Table.Briefing: China

Olympic sponsors – Chinese climate targets

  • Controversial Winter Olympics put sponsors in a bind
  • China’s consumers display sustainability
  • Fewer car sales in China
  • Semiconductor company plans massive expansion
  • Attacks on Chinese stores in the South Pacific
  • Virtual EU-China summit scheduled for spring
  • Eileen Gu experiences Chinese censorship first hand
  • Portrait: BDI board member sees change in China critically
Dear reader,

Major sporting events such as the soccer World Cup, the Super Bowl or the Olympic Games play an increasingly important role for the marketing of large corporations. So it’s no wonder that a sponsorship contract with the International Olympic Committee is causing popping champagne corks in PR departments

But the Winter Games in Beijing create an unexpected dilemma for large sponsors. Corporations are wondering: How to respond to harsh criticism of the host country, China? And how should the company position itself towards its production partners in Xinjiang or the diplomatic boycott by several governments? Ning Wang shows the dilemma the Olympic sponsors are in – and how they try to escape the situation unscathed, with absurd actions at times.

It is a complex picture that China represents when it comes to environmental protection. On the one hand, it is the world’s biggest climate offender, generates tons of radioactive nuclear waste with its myriad of reactors and burns mountains of dirty coal. On the other hand, Beijing has realized that China cannot avoid climate change. That’s why it wants to become a pioneer in climate protection.

In the future, companies are to offer their products and services in a climate-neutral, sustainable – in short, an eco-friendly manner. At least, that’s what the central government’s new climate protection plan envisions. Nico Beckert took a closer look at Beijing’s regulations and points out the problems that still need to be solved on the way to sustainable consumption. Otherwise, these promising plans will quickly turn out to be an eco-friendly mirage.

Your
Michael Radunski
Image of Michael  Radunski

Feature

Olympic sponsors in a bind

Originally a success for the companies: The chairmen of Coca-Cola and Mengniu announced their partnership with the IOC in June 2019.

US companies are once again some of the biggest Olympic sponsors of this year’s Winter Games in Beijing. Be it Coca-Cola, Procter & Gamble, Airbnb, Intel, or Visa – they are all among the 13 “TOP” partners of the world event. Partnering their company with one of the world’s biggest sporting events is a major success for PR executives.

After all, the Olympic Games are a no-brainer for companies: A huge stage on which the world’s top athletes set new records. Higher, faster, further! And millions of people are watching. And the brands are everywhere: On sports suits, equipment, food, drinks, and snacks.

But this time, PR departments had little reason for celebration. When the US government called for a diplomatic boycott just a few weeks before the start of the Winter Olympics, alarm bells started ringing at corporate headquarters. Nightly Zoom meetings and hours of phone calls were the result, as Mark DiMassimo recently told CNN.

The founder and creative director of the New York advertising agency DiGo explains that one question above all dominated hectic discussions: What does this diplomatic boycott mean for the sponsors? After all, no one wanted to see their products associated with “Genocide Olympics”. This is what voices from the US had called the Olympics in an attempt to draw attention to the situation of the Uyghurs in Xinjiang. The backdrop is the massive violation of human rights by the Chinese government in Xinjiang.

Not only US companies are affected. Olympic sponsors also include German insurer Allianz, Japanese automaker Toyota, and French technology consultancy Atos. Even the Swiss watch brand Omega is a sponsor. It has also recruited US-Chinese freestyle skier Eileen Gu as a brand ambassador (China.Table reported). Gu has already won a gold medal – and Omega was likely pleased. After all, Olympic champion is a title for life.

But outside the venues, sponsors are more skeptical this year. Many companies consider a media-effective presence in Beijing to be less lucrative this time. Increased attention in connection with the controversial Olympics could cause far too many problems. Political and social aspects overshadow any sporting aspects.

Sponsorship despite Olympic bubble and human rights violations

Coca-Cola’s situation illustrates the predicament in which companies find themselves this time around. Towers of shiny golden cans were erected throughout the country for the Winter Olympics – a special edition that the US manufacturer had specially designed for the Olympics in Beijing. However: These golden cans will only be on display in the supermarkets of the People’s Republic during the Olympics. This time, Coca-Cola prefers to do without any big marketing events like those for the 2008 Summer Games. Such events could be noticed in the US and Europe, after all. There won’t be any PR events on social media, either.

Another problem: Human rights organizations accuse corporations of “missing the opportunity” to denounce China for its “appalling human rights record”. “Businesses need to know that under the UN guiding principles on business and human rights, they have a responsibility to identify and mitigate human rights risks, and that helping [the] Chinese government’s reputation laundering is risking being complicit in those abuses,” said Wang Yaqiu, a senior researcher on China at Human Rights Watch back in November.

Coca-Cola’s main problem is called Mengniu. The Americans have signed a partnership with the Chinese dairy company. But Mengniu operates a bottling plant in the region of Xinjiang. And even if there is nothing fundamentally wrong with this, this connection alone could raise mistrust against Coca-Cola.

US chip manufacturer Intel surrendered in the face of mounting pressure: First, the company urged its suppliers not to use products manufactured in Xinjiang (China.Table reported). But this was followed by kowtowing to Beijing, when Intel again publicly apologized for this request. It was merely a matter of “complying with US laws,” Intel announced via the Chinese short message service Weibo in late December. One thing to note: Intel earns a quarter of its global revenue in the Chinese market.

The balancing act of sports and sponsorship

Stephan Woellenstein, who worked for Volkswagen in China for many years, most recently as VW China CEO, recently said in an interview with the German business weekly WirtschaftsWoche: “Basically, however, we believe that sport brings people of different backgrounds together and can promote dialogue between the countries and peoples of the world.”

In just a single sentence, it becomes clear how unreflective PR slogans are parroted, and even experienced corporate executives close their eyes to reality. Sport can no longer be considered to be outside the realm of values or morals. For example, top international soccer players have long since ceased to be mere athletes and instead have become role models for millions of young people. VW sponsors soccer because, according to Woellenstein, it is the “number one sport in many markets.”

When asked about the working conditions at VW’s Chinese plants in Xinjiang, Woellenstein emphasizes that the Group abides by the United Nations’ guiding principles on business & human rights. Major sports associations and clubs make things even easier for themselves, constantly referring to their non-political role and the uniting power of sport.

Insurance group Allianz, which recently became one of the International Olympic Committee’s (IOC) global sponsors, received approval last year to launch its own life insurance division in China (China.Table reported). But the price that companies like Allianz pay for access to the Chinese market and its consumers may be hefty. They risk alienating their Western customers.

Whether the equation – larger market = more customers – will work out, in the end, is uncertain. After all, not only Western customers are growing irritated. More and more Chinese consumers are also turning to domestic brands (China.Table reported). That is because the resources of Chinese propaganda, which the Communist Party uses to generate more and more nationalism in China, are probably greater than any sponsorship budget of foreign companies.

  • Civil Society
  • Human Rights
  • Sports
  • USA
  • Xinjiang

The green coating of China’s climate targets

Germany imports more clothing and textiles from China than from any other country in the world. Only the dumping prices of Chinese clothing and other Asian countries have made the mass consumption of cheap clothing possible in the West. So it seems slightly bizarre that Beijing is now urging its own citizens to buy clothing “sensibly and appropriately, in line with their actual needs”.

It seems as if Beijing has recognized that the throw-away mentality that is so common in the West and has long since arrived in the Middle Kingdom is not sustainable and clashes with the country’s own climate goals. The government has set itself ambitious-sounding goals. By 2025, the “market share of green and low-CO2 products is to increase significantly.” In addition, “extravagance and waste are to be effectively curbed“. By 2030, green and low-CO2 products are even to become “mainstream”. That is according to a new plan to promote green consumption. Planners have identified eight sectors in which sustainable consumption is to be strengthened:

  • Food – for example, by limiting food waste.
  • Clothing – by purchasing school uniforms with sustainability certificates
  • Housing – through the construction of sustainable residential buildings
  • Household products – by purchasing power-saving household appliances
  • Transportation and mobility – by promoting vehicles with alternative drive systems
  • Culture and tourism
  • Power
  • Public institutions – by promoting sustainable procurement

China’s consumers show sustainability

The call for green consumption could be met with approval among consumers in the Middle Kingdom. In a survey by management consultants PricewaterhouseCoopers, 72 percent of respondents stated that they “buy from companies that are conscious and supportive of protecting the environment”. Another 72 percent stated that they pay attention to sustainability certificates when consuming. However, such surveys should be taken with a pinch of salt.

Even in international comparison, at least the younger generation of Chinese performs well. According to a recent survey by the Credit Suisse Research Institute, more than 60 percent of the 1,000 Chinese surveyed stated that they have shifted their consumption to more eco-friendly products or exclusively buy such products. In Germany, the ratio was only just over 40 percent. A certain proportion of respondents will present their own behavior better than it actually is. The exciting thing about the Credit Suisse survey is that more than half of the Chinese respondents do not trust the sustainability promises made by companies. And there are indeed signs that this skepticism is entirely justified.

China’s businesses: a lot of green pretend

Chinese companies are increasingly presenting themselves as sustainable to the public. They are frequently using buzzwords such as “carbon neutrality,” “sustainability,” or “environmentally friendly” to promote their products and services. But when it comes to publishing their emissions and highlighting tangible progress, there is often only silence.

Until now, there have been few oversight bodies to monitor climate promises made by Chinese companies. “There is no national standard or mechanism to verify all the carbon-neutral claims made by companies, and the institutions that judge offset projects vary significantly,” Qin Yan, lead carbon analyst at Refinitiv, told Bloomberg. While there are media and independent organizations in Europe that critically analyze climate promises, “the Chinese way is top-down and it relies on administrative regulations.”

There are also major gaps in the sustainability reporting of Chinese companies. Many of the largest Chinese stock exchange-listed companies now publish a report with information on environmental, social, and governance topics (ESG). But in the past, only a fraction of these reports have been independently reviewed (China.Table reported).

Only 26 percent of the ESG reports of CSI 300 companies even include information on the greenhouse gas emissions emitted by the respective company. “Overall, ESG data disclosed by Chinese companies is still insufficient,” write Dezan-Shira’s business consultants. Even a recent reform of reporting is hardly sufficient, as it does not cover all (listed) companies (China.Table reported).

Beijing wants to improve green consumption certificates

Beijing seems to have recognized these problems. It plans to expand the standards, certification, and labeling systems for sustainable products and services and bring them into line with international standards. Standards for power saving are also to be improved. In addition, the government wants to develop standards for greenhouse gas emissions for key industries and products. For “key products,” the government also wants to assess the introduction of carbon footprint standards.

Overall, the plans to promote green consumption still remain rather vague. “The plan is more of a call to action than a formula for solving the problems at hand,” say experts at consulting agency Trivium China. The big challenge with green consumption, they say, is making people aware of the benefits.

For EVs, the government had been relying on financial incentives and tax breaks for consumers. But that was hardly feasible for other consumer goods. “The government needs to find ways to incentivize consumers without giving billions of renminbi to each consumer segment,” the consultants assessed.

  • Climate
  • Environment
  • Sustainability

News

Fewer cars sold in China

Only 2.1 million cars were sold in China in January. This corresponds to a decline of 4.5 percent compared to the previous month. That is according to data published by the China Passenger Car Association on Monday. The decline was caused by factory closures caused by the Covid policy and the holidays around Chinese New Year, the association said.

However, there was also positive news for the industry: For example, sales of cars with alternative drives more than doubled – to 347,000 vehicles. The US manufacturer Tesla, with its new factory in Shanghai, was the market leader in January. Of the 60,000 vehicles sold, around 40,000 were exported overseas. rad

  • Autoindustrie

Chip shortage: SMIC wants to double production

Chinese semiconductor manufacturer SMIC plans to double production of microchips over the next three years, company CEO Zhao Haijun told investors on Friday. This will make China somewhat less dependent on imports and simultaneously relieve the pressure on the market as a whole. To this end, sites in Beijing, Shanghai, and Shenzhen are to be greatly expanded. The aim is to build up a “regional supply chain”.

Zhao was also asked about potential overcapacity in the cyclical semiconductor industry if all suppliers expand their capacity at the same time due to acute shortages. Zhao responded that SMIC has only a six percent market share. Demand in China would exceed supply for the foreseeable future. fin

  • Chips
  • Semiconductor
  • Technology

Solomon Islands: violence against Chinese

Three years after the opening of diplomatic ties with the People’s Republic of China, new violence has broken out against Chinese citizens in the South Pacific Solomon Islands. In the capital Honiara, a building was set on fire and destroyed over the weekend. One person was slightly injured. The first signs of violence occurred three months ago, when numerous stores and buildings with Chinese ownership were set on fire by violent demonstrators during protests.

The background to the escalation are allegations of corruption against Prime Minister Manasseh Sogavare. He is accused of influencing members of parliament with monetary donations. The money comes from a national development fund financed by China.

A group called Malaita for Democracy had called for the protests in November last year. It is based in the province of Malaita, a half-hour flight from the capital Honiara. The group is a pro-Taiwan coalition of local politicians that had spoken out against the “switch”. This refers to the termination of diplomatic relations with Taiwan and the simultaneous establishment of diplomatic ties with Beijing in 2019.

The Solomon Islands are an island nation with 680,000 citizens in the South Pacific, east of Papua New Guinea. The region is gaining increasing geostrategic importance due to the power struggle between the US and China. After the “switch,” the US government also recently announced its intention to intensify relations with the Solomon Islands. grz

  • Geopolitics
  • Taiwan
  • USA

EU-China Summit in April

After several delays, an EU-China summit is scheduled for early April. EU Commission President Ursula von der Leyen, EU Council President Charles Michel as well as China’s President Xi Jinping and Premier Li Keqiang are to meet virtually on April 1, as several EU sources told China.Table. The summit was delayed many times since last year (China.Table reported). A face-to-face meeting has also not been ruled out so far. The last EU-China summit also only took place virtually in June 2020. ari

  • EU
  • Geopolitics
  • Xi Jinping

Olympia Ticker – gold and a new controversy for Eileen Gu

Xu Mengtao bei einer Schraube hoch über dem Flutlicht in Peking
Somersault over the floodlights: China’s Xu Mengtao on her flight to gold

Monday was an Olympic day with relatively few medals. But one of them went to China in women’s aerials. Meanwhile, social media voiced frustration about Chinese-American freestyle star Eileen Gu and her privileges.

  • Xu Mengtao yelled her joy into the trickling snow for several minutes. The 31-year-old took gold in ski freestyle aerials with a jump with three somersaults. In freestyle aerials, athletes launch themselves into the air from an almost vertical ramp. It is Xu’s biggest success of her career. She won silver in Sochi in 2014. On Thursday, she was already close to victory. In the mixed competition, only the fall of a teammate prevented a Chinese victory. In the end, it was silver.
  • China achieved a respectable result at the Olympic premiere of the women’s monobob event: The clear victory of world champion Kaillie Humphries from the USA was followed by two Chinese women in the top ten: Huai Mingming in sixth and Ying Qing in ninth. The best German was Laura Nolte in a very unfortunate fourth place.
  • In the ski slopestyle qualification, which was postponed to Monday, China’s superstar Eileen Gu struggled after the first run. But thanks to a strong second run, the 18-year-old ended up third and moved into the final round. While waiting for her result in the finish area, the 18-year-old treated herself to a filled dumpling. However, off the track, the American-Chinese athlete, with a still unclear citizenship (China.Table reported), is attracting more and more political controversy. Most recently, she even came under fire from Chinese fans. A user had asked her on Instagram to comment on Internet censorship. The criticism was that she was privileged and, unlike most normal citizens in the People’s Republic, could browse the Internet freely. Gu replied tersely that anyone could download a VPN tunnel. Once again, she dodged an unpleasant debate. This time, however, criticism also poured in on the Chinese platform Weibo. And in the end, the censors intervened: The screenshots of Gu’s insensitive Instagram post that angry users had on Weibo were deleted. It remains to be seen whether this incident will raise Eileen Gu’s awareness. ck
  • Sports

Profile

Wolfgang Niedermark – ‘nationalistic tones have poisoned the atmosphere’

CS22 Wolfgang Niedermark
Wolfgang Niedermark – Member of the Executive Board of the Federation of German Industries (BDI)

When Wolfgang Niedermark speaks about China, regret echoes in his voice. Since October 2020, the 56-year-old German has been a member of the Executive Board of the Federation of German Industries (BDI). In both his professional and private life, he has witnessed China’s economic prowess, cultural diversity, and social dynamism on the ground over many years. “Since I had many positive experiences with the Chinese people,” he says, “I’m driven to the side of those who want to cooperate with China full of sympathy and with good spirits.”

On the other hand, and this is the big “but,” the nationalistic course of the Communist Party harmed so many things that it is difficult to maintain this positive attitude. “The totalitarian course under Xi Jinping is causing great concern for us, as it does for many others.”

Asia already had its hooks in Niedermark while he was studying economic geography at the University of Muenster. He was particularly fascinated by India, which he backpacked across as a student. In India, he had gotten engaged to his wife, and the couple later “dragged” their children along on their travels through Southeast Asia. They are a “Pacific family,” he says, and have lived in Seoul and Hong Kong and felt very much at home there.

Originally, Niedermark wanted to work primarily in India, but he found that there was ultimately more momentum in China. From 1998, he headed the business of the East Asian Association in Hamburg and was also a member of the executive board of the Asia-Pacific Committee of German Business.

The entrenchment ‘is not so much the fault of us in the West’

He first came into closer contact with China and its people in 2003, when he helped set up the magazine business for what is now the Bauer Media Group in Asia. “That was a fascinating experience,” he says. “The Chinese at that time had an incredible enthusiasm for our topics from the West, a desire and mutual curiosity.” Niedermark felt the same way. He made the same experience during the three-year campaign “Germany and China: Moving Ahead Together” for the Expo 2010 in Shanghai.

In 2016, Niedermark took over as head of the Chamber of Foreign Trade in Hong Kong after leading the Berlin office at BASF AG for several years. Hong Kong has long been a place of longing: “I like places where East and West flow together.” But after moving there with his wife and two sons, he witnessed firsthand how the principle of “one country, two systems” was abolished.

An anecdote serves as an example: In his first year in Hong Kong, polite traffic policemen would have almost apologized for giving him a fine. Four years later, he was waved out by a policeman, even though he had committed no apparent traffic violation. “They called me a smug foreigner.” That, he said, is just one of many stories of how nationalistic tones have poisoned the atmosphere in China.

This entrenchment is also reflected in political relations: “This is not so much the fault of us in the West, but because China presents itself differently today,” says Niedermark. This has already been noticeable for several years. But Germany, and, in fact, the entire West, has not yet found a clear answer to the question of how to deal with the situation. “We are in an interim phase in which the old relationships are still functioning reasonably well, but new forms of interaction and cooperation have not yet been born.” This phase of misunderstandings and mistrust is something we now have to get through, Niedermark says, before hopefully regaining constructive cooperation. Adrian Meyer

  • China Strategy 2022
  • Hongkong
  • Industry
  • Trade

Executive Moves

Cathryn Clüver Ashbrook, former director and CEO of the German Council on Foreign Relations (DGAP), left the organization on Monday with immediate effect. According to Clüver Ashbrook, the reason for her departure is a disagreement over the future strategic focus of the DGAP. Clüver Ashbrook had taken over as head of the DGAP only last year. Before that, she spent more than a decade at Harvard University as executive director of two major research programs: the “Future of Diplomacy Project” and the “Project on Europe and the Transatlantic Relationship”.

Dessert

Away from the Olympics, a much more important festival is taking place in China this Tuesday: the Lantern Festival, or Yuanxiao Festival (元宵节, Yuánxiāojié). On this day, huge lantern shows are held, with zodiac signs being especially popular. And so this year, children in Wenzhou are making tiger lanterns. It is the closing of the New Year festival in China, which lasts several days.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    • Controversial Winter Olympics put sponsors in a bind
    • China’s consumers display sustainability
    • Fewer car sales in China
    • Semiconductor company plans massive expansion
    • Attacks on Chinese stores in the South Pacific
    • Virtual EU-China summit scheduled for spring
    • Eileen Gu experiences Chinese censorship first hand
    • Portrait: BDI board member sees change in China critically
    Dear reader,

    Major sporting events such as the soccer World Cup, the Super Bowl or the Olympic Games play an increasingly important role for the marketing of large corporations. So it’s no wonder that a sponsorship contract with the International Olympic Committee is causing popping champagne corks in PR departments

    But the Winter Games in Beijing create an unexpected dilemma for large sponsors. Corporations are wondering: How to respond to harsh criticism of the host country, China? And how should the company position itself towards its production partners in Xinjiang or the diplomatic boycott by several governments? Ning Wang shows the dilemma the Olympic sponsors are in – and how they try to escape the situation unscathed, with absurd actions at times.

    It is a complex picture that China represents when it comes to environmental protection. On the one hand, it is the world’s biggest climate offender, generates tons of radioactive nuclear waste with its myriad of reactors and burns mountains of dirty coal. On the other hand, Beijing has realized that China cannot avoid climate change. That’s why it wants to become a pioneer in climate protection.

    In the future, companies are to offer their products and services in a climate-neutral, sustainable – in short, an eco-friendly manner. At least, that’s what the central government’s new climate protection plan envisions. Nico Beckert took a closer look at Beijing’s regulations and points out the problems that still need to be solved on the way to sustainable consumption. Otherwise, these promising plans will quickly turn out to be an eco-friendly mirage.

    Your
    Michael Radunski
    Image of Michael  Radunski

    Feature

    Olympic sponsors in a bind

    Originally a success for the companies: The chairmen of Coca-Cola and Mengniu announced their partnership with the IOC in June 2019.

    US companies are once again some of the biggest Olympic sponsors of this year’s Winter Games in Beijing. Be it Coca-Cola, Procter & Gamble, Airbnb, Intel, or Visa – they are all among the 13 “TOP” partners of the world event. Partnering their company with one of the world’s biggest sporting events is a major success for PR executives.

    After all, the Olympic Games are a no-brainer for companies: A huge stage on which the world’s top athletes set new records. Higher, faster, further! And millions of people are watching. And the brands are everywhere: On sports suits, equipment, food, drinks, and snacks.

    But this time, PR departments had little reason for celebration. When the US government called for a diplomatic boycott just a few weeks before the start of the Winter Olympics, alarm bells started ringing at corporate headquarters. Nightly Zoom meetings and hours of phone calls were the result, as Mark DiMassimo recently told CNN.

    The founder and creative director of the New York advertising agency DiGo explains that one question above all dominated hectic discussions: What does this diplomatic boycott mean for the sponsors? After all, no one wanted to see their products associated with “Genocide Olympics”. This is what voices from the US had called the Olympics in an attempt to draw attention to the situation of the Uyghurs in Xinjiang. The backdrop is the massive violation of human rights by the Chinese government in Xinjiang.

    Not only US companies are affected. Olympic sponsors also include German insurer Allianz, Japanese automaker Toyota, and French technology consultancy Atos. Even the Swiss watch brand Omega is a sponsor. It has also recruited US-Chinese freestyle skier Eileen Gu as a brand ambassador (China.Table reported). Gu has already won a gold medal – and Omega was likely pleased. After all, Olympic champion is a title for life.

    But outside the venues, sponsors are more skeptical this year. Many companies consider a media-effective presence in Beijing to be less lucrative this time. Increased attention in connection with the controversial Olympics could cause far too many problems. Political and social aspects overshadow any sporting aspects.

    Sponsorship despite Olympic bubble and human rights violations

    Coca-Cola’s situation illustrates the predicament in which companies find themselves this time around. Towers of shiny golden cans were erected throughout the country for the Winter Olympics – a special edition that the US manufacturer had specially designed for the Olympics in Beijing. However: These golden cans will only be on display in the supermarkets of the People’s Republic during the Olympics. This time, Coca-Cola prefers to do without any big marketing events like those for the 2008 Summer Games. Such events could be noticed in the US and Europe, after all. There won’t be any PR events on social media, either.

    Another problem: Human rights organizations accuse corporations of “missing the opportunity” to denounce China for its “appalling human rights record”. “Businesses need to know that under the UN guiding principles on business and human rights, they have a responsibility to identify and mitigate human rights risks, and that helping [the] Chinese government’s reputation laundering is risking being complicit in those abuses,” said Wang Yaqiu, a senior researcher on China at Human Rights Watch back in November.

    Coca-Cola’s main problem is called Mengniu. The Americans have signed a partnership with the Chinese dairy company. But Mengniu operates a bottling plant in the region of Xinjiang. And even if there is nothing fundamentally wrong with this, this connection alone could raise mistrust against Coca-Cola.

    US chip manufacturer Intel surrendered in the face of mounting pressure: First, the company urged its suppliers not to use products manufactured in Xinjiang (China.Table reported). But this was followed by kowtowing to Beijing, when Intel again publicly apologized for this request. It was merely a matter of “complying with US laws,” Intel announced via the Chinese short message service Weibo in late December. One thing to note: Intel earns a quarter of its global revenue in the Chinese market.

    The balancing act of sports and sponsorship

    Stephan Woellenstein, who worked for Volkswagen in China for many years, most recently as VW China CEO, recently said in an interview with the German business weekly WirtschaftsWoche: “Basically, however, we believe that sport brings people of different backgrounds together and can promote dialogue between the countries and peoples of the world.”

    In just a single sentence, it becomes clear how unreflective PR slogans are parroted, and even experienced corporate executives close their eyes to reality. Sport can no longer be considered to be outside the realm of values or morals. For example, top international soccer players have long since ceased to be mere athletes and instead have become role models for millions of young people. VW sponsors soccer because, according to Woellenstein, it is the “number one sport in many markets.”

    When asked about the working conditions at VW’s Chinese plants in Xinjiang, Woellenstein emphasizes that the Group abides by the United Nations’ guiding principles on business & human rights. Major sports associations and clubs make things even easier for themselves, constantly referring to their non-political role and the uniting power of sport.

    Insurance group Allianz, which recently became one of the International Olympic Committee’s (IOC) global sponsors, received approval last year to launch its own life insurance division in China (China.Table reported). But the price that companies like Allianz pay for access to the Chinese market and its consumers may be hefty. They risk alienating their Western customers.

    Whether the equation – larger market = more customers – will work out, in the end, is uncertain. After all, not only Western customers are growing irritated. More and more Chinese consumers are also turning to domestic brands (China.Table reported). That is because the resources of Chinese propaganda, which the Communist Party uses to generate more and more nationalism in China, are probably greater than any sponsorship budget of foreign companies.

    • Civil Society
    • Human Rights
    • Sports
    • USA
    • Xinjiang

    The green coating of China’s climate targets

    Germany imports more clothing and textiles from China than from any other country in the world. Only the dumping prices of Chinese clothing and other Asian countries have made the mass consumption of cheap clothing possible in the West. So it seems slightly bizarre that Beijing is now urging its own citizens to buy clothing “sensibly and appropriately, in line with their actual needs”.

    It seems as if Beijing has recognized that the throw-away mentality that is so common in the West and has long since arrived in the Middle Kingdom is not sustainable and clashes with the country’s own climate goals. The government has set itself ambitious-sounding goals. By 2025, the “market share of green and low-CO2 products is to increase significantly.” In addition, “extravagance and waste are to be effectively curbed“. By 2030, green and low-CO2 products are even to become “mainstream”. That is according to a new plan to promote green consumption. Planners have identified eight sectors in which sustainable consumption is to be strengthened:

    • Food – for example, by limiting food waste.
    • Clothing – by purchasing school uniforms with sustainability certificates
    • Housing – through the construction of sustainable residential buildings
    • Household products – by purchasing power-saving household appliances
    • Transportation and mobility – by promoting vehicles with alternative drive systems
    • Culture and tourism
    • Power
    • Public institutions – by promoting sustainable procurement

    China’s consumers show sustainability

    The call for green consumption could be met with approval among consumers in the Middle Kingdom. In a survey by management consultants PricewaterhouseCoopers, 72 percent of respondents stated that they “buy from companies that are conscious and supportive of protecting the environment”. Another 72 percent stated that they pay attention to sustainability certificates when consuming. However, such surveys should be taken with a pinch of salt.

    Even in international comparison, at least the younger generation of Chinese performs well. According to a recent survey by the Credit Suisse Research Institute, more than 60 percent of the 1,000 Chinese surveyed stated that they have shifted their consumption to more eco-friendly products or exclusively buy such products. In Germany, the ratio was only just over 40 percent. A certain proportion of respondents will present their own behavior better than it actually is. The exciting thing about the Credit Suisse survey is that more than half of the Chinese respondents do not trust the sustainability promises made by companies. And there are indeed signs that this skepticism is entirely justified.

    China’s businesses: a lot of green pretend

    Chinese companies are increasingly presenting themselves as sustainable to the public. They are frequently using buzzwords such as “carbon neutrality,” “sustainability,” or “environmentally friendly” to promote their products and services. But when it comes to publishing their emissions and highlighting tangible progress, there is often only silence.

    Until now, there have been few oversight bodies to monitor climate promises made by Chinese companies. “There is no national standard or mechanism to verify all the carbon-neutral claims made by companies, and the institutions that judge offset projects vary significantly,” Qin Yan, lead carbon analyst at Refinitiv, told Bloomberg. While there are media and independent organizations in Europe that critically analyze climate promises, “the Chinese way is top-down and it relies on administrative regulations.”

    There are also major gaps in the sustainability reporting of Chinese companies. Many of the largest Chinese stock exchange-listed companies now publish a report with information on environmental, social, and governance topics (ESG). But in the past, only a fraction of these reports have been independently reviewed (China.Table reported).

    Only 26 percent of the ESG reports of CSI 300 companies even include information on the greenhouse gas emissions emitted by the respective company. “Overall, ESG data disclosed by Chinese companies is still insufficient,” write Dezan-Shira’s business consultants. Even a recent reform of reporting is hardly sufficient, as it does not cover all (listed) companies (China.Table reported).

    Beijing wants to improve green consumption certificates

    Beijing seems to have recognized these problems. It plans to expand the standards, certification, and labeling systems for sustainable products and services and bring them into line with international standards. Standards for power saving are also to be improved. In addition, the government wants to develop standards for greenhouse gas emissions for key industries and products. For “key products,” the government also wants to assess the introduction of carbon footprint standards.

    Overall, the plans to promote green consumption still remain rather vague. “The plan is more of a call to action than a formula for solving the problems at hand,” say experts at consulting agency Trivium China. The big challenge with green consumption, they say, is making people aware of the benefits.

    For EVs, the government had been relying on financial incentives and tax breaks for consumers. But that was hardly feasible for other consumer goods. “The government needs to find ways to incentivize consumers without giving billions of renminbi to each consumer segment,” the consultants assessed.

    • Climate
    • Environment
    • Sustainability

    News

    Fewer cars sold in China

    Only 2.1 million cars were sold in China in January. This corresponds to a decline of 4.5 percent compared to the previous month. That is according to data published by the China Passenger Car Association on Monday. The decline was caused by factory closures caused by the Covid policy and the holidays around Chinese New Year, the association said.

    However, there was also positive news for the industry: For example, sales of cars with alternative drives more than doubled – to 347,000 vehicles. The US manufacturer Tesla, with its new factory in Shanghai, was the market leader in January. Of the 60,000 vehicles sold, around 40,000 were exported overseas. rad

    • Autoindustrie

    Chip shortage: SMIC wants to double production

    Chinese semiconductor manufacturer SMIC plans to double production of microchips over the next three years, company CEO Zhao Haijun told investors on Friday. This will make China somewhat less dependent on imports and simultaneously relieve the pressure on the market as a whole. To this end, sites in Beijing, Shanghai, and Shenzhen are to be greatly expanded. The aim is to build up a “regional supply chain”.

    Zhao was also asked about potential overcapacity in the cyclical semiconductor industry if all suppliers expand their capacity at the same time due to acute shortages. Zhao responded that SMIC has only a six percent market share. Demand in China would exceed supply for the foreseeable future. fin

    • Chips
    • Semiconductor
    • Technology

    Solomon Islands: violence against Chinese

    Three years after the opening of diplomatic ties with the People’s Republic of China, new violence has broken out against Chinese citizens in the South Pacific Solomon Islands. In the capital Honiara, a building was set on fire and destroyed over the weekend. One person was slightly injured. The first signs of violence occurred three months ago, when numerous stores and buildings with Chinese ownership were set on fire by violent demonstrators during protests.

    The background to the escalation are allegations of corruption against Prime Minister Manasseh Sogavare. He is accused of influencing members of parliament with monetary donations. The money comes from a national development fund financed by China.

    A group called Malaita for Democracy had called for the protests in November last year. It is based in the province of Malaita, a half-hour flight from the capital Honiara. The group is a pro-Taiwan coalition of local politicians that had spoken out against the “switch”. This refers to the termination of diplomatic relations with Taiwan and the simultaneous establishment of diplomatic ties with Beijing in 2019.

    The Solomon Islands are an island nation with 680,000 citizens in the South Pacific, east of Papua New Guinea. The region is gaining increasing geostrategic importance due to the power struggle between the US and China. After the “switch,” the US government also recently announced its intention to intensify relations with the Solomon Islands. grz

    • Geopolitics
    • Taiwan
    • USA

    EU-China Summit in April

    After several delays, an EU-China summit is scheduled for early April. EU Commission President Ursula von der Leyen, EU Council President Charles Michel as well as China’s President Xi Jinping and Premier Li Keqiang are to meet virtually on April 1, as several EU sources told China.Table. The summit was delayed many times since last year (China.Table reported). A face-to-face meeting has also not been ruled out so far. The last EU-China summit also only took place virtually in June 2020. ari

    • EU
    • Geopolitics
    • Xi Jinping

    Olympia Ticker – gold and a new controversy for Eileen Gu

    Xu Mengtao bei einer Schraube hoch über dem Flutlicht in Peking
    Somersault over the floodlights: China’s Xu Mengtao on her flight to gold

    Monday was an Olympic day with relatively few medals. But one of them went to China in women’s aerials. Meanwhile, social media voiced frustration about Chinese-American freestyle star Eileen Gu and her privileges.

    • Xu Mengtao yelled her joy into the trickling snow for several minutes. The 31-year-old took gold in ski freestyle aerials with a jump with three somersaults. In freestyle aerials, athletes launch themselves into the air from an almost vertical ramp. It is Xu’s biggest success of her career. She won silver in Sochi in 2014. On Thursday, she was already close to victory. In the mixed competition, only the fall of a teammate prevented a Chinese victory. In the end, it was silver.
    • China achieved a respectable result at the Olympic premiere of the women’s monobob event: The clear victory of world champion Kaillie Humphries from the USA was followed by two Chinese women in the top ten: Huai Mingming in sixth and Ying Qing in ninth. The best German was Laura Nolte in a very unfortunate fourth place.
    • In the ski slopestyle qualification, which was postponed to Monday, China’s superstar Eileen Gu struggled after the first run. But thanks to a strong second run, the 18-year-old ended up third and moved into the final round. While waiting for her result in the finish area, the 18-year-old treated herself to a filled dumpling. However, off the track, the American-Chinese athlete, with a still unclear citizenship (China.Table reported), is attracting more and more political controversy. Most recently, she even came under fire from Chinese fans. A user had asked her on Instagram to comment on Internet censorship. The criticism was that she was privileged and, unlike most normal citizens in the People’s Republic, could browse the Internet freely. Gu replied tersely that anyone could download a VPN tunnel. Once again, she dodged an unpleasant debate. This time, however, criticism also poured in on the Chinese platform Weibo. And in the end, the censors intervened: The screenshots of Gu’s insensitive Instagram post that angry users had on Weibo were deleted. It remains to be seen whether this incident will raise Eileen Gu’s awareness. ck
    • Sports

    Profile

    Wolfgang Niedermark – ‘nationalistic tones have poisoned the atmosphere’

    CS22 Wolfgang Niedermark
    Wolfgang Niedermark – Member of the Executive Board of the Federation of German Industries (BDI)

    When Wolfgang Niedermark speaks about China, regret echoes in his voice. Since October 2020, the 56-year-old German has been a member of the Executive Board of the Federation of German Industries (BDI). In both his professional and private life, he has witnessed China’s economic prowess, cultural diversity, and social dynamism on the ground over many years. “Since I had many positive experiences with the Chinese people,” he says, “I’m driven to the side of those who want to cooperate with China full of sympathy and with good spirits.”

    On the other hand, and this is the big “but,” the nationalistic course of the Communist Party harmed so many things that it is difficult to maintain this positive attitude. “The totalitarian course under Xi Jinping is causing great concern for us, as it does for many others.”

    Asia already had its hooks in Niedermark while he was studying economic geography at the University of Muenster. He was particularly fascinated by India, which he backpacked across as a student. In India, he had gotten engaged to his wife, and the couple later “dragged” their children along on their travels through Southeast Asia. They are a “Pacific family,” he says, and have lived in Seoul and Hong Kong and felt very much at home there.

    Originally, Niedermark wanted to work primarily in India, but he found that there was ultimately more momentum in China. From 1998, he headed the business of the East Asian Association in Hamburg and was also a member of the executive board of the Asia-Pacific Committee of German Business.

    The entrenchment ‘is not so much the fault of us in the West’

    He first came into closer contact with China and its people in 2003, when he helped set up the magazine business for what is now the Bauer Media Group in Asia. “That was a fascinating experience,” he says. “The Chinese at that time had an incredible enthusiasm for our topics from the West, a desire and mutual curiosity.” Niedermark felt the same way. He made the same experience during the three-year campaign “Germany and China: Moving Ahead Together” for the Expo 2010 in Shanghai.

    In 2016, Niedermark took over as head of the Chamber of Foreign Trade in Hong Kong after leading the Berlin office at BASF AG for several years. Hong Kong has long been a place of longing: “I like places where East and West flow together.” But after moving there with his wife and two sons, he witnessed firsthand how the principle of “one country, two systems” was abolished.

    An anecdote serves as an example: In his first year in Hong Kong, polite traffic policemen would have almost apologized for giving him a fine. Four years later, he was waved out by a policeman, even though he had committed no apparent traffic violation. “They called me a smug foreigner.” That, he said, is just one of many stories of how nationalistic tones have poisoned the atmosphere in China.

    This entrenchment is also reflected in political relations: “This is not so much the fault of us in the West, but because China presents itself differently today,” says Niedermark. This has already been noticeable for several years. But Germany, and, in fact, the entire West, has not yet found a clear answer to the question of how to deal with the situation. “We are in an interim phase in which the old relationships are still functioning reasonably well, but new forms of interaction and cooperation have not yet been born.” This phase of misunderstandings and mistrust is something we now have to get through, Niedermark says, before hopefully regaining constructive cooperation. Adrian Meyer

    • China Strategy 2022
    • Hongkong
    • Industry
    • Trade

    Executive Moves

    Cathryn Clüver Ashbrook, former director and CEO of the German Council on Foreign Relations (DGAP), left the organization on Monday with immediate effect. According to Clüver Ashbrook, the reason for her departure is a disagreement over the future strategic focus of the DGAP. Clüver Ashbrook had taken over as head of the DGAP only last year. Before that, she spent more than a decade at Harvard University as executive director of two major research programs: the “Future of Diplomacy Project” and the “Project on Europe and the Transatlantic Relationship”.

    Dessert

    Away from the Olympics, a much more important festival is taking place in China this Tuesday: the Lantern Festival, or Yuanxiao Festival (元宵节, Yuánxiāojié). On this day, huge lantern shows are held, with zodiac signs being especially popular. And so this year, children in Wenzhou are making tiger lanterns. It is the closing of the New Year festival in China, which lasts several days.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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