Table.Briefing: China

Interview Annalena Baerbock + Hybrid warfare + BRICS Summit

Dear reader,

In today’s Table.Media interview, Germany’s Foreign Minister Annalena Baerbock sends a clear signal to China: The Greens’ foreign minister wants to work with the EU to try and convince the small island states in particular that their interests are often in better hands with the Europeans than with China.

This will not be easy, as the Global North would have to deliver on its promises in areas such as finance. This is how Baerbock sees it in an interview conducted by Climate.Table’s Bernhard Poetter. She wanted to help forge such new alliances in the South Pacific by opening an embassy in Fiji.

As is generally known, she never made it there; the interview was written shortly after Baerbock’s trip was foiled by a faulty airplane. So the interview also deals with the state of the German air force. And about the damage to foreign policy caused by the cancelation of her visit to a key region. In the interview, the minister expressed her frustration that the trip fell through. But, Baerbock said, the trip has only been postponed, not abandoned.

The heads of government of Japan and South Korea also had a long journey behind them when they met with the US president at Camp David over the weekend. They agreed on closer cooperation to contain China.

This shows that China’s neighbors have realized something that has not yet dawned on Europe: China’s hybrid war against Taiwan has already started, as Felix Lee analyzes. As if to confirm this, the People’s Liberation Army again dispatched many fighter jets toward the island over the weekend.

The upcoming summit of BRICS countries in Johannesburg will also focus on China’s global (leadership) role. The most important topic of the meeting will most likely revolve around a possible enlargement of the BRICS alliance, analyzes Joern Petring. China is in favor, while Brazil and India are hesitant.

The BRICS countries – which are already stronger than the G7 in terms of real purchasing power – are united in their goal of a “changed global order,” as South African Foreign Minister Naledi Pandor put it in the run-up.

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Carolyn Braun
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Interview

‘We need to break up the old blocs’

German Foreign Minister Annalena Baerbock after returning from her aborted trip to Oceania.

Ms. Baerbock, we’re conducting this interview shortly after your unplanned return. Weren’t you supposed to be in New Zealand right now? What damage has this caused to German foreign and climate policies, given that you had to cut short your trip to Oceania?

It truly hurts. Since 2011, no German Foreign Minister has been to Australia. And we’ve never even been represented with a German embassy in the small Pacific island nations. Proclaiming our friendship in Sunday speeches isn’t enough. Friendship in diplomacy is also demonstrated by undertaking a long journey of over 20,000 kilometers. To clearly convey to the people and governments there: your region holds great importance for us in the 21st century, both in terms of security and climate policy. We simply can’t convey this as effectively from Berlin on a rainy Thursday afternoon as we can in person in New Zealand, Australia, or Fiji. This is why, as part of our climate foreign policy strategy and also as part of our China and Indo-Pacific policy, we are finally opening an embassy in Fiji – our first in a small Pacific island state ever.

When will you make up for the trip?

The fact that I had to cancel the trip is unfortunate, especially since you can’t just hop on a plane for a quick 20,000-kilometer detour. We’re now looking for consecutive free days in my incredibly packed schedule to definitely make up for the trip. However, some things simply can’t be made up for. I can only virtually participate in the embassy opening now. It’s, of course, not the same as doing it alongside the Fijian government as originally planned.

Geopolitics is climate policy

You intended to show in the Indo-Pacific how climate, foreign, and geopolitical policies should come together. How should we envision this?

Geopolitics is climate policy, and climate policy is geopolitics. Experts have known this for years, as we saw at the Climate Conference in 2015 in Paris. Why was it so incredibly difficult to negotiate a global climate agreement? Because, of course, there are significant geopolitical questions behind it – leadership in renewable energy technology, old wealth from the fossil industry, and who pays for climate damages. These are all massive issues concerning financial policy, influence, and global justice. When a small island nation is hit by a cyclone for the nth time, eventually, they can’t afford to rebuild their schools and hospitals. If we aren’t there to help these states, China might offer their assistance, often not without strings attached. This doesn’t necessarily mean a stringent loan agreement but could also influence their voting behavior at the next international conference.

This means foreign climate policy has gained a new significance?

It’s becoming increasingly evident that the climate crisis is the security threat of this century, making climate policy also a matter of security. Just two years ago, we experienced in the Ahr valley that the climate and security crisis doesn’t spare even our own country. Hence, climate policy plays a significant role in our National Security Strategy. We’ve opened a new chapter in German foreign policy by bringing climate foreign policy into the Foreign Office. Without this, discussions with many countries would certainly be more challenging. In our conversations and through our embassies, the countries most affected by the climate crisis now feel, see, and hear that we are finally taking their primarily climate-induced security concerns seriously.

How is this reflected in practice, for example, in Fiji?

The new embassy in Fiji is our climate bridge into a geopolitical hotspot that’s incredibly distant but geopolitically very close to us. Fiji collaborates with us to advocate for stronger CO₂ reduction targets at climate conferences. Fiji is home to the Pacific Islands Forum, which includes Australia, New Zealand, and a dozen small Pacific island nations. They also share our values on other international matters. They all voted against the Russian war of aggression in the UN General Assembly. This means that climate policy is opening doors for geostrategic matters. But if we’re not present in terms of climate policy, these doors close again. Every island nation’s voice counts as much as that of a large industrial nation at the United Nations. Yet, these countries ask: If we cooperate so closely, why has no one visited us? Last year, I visited the Pacific nation of Palau, the first German Foreign Minister to do so in 120 years. It was a game changer for our reputation in the region. Through television images, even the German public suddenly saw a house threatened by sea level rise, on the verge of falling into the sea. We’re also bringing something very tangible to the Pacific region, like our offer to expand renewable energy for the Pacific islands, some of which still rely on diesel generators, or our support on crucial political issues like the financial management of losses and damages due to the climate crisis.

Developing countries do not automatically side with the EU

So you’re hoping that this will lead to better negotiation outcomes, such as at the UN climate conferences?

We are already working very closely with countries like the Marshall Islands, Vanuatu, and Fiji on climate matters. Of course, these island states ardently wish for us to reduce global CO₂ emissions to nearly zero. At climate conferences, we often advocate for this together. However, when a choice arises between old industrial nations and emerging global powers like China and the Gulf states, the island nations don’t automatically align with the EU, even if we are, in fact, more ambitious in our climate policies.

To date, these countries are part of the informal “G77” group, which consists of developing and emerging nations alongside China. Do you intend to strategically rally these countries to your side on climate policy matters?

It’s these traditional blocs that we need to dismantle. The climate crisis is no longer a matter of bloc affiliations. We can only tackle the climate crisis collectively as a global community, or not at all. Hence, it’s crucial for those genuinely wanting to make a difference in climate policy to join forces, regardless of whether they’re from the North or the South, are an emerging country, a small island nation, or a European industrial powerhouse. And in this regard, the countries of the Indo-Pacific, where many of the most vulnerable states are situated, play a pivotal role. Therefore, our China strategy encompasses not just the task of recalibrating our ties with China in these tumultuous geopolitical and climatic times, but also significantly broadening our collaboration in the Indo-Pacific.

What should this look like?

This not only pertains to the smaller island nations but also to the much larger countries in that region. Angela Merkel’s last visit to Australia as Chancellor was in 2014, although it was within the G20 framework. Australian newspapers keenly observed and reported that she visited China more than ten times during her tenure. These are robust and well-established democracies like Australia and New Zealand, which also feel that our focus wasn’t significantly directed towards them in the past. But this also applies to smaller island states, which, like us, wholeheartedly support the United Nations Charter and the rules-based order. All these Pacific island nations have opposed the Russian act of aggression because, as smaller nations, they recognize that their safety net is international law. Hence, it’s not only about expressing gratitude but making it clear: We acknowledge your security concerns, like the climate crisis, but also China’s influence. China has discreetly forged a security pact with the Solomon Islands. This deeply concerns Australians, who have closely collaborated with the Solomon Islands in the past.

Offering the island states concrete alternatives to China

Up until now, even these small states have consistently voted with China and against the EU in climate negotiations when push came to shove.

That’s true to some extent. None of these states want to be dependent on a single country. Hence, we are trying to offer these island nations tangible alternatives, because it’s not about them picking one side over the other. That’s also why we’re so welcome there. This trip, this new message – all of it is part of the plan. Trust is built over years and decades. In diplomacy, trust means getting to know each other and visiting each other. A pivotal moment for me was the COP27 in Egypt last year: right up to the end, we were aligned with the small island states, agreeing that we need to do more for climate protection and coordinate it with a new tool for damage and loss. But when it came to the crucial vote, they sided with the G77 group, which was slowing things down. Because behind the scenes, countries like China put massive pressure on many of these states, telling them: if you oppose us on climate policy now, we might oppose you on other matters when the time comes. That’s precisely why it’s so essential for us to have trusting relationships with the small island nations and continue to strengthen them. That’s the primary objective of my foreign climate policy.

A part of your China strategy is “derisking” – i.e., reducing strategic dependency. But when it comes to climate policy, everyone is dependent on China. How does derisking work when you need both confrontation and cooperation?

You’re familiar with the three-pronged approach of our China strategy: we see China as competitors, systemic rivals, but also partners. We want to cooperate with China. But we want fair cooperation. And if that’s not possible, we have to protect ourselves. For instance, when China wants to unfairly gain a competitive edge in technological know-how. So, the approach is: cooperate with China wherever possible, especially in the realm of climate policy. And “Derisking” – ensuring Europe’s strategic sovereignty – is necessary where our security interests might be at risk.

But what happens when there’s an overlap: When Chinese solar panels might possibly be made using forced labor?

Forced labor is, of course, an absolute no-go. Our new Supply Chain Due Diligence Law prohibits German companies from using products made from forced labor in their supply chains. And I advocate that such products should not be allowed on the European market. It would be a clear market distortion against European companies that naturally adhere to international core labor standards. However, we indeed have significant dependencies on China, especially in the solar technology sector. We Europeans can’t achieve our renewable energy expansion goals without cooperating with each other. At the same time, we must prevent becoming as dependent on China as we were on Russia for gas supply, where the raw material was used as a weapon. That’s why we’re investing a lot of money to develop, for instance, microchip and battery production in Europe and Germany.

Keeping promises is in one’s own interest

China’s strength is partly due to the West’s weakness. Especially when it comes to climate financing, industrialized countries are rightly accused of not keeping their promises – the unmet $100 billion by 2020 is an example. How can the trust of poorer nations in the Global North grow in this context?

When we don’t fulfill our own climate financing promises, we obviously make it easy for countries like China, who are not just concerned with climate policy, but also with systemic dependencies. Therefore, keeping the promise of the annual 100 billion US dollars in climate financing is in our very own interest. It’s also vital to make progress in addressing losses and damages caused by the climate crisis, especially to assist those who have contributed the least to the problem. That’s why the loss and damage fund is such a priority for me. Germany, at least, stands by its financial commitments. However, we shouldn’t be naive about climate financing. For decades, traditional industrialized countries were responsible for the majority of global emissions. Our economic success was built on that. That’s why we must financially support the necessary adjustments and the management of losses and damages. Thankfully, with our shift to renewables, we’ve set a new course. However, others aren’t phasing out coal as intensively as we are. China is now the largest emitter and bears the primary responsibility for current and upcoming damages. We need to make this clear to smaller nations: if you want assistance, we’ll keep our word – but you also need to hold countries like China or the Gulf states accountable.

Loss and damage: China, oil states and Korea should also contribute financially

You demand that China and other wealthy countries that are not traditional industrialized nations contribute to the financing of the loss and damage fund, which is to be implemented at the next COP?

Yes, I discussed this on my trip to China, as well as with the Gulf states and countries like Korea. Although it’s far from easy. The loss and damage topic is the Pandora’s box of climate policy. Many were afraid to address it. The prevailing stance from Europe and the USA was that we shouldn’t discuss it at all. I’ve always found that misguided. As Foreign Minister, I’ve felt from day one that by refusing to discuss this, we’re losing the trust of countless countries worldwide. And it’s not just the island states but also many nations in Africa. That’s why I said at the Petersberg Climate Dialogue a year ago that we intend to address this topic. This approach hasn’t always received applause, even from our allies, but it’s been an opener for many countries worldwide who’ve typically been skeptical of industrialized nations. They’ve seen that Germany is genuinely committed to its responsibility in climate policy.

Is that still the case? What reputation does Germany have among your counterparts in the world of climate politics? We were once the “Home of the Energiewende,” but now others are faster and more determined.

After Germany essentially pioneered the Energiewende, its reputation suffered in the years that followed. This was due to a phase when the Grand Coalition posed numerous obstacles to the expansion of renewables and resisted the phasing out of coal. This cost us our solar industry, which has since shifted to China. We then became heavily dependent on Russian gas. The previous federal government always viewed a gas pipeline purely as an economic project, ignoring its geopolitical and climate implications. All this chipped away at our once pristine reputation as a climate frontrunner. Hence, it became crucial for the new federal government to stress that climate policy is now a priority. Climate protection isn’t just an environmental issue; it’s industrial, security, health policy, and therefore a cross-cutting task for every modern government.

Even your coalition government has been told by the expert council that efforts are insufficient. How satisfied are you with domestic climate policy?

If, for years, or even a decade, you’ve neglected climate and energy policy, an industrialized nation cannot change overnight. “Neglected” is putting it lightly, especially when I think of factions within the Union that deliberately wanted to sabotage the early successes of renewable energy. As a result, our coalition has made a fundamental decision to be climate-neutral by the mid-40s and align infrastructure investments accordingly. Our intermediate target is also clear: achieve at least 80 percent renewables by 2030. This way, we can make up, at least partly, for the lost years. Accordingly, our coalition agreement advanced the coal phase-out, and it was expedited even more after Russia’s attack on Ukraine. The reactivated coal reserves have long been replaced by renewables. After the Energiewende in the electricity sector – in May, we already had 66.2 percent of electricity produced from renewables – we’re now finally addressing the heating sector.

COP28: A course correction is necessary

At the COP28 in Dubai in December, nations could agree on the following goals: A global target for renewables, more energy efficiency, a reduction in methane emissions, upholding the promise of 100 billion in climate finance, and orchestrating a move away from fossil fuels – with a significant emphasis on CCS technology, which oil nations desire. Would that be a success?

We need a course correction at the World Climate Conference in Dubai. We’re not on track to keep the 1.5-degree increase within reach. At the same time, we know that such conferences aren’t a “wish list”. Reaching a consensus on the further, urgently needed CO₂ reduction will be challenging. This is especially the case since some see CCS – i.e., carbon capture and storage – as a panacea for everything. Therefore, at this year’s Petersberg Climate Dialogue, I proposed a new global target: to triple the global capacity for renewables. This should be accompanied by a doubling of energy efficiency, a move away from unabated fossil fuels, and support offers for developing countries. We need international financial institutions capable of supporting investments in this global transformation. Our solidarity with the especially vulnerable nations, particularly the island states, requires progress with the “Loss and Damage” fund. We need to carefully assess how close we can come to this ideal target and which steps need to be taken in that direction. The entire world, especially the Gulf states, have realized: technologically, renewables are the future. That’s why countries like the United Arab Emirates, but also Qatar or Saudi Arabia, are adopting a dual strategy. They continue their business with oil and gas but simultaneously build the world’s most advanced solar power plants and focus on exporting green hydrogen. However, they push the responsibility of supporting vulnerable developing nations onto us.

CCS: No substitute for the expansion of renewables

At Petersberg, the difference became quite apparent: when the COP President al Jaber said he wanted an exit from emissions, not from fuels – hence as much CCS as possible. And you said, we need an exit from fossil fuels, meaning an end to all fossil fuels. Will the EU then shift to the CCS course of the oil countries, as it has already hinted?

That’s a perfect example of the difficult decisions we face. We’re not on the same page as the Gulf states. But that doesn’t mean we should give up. We have to dive deep into the specifics of climate foreign policy: What are their interests? They want to profit from fossil fuels as long as possible. How can we shape that in a way that’s not harmful to the climate? There are areas where we can’t avoid CCS and CCU technologies. That’s quite undisputed. However, we must precisely define the purpose of CCS and CCU and how they can be used safely in the long run. They cannot replace the further expansion of renewables, which are available, cost-effective, and can replace fossil fuels entirely in power generation without any issues.

But where do you find allies for this? This is the German position, but no longer the EU’s. And the USA isn’t on board either. With whom do you plan to implement this?

In the EU, the positioning isn’t finalized. Diplomacy is all about promoting one’s position and forging alliances. And it’s not like we don’t have allies. Especially the countries that don’t have significant revenues from oil or big industries, but are already feeling the impact of climate change and know that every tenth of a degree of global warming determines the fate of their country. Altogether, that’s many countries in every corner of the world. This is precisely why we need to continue expanding our relationships in these corners. Like in the Indo-Pacific. Which brings us back to the journey. Whether we make progress at the next and subsequent climate conferences largely depends on whether everyone, as usual, reverts to their old power blocks of the last century like “G77” and “industrialized countries.” This won’t move us forward. We need new climate alliances. Between industrialized countries and those most severely affected by the climate crisis. That will be crucial for climate policy in the coming years.

  • Annalena Baerbock
  • China strategy
  • Chips
  • Climate policy
  • Geopolitics
  • South China Sea

Feature

BRICS countries vie for future course

Preparations in Johannesburg for the BRICS Summit are in full swing. South Africa is the host this year.

Before their big summit from Tuesday to Thursday in Johannesburg, the BRICS states had to make a difficult decision. An international arrest warrant has been issued for Vladimir Putin for alleged war crimes. Upon his arrival in South Africa, he would have had to be arrested immediately.

The Russian President will now stay in Moscow and join via video. China’s President Xi Jinping, Brazil’s President Lula da Silva and his Indian counterpart Modi will travel to South Africa in person and be received by President Cyril Ramaphosa.

The BRICS members Brazil, Russia, India, China and South Africa had different views on how to treat Putin. Reportedly, there were even considerations to move the summit to China or another country without an extradition treaty. This would have allowed Putin to attend personally. But in the end, the idea was abandoned.

Signal against the West

Nevertheless, the BRICS countries want to send a strong signal to the West with their meeting: The goal is a “changed global order,” said South African Foreign Minister Naledi Pandor in the run-up to the forum. More than 30 countries have confirmed their participation in the BRICS Summit. 67 high-ranking politicians from Africa and the Global South have been invited, as well as 20 international representatives, including the United Nations, the African Union and Africa’s regional economic communities. In June, France’s President Emmanuel Macron had expressed an interest in attending. But he did not receive an invitation. It seems that former colonial powers are not welcome.

The summit’s main agenda will likely be the enlargement of the BRICS alliance. Today, the BRICS countries are already larger than the G7 countries in terms of real purchasing power. The plan is to convert this economic power into even greater geopolitical influence. The BRICS states largely agree that the West has too much weight when it comes to setting the rules on the international stage.

However, there is disagreement about the manner and pace of enlargement. Around 40 states are interested in joining the BRICS club, including Saudi Arabia, Argentina and Egypt.

China pushes the pace

China, in particular, believes that more members should be welcomed as soon as possible. It supports progress in enlargement and “welcomes more like-minded partners to join the ‘BRICS family’ at an early date,” the Beijing Foreign Ministry said ahead of the summit. Russia also hopes for a speedy enlargement. Moscow could thus once again demonstrate that it is by no means internationally isolated despite the Ukraine war.

Brazil and India, on the other hand, are more reserved. They fear that admitting too many new members could dilute the BRICS group and thus render it ineffective. Particularly, India fears losing influence if the BRICS group accepts too many new members that are closely aligned with China’s agenda. After all, India has an ongoing border conflict with China and competes with Beijing for regional influence.

Therefore, a mechanism for admitting new members is expected first to be negotiated in Johannesburg. There will likely also be disagreement between existing BRICS countries about which states should be admitted first. A democratic country like Argentina or rather an autocracy like Saudi Arabia?

The West can work with BRICS

Either way, the West will closely follow what the BRICS countries agree on in Johannesburg. “The BRICS forum is an idea whose time has come, and the world should be prepared to interact with it,” writes the think tank Atlantic Council in its assessment of the upcoming summit.

How the G7 and the West should position themselves vis-à-vis the BRICS depends on which path the alliance takes. “If the BRICS group follows India’s approach, then it can promote cooperation among developing countries and, on that basis, engage with the G7 to discuss ways to reform the international economic and financial system and deal with global problems such as the impacts of climate change,” says the Atlantic Council.

However, “if China prevails, the BRICS group will likely become another venue for anti-US political activism,” the G7 will likely confront these criticisms. The most effective way of doing this would be by “finding ways to engage with its constructive proposals” to improve the current economic and financial system in order to address the shortfalls in meeting the development needs of the Global South.

  • Geopolitics

The hybrid war against Taiwan has begun


Supporters enthusiastically welcome Taiwan’s Vice President William Lai during his stopover in New York. That alone angers Beijing – its air force dispatches jets.


The saber-rattling in the Indo-Pacific is getting louder. According to the Taiwanese government, fighter jets entered Taiwan’s air defense zone 42 times over the weekend. More than half of the military jets crossed the median line of the Taiwan Strait. The median line is considered the unofficial border between Taiwan and the People’s Republic in the heavily frequented Strait. Eight Chinese ships also took part in the drills.

The military leadership in Beijing confirmed that the air and naval forces of the People’s Republic had practiced encircling the island on Saturday. “This is a serious warning against Taiwan independence separatist forces colluding with external forces to provoke,” a military spokesperson said. The exercises were accompanied by sharp criticism from Chinese state media over a stopover in the US by Taiwanese politician William Lai.

Air force deployed out of anger at Lai

William Lai wants to be the presidential candidate for the ruling Democratic Progressive Party (DPP) in next January’s upcoming elections. He is currently considered the favorite. He is a thorn in Beijing’s side, as he once spoke out in favor of Taiwanese independence. Although he has since retracted this, it is still fresh in everyone’s mind.

DDP politician Lai had traveled to Paraguay for the inauguration of its president, stopping over in New York on the way and in San Francisco on the way back. Beijing accuses Lai of engaging in political activities there. Paraguay is one of the few countries still maintaining diplomatic relations with Taiwan.

Taiwan condemned China’s “irrational and provocative behavior.” The US government also strongly criticized the military exercises and urged China to “cease its military, diplomatic, and economic pressure against Taiwan and instead engage in meaningful dialogue with Taiwan.”

Ignorance towards the hybrid war

Washington already perceives that Beijing is attempting to steadily and persistently shift the “red lines” using military exercises. In the political arena in Germany, for instance, politicians are at best discussing possible consequences if China were to attack Taiwan militarily. The fact that Beijing has already started the hybrid war against Taiwan and is destabilizing the entire region is something that governments in Europe do not seem to want to acknowledge.

Hybrid warfare cleverly combines military and non-military means to exert pressure on the enemy. The armed forces’ actions remain below the threshold at which the world public perceives them as war in the true sense of the word. One example was Russia’s annexation of Crimea in 2014, where soldiers without national insignia were deployed. The international reaction remained weak and thus ineffective.

The results of Camp David

The summit in Camp David, which was also under the sign of hybrid warfare, may also have caused mistrust in Beijing. US President Joe Biden met with Japan’s head of government, Fumio Kishida, and South Korea’s President Yoon Suk Yeol at his country residence. The meeting also discussed closer military cooperation in East Asia between the three countries. Defense cooperation will be taken to an “unprecedented level,” Biden announced and praised the “next era of cooperation” between the countries.

Despite Biden’s assurance at the beginning of the meeting that China would not be the primary focus, it nevertheless appeared prominently in the final document. The three heads of government accused China of “dangerous and aggressive behavior.” The three countries “oppose any unilateral attempts to change the status quo by force.”

Japan, USA and Australia plan exercises

The three heads of government agreed on a consultation obligation in security crises and the setting up of a hotline for quick information exchange. An early warning system for potential supply chain issues is also planned. In addition, an annual trilateral summit is now scheduled between the USA, Japan and South Korea. “From this moment on, Camp David will be remembered as a historic place,” Yoon said about the summit results.

Japan’s Prime Minister Kishida said it was a great honor to write a new page in Camp David’s history book. The joint alliance is a success for Biden simply because the two countries historically maintain a somewhat frosty relationship. Recently, however, Seoul and Tokyo have been moving closer together, not least because of the increasing threat posed by China.

According to the AP news agency, the United States, Japan and Australia have already announced a joint naval exercise in the South China Sea for next week. The US aircraft carrier “USS America” and the helicopter carriers “JS Izumo” and “HMAS Canberra” from Japan and Australia are to participate in the exercise west of the Philippines, representatives of the Philippine security forces told AP on Sunday. Afterward, the commanders are expected to meet with their Philippine counterparts.

Biden wants to talk with Xi

At the same time, Biden held out the prospect of talks with China’s President Xi Jinping before the end of the year. “I expect and hope to follow up on our conversation in Bali this fall. That’s my expectation.” Biden and Xi last met in person on the Indonesian island of Bali on the sidelines of the summit of the G20 group of major developed and emerging economies last November. A new opportunity for bilateral talks between the two would be at the G20 summit in New Delhi, India, in September.

The Russian invasion of Ukraine was also discussed at the Camp David Summit. Biden emphasized the extent of the repercussions of this war beyond Europe. The partners in Asia had also understood this, Biden said. “If we had stood still, what signal would that send to China about Taiwan?”

  • Geopolitics
  • Japan
  • South China Sea
  • South Korea
  • Taiwan
  • USA

News

Huawei receives EU research funding

The EU is providing funding to the Chinese company Huawei. Units of the company based in Europe are said to be participating in 13 grant agreements, including one based in the UK. Executive Vice-President Margrethe Vestager made the announcement on Friday in response to a parliamentary question. Huawei entities based in China were not involved, she said.

The fact that Huawei is benefiting from EU research programs is surprising in light of the fact that the Commission now considers Huawei a risky company and excluded it from its own networks. Internal Market Commissioner Thierry Breton had urged member states to do the same with the help of the 5G toolbox. However, in its reply, the Commission points out that all funding came from calls under the Horizon Europe 2021 to 2022 work programs – i.e. before the EU Commission decided to ban Huawei.

Commission assesses the situation differently today

The question was raised by Dutch MEP Bart Groothuis, who is a member of the Industry Committee as well as the Special Committee on Foreign Influence in the European Parliament. In his question, he referred to a report in the Financial Times, according to which Huawei was involved in eleven Horizon Europe projects dealing with sensitive communication systems.

The regulation stipulates that all restrictions must be defined in advance in the Horizon Europe work programs, writes the EU Commission. However, the projects in which Huawei is involved were not considered to be a risk at the time of the work programs’ adoption, meaning that the restrictions did not apply.

In the meantime, however, the EU Commission believes that Huawei and ZTE do indeed pose a much higher risk than other 5G providers. For this reason, it intends to consider this for all relevant future EU funding programs and instruments – including Horizon Europe. vis

Evergrande files for bankruptcy in the US

China’s real estate crisis continues to spread: Former market leader Evergrande has filed for creditor protection in the United States. This is an expected interim step in working through an insolvency plan dating back to March, while also being a rare admission of insolvency by the Chinese homebuilder. The company has not filed for bankruptcy in China after its collapse two years ago. Now the limits of denying reality have been reached.

American investors had loaned Evergrande 19 billion US dollars over the years. These loans were granted as bonds, which were to be repaid gradually. Evergrande cannot do so because it has no money left after the Chinese real estate bubble burst. Evergrande has borrowed more and more since it was founded in 1996 to build more and more properties and sell them at ever higher prices. After Covid had interrupted the cycle, the company ran out of liquidity.

Like Chinese investors, international creditors will probably wait in vain for repayments. The bankruptcy filing under title 15 of the US Commerce Code is specifically designed to orderly resolve bankruptcy cases with international participation. Evergrande’s headquarters are formally located in the Cayman Islands. fin

VW sales continued to fall in July

The Volkswagen Group sold fewer cars in China in July than a year earlier. Sales in what is generally the most important market for the carmaker plummeted by 10.2 percent to 260,400 vehicles, as the company announced in Wolfsburg on Friday.

VW attributed the decline to the tax incentives the Beijing government used last year to boost the car economy after the Covid lockdowns. The overall market in China also contracted in July. In the first seven months of the year, Volkswagen’s sales figures in China lagged behind the previous year by 2.7 percent.

Meanwhile, problems with potentially faulty fuel pumps continue to plague carmaker Mercedes-Benz. After a major recall in the USA, the company is now also recalling 231,249 cars in China, as the Chinese supervisory authority SAMR (State Administration for Market Regulation) announced in Beijing. rtr

  • SAMR

EU report: Democracy in Hong Kong and Macao further weakened

In its annual report on the situation in Hong Kong, the EU Commission has denounced further curtailments of democratic principles and freedoms. In the past year, Hong Kong’s autonomy and democratic principles and fundamental freedoms have been further weakened, said the report by EU Commission Ursula von der Leyen and EU External Relations Commissioner Josep Borrell. The developments would cast doubt on China’s commitment to the principle of “one country, two systems.” The report says that around ten percent of EU citizens have left Hong Kong due to the strict Covid regulations.

One example cited is the arrests on national security grounds under the National Security Law. The report states that more than 230 people had been affected by the end of 2022. Charges had been brought against 145 people and five companies. All people charged under the Security Act had also been convicted. In addition, freedom of the press was increasingly being restricted. In the Reporters Without Borders ranking of press freedom for 2022, Hong Kong has fallen 68 ranks to 148 out of 180 countries. The EU also notes similar developments in Macau, on whose situation a report was also published.

The report also criticizes the arrest of an EU citizen, which according to media reports, is still in custody. The case concerns Joseph John, a Portuguese citizen with the Chinese name Kin Chung Wong, who was arrested in November 2022 for allegedly “publishing seditious articles online disparaging Beijing and local authorities.”

The exodus: residents flee Hong Kong

The exodus of Hong Kong residents has accelerated this year due to an increasing lack of freedom: By mid-August, 291,000 more residents had left the former British Crown Colony and current Chinese Special Administrative Region, according to the Committee for Freedom in Hong Kong Foundation. This is the highest level since records began in January 2020.

Since early 2021, nearly half a million people have left the city, many in the wake of the National Security Law, introduced in 2020, which suppresses basic human rights. ari/flee

  • Ursula von der Leyen

Opinion

China’s dangerous secrets

Brahma Chellaney is a Professor of Strategic Studies at the New Delhi-based Center for Policy Research
By Brahma Chellaney

It is well known that China has the world’s largest navy and coast guard – the result of a tenfold increase in military spending since 1995 – which it uses to advance its pugnacious revisionism. But there are also numerous lesser-known – indeed, highly opaque – policies, projects, and activities that are supporting Chinese expansionism and placing the entire world at risk.

China has a long record of expanding its strategic footprint through stealthy maneuvers that it brazenly denies. For example, in 2017, it established its first overseas military base in Djibouti – a tiny country on the Horn of Africa, which also happens to be deeply in debt to China – while insisting that it had no such plan.

Today, China is building a naval base in Cambodia, which has leased to China one-fifth of its coastline and some islets. The almost-complete pier at the Chinese-financed Ream Naval Base appears conspicuously similar in size and design to a pier at China’s Djibouti base. China admits to investing in the base, but claims that only Cambodia’s navy will have access to it.

Realistically, however, it seems likely that China’s navy will use the facility at least for military logistics. This would further strengthen China’s position in the South China Sea, where it has already built seven artificial islands as forward military bases, giving it effective control of this critical corridor between the Pacific and Indian Oceans.

Geopolitical interests in the construction of dams

China also takes a highly secretive approach to its massive dam projects on international rivers flowing to other countries from the Chinese-annexed Tibetan Plateau. While the world knows that the rubber-stamp National People’s Congress approved the construction of the world’s largest dam near China’s heavily militarized frontier with India in 2021, there have been no public updates on the project since.

The dam is supposed to generate three times as much electricity as the Three Gorges Dam, currently the world’s largest hydropower plant, and China has built a new railroad and highway to transport heavy equipment, materials, and workers to the remote project site. We will find out more only when construction is far enough along that the dam can no longer be hidden from commercially available satellite imagery. At that point, it will be a fait accompli.

China has used this strategy to build elven giant dams on the Mekong, not only gaining geopolitical leverage over its neighbors, but also wreaking environmental havoc. China is now the world’s most dammed country, with more large dams in operation than the rest of the world combined, and it is constructing or planning at least eight more dams on the Mekong alone.

Debt trap and secrecy

Opacity has also been a defining feature of the lending binge that has made China the world’s largest sovereign creditor to developing countries. Almost every Chinese loan issued in the last decade has included a sweeping confidentiality clause compelling the borrowing country not to disclose the loan’s terms. Many African, Asian, and Latin American countries have become ensnared in a debt trap, leaving them highly vulnerable to Chinese pressure to pursue policies that advance China’s economic and geopolitical interests. According to one study, the loan contracts give China “broad latitude to cancel loans or accelerate repayment if it disagrees with a borrower’s policies.”

But there can be no better illustration of the global costs of Chinese secrecy than the COVID-19 pandemic. Had China’s government responded quickly to evidence that a deadly new coronavirus had emerged in Wuhan, warning the public and implementing control measures, the damage could have been contained.

Instead, the Communist Party of China (CPC) rushed to suppress and discredit information about the outbreak, paving the way for a raging worldwide pandemic that killed almost seven million people and disrupted countless lives and livelihoods. To this day, Chinese obfuscation has prevented scientists from confirming the true origins of COVID-19, which, lest we forget, emerged in China’s main hub for research on super-viruses.

China’s constant rule violations

China’s willingness to violate international laws, rules, and norms compounds the opacity problem. The Chinese government has repeatedly reneged on its international commitments, including promises to safeguard the autonomy of Hong Kong and not to militarize features in the South China Sea. It was China’s furtive violation of its commitment not to alter unilaterally the status quo of its disputed Himalayan border with India that triggered a three-year (and counting) military standoff between the two countries.

There is no reason to expect China to abandon its rule-breaking, its debt-based coercion, or its other malign activities any time soon. Chinese President Xi Jinping – who has strengthened the CPC’s control over information, cutting off outside analysts’ access even to economic data – is now on track to hold power for life, and remains eager to reshape the international order to China’s benefit.

Expansion by salami tactics

Ominously, Xi’s appetite for risk appears to be growing. This partly reflects time pressure: Xi seems to believe that China has a narrow window of opportunity to achieve global preeminence before unfavorable demographic, economic, and geopolitical trends catch up with it. But Xi has also been emboldened by the international community’s utter failure to impose meaningful consequences on China for its bad behavior.

Whereas Russia launched a full-scale invasion of Ukraine, China prefers incrementalism, enabled by stealth and deception, to advance its revisionist agenda. This, together with tremendous economic clout, shields it from a decisive Western response. That is why, barring a major strategic blunder by Xi, China’s salami-slicing expansionism is likely to persist.

Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research and Fellow at the Robert Bosch Academy in Berlin, is the author of nine books, including Water: Asia’s New Battleground (Georgetown University Press, 2011), for which he won the 2012 Asia Society Bernard Schwartz Book Award.

Copyright: Project Syndicate, 2023.

Executive Moves

Raphael Oen has returned to Germany after four years as Head of Law, Patents and Compliance for Bayer in China. Since the beginning of the month, he has been Head of Law Pharma Global Commercial, also at Bayer, in Berlin.

Chun Yin Mak will become the new China head of the Japanese advertising agency Dentsu, which has an office in Shanghai. He replaces Deric Wong, who is stepping down after two and a half years for personal reasons. Mak comes from IBM China and was previously with Accenture.

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

Dessert

These are not elk grazing here in the wetlands of Yancheng in Jiangsu Province – even if the English name “elk” might suggest so. In North America, however, the elk we know in Europe are called “moose.” This is a species of East Asian deer, a subspecies of the wapiti. The name wapiti (“white rump”) comes from the Shawnee Indians. In Chinese, they are called Milu 麋鹿, which translates as … elk.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

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    Dear reader,

    In today’s Table.Media interview, Germany’s Foreign Minister Annalena Baerbock sends a clear signal to China: The Greens’ foreign minister wants to work with the EU to try and convince the small island states in particular that their interests are often in better hands with the Europeans than with China.

    This will not be easy, as the Global North would have to deliver on its promises in areas such as finance. This is how Baerbock sees it in an interview conducted by Climate.Table’s Bernhard Poetter. She wanted to help forge such new alliances in the South Pacific by opening an embassy in Fiji.

    As is generally known, she never made it there; the interview was written shortly after Baerbock’s trip was foiled by a faulty airplane. So the interview also deals with the state of the German air force. And about the damage to foreign policy caused by the cancelation of her visit to a key region. In the interview, the minister expressed her frustration that the trip fell through. But, Baerbock said, the trip has only been postponed, not abandoned.

    The heads of government of Japan and South Korea also had a long journey behind them when they met with the US president at Camp David over the weekend. They agreed on closer cooperation to contain China.

    This shows that China’s neighbors have realized something that has not yet dawned on Europe: China’s hybrid war against Taiwan has already started, as Felix Lee analyzes. As if to confirm this, the People’s Liberation Army again dispatched many fighter jets toward the island over the weekend.

    The upcoming summit of BRICS countries in Johannesburg will also focus on China’s global (leadership) role. The most important topic of the meeting will most likely revolve around a possible enlargement of the BRICS alliance, analyzes Joern Petring. China is in favor, while Brazil and India are hesitant.

    The BRICS countries – which are already stronger than the G7 in terms of real purchasing power – are united in their goal of a “changed global order,” as South African Foreign Minister Naledi Pandor put it in the run-up.

    Your
    Carolyn Braun
    Image of Carolyn  Braun

    Interview

    ‘We need to break up the old blocs’

    German Foreign Minister Annalena Baerbock after returning from her aborted trip to Oceania.

    Ms. Baerbock, we’re conducting this interview shortly after your unplanned return. Weren’t you supposed to be in New Zealand right now? What damage has this caused to German foreign and climate policies, given that you had to cut short your trip to Oceania?

    It truly hurts. Since 2011, no German Foreign Minister has been to Australia. And we’ve never even been represented with a German embassy in the small Pacific island nations. Proclaiming our friendship in Sunday speeches isn’t enough. Friendship in diplomacy is also demonstrated by undertaking a long journey of over 20,000 kilometers. To clearly convey to the people and governments there: your region holds great importance for us in the 21st century, both in terms of security and climate policy. We simply can’t convey this as effectively from Berlin on a rainy Thursday afternoon as we can in person in New Zealand, Australia, or Fiji. This is why, as part of our climate foreign policy strategy and also as part of our China and Indo-Pacific policy, we are finally opening an embassy in Fiji – our first in a small Pacific island state ever.

    When will you make up for the trip?

    The fact that I had to cancel the trip is unfortunate, especially since you can’t just hop on a plane for a quick 20,000-kilometer detour. We’re now looking for consecutive free days in my incredibly packed schedule to definitely make up for the trip. However, some things simply can’t be made up for. I can only virtually participate in the embassy opening now. It’s, of course, not the same as doing it alongside the Fijian government as originally planned.

    Geopolitics is climate policy

    You intended to show in the Indo-Pacific how climate, foreign, and geopolitical policies should come together. How should we envision this?

    Geopolitics is climate policy, and climate policy is geopolitics. Experts have known this for years, as we saw at the Climate Conference in 2015 in Paris. Why was it so incredibly difficult to negotiate a global climate agreement? Because, of course, there are significant geopolitical questions behind it – leadership in renewable energy technology, old wealth from the fossil industry, and who pays for climate damages. These are all massive issues concerning financial policy, influence, and global justice. When a small island nation is hit by a cyclone for the nth time, eventually, they can’t afford to rebuild their schools and hospitals. If we aren’t there to help these states, China might offer their assistance, often not without strings attached. This doesn’t necessarily mean a stringent loan agreement but could also influence their voting behavior at the next international conference.

    This means foreign climate policy has gained a new significance?

    It’s becoming increasingly evident that the climate crisis is the security threat of this century, making climate policy also a matter of security. Just two years ago, we experienced in the Ahr valley that the climate and security crisis doesn’t spare even our own country. Hence, climate policy plays a significant role in our National Security Strategy. We’ve opened a new chapter in German foreign policy by bringing climate foreign policy into the Foreign Office. Without this, discussions with many countries would certainly be more challenging. In our conversations and through our embassies, the countries most affected by the climate crisis now feel, see, and hear that we are finally taking their primarily climate-induced security concerns seriously.

    How is this reflected in practice, for example, in Fiji?

    The new embassy in Fiji is our climate bridge into a geopolitical hotspot that’s incredibly distant but geopolitically very close to us. Fiji collaborates with us to advocate for stronger CO₂ reduction targets at climate conferences. Fiji is home to the Pacific Islands Forum, which includes Australia, New Zealand, and a dozen small Pacific island nations. They also share our values on other international matters. They all voted against the Russian war of aggression in the UN General Assembly. This means that climate policy is opening doors for geostrategic matters. But if we’re not present in terms of climate policy, these doors close again. Every island nation’s voice counts as much as that of a large industrial nation at the United Nations. Yet, these countries ask: If we cooperate so closely, why has no one visited us? Last year, I visited the Pacific nation of Palau, the first German Foreign Minister to do so in 120 years. It was a game changer for our reputation in the region. Through television images, even the German public suddenly saw a house threatened by sea level rise, on the verge of falling into the sea. We’re also bringing something very tangible to the Pacific region, like our offer to expand renewable energy for the Pacific islands, some of which still rely on diesel generators, or our support on crucial political issues like the financial management of losses and damages due to the climate crisis.

    Developing countries do not automatically side with the EU

    So you’re hoping that this will lead to better negotiation outcomes, such as at the UN climate conferences?

    We are already working very closely with countries like the Marshall Islands, Vanuatu, and Fiji on climate matters. Of course, these island states ardently wish for us to reduce global CO₂ emissions to nearly zero. At climate conferences, we often advocate for this together. However, when a choice arises between old industrial nations and emerging global powers like China and the Gulf states, the island nations don’t automatically align with the EU, even if we are, in fact, more ambitious in our climate policies.

    To date, these countries are part of the informal “G77” group, which consists of developing and emerging nations alongside China. Do you intend to strategically rally these countries to your side on climate policy matters?

    It’s these traditional blocs that we need to dismantle. The climate crisis is no longer a matter of bloc affiliations. We can only tackle the climate crisis collectively as a global community, or not at all. Hence, it’s crucial for those genuinely wanting to make a difference in climate policy to join forces, regardless of whether they’re from the North or the South, are an emerging country, a small island nation, or a European industrial powerhouse. And in this regard, the countries of the Indo-Pacific, where many of the most vulnerable states are situated, play a pivotal role. Therefore, our China strategy encompasses not just the task of recalibrating our ties with China in these tumultuous geopolitical and climatic times, but also significantly broadening our collaboration in the Indo-Pacific.

    What should this look like?

    This not only pertains to the smaller island nations but also to the much larger countries in that region. Angela Merkel’s last visit to Australia as Chancellor was in 2014, although it was within the G20 framework. Australian newspapers keenly observed and reported that she visited China more than ten times during her tenure. These are robust and well-established democracies like Australia and New Zealand, which also feel that our focus wasn’t significantly directed towards them in the past. But this also applies to smaller island states, which, like us, wholeheartedly support the United Nations Charter and the rules-based order. All these Pacific island nations have opposed the Russian act of aggression because, as smaller nations, they recognize that their safety net is international law. Hence, it’s not only about expressing gratitude but making it clear: We acknowledge your security concerns, like the climate crisis, but also China’s influence. China has discreetly forged a security pact with the Solomon Islands. This deeply concerns Australians, who have closely collaborated with the Solomon Islands in the past.

    Offering the island states concrete alternatives to China

    Up until now, even these small states have consistently voted with China and against the EU in climate negotiations when push came to shove.

    That’s true to some extent. None of these states want to be dependent on a single country. Hence, we are trying to offer these island nations tangible alternatives, because it’s not about them picking one side over the other. That’s also why we’re so welcome there. This trip, this new message – all of it is part of the plan. Trust is built over years and decades. In diplomacy, trust means getting to know each other and visiting each other. A pivotal moment for me was the COP27 in Egypt last year: right up to the end, we were aligned with the small island states, agreeing that we need to do more for climate protection and coordinate it with a new tool for damage and loss. But when it came to the crucial vote, they sided with the G77 group, which was slowing things down. Because behind the scenes, countries like China put massive pressure on many of these states, telling them: if you oppose us on climate policy now, we might oppose you on other matters when the time comes. That’s precisely why it’s so essential for us to have trusting relationships with the small island nations and continue to strengthen them. That’s the primary objective of my foreign climate policy.

    A part of your China strategy is “derisking” – i.e., reducing strategic dependency. But when it comes to climate policy, everyone is dependent on China. How does derisking work when you need both confrontation and cooperation?

    You’re familiar with the three-pronged approach of our China strategy: we see China as competitors, systemic rivals, but also partners. We want to cooperate with China. But we want fair cooperation. And if that’s not possible, we have to protect ourselves. For instance, when China wants to unfairly gain a competitive edge in technological know-how. So, the approach is: cooperate with China wherever possible, especially in the realm of climate policy. And “Derisking” – ensuring Europe’s strategic sovereignty – is necessary where our security interests might be at risk.

    But what happens when there’s an overlap: When Chinese solar panels might possibly be made using forced labor?

    Forced labor is, of course, an absolute no-go. Our new Supply Chain Due Diligence Law prohibits German companies from using products made from forced labor in their supply chains. And I advocate that such products should not be allowed on the European market. It would be a clear market distortion against European companies that naturally adhere to international core labor standards. However, we indeed have significant dependencies on China, especially in the solar technology sector. We Europeans can’t achieve our renewable energy expansion goals without cooperating with each other. At the same time, we must prevent becoming as dependent on China as we were on Russia for gas supply, where the raw material was used as a weapon. That’s why we’re investing a lot of money to develop, for instance, microchip and battery production in Europe and Germany.

    Keeping promises is in one’s own interest

    China’s strength is partly due to the West’s weakness. Especially when it comes to climate financing, industrialized countries are rightly accused of not keeping their promises – the unmet $100 billion by 2020 is an example. How can the trust of poorer nations in the Global North grow in this context?

    When we don’t fulfill our own climate financing promises, we obviously make it easy for countries like China, who are not just concerned with climate policy, but also with systemic dependencies. Therefore, keeping the promise of the annual 100 billion US dollars in climate financing is in our very own interest. It’s also vital to make progress in addressing losses and damages caused by the climate crisis, especially to assist those who have contributed the least to the problem. That’s why the loss and damage fund is such a priority for me. Germany, at least, stands by its financial commitments. However, we shouldn’t be naive about climate financing. For decades, traditional industrialized countries were responsible for the majority of global emissions. Our economic success was built on that. That’s why we must financially support the necessary adjustments and the management of losses and damages. Thankfully, with our shift to renewables, we’ve set a new course. However, others aren’t phasing out coal as intensively as we are. China is now the largest emitter and bears the primary responsibility for current and upcoming damages. We need to make this clear to smaller nations: if you want assistance, we’ll keep our word – but you also need to hold countries like China or the Gulf states accountable.

    Loss and damage: China, oil states and Korea should also contribute financially

    You demand that China and other wealthy countries that are not traditional industrialized nations contribute to the financing of the loss and damage fund, which is to be implemented at the next COP?

    Yes, I discussed this on my trip to China, as well as with the Gulf states and countries like Korea. Although it’s far from easy. The loss and damage topic is the Pandora’s box of climate policy. Many were afraid to address it. The prevailing stance from Europe and the USA was that we shouldn’t discuss it at all. I’ve always found that misguided. As Foreign Minister, I’ve felt from day one that by refusing to discuss this, we’re losing the trust of countless countries worldwide. And it’s not just the island states but also many nations in Africa. That’s why I said at the Petersberg Climate Dialogue a year ago that we intend to address this topic. This approach hasn’t always received applause, even from our allies, but it’s been an opener for many countries worldwide who’ve typically been skeptical of industrialized nations. They’ve seen that Germany is genuinely committed to its responsibility in climate policy.

    Is that still the case? What reputation does Germany have among your counterparts in the world of climate politics? We were once the “Home of the Energiewende,” but now others are faster and more determined.

    After Germany essentially pioneered the Energiewende, its reputation suffered in the years that followed. This was due to a phase when the Grand Coalition posed numerous obstacles to the expansion of renewables and resisted the phasing out of coal. This cost us our solar industry, which has since shifted to China. We then became heavily dependent on Russian gas. The previous federal government always viewed a gas pipeline purely as an economic project, ignoring its geopolitical and climate implications. All this chipped away at our once pristine reputation as a climate frontrunner. Hence, it became crucial for the new federal government to stress that climate policy is now a priority. Climate protection isn’t just an environmental issue; it’s industrial, security, health policy, and therefore a cross-cutting task for every modern government.

    Even your coalition government has been told by the expert council that efforts are insufficient. How satisfied are you with domestic climate policy?

    If, for years, or even a decade, you’ve neglected climate and energy policy, an industrialized nation cannot change overnight. “Neglected” is putting it lightly, especially when I think of factions within the Union that deliberately wanted to sabotage the early successes of renewable energy. As a result, our coalition has made a fundamental decision to be climate-neutral by the mid-40s and align infrastructure investments accordingly. Our intermediate target is also clear: achieve at least 80 percent renewables by 2030. This way, we can make up, at least partly, for the lost years. Accordingly, our coalition agreement advanced the coal phase-out, and it was expedited even more after Russia’s attack on Ukraine. The reactivated coal reserves have long been replaced by renewables. After the Energiewende in the electricity sector – in May, we already had 66.2 percent of electricity produced from renewables – we’re now finally addressing the heating sector.

    COP28: A course correction is necessary

    At the COP28 in Dubai in December, nations could agree on the following goals: A global target for renewables, more energy efficiency, a reduction in methane emissions, upholding the promise of 100 billion in climate finance, and orchestrating a move away from fossil fuels – with a significant emphasis on CCS technology, which oil nations desire. Would that be a success?

    We need a course correction at the World Climate Conference in Dubai. We’re not on track to keep the 1.5-degree increase within reach. At the same time, we know that such conferences aren’t a “wish list”. Reaching a consensus on the further, urgently needed CO₂ reduction will be challenging. This is especially the case since some see CCS – i.e., carbon capture and storage – as a panacea for everything. Therefore, at this year’s Petersberg Climate Dialogue, I proposed a new global target: to triple the global capacity for renewables. This should be accompanied by a doubling of energy efficiency, a move away from unabated fossil fuels, and support offers for developing countries. We need international financial institutions capable of supporting investments in this global transformation. Our solidarity with the especially vulnerable nations, particularly the island states, requires progress with the “Loss and Damage” fund. We need to carefully assess how close we can come to this ideal target and which steps need to be taken in that direction. The entire world, especially the Gulf states, have realized: technologically, renewables are the future. That’s why countries like the United Arab Emirates, but also Qatar or Saudi Arabia, are adopting a dual strategy. They continue their business with oil and gas but simultaneously build the world’s most advanced solar power plants and focus on exporting green hydrogen. However, they push the responsibility of supporting vulnerable developing nations onto us.

    CCS: No substitute for the expansion of renewables

    At Petersberg, the difference became quite apparent: when the COP President al Jaber said he wanted an exit from emissions, not from fuels – hence as much CCS as possible. And you said, we need an exit from fossil fuels, meaning an end to all fossil fuels. Will the EU then shift to the CCS course of the oil countries, as it has already hinted?

    That’s a perfect example of the difficult decisions we face. We’re not on the same page as the Gulf states. But that doesn’t mean we should give up. We have to dive deep into the specifics of climate foreign policy: What are their interests? They want to profit from fossil fuels as long as possible. How can we shape that in a way that’s not harmful to the climate? There are areas where we can’t avoid CCS and CCU technologies. That’s quite undisputed. However, we must precisely define the purpose of CCS and CCU and how they can be used safely in the long run. They cannot replace the further expansion of renewables, which are available, cost-effective, and can replace fossil fuels entirely in power generation without any issues.

    But where do you find allies for this? This is the German position, but no longer the EU’s. And the USA isn’t on board either. With whom do you plan to implement this?

    In the EU, the positioning isn’t finalized. Diplomacy is all about promoting one’s position and forging alliances. And it’s not like we don’t have allies. Especially the countries that don’t have significant revenues from oil or big industries, but are already feeling the impact of climate change and know that every tenth of a degree of global warming determines the fate of their country. Altogether, that’s many countries in every corner of the world. This is precisely why we need to continue expanding our relationships in these corners. Like in the Indo-Pacific. Which brings us back to the journey. Whether we make progress at the next and subsequent climate conferences largely depends on whether everyone, as usual, reverts to their old power blocks of the last century like “G77” and “industrialized countries.” This won’t move us forward. We need new climate alliances. Between industrialized countries and those most severely affected by the climate crisis. That will be crucial for climate policy in the coming years.

    • Annalena Baerbock
    • China strategy
    • Chips
    • Climate policy
    • Geopolitics
    • South China Sea

    Feature

    BRICS countries vie for future course

    Preparations in Johannesburg for the BRICS Summit are in full swing. South Africa is the host this year.

    Before their big summit from Tuesday to Thursday in Johannesburg, the BRICS states had to make a difficult decision. An international arrest warrant has been issued for Vladimir Putin for alleged war crimes. Upon his arrival in South Africa, he would have had to be arrested immediately.

    The Russian President will now stay in Moscow and join via video. China’s President Xi Jinping, Brazil’s President Lula da Silva and his Indian counterpart Modi will travel to South Africa in person and be received by President Cyril Ramaphosa.

    The BRICS members Brazil, Russia, India, China and South Africa had different views on how to treat Putin. Reportedly, there were even considerations to move the summit to China or another country without an extradition treaty. This would have allowed Putin to attend personally. But in the end, the idea was abandoned.

    Signal against the West

    Nevertheless, the BRICS countries want to send a strong signal to the West with their meeting: The goal is a “changed global order,” said South African Foreign Minister Naledi Pandor in the run-up to the forum. More than 30 countries have confirmed their participation in the BRICS Summit. 67 high-ranking politicians from Africa and the Global South have been invited, as well as 20 international representatives, including the United Nations, the African Union and Africa’s regional economic communities. In June, France’s President Emmanuel Macron had expressed an interest in attending. But he did not receive an invitation. It seems that former colonial powers are not welcome.

    The summit’s main agenda will likely be the enlargement of the BRICS alliance. Today, the BRICS countries are already larger than the G7 countries in terms of real purchasing power. The plan is to convert this economic power into even greater geopolitical influence. The BRICS states largely agree that the West has too much weight when it comes to setting the rules on the international stage.

    However, there is disagreement about the manner and pace of enlargement. Around 40 states are interested in joining the BRICS club, including Saudi Arabia, Argentina and Egypt.

    China pushes the pace

    China, in particular, believes that more members should be welcomed as soon as possible. It supports progress in enlargement and “welcomes more like-minded partners to join the ‘BRICS family’ at an early date,” the Beijing Foreign Ministry said ahead of the summit. Russia also hopes for a speedy enlargement. Moscow could thus once again demonstrate that it is by no means internationally isolated despite the Ukraine war.

    Brazil and India, on the other hand, are more reserved. They fear that admitting too many new members could dilute the BRICS group and thus render it ineffective. Particularly, India fears losing influence if the BRICS group accepts too many new members that are closely aligned with China’s agenda. After all, India has an ongoing border conflict with China and competes with Beijing for regional influence.

    Therefore, a mechanism for admitting new members is expected first to be negotiated in Johannesburg. There will likely also be disagreement between existing BRICS countries about which states should be admitted first. A democratic country like Argentina or rather an autocracy like Saudi Arabia?

    The West can work with BRICS

    Either way, the West will closely follow what the BRICS countries agree on in Johannesburg. “The BRICS forum is an idea whose time has come, and the world should be prepared to interact with it,” writes the think tank Atlantic Council in its assessment of the upcoming summit.

    How the G7 and the West should position themselves vis-à-vis the BRICS depends on which path the alliance takes. “If the BRICS group follows India’s approach, then it can promote cooperation among developing countries and, on that basis, engage with the G7 to discuss ways to reform the international economic and financial system and deal with global problems such as the impacts of climate change,” says the Atlantic Council.

    However, “if China prevails, the BRICS group will likely become another venue for anti-US political activism,” the G7 will likely confront these criticisms. The most effective way of doing this would be by “finding ways to engage with its constructive proposals” to improve the current economic and financial system in order to address the shortfalls in meeting the development needs of the Global South.

    • Geopolitics

    The hybrid war against Taiwan has begun


    Supporters enthusiastically welcome Taiwan’s Vice President William Lai during his stopover in New York. That alone angers Beijing – its air force dispatches jets.


    The saber-rattling in the Indo-Pacific is getting louder. According to the Taiwanese government, fighter jets entered Taiwan’s air defense zone 42 times over the weekend. More than half of the military jets crossed the median line of the Taiwan Strait. The median line is considered the unofficial border between Taiwan and the People’s Republic in the heavily frequented Strait. Eight Chinese ships also took part in the drills.

    The military leadership in Beijing confirmed that the air and naval forces of the People’s Republic had practiced encircling the island on Saturday. “This is a serious warning against Taiwan independence separatist forces colluding with external forces to provoke,” a military spokesperson said. The exercises were accompanied by sharp criticism from Chinese state media over a stopover in the US by Taiwanese politician William Lai.

    Air force deployed out of anger at Lai

    William Lai wants to be the presidential candidate for the ruling Democratic Progressive Party (DPP) in next January’s upcoming elections. He is currently considered the favorite. He is a thorn in Beijing’s side, as he once spoke out in favor of Taiwanese independence. Although he has since retracted this, it is still fresh in everyone’s mind.

    DDP politician Lai had traveled to Paraguay for the inauguration of its president, stopping over in New York on the way and in San Francisco on the way back. Beijing accuses Lai of engaging in political activities there. Paraguay is one of the few countries still maintaining diplomatic relations with Taiwan.

    Taiwan condemned China’s “irrational and provocative behavior.” The US government also strongly criticized the military exercises and urged China to “cease its military, diplomatic, and economic pressure against Taiwan and instead engage in meaningful dialogue with Taiwan.”

    Ignorance towards the hybrid war

    Washington already perceives that Beijing is attempting to steadily and persistently shift the “red lines” using military exercises. In the political arena in Germany, for instance, politicians are at best discussing possible consequences if China were to attack Taiwan militarily. The fact that Beijing has already started the hybrid war against Taiwan and is destabilizing the entire region is something that governments in Europe do not seem to want to acknowledge.

    Hybrid warfare cleverly combines military and non-military means to exert pressure on the enemy. The armed forces’ actions remain below the threshold at which the world public perceives them as war in the true sense of the word. One example was Russia’s annexation of Crimea in 2014, where soldiers without national insignia were deployed. The international reaction remained weak and thus ineffective.

    The results of Camp David

    The summit in Camp David, which was also under the sign of hybrid warfare, may also have caused mistrust in Beijing. US President Joe Biden met with Japan’s head of government, Fumio Kishida, and South Korea’s President Yoon Suk Yeol at his country residence. The meeting also discussed closer military cooperation in East Asia between the three countries. Defense cooperation will be taken to an “unprecedented level,” Biden announced and praised the “next era of cooperation” between the countries.

    Despite Biden’s assurance at the beginning of the meeting that China would not be the primary focus, it nevertheless appeared prominently in the final document. The three heads of government accused China of “dangerous and aggressive behavior.” The three countries “oppose any unilateral attempts to change the status quo by force.”

    Japan, USA and Australia plan exercises

    The three heads of government agreed on a consultation obligation in security crises and the setting up of a hotline for quick information exchange. An early warning system for potential supply chain issues is also planned. In addition, an annual trilateral summit is now scheduled between the USA, Japan and South Korea. “From this moment on, Camp David will be remembered as a historic place,” Yoon said about the summit results.

    Japan’s Prime Minister Kishida said it was a great honor to write a new page in Camp David’s history book. The joint alliance is a success for Biden simply because the two countries historically maintain a somewhat frosty relationship. Recently, however, Seoul and Tokyo have been moving closer together, not least because of the increasing threat posed by China.

    According to the AP news agency, the United States, Japan and Australia have already announced a joint naval exercise in the South China Sea for next week. The US aircraft carrier “USS America” and the helicopter carriers “JS Izumo” and “HMAS Canberra” from Japan and Australia are to participate in the exercise west of the Philippines, representatives of the Philippine security forces told AP on Sunday. Afterward, the commanders are expected to meet with their Philippine counterparts.

    Biden wants to talk with Xi

    At the same time, Biden held out the prospect of talks with China’s President Xi Jinping before the end of the year. “I expect and hope to follow up on our conversation in Bali this fall. That’s my expectation.” Biden and Xi last met in person on the Indonesian island of Bali on the sidelines of the summit of the G20 group of major developed and emerging economies last November. A new opportunity for bilateral talks between the two would be at the G20 summit in New Delhi, India, in September.

    The Russian invasion of Ukraine was also discussed at the Camp David Summit. Biden emphasized the extent of the repercussions of this war beyond Europe. The partners in Asia had also understood this, Biden said. “If we had stood still, what signal would that send to China about Taiwan?”

    • Geopolitics
    • Japan
    • South China Sea
    • South Korea
    • Taiwan
    • USA

    News

    Huawei receives EU research funding

    The EU is providing funding to the Chinese company Huawei. Units of the company based in Europe are said to be participating in 13 grant agreements, including one based in the UK. Executive Vice-President Margrethe Vestager made the announcement on Friday in response to a parliamentary question. Huawei entities based in China were not involved, she said.

    The fact that Huawei is benefiting from EU research programs is surprising in light of the fact that the Commission now considers Huawei a risky company and excluded it from its own networks. Internal Market Commissioner Thierry Breton had urged member states to do the same with the help of the 5G toolbox. However, in its reply, the Commission points out that all funding came from calls under the Horizon Europe 2021 to 2022 work programs – i.e. before the EU Commission decided to ban Huawei.

    Commission assesses the situation differently today

    The question was raised by Dutch MEP Bart Groothuis, who is a member of the Industry Committee as well as the Special Committee on Foreign Influence in the European Parliament. In his question, he referred to a report in the Financial Times, according to which Huawei was involved in eleven Horizon Europe projects dealing with sensitive communication systems.

    The regulation stipulates that all restrictions must be defined in advance in the Horizon Europe work programs, writes the EU Commission. However, the projects in which Huawei is involved were not considered to be a risk at the time of the work programs’ adoption, meaning that the restrictions did not apply.

    In the meantime, however, the EU Commission believes that Huawei and ZTE do indeed pose a much higher risk than other 5G providers. For this reason, it intends to consider this for all relevant future EU funding programs and instruments – including Horizon Europe. vis

    Evergrande files for bankruptcy in the US

    China’s real estate crisis continues to spread: Former market leader Evergrande has filed for creditor protection in the United States. This is an expected interim step in working through an insolvency plan dating back to March, while also being a rare admission of insolvency by the Chinese homebuilder. The company has not filed for bankruptcy in China after its collapse two years ago. Now the limits of denying reality have been reached.

    American investors had loaned Evergrande 19 billion US dollars over the years. These loans were granted as bonds, which were to be repaid gradually. Evergrande cannot do so because it has no money left after the Chinese real estate bubble burst. Evergrande has borrowed more and more since it was founded in 1996 to build more and more properties and sell them at ever higher prices. After Covid had interrupted the cycle, the company ran out of liquidity.

    Like Chinese investors, international creditors will probably wait in vain for repayments. The bankruptcy filing under title 15 of the US Commerce Code is specifically designed to orderly resolve bankruptcy cases with international participation. Evergrande’s headquarters are formally located in the Cayman Islands. fin

    VW sales continued to fall in July

    The Volkswagen Group sold fewer cars in China in July than a year earlier. Sales in what is generally the most important market for the carmaker plummeted by 10.2 percent to 260,400 vehicles, as the company announced in Wolfsburg on Friday.

    VW attributed the decline to the tax incentives the Beijing government used last year to boost the car economy after the Covid lockdowns. The overall market in China also contracted in July. In the first seven months of the year, Volkswagen’s sales figures in China lagged behind the previous year by 2.7 percent.

    Meanwhile, problems with potentially faulty fuel pumps continue to plague carmaker Mercedes-Benz. After a major recall in the USA, the company is now also recalling 231,249 cars in China, as the Chinese supervisory authority SAMR (State Administration for Market Regulation) announced in Beijing. rtr

    • SAMR

    EU report: Democracy in Hong Kong and Macao further weakened

    In its annual report on the situation in Hong Kong, the EU Commission has denounced further curtailments of democratic principles and freedoms. In the past year, Hong Kong’s autonomy and democratic principles and fundamental freedoms have been further weakened, said the report by EU Commission Ursula von der Leyen and EU External Relations Commissioner Josep Borrell. The developments would cast doubt on China’s commitment to the principle of “one country, two systems.” The report says that around ten percent of EU citizens have left Hong Kong due to the strict Covid regulations.

    One example cited is the arrests on national security grounds under the National Security Law. The report states that more than 230 people had been affected by the end of 2022. Charges had been brought against 145 people and five companies. All people charged under the Security Act had also been convicted. In addition, freedom of the press was increasingly being restricted. In the Reporters Without Borders ranking of press freedom for 2022, Hong Kong has fallen 68 ranks to 148 out of 180 countries. The EU also notes similar developments in Macau, on whose situation a report was also published.

    The report also criticizes the arrest of an EU citizen, which according to media reports, is still in custody. The case concerns Joseph John, a Portuguese citizen with the Chinese name Kin Chung Wong, who was arrested in November 2022 for allegedly “publishing seditious articles online disparaging Beijing and local authorities.”

    The exodus: residents flee Hong Kong

    The exodus of Hong Kong residents has accelerated this year due to an increasing lack of freedom: By mid-August, 291,000 more residents had left the former British Crown Colony and current Chinese Special Administrative Region, according to the Committee for Freedom in Hong Kong Foundation. This is the highest level since records began in January 2020.

    Since early 2021, nearly half a million people have left the city, many in the wake of the National Security Law, introduced in 2020, which suppresses basic human rights. ari/flee

    • Ursula von der Leyen

    Opinion

    China’s dangerous secrets

    Brahma Chellaney is a Professor of Strategic Studies at the New Delhi-based Center for Policy Research
    By Brahma Chellaney

    It is well known that China has the world’s largest navy and coast guard – the result of a tenfold increase in military spending since 1995 – which it uses to advance its pugnacious revisionism. But there are also numerous lesser-known – indeed, highly opaque – policies, projects, and activities that are supporting Chinese expansionism and placing the entire world at risk.

    China has a long record of expanding its strategic footprint through stealthy maneuvers that it brazenly denies. For example, in 2017, it established its first overseas military base in Djibouti – a tiny country on the Horn of Africa, which also happens to be deeply in debt to China – while insisting that it had no such plan.

    Today, China is building a naval base in Cambodia, which has leased to China one-fifth of its coastline and some islets. The almost-complete pier at the Chinese-financed Ream Naval Base appears conspicuously similar in size and design to a pier at China’s Djibouti base. China admits to investing in the base, but claims that only Cambodia’s navy will have access to it.

    Realistically, however, it seems likely that China’s navy will use the facility at least for military logistics. This would further strengthen China’s position in the South China Sea, where it has already built seven artificial islands as forward military bases, giving it effective control of this critical corridor between the Pacific and Indian Oceans.

    Geopolitical interests in the construction of dams

    China also takes a highly secretive approach to its massive dam projects on international rivers flowing to other countries from the Chinese-annexed Tibetan Plateau. While the world knows that the rubber-stamp National People’s Congress approved the construction of the world’s largest dam near China’s heavily militarized frontier with India in 2021, there have been no public updates on the project since.

    The dam is supposed to generate three times as much electricity as the Three Gorges Dam, currently the world’s largest hydropower plant, and China has built a new railroad and highway to transport heavy equipment, materials, and workers to the remote project site. We will find out more only when construction is far enough along that the dam can no longer be hidden from commercially available satellite imagery. At that point, it will be a fait accompli.

    China has used this strategy to build elven giant dams on the Mekong, not only gaining geopolitical leverage over its neighbors, but also wreaking environmental havoc. China is now the world’s most dammed country, with more large dams in operation than the rest of the world combined, and it is constructing or planning at least eight more dams on the Mekong alone.

    Debt trap and secrecy

    Opacity has also been a defining feature of the lending binge that has made China the world’s largest sovereign creditor to developing countries. Almost every Chinese loan issued in the last decade has included a sweeping confidentiality clause compelling the borrowing country not to disclose the loan’s terms. Many African, Asian, and Latin American countries have become ensnared in a debt trap, leaving them highly vulnerable to Chinese pressure to pursue policies that advance China’s economic and geopolitical interests. According to one study, the loan contracts give China “broad latitude to cancel loans or accelerate repayment if it disagrees with a borrower’s policies.”

    But there can be no better illustration of the global costs of Chinese secrecy than the COVID-19 pandemic. Had China’s government responded quickly to evidence that a deadly new coronavirus had emerged in Wuhan, warning the public and implementing control measures, the damage could have been contained.

    Instead, the Communist Party of China (CPC) rushed to suppress and discredit information about the outbreak, paving the way for a raging worldwide pandemic that killed almost seven million people and disrupted countless lives and livelihoods. To this day, Chinese obfuscation has prevented scientists from confirming the true origins of COVID-19, which, lest we forget, emerged in China’s main hub for research on super-viruses.

    China’s constant rule violations

    China’s willingness to violate international laws, rules, and norms compounds the opacity problem. The Chinese government has repeatedly reneged on its international commitments, including promises to safeguard the autonomy of Hong Kong and not to militarize features in the South China Sea. It was China’s furtive violation of its commitment not to alter unilaterally the status quo of its disputed Himalayan border with India that triggered a three-year (and counting) military standoff between the two countries.

    There is no reason to expect China to abandon its rule-breaking, its debt-based coercion, or its other malign activities any time soon. Chinese President Xi Jinping – who has strengthened the CPC’s control over information, cutting off outside analysts’ access even to economic data – is now on track to hold power for life, and remains eager to reshape the international order to China’s benefit.

    Expansion by salami tactics

    Ominously, Xi’s appetite for risk appears to be growing. This partly reflects time pressure: Xi seems to believe that China has a narrow window of opportunity to achieve global preeminence before unfavorable demographic, economic, and geopolitical trends catch up with it. But Xi has also been emboldened by the international community’s utter failure to impose meaningful consequences on China for its bad behavior.

    Whereas Russia launched a full-scale invasion of Ukraine, China prefers incrementalism, enabled by stealth and deception, to advance its revisionist agenda. This, together with tremendous economic clout, shields it from a decisive Western response. That is why, barring a major strategic blunder by Xi, China’s salami-slicing expansionism is likely to persist.

    Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research and Fellow at the Robert Bosch Academy in Berlin, is the author of nine books, including Water: Asia’s New Battleground (Georgetown University Press, 2011), for which he won the 2012 Asia Society Bernard Schwartz Book Award.

    Copyright: Project Syndicate, 2023.

    Executive Moves

    Raphael Oen has returned to Germany after four years as Head of Law, Patents and Compliance for Bayer in China. Since the beginning of the month, he has been Head of Law Pharma Global Commercial, also at Bayer, in Berlin.

    Chun Yin Mak will become the new China head of the Japanese advertising agency Dentsu, which has an office in Shanghai. He replaces Deric Wong, who is stepping down after two and a half years for personal reasons. Mak comes from IBM China and was previously with Accenture.

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

    Dessert

    These are not elk grazing here in the wetlands of Yancheng in Jiangsu Province – even if the English name “elk” might suggest so. In North America, however, the elk we know in Europe are called “moose.” This is a species of East Asian deer, a subspecies of the wapiti. The name wapiti (“white rump”) comes from the Shawnee Indians. In Chinese, they are called Milu 麋鹿, which translates as … elk.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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