China’s Foreign Minister Wang Yi reacted annoyed at the Munich Security Conference when host Christoph Heusgen asked him about the allegations of forced labor in Xinjiang. Wang claimed that it was fake information that was only intended to stop China’s development.
Instead, Wang Yi wanted to showcase a self-confident China in Munich that plays an active role in global politics. On the stage and in numerous personal exchanges, he advocated closer cooperation with Europe and the USA, among others.
He also presented China as a force of peace and stability in the face of numerous wars and crises – one that puts overarching interests before its own and champions neutrality and non-interference. Michael Radunski, who was on the ground in Munich, analyzes if China truly lives up to these high standards. He gives the “Chinese way” that Wang talks about a reality check.
Constructive dialogue on trade, financial and military matters: The overall tone between the US and China at this year’s Munich Security Conference was much more positive than a year ago, when the discovery of a spy balloon had soured relations. This is how Li Cheng, a political scientist from the United States, assesses the mood in an interview with Table.Media.
However, he does not believe that the constructive atmosphere can be attributed to the numerous domestic political problems. In the interview on the fringes of the Munich Security Conference, Cheng Li also offers an opinion on why there has been no successor to Qin Gang so far.
Your Julia Fiedler
Feature
Wang Yi presents China as a power of peace and stability
Annalena Baerbock and Wang Yi at the Munich Security Conference.
At this year’s Munich Security Conference, China’s highest foreign policy official Wang Yi portrayed his country as a particularly stable role model for other countries. He said that the world was going through turbulent times and that China was being challenged by countless crises. He cited protectionism, unilateralism, bloc politics and the violation of the security concept as some of the reasons for this. In this uncertain environment, China will remain a responsible playercommitted to peace and stability around the world, Wang assured in Munich.
The core message of Wang’s speech quickly became clear: While the USA is less and less willing to engage on the international stage, China is ready to take on global responsibility.
Wang is a welcome guest at the Munich Security Conference. Sometimes, he comes as China’s Foreign Minister, sometimes as Director of the Central Foreign Affairs Commission – or, as this year, simply as both. He is Beijing’s mouthpiece. Wang’s speeches reveal China’s foreign policy priorities. This year, there are obviously quite a few.
Accordingly, Wang’s speech touched on the current global crises:
China is committed to peace talks in the war in Ukraine. He assured his Ukrainian colleague Dmytro Kuleba that his country was not providing Russia with lethal weapons of any kind. Beijing “does not take any advantage of the situation, and does not sell lethal weapons to conflict areas or parties to the conflict.”
Regardless of how the international situation develops, China hopes for normal relations with Ukraine. He stressed that the territorial integrity as well as the legitimate security interests of all countries must be safeguarded. However, this is China’s standard phrase – and also shows that Beijing will not leave Russia’s side.
China demands an immediate ceasefire in the Middle East. Wang criticized the situation as being “longest-lasting injustice in our world.” He said the only solution could be an independent state of Palestine and that Beijing submitted an according position paper to the UN Security Council.
Beijing also focuses on dialogue and cooperation in the South China Sea with the aim of developing a joint code of conduct with ASEAN nations.
On climate action, Wang promised that China would reduce its emissions more than any other country and at an unprecedented rate.
China is not living up to its own standards
Wang tried to convey the impression that China essentially always has the right solution at hand. Including the corresponding subtext: unlike the USA.
It is a bold approach, considering Beijing’s commitment rarely goes beyond patient papers and pretty words. On the contrary: In many places, China is not (yet) ready to live up to its own aspirations. Or as Wang put it in Munich: As a responsible player, China would put overarching interests above its own interests.
This is by no means a uniquely Chinese phenomenon. The current leading power, the USA, also pursues its own interests first and foremost – sometimes quite obviously and ruthlessly. However, China likes to present itself as a better alternative to the USA. Wang called this the “Chinese way” in Munich.
According to Wang, the fundamentals of this Chinese way are
Neutrality
Non-interference
Overriding interests take precedence over China’s own interests
But this is where wishful thinking overtakes reality. There is little evidence of China’s neutrality in the Ukraine war. Trade with Russia continues to grow and, politically, Presidents Xi and Putin pledge each other deep friendship and close ties.
China’s second point of non-interference is also lacking, a look at China’s behavior towards Taiwan is enough. Wang even accuses the ruling DPP of seeking independence – a red line for China. The reality is different: Election winner William Lai favors dialogue over confrontation and wants an exchange with China. In Munich, Wang said: “Taiwan is an inalienable part of China’s territory and Taiwan affairs are China’s internal affairs.”
Wang meets with Blinken and Baerbock
But Wang also sends out many conciliatory signals in Munich:
China once again focuses more on cooperation with the USA. Wang met with US Secretary of State Antony Blinken on the sidelines of the MSC. There was talk of an “open and constructive discussion” in the conference corridors. The two sides plan to hold high-level talks on the conflict in the Middle East and the situation in North Korea in a few weeks.
China and the EU should strive for closer relations. And so Wang also met with Germany’s Foreign Minister Annalena Baerbock for a direct exchange. Close relations between China and Europe are in both sides’ interests and are beneficial for the entire world, said Wang. It was therefore important that Europe did not allow itself to be distracted by ideology, Wang said. Those who wanted to exclude China under the banner of “de-risking” would make a big mistake.
Wang signaled the prospect of easing relations with Canada, which have been severely strained for years. “The two sides are not rivals, let alone enemies, and should become cooperative partners,” Wang said at a meeting with Canadian chief diplomat Mélanie Joly. The “current difficult situation” is not what China wants to see.
Wang also promised that China would be a stabilizing force in the international order. Beijing would oppose power politics and advocate multilateralism and solidarity. He stressed that the United Nations and the UN Charter must remain at the heart of everything.
China supports the Global South with all its strength. “As the largest developing country,” China is trying to promote more openness, cooperation and equality worldwide through numerous initiatives.
Wang calls forced labor in Xinjiang a lie
Wang faced his first reality check immediately after his speech when MSC host Christoph Heusgen brought up the many reports of genocide and forced labor in the Xinjiang Autonomous Region. Human rights activists repeatedly report forced labor; the UN estimates that one million people were imprisoned in re-education camps at times. Just a few days ago, BASF announced that it would cease doing business in Xinjiang.
Wang rejected such reports in Munich as blatant lies and called them deliberate misinformation to stop China’s development.
EU
Geopolitics
Trade
Interview
‘Xi Jinping is not an irrational gambler’
Political scientist Li Cheng in conversation with Table.Media editor Michael Radunski at the Munich Security Conference.
China’s highest foreign politician Wang Yi and US foreign minister Antony Blinken held talks here in the backrooms, on the sidelines of the Munich Security Conference. What are the prospects for US-China relations?
Let’s go back to last year when it was all about accusations because of the balloon incident. Luckily, this is over. At their meeting in San Francisco, Biden and Xi found a floor to prevent further deterioration or even a free fall. Now we have many dialogues, ranging from civil dialogue, to trade and finance, even military to military. And they are all very constructive.
What is the reason for this new constructive atmosphere? Domestic pressure in China?
No, I don’t think China’s domestic problems are pushing Beijing into talks. It would be a mistake to say that this is the motivation of China’s foreign policy. It has influence, no doubt. China’s economic problems are big and they are real. But China’s foreign policy is not primarily dictated by domestic problems for now.
Those problems range from weak economics over debt problems in the real estate sector to high unemployment rates among China’s youth. Some fear that with all these problems in the back, President Xi Jinping could act irrationally in foreign policy – to distract attention. Is that a plausible scenario?
This is a poor understanding of China and China’s state-society relations. This narrative might apply to other countries but only to a very few. Because, first of all, it would not work. Secondly, it would be far too dangerous because, in the end, we talk about a devastating war between the US and China. Xi Jinping is not an irrational gambler.
Let’s stick to inner Chinese politics for a moment. We see many purges within the PLA. What is behind these purges?
Mainly it’s corruption. But it’s getting better. This time, they arrested only a few generals. Twelve years ago, it was far more serious.
Corruption is always the official explanation in many different cases. Is there a way to become an important figure in China without corruption? It seems that it’s deeply rooted within the system.
Well, China’s military used to be what you just described. But Xi Jinping cleaned up the ranks to a certain extent. The big difference this time is that Xi fired people he promoted himself.
That’s the point: Xi is even purging people he personally promoted.
It’s interesting. When Xi was promoting only his own people, so-called experts called that factional politics to criticize Xi Jinping. Now, no one talks about that anymore, but Xi is again criticized.
What can we conclude from this?
That it’s corruption. I think you didn’t listen to my comparison: Twelve years ago, they purged 77 generals, this time only 5 or 6 generals. So, less than 10 percent.
But it’s not limited to the PLA. Even China’s foreign minister disappeared one day…
… that I don’t know. I do not know what happened.
Okay. I see. But what do you think, why do we still don’t have a successor?
That’s a good question. My underlying view is that, despite Qin Gang was promoted by Xi, he was quite capable. The fact that there is still no successor might suggest that Xi could not find an equally capable candidate in the same younger cohort like Qin to replace him.
But after a certain time, you have to find a new one for this position.
Yeah, you will probably hear very soon. It’s maybe only a matter of months.
Liu Jianchao?
Possible, but I do not know for sure. Highly likely.
What’s the impact on China’s foreign policy that China does not have a foreign minister at the moment. Wang Yi only stepped in temporarily. Or, in the end, it makes no difference because it’s only Xi Jinping who decides?
Yes, in the end, it’s Xi Jinping. He decides.
Do you see any impact on Xi Jinping himself? Has Xi’s position possibly been weakened by all the purges?
My answer is no, Xi is still in the lead. He is the one who decided to arrest them.
But these are his own people.
Right. That shows that the system works. Xi realized that, once he got the information, he had no choice.
Cheng Li is a political scientist and founding director of the Center on Contemporary China and the World (CCCW) at the University of Hong Kong. Until 2023, he was director of the John L. Thornton China Center at the Brookings Institution in Washington, DC.
Geopolitics
Qin Gang
Xi Jinping
News
VW reports high sales growth in January
The Volkswagen Group recorded higher global sales figures at the start of the year. In January, VW delivered 698,200 passenger cars and commercial vehicles to customers, 13 percent more than a year earlier. The Wolfsburg-based car manufacturer announced this on Friday. The growth is exclusively attributable to China. Sales in Western Europe fell by three percent and by one percent in North America. In China, on the other hand, VW sold 290,900 vehicles in January, an increase of 43 percent.
However, the comparison is doubly distorted: In early 2023, Covid restrictions still weighed on China. Moreover, Chinese New Year fell on late January, whereas it is celebrated in February in 2024. During the New Year holidays, sales always drop sharply.
According to VW, the all-electric car business in particular grew more strongly in China than that of its competitors. The company sold 17,700 electric models in China in January, including 7,600 ID.3s alone. Worldwide, the Volkswagen brand recorded the highest growth of 18 percent to 382,900 vehicles, Audi grew by 13.2 percent and Porsche achieved an increase of 6.9 percent. rtr
Autoindustrie
Coastguard steps up patrols off Kinmen
Following the death of two alleged fishers, China has announced increased patrols off the Taiwanese island of Kinmen. According to the AP news agency, spokesman Gan Yu said that the coastguard in Fujian would regularly monitor the waters near the Chinese metropolis of Xiamen. The leadership in Beijing also announced further measures.
Kinmen Island is located just a few kilometers from the Chinese mainland. According to information from the Taiwanese coast guard, a Chinese vessel entered a restricted area without authorization on Wednesday. It capsized while fleeing from the coast guard and two of the four fishermen drowned, according to the Chinese account. The two other sailors are in Taiwanese custody. China emphasized that there is no such thing as restricted areas. flee
Militär
EU Commission opens investigation into Chinese railway company
The EU Commission is investigating the Chinese railway manufacturer CRRC Qingdao Sifang Locomotive. The aim is to find out whether it is undercutting European manufacturers with the help of state subsidies. On Friday, Internal Market Commissioner Thierry Breton announced an investigation into the Chinese state-owned China Railway Rolling Stock Corporation (CRRC) subsidiary. Specifically, the investigation concerns an order for 20 electric trains in Bulgaria. The investigation could result in CRRC Qingdao Sifang Locomotive not being awarded this contract.
The investigation is the first under the new EU Foreign Subsidies Regulation. According to the EU Commission, CRRC Qingdao Sifang Locomotive’s offer for the 20 trains is only about half as high as that of the Spanish company Talgo. Brussels claims this is only possible thanks to the company receiving subsidies of 1.75 billion euros from Beijing. The contract from the Bulgarian Ministry of Transport is worth an estimated 610 million euros. According to the Commission, it also includes maintenance over 15 years as well as staff training.
In accordance with the regulation that came into force last year, Bulgaria has forwarded the contract to Brussels on suspicion of state subsidies. The EU Commission has until July 2 to make a decision. “Ensuring that our EU Single Market is not distorted by foreign subsidies to the detriment of competitive firms that play fair is vital for our competitiveness and economic security,” Breton said on Friday. ari
The New Year travel wave rolls at pre-Covid level
China’s tourism industry reports surprisingly high revenue after the New Year celebrations. During the eight-day holiday, tourism revenue grew by 47 percent compared to the previous year and even exceeded the pre-pandemic figures of 2019. This is according to data from the Ministry of Culture and Tourism.
Domestic tourism spending rose to 632.7 billion yuan (82.5 billion euros) – almost eight percent more than in 2019. The Chinese also made more domestic trips – compared to last year, the number of trips increased by 34 percent to 474 million, 19 percent more than in 2019. The average spending per trip was also higher than in the previous year. Chinese only made fewer trips abroad – the number of inbound and outbound trips was slightly below that of 2019.
The New Year celebrations trigger the largest annual migration movement in the world, with tourist attractions across the country experiencing huge crowds. People travel across the country and back to visit their families. It remains to be seen how sustainable the brief tourism boom will be, as the general consumer mood remains poor. rtr
Tourismus
Tools
Hoping in vain for a relaxation of the data law
By Ondrej Zapletal and Rainer Burkardt
On September 28, 2023, the Cyberspace Administration of China (CAC) submitted the draft provisions on the regulation and promotion of cross-border data flows for public comment. It includes exemptions from the current strict regulation on the cross-border transfer of personal data.
The general requirements for the cross-border transfer of personal data are set out in the Personal Information Protection Law (PIPL). Article 38 of this law stipulates that data processors who transfer personal data to a recipient outside the People’s Republic of China must fulfill one of the following preconditions:
Pass a security assessment organized by the State Cyberspace Administration of China (“CAC”)
Pass a PI protection certification by a qualified institution in accordance with the provisions of the CAC
Conclude a contract with the overseas recipient according to the standard contract formulated by the CAC (“Standard Contract”).
The CAC safety assessment, the certification and the CAC standard contract are hereinafter referred to as the “Three preconditions”.
Many small and medium-sized enterprises (SMEs) in China that only transfer small quantities of personal data overseas, e.g. to their parent company, have problems fulfilling the three preconditions for the cross-border transfer of personal data. This is mainly because the implementation of the three requirements is time-consuming and costly and at the time of publication of this article there is a lack of practical experience.
With the draft’s publication, a sigh of relief went through the boardrooms of many foreign-invested SMEs in China, as their executives had expected considerable facilitation for their cross-border transfers of personal data.
Exceptions to the three preconditions
According to Art. 3 of the draft, the three preconditions for the “cross-border transfer of personal data not collected or generated in China” do not have to be met. This exception applies to personal data that is, for example, collected at the company’s headquarters in the EU, then provided to the subsidiary in China and finally transferred back to the EU by the Chinese subsidiary. In this case, the Chinese subsidiary would not have to fulfill any of the three conditions when transferring the data to the EU.
Art. 4 of the draft provides for three exceptions where the three preconditions for cross-border transfer of personal data do not apply:
Transfer of personal data abroad, if necessary for the conclusion or fulfillment of a contract in which the individual concerned is involved, such as in the case of purchase contracts, money transfers, flight and hotel reservations;
Necessary transfer of personal employee data for human resources management purposes in accordance with legal employment regulations and collective agreements; and
Necessary transfer of personal data in emergency situations to protect the life, health and property of natural persons.
In addition to the exemption under point 1, which could be used by, for example, trading platforms, travel agencies and financial service providers, the exemption under point 2 is of significant importance for HR departments of companies in China with overseas headquarters that transfer personal data of employees to their headquarters. However, it should be noted that the term “necessary,” which is a prerequisite for the three exemptions mentioned above, is neither defined nor further explained in the draft.
Another important exception to the three preconditions under Art. 38 PIPL can be found in Art. 5 of the draft, which stipulates that none of the three preconditions need to be met if data processors transfer less than 10,000 personal data across borders within a year.
Contradiction to the PIPL
However, according to the PIPL wording, the three preconditions apply without exception and regardless of the purpose or data volume, so that even in the case of the cross-border transfer of a single set of personal data, the data processor must fulfill one of the three preconditions before it is allowed to transfer it abroad. As a result, the exceptions in the draft contradict Art. 38 PIPL.
This raises the question of the legal consequences if the CAC adopts the draft with the current wording without “resolving” these contradictions.
If a subordinate regulation violates the provisions of a superior regulation, the competent authority must amend or repeal this subordinate regulation. Since the draft – issued by the CAC, an administrative organ under the State Council – is subordinate to the superior PIPL – which was enacted by the National People’s Congress – and conflicts with the PIPL, the draft, even if published in its current form, can be amended or repealed by the State Council.
Companies should waste no time
Given the contradictions between the draft and the PIPL, we assume that the draft will not be published in its current form. Since the PIPL has already been in force since November 1, 2021, there is no reason to wait for a relaxation that may not come. Instead, diligent business leaders should advance the implementation of one of the three preconditions and fulfill other obligations under the PIPL, such as conducting a data protection impact assessment (PIPIA), to ensure that their company’s cross-border transfers of personal data comply with PIPL preconditions. There is no time to lose!
EU-Handelskammer
Unternehmen
Executive Moves
Christiane Arsenault is the new Sustainability Project Manager at Porsche in Stuttgart after a long stay in China. She previously spent eleven and a half years in Beijing at Volkswagen Group China, most recently as Manager Corporate Strategy.
Robert Lothlorien has been Head of Product & Service at Pytes Energy in Shanghai since December. He was previously ESS Product Manager, also at Pytes.
Is something changing in your organization? Let us know at heads@table.media!
Dessert
The Chinese New Year celebrations traditionally do not end before the Lantern Festival on the 14th day. But for some people at least, job life slowly begins again. But there is still dancing: Here, people from the Miao ethnic group celebrate the Spring Festival at a dance performance in the community of Gandong in Rongshui Autonomous County.
China’s Foreign Minister Wang Yi reacted annoyed at the Munich Security Conference when host Christoph Heusgen asked him about the allegations of forced labor in Xinjiang. Wang claimed that it was fake information that was only intended to stop China’s development.
Instead, Wang Yi wanted to showcase a self-confident China in Munich that plays an active role in global politics. On the stage and in numerous personal exchanges, he advocated closer cooperation with Europe and the USA, among others.
He also presented China as a force of peace and stability in the face of numerous wars and crises – one that puts overarching interests before its own and champions neutrality and non-interference. Michael Radunski, who was on the ground in Munich, analyzes if China truly lives up to these high standards. He gives the “Chinese way” that Wang talks about a reality check.
Constructive dialogue on trade, financial and military matters: The overall tone between the US and China at this year’s Munich Security Conference was much more positive than a year ago, when the discovery of a spy balloon had soured relations. This is how Li Cheng, a political scientist from the United States, assesses the mood in an interview with Table.Media.
However, he does not believe that the constructive atmosphere can be attributed to the numerous domestic political problems. In the interview on the fringes of the Munich Security Conference, Cheng Li also offers an opinion on why there has been no successor to Qin Gang so far.
Your Julia Fiedler
Feature
Wang Yi presents China as a power of peace and stability
Annalena Baerbock and Wang Yi at the Munich Security Conference.
At this year’s Munich Security Conference, China’s highest foreign policy official Wang Yi portrayed his country as a particularly stable role model for other countries. He said that the world was going through turbulent times and that China was being challenged by countless crises. He cited protectionism, unilateralism, bloc politics and the violation of the security concept as some of the reasons for this. In this uncertain environment, China will remain a responsible playercommitted to peace and stability around the world, Wang assured in Munich.
The core message of Wang’s speech quickly became clear: While the USA is less and less willing to engage on the international stage, China is ready to take on global responsibility.
Wang is a welcome guest at the Munich Security Conference. Sometimes, he comes as China’s Foreign Minister, sometimes as Director of the Central Foreign Affairs Commission – or, as this year, simply as both. He is Beijing’s mouthpiece. Wang’s speeches reveal China’s foreign policy priorities. This year, there are obviously quite a few.
Accordingly, Wang’s speech touched on the current global crises:
China is committed to peace talks in the war in Ukraine. He assured his Ukrainian colleague Dmytro Kuleba that his country was not providing Russia with lethal weapons of any kind. Beijing “does not take any advantage of the situation, and does not sell lethal weapons to conflict areas or parties to the conflict.”
Regardless of how the international situation develops, China hopes for normal relations with Ukraine. He stressed that the territorial integrity as well as the legitimate security interests of all countries must be safeguarded. However, this is China’s standard phrase – and also shows that Beijing will not leave Russia’s side.
China demands an immediate ceasefire in the Middle East. Wang criticized the situation as being “longest-lasting injustice in our world.” He said the only solution could be an independent state of Palestine and that Beijing submitted an according position paper to the UN Security Council.
Beijing also focuses on dialogue and cooperation in the South China Sea with the aim of developing a joint code of conduct with ASEAN nations.
On climate action, Wang promised that China would reduce its emissions more than any other country and at an unprecedented rate.
China is not living up to its own standards
Wang tried to convey the impression that China essentially always has the right solution at hand. Including the corresponding subtext: unlike the USA.
It is a bold approach, considering Beijing’s commitment rarely goes beyond patient papers and pretty words. On the contrary: In many places, China is not (yet) ready to live up to its own aspirations. Or as Wang put it in Munich: As a responsible player, China would put overarching interests above its own interests.
This is by no means a uniquely Chinese phenomenon. The current leading power, the USA, also pursues its own interests first and foremost – sometimes quite obviously and ruthlessly. However, China likes to present itself as a better alternative to the USA. Wang called this the “Chinese way” in Munich.
According to Wang, the fundamentals of this Chinese way are
Neutrality
Non-interference
Overriding interests take precedence over China’s own interests
But this is where wishful thinking overtakes reality. There is little evidence of China’s neutrality in the Ukraine war. Trade with Russia continues to grow and, politically, Presidents Xi and Putin pledge each other deep friendship and close ties.
China’s second point of non-interference is also lacking, a look at China’s behavior towards Taiwan is enough. Wang even accuses the ruling DPP of seeking independence – a red line for China. The reality is different: Election winner William Lai favors dialogue over confrontation and wants an exchange with China. In Munich, Wang said: “Taiwan is an inalienable part of China’s territory and Taiwan affairs are China’s internal affairs.”
Wang meets with Blinken and Baerbock
But Wang also sends out many conciliatory signals in Munich:
China once again focuses more on cooperation with the USA. Wang met with US Secretary of State Antony Blinken on the sidelines of the MSC. There was talk of an “open and constructive discussion” in the conference corridors. The two sides plan to hold high-level talks on the conflict in the Middle East and the situation in North Korea in a few weeks.
China and the EU should strive for closer relations. And so Wang also met with Germany’s Foreign Minister Annalena Baerbock for a direct exchange. Close relations between China and Europe are in both sides’ interests and are beneficial for the entire world, said Wang. It was therefore important that Europe did not allow itself to be distracted by ideology, Wang said. Those who wanted to exclude China under the banner of “de-risking” would make a big mistake.
Wang signaled the prospect of easing relations with Canada, which have been severely strained for years. “The two sides are not rivals, let alone enemies, and should become cooperative partners,” Wang said at a meeting with Canadian chief diplomat Mélanie Joly. The “current difficult situation” is not what China wants to see.
Wang also promised that China would be a stabilizing force in the international order. Beijing would oppose power politics and advocate multilateralism and solidarity. He stressed that the United Nations and the UN Charter must remain at the heart of everything.
China supports the Global South with all its strength. “As the largest developing country,” China is trying to promote more openness, cooperation and equality worldwide through numerous initiatives.
Wang calls forced labor in Xinjiang a lie
Wang faced his first reality check immediately after his speech when MSC host Christoph Heusgen brought up the many reports of genocide and forced labor in the Xinjiang Autonomous Region. Human rights activists repeatedly report forced labor; the UN estimates that one million people were imprisoned in re-education camps at times. Just a few days ago, BASF announced that it would cease doing business in Xinjiang.
Wang rejected such reports in Munich as blatant lies and called them deliberate misinformation to stop China’s development.
EU
Geopolitics
Trade
Interview
‘Xi Jinping is not an irrational gambler’
Political scientist Li Cheng in conversation with Table.Media editor Michael Radunski at the Munich Security Conference.
China’s highest foreign politician Wang Yi and US foreign minister Antony Blinken held talks here in the backrooms, on the sidelines of the Munich Security Conference. What are the prospects for US-China relations?
Let’s go back to last year when it was all about accusations because of the balloon incident. Luckily, this is over. At their meeting in San Francisco, Biden and Xi found a floor to prevent further deterioration or even a free fall. Now we have many dialogues, ranging from civil dialogue, to trade and finance, even military to military. And they are all very constructive.
What is the reason for this new constructive atmosphere? Domestic pressure in China?
No, I don’t think China’s domestic problems are pushing Beijing into talks. It would be a mistake to say that this is the motivation of China’s foreign policy. It has influence, no doubt. China’s economic problems are big and they are real. But China’s foreign policy is not primarily dictated by domestic problems for now.
Those problems range from weak economics over debt problems in the real estate sector to high unemployment rates among China’s youth. Some fear that with all these problems in the back, President Xi Jinping could act irrationally in foreign policy – to distract attention. Is that a plausible scenario?
This is a poor understanding of China and China’s state-society relations. This narrative might apply to other countries but only to a very few. Because, first of all, it would not work. Secondly, it would be far too dangerous because, in the end, we talk about a devastating war between the US and China. Xi Jinping is not an irrational gambler.
Let’s stick to inner Chinese politics for a moment. We see many purges within the PLA. What is behind these purges?
Mainly it’s corruption. But it’s getting better. This time, they arrested only a few generals. Twelve years ago, it was far more serious.
Corruption is always the official explanation in many different cases. Is there a way to become an important figure in China without corruption? It seems that it’s deeply rooted within the system.
Well, China’s military used to be what you just described. But Xi Jinping cleaned up the ranks to a certain extent. The big difference this time is that Xi fired people he promoted himself.
That’s the point: Xi is even purging people he personally promoted.
It’s interesting. When Xi was promoting only his own people, so-called experts called that factional politics to criticize Xi Jinping. Now, no one talks about that anymore, but Xi is again criticized.
What can we conclude from this?
That it’s corruption. I think you didn’t listen to my comparison: Twelve years ago, they purged 77 generals, this time only 5 or 6 generals. So, less than 10 percent.
But it’s not limited to the PLA. Even China’s foreign minister disappeared one day…
… that I don’t know. I do not know what happened.
Okay. I see. But what do you think, why do we still don’t have a successor?
That’s a good question. My underlying view is that, despite Qin Gang was promoted by Xi, he was quite capable. The fact that there is still no successor might suggest that Xi could not find an equally capable candidate in the same younger cohort like Qin to replace him.
But after a certain time, you have to find a new one for this position.
Yeah, you will probably hear very soon. It’s maybe only a matter of months.
Liu Jianchao?
Possible, but I do not know for sure. Highly likely.
What’s the impact on China’s foreign policy that China does not have a foreign minister at the moment. Wang Yi only stepped in temporarily. Or, in the end, it makes no difference because it’s only Xi Jinping who decides?
Yes, in the end, it’s Xi Jinping. He decides.
Do you see any impact on Xi Jinping himself? Has Xi’s position possibly been weakened by all the purges?
My answer is no, Xi is still in the lead. He is the one who decided to arrest them.
But these are his own people.
Right. That shows that the system works. Xi realized that, once he got the information, he had no choice.
Cheng Li is a political scientist and founding director of the Center on Contemporary China and the World (CCCW) at the University of Hong Kong. Until 2023, he was director of the John L. Thornton China Center at the Brookings Institution in Washington, DC.
Geopolitics
Qin Gang
Xi Jinping
News
VW reports high sales growth in January
The Volkswagen Group recorded higher global sales figures at the start of the year. In January, VW delivered 698,200 passenger cars and commercial vehicles to customers, 13 percent more than a year earlier. The Wolfsburg-based car manufacturer announced this on Friday. The growth is exclusively attributable to China. Sales in Western Europe fell by three percent and by one percent in North America. In China, on the other hand, VW sold 290,900 vehicles in January, an increase of 43 percent.
However, the comparison is doubly distorted: In early 2023, Covid restrictions still weighed on China. Moreover, Chinese New Year fell on late January, whereas it is celebrated in February in 2024. During the New Year holidays, sales always drop sharply.
According to VW, the all-electric car business in particular grew more strongly in China than that of its competitors. The company sold 17,700 electric models in China in January, including 7,600 ID.3s alone. Worldwide, the Volkswagen brand recorded the highest growth of 18 percent to 382,900 vehicles, Audi grew by 13.2 percent and Porsche achieved an increase of 6.9 percent. rtr
Autoindustrie
Coastguard steps up patrols off Kinmen
Following the death of two alleged fishers, China has announced increased patrols off the Taiwanese island of Kinmen. According to the AP news agency, spokesman Gan Yu said that the coastguard in Fujian would regularly monitor the waters near the Chinese metropolis of Xiamen. The leadership in Beijing also announced further measures.
Kinmen Island is located just a few kilometers from the Chinese mainland. According to information from the Taiwanese coast guard, a Chinese vessel entered a restricted area without authorization on Wednesday. It capsized while fleeing from the coast guard and two of the four fishermen drowned, according to the Chinese account. The two other sailors are in Taiwanese custody. China emphasized that there is no such thing as restricted areas. flee
Militär
EU Commission opens investigation into Chinese railway company
The EU Commission is investigating the Chinese railway manufacturer CRRC Qingdao Sifang Locomotive. The aim is to find out whether it is undercutting European manufacturers with the help of state subsidies. On Friday, Internal Market Commissioner Thierry Breton announced an investigation into the Chinese state-owned China Railway Rolling Stock Corporation (CRRC) subsidiary. Specifically, the investigation concerns an order for 20 electric trains in Bulgaria. The investigation could result in CRRC Qingdao Sifang Locomotive not being awarded this contract.
The investigation is the first under the new EU Foreign Subsidies Regulation. According to the EU Commission, CRRC Qingdao Sifang Locomotive’s offer for the 20 trains is only about half as high as that of the Spanish company Talgo. Brussels claims this is only possible thanks to the company receiving subsidies of 1.75 billion euros from Beijing. The contract from the Bulgarian Ministry of Transport is worth an estimated 610 million euros. According to the Commission, it also includes maintenance over 15 years as well as staff training.
In accordance with the regulation that came into force last year, Bulgaria has forwarded the contract to Brussels on suspicion of state subsidies. The EU Commission has until July 2 to make a decision. “Ensuring that our EU Single Market is not distorted by foreign subsidies to the detriment of competitive firms that play fair is vital for our competitiveness and economic security,” Breton said on Friday. ari
The New Year travel wave rolls at pre-Covid level
China’s tourism industry reports surprisingly high revenue after the New Year celebrations. During the eight-day holiday, tourism revenue grew by 47 percent compared to the previous year and even exceeded the pre-pandemic figures of 2019. This is according to data from the Ministry of Culture and Tourism.
Domestic tourism spending rose to 632.7 billion yuan (82.5 billion euros) – almost eight percent more than in 2019. The Chinese also made more domestic trips – compared to last year, the number of trips increased by 34 percent to 474 million, 19 percent more than in 2019. The average spending per trip was also higher than in the previous year. Chinese only made fewer trips abroad – the number of inbound and outbound trips was slightly below that of 2019.
The New Year celebrations trigger the largest annual migration movement in the world, with tourist attractions across the country experiencing huge crowds. People travel across the country and back to visit their families. It remains to be seen how sustainable the brief tourism boom will be, as the general consumer mood remains poor. rtr
Tourismus
Tools
Hoping in vain for a relaxation of the data law
By Ondrej Zapletal and Rainer Burkardt
On September 28, 2023, the Cyberspace Administration of China (CAC) submitted the draft provisions on the regulation and promotion of cross-border data flows for public comment. It includes exemptions from the current strict regulation on the cross-border transfer of personal data.
The general requirements for the cross-border transfer of personal data are set out in the Personal Information Protection Law (PIPL). Article 38 of this law stipulates that data processors who transfer personal data to a recipient outside the People’s Republic of China must fulfill one of the following preconditions:
Pass a security assessment organized by the State Cyberspace Administration of China (“CAC”)
Pass a PI protection certification by a qualified institution in accordance with the provisions of the CAC
Conclude a contract with the overseas recipient according to the standard contract formulated by the CAC (“Standard Contract”).
The CAC safety assessment, the certification and the CAC standard contract are hereinafter referred to as the “Three preconditions”.
Many small and medium-sized enterprises (SMEs) in China that only transfer small quantities of personal data overseas, e.g. to their parent company, have problems fulfilling the three preconditions for the cross-border transfer of personal data. This is mainly because the implementation of the three requirements is time-consuming and costly and at the time of publication of this article there is a lack of practical experience.
With the draft’s publication, a sigh of relief went through the boardrooms of many foreign-invested SMEs in China, as their executives had expected considerable facilitation for their cross-border transfers of personal data.
Exceptions to the three preconditions
According to Art. 3 of the draft, the three preconditions for the “cross-border transfer of personal data not collected or generated in China” do not have to be met. This exception applies to personal data that is, for example, collected at the company’s headquarters in the EU, then provided to the subsidiary in China and finally transferred back to the EU by the Chinese subsidiary. In this case, the Chinese subsidiary would not have to fulfill any of the three conditions when transferring the data to the EU.
Art. 4 of the draft provides for three exceptions where the three preconditions for cross-border transfer of personal data do not apply:
Transfer of personal data abroad, if necessary for the conclusion or fulfillment of a contract in which the individual concerned is involved, such as in the case of purchase contracts, money transfers, flight and hotel reservations;
Necessary transfer of personal employee data for human resources management purposes in accordance with legal employment regulations and collective agreements; and
Necessary transfer of personal data in emergency situations to protect the life, health and property of natural persons.
In addition to the exemption under point 1, which could be used by, for example, trading platforms, travel agencies and financial service providers, the exemption under point 2 is of significant importance for HR departments of companies in China with overseas headquarters that transfer personal data of employees to their headquarters. However, it should be noted that the term “necessary,” which is a prerequisite for the three exemptions mentioned above, is neither defined nor further explained in the draft.
Another important exception to the three preconditions under Art. 38 PIPL can be found in Art. 5 of the draft, which stipulates that none of the three preconditions need to be met if data processors transfer less than 10,000 personal data across borders within a year.
Contradiction to the PIPL
However, according to the PIPL wording, the three preconditions apply without exception and regardless of the purpose or data volume, so that even in the case of the cross-border transfer of a single set of personal data, the data processor must fulfill one of the three preconditions before it is allowed to transfer it abroad. As a result, the exceptions in the draft contradict Art. 38 PIPL.
This raises the question of the legal consequences if the CAC adopts the draft with the current wording without “resolving” these contradictions.
If a subordinate regulation violates the provisions of a superior regulation, the competent authority must amend or repeal this subordinate regulation. Since the draft – issued by the CAC, an administrative organ under the State Council – is subordinate to the superior PIPL – which was enacted by the National People’s Congress – and conflicts with the PIPL, the draft, even if published in its current form, can be amended or repealed by the State Council.
Companies should waste no time
Given the contradictions between the draft and the PIPL, we assume that the draft will not be published in its current form. Since the PIPL has already been in force since November 1, 2021, there is no reason to wait for a relaxation that may not come. Instead, diligent business leaders should advance the implementation of one of the three preconditions and fulfill other obligations under the PIPL, such as conducting a data protection impact assessment (PIPIA), to ensure that their company’s cross-border transfers of personal data comply with PIPL preconditions. There is no time to lose!
EU-Handelskammer
Unternehmen
Executive Moves
Christiane Arsenault is the new Sustainability Project Manager at Porsche in Stuttgart after a long stay in China. She previously spent eleven and a half years in Beijing at Volkswagen Group China, most recently as Manager Corporate Strategy.
Robert Lothlorien has been Head of Product & Service at Pytes Energy in Shanghai since December. He was previously ESS Product Manager, also at Pytes.
Is something changing in your organization? Let us know at heads@table.media!
Dessert
The Chinese New Year celebrations traditionally do not end before the Lantern Festival on the 14th day. But for some people at least, job life slowly begins again. But there is still dancing: Here, people from the Miao ethnic group celebrate the Spring Festival at a dance performance in the community of Gandong in Rongshui Autonomous County.
