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On January 24th, the Russian pipe-laying ship “Fortuna” left Germany was preparing “preparatory works and tests” before restarting construction of the Nord Stream 2.
It is owned by the Russian company KVT-RUS and left Germany a few days ago and was located 28 kilometers south of the Danish island of Bornholm.
Despite being subject to US sanctions, “Fortuna” resumed work “in line with relevant permits,” the Nord Stream company said.
The European Parliament on January 21st passed a non-binding resolution urging Brussels to halt the completion of the pipeline.
Poland, Ukraine and the Baltic states fiercely oppose the project, fearing among other things, that it will increase Europe’s reliance on Russian energy, which Moscow could leverage to exert political pressure.
They are also trying to push the EU to sanction the project in connection to Alexey Navalny’s arrest.
Poland’s President Andrzej Duda called for further EU sanctions in an interview published on January 24th in the Financial Times.
“If you want to enforce international law, the only option without guns, cannons and bombs is sanctions,” Duda said. “That is why we are ready to contribute to a consensus on this issue.”
German Chancellor Angela Merkel said that she would not abandon the project, despite it being the subject of bipartisan US sanctions.
She said she wants to discuss it with the new Biden administration and that the poisoning of Navalny had not changed her opinion.
German officials said that the United States will place sanctions on the “Fortuna”.
Signed off by then president Trump in late 2019, the sanction measures threaten asset freezes and visa restrictions for companies involved in the construction.
The exact date of the resumption of pipe-laying work in the Baltic remains unclear, with no details from Nord Stream.
But the pipeline is almost complete, with most of the remaining pipe-laying work to be done in the waters off Denmark.
Construction of the 1,230-kilometer (764-mile) gas pipeline was frozen after U.S. sanctions in December 2019, when all but 160 kilometers of the link had been put in place.
In December 2020, construction resumed in Germany’s exclusive economic zone, where the Fortuna built 2.6 kilometers of the pipeline.
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Russia is an immense energy rich country and that makes it a target for the Bilderberg criminals as the US is devastated. However, with China’s rise, Russia will benefit from its energy exports, especially to a weak Europe.
China Overtakes U.S. as World’s Leading Destination for Foreign Direct Investment
Flows into America nearly halved as Covid-19 dragged on the economy in 2020 and there is sign of recovery.
China’s ability to quickly control the coronavirus within its borders helped its economy rebound relatively quickly. Tourists in Shanghai in November.
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Updated Jan. 24, 2021 7:40 pm ET
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China overtook the U.S. as the world’s top destination for new foreign direct investment last year, as the Covid-19 pandemic amplifies an eastward shift in the center of gravity of the global economy.
New investments by overseas businesses into the U.S., which for decades held the No. 1 spot, fell 49% in 2020, according to U.N. figures released Sunday, as the country struggled to curb the spread of the new coronavirus and economic output slumped.
China, long ranked No. 2, saw direct investments by foreign companies climb 4%, the United Nations Conference on Trade and Development said. Beijing used strict lockdowns to largely contain Covid-19 after the disease first emerged in a central Chinese city, and China’s gross domestic product grew even as most other major economies contracted last year.
The 2020 investment numbers underline China’s move toward the center of a global economy long dominated by the U.S.—a shift accelerated during the pandemic as China has cemented its position as the world’s factory floor and expanded its share of global trade.
While China attracted more new inflows last year, the total stock of foreign investment in the U.S. remains much larger, reflecting the decades it has spent as the most attractive location for foreign businesses looking to expand outside their home markets.
Foreign investment in the U.S. peaked in 2016 at $472 billion, when foreign investment in China was $134 billion. Since then, investment in China has continued to rise, while in the U.S. it has fallen each year since 2017.
The Trump administration encouraged American companies to leave China and re-establish operations in the U.S. It also put Chinese investors on notice that acquisitions in the U.S. would face new scrutiny on national security grounds—cooling Chinese interest in American deal making.
The sharper drop in foreign investment in the U.S. last year reflects the broader economic downturn due to the effects of the coronavirus pandemic, said
Daniel Rosen,
founding partner of Rhodium Group, an independent research firm in New York, who has long analyzed the U.S.-China economic relationship.
“I don’t think one can say anything confidently about the impact of the FDI downturn in the U.S., compared to all the other hits on the U.S. economy,” he said.
It is natural that foreign investment would decline sharply in the U.S. under the circumstances because it has an open, market economy, while China doesn’t, Mr. Rosen said. Looking ahead, he said, “There is no reason to be concerned about the outlook for the FDI in the United States providing that the U.S. is sticking with its basic open-market competitive system.”
Foreign direct investment captures things like foreign companies’ building new factories or expanding existing operations in a country or their acquisitions of local companies.
In China, the flow of investments by multinational companies continued despite the upheavals of the pandemic, with companies from U.S. industrial giant
Honeywell International Inc.
and German sportswear maker
Adidas AG
expanding their operations there.
Unctad doesn’t expect to see a significant revival of foreign direct investment this year, globally or in countries that saw falls in 2020.
“Investors are likely to remain cautious in committing capital,” said
James Zhan,
Unctad’s director of investment and enterprise. He doesn’t expect a real rebound to come until 2022. Even then, he said, “the road to full FDI recovery will be bumpy.”
While the sharp drop in foreign investment in the U.S. was due to the pandemic, it also is making companies rethink future investments, said Joseph Joyce, professor of international relations and economics at Wellesley College.
“Companies are reassessing their policies about global supply chains, about foreign markets, about their own use of technology,” Mr. Joyce said. “The pandemic is making all these companies rethink the most basic assumption about where they are located.”
The White House didn’t immediately respond to a request for comment.
The Unctad numbers show a stark divide between East and West in the global economy. In 2020, East Asia attracted a third of all foreign investment globally, its largest share since records began in the 1980s. India saw a 13% increase, driven largely by rising demand for digital services.
In the West, the European Union suffered a 71% drop. The U.K. and Italy, which have suffered high mortality rates and deep economic contractions, attracted no new investment. Germany, which has fared better on both counts, saw a 61% drop.
When the pandemic first struck at the beginning of last year, Unctad expected China to experience a large drop in foreign investment and the U.S. to be largely unscathed. But China’s economy reopened in April just as the U.S. and Europe started a series of continuing lockdowns and disruptions.
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Beijing’s ability to quickly control the coronavirus within its borders helped its economy rebound relatively quickly and reinforced China’s appeal—even before President
Biden’s
inauguration, which some investors hope could usher in a new period of less tempestuous U.S.-China ties.
After FDI into China plunged in the first few months of 2020, Chinese officials scrambled to reassure foreign investors and accommodate any concerns they might have. “We must implement targeted policies to arrest the slide in foreign trade and foreign investment,” China’s premier,
Li Keqiang,
told the country’s cabinet in March.
Some foreign companies put their China expansion plans on hold and in some cases began withdrawing their investments. But as China’s recovery gained steam and the rest of the world began to look increasingly rocky, foreign companies moved to pour more money into China, viewing the country as a production base and as a critical growth market for its products.
Walmart Inc.
said at an investment conference hosted by the city government in Wuhan, the city that was the first center of the pandemic, that it would invest 3 billion yuan, equivalent to $460 million, in Wuhan over the next five years.
Starbucks Corp.
is investing $150 million to build a roasting plant and innovation park in the eastern Chinese city of Kunshan.
Tesla Inc.,
meanwhile, is expanding capacity at its plant in Shanghai and adding a research facility, while
Walt Disney Co.
is continuing construction of a new theme area for its Shanghai Disneyland park—despite a second straight year of lower attendance at the park.
Medical and pharmaceutical investments have been especially active as the coronavirus hit the global economy. Chinese state broadcaster Chinese Central Television reported in April that several global pharmaceutical companies are pushing ahead with their expansion in China, including
AstraZeneca
PLC, which is in the midst of setting up regional headquarters in at least five Chinese cities.
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The resilience of foreign investment in China is contrary to earlier expectations that foreign businesses would seek to reduce their heavy reliance on the country as a key part of their supply chains, having seen some disruption as the results of new tariffs on trade between the country and the U.S.
Seoul Semiconductor Co.
, a South Korean chip maker with extensive operations in China, illustrates the difficulty of exiting China, despite numerous incentives to do so. The company in 2017 began looking at moving some production of its light-emitting components to Vietnam.
“We were very dependent on China,” said Hong Myeong-ki, the company’s co-chief executive officer. But though the company manufactures roughly half of its products in Vietnam, Mr. Hong now has no plans to move out of China.
The same trend can be seen among Japanese companies operating in China, just 9.2% of which said they were moving or considering moving production out of China in a September survey by the Japan External Trade Organization, the lowest such level in five years.
“They need to reduce overreliance on supply chains in one single market,” said
Ding Ke,
a Tokyo-based researcher with Jetro. “But the bigger risk they identified is losing the China market.”
—Stella Yifan Xie, James T. Areddy and Catherine Lucey contributed to this article.
Corrections & Amplifications
Joseph Joyce is a professor of international relations and economics at Wellesley College. An earlier version of this article incorrectly identified him as an assistant professor. (Corrected on Jan. 24, 2021.)
Write to Paul Hannon at paul.hannon@wsj.com and Eun-Young Jeong at Eun-Young.Jeong@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the January 25, 2021, print edition as ‘China Tops U.S. In Luring Foreign Business.’
Germany knows that China is the facto 1º Economy of the world…therefore ND2 is not vital for Russia economy because China needs Russian gas as we have seen when they have built Yamal LNG and Power of Siberia…of course CIA through its proxies in Germany and Russia are trying to hit ND2 using economic sanctions and playing the Navalny card!..and it seems that both has failed!
Merkel will see to it the ND 2 is finished and operational, pretty much gave Trump the finger. This is from Asian times:
Much has been said about Donald Trump’s having left his successor Joe Biden with last-minute foreign policy decisions that would preempt the new president’s own priorities. But who would have guessed that German Chancellor Angela Merkel, who welcomed Trump’s replacement by the more like-minded Biden, would do the same thing?
Take Biden’s possible efforts to change US and global trade terms with China. He wanted to consult with the European Union and other allies and move in concert. Instead, Merkel moved quickly to sign a new trade and investment deal with China in the name of the EU.
Negotiations had been going on for seven years, but both Merkel and China’s President Xi Jinping wanted it done before Biden took office on January 20. Even a top Biden aide had openly asked Merkel to wait.
On December 22, Biden’s national security advisor asked European allies to delay any big dealings with China until they held “early consultations” with the new administration over “our common concerns about China’s economic practices.” His request was ignored. And make no mistake, this was an agreement pushed largely by Merkel. Among EU national leaders, only France’s Emmanuel Macron was on the Zoom call that was the backdrop for announcing the deal.
That the EU has become a Germany-First fig leaf was also evident in the lack of open debate within the EU itself, where the commissioner, Ursula von der Leyen, is German, as is the group’s trade department director
Since the deal was struck, Biden’s team has remained quiet, but not so European leaders. Polish Foreign Minister Zbigniew Rau complained in a tweet, “We need more consultations and transparency bringing our transatlantic allies on board. A good, balanced deal is better than a premature one.”
Several countries expressed concern that the China deal was a gift to Xi at a time when he has destroyed Hong Kong’s democratic autonomy and stands accused of overseeing vast repression of China’s Muslim minority Uighur population, including the alleged operation of concentration camps and slave labor.
“Well, we give China a credit signal at a time of major human rights concerns,” said Italy’s Undersecretary of Foreign Affairs Ivan Scalfarotto.
American commentators blamed Trump for the EU’s rush into China’s embrace. Merkel’s own suggestion that the US can no longer be trusted plays into that argument. But that stand suggests Germany has no other national interests–such as, in particular, buttressing its own economy.
Germany is the largest EU exporter to China in both absolute and relative terms. German exports to China topped €110 billion (US$134 billion) in 2018, equal to 7% of all German exports.
German companies lead the EU in investment inside China, worth €76 billion, or half of the entire EU’s total. The Germans are heavily investing in producing electric cars in China.
The trade deal was not the only German decision that makes problems for Biden. Merkel’s cabinet also approved a measure to allow Huawei, China’s controversial telecom giant, to participate in Germany’s 5G mobile phone network.
The US, Australia, New Zealand, Japan and Taiwan have decided to ban and phase out the company’s products within their 5G mobile networks. The United Kingdom cut Huawei’s share in its new network to 35%. Merkel resisted advice even from Germany’s own intelligence services in making the decision.
Two months before the American election, Merkel also rejected another Trump administration request: to stop the undersea gas pipeline from Russia directly to Germany.
Trump, along with several Eastern European states, objected on the grounds that the pipeline, known as Nord Stream 2, would leave European countries that border Russia, especially Ukraine, vulnerable to natural gas blackmail.
Russia could cut supplies to former Warsaw Pact and Soviet republics including Ukraine and the Balkan states without upsetting Berlin. Pipes for the US-opposed Nord Stream 2 natural gas pipeline from Russia to Germany are shown stored in the port of Mukran, Mecklenburg-Western Pomerania. Photo: AFP/Jens B¸ttner/dpa-Zentralbild Nonetheless, Merkel gave the go-ahead to completing the project, which was expected to reach German shores this year.
The pipeline still faced at least one obstacle: The US Congress had passed a measure in its latest defense budget to sanction any company taking part in the construction. Germany reacted furiously.
“We do not need to talk about European sovereignty if that is understood as us doing everything in future the way Washington wants us to,” German Foreign Minister Heiko Maas said in late December.
Biden officials have said the US will lift sanctions if Europe – meaning Germany – suspends construction while Biden tries to halt it definitively or find some other solution.
The mostly Russian government-owned gas giant Gazprom, which stands to benefit most from the pipeline, has announced that the project might have to be suspended.
On Sunday, however, the Nord Stream 2 pipeline company announced that the Russian pipe-laying ship Fortuna had resumed construction work on the remaining few miles of pipeline offshore of Denmark. In short, Merkel’s “Germany First” policies are running into yet unclear Biden ideas about US attitudes toward Russia and China – and the future of relations with Germany. With Merkel’s time in office short, it will likely be her successor who decides on how close Germany’s future ties are to the US.
Daniel Williams is a former foreign correspondent for the Washington Post, Los Angeles Times and Miami Herald and an ex-researcher for Human Rights Watch. His book Forsaken:
Germans are not fools…ND2 ensure future investments in Russia..otherwise China will fill that investment field.. included Chinese high speed trains instead of German Siemens, wind and solar energy, car Industry..etc…
Foreign investment worldwide is flowing into China, since they got COVID under control and economically will show a net growth for 2020. Biden will follow the steps of his predecessor, trying to save the the economy through more sanctions and attempts to bully others. Germany led the EU to sign a trade agreement with China singling out sovereignty and national interests against US pressures. China also signed a trade agreement with Asian countries bypassing US.
The whole Navalny clown show isn’t working it seems, Germany had better to go along with this or it’s energy shortage issues will continue and worsen
There’s no energy shortage here in Germany when it concerns Natural Gas but with NS1+2 Germany is an distribution hub for the other NS partners such as Netherlands France Austria and others as well. Fortunately this winter is mild like last winter and all those sabotage blackmail and economic/financial terrorism + warfare against NS Germany + EU by enemies outside + by corrupt traitors inside the EU on behest of the AmeriCunt World-Terrorist Nation failed so far but caused delay after delay road blocks after road blocks.
US is running out of credible color coded puppets to destabilize Russia or even Belarus, but they will keep trying.
Duda is one of the dumbest kunt in all of europe,what a pathedic pig fat drinketh piece o sht: Good to see russian power overcome the petty lame pro lgbtq minions of failed administrations, Trump is a jerk just like duda,zealout fascist sprouts,lower iq than then trannys of bidens!
CIA trolls and hasbarats will cry and rage ?
America can sanction anything it wants but the final result will not change. Germany knows well that China is now the largest economy in the world, while the US is a decadent power, with the risk of a civil war as well. The NS2 will be finished this year. The US puppets Poland an baltics states protest and cry against NS2 because America ordered them it. Poland, is well know, is the biggest american’s prostitute in EU, while baltics states count less than nothing. They are just parasitic states that we should expel from Europe together with Poland