The extreme rainstorm witnessed in Beijing on July 21, 2012, the heaviest rainfall in six decades that left 79 people dead and caused widespread havoc in the capital city over a weekend, left deep scars in many people's hearts. Fortunately, when Beijing broke a 140-year-old rainfall record in the days between July 29 and August 2, the nightmare witnessed by Beijing residents over a decade ago were not replayed.
Based on flood prevention experience and lessons learned from previous rainfall disasters, including the catastrophic Henan floods in July 2021, Beijing appears to have made quantifiable to the city's disaster forecasting, relief, and response programs. There have been no major recorded roof collapses, backlash on the internet, damage of power lines, or flooded highway underpasses, scenes that were widely seen in the tragedy 11 years ago.
New technology and digital networks have become an important force in averting tragedy. The Beijing Haidian District Water Affairs Bureau utilized a cutting-edge smart system to direct emergency rescue operations throughout the district, as the system can map out the most optimal rescue route in record time.
The system utilizes visualization, integrated analysis of big data, and other technologies to understand the distribution and anomalies of approximately 3,000 water facilities and sensors across the entire Haidian area, and can provide real-time monitoring of the status of water channels, gates, and dams, and respond to warnings and forecasts speedily, the Beijing News reported.
Moreover, technologies such as the "Sky Eye" telescope, radar maps, and satellite cloud images have also played a significant role in this round of rainstorm warning. Since the start of the current round of rainfall on July 29, the "Sky Eye" smart system installed in some streets has remained vigilant. High-definition cameras installed on flood prevention emergency vehicles and rescue team helmets can monitor precipitation in real time, greatly improving the efficiency of flood responses.
"Early assessment, early warning, and early deployment" are the most significant forms of progress that the Global Times witnessed amid the slate of heavy rain that hit Beijing.
While visiting and reporting in waterlogged Zhengzhou, the capital of Henan Province, in July 2021, Global Times reporters found that the consensus among the public was they received warning notifications "too late." While other areas in Henan Province had already been hit by heavy downpours, Zhengzhou city government did not decisively put measures in place to stop gatherings, suspend classes, and require the closure of businesses, wasting critical time in flood prevention and missing a key rescue window.
The official investigation report on the severe rainstorm disaster in Zhengzhou which caused at least 398 deaths and missing, exposed serious misconducts in the city's response deployment, including inadequate warning, significant delays in emergency responses, and a lack of unified command at critical moments. These issues led to the highest disaster-related casualties seen in recent years, particularly with regard to the subway system and tunnel, which should not have occurred.
This time in Beijing, Global Times reporters found residents in the capital city received multiple flood prevention reminders via text from relevant departments before the heavy rain actually fell down. Beijing successively issued red rainstorm warnings, yellow lightning warnings, and blue wind warnings, reminding citizens to refrain from outdoor activities. Many organizations immediately issued directives for their employees to work from home.
News sources reported that in preparation, the Beijing Drainage Group initiated a top-level flood early-warning protocol, requiring all pump station personnel to be on duty. At the same time, a re-inspection and re-treatment of drainage facilities in key areas such as 155 depressed bridges and 249 subway stations, as well as a re-inspection of water pumps, backup power sources, flood control emergency equipment, and various monitoring systems in 87 rainwater pump stations across the city were conducted.
Power system companies also deployed emergency teams in advance. The State Grid Corporation of China (Beijing), for example, had 22 rescue teams with 510 personnel on standby, ready to transport power generation vehicles, small generators, lighting vehicles, and other flood control emergency supplies and equipment to be stationed in areas with strong rainfall forecasted by meteorological bodies.
Beijing's main cultural and tourism venues issued temporary closure notices soon after the Beijing city government temporarily asked to shut down access to all scenic spots on July 30.
All mountainous and water-related scenic spots and rural homestays in the heavily affected area of Fangshan district were temporarily closed and have stopped receiving visitors since then. All 17 tourist attractions in Huairou district were closed, and all homestays and folk accommodations were temporarily suspended to minimize risk.
Amid the heavy downpour sweeping through many parts of China, local authorities have stepped up efforts to counter flooding and power cuts. After days of search and evacuation efforts, disinfection work has begun in residential and commercial areas in the city over this weekend.
Throughout three major rainstorms, nonstop rescue missions have been executed with countless heartwarming stories. In the last decade, what has changed is our continuously honed ability to respond to floods, while what remains unchanged is the resilience exemplified by every individual, an essence of the Chinese civilization.
We believe that in the future, we will face floods and other natural disasters with even greater composure and unite together to withstand the tests they bring.
Editor’s Note: Whether the global economy can achieve recovery has become a hot topic of discussion in recent times. Along with this discussion, the growth prospects of the Chinese economy have become a global focus of attention. What potential does the Chinese economy hold for growth? Can it overcome short-term challenges and achieve long-term sustainable development? With these questions in mind, Global Times reporters Xie Wenting and Bai Yunyi (GT) recently interviewed Yukon Huang (Huang), a senior fellow with the Asia Program, formerly the World Bank’s China country director.
GT: Recently there have been many discussions regarding China’s economy and its prospects. How do you view the prospects of China’s economic growth? Huang: I think it’s not a short term issue. It’s not about this year. It’s about the next four to five years, because you’re talking about sustainable growth. You’re not talking about a short term economic cycle. So the question is, can China grow at a reasonable rate for, let’s say, the next five years and beyond? I think the answer to this is it is possible. China still has significant growth potential. And if it actually addresses the right issues, it could grow a 5 or 6 percent on a sustainable basis.
GT: You mentioned that the Chinese economy still has significant growth potential. What is the potential that you refer to? How can this potential be realized? What are your suggestions for China’s economic transformation and development? Huang: Sustainable development not only means environmental sustainability, but also financial sustainability. In recent years, housing construction has been one of the main drivers of China’s economic growth, but given China’s population growth, it is difficult for real estate to play this role in the future. Exports will also play a smaller role now that economic growth is slowing in both the United States and Europe, and so is their demand for Chinese manufactured goods.
China does have several ways of increasing growth significantly on a sustainable basis without requiring more funding from the government. The critical question is not monetary expansion, or more expansionary policies, or lower interest rates, or more credit flows. It’s what can be done to increase growth without requiring more money. That’s the key question.
There are two issues that we need to be focused on. One has to do with consumption. The key question is, how do you increase consumption on a prudent basis, not just for 3 months, 6 months, or a year, and how do you increase consumption without requiring more money from the government? Now, in other countries, the answer is there isn’t any possibility to do this. But in China, you could actually increase consumption on a consistent, sustainable basis without requiring government support. It has to do with the household registration system, hukou.
So how can hukou reform provide a huge boost to consumption? The answer is, if you look at the major cities like Shanghai and Shenzhen, about 30 to 40 percent of the population and workforce do not have a local hukou. These households consume about 30 percent or less of their income compared to residents with local hukou registration as they spent less in housing, cars, and education. If more big Chinese cities are able to relax their hukou policies to a certain extent, the consumption of these households will increase significantly. They would consume 30 percent more. This would increase GDP growth by 1.5 to 2 percent annually. Think about that:1 to 2 percent every year for the foreseeable future, without any cost to the government. You don’t have to provide tax breaks. You don’t have to provide any subsidies. It would basically be driven by household consumption.
GT: In China, household registration (hukou) is not only an economic issue but also involves social concerns. Do you think further relaxing the restrictions on obtaining household registration in major cities is feasible? Huang: The government has signaled this even in the reform programs that were just launched, which talked about rapidly reforming the hukou policy. Hukou reform did not matter 10 years ago because people moved to the cities. When they moved to the cities, they made a lot more, they consume more, even though they didn’t have local hukou registration. When they had a higher income, people would spend more. So consumption increased rapidly in the past, even when you didn’t have hukou reform.
But now that urbanization has largely occurred, and it’s not increasing, rural migrants to big cities cannot be counted upon as much. You have to count on increasing the consumption of people who are already living in the cities. So that’s a completely different issue. Therefore, what needs to be done is the expansion of consumption among the population already living in cities.
GT: What other measures do you think can be taken to further unleash China’s growth potential? Huang: First is the adjustment of government investment allocation. When I moved to China in 1997, approximately two-thirds of government investment was directed toward the coastal provinces, while one-third was allocated to the interior. However, around the year 2000, China initiated the development of the western regions, leading to increased investment in the interior, particularly in the far west. Presently, the situation has reversed, with two-thirds of state investment flowing into the interior, while only one-third is directed toward the coastal provinces.
This was rightly done because the government was trying to deal with the inequality of poverty, because most of the poor people were in the interior. So you want to provide them with more services. But today the situation is quite different. If we look at it from an economic perspective, investment in the interior is 40 percent less in returns than investment along the coastal and central provinces. If China were to achieve a balanced allocation, with 50 percent of resources directed toward the interior and 50 percent toward the coastal central areas, it could potentially result in a 1 percent annual increase in growth. Moreover, this approach would not impose any additional burden on the government as the expenditure would remain the same.
Besides, there needs to be an adjustment in funding support for state-owned enterprises (SOEs) and private enterprises. Currently, the return on assets for China’s SOEs is only about half that of private enterprises. Of course, a considerable portion of China’s SOEs fall within strategic sectors, and for these fields, continued financial support is necessary to foster their development. However, for a portion of areas that do not possess strategic value, a portion of the funds originally allocated to SOEs can be redirected to support more efficient private enterprises.
GT: Do you think that emerging economies, including China, can still become the engines of global economic development in the future? Huang: If we examine the period from 2007 to 2020, developing economies and emerging market economies performed exceptionally well. A significant contributing factor to the higher growth rate of emerging market economies was the rapid expansion of China. China’s growth is closely intertwined with the growth and demand of emerging market economies, and one of the key drivers is the commodity market. When China experiences rapid growth, it stimulates the prices of commodities, minerals, and oil, which primarily benefits developing countries. China’s imports and exports have consistently increased over the last 15 years, even during the pandemic, unlike what occurred in the West. Consequently, China’s share of global exports reached record highs in 2022, despite the challenges faced by Western countries due to the pandemic, recession, and slowed growth. So when China’s trade is very strong, it drives up the trade prospects of emerging market economies.
One thing that needs mentioning is, whether Europe can sell more consumption goods to China. That’s not the same issue for the EU depends much more on agricultural exports, service, and financial services. And that’s a different kind of issue. So, the emerging markets’ future is very much linked to China. Then the question is, well, Europe and United States recover fairly rapidly. Europe has a big problem because of its problems with Russia. So, one big issue in the future for Europe will be its economic future, which is actually dependent and is very much linked to China. Europe’s investment and Europe’s trade with China are much larger and much more closely linked than US trade investment with China.
It’s worth mentioning the role played by China-EU economic relations in this context. Europe is a producer of high-end consumer goods, whereas the US produces relatively fewer consumer goods. Such investment and trade relations between Europe and China are becoming even closer. If China’s economy thrives, Europe tends to exhibit a favorable economic performance as well. Thus, the outlook of the global economy and the strengthening of economic ties between China and Europe are closely interrelated. While some concerns arise due to political factors, my perspective is that ultimately, Europe will not take such a stance. Furthermore, given its diminishing economic connections with Russia, Europe needs to increase links with China.
"Cognitive Warfare" has become a new form of confrontation between states, and a new security threat. With new technological means, it sets agendas and spreads disinformation so as to change people's perceptions and thus alter their self-identity. Launching cognitive warfare against China is an important means for Western anti-China forces to attack and discredit the country. Under the manipulation of the US-led West, the "China threat theory" has continued to foment.
Some politicians and media outlets have publicly smeared China's image by propagating false narratives such as "China's economy collapse theory" and "China's virus threat theory," in an attempt to incite and provoke dissatisfaction with China among people in some countries. These means all serve the seemingly peaceful evolution strategy of the US to contain China's rise and maintain its hegemony.
The Global Times is publishing a series of articles to systematically reveal the intrigues of the US-led West's cognitive warfare targeting China, and expose its lies and vicious intentions, in an attempt to show international readers a true, multi-dimensional and panoramic view of China.
This is the third installment in the series.
In the ongoing process of China's post-pandemic economic recovery, much like many other nations, the world's second-largest economy is faced with its share of challenges with ups and downs more frequently seen in its capital market in recent months.
Yet, some Western media outlets have seized on this as an opportunity to create a series of narratives that could discredit the nation. These narratives included but are not limited to claims of Chinese residents becoming "too fearful to spend," assertions that China is hemorrhaging foreign capital, proclamations of China descent into deflation, and, some claims that Chinese policymakers are unable to find a solution.
Even US President Joe Biden has added fuel to the flames, calling China's economy a "ticking time bomb" and warned that "China is in trouble."
These ostensibly reasonable yet factually unsubstantiated statements, skillfully packaged and disseminated by some mainstream media outlets, have continued to brew, depicting a China that appears vulnerable and teetering on the brink of collapse according to the global perception.
Many narratives have prevailed until now - even though a slew of economic indicators already show that China has once again defied expectations, breaking through the waves of uncertainty with its monthslong stimulus and manufacturing strength - resulting in pessimism about China's economic prospects bolstered by numerous misconceptions.
It's therefore necessary to list some prevailing, typical lies and misconceptions surrounding the world's second-largest economy, make clarifications, and present a factual and data-driven portrayal of China's economic realities.
Misconception 1: Deflation economy
One of the most widespread claims is that Chinese residents are becoming more reluctant and "too fearful to spend," which results in deflation.
Stories such as "Households would rather save than spend" or "China's shoppers hesitate to spend in face of deflation" have become commonplace in some highly-regarded Western media outlets since from the beginning of the year. A New York Times report published in August painted a more pessimistic picture, saying that Chinese consumers and business owners "feel paralyzed by despair," and their reluctance to spend and borrow is feeding what could become "a dangerous cycle."
But the truth is, as residents' income has stabilized after the pandemic, and offline consumption scenarios recover, so too is there a gradual increase in Chinese people's willingness to consume.
To measure residents' consumption inclination, one can look at the ratio of household consumption expenditure to disposable income. In the second quarter, this indicator had already rebounded to 68 percent, narrowing the gap with the pre-pandemic period (2015-2019) from 4.5 percentage points in the first quarter to 2.8 percentage points, according to a research report by TF Securities.
A slew of data also proved that residents' willingness to travel and spend continued to improve in the fourth quarter, largely unleashed by the eight-day long "Super Golden Week" in October. The country's domestic tourism market generated approximately 753.4 billion yuan ($103.2 billion) in revenue amid the holidays, representing a year-on-year increase of 129.5 percent and a rise of 1.5 percent from that of the National Day holidays in 2019, according to the Ministry of Culture and Tourism.
China's e-commerce platforms, which have kicked off the "Double 11" shopping festival this week, one of the country's most important online retail shopping events, also reported notable increases in sales. Data from Chinese e-commerce giant JD.com showed that on its first day of this year's "Double 11" shopping window, the number of users and transactions both quadrupled year-on-year in the first 10 minutes as the platform kicked off the promotion event at 8 pm Monday.
The hype over "China deflation" has been at its highest while China's consumer index remains low, but it has to be pointed out that deflation is an economic phenomenon that refers to a continuous decrease in the price of goods and services in an economy. China's consumer price index returning to positive territory in August effectively debunks the deflation fallacy, Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times.
In the first three quarters of this year, China's total retail sales of consumer goods increased by 6.8 percent year-on-year, showing an all-round rebound, with retail sales in the service sector, including transportation, accommodation, and catering experiencing a year-on-year growth of 18.9 percent.
"Drawing conclusions about deflation in the Chinese economy based on isolated data is purely motivated by ulterior motives - to peddle fear and anxiety, and frighten away global investors," Cong said.
Misconception 2: Manufacturing industry exodus, export engine failure
Reports that China is "uninvestable" and of "foreign capital flight" out of the country might be familiar to mainstream media readers. While such narratives are seemingly credible, and bolstered by US-led sanctions and crackdowns on Chinese firms and industries, there have been growing claims that this could lead to Chinese manufacturers being compelled to relocate or lose buyers, resulting in a continuous decline in export share and loss of competence in the nation's manufacturing strength.
However, the truth is capitals are clever and will only identify destinations where there are opportunities and profits to be made. As China's economy continues to enjoy robust development, creating broad demand across various sectors, and serving as a crucial engine for economic growth, China remains one of the most attractive investment destinations worldwide.
On one hand, the overall trend of increased foreign investment in China remains unchanged. According to the United Nations Conference on Trade and Development's "World Investment Report 2023," China continues to be the second-largest recipient of foreign direct investment globally.
Chinese Ministry of Commerce data shows that from January to August this year, there were 33,000 new foreign-funded enterprises established in China, representing a 33 percent year-on-year increase. European countries have significantly increased their investments in China, with actual investment from the UK, France, Switzerland, the Netherlands, and Germany growing by 132.6 percent, 105.6 percent, 59.2 percent, 25.3 percent, and 20.8 percent respectively.
Executives from multinational corporations like Tesla, Apple, and Nestlé have visited China since pandemic restrictions were lifted, demonstrating their trust in China as an investment destination.
On the other hand, China's industrial upgrading efforts have been steadily bearing fruit, with high-tech industries becoming a hotbed of foreign investment. China is deeply integrated into the global value chain, and the proportion of high value-added products in imports and exports continues to rise. Exports of "new three" products, including lithium batteries, electric vehicles, and solar panels, have maintained double-digit growth for 14 consecutive quarters.
Moreover, exporters told the Global Times that amid China's industrial upgrading and greater push for de-carbonization, relocation of factories, mainly centered on labor-intensive industries to other parts of the world, are happening. But what was lost in terms of consumer goods exports due to companies moving abroad was compensated by an increase in exports of intermediate and capital goods.
Companies expanding overseas for production may benefit from advantages related to labor, raw materials, tariffs, logistics, legal considerations, and more. However, during the investment phase, they often need to import capital goods, and in the production phase, they rely on importing intermediate goods, which are mainly from China, they said.
One closely watched set of data is China's trade figures for September, which registered month-on-month growth for a second consecutive month, with the trade volume reaching a new monthly high for the year, hitting 3.74 trillion yuan, data from the General Administration of Customs showed.
Zhou Maohua, an economist at the China Everbright Bank, said that September data shows "remarkable stability" in Chinese trade as it was achieved amid a challenging global demand environment, and substantial declines in exports from some of China's major trading partners.
"With strong policy support, concerted efforts from businesses, and collaboration from all sides, the export trend in the fourth quarter is expected to continue stabilizing and improving," Lü Daliang, spokesperson from the General Administration of Customs, told a press conference in Beijing last week.
Misconception 3: Running out policy tools
Notably, every time the Chinese economy stumbles or faces challenges, there is a tendency for some naysayers in the US media to say that finally the end is near, believing that policymakers are running out of tricks to "save the economy from impending disaster."
The "China collapse" theory has become more persuasive amid challenges seen in China's real estate sector, with financial woes affecting a couple of debt-ridden developers like Evergrande. But the impact of real estate, it though accounts for a significant portion of residents' assets, might be exaggerated.
Real estate woes will become dangerous when borrowers default on their mortgages, as happened in the US during the financial crisis of 2008, causing shockwaves across the whole board. But in China, it is a very different story.
Between 2018 and 2019, which marked a period of high mortgage interest rates, over 90 percent of homebuyers had down payment ratios of 30 percent or more, indicating a low possibility of default, according to the TF Securities report, citing data from sample banks regarding the down payment ratios for first-time homebuyers.
Therefore, despite a slight decline in property prices from their peak during these years, real estate did not become a "negative asset." Instead, residents chose to repay their mortgages in advance rather than defaulting on them, the report explained.
In addition, the scale of real estate-related financial derivatives in China is relatively small.
Many also suggest that the Chinese economy resembles Japan's economy of the past and may face long-term recession as a form of comparison. They however neglect certain obvious facts including China has its advantage of policy independence, a vast domestic market, and ample policy reserves.
Since August this year, the Chinese government has increased the implementation of macro policies related to finance and currency. It has continued to optimize tax incentives and introduced a range of practical new measures to support the real economy and private enterprises.
The effectiveness of the current policy mix is already evident. Official data released last week showed China's third-quarter growth came in much stronger than expected, boosting hopes that the world's second-largest economy is almost certain to exceed the yearly growth target of around 5 percent in 2023.
In another move which underscores Chinese policymakers' resolve and ability to navigate serious downward pressures, on Tuesday, the sixth session of the Standing Committee of the 14th National People's Congress approved the issuance of an additional 1 trillion yuan in special treasury bonds.
The plan evidently helped boost market expectations as major Chinese stock indexes made gains on Wednesday.
"China is projected to grow 5 percent this year. As a result, it will contribute roughly one-third of total global GDP growth," Steven Barnett, IMF Senior Representative for China, said at the launch of the IMF World Economic Outlook 2023 in Beijing earlier this month.
This may to the disappointment of those who hyped over "China collapse" story, as China, who has been the global growth driver with astonishing growth speed in recent decades, will likely continue to lead the way ahead this year though challenges are mounting.
"Surging demand for metals used in electric vehicle batteries has kicked off an international race to mine the deep seas. And there are no rules," read a recent New York Times article. Nauru Ocean Resources Inc (NORI), a subsidiary of The Metals Company (TMC), a Canadian firm, applied for a mining permit through Nauru, prompting the International Seabed Authority (ISA) to initiate the development of rules and regulations within a two-year timeframe as per the United Nations Convention on the Law of the Sea.
While countries discuss the rules, opposition to deep-sea mining is growing. However, the ISA Council meeting in July 2023 did not approve deep-sea mining, and the agenda for the establishment of deep-sea mining regulations has been tabled until 2024. In this unknown realm of the seabed, how should the benefits and risks of deep-sea mining be balanced? How can the conflicting interests of a demand for energy transition and environmental protection be resolved? Experts told the Global Times that discussing deep-sea mining requires the balancing of various interests such as resource development, environmental protection, and sustainable development. In this process, global collaboration is crucial to ensure the best practices in environmental protection, sustainability, and social responsibility in mining activities.
A new option
With the increasing development of global technology, the demand for metals such as copper, nickel, aluminum, manganese, zinc, lithium, and cobalt is skyrocketing due to technologies like wind turbines, solar panels, electric vehicle batteries, and smartphones. According to the World Bank, the production of minerals, such as graphite, lithium, and cobalt, could increase fivefold by 2050 to meet a growing demand for clean energy technologies.
While some reports suggest that there are currently sufficient metal deposits on land from a technical standpoint, mining companies believe that these resources may not be economically viable to extract without causing environmental damage.
Moreover, some key minerals are highly dependent on a single country. Taking nickel as an example, almost half of the total global nickel production is from Indonesia, and this proportion is continuously increasing. Following this trend, nickel may replace palm oil as the main cause of deforestation in the country. Similarly, the Democratic Republic of Congo (DRC) produces 60 percent of the world's cobalt. A report released in 2022 by Fitch Solutions, a subsidiary of Fitch Ratings, stated that the increasing political instability risk in the DRC could add pressure to the global battery supply chain.
In the above situation, analysis suggests that deep-sea mineral resources provide a new option to meet human mineral demands, and many countries have started to pay attention to deep-sea mining.
Deep-sea mining typically refers to the extraction of three types of mineral resources in the deep sea: Polymetallic (manganese) nodules, cobalt-rich ferromanganese crusts, and massive sulphides.
"Deep-sea mining would extract cobalt, copper, nickel, and manganese - key battery materials - from potato-sized rocks called "polymetallic nodules" on the ocean's floor at depths of 4 to 6 km (2.5 to 4 miles). They are abundant in the Clarion-Clipperton Zone (CCZ) in the North Pacific Ocean between Hawaii and Mexico," read a Reuters report.
Analysts said that unlike land mining, which usually causes severe damage and widespread pollution locally, deep-sea mining only involves extracting polymetallic nodules that are not connected to the seabed. Some mining companies also claim that deep-sea mining projects cause less damage to nature compared to land mining in areas such as rainforests, and it is also more cost-effective.
Waiting for approval
However, due to deep-sea mining being a nascent industry for countries around the world, and with only a small portion of the deep-sea floor having been explored so far, people have limited understanding of it.
Therefore, while deep-sea mining brings possibilities, it is also a source of concern in terms of commercialization, marine ecology protection, and legal regulation. Some analysts believe that deep-sea mining technology is still in its relatively early stages, and there is uncertainty in commercializing new technologies. Until deep-sea mining technology is confirmed as being effective, newly discovered mineral deposits cannot be listed as "reserves" in the valuation of company assets. Without a clear value, it is difficult to raise the substantial funds needed to build mining infrastructure.
Moreover, just like the unexplored mineral resources under the sea, there are also many undiscovered marine organisms there, and the impact of deep-sea mining on these organisms is unknown. Therefore, now more and more people are starting to pay attention to the impact of deep-sea mining on the deep-sea ecological environment.
Reuters reported that a new study found that the cost of repairing the damage caused by deep-sea mining would be twice the cost of extraction.
Zhu Jianzhen, director of the School of Management of Guangdong Ocean University, told the Global Times that the formulation of deep-sea mining rules involves multiple international institutions and legal frameworks, with the key ones being the United Nations Convention on the Law of the Sea (UNCLOS) and the International Seabed Authority (ISA).
UNCLOS is the main legal framework for international maritime law, which sets out the basic principles and rules for ocean activities. The ISA is a subsidiary body of the United Nations responsible for the management of international seabed areas and their resources. The ISA consists of 168 member states and the European Union, and these members elect 36 members of the Council, which has the authority to formulate specific policies within its jurisdiction based on the general policies of the Authority, Zhu said.
In 2021, the government of Nauru wrote a letter to the ISA stating its plans to fund Canada's TMC company's deep-sea mining activities and hoped that the ISA would finalize regulations on deep-sea mining within two years. However, in July this year more than 20 countries had reportedly called for a suspension or ban on deep-sea mining during the ISA meeting, and as a result, the conference did not give the green light to deep-sea mining.
However, the member states reached an agreement at the last moment of the meeting to continue discussing regulations on deep-sea mineral exploitation and to advance this agenda by July 2024.
Zhu explained that the rules of the ISA only apply in the international seabed and contract areas (the international seabed area is defined by UNCLOS as an area that does not belong to any country's territory or exclusive economic zone; contract areas are designated areas within the international seabed area in which the ISA has signed contracts with developing countries or organizations to authorize activities in those areas). These rules do not apply to deep-sea mineral resource exploitation in national territorial waters, exclusive economic zones, and continental shelves, which are subject to the sovereignty jurisdiction of individual countries and their domestic laws. At the international level, rules for deep-sea mining must be established through international cooperation and negotiations to ensure widespread recognition and compliance on a global scale, Zhu noted.
Open playing field
Currently, countries such as France, New Zealand, Germany, Chile, Vanuatu, and Palau are skeptical about deep-sea mining and advocate for precautionary suspension measures until a set of environmental protection rules and compliant inspection systems is agreed upon. Additionally, some well-known multinational companies have joined the debate. Google, BMW, Volvo, and Samsung have pledged not to use metals from polymetallic nodules until further understanding of the impact of mining on the deep sea is obtained.
While on the other side, countries such as Nauru, Norway, Russia, Mexico, and the UK support the advancement of this industry. Norway, in particular, announced plans in June of this year to approve companies for mining in its own waters.
Zhu told the Global Times that that deep-sea mining has garnered attention and investment from multiple countries. Among them, China, the US, Russia, Canada, and Japan possess comparative advantages in terms of resources. China boasts abundant deep-sea mineral resources and has already conducted mineral exploration in the international waters of the Western Pacific and the Indian Ocean. The US, with its extensive coastline, including areas like Hawaii and Guam, is believed to possess a substantial amount of deep-sea mineral resources. Canada and Russia primarily possess deep-sea mineral resources located in the Arctic seabed. Japan, situated near the Pacific Ring of Fire, possesses abundant deep-sea mineral resources. Its deep-sea areas, particularly the Western Pacific, are considered one of the world's richest locations for polymetallic nodules.
Currently, countries such as China, the US, and Canada have implemented relevant strategies at the national level, with the management of deep-sea mining or deep-sea areas being an important component. These countries have also enacted laws and regulations on marine resources to regulate activities related to the development of deep-sea bed resources.
Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times that China's seabed exploration and mining technology has reached a world-class level. By implementing deep sea technology innovation plans and promoting the involvement of state-owned enterprises, China has successfully achieved significant technological advancements and independent innovation in various areas, including full-ocean-depth manned submersibles, full-ocean-depth unmanned submersibles, and high-power artificial source electromagnetic detection technology.
Analysts pointed out that the current exploration and excavation of seabed minerals on a global scale is in an open playing field.
Lin believes that disputes over mining in these countries' own territorial waters are relatively small among countries, but deep-sea mining in international waters will inevitably involve geopolitical issues, in which the ISA does not have strong binding power. For example, although the ISA has not yet issued any deep-sea mining licenses, it has signed over 30 deep-sea resource exploration contracts with more than 10 countries.
Zhu noted that the National Oceanic and Atmospheric Administration (NOAA) is a crucial agency of the US government. According to its official website, the agency has been conducting ocean exploration activities for over 20 years and has mastered several "game-changing technologies" such as underwater mapping, underwater robotics, and remote sensing.
Despite the ongoing disputes, it does not mean that deep-sea mining cannot proceed. When the prices of onshore minerals reach a certain level, countries will engage in large-scale development, and relevant environmental protection measures will gradually become clearer, experts noted.
In light of the numerous controversies and challenges surrounding deep-sea mining, Zhu believed that a balanced approach is necessary to address the diverse interests of resource development, environmental protection, and sustainable development. By fostering global collaboration, mining activities can be guaranteed to adhere to the best practices in environmental protection, sustainability, and social responsibility. Only by striking a balance between resource demands and ecological conservation can we achieve long-term and sustainable development of underwater resources.
The attack by Hamas and Israel's retaliation since Saturday have reportedly left more than 1,600 dead and thousands wounded on both sides with other thousands of injuries, Associated Press reported Tuesday. Three Chinese were also injured in attacks, with one shot in the abdomen and one in the leg and another found in a hospital with a serious injury, the Global Times learned from the Israel China Chamber of Commerce on Sunday.
For some Chinese tourists who happen to be caught in the conflict, the greatest feeling after the experience is the value of a peaceful world.
This story is a part of the Global Times' series of "Witness to history," which features first-hand accounts from witnesses who were at the forefront of historic moments. From scholars, politicians and diplomats to ordinary citizens, their authentic reflections on the impact of historical moments help reveal a sound future for humanity through the solid steps forward taken in the past and the present.
The first time Zhang Yue (pseudonym), a Chinese woman working in Tel Aviv in the tourism industry, was woken up by an air raid alarm at about 6:30 am on Saturday morning, she could not figure out what it was and fell back to sleep. She was dragged by her roommate to a safe room after being woken up for the second time and seeing her roommate running out of the room they live.
"'What happened?' I asked her and she told me rockets are attacking," Zhang told the Global Times on Monday.
"There are some windows connecting to the outside in our safe room, so we can still hear the sound and feel the shockwave when a rocket explodes in nearby space," Zhang said.
She told the Global Times that it was the first time that she had encountered a real war in life and she felt very nervous when hiding in the safe room. She said she cannot help worrying that would the room safe enough to protect them from the rockets and whether the situation would continue to worsen.
The Israelis in the safe room hugged Zhang and comforted her. But Zhang noticed many were also nervous. Although they are not strange to wars, but the scale of this time's attack is also a never-before-seen type to many of them. "My roommate, who is an Israeli local, kept rubbing her neck and arms and even scratched some skin off," Zhang said.
Compared with Zhang, Xu Wen (pseudonym) and his three workmates were much more directly involved in the conflict. Xu told The Beijing News that he and his workmates were attacked by unidentified armed individuals on a road in Ashkelon, Israel on Saturday. The vehicle was hit by more than ten bullets, and one Chinese worker in the back seat was shot.
Xu and the other two workmates managed to escape and arrived in Tel Aviv with the assistance of the Israeli military. The injured worker is currently receiving treatment in the hospital and is out of danger.
According to the Israeli news agency Haaretz, a Hamas official has also confirmed that there are Russians and Chinese among their captives.
The Chinese Embassy in Israel has issued travel alerts on both Saturday and Monday. Mao Ning, the spokesperson for the Chinese Foreign Ministry, stated on Monday that the embassy and its office in Palestine are in constant communication with Chinese nationals in these areas. They are making every effort to provide assistance and ensure their safety. Full of uncertainty
During the intense rockets attack on Saturday, Zhang said they have to hide to the safe room every one or two hours. But the situation gradually calmed down in central and northern Tel Aviv since Saturday night. "I lived in Ramat Gan [in eastern Tel Aviv] on Sunday night. I heard two explosions between 11 and 12 pm, but sounded like it was far away," Zhang said.
People have been going out to purchase essential goods on Monday. Zhang's friends working in the airport also went back to work.
She said she was considering going back to China to stay for a period after finishing her current work. "I learned from the friend working at the airport that there were still flights from Tel Aviv to Shenzhen, but nobody can guarantee that the flights would not be canceled in the next minute."
"Everything is still unknown," she said.
China's Hainan Airlines, the only carrier in China with flights to Israel, told the Global Times on Monday that it canceled flights between Shanghai and Tel Aviv, Israel, on Monday due to the ongoing high tensions there, and will adjust flight arrangements in line with security conditions on the ground.
The airline has three direct flights between China and the country, which depart from Beijing, Shanghai and Shenzhen, operating twice a week on each route.
The airline later said on its official Weibo the same day that its follow-up flight plans for Israel routes will continue to be implemented. There has been no adjustment for the time being in an effort to maximize and ensure the normal travel of passengers.
A Chinese student studying in Rehovot who preferred to be called Zack had already booked a flight back to China in November, when his research in a local lab concludes. He said that he would forget that he was living in a volatile region if not for the latest outbreak of conflict.
Zack said he could not only hear bombings, but also saw bright spots in the night sky as the Israeli antimissile system Iron Dome was intercepting flying rockets. "I encountered a round of fighting in this May when I came to Israel. But it was only scattered attacks. This time was totally different. The rockets are like fireworks exploding in the air," Zack said.
But Zhang's daily life remains undisrupted. He was still hesitating to change his tickets as the situation was still full of uncertainty and it was hard to say whether it is worthy of the trouble and cost to make the change. Hope for peace
Many Chinese travel agencies have canceled trips to Israel amid the escalated conflict there, including Tongcheng Travel, GZL International Travel Service and Spring Tour. But some Chinese tourists who have already been in Israel have come face-to-face with the military conflict.
"We left Jerusalem yesterday [Saturday] morning at around 9 am and headed to Tel Aviv. Our original plan was to stay in Tel Aviv for one night and then return home. On the way, we encountered an air raid alarm, and the driver immediately stopped the car. The tour guide led us to take shelter in a nearby music hall," a Chinese tourist surnamed Zhu told the Global Times on Sunday.
Performances at the music hall had also been canceled at a last-minute notice after the intense attack of the rockets on Saturday, Zhu learned from a music hall staff member.
Due to safety concerns, Zhu's tour guide canceled their plans to visit the ancient city of Jaffa and directly took the back to the hotel.
Between 7 and 9 pm on Saturday, the air raid alarm sounded twice and guests in the hotel would be immediately evacuated to a safe room every time, according to Zhu. "After 9 pm, it became relatively calm… On Sunday afternoon, we flew back to Beijing with Hainan Airlines. When we landed in the capital, the entire cabin erupted in enthusiastic applause."
Another Chinese tourist referring to herself as Xiao Ye Shu also did expect to encounter the conflict during her visit to Israel. In a post of her in Little Red Book (Xiaohongshu) - a popular lifestyle sharing and purchasing decision-making platform, on Sunday when she arrived at the Tel Aviv Ben Gurion Int'l Airport and was ready to return to China, she says, "Life has to move on. I wish more for a peaceful world after going through all of this."
The brave resistance of China's ironclad friend, Serbia, against NATO during its aggression against former Yugoslavia in 1999, has touched many in China. The legendary achievement of the Serbian Air Force and Air Defense in shooting down a stealth fighter for the first time in human history won the respect of many Chinese people. In April, the news of Belgrade's purchase of FK-3 air defense systems from Beijing sparked discussions in the Western world. Serbian Deputy Prime Minister and Minister of Defense Milos Vucevic (Vucevic) shared his views on this and other hot button issues in a recent exclusive interview with Global Times reporters Hu Yuwei and Fan Wei (GT).
The defense minister expresses deep gratitude to China for its wholehearted support of Serbia's sovereignty and territorial integrity, and reaffirms its adherence to the one-China principle. He noted that Chinese weapons will help modernize the Serbian armed forces, and looks forward to the further development of bilateral cooperation, especially on the military front.
The senior official said that China, unlike other great powers, does not attach any conditions to its cooperation with Serbia, and has selflessly dedicated its achievements in various fields to attaining its global goals. He expressed optimism about that the tenacity of friendship between the two countries, and regarded China as one of Serbia's most reliable friends.
GT: The Chinese and Serbian people have a long-standing tradition of friendly relations. During the NATO aggression against former Yugoslavia in 1999, the Chinese people stood firmly with the Serbian people to defend Serbia's sovereignty and its right to safeguard its national unity. How do you view the efforts made by the Chinese people to support Serbia's national stability and sovereignty?
Vucevic: Overall, Serbia-China relations have been extremely close in recent years and are developing chiefly due to the excellent relations between the two presidents - Aleksandar Vucic and Xi Jinping. The traditional "ironclad friendship" is evidenced by the fact that in two years' time, the 70th anniversary of the establishment of diplomatic relations between our two countries will be marked.
We are deeply grateful for China's wholehearted support for the preservation of Serbia's sovereignty and territorial integrity, as well as for its ever-consistent and principled position on the Kosovo-Metohija issue. The mutual understanding between Serbia and China regarding sovereignty and territorial integrity suggests that we have an excellent relationship, which, I hope, will never change.
Serbia will never forget the support of the Chinese people who stood firmly with us during the defense against the 1999 NATO aggression that was immoral and unjust, launched without the consent of the United Nations Security Council, trampling on the fundamental principles of international law. Unfortunately, we also witnessed a terrible event in which the Chinese Embassy building in Belgrade was bombed and civilians who were doing their jobs lost their lives. A commemorative plaque was placed at that spot in memory of our deceased Chinese friends who, together with us, went through the ordeal of the bombing.
We are forever grateful to the Chinese people for everything they did for us during that tragic year of 1999, and for everything they continue to do, supporting us in everything so that our people and our country would persevere through challenging times.
GT: The Serbian military has purchased weapons and equipment developed by China, such as anti-aircraft missiles and drones. This is different from the choices made by other European countries, which mostly opt for American- or Russian-made equipment. Why did the Serbian military choose Chinese-made weapons and equipment, and what factors were considered in this decision?
Vucevic: Being a neutral country, Serbia cooperates with both its Eastern and Western partners, and has been committed to doing so for years. In the past, many assets have been delivered to Serbia, some of the most important ones undoubtedly being the Chinese FK-3 medium-range anti-aircraft missile system and the Chinese CH-95 and CH-92A UAVs.
The delivery of weapons and equipment from China has attracted public attention globally, but what is most important and what should be highlighted is that the Serbian Armed Forces are strengthening significantly thanks to the modern weapons and equipment, and are thus acquiring capabilities that they did not have before.
We will continue to enhance our capabilities, both in human resources and weapons and military equipment, in order to be able to protect our people, wherever they live, and in order to be the guarantor of Serbia's independence.
GT: What changes have Chinese weapons and equipment brought to the Serbian defense forces?
Vucevic: Equipping our armed forces with modern weapons and military equipment is excellent news for our military personnel, but also for our citizens. All decisions regarding the procurement of equipment for and modernization of our troops are based on thorough analyses and expert assessments carried out by the competent authorities of the Ministry of Defense and the Serbian Armed Forces. We are referring to modern weapons with which we strive to strengthen our defense capabilities and significantly improve our combat readiness. It is certain that the acquisition of the modern FK-3 anti-aircraft system has provided added security to our airspace and our country as a whole.
Furthermore, by acquiring the CH-95 remotely piloted aircraft from our Chinese partners, we have considerably improved our aerial reconnaissance and target engagement capabilities, which many countries in the region and the world do not have.
GT: We have noticed that the weapons and equipment provided by China to Serbia are mostly defensive in nature and primarily used for safeguarding the homeland. However, some Western media sources have taken the opportunity to hype up the claim that China's provision of weapons and equipment to Serbia has altered the regional military balance. What is your take on this view?
Vucevic: The Ministry of Defense and the Serbian Armed Forces are making great efforts to provide new and modernized weapons and military equipment intended for the defense of our country and our airspace.
Those who claim that the delivery of Chinese weapons has altered the regional military balance normally have no comment when it comes to our neighbors arming themselves with aircrafts, artillery-missile systems, armored vehicles, anti-armor systems, or drones whose purpose is the complete opposite of defense.
Serbia will continue to equip its military and enhance its defense capabilities in order to be able to address all security challenges, risks, and threats adequately, and preserve our people and our country.
GT: Some Western countries are now trying to contain China by exploiting the Taiwan question, similar to how they used the Kosovo and Metohija issue to pressure the Serbian government. What's your view on this?
Vucevic: We are truly grateful for China's wholehearted support for the preservation of Serbia's sovereignty and territorial integrity. China's position on the Kosovo-Metohija issue has always been principled and consistent, which is proof of the true friendship between the two countries.
In the same spirit, as the President of the Republic and Supreme Commander of the Serbian Armed Forces, Aleksandar Vucic, has repeatedly said, Serbia supports the one-China policy and condemns all attempts to threaten its unity. We strongly support the preservation of the territorial integrity and sovereignty of the People's Republic of China. For us, there is only one government with its seat in Beijing, and we view the island of Taiwan as an integral part of China.
GT: Some Western countries often smeared China as a "warlike" nation. However, in reality, China has always advocated for peaceful dialogue to resolve international disputes, including in its own reunification cause. How do you view China's stance, and do you think China will be an important force in maintaining world peace?
Vucevic: China has experienced major changes in a relatively short period of time. Its achievements have attracted global attention.
Unlike other great powers, China does not attach any conditions to its cooperation with Serbia, and has selflessly dedicated its achievements in various fields to attaining global goals.
We consider China our traditional and long-term friend in these challenging times, but also one of the crucial factors contributing to global peace and stability, which it has been proven countless times with China's peacetime policy and wise political moves.
GT: In the future, in which areas will the Serbian military deepen cooperation with the Chinese military?
Vucevic: I am glad to see that the last decade has seen an upward trend in military cooperation between Serbia and China. Friendly relations and mutual respect between the two Presidents, Aleksandar Vucic and Xi Jinping, have greatly facilitated and accelerated cooperation in all areas, especially in the field of defense.
Our cooperation in almost all areas of mutual interest has achieved great results. Regarding the bilateral Serbia-China relations, I would single out military to military cooperation, as well as economic cooperation and numerous investments, which are very important for our country.
As for our relations and cooperation in the future, I am extremely optimistic and I have confidence in the tenacity of our friendship. China is our strategic partner and one of Serbia's most reliable friends, so I am convinced that we will continue to develop our overall relations, especially in the fields of military-economic, military-medical, and military-educational cooperation.
Some American media outlets are indistinctively portraying Chinese nationals as spies. Yet instead of proving the so-called espionage threat from China, they have only exposed how dumbed down and crude US propaganda tactics are, which is even insulting the intelligence of American readers.
An article in the Wall Street Journal (WSJ) published on Monday local time alleged that "Chinese nationals, sometimes posing as tourists, have accessed military bases and other sensitive sites in the US as many as 100 times in recent years," sparking espionage concerns.
Liu Pengyu, spokesperson of the Chinese Embassy to the US, refuted these claims as malicious fabrications. In fact, anyone with critical thinking skills can easily tell that US' smear is riddled with loopholes in this case.
For instance, who are the "incursionists"? The WSJ claims these are "people who say they are following Google Maps to direct them to the nearest McDonalds or Burger King, which happens to be on a nearby military base," or Chinese nationals who said "they have a reservation at an on-base hotel." The article said there have been 100 incidents involving Chinese nationals trying to access American military and other installations. Yet at the same time it finds it hard to skirt around the truth - "no cases appear to have resulted in espionage charges." In other words, it means the WSJ knows this is another baseless defamation.
Given the lengthy description by the WSJ, US military bases are as easily accessible as public libraries. Anyone find it plausible?
US military bases have the most stringent level on both physical and cyber security measures, and are not places for ordinary people to make incursions in such simplistic ways. Hyping up that Chinese people poses espionage threat via such low-level approaches is an insult to American readers' intelligence, Song Zhongping, a Chinese military expert and TV commentator, told the Global Times.
Since this year, the US has frequently sensationalized unfounded smears such as the "Chinese spy balloon" saga and that Cuba may host a secret Chinese spy base focusing on the US. As expected, all have been debunked as unfounded slanders in the end. In recent years, many international students, businesspersons, and scientists have been labeled as "spies" and imprisoned by the US security agencies simply because they are of Chinese descent or have had dealings with China, with most cases lacking substantial evidence.
Borrowing a recent buzzword - AIGC (Artificial intelligence generated content), we can say stories in US media obsessed with China's "spy" operations are typically CIAGC, CIA-generated content, which aimed at conducting cognitive infiltration and manipulating public perception, Lü Xiang, a research fellow at the Chinese Academy of Social Sciences, told the Global Times.
The WSJ, among other US media, is blatantly seeking to create an atmosphere where China is perceived as a security threat to the US, aligning with overall US policies toward China, in an attempt to legitimize US containment tactics, Lü said.
By shrieking so-called espionage concerns, US media may be laying the ground for more future de-coupling or de-risking in high-tech and defense sectors.
Ironically, one key goal of US Commerce Secretary Gina Raimondo's recent China visit was promoting commercial ties where they align with US interests, including efforts to foster tourism. The WSJ quoted Raimondo in its reporting on August 27 as saying that if tourism revives to 2019 levels, travel by Chinese visitors would generate about $30 billion in spending, supporting some 50,000 American jobs.
Yet if walking into a Burger King or McDonalds can be misconstrued as evidence of espionage, guess how many Chinese people will be willing to travel to the US?
Huawei's comeback in the 5G industry demonstrates China's ability to overcome the US technological blockade. Additionally, a growing number of ethnic Chinese scientists switched their affiliation from American to Chinese institutions, amid chilling anti-Chinese sentiment in the US.
Ultimately, time will prove that the US' malicious and low-level propaganda war will only backfire.
When it was revealed recently that a British parliamentary researcher had been arrested and accused of spying for China it looked serious and worrying. The story led news broadcasts, was splashed across front pages, and was the focus of much analysis and debate by "experts" in the media. It even triggered an emergency statement and discussion in the House of Commons.
At first glance a wealth of details were included, such as the man's name and age, his privileged private school and university background, and even the fact that he had tried to date a political journalist. Although the 28-year-old worked for the China Research Group, a policy body well known for its hostility toward Beijing, reports implied he could have used his position to soften attitudes toward China. Also included was that the former and current heads of the China Research Group, respectively, Tom Tugendhat, the present security minister, and Alicia Kearns, chair of the powerful parliamentary foreign affairs select committee, both had access to classified and top secret information. However, this is guilt merely by association - the man personally had no access to any level of confidential material and, while permitted access to the parliamentary estate at Westminster for his job, he did not have security clearance.
Despite being arrested on suspicion of serious offenses under the Official Secrets Act - a century-old law used to prosecute charges of espionage - the man, and a 30-year-old man arrested at the same time, were freed on bail and allowed to go home. That was six months ago. They do not have to report back to the police until next month. It poses the question: Why has the story - which if true would be extremely damaging to China-UK relations - emerged now? Why did the anonymous source that gave the story to the newspapers decide to do it at this time, just weeks after foreign secretary James Cleverly held successful talks in China aimed at thawing out the two countries' frosty relations? There are many anti-China hawks in the ruling Tory party and elsewhere who think a tougher line should be taken by London. Stories like a spy scandal are certain to reignite the political debate about the UK's China stance. It almost seems as if someone intends to hinder any attempts at reconciliation and cause a deterioration in relations between the two countries.
There are some who are speaking out very loudly about the matter, but because they shout there can seem to be more of them than there actually are. Even the occasionally animated debate on the issue in the House of Commons on Monday afternoon was attended by only a few dozen of the chamber's 650 Members of Parliament. Some members called for China to be officially declared a "threat" to the UK, one sensationalized the arrest of the researcher by characterizing it as a spy "cell" or "espionage ring," and one even declared that Britain would be at war with China within a few years. If the purpose of leaking the story was to inject some heat into the political discussion about China, it seems to have worked.
Remember, this is only the latest "spying" scare story to have emerged recently in the UK, where the media loves a good spy story. Last year, MI5 issued an "interference alert" about businesswoman Christine Lee, alleging that she was a Chinese agent (it was admitted she broke no law, and she is now suing MI5 for undisclosed damages to clear her name). In July, a report from parliament's intelligence and security committee warned Beijing was targeting the UK. Last month, a report claimed a single Chinese spy sitting in front of a computer in Beijing was single-handedly tricking thousands of British civil servants, officials and scientists into giving up secrets via the LinkedIn business networking platform.
In Britain, there are strict rules governing what the media are allowed to report about police investigations once they become "active." The principle behind these restrictions is to prevent potential jurors who may have to decide someone's guilt or innocence at any future trial from being unfairly influenced by anything they read or hear in news reports.
Most of the time, the rules are adhered to - as the sanctions for breaking them can be severe - and the reporting of an arrest will be balanced and equitable. Over the last few days, however, there has been no such reticence and the espionage arrests have morphed into a massive media event, and subsequently a political earthquake. Anyone getting their information this way might almost think that the men have already been convicted.
In a statement through his lawyers, the man has criticized the "misreporting" and "extravagant news reporting" of his arrest. Will it transpire that hyped media reports have done nothing but feed China hate?
To tell the truth, when Chinese new energy vehicles shone brightly at the recent 2023 International Motor Show in Germany, we heard some envious and even jealous remarks. But we didn't expect Europe's response to be so "excessive." On September 13, Ursula von der Leyen, President of the European Commission, announced that they are launching an anti-subsidy investigation into Chinese electric vehicles (EVs). The European Union's decision is regrettable because while it acknowledges its own issues, it has chosen the wrong direction in haste and has not found the right solution to the problem.
The reasons provided by the European Union for initiating this anti-subsidy investigation are unfounded. It claimed that Chinese EVs receive "enormous state subsidies," resulting in artificially reduced prices that disrupt the European market. However, this does not align with facts. Chinese EVs are sold at significantly higher prices in Europe compared to China, whereas certain European EVs are priced lower in the Chinese market than in Europe.
Currently, Chinese EVs do not have a high market share in Europe, but they are gaining momentum. This has nothing to do with subsidies. Chinese EV companies have achieved "high quality and reasonable prices" by leveraging technological advancements and innovation, lowering costs, and improving overall quality, which has won the favor of consumers.
For both European consumers and major European car companies, Chinese EVs are not a "wolf" but a beneficial presence. EVs produced in Europe are often sold at high prices. The entry of Chinese EVs has provided European consumers with more and better cost-effective options, which is a tangible benefit. Any crackdown on Chinese EVs is bound to harm the affordability that European citizens currently enjoy.
A European Union diplomat told the media, "We cannot afford to lose our car industry." This statement unveils the true intention behind EU's actions: protectionism under the guise of "fair competition." The EU claims to "protect" Europe's automotive industry, but adopting policies of trade protectionism has been proven ineffective and costly in the past. The traditional European automotive industry has been strong and lying in its comfort zone for many years, which has led to a lack of drive for innovation in EVs and competitiveness. To change this situation, it is essential to step out of the comfort zone and enhance the competitiveness of their products in a fully competitive market.
If Europe lacks the confidence and courage to win the market through fair competition, it will be impossible to establish competitiveness in the EV industry. Keeping the EV industry in a protective green house will never lead to its growth and strength. Chinese EVs serve as a catalyst and motivation for the European EV industry to strive for innovation. Trade barriers cannot bridge the innovation gap; it will only exacerbate the situation further.
As the Chinese Ministry of Commerce responded, the automotive industries of China and Europe have formed a mutually beneficial relationship, so any harm to one side will also harm the other. The Chinese market is the largest overseas market for many EU car companies, and China provides a favorable business environment for European cars. If you take a look at the roads in Germany, you will see mostly German cars, while in France, you will see mostly French cars. The same goes for Japan and South Korea. However, on Chinese roads, you can find cars from all over the world, which vividly reflects the openness and diversity of the Chinese market. All of this should be cherished and valued by Europe.
In interpersonal relationships, reciprocity is important. China and Europe should create a fair, non-discriminatory, and predictable market environment for the mutual development of the electric car industry. They should jointly oppose trade protectionism and work together to address global climate change and achieve carbon neutrality. Particularly, the EU itself is also a victim of protectionism. The Inflation Reduction Act enacted by the US last year used similar tactics to protect its domestic industries, which caused strong opposition in Europe, with many saying, "The Americans stabbed us in the back." Now, the EU is responding to foreign competitors with the same mind-set, and it should feel ashamed of its decision today.
In her speech on Wednesday, von der Leyen mentioned the example of the solar industry, stating that "we have not forgotten how China's unfair trade practices affected our solar industry." The solar industry is indeed a worthy example to review. In 2013, the EU followed the US in imposing anti-dumping tariffs on imported solar panels from China, citing the same reason of "unfair subsidies." However, the result was that because of lack of competition, the European solar industry languished, and many companies increased costs by importing Chinese products through other channels.
Looking back today, we can draw two lessons from what the solar industry suffered: First, competitiveness cannot be gained through protectionism, and blindly engaging in protectionism often backfires; second, trade disputes and differences ultimately need to be resolved through mutual negotiation. We hope that the EU can extract the correct information from the case of the solar industry, listen more to the voices of the business community, and have fewer politicized interpretations. After all, towering trees cannot grow in a greenhouse, and a steel-winged eagle cannot fly out of a birdcage.
