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Pakistani Prime Minister Imran Khan is visiting China this week to attend the opening ceremony of the Winter Olympics and meet with Chinese leaders.

A spokesman for Pakistan's Foreign Ministry told media last Friday that Khan's visit would reinforce the all-weather strategic cooperative partnership between the two countries, in addition to advancing the objective of building a closer China-Pakistan bond with a shared future. Khan's trip is his first in nearly two years. However, some people are skeptical over the reasons for his visit.

Although Pakistani Foreign Minister Shah Mahmood Qureshi claimed last Thursday that the visit was aimed at expressing solidarity with Beijing, as some countries have boycotted the Olympics, some Pakistani media outlets report that Islamabad is eyeing a $3 billion (€2.6 billion) loan from China, the world's second-largest economy after the United States, in addition to pinning hopes on Chinese investment into six sectors.

The English daily Express Tribune recently reported that the government was considering requesting that China approve another $3 billion loan, which could be kept in China's State Administration of Foreign Exchange (SAFE) so as to boost its foreign exchange reserves.

Pakistan seeks investment in six industries

Islamabad is also seeking Chinese investment in the industries of textiles, footwear, pharmaceuticals, furniture, agriculture, automobile and information technology. The newspaper further wrote: "The government is expected to tell the 75 Chinese companies that it could provide access to trade routes to the Middle East, Africa and the rest of the world, offering greater incentives in the shape of reduction in freight costs."

Pakistan relies heavily on China for economic assistance and cooperation. The communist country has already pumped billions of dollars into the Islamic republic under the China-Pakistan Economic Corridor. Islamabad completed a number of energy and infrastructure projects under the CPEC.

Economist Kaiser Bengali believes that Pakistan is now 100% dependent on China for financial and economic assistance. He told DW that the immediate purpose of the visit is to seek the loan from Beijing, reflecting Pakistan's growing reliance on China.

"While the conditions of the IMF are made public, China keeps the terms and conditions of loans and projects secret, which leads to suspicions," he said.

Many nationalists in Pakistan's western province of Balochistan are skeptical of the Chinese investment, which they say does not benefit the residents of the region that houses the Chinese-run strategic Gwader port.

The residents of Gwader recently erupted in protest against the scarcity of drinking water, complaining that Chinese investment did not help improve access or help the province in other ways.

Some Baloch nationalists fear that, if Pakistan defaults on its loans, China would seek mining contracts in the mineral-rich province at an extremely discounted rate — or possibly take over the port.

Bengali said such suspicions are exacerbated by the secrecy surrounding Chinese development projects and the terms of the loans.

During the Cold War, the United States was the main ally of Pakistan, supplying the country with weapons and military training. Islamabad also joined western military alliances to counter communism.

Strained ties with West

Pakistan's ties with the United States were somewhat strained during the 1990s, but the country again became Washington's ally in the "war on terror" after the September 11, 2001, attacks. However, following the US pullout from Afghanistan, the South Asian country is now looking to the East for strategic alliances.

Talat Ayesha Wizarat, a Karachi-based expert in international relations, told DW that Pakistan is heavily dependent on China because the West did not turn out to be a reliable ally, abandoning Islamabad and instead cozying up to New Delhi, a common foe of both Pakistan and China.

Wizarat said loans from the International Monetary Fund came with strings attached, and added that Western-backed financial institutions asked about the details of CPEC projects.

She said that in contrast, China didn't put conditions on its loans. "It has already pumped billions of dollars into the CPEC but did not attach strings," Wizarat told DW.

The US has no interest in the region after pulling out from Afghanistan, she said. As a result, she added, Pakistan will need China's assistance to bolster its economy, stabilize Afghanistan, promote trade in the region and consolidate its defenses.

China has taken two steps closer to a fully cashless economy after two small private Chinese banks announced last month that they would end services related to bank notes and coins, according to a South China Morning Post report Friday (Feb. 4). Beijing-based Zhongguancun Bank will end cash services, including over-the-counter deposits and withdrawals and cash services on ATM machines, in April, while NewUp Bank of Liaoning will end its cash services in March, the report says.

Chinese residents have long relied on Tencent Holdings’ WeChat Pay and Alibaba Group Holding’s Alipay over cash and Beijing has been conducting a nationwide pilot scheme for digital currency known as e-yuan. So far, more than 261 million people having downloaded the wallet app since it launched last year.

Many Chinese businesses are transitioning to a more digital yuan-centric payment system during the Lunar New Year this week, the report says. Tencent recently added e-yuan as a payment option to WeChat Pay while eCommerce giant JD.com now supports e-yuan payments in its online stores.

Meanwhile, Chinese on-demand services provider Meituan last week allowed more than 200 types of offline merchants — including restaurants, grocery stores, movie theaters and hotels — to accept e-yuan payments, even as the country’s central bank says merchants must accept bank notes and coins. Some private banks in China hope to become internet banks, but China’s crackdown on the internet in the past year could make that an uphill battle, the report says. So far, China has granted four private banks the right to conduct cross-regional banking services on the internet.

Last month, the Cyberspace Administration of China (CAC) began promoting blockchain projects in as many as 15 “zones” and throughout more than 160 government entities, including government departments, schools and car companies. The goal is to use blockchain in data sharing to make business processes more effective and to ease any frictions across trade finance, equity markets and cross-border finance.

By launching widespread (geographically speaking), wide-ranging (in terms of the use cases) blockchain initiatives, China’s official efforts this week hint at a further crowding out of non-state-sanctioned development of digital ledgers — which would include private blockchains.

It seems that the explorations in equities, trade finance and cross-border finance would include the exchange of data, yes. But it would also help smooth the path for the digital yuan to be more fully embraced in all manner of transactions, particularly commercial ones.

China’s digital yuan trials saw $8.3 billion of the country’s payments market in the past six months and $13.68 billion in the past two years. The country’s full-scale rollout is expected during the 2022 Winter Olympics, which kicked off last Thursday.

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Source: PYMNTS.com

Exports will continue to drive China’s economy for the rest of the year as the domestic market remains sluggish, according to analysts.

Chinese leaders have indicated for many years that they want to move away from exports as the main source of growth and toward domestic consumption for sustainable economic growth, said Mattie Bekink, China director at the Economist Intelligence Corporate Network. 

“But that’s certainly not what’s happened during the pandemic. So China’s economic recovery has largely been dependent upon on return to its old export driven model, while consumption has really lagged,”

“In 2020, for example, net exports contributed the largest share of Chinese GDP growth since 1997 and consumption is not even recovered yet to its pre-Covid trend, according to China’s National Bureau of Statistics,” Bekink said.

Despite global disruptions of supply chains during the pandemic, China’s trade surplus rose to $676.43 billion in 2021— up from $523.99 billion in 2020, and the highest on record going back to 1950, according to official data from Wind information.“Exports will still continue to be a very important growth driver for the Chinese economy in 2022.”

Last week, China’s central bank cut its benchmark lending rates again amid rising concerns of slowdown in the economy, and reduced the one-year loan prime rate as well as the five-year LPR. Loan prime rates affect the lending rates for corporate and household loans in the country.

The world’s second largest economy grew 8.1% in 2021 as industrial production rose steadily through the end of the year, according to official data from China’s National Bureau of Statistics released Monday. GDP in the fourth quarter rose 4% from a year ago, faster than analysts expected.

“China’s economy is almost running on two tracks. The export-based economy actually is fine, but the domestic economy is quite soft,” Steve Cochrane, chief Asia-Pacific economist at Moody’s Analytics, told CNBC’s “Squawk Box Asia” on Wednesday.

Lackluster spending in China

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Source: CNBC

Under the Joe Biden administration, a new American grand strategy is coming into view. It is focused on the emergence of China as a peer competitor and organized for long-term strategic rivalry with Beijing to shape the rules, institutions, alliances, alignments and values that undergird world order in the 21st century. For three decades, the United States has watched the rise of China and debated its implications for American interests and the future of the US-led international order. Will China’s rise be peaceful? Will it be a “responsible stakeholder”? Will it seek integration into the world capitalist system dominated by the leading liberal democracies, or seek to contest and overturn it? Will “engagement” with China lead to a more open, pluralistic rule-of-law regime? What kind of challenge does China pose to the US and its allies and partners — military, economic, technological and ideological, or all of these? Will China use its growing power and wealth to try to “push” the US out of East Asia? In an era of intensified US-China competition, how will countries inside and outside of East Asia react and align themselves? Can the US and China find a way to coexist in a two-superpower world?

In the last several years, the answers have become increasingly clear, at least to the US foreign-policy establishment. As a result, a core set of convictions about the rise of China has crystallized to shape Biden administration strategy. First and foremost, China is now seen as a full-spectrum challenger to the US global position and the US-led liberal democratic world. In announcing the creation of a new China Mission Center, the CIA described China as “the most important geopolitical threat we face in the 21st century.” China is deeply embedded in the global system and world economy, and US-Chinese co-operation will be essential to manage problems of security, economic and environmental interdependence. But the US and China are also hegemonic rivals with very different visions of the world order, rooted in increasingly divergent developmental and order-building interests. The US wants to make the world safe for democracy, and China wants to make the world safe for the Chinese Communist Party (CCP) and political autocracy. The US believes — as it has done for more than two centuries — that it is safer in a world where the liberal democracies predominate.¹ China contests such a world. Therein lies the deep roots of Sino-American rivalry.

The Biden administration has thus moved to place long-term strategic competition with China at the center of its grand strategy. The abrupt and chaotic end of the American war in Afghanistan was seen by many as a decision by Biden to step back from global security leadership. But it is better seen as a strategic rebalancing of resources and commitments, repositioning the US to focus on East Asia and competition with China. The post-9/11 grand strategy of fighting a global war on terror has ended, giving way to a China-centered grand strategy organized around the balance of power, hegemonic competition and a struggle to shape the organizing logic of the global system. The Biden administration’s efforts to build counterweights to China in the Indo-Pacific — the Quad and the AUKUS agreement — are harbingers of this strategic reorientation.

Several convictions inform this new grand strategy. First, as China grows in wealth, power and global influence, it is increasingly turning into a “systemic rival” of the US, offering alternative leadership and order-building agendas. As Gideon Rachman notes, “the Biden team believe that China is determined to displace the US as the world’s pre-eminent economic and military power, and they are determined to push back.”² Fundamentally, China seeks to contest, weaken and shrink America’s liberal hegemonic presence in the world, paving the way for the elevation of its hegemonic leadership that champions an international order more congenial with its own illiberal regime principles and interests. Chinese President Xi Jinping seems to share this view, telling legislative officials in Beijing in April 2021 that “China can already look at the world on an equal level,” suggesting that it no longer sees the US as a superior force. China is a “systemic rival” because it challenges the full spectrum of US power, interests and values. This competition will play out over many decades and across a wide array of areas — military power, alliances and alignments, markets and trade, money and finance, next-generation technology, science and research, and democratic versus autocratic ideology and values.

Second, the engagement strategy of the 1990s that sought to integrate China into the liberal international order mostly failed. Welcoming China into the US-led system — capped by its membership in the WTO in 2001 — did not lead to the hoped-for liberal outcomes. China became more integrated into the world economy, and mutually beneficial trade and growth followed, but Beijing did not continue on its path of reform, opening and liberalization. 2018 was a turning point, when the Deng Xiaoping-era term limits on the Chinese presidency were dropped, making President Xi, in effect, “ruler for life.” The attack on democracy in Hong Kong, the oppression of the Uyghurs, the intimidation of Taiwan, the territorial aggrandizement in the South China Sea, the internal crackdown on Western influences, the cult-like elevation of “Xi Jinping thought” — these are markers of the path China is traveling. Under Xi, China has become more autocratic, anti-liberal, anti-democratic and internationally aggressive. Glimmerings of openness, reform, the rule of law and civil society outside the reach of the communist state have essentially disappeared. 

Third, the US is not capable of balancing against China’s illiberal hegemonic ambitions on its own. It will need to work with a coalition of like-minded states and associated partners to create alignments that strengthen the underpinnings of the liberal international order. In his recent UN General Assembly speech, Biden mentioned “allies” eight times and “partners” 16 times. After all, the China challenge is not just aimed at America’s global position. It is a challenge to the wider world of liberal democracies and their longstanding military, economic and ideological dominance in the global system. By working together, liberal democracies can exploit their power to shape global rules and institutions. This strategy of fostering co-operation among the democracies is not a project to build a unified Cold War-era “free world” bloc — this is not possible or even desirable. The goal is to build a wide variety of ad hoc groupings to aggregate military, economic and diplomatic capabilities in various zones of competition. Within East Asia, as Kurt Campbell and Rush Doshi have argued, the “purpose of these different coalitions — and this broad strategy — is to create balance in some cases, bolster consensus on important facets of the regional order in others, and send a message that there are risks to China’s present course.”³

Fourth, the most important step in countering Chinese ambitions is to make liberal democracy work at home. Demonstrating that liberal societies can function effectively and solve problems — this is the goal upon which everything else depends. American internationalism is only sustainable if it advances the life opportunities of the middle class. This means a New Deal-type effort to renew and rebuild American society and institutions, investing in a modernized economy, infrastructure, research and technology and clean energy. The competition between China and the US is really a competition over “modernity projects,” alternative models and ideologies of global development and socioeconomic advancement. America succeeded as a global power in earlier eras because its capitalist democratic model seemed to outperform its rivals. We are entering an era where this competition will again play out.

The ambitious proposals of the Biden administration — with massive funding plans for infrastructure, R&D, education and the social safety net — are driven by this deep worry about the future of liberal democracy in the US and abroad. In this sense, Biden’s grand strategy is an echo of Franklin Roosevelt’s New Deal-era agenda for domestic renewal.⁴ Today, as in the 1930s, the future of liberal open societies is uncertain. The emerging hegemonic rivalry between the US and China is really a competition to see which superpower can lead in solving the great problems of the 21st century. The viability for American and Chinese hegemony depends, in the final analysis, on the solutions and public goods that each generates for the world. It is a contest to see who can offer the world a better hegemonic deal.

Fifth, the struggle between China and the US will also center on competition to shape global rules, regulations, technological platforms, and the values and principles enshrined in global institutions and regimes. Multilateral institutions and regimes are not value-neutral. They can be more or less friendly to liberal democracy and human rights and more or less friendly to authoritarianism and autocracy. Technology platforms and their network externalities also can give one side or the other advantages. This struggle favors first movers and countries that work together with other countries to create “critical mass” coalitions. The US will seek to build coalitions with liberal democracies to strengthen their position in these diverse, technology-driven areas of global rule and regime-making.

Here, the Trans-Pacific Partnership (TPP) trade accord, negotiated by President Barack Obama, and later rejected by Donald Trump, is a model. It restricts state-owned enterprises from subsidized dumping, protects intellectual property rights, outlaws human trafficking and requires the legalization of independent trade unions and collective bargaining. The world trade system will have rules, and the question is whether they will or will not incorporate human rights and liberal democratic protections. This piece of the Biden strategy still hangs in the balance, endangered by anti-TPP factions on both the left and the right.

Finally, the US will need to build working relations with China, even as it competes. There are critical and growing “problems of interdependence” that can only be tackled through superpower co-operation. After all, even during the Cold War, the US and the Soviet Union worked together through the World Health Organization on finding a cure for small pox, and the two countries engaged in sustained efforts at arms control. The US should not need to “buy” co-operation from China on solving problems such as global warming by pulling its punches on issues such as human rights and Taiwan. The two superpowers will need to identify red lines and establish crisis diplomacy mechanisms to keep competition from spiraling out of control. Both sides will have incentives to build restraints and guard rails into their regional and global rivalry.

The emerging “systemic rivalry” between the US and China will shape world politics for decades. But there are restraints that will limit its intensity and dangerous consequences. One is on the Chinese side: the growth of Chinese power and its aggressive “wolf warrior” actions have triggered a regional and global backlash. If China’s foreign policy continues to become more aggressive and belligerent, it will generate even more pushback. In effect, China faces the problem that post-Bismarck Germany faced, and what historians call the problem of “self-encirclement.” Germany under Bismarck undertook elaborate efforts to reassure and diplomatically engage its neighbors. But by the turn of the century, post-Bismarck Germany began to destabilize and threaten Europe through its economic growth and military mobilization. For the same reasons, China should worry about how it exercises power and look for ways to avoid backlash and self-encirclement. At some point, China will want to moderate its ambitions and signal restraint.

For the US, restraint comes from the fact that most of its alliance partners are deeply tied economically to China. Across both Northeast and Southeast Asia, countries are simultaneously dependent on China for trade and investment and the US for security protection and the maintenance of the military balance. Remarkably, 100 countries in the world have twice as much trade with China as they do with the US. The US needs to worry that if it pushes too hard on its allies to confront or contain China, they will jump off the American bandwagon. The US will have incentives to pursue a “not too hot and not too cold” strategy in East Asia.⁵ It will need to reassure allies that America “is back” and that it intends to remain a provider of regional security and military balance. But it will also need to convey reassurance in the other direction, that it will not push frontline states into a war with China — or even force these states to make existential choices about which side they are on.

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By G. John Ikenberry for Global Asia

The 2020-2022 Chinese property sector crisis is an current financial crisis sparked by the financial difficulties of Evergrande Group and other Chinese property developers, in the wake of new Chinese regulations on these companies' debt limits. Following widespread online sharing of a letter in August 2021, in which Evergrande supposedly warned the Guangdong government that it was at risk of experiencing a cash crunch, shares in the company plunged, impacting global markets and leading to a significant slow-down of foreign investment in China during the period August to October 2021.

After rumours of financial difficulties at Evergrande surfaced in the summer of 2021, the company attempted selling assets to generate money. This strategy failed in October 2021, however. After numerous missed debt payments by Evergrande and a number of downgrades by international ratings agencies, Evergrande finally defaulted on an offshore bond at the beginning of December, after a one-month grace period had elapsed. The ratings agency Fitch then declared the company to be in "restricted default".

Thousands of retail investors, as well as banks, suppliers, and foreign investors are owed money by the company. In September 2021 the developer had 2 trillion RMB (310 billion USD) in liabilities.

Beijing is intervening to prevent a disorderly collapse of the indebted real estate group that could wreak havoc on the world's second biggest economy. Fitch Ratings declared that the embattled property developer has entered "restricted default," reflecting the company's inability to pay overdue interest earlier this week on two dollar bonds. The payments were due a month ago, and grace periods lapsed Monday.

Makers of Irish whiskey, Belgian chocolate and European coffee brands are scrambling to comply with new Chinese food and beverage regulations, with many fearful their goods will be unable to enter the giant market as a Jan 1 deadline looms. On 12 April 2021, the General Administration of Customs of China (“GACC”) issued Order No. 248, which sets out new requirements for the registration of qualified foreign food producers that are allowed to export food products to China, effective from 1 January 2022. This Order represents a significant move toward tightening up the regulation of foreign made food products imported into China.

As the date of coming into force of the Order is fast approaching, one of the key challenges faced by foreign food producers is in ensuring that the registration process can be completed in a timely manner so that they have sufficient time to take transitional actions such as reprinting of product labels with the relevant registration number under the new scheme. But detailed procedures explaining how to get the required registration codes were only issued in October, while a website for companies allowed to self-register went online last month.

China's food imports have surged in recent years amid growing demand from a huge middle class. They were worth US$89 billion in 2019, according to a report by the United States Department of Agriculture, making China the world's sixth largest food importer.

China has tried to implement new rules covering food imports for years, triggering opposition from exporters. The General Administration of Customs of China (GACC), overseeing the latest iteration of the rules, has provided little explanation for why all foods, even those considered low-risk such as wine, flour and olive oil are covered by the requirements. Experts say it is an effort to better oversee the large volumes of food arriving at Chinese ports and place responsibility for food safety with manufacturers rather than the government.

Food, especially chilled and frozen food, has already faced severe delays clearing Customs in China in the last year due to coronavirus testing and disinfection measures

Foods including unroasted coffee beans, cooking oil, milled grains and nuts are among 14 new categories deemed high risk that were required to be registered by the end of October by food authorities of the exporting countries. Facilities making low-risk foods can register themselves on a website that launched in November.

We highlight below a number of areas that may warrant attention and specific consideration as businesses make necessary adjustments to comply with the Order:

1. The term “food products” for the purpose of Order is not clearly defined, although it expressly excludes food additives. Further scope clarification and discussion with GACC may be necessary.

2. An increasingly large share of food imports into China are now made through the cross-border e-commerce (“CBEC”) regime, which waives most licensing and registration requirements for ordinary imports. CBEC’s status as a trade “safe harbour” has already been challenged recently, as China is now subjecting Australia wines imported through CBEC to anti-dumping and countervailing duties resulting from a trade remedies action decided in December 2020.

3. There are concerns that the Order may give rise to non-trade barriers for imported food products. In fact, a number of countries including Australia, Europe, United States, Canada, South Korea and Japan have raised concerns at a WTO SPS Committee meeting in July 2021, stating that the new registration requirements may be overly onerous in expanding the scope of control beyond high-risk food products to cover a greater scope of imported food products.

4. In view of the evolving trade relationships involving China, there are also concerns that the Order may become a tool in the toolbox employed by the Chinese government to address geopolitical or trade tension, as the broad provisions and lack of detailed implementation rules could potential allow room for the exercise of discretion in the practical implementation of the Order. On the other hand, it would be interesting to observe how the Chinese government will balance the overall compliance regime for foreign food producers with American food producers covered under the Phase One Deal between China and the United States, which provides for higher transparency and certainty with respect to non-tariff trade barriers for U.S.-origin food and agriculture products, including the registration of U.S. factories listed by U.S. Food and Drug Administration (FDA) in its list of qualified producers forwarded to GACC.

5. Last but not least, notwithstanding the controversy surrounding the justifiability of the new Order under the multilateral or bilateral trade frameworks, the Chinese government is obviously looking to expand its scope of supervision over food supply chains to include operations outside of China. As a result, insofar as the Chinese market is concerned, the compliance strategy for multinational food suppliers should also address the China law compliance risks and challenges involved in such pre-importation operations.

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Source: Reuters.

China aims to install more than 30 gigawatts (GW) of new energy storage capacity by 2025, and 100 GW finished by 2030 as part of efforts to boost renewable power consumption, with energy storage and electrochemical storage remaining critical for China’s energy transition and ensuring a stable electric grid system.

New energy storage refers to electricity storage processes that use electrochemical, compressed air, flywheel and super capacitor systems but not pumped hydro, which uses water stored behind dams to generate electricity when needed. Among all energy storage technologies, electrochemical storage is popular due to its maturity, simple structure, and deployment convenience and will very likely represent the majority of energy storage in future

China currently has total energy storage capacity of about 35 GW as of 2020, of which 31.79 GW is pumped hydro, and 3.269 GW is electrochemical storage. Lithium battery contributed 2.9GW, over 90% of the electrochemical capacity, according to the China Energy Storage Alliance. China is aiming for renewable power to account for more than 50% of its total electricity generation capacity by 2025, up from about 42% now.

Rising giants in storage technology.

CATL: Contemporary Amperex Technology Ltd. (CATL), the largest lithium-ion battery manufacturer in China, provides batteries for electric vehicles, and more recently, products and solutions for energy storage.

In 2018, CATL participated in a 50 MW/100 MWh storage project in Haixi prefecture, Qinghai province. In the same year, the sales revenue from its storage business increased by almost 12 times over the previous year. In 2019 and 2020, it recorded more than 200% growth year on year, reaching CNY 1.9 billion ($295 million) in 2020.

CATL’s storage solution covers major storage scenarios such as storage for power generation, grid storage, and storage on the consumption side. With high-quality battery cells and a in-house battery management system (BMS), CATL provides power generation customers accurately optimized assistance for grid-friendly power output. On the grid side, CATL’s storage system can help greatly in peak shaving and frequency regulation, to boost capabilities for renewable energy fluctuations. Meanwhile, the storage products have been applied in large-scale industrial, commercial and residential areas, and expanded to emerging scenarios such as base stations, UPS backup power, intelligent charging stations, and off-grid and island/isolated systems.

Sungrow: As one of the more significant solar inverter manufacturers and earliest enterprises involved in energy storage, Sungrow has applied its energy storage systems across China, the United States, Great Britain, Canada, Germany, Japan, Australia, India and more. By the end of June 2020, the company had taken part in more than 1,000 energy storage projects globally.

Based on its inverter technology, Sungrow concentrated on R&D to help customers to better support grids with fast power control/adjustment. To help customers minimize the levelized cost of electricity (LCOE), Sungrow promoted a storage system of 1,500 V and with a DC coupling scheme of PV and storage, which can significantly reduce the overall cost of a system.

According to China Energy Storage Alliance statistics about global energy storage projects, Sungrow is becoming the leading enterprise for providing the most comprehensive energy storage products in the field. The company has ranked first in China for storage installations for the past four consecutive years.

Veteran state-owned equipment manufacturer Shanghai Electric established a 2017 joint venture with Gotion Hi-tech, a lithium-ion battery supplier, for market exploration in energy storage and system solutions. The joint venture has expanded its R&D and sales in lithium battery precursors, cells, and battery management systems, and has delivered customized integration solutions for energy storage systems.

At end of 2018, the joint venture, Shanghai Electric-Gotion, began to build its own lithium battery production base in Nantong, Jiangsu province, for the future development of storage. Following 10 months of construction and equipment adjustments, the new facility started production of its first-stage project, with an annual capacity of 5 GWh.

At the 2021 SNEC expo in Shanghai, the company launched its latest storage solution. And its BMS for electrochemical energy storage won the Megawatt Jadeite Award for its innovative design.

Similar to Sungrow, Huawei commenced its expansion into storage by building on its significant inverter product expertise. However, the difference is that Huawei sees the move within a much bigger picture for the future of energy.

From Huawei’s string inverters, the company saw the possibility for its products to build up a network of solar PV, wind power, and smart energy grids. Based on this network, the future energy world, in Huawei’s view, will be centered on data and digital technologies.

In the future, the current grid will still provide physical support for electricity power transmission. Power consumers and generators will connect into the grid for power consumption, or contribution, through bidirectional inverters. Meanwhile, the inverter is also connected to a storage system to store surplus electricity or supply power to the grid based on price levels and grid demand.

The overall ambition is that these nodes are all connected via a cloud network. It’s possible that millions of interconnected nodes could then provide functionality and data. Huawei is aiming to become a platform that can provide all the necessary technologies, hardware, software, solution, and services. Storage system solutions are a starting point for Huawei in this wide-scale effort to reimagine energy infrastructure.

In summery, battery storage investment remains critica and long-term perspective of energy storage investment remains buoyant. The industry remains one of the most critical parts of China’s carbon neutrality plan.

Like Nio, Chinese electric car maker Xpeng has kickstarted its international expansion. But unlike its rival, which put on a series of splashy campaigns in Norway, Xpeng launched quietly in the Scandinavian country last month.

In Norway, Xpeng has begun shipping its G3 SUVs and P7 sedans. The Chinese EV startup aims to enter more European markets in 2022, a company spokesperson told TechCrunch.

Xpeng has stayed low-key with its overseas expansion probably because it was waiting to launch its first “international” model, the G9 SUV that came to light today.

“G9 is our first model to be conceived and developed from the ground up for both the international and Chinese markets, bringing our most sophisticated designs to our customers worldwide,” the firm’s co-founder and president Henry Xia said at an auto exhibition on Friday.

The SUV is Xpeng’s fourth production model and will be the first to possess the carmaker’s latest advanced driver assistance system. The ADAS, called Xpilot 4.0, is built for urban driving, as Xpeng explained at its Tech Day last month. Baking Xpilot 4.0 into a passenger car is ambitious, as the version aims to assist anything from “vehicle start-up to parking,” a big step closer to fully autonomous driving.

Xpilot 4.0’s computing power comes from two Nvidia Orin-X system-on-the-chip units. Its hardware includes a mix of cameras, lidar, millimeter-wave radar and a 3D visual perception network.

In other words, G9 will be layered with sensors. But Xpeng tries to make them inconspicuous. Its dual-lidar units, for example, have been integrated into the headlights. Lidar had traditionally been too expensive for mass-produced cars, but Xpeng and other industry players are working to make the sensing tech affordable.

G9 is not launching in China until the third quarter of 2022, according to a person familiar with the matter, so European customers won’t likely get to try the SUV until 2023.

In the meantime, Xpeng has much work to do before its highly autonomous passenger cars are ready to ship internationally. It will need to set up charging networks in its target markets, a process that is prone to COVID disruptions. Xpilot also relies on high-definition mapping, so the Chinese firm will probably need to team up with local navigation providers.

Xpeng may also be questioned by local governments regarding the safety of its smart cars. Governments around the world vary in their attitude toward vehicle autonomy, and episodes of collisions involving Tesla’s ADAS have only increased their skepticism about the tech’s readiness.

Xpeng has done some preparation in this regard. For instance, it will be testing drivers and giving them a safety score before letting them activate Xpilot. Its vehicles’ built-in monitoring system will also keep vetting drivers and may revoke Xpilot access if it determines a driver is acting irresponsibly.

Global expansion

[Update on Nov 24] During the firm’s earnings call on Nov 23, founder and CEO He Xiaopeng declared that Xpeng’s target between 2020 to 2022 is to “lay a good foundation” for “software and hardware R&D development, our safety, and data protection, and also our team and organization structure revamp.” Sales, on the other hand, “is not our priority in the international market.”

Norway is just the first step, and it already is eyeing Sweden, Denmark, and the Netherlands. It will no doubt be interesting to see how Xpeng structures its operations and supply chains as it starts shipping at a greater scale globally.

Other specs

The G9 is compatible with Xpeng’s “superchargers”, 800V high-voltage mass-production SiC (silicon carbide) that’s able to charge a car for up to 200 km of range within five minutes.

The SUV comes with a “fault detection” system that can identify the fault location after a breakdown. The system will then display the service center with available inventory as well as estimated repair time and cost.

Lastly, the G9 uses the Gigabit Ethernet communications architecture, which “improves communications and support” for higher-level autonomous driving, smart cockpits and OTA upgrades.

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Source: TechCrunch

Speaking to the United Nations General Assembly on September 21, Chinese President Xi Jinping made what could become the most significant change to China’s Belt and Road Initiative (BRI) to date, pledging Beijing “will not build new coal-fired power projects abroad.” This announcement, depending on how it is interpreted and implemented, could mark a watershed moment in China’s overseas investment practices. While this is a welcome step, it is far more important for China to begin to phase out coal-fired power domestically.

China has complicated global efforts to reduce greenhouse gas emissions, as it has used BRI to finance and build coal-fired power plants around the world. The ten largest funders of coal-fired power globally are Chinese banks, which have financed nearly seventy percent of the world’s coal power projects over the past five years (to include projects both domestically and internationally). In BRI countries, China has financed nearly $45 billion of coal projects.

China’s investments in fossil fuel projects along the Belt and Road have the potential to lock countries into decades of carbon-intensive growth. Modern coal-fired plants have an operating lifespan of more than thirty-five years, yet environmental groups suggest that coal needs to be entirely phased out by 2040 if the world is to meet the Paris Accords’ emissions reduction goals. Echoing that sentiment, United Nations Secretary-General Antonio Guterres stated last month that “accelerating the global phase out of coal is the single most important step to keep the 1.5-degree goal of the Paris Agreement within reach.”

Responding to international criticism of its BRI practices, China released a “Guidance on Promoting Green Belt and Road” in 2017. That same year, speaking at the Belt and Road Forum, Xi proposed to establish “an international coalition for green development on the Belt and Road” and “provide support to related countries in adapting to climate change.” Two years later, Xi went further, pledging to pursue an “open, green and clean” BRI. To date, such rhetoric has not been matched by the reality on the ground, and investments in fossil fuels have continued.

Recently, there have been some indications that Beijing may be working to change that reality. China is now taking steps to overcome a major flaw in its past approach to “greening” BRI: its reliance on local environmental standards, no matter how low those standards might be. This past July, China’s ministries of commerce and the environment jointly issued Guidelines for Green Development in Foreign Investment and Cooperation that recognize problems with host countries’ environmental rules and suggest that companies “follow international green rules and standards.” Even on a voluntary basis, the push to bypass local standards in favor of more stringent and transparent international ones could be a big step.

There have also been some signs of a shift in Beijing to move away from funding coal-fired power abroad, at least in some places. In February 2021, China informed Bangladesh that it would no longer fund coal-fired power plants in the country. After China made its Bangladesh announcement, however, it signed new deals to build coal-fired power plants in Vietnam and Indonesia.

With a pledge directly from Xi, China might finally be getting serious about sustainability along the Belt and Road. Billions of dollars of “dirty” projects will now hopefully be shelved and then cancelled. One report estimated that Xi’s statement could lead to the cancellation of forty-four coal plants worth a combined $50 billion, which would reduce future carbon dioxide emissions by two hundred million tonnes per year.

Still, Xi’s vague wording can be read in a narrow or expansive way, and how China’s ministries interpret his policy directive will ultimately determine its significance. For instance, Xi pledged not to “build” new coal-fired power plants abroad, but it is unclear whether this also includes financing. In addition, do “new” projects include those where financing has closed but construction has not yet begun? What will happen to the seventeen coal-fired power plants currently in the planning phase? Will China offer green alternatives to those countries that had committed to a Chinese-built coal-fired power plant?

Following Xi’s announcement, Bank of China, the world’s largest supporter of coal-fired power over the past five years, stated that beginning in the fourth quarter of this year it would no longer provide financing for new coal mining and coal-fired power projects abroad, but it would continue to support those projects whose contracts it has already signed. This may indicate that Chinese banks will not walk away from deals where financing has already been committed.

It appears that China’s bureaucracy has yet to work out the specifics of Xi’s pledge. When asked to clarify whether China intended to halt financing new coal-powered plants abroad in addition to stopping building them, the spokesperson for China’s ministry of foreign affairs merely repeated Xi’s statement.

While Xi’s pledge is a step in the right direction, the fact that it does not extend to projects within China’s borders will greatly lessen its impact. China, the world’s largest emitter of greenhouse gases, generates one thousand gigawatts of coal power domestically, accounting for over half of the globe’s total and more than four times that of the second- and third-largest users (India and the United States).

China continues to add coal-fired power plants within its borders, bringing forty-one gigawatts of coal power on line in 2020 alone, which accounted for seventy-five percent of the global total. Even if Xi’s announcement reduces future carbon dioxide emissions by two hundred million tonnes per year, that is only half a percent of annual global emissions. Until China moves away from coal-fired power domestically in addition to fulfilling Xi’s pledge to stop backing coal power abroad, it will be much more difficult to address climate change.

The United States and its partners should urge China to move away from coal power at home and abroad. Public efforts to hold China to account may have played a role in Xi’s pledge, but more needs to be done to encourage China to implement this new commitment in a meaningful way, so that it covers not only the building of coal-fired plants but also the financing of them.

If China fails to curtail building coal-fired power plants, the United States should consider imposing import taxes related to the amount of carbon burned to produce goods so that all imports produced by taking advantage of dirty coal-based power would pay a polluter fee. The United States should also join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) while negotiating to include stricter provisions regulating carbon emissions. Given China’s stated interest in joining the  CPTPP, this presents an opportunity to make strong environmental standards a price of admission for Beijing.

In his speech, Xi also pledged to “step up support for other developing countries in developing green and low-carbon energy.” As one of the world’s largest producers of solar, wind, and hydropower, it will be critical for China to share its green energy technology with its BRI partners by increasing its financing for and construction of renewable energy.

The world is watching. Xi made his commitment on the world’s stage and it is world leaders that need to hold China to it while urging that China also begin to phase out coal power domestically and that this specific pledge be combined with previous commitments to move BRI in a more environmentally sustainable direction.

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Source: Council on Foreign Relations. By J.Hillman & D.Sacks

China’s private education companies had for years been the darlings of investors from New York to Shanghai, building a $100 billion industry on the promise of the world’s largest and arguably most-competitive schooling system. Then they got caught up in the Chinese government’s sweeping efforts to rein in the country’s technology giants, with a regulatory clampdown unveiled in July after months of rumbling that threatens to put an end to years of out-sized growth. The industry’s rise -- and future -- hinges on two of the most powerful and anxiety-inducing forces in China today: the pursuit of wealth and status, and the Communist Party’s enduring obsession with maintaining social order.

1. How did tutoring become so popular?

Blame it on the Gaokao: the national college admission test, administered in June, that decides which universities one can attend and thereby determining the fates of millions. It’s considered a playing-field leveler for those aspiring to move up the social ladder. Only 1.9% of nearly 11 million students who sat for the Gaokao in 2020 made it to a top-tier institution like Peking, Fudan or Tsinghua universities. Preparations begin many years before, in some cases as early as pre-school, as parents try to give their children every possible edge. Ironically, years of government entreaties to lessen the burden of homework may have driven anxious parents to private companies. After-school tutoring flourished, supplemented by online classes that in turn exploded during the Covid-19 pandemic. China’s market for private tutoring was expected to almost double to 1.17 trillion yuan ($183 billion) in 2023, from 619.1 billion yuan in 2019, according to Macquarie Research.

2. What do the regulators say?

That some tutoring firms exploited parental paranoia. A marketing free-for-all -- sometimes with false ads and misleading campaigns -- funneled millions of kids into mind-numbing virtual classes with uncertain benefits. As student numbers exploded, venture capital investors who didn’t want to miss out joined Alibaba Group Holding Ltd., Tencent Holdings Ltd. and SoftBank Group Corp. in doling out more than $10 billion of funding last year alone. That exuberance alarmed regulators, who feared tutoring firms empowered by big capital would only grow and exacerbate problems. President Xi Jinping lashed out at the industry’s “disorderly development” at a meeting in May, intensifying a clampdown from agencies including the powerful education ministry.

3. What’s the bigger picture?

Officials are also concerned about the destabilizing effects of hundreds of millions of parents plowing their life savings into online classes, while subjecting children to increasingly onerous workloads. As with past booms built on shaky ground -- say, in peer-to-peer lending, online shopping or improperly licensed wealth management products -- Beijing stepped in to defuse what it perceived to be a potential time bomb that threatened to disrupt order and thus the party’s grip on power. In addition, many cite the cost and competition for better education resources as a contributor to China’s declining birthrate. China offered tax breaks -- including tax write-offs for education fees --in 2019 to promote its new two-child policy, but that didn’t help. Now it wants people to consider having up to three. A reform of the education system may seem like a good way to start.

4. What has the government done?

Declaring that the industry has been “severely hijacked by capital,” regulators published new regulations on July 24 that, among other things:

• Require private companies that teach compulsory school subjects to go non-profit.
• Ban them from going public or raising foreign capital.
• Ban all tutoring related to the core school syllabus during vacations and weekends -- the prime hours for such companies.
• Forbid outright acquisitions.
• Banned foreign firms from acquiring or holding shares in school curriculum tutoring institutions, or using VIEs (variable interest entities) to do so.
• Those already in violation need to rectify the situation
• Forbid online tutoring and school-curriculum teaching for children under 6 years old.
• Ban teaching of foreign curriculums or hiring foreigners outside China to teach.

That followed a plethora of restrictions, including caps on fees firms can charge and time limits on after-school programs. Regulators have fined two of the biggest startups for false advertising: Alibaba-backed Zuoyebang and Tencent-backed Yuanfudao. On the flip side, tutoring services that focus on cultivating interests, innovation and practical abilities -- say piano lessons -- are encouraged.

5. What’s the impact?

All the major education companies said they would comply with the new rules, including on foreign investment. Global investors such as Tiger Global Management and Temasek Holdings Pte that had poured billions into the industry are reeling. Plans for several mega-IPOs already had been halted, including VIPKid, backed by Tencent and Huohua Siwei. Shares of listed tutoring firms have gotten hammered, including industry bellwethers New Oriental Education & Technology Group Inc., TAL Education Group and GSX Techedu Inc. GSX already said in May it’s closing its pre-school education business for children ages 3 to 8 and cutting staff.

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Source: The Washington Post