How much nonsense is a Chinese ambassador actually allowed to say before he is demoted to licking stamps? China’s representative in France has repeatedly drawn attention as an anti-diplomat with his recent remarks. Now it is even said that his babbling about the status of EU member states was done as a private individual on a TV program. It is beyond comprehension that anything in the political workings of the People’s Republic is relegated to the private sphere without consequences.
It remains to be seen whether the ambassador will remain in office. If so, then the question arises whether his remarks do reflect Beijing’s opinion in the end. Just like the propaganda of extremists who first say something unspeakable, then wait for the outrage to pass before rowing back. While in the meantime, they have changed what can be said in public.
The Australian government now regards the territorial claims of the People’s Republic in the South China Sea as a threat to its own security. The country wants to invest in military bases in the country’s north and in long-range missiles. Australia is thus a good example of the massive increase in arms spending around the world. The peace research institute Sipri presented the latest figures on Monday, which Michael Radunski examined for us.
Meanwhile, Finn Mayer-Kuckuk spoke with Germany’s former Environment Minister Juergen Trittin about the dependence of German industry on China. His theory: Volkswagen is currently massively reducing its dependencies. Unintentionally, of course, because its market share is rapidly disappearing. If the fact that German carmakers are dependent on China’s billions were not so dramatic for the German economy, Trittin could be accused of biting sarcasm.
You were in China this March. What were your impressions?
From the Chinese side, there was a noticeable effort to restore relations with Europe and Germany, especially after the Covid years.
German Foreign Minister Annalena Baerbock has since also been to Beijing. But there was a lingering feeling afterward, that China had paid more attention to France’s Emmanuel Macron as a representative of Europe.
If the Chinese leadership thinks it can find a rift between Germany and France, it is mistaken. That is an illusion. Parallel to the statements in China, Macron ordered a frigate to cross the Taiwan Strait. In the interview, Macron formulated a well-known political goal: That it is not in Europe’s interest to end up in a bipolarity between China and the USA, but that we as Europe want to become more resilient and independent in a multipolar world. The German government also shares this view.
But hasn’t Macron already caused damage by the timing of his remarks?
I would perhaps not have expressed myself in exactly the same way, but there has also been a lot of interpretation. Some have depicted Macron and von der Leyen as playing the roles of “good cop” and “bad cop”. But both of them are cops. Developing stronger political and economic resilience is not something that we Germans can organize on our own. It can only be done on a European scale. And that is the reason why, in my eyes, the biggest change in Germany’s China policy is its Europeanization.
Keyword China strategy. There are two drafts from ministries led by the Greens. Where is the comprehensive joint paper of the German government coalition?
That will come, as planned, after the national security strategy. That will be the umbrella strategy and it will come soon. It basically outlines how and where we want to reposition ourselves. For a long time, there was the assumption that our democratic-capitalist ratio was also the ratio of the world, ‘It’s the economy, stupid’ à la Bill Clinton. This is not true for Russia, it has long been true for China, but there it is increasingly supplemented and overlaid by a nationalist narrative. We counter this with a strategy of integrated security. A triad of defense, resilience and sustainability, meaning security from war, security of our societal model and the safeguarding of the natural livelihoods. That is the overarching strategy.
What does this mean for the integrated China strategy?
I believe that we will first remain in the order of adopting the national security strategy in the next few weeks and then the underlying sector-specific or regionally oriented strategies, such as Indo-Pacific, on China, or the foreign climate policy strategy, which is becoming very central here.
Have you already heard signals from the Chancellery about how they think about it? The Chancellor is said to be more like the former German government.
You do the Chancellor an injustice there. If you listen to his speech in Singapore or read the essay he published in the FAZ in the run-up to the G20, you will find a recurring element. He frequently emphasizes: We live in a multipolar world. That is an element of demarcation from naïve transatlanticism. I deliberately say naïve because we are currently in excellent cooperation with our American friends. Even when we have massive conflicts of interest, we still manage to talk to each other and find solutions. But we also know that this could not always be the case. The Chancellor also sees it that way, and I think this basic stance of the Chancellor is right.
If you talk to business representatives at the moment, including SMEs, you hear a lot of concern about business in China. The government has to convince the business community to play along with the strategy and also accept hardships. That will not be easy, I assume?
No, it is not easy. Above all, we have to be clear about the individual dependencies. I believe that we have to explain to the people what the price is, for example, for the relocation of certain strategic industries or for new construction, for example in production, pharmaceuticals, photovoltaics and the like. It is no longer possible to go and say: We produce where it is cheapest or where there are the most subsidies. That also has a price – also for the people and society here.
Where can greater resilience be achieved with relative ease, where will it be difficult?
We can actually diversify in terms of raw material supply. Rare earth elements are not really rare. The bigger problem is the third dependency, the market dependency. We have a huge problem with the three automobile companies and with BASF. In other words, there are four companies of systemic importance from a German perspective that have an implicit state guarantee in Germany. But market dependence also affects a large part of the 5,000 small and medium-sized enterprises that, while they make 40 percent of their revenues in China, get about 60 percent of their returns from there. In this respect, the smaller companies are no different from BMW or VW. They cannot simply say, I’m moving production to Vietnam, because the whole ecosystem around it, regarding suppliers and the like, does not simply migrate with them. We do indeed have a long process ahead of us.
Is the process getting underway now?
What has changed is that BASF, VW, Daimler, but also rather small and medium-sized companies have now somewhat realized that they have a problem. They refused to admit it for far too long. The Covid restrictions in Shanghai, for example, were a wake-up call about the system they are operating in.
VW, however, is going in the other direction. The company now needs to invest even more in China, they claim, because it needs new models for China. Is the problem really fully grasped in all its scope?
VW is on its way to inadvertently dramatically reducing its market dependence if you look at sales trends. While BYD sells 150,000 EVs, VW does not sell 10,000.
The auto show has indeed revealed dramatic trends here.
That is now the reality. And that has to do, among other things, with the fact that the German automotive industry still believed for far too long that Christian Lindner and Ulf Poschardt were the real car customers. They cling to the little-boy dream of the humming car with a steering wheel, while in China, the focus is suddenly on completely different values such as digitalization and automation. I was at Tgood, a company in Qingdao that manufactures charging stations and voltage converters. I was given an impressive demonstration of how far the integration of electric cars into the grid has progressed in China. There, EVs already serve as storage for renewable energy in everyday life; the charging process is controlled as a buffer depending on the availability of electricity. For us, this is still a utopia.
The Chinese are not only very good at producing cars, but also solar cells. And the silicon for the solar cells comes to a large extent from Xinjiang.
You’re asking the wrong person here. I was once responsible for building up the world’s leading photovoltaic industry in Germany. After that, there was a government in which an Economics Minister Philipp Roesler and an Environment Minister Peter Altmaier announced that they would scrap the whole thing. The result was that the debt financing for the necessary investments of the German photovoltaic industry went down the drain, the production lines developed for it went to China and 100,000 people in Germany lost their jobs. That was no evil intent by the Chinese, the Christian Democratic Union (CDU) and the Free Democratic Party (FDP) are responsible for that. We will pay a high price for having to relocate it back again, 20 years later.
So Germany should revive its solar industry? With high subsidies?
If we want to achieve the expansion targets, there is no way around it. For climate action reasons, too, we will need to have our own photovoltaic industry.
Juergen Trittin has been a member of the Bundestag since 1998 and a member of the Committee on Foreign Affairs since 2014. He served as Federal Minister for the Environment between 1998 and 2005.
Never before have countries spent so much money on weapons, defense and ammunition as they did in 2022. According to the peace research institute Sipri in Stockholm on Monday, a total of 2.24 trillion US dollars has been invested in armies worldwide in the past year – a sad record. For many Europeans, the main reason for this development seems obvious: the Russian invasion of Ukraine.
That is true – but only in part. Because the Sipri researchers have identified a second important reason for the spending boom: the growing tensions in East Asia. And China is at the very center of this.
By far the highest military spending in 2022 was once again in the USA with 877 billion US dollars. However, China already follows in second with an estimated 292 billion US dollars. Adjusted for inflation, Beijing increased its spending by 4.2 percent. However, China tends to spend much more, Xiao Liang told Table.Media. “China’s military spending is extremely opaque,” says Sipri’s China expert.
Sipri notes that China’s official numbers do not include all areas, such as paramilitary police forces, pensions or the large complex of research and development of new weapons systems. Despite these limitations, the latest Sipri study shows that China’s military spending has increased for the last 28 consecutive years, 63 percent since 2013 alone.
Within this spending, profound shifts can be observed. For years, China has had the largest army in the world; last year, it was said to have around two million soldiers. But not just since the Russian problems in Ukraine is it clear that mere mass is no longer winning wars.
And so Xi Jinping, as the supreme military commander, is significantly overhauling the Chinese People’s Liberation Army (PLA). His goal: By 2049, China is supposed to have a “world-class military”, strong enough to compete with its great rival, the USA. At the last Party Congress, Xi announced that China’s military is to become a “Great Wall of Steel”.
Instead of mass, they want to shine with class, i.e. high-tech. According to Sipri researcher Liang, the focus is increasingly shifting to new technologies: unmanned, armed drones or weapon systems based on artificial intelligence.
With considerable success: recently leaked secret US military documents confirm the capabilities Chinese drones already have. According to the Washington Post, the US military is convinced that Chinese drones of the type WZ-8 can travel at least three times the speed of sound and at very high altitudes. This would enable them to spy on US naval activities around Taiwan and American military bases.
Capabilities that do not go unnoticed in other countries. “China is already the world’s largest arms exporter in the field of drones,” says Liang. Especially in the Middle East and Asia, Chinese drones are selling like hotcakes.
According to the secret documents, the US military believes that China’s military has “almost certainly” deployed its first unmanned aerial vehicle (UAV) unit at a base near Shanghai. The unit is under the so-called Eastern Theatre Command, the PLA command that is also responsible for enforcing China’s sovereignty claims over Taiwan.
But the People’s Republic is also making great strides in classic domains. According to Liang, China is massively investing in its navy, apparently in order to increase its striking power against Taiwan and in the South China Sea as a whole. With regard to the ever-increasing military drills in the Taiwan Strait, Taiwan’s “foreign minister” recently warned that China is clearly preparing for war against Taiwan.
And that has consequences. Japan recently increased its defense spending by 5.9 percent. Tokyo has not spent so much money on its military since 1960. “Japan is undergoing a profound change in its military policy,” Liang said. It seems the post-war constraints Japan has imposed on its military spending and military capabilities are being lifted, he added.
The situation is similar in Australia. There, too, defense spending is to be increased significantly in response to the growing threat from China. According to reports, the government in Canberra is planning to spend 12.6 billion US dollars. The reason for this is a military report published on Monday. It states that China is arming itself more than any country since the Second World War. Beijing’s arms program and its strategic goals in the Indo-Pacific are considered unclear. Accordingly, Australia reportedly equips its military bases in the north and invests more money in long-range missiles.
“In many countries in the region, China is perceived as a threat,” says Liang. As a result, Indonesia, Malaysia, Vietnam or Australia are also trying to keep up with China’s military expansion. The Sipri studies show that the countries in Asia and Oceania spent a combined 575 billion US dollars on their armies. Since 2013, this is a 45 percent increase. Liang notes: “A veritable arms race has been set in motion in the Indo-Pacific.”
The Ministry of Foreign Affairs in Beijing has corrected the remarks made by its Ambassador to France. The official representative of the People’s Republic there, Lu Shaye, questioned the status of former Soviet republics as sovereign states in an interview. On Monday, the Foreign Ministry clarified: “China respects the status of the former Soviet republics as sovereign countries after the Soviet Union’s dissolution,” said a spokeswoman.
These remarks caused outrage, particularly in the Baltic States, all three of which are members of the European Union. But the passage is also controversial because China is under suspicion of supporting the Russian war against Ukraine – another former Soviet republic.
Meanwhile, the Chinese Embassy in Paris also issued a statement calling Lu’s statements a private matter. They should therefore not be over-interpreted. Lu said in a TV interview “Even these ex-Soviet countries don’t have an effective status in international law because there was no international agreement to materialize their status as sovereign countries”.
In response to the outrage in Europe, Chinese media published an interview with China’s EU ambassador in Brussels, Fu Cong, on Monday. He referred to the importance of European-Chinese relations beyond the Ukraine war. However, Fu also emphasized the recognition of state sovereignty by the People’s Republic. At the same time, he portrayed China as one of the victims of the Ukraine war and underlined the importance of his government’s diplomatic efforts in resolving the conflict.
After EU Commission President Ursula von der Leyen, EU High Representative for Foreign Affairs, Josep Borrell, has now also announced a new China policy. “Systemic rivalry has increased, competition has intensified,” said Borrell after a meeting of EU foreign ministers in Luxembourg. The USA, too, is now adopting a different stance on China. The EU must react to this, he said.
Regarding Lu’s remarks, Borrell said: “Beijing has distanced itself from the unacceptable remarks by its ambassador.” The case is now closed. However, not all EU countries seem to see it that way. The Lithuanian Minister of Foreign Affairs, Gabrielius Landsbergis, announced that the three Baltic countries – which used to be part of the Soviet Union – would summon Chinese representatives. Luxembourg’s Foreign Minister Jean Asselborn spoke of a “mistake”.
There was a consensus that relations with China had to be reassessed. The assessment that China is a partner, competitor and systemic rival at the same time still applies, said Borrell. However, these three axes would have to be reweighted and “balanced”. Borrell wants to present the new position at the next informal meeting of EU foreign ministers. Subsequently, the matter will also be discussed by the European Council. grz/bos/ari
Tesla plans to export cars manufactured in China to North America for the first time. This was reported by Reuters on Monday, citing an insider. According to the report, Tesla began producing the “Model Y” for the Canadian market in Shanghai at the start of the month. In the current quarter, just under 9000 such cars are to be produced, as is said to be evident from a production log.
Tesla stands to benefit twice from this approach: Firstly, the starting price of the Model Y in Canada of 59,990 Canadian dollars (around 40,000 euros) is still significantly higher than the Chinese starting price of 261,900 yuan (around 35,000 euros). So even with shipping costs, the US automaker should make more profit. On the other hand, Tesla would thus avoid the tough price battles on the Chinese market.
What is grotesque from an economic-political perspective is that the Model Y qualifies for the Canadian government’s full subsidy of 5,000 Canadian dollars. Thus, the Canadian government would indirectly subsidize a US factory in China. rad
Kosta Karakolidis did not come to Qingdao to take his feet up: The German wants to turn the Siempelkamp conglomerate into the market leader for materials plants in China. His guiding question as CEO and CTO of Siempelkamp Qingdao: How to make the company competitive and achieve a better market situation?
During the interview with Table.Media, Karakolidis drives over Qingdao’s massive Jiaozhouwan Bridge into the Sino-German Ecopark, where Siempelkamp has been residing since 2014. Looking at Qingdao’s skyline, he explains the business model: Siempelkamp manufactures house-sized material plants in China which in turn produce MPV, USB or particleboard. The special feature is the high quality of the correspondingly expensive plants. A plant is offered at prices starting at 15 million euros; depending on the customer’s requirements, the price can go up.
And how is business? Very good, says Karakolidis. There is now a Siempelkamp plant in almost every Chinese province and the production in Qingdao is almost fully utilized. This, he says, is thanks to the Chinese construction industry: Growth and urbanization mean new buildings, new furniture, and thus new manufacturers of particleboard who, in the best case, will sooner or later call Karakolidis to buy a Siempelkamp plant. “You have to be here as a company, China is like a whole global market.”
Nevertheless, there are also challenges: The trade war between the US and China has stretched the delivery times for electronic components that Siempelkamps needs for its own high-tech plants, the CEO explains. That is why he is trying to order earlier from manufacturers and plan ahead. “We’re already sweating a little bit, but it’s working.”
The excellent cooperation with Ecopark and the local government is helpful, he says. Siempelkamp does not have any problems as a foreign company in China – unlike many others. On the contrary: “We have a very good cooperation on a very fair basis.” Therefore, Siempelkamp is also focusing on localization: The company wants to find more suppliers in China and establish local supply chains. Partly in order to become more attractive in terms of price and to ensure faster delivery times, Karakolidis explains.
Karakolidis himself has been working for Siempelkamp since 2021. Before that, he worked for nine years at Green River Panels in Thailand, where he purchased and built wood plants. Today he benefits from this experience: “I have an understanding of what customers need. And that helps me to act as a supplier,” he explains. The prospect of being able to contribute his skills and the desire for a new challenge – in the end, that was all it took to bring Karakolidis from Bangkok to Qingdao.
But he does feel a little homesick for Germany, Karakolidis admits. Leaving friends and family behind was not always easy. What is lost is the feeling of home that Karakolidis knows from Ludwigshafen, where he grew up as the son of Greek immigrants. Nevertheless, in Thailand and China he was able to fulfill his ambitions and get to know the world. “I wanted more,” Karakolidis sums up. “China and Asia have given me a lot.” Jonathan Lehrer
Jacaranda trees are in full bloom in the southwestern Chinese provincial capital of Kunming (Yunnan): Every spring, the trumpet trees are a real eye-catcher amidst the urban monotony – and are soothing for the soul of every city dweller.
How much nonsense is a Chinese ambassador actually allowed to say before he is demoted to licking stamps? China’s representative in France has repeatedly drawn attention as an anti-diplomat with his recent remarks. Now it is even said that his babbling about the status of EU member states was done as a private individual on a TV program. It is beyond comprehension that anything in the political workings of the People’s Republic is relegated to the private sphere without consequences.
It remains to be seen whether the ambassador will remain in office. If so, then the question arises whether his remarks do reflect Beijing’s opinion in the end. Just like the propaganda of extremists who first say something unspeakable, then wait for the outrage to pass before rowing back. While in the meantime, they have changed what can be said in public.
The Australian government now regards the territorial claims of the People’s Republic in the South China Sea as a threat to its own security. The country wants to invest in military bases in the country’s north and in long-range missiles. Australia is thus a good example of the massive increase in arms spending around the world. The peace research institute Sipri presented the latest figures on Monday, which Michael Radunski examined for us.
Meanwhile, Finn Mayer-Kuckuk spoke with Germany’s former Environment Minister Juergen Trittin about the dependence of German industry on China. His theory: Volkswagen is currently massively reducing its dependencies. Unintentionally, of course, because its market share is rapidly disappearing. If the fact that German carmakers are dependent on China’s billions were not so dramatic for the German economy, Trittin could be accused of biting sarcasm.
You were in China this March. What were your impressions?
From the Chinese side, there was a noticeable effort to restore relations with Europe and Germany, especially after the Covid years.
German Foreign Minister Annalena Baerbock has since also been to Beijing. But there was a lingering feeling afterward, that China had paid more attention to France’s Emmanuel Macron as a representative of Europe.
If the Chinese leadership thinks it can find a rift between Germany and France, it is mistaken. That is an illusion. Parallel to the statements in China, Macron ordered a frigate to cross the Taiwan Strait. In the interview, Macron formulated a well-known political goal: That it is not in Europe’s interest to end up in a bipolarity between China and the USA, but that we as Europe want to become more resilient and independent in a multipolar world. The German government also shares this view.
But hasn’t Macron already caused damage by the timing of his remarks?
I would perhaps not have expressed myself in exactly the same way, but there has also been a lot of interpretation. Some have depicted Macron and von der Leyen as playing the roles of “good cop” and “bad cop”. But both of them are cops. Developing stronger political and economic resilience is not something that we Germans can organize on our own. It can only be done on a European scale. And that is the reason why, in my eyes, the biggest change in Germany’s China policy is its Europeanization.
Keyword China strategy. There are two drafts from ministries led by the Greens. Where is the comprehensive joint paper of the German government coalition?
That will come, as planned, after the national security strategy. That will be the umbrella strategy and it will come soon. It basically outlines how and where we want to reposition ourselves. For a long time, there was the assumption that our democratic-capitalist ratio was also the ratio of the world, ‘It’s the economy, stupid’ à la Bill Clinton. This is not true for Russia, it has long been true for China, but there it is increasingly supplemented and overlaid by a nationalist narrative. We counter this with a strategy of integrated security. A triad of defense, resilience and sustainability, meaning security from war, security of our societal model and the safeguarding of the natural livelihoods. That is the overarching strategy.
What does this mean for the integrated China strategy?
I believe that we will first remain in the order of adopting the national security strategy in the next few weeks and then the underlying sector-specific or regionally oriented strategies, such as Indo-Pacific, on China, or the foreign climate policy strategy, which is becoming very central here.
Have you already heard signals from the Chancellery about how they think about it? The Chancellor is said to be more like the former German government.
You do the Chancellor an injustice there. If you listen to his speech in Singapore or read the essay he published in the FAZ in the run-up to the G20, you will find a recurring element. He frequently emphasizes: We live in a multipolar world. That is an element of demarcation from naïve transatlanticism. I deliberately say naïve because we are currently in excellent cooperation with our American friends. Even when we have massive conflicts of interest, we still manage to talk to each other and find solutions. But we also know that this could not always be the case. The Chancellor also sees it that way, and I think this basic stance of the Chancellor is right.
If you talk to business representatives at the moment, including SMEs, you hear a lot of concern about business in China. The government has to convince the business community to play along with the strategy and also accept hardships. That will not be easy, I assume?
No, it is not easy. Above all, we have to be clear about the individual dependencies. I believe that we have to explain to the people what the price is, for example, for the relocation of certain strategic industries or for new construction, for example in production, pharmaceuticals, photovoltaics and the like. It is no longer possible to go and say: We produce where it is cheapest or where there are the most subsidies. That also has a price – also for the people and society here.
Where can greater resilience be achieved with relative ease, where will it be difficult?
We can actually diversify in terms of raw material supply. Rare earth elements are not really rare. The bigger problem is the third dependency, the market dependency. We have a huge problem with the three automobile companies and with BASF. In other words, there are four companies of systemic importance from a German perspective that have an implicit state guarantee in Germany. But market dependence also affects a large part of the 5,000 small and medium-sized enterprises that, while they make 40 percent of their revenues in China, get about 60 percent of their returns from there. In this respect, the smaller companies are no different from BMW or VW. They cannot simply say, I’m moving production to Vietnam, because the whole ecosystem around it, regarding suppliers and the like, does not simply migrate with them. We do indeed have a long process ahead of us.
Is the process getting underway now?
What has changed is that BASF, VW, Daimler, but also rather small and medium-sized companies have now somewhat realized that they have a problem. They refused to admit it for far too long. The Covid restrictions in Shanghai, for example, were a wake-up call about the system they are operating in.
VW, however, is going in the other direction. The company now needs to invest even more in China, they claim, because it needs new models for China. Is the problem really fully grasped in all its scope?
VW is on its way to inadvertently dramatically reducing its market dependence if you look at sales trends. While BYD sells 150,000 EVs, VW does not sell 10,000.
The auto show has indeed revealed dramatic trends here.
That is now the reality. And that has to do, among other things, with the fact that the German automotive industry still believed for far too long that Christian Lindner and Ulf Poschardt were the real car customers. They cling to the little-boy dream of the humming car with a steering wheel, while in China, the focus is suddenly on completely different values such as digitalization and automation. I was at Tgood, a company in Qingdao that manufactures charging stations and voltage converters. I was given an impressive demonstration of how far the integration of electric cars into the grid has progressed in China. There, EVs already serve as storage for renewable energy in everyday life; the charging process is controlled as a buffer depending on the availability of electricity. For us, this is still a utopia.
The Chinese are not only very good at producing cars, but also solar cells. And the silicon for the solar cells comes to a large extent from Xinjiang.
You’re asking the wrong person here. I was once responsible for building up the world’s leading photovoltaic industry in Germany. After that, there was a government in which an Economics Minister Philipp Roesler and an Environment Minister Peter Altmaier announced that they would scrap the whole thing. The result was that the debt financing for the necessary investments of the German photovoltaic industry went down the drain, the production lines developed for it went to China and 100,000 people in Germany lost their jobs. That was no evil intent by the Chinese, the Christian Democratic Union (CDU) and the Free Democratic Party (FDP) are responsible for that. We will pay a high price for having to relocate it back again, 20 years later.
So Germany should revive its solar industry? With high subsidies?
If we want to achieve the expansion targets, there is no way around it. For climate action reasons, too, we will need to have our own photovoltaic industry.
Juergen Trittin has been a member of the Bundestag since 1998 and a member of the Committee on Foreign Affairs since 2014. He served as Federal Minister for the Environment between 1998 and 2005.
Never before have countries spent so much money on weapons, defense and ammunition as they did in 2022. According to the peace research institute Sipri in Stockholm on Monday, a total of 2.24 trillion US dollars has been invested in armies worldwide in the past year – a sad record. For many Europeans, the main reason for this development seems obvious: the Russian invasion of Ukraine.
That is true – but only in part. Because the Sipri researchers have identified a second important reason for the spending boom: the growing tensions in East Asia. And China is at the very center of this.
By far the highest military spending in 2022 was once again in the USA with 877 billion US dollars. However, China already follows in second with an estimated 292 billion US dollars. Adjusted for inflation, Beijing increased its spending by 4.2 percent. However, China tends to spend much more, Xiao Liang told Table.Media. “China’s military spending is extremely opaque,” says Sipri’s China expert.
Sipri notes that China’s official numbers do not include all areas, such as paramilitary police forces, pensions or the large complex of research and development of new weapons systems. Despite these limitations, the latest Sipri study shows that China’s military spending has increased for the last 28 consecutive years, 63 percent since 2013 alone.
Within this spending, profound shifts can be observed. For years, China has had the largest army in the world; last year, it was said to have around two million soldiers. But not just since the Russian problems in Ukraine is it clear that mere mass is no longer winning wars.
And so Xi Jinping, as the supreme military commander, is significantly overhauling the Chinese People’s Liberation Army (PLA). His goal: By 2049, China is supposed to have a “world-class military”, strong enough to compete with its great rival, the USA. At the last Party Congress, Xi announced that China’s military is to become a “Great Wall of Steel”.
Instead of mass, they want to shine with class, i.e. high-tech. According to Sipri researcher Liang, the focus is increasingly shifting to new technologies: unmanned, armed drones or weapon systems based on artificial intelligence.
With considerable success: recently leaked secret US military documents confirm the capabilities Chinese drones already have. According to the Washington Post, the US military is convinced that Chinese drones of the type WZ-8 can travel at least three times the speed of sound and at very high altitudes. This would enable them to spy on US naval activities around Taiwan and American military bases.
Capabilities that do not go unnoticed in other countries. “China is already the world’s largest arms exporter in the field of drones,” says Liang. Especially in the Middle East and Asia, Chinese drones are selling like hotcakes.
According to the secret documents, the US military believes that China’s military has “almost certainly” deployed its first unmanned aerial vehicle (UAV) unit at a base near Shanghai. The unit is under the so-called Eastern Theatre Command, the PLA command that is also responsible for enforcing China’s sovereignty claims over Taiwan.
But the People’s Republic is also making great strides in classic domains. According to Liang, China is massively investing in its navy, apparently in order to increase its striking power against Taiwan and in the South China Sea as a whole. With regard to the ever-increasing military drills in the Taiwan Strait, Taiwan’s “foreign minister” recently warned that China is clearly preparing for war against Taiwan.
And that has consequences. Japan recently increased its defense spending by 5.9 percent. Tokyo has not spent so much money on its military since 1960. “Japan is undergoing a profound change in its military policy,” Liang said. It seems the post-war constraints Japan has imposed on its military spending and military capabilities are being lifted, he added.
The situation is similar in Australia. There, too, defense spending is to be increased significantly in response to the growing threat from China. According to reports, the government in Canberra is planning to spend 12.6 billion US dollars. The reason for this is a military report published on Monday. It states that China is arming itself more than any country since the Second World War. Beijing’s arms program and its strategic goals in the Indo-Pacific are considered unclear. Accordingly, Australia reportedly equips its military bases in the north and invests more money in long-range missiles.
“In many countries in the region, China is perceived as a threat,” says Liang. As a result, Indonesia, Malaysia, Vietnam or Australia are also trying to keep up with China’s military expansion. The Sipri studies show that the countries in Asia and Oceania spent a combined 575 billion US dollars on their armies. Since 2013, this is a 45 percent increase. Liang notes: “A veritable arms race has been set in motion in the Indo-Pacific.”
The Ministry of Foreign Affairs in Beijing has corrected the remarks made by its Ambassador to France. The official representative of the People’s Republic there, Lu Shaye, questioned the status of former Soviet republics as sovereign states in an interview. On Monday, the Foreign Ministry clarified: “China respects the status of the former Soviet republics as sovereign countries after the Soviet Union’s dissolution,” said a spokeswoman.
These remarks caused outrage, particularly in the Baltic States, all three of which are members of the European Union. But the passage is also controversial because China is under suspicion of supporting the Russian war against Ukraine – another former Soviet republic.
Meanwhile, the Chinese Embassy in Paris also issued a statement calling Lu’s statements a private matter. They should therefore not be over-interpreted. Lu said in a TV interview “Even these ex-Soviet countries don’t have an effective status in international law because there was no international agreement to materialize their status as sovereign countries”.
In response to the outrage in Europe, Chinese media published an interview with China’s EU ambassador in Brussels, Fu Cong, on Monday. He referred to the importance of European-Chinese relations beyond the Ukraine war. However, Fu also emphasized the recognition of state sovereignty by the People’s Republic. At the same time, he portrayed China as one of the victims of the Ukraine war and underlined the importance of his government’s diplomatic efforts in resolving the conflict.
After EU Commission President Ursula von der Leyen, EU High Representative for Foreign Affairs, Josep Borrell, has now also announced a new China policy. “Systemic rivalry has increased, competition has intensified,” said Borrell after a meeting of EU foreign ministers in Luxembourg. The USA, too, is now adopting a different stance on China. The EU must react to this, he said.
Regarding Lu’s remarks, Borrell said: “Beijing has distanced itself from the unacceptable remarks by its ambassador.” The case is now closed. However, not all EU countries seem to see it that way. The Lithuanian Minister of Foreign Affairs, Gabrielius Landsbergis, announced that the three Baltic countries – which used to be part of the Soviet Union – would summon Chinese representatives. Luxembourg’s Foreign Minister Jean Asselborn spoke of a “mistake”.
There was a consensus that relations with China had to be reassessed. The assessment that China is a partner, competitor and systemic rival at the same time still applies, said Borrell. However, these three axes would have to be reweighted and “balanced”. Borrell wants to present the new position at the next informal meeting of EU foreign ministers. Subsequently, the matter will also be discussed by the European Council. grz/bos/ari
Tesla plans to export cars manufactured in China to North America for the first time. This was reported by Reuters on Monday, citing an insider. According to the report, Tesla began producing the “Model Y” for the Canadian market in Shanghai at the start of the month. In the current quarter, just under 9000 such cars are to be produced, as is said to be evident from a production log.
Tesla stands to benefit twice from this approach: Firstly, the starting price of the Model Y in Canada of 59,990 Canadian dollars (around 40,000 euros) is still significantly higher than the Chinese starting price of 261,900 yuan (around 35,000 euros). So even with shipping costs, the US automaker should make more profit. On the other hand, Tesla would thus avoid the tough price battles on the Chinese market.
What is grotesque from an economic-political perspective is that the Model Y qualifies for the Canadian government’s full subsidy of 5,000 Canadian dollars. Thus, the Canadian government would indirectly subsidize a US factory in China. rad
Kosta Karakolidis did not come to Qingdao to take his feet up: The German wants to turn the Siempelkamp conglomerate into the market leader for materials plants in China. His guiding question as CEO and CTO of Siempelkamp Qingdao: How to make the company competitive and achieve a better market situation?
During the interview with Table.Media, Karakolidis drives over Qingdao’s massive Jiaozhouwan Bridge into the Sino-German Ecopark, where Siempelkamp has been residing since 2014. Looking at Qingdao’s skyline, he explains the business model: Siempelkamp manufactures house-sized material plants in China which in turn produce MPV, USB or particleboard. The special feature is the high quality of the correspondingly expensive plants. A plant is offered at prices starting at 15 million euros; depending on the customer’s requirements, the price can go up.
And how is business? Very good, says Karakolidis. There is now a Siempelkamp plant in almost every Chinese province and the production in Qingdao is almost fully utilized. This, he says, is thanks to the Chinese construction industry: Growth and urbanization mean new buildings, new furniture, and thus new manufacturers of particleboard who, in the best case, will sooner or later call Karakolidis to buy a Siempelkamp plant. “You have to be here as a company, China is like a whole global market.”
Nevertheless, there are also challenges: The trade war between the US and China has stretched the delivery times for electronic components that Siempelkamps needs for its own high-tech plants, the CEO explains. That is why he is trying to order earlier from manufacturers and plan ahead. “We’re already sweating a little bit, but it’s working.”
The excellent cooperation with Ecopark and the local government is helpful, he says. Siempelkamp does not have any problems as a foreign company in China – unlike many others. On the contrary: “We have a very good cooperation on a very fair basis.” Therefore, Siempelkamp is also focusing on localization: The company wants to find more suppliers in China and establish local supply chains. Partly in order to become more attractive in terms of price and to ensure faster delivery times, Karakolidis explains.
Karakolidis himself has been working for Siempelkamp since 2021. Before that, he worked for nine years at Green River Panels in Thailand, where he purchased and built wood plants. Today he benefits from this experience: “I have an understanding of what customers need. And that helps me to act as a supplier,” he explains. The prospect of being able to contribute his skills and the desire for a new challenge – in the end, that was all it took to bring Karakolidis from Bangkok to Qingdao.
But he does feel a little homesick for Germany, Karakolidis admits. Leaving friends and family behind was not always easy. What is lost is the feeling of home that Karakolidis knows from Ludwigshafen, where he grew up as the son of Greek immigrants. Nevertheless, in Thailand and China he was able to fulfill his ambitions and get to know the world. “I wanted more,” Karakolidis sums up. “China and Asia have given me a lot.” Jonathan Lehrer
Jacaranda trees are in full bloom in the southwestern Chinese provincial capital of Kunming (Yunnan): Every spring, the trumpet trees are a real eye-catcher amidst the urban monotony – and are soothing for the soul of every city dweller.
