The countdown is on. Next Monday, Donald Trump moves into the White House and it seems as if the world is holding its breath. No one can seriously predict whether and how the world will change in the next four years.
The relationship between China and the USA is just one aspect that receives special attention at our China.Table. Jörn Petring has ventured a look into the future and tried to put together individual pieces of the puzzle. However, because many gaps in the big picture cannot be filled, much remains speculation.
There are some indications that an escalation – especially of economic relations – is inevitable, and could nevertheless provide the basis for both superpowers to find compromises. The extent to which this also applies to the status of the island republic of Taiwan is one of the great unknowns.
Andreas Landwehr has looked at UN Resolution 2758 and how it is interpreted in completely different ways by different sides. China has to put up with the accusation that its interpretation of the 1971 resolution has weaknesses of its own making. Nevertheless, Beijing is unlikely to deviate from it even one iota.
Here, too, Trump’s role may bring decisive changes in the coming years. In whose favor, in whose interest? Who can seriously predict that?
The foreign chambers of commerce in Beijing currently have a difficult job. There is a great deal of uncertainty among some of the member companies. They are wondering how the arrival of Donald Trump in the White House next Monday will affect Sino-American relations. Of course, the chambers do not have a crystal ball. So how can they make a prediction? The only thing that is clear is that the many unanswered questions are causing great concern that business will develop badly.
“The trade conflict between the US and China is set to intensify,” Oliver Oehms, Managing Director of the German Chamber of Commerce in North China, told Table.Briefings. However, it is not yet possible to predict what exactly the measures of the new US administration will look like and what priority they will be given.
“The unpredictability of a potentially escalating trade conflict has an immediate paralyzing effect on business decisions and investments,” says Oehms. Jens Eskelund, President of the EU Chamber of Commerce in China, comes to a similar conclusion. “It is truly unique that we find ourselves in a situation where so much is a guessing game,” says the Chamber President.
Many observers believe it is at least likely that Donald Trump will carry out a threat he made back in December at the start of his term of office. At that time, Trump said that he would impose general additional tariffs of ten percent on all imports from China on his first day in office because Beijing was not stemming the continuing flood of the drug fentanyl from its latitudes to the USA.
Even a flat tariff of ten percent would be a burden on trade between the two largest economies. If this happens, however, there is a high probability that an even more dangerous spiral of tariffs will be set in motion. This already happened during Trump’s first term in office.
Trump initiated the conflict in 2018 by imposing high punitive tariffs on Chinese imports, which led to a series of countermeasures by China. This phase marked the beginning of a full-blown trade war between the world’s two largest economies.
Beijing is likely to respond with counter-tariffs this time too. However, due to the large Chinese trade surplus, it is clear that they will not be able to respond with the same force. As in Trade War 1.0, agricultural products could once again be the focus. However, China seems ready to expand its toolbox.
Beijing reacted more sharply than usual to the Biden administration’s latest restriction measures in order to send a warning to Trump. An export ban imposed on some metals in this context shows that Beijing could be toying with the idea of cutting Washington off from rare earths on a larger scale.
The investigation into the chip company Nvidia, which was launched at the beginning of December, also makes it clear that US companies operating in China will have to brace themselves for more pressure. The extent to which the conflict could escalate is completely open. After all, Trump’s team brought blanket tariffs of up to 60 percent into play during the election campaign. However, most economists do not believe that such a high figure is feasible.
The course Trump takes will probably also depend on who can make themselves heard in his team. After all, opinions there seem to differ. Trump’s nominee for Trade Representative Jamieson Greer is of the opinion that decoupling from China must go ahead, whatever the cost. There is also growing interest in the US Congress in ending China’s current status of “Permanent Normal Trade Relations” (PNTR), i.e. ending normal trade relations. Greer supports this step.
Trump’s candidate for Secretary of the Treasury holds more moderate views. Scott Bessent wants to use the tariffs as important leverage. Ultimately, however, he is aiming for some kind of deal with China. What is often forgotten: Trump took exactly the same approach in the first trade dispute. After a period of escalating tariffs, both sides agreed on the so-called phase-one trade agreement. At the time, Trump praised the “historic” agreement as “making up for past mistakes”.
Trump was visibly proud that China agreed to buy at least 200 billion US dollars worth of goods and services from the USA over a two-year period. Although China kept some of its commitments, it ultimately fell well short of its purchase targets. This was also due to the outbreak of the COVID pandemic.
Six years later, the challenges for a new trade agreement have become much greater, according to Wendy Cutler, Vice President of the Asia Society Policy Institute (ASPI), in an article for Foreign Policy. Both sides have expanded trade and technology restrictions and taken steps to reduce their interdependence. Beijing has also further strengthened the state’s influence on the economy through massive subsidies and an expansion of state-owned enterprises.
“Trump, however, sees himself as a dealmaker,” says Cutler. A phase two agreement could therefore not be ruled out. Especially as China could conclude in view of its own economic challenges that an agreement with the USA – even with unconventional provisions – is better than jeopardizing the remaining trade volume of USD 600 billion.
What an agreement might look like and what might satisfy Washington is unclear. However, if it does come about, something could even happen that companies are currently hardly considering in their planning. Instead of ever-higher tariffs, trade barriers could be gradually reduced.
There is no doubt that tariffs will come first in Trump’s second term, says Cutler. “A phase two trade agreement – as difficult as it may be – could still be possible.”
China is laying the legal foundations for the seizure of Taiwan by force. In order to underpin its claim to power over the democratic island republic, Beijing is pushing ahead with a campaign in the United Nations and in its diplomatic relations with other countries.
It uses a highly controversial interpretation of UN Resolution 2758, which recognized the communist leadership as China’s representative in the United Nations in 1971. From Beijing’s point of view, this confirms its claim to power, even though Taiwan is not even mentioned in it.
“Beijing is manipulating international law in areas that have very serious consequences for global peace and prosperity,” warned Luke De Pulford, Executive Director of the Inter-Parliamentary Association on China (IPAC). Dutch MP Jan Maarten Paternotte takes a similar view: “The Chinese regime is using its enormous political and economic clout to force other countries to accept its own flawed interpretation.”
In a loose network of parliamentarians, politicians are taking a stand against Beijing’s stubborn interpretation of the UN resolution via “Initiative 2758”. The communist leadership argues that the 1971 UN General Assembly resolution confirms its “one-China principle”. According to this, Taiwan is an “inseparable part” of the People’s Republic. However, the European Parliament and the parliaments of other countries such as the USA, Australia, Canada, the Netherlands and most recently the UK have already adopted resolutions rejecting China’s “distorted” interpretation.
In October, the EU Parliament firmly condemned China’s attempts to “distort history and international rules”. Taiwan had never been part of the People’s Republic of China. The “Republic of China”, as Taiwan is still officially called today, was founded in 1912, while the People’s Republic has only existed since 1949. The UN resolution “does not establish that the People’s Republic of China enjoys sovereignty over Taiwan“. The EU Parliament’s resolution also opposes the exclusion of Taiwan from international organizations – under pressure from China. In fact, Taiwan is not mentioned at all in UN Resolution 2758. The political status of the island is also not mentioned – and certainly not that Beijing would somehow exercise sovereignty over Taiwan.
The UN resolution, which was already somewhat sloppily drafted, only regulates representation in the United Nations. China’s seat on the UN Security Council was also awarded to the communist People’s Republic and “Chiang Kai-shek’s representatives were expelled immediately”, it says, referring to the then president of the Chinese nationalist Kuomintang party. After the end of the civil war against the communists, Chiang Kai-shek and his troops fled to Taiwan in 1949, which had just been released from the Japanese colonial administration following Japan’s defeat in the Second World War.
Even the then-Chinese Prime Minister Zhou Enlai complained in 1971 in a conversation with Henry Kissinger, the architect of normalization between the USA and China, that no clause on the status of Taiwan could be included in the UN resolution. The respected Chinese premier complained that “Taiwan’s status has not yet been decided” with the adoption of the resolution.
However, the Chinese leadership prefers to see things differently today: “As part of China, Taiwan is fully integrated into its international legal status and does not enjoy a separate political or legal status.” Taiwan therefore did not need to be explicitly mentioned in the resolution. In fact, Beijing’s “one-China principle” is internationally recognized, they argue.
However, that is not true. Most countries such as Germany or the USA do not recognize the “principle” because it includes the claim to sovereignty. Instead, they pursue a “one-China policy”. The subtle difference between “principle” and “policy” is confusing, but important. Politically, Beijing is recognized as the legitimate government of China, and no diplomatic relations with Taiwan are being pursued due to pressure from China.
“We do not and will not accept an interpretation from Beijing that secretly implies the sovereignty of the People’s Republic over Taiwan,” said Frank Hartmann, Head of Asia-Pacific at the Federal Foreign Office, at the German-Taiwanese Dialogue Forum. “What we have seen recently from China indirectly implies the right to use force against Taiwan to enforce unification. This is something that we and other democratic countries can never accept.”
Germany’s vital interests are at stake. The sea routes between the Indo-Pacific and Europe are important lifelines, said Hartmann. He referred to studies according to which German economic output would collapse by 15 percent in the event of a comprehensive naval blockade and the collapse of supply chains.
With the largest military maneuvers in almost three decades, China increased the pressure last year and ushered in a new, dangerous phase. For the first time, its coast guard took part in the exercises to “lawfully enforce control of the island in accordance with the one-China principle” with “law enforcement patrols” in the waters around Taiwan.
Taiwan is alarmed by the apparent plans to not only impose a sea blockade, but also – in a preliminary stage – to carry out inspections of merchant ships. In such a “quarantine”, ships could be inspected for supposedly sensitive goods such as weapons shipments from the USA. They would have to ask China’s coast guard for permission to continue their journey, which would confirm China’s claim to sovereignty.
Almost half of the world’s container fleet passes through the Taiwan Strait. “Beijing is denying the strait the status of international waters,” warned a government advisor to the new Taiwanese President Lai Ching-te in Taipei. Beijing claims that the Taiwan Strait belongs to its territorial waters. “This will have international repercussions. But many countries don’t really understand that.”
There is much more at stake. “If Beijing asserts its position in the international community, Taiwan’s security and the status quo in the Taiwan Strait will be at greater risk,” warn Jacques deLisle and Bonnie S. Glaser in a report by the German Marshall Fund think tank. The People’s Republic could “make a more credible legal and political claim” that the use of force, the threat of force, or other repressive measures aimed at unification are “lawful”.
The People’s Republic could also argue that measures taken by the US or others as a deterrent would be an “unlawful violation of the PRC’s sovereignty or interference in its internal affairs”, the authors write, also with regard to the US arms deliveries. The West therefore continues to face a dilemma: Allowing the patrols to pass unhindered would seal Taiwan’s fate. Taking action against this would risk escalation.
Taiwan wants to monitor ships off its coast better in the future. Vessels sailing under a flag other than that of their owners are to be monitored and, if necessary, inspected on board, reports Reuters. This is Taiwan’s response to a damaged submarine cable off the coast of the island. Taiwan holds the freighter “Shunxing39” responsible for the destruction of the cable. The Chinese owner of the ship, which was sailing under the Cameroonian flag, rejects the accusations.
The National Security Service is compiling a list of ships about which false information was previously provided. If such a ship comes closer than 24 nautical miles from the Taiwanese coast and is in the vicinity of a submarine cable, the Coast Guard will inspect the ship. The Coast Guard itself wants to gain better access to the ships in question when investigating the incidents. Taiwan is also planning to work more closely with the USA and Europe to secure its undersea cables.
Taiwan accuses China of increasing so-called gray zone aggression. These include spy balloon flights and sand mining off the Taiwanese coast. Taiwan suspects that this also includes the cutting of undersea cables. This tactic is intended to exert pressure on Taiwan without provoking a direct conflict. ek
The EU Commission is calling on European companies to review their foreign investments in non-EU countries. This is the result of a recommendation published by the Commission on Wednesday. The recommendation concerns manufacturers of semiconductors, artificial intelligence, and quantum technologies that are both strategically important and pose a risk to economic security. The review is to last 15 months and cover transactions dating back to the beginning of 2021.
The Brussels authority wants to secure the EU’s competitiveness in times of geopolitical tensions and technological change, according to the communication: Key technologies and the associated knowledge should not fall into the wrong hands, as the EU Commission explained.
Further steps should then be decided on the basis of the review of foreign investments. The EU has been considering outbound investment screening for some time – but no concrete steps have yet been taken. The recommendation can now be seen as a litmus test of how these reviews would be received by companies. ek/ari
China wants to subject Apple and other US tech companies to stricter export controls, reports the Nikkei news agency. Apple wants to relocate its production facilities to India and thus reduce its dependence on China. This is also linked to Donald Trump’s upcoming inauguration: He announced that he would impose tariffs of ten percent on all goods produced in China.
China has responded by imposing stricter export controls on dual-use technology. These are raw materials and materials that can be used for both commercial and military purposes. Beijing recently presented a 160-page list of such dual-use technologies, which according to the report has already led to weeks of delays in shipments to India and Vietnam.
Other US tech companies are also affected by the stricter controls, said an Apple executive according to the Nikkei report. Companies such as Microsoft, Dell and Amazon have been moving out of China for several years and are increasingly setting up production facilities in Southeast Asia. However, they are still dependent on materials from China. ek
China continues to face major challenges this year. This is the conclusion reached by hundreds of China experts surveyed by the think tank Merics (Mercator Institute for China Studies) for its annual “China Forecast“. Merics announced the results on Wednesday.
According to the survey, 65% of the experts surveyed believe that growth will remain below the 5% targeted by Beijing. 71% of those surveyed believe that the problems in the real estate sector will continue to pose major problems for the country, as will the excessive debt at national, provincial and local level (57%). Economic stress and unemployment could in turn act as potential drivers of dissatisfaction and protests. The Chinese Communist Party will therefore pay more attention to measures to maintain public order and “ideological control” in 2025, for example through patriotic campaigns.
Corinne Abele from Germany Trade & Invest (GTAI) explained during an online discussion on the results that the continuing poor state of the overall economy is also having an impact on investment. According to Abele, for many foreign companies in China today it is no longer about producing cheaply or participating in a growth market, but rather about not losing market share to strong local competition.
For the forecast for the year 2025, 843 China experts and observers from areas such as academia, government, think tanks, business, media, and NGOs from Europe, North America, and Asia were asked for their assessments. The main topics of the survey were the economy, political stability, international relations, technology, and social trends. fpe
Shanghai is restricting membership fees for gyms and private sports instructors. The authorities responsible for commerce and sport in Shanghai presented a corresponding plan on Tuesday, which comes into force on March 1.
Accordingly, a one-off membership fee may not exceed 5,000 yuan in the future. That is the equivalent of around EUR 660. A contract term may not exceed 24 months. An advance payment contract may not include more than 60 training hours and a membership fee of 20,000 yuan. In addition, sports clubs and gyms will have to disclose their rental contracts and service fees.
According to the city of Shanghai, the aim is to prevent extortionate prices and gagging contracts in the fitness industry and to protect the interests of consumers. ek
It has been around two years since we called for Germany to be more vigilant and less naive in its cooperation with China, particularly in the education and science sector, in a joint interview in Der Spiegel. We warned against China’s increasing influence on German universities and called for a clearer strategy in dealing with Beijing’s geopolitical ambitions.
Furthermore, even back then we criticized the fact that the universities were being burdened with the task of reviewing cooperation partners, even though it was inefficient and ineffective at this level and we therefore needed a central bundling of these competencies at the federal level. Since then, a public discourse has been established on the topic of research cooperation with China. Our reflective and critical positioning has now reached the mainstream.
This progress is also thanks to the Federal Ministry of Education and Research (BMBF). Former Education Minister Bettina Stark-Watzinger (FDP) actively promoted the topic and helped shape the German government’s China strategy, which was adopted in July 2023. In March 2024, the BMBF also published a position paper on the topic of research security and set up a department for this purpose.
The mental shift can now also be observed in academic institutions: the DAAD’s recommendations for action in 2024 are much more concrete and critical compared to the rather vague guidelines of its own competence center (KIWi) in 2020. In the past year, further publications on the topic have also appeared, including by Anna Ahlers and Michael Laha for the University of California Institute on Global Conflict and Cooperation/Mercator Institute for China Studies, the recommendations for action of the BMBF-funded WIKOOP-INFRA project and a report by the Konrad Adenauer Foundation.
The following risks and problem areas have become established in the discourse on research cooperation: one-sided knowledge and technology transfer, illegitimate influence on freedom in teaching and research, risks of data transfer due to new data laws in China, and the possible favoring of human rights violations or the Chinese military.
However, there are conceptual ambiguities in the positioning of policy and the latest recommendations. Often, China as an actor is not even described in detail (China Strategy, BMBF, WIKOOP-INFRA) or only vaguely referred to as a “rigid political system” (DAAD). The public discourse in Germany often avoids a concrete description of China. However, these blind spots may even be politically desirable on the part of the Chancellery.
Olaf Scholz’s foreign policy advisor Jens Plötner has argued that an excessive emphasis on systemic rivalry would possibly limit the possibilities of a partnership-based approach with China too much. However, this stipulation from Berlin means that an autocratic one-party state under the ideological leadership of head of state Xi Jinping, which has penetrated all spheres and systematically suppresses human rights in order to maintain its own power, is being downplayed by Germany for tactical reasons.
These documents convey the impression that the ideological systemic character of autocracy in China, with all its consequences for Germany, has not been sufficiently recognized. The prevailing politically desired normalization of the Chinese political system runs counter to a realistic perception of China. As a result, the impact of legal innovations in China on German players is currently not sufficiently taken into account.
For example, the impact of Chinese laws on data security and the protection of personal data on research cooperation has not yet been fully assessed. Although risks relating to data exchange and transfer are mentioned in the documents, the German side still assumes that access to and use of information from joint research projects can be secured through framework conditions to its own advantage (DAAD).
This fails to recognize that these are extra-territorial laws, compliance with which is legally binding for both sides from the perspective of the party. The laws therefore also restrict the possibility of a “jointly organized, transparent transfer of knowledge and technology”, as the DAAD further states, and thus have a direct impact on the reciprocity often demanded by the German side (DAAD, WIKOOP-INFRA, China Strategy).
When scientists around Marcus Conlé suggest conducting a dialog on the principles and conditions of research cooperation with Chinese cooperation partners, this is desirable from a normative point of view. However, we should be under no illusions: Our scope for co-determining these is significantly limited by Chinese laws and the ideological penetration of science and the university system in China.
The foundation of “cooperation with the certainty of action”, namely academic freedom, does not exist. In view of the political reality in China, such recommendations therefore seem out of touch with reality. The principle of hope, and this is another lesson from the fiasco of Germany’s Russia policy, is no substitute for effective risk management.
If risk management, which has now become necessary, supposedly has a “deterrent” effect on the Chinese side (KAS), then we should bear in mind that foreign scientists in China are systematically monitored by the party state. When the German government considers measures to protect science, this is often criticized as a supposed “securitization”.
However, this concept from the research field of “international relations” implies emergency measures in which normal democratic politics are suspended. This is not an emergency, but rather a matter of taking account of a geopolitically changed reality with a sense of proportion. Security and freedom are both equally fundamental pillars of the rule of law and must be balanced accordingly. Democratic dissent about a suitable middle way in science diplomacy is therefore always part of the process.
Alicia Hennig is a substitute professor for General Business Administration at TU Dresden/IHI Zittau. From 2015 to 2020, she was employed at Chinese universities (Harbin Institute of Technology, Shenzhen and Southeast University, Nanjing). Her research interests include the human rights responsibility of German economic actors in Xinjiang, China.
Andreas Fulda is a political scientist. He teaches as an associate professor at the University of Nottingham. The China expert has been researching and publishing on relations between the EU and China for 20 years. His book “Germany and China: How Entanglement Undermines Freedom, Prosperity and Security” was published in mid-2024 (Bloomsbury).
Jeff Wu is to become the new Head of Market Sales China at Citigroup. In his new role, he will standardize the bank’s sales strategy for the various market products and unite the offshore and onshore teams under a single management structure for the first time. Wu has been with the US bank since 2010.
Raphaela Oliver has been Deputy CEO at Swissnext China, Switzerland’s science consulate in the People’s Republic, since January. She holds a doctorate in economics from Singapore and previously worked for Alibaba and the Ant Group, among others. She is based in Shanghai.
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You already know it from previous years: We at China.Table are Lego fans, especially for Chinese New Year, when the building block manufacturer brings out its own collection specially designed for the festival. This year, it is a dollhouse lantern with several floors – fitting for 元宵节, the Lantern Festival, which falls on Feb. 12 this year. The Lantern Festival is celebrated on the 14th day after Chinese New Year.
The countdown is on. Next Monday, Donald Trump moves into the White House and it seems as if the world is holding its breath. No one can seriously predict whether and how the world will change in the next four years.
The relationship between China and the USA is just one aspect that receives special attention at our China.Table. Jörn Petring has ventured a look into the future and tried to put together individual pieces of the puzzle. However, because many gaps in the big picture cannot be filled, much remains speculation.
There are some indications that an escalation – especially of economic relations – is inevitable, and could nevertheless provide the basis for both superpowers to find compromises. The extent to which this also applies to the status of the island republic of Taiwan is one of the great unknowns.
Andreas Landwehr has looked at UN Resolution 2758 and how it is interpreted in completely different ways by different sides. China has to put up with the accusation that its interpretation of the 1971 resolution has weaknesses of its own making. Nevertheless, Beijing is unlikely to deviate from it even one iota.
Here, too, Trump’s role may bring decisive changes in the coming years. In whose favor, in whose interest? Who can seriously predict that?
The foreign chambers of commerce in Beijing currently have a difficult job. There is a great deal of uncertainty among some of the member companies. They are wondering how the arrival of Donald Trump in the White House next Monday will affect Sino-American relations. Of course, the chambers do not have a crystal ball. So how can they make a prediction? The only thing that is clear is that the many unanswered questions are causing great concern that business will develop badly.
“The trade conflict between the US and China is set to intensify,” Oliver Oehms, Managing Director of the German Chamber of Commerce in North China, told Table.Briefings. However, it is not yet possible to predict what exactly the measures of the new US administration will look like and what priority they will be given.
“The unpredictability of a potentially escalating trade conflict has an immediate paralyzing effect on business decisions and investments,” says Oehms. Jens Eskelund, President of the EU Chamber of Commerce in China, comes to a similar conclusion. “It is truly unique that we find ourselves in a situation where so much is a guessing game,” says the Chamber President.
Many observers believe it is at least likely that Donald Trump will carry out a threat he made back in December at the start of his term of office. At that time, Trump said that he would impose general additional tariffs of ten percent on all imports from China on his first day in office because Beijing was not stemming the continuing flood of the drug fentanyl from its latitudes to the USA.
Even a flat tariff of ten percent would be a burden on trade between the two largest economies. If this happens, however, there is a high probability that an even more dangerous spiral of tariffs will be set in motion. This already happened during Trump’s first term in office.
Trump initiated the conflict in 2018 by imposing high punitive tariffs on Chinese imports, which led to a series of countermeasures by China. This phase marked the beginning of a full-blown trade war between the world’s two largest economies.
Beijing is likely to respond with counter-tariffs this time too. However, due to the large Chinese trade surplus, it is clear that they will not be able to respond with the same force. As in Trade War 1.0, agricultural products could once again be the focus. However, China seems ready to expand its toolbox.
Beijing reacted more sharply than usual to the Biden administration’s latest restriction measures in order to send a warning to Trump. An export ban imposed on some metals in this context shows that Beijing could be toying with the idea of cutting Washington off from rare earths on a larger scale.
The investigation into the chip company Nvidia, which was launched at the beginning of December, also makes it clear that US companies operating in China will have to brace themselves for more pressure. The extent to which the conflict could escalate is completely open. After all, Trump’s team brought blanket tariffs of up to 60 percent into play during the election campaign. However, most economists do not believe that such a high figure is feasible.
The course Trump takes will probably also depend on who can make themselves heard in his team. After all, opinions there seem to differ. Trump’s nominee for Trade Representative Jamieson Greer is of the opinion that decoupling from China must go ahead, whatever the cost. There is also growing interest in the US Congress in ending China’s current status of “Permanent Normal Trade Relations” (PNTR), i.e. ending normal trade relations. Greer supports this step.
Trump’s candidate for Secretary of the Treasury holds more moderate views. Scott Bessent wants to use the tariffs as important leverage. Ultimately, however, he is aiming for some kind of deal with China. What is often forgotten: Trump took exactly the same approach in the first trade dispute. After a period of escalating tariffs, both sides agreed on the so-called phase-one trade agreement. At the time, Trump praised the “historic” agreement as “making up for past mistakes”.
Trump was visibly proud that China agreed to buy at least 200 billion US dollars worth of goods and services from the USA over a two-year period. Although China kept some of its commitments, it ultimately fell well short of its purchase targets. This was also due to the outbreak of the COVID pandemic.
Six years later, the challenges for a new trade agreement have become much greater, according to Wendy Cutler, Vice President of the Asia Society Policy Institute (ASPI), in an article for Foreign Policy. Both sides have expanded trade and technology restrictions and taken steps to reduce their interdependence. Beijing has also further strengthened the state’s influence on the economy through massive subsidies and an expansion of state-owned enterprises.
“Trump, however, sees himself as a dealmaker,” says Cutler. A phase two agreement could therefore not be ruled out. Especially as China could conclude in view of its own economic challenges that an agreement with the USA – even with unconventional provisions – is better than jeopardizing the remaining trade volume of USD 600 billion.
What an agreement might look like and what might satisfy Washington is unclear. However, if it does come about, something could even happen that companies are currently hardly considering in their planning. Instead of ever-higher tariffs, trade barriers could be gradually reduced.
There is no doubt that tariffs will come first in Trump’s second term, says Cutler. “A phase two trade agreement – as difficult as it may be – could still be possible.”
China is laying the legal foundations for the seizure of Taiwan by force. In order to underpin its claim to power over the democratic island republic, Beijing is pushing ahead with a campaign in the United Nations and in its diplomatic relations with other countries.
It uses a highly controversial interpretation of UN Resolution 2758, which recognized the communist leadership as China’s representative in the United Nations in 1971. From Beijing’s point of view, this confirms its claim to power, even though Taiwan is not even mentioned in it.
“Beijing is manipulating international law in areas that have very serious consequences for global peace and prosperity,” warned Luke De Pulford, Executive Director of the Inter-Parliamentary Association on China (IPAC). Dutch MP Jan Maarten Paternotte takes a similar view: “The Chinese regime is using its enormous political and economic clout to force other countries to accept its own flawed interpretation.”
In a loose network of parliamentarians, politicians are taking a stand against Beijing’s stubborn interpretation of the UN resolution via “Initiative 2758”. The communist leadership argues that the 1971 UN General Assembly resolution confirms its “one-China principle”. According to this, Taiwan is an “inseparable part” of the People’s Republic. However, the European Parliament and the parliaments of other countries such as the USA, Australia, Canada, the Netherlands and most recently the UK have already adopted resolutions rejecting China’s “distorted” interpretation.
In October, the EU Parliament firmly condemned China’s attempts to “distort history and international rules”. Taiwan had never been part of the People’s Republic of China. The “Republic of China”, as Taiwan is still officially called today, was founded in 1912, while the People’s Republic has only existed since 1949. The UN resolution “does not establish that the People’s Republic of China enjoys sovereignty over Taiwan“. The EU Parliament’s resolution also opposes the exclusion of Taiwan from international organizations – under pressure from China. In fact, Taiwan is not mentioned at all in UN Resolution 2758. The political status of the island is also not mentioned – and certainly not that Beijing would somehow exercise sovereignty over Taiwan.
The UN resolution, which was already somewhat sloppily drafted, only regulates representation in the United Nations. China’s seat on the UN Security Council was also awarded to the communist People’s Republic and “Chiang Kai-shek’s representatives were expelled immediately”, it says, referring to the then president of the Chinese nationalist Kuomintang party. After the end of the civil war against the communists, Chiang Kai-shek and his troops fled to Taiwan in 1949, which had just been released from the Japanese colonial administration following Japan’s defeat in the Second World War.
Even the then-Chinese Prime Minister Zhou Enlai complained in 1971 in a conversation with Henry Kissinger, the architect of normalization between the USA and China, that no clause on the status of Taiwan could be included in the UN resolution. The respected Chinese premier complained that “Taiwan’s status has not yet been decided” with the adoption of the resolution.
However, the Chinese leadership prefers to see things differently today: “As part of China, Taiwan is fully integrated into its international legal status and does not enjoy a separate political or legal status.” Taiwan therefore did not need to be explicitly mentioned in the resolution. In fact, Beijing’s “one-China principle” is internationally recognized, they argue.
However, that is not true. Most countries such as Germany or the USA do not recognize the “principle” because it includes the claim to sovereignty. Instead, they pursue a “one-China policy”. The subtle difference between “principle” and “policy” is confusing, but important. Politically, Beijing is recognized as the legitimate government of China, and no diplomatic relations with Taiwan are being pursued due to pressure from China.
“We do not and will not accept an interpretation from Beijing that secretly implies the sovereignty of the People’s Republic over Taiwan,” said Frank Hartmann, Head of Asia-Pacific at the Federal Foreign Office, at the German-Taiwanese Dialogue Forum. “What we have seen recently from China indirectly implies the right to use force against Taiwan to enforce unification. This is something that we and other democratic countries can never accept.”
Germany’s vital interests are at stake. The sea routes between the Indo-Pacific and Europe are important lifelines, said Hartmann. He referred to studies according to which German economic output would collapse by 15 percent in the event of a comprehensive naval blockade and the collapse of supply chains.
With the largest military maneuvers in almost three decades, China increased the pressure last year and ushered in a new, dangerous phase. For the first time, its coast guard took part in the exercises to “lawfully enforce control of the island in accordance with the one-China principle” with “law enforcement patrols” in the waters around Taiwan.
Taiwan is alarmed by the apparent plans to not only impose a sea blockade, but also – in a preliminary stage – to carry out inspections of merchant ships. In such a “quarantine”, ships could be inspected for supposedly sensitive goods such as weapons shipments from the USA. They would have to ask China’s coast guard for permission to continue their journey, which would confirm China’s claim to sovereignty.
Almost half of the world’s container fleet passes through the Taiwan Strait. “Beijing is denying the strait the status of international waters,” warned a government advisor to the new Taiwanese President Lai Ching-te in Taipei. Beijing claims that the Taiwan Strait belongs to its territorial waters. “This will have international repercussions. But many countries don’t really understand that.”
There is much more at stake. “If Beijing asserts its position in the international community, Taiwan’s security and the status quo in the Taiwan Strait will be at greater risk,” warn Jacques deLisle and Bonnie S. Glaser in a report by the German Marshall Fund think tank. The People’s Republic could “make a more credible legal and political claim” that the use of force, the threat of force, or other repressive measures aimed at unification are “lawful”.
The People’s Republic could also argue that measures taken by the US or others as a deterrent would be an “unlawful violation of the PRC’s sovereignty or interference in its internal affairs”, the authors write, also with regard to the US arms deliveries. The West therefore continues to face a dilemma: Allowing the patrols to pass unhindered would seal Taiwan’s fate. Taking action against this would risk escalation.
Taiwan wants to monitor ships off its coast better in the future. Vessels sailing under a flag other than that of their owners are to be monitored and, if necessary, inspected on board, reports Reuters. This is Taiwan’s response to a damaged submarine cable off the coast of the island. Taiwan holds the freighter “Shunxing39” responsible for the destruction of the cable. The Chinese owner of the ship, which was sailing under the Cameroonian flag, rejects the accusations.
The National Security Service is compiling a list of ships about which false information was previously provided. If such a ship comes closer than 24 nautical miles from the Taiwanese coast and is in the vicinity of a submarine cable, the Coast Guard will inspect the ship. The Coast Guard itself wants to gain better access to the ships in question when investigating the incidents. Taiwan is also planning to work more closely with the USA and Europe to secure its undersea cables.
Taiwan accuses China of increasing so-called gray zone aggression. These include spy balloon flights and sand mining off the Taiwanese coast. Taiwan suspects that this also includes the cutting of undersea cables. This tactic is intended to exert pressure on Taiwan without provoking a direct conflict. ek
The EU Commission is calling on European companies to review their foreign investments in non-EU countries. This is the result of a recommendation published by the Commission on Wednesday. The recommendation concerns manufacturers of semiconductors, artificial intelligence, and quantum technologies that are both strategically important and pose a risk to economic security. The review is to last 15 months and cover transactions dating back to the beginning of 2021.
The Brussels authority wants to secure the EU’s competitiveness in times of geopolitical tensions and technological change, according to the communication: Key technologies and the associated knowledge should not fall into the wrong hands, as the EU Commission explained.
Further steps should then be decided on the basis of the review of foreign investments. The EU has been considering outbound investment screening for some time – but no concrete steps have yet been taken. The recommendation can now be seen as a litmus test of how these reviews would be received by companies. ek/ari
China wants to subject Apple and other US tech companies to stricter export controls, reports the Nikkei news agency. Apple wants to relocate its production facilities to India and thus reduce its dependence on China. This is also linked to Donald Trump’s upcoming inauguration: He announced that he would impose tariffs of ten percent on all goods produced in China.
China has responded by imposing stricter export controls on dual-use technology. These are raw materials and materials that can be used for both commercial and military purposes. Beijing recently presented a 160-page list of such dual-use technologies, which according to the report has already led to weeks of delays in shipments to India and Vietnam.
Other US tech companies are also affected by the stricter controls, said an Apple executive according to the Nikkei report. Companies such as Microsoft, Dell and Amazon have been moving out of China for several years and are increasingly setting up production facilities in Southeast Asia. However, they are still dependent on materials from China. ek
China continues to face major challenges this year. This is the conclusion reached by hundreds of China experts surveyed by the think tank Merics (Mercator Institute for China Studies) for its annual “China Forecast“. Merics announced the results on Wednesday.
According to the survey, 65% of the experts surveyed believe that growth will remain below the 5% targeted by Beijing. 71% of those surveyed believe that the problems in the real estate sector will continue to pose major problems for the country, as will the excessive debt at national, provincial and local level (57%). Economic stress and unemployment could in turn act as potential drivers of dissatisfaction and protests. The Chinese Communist Party will therefore pay more attention to measures to maintain public order and “ideological control” in 2025, for example through patriotic campaigns.
Corinne Abele from Germany Trade & Invest (GTAI) explained during an online discussion on the results that the continuing poor state of the overall economy is also having an impact on investment. According to Abele, for many foreign companies in China today it is no longer about producing cheaply or participating in a growth market, but rather about not losing market share to strong local competition.
For the forecast for the year 2025, 843 China experts and observers from areas such as academia, government, think tanks, business, media, and NGOs from Europe, North America, and Asia were asked for their assessments. The main topics of the survey were the economy, political stability, international relations, technology, and social trends. fpe
Shanghai is restricting membership fees for gyms and private sports instructors. The authorities responsible for commerce and sport in Shanghai presented a corresponding plan on Tuesday, which comes into force on March 1.
Accordingly, a one-off membership fee may not exceed 5,000 yuan in the future. That is the equivalent of around EUR 660. A contract term may not exceed 24 months. An advance payment contract may not include more than 60 training hours and a membership fee of 20,000 yuan. In addition, sports clubs and gyms will have to disclose their rental contracts and service fees.
According to the city of Shanghai, the aim is to prevent extortionate prices and gagging contracts in the fitness industry and to protect the interests of consumers. ek
It has been around two years since we called for Germany to be more vigilant and less naive in its cooperation with China, particularly in the education and science sector, in a joint interview in Der Spiegel. We warned against China’s increasing influence on German universities and called for a clearer strategy in dealing with Beijing’s geopolitical ambitions.
Furthermore, even back then we criticized the fact that the universities were being burdened with the task of reviewing cooperation partners, even though it was inefficient and ineffective at this level and we therefore needed a central bundling of these competencies at the federal level. Since then, a public discourse has been established on the topic of research cooperation with China. Our reflective and critical positioning has now reached the mainstream.
This progress is also thanks to the Federal Ministry of Education and Research (BMBF). Former Education Minister Bettina Stark-Watzinger (FDP) actively promoted the topic and helped shape the German government’s China strategy, which was adopted in July 2023. In March 2024, the BMBF also published a position paper on the topic of research security and set up a department for this purpose.
The mental shift can now also be observed in academic institutions: the DAAD’s recommendations for action in 2024 are much more concrete and critical compared to the rather vague guidelines of its own competence center (KIWi) in 2020. In the past year, further publications on the topic have also appeared, including by Anna Ahlers and Michael Laha for the University of California Institute on Global Conflict and Cooperation/Mercator Institute for China Studies, the recommendations for action of the BMBF-funded WIKOOP-INFRA project and a report by the Konrad Adenauer Foundation.
The following risks and problem areas have become established in the discourse on research cooperation: one-sided knowledge and technology transfer, illegitimate influence on freedom in teaching and research, risks of data transfer due to new data laws in China, and the possible favoring of human rights violations or the Chinese military.
However, there are conceptual ambiguities in the positioning of policy and the latest recommendations. Often, China as an actor is not even described in detail (China Strategy, BMBF, WIKOOP-INFRA) or only vaguely referred to as a “rigid political system” (DAAD). The public discourse in Germany often avoids a concrete description of China. However, these blind spots may even be politically desirable on the part of the Chancellery.
Olaf Scholz’s foreign policy advisor Jens Plötner has argued that an excessive emphasis on systemic rivalry would possibly limit the possibilities of a partnership-based approach with China too much. However, this stipulation from Berlin means that an autocratic one-party state under the ideological leadership of head of state Xi Jinping, which has penetrated all spheres and systematically suppresses human rights in order to maintain its own power, is being downplayed by Germany for tactical reasons.
These documents convey the impression that the ideological systemic character of autocracy in China, with all its consequences for Germany, has not been sufficiently recognized. The prevailing politically desired normalization of the Chinese political system runs counter to a realistic perception of China. As a result, the impact of legal innovations in China on German players is currently not sufficiently taken into account.
For example, the impact of Chinese laws on data security and the protection of personal data on research cooperation has not yet been fully assessed. Although risks relating to data exchange and transfer are mentioned in the documents, the German side still assumes that access to and use of information from joint research projects can be secured through framework conditions to its own advantage (DAAD).
This fails to recognize that these are extra-territorial laws, compliance with which is legally binding for both sides from the perspective of the party. The laws therefore also restrict the possibility of a “jointly organized, transparent transfer of knowledge and technology”, as the DAAD further states, and thus have a direct impact on the reciprocity often demanded by the German side (DAAD, WIKOOP-INFRA, China Strategy).
When scientists around Marcus Conlé suggest conducting a dialog on the principles and conditions of research cooperation with Chinese cooperation partners, this is desirable from a normative point of view. However, we should be under no illusions: Our scope for co-determining these is significantly limited by Chinese laws and the ideological penetration of science and the university system in China.
The foundation of “cooperation with the certainty of action”, namely academic freedom, does not exist. In view of the political reality in China, such recommendations therefore seem out of touch with reality. The principle of hope, and this is another lesson from the fiasco of Germany’s Russia policy, is no substitute for effective risk management.
If risk management, which has now become necessary, supposedly has a “deterrent” effect on the Chinese side (KAS), then we should bear in mind that foreign scientists in China are systematically monitored by the party state. When the German government considers measures to protect science, this is often criticized as a supposed “securitization”.
However, this concept from the research field of “international relations” implies emergency measures in which normal democratic politics are suspended. This is not an emergency, but rather a matter of taking account of a geopolitically changed reality with a sense of proportion. Security and freedom are both equally fundamental pillars of the rule of law and must be balanced accordingly. Democratic dissent about a suitable middle way in science diplomacy is therefore always part of the process.
Alicia Hennig is a substitute professor for General Business Administration at TU Dresden/IHI Zittau. From 2015 to 2020, she was employed at Chinese universities (Harbin Institute of Technology, Shenzhen and Southeast University, Nanjing). Her research interests include the human rights responsibility of German economic actors in Xinjiang, China.
Andreas Fulda is a political scientist. He teaches as an associate professor at the University of Nottingham. The China expert has been researching and publishing on relations between the EU and China for 20 years. His book “Germany and China: How Entanglement Undermines Freedom, Prosperity and Security” was published in mid-2024 (Bloomsbury).
Jeff Wu is to become the new Head of Market Sales China at Citigroup. In his new role, he will standardize the bank’s sales strategy for the various market products and unite the offshore and onshore teams under a single management structure for the first time. Wu has been with the US bank since 2010.
Raphaela Oliver has been Deputy CEO at Swissnext China, Switzerland’s science consulate in the People’s Republic, since January. She holds a doctorate in economics from Singapore and previously worked for Alibaba and the Ant Group, among others. She is based in Shanghai.
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You already know it from previous years: We at China.Table are Lego fans, especially for Chinese New Year, when the building block manufacturer brings out its own collection specially designed for the festival. This year, it is a dollhouse lantern with several floors – fitting for 元宵节, the Lantern Festival, which falls on Feb. 12 this year. The Lantern Festival is celebrated on the 14th day after Chinese New Year.