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Germany’s Dilemma: Chinese Wind Turbines in Sensitive Energy Sector

A recent Deutsche Welle article discussed concerns over Chinese companies’ involvement in sensitive infrastructure projects in Germany, particularly in the telecommunications and energy sectors. The article noted the difficulty Germans face in determining how much influence Beijing has over any given Chinese company, leading to apprehension around cooperation with such companies. The German government recently announced plans to phase out use of Huawei and ZTE components from the country’s core 5G network by 2026, citing national security concerns.

The Deutsche Welle article mentions the controversial plan by German investment company Luxcara to commission an offshore wind farm in Germany to be built by Chinese firm Ming Yang. The plan has sparked debate within Germany because energy supply is considered a sensitive sector. Wind power is becoming increasingly important in Germany’s energy mix, accounting for 38.5% of total electricity generation in the first quarter of 2024.

European suppliers cannot meet the current high demand for wind turbines, leading some German operators to consider Chinese partners. One of Luxcara’s reasons for choosing Ming Yang is the firm’s promised ability to provide high-powered turbines for the project by 2028.

The Deutsche Welle piece discusses concerns about data security as well as the competitive advantage that Chinese companies gain through government subsidies, noting that 99% of Chinese “new energy” companies received direct government subsidies in 2022.

Some argue that Chinese products are necessary for Germany’s green energy transition due to their affordability and availability, despite the associated risks.

Source: Deutsche Welle, July 30, 2024
https://p.dw.com/p/4ivFE

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Beijing Gives Ukrainian Foreign Minister Cold Reception

Ukraine’s Foreign Minister Dmytro Kuleba visited China recently, marking the first visit by a high-level Ukrainian official since the Russia-Ukraine war. BBC Chinese reported, according to several scholars, Kuleba’s itinerary reflected China’s cold attitude toward Ukraine. The scholars noted that the talks held with Kuleba yielded no substantial results and that they enabled the Chinese government to gather information in advance of the U.S. Presidential elections in November.

It seemed that China didn’t allow Kuleba to go visit Beijing. There was no official disclosure on the time and place of Kuleba’s arrival in China on July 23. On the day after Kuleba’s arrival there was an official announcement from Beijing saying that he would meet with Wang Yi in the southern city of Guangzhou. On July 25, Kuleba appeared in Hong Kong to meet with Hong Kong Chief Executive John Lee. He left China on July 26. Throughout the trip, there was no indication that he had been to Beijing. In China’s diplomatic tradition, this kind of arrangement is rarely coincidental. The government might intentionally arrange meetings to be held outside of Beijing so as to symbolically lower the level of the meetings. Beijing may also want to avoid direct comparisons between China and Ukraine. China’s treatment of Kuleba contrasted with that of Russian Foreign Minister Sergei Lavrov, who visited Beijing for two days in April, met with China’s Foreign Minister Wang Yi, and was received by Xi Jinping at China’s Great Hall of the People.

Kuleba’s Hong Kong visit was also intriguing. The Ukrainian Ministry of Foreign Affairs released detailed reports and photos of Kuleba meeting with Hong Kong’s chief executive John Lee, where Kuleba urged Hong Kong not to support Russia’s evasion of sanctions. The Hong Kong government did not mention the meeting until it was pressed to do so by the media. The BBC noted that John Lee would not be able to deliver support for Ukraine even if asked, as it is Zhongnanhai and not John Lee who makes such decisions.

At the same time as Kuleba’s visit, China hosted representatives of 14 Palestinian factions, including Fatah and Hamas, in Beijing and brokered their signature of a “Beijing Declaration on Ending Division and Enhancing Palestinian National Unity” on July 23. Wang Yi attended the closing ceremony following the signing of the declaration. After talking with Kuleba in Guangzhou, Wang Yi went to Laos on the next day (July 25) to attend the ASEAN Foreign Ministers’ Meeting and to meet with Russian Foreign Minister Lavrov.

Source: BBC, July 29, 2024
https://www.bbc.com/zhongwen/simp/world-69219882

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Beijing Further Boosts Rare Earth Metal Production with Quotas, Hurts Producers’ Bottom Line

On June 29, China announced “Rare Earth Management Regulations” which stipulate comprehensive state supervision and control over the production and sales of rare earth products. China is currently the world’s leading manufacturer of rare earth metals, holding about 70 percent of the global reserves.

Beijing issued a production quota for Chinese companies – 135,000 tons in the first half of 2024, a 12.5 percent year-on-year increase. Market demand for rare earths did not go up as Beijing expected, however, and price dropped dramatically as a result of the government-mandated increase in rare earth production. The rare earth price index published by the China Rare Earth Industry Association on July 18 dropped by about 20 percent compared to late July 2023.

As a result of oversupply in the rare earth markets, all major Chinese rare earth producers saw significant declines in their profits, in the first quarter of this year. Northern Rare Earth’s net profit fell by 94 percent year-on-year, China Rare Earth reported a loss of approximately 289 million yuan (US$ 40 million), Guangdong Rising Nonferrous Metals a loss of 304 million yuan, and Shenghe Resources a loss of 216 million yuan.

Nikkei Asia pointed out that, in recent years, the CCP has continuously increased the production quotas for rare earth metals. In 2023, Beijing increased the quotas threefold, bringing the annual total to 255,000 tons, a 21 percent increase compared to 2022. Many believe this year’s quotas will go even higher. It seems that Beijing wants to use such increasing quotes to maintain its dominant position in rare earth production and export volume so that it can use rare earths as a bargaining chip in diplomatic negotiations.

Meanwhile, other countries are trying to reduce the reliance on China’s production of rare earths. The United States has expanded domestic rare earth production, and many countries have intensified local efforts to identify domestic rare earth deposits.

Source: Epoch Times, July 19, 2024
https://www.epochtimes.com/gb/24/7/19/n14293824.htm

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Malaysia Applies to Join BRICS, China Responds With Open Arms

On July 28, the Malaysian Prime Minister’s Office issued a statement announcing that Malaysia has submitted a letter to Russia, the current chair of the BRICS nations, applying to join the BRICS cooperation mechanism. Lin Jian, Chinese Foreign Ministry spokesperson, stated at a regular press conference that “China welcomes more like-minded partners to participate in cooperation with BRICS, jointly promoting the development of the international order in a more just and reasonable direction.”

Source: China Youth Daily, July 29, 2024
http://m.cyol.com/gb/articles/2024-07/29/content_wdpQgohRMA.html

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Nikkei Chinese: Honda Scales Back in China

Nikkei Chinese Edition recently reported that Honda plans to cut 30 percent of gasoline vehicle production capacity in China, the world’s largest auto market. The company will reduce capacity by about 500,000 vehicles, equivalent to 10 percent of Honda’s global production, through plant closures and other measures.

In China, there is currently an excess supply capacity as production capacity by domestic automobile companies has expanded faster than demand. Moreover, there has been a large flow of very low-priced Chinese into the Southeast Asian market, where Japan has an advantage; sales competition has become increasingly fierce.

Honda had been increasing its investment in China since the 1990s. China thus became Honda’s its largest production base worldwide. Now, Japanese automakers have reached a turning point in their confrontation with China over dumping of low-priced cars, and Honda is reducing its scale in China for the first time.

According to Nikkei, all Japanese automakers and suppliers have followed the trend of “adjusting” their businesses in China. Nissan closed its gasoline vehicle plant in Jiangsu Province in June, reducing annual production capacity in China by 10 percent, with further closures of factories under consideration. Hino Motors is exiting its engine production business in China. Meanwhile, Nippon Steel is also planning a significant reduction in its production capacity within China.

Source: Nikkei Chinese, July 25, 2024
https://cn.nikkei.com/industry/icar/56235-2024-07-25-09-31-44.html

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Vietnam Proposes South China Sea Continental Shelf Delimitation to UN

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, according to the Ministry of Foreign Affairs of Vietnam, Vietnam has submitted a proposal to the United Nations Commission regarding delimitation of territory within the South China Sea, proposing use of suboceanic continental shelf limits as the delimitation.

The Chinese Ministry of Foreign Affairs Spokesperson said in a press conference that “Vietnam submitted the proposal to the UN Commission unilaterally,” and “its relevant claims cover parts of China’s Nansha Islands and infringe on China’s territorial sovereignty and maritime rights and interests. China firmly opposes this move and has lodged stern representations with Vietnam. According to the rules of the UN Commission on Limits of Continental Shelf, if there is a dispute, then no consideration will be given. So the UN Commission will not review or determine the cases filed by Vietnam. Such actions are in fact meaningless and will only intensify conflicts.”

In the meantime, Vietnam also submitted a note of objection to the United Nations in response to the Philippines’ submission on the outer continental shelf delimitation of the South China Sea. China has also opposed the Philippines’ proposal.

Source: Sina, July 18, 2024
https://finance.sina.com.cn/jjxw/2024-07-18/doc-incepxfy8687524.shtml

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Lianhe Zaobao: Malaysia and Thailand Apply to Join BRICS

Singapore’s primary Chinese language newspaper Lianhe Zaobao reported that Malaysia and Thailand have recently expressed interest in joining the BRICS group of nations, led by Russia and China.

Last month, the Malaysian government stated that it would start the application process to join BRICS. Since the other BRICS members are very different from Malaysia, the Malaysian government’s decision to apply to join BRICS has led to heated debate among Malaysia’s political parties, with some questioning whether joining the BRICS would bring meaningful benefits to the country. Malaysia’s Prime Minister later stated to Congress that the primary benefit of joining BRICS would be expansion of Malaysia’s economic and trade network.

Thailand formally submitted its application to join BRICS last month. It is worth noting that Thailand is also in the process of applying to join the Organization for Economic Cooperation and Development (OECD) led by the United States and European countries.

In addition to Malaysia and Thailand, Indonesia and Vietnam are also considering joining BRICS.

BRICS is a cooperation mechanism established by Brazil, Russia, India and China in 2009. South Africa joined the group in April 2011. In January this year, the BRICS expanded to include Egypt, Iran, the United Arab Emirates and Ethiopia. There are more than 40 other countries who also intend to join.

Source: Lianhe Zaobao, July 25, 2024
https://www.zaobao.com.sg/news/sea/story20240725-4360331

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CCP Attempts to Recruit Taiwanese Internet Celebrities to Produce “Cross-Strait Unification” Propaganda

Recently there has been a heated discussion in Taiwan about the Chinese Communist Party (CCP) targeting Taiwan’s Internet celebrities so as to influence Taiwan youth and politics.

A well-known Taiwanese internet celebrity with millions of followers, “Porter King,” stated that the “Cross-Strait Youth Association of China” will sponsor 10 groups of Taiwanese Internet celebrities for free trips to mainland China this summer to film videos. Taiwanese artist Ho Yi-chi mentioned that she received an invitation from a Beijing-based film production company last week to participate in a short film project, and that the project was related to politics. The “Beijing Ciguang Film and Media Company” proposed a bold plan to “construct a new type of cross-strait relationship” by preparing to invite Taiwanese artists and internet celebrities to “form a party and participate in Taiwanese elections.” It plans to establish the “Taiwan Harmony Party (台湾拥和党).” The plan is to hold an inaugural meeting in Taipei in July 2024, with the goal of participating in the 2026 local and mayoral elections in Taiwan by leveraging the high popularity of these internet celebrities and artists. Their minimum goal is to win one mayor and ten councilors.

In February this year, the Financial Times reported that the CCP’s United Front Work Department began hosting Taiwanese youth for trips to mainland China, hoping they would start producing short videos for TikTok and YouTube. The goal was to “foster patriotism” among Taiwanese youth (loyal to mainland China) and to “encourage them to join efforts to promote cross-strait unification.”

On June 18, Taiwan Premier Su Tseng-chang said that, more so than military and economic threats posed by mainland China, “the biggest threat is cultural invasion.” He expressed his “hope that the public will strengthen their inner defenses.” He emphasized that “the government certainly respects freedom of speech and internet autonomy, but it is absolutely necessary to issue very clear warnings when appropriate.”

Source: BBC, June 20, 2024
https://www.bbc.com/zhongwen/simp/chinese-news-69131401

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