There are around half a million truck drivers in Germany, and their existence is threatened to some extent by fully automated trucks. Politicians and trade unions are so afraid of the social impact of this technical revolution that Daimler is only talking about “upgrading the profession”, not abolishing it – after all, the former drivers could work on computers in the future. China has fewer reservations here and is pushing ahead with the introduction of robo-trucks faster than expected, writes Frank Sieren.
There was much excitement in Brussels on Tuesday. A representative of the EU Commission had sown doubts about the future viability of the CAI investment agreement. In doing so he was merely speaking the truth – but the message became a self-fulfilling prediction. The agreement is not expected to come into force for at least two years, as EU parliamentarians have revealed to our correspondent Amelie Richter. Those who hoped for better business conditions will be disappointed – human rights groups and transatlanticists will be happy about the delay.
At the same time the EU is putting together a new “toolbox” of instruments for dealing with China. State-subsidised companies are to have a harder time with takeovers in Europe – even retroactively. And the EU is to make itself less dependent on supplies of important goods such as microchips and medicines. It almost sounds as if half a lifetime has passed since the CAI trade agreement was signed, rather than half a year.
The clothing brand Hugo Boss is suffering in Europe because of the Covid closures. The unadulterated fashion boom in China is a welcome compensation. However, a boycott call caused a scare in March. Chinese patriots were bothered by an announcement by Hugo Boss that it would stop using cotton from Xinjiang. Now comes the all-clear: Sales continue to rise in China.
A clarification was apparently so important to EU Trade Commissioner Valdis Dombrovskis that he emphasized it separately at the regular press conference after the meeting of the EU Commissioners: The EU Commission’s approach towards the EU-China Investment Agreement (CAI) had not changed – the agreement was still important for the relationship between Brussels and Beijing. It was necessary to correct imbalances in market access. But ratification cannot be divorced from the “wider dynamics” between the two economic blocs, Dombrovskis said.
On Tuesday, a statement by the trade commissioner had caused a stir. In an interview with the French news agency AFP, Dombrovskis said that political efforts on the CAI were “suspended” – which was interpreted as the death of the agreement.
Dombrovskis now stressed that the so-called “legal scrubbing”, in which the text is legally examined, was continuing. Apart from that, however, not much is happening. “It now depends on how the situation develops,“ the EU trade commissioner said. In short, the CAI is not dead – but, just over four months after the political agreement, it is in a coma for the time being.
And that, if MEPs have their way, for a long time to come. The CAI is currently “in the freezer” and will probably not be “taken out of there” for the next two years, Bernd Lange (SPD), chairman of the EU Parliament’s trade committee, told journalists yesterday. Because of the sanctions imposed by Beijing against EU parliamentarians, there is no way forward for now. “That will stay in there for a long time.”
Lange told China.Table that he did not expect the punitive measures to be withdrawn in the near future, partly against the backdrop of the 100th anniversary of the Chinese Communist Party in July. The normal processes for EU trade agreements, such as legal scrubbing and translation into all languages, take a long time anyway. Combined with the unfavorable environment, two years is not too short.
China had “badly miscalculated” with the sanctions, said MEP Reinhard Buetikofer (Greens), who is affected by the sanctions. But there is now growing realism in the EU Commission about China, Buetikofer said. “Merkel’s China policy is losing weight.” French President Emmanuel Macron also “miscalculated” his support for the CAI, he added. That France will show great ambitions for the ratification of the deal under its EU Council presidency in spring 2022 is rather unlikely.
CDU MEP Michael Gahler, who was also hit by the punitive measures from Beijing, generally continued to speak in favor of the CAI. With the agreement as a framework, European companies would be better off in China, Gahler said. However, he warned against further divisiveness within the EU through “special formats” such as 17+1, in which China meets with Eastern and Central European states. The CDU politician considered it unlikely that the problems with the CAIs were already foreseeable and factored into the political agreement at the end of December. The strengthening of the companies within the Chinese market was still a goal to be strived for.
However, MEPs were able to take away one positive aspect from the debacle over the comatose investment agreement: Brussels is now giving more thought to a coherent China strategy. And the CAI standstill is not inconvenient for the EU in terms of timing either: While work on the agreement is paused, improvements are being made in other areas, and China policy is being restructured.
The prevailing view in Brussels is that China itself is responsible for the CAI pause with its round of sanctions. Yesterday. the EU Commission, therefore, presented two initiatives that indirectly affect China as the main target: The revised industrial strategy and a legislative proposal to take action against state-subsidized companies in the EU’s internal market.
The latter is intended to better protect European companies from unfair competition from companies from China and other third countries in the future. “The regulatory proposal does not target a specific country,” was stressed in the press release on the EU Commission’s proposal for a regulation on competition-distorting foreign subsidies, which was presented by EU Vice-President Margrethe Vestager, who is responsible for competition. But: “We expect our guests to comply with our house rules,” said Vestager.
The legislative proposal provides for an obligation to provide information on state aid for the acquisition and award of public contracts above certain thresholds. The Commission will then examine whether these distort competition and could prohibit the projects or impose conditions. In the case of company mergers, the threshold for examination is to be a turnover of at least €500 million of one of the partners, and at the same time, the foreign subsidy must amount to at least €50 million. In the case of public procurement, the threshold would be a value of at least €250 million. In both cases, companies would be obliged to inform the Commission in advance of subsidies from a government outside the EU – failure to do so could result in fines.
In addition, the Commission should also have the possibility to scrutinize “all other market situations and smaller procedures for concentrations and public contracts”. The Commission considers potentially distortive subsidies to be, for example, unlimited financial guarantees by a state or payments to ailing companies without a restructuring plan. Aid aimed directly at facilitating a takeover or particularly favorable bids for public contracts also fall into this category.
And the EU Commission also wants to take a look at the past: The regulation would also apply to foreign subsidies “ granted in the ten years preceding the date of application of this regulation if those foreign subsidies distort the internal market after the date of application of this regulation”, the proposal states. But it is not clear whether the potential investigations would then lead to action. Theoretically, the Chinese takeover of the port in Piraeus, Greece, by state-owned Cosco, or Midea’s purchase of robotics maker Kuka would also fall within the 10-year window. Despite denials from the company side, financial aid from Beijing played a role in both deals, say industry experts.
Initial reactions from the business community were mixed: “The proposed regulation is very complex, and there is a risk that its implementation will lead to considerable additional bureaucracy and legal uncertainty for our member companies,” stated Ulrich Ackermann, Head of the Foreign Trade Department at the German Mechanical Engineering Industry Association (VDMA). In principle, however, the EU Commission is right to take action against subsidized products and other subsidized economic activities of third countries in the EU’s internal market, according to Ackermann. The EU Commission will also seek public opinions for its proposal before it is discussed with the EU Parliament and the EU Council.
With the second approach presented yesterday in Brussels, the European Union wants to make itself less dependent on China: Brussels is sharpening its strategy in key industrial sectors. To this end, the EU has identified 137 products for which the economic bloc is highly dependent on other countries, explained Trade Commissioner Dombrovskis. “About half of all imports of these products come from China.” Detailed analyses are now to take place in six areas: Raw materials, semiconductors, active pharmaceutical ingredients, batteries, hydrogen, and cloud technologies. After the detailed analyses, there will then be concrete measures, which could consist of securing supply chains through additional trading partners, building up larger stocks in their own warehouses or producing more in Europe.
And Brussels wants to add a lot more to the so-called “toolbox” by the end of the year: The EU supply chain law should be in place by the end of 2021. In addition, according to EU parliamentarians, there is hope for progress on the international procurement instrument IPI, which is still stuck. There is a desire to adopt this before the end of the year, emphasized trade committee chairman Lange. Whether that will work is still open. So far, the bill has failed in the EU Council, also due to the blockade by Germany.
Jīn Lìqún (金立群) prefers to talk about literature over politics: “Ever since I was a child, my dream was to become a professor. I loved to deal with books and was not good at dealing with people.” Like most intellectuals of his generation – Jin was born in 1949 – his time in an agricultural work unit, where he spent ten years as a young man, shaped him. There he learned a lot about the concerns and aspirations of rural people, but his real interest was English literature. He spent nights in front of the radio, listening to the BBC and reading English classics. When Chinese universities reopened after the Cultural Revolution, Jin went straight to the Beijing Foreign Language University and studied English literature. Even today he likes to quote William Faulkner, Jane Austen, and T.S. Eliot – in fluent English, of course.
So how did a literary scholar like Jin end up at the helm of the Asian Infrastructure Investment Bank (AIIB), the “Chinese World Bank”, founded in 2015 as a counter-model to US-dominated institutions? When China joined the World Bank in 1980, English-speaking officials were scarce, and Jin was ordered to Washington by the Ministry of Finance. He gained the financial knowledge he needed with the help of a scholarship to Boston University’s economics department and while working for the World Bank in the years that followed. It was not until 1995 that he returned to a completely changed China. The Chinese economy had benefited primarily from investments in infrastructure, made possible not least by the World Bank.
Instead of returning to literary studies, Jin stayed on the career track: He became vice minister in China’s Ministry of Finance and later vice president of the Asian Development Bank. When China’s President Xi Jinping announced the establishment of a regional multilateral infrastructure bank in 2013, in parallel with the Belt and Road Initiative, he entrusted Jin with the task of setting up the Beijing-based organization. Suspicion on the Western side was high. Would the new bank really operate multilaterally? Was there a threat of infiltration of the World Bank? Jin’s answer to the skepticism: “You can only convince with deeds, not with words”. In fact, under his leadership, the AIIB relied on cooperation with existing institutions and made surprisingly clear announcements, such as the promise not to promote projects linked to coal power and tough anti-corruption measures. To the chagrin of the US, many European countries joined the AIIB, including Germany. Membership has also nearly doubled since its inception, with the agreement now boasting 102 signatories. In July 2020, Jin was re-elected for a second term as AIIB president. Jonas Borchers
Ke Ai (可爱), “cute”, trumps in China – also when it comes to safety accessories. This employee presents a new helmet in comic design at the International Bicycle Fair in Shanghai. Does the horn on the top provide additional protection on impact?
There are around half a million truck drivers in Germany, and their existence is threatened to some extent by fully automated trucks. Politicians and trade unions are so afraid of the social impact of this technical revolution that Daimler is only talking about “upgrading the profession”, not abolishing it – after all, the former drivers could work on computers in the future. China has fewer reservations here and is pushing ahead with the introduction of robo-trucks faster than expected, writes Frank Sieren.
There was much excitement in Brussels on Tuesday. A representative of the EU Commission had sown doubts about the future viability of the CAI investment agreement. In doing so he was merely speaking the truth – but the message became a self-fulfilling prediction. The agreement is not expected to come into force for at least two years, as EU parliamentarians have revealed to our correspondent Amelie Richter. Those who hoped for better business conditions will be disappointed – human rights groups and transatlanticists will be happy about the delay.
At the same time the EU is putting together a new “toolbox” of instruments for dealing with China. State-subsidised companies are to have a harder time with takeovers in Europe – even retroactively. And the EU is to make itself less dependent on supplies of important goods such as microchips and medicines. It almost sounds as if half a lifetime has passed since the CAI trade agreement was signed, rather than half a year.
The clothing brand Hugo Boss is suffering in Europe because of the Covid closures. The unadulterated fashion boom in China is a welcome compensation. However, a boycott call caused a scare in March. Chinese patriots were bothered by an announcement by Hugo Boss that it would stop using cotton from Xinjiang. Now comes the all-clear: Sales continue to rise in China.
A clarification was apparently so important to EU Trade Commissioner Valdis Dombrovskis that he emphasized it separately at the regular press conference after the meeting of the EU Commissioners: The EU Commission’s approach towards the EU-China Investment Agreement (CAI) had not changed – the agreement was still important for the relationship between Brussels and Beijing. It was necessary to correct imbalances in market access. But ratification cannot be divorced from the “wider dynamics” between the two economic blocs, Dombrovskis said.
On Tuesday, a statement by the trade commissioner had caused a stir. In an interview with the French news agency AFP, Dombrovskis said that political efforts on the CAI were “suspended” – which was interpreted as the death of the agreement.
Dombrovskis now stressed that the so-called “legal scrubbing”, in which the text is legally examined, was continuing. Apart from that, however, not much is happening. “It now depends on how the situation develops,“ the EU trade commissioner said. In short, the CAI is not dead – but, just over four months after the political agreement, it is in a coma for the time being.
And that, if MEPs have their way, for a long time to come. The CAI is currently “in the freezer” and will probably not be “taken out of there” for the next two years, Bernd Lange (SPD), chairman of the EU Parliament’s trade committee, told journalists yesterday. Because of the sanctions imposed by Beijing against EU parliamentarians, there is no way forward for now. “That will stay in there for a long time.”
Lange told China.Table that he did not expect the punitive measures to be withdrawn in the near future, partly against the backdrop of the 100th anniversary of the Chinese Communist Party in July. The normal processes for EU trade agreements, such as legal scrubbing and translation into all languages, take a long time anyway. Combined with the unfavorable environment, two years is not too short.
China had “badly miscalculated” with the sanctions, said MEP Reinhard Buetikofer (Greens), who is affected by the sanctions. But there is now growing realism in the EU Commission about China, Buetikofer said. “Merkel’s China policy is losing weight.” French President Emmanuel Macron also “miscalculated” his support for the CAI, he added. That France will show great ambitions for the ratification of the deal under its EU Council presidency in spring 2022 is rather unlikely.
CDU MEP Michael Gahler, who was also hit by the punitive measures from Beijing, generally continued to speak in favor of the CAI. With the agreement as a framework, European companies would be better off in China, Gahler said. However, he warned against further divisiveness within the EU through “special formats” such as 17+1, in which China meets with Eastern and Central European states. The CDU politician considered it unlikely that the problems with the CAIs were already foreseeable and factored into the political agreement at the end of December. The strengthening of the companies within the Chinese market was still a goal to be strived for.
However, MEPs were able to take away one positive aspect from the debacle over the comatose investment agreement: Brussels is now giving more thought to a coherent China strategy. And the CAI standstill is not inconvenient for the EU in terms of timing either: While work on the agreement is paused, improvements are being made in other areas, and China policy is being restructured.
The prevailing view in Brussels is that China itself is responsible for the CAI pause with its round of sanctions. Yesterday. the EU Commission, therefore, presented two initiatives that indirectly affect China as the main target: The revised industrial strategy and a legislative proposal to take action against state-subsidized companies in the EU’s internal market.
The latter is intended to better protect European companies from unfair competition from companies from China and other third countries in the future. “The regulatory proposal does not target a specific country,” was stressed in the press release on the EU Commission’s proposal for a regulation on competition-distorting foreign subsidies, which was presented by EU Vice-President Margrethe Vestager, who is responsible for competition. But: “We expect our guests to comply with our house rules,” said Vestager.
The legislative proposal provides for an obligation to provide information on state aid for the acquisition and award of public contracts above certain thresholds. The Commission will then examine whether these distort competition and could prohibit the projects or impose conditions. In the case of company mergers, the threshold for examination is to be a turnover of at least €500 million of one of the partners, and at the same time, the foreign subsidy must amount to at least €50 million. In the case of public procurement, the threshold would be a value of at least €250 million. In both cases, companies would be obliged to inform the Commission in advance of subsidies from a government outside the EU – failure to do so could result in fines.
In addition, the Commission should also have the possibility to scrutinize “all other market situations and smaller procedures for concentrations and public contracts”. The Commission considers potentially distortive subsidies to be, for example, unlimited financial guarantees by a state or payments to ailing companies without a restructuring plan. Aid aimed directly at facilitating a takeover or particularly favorable bids for public contracts also fall into this category.
And the EU Commission also wants to take a look at the past: The regulation would also apply to foreign subsidies “ granted in the ten years preceding the date of application of this regulation if those foreign subsidies distort the internal market after the date of application of this regulation”, the proposal states. But it is not clear whether the potential investigations would then lead to action. Theoretically, the Chinese takeover of the port in Piraeus, Greece, by state-owned Cosco, or Midea’s purchase of robotics maker Kuka would also fall within the 10-year window. Despite denials from the company side, financial aid from Beijing played a role in both deals, say industry experts.
Initial reactions from the business community were mixed: “The proposed regulation is very complex, and there is a risk that its implementation will lead to considerable additional bureaucracy and legal uncertainty for our member companies,” stated Ulrich Ackermann, Head of the Foreign Trade Department at the German Mechanical Engineering Industry Association (VDMA). In principle, however, the EU Commission is right to take action against subsidized products and other subsidized economic activities of third countries in the EU’s internal market, according to Ackermann. The EU Commission will also seek public opinions for its proposal before it is discussed with the EU Parliament and the EU Council.
With the second approach presented yesterday in Brussels, the European Union wants to make itself less dependent on China: Brussels is sharpening its strategy in key industrial sectors. To this end, the EU has identified 137 products for which the economic bloc is highly dependent on other countries, explained Trade Commissioner Dombrovskis. “About half of all imports of these products come from China.” Detailed analyses are now to take place in six areas: Raw materials, semiconductors, active pharmaceutical ingredients, batteries, hydrogen, and cloud technologies. After the detailed analyses, there will then be concrete measures, which could consist of securing supply chains through additional trading partners, building up larger stocks in their own warehouses or producing more in Europe.
And Brussels wants to add a lot more to the so-called “toolbox” by the end of the year: The EU supply chain law should be in place by the end of 2021. In addition, according to EU parliamentarians, there is hope for progress on the international procurement instrument IPI, which is still stuck. There is a desire to adopt this before the end of the year, emphasized trade committee chairman Lange. Whether that will work is still open. So far, the bill has failed in the EU Council, also due to the blockade by Germany.
Jīn Lìqún (金立群) prefers to talk about literature over politics: “Ever since I was a child, my dream was to become a professor. I loved to deal with books and was not good at dealing with people.” Like most intellectuals of his generation – Jin was born in 1949 – his time in an agricultural work unit, where he spent ten years as a young man, shaped him. There he learned a lot about the concerns and aspirations of rural people, but his real interest was English literature. He spent nights in front of the radio, listening to the BBC and reading English classics. When Chinese universities reopened after the Cultural Revolution, Jin went straight to the Beijing Foreign Language University and studied English literature. Even today he likes to quote William Faulkner, Jane Austen, and T.S. Eliot – in fluent English, of course.
So how did a literary scholar like Jin end up at the helm of the Asian Infrastructure Investment Bank (AIIB), the “Chinese World Bank”, founded in 2015 as a counter-model to US-dominated institutions? When China joined the World Bank in 1980, English-speaking officials were scarce, and Jin was ordered to Washington by the Ministry of Finance. He gained the financial knowledge he needed with the help of a scholarship to Boston University’s economics department and while working for the World Bank in the years that followed. It was not until 1995 that he returned to a completely changed China. The Chinese economy had benefited primarily from investments in infrastructure, made possible not least by the World Bank.
Instead of returning to literary studies, Jin stayed on the career track: He became vice minister in China’s Ministry of Finance and later vice president of the Asian Development Bank. When China’s President Xi Jinping announced the establishment of a regional multilateral infrastructure bank in 2013, in parallel with the Belt and Road Initiative, he entrusted Jin with the task of setting up the Beijing-based organization. Suspicion on the Western side was high. Would the new bank really operate multilaterally? Was there a threat of infiltration of the World Bank? Jin’s answer to the skepticism: “You can only convince with deeds, not with words”. In fact, under his leadership, the AIIB relied on cooperation with existing institutions and made surprisingly clear announcements, such as the promise not to promote projects linked to coal power and tough anti-corruption measures. To the chagrin of the US, many European countries joined the AIIB, including Germany. Membership has also nearly doubled since its inception, with the agreement now boasting 102 signatories. In July 2020, Jin was re-elected for a second term as AIIB president. Jonas Borchers
Ke Ai (可爱), “cute”, trumps in China – also when it comes to safety accessories. This employee presents a new helmet in comic design at the International Bicycle Fair in Shanghai. Does the horn on the top provide additional protection on impact?
