Awakening – this is how Siemens CEO Roland Busch sums up his mood a few days after the end of the Asia-Pacific Conference (APC) in an interview with Amelie Richter. And his message to the German economy is that “innovation and innovative strength are still there.”
As a top executive, Busch is used to having to rally people. He has probably developed a good sense of what messages this requires. His reference to the innovative strength that still exists in the German economy is an expression of the exhaustion of politics and business in global industrial competition.
Competition from Asia – primarily from China – as well as geopolitical uncertainties and persistently bad news from flagship sectors, such as the automotive industry, have long been eroding Germany’s self-image. The German success model is not a given. However, the fate of the German economy is just as far from being sealed. This is what Busch wants to remind people of. Those who are exhausted are allowed to take a breather. But giving up is not an option.
While the APK is a thing of the past, the US presidential election is on the horizon. Certain voices in Taiwan believe that the decision between Kamala Harris and Donald Trump is more important for the island state than the presidential elections in their own country. The United States is Taiwan’s main protecting power. One of the two contenders for the White House is casting massive doubt on his willingness to protect Taiwan from a Chinese invasion: Donald Trump. Leonardo Pape captured the mood for us in Taipei just a few days before the election.
When Donald Trump talks about Taiwan, he increasingly has accusations for the country. While Kamala Harris tries to defend the global system of US alliances and partnerships, Trump’s foreign policy seems to primarily be a cost-benefit analysis. Taiwan is also feeling the effects of this, most recently in an interview with podcaster Joe Rogan in late October. “Taiwan has stolen our chip business,” Trump said in the podcast, alluding to the superiority of semiconductor manufacturer TSMC. He threatened to impose tariffs on Taiwanese chips and criticized Taiwan for seeking protection without paying for it.
Months ago, Trump had already called for Taiwan to pay for its defense. The USA is “no different than an insurance company.” As so often, Trump’s statements remained vague, but cast doubt on his willingness to defend Taiwan against China: “Taiwan is 9,500 miles away. It’s 68 miles away from China. A slight advantage, and China’s a massive piece of land, they could just bombard it,” said the Republican.
As domestic issues dominate the final spurt of the presidential election campaign, China and Taiwan are not playing a major role. However, hardly any other country is as strongly affected by the outcome of the election as Taiwan. Many observers consider the US elections more decisive than their own presidential elections last January.
After Trump’s geographical lesson in the summer, the Foreign Ministry in Taipei rushed to assure the public that Taiwan still had the support of both major parties in the US. The government is trying to maintain close contact with both Democrats and Republicans ahead of the elections. Vice President Hsiao Bi-khim, the former head of Taiwan’s representative office in the USA, is well-connected in Washington and Taiwan regularly receives US congressional delegations.
Trump enjoyed considerable popularity among the Taiwanese population for a long time. After his election victory in 2016, he accepted a congratulatory phone call from Taiwan’s then-President Tsai Ing-wen, which was unusual. Trump’s Secretary of State Mike Pompeo drove a particularly hard line against China and visited Taiwan several times after the end of Trump’s presidency. As recently as May this year, Pompeo met the new President William Lai Ching-te shortly after his inauguration.
Aside from a few political symbolic acts, Trump appeared to take little interest in Taiwan and in particular made no effort to actively shape trade relations. However, in a YouGov survey before the 2020 US presidential election, 42 percent of Taiwanese supported Donald Trump and only 30 percent supported Joe Biden. At the time, Taiwan was the only one of the eight Asian countries surveyed in which Trump was more popular than Biden.
A survey conducted for the US Brookings Institution in July of this year, which compared Trump and Biden’s approval ratings in Taiwan and South Korea, paints a different picture: Shortly before Joe Biden withdrew from the presidential race, only 17 percent of respondents in Taiwan supported a second term for Trump, while 23 percent of respondents supported Biden. The percentage of those who did not have a clear opinion or did not know an answer was striking, totaling almost 60 percent.
Chen Fang-yu, who researches Taiwan’s foreign policy at Soochow University in Taipei and with the think tank US Taiwan Watch, saw the results of the Brookings survey as a success for Joe Biden. He had noticeably succeeded in increasingly integrating Taiwan into the system of US alliances in the Indo-Pacific.
However, the public debate in Taiwan is still dominated by Donald Trump, who continues to receive support, but is also increasingly met with skepticism due to his negative statements. Kamala Harris, on the other hand, has not left any particular impression on most people in Taiwan, and this has practically not changed in recent months. Harris has rarely shown an explicit stance on Taiwan. She is expected to maintain Biden’s foreign policy in general.
Support for the Democrats and Republicans in Taiwan correlates with the perception of the US as a reliable partner and, above all, with its willingness to defend the country against a Chinese attack. In the Brookings survey, just over half of respondents trust that the US would “help Taiwan in the event of a conflict,” while 37 percent do not believe that the US would provide support – regardless of the outcome of the US election.
The partial mistrust of the US in Taiwan is also a product of the principle of “strategic ambiguity,” according to which the US does not unequivocally assure Taiwan of military support in the event of a Chinese attack. Biden’s repeated assurances to stand with Taiwan were all later qualified by the US government. Moreover, China and pro-China actors within Taiwan are using and reinforcing mistrust of the USA through targeted disinformation campaigns.
According to Chen Fang-yu, Trump’s isolationism could further fuel these tendencies. He also sees Trump’s self-proclaimed unpredictability as a form of deterrence, including towards China, but this undermines the trust of his partners in the United States’ reliability.
Chen believes Taiwan is preparing well for a possible second Trump term in office as far as possible. The country has already significantly increased its defense spending in recent years and is above the average of NATO countries, he says, and this should be shown to the USA. Taiwan’s current defense budget is around 17.5 billion euros, which is 2.5 percent of GDP.
According to Chen, representatives of large Taiwanese companies are also trying to establish contact with Trump’s confidants. Chen argues that Taiwan’s government should campaign for more investment in the US to counter accusations of Taiwan stealing the US semiconductor business. Backed by US subsidies, TSMC started building a new chip plant in Arizona in 2020, which is currently in the test production phase, and has announced the construction of additional plants. However, the company is also avoiding political appropriation and intends to continue producing its most advanced chips exclusively in Taiwan for the time being. Leonardo Pape
How do you perceive the atmosphere here in Delhi at the Asia-Pacific Conference?
Described in one word: awakening. We sense a really very positive mood. When I speak to our Indian partners and customers, everyone is in growth mode. A lot is happening in this country in every respect, whether it’s investment in infrastructure or manufacturing. For German companies, the revenue and the market are still relatively small. But they see the potential and are very willing to engage with this market and examine what needs to be done to gain a foothold.
The Indian representatives, be it Prime Minister Narendra Modi or Commerce Minister Piyush Goyal, have recently appeared very self-confident. How do you perceive this as APK Chairman and representative of a large German company?
The people I meet here in Asia are self-confident and well-educated – and not just in India. They have every reason to be and have a clear perspective on things. The growth naturally also gives them momentum and incredible self-confidence. Successes such as the moon landing also help. Few nations have made it to the moon. India is among them, and India wants to go to Mars. That creates self-confidence.
And how does it compare to innovation in Germany?
Innovation and innovative strength are still present in Germany, which is very important. We often talk ourselves down, which doesn’t reflect reality. We do an incredible amount in this area and have an incredibly strong SME sector – think of the many hidden champions that develop excellent technologies. Then there are the large industrial enterprises that have been driving innovation for decades and are still at the forefront today. But it is also a fact that technologies change very quickly. Artificial intelligence is now the topic of the hour, and this wave is rolling towards us. That means we need to be willing to change. This is the only way we can really incorporate these new technologies into our technology stack, in other words, into how we use technology – without limitations and extremely quickly.
The need to de-risk China was heard a lot here at the conference. What role can India and India’s innovations play in this regard?
First of all, I must emphasize that diversification is not related to China and does not automatically mean focusing on India alone. Any kind of one-sided dependency is not good. The Covid years have taught us that. I wouldn’t pin this down to individual countries, but to supply chains or market access. I believe that the markets in the Asia-Pacific region are also gradually demanding more dedicated innovations, by which I mean the requirements placed on new technologies, including in terms of price point and functionality. The way technology is used is somewhat different here than in Germany or the USA, for example. That is why local product development is playing an increasingly important role. However, not all companies in every country can afford this.
Is India being approached differently now than China was back then?
For the last 20 or 30 years, China has simply been the world’s extended workbench. If you wanted to bring a product onto the market at a lower cost, you designed it in your own country and then manufactured it in China. That worked well for decades. Gradually, more and more added value was created locally and some companies were founded that developed their own products. An ecosystem has emerged. It’s not just about manufacturing products but the entire supply chain and components. In addition, companies could rely on a very good infrastructure. India’s development was around ten years behind China for a long time. For example, there were constant power outages, and you can’t build a high-quality production facility if the power goes out twice a day. However, the foundations that will make more value creation possible in India are currently being laid. I believe India will catch up quickly, but there is still a long way to go to reach the same level.
And China?
The Chinese market is still the largest industrial market in the world. We are continuing to invest there. This means that we will increase our investments, defend and grow our market share, and develop new technologies in China.
One of the biggest concerns companies always mention when it comes to innovation is the regulatory environment. What difference do you see between India and China? Is it easier here?
We are dealing with various issues, such as sustainability, emission reduction or the Supply Chain Act, controlled by regulations. Of course, there are also local content regulations in many countries, which are designed to define and increase the share of domestic value creation, as the aim is to generate local jobs and investments. Other regulations are about local standards. However, stable regulations also mean investment security for companies. I don’t think the two countries differ much when it comes to local content. When it comes to international standards, the two countries vary slightly. We are not particularly happy about this because there are already internationally established standards and additional standards increase complexity.
Is India viewed differently than the People’s Republic in terms of data security?
Data hacks occur everywhere and across borders. Data security and the protection of data, and consequently intellectual property rights, are very important issues. The way this is handled varies. Data generated in China, for example, cannot leave the country. But there is also movement. We discussed this when Li Qiang was in Germany and there are already initial pilot projects to approve cross-border data traffic. As I said, each country has its own regulations and we comply with them. In Europe, it’s mainly about storing more data on local European servers. That’s why many companies are also working towards setting up more data centers.
November 4, 2024; 4:30 p.m. CET (11:30 p.m. Beijing Time)
Center for Strategic and International Studies, Webinar: China in the Middle East More
November 6, 2024; 11 a.m. CET (6 p.m. Beijing Time)
Sino German Center at Frankfurt School, Webinar: The US Presidential Election and the Future of the US-China Relations More
November 7, 2024; 1 p.m. CET Beijing Time
EU Chamber of Commerce in China, lectures (in Shanghai): Dialogue with Shanghai Government: Driving European SMEs’ Growth in China More
November 8, 2024; 7:30 p.m. CET
Confucius Institute, Webinar: The Ecosystem of Chinese Film Festivals and Their Contribution to the Diversity of Film Culture More
On Oct. 31, the EU Commission initiated formal proceedings against the online platform Temu under the Digital Services Act (DSA). The move follows a preliminary assessment of Temu’s risk assessment report and Temu’s responses to the Commission’s previous requests for information. Temu is suspected of having violated various provisions of the DSA.
The problem is urgent because Temu is growing so rapidly. The Chinese company started its European expansion in 2023. The EU Commission classified Temu as a Very Large Online Platform (VLOP) in May 2024. In February, Temu stated that it already had 75 million monthly active users in the EU; this figure has now risen to 92 million.
The European consumer organization BEUC welcomed the Commission’s move: “It is not fair to consumers, nor to the many companies that comply with the rules, that certain companies like Temu get away with flouting the law“, said Fernando Hortal Foronda, Digital Policy Officer at BEUC.
The investigation focuses on the sale of illegal products, the potentially addictive design of the platform, the recommendation algorithms and access to data for researchers. Specifically, the Commission is investigating:
During the procedure, the Commission may take additional measures, such as interim measures or fines for non-compliance with its instructions. BEUC’s Hortal emphasized that the Commission must keep up the pressure to ensure that Temu complies with the rules as quickly as possible. There is no time limit for the completion of the investigations.
A representative of the Commission said that Temu cooperates well with the Commission and also responds quickly to requests. Temu is also considering joining the Memorandum of Understanding (MoU) on the sale of counterfeit goods on the Internet. This is a voluntary agreement supported by the European Commission.
The signatories are working together to prevent the online sale of counterfeit products in Europe. They include online retailers Amazon, Alibaba and eBay as well as brands such as Adidas, Nike, Hermes and Moncler. According to Reuters, Temu is to give a presentation at a meeting of the MoU members on Nov. 11 as a “potential new signatory”. vis
The road to making the German economy less dependent on the People’s Republic of China is long. A study by the Rhodium Group entitled “Don’t Stop Believin’: The Inexorable Rise of German FDI in China” identifies German companies more than ever as the driving force behind European direct investment in the country in 2024.
It found that German companies were responsible for an estimated 57 percent of all EU greenfield investments in China in the first half of the year. In 2023, Germany’s share was even higher at 62 percent and again in 2022, when the German share climbed to a record 71 percent. Unsurprisingly, Rhodium attributes a special role to the German automotive industry.
Rhodium estimates the total amount of investments in the second quarter at 3.6 billion euros. However, the authors assume that their figures are only an approximation and that the actual volume of investment could be “much higher.” In the last two years, around 80 investments have been identified whose volumes were not disclosed and thus not included in the estimates. The financial commitment of smaller and medium-sized companies may also be underrepresented, it says.
The high level of willingness for continued growth in China is surprising given that growth in the second-largest economy is steadily slowing down. Even though the government’s official figures for the current year range between 4.5 and 5.0 percent, Rhodium expects actual growth to amount to 3.5 percent at most.
The number of competitive rivals from the People’s Republic itself is also rising, which is increasingly putting a strain on companies due to the uneven competitive conditions between domestic and foreign companies. A survey of 271 foreign executives of multinational corporations by financial consultancy Interchina revealed that only 14 percent of companies believe that their foreign roots can still give them a competitive advantage in the long term. One in five companies believes that its competitive edge from its foreign identity is already more or less exhausted. A further 51 percent expect this to happen in the next five years. grz
ASEAN countries exported more to the United States than China for the second consecutive quarter. Experts see this as a sign that global supply chains are shifting in the wake of trade disputes between the USA and China and China’s slowing growth. According to Nikkei, ASEAN nations shipped goods worth 74 billion US dollars to the USA between April and June, eleven percent more than in the previous year. By contrast, only 71 billion dollars worth of goods went to China.
“China’s prolonged lockdown [during COVID] led many … moving production back home or to nearby countries,” explained Jun Neri, Chief Economist at the Bank of the Philippines. The US restrictions on Chinese imports led to a restructuring of global supply chains – especially those that the US government imposed on advanced semiconductors in October 2022. Vietnam’s semiconductor and machinery exports to the US increased by 41 percent, the Philippines’ by 36 percent, Thailand’s by 16 percent, and Malaysia’s by 9 percent.
Vietnam benefits in particular from the trade disputes between the USA and China. The country is attracting new investment from exporters looking for alternatives to China, particularly in semiconductor production. Malaysia and Thailand are also looking to expand their semiconductor industries significantly. aiko
The European Commission has initiated an anti-dumping proceeding against Chinese imports of choline chloride. It published an announcement to this effect on Thursday. The food supplement is used in industrial pig and poultry feed to boost animal growth.
The Italian company Balchem Italia Srl and Taminco BV from Belgium filed a corresponding request in Brussels on Sept. 17. According to the complainants, the use of domestic prices and costs in the People’s Republic of China is not appropriate due to significant distortions. They provided evidence that the volume and prices of the imported product have had a negative impact on the sales volumes, the prices charged and the market share held by the EU industry. This, in turn, has had a very negative effect on the financial situation of the EU industry, justifying the initiation of the anti-dumping proceeding.
The EU and China are currently engaged in a trade dispute. At the beginning of the month, the People’s Republic of China imposed temporary anti-dumping measures against EU brandy. This was seen as a tit-for-tat reaction to the previously announced EU countervailing duties on electric vehicles manufactured in China. mcl
Young people in some of China’s most prosperous cities have since last weekend been staging playful acts of defiance of the official ban on open-air Halloween celebrations, which indicates that rebellious spirit among the Chinese urban youth still exists.
There are no events similar to Halloween or carnival in Chinese tradition. But Halloween has been gaining growing popularity in big cities. Despite well-circulated information about the government’s control of Halloween-related activities, many cosplayers in Shanghai, Hangzhou, and Guangzhou still showed up in the streets to win cheers and applause from thousands of onlookers.
After surviving the draconian COVID lockdowns, which ended in late 2022, young people in Shanghai flocked to the streets in costumes designed with remarkable creativity on Halloween and the following weekend in 2023. Some of the designs were barely disguised ridicule of authorities:
A man with a surveillance camera in the place of his head standing between a policewoman and a policeman on duty: this image, a pungent mocking of ubiquitous surveillance cameras in China, will stay in the memory of many. A girl pasted pieces of white paper all over her body, alluding to the white paper demonstrations the previous year; More than one cosplayer dressed up as Covid test workers in white protective overalls, holding huge cotton swabs, a reminder of endless Covid tests during the pandemic and the traumatizing lockdown experiences. The most provocative one, though, was a signpost worn as a headdress by a young man. The text on the signpost, in a parody of a well-worn tourism promotion slogan, read: I am in Shanghai wishing you die – a veiled curse on Xi Jinping.
The 2023 event was unexpected for authorities, which won’t tolerate any public criticism of the regime. Some cosplayers wearing provocative costumes were arrested, put in brief custody, and later released.
This year, Shanghai authorities started from mid-October to take preventive steps to avoid last year’s embarrassment. Universities, instructed by the government, told students not to attend “unofficial activities,” threatening potential participants with disciplinary actions. Bars, cafes and clubs were warned not to admit customers in costumes and dramatic make-ups. Social media videos and posts about Halloween parties were censored.
Last weekend, a big army of police blocked sidewalks on Shanghai’s Jülu Road, where the biggest crowds were found during last year’s street parties. However, people still turned up there on Friday. Those in costumes were stopped, scolded, and forced to give their personal identity information before being dismissed. But fun-seekers didn’t give up.
After the word that Jülu Road became a forbidden zone was spread, partygoers gathered in a downtown park. Police followed and escorted away some cosplayers and took away some others by police vans. The park announced subsequently that it would be closed from Sunday for “internal adjustments.” Similar dramas were also staged in Hangzhou and Guangzhou on Saturday and Sunday.
China’s youth born after 1990 grew up in an environment that is socially competitive, consumerist, and, at the same time, increasingly nationalistic. Few expected some of them would spearhead demonstrations against the government’s extreme lockdown measures towards the end of the Covid pandemic.
It would be far-fetched to categorically label the behavior of Halloween partygoers as resisting the government, except those in costumes with obvious critical messages. Their costumes this year were already less incendiary than last year’s. But their insistence on having fun in the face of the government’s crackdown is still remarkable. After all, the Chinese government is known for cruelly punishing those challenging its authority.
Last week in Shanghai and Hangzhou, police escorted away cosplayers wearing costumes like Buddha, Jesus, US socialite Kim Kardashian, and the controversial film star Fan Bingbing; They checked a big doll standing by the door of a shop to make sure it wasn’t a person wearing a costume; They also checked the ID of a man dressed up like KFC founder Colonel Sanders to see if he was a foreigner or Chinese. Such scenes made the authorities look comically weak.
Like in the white paper demonstrations, the funny episode of this year’s Halloween in China showed again that the Chinese government is not as strong as it seems and Chinese youth are not as tame as many believed.
Maria Grazia Davino will become head of the European business of Chinese car manufacturer BYD on December 1st. She previously headed Stellanti’s UK operations. As Regional Director, Davino will be primarily responsible for activities in Germany, Switzerland, Poland, Austria and the Czech Republic. BYD is currently building production plants in Hungary and Turkey to expand its local production capacity and establish a larger distribution network.
Rodrigo Lau has taken over the position of Cardio Renal Metabolic TA Head China at Boehringer Ingelheim. Lau previously worked for the German pharmaceutical company as General Manager & HP Head Thailand in Bangkok. His new position is based in Shanghai.
Is something changing in your organization? Let us know at heads@table.media!
The fact that pets and their owners not only become more alike over time in appearance but also in fashion was demonstrated last week at the third “Pet Fashion Week” in Shanghai. The pet supplies company Petstar, among others, presented its products there. However, this time, the catwalk was dominated by dogs.
Awakening – this is how Siemens CEO Roland Busch sums up his mood a few days after the end of the Asia-Pacific Conference (APC) in an interview with Amelie Richter. And his message to the German economy is that “innovation and innovative strength are still there.”
As a top executive, Busch is used to having to rally people. He has probably developed a good sense of what messages this requires. His reference to the innovative strength that still exists in the German economy is an expression of the exhaustion of politics and business in global industrial competition.
Competition from Asia – primarily from China – as well as geopolitical uncertainties and persistently bad news from flagship sectors, such as the automotive industry, have long been eroding Germany’s self-image. The German success model is not a given. However, the fate of the German economy is just as far from being sealed. This is what Busch wants to remind people of. Those who are exhausted are allowed to take a breather. But giving up is not an option.
While the APK is a thing of the past, the US presidential election is on the horizon. Certain voices in Taiwan believe that the decision between Kamala Harris and Donald Trump is more important for the island state than the presidential elections in their own country. The United States is Taiwan’s main protecting power. One of the two contenders for the White House is casting massive doubt on his willingness to protect Taiwan from a Chinese invasion: Donald Trump. Leonardo Pape captured the mood for us in Taipei just a few days before the election.
When Donald Trump talks about Taiwan, he increasingly has accusations for the country. While Kamala Harris tries to defend the global system of US alliances and partnerships, Trump’s foreign policy seems to primarily be a cost-benefit analysis. Taiwan is also feeling the effects of this, most recently in an interview with podcaster Joe Rogan in late October. “Taiwan has stolen our chip business,” Trump said in the podcast, alluding to the superiority of semiconductor manufacturer TSMC. He threatened to impose tariffs on Taiwanese chips and criticized Taiwan for seeking protection without paying for it.
Months ago, Trump had already called for Taiwan to pay for its defense. The USA is “no different than an insurance company.” As so often, Trump’s statements remained vague, but cast doubt on his willingness to defend Taiwan against China: “Taiwan is 9,500 miles away. It’s 68 miles away from China. A slight advantage, and China’s a massive piece of land, they could just bombard it,” said the Republican.
As domestic issues dominate the final spurt of the presidential election campaign, China and Taiwan are not playing a major role. However, hardly any other country is as strongly affected by the outcome of the election as Taiwan. Many observers consider the US elections more decisive than their own presidential elections last January.
After Trump’s geographical lesson in the summer, the Foreign Ministry in Taipei rushed to assure the public that Taiwan still had the support of both major parties in the US. The government is trying to maintain close contact with both Democrats and Republicans ahead of the elections. Vice President Hsiao Bi-khim, the former head of Taiwan’s representative office in the USA, is well-connected in Washington and Taiwan regularly receives US congressional delegations.
Trump enjoyed considerable popularity among the Taiwanese population for a long time. After his election victory in 2016, he accepted a congratulatory phone call from Taiwan’s then-President Tsai Ing-wen, which was unusual. Trump’s Secretary of State Mike Pompeo drove a particularly hard line against China and visited Taiwan several times after the end of Trump’s presidency. As recently as May this year, Pompeo met the new President William Lai Ching-te shortly after his inauguration.
Aside from a few political symbolic acts, Trump appeared to take little interest in Taiwan and in particular made no effort to actively shape trade relations. However, in a YouGov survey before the 2020 US presidential election, 42 percent of Taiwanese supported Donald Trump and only 30 percent supported Joe Biden. At the time, Taiwan was the only one of the eight Asian countries surveyed in which Trump was more popular than Biden.
A survey conducted for the US Brookings Institution in July of this year, which compared Trump and Biden’s approval ratings in Taiwan and South Korea, paints a different picture: Shortly before Joe Biden withdrew from the presidential race, only 17 percent of respondents in Taiwan supported a second term for Trump, while 23 percent of respondents supported Biden. The percentage of those who did not have a clear opinion or did not know an answer was striking, totaling almost 60 percent.
Chen Fang-yu, who researches Taiwan’s foreign policy at Soochow University in Taipei and with the think tank US Taiwan Watch, saw the results of the Brookings survey as a success for Joe Biden. He had noticeably succeeded in increasingly integrating Taiwan into the system of US alliances in the Indo-Pacific.
However, the public debate in Taiwan is still dominated by Donald Trump, who continues to receive support, but is also increasingly met with skepticism due to his negative statements. Kamala Harris, on the other hand, has not left any particular impression on most people in Taiwan, and this has practically not changed in recent months. Harris has rarely shown an explicit stance on Taiwan. She is expected to maintain Biden’s foreign policy in general.
Support for the Democrats and Republicans in Taiwan correlates with the perception of the US as a reliable partner and, above all, with its willingness to defend the country against a Chinese attack. In the Brookings survey, just over half of respondents trust that the US would “help Taiwan in the event of a conflict,” while 37 percent do not believe that the US would provide support – regardless of the outcome of the US election.
The partial mistrust of the US in Taiwan is also a product of the principle of “strategic ambiguity,” according to which the US does not unequivocally assure Taiwan of military support in the event of a Chinese attack. Biden’s repeated assurances to stand with Taiwan were all later qualified by the US government. Moreover, China and pro-China actors within Taiwan are using and reinforcing mistrust of the USA through targeted disinformation campaigns.
According to Chen Fang-yu, Trump’s isolationism could further fuel these tendencies. He also sees Trump’s self-proclaimed unpredictability as a form of deterrence, including towards China, but this undermines the trust of his partners in the United States’ reliability.
Chen believes Taiwan is preparing well for a possible second Trump term in office as far as possible. The country has already significantly increased its defense spending in recent years and is above the average of NATO countries, he says, and this should be shown to the USA. Taiwan’s current defense budget is around 17.5 billion euros, which is 2.5 percent of GDP.
According to Chen, representatives of large Taiwanese companies are also trying to establish contact with Trump’s confidants. Chen argues that Taiwan’s government should campaign for more investment in the US to counter accusations of Taiwan stealing the US semiconductor business. Backed by US subsidies, TSMC started building a new chip plant in Arizona in 2020, which is currently in the test production phase, and has announced the construction of additional plants. However, the company is also avoiding political appropriation and intends to continue producing its most advanced chips exclusively in Taiwan for the time being. Leonardo Pape
How do you perceive the atmosphere here in Delhi at the Asia-Pacific Conference?
Described in one word: awakening. We sense a really very positive mood. When I speak to our Indian partners and customers, everyone is in growth mode. A lot is happening in this country in every respect, whether it’s investment in infrastructure or manufacturing. For German companies, the revenue and the market are still relatively small. But they see the potential and are very willing to engage with this market and examine what needs to be done to gain a foothold.
The Indian representatives, be it Prime Minister Narendra Modi or Commerce Minister Piyush Goyal, have recently appeared very self-confident. How do you perceive this as APK Chairman and representative of a large German company?
The people I meet here in Asia are self-confident and well-educated – and not just in India. They have every reason to be and have a clear perspective on things. The growth naturally also gives them momentum and incredible self-confidence. Successes such as the moon landing also help. Few nations have made it to the moon. India is among them, and India wants to go to Mars. That creates self-confidence.
And how does it compare to innovation in Germany?
Innovation and innovative strength are still present in Germany, which is very important. We often talk ourselves down, which doesn’t reflect reality. We do an incredible amount in this area and have an incredibly strong SME sector – think of the many hidden champions that develop excellent technologies. Then there are the large industrial enterprises that have been driving innovation for decades and are still at the forefront today. But it is also a fact that technologies change very quickly. Artificial intelligence is now the topic of the hour, and this wave is rolling towards us. That means we need to be willing to change. This is the only way we can really incorporate these new technologies into our technology stack, in other words, into how we use technology – without limitations and extremely quickly.
The need to de-risk China was heard a lot here at the conference. What role can India and India’s innovations play in this regard?
First of all, I must emphasize that diversification is not related to China and does not automatically mean focusing on India alone. Any kind of one-sided dependency is not good. The Covid years have taught us that. I wouldn’t pin this down to individual countries, but to supply chains or market access. I believe that the markets in the Asia-Pacific region are also gradually demanding more dedicated innovations, by which I mean the requirements placed on new technologies, including in terms of price point and functionality. The way technology is used is somewhat different here than in Germany or the USA, for example. That is why local product development is playing an increasingly important role. However, not all companies in every country can afford this.
Is India being approached differently now than China was back then?
For the last 20 or 30 years, China has simply been the world’s extended workbench. If you wanted to bring a product onto the market at a lower cost, you designed it in your own country and then manufactured it in China. That worked well for decades. Gradually, more and more added value was created locally and some companies were founded that developed their own products. An ecosystem has emerged. It’s not just about manufacturing products but the entire supply chain and components. In addition, companies could rely on a very good infrastructure. India’s development was around ten years behind China for a long time. For example, there were constant power outages, and you can’t build a high-quality production facility if the power goes out twice a day. However, the foundations that will make more value creation possible in India are currently being laid. I believe India will catch up quickly, but there is still a long way to go to reach the same level.
And China?
The Chinese market is still the largest industrial market in the world. We are continuing to invest there. This means that we will increase our investments, defend and grow our market share, and develop new technologies in China.
One of the biggest concerns companies always mention when it comes to innovation is the regulatory environment. What difference do you see between India and China? Is it easier here?
We are dealing with various issues, such as sustainability, emission reduction or the Supply Chain Act, controlled by regulations. Of course, there are also local content regulations in many countries, which are designed to define and increase the share of domestic value creation, as the aim is to generate local jobs and investments. Other regulations are about local standards. However, stable regulations also mean investment security for companies. I don’t think the two countries differ much when it comes to local content. When it comes to international standards, the two countries vary slightly. We are not particularly happy about this because there are already internationally established standards and additional standards increase complexity.
Is India viewed differently than the People’s Republic in terms of data security?
Data hacks occur everywhere and across borders. Data security and the protection of data, and consequently intellectual property rights, are very important issues. The way this is handled varies. Data generated in China, for example, cannot leave the country. But there is also movement. We discussed this when Li Qiang was in Germany and there are already initial pilot projects to approve cross-border data traffic. As I said, each country has its own regulations and we comply with them. In Europe, it’s mainly about storing more data on local European servers. That’s why many companies are also working towards setting up more data centers.
November 4, 2024; 4:30 p.m. CET (11:30 p.m. Beijing Time)
Center for Strategic and International Studies, Webinar: China in the Middle East More
November 6, 2024; 11 a.m. CET (6 p.m. Beijing Time)
Sino German Center at Frankfurt School, Webinar: The US Presidential Election and the Future of the US-China Relations More
November 7, 2024; 1 p.m. CET Beijing Time
EU Chamber of Commerce in China, lectures (in Shanghai): Dialogue with Shanghai Government: Driving European SMEs’ Growth in China More
November 8, 2024; 7:30 p.m. CET
Confucius Institute, Webinar: The Ecosystem of Chinese Film Festivals and Their Contribution to the Diversity of Film Culture More
On Oct. 31, the EU Commission initiated formal proceedings against the online platform Temu under the Digital Services Act (DSA). The move follows a preliminary assessment of Temu’s risk assessment report and Temu’s responses to the Commission’s previous requests for information. Temu is suspected of having violated various provisions of the DSA.
The problem is urgent because Temu is growing so rapidly. The Chinese company started its European expansion in 2023. The EU Commission classified Temu as a Very Large Online Platform (VLOP) in May 2024. In February, Temu stated that it already had 75 million monthly active users in the EU; this figure has now risen to 92 million.
The European consumer organization BEUC welcomed the Commission’s move: “It is not fair to consumers, nor to the many companies that comply with the rules, that certain companies like Temu get away with flouting the law“, said Fernando Hortal Foronda, Digital Policy Officer at BEUC.
The investigation focuses on the sale of illegal products, the potentially addictive design of the platform, the recommendation algorithms and access to data for researchers. Specifically, the Commission is investigating:
During the procedure, the Commission may take additional measures, such as interim measures or fines for non-compliance with its instructions. BEUC’s Hortal emphasized that the Commission must keep up the pressure to ensure that Temu complies with the rules as quickly as possible. There is no time limit for the completion of the investigations.
A representative of the Commission said that Temu cooperates well with the Commission and also responds quickly to requests. Temu is also considering joining the Memorandum of Understanding (MoU) on the sale of counterfeit goods on the Internet. This is a voluntary agreement supported by the European Commission.
The signatories are working together to prevent the online sale of counterfeit products in Europe. They include online retailers Amazon, Alibaba and eBay as well as brands such as Adidas, Nike, Hermes and Moncler. According to Reuters, Temu is to give a presentation at a meeting of the MoU members on Nov. 11 as a “potential new signatory”. vis
The road to making the German economy less dependent on the People’s Republic of China is long. A study by the Rhodium Group entitled “Don’t Stop Believin’: The Inexorable Rise of German FDI in China” identifies German companies more than ever as the driving force behind European direct investment in the country in 2024.
It found that German companies were responsible for an estimated 57 percent of all EU greenfield investments in China in the first half of the year. In 2023, Germany’s share was even higher at 62 percent and again in 2022, when the German share climbed to a record 71 percent. Unsurprisingly, Rhodium attributes a special role to the German automotive industry.
Rhodium estimates the total amount of investments in the second quarter at 3.6 billion euros. However, the authors assume that their figures are only an approximation and that the actual volume of investment could be “much higher.” In the last two years, around 80 investments have been identified whose volumes were not disclosed and thus not included in the estimates. The financial commitment of smaller and medium-sized companies may also be underrepresented, it says.
The high level of willingness for continued growth in China is surprising given that growth in the second-largest economy is steadily slowing down. Even though the government’s official figures for the current year range between 4.5 and 5.0 percent, Rhodium expects actual growth to amount to 3.5 percent at most.
The number of competitive rivals from the People’s Republic itself is also rising, which is increasingly putting a strain on companies due to the uneven competitive conditions between domestic and foreign companies. A survey of 271 foreign executives of multinational corporations by financial consultancy Interchina revealed that only 14 percent of companies believe that their foreign roots can still give them a competitive advantage in the long term. One in five companies believes that its competitive edge from its foreign identity is already more or less exhausted. A further 51 percent expect this to happen in the next five years. grz
ASEAN countries exported more to the United States than China for the second consecutive quarter. Experts see this as a sign that global supply chains are shifting in the wake of trade disputes between the USA and China and China’s slowing growth. According to Nikkei, ASEAN nations shipped goods worth 74 billion US dollars to the USA between April and June, eleven percent more than in the previous year. By contrast, only 71 billion dollars worth of goods went to China.
“China’s prolonged lockdown [during COVID] led many … moving production back home or to nearby countries,” explained Jun Neri, Chief Economist at the Bank of the Philippines. The US restrictions on Chinese imports led to a restructuring of global supply chains – especially those that the US government imposed on advanced semiconductors in October 2022. Vietnam’s semiconductor and machinery exports to the US increased by 41 percent, the Philippines’ by 36 percent, Thailand’s by 16 percent, and Malaysia’s by 9 percent.
Vietnam benefits in particular from the trade disputes between the USA and China. The country is attracting new investment from exporters looking for alternatives to China, particularly in semiconductor production. Malaysia and Thailand are also looking to expand their semiconductor industries significantly. aiko
The European Commission has initiated an anti-dumping proceeding against Chinese imports of choline chloride. It published an announcement to this effect on Thursday. The food supplement is used in industrial pig and poultry feed to boost animal growth.
The Italian company Balchem Italia Srl and Taminco BV from Belgium filed a corresponding request in Brussels on Sept. 17. According to the complainants, the use of domestic prices and costs in the People’s Republic of China is not appropriate due to significant distortions. They provided evidence that the volume and prices of the imported product have had a negative impact on the sales volumes, the prices charged and the market share held by the EU industry. This, in turn, has had a very negative effect on the financial situation of the EU industry, justifying the initiation of the anti-dumping proceeding.
The EU and China are currently engaged in a trade dispute. At the beginning of the month, the People’s Republic of China imposed temporary anti-dumping measures against EU brandy. This was seen as a tit-for-tat reaction to the previously announced EU countervailing duties on electric vehicles manufactured in China. mcl
Young people in some of China’s most prosperous cities have since last weekend been staging playful acts of defiance of the official ban on open-air Halloween celebrations, which indicates that rebellious spirit among the Chinese urban youth still exists.
There are no events similar to Halloween or carnival in Chinese tradition. But Halloween has been gaining growing popularity in big cities. Despite well-circulated information about the government’s control of Halloween-related activities, many cosplayers in Shanghai, Hangzhou, and Guangzhou still showed up in the streets to win cheers and applause from thousands of onlookers.
After surviving the draconian COVID lockdowns, which ended in late 2022, young people in Shanghai flocked to the streets in costumes designed with remarkable creativity on Halloween and the following weekend in 2023. Some of the designs were barely disguised ridicule of authorities:
A man with a surveillance camera in the place of his head standing between a policewoman and a policeman on duty: this image, a pungent mocking of ubiquitous surveillance cameras in China, will stay in the memory of many. A girl pasted pieces of white paper all over her body, alluding to the white paper demonstrations the previous year; More than one cosplayer dressed up as Covid test workers in white protective overalls, holding huge cotton swabs, a reminder of endless Covid tests during the pandemic and the traumatizing lockdown experiences. The most provocative one, though, was a signpost worn as a headdress by a young man. The text on the signpost, in a parody of a well-worn tourism promotion slogan, read: I am in Shanghai wishing you die – a veiled curse on Xi Jinping.
The 2023 event was unexpected for authorities, which won’t tolerate any public criticism of the regime. Some cosplayers wearing provocative costumes were arrested, put in brief custody, and later released.
This year, Shanghai authorities started from mid-October to take preventive steps to avoid last year’s embarrassment. Universities, instructed by the government, told students not to attend “unofficial activities,” threatening potential participants with disciplinary actions. Bars, cafes and clubs were warned not to admit customers in costumes and dramatic make-ups. Social media videos and posts about Halloween parties were censored.
Last weekend, a big army of police blocked sidewalks on Shanghai’s Jülu Road, where the biggest crowds were found during last year’s street parties. However, people still turned up there on Friday. Those in costumes were stopped, scolded, and forced to give their personal identity information before being dismissed. But fun-seekers didn’t give up.
After the word that Jülu Road became a forbidden zone was spread, partygoers gathered in a downtown park. Police followed and escorted away some cosplayers and took away some others by police vans. The park announced subsequently that it would be closed from Sunday for “internal adjustments.” Similar dramas were also staged in Hangzhou and Guangzhou on Saturday and Sunday.
China’s youth born after 1990 grew up in an environment that is socially competitive, consumerist, and, at the same time, increasingly nationalistic. Few expected some of them would spearhead demonstrations against the government’s extreme lockdown measures towards the end of the Covid pandemic.
It would be far-fetched to categorically label the behavior of Halloween partygoers as resisting the government, except those in costumes with obvious critical messages. Their costumes this year were already less incendiary than last year’s. But their insistence on having fun in the face of the government’s crackdown is still remarkable. After all, the Chinese government is known for cruelly punishing those challenging its authority.
Last week in Shanghai and Hangzhou, police escorted away cosplayers wearing costumes like Buddha, Jesus, US socialite Kim Kardashian, and the controversial film star Fan Bingbing; They checked a big doll standing by the door of a shop to make sure it wasn’t a person wearing a costume; They also checked the ID of a man dressed up like KFC founder Colonel Sanders to see if he was a foreigner or Chinese. Such scenes made the authorities look comically weak.
Like in the white paper demonstrations, the funny episode of this year’s Halloween in China showed again that the Chinese government is not as strong as it seems and Chinese youth are not as tame as many believed.
Maria Grazia Davino will become head of the European business of Chinese car manufacturer BYD on December 1st. She previously headed Stellanti’s UK operations. As Regional Director, Davino will be primarily responsible for activities in Germany, Switzerland, Poland, Austria and the Czech Republic. BYD is currently building production plants in Hungary and Turkey to expand its local production capacity and establish a larger distribution network.
Rodrigo Lau has taken over the position of Cardio Renal Metabolic TA Head China at Boehringer Ingelheim. Lau previously worked for the German pharmaceutical company as General Manager & HP Head Thailand in Bangkok. His new position is based in Shanghai.
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The fact that pets and their owners not only become more alike over time in appearance but also in fashion was demonstrated last week at the third “Pet Fashion Week” in Shanghai. The pet supplies company Petstar, among others, presented its products there. However, this time, the catwalk was dominated by dogs.