Weblog with daily updates of the news on a frugal, fair and beautiful China, from the perspective of internet entrepreneur, new media advisor and president of the China Speakers Bureau Fons Tuinstra
Business analyst Shaun Rein, author of The Split: Finding the Opportunities in China’s Economy in the New World Order, dives into the future of EU-China relations, as Trump is getting settle for his second term as US president. He discusses the currently hostile relationship between some of the EU leaders and how the European continent can move ahead with a better relationship with China, more independent from the United States, he tells Volker Friedrich.
Beijing will avoid escalation of its dispute with the European Union over tariffs on its electric vehicles, industry watchers said, a day after China again approached the World Trade Organization for resolution.
China’s commerce ministry said Monday that it had filed an additional appeal with the WTO over the EU’s tariffs on its EVs, as bilateral talks have yet to lead to a breakthrough.
The move is “a warning shot against Europe to show that it [China] is strong but won’t go too far,” Shaun Rein, managing director of China Market Research told CNBC, who expects China’s response to be “measured” as it seeks closer economic relations with Europe amid intensifying tensions with the U.S.
Since the tariffs came into effect last Wednesday, both sides have explored the possibility of setting minimum price commitments from Chinese car producers, as an alternative to the tariffs. The EU reportedly accounted for more than 40% of Chinese EV exports in 2023.
China is following the European Union’s GDPR in trying to regulate the unruly data industry, says Winston Ma, Winston Ma, adjunct professor at the New York University School of Law at CNBC. China’s internet companies based for years their business models on consumers’ lack of awareness of privacy, he adds, but those days are over.
“After years of Chinese internet companies building business models around Chinese people’s lack of awareness about privacy, users are becoming more knowledgeable, and they are becoming angry with companies abusing their personal information,” Winston Ma, adjunct professor at the New York University School of Law, told CNBC via email.
Fuelled by a desire to keep up with the US and China, traditionally passive sovereign wealth funds are increasingly deploying capital into strategic development areas like infrastructure, communications and more recently the digital economy according to global investment manager and academic Winston Ma.
No longer mere “stabilizers of capital markets”, the sovereign wealth funds of the world – which control around US$30 trillion in funds – are building internal teams and becoming more “active and direct” in their investment style, Ma explained on a recent Investment Magazine Market Narratives podcast.
Part of the reason is to save money, he said, by eschewing external management teams.
A larger purpose, however, is because these funds serve as domestic economic promotion agencies that drive strategic development agendas linked to sectors like infrastructure, telecommunications and increasingly, the digital economy.
“All countries are looking to sovereign funds as a policy tool to promote domestic research and development in order to stay as a relevant information centre besides China and the US,” Ma explained. “For Europe, Japan and places like India they need to think about how they can stay competitive in these digital revolution competitions.”
Many countries and regions are now setting up specific sovereign wealth funds tied to singular strategic objectives, he explained. The EU is looking to set up a €100 billion to finance European tech “champions” competing with alibaba and facebook, for example, while Japan is reported to have set up a 6G research fund, Ma said.
“That’s not a typo,” he added. “They’re already thinking ahead. If they’re late to the 5G competition they want to get ahead on the 6G.”
The EU competition commissioner Margrethe Vestager banned the merger of European rail giants Alstom and Siemens. They presented the merger as the way to stop competition from China. China expert Harry Broadman commends Vestager for her much-debated ban as, Broadman argues, size is not the way to fight Chinese companies. Innovation is, he writes in Gulf News.
Harry Broadman:
At first glance, the proposed merger between Germany’s Siemens and France’s Alstom to fight off the future intrusion of the giant state-owned Chinese rail industry into the European Union market might appear to be in the public interest. After all, what better way to combat size than to scale up.
The EU Competition Commissioner, Margrethe Vestager, had the wisdom — if not the courage — to make the correct call in blocking Siemen’s acquisition of Alstom.
While competing against firms from China is becoming tough going in virtually every sector across the globe — in large part because Chinese enterprises can get away by not having to play by the same rules as most businesses of other nationalities — sound public policy must be based on deftly balancing the welfare of a country’s consumers, workers, and businesses.
The fact is that businesses and the governments of the countries in which they operate need more innovative strategies to compete effectively with the Chinese — or anyone else — than simply increasing scale. Ask any Chinese boss of a lumbering state-owned-enterprise (SOE) he or she runs if they wish they had more agility to enhance their firm’s competitiveness against rivals.
Don’t be surprised if the answer is a resounding “yes”.
Indeed, for Siemens and Alstom the answer won’t be scale. That’s looking through the wrong end of a telescope.
RSM professor Zhang Ying discusses China's relations with the EU and the US, after the election of Donald Trump as their president. China is becoming part of the world, says Zhang, and whoever is elected, those relationships will prevail.
