New premier Li Qiang + Netherlands join chip sanctions

Dear reader,

The National People’s Congress is drawing to a close – and with it the important appointments for the new government. State and party leader Xi Jinping will get his much-coveted third term as president. It is almost as certain that Li Qiang, who previously headed the CP in Shanghai, will become the new premier on Saturday. Unlike his departing predecessor Li Keqiang, the younger Li is a trusted associate of President Xi Jinping.

But Li is not only the functionary who was responsible for last spring’s harsh lockdown in Shanghai. Nor is he considered a mere yes-man: Li Qiang has repeatedly proven himself to be an efficient, pro-business doer over the course of his career, as Joern Petring analyzes. Now Xi only has to give him the necessary leeway. His predecessor Li Keqiang did not have it.

The US influence on the way China’s tech industry is treated also played a crucial role in a decision by the government in The Hague. The Netherlands places machines for the production of state-of-the-art microchips under export restrictions. Together with Japan, they are thus cutting off the Chinese semiconductor industry from technology that can be used to manufacture the most powerful processors.

Another slap in China’s face – and confirmation to all those there who believe in a US conspiracy against China’s rise. From the American point of view, however, the step was only logical, analyzes Finn Mayer-Kuckuk.

Your
Christiane Kühl

Li Qiang: A premier Xi trusts in

In October he was appointed to the Standing Committee of the Politburo, followed by his election as Premier on Saturday: Li Qiang (front right) is a close confidant of Xi Jinping.

Saturday will be the day: The National People’s Congress in Beijing will elect China’s new premier. And in all likelihood, his name will be Li Qiang. What he and the incumbent Li Keqiang have in common is that they are considered to be business-oriented. Just as Li Keqiang made efforts to open up the country and introduce reforms during his ten years in office, Li Qiang has done a lot to support the private sector, most recently as party leader in Shanghai and in previous positions.

The fact that the departing Premier has a Ph.D. in economics and that the new Li once studied agricultural mechanization does not matter much. Both have gained the necessary experience for the job over their long political careers. Career changers do not become premier in China.

And yet the new Li and the old Li (the similarity of their names is pure coincidence) tick very differently in one crucial respect, which could also have implications for China’s future economic policy: They belong to different political movements. Li Keqiang is a protégé of Hu Jintao, whose base of power is the Communist Party’s Youth League. Li Qiang, on the other hand, firmly belongs to President Xi Jinping’s faction. He served as Xi’s chief of staff while Xi was still in charge of the province of Zhejiang. Both know each other well. Li Qiang has been a loyal follower of Xi for years. And what is probably even more important: Xi trusts him.

The office has lost massive importance

The possible scenarios are thus obvious: Li could become Xi’s enforcer. But he could also quietly try and influence him. It is obvious that Xi has massively devalued the office of premier under Li Keqiang. The head of state wanted to hold the reins himself in every respect. This also applies to economic policy, which has traditionally been the premier’s responsibility.

In the beginning, things looked different: As soon as he took office, Li Keqiang confidently announced that the reforms would hurt “like a cut in the wrist”. Hopingly, the international media coined the term “Likonomics”, which, however, soon disappeared again. Soon China’s state media almost exclusively portrayed Xi as the driving force behind economic policy.

According to a Bloomberg analysis, the President’s name has been mentioned in the People’s Daily more than six times as often as Li Keqiang’s in the ten years Xi has been in power. In the decade before that, when President Hu Jintao and Premier Wen Jiabao were in power, the ratio was 2:1.

The new premier is no ‘yes man’

Will Li Qiang now gain some more power again? At any rate, observers see in him more than just a “yes man”. “He doesn’t talk so much about ideology, but a bit more about how to do things,” says Nis Gruenberg of the China Institute Merics in Berlin. Li Qiang would thus fit the office of premier quite well.

During the Covid pandemic, he initially imposed a less restrictive approach to dealing with the virus in Shanghai – in contrast to many other regions in China. However, as the metropolis was unable to control an outbreak in the spring of 2022, Shanghai was eventually placed under a strict lockdown for two months. It seemed as if he was allowed to try it his way first before Xi ultimately intervened and forced him to bow to the zero-Covid maxim. Politically, the tough lockdown apparently did Li no harm.

It is obvious that the Chinese economy needs somebody right now who will boldly and resolutely push ahead with reforms and also dare to do something new. Li Qiang could actually be the right man for the job. But it is uncertain how much leeway Xi will grant him. Joern Petring

Netherlands join chip sanctions

Parts of a modern lithography machine being loaded into a cargo 747.

By

Finn Mayer-Kuckuk

Rumors have been circulating since January, and on Wednesday evening, Dutch Minister for Trade Liesje Schreinemacher made it official: The Hague plans to restrict exports of semiconductor technology to certain trading partners in the interest of national security.

This means the Netherlands meets America’s wish to participate in its semiconductor sanctions against China. However, the Dutch government did not take the decision lightly: There were months of talks between Washington, The Hague and Tokyo until the details were settled. The EU was not involved and had to watch as an important member country signed a special agreement with the USA on an important trade issue.

Netherlands owns key technology

Meanwhile, the participation of the Netherlands was particularly important to the US government. The company ASML is based in Veldhoven. It manufactures equipment that uses light to write the conductor paths of chips on silicon plates, so-called lithography machines. ASML has developed a process that can produce particularly fine conductor paths. All modern high-performance chips are based on this. This makes all major semiconductor manufacturers customers of ASML. The big competitors on the global market are the Japanese companies Canon and Nikon.

The US sanctions have the unspoken goal of curbing China’s technological rise. They, therefore, affect not only finished products from American suppliers. They also affect the export of equipment needed to manufacture these chips. Also affected are machines and parts that can be used to build the necessary machinery. “Otherwise, the Chinese strategy could have been to circumvent the sanctions by purchasing these machines,” said economics professor Doris Fischer in an interview with Table.Media.

Export restrictions to take effect ‘before summer’

In a letter to the Dutch parliament, Trade Minister Schreinemacher announced that the export controls would be introduced “before summer”. The letter does not explicitly name China or ASML, but it is clear to all involved who the measures are aimed at.

The company ASML itself announced that it will have to apply for licenses for the export of the most modern machines. The supplier expects good business in China this year. It wants to generate 2.2 billion euros in sales there – but only with technology of the previous generation, not with the new equipment for particularly small chip structures. ASML has not yet delivered these to China.

Mirrors instead of lenses

The Netherlands’ restrictions mainly concern two technologies:

DUV lithography. These are the previous generation of devices using a laser with a particularly small wavelength as the light source. They are suitable for chips with small process sizes – albeit not the smallest. DUV still uses conventional lenses to focus the light beams.
EUV lithography. The successor to DUV. It is ASML’s big technical breakthrough in the manufacturing of today’s most advanced chips, such as those used in AI systems, the fastest processors and powerful graphics cards. The light has an even smaller wavelength. It can no longer be focused with lenses but is focused with ultra-thin coated mirrors. A EUV system costs a good 120 million euros.

In fact, German companies also play a role as suppliers in EUV lithography. Among other things, they build lasers and mirrors. Apparently, however, they were not important enough to bring Germany into the sanctions alliance as well, Fischer suspects.

Deal with SMIC startles Washington

The USA was shocked when it learned of ASML’s plans to sell a EUV system to the Chinese state chip manufacturer SMIC in 2021. This would have immediately catapulted SMIC into the top league of chip manufacturers. While US supplier Intel failed to produce processors with the smallest process size at the time, a Chinese state-owned company would have been on par with Taiwanese market leader TSMC.

The US responded by including non-US chip equipment suppliers like ASML in its sanctions. The rule was that if the Dutch supplied China, they could no longer do business in the US. ASML decided to side with the Americans. Now its home country is an official part of the US alliance to suppress China’s technical capabilities.

Tsai presumed to meet with McCarthy in the US

Taiwan’s President Tsai Ing-wen will make stops in Los Angeles and New York on her way to a state visit to Central America. Reuters learned this from a government official. The trip will happen next month, according to sources. Tsai’s office, however, has not yet confirmed the report. China’s foreign ministry reacted harshly to the travel plans. It demanded an explanation from Washington.

However, such stopovers are not unusual; Taiwan’s presidents and Tsai herself have often visited the US on their way to South America in the past. The American government usually avoids receiving Taiwanese officials in Washington.

According to sources in the USA, Tsai is now planning to meet with the Speaker of the US House of Representatives, Kevin McCarthy. McCarthy has confirmed that the two will meet, but has not named an exact date. At the same time, McCarthy shelved plans for a trip to Taipei for the time being. Tsai also plans to hold talks with Taiwanese expatriates in New York. Such meetings with overseas Taiwanese are also planned for later in the trip to Central America. jul

Financial watchdogs face pay cut

The planned reorganization of China’s financial regulators could lead to drastic salary cuts for some officials. As the business magazine Caixin reported on Thursday, citing anonymous sources, the salaries of financial supervisors are to be brought into line with those of other civil servants. According to Caixin, the average salary level of some financial supervisors has so far been deliberately higher than that of other ministries and government agencies in an effort to reduce the susceptibility to bribery. The fact that salaries are now being adjusted is an indication that the CP apparently feels confident that it can also prevent corruption through deterrence.

“Salaries of staff at the China Securities Regulatory Commission (CSRC) could drop by 60 percent, while those at the China Banking and Insurance Regulatory Commission (CBIRC) could be cut by about half,” a source told Caixin. A draft on restructuring government bodies and ministries has been submitted to the currently convening National People’s Congress. This also includes the pooling of financial supervision under one umbrella. Among other things, the banking, stock exchange and insurance regulators are to be merged into one. ck

Sanctioned tech CEOs as delegates

Around 100 representatives of companies blacklisted in the US are serving as delegates to the National People’s Congress and the Political Consultative Conference this year. As the Japanese newspaper Nikkei reported on Thursday, China’s parliament includes representatives of state-owned companies in the arms and aerospace industry, such as China Aerospace Science and Technology.

They are joined by representatives from the chip industry, such as Cambricon Technologies, and the largest semiconductor manufacturer, SMIC. Artificial intelligence tech companies also provide delegates, including SenseTime, a well-known maker of facial recognition software. SenseTime has come under criticism in the US for its business in Xinjiang, where its products are believed to be used for the surveillance of Uyghurs. iFlytek, which develops voice recognition software, is also represented at the “Two Sessions”.

The choice of delegates highlights Beijing’s focus on becoming the global leader in technology – with the help of these companies. The development goals set out in the Made in China 2025 strategy are considerably complicated by the recent sanctions imposed by the US, especially in the chip sector. Companies from the raw materials and rare earths sector also appoint delegates – another important development sector for Beijing, which aims to make its supply chains more resilient to sanctions.

The absence of former tech leaders such as Tencent founder Pony Ma, Baidu CEO Robin Li, and Lenovo CEO Yang Yuanqing is striking, even though the industry is an important factor in China’s economic growth. Many of them used to be part of the People’s Congress. Their exclusion is a sign that Beijing – which has repeatedly cracked down on internet giants since 2020 – no longer wants their political influence. jul

Brand calls for ‘outcry of the civilized world’

The Tibet group in the German Bundestag calls on the German government to advocate for the end of forced boarding schools in Tibet. “Berlin must call on Beijing to stop forced boarding schools for Tibetan children and launch a global initiative with value partners to protect these children,” said conservative Member of Parliament Michael Brand (CDU) in a statement.

Brand calls for an outcry from the civilized world. “This enormous crime against one million Tibetan children and their families needs a global response, a global initiative to protect these children – and it needs to happen now.” He added that the German government should not resort to its future China strategy, especially as it is currently completely up in the air due to disputes between the Chancellery and the Foreign Ministry.

Earlier in the week, the United Nations Social Committee (CESCR) urged China to immediately abolish the boarding school system. The UN body followed up on accusations that the systematic closure of local schools was forcing Tibetan children to attend distant boarding schools. There, they are only allowed to speak Mandarin. The UN Social Committee fears a cultural assimilation of Tibetans. grz

Record heat in March

Parts of northern China are currently experiencing record temperatures. In the province of Hebei, the thermometer climbed to over 30 degrees Celsius in several cities. Temperatures above 30 degrees have never been recorded in the region in the first half of March. The city of Shahe reached the highest value of 31.8 degrees Celsius. Other Chinese cities also recorded record heat: In Wuhan and Zhengzhou in central China, it was 10 degrees warmer than usual for early March.

China’s Meteorological Administration reports that spring has arrived about 20 days earlier than usual. Zhang Xingying, an expert at the agency, told media that average temperatures in China would rise much faster compared to the rest of the world. According to a recent study by climate risk analyst XDI, 16 of the 20 regions most at risk from climate change are located in China. jul/rtr

Runology – the science of running away

In the middle of 1949, the Communists were about to take the whole of China; Chiang Kai-shek and his Republic of China government fled to Taiwan; and privileged Chinese with money and high social status faced a choice: to go or to stay. The choice to be made by some would turn out to be fatal. The People’s Republic of China started to impose very strict control on Chinese citizens’ exit from the country in the middle 1950s.

Those who left before that were mostly safe and moved on in life. Those who stayed, also including overseas Chinese who returned around the time with the aspiration of building the new China, would suffer endless miseries in the next decades – the dispossession of assets, political purging, famine and the Chinese version of Gulag. Many died of unjustified execution, physical torture or by their own hands.

Escape while the gates are still open

This episode of history has in recent years often been mentioned on Chinese social media. The moral is that one must have a clear head and be decisive when it’s time to go. Since last year, however, discussion about it is less heard. It seemed a consensus was already reached: Run quick! The day might come when the country shuts its gates completely or other countries close theirs to the Chinese.

The term Runology (润学) was coined, which is about where to run to, how to get a residence permit or a passport from another country, and practicalities such as how to circumvent China’s financial control to move assets overseas and how to find good schools for children.

What is discussed here in this article are not the students who go to western countries independently to attend college or graduate school. Part of these students definitely intends to use education as a means also for the Run. There are also running low-income earners who would first land in Central America, and then risk their lives to trudge all the way to the US as illegal immigrants.

Our focus here is more relatively wealthy people who already have established careers and their own families in China, aging mid-thirties and above.

Emigration: Corrupt officials were only the vanguard

Emigration caused by mistrust of the Communist Party’s regime started in the early 2000s when the booming Chinese economy started to generate billionaires – mainly business people, corrupt officials and superstars. Popular destinations for them, and their spouses and children, were Canada, the United States and Australia.

But not many of them would settle down in these companies. They obtained residence permits or citizenships more to safeguard their assets against a capricious regime and to have a safe haven for the still-unlikely event of a dangerous political environment in China.

The children of these people would go to school or university there, sometimes accompanied by their mothers. The other adults would return to China after their legal status in the hosting country was secured. Some would travel back and forth. Back then, China was still the place to make easy money. (The corrupt officials wouldn’t because they are on the run.)

While the number of rich Chinese increased in the following years, more emigration opportunities also emerged, especially in Europe. In the wake of the financial crisis in 2008, Spain, Portugal, Greece and Malta all launched “investment for passport” programs. Benefitting from these schemes are not only “the super-rich”, but also “the quite-rich”.

One of the favorite perks of these countries is the high-quality, low-cost education for children. Indeed, education has become a main theme for emigration since 2013, when the Chinese government has been tightening the reins on ideological contents at all levels of education. The concern for a brainwashed next generation became the top reason for the Run of many middle-class people.

The actual exodus was triggered by the lockdown

Then came Covid, which triggered draconian measures strengthening surveillance of people’s activities while limiting their freedom to travel, both in and out of the country. Anxieties and frustration went through the ceiling.

But Runology was born and became a hot word only after Shanghai, the most sophisticated, cosmopolitan city, was put under strict lockdown for three months. Reports that many people in this prosperous city didn’t have enough food for weeks and were blocked from necessary medical services spooked everybody in the country who still has some ability to think independently.

The disaster in Shanghai was a moment of truth. Many realized that under an insane leader and a party unable to correct itself, man-made catastrophes like the great famine between 1959-1961 are not impossible.

What is at stake now is not only assets and children’s education and future, but also the survival of everybody in the family.

The Shanghai lockdown was lifted in June. Two months later, threats came from another front: Taiwan. After US House Speaker Nancy Pelosi’s visit to the island, a series of moves by China and counter-moves by the US and its allies all pointed to a serious escalation of the probability of military conflicts.

There is no indication whatsoever that Xi Jinping would back away from his determination for a more totalitarian regime and from his ambition to “reunite Taiwan with the motherland”. A feeling of suspense is in the air in anticipation of the next piece of bad news. In an atmosphere like this, Runology will continue to be knowledge to be pursued in China.

A moving splash of color against the overwhelming gray: In Wuhan, Hubei, cherry blossoms adorn a train on metro line 1. It will run in this design until April. After that, spring will have to step in and beautify the concrete canyons with actual flowering trees.

CHINA.TABLE EDITORIAL OFFICE

Amelie
Richter

Marcel
Grzanna

Fabian
Peltsch

Julia
Fiedler

Angela
Köckritz

Jörn
Petring

Dear reader,

The National People’s Congress is drawing to a close – and with it the important appointments for the new government. State and party leader Xi Jinping will get his much-coveted third term as president. It is almost as certain that Li Qiang, who previously headed the CP in Shanghai, will become the new premier on Saturday. Unlike his departing predecessor Li Keqiang, the younger Li is a trusted associate of President Xi Jinping.

But Li is not only the functionary who was responsible for last spring’s harsh lockdown in Shanghai. Nor is he considered a mere yes-man: Li Qiang has repeatedly proven himself to be an efficient, pro-business doer over the course of his career, as Joern Petring analyzes. Now Xi only has to give him the necessary leeway. His predecessor Li Keqiang did not have it.

The US influence on the way China’s tech industry is treated also played a crucial role in a decision by the government in The Hague. The Netherlands places machines for the production of state-of-the-art microchips under export restrictions. Together with Japan, they are thus cutting off the Chinese semiconductor industry from technology that can be used to manufacture the most powerful processors.

Another slap in China’s face – and confirmation to all those there who believe in a US conspiracy against China’s rise. From the American point of view, however, the step was only logical, analyzes Finn Mayer-Kuckuk.

Your
Christiane Kühl

Li Qiang: A premier Xi trusts in

Saturday will be the day: The National People’s Congress in Beijing will elect China’s new premier. And in all likelihood, his name will be Li Qiang. What he and the incumbent Li Keqiang have in common is that they are considered to be business-oriented. Just as Li Keqiang made efforts to open up the country and introduce reforms during his ten years in office, Li Qiang has done a lot to support the private sector, most recently as party leader in Shanghai and in previous positions.

The fact that the departing Premier has a Ph.D. in economics and that the new Li once studied agricultural mechanization does not matter much. Both have gained the necessary experience for the job over their long political careers. Career changers do not become premier in China.

And yet the new Li and the old Li (the similarity of their names is pure coincidence) tick very differently in one crucial respect, which could also have implications for China’s future economic policy: They belong to different political movements. Li Keqiang is a protégé of Hu Jintao, whose base of power is the Communist Party’s Youth League. Li Qiang, on the other hand, firmly belongs to President Xi Jinping’s faction. He served as Xi’s chief of staff while Xi was still in charge of the province of Zhejiang. Both know each other well. Li Qiang has been a loyal follower of Xi for years. And what is probably even more important: Xi trusts him.

The office has lost massive importance

The possible scenarios are thus obvious: Li could become Xi’s enforcer. But he could also quietly try and influence him. It is obvious that Xi has massively devalued the office of premier under Li Keqiang. The head of state wanted to hold the reins himself in every respect. This also applies to economic policy, which has traditionally been the premier’s responsibility.

In the beginning, things looked different: As soon as he took office, Li Keqiang confidently announced that the reforms would hurt “like a cut in the wrist”. Hopingly, the international media coined the term “Likonomics”, which, however, soon disappeared again. Soon China’s state media almost exclusively portrayed Xi as the driving force behind economic policy.

According to a Bloomberg analysis, the President’s name has been mentioned in the People’s Daily more than six times as often as Li Keqiang’s in the ten years Xi has been in power. In the decade before that, when President Hu Jintao and Premier Wen Jiabao were in power, the ratio was 2:1.

The new premier is no ‘yes man’

Will Li Qiang now gain some more power again? At any rate, observers see in him more than just a “yes man”. “He doesn’t talk so much about ideology, but a bit more about how to do things,” says Nis Gruenberg of the China Institute Merics in Berlin. Li Qiang would thus fit the office of premier quite well.

During the Covid pandemic, he initially imposed a less restrictive approach to dealing with the virus in Shanghai – in contrast to many other regions in China. However, as the metropolis was unable to control an outbreak in the spring of 2022, Shanghai was eventually placed under a strict lockdown for two months. It seemed as if he was allowed to try it his way first before Xi ultimately intervened and forced him to bow to the zero-Covid maxim. Politically, the tough lockdown apparently did Li no harm.

It is obvious that the Chinese economy needs somebody right now who will boldly and resolutely push ahead with reforms and also dare to do something new. Li Qiang could actually be the right man for the job. But it is uncertain how much leeway Xi will grant him. Joern Petring

Netherlands join chip sanctions

By

Finn Mayer-Kuckuk

Rumors have been circulating since January, and on Wednesday evening, Dutch Minister for Trade Liesje Schreinemacher made it official: The Hague plans to restrict exports of semiconductor technology to certain trading partners in the interest of national security.

This means the Netherlands meets America’s wish to participate in its semiconductor sanctions against China. However, the Dutch government did not take the decision lightly: There were months of talks between Washington, The Hague and Tokyo until the details were settled. The EU was not involved and had to watch as an important member country signed a special agreement with the USA on an important trade issue.

Netherlands owns key technology

Meanwhile, the participation of the Netherlands was particularly important to the US government. The company ASML is based in Veldhoven. It manufactures equipment that uses light to write the conductor paths of chips on silicon plates, so-called lithography machines. ASML has developed a process that can produce particularly fine conductor paths. All modern high-performance chips are based on this. This makes all major semiconductor manufacturers customers of ASML. The big competitors on the global market are the Japanese companies Canon and Nikon.

The US sanctions have the unspoken goal of curbing China’s technological rise. They, therefore, affect not only finished products from American suppliers. They also affect the export of equipment needed to manufacture these chips. Also affected are machines and parts that can be used to build the necessary machinery. “Otherwise, the Chinese strategy could have been to circumvent the sanctions by purchasing these machines,” said economics professor Doris Fischer in an interview with Table.Media.

Export restrictions to take effect ‘before summer’

In a letter to the Dutch parliament, Trade Minister Schreinemacher announced that the export controls would be introduced “before summer”. The letter does not explicitly name China or ASML, but it is clear to all involved who the measures are aimed at.

The company ASML itself announced that it will have to apply for licenses for the export of the most modern machines. The supplier expects good business in China this year. It wants to generate 2.2 billion euros in sales there – but only with technology of the previous generation, not with the new equipment for particularly small chip structures. ASML has not yet delivered these to China.

Mirrors instead of lenses

The Netherlands’ restrictions mainly concern two technologies:

DUV lithography. These are the previous generation of devices using a laser with a particularly small wavelength as the light source. They are suitable for chips with small process sizes – albeit not the smallest. DUV still uses conventional lenses to focus the light beams.
EUV lithography. The successor to DUV. It is ASML’s big technical breakthrough in the manufacturing of today’s most advanced chips, such as those used in AI systems, the fastest processors and powerful graphics cards. The light has an even smaller wavelength. It can no longer be focused with lenses but is focused with ultra-thin coated mirrors. A EUV system costs a good 120 million euros.

In fact, German companies also play a role as suppliers in EUV lithography. Among other things, they build lasers and mirrors. Apparently, however, they were not important enough to bring Germany into the sanctions alliance as well, Fischer suspects.

Deal with SMIC startles Washington

The USA was shocked when it learned of ASML’s plans to sell a EUV system to the Chinese state chip manufacturer SMIC in 2021. This would have immediately catapulted SMIC into the top league of chip manufacturers. While US supplier Intel failed to produce processors with the smallest process size at the time, a Chinese state-owned company would have been on par with Taiwanese market leader TSMC.

The US responded by including non-US chip equipment suppliers like ASML in its sanctions. The rule was that if the Dutch supplied China, they could no longer do business in the US. ASML decided to side with the Americans. Now its home country is an official part of the US alliance to suppress China’s technical capabilities.

Tsai presumed to meet with McCarthy in the US

Taiwan’s President Tsai Ing-wen will make stops in Los Angeles and New York on her way to a state visit to Central America. Reuters learned this from a government official. The trip will happen next month, according to sources. Tsai’s office, however, has not yet confirmed the report. China’s foreign ministry reacted harshly to the travel plans. It demanded an explanation from Washington.

However, such stopovers are not unusual; Taiwan’s presidents and Tsai herself have often visited the US on their way to South America in the past. The American government usually avoids receiving Taiwanese officials in Washington.

According to sources in the USA, Tsai is now planning to meet with the Speaker of the US House of Representatives, Kevin McCarthy. McCarthy has confirmed that the two will meet, but has not named an exact date. At the same time, McCarthy shelved plans for a trip to Taipei for the time being. Tsai also plans to hold talks with Taiwanese expatriates in New York. Such meetings with overseas Taiwanese are also planned for later in the trip to Central America. jul

Financial watchdogs face pay cut

The planned reorganization of China’s financial regulators could lead to drastic salary cuts for some officials. As the business magazine Caixin reported on Thursday, citing anonymous sources, the salaries of financial supervisors are to be brought into line with those of other civil servants. According to Caixin, the average salary level of some financial supervisors has so far been deliberately higher than that of other ministries and government agencies in an effort to reduce the susceptibility to bribery. The fact that salaries are now being adjusted is an indication that the CP apparently feels confident that it can also prevent corruption through deterrence.

“Salaries of staff at the China Securities Regulatory Commission (CSRC) could drop by 60 percent, while those at the China Banking and Insurance Regulatory Commission (CBIRC) could be cut by about half,” a source told Caixin. A draft on restructuring government bodies and ministries has been submitted to the currently convening National People’s Congress. This also includes the pooling of financial supervision under one umbrella. Among other things, the banking, stock exchange and insurance regulators are to be merged into one. ck

Sanctioned tech CEOs as delegates

Around 100 representatives of companies blacklisted in the US are serving as delegates to the National People’s Congress and the Political Consultative Conference this year. As the Japanese newspaper Nikkei reported on Thursday, China’s parliament includes representatives of state-owned companies in the arms and aerospace industry, such as China Aerospace Science and Technology.

They are joined by representatives from the chip industry, such as Cambricon Technologies, and the largest semiconductor manufacturer, SMIC. Artificial intelligence tech companies also provide delegates, including SenseTime, a well-known maker of facial recognition software. SenseTime has come under criticism in the US for its business in Xinjiang, where its products are believed to be used for the surveillance of Uyghurs. iFlytek, which develops voice recognition software, is also represented at the “Two Sessions”.

The choice of delegates highlights Beijing’s focus on becoming the global leader in technology – with the help of these companies. The development goals set out in the Made in China 2025 strategy are considerably complicated by the recent sanctions imposed by the US, especially in the chip sector. Companies from the raw materials and rare earths sector also appoint delegates – another important development sector for Beijing, which aims to make its supply chains more resilient to sanctions.

The absence of former tech leaders such as Tencent founder Pony Ma, Baidu CEO Robin Li, and Lenovo CEO Yang Yuanqing is striking, even though the industry is an important factor in China’s economic growth. Many of them used to be part of the People’s Congress. Their exclusion is a sign that Beijing – which has repeatedly cracked down on internet giants since 2020 – no longer wants their political influence. jul

Brand calls for ‘outcry of the civilized world’

The Tibet group in the German Bundestag calls on the German government to advocate for the end of forced boarding schools in Tibet. “Berlin must call on Beijing to stop forced boarding schools for Tibetan children and launch a global initiative with value partners to protect these children,” said conservative Member of Parliament Michael Brand (CDU) in a statement.

Brand calls for an outcry from the civilized world. “This enormous crime against one million Tibetan children and their families needs a global response, a global initiative to protect these children – and it needs to happen now.” He added that the German government should not resort to its future China strategy, especially as it is currently completely up in the air due to disputes between the Chancellery and the Foreign Ministry.

Earlier in the week, the United Nations Social Committee (CESCR) urged China to immediately abolish the boarding school system. The UN body followed up on accusations that the systematic closure of local schools was forcing Tibetan children to attend distant boarding schools. There, they are only allowed to speak Mandarin. The UN Social Committee fears a cultural assimilation of Tibetans. grz

Record heat in March

Parts of northern China are currently experiencing record temperatures. In the province of Hebei, the thermometer climbed to over 30 degrees Celsius in several cities. Temperatures above 30 degrees have never been recorded in the region in the first half of March. The city of Shahe reached the highest value of 31.8 degrees Celsius. Other Chinese cities also recorded record heat: In Wuhan and Zhengzhou in central China, it was 10 degrees warmer than usual for early March.

China’s Meteorological Administration reports that spring has arrived about 20 days earlier than usual. Zhang Xingying, an expert at the agency, told media that average temperatures in China would rise much faster compared to the rest of the world. According to a recent study by climate risk analyst XDI, 16 of the 20 regions most at risk from climate change are located in China. jul/rtr

Runology – the science of running away

In the middle of 1949, the Communists were about to take the whole of China; Chiang Kai-shek and his Republic of China government fled to Taiwan; and privileged Chinese with money and high social status faced a choice: to go or to stay. The choice to be made by some would turn out to be fatal. The People’s Republic of China started to impose very strict control on Chinese citizens’ exit from the country in the middle 1950s.

Those who left before that were mostly safe and moved on in life. Those who stayed, also including overseas Chinese who returned around the time with the aspiration of building the new China, would suffer endless miseries in the next decades – the dispossession of assets, political purging, famine and the Chinese version of Gulag. Many died of unjustified execution, physical torture or by their own hands.

Escape while the gates are still open

This episode of history has in recent years often been mentioned on Chinese social media. The moral is that one must have a clear head and be decisive when it’s time to go. Since last year, however, discussion about it is less heard. It seemed a consensus was already reached: Run quick! The day might come when the country shuts its gates completely or other countries close theirs to the Chinese.

The term Runology (润学) was coined, which is about where to run to, how to get a residence permit or a passport from another country, and practicalities such as how to circumvent China’s financial control to move assets overseas and how to find good schools for children.

What is discussed here in this article are not the students who go to western countries independently to attend college or graduate school. Part of these students definitely intends to use education as a means also for the Run. There are also running low-income earners who would first land in Central America, and then risk their lives to trudge all the way to the US as illegal immigrants.

Our focus here is more relatively wealthy people who already have established careers and their own families in China, aging mid-thirties and above.

Emigration: Corrupt officials were only the vanguard

Emigration caused by mistrust of the Communist Party’s regime started in the early 2000s when the booming Chinese economy started to generate billionaires – mainly business people, corrupt officials and superstars. Popular destinations for them, and their spouses and children, were Canada, the United States and Australia.

But not many of them would settle down in these companies. They obtained residence permits or citizenships more to safeguard their assets against a capricious regime and to have a safe haven for the still-unlikely event of a dangerous political environment in China.

The children of these people would go to school or university there, sometimes accompanied by their mothers. The other adults would return to China after their legal status in the hosting country was secured. Some would travel back and forth. Back then, China was still the place to make easy money. (The corrupt officials wouldn’t because they are on the run.)

While the number of rich Chinese increased in the following years, more emigration opportunities also emerged, especially in Europe. In the wake of the financial crisis in 2008, Spain, Portugal, Greece and Malta all launched “investment for passport” programs. Benefitting from these schemes are not only “the super-rich”, but also “the quite-rich”.

One of the favorite perks of these countries is the high-quality, low-cost education for children. Indeed, education has become a main theme for emigration since 2013, when the Chinese government has been tightening the reins on ideological contents at all levels of education. The concern for a brainwashed next generation became the top reason for the Run of many middle-class people.

The actual exodus was triggered by the lockdown

Then came Covid, which triggered draconian measures strengthening surveillance of people’s activities while limiting their freedom to travel, both in and out of the country. Anxieties and frustration went through the ceiling.

But Runology was born and became a hot word only after Shanghai, the most sophisticated, cosmopolitan city, was put under strict lockdown for three months. Reports that many people in this prosperous city didn’t have enough food for weeks and were blocked from necessary medical services spooked everybody in the country who still has some ability to think independently.

The disaster in Shanghai was a moment of truth. Many realized that under an insane leader and a party unable to correct itself, man-made catastrophes like the great famine between 1959-1961 are not impossible.

What is at stake now is not only assets and children’s education and future, but also the survival of everybody in the family.

The Shanghai lockdown was lifted in June. Two months later, threats came from another front: Taiwan. After US House Speaker Nancy Pelosi’s visit to the island, a series of moves by China and counter-moves by the US and its allies all pointed to a serious escalation of the probability of military conflicts.

There is no indication whatsoever that Xi Jinping would back away from his determination for a more totalitarian regime and from his ambition to “reunite Taiwan with the motherland”. A feeling of suspense is in the air in anticipation of the next piece of bad news. In an atmosphere like this, Runology will continue to be knowledge to be pursued in China.

A moving splash of color against the overwhelming gray: In Wuhan, Hubei, cherry blossoms adorn a train on metro line 1. It will run in this design until April. After that, spring will have to step in and beautify the concrete canyons with actual flowering trees.

CHINA.TABLE EDITORIAL OFFICE

Amelie
Richter

Marcel
Grzanna

Fabian
Peltsch

Julia
Fiedler

Angela
Köckritz

Jörn
Petring

Feature

Li Qiang: A premier Xi trusts in

The office has lost massive importance

The new premier is no ‘yes man’

Netherlands join chip sanctions

Netherlands owns key technology

Export restrictions to take effect ‘before summer’

Mirrors instead of lenses

Deal with SMIC startles Washington

Events

News

Tsai presumed to meet with McCarthy in the US

Financial watchdogs face pay cut

Sanctioned tech CEOs as delegates

Brand calls for ‘outcry of the civilized world’

Record heat in March

Opinion

Runology – the science of running away

Escape while the gates are still open

Emigration: Corrupt officials were only the vanguard

The actual exodus was triggered by the lockdown

Executive Moves

Dessert

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Feature

Li Qiang: A premier Xi trusts in

The office has lost massive importance

The new premier is no ‘yes man’

Netherlands join chip sanctions

Netherlands owns key technology

Export restrictions to take effect ‘before summer’

Mirrors instead of lenses

Deal with SMIC startles Washington

Events

News

Tsai presumed to meet with McCarthy in the US

Financial watchdogs face pay cut

Sanctioned tech CEOs as delegates

Brand calls for ‘outcry of the civilized world’

Record heat in March

Opinion

Runology – the science of running away

Escape while the gates are still open

Emigration: Corrupt officials were only the vanguard

The actual exodus was triggered by the lockdown

Executive Moves

Dessert

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

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