Table.Briefing: China (English)

Threats against Taiwan + Huawei summit at the German Chancellery

Dear reader,

The new Taiwanese government has been in office for less than a week and is already faced with several massive challenges: On Thursday, China announced a two-day military exercise around Taiwan’s main island and smaller offshore islands in what is seen as a reaction to new President Lai Ching-te’s inauguration speech. Lai’s inauguration was also overshadowed by conflicts in the opposition-controlled parliament. Further protests are planned there for Friday. David Demes summarizes the events.

Meanwhile, Berlin continues to struggle with Huawei. Chancellor Olaf Scholz could have put his foot down a long time ago – but the meeting on Thursday that discussed the Chinese telecommunications supplier at the Chancellery failed to produce any results. Scholz is clearly in no hurry to enter into a trade conflict with China. Now he could create clarity before the parliamentary summer recess. How? With a compromise. The Huawei components already installed in the access network will stay in – until they are replaced anyway at the end of the decade with the switch to 6G. With European products from Ericsson and Nokia.

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Amelie Richter
Image of Amelie  Richter

Feature

Exercises and threats: Why China reacts so severely to Lai

A Taiwanese soldier observes the Chinese destroyer Shaoxing.

The new Taiwanese government has not even been in office for a week and is already facing a range of massive challenges. On Thursday, China announced a two-day military exercise around the main island of Taiwan and smaller offshore islands in what is believed to be a reaction to the inauguration speech by the new president, Lai Ching-te. According to the official announcement, the so-called “Joint Sword 2024A” maneuver is aimed at punishing “separatist efforts” by Taiwanese independence forces and warning foreign countries against interfering in the Taiwan question.

Taiwan ‘independence’ is doomed to failure,” said Foreign Ministry spokesman Wang Wenbin at a daily press conference. “Anyone seeking ‘Taiwan independence’ will find themselves crushed by the historic trend of China’s complete reunification.”

The AFP news agency quoted Wang Wenbin differently in a report on Thursday morning. In it, Wang said that “Taiwan independence forces will be left with their heads broken and blood flowing” for attempting to fight China’s undertaking of “achieving complete unification.” The foreign ministry’s website was last updated this afternoon.

Taiwan’s military reacts routinely

China announced the exercises at 7:45 on Thursday morning and dispatched several warships and fighter jets to the waters and airspace around Taiwan throughout the day. According to state television CCTV, several dozen fighter aircraft armed with live ammunition circled Taiwan. “Under the support and cover of the Army and the Rocket Force, multiple types of aircraft […] coordinated with destroyers, frigates, and missile speedboats to simulate attacking the ‘enemy’s’ high-value military targets and reconnaissance and patrol aircraft,” the report said.

Taiwan’s military responded to the announcements from Beijing with routine composure. Its Army, Air Force and Navy were monitoring the situation closely and were ready to react quickly to any sudden changes in the situation. “We seek no conflicts, but we will not shy away from one,” is the official line.

In the afternoon, Taiwan’s Ministry of Defense and the Coast Guard released several videos showing Taiwanese units monitoring Chinese combat vessels and keeping them at a distance. The Ministry of Defense reported that no ships or aircraft had entered the so-called contiguous zone of the main island (24 nautical miles off the coast) by the evening. However, Chinese coastguard vessels were reported to have entered restricted waters up to 2.8 and 3.1 nautical miles off the islands of Wuqiu and Dongyin, which are closer to the Chinese mainland than to Taiwan.

China practices breaking through the ‘three lines’

The main difference between the last “Joint Sword” maneuver in 2023 and the large-scale exercises after Nancy Pelosi’s visit in August last year appears to be the proximity of the declared exercise zones to the eastern Taiwanese coastal city of Hualien. It is not only home to an important port, but also the Chiashan Air Force Base, which plays an important role in the event of war.

According to Zhang Chi, a lecturer at the National Defence University of the People’s Liberation Army, the exercises in the eastern part of Taiwan are aimed at practicing the breaching of the “three lines”: the “lifeline of energy imports,” the “escape route of Taiwanese independence forces” that might try to flee across the sea, and the “supply line of the United States and its allies providing aid to Taiwanese independence forces,” political scientist Zhang told CCTV.

Designation hints at further exercises

The spokesperson for the Taiwanese presidential office, Kuo Ya-hui, called the Chinese exercises “regrettable.” China was “using unilateral military provocations to threaten Taiwan’s democracy and freedom,” Kuo said in a video statement. She stressed that maintaining peace and stability in the region should be the shared responsibility and common goal of both sides of the Taiwan Strait.

Military analyst Ben Lewis noted on Twitter/X that the designation “Joint Sword 2024A” could indicate the start of a series of exercises (B, C, D, etc.). However, the Taiwanese Ministry of Defense did not want to confirm this assumption in the evening.

Domestic policy: scuffles over proposed legislation

However, Beijing’s threats are not the only headache for Taiwan’s new government. It also faces considerable challenges from the domestic opposition. On May 17, violent disputes broke out in parliament when the opposition Kuomintang (KMT), which controls the legislature with the support of the Taiwan People’s Party (TPP), wanted to push through a bill to expand the power of parliament and restrict that of the executive.

DPP deputies, who have been in the minority since the January elections, tried to prevent the vote by occupying the lectern. In the ensuing scuffle, four DPP MPs and one KMT MP sustained injuries so severe that they required medical assistance. The images of the fighting in parliament and the dramatic fall of an MP caused a nationwide uproar, with several hundred protesters quickly gathering in front of parliament on the same evening.

Parliamentary reform could weaken democracy

The so-called “parliamentary reform” aims to grant the legislature more investigative rights, which are currently mainly the responsibility of the justice system and the control yuan, which is unique in Taiwan’s political system. In addition, the plan is to oblige the president to regularly answer questions in parliament. Another point of contention is the planned punishment for “contempt of parliament.” For example, a minister asking a question in return when questioned by MPs could already be interpreted as contempt. When German broadcaster Deutsche Welle asked about the definition of such a question on Thursday, KMT MP Wu Tsung-hsien replied that this would be clarified once the law had been passed. The concern is that journalists and companies could also be forced to disclose secrets.

Civil society organizations and the DPP particularly criticize the speed and lack of transparency with which bills are rushed through parliament. They say there is not enough opportunity for MPs to read and debate the bills. The Taiwan Bar Association stated that the legislature’s failure to debate properly “not only undermines Taiwan’s democratic foundations, but also violates the fundamental principles of democratic constitutionalism and representative democracy.”

When the vote on the bills continued on Tuesday, one day after Lai took office, tens of thousands gathered outside parliament to express their anger at the opposition’s plans. “It’s not democracy without debate” and “I disrespect parliament” were just two of the protest slogans that could be heard repeatedly. However, KMT chairman Eric Chu warned the DPP against risking a “civil war” with their strategy. The vote will continue this Friday. Further protests have been announced.

  • Indo-Pacific
  • Taiwan
Translation missing.

Telecommunication: Why Germany could quickly abandon Huawei

The German government appears to be heading towards a decision on how to deal with Huawei components in German networks. German Chancellor Olaf Scholz, Transport and Network Minister Volker Wissing and Interior Minister Nancy Faeser discussed the next steps at the Chancellery on Thursday. Economy Minister Robert Habeck and Foreign Minister Annalena Baerbock were also present.

According to reports, Scholz and his ministers are now seeking a quick decision after the government and the public have been discussing the use of Chinese technology in critical networks for years, always using the same arguments. A decision could be made before the parliamentary summer recess, which starts at the beginning of July.

The Chancellor could intervene in the Huawei dispute

Faeser already decided in September to ban Huawei and ZTE from Germany’s networks. The three mobile network providers Deutsche Telekom, Vodafone and Telefónica have been instructed to remove critical Chinese components from their core networks by the end of 2025. The plan is to free the access network in Germany’s biggest cities, especially Berlin, from Chinese components by 2026.

But this is another point of contention between the German government parties. While Faeser would have preferred to have every component with the red logo removed, Wissing urged prudence. As minister, he is responsible for network quality. And that would suffer without using high-quality, low-cost Chinese technology. In December, there were already calls for the German Chancellor, who ultimately has the authority to issue directives, to intervene.

What the compromise could look like

A series of papers from the Ministry of the Interior have already outlined the key points of the Huawei phase-out. The aim is to remove Huawei from all parts of the network by 2029.

In practice, this means that already installed components can stay connected, but with the transition to 6G by the end of the decade, German operators will do without Huawei and place their orders with Nokia and Ericsson in the EU. With the change in the technical generation, the use of Chinese parts will come to an end.

The advantage of this solution is that it would not require the exclusion of Huawei. The Chinese ambassador Wu Ken had already threatened in 2019: “If Germany were to take a decision that leads to Huawei’s exclusion from the German market, you could expect consequences.” In other words, the handling of Huawei falls within the context of global trade conflicts.

Huawei antennas will probably remain in place

The considerations are based on a distinction between the core network and the access network:

  • The radio access network are the antennas that can be seen on masts and roof ridges in public spaces and the network computers directly behind them. Here, too, the software running on these devices is crucial.
  • The core network in the background connects the access networks with the internet, other mobile networks, or the fixed network in data centers. It is considered more security-relevant because customer data passes through the core network.

Germany’s telecommunications providers have already largely removed Huawei components from the core network. Telekom now hopes to be able to keep the Huawei equipment in the access network. “The question is: Is an antenna a critical element, yes or no? We can argue that it is not considered a critical element under German law,” said Deutsche Telekom CEO Tim Hoettges last year, according to German broadcaster ZDF. That was the end of the matter for him.

Even after years of discussion, Huawei’s market share in the wireless network is higher in the German capital than in Beijing. This is according to calculations by the British management consultancy Strand Consult. In China, the private company Huawei shares the market with the state-owned company ZTE and international providers. In Germany, Huawei’s share is around 60 percent.

What China can do with Huawei parts in the German network

Immediately removing all existing Huawei parts, as various parties have called for, would be very expensive, slow down the networks and delay their expansion. Such costly interventions in the economy can only be justified by high risks.

There is often vague mention of “Chinese influence” on German networks. Security experts warn of three scenarios in particular. As a supplier of components, Huawei has the following capabilities (in decreasing likelihood):

  • Refusal to provide updates. Network computers need regular updates, just like mobile phones or PCs.
  • Network sabotage through hidden functions in updates. Although the German provider Telekom installs the updates itself, it can hardly examine each update’s code.
  • The total shutdown of large parts of the network, known as kill switch. However, no trace of such a function has ever been found.

What is considered unlikely:

  • Accessing telephone data.
  • Monitoring emails and messages or tapping phone calls by the hardware supplier.
  • Forging messages or otherwise planting information.

Consensus: pushing Huawei back – but how quickly?

All fears are founded on the scenario of deteriorating relations with China, culminating in a conflict, in which China would react hostile. Even if the risks remain vague, there is still a general unease about buying technology for modern networks from a rival power given this possibility.

The 5G network and its successors are not just used to transmit websites, WhatsApp messages, video game data, or videos. In the age of the Internet of Things, they will become more like the air we breathe. Autonomous cars exchange information about the traffic situation in milliseconds, doctors read data in pacemakers and insulin pumps in real time, and factories use 5G to coordinate robots.

Anyone who hands over the development of this nervous system of modern technology generally makes themselves vulnerable. This concerns not just random electronics, but critical infrastructure such as electricity, water or airports.

Everything points to orders from Sweden and Finland

This is why there is also a strong industrial policy case for abandoning Huawei. Europe must have the ability to lay and update these networks itself. Contracting Nokia from Finland and Ericsson from Sweden will help boost domestic providers and keep them up to date.

China is doing the same. Suppliers such as Siemens once helped China develop its first wireless networks. However, China deemed it unacceptable to be dependent on foreign countries for such important technology and supported ZTE and Huawei in their growth – including with subsidies. Experts believe that the Chinese state has considerable influence over both companies.

Meanwhile, the German mobile network operator 1&1 is taking a different approach. Together with a Japanese partner, it relies on Open RAN, a manufacturer-independent standard considered more transparent.

  • Mobilfunk
Translation missing.

Events

May 28, 2024; 10 p.m. CEST (May 29, 4 a.m. Beijing time)
Center for Strategic & International Studies, A Conversation with David Sanger (Hybrid): China’s Rise, Russia’s Invasion, and America’s Struggle to Defend the West More

May 30, 2024; 3:30 p.m. CEST (9:30 p.m. Beijing time)
Center for Strategic & International Studies, Capital Cable #95: The Axis of Upheaval More

May 31, 2024; 9:00 a.m. CEST (3 p.m. Beijing time)
stars – for Leaders of the Next Generation, Webinar: Orientation in times of no direction More

May 31, 2024; 7 p.m. Beijing time
German Chamber of Commerce in China, Stammtisch (in Shenzhen): May festival! More

September 22-27 2024
EUSME Center, market exploration trip (Shanghai, Suzhou, Chengdu): Business Mission to China: Green Industries More

News

Trilateral summit: What China will discuss with Korea and Japan

The heads of government of South Korea, China, and Japan have agreed to hold their first trilateral talks in four years next week. According to the South Korean presidential office, the trilateral summit between South Korean President Yoon Suk Yeol, Chinese Premier Li Qiang and Japanese Prime Minister Fumio Kishida will be held in Seoul on Monday. Prior to this, bilateral meetings will be held on Sunday.

Since their first independent trilateral summit in 2008, the three Asian countries had planned to hold such a meeting every year. However, none have been held since December 2019. The reasons include the strategic rivalry between China and the United States, but also historical disputes over Japan’s colonial rule in Korea and its war against China until 1945. Another problem is North Korea, whose growing arsenal of nuclear-capable missiles threatens the security of South Korea and Japan.

North Korea’s last major ally, China, on the other hand, is suspected of not fully enforcing the UN sanctions against the country and of providing covert aid in order to keep North Korea as a bulwark against US influence on the Korean peninsula. ari

  • Geopolitik

Trade dispute: Why Boeing may be caught in the crossfire

The delivery of Boeing aircraft to China has been delayed in recent weeks. As Reuters reported, citing an insider, the reason is an inspection of the batteries for the voice recorder by the Chinese supervisory authorities. It is unclear how long the inspection will last and to what extent it will affect the delivery goals of the American Airbus rival.

Boeing only resumed deliveries of the 737 MAX 8 aircraft to a Chinese airline in January. Two accidents in 2018 and 2019, which claimed the lives of 346 people, resulted in the MAX 8 being grounded. According to official information, Boeing handed over 22 aircraft to China by the end of April, after which no more were delivered.

According to a report submitted by Boeing at the end of 2023, the company has around 85 aircraft of the type in stock for customers in China. Boeing Chief Financial Officer Brian West told investors last month the planemaker still expected “to deliver most of these inventoried airplanes by year-end.”

The delivery delays could be a sign that Boeing has been caught in the crossfire of the US-China trade dispute. On Wednesday, the US Department of Commerce announced new, higher tariffs on Chinese goods. Earlier, the Chinese Ministry of Commerce had imposed an import and export ban on several US companies, as well as a ban on new investments in China, Reuters reported, citing state media. The list also includes the aircraft manufacturer’s military aerospace division. rtr

  • Handelsstreit

Photovoltaics: Why a nuclear company builds the world’s largest floating solar farm

Construction of the world’s largest offshore solar power plant has begun on tidal flats off the coast of Jiangsu province. The plant, with 3.3 million solar modules and a capacity of two gigawatts (GW), is set to go online next year and operate for 25 years, according to the official news agency Xinhua. The developer of the project not far from the port city of Lianyungang is the state-owned energy company China National Nuclear Corp (CNNC), which also operates nuclear power plants.

The floating solar power plant will cost the equivalent of almost 1.3 billion euros and, according to the business magazine Caixin, will be integrated with the nearby Tianwan nuclear power plant. Together, they are expected to generate ten gigawatts of power and serve as an example of a “green power supply.” China considers nuclear power a green energy source.

Unlike offshore wind farms, marine solar power plants are still relatively new. Floating solar plants are mostly located on lakes. According to Caixin, China’s coastal provinces from Fujian to Shandong have already built some solar farms on the sea in recent years. However, these projects are relatively small in scale.

This is set to change: The development plan of Jiangsu Province envisages connecting a total of five GW of offshore photovoltaic capacity by 2025 and ten GW by 2027. The province has planned 43 projects in three suitable cities: Nantong and Lianyungang (eleven projects each), as well as Yancheng (21). Nantong is located on the Yangtze River, while the coast in front of the other two cities is flat and characterized by tidal flats. ck

  • Energiewende
  • Energy transition
  • Photovoltaics
  • Solar

Tesla: Why the carmaker doesn’t want parts from China

Nikkei Asia reports that Tesla has asked suppliers to manufacture components and parts outside of China and Taiwan starting next year. Tesla issued the request to suppliers who manufacture printed circuit boards, displays, and electronic control units for use in Tesla models sold outside China, among other things.

The information comes from six managers responsible for the supply chain of their respective companies. They are based in Taiwan, Japan and South Korea, among other countries. They claim Tesla cited the geopolitical risks in the Greater China region in the run-up to the US presidential election and the aim of establishing an alternative supply chain for markets outside China.

“We serve several American automobile makers, and Tesla is the most aggressive in terms of trying to avoid the risks surrounding China and Taiwan,” an electronics supplier executive said. “It’s really hard and costly to do out of China and out of Taiwan, as that is where the mature supply chain is.”

According to the Nikkei report, other US car manufacturers like General Motors and Ford have also asked their suppliers to consider ways of moving their electronics production out of China and Taiwan. However, unlike Tesla, they have not formally requested this. jul

.

  • Handelspolitik

Column

How China is trying to ensnare Europe

China’s official media, which always faithfully reflect the government’s intentions, have this year shown obvious attempts to paint Sino-European relations in rosy hues. A steady flow of positive news and upbeat comments about bilateral relations have been appearing in the People’s Daily, the Communist Party’s flagship mouthpiece, culminating in its coverage of Xi Jinping’s visit to France, Serbia, and Hungary earlier this month. 

After lavishly reporting on the visits along the way, on May 13, a Monday and one day after Xi was back in Beijing, the paper published two lengthy features on the visits, occupying almost the entire cover page and jumping to pages three and four.

It is the paper’s tradition to run a feature at the conclusion of its party boss’s foreign trips, detailing the visits’ significance and what would always be described as the hosts’ high respect and unparalleled hospitality never shown to other foreign guests. 

Carrot and stick for Europe

These features are always in the typical communist odic style. But the wording for the visit to France was even more effusive this time. It lauded the visit as “Another Sino-Franco encounter in the long river of the history”; it called France a “special friend,” the Sino-Franco ties a “special relationship”; it called on China and France to be “sincere friends and win-win partners.”

The elephant in the room for Xi’s whole European trip was, of course, the United States. One of the key messages Xi delivered for France and Europe, also highlighted in the People’s Daily article, was France and Europe should be “independent.”

But as powerful as it is now, China would also look for ways to increase its bargaining power with the EU and prepare for unpleasant scenarios. For that purpose, Xi’s picking of the other two stops was to consolidate China’s relations with Serbia as an anti-NATO EU applicant and Hungary as a mutinous member of both the EU and NATO.  

Hype about cargo trains between China and Europe

The People’s Daily usually puts presidential visits to different countries on the same trip into one concluding feature piece. But this time, it has one for France and the EU and one for Serbia and Hungary.

However, with US-China trade relations spiraling down by the day, China’s eagerness to save the fate of its trade with the EU is unmistakable. Despite China’s sliding exports to Europe and the EU’s increasingly louder accusation about China’s industrial subsidies, China’s official media outlets have this year presented a picture that would make readers think China’s exports to Europe had been thriving. The main evidence they gave has been the growth of cargo transported by the China-European freight trains.

The train hype started in 2023 and has become more evident this year. The People’s Daily has been publishing dry statistics about the number of trains, the volume of goods transported to Europe, and their respective growth rate every month. The latest update, on May 14, even made it to page one. Stories about how different places in China used the trains to boost exports mushroomed across national and local government newspapers. 

Beijing emphasizes the stability of supply chains

During the past month, official media also reported that both Xi and Premier Li Qiang visited sites related to China-European trains in Chongqing and Xinjiang, respectively. A video report by the official Xinhua News Agency quoted Xi as saying that the trains “has forcefully ensured stability of international logistics chains and supply chains while setting up a new platform for trade and economic co-operation along the routes.”  

The China-European trains, inaugurated in 2011, are a strategic instrument for China-EU trade and the One Belt One Road Initiative. The shortest route between China and Europe runs through Xinjiang, Kazakhstan, Russia, Belarus, Poland, and then to other places in Europe. Duisburg is one of the key knots for the China-European train networks. China’s northeastern provinces and Inner Mongolia could also first use the tracks for the Trans-Siberian trains, which run through Mongolia and Siberia.  

  • Europa
  • Xinhua
Translation missing.

Executive Moves

Stefan Buecke has been Head of Country Component China and Advisor Sino-German Dialogue on Industrial Data Ecosystems at the German Development Cooperation (GIZ) since May. Buecke was previously Project Director – Sino-German Cooperation on E-Mobility, Automated & Connected Driving for two years. He will continue to be based in Beijing.

David Shi was promoted from General Manager to Managing Director China at Romaco in May. Shi has been working for the Karlsruhe-based manufacturer of processing and packaging machines for ten years. He is based in Shanghai.

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

Dessert

The 77th Cannes Film Festival comes to an end on Saturday. One conclusion can already be drawn: After pandemic-related breaks and accusations of censorship, Chinese film is back. Veteran star director Jia Zhangke (left) presented his romantic drama “Caught by the Tides,” which captures the changes in China over the past 25 years. Peter Chan’s “She’s Got No Name” tells the story of a murder case in 1940s Shanghai. The leading role is played by Zhang Ziyi. Other films from China and Hong Kong included Lou Yes’ “An Unfinished Film,” Soi Cheang’s “Twilight of the Warriors: Walled In” and Guan Hu’s “Black Dog.” The French-Chinese documentary “Kangxi and Louis XIV,” which deals with parallels between the two unequal rulers, was also screened on the fringes of the festival.

China.Table editorial team

CHINA.TABLE EDITORIAL OFFICE

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    Dear reader,

    The new Taiwanese government has been in office for less than a week and is already faced with several massive challenges: On Thursday, China announced a two-day military exercise around Taiwan’s main island and smaller offshore islands in what is seen as a reaction to new President Lai Ching-te’s inauguration speech. Lai’s inauguration was also overshadowed by conflicts in the opposition-controlled parliament. Further protests are planned there for Friday. David Demes summarizes the events.

    Meanwhile, Berlin continues to struggle with Huawei. Chancellor Olaf Scholz could have put his foot down a long time ago – but the meeting on Thursday that discussed the Chinese telecommunications supplier at the Chancellery failed to produce any results. Scholz is clearly in no hurry to enter into a trade conflict with China. Now he could create clarity before the parliamentary summer recess. How? With a compromise. The Huawei components already installed in the access network will stay in – until they are replaced anyway at the end of the decade with the switch to 6G. With European products from Ericsson and Nokia.

    Your
    Amelie Richter
    Image of Amelie  Richter

    Feature

    Exercises and threats: Why China reacts so severely to Lai

    A Taiwanese soldier observes the Chinese destroyer Shaoxing.

    The new Taiwanese government has not even been in office for a week and is already facing a range of massive challenges. On Thursday, China announced a two-day military exercise around the main island of Taiwan and smaller offshore islands in what is believed to be a reaction to the inauguration speech by the new president, Lai Ching-te. According to the official announcement, the so-called “Joint Sword 2024A” maneuver is aimed at punishing “separatist efforts” by Taiwanese independence forces and warning foreign countries against interfering in the Taiwan question.

    Taiwan ‘independence’ is doomed to failure,” said Foreign Ministry spokesman Wang Wenbin at a daily press conference. “Anyone seeking ‘Taiwan independence’ will find themselves crushed by the historic trend of China’s complete reunification.”

    The AFP news agency quoted Wang Wenbin differently in a report on Thursday morning. In it, Wang said that “Taiwan independence forces will be left with their heads broken and blood flowing” for attempting to fight China’s undertaking of “achieving complete unification.” The foreign ministry’s website was last updated this afternoon.

    Taiwan’s military reacts routinely

    China announced the exercises at 7:45 on Thursday morning and dispatched several warships and fighter jets to the waters and airspace around Taiwan throughout the day. According to state television CCTV, several dozen fighter aircraft armed with live ammunition circled Taiwan. “Under the support and cover of the Army and the Rocket Force, multiple types of aircraft […] coordinated with destroyers, frigates, and missile speedboats to simulate attacking the ‘enemy’s’ high-value military targets and reconnaissance and patrol aircraft,” the report said.

    Taiwan’s military responded to the announcements from Beijing with routine composure. Its Army, Air Force and Navy were monitoring the situation closely and were ready to react quickly to any sudden changes in the situation. “We seek no conflicts, but we will not shy away from one,” is the official line.

    In the afternoon, Taiwan’s Ministry of Defense and the Coast Guard released several videos showing Taiwanese units monitoring Chinese combat vessels and keeping them at a distance. The Ministry of Defense reported that no ships or aircraft had entered the so-called contiguous zone of the main island (24 nautical miles off the coast) by the evening. However, Chinese coastguard vessels were reported to have entered restricted waters up to 2.8 and 3.1 nautical miles off the islands of Wuqiu and Dongyin, which are closer to the Chinese mainland than to Taiwan.

    China practices breaking through the ‘three lines’

    The main difference between the last “Joint Sword” maneuver in 2023 and the large-scale exercises after Nancy Pelosi’s visit in August last year appears to be the proximity of the declared exercise zones to the eastern Taiwanese coastal city of Hualien. It is not only home to an important port, but also the Chiashan Air Force Base, which plays an important role in the event of war.

    According to Zhang Chi, a lecturer at the National Defence University of the People’s Liberation Army, the exercises in the eastern part of Taiwan are aimed at practicing the breaching of the “three lines”: the “lifeline of energy imports,” the “escape route of Taiwanese independence forces” that might try to flee across the sea, and the “supply line of the United States and its allies providing aid to Taiwanese independence forces,” political scientist Zhang told CCTV.

    Designation hints at further exercises

    The spokesperson for the Taiwanese presidential office, Kuo Ya-hui, called the Chinese exercises “regrettable.” China was “using unilateral military provocations to threaten Taiwan’s democracy and freedom,” Kuo said in a video statement. She stressed that maintaining peace and stability in the region should be the shared responsibility and common goal of both sides of the Taiwan Strait.

    Military analyst Ben Lewis noted on Twitter/X that the designation “Joint Sword 2024A” could indicate the start of a series of exercises (B, C, D, etc.). However, the Taiwanese Ministry of Defense did not want to confirm this assumption in the evening.

    Domestic policy: scuffles over proposed legislation

    However, Beijing’s threats are not the only headache for Taiwan’s new government. It also faces considerable challenges from the domestic opposition. On May 17, violent disputes broke out in parliament when the opposition Kuomintang (KMT), which controls the legislature with the support of the Taiwan People’s Party (TPP), wanted to push through a bill to expand the power of parliament and restrict that of the executive.

    DPP deputies, who have been in the minority since the January elections, tried to prevent the vote by occupying the lectern. In the ensuing scuffle, four DPP MPs and one KMT MP sustained injuries so severe that they required medical assistance. The images of the fighting in parliament and the dramatic fall of an MP caused a nationwide uproar, with several hundred protesters quickly gathering in front of parliament on the same evening.

    Parliamentary reform could weaken democracy

    The so-called “parliamentary reform” aims to grant the legislature more investigative rights, which are currently mainly the responsibility of the justice system and the control yuan, which is unique in Taiwan’s political system. In addition, the plan is to oblige the president to regularly answer questions in parliament. Another point of contention is the planned punishment for “contempt of parliament.” For example, a minister asking a question in return when questioned by MPs could already be interpreted as contempt. When German broadcaster Deutsche Welle asked about the definition of such a question on Thursday, KMT MP Wu Tsung-hsien replied that this would be clarified once the law had been passed. The concern is that journalists and companies could also be forced to disclose secrets.

    Civil society organizations and the DPP particularly criticize the speed and lack of transparency with which bills are rushed through parliament. They say there is not enough opportunity for MPs to read and debate the bills. The Taiwan Bar Association stated that the legislature’s failure to debate properly “not only undermines Taiwan’s democratic foundations, but also violates the fundamental principles of democratic constitutionalism and representative democracy.”

    When the vote on the bills continued on Tuesday, one day after Lai took office, tens of thousands gathered outside parliament to express their anger at the opposition’s plans. “It’s not democracy without debate” and “I disrespect parliament” were just two of the protest slogans that could be heard repeatedly. However, KMT chairman Eric Chu warned the DPP against risking a “civil war” with their strategy. The vote will continue this Friday. Further protests have been announced.

    • Indo-Pacific
    • Taiwan
    Translation missing.

    Telecommunication: Why Germany could quickly abandon Huawei

    The German government appears to be heading towards a decision on how to deal with Huawei components in German networks. German Chancellor Olaf Scholz, Transport and Network Minister Volker Wissing and Interior Minister Nancy Faeser discussed the next steps at the Chancellery on Thursday. Economy Minister Robert Habeck and Foreign Minister Annalena Baerbock were also present.

    According to reports, Scholz and his ministers are now seeking a quick decision after the government and the public have been discussing the use of Chinese technology in critical networks for years, always using the same arguments. A decision could be made before the parliamentary summer recess, which starts at the beginning of July.

    The Chancellor could intervene in the Huawei dispute

    Faeser already decided in September to ban Huawei and ZTE from Germany’s networks. The three mobile network providers Deutsche Telekom, Vodafone and Telefónica have been instructed to remove critical Chinese components from their core networks by the end of 2025. The plan is to free the access network in Germany’s biggest cities, especially Berlin, from Chinese components by 2026.

    But this is another point of contention between the German government parties. While Faeser would have preferred to have every component with the red logo removed, Wissing urged prudence. As minister, he is responsible for network quality. And that would suffer without using high-quality, low-cost Chinese technology. In December, there were already calls for the German Chancellor, who ultimately has the authority to issue directives, to intervene.

    What the compromise could look like

    A series of papers from the Ministry of the Interior have already outlined the key points of the Huawei phase-out. The aim is to remove Huawei from all parts of the network by 2029.

    In practice, this means that already installed components can stay connected, but with the transition to 6G by the end of the decade, German operators will do without Huawei and place their orders with Nokia and Ericsson in the EU. With the change in the technical generation, the use of Chinese parts will come to an end.

    The advantage of this solution is that it would not require the exclusion of Huawei. The Chinese ambassador Wu Ken had already threatened in 2019: “If Germany were to take a decision that leads to Huawei’s exclusion from the German market, you could expect consequences.” In other words, the handling of Huawei falls within the context of global trade conflicts.

    Huawei antennas will probably remain in place

    The considerations are based on a distinction between the core network and the access network:

    • The radio access network are the antennas that can be seen on masts and roof ridges in public spaces and the network computers directly behind them. Here, too, the software running on these devices is crucial.
    • The core network in the background connects the access networks with the internet, other mobile networks, or the fixed network in data centers. It is considered more security-relevant because customer data passes through the core network.

    Germany’s telecommunications providers have already largely removed Huawei components from the core network. Telekom now hopes to be able to keep the Huawei equipment in the access network. “The question is: Is an antenna a critical element, yes or no? We can argue that it is not considered a critical element under German law,” said Deutsche Telekom CEO Tim Hoettges last year, according to German broadcaster ZDF. That was the end of the matter for him.

    Even after years of discussion, Huawei’s market share in the wireless network is higher in the German capital than in Beijing. This is according to calculations by the British management consultancy Strand Consult. In China, the private company Huawei shares the market with the state-owned company ZTE and international providers. In Germany, Huawei’s share is around 60 percent.

    What China can do with Huawei parts in the German network

    Immediately removing all existing Huawei parts, as various parties have called for, would be very expensive, slow down the networks and delay their expansion. Such costly interventions in the economy can only be justified by high risks.

    There is often vague mention of “Chinese influence” on German networks. Security experts warn of three scenarios in particular. As a supplier of components, Huawei has the following capabilities (in decreasing likelihood):

    • Refusal to provide updates. Network computers need regular updates, just like mobile phones or PCs.
    • Network sabotage through hidden functions in updates. Although the German provider Telekom installs the updates itself, it can hardly examine each update’s code.
    • The total shutdown of large parts of the network, known as kill switch. However, no trace of such a function has ever been found.

    What is considered unlikely:

    • Accessing telephone data.
    • Monitoring emails and messages or tapping phone calls by the hardware supplier.
    • Forging messages or otherwise planting information.

    Consensus: pushing Huawei back – but how quickly?

    All fears are founded on the scenario of deteriorating relations with China, culminating in a conflict, in which China would react hostile. Even if the risks remain vague, there is still a general unease about buying technology for modern networks from a rival power given this possibility.

    The 5G network and its successors are not just used to transmit websites, WhatsApp messages, video game data, or videos. In the age of the Internet of Things, they will become more like the air we breathe. Autonomous cars exchange information about the traffic situation in milliseconds, doctors read data in pacemakers and insulin pumps in real time, and factories use 5G to coordinate robots.

    Anyone who hands over the development of this nervous system of modern technology generally makes themselves vulnerable. This concerns not just random electronics, but critical infrastructure such as electricity, water or airports.

    Everything points to orders from Sweden and Finland

    This is why there is also a strong industrial policy case for abandoning Huawei. Europe must have the ability to lay and update these networks itself. Contracting Nokia from Finland and Ericsson from Sweden will help boost domestic providers and keep them up to date.

    China is doing the same. Suppliers such as Siemens once helped China develop its first wireless networks. However, China deemed it unacceptable to be dependent on foreign countries for such important technology and supported ZTE and Huawei in their growth – including with subsidies. Experts believe that the Chinese state has considerable influence over both companies.

    Meanwhile, the German mobile network operator 1&1 is taking a different approach. Together with a Japanese partner, it relies on Open RAN, a manufacturer-independent standard considered more transparent.

    • Mobilfunk
    Translation missing.

    Events

    May 28, 2024; 10 p.m. CEST (May 29, 4 a.m. Beijing time)
    Center for Strategic & International Studies, A Conversation with David Sanger (Hybrid): China’s Rise, Russia’s Invasion, and America’s Struggle to Defend the West More

    May 30, 2024; 3:30 p.m. CEST (9:30 p.m. Beijing time)
    Center for Strategic & International Studies, Capital Cable #95: The Axis of Upheaval More

    May 31, 2024; 9:00 a.m. CEST (3 p.m. Beijing time)
    stars – for Leaders of the Next Generation, Webinar: Orientation in times of no direction More

    May 31, 2024; 7 p.m. Beijing time
    German Chamber of Commerce in China, Stammtisch (in Shenzhen): May festival! More

    September 22-27 2024
    EUSME Center, market exploration trip (Shanghai, Suzhou, Chengdu): Business Mission to China: Green Industries More

    News

    Trilateral summit: What China will discuss with Korea and Japan

    The heads of government of South Korea, China, and Japan have agreed to hold their first trilateral talks in four years next week. According to the South Korean presidential office, the trilateral summit between South Korean President Yoon Suk Yeol, Chinese Premier Li Qiang and Japanese Prime Minister Fumio Kishida will be held in Seoul on Monday. Prior to this, bilateral meetings will be held on Sunday.

    Since their first independent trilateral summit in 2008, the three Asian countries had planned to hold such a meeting every year. However, none have been held since December 2019. The reasons include the strategic rivalry between China and the United States, but also historical disputes over Japan’s colonial rule in Korea and its war against China until 1945. Another problem is North Korea, whose growing arsenal of nuclear-capable missiles threatens the security of South Korea and Japan.

    North Korea’s last major ally, China, on the other hand, is suspected of not fully enforcing the UN sanctions against the country and of providing covert aid in order to keep North Korea as a bulwark against US influence on the Korean peninsula. ari

    • Geopolitik

    Trade dispute: Why Boeing may be caught in the crossfire

    The delivery of Boeing aircraft to China has been delayed in recent weeks. As Reuters reported, citing an insider, the reason is an inspection of the batteries for the voice recorder by the Chinese supervisory authorities. It is unclear how long the inspection will last and to what extent it will affect the delivery goals of the American Airbus rival.

    Boeing only resumed deliveries of the 737 MAX 8 aircraft to a Chinese airline in January. Two accidents in 2018 and 2019, which claimed the lives of 346 people, resulted in the MAX 8 being grounded. According to official information, Boeing handed over 22 aircraft to China by the end of April, after which no more were delivered.

    According to a report submitted by Boeing at the end of 2023, the company has around 85 aircraft of the type in stock for customers in China. Boeing Chief Financial Officer Brian West told investors last month the planemaker still expected “to deliver most of these inventoried airplanes by year-end.”

    The delivery delays could be a sign that Boeing has been caught in the crossfire of the US-China trade dispute. On Wednesday, the US Department of Commerce announced new, higher tariffs on Chinese goods. Earlier, the Chinese Ministry of Commerce had imposed an import and export ban on several US companies, as well as a ban on new investments in China, Reuters reported, citing state media. The list also includes the aircraft manufacturer’s military aerospace division. rtr

    • Handelsstreit

    Photovoltaics: Why a nuclear company builds the world’s largest floating solar farm

    Construction of the world’s largest offshore solar power plant has begun on tidal flats off the coast of Jiangsu province. The plant, with 3.3 million solar modules and a capacity of two gigawatts (GW), is set to go online next year and operate for 25 years, according to the official news agency Xinhua. The developer of the project not far from the port city of Lianyungang is the state-owned energy company China National Nuclear Corp (CNNC), which also operates nuclear power plants.

    The floating solar power plant will cost the equivalent of almost 1.3 billion euros and, according to the business magazine Caixin, will be integrated with the nearby Tianwan nuclear power plant. Together, they are expected to generate ten gigawatts of power and serve as an example of a “green power supply.” China considers nuclear power a green energy source.

    Unlike offshore wind farms, marine solar power plants are still relatively new. Floating solar plants are mostly located on lakes. According to Caixin, China’s coastal provinces from Fujian to Shandong have already built some solar farms on the sea in recent years. However, these projects are relatively small in scale.

    This is set to change: The development plan of Jiangsu Province envisages connecting a total of five GW of offshore photovoltaic capacity by 2025 and ten GW by 2027. The province has planned 43 projects in three suitable cities: Nantong and Lianyungang (eleven projects each), as well as Yancheng (21). Nantong is located on the Yangtze River, while the coast in front of the other two cities is flat and characterized by tidal flats. ck

    • Energiewende
    • Energy transition
    • Photovoltaics
    • Solar

    Tesla: Why the carmaker doesn’t want parts from China

    Nikkei Asia reports that Tesla has asked suppliers to manufacture components and parts outside of China and Taiwan starting next year. Tesla issued the request to suppliers who manufacture printed circuit boards, displays, and electronic control units for use in Tesla models sold outside China, among other things.

    The information comes from six managers responsible for the supply chain of their respective companies. They are based in Taiwan, Japan and South Korea, among other countries. They claim Tesla cited the geopolitical risks in the Greater China region in the run-up to the US presidential election and the aim of establishing an alternative supply chain for markets outside China.

    “We serve several American automobile makers, and Tesla is the most aggressive in terms of trying to avoid the risks surrounding China and Taiwan,” an electronics supplier executive said. “It’s really hard and costly to do out of China and out of Taiwan, as that is where the mature supply chain is.”

    According to the Nikkei report, other US car manufacturers like General Motors and Ford have also asked their suppliers to consider ways of moving their electronics production out of China and Taiwan. However, unlike Tesla, they have not formally requested this. jul

    .

    • Handelspolitik

    Column

    How China is trying to ensnare Europe

    China’s official media, which always faithfully reflect the government’s intentions, have this year shown obvious attempts to paint Sino-European relations in rosy hues. A steady flow of positive news and upbeat comments about bilateral relations have been appearing in the People’s Daily, the Communist Party’s flagship mouthpiece, culminating in its coverage of Xi Jinping’s visit to France, Serbia, and Hungary earlier this month. 

    After lavishly reporting on the visits along the way, on May 13, a Monday and one day after Xi was back in Beijing, the paper published two lengthy features on the visits, occupying almost the entire cover page and jumping to pages three and four.

    It is the paper’s tradition to run a feature at the conclusion of its party boss’s foreign trips, detailing the visits’ significance and what would always be described as the hosts’ high respect and unparalleled hospitality never shown to other foreign guests. 

    Carrot and stick for Europe

    These features are always in the typical communist odic style. But the wording for the visit to France was even more effusive this time. It lauded the visit as “Another Sino-Franco encounter in the long river of the history”; it called France a “special friend,” the Sino-Franco ties a “special relationship”; it called on China and France to be “sincere friends and win-win partners.”

    The elephant in the room for Xi’s whole European trip was, of course, the United States. One of the key messages Xi delivered for France and Europe, also highlighted in the People’s Daily article, was France and Europe should be “independent.”

    But as powerful as it is now, China would also look for ways to increase its bargaining power with the EU and prepare for unpleasant scenarios. For that purpose, Xi’s picking of the other two stops was to consolidate China’s relations with Serbia as an anti-NATO EU applicant and Hungary as a mutinous member of both the EU and NATO.  

    Hype about cargo trains between China and Europe

    The People’s Daily usually puts presidential visits to different countries on the same trip into one concluding feature piece. But this time, it has one for France and the EU and one for Serbia and Hungary.

    However, with US-China trade relations spiraling down by the day, China’s eagerness to save the fate of its trade with the EU is unmistakable. Despite China’s sliding exports to Europe and the EU’s increasingly louder accusation about China’s industrial subsidies, China’s official media outlets have this year presented a picture that would make readers think China’s exports to Europe had been thriving. The main evidence they gave has been the growth of cargo transported by the China-European freight trains.

    The train hype started in 2023 and has become more evident this year. The People’s Daily has been publishing dry statistics about the number of trains, the volume of goods transported to Europe, and their respective growth rate every month. The latest update, on May 14, even made it to page one. Stories about how different places in China used the trains to boost exports mushroomed across national and local government newspapers. 

    Beijing emphasizes the stability of supply chains

    During the past month, official media also reported that both Xi and Premier Li Qiang visited sites related to China-European trains in Chongqing and Xinjiang, respectively. A video report by the official Xinhua News Agency quoted Xi as saying that the trains “has forcefully ensured stability of international logistics chains and supply chains while setting up a new platform for trade and economic co-operation along the routes.”  

    The China-European trains, inaugurated in 2011, are a strategic instrument for China-EU trade and the One Belt One Road Initiative. The shortest route between China and Europe runs through Xinjiang, Kazakhstan, Russia, Belarus, Poland, and then to other places in Europe. Duisburg is one of the key knots for the China-European train networks. China’s northeastern provinces and Inner Mongolia could also first use the tracks for the Trans-Siberian trains, which run through Mongolia and Siberia.  

    • Europa
    • Xinhua
    Translation missing.

    Executive Moves

    Stefan Buecke has been Head of Country Component China and Advisor Sino-German Dialogue on Industrial Data Ecosystems at the German Development Cooperation (GIZ) since May. Buecke was previously Project Director – Sino-German Cooperation on E-Mobility, Automated & Connected Driving for two years. He will continue to be based in Beijing.

    David Shi was promoted from General Manager to Managing Director China at Romaco in May. Shi has been working for the Karlsruhe-based manufacturer of processing and packaging machines for ten years. He is based in Shanghai.

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

    Dessert

    The 77th Cannes Film Festival comes to an end on Saturday. One conclusion can already be drawn: After pandemic-related breaks and accusations of censorship, Chinese film is back. Veteran star director Jia Zhangke (left) presented his romantic drama “Caught by the Tides,” which captures the changes in China over the past 25 years. Peter Chan’s “She’s Got No Name” tells the story of a murder case in 1940s Shanghai. The leading role is played by Zhang Ziyi. Other films from China and Hong Kong included Lou Yes’ “An Unfinished Film,” Soi Cheang’s “Twilight of the Warriors: Walled In” and Guan Hu’s “Black Dog.” The French-Chinese documentary “Kangxi and Louis XIV,” which deals with parallels between the two unequal rulers, was also screened on the fringes of the festival.

    China.Table editorial team

    CHINA.TABLE EDITORIAL OFFICE

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