China

Intelligence for Better Decision Making

CATL's Ambitious Expansion of Battery Swapping Network in China by 2025

Dec. 20, 2024 | Indirect Indicator

China's Contemporary Amperex Technology Co. Limited (CATL) is set to expand its electric vehicle battery swapping services across China, Hong Kong, and Macao beginning in 2025.

Initially planning to establish 1,000 swap stations, CATL intends to scale this number up to 10,000 through strategic partnerships. This ambitious move positions CATL to compete with Nio, which currently operates more than 2,700 stations and aims to expand its own network to at least 5,000.

Battery swapping offers a swift "refueling" alternative by replacing depleted batteries with fully charged ones, thus reducing the extended charging times typically associated with electric vehicles.

Robin Zeng, CATL's CEO, anticipates that battery swapping will complement both home and public charging by 2030. However, the industry faces challenges such as the need for standardized battery packs, as existing electric vehicle batteries vary, complicating standardization efforts. Although standardization might affect automakers' supply chain control, analysts foresee growth and cost-saving opportunities through collaborations with companies like CATL and Nio.

Initially targeting fleet vehicles such as taxis and buses, the service plans to extend to individual consumers eventually. CATL's EVOGO swapping stations can change battery packs in just 100 seconds, a valuable feature for drivers in haste, though this service is often more expensive than traditional charging.

Both CATL and Nio have formed alliances with automakers to encourage the use of swap stations. Despite uncertainties about sufficient manufacturer and driver adoption for long-term profitability, China's unique market conditions provide a favorable environment for the battery swapping model. Electric vehicles represent 50% of new vehicle sales in China, supported by government subsidies and mandates. CATL's considerable investment in this area aims to significantly advance China's battery swapping infrastructure by 2025.

On a global scale, initiatives like Israel's Better Place and projects in the US and Europe, including Ample's modular battery swapping, have faced challenges due to low EV adoption and non-standardized batteries. These issues complicate network development, with experts suggesting that battery swapping is particularly advantageous for ride-sharing and fleet services, where minimizing downtime is crucial. A broader transition to on-demand vehicle usage might be necessary for widespread acceptance beyond China.

In collaboration with automakers, CATL is co-developing 10 electric vehicle models equipped with swappable batteries to transform energy usage in China. Yang Jun, CEO of CATL, recently unveiled the first EV with their innovative choco-swap battery, with promises of more models to come. To support this initiative, CATL will establish 1,000 swapping stations through collaborations set to launch next year. Introduced in 2022, the EVOGO swap service partners with automakers like Changan Auto and FAW, enabling battery changes in less than a minute, with subscription costs for the choco-swap service starting at 369 yuan ($51).

Robin Zeng plans for the swapping stations to offer two standardized battery sizes to potentially increase adoption. He also aims to integrate renewable energy at these sites to bolster grid stability. By 2030, projections suggest China could construct 30,000 to 40,000 battery swapping stations, potentially replacing up to one-third of gasoline stations. Battery swapping is expected to become a significant component of electric vehicle power solutions, complementing home and public charging. Nio, a major competitor, has also heavily invested in battery swapping technology, with over 2,800 stations mainly in China. Despite rising EV demand, infrastructure challenges continue, prompting some Chinese manufacturers to explore producing extended-range hybrids in areas where charging and swapping facilities are insufficient.

Chinese Espionage Allegations and Royal Ties Strain UK-China Relations

Dec. 18, 2024 | Indirect Indicator

Recent developments have cast a shadow over UK-China relations, with allegations of Chinese espionage involving a connection to British royalty.

At the center of these allegations is Yang Tengbo, a 50-year-old businessman accused of being a Chinese spy tied to Prince Andrew. A High Court ruling has brought this issue to light, leading to Yang's permanent ban from the UK in 2023 due to national security concerns.

Yang, who previously operated under the code name H6, runs the investment consultancy firm Hampton Group, noted for its ties with prominent British politicians, including former Prime Ministers David Cameron and Theresa May. The company is now under scrutiny following revelations from Yang's detention in 2019, where judges disclosed communications he received that were connected to Beijing's United Front Work Department. However, Yang maintains his innocence, attributing his situation to the shifting diplomatic landscape.

His association with Prince Andrew was primarily through the Pitch@Palace initiative, granting him entry to royal events and the opportunity to interact with key UK political figures. Although Prince Andrew has denied any involvement in sharing confidential information, the High Court's findings have nevertheless caused discomfort for the royal family. The implications of Yang's alleged espionage activities have stirred concerns about potential Chinese influence within the UK, with the Special Immigration Appeals Commission upholding his exclusion, acknowledging the risks to national security.

Born in China on March 21, 1974, Yang pursued higher education at the University of York, where he earned a master's degree in Public Administration. He later founded Hampton Group International to foster business relations between China and the UK. By 2013, Yang had been granted indefinite leave to remain in the UK, but he came under suspicion as a covert operative for the Chinese Communist Party, a claim he vehemently contests. His unsuccessful appeal in 2023 has only intensified fears of political interference via his extensive connections.

The situation mirrors other state security incidents in China, where individuals attempted to pass classified information to foreign entities. These attempts have been intercepted by China's strict counter-espionage laws. Despite the serious accusations, Yang insists his actions are lawful, viewing them through the lens of diplomatic tensions. Meanwhile, China's foreign ministry has dismissed the charges against him as baseless.

The accusations have prompted figures like Sir Keir Starmer to voice concerns regarding potential Chinese infiltration. In response, the UK government is set to introduce preventive measures such as the Foreign Influence Registration Scheme, scheduled for 2025, while increasing strategic oversight with involvement from officials like Security Minister Dan Jarvis to mitigate foreign influence. Nevertheless, the Chinese embassy has rebuffed these narratives, labeling the allegations as politically charged attacks against China. The embassy stresses mutual respect in UK-China relations and points to UK Prime Minister Keir Starmer's aim to maintain productive economic ties while confronting arising challenges.

Monitored Intelligence for China - Dec. 20, 2024

News
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360

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35

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16

Embassy
Releases
1

Foreign
Service
Advisories
0

Academic/
Think
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4

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0

Videos
0

Social
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0

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0

Erudite Risk takes an all risks approach to intelligence reporting. We categorize key intelligence into one of 40 different risk intelligence categories.

The goal is to provide intelligence that allows decision makers to avoid being blindsided by what they may have missed, while informing them to make better decisions as well.

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AMEC removed from Pentagon blacklist through legal approach

Global Times | English | News | Dec. 20, 2024 | UndeterminedLegal Exposure

The US Department of Defense has removed Advanced Micro-Fabrication Equipment Inc. China (AMEC) from its Chinese Military Company list after AMEC filed a lawsuit against the designation. This led to a 1.78% increase in AMEC's share price in the Chinese A-share market. Industry expert Ma Jihua noted that AMEC's legal victory sets a positive precedent for other Chinese companies facing similar issues, highlighting the ability to defend against baseless US claims.

Initially added to the CMC list in January 2024, AMEC had previously been removed in January 2021 after presenting substantial evidence. The recent removal followed AMEC's continuous efforts to clarify its status with the DoD and subsequent legal action. Additionally, IDG Capital was also removed from the CMC list, which, while lacking specific sanctions, can harm a company's reputation and deter partnerships.

Meanwhile, some US politicians are pushing for stricter economic and trade restrictions with China. A congressional vote is expected to limit US investments in sectors viewed as national security risks, building on prior Treasury Department measures. China's Foreign Ministry has criticized these actions as harmful to fair economic practices and global supply chains, urging US politicians to stop politicizing economic matters.

Despite rising tensions, opportunities for US-China cooperation still exist. While political factions in the US may advocate for increased restrictions, there is a shared understanding of the need for collaboration on global challenges. China remains open to dialogue and cooperation, with recent meetings between economic working groups from both countries addressing macroeconomic policies and trade restrictions.

UnionPay expands cross-border services, partners with WeChat Pay

Shanghai Municipal Peoples Government | English | CityState | Dec. 20, 2024 | UndeterminedBizdev-Partnering

UnionPay International has partnered with Wise Platform to enhance cross-border remittance services to China. Effective December 16, the service now supports all UnionPay cardholders, expanding accessibility for expatriates in China.

The upgraded service also offers 24/7 instant transfers, allowing funds to be credited immediately to UnionPay cards, which streamlines the transfer process.

Additionally, on December 17, UnionPay International collaborated with WeChat Pay, enabling international UnionPay-linked e-wallets to scan WeChat Pay QR codes in China. This partnership supports eight overseas e-wallets, allowing users to link their UnionPay cards for seamless payments in renminbi, enhancing convenience for international transactions.

国务院关注罚没收入异常增长、大量异地执法

The State Council is concerned about the abnormal growth of fines and confiscations and a large number of off-site law enforcement

Caijing | Local Language | News | Dec. 20, 2024 | Regulatory Enforcement Actions

Premier Li Qiang has called for stronger supervision of law enforcement to address the abnormal growth of fines and off-site law enforcement practices. During a State Council session, he stressed the need for standards in administrative law enforcement and an administrative discretion benchmark system to rectify existing issues and boost efficiency.

Concerns over the abuse of discretion and unfair practices have led the government to prioritize public grievances and streamline regulatory processes. Li Qiang emphasized enhancing benchmarks for licensing and enforcement, advocating for reasonable penalties tied to the severity of infractions. These efforts aim to create a more business-friendly environment through standardized law enforcement and rigorous oversight.

With non-tax revenue from fines constituting around 10% of local budgets, there is significant societal concern regarding "excessive fines." State officials have acknowledged the need to regulate law enforcement that may prioritize profit over genuine enforcement. Deputy Xiao Shengfang highlighted how the connection between law enforcement and local fiscal revenue can foster exploitative behaviors, jeopardizing the rule of law and the rights of individuals and businesses, particularly in economically vulnerable areas.

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