Table.Briefing: China

Nio and Lynk in Europe + Conflict with Australia

  • Carmakers testing waters in EU market
  • Conflict with Australia comes to a head
  • China third largest investor in Germany
  • Strong start to the year for Volkswagen
  • Foxconn and Yageo launch joint venture for semiconductors
  • Beijing considers rocket debris ‘harmless’
  • Johnny Erling: reaching for the stars – with the magic of ancient myths
Dear reader,

What has long been expected could become a reality: Chinese vehicle brands on German roads. Geely CEO Li Shufu’s international ambitions are well-known in the automotive industry. According to his ideas, Geely should become “much more” than VW, Hakan Samuelsson stated last year. He runs Volvo, a brand in Li Shufu’s empire. Now, another Geely Group brand, Lynk & Co, is entering the European market. Among other things, it relies on Volvo’s service network – such advantages were unavailable to earlier market challengers from China. At the same time, Tesla competitor Nio is testing waters in the EU via the Norwegian market.

Michael Radunski deduces from China’s current relationship with Australia what may yet befall an increasingly critical EU in its dealings with Beijing. For years, both countries lived in an economic symbiosis. The southern continent supplied raw materials, while China opened its market to Australian goods and services. But the harmony is gone. The government in Canberra is trying to disentangle the economies again. In response, China has ceased all dialogue.

Space debris is a surprisingly emotionally charged subject. Now that humanity has polluted the surface of the Earth, it proceeds to litter even the once clear expanses of space. In the coming days, debris from a Chinese rocket is crashing on Earth, sparking new discussions about the question: Who owns the sky?

Our columnist Johnny Erling already has an answer. Through clever naming, the People’s Republic claims the celestial sphere for itself – with the magic of its ancient myths. The Chinese Mars rover is now named after a fire god “with the body of a beast, red beard and red clothes. One of his three eyes sits on his forehead”. It is questionable if this inspires the rest of the world to be confident about the harmlessness of the Chinese goals regarding space.

Your
Finn Mayer-Kuckuk
Image of Finn  Mayer-Kuckuk

Feature

Nio and Lynk push into European market

Chinese carmakers are making a new attempt at the European market. But unlike in previous years, new young brands with innovative concepts venture into the EU market. On Thursday, the electric start-up Nio announced its entry into Norway – the first market outside China. Norway is the most open to EVs, Nio founder William Li justified this choice. Li states that Norway’s Norges Bank backed Nio’s IPO in 2018 and, according to financial portal Fintel, recently bought a larger block of shares in the start-up – worth just over $666 million today.

Starting in August, the first models of the ES8 large electric SUV will arrive in Norway for test drives, Marius Hayler, CEO of Nio Norway, announced at a press conference on Thursday. The first cars of the electric seven-seater are to be delivered to customers in September. Hayler did not initially name a sales price. The first Nio House, as the brand’s large showrooms are called, is scheduled to open in Oslo in September.

Nio also plans to set up four battery swap stations in Oslo and the surrounding area, which allows Nio drivers to travel comfortably to their log cabin in the countryside and back to the city, Kayler said – an essential aspect of the Norwegian lifestyle. He states that the European version of the system is currently in development. Nio plans to bring its entire battery charging portfolio to Norway, including smaller charging points and home charging technology. The new ES8 is expected to have a range of around 500 kilometers. After Oslo, Nio plans to be present in four other cities. The market entry in Germany could take place as early as next year.

Geely subsidiary Lynk & Co wants to open up all of Europe

The young brand Lynk & Co of the largest private carmaker Geely is already drawn to several European countries. Geely holds a good ten percent stake in Daimler. In Germany, Sweden, France, Spain, the Netherlands and Belgium, interested customers can already put their names on a waiting list for a Lynk & Co car. The first examples of the compact SUV 01 have been delivered since March.

So far, the 01 is the only model Lynk & Co offers in Europe. It has been developed on a shared platform with the XC40 from the sister brand Volvo, which also belongs to Geely. At 4.54 meters, however, the 01 is slightly longer than the XC40 and thus offers more legroom in the back seats – a typical feature of Chinese cars. Configuration options are modest. However, it is the manufacturer’s hope, that this cost-saving simplicity will appeal to young buyers: blue or black. Hybrid or plug-in technology. Period.

Subscription model to appeal to new groups of buyers

In Europe, Lynk & Co is offering a subscription model as an innovative concept: The company plans a “streaming service for mobility” with a monthly membership. The 01 will cost exactly €500 per month – including tax, insurance, maintenance, and tire changes. If the car needs to go to the workshop, someone will pick it up and bring it back afterward. Volvo specialists will do the repairs. Instead of a subscription, the 01 can also be purchased for €35,000.

In its home market in China, Lynk & Co already offers six different models of the brand. There, however, the cars are sold traditionally – without a subscription option. Observers justify this step with the varied buying behavior of customers: Since cars are even more a status symbol among young Chinese than in Europe, they prefer ownership. Therefore, Europe will get a more innovative sales model than the home market.

Nio in Europe with the same concept as at home

Nio, in turn, is following more or less the same concept in Norway as in China: There will be an app, service stations, and a Nio community. The second model to be sold in Norway from 2022 will be the ET7 – the latest model from the Tesla competitor, a kind of e-coupe with autonomous sub-functions. To celebrate its market launch, the company has developed a Norwegian color: arctic green. According to William Li, the muted dark green tone was inspired by the Northern Lights over Tromsø. It will be available for Nio models in both Norway and China. Christiane Kuehl/Joern Petring

  • Car Industry
  • Geely
  • Lynk & Co
  • Nio
  • Volvo

Conflict with Australia: foretaste for EU

China’s conflict with Australia is slowly coming to a head, as China’s National Development and Reform Commission (NDRC) indefinitely suspended the strategic economic talk with Canberra on Thursday. The reason: Australia’s government officials had recently taken several steps out of ideological discrimination that disrupted cooperation. The government in Canberra was thus demonstrating a “Cold War mindset”.

The strategic economic talk is part of the bilateral talks between Australia and China. It was established in 2014 to deepen economic cooperation between the two countries. However, the last economic talk took place almost four years ago. Nevertheless, both sides describe the conversation as “an important mechanism” in bilateral relations. But these are in bad condition. The two countries are in an exchange on many levels.

China’s Foreign Ministry Spokesman Wang Wenbin said Australia was abusing the concept of national security to put pressure on China. “Australia must bear full responsibility.” Wang echoed words used by the Australian government, which recently justified its actions against China by citing “national security interests”.

Geostrategic interests in Darwin

Since the beginning of the week, Canberra has been officially examining whether it could withdraw the operation of the strategically important port of Darwin from the Shandong Landbridge Group. In 2015, it signed a leasing contract with the Chinese state-owned company for the port in northern Australia. The port was in ruins. Because of this, it was willingly accepted that the company owned by Chinese billionaire Ye Cheng was prepared to pay the equivalent of €325 million for the operation. But since then, there has been growing concern. The port is strategically located, serving as a gateway to Asian markets and a potential hub for commodity and agricultural exports. For Australia’s Prime Minister Scott Morrison, Darwin is now a danger to national security.

This could be primarily due to Australia’s most important partner: the US. Washington has its own military base in Darwin. The stationing of the US Navy was part of the Asia strategy of then-President Barack Obama. The US wanted another base with direct access to the important shipping lanes in the Pacific, in addition to the Pacific base at Guam and Okinawa in Japan.

Xi’s prestige project also affected

Last month, the Australian government canceled an agreement between China and the Australian state of Victoria. The agreement would have made the region part of the “New Silk Road,” the prestige project of China’s President Xi Jinping. Foreign Minister Marise Payne said at the time that the agreements were incompatible with Australia’s foreign policy. She also warned that Beijing was trying to buy influence in Australia. Australian Finance Minister Josh Frydenberg also blocked several planned acquisitions by Chinese investors. As a result, investments fell by 61 percent last year to the equivalent of €643 million.

A basis for these steps is a change in the laws for foreign investors. Since then, Canberra owns the right to veto security-relevant infrastructure projects. This also allows for the review of contracts that have already been signed – including the imposition of new conditions or even the cancellation of a contract.

Peter Jennings of the Australian Strategic Policy Institute (ASPI) believes the Australian government’s behavior is justified. “The economic relationship Australia once welcomed with China is being used by Beijing as an instrument of coercion and punishment.” Whether in the South China Sea, with Taiwan, on India’s border, and in its dealings with Australia – Beijing’s true goal is becoming increasingly transparent, he said. Namely to disrupt the international order and gradually replace it with its own authoritarian control.

The former harmonious relationship is no more

It’s a dramatic turn in bilateral relations that for years seemed almost symbiotic. Because Australia has what ambitious China desperately needs for its economy: important raw materials like coal and iron ore. And China’s upper class also loves the proximity to Australia and the wonderful properties in beautiful (and above all clean) nature, as well as top universities where more and more young Chinese are studying.

China, for its part, is Australia’s most important sales market – and conveniently right on its doorstep. Since the conclusion of a free trade agreement at the end of 2015, Australia’s exports to China have almost doubled to $150 billion per year (around €93 billion). China also ranks first in terms of imports.

However, the former harmonious relationship is no more: Canberra excluded the Chinese telecommunications company Huawei from the expansion of the national 5G network. In the conflict over the South China Sea, they opposed Beijing’s extensive territorial claims, and in the Covid pandemic, they recently called for an independent investigation into the origin of the virus.

China, for its part, imposed punitive tariffs and import boycotts – on everything from wine, grain, lobster, and meat, the tourism and university sectors to coal. Even verbally, things got increasingly rough. Hu Xijin, Editor-in-Chief of the state-run Global Times newspaper, wrote, for example, that Australia was “like chewing gum stuck on the sole of China’s shoes”, which had to be scraped off with a stone.

Australia still has a trump card

Only one sector has remained largely untouched so far: the iron ore trade. Australian mining group Rio Tinto seems to be barely affected by the exchange with China. “We sell more than half of our products to China and we have a good relationship,” Chief Executive Jakob Stausholm said recently. “We are unaffected.”

The reason for this is found quickly: China lacks alternative sources of iron ore, as Australia holds a virtual global monopoly on raw materials. According to Statista data, Canberra covers more than 62 percent of China’s demand. Brazil, the world’s second-largest exporter, has serious supply problems due to the Covid pandemic – but could hardly replace Australia’s reserves anyway. In view of current developments, it seems only a matter of time before Canberra plays this trump card.

Even if Beijing’s latest move is only symbolic, it’s clear that the two countries have long been engaged in an exchange of blows that is far more than a diplomatic crisis. It seems that a resurgent China wants to make an example of Australia. The dispute highlights the importance of recalibrating the relationship with an increasingly internationally agile China. It is a task that Australia is not facing alone. As Prime Minister Scott Morrison warns: “Our current challenge in the Indo-Pacific is a foretaste for many other countries around the world, including Britain and Europe.”

  • Australia
  • Geopolitics
  • Indo-Pacific
  • Iron Ore
  • Mobile communications
  • New Silk Road
  • Raw materials

News

Increasing investments in Germany

For the first time in five years, China is increasing the number of investment projects in Germany and thus ranked third among foreign investors in Germany last year. According to a survey by the federally owned Germany Trade and Invest (GTAI), Chinese companies made a total of 170 greenfield and expansion investments. In 2019, China was still in fourth place with 154 projects. The largest investor in 2020 was the US with 254 investments, followed by Switzerland with 219 investments. The GTAI counted 1,686 settlement projects by foreign investors last year, which was nine percent less than the year before. The GTAI did not provide any information on the countries of origin of the 372 takeovers in which foreign investors acquired more than 50 percent of the shares in German companies. Nor was any information provided on the financial volume of the investments and acquisitions. asi

  • Deutschland
  • Finance
  • Geopolitics
  • GTAI
  • Investments

VW: very good start to the year

Volkswagen achieved one of the best first quarters in its history despite the lack of chips. Wolfsburg-based carmaker’s sales rose to €62.4 billion. Profits rose from half a billion to €3.4 billion. The positive start to the year was mainly due to good business in China. Compared with the same period last year, sales figures rose by 61 percent in the Group’s largest single market.

Volkswagen had to stop production lines several times in recent weeks and announced short-time work due to the shortage of chips. So far, the lack of semiconductors has been well absorbed operationally, according to Arno Antlitz, CFO of the Volkswagen Group. However, he also said, “The undersupply of semiconductors across the industry is expected to have a somewhat more significant impact in the second quarter than it has so far. Nevertheless, we are confident about the business development for the year as a whole.” nib

  • Car Industry
  • Technology

Foxconn and Yageo launch joint venture for semiconductors

Electrical contract manufacturer Foxconn has announced the formation of a semiconductor joint venture with Yageo, another Taiwanese component manufacturer. The focus will be on making small integrated circuits that cost less than two dollars, Foxconn said. The joint venture’s chips will be used in Foxconn products but sold to international customers, too. Furthermore, the two companies plan to jointly invest in product development.

The new company is called XSemi. Foxconn said the small chips account for 90 percent of all semiconductors by volume in an electric car. Foxconn and Yageo are also in negotiations with several global semiconductor companies and will unveil more plans in the near future, a Foxconn statement said. nib

  • Car Industry

Space agency: rocket debris ‘not dangerous’

China expects debris from the recently launched rocket to fall into international waters. That rocket remains fell back to Earth is “common in space travel”, the English-language edition of the state-affiliated Global Times newspaper wrote. Aerospace Knowledge magazine Editor-in-Chief Wang Ya’an told the newspaper that China’s space agencies had carefully considered the possibility of falling debris: in the rocket’s design, choice of the launch site, and trajectory. The newspaper also said, citing various experts, that the rocket stage was built primarily of lightweight material, most of which will simply burn up during re-entry.

The US military is tracking the debris and expects it to crash on Earth around May 8. Western space experts had warned of an “uncontrolled re-entry” of debris from the main rocket stage into the atmosphere this weekend or Monday. They expressed concerns about the design of the Long March 5B rocket. They said the main stage was not steerable and thus could not be maneuvered into a trajectory for the crash specifically. Risks are posed by materials with high melting points such as the engine or tank structures. It could be that these parts do not burn up on re-entry into the atmosphere.

During a flight of an identical rocket in 2020, debris fell on the Ivory Coast and damaged several houses in villages. According to the European Space Agency’s ESA Space Residue Office in Darmstadt, the possible impact area includes any part of the Earth’s surface between 41 degrees north and 41 degrees south latitude, the dpa news agency reported. World cities such as New York, Beijing, and Shanghai lie in this range; in Europe, southern Spain, Italy, and Greece could be affected. Germany, on the other hand, is too far north. It is more likely, however, that the debris will fall over the ocean or uninhabited territory. ck/nib

  • Aerospace
  • Pollution
  • Sustainability

Column

About the magic of names on the way into space

By Johnny Erling
Ein Bild von Johnny Erling

For five weeks until the end of February, China’s space agency (CNSA) let the public vote on a suitable name for its Mars rover. The vehicle is still waiting to be deployed aboard the lander of China’s Tianwen (天问 question the sky) Mars mission and is scheduled to fly to Mars in mid-May.

The rover will be called Zhu Rong, after the ancient Chinese god of fire. In the book “Chinese Religion”, published in Shanghai in 1936, the saint is described as a hybrid being with the body of an animal, a red face, beard and clothes. One of his three eyes sits on his forehead. He rides a dragon. Heaven sent him forth for punitive action. The pillar supporting the universe was destroyed in his epic battle against the god of water. The world plunged with him into the ensuing chaos.

Hong Kong’s South China Morning Post interprets the choice of Zhu Rong as the patron saint of China’s future Mars rover as an allusion to the escalating “tensions” between the People’s Republic and the US that now extend into space. According to Xinhua, CNSA space agency Vice Chief Wu Yuanhua disagreed, saying the two characters in the Fire God’s name pointed to his real nature. “Zhu” stands for “congratulations” and “Rong” for “blending in harmoniously”, he said, adding that this also applies to China’s spaceflight. It pursues the “vision of using space peacefully and building a community for the common future of mankind”.

With its first Mars rover and the launch of its core module ship Tianhe (天和) “Heavenly Harmony”, Beijing has aroused patriotic pride among its people. Tianhe will be the basic building block for China’s first space station, assembled from three modules called Tiangong (Heavenly Palace). It is expected to be ready for occupancy by 2022. After the end of the Russian Mir space station (1986 to March 2001) and the expected 2024 demolition of the International Space Station (ISS), which has been used by 16 nations for two decades, the hour has come for the People’s Republic. It will then be the only nation to maintain an outpost in space. No other project better underscores China’s ambition to become a world and space power than the accelerated expansion of its celestial temple.

Chinese space travel still lags behind

Yet the People’s Republic lags half a century behind the US in terms of technology. Its space station is just big enough to accommodate three space travelers. When Beijing was still in the process of putting its Tianhe core module into space at the end of April, the ISS reported a record occupancy of eleven astronauts working on board at the same time.

While China’s Mars rover must wait for its landing, the new US rover, which has been operating for weeks, sent a mini-helicopter flying over Mars in a technical premier. Five US rovers that the US used to set down on the red planet are still operating there today. Their names, however, are widely unknown: Sojourner, Opportunity, Spirit, Curiosity, and Perseverance. Worldwide interest in NASA was greater when its space missions were baptized with the names of gods from Greek and Roman mythology: Mercury, Apollo, Ares or Artemis.

From the beginning, the Socialist People’s Republic and its Communist Party relied on the magic of its ancient Chinese saints and myths to conquer the heavenly sphere. In the earthy realm, they were long denounced as superstition. Beijing has rehabilitated them all as part of the national culture and a source of patriotism.

In 2003, 18 years ago, China’s taikonaut Yang Liwei circumnavigated the globe for one day in the first manned space mission. His capsule was named “Shenzhou” (Celestial Ship), and from then on Beijing turned to gods, legendary animal beings, and the Confucian Code. The party newspaper Global Times calls it: “China’s romanticism in naming space missions.”

The West’s only focus is on the technological progress of the People’s Republic. It thus misses out on where Chinese soft power really works, in the formation of Chinese space culture. Beijing has thus overstepped its national boundaries, recognizes Ph.D. student Molly Silk, who is researching China’s space policy at the University of Manchester.

For decades, NASA monopolized everything that had to do with space travel. Its name and logo became synonymous with the exploration and marketing of space. China, with its own space culture, is challenging US supremacy and questioning how the world will perceive US space exploration and leadership in the future.

Beijing is staking more than its claim to a share of space development. It wants to set the direction. For the Global Times, the point is clear: “A great country like China is destined to conquer space and the sea. We can’t talk about China’s rise unless the country makes breakthroughs in high-end areas like aerospace.”

  • Aerospace
  • Chinese Communist Party
  • Domestic policy of the CP China
  • Robotics
  • Technology

Executive Moves

Translation missing.

Dessert

This weekend, the traveling wave ends on the first of May. Passengers wait – here at Kunming airport – in massage chairs, which are supposed to make back and neck pain from the strains of traveling simply disappear. For the equivalent of one euro, you can have nine minutes of waiting time “massaged away”. Who wouldn’t want that for the next Zoom or teams conference?

China.Table Editors

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    • Carmakers testing waters in EU market
    • Conflict with Australia comes to a head
    • China third largest investor in Germany
    • Strong start to the year for Volkswagen
    • Foxconn and Yageo launch joint venture for semiconductors
    • Beijing considers rocket debris ‘harmless’
    • Johnny Erling: reaching for the stars – with the magic of ancient myths
    Dear reader,

    What has long been expected could become a reality: Chinese vehicle brands on German roads. Geely CEO Li Shufu’s international ambitions are well-known in the automotive industry. According to his ideas, Geely should become “much more” than VW, Hakan Samuelsson stated last year. He runs Volvo, a brand in Li Shufu’s empire. Now, another Geely Group brand, Lynk & Co, is entering the European market. Among other things, it relies on Volvo’s service network – such advantages were unavailable to earlier market challengers from China. At the same time, Tesla competitor Nio is testing waters in the EU via the Norwegian market.

    Michael Radunski deduces from China’s current relationship with Australia what may yet befall an increasingly critical EU in its dealings with Beijing. For years, both countries lived in an economic symbiosis. The southern continent supplied raw materials, while China opened its market to Australian goods and services. But the harmony is gone. The government in Canberra is trying to disentangle the economies again. In response, China has ceased all dialogue.

    Space debris is a surprisingly emotionally charged subject. Now that humanity has polluted the surface of the Earth, it proceeds to litter even the once clear expanses of space. In the coming days, debris from a Chinese rocket is crashing on Earth, sparking new discussions about the question: Who owns the sky?

    Our columnist Johnny Erling already has an answer. Through clever naming, the People’s Republic claims the celestial sphere for itself – with the magic of its ancient myths. The Chinese Mars rover is now named after a fire god “with the body of a beast, red beard and red clothes. One of his three eyes sits on his forehead”. It is questionable if this inspires the rest of the world to be confident about the harmlessness of the Chinese goals regarding space.

    Your
    Finn Mayer-Kuckuk
    Image of Finn  Mayer-Kuckuk

    Feature

    Nio and Lynk push into European market

    Chinese carmakers are making a new attempt at the European market. But unlike in previous years, new young brands with innovative concepts venture into the EU market. On Thursday, the electric start-up Nio announced its entry into Norway – the first market outside China. Norway is the most open to EVs, Nio founder William Li justified this choice. Li states that Norway’s Norges Bank backed Nio’s IPO in 2018 and, according to financial portal Fintel, recently bought a larger block of shares in the start-up – worth just over $666 million today.

    Starting in August, the first models of the ES8 large electric SUV will arrive in Norway for test drives, Marius Hayler, CEO of Nio Norway, announced at a press conference on Thursday. The first cars of the electric seven-seater are to be delivered to customers in September. Hayler did not initially name a sales price. The first Nio House, as the brand’s large showrooms are called, is scheduled to open in Oslo in September.

    Nio also plans to set up four battery swap stations in Oslo and the surrounding area, which allows Nio drivers to travel comfortably to their log cabin in the countryside and back to the city, Kayler said – an essential aspect of the Norwegian lifestyle. He states that the European version of the system is currently in development. Nio plans to bring its entire battery charging portfolio to Norway, including smaller charging points and home charging technology. The new ES8 is expected to have a range of around 500 kilometers. After Oslo, Nio plans to be present in four other cities. The market entry in Germany could take place as early as next year.

    Geely subsidiary Lynk & Co wants to open up all of Europe

    The young brand Lynk & Co of the largest private carmaker Geely is already drawn to several European countries. Geely holds a good ten percent stake in Daimler. In Germany, Sweden, France, Spain, the Netherlands and Belgium, interested customers can already put their names on a waiting list for a Lynk & Co car. The first examples of the compact SUV 01 have been delivered since March.

    So far, the 01 is the only model Lynk & Co offers in Europe. It has been developed on a shared platform with the XC40 from the sister brand Volvo, which also belongs to Geely. At 4.54 meters, however, the 01 is slightly longer than the XC40 and thus offers more legroom in the back seats – a typical feature of Chinese cars. Configuration options are modest. However, it is the manufacturer’s hope, that this cost-saving simplicity will appeal to young buyers: blue or black. Hybrid or plug-in technology. Period.

    Subscription model to appeal to new groups of buyers

    In Europe, Lynk & Co is offering a subscription model as an innovative concept: The company plans a “streaming service for mobility” with a monthly membership. The 01 will cost exactly €500 per month – including tax, insurance, maintenance, and tire changes. If the car needs to go to the workshop, someone will pick it up and bring it back afterward. Volvo specialists will do the repairs. Instead of a subscription, the 01 can also be purchased for €35,000.

    In its home market in China, Lynk & Co already offers six different models of the brand. There, however, the cars are sold traditionally – without a subscription option. Observers justify this step with the varied buying behavior of customers: Since cars are even more a status symbol among young Chinese than in Europe, they prefer ownership. Therefore, Europe will get a more innovative sales model than the home market.

    Nio in Europe with the same concept as at home

    Nio, in turn, is following more or less the same concept in Norway as in China: There will be an app, service stations, and a Nio community. The second model to be sold in Norway from 2022 will be the ET7 – the latest model from the Tesla competitor, a kind of e-coupe with autonomous sub-functions. To celebrate its market launch, the company has developed a Norwegian color: arctic green. According to William Li, the muted dark green tone was inspired by the Northern Lights over Tromsø. It will be available for Nio models in both Norway and China. Christiane Kuehl/Joern Petring

    • Car Industry
    • Geely
    • Lynk & Co
    • Nio
    • Volvo

    Conflict with Australia: foretaste for EU

    China’s conflict with Australia is slowly coming to a head, as China’s National Development and Reform Commission (NDRC) indefinitely suspended the strategic economic talk with Canberra on Thursday. The reason: Australia’s government officials had recently taken several steps out of ideological discrimination that disrupted cooperation. The government in Canberra was thus demonstrating a “Cold War mindset”.

    The strategic economic talk is part of the bilateral talks between Australia and China. It was established in 2014 to deepen economic cooperation between the two countries. However, the last economic talk took place almost four years ago. Nevertheless, both sides describe the conversation as “an important mechanism” in bilateral relations. But these are in bad condition. The two countries are in an exchange on many levels.

    China’s Foreign Ministry Spokesman Wang Wenbin said Australia was abusing the concept of national security to put pressure on China. “Australia must bear full responsibility.” Wang echoed words used by the Australian government, which recently justified its actions against China by citing “national security interests”.

    Geostrategic interests in Darwin

    Since the beginning of the week, Canberra has been officially examining whether it could withdraw the operation of the strategically important port of Darwin from the Shandong Landbridge Group. In 2015, it signed a leasing contract with the Chinese state-owned company for the port in northern Australia. The port was in ruins. Because of this, it was willingly accepted that the company owned by Chinese billionaire Ye Cheng was prepared to pay the equivalent of €325 million for the operation. But since then, there has been growing concern. The port is strategically located, serving as a gateway to Asian markets and a potential hub for commodity and agricultural exports. For Australia’s Prime Minister Scott Morrison, Darwin is now a danger to national security.

    This could be primarily due to Australia’s most important partner: the US. Washington has its own military base in Darwin. The stationing of the US Navy was part of the Asia strategy of then-President Barack Obama. The US wanted another base with direct access to the important shipping lanes in the Pacific, in addition to the Pacific base at Guam and Okinawa in Japan.

    Xi’s prestige project also affected

    Last month, the Australian government canceled an agreement between China and the Australian state of Victoria. The agreement would have made the region part of the “New Silk Road,” the prestige project of China’s President Xi Jinping. Foreign Minister Marise Payne said at the time that the agreements were incompatible with Australia’s foreign policy. She also warned that Beijing was trying to buy influence in Australia. Australian Finance Minister Josh Frydenberg also blocked several planned acquisitions by Chinese investors. As a result, investments fell by 61 percent last year to the equivalent of €643 million.

    A basis for these steps is a change in the laws for foreign investors. Since then, Canberra owns the right to veto security-relevant infrastructure projects. This also allows for the review of contracts that have already been signed – including the imposition of new conditions or even the cancellation of a contract.

    Peter Jennings of the Australian Strategic Policy Institute (ASPI) believes the Australian government’s behavior is justified. “The economic relationship Australia once welcomed with China is being used by Beijing as an instrument of coercion and punishment.” Whether in the South China Sea, with Taiwan, on India’s border, and in its dealings with Australia – Beijing’s true goal is becoming increasingly transparent, he said. Namely to disrupt the international order and gradually replace it with its own authoritarian control.

    The former harmonious relationship is no more

    It’s a dramatic turn in bilateral relations that for years seemed almost symbiotic. Because Australia has what ambitious China desperately needs for its economy: important raw materials like coal and iron ore. And China’s upper class also loves the proximity to Australia and the wonderful properties in beautiful (and above all clean) nature, as well as top universities where more and more young Chinese are studying.

    China, for its part, is Australia’s most important sales market – and conveniently right on its doorstep. Since the conclusion of a free trade agreement at the end of 2015, Australia’s exports to China have almost doubled to $150 billion per year (around €93 billion). China also ranks first in terms of imports.

    However, the former harmonious relationship is no more: Canberra excluded the Chinese telecommunications company Huawei from the expansion of the national 5G network. In the conflict over the South China Sea, they opposed Beijing’s extensive territorial claims, and in the Covid pandemic, they recently called for an independent investigation into the origin of the virus.

    China, for its part, imposed punitive tariffs and import boycotts – on everything from wine, grain, lobster, and meat, the tourism and university sectors to coal. Even verbally, things got increasingly rough. Hu Xijin, Editor-in-Chief of the state-run Global Times newspaper, wrote, for example, that Australia was “like chewing gum stuck on the sole of China’s shoes”, which had to be scraped off with a stone.

    Australia still has a trump card

    Only one sector has remained largely untouched so far: the iron ore trade. Australian mining group Rio Tinto seems to be barely affected by the exchange with China. “We sell more than half of our products to China and we have a good relationship,” Chief Executive Jakob Stausholm said recently. “We are unaffected.”

    The reason for this is found quickly: China lacks alternative sources of iron ore, as Australia holds a virtual global monopoly on raw materials. According to Statista data, Canberra covers more than 62 percent of China’s demand. Brazil, the world’s second-largest exporter, has serious supply problems due to the Covid pandemic – but could hardly replace Australia’s reserves anyway. In view of current developments, it seems only a matter of time before Canberra plays this trump card.

    Even if Beijing’s latest move is only symbolic, it’s clear that the two countries have long been engaged in an exchange of blows that is far more than a diplomatic crisis. It seems that a resurgent China wants to make an example of Australia. The dispute highlights the importance of recalibrating the relationship with an increasingly internationally agile China. It is a task that Australia is not facing alone. As Prime Minister Scott Morrison warns: “Our current challenge in the Indo-Pacific is a foretaste for many other countries around the world, including Britain and Europe.”

    • Australia
    • Geopolitics
    • Indo-Pacific
    • Iron Ore
    • Mobile communications
    • New Silk Road
    • Raw materials

    News

    Increasing investments in Germany

    For the first time in five years, China is increasing the number of investment projects in Germany and thus ranked third among foreign investors in Germany last year. According to a survey by the federally owned Germany Trade and Invest (GTAI), Chinese companies made a total of 170 greenfield and expansion investments. In 2019, China was still in fourth place with 154 projects. The largest investor in 2020 was the US with 254 investments, followed by Switzerland with 219 investments. The GTAI counted 1,686 settlement projects by foreign investors last year, which was nine percent less than the year before. The GTAI did not provide any information on the countries of origin of the 372 takeovers in which foreign investors acquired more than 50 percent of the shares in German companies. Nor was any information provided on the financial volume of the investments and acquisitions. asi

    • Deutschland
    • Finance
    • Geopolitics
    • GTAI
    • Investments

    VW: very good start to the year

    Volkswagen achieved one of the best first quarters in its history despite the lack of chips. Wolfsburg-based carmaker’s sales rose to €62.4 billion. Profits rose from half a billion to €3.4 billion. The positive start to the year was mainly due to good business in China. Compared with the same period last year, sales figures rose by 61 percent in the Group’s largest single market.

    Volkswagen had to stop production lines several times in recent weeks and announced short-time work due to the shortage of chips. So far, the lack of semiconductors has been well absorbed operationally, according to Arno Antlitz, CFO of the Volkswagen Group. However, he also said, “The undersupply of semiconductors across the industry is expected to have a somewhat more significant impact in the second quarter than it has so far. Nevertheless, we are confident about the business development for the year as a whole.” nib

    • Car Industry
    • Technology

    Foxconn and Yageo launch joint venture for semiconductors

    Electrical contract manufacturer Foxconn has announced the formation of a semiconductor joint venture with Yageo, another Taiwanese component manufacturer. The focus will be on making small integrated circuits that cost less than two dollars, Foxconn said. The joint venture’s chips will be used in Foxconn products but sold to international customers, too. Furthermore, the two companies plan to jointly invest in product development.

    The new company is called XSemi. Foxconn said the small chips account for 90 percent of all semiconductors by volume in an electric car. Foxconn and Yageo are also in negotiations with several global semiconductor companies and will unveil more plans in the near future, a Foxconn statement said. nib

    • Car Industry

    Space agency: rocket debris ‘not dangerous’

    China expects debris from the recently launched rocket to fall into international waters. That rocket remains fell back to Earth is “common in space travel”, the English-language edition of the state-affiliated Global Times newspaper wrote. Aerospace Knowledge magazine Editor-in-Chief Wang Ya’an told the newspaper that China’s space agencies had carefully considered the possibility of falling debris: in the rocket’s design, choice of the launch site, and trajectory. The newspaper also said, citing various experts, that the rocket stage was built primarily of lightweight material, most of which will simply burn up during re-entry.

    The US military is tracking the debris and expects it to crash on Earth around May 8. Western space experts had warned of an “uncontrolled re-entry” of debris from the main rocket stage into the atmosphere this weekend or Monday. They expressed concerns about the design of the Long March 5B rocket. They said the main stage was not steerable and thus could not be maneuvered into a trajectory for the crash specifically. Risks are posed by materials with high melting points such as the engine or tank structures. It could be that these parts do not burn up on re-entry into the atmosphere.

    During a flight of an identical rocket in 2020, debris fell on the Ivory Coast and damaged several houses in villages. According to the European Space Agency’s ESA Space Residue Office in Darmstadt, the possible impact area includes any part of the Earth’s surface between 41 degrees north and 41 degrees south latitude, the dpa news agency reported. World cities such as New York, Beijing, and Shanghai lie in this range; in Europe, southern Spain, Italy, and Greece could be affected. Germany, on the other hand, is too far north. It is more likely, however, that the debris will fall over the ocean or uninhabited territory. ck/nib

    • Aerospace
    • Pollution
    • Sustainability

    Column

    About the magic of names on the way into space

    By Johnny Erling
    Ein Bild von Johnny Erling

    For five weeks until the end of February, China’s space agency (CNSA) let the public vote on a suitable name for its Mars rover. The vehicle is still waiting to be deployed aboard the lander of China’s Tianwen (天问 question the sky) Mars mission and is scheduled to fly to Mars in mid-May.

    The rover will be called Zhu Rong, after the ancient Chinese god of fire. In the book “Chinese Religion”, published in Shanghai in 1936, the saint is described as a hybrid being with the body of an animal, a red face, beard and clothes. One of his three eyes sits on his forehead. He rides a dragon. Heaven sent him forth for punitive action. The pillar supporting the universe was destroyed in his epic battle against the god of water. The world plunged with him into the ensuing chaos.

    Hong Kong’s South China Morning Post interprets the choice of Zhu Rong as the patron saint of China’s future Mars rover as an allusion to the escalating “tensions” between the People’s Republic and the US that now extend into space. According to Xinhua, CNSA space agency Vice Chief Wu Yuanhua disagreed, saying the two characters in the Fire God’s name pointed to his real nature. “Zhu” stands for “congratulations” and “Rong” for “blending in harmoniously”, he said, adding that this also applies to China’s spaceflight. It pursues the “vision of using space peacefully and building a community for the common future of mankind”.

    With its first Mars rover and the launch of its core module ship Tianhe (天和) “Heavenly Harmony”, Beijing has aroused patriotic pride among its people. Tianhe will be the basic building block for China’s first space station, assembled from three modules called Tiangong (Heavenly Palace). It is expected to be ready for occupancy by 2022. After the end of the Russian Mir space station (1986 to March 2001) and the expected 2024 demolition of the International Space Station (ISS), which has been used by 16 nations for two decades, the hour has come for the People’s Republic. It will then be the only nation to maintain an outpost in space. No other project better underscores China’s ambition to become a world and space power than the accelerated expansion of its celestial temple.

    Chinese space travel still lags behind

    Yet the People’s Republic lags half a century behind the US in terms of technology. Its space station is just big enough to accommodate three space travelers. When Beijing was still in the process of putting its Tianhe core module into space at the end of April, the ISS reported a record occupancy of eleven astronauts working on board at the same time.

    While China’s Mars rover must wait for its landing, the new US rover, which has been operating for weeks, sent a mini-helicopter flying over Mars in a technical premier. Five US rovers that the US used to set down on the red planet are still operating there today. Their names, however, are widely unknown: Sojourner, Opportunity, Spirit, Curiosity, and Perseverance. Worldwide interest in NASA was greater when its space missions were baptized with the names of gods from Greek and Roman mythology: Mercury, Apollo, Ares or Artemis.

    From the beginning, the Socialist People’s Republic and its Communist Party relied on the magic of its ancient Chinese saints and myths to conquer the heavenly sphere. In the earthy realm, they were long denounced as superstition. Beijing has rehabilitated them all as part of the national culture and a source of patriotism.

    In 2003, 18 years ago, China’s taikonaut Yang Liwei circumnavigated the globe for one day in the first manned space mission. His capsule was named “Shenzhou” (Celestial Ship), and from then on Beijing turned to gods, legendary animal beings, and the Confucian Code. The party newspaper Global Times calls it: “China’s romanticism in naming space missions.”

    The West’s only focus is on the technological progress of the People’s Republic. It thus misses out on where Chinese soft power really works, in the formation of Chinese space culture. Beijing has thus overstepped its national boundaries, recognizes Ph.D. student Molly Silk, who is researching China’s space policy at the University of Manchester.

    For decades, NASA monopolized everything that had to do with space travel. Its name and logo became synonymous with the exploration and marketing of space. China, with its own space culture, is challenging US supremacy and questioning how the world will perceive US space exploration and leadership in the future.

    Beijing is staking more than its claim to a share of space development. It wants to set the direction. For the Global Times, the point is clear: “A great country like China is destined to conquer space and the sea. We can’t talk about China’s rise unless the country makes breakthroughs in high-end areas like aerospace.”

    • Aerospace
    • Chinese Communist Party
    • Domestic policy of the CP China
    • Robotics
    • Technology

    Executive Moves

    Translation missing.

    Dessert

    This weekend, the traveling wave ends on the first of May. Passengers wait – here at Kunming airport – in massage chairs, which are supposed to make back and neck pain from the strains of traveling simply disappear. For the equivalent of one euro, you can have nine minutes of waiting time “massaged away”. Who wouldn’t want that for the next Zoom or teams conference?

    China.Table Editors

    CHINA.TABLE EDITORIAL OFFICE

    Licenses:

      Sign up now and continue reading immediately

      No credit card details required. No automatic renewal.

      Sie haben bereits das Table.Briefing Abonnement?

      Anmelden und weiterlesen