Trade relations between China and the EU are now at a “crossroads” – at a meeting with car manufacturers in Brussels on Wednesday, Trade Minister Wang Wentao made no secret of what he thinks of Europe’s measures to protect its car industry. Wang came to Europe after the European Commission rejected the price commitments of the Chinese car manufacturers involved in the tariff dispute.
The pithy words were followed by a meeting with EU Trade Commissioner Valdis Dombrovskis. However, the successes achieved in the negotiations were limited. János Allenbach-Ammann from Europe.Table and Amelie Richter analyze what was discussed in Brussels and what progress was made. One thing I can tell you already: The debate will occupy us for some time to come.
Meanwhile, China’s Central Bank is concerned about the persistently low yields on Chinese government bonds, which are at an all-time low. This means that new government debt can be raised at lower rates. However, there is also a risk of a bubble developing that could jeopardize financial stability.
This is why Beijing has ordered extensive stress tests for banks to prove they can withstand large falls in bond prices. Signs of economic recovery could cause a lot of money to flow out of the bond market, resulting in falling bond prices. The effect could be amplified if investors panic and begin to sell en masse. Joern Petring’s analysis describes how China’s Central Bank handles this situation.
Your Julia Fiedler
Feature
EV investigation: Which points are still being negotiated
EVs from China: Chinese manufacturers can now submit new price commitments, which the EU Commission will consider.
The debate surrounding the EU’s additional tariffs on Chinese EVs will continue in the coming weeks. There was no major breakthrough in the negotiations at a meeting between EU Trade Commissioner Valdis Dombrovskis and China’s Trade Minister Wang Wentao on Thursday. Dombrovskis emphasized that the EU’s investigation was based on facts and respected WTO law. However, the EU Commission expressed its willingness to take a closer look at the Chinese price commitment proposal despite the expiration of the deadline.
The Commission announced last week that it would no longer accept any new price commitments from the Chinese car manufacturers because the deadline at the end of August had passed. The car manufacturers had agreed in the commitments to set minimum sales prices for their electric vehicles. The aim is to reduce the price pressure on European manufacturers and thus avoid the proposed tariffs.
The Commission now applies an article of the anti-subsidy regulation to extend the deadline for Chinese car manufacturers. Chinese manufacturers can submit new price commitments, which the Commission will consider.
Strict deadline on October 30
However, the Commission will continue the investigation in accordance with its deadlines. And the clock is ticking: The investigation must be completed by October 30 at the latest. There has been a slight delay in coordination with the Member States. The vote in the Trade Defense Instruments Committee scheduled for next week has been postponed, as EU diplomats confirm to Table.Briefings – probably until the week after.
The EU Chamber of Commerce in China still hopes for a political solution: “We would like to see an outcome that continues to allow for a strong trade and investment relationship,” Adam Dunnett, Secretary General of the Chamber of Commerce, told Table.Briefings. EVs only make up a small part of overall trade between China and the EU. However, according to Dunnett, concerns are growing, and he can understand why the EU intervened so early. However, the whole situation is “unfortunate.” Dunnett hopes that there will be no domino effect on other industries.
Wang warns that trade relations are at a ‘crossroads’
The EU Competition Commissioner-designate Teresa Ribera stressed that avoiding a trade war is just as important as the development of the European car industry. “The main message … is that it is important to avoid a clash, a trade war,” Ribera told the Financial Times. “We need to identify the best tools for how we can develop the car industry in Europe but are also effective in terms of avoiding this trade war,” she said. “This is something that is already being assessed by the Commission Services and the trade people.”
At a meeting with Chinese and European car manufacturers in Brussels on Wednesday evening, Trade Minister Wang said that trade relations between China and the EU are now at a “crossroads,” with “one path leading to openness and collaboration [and] the other to protectionism and isolation,” as the Chinese Chamber of Commerce with the EU stated.
Declining EV sales
Experts voiced concerns that the additional tariffs could affect the EU’s CO2 target. This trend is also reflected in car sales data, which shows a decline in sales of all-electric cars of almost 44 percent in August. The largest EV markets, Germany and France, recorded declines of 68.8 percent and 33.1 percent, respectively, which is also linked to reduced EV purchase subsidies.
Europe’s three largest car manufacturers, Volkswagen, Stellantis, and Renault, recorded total sales declines of 14.8 percent, 29.5 percent, and 13.9 percent, respectively. Tesla and SAIC were not spared either: Their European sales fell by 43.2 percent and 27.5 percent, respectively. How the additional tariffs could affect consumers is up to the manufacturers. For instance, Tesla has already increased the prices of its Model 3 vehicles in Europe. Geely’s Lynk & Co. brand announced it would not raise prices.
Car Industry
EU-Handelskammer
Trade
Zölle
Financial stress test: Why Beijing is worried about the bond market
Fearing a mass bond sell-off, China’s Central Bank is investing large sums in government bonds itself.
Yields on Chinese government bonds have been at rock bottom for months. Beijing is anything but happy about this, even though low yields mean that new government debt can be raised at lower cost. However, the government fears the current situation could lead to a bubble jeopardizing financial stability.
In January 2023, yields on ten-year bonds were still at around three percent; most recently, they were trading at just 2.13 percent – a historically low level. Yields on 20- and 30-year bonds are also at all-time lows.
The situation is linked to the dire economic situation: With the property market at rock bottom, people are no longer taking out loans to buy homes. Companies are also reluctant to borrow money. Large banks have therefore been pumping their capital into the bond market. Chinese government bonds are traded at ever-higher prices, causing yields to fall. Investors hope to make a quick buck by betting on further rising bond prices, further fuelling the rally.
Central Bank prescribes stress tests
Beijing is so concerned that it has ordered extensive stress tests for banks. According to Bloomberg, the Chinese state newspaper Financial News reported on its front page in late August that banks must ensure they “can handle any market volatility.” The stress tests aim to ensure financial institutions can cope with market fluctuations if the current bond rally reverses.
Such a reversal could occur, for instance, when signs of an economic recovery start to occur – namely when money starts to flow out of the bond market. Rising yields cause bond prices to fall, which could panic investors, especially large holders. This could trigger a mass sell-off, with investors trying to get rid of their bonds before prices fall further.
The Central Bank is apparently preparing for such a scenario by buying bonds. In late August, it purchased government bonds worth 400 billion RMB (50.7 billion euros) with long maturities. This included RMB 300 billion in ten-year bonds and RMB 100 billion in 15-year bonds. The purchase of these bonds gives the Central Bank the flexibility to sell them later and thus influence yields.
Reminiscent of the Silicon Valley Bank bust
In April, the Chinese central bank had already signaled its concern about the extent of financial institutions’ investments in long-term government bonds. “This is exactly what caused the liquidity crisis of … Silicon Valley Bank last year,” a central bank official told Financial News at the time. This statement caused a stir as the Chinese Central Bank drew a parallel with the major bank collapse in the United States.
The crisis at Silicon Valley Bank (SVB) began in March 2023, when the bank could not cover massive capital outflows due to a liquidity shortage and poor risk management. SVB had invested heavily in long-term US government bonds and mortgage-backed securities, which lost significant value due to rising interest rates. In an attempt to sell these assets, the bank suffered losses, further shaking customer confidence and leading to a bank run. Eventually, the SVB collapsed, forcing the US government to intervene and stabilize the banking system.
Banks
Economy
Financial market
Events
Sept. 24, 2024; 2:30 p.m CEST (8:30 p.m. Beijing time) Fairbank Center for Chinese Studies, Webinar:Urban China Lecture Series featuring Huang Binling & Yuan ZhenyuMore
Sept. 24, 2024; 8:30 p.m Beijing time Roedl Partner / JP Contagi, Thriving in China ROADSHOW (in Shanghai):Risks and Opportunities for Foreign Businesses in Greater ChinaMore
Sept. 26, 2024; 2:30 p.m. CEST Chinaforum Bayern / THITEC Innovation & Incubation GmbH, location presentation:16th Taicang Day in GermanyMore
Sept. 27, 2024; 5 p.m. CEST (11 p.m. Beijing time) Confucius Institute Frankfurt, Webinar:China’s Pension System in View of Contemporary Societal ChallengesMore
News
EU Parliament: Who sits on the China delegation
The European Parliament has announced the composition of its China delegation. It consists of 38 MEPs. The delegation chair will be elected in early October. The German European politician Engin Eroglu (FW), who was also a member of the delegation in the last parliamentary term, has the best prospects for the post. In addition to Eroglu, the last delegation included René Repasi, Monika Hohlmeier and Miriam Lexmann. New members from Germany include Martin Schirdewan, Michael Bloss and Sibylle Berg.
The delegation will likely not travel to the People’s Republic for the time being, as Lexmann is still sanctioned by the Chinese state. Beijing sanctioned several MEPs in March 2021 after the EU imposed punitive measures against several Xinjiang officials for human rights violations.
The list of the new China delegation by political group:
EPP: Tom Berendsen, Herbert Dorfmann, Monika Hohlmeier, Adam Jarubas, Kinga Kollár, Miriam Lexmann, Lídia Pereira, Oliver Schenk, Susana Solís Pérez, Dimitris Tsiodras
S&D: René Repasi, Sakis Arnaoutoglou, Johan Danielsson, Jonás Fernández, Matteo Ricci, Rosa Serrano Sierra
PfE: Angéline Furet, Vilis Krištopans, András László, Julien Sanchez, Alexandre Varaut
ECR: Tobiasz Bocheński, Jaak Madison, Lara Magoni, Georgiana Teodorescu
Renew: Engin Eroglu, Urmas Paet, Elena Yoncheva
Green: Michael Bloss, Markéta Gregorová, Benedetta Scuderi
Dispute over missile system on Luzon: Philippines and USA train together
Despite Beijing’s criticism, the United States intends to keep a mobile medium-range missile system in the Philippines for the time being. Reuters reported, citing anonymous insiders, that the military of both countries is currently testing whether the system could be used in a regional conflict. The missile system, called Typhon, is currently stationed on the island of Luzon in the north of the Philippines, facing the South China Sea and close to the Taiwan Strait.
This could lead to another conflict in the triangle between China, the Philippines, and its ally, the United States. The Philippines just had to withdraw its last ship from Sabina Reef, which is claimed by China and currently de facto controlled by dozens of ships.
Typhon was brought to the Philippines in April of this year for joint exercises, as both countries announced at the time. The system is capable of firing cruise missiles such as SM-6 missiles and Tomahawks with a range of more than 1600 kilometers and can theoretically also reach Chinese targets. At the time, the US Army described the transfer of the Typhon to Luzon as a “historic first” and a “significant step in our partnership with the Philippines.”
On Thursday, the Chinese Foreign Ministry stated that it was very concerned about plans to keep the system on Luzon. According to spokesman Lin Jian, the Typhon deployment “threatens national security in the region and aggravates geopolitical confrontation, which has aroused high vigilance and concern of countries in the region.” Meanwhile, the Philippines and the US remain tight-lipped about the system’s future on Luzon. Philippine officials emphasized that training is still ongoing. rtr/ck
Geopolitics
Philippines
USA
Audi plant in Brussels: NIO considers takeover
According to a Belgian media report, EV manufacturer NIO is considering purchasing the Audi plant in Vorst near Brussels. A NIO delegation has visited the plant in recent weeks, writes the business newspaper De Tijd. The company is reportedly working on an offer that must be submitted to the Volkswagen Group by next Monday. VW has decided to stop producing cars in Vorst once the last Q8 e-tron electric SUV rolled off its production line in 2025. The only way to prevent the factory’s closure and the loss of 2,900 jobs is to sell it. NIO declined to comment on the plans when asked by Table.Briefings.
In light of the threat of additional EU tariffs, several Chinese EV manufacturers are looking for European production opportunities. NIO is facing a special tariff of 20.8 percent on top of the regular import tariff of ten percent. The EU will make a final decision on the matter on 25 September. NIO sells some of its models in Norway, Germany, the Netherlands, Denmark and Sweden – but not yet in Belgium. Although sales figures have been low so far, NIO is still aiming for the European market.
Nio recently launched its new Onvo brand in China, which is aimed at a mid-range buyer group and is expected to generate high-volume sales. Its first model, the L60, is a mid-size SUV already touted as a Tesla Model Y killer in China. It is available for an entry-level price of the equivalent of 19,000 euros and comes with a rented battery. ck/jul
Batterien
Car Industry
Electromobility
Nio
China Perspective
Dream job or not: The advantages and disadvantages of being a civil servant
China’s government officials are generally competent and corrupt at the same time. They have the professional capabilities to do their job. But they would also embezzle and take bribes, sometimes in whopping amounts. For them, the top rule for survival is to tread the Party line.
n communist China, where the whole society is driven by politics and the authorities control all the important resources, the most powerful group has always been those in the government. So, the dream job for many bright students is to work in the government. In annual exams recruiting new civil servants, competition is throat-cutting fierce.
Big-name business people such as Jack Ma, founder of the IT giant Alibaba, briefly had some clout, but as it later turned out, the government could easily crush their influence.
A secure job with numerous benefits
In the most difficult days during China’s draconian Covid lockdowns, ordinary citizens struggled to get food and vegetables. However, supplies for government officials of all levels never had any problem. The Communist Party has always been smart enough to systematically provide benefits to those who work directly for it.
The nominal salaries of Chinese government officials are modest compared to what is earned by people in other walks of life. However, there are many hidden benefits for civil servants. They are:
Job security: The chance of being laid off is close to zero.
Subsidized housing: While others have to pay the savings of an entire family, a down payment for an apartment, and a big part of their monthly salary for mortgage repayments, government officials over certain levels get significantly subsidized housing. These apartments can’t be traded in the market, but the residents can live in them as long as they stay in the government.
Cheaper, better medical service: Under China’s public medical insurance system, everybody is supposed to pay a share of the expenses for the medical service one receives. This share can be as high as 30 percent. But for civil servants, this share is close to zero. And officials over certain levels – for example, bureau chiefs at the central government level and officials of comparable level in local hierarchies- get everything free – and with top quality. Most organs for transplant operations in China are reserved for high-ranking officials.
A better pension.
Corruption is hard to resist
Government officials control invaluable resources, from industrial policy to administrative approval of major projects and trademarks. It is just so easy to get bribed with the power in your hand, a former government official once told me. “Sometimes you are not really breaking the rules in a big way, you simply move a case a bit closer to the front and you will help the applicants save millions of yuan. And they would give you something because of this.” He said that even if you want to stay clean, it could be very difficult if your director phones and tells you to process something faster.
That was only a simple example. Many corrupted officials can be much more aggressive and creative. In some cases revealed by investigated journalists, state security officials, for instance, blackmailed enterprises for fabricated accusations.
Despite the much-publicized crackdowns after Xi Jinping took power, corruption is still rampant. Corrupted officials simply employ more sophisticated ways. When the officials’ honesty depends almost solely on internal supervision and inspection, corruption is doomed to be incurable cancer. Many, including the top Communist Party leaders, are aware of this. The anti-corruption campaign has always been selective, a means to destroy political rivals and to build the Party’s public image.
The price civil servants have to pay
But there is also a price to pay to have a government job and to enjoy all the benefits and perks. In addition to the great difficulty of staying clean, officials have to face other restrictions and inconveniences, which include:
No private overseas trips anymore: Amid rising xenophobic sentiment, government officials from the middle level above have basically lost their right to travel to foreign countries on their own. This is also believed to be a measure to prevent corrupt officials from running away. Officials are also instructed to limit their contact with foreigners.
More restrictions on access to “harmful” information: While using a VPN to access websites blocked by government censors is illegal for everyone, it is a particularly sensitive issue for officials. Use of a VPN, as well as possessing publications criticizing the authorities, is a punishable offense. From time to time, there are government announcements that officials be sacked for such offenses.
Even less freedom of speech than ordinary citizens: After Xi took office, a new term, “Unwarranted criticism of the central leadership,” has been coined to mute criticizing voices within the government. Some officials have also got into trouble for this.
Labor market
Xi Jinping
Executive Moves
Jean Lu has been China CEO at Standard Chartered Bank since the end of August. Lu joined SCB in 2014 and was previously Head of Corporate & Investment Banking and Deputy CEO of SCB China.
Xinning Jia has been the new Director-General of the Strategy, Policy, and Partnerships Department at the Asian Development Bank (ADB) since mid-September. Jia has worked in various functions at the ADB for around 20 years and previously conducted research at Harvard University in the US. She studied in Beijing and the USA.
Is something changing in your organization? Let us know at heads@table.media!
Dessert
Gathering before the storm: These fishing boats seek shelter in Shenjiamen harbor in Zhoushan, Zhejiang. After causing chaos in Japan, Typhoon Pulasan is expected to make landfall in Jiangsu, north of Zhejiang, on Friday morning. However, forecasts assume that it will have weakened by then. Korea will also be affected by the storm: Pulasan will hit the country on the 21st.
Trade relations between China and the EU are now at a “crossroads” – at a meeting with car manufacturers in Brussels on Wednesday, Trade Minister Wang Wentao made no secret of what he thinks of Europe’s measures to protect its car industry. Wang came to Europe after the European Commission rejected the price commitments of the Chinese car manufacturers involved in the tariff dispute.
The pithy words were followed by a meeting with EU Trade Commissioner Valdis Dombrovskis. However, the successes achieved in the negotiations were limited. János Allenbach-Ammann from Europe.Table and Amelie Richter analyze what was discussed in Brussels and what progress was made. One thing I can tell you already: The debate will occupy us for some time to come.
Meanwhile, China’s Central Bank is concerned about the persistently low yields on Chinese government bonds, which are at an all-time low. This means that new government debt can be raised at lower rates. However, there is also a risk of a bubble developing that could jeopardize financial stability.
This is why Beijing has ordered extensive stress tests for banks to prove they can withstand large falls in bond prices. Signs of economic recovery could cause a lot of money to flow out of the bond market, resulting in falling bond prices. The effect could be amplified if investors panic and begin to sell en masse. Joern Petring’s analysis describes how China’s Central Bank handles this situation.
Your Julia Fiedler
Feature
EV investigation: Which points are still being negotiated
EVs from China: Chinese manufacturers can now submit new price commitments, which the EU Commission will consider.
The debate surrounding the EU’s additional tariffs on Chinese EVs will continue in the coming weeks. There was no major breakthrough in the negotiations at a meeting between EU Trade Commissioner Valdis Dombrovskis and China’s Trade Minister Wang Wentao on Thursday. Dombrovskis emphasized that the EU’s investigation was based on facts and respected WTO law. However, the EU Commission expressed its willingness to take a closer look at the Chinese price commitment proposal despite the expiration of the deadline.
The Commission announced last week that it would no longer accept any new price commitments from the Chinese car manufacturers because the deadline at the end of August had passed. The car manufacturers had agreed in the commitments to set minimum sales prices for their electric vehicles. The aim is to reduce the price pressure on European manufacturers and thus avoid the proposed tariffs.
The Commission now applies an article of the anti-subsidy regulation to extend the deadline for Chinese car manufacturers. Chinese manufacturers can submit new price commitments, which the Commission will consider.
Strict deadline on October 30
However, the Commission will continue the investigation in accordance with its deadlines. And the clock is ticking: The investigation must be completed by October 30 at the latest. There has been a slight delay in coordination with the Member States. The vote in the Trade Defense Instruments Committee scheduled for next week has been postponed, as EU diplomats confirm to Table.Briefings – probably until the week after.
The EU Chamber of Commerce in China still hopes for a political solution: “We would like to see an outcome that continues to allow for a strong trade and investment relationship,” Adam Dunnett, Secretary General of the Chamber of Commerce, told Table.Briefings. EVs only make up a small part of overall trade between China and the EU. However, according to Dunnett, concerns are growing, and he can understand why the EU intervened so early. However, the whole situation is “unfortunate.” Dunnett hopes that there will be no domino effect on other industries.
Wang warns that trade relations are at a ‘crossroads’
The EU Competition Commissioner-designate Teresa Ribera stressed that avoiding a trade war is just as important as the development of the European car industry. “The main message … is that it is important to avoid a clash, a trade war,” Ribera told the Financial Times. “We need to identify the best tools for how we can develop the car industry in Europe but are also effective in terms of avoiding this trade war,” she said. “This is something that is already being assessed by the Commission Services and the trade people.”
At a meeting with Chinese and European car manufacturers in Brussels on Wednesday evening, Trade Minister Wang said that trade relations between China and the EU are now at a “crossroads,” with “one path leading to openness and collaboration [and] the other to protectionism and isolation,” as the Chinese Chamber of Commerce with the EU stated.
Declining EV sales
Experts voiced concerns that the additional tariffs could affect the EU’s CO2 target. This trend is also reflected in car sales data, which shows a decline in sales of all-electric cars of almost 44 percent in August. The largest EV markets, Germany and France, recorded declines of 68.8 percent and 33.1 percent, respectively, which is also linked to reduced EV purchase subsidies.
Europe’s three largest car manufacturers, Volkswagen, Stellantis, and Renault, recorded total sales declines of 14.8 percent, 29.5 percent, and 13.9 percent, respectively. Tesla and SAIC were not spared either: Their European sales fell by 43.2 percent and 27.5 percent, respectively. How the additional tariffs could affect consumers is up to the manufacturers. For instance, Tesla has already increased the prices of its Model 3 vehicles in Europe. Geely’s Lynk & Co. brand announced it would not raise prices.
Car Industry
EU-Handelskammer
Trade
Zölle
Financial stress test: Why Beijing is worried about the bond market
Fearing a mass bond sell-off, China’s Central Bank is investing large sums in government bonds itself.
Yields on Chinese government bonds have been at rock bottom for months. Beijing is anything but happy about this, even though low yields mean that new government debt can be raised at lower cost. However, the government fears the current situation could lead to a bubble jeopardizing financial stability.
In January 2023, yields on ten-year bonds were still at around three percent; most recently, they were trading at just 2.13 percent – a historically low level. Yields on 20- and 30-year bonds are also at all-time lows.
The situation is linked to the dire economic situation: With the property market at rock bottom, people are no longer taking out loans to buy homes. Companies are also reluctant to borrow money. Large banks have therefore been pumping their capital into the bond market. Chinese government bonds are traded at ever-higher prices, causing yields to fall. Investors hope to make a quick buck by betting on further rising bond prices, further fuelling the rally.
Central Bank prescribes stress tests
Beijing is so concerned that it has ordered extensive stress tests for banks. According to Bloomberg, the Chinese state newspaper Financial News reported on its front page in late August that banks must ensure they “can handle any market volatility.” The stress tests aim to ensure financial institutions can cope with market fluctuations if the current bond rally reverses.
Such a reversal could occur, for instance, when signs of an economic recovery start to occur – namely when money starts to flow out of the bond market. Rising yields cause bond prices to fall, which could panic investors, especially large holders. This could trigger a mass sell-off, with investors trying to get rid of their bonds before prices fall further.
The Central Bank is apparently preparing for such a scenario by buying bonds. In late August, it purchased government bonds worth 400 billion RMB (50.7 billion euros) with long maturities. This included RMB 300 billion in ten-year bonds and RMB 100 billion in 15-year bonds. The purchase of these bonds gives the Central Bank the flexibility to sell them later and thus influence yields.
Reminiscent of the Silicon Valley Bank bust
In April, the Chinese central bank had already signaled its concern about the extent of financial institutions’ investments in long-term government bonds. “This is exactly what caused the liquidity crisis of … Silicon Valley Bank last year,” a central bank official told Financial News at the time. This statement caused a stir as the Chinese Central Bank drew a parallel with the major bank collapse in the United States.
The crisis at Silicon Valley Bank (SVB) began in March 2023, when the bank could not cover massive capital outflows due to a liquidity shortage and poor risk management. SVB had invested heavily in long-term US government bonds and mortgage-backed securities, which lost significant value due to rising interest rates. In an attempt to sell these assets, the bank suffered losses, further shaking customer confidence and leading to a bank run. Eventually, the SVB collapsed, forcing the US government to intervene and stabilize the banking system.
Banks
Economy
Financial market
Events
Sept. 24, 2024; 2:30 p.m CEST (8:30 p.m. Beijing time) Fairbank Center for Chinese Studies, Webinar:Urban China Lecture Series featuring Huang Binling & Yuan ZhenyuMore
Sept. 24, 2024; 8:30 p.m Beijing time Roedl Partner / JP Contagi, Thriving in China ROADSHOW (in Shanghai):Risks and Opportunities for Foreign Businesses in Greater ChinaMore
Sept. 26, 2024; 2:30 p.m. CEST Chinaforum Bayern / THITEC Innovation & Incubation GmbH, location presentation:16th Taicang Day in GermanyMore
Sept. 27, 2024; 5 p.m. CEST (11 p.m. Beijing time) Confucius Institute Frankfurt, Webinar:China’s Pension System in View of Contemporary Societal ChallengesMore
News
EU Parliament: Who sits on the China delegation
The European Parliament has announced the composition of its China delegation. It consists of 38 MEPs. The delegation chair will be elected in early October. The German European politician Engin Eroglu (FW), who was also a member of the delegation in the last parliamentary term, has the best prospects for the post. In addition to Eroglu, the last delegation included René Repasi, Monika Hohlmeier and Miriam Lexmann. New members from Germany include Martin Schirdewan, Michael Bloss and Sibylle Berg.
The delegation will likely not travel to the People’s Republic for the time being, as Lexmann is still sanctioned by the Chinese state. Beijing sanctioned several MEPs in March 2021 after the EU imposed punitive measures against several Xinjiang officials for human rights violations.
The list of the new China delegation by political group:
EPP: Tom Berendsen, Herbert Dorfmann, Monika Hohlmeier, Adam Jarubas, Kinga Kollár, Miriam Lexmann, Lídia Pereira, Oliver Schenk, Susana Solís Pérez, Dimitris Tsiodras
S&D: René Repasi, Sakis Arnaoutoglou, Johan Danielsson, Jonás Fernández, Matteo Ricci, Rosa Serrano Sierra
PfE: Angéline Furet, Vilis Krištopans, András László, Julien Sanchez, Alexandre Varaut
ECR: Tobiasz Bocheński, Jaak Madison, Lara Magoni, Georgiana Teodorescu
Renew: Engin Eroglu, Urmas Paet, Elena Yoncheva
Green: Michael Bloss, Markéta Gregorová, Benedetta Scuderi
Dispute over missile system on Luzon: Philippines and USA train together
Despite Beijing’s criticism, the United States intends to keep a mobile medium-range missile system in the Philippines for the time being. Reuters reported, citing anonymous insiders, that the military of both countries is currently testing whether the system could be used in a regional conflict. The missile system, called Typhon, is currently stationed on the island of Luzon in the north of the Philippines, facing the South China Sea and close to the Taiwan Strait.
This could lead to another conflict in the triangle between China, the Philippines, and its ally, the United States. The Philippines just had to withdraw its last ship from Sabina Reef, which is claimed by China and currently de facto controlled by dozens of ships.
Typhon was brought to the Philippines in April of this year for joint exercises, as both countries announced at the time. The system is capable of firing cruise missiles such as SM-6 missiles and Tomahawks with a range of more than 1600 kilometers and can theoretically also reach Chinese targets. At the time, the US Army described the transfer of the Typhon to Luzon as a “historic first” and a “significant step in our partnership with the Philippines.”
On Thursday, the Chinese Foreign Ministry stated that it was very concerned about plans to keep the system on Luzon. According to spokesman Lin Jian, the Typhon deployment “threatens national security in the region and aggravates geopolitical confrontation, which has aroused high vigilance and concern of countries in the region.” Meanwhile, the Philippines and the US remain tight-lipped about the system’s future on Luzon. Philippine officials emphasized that training is still ongoing. rtr/ck
Geopolitics
Philippines
USA
Audi plant in Brussels: NIO considers takeover
According to a Belgian media report, EV manufacturer NIO is considering purchasing the Audi plant in Vorst near Brussels. A NIO delegation has visited the plant in recent weeks, writes the business newspaper De Tijd. The company is reportedly working on an offer that must be submitted to the Volkswagen Group by next Monday. VW has decided to stop producing cars in Vorst once the last Q8 e-tron electric SUV rolled off its production line in 2025. The only way to prevent the factory’s closure and the loss of 2,900 jobs is to sell it. NIO declined to comment on the plans when asked by Table.Briefings.
In light of the threat of additional EU tariffs, several Chinese EV manufacturers are looking for European production opportunities. NIO is facing a special tariff of 20.8 percent on top of the regular import tariff of ten percent. The EU will make a final decision on the matter on 25 September. NIO sells some of its models in Norway, Germany, the Netherlands, Denmark and Sweden – but not yet in Belgium. Although sales figures have been low so far, NIO is still aiming for the European market.
Nio recently launched its new Onvo brand in China, which is aimed at a mid-range buyer group and is expected to generate high-volume sales. Its first model, the L60, is a mid-size SUV already touted as a Tesla Model Y killer in China. It is available for an entry-level price of the equivalent of 19,000 euros and comes with a rented battery. ck/jul
Batterien
Car Industry
Electromobility
Nio
China Perspective
Dream job or not: The advantages and disadvantages of being a civil servant
China’s government officials are generally competent and corrupt at the same time. They have the professional capabilities to do their job. But they would also embezzle and take bribes, sometimes in whopping amounts. For them, the top rule for survival is to tread the Party line.
n communist China, where the whole society is driven by politics and the authorities control all the important resources, the most powerful group has always been those in the government. So, the dream job for many bright students is to work in the government. In annual exams recruiting new civil servants, competition is throat-cutting fierce.
Big-name business people such as Jack Ma, founder of the IT giant Alibaba, briefly had some clout, but as it later turned out, the government could easily crush their influence.
A secure job with numerous benefits
In the most difficult days during China’s draconian Covid lockdowns, ordinary citizens struggled to get food and vegetables. However, supplies for government officials of all levels never had any problem. The Communist Party has always been smart enough to systematically provide benefits to those who work directly for it.
The nominal salaries of Chinese government officials are modest compared to what is earned by people in other walks of life. However, there are many hidden benefits for civil servants. They are:
Job security: The chance of being laid off is close to zero.
Subsidized housing: While others have to pay the savings of an entire family, a down payment for an apartment, and a big part of their monthly salary for mortgage repayments, government officials over certain levels get significantly subsidized housing. These apartments can’t be traded in the market, but the residents can live in them as long as they stay in the government.
Cheaper, better medical service: Under China’s public medical insurance system, everybody is supposed to pay a share of the expenses for the medical service one receives. This share can be as high as 30 percent. But for civil servants, this share is close to zero. And officials over certain levels – for example, bureau chiefs at the central government level and officials of comparable level in local hierarchies- get everything free – and with top quality. Most organs for transplant operations in China are reserved for high-ranking officials.
A better pension.
Corruption is hard to resist
Government officials control invaluable resources, from industrial policy to administrative approval of major projects and trademarks. It is just so easy to get bribed with the power in your hand, a former government official once told me. “Sometimes you are not really breaking the rules in a big way, you simply move a case a bit closer to the front and you will help the applicants save millions of yuan. And they would give you something because of this.” He said that even if you want to stay clean, it could be very difficult if your director phones and tells you to process something faster.
That was only a simple example. Many corrupted officials can be much more aggressive and creative. In some cases revealed by investigated journalists, state security officials, for instance, blackmailed enterprises for fabricated accusations.
Despite the much-publicized crackdowns after Xi Jinping took power, corruption is still rampant. Corrupted officials simply employ more sophisticated ways. When the officials’ honesty depends almost solely on internal supervision and inspection, corruption is doomed to be incurable cancer. Many, including the top Communist Party leaders, are aware of this. The anti-corruption campaign has always been selective, a means to destroy political rivals and to build the Party’s public image.
The price civil servants have to pay
But there is also a price to pay to have a government job and to enjoy all the benefits and perks. In addition to the great difficulty of staying clean, officials have to face other restrictions and inconveniences, which include:
No private overseas trips anymore: Amid rising xenophobic sentiment, government officials from the middle level above have basically lost their right to travel to foreign countries on their own. This is also believed to be a measure to prevent corrupt officials from running away. Officials are also instructed to limit their contact with foreigners.
More restrictions on access to “harmful” information: While using a VPN to access websites blocked by government censors is illegal for everyone, it is a particularly sensitive issue for officials. Use of a VPN, as well as possessing publications criticizing the authorities, is a punishable offense. From time to time, there are government announcements that officials be sacked for such offenses.
Even less freedom of speech than ordinary citizens: After Xi took office, a new term, “Unwarranted criticism of the central leadership,” has been coined to mute criticizing voices within the government. Some officials have also got into trouble for this.
Labor market
Xi Jinping
Executive Moves
Jean Lu has been China CEO at Standard Chartered Bank since the end of August. Lu joined SCB in 2014 and was previously Head of Corporate & Investment Banking and Deputy CEO of SCB China.
Xinning Jia has been the new Director-General of the Strategy, Policy, and Partnerships Department at the Asian Development Bank (ADB) since mid-September. Jia has worked in various functions at the ADB for around 20 years and previously conducted research at Harvard University in the US. She studied in Beijing and the USA.
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Dessert
Gathering before the storm: These fishing boats seek shelter in Shenjiamen harbor in Zhoushan, Zhejiang. After causing chaos in Japan, Typhoon Pulasan is expected to make landfall in Jiangsu, north of Zhejiang, on Friday morning. However, forecasts assume that it will have weakened by then. Korea will also be affected by the storm: Pulasan will hit the country on the 21st.
