Interview with Annalena Baerbock + Power from space

Dear reader,

A new hand of cards is being dealt. The fact that the German federal election is just a few weeks away has also been an urgent topic for Chinese entrepreneurs for some time, made evident by a question from the head of a large Beijing agency. When Annalena Baerbock was chosen as her party’s candidate for chancellor’s office, he was seeking Chinese voices abroad. He wanted to know what impacts a change in the Greens Parties’ China policy could have on German-Chinese business trade relations. What Baerbock means when she talks about “strategic sovereignty instead of decoupling” in our interview with Felix Lee makes one thing clear: the tone is getting rougher. And the Green Party leader wants to put “China high on the political agenda.”

No, it is not a script for a science fiction movie. Utopia becomes reality: China wants to beam solar energy straight from space. Frank Sieren investigated how this could work and what foundations have already been laid. The base station for a future orbital solar power plant is set for construction this year. The plans were already laid out back in 2008 in the then five-year plan.

Beijing’s zero-covid strategy is a risk. Not only for tourism, but above all for economic growth. In his China.Table guest article, Economist Yu Yongding also blamed “official policies” for the slow growth. Yu is the director of the Institute of World Economy and Politics at the Chinese Academy of Social Sciences in Beijing, one of the most important academic research institutions – his words provide insight into behind-the-scenes discussions among leading economists.

Your
Ning Wang

“China must be high on the political agenda”

Annalena Baerbock China-Politik — Annalena Baerbock

What is your priority: clear words on human rights or frictionless trade?

In the fight against the climate crisis, there is no way around cooperation with China. At the same time, a modern trade policy cannot be pursued in isolation from the issue of human rights. What is smooth about trade if it violates human rights and destroys the environment and climate? This also means not always addressing human rights pro forma and ducking out of the way when it comes to money. Instead, we should use the power of our European internal market to protect European values.

Current trade relations with China disregard forced labour and the serious human rights violations against the Uighurs in Xinjiang, for example. However, we can put a stop to this – goods from forced labour would then not be given access to the EU’s internal market. However, with regard to fair market access for foreign investment, legal certainty and a level playing field, there is still much to be done in European-Chinese trade relations.

What do you think about globalization and the free flow of goods? Do you think the regions of the world should decouple economically?

Globalisierung hat vielen Menschen Wohlstand und Entwicklung gebracht. Gleichzeitig brauchen wir in der globalisierten Welt klare Regeln, die Ungleichheit verringern sowie Menschenrechte und unsere Lebensgrundlagen schützen. Von wirtschaftlicher Entkoppelung oder Protektionismus halte ich nichts. China ist eine so große aufstrebende Wirtschaftskraft, dass wir uns nicht von diesem Land abschotten können. Aber wir dürfen uns natürlich nicht von einem autoritären Regime abhängig machen, das auch mit unlauteren Wirtschaftsmethoden arbeitet.

We need a different China policy that looks at all sensitive economic sectors and draws its strength from the combined strength of the European Union. We Europeans can define for ourselves which products enter our market and which investments, especially in critical infrastructure, we allow. And we can decide to diversify our supply chains – for example with like-minded countries in the Indo-Pacific – to reduce dependence on China. This is not decoupling, but strategic sovereignty.

In general, how important is China on your agenda compared to the EU, the US, Russia and the Global South?

We are currently experiencing a competition of systems – liberal democracies versus authoritarian powers like China. With its aggressive power politics, the Chinese leadership is presenting the international community with a major challenge. It is forcing many states into economic dependency and thus also into political dependency, is also acting increasingly aggressively in military terms, as in the South China Sea, is violating the constitutional principle of “one country, two systems” in Hong Kong and is putting Taiwan under massive pressure. At the same time, we must cooperate with China and other authoritarian regimes on the major issues facing humanity, such as the climate crisis.

Dealing with the People’s Republic must therefore be high on the political agenda. A unified European policy is crucial if the EU does not want to be ground down in the geopolitical structure with China. Going it alone, as we have seen from the German Government in recent years, weakens Europe’s position vis-à-vis China. That makes it all the more important that we also work closely with the United States on China policy. The transatlantic partnership remains a central pillar of German foreign policy.

Solar power from space

By

Frank Sieren

China wants to build a space solar power plant that is able to convert microwaves transmitted from space into electricity at high speed. The construction of a 15.4 million US dollar base station in the suburban district of Bishan in the metropolis of Chongqing is to be completed by the end of the year. It would be the first of its kind. Further testing with helium tethered balloons is also scheduled for this year to verify the reception of the rays and the reconversion at a height of 300 meters. The project is largely pushed by Chongqing University in southwest China. The groundwork for the test facility in Bishan was laid three years ago.

If this technology proves to be feasible and financially viable, the project will head to space in 2030 with a small test station with an output of one megawatt. By 2049, a solar power plant in orbit with a total capacity of one gigawatt will generate power from the sun. That is more than the capacity of the world’s largest nuclear power plant at present.

24 hours of sun in space

Unlike on Earth, a solar plant in space would be independent of times of day and weather-related fluctuations. The power plant is to be positioned at an altitude of 36,000 kilometers in geostationary orbit, i.e. always above a fixed point on Earth. From this altitude, the station would be able to avoid the shadow of the Earth. It would then be able to supply power from space 24 hours a day. The utilization rate would increase sixfold compared to an installation on the Earth’s surface.

Since the 1960s, scientists have been fascinated by the idea of Austrian-American inventor Nikola Tesla to intercept solar power directly from space. In China, too, the implementation of its own orbital solar power plant was considered as early as 2008 in the 12th Five-Year Plan. However, plans were put on hold several times. The implementation was deemed too costly and its efficiency questionable. As a result of China’s increased presence in space and Beijing’s climate goals to make the country climate-neutral by 2060, the project is now back in focus.

Space solar power plant: enormous technical requirements

However, the technical challenges are still tremendous. Tesla theorized that electricity would spread like waves in all directions in the air. However, to increase the effective range, the energy needs to be concentrated into a highly focused beam. The energy loss in the atmosphere could also be reduced to a minimum of two percent by emitting electricity in the form of high-frequency microwaves. But this is extremely complicated.

In Bishan, the Chinese researchers need to prove that such wireless energy transmission is also possible over long distances. So far, they have succeeded in using this technology to transmit electricity in a targeted and bound manner from a balloon 300 meters above ground. Once the test station is completed, the next step will be 20 kilometers, which is the distance of an energy transfer from the stratosphere. In parallel, the researchers in Bishan will experiment with several alternative applications of this technology, such as powering drones through such an energy beam.

The California Institute of Technology is currently working on a similar project. As part of the “Space-based Solar Power Project” (SBSP), Caltech researchers have already developed corresponding prototypes that are to be tested in orbit in 2023. The satellite is equipped with a solar sail measuring about four square meters and is intended to demonstrate energy transmission. However, a corresponding ground station – which is considered the greater technological challenge – is still missing. Something the Chongqing researchers already have.

No clear plan in the US

But only China is specifically pushing this program. The Chinese government is also providing funds. Meanwhile, Billionaire Donald Bren and his wife have donated 100 million US dollars to the project in California. NASA canceled a similar project years ago. “The United States lacks a clear plan for SBSP and is dangerously at risk of falling behind its competitors.,” the American SpaceNews magazine recently wrote.

But in recent years, the US military has become increasingly interested in the idea of solar power from space. The US Air Force now plans to send out satellites in the next two to three years to test the technology for transmitting power. Potential applications would include powering drones or supplying electricity to remote military outposts. It’s possible that solar power plants in space could power space stations and satellites, as well as permanent lunar stations. However, it is not clear how far this project has progressed.

Power for the space-power China

China is now considered the largest space-power on Earth, second only to the USA, although the People’s Republic only began serious investment in space travel relatively late (China.Table reported). In 2020, China spent a total of 7.5 billion euros on space travel, three times as much as at the beginning of the millennium. Beijing has already sent ten men and two women to space. In late 2020, the Chinese space probe Chang’e 5 landed on the moon to take rock samples. In May 2021, China was able to set down the rover Zhurong on Mars. And in June, the new Tiangong space station was christened (China.Table reported). In 2024, a space telescope is expected to dock with the space station. And another Mars mission is planned for 2028. With that, China would have finally overtaken NASA and ESA. Power generation from space could become a key technology.

Tutoring industry: becoming non-profit before the end of the year

The Ministry of Education has set a deadline for China’s tutoring industry. By the end of the year, institutions offering curriculum-related tutoring must have registered as non-profit organizations (China.Table reported). The measure comes in the wake of orders issued by Beijing’s education commission in August to several executives of tutoring providers to revise their business models, according to business magazine Caixin. According to the report, education-related companies should switch to tutoring for high schools, vocational training, lifelong education and other fields.

In addition, tutoring providers whose services are curriculum-based will not be allowed to accept new students or charge tuition until their registration as a nonprofit organization is completed, according to the Ministry of Education, the Ministry of Civil Affairs, and the State Administration for Market Regulation (SAMR). niw

Great Wall Motors: cars for Germany

Chinese carmaker Great Wall Motors is planning to enter the German market with electric models. The company is currently presenting a model from its electric subsidiary Ora and a vehicle from its premium brand Wey at the IAA Mobility in Munich, which should be available to order by the end of the year. The Ora Cat compact model and the Wey Coffee 01 plug-in hybrid are scheduled for shipment during the first half of 2022, Great Wall announced at the IAA. However, both names are project names and may still change.

According to the company, the Ora Cat is equipped with batteries by Chinese manufacturer CATL and is said to have a range of 300 to 400 kilometers, depending on car configuration. The cheapest model is said to be available for as little as 30,000 euros – a price for which you barely get a compact electric vehicle from established German brands. Like most Chinese electric cars, the Ora Cat is equipped with latest technological gimmicks and driving assistance systems, including large displays in the cockpit, cameras for facial recognition inside the vehicle, and sensors used for highways and a parking assistant. The Ora Cat will also be marketed in other European countries.

The Wey Coffee 01, which will initially only be available in Germany. It is equipped with a two-liter combustible engine and two electric motors. In early 2022, Great Wall also plans to open a so-called Wey brand experience center in Munich, which will offer its mobility and ecosystem services. More locations with this concept are also planned for a later date.

In general, only a handful of Chinese manufacturers are present at IAA Mobility this year. Besides Great Wall Motor, the small Chinese group includes electric startup Xpeng and Volvo’s Chinese-Swedish subsidiary Polestar. ck

Michel: EU must find its own way in China policy

According to EU Council President Charles Michel, the European Union must find its own path in China policy and not take sides in the rivalry between the US and the People’s Republic . “There is no doubt that we share the same democratic values and the same political model as the United States. At the same time, we – as Europeans – must develop our own strategy towards China as a world power,” Michel said in an interview with the French think tank Groupe d’études géopolitique. In recent months, therefore, attempts have been made within the framework of the European Council “to identify the way we deal with China,” Michel said.

According to Michel, the EU strategy contains three elements. The first is the “very firm and very strict” enforcement of standards in the field of human rights, for example with regard to Hong Kong or the situation of the Uyghurs. Secondly, Michel mentioned the freedom to tackle multilateral issues “where we think dialogue is necessary”, for example the Corona pandemic or climate protection. On trade and the economy, the third point was that relations needed to be real igned, the EU Council President said.

According to Michel, the CAI investment agreement had been a first step towards realigning access to the respective markets. However, work on the CAI in the European Parliament is still suspended after the summer break. The EU Parliament is expected to vote on its draft reorientation of China policy next week (China.Table reported). The agenda for the upcoming plenary week will be announced today, Thursday. The paper reiterates calls for the People’s Republic to drop sanctions against several EU parliamentarians before MEPs revisit the agreement. ari

Protest against US warship at Mischief Reef

China has protested the course of the US destroyer USS Benfold into waters surrounding the Beijing-controlled Mischief Reef in the South China Sea. The voyage is said to happen without Beijing’s consent. The Chinese military’s Southern Command has therefore organized “air and naval forces to track, monitor and expel” the destroyer, the South China Morning Post reported.

Only a few days ago, a new Chinese law came into force that requires all ships entering waters that Beijing considers territorial waters to register in advance. China counts the maritime area around Mischief Reef among these territorial waters – though it is also claimed by the Philippines, Vietnam and Taiwan. It is possible that the US is deliberately putting the new law to the test. The US Department of Defense last week called it a “serious threat” to freedom of navigation and commerce.

China, meanwhile, claims virtually the entire South China Sea as its territory. Neither the US nor its allies, including Germany, recognize these claims – nor the claims of a territorial twelve-mile zone around man-made reefs. Even Admiral Kay-Achim Schönbach, inspector of the German Navy, recently affirmed that he does not recognize any territorial waters around such artificial islands.

The German frigate “Bayern” is also currently en route to the Indo-Pacific. It is expected to pass through the South China Sea on the way back from its mission. Unlike the U.S. Navy, however, the frigate will always stay “far away” from disputed waters, according to Schönbach. “We will stick to usual trade routes where anyone is allowed to sail”. The U.S., on the other hand, has been conducting freedom of navigation exercises in such waters on and off for some time. Still, Schönbach made it clear that Germany does not support China’s policy of building up reefs or atolls into islands and then declaring the surrounding waters as territory. Whether the frigate “Bayern” will also pay a visit to China is still unclear. Beijing had demanded more information about the nature of its mission in early August before deciding whether to grant permission for a port visit to Shanghai (China Table reported). ck

UK reviews acquisition of graphene producer

The UK has ordered a review of the takeover of a graphene manufacturer by a Chinese academic. UK Business Secretary Kwasi Kwarteng has ordered the Competition and Markets Authority (CMA) to investigate the proposed takeover of the small Perpetuus Group by Taurus International or other companies with ties to Chinese academic Zhongfu Zhou, The Guardian reported on Wednesday. Kwarteng has ordered the review “for reasons of national security.”

Perpetuus produces graphene and carbon nanotubes – preliminary products of small size hoped to find suitable applications in a range of industries, including electronics, defense technology and medicine. The materials are exceptional electrical conductors and are potentially stronger than steel. The UK Department for Business has concerns about the impact of the acquisition, according to the report. While Perpetuus has only 14 employees, the company supplies “at least a quarter” of all graphene plasma goods in the UK.

Taurus International, the company showing interest, was only registered in London in October 2020, The Guardian reported. Chinese academic Dr. Zhongfu Zhou is listed on the company’s website as a senior nanotechnology scientist. Little is known about the terms of the proposed takeover deal. According to the Guardian, CMA now has until February next year to submit its results.

The British government had recently had a number of potential company acquisitions reviewed due to possible national security implications. In July, Prime Minister Boris Johnson called on the authorities to review Nexperia’s purchase of Welsh chipmaker Newport Wafer Fab (China.Table reported). Takeover bids for aerospace and defense manufacturers Meggitt and Ultra Electronics are also currently under review. ari

Report: Chinese disinformation campaign in the USA

China has deliberately exploited divided opinions in the US over the Covid pandemic, according to cybersecurity firm Mandiant and Google experts. With the help of online attacks, disinformation and fake accounts, the Chinese government even tried to mobilize protesters, CNN reported on Wednesday, citing the experts’ report.

The operation, which originally sought to discredit pro-democracy protests in Hong Kong in 2019, has expanded into a “global campaign running in seven languages, on at least 30 social media platforms and over 40 websites and forums,” according to the blog of Fire Eye, the owner of Mandiant. It also claims parallels to the Russian disinformation campaign surrounding the 2016 presidential election.

US officials believed the operation was linked to the Chinese government, CNN reports, citing an anonymous source. According to the report, officials were monitoring whether it was used to spread disinformation during the November 2020 presidential election. They ultimately concluded that the Chinese government avoided doing so because it did not want to provoke a reaction. Months later, experts have observed an “explosion of activity” around the world, John Hulquist, vice president of Mandiant Threat Intelligence, told CNN. The attempts to incite physical protests in the US show that the operation poses a “very serious threat.”

Since the start of the Covid pandemic, cyber espionage and disinformation campaigns by China have increased, according to CNN. Beijing has tried to sway the global Covid narrative in its favor, with Chinese officials also openly spreading false and misleading information about the virus and its origins. But there were apparently just as many covert methods. “Over the past two years, we have seen this threat actor evolve, from the types of content they publish to the tactics they use to amplify it,” CNN quotes Shane Huntley, Director of Google’s Threat Analysis Group.

In April, for example, experts discovered thousands of fake social media accounts calling on Asian Americans to protest racial injustice in the U.S. and “disinformation about the origins of the virus,” according to the Mandiant report. However, no such protests took place. niw/ck

The Pandemic’s Impact on China’s Growth Prospects

By Yu Yongding

Yu Yongding is the Director of the Institute of World Economy and Politics at the Chinese Academy of Social Sciences in Beijing.

In the second quarter of 2021, China’s GDP grew by 7.9% year on year. That was a relatively strong performance, especially given the enduring effects of the COVID-19 pandemic on the global economy. But, for China, it represents a disappointment: a Caixin survey of economists showed the median estimate for the second quarter was 8.2% growth.

Chinese economists broadly agree that China’s potential growth rate is 6%. So, taking into consideration the base effect, China’s year-on-year growth rate in the four quarters of 2021 should be 19.1%, 8.3%, 6.7%, and 5.5%. Yet, in the first quarter, growth amounted to 18.3%. This weaker-than-expected performance is, to a significant extent, a result of official policy.

While Chinese authorities implemented expansionary fiscal and monetary policy early in the pandemic, they proved eager to normalize it, for fear that it would fuel inflation and compound financial risks. Fiscal retrenchment has been particularly rapid. In the first half of 2021, China’s general government expenditures increased by only 4.5%, while revenues increased by 21.8%. Though this partly reflects the base effect, policy was undeniably tightened. In fact, in the first half of 2021, China’s public budget deficit was CN¥1.6 trillion ($247 billion) smaller than in 2020.

China: Growth is slowing down

Monetary policy has remained accommodative, but the People’s Bank of China (PBOC) has been cautious, to say the least. In the first half of 2021, social financing rose by CN¥17.7 trillion. That increase is CN¥3.1 trillion smaller than the figure for the same period of 2020. Against this background, it should not be surprising that economic indicators are increasingly pointing to a slowdown in Chinese growth.

China’s leaders are now moving to redress the slowdown. Early last month, the PBOC, hoping to spur an increase in lending, announced that it would cut the mandatory reserve ratio for all banks by 50 basis points.

A few weeks later, the Political Bureau of the Communist Party of China Central Committee released a communiqué acknowledging that “China’s domestic economy is still unstable and unbalanced,” and calling for accelerating “the construction of major projects planned in the 14th Five-Year Plan.” The market has widely interpreted this as a signal that the government will implement more expansionary macroeconomic policy in the second half of this year.

Covid pandemic slows China’s economic recovery

Such a policy adjustment, though still marginal, has raised hopes that growth will pick up in the second half of 2021, potentially even reaching a level consistent with the potential growth rate. But a policy change might not be enough. Instead, China’s economic recovery may well depend, above all, on how the fight against COVID-19 unfolds.

Since lifting the lockdown in Wuhan in early April 2020, China has managed to prevent any major local outbreaks and to keep the number of new daily confirmed COVID cases in the low double digits. Many people believed that China was on its way to eliminating local coronavirus infections altogether.

Those hopes were dashed last month, when several airport workers in Nanjing tested positive during routine screening. Within days, the highly transmissible Delta variant had spread to 22 cities in ten provinces. Total confirmed cases in China surged from 251 on July 16 to around 2,000.

Doubts about Beijing’s zero-covid strategy

The government, still committed to getting infections to zero, responded swiftly, locking down high-risk areas, tightening travel restrictions on medium-risk areas, and quarantining around 100,000 people. But similar situations have occurred before, albeit on a smaller scale. And with much of the world still not vaccinated, and increasingly transmissible virus variants emerging, they will undoubtedly happen again.

The economic costs of such lockdowns – including restrictions on international travel – are extremely high. Given this, some virologists, epidemiologists, and economists now argue that China needs to move away from its zero-tolerance policy and learn to live with the virus.

But resistance to this approach remains strong. After all, China’s strict approach – enabled by its institutional arrangements and cultural tradition – has kept the country virtually COVID-free for several months. And while the costs are high, especially for tourism and travel-related services, China can afford them.

Vaccination rate is still too low

More importantly, China has some way to go in vaccinating its population. While it has so far administered 1.9 billion vaccine doses – mostly of its own Sinovac and Sinopharm vaccines, both of which require two doses – it will need to vaccinate more than 83% of its population before herd immunity is reached, according to its top epidemiologist, Zhong Nanshan.

Moreover, given questions about the long-term efficacy of the vaccines currently being administered, more time might be needed to provide booster shots or develop more effective alternatives. And even if China did manage to inoculate a large enough share of its population with effective vaccines, it exists in a globalized world, where many countries have very low vaccination rates.

It is safe to say that the fight against COVID-19 is far from over. For China, this means that more small-scale coronavirus outbreaks – with the associated economic disruptions – are all but inevitable. Given this, it is very likely that China’s total growth in 2021 will fall short of previous market expectations.

This is not to downplay the importance of fiscal and monetary policy. A more expansionary approach could go a long way toward offsetting the pandemic’s economic impact. In particular, many small and medium-size companies that have been hit hard by the pandemic need help badly, and the government still has policy room to offer it. In fact, with the right policy mix, China can achieve reasonably good growth in the second half of 2021 and beyond.

Yu Yongding is the former president of the Chinese Society for World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences. He was a member of the Monetary Policy Committee of the People’s Bank of China from 2004 to 2006. Translation: Andreas Hubig.

Copyright: Project Syndicate, 2021.
www.project-syndicate.org

Outing with a group photo: The ladies in the picture on the left have their best side photographed in front of the newly opened Universal Studios amusement park. In the Beijing suburb of Tongzhou, Harry Potter, Kung Fu Panda and the Minions will soon be inviting visitors to the world’s largest Universal amusement park. So far, it is only open to invited VIPs. But as early as September 20, up to 18 security gates are expected to handle the massive crowds expected. It is not yet clear whether only those who have been tested, vaccinated or recovered will be allowed to purchase tickets. Most recently, the People’s Republic had reported only isolated new Covid infections in the country.

CHINA.TABLE EDITORIAL OFFICE

Amelie
Richter

Marcel
Grzanna

Fabian
Peltsch

Julia
Fiedler

Angela
Köckritz

Jörn
Petring

Dear reader,

A new hand of cards is being dealt. The fact that the German federal election is just a few weeks away has also been an urgent topic for Chinese entrepreneurs for some time, made evident by a question from the head of a large Beijing agency. When Annalena Baerbock was chosen as her party’s candidate for chancellor’s office, he was seeking Chinese voices abroad. He wanted to know what impacts a change in the Greens Parties’ China policy could have on German-Chinese business trade relations. What Baerbock means when she talks about “strategic sovereignty instead of decoupling” in our interview with Felix Lee makes one thing clear: the tone is getting rougher. And the Green Party leader wants to put “China high on the political agenda.”

No, it is not a script for a science fiction movie. Utopia becomes reality: China wants to beam solar energy straight from space. Frank Sieren investigated how this could work and what foundations have already been laid. The base station for a future orbital solar power plant is set for construction this year. The plans were already laid out back in 2008 in the then five-year plan.

Beijing’s zero-covid strategy is a risk. Not only for tourism, but above all for economic growth. In his China.Table guest article, Economist Yu Yongding also blamed “official policies” for the slow growth. Yu is the director of the Institute of World Economy and Politics at the Chinese Academy of Social Sciences in Beijing, one of the most important academic research institutions – his words provide insight into behind-the-scenes discussions among leading economists.

Your
Ning Wang

“China must be high on the political agenda”

What is your priority: clear words on human rights or frictionless trade?

In the fight against the climate crisis, there is no way around cooperation with China. At the same time, a modern trade policy cannot be pursued in isolation from the issue of human rights. What is smooth about trade if it violates human rights and destroys the environment and climate? This also means not always addressing human rights pro forma and ducking out of the way when it comes to money. Instead, we should use the power of our European internal market to protect European values.

Current trade relations with China disregard forced labour and the serious human rights violations against the Uighurs in Xinjiang, for example. However, we can put a stop to this – goods from forced labour would then not be given access to the EU’s internal market. However, with regard to fair market access for foreign investment, legal certainty and a level playing field, there is still much to be done in European-Chinese trade relations.

What do you think about globalization and the free flow of goods? Do you think the regions of the world should decouple economically?

Globalisierung hat vielen Menschen Wohlstand und Entwicklung gebracht. Gleichzeitig brauchen wir in der globalisierten Welt klare Regeln, die Ungleichheit verringern sowie Menschenrechte und unsere Lebensgrundlagen schützen. Von wirtschaftlicher Entkoppelung oder Protektionismus halte ich nichts. China ist eine so große aufstrebende Wirtschaftskraft, dass wir uns nicht von diesem Land abschotten können. Aber wir dürfen uns natürlich nicht von einem autoritären Regime abhängig machen, das auch mit unlauteren Wirtschaftsmethoden arbeitet.

We need a different China policy that looks at all sensitive economic sectors and draws its strength from the combined strength of the European Union. We Europeans can define for ourselves which products enter our market and which investments, especially in critical infrastructure, we allow. And we can decide to diversify our supply chains – for example with like-minded countries in the Indo-Pacific – to reduce dependence on China. This is not decoupling, but strategic sovereignty.

In general, how important is China on your agenda compared to the EU, the US, Russia and the Global South?

We are currently experiencing a competition of systems – liberal democracies versus authoritarian powers like China. With its aggressive power politics, the Chinese leadership is presenting the international community with a major challenge. It is forcing many states into economic dependency and thus also into political dependency, is also acting increasingly aggressively in military terms, as in the South China Sea, is violating the constitutional principle of “one country, two systems” in Hong Kong and is putting Taiwan under massive pressure. At the same time, we must cooperate with China and other authoritarian regimes on the major issues facing humanity, such as the climate crisis.

Dealing with the People’s Republic must therefore be high on the political agenda. A unified European policy is crucial if the EU does not want to be ground down in the geopolitical structure with China. Going it alone, as we have seen from the German Government in recent years, weakens Europe’s position vis-à-vis China. That makes it all the more important that we also work closely with the United States on China policy. The transatlantic partnership remains a central pillar of German foreign policy.

Solar power from space

By

Frank Sieren

China wants to build a space solar power plant that is able to convert microwaves transmitted from space into electricity at high speed. The construction of a 15.4 million US dollar base station in the suburban district of Bishan in the metropolis of Chongqing is to be completed by the end of the year. It would be the first of its kind. Further testing with helium tethered balloons is also scheduled for this year to verify the reception of the rays and the reconversion at a height of 300 meters. The project is largely pushed by Chongqing University in southwest China. The groundwork for the test facility in Bishan was laid three years ago.

If this technology proves to be feasible and financially viable, the project will head to space in 2030 with a small test station with an output of one megawatt. By 2049, a solar power plant in orbit with a total capacity of one gigawatt will generate power from the sun. That is more than the capacity of the world’s largest nuclear power plant at present.

24 hours of sun in space

Unlike on Earth, a solar plant in space would be independent of times of day and weather-related fluctuations. The power plant is to be positioned at an altitude of 36,000 kilometers in geostationary orbit, i.e. always above a fixed point on Earth. From this altitude, the station would be able to avoid the shadow of the Earth. It would then be able to supply power from space 24 hours a day. The utilization rate would increase sixfold compared to an installation on the Earth’s surface.

Since the 1960s, scientists have been fascinated by the idea of Austrian-American inventor Nikola Tesla to intercept solar power directly from space. In China, too, the implementation of its own orbital solar power plant was considered as early as 2008 in the 12th Five-Year Plan. However, plans were put on hold several times. The implementation was deemed too costly and its efficiency questionable. As a result of China’s increased presence in space and Beijing’s climate goals to make the country climate-neutral by 2060, the project is now back in focus.

Space solar power plant: enormous technical requirements

However, the technical challenges are still tremendous. Tesla theorized that electricity would spread like waves in all directions in the air. However, to increase the effective range, the energy needs to be concentrated into a highly focused beam. The energy loss in the atmosphere could also be reduced to a minimum of two percent by emitting electricity in the form of high-frequency microwaves. But this is extremely complicated.

In Bishan, the Chinese researchers need to prove that such wireless energy transmission is also possible over long distances. So far, they have succeeded in using this technology to transmit electricity in a targeted and bound manner from a balloon 300 meters above ground. Once the test station is completed, the next step will be 20 kilometers, which is the distance of an energy transfer from the stratosphere. In parallel, the researchers in Bishan will experiment with several alternative applications of this technology, such as powering drones through such an energy beam.

The California Institute of Technology is currently working on a similar project. As part of the “Space-based Solar Power Project” (SBSP), Caltech researchers have already developed corresponding prototypes that are to be tested in orbit in 2023. The satellite is equipped with a solar sail measuring about four square meters and is intended to demonstrate energy transmission. However, a corresponding ground station – which is considered the greater technological challenge – is still missing. Something the Chongqing researchers already have.

No clear plan in the US

But only China is specifically pushing this program. The Chinese government is also providing funds. Meanwhile, Billionaire Donald Bren and his wife have donated 100 million US dollars to the project in California. NASA canceled a similar project years ago. “The United States lacks a clear plan for SBSP and is dangerously at risk of falling behind its competitors.,” the American SpaceNews magazine recently wrote.

But in recent years, the US military has become increasingly interested in the idea of solar power from space. The US Air Force now plans to send out satellites in the next two to three years to test the technology for transmitting power. Potential applications would include powering drones or supplying electricity to remote military outposts. It’s possible that solar power plants in space could power space stations and satellites, as well as permanent lunar stations. However, it is not clear how far this project has progressed.

Power for the space-power China

China is now considered the largest space-power on Earth, second only to the USA, although the People’s Republic only began serious investment in space travel relatively late (China.Table reported). In 2020, China spent a total of 7.5 billion euros on space travel, three times as much as at the beginning of the millennium. Beijing has already sent ten men and two women to space. In late 2020, the Chinese space probe Chang’e 5 landed on the moon to take rock samples. In May 2021, China was able to set down the rover Zhurong on Mars. And in June, the new Tiangong space station was christened (China.Table reported). In 2024, a space telescope is expected to dock with the space station. And another Mars mission is planned for 2028. With that, China would have finally overtaken NASA and ESA. Power generation from space could become a key technology.

Tutoring industry: becoming non-profit before the end of the year

The Ministry of Education has set a deadline for China’s tutoring industry. By the end of the year, institutions offering curriculum-related tutoring must have registered as non-profit organizations (China.Table reported). The measure comes in the wake of orders issued by Beijing’s education commission in August to several executives of tutoring providers to revise their business models, according to business magazine Caixin. According to the report, education-related companies should switch to tutoring for high schools, vocational training, lifelong education and other fields.

In addition, tutoring providers whose services are curriculum-based will not be allowed to accept new students or charge tuition until their registration as a nonprofit organization is completed, according to the Ministry of Education, the Ministry of Civil Affairs, and the State Administration for Market Regulation (SAMR). niw

Great Wall Motors: cars for Germany

Chinese carmaker Great Wall Motors is planning to enter the German market with electric models. The company is currently presenting a model from its electric subsidiary Ora and a vehicle from its premium brand Wey at the IAA Mobility in Munich, which should be available to order by the end of the year. The Ora Cat compact model and the Wey Coffee 01 plug-in hybrid are scheduled for shipment during the first half of 2022, Great Wall announced at the IAA. However, both names are project names and may still change.

According to the company, the Ora Cat is equipped with batteries by Chinese manufacturer CATL and is said to have a range of 300 to 400 kilometers, depending on car configuration. The cheapest model is said to be available for as little as 30,000 euros – a price for which you barely get a compact electric vehicle from established German brands. Like most Chinese electric cars, the Ora Cat is equipped with latest technological gimmicks and driving assistance systems, including large displays in the cockpit, cameras for facial recognition inside the vehicle, and sensors used for highways and a parking assistant. The Ora Cat will also be marketed in other European countries.

The Wey Coffee 01, which will initially only be available in Germany. It is equipped with a two-liter combustible engine and two electric motors. In early 2022, Great Wall also plans to open a so-called Wey brand experience center in Munich, which will offer its mobility and ecosystem services. More locations with this concept are also planned for a later date.

In general, only a handful of Chinese manufacturers are present at IAA Mobility this year. Besides Great Wall Motor, the small Chinese group includes electric startup Xpeng and Volvo’s Chinese-Swedish subsidiary Polestar. ck

Michel: EU must find its own way in China policy

According to EU Council President Charles Michel, the European Union must find its own path in China policy and not take sides in the rivalry between the US and the People’s Republic . “There is no doubt that we share the same democratic values and the same political model as the United States. At the same time, we – as Europeans – must develop our own strategy towards China as a world power,” Michel said in an interview with the French think tank Groupe d’études géopolitique. In recent months, therefore, attempts have been made within the framework of the European Council “to identify the way we deal with China,” Michel said.

According to Michel, the EU strategy contains three elements. The first is the “very firm and very strict” enforcement of standards in the field of human rights, for example with regard to Hong Kong or the situation of the Uyghurs. Secondly, Michel mentioned the freedom to tackle multilateral issues “where we think dialogue is necessary”, for example the Corona pandemic or climate protection. On trade and the economy, the third point was that relations needed to be real igned, the EU Council President said.

According to Michel, the CAI investment agreement had been a first step towards realigning access to the respective markets. However, work on the CAI in the European Parliament is still suspended after the summer break. The EU Parliament is expected to vote on its draft reorientation of China policy next week (China.Table reported). The agenda for the upcoming plenary week will be announced today, Thursday. The paper reiterates calls for the People’s Republic to drop sanctions against several EU parliamentarians before MEPs revisit the agreement. ari

Protest against US warship at Mischief Reef

China has protested the course of the US destroyer USS Benfold into waters surrounding the Beijing-controlled Mischief Reef in the South China Sea. The voyage is said to happen without Beijing’s consent. The Chinese military’s Southern Command has therefore organized “air and naval forces to track, monitor and expel” the destroyer, the South China Morning Post reported.

Only a few days ago, a new Chinese law came into force that requires all ships entering waters that Beijing considers territorial waters to register in advance. China counts the maritime area around Mischief Reef among these territorial waters – though it is also claimed by the Philippines, Vietnam and Taiwan. It is possible that the US is deliberately putting the new law to the test. The US Department of Defense last week called it a “serious threat” to freedom of navigation and commerce.

China, meanwhile, claims virtually the entire South China Sea as its territory. Neither the US nor its allies, including Germany, recognize these claims – nor the claims of a territorial twelve-mile zone around man-made reefs. Even Admiral Kay-Achim Schönbach, inspector of the German Navy, recently affirmed that he does not recognize any territorial waters around such artificial islands.

The German frigate “Bayern” is also currently en route to the Indo-Pacific. It is expected to pass through the South China Sea on the way back from its mission. Unlike the U.S. Navy, however, the frigate will always stay “far away” from disputed waters, according to Schönbach. “We will stick to usual trade routes where anyone is allowed to sail”. The U.S., on the other hand, has been conducting freedom of navigation exercises in such waters on and off for some time. Still, Schönbach made it clear that Germany does not support China’s policy of building up reefs or atolls into islands and then declaring the surrounding waters as territory. Whether the frigate “Bayern” will also pay a visit to China is still unclear. Beijing had demanded more information about the nature of its mission in early August before deciding whether to grant permission for a port visit to Shanghai (China Table reported). ck

UK reviews acquisition of graphene producer

The UK has ordered a review of the takeover of a graphene manufacturer by a Chinese academic. UK Business Secretary Kwasi Kwarteng has ordered the Competition and Markets Authority (CMA) to investigate the proposed takeover of the small Perpetuus Group by Taurus International or other companies with ties to Chinese academic Zhongfu Zhou, The Guardian reported on Wednesday. Kwarteng has ordered the review “for reasons of national security.”

Perpetuus produces graphene and carbon nanotubes – preliminary products of small size hoped to find suitable applications in a range of industries, including electronics, defense technology and medicine. The materials are exceptional electrical conductors and are potentially stronger than steel. The UK Department for Business has concerns about the impact of the acquisition, according to the report. While Perpetuus has only 14 employees, the company supplies “at least a quarter” of all graphene plasma goods in the UK.

Taurus International, the company showing interest, was only registered in London in October 2020, The Guardian reported. Chinese academic Dr. Zhongfu Zhou is listed on the company’s website as a senior nanotechnology scientist. Little is known about the terms of the proposed takeover deal. According to the Guardian, CMA now has until February next year to submit its results.

The British government had recently had a number of potential company acquisitions reviewed due to possible national security implications. In July, Prime Minister Boris Johnson called on the authorities to review Nexperia’s purchase of Welsh chipmaker Newport Wafer Fab (China.Table reported). Takeover bids for aerospace and defense manufacturers Meggitt and Ultra Electronics are also currently under review. ari

Report: Chinese disinformation campaign in the USA

China has deliberately exploited divided opinions in the US over the Covid pandemic, according to cybersecurity firm Mandiant and Google experts. With the help of online attacks, disinformation and fake accounts, the Chinese government even tried to mobilize protesters, CNN reported on Wednesday, citing the experts’ report.

The operation, which originally sought to discredit pro-democracy protests in Hong Kong in 2019, has expanded into a “global campaign running in seven languages, on at least 30 social media platforms and over 40 websites and forums,” according to the blog of Fire Eye, the owner of Mandiant. It also claims parallels to the Russian disinformation campaign surrounding the 2016 presidential election.

US officials believed the operation was linked to the Chinese government, CNN reports, citing an anonymous source. According to the report, officials were monitoring whether it was used to spread disinformation during the November 2020 presidential election. They ultimately concluded that the Chinese government avoided doing so because it did not want to provoke a reaction. Months later, experts have observed an “explosion of activity” around the world, John Hulquist, vice president of Mandiant Threat Intelligence, told CNN. The attempts to incite physical protests in the US show that the operation poses a “very serious threat.”

Since the start of the Covid pandemic, cyber espionage and disinformation campaigns by China have increased, according to CNN. Beijing has tried to sway the global Covid narrative in its favor, with Chinese officials also openly spreading false and misleading information about the virus and its origins. But there were apparently just as many covert methods. “Over the past two years, we have seen this threat actor evolve, from the types of content they publish to the tactics they use to amplify it,” CNN quotes Shane Huntley, Director of Google’s Threat Analysis Group.

In April, for example, experts discovered thousands of fake social media accounts calling on Asian Americans to protest racial injustice in the U.S. and “disinformation about the origins of the virus,” according to the Mandiant report. However, no such protests took place. niw/ck

The Pandemic’s Impact on China’s Growth Prospects

By Yu Yongding

In the second quarter of 2021, China’s GDP grew by 7.9% year on year. That was a relatively strong performance, especially given the enduring effects of the COVID-19 pandemic on the global economy. But, for China, it represents a disappointment: a Caixin survey of economists showed the median estimate for the second quarter was 8.2% growth.

Chinese economists broadly agree that China’s potential growth rate is 6%. So, taking into consideration the base effect, China’s year-on-year growth rate in the four quarters of 2021 should be 19.1%, 8.3%, 6.7%, and 5.5%. Yet, in the first quarter, growth amounted to 18.3%. This weaker-than-expected performance is, to a significant extent, a result of official policy.

While Chinese authorities implemented expansionary fiscal and monetary policy early in the pandemic, they proved eager to normalize it, for fear that it would fuel inflation and compound financial risks. Fiscal retrenchment has been particularly rapid. In the first half of 2021, China’s general government expenditures increased by only 4.5%, while revenues increased by 21.8%. Though this partly reflects the base effect, policy was undeniably tightened. In fact, in the first half of 2021, China’s public budget deficit was CN¥1.6 trillion ($247 billion) smaller than in 2020.

China: Growth is slowing down

Monetary policy has remained accommodative, but the People’s Bank of China (PBOC) has been cautious, to say the least. In the first half of 2021, social financing rose by CN¥17.7 trillion. That increase is CN¥3.1 trillion smaller than the figure for the same period of 2020. Against this background, it should not be surprising that economic indicators are increasingly pointing to a slowdown in Chinese growth.

China’s leaders are now moving to redress the slowdown. Early last month, the PBOC, hoping to spur an increase in lending, announced that it would cut the mandatory reserve ratio for all banks by 50 basis points.

A few weeks later, the Political Bureau of the Communist Party of China Central Committee released a communiqué acknowledging that “China’s domestic economy is still unstable and unbalanced,” and calling for accelerating “the construction of major projects planned in the 14th Five-Year Plan.” The market has widely interpreted this as a signal that the government will implement more expansionary macroeconomic policy in the second half of this year.

Covid pandemic slows China’s economic recovery

Such a policy adjustment, though still marginal, has raised hopes that growth will pick up in the second half of 2021, potentially even reaching a level consistent with the potential growth rate. But a policy change might not be enough. Instead, China’s economic recovery may well depend, above all, on how the fight against COVID-19 unfolds.

Since lifting the lockdown in Wuhan in early April 2020, China has managed to prevent any major local outbreaks and to keep the number of new daily confirmed COVID cases in the low double digits. Many people believed that China was on its way to eliminating local coronavirus infections altogether.

Those hopes were dashed last month, when several airport workers in Nanjing tested positive during routine screening. Within days, the highly transmissible Delta variant had spread to 22 cities in ten provinces. Total confirmed cases in China surged from 251 on July 16 to around 2,000.

Doubts about Beijing’s zero-covid strategy

The government, still committed to getting infections to zero, responded swiftly, locking down high-risk areas, tightening travel restrictions on medium-risk areas, and quarantining around 100,000 people. But similar situations have occurred before, albeit on a smaller scale. And with much of the world still not vaccinated, and increasingly transmissible virus variants emerging, they will undoubtedly happen again.

The economic costs of such lockdowns – including restrictions on international travel – are extremely high. Given this, some virologists, epidemiologists, and economists now argue that China needs to move away from its zero-tolerance policy and learn to live with the virus.

But resistance to this approach remains strong. After all, China’s strict approach – enabled by its institutional arrangements and cultural tradition – has kept the country virtually COVID-free for several months. And while the costs are high, especially for tourism and travel-related services, China can afford them.

Vaccination rate is still too low

More importantly, China has some way to go in vaccinating its population. While it has so far administered 1.9 billion vaccine doses – mostly of its own Sinovac and Sinopharm vaccines, both of which require two doses – it will need to vaccinate more than 83% of its population before herd immunity is reached, according to its top epidemiologist, Zhong Nanshan.

Moreover, given questions about the long-term efficacy of the vaccines currently being administered, more time might be needed to provide booster shots or develop more effective alternatives. And even if China did manage to inoculate a large enough share of its population with effective vaccines, it exists in a globalized world, where many countries have very low vaccination rates.

It is safe to say that the fight against COVID-19 is far from over. For China, this means that more small-scale coronavirus outbreaks – with the associated economic disruptions – are all but inevitable. Given this, it is very likely that China’s total growth in 2021 will fall short of previous market expectations.

This is not to downplay the importance of fiscal and monetary policy. A more expansionary approach could go a long way toward offsetting the pandemic’s economic impact. In particular, many small and medium-size companies that have been hit hard by the pandemic need help badly, and the government still has policy room to offer it. In fact, with the right policy mix, China can achieve reasonably good growth in the second half of 2021 and beyond.

Yu Yongding is the former president of the Chinese Society for World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences. He was a member of the Monetary Policy Committee of the People’s Bank of China from 2004 to 2006. Translation: Andreas Hubig.

Outing with a group photo: The ladies in the picture on the left have their best side photographed in front of the newly opened Universal Studios amusement park. In the Beijing suburb of Tongzhou, Harry Potter, Kung Fu Panda and the Minions will soon be inviting visitors to the world’s largest Universal amusement park. So far, it is only open to invited VIPs. But as early as September 20, up to 18 security gates are expected to handle the massive crowds expected. It is not yet clear whether only those who have been tested, vaccinated or recovered will be allowed to purchase tickets. Most recently, the People’s Republic had reported only isolated new Covid infections in the country.

CHINA.TABLE EDITORIAL OFFICE

Amelie
Richter

Marcel
Grzanna

Fabian
Peltsch

Julia
Fiedler

Angela
Köckritz

Jörn
Petring

Feature

“China must be high on the political agenda”

Solar power from space

24 hours of sun in space

Space solar power plant: enormous technical requirements

No clear plan in the US

Power for the space-power China

News

Tutoring industry: becoming non-profit before the end of the year

Great Wall Motors: cars for Germany

Michel: EU must find its own way in China policy

Protest against US warship at Mischief Reef

UK reviews acquisition of graphene producer

Report: Chinese disinformation campaign in the USA

Opinion

The Pandemic’s Impact on China’s Growth Prospects

China: Growth is slowing down

Covid pandemic slows China’s economic recovery

Doubts about Beijing’s zero-covid strategy

Vaccination rate is still too low

Executive Moves

Dessert

China.Table Editors

CHINA.TABLE EDITORIAL OFFICE

Feature

“China must be high on the political agenda”

Solar power from space

24 hours of sun in space

Space solar power plant: enormous technical requirements

No clear plan in the US

Power for the space-power China

News

Tutoring industry: becoming non-profit before the end of the year

Great Wall Motors: cars for Germany

Michel: EU must find its own way in China policy

Protest against US warship at Mischief Reef

UK reviews acquisition of graphene producer

Report: Chinese disinformation campaign in the USA

Opinion

The Pandemic’s Impact on China’s Growth Prospects

China: Growth is slowing down

Covid pandemic slows China’s economic recovery

Doubts about Beijing’s zero-covid strategy

Vaccination rate is still too low

Executive Moves

Dessert

China.Table Editors

CHINA.TABLE EDITORIAL OFFICE

Sign up now and continue reading immediately