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Volkswagen to Invest Over 4 Bln Euros in China Betting on Quick Recovery

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The further opening-up of the Chinese market presented German automobile giant Volkswagen with more opportunity and the carmaker will invest over four billion euros in the country with its cooperating partners even as the global storm caused by the COVID-19 pandemic is still on.

Despite the COVID-19-triggered strain on the global market, Volkswagen’s performance in China during the first half of 2020 (H1) has been relatively good, according to Stephan Wollenstein, CEO of Volkswagen Group China.

Wollenstein said that at the beginning of the pandemic, the Chinese government undertook a series of fiscal policies to alleviate companies’ financial burden and promote market liquidity, the local government around the country also launched targeted measures to stimulate consumption. Those measures have been a success.

With warming signs seen in the Chinese auto market in recent months, multiple global auto giants are confident that China will be one of the very few markets in the world whose growth path is following a V-shaped curve, expecting recovery at a picked up pace.

Data from the China Association of Automobile Manufacturers shows that China’s auto sales rose by 1.8 percent in June year on year but fell by double digits in the first half of 2020 after the country shut down to fight the coronavirus pandemic.

Automakers expect H2 sales to pick up

Volkswagen is China’s biggest foreign automaker, followed by U.S. rival General Motors Co. The German automaker sold 1.59 million vehicles in China in the first six months of 2020, down 17 percent from 1.92 million units during the same period last year. For sales in last year, Volkswagen sold around 4.23 million units in the country.

The bright side is that China’s premium market outperformed during the past half year and still has much potential to release.

“The premium market is only down by two percent year on year so far. In general, China is still a bit behind what we see as a pattern in Europe and in the U.S., where the premium market already has a substantially higher share than it has so far in China. So the market here is a bit more than two million units in this respect. And we see this probably would grow substantially next year because there will be more people in the middle class,” Woellenstein added.

As Volkswagen obviously has edges in several areas, including the already strong presence in high-end market plus their ever growing expansion into the New Energy Vehicle sector, Volkswagen China expects sales in the second half will boost with a picked up pace.

“We are strongly convinced that we come up with a similar convincing proposition to Chinese customers both on product as well as the entire service and purchasing experience. China will probably be one of the very few markets in the world whose growth path is really following a V-shaped curve,” Woellenstein projected with a determined tone.

Woellenstein also believes that the remaining months of this year will more or less follow the trend of 2019 in absolute numbers, which would set a sound basis for the second half and a positive outlook into 2021, “Therefore, there’s no reason for us to change any of our plans, we stay on our investments, have even further increase them, nor is any of our product launch is being delayed or questioned at all.”

The optimism is shared by multiple global auto giants, as China is seen an oasis for global carmakers during COVID-19 drought.

A number of auto companies have also reported strong recoveries in June sales, with Toyota China up by 22.8 percent year on year, Nissan China up by 4.5 percent year on year, and Dongfeng Motor up by 9.8 percent annually.

Tesla accounted for nearly 23-percent share of the electric car sales in June. The company, which already has strong determination and presence in expansion in China, has started production at its Shanghai factory at the beginning of the year, and has rapidly secured leadership in domestic market and boosted monthly EV registrations in China.

VW continues expansion in NEV, adapts to dual-credit system

Previously, China’s Ministry of Industry and Information Technology announced that the credit ratios of new-energy vehicles are required to reach 18 percent by 2023. The revised policy will be effective from January 1, 2021. Born in 2017, the dual-credit policy requires automakers to produce a minimum number of non-polluting vehicles for the sake of environment protection.

Talking about how VW adjusts to the changes, Woellenstein said he’s pretty confident that in the years to come, the company will stay compliant and make full use of the dual-credit policy.

In May, Volkswagen announced to invest a billion euros to take a 50-percent stake in the state-owned parent of Anhui Jianghuai Automobile Group (JAC Motors), and raised its stake in an existing electric vehicle joint venture with JAC to 75 percent from 50 percent. In a separate transaction, Volkswagen became the biggest shareholder of Gotion High-Tech Co., a manufacturer of electric vehicle batteries.

“So we will have the Anhui-based electric vehicle cluster alongside what we are already doing in both of our traditional joint ventures, given this as a prerequisite plus our product plans, we believe that we are in a good shape and also to get a substantial share on the NEV market,” Woellenstein added

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Xi-Biden Call Analysis: Cooperation Should be Based Upon Mutual Respect

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In the first phone conversation between the leaders of the world’s two biggest economies in seven months, Chinese President Xi Jinping on Friday morning had a “candid, in-depth and extensive strategic communication and exchanges” with his U.S. counterpart Joe Biden, according to a statement by the Chinese Foreign Ministry.

“On the basis of respecting each other’s core concerns and properly managing differences, the relevant departments of the two countries may continue their engagement and dialogue to advance coordination and cooperation on climate change, COVID-19 response and economic recovery as well as on major international and regional issues,” Xi told Biden. 

White House officials said Biden initiated the 90-minute phone call, which is only the second of this kind since the U.S. president took office.

There had been high expectations for Biden to improve bilateral relations ever since he replaced former President Donald Trump in January.

Biden’s China journey four decades on

Biden came to China in 1979 as a member of the first delegation the U.S. Congress sent to China. The then senator said in a speech that China’s development was good for the United States.

He visited China again in 2011, and wrote in a New York Times op-ed that “a successful China can make our country [U.S.] more prosperous, not less.” 

“On issues from global security to global economic growth, we share common challenges and responsibilities – and we have incentives to work together,” read the article titled “China’s Rise Isn’t Our Demise.”

In his first phone call with Xi on the eve of the Chinese New Year in February this year, Biden sent his greetings to the Chinese people. He said he was prepared to have candid and constructive dialogue with China in the spirit of mutual respect and to improve mutual understanding and avoid miscommunication and miscalculation.

Yet such goodwill failed to match up with the actions, according to Yuyuantantian, a public WeChat account that focuses on current affairs. And hostility has been particularly evident in the U.S. Congress. 

In recent months, there have been more China-related bills in the U.S. Congress than ever before, with more than a dozen in July alone, most of which recommended the adoption of opposing or restrictive policies against China. 

The U.S. has made a major strategic miscalculation on China, said Wu Xinbo, director of the Center for American Studies at Fudan University, as quoted in the Yuyuantantian article. “It mistakenly takes China as a major strategic competitor and believes whatever China does is aimed at undermining the U.S. leadership and dominating the international order.”

Xi has said China and the United States will have different views on some issues, but the key is to respect each other and treat each other as equals. But the U.S. has yet to learn to do that, according to Yuyuantantian.

‘Whether China, U.S. can handle their relationship well bears on the future of the world’

China and the United States are respectively the biggest developing country and the biggest developed country, whether they can handle their relationship well bears on the future of the world, and it is a question of the century to which the two countries must provide a good answer, Xi said in the Friday phone conversation.

The two countries should bring relations back to the right track of stable development as soon as possible for the good of the people in both countries and around the world, he added.

How to get China-U.S. relations back on track has become a “must-solve problem,” Yuyuantantian commented, adding that the ball is now in the U.S. court. 

Washington is gradually losing its reputation all around the world, the public account said. “If it really wants cooperation, it has to ‘get off its high horse,’ face the reality and start an open dialogue with China,” it added. 

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Through the lens: How 20 Years of Conflict Since 9/11 Changed Afghanistan

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The Afghanistan war ended just as abruptly as it had begun. Two decades ago, the September 11 terrorist attacks led the U.S. to formulate its controversial counter-terrorism policy, including its longest war in history – the war in Afghanistan.

Twenty years later, the mountainous country nestled in the heartland of Asia has once again come to a crossroads as the U.S. withdrew its troops, with the Taliban reclaiming the power they lost two decades ago.

Afghanistan has long been a battlefield for global powers, but it has never been conquered, hence its moniker – the “Graveyard of Empires.”

In the series “Through the lens: Afghanistan 2001-2021,” we dive into the scars the war has left on the country, and the fear, wrath and resilience of the Afghan people, in eight episodes.

Afghanistan 2001-2021: How the ‘war on terror’ begins

The September 11 attacks claimed some 3,000 lives, making it the deadliest attack in U.S. history. 

Afghanistan 2001-2021: America’s longest war

The U.S. military invaded the country, already war-plagued and impoverished, in the name of the “war on terror.” 

Afghanistan 2001-2021: The poppies blossom

In decades of war and destitution, opium poppy plantation and production have become a major source of income for local farmers. “Either Afghanistan destroys opium, or opium will destroy Afghanistan,” former Afghan President Hamid Karzai once said.

Afghanistan 2001-2021: Fears and tears

In the protracted war in Afghanistan, no one suffered more than Afghan civilians. Hundreds of thousands were forced to flee from homes with no shelter and rarely any food.

Afghanistan 2001-2021: The Displaced

Wars after wars have made migration a norm for the Afghan people. As of 2021, Afghanistan is the third largest source of refugees in the world, with the number of Afghan refugees standing at 2.6 million. Domestically, 4 million internally displaced persons are still in temporary camps.

Afghanistan 2001-2021: The skyline and the slum

In the capital, Kabul, there are only two kinds of people – the rich and the poor.

Afghanistan 2001-2021: The withdrawal

On April 14, Biden announced the U.S. troop withdrawal would be completed by September 11, marking the 20th anniversary of the terrorist attacks that sparked the invasion. In the months that followed, the country witnessed massive chaos. 

Afghanistan 2001-2021: The future is murky

How the new Afghan government deals with the wide range of social, political and economic issues will determine how an Afghanistan under the Taliban will be received by the Afghan people and the world.

Editors: Zeng Ziyi, Zhao Yue, Wang Xiaonan, Yu Jing, Zhong Xia, Du Junzhi 

Images designed by Liu Shaozhen

Graphics by Yang Yiren 

Producer: Wang Xiaonan 

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Xi Jinping Urges ‘True Multilateralism’ in World’s ‘Daunting’ Economic Recovery from COVID-19

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Chinese President Xi Jinping on Friday said the world economy is undergoing a “daunting recovery” which requires “true multilateralism” in the face of fresh COVID-19 flare-ups.

“We are ready to work with all parties to uphold true multilateralism, advocate trust and harmony, promote win-win cooperation, and march with firm steps toward the goal of building a community with a shared future for mankind,” Xi said at the opening ceremony of the plenary session of the sixth Eastern Economic Forum via video link from Beijing.

The forum – held in Russia every year since 2015 – has the goal of promoting multilateral cooperation in the Asia-Pacific region. Last year’s session was cancelled due to the COVID-19 pandemic.

In the speech, Xi called for the international community to unite. “We need to intensify cooperation in vaccine research, development and production, provide more public goods to the international community,” he said.

The Chinese president also voiced opposition to any sort of politicization of COVID-19 vaccines and origins-tracing.

Extra efforts for mutually-beneficial cooperation

“We need to redouble our efforts to advance mutually-beneficial cooperation,” Xi said at the opening ceremony.

He called for the deepening of collaboration between the Belt and Road Initiative and the Eurasian Economic Union in areas including digital economy and climate change.

The Chinese president also urged the group to embrace a “common, comprehensive, cooperative and sustainable security” by “narrowing differences” and “building consensus through dialogue and exchanges.”

As Friday marks the 76th anniversary of the victory of the Chinese People’s War of Resistance Against Japanese Aggression and the World Anti-Fascist War, Xi also called for the defense of the victory’s outcomes.

“The international community must defend firmly the victorious outcomes of World War II, safeguard the truth of history, and stay committed to taking history as a mirror to open up a brighter future,” Xi said.

(Cover: Chinese President Xi Jinping addresses the opening ceremony of the sixth Eastern Economic Forum via video link, September 3, 2021. /Xinhua)

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