Table.Briefing: China (English)

Cannabis superpower + Science diplomats

Dear reader,

The countervailing duties on Chinese EVs are coming. This has been clear since Tuesday. Those in Germany who had hoped for a negotiated solution must realize with disillusionment that the EU does not care about the interests of renowned car manufacturers. Instead, it has sent a signal to China by consistently enforcing what it decided weeks ago – despite all warnings, threats and announced countermeasures.

China respects consistency and regularly demonstrates it itself. When the news recently made the rounds that China had deported a VW executive for smoking a joint during a Thailand trip, it probably rang alarm bells for some other Germans too. Statistically, around one in 20 of the thousands of Germans who regularly travel to the People’s Republic has consumed marijuana in the last 30 days.

This is legal in Germany, and in Thailand too. But not in China. As a civil servant, you may be allowed to stumble across the Gui Jie in Beijing drunk as a skunk or be carried if necessary, but a couple of days old marijuana in your blood is illegal. This may seem reasonable or stupid, and a regular cannabis user may not care at all, but it’s nothing new.

Interestingly, hemp cultivation is a lucrative source of income for the Chinese agriculture sector. The People’s Republic is one of the world’s largest exporters. Fabian Peltsch has compiled numerous facts about the history of cannabis and its economic importance for China. He also spoke to a former marijuana dealer and found out how relaxed the stoner scene in individual regions of the country can still be despite strict state prosecution.

Meanwhile, the leaders of Chinese and German science are meeting this week for the first time since the pandemic – first at the 50th anniversary of the cooperation between the Max Planck Society (MPG) and the state-run Chinese Academy of Sciences (CAS) and then at the Science for Future conference in Berlin, jointly organized by Leopoldina and CAS. Tim Gabel investigated whether the de-risking debate was relevant to the conference and the exchange with the CAS. The answer he received was a “clear yes,” as he writes.

Your
Marcel Grzanna
Image of Marcel  Grzanna

Feature

Despite strict drug policy: How China became a cannabis superpower

Police officers in Changchun, Jilin province, publicly burn 10 tons of confiscated drugs, including marijuana, as part of an anti-drug campaign (archive photo).

China deported a high-ranking Volkswagen marketing employee this month. The man is accused of having consumed drugs during a vacation trip to Thailand. When he entered the People’s Republic, he had to undergo a test. Among other things, traces of marijuana were found in his blood, which has been legal in Thailand since June 2022.

Whether it was pure coincidence that the authorities caught a VW employee or a high-ranking executive was to be made an example remains a matter of speculation. However, it is no secret that China also punishes drug use, even if it happens abroad. Embassy websites and Chinese airline flights to Thailand sometimes warn passengers not to consume cannabis intentionally or unknowingly while on vacation.

The psychoactive substance THC and its breakdown products can still be detected in urine and hair months later. The authorities argue that this means that the person is theoretically still under the influence of drugs when they set foot on Chinese soil. The consequences are the same as if they had been caught using drugs in China: Administrative detention of 10 to 15 days, as well as a fine of up to 2,000 yuan (approx. 259 euros).

Intensity of criminal prosecution varies

Anyone carrying even small amounts of cannabis faces charges of smuggling and deportation. According to the South China Morning Post, the authorities have been enforcing these measures even more strictly since legalization in Thailand. Random checks are not only carried out on nationals, but also on foreign students and business travelers.

Despite the strict penalties for possession and sale, cannabis is still in circulation in China – even if it has become far more difficult to obtain, as a former user and dealer from Beijing told Table.Briefings. She wishes to remain anonymous for fear of prosecution. “A good six years ago, the smell of marijuana was more common at music festivals or outside clubs. But since then, the police have cracked down, especially in Shanghai and Beijing.” There have been repeated raids, she says. Today, the only places where marijuana can still be consumed with a degree of carefree enjoyment are in “more relaxed cities,” such as Chengdu in Sichuan and Dali in Yunnan.

Cultivated plant with several thousand years of history

In recent years, some of her foreign friends have also been deported from the country following raids. They are banned from entering China for up to five years. “One of them even shaved off all his body hair before the hair test appointment to avoid deportation,” she says. She herself was also summoned for a test once, but the concentration in her blood was apparently not enough to prosecute her. Nevertheless, the deterrent has worked. She hasn’t used marijuana herself for years and wouldn’t recommend it to anyone in China, especially foreigners who have built up an existence here: “Far too dangerous.”

Yet hemp has a long tradition as a cultivated plant in China. Archaeological evidence of the use of hemp oil and hemp seed as food dates back to around 4,000 BC. Around 2,000 years later, hemp fibers were already being processed into high-quality clothing and bowstrings. 2,500-year-old graves in the Jirzankal cemetery in western China also contain wooden fire bowls in which cannabis plants were burned, which contained an unusually high level of the psychoactive chemical THC. Whether it was burned for medicinal or spiritual purposes remains unclear. However, Chinese and especially Daoist literature contains numerous references to the plant’s medicinal use, such as against menstrual pain or gout. It was even used as an anesthetic to ease pain during surgery.

Green growth market

Paper made from hemp also probably originated in China more than 2,000 years ago. But despite such historical pioneering achievements and the long medical history of hemp, its consumption is demonized today. Since 1985, the People’s Republic has classified marijuana as a dangerous narcotic. Anyone caught with five kilograms or more could theoretically even face the death penalty.

However, the People’s Republic is also one of the largest global players in the cultivation and processing of industrial hemp with no or very low THC content. Around 50 percent of the global industrial hemp supply comes from the Chinese provinces of Yunnan, Heilongjiang and Jilin, where it can be grown exclusively.

According to market researchers at Technavio, the market for industrial hemp could grow by around 13.90 billion US dollars between 2024 and 2028. This growth is driven by rising demand in the textile, food, personal care products and animal feed sectors. Expected annual growth rate: over 25 percent. The Asia-Pacific region, particularly China, plays a pivotal role in this expansion. This is because hemp is more lucrative to grow than flax or rapeseed, for example.

Lots of know-how and patents

China is already the largest producer of edible hemp seeds, with export markets in the USA and Europe, where the seeds are marketed as a superfood. According to the World Intellectual Property Organization, China already owns around 309 of the 606 patents for cannabis-related products, for example, in industrial applications, extraction processes or cosmetics production. China also holds a significant share of the global supply chain for cannabidiol (CBD) oil, currently one of the most popular products derived from the cannabis plant. And this is although the calming but non-intoxicating oil has been banned in China since 2021 – the People’s Republic pursues a similar approach with disposable vapes, whose domestic use is strictly regulated but are approved for large-scale export.

China’s investment in cannabis research, coupled with its extensive hemp cultivation and occasional expansion abroad, for example, by establishing extraction facilities in the USA, indicate a strategic interest in the growing global cannabis markets – Germany could also increasingly become a target market for Chinese companies, depending on the direction in which legalization develops in the country.

  • Medizin
Translation missing.

Science: How Leopoldina treads the fine line in its exchange with China

Ruth Narmann is the head of Leopoldina’s International Relations Department. The science manager has been involved in Sino-German science diplomacy since 2005.

Unlike German ministers, politicians with ministerial rank have a limited travel quota in the People’s Republic of China. This is also the case for Hou Jianguo, President of the Chinese Academy of Sciences (CAS) and member of the Chinese Central Committee. This often results in diplomatic exchanges being limited to a few days, with a packed agenda to be completed during this time.

This week is no exception: For the first time in post-pandemic times, the leaders of Chinese and German science, current and former presidents and heads of scientific organizations are meeting. On Monday, the Max Planck Society (MPG) and CAS celebrated the 50th anniversary of their “Cooperation and Networking” at the Harnack House in Berlin. On Tuesday and this Wednesday, Leopoldina and CAS jointly host the second Science for Future conference in Berlin-Adlershof.

Chinese scientists under general suspicion

The relationship between the two countries is more strained than it has been for a long time. Although the German government’s China strategy explicitly states that it does not want de-coupling, it does emphasize de-risking. Last year, Bettina Stark-Watzinger warned of the risks of research cooperation with pithy words. In interviews, the Research Minister claimed that the Communist Party could be behind every Chinese scientist.

The scientific community criticized Stark-Watzinger’s statements, often perceived as populist and generalized. Renowned science executives such as MPG President Patrick Cramer and DFG President Katja Becker emphasized the importance of relationships and the responsibility and autonomy of the science system in this matter. The tenor was that nothing should stand in the way of joint research in low-risk areas.

In other areas, however, they urge that risks such as espionage, military ties and restrictions on scientific freedom be clearly identified and recognized to avoid acting naively.

Basic research strengthens relationships

On the German side, Ruth Narmann, who heads the International Relations Department at Leopoldina, knows how to tread this fine line at the diplomatic level. At a delegation meeting in 2018, the two former Academy presidents, Bai Chunli and Jörg Hacker, agreed on closer cooperation on basic research, Narmann told Table.Briefings.

“Although basic research is becoming increasingly important in China, it has not been and is not yet perceived as such in public. And at the same time, debates about the relevance of basic research also crop up from time to time in Germany, even though we still have a comfortable situation here compared to other countries,” says the sinologist. This gave rise to the idea of focusing on this in future collaborations. Naturally, the cooperation with the Max Planck Society focuses on this topic.

Promoting the exchange of young talent

She explains that the academic cooperation aimed to utilize a network with renowned researchers on both sides and to host conferences every two years under the title Science for Future: “We see our work with China not only as international scientific cooperation, but also as science diplomacy. The exchange and active participation of young scientists is part of the initiative, which is currently less pronounced in China’s scientific culture than in ours,” explained Narmann.

With this in mind, the first Science for Future conference in Beijing entitled “All Starts with Basic Research” in 2019 was a complete success. Then the Covid pandemic interfered. However, contact was maintained, and a Leopoldina presidential delegation visited China last year. It was there that the decision was made to continue the conference series this year, right at the time when the debate about research cooperation with China was at its peak in Germany.

Signal to the public: ‘We can’t ignore China’

When asked whether the de-risking debate is relevant to the conference and the exchange with the CAS, Ruth Narmann answers with a clear “yes and no.” The “no” part of her answer refers to the fact that the two academies do not conduct joint research. Unlike the CAS, the Leopoldina does not pursue any research of its own. The yes part refers to the significance of socio-political and research policy: “It is also a signal to the public: we need cooperation, we cannot ignore China.”

Of course, the Chinese side is aware of the debate in Germany, says Narmann. “It’s a topic we are repeatedly asked about in our bilateral talks. Just like the German side raises the points we view critically, such as freedom of expression and research or the dual-use issue.” She believes in the principle of talking to each other instead of about each other and proactively shaping relations

Climate research: Joint ‘Berlin Declaration’ ready to be signed

“We often forget that we have many Chinese researchers in Germany, some of whom hold high-ranking positions in the German research system. We should think for a moment about whether we should label all Chinese scientists as spies,” says Narmann. She has been involved in the Sino-German exchange as a science manager since 2005. She explains that China was initially perceived as a developing country, followed by a China euphoria that is now turning into the opposite.

There are topics “where we cannot continue working alone, we need cooperation.” In some areas, research is better than in Germany and the system is more efficient. This is also partly true for energy and climate research, which is also of global relevance. The two academies were therefore able to quickly agree on a topic for the second Science for Future conference: “On the path to carbon neutrality.”

  • China

Sinolytics Radar

AI: How companies navigate the market with legal certainty

Dieser Inhalt ist Lizenznehmern unserer Vollversion vorbehalten.
  • China’s fast-growing AI market provides opportunities for tapping into the dynamic ecosystem and developing localized AI solutions. ​
  • China has adopted a stringent pre-market filing system for AI algorithms and has been developing a comprehensive regulatory framework that spans the entire AI development lifecycle – from internal governance structure to post-market safety monitoring and management. ​
  • This regulatory framework necessitates building a China-specific governance and compliance framework. Companies that plan to develop and provide AI services in China should monitor these regulatory developments and set up corresponding organizational structures for compliance management. ​
  • Companies should also follow how AI regulations translate into industry-specific requirements. For example, autonomous driving scenarios involve inherent public safety risks, requiring companies to conduct ethical reviews of AI development plans. ​
  • AI development is fundamentally reliant on data and must comply with overarching as well as industry-specific data regulations in China. Take in-vehicle AI model development as an example, which may require extensive personal information for training, the Personal Information Protection Law mandates that user consent must be obtained beforehand. Healthcare AI services that collect sensitive patient data or important data such as genetic information are subject to additional regulations. ​
  • By proactively aligning with China’s regulatory standards and integrating robust compliance measures across both general and industry-specific regulations, companies can navigate the AI market successfully.​

Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.

  • Daten

News

EVs: Tariffs are in effect – Commission focuses on negotiated solution

The EU Commission wants to negotiate alternatives with Beijing even after the additional tariffs on Chinese EVs come into force. The Chinese government and the Commission are interested in “finding a solution quickly,” an EU official said on Tuesday. The Commission had previously finalized the tariffs. They will apply for five years.

The authority thus set the final amount of the additional levy: According to the regulation, an additional levy of 17.0 percent is due for electric cars from the manufacturer BYD. Electric vehicles produced by Geely will be subject to an 18.8 percent levy, while the maximum rate is 35.3 percent, for example, for SAIC. US manufacturer Tesla has to pay 7.8 percent.

Tariffs in effect since midnight

German manufacturers, particularly VW’s Cupra, BMW’s Mini and Mercedes’ Smart, are also affected. They have to pay 20.7 percent on vehicles imported from China. Special treatment for European manufacturers is not legally possible, said the EU official.

The Commission Implementing Regulation was published in the Official Journal on Tuesday evening, and the tariffs were entered into force at midnight. At the beginning of the month, a sufficient majority of EU member states voted in favor of the punitive tariffs. Germany had voted against it. Berlin had concerns about the risk of a new trade conflict and possible retaliatory measures against German companies, especially the German automotive industry. Yesterday, VDA President Hildegard Müller called on all sides to “resolutely” seek a WTO-compliant solution in order to abolish the additional tariffs.

It remains unclear when the EU delegation will travel to Beijing for the next round of negotiations. There is no deadline for the talks. The Commission is negotiating with the Chinese side and individual manufacturers, in particular on minimum prices for cars imported from China. The EU side demands specific and verifiable commitments from the manufacturers for each model. The Chinese side rejects this – probably also for fear of setting a precedent for other industries.

Tariff dispute: Awaiting China’s response

It is still uncertain how China will react to the final introduction of the tariffs. Even before the tariffs were passed, the government in Beijing accused the EU of protectionism and had considered additional duties on imported pork and dairy products as possible retaliatory measures. An investigation into brandy imports has already resulted in China taking anti-dumping measures against the EU.

In this context, the Chinese Ministry of Commerce threatened to raise tariffs on imports of large-engined gasoline cars from the EU. Numerous premium vehicles from the Mercedes-Benz, Audi and BMW brands could fall under the new regulation. Although the companies operate plants in China, high-engined saloons or SUVs are mostly imported to the People’s Republic, not manufactured. However, observers doubt that the Chinese leadership will allow the trade conflict with the Europeans to escalate shortly before the US presidential election. If Donald Trump wins there, stable economic relations with Europe will be all the more important.

France has also already announced its intention to contest the import duties on spirits. Paris considers them to be political and unjustified. One diplomat described them as an “unacceptable manipulation of trade rules.” French Trade Minister Sophie Primas will travel to Shanghai next week and will also meet China’s Trade Minister Wang Wentao. The European Commission also announced it would challenge the provisional anti-dumping measures on brandy imports from the EU at the World Trade Organization. fpe/tho

  • Car Industry
  • China
  • Duties
  • E-cars
  • EU
  • Europäische Kommission
  • European policy
  • Geopolitics
  • Trade
  • Trade dispute
  • Trade policy

‘Uncomfortable relationship’: How Finland’s president pokes at China’s wounds

Finnish President Alexander Stubb and China’s party leader Xi Jinping at their meeting in Beijing.


Finland’s President Alexander Stubb has called on China’s head of state Xi Jinping to persuade Russia to end the war in Ukraine. According to a Reuters report, Stubb also discussed North Korean arms exports and troop deployments to Russia during his current visit to Beijing.

He said that relations with North Korea, which will provide Russia with up to 10,000 elite soldiers, are not very pleasant for China at the moment. After his meeting with Xi, Stubb told the press that there was a threat of escalation. Stubb had already reiterated beforehand that he wanted to convince Xi to abandon the idea of a peace agreement without Ukrainian participation.

Finland shares a 1,340 km long border with Russia. Last year, the country joined NATO in response to the Russian invasion of Ukraine. “Right now we are very much in a situation whereby Russian aggression has violated international law,” Stubb said in opening remarks at the start of the meeting. “I look forward to discussing peaceful solutions on that path as well.”

According to Chinese state media, Xi said China welcomes Finland “to actively participate in the Chinese modernization process and expand cooperation in emerging industries.” Finland and China have been in a diplomatic dispute since October 2023 over the possible role of a Hong Kong-registered cargo ship in damaging the Balticconnector gas pipeline. rtr

  • Ukraine-Krieg

Economic stimulus package: China considers increasing stimulus if Trump wins election

China plans to approve a new debt package worth ten trillion yuan (1.3 trillion euros) in the coming week. This was reported by Reuters. According to the report, the budget package will be further increased should Donald Trump win the US elections. The official announcement is scheduled for November 8 by the Standing Committee of the National People’s Congress, which will meet for a five-day session next week.

The package consists of six trillion yuan of new debt to be raised over three years, including 2024 and a further four trillion yuan to be raised through special government bonds and municipal bonds. The total sum equates to around eight percent of the second-largest economy’s economic output, which has suffered from a protracted real estate crisis and weak domestic consumption.

One of the sources said the upcoming meeting of the Standing Committee was originally scheduled for the end of October but was then postponed to early November. The timing of the meeting gives Beijing more flexibility to adjust the fiscal package based on the outcome of the US election. If Trump secures a second presidency, Beijing could announce a stronger fiscal package as his return to the White House is expected to intensify economic headwinds for China, the two sources said. rtr/grz

  • Wachstum

Quarterly figures: Why things are looking up for Adidas in China

According to an announcement by the world’s second-largest sporting goods company on Tuesday, Adidas’ sales in China rose by nine percent to 946 million euros in the third quarter, adjusted for currency effects. The German company had not generated this much revenue in China since the beginning of 2022. After nine months, Adidas also achieved an increase of nine percent. Western fashion and sporting goods brands had fallen behind in China because consumers favored domestic brands more. Under the new CEO Bjørn Gulden, Adidas tried to adapt more to the tastes of Chinese buyers with independent designs.

“The strong underlying growth in China and the earlier-than-expected return to positive figures for the Adidas brand in North America in the last two quarters give us confidence for the medium-term future,” said Gulden on Tuesday. Adidas had already raised its expectations for the current year for the third time in mid-October and now expects an operating profit of 1.2 billion euros – 200 million more than before. Currency-adjusted sales are expected to increase by around ten percent. rtr

  • Adidas

Executive Moves

Frances Hu is the new Customer Solutions Manager at Amazon Web Services (AWS) in Shanghai. The IT division of the US online retailer works with local Chinese partners to provide cloud services. Hu previously worked for the US tech company Dell in China for over 14 years.

Yushan Kuerban is the new Software Engineer at Tesla in Shanghai. The computer scientist with Uyghur roots previously worked primarily for gaming and e-commerce companies, including Hortor Games and Shopee.

Is something changing in your organization? Let us know at heads@table.media!

Dessert

People in China are getting married less and less. To counteract this trend and hopefully boost the birth rate, the Chinese Ministry of Civil Affairs wants to allow marriage registrations in particularly picturesque locations such as parks, beaches or historical sights. The idea: If unforgettable photos can be taken, social media-savvy citizens of marriageable age are likelier to tie the knot than in stuffy registry offices.

China.Table editorial team

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    The countervailing duties on Chinese EVs are coming. This has been clear since Tuesday. Those in Germany who had hoped for a negotiated solution must realize with disillusionment that the EU does not care about the interests of renowned car manufacturers. Instead, it has sent a signal to China by consistently enforcing what it decided weeks ago – despite all warnings, threats and announced countermeasures.

    China respects consistency and regularly demonstrates it itself. When the news recently made the rounds that China had deported a VW executive for smoking a joint during a Thailand trip, it probably rang alarm bells for some other Germans too. Statistically, around one in 20 of the thousands of Germans who regularly travel to the People’s Republic has consumed marijuana in the last 30 days.

    This is legal in Germany, and in Thailand too. But not in China. As a civil servant, you may be allowed to stumble across the Gui Jie in Beijing drunk as a skunk or be carried if necessary, but a couple of days old marijuana in your blood is illegal. This may seem reasonable or stupid, and a regular cannabis user may not care at all, but it’s nothing new.

    Interestingly, hemp cultivation is a lucrative source of income for the Chinese agriculture sector. The People’s Republic is one of the world’s largest exporters. Fabian Peltsch has compiled numerous facts about the history of cannabis and its economic importance for China. He also spoke to a former marijuana dealer and found out how relaxed the stoner scene in individual regions of the country can still be despite strict state prosecution.

    Meanwhile, the leaders of Chinese and German science are meeting this week for the first time since the pandemic – first at the 50th anniversary of the cooperation between the Max Planck Society (MPG) and the state-run Chinese Academy of Sciences (CAS) and then at the Science for Future conference in Berlin, jointly organized by Leopoldina and CAS. Tim Gabel investigated whether the de-risking debate was relevant to the conference and the exchange with the CAS. The answer he received was a “clear yes,” as he writes.

    Your
    Marcel Grzanna
    Image of Marcel  Grzanna

    Feature

    Despite strict drug policy: How China became a cannabis superpower

    Police officers in Changchun, Jilin province, publicly burn 10 tons of confiscated drugs, including marijuana, as part of an anti-drug campaign (archive photo).

    China deported a high-ranking Volkswagen marketing employee this month. The man is accused of having consumed drugs during a vacation trip to Thailand. When he entered the People’s Republic, he had to undergo a test. Among other things, traces of marijuana were found in his blood, which has been legal in Thailand since June 2022.

    Whether it was pure coincidence that the authorities caught a VW employee or a high-ranking executive was to be made an example remains a matter of speculation. However, it is no secret that China also punishes drug use, even if it happens abroad. Embassy websites and Chinese airline flights to Thailand sometimes warn passengers not to consume cannabis intentionally or unknowingly while on vacation.

    The psychoactive substance THC and its breakdown products can still be detected in urine and hair months later. The authorities argue that this means that the person is theoretically still under the influence of drugs when they set foot on Chinese soil. The consequences are the same as if they had been caught using drugs in China: Administrative detention of 10 to 15 days, as well as a fine of up to 2,000 yuan (approx. 259 euros).

    Intensity of criminal prosecution varies

    Anyone carrying even small amounts of cannabis faces charges of smuggling and deportation. According to the South China Morning Post, the authorities have been enforcing these measures even more strictly since legalization in Thailand. Random checks are not only carried out on nationals, but also on foreign students and business travelers.

    Despite the strict penalties for possession and sale, cannabis is still in circulation in China – even if it has become far more difficult to obtain, as a former user and dealer from Beijing told Table.Briefings. She wishes to remain anonymous for fear of prosecution. “A good six years ago, the smell of marijuana was more common at music festivals or outside clubs. But since then, the police have cracked down, especially in Shanghai and Beijing.” There have been repeated raids, she says. Today, the only places where marijuana can still be consumed with a degree of carefree enjoyment are in “more relaxed cities,” such as Chengdu in Sichuan and Dali in Yunnan.

    Cultivated plant with several thousand years of history

    In recent years, some of her foreign friends have also been deported from the country following raids. They are banned from entering China for up to five years. “One of them even shaved off all his body hair before the hair test appointment to avoid deportation,” she says. She herself was also summoned for a test once, but the concentration in her blood was apparently not enough to prosecute her. Nevertheless, the deterrent has worked. She hasn’t used marijuana herself for years and wouldn’t recommend it to anyone in China, especially foreigners who have built up an existence here: “Far too dangerous.”

    Yet hemp has a long tradition as a cultivated plant in China. Archaeological evidence of the use of hemp oil and hemp seed as food dates back to around 4,000 BC. Around 2,000 years later, hemp fibers were already being processed into high-quality clothing and bowstrings. 2,500-year-old graves in the Jirzankal cemetery in western China also contain wooden fire bowls in which cannabis plants were burned, which contained an unusually high level of the psychoactive chemical THC. Whether it was burned for medicinal or spiritual purposes remains unclear. However, Chinese and especially Daoist literature contains numerous references to the plant’s medicinal use, such as against menstrual pain or gout. It was even used as an anesthetic to ease pain during surgery.

    Green growth market

    Paper made from hemp also probably originated in China more than 2,000 years ago. But despite such historical pioneering achievements and the long medical history of hemp, its consumption is demonized today. Since 1985, the People’s Republic has classified marijuana as a dangerous narcotic. Anyone caught with five kilograms or more could theoretically even face the death penalty.

    However, the People’s Republic is also one of the largest global players in the cultivation and processing of industrial hemp with no or very low THC content. Around 50 percent of the global industrial hemp supply comes from the Chinese provinces of Yunnan, Heilongjiang and Jilin, where it can be grown exclusively.

    According to market researchers at Technavio, the market for industrial hemp could grow by around 13.90 billion US dollars between 2024 and 2028. This growth is driven by rising demand in the textile, food, personal care products and animal feed sectors. Expected annual growth rate: over 25 percent. The Asia-Pacific region, particularly China, plays a pivotal role in this expansion. This is because hemp is more lucrative to grow than flax or rapeseed, for example.

    Lots of know-how and patents

    China is already the largest producer of edible hemp seeds, with export markets in the USA and Europe, where the seeds are marketed as a superfood. According to the World Intellectual Property Organization, China already owns around 309 of the 606 patents for cannabis-related products, for example, in industrial applications, extraction processes or cosmetics production. China also holds a significant share of the global supply chain for cannabidiol (CBD) oil, currently one of the most popular products derived from the cannabis plant. And this is although the calming but non-intoxicating oil has been banned in China since 2021 – the People’s Republic pursues a similar approach with disposable vapes, whose domestic use is strictly regulated but are approved for large-scale export.

    China’s investment in cannabis research, coupled with its extensive hemp cultivation and occasional expansion abroad, for example, by establishing extraction facilities in the USA, indicate a strategic interest in the growing global cannabis markets – Germany could also increasingly become a target market for Chinese companies, depending on the direction in which legalization develops in the country.

    • Medizin
    Translation missing.

    Science: How Leopoldina treads the fine line in its exchange with China

    Ruth Narmann is the head of Leopoldina’s International Relations Department. The science manager has been involved in Sino-German science diplomacy since 2005.

    Unlike German ministers, politicians with ministerial rank have a limited travel quota in the People’s Republic of China. This is also the case for Hou Jianguo, President of the Chinese Academy of Sciences (CAS) and member of the Chinese Central Committee. This often results in diplomatic exchanges being limited to a few days, with a packed agenda to be completed during this time.

    This week is no exception: For the first time in post-pandemic times, the leaders of Chinese and German science, current and former presidents and heads of scientific organizations are meeting. On Monday, the Max Planck Society (MPG) and CAS celebrated the 50th anniversary of their “Cooperation and Networking” at the Harnack House in Berlin. On Tuesday and this Wednesday, Leopoldina and CAS jointly host the second Science for Future conference in Berlin-Adlershof.

    Chinese scientists under general suspicion

    The relationship between the two countries is more strained than it has been for a long time. Although the German government’s China strategy explicitly states that it does not want de-coupling, it does emphasize de-risking. Last year, Bettina Stark-Watzinger warned of the risks of research cooperation with pithy words. In interviews, the Research Minister claimed that the Communist Party could be behind every Chinese scientist.

    The scientific community criticized Stark-Watzinger’s statements, often perceived as populist and generalized. Renowned science executives such as MPG President Patrick Cramer and DFG President Katja Becker emphasized the importance of relationships and the responsibility and autonomy of the science system in this matter. The tenor was that nothing should stand in the way of joint research in low-risk areas.

    In other areas, however, they urge that risks such as espionage, military ties and restrictions on scientific freedom be clearly identified and recognized to avoid acting naively.

    Basic research strengthens relationships

    On the German side, Ruth Narmann, who heads the International Relations Department at Leopoldina, knows how to tread this fine line at the diplomatic level. At a delegation meeting in 2018, the two former Academy presidents, Bai Chunli and Jörg Hacker, agreed on closer cooperation on basic research, Narmann told Table.Briefings.

    “Although basic research is becoming increasingly important in China, it has not been and is not yet perceived as such in public. And at the same time, debates about the relevance of basic research also crop up from time to time in Germany, even though we still have a comfortable situation here compared to other countries,” says the sinologist. This gave rise to the idea of focusing on this in future collaborations. Naturally, the cooperation with the Max Planck Society focuses on this topic.

    Promoting the exchange of young talent

    She explains that the academic cooperation aimed to utilize a network with renowned researchers on both sides and to host conferences every two years under the title Science for Future: “We see our work with China not only as international scientific cooperation, but also as science diplomacy. The exchange and active participation of young scientists is part of the initiative, which is currently less pronounced in China’s scientific culture than in ours,” explained Narmann.

    With this in mind, the first Science for Future conference in Beijing entitled “All Starts with Basic Research” in 2019 was a complete success. Then the Covid pandemic interfered. However, contact was maintained, and a Leopoldina presidential delegation visited China last year. It was there that the decision was made to continue the conference series this year, right at the time when the debate about research cooperation with China was at its peak in Germany.

    Signal to the public: ‘We can’t ignore China’

    When asked whether the de-risking debate is relevant to the conference and the exchange with the CAS, Ruth Narmann answers with a clear “yes and no.” The “no” part of her answer refers to the fact that the two academies do not conduct joint research. Unlike the CAS, the Leopoldina does not pursue any research of its own. The yes part refers to the significance of socio-political and research policy: “It is also a signal to the public: we need cooperation, we cannot ignore China.”

    Of course, the Chinese side is aware of the debate in Germany, says Narmann. “It’s a topic we are repeatedly asked about in our bilateral talks. Just like the German side raises the points we view critically, such as freedom of expression and research or the dual-use issue.” She believes in the principle of talking to each other instead of about each other and proactively shaping relations

    Climate research: Joint ‘Berlin Declaration’ ready to be signed

    “We often forget that we have many Chinese researchers in Germany, some of whom hold high-ranking positions in the German research system. We should think for a moment about whether we should label all Chinese scientists as spies,” says Narmann. She has been involved in the Sino-German exchange as a science manager since 2005. She explains that China was initially perceived as a developing country, followed by a China euphoria that is now turning into the opposite.

    There are topics “where we cannot continue working alone, we need cooperation.” In some areas, research is better than in Germany and the system is more efficient. This is also partly true for energy and climate research, which is also of global relevance. The two academies were therefore able to quickly agree on a topic for the second Science for Future conference: “On the path to carbon neutrality.”

    • China

    Sinolytics Radar

    AI: How companies navigate the market with legal certainty

    Dieser Inhalt ist Lizenznehmern unserer Vollversion vorbehalten.
    • China’s fast-growing AI market provides opportunities for tapping into the dynamic ecosystem and developing localized AI solutions. ​
    • China has adopted a stringent pre-market filing system for AI algorithms and has been developing a comprehensive regulatory framework that spans the entire AI development lifecycle – from internal governance structure to post-market safety monitoring and management. ​
    • This regulatory framework necessitates building a China-specific governance and compliance framework. Companies that plan to develop and provide AI services in China should monitor these regulatory developments and set up corresponding organizational structures for compliance management. ​
    • Companies should also follow how AI regulations translate into industry-specific requirements. For example, autonomous driving scenarios involve inherent public safety risks, requiring companies to conduct ethical reviews of AI development plans. ​
    • AI development is fundamentally reliant on data and must comply with overarching as well as industry-specific data regulations in China. Take in-vehicle AI model development as an example, which may require extensive personal information for training, the Personal Information Protection Law mandates that user consent must be obtained beforehand. Healthcare AI services that collect sensitive patient data or important data such as genetic information are subject to additional regulations. ​
    • By proactively aligning with China’s regulatory standards and integrating robust compliance measures across both general and industry-specific regulations, companies can navigate the AI market successfully.​

    Sinolytics is a research-based business consultancy entirely focused on China. It advises European companies on their strategic orientation and specific business activities in the People’s Republic.

    • Daten

    News

    EVs: Tariffs are in effect – Commission focuses on negotiated solution

    The EU Commission wants to negotiate alternatives with Beijing even after the additional tariffs on Chinese EVs come into force. The Chinese government and the Commission are interested in “finding a solution quickly,” an EU official said on Tuesday. The Commission had previously finalized the tariffs. They will apply for five years.

    The authority thus set the final amount of the additional levy: According to the regulation, an additional levy of 17.0 percent is due for electric cars from the manufacturer BYD. Electric vehicles produced by Geely will be subject to an 18.8 percent levy, while the maximum rate is 35.3 percent, for example, for SAIC. US manufacturer Tesla has to pay 7.8 percent.

    Tariffs in effect since midnight

    German manufacturers, particularly VW’s Cupra, BMW’s Mini and Mercedes’ Smart, are also affected. They have to pay 20.7 percent on vehicles imported from China. Special treatment for European manufacturers is not legally possible, said the EU official.

    The Commission Implementing Regulation was published in the Official Journal on Tuesday evening, and the tariffs were entered into force at midnight. At the beginning of the month, a sufficient majority of EU member states voted in favor of the punitive tariffs. Germany had voted against it. Berlin had concerns about the risk of a new trade conflict and possible retaliatory measures against German companies, especially the German automotive industry. Yesterday, VDA President Hildegard Müller called on all sides to “resolutely” seek a WTO-compliant solution in order to abolish the additional tariffs.

    It remains unclear when the EU delegation will travel to Beijing for the next round of negotiations. There is no deadline for the talks. The Commission is negotiating with the Chinese side and individual manufacturers, in particular on minimum prices for cars imported from China. The EU side demands specific and verifiable commitments from the manufacturers for each model. The Chinese side rejects this – probably also for fear of setting a precedent for other industries.

    Tariff dispute: Awaiting China’s response

    It is still uncertain how China will react to the final introduction of the tariffs. Even before the tariffs were passed, the government in Beijing accused the EU of protectionism and had considered additional duties on imported pork and dairy products as possible retaliatory measures. An investigation into brandy imports has already resulted in China taking anti-dumping measures against the EU.

    In this context, the Chinese Ministry of Commerce threatened to raise tariffs on imports of large-engined gasoline cars from the EU. Numerous premium vehicles from the Mercedes-Benz, Audi and BMW brands could fall under the new regulation. Although the companies operate plants in China, high-engined saloons or SUVs are mostly imported to the People’s Republic, not manufactured. However, observers doubt that the Chinese leadership will allow the trade conflict with the Europeans to escalate shortly before the US presidential election. If Donald Trump wins there, stable economic relations with Europe will be all the more important.

    France has also already announced its intention to contest the import duties on spirits. Paris considers them to be political and unjustified. One diplomat described them as an “unacceptable manipulation of trade rules.” French Trade Minister Sophie Primas will travel to Shanghai next week and will also meet China’s Trade Minister Wang Wentao. The European Commission also announced it would challenge the provisional anti-dumping measures on brandy imports from the EU at the World Trade Organization. fpe/tho

    • Car Industry
    • China
    • Duties
    • E-cars
    • EU
    • Europäische Kommission
    • European policy
    • Geopolitics
    • Trade
    • Trade dispute
    • Trade policy

    ‘Uncomfortable relationship’: How Finland’s president pokes at China’s wounds

    Finnish President Alexander Stubb and China’s party leader Xi Jinping at their meeting in Beijing.


    Finland’s President Alexander Stubb has called on China’s head of state Xi Jinping to persuade Russia to end the war in Ukraine. According to a Reuters report, Stubb also discussed North Korean arms exports and troop deployments to Russia during his current visit to Beijing.

    He said that relations with North Korea, which will provide Russia with up to 10,000 elite soldiers, are not very pleasant for China at the moment. After his meeting with Xi, Stubb told the press that there was a threat of escalation. Stubb had already reiterated beforehand that he wanted to convince Xi to abandon the idea of a peace agreement without Ukrainian participation.

    Finland shares a 1,340 km long border with Russia. Last year, the country joined NATO in response to the Russian invasion of Ukraine. “Right now we are very much in a situation whereby Russian aggression has violated international law,” Stubb said in opening remarks at the start of the meeting. “I look forward to discussing peaceful solutions on that path as well.”

    According to Chinese state media, Xi said China welcomes Finland “to actively participate in the Chinese modernization process and expand cooperation in emerging industries.” Finland and China have been in a diplomatic dispute since October 2023 over the possible role of a Hong Kong-registered cargo ship in damaging the Balticconnector gas pipeline. rtr

    • Ukraine-Krieg

    Economic stimulus package: China considers increasing stimulus if Trump wins election

    China plans to approve a new debt package worth ten trillion yuan (1.3 trillion euros) in the coming week. This was reported by Reuters. According to the report, the budget package will be further increased should Donald Trump win the US elections. The official announcement is scheduled for November 8 by the Standing Committee of the National People’s Congress, which will meet for a five-day session next week.

    The package consists of six trillion yuan of new debt to be raised over three years, including 2024 and a further four trillion yuan to be raised through special government bonds and municipal bonds. The total sum equates to around eight percent of the second-largest economy’s economic output, which has suffered from a protracted real estate crisis and weak domestic consumption.

    One of the sources said the upcoming meeting of the Standing Committee was originally scheduled for the end of October but was then postponed to early November. The timing of the meeting gives Beijing more flexibility to adjust the fiscal package based on the outcome of the US election. If Trump secures a second presidency, Beijing could announce a stronger fiscal package as his return to the White House is expected to intensify economic headwinds for China, the two sources said. rtr/grz

    • Wachstum

    Quarterly figures: Why things are looking up for Adidas in China

    According to an announcement by the world’s second-largest sporting goods company on Tuesday, Adidas’ sales in China rose by nine percent to 946 million euros in the third quarter, adjusted for currency effects. The German company had not generated this much revenue in China since the beginning of 2022. After nine months, Adidas also achieved an increase of nine percent. Western fashion and sporting goods brands had fallen behind in China because consumers favored domestic brands more. Under the new CEO Bjørn Gulden, Adidas tried to adapt more to the tastes of Chinese buyers with independent designs.

    “The strong underlying growth in China and the earlier-than-expected return to positive figures for the Adidas brand in North America in the last two quarters give us confidence for the medium-term future,” said Gulden on Tuesday. Adidas had already raised its expectations for the current year for the third time in mid-October and now expects an operating profit of 1.2 billion euros – 200 million more than before. Currency-adjusted sales are expected to increase by around ten percent. rtr

    • Adidas

    Executive Moves

    Frances Hu is the new Customer Solutions Manager at Amazon Web Services (AWS) in Shanghai. The IT division of the US online retailer works with local Chinese partners to provide cloud services. Hu previously worked for the US tech company Dell in China for over 14 years.

    Yushan Kuerban is the new Software Engineer at Tesla in Shanghai. The computer scientist with Uyghur roots previously worked primarily for gaming and e-commerce companies, including Hortor Games and Shopee.

    Is something changing in your organization? Let us know at heads@table.media!

    Dessert

    People in China are getting married less and less. To counteract this trend and hopefully boost the birth rate, the Chinese Ministry of Civil Affairs wants to allow marriage registrations in particularly picturesque locations such as parks, beaches or historical sights. The idea: If unforgettable photos can be taken, social media-savvy citizens of marriageable age are likelier to tie the knot than in stuffy registry offices.

    China.Table editorial team

    CHINA.TABLE EDITORIAL OFFICE

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