Table.Briefing: China

Interview Johannes Hack + German delegation in Taiwan + Islam in China

  • Johannes Hack: ‘China is raising the walls higher and higher’
  • German MPs visit Taiwan
  • Muslim culture under pressure
  • Indonesia approves Chinese mRNA vaccine
  • Chamber of commerce sees downturn in sentiment
  • Real estate tax incentives
  • Heads: Philipp Bilsky of Deutsche Welle
Dear reader,

Delegation trips to Taiwan are gaining significance these days. Although they are purely routine, there have been 102 such delegations since 2016. And yet they are something special, since their purpose is to strengthen the position of increasingly threatened Taiwan. Beijing’s overreaction to the visit by US Representative Nancy Pelosi in August highlights their significance.

Until Thursday, members of the German parliament from the “Berlin-Taipei Circle of Friends” are visiting the island. David Demes analyzes how a quote by the head of the delegation, Klaus-Peter Willsch, has made an international splash thanks to a tweaked translation – in the translator’s version, he pledges even more assistance to Taiwan than intended.

The eight delegates hold the usual meetings with business, politics and society. But important is that this marks the end of the two-and-a-half-year Covid break for German parliamentary visits to Taiwan. The government in Taipei will not have to wait long for the next visit from Germany. At the end of the month, the Committee on Human Rights and Humanitarian Aid will send another delegation.

Johannes Hack, President of the German Chamber of Commerce Hong Kong, speaks with Ning Wang about the mood of German companies in Hong Kong in today’s interview. The new Chief Executive, John Lee, scored big points with them thanks to the recent relaxation of entry regulations. But at the same time, the city is feeling the strain of Mainland China’s ever-higher walls. Sitting in Hong Kong and doing business in China – this formula no longer works as it used to.

Meanwhile, reports of an emergency approval by Indonesia for a Chinese mRNA vaccine raise new questions. If China has a market-ready vaccine, why doesn’t it approve it for itself? If the substance is not yet ready for use, why is Indonesia approving it, even though it is supplied with Biontech and Moderna? Even if China struggles with the approval of mRNA drugs, once a vaccine has proven its efficacy and safety, it should be used. That is, if ending zero-Covid is indeed the goal.

Today we also present the analysis on Islam in China, which was originally scheduled for Friday. We apologize for the delay.

Your
Finn Mayer-Kuckuk
Image of Finn  Mayer-Kuckuk

Interview

‘There are still people who want to move to Hong Kong’

Johannes Hack is President of the German Chamber of Commerce Hong Kong

Mr. Hack, the new head of Hong Kong’s government, John Lee, is so far very reluctant to comment on the city’s future. Why is that?

If I interpret it positively, he is actually still trying to find the balance between the official line and a way of approaching the collective Western industry here. On the one hand, you could say two and a half months is insanely long for hardly anything to have happened. On the other hand, he has already done things to improve the business environment. One example: the hotel quarantine is now completely abolished. And the government claims that it has not backed down on any issue – and that’s true. Because the old government said we’re going to do one week of quarantine, and then it was three weeks. Under John Lee, regarding the Covid measures, there were: Relaxations, relaxations, relaxations.

But Hong Kong as a business location has not only lost its attractiveness because of Covid?

The membership number of the Hong Kong Chamber has not decreased, but increased. We have gained about twenty companies since the beginning of the year. These are companies that also have business operations here and with whom we communicate. At the moment, you cannot tell from the number of companies that the business location is less attractive. There are still people who want to move to Hong Kong, not just those who are leaving. What we notice is that we very clearly saw in March, April that families packed their bags and left. The period from February to April was extraordinarily difficult here.

A uniform roadmap to track Covid measures, as the chambers of commerce have called for, still does not exist?

No, the so-called road map with truly clearly defined points, which we have repeatedly called for, has still not been drawn up, but what we can see is that things are moving in one direction. The understanding of the Hong Kong government of where things have to go is there. But it is very difficult, because it also has to be followed by Mainland China. For us, the most important thing is commitment, which allows us to plan better.

What will happen next?

If we look ahead and take a time frame of three years, our perception is that Mainland China is just raising the walls that it has built around itself. Whether it’s visa availability, flights, and generally the openness of the country. Our perception is that it’s getting tighter and more difficult. In absolute terms, Hong Kong is still miles away from that. And that’s why it’s easy to imagine a state where people are doing business in and out of Hong Kong with Mainland China and traveling there and doing their business. To use the words of a Hong Kong minister: Hong Kong will be China’s international city.

To what extent does Hong Kong still play a role as an international financial metropolis?

China has tight capital controls. This hurdle will not disappear. To see Shanghai and Shenzhen as competition from Hong Kong misses the point. Only through Hong Kong can the transmission mechanism of capital be kept running. Finance is a very big issue for Hong Kong. The financial industry includes not only banks, but also insurance companies and funds. The fact that the population in China, for example, is aging very rapidly means that there is plenty of room for the Americans and British to sell financial products such as pension funds to the Chinese market through Hong Kong. The British, who are well positioned in the Hong Kong financial industry, for example, anticipate that they engage in a very different dialogue about Hong Kong’s role than the German industry does.

What dialogue is German industry engaged in and what is important to it?

While it is great for us to be here in the international financial center, that is not the only thing that counts. We keep trying to remind the government that the German economy has other concerns here. Especially many companies that are based in Hong Kong and procure goods from China are under pressure.

How so?

For example, the procurement departments of major German retailers. They are wondering how they can continue their sourcing business if they are currently unable to travel to mainland China due to the acute Covid problems. In Bangkok and Singapore, trade fairs have long been possible again and they can exhibit their goods. Another issue is also to open up to Mainland China from Hong Kong. This is because many goods still need to be inspected locally at the factory. If traveling out of Hong Kong to China remains so difficult for foreigners, then the question certainly arises, what exactly do you actually do in Hong Kong?

And what distinguishes Hong Kong?

Hong Kong is important wherever we are talking about trade, export and import of goods that cross the Chinese border. These are, of course, aspects where Hong Kong has a special role because you can do a lot of things differently here in goods and capital movements than you can do from Mainland China.

How do the relevant authorities react?

Things started to slowly trickle through. Together with several chambers, we had a discussion with the liaison office earlier this year. Our contacts asked directly: What is the problem? And if you listen to the ideas now, there is talk of Hong Kong as a global financial, shipping and trading center and a transportation hub. It has been recognized that finance alone will not make Hong Kong happy.

However, “red lines” do seem to increasingly define the lives not only of the people of Hong Kong, but also of local expats.

I think as far as perception goes, and as we all keep reminding ourselves here in Hong Kong: People tend to perceive acceleration very differently than speed. In other words, in Beijing, Shanghai and Shenzhen, all the “red lines” have been there for ten years, and people there haven’t noticed them at all. The lockdown in Shanghai has changed that. People have once again been shown exactly where they live.

What is creating so much friction here in Hong Kong at the moment is that we are in a process: first by the change in the law since June 30, 2020 (Editor’s note: the day the National Security Act was passed) and now, especially by Covid. We all notice this change of pace quite differently, and that is why it would be good to also look to the future and ask ourselves the question: if the whole thing has a year to settle, where do we actually stand? We shouldn’t take a snapshot and conclude that things are moving unchecked in the wrong direction right now. I think that’s too short-sighted.

Johannes Hack is President of the German Chamber of Commerce in Hong Kong and is thus very familiar with the concerns of German companies on the ground. Hack has lived in the southern Chinese metropolis since 2018. The chamber has more than 400 members – German companies, associations and individuals. Hack’s main job is as head of DZ Bank in Hong Kong; he gave the interview in his role as chamber president.

  • Coronavirus
  • Health
  • Hongkong
  • John Lee
  • National Security Act
  • Trade

Feature

Presence in Taiwan – and a spiced-up quote

Added in Translation: the statement of a German deputy received unintended gravity.

Since Sunday morning, a delegation of the German-Taiwan Parliamentary Friendship Group has been on a visit to Taiwan. This parliamentary group is dedicated to exchange with Taiwan. The focus of the five-day trip will be on economic and social issues, as well as the tense security situation in the region. China, as expected, criticized the visit and urged members of the German parliament not to send “wrong signals” to “separatist forces” on the island. The demand was to immediately stop the delegation’s trip.

The head of the delegation, Klaus-Peter Willsch, dismissed Chinese criticism at a reception at the presidential office in Taipei on Monday. “We noticed that not everyone likes the fact that we are here this week, but we don’t care about that,” the conservative politician said. Elsewhere, he spoke of “complete overreaction by a nervous dictatorship.” The German Bundestag, he said, decides for itself on its relations with friendly parliaments. Willsch also emphasized the importance of Taiwan’s semiconductor industry for the German economy, saying it was crucial for digitization.

The delegation was welcomed on Monday morning by both President Tsai Ing-wen (蔡英文) and Vice President Lai Ching-te (賴清德). In her welcoming remarks, Tsai thanked the German government for its support. Following the Chinese military maneuvers in early August, Berlin, in its role as G7 chair, had issued a joint statement with G7 foreign ministers to preserve peace in the Taiwan Strait.

An explicit translation

Willsch mentioned the war in Ukraine, in which a large country invaded a smaller neighbor and tried to “impose its political will on it by military force.” The Bundestag repeatedly emphasized in debates that China’s military threats against Taiwan are unacceptable, said the chairman of the Parliamentary Friendship Group.

A tweaked version of Willsch‘s quote made international headlines. In the Chinese translation by the interpreter hired by the German side, he said, “We will bravely stand up to assist and support Taiwan if it faces such military threats.” (如果台灣收到武力的威脅,我們也會勇敢地站出來協助台灣、支援台灣。) It made its way to many national and international media channels via a report by Taiwan’s CNA news agency. Even the Russian state news agency RIA Novosti published the alleged Willsch quote.

Willsch’s original statement largely echoed the speech by German Foreign Minister Annalena Baerbock to the United Nations in early August, in which she indirectly warned China not to escalate the situation in the Taiwan Strait. In fact, Willsch’s statement, which he never said this way, is not more explicit than that of the foreign minister. This may also be the reason why the German Institute Taipei City never released a correction. In a Facebook post by the Taiwanese president, the term “provide assistance” (支援) was eventually changed to “support” (支持).

The Legislative Yuan revives its Germany group

Vice President Lai Ching-te expressed hope that Germany would include Taiwan in discussions on a new national security strategy and China policy, according to CNA.

In addition to Willsch, the delegation also includes

  • Katrin Budde (SPD),
  • Till Steffen (Greens),
  • Rainer Kraft (AfD),
  • Caren Lay (Left Party) and
  • Frank Schaeffler (FDP).

On Sunday evening, the deputies had already met with their counterparts from the Taiwanese-German Friendship Group in the Legislative Yuan, Taiwan’s parliament. The group, which currently has 41 members, had only recently reconstituted itself. In addition to Chairman Chang Hung-lu (張宏陸) from the ruling DPP faction, members of the opposition also took part, including representatives of the KMT. Taiwan’s representative in Germany, Shieh Jhy-Wey, joined the delegation and also attended the dinner. David Demes

  • Germany
  • Military

Islam with Chinese characteristics

.
Worshippers in Beijing’s predominantly Muslim Niujie neighborhood.

On online travel platforms, the Nanguan Mosque is still advertised as a tourist attraction. And indeed, the building in the pictures looks like a magnificent Islamic building: green domes, golden ornaments and several minarets, adorned with crescents at the top.

On this chilly September evening, however, the mosque in downtown Yinchuan is hardly recognizable: behind the barred entrance, all that can be made out is a plain functional building. All Arabic characters and decorative elements had been removed after a “renovation” shortly before the pandemic. Instead of minarets, the red flag of the People’s Republic of China now rises into the sky.

Hui minority in the focus of the authorities

When the media talk about Islam in China, they mostly report about the Muslim minority of the Uyghurs. The Turkic people, native to the Xinjiang region, are indeed brutally oppressed by the Chinese state for years. But far less well known is the fact that the majority of Muslims in the Middle Kingdom belong to a different ethnic group. The more than ten million Hui can hardly be distinguished from Han Chinese in their appearance. Both culturally and religiously, they are largely assimilated. Nevertheless, the Hui have increasingly come under the attention of the authorities in recent years.

This is nowhere more apparent than in the northwestern Chinese city of Yinchuan, where the Muslim minority accounts for a quarter of the population: Calls to prayer are banned because of “noise pollution,” and the Koran has been removed from stores.

And the cityscape has also changed permanently: The idyllic Aiyi River, which gently flows through the city of two million people, was unceremoniously renamed by the authorities in 2018 because of its “Arabic-sounding name”. As one expert from the local Ningxia University of Hui Studies explained to state media at the time, “Aiyi” would sound too much like “Aisha” – one of the five wives of the Prophet Muhammad – to Chinese ears. This, in turn, would violate the law: Back in 2013, the local government had decided that localities in Yinchuan must not be named after foreign individuals.

The boulevard – formerly built as the “Sino-Arab Axis” – was also renamed “Unity Street” in 2018. In the neighboring park, which was once intended to attract tourists from the Middle East, the authorities had torn down the giant crescent moon statue.

Religions threaten the system of rule

All of these measures are part of the “Sinicization of Religions” that President Xi Jinping called for in a keynote speech back in 2016: Islam in China must be “Chinese in orientation” and religions need to adapt to “socialist society,” the 69-year-old said at the time. On the one hand, his words indicate that Xi recognizes the existence of religious communities in principle, but must be controlled and regulated.

The slogan is not mere rhetoric, but highly political: The goal of the “Sinicization of Religions” is to ensure that even areas of society not directly under the control of the CP are effectively monitored. After all, in the eyes of the Party, religions are always a potential threat to the rule of the system, since they can serve as a breeding ground for opposition forces. Several historical examples prove this, such as the Catholic Church in communist Poland.

How “Sinicization” is implemented in 2022 was impressively demonstrated at the end of August. When the Catholic Patriotic Association – China’s state-sanctioned church – elected a new leadership in a vote in Wuhan, the bishops were promptly summoned to Beijing’s government quarter. While having tea with Wang Yan, a member of the Politburo Standing Committee, several ideological pledges of allegiance were wrung from them – including that it was “necessary” to follow “Xi Jinping Thought on Socialism with Chinese Characteristics”. Also, Wang, a senior Party cadre, demanded that the church actively help “fend off infiltration by foreign forces.”

Values of socialism instead of Arabic characters

The fact that the state comes first can also be observed in the Muslim Niujie district in Beijing. Here, too, all Arabic characters disappeared from the walls of the halal restaurants. Curved rafters still protrude from the facades of the houses. But instead of conveying a certain historic authenticity, all that remains is tourist kitsch.

And renovations are underway at the mosque. Construction workers have wrapped the entryway in plastic sheeting emblazoned with the “12 Core Values of Socialism” in Chinese characters propagated by Xi Jinping at the 18th Party Congress ten years ago – including “patriotism,” “democracy” and “justice”. Fabian Kretschmer

  • Civil Society
  • Culture
  • Human Rights
  • Religion
  • Society

News

China’s first mRNA vaccine receives approval – in Indonesia

China’s first mRNA COVID-19 vaccine received emergency approval in Indonesia. The vaccine, called AWcorna, received approval for people aged 18 years and above and may be used as an initial vaccine and as a booster vaccine. The vaccine is developed by Walvax Biotechnology, Suzhou Abogen Biosciences and the Chinese military, Bloomberg reports.

Walvax announced that the approval is based on ongoing phase 3 clinical trials. The head of Indonesia’s Food and Drug Administration stated that two doses of the vaccine would have a 71 percent efficacy rate against the Cmicron variant – comparable to Western vaccines. However, data is yet to be published. It is also still unclear how well the vaccine protects against severe infection. The vaccine is to be produced in Indonesia. Like Western mRNA vaccines, it is not yet approved in China. nib

  • Corona Vaccines
  • Coronavirus
  • Health

Chinese Chamber of Commerce sees poor sentiment

The Chinese Chamber of Commerce in the EU sees business sentiment at a low. An increasingly complicated political environment, new EU trade tools, and deteriorating public opinion of China are the main factors behind this, said the annual report by the Chinese Chamber of Commerce in Brussels (CCCEU) in collaboration with consultancy Roland Berger. The Chamber of Commerce also expressed concern about calls for decoupling and increasing protectionism.

According to the report, 150 Chinese companies in the EU were surveyed for the report. Around 53 percent of the companies surveyed said that the business environment deteriorated within the past year. This marked the third consecutive year of a downward trend in this area. 38 percent of respondents felt that a hostile political environment affected their business. Overall, 80 percent of respondents said geopolitical dynamics, the COVID-19 pandemic and supply chain disruptions have an increasingly negative effect on Chinese companies operating in the EU.

Among other things, the exclusion of telecom equipment maker Huawei from numerous markets is seen as isolation, according to the report. “The wall put up around the high-tech and telecom sectors in Europe is making matters difficult for Chinese enterprises operating in the EU,” the report said. Chinese companies expressed concern about the EU’s “unilateral economic and trade policy instruments,” including the 5G cybersecurity toolbox and increased screening of foreign direct investment.

However, Europe remains attractive to Chinese investors, according to the survey: 70 percent of companies believe that economic relations between the EU and China will improve again. 80 percent of respondents said the EU would become more important in their companies’ global strategy, with the majority planning to expand their presence throughout the industrial chain. ari


  • Mobile communications
  • Technology
  • Trade

Tax incentive for real estate purchase

China’s central government has passed a tax incentive for the purchase of residential real estate, Bloomberg reports. However, the tax rebate is very limited. Buyers will be eligible for an income tax rebate if they purchase a new property within a year after selling one. This was announced by the Ministry of Finance on Friday.

To stimulate the real estate sector, mortgage requirements are also being softened. The central government will permit selected cities to relax the requirements for first-time home buyers. Local banks will then be allowed to decide for themselves whether to maintain, lower or eliminate the lower limit on mortgage rates for first-time homebuyers until the end of the year. The Chinese central bank made the announcement late last week, Caixin reports. In addition, the central bank said it would provide special loans to speed up completion of delayed construction projects. According to Goldman Sachs analysts, however, further measures are needed to boost the real estate sector. nib

  • Finance
  • Loans
  • Real Estate
  • Taxes

Heads

Philipp Bilsky – German voice from Taipei

Philipp Bilsky is head of the Chinese service at Deutsche Welle.

“The office in Taipei was an important step for our editorial team,” says Philipp Bilsky. At Deutsche Welle, he is responsible for everything that is published in Chinese. The 45-year-old set up his editorial team’s first office in the Chinese-speaking world in Taipei. From 2018, he worked there for more than four years; meanwhile, he is back in Bonn. But hardly anything has changed about his day-to-day work, he says.

Five journalists currently work for Deutsche Welle in Taipei. A competitive advantage, says Bilsky: “Deutsche Welle was the first international media provider to open an office in Taipei.” From there, the reporters also report in English, shoot news reports and TV shows, and oversee Deutsche Welle’s Chinese online content.

Censorship of independent media

Other international media are mostly located in Mainland China. “Deutsche Welle also tried that for years without success,” Bilsky says. There was never any permission. Chinese reporting therefore comes from Taipei and Germany. For information from Beijing, Deutsche Welle also cooperates with the German public broadcaster ARD.

Deutsche Welle is subject to censorship in China. Anyone who wants to work as a media provider for a Chinese audience has only two options. Either, they report only in the interests of the Chinese government. “Or you don’t bow to censorship and report independently – then your website will be blocked in China,” Bilsky says. “For us to be dictated what we report and what we don’t report, that’s not an option for Deutsche Welle.” Because of censorship, he says, it is difficult to reach a broad audience in China. Those who want to access Deutsche Welle’s pages must use a VPN tunnel. “Those who come to us often already know us and know what they are looking for,” says Bilsky.

Criticism from all sides

Furthermore, it has become increasingly difficult to find interview partners on critical topics in recent years. “If someone does accept to be interviewed, we often only get statements that coincide with what is coming from the government side,” says Bilsky.

Deutsche Welle’s editorial staff includes people from Taiwan, Hong Kong and Mainland China. This is important to Bilsky. “That’s extremely helpful for the mix of topic selection.”

Criticism of the content always comes from different sides: “For some we are anti-Chinese, for others we are pro-Beijing.” Bilsky sees this as positive. Deutsche Welle wants to provide information so that everyone can form their own opinion. “If we are criticized from both sides, then we are probably doing quite well.” Jana Hemmersmeier

  • Censorship
  • Civil Society
  • Media
  • Taiwan

Executive Moves

Christian Straube is leaving the NGO Stiftung Asienhaus as of October 31. From the beginning of November, he will become a project manager at Stiftung Mercator, where he will continue to work on the topics of China and civil society dialogue with the People’s Republic (See Christian Straube’s China.Table profile).

Jing Wang is the new CEO of the Chinese securities joint venture of major bank Credit Suisse, effective immediately. He most recently served as head of Chinese onshore asset management at Credit Suisse.

Is something changing in your organization? Why not let us know at heads@table.media!

Dessert

On China’s National Day on October 1, this woman is clearly flying the flag. The Bund in Shanghai is already crowded at the beginning of the holiday week.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    • Johannes Hack: ‘China is raising the walls higher and higher’
    • German MPs visit Taiwan
    • Muslim culture under pressure
    • Indonesia approves Chinese mRNA vaccine
    • Chamber of commerce sees downturn in sentiment
    • Real estate tax incentives
    • Heads: Philipp Bilsky of Deutsche Welle
    Dear reader,

    Delegation trips to Taiwan are gaining significance these days. Although they are purely routine, there have been 102 such delegations since 2016. And yet they are something special, since their purpose is to strengthen the position of increasingly threatened Taiwan. Beijing’s overreaction to the visit by US Representative Nancy Pelosi in August highlights their significance.

    Until Thursday, members of the German parliament from the “Berlin-Taipei Circle of Friends” are visiting the island. David Demes analyzes how a quote by the head of the delegation, Klaus-Peter Willsch, has made an international splash thanks to a tweaked translation – in the translator’s version, he pledges even more assistance to Taiwan than intended.

    The eight delegates hold the usual meetings with business, politics and society. But important is that this marks the end of the two-and-a-half-year Covid break for German parliamentary visits to Taiwan. The government in Taipei will not have to wait long for the next visit from Germany. At the end of the month, the Committee on Human Rights and Humanitarian Aid will send another delegation.

    Johannes Hack, President of the German Chamber of Commerce Hong Kong, speaks with Ning Wang about the mood of German companies in Hong Kong in today’s interview. The new Chief Executive, John Lee, scored big points with them thanks to the recent relaxation of entry regulations. But at the same time, the city is feeling the strain of Mainland China’s ever-higher walls. Sitting in Hong Kong and doing business in China – this formula no longer works as it used to.

    Meanwhile, reports of an emergency approval by Indonesia for a Chinese mRNA vaccine raise new questions. If China has a market-ready vaccine, why doesn’t it approve it for itself? If the substance is not yet ready for use, why is Indonesia approving it, even though it is supplied with Biontech and Moderna? Even if China struggles with the approval of mRNA drugs, once a vaccine has proven its efficacy and safety, it should be used. That is, if ending zero-Covid is indeed the goal.

    Today we also present the analysis on Islam in China, which was originally scheduled for Friday. We apologize for the delay.

    Your
    Finn Mayer-Kuckuk
    Image of Finn  Mayer-Kuckuk

    Interview

    ‘There are still people who want to move to Hong Kong’

    Johannes Hack is President of the German Chamber of Commerce Hong Kong

    Mr. Hack, the new head of Hong Kong’s government, John Lee, is so far very reluctant to comment on the city’s future. Why is that?

    If I interpret it positively, he is actually still trying to find the balance between the official line and a way of approaching the collective Western industry here. On the one hand, you could say two and a half months is insanely long for hardly anything to have happened. On the other hand, he has already done things to improve the business environment. One example: the hotel quarantine is now completely abolished. And the government claims that it has not backed down on any issue – and that’s true. Because the old government said we’re going to do one week of quarantine, and then it was three weeks. Under John Lee, regarding the Covid measures, there were: Relaxations, relaxations, relaxations.

    But Hong Kong as a business location has not only lost its attractiveness because of Covid?

    The membership number of the Hong Kong Chamber has not decreased, but increased. We have gained about twenty companies since the beginning of the year. These are companies that also have business operations here and with whom we communicate. At the moment, you cannot tell from the number of companies that the business location is less attractive. There are still people who want to move to Hong Kong, not just those who are leaving. What we notice is that we very clearly saw in March, April that families packed their bags and left. The period from February to April was extraordinarily difficult here.

    A uniform roadmap to track Covid measures, as the chambers of commerce have called for, still does not exist?

    No, the so-called road map with truly clearly defined points, which we have repeatedly called for, has still not been drawn up, but what we can see is that things are moving in one direction. The understanding of the Hong Kong government of where things have to go is there. But it is very difficult, because it also has to be followed by Mainland China. For us, the most important thing is commitment, which allows us to plan better.

    What will happen next?

    If we look ahead and take a time frame of three years, our perception is that Mainland China is just raising the walls that it has built around itself. Whether it’s visa availability, flights, and generally the openness of the country. Our perception is that it’s getting tighter and more difficult. In absolute terms, Hong Kong is still miles away from that. And that’s why it’s easy to imagine a state where people are doing business in and out of Hong Kong with Mainland China and traveling there and doing their business. To use the words of a Hong Kong minister: Hong Kong will be China’s international city.

    To what extent does Hong Kong still play a role as an international financial metropolis?

    China has tight capital controls. This hurdle will not disappear. To see Shanghai and Shenzhen as competition from Hong Kong misses the point. Only through Hong Kong can the transmission mechanism of capital be kept running. Finance is a very big issue for Hong Kong. The financial industry includes not only banks, but also insurance companies and funds. The fact that the population in China, for example, is aging very rapidly means that there is plenty of room for the Americans and British to sell financial products such as pension funds to the Chinese market through Hong Kong. The British, who are well positioned in the Hong Kong financial industry, for example, anticipate that they engage in a very different dialogue about Hong Kong’s role than the German industry does.

    What dialogue is German industry engaged in and what is important to it?

    While it is great for us to be here in the international financial center, that is not the only thing that counts. We keep trying to remind the government that the German economy has other concerns here. Especially many companies that are based in Hong Kong and procure goods from China are under pressure.

    How so?

    For example, the procurement departments of major German retailers. They are wondering how they can continue their sourcing business if they are currently unable to travel to mainland China due to the acute Covid problems. In Bangkok and Singapore, trade fairs have long been possible again and they can exhibit their goods. Another issue is also to open up to Mainland China from Hong Kong. This is because many goods still need to be inspected locally at the factory. If traveling out of Hong Kong to China remains so difficult for foreigners, then the question certainly arises, what exactly do you actually do in Hong Kong?

    And what distinguishes Hong Kong?

    Hong Kong is important wherever we are talking about trade, export and import of goods that cross the Chinese border. These are, of course, aspects where Hong Kong has a special role because you can do a lot of things differently here in goods and capital movements than you can do from Mainland China.

    How do the relevant authorities react?

    Things started to slowly trickle through. Together with several chambers, we had a discussion with the liaison office earlier this year. Our contacts asked directly: What is the problem? And if you listen to the ideas now, there is talk of Hong Kong as a global financial, shipping and trading center and a transportation hub. It has been recognized that finance alone will not make Hong Kong happy.

    However, “red lines” do seem to increasingly define the lives not only of the people of Hong Kong, but also of local expats.

    I think as far as perception goes, and as we all keep reminding ourselves here in Hong Kong: People tend to perceive acceleration very differently than speed. In other words, in Beijing, Shanghai and Shenzhen, all the “red lines” have been there for ten years, and people there haven’t noticed them at all. The lockdown in Shanghai has changed that. People have once again been shown exactly where they live.

    What is creating so much friction here in Hong Kong at the moment is that we are in a process: first by the change in the law since June 30, 2020 (Editor’s note: the day the National Security Act was passed) and now, especially by Covid. We all notice this change of pace quite differently, and that is why it would be good to also look to the future and ask ourselves the question: if the whole thing has a year to settle, where do we actually stand? We shouldn’t take a snapshot and conclude that things are moving unchecked in the wrong direction right now. I think that’s too short-sighted.

    Johannes Hack is President of the German Chamber of Commerce in Hong Kong and is thus very familiar with the concerns of German companies on the ground. Hack has lived in the southern Chinese metropolis since 2018. The chamber has more than 400 members – German companies, associations and individuals. Hack’s main job is as head of DZ Bank in Hong Kong; he gave the interview in his role as chamber president.

    • Coronavirus
    • Health
    • Hongkong
    • John Lee
    • National Security Act
    • Trade

    Feature

    Presence in Taiwan – and a spiced-up quote

    Added in Translation: the statement of a German deputy received unintended gravity.

    Since Sunday morning, a delegation of the German-Taiwan Parliamentary Friendship Group has been on a visit to Taiwan. This parliamentary group is dedicated to exchange with Taiwan. The focus of the five-day trip will be on economic and social issues, as well as the tense security situation in the region. China, as expected, criticized the visit and urged members of the German parliament not to send “wrong signals” to “separatist forces” on the island. The demand was to immediately stop the delegation’s trip.

    The head of the delegation, Klaus-Peter Willsch, dismissed Chinese criticism at a reception at the presidential office in Taipei on Monday. “We noticed that not everyone likes the fact that we are here this week, but we don’t care about that,” the conservative politician said. Elsewhere, he spoke of “complete overreaction by a nervous dictatorship.” The German Bundestag, he said, decides for itself on its relations with friendly parliaments. Willsch also emphasized the importance of Taiwan’s semiconductor industry for the German economy, saying it was crucial for digitization.

    The delegation was welcomed on Monday morning by both President Tsai Ing-wen (蔡英文) and Vice President Lai Ching-te (賴清德). In her welcoming remarks, Tsai thanked the German government for its support. Following the Chinese military maneuvers in early August, Berlin, in its role as G7 chair, had issued a joint statement with G7 foreign ministers to preserve peace in the Taiwan Strait.

    An explicit translation

    Willsch mentioned the war in Ukraine, in which a large country invaded a smaller neighbor and tried to “impose its political will on it by military force.” The Bundestag repeatedly emphasized in debates that China’s military threats against Taiwan are unacceptable, said the chairman of the Parliamentary Friendship Group.

    A tweaked version of Willsch‘s quote made international headlines. In the Chinese translation by the interpreter hired by the German side, he said, “We will bravely stand up to assist and support Taiwan if it faces such military threats.” (如果台灣收到武力的威脅,我們也會勇敢地站出來協助台灣、支援台灣。) It made its way to many national and international media channels via a report by Taiwan’s CNA news agency. Even the Russian state news agency RIA Novosti published the alleged Willsch quote.

    Willsch’s original statement largely echoed the speech by German Foreign Minister Annalena Baerbock to the United Nations in early August, in which she indirectly warned China not to escalate the situation in the Taiwan Strait. In fact, Willsch’s statement, which he never said this way, is not more explicit than that of the foreign minister. This may also be the reason why the German Institute Taipei City never released a correction. In a Facebook post by the Taiwanese president, the term “provide assistance” (支援) was eventually changed to “support” (支持).

    The Legislative Yuan revives its Germany group

    Vice President Lai Ching-te expressed hope that Germany would include Taiwan in discussions on a new national security strategy and China policy, according to CNA.

    In addition to Willsch, the delegation also includes

    • Katrin Budde (SPD),
    • Till Steffen (Greens),
    • Rainer Kraft (AfD),
    • Caren Lay (Left Party) and
    • Frank Schaeffler (FDP).

    On Sunday evening, the deputies had already met with their counterparts from the Taiwanese-German Friendship Group in the Legislative Yuan, Taiwan’s parliament. The group, which currently has 41 members, had only recently reconstituted itself. In addition to Chairman Chang Hung-lu (張宏陸) from the ruling DPP faction, members of the opposition also took part, including representatives of the KMT. Taiwan’s representative in Germany, Shieh Jhy-Wey, joined the delegation and also attended the dinner. David Demes

    • Germany
    • Military

    Islam with Chinese characteristics

    .
    Worshippers in Beijing’s predominantly Muslim Niujie neighborhood.

    On online travel platforms, the Nanguan Mosque is still advertised as a tourist attraction. And indeed, the building in the pictures looks like a magnificent Islamic building: green domes, golden ornaments and several minarets, adorned with crescents at the top.

    On this chilly September evening, however, the mosque in downtown Yinchuan is hardly recognizable: behind the barred entrance, all that can be made out is a plain functional building. All Arabic characters and decorative elements had been removed after a “renovation” shortly before the pandemic. Instead of minarets, the red flag of the People’s Republic of China now rises into the sky.

    Hui minority in the focus of the authorities

    When the media talk about Islam in China, they mostly report about the Muslim minority of the Uyghurs. The Turkic people, native to the Xinjiang region, are indeed brutally oppressed by the Chinese state for years. But far less well known is the fact that the majority of Muslims in the Middle Kingdom belong to a different ethnic group. The more than ten million Hui can hardly be distinguished from Han Chinese in their appearance. Both culturally and religiously, they are largely assimilated. Nevertheless, the Hui have increasingly come under the attention of the authorities in recent years.

    This is nowhere more apparent than in the northwestern Chinese city of Yinchuan, where the Muslim minority accounts for a quarter of the population: Calls to prayer are banned because of “noise pollution,” and the Koran has been removed from stores.

    And the cityscape has also changed permanently: The idyllic Aiyi River, which gently flows through the city of two million people, was unceremoniously renamed by the authorities in 2018 because of its “Arabic-sounding name”. As one expert from the local Ningxia University of Hui Studies explained to state media at the time, “Aiyi” would sound too much like “Aisha” – one of the five wives of the Prophet Muhammad – to Chinese ears. This, in turn, would violate the law: Back in 2013, the local government had decided that localities in Yinchuan must not be named after foreign individuals.

    The boulevard – formerly built as the “Sino-Arab Axis” – was also renamed “Unity Street” in 2018. In the neighboring park, which was once intended to attract tourists from the Middle East, the authorities had torn down the giant crescent moon statue.

    Religions threaten the system of rule

    All of these measures are part of the “Sinicization of Religions” that President Xi Jinping called for in a keynote speech back in 2016: Islam in China must be “Chinese in orientation” and religions need to adapt to “socialist society,” the 69-year-old said at the time. On the one hand, his words indicate that Xi recognizes the existence of religious communities in principle, but must be controlled and regulated.

    The slogan is not mere rhetoric, but highly political: The goal of the “Sinicization of Religions” is to ensure that even areas of society not directly under the control of the CP are effectively monitored. After all, in the eyes of the Party, religions are always a potential threat to the rule of the system, since they can serve as a breeding ground for opposition forces. Several historical examples prove this, such as the Catholic Church in communist Poland.

    How “Sinicization” is implemented in 2022 was impressively demonstrated at the end of August. When the Catholic Patriotic Association – China’s state-sanctioned church – elected a new leadership in a vote in Wuhan, the bishops were promptly summoned to Beijing’s government quarter. While having tea with Wang Yan, a member of the Politburo Standing Committee, several ideological pledges of allegiance were wrung from them – including that it was “necessary” to follow “Xi Jinping Thought on Socialism with Chinese Characteristics”. Also, Wang, a senior Party cadre, demanded that the church actively help “fend off infiltration by foreign forces.”

    Values of socialism instead of Arabic characters

    The fact that the state comes first can also be observed in the Muslim Niujie district in Beijing. Here, too, all Arabic characters disappeared from the walls of the halal restaurants. Curved rafters still protrude from the facades of the houses. But instead of conveying a certain historic authenticity, all that remains is tourist kitsch.

    And renovations are underway at the mosque. Construction workers have wrapped the entryway in plastic sheeting emblazoned with the “12 Core Values of Socialism” in Chinese characters propagated by Xi Jinping at the 18th Party Congress ten years ago – including “patriotism,” “democracy” and “justice”. Fabian Kretschmer

    • Civil Society
    • Culture
    • Human Rights
    • Religion
    • Society

    News

    China’s first mRNA vaccine receives approval – in Indonesia

    China’s first mRNA COVID-19 vaccine received emergency approval in Indonesia. The vaccine, called AWcorna, received approval for people aged 18 years and above and may be used as an initial vaccine and as a booster vaccine. The vaccine is developed by Walvax Biotechnology, Suzhou Abogen Biosciences and the Chinese military, Bloomberg reports.

    Walvax announced that the approval is based on ongoing phase 3 clinical trials. The head of Indonesia’s Food and Drug Administration stated that two doses of the vaccine would have a 71 percent efficacy rate against the Cmicron variant – comparable to Western vaccines. However, data is yet to be published. It is also still unclear how well the vaccine protects against severe infection. The vaccine is to be produced in Indonesia. Like Western mRNA vaccines, it is not yet approved in China. nib

    • Corona Vaccines
    • Coronavirus
    • Health

    Chinese Chamber of Commerce sees poor sentiment

    The Chinese Chamber of Commerce in the EU sees business sentiment at a low. An increasingly complicated political environment, new EU trade tools, and deteriorating public opinion of China are the main factors behind this, said the annual report by the Chinese Chamber of Commerce in Brussels (CCCEU) in collaboration with consultancy Roland Berger. The Chamber of Commerce also expressed concern about calls for decoupling and increasing protectionism.

    According to the report, 150 Chinese companies in the EU were surveyed for the report. Around 53 percent of the companies surveyed said that the business environment deteriorated within the past year. This marked the third consecutive year of a downward trend in this area. 38 percent of respondents felt that a hostile political environment affected their business. Overall, 80 percent of respondents said geopolitical dynamics, the COVID-19 pandemic and supply chain disruptions have an increasingly negative effect on Chinese companies operating in the EU.

    Among other things, the exclusion of telecom equipment maker Huawei from numerous markets is seen as isolation, according to the report. “The wall put up around the high-tech and telecom sectors in Europe is making matters difficult for Chinese enterprises operating in the EU,” the report said. Chinese companies expressed concern about the EU’s “unilateral economic and trade policy instruments,” including the 5G cybersecurity toolbox and increased screening of foreign direct investment.

    However, Europe remains attractive to Chinese investors, according to the survey: 70 percent of companies believe that economic relations between the EU and China will improve again. 80 percent of respondents said the EU would become more important in their companies’ global strategy, with the majority planning to expand their presence throughout the industrial chain. ari


    • Mobile communications
    • Technology
    • Trade

    Tax incentive for real estate purchase

    China’s central government has passed a tax incentive for the purchase of residential real estate, Bloomberg reports. However, the tax rebate is very limited. Buyers will be eligible for an income tax rebate if they purchase a new property within a year after selling one. This was announced by the Ministry of Finance on Friday.

    To stimulate the real estate sector, mortgage requirements are also being softened. The central government will permit selected cities to relax the requirements for first-time home buyers. Local banks will then be allowed to decide for themselves whether to maintain, lower or eliminate the lower limit on mortgage rates for first-time homebuyers until the end of the year. The Chinese central bank made the announcement late last week, Caixin reports. In addition, the central bank said it would provide special loans to speed up completion of delayed construction projects. According to Goldman Sachs analysts, however, further measures are needed to boost the real estate sector. nib

    • Finance
    • Loans
    • Real Estate
    • Taxes

    Heads

    Philipp Bilsky – German voice from Taipei

    Philipp Bilsky is head of the Chinese service at Deutsche Welle.

    “The office in Taipei was an important step for our editorial team,” says Philipp Bilsky. At Deutsche Welle, he is responsible for everything that is published in Chinese. The 45-year-old set up his editorial team’s first office in the Chinese-speaking world in Taipei. From 2018, he worked there for more than four years; meanwhile, he is back in Bonn. But hardly anything has changed about his day-to-day work, he says.

    Five journalists currently work for Deutsche Welle in Taipei. A competitive advantage, says Bilsky: “Deutsche Welle was the first international media provider to open an office in Taipei.” From there, the reporters also report in English, shoot news reports and TV shows, and oversee Deutsche Welle’s Chinese online content.

    Censorship of independent media

    Other international media are mostly located in Mainland China. “Deutsche Welle also tried that for years without success,” Bilsky says. There was never any permission. Chinese reporting therefore comes from Taipei and Germany. For information from Beijing, Deutsche Welle also cooperates with the German public broadcaster ARD.

    Deutsche Welle is subject to censorship in China. Anyone who wants to work as a media provider for a Chinese audience has only two options. Either, they report only in the interests of the Chinese government. “Or you don’t bow to censorship and report independently – then your website will be blocked in China,” Bilsky says. “For us to be dictated what we report and what we don’t report, that’s not an option for Deutsche Welle.” Because of censorship, he says, it is difficult to reach a broad audience in China. Those who want to access Deutsche Welle’s pages must use a VPN tunnel. “Those who come to us often already know us and know what they are looking for,” says Bilsky.

    Criticism from all sides

    Furthermore, it has become increasingly difficult to find interview partners on critical topics in recent years. “If someone does accept to be interviewed, we often only get statements that coincide with what is coming from the government side,” says Bilsky.

    Deutsche Welle’s editorial staff includes people from Taiwan, Hong Kong and Mainland China. This is important to Bilsky. “That’s extremely helpful for the mix of topic selection.”

    Criticism of the content always comes from different sides: “For some we are anti-Chinese, for others we are pro-Beijing.” Bilsky sees this as positive. Deutsche Welle wants to provide information so that everyone can form their own opinion. “If we are criticized from both sides, then we are probably doing quite well.” Jana Hemmersmeier

    • Censorship
    • Civil Society
    • Media
    • Taiwan

    Executive Moves

    Christian Straube is leaving the NGO Stiftung Asienhaus as of October 31. From the beginning of November, he will become a project manager at Stiftung Mercator, where he will continue to work on the topics of China and civil society dialogue with the People’s Republic (See Christian Straube’s China.Table profile).

    Jing Wang is the new CEO of the Chinese securities joint venture of major bank Credit Suisse, effective immediately. He most recently served as head of Chinese onshore asset management at Credit Suisse.

    Is something changing in your organization? Why not let us know at heads@table.media!

    Dessert

    On China’s National Day on October 1, this woman is clearly flying the flag. The Bund in Shanghai is already crowded at the beginning of the holiday week.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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