’s consent, Taiwan was able to join the World Trade Organisation (WTO) in 2002. It is moreover a member of important plurilateral WTO agreements, such as the global WTO Information Technology Agreement (ITA), which provides for the complete elimination of tariffs on numerous products in the information technology sector, the most important sector of the Taiwanese economy.
Memberships in the WTO and ITA have helped Taiwanese companies to establish a central role within the “Factory Asia” production network and in global supply and production chains, especially in the electronics and IT sectors, even without bilateral or regional free trade agreements. However, various recent developments have led to a significant increase in the disadvantages for Taiwan’s businesses resulting from the lack of regional and bilateral trade and investment agreements.
The intensification of economic and political conflicts with China has led the US and increasingly also the EU – like China before – to align their trade policy and their industrial policy increasingly towards geopolitical goals. With the aim of reducing strategic dependencies on China, strengthening their resilience to disruptions in international supply chains and defending technological leadership or sovereignty, protectionist and at times WTO-incompatible policy instruments (tariffs, export bans, subsidies and local content requirements) are increasingly being employed. As a result, the existing global and regional supply and production networks are increasingly coming under economic and political pressure to adapt. This is particularly true for “Factory Asia”.
The increase in geopolitical conflicts and geopolitically motivated economic policy measures is undermining the global rule-based economic order and is further weakening the role of the WTO. In addition, the US blockage of appointments to the WTO’s Appellate Body has led to the WTO’s dispute settlement system becoming dysfunctional, so that member states can no longer defend themselves effectively at WTO level against possible rule violations by other member states.
In recent years, countries in the Indo-Pacific region have concluded significant regional and bilateral trade agreements: In 2018, eleven countries in the region concluded the ambitious “Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP). This was followed, at the end of 2020, by the “Regional Comprehensive Economic Partnership” (RCEP), the world’s largest regional free trade agreement in terms of population and economic output of the countries covered. Taiwan is not a party to either agreement. In addition, the EU has signed comprehensive bilateral trade agreements with South Korea, Japan, Singapore and Vietnam since 2015. Negotiations have recently been concluded with New Zealand and are ongoing with other partners in the region (including Australia, India, and Indonesia) – but not with Taiwan.
Taiwan cannot participate in standards
The intensification of geopolitical conflicts and the accompanying weakening of the global rule-based economic order increase the uncertainty Taiwanese companies face in their foreign trade activities. At the same time, the various new bilateral and regional trade agreements between Taiwan’s trading partners and competitors in the Indo-Pacific region increasingly lead to an increasing disadvantage for Taiwanese companies in the reorganisation of regional and global production networks.
As a non-member, Taiwan does not benefit from the trade liberalisations specified in these agreements and does not take part in developing the rules and standards agreed therein. Moreover, the lack of own trade agreements hampers Taiwan’s efforts to reduce its economic dependence on China.
For Taiwan, joining the regional trade agreements as well as concluding bilateral trade or investment agreements with its most important trading partners would therefore be of considerable economic advantage. However, Taiwan’s accession to the RCEP seems out of reach for the foreseeable future, as this would require the consent of all parties to the agreement – including China. Taiwan’s accession to the CPTPP seems conceivable in principle. Both Taiwan and China have already applied for membership.
Increasing isolation of Taiwan would be costly
But, even a joint accession of Taiwan and China is vigorously rejected by China. Taiwan’s accession would require a unanimous vote of all eleven current CPTPP members – which seems unrealistic in the face of China’s opposition. The conclusion of bilateral trade or investment agreements with the EU, the US or other important trading partners would also likely meet with similarly strong opposition from China. Such agreements would thus only be feasible if Taiwan and its potential contractual partners were ready to face the likely retaliation from China.
For both Taiwan and its partners, an increasing isolation of Taiwan would come with considerable costs. Taiwan’s technological and economic potential, especially in the electronics industry, would be lost to the world. A long-term economic weakening of Taiwan would also increase the island’s economic dependency on China, possibly at the expense of the democratic and rule-of-law institutions built up over decades.
It is therefore important for Taiwan’s partners to carefully examine what possibilities and leeway they have to maintain or further strengthen economic cooperation with Taiwan? What diplomatic, economic, or even military countermeasures would they have to expect from China? And how could the associated risks be minimised?
Frank Bickenbach is Deputy Head of the Research Centre “International Trade and Investment” and a Senior Researcher at the Research Centre “Innovation and International Competition” at the Kiel Institute for the World Economy.
Silas Dreieris the coordinator of the Global China Conversations at the China Initiative of the Kiel Institute for the World Economy. He is also currently a Graduate Student of China Business and Economics at the University of Würzburg.
Wan-Hsin Liu is a Senior Researcher in the Research Centres “International Trade and Investment” and “Innovation and International Competition” at the Kiel Institute for the World Economy. She is also the coordinator of the Kiel Centre for Globalisation.
This article was written in the context of the Global China Conversations event series of the Kiel Institute for the World Economy (IfW). On Thursday (11 a.m., CET), Shin-Horng Chen, Vice President of the Chung-Hua Institution for Economic Research, and Sarah Kirchberger, Head of Asia-Pacific Strategy and Security at the Institute for Security Policy at Kiel University, will discuss the topic: “Tensions over Taiwan: What’s the Current Situation and What Challenges Arise for Businesses and the Economy?“. China.Table is the media partner of this event series.
Geopolitics
RCEP
Taiwan
Trade
Executive Moves
Peter Catterall is the new China and Mongolia correspondent for AFP. Catterall works from Beijing. He was previously a journalist at the tech media platform Pandaily.
Beijing has appointed several ambassadors to African countries: Li Qinfeng will succeed Chen Dong as ambassador to the Central African Republic. Wang Qing was appointed ambassador to Sierra Leone, replacing Hu Zhangliang. Zhao Weiping succeeds Zhang Yiming as ambassador to Namibia.
Is something changing in your organization? Let us know atheads@table.media!
Dessert
She said yes! The gentleman on the left in the picture just proposed to his girlfriend – in proper fashion on Valentine’s Day, which is also celebrated in China on 14 February. The two are standing in a tube in a huge aquarium. The scene of the romantic ritual is Zhongtai Ocean World in Changchun.
What to do when all the facts speak against one’s position in a large committee? These days, China is trying to drown out the Tibetans’ accusations in the United Nations Human Rights Council. Not only a particularly large contingent of official representatives but also a whole series of compliant organizations from the People’s Republic claim speaking time and thus exclude serious input. Yet Tibet’s cultural survival depends on the intervention of the international community. Marcel Grzanna reports.
Meanwhile, the EU Chamber in China is starting to recover from its bad mood. Last year, the statements of the business association were marked by doom and gloom. This was especially true for the Chamber’s Shanghai branch, which was stuck in a mad lockdown at the time. Now it is again expecting an upswing, as Christiane Kuehl writes. That would be particularly important for the German economy. The greater Shanghai area is home to 60,000 international companies. And when things are going well, some real money is earned there.
Your Finn Mayer-Kuckuk
Feature
UN Covenant: Beijing’s envoys sabotage the reappraisal in Geneva
China must appear before the United Nations Social Committee (CESCR) regarding human rights issues today, Wednesday. For four years, the People’s Republic has ignored the formal process and dragged out its reporting obligation on the implementation of economic, social and cultural rights.
Informal briefings have been underway since Monday, where non-governmental organizations can share their concerns and information with the committee before Chinese government officials are scheduled to address the body on Wednesday. Since 2019, the UN has been awaiting detailed comments on 31 issues it identified as problematic regarding China’s implementation of the UN Covenant on Social Rights.
Particular focus is being placed in Geneva on the systematic destruction of Tibetan culture. Four UN special rapporteurs accuse the People’s Republic of the forced assimilation of Tibetans into the dominant Han culture.
Gongos throw fog in Geneva
However, the barrier China erected to dismiss any accusations as fabrications is high. China wants to impress those present with sheer numbers. Beijing will apparently dispatch dozens of government representatives to Switzerland. The usual number is a handful of representatives.
China’s official representatives are joined by around 20 so-called “Gongos” – Governmental-Non-Governmental Organizations. Under the guise of civil society interests, state-controlled Chinese organizations are accredited as non-governmental bodies at the UN.
Taking up speaking time on behalf of the government
Gongos manipulate the debate about China’s practices by opposing the accusations of human rights activists and thereby displacing legitimate speakers. Because the more Gongos apply for speaking time in the informal briefings by civil society, the less time is left for critical observers. The social committee’s assessment of the Chinese account, which will follow in a few months, will likely be influenced by the Chinese litany coming from all sides.
Nevertheless, Tibetans hope that the world will become much more aware of the dramatically growing danger of systematic eradication of their culture. In the face of Chinese obstruction to address the allegations, they feel an increasingly growing existential dread.
Tibet’s exiled president sounds the alarm in interview
One of the methods used is a boarding school system in which up to 900,000 Tibetan children are cut off from their linguistic and cultural roots for most of the year. Penpa Tsering, Tibet’s exile president, recently voiced his concern in an interview with China.Table and also urged the German government to do more against China’s actions.
Forced relocation and labor programs for the Tibetan population are rapidly advancing the process of sinicization. For many years, Tibetan communities – especially from the high valleys above 4,000 meters – have been forced out of their home villages. To better justify these measures before the CESCR, the Chinese authorities are forcing a supposed consent from many villagers.
Closure of schools, city halls, doctors’ offices
The International Campaign for Tibet (ITC) reports systematic deprivation of livelihoods for those affected. First schools are closed, then the town halls and medical facilities, and finally the legal scope for commercial self-sufficiency is also curtailed in order to render people’s everyday lives as difficult as possible.
“After years of spatial isolation from government and economic structures, most people give up demoralized and agree to resettlement,” says Managing Director Kai Mueller of ITC Germany. Before the UN, China will then call this consent a mutual agreement.
‘Intimidation of lawyers and law firms’
To make it seem as if Tibetans are very much in agreement with the central state, China points to the lack of legal opposition from the affected ethnic groups. Indeed, there are only a handful of cases in which legal action is taken against forced resettlement. This does by no means surprise Mueller. “Tibetans know that they will face repression if they try to take formal legal action. Hardly anyone takes that risk,” he says.
China will also have to comment in detail on this accusation under item 4 of the UN list of problems at the Palais Wilson in Geneva. There, the Social Committee demands a statement on the allegations of “intimidation of lawyers and law firms” in China.
Human Rights
Tibet
United Nations
EU Chamber: Hopes for a fresh start in Shanghai
Pedestrians in front of the Pudong skyline, once a symbol of Shanghai’s dynamism: After the end of zero-Covide, the EU Chamber of Commerce is now promoting business-friendly conditions.
This year, the EU Chamber of Commerce wants to look forward again. This was evident from the tone of the position paper presented by the Shanghai branch on Tuesday, the first in a series of planned local editions. Last year, the position paper of the European Chamber of Commerce in China (EUCCC) was still dominated by frustration and disappointment over China’s zero-covid policy and increasing politicization of the business environment.
The EUCCC still highlights many uncertainties in the new paper. At the same time, however, it expresses careful optimism. Recovery could be in the cards after business was soured in 2022 by a shockingly erratic hardcore lockdown. EU firms are also expected to benefit. A fresh start in Shanghai could have an impact across the country, the Chamber believes. Bettina Schoen-Behanzin, EUCCC vice-president and chair of the Shanghai Chamber chapter, emphasized that the metropolis is a model city for recovery throughout China.
Shanghai: confidence at rock bottom post-lockdown
The reputation of the metropolis had suffered badly under the lockdown of spring 2022; trust in politics had hit an all-time low. “A recovery cannot be taken for granted,” Schoen-Behanzin emphasized. Looking at how other cities have dealt with zero-Covid, it becomes clear “that Shanghai has a problem”, says EUCCC President Joerg Wuttke. Although Beijing had forced Shanghai’s city leadership to take a tough anti-Covid approach, “Beijing also governs other cities,” Wuttke says.”
Shanghai’s government must restore trust, especially through transparent communication with the business community and by setting reliable conditions, Schoen-Behanzin demanded. The fact that the Chamber sees an opportunity for this is shown by the preface, which speaks of good relations with the local government and “constructive recommendations” it provided.
This includes concrete demands:
uniform environmental standards in the Yangtze River Delta,
local tax incentives
efficient protection of intellectual property,
stronger internationalization of the renminbi, and the
reduction of barriers to foreign direct investment.
According to Schoen-Behanzin, the local government is interested in talks and feedback.
EU Chamber warns Shanghai against complacency
But the Chamber also had a warning for the city of Shanghai: “Shanghai has taken it for granted to be number one. That is no longer the case,” Wuttke stressed. Other cities are practically scrambling to attract investment again – such as Chongqing, where Wuttke will meet the local CP leader Yuan Jiajun on Thursday. Shenzhen is now considered a high-tech innovation hub and could become an increasingly tough competitor for Shanghai.
But not everything is up to Shanghai; the overall economic framework is set by Beijing. But things like the environment for expats, schools or health care are things the city can decide for itself, Schoen-Behanzin said – issues that are crucial to stopping the exodus of foreign talent so important for exchanges between China and the world. About one in four of Shanghai’s large German community has reportedly left, as well as one-fifth of the Italians and French registered with their respective consulates.
If the city wants to achieve its ambitious goals – such as building a “headquarter economy” for foreign companies within the 14th Five-Year Plan (2021-25) – it needs to improve its appeal again. At present, Singapore, which more and more companies are choosing as the location for Asia-Pacific headquarters, is benefiting from the loss of Shanghai’s attractiveness, as Schoen-Behanzin pointed out. But she does have hope. “When the economy picks up, confidence can return. People forget quickly.”
Coronavirus
Geopolitics
Health
Industry
Shanghai
Trade
Sinolytics.Radar
Gap between the provinces continues to widen
Dieser Inhalt ist Lizenznehmern unserer Vollversion vorbehalten.
Recently released household consumption data emphasizes again the lost trust of Chinese consumers. Average consumption expenditures decreased by 0.2 percent in real terms in 2022 compared to the previous year, showing the negative consequences of the stringent covid restrictions.
Chinese households spend 31 percent on food and beverages, an area expected to quickly recover post Covid measures. Recovery will be harder to achieve for the 24 percent spending on housing and 13 percent spending on transport and communication. Chinese households have especially held back on less needed consumption, such as clothing and cultural activities.
Consumption levels fell despite an increase in available income. The disposable income of households grew by 5 percent in 2022 compared to 2021. After adjustment for inflation, the real growth is 2.9 percent with average household income reaching 36,900 RMB. Among different income sources, wages contribute to around 56 percent of total household income (20,600 RMB).
Still, the disparity between provinces is increasing as the economically developed provinces such as Beijing, Shanghai, Zhejiang and Jiangsu experienced strong growth of income since 2014.
However, income grew much less in economically weaker regions such as Jilin, Yunnan and Gansu.
FIEs who are relying on the less developed areas in China as new growth drivers and releasing consumption potential may need to be more patient before the income prospects are enhanced in such areas.
Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.
Consumption
Society
News
EU and China resume human rights talks
China and the EU will resume their human rights dialogue this week, which has been suspended for several years. A meeting as part of the dialogue is scheduled for this Friday, a spokeswoman for the EU Commission confirmed to China.Table on Tuesday. The EU expects the resumption to allow for “focused discussions on a broad range of issues”, the commission spokeswoman said. “The EU and China have different views on this issue, but that is exactly why this dialogue is important: to have an open discussion,” she added.
The meeting now planned for Friday will be the 38th as part of the dialogue. The last one took place in this form in April 2019. There was no dialogue meeting during the Covid pandemic. Both sides had already agreed to revive the format after last April’s EU-China summit.
Beijing is currently running a charm offensive in Europe and, among other things, is sending chief diplomat Wang Yi to the Munich Security Conference. Counteracting the Chinese views, visitors, therefore, saw a planned trip by the governor of Xinjiang, Erkin Tuniyaz. He is expected to tour several European countries this week to meet with political representatives. Tuniyaz is supposed to travel to the United Kingdom first. According to local media reports, it was unclear whether he had already arrived.
Meanwhile, the governor is rumored to have canceled his trip to Brussels. The Green Party European politician and China expert Reinhard Bütikofer, among others, posted on Twitter that the visit had been canceled. There was no initial official confirmation of the cancellation. Tuniyaz, however, is still expected to visit Paris. The governor is blacklisted in the USA and is thus not allowed to enter the country. Human rights organizations and politicians are also calling for banning Tuniyaz from entering Europe. ari
Civil Society
EU
Human Rights
US navy recovers balloon electronics
After more than a week, the US Navy recovered the first electronic parts of the downed suspected spy balloon from the seabed. “Crews have been able to recover significant debris from the site,” the US Army announced on Tuesday. Among them are key sensors that could have been used for reconnaissance.
Due to bad weather, cranes and divers were only able to work to a limited extent over the past few days. As a result, underwater drones were ultimately deployed. Specialists from the FBI are now expected to take over and assess the balloon’s capabilities.
The recovery of parts of a flying object shot down by the United States on Monday over Lake Huron on the border to Canada is proceeding in parallel. The three objects newly discovered in the past few days were not initially believed to have originated from China. However, there is a connection between the discoveries and the balloon that crossed the US the previous week. After its discovery, air surveillance recalibrated its radar for slower, smaller objects. fin
Geopolitics
Spy
USA
Philippines outraged over attack on fishermen
A Chinese vessel allegedly attacked a Philippine Coast Guard boat with a military laser. The incident occurred about 20 kilometers from a Philippine Navy base in the Spratly Islands, the Philippine Coast Guard said on Monday. The laser beam temporarily blinded some crew members of the BRP Malapascua. In addition, the Chinese ship is said to have carried out “dangerous maneuvers” in the vicinity of the Philippine boat. Only a few weeks ago, Philippine President Ferdinand Marcos Jr. proposed mechanisms for talks between the foreign ministries of both countries to resolve conflicts in disputed maritime areas.
China claims large parts of the South China Sea as its territory. Vessels from the People’s Republic repeatedly harassed Philippine boats in the past. However, this was the first case of Chinese vessels using a military-grade laser against Filipino sailors, coast guard spokesman Armand Balilo told the AP news agency. The Philippine foreign ministry lodged a protest with the Chinese embassy in Manila on Tuesday. The actions of the Chinese coast guard posed “a threat to Philippine sovereignty and security and the country”. fpe
Geopolitics
Philippines
South China Sea
China modernizes railroad in Namibia
The China Gezhouba Group Corporation has modernized a nearly 110-kilometer-long section of the Namibian railway. This was reported by the Chinese news agency Xinhua. The railway line connects the mining town of Arandis with Walvis Bay. Where previously only a travel speed of 40 kilometers per hour was possible, trains can now travel twice as fast. Another section between Arandis and Kranzberg is currently being modernized. The line extension is part of the Namibian government’s Vision 2030 program. ajs
Africa
Infrastructure
New Silk Road
Opinion
Lack of trade agreements – a threat to Taiwan’s future
Frank Bickenbach, Silas Dreier and Wan-Hsin Liu, IfW Kiel
Despite its small size of fewer than 24 million inhabitants, or 0.3 percent of the world’s population, Taiwan is one of the leading economies in global trade. With a share of almost 2 percent of global trade in goods, Taiwan ranks 16th among all economies in the world in 2021 – compared to just 57th place in terms of population. The most important export markets are China (including Hong Kong) with about 42 percent, followed by the ASEAN countries (16 percent), the US (15 percent), the EU (7 percent) and Japan (7 percent).
Taiwan is particularly successful in the electronics industry. Around half of Taiwan’s merchandise exports are electrical and electrotechnical goods. In addition to many successful small and medium-sized enterprises, there are also several large companies that are among the world market leaders in their respective fields.
For instance, TSMC accounts for more than half of the world’s contract manufacturing of semiconductors, and is the almost unrivalled technology leader in the production of semiconductors with particularly small structure widths. MediaTek held a global market share in smartphone processors of about 40 percent in 2022, and in the same year, about 14 percent of all PCs sold worldwide came from the two Taiwanese companies ASUS and Acer.
Lack of trade agreements brings massive disadvantages
Taiwan’s important role in global trade is all the more remarkable, as it has only been able to conclude very few bilateral or multilateral investment or trade agreements due to China’s vigorously advocated “One China Policy”. Nevertheless, with China’s consent, Taiwan was able to join the World Trade Organisation (WTO) in 2002. It is moreover a member of important plurilateral WTO agreements, such as the global WTO Information Technology Agreement (ITA), which provides for the complete elimination of tariffs on numerous products in the information technology sector, the most important sector of the Taiwanese economy.
Memberships in the WTO and ITA have helped Taiwanese companies to establish a central role within the “Factory Asia” production network and in global supply and production chains, especially in the electronics and IT sectors, even without bilateral or regional free trade agreements. However, various recent developments have led to a significant increase in the disadvantages for Taiwan’s businesses resulting from the lack of regional and bilateral trade and investment agreements.
The intensification of economic and political conflicts with China has led the US and increasingly also the EU – like China before – to align their trade policy and their industrial policy increasingly towards geopolitical goals. With the aim of reducing strategic dependencies on China, strengthening their resilience to disruptions in international supply chains and defending technological leadership or sovereignty, protectionist and at times WTO-incompatible policy instruments (tariffs, export bans, subsidies and local content requirements) are increasingly being employed. As a result, the existing global and regional supply and production networks are increasingly coming under economic and political pressure to adapt. This is particularly true for “Factory Asia”.
The increase in geopolitical conflicts and geopolitically motivated economic policy measures is undermining the global rule-based economic order and is further weakening the role of the WTO. In addition, the US blockage of appointments to the WTO’s Appellate Body has led to the WTO’s dispute settlement system becoming dysfunctional, so that member states can no longer defend themselves effectively at WTO level against possible rule violations by other member states.
In recent years, countries in the Indo-Pacific region have concluded significant regional and bilateral trade agreements: In 2018, eleven countries in the region concluded the ambitious “Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP). This was followed, at the end of 2020, by the “Regional Comprehensive Economic Partnership” (RCEP), the world’s largest regional free trade agreement in terms of population and economic output of the countries covered. Taiwan is not a party to either agreement. In addition, the EU has signed comprehensive bilateral trade agreements with South Korea, Japan, Singapore and Vietnam since 2015. Negotiations have recently been concluded with New Zealand and are ongoing with other partners in the region (including Australia, India, and Indonesia) – but not with Taiwan.
Taiwan cannot participate in standards
The intensification of geopolitical conflicts and the accompanying weakening of the global rule-based economic order increase the uncertainty Taiwanese companies face in their foreign trade activities. At the same time, the various new bilateral and regional trade agreements between Taiwan’s trading partners and competitors in the Indo-Pacific region increasingly lead to an increasing disadvantage for Taiwanese companies in the reorganisation of regional and global production networks.
As a non-member, Taiwan does not benefit from the trade liberalisations specified in these agreements and does not take part in developing the rules and standards agreed therein. Moreover, the lack of own trade agreements hampers Taiwan’s efforts to reduce its economic dependence on China.
For Taiwan, joining the regional trade agreements as well as concluding bilateral trade or investment agreements with its most important trading partners would therefore be of considerable economic advantage. However, Taiwan’s accession to the RCEP seems out of reach for the foreseeable future, as this would require the consent of all parties to the agreement – including China. Taiwan’s accession to the CPTPP seems conceivable in principle. Both Taiwan and China have already applied for membership.
Increasing isolation of Taiwan would be costly
But, even a joint accession of Taiwan and China is vigorously rejected by China. Taiwan’s accession would require a unanimous vote of all eleven current CPTPP members – which seems unrealistic in the face of China’s opposition. The conclusion of bilateral trade or investment agreements with the EU, the US or other important trading partners would also likely meet with similarly strong opposition from China. Such agreements would thus only be feasible if Taiwan and its potential contractual partners were ready to face the likely retaliation from China.
For both Taiwan and its partners, an increasing isolation of Taiwan would come with considerable costs. Taiwan’s technological and economic potential, especially in the electronics industry, would be lost to the world. A long-term economic weakening of Taiwan would also increase the island’s economic dependency on China, possibly at the expense of the democratic and rule-of-law institutions built up over decades.
It is therefore important for Taiwan’s partners to carefully examine what possibilities and leeway they have to maintain or further strengthen economic cooperation with Taiwan? What diplomatic, economic, or even military countermeasures would they have to expect from China? And how could the associated risks be minimised?
Frank Bickenbach is Deputy Head of the Research Centre “International Trade and Investment” and a Senior Researcher at the Research Centre “Innovation and International Competition” at the Kiel Institute for the World Economy.
Silas Dreieris the coordinator of the Global China Conversations at the China Initiative of the Kiel Institute for the World Economy. He is also currently a Graduate Student of China Business and Economics at the University of Würzburg.
Wan-Hsin Liu is a Senior Researcher in the Research Centres “International Trade and Investment” and “Innovation and International Competition” at the Kiel Institute for the World Economy. She is also the coordinator of the Kiel Centre for Globalisation.
This article was written in the context of the Global China Conversations event series of the Kiel Institute for the World Economy (IfW). On Thursday (11 a.m., CET), Shin-Horng Chen, Vice President of the Chung-Hua Institution for Economic Research, and Sarah Kirchberger, Head of Asia-Pacific Strategy and Security at the Institute for Security Policy at Kiel University, will discuss the topic: “Tensions over Taiwan: What’s the Current Situation and What Challenges Arise for Businesses and the Economy?“. China.Table is the media partner of this event series.
Geopolitics
RCEP
Taiwan
Trade
Executive Moves
Peter Catterall is the new China and Mongolia correspondent for AFP. Catterall works from Beijing. He was previously a journalist at the tech media platform Pandaily.
Beijing has appointed several ambassadors to African countries: Li Qinfeng will succeed Chen Dong as ambassador to the Central African Republic. Wang Qing was appointed ambassador to Sierra Leone, replacing Hu Zhangliang. Zhao Weiping succeeds Zhang Yiming as ambassador to Namibia.
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Dessert
She said yes! The gentleman on the left in the picture just proposed to his girlfriend – in proper fashion on Valentine’s Day, which is also celebrated in China on 14 February. The two are standing in a tube in a huge aquarium. The scene of the romantic ritual is Zhongtai Ocean World in Changchun.
