Table.Briefing: China

Mocking over Afghanistan debacle + Blockade on Nvidia deal

  • Beijing accepts Taliban control over Afghanistan
  • Semiconductors: China jeopardizes Nvidia’s acquisition of ARM
  • New rules for connected car data
  • Higher unemployment in July
  • Authorities take over management of oil refinery
  • Number of Covid cases drops in hotspot
  • Cooperation with universities terminated
  • In Profile: Eva Lüdi Kong – translator of “Journey to the West”
Dear reader,

The obviously rushed withdrawal from Afghanistan is currently the biggest failure of US policy in Central Asia. Germany, as an ally, is now also deeply involved in the disaster. The big neighbor China, on the other hand, brags that it had predicted the course of events and realistically assessed the Taliban’s strength. America’s decline begins in Afghanistan – that is the way Beijing sees it.

In fact, China has much better ties to the region than the USA has. And Beijing applies purely pragmatic standards in foreign policy. China now practices the policy of non-interference that it always demands of other nations. If the Taliban are the de facto rulers, then Chinese foreign policy recognizes them as the country’s rulers. Michael Radunski analyzes what ominous message China derives from these events for Taiwan.

At the same time, the pragmatism of Chinese policy means staying its hard course in the trade war with the US. Specifically, this creates an effective blockade for the potentially largest takeover in the semiconductor industry. The American chip manufacturer Nvidia planned the acquisition of British chip design service provider ARM. China, however, strongly objects: The concentration in the Western semiconductor industry threatens supplies to Chinese tech giants like Huawei. And Beijing certainly has a say in the matter; after all, antitrust authorities on all continents have to give their approval.

Your
Finn Mayer-Kuckuk
Image of Finn  Mayer-Kuckuk

Feature

Mocking over US failure in Afghanistan

Hu Xijin could hardly hide his joy on Monday. “Chinese Internet users joke that the transition of power in Afghanistan was more smooth than the presidential transition in the US,” tweets the editor-in-chief of Chinese newspaper Global Times.

With great pleasure, his newspaper refers to cynical comments posted on online platforms such as Sina Weibo: “The 20-year war is ending like a joke. American soldiers have died for nothing, the Taliban are back, and the only difference is that more people have died and American taxpayers have wasted their money.” Other comments read: “Those people who still believe in the US will never learn their lesson. They have been left behind like garbage by Americans.

Meanwhile, the Global Times’ official opinion piece derided the US as a “paper tiger”. “A country as powerful as the US cannot even defeat the Afghan Taliban in 20 years, which have received virtually no outside help.” And so the editors conclude that the US defeat being “a clearer demonstration of US impotence than the Vietnam War” showing the US was “a paper tiger.”

Current developments in Afghanistan fuel this view. In no time at all, the Taliban are conquering the entire country, and the government troops, equipped and trained by the US, are offering little resistance. While U.S. helicopters rescue diplomatic staff from the roof of the American embassy in Kabul, thousands of people at the airport are desperately trying to get a seat on one of the few evacuation flights. Meanwhile, reports of retaliatory killings and other brutal Taliban practices are beginning to emerge from areas captured by the Taliban.

Hotspot Wakhan Corridor

In light of this dramatic situation, China’s priority as a direct neighbor is to restore stability in Afghanistan – especially in the Wakhan Corridor. This region is a narrow strip of land in the province of Badakhshan in northeastern Afghanistan. It connects the Chinese region of Xinjiang with Afghanistan. It is therefore the most critical strategic region in the country for China.

According to a UN report, several hundred Uighur fighters are active throughout the region, which is why Beijing worked closely with the government in Kabul for years and helped to set up a special brigade to increase security in this border area. However, it has become clear in recent weeks that this was purely pragmatic cooperation for China: As soon as the government in Kabul lost power, Beijing initiated talks with the Taliban.

Less than three weeks ago, China’s Foreign Minister Wang Yi met in Tianjin with a Taliban delegation led by Mullah Abdul Ghani Baradar. Wang received explicit guarantees that the Taliban would no longer allow for Uighur insurgents or other groups to retreat to Afghanistan or to plan and carry out attacks against China from Afghan soil.

China has better intelligence than the USA

The timing of this meeting is remarkable: it took place right before the Taliban launched its major Taliban offensive. Back then, the radical Islamists sent several delegations to neighboring countries. But neither in Russia nor in Iran were they received as glamorously and with such a high profile as in China (as reported by China.Table).

China’s state media published almost friendship-like photos showing Foreign Minister Wang Yi shoulder-to-shoulder with representatives of the radical Islamic movement. In retrospect, it seems as if the intention was to gently prepare China’s population for the increasingly likely scenario that Beijing will recognize the Taliban as the legitimate regime in Afghanistan in the not too distant future.

At the time, U.S. intelligence agencies were still firmly convinced that after the announced withdrawal of U.S. troops, the Afghan government would keep the rival Taliban under control for at least six months. China was clearly better informed: Behind closed doors, the foreign ministry in Beijing was even told that the Taliban’s triumphant march was imminent.

And so China was clearly better prepared for the Taliban advance than the US and its Western allies. While embassies were evacuated in a hurry and without warning on Monday, China’s diplomatic mission in Kabul announced that they would of course keep the embassy open and continue their work as usual.

In this, observers see the continuation of a policy that has been emerging for some time. “For years, the People’s Republic has been working to establish good relations with the Taliban,” says regional expert Vanda Felbab-Brown of the Brookings Institution in Washington in an interview with China.Table. Through covert channels, Beijing has downright courted the holy warriors, the expert explains. This is now paying off.

China’s foreign ministry announced on Monday that it was ready for “friendly relations” with the new rulers of Afghanistan. “China respects the right of the Afghan people to independently decide their own fate and is willing to maintain friendly and cooperative relations with Afghanistan,” foreign office spokeswoman Hua Chunying said in Beijing.

New Silk Road to Afghanistan

If Beijing has its way, these friendly relations will focus primarily on economic aspects. China is already the largest foreign investor in the country, for example, financing oil and gas production. In addition, Beijing has been trying for some time to integrate Afghanistan into its prestigious New Silk Road project. A Peshawar-Kabul highway could close an important gap within the infrastructure project. However, so far Beijing’s plans have failed because Kabul did not want to alienate leaders in Washington.

Beijing is already building several roads in the Wakhan Corridor. This would connect Xinjiang to Afghanistan, from where goods and commodities will be delivered to Central Asia – and eventually Europe – via Pakistan. “If Beijing succeeds in building these links, trade in the region and exploitation of Afghanistan’s natural resources will increase dramatically,” Derek Grossman of US think tank Rand Corporation told China.Table. According to experts, Afghanistan is said to have huge deposits of rare minerals and other rare earth elements, estimated to be worth more than a trillion US dollars.

China does not want to repeat the mistakes of the West

But China’s economic ambitions have clear limits. Global Times stressed on Monday that the People’s Republic will not repeat the same mistake as several other major powers like the British Empire, the Soviet Union and most recently the US have done in the past: Sending troops to Afghanistan. “China is in a relatively comfortable situation. The principle of non-interference in the internal affairs of other countries has always been the guiding principle of China’s foreign policy,” the state-run newspaper says.

Regional observer Zhang Junhua of the European Institute for Asian Studies in Brussels also makes it clear: “Beijing will not burden itself with getting deeply involved in Afghan politics,” the China expert told China.Table. He sees two possible scenarios for how Beijing could increase its influence in Afghanistan – without being drawn into the depths of national politics: via the Shanghai Cooperation Organization (SCO) or through bilateral cooperation with Russia.

However, both options come with certain issues. “The members of the SCO are pursuing very different interests in Afghanistan,” Zhang explained. India, in particular, is determined to prevent the Taliban from cooperating with Pakistan and China at all costs. Delhi fears a geopolitical siege. The problem with a bilateral solution with Russia, according to Zhang, is that, despite currently friendly relations with China in Central Asia, Russia still sees itself as hegemony and protector and wants to keep China’s influence in Afghanistan as low as possible. It is evident that an expansion of influence also means new problems for Beijing.

This is one of the reasons why China explicitly distances itself from the West and deliberately avoids any moral superstructure for its plans of the kind propagated by its Western allies with slogans about democracy, human rights and free elections.

Lin Minwang, a South Asia expert at Fudan University in Shanghai, sums up Beijing’s attitude towards the Taliban and the current situation in Afghanistan: “We are quite pragmatic. The way they want to govern their country is largely up to them,” he told news agency Reuters.

China’s message: America’s promises count for nothing

In any case, the security situation in Afghanistan remains unclear, which is why it is difficult to make predictions about future developments. But right now, something else may be of bigger importance for strategists in Beijing.

The caustic cynicism and biting mockery in column inches put aside, another, much more far-reaching message resonates within these lines and is directed above all at America’s allies: The failure of the U.S. intervention in Afghanistan shows that Washington’s leadership can no longer be trusted. In this context, the Global Times already refers to Taiwan, which now should start to be seriously worried.

It is likely that only a handful of warmongers within the Global Times’ circle of influence are capable of such mental acrobatics as to draw a direct line from the events in Kabul to Taipei. But the underlying message is loud and clear: Washington’s guarantees of security no longer count for anything. Should this opinion prevail, the US would stand to lose far more than just its influence in Afghanistan.

  • Afghanistan
  • Geopolitics
  • India
  • New Silk Road
  • Pakistan
  • Security
  • Taliban
  • Trade

Nvidia and ARM: Beijing blocks mega acquisition

Probably the most important high-tech deal of the year is entering its final stages. With the end of the Brussels summer break in two weeks, US chip manufacturer Nvidia is expected to notify the acquisition of British chip designer ARM to the EU Commission for review under competition law. Prior to this, the UK government could still comment: The Secretary of State for Digital Oliver Dowden is currently evaluating a report by market regulator CMA, which also sheds light on consequences for the UK’s national security. But in all likelihood, the major project will fail due to China’s resistance.

But why is Beijing opposing the deal? Chinese chip manufacturers like Hisilicon and SMIC use ARM designs, as does telecom equipment maker Huawei. Large parts of China’s electronics industry rely on access to the company’s IP rights. An ARM acquisition by US-company Nvidia would leave the industry vulnerable to tech sanctions imposed by Washington. Chinese authorities will therefore keep a very close eye on the deal.

For the takeover to take effect in all markets in which both companies currently operate, antitrust authorities must give their approval in each case. Even a local separation does not circumvent this standard international procedure. China can therefore simply block the deal – or sit out a decision. In March of next year, an important deadline will pass, after which a conclusion of the acquisition is considered unlikely.

Processors made with ARM technology are found in almost every smartphone and many other devices. ARM designs are efficient and power-saving, which makes them superior to processors made by Intel or AMD, especially for mobile applications. In Germany, ARM is nevertheless only known to a few; the company only operates a small software subsidiary near Munich. The sale of a British company by Japanese owner Softbank to the US group Nvidia seemingly only has little impact on Interests in Germany and the EU. But this assessment is deceiving:

  • Nvidia is more than a graphics card manufacturer: Its expertise in particularly fast and sophisticated chips makes the company a leading provider of AI technology. Audi and Daimler are cooperating with Nvidia on autonomous driving, for example. So the deal would also have consequences for the automobile industry. Many of the semiconductors built into vehicles are based on ARM designs.
  • The company is also a cloud provider: Nvidia currently only lacks to become a full provider, is CPUs, says Jan-Peter Kleinhans, chip expert at New Responsibility Foundation. It now wants to fill this gap with the help of ARM. So far, the cloud hardware market has been dominated by rivals Intel and AMD.
  • ARM could lose its status as the “Switzerland of the semiconductor industry”: The company licenses its technology to a wide range of chipmakers and IT companies around the globe. Customers such as Google, Microsoft and Qualcomm have already publicly expressed fears that this neutrality could come to an end, should ARM be acquired by Nvidia.
  • Europe as a chip manufacturing location would be further weakened: “In the long term, Europe will lose knowledge in chip design,” warns Kleinhans. Even without the sale of ARM, the EU would be poorly positioned in this key area. So China and the EU have similar interests.

CEO Huang needs convincing arguments

China also owes its crucial role to a deal between Nvidia and ARM vendor Softbank. If approvals are still pending in September 2022, Nvidia and ARM are allowed to pursue other options, according to an agreement between the two partners. If China doesn’t come to a decision by then, the deal is likely to fall through.

Nvidia CEO Jensen Huang will also have to do a lot of convincing to the antitrust authorities that he is not using the technical edge of ARM developments for his own Nvidia products. “This would actually be obvious for a company that has original business interests in the field,” Kleinhans says. Nvidia is trying to allay these concerns, promising to “stick to the open licensing model.” All technical developments will be made available to ARM licensees, Huang, who is a native Taiwanese, assured.

Currently, there is no reason for Beijing to be amenable to the acquisition. US president, Joe Biden, has not reverted his predecessor’s trade policies, but has actually pushed them further (as reported by China.Table). The trade war could drag on for a long time and could intensify.

China opposed the Nvidia deal from the beginning

All Chinese players have opposed the deal from the start. “Regulators should say ‘no’ to Nvidia’s takeover of ARM,” the state-run Global Times headlined last year. In doing so, the Chinese mouthpiece drew a link to the US crackdown on the Chinese video app TikTok. This shows how aggressively the US defends its technological supremacy. Why should Beijing be compliant?

Meanwhile, the UK, the home of ARM, has been seeking trade opportunities around the world since Brexit. China has been aggressively bidding here. So the chances of being able to continue doing business with the UK and retaining access to ARM designs, even in the face of the trade war with the US, is high.

And Beijing also has very practical reasons to decline: Since ARM and Nvidia are headquartered in different countries, for the time being, ARM can still provide its chip architectures where Nvidia is already no longer allowed to deliver due to pressure by US authorities. Huawei, as a manufacturer of telecommunications equipment and consumer electronics with heavy pull in China, has therefore also spoken out against the merger. Huawei uses products made by the British company: The Kirin processor for mobile phones used by Huawei on a large scale, for example, is based on ARM chip designs. And Huawei is excluded from important supply chains by the US more than almost any other company from China.

Europe and China remain skeptical

European chip manufacturers are also watching the deal with a wary eye. Companies like Infineon and NXP depend on ARM-IP. This is why Experts believe it is unlikely that the Commission will already grant its approval of the deal in the first phase of its review. This would require clearly tailored concessions such as the sale of parts of the company, which would be difficult to identify in this case, says an antitrust lawyer who wished to remain anonymous.

Meanwhile, the approval process in the EU is still in its early stages. So far, both companies have not officially notified the deal to the EU Commission for review, as a spokeswoman confirms. The fact that the pre-notification phase is taking so long indicates that the EU competition authorities have already submitted an unusually large number of questions in advance.

Beijing and Brussels may face a mutual problem, however: Current owner Softbank wants to sell off its shares of ARM in any case. And for the moment it remains uncertain whether a different buyer would be preferable over Nvidia. Till Hoppe/Finn Mayer-Kuckuk

  • ARM
  • EU
  • Nvidia
  • Technology
  • Trade

News

Car manufacturers required to keep data in China

New regulations by the Ministry of Industry and Information Technology will require automakers to account for the data collected by connected vehicles, reported by business portal Caixin. The upcoming tightening of regulations is seen as part of the large-scale reorganization of China’s tech industries towards more conformity. A key issue here is the location of storage. Companies must submit an application, including legitimate reasons if customer data is to leave the country. Permission is also required for any software update that is applied wirelessly. Additionally, instead of the American positioning system GPS, cars are to navigate with the Chinese counterpart Beidou. fin

  • Car Industry
  • Data protection
  • Technology

Unemployment rate climbs slightly

China has recorded a slight increase in its unemployment rate. It rose from 5 percent to 5.1 percent in July, according to new data from the National Bureau of Statistics in Beijing. While the change may seem minimal, China’s unemployment rate is generally very stable, this makes economists wary of even small swings. Even the second-largest economy is not immune to the combination of heavy rains, repeated pandemic outbreaks and disruptions in container logistics.

China’s economy continued to grow in July – but the rise in indicators fell short of expectations. Retail sales, for example, rose by 8.5 percent, while analysts at German investment bank Deutsche Bank had expected a plus of 10.9 percent. Industrial production also fell well short of the forecast of 7.9 percent, rising only by 6.4 percent. The Deutsche Bank has therefore downgraded its growth outlook for the year as a whole. fin

  • Economy
  • Industry
  • Work

Officials manage private oil refinery

Government officials in northeast China have taken over the management of one of China’s largest private oil refineries in connection with tax investigations. A team led by officials from the city of Panjin in Liaoning has been appointed to manage the financially troubled Liaoning Bora Enterprise Group. The team is trying to restructure Bora to prevent it from collapsing, news agency Bloomberg reported, citing unnamed informed sources. According to the report, the ongoing investigation into large amounts of unpaid taxes could lead to heavy fines for Bora and, subsequently, bankruptcy. Bora has a crude oil processing capacity of more than 20 million tonnes per year. Due to its size, a collapse of Bora would lead to many layoffs and pose a financial risk to the city of Panjin itself.

A crackdown is currently underway against previously laxly regulated private refineries, which are mainly housed in the coastal province of Shandong, as well as in Liaoning. The city of Panjin is located right at the center: Several companies there are accused of tax evasion – for example, by abusing loopholes – or violations of environmental regulations. In Shandong, private refineries also had to vow at the beginning of the month to strictly comply with all regulations.

Private refiners account for a quarter of China’s total oil processing capacity, according to Bloomberg. They have since emerged as a real competitor to state-owned oil giants after the liberalization of the sector. But the central government cut back the private sector’s crude import quota this year. That could stunt their growth for now. ck

  • Climate
  • Environment
  • Raw materials
  • Sustainability

Fewer Covid cases in Jiangsu and Henan

The recent Covid outbreak in China appears to be gradually back under control due to strict restrictive measures. The National Health Commission still reported 51 new cases of COVID-19 on Monday, including 13 local and 38 imported infections. Symptomless cases also have decreased, with 17 imported and three local cases. These are not classified as confirmed cases of infection in China. Meanwhile, three asymptomatic cases in Xinjiang puzzled over the weekend: Those affected had not traveled outside the region for the past 14 days, nor had they had any contact with infected individuals, according to a report by China Daily.

The outbreak of the delta variant, noticed in Nanjing about a month ago, had been concentrated mainly in the provinces of Jiangsu and Henan. The government imposed strict quarantine rules throughout the regions and tested more than 90 million people to date. By European standards, the outbreak is of a rather small scale anyway: A total of 802 people have been infected in Jiangsu so far, most of them with 552 in the Yangtze city of Yangzhou.

Meanwhile, the Covid outbreak in Henan has already resulted in staff consequences. Five officials in the affected county of Yucheng – including the deputy county chief – have been removed from office due to poor coordination of disease control, according to a report by South China Morning Post. In Henan, just over 200 Covid patients remain hospitalized. ck

  • Delta
  • Health
  • Henan
  • Nanjing
  • Yangzhou

End for hundreds of university cooperations

China has terminated 286 collaborations with foreign universities. As the South China Morning Post reported on Monday, the Ministry of Education published a list of the terminated programs on its app. Affected are prestigious institutions such as City University London, New York University and the University of Hong Kong. For example, the bachelor’s program for Mechanical Design and Automation at Harbin University of Science and Technology and City University London is now ending. The termination of the programs was announced as part of a routine evaluation of the cooperation agreements, according to the newspaper. No official explanation for the decision has been given.

Just under a month ago, Beijing issued strict new rules for private education companies – which, for example, are no longer allowed to generate profits or accept foreign investment (as reported by China.Table). As a result, concerns about a large-scale crackdown on the entire education sector are growing in China, the South China Morning Post wrote. Since 2004, China has been regulating Sino-foreign education partnerships and scrutinizing their content. Programs have been canceled time and again since then. ck

´

  • Education
  • Society
  • Universities

Profile

Eva Lüdi Kong – Translator of “Journey to the West

Sinologist Eva Lüdi Kong is doing pioneering work with the translation of classical novels – and bringing contemporary voices to YouTube

Eva Lüdi Kong spent 17 years on the German translation of “Journey to the West”, one of four great classics of Chinese literature. The work was as groundbreaking for East Asian culture as Dante’s “Divine Comedy” once was for Europe. This was probably why no one before Lüdi Kong had dared to fully translate the epoch-making novel into German. All Publishers the 52-year-old Swiss author approached had declared the project as “too ambitious.” Nevertheless, the sinologist, who first came to China in the early 1990s at the age of 21, continued to work relentlessly – following a feeling of “inner necessity and meaningfulness”, as she says.

In addition to her work as an interpreter and university lecturer in Hangzhou, located in eastern China, Lüdi Kong repeatedly had found herself at her desk, tracing the heroes of the novel written in the 16th century. “When it was possible, I could sit at it for days, translating the stories. In the evening, I felt like I had an incredibly eventful day – until I realized that, yes, it had all happened in the book.”

In 2017, Lüdi Kong was awarded the German Book Prize for the 1,300-page mammoth project. The renowned Reclam publishing house published the 6th edition in 2019. “Back then, I would have been quite satisfied with a few hundred readers and a dozen friendly feedbacks,” the translator says modestly. “I never expected success.” Above all, she wanted “Chinese literature to break out of the “sinology cage” and become “a natural part of world literature,” she says today.

The epic, which interweaves the journey of a monk with Chinese folk tales and themes of Buddhism and Daoism, not only belongs to the canon of China’s four classic novels but is a fundamental part of popular culture throughout East Asia. Movies, video games, and manga such as “Dragonball” are based on the works. Every child knows the monkey king Sun Wukong. The shiny hero with his many character flaws is also Eva Lüdi Kong’s favorite character from the novel. “He is the free spirit who stays true to himself without compromise. In this way, he also embodies a secret longing that runs through the entire history of China: the longing not to have to submit. In the strictly hierarchical society, this was hardly possible – except in the case of open rebellions.

The conscience of the individual is a topic that continues to keep Lüdi Kong busy, even after the completion of her major translation work. Since the end of 2019, she has been working on a collection of textual testimonies exploring the theme of “rule and dissent in China” through historical documents from ancient times to the Ming Dynasty. “The writings are made by famous figures such as Qu Yuan, Sima Qian and Ji Kang, and show great sincerity in the desire to improve social justice.”

Parallels between old novels and the present

It was precisely their commitment to human values that made these historical figures the victims of intrigues in the ruling power structure, Lüdi Kong sums up. “They could have conformed and bowed to authority to get off scot-free. But they chose to follow the voice of their conscience. The incredible courage to stay true to themselves in the face of all repression has earned them great reverence at all times.”

While she was working on the writings, the Coronavirus broke out in Wuhan. Doctors and other whistleblowers were now also faced with the choice of going public with unwelcome truths or keeping them to themselves. After some were silenced by order or even arrested, it dawned on Lüdi Kong that history was repeating itself before her very eyes. “The parallels to ancient texts were fascinating,” she says. “The advocacy of some courageous individuals for openness, for social improvement, and for justice was equal to the same attitude expressed in ancient scriptural testimonies.”

Feeling the need to make these voices heard, Lüdi Kong created a YouTube channel called “China’s Free Voices” as a side project. There she translates critical voices from Chinese into German, such as of professor Cai Xia or martial artist Xu Xiaodong, who is outlawed by the state. “With a work like this, you come to an invisible threshold, where sooner or later you have to make exactly the same decision that Qu Yuan already formulated,” Lüdi Kong admits: “Should I say what I think without reservations, even though I’m putting myself in danger?”

European policymakers also face similar questions, says Lüdi Kong, who moved back to Switzerland in 2016: “Should we rather silently ignore grievances so as not to spoil our market access?” The sinologist nevertheless dislikes the term “dissident” because it blew certain personalities like Ai Weiwei out of proportion. For her, her work is also not primarily about criticism of the Chinese state, but a critical reflection on Chinese culture, which we can no longer avoid today. Fabian Peltsch

  • Culture
  • Literature

Executive Moves

Allen Lee will become one of the CEOs of Shanghai Biren Intelligent Technology, a developer of AI chips. The company headhunted Lee from the Chinese research division of US chipmaker AMD. Lee had worked for AMD for 19 years.

Zheng Shaoping is stepping down as chairman of Antong Holdings 安通控股, a logistics service provider. The 58-year-old remains chairman of several companies in the cargo-handling industry, including Shanghai Port, China Merchants Port Holding and Ningbo Zhoushan Port.

Dessert

Shanghai saw rainfall on Monday. No heavy rain, but proper summer rain accompanied by local thunderstorms. While low-pressure areas are causing abundant precipitation in Germany, the weather radar also shows more rain pockets in East Asia.

China.Table Editors

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    • Beijing accepts Taliban control over Afghanistan
    • Semiconductors: China jeopardizes Nvidia’s acquisition of ARM
    • New rules for connected car data
    • Higher unemployment in July
    • Authorities take over management of oil refinery
    • Number of Covid cases drops in hotspot
    • Cooperation with universities terminated
    • In Profile: Eva Lüdi Kong – translator of “Journey to the West”
    Dear reader,

    The obviously rushed withdrawal from Afghanistan is currently the biggest failure of US policy in Central Asia. Germany, as an ally, is now also deeply involved in the disaster. The big neighbor China, on the other hand, brags that it had predicted the course of events and realistically assessed the Taliban’s strength. America’s decline begins in Afghanistan – that is the way Beijing sees it.

    In fact, China has much better ties to the region than the USA has. And Beijing applies purely pragmatic standards in foreign policy. China now practices the policy of non-interference that it always demands of other nations. If the Taliban are the de facto rulers, then Chinese foreign policy recognizes them as the country’s rulers. Michael Radunski analyzes what ominous message China derives from these events for Taiwan.

    At the same time, the pragmatism of Chinese policy means staying its hard course in the trade war with the US. Specifically, this creates an effective blockade for the potentially largest takeover in the semiconductor industry. The American chip manufacturer Nvidia planned the acquisition of British chip design service provider ARM. China, however, strongly objects: The concentration in the Western semiconductor industry threatens supplies to Chinese tech giants like Huawei. And Beijing certainly has a say in the matter; after all, antitrust authorities on all continents have to give their approval.

    Your
    Finn Mayer-Kuckuk
    Image of Finn  Mayer-Kuckuk

    Feature

    Mocking over US failure in Afghanistan

    Hu Xijin could hardly hide his joy on Monday. “Chinese Internet users joke that the transition of power in Afghanistan was more smooth than the presidential transition in the US,” tweets the editor-in-chief of Chinese newspaper Global Times.

    With great pleasure, his newspaper refers to cynical comments posted on online platforms such as Sina Weibo: “The 20-year war is ending like a joke. American soldiers have died for nothing, the Taliban are back, and the only difference is that more people have died and American taxpayers have wasted their money.” Other comments read: “Those people who still believe in the US will never learn their lesson. They have been left behind like garbage by Americans.

    Meanwhile, the Global Times’ official opinion piece derided the US as a “paper tiger”. “A country as powerful as the US cannot even defeat the Afghan Taliban in 20 years, which have received virtually no outside help.” And so the editors conclude that the US defeat being “a clearer demonstration of US impotence than the Vietnam War” showing the US was “a paper tiger.”

    Current developments in Afghanistan fuel this view. In no time at all, the Taliban are conquering the entire country, and the government troops, equipped and trained by the US, are offering little resistance. While U.S. helicopters rescue diplomatic staff from the roof of the American embassy in Kabul, thousands of people at the airport are desperately trying to get a seat on one of the few evacuation flights. Meanwhile, reports of retaliatory killings and other brutal Taliban practices are beginning to emerge from areas captured by the Taliban.

    Hotspot Wakhan Corridor

    In light of this dramatic situation, China’s priority as a direct neighbor is to restore stability in Afghanistan – especially in the Wakhan Corridor. This region is a narrow strip of land in the province of Badakhshan in northeastern Afghanistan. It connects the Chinese region of Xinjiang with Afghanistan. It is therefore the most critical strategic region in the country for China.

    According to a UN report, several hundred Uighur fighters are active throughout the region, which is why Beijing worked closely with the government in Kabul for years and helped to set up a special brigade to increase security in this border area. However, it has become clear in recent weeks that this was purely pragmatic cooperation for China: As soon as the government in Kabul lost power, Beijing initiated talks with the Taliban.

    Less than three weeks ago, China’s Foreign Minister Wang Yi met in Tianjin with a Taliban delegation led by Mullah Abdul Ghani Baradar. Wang received explicit guarantees that the Taliban would no longer allow for Uighur insurgents or other groups to retreat to Afghanistan or to plan and carry out attacks against China from Afghan soil.

    China has better intelligence than the USA

    The timing of this meeting is remarkable: it took place right before the Taliban launched its major Taliban offensive. Back then, the radical Islamists sent several delegations to neighboring countries. But neither in Russia nor in Iran were they received as glamorously and with such a high profile as in China (as reported by China.Table).

    China’s state media published almost friendship-like photos showing Foreign Minister Wang Yi shoulder-to-shoulder with representatives of the radical Islamic movement. In retrospect, it seems as if the intention was to gently prepare China’s population for the increasingly likely scenario that Beijing will recognize the Taliban as the legitimate regime in Afghanistan in the not too distant future.

    At the time, U.S. intelligence agencies were still firmly convinced that after the announced withdrawal of U.S. troops, the Afghan government would keep the rival Taliban under control for at least six months. China was clearly better informed: Behind closed doors, the foreign ministry in Beijing was even told that the Taliban’s triumphant march was imminent.

    And so China was clearly better prepared for the Taliban advance than the US and its Western allies. While embassies were evacuated in a hurry and without warning on Monday, China’s diplomatic mission in Kabul announced that they would of course keep the embassy open and continue their work as usual.

    In this, observers see the continuation of a policy that has been emerging for some time. “For years, the People’s Republic has been working to establish good relations with the Taliban,” says regional expert Vanda Felbab-Brown of the Brookings Institution in Washington in an interview with China.Table. Through covert channels, Beijing has downright courted the holy warriors, the expert explains. This is now paying off.

    China’s foreign ministry announced on Monday that it was ready for “friendly relations” with the new rulers of Afghanistan. “China respects the right of the Afghan people to independently decide their own fate and is willing to maintain friendly and cooperative relations with Afghanistan,” foreign office spokeswoman Hua Chunying said in Beijing.

    New Silk Road to Afghanistan

    If Beijing has its way, these friendly relations will focus primarily on economic aspects. China is already the largest foreign investor in the country, for example, financing oil and gas production. In addition, Beijing has been trying for some time to integrate Afghanistan into its prestigious New Silk Road project. A Peshawar-Kabul highway could close an important gap within the infrastructure project. However, so far Beijing’s plans have failed because Kabul did not want to alienate leaders in Washington.

    Beijing is already building several roads in the Wakhan Corridor. This would connect Xinjiang to Afghanistan, from where goods and commodities will be delivered to Central Asia – and eventually Europe – via Pakistan. “If Beijing succeeds in building these links, trade in the region and exploitation of Afghanistan’s natural resources will increase dramatically,” Derek Grossman of US think tank Rand Corporation told China.Table. According to experts, Afghanistan is said to have huge deposits of rare minerals and other rare earth elements, estimated to be worth more than a trillion US dollars.

    China does not want to repeat the mistakes of the West

    But China’s economic ambitions have clear limits. Global Times stressed on Monday that the People’s Republic will not repeat the same mistake as several other major powers like the British Empire, the Soviet Union and most recently the US have done in the past: Sending troops to Afghanistan. “China is in a relatively comfortable situation. The principle of non-interference in the internal affairs of other countries has always been the guiding principle of China’s foreign policy,” the state-run newspaper says.

    Regional observer Zhang Junhua of the European Institute for Asian Studies in Brussels also makes it clear: “Beijing will not burden itself with getting deeply involved in Afghan politics,” the China expert told China.Table. He sees two possible scenarios for how Beijing could increase its influence in Afghanistan – without being drawn into the depths of national politics: via the Shanghai Cooperation Organization (SCO) or through bilateral cooperation with Russia.

    However, both options come with certain issues. “The members of the SCO are pursuing very different interests in Afghanistan,” Zhang explained. India, in particular, is determined to prevent the Taliban from cooperating with Pakistan and China at all costs. Delhi fears a geopolitical siege. The problem with a bilateral solution with Russia, according to Zhang, is that, despite currently friendly relations with China in Central Asia, Russia still sees itself as hegemony and protector and wants to keep China’s influence in Afghanistan as low as possible. It is evident that an expansion of influence also means new problems for Beijing.

    This is one of the reasons why China explicitly distances itself from the West and deliberately avoids any moral superstructure for its plans of the kind propagated by its Western allies with slogans about democracy, human rights and free elections.

    Lin Minwang, a South Asia expert at Fudan University in Shanghai, sums up Beijing’s attitude towards the Taliban and the current situation in Afghanistan: “We are quite pragmatic. The way they want to govern their country is largely up to them,” he told news agency Reuters.

    China’s message: America’s promises count for nothing

    In any case, the security situation in Afghanistan remains unclear, which is why it is difficult to make predictions about future developments. But right now, something else may be of bigger importance for strategists in Beijing.

    The caustic cynicism and biting mockery in column inches put aside, another, much more far-reaching message resonates within these lines and is directed above all at America’s allies: The failure of the U.S. intervention in Afghanistan shows that Washington’s leadership can no longer be trusted. In this context, the Global Times already refers to Taiwan, which now should start to be seriously worried.

    It is likely that only a handful of warmongers within the Global Times’ circle of influence are capable of such mental acrobatics as to draw a direct line from the events in Kabul to Taipei. But the underlying message is loud and clear: Washington’s guarantees of security no longer count for anything. Should this opinion prevail, the US would stand to lose far more than just its influence in Afghanistan.

    • Afghanistan
    • Geopolitics
    • India
    • New Silk Road
    • Pakistan
    • Security
    • Taliban
    • Trade

    Nvidia and ARM: Beijing blocks mega acquisition

    Probably the most important high-tech deal of the year is entering its final stages. With the end of the Brussels summer break in two weeks, US chip manufacturer Nvidia is expected to notify the acquisition of British chip designer ARM to the EU Commission for review under competition law. Prior to this, the UK government could still comment: The Secretary of State for Digital Oliver Dowden is currently evaluating a report by market regulator CMA, which also sheds light on consequences for the UK’s national security. But in all likelihood, the major project will fail due to China’s resistance.

    But why is Beijing opposing the deal? Chinese chip manufacturers like Hisilicon and SMIC use ARM designs, as does telecom equipment maker Huawei. Large parts of China’s electronics industry rely on access to the company’s IP rights. An ARM acquisition by US-company Nvidia would leave the industry vulnerable to tech sanctions imposed by Washington. Chinese authorities will therefore keep a very close eye on the deal.

    For the takeover to take effect in all markets in which both companies currently operate, antitrust authorities must give their approval in each case. Even a local separation does not circumvent this standard international procedure. China can therefore simply block the deal – or sit out a decision. In March of next year, an important deadline will pass, after which a conclusion of the acquisition is considered unlikely.

    Processors made with ARM technology are found in almost every smartphone and many other devices. ARM designs are efficient and power-saving, which makes them superior to processors made by Intel or AMD, especially for mobile applications. In Germany, ARM is nevertheless only known to a few; the company only operates a small software subsidiary near Munich. The sale of a British company by Japanese owner Softbank to the US group Nvidia seemingly only has little impact on Interests in Germany and the EU. But this assessment is deceiving:

    • Nvidia is more than a graphics card manufacturer: Its expertise in particularly fast and sophisticated chips makes the company a leading provider of AI technology. Audi and Daimler are cooperating with Nvidia on autonomous driving, for example. So the deal would also have consequences for the automobile industry. Many of the semiconductors built into vehicles are based on ARM designs.
    • The company is also a cloud provider: Nvidia currently only lacks to become a full provider, is CPUs, says Jan-Peter Kleinhans, chip expert at New Responsibility Foundation. It now wants to fill this gap with the help of ARM. So far, the cloud hardware market has been dominated by rivals Intel and AMD.
    • ARM could lose its status as the “Switzerland of the semiconductor industry”: The company licenses its technology to a wide range of chipmakers and IT companies around the globe. Customers such as Google, Microsoft and Qualcomm have already publicly expressed fears that this neutrality could come to an end, should ARM be acquired by Nvidia.
    • Europe as a chip manufacturing location would be further weakened: “In the long term, Europe will lose knowledge in chip design,” warns Kleinhans. Even without the sale of ARM, the EU would be poorly positioned in this key area. So China and the EU have similar interests.

    CEO Huang needs convincing arguments

    China also owes its crucial role to a deal between Nvidia and ARM vendor Softbank. If approvals are still pending in September 2022, Nvidia and ARM are allowed to pursue other options, according to an agreement between the two partners. If China doesn’t come to a decision by then, the deal is likely to fall through.

    Nvidia CEO Jensen Huang will also have to do a lot of convincing to the antitrust authorities that he is not using the technical edge of ARM developments for his own Nvidia products. “This would actually be obvious for a company that has original business interests in the field,” Kleinhans says. Nvidia is trying to allay these concerns, promising to “stick to the open licensing model.” All technical developments will be made available to ARM licensees, Huang, who is a native Taiwanese, assured.

    Currently, there is no reason for Beijing to be amenable to the acquisition. US president, Joe Biden, has not reverted his predecessor’s trade policies, but has actually pushed them further (as reported by China.Table). The trade war could drag on for a long time and could intensify.

    China opposed the Nvidia deal from the beginning

    All Chinese players have opposed the deal from the start. “Regulators should say ‘no’ to Nvidia’s takeover of ARM,” the state-run Global Times headlined last year. In doing so, the Chinese mouthpiece drew a link to the US crackdown on the Chinese video app TikTok. This shows how aggressively the US defends its technological supremacy. Why should Beijing be compliant?

    Meanwhile, the UK, the home of ARM, has been seeking trade opportunities around the world since Brexit. China has been aggressively bidding here. So the chances of being able to continue doing business with the UK and retaining access to ARM designs, even in the face of the trade war with the US, is high.

    And Beijing also has very practical reasons to decline: Since ARM and Nvidia are headquartered in different countries, for the time being, ARM can still provide its chip architectures where Nvidia is already no longer allowed to deliver due to pressure by US authorities. Huawei, as a manufacturer of telecommunications equipment and consumer electronics with heavy pull in China, has therefore also spoken out against the merger. Huawei uses products made by the British company: The Kirin processor for mobile phones used by Huawei on a large scale, for example, is based on ARM chip designs. And Huawei is excluded from important supply chains by the US more than almost any other company from China.

    Europe and China remain skeptical

    European chip manufacturers are also watching the deal with a wary eye. Companies like Infineon and NXP depend on ARM-IP. This is why Experts believe it is unlikely that the Commission will already grant its approval of the deal in the first phase of its review. This would require clearly tailored concessions such as the sale of parts of the company, which would be difficult to identify in this case, says an antitrust lawyer who wished to remain anonymous.

    Meanwhile, the approval process in the EU is still in its early stages. So far, both companies have not officially notified the deal to the EU Commission for review, as a spokeswoman confirms. The fact that the pre-notification phase is taking so long indicates that the EU competition authorities have already submitted an unusually large number of questions in advance.

    Beijing and Brussels may face a mutual problem, however: Current owner Softbank wants to sell off its shares of ARM in any case. And for the moment it remains uncertain whether a different buyer would be preferable over Nvidia. Till Hoppe/Finn Mayer-Kuckuk

    • ARM
    • EU
    • Nvidia
    • Technology
    • Trade

    News

    Car manufacturers required to keep data in China

    New regulations by the Ministry of Industry and Information Technology will require automakers to account for the data collected by connected vehicles, reported by business portal Caixin. The upcoming tightening of regulations is seen as part of the large-scale reorganization of China’s tech industries towards more conformity. A key issue here is the location of storage. Companies must submit an application, including legitimate reasons if customer data is to leave the country. Permission is also required for any software update that is applied wirelessly. Additionally, instead of the American positioning system GPS, cars are to navigate with the Chinese counterpart Beidou. fin

    • Car Industry
    • Data protection
    • Technology

    Unemployment rate climbs slightly

    China has recorded a slight increase in its unemployment rate. It rose from 5 percent to 5.1 percent in July, according to new data from the National Bureau of Statistics in Beijing. While the change may seem minimal, China’s unemployment rate is generally very stable, this makes economists wary of even small swings. Even the second-largest economy is not immune to the combination of heavy rains, repeated pandemic outbreaks and disruptions in container logistics.

    China’s economy continued to grow in July – but the rise in indicators fell short of expectations. Retail sales, for example, rose by 8.5 percent, while analysts at German investment bank Deutsche Bank had expected a plus of 10.9 percent. Industrial production also fell well short of the forecast of 7.9 percent, rising only by 6.4 percent. The Deutsche Bank has therefore downgraded its growth outlook for the year as a whole. fin

    • Economy
    • Industry
    • Work

    Officials manage private oil refinery

    Government officials in northeast China have taken over the management of one of China’s largest private oil refineries in connection with tax investigations. A team led by officials from the city of Panjin in Liaoning has been appointed to manage the financially troubled Liaoning Bora Enterprise Group. The team is trying to restructure Bora to prevent it from collapsing, news agency Bloomberg reported, citing unnamed informed sources. According to the report, the ongoing investigation into large amounts of unpaid taxes could lead to heavy fines for Bora and, subsequently, bankruptcy. Bora has a crude oil processing capacity of more than 20 million tonnes per year. Due to its size, a collapse of Bora would lead to many layoffs and pose a financial risk to the city of Panjin itself.

    A crackdown is currently underway against previously laxly regulated private refineries, which are mainly housed in the coastal province of Shandong, as well as in Liaoning. The city of Panjin is located right at the center: Several companies there are accused of tax evasion – for example, by abusing loopholes – or violations of environmental regulations. In Shandong, private refineries also had to vow at the beginning of the month to strictly comply with all regulations.

    Private refiners account for a quarter of China’s total oil processing capacity, according to Bloomberg. They have since emerged as a real competitor to state-owned oil giants after the liberalization of the sector. But the central government cut back the private sector’s crude import quota this year. That could stunt their growth for now. ck

    • Climate
    • Environment
    • Raw materials
    • Sustainability

    Fewer Covid cases in Jiangsu and Henan

    The recent Covid outbreak in China appears to be gradually back under control due to strict restrictive measures. The National Health Commission still reported 51 new cases of COVID-19 on Monday, including 13 local and 38 imported infections. Symptomless cases also have decreased, with 17 imported and three local cases. These are not classified as confirmed cases of infection in China. Meanwhile, three asymptomatic cases in Xinjiang puzzled over the weekend: Those affected had not traveled outside the region for the past 14 days, nor had they had any contact with infected individuals, according to a report by China Daily.

    The outbreak of the delta variant, noticed in Nanjing about a month ago, had been concentrated mainly in the provinces of Jiangsu and Henan. The government imposed strict quarantine rules throughout the regions and tested more than 90 million people to date. By European standards, the outbreak is of a rather small scale anyway: A total of 802 people have been infected in Jiangsu so far, most of them with 552 in the Yangtze city of Yangzhou.

    Meanwhile, the Covid outbreak in Henan has already resulted in staff consequences. Five officials in the affected county of Yucheng – including the deputy county chief – have been removed from office due to poor coordination of disease control, according to a report by South China Morning Post. In Henan, just over 200 Covid patients remain hospitalized. ck

    • Delta
    • Health
    • Henan
    • Nanjing
    • Yangzhou

    End for hundreds of university cooperations

    China has terminated 286 collaborations with foreign universities. As the South China Morning Post reported on Monday, the Ministry of Education published a list of the terminated programs on its app. Affected are prestigious institutions such as City University London, New York University and the University of Hong Kong. For example, the bachelor’s program for Mechanical Design and Automation at Harbin University of Science and Technology and City University London is now ending. The termination of the programs was announced as part of a routine evaluation of the cooperation agreements, according to the newspaper. No official explanation for the decision has been given.

    Just under a month ago, Beijing issued strict new rules for private education companies – which, for example, are no longer allowed to generate profits or accept foreign investment (as reported by China.Table). As a result, concerns about a large-scale crackdown on the entire education sector are growing in China, the South China Morning Post wrote. Since 2004, China has been regulating Sino-foreign education partnerships and scrutinizing their content. Programs have been canceled time and again since then. ck

    ´

    • Education
    • Society
    • Universities

    Profile

    Eva Lüdi Kong – Translator of “Journey to the West

    Sinologist Eva Lüdi Kong is doing pioneering work with the translation of classical novels – and bringing contemporary voices to YouTube

    Eva Lüdi Kong spent 17 years on the German translation of “Journey to the West”, one of four great classics of Chinese literature. The work was as groundbreaking for East Asian culture as Dante’s “Divine Comedy” once was for Europe. This was probably why no one before Lüdi Kong had dared to fully translate the epoch-making novel into German. All Publishers the 52-year-old Swiss author approached had declared the project as “too ambitious.” Nevertheless, the sinologist, who first came to China in the early 1990s at the age of 21, continued to work relentlessly – following a feeling of “inner necessity and meaningfulness”, as she says.

    In addition to her work as an interpreter and university lecturer in Hangzhou, located in eastern China, Lüdi Kong repeatedly had found herself at her desk, tracing the heroes of the novel written in the 16th century. “When it was possible, I could sit at it for days, translating the stories. In the evening, I felt like I had an incredibly eventful day – until I realized that, yes, it had all happened in the book.”

    In 2017, Lüdi Kong was awarded the German Book Prize for the 1,300-page mammoth project. The renowned Reclam publishing house published the 6th edition in 2019. “Back then, I would have been quite satisfied with a few hundred readers and a dozen friendly feedbacks,” the translator says modestly. “I never expected success.” Above all, she wanted “Chinese literature to break out of the “sinology cage” and become “a natural part of world literature,” she says today.

    The epic, which interweaves the journey of a monk with Chinese folk tales and themes of Buddhism and Daoism, not only belongs to the canon of China’s four classic novels but is a fundamental part of popular culture throughout East Asia. Movies, video games, and manga such as “Dragonball” are based on the works. Every child knows the monkey king Sun Wukong. The shiny hero with his many character flaws is also Eva Lüdi Kong’s favorite character from the novel. “He is the free spirit who stays true to himself without compromise. In this way, he also embodies a secret longing that runs through the entire history of China: the longing not to have to submit. In the strictly hierarchical society, this was hardly possible – except in the case of open rebellions.

    The conscience of the individual is a topic that continues to keep Lüdi Kong busy, even after the completion of her major translation work. Since the end of 2019, she has been working on a collection of textual testimonies exploring the theme of “rule and dissent in China” through historical documents from ancient times to the Ming Dynasty. “The writings are made by famous figures such as Qu Yuan, Sima Qian and Ji Kang, and show great sincerity in the desire to improve social justice.”

    Parallels between old novels and the present

    It was precisely their commitment to human values that made these historical figures the victims of intrigues in the ruling power structure, Lüdi Kong sums up. “They could have conformed and bowed to authority to get off scot-free. But they chose to follow the voice of their conscience. The incredible courage to stay true to themselves in the face of all repression has earned them great reverence at all times.”

    While she was working on the writings, the Coronavirus broke out in Wuhan. Doctors and other whistleblowers were now also faced with the choice of going public with unwelcome truths or keeping them to themselves. After some were silenced by order or even arrested, it dawned on Lüdi Kong that history was repeating itself before her very eyes. “The parallels to ancient texts were fascinating,” she says. “The advocacy of some courageous individuals for openness, for social improvement, and for justice was equal to the same attitude expressed in ancient scriptural testimonies.”

    Feeling the need to make these voices heard, Lüdi Kong created a YouTube channel called “China’s Free Voices” as a side project. There she translates critical voices from Chinese into German, such as of professor Cai Xia or martial artist Xu Xiaodong, who is outlawed by the state. “With a work like this, you come to an invisible threshold, where sooner or later you have to make exactly the same decision that Qu Yuan already formulated,” Lüdi Kong admits: “Should I say what I think without reservations, even though I’m putting myself in danger?”

    European policymakers also face similar questions, says Lüdi Kong, who moved back to Switzerland in 2016: “Should we rather silently ignore grievances so as not to spoil our market access?” The sinologist nevertheless dislikes the term “dissident” because it blew certain personalities like Ai Weiwei out of proportion. For her, her work is also not primarily about criticism of the Chinese state, but a critical reflection on Chinese culture, which we can no longer avoid today. Fabian Peltsch

    • Culture
    • Literature

    Executive Moves

    Allen Lee will become one of the CEOs of Shanghai Biren Intelligent Technology, a developer of AI chips. The company headhunted Lee from the Chinese research division of US chipmaker AMD. Lee had worked for AMD for 19 years.

    Zheng Shaoping is stepping down as chairman of Antong Holdings 安通控股, a logistics service provider. The 58-year-old remains chairman of several companies in the cargo-handling industry, including Shanghai Port, China Merchants Port Holding and Ningbo Zhoushan Port.

    Dessert

    Shanghai saw rainfall on Monday. No heavy rain, but proper summer rain accompanied by local thunderstorms. While low-pressure areas are causing abundant precipitation in Germany, the weather radar also shows more rain pockets in East Asia.

    China.Table Editors

    CHINA.TABLE EDITORIAL OFFICE

    Licenses:

      Sign up now and continue reading immediately

      No credit card details required. No automatic renewal.

      Sie haben bereits das Table.Briefing Abonnement?

      Anmelden und weiterlesen