Xi hobbles own industry in green tech war and poses as peacemaker in Moscow "ready to stand guard over world order" & Sars whistleblower Dr. Jiang dies -- China Boss News 3.21.23

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The Big Story in China Business

Xi hobbles his own industry in green tech war

CNBC has reported that Chinese battery giant CATL’s $5 billion Swiss depository receipts offering has been delayed due to Chinese leader Xi Jinping’s concerns it would undermine development of green tech at home.

CNBC [excerpt]:

The delay has come to light a week after Chinese President Xi Jinping told CATL that he had mixed feelings about its status as the biggest player in a soaring business tracking the rise of electric vehicles around the world. Xi's comments came in a rare public intervention about one of China's most globally competitive sectors.

In a response to a presentation by CATL's chairman Robin Zeng on the sidelines of China's annual parliament meeting last week, Xi was quoted by official media as saying that he was "both happy and worried" — glad about CATL's industry-leading position, but concerned about the risks as the company expands rapidly overseas and moves to undercut domestic rivals.

Xi's direct intervention in CATL's growth plans reveals how it is his vision, alone, that must guide China's progress despite promises made by the country’s new second-in-command, Premier Li Qian, that "private-sector companies would be treated equally with state-owned ones and that the property rights and other interests of entrepreneurs would be strictly respected."

Said another way, Xi seems to consider himself the “Chairman of Everything”- as he is sometimes derisively called - and it looks as if he wants all resources devoted to keeping battery technology at home.

Whether Xi’s bridling of his own national champs in strategic sectors is wise or not remains to be seen. But keeping a national champ in the stables is no guarantee the younger brood will flourish. Although, in the short term, it might leave foreign buyers little alternative to continue sourcing their electric vehicle batteries directly from China, a hostile nation’s leverage over the global supply chain in cutting-edge technologies, like clean energy, may only increase pressure on the West to innovate new tech faster.

CNBC:

CATL, worth about $139 billion by market value and now expanding in Germany and the United States, already controls 37% of the global battery market, according to its 2022 annual report. It supplies auto giants like Tesla, Volkswagen and BMW.

The company has told the China Securities Regulatory Commission or CSRC whose approval for the listing is required, that it plans to use the proceeds to fund its European expansion plans, especially the development of a plant in Hungary, one source said, and potentially also finance its expansion in the United States.

Increased geopolitical tensions already threaten CATL’s expansion into lucrative western markets. Reuters last week reported that “U.S. Senator Marco Rubio on Thursday introduced legislation that takes aim at Ford Motor's deal to use technology from Chinese battery company CATL as part of the automaker's plan to spend $3.5 billion to build a battery plant in Michigan.”

Reuters:

Last month, Rubio asked the Biden administration to review Ford's deal to use technology from CATL.

Rubio called for an immediate Committee on Foreign Investment in the United States (CFIUS) review of the licensing agreement between Ford and CATL.

Rubio said the deal "will only deepen U.S. reliance on the Chinese Communist Party for battery tech, and is likely designed to make the factory eligible for Inflation Reduction Act (IRA) tax credits."

CATL's European expansion plans have also run into opposition. Hungarian villagers are furious with their government after Prime Minister Vitor Orban gave the go ahead to a new $7.8 billion battery factory, the largest of its kind in Europe, the New York Times said.

NYT:

Two public hearings on the venture, held in the nearby city of Debrecen in January, descended into chaos amid fistfights and shouts of “traitor” directed at officials by residents anxious about their future health and property values.

Taman Polgar Toth, a journalist with a local news site, Debreciner, said he “had never seen anything like it — hundreds of people yelling and fighting.”

For the rest of CNBC’s report, China battery giant CATL's $5 billion Swiss listing delayed amid Beijing regulatory concerns, sources say, click here. For NYT’s report on Premier Li Qiang’s promises to investors and businesses in China, As Economy Falters, China’s New Premier Tries to Boost Business Confidence, click here. For NYT’s coverage of the controversy in Hungary, A Hungarian Town Seethes Over a Giant Chinese Battery Plant, click here.

Law and International Xi

Xi poses as peacemaker, meets Putin in Moscow to “stand guard over world order”