Profile: Harald Kumpfert – Sustainable in China’s Ruhr area
Dear reader,
Since the production of iPhone components is less and less profitable, Foxconn plans to change its business. Instead of iPhones, the Taiwanese electronics company wants to produce EVs in the future. Frank Sieren took a closer look at the first three models and their underlying strategy. And just like with iPhones, Foxconn doesn’t want to sell its cars under its own brand. Will the company achieve similar success, just like it did with the manufacturing of iPhones? In any case, Foxconn president Young Liu is not lacking in self-confidence: When it comes to expertise in software and computer chips, the company is already far ahead of many traditional carmakers, according to Liu. Our author also finds several reasons why Foxconn’s ambitious EV plans could work out.
The mood in Chinese society, on the other hand, is much worse. Power shortages, a strict Covid policy – and now prices for vegetables are climbing as well. Heavy rainfall and flooding in one of the country’s largest vegetable-growing regions are driving up prices. Rumors are already circulating that food could become scarce in some places. The fear of inflation is spreading rapidly. Ning Wang has taken a closer look at the situation and reveals just how much pressure is mounting on the government in Beijing. It quickly becomes evident that, as the world’s biggest exporter, rising prices are also having an impact on foreign companies in China. Could international supply chains even be affected by the threat of inflation in China?
Foxconn is one of the world’s largest contract manufacturers and suppliers of consumer electronics. The Taiwanese company, known in Asia as Hong Hai, manufactures an average of six out of ten smartphones for Apple. But since profit margins in its core business have been steadily declining, the group is looking to broaden its reach and expand into the electric vehicle segment. In October, Foxconn already unveiled its first three EV models at a presentation in Taipei: a sedan, an SUV, and a bus.
The sedan is the result of a collaboration with Italian design firm Pininfarina from Cambiano. The Model E, as the car has been christened in reference to Tesla’s vehicles, is expected to have a range of 750 kilometers. More aimed at the mass market is the so-called Model C, an SUV with a range of 700 kilometers, which should be available for around €30,000 after the start of production in 2023. The e-bus, called Model T, could hit the roads as early as 2022. According to Taiwan’s Vice-Governor Shen Jong-chin, route service in Kaohsiung in the south of the country is planned as early as next year. According to Foxconn, the range of the city bus, which is also expected to meet all regulations of the US Federal Transit Administration (FTA), is 400 kilometers. However, Foxconn does not want to sell the vehicles under its own name. Instead, they will be produced under the name Foxtron for other brands in the automotive industry.
According to the company’s information, cooperation partnerships are already signed with the US EV manufacturer Fisker and Taiwan’s Yulon Motor Group. There is also speculation about a collaboration with Apple. According to rumors, the tech giant from Silicon Valley has been looking for a suitable contract manufacturer for its first Apple car for quite some time (China.Table reported).
Supply chains and distribution network are ready
Last year alone, the Foxconn Group, founded in 1974, invested around NT$10 billion (about €310 million) in the development of electric vehicles. Over the next two years, investments are expected to increase. A good supply chain and sales network have already been established, said Young Liu, the group’s president, at the vehicle presentation. And regarding software and computer chip expertise, the company is already ahead of many traditional carmakers, Liu said. In a bid to catch up in other areas, Foxconn had acquired a factory of US EV start-up Lordstown Motors from Ohio, formerly owned by GM, for the equivalent of €200 million in early October. Foxconn has also signed joint ventures with Chinese carmaker Geely and European manufacturer Stellantis (Chrysler, Peugeot, Citroën, Fiat) to further develop in-car and connected-car technologies.
As early as next year, between 150,000 and 200,000 Foxtron EVs are to be manufactured for the Southeast Asian market in production facilities in Thailand. The Thai energy company PTT is also on board. And in the future, Foxconn also wants to produce in Europe, India, and Latin America. “Indirect” cooperation with German car manufacturers was included, explained company boss Liu, without giving further details.
Higher margins
Because the global auto industry continues to suffer from a semiconductor shortage, Foxconn acquired a chip factory from Taiwanese manufacturer Macronix International back in August. The factory is expected to supply semiconductors for 30,000 EVs per month by 2024. Production is scheduled to start at the end of this year. In 2016, Foxconn had previously teamed up with microprocessor specialist ARM, owned by Japanese tech giant Softbank, to set up a chip design center in Shenzhen, southern China. And in 2019, Foxconn had unsuccessfully tried to take over a chip manufacturing facility owned by Japan’s Fujitsu Group.
Over the next five years, Foxconn aims to generate €30 billion in revenue annually from its EV business and increase its gross margin from currently six percent to ten percent. The target is a global EV market share of ten percent. The company’s revenue climbed only marginally by 0.3 percent to $181 billion last year. Net profit has already been on the decline since 2017.
It’s only vegetables, one might think. Especially for cauliflower and broccoli, prices have recently risen enormously. According to the Ministry of Commerce in Beijing, consumers now have to pay about 50 percent more for the flower vegetable. Prices for Spinach have increased by almost 160 percent, according to Bloomberg calculations. That puts vegetable prices on par with a pound of pork or chicken. The reason: crop failures caused, for example, by heavy rainfall and flooding in the Shandong region, one of the largest vegetable-growing areas in the country.
Just over a week ago, the Ministry of Commerce published a “notice of good work in maintaining supply and stabilizing prices for vegetables and other daily necessities on the market for the winter and spring.” Such notices to local authorities are not unusual, but the public call a little over a week ago came at a bad time: People are plagued by fears of supply shortages, with long queues forming outside supermarkets in many places, and even panic buying in some areas. The situation is already tense.
Most recently, the number of new Covid infections in the country had risen again, leading many to fear tighter exit and travel restrictions within the country. The current call by the Ministry of Commerce was the straw that broke the camel’s back for some: Wild speculation and rumors were spread online, which only fueled uncertainty.
State media pedals back
After the price stability notice was read more than 46 million times in 24 hours, a Ministry of Commerce official attempted to limit the damage: “The supply of daily necessities is sufficient everywhere and should be fully guaranteed,” Zhu Xiaoliang said in an interview with state broadcaster CCTV.
Even state media such as Global Times, which is known to be the party’s mouthpiece, did everything it could to calm the tense mood. It was prominently reported that supermarket shelves were stocked as usual and that there was no panic buying. Basically, it is a non-report – and it shows how concerned the Chinese leadership is about rising prices and the accompanying consequences for stability in society.
The fact that vegetable prices are rising so sharply casts a dark shadow over the 6th Plenum of the Central Committee of the Chinese Communist Party this week. There, State and Party leader Xi Jinping wants to further consolidate his position within the party (China.Table reported). But it is not just the price hike that is causing unease among delegates. In October, China’s factory activity dropped more than expected. The official Purchasing Managers’ Index (PMI) was at 49.2 percentage points – slipping below the 50 mark that separates economic growth from contraction.
Zhang Zhiwei, chief economist at Pinpoint Asset Management, said according to US financial broadcaster CNBC, the index has thus fallen to its lowest level since its introduction in 2005 (excluding the global financial crisis of 2008 and the outbreak of the COVID-19 pandemic in February last year).
Li’s warning of downward pressure
Premier Li Keqiang recently warned of a new “downward pressure” on the Chinese economy. Even if Li did not provide any details on the causes, they are obvious: Since the outbreak of the Covid pandemic, the government has pursued a strict “zero-covid” strategy, whose measures have repeatedly crippled parts of the economy. In September, a power crisis was added to the mix. The power shortage led to a significant reduction in industrial production in about 20 provinces.
Together with the recent rise in commodity prices, this is sparking major inflation fears among the population. The pressure on politicians is so great that the State Council recently announced that it would take action against “malicious speculation” to lower the rapidly rising commodity prices.
The fact that the consequences of the power crisis and the pandemic have also hit foreign companies in China hard is shown by the current “Business Outlook” survey by the German Chamber of Industry and Commerce in cooperation with the German Chambers of Commerce Abroad: While 70 percent of German companies operating in China still expected a positive economic trend back in spring, the figure is currently only 36 percent. By comparison, this figure is currently dropping from 74 to 50 percent in the US, according to the paper. “Companies are concerned to see that the air is apparently growing thinner in the two global economic locomotives of the last few months,” DIHK Head of Foreign Trade, Volker Treier commented. “For the economic recovery process after the Corona crisis, these are not good omens,” thinks Treier.
China does not export inflation
Global supply chains could also become affected, fears Louis Kuijs, China expert and Asia economist at Oxford Economics. “If the electricity shortages and production cuts continue, they could become yet another factor causing global supply-side problems.”
Economic data released on Sunday show that Beijing’s foreign trade boomed in October (ChinaTable reported). However, its imports also dropped. But experts do not fear that China, the world’s largest exporter, could trigger global inflation. This is because rising consumer prices are largely based on locally produced services than on consumer goods. “Downstream sectors continue to swallow higher input costs as demand remains weak,” Alicia García-Herrero, chief Asia-Pacific economist at Natixis SA, said in a Twitter post: “The world will not import inflation from China any time soon.”
Coronavirus
Growth
Inflation
Li Keqiang
Trade
News
More EVs registered in China than total vehicles in Germany
Electromobility continues to gain ground – around the globe, but especially in China. This was revealed by the latest “Electric Vehicle Sales Review” by PwC Autofacts and Strategy, the strategy consultancy of PricewaterhouseCoopers. According to the report, new registrations of pure battery cars (BEVs) in 14 selected markets worldwide rose by 123 percent in the third quarter of 2021 compared to the same quarter of the previous year.
China led theway with sales of 782,000 BEVs in the third quarter of 2021, representing year-on-year growth of 190 percent. This means that more EVs are now on Chinese roads than all vehicles combined in Germany registered in the same period (626,672).
“The unprecedented product offensive of new EV models by major manufacturers is bearing fruit worldwide. At the same time, more and more drivers are placing their trust in the new drive technology, which is further fuelling the rapid boom,” says Felix Kuhnert, Global Automotive Leader at PwC. Without the global chip crisis, which is causing considerable production restrictions and longer waiting times for the shipment of many vehicles, the EV growth would undoubtedly have been even greater, Kuhnert believes. His advice: Automotive equipment suppliers should seek the closest partnerships possible with semiconductor manufacturers to secure the continued growth of chip demand. rad
Autoindustrie
Xi opens 6th plenum
The Central Committee of the Communist Party of China met in Beijing on Monday for its 6th plenum. The meeting was opened by Xi Jinping in his function as General Secretary of the CP. As reported by state news agency Xinhua, Xi first presented a Politburo work report at Beijing’s Jingxi Hotel. He then outlined a draft “historic resolution” to be adopted during the four-day meeting. This is intended to pay tribute to “the major achievements and historical experience” in the party’s history.
While the details of the resolution are not known yet, a glance at the Politburo’s most recent report, issued in mid-October, at least hints at its direction. It says: “The CPC has led all ethnic groups of the country in making remarkable achievements over the past 100 years.” Under Xi Jinping’s leadership, the country is said to be on the path to common prosperity and spiritual and national rejuvenation.
Xi wants to achieve one thing above all at the 6th Plenum: By formulating a “historic resolution”, he is once again underlining his key position in Chinese history (China.Table reported). He is also doing this with a view to the upcoming party congress next year. There, Xi Jinping most likely plans to run for a third term as president. It would be the first time in decades after two five-year terms without a new head of state. In any case, Xi has already had the previous ten-year term limit removed from the Chinese constitution. rad
Central Committee
Domestic policy of the CP China
Politburo
Xi Jinping
DSL: High costs for companies
China’s Cyberspace Administration has presented a first draft that fleshes out the Data Security Law (DSL) that has been in force since September. The draft was published on Friday and provides a first insight into the rules that companies operating in China will have to comply with in the future. Foreign companies fear thatcompliance with regulations on cross-border data transfers could soon lead to high costs.
According to the draft measures on the security assessment of cross-border data transfers, companies must subject themselves to a security assessment before they are allowed to transfer “important” data outside of China. But what exactly falls under the category of “important” remains undefined. According to Nikkei Asia, Lawyers also criticize that international companies will face high costs when investing in Beijing’s new security assessment requirements. They also state that companies should expect longer processing times: The Cyberspace Administration of China aims to complete the required security assessments within 45 working days – though complex cases could take up to an additional 15 days, according to CAC data. niw
Data
Data Protection Act
Taikonaut on first-ever spacewalk
Wang Yaping has become the first Chinese woman to go on a spacewalk. The Taikonaut – as astronauts are called in China – left the Tiangong space station with her colleague Zhai Zhigang for installation operations. The Chinese space agency announced that the six-hour mission went “smoothly” and “successfully.”
In mid-October, the space shuttle “Shenzhou 13” carrying Wang, Zhai, and military pilot Ye Guangfu had reached the space station. The mission to upgrade the space station, which is still under construction, is expected to last six months. China had launched the space station’s core module into orbit in April (China.Table reported). The Chinese space station is expected to be fully operational in 2022. With around 90 tons, the finished space station will be much smaller than the ISS, which weighs 240 tons. niw
Aerospace
Technology
Tiangong
Profile
Harald Kumpfert – Sustainable in China’s Ruhr area
CEO of NEcreat China and Chairman of the European Chamber of Commerce in Shenyang
“Beijing has become a real slog,” complains Harald Kumpfert. But the CEO of NEcreat has no problems making a plea for his adopted home of Shenyang. Nevertheless, the eight-million metropolis northeast of Beijing carries old burdens when it comes to its image. “Shenyang is still known as the Ruhrpott (Germany’s coal-mining region) of northern China,” says the 56-year-old. Its chemical industry, coal, and ore mining frequently caused poor air quality in the city, he says. It is precisely in these power-intensive industries that Kumpfert’s concept of NEcreat comes into its own. He offers power conserving solutions to companies, hotels, and factories – a hot topic in electricity-hungry China.
Kumpfert has now lived in Shenyang for more than ten years. And as a member of the European Chamber of Commerce, it is important to him to help shape the city’s development – although cooperation with Chinese politics is still a challenge even after 26 years in China. At the end of 2017, the Chamber of Commerce presented a position paper for Shenyang. Kumpfert is chairman of the Shenyang branch. Above all, the chamber criticized a lack of reliability at the political level at the time. The Chinese side first had to get used to that, says Kumpfert: “It’s not necessarily common practice here to criticize – especially the government.” Four years later, however, local politics accepted the European Chamber of Commerce as a partner. By now, suggestions are appreciated, he says: “They are quite happy when people with a different perspective make suggestions.”
The fact that Kumpfert speaks Chinese is certainly a big help. Misunderstandings are inevitable, after all. The European Chamber of Commerce is often lumped together with the EU. The Chamber of Commerce has been held responsible for Brussels political decisions in the past – including interim censorship in reporting. That’s where a lot of reasoning and persuasion comes into play, he says. “If you stay in your expat microcosm, you can survive, even if you don’t speak Chinese. But if you want to immerse yourself more in society, there’s no way around,” says Kumpfert.
Kumpfert’s “adventure” in China began in the 1990s with the American conglomerate Honeywell. Kumpfert was in charge of a World Bank-financed project for district heating in Beijing. This was followed by a stint at Siemens in Tianjin. For several years now, the native Berliner has been self-employed at NEcreat. It’s not easy in fast-moving China, says Kumpfert: “The advantage of China is flexibility. You can tackle things quickly. But then the solutions to problems are not always sustainable.” In the meantime, he has learned to navigate through the imponderables of local authorities, but there are always surprises.
Kumpfert has already bought a house in Germany – as a precaution. He is not thinking of returning for the time being, even though awareness of climate protection is slowly growing in China. “With NEcreat, we are doing what the world needs at the moment. Of course, it’s not enough yet, but at least it’s the right direction,” says Kumpfert. David Renke
Executive Moves
Stefan Dahmen is the new Director of Project Management at Svolt Energy Technology Europe. In his new position, he is responsible for all customer projects of European OEMs in the automotive sector of high-voltage storage applications. Dahmen previously worked at automotive supplier Vitesco Technologies. The 55-year-old has gained experience in various positions in the powertrain sector over the past 25 years. In the future, Dahmen will report directly to Maxim Hantsch-Kramskoj, Vice President for Sales and Marketing at Svolt Europe.
Stefan Buecke has been a consultant at the Deutsche Gesellschaft für Internationale Zusammenarbeit in China since November. At GIZ China, he aims to improve German-Chinese cooperation in e-mobility as well as automated & connected driving. Bücke spent one year as Director of Business Development at IAV, an engineering service provider for the automotive industry, and before that, five years as Managing Director at Vado Tech. Buecke studied mechanical engineering at Beuth University of Applied Sciences.
Dessert
The Forbidden City in Beijing has many names: Originally, it was called 紫禁城 (Zǐjìnchéng). It was assigned the color purple, in reference to the Chinese translation for polar star. Currently, however, the former seat of the Chinese emperors is shrouded entirely in white. The first snow of the season has fallen.
Profile: Harald Kumpfert – Sustainable in China’s Ruhr area
Dear reader,
Since the production of iPhone components is less and less profitable, Foxconn plans to change its business. Instead of iPhones, the Taiwanese electronics company wants to produce EVs in the future. Frank Sieren took a closer look at the first three models and their underlying strategy. And just like with iPhones, Foxconn doesn’t want to sell its cars under its own brand. Will the company achieve similar success, just like it did with the manufacturing of iPhones? In any case, Foxconn president Young Liu is not lacking in self-confidence: When it comes to expertise in software and computer chips, the company is already far ahead of many traditional carmakers, according to Liu. Our author also finds several reasons why Foxconn’s ambitious EV plans could work out.
The mood in Chinese society, on the other hand, is much worse. Power shortages, a strict Covid policy – and now prices for vegetables are climbing as well. Heavy rainfall and flooding in one of the country’s largest vegetable-growing regions are driving up prices. Rumors are already circulating that food could become scarce in some places. The fear of inflation is spreading rapidly. Ning Wang has taken a closer look at the situation and reveals just how much pressure is mounting on the government in Beijing. It quickly becomes evident that, as the world’s biggest exporter, rising prices are also having an impact on foreign companies in China. Could international supply chains even be affected by the threat of inflation in China?
Foxconn is one of the world’s largest contract manufacturers and suppliers of consumer electronics. The Taiwanese company, known in Asia as Hong Hai, manufactures an average of six out of ten smartphones for Apple. But since profit margins in its core business have been steadily declining, the group is looking to broaden its reach and expand into the electric vehicle segment. In October, Foxconn already unveiled its first three EV models at a presentation in Taipei: a sedan, an SUV, and a bus.
The sedan is the result of a collaboration with Italian design firm Pininfarina from Cambiano. The Model E, as the car has been christened in reference to Tesla’s vehicles, is expected to have a range of 750 kilometers. More aimed at the mass market is the so-called Model C, an SUV with a range of 700 kilometers, which should be available for around €30,000 after the start of production in 2023. The e-bus, called Model T, could hit the roads as early as 2022. According to Taiwan’s Vice-Governor Shen Jong-chin, route service in Kaohsiung in the south of the country is planned as early as next year. According to Foxconn, the range of the city bus, which is also expected to meet all regulations of the US Federal Transit Administration (FTA), is 400 kilometers. However, Foxconn does not want to sell the vehicles under its own name. Instead, they will be produced under the name Foxtron for other brands in the automotive industry.
According to the company’s information, cooperation partnerships are already signed with the US EV manufacturer Fisker and Taiwan’s Yulon Motor Group. There is also speculation about a collaboration with Apple. According to rumors, the tech giant from Silicon Valley has been looking for a suitable contract manufacturer for its first Apple car for quite some time (China.Table reported).
Supply chains and distribution network are ready
Last year alone, the Foxconn Group, founded in 1974, invested around NT$10 billion (about €310 million) in the development of electric vehicles. Over the next two years, investments are expected to increase. A good supply chain and sales network have already been established, said Young Liu, the group’s president, at the vehicle presentation. And regarding software and computer chip expertise, the company is already ahead of many traditional carmakers, Liu said. In a bid to catch up in other areas, Foxconn had acquired a factory of US EV start-up Lordstown Motors from Ohio, formerly owned by GM, for the equivalent of €200 million in early October. Foxconn has also signed joint ventures with Chinese carmaker Geely and European manufacturer Stellantis (Chrysler, Peugeot, Citroën, Fiat) to further develop in-car and connected-car technologies.
As early as next year, between 150,000 and 200,000 Foxtron EVs are to be manufactured for the Southeast Asian market in production facilities in Thailand. The Thai energy company PTT is also on board. And in the future, Foxconn also wants to produce in Europe, India, and Latin America. “Indirect” cooperation with German car manufacturers was included, explained company boss Liu, without giving further details.
Higher margins
Because the global auto industry continues to suffer from a semiconductor shortage, Foxconn acquired a chip factory from Taiwanese manufacturer Macronix International back in August. The factory is expected to supply semiconductors for 30,000 EVs per month by 2024. Production is scheduled to start at the end of this year. In 2016, Foxconn had previously teamed up with microprocessor specialist ARM, owned by Japanese tech giant Softbank, to set up a chip design center in Shenzhen, southern China. And in 2019, Foxconn had unsuccessfully tried to take over a chip manufacturing facility owned by Japan’s Fujitsu Group.
Over the next five years, Foxconn aims to generate €30 billion in revenue annually from its EV business and increase its gross margin from currently six percent to ten percent. The target is a global EV market share of ten percent. The company’s revenue climbed only marginally by 0.3 percent to $181 billion last year. Net profit has already been on the decline since 2017.
It’s only vegetables, one might think. Especially for cauliflower and broccoli, prices have recently risen enormously. According to the Ministry of Commerce in Beijing, consumers now have to pay about 50 percent more for the flower vegetable. Prices for Spinach have increased by almost 160 percent, according to Bloomberg calculations. That puts vegetable prices on par with a pound of pork or chicken. The reason: crop failures caused, for example, by heavy rainfall and flooding in the Shandong region, one of the largest vegetable-growing areas in the country.
Just over a week ago, the Ministry of Commerce published a “notice of good work in maintaining supply and stabilizing prices for vegetables and other daily necessities on the market for the winter and spring.” Such notices to local authorities are not unusual, but the public call a little over a week ago came at a bad time: People are plagued by fears of supply shortages, with long queues forming outside supermarkets in many places, and even panic buying in some areas. The situation is already tense.
Most recently, the number of new Covid infections in the country had risen again, leading many to fear tighter exit and travel restrictions within the country. The current call by the Ministry of Commerce was the straw that broke the camel’s back for some: Wild speculation and rumors were spread online, which only fueled uncertainty.
State media pedals back
After the price stability notice was read more than 46 million times in 24 hours, a Ministry of Commerce official attempted to limit the damage: “The supply of daily necessities is sufficient everywhere and should be fully guaranteed,” Zhu Xiaoliang said in an interview with state broadcaster CCTV.
Even state media such as Global Times, which is known to be the party’s mouthpiece, did everything it could to calm the tense mood. It was prominently reported that supermarket shelves were stocked as usual and that there was no panic buying. Basically, it is a non-report – and it shows how concerned the Chinese leadership is about rising prices and the accompanying consequences for stability in society.
The fact that vegetable prices are rising so sharply casts a dark shadow over the 6th Plenum of the Central Committee of the Chinese Communist Party this week. There, State and Party leader Xi Jinping wants to further consolidate his position within the party (China.Table reported). But it is not just the price hike that is causing unease among delegates. In October, China’s factory activity dropped more than expected. The official Purchasing Managers’ Index (PMI) was at 49.2 percentage points – slipping below the 50 mark that separates economic growth from contraction.
Zhang Zhiwei, chief economist at Pinpoint Asset Management, said according to US financial broadcaster CNBC, the index has thus fallen to its lowest level since its introduction in 2005 (excluding the global financial crisis of 2008 and the outbreak of the COVID-19 pandemic in February last year).
Li’s warning of downward pressure
Premier Li Keqiang recently warned of a new “downward pressure” on the Chinese economy. Even if Li did not provide any details on the causes, they are obvious: Since the outbreak of the Covid pandemic, the government has pursued a strict “zero-covid” strategy, whose measures have repeatedly crippled parts of the economy. In September, a power crisis was added to the mix. The power shortage led to a significant reduction in industrial production in about 20 provinces.
Together with the recent rise in commodity prices, this is sparking major inflation fears among the population. The pressure on politicians is so great that the State Council recently announced that it would take action against “malicious speculation” to lower the rapidly rising commodity prices.
The fact that the consequences of the power crisis and the pandemic have also hit foreign companies in China hard is shown by the current “Business Outlook” survey by the German Chamber of Industry and Commerce in cooperation with the German Chambers of Commerce Abroad: While 70 percent of German companies operating in China still expected a positive economic trend back in spring, the figure is currently only 36 percent. By comparison, this figure is currently dropping from 74 to 50 percent in the US, according to the paper. “Companies are concerned to see that the air is apparently growing thinner in the two global economic locomotives of the last few months,” DIHK Head of Foreign Trade, Volker Treier commented. “For the economic recovery process after the Corona crisis, these are not good omens,” thinks Treier.
China does not export inflation
Global supply chains could also become affected, fears Louis Kuijs, China expert and Asia economist at Oxford Economics. “If the electricity shortages and production cuts continue, they could become yet another factor causing global supply-side problems.”
Economic data released on Sunday show that Beijing’s foreign trade boomed in October (ChinaTable reported). However, its imports also dropped. But experts do not fear that China, the world’s largest exporter, could trigger global inflation. This is because rising consumer prices are largely based on locally produced services than on consumer goods. “Downstream sectors continue to swallow higher input costs as demand remains weak,” Alicia García-Herrero, chief Asia-Pacific economist at Natixis SA, said in a Twitter post: “The world will not import inflation from China any time soon.”
Coronavirus
Growth
Inflation
Li Keqiang
Trade
News
More EVs registered in China than total vehicles in Germany
Electromobility continues to gain ground – around the globe, but especially in China. This was revealed by the latest “Electric Vehicle Sales Review” by PwC Autofacts and Strategy, the strategy consultancy of PricewaterhouseCoopers. According to the report, new registrations of pure battery cars (BEVs) in 14 selected markets worldwide rose by 123 percent in the third quarter of 2021 compared to the same quarter of the previous year.
China led theway with sales of 782,000 BEVs in the third quarter of 2021, representing year-on-year growth of 190 percent. This means that more EVs are now on Chinese roads than all vehicles combined in Germany registered in the same period (626,672).
“The unprecedented product offensive of new EV models by major manufacturers is bearing fruit worldwide. At the same time, more and more drivers are placing their trust in the new drive technology, which is further fuelling the rapid boom,” says Felix Kuhnert, Global Automotive Leader at PwC. Without the global chip crisis, which is causing considerable production restrictions and longer waiting times for the shipment of many vehicles, the EV growth would undoubtedly have been even greater, Kuhnert believes. His advice: Automotive equipment suppliers should seek the closest partnerships possible with semiconductor manufacturers to secure the continued growth of chip demand. rad
Autoindustrie
Xi opens 6th plenum
The Central Committee of the Communist Party of China met in Beijing on Monday for its 6th plenum. The meeting was opened by Xi Jinping in his function as General Secretary of the CP. As reported by state news agency Xinhua, Xi first presented a Politburo work report at Beijing’s Jingxi Hotel. He then outlined a draft “historic resolution” to be adopted during the four-day meeting. This is intended to pay tribute to “the major achievements and historical experience” in the party’s history.
While the details of the resolution are not known yet, a glance at the Politburo’s most recent report, issued in mid-October, at least hints at its direction. It says: “The CPC has led all ethnic groups of the country in making remarkable achievements over the past 100 years.” Under Xi Jinping’s leadership, the country is said to be on the path to common prosperity and spiritual and national rejuvenation.
Xi wants to achieve one thing above all at the 6th Plenum: By formulating a “historic resolution”, he is once again underlining his key position in Chinese history (China.Table reported). He is also doing this with a view to the upcoming party congress next year. There, Xi Jinping most likely plans to run for a third term as president. It would be the first time in decades after two five-year terms without a new head of state. In any case, Xi has already had the previous ten-year term limit removed from the Chinese constitution. rad
Central Committee
Domestic policy of the CP China
Politburo
Xi Jinping
DSL: High costs for companies
China’s Cyberspace Administration has presented a first draft that fleshes out the Data Security Law (DSL) that has been in force since September. The draft was published on Friday and provides a first insight into the rules that companies operating in China will have to comply with in the future. Foreign companies fear thatcompliance with regulations on cross-border data transfers could soon lead to high costs.
According to the draft measures on the security assessment of cross-border data transfers, companies must subject themselves to a security assessment before they are allowed to transfer “important” data outside of China. But what exactly falls under the category of “important” remains undefined. According to Nikkei Asia, Lawyers also criticize that international companies will face high costs when investing in Beijing’s new security assessment requirements. They also state that companies should expect longer processing times: The Cyberspace Administration of China aims to complete the required security assessments within 45 working days – though complex cases could take up to an additional 15 days, according to CAC data. niw
Data
Data Protection Act
Taikonaut on first-ever spacewalk
Wang Yaping has become the first Chinese woman to go on a spacewalk. The Taikonaut – as astronauts are called in China – left the Tiangong space station with her colleague Zhai Zhigang for installation operations. The Chinese space agency announced that the six-hour mission went “smoothly” and “successfully.”
In mid-October, the space shuttle “Shenzhou 13” carrying Wang, Zhai, and military pilot Ye Guangfu had reached the space station. The mission to upgrade the space station, which is still under construction, is expected to last six months. China had launched the space station’s core module into orbit in April (China.Table reported). The Chinese space station is expected to be fully operational in 2022. With around 90 tons, the finished space station will be much smaller than the ISS, which weighs 240 tons. niw
Aerospace
Technology
Tiangong
Profile
Harald Kumpfert – Sustainable in China’s Ruhr area
CEO of NEcreat China and Chairman of the European Chamber of Commerce in Shenyang
“Beijing has become a real slog,” complains Harald Kumpfert. But the CEO of NEcreat has no problems making a plea for his adopted home of Shenyang. Nevertheless, the eight-million metropolis northeast of Beijing carries old burdens when it comes to its image. “Shenyang is still known as the Ruhrpott (Germany’s coal-mining region) of northern China,” says the 56-year-old. Its chemical industry, coal, and ore mining frequently caused poor air quality in the city, he says. It is precisely in these power-intensive industries that Kumpfert’s concept of NEcreat comes into its own. He offers power conserving solutions to companies, hotels, and factories – a hot topic in electricity-hungry China.
Kumpfert has now lived in Shenyang for more than ten years. And as a member of the European Chamber of Commerce, it is important to him to help shape the city’s development – although cooperation with Chinese politics is still a challenge even after 26 years in China. At the end of 2017, the Chamber of Commerce presented a position paper for Shenyang. Kumpfert is chairman of the Shenyang branch. Above all, the chamber criticized a lack of reliability at the political level at the time. The Chinese side first had to get used to that, says Kumpfert: “It’s not necessarily common practice here to criticize – especially the government.” Four years later, however, local politics accepted the European Chamber of Commerce as a partner. By now, suggestions are appreciated, he says: “They are quite happy when people with a different perspective make suggestions.”
The fact that Kumpfert speaks Chinese is certainly a big help. Misunderstandings are inevitable, after all. The European Chamber of Commerce is often lumped together with the EU. The Chamber of Commerce has been held responsible for Brussels political decisions in the past – including interim censorship in reporting. That’s where a lot of reasoning and persuasion comes into play, he says. “If you stay in your expat microcosm, you can survive, even if you don’t speak Chinese. But if you want to immerse yourself more in society, there’s no way around,” says Kumpfert.
Kumpfert’s “adventure” in China began in the 1990s with the American conglomerate Honeywell. Kumpfert was in charge of a World Bank-financed project for district heating in Beijing. This was followed by a stint at Siemens in Tianjin. For several years now, the native Berliner has been self-employed at NEcreat. It’s not easy in fast-moving China, says Kumpfert: “The advantage of China is flexibility. You can tackle things quickly. But then the solutions to problems are not always sustainable.” In the meantime, he has learned to navigate through the imponderables of local authorities, but there are always surprises.
Kumpfert has already bought a house in Germany – as a precaution. He is not thinking of returning for the time being, even though awareness of climate protection is slowly growing in China. “With NEcreat, we are doing what the world needs at the moment. Of course, it’s not enough yet, but at least it’s the right direction,” says Kumpfert. David Renke
Executive Moves
Stefan Dahmen is the new Director of Project Management at Svolt Energy Technology Europe. In his new position, he is responsible for all customer projects of European OEMs in the automotive sector of high-voltage storage applications. Dahmen previously worked at automotive supplier Vitesco Technologies. The 55-year-old has gained experience in various positions in the powertrain sector over the past 25 years. In the future, Dahmen will report directly to Maxim Hantsch-Kramskoj, Vice President for Sales and Marketing at Svolt Europe.
Stefan Buecke has been a consultant at the Deutsche Gesellschaft für Internationale Zusammenarbeit in China since November. At GIZ China, he aims to improve German-Chinese cooperation in e-mobility as well as automated & connected driving. Bücke spent one year as Director of Business Development at IAV, an engineering service provider for the automotive industry, and before that, five years as Managing Director at Vado Tech. Buecke studied mechanical engineering at Beuth University of Applied Sciences.
Dessert
The Forbidden City in Beijing has many names: Originally, it was called 紫禁城 (Zǐjìnchéng). It was assigned the color purple, in reference to the Chinese translation for polar star. Currently, however, the former seat of the Chinese emperors is shrouded entirely in white. The first snow of the season has fallen.
