Strict lockdown – fast recovery: That is the short formula through which China achieved economic growth of a remarkable 2.3 percent in the Covid year. Other countries in Asia were also able to return to normality all the more quickly thanks to consistent containment of the pandemic. Germany, on the other hand – as an exporting nation quite comparable with China or South Korea – is down five percent.
The prime ministers should consider this when they decide on further measures today. Economy – or health? The example of China shows that only health protection makes a strong economy possible – although Xi Jinping also had to help with strong economic stimuli to present the desired figures.
China’s lesson learned from the pandemic is to use more robots in the future. The country’s army of workers is susceptible to diseases and other irregularities. Machines continue to toil away undeterred, even as the pandemic rages outside.
The EU’s controversial investment agreement with China remains an issue. Portugal, which has taken over the Council presidency from Germany, wants to push for confirmation by the member states. This makes the Portuguese one of the biggest supporters of the treaty, along with Germany – sharp tongues believe it is a masterpiece of Chinese negotiating skills. Whether this is the case, however, will be known when the Commission makes the text of the treaty available to the public – which will hopefully happen soon.
After all, Sigmar Gabriel thinks the agreement is basically good. The SPD politician spoke to China.Table in his capacity as Head of the Atlantic Bridge. After endless negotiations, it was right to sign now instead of waiting for the Americans. This is another way for the EU to assert its independence.
Mr. Gabriel, under Donald Trump, US-China relations have been worse than they’ve been in more than four decades. Now Joe Biden will become President of the United States. Do you expect a change of direction in the China policy?
Both Republicans and Democrats had long believed that China would open up politically through economic cooperation. This approach has failed in the view of the strategists of both parties. Today, China is more authoritarian than ever. China is seen in the USA as the new global rival that is catching up technologically and thus also economically and militarily. Both parties see that as a threat and want to push back China’s influence. So it doesn’t really matter which one of them the president is. And in China, it’s also about decoupling from too great an economic dependence on the US.
From the Chinese perspective, the last 600 years have been a historical accident. Now China has returned to the place it believes it deserves: the center of the world. That is also the reason for the ambitious policies of the communist leadership. But it is worth examining whether China is really at heart about expanding global dominance or whether its strong international influence is merely a means to an end, to make itself unassailable and thus guarantee the Communist Party’s power even as it celebrates the 100th anniversary of the founding of the People’s Republic. The strategies for dealing with China will likely differ depending on what is seen as the real goal in the West.
What do you think?
There is no doubt that the country has changed a lot through Xi Jinping. But his actions have not always been without controversy. Especially in connection with the outbreak of the pandemic, Xi has been criticized even within the Communist Party. Quite a few have thought it wrong for China to expose itself so heavily internationally, contrary to the recommendation of the great reformer Deng. The criticism was that this would point all arrows at the Middle Kingdom. And that is exactly what happened.
Today, China essentially has conflicts with Australia, with all the riparians of the surrounding shipping routes, with India, the USA, Europe and also with Russia the relationship is anything but tension-free. The weak new Southeast Asian Free Trade Agreement does little to change this. Moreover, China is surrounded by nuclear powers. The danger of growing international criticism of China was probably also why China agreed to the investment protection agreement with the EU after seven years of negotiations. There is a threat of a further intensification of the conflicts with Europe, which Beijing has only now contained with the investment protection agreement with the EU.
This is precisely why the Biden administration criticizes the EU and Germany. Couldn’t the Europeans have waited until Biden was in office to develop a joint China strategy?
From the American point of view, that is certainly the case. But on the one hand, the Europeans have been working on this agreement for a long time and certainly wanted to seize the opportunity, and on the other hand, it is really ‘only’ an agreement that is intended to better protect European investments in China. That is also sorely needed. The uncertainty about how the US will behave, also with regard to international trade, has certainly also contributed to the fact that the Europeans wanted to have this little bird in their hand first before they wait too long for the bird in the bush. And certainly, this is also a signal of increased European self-confidence.
So everyone should go their own way?
No, that will certainly not succeed. And once again, it is only an investment protection agreement. Many other questions, especially with regard to China’s international influence, remain unresolved. And the US will not get far on its own either. The difficult path leads through negotiations with China, e.g., on the reform of the WTO and on which rules China has to abide by. The country claims to be a market economy but behaves like a state economy and refuses to open its markets, saying it is still a developing country.
For this to happen, however, the US, Europe, South Korea, Australia, New Zealand, Japan and a few others must develop a common stance and also make China aware of the consequences of a refusal to comply. But that was precisely what was impossible under Donald Trump. That’s why everyone tried to find their own ways with China. The danger here, of course, is that in the end, China will be best able to protect its interests according to the motto “divide and rule”.
That’s not enough for many in the US. They demand that Europe must henceforth decide which side it is on.
I do not see us as politically or economically strong enough to go our own way. We must come to an understanding with the Americans, especially as we do not want the Chinese to change international standards to suit themselves. One strategy of the Americans, however, does not go with us: the demand for complete decoupling. The American battle cry of “decoupling” is already difficult to sustain in the US. You can’t put a nation of 1.4 billion under house arrest. This strategy will fail. And for us export-oriented Europeans it would also amount to massive self-harm.
Unlike the former Soviet Union, China is not only an adversary for us but also an economic partner, a kind of “frenemy.” The motto “Buy American” will determine US policy for the time being after the pandemic, even under Joe Biden. Especially since the Democrats are generally more protectionist than the Republicans.
This idea of decoupling ourselves from China simply does not work for an export-oriented region like Europe. It would cause enormous economic damage. Nor could it be offset by a free trade agreement with the US. After all, the motto there is: Buy American. I do believe that China can be made to play by the rules. But believing that China can be put under arrest won’t work.
But how are you going to convince the US?
Yes, that is probably the biggest challenge facing the transatlantic relationship at the moment. The dispute over NATO contributions is almost a minor matter in comparison. Ultimately it’s about dominance in the world. And the Americans are not to be trifled with on this issue. But there is a difference: Unlike Trump, Biden knows that in the world of the 21st century, even the US needs allies. That’s why Russia and China were interested in Trump being reelected. An America that relies on going it alone is easier to handle than an America that relies on alliances. Biden is not in favor of reviving alliances because he is sentimental or he has a thing for us Europeans. He knows that alliances are in the American interest.
But with that comes higher expectations that Trump did not have for Europe.
There’s no question that the Biden administration also wants US-led alliances. But at the same time, it is clear that this does not mean unconditional allegiance. Above all, unlike Trump, it doesn’t want to constantly impose sanctions on its allies. Nevertheless, the talks will certainly not be easy. I thus think it’s good that the Europeans are now concluding the investment protection agreement with China. It shows the Americans that we are not for free.
Critics say that much of the investment agreement is vague and that it has more political significance than it benefits German entrepreneurs in China.
That may be true in some respects. Nevertheless, they should not underestimate the importance. After all, China needs a partner of some kind.
Foxconn doesn’t build cars but smartphones for Apple or components for computers. Until now. Now the electronics company from Taiwan follows other technology companies into the Chinese EV market. Foxconn signed a partnership with two car companies within a few days. In early January, the iPhone contract manufacturer announced a collaboration with stumbling electric start-up Byton. Foxconn would help Byton set up mass production of its first car – a connected electric sport utility vehicle named M-Byte – and provide “industrial resources and expertise in advanced manufacturing technology,” both companies said. Foxconn Chairman Young Liu touted his company’s entry into Byton as “proof of our commitment to transforming the traditional auto industry.” Byton has had a completed factory at its Nanjing headquarters since 2019, just waiting to finally ramp up.
A few days after the Byton deal came the second: Foxconn signed an agreement with China’s largest private carmaker Geely from Hangzhou to set up a joint venture. This will build cars as well as offer customized solutions such as intelligent driving systems, platforms, or consulting on supply chains for EVs for car brands from all over the world, Geely explained. Both partners will hold 50 percent of the shares in the joint venture, Geely said.
It is becoming increasingly apparent in China that partnerships between automotive engineering and high-tech represent the future of electromobility. China’s three largest internet companies, Baidu, Alibaba and Tencent are already involved in several electric start-ups financially and with their network know-how. Baidu, a pioneer in artificial intelligence and autonomous driving, also partnered with Geely in January.
Now it’s Foxconn. In October 2020, the company presented an “open software and hardware platform for electric cars” called MIH in Taipei – along with a chassis built on this platform. MIH is the “Android system of the EV industry,” Foxconn announced. Just like Android in smartphones, MIH will be used by various carmakers in the future when building e-limousines or e-SUVs, it said. The aim is to create a software-defined open ecosystem for EV production. Developers will get access to key technologies and tools for EV development on MIH. Foxconn also plans to develop and launch a solid-state battery by 2024. An ambitious timetable.
That China’s electric segment is booming again after a long dry spell should give Foxconn and its partners a boost. Thanks to a recovery from the summer onwards, the segment managed to sell 1.1 million EVs, plug-in hybrids, and fuel cell cars (excluding commercial vehicles) in 2020, almost ten percent more than in the previous year.
With Geely and Byton, Foxconn has now found two very different partners for its ambitions. Concrete details are still scarce. “Currently, the focus is on working out the details and preparing further steps,” says a Byton spokesperson. “For some time now, Foxconn-Byton teams have been installed with us, and they are continuing to work together to prepare for series production.” According to the spokesperson, the production is expected to start in the first quarter of 2022.
For Byton, it’s all or nothing. Once launched as “Future Mobility” by former BMW managers, Byton plunged into an acute financial crisis during the Covid pandemic. It‘s not because of the M-Byte itself. The first prototype caused a stir on the scene at the Consumer Electronics Show (CES) in Las Vegas in early 2018 with a touchscreen that extends across the cockpit. The production model presented at the Frankfurt Motor Show (IAA) in autumn 2019 was also well received. According to Byton, the car has up to 550 kilometers of battery range. Byton built a smart factory in Nanjing according to Industry 4.0 criteria; pre-series production went according to plan. In 2020, the M-Byte should be launched in China, and in 2021 in Europe and California.
But all this is too expensive. When the Covid pandemic hit, Byton had to suspend production. The local government of Nanjing and the state-owned company First Automobile Works (FAW) came to the start-up’s rescue with loans. Co-founder and CEO Daniel Kirchert and other international managers jumped ship. There was talk in the scene of poor crisis management. FAW has been on board with Byton since 2018 and now holds just under 20 percent of the shares. “FAW is a strong partner, which is especially helpful in the purchasing processes,” says the Byton spokesman. How much influence the state-owned company has is unclear; all the more exciting will be how Foxconn fits into this mix. The export to Europe is still planned.
Foxconn is going one step further by forming a joint venture with Geely. The location and timeline are still unclear, but the goal is the same as with Foxconn’s MIH platform: to lower the entry barriers into electric mobility for other companies by taking over design or parts of production for them. Geely has experience converting to EVs – both at its own brand and its subsidiaries Volvo, Lynk, and Polestar, an all-electric brand. “The global auto industry is undergoing profound changes. We need to actively keep up with these changes, build alliances and synergize global resources to create more value for our end users,” Geely CEO Li Donghui said at the signing ceremony last Wednesday. His comments fuel the ongoing debate over what role automakers will still have in the mobility of the future. The more important connectivity and electronics of vehicles, the more important the position of tech companies.
At the beginning of the year, Portugal took over the EU Council Presidency from Germany. In foreign policy, Lisbon intends to turn its attention primarily to India. China, however, continues to play an essential role in Brussels, not least because of the special relationship between Lisbon and Beijing. Portugal’s Prime Minister António Costa will present the program of the EU Council Presidency tomorrow, Wednesday, at the plenary session of the European Parliament. There could be some headwinds for European projects during the Portuguese Council presidency, which runs until the end of June.
The European Parliament will take a very close look at the Comprehensive Agreement on Investment with China (CAI), stresses Bernd Lange, the Chairman of the Trade Committee in the EU Parliament, in an interview with China.Table. Lange said particular attention would be paid to legal certainty for European investors about the ban on forced technology transfer, but also to the disclosure of subsidies for the service sector and to European competitive equality vis-à-vis Chinese state-owned enterprises. He does not see the fact that China is only mentioned twice in the official program of the Council Presidency as a risk for less attention from Brussels towards Beijing, not only concerning the CAI: “TÓf course, the discussion with Hong Kong about the human rights situation is an issue.” The EU Parliament will express its position in a resolution this week.
Lisbon wants to see rapid progress in the CAI talks despite China’s limited presence in Portugal’s official program: The agreement is “in the interest of Europeans” and should be ratified as soon as possible, Prime Minister Costa told the Lusa news agency in early January. “An investment agreement strengthens opportunities for European companies to invest and work in China and this is very important for Europe’s economic growth and the protection of the Europeans’ jobs,” Costa stressed. It is unlikely, however, that the agreement will be voted on in the European Parliament during the Portuguese presidency.
In recent years, Costa, a socialist, has repeatedly positioned himself as sympathetic to Beijing. In December 2018, Chinese President Xi Jinping emphasized the bilateral 500-year-old ties between Portugal and China with a state visit. During the financial crisis and austerity policy imposed by Brussels, the People’s Republic rushed to Portugal’s aid, with China buying Portuguese government bonds that no one else wanted at the time. In addition, Chinese state and private companies have invested billions of euros in Portugal since the financial crisis. The energy supplier China Three Gorges (CTG) owns around 22 percent of Energias de Portugal (EDP), the country’s most important energy group. According to a Reuters report, CTG paid just over €2.7 billion for the Portuguese energy giant in late 2011. However, a takeover bid was rejected by EDP shareholders in 2019. According to media reports, Chinese energy company State Grid invested around €1.4 billion to acquire a 25 percent stake in Redes Energéticas Nacionais, Portugal’s national grid operator. Other Chinese companies control Fidelidade, the largest insurer, and Luz Saude, the largest private hospital group.
Concerns from the Portuguese government do not seem to exist, on the contrary. “Our experience with Chinese investment has been very positive,” Prime Minister Costa told the Financial Times. “The Chinese have shown complete respect for our legal framework and the rules of the market.”
But there are not only close ties between Lisbon and Beijing when it comes to investments. Portugal, with more than 50 percent, is also the largest issuer of the so-called golden visas within the EU, as Green MEP Sven Giegold criticizes in an interview with China.Table. The visas and residence permits, which can be obtained for buying a property worth €500,00 or more, for example, allow the holder of a non-EU passport to travel throughout the Schengen area without being checked. According to the Portuguese migration agency SEF, more than 4,000 Chinese citizens have been granted these permanent residence permits in Portugal since 2012.
Malta and Cyprus are also criticized for the practice of issuing residence permits against investments – but Portugal makes up the bulk, according to Giegold. The Green politician calls for more decisive steps against Portugal and sees the need for action on the part of the EU heads of state and government: “There was not even a tough debate on this in the Council,” Giegold rebukes.
In terms of foreign policy, the Portuguese Council Presidency now wants to focus on India, with a high-level summit meeting planned for May. And South America could also come into focus: Portugal wants to try to advance a decision on the Mercosur free trade agreement as far as possible. “I hope we can make progress in this first semester of 2021 during the Portuguese presidency of the EU Council,” said Portuguese MEP Margarita Marques, a member of the European Parliament’s trade committee and China delegation. She hopes it would be possible to reach a compromise on the protection of forests and deforestation in a timely manner without reopening the Mercosur agreement, Marques said.
Also on Portugal’s agenda are the perennial issues of Brexit, the Covid pandemic and climate policy. However, the social democratic government in Lisbon also wants to set its own priorities during its presidency. Its focus will be on social issues such as employment and combating poverty.
Stormy-Annika Mildner wants to repair old bridges between Europe and the US. Mildner has been the new Director of the Berlin-based Aspen Institute since January 2021. The think tank, with 17 employees, sees itself as a dialogue platform for trusting cooperation between Europe and the US. A core topic that will drive Stormy-Annika Mildner in the future is the relations of the US and EU with China. “In the problem analysis towards China, the EU and the US are in agreement. But not on the necessary instruments.” Donald Trump’s threatening policy was not sustainable for Europe, Mildner said. Under the new US President Joe Biden, she thus hopes for more scope for closer cooperation.
She sees China’s geopolitical claim to power and its global economic trade, which lead to distortions of competition, as well as the issues of human rights and environmental policy, as the greatest challenges. “The hope that China would automatically liberalize and democratize thanks to economic openness has long since evaporated,” she says. This became clear to her during her trip to the G20 summit in the Chinese metropolis of Hangzhou in 2016: “The city was quickly emptied so that the summit would not be disrupted.”
A tougher stance is therefore needed vis-à-vis the increasingly authoritarian regime in Beijing. The big question will be how Europe positions itself in the power struggle of the systems between the two giants China and the US, without being crushed in the middle. “A huge challenge,” says Stormy-Annika Mildner.
Because the damage Donald Trump has done to transatlantic relations is great. Just as great are the hopes in Europe that there will be a new beginning with Joe Biden to solve common problems in closer cooperation. “Joe Biden is a well-connected transatlanticist who knows Europe,” says Mildner. “I thus very much hope that we can revive old dialogues and tackle new issues.”
Stormy-Annika Mildner is leaving her position as Head of Foreign Economic Policy at the Federation of German Industries (BDI) for this position. “I was attracted by the idea of heading an institute myself with so much creative freedom in a policy field that has excited me since my teenage years.”
Born in Braunschweig, she is an internationally recognized expert on transatlantic relations, foreign economic policy, and trade issues. For example, the Ph.D. economist prepared the global economic dialogue during Germany’s G20 presidency in 2017. She has conducted research for the German Institute for International and Security Affairs and the German Council on Foreign Relations, taught at the John F. Kennedy Institute and lectured at the Hertie School of Governance in Berlin.
Despite the personal disappointment of four years of Trump, Stormy-Annika Mildner’s fascination with the USA has not diminished. Ever since she spent an exchange year as a 16-year-old in Farmer City, Illinois, a village of 2,000 people, she has loved the country. She has also been able to find a small piece of the American prairie in Germany. She rides western horses in the Uckermark with her husband. She is passionate about photographing the animals. “With the horses,” she says, “I can relax best.” Adrian Meyer
Strict lockdown – fast recovery: That is the short formula through which China achieved economic growth of a remarkable 2.3 percent in the Covid year. Other countries in Asia were also able to return to normality all the more quickly thanks to consistent containment of the pandemic. Germany, on the other hand – as an exporting nation quite comparable with China or South Korea – is down five percent.
The prime ministers should consider this when they decide on further measures today. Economy – or health? The example of China shows that only health protection makes a strong economy possible – although Xi Jinping also had to help with strong economic stimuli to present the desired figures.
China’s lesson learned from the pandemic is to use more robots in the future. The country’s army of workers is susceptible to diseases and other irregularities. Machines continue to toil away undeterred, even as the pandemic rages outside.
The EU’s controversial investment agreement with China remains an issue. Portugal, which has taken over the Council presidency from Germany, wants to push for confirmation by the member states. This makes the Portuguese one of the biggest supporters of the treaty, along with Germany – sharp tongues believe it is a masterpiece of Chinese negotiating skills. Whether this is the case, however, will be known when the Commission makes the text of the treaty available to the public – which will hopefully happen soon.
After all, Sigmar Gabriel thinks the agreement is basically good. The SPD politician spoke to China.Table in his capacity as Head of the Atlantic Bridge. After endless negotiations, it was right to sign now instead of waiting for the Americans. This is another way for the EU to assert its independence.
Mr. Gabriel, under Donald Trump, US-China relations have been worse than they’ve been in more than four decades. Now Joe Biden will become President of the United States. Do you expect a change of direction in the China policy?
Both Republicans and Democrats had long believed that China would open up politically through economic cooperation. This approach has failed in the view of the strategists of both parties. Today, China is more authoritarian than ever. China is seen in the USA as the new global rival that is catching up technologically and thus also economically and militarily. Both parties see that as a threat and want to push back China’s influence. So it doesn’t really matter which one of them the president is. And in China, it’s also about decoupling from too great an economic dependence on the US.
From the Chinese perspective, the last 600 years have been a historical accident. Now China has returned to the place it believes it deserves: the center of the world. That is also the reason for the ambitious policies of the communist leadership. But it is worth examining whether China is really at heart about expanding global dominance or whether its strong international influence is merely a means to an end, to make itself unassailable and thus guarantee the Communist Party’s power even as it celebrates the 100th anniversary of the founding of the People’s Republic. The strategies for dealing with China will likely differ depending on what is seen as the real goal in the West.
What do you think?
There is no doubt that the country has changed a lot through Xi Jinping. But his actions have not always been without controversy. Especially in connection with the outbreak of the pandemic, Xi has been criticized even within the Communist Party. Quite a few have thought it wrong for China to expose itself so heavily internationally, contrary to the recommendation of the great reformer Deng. The criticism was that this would point all arrows at the Middle Kingdom. And that is exactly what happened.
Today, China essentially has conflicts with Australia, with all the riparians of the surrounding shipping routes, with India, the USA, Europe and also with Russia the relationship is anything but tension-free. The weak new Southeast Asian Free Trade Agreement does little to change this. Moreover, China is surrounded by nuclear powers. The danger of growing international criticism of China was probably also why China agreed to the investment protection agreement with the EU after seven years of negotiations. There is a threat of a further intensification of the conflicts with Europe, which Beijing has only now contained with the investment protection agreement with the EU.
This is precisely why the Biden administration criticizes the EU and Germany. Couldn’t the Europeans have waited until Biden was in office to develop a joint China strategy?
From the American point of view, that is certainly the case. But on the one hand, the Europeans have been working on this agreement for a long time and certainly wanted to seize the opportunity, and on the other hand, it is really ‘only’ an agreement that is intended to better protect European investments in China. That is also sorely needed. The uncertainty about how the US will behave, also with regard to international trade, has certainly also contributed to the fact that the Europeans wanted to have this little bird in their hand first before they wait too long for the bird in the bush. And certainly, this is also a signal of increased European self-confidence.
So everyone should go their own way?
No, that will certainly not succeed. And once again, it is only an investment protection agreement. Many other questions, especially with regard to China’s international influence, remain unresolved. And the US will not get far on its own either. The difficult path leads through negotiations with China, e.g., on the reform of the WTO and on which rules China has to abide by. The country claims to be a market economy but behaves like a state economy and refuses to open its markets, saying it is still a developing country.
For this to happen, however, the US, Europe, South Korea, Australia, New Zealand, Japan and a few others must develop a common stance and also make China aware of the consequences of a refusal to comply. But that was precisely what was impossible under Donald Trump. That’s why everyone tried to find their own ways with China. The danger here, of course, is that in the end, China will be best able to protect its interests according to the motto “divide and rule”.
That’s not enough for many in the US. They demand that Europe must henceforth decide which side it is on.
I do not see us as politically or economically strong enough to go our own way. We must come to an understanding with the Americans, especially as we do not want the Chinese to change international standards to suit themselves. One strategy of the Americans, however, does not go with us: the demand for complete decoupling. The American battle cry of “decoupling” is already difficult to sustain in the US. You can’t put a nation of 1.4 billion under house arrest. This strategy will fail. And for us export-oriented Europeans it would also amount to massive self-harm.
Unlike the former Soviet Union, China is not only an adversary for us but also an economic partner, a kind of “frenemy.” The motto “Buy American” will determine US policy for the time being after the pandemic, even under Joe Biden. Especially since the Democrats are generally more protectionist than the Republicans.
This idea of decoupling ourselves from China simply does not work for an export-oriented region like Europe. It would cause enormous economic damage. Nor could it be offset by a free trade agreement with the US. After all, the motto there is: Buy American. I do believe that China can be made to play by the rules. But believing that China can be put under arrest won’t work.
But how are you going to convince the US?
Yes, that is probably the biggest challenge facing the transatlantic relationship at the moment. The dispute over NATO contributions is almost a minor matter in comparison. Ultimately it’s about dominance in the world. And the Americans are not to be trifled with on this issue. But there is a difference: Unlike Trump, Biden knows that in the world of the 21st century, even the US needs allies. That’s why Russia and China were interested in Trump being reelected. An America that relies on going it alone is easier to handle than an America that relies on alliances. Biden is not in favor of reviving alliances because he is sentimental or he has a thing for us Europeans. He knows that alliances are in the American interest.
But with that comes higher expectations that Trump did not have for Europe.
There’s no question that the Biden administration also wants US-led alliances. But at the same time, it is clear that this does not mean unconditional allegiance. Above all, unlike Trump, it doesn’t want to constantly impose sanctions on its allies. Nevertheless, the talks will certainly not be easy. I thus think it’s good that the Europeans are now concluding the investment protection agreement with China. It shows the Americans that we are not for free.
Critics say that much of the investment agreement is vague and that it has more political significance than it benefits German entrepreneurs in China.
That may be true in some respects. Nevertheless, they should not underestimate the importance. After all, China needs a partner of some kind.
Foxconn doesn’t build cars but smartphones for Apple or components for computers. Until now. Now the electronics company from Taiwan follows other technology companies into the Chinese EV market. Foxconn signed a partnership with two car companies within a few days. In early January, the iPhone contract manufacturer announced a collaboration with stumbling electric start-up Byton. Foxconn would help Byton set up mass production of its first car – a connected electric sport utility vehicle named M-Byte – and provide “industrial resources and expertise in advanced manufacturing technology,” both companies said. Foxconn Chairman Young Liu touted his company’s entry into Byton as “proof of our commitment to transforming the traditional auto industry.” Byton has had a completed factory at its Nanjing headquarters since 2019, just waiting to finally ramp up.
A few days after the Byton deal came the second: Foxconn signed an agreement with China’s largest private carmaker Geely from Hangzhou to set up a joint venture. This will build cars as well as offer customized solutions such as intelligent driving systems, platforms, or consulting on supply chains for EVs for car brands from all over the world, Geely explained. Both partners will hold 50 percent of the shares in the joint venture, Geely said.
It is becoming increasingly apparent in China that partnerships between automotive engineering and high-tech represent the future of electromobility. China’s three largest internet companies, Baidu, Alibaba and Tencent are already involved in several electric start-ups financially and with their network know-how. Baidu, a pioneer in artificial intelligence and autonomous driving, also partnered with Geely in January.
Now it’s Foxconn. In October 2020, the company presented an “open software and hardware platform for electric cars” called MIH in Taipei – along with a chassis built on this platform. MIH is the “Android system of the EV industry,” Foxconn announced. Just like Android in smartphones, MIH will be used by various carmakers in the future when building e-limousines or e-SUVs, it said. The aim is to create a software-defined open ecosystem for EV production. Developers will get access to key technologies and tools for EV development on MIH. Foxconn also plans to develop and launch a solid-state battery by 2024. An ambitious timetable.
That China’s electric segment is booming again after a long dry spell should give Foxconn and its partners a boost. Thanks to a recovery from the summer onwards, the segment managed to sell 1.1 million EVs, plug-in hybrids, and fuel cell cars (excluding commercial vehicles) in 2020, almost ten percent more than in the previous year.
With Geely and Byton, Foxconn has now found two very different partners for its ambitions. Concrete details are still scarce. “Currently, the focus is on working out the details and preparing further steps,” says a Byton spokesperson. “For some time now, Foxconn-Byton teams have been installed with us, and they are continuing to work together to prepare for series production.” According to the spokesperson, the production is expected to start in the first quarter of 2022.
For Byton, it’s all or nothing. Once launched as “Future Mobility” by former BMW managers, Byton plunged into an acute financial crisis during the Covid pandemic. It‘s not because of the M-Byte itself. The first prototype caused a stir on the scene at the Consumer Electronics Show (CES) in Las Vegas in early 2018 with a touchscreen that extends across the cockpit. The production model presented at the Frankfurt Motor Show (IAA) in autumn 2019 was also well received. According to Byton, the car has up to 550 kilometers of battery range. Byton built a smart factory in Nanjing according to Industry 4.0 criteria; pre-series production went according to plan. In 2020, the M-Byte should be launched in China, and in 2021 in Europe and California.
But all this is too expensive. When the Covid pandemic hit, Byton had to suspend production. The local government of Nanjing and the state-owned company First Automobile Works (FAW) came to the start-up’s rescue with loans. Co-founder and CEO Daniel Kirchert and other international managers jumped ship. There was talk in the scene of poor crisis management. FAW has been on board with Byton since 2018 and now holds just under 20 percent of the shares. “FAW is a strong partner, which is especially helpful in the purchasing processes,” says the Byton spokesman. How much influence the state-owned company has is unclear; all the more exciting will be how Foxconn fits into this mix. The export to Europe is still planned.
Foxconn is going one step further by forming a joint venture with Geely. The location and timeline are still unclear, but the goal is the same as with Foxconn’s MIH platform: to lower the entry barriers into electric mobility for other companies by taking over design or parts of production for them. Geely has experience converting to EVs – both at its own brand and its subsidiaries Volvo, Lynk, and Polestar, an all-electric brand. “The global auto industry is undergoing profound changes. We need to actively keep up with these changes, build alliances and synergize global resources to create more value for our end users,” Geely CEO Li Donghui said at the signing ceremony last Wednesday. His comments fuel the ongoing debate over what role automakers will still have in the mobility of the future. The more important connectivity and electronics of vehicles, the more important the position of tech companies.
At the beginning of the year, Portugal took over the EU Council Presidency from Germany. In foreign policy, Lisbon intends to turn its attention primarily to India. China, however, continues to play an essential role in Brussels, not least because of the special relationship between Lisbon and Beijing. Portugal’s Prime Minister António Costa will present the program of the EU Council Presidency tomorrow, Wednesday, at the plenary session of the European Parliament. There could be some headwinds for European projects during the Portuguese Council presidency, which runs until the end of June.
The European Parliament will take a very close look at the Comprehensive Agreement on Investment with China (CAI), stresses Bernd Lange, the Chairman of the Trade Committee in the EU Parliament, in an interview with China.Table. Lange said particular attention would be paid to legal certainty for European investors about the ban on forced technology transfer, but also to the disclosure of subsidies for the service sector and to European competitive equality vis-à-vis Chinese state-owned enterprises. He does not see the fact that China is only mentioned twice in the official program of the Council Presidency as a risk for less attention from Brussels towards Beijing, not only concerning the CAI: “TÓf course, the discussion with Hong Kong about the human rights situation is an issue.” The EU Parliament will express its position in a resolution this week.
Lisbon wants to see rapid progress in the CAI talks despite China’s limited presence in Portugal’s official program: The agreement is “in the interest of Europeans” and should be ratified as soon as possible, Prime Minister Costa told the Lusa news agency in early January. “An investment agreement strengthens opportunities for European companies to invest and work in China and this is very important for Europe’s economic growth and the protection of the Europeans’ jobs,” Costa stressed. It is unlikely, however, that the agreement will be voted on in the European Parliament during the Portuguese presidency.
In recent years, Costa, a socialist, has repeatedly positioned himself as sympathetic to Beijing. In December 2018, Chinese President Xi Jinping emphasized the bilateral 500-year-old ties between Portugal and China with a state visit. During the financial crisis and austerity policy imposed by Brussels, the People’s Republic rushed to Portugal’s aid, with China buying Portuguese government bonds that no one else wanted at the time. In addition, Chinese state and private companies have invested billions of euros in Portugal since the financial crisis. The energy supplier China Three Gorges (CTG) owns around 22 percent of Energias de Portugal (EDP), the country’s most important energy group. According to a Reuters report, CTG paid just over €2.7 billion for the Portuguese energy giant in late 2011. However, a takeover bid was rejected by EDP shareholders in 2019. According to media reports, Chinese energy company State Grid invested around €1.4 billion to acquire a 25 percent stake in Redes Energéticas Nacionais, Portugal’s national grid operator. Other Chinese companies control Fidelidade, the largest insurer, and Luz Saude, the largest private hospital group.
Concerns from the Portuguese government do not seem to exist, on the contrary. “Our experience with Chinese investment has been very positive,” Prime Minister Costa told the Financial Times. “The Chinese have shown complete respect for our legal framework and the rules of the market.”
But there are not only close ties between Lisbon and Beijing when it comes to investments. Portugal, with more than 50 percent, is also the largest issuer of the so-called golden visas within the EU, as Green MEP Sven Giegold criticizes in an interview with China.Table. The visas and residence permits, which can be obtained for buying a property worth €500,00 or more, for example, allow the holder of a non-EU passport to travel throughout the Schengen area without being checked. According to the Portuguese migration agency SEF, more than 4,000 Chinese citizens have been granted these permanent residence permits in Portugal since 2012.
Malta and Cyprus are also criticized for the practice of issuing residence permits against investments – but Portugal makes up the bulk, according to Giegold. The Green politician calls for more decisive steps against Portugal and sees the need for action on the part of the EU heads of state and government: “There was not even a tough debate on this in the Council,” Giegold rebukes.
In terms of foreign policy, the Portuguese Council Presidency now wants to focus on India, with a high-level summit meeting planned for May. And South America could also come into focus: Portugal wants to try to advance a decision on the Mercosur free trade agreement as far as possible. “I hope we can make progress in this first semester of 2021 during the Portuguese presidency of the EU Council,” said Portuguese MEP Margarita Marques, a member of the European Parliament’s trade committee and China delegation. She hopes it would be possible to reach a compromise on the protection of forests and deforestation in a timely manner without reopening the Mercosur agreement, Marques said.
Also on Portugal’s agenda are the perennial issues of Brexit, the Covid pandemic and climate policy. However, the social democratic government in Lisbon also wants to set its own priorities during its presidency. Its focus will be on social issues such as employment and combating poverty.
Stormy-Annika Mildner wants to repair old bridges between Europe and the US. Mildner has been the new Director of the Berlin-based Aspen Institute since January 2021. The think tank, with 17 employees, sees itself as a dialogue platform for trusting cooperation between Europe and the US. A core topic that will drive Stormy-Annika Mildner in the future is the relations of the US and EU with China. “In the problem analysis towards China, the EU and the US are in agreement. But not on the necessary instruments.” Donald Trump’s threatening policy was not sustainable for Europe, Mildner said. Under the new US President Joe Biden, she thus hopes for more scope for closer cooperation.
She sees China’s geopolitical claim to power and its global economic trade, which lead to distortions of competition, as well as the issues of human rights and environmental policy, as the greatest challenges. “The hope that China would automatically liberalize and democratize thanks to economic openness has long since evaporated,” she says. This became clear to her during her trip to the G20 summit in the Chinese metropolis of Hangzhou in 2016: “The city was quickly emptied so that the summit would not be disrupted.”
A tougher stance is therefore needed vis-à-vis the increasingly authoritarian regime in Beijing. The big question will be how Europe positions itself in the power struggle of the systems between the two giants China and the US, without being crushed in the middle. “A huge challenge,” says Stormy-Annika Mildner.
Because the damage Donald Trump has done to transatlantic relations is great. Just as great are the hopes in Europe that there will be a new beginning with Joe Biden to solve common problems in closer cooperation. “Joe Biden is a well-connected transatlanticist who knows Europe,” says Mildner. “I thus very much hope that we can revive old dialogues and tackle new issues.”
Stormy-Annika Mildner is leaving her position as Head of Foreign Economic Policy at the Federation of German Industries (BDI) for this position. “I was attracted by the idea of heading an institute myself with so much creative freedom in a policy field that has excited me since my teenage years.”
Born in Braunschweig, she is an internationally recognized expert on transatlantic relations, foreign economic policy, and trade issues. For example, the Ph.D. economist prepared the global economic dialogue during Germany’s G20 presidency in 2017. She has conducted research for the German Institute for International and Security Affairs and the German Council on Foreign Relations, taught at the John F. Kennedy Institute and lectured at the Hertie School of Governance in Berlin.
Despite the personal disappointment of four years of Trump, Stormy-Annika Mildner’s fascination with the USA has not diminished. Ever since she spent an exchange year as a 16-year-old in Farmer City, Illinois, a village of 2,000 people, she has loved the country. She has also been able to find a small piece of the American prairie in Germany. She rides western horses in the Uckermark with her husband. She is passionate about photographing the animals. “With the horses,” she says, “I can relax best.” Adrian Meyer
