Bloc formation in Northeast Asia: North Korea moves closer to China
Rising sea levels threaten coastal regions
Exports show a surprising increase
Hong Kong considers shortening quarantine
Coronavirus ‘does not last long in the freezer’
TikTok postpones controversial data privacy change
Tools: Green transition opens opportunities for investors
Dear reader,
Over the past few years, China’s relationship with its communist brother state North Korea has been extremely tense. Beijing was annoyed by Pyongyang’s constant flaunting of nuclear-grade missiles. The Stalinist leadership in North Korea, in turn, deemed its big brother too consumerist and capitalist.
In the wake of the reigniting conflict between North and South Korea and general geopolitical disputes, Beijing and Pyongyang are once again growing closer. But how serious are the two leaders about their newly forged friendship? A new North Korean nuclear test in particular would massively damage relations with China again, analyzes our authors Fabian Kretschmer and Finn Mayer-Kuckuk. Because Beijing still does not want a neighbor on its own doorstep that possesses nuclear weapons and is unpredictable at the same time.
Climate change currently seems more real than ever. Record temperatures, collapsing glaciers and, last but not least, the sight of many withered meadows show us that the changes are no longer a theory, but will affect our everyday lives from now on. The rising sea level is also a topic again. How far it will rise varies depending on the simulation. But one thing is already certain: The water is already rising.
China is no exception here; on the contrary, a particularly high proportion of value creation happens in coastal cities. Moreover, they are densely clustered population hubs. Ning Wang analyzes what rising sea levels could mean for China and how it will respond. The conclusion: Diking is cheaper than resettlement.
Your Felix Lee
Feature
North Korea again moves closer to China
Kim Jong-un rejoices at the successful test of an intercontinental ballistic missile (March 2022).
After a few quiet years, the Korean conflict once again appears more menacing. At the same time, a stronger bloc formation in the region can be observed: While South Korea is again emphasizing its loyalty to the United States, North Korea is moving closer to China. On Monday, state media in Pyongyang stressed that cooperation with Beijing would be raised to “a new level”.
The background to the actions by the Security Council is also the war in Ukraine. Russia and China have opposed the West’s proposal on principle; Kim hasthus unexpectedly been dealt a joker with the “Russia card”.
Kim’s new move toward China also stems from the overall situation. Ruler Kim Jong-un is disappointed with America. His “good friend” Donald Trump is no longer in office, and his successor Joe Biden, together with his South Korean allies, is once again adopting a harder line against his regime.
South Korea’s show of strength
South Korea’s new Chief of the Joint Chiefs of Staff, Kim Sung-kyum, did not leave the slightest doubt that the time for quiet diplomacy is over. On Monday, the high-ranking military man proudly touted the advantages of his own missile system. The warning to the northern neighbor was unmistakable: The military is capable of dealing “merciless deadly blows at the enemies” at any time.
Such a statement is perceived in Pyongyang as a new stage of escalation. Kim Jong-un’s regime, in turn – and this is what makes the conflict so dangerous – protects itself against any external threat with its own nuclear arsenal. Jeffrey Wilson, a disarmament expert at the Middlebury Institute in California, has long spoken of a dicey “prisoner’s dilemma“: Both sides want to avoid war, but at the same time must be constantly on guard in order to be able to strike first in case of an escalation.
The fact that such scenarios are once again considered a possibility reveals the serious threat that exists on the Korean peninsula. Virtually nothing remains of the spirit of optimism of the past four years.
Even Trump could not effectively involve Kim
In July 2018, Kim Jong-un and then-US President Donald Trump met for the first, historic summit in Singapore. At the time, the global community was hoping for a long-overdue breakthrough in nuclear negotiations: The Swiss-educated, youthful Kim would be willing to give up his nuclear arsenal in return for economic concessions. These hopes, however, soon turned out to be extremely naïve.
In the following months, the negotiations between Washington and Pyongyang eventually fizzled out. And when Trump finally realized at the second summit with Kim in Hanoi that the North Korean regime would not comply with the demand for “complete” nuclear disarmament, the mood soured.
Meanwhile, since May, the Blue House in Seoul has been led by Yoon Suk Yeol, a President who is once again focusing on deterrence rather than diplomacy. The conservative politician’s tougher stance is quite understandable, it can be interpreted as a direct reaction to the constant provocations of the North Korean military, after all. Last year, Pyongyang resumed missile tests at a higher rate than in a long time.
The North prepares for new nuclear tests
International intelligence reports, as well as satellite footage, have also long suggested that Kim could soon conduct his first nuclear test in more than five years. The main reason why he has not already done so is likely to be trivial: The traditional wet season turned out to be particularly heavy this year – and complicated plans for a missile launch.
However, a nuclear test, in particular, would again harm relations with China. The neighboring superpower is not particularly happy about the nuclear test. After all, Kim’s bombs also threaten Beijing, which is well within the range of his missiles. With Russia, India, and Pakistan as nuclear-armed neighbors, the situation is already complicated enough.
Thus, it is foreseeable that Pyongyang and Beijing will also drift apart again. The proud Kim dynasty has always eyed China with suspicion. Independence from foreign countries is its greatest asset. To them, any alliances are merely alliances of convenience. And since ancient times, China has had a tendency to integrate its neighbors into its own system of rule. Therefore, all neighbors have their guard up – and the fundamentally compatible communist regime in the north all the more so. Fabian Kretschmer/Finn Mayer-Kuckuk
They are symbols of China’s rapid development over the past decades: Skyscrapers like the Shanghai Tower in Pudong. In the coastal cities, the economy is flourishing, gigantic housing complexes are constructed and high-quality jobs are being created. But the coastal way of life is threatened.
The Ministry of Natural Resources 自然资源部 has recorded a “high sea level rise” on the coast for the past ten years: 84 millimeters, or about a hand’s width. This value refers to 2021 compared to the average level of the period from 1993 to 2011.
This increase over the past year marks a new record. It gives the authorities and experts great cause for concern. By comparison, global average sea levels have risen by about 210 to 240 millimeters since 1880. Nearly a third of the rise has occurred in the past two and a half decades. For the coming years, the ministry expects a further rise of one to two hand widths.
About half of China’s citizens living in provinces and cities in the coastal region will be affected if sea levels continue to rise at the current rate (China.Table reported). Harbingers of the impending disaster already occur in the form of storm surges and floods. Last year alone, these caused economic damage equivalent to more than $459 million.
Floods force people to flee
By 2100, China could lose an area currently home to 43 million people to flooding, according to a study by climate scientists from the organization Climate Central. So far, however, the known measures to reduce the risks of sea-level rise are fairly limited.
Beijing, for example, has planned a number of sponge city projects (China.Table reported). But there is a lack of infrastructure – or it has been planned incorrectly. Provincial authorities have focused more on building dams, dikes and drainage systems, rather than expanding sponge cities or relocating residents of the most vulnerable regions.
Experts are divided on how to respond appropriately to this development. Where land disappears, people may move inland. “Because China’s coastlines are relatively densely populated and the urbanization rate is high, we expect that much of the coast will be protected,” Global Climate Forum data scientist and climate scientist David Lincke tells China.Table. In a recent study, Lincke compared the effects of rising sea levels and land subsidence around the world. The study found China to be particularly at risk due to its heavily populated coastal areas.
Researchers consider coastal protection measures to be more cost-effective than relocating the local population for over half of the affected area. “Including socio-economic and climate scenarios, we calculated that for 56 percent of the coast, coastal protection is more cost-effective than migration under each scenario,” Lincke said. For 26 percent of the coast, the result would depend on the scenario, and for 18 percent, coastal protection is more expensive than migration under each scenario.
While state media report that the port city of Shanghai is planning additional drainage tunnels and tide gates to prevent the worst, it remains a race against time. Pei-Chin Wu and his colleagues at the US University of Rhode Island used satellite data to determine which coastal cities are currently particularly affected by land subsidence caused by rising sea levels. They analyzed data from the Interferometric Synthetic Aperture Radar (InSAR) on the European Earth observation satellite Sentinel-1. They highlight particularly strong land subsidence in Tianjin and Shanghai.
The Chinese Ministry of Ecology and Environment also paints a bleak picture of the next 30 years. By 2050, the water level on China’s coasts is expected to rise by as much as 55 to 170 millimeters. So the signals that something has to be done have reached the authorities. Only “with the greatest efforts” will it be possible to defend the country’s coasts against rising sea levels, according to a recent ministry paper.
Erosion of shorelines threatens all of Asia
There is also another problem: Triggered by rising sea levels, the erosion of shorelines is threatening the existence of people in the affected areas. The coasts of China are particularly threatened, as are Bangladesh, India, Vietnam, Indonesia, Thailand, the Philippines and Japan. Asia will be hit particularly hard because sea levels are rising faster here than the global average. On top of this, over 70 percent of the continent’s population lives in the heavily populated coastal regions.
To make matters worse, international experts agree that even successfully tackling climate change and limiting global warming to below two degrees Celsius will not stop sea levels from rising globally. However, the higher global temperatures rise, the more glaciers will melt and the higher sea levels will rise. As temperatures rise, so do greenhouse gas emissions. Humans are the largest contributors to carbon emissions and are therefore directly responsible for sea level rise.
A report by the Intergovernmental Panel on Climate Change shows that the effects of past greenhouse gas emissions are irreversible for centuries or even millennia. Even though coal is currently back high on the agenda for reasons of energy security – Beijing assures that it will continue to give high priority to climate protection.
Climate
Emissions
Environment
Sustainability
News
Largest export increase in five months
Global supply chains remain under massive pressure. However, there is now positive news from China, the largest exporter of consumer goods and intermediate products: Despite ever-looming Covid lockdowns, exports from the second-largest economy surprisingly increased in June. They rose by 17.9 percent year-on-year, the Beijing Customs Administration announced on Wednesday. This marks the strongest increase in five months. In May, the increase was 16.9 percent. Economists originally expected an increase of only 12 percent.
In the first half of the year, foreign trade grew by 9.4 percent year-on-year. Imports from Russia surged by 48 percent, driven by substitute energy imports. Wen Bin, Chief Economist at Minsheng Bank, said the weaker yuan is helping to support the export industry. He also added that things are starting to return to normal at some ports. At the key port of Shanghai, daily container throughput is back to at least 95 percent of last year’s level, according to authorities.
However, the situation looks less rosy for imports. Imports grew by just one percent, compared to 4.1 percent in May. This clearly reflects the slowdown in consumer spending in the wake of Covid measures.
Still, China’s trade surplus totaled almost $98 billion last month – significantly more than experts had expected. In May, the figure was almost $79 billion. The World Bank and the IMF recommend that every major economy should maintain a balanced foreign trade.
Economists believe China’s overall economy grew at its weakest rate in the second quarter since the Covid crisis began in 2020. The official numbers will be published on Friday. flee/rtr
Export
Supply chains
Trade
Hong Kong considers shortening quarantine
Hong Kong’s new health chief Lo Chung-mau believes it is possible that quarantine-free entry into the Chinese special administrative region could be granted in time for the Global Banking Summit in November. This was reported by the Hong Kong-based South China Morning Post. Hong Kong is not required to follow the People’s Republic’s strict COVID-19 policy as the city enjoys a certain degree of freedom under the “one country, two systems” principle, Lo said in an interview with the newspaper.
He envisions a procedure in which arrivals at the international airport are immediately subjected to PCR tests. He also plans to introduce a health code system like the one already in place in mainland China. A yellow code, for example, allows people to go to work but prohibits them from visiting locations frequented by high-risk groups, such as nursing homes and homes for the elderly.
Furthermore, Lo wants to examine the possibility of reducing the quarantine period from the current seven days in a hotel and seven days at home to five days in a quarantine hotel and two days at home over the next few weeks. He added that he could imagine that entrants might also spend their entire quarantine period at home. However, this step is currently still being examined. flee
Coronavirus
Health
Hongkong
Covid testing of imported frozen goods discontinued
On Wednesday, the National Health Commission surprised with an already known fact: The Coronavirus does not survive long on food packaging. As a result, imported frozen goods will no longer have to be tested in the future. “Recent research shows that the new Coronavirus survives only a short time on most surfaces under normal temperature conditions and is all inactivated within a day,” the statement reads. Removing the testing requirement for certain foods is therefore in line with the “spirit of General Secretary Xi Jinping’s important instructions” on disease prevention, it said.
During the first year of the pandemic, it already became apparent that surfaces are not suitable for transmitting the viruses to humans. Although this infection route is not completely ruled out, at least food is not considered a likely route of transmission. So far, however, China has consistently relied on testing and inspection of everything that enters the country. Disinfection of surfaces and people is also a high priority (China.Table reported).
The real reason for the new regulation is probably not so much a scientific finding on Sars-CoV-2, but rather one of economic necessity. Specifically, the policy change could be due to global inflation and strained supplies. The tests slow imports of low-cost foreign goods and increase their prices. But imports in general could help curb prices.
The absurdity of testing frozen foods is illustrated by a tweet from journalist Lea Sahay, who shared the results of tracking an ice cream package. The barcode revealed that the cup was tested for Covid via PCR test. fin
Coronavirus
Health
Import
Trade
TikTok postpones controversial privacy change
Chinese short video platform TikTok has postponed a controversial change in the handling of user data at the last moment. According to the Italian data protection authority, on Wednesday TikTok wanted to use the data available on users’ devices for personalized advertising without their consent. Now the group postponed the implementation of the plans. The Italian data protectors drew the attention of the Irish Data Protection Commission (DPC), which has EU-wide jurisdiction in such cases, to a possible violation of EU data protection rules. rtr
Data
Data protection
Technology
Tiktok
Tools
China’s Green Industries: What are the Opportunities for Foreign Investors? (Part 1)
By Qian Zhou, Asia Briefing
China’s plans to transform its economy to meet high environmental standards and serve climate-conscious goals may be considered ambitious, but it creates new opportunities. With advances in technology, financing, and regulatory policies, the growth potential of green industries is more attractive than ever – much of this momentum is concentrated in renewables, clean production, waste management, sustainable infrastructure, and services that support green development.
This is in line with the areas encouraged in the Catalog of Encouraged Industries for Foreign Investment (hereinafter, the encouraged catalog). In the presently effective 2020 version of the encouraged catalog, around 100 items fall into the scope of green industries, accounting for nearly one-fifth of the total sectors where foreign investment is encouraged. This trend persists in the exposure draft of the 2022 version of the encouraged catalog.
Renewable energy
Along China’s path to reach its ambitious carbon reduction targets, a rapid and effective shift of power generation from fossil fuels to renewable energy sources will be unavoidable, as this sector is responsible for 52 percent of carbon emissions in the country, higher than the global average of 41 percent.
Despite China’s dominance in renewables and the country’s proliferation of renewable energy sources, it is still far from replacing fossil fuel sources. In 2021, electricity generated from renewables reached 2.48 trillion kWh, equivalent to 29.9 percent of total electricity use that year.
To double electricity production from renewables, Zhang Xiliang, a climate modeler at Tsinghua University, projected that China will need to increase solar power generation 16-fold, wind power ninefold, nuclear power sixfold, and hydroelectricity twofold. Even though China is already a global leader in the area, it will need to spend trillions of dollars on renewable energy sources in the coming decades, presenting huge opportunities for foreign investment.
For foreign investors, China’s renewable energy market has felt intimidating to enter in the past, due to the market share of domestic companies, government procurement practices, and inconsistent levels of transparency. Yet, the below facts and trends offer fresh scope to enter this sizable market:
The energy sector prioritizes low costs, and innovation in technologies like solar panels has been relatively slow. While Chinese companies dominate the market share in many of these areas, they do not always possess the advanced technology required for cost
China is gradually removing subsidies for the renewables sector to even the playing field between domestic and foreign companies as markets and technology
Overall, there are no special limitations for foreign investors to invest in new energy projects. And many sectors are specially encouraged for foreign investment, according to the 2020 version of the encouraged catalog.
Renewable energy sectors promoted for foreign investment:
Construction and operation of new energy power stations (including solar energy, wind energy, geothermal energy, tidal energy, current energy, wave energy and biomass energy, )
Construction and operation of regional energy supply (cold and heat) projects driven by renewable energy resources
Construction and operation of biogas projects
Manufacturing of new energy power generation equipment in set or key equipment
Development and application of the complementary system for power generation with gas and renewable resources
R & D as well as application in the production of large energy-storage technologies (thermal battery, pumped storage technology, air energy storage technology, wind power and heating after midnight, )
Hydrogen
The Chinese government has identified the hydrogen industry as one of six industries of the future, and recently released plans that underscore its importance for both energy and industrial development.
In March 2022, the National Development and Reform Commission (NDRC) and National Energy Administration (NEA) issued the Medium and Long-term Development Plan for Hydrogen Energy Industry (2021-2035), making it clear that China wants to take a leading role in developing the nascent green hydrogen (hydrogen made using renewables) market:
By 2025: The plan calls for producing 100,000- 200,000 tons of green hydrogen annually, up from 6.6 tons currently, and getting 50,000 hydrogen fuel cell vehicles on the road – up from 7,700 as of
By 2035: China should form an industrial system for hydrogen energy and a system for applying hydrogen energy, including for transportation and energy
The New Energy Vehicle Industry Development Plan (2021-2035) projects hydrogen refueling station (HRS) capacity to grow from 72 units in mid-2020 to 2,000 units by 2035, demonstrating the close relationship between hydrogen energy development and NEV development.
China is already the world’s largest hydrogen supplier, producing about a quarter of global output. The China Hydrogen Alliance projects the output value of China’s hydrogen industry to reach RMB 1 trillion (US$157.44 billion) in value as early as 2025.
The 2020 version of the encouraged catalog also includes hydrogen energy and its upstream and downstream industries as “encouraged sectors”, which further motivates foreign capital to participate in the development of China’s hydrogen energy sector.
Hydrogen sectors that are encouraged for foreign investment:
Production, storage, transportation, and liquefaction of hydrogen fuels
Manufacturing of equipment for preparation, storage and transportation, and inspection system for hydrogen energy
Construction and operation of hydrogenation stations
R&D and manufacturing of equipment for hydrogen plants
Manufacturing of fuel cells
New energy vehicles
Driven by government support and policy incentives, China has already been the world’s largest NEV producer and consumer, hosting over 90 percent of global investment for both original equipment and components.
In 2021, China sold 3.52 million units of NEVs, up 181 percent from 2020 and exceeding the total sale of the previous three years. This growth trend of NEVs is expected to continue, with China striving to reduce carbon emissions in all fields and green consumption getting more recognition in the consumer market.
For foreign investors, the cap on the share ratio of foreign investment in NEV manufacturing was lifted as early as 2018. And as of January 1, 2022, the restriction that one foreign investor cannot establish more than two JVs in China to manufacture the same type of vehicles has been removed. Thus, China’s NEV sector is now completely open to foreign investors.
According to the 2020 version of the encouraged catalog, foreign investment is especially welcome for research and development (R&D) and manufacturing of key parts and components of NEVs, and the manufacturing of charging piles and charging piles for energy storage. For the former, the 2020 encouraged catalog has provided a very detailed breakdown of the key parts and components of NEVs that are encouraged for foreign investment, with parameter requirements of each industry specified.
NEV sectors that are encouraged for foreign investment:
Design and manufacturing of special production equipment for power batteries for automobiles
Production of charging columns and charging stations for energy storage
Design and manufacturing of special production equipment for power batteries for automobiles
The second part of this paper will focus on carbon capture and storage (CCUS), green services, recycling and energy storage.
This article first appeared in Asia Briefing, published by Dezan Shira Associates. The firm advises international investors in Asia and has offices in China, Hong Kong, Indonesia, Singapore, Russia and Vietnam.
Autoindustrie
Executive Moves
Florian Lampmann has taken on a management role in the Batteries and Drives division at Daimler China. The engineering graduate, who was educated in Nuremberg and Berlin, has been working for the German automaker since 2004. He has spent six years of that time at his current workplace in Beijing.
Gian-Luca Ratte has left his post as Project Manager for Bayer in Shanghai. He worked for the German chemical and pharmaceutical company in China for five years. He has been working for the company as Senior Project Manager in Leverkusen since June.
Is something changing in your organization? Why not let us know at heads@table.media!
Dessert
Botanical gardens do not have a long tradition in China. In fact, the first one only opened its doors in Beijing in April. Since last week, China’s second botanical garden has been open in Guangzhou. And the operators there are particularly proud of the giant water lily named after Queen Victoria. With a diameter of three meters, it can allegedly carry a weight of 70 kilos. Still, no one should try to sit on it. Because Victoria is considered very sensitive.
Bloc formation in Northeast Asia: North Korea moves closer to China
Rising sea levels threaten coastal regions
Exports show a surprising increase
Hong Kong considers shortening quarantine
Coronavirus ‘does not last long in the freezer’
TikTok postpones controversial data privacy change
Tools: Green transition opens opportunities for investors
Dear reader,
Over the past few years, China’s relationship with its communist brother state North Korea has been extremely tense. Beijing was annoyed by Pyongyang’s constant flaunting of nuclear-grade missiles. The Stalinist leadership in North Korea, in turn, deemed its big brother too consumerist and capitalist.
In the wake of the reigniting conflict between North and South Korea and general geopolitical disputes, Beijing and Pyongyang are once again growing closer. But how serious are the two leaders about their newly forged friendship? A new North Korean nuclear test in particular would massively damage relations with China again, analyzes our authors Fabian Kretschmer and Finn Mayer-Kuckuk. Because Beijing still does not want a neighbor on its own doorstep that possesses nuclear weapons and is unpredictable at the same time.
Climate change currently seems more real than ever. Record temperatures, collapsing glaciers and, last but not least, the sight of many withered meadows show us that the changes are no longer a theory, but will affect our everyday lives from now on. The rising sea level is also a topic again. How far it will rise varies depending on the simulation. But one thing is already certain: The water is already rising.
China is no exception here; on the contrary, a particularly high proportion of value creation happens in coastal cities. Moreover, they are densely clustered population hubs. Ning Wang analyzes what rising sea levels could mean for China and how it will respond. The conclusion: Diking is cheaper than resettlement.
Your Felix Lee
Feature
North Korea again moves closer to China
Kim Jong-un rejoices at the successful test of an intercontinental ballistic missile (March 2022).
After a few quiet years, the Korean conflict once again appears more menacing. At the same time, a stronger bloc formation in the region can be observed: While South Korea is again emphasizing its loyalty to the United States, North Korea is moving closer to China. On Monday, state media in Pyongyang stressed that cooperation with Beijing would be raised to “a new level”.
The background to the actions by the Security Council is also the war in Ukraine. Russia and China have opposed the West’s proposal on principle; Kim hasthus unexpectedly been dealt a joker with the “Russia card”.
Kim’s new move toward China also stems from the overall situation. Ruler Kim Jong-un is disappointed with America. His “good friend” Donald Trump is no longer in office, and his successor Joe Biden, together with his South Korean allies, is once again adopting a harder line against his regime.
South Korea’s show of strength
South Korea’s new Chief of the Joint Chiefs of Staff, Kim Sung-kyum, did not leave the slightest doubt that the time for quiet diplomacy is over. On Monday, the high-ranking military man proudly touted the advantages of his own missile system. The warning to the northern neighbor was unmistakable: The military is capable of dealing “merciless deadly blows at the enemies” at any time.
Such a statement is perceived in Pyongyang as a new stage of escalation. Kim Jong-un’s regime, in turn – and this is what makes the conflict so dangerous – protects itself against any external threat with its own nuclear arsenal. Jeffrey Wilson, a disarmament expert at the Middlebury Institute in California, has long spoken of a dicey “prisoner’s dilemma“: Both sides want to avoid war, but at the same time must be constantly on guard in order to be able to strike first in case of an escalation.
The fact that such scenarios are once again considered a possibility reveals the serious threat that exists on the Korean peninsula. Virtually nothing remains of the spirit of optimism of the past four years.
Even Trump could not effectively involve Kim
In July 2018, Kim Jong-un and then-US President Donald Trump met for the first, historic summit in Singapore. At the time, the global community was hoping for a long-overdue breakthrough in nuclear negotiations: The Swiss-educated, youthful Kim would be willing to give up his nuclear arsenal in return for economic concessions. These hopes, however, soon turned out to be extremely naïve.
In the following months, the negotiations between Washington and Pyongyang eventually fizzled out. And when Trump finally realized at the second summit with Kim in Hanoi that the North Korean regime would not comply with the demand for “complete” nuclear disarmament, the mood soured.
Meanwhile, since May, the Blue House in Seoul has been led by Yoon Suk Yeol, a President who is once again focusing on deterrence rather than diplomacy. The conservative politician’s tougher stance is quite understandable, it can be interpreted as a direct reaction to the constant provocations of the North Korean military, after all. Last year, Pyongyang resumed missile tests at a higher rate than in a long time.
The North prepares for new nuclear tests
International intelligence reports, as well as satellite footage, have also long suggested that Kim could soon conduct his first nuclear test in more than five years. The main reason why he has not already done so is likely to be trivial: The traditional wet season turned out to be particularly heavy this year – and complicated plans for a missile launch.
However, a nuclear test, in particular, would again harm relations with China. The neighboring superpower is not particularly happy about the nuclear test. After all, Kim’s bombs also threaten Beijing, which is well within the range of his missiles. With Russia, India, and Pakistan as nuclear-armed neighbors, the situation is already complicated enough.
Thus, it is foreseeable that Pyongyang and Beijing will also drift apart again. The proud Kim dynasty has always eyed China with suspicion. Independence from foreign countries is its greatest asset. To them, any alliances are merely alliances of convenience. And since ancient times, China has had a tendency to integrate its neighbors into its own system of rule. Therefore, all neighbors have their guard up – and the fundamentally compatible communist regime in the north all the more so. Fabian Kretschmer/Finn Mayer-Kuckuk
They are symbols of China’s rapid development over the past decades: Skyscrapers like the Shanghai Tower in Pudong. In the coastal cities, the economy is flourishing, gigantic housing complexes are constructed and high-quality jobs are being created. But the coastal way of life is threatened.
The Ministry of Natural Resources 自然资源部 has recorded a “high sea level rise” on the coast for the past ten years: 84 millimeters, or about a hand’s width. This value refers to 2021 compared to the average level of the period from 1993 to 2011.
This increase over the past year marks a new record. It gives the authorities and experts great cause for concern. By comparison, global average sea levels have risen by about 210 to 240 millimeters since 1880. Nearly a third of the rise has occurred in the past two and a half decades. For the coming years, the ministry expects a further rise of one to two hand widths.
About half of China’s citizens living in provinces and cities in the coastal region will be affected if sea levels continue to rise at the current rate (China.Table reported). Harbingers of the impending disaster already occur in the form of storm surges and floods. Last year alone, these caused economic damage equivalent to more than $459 million.
Floods force people to flee
By 2100, China could lose an area currently home to 43 million people to flooding, according to a study by climate scientists from the organization Climate Central. So far, however, the known measures to reduce the risks of sea-level rise are fairly limited.
Beijing, for example, has planned a number of sponge city projects (China.Table reported). But there is a lack of infrastructure – or it has been planned incorrectly. Provincial authorities have focused more on building dams, dikes and drainage systems, rather than expanding sponge cities or relocating residents of the most vulnerable regions.
Experts are divided on how to respond appropriately to this development. Where land disappears, people may move inland. “Because China’s coastlines are relatively densely populated and the urbanization rate is high, we expect that much of the coast will be protected,” Global Climate Forum data scientist and climate scientist David Lincke tells China.Table. In a recent study, Lincke compared the effects of rising sea levels and land subsidence around the world. The study found China to be particularly at risk due to its heavily populated coastal areas.
Researchers consider coastal protection measures to be more cost-effective than relocating the local population for over half of the affected area. “Including socio-economic and climate scenarios, we calculated that for 56 percent of the coast, coastal protection is more cost-effective than migration under each scenario,” Lincke said. For 26 percent of the coast, the result would depend on the scenario, and for 18 percent, coastal protection is more expensive than migration under each scenario.
While state media report that the port city of Shanghai is planning additional drainage tunnels and tide gates to prevent the worst, it remains a race against time. Pei-Chin Wu and his colleagues at the US University of Rhode Island used satellite data to determine which coastal cities are currently particularly affected by land subsidence caused by rising sea levels. They analyzed data from the Interferometric Synthetic Aperture Radar (InSAR) on the European Earth observation satellite Sentinel-1. They highlight particularly strong land subsidence in Tianjin and Shanghai.
The Chinese Ministry of Ecology and Environment also paints a bleak picture of the next 30 years. By 2050, the water level on China’s coasts is expected to rise by as much as 55 to 170 millimeters. So the signals that something has to be done have reached the authorities. Only “with the greatest efforts” will it be possible to defend the country’s coasts against rising sea levels, according to a recent ministry paper.
Erosion of shorelines threatens all of Asia
There is also another problem: Triggered by rising sea levels, the erosion of shorelines is threatening the existence of people in the affected areas. The coasts of China are particularly threatened, as are Bangladesh, India, Vietnam, Indonesia, Thailand, the Philippines and Japan. Asia will be hit particularly hard because sea levels are rising faster here than the global average. On top of this, over 70 percent of the continent’s population lives in the heavily populated coastal regions.
To make matters worse, international experts agree that even successfully tackling climate change and limiting global warming to below two degrees Celsius will not stop sea levels from rising globally. However, the higher global temperatures rise, the more glaciers will melt and the higher sea levels will rise. As temperatures rise, so do greenhouse gas emissions. Humans are the largest contributors to carbon emissions and are therefore directly responsible for sea level rise.
A report by the Intergovernmental Panel on Climate Change shows that the effects of past greenhouse gas emissions are irreversible for centuries or even millennia. Even though coal is currently back high on the agenda for reasons of energy security – Beijing assures that it will continue to give high priority to climate protection.
Climate
Emissions
Environment
Sustainability
News
Largest export increase in five months
Global supply chains remain under massive pressure. However, there is now positive news from China, the largest exporter of consumer goods and intermediate products: Despite ever-looming Covid lockdowns, exports from the second-largest economy surprisingly increased in June. They rose by 17.9 percent year-on-year, the Beijing Customs Administration announced on Wednesday. This marks the strongest increase in five months. In May, the increase was 16.9 percent. Economists originally expected an increase of only 12 percent.
In the first half of the year, foreign trade grew by 9.4 percent year-on-year. Imports from Russia surged by 48 percent, driven by substitute energy imports. Wen Bin, Chief Economist at Minsheng Bank, said the weaker yuan is helping to support the export industry. He also added that things are starting to return to normal at some ports. At the key port of Shanghai, daily container throughput is back to at least 95 percent of last year’s level, according to authorities.
However, the situation looks less rosy for imports. Imports grew by just one percent, compared to 4.1 percent in May. This clearly reflects the slowdown in consumer spending in the wake of Covid measures.
Still, China’s trade surplus totaled almost $98 billion last month – significantly more than experts had expected. In May, the figure was almost $79 billion. The World Bank and the IMF recommend that every major economy should maintain a balanced foreign trade.
Economists believe China’s overall economy grew at its weakest rate in the second quarter since the Covid crisis began in 2020. The official numbers will be published on Friday. flee/rtr
Export
Supply chains
Trade
Hong Kong considers shortening quarantine
Hong Kong’s new health chief Lo Chung-mau believes it is possible that quarantine-free entry into the Chinese special administrative region could be granted in time for the Global Banking Summit in November. This was reported by the Hong Kong-based South China Morning Post. Hong Kong is not required to follow the People’s Republic’s strict COVID-19 policy as the city enjoys a certain degree of freedom under the “one country, two systems” principle, Lo said in an interview with the newspaper.
He envisions a procedure in which arrivals at the international airport are immediately subjected to PCR tests. He also plans to introduce a health code system like the one already in place in mainland China. A yellow code, for example, allows people to go to work but prohibits them from visiting locations frequented by high-risk groups, such as nursing homes and homes for the elderly.
Furthermore, Lo wants to examine the possibility of reducing the quarantine period from the current seven days in a hotel and seven days at home to five days in a quarantine hotel and two days at home over the next few weeks. He added that he could imagine that entrants might also spend their entire quarantine period at home. However, this step is currently still being examined. flee
Coronavirus
Health
Hongkong
Covid testing of imported frozen goods discontinued
On Wednesday, the National Health Commission surprised with an already known fact: The Coronavirus does not survive long on food packaging. As a result, imported frozen goods will no longer have to be tested in the future. “Recent research shows that the new Coronavirus survives only a short time on most surfaces under normal temperature conditions and is all inactivated within a day,” the statement reads. Removing the testing requirement for certain foods is therefore in line with the “spirit of General Secretary Xi Jinping’s important instructions” on disease prevention, it said.
During the first year of the pandemic, it already became apparent that surfaces are not suitable for transmitting the viruses to humans. Although this infection route is not completely ruled out, at least food is not considered a likely route of transmission. So far, however, China has consistently relied on testing and inspection of everything that enters the country. Disinfection of surfaces and people is also a high priority (China.Table reported).
The real reason for the new regulation is probably not so much a scientific finding on Sars-CoV-2, but rather one of economic necessity. Specifically, the policy change could be due to global inflation and strained supplies. The tests slow imports of low-cost foreign goods and increase their prices. But imports in general could help curb prices.
The absurdity of testing frozen foods is illustrated by a tweet from journalist Lea Sahay, who shared the results of tracking an ice cream package. The barcode revealed that the cup was tested for Covid via PCR test. fin
Coronavirus
Health
Import
Trade
TikTok postpones controversial privacy change
Chinese short video platform TikTok has postponed a controversial change in the handling of user data at the last moment. According to the Italian data protection authority, on Wednesday TikTok wanted to use the data available on users’ devices for personalized advertising without their consent. Now the group postponed the implementation of the plans. The Italian data protectors drew the attention of the Irish Data Protection Commission (DPC), which has EU-wide jurisdiction in such cases, to a possible violation of EU data protection rules. rtr
Data
Data protection
Technology
Tiktok
Tools
China’s Green Industries: What are the Opportunities for Foreign Investors? (Part 1)
By Qian Zhou, Asia Briefing
China’s plans to transform its economy to meet high environmental standards and serve climate-conscious goals may be considered ambitious, but it creates new opportunities. With advances in technology, financing, and regulatory policies, the growth potential of green industries is more attractive than ever – much of this momentum is concentrated in renewables, clean production, waste management, sustainable infrastructure, and services that support green development.
This is in line with the areas encouraged in the Catalog of Encouraged Industries for Foreign Investment (hereinafter, the encouraged catalog). In the presently effective 2020 version of the encouraged catalog, around 100 items fall into the scope of green industries, accounting for nearly one-fifth of the total sectors where foreign investment is encouraged. This trend persists in the exposure draft of the 2022 version of the encouraged catalog.
Renewable energy
Along China’s path to reach its ambitious carbon reduction targets, a rapid and effective shift of power generation from fossil fuels to renewable energy sources will be unavoidable, as this sector is responsible for 52 percent of carbon emissions in the country, higher than the global average of 41 percent.
Despite China’s dominance in renewables and the country’s proliferation of renewable energy sources, it is still far from replacing fossil fuel sources. In 2021, electricity generated from renewables reached 2.48 trillion kWh, equivalent to 29.9 percent of total electricity use that year.
To double electricity production from renewables, Zhang Xiliang, a climate modeler at Tsinghua University, projected that China will need to increase solar power generation 16-fold, wind power ninefold, nuclear power sixfold, and hydroelectricity twofold. Even though China is already a global leader in the area, it will need to spend trillions of dollars on renewable energy sources in the coming decades, presenting huge opportunities for foreign investment.
For foreign investors, China’s renewable energy market has felt intimidating to enter in the past, due to the market share of domestic companies, government procurement practices, and inconsistent levels of transparency. Yet, the below facts and trends offer fresh scope to enter this sizable market:
The energy sector prioritizes low costs, and innovation in technologies like solar panels has been relatively slow. While Chinese companies dominate the market share in many of these areas, they do not always possess the advanced technology required for cost
China is gradually removing subsidies for the renewables sector to even the playing field between domestic and foreign companies as markets and technology
Overall, there are no special limitations for foreign investors to invest in new energy projects. And many sectors are specially encouraged for foreign investment, according to the 2020 version of the encouraged catalog.
Renewable energy sectors promoted for foreign investment:
Construction and operation of new energy power stations (including solar energy, wind energy, geothermal energy, tidal energy, current energy, wave energy and biomass energy, )
Construction and operation of regional energy supply (cold and heat) projects driven by renewable energy resources
Construction and operation of biogas projects
Manufacturing of new energy power generation equipment in set or key equipment
Development and application of the complementary system for power generation with gas and renewable resources
R & D as well as application in the production of large energy-storage technologies (thermal battery, pumped storage technology, air energy storage technology, wind power and heating after midnight, )
Hydrogen
The Chinese government has identified the hydrogen industry as one of six industries of the future, and recently released plans that underscore its importance for both energy and industrial development.
In March 2022, the National Development and Reform Commission (NDRC) and National Energy Administration (NEA) issued the Medium and Long-term Development Plan for Hydrogen Energy Industry (2021-2035), making it clear that China wants to take a leading role in developing the nascent green hydrogen (hydrogen made using renewables) market:
By 2025: The plan calls for producing 100,000- 200,000 tons of green hydrogen annually, up from 6.6 tons currently, and getting 50,000 hydrogen fuel cell vehicles on the road – up from 7,700 as of
By 2035: China should form an industrial system for hydrogen energy and a system for applying hydrogen energy, including for transportation and energy
The New Energy Vehicle Industry Development Plan (2021-2035) projects hydrogen refueling station (HRS) capacity to grow from 72 units in mid-2020 to 2,000 units by 2035, demonstrating the close relationship between hydrogen energy development and NEV development.
China is already the world’s largest hydrogen supplier, producing about a quarter of global output. The China Hydrogen Alliance projects the output value of China’s hydrogen industry to reach RMB 1 trillion (US$157.44 billion) in value as early as 2025.
The 2020 version of the encouraged catalog also includes hydrogen energy and its upstream and downstream industries as “encouraged sectors”, which further motivates foreign capital to participate in the development of China’s hydrogen energy sector.
Hydrogen sectors that are encouraged for foreign investment:
Production, storage, transportation, and liquefaction of hydrogen fuels
Manufacturing of equipment for preparation, storage and transportation, and inspection system for hydrogen energy
Construction and operation of hydrogenation stations
R&D and manufacturing of equipment for hydrogen plants
Manufacturing of fuel cells
New energy vehicles
Driven by government support and policy incentives, China has already been the world’s largest NEV producer and consumer, hosting over 90 percent of global investment for both original equipment and components.
In 2021, China sold 3.52 million units of NEVs, up 181 percent from 2020 and exceeding the total sale of the previous three years. This growth trend of NEVs is expected to continue, with China striving to reduce carbon emissions in all fields and green consumption getting more recognition in the consumer market.
For foreign investors, the cap on the share ratio of foreign investment in NEV manufacturing was lifted as early as 2018. And as of January 1, 2022, the restriction that one foreign investor cannot establish more than two JVs in China to manufacture the same type of vehicles has been removed. Thus, China’s NEV sector is now completely open to foreign investors.
According to the 2020 version of the encouraged catalog, foreign investment is especially welcome for research and development (R&D) and manufacturing of key parts and components of NEVs, and the manufacturing of charging piles and charging piles for energy storage. For the former, the 2020 encouraged catalog has provided a very detailed breakdown of the key parts and components of NEVs that are encouraged for foreign investment, with parameter requirements of each industry specified.
NEV sectors that are encouraged for foreign investment:
Design and manufacturing of special production equipment for power batteries for automobiles
Production of charging columns and charging stations for energy storage
Design and manufacturing of special production equipment for power batteries for automobiles
The second part of this paper will focus on carbon capture and storage (CCUS), green services, recycling and energy storage.
This article first appeared in Asia Briefing, published by Dezan Shira Associates. The firm advises international investors in Asia and has offices in China, Hong Kong, Indonesia, Singapore, Russia and Vietnam.
Autoindustrie
Executive Moves
Florian Lampmann has taken on a management role in the Batteries and Drives division at Daimler China. The engineering graduate, who was educated in Nuremberg and Berlin, has been working for the German automaker since 2004. He has spent six years of that time at his current workplace in Beijing.
Gian-Luca Ratte has left his post as Project Manager for Bayer in Shanghai. He worked for the German chemical and pharmaceutical company in China for five years. He has been working for the company as Senior Project Manager in Leverkusen since June.
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Dessert
Botanical gardens do not have a long tradition in China. In fact, the first one only opened its doors in Beijing in April. Since last week, China’s second botanical garden has been open in Guangzhou. And the operators there are particularly proud of the giant water lily named after Queen Victoria. With a diameter of three meters, it can allegedly carry a weight of 70 kilos. Still, no one should try to sit on it. Because Victoria is considered very sensitive.
