Table.Briefing: China (English)

Interview with Sören Urbansky on the SCO + Beijing warns Brussels against deal with car manufacturers

Dear reader,

China’s head of state Xi Jinping and Russia’s President Vladimir Putin will presumably meet twice in the next two weeks: First at the Shanghai Cooperation Organisation (SCO) summit on October 15 and 16 in Pakistan and then at the BRICS summit from 22 to 24 in Kazan, Russia.

China’s power in the SCO is growing – and is increasingly becoming a security policy instrument for the Chinese government in the world, says Sören Urbansky, a professor at Ruhr University who researches the relationship between Russia and China, in an interview with Angela Köckritz. “Rhetorically, Moscow and Beijing speak the same language, but in the long term, they have different goals, and at some point, this could develop into a conflict,” says Urbansky.

Today, our Heads section presents Lea Sahay, who reports from China for the German newspaper Süddeutsche Zeitung. Her new book describes where the Chinese dream is beginning to crumble. Sahay places a special focus on the healthcare system. A medical emergency during the Covid pandemic pushed her almost to the breaking point. Fabian Peltsch spoke to her about why she returned to China despite her negative experiences.

Your
Amelie Richter
Image of Amelie  Richter

Interview

‘The world order is changing before our eyes’

Sören Urbansky, Professor of Eastern European History at the Ruhr University.

Xi Jinping and Vladimir Putin will presumably meet twice in the next two weeks. Firstly at the Shanghai Cooperation Organisation (SCO) summit on October 15 and 16 in Pakistan. Then, at the BRICS+ summit on October 22 to 24 in Kazan, Russia, Which topics should be kept an eye on at both summits?

The BRICS have recently expanded to include Egypt, Ethiopia, Iran and the United Arab Emirates. They represent almost half the global population, but only a third of economic output – although these countries tend to have growing economic power. This raises the question of when they could become a counter-model to the G7.

And the Shanghai Cooperation Organization?

With the SCO, we can see how China is becoming the most important link in the chain. The organization has always been portrayed as a club of equals, but its very name emphasizes China’s unique position, its headquarters are in Beijing. It is gradually becoming a security policy instrument for China in the world. With the growing imbalance between China and Russia, China will pursue an even more assertive policy within this organization.

The SCO was founded in response to 9/11 to counter the threat posed by terrorism, Islamism and separatism in Central Asia. This gave China the pretext to crack down on any opposition in Xinjiang. There has long been a division of labor between Russia and China in the five former Soviet republics in Central Asia: Beijing gave Russia the upper hand militarily and geopolitically but, in return, gained increasing economic clout.

Is that still true now?

Now, a change can be observed. China now maintains a military base in Tajikistan, the economically weakest and geostrategically most important country due to its land border with Afghanistan. These countries are distancing themselves from Russia due to the war in Ukraine. The fact that Putin has invaded Ukraine, a former Soviet republic, raises fears. Some governments are considering the extent to which they should pursue a seesaw policy between China and Russia.

Both organizations radiate power. BRICS has expanded and the SCO is the largest regional organization in the world. However, its members are so diverse that reaching a consensus on many issues may be difficult. In which areas will Xi and Putin be able to set standards?

The question is to what extent the world order is being rewritten, especially since Russia’s renewed attack on Ukraine in February 2022. Russia and China officially favor a multipolar world order. De facto, China has only one primary opponent, the USA, which it wants to overcome, which means that China is basically striving for a unipolar world order.

What does this mean in the long term?

Rhetorically, Moscow and Beijing speak the same language. However, in the long term, they have different goals, and at some point, this could develop into a conflict. They want to build an alternative to the order that emerged after the Second World War. Where they agree is that both countries have spheres of influence in which the law of the jungle rules. For Russia, these are the former Soviet republics. For China, it is Taiwan and the South China Sea in particular.

The interest that unites them all is that there needs to be an alternative, which everyone formulates a little differently for themselves.

Precisely. And the big difference to the post-war order is that there hasn’t been a big bang yet. The world order is changing before our eyes, but gradually. There are no clear losers and winners. For many countries, it is a search movement in an amorphous situation.

Putin and Xi have met in person more than 40 times. They have built up a personal relationship and share values and experiences. Yet the balance of power has clearly shifted in Xi’s favor. For a historically conscious person like Putin, who wants to help Russia regain its former glory and knows China used to be Russia’s student for a long time, surely this must be a permanent humiliation?

China is wise enough to present Putin as an equal on a diplomatic level. That’s incredibly important to Putin. After all, it is also about the image people have of him as a leader at home. After all, despite being an autocrat, he is under pressure to prove his legitimacy. The fact that China has rolled out the red carpet for him has become even more important since the start of the large-scale invasion in 2022 and the arrest warrant against him from the International Criminal Court, which means he can only travel to a limited extent. China is smart enough to keep up appearances, even if there are tough negotiations behind closed doors, for example, over resource prices.

Moreover, both are very good at blocking out conflicts. There are unresolved issues, historical resentments, overlapping spheres of influence, access to the North-East Passage is an issue that holds conflict potential. This is being pushed aside because the benefits of this alliance are far greater at the moment.

International experts also refer to the relationship between the two countries as an “undeclared alliance.” Can you explain this?

The communiqué that Xi and Putin signed during the opening ceremony of the 2022 Winter Olympics shortly before the large-scale Russian invasion of Ukraine and with which they sealed their ‘no-limits friendship’ contains many generalities, but no mutual support declaration in the sense of Article 5 of NATO. It is also interesting that it reflects the asymmetry of the balance of power. It emphasizes the ‘one-China principle’ but not Putin’s claims over Ukraine.

What does that mean in practice?

In practice, this communiqué means nothing. De facto, both countries grow closer together. With every step that Russia takes away from the international community, China gains in its mutual relations. It was only in the face of growing international isolation after the annexation of Crimea in 2014 in violation of international law that Russia was willing to sell its best weapons systems to the People’s Republic, such as Sukhoi Su-35 fighter jets.

Russia is now China’s largest oil supplier, although China is not making the same mistake as Germany – it is not making itself solely dependent. Russia is dependent on Chinese imports because of Western sanctions. Technology, cars, trucks, dual-use goods, where China is carefully sounding out how far it can go without being hit with secondary sanctions. This also applies to the banking sector. After all, China’s economic ties with the West are much greater than those with Russia.

Putin’s invasion of Ukraine in 2022 demanded Beijing perform a complicated balancing act, which ultimately resulted in what Western European experts call pro-Russian neutrality.’ Could you briefly explain that?

As the war progressed, a position crystallized in which China officially maintained a neutral position but de facto stood by Russia. Unlike Russia, China shies away from an open break with the international order, partly because it still benefits greatly from it, for example from the World Trade Organisation. It is unwilling to put itself on an equal footing with a country that has turned itself into a rogue state. At the same time, Russia is also representing China’s interests in this war by fighting against the liberal world order.

This is why China abstains from all relevant UN votes. One year after the war, Xi presented a 12-point peace plan. He wants to portray himself as an honest broker. De facto, his plan adopts Russian positions.

Let’s talk about military cooperation between the two countries. China and Russia now conduct numerous joint military exercises. What picture does this paint?

China has not fought a war since the Vietnam War in 1979 and thus has a decisive disadvantage despite its massive armament. Unfortunately, Russian soldiers have plenty of combat experience, and the exercises help Chinese soldiers to learn from it.

A second point could be that Russian soldiers are gaining experience with NATO equipment and strategies through the war in Ukraine, as the Ukrainians are increasingly being trained to NATO standards. This could be of interest to China. And finally, the exercises send out a signal: Although we are not a defense alliance, we train together and have certain standards, strategies and planning processes. The training is becoming more and more differentiated. First, land maneuvers, now regular sea and air exercises.

Despite all political and economic cooperation, its people remained strangers to each other for a long time. Until 2020, there was not a single bridge over the Amur, a border river between Russia and China that stretches over 2,000 kilometers.

Since Russia’s annexation of Crimea in 2014, there has been a reorientation. China is becoming more and more present in everyday life in Russia, you can only buy Western cars in a roundabout way, new cars are increasingly coming from China, as are mobile phones. Even the elites, under Western sanctions, are increasingly traveling to China.

And the general population?

Most people in these countries live very far away from this border, and, mentally, each country is on a different planet. There are still old resentments, even if they are no longer officially repeated. The asymmetry is also noticeable in the relationship between the societies. In China, there is a kind of late satisfaction at having surpassed the old master.

Sören Urbansky is a Professor of Eastern European History at Ruhr University Bochum and researches the relationship between China and Russia.

  • Geopolitics
  • Russland
  • WTO

News

Stimulus program: What other steps Beijing has planned

China has announced further measures to revitalize its ailing economy. Measures include:

  • Increasing government bond issues to boost the property sector: Local governments will be allowed to use special bonds to buy unused land from struggling property developers.
  • Issuing special bonds to help large banks increase their capital.
  • A one-off lifting of the debt ceiling for local governments.
  • Providing 400 billion yuan (51.7 billion euros) from the debt ceiling to local governments in order to expand local financial resources. In addition, funds from an unused bond quota of 2.3 trillion yuan (297.2 billion euros) are to be made available to local governments.
  • Subsidies for low-income earners and students.

Finance Minister Lan Fo’an announced this on Saturday in Beijing. He did not mention any specific figures for additional economic stimulus. These must be approved by the People’s National Congress. Its next Standing Committee is expected in the coming weeks. “Our countercyclical adjustment goes far beyond what I have mentioned,” Lan told reporters, adding that more steps were under discussion. “The central government, when it comes to increasing the deficit and increasing debt, we have significant room.”

The conference was preceded by announcements from other government agencies: The People’s Bank of China, for example, announced that interest rates on existing property loans would be lowered from October 25. The National Development and Reform Commission allocated 100 billion yuan (14.14 billion US dollars) from the state budget for 2025.

China’s economy has not recovered as expected since the end of the Covid pandemic. Analysts await signs that Beijing will increase government spending to support the stimulus package.

The Ministry of Finance’s measures to reduce local government debt and stabilize the property market are sound from a macroeconomic perspective, but the market is looking for more, Raymond Yeung, chief economist for Greater China at ANZ bank, told the Financial Times. “I think the market will be disappointed,” Yeung said. “Everyone was looking for a number but the finance minister did not give us one.” He said the Ministry could have presented a proposed expenditure figure, which would then have to be approved by the National People’s Congress.

However, Andy Rothman, investment strategist at Matthews Asia Fund, emphasized that the economic planners’ press conferences indicate a “fundamental shift” in the economy. “Xi understands that the policy response must be significant if it is to restore confidence among consumers and entrepreneurs . . . It will take time [but] a turnaround in confidence is likely on the horizon,” Rothman said. ari

  • Gesellschaft

Draft law: China gets closer to basic law for private sector promotion

In a further attempt to stabilize the economy, Beijing has presented measures to better promote and protect private companies. The National Development and Reform Commission (NDRC) and the Ministry of Justice published a corresponding draft law on Thursday. It would be the first Chinese basic law specifically aimed at promoting the private sector.

The new legislation is intended to safeguard private company market participation. Private companies in the second-largest economy, which has recently been increasingly dominated by state-owned companies, complain about a difficult business environment. Yet, the private sector is seen as an important driver of the country’s economic development.

Private sector: Improved investment and financing environment

The new legal framework aims to improve the investment and financing environment for private companies, encourage innovation, promote business ethics and improve legal protection. For example, to create a better financing environment, the government draft encourages banks to set reasonable thresholds for important loans. For example, Access to direct financing through stocks and bonds is to be facilitated for qualified private companies.

In conversation with the Hong Kong-based South China Morning Post, Tang Dajie, a senior researcher at the Beijing-based think tank China Enterprise Institute, criticized the draft law for not going beyond existing measures: “It lacks specific target requirements for administrative departments, such as mandating that government procurement allocate 30 percent of contracts to small and medium-sized enterprises,” said Tang.

The government should include the promotion of the private sector in the assessment indicators for local cadres and tighten penalties for violent online comments against private enterprises, he added. The usual phase in the legislative process, during which the draft can be publicly commented on, will last until November 8, 2024. mcl

  • KMU
  • Unternehmen

Tariff dispute: Beijing warns EU against own price negotiations with car manufacturers

China has warned the European Union against conducting additional price negotiations with individual car manufacturers alongside consultations on countervailing duties on Chinese electric car imports. This would “shake the foundation of negotiations and mutual trust,” the Chinese Ministry of Commerce said in a statement.

The Chinese side has “demonstrated a high degree of sincerity and flexibility” in the negotiations so far, the statement continued. It called on the EU to send a delegation to China as soon as possible to continue the next phase of consultations. “With major differences between the two sides, the consultations have been unable to produce a mutually acceptable solution,” state media quoted a spokesperson for the Ministry of Commerce as saying.

The EU had previously rejected a Chinese proposal that EVs manufactured in China could be sold in Europe at a mandatory minimum price of 30,000 euros. Beijing hoped this step would avert the introduction of EU countervailing duties. However, industry-wide minimum price commitments are difficult to reconcile with World Trade Organization (WTO) rules. The EU would have to sign agreements with each manufacturer.

At the beginning of the month, the EU member states voted to clear the way for tariffs on electric cars from China. The EU Commission can now decide to introduce duties of up to 35.3 percent. Beijing criticizes Brussels’ EV tariffs as protectionism, claiming that the EU ignores the facts and disregards WTO rules. dpa/ari

  • E-Autos

DSA: What information the EU requests from Temu

The EU Commission has sent Temu another formal request for information (RFI) under the Digital Services Act. The Chinese company is expected to provide detailed information on how it prevents traders from offering illegal products on the platform. Temu is further required to provide additional information on how it reduces risks to consumer protection, public health and the well-being of users.

The reason for this is the suspicion that retailers have been selling illegal goods on Temu – even repeatedly – and thus violating applicable regulations. Temu must provide the requested information, such as internal guidelines, control mechanisms and technical risk mitigation measures, by October 21, 2024. Based on the responses, the Commission will decide on the next steps, such as the formal initiation of proceedings. vis

  • Digital Services Act

Election in Macau: What the new Chief Executive plans for the casino city

Former top judge Sam Hou-fai was appointed the new Chief Executive of Macau on Sunday. In a vote on Sunday, he received 394 votes in the 400-member election committee of the special administrative region. At a press conference after the election, Sam emphasized that the former colony should use its advantages in connecting to Portuguese-speaking countries to promote the city’s development. He particularly aims to support small businesses. Retail sales in the city, known for its casinos, recently slumped by 17.5 percent compared to last year.

The Hong Kong and Macao Affairs Office in Beijing welcomed Sam’s election, saying he has the character of a team player who brings people together. In his election speech, Sam had previously stated that one of his major guidelines would be the implementation of the Chinese principle of “one country, two systems.” Sam is expected to be sworn in at a ceremony in December, which China’s President Xi Jinping is also likely to attend, as Macau will then also be celebrating the 25th anniversary of its return from Portuguese to Chinese administration. rtr/fpe

  • Macau

Heads

Lea Sahay: The end of the Chinese dream

Lea Sahay reports from China for the German newspaper Süddeutsche Zeitung.

Lea Sahay has just finished a reading tour in Germany. “The End of the Chinese Dream” is the title of the new book by the long-time China correspondent for the German newspaper Süddeutsche Zeitung. In it, she describes the country’s current crises as well as her own experiences in China, first and foremost a dramatic medical emergency that occurred in her family at the height of the Covid pandemic.

In September 2022, the family’s almost nine-month-old son Jonathan fell seriously ill with an extremely rare, usually fatal immune disorder, as it later turned out. Stricken with febrile convulsions, they took him to the emergency room of an international hospital in Beijing. It marked the beginning of an odyssey that led the family deep into the Chinese healthcare system, which is creaking at every turn – an extreme situation exacerbated by the often grotesque Covid restrictions.

Jonathan spent days in isolation in the children’s ICU. Sahay was unable to visit him and was worried sick because she didn’t know whether he was still alive. In the following weeks, she only really came to understand the existential fears of people in China who are at the mercy of a system that has mutated into a monster between “unchecked digitalization” and “bureaucratic madness.”

After Jonathan’s condition stabilized after almost a month, the family returned to Germany. A traumatizing gauntlet lay behind them. Nevertheless, Sahay refused to turn her back on China. In February 2023, she began reporting from Beijing again. Not only because she loves her job and believes it is important but also because it helps bring about a kind of healing process. “We were ripped from China during a dark time. That’s why it was important for me to go back and try to understand and process everything that happened.” Sahay says China cannot remain an “unfinished chapter” for her. “I have a relationship with China that is too intense and beautiful, and I don’t think such an ending would have done the country justice.”

‘Don’t ask so many questions, Lea’

Lea Deuber, her maiden name, comes from Renzburg in northern Germany. At 16, she came to China for the first time on a student exchange – in 2007, one year before the Olympic Games. She remembers how she was treated like a kind of vanguard of all the foreign guests who were expected. People tested their English skills on her and were warm and courteous. This included her Beijing host family, who first had to find a way of communicating with her, as the student came to the country without speaking any Chinese. “Everyone made an effort to explain things to me with a dictionary on their lap.”

While she worked for a technical aid organization back home in Germany and even wrote for a local newspaper, Sahay had to adapt to a different daily routine in China. And for her and her same-aged host sister, that mostly meant learning. Free-time activities were planned by teachers or her host family. Sahay’s curiosity leads to amusement and head-shaking. “Lea always asks why,” is what she often heard. “There is no why, don’t ask so much,” was usually the answer. Despite all the difficulties, she returned home with a solid grasp of the Chinese language and a kind of mission. She has gained an idea of the complexity of China. Pigeonholing the country and its people will help no one.

After studying Asian studies in Bonn and European Studies in Berlin, Sahay returned to China at 25 to take up her first job as a correspondent for the German business weekly Wirtschaftswoche. Under Xi Jinping, the proud patriotism she experienced as a schoolgirl in China has turned into unbridled nationalism. The freedom for foreign journalists is shrinking. Whether private individuals or authorities, everyone fears getting into trouble if they talk to journalists like her. Sometimes the protagonists even retract their quotes after the fact.

Sahay recalls a story from a retirement home in a province near Beijing. “The owner was warm and really happy that we were reporting on her and her solution-oriented concept of elderly care. Shortly after the interview, they contacted us suddenly and said we couldn’t use the interviews after all. You could practically hear the fear and trembling in her voice.”

Focus on the healthcare system

Despite the critical tones in her book, which sometimes sound like a reckoning, Sahay stresses that she remains committed to conveying a holistic and fair picture of China. Apart from her work for the SZ, she also does this, for example, as chair of the journalists.network, which is dedicated to promoting foreign reporting by young journalists.

Sahay emphasizes that an ailing healthcare system is not unique to China. Structural problems exist around the world. Back then, when she had flown halfway around the world with her son and arrived at a hospital in Hamburg, she had to wait for nine hours in the ER. “There was only one overworked nurse, who came by every few hours and apologized that the doctor on duty would surely come by soon.”

That is another reason why she cannot say whether she would have been in better hands in Germany after her son fell ill. “It can be said that healthcare systems around the world are under pressure and almost all of them are struggling with the same problems for different reasons and to varying degrees, but basically to the same extent.”

The issue will stay with her. After all, despite all the debates about derisking and decoupling, the area of medical knowledge is proof that cooperating with China continues to make sense in certain areas – “for example, when it comes to extremely rare immune diseases like my son’s. I hope every parent in the world can benefit from what Chinese doctors know about this disease.” Fabian Peltsch

Lea Sahay’s “Das Ende des Chinesischen Traums – Leben in Xi Jinpings neuem China” was published by Droemer-Verlag in September.

  • De-Risking

Executive Moves

Sandor Riebe has been Head of the ADAS China office at Volkswagen since August. A PhD engineer trained in Munich and Duisburg-Essen, he has been working for VW for more than 17 years, has been working for VW for more than 17 years. He first worked for SAIC Volkswagen in China between 2022 and 2024. For his new position, he commutes between Shanghai and Wolfsburg.

Xinyi Xie has been Quality Sustainability Manager APAC at Würth since August. Xie has been working for the German assembly and fastening technology manufacturer in Shanghai since 2021. She was hired as Government Affairs Officer at the time, a position she still holds.

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

Dessert

They were once supposed to protect the population of Chongqing from Japanese bombardments. Today, the tunnel bunkers carved into the slopes of the mountainous megacity are used for a variety of new purposes. Some have become restaurants, workshops, libraries and even dance studios. During the heatwave this summer, many citizens simply took refuge in the thick-walled bunkers to cool off.

China.Table editorial team

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    China’s head of state Xi Jinping and Russia’s President Vladimir Putin will presumably meet twice in the next two weeks: First at the Shanghai Cooperation Organisation (SCO) summit on October 15 and 16 in Pakistan and then at the BRICS summit from 22 to 24 in Kazan, Russia.

    China’s power in the SCO is growing – and is increasingly becoming a security policy instrument for the Chinese government in the world, says Sören Urbansky, a professor at Ruhr University who researches the relationship between Russia and China, in an interview with Angela Köckritz. “Rhetorically, Moscow and Beijing speak the same language, but in the long term, they have different goals, and at some point, this could develop into a conflict,” says Urbansky.

    Today, our Heads section presents Lea Sahay, who reports from China for the German newspaper Süddeutsche Zeitung. Her new book describes where the Chinese dream is beginning to crumble. Sahay places a special focus on the healthcare system. A medical emergency during the Covid pandemic pushed her almost to the breaking point. Fabian Peltsch spoke to her about why she returned to China despite her negative experiences.

    Your
    Amelie Richter
    Image of Amelie  Richter

    Interview

    ‘The world order is changing before our eyes’

    Sören Urbansky, Professor of Eastern European History at the Ruhr University.

    Xi Jinping and Vladimir Putin will presumably meet twice in the next two weeks. Firstly at the Shanghai Cooperation Organisation (SCO) summit on October 15 and 16 in Pakistan. Then, at the BRICS+ summit on October 22 to 24 in Kazan, Russia, Which topics should be kept an eye on at both summits?

    The BRICS have recently expanded to include Egypt, Ethiopia, Iran and the United Arab Emirates. They represent almost half the global population, but only a third of economic output – although these countries tend to have growing economic power. This raises the question of when they could become a counter-model to the G7.

    And the Shanghai Cooperation Organization?

    With the SCO, we can see how China is becoming the most important link in the chain. The organization has always been portrayed as a club of equals, but its very name emphasizes China’s unique position, its headquarters are in Beijing. It is gradually becoming a security policy instrument for China in the world. With the growing imbalance between China and Russia, China will pursue an even more assertive policy within this organization.

    The SCO was founded in response to 9/11 to counter the threat posed by terrorism, Islamism and separatism in Central Asia. This gave China the pretext to crack down on any opposition in Xinjiang. There has long been a division of labor between Russia and China in the five former Soviet republics in Central Asia: Beijing gave Russia the upper hand militarily and geopolitically but, in return, gained increasing economic clout.

    Is that still true now?

    Now, a change can be observed. China now maintains a military base in Tajikistan, the economically weakest and geostrategically most important country due to its land border with Afghanistan. These countries are distancing themselves from Russia due to the war in Ukraine. The fact that Putin has invaded Ukraine, a former Soviet republic, raises fears. Some governments are considering the extent to which they should pursue a seesaw policy between China and Russia.

    Both organizations radiate power. BRICS has expanded and the SCO is the largest regional organization in the world. However, its members are so diverse that reaching a consensus on many issues may be difficult. In which areas will Xi and Putin be able to set standards?

    The question is to what extent the world order is being rewritten, especially since Russia’s renewed attack on Ukraine in February 2022. Russia and China officially favor a multipolar world order. De facto, China has only one primary opponent, the USA, which it wants to overcome, which means that China is basically striving for a unipolar world order.

    What does this mean in the long term?

    Rhetorically, Moscow and Beijing speak the same language. However, in the long term, they have different goals, and at some point, this could develop into a conflict. They want to build an alternative to the order that emerged after the Second World War. Where they agree is that both countries have spheres of influence in which the law of the jungle rules. For Russia, these are the former Soviet republics. For China, it is Taiwan and the South China Sea in particular.

    The interest that unites them all is that there needs to be an alternative, which everyone formulates a little differently for themselves.

    Precisely. And the big difference to the post-war order is that there hasn’t been a big bang yet. The world order is changing before our eyes, but gradually. There are no clear losers and winners. For many countries, it is a search movement in an amorphous situation.

    Putin and Xi have met in person more than 40 times. They have built up a personal relationship and share values and experiences. Yet the balance of power has clearly shifted in Xi’s favor. For a historically conscious person like Putin, who wants to help Russia regain its former glory and knows China used to be Russia’s student for a long time, surely this must be a permanent humiliation?

    China is wise enough to present Putin as an equal on a diplomatic level. That’s incredibly important to Putin. After all, it is also about the image people have of him as a leader at home. After all, despite being an autocrat, he is under pressure to prove his legitimacy. The fact that China has rolled out the red carpet for him has become even more important since the start of the large-scale invasion in 2022 and the arrest warrant against him from the International Criminal Court, which means he can only travel to a limited extent. China is smart enough to keep up appearances, even if there are tough negotiations behind closed doors, for example, over resource prices.

    Moreover, both are very good at blocking out conflicts. There are unresolved issues, historical resentments, overlapping spheres of influence, access to the North-East Passage is an issue that holds conflict potential. This is being pushed aside because the benefits of this alliance are far greater at the moment.

    International experts also refer to the relationship between the two countries as an “undeclared alliance.” Can you explain this?

    The communiqué that Xi and Putin signed during the opening ceremony of the 2022 Winter Olympics shortly before the large-scale Russian invasion of Ukraine and with which they sealed their ‘no-limits friendship’ contains many generalities, but no mutual support declaration in the sense of Article 5 of NATO. It is also interesting that it reflects the asymmetry of the balance of power. It emphasizes the ‘one-China principle’ but not Putin’s claims over Ukraine.

    What does that mean in practice?

    In practice, this communiqué means nothing. De facto, both countries grow closer together. With every step that Russia takes away from the international community, China gains in its mutual relations. It was only in the face of growing international isolation after the annexation of Crimea in 2014 in violation of international law that Russia was willing to sell its best weapons systems to the People’s Republic, such as Sukhoi Su-35 fighter jets.

    Russia is now China’s largest oil supplier, although China is not making the same mistake as Germany – it is not making itself solely dependent. Russia is dependent on Chinese imports because of Western sanctions. Technology, cars, trucks, dual-use goods, where China is carefully sounding out how far it can go without being hit with secondary sanctions. This also applies to the banking sector. After all, China’s economic ties with the West are much greater than those with Russia.

    Putin’s invasion of Ukraine in 2022 demanded Beijing perform a complicated balancing act, which ultimately resulted in what Western European experts call pro-Russian neutrality.’ Could you briefly explain that?

    As the war progressed, a position crystallized in which China officially maintained a neutral position but de facto stood by Russia. Unlike Russia, China shies away from an open break with the international order, partly because it still benefits greatly from it, for example from the World Trade Organisation. It is unwilling to put itself on an equal footing with a country that has turned itself into a rogue state. At the same time, Russia is also representing China’s interests in this war by fighting against the liberal world order.

    This is why China abstains from all relevant UN votes. One year after the war, Xi presented a 12-point peace plan. He wants to portray himself as an honest broker. De facto, his plan adopts Russian positions.

    Let’s talk about military cooperation between the two countries. China and Russia now conduct numerous joint military exercises. What picture does this paint?

    China has not fought a war since the Vietnam War in 1979 and thus has a decisive disadvantage despite its massive armament. Unfortunately, Russian soldiers have plenty of combat experience, and the exercises help Chinese soldiers to learn from it.

    A second point could be that Russian soldiers are gaining experience with NATO equipment and strategies through the war in Ukraine, as the Ukrainians are increasingly being trained to NATO standards. This could be of interest to China. And finally, the exercises send out a signal: Although we are not a defense alliance, we train together and have certain standards, strategies and planning processes. The training is becoming more and more differentiated. First, land maneuvers, now regular sea and air exercises.

    Despite all political and economic cooperation, its people remained strangers to each other for a long time. Until 2020, there was not a single bridge over the Amur, a border river between Russia and China that stretches over 2,000 kilometers.

    Since Russia’s annexation of Crimea in 2014, there has been a reorientation. China is becoming more and more present in everyday life in Russia, you can only buy Western cars in a roundabout way, new cars are increasingly coming from China, as are mobile phones. Even the elites, under Western sanctions, are increasingly traveling to China.

    And the general population?

    Most people in these countries live very far away from this border, and, mentally, each country is on a different planet. There are still old resentments, even if they are no longer officially repeated. The asymmetry is also noticeable in the relationship between the societies. In China, there is a kind of late satisfaction at having surpassed the old master.

    Sören Urbansky is a Professor of Eastern European History at Ruhr University Bochum and researches the relationship between China and Russia.

    • Geopolitics
    • Russland
    • WTO

    News

    Stimulus program: What other steps Beijing has planned

    China has announced further measures to revitalize its ailing economy. Measures include:

    • Increasing government bond issues to boost the property sector: Local governments will be allowed to use special bonds to buy unused land from struggling property developers.
    • Issuing special bonds to help large banks increase their capital.
    • A one-off lifting of the debt ceiling for local governments.
    • Providing 400 billion yuan (51.7 billion euros) from the debt ceiling to local governments in order to expand local financial resources. In addition, funds from an unused bond quota of 2.3 trillion yuan (297.2 billion euros) are to be made available to local governments.
    • Subsidies for low-income earners and students.

    Finance Minister Lan Fo’an announced this on Saturday in Beijing. He did not mention any specific figures for additional economic stimulus. These must be approved by the People’s National Congress. Its next Standing Committee is expected in the coming weeks. “Our countercyclical adjustment goes far beyond what I have mentioned,” Lan told reporters, adding that more steps were under discussion. “The central government, when it comes to increasing the deficit and increasing debt, we have significant room.”

    The conference was preceded by announcements from other government agencies: The People’s Bank of China, for example, announced that interest rates on existing property loans would be lowered from October 25. The National Development and Reform Commission allocated 100 billion yuan (14.14 billion US dollars) from the state budget for 2025.

    China’s economy has not recovered as expected since the end of the Covid pandemic. Analysts await signs that Beijing will increase government spending to support the stimulus package.

    The Ministry of Finance’s measures to reduce local government debt and stabilize the property market are sound from a macroeconomic perspective, but the market is looking for more, Raymond Yeung, chief economist for Greater China at ANZ bank, told the Financial Times. “I think the market will be disappointed,” Yeung said. “Everyone was looking for a number but the finance minister did not give us one.” He said the Ministry could have presented a proposed expenditure figure, which would then have to be approved by the National People’s Congress.

    However, Andy Rothman, investment strategist at Matthews Asia Fund, emphasized that the economic planners’ press conferences indicate a “fundamental shift” in the economy. “Xi understands that the policy response must be significant if it is to restore confidence among consumers and entrepreneurs . . . It will take time [but] a turnaround in confidence is likely on the horizon,” Rothman said. ari

    • Gesellschaft

    Draft law: China gets closer to basic law for private sector promotion

    In a further attempt to stabilize the economy, Beijing has presented measures to better promote and protect private companies. The National Development and Reform Commission (NDRC) and the Ministry of Justice published a corresponding draft law on Thursday. It would be the first Chinese basic law specifically aimed at promoting the private sector.

    The new legislation is intended to safeguard private company market participation. Private companies in the second-largest economy, which has recently been increasingly dominated by state-owned companies, complain about a difficult business environment. Yet, the private sector is seen as an important driver of the country’s economic development.

    Private sector: Improved investment and financing environment

    The new legal framework aims to improve the investment and financing environment for private companies, encourage innovation, promote business ethics and improve legal protection. For example, to create a better financing environment, the government draft encourages banks to set reasonable thresholds for important loans. For example, Access to direct financing through stocks and bonds is to be facilitated for qualified private companies.

    In conversation with the Hong Kong-based South China Morning Post, Tang Dajie, a senior researcher at the Beijing-based think tank China Enterprise Institute, criticized the draft law for not going beyond existing measures: “It lacks specific target requirements for administrative departments, such as mandating that government procurement allocate 30 percent of contracts to small and medium-sized enterprises,” said Tang.

    The government should include the promotion of the private sector in the assessment indicators for local cadres and tighten penalties for violent online comments against private enterprises, he added. The usual phase in the legislative process, during which the draft can be publicly commented on, will last until November 8, 2024. mcl

    • KMU
    • Unternehmen

    Tariff dispute: Beijing warns EU against own price negotiations with car manufacturers

    China has warned the European Union against conducting additional price negotiations with individual car manufacturers alongside consultations on countervailing duties on Chinese electric car imports. This would “shake the foundation of negotiations and mutual trust,” the Chinese Ministry of Commerce said in a statement.

    The Chinese side has “demonstrated a high degree of sincerity and flexibility” in the negotiations so far, the statement continued. It called on the EU to send a delegation to China as soon as possible to continue the next phase of consultations. “With major differences between the two sides, the consultations have been unable to produce a mutually acceptable solution,” state media quoted a spokesperson for the Ministry of Commerce as saying.

    The EU had previously rejected a Chinese proposal that EVs manufactured in China could be sold in Europe at a mandatory minimum price of 30,000 euros. Beijing hoped this step would avert the introduction of EU countervailing duties. However, industry-wide minimum price commitments are difficult to reconcile with World Trade Organization (WTO) rules. The EU would have to sign agreements with each manufacturer.

    At the beginning of the month, the EU member states voted to clear the way for tariffs on electric cars from China. The EU Commission can now decide to introduce duties of up to 35.3 percent. Beijing criticizes Brussels’ EV tariffs as protectionism, claiming that the EU ignores the facts and disregards WTO rules. dpa/ari

    • E-Autos

    DSA: What information the EU requests from Temu

    The EU Commission has sent Temu another formal request for information (RFI) under the Digital Services Act. The Chinese company is expected to provide detailed information on how it prevents traders from offering illegal products on the platform. Temu is further required to provide additional information on how it reduces risks to consumer protection, public health and the well-being of users.

    The reason for this is the suspicion that retailers have been selling illegal goods on Temu – even repeatedly – and thus violating applicable regulations. Temu must provide the requested information, such as internal guidelines, control mechanisms and technical risk mitigation measures, by October 21, 2024. Based on the responses, the Commission will decide on the next steps, such as the formal initiation of proceedings. vis

    • Digital Services Act

    Election in Macau: What the new Chief Executive plans for the casino city

    Former top judge Sam Hou-fai was appointed the new Chief Executive of Macau on Sunday. In a vote on Sunday, he received 394 votes in the 400-member election committee of the special administrative region. At a press conference after the election, Sam emphasized that the former colony should use its advantages in connecting to Portuguese-speaking countries to promote the city’s development. He particularly aims to support small businesses. Retail sales in the city, known for its casinos, recently slumped by 17.5 percent compared to last year.

    The Hong Kong and Macao Affairs Office in Beijing welcomed Sam’s election, saying he has the character of a team player who brings people together. In his election speech, Sam had previously stated that one of his major guidelines would be the implementation of the Chinese principle of “one country, two systems.” Sam is expected to be sworn in at a ceremony in December, which China’s President Xi Jinping is also likely to attend, as Macau will then also be celebrating the 25th anniversary of its return from Portuguese to Chinese administration. rtr/fpe

    • Macau

    Heads

    Lea Sahay: The end of the Chinese dream

    Lea Sahay reports from China for the German newspaper Süddeutsche Zeitung.

    Lea Sahay has just finished a reading tour in Germany. “The End of the Chinese Dream” is the title of the new book by the long-time China correspondent for the German newspaper Süddeutsche Zeitung. In it, she describes the country’s current crises as well as her own experiences in China, first and foremost a dramatic medical emergency that occurred in her family at the height of the Covid pandemic.

    In September 2022, the family’s almost nine-month-old son Jonathan fell seriously ill with an extremely rare, usually fatal immune disorder, as it later turned out. Stricken with febrile convulsions, they took him to the emergency room of an international hospital in Beijing. It marked the beginning of an odyssey that led the family deep into the Chinese healthcare system, which is creaking at every turn – an extreme situation exacerbated by the often grotesque Covid restrictions.

    Jonathan spent days in isolation in the children’s ICU. Sahay was unable to visit him and was worried sick because she didn’t know whether he was still alive. In the following weeks, she only really came to understand the existential fears of people in China who are at the mercy of a system that has mutated into a monster between “unchecked digitalization” and “bureaucratic madness.”

    After Jonathan’s condition stabilized after almost a month, the family returned to Germany. A traumatizing gauntlet lay behind them. Nevertheless, Sahay refused to turn her back on China. In February 2023, she began reporting from Beijing again. Not only because she loves her job and believes it is important but also because it helps bring about a kind of healing process. “We were ripped from China during a dark time. That’s why it was important for me to go back and try to understand and process everything that happened.” Sahay says China cannot remain an “unfinished chapter” for her. “I have a relationship with China that is too intense and beautiful, and I don’t think such an ending would have done the country justice.”

    ‘Don’t ask so many questions, Lea’

    Lea Deuber, her maiden name, comes from Renzburg in northern Germany. At 16, she came to China for the first time on a student exchange – in 2007, one year before the Olympic Games. She remembers how she was treated like a kind of vanguard of all the foreign guests who were expected. People tested their English skills on her and were warm and courteous. This included her Beijing host family, who first had to find a way of communicating with her, as the student came to the country without speaking any Chinese. “Everyone made an effort to explain things to me with a dictionary on their lap.”

    While she worked for a technical aid organization back home in Germany and even wrote for a local newspaper, Sahay had to adapt to a different daily routine in China. And for her and her same-aged host sister, that mostly meant learning. Free-time activities were planned by teachers or her host family. Sahay’s curiosity leads to amusement and head-shaking. “Lea always asks why,” is what she often heard. “There is no why, don’t ask so much,” was usually the answer. Despite all the difficulties, she returned home with a solid grasp of the Chinese language and a kind of mission. She has gained an idea of the complexity of China. Pigeonholing the country and its people will help no one.

    After studying Asian studies in Bonn and European Studies in Berlin, Sahay returned to China at 25 to take up her first job as a correspondent for the German business weekly Wirtschaftswoche. Under Xi Jinping, the proud patriotism she experienced as a schoolgirl in China has turned into unbridled nationalism. The freedom for foreign journalists is shrinking. Whether private individuals or authorities, everyone fears getting into trouble if they talk to journalists like her. Sometimes the protagonists even retract their quotes after the fact.

    Sahay recalls a story from a retirement home in a province near Beijing. “The owner was warm and really happy that we were reporting on her and her solution-oriented concept of elderly care. Shortly after the interview, they contacted us suddenly and said we couldn’t use the interviews after all. You could practically hear the fear and trembling in her voice.”

    Focus on the healthcare system

    Despite the critical tones in her book, which sometimes sound like a reckoning, Sahay stresses that she remains committed to conveying a holistic and fair picture of China. Apart from her work for the SZ, she also does this, for example, as chair of the journalists.network, which is dedicated to promoting foreign reporting by young journalists.

    Sahay emphasizes that an ailing healthcare system is not unique to China. Structural problems exist around the world. Back then, when she had flown halfway around the world with her son and arrived at a hospital in Hamburg, she had to wait for nine hours in the ER. “There was only one overworked nurse, who came by every few hours and apologized that the doctor on duty would surely come by soon.”

    That is another reason why she cannot say whether she would have been in better hands in Germany after her son fell ill. “It can be said that healthcare systems around the world are under pressure and almost all of them are struggling with the same problems for different reasons and to varying degrees, but basically to the same extent.”

    The issue will stay with her. After all, despite all the debates about derisking and decoupling, the area of medical knowledge is proof that cooperating with China continues to make sense in certain areas – “for example, when it comes to extremely rare immune diseases like my son’s. I hope every parent in the world can benefit from what Chinese doctors know about this disease.” Fabian Peltsch

    Lea Sahay’s “Das Ende des Chinesischen Traums – Leben in Xi Jinpings neuem China” was published by Droemer-Verlag in September.

    • De-Risking

    Executive Moves

    Sandor Riebe has been Head of the ADAS China office at Volkswagen since August. A PhD engineer trained in Munich and Duisburg-Essen, he has been working for VW for more than 17 years, has been working for VW for more than 17 years. He first worked for SAIC Volkswagen in China between 2022 and 2024. For his new position, he commutes between Shanghai and Wolfsburg.

    Xinyi Xie has been Quality Sustainability Manager APAC at Würth since August. Xie has been working for the German assembly and fastening technology manufacturer in Shanghai since 2021. She was hired as Government Affairs Officer at the time, a position she still holds.

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

    Dessert

    They were once supposed to protect the population of Chongqing from Japanese bombardments. Today, the tunnel bunkers carved into the slopes of the mountainous megacity are used for a variety of new purposes. Some have become restaurants, workshops, libraries and even dance studios. During the heatwave this summer, many citizens simply took refuge in the thick-walled bunkers to cool off.

    China.Table editorial team

    CHINA.TABLE EDITORIAL OFFICE

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