When Germany’s former chancellor Angela Merkel opened her first IAA 16 years ago, the world still looked different: 5.3 million new cars were sold in China, a million visitors came, and the then-VDA President Wissmann mocked fuel-efficient vehicles and EVs. Today, more than four times as many new cars are sold in the People’s Republic, only 400,000 interested visitors come to the IAA – which is now called IAA Mobility – and Germany as a car country risks losing out in the competition with the People’s Republic. This could still be changed from a position of strength, writes Christian Domke Seidel – but time is running out.
For China itself, the USA is its biggest rival – a reason to remain stoically loyal to Russia. Of course, this stance is not discussed publicly in the country. This makes the findings of researchers from the think tank European Council of Foreign Relations (ECFR) all the more interesting: They conducted background interviews and analyzed academic papers to learn more about what China’s intelligentsia thinks of Moscow’s policy and the war against Ukraine. The opinions are more ambivalent than one would think, and in some cases even criticism is voiced – albeit very quietly. Christiane Kuehl has written down everything that needs to be known about this.
It may be one of the more pleasant appointments on the calendar for Chancellor Olaf Scholz: The opening of the International Motor Show (IAA) in Munich – also called IAA Mobility 2023. It is his first IAA. When Angela Merkel opened her first IAA in 2007, a million people flocked to the exhibition in Frankfurt. Addressing the threat of tighter CO2 limits, VDA President Matthias Wissmann said at the time: “A successful car has to be sexy.” He didn’t think much of fuel-efficient cars or EVs. In China, 5.3 million new cars were sold at the time.
Car shows are also a reflection of the automotive industry. The IAA has meanwhile moved from Frankfurt to Munich. The last show attracted around 400,000 visitors. This year’s headlines are likely to focus less on new cars than on the activists who will be protesting for compliance with the Paris Climate Agreement. And about 23.2 million new vehicles were sold in China in 2022. More than four times as many as in 2007.
That is also one reason why so many Chinese supplier companies and car manufacturers have come to the IAA. For example, BYD, which knocked Volkswagen off the car throne in the People’s Republic in the meantime. NIO, hyped up as the Chinese Tesla and Aiways, MG, Xpeng and many more. German manufacturers, who once only saw an opportunity for more sales in China and considered EVs niche, at best, would be well advised to adjust their China strategy.
The adjustment could still be made from a strong position, as the management consultancy McKinsey calculates in its study “A road map for Europe’s automotive industry.” In terms of turnover, the European car industry is three times as large as the Chinese. About one in three euros spent on research and development in the EU comes from the automotive industry – about 60 billion euros annually.
But the study urges haste. “Since 2019, European incumbents have lost six percentage points of market share in their home market and five percentage points in China. Meanwhile, Chinese OEMs are gaining ground in both China and Europe, reaching 45 percent market share in their home market in 2022. This dynamic is even more apparent in battery electric vehicles: new EV-focused entrants hold 51 percent of the global BEV market,” the study says. However, it is precisely in this vehicle class where German manufacturers struggle.
On top of that, the European automotive industry is dependent on China, especially regarding batteries: Currently, 90 percent of the capacity for refining lithium are located in China, and more than 70 percent of the cells are manufactured in China. The study calculated that Europe would lack 500 GWh of battery capacity by 2030. “To cover European battery demand locally, an additional 20 gigafactories, a 35 euro billion investment, would be needed. McKinsey quantifies the need for strategically important semiconductors at 190 billion euros for 37 plants.
The McKinsey authors list seven points in their roadmap for the European car industry:
Of course, German manufacturers have long since taken appropriate steps. The most recent example is Volkswagen. The group has acquired 4.99 percent of Xpeng for 632 million euros. The brand was founded in 2014 and sold around 121,000 EVs last year. (VW did not sell 145,000 EVs in China in the same period.) The multi-million euro cooperation aims to jointly develop two mid-range models. The fact that a Chinese manufacturer is providing a German manufacturer with a platform so that the latter can offer a competitive car in Germany shows that the market has turned 180 degrees.
In fact, it is likely to be crucial that European manufacturers learn to democratize electromobility. There are hardly any EVs available in Germany for under 40,000 euros. However, many Chinese manufacturers have their strengths precisely in the cheaper segment. Even if they are currently concentrating on premium vehicles in Europe: A downward expansion of their portfolio is only a matter of time. Moreover, the more cars they produce, the cheaper individual models can be.
“European manufacturers have accepted these challenges and are in the midst of transformation,” says Ruth Heuss, senior partner at McKinsey and co-author of the study, summarizing the outlook for the future. European manufacturers have announced 150 new models by 2030. Whether there will also be a few affordable models with electric drives will be revealed at the IAA in Munich.
Official statements from Beijing on the Ukraine war often sound either like an echo chamber of Russia or like empty diplomatic talk. There is no public discourse on Russian policy. Nevertheless, reports by Chinese academics sound more nuanced and are, therefore, quite interesting. “While the views of these intellectuals cannot be taken as a proxy for positions adopted by the Chinese government, they do shed light on the questions under debate and the way in which these events are being framed in China,” says a new study by the think tank European Council of Foreign Relations (ECFR).
The authors, Mark Leonard and Alicja Bachulska, conducted background discussions with academics or read their publications. These revealed a thoroughly critical take on Moscow and events in Russia, including the attack on Ukraine and the Wagner rebellion just over two months ago. At the same time, however, it was clear that no one in China wants the United States, the People’s Republic’s main rival, to emerge as the big winners from this geopolitical conflict. This is what makes the situation so complicated for China.
“At the strategic level, there is a sense among thinkers that a structural logic binds China and Russia closely together,” Leonard and Bachulska write. “One prominent Chinese scholar argued that Xi’s and Putin’s political fates are intertwined.” If one fails, the other will have a harder time. This is why Beijing fears Putin’s fall. Of course, certain academics strike an openly nationalistic tone in texts or romanticize their friendship with Russia. But the authors believe that the more reserved, analytical voices are certainly relevant.
The two researchers filtered out four core perspectives from their interlocutors’ thinking that shed light on China’s inner workings:
So far, so familiar. But the Chinese debate on how to deal with Russia includes two opposing tendencies, the authors write: “On the one hand, there is clear frustration with Moscow on a tactical level. Almost all of the intellectuals interviewed commented on Russia’s poor military performance, some with palpable derision.” Nevertheless, “Moscow’s grievances about NATO expansion and justifications for waging war against Ukraine seem well received and understood among Chinese intellectuals.”
In late 2022, Mark Leonard met several scientists at a conference in Beijing who were quite frank in confidential discussions. “The ambivalent feelings of the Chinese towards the Russians were very striking,” Leonard said at a webinar to present the new study. In some cases, he said, a certain contempt even became apparent. There was also criticism of Russia’s policy: “Some said Russia had infiltrated Chinese media or was waging a hybrid war against China.” Others criticized President Vladimir Putin for deceiving China into supporting his war more than it actually wanted to.
Academics nevertheless fear Russia’s weakness and failure, according to the ECFR study: “Chinese observers of the war in Ukraine worry about the competence of a declining and potentially erratic Russia.” The Prigozhin rebellion showed that Putin is not a real dictator and lacks the killer instinct of a Xi Jinping, Leonard comments on his talks.
However, few academics express public criticism of Russia. One of the most outspoken critics is Feng Yujun, Director of the Center for Russian and Central Asian Studies at Fudan University in Shanghai. “Feng sees Moscow an irrational actor, largely driven by a victim mentality and imperial longings,” writes the ECFR study. “He claims that Russian foreign policy has exacerbated antagonisms between liberal and conservative forces in countries around the world, leading to a subsequent deterioration in the international environment.”
The sinologist Thomas des Garets Geddes also analyzed documents written by Chinese experts on Russia. He also quotes Feng Yujun’s texts in his blog Sinification: “The imperial logic underlying both the rejection of Ukraine as a national entity and the overt claim to restore [Russia’s] traditional territories is alarming,” Feng wrote in May. After the Wagner rebellion, he noted that the war in Ukraine had created a deep schism in Russia’s ruling elite: “Anti-Putin sentiment has been rising within key Russian business circles. Putin’s base of loyal supporters in the upper echelons of Russian society has been shrinking.” The mutiny was therefore not an isolated event.
Meanwhile, many academics take a sober view of the global geopolitical situation. Geddes cited an essay by prominent Russia expert Zhao Huasheng, Feng’s predecessor at Fudan University: “With China’s greatest strategic pressure coming from the sea, good Sino-Russian relations can ensure that China has … a relatively stable strategic rear.” Zhao describes himself as a realpolitik politician, according to Geddes. “Like many of his peers, he probably does disapprove of Russia’s actions, but does not say so explicitly, simply noting that ‘maintaining Sino-Russian cooperation does not imply supporting all of Russia’s actions and policies‘.” This clearly sounds like sober calculation and less like “borderless” friendship.
As Leonard reported, the experts at the Beijing conference were surprised by the West’s cohesion in the Ukraine war. Some were also shocked that Germany decided to impose sanctions despite its gas dependence on Russia. There was also a lot of criticism of the CCP. But only behind closed doors.
“Xu Wenkai” – for aaajiao, these are just the words on his passport. When he was young, the Berlin-based media artist and activist decided to take the choice of his name into his own hands: “Why shouldn’t you take every chance to determine by yourself who you are?” And so he adopted his internet nickname ‘jiao/角’ (Chinese for: ‘corner,’ the shortened version of his former nickname ‘chromatic_corner’), letting friends and colleagues call him that – supplemented by two more ‘a’, for reasons of optical balance.
For the 38-year-old, being independent and autonomous in his creative work has been a big priority throughout his career. This is not only reflected in his artistic work, but also in his role as a community organizer. In 2009, he joined friends in Shanghai to found Xindanwei, China’s first coworking space. “That was Shanghai’s golden age,” he recaps. There were no requirements from the administration. As long as the neighborhood went along with it, you could do whatever you wanted. In the case of Xindanwei, this consisted of welding together a community of artists, freelancers, computer scientists and anyone who wanted to let information and ideas flow freely.
In 2017, the politician Ying Yong became mayor of Shanghai, and with him at the latest, a new culture of administrative control took hold. The changes were immediately noticeable. aaajiaos decided to flee and moved to Berlin the same year. The German capital was initially planned as a retreat where he could work on his artistic works for six months away from the buzz of all the institutions and people he had been associated with in Shanghai. During the pandemic, however, he realized that the chapter of China was closed for him, and Berlin became his main residence.
His personal upheavals have recently been reflected in his art. For example, aaajiao has staged several exhibitions dedicated to his personal relationship with Chinese identity. His time in Berlin has helped him to reflect on this: “People here don’t care who you are. At the end of the day, I am just a person who can speak Mandarin, English and a little German.”
But he affirms that the main theme of his artistic studies will continue to be the anticipation of coming technological changes. It is not that aaajiao approves of every technological innovation – although many visitors to his multimedia exhibitions jump to that conclusion. Rather, it seems important and interesting to him to register changes in order to open up spaces for thinking about the future. He rarely has a didactic message. Instead, his art is intended to have visitors to his exhibitions suddenly see seemingly familiar things a little differently. How exactly they do this, however, is supposed to remain open, in keeping with the indeterminacy of his art. A conviction that should not surprise anyone when it comes to a proven free spirit like aaajiao. Julius Schwarzwaelder
In the “Zero Accident Safety Education Experience Base” in Shenyang, students are sensitized to the dangers of road traffic. For example, they try to anticipate accidents while wearing virtual reality goggles. Buckling up is mandatory.
When Germany’s former chancellor Angela Merkel opened her first IAA 16 years ago, the world still looked different: 5.3 million new cars were sold in China, a million visitors came, and the then-VDA President Wissmann mocked fuel-efficient vehicles and EVs. Today, more than four times as many new cars are sold in the People’s Republic, only 400,000 interested visitors come to the IAA – which is now called IAA Mobility – and Germany as a car country risks losing out in the competition with the People’s Republic. This could still be changed from a position of strength, writes Christian Domke Seidel – but time is running out.
For China itself, the USA is its biggest rival – a reason to remain stoically loyal to Russia. Of course, this stance is not discussed publicly in the country. This makes the findings of researchers from the think tank European Council of Foreign Relations (ECFR) all the more interesting: They conducted background interviews and analyzed academic papers to learn more about what China’s intelligentsia thinks of Moscow’s policy and the war against Ukraine. The opinions are more ambivalent than one would think, and in some cases even criticism is voiced – albeit very quietly. Christiane Kuehl has written down everything that needs to be known about this.
It may be one of the more pleasant appointments on the calendar for Chancellor Olaf Scholz: The opening of the International Motor Show (IAA) in Munich – also called IAA Mobility 2023. It is his first IAA. When Angela Merkel opened her first IAA in 2007, a million people flocked to the exhibition in Frankfurt. Addressing the threat of tighter CO2 limits, VDA President Matthias Wissmann said at the time: “A successful car has to be sexy.” He didn’t think much of fuel-efficient cars or EVs. In China, 5.3 million new cars were sold at the time.
Car shows are also a reflection of the automotive industry. The IAA has meanwhile moved from Frankfurt to Munich. The last show attracted around 400,000 visitors. This year’s headlines are likely to focus less on new cars than on the activists who will be protesting for compliance with the Paris Climate Agreement. And about 23.2 million new vehicles were sold in China in 2022. More than four times as many as in 2007.
That is also one reason why so many Chinese supplier companies and car manufacturers have come to the IAA. For example, BYD, which knocked Volkswagen off the car throne in the People’s Republic in the meantime. NIO, hyped up as the Chinese Tesla and Aiways, MG, Xpeng and many more. German manufacturers, who once only saw an opportunity for more sales in China and considered EVs niche, at best, would be well advised to adjust their China strategy.
The adjustment could still be made from a strong position, as the management consultancy McKinsey calculates in its study “A road map for Europe’s automotive industry.” In terms of turnover, the European car industry is three times as large as the Chinese. About one in three euros spent on research and development in the EU comes from the automotive industry – about 60 billion euros annually.
But the study urges haste. “Since 2019, European incumbents have lost six percentage points of market share in their home market and five percentage points in China. Meanwhile, Chinese OEMs are gaining ground in both China and Europe, reaching 45 percent market share in their home market in 2022. This dynamic is even more apparent in battery electric vehicles: new EV-focused entrants hold 51 percent of the global BEV market,” the study says. However, it is precisely in this vehicle class where German manufacturers struggle.
On top of that, the European automotive industry is dependent on China, especially regarding batteries: Currently, 90 percent of the capacity for refining lithium are located in China, and more than 70 percent of the cells are manufactured in China. The study calculated that Europe would lack 500 GWh of battery capacity by 2030. “To cover European battery demand locally, an additional 20 gigafactories, a 35 euro billion investment, would be needed. McKinsey quantifies the need for strategically important semiconductors at 190 billion euros for 37 plants.
The McKinsey authors list seven points in their roadmap for the European car industry:
Of course, German manufacturers have long since taken appropriate steps. The most recent example is Volkswagen. The group has acquired 4.99 percent of Xpeng for 632 million euros. The brand was founded in 2014 and sold around 121,000 EVs last year. (VW did not sell 145,000 EVs in China in the same period.) The multi-million euro cooperation aims to jointly develop two mid-range models. The fact that a Chinese manufacturer is providing a German manufacturer with a platform so that the latter can offer a competitive car in Germany shows that the market has turned 180 degrees.
In fact, it is likely to be crucial that European manufacturers learn to democratize electromobility. There are hardly any EVs available in Germany for under 40,000 euros. However, many Chinese manufacturers have their strengths precisely in the cheaper segment. Even if they are currently concentrating on premium vehicles in Europe: A downward expansion of their portfolio is only a matter of time. Moreover, the more cars they produce, the cheaper individual models can be.
“European manufacturers have accepted these challenges and are in the midst of transformation,” says Ruth Heuss, senior partner at McKinsey and co-author of the study, summarizing the outlook for the future. European manufacturers have announced 150 new models by 2030. Whether there will also be a few affordable models with electric drives will be revealed at the IAA in Munich.
Official statements from Beijing on the Ukraine war often sound either like an echo chamber of Russia or like empty diplomatic talk. There is no public discourse on Russian policy. Nevertheless, reports by Chinese academics sound more nuanced and are, therefore, quite interesting. “While the views of these intellectuals cannot be taken as a proxy for positions adopted by the Chinese government, they do shed light on the questions under debate and the way in which these events are being framed in China,” says a new study by the think tank European Council of Foreign Relations (ECFR).
The authors, Mark Leonard and Alicja Bachulska, conducted background discussions with academics or read their publications. These revealed a thoroughly critical take on Moscow and events in Russia, including the attack on Ukraine and the Wagner rebellion just over two months ago. At the same time, however, it was clear that no one in China wants the United States, the People’s Republic’s main rival, to emerge as the big winners from this geopolitical conflict. This is what makes the situation so complicated for China.
“At the strategic level, there is a sense among thinkers that a structural logic binds China and Russia closely together,” Leonard and Bachulska write. “One prominent Chinese scholar argued that Xi’s and Putin’s political fates are intertwined.” If one fails, the other will have a harder time. This is why Beijing fears Putin’s fall. Of course, certain academics strike an openly nationalistic tone in texts or romanticize their friendship with Russia. But the authors believe that the more reserved, analytical voices are certainly relevant.
The two researchers filtered out four core perspectives from their interlocutors’ thinking that shed light on China’s inner workings:
So far, so familiar. But the Chinese debate on how to deal with Russia includes two opposing tendencies, the authors write: “On the one hand, there is clear frustration with Moscow on a tactical level. Almost all of the intellectuals interviewed commented on Russia’s poor military performance, some with palpable derision.” Nevertheless, “Moscow’s grievances about NATO expansion and justifications for waging war against Ukraine seem well received and understood among Chinese intellectuals.”
In late 2022, Mark Leonard met several scientists at a conference in Beijing who were quite frank in confidential discussions. “The ambivalent feelings of the Chinese towards the Russians were very striking,” Leonard said at a webinar to present the new study. In some cases, he said, a certain contempt even became apparent. There was also criticism of Russia’s policy: “Some said Russia had infiltrated Chinese media or was waging a hybrid war against China.” Others criticized President Vladimir Putin for deceiving China into supporting his war more than it actually wanted to.
Academics nevertheless fear Russia’s weakness and failure, according to the ECFR study: “Chinese observers of the war in Ukraine worry about the competence of a declining and potentially erratic Russia.” The Prigozhin rebellion showed that Putin is not a real dictator and lacks the killer instinct of a Xi Jinping, Leonard comments on his talks.
However, few academics express public criticism of Russia. One of the most outspoken critics is Feng Yujun, Director of the Center for Russian and Central Asian Studies at Fudan University in Shanghai. “Feng sees Moscow an irrational actor, largely driven by a victim mentality and imperial longings,” writes the ECFR study. “He claims that Russian foreign policy has exacerbated antagonisms between liberal and conservative forces in countries around the world, leading to a subsequent deterioration in the international environment.”
The sinologist Thomas des Garets Geddes also analyzed documents written by Chinese experts on Russia. He also quotes Feng Yujun’s texts in his blog Sinification: “The imperial logic underlying both the rejection of Ukraine as a national entity and the overt claim to restore [Russia’s] traditional territories is alarming,” Feng wrote in May. After the Wagner rebellion, he noted that the war in Ukraine had created a deep schism in Russia’s ruling elite: “Anti-Putin sentiment has been rising within key Russian business circles. Putin’s base of loyal supporters in the upper echelons of Russian society has been shrinking.” The mutiny was therefore not an isolated event.
Meanwhile, many academics take a sober view of the global geopolitical situation. Geddes cited an essay by prominent Russia expert Zhao Huasheng, Feng’s predecessor at Fudan University: “With China’s greatest strategic pressure coming from the sea, good Sino-Russian relations can ensure that China has … a relatively stable strategic rear.” Zhao describes himself as a realpolitik politician, according to Geddes. “Like many of his peers, he probably does disapprove of Russia’s actions, but does not say so explicitly, simply noting that ‘maintaining Sino-Russian cooperation does not imply supporting all of Russia’s actions and policies‘.” This clearly sounds like sober calculation and less like “borderless” friendship.
As Leonard reported, the experts at the Beijing conference were surprised by the West’s cohesion in the Ukraine war. Some were also shocked that Germany decided to impose sanctions despite its gas dependence on Russia. There was also a lot of criticism of the CCP. But only behind closed doors.
“Xu Wenkai” – for aaajiao, these are just the words on his passport. When he was young, the Berlin-based media artist and activist decided to take the choice of his name into his own hands: “Why shouldn’t you take every chance to determine by yourself who you are?” And so he adopted his internet nickname ‘jiao/角’ (Chinese for: ‘corner,’ the shortened version of his former nickname ‘chromatic_corner’), letting friends and colleagues call him that – supplemented by two more ‘a’, for reasons of optical balance.
For the 38-year-old, being independent and autonomous in his creative work has been a big priority throughout his career. This is not only reflected in his artistic work, but also in his role as a community organizer. In 2009, he joined friends in Shanghai to found Xindanwei, China’s first coworking space. “That was Shanghai’s golden age,” he recaps. There were no requirements from the administration. As long as the neighborhood went along with it, you could do whatever you wanted. In the case of Xindanwei, this consisted of welding together a community of artists, freelancers, computer scientists and anyone who wanted to let information and ideas flow freely.
In 2017, the politician Ying Yong became mayor of Shanghai, and with him at the latest, a new culture of administrative control took hold. The changes were immediately noticeable. aaajiaos decided to flee and moved to Berlin the same year. The German capital was initially planned as a retreat where he could work on his artistic works for six months away from the buzz of all the institutions and people he had been associated with in Shanghai. During the pandemic, however, he realized that the chapter of China was closed for him, and Berlin became his main residence.
His personal upheavals have recently been reflected in his art. For example, aaajiao has staged several exhibitions dedicated to his personal relationship with Chinese identity. His time in Berlin has helped him to reflect on this: “People here don’t care who you are. At the end of the day, I am just a person who can speak Mandarin, English and a little German.”
But he affirms that the main theme of his artistic studies will continue to be the anticipation of coming technological changes. It is not that aaajiao approves of every technological innovation – although many visitors to his multimedia exhibitions jump to that conclusion. Rather, it seems important and interesting to him to register changes in order to open up spaces for thinking about the future. He rarely has a didactic message. Instead, his art is intended to have visitors to his exhibitions suddenly see seemingly familiar things a little differently. How exactly they do this, however, is supposed to remain open, in keeping with the indeterminacy of his art. A conviction that should not surprise anyone when it comes to a proven free spirit like aaajiao. Julius Schwarzwaelder
In the “Zero Accident Safety Education Experience Base” in Shenyang, students are sensitized to the dangers of road traffic. For example, they try to anticipate accidents while wearing virtual reality goggles. Buckling up is mandatory.
