Germany is noticeably affected by climate change. But that’s nothing compared to what China faces. A UN report warns of ever higher temperatures on the planet, expanding deserts and rising sea levels. In our Feature of the consequences for China, we pay particular attention to coastal economic centers. Guangzhou and Hong Kong, Shanghai and Ningbo are at risk of flooding. Nico Beckert describes what the government plans to do about it.
The Chinese Communist Party was once formed as a group of the country’s most rebellious minds. It cultivates the myth of this first generation of persecuted comrades and presents them to the youth as role models. Yet the party fears nothing as much as rebellious, defiant characters who might strive for revolution. Today, it’s mainly careerist types who join the CP, writes Felix Lee in the new part of our series on the anniversary of the party’s founding. It has become an elite organization.
What started as a supply chain glitch has now become a veritable semiconductor drama. Car manufacturers are still waiting far too long for the chips they need for their products. In an interview, Merics expert John Lee explains why the industry was not better prepared – and how Germany can make its supply chains more robust.
In a new forecast, the United Nations (UN) issued an urgent warning about the consequences of climate change and the rise in temperature. In one of the next five years, the value of 1.5 degrees above the pre-industrial level could be reached. The international community had actually aimed to limit the temperature rise to well below two degrees by the end of the century and ideally to reach the 1.5-degree mark. This target can hardly be achieved.
The United Nations is issuing an urgent warning about the consequences. “Higher temperatures mean greater ice melt, higher sea levels, more heat waves, as well as greater consequences for food security, health, the environment, and sustainable development,” says Petteri Taalas, Secretary-General of the World Meteorological Organization. For China, temperature records and rising sea levels have dramatic consequences – as Shanghai is considered the most vulnerable city in the world to rising sea levels. With a temperature rise of two degrees, a good 40 percent of the population is threatened by floods.
The metropolitan region of the Pearl River Delta is particularly at risk. At the same time, the Gobi Desert has been expanding for years. Not least against this background, Xi Jinping presented ambitious climate targets in September 2020: China should peak its carbon emissions before 2030 and achieve carbon neutrality before 2060. The new UN data make a faster reduction of climate-damaging greenhouse gases necessary, Taalas urges all countries.
Sea levels off China’s coasts are rising even faster than the global average. This is shown in a new report by the Ministry of National Resources. In 2020, the water was 7.3 centimeters above average from 1993 to 2011, and a further rise of 5.5 to 17 centimeters is forecast for the next 30 years.
What sounds little, however, is already having a massive impact on coastal regions. Rising sea levels make storm surges more likely and intensifies them. Between 2005 and 2015, more than 200 storm surges hit the coast of China. Typhoon Hagupit alone caused around $11 billion worth of damage to infrastructure and agriculture in August 2020.
Similarly, rising sea levels are contributing to coastal erosion and could salinate drinking water reservoirs. Last year, emergency measures were taken in the Pearl River Delta to secure the region’s water supply. The combination of little rainfall and seawater intrusion threatened to salinate drinking water reservoirs.
According to climate experts, the effects will continue to increase. According to various studies, the cities in the Pearl River Delta, such as Shenzhen, Guangzhou, Dongguan, but also Tianjin, and Shantou, are the urban regions that will be most affected by rising sea levels worldwide. In Shanghai, a temperature rise of two degrees means that a good 40 percent of the population is at risk of sea level rise. This makes the metropolis the most endangered city in the world in terms of population.
Overall, China has the world’s largest population living at low elevations along the coast. By 2100, an area of land in China that is currently home to 43 million people is at risk of being permanently inundated by local floods, according to a study by climate scientists from the organization Climate Central. That doesn’t even include extreme weather events. And many cities at risk are important business locations: Shanghai is the commercial center of China, and numerous automotive, electronics, and petrochemical companies have settled in the cities of the Pearl River Delta, which are enormously important for global supply chains.
The cause of rising sea levels is climate change. The rise in temperature affects us in two ways: melting glaciers contribute about two-thirds of the sea level rise, and the expansion of warmer water contributes about one-third.
In absolute terms, the People’s Republic is now the world’s largest emitter of carbon dioxide. Almost 28 percent of annual global emissions are caused in China. The USA is now well behind with 14.5 percent. Therefore, the People’s Republic is making a significant contribution to climate change and sea-level rise. But at the same time, the figures are deceptive: Historically, the US (25 percent) and the EU (22 percent) have a higher share of man-made carbon emissions to date than China, with a share of just under 13 percent.
The problem of rising sea levels is exacerbated by the subsidence of many cities on China’s coasts. Pumping out large quantities of groundwater is virtually eroding the subsoil. Added to this is the massive weight of urban infrastructures – such as high-rise buildings – which is causing the land to sink. Some 30 coastal cities are affected. In Shanghai, attempts are being made to counteract the subsidence by refilling groundwater reservoirs. But the success of such measures has been limited: In 2018, the city still sank by an average of five millimeters. In some cases, the subsidence also affects dams that are supposed to protect against flooding.
China’s authorities are aware of the problem. According to the Ministry of National Resources, the country must “protect its coasts and adapt to rising sea levels.” The most vulnerable city, Shanghai, has invested heavily in infrastructure, building 520 kilometers of protective seawalls. Mechanical flood protection barriers have also been built.
The authorities have already recognized the problem of coastal protection in the 13th Five-Year Plan. In 2017, the Ministry of National Resources issued a plan for the construction of dams. It said that China had already built 14,500 kilometers of dams by 2015. But only about 6200 kilometers of them meet sufficiently high protection standards. By 2027, the dams should be improved and another 500 kilometers built “so that the safety of key cities and major economic centers seriously threatened by typhoons and storm surges can be basically guaranteed,” according to the document. The recently approved 14th Five-Year Plan also addresses the issue of coastal protection, saying that the construction of dams should be “guaranteed.” However, no details have been finalized yet.
In addition to such concrete protective structures, more and more cities are trying to adapt to rising sea levels and are pursuing the concept of the “sponge city.” The aim is to control and mitigate flooding by rebuilding infrastructure. The cities should be able to “absorb” more water so that dangerous water accumulations, such as flooding with strong currents, are prevented. Measures include, for example, water-absorbing asphalt and the creation of green spaces, as well as artificial lakes and newly created wetlands.
However, these “sponge cities” are only an adaptation to climate change. And the construction and maintenance of ever higher dams and protective walls are extremely costly, according to experts. So every measure taken today against climate change and further sea-level rise will pay off in the future because costs for adaptation and protection measures will be reduced.
Conveniently, it was raining when 13 men meet on a pleasure boat on July 31, 1921, on Nanhu, a lake about 90 kilometers southwest of Shanghai. After four days of deliberation, they had to interrupt their meeting in Shanghai for fear of police spies. Given the bad weather, few other tourists are on the lake. Nevertheless, the 13 men fall silent as soon as another boat passes them.
They are sitting at a table with fish dishes and have a game of mah-jong spread out in front of them. But only for show. They are not playing. Instead, there is heated discussion. One of these 13 men is a young, tall history teacher in scuffed clothes from Jiangxi province. His name: Mao Zedong.
This meeting on the excursion boat on July 31 is considered the founding meeting of the Communist Party of China. This year, the Chinese Communist Party is celebrating its 100th anniversary on July 1. For a month, cadres and officials across the country plan to celebrate their party at receptions, lectures, readings, and online events. But instead of fierce revolutionaries in workers’ and peasants’ garb, the receptions are likely to be attended by career-minded managerial types in suits and ties shaking hands in celebration. Because today the Chinese Communist Party is, above all, an elite organization of the rich, the powerful and the influential.
It starts with the entrance. With almost 92 million members, China’s CP is one of the largest parties in the world. But who thinks it will accept anyone interested is mistaken. On the contrary, applicants have to go through extensive admission procedures. And interest is high: of the 20 million applicants each year, only about one in ten makes it.
Traditionally, the CP was a party of workers and peasants. In modern China, however, this proportion has steadily declined. The proportion of party members with academic degrees now accounts for more than half. And the party has bucked all trends and became younger. One key reason: membership is associated with promotion opportunities, and not just in civil service careers or large state-owned enterprises. Many top managers from the private sector are also members of the CP, including Alibaba founder Jack Ma or Huawei CEO Ren Zhengfei.
Entrepreneurs, celebrities and important academics are usually asked directly if they want to become members. Ordinary mortals, on the other hand, are only considered applicants if they can present an impeccable CV. Good grades in school are a prerequisite, but not enough. Voluntary commitment and ideological steadfastness are also required.
The admission process itself consists of five stages. After the candidate has explained in detail in a written application why they want to become a member and a local party cell has decided whether to examine the candidate, it appoints two mentors who prepare them for the official admission process for a year. During this time, the candidate must write regular reflections on Marxism and the CP’s guidelines and attend a three-day party seminar. At the same time, at least eight colleagues, neighbors, and acquaintances are asked about the candidate.
Only when the candidate has undergone this procedure may he officially apply for party membership, on which a commission must decide. Even after the decision, a probationary period of one year applies.
Whoever wants to join the Communist Youth League as a pupil is usually recommended by the school principal. And this recommends a maximum of only two or three of his pupils per year. Then they have to go through a similar procedure as adults when joining the party.
But are all newcomers committed communists? Not really. A 2017 analysis by the Berlin-based China Institute Merics shows that most members joined not out of conviction but for career reasons. They were indifferent to ideological guidelines from party headquarters. Much more important to them are the networks of relationships “that open up for Party members in China’s administration and economy.” The Communist Party – a cadre for the elite.
Willy Lam, a political scientist at the Chinese University of Hong Kong, sees it as follows: The party talks a lot about communism. But in reality, it is concerned solely with the integration of the elite and its retention of power.
He does not consider this system stable. One indication: even rich party cadres are shifting their assets abroad. This is certainly not the communism envisioned by the 13 founding members in Nanhu 100 years ago.
Mr. Lee, the automotive industry is complaining about chip shortages worldwide. How dramatic is the situation really?
The automotive sector has certainly been affected as major companies such as Mercedes, Daimler, Ford, General Motors, Mazda and Nissan have been forced to reduce production. The lead time between ordering chips and the associated services, equipment, and materials is evident in many product categories.
Is the auto industry even the most affected?
According to one estimate, the global automotive sector’s total spending on semiconductors is less than what Apple buys just to make iPhones. However, many experts believe the constraints will remain this year and possibly through 2022. There are a limited number of suppliers in these product categories and building new capacity takes time.
What role does China play in this?
There is evidence that US export controls targeting Chinese companies, such as chipmaker SMIC, have exacerbated the situation by effectively reducing manufacturing capacity, forcing customers to switch their orders to other companies. The US export controls introduced in recent years have also led other Chinese companies besides Huawei, which are currently not targeted by the US government, to be concerned about the risk of being targeted. As a result, they have hoarded chips, further increasing the backlog of shipments.
Is an end to the shortage in sight?
Given the lead times for expanding production capacity combined with factors that have contributed to the bottlenecks – such as extreme weather events like droughts or storms – it is unlikely that the situation will improve noticeably this year. In Taiwan, where much of the world’s manufacturing capacity is located, there are severe shortages of water and electricity, both of which are needed in large quantities for semiconductor manufacturing. It has been announced that large new foundries will be built in the US. However, they will take years to come onstream and, even then, will only account for a small proportion of global capacity.
The pandemic is not the sole reason for the shortage. Was the auto industry ill-prepared for supply chain disruptions?
The main reasons for the semiconductor shortage are supplier concentration and long lead times for expanding production capacity. These factors cannot be shifted by automakers, although more prudent planning of potential disruptions to such a fragile supply chain might have reduced their current difficulties.
China declared semiconductor production to be a key industry and wants to become self-sufficient here. Is that even possible? If so, by when?
Achieving full self-sufficiency through the semiconductor supply chain would be complex and costly. Therefore, it is unlikely that any one country could achieve this alone. However, any group of nations would again resemble the existing network of partners. The policy goals and measures announced by the Chinese authorities in recent years suggest that they recognize this basic fact and are seeking more realistic goals with respect to improving the capabilities of Chinese companies along certain segments of the value chain.
What is a realistic time frame, in your opinion?
It is unlikely that China will achieve global dominance in any section of the semiconductor supply chain or even self-sufficiency in most product and service categories in ten years, regardless of the goals announced under “Made in China 2025.” However, compared to the state of affairs a decade ago, the prospects for the Chinese industry to close the gap noticeably with foreign industry leaders have improved. There is also the possibility that new materials and techniques will open up leapfrog opportunities for China.
How well are the Europeans positioned?
The European Union as a whole has strengths in certain parts of the global value chain but significant shortcomings in others. Given the structural factors that have shaped the global value chain to date, it is unlikely that the EU can address these shortcomings through European resources alone, even with smooth cooperation within the EU and the help of large sums of money. European policymakers would be well advised to seek long-term cooperation with foreign leaders in certain areas of the value chain while leveraging European strengths in other areas.
John Lee, Senior Analyst at the Mercator Institute for China Studies (Merics) coordinates the work of the research group on China’s use of digital technologies. Together with Stiftung Neue Verantwortung (SNV), both institutes, supported by the German Foreign Office, are researching the production structure of China’s semiconductor industry, its strengths and weaknesses, and interactions with European and other foreign technology providers.
Business in China is a matter for Audi AG’s CEO: When Markus Duesmann became Chairman of the Board of Management of the Ingolstadt carmaker in April 2020, the Supervisory Board also gave him responsibility for the largest foreign market. And here, the 52-year-old Audi CEO has a lot in plan: In March, he announced an electric offensive in China with new e-models as well as the construction of a new factory for premium EVs in Changchun. Six fully electric models are to be produced there by 2024 – in partnership with the German-Chinese joint venture FAW-Volkswagen.
“We want to and will play a leading role in China in the market for new energy vehicles and in the premium segment,” says Duesmann. So far, the company has sold almost seven million vehicles in China. Last year alone, it sold more than 700,000 vehicles, “the best result in Audi’s 30-year history in China.” It is true that the internal combustion engine is likely to play a decisive role in China for some years to come, and Audi expects EVs to account for 20 percent of the total market by 2025. Nevertheless, Markus Duesmann sees the future as electric: In China, he says, the shift toward sustainable mobility is in full swing, even if the EU is currently setting the pace with the Green Deal. “We want to play an active role in shaping this development.”
Markus Duesmann devoted most of his professional life to the world of combustion engines: Born in Heek near Muenster, he studied mechanical engineering at Muenster University of Applied Sciences. In 1992, he started as an engine designer at Mercedes-Benz in Stuttgart, and three years later, he moved to the development service provider FEV in Aachen. In 2004, he became the main department head for new diesel engines at DaimlerChrysler in Stuttgart and, after just one year, Head of Development for the Mercedes-Benz Formula 1 team. From 2007 to 2018, he held various management positions at BMW, most recently heading the Purchasing and Supplier Network division as a member of the Board of Management.
As a technology fan, Markus Duesmann is now enthusiastic about China’s openness toward new technologies. This willingness to implement innovations quickly impresses him just as much as the great willingness to learn and the curiosity of the people. The country is setting an enormous pace in digitalization in particular. Audi can see this in customer demands: They are, on average, 20 years younger than in Germany and have a high digital affinity, he said. “They have a much stronger demand for their own cars to seamlessly continue their digital lifestyles.”
Markus Duesmann was last in China at the beginning of 2019 and was impressed by the metropolises of Beijing, Shanghai, and Hong Kong, as well as the breathtaking nature. The contrasts in the People’s Republic are fascinating: “It is extremely exciting to observe how a millennia-old advanced culture meets global modernity and how the country is developing.
Audi, therefore, believes that it is important for the EU and China not to lose touch with each other – even in the face of strongly differing views and clear criticism. Markus Duesmann hopes that both sides will continue to work together constructively in the right places, especially on global issues such as climate and health protection. To avoid or resolve tensions, he said, multilateralism, free trade, and the international division of labor are needed. At the same time, the EU needs a common direction in global competition. In decarbonization, for example, Europe has the potential to lead the way with the Green Deal, he said. “The European way,” says Duesmann, “is something we should present with confidence.” Adrian Meyer
Jiangxi province is experiencing heavy rainfall. This road near the city of Yongxiu would be flooded completely – if the engineers hadn’t put protective walls on its left and right.
Germany is noticeably affected by climate change. But that’s nothing compared to what China faces. A UN report warns of ever higher temperatures on the planet, expanding deserts and rising sea levels. In our Feature of the consequences for China, we pay particular attention to coastal economic centers. Guangzhou and Hong Kong, Shanghai and Ningbo are at risk of flooding. Nico Beckert describes what the government plans to do about it.
The Chinese Communist Party was once formed as a group of the country’s most rebellious minds. It cultivates the myth of this first generation of persecuted comrades and presents them to the youth as role models. Yet the party fears nothing as much as rebellious, defiant characters who might strive for revolution. Today, it’s mainly careerist types who join the CP, writes Felix Lee in the new part of our series on the anniversary of the party’s founding. It has become an elite organization.
What started as a supply chain glitch has now become a veritable semiconductor drama. Car manufacturers are still waiting far too long for the chips they need for their products. In an interview, Merics expert John Lee explains why the industry was not better prepared – and how Germany can make its supply chains more robust.
In a new forecast, the United Nations (UN) issued an urgent warning about the consequences of climate change and the rise in temperature. In one of the next five years, the value of 1.5 degrees above the pre-industrial level could be reached. The international community had actually aimed to limit the temperature rise to well below two degrees by the end of the century and ideally to reach the 1.5-degree mark. This target can hardly be achieved.
The United Nations is issuing an urgent warning about the consequences. “Higher temperatures mean greater ice melt, higher sea levels, more heat waves, as well as greater consequences for food security, health, the environment, and sustainable development,” says Petteri Taalas, Secretary-General of the World Meteorological Organization. For China, temperature records and rising sea levels have dramatic consequences – as Shanghai is considered the most vulnerable city in the world to rising sea levels. With a temperature rise of two degrees, a good 40 percent of the population is threatened by floods.
The metropolitan region of the Pearl River Delta is particularly at risk. At the same time, the Gobi Desert has been expanding for years. Not least against this background, Xi Jinping presented ambitious climate targets in September 2020: China should peak its carbon emissions before 2030 and achieve carbon neutrality before 2060. The new UN data make a faster reduction of climate-damaging greenhouse gases necessary, Taalas urges all countries.
Sea levels off China’s coasts are rising even faster than the global average. This is shown in a new report by the Ministry of National Resources. In 2020, the water was 7.3 centimeters above average from 1993 to 2011, and a further rise of 5.5 to 17 centimeters is forecast for the next 30 years.
What sounds little, however, is already having a massive impact on coastal regions. Rising sea levels make storm surges more likely and intensifies them. Between 2005 and 2015, more than 200 storm surges hit the coast of China. Typhoon Hagupit alone caused around $11 billion worth of damage to infrastructure and agriculture in August 2020.
Similarly, rising sea levels are contributing to coastal erosion and could salinate drinking water reservoirs. Last year, emergency measures were taken in the Pearl River Delta to secure the region’s water supply. The combination of little rainfall and seawater intrusion threatened to salinate drinking water reservoirs.
According to climate experts, the effects will continue to increase. According to various studies, the cities in the Pearl River Delta, such as Shenzhen, Guangzhou, Dongguan, but also Tianjin, and Shantou, are the urban regions that will be most affected by rising sea levels worldwide. In Shanghai, a temperature rise of two degrees means that a good 40 percent of the population is at risk of sea level rise. This makes the metropolis the most endangered city in the world in terms of population.
Overall, China has the world’s largest population living at low elevations along the coast. By 2100, an area of land in China that is currently home to 43 million people is at risk of being permanently inundated by local floods, according to a study by climate scientists from the organization Climate Central. That doesn’t even include extreme weather events. And many cities at risk are important business locations: Shanghai is the commercial center of China, and numerous automotive, electronics, and petrochemical companies have settled in the cities of the Pearl River Delta, which are enormously important for global supply chains.
The cause of rising sea levels is climate change. The rise in temperature affects us in two ways: melting glaciers contribute about two-thirds of the sea level rise, and the expansion of warmer water contributes about one-third.
In absolute terms, the People’s Republic is now the world’s largest emitter of carbon dioxide. Almost 28 percent of annual global emissions are caused in China. The USA is now well behind with 14.5 percent. Therefore, the People’s Republic is making a significant contribution to climate change and sea-level rise. But at the same time, the figures are deceptive: Historically, the US (25 percent) and the EU (22 percent) have a higher share of man-made carbon emissions to date than China, with a share of just under 13 percent.
The problem of rising sea levels is exacerbated by the subsidence of many cities on China’s coasts. Pumping out large quantities of groundwater is virtually eroding the subsoil. Added to this is the massive weight of urban infrastructures – such as high-rise buildings – which is causing the land to sink. Some 30 coastal cities are affected. In Shanghai, attempts are being made to counteract the subsidence by refilling groundwater reservoirs. But the success of such measures has been limited: In 2018, the city still sank by an average of five millimeters. In some cases, the subsidence also affects dams that are supposed to protect against flooding.
China’s authorities are aware of the problem. According to the Ministry of National Resources, the country must “protect its coasts and adapt to rising sea levels.” The most vulnerable city, Shanghai, has invested heavily in infrastructure, building 520 kilometers of protective seawalls. Mechanical flood protection barriers have also been built.
The authorities have already recognized the problem of coastal protection in the 13th Five-Year Plan. In 2017, the Ministry of National Resources issued a plan for the construction of dams. It said that China had already built 14,500 kilometers of dams by 2015. But only about 6200 kilometers of them meet sufficiently high protection standards. By 2027, the dams should be improved and another 500 kilometers built “so that the safety of key cities and major economic centers seriously threatened by typhoons and storm surges can be basically guaranteed,” according to the document. The recently approved 14th Five-Year Plan also addresses the issue of coastal protection, saying that the construction of dams should be “guaranteed.” However, no details have been finalized yet.
In addition to such concrete protective structures, more and more cities are trying to adapt to rising sea levels and are pursuing the concept of the “sponge city.” The aim is to control and mitigate flooding by rebuilding infrastructure. The cities should be able to “absorb” more water so that dangerous water accumulations, such as flooding with strong currents, are prevented. Measures include, for example, water-absorbing asphalt and the creation of green spaces, as well as artificial lakes and newly created wetlands.
However, these “sponge cities” are only an adaptation to climate change. And the construction and maintenance of ever higher dams and protective walls are extremely costly, according to experts. So every measure taken today against climate change and further sea-level rise will pay off in the future because costs for adaptation and protection measures will be reduced.
Conveniently, it was raining when 13 men meet on a pleasure boat on July 31, 1921, on Nanhu, a lake about 90 kilometers southwest of Shanghai. After four days of deliberation, they had to interrupt their meeting in Shanghai for fear of police spies. Given the bad weather, few other tourists are on the lake. Nevertheless, the 13 men fall silent as soon as another boat passes them.
They are sitting at a table with fish dishes and have a game of mah-jong spread out in front of them. But only for show. They are not playing. Instead, there is heated discussion. One of these 13 men is a young, tall history teacher in scuffed clothes from Jiangxi province. His name: Mao Zedong.
This meeting on the excursion boat on July 31 is considered the founding meeting of the Communist Party of China. This year, the Chinese Communist Party is celebrating its 100th anniversary on July 1. For a month, cadres and officials across the country plan to celebrate their party at receptions, lectures, readings, and online events. But instead of fierce revolutionaries in workers’ and peasants’ garb, the receptions are likely to be attended by career-minded managerial types in suits and ties shaking hands in celebration. Because today the Chinese Communist Party is, above all, an elite organization of the rich, the powerful and the influential.
It starts with the entrance. With almost 92 million members, China’s CP is one of the largest parties in the world. But who thinks it will accept anyone interested is mistaken. On the contrary, applicants have to go through extensive admission procedures. And interest is high: of the 20 million applicants each year, only about one in ten makes it.
Traditionally, the CP was a party of workers and peasants. In modern China, however, this proportion has steadily declined. The proportion of party members with academic degrees now accounts for more than half. And the party has bucked all trends and became younger. One key reason: membership is associated with promotion opportunities, and not just in civil service careers or large state-owned enterprises. Many top managers from the private sector are also members of the CP, including Alibaba founder Jack Ma or Huawei CEO Ren Zhengfei.
Entrepreneurs, celebrities and important academics are usually asked directly if they want to become members. Ordinary mortals, on the other hand, are only considered applicants if they can present an impeccable CV. Good grades in school are a prerequisite, but not enough. Voluntary commitment and ideological steadfastness are also required.
The admission process itself consists of five stages. After the candidate has explained in detail in a written application why they want to become a member and a local party cell has decided whether to examine the candidate, it appoints two mentors who prepare them for the official admission process for a year. During this time, the candidate must write regular reflections on Marxism and the CP’s guidelines and attend a three-day party seminar. At the same time, at least eight colleagues, neighbors, and acquaintances are asked about the candidate.
Only when the candidate has undergone this procedure may he officially apply for party membership, on which a commission must decide. Even after the decision, a probationary period of one year applies.
Whoever wants to join the Communist Youth League as a pupil is usually recommended by the school principal. And this recommends a maximum of only two or three of his pupils per year. Then they have to go through a similar procedure as adults when joining the party.
But are all newcomers committed communists? Not really. A 2017 analysis by the Berlin-based China Institute Merics shows that most members joined not out of conviction but for career reasons. They were indifferent to ideological guidelines from party headquarters. Much more important to them are the networks of relationships “that open up for Party members in China’s administration and economy.” The Communist Party – a cadre for the elite.
Willy Lam, a political scientist at the Chinese University of Hong Kong, sees it as follows: The party talks a lot about communism. But in reality, it is concerned solely with the integration of the elite and its retention of power.
He does not consider this system stable. One indication: even rich party cadres are shifting their assets abroad. This is certainly not the communism envisioned by the 13 founding members in Nanhu 100 years ago.
Mr. Lee, the automotive industry is complaining about chip shortages worldwide. How dramatic is the situation really?
The automotive sector has certainly been affected as major companies such as Mercedes, Daimler, Ford, General Motors, Mazda and Nissan have been forced to reduce production. The lead time between ordering chips and the associated services, equipment, and materials is evident in many product categories.
Is the auto industry even the most affected?
According to one estimate, the global automotive sector’s total spending on semiconductors is less than what Apple buys just to make iPhones. However, many experts believe the constraints will remain this year and possibly through 2022. There are a limited number of suppliers in these product categories and building new capacity takes time.
What role does China play in this?
There is evidence that US export controls targeting Chinese companies, such as chipmaker SMIC, have exacerbated the situation by effectively reducing manufacturing capacity, forcing customers to switch their orders to other companies. The US export controls introduced in recent years have also led other Chinese companies besides Huawei, which are currently not targeted by the US government, to be concerned about the risk of being targeted. As a result, they have hoarded chips, further increasing the backlog of shipments.
Is an end to the shortage in sight?
Given the lead times for expanding production capacity combined with factors that have contributed to the bottlenecks – such as extreme weather events like droughts or storms – it is unlikely that the situation will improve noticeably this year. In Taiwan, where much of the world’s manufacturing capacity is located, there are severe shortages of water and electricity, both of which are needed in large quantities for semiconductor manufacturing. It has been announced that large new foundries will be built in the US. However, they will take years to come onstream and, even then, will only account for a small proportion of global capacity.
The pandemic is not the sole reason for the shortage. Was the auto industry ill-prepared for supply chain disruptions?
The main reasons for the semiconductor shortage are supplier concentration and long lead times for expanding production capacity. These factors cannot be shifted by automakers, although more prudent planning of potential disruptions to such a fragile supply chain might have reduced their current difficulties.
China declared semiconductor production to be a key industry and wants to become self-sufficient here. Is that even possible? If so, by when?
Achieving full self-sufficiency through the semiconductor supply chain would be complex and costly. Therefore, it is unlikely that any one country could achieve this alone. However, any group of nations would again resemble the existing network of partners. The policy goals and measures announced by the Chinese authorities in recent years suggest that they recognize this basic fact and are seeking more realistic goals with respect to improving the capabilities of Chinese companies along certain segments of the value chain.
What is a realistic time frame, in your opinion?
It is unlikely that China will achieve global dominance in any section of the semiconductor supply chain or even self-sufficiency in most product and service categories in ten years, regardless of the goals announced under “Made in China 2025.” However, compared to the state of affairs a decade ago, the prospects for the Chinese industry to close the gap noticeably with foreign industry leaders have improved. There is also the possibility that new materials and techniques will open up leapfrog opportunities for China.
How well are the Europeans positioned?
The European Union as a whole has strengths in certain parts of the global value chain but significant shortcomings in others. Given the structural factors that have shaped the global value chain to date, it is unlikely that the EU can address these shortcomings through European resources alone, even with smooth cooperation within the EU and the help of large sums of money. European policymakers would be well advised to seek long-term cooperation with foreign leaders in certain areas of the value chain while leveraging European strengths in other areas.
John Lee, Senior Analyst at the Mercator Institute for China Studies (Merics) coordinates the work of the research group on China’s use of digital technologies. Together with Stiftung Neue Verantwortung (SNV), both institutes, supported by the German Foreign Office, are researching the production structure of China’s semiconductor industry, its strengths and weaknesses, and interactions with European and other foreign technology providers.
Business in China is a matter for Audi AG’s CEO: When Markus Duesmann became Chairman of the Board of Management of the Ingolstadt carmaker in April 2020, the Supervisory Board also gave him responsibility for the largest foreign market. And here, the 52-year-old Audi CEO has a lot in plan: In March, he announced an electric offensive in China with new e-models as well as the construction of a new factory for premium EVs in Changchun. Six fully electric models are to be produced there by 2024 – in partnership with the German-Chinese joint venture FAW-Volkswagen.
“We want to and will play a leading role in China in the market for new energy vehicles and in the premium segment,” says Duesmann. So far, the company has sold almost seven million vehicles in China. Last year alone, it sold more than 700,000 vehicles, “the best result in Audi’s 30-year history in China.” It is true that the internal combustion engine is likely to play a decisive role in China for some years to come, and Audi expects EVs to account for 20 percent of the total market by 2025. Nevertheless, Markus Duesmann sees the future as electric: In China, he says, the shift toward sustainable mobility is in full swing, even if the EU is currently setting the pace with the Green Deal. “We want to play an active role in shaping this development.”
Markus Duesmann devoted most of his professional life to the world of combustion engines: Born in Heek near Muenster, he studied mechanical engineering at Muenster University of Applied Sciences. In 1992, he started as an engine designer at Mercedes-Benz in Stuttgart, and three years later, he moved to the development service provider FEV in Aachen. In 2004, he became the main department head for new diesel engines at DaimlerChrysler in Stuttgart and, after just one year, Head of Development for the Mercedes-Benz Formula 1 team. From 2007 to 2018, he held various management positions at BMW, most recently heading the Purchasing and Supplier Network division as a member of the Board of Management.
As a technology fan, Markus Duesmann is now enthusiastic about China’s openness toward new technologies. This willingness to implement innovations quickly impresses him just as much as the great willingness to learn and the curiosity of the people. The country is setting an enormous pace in digitalization in particular. Audi can see this in customer demands: They are, on average, 20 years younger than in Germany and have a high digital affinity, he said. “They have a much stronger demand for their own cars to seamlessly continue their digital lifestyles.”
Markus Duesmann was last in China at the beginning of 2019 and was impressed by the metropolises of Beijing, Shanghai, and Hong Kong, as well as the breathtaking nature. The contrasts in the People’s Republic are fascinating: “It is extremely exciting to observe how a millennia-old advanced culture meets global modernity and how the country is developing.
Audi, therefore, believes that it is important for the EU and China not to lose touch with each other – even in the face of strongly differing views and clear criticism. Markus Duesmann hopes that both sides will continue to work together constructively in the right places, especially on global issues such as climate and health protection. To avoid or resolve tensions, he said, multilateralism, free trade, and the international division of labor are needed. At the same time, the EU needs a common direction in global competition. In decarbonization, for example, Europe has the potential to lead the way with the Green Deal, he said. “The European way,” says Duesmann, “is something we should present with confidence.” Adrian Meyer
Jiangxi province is experiencing heavy rainfall. This road near the city of Yongxiu would be flooded completely – if the engineers hadn’t put protective walls on its left and right.
