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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 Jinping Announces China’s Eradication Of Extreme Poverty

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Chinese President Xi Jinping announced China’s eradication of extreme poverty at a national commendation conference held in Beijing on Thursday.

With such achievements, China has created another “miracle” that will “go down in history,” Xi said. “Shaking off poverty is not the finish line, but the starting point of a new life and new endeavor.”

Xi put forward the concept of “targeted poverty alleviation” in November 2013 during an inspection tour of central China’s Hunan Province.

Focus on poverty eradication in country’s governance 

The Communist Party of China (CPC) has been working to improve people’s livelihood since its foundation, and the CPC Central Committee has kept poverty eradication at a prominent position in the country’s governance over the past eight years, Xi said.

More than 10 million impoverished people were lifted out of poverty on average each year since the 18th National Congress of the CPC in 2012.

During these eight years, the final 98.99 million impoverished rural residents living under the current poverty line were lifted out of poverty. All the 832 impoverished counties and 128,000 impoverished villages have been removed from the poverty list.

In addition, 770 million rural residents have shaken off poverty since the beginning of reform and opening-up over 40 years ago, when calculated as per the current poverty line, Xi said.

Reviewing China’s effort over the past eight years, Xi said the country totally invested fiscal funds of nearly 1.6 trillion yuan (about $246 billion) into poverty alleviation and adopted a targeted poverty alleviation strategy, striving to eradicate poverty through development.

Meanwhile, over 1,800 workers lost lives for the country’s cause of poverty alleviation, Xi added.

‘China example’ of poverty reduction

“The country has created a ‘China example’ of poverty reduction and made great contributions to global poverty alleviation,” Xi said.

China met the poverty eradication target set in the United Nations 2030 Agenda for Sustainable Development 10 years ahead of schedule, and according to the World Bank’s international poverty line, the number of Chinese people lifted out of poverty over the past 40 years accounts for more than 70 percent of the global total, Xi noted.

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Targeted Poverty Alleviation – The Chinese Path To Fighting Poverty

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A total of 832 counties, 128,000 villages and nearly 100 million people were living in poverty. This was the reality that China had to face. The task of providing support to them all wasn’t easy, and making sure that everyone receives the exact help they needed was even harder.

“Who were these people and where were they located? If you are intent on leaving no one behind, then you have to locate each and every one of them and tailor relief measures accordingly,” said Lin Wanlong, professor of economics and management at China Agriculture University.

In November 2013, during an inspection tour of central China’s Hunan, Chinese President Xi Jinping first raised the concept of “targeted poverty alleviation.” To crystalize it, he said one should “seek truth from facts, tailor measures to suit local conditions, give targeted guidance, and be meticulous about the work.” These points have become the guiding principle in China’s fight against poverty.

Workers make brooms at a poverty alleviation workshop in Huade County of Ulanqab, north China’s Inner Mongolia Autonomous Region, April 11, 2020. /Xinhua

The first step of the targeted poverty alleviation campaign is to locate poverty through accurate identification, which means specifying survey data by matching it with individuals and households. Are there any better-off families in impoverished counties? Are there any poor households in rich townships? How does one differentiate whether a family really needs help? These were the first challenges that the campaign had to overcome.

“When I was just assigned to the township, I was informed that there were over 2,300 households and about 8,000 people living in poverty. But nobody knew who exactly they were,” said Zhu Shengjiang, head of Yeping Town in Jiangxi Province’s Ruijin City.

In a township of over 70,000 people, a poor population of over 8,000 was scattered among 399 villager groups. Zhu and his colleagues had to go door-to-door and look meticulously into their respective family conditions. Once poverty is identified, they would set up file for the households and log their information onto system.

Screenshot shows the digitally-stored information of impoverished individuals. /CGTN

The ultimate aim of poverty alleviation is to ensure people don’t have to worry about food and clothing and have access to compulsory education, basic medical services and safe housing. Commonly known as the “two assurances and three guarantees,” these are the key indicators for poverty relief officials to identify who exactly needs help.

“In each household, we look at things like whether there is sufficient working capacity, whether the child is receiving education and whether all family members are healthy. If the answer is no in all these categories, then we have found a household that really needs help,” said Zeng Nenggui, director of poverty relief office in Ruijin City.

The launching of a national digital database has enabled data to cover each and every registered village, household and individual, which not only ensures the accuracy of poverty identification but helps nail down the causes of poverty for those who are in the system.

“These households are like a benchmark. What we do is to analyze their conditions and come up with tailor-made measures to lift them out of poverty,” said Lu Chunsheng, director of the Information Center of the National Bureau of Rural Development. “For example, if a family remains poor because they couldn’t receive proper education, our relief measures should include granting student loans and subsidies. If poverty is caused by a family member’s poor health conditions, we then should provide them with sufficient healthcare.”

Prescribing the right remedy is the key. Under President Xi’s guidance, the targeted poverty alleviation campaign has five key measures.

Development & Production

All 832 registered counties have formulated industrial plans to fight against poverty, with over 300,000 industrial bases in farming, planting and processing being constructed on site.

Relocation

More than 96 million registered people have moved into over 2.66 million newly constructed houses, all equipped with water, electricity, gas and internet. Transportation is convenient with better roads built.

Screenshot shows houses that were built to take in impoverished households. /CGTN

Ecological compensation

Over 1.1 million registered people have been employed as ecological forest rangers, directly lifting a total of 3 million out of poverty.

Education

About 200,000 students who dropped out of school due to poverty have now returned to school. More than 8 million students from poor families who failed to continue their studies or get employed after finishing high school have received vocational education for free.

Screenshot shows students at school. /CGTN

Social security

Since 2016, a total of 19.36 million registered people have been included in the subsistence allowance, support and relief system.

To ensure that poverty is truly lifted, the strictest assessment system has been put in place. For each county to declare it has officially left poverty behind, it has to be thoroughly assessed by a third-party inspection team.

“We have never encountered such rigorous measures,” said Zhang Shibin, former director of the poverty alleviation office of Yunnan Province’s Luquan Yi and Miao Autonomous County. ” During the third-party inspection, village officials are not even allowed to follow these teams into the village.”

The targeted poverty alleviation campaign has perfectly embodied China’s practical and down-to-earth approach in battling poverty, opening up a path that accommodates the country’s realities while reflecting unique Chinese characteristics.

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Poverty Alleviation, A Solemn Promise Fulfilled By Chinese Leadership

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With its fundamental purpose of serving the people heart and soul, the Communist Party of China (CPC) has been devoted to leading the nation towards building a moderately prosperous society in all respects, and has helped it achieve miraculous results in reducing poverty.

“Seeing that poor people and impoverished areas will enter the moderately prosperous society together with the rest of the country is a solemn promise made by our Party,” Chinese President Xi Jinping had said.

CMG recently released a feature television series “Poverty Alleviation”, recounting how China has lifted millions out of poverty. The first episode features an overview of how the Chinese leadership fulfilled its solemn promise of lifting all rural residents living below the current poverty line out of poverty by 2020.

Screenshot of the first episode of CMG Special “Poverty Alleviation”. /CGTN

‘Up and Out of Poverty’

China launched large-scale poverty relief programs in 1982. Xi Jinping was sent down to work in the county of Zhengding, Hebei Province at that point in time. From March 1982 to May 1985, Xi worked as deputy secretary and then secretary of the CPC Zhengding County Committee. Some of his speeches and articles from this period were published in his book “Up and Out of Poverty.”

As Xi wrote: “I worked hard during the two years in Ningde Prefecture, along with the people and Party members there. I always felt a sense of unease. Poverty alleviation is an immense undertaking that requires the efforts of several generations.”

He then brought his dream of poverty reduction to the center of China’s political life.

Screenshot of the first episode of CMG Special “Poverty Alleviation.” /CGTN

Targeted poverty alleviation, a new strategy

The number of poor people recognized by the Chinese government counted 99.89 million at the end of 2012 – a population larger than all but a few countries.

In November 2013, during an inspection tour of Hunan, President Xi first raised the concept of “targeted poverty alleviation.”

This concept of tailoring relief policies to different local conditions became a guiding principle in China’s fight against poverty.

In November 2015, at the Central Conference on Poverty Alleviation and Development, Xi further pointed out that poverty alleviation should focus on four issues – who exactly needs help, who should implement poverty alleviation initiatives, how poverty alleviation should be carried out, and what standards and procedures should be adopted for exiting poverty.

To address these issues while carrying out targeted poverty alleviation, about 800,000 officials were sent on frontline poverty-relief missions, working at local levels.

Screenshot of the first episode of CMG Special “Poverty Alleviation”. /CGTN

‘No one will be left behind’

By the end of 2016, there were more than 43 million people, or about 3 percent of China’s population, living in poverty. However, to lift up the remaining poor population, many of whom lived in areas without roads, clean drinking water or power, would be the toughest.

“Eradicating poverty has always been a tough battle, while eradicating poverty in extremely poor areas is the hardest fight of all,” Xi said.

The country in 2017 demarcated three regions and three prefectures, including the Tibet Autonomous Region and the Nujiang Lisu Autonomous Prefecture in Yunnan Province, as the poorest areas in the country. More resources were allocated to these areas.

“On the march towards common prosperity, no one will be left behind,” Xi had promised.

Screenshot of the first episode of CMG Special “Poverty Alleviation”. /CGTN

‘Two assurances and three guarantees’

At the end of 2018, the nation’s impoverished population was reduced to 16.6 million, taking the poverty alleviation journey to the “last mile.” But poverty alleviation work in China still faced many challenges.

Some local authorities and departments fudged or exaggerated their poverty alleviation statistics to score political points.

Speaking at a symposium on the fight against poverty in April of 2019, the Chinese president called for efforts to resolve prominent problems in assuring the food and clothing needs of the rural poor population are met and guarantee they have access to compulsory education, basic medical services and safe housing, referred to as the “two assurances and three guarantees.”

The ministries then launched an extensive campaign to resolve outstanding problems and at the end of 2019, 5.2 million people’s “two assurances and three guarantees” issues were solved.

Screenshot of the first episode of CMG Special “Poverty Alleviation.” / CGTN

Reached anti-poverty goals despite COVID-19

The year 2020 was no ordinary year for China and the world. The COVID-19 pandemic coupled with floods in southern China posed daunting challenges to the national fight against penury.

According to the World Bank, the COVID-19 pandemic is estimated to have pushed an additional 88-115 million people into extreme poverty in 2020, which means global extreme poverty is expected to rise for the first time in over 20 years.

President Xi stressed at a symposium on securing a decisive victory in poverty alleviation in March 2020 that lifting all rural residents living below the current poverty line out of poverty by 2020 is a solemn promise made by the CPC Central Committee, and it must be fulfilled on time.

The country took stronger and more effective measures to ensure the full eradication of poverty on schedule. More efforts were made to minimize losses caused by natural disasters, and speed up the restoration of production and living orders in disaster-stricken poor areas.

Ministers also stepped up monitoring and gave timely assistance to prevent people from falling back into poverty.

In December 2020, President Xi announced that after eight years of unremitting efforts, all rural poor population have been lifted out of poverty and nearly 100 million poor people have shaken off poverty.

 

 

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