China’s president would like to be seen as the boss who cleans up in his own shop by weeding out corruption among the country’s elites. But Mr. Clean now has a serious problem. The Panama Papers, published by Süddeutsche Zeitung along with the International Consortium of Investigative Journalists exposed the shady financial dealings of at least eight family members of China’s ruling class who set up shell companies in tax havens to hide their wealth. Among those implicated is Xi’s brother-in-law Deng Jiagui.
True, China has a long way to go. The world’s second largest economy still doesn't have any top-notch car manufacturers. Western companies look at the Chinese market as important for their sales, but not with regard to technological innovations.
Just how could China get the upper hand? The key race in the global automotive industry is all about the connected car – what China’s automotive industry leaders dub the “Internet of Vehicles”. It is important to realize that China has a number of natural advantages in this arena – as well as less “natural” ones.
Donald Trump does not come across as someone who would seek good relations with China as president of the United States. At a campaign rally on 1 May the presumptive Republican presidential candidate used blunt language when he accused China of engaging in unfair trading practices vis-à-vis the US. “We can’t continue to allow China to rape our country”, he told a crowd in Fort Wayne, a working-class city in the state of Indiana. “It’s the greatest theft in the history of the world.”
China has joined the club. With the passage of a law to govern the activities of foreign non-governmental organisations, Beijing has followed in the footsteps of many other authoritarian states. Western media mostly portrayed this move as an outright attack on civil society.
One of the hottest bets in today’s financial markets is over the question of how long China can keep selling US dollars (USD) before the People’s Bank of China runs dry. At the rate at which the central bank currently employs the country’s once legendary currency reserves to defend the Chinese yuan (CNY) against an unwelcome speed of depreciation, some investors are betting on less than three years.
On May 18-19, representatives from participating states and partner countries will gather in Berlin for an Organization for Security and Cooperation in Europe (OSCE) conference on economic connectivity. While China is not a part of the 57-member organization, the German OSCE chairmanship has invited senior Chinese officials to join the discussion.
The German economy’s innovative strength relies on its “Mittelstand”. Small and medium sized enterprises have helped Germany maintain its leadership in automation and smart manufacturing. Selling these companies to foreign investors would be equivalent to giving up Germany’s grip on the technological future.
This would be the opposite of what German government and industry leaders had in mind when they devised the Industry 4.0 strategy, which is designed to usher in the next revolution in manufacturing through the advanced digitisation of production.
2016 marks the beginning of a new era for prospective parents in China. For the first time in more than three decades, the government not only allows married couples to have more than one child, but it encourages them to do so. Local authorities have started offering prolonged parental leave and an expansion of childcare facilities, and the central government is reportedly debating tax incentives to help families bear the education costs for two children.
There is no business as usual at today’s EU-China Summit in Beijing. The meeting is overshadowed by Beijing’s refusal to recognize the ruling of the international tribunal in The Hague that China does not have historic rights to justify its expansive claims to the South China Sea. The other elephant in the room is the UK’s vote to exit the EU. China’s leaders view the outcome of the British referendum as a sign of the EU’s dysfunction.