China is playing a prominent role in the European Championship – at least on the perimeter advertising and as an official partner of the organizing UEFA. Christiane Kuehl not only took a closer look at the four goals scored by the German team against Portugal but also scrutinized the so-called “Sponsoring Soft Power“. Chinese companies are cleverly using the European Championship as a platform to present themselves to fans internationally – including a Cologne advertising ambassador.
As closely interwoven as the economic world is here, global logistics currently appear to be fragile. As recently as March, a ship blocked the bottleneck of the Suez Canal for six days. On satellite images, we observed the transverse colossus and the ships jamming at the north and south ends of the canal. Finn Mayer-Kuckuk analyzes the impact of COVID-19 infections among workers at the southern Chinese port of Yantian near Shenzhen on the flow of goods, and again satellite images provide important clues. Once again, container giants are jammed, freight rates are rising, goods are delayed, supply chains are disrupted. Global logistics are in a tight spot.
Meanwhile, another bridge between East and West is paying a high price for its determination to be represented in both worlds. Users on LinkedIn will become invisible if they include content critical of China in their profiles, as Marcel Grzanna reports. The platform announced that the profiles of two users will not be accessible from China in the future. LinkedIn is responding to censorship requests from the Chinese government. It is not the first company to bend to the wishes of the Chinese Communist Party. Its influence is far-reaching these days.
When Kai Havertz drove the ball into the net from close-range for a 3-1 win over Portugal, the name “Vivo” shone white on a bright blue background on the advertising boards in Munich’s Allianz Arena. When Robin Gosens made it 4-1 for Germany, the boards were dark grey with white TiktTok lettering. When Portugal’s Renato Sanches hits the crossbar shortly before the end, Chinese characters flicker across the board: 支付宝 – internationally known as Alipay, the payment platform of online retailer Alibaba.
Chinese companies will be present at Euro 2020 (the name has remained the same despite the COVID-related postponement to 2021) like never before at a UEFA European Championship. Alipay and TV manufacturer Hisense are official partners of all UEFA internationals, alongside VW, Gazprom, Booking.com, and FedEx. Both will remain on board until after the 2024 European Championships. The Chinese brand Vivo is the official smartphone partner of both the 2020 and 2024 tournaments. As tournament sponsors, the short video app TikTok, Alibaba’s blockchain subsidiary AntChain, and World First, a platform specializing in processing international payments, will appear on the advertising boards. Founded in Australia in 2004, World First has also been part of Alibaba since 2019.
Experts say it simply puts the Chinese economy with its current export power right where it belongs. “Due to these sponsorships, companies are becoming visible around the world and part of a global exchange that their country didn’t participate in before,” says Simon Chadwick of the Centre for the Eurasian Sport Industry, based in Paris Shanghai, and other cities. “These exchanges have an immediate positive impact as it leads to people engaging with the country itself and its businesses.” Chadwick calls this “Sponsorship Soft Power“. According to the government, China wants to become a major player in international football as soon as possible. The big dream is to host a World Cup. “But of course, these companies are also becoming increasingly global, targeting customers worldwide, especially Vivo and Hisense,” Chadwick told China.Table.
Hisense was a China pioneer at the European Championship in 2016. But back in 2010, at the World Cup in South Africa, which was even more interesting for China, Yingli Solar was the first Chinese company to appear as a sponsoring partner of Fifa. In 2014, Yingli Solar was also an advertising partner for the World Cup in Brazil – where the company’s photovoltaic cells supplied the electricity for the final. Yingli was no longer involved in the 2018 World Cup in Russia, but Hisense, Vivo, the Wanda Group, a club sponsor in China, and the Mengniu dairy company were.
But now visibility at the Euros is apparently worth quite a bit to the companies. Alipay signed an eight-year contract with UEFA back in 2018. According to various reports, the concern paid around €200 million for it. Nothing is known about the sums of the others, but according to the business magazine Caixin, companies from China are the largest source of sponsorship revenue for this year’s tournament.
In addition to the global stage, however, the companies also present themselves to the Chinese fans at home, many of whom watch the games despite the inconvenient time – kick-off is usually in the middle of the night in Beijing. According to market research data, the eyes of 424 million Chinese citizens were glued to their TVs during the Euros 2016.
Sponsorship can certainly pay off, as the Hisense example shows. The company is advertising Euro 2020 with a customized TV product line called U7. It is developed specifically for the tournament, including fan gimmicks such as an intelligent viewing mode with different perspectives and color-optimized football turf. As part of the sponsorship, Hisense also made the uefa.tv app with video-on-demand functions available for free on millions of devices. This is obviously a hit: Three different models of the U7 series were among the ten best-selling new TVs in China in the last two months, Hisense announced shortly after the start of the tournament. Meanwhile, on its German website, Hisense is advertising with popular soccer star Lukas Podolski from Germany’s 2014 World Cup-winning team. In addition to TVs like the U7, the brand also sells refrigerators and washing machines in Germany.
Vivo is just about to roll out its smartphones in Europe. So the timing is ideal: The Vivo X60 Pro is the official smartphone of the current tournament. It was only in October 2020 – that is, after the COVID-related postponement – that Vivo had signed a four-year contract as the official partner for the 2020 and 2024 European Championships. It went live in Romania and the Czech Republic in February 2021. In Germany, the 5G version of the Euro phone X60 Pro, with Zeiss camera, has been available since early June, starting at €800. Vivo belongs to the world’s largest smartphone manufacturer BKK Electronics, which also sells the Oppo brand – and already has a global market share of around ten percent (China.Table reported).
The services of UEFA partner Alipay, however, are only available in China so far. According to UEFA, Alipay offers Chinese fans a so-called lifestyle account on its app as a content hub for European international matches. There’s also a mini-app that allows Chinese to conveniently apply for tickets – a feature that has, of necessity, lapsed for the time being due to the COVID-19 pandemic. Alibaba subsidiary Antchain stepped in at short notice and has been UEFA’s official blockchain partner for five years since May 2021. Blockchains are secure, decentralized data directories that are always kept up to date in a traceable manner and are shared by many participants. At Euro 2020, Antchain will, among other things, permanently store the list of goal scorers – and sponsor the trophy for the top scorer, according to UEFA.
TikTok and its Chinese version Douyin of the internet group Bytedance also count among the Euro late bloomers. TikTok joined formally in February, Douyin in May 2021. According to Caixin, both want to use the sponsorship to establish themselves as platforms for football fans – separately according to the respective markets. Only TikTok is publicly visible during television broadcasts. Douyin has developed exclusive augmented reality effects and hashtag challenges for Chinese users for Euro 2020. UEFA also opened a Douyin account.
The Euro, by the way, is not the only pitch at the moment. At the Copa America South American championship, which is taking place simultaneously, three of the four main sponsors are from China, according to Chadwick. The others canceled in protest as the tournament is being held in the COVID stronghold Brazil. Also important is the biennial African championship. Chadwick says: “China wants to set the stage for hosting the World Cup.” To do that, it needs contacts and good relations around the world.
The container mountains are visible from space. Satellite images show an uninterrupted carpet of predominantly reddish boxes stacked high on the pier of the southern Chinese port of Yantian. But what is most worrying is the small number of ships that have docked at the cranes. Usually, twelve of the cargo giants are moored here at the same time, being loaded and unloaded. Currently, there are only two. The reasons for the congestion: COVID-19 outbreaks among dockworkers who had to be isolated.
The world of logistics had hoped that the supply chain disruptions caused by COVID-19 would have been resolved by now, by summer. Instead, now the next act in the drama over stuck cargo follows. “The backlog at Yantian will have a significant impact on containerized goods flow,” according to Peter Tirschwell, a maritime trade analyst at research firm IHS Markit. “The impact will last for several weeks.”
On the one hand, transporting goods will remain expensive or even become more expensive, Tischwell tells China.Table. On the other hand, potential bottlenecks in the resupply of industrial goods, as there were before Christmas, could last until the end of the year. At the same time, the new disruption shows how vulnerable the tightly calculated supply routes are on which the globalized economy depends.
Around 160,000 containers of the 40-foot class are currently stuck in Yantian. The port is located northeast of Hong Kong and is the third most productive container hub in the world. It is the port via which goods from the industrial hub of Shenzhen are shipped to the world. The city accounts for ten percent of China’s exports. Therefore, the chaos is already considered worse than the debacle concerning the Ever Given, which blocked the Suez Canal for six days in March.
The problems in Yantian started with positive COVID-19 tests of port workers. On May 27, port authorities announced they were shutting down some operations to ensure employees were isolated. That still ran as a side note in a COVID-plagued business world. The expectation was that everything would run smoothly again within a few days. But the shutdown dragged on while goods piled up on land and ships lay at anchor waiting at sea.
Now there is talk of Yantian not returning to normal operations until the end of June. But the damage to global logistics has already been done. One part meshes with another in the dance of ocean giants; computers plan containers weeks in the future on ships still in port on the other side of the world.
This finely tuned planning can deal quite well with individual disruptions, such as the delay of a freighter. But when ships break down en masse, the system enters a crisis. The forecasts and plans start to match reality less and less, and a container cannot simply be booked onto another ship if that one becomes unavailable, as well.
The ports in southern China are also running at full capacity and could not easily absorb the load from Yantian. As the most logical fallback locations, neighboring Shekou, Nansha, and Hong Kong, are also showing signs of congestion, with turnaround times getting longer. Ships are bustling, waiting on the seas and rivers throughout the Pearl River Delta Metropolitan Area.
The reaction of the shipping companies: they have to increase freight rates. When ships and containers for transport from Asia to the consumer countries in Europe and America become scarce, prices rise accordingly. The FBX index for global freight rates initially rose from a level of $1,300 before the pandemic this year to over $4,000. Since the beginning of May, it has gone up above $6,000. Analyst Tirschwell expects “historic highs” in freight costs in the near future. With many goods coming from East Asia, that’s driving up prices overall. COVID-related inflationary pressures continue to rise as a result.
The container shipping industry has experienced a succession of bankruptcies, misfortunes and breakdowns since the beginning of the COVID crisis. The first shocks happened in the spring of 2020 when port workers did not return to their jobs. The consequences are still felt today (China.Table reported). In March, a ship got stuck in the busy Suez Canal, creating more turbulence. When those jams cleared, new queues of giant ships appeared at destination ports. As they could not be unloaded and loaded quickly in turn, the disruptions continue in waves.
The problems of shipping lead to wider discussions within the industry. Global supply chains seemed sensible and particularly cost-effective as long as everything ran smoothly. Now the disadvantages of this approach are becoming visible. After all, it’s not just about end products. A small missing part from Shenzhen can paralyze the manufacture of products in Germany. The Ifo economic research institute wants to know: “In consideration of the COVID-19 crisis, should companies rethink their business model of global supply chains and reduce their dependence on global production networks?”
Economists provide a provisional answer: The uncertainties are causing companies to reconsider production in the Far East at least. “The incentives to relocate production back to Germany and rich industrialized countries are further strengthened by the fact that the use of robots is cheaper today than ever before,” write Professor Dalia Marin of the Technical University of Munich and her colleagues. She identifies a trend toward “reshoring” that could at least slow down “offshoring,” or the shift of economic activity overseas. In Germany, the chemical, metal, and electrical industries, in particular, show the clearest tendencies in that direction.
The industry association BDI also warned of further supply bottlenecks during the blockage of the Suez Canal. However, there are no immediate alternatives on the horizon, said Holger Lösch, deputy managing director of the BDI. Meanwhile, the Ifo Institute is proposing a market-based solution to counteract the situation. If the risks are better reflected in the freight price in the future, it will automatically be worthwhile for more products to be manufactured in the EU country. Instead of an expensive “deglobalization”, such mechanisms could lead to more balanced globalization.
Swedish author and photographer Jojje Olsson was astonished to receive a personal message from online professional network LinkedIn in his digital inbox. The provider informed him that “prohibited content” had been discovered in the education subsection. This was the reason for blocking his profile in the People’s Republic of China with immediate effect.
Olsson had stated that he had dealt with the “Tiananmen Massacre” in detail in an essay as part of his studies. LinkedIn’s response: “Their profile, other activities such as comments or content they share with their network will no longer be visible in China.” But the company said its presence in all other countries would be unaffected. Olsson is free to decide whether he wants to make the necessary changes or not.
Olsson expresses outrage. “This is absolutely unbelievable,” tweets the media worker. He decided not to change the profile. In China, he thus remains invisible. Another user then started a self-experiment and added the synonym for the tragic events in Tiananmen Square in June 1989 to his profile. “It took four days,” he finally reported back, posting an almost identical message from LinkedIn. He, too, had to adjust the profile to be able to become part of the Chinese network again.
The platform presents the process as part of its standard business practices. “We acknowledged a while ago that offering a localized version of LinkedIn in China would likely lead to compliance with Chinese government censorship requirements on internet platforms,” LinkedIn tells China.Table in response to a query. While it “strongly” supports freedom of expression, it says, “we realize that we must implement the Chinese government’s restrictions on content, if needed to the extent necessary to create value for our members in China and around the world.” So LinkedIn believes it has no choice if it wants to maintain a presence there.
This isn’t the first time LinkedIn has censored June 4 posts. A few years ago, the network made content inaccessible that dealt with the Tiananmen Massacre. But if even the content of an academic paper can no longer be mentioned by name, it’s an expression of Beijing’s determination to ban unpleasant topics from discourse. If the massacre is to be discussed, it is best not to do so where Chinese citizens can read it. However, the censorship can be circumvented with a little trick, as other users confirmed. For example, you only have to put a fullstop after each letter of the word Tiananmen. LinkedIn did not answer whether other keywords set the apparently automated process of censorship in motion.
LinkedIn’s concession, however, is also a sign of the providers’ growing willingness to do whatever is required of them in China, contrary to their propagated democratic convictions. Facebook, for example, is blocked in China, but the company’s CEO, Mark Zuckerberg, had been pandering for years, signaling that he wanted to satisfy the censors at all costs. Facebook, meanwhile, still hasn’t made it into China. This is due to the Chinese authorities’ concern that opposition figures could use the platform. They could incite the masses to riot.
With LinkedIn, the censorship authority apparently does not see this problem to the same extent. The target group is completely different, and the profiles are also more formal. Private and political activism are kept within limits compared to Facebook or the short message service Twitter, which is also blocked. In contrast, much of the content deals with economic backgrounds and contexts as well as professional activities. The country also recognizes advantages for its own economic development. The search for qualified employees and talent is a global competition in which Chinese companies are also exhausting all means to avoid losing out. LinkedIn, which is present in the West as well as in China, is considered an important link between both worlds (China.Table reported).
The professional network has been active in China since 2014. Of 756 million users worldwide, 53 million are registered in the People’s Republic. After the USA (178 million) and India (76 million), China is LinkedIn’s third largest single market. In Europe, the network has 198 million accounts, 16 million in German-speaking countries.
Katharina Droege has taken a clear position on the investment agreement between the EU and China (CAI). The 36-year-old is the economic policy spokesperson for the Greens in the Bundestag. The German government does not coordinate sufficiently with its European partners when it comes to trade policy with China: “The agreement was once again an example of Germany going ahead, consulting with France and presenting the rest of Europe with a fait accompli.” In doing so the Chancellor was more concerned with concluding the agreement at the end of the Council Presidency than with the human rights situation in China. In her opinion, the EU should, in principle, ban the import of products resulting from forced labor. “The burden of proof would have to be reversed. Chinese companies would have to be transparent about how their products are made if they want to export to Germany or the EU,” says Dröge.
This very desire for fairer globalization was what brought the Westphalian-born politician into politics in the first place. Katharina Droege has been a member of the Green Party since 2000. Prior to that, she founded a Green Youth group in her home village. At the age of 16, Droege already became the state chairwoman of the Green Youth in North Rhine-Westphalia, and since 2013 she has been a member of the Bundestag. “The topic of China has, of course, definitely increased in importance in the Bundestag in recent years,” says Droege. Personally, she has not yet been to the People’s Republic, but due to her work in the Economic Committee, she knows how difficult communication with the Chinese leadership can be. “Especially when it comes to human rights, I have noticed how sharply the Chinese government can react,” says Katharina Dröge. However, this does not apply to all topics: “When it comes to climate protection, the Chinese are willing to negotiate and listen carefully to criticism.”
The Greens would like to work more closely with US President Joe Biden, who is working to revive transatlantic relations that had been damaged under his predecessor. But that requires a united European Union. “But the fact that it cannot find a common voice when it comes to the issue of China is to some extent a homemade problem after all,” says Katharina Droege. “The core of the problem lies in the consequences of the financial crisis in which Chancellor Merkel imposed her strict austerity policy on states like Italy and Greece.” When Chinese investors show up with the money, it’s hard for them to say no.
Some countries have thus become dependent on China to a certain extent, says Droege. But at the national level, too, there is the problem that Germany does not manage to speak with one voice. This has recently become apparent in the expansion of the 5G network. “After all, China is showing that it is capable of playing more aggressively. In the past, the Chancellor has been too lenient. Here, a clear announcement could certainly ensure more respect on the other side.” David Renke
The whirring in the air looks unreal, more like a video error than a real object. The artist Ai Weiwei remade his installation “Forever Bicycle” for an exhibition in Lisbon. Originally created in 2011 for an event in Taipei, it has been seen – in ever-changing variations – in several cities. Now it is the eye-catcher in front of the exhibition venue Cordoaria Nacional where the largest Ai exhibition to date is taking place until Nov. 28. Thereby, the artist is also thanking his new home country Portugal. He moved to the small town of Montemor-o-Novo in spring after being fed up first with Berlin and then with Cambridge. The town is best known for its production of corks. How long will the restless spirit stay this time?
China is playing a prominent role in the European Championship – at least on the perimeter advertising and as an official partner of the organizing UEFA. Christiane Kuehl not only took a closer look at the four goals scored by the German team against Portugal but also scrutinized the so-called “Sponsoring Soft Power“. Chinese companies are cleverly using the European Championship as a platform to present themselves to fans internationally – including a Cologne advertising ambassador.
As closely interwoven as the economic world is here, global logistics currently appear to be fragile. As recently as March, a ship blocked the bottleneck of the Suez Canal for six days. On satellite images, we observed the transverse colossus and the ships jamming at the north and south ends of the canal. Finn Mayer-Kuckuk analyzes the impact of COVID-19 infections among workers at the southern Chinese port of Yantian near Shenzhen on the flow of goods, and again satellite images provide important clues. Once again, container giants are jammed, freight rates are rising, goods are delayed, supply chains are disrupted. Global logistics are in a tight spot.
Meanwhile, another bridge between East and West is paying a high price for its determination to be represented in both worlds. Users on LinkedIn will become invisible if they include content critical of China in their profiles, as Marcel Grzanna reports. The platform announced that the profiles of two users will not be accessible from China in the future. LinkedIn is responding to censorship requests from the Chinese government. It is not the first company to bend to the wishes of the Chinese Communist Party. Its influence is far-reaching these days.
When Kai Havertz drove the ball into the net from close-range for a 3-1 win over Portugal, the name “Vivo” shone white on a bright blue background on the advertising boards in Munich’s Allianz Arena. When Robin Gosens made it 4-1 for Germany, the boards were dark grey with white TiktTok lettering. When Portugal’s Renato Sanches hits the crossbar shortly before the end, Chinese characters flicker across the board: 支付宝 – internationally known as Alipay, the payment platform of online retailer Alibaba.
Chinese companies will be present at Euro 2020 (the name has remained the same despite the COVID-related postponement to 2021) like never before at a UEFA European Championship. Alipay and TV manufacturer Hisense are official partners of all UEFA internationals, alongside VW, Gazprom, Booking.com, and FedEx. Both will remain on board until after the 2024 European Championships. The Chinese brand Vivo is the official smartphone partner of both the 2020 and 2024 tournaments. As tournament sponsors, the short video app TikTok, Alibaba’s blockchain subsidiary AntChain, and World First, a platform specializing in processing international payments, will appear on the advertising boards. Founded in Australia in 2004, World First has also been part of Alibaba since 2019.
Experts say it simply puts the Chinese economy with its current export power right where it belongs. “Due to these sponsorships, companies are becoming visible around the world and part of a global exchange that their country didn’t participate in before,” says Simon Chadwick of the Centre for the Eurasian Sport Industry, based in Paris Shanghai, and other cities. “These exchanges have an immediate positive impact as it leads to people engaging with the country itself and its businesses.” Chadwick calls this “Sponsorship Soft Power“. According to the government, China wants to become a major player in international football as soon as possible. The big dream is to host a World Cup. “But of course, these companies are also becoming increasingly global, targeting customers worldwide, especially Vivo and Hisense,” Chadwick told China.Table.
Hisense was a China pioneer at the European Championship in 2016. But back in 2010, at the World Cup in South Africa, which was even more interesting for China, Yingli Solar was the first Chinese company to appear as a sponsoring partner of Fifa. In 2014, Yingli Solar was also an advertising partner for the World Cup in Brazil – where the company’s photovoltaic cells supplied the electricity for the final. Yingli was no longer involved in the 2018 World Cup in Russia, but Hisense, Vivo, the Wanda Group, a club sponsor in China, and the Mengniu dairy company were.
But now visibility at the Euros is apparently worth quite a bit to the companies. Alipay signed an eight-year contract with UEFA back in 2018. According to various reports, the concern paid around €200 million for it. Nothing is known about the sums of the others, but according to the business magazine Caixin, companies from China are the largest source of sponsorship revenue for this year’s tournament.
In addition to the global stage, however, the companies also present themselves to the Chinese fans at home, many of whom watch the games despite the inconvenient time – kick-off is usually in the middle of the night in Beijing. According to market research data, the eyes of 424 million Chinese citizens were glued to their TVs during the Euros 2016.
Sponsorship can certainly pay off, as the Hisense example shows. The company is advertising Euro 2020 with a customized TV product line called U7. It is developed specifically for the tournament, including fan gimmicks such as an intelligent viewing mode with different perspectives and color-optimized football turf. As part of the sponsorship, Hisense also made the uefa.tv app with video-on-demand functions available for free on millions of devices. This is obviously a hit: Three different models of the U7 series were among the ten best-selling new TVs in China in the last two months, Hisense announced shortly after the start of the tournament. Meanwhile, on its German website, Hisense is advertising with popular soccer star Lukas Podolski from Germany’s 2014 World Cup-winning team. In addition to TVs like the U7, the brand also sells refrigerators and washing machines in Germany.
Vivo is just about to roll out its smartphones in Europe. So the timing is ideal: The Vivo X60 Pro is the official smartphone of the current tournament. It was only in October 2020 – that is, after the COVID-related postponement – that Vivo had signed a four-year contract as the official partner for the 2020 and 2024 European Championships. It went live in Romania and the Czech Republic in February 2021. In Germany, the 5G version of the Euro phone X60 Pro, with Zeiss camera, has been available since early June, starting at €800. Vivo belongs to the world’s largest smartphone manufacturer BKK Electronics, which also sells the Oppo brand – and already has a global market share of around ten percent (China.Table reported).
The services of UEFA partner Alipay, however, are only available in China so far. According to UEFA, Alipay offers Chinese fans a so-called lifestyle account on its app as a content hub for European international matches. There’s also a mini-app that allows Chinese to conveniently apply for tickets – a feature that has, of necessity, lapsed for the time being due to the COVID-19 pandemic. Alibaba subsidiary Antchain stepped in at short notice and has been UEFA’s official blockchain partner for five years since May 2021. Blockchains are secure, decentralized data directories that are always kept up to date in a traceable manner and are shared by many participants. At Euro 2020, Antchain will, among other things, permanently store the list of goal scorers – and sponsor the trophy for the top scorer, according to UEFA.
TikTok and its Chinese version Douyin of the internet group Bytedance also count among the Euro late bloomers. TikTok joined formally in February, Douyin in May 2021. According to Caixin, both want to use the sponsorship to establish themselves as platforms for football fans – separately according to the respective markets. Only TikTok is publicly visible during television broadcasts. Douyin has developed exclusive augmented reality effects and hashtag challenges for Chinese users for Euro 2020. UEFA also opened a Douyin account.
The Euro, by the way, is not the only pitch at the moment. At the Copa America South American championship, which is taking place simultaneously, three of the four main sponsors are from China, according to Chadwick. The others canceled in protest as the tournament is being held in the COVID stronghold Brazil. Also important is the biennial African championship. Chadwick says: “China wants to set the stage for hosting the World Cup.” To do that, it needs contacts and good relations around the world.
The container mountains are visible from space. Satellite images show an uninterrupted carpet of predominantly reddish boxes stacked high on the pier of the southern Chinese port of Yantian. But what is most worrying is the small number of ships that have docked at the cranes. Usually, twelve of the cargo giants are moored here at the same time, being loaded and unloaded. Currently, there are only two. The reasons for the congestion: COVID-19 outbreaks among dockworkers who had to be isolated.
The world of logistics had hoped that the supply chain disruptions caused by COVID-19 would have been resolved by now, by summer. Instead, now the next act in the drama over stuck cargo follows. “The backlog at Yantian will have a significant impact on containerized goods flow,” according to Peter Tirschwell, a maritime trade analyst at research firm IHS Markit. “The impact will last for several weeks.”
On the one hand, transporting goods will remain expensive or even become more expensive, Tischwell tells China.Table. On the other hand, potential bottlenecks in the resupply of industrial goods, as there were before Christmas, could last until the end of the year. At the same time, the new disruption shows how vulnerable the tightly calculated supply routes are on which the globalized economy depends.
Around 160,000 containers of the 40-foot class are currently stuck in Yantian. The port is located northeast of Hong Kong and is the third most productive container hub in the world. It is the port via which goods from the industrial hub of Shenzhen are shipped to the world. The city accounts for ten percent of China’s exports. Therefore, the chaos is already considered worse than the debacle concerning the Ever Given, which blocked the Suez Canal for six days in March.
The problems in Yantian started with positive COVID-19 tests of port workers. On May 27, port authorities announced they were shutting down some operations to ensure employees were isolated. That still ran as a side note in a COVID-plagued business world. The expectation was that everything would run smoothly again within a few days. But the shutdown dragged on while goods piled up on land and ships lay at anchor waiting at sea.
Now there is talk of Yantian not returning to normal operations until the end of June. But the damage to global logistics has already been done. One part meshes with another in the dance of ocean giants; computers plan containers weeks in the future on ships still in port on the other side of the world.
This finely tuned planning can deal quite well with individual disruptions, such as the delay of a freighter. But when ships break down en masse, the system enters a crisis. The forecasts and plans start to match reality less and less, and a container cannot simply be booked onto another ship if that one becomes unavailable, as well.
The ports in southern China are also running at full capacity and could not easily absorb the load from Yantian. As the most logical fallback locations, neighboring Shekou, Nansha, and Hong Kong, are also showing signs of congestion, with turnaround times getting longer. Ships are bustling, waiting on the seas and rivers throughout the Pearl River Delta Metropolitan Area.
The reaction of the shipping companies: they have to increase freight rates. When ships and containers for transport from Asia to the consumer countries in Europe and America become scarce, prices rise accordingly. The FBX index for global freight rates initially rose from a level of $1,300 before the pandemic this year to over $4,000. Since the beginning of May, it has gone up above $6,000. Analyst Tirschwell expects “historic highs” in freight costs in the near future. With many goods coming from East Asia, that’s driving up prices overall. COVID-related inflationary pressures continue to rise as a result.
The container shipping industry has experienced a succession of bankruptcies, misfortunes and breakdowns since the beginning of the COVID crisis. The first shocks happened in the spring of 2020 when port workers did not return to their jobs. The consequences are still felt today (China.Table reported). In March, a ship got stuck in the busy Suez Canal, creating more turbulence. When those jams cleared, new queues of giant ships appeared at destination ports. As they could not be unloaded and loaded quickly in turn, the disruptions continue in waves.
The problems of shipping lead to wider discussions within the industry. Global supply chains seemed sensible and particularly cost-effective as long as everything ran smoothly. Now the disadvantages of this approach are becoming visible. After all, it’s not just about end products. A small missing part from Shenzhen can paralyze the manufacture of products in Germany. The Ifo economic research institute wants to know: “In consideration of the COVID-19 crisis, should companies rethink their business model of global supply chains and reduce their dependence on global production networks?”
Economists provide a provisional answer: The uncertainties are causing companies to reconsider production in the Far East at least. “The incentives to relocate production back to Germany and rich industrialized countries are further strengthened by the fact that the use of robots is cheaper today than ever before,” write Professor Dalia Marin of the Technical University of Munich and her colleagues. She identifies a trend toward “reshoring” that could at least slow down “offshoring,” or the shift of economic activity overseas. In Germany, the chemical, metal, and electrical industries, in particular, show the clearest tendencies in that direction.
The industry association BDI also warned of further supply bottlenecks during the blockage of the Suez Canal. However, there are no immediate alternatives on the horizon, said Holger Lösch, deputy managing director of the BDI. Meanwhile, the Ifo Institute is proposing a market-based solution to counteract the situation. If the risks are better reflected in the freight price in the future, it will automatically be worthwhile for more products to be manufactured in the EU country. Instead of an expensive “deglobalization”, such mechanisms could lead to more balanced globalization.
Swedish author and photographer Jojje Olsson was astonished to receive a personal message from online professional network LinkedIn in his digital inbox. The provider informed him that “prohibited content” had been discovered in the education subsection. This was the reason for blocking his profile in the People’s Republic of China with immediate effect.
Olsson had stated that he had dealt with the “Tiananmen Massacre” in detail in an essay as part of his studies. LinkedIn’s response: “Their profile, other activities such as comments or content they share with their network will no longer be visible in China.” But the company said its presence in all other countries would be unaffected. Olsson is free to decide whether he wants to make the necessary changes or not.
Olsson expresses outrage. “This is absolutely unbelievable,” tweets the media worker. He decided not to change the profile. In China, he thus remains invisible. Another user then started a self-experiment and added the synonym for the tragic events in Tiananmen Square in June 1989 to his profile. “It took four days,” he finally reported back, posting an almost identical message from LinkedIn. He, too, had to adjust the profile to be able to become part of the Chinese network again.
The platform presents the process as part of its standard business practices. “We acknowledged a while ago that offering a localized version of LinkedIn in China would likely lead to compliance with Chinese government censorship requirements on internet platforms,” LinkedIn tells China.Table in response to a query. While it “strongly” supports freedom of expression, it says, “we realize that we must implement the Chinese government’s restrictions on content, if needed to the extent necessary to create value for our members in China and around the world.” So LinkedIn believes it has no choice if it wants to maintain a presence there.
This isn’t the first time LinkedIn has censored June 4 posts. A few years ago, the network made content inaccessible that dealt with the Tiananmen Massacre. But if even the content of an academic paper can no longer be mentioned by name, it’s an expression of Beijing’s determination to ban unpleasant topics from discourse. If the massacre is to be discussed, it is best not to do so where Chinese citizens can read it. However, the censorship can be circumvented with a little trick, as other users confirmed. For example, you only have to put a fullstop after each letter of the word Tiananmen. LinkedIn did not answer whether other keywords set the apparently automated process of censorship in motion.
LinkedIn’s concession, however, is also a sign of the providers’ growing willingness to do whatever is required of them in China, contrary to their propagated democratic convictions. Facebook, for example, is blocked in China, but the company’s CEO, Mark Zuckerberg, had been pandering for years, signaling that he wanted to satisfy the censors at all costs. Facebook, meanwhile, still hasn’t made it into China. This is due to the Chinese authorities’ concern that opposition figures could use the platform. They could incite the masses to riot.
With LinkedIn, the censorship authority apparently does not see this problem to the same extent. The target group is completely different, and the profiles are also more formal. Private and political activism are kept within limits compared to Facebook or the short message service Twitter, which is also blocked. In contrast, much of the content deals with economic backgrounds and contexts as well as professional activities. The country also recognizes advantages for its own economic development. The search for qualified employees and talent is a global competition in which Chinese companies are also exhausting all means to avoid losing out. LinkedIn, which is present in the West as well as in China, is considered an important link between both worlds (China.Table reported).
The professional network has been active in China since 2014. Of 756 million users worldwide, 53 million are registered in the People’s Republic. After the USA (178 million) and India (76 million), China is LinkedIn’s third largest single market. In Europe, the network has 198 million accounts, 16 million in German-speaking countries.
Katharina Droege has taken a clear position on the investment agreement between the EU and China (CAI). The 36-year-old is the economic policy spokesperson for the Greens in the Bundestag. The German government does not coordinate sufficiently with its European partners when it comes to trade policy with China: “The agreement was once again an example of Germany going ahead, consulting with France and presenting the rest of Europe with a fait accompli.” In doing so the Chancellor was more concerned with concluding the agreement at the end of the Council Presidency than with the human rights situation in China. In her opinion, the EU should, in principle, ban the import of products resulting from forced labor. “The burden of proof would have to be reversed. Chinese companies would have to be transparent about how their products are made if they want to export to Germany or the EU,” says Dröge.
This very desire for fairer globalization was what brought the Westphalian-born politician into politics in the first place. Katharina Droege has been a member of the Green Party since 2000. Prior to that, she founded a Green Youth group in her home village. At the age of 16, Droege already became the state chairwoman of the Green Youth in North Rhine-Westphalia, and since 2013 she has been a member of the Bundestag. “The topic of China has, of course, definitely increased in importance in the Bundestag in recent years,” says Droege. Personally, she has not yet been to the People’s Republic, but due to her work in the Economic Committee, she knows how difficult communication with the Chinese leadership can be. “Especially when it comes to human rights, I have noticed how sharply the Chinese government can react,” says Katharina Dröge. However, this does not apply to all topics: “When it comes to climate protection, the Chinese are willing to negotiate and listen carefully to criticism.”
The Greens would like to work more closely with US President Joe Biden, who is working to revive transatlantic relations that had been damaged under his predecessor. But that requires a united European Union. “But the fact that it cannot find a common voice when it comes to the issue of China is to some extent a homemade problem after all,” says Katharina Droege. “The core of the problem lies in the consequences of the financial crisis in which Chancellor Merkel imposed her strict austerity policy on states like Italy and Greece.” When Chinese investors show up with the money, it’s hard for them to say no.
Some countries have thus become dependent on China to a certain extent, says Droege. But at the national level, too, there is the problem that Germany does not manage to speak with one voice. This has recently become apparent in the expansion of the 5G network. “After all, China is showing that it is capable of playing more aggressively. In the past, the Chancellor has been too lenient. Here, a clear announcement could certainly ensure more respect on the other side.” David Renke
The whirring in the air looks unreal, more like a video error than a real object. The artist Ai Weiwei remade his installation “Forever Bicycle” for an exhibition in Lisbon. Originally created in 2011 for an event in Taipei, it has been seen – in ever-changing variations – in several cities. Now it is the eye-catcher in front of the exhibition venue Cordoaria Nacional where the largest Ai exhibition to date is taking place until Nov. 28. Thereby, the artist is also thanking his new home country Portugal. He moved to the small town of Montemor-o-Novo in spring after being fed up first with Berlin and then with Cambridge. The town is best known for its production of corks. How long will the restless spirit stay this time?
