The Social Credit System Establishment Draft Law reiterates the focus of the Social Credit System on companies and their compliance performance. Nonetheless, the System also covers several other legal persons, most significantly individuals and government organs. The level of impact on individuals strongly depends on their profession.
Von Experts Table.Briefings
The draft of the “Social Credit System Establishment Law” confirms the key purpose of the Social Credit System: To achieve integrity and trustworthiness of market players. Across all players, companies are by far most affected. It is likely that significant time will pass until the Social Credit System Law itself will come into effect. However, all areas outlined by the draft law are already covered by legally effective rules and regulations. and impact companies with registered entities in China.
Von Experts Table.Briefings
While the geopolitical focus on China currently revolves around US-China tensions, semiconductors and Covid restrictions, China’s central bank has been silently pushing another project of potentially geopolitical significance. Since 2020, the People’s Bank of China (PBoC) has been conducting trials for a “Central Bank Digital Currency” (CBDC), experimenting with various e-CNY digital payment applications for restaurant, entertainment and public services. However, whether this centralized solution can aid China’s ambitions to influence international payment systems remains in question.
Von Experts Table.Briefings
The planned investment of COSCO in the “Tollerort” Terminal of Hamburg’s port has raised a multi-faceted discussion about Chinese investments in European infrastructure. One of the points of debate is the question of reciprocal opportunities for foreign investors to invest in Chinese terminal operation. Currently, at least 34 port terminals in China have one or more non-mainland investors.
Von Experts Table.Briefings
At the 20th Party Congress, China's President Xi Jinping expressed his strong focus on national security as the central objective of policymaking. Therefore, it is expected that national security issues will increasingly take precedence over growth in the country's future economic policy. This is also likely to affect foreign companies.
Von Experts Table.Briefings
Already in 2017, authorities like the Cyberspace Administration of China (CAC) and the Ministry of Industry and Information Technology (MIIT) jointly issued the first catalog of critical network and cybersecurity products. Companies that sell the products listed in this catalog need to obtain additional security certification or undergo testing. So far, however, mostly domestic companies underwent certification.
Von Experts Table.Briefings
China’s zero-Covid policy is criticized due to its unsustainability in maintaining normal social activities and the damage it causes to economic growth. However, at this point, the government faces a real dilemma regarding whether to relax Covid restrictions. The low vaccination rate among the elderly population plus an insufficient level of medical treatment capacity could translate into disastrous death rates if dropping the current covid measures. Therefore, it is highly improbable that existing covid restrictions will be removed in the short term.
Von Experts Table.Briefings
The underlying logic and pattern of opening and closing market segments in China is one of the most fundamental realities foreign companies are confronted with in the Chinese market. While in their respective detail all markets develop differently, the overarching pattern of industrial policy interventions has been applied to numerous industries in the past and present.
Von Experts Table.Briefings
Implementing active industrial policy measures has gained increasing traction in the European Union in recent years, at least to some degree contemplating approaches now that China has already employed and perfected for the past decades. One of the focal points of the industrial policy debate in the EU is battery production. A good occasion for taking a look at how China has played its industrial policy game some years ago.
Von Experts Table.Briefings
The Chinese economy is in a uniquely difficult situation. Chinese consumer confidence dropped sharply in recent months in parallel to the dramatic decline in GDP growth caused primarily by Zero Covid policies. Even if the Zero Covid measures are relaxed in the future, the damage to the Chinese economy is likely to have lasting effects.
Von Experts Table.Briefings
