US tariffs, UK national security, and Alzheimer's in China

Welcome to China in 5, from the British Chamber of Commerce in China.

Each week, we bring you up to speed with what’s caught our eye in the China-sphere in five(ish) minutes.?Grab a coffee, take a break, and dive in!

New US tariffs on Chinese EV and Semiconductor Imports - Is a Symbolic Strike Worth Escalating Trade Tensions?

What’s the background?? On Tuesday, the White House announced a series of sharp tariff raises on Chinese imports, spanning EVs, semiconductors and solar cells. As part of President Biden’s pre-election bid to protect US jobs, the move marks an attempt to signal American resistance to possible Chinese obstruction of a “made-in-America green transition” through unfair market practices. The most significant tariff is undoubtedly the quadrupling of the tariff on Chinese EVs to 100% this year, although Chinese EVs currently only make up 2% of US EV imports.

Fact 1 President Biden accused China of engaging in “unfair” trade practices, including in the EV sector.

Fact 2 Additional tariffs will triple for imports of steel and aluminium, and double for solar cells this year. They will more than triple for lithium-ion EV batteries in 2024, soaring to 25%. The rate on Chinese chips is set to double from 2025.?

Fact 3 The Chinese foreign ministry has already issued an official response, stating its opposition to “unilateral tariff increases that violate World Trade Organization rules”.

Despite US officials’ denial of American moves to “undercut'' Chinese development or hamper progress in stabilising bilateral relations, the geopolitical fallout from this latest series of tariffs is likely to entrench Beijing’s contrasting interpretation.Taking into account the near negligible proportion of Chinese EVs within US EV imports, the tariff’s impact is predicted to be more symbolic than substantial - though it remains unclear which of the main targets of this symbolic stance, the US electorate or Chinese authorities, will take this signal most to heart. In any event, the European Union is taking note, and will be watching closely for repercussions from these policies as the European Commission continues to investigate Chinese EV imports and plans for its own tariff increases later this year. Juliette Odolant , BritCham Policy Associate

China on an "axis of authoritatian states," says UK PM Sunak

What’s the background? Rishi Sunak made an election-minded speech at the Policy Exchange think-tank focused on national security. This shift comes amid military escalations in Ukraine and the Middle East alongside a growing number of migrants seeking to enter the UK by boat. On China, the speech called out the country as part of “an axis of authoritarian states … working together to undermine us and our values”.

Fact 1 The speech claimed that Britain was facing “the most dangerous times we have seen since the cold war” in what some in the press described as a “nakedly electioneering speech”.

Fact 2 A second reference to China accused the country of conducting cyber targeting of British Members of Parliament.

Fact 3 Sunak’s speech also addressed the importance of a robust global regulatory environment surrounding the development of technologies in AI, an area where he has been happy to engage with China previously.

An election-minded speech calling our China as part of “an axis of authoritarian states” and harking back to the cold war may suggest a risk that this year’s UK election could go the way of the American one, which has seen press suggest both candidates are clashing over who can be tougher on China. Sunak’s comments and opposition leader Keir Starmer’s rebuttal indicate that this is less likely to be the major playing field for the upcoming election. Last month’s All Party Parliamentary Group visit to China suggested there was a bipartisan consensus around the government’s current plans to "protect, align and engage" with China on different areas. It will be important that whatever happens in the election this year, that businesses can maintain clarity over the country’s position on the relations. Harry Bell , BritCham Policy and Advocacy Manager

Coffee Break Read: ‘McDonald’s, Apple and Tesla can’t bet on making a fortune in China anymore’

This article gives a snapshot of the gladiatorial-like area the Chinese consumer market has become for international and local firms alike under the economic slowdown. Here, international brands are finding it harder and harder to compete with local offerings. Across EVs, smartphones and fast food, this insight into foreign companies' work in China explains that foreign brands are currently at a fundamental disadvantage compared with domestic brands due to higher operating costs. Furthermore, it is suggested that many firms have mistakenly believed in the alluring myth of the rising middle class. In reality, prosperity has been driven by capital gains from property and the stock market, not gains in income.

Podcast of the Week: How Alzheimer's will test China

This week’s episode of Drum Tower sees hosts David Rennie and Alice Su consider how China may be affected by Alzheimer’s in the years to come. The episode begins with a discussion of the modern Chinese perception of Alzheimer’s, and how it has only been in recent years that the public has begun to have a widespread understanding of the disease, seeing it as more than just ‘elderly forgetfulness.’

Su and Rennie consider how the effective treatment for Alzheimer’s differs hugely across different regions in China. In richer regions in China, such as in the city of Hangzhou, wide-scale pilot schemes to target and care for Alzheimer’s sufferers have gone underway with much success. On the other hand, in poorer parts of China, where healthcare provisions have not yet reached the level required to begin to deal with systemic Alzheimer’s, many sufferers are instead forced to lean on their relatives for support. In light of this, the episode sees a discussion of how China's ageing population together with its widespread one-child households are at risk of leading to hugely burdensome care responsibilities for younger generations, particularly in areas where healthcare infrastructure is below what’s needed.

And finally... the world's most walkable cities!

According to the latest data from the Economist, Beijing and Shanghai stand among the most physically active among the world’s most populated cities, with around 50% of the city dwellers travelling to work either by bike or on foot. Even when high income levels usually correlate with a transition to a more auto-dominant transport system, other highly developed and populated Asian cities like Tokyo, Singapore and Hong Kong still heavily utilise public transportation. By continent, Europe adopts a more hybrid approach to commuting with a slight bend towards car journeys; and you guessed it, kudos to American cars!

Thanks for reading China in 5! Have thoughts about what you'd like to see, suggestions for our coffee break reads, or a favourite podcast you want to share? Let us know below, or reach out via our website at britishchamber.cn.