Devout Buddhists recognized the benefits of vegetarian fish and meat alternatives centuries ago. Now the generation of young and health-conscious Chinese also seems to be rediscovering this age-old tradition. A huge new sales market is presenting itself to foreign companies as well as domestic suppliers and the competition for the best duck made from plant protein and smoked fish made from seitan is in full swing, reports Frank Sieren. And not only do vegetarian gourmets benefit from this; this new nutrition trend also offers several advantages for the state.
Chinese Confucius Institutes are subjected to an ever-increasing global pressure. Accusations range from simple state propaganda to clandestine espionage activities for the CP. Marcel Grzanna reports on how resentment continues to grow in Japan and South Korea. A look at nearby Slovakia shows that factual evidence is losing its relevance. The tone is literally getting rougher.
Chinese authorities have recently taken rather brutal actions against the ride-hailing service Didi Chuxing. This is not an isolated case, as our team of authors in Beijing proves: several Chinese companies have canceled their IPOs in New York due to current pressure. But there is also a beneficiary in this story: Hong Kong.
I hope you will gain valuable new insights with our latest issue
The breakthrough for plant-based meat was made possible by Gabrielle Guan, one of China’s most famous actresses, who advertised Chinese dumplings filled with plant-based meat – and triggered a gigantic wave. In just a few days, the term Zhíwùròu – plant-based meat – was searched 600 million times on Weibo. The consulting company Euromonitor predicts that China’s plant-based meat industry will be worth 13 billion US dollars by 2023.
Especially younger consumers of the health-conscious middle class become more open to meat analogue, as they are considered healthier and less harmful to the environment. Omnifoods also emphasizes that all new products are made from non-GMO soybeans, peas and rice. They are free of trans fats and cholesterol and are suitable for a vegan and Buddhist diet.
Omnifoods is just one of several ‘fake meat’ manufacturers that wish to enter the Chinese market. Nasdaq-listed US startup Beyond Meat has already partnered with fast-food company KFC and coffeehouse chain Starbucks in China. In June, Yum China, which owns the rights to operate KFC, Pizza Hut and Taco Bell in China, stated it would offer Beyond Burger for a limited time. To meet demands, Beyond Meat has even built a new production facility near Shanghai. In addition, as of this month, a meatless Meat Wrap is available in 2800 stores in 28 cities around China.
Products of ImpossibleFoods, another Silicon Valley-based competitor, are already available in Hong Kong and are currently only waiting for regulatory approval to be sold on the mainland. So far, products were only available as ‘limited editions’, but suppliers are confident that China will soon be one of the biggest consumers markets.
In May, Swiss food and beverage giant Nestle announced plans to build a ‘fake meat’ factory in Tianjin. It would be the company’s first factory in all of Asia. Nestle’s meat alternatives have so far been sold mainly on Alibaba’s online platform Tmall and in luxury Hema supermarkets in Beijing and Shanghai.
In addition to the international players, there have long been numerous local providers of plant-based alternatives in China, such as Whole Perfect Food, Zhenmeat, Zhiai Shenghuo and Starfield. The latter raised more than ten million dollars in funding last year. Whole Perfect Food, headquartered in Shenzhen, has actually been around since 1993 – a time when vegetarianism was still a niche. The company has been selling its products in countries such as Portugal, Great Britain, New Zealand and Australia for years.
Hey Tea, one of China’s most popular milk tea brands, added a new locally sourced ‘fake meat’ burger to its portfolio in late May. In September last year, Zhenmeat started a cooperation with a hotpot restaurant chain in the province of Sichuan.
And it’s not just about meat anymore, but also seafood. The Hong Kong-based producer of meat alternatives Omnifoods, which is best known for the production of the plant-based pork substitute Omnipork, recently launched a range of artificial seafood on the Chinese mainland and in Hong Kong. For example, the tuna or salmon substitutes, are said to be identical to real fish in terms of taste. The price is also said to be in the same range. Green Monday Holdings, founded in 2018 and owner of Omnifoods, had raised $70 million in funding last fall. The company claimed it would use its raised capital to strengthen research, expand its retail network, and to extend its production capacity and supply chains.
Be it fake fish or fake meat, China has good reasons to rely on these new food alternatives. The country is the largest meat consumer in the world, and the demand for pork and beef is steadily increasing. In many places, meat is still considered a status symbol and a stable price is therefore important for social satisfaction (China.Table reported). For this reason, Beijing has even established state pork reserves. And as with everything, Beijing intends to become as independent as possible from foreign meat imports.
The meat industry’s carbon footprint is also huge, making it difficult for the country to reconcile with its climate goals. According to the Food and Agriculture Organization of the United Nations, around 14,5 percent of global greenhouse gas emissions originate from livestock farming. In addition, China has seen repeated food scandals in recent years. The Covid virus, which was transmitted from animals to humans, has further unsettled consumers.
As early as 2016, Beijing was promoting a 50-percent reduction in meat consumption among its population. A year later, as part of a trade agreement with Israel, the Chinese government had invested 300 million US dollars in start-ups specializing in lab-grown meat for mass consumption.
Nevertheless, public acceptance of ‘fake meat’ is still relatively low. In a survey conducted in April by Southern Metropolis Daily in the province of Guangdong, 52 percent of 2065 respondents declared they were not willing to try artificial meat, while 33 percent said they had already tried some products. Only 8 percent considered the taste of artificial meat as good.
According to a report released in August by global market researcher Ipsos, 74 percent of respondents said they were concerned that plant-based meat substitutes contained too many additives, while 64 percent expressed concerns about the lack of industry standards. In addition, many Chinese complained about the high prices. For example, the price for a ‘fake meat’ lasagna at Starbucks is the equivalent of ten US dollars.
This proves on thing: Chinese consumers are still undecided. However, venture capital firms expect that to change soon. In 2020, investments already increased by 500 percent. Of the 740 million invested in China’s food and health sector last year, 10 percent went to startups for meat analogue. And in the current year, this trend seems to rise. Chinese start-up Youkuai recently raised about $7,3 million in Series A funding from Singaporean VC company Trirec. European players are also getting ready: “plant-based meat has huge potential. Beijing wants its own champion,” according to the website of Zurich-based VC company Blue Horizon Ventures. The Swiss had just launched a corresponding fund. With a total of 183 million euros, it surpassed its initial goal of 100 million euros.
China owns a rich tradition of creating deceptively authentic imitations for the meatless cuisine of Buddhists – from duck meat made from vegetable protein to smoked fish made from seitan. Many vegetarian restaurants are located near temples. Shenzhen-based Whole Perfect Food specializes in collecting ancient Buddhist recipes and turning them into mass-produced goods using modern industrial techniques. “This could become China’s global soft power,” says marketing chief Zhou Qiyu. “Americans are just getting started with something that we’ve been doing for centuries.”
Matej Šimalčík, director of the Central European Institute of Asian Studies (CEIAS) in Bratislava, could not believe his eyes when he opened an e-mail from Confucius Institute. “Who came up with this nonsense? Please, spare us with this garbage,” all casually written. The author of these dubious lines: Luboslav Štora, head of the Confucius Institute at the Slovak University of Technology (STU), one of three Confucius Institutes in the country.
Štora was bitterly upset by a research paper in which Šimalčík and his team revealed links between Slovak universities and Chinese institutions and companies. The paper also discusses non-transparent technology transfers from Slovak public universities to China and the possible use of these technologies for facial recognition. In an interview with China.Table, Šimalčík warned that European innovations are being used to optimize digital surveillance in the People’s Republic, for example in the control of Muslim Uyghurs in the Xinjiang Autonomous Region. Šimalčík fears that European universities will continue collaborating with the Chinese surveillance state as long as a lack of transparency prevents the recipients of the transfers from being unequivocally traced.
Štora commented cynically on the statements in his email. “Big Brother is watching you,” he wrote to the CEIAS director. Šimalčík then went public with correspondence because he deemed the wording of the letter highly inappropriate. When asked by journalists about his statements, the director of the Confucius Institute stated he had merely wanted to make a joke to counter the supposed absurdity of the research paper. After all, as Štora claimed, he had never heard of facial recognition in public spaces in China.
You may believe him or not, but Štora’s e-mail tirades will only fuel the discussion about the integrity of the Confucius Institutes. After all, both manner and content of his statements are reminiscent of Chinese diplomats who loudly try to silence topics in a familiar wolf warrior style. This similarity will ensure that China critics will once again feel confirmed in their suspicions, that the institute’s goals to convey Chinese culture and language are only a front.
There is growing suspicion all over the globe, that the more than 500 Confucius Institutes in around 160 countries try to influence public opinion in their respective host countries in the interests of the authoritarian government in Beijing. There are even suspicions of cooperation with Chinese secret services. In Japan, which is particularly critical of China, where its government recently blamed the Chinese Communist Party and the People’s Liberation Army for an extensive cyberattack on 200 companies and research institutions, the Ministry of Education has now launched an investigation. In addition to the influence of Chinese propaganda, the country also fears technology theft through close cooperation at Japanese universities – similar to the researchers at CEIAS in Slovakia.
All universities in Japan that host the 14 Confucius Institutes must disclose all details of collaboration regarding joint research, funding and numbers of participants. The institutions must be made completely transparent or be abolished, said Minister of Education, Koichi Haguida. An uneasy feeling is spreading in Japan that no one really knows what is happening behind closed doors of the institutes.
“The biggest concern here in Japan is that the institution intends to create sympathy for the Communist Party’s versions of history, culture and politics,” as Yoichi Shimada, professor of international relations told This Week in Asia. On the other hand, administrations of Japanese universities are welcoming the Chinese with open arms when it comes to possible collaborations. The reason for this is that universities are a perfect method of attracting financially strong students from the People’s Republic to Japan and establishing stable connections to the second-largest economy at the same time. This, in turn, can lead to further lucrative collaborations.
At the end of June, suspicions also broke out in South Korea, where currently 22 Confucius Institutes operate – more than in any other Asian country. A group of activists demonstrated in front of the Chinese embassy in Seoul against “brainwashing tools”. The public should see the “true nature” of these institutes, the group, led by a former employee of the Ministry of Culture, declared. It accused Korean politicians and academics of not being determined enough to create more transparency out of concern for economic consequences. It was regrettable that politicians and academics apparently believed that the institutions were comparable to the German Goethe Institutes, the French Alliance Francaise or the British Council.
In the USA, where the number of Confucius Institutes (CIUS) had grown to 110 in the meantime, the State Department officially designated the institutes as foreign missions as early as last summer. As such, they are now required to declare personnel and property to U.S. authorities. CIUS is an organization run by the Chinese Ministry of Education, which is why the Confucius Institutes are now “designated for what they are,” the State Department declared. Earlier this March, the U.S. Senate also ruled that universities that host a Confucius Institute will no longer receive financial aid from the government budget. Numerous institutions have since shut down or announced their closure. Currently, the National Association of Scholars, a conservative lobbying group, now counts less than 50 locations.
Beijing urgently rejected accusations against the institutes. Officially, they are considered a key element in the modernization of the Chinese education system, which also serves as a means of economic development. The current goal is to ‘optimize’ their regional spread, as the Central Committee of the Communist Party ordered. New foundations are to be focused on countries bordering the New Silk Road Initiative.
Currently, 19 branches exist in Germany. The majority is housed at public universities as registered associations.
When Chinese ride-hailing service Didi Chuxing went public in New York two weeks ago, spirits were high. But it didn’t last long. Mere two days later, Beijing launched a crackdown on its Uber rival. Regulators ordered the removal of the Didi app from all Chinese app stores until further notice. New users will no longer be allowed to sign up on the platform for the time being. Didi’s share price has since lost over 20 percent in value (China.Table reported).
According to observers, Beijing was less than thrilled from the start that Didi had chosen New York over their domestic stock market. Shortly before, regulators reportedly tried to dissuade Didi, but instead, the company accelerated its IPO efforts.
The Chinese government, as it became clear in recent days, is now planning to crack down on Chinese IPOs on Wall Street in a big way. Over the weekend, the Cyberspace Administration of China (CAC), unveiled its plans to mandate internet tech companies with data on more than one million users (in other words, virtually every company) to be reviewed by the CAC, should the company plan to launch an IPO abroad.
The goal of these reviews is to determine whether the planned IPO could pose a threat to national security because foreign states could gain access to sensitive data. The CAC’s presentation of these new rules followed last week’s announcement by China’s State Council, that it would tighten controls on IPOs.
While regulators talk about “reviewing” applications, observers assume that the cyber regulator’s goal is to virtually eliminate IPOs in the U.S. “Companies are aware of the coming storm,” commented an investment banker from Hong Kong.
In fact, several Chinese companies have already withdrawn their plans following the crackdown on Didi. China’s most popular fitness app Keep announced last week that it canceled its plans for an IPO in the US. Ximalaya, China’s largest podcasting platform, has also decided not to go public in New York, according to a report by the Financial Times. “After discussions with relevant regulators, we have concluded that a Hong Kong listing would be deemed as the preferred outcome,” as the FT quoted a person familiar with the matter. According to Reuters news agency, LinkDoc Technology, a Chinese medical data solutions provider, has also put its IPO plans for New York on hold. And as the Wall Street Journal reported on Monday, ByteDance, the Chinese company behind the short-video app Tiktok, abandoned its plans for an overseas IPO months ago after being discouraged by Chinese regulators.
Now there is a lot at stake for the US financial sector (as China.Table reported), as Chinese IPOs have so far been a lucrative business. Up until now, 37 Chinese companies have already gone public in New York, more than in the entire previous year. In total, around 250 Chinese companies are listed in New York, with a combined market capitalization of over two trillion US dollars.
The Chinese special administrative region of Hong Kong in particular could benefit from the new rules. Like in New York, Chinese entrepreneurs who want to go public with their companies in Hong Kong have the advantage that capital raised with their IPO is not subject to China’s strict capital controls. Their assets are therefore not ‘trapped’ in the People’s Republic. At the same time, Hong Kong’s financial center is considered more mature than Shenzhen or Shanghai and attracts more foreign investors. Hong Kong had already seen a boom in IPOs by Chinese companies last year against the backdrop of tense relations between the US and China. Gregor Koppenburg/ Jörn Petring
More strategic partnerships, more money, more visibility – on Monday, EU foreign ministers increased pressure on the EU Commission to establish a European alternative for the Belt and Road Initiative. China is not directly named in its outcome of proceedings. However, in the EU statement, titled ‘A Globally Connected Europe,’ ministers stressed that “other major economies have developed their own approaches and tools for connectivity.” German Foreign Minister Heiko Maas was more outspoken on the matter prior to the meeting, stating China was using its economic and financial leverage around the world to increase its political influence. “It’s no use whining about it. We have to offer alternatives ourselves.” Maas said in Brussels. This would apply to Southeast Europe, Africa and Central Asia, among others.
In concrete terms, the EU ministers are calling for:
Chinese telecommunications equipment company Huawei and its US rival Verizon Communications have settled their legal dispute over alleged patent infringements. The two companies made the announcement on Monday. The confidential deal comes as a surprise. Only a few days ago, a trial in the dispute was officially filed in a Texas court.
In February 2020, the Chinese manufacturer had filed a lawsuit against Verizon. This was accepted by two US district courts in Texas. At the time, Huawei accused Verizon of using Huawei patents in several areas without having obtained the relevant permission. This includes computer networking, download security, and video communications. Accordingly, Huawei demanded compensation payments as well as royalties. The lawsuits have now been withdrawn from both courts.
In response, Verizon called the lawsuit “a PR stunt” and a “sneak attack on our company and the entire tech ecosystem”. It also filed a countersuit against Huawei, claiming that the Chinese company had infringed Verizon’s patent rights.
As recently as last year, Huawei had cited that it was “simply asking that Verizon respects Huawei’s investment in research and development by either paying for or refraining from using our patents.”
On Monday, Verizon said it was “happy to reach an agreement with Huawei” over the patent disputes. Huawei’s headquarters in Shenzhen also stated it was pleased that “the settlement has resolved the dispute between Verizon and Huawei. However, the details of the deal are confidential.
Huawei claims to own 100,000 patents worldwide, with 10,000 of them filed in the US. In June 2019, Reuters news agency reported that Huawei had demanded payment of USD 1 billion from Verizon for the use of 230 proprietary patents. rad
Chinese battery manufacturer Svolt and Opel parent company Stellantis announced a partnership regarding electric batteries. Starting in 2025, Stellantis will also procure its lithium-ion batteries from Svolt, as Svolt announced earlier this week. Stellantis – which also owns car brands Chrysler, Citroën, Fiat and Peugeot – will obtain all relevant goods from Svolt, from electric batteries and traction batteries to battery management systems. The partnership will make Svolt part of Stellantis’ global EV battery sourcing strategy, with more than 130 GWh by 2025 and 260 GWh by 2030.
“We are very pleased to have won Stellantis as a renowned customer for our high-quality lithium-ion batteries and battery systems and are happy to be able to supply them with batteries in the future,” explains Maxim Hantsch-Kramskoj, Vice President of Sales & Marketing Svolt Europe.
Svolt had recently announced that it would invest in new sites for its battery production not only in China but also in Saarland, Germany (as China.Table reported). For its new partnership with Stellantis, Svolt aims to use its production capacities in China and future production capacities in Europe. niw
On average, one in two companies assessed by environmental inspectors in China has numerous air pollution problems. The Ministry of Environmental Protection stated it inspected nearly 1,600 companies in environmentally intensive key industries such as steel, chemicals and construction materials in May. The report found more than 1,900 air pollution violations at nearly 900 companies. The inspections were unannounced.
According to the ministry, violations of regulations concerning the emission of particulate matter, nitrogen oxides and sulfur dioxide were recorded. According to the report, some of the companies manipulated their technical facilities for environmental protection, such as exhaust gas purification systems. Most of the environmental violations are committed in construction materials, chemicals and pharmaceuticals sectors. Almost 270 companies are to be closely investigated. nib
Tencent Music is to cede its exclusive rights to music labels. According to a report by the Reuters news agency, China’s anti-monopoly authority is preparing corresponding steps. Actions mainly involve rights in where Tencent’s music streaming service competes with smaller rivals, Reuters reports. In addition, market regulator SAMR imposed a fine of 500,000 yuan (65,000 euros) on Tencent for failing to report its acquisitions of apps Kuwo and Kugou. The penalty is much lighter than initially announced at the beginning of the year. At that time, the authorities had even considered the forced sale of the two apps in question.
“Personally, I think this penalty falls short and is more of a boon for Tencent. The acquisitions obviously restrict competition in the market, it had to be vetoed,” said You Yunting, a lawyer at DeBund Law Offices in Shanghai. “It is not nearly enough to weaken Tencent Music’s dominant position,” You condemned in a statement to Reuters.
Beijing is in the process of readjusting the rules for its internet giants (as reported by China.Table). The first company to pay a record fine of 18 billion yuan (2.3 billion euros) was e-commerce retailer Alibaba at the end of last year. The reason given was an abuse of market power.
In April Reuters reported that the SAMR would fine Tencent Holdings at least ten billion yuan for its misconduct. The company has recently shown itself to be lenient. Last week, for example, Tencent tightened its youth protection measures for gamers in the country. After 10 p.m., only adult players are allowed to continue playing via facial recognition software. niw
When it comes to dealing with China, the West has still not understood that the People’s Republic is a state deeply rooted in communist thinking. This is something that sinologist and negotiation scholar Florian W. Mehring observes time and again in his work. In the West, the idea that Chinese culture is primarily shaped by Confucianism or Buddhism is still dominant in people’s minds. “Yet every Chinese has, at least unconsciously, internalized Marxist methods of thinking,” says the 43-year-old. According to his experience, this is especially apparent in business negotiations,
When German mentality meets the Chinese mentality, the difficulties in the different approaches become immediately noticeable. “Germans are process-oriented thinkers. Chinese, on the other hand, are comparatively more results-driven.” Translated to processes, this means that the Chinese like to define a central strategic or tactical goal. Then they set out to creatively search for the most effective way to achieve the goal. On the German side, however, you rarely encounter this approach. In negotiations, the Chinese negatively interpret this. According to Mehring, this can sometimes lead to the Chinese considering their counterparts in negotiations to be either incompetent or even accusing them of having dishonest intentions.
Mehring’s enthusiasm for the Chinese mentality, which is still very foreign to us, began early on. Although his mother is Japanese, he feels closer connected to the Chinese mentality. The Japanese are not that dissimilar to the Germans. The concept of tradition connects both countries. In China, there is little to look back on in terms of traditional structures: “Modern China began in 1979 – shortly after the death of Mao. Many Chinese could not get into the family business or fixed structures because they no longer existed or were run down,” Mehring explains. Subsequently, China became the factory of the world. Since the needs of the market were constantly changing, only the most adaptable could survive economically. That is why Chinese companies are “much more courageous and creative in business terms,” says Mehring.
He has already worked with the Chinese in a wide variety of areas. He is currently heading an education project in Qingdao in cooperation with Chinese partners. In addition to Japanese, German and Chinese, Mehring also speaks Indonesian and French. He was born in Paris. During his school years, he eventually came to Germany, studied and earned his doctorate at the University of Freiburg. In 2017, he caused a sensation with his translation of the book ‘The High Art of War in Business Negotiations‘ (Shāngwù Tánpàn Gāojīe Bīngfǎ) into German, making Chinese negotiation strategies accessible to Western entrepreneurs for the first time.
Mehring now lives in a small village near Lucerne. “I was actually attracted to Switzerland by the romantic idea of grassroots democracy,” says Mehring. “Without catastrophes, it really is a good instrument.” In a pandemic, however, it leads to disastrous results. Covid once again shows in an exemplary way that the Chinese are ahead of us with their goal-oriented mentality. In China, the main priority from the beginning was to defeat the virus. Everything had to be subordinated to that.” In the meantime, this goal has largely been achieved. David Renke
Zhu Jianshi has been appointed the new CEO of Futurity Brands China. The company focuses on lifestyle brand management and had acquired the Paul Frank brand last year. Stan Wan, chairman of the company, said that “Zhu’s expertise and considerable experience in licensing, fashion and retail business” will open a new chapter for the company. Futurity Brand aims to position brands primarily through acquisitions, licensing, distribution, design and strategic supply chain capabilities.
Deric Wong is the new interim CEO of Japanese advertising agency Dentsu International China. He will take over the position of Terrence Yung, who is stepping down from his post as CEO of the company’s media division. Yung had been with Dentsu since 2014 and was only promoted from COO to media CEO in November 2020. Chinese brands are increasingly capturing market share from global rivals in the world’s largest consumer market. According to a report by e-commerce platform JD.com, transactions on Chinese brands rose 6 percent over their foreign counterparts last year.
At this time of the year, Beijing normally suffers from droughts. But since Sunday it has been raining heavily. Unfortunately, far too much. Even the daycares and schools in the capital had to be closed temporarily. The weather is not expected to improve until midweek. Until then, slippers remain the footwear of the hour.
Devout Buddhists recognized the benefits of vegetarian fish and meat alternatives centuries ago. Now the generation of young and health-conscious Chinese also seems to be rediscovering this age-old tradition. A huge new sales market is presenting itself to foreign companies as well as domestic suppliers and the competition for the best duck made from plant protein and smoked fish made from seitan is in full swing, reports Frank Sieren. And not only do vegetarian gourmets benefit from this; this new nutrition trend also offers several advantages for the state.
Chinese Confucius Institutes are subjected to an ever-increasing global pressure. Accusations range from simple state propaganda to clandestine espionage activities for the CP. Marcel Grzanna reports on how resentment continues to grow in Japan and South Korea. A look at nearby Slovakia shows that factual evidence is losing its relevance. The tone is literally getting rougher.
Chinese authorities have recently taken rather brutal actions against the ride-hailing service Didi Chuxing. This is not an isolated case, as our team of authors in Beijing proves: several Chinese companies have canceled their IPOs in New York due to current pressure. But there is also a beneficiary in this story: Hong Kong.
I hope you will gain valuable new insights with our latest issue
The breakthrough for plant-based meat was made possible by Gabrielle Guan, one of China’s most famous actresses, who advertised Chinese dumplings filled with plant-based meat – and triggered a gigantic wave. In just a few days, the term Zhíwùròu – plant-based meat – was searched 600 million times on Weibo. The consulting company Euromonitor predicts that China’s plant-based meat industry will be worth 13 billion US dollars by 2023.
Especially younger consumers of the health-conscious middle class become more open to meat analogue, as they are considered healthier and less harmful to the environment. Omnifoods also emphasizes that all new products are made from non-GMO soybeans, peas and rice. They are free of trans fats and cholesterol and are suitable for a vegan and Buddhist diet.
Omnifoods is just one of several ‘fake meat’ manufacturers that wish to enter the Chinese market. Nasdaq-listed US startup Beyond Meat has already partnered with fast-food company KFC and coffeehouse chain Starbucks in China. In June, Yum China, which owns the rights to operate KFC, Pizza Hut and Taco Bell in China, stated it would offer Beyond Burger for a limited time. To meet demands, Beyond Meat has even built a new production facility near Shanghai. In addition, as of this month, a meatless Meat Wrap is available in 2800 stores in 28 cities around China.
Products of ImpossibleFoods, another Silicon Valley-based competitor, are already available in Hong Kong and are currently only waiting for regulatory approval to be sold on the mainland. So far, products were only available as ‘limited editions’, but suppliers are confident that China will soon be one of the biggest consumers markets.
In May, Swiss food and beverage giant Nestle announced plans to build a ‘fake meat’ factory in Tianjin. It would be the company’s first factory in all of Asia. Nestle’s meat alternatives have so far been sold mainly on Alibaba’s online platform Tmall and in luxury Hema supermarkets in Beijing and Shanghai.
In addition to the international players, there have long been numerous local providers of plant-based alternatives in China, such as Whole Perfect Food, Zhenmeat, Zhiai Shenghuo and Starfield. The latter raised more than ten million dollars in funding last year. Whole Perfect Food, headquartered in Shenzhen, has actually been around since 1993 – a time when vegetarianism was still a niche. The company has been selling its products in countries such as Portugal, Great Britain, New Zealand and Australia for years.
Hey Tea, one of China’s most popular milk tea brands, added a new locally sourced ‘fake meat’ burger to its portfolio in late May. In September last year, Zhenmeat started a cooperation with a hotpot restaurant chain in the province of Sichuan.
And it’s not just about meat anymore, but also seafood. The Hong Kong-based producer of meat alternatives Omnifoods, which is best known for the production of the plant-based pork substitute Omnipork, recently launched a range of artificial seafood on the Chinese mainland and in Hong Kong. For example, the tuna or salmon substitutes, are said to be identical to real fish in terms of taste. The price is also said to be in the same range. Green Monday Holdings, founded in 2018 and owner of Omnifoods, had raised $70 million in funding last fall. The company claimed it would use its raised capital to strengthen research, expand its retail network, and to extend its production capacity and supply chains.
Be it fake fish or fake meat, China has good reasons to rely on these new food alternatives. The country is the largest meat consumer in the world, and the demand for pork and beef is steadily increasing. In many places, meat is still considered a status symbol and a stable price is therefore important for social satisfaction (China.Table reported). For this reason, Beijing has even established state pork reserves. And as with everything, Beijing intends to become as independent as possible from foreign meat imports.
The meat industry’s carbon footprint is also huge, making it difficult for the country to reconcile with its climate goals. According to the Food and Agriculture Organization of the United Nations, around 14,5 percent of global greenhouse gas emissions originate from livestock farming. In addition, China has seen repeated food scandals in recent years. The Covid virus, which was transmitted from animals to humans, has further unsettled consumers.
As early as 2016, Beijing was promoting a 50-percent reduction in meat consumption among its population. A year later, as part of a trade agreement with Israel, the Chinese government had invested 300 million US dollars in start-ups specializing in lab-grown meat for mass consumption.
Nevertheless, public acceptance of ‘fake meat’ is still relatively low. In a survey conducted in April by Southern Metropolis Daily in the province of Guangdong, 52 percent of 2065 respondents declared they were not willing to try artificial meat, while 33 percent said they had already tried some products. Only 8 percent considered the taste of artificial meat as good.
According to a report released in August by global market researcher Ipsos, 74 percent of respondents said they were concerned that plant-based meat substitutes contained too many additives, while 64 percent expressed concerns about the lack of industry standards. In addition, many Chinese complained about the high prices. For example, the price for a ‘fake meat’ lasagna at Starbucks is the equivalent of ten US dollars.
This proves on thing: Chinese consumers are still undecided. However, venture capital firms expect that to change soon. In 2020, investments already increased by 500 percent. Of the 740 million invested in China’s food and health sector last year, 10 percent went to startups for meat analogue. And in the current year, this trend seems to rise. Chinese start-up Youkuai recently raised about $7,3 million in Series A funding from Singaporean VC company Trirec. European players are also getting ready: “plant-based meat has huge potential. Beijing wants its own champion,” according to the website of Zurich-based VC company Blue Horizon Ventures. The Swiss had just launched a corresponding fund. With a total of 183 million euros, it surpassed its initial goal of 100 million euros.
China owns a rich tradition of creating deceptively authentic imitations for the meatless cuisine of Buddhists – from duck meat made from vegetable protein to smoked fish made from seitan. Many vegetarian restaurants are located near temples. Shenzhen-based Whole Perfect Food specializes in collecting ancient Buddhist recipes and turning them into mass-produced goods using modern industrial techniques. “This could become China’s global soft power,” says marketing chief Zhou Qiyu. “Americans are just getting started with something that we’ve been doing for centuries.”
Matej Šimalčík, director of the Central European Institute of Asian Studies (CEIAS) in Bratislava, could not believe his eyes when he opened an e-mail from Confucius Institute. “Who came up with this nonsense? Please, spare us with this garbage,” all casually written. The author of these dubious lines: Luboslav Štora, head of the Confucius Institute at the Slovak University of Technology (STU), one of three Confucius Institutes in the country.
Štora was bitterly upset by a research paper in which Šimalčík and his team revealed links between Slovak universities and Chinese institutions and companies. The paper also discusses non-transparent technology transfers from Slovak public universities to China and the possible use of these technologies for facial recognition. In an interview with China.Table, Šimalčík warned that European innovations are being used to optimize digital surveillance in the People’s Republic, for example in the control of Muslim Uyghurs in the Xinjiang Autonomous Region. Šimalčík fears that European universities will continue collaborating with the Chinese surveillance state as long as a lack of transparency prevents the recipients of the transfers from being unequivocally traced.
Štora commented cynically on the statements in his email. “Big Brother is watching you,” he wrote to the CEIAS director. Šimalčík then went public with correspondence because he deemed the wording of the letter highly inappropriate. When asked by journalists about his statements, the director of the Confucius Institute stated he had merely wanted to make a joke to counter the supposed absurdity of the research paper. After all, as Štora claimed, he had never heard of facial recognition in public spaces in China.
You may believe him or not, but Štora’s e-mail tirades will only fuel the discussion about the integrity of the Confucius Institutes. After all, both manner and content of his statements are reminiscent of Chinese diplomats who loudly try to silence topics in a familiar wolf warrior style. This similarity will ensure that China critics will once again feel confirmed in their suspicions, that the institute’s goals to convey Chinese culture and language are only a front.
There is growing suspicion all over the globe, that the more than 500 Confucius Institutes in around 160 countries try to influence public opinion in their respective host countries in the interests of the authoritarian government in Beijing. There are even suspicions of cooperation with Chinese secret services. In Japan, which is particularly critical of China, where its government recently blamed the Chinese Communist Party and the People’s Liberation Army for an extensive cyberattack on 200 companies and research institutions, the Ministry of Education has now launched an investigation. In addition to the influence of Chinese propaganda, the country also fears technology theft through close cooperation at Japanese universities – similar to the researchers at CEIAS in Slovakia.
All universities in Japan that host the 14 Confucius Institutes must disclose all details of collaboration regarding joint research, funding and numbers of participants. The institutions must be made completely transparent or be abolished, said Minister of Education, Koichi Haguida. An uneasy feeling is spreading in Japan that no one really knows what is happening behind closed doors of the institutes.
“The biggest concern here in Japan is that the institution intends to create sympathy for the Communist Party’s versions of history, culture and politics,” as Yoichi Shimada, professor of international relations told This Week in Asia. On the other hand, administrations of Japanese universities are welcoming the Chinese with open arms when it comes to possible collaborations. The reason for this is that universities are a perfect method of attracting financially strong students from the People’s Republic to Japan and establishing stable connections to the second-largest economy at the same time. This, in turn, can lead to further lucrative collaborations.
At the end of June, suspicions also broke out in South Korea, where currently 22 Confucius Institutes operate – more than in any other Asian country. A group of activists demonstrated in front of the Chinese embassy in Seoul against “brainwashing tools”. The public should see the “true nature” of these institutes, the group, led by a former employee of the Ministry of Culture, declared. It accused Korean politicians and academics of not being determined enough to create more transparency out of concern for economic consequences. It was regrettable that politicians and academics apparently believed that the institutions were comparable to the German Goethe Institutes, the French Alliance Francaise or the British Council.
In the USA, where the number of Confucius Institutes (CIUS) had grown to 110 in the meantime, the State Department officially designated the institutes as foreign missions as early as last summer. As such, they are now required to declare personnel and property to U.S. authorities. CIUS is an organization run by the Chinese Ministry of Education, which is why the Confucius Institutes are now “designated for what they are,” the State Department declared. Earlier this March, the U.S. Senate also ruled that universities that host a Confucius Institute will no longer receive financial aid from the government budget. Numerous institutions have since shut down or announced their closure. Currently, the National Association of Scholars, a conservative lobbying group, now counts less than 50 locations.
Beijing urgently rejected accusations against the institutes. Officially, they are considered a key element in the modernization of the Chinese education system, which also serves as a means of economic development. The current goal is to ‘optimize’ their regional spread, as the Central Committee of the Communist Party ordered. New foundations are to be focused on countries bordering the New Silk Road Initiative.
Currently, 19 branches exist in Germany. The majority is housed at public universities as registered associations.
When Chinese ride-hailing service Didi Chuxing went public in New York two weeks ago, spirits were high. But it didn’t last long. Mere two days later, Beijing launched a crackdown on its Uber rival. Regulators ordered the removal of the Didi app from all Chinese app stores until further notice. New users will no longer be allowed to sign up on the platform for the time being. Didi’s share price has since lost over 20 percent in value (China.Table reported).
According to observers, Beijing was less than thrilled from the start that Didi had chosen New York over their domestic stock market. Shortly before, regulators reportedly tried to dissuade Didi, but instead, the company accelerated its IPO efforts.
The Chinese government, as it became clear in recent days, is now planning to crack down on Chinese IPOs on Wall Street in a big way. Over the weekend, the Cyberspace Administration of China (CAC), unveiled its plans to mandate internet tech companies with data on more than one million users (in other words, virtually every company) to be reviewed by the CAC, should the company plan to launch an IPO abroad.
The goal of these reviews is to determine whether the planned IPO could pose a threat to national security because foreign states could gain access to sensitive data. The CAC’s presentation of these new rules followed last week’s announcement by China’s State Council, that it would tighten controls on IPOs.
While regulators talk about “reviewing” applications, observers assume that the cyber regulator’s goal is to virtually eliminate IPOs in the U.S. “Companies are aware of the coming storm,” commented an investment banker from Hong Kong.
In fact, several Chinese companies have already withdrawn their plans following the crackdown on Didi. China’s most popular fitness app Keep announced last week that it canceled its plans for an IPO in the US. Ximalaya, China’s largest podcasting platform, has also decided not to go public in New York, according to a report by the Financial Times. “After discussions with relevant regulators, we have concluded that a Hong Kong listing would be deemed as the preferred outcome,” as the FT quoted a person familiar with the matter. According to Reuters news agency, LinkDoc Technology, a Chinese medical data solutions provider, has also put its IPO plans for New York on hold. And as the Wall Street Journal reported on Monday, ByteDance, the Chinese company behind the short-video app Tiktok, abandoned its plans for an overseas IPO months ago after being discouraged by Chinese regulators.
Now there is a lot at stake for the US financial sector (as China.Table reported), as Chinese IPOs have so far been a lucrative business. Up until now, 37 Chinese companies have already gone public in New York, more than in the entire previous year. In total, around 250 Chinese companies are listed in New York, with a combined market capitalization of over two trillion US dollars.
The Chinese special administrative region of Hong Kong in particular could benefit from the new rules. Like in New York, Chinese entrepreneurs who want to go public with their companies in Hong Kong have the advantage that capital raised with their IPO is not subject to China’s strict capital controls. Their assets are therefore not ‘trapped’ in the People’s Republic. At the same time, Hong Kong’s financial center is considered more mature than Shenzhen or Shanghai and attracts more foreign investors. Hong Kong had already seen a boom in IPOs by Chinese companies last year against the backdrop of tense relations between the US and China. Gregor Koppenburg/ Jörn Petring
More strategic partnerships, more money, more visibility – on Monday, EU foreign ministers increased pressure on the EU Commission to establish a European alternative for the Belt and Road Initiative. China is not directly named in its outcome of proceedings. However, in the EU statement, titled ‘A Globally Connected Europe,’ ministers stressed that “other major economies have developed their own approaches and tools for connectivity.” German Foreign Minister Heiko Maas was more outspoken on the matter prior to the meeting, stating China was using its economic and financial leverage around the world to increase its political influence. “It’s no use whining about it. We have to offer alternatives ourselves.” Maas said in Brussels. This would apply to Southeast Europe, Africa and Central Asia, among others.
In concrete terms, the EU ministers are calling for:
Chinese telecommunications equipment company Huawei and its US rival Verizon Communications have settled their legal dispute over alleged patent infringements. The two companies made the announcement on Monday. The confidential deal comes as a surprise. Only a few days ago, a trial in the dispute was officially filed in a Texas court.
In February 2020, the Chinese manufacturer had filed a lawsuit against Verizon. This was accepted by two US district courts in Texas. At the time, Huawei accused Verizon of using Huawei patents in several areas without having obtained the relevant permission. This includes computer networking, download security, and video communications. Accordingly, Huawei demanded compensation payments as well as royalties. The lawsuits have now been withdrawn from both courts.
In response, Verizon called the lawsuit “a PR stunt” and a “sneak attack on our company and the entire tech ecosystem”. It also filed a countersuit against Huawei, claiming that the Chinese company had infringed Verizon’s patent rights.
As recently as last year, Huawei had cited that it was “simply asking that Verizon respects Huawei’s investment in research and development by either paying for or refraining from using our patents.”
On Monday, Verizon said it was “happy to reach an agreement with Huawei” over the patent disputes. Huawei’s headquarters in Shenzhen also stated it was pleased that “the settlement has resolved the dispute between Verizon and Huawei. However, the details of the deal are confidential.
Huawei claims to own 100,000 patents worldwide, with 10,000 of them filed in the US. In June 2019, Reuters news agency reported that Huawei had demanded payment of USD 1 billion from Verizon for the use of 230 proprietary patents. rad
Chinese battery manufacturer Svolt and Opel parent company Stellantis announced a partnership regarding electric batteries. Starting in 2025, Stellantis will also procure its lithium-ion batteries from Svolt, as Svolt announced earlier this week. Stellantis – which also owns car brands Chrysler, Citroën, Fiat and Peugeot – will obtain all relevant goods from Svolt, from electric batteries and traction batteries to battery management systems. The partnership will make Svolt part of Stellantis’ global EV battery sourcing strategy, with more than 130 GWh by 2025 and 260 GWh by 2030.
“We are very pleased to have won Stellantis as a renowned customer for our high-quality lithium-ion batteries and battery systems and are happy to be able to supply them with batteries in the future,” explains Maxim Hantsch-Kramskoj, Vice President of Sales & Marketing Svolt Europe.
Svolt had recently announced that it would invest in new sites for its battery production not only in China but also in Saarland, Germany (as China.Table reported). For its new partnership with Stellantis, Svolt aims to use its production capacities in China and future production capacities in Europe. niw
On average, one in two companies assessed by environmental inspectors in China has numerous air pollution problems. The Ministry of Environmental Protection stated it inspected nearly 1,600 companies in environmentally intensive key industries such as steel, chemicals and construction materials in May. The report found more than 1,900 air pollution violations at nearly 900 companies. The inspections were unannounced.
According to the ministry, violations of regulations concerning the emission of particulate matter, nitrogen oxides and sulfur dioxide were recorded. According to the report, some of the companies manipulated their technical facilities for environmental protection, such as exhaust gas purification systems. Most of the environmental violations are committed in construction materials, chemicals and pharmaceuticals sectors. Almost 270 companies are to be closely investigated. nib
Tencent Music is to cede its exclusive rights to music labels. According to a report by the Reuters news agency, China’s anti-monopoly authority is preparing corresponding steps. Actions mainly involve rights in where Tencent’s music streaming service competes with smaller rivals, Reuters reports. In addition, market regulator SAMR imposed a fine of 500,000 yuan (65,000 euros) on Tencent for failing to report its acquisitions of apps Kuwo and Kugou. The penalty is much lighter than initially announced at the beginning of the year. At that time, the authorities had even considered the forced sale of the two apps in question.
“Personally, I think this penalty falls short and is more of a boon for Tencent. The acquisitions obviously restrict competition in the market, it had to be vetoed,” said You Yunting, a lawyer at DeBund Law Offices in Shanghai. “It is not nearly enough to weaken Tencent Music’s dominant position,” You condemned in a statement to Reuters.
Beijing is in the process of readjusting the rules for its internet giants (as reported by China.Table). The first company to pay a record fine of 18 billion yuan (2.3 billion euros) was e-commerce retailer Alibaba at the end of last year. The reason given was an abuse of market power.
In April Reuters reported that the SAMR would fine Tencent Holdings at least ten billion yuan for its misconduct. The company has recently shown itself to be lenient. Last week, for example, Tencent tightened its youth protection measures for gamers in the country. After 10 p.m., only adult players are allowed to continue playing via facial recognition software. niw
When it comes to dealing with China, the West has still not understood that the People’s Republic is a state deeply rooted in communist thinking. This is something that sinologist and negotiation scholar Florian W. Mehring observes time and again in his work. In the West, the idea that Chinese culture is primarily shaped by Confucianism or Buddhism is still dominant in people’s minds. “Yet every Chinese has, at least unconsciously, internalized Marxist methods of thinking,” says the 43-year-old. According to his experience, this is especially apparent in business negotiations,
When German mentality meets the Chinese mentality, the difficulties in the different approaches become immediately noticeable. “Germans are process-oriented thinkers. Chinese, on the other hand, are comparatively more results-driven.” Translated to processes, this means that the Chinese like to define a central strategic or tactical goal. Then they set out to creatively search for the most effective way to achieve the goal. On the German side, however, you rarely encounter this approach. In negotiations, the Chinese negatively interpret this. According to Mehring, this can sometimes lead to the Chinese considering their counterparts in negotiations to be either incompetent or even accusing them of having dishonest intentions.
Mehring’s enthusiasm for the Chinese mentality, which is still very foreign to us, began early on. Although his mother is Japanese, he feels closer connected to the Chinese mentality. The Japanese are not that dissimilar to the Germans. The concept of tradition connects both countries. In China, there is little to look back on in terms of traditional structures: “Modern China began in 1979 – shortly after the death of Mao. Many Chinese could not get into the family business or fixed structures because they no longer existed or were run down,” Mehring explains. Subsequently, China became the factory of the world. Since the needs of the market were constantly changing, only the most adaptable could survive economically. That is why Chinese companies are “much more courageous and creative in business terms,” says Mehring.
He has already worked with the Chinese in a wide variety of areas. He is currently heading an education project in Qingdao in cooperation with Chinese partners. In addition to Japanese, German and Chinese, Mehring also speaks Indonesian and French. He was born in Paris. During his school years, he eventually came to Germany, studied and earned his doctorate at the University of Freiburg. In 2017, he caused a sensation with his translation of the book ‘The High Art of War in Business Negotiations‘ (Shāngwù Tánpàn Gāojīe Bīngfǎ) into German, making Chinese negotiation strategies accessible to Western entrepreneurs for the first time.
Mehring now lives in a small village near Lucerne. “I was actually attracted to Switzerland by the romantic idea of grassroots democracy,” says Mehring. “Without catastrophes, it really is a good instrument.” In a pandemic, however, it leads to disastrous results. Covid once again shows in an exemplary way that the Chinese are ahead of us with their goal-oriented mentality. In China, the main priority from the beginning was to defeat the virus. Everything had to be subordinated to that.” In the meantime, this goal has largely been achieved. David Renke
Zhu Jianshi has been appointed the new CEO of Futurity Brands China. The company focuses on lifestyle brand management and had acquired the Paul Frank brand last year. Stan Wan, chairman of the company, said that “Zhu’s expertise and considerable experience in licensing, fashion and retail business” will open a new chapter for the company. Futurity Brand aims to position brands primarily through acquisitions, licensing, distribution, design and strategic supply chain capabilities.
Deric Wong is the new interim CEO of Japanese advertising agency Dentsu International China. He will take over the position of Terrence Yung, who is stepping down from his post as CEO of the company’s media division. Yung had been with Dentsu since 2014 and was only promoted from COO to media CEO in November 2020. Chinese brands are increasingly capturing market share from global rivals in the world’s largest consumer market. According to a report by e-commerce platform JD.com, transactions on Chinese brands rose 6 percent over their foreign counterparts last year.
At this time of the year, Beijing normally suffers from droughts. But since Sunday it has been raining heavily. Unfortunately, far too much. Even the daycares and schools in the capital had to be closed temporarily. The weather is not expected to improve until midweek. Until then, slippers remain the footwear of the hour.