“There is a huge gap between what people in Germany are saying about China and what they are really thinking,” said Bernhard Bartsch of the Bertelsmann Foundation, a German research group…..
….A survey late last year from the German Chamber of Commerce in China showed that for the first time in many years, more than half of its members were not planning investments in new locations in China. Nearly 13 percent of German firms operating in China said they could leave within the next two years…..
….. For decades, Germany’s approach to China could be summed up with the motto “Wandel durch Handel” (change through trade).
Now that strategy is in tatters and government officials joke darkly that the “win-win” relationship has a new meaning: China wins twice. [Link]
(2) 1140 economists have sent a letter to Trump linking his trade battles with China with the potential for a ‘Great Depression’. Several well-known economists are not part of this rigmarole. Good for them. The letter is here and the current list of signatories is here.
There are many things in the world that economists scarcely understand and even more things that they do not know that they do not know…
For example, this is wrong:
But if you look opinion polls, the [anti-free trade] message is not being driven by public opinion. This is not a grassroots movement against imports or Nafta. This is being driven from the top. [Link]
This is simply not true. I had blogged on the Harvard-Harris poll findings here. It is evident that the sentiments are as much ‘bottom-up’ as they are ‘top down’, if not more. Indeed, the former may be guiding the latter.
To understand what they are up against and what they are dealing with, these 1140 economists simply have to ask themselves as to why even 11 economists in China cannot sign a letter to their President about their trade policies, leverage or anything else that he does or does not do.
(3) Chinese consulate in French Polynesia refuses to vacate its premises
(4) A new report sounds alarm bells over the extent to which China has penetrated the technology supply chain, and calls on the U.S. government and industry to develop a comprehensive strategy for securing their technology and products from foreign sabotage and espionage.
These products could be modified to fail or perform at below expectations, facilitate espionage or compromise U.S. federal and private sector networks. Software supply chain attacks could become more common as the nation collectively moves towards 5G wireless networks and connected devices become more common…..
….At the same time, Bejiing has moved to prevent other countries from using similar strategies to crack the Chinese market, accelerating indigenous production of IT and communications parts and requiring outside businesses to turn over their source code store data on Chinese servers and allow the government to conduct security audits on their products before gaining access to the Chinese market. [Link]
(5) A very well written and important research piece on China’s interference and influence-building:
Interference is a better word to use when describing the CCP’s objectionable activities for at least two reasons. First, interference “describes crossing boundaries established by law and disrupting the normal flow of political or social activity.”4 It is disruptive. Second, the CCP claims to have nothing to do with interference in other countries’ domestic affairs…..
Interference also leads to another important point: what the CCP is doing is not soft power….
Articles Two and Three of the law state:
“National security refers to the relative absence of international or domestic threats to the state’s power to govern, sovereignty, unity and territorial integrity, the welfare of the people, sustainable economic and social development, and other major national interests, and the ability to ensure a continued state of security….
…..This unlimited view pushes the CCP toward preempting threats and preventing their emergence.
This bit below reminds us of the ‘advertorial‘ in FT recently:
…. A second part of shaping the context is relationship building and the manipulation of access to encourage cooperation with the CCP and to help choose which voices speak with authority about China. [Link]