Table.Briefing: China

Super battery from CATL + Espionage law + Interview with Mikko Huotari

Dear reader,

Once again it becomes clear that the electric revolution is coming from China. While every fourth new car in the People’s Republic is already electric – 80 percent of which are made in China – the battery manufacturer CATL from Ningde surprised with another sensation at the car show in Shanghai: CATL presented a battery that can store 500 watt-hours of electricity per kilogram of battery cell. Previous batteries can hold no more than half that amount.

This creates completely new electrification possibilities, for example, for small cars or purely electrically powered trucks, even electric aircraft. Up to now, the batteries have been too heavy for this. CATL intends to begin production before the end of this year. The second piece of positive news, as Christian Domke-Seidel analyzes, is that CATL’s European plants will also be involved.

Technically more advanced, but otherwise more and more repressive – this is evident from the amendment to the counter-espionage law passed by the People’s Congress. The amendment is intended to no longer only protect state secrets, but also vaguely defined “national interests”. Foreign companies in China already have to fear repercussions, writes our author Fabian Kretschmer. It is above all these vague wording in laws that once again make China an unpredictable, arbitrary state.

Your
Felix Lee
Image of Felix  Lee

Feature

CATL achieves breakthrough in battery technology

At Auto Shanghai, battery manufacturer CATL surprises with the sodium-ion battery.

No other component decides the success of electric mobility like the battery. It is what makes the car expensive. Moreover, many customers focus on the range and charging time when considering the suitability of an EV for everyday use. Contemporary Amperex Technology Co Limited (CATL) has made a breakthrough in this area.

The Chinese company from Ningde, in the province of Fujian, has managed to make the sodium-ion battery ready for large-scale production. It is significantly cheaper, more resilient to temperature fluctuations and requires less raw materials, a CATL engineer told China.Table. This may also have an impact on the group’s European sites.

Sodium-ion battery: New reality of electric mobility

Even many visitors to the Auto Shanghai show may not have fully realized the huge implications of the presentation: In the run-up to the exhibition, the manufacturer Chery presented its new brand iCar including two new vehicles: the iCar GT (a flat electric sports car) and the iCar 03 (a compact SUV with a length of 4.2 meters). A sodium-ion battery supplies the power the vehicles need. CATL announced the large-scale production of this technology only a few days before.

The development could give the global EV market an enormous boost. Because sodium-ion batteries solve existing key problems with lithium-ion batteries.

  1. Cost: Sodium-ion batteries are about 20 percent cheaper per kilowatt-hour than lithium-based variants.
  2. Raw material dependence: Sodium is available in larger quantities and is easier to extract than lithium. “In addition, aluminum foils can be used as power collectors, which are much cheaper than the copper foils used in lithium-ion batteries,” explained a CATL engineer.
  3. Temperature resilience: At minus 20 degrees Celsius, sodium-ion batteries have a capacity retention rate of more than 90 percent.

The comparatively low cost makes sodium-ion batteries particularly interesting for small and compact cars – i.e. in vehicle classes with high sales figures where electrification has not progressed as far yet. This should lead to noticeable economies of scale within a very short time. According to CATL, even electric aircraft are now possible due to the low weight combined with much higher performance.

BYD is also said to be close to mass-producing a sodium-ion battery. The manufacturer is reportedly planning to integrate the battery into the Qin, Dolphin and Seagull models in the second half of 2023. However, the brand has not yet officially confirmed this. It is merely based on insider information.

Problems of sodium-ion batteries

However, the sodium-ion battery is not yet utilizing its potential in practice. The energy density of CATL’s first-generation sodium-ion battery cell is up to 160 watt-hours per kilogram. Conventional lithium-ion batteries, on the other hand, already achieve around 200 watt-hours per kilogram. A figure that CATL wants to match in the next generation of sodium-ion batteries.

To compensate for this disadvantage in the short term, CATL is initially shipping a combination of sodium and lithium-ion batteries. However, while sodium technology is just in the early stages and can reach up to 500 watt-hours per kilogram, lithium technology is already largely at its limits.

The CATL engineers seem to have solved another fundamental problem with sodium-ion batteries. The problem is the amorphous carbon (also called “hard carbon”) on the anode. Until now, leading manufacturers like BYD and CATL were unable to prevent the loss of about a fifth of the battery’s capacity when charging the battery for the first time using this material.

The engineer did not give a detailed insight into how the Chinese global market leader managed to solve the problem. He only said: “CATL has developed a hard carbon that is characterized by a unique porous structure.” The problem of power loss has thus apparently been overcome.

Sodium-ion batteries and Europe

CATL’s investment in Europe has already made some headlines. Both European plants can also easily manufacture the new technologies. “The sodium-ion battery has a similar manufacturing process to the lithium-ion battery, which means that we can quickly switch from the lithium-ion battery to the sodium-ion battery thanks to our flexible production lines,” the engineer told China.Table. There would be a global standard for the production lines.

The sodium-ion cell also solves another bottleneck regarding the supply of raw materials. Not only does it not require lithium for production, but neither does it use nickel or cobalt – all of which are scarce commodities. CATL will base its production solely on demand. So now all that is left is for the orders to roll in.

  • Autoindustrie
  • CATL

New counter-espionage is making companies nervous

China steps up the fight against espionage in the “national interest”.

On Thursday, the Standing Committee of the People’s Congress passed a revision of the so-called “counter-espionage law”. The document stipulates a massive expansion of the powers of state security, which will facilitate raids and arrests without a court order.

This gives an already widespread practice a legal basis. Rumors had been circulating for days, now they are officially confirmed: The Shanghai security authorities have raided the offices of the China subsidiary of the US management consultancy Bain and confiscated laptops and smartphones. Some employees even spoke of multiple unannounced visits.

The nature of the investigation is not yet known. The company concerned has only stated that it would “cooperate with the Chinese authorities”. But it is suspected that the harassment of US companies is politically motivated.

Scope for arbitrary application

Above all, however, the law redefines the criminal definition of espionage: This means that not only state secrets are to be protected, but all documents or files that affect “national interests”. However, the latter is formulated so vaguely that it gives the authorities room for arbitrary application. The Communist Party intended this ambiguity: It creates a diffuse fear that ultimately leads to anticipatory obedience. After all, nobody knows where exactly the red lines are.

The law thus also alarms foreign companies operating in China. Ordinary market analyses can be interpreted as espionage, and interviews with Western journalists as a threat to national security.

European companies are unlikely to be the primary targets of the authorities for the time being, as the Chinese government has been massively wooing its largest trading partner for several months now. But should political relations deteriorate – for example, if the German government presents a new China strategy – the counter-espionage law could provide a welcome target for economic retaliation.

Justified concerns

A whole list of examples shows that this is not unfounded paranoia: In March, an employee of the Japanese pharmaceutical company Astella was arrested for espionage. In the same month, the authorities closed the Beijing office of the US-based Mintz Group, which conducts so-called legal compliance audits for company sales and IPOs. All of its five employees in Mainland China were arrested for “unlawful business activities”. At the time of the arrest, the company was unaware of any ongoing investigation.

And since such proceedings – concerning national security – always happen behind closed doors and even diplomats are not given access, it is often not even apparent whether the accusations are justified at all. After all, it is more than striking that it almost always hits companies from those countries whose relations with China have recently escalated.

A latent sense of danger is fuelled

For several years now, “security” has been probably the most frequently used buzzword by President Xi Jinping, who is using it to create a sense of latent danger among the population. A potential enemy of the state can lurk everywhere at any time, both outside and inside the country, is the message. In state-owned enterprises, it has long been customary to warn the workforce vaguely about foreign spies. The state media is also often portraying foreign journalists as potential agents of foreign intelligence services.

It is a fine line between security mania and economic ambitions: Because the government is simultaneously trying to actively promote trade relations with foreign countries after the economically devastating zero-Covid isolation. These days, the red carpet is literally being rolled out for the business delegations that are rolling in once again, so that the big companies do not relocate their production from China to India or Southeast Asia. Fabian Kretschmer

  • Company

Interview

‘I caution against China’s peace initiative’

Mikko Huotari, Executive Director of the Mercator Institute for China Studies (MERICS) in Berlin.

For more than a year, Ukraine’s President Volodymyr Zelenskiy has been requesting a meeting with Xi Jinping. Now it has finally happened. How surprising was Xi’s telephone call with Zelenskiy?

Not particularly surprising. The call had been planned for a long time, and the Chinese side recently said publicly that there would be such a call at the appropriate time. Moreover, it had been one of the European Union’s central demands for almost a year.

But why now of all times? What has changed?

On the one hand, the situation in Ukraine is changing. On the other hand, important events are coming up, such as the G7 summit and European debates on the future of China policy. Here, China had to take some pressure off and position itself. With this step, Beijing is of course also trying to play the ball back into the European camp: “We have met your demand, now it’s your turn”. Beijing continues to try to present itself as a responsible power.

Or does it perhaps have something to do with Emmanuel Macron? France’s President heavily wooed Xi Jinping in Beijing – and was heavily criticized in Europe for it. Do we now have to assume that Macron has actually persuaded Xi to become more active in resolving the war in Ukraine?

There is simply no evidence of this so far. There is much to suggest that it was joint European pressure and that the talks with Sanchez, Macron, Ursula von der Leyen and Annalena Baerbock in Beijing were merely the final catalyst. Whether Macron and Xi have already outlined further steps bilaterally, and whether these are viable, will become clear in the coming weeks.

How serious is China about its efforts?

China should be taken seriously when it comes to nuclear safety or humanitarian aid, for example. Beijing is already part of the conflict constellation today and will remain so – that is why it is important that diplomatic contacts, for example, have been resumed.

But many experts believe that China is benefiting from this war: cheap Russian oil and gas, a weak junior partner, Moscow, and the distraction of the United States.

That China would benefit from a long war in Ukraine is a thoroughly cynical interpretation of the situation. I believe China is smart enough not to turn away from Europe in the long term with such an attitude. At the same time, China also wants to support Russia and especially Putin as much as possible. Despite all skepticism and concern, it remains sensible and necessary to remain in close exchange with Beijing.

Support Putin as much as possible? So China’s position has not changed after all?

Correct. In essence, nothing has changed about China’s position.

The West is also skeptical. How could Xi “prove” that he is not Putin’s ally but genuinely interested in peace?

It is not in Beijing’s interest at all to prove that it is not an ally of Putin. Rather, it has clearly stated that China and Russia are on the same side. No one should have serious doubts about that. But Beijing remains a key player and can be part of a mediated solution. How much China’s behavior is then in the Ukrainian or even the European interest, however, remains more than questionable.

What are the biggest problems for China as a peace broker?

China must name clear preconditions for a ceasefire or the withdrawal of troops. Here, China would also have to make clear demands on Putin – and Xi is not doing that at the moment. Another huge problem is that China is still not speaking of war, but only of a crisis. The fact that Beijing sees mutual responsibility for the war also remains deeply problematic.

China is currently very successful as a mediator in other regions and conflicts, for example in the conflict between Iran and Saudi Arabia.

That is true. But the Ukraine war is of a very different caliber, especially compared to talks between Iran and Saudi Arabia, where China has contributed little of substance beyond playing the host. But yes, in the future we will probably not be able to avoid China as an actor when dealing with global conflict hotspots. But again, the Ukraine war is of a very different caliber.

In an interview with Table.Media, the seasoned foreign policy expert Norbert Roettgen urgently warned against integrating China into the European security architecture. Is he mistaken?

No, he is absolutely right. China poses a security challenge for Europe in many areas.

So China is supposed to mediate in Ukraine – and with that, Beijing has done its duty?

No. I see another problem: It is unlikely that China would act in Ukraine’s and Europe’s interests. China’s perception of the European security order is much closer to Russian ideas than to ours.

Mikko Huotari is the Executive Director of the Mercator Institute for China Studies (Merics) in Berlin.

  • Geopolitics

Events

May 2, 2023; 5 p.m. CET (11 p.m. CST)
Center for Strategic & International Studies, Webinar: Chinese Assessments of the Soviet Union’s Collapse More

May 2, 2023; 6 p.m CET
Center for East European and International Studies, lecture (on site in Berlin): Silk Road Talk: China in Eastern Europe: Challenges and Opportunities More

May 3, 2023; 10 p.m CET (May 4, 2023; 4 p.m CST)
Fairbank Center for Chinese Studies, Webinar: The Tormented Alliance: American Servicemen and the Occupation of China, 1941-1949 More

May 4, 2023; 3:45 p.m CET
Dezan Shira & Associates, lecture and networking (on-site in Munich): Remote Workers: A legal and tax perspective within the current European and Asian framework More

May 4, 2023; 3 p.m CET (9 p.m. CST)
Center for Strategic & International Studies, Webcast: Allies and Geopolitical Competition in the Indo-Pacific Region More

News

BASF criticized over China strategy

BASF Chairman of the Board of Executive Directors Martin Bruermueller faced harsh criticism for his China strategy at the shareholders’ meeting of the DAX-listed company. The focus is a ten-billion investment in a new Verbund site in China.

Arne Rautenberg, fund manager at Union Investment, which represents the interests of 5.8 million investors as a major shareholder, referred to the Russian war on Ukraine. He said it showed “how quickly geopolitical nightmares” could become reality. Addressing Brothermueller, he said: “But you are unwaveringly sticking to your China strategy, which the capital market considers a high-risk strategy, as a potential Chinese attack on Taiwan could lead to a total loss of the China business.”

Haiyuer Kuerban of the World Uyghur Congress (WUC) cited the human rights situation in the Xinjiang Autonomous Region and the risk of BASF’s involvement in forced labor systems there. “BASF has repeatedly asserted that there is no forced labor in its joint ventures and that audits have been carried out. However, the Ethical Trading Initiative rules out any independent verification of working conditions due to the widespread repression,” said Kuerban. BASF referred to internal audits and to “concrete discussions” with an external auditor about audits in the future.

Brudermueller defends his strategy

BASF operates two joint ventures in the industrial zone of the city of Korla. According to official Chinese documents, thousands of Uyghur workers were involuntarily transferred there to work under conditions that are suspected to be forced labor. “To the best of our knowledge,” the Board said, “no Uyghurs are employed in either of the two joint ventures”. Markus Kamieth, the board member responsible for China, emphasized that the company upholds “very high ethical standards”. This would apply to all subsidiaries, including those in Xinjiang.

Haiyuer Kuerban of the World Uyghur Congress, on the other hand, raised further concerns. “We are also concerned that BASF’s joint venture partner Xinjiang Markor Chemical is indirectly owned by the Xinjiang Zhongtai Group. It is actively involved in the Chinese government’s Uyghur labor transfers and indoctrination and surveillance of Uyghur workers.”

Possible consequences on the financial markets

Regardless of the criticism, Brudermueller announced that BASF would continue to grow in China. The chemical industry generates half of its sales in the People’s Republic. At BASF, however, China represents less than 15 percent of the company’s total sales. From this perspective, China is still underweighted for the company.

Tilman Massa of the umbrella organization Association of Ethical Shareholders Germany expressed his disappointment with Brothermueller. “He did not take a position on the major geopolitical risks of the involvement in China. He dismissed a possible military escalation because of Taiwan as purely hypothetical,” said Massa.

BASF could face consequences on the financial markets. For example, if Union Investment and other major investors were to remove BASF shares from their sustainability funds. This would trigger a possible domino effect if a broad front of shareholders were to consider the investability of the company’s securities from a sustainability perspective.

The German car manufacturer Volkswagen may also have to deal with such a development. The fund company Deka has already removed VW’s stock from its sustainability segment for its involvement in Xinjiang. grz

  • Xinjiang

Sino-German government consultations in June

The next Sino-German government consultations will be held in June, according to German government sources. It will be a presence meeting of a large part of the cabinet ministers of both sides. The exact date is rumored to be June 20 in Berlin.

The government consultations have been held regularly since 2011. During the pandemic, the meeting was virtual. The consultations were not held last year. The purpose is for ministers and senior officials to exchange views in person. Critics see the large-scale meeting primarily as a PR success for Beijing, celebrating its special partnership with Germany. Germany maintains such consultations primarily with European neighbors such as France, Italy and Poland. Internationally, they exist with Japan, Israel, India and Brazil.

Since the sixth consultations, the climate and the topics have changed considerably. In 2021, Angela Merkel and Li Keqiang were still sitting at the table as heads of government, and they were still committed to a spirit of partnership. The atmosphere between the ministers of the current German government and Li Qiang will likely be much more robust. In addition to substantive issues, the talks will also focus on controversial issues like the Ukraine war.

In the run-up to the consultations, preparatory visits to Beijing and Berlin are planned by heads of departments and officials. The current tour by Commerce Minister Wang Wentao is likely to be part of this. fin

Berlin considers restricting export of chip chemicals

The German government is apparently considering restricting the export of chemicals for semiconductor manufacturing to China. The German government is also discussing further export restrictions affecting the chip industry, Bloomberg reports. The consideration is part of the German government’s planned China strategy, the new agency said. Merck and BASF are mentioned as possibly affected manufacturers.

The United States wants to cut China off from global advanced technology for the production of state-of-the-art microchips. The Netherlands and Japan have already joined. The German government has not joined in, even though some affected companies are located in Germany. It focuses on case-by-case decisions by the Economy Ministry. fin

  • Semiconductor
  • Technology
  • Trade

Evacuation of citizens from Sudan

The Chinese government has evacuated more than 1,300 of its citizens from Sudan after heavy fighting broke out between paramilitaries and government troops nearly two weeks ago. Foreign Office spokeswoman Mao Ning assured that some already had left Sudan aboard Chinese naval vessels. Only a few Chinese remain in Sudan outside Khartoum, she said. According to state media reports, 300 Chinese nationals entered neighboring countries.

China’s navy deployed several ships, as reported by the Ministry of Defense in Beijing. Videos on social media showed Chinese citizens waiting in the harbor to board the ships. The Foreign Office spokeswoman stated that the evacuation of nationals from five other countries had also been assisted. She did not say how many naval vessels were involved in the operation. flee

Heads

Michael Schumann – building bridges to China

Michael Schumann is Chairman of the German Federal Association for Economic Development and Foreign Trade and China Bruecke.

Michael Schumann considers it arrogant when German politicians, media representatives and opinion leaders rest on Germany’s good global reputation and condemn countries like China without having dealt with them more intensively. He voiced his criticism in a recent TV-Berlin interview with Claudia Suender and also in a video call with Table.Media.

The Chairman of the German Federal Association for Economic Development and Foreign Trade (BWA) describes his observations and assessments objectively and bases them on experiences he has made during his career. He has deep respect for the diversity of human societies in general and Chinese culture in particular. This is an attitude that runs through his many and varied activities.

Schumann is co-founder and chairman of China-Brücke, a public diplomacy forum for Sino-German relations. In this role, he deals intensively with intercultural barriers and advises German companies that want to open up the Chinese market. There are many challenges – such as the long visa application times for Chinese business partners, risk assessment in current geopolitically tense situations, or the question of how to attract skilled employees to a region that is largely negatively portrayed in the media.

Criticism of current narratives

Schumann cites the coverage of the pandemic as an example: “The current narrative on the last three years of the pandemic in China is dominated by the statement that the Chinese Covid policy was a disaster and ultimately a failure,” says Schumann. But the fact that many Chinese were able to lead relatively normal lives during two of those three years “while we were in lockdown here at home” should not be overlooked, he adds.

Regarding the issue of systemic rivals: “Why doesn’t Germany take China as a good example in certain areas when it comes to learning from one another?” In a state-subsidized program of the State Administration of Foreign Experts Affairs, for example, China has sent thousands of executives from companies, administration and politics abroad for two-week theoretical and practical programs over many years. The goal: Analyzing possible impulses for making your own society better using specific topics. “Using the German tax system as an example, for instance, the Chinese participants eagerly noted what we understand as a Whitebook or a Blackbook,” recalls the 52-year-old. “And then thought about ways to integrate something like that into the Chinese system.”

Formative encounters

Schumann’s first contact with China was in 2010 during preparations for the World Expo in Shanghai, for which he was tasked with choosing German innovations. The experience was so influential that he opened the office of the German Association for Economic Development and Foreign Trade in Shanghai shortly after. He helped establish the association in 2006.

When Schumann arranges contacts with Chinese institutions and decision-makers for German companies, or brings renowned Chinese corporations to Germany, he always follows one principle: go there, listen, and build trust. In the meantime, he has traveled to China over a hundred times. Schumann is married to a Chinese woman and has lived in Shanghai for five years. Janna Degener-Storr

Executive Moves

Shao Ping Guan will become the new Head of China Equity at Allianz Global Investors. As of July 1, he will be responsible for the portfolio management of Chinese equity strategies from Hong Kong. He succeeds Anthony Wong.

Michael Schalk has been Press Officer Production, Logistics and Locations China for Audi AG since February 2023.

Is something changing in your organization? Let us know at heads@table.media!

Dessert

Manual labor does not necessarily mean being technically backward. Like most rice farmers in southern China, these farmers in Yuping-Dong County, Guizhou Province, swear by man-made rice terraces. Heavy equipment is almost impossible to use on small plots. Yet the farmers still bring in several harvests a year – by tending the fields as carefully as they do in this picture.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    Dear reader,

    Once again it becomes clear that the electric revolution is coming from China. While every fourth new car in the People’s Republic is already electric – 80 percent of which are made in China – the battery manufacturer CATL from Ningde surprised with another sensation at the car show in Shanghai: CATL presented a battery that can store 500 watt-hours of electricity per kilogram of battery cell. Previous batteries can hold no more than half that amount.

    This creates completely new electrification possibilities, for example, for small cars or purely electrically powered trucks, even electric aircraft. Up to now, the batteries have been too heavy for this. CATL intends to begin production before the end of this year. The second piece of positive news, as Christian Domke-Seidel analyzes, is that CATL’s European plants will also be involved.

    Technically more advanced, but otherwise more and more repressive – this is evident from the amendment to the counter-espionage law passed by the People’s Congress. The amendment is intended to no longer only protect state secrets, but also vaguely defined “national interests”. Foreign companies in China already have to fear repercussions, writes our author Fabian Kretschmer. It is above all these vague wording in laws that once again make China an unpredictable, arbitrary state.

    Your
    Felix Lee
    Image of Felix  Lee

    Feature

    CATL achieves breakthrough in battery technology

    At Auto Shanghai, battery manufacturer CATL surprises with the sodium-ion battery.

    No other component decides the success of electric mobility like the battery. It is what makes the car expensive. Moreover, many customers focus on the range and charging time when considering the suitability of an EV for everyday use. Contemporary Amperex Technology Co Limited (CATL) has made a breakthrough in this area.

    The Chinese company from Ningde, in the province of Fujian, has managed to make the sodium-ion battery ready for large-scale production. It is significantly cheaper, more resilient to temperature fluctuations and requires less raw materials, a CATL engineer told China.Table. This may also have an impact on the group’s European sites.

    Sodium-ion battery: New reality of electric mobility

    Even many visitors to the Auto Shanghai show may not have fully realized the huge implications of the presentation: In the run-up to the exhibition, the manufacturer Chery presented its new brand iCar including two new vehicles: the iCar GT (a flat electric sports car) and the iCar 03 (a compact SUV with a length of 4.2 meters). A sodium-ion battery supplies the power the vehicles need. CATL announced the large-scale production of this technology only a few days before.

    The development could give the global EV market an enormous boost. Because sodium-ion batteries solve existing key problems with lithium-ion batteries.

    1. Cost: Sodium-ion batteries are about 20 percent cheaper per kilowatt-hour than lithium-based variants.
    2. Raw material dependence: Sodium is available in larger quantities and is easier to extract than lithium. “In addition, aluminum foils can be used as power collectors, which are much cheaper than the copper foils used in lithium-ion batteries,” explained a CATL engineer.
    3. Temperature resilience: At minus 20 degrees Celsius, sodium-ion batteries have a capacity retention rate of more than 90 percent.

    The comparatively low cost makes sodium-ion batteries particularly interesting for small and compact cars – i.e. in vehicle classes with high sales figures where electrification has not progressed as far yet. This should lead to noticeable economies of scale within a very short time. According to CATL, even electric aircraft are now possible due to the low weight combined with much higher performance.

    BYD is also said to be close to mass-producing a sodium-ion battery. The manufacturer is reportedly planning to integrate the battery into the Qin, Dolphin and Seagull models in the second half of 2023. However, the brand has not yet officially confirmed this. It is merely based on insider information.

    Problems of sodium-ion batteries

    However, the sodium-ion battery is not yet utilizing its potential in practice. The energy density of CATL’s first-generation sodium-ion battery cell is up to 160 watt-hours per kilogram. Conventional lithium-ion batteries, on the other hand, already achieve around 200 watt-hours per kilogram. A figure that CATL wants to match in the next generation of sodium-ion batteries.

    To compensate for this disadvantage in the short term, CATL is initially shipping a combination of sodium and lithium-ion batteries. However, while sodium technology is just in the early stages and can reach up to 500 watt-hours per kilogram, lithium technology is already largely at its limits.

    The CATL engineers seem to have solved another fundamental problem with sodium-ion batteries. The problem is the amorphous carbon (also called “hard carbon”) on the anode. Until now, leading manufacturers like BYD and CATL were unable to prevent the loss of about a fifth of the battery’s capacity when charging the battery for the first time using this material.

    The engineer did not give a detailed insight into how the Chinese global market leader managed to solve the problem. He only said: “CATL has developed a hard carbon that is characterized by a unique porous structure.” The problem of power loss has thus apparently been overcome.

    Sodium-ion batteries and Europe

    CATL’s investment in Europe has already made some headlines. Both European plants can also easily manufacture the new technologies. “The sodium-ion battery has a similar manufacturing process to the lithium-ion battery, which means that we can quickly switch from the lithium-ion battery to the sodium-ion battery thanks to our flexible production lines,” the engineer told China.Table. There would be a global standard for the production lines.

    The sodium-ion cell also solves another bottleneck regarding the supply of raw materials. Not only does it not require lithium for production, but neither does it use nickel or cobalt – all of which are scarce commodities. CATL will base its production solely on demand. So now all that is left is for the orders to roll in.

    • Autoindustrie
    • CATL

    New counter-espionage is making companies nervous

    China steps up the fight against espionage in the “national interest”.

    On Thursday, the Standing Committee of the People’s Congress passed a revision of the so-called “counter-espionage law”. The document stipulates a massive expansion of the powers of state security, which will facilitate raids and arrests without a court order.

    This gives an already widespread practice a legal basis. Rumors had been circulating for days, now they are officially confirmed: The Shanghai security authorities have raided the offices of the China subsidiary of the US management consultancy Bain and confiscated laptops and smartphones. Some employees even spoke of multiple unannounced visits.

    The nature of the investigation is not yet known. The company concerned has only stated that it would “cooperate with the Chinese authorities”. But it is suspected that the harassment of US companies is politically motivated.

    Scope for arbitrary application

    Above all, however, the law redefines the criminal definition of espionage: This means that not only state secrets are to be protected, but all documents or files that affect “national interests”. However, the latter is formulated so vaguely that it gives the authorities room for arbitrary application. The Communist Party intended this ambiguity: It creates a diffuse fear that ultimately leads to anticipatory obedience. After all, nobody knows where exactly the red lines are.

    The law thus also alarms foreign companies operating in China. Ordinary market analyses can be interpreted as espionage, and interviews with Western journalists as a threat to national security.

    European companies are unlikely to be the primary targets of the authorities for the time being, as the Chinese government has been massively wooing its largest trading partner for several months now. But should political relations deteriorate – for example, if the German government presents a new China strategy – the counter-espionage law could provide a welcome target for economic retaliation.

    Justified concerns

    A whole list of examples shows that this is not unfounded paranoia: In March, an employee of the Japanese pharmaceutical company Astella was arrested for espionage. In the same month, the authorities closed the Beijing office of the US-based Mintz Group, which conducts so-called legal compliance audits for company sales and IPOs. All of its five employees in Mainland China were arrested for “unlawful business activities”. At the time of the arrest, the company was unaware of any ongoing investigation.

    And since such proceedings – concerning national security – always happen behind closed doors and even diplomats are not given access, it is often not even apparent whether the accusations are justified at all. After all, it is more than striking that it almost always hits companies from those countries whose relations with China have recently escalated.

    A latent sense of danger is fuelled

    For several years now, “security” has been probably the most frequently used buzzword by President Xi Jinping, who is using it to create a sense of latent danger among the population. A potential enemy of the state can lurk everywhere at any time, both outside and inside the country, is the message. In state-owned enterprises, it has long been customary to warn the workforce vaguely about foreign spies. The state media is also often portraying foreign journalists as potential agents of foreign intelligence services.

    It is a fine line between security mania and economic ambitions: Because the government is simultaneously trying to actively promote trade relations with foreign countries after the economically devastating zero-Covid isolation. These days, the red carpet is literally being rolled out for the business delegations that are rolling in once again, so that the big companies do not relocate their production from China to India or Southeast Asia. Fabian Kretschmer

    • Company

    Interview

    ‘I caution against China’s peace initiative’

    Mikko Huotari, Executive Director of the Mercator Institute for China Studies (MERICS) in Berlin.

    For more than a year, Ukraine’s President Volodymyr Zelenskiy has been requesting a meeting with Xi Jinping. Now it has finally happened. How surprising was Xi’s telephone call with Zelenskiy?

    Not particularly surprising. The call had been planned for a long time, and the Chinese side recently said publicly that there would be such a call at the appropriate time. Moreover, it had been one of the European Union’s central demands for almost a year.

    But why now of all times? What has changed?

    On the one hand, the situation in Ukraine is changing. On the other hand, important events are coming up, such as the G7 summit and European debates on the future of China policy. Here, China had to take some pressure off and position itself. With this step, Beijing is of course also trying to play the ball back into the European camp: “We have met your demand, now it’s your turn”. Beijing continues to try to present itself as a responsible power.

    Or does it perhaps have something to do with Emmanuel Macron? France’s President heavily wooed Xi Jinping in Beijing – and was heavily criticized in Europe for it. Do we now have to assume that Macron has actually persuaded Xi to become more active in resolving the war in Ukraine?

    There is simply no evidence of this so far. There is much to suggest that it was joint European pressure and that the talks with Sanchez, Macron, Ursula von der Leyen and Annalena Baerbock in Beijing were merely the final catalyst. Whether Macron and Xi have already outlined further steps bilaterally, and whether these are viable, will become clear in the coming weeks.

    How serious is China about its efforts?

    China should be taken seriously when it comes to nuclear safety or humanitarian aid, for example. Beijing is already part of the conflict constellation today and will remain so – that is why it is important that diplomatic contacts, for example, have been resumed.

    But many experts believe that China is benefiting from this war: cheap Russian oil and gas, a weak junior partner, Moscow, and the distraction of the United States.

    That China would benefit from a long war in Ukraine is a thoroughly cynical interpretation of the situation. I believe China is smart enough not to turn away from Europe in the long term with such an attitude. At the same time, China also wants to support Russia and especially Putin as much as possible. Despite all skepticism and concern, it remains sensible and necessary to remain in close exchange with Beijing.

    Support Putin as much as possible? So China’s position has not changed after all?

    Correct. In essence, nothing has changed about China’s position.

    The West is also skeptical. How could Xi “prove” that he is not Putin’s ally but genuinely interested in peace?

    It is not in Beijing’s interest at all to prove that it is not an ally of Putin. Rather, it has clearly stated that China and Russia are on the same side. No one should have serious doubts about that. But Beijing remains a key player and can be part of a mediated solution. How much China’s behavior is then in the Ukrainian or even the European interest, however, remains more than questionable.

    What are the biggest problems for China as a peace broker?

    China must name clear preconditions for a ceasefire or the withdrawal of troops. Here, China would also have to make clear demands on Putin – and Xi is not doing that at the moment. Another huge problem is that China is still not speaking of war, but only of a crisis. The fact that Beijing sees mutual responsibility for the war also remains deeply problematic.

    China is currently very successful as a mediator in other regions and conflicts, for example in the conflict between Iran and Saudi Arabia.

    That is true. But the Ukraine war is of a very different caliber, especially compared to talks between Iran and Saudi Arabia, where China has contributed little of substance beyond playing the host. But yes, in the future we will probably not be able to avoid China as an actor when dealing with global conflict hotspots. But again, the Ukraine war is of a very different caliber.

    In an interview with Table.Media, the seasoned foreign policy expert Norbert Roettgen urgently warned against integrating China into the European security architecture. Is he mistaken?

    No, he is absolutely right. China poses a security challenge for Europe in many areas.

    So China is supposed to mediate in Ukraine – and with that, Beijing has done its duty?

    No. I see another problem: It is unlikely that China would act in Ukraine’s and Europe’s interests. China’s perception of the European security order is much closer to Russian ideas than to ours.

    Mikko Huotari is the Executive Director of the Mercator Institute for China Studies (Merics) in Berlin.

    • Geopolitics

    Events

    May 2, 2023; 5 p.m. CET (11 p.m. CST)
    Center for Strategic & International Studies, Webinar: Chinese Assessments of the Soviet Union’s Collapse More

    May 2, 2023; 6 p.m CET
    Center for East European and International Studies, lecture (on site in Berlin): Silk Road Talk: China in Eastern Europe: Challenges and Opportunities More

    May 3, 2023; 10 p.m CET (May 4, 2023; 4 p.m CST)
    Fairbank Center for Chinese Studies, Webinar: The Tormented Alliance: American Servicemen and the Occupation of China, 1941-1949 More

    May 4, 2023; 3:45 p.m CET
    Dezan Shira & Associates, lecture and networking (on-site in Munich): Remote Workers: A legal and tax perspective within the current European and Asian framework More

    May 4, 2023; 3 p.m CET (9 p.m. CST)
    Center for Strategic & International Studies, Webcast: Allies and Geopolitical Competition in the Indo-Pacific Region More

    News

    BASF criticized over China strategy

    BASF Chairman of the Board of Executive Directors Martin Bruermueller faced harsh criticism for his China strategy at the shareholders’ meeting of the DAX-listed company. The focus is a ten-billion investment in a new Verbund site in China.

    Arne Rautenberg, fund manager at Union Investment, which represents the interests of 5.8 million investors as a major shareholder, referred to the Russian war on Ukraine. He said it showed “how quickly geopolitical nightmares” could become reality. Addressing Brothermueller, he said: “But you are unwaveringly sticking to your China strategy, which the capital market considers a high-risk strategy, as a potential Chinese attack on Taiwan could lead to a total loss of the China business.”

    Haiyuer Kuerban of the World Uyghur Congress (WUC) cited the human rights situation in the Xinjiang Autonomous Region and the risk of BASF’s involvement in forced labor systems there. “BASF has repeatedly asserted that there is no forced labor in its joint ventures and that audits have been carried out. However, the Ethical Trading Initiative rules out any independent verification of working conditions due to the widespread repression,” said Kuerban. BASF referred to internal audits and to “concrete discussions” with an external auditor about audits in the future.

    Brudermueller defends his strategy

    BASF operates two joint ventures in the industrial zone of the city of Korla. According to official Chinese documents, thousands of Uyghur workers were involuntarily transferred there to work under conditions that are suspected to be forced labor. “To the best of our knowledge,” the Board said, “no Uyghurs are employed in either of the two joint ventures”. Markus Kamieth, the board member responsible for China, emphasized that the company upholds “very high ethical standards”. This would apply to all subsidiaries, including those in Xinjiang.

    Haiyuer Kuerban of the World Uyghur Congress, on the other hand, raised further concerns. “We are also concerned that BASF’s joint venture partner Xinjiang Markor Chemical is indirectly owned by the Xinjiang Zhongtai Group. It is actively involved in the Chinese government’s Uyghur labor transfers and indoctrination and surveillance of Uyghur workers.”

    Possible consequences on the financial markets

    Regardless of the criticism, Brudermueller announced that BASF would continue to grow in China. The chemical industry generates half of its sales in the People’s Republic. At BASF, however, China represents less than 15 percent of the company’s total sales. From this perspective, China is still underweighted for the company.

    Tilman Massa of the umbrella organization Association of Ethical Shareholders Germany expressed his disappointment with Brothermueller. “He did not take a position on the major geopolitical risks of the involvement in China. He dismissed a possible military escalation because of Taiwan as purely hypothetical,” said Massa.

    BASF could face consequences on the financial markets. For example, if Union Investment and other major investors were to remove BASF shares from their sustainability funds. This would trigger a possible domino effect if a broad front of shareholders were to consider the investability of the company’s securities from a sustainability perspective.

    The German car manufacturer Volkswagen may also have to deal with such a development. The fund company Deka has already removed VW’s stock from its sustainability segment for its involvement in Xinjiang. grz

    • Xinjiang

    Sino-German government consultations in June

    The next Sino-German government consultations will be held in June, according to German government sources. It will be a presence meeting of a large part of the cabinet ministers of both sides. The exact date is rumored to be June 20 in Berlin.

    The government consultations have been held regularly since 2011. During the pandemic, the meeting was virtual. The consultations were not held last year. The purpose is for ministers and senior officials to exchange views in person. Critics see the large-scale meeting primarily as a PR success for Beijing, celebrating its special partnership with Germany. Germany maintains such consultations primarily with European neighbors such as France, Italy and Poland. Internationally, they exist with Japan, Israel, India and Brazil.

    Since the sixth consultations, the climate and the topics have changed considerably. In 2021, Angela Merkel and Li Keqiang were still sitting at the table as heads of government, and they were still committed to a spirit of partnership. The atmosphere between the ministers of the current German government and Li Qiang will likely be much more robust. In addition to substantive issues, the talks will also focus on controversial issues like the Ukraine war.

    In the run-up to the consultations, preparatory visits to Beijing and Berlin are planned by heads of departments and officials. The current tour by Commerce Minister Wang Wentao is likely to be part of this. fin

    Berlin considers restricting export of chip chemicals

    The German government is apparently considering restricting the export of chemicals for semiconductor manufacturing to China. The German government is also discussing further export restrictions affecting the chip industry, Bloomberg reports. The consideration is part of the German government’s planned China strategy, the new agency said. Merck and BASF are mentioned as possibly affected manufacturers.

    The United States wants to cut China off from global advanced technology for the production of state-of-the-art microchips. The Netherlands and Japan have already joined. The German government has not joined in, even though some affected companies are located in Germany. It focuses on case-by-case decisions by the Economy Ministry. fin

    • Semiconductor
    • Technology
    • Trade

    Evacuation of citizens from Sudan

    The Chinese government has evacuated more than 1,300 of its citizens from Sudan after heavy fighting broke out between paramilitaries and government troops nearly two weeks ago. Foreign Office spokeswoman Mao Ning assured that some already had left Sudan aboard Chinese naval vessels. Only a few Chinese remain in Sudan outside Khartoum, she said. According to state media reports, 300 Chinese nationals entered neighboring countries.

    China’s navy deployed several ships, as reported by the Ministry of Defense in Beijing. Videos on social media showed Chinese citizens waiting in the harbor to board the ships. The Foreign Office spokeswoman stated that the evacuation of nationals from five other countries had also been assisted. She did not say how many naval vessels were involved in the operation. flee

    Heads

    Michael Schumann – building bridges to China

    Michael Schumann is Chairman of the German Federal Association for Economic Development and Foreign Trade and China Bruecke.

    Michael Schumann considers it arrogant when German politicians, media representatives and opinion leaders rest on Germany’s good global reputation and condemn countries like China without having dealt with them more intensively. He voiced his criticism in a recent TV-Berlin interview with Claudia Suender and also in a video call with Table.Media.

    The Chairman of the German Federal Association for Economic Development and Foreign Trade (BWA) describes his observations and assessments objectively and bases them on experiences he has made during his career. He has deep respect for the diversity of human societies in general and Chinese culture in particular. This is an attitude that runs through his many and varied activities.

    Schumann is co-founder and chairman of China-Brücke, a public diplomacy forum for Sino-German relations. In this role, he deals intensively with intercultural barriers and advises German companies that want to open up the Chinese market. There are many challenges – such as the long visa application times for Chinese business partners, risk assessment in current geopolitically tense situations, or the question of how to attract skilled employees to a region that is largely negatively portrayed in the media.

    Criticism of current narratives

    Schumann cites the coverage of the pandemic as an example: “The current narrative on the last three years of the pandemic in China is dominated by the statement that the Chinese Covid policy was a disaster and ultimately a failure,” says Schumann. But the fact that many Chinese were able to lead relatively normal lives during two of those three years “while we were in lockdown here at home” should not be overlooked, he adds.

    Regarding the issue of systemic rivals: “Why doesn’t Germany take China as a good example in certain areas when it comes to learning from one another?” In a state-subsidized program of the State Administration of Foreign Experts Affairs, for example, China has sent thousands of executives from companies, administration and politics abroad for two-week theoretical and practical programs over many years. The goal: Analyzing possible impulses for making your own society better using specific topics. “Using the German tax system as an example, for instance, the Chinese participants eagerly noted what we understand as a Whitebook or a Blackbook,” recalls the 52-year-old. “And then thought about ways to integrate something like that into the Chinese system.”

    Formative encounters

    Schumann’s first contact with China was in 2010 during preparations for the World Expo in Shanghai, for which he was tasked with choosing German innovations. The experience was so influential that he opened the office of the German Association for Economic Development and Foreign Trade in Shanghai shortly after. He helped establish the association in 2006.

    When Schumann arranges contacts with Chinese institutions and decision-makers for German companies, or brings renowned Chinese corporations to Germany, he always follows one principle: go there, listen, and build trust. In the meantime, he has traveled to China over a hundred times. Schumann is married to a Chinese woman and has lived in Shanghai for five years. Janna Degener-Storr

    Executive Moves

    Shao Ping Guan will become the new Head of China Equity at Allianz Global Investors. As of July 1, he will be responsible for the portfolio management of Chinese equity strategies from Hong Kong. He succeeds Anthony Wong.

    Michael Schalk has been Press Officer Production, Logistics and Locations China for Audi AG since February 2023.

    Is something changing in your organization? Let us know at heads@table.media!

    Dessert

    Manual labor does not necessarily mean being technically backward. Like most rice farmers in southern China, these farmers in Yuping-Dong County, Guizhou Province, swear by man-made rice terraces. Heavy equipment is almost impossible to use on small plots. Yet the farmers still bring in several harvests a year – by tending the fields as carefully as they do in this picture.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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