The handover of the Hong Kong office from Carrie Lam to former Police Officer John Lee is in full swing. It is a delicate time, which is why the headquarters in Beijing are observing the former crown colony very tense. Accordingly, Xia Baolong left no room for doubt on Monday. “We must resolutely clamp down on all anti-China forces that destabilize Hong Kong and Macau and leave no crack in the process,” demanded the Hong Kong and Macau envoy of the central government in Beijing.
Marcel Grzanna shows how this is to be achieved. Beijing is relying on the local education system as a central tool: Where critical thinking was promoted recently, Chinese civics will be taught in the future. The goal is clear: Hong Kong needs more central Chinese patriots.
In today’s second analysis, we look at the main problem the auto industry is facing: a global shortage of semiconductors. Car manufacturers still manage to hide the shortage – and even turn a profit from it. High demand and low supply are causing prices to rise.
But this strategy will soon come to an end. And so Christian Domke Seidel warns in his analysis: The chip shortage will last for several years – at least in the automotive industry. Companies must therefore react quickly. Chinese car companies show how: Guangzhou Automobile Group is taking stakes in local chip manufacturers, while BYD is securing mining rights for lithium.
Beijing’s central government is watching Hong Kong with concern. True, the remaining political opposition has retreated so far that it is virtually inaudible. But authoritarian government systems fear the resurgence of social dissent so much that they permanently invest large portions of their money, personnel, and attention in maintaining the status quo.
Driven by the constant fear of becoming a victim of conspiracies, the stability of its regime is always at the top of the political agenda. The ongoing handover of Hong Kong’s affairs of state from Carrie Lam’s government into the hands of former Police Officer John Lee is also a delicate time. The new government, enthroned on July 1, has to get itself in order, the ministers have to coordinate their actions while the administrative apparatus has to keep running smoothly under new leadership.
On Monday, the central government’s Hong Kong and Macau commissioner Xia Baolong appealed to the new leadership to “remain vigilant.” Xia spoke at a seminar in Beijing where officials from the former crown colonies had joined online. “We must resolutely clamp down on all anti-China forces that destabilize Hong Kong and Macau and leave no crack in the process,” Xia said. These forces are not dead, he added. Similar to Hong Kong, Macau was foreign-administered until 1999, when it was returned to the People’s Republic by Portugal.
One strategy to patch up potential “cracks” is to sinicize the education system. Last month, new textbooks were unveiled that will be used for the new Hong Kong civics curriculum in the city’s schools. Civics was officially introduced last fall and has now been given a suitable framework for teaching the subject. It replaces the so-called Liberal Studies, a multidisciplinary approach that was designed to prepare young people for careers in various sectors while teaching them critical thinking and systematic problem-solving.
With the end of Liberal Studies, the root of much hatred in Hong Kong society has been banished from Hong Kong classrooms, Chinese state media judged. It was said the subject had been used to slander the government and many teachers had carried their poisonous political views into the classrooms this way.
“With the reference materials from the Education Bureau, there will be no need for school teachers to bring in too much other content,” Tang Fei, Vice President of the Hong Kong Teachers’ Union (HKFEW), which is considered an advocacy group for the Beijing headquarters, told China’s Global Times newspaper. The HKFEW is the city’s largest teachers’ union, with about 42,000 members, after the long-established Hong Kong Professional Teachers’ Union (HKPTU), which had nearly 100,000 members, was dissolved last year. The HKPTU was seen as a thorn in Beijing’s side because of its liberal positions and came under increasing pressure after the introduction of the National Security Law.
The new textbooks take an in-depth look at Hong Kong’s recent history. Among other things, the so-called Basic Law, which is regarded as the city’s mini-constitution, is analyzed. The principle of “one country, two systems” is also an important part of the curriculum. Another central element is the importance of national security. In two years, the new civics curriculum will be part of the exams at secondary schools for the first time.
The trend toward pro-Chinese educational content in Hong Kong is not new and has been the subject of heated debate in recent years, as authors Sonny Shi-Hing Lo and Chung Fun Steven Hung outline in their book, “The Politics of Education Reform in China’s Hong Kong“.
The overall education reform in the Special Administrative Region has pushed the education system into a process by which it has become more and more similar to the system of the People’s Republic. The focus of the reform is on political “correctness” in understanding Chinese national security, history, and culture, the authors summarize.
The reform process has accelerated steadily in recent years precisely because the resistance of the political opposition has been broken for the past few years due to tighter legislation. Patriotic education is increasingly moving to the center of school education. It is supposed to provide the basis for achieving Beijing’s proclaimed goal of the city being governed and administered exclusively by patriots. On the surface and at the highest levels, this is already the case. But the administration consists of thousands and thousands of employees at lower levels, to whom a desired political attitude is preached but whose implementation in line with the state can hardly be verified in everyday life.
The new government will almost certainly work consistently on the patriotic education of the next generation. The new Secretary for Education, Choi Yuk Lin, seems to be determination personified. Back in 2012, Choi wanted to put her stamp on the education system when she suggested that textbooks should depict multi-party political systems as the root of chaos and unrest. At the time, resistance was still too great and the time was not ripe. Ten years later, Choi reached her goal.
The market for semiconductors has become a permanent problem for car manufacturers. Demand is rising, but supply is stagnating at best. This has consequences: Not enough cars are being built to meet demand. As a result, profit margins are rising, but manufacturers can forget about their growth strategies. And for a long time. A new study by management consultants AlixPartners predicts that the shortage of semiconductors will continue to affect production in 2024.
The central aspect is that EV would need about ten times as many chips as conventional cars. In addition, the automotive industry is not a priority for chip manufacturers, according to AlixPartners. It would require analog chips, but semiconductor manufacturers would invest in the much more profitable production of microcontrollers. These are used, for example, in consumer electronics and cell phones.
Chinese manufacturers are responding to the bottlenecks by acquiring stakes in local chip manufacturers. One example is the Guangzhou Automobile Group (GAC). This step is only logical since only five percent of the semiconductors needed for automotive construction come from the People’s Republic.
Investments along the value chain are a recipe for success for BYD, for example. In the first five months of 2022, the brand was able to double its deliveries, the specialist portal BSBC calculated. To a total of 590,000 units. No other manufacturer in the world sold as many new energy vehicles as BYD.
The big advantage of the brand is that the group is also the world’s third-largest battery manufacturer. Even Tesla wants to buy from the competitor. Crucially, BYD also owns mining rights for lithium in Chile and mines the raw material itself. Soon, BYD Semiconductor will go public. The manufacturer wants to use the proceeds to fund the development of its own semiconductors.
But even BYD has a hard time meeting demand. This has to do with a lack of production capacity. Currently, the fifth factory is already under construction. After completion, the brand is expected to be able to produce around 3.4 million vehicles a year. Since the end of March, models with combustion engines are no longer part of the program.
However, a stake in chipmakers alone is unlikely to fix the problem. Showa Denko KK, a Japanese chemical company, warned the chip industry on the news portal Bloomberg News of massive price increases in the near future. The group supplies Taiwan Semiconductor Manufacturing and Infineon, among others, with raw materials for chip production.
Hideki Somemiya, Chief Financial Officer, announced that “the current market moves require us to ask twice the amount we had previously calculated“. The reasons, he said, were huge energy costs, disrupted supply chains, and a weak yen. His company has already stopped selling certain raw materials and terminates contracts with customers if there is no basis for profitable cooperation, Somemiya said. Even withdrawal from individual business units is under discussion. So the big shock for automakers could still be coming.
But there is also good news, as the AlixPartners study calculates. Due to high demand and low supply, the 25 largest automakers would have increased their return on sales by 2.5 percentage points – to over 10.3 percent. It’s a trend that is expected to continue for some time. “Car production will not exceed demand again until 2025,” Fabian Piontek, a consultant at AlixPartners, told Reuters.
The best example of this is Daimler Truck. Its CEO Martin Daum recently stated at the annual general meeting that the annual production of over half a million vehicles had long since been sold out. Despite a price increase of about ten percent. However, AlixPartners urges caution. The additional profits are urgently needed, as the investment costs for EV will be around $500 billion worldwide in the next five years.
Especially since the largest car market in the world with the highest growth rates is still China. BYD is also successful here because the company is largely defined by its low price. The margin is just 1.5 percent.
When Stefanie Schweiger was little, her father often traveled to China on business trips. Every time he came back, he would take a gift for her out of his suitcase. “I had a part on my shelf just for all the things he brought me back from there,” she says. “They were sacred to me.”
Schweiger studied art history and photography in Frankfurt and Berlin – the fascination for China remained. When she was in her early 30s, she took a big step and moved to Beijing for several years, to the hutongs, the small alleys of the old city. “I knew all my neighbors, had a chat with them every day and visited the little café in a former temple that showed contemporary art and films.” At the time, the fact that this neighborhood was scheduled for demolition inspired her to create a series of portraits of her neighbors, photographing them in their homes. It was one of her first works in Beijing.
With the Chinese author Phoebe Hui, Schweiger later published the book “The Magic of Yuanfen” – A collection of texts and photographs. The two authors had spent three years traveling to the remotest corners of China in search of spirituality, ancient knowledge, beliefs, and superstitions. “Rapid developments in science and technology have modernized people’s lifestyles across the country,” Schweiger says. “But beneath this surface of modernity, in this vast country of 56 different ethnic groups, lies a history that goes back more than 3,500 years.”
Hui and Schweiger participated in mysterious ceremonies, walked for days with their protagonists over mountain tops, entered monasteries, drank home-brewed herbal medicine, and engaged as openly as possible with their respective counterparts. “We met healers and sages, Buddhist secret societies, shamans, hermits, Taoists, herbalists, Tibetan doctors, bimos, feng shui masters, and monks.” They constantly asked themselves the question: Can the wisdom or culture that has been passed down for hundreds or even thousands of years be reconciled with modern life in contemporary China?
“All the encounters on this trip were guided by fate or by chance – however you want to put it,” Schweiger says. “It was impressive that we always found what we were looking for.” Chance, or the binding force that brings a person together with other people or objects, is called “yuanfen” in Chinese. That is also how the book got its name.
Schweiger currently lives in Berlin again and is in the middle of a joint project with two female artists. A joint exhibition will follow next year. However, she is not yet allowed to reveal the theme. Svenja Napp
Delivery service à la Stanley Kubrick: The Tianzhou-3 launch vehicle successfully transports supplies to the Chinese space station. Our picture shows the Tianzhou-3 leaving the station again on Sunday and heading back to Earth.
The handover of the Hong Kong office from Carrie Lam to former Police Officer John Lee is in full swing. It is a delicate time, which is why the headquarters in Beijing are observing the former crown colony very tense. Accordingly, Xia Baolong left no room for doubt on Monday. “We must resolutely clamp down on all anti-China forces that destabilize Hong Kong and Macau and leave no crack in the process,” demanded the Hong Kong and Macau envoy of the central government in Beijing.
Marcel Grzanna shows how this is to be achieved. Beijing is relying on the local education system as a central tool: Where critical thinking was promoted recently, Chinese civics will be taught in the future. The goal is clear: Hong Kong needs more central Chinese patriots.
In today’s second analysis, we look at the main problem the auto industry is facing: a global shortage of semiconductors. Car manufacturers still manage to hide the shortage – and even turn a profit from it. High demand and low supply are causing prices to rise.
But this strategy will soon come to an end. And so Christian Domke Seidel warns in his analysis: The chip shortage will last for several years – at least in the automotive industry. Companies must therefore react quickly. Chinese car companies show how: Guangzhou Automobile Group is taking stakes in local chip manufacturers, while BYD is securing mining rights for lithium.
Beijing’s central government is watching Hong Kong with concern. True, the remaining political opposition has retreated so far that it is virtually inaudible. But authoritarian government systems fear the resurgence of social dissent so much that they permanently invest large portions of their money, personnel, and attention in maintaining the status quo.
Driven by the constant fear of becoming a victim of conspiracies, the stability of its regime is always at the top of the political agenda. The ongoing handover of Hong Kong’s affairs of state from Carrie Lam’s government into the hands of former Police Officer John Lee is also a delicate time. The new government, enthroned on July 1, has to get itself in order, the ministers have to coordinate their actions while the administrative apparatus has to keep running smoothly under new leadership.
On Monday, the central government’s Hong Kong and Macau commissioner Xia Baolong appealed to the new leadership to “remain vigilant.” Xia spoke at a seminar in Beijing where officials from the former crown colonies had joined online. “We must resolutely clamp down on all anti-China forces that destabilize Hong Kong and Macau and leave no crack in the process,” Xia said. These forces are not dead, he added. Similar to Hong Kong, Macau was foreign-administered until 1999, when it was returned to the People’s Republic by Portugal.
One strategy to patch up potential “cracks” is to sinicize the education system. Last month, new textbooks were unveiled that will be used for the new Hong Kong civics curriculum in the city’s schools. Civics was officially introduced last fall and has now been given a suitable framework for teaching the subject. It replaces the so-called Liberal Studies, a multidisciplinary approach that was designed to prepare young people for careers in various sectors while teaching them critical thinking and systematic problem-solving.
With the end of Liberal Studies, the root of much hatred in Hong Kong society has been banished from Hong Kong classrooms, Chinese state media judged. It was said the subject had been used to slander the government and many teachers had carried their poisonous political views into the classrooms this way.
“With the reference materials from the Education Bureau, there will be no need for school teachers to bring in too much other content,” Tang Fei, Vice President of the Hong Kong Teachers’ Union (HKFEW), which is considered an advocacy group for the Beijing headquarters, told China’s Global Times newspaper. The HKFEW is the city’s largest teachers’ union, with about 42,000 members, after the long-established Hong Kong Professional Teachers’ Union (HKPTU), which had nearly 100,000 members, was dissolved last year. The HKPTU was seen as a thorn in Beijing’s side because of its liberal positions and came under increasing pressure after the introduction of the National Security Law.
The new textbooks take an in-depth look at Hong Kong’s recent history. Among other things, the so-called Basic Law, which is regarded as the city’s mini-constitution, is analyzed. The principle of “one country, two systems” is also an important part of the curriculum. Another central element is the importance of national security. In two years, the new civics curriculum will be part of the exams at secondary schools for the first time.
The trend toward pro-Chinese educational content in Hong Kong is not new and has been the subject of heated debate in recent years, as authors Sonny Shi-Hing Lo and Chung Fun Steven Hung outline in their book, “The Politics of Education Reform in China’s Hong Kong“.
The overall education reform in the Special Administrative Region has pushed the education system into a process by which it has become more and more similar to the system of the People’s Republic. The focus of the reform is on political “correctness” in understanding Chinese national security, history, and culture, the authors summarize.
The reform process has accelerated steadily in recent years precisely because the resistance of the political opposition has been broken for the past few years due to tighter legislation. Patriotic education is increasingly moving to the center of school education. It is supposed to provide the basis for achieving Beijing’s proclaimed goal of the city being governed and administered exclusively by patriots. On the surface and at the highest levels, this is already the case. But the administration consists of thousands and thousands of employees at lower levels, to whom a desired political attitude is preached but whose implementation in line with the state can hardly be verified in everyday life.
The new government will almost certainly work consistently on the patriotic education of the next generation. The new Secretary for Education, Choi Yuk Lin, seems to be determination personified. Back in 2012, Choi wanted to put her stamp on the education system when she suggested that textbooks should depict multi-party political systems as the root of chaos and unrest. At the time, resistance was still too great and the time was not ripe. Ten years later, Choi reached her goal.
The market for semiconductors has become a permanent problem for car manufacturers. Demand is rising, but supply is stagnating at best. This has consequences: Not enough cars are being built to meet demand. As a result, profit margins are rising, but manufacturers can forget about their growth strategies. And for a long time. A new study by management consultants AlixPartners predicts that the shortage of semiconductors will continue to affect production in 2024.
The central aspect is that EV would need about ten times as many chips as conventional cars. In addition, the automotive industry is not a priority for chip manufacturers, according to AlixPartners. It would require analog chips, but semiconductor manufacturers would invest in the much more profitable production of microcontrollers. These are used, for example, in consumer electronics and cell phones.
Chinese manufacturers are responding to the bottlenecks by acquiring stakes in local chip manufacturers. One example is the Guangzhou Automobile Group (GAC). This step is only logical since only five percent of the semiconductors needed for automotive construction come from the People’s Republic.
Investments along the value chain are a recipe for success for BYD, for example. In the first five months of 2022, the brand was able to double its deliveries, the specialist portal BSBC calculated. To a total of 590,000 units. No other manufacturer in the world sold as many new energy vehicles as BYD.
The big advantage of the brand is that the group is also the world’s third-largest battery manufacturer. Even Tesla wants to buy from the competitor. Crucially, BYD also owns mining rights for lithium in Chile and mines the raw material itself. Soon, BYD Semiconductor will go public. The manufacturer wants to use the proceeds to fund the development of its own semiconductors.
But even BYD has a hard time meeting demand. This has to do with a lack of production capacity. Currently, the fifth factory is already under construction. After completion, the brand is expected to be able to produce around 3.4 million vehicles a year. Since the end of March, models with combustion engines are no longer part of the program.
However, a stake in chipmakers alone is unlikely to fix the problem. Showa Denko KK, a Japanese chemical company, warned the chip industry on the news portal Bloomberg News of massive price increases in the near future. The group supplies Taiwan Semiconductor Manufacturing and Infineon, among others, with raw materials for chip production.
Hideki Somemiya, Chief Financial Officer, announced that “the current market moves require us to ask twice the amount we had previously calculated“. The reasons, he said, were huge energy costs, disrupted supply chains, and a weak yen. His company has already stopped selling certain raw materials and terminates contracts with customers if there is no basis for profitable cooperation, Somemiya said. Even withdrawal from individual business units is under discussion. So the big shock for automakers could still be coming.
But there is also good news, as the AlixPartners study calculates. Due to high demand and low supply, the 25 largest automakers would have increased their return on sales by 2.5 percentage points – to over 10.3 percent. It’s a trend that is expected to continue for some time. “Car production will not exceed demand again until 2025,” Fabian Piontek, a consultant at AlixPartners, told Reuters.
The best example of this is Daimler Truck. Its CEO Martin Daum recently stated at the annual general meeting that the annual production of over half a million vehicles had long since been sold out. Despite a price increase of about ten percent. However, AlixPartners urges caution. The additional profits are urgently needed, as the investment costs for EV will be around $500 billion worldwide in the next five years.
Especially since the largest car market in the world with the highest growth rates is still China. BYD is also successful here because the company is largely defined by its low price. The margin is just 1.5 percent.
When Stefanie Schweiger was little, her father often traveled to China on business trips. Every time he came back, he would take a gift for her out of his suitcase. “I had a part on my shelf just for all the things he brought me back from there,” she says. “They were sacred to me.”
Schweiger studied art history and photography in Frankfurt and Berlin – the fascination for China remained. When she was in her early 30s, she took a big step and moved to Beijing for several years, to the hutongs, the small alleys of the old city. “I knew all my neighbors, had a chat with them every day and visited the little café in a former temple that showed contemporary art and films.” At the time, the fact that this neighborhood was scheduled for demolition inspired her to create a series of portraits of her neighbors, photographing them in their homes. It was one of her first works in Beijing.
With the Chinese author Phoebe Hui, Schweiger later published the book “The Magic of Yuanfen” – A collection of texts and photographs. The two authors had spent three years traveling to the remotest corners of China in search of spirituality, ancient knowledge, beliefs, and superstitions. “Rapid developments in science and technology have modernized people’s lifestyles across the country,” Schweiger says. “But beneath this surface of modernity, in this vast country of 56 different ethnic groups, lies a history that goes back more than 3,500 years.”
Hui and Schweiger participated in mysterious ceremonies, walked for days with their protagonists over mountain tops, entered monasteries, drank home-brewed herbal medicine, and engaged as openly as possible with their respective counterparts. “We met healers and sages, Buddhist secret societies, shamans, hermits, Taoists, herbalists, Tibetan doctors, bimos, feng shui masters, and monks.” They constantly asked themselves the question: Can the wisdom or culture that has been passed down for hundreds or even thousands of years be reconciled with modern life in contemporary China?
“All the encounters on this trip were guided by fate or by chance – however you want to put it,” Schweiger says. “It was impressive that we always found what we were looking for.” Chance, or the binding force that brings a person together with other people or objects, is called “yuanfen” in Chinese. That is also how the book got its name.
Schweiger currently lives in Berlin again and is in the middle of a joint project with two female artists. A joint exhibition will follow next year. However, she is not yet allowed to reveal the theme. Svenja Napp
Delivery service à la Stanley Kubrick: The Tianzhou-3 launch vehicle successfully transports supplies to the Chinese space station. Our picture shows the Tianzhou-3 leaving the station again on Sunday and heading back to Earth.
