Table.Briefing: China

Huawei ban + African raw materials + Medal hunt

Dear reader,

Late Monday evening, reports circulated that the German Federal Ministry of the Interior is planning to exclude Huawei and ZTE from the German 5G network. While other countries have long since decided to take such a step, Berlin has been reviewing the matter for months. The security risks associated with Chinese participation in 5G now appear to be too great, all things considered. Michael Radunski analyzes how far-reaching the consequences of such a decision are – economically and politically. The only remaining solution for the procurement of reliable components now lies in Europe.

In the meantime, the race for African raw materials is in full swing. Europe completely missed the start and is now running behind the Chinese, as our second analysis notes. Now, one might get the idea of condemning Europe’s supply chain law, which will soon require EU companies to meet a higher level of human rights and environmental standards. After all, how are European players supposed to outcompete Chinese competitors when their standards are significantly lower, and thus their costs? The answer is: By doing the right thing out of conviction. We owe that to Africa and ultimately to ourselves in our consumer role.

While China has its eye on Africa for cobalt and nickel, last year’s Olympics focused solely on gold, silver and bronze. To that end, a lot of Chinese money went into coaches and know-how from long-established winter sports nations. Compared to the commodities in Africa, the medal hunt seems to have been less intentional in the long term. China only harbors international ambitions in a handful of winter disciplines one year after the Olympics, writes Christiane Kuehl.

Your
Marcel Grzanna
Image of Marcel  Grzanna

Feature

Minister wants to ban Huawei from German networks

The German Federal Ministry of the Interior (BMI) under Nancy Faeser is apparently planning to significantly restrict the use of Chinese technology in German mobile networks. Certain components of the Chinese manufacturers Huawei and ZTE are no longer to be used in German 5G networks. This was reported on Monday evening by the German newspapers Zeit Online, Spiegel.de and Handelsblatt, citing government circles.

Such a ban would have profound consequences – for the expansion of the mobile phone standard 5G in Germany, for the network operators in Germany, and the Chinese companies. But the relationship between China and Germany would also suffer considerably from such a decision.

German dependence on Huawei

This would directly affect network operators in Germany such as Deutsche Telekom, Telefónica and Vodafone. Since the ban would also include already installed components, they would have to remove the corresponding components of the Chinese manufacturers from their systems. According to reports, the companies would have to bear the costs themselves.

The extent and cost of such an expansion can be seen in the high dependence of the German 5G network on Chinese technology: 59 percent of the components used in the German 5G network are manufactured by Huawei. This makes Germany even more dependent on Chinese technology for these Radio Access Network (RAN) components than it is for the older 4G standard. Huawei’s share in the German 4G network is 57 percent.

This high degree of dependence is surprising. Concerns about possible security vulnerabilities or at least geostrategic entanglements have existed for a long time. A corresponding audit by the Federal Office for Information Security (BSI) and the BMI has been ongoing for months. The concern is clear: Countries like China could gain direct or indirect access to German mobile networks.

Huawei already banned in several countries

The focus is primarily on Huawei, as one of the world’s largest telecommunications equipment suppliers and market leader in 5G technology. Several countries – for example, Australia, Sweden, the United Kingdom, Japan, Canada and the USA – have already excluded the company from Shenzhen from the expansion of their 5G networks. In Germany, the review, which has been ongoing since last autumn, has not yet been officially concluded. But the reports from Monday evening suggest that the result has now been determined.

Norbert Roettgen, foreign policy politician of the Christian Democratic Union party (CDU), told Handelsblatt: “If it is true that the Interior Ministry is now finally starting to ban 5G components from non-trusted providers, then that would be good news. Huawei and other providers subject to the influence of the Chinese government are a security risk to our networks.”

Huawei and ZTE reject accusations

What is noteworthy is that there has so far been no evidence of espionage or sabotage by either Huawei or ZTE. Rather, Huawei consistently emphasizes that it is meeting the highest security standards. Furthermore, the company rejects any direct or indirect influence from “any external organizations or individuals”. Huawei is referring to the Communist Party.

The accusations against ZTE could also not be proven so far. On the contrary: Just a few weeks ago, the German Federal Office for Information Security certified a ZTE 5G component as secure.

China’s companies must cooperate with Beijing

However, the German government already made it clear that the technical assessment is not the only decisive factor for the government’s final decision. Rather, it must also be considered “whether the manufacturing company is either directly or indirectly under state influence”.

And it is precisely this consideration that is the decisive point: Chinese law obliges all domestic companies to cooperate with authorities in the People’s Republic. Should Beijing issue a corresponding directive, companies in China have no way of resisting it – even a company as assertive as Huawei. Huawei’s denial of this fact seems implausible.

New China policy

But such a ban would not only have severe economic consequences. The political situation between China and Germany would also suffer considerably as a result of the decision. While China has recently been stepping up its efforts to get Europe – and above all Germany – on its side in the rivalry with the United States, Berlin is taking an increasingly critical view of the People’s Republic.

Back in December, China.Table already reported on the new China strategy of Economy Minister Robert Habeck. In the 104-page document marked as confidential, the Green minister left no doubt about his new China policy: Existing dependencies must be reduced, especially in the area of critical infrastructure. Chip supply – and the telecommunications industry – were explicitly mentioned.

Should Germany now also decide against the participation of Huawei and ZTE in its 5G network, the only remaining solution would be Europe. Because apart from Huawei, only two other network suppliers are capable of building such large 5G networks: Nokia from Finland and Ericsson from Sweden. Regardless of any possible Chinese espionage capabilities, it is high time to finally take advantage of the huge potential of a united Europe. 5G would be just one of many opportunities.

  • 5G
  • BSI
  • Geopolitics
  • Mobile communications

China wants raw materials instead of transparent supply chains

Bauxite mining in the Democratic Republic of the Congo.

Due to rising energy prices and the green energy transition, Africa is shifting more than ever into focus as an important supplier of raw materials. Cobalt is one example: Around 50 percent of the world’s deposits are found in the Democratic Republic of Congo, which produces more than 70 percent of the raw material globally.

The majority of Congo’s mines are in Chinese hands. As early as 2008, the People’s Republic secured a deal worth six billion US dollars: In return for infrastructure projects, the People’s Republic receives Congolese raw materials. The consequence for the global battery market, which is dependent on access to cobalt, among other things, is that the Chinese market leader CATL managed to expand its share to more than 37 percent, and 6 of the top 10 manufacturers are Chinese companies.

African countries recognize own value

Now, Congo’s President Felix Tshisekedi is renegotiating with Beijing. He wants to amend the contract signed by his predecessor, Joseph Kabila. Instead of six billion, China is now supposed to provide 18 billion US dollars in infrastructure investments: “Now our need is simply to re-balance things in a way that it becomes win-win,” he said at the World Economic Forum in Davos in January. Tshisekedi believes that China got off too cheaply 15 years ago.

Zimbabwe’s President Emmerson Mnangagwa, who also recognized the value of the global commodity boom, has a similar view: “We must begin to apply ourselves towards building industrial processes and structures, which transform those ores […] at home,” he wrote in a recent column. His country, which has been experiencing a permanent crisis for two decades, holds Africa’s largest lithium deposits. Lithium is supposed to revitalize Zimbabwe’s economy. That is the reason why the government banned the export of this valuable metal in late 2022. More value creation in the country is supposed to generate more growth.

Building local industries instead of more exports

Africa owns around 30 percent of the world’s raw material deposits, including many of technological value such as lithium, manganese and cobalt. The desires of nations competing for dominance in key industries of the future are correspondingly great. China has been consistently trying for years to secure access to these raw materials both strategically and for the long term.

But Africa has apparently discovered the potential for its own industrial development and is now competing with Chinese, American or European interests. Africa’s most important mining conference, the Mining Indaba in Cape Town, was held in February under the motto “value creation”, which is also supported by the World Bank. Instead of exporting raw materials, industries are to be built up in Africa that process the metals locally. It remains to be seen whether this will make batteries more expensive or merely shift the focus of value creation.

Sticking point: supply chain law

For Europe, however, there is a particular challenge: the Supply Chain Act. It is expected to be passed by the European Parliament this May. This law will require EU companies to comply with human rights standards and environmental protection guidelines. This will slow down the relocation of value creation. It complicates the “diversification efforts of German industry and in many areas even counteracts a stronger commitment in Africa,” says Wolfgang Niedermark of the BDI Executive Board.

Chinese companies, in any case, do not have to comply with a supply chain law, even though they are increasingly being urged to refrain from exploitation, especially in Africa. And the Africans are increasing the pressure: At the beginning of the year, President Tshisekedi had his government auditors publish a study aimed at proving that the Chinese discriminated against Congo in cobalt mining for years. Last week, a court in the provincial capital Lubumbashi, therefore, revoked the license of mining giant China Molybdenum for six months.

Raw materials not over human rights

The Chinese presence in the Congo has long been criticized. On the one hand, because of the abysmal working conditions in its mines, as the Guardian newspaper documented in 2021. But despite foreign aid, the Congolese government is unable to enforce the required rules. The country is a prime example of poverty, violence and long-lasting wars in which raw materials are used to buy weapons.

But China is not interested in the internal affairs of other countries. Africa’s entrepreneurs are all about doing business. This makes them fierce competitors for African raw materials. However, it is up to Europe to show that sustainable development of African countries, and legal and social standards are just as much in the interest of the people as profits from extracting raw materials. Europe should not only criticize China for the lack of these components, but above all score points by setting good examples. There are plenty of opportunities for this in the competition for raw materials of the future. Andreas Sieren

  • Africa
  • Raw materials
  • Supply Chain Act

The steep path to becoming a top winter sports nation

Ying Qing on her way to World Championship bronze in Sigulda, Latvia.

It is a rare success story for China’s winter athletes. In mid-February, Ying Qing won the first-ever medal for China at a bobsleigh world championship. The former track and field athlete won bronze in the mono bobsleigh at the world championships in Latvia. The medal is a rare legacy of China’s grand efforts in Olympic winter sports.

Ying only became a bobsledder after the discipline, which involves only one person in the bobsled, was included in the program for the 2022 Winter Olympics in Beijing. At the time, China wanted to send one male and one female athlete to compete in each discipline. To this end, it hired dozens of experienced foreign coaches and sent young athletes to train overseas.

One year after the Olympics, China’s winter sports ambitions have become quiet. At the time, the organizers announced that 300 million Chinese had been introduced to winter sports in the run-up to the Olympics. Only the future will show how lasting this encounter has been.

More targeted support in the future

China’s pursuit of top scores in competitive sports has in any case clearly waned. In most disciplines, they play no role – except for speed skating’s short track variant and ski freestyle, in which China’s athletes have been successfully competing for years. But these are rather niche disciplines that are hardly ever shown on television. In the classic disciplines on the ski slopes, in the cross-country and biathlon tracks, in the luge ice track or on the ski jumps, China continues to be a blatant outsider.

China’s current winter sports activities are hardly visible anymore, says Mark Dreyer, sports expert in Beijing and author of the book “Sporting Superpower“. Attention and resources have dwindled. It is not apparent from the outside who is deciding on projects or budgets. “In general, the sport has less traction now and has to compete with all other issues again,” Dreyer told Table.Media.

He expects that China will from now on only support disciplines where a certain chance of success can be achieved through hard work. Investments in alpine skiing, for example, where China will have no actual chance against the established skiing nations for the time being, might not seem very worthwhile. The importance of skiing for the government lies more in recreational sports, says Dreyer: “Because that is consumption.”

Even freestyle ace Eileen Gu out of focus

Even biathlon is getting dragged into the maelstrom of obscurity. Norwegian record world champion Ole Einar Bjoerndalen, who coached the Chinese national team before the Olympics, criticized his former employer: The Chinese skiers “have had miserable conditions this season“, Bjoerndalen told the Swedish daily Expressen in mid-February. He said the Chinese federation had greatly reduced investment in the team. The team did not take part in any world cup races this winter until it made a surprise appearance at the world championships. It was one of the worst-performing teams there.

“Bjoerndalen was not the first and will not be the last who was promised the world and left disappointed,” says Dreyer. Even during the Games, some of the foreign coaches complained that they could not implement their training methods on the ground – despite promises to the contrary. Chinese-American freestyle ace Eileen Gu may have experienced a similar fate. She won medals for China. But her sport receives little attention outside the Olympics.

China’s women better than at the Olympics

At least in numbers, China’s women ski jumpers are better represented: At the Nordic World Ski Championships last week in Slovenia, China competed with four women. At the Olympics, there were only two women, all of whom dropped out immediately. In team jumping – which requires four women, something that already excludes many countries – China managed for the first time last week to reach the second round out of only eight teams – where it then came in eighth.

It is fortunate that China has not buried ski jumping after the Olympics, said co-commentator Toni Innauer during the competition on the German broadcaster ZDF. “They are even in a slightly better position than at the Olympics,” said the former Austrian ski jumping star – referring to the team of foreign coaches of the Chinese women. The best Chinese woman, Liu Qi, finished 22nd in the individual event from the large hill. The advantage: women’s ski jumping is relatively new, and the competition is not yet fully established. China’s two men registered for the World Championships already failed to qualify for the individual event.

The arduous path to becoming a winter sports nation

This is hardly surprising because even with the greatest of ambition, it is impossible to train former gymnasts and track and field athletes to reach top performance in winter sports in just a few years. But where there is a will in China, there is usually also a budget.

Dreyer mentioned the modern facilities, such as the Olympic bobsleigh and luge track or the large ski jumping venue. “For ski jumpers, China has one of the few wind tunnels in the world.” Perhaps the facilities helped China to get closer to the international level, especially in bobsleighing and ski jumping. “2022 was one Olympic cycle too early,” Dreyer says. “If they stick to their plans, then they definitely have a chance to make progress in the next Olympic Games in 2026 or 2030.”

  • Eileen Gu
  • Winter Olympics

News

EV ambitions at risk

Electric cars on the Bund in Shanghai: China’s government is massively subsidizing the EV market.

A recent study in the journal Nature shows that China’s big plans for electric vehicles (EVs) are in jeopardy. The reason is the currently rising prices for “critical materials” such as lithium, cobalt or nickel. The authors warn that this could not only jeopardize China’s EV ambitions, but also the government’s lofty climate targets.

In their study, the authors show how rising prices for lithium, cobalt, nickel and manganese would affect the acceptance of electric vehicles in China. The result: The current cost surge could cause the share of EVs on China’s roads to drop from 49 percent to 35 percent as early as 2030. By 2060, it is projected to drop from 67 percent to 51 percent.

China is massively promoting the construction of electric vehicles, pursuing two main goals:

  • On the one hand, they want to outpace established foreign car companies with their combustion engines.
  • On the other hand, EVs are supposed to help achieve the government’s ambitious climate targets.

Accordingly, the rising prices for “critical materials” also put Beijing’s climate targets at risk. As a result, China’s emissions from road transport could rise by 28 percent between 2020 and 2060. rad

  • Autoindustrie

Apple competitor to build own EVs in 2024

Chinese smartphone producer Xiaomi has announced the start of its mass production of EVs. Company head Lei Jun named the first half of 2024 as the target date at the National People’s Congress (NPC) in Beijing. Lei is part of the Chinese parliament as a delegate.

Xiaomi has invested more than three billion yuan (nearly 400 million euros) in the development of its own electric division. “Xiaomi’s car manufacturing has progressed beyond expectation and has recently successfully completed winter testing,” Lei told other delegates.

The company’s electric division employs around 2,300 people. Lei himself is equally responsible for the development of EVs as well as the company’s telecommunications business. Xiaomi is one of the world’s largest smartphone manufacturers. grz

  • Electromobility

IW: China needs Western technologies

The political West has considerable threat potential vis-à-vis China. This is the conclusion of the German Economic Institute (IW) following an evaluation of the Chinese import structure. The study provides a detailed breakdown of industrial imports into the People’s Republic according to their respective countries of origin. Of the 20 most important imported goods in terms of value, an average of 52 percent come from Western countries.

“If, in the extreme case, there were no more imports from China in the event of a conflict over Taiwan, it would be disastrous for many companies – because dependence has recently reached record levels,” the authors write. But the study shows that China is also “dependent on Western imports” – that is, on imports from Europe, Canada, the United States, but also Japan, South Korea, Australia and New Zealand.

China is particularly dependent on Western technology products. The country imported semiconductors worth 433 billion US dollars in 2021, 32 percent of which came from the West. If computer chips from Taiwan are included, this share rises to 68 percent. The study also found that China is heavily dependent in other sectors as well. These include aerospace technology, automobiles and pharmaceuticals. Some raw materials and foodstuffs are also difficult to replace.

“In the event of conflict, the West could use these dependencies to put pressure on the Chinese economy through sanctions,” it says. Therefore, the Chinese government would strive to locate technology and expertise in its own country. grz

Port cargo cranes suspected of espionage

A special freighter with cranes from the Chinese company Shanghai Zhenhua Heavy Industries Company Limited (ZPMC) in operation in Wilhelmshaven, Germany.

Port cargo cranes manufactured by the Chinese company ZPMC have come under espionage suspicion in the United States. Security officials suspect that the sensor technology used on the cranes can be used to register and track the origin and destinations of containers. This would theoretically make it possible to track when and where military equipment is shipped from the USA to other parts of the world.

National security officials and the Pentagon have compared the cranes to Trojan horses, calling the manufacturer ZPMC the new Huawei, according to the Wall Street Journal. Like the Chinese mobile phone manufacturer’s technology, the cranes are said to be a perfect combination to link legitimate business interests with covert collection of security-related information. A spokesman for the Chinese Embassy in Washington called the allegations paranoia.

ZPMC cranes are, for example, also used in German ports to handle container shipments, such as Hamburg. ZPMC Germany GmbH is a wholly-owned subsidiary of Shanghai Zhenhua Heavy Industries Co. Ltd. grz

Opinion

Mediating, not interfering

Nora Sausmikat, Leiterin China Desk der Umwelt- und Menschenrechtsorganisation Urgewald e.V.
Sinologist Nora Sausmikat heads the China desk at urgewald.

On Feb. 24, the anniversary of Russia’s invasion of Ukraine, the PRC Foreign Ministry released a twelve-point paper on China’s position in this war of aggression. Shortly after the invasion started, there was international hope that China could decisively use its influence with Russia to mediate and bring peace.

After all, China is considered Russia’s most important ally. The war of aggression against Ukraine is also a symbol of an open struggle between political systems. Shortly after the Russian attack, Ukraine’s ambassador to Japan asked China to intervene. So the world has been awaiting China’s peace initiative for twelve months – and now this twelve-point paper has been published.

Symbol for the international stage

What it is not? It is not a clear position of official China on the war of aggression. It is neither an unambiguous pro-Russian statement nor a strong signal toward Russia to stop its war.

What it is? It is a diplomatic symbol for the international stage, which interprets the ingredients of international diplomacy according to Chinese understanding and fills them with new meaning for the war situation.

Principle of non-interference

China has long defended the concept of state sovereignty, that is, the right of sovereign states to be free from foreign interference. This would be the “guarantor of peace, security and prosperity”. However, this notion of “state sovereignty” goes far beyond the corresponding prohibitions on the unauthorized use of force and the arming or financing of rebel movements enshrined in the UN Charter.

For China, this principle of international law is tantamount to “non-interference”. Because China routinely labels even mere remarks about its domestic policies – not to mention criticism of its human rights track record – as an unacceptable form of “interference” in its state sovereignty. This is the stance China seeks to establish on the global diplomatic stage.

This is highly dangerous, particularly when it comes to crimes against humanity and other offenses under international law – as currently committed by Russia in Ukraine. A unified international response to atrocities committed by Russia in Ukraine, which is clearly the case under international law, has thus also been prevented for the past year by Chinese pro-Russian positions.

China rejects universal understanding of human rights

From the Chinese point of view, the twelve-point paper is a logical consequence of the massive reshaping of universal ground rules to suit national interests that has been going on for the past ten years. Take human rights, for example: The emphasis on state sovereignty, non-interference in internal affairs, and the right to economic development as a human right above all other rights threatens to weaken the entire international human rights system as well as norms on transparency and accountability. China rejects the idea of universal human rights that go beyond national sovereignty and concern the international community as a whole.

In the twelve-point paper, China emphasizes the importance of territorial sovereignty for all countries. A small difference from state sovereignty with big consequences. This could entail recognizing Russian-annexed territories as Russian. Ultimately, this can also mean creating conditions that entail changing Taiwan’s status. But it may also mean – and this is rather unlikely – that China ends up condemning the invasion of a sovereign country like Ukraine.

What the twelve-point paper also is: An offer by China to act as a mediator, a call for dialogue and compromise – under the premises of a reinterpreted international law. China advocates a cease-fire and the resumption of peace talks.

Beijing’s interests

The twelve points also reflect China’s pragmatic interests: supply chains should once again operate reliably, the Eurasian continent must be kept stable for this purpose, and the United Nations Security Council should cease sanctions against Russia. Dialogue and negotiations are the only solution, not sanctions, it says. It is important to remember that Ukraine is an important transit country for the Silk Road and a key military and grain supplier to China. Point 9 of the twelve-point plan specifically mentions the Black Sea Grain Initiative, which should be continued.

Now, one year after the start of the war, supply chains, financial flows and energy transport routes between Russia and China have been consolidated. In the global competition for spheres of influence to secure (energy) raw materials, loyalty pledges are becoming increasingly important in the systemic rivalry. China now once again signaled that it stands ready for rebuilding. Xi Jinping gives Ukraine hope.

Reshaping the international order

And Ukraine is acting accordingly: At last fall’s 51st session of the UN Human Rights Council, it abstained from voting on the draft resolution, which envisaged a debate on the situation in Xinjiang at the next session in March. In the end, the result of the vote was very close, with 17 votes in favor, 19 against and 11 abstentions.

This twelve-point plan is supposed to stem the global saber-rattling through goodwill. Foreign Minister Qin Gang warned against further arms deliveries. Beijing’s global security strategy was published alongside the twelve-point plan. It is intended to establish an alternative system to NATO. Both papers are building blocks for reshaping the international order.

Nora Sausmikat holds a habilitation in sinology and heads the China desk at urgewald, the campaign work on the Asian Infrastructure Investment Bank as well as the Asian Development Bank. Aside from her focus on the two banks, she analyzes China’s global role, particularly in the areas of climate and human rights policy. This text was first published in the German newspaper taz on March 3, 2023.

  • Europe
  • Ukraine War
  • United Nations

Executive Moves

Chris Cash, Director of the China Research Group, has been appointed an Associate Fellow of the UK Council on Geostrategy.

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

Dessert

Protesters in Taiwan’s capital Taipei: On the 64th anniversary of the 1959 Tibet Uprising, Tibetan and Taiwanese protesters drove attention to China’s oppressive policies in Tibet.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    Late Monday evening, reports circulated that the German Federal Ministry of the Interior is planning to exclude Huawei and ZTE from the German 5G network. While other countries have long since decided to take such a step, Berlin has been reviewing the matter for months. The security risks associated with Chinese participation in 5G now appear to be too great, all things considered. Michael Radunski analyzes how far-reaching the consequences of such a decision are – economically and politically. The only remaining solution for the procurement of reliable components now lies in Europe.

    In the meantime, the race for African raw materials is in full swing. Europe completely missed the start and is now running behind the Chinese, as our second analysis notes. Now, one might get the idea of condemning Europe’s supply chain law, which will soon require EU companies to meet a higher level of human rights and environmental standards. After all, how are European players supposed to outcompete Chinese competitors when their standards are significantly lower, and thus their costs? The answer is: By doing the right thing out of conviction. We owe that to Africa and ultimately to ourselves in our consumer role.

    While China has its eye on Africa for cobalt and nickel, last year’s Olympics focused solely on gold, silver and bronze. To that end, a lot of Chinese money went into coaches and know-how from long-established winter sports nations. Compared to the commodities in Africa, the medal hunt seems to have been less intentional in the long term. China only harbors international ambitions in a handful of winter disciplines one year after the Olympics, writes Christiane Kuehl.

    Your
    Marcel Grzanna
    Image of Marcel  Grzanna

    Feature

    Minister wants to ban Huawei from German networks

    The German Federal Ministry of the Interior (BMI) under Nancy Faeser is apparently planning to significantly restrict the use of Chinese technology in German mobile networks. Certain components of the Chinese manufacturers Huawei and ZTE are no longer to be used in German 5G networks. This was reported on Monday evening by the German newspapers Zeit Online, Spiegel.de and Handelsblatt, citing government circles.

    Such a ban would have profound consequences – for the expansion of the mobile phone standard 5G in Germany, for the network operators in Germany, and the Chinese companies. But the relationship between China and Germany would also suffer considerably from such a decision.

    German dependence on Huawei

    This would directly affect network operators in Germany such as Deutsche Telekom, Telefónica and Vodafone. Since the ban would also include already installed components, they would have to remove the corresponding components of the Chinese manufacturers from their systems. According to reports, the companies would have to bear the costs themselves.

    The extent and cost of such an expansion can be seen in the high dependence of the German 5G network on Chinese technology: 59 percent of the components used in the German 5G network are manufactured by Huawei. This makes Germany even more dependent on Chinese technology for these Radio Access Network (RAN) components than it is for the older 4G standard. Huawei’s share in the German 4G network is 57 percent.

    This high degree of dependence is surprising. Concerns about possible security vulnerabilities or at least geostrategic entanglements have existed for a long time. A corresponding audit by the Federal Office for Information Security (BSI) and the BMI has been ongoing for months. The concern is clear: Countries like China could gain direct or indirect access to German mobile networks.

    Huawei already banned in several countries

    The focus is primarily on Huawei, as one of the world’s largest telecommunications equipment suppliers and market leader in 5G technology. Several countries – for example, Australia, Sweden, the United Kingdom, Japan, Canada and the USA – have already excluded the company from Shenzhen from the expansion of their 5G networks. In Germany, the review, which has been ongoing since last autumn, has not yet been officially concluded. But the reports from Monday evening suggest that the result has now been determined.

    Norbert Roettgen, foreign policy politician of the Christian Democratic Union party (CDU), told Handelsblatt: “If it is true that the Interior Ministry is now finally starting to ban 5G components from non-trusted providers, then that would be good news. Huawei and other providers subject to the influence of the Chinese government are a security risk to our networks.”

    Huawei and ZTE reject accusations

    What is noteworthy is that there has so far been no evidence of espionage or sabotage by either Huawei or ZTE. Rather, Huawei consistently emphasizes that it is meeting the highest security standards. Furthermore, the company rejects any direct or indirect influence from “any external organizations or individuals”. Huawei is referring to the Communist Party.

    The accusations against ZTE could also not be proven so far. On the contrary: Just a few weeks ago, the German Federal Office for Information Security certified a ZTE 5G component as secure.

    China’s companies must cooperate with Beijing

    However, the German government already made it clear that the technical assessment is not the only decisive factor for the government’s final decision. Rather, it must also be considered “whether the manufacturing company is either directly or indirectly under state influence”.

    And it is precisely this consideration that is the decisive point: Chinese law obliges all domestic companies to cooperate with authorities in the People’s Republic. Should Beijing issue a corresponding directive, companies in China have no way of resisting it – even a company as assertive as Huawei. Huawei’s denial of this fact seems implausible.

    New China policy

    But such a ban would not only have severe economic consequences. The political situation between China and Germany would also suffer considerably as a result of the decision. While China has recently been stepping up its efforts to get Europe – and above all Germany – on its side in the rivalry with the United States, Berlin is taking an increasingly critical view of the People’s Republic.

    Back in December, China.Table already reported on the new China strategy of Economy Minister Robert Habeck. In the 104-page document marked as confidential, the Green minister left no doubt about his new China policy: Existing dependencies must be reduced, especially in the area of critical infrastructure. Chip supply – and the telecommunications industry – were explicitly mentioned.

    Should Germany now also decide against the participation of Huawei and ZTE in its 5G network, the only remaining solution would be Europe. Because apart from Huawei, only two other network suppliers are capable of building such large 5G networks: Nokia from Finland and Ericsson from Sweden. Regardless of any possible Chinese espionage capabilities, it is high time to finally take advantage of the huge potential of a united Europe. 5G would be just one of many opportunities.

    • 5G
    • BSI
    • Geopolitics
    • Mobile communications

    China wants raw materials instead of transparent supply chains

    Bauxite mining in the Democratic Republic of the Congo.

    Due to rising energy prices and the green energy transition, Africa is shifting more than ever into focus as an important supplier of raw materials. Cobalt is one example: Around 50 percent of the world’s deposits are found in the Democratic Republic of Congo, which produces more than 70 percent of the raw material globally.

    The majority of Congo’s mines are in Chinese hands. As early as 2008, the People’s Republic secured a deal worth six billion US dollars: In return for infrastructure projects, the People’s Republic receives Congolese raw materials. The consequence for the global battery market, which is dependent on access to cobalt, among other things, is that the Chinese market leader CATL managed to expand its share to more than 37 percent, and 6 of the top 10 manufacturers are Chinese companies.

    African countries recognize own value

    Now, Congo’s President Felix Tshisekedi is renegotiating with Beijing. He wants to amend the contract signed by his predecessor, Joseph Kabila. Instead of six billion, China is now supposed to provide 18 billion US dollars in infrastructure investments: “Now our need is simply to re-balance things in a way that it becomes win-win,” he said at the World Economic Forum in Davos in January. Tshisekedi believes that China got off too cheaply 15 years ago.

    Zimbabwe’s President Emmerson Mnangagwa, who also recognized the value of the global commodity boom, has a similar view: “We must begin to apply ourselves towards building industrial processes and structures, which transform those ores […] at home,” he wrote in a recent column. His country, which has been experiencing a permanent crisis for two decades, holds Africa’s largest lithium deposits. Lithium is supposed to revitalize Zimbabwe’s economy. That is the reason why the government banned the export of this valuable metal in late 2022. More value creation in the country is supposed to generate more growth.

    Building local industries instead of more exports

    Africa owns around 30 percent of the world’s raw material deposits, including many of technological value such as lithium, manganese and cobalt. The desires of nations competing for dominance in key industries of the future are correspondingly great. China has been consistently trying for years to secure access to these raw materials both strategically and for the long term.

    But Africa has apparently discovered the potential for its own industrial development and is now competing with Chinese, American or European interests. Africa’s most important mining conference, the Mining Indaba in Cape Town, was held in February under the motto “value creation”, which is also supported by the World Bank. Instead of exporting raw materials, industries are to be built up in Africa that process the metals locally. It remains to be seen whether this will make batteries more expensive or merely shift the focus of value creation.

    Sticking point: supply chain law

    For Europe, however, there is a particular challenge: the Supply Chain Act. It is expected to be passed by the European Parliament this May. This law will require EU companies to comply with human rights standards and environmental protection guidelines. This will slow down the relocation of value creation. It complicates the “diversification efforts of German industry and in many areas even counteracts a stronger commitment in Africa,” says Wolfgang Niedermark of the BDI Executive Board.

    Chinese companies, in any case, do not have to comply with a supply chain law, even though they are increasingly being urged to refrain from exploitation, especially in Africa. And the Africans are increasing the pressure: At the beginning of the year, President Tshisekedi had his government auditors publish a study aimed at proving that the Chinese discriminated against Congo in cobalt mining for years. Last week, a court in the provincial capital Lubumbashi, therefore, revoked the license of mining giant China Molybdenum for six months.

    Raw materials not over human rights

    The Chinese presence in the Congo has long been criticized. On the one hand, because of the abysmal working conditions in its mines, as the Guardian newspaper documented in 2021. But despite foreign aid, the Congolese government is unable to enforce the required rules. The country is a prime example of poverty, violence and long-lasting wars in which raw materials are used to buy weapons.

    But China is not interested in the internal affairs of other countries. Africa’s entrepreneurs are all about doing business. This makes them fierce competitors for African raw materials. However, it is up to Europe to show that sustainable development of African countries, and legal and social standards are just as much in the interest of the people as profits from extracting raw materials. Europe should not only criticize China for the lack of these components, but above all score points by setting good examples. There are plenty of opportunities for this in the competition for raw materials of the future. Andreas Sieren

    • Africa
    • Raw materials
    • Supply Chain Act

    The steep path to becoming a top winter sports nation

    Ying Qing on her way to World Championship bronze in Sigulda, Latvia.

    It is a rare success story for China’s winter athletes. In mid-February, Ying Qing won the first-ever medal for China at a bobsleigh world championship. The former track and field athlete won bronze in the mono bobsleigh at the world championships in Latvia. The medal is a rare legacy of China’s grand efforts in Olympic winter sports.

    Ying only became a bobsledder after the discipline, which involves only one person in the bobsled, was included in the program for the 2022 Winter Olympics in Beijing. At the time, China wanted to send one male and one female athlete to compete in each discipline. To this end, it hired dozens of experienced foreign coaches and sent young athletes to train overseas.

    One year after the Olympics, China’s winter sports ambitions have become quiet. At the time, the organizers announced that 300 million Chinese had been introduced to winter sports in the run-up to the Olympics. Only the future will show how lasting this encounter has been.

    More targeted support in the future

    China’s pursuit of top scores in competitive sports has in any case clearly waned. In most disciplines, they play no role – except for speed skating’s short track variant and ski freestyle, in which China’s athletes have been successfully competing for years. But these are rather niche disciplines that are hardly ever shown on television. In the classic disciplines on the ski slopes, in the cross-country and biathlon tracks, in the luge ice track or on the ski jumps, China continues to be a blatant outsider.

    China’s current winter sports activities are hardly visible anymore, says Mark Dreyer, sports expert in Beijing and author of the book “Sporting Superpower“. Attention and resources have dwindled. It is not apparent from the outside who is deciding on projects or budgets. “In general, the sport has less traction now and has to compete with all other issues again,” Dreyer told Table.Media.

    He expects that China will from now on only support disciplines where a certain chance of success can be achieved through hard work. Investments in alpine skiing, for example, where China will have no actual chance against the established skiing nations for the time being, might not seem very worthwhile. The importance of skiing for the government lies more in recreational sports, says Dreyer: “Because that is consumption.”

    Even freestyle ace Eileen Gu out of focus

    Even biathlon is getting dragged into the maelstrom of obscurity. Norwegian record world champion Ole Einar Bjoerndalen, who coached the Chinese national team before the Olympics, criticized his former employer: The Chinese skiers “have had miserable conditions this season“, Bjoerndalen told the Swedish daily Expressen in mid-February. He said the Chinese federation had greatly reduced investment in the team. The team did not take part in any world cup races this winter until it made a surprise appearance at the world championships. It was one of the worst-performing teams there.

    “Bjoerndalen was not the first and will not be the last who was promised the world and left disappointed,” says Dreyer. Even during the Games, some of the foreign coaches complained that they could not implement their training methods on the ground – despite promises to the contrary. Chinese-American freestyle ace Eileen Gu may have experienced a similar fate. She won medals for China. But her sport receives little attention outside the Olympics.

    China’s women better than at the Olympics

    At least in numbers, China’s women ski jumpers are better represented: At the Nordic World Ski Championships last week in Slovenia, China competed with four women. At the Olympics, there were only two women, all of whom dropped out immediately. In team jumping – which requires four women, something that already excludes many countries – China managed for the first time last week to reach the second round out of only eight teams – where it then came in eighth.

    It is fortunate that China has not buried ski jumping after the Olympics, said co-commentator Toni Innauer during the competition on the German broadcaster ZDF. “They are even in a slightly better position than at the Olympics,” said the former Austrian ski jumping star – referring to the team of foreign coaches of the Chinese women. The best Chinese woman, Liu Qi, finished 22nd in the individual event from the large hill. The advantage: women’s ski jumping is relatively new, and the competition is not yet fully established. China’s two men registered for the World Championships already failed to qualify for the individual event.

    The arduous path to becoming a winter sports nation

    This is hardly surprising because even with the greatest of ambition, it is impossible to train former gymnasts and track and field athletes to reach top performance in winter sports in just a few years. But where there is a will in China, there is usually also a budget.

    Dreyer mentioned the modern facilities, such as the Olympic bobsleigh and luge track or the large ski jumping venue. “For ski jumpers, China has one of the few wind tunnels in the world.” Perhaps the facilities helped China to get closer to the international level, especially in bobsleighing and ski jumping. “2022 was one Olympic cycle too early,” Dreyer says. “If they stick to their plans, then they definitely have a chance to make progress in the next Olympic Games in 2026 or 2030.”

    • Eileen Gu
    • Winter Olympics

    News

    EV ambitions at risk

    Electric cars on the Bund in Shanghai: China’s government is massively subsidizing the EV market.

    A recent study in the journal Nature shows that China’s big plans for electric vehicles (EVs) are in jeopardy. The reason is the currently rising prices for “critical materials” such as lithium, cobalt or nickel. The authors warn that this could not only jeopardize China’s EV ambitions, but also the government’s lofty climate targets.

    In their study, the authors show how rising prices for lithium, cobalt, nickel and manganese would affect the acceptance of electric vehicles in China. The result: The current cost surge could cause the share of EVs on China’s roads to drop from 49 percent to 35 percent as early as 2030. By 2060, it is projected to drop from 67 percent to 51 percent.

    China is massively promoting the construction of electric vehicles, pursuing two main goals:

    • On the one hand, they want to outpace established foreign car companies with their combustion engines.
    • On the other hand, EVs are supposed to help achieve the government’s ambitious climate targets.

    Accordingly, the rising prices for “critical materials” also put Beijing’s climate targets at risk. As a result, China’s emissions from road transport could rise by 28 percent between 2020 and 2060. rad

    • Autoindustrie

    Apple competitor to build own EVs in 2024

    Chinese smartphone producer Xiaomi has announced the start of its mass production of EVs. Company head Lei Jun named the first half of 2024 as the target date at the National People’s Congress (NPC) in Beijing. Lei is part of the Chinese parliament as a delegate.

    Xiaomi has invested more than three billion yuan (nearly 400 million euros) in the development of its own electric division. “Xiaomi’s car manufacturing has progressed beyond expectation and has recently successfully completed winter testing,” Lei told other delegates.

    The company’s electric division employs around 2,300 people. Lei himself is equally responsible for the development of EVs as well as the company’s telecommunications business. Xiaomi is one of the world’s largest smartphone manufacturers. grz

    • Electromobility

    IW: China needs Western technologies

    The political West has considerable threat potential vis-à-vis China. This is the conclusion of the German Economic Institute (IW) following an evaluation of the Chinese import structure. The study provides a detailed breakdown of industrial imports into the People’s Republic according to their respective countries of origin. Of the 20 most important imported goods in terms of value, an average of 52 percent come from Western countries.

    “If, in the extreme case, there were no more imports from China in the event of a conflict over Taiwan, it would be disastrous for many companies – because dependence has recently reached record levels,” the authors write. But the study shows that China is also “dependent on Western imports” – that is, on imports from Europe, Canada, the United States, but also Japan, South Korea, Australia and New Zealand.

    China is particularly dependent on Western technology products. The country imported semiconductors worth 433 billion US dollars in 2021, 32 percent of which came from the West. If computer chips from Taiwan are included, this share rises to 68 percent. The study also found that China is heavily dependent in other sectors as well. These include aerospace technology, automobiles and pharmaceuticals. Some raw materials and foodstuffs are also difficult to replace.

    “In the event of conflict, the West could use these dependencies to put pressure on the Chinese economy through sanctions,” it says. Therefore, the Chinese government would strive to locate technology and expertise in its own country. grz

    Port cargo cranes suspected of espionage

    A special freighter with cranes from the Chinese company Shanghai Zhenhua Heavy Industries Company Limited (ZPMC) in operation in Wilhelmshaven, Germany.

    Port cargo cranes manufactured by the Chinese company ZPMC have come under espionage suspicion in the United States. Security officials suspect that the sensor technology used on the cranes can be used to register and track the origin and destinations of containers. This would theoretically make it possible to track when and where military equipment is shipped from the USA to other parts of the world.

    National security officials and the Pentagon have compared the cranes to Trojan horses, calling the manufacturer ZPMC the new Huawei, according to the Wall Street Journal. Like the Chinese mobile phone manufacturer’s technology, the cranes are said to be a perfect combination to link legitimate business interests with covert collection of security-related information. A spokesman for the Chinese Embassy in Washington called the allegations paranoia.

    ZPMC cranes are, for example, also used in German ports to handle container shipments, such as Hamburg. ZPMC Germany GmbH is a wholly-owned subsidiary of Shanghai Zhenhua Heavy Industries Co. Ltd. grz

    Opinion

    Mediating, not interfering

    Nora Sausmikat, Leiterin China Desk der Umwelt- und Menschenrechtsorganisation Urgewald e.V.
    Sinologist Nora Sausmikat heads the China desk at urgewald.

    On Feb. 24, the anniversary of Russia’s invasion of Ukraine, the PRC Foreign Ministry released a twelve-point paper on China’s position in this war of aggression. Shortly after the invasion started, there was international hope that China could decisively use its influence with Russia to mediate and bring peace.

    After all, China is considered Russia’s most important ally. The war of aggression against Ukraine is also a symbol of an open struggle between political systems. Shortly after the Russian attack, Ukraine’s ambassador to Japan asked China to intervene. So the world has been awaiting China’s peace initiative for twelve months – and now this twelve-point paper has been published.

    Symbol for the international stage

    What it is not? It is not a clear position of official China on the war of aggression. It is neither an unambiguous pro-Russian statement nor a strong signal toward Russia to stop its war.

    What it is? It is a diplomatic symbol for the international stage, which interprets the ingredients of international diplomacy according to Chinese understanding and fills them with new meaning for the war situation.

    Principle of non-interference

    China has long defended the concept of state sovereignty, that is, the right of sovereign states to be free from foreign interference. This would be the “guarantor of peace, security and prosperity”. However, this notion of “state sovereignty” goes far beyond the corresponding prohibitions on the unauthorized use of force and the arming or financing of rebel movements enshrined in the UN Charter.

    For China, this principle of international law is tantamount to “non-interference”. Because China routinely labels even mere remarks about its domestic policies – not to mention criticism of its human rights track record – as an unacceptable form of “interference” in its state sovereignty. This is the stance China seeks to establish on the global diplomatic stage.

    This is highly dangerous, particularly when it comes to crimes against humanity and other offenses under international law – as currently committed by Russia in Ukraine. A unified international response to atrocities committed by Russia in Ukraine, which is clearly the case under international law, has thus also been prevented for the past year by Chinese pro-Russian positions.

    China rejects universal understanding of human rights

    From the Chinese point of view, the twelve-point paper is a logical consequence of the massive reshaping of universal ground rules to suit national interests that has been going on for the past ten years. Take human rights, for example: The emphasis on state sovereignty, non-interference in internal affairs, and the right to economic development as a human right above all other rights threatens to weaken the entire international human rights system as well as norms on transparency and accountability. China rejects the idea of universal human rights that go beyond national sovereignty and concern the international community as a whole.

    In the twelve-point paper, China emphasizes the importance of territorial sovereignty for all countries. A small difference from state sovereignty with big consequences. This could entail recognizing Russian-annexed territories as Russian. Ultimately, this can also mean creating conditions that entail changing Taiwan’s status. But it may also mean – and this is rather unlikely – that China ends up condemning the invasion of a sovereign country like Ukraine.

    What the twelve-point paper also is: An offer by China to act as a mediator, a call for dialogue and compromise – under the premises of a reinterpreted international law. China advocates a cease-fire and the resumption of peace talks.

    Beijing’s interests

    The twelve points also reflect China’s pragmatic interests: supply chains should once again operate reliably, the Eurasian continent must be kept stable for this purpose, and the United Nations Security Council should cease sanctions against Russia. Dialogue and negotiations are the only solution, not sanctions, it says. It is important to remember that Ukraine is an important transit country for the Silk Road and a key military and grain supplier to China. Point 9 of the twelve-point plan specifically mentions the Black Sea Grain Initiative, which should be continued.

    Now, one year after the start of the war, supply chains, financial flows and energy transport routes between Russia and China have been consolidated. In the global competition for spheres of influence to secure (energy) raw materials, loyalty pledges are becoming increasingly important in the systemic rivalry. China now once again signaled that it stands ready for rebuilding. Xi Jinping gives Ukraine hope.

    Reshaping the international order

    And Ukraine is acting accordingly: At last fall’s 51st session of the UN Human Rights Council, it abstained from voting on the draft resolution, which envisaged a debate on the situation in Xinjiang at the next session in March. In the end, the result of the vote was very close, with 17 votes in favor, 19 against and 11 abstentions.

    This twelve-point plan is supposed to stem the global saber-rattling through goodwill. Foreign Minister Qin Gang warned against further arms deliveries. Beijing’s global security strategy was published alongside the twelve-point plan. It is intended to establish an alternative system to NATO. Both papers are building blocks for reshaping the international order.

    Nora Sausmikat holds a habilitation in sinology and heads the China desk at urgewald, the campaign work on the Asian Infrastructure Investment Bank as well as the Asian Development Bank. Aside from her focus on the two banks, she analyzes China’s global role, particularly in the areas of climate and human rights policy. This text was first published in the German newspaper taz on March 3, 2023.

    • Europe
    • Ukraine War
    • United Nations

    Executive Moves

    Chris Cash, Director of the China Research Group, has been appointed an Associate Fellow of the UK Council on Geostrategy.

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

    Dessert

    Protesters in Taiwan’s capital Taipei: On the 64th anniversary of the 1959 Tibet Uprising, Tibetan and Taiwanese protesters drove attention to China’s oppressive policies in Tibet.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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