China Direct

Sino-German Government Consulations 2023 - MERICS

he seventh Sino-German government consultations will take place in Berlin on June 20, China's new Premier Li Qiang and other ministers will be traveling to Germany. The talks will focus on the potential for cooperation on climate and sustainability, but also on issues of technology cooperation. Difficult topics such as human rights or China's positioning in the Ukraine war could be hitched on to the above topics.

Read the assessments of our experts in our MERICS Quick Take.
 

MERICS Executive Director Mikko Huotari:

"For China, the meeting is the message: Beijing wants to show that the dialogue with one of its most important trading partners is still on. For Germany, it is important to maintain communication channels, even in challenging times. It is in Germany's interest not to let geopolitical tensions with China escalate. When Olaf Scholz visited China last year, both sides agreed on intensifying cooperation on issues such as sustainability and global health. It is time to finally be more concrete here.

The German government's balancing act is becoming more difficult, not least because there is great uncertainty about China's course. At the same time, tensions within the coalition regarding China have subsided for now, but there may be trouble ahead with Brussels vis-à-vis key China topics of economic security, 5G networks or trade protection instruments in the automotive sector."
 

Bernhard Bartsch, Director External Relations at MERICS and editor of a new study on China's future development:

"Xi Jinping's 'reawakened China' is different: in the first ten years of his tenure, he departed from fundamental principles of the reform era. Our baseline scenario for the future is a 'Shaky China' which is prone to crisis. Even more extreme and confrontational scenarios are conceivable. Trends that emerged during Xi's first two terms might be reinforced: slower growth, greater external pressure and increasing central control. A return to a reform-minded and open China is unlikely under Xi. Politicians and business leaders in Germany and Europe must prepare for this."
 

Katja Drinhausen, Head of Program Politics and Society at MERICS:

“China has, time and again, called on Germany to prioritize pragmatism and not to politicize cooperation. This is a call to exclude unwanted topics, such as human rights, and avoid harming China's interests. Beijing is also countering the de-risking agenda by stressing that China does not pose a risk; rather, not cooperating would be the real risk. However, there is a long list of justified concerns on the German side – the Chinese side must acknowledge and deal with these. There is interest to cooperate on global problems and climate policy issues, but Germany is unlikely to fulfill Beijing's demands.
 

Gregor Sebastian, Economics Analyst at MERICS, sees a shift in Sino-German economic relations: 

"China still needs German technology in many areas, but the balance is shifting. Beijing's industrial policy and huge domestic market are turning Chinese companies into global competitors for German firms. China is particularly strong in green tech such as e-vehicles, heat pumps and wind power. Germany’s economy could benefit from cooperation in areas such as batteries, where China seems well ahead, but such cooperation could run counter to the de-risking agenda. With regard to Brussels’ recent moves to strengthen trade defense instruments, China may seek Berlin's support in trying to maintain free trade between China and the EU."

For media requests please contact Claudia Wessling ([email protected]) or Christine Krüger ([email protected]). 

Zheng Zeguang - new Chinese Ambassador to the UK - A briefing

Please find some background and a short briefing on His Excellency Ambassador ZHENG ZEGUANG, the newly appointed Chinese Ambassador to the UK.

China Direct would like to thank ASIA HOUSE for this article.

China's Q2 GDP Figures - an analysis

Dear CBI Members and Partners,

Please find a brief assessment of China's Q2 GDP figures below:

Download (7) 16 2020 - China Q2 GDP

CHINA DIRECT would like to thank Joe Cash, its CBI BJ Policy Analyst, for the summary.

Mastercard wins China market payments approval

 

CBI member, Mastercard has announced that it has secured Chinese government approval to enter the country’s electronic payments market.

In a statement on Tuesday evening, China’s central bank and banking regulator said that Mastercard’s application to launch a joint venture with a local company had been approved.

Mastercard will enter into a joint venture with the Chinese Central Bank affiliated Netsunion Clearing Corporation, and begin bankcard clearing services.

Netsunion was established in 2017, and all third-party payment services involving bank accounts must go through its platforms, cutting out the possibility for direct clearing between the banks and service providers.

Mastercard president and CEO, Ajay Banga said: “Mastercard are delighted and encouraged by this latest decision from the PBOC. […] China is a vital market for us, and we have reiterated to unwavering commitment to helping to drive a safer, more inclusive and seamless payments ecosystem for Chinese consumers and businesses. We remain focussed on working with the Chinese government and local partners to grow the overall payments infrastructure.”

The approval comes three weeks after the signing of the US-China Phase One Trade Deal, which included wording on accelerating approvals for US card companies looking to enter the China market. Under the terms of the agreement, China said it would formally rule on US card companies’ applications within one month of their submission. Mastercard, along with Visa and American Express are cited specifically in the text of the agreement.

Mastercard said in a statement that it will: “Be able to apply to the People’s Bank of China for formal approval to begin domestic bank card clearing activity” within a year.

 

Honda drives record 2019 China Auto growth

 

CBI member, Honda has reported that the company experienced record sales in China in 2019.

Honda, with its two joint venture partners, China-GAC and Dongfeng Motors, sold 1.55 million cars into the country last year, and has announced that it will expand its product line up in China in response.

The company has said that it has made good progress in the development of two electric sport hybrid vehicles for the China market, the Honda VE-1 and the Honda X-NV - both of which will both displayed at the Beijing Motor Show in April - and also has plans to launch a plug-in hybrid system named Sport Hybrid e+ this year. The company is also accelerating the development of its core connectivity system for smart cars, Honda Connect, to provide better intelligence services for Chinese customers.

Honda hopes to increase production in China to 1.37 million, and has announced subsequent plans to double its production capacity in Guangzhou by adding an extra 240,000 units, increasing capacity to 720,000.

Mizuno Yasuhide, COO regional operations, Honda China said: “Honda has always strived to expand the joy of mobility and daily lives for our customers by realising a fun and technological world with our innovative products and services. […] Especially in recent years, we’ve provided products and services of value to our customers with high quality and speed, by collaborating with outstanding resources in China, and leveraging the strengths of Honda.”

US-China Trade Deal - CBI Washington DC & CBI Beijing Insights

Dear CBI Members and Partners,

Kindly find a policy overview below of the recently agreed US-China Trade Deal from both of the CBI's Washington DC and Beijing offices.

Download (1) 16 2020 - Member Briefing_ US - China Trade Tensions

China Direct would like to thank Policy Analysts John Bleed and Joe Cash for their invaluable insights.

For more information or details please contact them via: [email protected] or [email protected]

Thank you.

China Intellectual Property Newsletter - sign up below

China Intellectual Property Newsletter - sign up below

 

Following the announcement that China’s National People’s Congress has approved updates to China’s Trademark Law, readers of China Direct may wish to read and subscribe to the UK Intellectual Property Office ‘China IP Newsletter.’

The newsletter aims to keep UK businesses up to date with any recent developments in China’s IP environment, and is often the only English-language update on changing legislation.

This month’s edition includes information on how to submit an opinion on China’s ‘Draft Regulations on Trademark E-filing’, a selection of case studies explaining how foreign companies can expect their trademarks to be protected in law in China, as well as updates on key ministers in the Chinese government and their attitudes towards IP topics.

To read the newsletter in full, please follow the link.

The CBI Beijing Office would like to thank our partners at the British Embassy and Intellectual Property Office.

GSK’s Shringix wins China Entry approval

 

CBI member, GlaxoSmithKline has announced that it has obtained ‘conditional approval’ from China’s National Medical Product Administration to launch its shingles vaccine, Shingrix.

In China, about 3 million adults are affected by shingles each year. Responding to significant public need, the Chinese Government included shingles in a list of “clinically urgently needed new drugs”, released by China’s State Drug Administration to foreign pharmaceuticals companies last August. This list was released to encourage foreign drug developers to apply foreign data and evidence to fulfil China’s drug needs and expedite approval. Consequently, GSK’s Shringix vaccine has been approved for use in China on the same conditions as by the US Federal Drug Administration (FDA) –- the vaccine is only allowed in people ages 50 and above.

Dr. Thomas Breuer, Senior Vice President and Chief Medical Officer of GSK Vaccines said: “Today’s approval of Shingrix in China is recognition of the significant scientific advance this vaccine represents. In the pivotal studies the vaccine has shown over 90% efficacy across all age groups in the prevention of shingles, a disease that affects one in three people across the Asia-Pacific region. It can result in lasting pain and other complications which can severely impact the quality of people’s lives. [GSK] welcome the Chinese government’s progress to enable faster entry of new products into China and we look forward to working with the relevant agencies to bring the benefits of this vaccine to local communities.”

Shingrix is currently licensed for use in the EU, US, Canada, Japan and Australia, and has performed incredibly well across all markets. In the first quarter of 2019, following US FDA approval, sales of the vaccine reached £357 million – 45% ahead of analysts’ expectations and more than 60% more than the previous quarter.

To read the official press release, please follow the link.

Cranswick reports exports jump to East Asia

CBI member, and British meat processor, Cranswick has announced that exports of pork to East Asia have grown by 16% compared with the same period last year.

Capitalising on the African swine fever epidemic which has decimated China’s pig herds, Cranswick is bolstering its presence in the region through expanding outline sales and developing direct relationships with large processing customers. Cranswick reported that like for like export revenues had risen by 3% as a result.

According to Cranswick, between 10 to 35 per cent of China’s pig herd has already been lost to the disease, resulting in a potential pork shortfall supply of 16m tonnes annually. The company said that the effects of the disease on China and the surrounding region may last for more than three years “due to limited biosecurity and the slow replenishment of pig herds in the region.”

Shares in Cranswick were up 1 per cent in early trading on Tuesday, following the issuing of the statement.

 

 

Everything you wanted to know about IP in China but were too afraid to ask

CBI members in Beijing gathered yesterday to receive the annual IP briefing from a renewed IP network stretching across Beijing and Shanghai. Members also received a briefing from the visiting Deputy Director for International Policy from the Intellectual Policy Office (IPO), outlining how the IPO was adapting its strategy to handle the imminent changes in IP protection companies will face as a result of the UK leaving the European Union, as well as where the IPO sees opportunity to work with China on improving its own domestic IP strategy.

Speaking on the subject of IP protection in China, the following issues were identified as the main IP concerns for British business in China:

• Age and pace of Chinese system – China’s IP system has developed incredibly fast, with the first piece of IP law having been introduced in 1983. As a result, the Chinese government is both under pressure and very ambitious when it comes to introducing IP reforms. That presents a challenge for foreign businesses when it comes to keeping up with changes to China’s IP system and the reasoning behind those changes.
• Chinese IP system has been designed with Chinese companies in mind. Currently, only 1% of IP-related Chinese civil court cases involve foreign parties, while 85% of TM applications are made by Chinese companies
• That means that the Chinese IP system is under growing pressure to mature and cater to foreign companies as China ‘goes global.’ Members were then invited to provide inputs on technical IP issues, such as bad faith trademarks, patent law, e-commerce and copyright law. While discussing these specific areas in detail, several key trends emerged:

• The Chinese government is very good at introducing reforms and new regulations to clamp down on IP infringement. Where it is not so good however, is implementing these laws and punishing companies found to be infringing on another’s intellectual property
• The existing methods for punishing companies found to be infringing on another’s intellectual property are insufficiently punitive.
• Chinese companies are highly adept at finding ways around new and existing regulation, and see doing so as a way of guaranteeing a competitive edge over rivals.
• Existing legislation lacks the maturity to cater to foreign companies, who are used to dealing with systems of greater sophistication. This presents itself as a market access barrier as it makes it difficult to invest in collaboration with Chinese partners with the confidence that any transferred technology will be sufficiently protected in China.

 

For more information regarding IP and introductions to the UK Embassy's IP team please contact the CBI's Beijing office:

E: [email protected] Tel: 010 85253100

Thank You.