XIII Study Trip to China – Global Bridges

Beijing, Shangri-La, Shanghai, Hangzhou, Wuzhen, and Hong Kong

October 15 to 28, 2017

This year’s trip to China was overshadowed by the 19th Party Congress of the Chinese Communist Party which took place during our stay. When we were in Beijing, the number of police officers and the amount of neighborhood watches reached an unprecedented number: the nervousness surrounding this big event was tangible. Due to the overlap, we could not visit the CPC Party School, nor could we not go to Tibet as planned.

As always, the trip included political, business and cultural meetings and events.

In our first meeting with Eric Chen, the President of Airbus, we learned that Airbus is still very optimistic regarding the future prospects of the huge Chinese Market. The briefing by Jörg Wuttke, Vice President of BASF China and until May 2017 President of the European Chamber of Commerce in China, centered around the level playing field in the bilateral economic relations between China and the EU. The European industry feels very strongly that this level playing field does not exist.

This topic was brought to attention by our delegation at the meeting with the Deputy Foreign Minister, Wang Chao. His response that China is still a developing country and needs special protection was predominately rejected by our delegation.

The briefing by German Ambassador Michael Clauß supported the notion that trade disputes and the topic of reciprocity and of the screening of Chinese Investments in Europe may become an important and controversial political topic in the future.

Visits to Ökotest China, the German Financial start up Ginmon (Shanghai), and the Bertelsmann Group (Shanghai) showed the diversity of German private investments in China.

Overall, highlights were our discussions with Chinese think tanks, our inviting organisation CPIFA (former diplomats) and the CIISS (former generals). This year’s topics were the „EU-China relations“ and „North Korea.” Due to our long-standing relations with these organisations, we are used to very open, free and candid discussions. The atmosphere at these meetings nowadays differs dramatically from 10 years ago. Openness, friendliness and the free exchange of (diverse) opinions characterise these meetings.

The Belt and Road Initiative (BRI) has also been an important topic. We discussed the setup of the Asian Infrastructure Investment Bank (AIIB) and had a long discussion on this topic in our third think tank meeting with the SIIS in Shanghai.

Since we could not go to Tibet as planned, we went to Shangri-La, an autonomous Tibetan district in the Yunnan province. Breathtaking landscapes and a very colourful culture were particularly impressive. We came to the conclusion that the Chinese authorities have tried to create „a second Tibet“ in order to divert more tourists from the Tibet province to Shangri-La. This area is dominated by Tibetan people and culture but does not belong to the province of Tibet. A temple similar to the one in Lhasa, the Heritage Museum, cultural shows, a totally rebuilt old town and the typical Tibetan food left us with long-lasting impressions.

Our next stop was Shanghai. We had the privilege of visiting the R&D Center of the Chinese carmaker Geely. The speed and depth of the development of the Chinese automotive industry is breathtaking. A clear strategy combined with a swift and efficient execution leads to success.

In a very interesting briefing by a Catholic and a Protestant German pastor, we learned more about the situation of Christians in China. Christians have to be able to survive in a grey area of legality and semi-legality. The down to earth nature of these two pastors impressed us deeply.

We were lucky to have had very diverse cultural events and impressions. In Beijing, we visited the outstanding show of modern German artists (Baselitz, Lüpperz, Uecker, Kiefer, etc.) Deutschland8 in a very unusual and extremely impressive environment: the Tai Miao Temple in the Forbidden City. From visiting the Tibetan Cultural Expo Center to the Songzanlin Monastery and a colourful historic music show, the cultural impressions in Shangri La were manifold.

Our visit to the water city of Wuzhen and the Wuzhen Theater Festival was an additional highlight of our trip. The whole city has been renovated by a private investor and displays life in the ancient water village in its finest form. And the visit of a Chinese theatre play left deep impressions. The play was done in an extremely modern and refined fashion: the topic was the life and the work of one of the great Chinese intellectuals of the 20th century. It turned out that he was the author of the Chinese National Anthem, so to our surprise the show ended with this National Anthem sung by a standing audience in the theatre.

During our stay we discussed the option of maybe going to China only every other year. The diversity and richness of our impressions led to the rejection of this proposal: we must go to China on a yearly basis.

The next morning the delegation left for Hong Kong, the final destination of our trip.

***

Below, please find an extended version of the China-report by Dr. Philipp Zenz-Spitzweg:

In Memory of Our Friend Walther Leisler Kiep (1926-2016)

On October 28^th, our delegation returned home after a tremendously fascinating two-week trip to Beijing, Shangri-La, Shanghai, Wuzhen, and finally, Hong Kong.

Our trip coincided with the 19th Party Congress of the Communist Party of China (“CPC”), which, although it created some extra challenges, gave us up-to-date insights into the current changes occurring in the People’s Republic. Having spent time with Chinese government officials, think tanks, the German ambassador, and both German and Chinese industry and trade representatives, a number of major impressions are key to remember.

Our delegation was led by Global Bridges Executive Chairman, Dr. Beate Lindemann, who has been well-acquainted with China since the early 1980s, and Dr. Rainer Stinner, who has many years of senior political experience in the German Bundestag, which he brilliantly demonstrated by leading the majority of our political discussions in such a highly competent and diplomatic way.

As always, our trip began in Beijing with the traditional, elegant lunch meeting in the Capital Club. This year, Eric Chen, President of Airbus China, hosted the event and took the time to go into depth about the rapid growth rate of China’s aviation industry. After this informative briefing, our delegation met with Jörg Wuttke, until recently President of the European Union Chamber of Commerce in China. The next day, German ambassador Michael Clauß generously invited our delegation to a working lunch at his residence. Both of these speakers provided our group with first-hand insights into the current political challenges facing China including the fight against corruption, moving people out of poverty, restructuring needs in the industry, as well as new CPC party goals and actions meant to improve the Chinese people’s quality of life.

Our first impressions of the ongoing political developments in China are best understood within the context of what the CPC’s 18th and 19th Party Congress have decided to achieve, as well as the inner mechanics of the CPC.

The 19th CPC National Congress:

While the 18th Party Congress five years ago focused mainly on economic growth and anticorruption measures, the 19th Party Congress solidified the power of President Xi Jinping, and, among others, formulated goals for the upcoming centennials of the CPC (2021) and the PRC (2049) as follows:

Place the interest of Chinese people at the core of the CPCs thinking. This is an integral part of Xi Jinping’s thought on socialism with Chinese characteristics for a New Era, which has now been added to the CPC’s constitution.

Collect the wisdom and capabilities from all walks of life to develop the creativity of the whole society and, in turn, spark national rejuvenation.

Develop and strengthen a united front of patriotism.

Continue the crackdown on corruption.

Extricate the remaining people from extreme poverty, create a moderately wealthy country by 2020, and achieve the CPCs goal of building a moderately prosperous society. (More than 13 million new jobs in urban areas have been created every year for the past five years, lifting people out of poverty).

Continue the socialistic system with Chinese characteristics and President Xi Jinping at its center.

Maintain and even strengthen the role of the CPC.

Create a positive image for products “Made in China” by 2025.

Become the world market leader in future-oriented technologies including e-cars, autonomous vehicles, etc.

Ultimately, create a great Chinese nation with a beautiful environment by 2050. Factories that do not meet the recently established environmental standards will be closed.

Create a strong army under full control of the CPC that can win every conceivable war should the time come.

Comparing such goals to our government strategies in the West, one can only admire China for its tremendous efforts in building a united, inclusive mission for the country and for possessing the discipline required to set such long-term development goals for its society.

“The CPC has united and led the Chinese people in ending once and for all the miserable plight of old China, which had been bullied following the Opium War of 1840, and in walking completely out of poverty and weakness”

President Xi Jinping China Daily Oct. 25, 2017

President Xi Jinping has been the key driver for the implementation of these party goals and has now definitively consolidated his political power.

39 years after the opening up of China under Deng Xiaoping and the beginning of first reforms, President Xi is now changing course again towards a more controlled system.

One benefit of extensive controls with many cameras in public places and a strong police presence is that they create a very safe environment for tourists and travelers. A friend in Shangri-La told us that we would never get lost in the city; he would simply call his friends on WeChat and they would find us within minutes.

Chinese Institute of International Strategic Studies:

Our next meeting at the Chinese Institute of International Strategic Studies (CIISS), a think tank led by experienced and highly esteemed military generals in Beijing, was hosted by General Xu Nanfeng. During our visit, we focused our discussions on the difficult issue of North Korea. Afterwards, he and his delegation kindly invited us to a remarkable Peking duck dinner.

North Korea:

The Chinese believe that the West has greatly overestimated the Chinese’s ability to influence the situation. Since the beginning of sanctions against North Korea, there has been minimal contact between the two governments. China wants a peaceful solution, which maintains North Korea as a buffer state that secures China’s border to South Korea (with American influence). Therefore, China is not actively supporting a collapse of the North Korean system and is still against a full oil embargo. They are also wary of the danger of indirectly forcing millions of North Korean refugees to cross the border into China if the system were to collapse.

Chinese People’s Institute of Foreign Affairs, Beijing:

In all of our meetings, we could easily sense the great respect and the warm welcome extended to our delegation. On the one hand, this is due to the close relationships in China that both Dr. Beate Lindemann and the late Dr. Walther Leisler Kiep have fostered for decades. On the other hand, it is due to China’s deep respect for Germany as an economy driven by creative engineers and people that are driven.

Our final highlight in Beijing was the festive dinner hosted by our long-time partner organization, the Chinese People’s Institute of Foreign Affairs, headed by its vice president, Ambassador Ou Boqian.

Ambassador Qi Mei, former Chinese Ambassador to Germany, also gave an excellent presentation in which she listed four major relationship goals: peace, growth, reform and civilization.

China has found it difficult to witness what is currently taking place in Europe. They find populism’s recent successes in various European elections irritating, and they hope that Europe does not disintegrate (Brexit, Catalonia). They wonder if there will be a united European foreign and fiscal policy, yet understand the difficulty of coping with such a multiplicity of languages, jurisdictions and rules.

On Wednesday, October 18^th, the first official day of the 19th Party Congress, we left Beijing on an early morning flight to Chengdu, connecting us to a scenic mountain flight to Shangri-La.

Shangri-La:

Due to the security precautions surrounding the 19th Party Congress, our planned trip to Tibet unfortunately had to be postponed to a later date in mid-2018. Instead, we travelled to Shangri-La, an autonomous Tibetan prefecture located in the large southwestern province of Yunnan. Yunnan lies just next to Tibet and is considered part of the Tibet region. A large, beautifully designed city of ca. 140,000 inhabitants from various ethnic groups and religions greeted us upon our arrival. Our evening strolls down the small roads of the magnificently restored old town were made even more enchanting due to the brilliantly carved wooden buildings and the well-illuminated temples.

One of the many beauties of Shangri-La that we experienced was the PuTaCuo National Park, where we walked 4 km along the banks of its lovely lake nestled within one of the regions protected natural reserves. A trip by motorboat gave us a splendid view of the impressive mountain terrain. With a slightly aged cable car we later conquered the stunning 4,600m high ShiKa Snow Mountain, where stormy winds made the traditional prayer flags flail with great force. Then, a bus took us on a perilous journey down treacherous roads that lined the steep mountainsides leading towards the narrow BaLeGeZong Canyon. After regathering our strength at the top of the mountain with a light lunch and some rest, we walked several kilometers upon hanging wooden pathways through the steep valley, and finally returned with a ride on white water rafting boats. What an unforgettable day!

Shangri-La’s main attraction is undoubtedly the famous Songzanlin Monastery (est. 1679) which houses over 600 Buddhist monks. The Songzanlin Monastery is built in the style of the Potala Palace in Lhasa. We had a few quiet hours to soak in its unique atmosphere.

The region around Shangri-La draws in about 10 million tourists per year, a number that still consists of only a small portion of foreigners. Tourism and hydropower are the main sources of income, and Yak meat is a traditional dish.

After several relaxing and highly remarkable days in Shangri-La, we continued our trip to Shanghai with a short stopover in Kunming. Changing planes is demanding in China because stopover times are extremely short and distances between airport gates are rather long…

Shanghai:

In spectacular Shanghai, we stayed at the Grand Kempinski Hotel in Pudong in the middle of the most awe-inspiring skyscrapers, some of which are more than 100 stories high. Our long-time friend, Shanghai Volkswagen (today SAIC Volkswagen), hosted a delicious dinner at the S.V. Club for us on the evening of our arrival, a dinner in memory of the club’s long-time supervisory board member, Walther Leisler Kiep.

Back to serious work the next morning, we drove several hours southwest to visit the Geely automobile testing center in Ningbo together with our host, Frank Klaas, Geely’s Head of Communications. Given that mobility in China has become a more pressing topic, our impressions of the visit to Geely were combined with insights taken from the initial meeting with Airbus in Beijing as well as our own experiences thus far with China’s infrastructure.

Returning to Pudong from an eventful day at Geely, we enjoyed a lovely dinner hosted by the Bertelsmann/Arvato team, yet another long-time friend and partner of Global Bridges in China.

Christianity in China:

On the morning of Tuesday, October 24^th, we started off with a meeting with Dr. Michael Bauer (catholic) and Dr. Annette Mehlhorn (evangelical), who jointly serve as priests in a non-registered Christian parish in Shanghai.

Dr. Bauer explained the history of Christianity in China, which began in the 7^th century. China witnessed the first ordination of six Chinese priests in Rome in 1926, but then experienced a strong separation from Rome shortly thereafter. In 1950, all foreign missionaries were expelled from China, and the church was from then on controlled by the CPC. In 1966, all Christian churches were closed and only reopened in 1978, including the ordination of bishops by the Chinese church. The late Bishop Yin, whom Global Bridges visited on earlier trips, was ordinated in 1980 and lived until 2013. Today there are quarterly meetings between Chinese bishops and the Vatican, but those tend to be tense. New laws for religion will come into effect on Jan.1, 2018, and they will put more pressure on Christian parishes. China seems to be concerned that strong identification with Christian parishes could create social unrest.

Under Xi Jinping there will be an even closer connection between church and party. A visit of Pope Franziskus to China would be a dream.

Later that afternoon we visited the Shanghai Institutes for International Studies (SIIS) for a discussion on China’s Belt and Road Initiative. Dr. Yang Jieman, Chairman of the SIIS Academic Affairs Council, headed the Chinese delegation.

Belt and Road Vision:

China is working steadfastly on a massive investment program to connect to Southeast Asia, India, Russia, the Balkan States, Europe and even Africa with a revival of the former silk roads. This could be a 100-year program. With investments of several 100 billion USD, the plan calls for construction of new railway lines, train stations, loading stations, and harbors, as well as a large fleet of cargo and passenger trains and ships. The goal is to reach European cities by train from China in under one week with major cities like Lyon, Hamburg, Madrid, Lodz, Prague, Riga etc. as key final destinations. Chinese representatives described the “Belt and Road” vision as a peaceful win-win situation for all countries involved as it will both create jobs and help exchange goods, people and cultures more easily across continents. Another view is that the plan has the potential to serve China’s desire to open new distribution markets for its overcapacity in several industries and gain easier access to distribution centers in the West, as well as easier access to attractive raw materials from Europe and Africa. It remains yet to be seen how much of this plan will be realized in the coming years, who will provide the necessary large-scale financing, and who wins in the offers for the respective construction projects.

Institutions like the Asia Infrastructure Investment Bank (AIIB), a newly founded wholesale bank for infrastructure projects in Asia, stand ready to provide financing (largely co-financings with The World Bank) for “further interconnectivity and development in the region through advancements in infrastructure and other productive sectors.” It has 150 employees and 100 billion USD committed capital from its approximately 100 member states. We had met with Mr. Najeeb Haider, AIIB’s Principal Strategy Officer at the beginning of our trip in Beijing.

A relaxed cocktail and dinner evening followed by a generous invitation by the German Consul General in Shanghai, H.E. Christine Althauser, at her beautiful residence in the French Connection.

On October 25^th, we discovered another hidden beauty of China approximately two hours by bus southwest from Shanghai.

Wuzhen the Water Village:

Wuzhen is a tiny, historic village, located in a protected natural reserve. It was founded in 1300 and is one of China’s top ten historic and cultural towns. It consists of historic wooden buildings interconnected by narrow pathways, channels and bridges, all of which are magically illuminated after dark. No vehicles are permitted within the boundaries of the historic area. The village has numerous restaurants, boutique hotels, bars, and above all, ten indoor theatres with various open spaces for outdoor performances. Wuzhen hosts an annual theatre festival as well as the World Internet Conference. With many thanks to Dr. Hans-Georg Knopp and his lovely wife, we spent an unforgettable day with an impressive evening performance at Wuzhen.

On October 26^th, we headed to our airport in Shanghai where we departed for our final destination, Hong Kong.

Hong Kong:

At last, the grand finale in spectacular Hong Kong. Free time allowed some of us to take an evening voyage on the Aqualuna pirate ship across the Hong Kong harbor during a dazzling laser light show. We also had the chance to stroll through Kowloon to the Peninsula Hotel and take a ride on the famous Star Ferry.

The view on China is more detached here, as we learned at a breakfast meeting with Mr. Dilip Shahani, Head of Research Asia Pacific at HSBC bank. We received a similar message at Deutsche Bank, where their Board Member for Asia, Dr. Steinmüller, hosted cocktails and dinner for us on the 52nd floor of the Ritz Carlton Building in Kowloon. Rising wealth in the population is seen as a risk for the CPC as this leads to better and higher living standards, and the search for democracy will follow. That will be an issue for the CPC.

Banks in Hong Kong are very active all over the Southeast Asian region. Hong Kong itself is humming as ever, the city actively provides support for startup companies as we learned during a visit to StartmeupHK, a government agency helping young and/or foreign companies successfully find its footing in Hong Kong. During our time at the ALBA recycling plant, we learned that Hong Kong is also keenly interested in smart energy concepts as well as smart recycling of electronic waste. Meanwhile, Hong Kong has 7.3 million inhabitants and is one of the wealthiest and most expensive cities in the world. We did not see any signs of decline.

A festive dinner at the elegant Conrad Hotel marked the end of our fantastic journey. On behalf of the delegation, I would like to extend my great thanks to Dr. Beate Lindemann and her Global Bridges team for their enormous efforts in making this trip possible. We are also very grateful to Dr. Rainer Stinner, who led so many inspiring discussions for our delegation with our Chinese counterparts. Finally, we would like to send thanks to our many hosts and discussion partners who were so generous with their invitations, their willingness to share their insights, and the help they lent us in understanding their great country.