Table.Briefing: China

Interview with Stefan Liebich + Beijing caps home rent

  • Interview with Stefan Liebich about the Left’s China policy
  • Beijing caps rents to make housing affordable
  • Evergrande chief Xu tries to restore confidence
  • Baidu plans own robot truck
  • IfW Kiel: Container bottlenecks cloud global trade
  • China lags behind Sweden and USA in innovation
  • Xi at UN: China no longer supports coal projects abroad
  • Profile: Nora Sausmikat on China’s role in the world
Dear reader,

In yesterday’s video message addressed to the UN General Assembly, China’s President Xi Jinping reminded us that democracy is a value shared around the globe. It is a classic example of how autocratic systems continually try to claim central concepts of the definition of liberal states for themselves. Their intent is to confuse us by blurring the lines of our perception.

Perhaps that is also why the German Left Party has a divided relationship with the People’s Republic of China. Some older members of its parliamentary group rejoice over the steep rise of a country that was once considered socialist at some point. Others, on the other hand, cannot stand the state-capitalist dictatorship. Under these conditions, the parliamentary group finds it difficult to formulate a common position, as its former foreign policy spokesman Stefan Liebich admits in an interview with Felix Lee.

We, as democratic states, are rightfully proud of our public diversity of opinion. Unfortunately, however, in our political dealings with the People’s Republic it poses a serious dilemma. Because one of the strengths of the Chinese regime is to use dissent in other nations to its advantage. Wherever the other side disagrees, the Chinese Communist Party pokes into these gaps to shape the perception of its own actions and the terms of cooperation. As long as two sides are at odds, the Chinese are happy. The EU can tell you a thing or two about it – or more.

Perhaps some leftists will change their negative attitude towards the People’s Republic again. After all, the second-largest economy is now trying to curb rents, as our Beijing authors report. And the leftists in Berlin, for their part, can tell a thing or two about it. Well, cry about.

Have a pleasant day

Your
Marcel Grzanna
Image of Marcel  Grzanna

Feature

“Merkel’s course was not the worst”

Stefan Liebich, Deputy Chairman of the Left Party in the German Bundestag

Mr. Liebich, as Deputy Chairman of the German-Chinese Parliamentary Group, you have visited China on several occasions and were impressed by developments there. Did you expect China’s leadership to once again crackdown on civil liberties as rigorously as in Mao’s time?

Like many others, I was fascinated by the speed of economic development and the growing prosperity. I also thought it was to be expected that such a development would go hand in hand with a more self-confident role on the international stage. What I did not expect, however, was how much the authoritarian tendencies would intensify internally. I consider the lifting of the term limits of the head of state Xi Jinping to be an ominous development. After all, there were good reasons for introducing term limits after the experience with Mao.

China is more capitalist than Germany. Officially, the People’s Republic is still ruled by a party that calls itself communist. What is your view on the country?

In my opinion, state capitalism is a more fitting description of China’s system. In China, we see capitalism from its bad side, and at the same time, bourgeois democracy is missing – in other words, the worst of both worlds. Nevertheless, there are also communists in China in the positive sense, i.e. people who stand up for poverty reduction and justice. But I would not call the CCP in China communist. To me, it seems to be just a kind of brand.

Your party’s position on Russia is quite clear. How is China being discussed among your party?

There is no unanimous position. We still have some older members who say: How nice that at least one big country remains from the old socialist world. And it also is strong enough to surpass the West. But there are also those who are overly anti-Chinese. Most people in our country see China the way I do: They see a country where certain freedoms that we care about and advocate are being massively curtailed. When the EU-China summit was planned in Leipzig last year, our youth association helped organize the counter-summit.

Would a clearer position not be more desirable?

As foreign policy spokesman, I have tried to steer our position on China in one direction, as we do with all countries: We are not for or against a country, but we judge political developments. We do not take the side of billionaires and oligarchs, we side with the workers. There are things where China has played a good role, such as when it opposed interventionism at a global level early on. But there are areas where China deserves massive criticism: how it dealt with Hong Kong and Xinjiang, but also because it does not recognize international arbitration in The Hague in the conflict over the South China Sea.


Unlike other parties, China does not seem to have a high priority in your party.

The focus on Russia is still more pronounced in our party. However, most in my party have understood that China is now more important on the global stage. A comment on the other parties: For the Green Party, the human rights perspective on China has traditionally been a very strong one, and that’s okay. However, making speeches at the EU level about China’s growing influence while allowing more and more infrastructure to be sold to China with Green government participation – that is inconsistent. What also annoys me is the fact that, during the euro crisis, Greece was put under enormous pressure to privatize state property, but when the Chinese state-owned company Cosco bought the port of Piraeus, Germany got all teary-eyed. I think we are all in a phase of realignment. The definition of seeing China as a competitor, as a partner, and systemic rival, I think, sums it up quite well.

Which of these is most important to you?

We must not step back on our positions when it comes to defending human rights. Nor must we allow ourselves to be intimidated – even when China threatens us with economic consequences. However, I am strictly opposed to falling back into old pointless anti-communist reflexes. There are points where we need to cooperate with everyone worldwide – including monarchically ruled kingdoms and dictatorships – not least in the fight against climate change. I’m annoyed by these double standards: When the EU imposed sanctions on China in spring, I found the reason to be perfectly understandable. At the same time, however, the question arose as to why we do not impose sanctions on Saudi Arabia, for example. We must be very careful not to turn the issue of human rights into a vehicle for asserting economic interests and subjecting its enforcement to pure arbitrariness in the process. I am an advocate of peaceful coexistence. It is not up to us to change the Chinese system, and certainly not militarily. Instead, we must agree on rules at a global level, to which different systems must adhere without exception.


Hong Kong’s autonomous status had been guaranteed to the people under international law after it was returned to China by the UK. Beijing has broken this agreement. How should a country that does not abide by agreements be dealt with?

International law is always invoked when it’s convenient. When Turkey violated international laws by invading Syria to fight its Kurds, arms deliveries to Turkey continued without hindrance. Russia received rightfully widespread international criticism over the illegal annexation of Crimea. And with Hong Kong, I think the criticism is also justified. However, I have made it clear that I do not support anyone who looks at the colonial past through rose-colored glasses. Under the British administration, the people of Hong Kong were not free to choose their own government. By promising one country, two systems, Hong Kong’s citizens were given a hope that is now not being fulfilled. For them, recent developments are a stark step backward. I am in favor of giving our support to opposition forces.


There is talk of decoupling in the US, i.e. breaking away from China economically. The German government is not a fan of this. German business in China is going too well.

It was a mistake to become too dependent on China. We all learned that painfully at the beginning of the pandemic. It is the price of global capitalism if you always buy where production is cheapest. And suddenly we had a huge problem on our hands because Europe could no longer produce its own masks. We should make sure that things that are important to us can also be produced self-sufficiently. Decoupling in the sense of everyone doing their own thing is neither possible nor sensible in this world. But for a company to put itself in a situation where it is dependent on what the word of the Chinese leadership is, of course, wrong. When VW introduces the social scoring system under pressure from the Chinese government, one couldn’t help but wonder what talking about universal values means in practical terms.

What is your position on sanctions?

Our party does not have a consistent position on sanctions. However, we agree that it does not make sense to try to achieve something by military means. Now, NATO is increasingly turning its attention to China, which is completely wrong, not only in terms of the name of the military alliance. Even the fact that the German Bundeswehr has now sent a frigate into the South China Sea is complete nonsense. If blatant misconduct is individually and clearly attributable, I can imagine concrete sanctions. But I think economic sanctions that affect the entire population are wrong.

The German government under Chancellor Angela Merkel has done just that in its dealings with China, namely focusing on dialogue and less confrontation. Was her China policy the right approach?

I think so. I was able to accompany her on several trips to China. She knew exactly how to address sensitive issues. Merkel is certainly not someone who stands on Tiananmen Square with a banner. But she knows where, when and what to address in a face-saving manner. And that’s where she has clearly positioned herself. The problem is rather that the EU can’t find a common ground …

because Merkel is blocking confrontational criticism of China.

She has tried to commit the EU to a common course. On the issue of human rights, EU countries have run in completely different directions, and in this regard, I didn’t find Merkel’s course to be the worst approach. However, I did not think the agreement of the EU-China investment agreement CAI just before the election of the US President was wise. Now the agreement is on ice, but what has stuck is that the EU doesn’t care what happens in Hong Kong, Xinjiang, and Taiwan. The main concern is that the yuan keeps rolling in.

Stefan Liebich, 49, has been a member of the German Bundestag for the Left Party since 2009 and is deputy chairman of the German-Chinese parliamentary group. Until last year, Liebich was also the foreign policy spokesman for his parliamentary group. He chose not to run for the new Bundestag again.

  • Angela Merkel
  • Cosco
  • Economic policy
  • Human Rights
  • KP Chinas
  • Russia
  • Russland

Rent price cap for more affordable housing

There is good news for tenants in China. The government wants to curb exploding rent prices while strengthening the rights of tenants. In the future, the price mechanism of the market will be completely suspended and rents will not be allowed to increase by more than five percent annually, according to the plan (China.Table reported).

Vice Minister of Housing Ni Hong justifies the necessity of house renting control with the fact that conditions on the Chinese real estate market have changed. Unlike in Germany, for example, it was and is customary in China to buy an own apartment at a very young age. In the recent past, however, prices have reached such a high level that many young people can no longer afford a purchase.

In the southern Chinese city of Shenzhen, for example, an employee now has to put 43.5 times the average monthly wage in the city on the table to be able to afford an apartment. Demand for rental apartments has grown accordingly, and so have their prices. According to Ni, 70 percent of newcomers and young people in major cities now rent an apartment instead of buying one.

“New urban residents and young people have only been working for a relatively short time and have low incomes, so their capacity to buy a home or pay the rent is too low,” Ni said at the launch of the rent cap plans. The new set of rules is intended to slow down the rise of rents in the future.

Renting is no longer frowned upon

Renting has long been frowned upon, as owning an apartment in China is considered an even greater status symbol than owning a car, and is also considered the basis for retirement provision. However, the rapid price development of recent years is making the dream of owning real estate unaffordable for an increasing number of people, and renting is becoming the only alternative for many.

By contrast, anyone who took a chance in Beijing three decades ago and invested a few hundred yuan per square meter in an apartment made a fortune. Of course, life has become much more expensive over the years – but the return on investment is still impressive: Today, the average price of an apartment in the heart of Beijing is over ¥100,000 (about €12,800) per square meter. Outside the city center, prices still range at about ¥50,000. The situation is similar in other major cities.

For years, the government has been struggling with two problems in the real estate market: prices have spiked relentlessly, pushing ordinary workers from cities further and further out into the suburbs. The second problem: In anticipation of high revenues, the construction industry has taken up loans in masses. But because real estate companies have a hard time getting rid of their overpriced properties in some regions, revenue remains absent. The massive troubles of China’s second-largest real estate developer, Evergrande, which has debts of $300 billion, are also partly due to this miscalculation (China.Table reported).

Evergrande threatened with bankruptcy

Beijing has imposed “three red lines” on its companies. For example, the ratio of liabilities to assets must not exceed 70 percent. In addition, the net gearing ratio should not exceed 100 percent. The third red line drawn by the government concerns the ratio of liquid assets to short-term liabilities of companies, which must be above a factor of 1. By April of this year, Evergrande was already no longer able to comply with any of the three conditions and as a result, no longer receive access to new loans. Now bankruptcy is looming.

State media are talking about a “widespread clean-up of the real estate market”. In many places, stricter rules for granting loans are intended to curb the extent to which property was merely bought for speculation. For example, the number of apartments an individual is allowed to officially own is limited. Interest rates on property loans have also been temporarily increased. The supply of affordable housing is to be “effectively promoted” and the supply of “affordable rental housing increased”, the five-year plan mandates. It stressed, “that houses are used for living and not for speculation.”

Real estate platforms in sights

Over the recent months, many major Chinese cities have also announced numerous measures to better protect tenants’ rights. These include a ban on landlords charging deposits of more than one month’s rent. Authorities also vowed to crack down on abusive practices by real estate companies and real estate websites, such as disproportionately high agency fees for tenants.

The government’s intervention is already felt after just a few weeks. According to a survey among analysts by Reuters, growth in real estate prices in China is likely to be slower this year than initially expected. Prices are currently expected to rise by an average of only 3.5 percent after observers in June had forecast a rise of 4.9 percent for the year as a whole. Joern Petring/Greogor Koppenburg

  • Evergrande

News

Evergrande wants to put ‘darkest hour’ behind it

After the stock price of southern Chinese real estate company Evergrande continued to plummet on Tuesday (China.Table reported), Xu Jiayin, chairman of the board of directors of the troubled real estate giant, spread hope in a letter addressed to his employees. It was certain that the company would put “its darkest hour” behind it, wrote Xu, whose Cantonese name is Hui Ka Yuan. Local media reported this on Tuesday.

At the same time, he promised that the company would complete its real estate projects as promised and fulfill its responsibilities to buyers, investors, and banks. A spokesman for Evergrande, China’s second-largest real estate developer, confirmed the contents of the letter to Reuters.

Evergrande had already defaulted on bond interest payments in June. Just earlier this month, Evergrande warned of new liquidity and default risks (China.Table reported). Evergrande has accumulated a debt mountain of over $300 billion and recently announced its intention to pay off investors in its asset management products with real estate.

Shares in the former flagship company have plunged more than 84 percent since the start of the year, weighing heavily on investors on stock exchanges in New York, Frankfurt, Hong Kong and Tokyo earlier this week. niw

  • Debt
  • Evergrande
  • Finance
  • Real Estate
  • Xu Jiayin

Baidu launches robot truck on the market

Chinese internet company Baidu is expanding its ambitions in electric mobility. The company, which operates China’s eponymous and largest internet search engine, has announced the series production of a fully electric truck. In 2023, the so-called “robot truck” Xingtu is expected to hit the market. The vehicle will initially be equipped with Level 3 automation, which will later be increased to Level 4. Level 3 enables autonomous driving in traffic jams or on highways. Its system performs operations such as blinking, changing lanes or keeping in lane autonomously without the driver having to constantly monitor the system.

Baidu developed the Xingtu in a joint venture called DeepWay together with the Chinese financial services provider Lionbridge. In addition to its advanced self-driving technology, the battery replacement system, which allows the vehicle’s battery to be replaced within a few minutes and eliminates the need for potentially long charging times, is expected to make it attractive to customers.

Baidu has been working on its Apollo self-driving technology since 2013, primarily to be used in electric cars. In March, the company formed a joint venture with privately-owned carmaker Geely, which specializes in the development and production of e-cars and plans to launch its first model next year(China.Table reported). grz

  • Autoindustrie

IfW Kiel: port bottlenecks impair trade

The closure of the Chinese ports of Ningbo-Zhoushan and Yantian is having a negative impact on global trade. The Kiel Institute for the World Economy (IfW) estimates trade flows for 75 countries around the globe through its Kiel Trade Indicator and has currently calculated that prolonged congestion of freight ports is leading to stagnation of the international flow of goods (China.Table reported).

“The closure of terminals in China is leaving its mark and impairs the exchange of goods. There are currently no signs of a lasting improvement of the situation, which clouds prospects for international trade. This is likely to be felt through rising prices and continuing shortages of certain goods, including the Christmas trade,” says Vincent Stamer, Head of Kiel Trade Indicator. “Christmas is not canceled, but especially for products from China and Asia, missing deliveries or higher prices are to be feared,” Stamer warns further.

While China’s exports in September recorded a nominal and seasonally adjusted increase of 6.2 percent compared to the previous month according to the Kiel Trade Indicator, German exports and global trade stagnated. EU exports also failed to rise above the previous month’s level (-0.1 percent), while imports were slightly up (+0.7 percent). For the USA, the Kiel Trade Indicator shows slightly negative balances in both trade directions (exports: -0.5 percent; imports: -0.7 percent).

Cargo volumes in the Red Sea – the main maritime trade route between China and Europe – are currently 14 percent lower than would be expected under normal circumstances, the IfW warns. niw

  • IfW
  • Shipping
  • Trade

Technology patents: China ranks 12th

Despite its ambition to assert technological leadership in the 21st century, the People’s Republic of China is not among the top ten most innovative economies in this field. In the annual Global Innovation Index by the World Intellectual Property Organization, China has moved up two spots, but still only ranks 12th. The first four spots are held by Switzerland, Sweden, the USA, and the UK.

The WIPO ranking assesses the technological innovative strength of 132 countries. Last year, the number of patent applications at WIPO rose by 3.5 percent compared to the previous year, despite Covid. Among Asian countries, the People’s Republic even falls behind South Korea with 5th and Singapore with 8th. Meanwhile, WIPO attests to Vietnam, Thailand, and the Philippines the potential “to change the global innovation landscape forever,” due to great progress.

In key industrial areas, the world must nevertheless reckon with China. Figures by the Cyber Creative Institute in Tokyo attribute the country with 40 percent of all global patent applications related to future 6G technology in mobile communications (China.Table reported). 6G is expected to be ten times faster than 5G technology and is estimated to be commercially available by 2030. grz

  • 6G
  • Patents
  • Technology
  • WIPO

Xi: No more coal projects abroad

To curb global climate change, state and party leader Xi Jinping pledged during his video message at the 76th UN General Assembly yesterday that his nation will no longer fund coal projects abroad.

Prior to the speech, the announcement was one of the top 5 news stories at the Global Times, the mouthpiece of the Chinese Communist Party. Xi originally intended to be represented, but then announced the positions of the People’s Republic in a recorded video message.

China had set a target date for climate neutrality for the first time at the UN General Assembly last year. “We aim to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060,” Xi had announced in his video message last year, backing the Paris climate change agreement. niw

  • Climate
  • Geopolitics
  • Xi Jinping

Profile

Nora Sausmikat – a life dedicated to China’s civil society

Nora Sausmikat, Head of the China Desk of the environmental and human rights organization Urgewald e.V.

When Nora Sausmikat stood on stage in the old Tea House Theatre in Chengdu at the end of the 1980s, newspapers, and television reported on the young European who had mastered Chinese opera. She has trained for a long time for this moment. Wearing a huge, colorful headdress and traditional costume, Sausmikat performs head voice and acrobatics. “I felt like a little star,” she says.

The Sinology student spent an initially carefree stay abroad in Chengdu from 1988 on, teaching English to young Chinese and discovering delicious food at the market behind Sichuan University. China and its culture, but above all its people with their great hospitality, quickly grow on her. She experiences political discussions with Chinese and foreign intellectuals, imagining herself in a seemingly open culture. “There was a spirit of optimism,” says Sausmikat.

The experiences of 1989 were defining

June 1989 changed everything. Hundreds of thousands of often young people demonstrate for democracy in many Chinese cities in the spring, including Chengdu. On the night of June 3rd to 4th, the situation in Beijing escalated. The Chinese military brutally put down the burgeoning democracy movement. The exact death toll remains unclear – some sources speak of thousands of dead. In Chengdu, too, Sausmikat witnesses tanks rolling down the street and tear gas obscuring the view.

The Tiananmen Massacre sends the country into shock – and changes student life from one day to the next. “Most of the other students left the dormitory, brought themselves to safety,” says Sausmikat. Only she and an Australian woman stayed behind for the time being, while friends and teachers of the university disappeared into police custody.

Eventually, Sausmikat also flees to a friend in Xiamen, 2000 kilometers away. She experiences a country in fear and turmoil. At a train station, she witnesses a public flogging. On the trains, no one wants to talk about the past events – the government spreads the narrative that demonstrators had begun with the violence. While Sausmikat is still in China, the Berlin Wall falls. The newspaper China Daily reports about it in a side note on the last page.

Building the China Program of the Asienhaus foundation

Influenced by her experiences, Sausmikat soon devoted more time to political research. “Topics such as participation and opinion-forming have never left me,” she says. Chinese civil society has shaped the course of her life ever since. She writes her doctoral thesis on the memory culture of Chinese generations and spends several long research stays in China. Today, Sausmikat heads the China Desk of the German environmental and human rights organization Urgewald, based in Sassenberg, Westphalia.

However, her path there first led to Cologne, where she was extensively involved in setting up the China Program of the Asienhaus foundation in 2008. She developed an exchange program between European and Chinese NGOs. “We wanted to break down barriers, create familiarity through personal encounters and build long-term partnerships.” She says one goal was also to convey a more nuanced image of China and its diverse society in Germany. “Around the Olympic Games in Beijing in 2008, coverage was very one-sided and negative,” she says.

Also, because she had experienced a renewed opening of Chinese society from the 2000s onwards, tolerated by a government that – many years later – again allowed more exchange and pluralism. At that time, she got to know numerous Chinese people, whom she learned to admire because of the way they “always acted creatively, even in the face of adversity”.

NGOs need to chant party slogans

In 2013, President Xi Jinping takes office. For the second time since 1989, Sausmikat is confronted with a radical turning point in the course of the Chinese government. This time, however, it happens more insidiously. Xi has gradually established a totalitarian personality cult, and exchange with Chinese NGOs has become increasingly difficult, says Sausmikat. Today, the government dictates exactly which topics are allowed to be discussed. It is no problem to exchange ideas about technical solutions for climate protection, for example. “But anything that revolves around human rights is taboo.”

In 2019, the foundation’s exchange program will end, in part because funding is running out. “But it was also increasingly difficult for me to back it up,” says Sausmikat. Chinese partners were no longer allowed to speak freely, more and more restrictive conditions had to be signed. NGOs today need to chant the party’s slogans. “It is barely possible anymore to design an exchange program in such a way that it is harmless for everyone involved.”

Urgewald follows the money trail

Sausmikat starts her new job at Urgewald in 2019 but now with a different approach: dialogue within an official program has given way to directed political work. “I didn’t want to settle for compromise anymore.” Urgewald tackles China’s role in the world – and its financial economy. “We follow the money trail,” says Sausmikat. After all, no major construction project that violates human rights, for example with forced relocations, is possible without financial backup.

Her work focuses, for example, on the Beijing-based Asian Infrastructure Investment Bank (AIIB). “We review the impacts on human rights and the environment of projects financed by the AIIB.” Since the multilateral bank also receives German taxpayer money, this is an efficient means to denounce human rights violations. “We put pressure on investors, banks, and politicians.” In addition, the organization is a contact for Chinese small farmers and climate activists.

Her view of China has changed: “For a long time, I fought one-sided negative reporting. Unfortunately, the reality of today is that one is more likely to overlook human rights violations.” Jan Wittenbrink

  • AIIB
  • Civil Society
  • Human Rights
  • NGO
  • Nora Sausmikat
  • Tiananmen Massacre

Executive Moves

Jean Liu, executive of ride-hailing company DiDi Chuxing has announced her retirement from the company, according to Reuters. Liu studied information technology, first at Beijing University, then at Harvard. She worked as an analyst at Goldman Sachs in Hong Kong for 12 years before joining Didi Chuxing in 2014.

Jennifer Chua is the new CEO of travel fintech company Smooth Xperience in Singapore. Chua has more than 20 years of experience in the travel industry. She was previously vice president for the Asia Pacific at Clicktripz, a travel technology company. During her career, Chua has held various senior positions at Skyscanner, Hotel.de, Travelocity, Parkroyal Hotels and Resorts and Amadeus GDS Singapore.

Dessert

The Chinese Moon Festival also calls for the right outfit. These ladies in a Beijing park dressed up as the moon goddess Cháng’é (嫦娥) on their day off. According to Chinese mythology, the moon goddess lives, well, on the moon, always with the Jade Rabbit (玉兔, yùtù) by her side. Both characters, by the way, are also the namesakes of the Chinese lunar mission. Cháng’é is the name of the space probe, yùtù that of the lunar rover.

China.Table Editors

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    • Interview with Stefan Liebich about the Left’s China policy
    • Beijing caps rents to make housing affordable
    • Evergrande chief Xu tries to restore confidence
    • Baidu plans own robot truck
    • IfW Kiel: Container bottlenecks cloud global trade
    • China lags behind Sweden and USA in innovation
    • Xi at UN: China no longer supports coal projects abroad
    • Profile: Nora Sausmikat on China’s role in the world
    Dear reader,

    In yesterday’s video message addressed to the UN General Assembly, China’s President Xi Jinping reminded us that democracy is a value shared around the globe. It is a classic example of how autocratic systems continually try to claim central concepts of the definition of liberal states for themselves. Their intent is to confuse us by blurring the lines of our perception.

    Perhaps that is also why the German Left Party has a divided relationship with the People’s Republic of China. Some older members of its parliamentary group rejoice over the steep rise of a country that was once considered socialist at some point. Others, on the other hand, cannot stand the state-capitalist dictatorship. Under these conditions, the parliamentary group finds it difficult to formulate a common position, as its former foreign policy spokesman Stefan Liebich admits in an interview with Felix Lee.

    We, as democratic states, are rightfully proud of our public diversity of opinion. Unfortunately, however, in our political dealings with the People’s Republic it poses a serious dilemma. Because one of the strengths of the Chinese regime is to use dissent in other nations to its advantage. Wherever the other side disagrees, the Chinese Communist Party pokes into these gaps to shape the perception of its own actions and the terms of cooperation. As long as two sides are at odds, the Chinese are happy. The EU can tell you a thing or two about it – or more.

    Perhaps some leftists will change their negative attitude towards the People’s Republic again. After all, the second-largest economy is now trying to curb rents, as our Beijing authors report. And the leftists in Berlin, for their part, can tell a thing or two about it. Well, cry about.

    Have a pleasant day

    Your
    Marcel Grzanna
    Image of Marcel  Grzanna

    Feature

    “Merkel’s course was not the worst”

    Stefan Liebich, Deputy Chairman of the Left Party in the German Bundestag

    Mr. Liebich, as Deputy Chairman of the German-Chinese Parliamentary Group, you have visited China on several occasions and were impressed by developments there. Did you expect China’s leadership to once again crackdown on civil liberties as rigorously as in Mao’s time?

    Like many others, I was fascinated by the speed of economic development and the growing prosperity. I also thought it was to be expected that such a development would go hand in hand with a more self-confident role on the international stage. What I did not expect, however, was how much the authoritarian tendencies would intensify internally. I consider the lifting of the term limits of the head of state Xi Jinping to be an ominous development. After all, there were good reasons for introducing term limits after the experience with Mao.

    China is more capitalist than Germany. Officially, the People’s Republic is still ruled by a party that calls itself communist. What is your view on the country?

    In my opinion, state capitalism is a more fitting description of China’s system. In China, we see capitalism from its bad side, and at the same time, bourgeois democracy is missing – in other words, the worst of both worlds. Nevertheless, there are also communists in China in the positive sense, i.e. people who stand up for poverty reduction and justice. But I would not call the CCP in China communist. To me, it seems to be just a kind of brand.

    Your party’s position on Russia is quite clear. How is China being discussed among your party?

    There is no unanimous position. We still have some older members who say: How nice that at least one big country remains from the old socialist world. And it also is strong enough to surpass the West. But there are also those who are overly anti-Chinese. Most people in our country see China the way I do: They see a country where certain freedoms that we care about and advocate are being massively curtailed. When the EU-China summit was planned in Leipzig last year, our youth association helped organize the counter-summit.

    Would a clearer position not be more desirable?

    As foreign policy spokesman, I have tried to steer our position on China in one direction, as we do with all countries: We are not for or against a country, but we judge political developments. We do not take the side of billionaires and oligarchs, we side with the workers. There are things where China has played a good role, such as when it opposed interventionism at a global level early on. But there are areas where China deserves massive criticism: how it dealt with Hong Kong and Xinjiang, but also because it does not recognize international arbitration in The Hague in the conflict over the South China Sea.


    Unlike other parties, China does not seem to have a high priority in your party.

    The focus on Russia is still more pronounced in our party. However, most in my party have understood that China is now more important on the global stage. A comment on the other parties: For the Green Party, the human rights perspective on China has traditionally been a very strong one, and that’s okay. However, making speeches at the EU level about China’s growing influence while allowing more and more infrastructure to be sold to China with Green government participation – that is inconsistent. What also annoys me is the fact that, during the euro crisis, Greece was put under enormous pressure to privatize state property, but when the Chinese state-owned company Cosco bought the port of Piraeus, Germany got all teary-eyed. I think we are all in a phase of realignment. The definition of seeing China as a competitor, as a partner, and systemic rival, I think, sums it up quite well.

    Which of these is most important to you?

    We must not step back on our positions when it comes to defending human rights. Nor must we allow ourselves to be intimidated – even when China threatens us with economic consequences. However, I am strictly opposed to falling back into old pointless anti-communist reflexes. There are points where we need to cooperate with everyone worldwide – including monarchically ruled kingdoms and dictatorships – not least in the fight against climate change. I’m annoyed by these double standards: When the EU imposed sanctions on China in spring, I found the reason to be perfectly understandable. At the same time, however, the question arose as to why we do not impose sanctions on Saudi Arabia, for example. We must be very careful not to turn the issue of human rights into a vehicle for asserting economic interests and subjecting its enforcement to pure arbitrariness in the process. I am an advocate of peaceful coexistence. It is not up to us to change the Chinese system, and certainly not militarily. Instead, we must agree on rules at a global level, to which different systems must adhere without exception.


    Hong Kong’s autonomous status had been guaranteed to the people under international law after it was returned to China by the UK. Beijing has broken this agreement. How should a country that does not abide by agreements be dealt with?

    International law is always invoked when it’s convenient. When Turkey violated international laws by invading Syria to fight its Kurds, arms deliveries to Turkey continued without hindrance. Russia received rightfully widespread international criticism over the illegal annexation of Crimea. And with Hong Kong, I think the criticism is also justified. However, I have made it clear that I do not support anyone who looks at the colonial past through rose-colored glasses. Under the British administration, the people of Hong Kong were not free to choose their own government. By promising one country, two systems, Hong Kong’s citizens were given a hope that is now not being fulfilled. For them, recent developments are a stark step backward. I am in favor of giving our support to opposition forces.


    There is talk of decoupling in the US, i.e. breaking away from China economically. The German government is not a fan of this. German business in China is going too well.

    It was a mistake to become too dependent on China. We all learned that painfully at the beginning of the pandemic. It is the price of global capitalism if you always buy where production is cheapest. And suddenly we had a huge problem on our hands because Europe could no longer produce its own masks. We should make sure that things that are important to us can also be produced self-sufficiently. Decoupling in the sense of everyone doing their own thing is neither possible nor sensible in this world. But for a company to put itself in a situation where it is dependent on what the word of the Chinese leadership is, of course, wrong. When VW introduces the social scoring system under pressure from the Chinese government, one couldn’t help but wonder what talking about universal values means in practical terms.

    What is your position on sanctions?

    Our party does not have a consistent position on sanctions. However, we agree that it does not make sense to try to achieve something by military means. Now, NATO is increasingly turning its attention to China, which is completely wrong, not only in terms of the name of the military alliance. Even the fact that the German Bundeswehr has now sent a frigate into the South China Sea is complete nonsense. If blatant misconduct is individually and clearly attributable, I can imagine concrete sanctions. But I think economic sanctions that affect the entire population are wrong.

    The German government under Chancellor Angela Merkel has done just that in its dealings with China, namely focusing on dialogue and less confrontation. Was her China policy the right approach?

    I think so. I was able to accompany her on several trips to China. She knew exactly how to address sensitive issues. Merkel is certainly not someone who stands on Tiananmen Square with a banner. But she knows where, when and what to address in a face-saving manner. And that’s where she has clearly positioned herself. The problem is rather that the EU can’t find a common ground …

    because Merkel is blocking confrontational criticism of China.

    She has tried to commit the EU to a common course. On the issue of human rights, EU countries have run in completely different directions, and in this regard, I didn’t find Merkel’s course to be the worst approach. However, I did not think the agreement of the EU-China investment agreement CAI just before the election of the US President was wise. Now the agreement is on ice, but what has stuck is that the EU doesn’t care what happens in Hong Kong, Xinjiang, and Taiwan. The main concern is that the yuan keeps rolling in.

    Stefan Liebich, 49, has been a member of the German Bundestag for the Left Party since 2009 and is deputy chairman of the German-Chinese parliamentary group. Until last year, Liebich was also the foreign policy spokesman for his parliamentary group. He chose not to run for the new Bundestag again.

    • Angela Merkel
    • Cosco
    • Economic policy
    • Human Rights
    • KP Chinas
    • Russia
    • Russland

    Rent price cap for more affordable housing

    There is good news for tenants in China. The government wants to curb exploding rent prices while strengthening the rights of tenants. In the future, the price mechanism of the market will be completely suspended and rents will not be allowed to increase by more than five percent annually, according to the plan (China.Table reported).

    Vice Minister of Housing Ni Hong justifies the necessity of house renting control with the fact that conditions on the Chinese real estate market have changed. Unlike in Germany, for example, it was and is customary in China to buy an own apartment at a very young age. In the recent past, however, prices have reached such a high level that many young people can no longer afford a purchase.

    In the southern Chinese city of Shenzhen, for example, an employee now has to put 43.5 times the average monthly wage in the city on the table to be able to afford an apartment. Demand for rental apartments has grown accordingly, and so have their prices. According to Ni, 70 percent of newcomers and young people in major cities now rent an apartment instead of buying one.

    “New urban residents and young people have only been working for a relatively short time and have low incomes, so their capacity to buy a home or pay the rent is too low,” Ni said at the launch of the rent cap plans. The new set of rules is intended to slow down the rise of rents in the future.

    Renting is no longer frowned upon

    Renting has long been frowned upon, as owning an apartment in China is considered an even greater status symbol than owning a car, and is also considered the basis for retirement provision. However, the rapid price development of recent years is making the dream of owning real estate unaffordable for an increasing number of people, and renting is becoming the only alternative for many.

    By contrast, anyone who took a chance in Beijing three decades ago and invested a few hundred yuan per square meter in an apartment made a fortune. Of course, life has become much more expensive over the years – but the return on investment is still impressive: Today, the average price of an apartment in the heart of Beijing is over ¥100,000 (about €12,800) per square meter. Outside the city center, prices still range at about ¥50,000. The situation is similar in other major cities.

    For years, the government has been struggling with two problems in the real estate market: prices have spiked relentlessly, pushing ordinary workers from cities further and further out into the suburbs. The second problem: In anticipation of high revenues, the construction industry has taken up loans in masses. But because real estate companies have a hard time getting rid of their overpriced properties in some regions, revenue remains absent. The massive troubles of China’s second-largest real estate developer, Evergrande, which has debts of $300 billion, are also partly due to this miscalculation (China.Table reported).

    Evergrande threatened with bankruptcy

    Beijing has imposed “three red lines” on its companies. For example, the ratio of liabilities to assets must not exceed 70 percent. In addition, the net gearing ratio should not exceed 100 percent. The third red line drawn by the government concerns the ratio of liquid assets to short-term liabilities of companies, which must be above a factor of 1. By April of this year, Evergrande was already no longer able to comply with any of the three conditions and as a result, no longer receive access to new loans. Now bankruptcy is looming.

    State media are talking about a “widespread clean-up of the real estate market”. In many places, stricter rules for granting loans are intended to curb the extent to which property was merely bought for speculation. For example, the number of apartments an individual is allowed to officially own is limited. Interest rates on property loans have also been temporarily increased. The supply of affordable housing is to be “effectively promoted” and the supply of “affordable rental housing increased”, the five-year plan mandates. It stressed, “that houses are used for living and not for speculation.”

    Real estate platforms in sights

    Over the recent months, many major Chinese cities have also announced numerous measures to better protect tenants’ rights. These include a ban on landlords charging deposits of more than one month’s rent. Authorities also vowed to crack down on abusive practices by real estate companies and real estate websites, such as disproportionately high agency fees for tenants.

    The government’s intervention is already felt after just a few weeks. According to a survey among analysts by Reuters, growth in real estate prices in China is likely to be slower this year than initially expected. Prices are currently expected to rise by an average of only 3.5 percent after observers in June had forecast a rise of 4.9 percent for the year as a whole. Joern Petring/Greogor Koppenburg

    • Evergrande

    News

    Evergrande wants to put ‘darkest hour’ behind it

    After the stock price of southern Chinese real estate company Evergrande continued to plummet on Tuesday (China.Table reported), Xu Jiayin, chairman of the board of directors of the troubled real estate giant, spread hope in a letter addressed to his employees. It was certain that the company would put “its darkest hour” behind it, wrote Xu, whose Cantonese name is Hui Ka Yuan. Local media reported this on Tuesday.

    At the same time, he promised that the company would complete its real estate projects as promised and fulfill its responsibilities to buyers, investors, and banks. A spokesman for Evergrande, China’s second-largest real estate developer, confirmed the contents of the letter to Reuters.

    Evergrande had already defaulted on bond interest payments in June. Just earlier this month, Evergrande warned of new liquidity and default risks (China.Table reported). Evergrande has accumulated a debt mountain of over $300 billion and recently announced its intention to pay off investors in its asset management products with real estate.

    Shares in the former flagship company have plunged more than 84 percent since the start of the year, weighing heavily on investors on stock exchanges in New York, Frankfurt, Hong Kong and Tokyo earlier this week. niw

    • Debt
    • Evergrande
    • Finance
    • Real Estate
    • Xu Jiayin

    Baidu launches robot truck on the market

    Chinese internet company Baidu is expanding its ambitions in electric mobility. The company, which operates China’s eponymous and largest internet search engine, has announced the series production of a fully electric truck. In 2023, the so-called “robot truck” Xingtu is expected to hit the market. The vehicle will initially be equipped with Level 3 automation, which will later be increased to Level 4. Level 3 enables autonomous driving in traffic jams or on highways. Its system performs operations such as blinking, changing lanes or keeping in lane autonomously without the driver having to constantly monitor the system.

    Baidu developed the Xingtu in a joint venture called DeepWay together with the Chinese financial services provider Lionbridge. In addition to its advanced self-driving technology, the battery replacement system, which allows the vehicle’s battery to be replaced within a few minutes and eliminates the need for potentially long charging times, is expected to make it attractive to customers.

    Baidu has been working on its Apollo self-driving technology since 2013, primarily to be used in electric cars. In March, the company formed a joint venture with privately-owned carmaker Geely, which specializes in the development and production of e-cars and plans to launch its first model next year(China.Table reported). grz

    • Autoindustrie

    IfW Kiel: port bottlenecks impair trade

    The closure of the Chinese ports of Ningbo-Zhoushan and Yantian is having a negative impact on global trade. The Kiel Institute for the World Economy (IfW) estimates trade flows for 75 countries around the globe through its Kiel Trade Indicator and has currently calculated that prolonged congestion of freight ports is leading to stagnation of the international flow of goods (China.Table reported).

    “The closure of terminals in China is leaving its mark and impairs the exchange of goods. There are currently no signs of a lasting improvement of the situation, which clouds prospects for international trade. This is likely to be felt through rising prices and continuing shortages of certain goods, including the Christmas trade,” says Vincent Stamer, Head of Kiel Trade Indicator. “Christmas is not canceled, but especially for products from China and Asia, missing deliveries or higher prices are to be feared,” Stamer warns further.

    While China’s exports in September recorded a nominal and seasonally adjusted increase of 6.2 percent compared to the previous month according to the Kiel Trade Indicator, German exports and global trade stagnated. EU exports also failed to rise above the previous month’s level (-0.1 percent), while imports were slightly up (+0.7 percent). For the USA, the Kiel Trade Indicator shows slightly negative balances in both trade directions (exports: -0.5 percent; imports: -0.7 percent).

    Cargo volumes in the Red Sea – the main maritime trade route between China and Europe – are currently 14 percent lower than would be expected under normal circumstances, the IfW warns. niw

    • IfW
    • Shipping
    • Trade

    Technology patents: China ranks 12th

    Despite its ambition to assert technological leadership in the 21st century, the People’s Republic of China is not among the top ten most innovative economies in this field. In the annual Global Innovation Index by the World Intellectual Property Organization, China has moved up two spots, but still only ranks 12th. The first four spots are held by Switzerland, Sweden, the USA, and the UK.

    The WIPO ranking assesses the technological innovative strength of 132 countries. Last year, the number of patent applications at WIPO rose by 3.5 percent compared to the previous year, despite Covid. Among Asian countries, the People’s Republic even falls behind South Korea with 5th and Singapore with 8th. Meanwhile, WIPO attests to Vietnam, Thailand, and the Philippines the potential “to change the global innovation landscape forever,” due to great progress.

    In key industrial areas, the world must nevertheless reckon with China. Figures by the Cyber Creative Institute in Tokyo attribute the country with 40 percent of all global patent applications related to future 6G technology in mobile communications (China.Table reported). 6G is expected to be ten times faster than 5G technology and is estimated to be commercially available by 2030. grz

    • 6G
    • Patents
    • Technology
    • WIPO

    Xi: No more coal projects abroad

    To curb global climate change, state and party leader Xi Jinping pledged during his video message at the 76th UN General Assembly yesterday that his nation will no longer fund coal projects abroad.

    Prior to the speech, the announcement was one of the top 5 news stories at the Global Times, the mouthpiece of the Chinese Communist Party. Xi originally intended to be represented, but then announced the positions of the People’s Republic in a recorded video message.

    China had set a target date for climate neutrality for the first time at the UN General Assembly last year. “We aim to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060,” Xi had announced in his video message last year, backing the Paris climate change agreement. niw

    • Climate
    • Geopolitics
    • Xi Jinping

    Profile

    Nora Sausmikat – a life dedicated to China’s civil society

    Nora Sausmikat, Head of the China Desk of the environmental and human rights organization Urgewald e.V.

    When Nora Sausmikat stood on stage in the old Tea House Theatre in Chengdu at the end of the 1980s, newspapers, and television reported on the young European who had mastered Chinese opera. She has trained for a long time for this moment. Wearing a huge, colorful headdress and traditional costume, Sausmikat performs head voice and acrobatics. “I felt like a little star,” she says.

    The Sinology student spent an initially carefree stay abroad in Chengdu from 1988 on, teaching English to young Chinese and discovering delicious food at the market behind Sichuan University. China and its culture, but above all its people with their great hospitality, quickly grow on her. She experiences political discussions with Chinese and foreign intellectuals, imagining herself in a seemingly open culture. “There was a spirit of optimism,” says Sausmikat.

    The experiences of 1989 were defining

    June 1989 changed everything. Hundreds of thousands of often young people demonstrate for democracy in many Chinese cities in the spring, including Chengdu. On the night of June 3rd to 4th, the situation in Beijing escalated. The Chinese military brutally put down the burgeoning democracy movement. The exact death toll remains unclear – some sources speak of thousands of dead. In Chengdu, too, Sausmikat witnesses tanks rolling down the street and tear gas obscuring the view.

    The Tiananmen Massacre sends the country into shock – and changes student life from one day to the next. “Most of the other students left the dormitory, brought themselves to safety,” says Sausmikat. Only she and an Australian woman stayed behind for the time being, while friends and teachers of the university disappeared into police custody.

    Eventually, Sausmikat also flees to a friend in Xiamen, 2000 kilometers away. She experiences a country in fear and turmoil. At a train station, she witnesses a public flogging. On the trains, no one wants to talk about the past events – the government spreads the narrative that demonstrators had begun with the violence. While Sausmikat is still in China, the Berlin Wall falls. The newspaper China Daily reports about it in a side note on the last page.

    Building the China Program of the Asienhaus foundation

    Influenced by her experiences, Sausmikat soon devoted more time to political research. “Topics such as participation and opinion-forming have never left me,” she says. Chinese civil society has shaped the course of her life ever since. She writes her doctoral thesis on the memory culture of Chinese generations and spends several long research stays in China. Today, Sausmikat heads the China Desk of the German environmental and human rights organization Urgewald, based in Sassenberg, Westphalia.

    However, her path there first led to Cologne, where she was extensively involved in setting up the China Program of the Asienhaus foundation in 2008. She developed an exchange program between European and Chinese NGOs. “We wanted to break down barriers, create familiarity through personal encounters and build long-term partnerships.” She says one goal was also to convey a more nuanced image of China and its diverse society in Germany. “Around the Olympic Games in Beijing in 2008, coverage was very one-sided and negative,” she says.

    Also, because she had experienced a renewed opening of Chinese society from the 2000s onwards, tolerated by a government that – many years later – again allowed more exchange and pluralism. At that time, she got to know numerous Chinese people, whom she learned to admire because of the way they “always acted creatively, even in the face of adversity”.

    NGOs need to chant party slogans

    In 2013, President Xi Jinping takes office. For the second time since 1989, Sausmikat is confronted with a radical turning point in the course of the Chinese government. This time, however, it happens more insidiously. Xi has gradually established a totalitarian personality cult, and exchange with Chinese NGOs has become increasingly difficult, says Sausmikat. Today, the government dictates exactly which topics are allowed to be discussed. It is no problem to exchange ideas about technical solutions for climate protection, for example. “But anything that revolves around human rights is taboo.”

    In 2019, the foundation’s exchange program will end, in part because funding is running out. “But it was also increasingly difficult for me to back it up,” says Sausmikat. Chinese partners were no longer allowed to speak freely, more and more restrictive conditions had to be signed. NGOs today need to chant the party’s slogans. “It is barely possible anymore to design an exchange program in such a way that it is harmless for everyone involved.”

    Urgewald follows the money trail

    Sausmikat starts her new job at Urgewald in 2019 but now with a different approach: dialogue within an official program has given way to directed political work. “I didn’t want to settle for compromise anymore.” Urgewald tackles China’s role in the world – and its financial economy. “We follow the money trail,” says Sausmikat. After all, no major construction project that violates human rights, for example with forced relocations, is possible without financial backup.

    Her work focuses, for example, on the Beijing-based Asian Infrastructure Investment Bank (AIIB). “We review the impacts on human rights and the environment of projects financed by the AIIB.” Since the multilateral bank also receives German taxpayer money, this is an efficient means to denounce human rights violations. “We put pressure on investors, banks, and politicians.” In addition, the organization is a contact for Chinese small farmers and climate activists.

    Her view of China has changed: “For a long time, I fought one-sided negative reporting. Unfortunately, the reality of today is that one is more likely to overlook human rights violations.” Jan Wittenbrink

    • AIIB
    • Civil Society
    • Human Rights
    • NGO
    • Nora Sausmikat
    • Tiananmen Massacre

    Executive Moves

    Jean Liu, executive of ride-hailing company DiDi Chuxing has announced her retirement from the company, according to Reuters. Liu studied information technology, first at Beijing University, then at Harvard. She worked as an analyst at Goldman Sachs in Hong Kong for 12 years before joining Didi Chuxing in 2014.

    Jennifer Chua is the new CEO of travel fintech company Smooth Xperience in Singapore. Chua has more than 20 years of experience in the travel industry. She was previously vice president for the Asia Pacific at Clicktripz, a travel technology company. During her career, Chua has held various senior positions at Skyscanner, Hotel.de, Travelocity, Parkroyal Hotels and Resorts and Amadeus GDS Singapore.

    Dessert

    The Chinese Moon Festival also calls for the right outfit. These ladies in a Beijing park dressed up as the moon goddess Cháng’é (嫦娥) on their day off. According to Chinese mythology, the moon goddess lives, well, on the moon, always with the Jade Rabbit (玉兔, yùtù) by her side. Both characters, by the way, are also the namesakes of the Chinese lunar mission. Cháng’é is the name of the space probe, yùtù that of the lunar rover.

    China.Table Editors

    CHINA.TABLE EDITORIAL OFFICE

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