Only a fraction of the microchips used worldwide are manufactured in Europe. By revenue, the share is so small that it only shows up in statistics under “Other”. The US at least makes an appearance with a single-digit percentage. In short, almost all chips come from Asia. It is no wonder that Joe Biden has taken the initiative and is subsidizing the restoration of an American semiconductor industry.
And the EU? It has launched an initiative that is showing initial success. But it will be years before more semiconductors are produced domestically again. Until then, we can only pray and hope that nothing else goes wrong in geopolitical terms. Otherwise, the assembly lines in German industry, the basis of our prosperity, will grind to a halt. The semiconductor situation could turn into an even worse repeat of the drama surrounding Russian energy sources, analyzes Felix Lee.
There are many Sinologists who are not fluent in Chinese. But there have hardly been any graduate Sinologists who have never been to Asia at all. The pandemic has brought about a new phenomenon here as well. This summer semester marks the graduation of the first bachelor’s degree class that has been largely barred from traveling to the Far East. Amelie Richter has summarized the devastating psychological effect this has had on the new generation of students interested in China.
They are at the heart of modern industrial products, and whoever masters their production will decide who is the leader in future technologies: Semiconductors, more commonly known as microchips. That is why China, the USA and the EU are currently doing everything to bolster their technological position.
The USA is now pressing ahead. The Senate passed a bill to this effect on Wednesday. All that remains is the approval of the House of Representatives, which is considered certain. But the EU and China are also trying hard to boost their own semiconductor production with subsidies, tax breaks and other incentives. The EU has already presented a corresponding proposal for a bundle of measures with the European Chips Act (Europe.Table reported).
The stakes are high. It is no longer just a matter of principle to be at the forefront of technology. In the wake of geopolitical and trade rivalries, national economies aim to restore their manufacturing independence after decades of relying on foreign sourcing. The pandemic has shown, not least to the German electronics and automotive industries, what happens when supplies from the Far East fail to arrive. Some car manufacturers have had to cut their production by a third at times.
Currently, more than two-thirds of all modern semiconductors are manufactured in Taiwan, South Korea, China and Japan. The Germans do not want to rely on supplies from Taiwan in particular in the long term. After all, there is a fear that the leadership in Beijing will launch an attack on the democratically governed island state because it considers Taiwan to be its own territory. Recently, the People’s Republic has made this clearer than ever.
Not least in light of the Chinese catch-up campaign, Albert Heuberger, chip expert and Director of the Fraunhofer Institute for Integrated Circuits, believes that the European Chips Act is both right and important. The chip industry is a key industry that strongly determines the technological foundations in this country. “We also have to fight for such manufacturing industries to be located in Germany and Europe so that we have the know-how,” Heuberger said. “Chip companies will base their location decisions on where the right workforce is available.”
The EU already acted in the spring with the European Chips Act and initiated a program of around €15 billion to expand the domestic chip industry, in addition to the already planned public investment of €30 billion.
Admittedly, there is also criticism of the Commission’s approach (Europe.Table reported): The focus on ultra-modern chips ignores the fact that simpler components are also needed as workhorses of the industry. In addition, Brussels is not providing enough money out of its own pocket. Of the €43 billion, only €4 billion will actually come from EU funds; the rest is to be provided by member states or private investors.
But the EU’s subsidy programs show effect: Bosch has announced plans to take advantage of the subsidies and invest almost €1 billion in its semiconductor development centers in the German cities of Reutlingen and Dresden, among others. The chip giants STMicroelectronics and GlobalFoundries want to invest around €5.7 billion in a new semiconductor plant in France. The US company Intel even wants to build a new mega-chip site in Germany and has budgeted €17 billion for the construction of two semiconductor plants.
Washington now wants to directly stimulate the domestic semiconductor industry with $52 billion. In addition, the US government intends to exempt chip factories from taxation and provide no less than $170 billion for the R&D of new semiconductors. Both the European Chips Act and the US program are designed to attract private investment through public subsidies.
China is putting up a similar amount of money as the USA. The state development fund is equipped with €170 billion. Regional players are also getting involved. The technology metropolis of Shenzhen currently has a manufacturer of memory chips in the works for €40 billion. Not all money always flows into the right channels when things need to happen fast (China.Table reported). But overall, funding already has an impact.
Despite sanctions imposed by the US on China’s high-tech sector, leading Chinese chipmaker SMIC has apparently managed to pull off a technical leap, also with massive government backing. The company has managed to ship its first chips with a structure width of just 7 nanometers. At least that is what the news agency Bloomberg reports. If this news proves true, then the learning curve would be considerable. Because until now, many observers assumed that China’s chip industry was behind the top countries Taiwan, South Korea and the USA by about four years.
The Chinese manufacturer SMIC has so far mainly been active in the 14-nanometer segment, i.e. in much larger semiconductors. The rule here is that the fewer nanometers wide the current paths are, the faster and more efficiently the components calculate. China is already extremely successful in the 14-nanometer range. With the transition to the 7-nanometer range, however, applications and thus market opportunities for Chinese products are broadening. Recently, Korean economics professor Keun Lee called older generation chips “almost worthless” in a guest article for China.Table.
It is not known whether the 7-nanometer chips are really market-ready and can be produced in large quantities while maintaining good quality. But what can be gleaned from this development is that the Chinese are obviously not as out of touch as the USA would like them to be. The harder it becomes to stock up on the global market, the more attractive it becomes to order from Chinese suppliers.
The fact is that German companies are also purchasing more and more chips from China. In 2001, China’s share of the global chip market was still less than one percent. By 2010, it had surpassed 10 percent. At the beginning of the pandemic, it reached 20 percent. According to US observers, it could reach nearly one quarter by 2030.
German experts have also been pointing to the rapid development in the People’s Republic for some time: “China already has a stronger ecosystem for chip design than Europe,” according to a joint analysis by the Berlin-based China think tank Merics and the Stiftung Neue Verantwortung last December. High investments would also enable Chinese companies to scale more quickly, i.e., to achieve higher quantities and thus lower prices.
Nevertheless, there is “a lot of catching up to do” in China compared to the US and its Asian neighbors, says Heuberger. The production of modern chips is a particularly challenging undertaking that requires a great deal of experience.
Heuberger also believes that the EU initiative will only show a clear effect in a few years. “In a growing market, we need to triple to quadruple production in Europe to get to the targeted 20 percent global market share. A period of five to eight years is needed before we catch up,” said Heuberger, who is also a spokesman for the Fraunhofer Group for Microelectronics.
The Merics study identifies European weaknesses primarily in so-called back-end manufacturing, that is, the assembly, testing and packaging of high-tech chips. However, this part of the production will become significantly more important in the future, especially for the development of high-performance and energy-efficient chips. China, on the other hand, already has a considerable global market share in back-end manufacturing, experts say. That is why Europe is likely to continue to rely on chips from China in the foreseeable future.
Sara Kettenmeyer puts it rather bluntly: “If I had known how my studies would turn out, I probably wouldn’t have started them the way I did.” Kettenmeyer is studying sinology, has completed six semesters, and should now actually be writing her bachelor’s thesis at Ludwig Maximilian University in Munich to complete her degree. She is part of the first cohort of sinology students in Germany who were unable to set foot in the People’s Republic during their entire studies due to the Covid pandemic.
Kettenmeyer began her sinology studies in the 2019/20 winter semester. In the first semester, everything was still normal, the 22-year-old says. Then she spent four semesters taking online classes. The summer semester of 2022, which runs at most German universities until the end of the month, was then back to presence classes. Her stay in China, which is actually part of the curriculum after the fourth semester, never happened.
“I applied several times to Chinese universities, received an acceptance letter from Beijing Normal University, but then the exchange didn’t happen,” says the student. The student council and staff of the sinology institute always tried to help, she says. “But they didn’t really know what was going on either.” For students, the lack of time studying abroad has had two consequences: “Some have dropped out in an advanced semester because it’s just frustrating,” Kettenmeyer says. And, “I don’t really know the language.” Other fellow students without any experience in China have similar feelings.
This became particularly apparent in the higher semesters when, for example, newspaper reading was added to the language lessons. You notice a difference between students who were able to travel to China before the Covid pandemic began – and sinologists who were not in a Mandarin-speaking environment during their studies, Kettenmeyer notes. She has decided not to complete her studies with her bachelor’s thesis at this point and instead to work for a year so that she can then follow-up her stay in China in the 2023/24 academic year.
The 22-year-old from Munich is not alone in her rather negative experience. In recent years, there has been an average higher number of dropouts than before the Covid pandemic, according to a sinology institute in the northern German region. The fact that the “run” on the field of study has not been the highest in recent years and that students are dropping out due to frustration is not a big surprise, according to a staff member who prefers to remain anonymous. The images of the harsh lockdown in Shanghai have been discussed among students, and have led to concerns among some about staying in China in the future. Despite everything, should it become evident that students will be able to enter the country again in 2023, she expects a sharp increase in enrollment for the winter semester.
Korbinian Rausch, also a student at LMU, began his sinology studies during and despite the pandemic. He has never visited the People’s Republic before. The 29-year-old previously studied history and politics and wrote his bachelor’s thesis on the relationship between Taiwan and China. When he reached his limits in understanding the sources, he decided to start studying sinology in 2020 – even though entering the People’s Republic was already practically impossible at that point. He had not planned a full year abroad anyway, since he already had a job. “But I had hoped to maybe attend a summer school in China.” Nothing came of that. He put his studies on hold, and is now officially only in his second semester. “But I’ll keep at it,” Rausch says.
Meanwhile, many scientists who already know China are urging the chance to return there. This does not only include German students. On Twitter, Instagram and other social networks, groups have formed that are calling to let academics back into the country under the hashtag #takeusbacktochina. In these groups, students exchange news – or vent their frustration about the situation. For many, a semester abroad in China is directly related to job prospects after graduation. Due to the entry restrictions, they potentially also face financial difficulties. Not everyone can afford to delay their studies.
The “substitute program” with online classes at Chinese universities does not equal a real exchange, says Greta Biondi. The Italian just this month finished her double degree at Ca’ Foscari University in Venice and Capital Normal University in Beijing – and has completed two years of Chinese online studies, but has never been to the People’s Republic. While she thought it was great that she was able to study at a Chinese university at all, Biondi says.
But the second year, in particular, had not been a good experience due to the time difference and dwindling motivation among students and teachers. Classes and exams took place partly at night in Europe, and language exchanges almost didn’t happen at all, Biondi said. “Now I feel like I can do an economic transaction in Mandarin but not ask for simple everyday things.”
Veronica decided against studying online at a Chinese university altogether. The 24-year-old Spanish student earned her bachelor’s degree in 2020 and was accepted by universities in China. “I wanted to study in China, but by then it was already clear that it was not possible.” She had never been to the People’s Republic. She chose a master’s program at Leiden University and now wants to pursue her Ph.D. in China afterward. “It’s not just about the language,” Veronika says. “You can’t really work towards China without having ever been there.”
To revive academic exchanges, the Chinese government is working on several ideas, a representative of a European-Chinese university joint venture told China.Table. Charter flights, for example, are being considered, as is the establishment of “academic hubs” in several cities to allow students to re-enter the country, at least for important fieldwork. There seems to be a strong effort by the government to bring students back. However, she does not want to talk about it openly, because then “my students might get their hopes up that it will happen quickly, and we can’t guarantee that.”
Xiao Yaqing, the Minister of Industry and Information Technology (MIIT), is under investigation for “violations of discipline and law“. Chinese state media reported this on Thursday, without giving details. The MIIT is responsible for overseeing and developing high-tech sectors in China, overseeing a large part of the Chinese economy, including telecommunications, semiconductors, electric vehicles and vaccine production.
Born in Hebei, Xiao has risen in recent years to become one of the most powerful politicians in the People’s Republic. Previously, the now 62-year-old headed the State Administration for Market Regulation and, before that, the Assets Supervision and Administration Commission of the State Council. He served as a deputy member of the Communist Party’s 17th Central Committee and was a member of the Party’s dreaded Disciplinary Commission, which has currently launched the investigation against him. Xiao made his last public appearance on July 6, when he chaired a virtual conference of the BRICS group of countries that gathered the information ministers of Brazil, Russia, India, and South Africa.
Xiao’s name was missing from the list of 293 officials to attend the 20th Party Congress in the second half of the year released by the Communist Party on Wednesday. As a serving minister, Xiao should have been listed. The 20th Party Congress in the fall of 2022 will bring major staff changes to China’s political system (China.Table reported). Xi will seek a third term in office. At the same time, a generational change is underway, with about half of the Central Committee exceeding the age limit. rtr/fpe
The presidents of China and the US spoke on the phone for more than two hours on Thursday, harboring a roughly equal measure of mutual warnings and reassurances. One important topic was Taiwan, including the upcoming visit of top politician Nancy Pelosi to the island (China.Table reported). “Those who play with fire will eventually get burned,” Chinese media quoted Xi as saying. The US side should adhere to the one-China principle in word and deed. The Chinese position was consistent. Xi thus accuses the US of currently shifting its stance.
But the overall tone of the conversation, despite the threats, was reportedly more one of trying to defuse the situation, according to both sides. Biden stressed the importance of “avoiding misperception and miscalculation,” and Xi fully agreed. The way to do that would be to “see cooperation in areas of common interest”. Biden stressed that US policy toward Taiwan has not fundamentally changed.
Both sides promised to stay in contact and to deepen “communication and cooperation” again. This would be important because the whole world needs to rely on good relations between the two countries, Biden stressed. Close coordination is also important for dealing with the current difficult economic situation around the world, Xi said. Both countries would play a crucial role in “upholding world peace”.
Xi and Biden last spoke to each other in March and before that in November. The phrase “playing with fire” also came up from the Chinese side at that time, so there is no sign of escalation here. On a positive note, there is a willingness to exchange views regularly (China.Table reported). “The president wants to make sure that the lines of communication with President Xi remain open because they need to,” a White House spokesman said, according to a report by AP.
Among other things, Xi warned Biden during the conversation to recognize and uphold the “international system with the United Nations at its core.” Experts consider that to be cynical, given China’s support for Russia’s invasion of Ukraine. “I hope Biden reminded Xi that his partner Russia is blatantly violating the UN Charter,” law professor Julian Ku of the private Hofstra University in New York wrote on Twitter. fin
China wants to increase the share of non-fossil energy sources in total consumption by an average of one percent annually by 2030. This is intended to achieve the climate target of using 25 percent non-fossil energy sources by 2030. This was recently announced by the National Energy Commission. Non-fossil fuels, including wind, solar, nuclear and hydropower, covered 16.6 percent of China’s total energy demand in 2021, up from 15.9 percent in 2020.
According to energy expert Liu Hongqiao, the growth target of one percent per year is very conservative. The massive expansion of renewable energies will probably ensure faster growth. China plans to double electricity generation from wind and solar power plants by 2025 (China.Table reported). The country already has the world’s largest capacity for solar and wind power.
Meanwhile, China’s major utilities have stockpiled a record amount of coal. According to authorities, the reserves amount to 170 million tons. Last year, high coal prices and low power plant reserves led to weeks of electricity shortages and rationing. That is to be prevented this year at all costs.
In the first half of this year, China exported 78.6 gigawatts (GW) of solar equipment and components, up 74 percent from last year, according to Reuters. Revenue also more than doubled year-on-year, reaching nearly $26 billion. nib
The UN Human Rights Council’s CCPR Commission of Experts has urged the Hong Kong government to revoke the National Security Act. The commission expressed grave concern over the arbitrary application of the new legal framework introduced in 2020 in its latest report on Wednesday. The National Security Law takes precedence over other local laws and consequently overrides citizens’ fundamental rights and freedoms protected by international conventions, the paper said.
While the commission also attests to progress made by the city in its efforts to reduce discrimination against migrants, women or the LGBT community, it criticizes the lack of legal certainty left by the security law. In twelve cases, there were 44 charges that could not be clearly assigned. A total of 200 individuals have been arrested so far for alleged violations of the law, including twelve minors.
The Commission is also concerned about the possibility of transferring national security cases to PRC authorities. This would undermine Hong Kong’s obligation under the International Covenant on Civil and Political Rights (ICCPR). The ICCPR is enshrined in Hong Kong’s Basic Law. The People’s Republic, on the other hand, signed the treaty in the 1990s but never ratified it.
The lack of legal recourse for defendants is also threatening and the ability of the city’s head of government and police and investigative authorities to influence the application of the law is not lawful. Moreover, it is unclear to what extent the extraterritorial application of the security law is defined.
The committee criticized the closure of an “excessive number of civil society organizations, such as trade unions and student unions, which have relocated or ceased to operate since the enactment of the NSL.” The committee called on city authorities to lift restrictions on freedom of association and guarantee that no one who participated in the UN review would be prosecuted under the law.
In its report, the committee also urges Hong Kong to allow critical and dissenting opinions, rather than referring to relevant clauses in the Security Law that define state subversion as a violation. The city should ensure that all cases are reviewed and that no one is prosecuted for “legitimately exercising” the right to free speech. grz
Carlos Tavares, CEO of the car company Stellantis, gave as the reason for the withdrawal of the Jeep brand over possible government interference in its business, Bloomberg reports. He stated that the company wanted to break away from the Chinese market to avoid becoming a victim of political tensions. Tavares cited punitive measures against Western companies in particular as a possible scenario. “We don’t want to be a victim of cross-sanctions as has been the case for other companies in other regions of the world recently.”
Stellantis will soon close its Jeep plant in China. Last week, the group announced that it would withdraw from its joint venture with Guangzhou Automobile (China.Table reported). The joint venture had existed for 12 years. Stellantis is the name of the car manufacturer group formed by the merger of Fiat Chrysler and PSA (Citroën, Opel, Peugeot). fin
The remains of a Chinese launch vehicle will hit Earth this weekend during an uncontrolled re-entry into the atmosphere. It is still unclear exactly when and where the pieces will hit Earth. The Long March 5B rocket had launched Sunday to deliver a laboratory module to a new Chinese space station currently under construction in Earth’s orbit. It is the third uncontrolled Chinese rocket crash in three years.
Chinese Foreign Ministry spokesman Zhao Lijian said on Wednesday that the re-entry of the 30-meter-long and 22-ton main core stage was being closely monitored. However, he said there was virtually no danger to people on the Earth’s surface. The largest parts of the rocket body will disintegrate and burn up as they enter the atmosphere.
However, small and medium-sized tanks and engine components could remain and rain down over an area about 2,000 km long and 70 km wide, independent US analysts explained on Wednesday. In May 2020, fragments up to twelve meters long from another Chinese Long March missile damaged several buildings in the Ivory Coast.
NASA and other organizations accused China of a lack of transparency last year after the Beijing government kept quiet about the estimated trajectory as well as the re-entry window for debris in May 2021. Most major spacefaring nations typically strive to design their rockets to avoid large, uncontrolled re-entries, aerospace analyst Ted Muelhaupt told Reuters. The first stage falls back toward Earth shortly after launch, which would allow more accurate identification of the impact location. In the case of the Chinese 5B rockets, however, the first stage enters Earth orbit with its cargo, only to crash uncontrollably a few days later. rtr/fpe
“Don’t take any drugs,” Chen Tianzhuo urges his 12-member troupe shortly before the big show. But stimulants would certainly be helpful tonight: the “Asian Dope Boys,” as Chen’s art collective is called, want to dance, sing, scream, roll around in mud they’ve scraped together themselves, and perform tribal rituals they’ve invented themselves for a whole twelve hours at the Berlin techno club “Traumabar” until they, and the audience, enter an out-of-body state. Drugs, says the shy master of ceremonies, would only distort the authentic trance experience.
Born in Beijing in 1985, Chen Tianzhuo is one of China’s most original and provocative artists. His productions blend contemporary art, avant-garde theater, archaic rituals and ecstatic club culture into a surreal dream world. His sets and costumes appear as if the demons of Tibetan Thangka scroll paintings were resurrected in brightly colored computer game aesthetics.
The artist, who practices Tibetan Buddhism, wants to create “collective rituals” that are anchored in the present, but also draw their inspiration from traditional trance dances from Tibet, Indonesia and the Philippines. Especially in China’s big cities, ritual spirituality is all but extinct, Chen says. “Our modern age lacks fairy tales and mythologies. As a capitalist society, we have created new mantras: ‘Just Do It!’. I want to create rituals that create a community based on self-empowerment and freedom from rigid systems.”
Chen, who usually remains in the background during his performances, started out as a painter and designer. He earned his master’s degree at Chelsea College of Art and Design in London. After graduating, however, he was eager to return to China. “The art scene in China lags behind almost every major European city. But that also means you can still get challenging things going here.” In his home country, his performances, which often involve nudity, are mostly seen in techno clubs and other off-spaces. This is less official than theaters and galleries, and thus less subject to censorship, Chen says.
Although this means that he also bypasses the Chinese art market and its wealthy collectors, his influence has grown steadily in recent years. Artists from all over Asia, but also from Europe, came to Shanghai to work with him. His Asian Dope Boys represented a new self-confidence among young Asian artists who were going global but no longer pandering to Western expectations. “Young people were hungry for our events, for art and music,” Chen says. But then came the pandemic: “I felt like I had retired.” He says he spent more than two years in his Shanghai studio planning events that then couldn’t happen. The club scene, his favorite habitat, was shut down for months. “At some point, I got tired of it and started painting again,” Chen says.
His appearance in Berlin will be his first major performance in more than two years. “I don’t know if the pandemic has completely sucked out my energy. Can I still pull something like this off?” Chen asks uncertainly as his crew swarms out into the summer evening for dinner. The next morning shows that the fear was unfounded. Exhausted and happy, the performers lie in each other’s arms. The stage sets lie shot to pieces on the floor. “We definitely pushed our own limits and created a universe that kind of grew on its own,” Chen says. “That night will motivate me for a long time to come.” Fabian Peltsch
Benjamin Weyrauch was appointed Senior Manager Technology at Porsche China last month. The development engineer will further develop the Advanced Driver Assistance Systems (ADAS) in Shanghai, which are necessary for autonomous driving.
Jiaqi Zhu took over the position of Senior Consultant & Business Development China Markets at Vogel Communications Group in July. The Wuerzburg-based company provides corporate communications and specialist information on topics such as automotive and mechanical engineering industries. As product manager, Zhu previously co-designed the Vogel Market Insights China Report.
Is something changing in your organization? Why not let us know at heads@table.media!
Critical artist Badiucao is currently exhibiting his works in Prague. They include performances, graphics, paintings, videos and multimedia installations. Topics include human rights and censorship in China, the repression of protests in Hong Kong and the situation of the Uyghurs, but also the situation in Myanmar. Badiucao lives in Australia.
Only a fraction of the microchips used worldwide are manufactured in Europe. By revenue, the share is so small that it only shows up in statistics under “Other”. The US at least makes an appearance with a single-digit percentage. In short, almost all chips come from Asia. It is no wonder that Joe Biden has taken the initiative and is subsidizing the restoration of an American semiconductor industry.
And the EU? It has launched an initiative that is showing initial success. But it will be years before more semiconductors are produced domestically again. Until then, we can only pray and hope that nothing else goes wrong in geopolitical terms. Otherwise, the assembly lines in German industry, the basis of our prosperity, will grind to a halt. The semiconductor situation could turn into an even worse repeat of the drama surrounding Russian energy sources, analyzes Felix Lee.
There are many Sinologists who are not fluent in Chinese. But there have hardly been any graduate Sinologists who have never been to Asia at all. The pandemic has brought about a new phenomenon here as well. This summer semester marks the graduation of the first bachelor’s degree class that has been largely barred from traveling to the Far East. Amelie Richter has summarized the devastating psychological effect this has had on the new generation of students interested in China.
They are at the heart of modern industrial products, and whoever masters their production will decide who is the leader in future technologies: Semiconductors, more commonly known as microchips. That is why China, the USA and the EU are currently doing everything to bolster their technological position.
The USA is now pressing ahead. The Senate passed a bill to this effect on Wednesday. All that remains is the approval of the House of Representatives, which is considered certain. But the EU and China are also trying hard to boost their own semiconductor production with subsidies, tax breaks and other incentives. The EU has already presented a corresponding proposal for a bundle of measures with the European Chips Act (Europe.Table reported).
The stakes are high. It is no longer just a matter of principle to be at the forefront of technology. In the wake of geopolitical and trade rivalries, national economies aim to restore their manufacturing independence after decades of relying on foreign sourcing. The pandemic has shown, not least to the German electronics and automotive industries, what happens when supplies from the Far East fail to arrive. Some car manufacturers have had to cut their production by a third at times.
Currently, more than two-thirds of all modern semiconductors are manufactured in Taiwan, South Korea, China and Japan. The Germans do not want to rely on supplies from Taiwan in particular in the long term. After all, there is a fear that the leadership in Beijing will launch an attack on the democratically governed island state because it considers Taiwan to be its own territory. Recently, the People’s Republic has made this clearer than ever.
Not least in light of the Chinese catch-up campaign, Albert Heuberger, chip expert and Director of the Fraunhofer Institute for Integrated Circuits, believes that the European Chips Act is both right and important. The chip industry is a key industry that strongly determines the technological foundations in this country. “We also have to fight for such manufacturing industries to be located in Germany and Europe so that we have the know-how,” Heuberger said. “Chip companies will base their location decisions on where the right workforce is available.”
The EU already acted in the spring with the European Chips Act and initiated a program of around €15 billion to expand the domestic chip industry, in addition to the already planned public investment of €30 billion.
Admittedly, there is also criticism of the Commission’s approach (Europe.Table reported): The focus on ultra-modern chips ignores the fact that simpler components are also needed as workhorses of the industry. In addition, Brussels is not providing enough money out of its own pocket. Of the €43 billion, only €4 billion will actually come from EU funds; the rest is to be provided by member states or private investors.
But the EU’s subsidy programs show effect: Bosch has announced plans to take advantage of the subsidies and invest almost €1 billion in its semiconductor development centers in the German cities of Reutlingen and Dresden, among others. The chip giants STMicroelectronics and GlobalFoundries want to invest around €5.7 billion in a new semiconductor plant in France. The US company Intel even wants to build a new mega-chip site in Germany and has budgeted €17 billion for the construction of two semiconductor plants.
Washington now wants to directly stimulate the domestic semiconductor industry with $52 billion. In addition, the US government intends to exempt chip factories from taxation and provide no less than $170 billion for the R&D of new semiconductors. Both the European Chips Act and the US program are designed to attract private investment through public subsidies.
China is putting up a similar amount of money as the USA. The state development fund is equipped with €170 billion. Regional players are also getting involved. The technology metropolis of Shenzhen currently has a manufacturer of memory chips in the works for €40 billion. Not all money always flows into the right channels when things need to happen fast (China.Table reported). But overall, funding already has an impact.
Despite sanctions imposed by the US on China’s high-tech sector, leading Chinese chipmaker SMIC has apparently managed to pull off a technical leap, also with massive government backing. The company has managed to ship its first chips with a structure width of just 7 nanometers. At least that is what the news agency Bloomberg reports. If this news proves true, then the learning curve would be considerable. Because until now, many observers assumed that China’s chip industry was behind the top countries Taiwan, South Korea and the USA by about four years.
The Chinese manufacturer SMIC has so far mainly been active in the 14-nanometer segment, i.e. in much larger semiconductors. The rule here is that the fewer nanometers wide the current paths are, the faster and more efficiently the components calculate. China is already extremely successful in the 14-nanometer range. With the transition to the 7-nanometer range, however, applications and thus market opportunities for Chinese products are broadening. Recently, Korean economics professor Keun Lee called older generation chips “almost worthless” in a guest article for China.Table.
It is not known whether the 7-nanometer chips are really market-ready and can be produced in large quantities while maintaining good quality. But what can be gleaned from this development is that the Chinese are obviously not as out of touch as the USA would like them to be. The harder it becomes to stock up on the global market, the more attractive it becomes to order from Chinese suppliers.
The fact is that German companies are also purchasing more and more chips from China. In 2001, China’s share of the global chip market was still less than one percent. By 2010, it had surpassed 10 percent. At the beginning of the pandemic, it reached 20 percent. According to US observers, it could reach nearly one quarter by 2030.
German experts have also been pointing to the rapid development in the People’s Republic for some time: “China already has a stronger ecosystem for chip design than Europe,” according to a joint analysis by the Berlin-based China think tank Merics and the Stiftung Neue Verantwortung last December. High investments would also enable Chinese companies to scale more quickly, i.e., to achieve higher quantities and thus lower prices.
Nevertheless, there is “a lot of catching up to do” in China compared to the US and its Asian neighbors, says Heuberger. The production of modern chips is a particularly challenging undertaking that requires a great deal of experience.
Heuberger also believes that the EU initiative will only show a clear effect in a few years. “In a growing market, we need to triple to quadruple production in Europe to get to the targeted 20 percent global market share. A period of five to eight years is needed before we catch up,” said Heuberger, who is also a spokesman for the Fraunhofer Group for Microelectronics.
The Merics study identifies European weaknesses primarily in so-called back-end manufacturing, that is, the assembly, testing and packaging of high-tech chips. However, this part of the production will become significantly more important in the future, especially for the development of high-performance and energy-efficient chips. China, on the other hand, already has a considerable global market share in back-end manufacturing, experts say. That is why Europe is likely to continue to rely on chips from China in the foreseeable future.
Sara Kettenmeyer puts it rather bluntly: “If I had known how my studies would turn out, I probably wouldn’t have started them the way I did.” Kettenmeyer is studying sinology, has completed six semesters, and should now actually be writing her bachelor’s thesis at Ludwig Maximilian University in Munich to complete her degree. She is part of the first cohort of sinology students in Germany who were unable to set foot in the People’s Republic during their entire studies due to the Covid pandemic.
Kettenmeyer began her sinology studies in the 2019/20 winter semester. In the first semester, everything was still normal, the 22-year-old says. Then she spent four semesters taking online classes. The summer semester of 2022, which runs at most German universities until the end of the month, was then back to presence classes. Her stay in China, which is actually part of the curriculum after the fourth semester, never happened.
“I applied several times to Chinese universities, received an acceptance letter from Beijing Normal University, but then the exchange didn’t happen,” says the student. The student council and staff of the sinology institute always tried to help, she says. “But they didn’t really know what was going on either.” For students, the lack of time studying abroad has had two consequences: “Some have dropped out in an advanced semester because it’s just frustrating,” Kettenmeyer says. And, “I don’t really know the language.” Other fellow students without any experience in China have similar feelings.
This became particularly apparent in the higher semesters when, for example, newspaper reading was added to the language lessons. You notice a difference between students who were able to travel to China before the Covid pandemic began – and sinologists who were not in a Mandarin-speaking environment during their studies, Kettenmeyer notes. She has decided not to complete her studies with her bachelor’s thesis at this point and instead to work for a year so that she can then follow-up her stay in China in the 2023/24 academic year.
The 22-year-old from Munich is not alone in her rather negative experience. In recent years, there has been an average higher number of dropouts than before the Covid pandemic, according to a sinology institute in the northern German region. The fact that the “run” on the field of study has not been the highest in recent years and that students are dropping out due to frustration is not a big surprise, according to a staff member who prefers to remain anonymous. The images of the harsh lockdown in Shanghai have been discussed among students, and have led to concerns among some about staying in China in the future. Despite everything, should it become evident that students will be able to enter the country again in 2023, she expects a sharp increase in enrollment for the winter semester.
Korbinian Rausch, also a student at LMU, began his sinology studies during and despite the pandemic. He has never visited the People’s Republic before. The 29-year-old previously studied history and politics and wrote his bachelor’s thesis on the relationship between Taiwan and China. When he reached his limits in understanding the sources, he decided to start studying sinology in 2020 – even though entering the People’s Republic was already practically impossible at that point. He had not planned a full year abroad anyway, since he already had a job. “But I had hoped to maybe attend a summer school in China.” Nothing came of that. He put his studies on hold, and is now officially only in his second semester. “But I’ll keep at it,” Rausch says.
Meanwhile, many scientists who already know China are urging the chance to return there. This does not only include German students. On Twitter, Instagram and other social networks, groups have formed that are calling to let academics back into the country under the hashtag #takeusbacktochina. In these groups, students exchange news – or vent their frustration about the situation. For many, a semester abroad in China is directly related to job prospects after graduation. Due to the entry restrictions, they potentially also face financial difficulties. Not everyone can afford to delay their studies.
The “substitute program” with online classes at Chinese universities does not equal a real exchange, says Greta Biondi. The Italian just this month finished her double degree at Ca’ Foscari University in Venice and Capital Normal University in Beijing – and has completed two years of Chinese online studies, but has never been to the People’s Republic. While she thought it was great that she was able to study at a Chinese university at all, Biondi says.
But the second year, in particular, had not been a good experience due to the time difference and dwindling motivation among students and teachers. Classes and exams took place partly at night in Europe, and language exchanges almost didn’t happen at all, Biondi said. “Now I feel like I can do an economic transaction in Mandarin but not ask for simple everyday things.”
Veronica decided against studying online at a Chinese university altogether. The 24-year-old Spanish student earned her bachelor’s degree in 2020 and was accepted by universities in China. “I wanted to study in China, but by then it was already clear that it was not possible.” She had never been to the People’s Republic. She chose a master’s program at Leiden University and now wants to pursue her Ph.D. in China afterward. “It’s not just about the language,” Veronika says. “You can’t really work towards China without having ever been there.”
To revive academic exchanges, the Chinese government is working on several ideas, a representative of a European-Chinese university joint venture told China.Table. Charter flights, for example, are being considered, as is the establishment of “academic hubs” in several cities to allow students to re-enter the country, at least for important fieldwork. There seems to be a strong effort by the government to bring students back. However, she does not want to talk about it openly, because then “my students might get their hopes up that it will happen quickly, and we can’t guarantee that.”
Xiao Yaqing, the Minister of Industry and Information Technology (MIIT), is under investigation for “violations of discipline and law“. Chinese state media reported this on Thursday, without giving details. The MIIT is responsible for overseeing and developing high-tech sectors in China, overseeing a large part of the Chinese economy, including telecommunications, semiconductors, electric vehicles and vaccine production.
Born in Hebei, Xiao has risen in recent years to become one of the most powerful politicians in the People’s Republic. Previously, the now 62-year-old headed the State Administration for Market Regulation and, before that, the Assets Supervision and Administration Commission of the State Council. He served as a deputy member of the Communist Party’s 17th Central Committee and was a member of the Party’s dreaded Disciplinary Commission, which has currently launched the investigation against him. Xiao made his last public appearance on July 6, when he chaired a virtual conference of the BRICS group of countries that gathered the information ministers of Brazil, Russia, India, and South Africa.
Xiao’s name was missing from the list of 293 officials to attend the 20th Party Congress in the second half of the year released by the Communist Party on Wednesday. As a serving minister, Xiao should have been listed. The 20th Party Congress in the fall of 2022 will bring major staff changes to China’s political system (China.Table reported). Xi will seek a third term in office. At the same time, a generational change is underway, with about half of the Central Committee exceeding the age limit. rtr/fpe
The presidents of China and the US spoke on the phone for more than two hours on Thursday, harboring a roughly equal measure of mutual warnings and reassurances. One important topic was Taiwan, including the upcoming visit of top politician Nancy Pelosi to the island (China.Table reported). “Those who play with fire will eventually get burned,” Chinese media quoted Xi as saying. The US side should adhere to the one-China principle in word and deed. The Chinese position was consistent. Xi thus accuses the US of currently shifting its stance.
But the overall tone of the conversation, despite the threats, was reportedly more one of trying to defuse the situation, according to both sides. Biden stressed the importance of “avoiding misperception and miscalculation,” and Xi fully agreed. The way to do that would be to “see cooperation in areas of common interest”. Biden stressed that US policy toward Taiwan has not fundamentally changed.
Both sides promised to stay in contact and to deepen “communication and cooperation” again. This would be important because the whole world needs to rely on good relations between the two countries, Biden stressed. Close coordination is also important for dealing with the current difficult economic situation around the world, Xi said. Both countries would play a crucial role in “upholding world peace”.
Xi and Biden last spoke to each other in March and before that in November. The phrase “playing with fire” also came up from the Chinese side at that time, so there is no sign of escalation here. On a positive note, there is a willingness to exchange views regularly (China.Table reported). “The president wants to make sure that the lines of communication with President Xi remain open because they need to,” a White House spokesman said, according to a report by AP.
Among other things, Xi warned Biden during the conversation to recognize and uphold the “international system with the United Nations at its core.” Experts consider that to be cynical, given China’s support for Russia’s invasion of Ukraine. “I hope Biden reminded Xi that his partner Russia is blatantly violating the UN Charter,” law professor Julian Ku of the private Hofstra University in New York wrote on Twitter. fin
China wants to increase the share of non-fossil energy sources in total consumption by an average of one percent annually by 2030. This is intended to achieve the climate target of using 25 percent non-fossil energy sources by 2030. This was recently announced by the National Energy Commission. Non-fossil fuels, including wind, solar, nuclear and hydropower, covered 16.6 percent of China’s total energy demand in 2021, up from 15.9 percent in 2020.
According to energy expert Liu Hongqiao, the growth target of one percent per year is very conservative. The massive expansion of renewable energies will probably ensure faster growth. China plans to double electricity generation from wind and solar power plants by 2025 (China.Table reported). The country already has the world’s largest capacity for solar and wind power.
Meanwhile, China’s major utilities have stockpiled a record amount of coal. According to authorities, the reserves amount to 170 million tons. Last year, high coal prices and low power plant reserves led to weeks of electricity shortages and rationing. That is to be prevented this year at all costs.
In the first half of this year, China exported 78.6 gigawatts (GW) of solar equipment and components, up 74 percent from last year, according to Reuters. Revenue also more than doubled year-on-year, reaching nearly $26 billion. nib
The UN Human Rights Council’s CCPR Commission of Experts has urged the Hong Kong government to revoke the National Security Act. The commission expressed grave concern over the arbitrary application of the new legal framework introduced in 2020 in its latest report on Wednesday. The National Security Law takes precedence over other local laws and consequently overrides citizens’ fundamental rights and freedoms protected by international conventions, the paper said.
While the commission also attests to progress made by the city in its efforts to reduce discrimination against migrants, women or the LGBT community, it criticizes the lack of legal certainty left by the security law. In twelve cases, there were 44 charges that could not be clearly assigned. A total of 200 individuals have been arrested so far for alleged violations of the law, including twelve minors.
The Commission is also concerned about the possibility of transferring national security cases to PRC authorities. This would undermine Hong Kong’s obligation under the International Covenant on Civil and Political Rights (ICCPR). The ICCPR is enshrined in Hong Kong’s Basic Law. The People’s Republic, on the other hand, signed the treaty in the 1990s but never ratified it.
The lack of legal recourse for defendants is also threatening and the ability of the city’s head of government and police and investigative authorities to influence the application of the law is not lawful. Moreover, it is unclear to what extent the extraterritorial application of the security law is defined.
The committee criticized the closure of an “excessive number of civil society organizations, such as trade unions and student unions, which have relocated or ceased to operate since the enactment of the NSL.” The committee called on city authorities to lift restrictions on freedom of association and guarantee that no one who participated in the UN review would be prosecuted under the law.
In its report, the committee also urges Hong Kong to allow critical and dissenting opinions, rather than referring to relevant clauses in the Security Law that define state subversion as a violation. The city should ensure that all cases are reviewed and that no one is prosecuted for “legitimately exercising” the right to free speech. grz
Carlos Tavares, CEO of the car company Stellantis, gave as the reason for the withdrawal of the Jeep brand over possible government interference in its business, Bloomberg reports. He stated that the company wanted to break away from the Chinese market to avoid becoming a victim of political tensions. Tavares cited punitive measures against Western companies in particular as a possible scenario. “We don’t want to be a victim of cross-sanctions as has been the case for other companies in other regions of the world recently.”
Stellantis will soon close its Jeep plant in China. Last week, the group announced that it would withdraw from its joint venture with Guangzhou Automobile (China.Table reported). The joint venture had existed for 12 years. Stellantis is the name of the car manufacturer group formed by the merger of Fiat Chrysler and PSA (Citroën, Opel, Peugeot). fin
The remains of a Chinese launch vehicle will hit Earth this weekend during an uncontrolled re-entry into the atmosphere. It is still unclear exactly when and where the pieces will hit Earth. The Long March 5B rocket had launched Sunday to deliver a laboratory module to a new Chinese space station currently under construction in Earth’s orbit. It is the third uncontrolled Chinese rocket crash in three years.
Chinese Foreign Ministry spokesman Zhao Lijian said on Wednesday that the re-entry of the 30-meter-long and 22-ton main core stage was being closely monitored. However, he said there was virtually no danger to people on the Earth’s surface. The largest parts of the rocket body will disintegrate and burn up as they enter the atmosphere.
However, small and medium-sized tanks and engine components could remain and rain down over an area about 2,000 km long and 70 km wide, independent US analysts explained on Wednesday. In May 2020, fragments up to twelve meters long from another Chinese Long March missile damaged several buildings in the Ivory Coast.
NASA and other organizations accused China of a lack of transparency last year after the Beijing government kept quiet about the estimated trajectory as well as the re-entry window for debris in May 2021. Most major spacefaring nations typically strive to design their rockets to avoid large, uncontrolled re-entries, aerospace analyst Ted Muelhaupt told Reuters. The first stage falls back toward Earth shortly after launch, which would allow more accurate identification of the impact location. In the case of the Chinese 5B rockets, however, the first stage enters Earth orbit with its cargo, only to crash uncontrollably a few days later. rtr/fpe
“Don’t take any drugs,” Chen Tianzhuo urges his 12-member troupe shortly before the big show. But stimulants would certainly be helpful tonight: the “Asian Dope Boys,” as Chen’s art collective is called, want to dance, sing, scream, roll around in mud they’ve scraped together themselves, and perform tribal rituals they’ve invented themselves for a whole twelve hours at the Berlin techno club “Traumabar” until they, and the audience, enter an out-of-body state. Drugs, says the shy master of ceremonies, would only distort the authentic trance experience.
Born in Beijing in 1985, Chen Tianzhuo is one of China’s most original and provocative artists. His productions blend contemporary art, avant-garde theater, archaic rituals and ecstatic club culture into a surreal dream world. His sets and costumes appear as if the demons of Tibetan Thangka scroll paintings were resurrected in brightly colored computer game aesthetics.
The artist, who practices Tibetan Buddhism, wants to create “collective rituals” that are anchored in the present, but also draw their inspiration from traditional trance dances from Tibet, Indonesia and the Philippines. Especially in China’s big cities, ritual spirituality is all but extinct, Chen says. “Our modern age lacks fairy tales and mythologies. As a capitalist society, we have created new mantras: ‘Just Do It!’. I want to create rituals that create a community based on self-empowerment and freedom from rigid systems.”
Chen, who usually remains in the background during his performances, started out as a painter and designer. He earned his master’s degree at Chelsea College of Art and Design in London. After graduating, however, he was eager to return to China. “The art scene in China lags behind almost every major European city. But that also means you can still get challenging things going here.” In his home country, his performances, which often involve nudity, are mostly seen in techno clubs and other off-spaces. This is less official than theaters and galleries, and thus less subject to censorship, Chen says.
Although this means that he also bypasses the Chinese art market and its wealthy collectors, his influence has grown steadily in recent years. Artists from all over Asia, but also from Europe, came to Shanghai to work with him. His Asian Dope Boys represented a new self-confidence among young Asian artists who were going global but no longer pandering to Western expectations. “Young people were hungry for our events, for art and music,” Chen says. But then came the pandemic: “I felt like I had retired.” He says he spent more than two years in his Shanghai studio planning events that then couldn’t happen. The club scene, his favorite habitat, was shut down for months. “At some point, I got tired of it and started painting again,” Chen says.
His appearance in Berlin will be his first major performance in more than two years. “I don’t know if the pandemic has completely sucked out my energy. Can I still pull something like this off?” Chen asks uncertainly as his crew swarms out into the summer evening for dinner. The next morning shows that the fear was unfounded. Exhausted and happy, the performers lie in each other’s arms. The stage sets lie shot to pieces on the floor. “We definitely pushed our own limits and created a universe that kind of grew on its own,” Chen says. “That night will motivate me for a long time to come.” Fabian Peltsch
Benjamin Weyrauch was appointed Senior Manager Technology at Porsche China last month. The development engineer will further develop the Advanced Driver Assistance Systems (ADAS) in Shanghai, which are necessary for autonomous driving.
Jiaqi Zhu took over the position of Senior Consultant & Business Development China Markets at Vogel Communications Group in July. The Wuerzburg-based company provides corporate communications and specialist information on topics such as automotive and mechanical engineering industries. As product manager, Zhu previously co-designed the Vogel Market Insights China Report.
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Critical artist Badiucao is currently exhibiting his works in Prague. They include performances, graphics, paintings, videos and multimedia installations. Topics include human rights and censorship in China, the repression of protests in Hong Kong and the situation of the Uyghurs, but also the situation in Myanmar. Badiucao lives in Australia.