Diplomacy is in full swing lately. While US Secretary of State Antony Blinken has been catching up on his long-planned visit to China since Sunday, Berlin is preparing for the first German-Chinese government consultations under Chancellor Olaf Scholz. Scholz and Premier Li Qiang will meet as early as today, Monday. The plenary session with the ministers of both countries will follow on Tuesday. Li has only taken office since March; for him, too, these are the first government consultations with Germany.
While these major rounds of talks used to be clearly shaped by the desire for more cooperation, today things are more difficult. The EU and also Germany are struggling to find a balance between partnership and a distanced approach to China. In this situation, the Greens and the Free Democratic Party are more critical of the country than the Chancellor’s party, the Social Democratic Party. And China’s Foreign Minister Qin Gang will not be attending, as Frank Sieren learned.
Officially, China’s foreign minister excuses himself with the almost simultaneous meeting with Blinken – with whom he spoke for more than five hours on Sunday, as Michael Radunski reports. Unofficially, however, Beijing considers Foreign Minister Annalena Baerbock difficult since her visit.
German companies in China, on the other hand, clearly wish for a return to the old spirit of cooperation. Not naively, but nevertheless in search of common interests, as Joern Petring analyzes using a survey by the German Chamber of Commerce in China.
Ahead of the start of the government consultations with China, the German business community is calling for a detailed discussion of the potential for new cooperation at the meeting. “In developing the China strategy in recent years, much effort has been devoted to the question of how we can deal with China as a competitor and also as a system rival. From our point of view, the discussion about China as a cooperation partner came up short,” said Jens Hildebrandt, Executive Director of the German Chamber of Commerce (AHK) in Beijing, commenting on the upcoming consultations with China in Berlin.
On Monday morning, the program kicks off the Sino-German government consultations – for the seventh time since its inception in 2011. The actual talks will be held on Tuesday.
The goal is not to pander but to find common interests. “The question is how we can cooperate wisely with Chinese companies without being naive,” says Hildebrandt. The chances that Germany will get something out of it are looking good now. He called the fact that the very first foreign trip of the new Chinese prime minister to Germany a “clear signal.” “This shows how important Germany is for China.”
Last November, Chancellor Olaf Scholz traveled to China for his inaugural visit – as the first Western head of government after the Party Congress of the Chinese Communist Party, where President Xi Jinping consolidated his power. In his own words, Scholz expects a “very important working meeting.” It is the right time “and also, of course, a world situation in which it makes particular sense to exchange ideas,” he said a few days ago.
Given the tensions with the USA, Beijing is keen to keep relations with Europe “as stable and good as possible,” Hildebrandt also emphasized. Germany is seen as an important anchor. The German government should take advantage of this, the Chamber believes.
Li Qiang will travel to Berlin with nine members of the Chinese government. The itinerary for the visit is as follows:
After the conclusion of the government consultations on Tuesday, Scholz and Economy Minister Robert Habeck will once again meet with Li Qiang, the Chairman of the National Development and Reform Commission (NDRC) Zheng Shanjie and Trade Minister Wang Wentao at the Federal Ministry for Economic Affairs and Climate Action. Business representatives will also be in attendance.
During his Germany tour, Premier Li will also stop by Munich to meet with BMW CEO Oliver Zipse and the CSU Minister President of Bavaria, Markus Soeder.
Companies operating in China have several things on their wish list for cooperation with China. In a recent AHK survey, member companies listed the following areas in which cooperation should be specifically promoted:
Accordingly, the German government is also expected to address the following problems and issues the German business community faces in China:
It is unrealistic to expect the announcement of any significant agreements immediately after the meeting in Berlin. Still, Hildebrandt believes that the first government consultations since the end of the pandemic will send an important signal. “From our point of view, it is about reviving bilateral relations.” Initially, there will be a “cautious feeling out.” But that, too, is an important first step, he added.
Mikko Huotari, Director of the Mercator Institute for China Studies in Berlin, also believes the talks with China are sensible. “It is in Germany’s interest not to let geopolitical tensions with China escalate,” says Huotari.
It is important for Germany to talk to a difficult actor like China regularly, he said. The balancing act of the German government is becoming more difficult. There is uncertainty about the China policy. At the same time, the tensions within the German government coalition are only partially resolved.
And there is also some trench warfare with Brussels regarding the economic security of the relationship with China, 5G networks or trade protection instruments in the automotive sector. But there are also issues where Germany must now step up its game, Huotari said. For example, Scholz’s visit to Beijing held out the prospect of closer cooperation in sustainability and health. “It is time for both sides to finally be more concrete here.”
And Jens Hildebrandt of the German Chamber of Commerce also believes that the Chinese should now be more concrete. A “charm offensive” has been observed for months. However, nothing has changed for the better for German companies in China.
The situation in the run-up to the 7th Sino-German intergovernmental consultations, which will take place next Tuesday, is uncertain. China would like to restore a degree of normality.
For instance, Beijing wanted more than just six ministers to meet. That was the number at the first-ever government consultations between Germany and Japan in March this year. China wants to beat its rival Japan here symbolically – and it has succeeded because Li Qiang is traveling with nine ministers.
In the meantime, the final preparations for the consultations are complicated because the political parties in the German government coalition have different positions on China. While the SPD-led Chancellery is more inclined towards cooperation, the Foreign Ministry focuses more on competition and system rivalry.
However, Chinese Foreign Minister Qin Gang will apparently not be traveling to Berlin, as China.Table has learned from diplomatic circles in Beijing and Berlin. Officially, because his US counterpart Antony Blinken arrived in Beijing on Sunday, but that is not considered the only reason in Beijing. According to diplomats, the tensions between German Foreign Minister Annalena Baerbock and Qin also play a role.
There is also friction elsewhere. Talks on science and research will only be held at the vice-ministerial level because Federal Research Minister Bettina Stark-Watzinger traveled to Taiwan in March. The German government argues this was a technical ministerial visit involving concrete projects. The unwritten rules in Berlin are that only large ministries such as foreign affairs, economics, defense or finance are not permitted to have direct contacts. As a result, Taiwan’s Foreign Minister Joseph Wu, who regularly travels to Europe, will not be received.
Beijing, on the other hand, insists that the government is the government, and such visits would undermine the one-China principle. On the German side, State Secretary Sabine Doering will probably lead the talks.
Thus, one of the key cooperation agreements will not involve the Ministry of Research, but rather the Ministry of Transport, which is also responsible for digital issues: cooperation on autonomous driving. Here, the focus is on ways to continue a memorandum of understanding between China and Germany signed in 2018. Among other things, the aim is to facilitate an exchange of data to allow German car manufacturers to use the data they obtain in China in Germany and vice versa.
The Economy Ministry’s primary concern is to flesh out the so-called “transformation talks.” During his visit to Beijing in November, Chancellor Olaf Scholz agreed on a bilateral climate and transformation dialogue. Economy Minister Robert Habeck wants China to commit to Germany’s climate goals. “As the world’s largest CO2 emitter, it must live up to its responsibility here,” Parliamentary State Secretary and Green Party MP Franziska Brantner told German media. “China is already suffering the consequences of the climate crisis, so faster action is in its own interest.”
But when it comes to Beijing’s own interests, Beijing will decide for itself and not let Berlin dictate the pace and direction. This is where the talks will become difficult. Beijing is also having a hard time with the Climate Club founded by Scholz last year during the German G7 presidency. The rules of the club were laid down from the outset. And according to Beijing’s assessment, these are the rules of the G7 and not jointly developed rules.
Another problematic issue is the issuing of visas. While China now once again allows six-day visa-free entry, the German visa regime is still so strict that not even two top Chinese scholarship holders of the German Academic Exchange Service (DAAD) are currently granted visas, as China.Table learned from academic circles in Beijing.
Compared to France, Spain or even the Netherlands, Germany has by far the strictest visa regulations. As a result, many Chinese who have business in Germany enter the Schengen area via France and other countries. The government consultations are expected to bring progress in this area.
The situation is equally difficult when it comes to pork meat. In May, France already signed a regionalization agreement with China in case of an outbreak of African swine fever. It states that in the event of an outbreak of swine fever in France, not all of France will automatically be banned from exporting pork to China. Germany has not yet managed to sign a comparable agreement with China.
Following a swine fever outbreak in Germany in 2020, China declared a general import ban on pork from Germany that remains in force today. As a result, Germany’s largest meat producer, the Toennies Group, was forced to close its export department at one of its sites in March. Since swine fever has only been found in Eastern Germany, Berlin hopes that China will at least accept pork from other federal states.
US Secretary of State Antony Blinken and his Chinese counterpart Qin Gang did not waste much time in Beijing on Sunday: a quick handshake, some small talk in the corridor of the Diaoyutai guesthouse, and then the serious talks started behind closed doors. The list of issues was long and difficult – from possible espionage activities by China in Cuba to economic and chip sanctions by the US to the Ukraine war and the tense situation around Taiwan. Sunday’s talks between Blinken and Qin lasted a whopping five and a half hours – an hour longer than planned. At just before 8.30 pm, they went on to a joint working dinner.
The good thing: Blinken and Qin are talking to each other. It is the first visit to China by a US Secretary of State in five years. This break was far too long for two states whose relations are considered the most important in the world. The concerning thing: Despite almost 40 degrees Celsius in Beijing, the atmosphere is chilly-expectations: correspondingly low.
The US Secretary of State will stay in Beijing for two days in total. On Monday, he will meet China’s foreign policy czar and State Councillor Wang Yi and possibly President Xi Jinping. Blinken held “frank, substantive and constructive” talks with Chinese Foreign Minister Qin Gang on Sunday, the US State Department subsequently announced. “The secretary stressed the importance of diplomacy and keeping channels of communication open across the range of issues to reduce the risk of misperception and miscalculation.” Blinken invited Qin to Washington to continue the talks. So they want to continue talking.
In addition to the difficult issues, both also addressed the potential for cooperation in fields of mutual interest. Over the weekend, Xi Jinping indicated where these common interests might lie. On Friday, China’s President welcomed Bill Gates, the founder of the software company Microsoft and head of a charity named after him. Xi called Gates “the first American friend” he had met in person this year.
On Sunday, China’s foreign minister said the aim was to build a “stable, predictable and constructive” relationship with the US. At the same time, however, Qin expressed clear concerns to Blinken about China’s core interests, including the Taiwan issue. Taiwan is the most important issue and, at the same time, the biggest risk in China-US relations, Qin said.
According to Chinese media, the two sides agreed on increasing the frequency of civilian flights between China and the US again, allowing more students and business people to travel between the countries.
Constructive tones could already be heard beforehand: “[I] Hope this meeting can help steer China-US relations back to what the two Presidents agreed upon in Bali,” tweeted Hua Chunying of China’s Foreign Ministry.
Nevertheless, concrete expectations for Blinken’s trip are low. It seems clear to all involved that major breakthroughs are not to be expected. The positions are currently too different.
Besides, Blinken is not well-liked in Beijing. The CCP leadership would have preferred a meeting with US Treasury Secretary Janet Yellen or Commerce Secretary Gina Raimondo, as Beijing sees its pressing interests in these areas. Accordingly, it is a matter of establishing open and permanent channels of communication.
It was also to lay the foundation for the big meeting between Joe Biden and Xi Jinping at November’s Apec summit in San Francisco. “I’m hoping that, over the next several months, I’ll be meeting with Xi again and talking about legitimate differences we have but also how there’s areas we can get along,” Biden said on Sunday.
Blinken could also address the military aspect in China, where there have been no high-level contacts for a long time. For example, Beijing’s Defence Minister Li Shangfu recently refused to meet his US counterpart Lloyd Austin on the sidelines of the Asian Security Conference in Singapore. Security experts suspect that the Chinese are deliberately rejecting military dialogue: They claim that this is Beijing’s way of creating insecurity. The USA should not be certain how far China would go and what measures the People’s Republic has at its disposal.
But this “strategic uncertainty” is a dangerous undertaking. Especially in times of strained relations, such communication channels are crucial to prevent unwanted escalation.
There have been multiple potential triggers for this in recent weeks. An “unsafe interaction” occurred between a Chinese warship and a US destroyer in the Taiwan Strait in early June. The collision was only 130 meters away. In May, a Chinese and an American fighter aircraft came dangerously close to each other over the South China Sea.
The Chinese side is aware of this danger. In a recent speech to the National Security Commission, Xi Jinping warned: “We must be prepared for worst-case and extreme scenarios, and be ready to withstand the major test of high winds, choppy waters, and even dangerous storms(坚持底线思维和极限思维,准备经受风高浪急甚至惊涛骇浪的重大考验).”
Jin Canrong, the dean of the School of International Studies at Renmin University, clarified what Xi means by extreme scenarios (极端情况) to the Global Times. Said extreme scenarios, to put it plainly, mean the risk of war.
After the sudden resignation and escape of its former communications director Bob Pickard from China, the Asian Infrastructure Investment Bank (AIIB) has launched an internal investigation. To this end, the bank set up an ad hoc board group with several directors. General Counsel Alberto Ninio will lead the internal management review, AIIB announced.
AIIB also welcomed the official investigation announced by Canadian Deputy Prime Minister and AIIB Governor Chrystia Freeland into what it described as Pickard’s “baseless allegations.” Canadian national Pickard had justified his resignation by citing, among other things, infiltration of the AIIB by the Chinese Communist Party and a toxic work culture.
According to Pickard, membership in the bank did not serve Canada’s interests. Shortly after his resignation, he was advised to flee, he claimed. He then initially flew out to Japan. Canada immediately suspended all activities at AIIB until the end of the investigation.
The multinational AIIB finances infrastructure and other development projects in Asia. More than 100 countries are members of the China-led institution. After China (26.6 percent), India (7.6) and Russia (6.0), Germany holds the most voting rights with just over 4 percent and appoints Ludger Schuknecht as one of the vice presidents. The latter announced full cooperation with the authorities, according to the AIIB release. “Transparency is essential to the trust of our 106 Members, our multilateral peers, our development partners, our community of civil society organizations, and the citizens we serve.”
The AIIB has “nothing to hide,” his colleague, Vice President Danny Alexander – a former British finance minister – told CNN. Alexander is responsible for the bank’s strategy, including the allocation of investments among countries. The bank is likely eager for a quick resolution. On Friday, Bloomberg cited employees as well as international insiders at the institution expressing doubts about Pickard’s allegations. AIIB President Jin Liqun is the only Chinese on the bank’s leadership team; overall, 35 percent of employees are Chinese nationals, according to Bloomberg. ck
The largest US memory chip manufacturer Micron wants to continue its activities in the People’s Republic despite recent restrictions imposed by China. Micron plans to invest around 600 million US dollars in China over the next few years. According to a WeChat announcement, the company will build a new production line in the Chinese city of Xi’an and acquire a larger packaging plant.
The Chinese government had targeted Micron as part of the trade conflict between the United States and China. Several Micron customers are being contacted by the authorities as part of the investigation, according to Bloomberg. And memory chips from Micron have not been allowed to be installed in critical infrastructure in China since mid-May. According to the Cyberspace Administration, a review of the memory chips had revealed alleged security risks. ck/rtr
Microsoft founder and philanthropist Bill Gates was welcomed by President Xi Jinping on Friday. Xi was “very happy” to see Gates, according to the state-run People’s Daily, calling him an “old friend” of China. Gates has done “many good things in his involvement in China’s development work,” Xi said. China would not follow the old path of a “strong country seeking hegemony” but would work with other countries to achieve common development, the People’s Daily said.
“I often say the foundation of US-China relations lies with its people. I place my hopes on the American people,” state broadcaster CCTV quoted him as saying at the same time. The head of state thus indirectly put Gates in opposition to the US government, with which Beijing’s relations are currently very strained.
On his personal blog, Gates wrote that he and Xi had discussed global health and development issues such as health inequality and climate change. State media, in turn, quoted Gates praising China, for example, for “huge progress” in fighting poverty and the Covid pandemic.
Xi extremely rarely meets with foreign entrepreneurs. When Tesla CEO Elon Musk, Apple CEO Tim Cook and JPMorgan Chase boss Jamie Dimon recently traveled to China, they did not get to see the head of state. Musk did, however, meet Foreign Minister Qin Gang as well as two other ministers and a vice premier. Beijing has been courting high-level foreign company officials to return to China after the end of zero-Covid.
The foundation, named after Gates and his ex-wife Melinda announced on Thursday to support the Global Health Drug Discovery Institute GHDDI with 50 million US dollars. The institute, in which the city of Beijing and Tsinghua University, among others, are involved, is committed to the global fight against malaria and tuberculosis – a core concern shared by the Gates Foundation. ck/rtr
The head of a Shanghai private equity firm has apparently been detained in connection with corruption investigations at the Securities and Exchange Commission (CSRC). Officials recently detained Gao Bin, chairman and general manager of Greenwoods Investment, business magazine Caixin reported Saturday. The company subsequently fired Gao and erased the 55-year-old’s name from the company website.
The CP Central Discipline Commission has been investigating several individuals in the CSRC since early May, including former Vice Chairman Zhu Congjiu. Gao’s arrest could be related to this, according to Caixin. After all, Gao had worked at the CSRC and the China Securities Depository and Clearing Corp. for 22 years before joining Greenwoods in 2015.
In addition to the stock market regulator, the authorities are also targeting China’s banking sector. For example, the banking regulator CBIRC is cracking down on bribery among bank managers. In March, the Disciplinary Commission had accused more than two dozen financial authorities, state-owned banks and insurers of not paying enough attention to corruption, capital monitoring and other targets desired by the CP. ck
According to information from the German magazine “Der Spiegel,” German authorities are focusing on a software component from network supplier Huawei in their review of Chinese components in German 5G mobile networks. At issue is a program for the remote maintenance of mobile radio stations, the magazine writes. These stations provide reception to surrounding areas via antennas. 59 percent of the base stations and the associated infrastructure in Germany come from Huawei.
According to Spiegel, all three network operators – Telekom, Telefonica, Vodafone – use Huawei base stations and thus also the control system in question. In March, the Federal Ministry of the Interior sent letters to the three companies at department head level, asking them to declare all Huawei components in use. It is still disputed whether the companies have to remove problematic components from their networks. This is also being discussed in Brussels. EU Internal Market Commissioner Thierry Breton had called on EU member states to exclude risky providers such as Huawei or even ZTE from the rollout of their 5G mobile networks. ck
Taiwan’s democracy is more fragile than it seems, warns Syaru Shirley Lin. This is also why she founded CAPRI, Taiwan’s first international think tank with an Asia-Pacific perspective. Its goal is to develop and promote innovative ideas for governance in the Asia Pacific, including Taiwan’s vibrant democracy.
Thanks to her education, Lin, who was born in Taiwan, is ideally prepared for this mission. Lin studied at Harvard University in the United States and taught at the Chinese University of Hong Kong – and also looks back on successful years on Wall Street. She received considerable attention in 2016 with her book “Taiwan’s China Dilemma.” In it, she describes the dangers of Taiwan’s economic dependence on China. Today, seven years later, she says, “The discussion could not be more appropriate.”
Because China, which sees Taiwan as a breakaway province, is increasing pressure on the island through military maneuvers and cyberwarfare. Taiwan’s China dilemma allows Beijing to exert indirect influence on Taiwan, Lin explains. And she warns that Taiwan’s young democracy is not that resilient to such outside threats. This is evident, for example, in the increasing polarization in Taiwan. A small but vocal minority of Taiwanese call for closer relations with China – even at the expense of democracy, Lin fears.
To become more resilient, governments must provide answers. That means tackling high rents, inequality, and youth unemployment in Taiwan and across the Asia Pacific. Because when governance doesn’t deliver “people want fast and simple answers,” Lin explains. At CAPRI, Lin wants to connect Asia-Pacific countries to learn from each other. What keeps her optimistic is the innovative power of democracies. They can solve problems and anticipate problems of the future, she explains. “Because in democracies, you have the freedom to think and to create.”
A freedom that did not yet exist during Lin’s childhood in Taiwan: Taiwan was still a military dictatorship when she went to school: “For me democratization was something throughout my childhood we longed for,” she recalls. In the meantime, the ideas of freedom rights and democracy have shaped the identity of Taiwanese people – and Lin is proud of this achievement.
She observes that more and more people on the island identify themselves as Taiwanese and less as Chinese. This also means that there is less support for closer economic ties with China. China and Taiwan are still very close culturally, she says, for example when it comes to family or traditions. But when it gets political, Taiwan is different, Lin explains. “Taiwan is very progressive, especially the younger generation believes in democratic governance.”
It is precisely these contradictions that fascinate Lin and motivated her to join academia after nine years at Goldman Sachs. What drives her now is the question: “How can people with completely different ideas about policy and innovation can get along?” As a lecturer and banker in Hong Kong, she experienced how China has violently imposed its system on other people. Like the people in Taiwan, Hong Kongers have separated themselves from a Chinese identity. “But China couldn’t tolerate that” she warns. Jonathan Lehrer
Heike Nack has been EHS Manager for the economic region Europe, Middle East and Africa as well as China at the British metal processor Bodycote since April.
Patricia Klaerner Segismundo became the new Senior IT Project Manager for BD Merge & Acquisition at Bosch in Beijing at the beginning of the month. Her new job starts from a sabbatical period.
Is something changing in your organization? Let us know at heads@table.media!
Diplomacy is in full swing lately. While US Secretary of State Antony Blinken has been catching up on his long-planned visit to China since Sunday, Berlin is preparing for the first German-Chinese government consultations under Chancellor Olaf Scholz. Scholz and Premier Li Qiang will meet as early as today, Monday. The plenary session with the ministers of both countries will follow on Tuesday. Li has only taken office since March; for him, too, these are the first government consultations with Germany.
While these major rounds of talks used to be clearly shaped by the desire for more cooperation, today things are more difficult. The EU and also Germany are struggling to find a balance between partnership and a distanced approach to China. In this situation, the Greens and the Free Democratic Party are more critical of the country than the Chancellor’s party, the Social Democratic Party. And China’s Foreign Minister Qin Gang will not be attending, as Frank Sieren learned.
Officially, China’s foreign minister excuses himself with the almost simultaneous meeting with Blinken – with whom he spoke for more than five hours on Sunday, as Michael Radunski reports. Unofficially, however, Beijing considers Foreign Minister Annalena Baerbock difficult since her visit.
German companies in China, on the other hand, clearly wish for a return to the old spirit of cooperation. Not naively, but nevertheless in search of common interests, as Joern Petring analyzes using a survey by the German Chamber of Commerce in China.
Ahead of the start of the government consultations with China, the German business community is calling for a detailed discussion of the potential for new cooperation at the meeting. “In developing the China strategy in recent years, much effort has been devoted to the question of how we can deal with China as a competitor and also as a system rival. From our point of view, the discussion about China as a cooperation partner came up short,” said Jens Hildebrandt, Executive Director of the German Chamber of Commerce (AHK) in Beijing, commenting on the upcoming consultations with China in Berlin.
On Monday morning, the program kicks off the Sino-German government consultations – for the seventh time since its inception in 2011. The actual talks will be held on Tuesday.
The goal is not to pander but to find common interests. “The question is how we can cooperate wisely with Chinese companies without being naive,” says Hildebrandt. The chances that Germany will get something out of it are looking good now. He called the fact that the very first foreign trip of the new Chinese prime minister to Germany a “clear signal.” “This shows how important Germany is for China.”
Last November, Chancellor Olaf Scholz traveled to China for his inaugural visit – as the first Western head of government after the Party Congress of the Chinese Communist Party, where President Xi Jinping consolidated his power. In his own words, Scholz expects a “very important working meeting.” It is the right time “and also, of course, a world situation in which it makes particular sense to exchange ideas,” he said a few days ago.
Given the tensions with the USA, Beijing is keen to keep relations with Europe “as stable and good as possible,” Hildebrandt also emphasized. Germany is seen as an important anchor. The German government should take advantage of this, the Chamber believes.
Li Qiang will travel to Berlin with nine members of the Chinese government. The itinerary for the visit is as follows:
After the conclusion of the government consultations on Tuesday, Scholz and Economy Minister Robert Habeck will once again meet with Li Qiang, the Chairman of the National Development and Reform Commission (NDRC) Zheng Shanjie and Trade Minister Wang Wentao at the Federal Ministry for Economic Affairs and Climate Action. Business representatives will also be in attendance.
During his Germany tour, Premier Li will also stop by Munich to meet with BMW CEO Oliver Zipse and the CSU Minister President of Bavaria, Markus Soeder.
Companies operating in China have several things on their wish list for cooperation with China. In a recent AHK survey, member companies listed the following areas in which cooperation should be specifically promoted:
Accordingly, the German government is also expected to address the following problems and issues the German business community faces in China:
It is unrealistic to expect the announcement of any significant agreements immediately after the meeting in Berlin. Still, Hildebrandt believes that the first government consultations since the end of the pandemic will send an important signal. “From our point of view, it is about reviving bilateral relations.” Initially, there will be a “cautious feeling out.” But that, too, is an important first step, he added.
Mikko Huotari, Director of the Mercator Institute for China Studies in Berlin, also believes the talks with China are sensible. “It is in Germany’s interest not to let geopolitical tensions with China escalate,” says Huotari.
It is important for Germany to talk to a difficult actor like China regularly, he said. The balancing act of the German government is becoming more difficult. There is uncertainty about the China policy. At the same time, the tensions within the German government coalition are only partially resolved.
And there is also some trench warfare with Brussels regarding the economic security of the relationship with China, 5G networks or trade protection instruments in the automotive sector. But there are also issues where Germany must now step up its game, Huotari said. For example, Scholz’s visit to Beijing held out the prospect of closer cooperation in sustainability and health. “It is time for both sides to finally be more concrete here.”
And Jens Hildebrandt of the German Chamber of Commerce also believes that the Chinese should now be more concrete. A “charm offensive” has been observed for months. However, nothing has changed for the better for German companies in China.
The situation in the run-up to the 7th Sino-German intergovernmental consultations, which will take place next Tuesday, is uncertain. China would like to restore a degree of normality.
For instance, Beijing wanted more than just six ministers to meet. That was the number at the first-ever government consultations between Germany and Japan in March this year. China wants to beat its rival Japan here symbolically – and it has succeeded because Li Qiang is traveling with nine ministers.
In the meantime, the final preparations for the consultations are complicated because the political parties in the German government coalition have different positions on China. While the SPD-led Chancellery is more inclined towards cooperation, the Foreign Ministry focuses more on competition and system rivalry.
However, Chinese Foreign Minister Qin Gang will apparently not be traveling to Berlin, as China.Table has learned from diplomatic circles in Beijing and Berlin. Officially, because his US counterpart Antony Blinken arrived in Beijing on Sunday, but that is not considered the only reason in Beijing. According to diplomats, the tensions between German Foreign Minister Annalena Baerbock and Qin also play a role.
There is also friction elsewhere. Talks on science and research will only be held at the vice-ministerial level because Federal Research Minister Bettina Stark-Watzinger traveled to Taiwan in March. The German government argues this was a technical ministerial visit involving concrete projects. The unwritten rules in Berlin are that only large ministries such as foreign affairs, economics, defense or finance are not permitted to have direct contacts. As a result, Taiwan’s Foreign Minister Joseph Wu, who regularly travels to Europe, will not be received.
Beijing, on the other hand, insists that the government is the government, and such visits would undermine the one-China principle. On the German side, State Secretary Sabine Doering will probably lead the talks.
Thus, one of the key cooperation agreements will not involve the Ministry of Research, but rather the Ministry of Transport, which is also responsible for digital issues: cooperation on autonomous driving. Here, the focus is on ways to continue a memorandum of understanding between China and Germany signed in 2018. Among other things, the aim is to facilitate an exchange of data to allow German car manufacturers to use the data they obtain in China in Germany and vice versa.
The Economy Ministry’s primary concern is to flesh out the so-called “transformation talks.” During his visit to Beijing in November, Chancellor Olaf Scholz agreed on a bilateral climate and transformation dialogue. Economy Minister Robert Habeck wants China to commit to Germany’s climate goals. “As the world’s largest CO2 emitter, it must live up to its responsibility here,” Parliamentary State Secretary and Green Party MP Franziska Brantner told German media. “China is already suffering the consequences of the climate crisis, so faster action is in its own interest.”
But when it comes to Beijing’s own interests, Beijing will decide for itself and not let Berlin dictate the pace and direction. This is where the talks will become difficult. Beijing is also having a hard time with the Climate Club founded by Scholz last year during the German G7 presidency. The rules of the club were laid down from the outset. And according to Beijing’s assessment, these are the rules of the G7 and not jointly developed rules.
Another problematic issue is the issuing of visas. While China now once again allows six-day visa-free entry, the German visa regime is still so strict that not even two top Chinese scholarship holders of the German Academic Exchange Service (DAAD) are currently granted visas, as China.Table learned from academic circles in Beijing.
Compared to France, Spain or even the Netherlands, Germany has by far the strictest visa regulations. As a result, many Chinese who have business in Germany enter the Schengen area via France and other countries. The government consultations are expected to bring progress in this area.
The situation is equally difficult when it comes to pork meat. In May, France already signed a regionalization agreement with China in case of an outbreak of African swine fever. It states that in the event of an outbreak of swine fever in France, not all of France will automatically be banned from exporting pork to China. Germany has not yet managed to sign a comparable agreement with China.
Following a swine fever outbreak in Germany in 2020, China declared a general import ban on pork from Germany that remains in force today. As a result, Germany’s largest meat producer, the Toennies Group, was forced to close its export department at one of its sites in March. Since swine fever has only been found in Eastern Germany, Berlin hopes that China will at least accept pork from other federal states.
US Secretary of State Antony Blinken and his Chinese counterpart Qin Gang did not waste much time in Beijing on Sunday: a quick handshake, some small talk in the corridor of the Diaoyutai guesthouse, and then the serious talks started behind closed doors. The list of issues was long and difficult – from possible espionage activities by China in Cuba to economic and chip sanctions by the US to the Ukraine war and the tense situation around Taiwan. Sunday’s talks between Blinken and Qin lasted a whopping five and a half hours – an hour longer than planned. At just before 8.30 pm, they went on to a joint working dinner.
The good thing: Blinken and Qin are talking to each other. It is the first visit to China by a US Secretary of State in five years. This break was far too long for two states whose relations are considered the most important in the world. The concerning thing: Despite almost 40 degrees Celsius in Beijing, the atmosphere is chilly-expectations: correspondingly low.
The US Secretary of State will stay in Beijing for two days in total. On Monday, he will meet China’s foreign policy czar and State Councillor Wang Yi and possibly President Xi Jinping. Blinken held “frank, substantive and constructive” talks with Chinese Foreign Minister Qin Gang on Sunday, the US State Department subsequently announced. “The secretary stressed the importance of diplomacy and keeping channels of communication open across the range of issues to reduce the risk of misperception and miscalculation.” Blinken invited Qin to Washington to continue the talks. So they want to continue talking.
In addition to the difficult issues, both also addressed the potential for cooperation in fields of mutual interest. Over the weekend, Xi Jinping indicated where these common interests might lie. On Friday, China’s President welcomed Bill Gates, the founder of the software company Microsoft and head of a charity named after him. Xi called Gates “the first American friend” he had met in person this year.
On Sunday, China’s foreign minister said the aim was to build a “stable, predictable and constructive” relationship with the US. At the same time, however, Qin expressed clear concerns to Blinken about China’s core interests, including the Taiwan issue. Taiwan is the most important issue and, at the same time, the biggest risk in China-US relations, Qin said.
According to Chinese media, the two sides agreed on increasing the frequency of civilian flights between China and the US again, allowing more students and business people to travel between the countries.
Constructive tones could already be heard beforehand: “[I] Hope this meeting can help steer China-US relations back to what the two Presidents agreed upon in Bali,” tweeted Hua Chunying of China’s Foreign Ministry.
Nevertheless, concrete expectations for Blinken’s trip are low. It seems clear to all involved that major breakthroughs are not to be expected. The positions are currently too different.
Besides, Blinken is not well-liked in Beijing. The CCP leadership would have preferred a meeting with US Treasury Secretary Janet Yellen or Commerce Secretary Gina Raimondo, as Beijing sees its pressing interests in these areas. Accordingly, it is a matter of establishing open and permanent channels of communication.
It was also to lay the foundation for the big meeting between Joe Biden and Xi Jinping at November’s Apec summit in San Francisco. “I’m hoping that, over the next several months, I’ll be meeting with Xi again and talking about legitimate differences we have but also how there’s areas we can get along,” Biden said on Sunday.
Blinken could also address the military aspect in China, where there have been no high-level contacts for a long time. For example, Beijing’s Defence Minister Li Shangfu recently refused to meet his US counterpart Lloyd Austin on the sidelines of the Asian Security Conference in Singapore. Security experts suspect that the Chinese are deliberately rejecting military dialogue: They claim that this is Beijing’s way of creating insecurity. The USA should not be certain how far China would go and what measures the People’s Republic has at its disposal.
But this “strategic uncertainty” is a dangerous undertaking. Especially in times of strained relations, such communication channels are crucial to prevent unwanted escalation.
There have been multiple potential triggers for this in recent weeks. An “unsafe interaction” occurred between a Chinese warship and a US destroyer in the Taiwan Strait in early June. The collision was only 130 meters away. In May, a Chinese and an American fighter aircraft came dangerously close to each other over the South China Sea.
The Chinese side is aware of this danger. In a recent speech to the National Security Commission, Xi Jinping warned: “We must be prepared for worst-case and extreme scenarios, and be ready to withstand the major test of high winds, choppy waters, and even dangerous storms(坚持底线思维和极限思维,准备经受风高浪急甚至惊涛骇浪的重大考验).”
Jin Canrong, the dean of the School of International Studies at Renmin University, clarified what Xi means by extreme scenarios (极端情况) to the Global Times. Said extreme scenarios, to put it plainly, mean the risk of war.
After the sudden resignation and escape of its former communications director Bob Pickard from China, the Asian Infrastructure Investment Bank (AIIB) has launched an internal investigation. To this end, the bank set up an ad hoc board group with several directors. General Counsel Alberto Ninio will lead the internal management review, AIIB announced.
AIIB also welcomed the official investigation announced by Canadian Deputy Prime Minister and AIIB Governor Chrystia Freeland into what it described as Pickard’s “baseless allegations.” Canadian national Pickard had justified his resignation by citing, among other things, infiltration of the AIIB by the Chinese Communist Party and a toxic work culture.
According to Pickard, membership in the bank did not serve Canada’s interests. Shortly after his resignation, he was advised to flee, he claimed. He then initially flew out to Japan. Canada immediately suspended all activities at AIIB until the end of the investigation.
The multinational AIIB finances infrastructure and other development projects in Asia. More than 100 countries are members of the China-led institution. After China (26.6 percent), India (7.6) and Russia (6.0), Germany holds the most voting rights with just over 4 percent and appoints Ludger Schuknecht as one of the vice presidents. The latter announced full cooperation with the authorities, according to the AIIB release. “Transparency is essential to the trust of our 106 Members, our multilateral peers, our development partners, our community of civil society organizations, and the citizens we serve.”
The AIIB has “nothing to hide,” his colleague, Vice President Danny Alexander – a former British finance minister – told CNN. Alexander is responsible for the bank’s strategy, including the allocation of investments among countries. The bank is likely eager for a quick resolution. On Friday, Bloomberg cited employees as well as international insiders at the institution expressing doubts about Pickard’s allegations. AIIB President Jin Liqun is the only Chinese on the bank’s leadership team; overall, 35 percent of employees are Chinese nationals, according to Bloomberg. ck
The largest US memory chip manufacturer Micron wants to continue its activities in the People’s Republic despite recent restrictions imposed by China. Micron plans to invest around 600 million US dollars in China over the next few years. According to a WeChat announcement, the company will build a new production line in the Chinese city of Xi’an and acquire a larger packaging plant.
The Chinese government had targeted Micron as part of the trade conflict between the United States and China. Several Micron customers are being contacted by the authorities as part of the investigation, according to Bloomberg. And memory chips from Micron have not been allowed to be installed in critical infrastructure in China since mid-May. According to the Cyberspace Administration, a review of the memory chips had revealed alleged security risks. ck/rtr
Microsoft founder and philanthropist Bill Gates was welcomed by President Xi Jinping on Friday. Xi was “very happy” to see Gates, according to the state-run People’s Daily, calling him an “old friend” of China. Gates has done “many good things in his involvement in China’s development work,” Xi said. China would not follow the old path of a “strong country seeking hegemony” but would work with other countries to achieve common development, the People’s Daily said.
“I often say the foundation of US-China relations lies with its people. I place my hopes on the American people,” state broadcaster CCTV quoted him as saying at the same time. The head of state thus indirectly put Gates in opposition to the US government, with which Beijing’s relations are currently very strained.
On his personal blog, Gates wrote that he and Xi had discussed global health and development issues such as health inequality and climate change. State media, in turn, quoted Gates praising China, for example, for “huge progress” in fighting poverty and the Covid pandemic.
Xi extremely rarely meets with foreign entrepreneurs. When Tesla CEO Elon Musk, Apple CEO Tim Cook and JPMorgan Chase boss Jamie Dimon recently traveled to China, they did not get to see the head of state. Musk did, however, meet Foreign Minister Qin Gang as well as two other ministers and a vice premier. Beijing has been courting high-level foreign company officials to return to China after the end of zero-Covid.
The foundation, named after Gates and his ex-wife Melinda announced on Thursday to support the Global Health Drug Discovery Institute GHDDI with 50 million US dollars. The institute, in which the city of Beijing and Tsinghua University, among others, are involved, is committed to the global fight against malaria and tuberculosis – a core concern shared by the Gates Foundation. ck/rtr
The head of a Shanghai private equity firm has apparently been detained in connection with corruption investigations at the Securities and Exchange Commission (CSRC). Officials recently detained Gao Bin, chairman and general manager of Greenwoods Investment, business magazine Caixin reported Saturday. The company subsequently fired Gao and erased the 55-year-old’s name from the company website.
The CP Central Discipline Commission has been investigating several individuals in the CSRC since early May, including former Vice Chairman Zhu Congjiu. Gao’s arrest could be related to this, according to Caixin. After all, Gao had worked at the CSRC and the China Securities Depository and Clearing Corp. for 22 years before joining Greenwoods in 2015.
In addition to the stock market regulator, the authorities are also targeting China’s banking sector. For example, the banking regulator CBIRC is cracking down on bribery among bank managers. In March, the Disciplinary Commission had accused more than two dozen financial authorities, state-owned banks and insurers of not paying enough attention to corruption, capital monitoring and other targets desired by the CP. ck
According to information from the German magazine “Der Spiegel,” German authorities are focusing on a software component from network supplier Huawei in their review of Chinese components in German 5G mobile networks. At issue is a program for the remote maintenance of mobile radio stations, the magazine writes. These stations provide reception to surrounding areas via antennas. 59 percent of the base stations and the associated infrastructure in Germany come from Huawei.
According to Spiegel, all three network operators – Telekom, Telefonica, Vodafone – use Huawei base stations and thus also the control system in question. In March, the Federal Ministry of the Interior sent letters to the three companies at department head level, asking them to declare all Huawei components in use. It is still disputed whether the companies have to remove problematic components from their networks. This is also being discussed in Brussels. EU Internal Market Commissioner Thierry Breton had called on EU member states to exclude risky providers such as Huawei or even ZTE from the rollout of their 5G mobile networks. ck
Taiwan’s democracy is more fragile than it seems, warns Syaru Shirley Lin. This is also why she founded CAPRI, Taiwan’s first international think tank with an Asia-Pacific perspective. Its goal is to develop and promote innovative ideas for governance in the Asia Pacific, including Taiwan’s vibrant democracy.
Thanks to her education, Lin, who was born in Taiwan, is ideally prepared for this mission. Lin studied at Harvard University in the United States and taught at the Chinese University of Hong Kong – and also looks back on successful years on Wall Street. She received considerable attention in 2016 with her book “Taiwan’s China Dilemma.” In it, she describes the dangers of Taiwan’s economic dependence on China. Today, seven years later, she says, “The discussion could not be more appropriate.”
Because China, which sees Taiwan as a breakaway province, is increasing pressure on the island through military maneuvers and cyberwarfare. Taiwan’s China dilemma allows Beijing to exert indirect influence on Taiwan, Lin explains. And she warns that Taiwan’s young democracy is not that resilient to such outside threats. This is evident, for example, in the increasing polarization in Taiwan. A small but vocal minority of Taiwanese call for closer relations with China – even at the expense of democracy, Lin fears.
To become more resilient, governments must provide answers. That means tackling high rents, inequality, and youth unemployment in Taiwan and across the Asia Pacific. Because when governance doesn’t deliver “people want fast and simple answers,” Lin explains. At CAPRI, Lin wants to connect Asia-Pacific countries to learn from each other. What keeps her optimistic is the innovative power of democracies. They can solve problems and anticipate problems of the future, she explains. “Because in democracies, you have the freedom to think and to create.”
A freedom that did not yet exist during Lin’s childhood in Taiwan: Taiwan was still a military dictatorship when she went to school: “For me democratization was something throughout my childhood we longed for,” she recalls. In the meantime, the ideas of freedom rights and democracy have shaped the identity of Taiwanese people – and Lin is proud of this achievement.
She observes that more and more people on the island identify themselves as Taiwanese and less as Chinese. This also means that there is less support for closer economic ties with China. China and Taiwan are still very close culturally, she says, for example when it comes to family or traditions. But when it gets political, Taiwan is different, Lin explains. “Taiwan is very progressive, especially the younger generation believes in democratic governance.”
It is precisely these contradictions that fascinate Lin and motivated her to join academia after nine years at Goldman Sachs. What drives her now is the question: “How can people with completely different ideas about policy and innovation can get along?” As a lecturer and banker in Hong Kong, she experienced how China has violently imposed its system on other people. Like the people in Taiwan, Hong Kongers have separated themselves from a Chinese identity. “But China couldn’t tolerate that” she warns. Jonathan Lehrer
Heike Nack has been EHS Manager for the economic region Europe, Middle East and Africa as well as China at the British metal processor Bodycote since April.
Patricia Klaerner Segismundo became the new Senior IT Project Manager for BD Merge & Acquisition at Bosch in Beijing at the beginning of the month. Her new job starts from a sabbatical period.
Is something changing in your organization? Let us know at heads@table.media!