Table.Briefing: China (English)

Neighbors arm themselves against China + Germany wants to convince the US

Dear reader,

Last weekend, our deputy editor-in-chief Helene Bubrowski accompanied Germany’s Economy Minister Robert Habeck on a visit to the US. There, Habeck tried to explain Germany’s China strategy to his American counterparts: More skepticism when doing business with China – but no outright decoupling. Conversely, the Biden administration demanded more pressure on China and reduced trade. Yet it is the United States itself that is the largest buyer of Chinese goods.

In today’s interview conducted by Michael Radunski, Dan Smith, Director of the renowned Stockholm International Peace Research Institute (SIPRI), explains the priorities and goals, but also the weak points of the Chinese military. Chinese companies now rank among the largest weapons manufacturers in the world. “If you are Chinese, that perhaps looks encouraging. But from the outside, it is a worrying development,” says Smith.

And this worry is also reflected in the latest SIPRI arms sales report: Asia and Oceania have the highest demand for weapons in the world. China’s neighbors are trying to arm themselves for the worst-case scenario. The biggest supplier of military equipment for customers in the Far East: the United States.

Your
Amelie Richter
Image of Amelie  Richter

Interview

‘China’s build-up is geared towards its immediate territorial goals’

Interview with Dan Smith, Director of the renowned Stockholm International Peace Research Institute (Sipri).

China just raised its military budget again by 7.2 percent – that’s more than its economic growth. Therefore, many political analysts see China as the biggest threat in the 21st century. You know the facts. How big is China’s military build-up?  

China is the only country that has increased its military spending every year for the last 28 that we have recorded. This is not true of any other country in the world. It has been steadily increasing all the way since the early 1990s. China is now the second-largest military spender in the world, although still considerably behind the US in terms of spending.  

Where is this rapid armament particularly visible?

China has a very large navy and a very large air force. We’ve also tracked the increase and also the increasing sophistication of the Chinese arms industry. Although there are some limitations on data, it is very clear that two or three Chinese companies are amongst the top ten arms producers in the world. If you are Chinese, that perhaps looks encouraging. But from the outside, it is a worrying development.  

Within this build-up, do you see any focus?  

There is obviously a lot of emphasis on the navy and a focus on the immediate geographical area, as seen in the developments in the South China Sea, the East China Sea, where China has disputes with Japan, and most prominently, all around Taiwan.  

How dangerous is the situation around Taiwan?

China’s proclaimed goal is clear: reintegrating Taiwan into the People’s Republic of China, unification. At the moment, the Chinese line appears to be: We insist upon the unification happening, preferably by peaceful means. But it should happen.  

And if not, could China take Taiwan by force – from a purely military perspective?

Militarily it would be an enormously risky enterprise. I’m not sure whether they have the necessary amphibious capability, which is what they would obviously need. A very, very large scale if they were planning to take Taiwan by force. And still, even if they had that capability, it would be an enormous, hugely risky, and dangerous task to take.  

So there won’t be a war over Taiwan any time soon?

I don’t have a crystal ball to be able to tell, but it is clear that Beijing thinks that having a strong military means that the political pressure has more muscle behind that.

Do you see broader strategic goals behind China’s military build-up?  

Broadly, the goal is to make clear that China is a global power, a great power. That fits with the ambition that the international order should be adjusted. The international order, as we know it today, is essentially created on the basis of US power, and China wishes to change that. On an operational level, the build-up is clearly directed towards China’s immediate territorial goals and regional security.  

Is China’s rearmament a particular threat?

Overall, I think so, yes. But I’m probably less inclined to think that the build-up is an imminent threat. I’m perhaps less worried than some people expressing rather unnecessary rhetoric about it from the US or, indeed, from Europe.  

That is a little surprising.

You have to see the bigger picture. We are talking about a world in which more money is being spent on the military than ever before. The global military build-up went past 2.2 trillion US dollars last year, about one-third more than it was at the end of the Cold War.  

Which means …

… that the world is a more dangerous place, with more wars, more weapons, and more long-term threats like climate change, the ecological crisis, and pandemic risk than ever before. So this is a worrying situation. And China’s own steady military build-up is a part of that worrying situation.  

What about the quality of the Chinese military? A few months ago, we had some reports about rockets filled with water instead of fuel.  

First you have to remember the SIPRI Stockholm International Peace Research Institute is not an intelligence agency. But I think that, so far as we can tell from the outside, it looks to us as if the Chinese military equipment and its new technologies are largely quite technologically advanced. Generally speaking, it’s reliable and, in many ways, impressive.  

‘Generally speaking.’ That sounds like there’s a but.

… but we don’t know how it will perform because China has not been involved in active warfare for about over 40 years, since its clashes with Vietnam. And even then it did not perform with tremendous efficiency or success. So there is a thought that China’s armed forces may be less effective in practice than they look on paper.  

Could that also be a silver lining on the horizon that China might hesitate to use its military power because they don’t know whether it would be effective or not?  

I think that’s true. When you have a state or a government that is used to using armed force, they’re pretty confident. Whereas one who is not used to using armed force will be somewhat more inhibited and careful in their judgment.  

How important are other wars in those considerations? 

Very important. Regarding Taiwan, there is a geostrategic and geopolitical calculation that China is making. From my perspective, the Western response to Ukraine has dissuaded China somewhat from thinking: well, we could do the same with Taiwan. That is one reason why everybody, not just in Europe but also in East Asia, is looking very closely at what is happening in the US Congress about Ukraine, because the signals that the US Congress can give to Russia are also signals that it can give to China, whether it means to or not.  

Coming back to where we started: China as the biggest threat. Do we misjudge China? 

In a way. What we sometimes miss when we look at China is a comparative perspective. We look at China and we see its impressive build-up of spending and weapons systems and forces, and we see the pressure which that exerts in the immediate region. But then, think of a power that is on the other side of the largest ocean in the world, which is also exerting pressure in that region – and not only in that region but across the other side of the world, in the Mediterranean and so on- The USA remains, by a considerable distance, the paramount world military power at the moment.

So not all that worrying after all?

Don’t get me wrong, China must be taken seriously, and its build-up is real, and it certainly has considerable military capability, but we also need a comparative perspective to understand China’s relationship with the United States.

Dan Smith is the Director of the Stockholm International Peace Research Institute (SIPRI), which studies military and defense developments worldwide.

  • Geopolitics
  • Japan
  • Military
  • South China Sea
  • Taiwan
  • USA

Feature

Fear of Beijing: China’s neighbors buy more and more weapons

Nowhere in the world are as many weapons purchased as in Asia and Oceania. These are the findings of the latest “Trends in International Arms Transfers, 2023” report by the renowned Stockholm International Peace Research Institute (SIPRI). The report will be published this Monday and Table.Briefings has received the figures in advance. The report shows that around 37 percent of all major arms purchases between 2019 and 2023 went to countries in Asia and Oceania. Overall, this is a slight decrease compared to the period from 2014-18, when 41 percent of the global arms trade went to the region.

The report’s key findings for the region are:

  • China’s neighbors arm themselves – out of fear of Beijing’s foreign policy ambitions.
  • Taiwan’s arms imports have declined, but new purchases are already planned.
  • For the first time in 25 years, the USA is the largest arms seller in the region.
  • China’s arms purchases are declining because Beijing can now produce high-quality weapons on its own.

China’s neighbors fear Beijing’s ambitions

The new SIPRI report particularly highlights the arms imports of China’s direct neighbors: Japan’s purchases increased by a whopping 155 percent, the Philippines bought 105 percent more weapons, and South Korea’s military imports rose by 6.5 percent.

“There is little doubt that the persistently high levels of arms imports of Japan and other US allies and partners in Asia and Oceania are largely due to one key factor: concerns about China’s ambitions,” explains Siemon Wezeman, Senior Researcher in the SIPRI Arms Transfers Program.

Surprise Taiwan: the island’s arms purchases decline

At first glance, Taiwan’s arms imports trend appears surprising. They fell by 69 percent between 2014 and 2018 and 2019-2023 despite mounting tensions with China. The Chinese People’s Liberation Army is sending more and more aircraft across the median line of the Taiwan Strait. Experts call this “hybrid warfare”: China combines military and non-military means of exerting pressure without escalating the crisis.

However, Taiwan’s military planning has long since responded to the growing pressure: Major arms purchases are planned over the next five years, including acquiring 66 fighter jets, 108 tanks and 460 anti-ship missiles. According to SIPRI research, the US, which was responsible for over 99 percent of Taiwan’s arms imports between 2019 and 2023, will provide them all.

The US is the main weapons supplier

This leads to the next important finding of the SIPRI report: For the first time in 25 years, the United States was the largest arms supplier to Asia and Oceania. The US accounted for 34 percent of regional arms imports, followed by Russia with 19 percent and China with 13 percent. “The US, which shares their perception of a Chinese threat, is a growing supplier to the region,” says Wezeman.

The US is already the most important supplier for Japan and South Korea: The US supplies 97 percent of Japanese arms imports, compared to 72 percent for South Korea. Both countries are trying to improve their long-range strike capabilities through these purchases. For example, the USA delivered 29 fighter jets to Japan between 2019 and 2020, and Tokyo recently ordered 400 long-range land attack missiles. The Sipri report states that these would enable Japan to strike targets deep inside China or North Korea for the first time.

China now manufactures its own weapons

By contrast, China’s arms imports fell by 44 percent from 2019 to 2023. The reason for the drastic decline in Chinese imports can be found in China itself: The People’s Republic is increasingly capable of designing and manufacturing its own heavy ordnance.

It can be expected that China’s arms imports will continue to decrease as the leadership under President Xi Jinping places great importance on further developing its own capacities. However, this will cause further concerns throughout the region – in Taiwan, Japan, South Korea and the Philippines.

  • Geopolitics
  • Japan
  • Military
  • Philippines
  • South Korea
  • Taiwan
  • USA

Germany promotes its middle way on China

US Treasury Secretary Janet Yellen and German Economics Minister Robert Habeck.

During his four-day visit to the United States, German Economy Minister Robert Habeck sought to convince US government representatives of Germany’s new China policy. “We have clearly changed our attitude towards China compared to the previous government,” he emphasized in Washington. “We have developed a China strategy, we are taking a much closer look at investment screening.”

Habeck said the German government recently presented an economic security strategy aimed at bringing the production of critical materials such as semiconductors to Europe. “We have done a lot to diversify,” said Habeck, but simultaneously made it clear where the limits lie: Germany would not “decouple and restrict trade relations.” The goal is “not to be naive.”

The German government is trying to court the different interests. Joe Biden’s administration is pressuring the Europeans to restrict trade with China further and, for example, stop supplying high-tech chip manufacturing equipment to the country. Germany’s heavy investment in the Chinese chemical industry and the dependence of German car manufacturers on the Chinese market are a thorn in the United States’ side.

Habeck recognizes understanding for the German way

During his visit, Habeck exchanged views with US Secretary of Commerce Gina Raimondo, Secretary of the Treasury Janet Yellen, and Security Advisor Jake Sullivan. His assessment: “The Americans are well aware of the change of course and respect it.” Rather than citing economic interests as the sole reason, Habeck also emphasized geostrategic considerations: “We are working towards ensuring that it is always possible to maintain a relationship (with China).”

China should retain an interest in economically prosperous and peaceful coexistence “so that other principles or other forms, not to mention military ones, do not have the last word. This must be prevented at all costs.” The German government fears that China could ally itself with Russia and Iran in the event of further isolation. Despite all the difficulties, the only way to influence Moscow so far was through Beijing.

However, this raises the question whether Germany is making the same mistake as it did with Russia before 2022. Back then, the focus was also on economic interests, but for years, the argument also was that economic ties were important to keep the Kremlin in check. The Chancellery (of Angela Merkel and then Scholz) only withdrew from the Nord Stream 2 pipeline after the Russian invasion of Ukraine in 2022.

‘No sign’ of a withdrawal from China

The US criticism also has a factual basis. Volkswagen alone sells around 40 percent of its cars in China, generating half of its revenue there. VW plans to invest another three billion euros in its R&D center in the Anhui province. Chemical giant BASF is finalizing a massive plant worth ten billion euros in Zhanjiang. In parallel, both DAX-listed companies are cutting jobs in Germany.

Other German companies are also stepping up their involvement in China as if there were no discussion about minimizing risks. According to the German Bundesbank in February, German investments rose 4.3 percent to 11.9 billion euros last year. China’s share of total foreign direct investment in the German economy exceeded the ten percent mark for the first time since 2014.

Economist Juergen Matthes from the German Economic Institute (IW) analyzed the figures and sees no sign of “diversification.” The reason for this also lies in understanding the term “de-risking.” Politicians define this as actually reducing business with and in China in order to reduce dependencies. Companies, on the other hand, intend to reduce trade risks by strengthening local production to be able to continue producing for the Chinese market in the event of an escalation. When they speak of de-risking, they mean localization.

Even the US is not thinking of doing without China

Germany’s particularly close economic ties with China are the reason for warnings from the Federation of German Industries (BDI) that it must not be forgotten that China remains a “key economic partner.” In 2023, goods trade between Germany and China has already decreased by 15.5 percent.

However, part of the truth is that the United States is also far from abandoning its business with China, with trade totaling around 575 billion US dollars in 2023. At 472 billion dollars, the bulk of this is generated by the import of goods. For example, Apple still manufactures 95 percent of its products in China.

According to business experts, US companies sometimes rely even more on production in China than European companies. “German companies in the US are much less dependent on Chinese supply chains than their American counterparts,” believes Mark Tomkins, President and CEO of the German American Chamber of Commerce of the Midwest.

The German government is divided – despite the ‘Zeitenwende’

Habeck’s trip to Washington comes at a time when there are very different perspectives on the future of business with China. Just how much opinions have changed is particularly evident in the debate about the use of Chinese technology in Germany’s 5G network and the dispute over the Chinese shipping company Cosco’s acquisition of a stake in a terminal at the Port of Hamburg.

Here, too, the political parties in Germany’s coalition government have different stances. If it were up to the Green Party alone, the policy on China would be even stricter. In comparison, Scholz is comparatively sympathetic towards the German industry.

Trump’s presidency could force a course correction

However, there are doubts about whether the German government will get away with trying to play both sides should Donald Trump be elected US President for the second time in November. In 2018, Trump sparked a trade dispute by imposing higher import tariffs on Chinese goods, which hit the entire global economy. He recently announced that he would impose 60 percent or higher tariffs on Chinese imports if elected.

In this scenario, the Europeans could face problems with the US government if they don’t change to a US course. Regardless of the election outcome, Habeck told the German press in Washington that if he were forced to choose between the US and China, “then I would say that the relationship with the US is dominant, including militarily and economically.” Contribution: ari/fin/flee

  • Geopolitics
  • Trade
  • USA

News

Special representative Li Hui for talks in Berlin

Beijing’s Special Representative on Eurasian Affairs, Li Hui, was in Berlin for talks on Saturday. As the state-run Global Times reported on X, Li met with Thomas Bagger, State Secretary at the German Foreign Office. During the meeting, Li warned against a further escalation in the war against Ukraine. This would not be “in line with the common interests of the international community, including China and Germany,” Li said, according to the Chinese report. Li visited Ukraine on Thursday. His next stop after Berlin will be Paris.

The Chinese special representative is tasked with exploring the potential for peace talks between Ukraine and Russia. According to EU circles, his trip to Brussels and Warsaw has not been particularly successful. In talks with EU representatives, Li has mainly echoed the Russian narrative. Li also criticized the EU sanctions against Chinese companies. He only stayed in Kyiv for a few hours on Friday. ari

  • Ukraine-Krieg

Consumer prices rise for the first time in six months

Consumer prices in China have risen for the first time in six months, thanks to the Chinese New Year. According to data released by the National Bureau of Statistics (NBS) on Saturday, the Consumer Price Index (CPI) rose by 0.7 percent year-on-year in February. Economists fear that China is heading into deflation, with people saving their money in anticipation of lower prices. From this perspective, the minimal increase is good news.

The bounce into positive territory contrasted with the 0.8 percent fall in January, the steepest drop in over 14 years. In February of this year, the Consumer Price Index rose by one percent compared to the previous month, exceeding the 0.3 percent increase in January and economic experts’ 0.7 percent growth forecast. However, the producer price index (PPI) fell 2.7 percent from a year earlier in February versus a 2.5 percent drop the previous month. Producer prices have declined for more than 1-1/2 years. rtr/ari

  • Gesellschaft

Executive Moves

Carlson Tong will become the new Chairman of the Hong Kong Stock Exchange after April 24. He previously held the position of chairman of KPMG China.

Oliver Matthees joined Eugina Limited in Hong Kong as Sales Director at the beginning of the month. Until the end of January, he was Director of Sales Asia Pacific at Martosca Asia Pacific Limited, also in Hong Kong.

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

So to Speak

Cloud cat coke

云吸猫 – yúnxīmāo – cloud cat coke

Feeling restless, anxious, or agitated? Can you not think clearly while sitting in your office chair, and your sweaty hands magically gravitate toward your smartphone? Well, maybe these are just withdrawal symptoms, and it’s time to snort a few cats online again! Because, let’s be honest, watching a couple of purring felines on YouTube or TikTok helps you think more clearly, and the world looks completely different again.

Of course, the Chinese have long recognized the addictive properties of kittie paws and have even created a tongue-in-cheek verbal monument in the form of the buzzword 吸猫 xīmāo – quite literally “to inhale cats” (from 吸 xī “(suck up), inhale, inhale” + 猫 māo “cat”). For native speakers, the play on words evokes associations with other classic addictive behaviors such as 吸烟 xīyān “to smoke” (literally: “to inhale smoke”), 吸大麻 xī dàmá “to smoke weed, marijuana” (“to inhale marijuana”) or, more generally, 吸毒 xīdú “to take drugs.”

This feline metaphor is derived from the innocuous expression 吸猫体质 xīmāo tǐzhì (体质 tǐzhì for “physical constitution”) – the Chinese equivalent of the English “cat person.” Here, the character 吸 xī still meant 吸引 xīyǐn “to attract, entice.” Chinese netizens then drew an analogy with the homonymous 吸 xī as in吸毒 xīdú “to take drugs, to get high; to be addicted to drugs,” inspired by the increasing number of cat junkies online who stroke and cuddle their purring pets on social media (撸猫 lū māo), cuddle them and sometimes outright nibble on them. Et voilà – the concept of the cat-aholic doing coke was born.

Those who can’t get their kitty dose in real life – for example, because they don’t have a cat-friendly apartment or a job that simply doesn’t allow them enough time to scratch their furry friend – can simply switch to the virtual world. Dealers who supply flawless kitten material can be found on all popular social media platforms, from Douyin (抖音Dǒuyīn) and Little Red Book (小红书 Xiǎohóngshū) to the WeChat timeline (微信朋友圈 Wēixìn péngyouquān). Here cat junkies can get their dosage in the form of millions of kitty pics and funny cat clips. Of course, Mandarin also comes up with its own neologism for this: 云吸猫 yúnxīmāo “cloud cat coke”- in other words, virtually indulging your cat addiction.

This online addiction is also known among Chinese cat-aholics as keeping a cat in the cloud (云养猫 yúnyǎngmāo). In other words, becoming a virtual pet owner by participating in the everyday cat life of other pet owners.

Incidentally, cloud animal husbandry fits in neatly with a whole series of other “cloud words” that have established themselves in the wake of the widespread online shift of many areas of life during the Covid pandemic and have been wafting through the Chinese linguistic horizon ever since. These include phenomena such as cloud teaching (云上课 yúnshàngkè – online classes), cloud work (云办公 yúnbàngōng – remote working) or cloud job interviews (云面试 yúnmiànshì – online job interviews). Cyber word blossoms also include cloud dinner dates (云聚餐 yúnjùcān – virtual meals with friends, e.g., via Zoom or Teams) or cloud travel (云旅游yúnlǚyóu – free virtual travel via internet content from the comfort of your own home).

During Covid, China even had cloud entertainment formats (云综艺yúnzōngyì) in which celebrities and guests connected via video link on entertainment programs. For those who strongly suspect that they themselves have become addicted to digital felines and are unable to escape the phone screen to seek help, cloud diagnosis (云问诊 yúnwènzhěn – from 问诊 wènzhěn “patient questioning,” one of the classic diagnostic procedures in TCM) may be the solution – i.e., remote diagnosis via an online consultation.

A clear warning sign of such an addiction would be, for example, if you still have a headache on Monday morning at work after a night of binging cat clips. To avoid such addictions and an uncomfortable cold withdrawal, take the following warning from the Chinese online community to heart, which should actually be shown before every kitty clip:

小心,吸猫会上瘾!

Xiǎoxīn, xīmāo huì shàngyǐn!

“Be careful – snorting cats can be addictive!”

So please don’t say that you weren’t explicitly warned.

Verena Menzel runs the online language school New Chinese in Beijing.

China.Table editorial team

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    Last weekend, our deputy editor-in-chief Helene Bubrowski accompanied Germany’s Economy Minister Robert Habeck on a visit to the US. There, Habeck tried to explain Germany’s China strategy to his American counterparts: More skepticism when doing business with China – but no outright decoupling. Conversely, the Biden administration demanded more pressure on China and reduced trade. Yet it is the United States itself that is the largest buyer of Chinese goods.

    In today’s interview conducted by Michael Radunski, Dan Smith, Director of the renowned Stockholm International Peace Research Institute (SIPRI), explains the priorities and goals, but also the weak points of the Chinese military. Chinese companies now rank among the largest weapons manufacturers in the world. “If you are Chinese, that perhaps looks encouraging. But from the outside, it is a worrying development,” says Smith.

    And this worry is also reflected in the latest SIPRI arms sales report: Asia and Oceania have the highest demand for weapons in the world. China’s neighbors are trying to arm themselves for the worst-case scenario. The biggest supplier of military equipment for customers in the Far East: the United States.

    Your
    Amelie Richter
    Image of Amelie  Richter

    Interview

    ‘China’s build-up is geared towards its immediate territorial goals’

    Interview with Dan Smith, Director of the renowned Stockholm International Peace Research Institute (Sipri).

    China just raised its military budget again by 7.2 percent – that’s more than its economic growth. Therefore, many political analysts see China as the biggest threat in the 21st century. You know the facts. How big is China’s military build-up?  

    China is the only country that has increased its military spending every year for the last 28 that we have recorded. This is not true of any other country in the world. It has been steadily increasing all the way since the early 1990s. China is now the second-largest military spender in the world, although still considerably behind the US in terms of spending.  

    Where is this rapid armament particularly visible?

    China has a very large navy and a very large air force. We’ve also tracked the increase and also the increasing sophistication of the Chinese arms industry. Although there are some limitations on data, it is very clear that two or three Chinese companies are amongst the top ten arms producers in the world. If you are Chinese, that perhaps looks encouraging. But from the outside, it is a worrying development.  

    Within this build-up, do you see any focus?  

    There is obviously a lot of emphasis on the navy and a focus on the immediate geographical area, as seen in the developments in the South China Sea, the East China Sea, where China has disputes with Japan, and most prominently, all around Taiwan.  

    How dangerous is the situation around Taiwan?

    China’s proclaimed goal is clear: reintegrating Taiwan into the People’s Republic of China, unification. At the moment, the Chinese line appears to be: We insist upon the unification happening, preferably by peaceful means. But it should happen.  

    And if not, could China take Taiwan by force – from a purely military perspective?

    Militarily it would be an enormously risky enterprise. I’m not sure whether they have the necessary amphibious capability, which is what they would obviously need. A very, very large scale if they were planning to take Taiwan by force. And still, even if they had that capability, it would be an enormous, hugely risky, and dangerous task to take.  

    So there won’t be a war over Taiwan any time soon?

    I don’t have a crystal ball to be able to tell, but it is clear that Beijing thinks that having a strong military means that the political pressure has more muscle behind that.

    Do you see broader strategic goals behind China’s military build-up?  

    Broadly, the goal is to make clear that China is a global power, a great power. That fits with the ambition that the international order should be adjusted. The international order, as we know it today, is essentially created on the basis of US power, and China wishes to change that. On an operational level, the build-up is clearly directed towards China’s immediate territorial goals and regional security.  

    Is China’s rearmament a particular threat?

    Overall, I think so, yes. But I’m probably less inclined to think that the build-up is an imminent threat. I’m perhaps less worried than some people expressing rather unnecessary rhetoric about it from the US or, indeed, from Europe.  

    That is a little surprising.

    You have to see the bigger picture. We are talking about a world in which more money is being spent on the military than ever before. The global military build-up went past 2.2 trillion US dollars last year, about one-third more than it was at the end of the Cold War.  

    Which means …

    … that the world is a more dangerous place, with more wars, more weapons, and more long-term threats like climate change, the ecological crisis, and pandemic risk than ever before. So this is a worrying situation. And China’s own steady military build-up is a part of that worrying situation.  

    What about the quality of the Chinese military? A few months ago, we had some reports about rockets filled with water instead of fuel.  

    First you have to remember the SIPRI Stockholm International Peace Research Institute is not an intelligence agency. But I think that, so far as we can tell from the outside, it looks to us as if the Chinese military equipment and its new technologies are largely quite technologically advanced. Generally speaking, it’s reliable and, in many ways, impressive.  

    ‘Generally speaking.’ That sounds like there’s a but.

    … but we don’t know how it will perform because China has not been involved in active warfare for about over 40 years, since its clashes with Vietnam. And even then it did not perform with tremendous efficiency or success. So there is a thought that China’s armed forces may be less effective in practice than they look on paper.  

    Could that also be a silver lining on the horizon that China might hesitate to use its military power because they don’t know whether it would be effective or not?  

    I think that’s true. When you have a state or a government that is used to using armed force, they’re pretty confident. Whereas one who is not used to using armed force will be somewhat more inhibited and careful in their judgment.  

    How important are other wars in those considerations? 

    Very important. Regarding Taiwan, there is a geostrategic and geopolitical calculation that China is making. From my perspective, the Western response to Ukraine has dissuaded China somewhat from thinking: well, we could do the same with Taiwan. That is one reason why everybody, not just in Europe but also in East Asia, is looking very closely at what is happening in the US Congress about Ukraine, because the signals that the US Congress can give to Russia are also signals that it can give to China, whether it means to or not.  

    Coming back to where we started: China as the biggest threat. Do we misjudge China? 

    In a way. What we sometimes miss when we look at China is a comparative perspective. We look at China and we see its impressive build-up of spending and weapons systems and forces, and we see the pressure which that exerts in the immediate region. But then, think of a power that is on the other side of the largest ocean in the world, which is also exerting pressure in that region – and not only in that region but across the other side of the world, in the Mediterranean and so on- The USA remains, by a considerable distance, the paramount world military power at the moment.

    So not all that worrying after all?

    Don’t get me wrong, China must be taken seriously, and its build-up is real, and it certainly has considerable military capability, but we also need a comparative perspective to understand China’s relationship with the United States.

    Dan Smith is the Director of the Stockholm International Peace Research Institute (SIPRI), which studies military and defense developments worldwide.

    • Geopolitics
    • Japan
    • Military
    • South China Sea
    • Taiwan
    • USA

    Feature

    Fear of Beijing: China’s neighbors buy more and more weapons

    Nowhere in the world are as many weapons purchased as in Asia and Oceania. These are the findings of the latest “Trends in International Arms Transfers, 2023” report by the renowned Stockholm International Peace Research Institute (SIPRI). The report will be published this Monday and Table.Briefings has received the figures in advance. The report shows that around 37 percent of all major arms purchases between 2019 and 2023 went to countries in Asia and Oceania. Overall, this is a slight decrease compared to the period from 2014-18, when 41 percent of the global arms trade went to the region.

    The report’s key findings for the region are:

    • China’s neighbors arm themselves – out of fear of Beijing’s foreign policy ambitions.
    • Taiwan’s arms imports have declined, but new purchases are already planned.
    • For the first time in 25 years, the USA is the largest arms seller in the region.
    • China’s arms purchases are declining because Beijing can now produce high-quality weapons on its own.

    China’s neighbors fear Beijing’s ambitions

    The new SIPRI report particularly highlights the arms imports of China’s direct neighbors: Japan’s purchases increased by a whopping 155 percent, the Philippines bought 105 percent more weapons, and South Korea’s military imports rose by 6.5 percent.

    “There is little doubt that the persistently high levels of arms imports of Japan and other US allies and partners in Asia and Oceania are largely due to one key factor: concerns about China’s ambitions,” explains Siemon Wezeman, Senior Researcher in the SIPRI Arms Transfers Program.

    Surprise Taiwan: the island’s arms purchases decline

    At first glance, Taiwan’s arms imports trend appears surprising. They fell by 69 percent between 2014 and 2018 and 2019-2023 despite mounting tensions with China. The Chinese People’s Liberation Army is sending more and more aircraft across the median line of the Taiwan Strait. Experts call this “hybrid warfare”: China combines military and non-military means of exerting pressure without escalating the crisis.

    However, Taiwan’s military planning has long since responded to the growing pressure: Major arms purchases are planned over the next five years, including acquiring 66 fighter jets, 108 tanks and 460 anti-ship missiles. According to SIPRI research, the US, which was responsible for over 99 percent of Taiwan’s arms imports between 2019 and 2023, will provide them all.

    The US is the main weapons supplier

    This leads to the next important finding of the SIPRI report: For the first time in 25 years, the United States was the largest arms supplier to Asia and Oceania. The US accounted for 34 percent of regional arms imports, followed by Russia with 19 percent and China with 13 percent. “The US, which shares their perception of a Chinese threat, is a growing supplier to the region,” says Wezeman.

    The US is already the most important supplier for Japan and South Korea: The US supplies 97 percent of Japanese arms imports, compared to 72 percent for South Korea. Both countries are trying to improve their long-range strike capabilities through these purchases. For example, the USA delivered 29 fighter jets to Japan between 2019 and 2020, and Tokyo recently ordered 400 long-range land attack missiles. The Sipri report states that these would enable Japan to strike targets deep inside China or North Korea for the first time.

    China now manufactures its own weapons

    By contrast, China’s arms imports fell by 44 percent from 2019 to 2023. The reason for the drastic decline in Chinese imports can be found in China itself: The People’s Republic is increasingly capable of designing and manufacturing its own heavy ordnance.

    It can be expected that China’s arms imports will continue to decrease as the leadership under President Xi Jinping places great importance on further developing its own capacities. However, this will cause further concerns throughout the region – in Taiwan, Japan, South Korea and the Philippines.

    • Geopolitics
    • Japan
    • Military
    • Philippines
    • South Korea
    • Taiwan
    • USA

    Germany promotes its middle way on China

    US Treasury Secretary Janet Yellen and German Economics Minister Robert Habeck.

    During his four-day visit to the United States, German Economy Minister Robert Habeck sought to convince US government representatives of Germany’s new China policy. “We have clearly changed our attitude towards China compared to the previous government,” he emphasized in Washington. “We have developed a China strategy, we are taking a much closer look at investment screening.”

    Habeck said the German government recently presented an economic security strategy aimed at bringing the production of critical materials such as semiconductors to Europe. “We have done a lot to diversify,” said Habeck, but simultaneously made it clear where the limits lie: Germany would not “decouple and restrict trade relations.” The goal is “not to be naive.”

    The German government is trying to court the different interests. Joe Biden’s administration is pressuring the Europeans to restrict trade with China further and, for example, stop supplying high-tech chip manufacturing equipment to the country. Germany’s heavy investment in the Chinese chemical industry and the dependence of German car manufacturers on the Chinese market are a thorn in the United States’ side.

    Habeck recognizes understanding for the German way

    During his visit, Habeck exchanged views with US Secretary of Commerce Gina Raimondo, Secretary of the Treasury Janet Yellen, and Security Advisor Jake Sullivan. His assessment: “The Americans are well aware of the change of course and respect it.” Rather than citing economic interests as the sole reason, Habeck also emphasized geostrategic considerations: “We are working towards ensuring that it is always possible to maintain a relationship (with China).”

    China should retain an interest in economically prosperous and peaceful coexistence “so that other principles or other forms, not to mention military ones, do not have the last word. This must be prevented at all costs.” The German government fears that China could ally itself with Russia and Iran in the event of further isolation. Despite all the difficulties, the only way to influence Moscow so far was through Beijing.

    However, this raises the question whether Germany is making the same mistake as it did with Russia before 2022. Back then, the focus was also on economic interests, but for years, the argument also was that economic ties were important to keep the Kremlin in check. The Chancellery (of Angela Merkel and then Scholz) only withdrew from the Nord Stream 2 pipeline after the Russian invasion of Ukraine in 2022.

    ‘No sign’ of a withdrawal from China

    The US criticism also has a factual basis. Volkswagen alone sells around 40 percent of its cars in China, generating half of its revenue there. VW plans to invest another three billion euros in its R&D center in the Anhui province. Chemical giant BASF is finalizing a massive plant worth ten billion euros in Zhanjiang. In parallel, both DAX-listed companies are cutting jobs in Germany.

    Other German companies are also stepping up their involvement in China as if there were no discussion about minimizing risks. According to the German Bundesbank in February, German investments rose 4.3 percent to 11.9 billion euros last year. China’s share of total foreign direct investment in the German economy exceeded the ten percent mark for the first time since 2014.

    Economist Juergen Matthes from the German Economic Institute (IW) analyzed the figures and sees no sign of “diversification.” The reason for this also lies in understanding the term “de-risking.” Politicians define this as actually reducing business with and in China in order to reduce dependencies. Companies, on the other hand, intend to reduce trade risks by strengthening local production to be able to continue producing for the Chinese market in the event of an escalation. When they speak of de-risking, they mean localization.

    Even the US is not thinking of doing without China

    Germany’s particularly close economic ties with China are the reason for warnings from the Federation of German Industries (BDI) that it must not be forgotten that China remains a “key economic partner.” In 2023, goods trade between Germany and China has already decreased by 15.5 percent.

    However, part of the truth is that the United States is also far from abandoning its business with China, with trade totaling around 575 billion US dollars in 2023. At 472 billion dollars, the bulk of this is generated by the import of goods. For example, Apple still manufactures 95 percent of its products in China.

    According to business experts, US companies sometimes rely even more on production in China than European companies. “German companies in the US are much less dependent on Chinese supply chains than their American counterparts,” believes Mark Tomkins, President and CEO of the German American Chamber of Commerce of the Midwest.

    The German government is divided – despite the ‘Zeitenwende’

    Habeck’s trip to Washington comes at a time when there are very different perspectives on the future of business with China. Just how much opinions have changed is particularly evident in the debate about the use of Chinese technology in Germany’s 5G network and the dispute over the Chinese shipping company Cosco’s acquisition of a stake in a terminal at the Port of Hamburg.

    Here, too, the political parties in Germany’s coalition government have different stances. If it were up to the Green Party alone, the policy on China would be even stricter. In comparison, Scholz is comparatively sympathetic towards the German industry.

    Trump’s presidency could force a course correction

    However, there are doubts about whether the German government will get away with trying to play both sides should Donald Trump be elected US President for the second time in November. In 2018, Trump sparked a trade dispute by imposing higher import tariffs on Chinese goods, which hit the entire global economy. He recently announced that he would impose 60 percent or higher tariffs on Chinese imports if elected.

    In this scenario, the Europeans could face problems with the US government if they don’t change to a US course. Regardless of the election outcome, Habeck told the German press in Washington that if he were forced to choose between the US and China, “then I would say that the relationship with the US is dominant, including militarily and economically.” Contribution: ari/fin/flee

    • Geopolitics
    • Trade
    • USA

    News

    Special representative Li Hui for talks in Berlin

    Beijing’s Special Representative on Eurasian Affairs, Li Hui, was in Berlin for talks on Saturday. As the state-run Global Times reported on X, Li met with Thomas Bagger, State Secretary at the German Foreign Office. During the meeting, Li warned against a further escalation in the war against Ukraine. This would not be “in line with the common interests of the international community, including China and Germany,” Li said, according to the Chinese report. Li visited Ukraine on Thursday. His next stop after Berlin will be Paris.

    The Chinese special representative is tasked with exploring the potential for peace talks between Ukraine and Russia. According to EU circles, his trip to Brussels and Warsaw has not been particularly successful. In talks with EU representatives, Li has mainly echoed the Russian narrative. Li also criticized the EU sanctions against Chinese companies. He only stayed in Kyiv for a few hours on Friday. ari

    • Ukraine-Krieg

    Consumer prices rise for the first time in six months

    Consumer prices in China have risen for the first time in six months, thanks to the Chinese New Year. According to data released by the National Bureau of Statistics (NBS) on Saturday, the Consumer Price Index (CPI) rose by 0.7 percent year-on-year in February. Economists fear that China is heading into deflation, with people saving their money in anticipation of lower prices. From this perspective, the minimal increase is good news.

    The bounce into positive territory contrasted with the 0.8 percent fall in January, the steepest drop in over 14 years. In February of this year, the Consumer Price Index rose by one percent compared to the previous month, exceeding the 0.3 percent increase in January and economic experts’ 0.7 percent growth forecast. However, the producer price index (PPI) fell 2.7 percent from a year earlier in February versus a 2.5 percent drop the previous month. Producer prices have declined for more than 1-1/2 years. rtr/ari

    • Gesellschaft

    Executive Moves

    Carlson Tong will become the new Chairman of the Hong Kong Stock Exchange after April 24. He previously held the position of chairman of KPMG China.

    Oliver Matthees joined Eugina Limited in Hong Kong as Sales Director at the beginning of the month. Until the end of January, he was Director of Sales Asia Pacific at Martosca Asia Pacific Limited, also in Hong Kong.

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

    So to Speak

    Cloud cat coke

    云吸猫 – yúnxīmāo – cloud cat coke

    Feeling restless, anxious, or agitated? Can you not think clearly while sitting in your office chair, and your sweaty hands magically gravitate toward your smartphone? Well, maybe these are just withdrawal symptoms, and it’s time to snort a few cats online again! Because, let’s be honest, watching a couple of purring felines on YouTube or TikTok helps you think more clearly, and the world looks completely different again.

    Of course, the Chinese have long recognized the addictive properties of kittie paws and have even created a tongue-in-cheek verbal monument in the form of the buzzword 吸猫 xīmāo – quite literally “to inhale cats” (from 吸 xī “(suck up), inhale, inhale” + 猫 māo “cat”). For native speakers, the play on words evokes associations with other classic addictive behaviors such as 吸烟 xīyān “to smoke” (literally: “to inhale smoke”), 吸大麻 xī dàmá “to smoke weed, marijuana” (“to inhale marijuana”) or, more generally, 吸毒 xīdú “to take drugs.”

    This feline metaphor is derived from the innocuous expression 吸猫体质 xīmāo tǐzhì (体质 tǐzhì for “physical constitution”) – the Chinese equivalent of the English “cat person.” Here, the character 吸 xī still meant 吸引 xīyǐn “to attract, entice.” Chinese netizens then drew an analogy with the homonymous 吸 xī as in吸毒 xīdú “to take drugs, to get high; to be addicted to drugs,” inspired by the increasing number of cat junkies online who stroke and cuddle their purring pets on social media (撸猫 lū māo), cuddle them and sometimes outright nibble on them. Et voilà – the concept of the cat-aholic doing coke was born.

    Those who can’t get their kitty dose in real life – for example, because they don’t have a cat-friendly apartment or a job that simply doesn’t allow them enough time to scratch their furry friend – can simply switch to the virtual world. Dealers who supply flawless kitten material can be found on all popular social media platforms, from Douyin (抖音Dǒuyīn) and Little Red Book (小红书 Xiǎohóngshū) to the WeChat timeline (微信朋友圈 Wēixìn péngyouquān). Here cat junkies can get their dosage in the form of millions of kitty pics and funny cat clips. Of course, Mandarin also comes up with its own neologism for this: 云吸猫 yúnxīmāo “cloud cat coke”- in other words, virtually indulging your cat addiction.

    This online addiction is also known among Chinese cat-aholics as keeping a cat in the cloud (云养猫 yúnyǎngmāo). In other words, becoming a virtual pet owner by participating in the everyday cat life of other pet owners.

    Incidentally, cloud animal husbandry fits in neatly with a whole series of other “cloud words” that have established themselves in the wake of the widespread online shift of many areas of life during the Covid pandemic and have been wafting through the Chinese linguistic horizon ever since. These include phenomena such as cloud teaching (云上课 yúnshàngkè – online classes), cloud work (云办公 yúnbàngōng – remote working) or cloud job interviews (云面试 yúnmiànshì – online job interviews). Cyber word blossoms also include cloud dinner dates (云聚餐 yúnjùcān – virtual meals with friends, e.g., via Zoom or Teams) or cloud travel (云旅游yúnlǚyóu – free virtual travel via internet content from the comfort of your own home).

    During Covid, China even had cloud entertainment formats (云综艺yúnzōngyì) in which celebrities and guests connected via video link on entertainment programs. For those who strongly suspect that they themselves have become addicted to digital felines and are unable to escape the phone screen to seek help, cloud diagnosis (云问诊 yúnwènzhěn – from 问诊 wènzhěn “patient questioning,” one of the classic diagnostic procedures in TCM) may be the solution – i.e., remote diagnosis via an online consultation.

    A clear warning sign of such an addiction would be, for example, if you still have a headache on Monday morning at work after a night of binging cat clips. To avoid such addictions and an uncomfortable cold withdrawal, take the following warning from the Chinese online community to heart, which should actually be shown before every kitty clip:

    小心,吸猫会上瘾!

    Xiǎoxīn, xīmāo huì shàngyǐn!

    “Be careful – snorting cats can be addictive!”

    So please don’t say that you weren’t explicitly warned.

    Verena Menzel runs the online language school New Chinese in Beijing.

    China.Table editorial team

    CHINA.TABLE EDITORIAL OFFICE

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