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Great Wall Motors to Close European Headquarters

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that Chinese electric vehicle manufacturer Great Wall Motors will close its European headquarters in Munich, Germany. The company is facing dual pressures of slowing electric vehicle sales in the European market and uncertainty around EU policy. It also faces stiff price competition from other EV companies, some of which are offering large discounts to boost their car sales.

Great Wall Motors’ headquarters are expected to close at the end of August, with the company expected to hand off responsibility for European operations to a domestic department in China. Around 100 employees have received layoff notices so far. Employees to be laid off include Steffen Cost, head of Great Wall Motors’ European operations.

The closure of Great Wall Motors’ EU headquarters does not mean that the company will withdraw from the European market entirely. Sales business and after-sales services in the European market will still be handled by local dealers. Business units in China will conduct remote supervision and management. The previous market expansion plan, which include plans to enter eight new countries in Europe, will be suspended.

Great Wall Motors sold 1,621 units in the EU during the first four months of this year — the overall scale of the company’s market share is very small.

The EU has launched an investigation into possible Chinese government subsidy of Chinese electric vehicles; it may impose tariffs on Chinese EVs in the future. Recently, many Chinese car brands have planned to build factories in Europe to avoid the threat of tariffs.

Source: Sina, May 30, 2024
https://finance.sina.cn/2024-05-30/detail-inawyyru7266581.d.html?from=wap

Briefings | | |   Geo-Strategic Trend

Taiwanese President Responds to Forced Political Statements by Taiwanese Artists in China

{Below is a partial translation of an article by Voice of America (VOA) regarding a statement by Taiwanese President Lai Ching-te on the CCP’s coercion of artists into supporting unification of Taiwan with mainland China.}

After Taiwan’s newly elected President Lai Ching-te spoke about “mutual non-subordination across the Taiwan Strait” in his inauguration speech, the Chinese Communist Party (CCP) launched an exercise in military harassment. It also organized a round of propaganda campaigning, forcing Taiwanese artists to express on Chinese social media site Weibo that they support the CCP’s unification of Taiwan with mainland China and oppose Taiwanese independence. Many Taiwanese celebrities who are developing their careers in mainland China had to post content such as “Taiwan independence is a dead end” and “Taiwan will inevitably return (to the mainland).” Those who did not make such posts in time were named and shamed by the “fifty-cent army” or the Chinese public, facing the threat of the “iron fist of socialism.”

Facing this situation, Lai Ching-te made a rare public statement. He said that this was not the first time, and would likely not be the last time, that Taiwanese cultural workers have been forced to make political statements in China. He said that every time Taiwanese cultural workers face pressure under another’s roof, he feels very distressed. He expressed his hopes that the Taiwanese public would understand that what these cultural workers say under such circumstances is one thing and what they (really) think in their hearts is another thing. He said what they feel in their hearts is more important; they should be given understanding and empathy.

Lai Ching-te’s speech garnered praise from many mainland Chinese netizens who bypassed the firewall on the X platform and commented in simplified Chinese. Some said that the Taiwanese president’s statement immediately made them into fans, and some noted the stark contrast between democracy and autocracy. Some remarked that the current Taiwanese government not only has a high Emotional Quotient (EQ) but also high Intelligence Quotient (IQ), making Beijing’s actions look petty in comparison. Some even praised Lai Ching-te’s move as a masterstroke, leaving the CCP unable to respond.

Source: VOA, May 26, 2024
https://www.voachinese.com/a/china-pressuring-taiwanese-entertainers-into-making-political-statements-20240526/7627359.html

Briefings | | |   Geo-Strategic Trend Government/Politics

Chinese Author: Foxconn’s Departure Greatly Impacts Henan Province

An article posted on Chinese social media portal QQ warned that Foxconn’s departure from China has caused big economic damage to Zhengzhou and Henan, its hosting city and province. Foxconn is headquartered in Taiwan.

Located in Zhengzhou, Henan Province, Foxconn is a major Original Equipment Manufacturer (OEM) for Apple phones. It is Henan’s largest export enterprise. Foxconn has been cutting back on production and exports since 2023. In 2023, Henan province’s phone export decreased by 14.5 percent to 57.61 million units. In the first quarter of 2024, it dropped to only 6.64 million, from the 16.88 million in the same period a year ago.

Foxconn is the backbone of Henan’s economy. In 2023, the import and export volume at the Zhengzhou economic zone, where Foxconn is located, was 407.3 billion yuan (US$ 56.13 billion), accounting for 74 percent of Zhengzhou’s imports and exports and 50.3 percent of Henan’s imports and exports. In the first quarter of this year, Foxconn’s imports and exports decreased by 44.1 percent, dragging down Henan’s foreign trade growth by 23.5 percent.

Since Foxconn came to Zhengzhou in 2010, over 200 upstream and downstream supporting enterprises have followed suit and settled in Henan. Henan’s electronic industry quickly scaled up, and the overall scale of Zhengzhou’s electronic industry grew 25 times. Take Zhengzhou Airport Economic Zone as an example. The GDP of Zhengzhou Airport Economic Zone was only 20.6 billion yuan in 2010. It reached 117.2 billion yuan by 2021. At its peak, Foxconn contributed up to 25% to Zhengzhou’s GDP.

Undoubtedly, Foxconn’s departure will have a major economic impact on Henan. A logic solution is to bring in alternative industries, such as the booming electric vehicle (EV). However, can the EV industry replace everything? With common sense, people know that, no matter how large the EV industry becomes or how promising its future is, it absolutely cannot replace the real estate industry and the mobile phone industry simultaneously.

Source: QQ, May 20, 2024
https://new.qq.com/rain/a/20240520A03Y7H00

Briefings | | |   Economy/Resources Geo-Strategic Trend

Xinhua: China Launches Anti-Dumping Investigation Into Chemical Products From The West

Xinhua recently reported that the Chinese Ministry of Commerce has announced an anti-dumping investigation into imports of copolymer polyoxymethylene originating from the European Union, the United States, Taiwan and Japan. Chinese manufacturers in the copolymer polyoxymethylene industry have officially submitted an anti-dumping investigation application.

According to Xinhua, copolymer polyoxymethylene has good comprehensive mechanical characteristics such as high mechanical strength, fatigue resistance, and creep resistance. It can partially replace metal materials such as copper, zinc, tin, and lead. It can either be used directly or after modification, with applications in auto parts, electronic appliances, industrial machinery, daily necessities, sports equipment, medical equipment, pipe fittings, construction materials and other fields.

Deutsche Welle (DW) Chinese Edition reported that the Chinese anti-dumping investigation will last for one year and might be extended for another 6 months after that “under special circumstances.” Industry analysts expressed the belief that this Chinese government’s investigation is a countermeasure against Western countries’ recent intensification of crackdowns on Chinese electric vehicles and other products. China’s polyformaldehyde production capacity is 590,000 tons/year. Most of this capacity is low-end output. In recent years, China has typically needed to import over 300,000 tons of polyformaldehyde annually, with a large portion of imports being used in the high value-added auto parts industry as well as the high-end electronic and electrical industries.

Sources:
(1) Xinhua, May 19, 2024
http://www.xinhuanet.com/fortune/20240519/7a3f2ddecc404265b18569cb1e0ed119/c.html

(2) DW Chinese, May 19, 2024
https://p.dw.com/p/4g2r7

Briefings | | |   Geo-Strategic Trend

Exiled Writer Yuan Hongbing Reveals Chinese United Front Strategy Targeting Taiwan’s Legislature

In February, exiled Chinese writer Yuan Hongbing revealed that China aims to use the Kuomintang’s (KMT’s) influence in Taiwan’s legislature to advance its united front strategy, sparking a political storm. Yuan stated in an interview that the information came from a “princeling” (child of a Chinese revolutionary leader) whom Xi Jinping does not dare to challenge. The Chinese Communist Party (CCP) wants to turn the KMT into the vanguard force of the People’s Liberation Army to achieve unification of Taiwan with mainland China from within.

According to Yuan’s analysis, the CCP is not just using military intimidation to destabilize Taiwan; it is also using propaganda, deployment of agents, and expansion of the KMT’s legislative power to override the Taiwanese administration. Yuan said that the CCP wants the KMT to pave the way for Xi Jinping to fully occupy Taiwan, and that the recent military drills are aimed at supporting the CCP’s agents in Taiwan.

While some members of Taiwan’s Democratic Progressive Party may have been co-opted by Beijing, Yuan said that the party as a whole rejects CCP influence. This stands in contrast to the political attitude of the pro-China KMT party.

Yuan stated that the CCP’s Taiwan policy has shifted from coercion and enticement to psychological warfare, aiming to demoralize Taiwanese. He praised the peaceful protests outside the of Taiwan’s Legislature as social forces advocating for self-defense that could resist Beijing’s intimidation.

Yuan, a former Beijing University law professor, was exiled from China for supporting the 1989 pro-democracy movement.

Source: Central News Agency (Taiwan), May 24, 2024
https://www.cna.com.tw/news/acn/202405240174.aspx

Briefings | | |   Geo-Strategic Trend

Lianhe Zaobao: China Considers Raising Tariffs on U.S. and European Cars

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, according to the European Chamber of Commerce in China, China may be considering raising temporary tariffs on imported cars from the United States and the European Union to up to 25 percent. This potential move would have implications for European and U.S. automakers. This news comes after the Biden administration increased tariffs on Chinese electric vehicles to 100 percent, and the EU is investigating the unfair advantages that Chinese automakers receive due to government subsidies.

Liu Bin, chief expert at the China Automotive Technology and Research Center, said in an interview that, according to World Trade Organization rules, China’s temporary tariff rate on imported cars can be raised to a maximum of 25 percent. The Chinese government tariff adjustments may cover imported gasoline cars and sports utility vehicles with engine displacements greater than 2.5 liters.

Amid price wars and a slowdown in China’s domestic economy, Chinese EV makers are expanding overseas, prompting accusations from the U.S. and EU countries that China is exporting excess EV production capacity. China’s auto exports have also raised Western concerns regarding the cybersecurity of China’s high-tech cars. In 2023, China imported 250,000 cars with engine displacements greater than 2.5 liters, accounting for approximately 32 percent of all imported cars. By comparison, China exported 1.55 million electric vehicles last year, according to Chinese customs data.

Source: Lianhe Zaobao, May 22, 2024
https://www.kzaobao.com/cngov/2024-05/22162313.html

Briefings | | |   Geo-Strategic Trend

Guangming Daily: The Importance of Training Legal Talents in Foreign Security Law

Chinese newspaper Guangming Daily recently published an article on the importance of training Chinese talent in foreign security law. The below is a partial translation of the article.

Foreign security (the security in other countries of the assets of a nation or of that nation’s companies) plays a vital role in [China’s] overall national security framework. With the increasing frequency of Chinese enterprises investing overseas, China possesses more and more assets abroad. Facing the turbulent international situation, we need to use legal tools to protect our country’s overseas interests. At the same time, certain Western countries have frequently imposed sanctions and caused interference, strengthened “export controls,” and promoted “decoupling” through a series of bills related to Taiwan, Hong Kong, and Xinjiang. This has challenged the bottom line of our national security and sovereignty.

Thus, the training of legal talents in foreign security law is critical.

Regarding the content of training, we need to enhance the ability to apply international rules. Through globalized curriculum teaching, academic exchanges abroad, etc., students should develop an international perspective and global strategic thinking. They should enhance their ability to propose valuable countermeasure suggestions regarding global security issues and foreign security affairs. We need to get our foreign security legal talents to actively participate in global governance as well as in the formulation of international rules via international organizations.

Regarding the training path, on the one hand, we need to cooperate on joint practical education platforms with international organizations, overseas institutions and companies, multinational corporations, foreign law firms, arbitration institutions, etc. We need to jointly develop core courses, and compile high-quality teaching materials. On the other hand, we need to accelerate the “bringing-in” of top-notch faculty from overseas and at the same time create opportunities to send more of our outstanding students abroad.

Source: Guangming Daily, May 11, 2024
https://news.gmw.cn/2024-05/11/content_37315947.htm

Briefings | | |   Economy/Resources Geo-Strategic Trend

China to Boost Zimbabwe’s Railway, Targeting Commodities Export Capacity

Sputnik News reported that Zimbabwe plans to modernize its state-owned railways with China’s experience and financial support. Before the end of June, both sides will assess the railway transportation needs and reach a consensus on the engineering workload required for reconstruction. China Railway recently signed an MOU with Zimbabwe to conduct a feasibility study on the project within this timeframe.

China’s assistance will bring Zimbabwe increased opportunities to enter the global commodity market, and infrastructure cooperation between China and Zimbabwe will undoubtedly have an impact on the economies of other African countries as well.

Zimbabwe estimates that the total railway reconstruction cost will be around $533 million, and it hopes to receive funding support from China. Zimbabwe has been unable to borrow from multilateral lending institutions due to its over 20 years of debt; the country’s external debt had reached $12.7 billion by September 2023. China recently wrote off Zimbabwe’s interest-free loans but did not disclose the amount, while still promising to help Zimbabwe find a way out of its long-standing debt crisis.

According to experts cited by Sputnik News, modernizing Zimbabwe’s railways will create favorable conditions for exporting Zimbabwe’s abundant lithium, coal, chrome, granite and other resources to world markets by enhancing the carrying capacity and speed of the nearest ports on the Atlantic and Indian Oceans. The planned joint project “is an extremely reasonable and forward-looking move within the framework of China’s ‘railway diplomacy.'”

The project is expected to facilitate China-Zimbabwe mineral resource cooperation and bilateral trade. With improved infrastructure and logistics efficiency, it will attract more Chinese investment in Zimbabwe across various sectors and promote higher-quality Belt and Road cooperation between the two countries.

Source: Sputnik News, May 21, 2024
https://sputniknews.cn/20240521/1059242414.html

Briefings | | |   Geo-Strategic Trend