• US bills targeting China AI and Hong Kong offices clear key House panel amid call for ‘bold new ideas’
• Taiwan president Tsai Ing-wen says China attack unlikely for now
• People’s Daily calls for tighter control of live-streaming e-commerce in China as controversies mount
• Chinese leader Xi Jinping showcases policy priorities on first trip to Shanghai since 2020
• China-Turkey business deals on rise as ‘strategic partnership’ evolves out of geopolitical strife with West
• China, India court Global South in competing bids to lead developing countries
• Chinese celebrity chef offends China with egg fried rice video
• ‘New normal’ in US-China ties should avoid sweeping view of ‘security’ risks, foreign policy expert says
• ‘China’s position is clear’: Foreign Minister Wang Yi pushes for one UN voice on Gaza ceasefire
• Hong Kong’s Audit Commission finds Chinese University has not done enough to safeguard national security
• Young Hongkongers over the moon at meeting down-to-earth Chinese astronaut Chen Dong during school visit by space programme team
• China releases first panoramic images of Tiangong space station
• Cross-border consumption reflects further integration with mainland China, Hong Kong leader John Lee says
• Bogus China fortune teller convinces gullible ‘best friend’, 30, she only has a year to live, swindles her out of US$210,000 to ‘extend life’
• The next front in the tech war with China: Graphite (and clean energy)
• Child respiratory sickness overloads China’s paediatric clinics – reports
• ‘Let nature take its course’: secret China donor gives US$2.3 million over 25 years to fund education, help destitute families
• Cocaine-like price hike: China’s new cancer drug is approved in the US but will cost 30 times more
• Xi Jinping’s grip on Chinese enterprise gets uncomfortably tight | Business
• China’s C919 clears the runway for overseas suppliers, broadening market appeal despite headwinds
• Chinese navy visits Myanmar in ‘show of friendship’ following upsurge in fighting along border
• Climate change: record clean energy generation could propel China to peak power sector emissions by 2025, report says
• How China’s lottery boom reflects a ‘long and challenging road’ to its economic recovery
• Fiji woos China for upgrade of ‘strategically important’ ports even as debt concerns mount
• ‘Insult to civilisation’: dead girl, 16, sold for US$9,300 as ‘ghost bride’ in China shocking social media, sparking call to ban ‘corrupt custom’
• Japan’s push for anti-China security alliance hits rough waters in Southeast Asia
• China’s AI aspirations will fuel economy, drive investment into the trillions of dollars: McKinsey
• To counter China, India will add US$5 billion aircraft carrier to its navy fleet

US bills targeting China AI and Hong Kong offices clear key House panel amid call for ‘bold new ideas’

https://www.scmp.com/news/china/article/3243286/us-bills-targeting-china-ai-and-hong-kong-offices-clear-key-house-panel-amid-call-bold-new-ideas?utm_source=rss_feed

Several pieces of US legislation targeting China – including one that could close Hong Kong’s representative offices in America and another that would all but block US investment in China’s AI and other hi-tech sectors – cleared a key congressional committee on Wednesday.

Bills that would bolster Washington’s cooperation with India, Japan and Australia and others that would authorise further action aimed at protecting China’s Tibetan and Uygur populations from alleged human rights abuses also passed.

Some of these bills passed provisionally, pending roll-call votes scheduled for later in the day.

A bill introduced by House Foreign Affairs Committee Chairman Mike McCaul, a Texas Republican, and the committee’s ranking member Gregory Meeks, a New York Democrat, would require American firms investing in Chinese companies developing artificial intelligence, quantum computing, hypersonics and semiconductors to report such activity.

The House bill goes beyond thee restrictions US President Joe Biden’s administration announced this year on investments that companies can make overseas, a move aimed at blunting China’s access to technologies that could undermine US national security.

Biden’s executive order targets “semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems”.

Both measures include investments in special administrative regions of Hong Kong and Macau. The House bill also targets investments in North Korea, the Russian Federation and other “countries of concern”.

US-China ties should avoid sweeping view of security risks: leading scholar

“Whether it’s [US]$1 or $1 billion US investors should not be involved in these hi-tech areas that will shape and define the future,” McCaul said in a committee mark-up hearing.

Describing the legislation as “the strongest countering China bill ever”, McCaul added: “The time now calls for bold new ideas instead of old failed approaches.”

The Hong Kong Economic and Trade Office Certification Act would require the White House to “remove the extension of certain privileges, exemptions and immunities” to the offices if it decided that Hong Kong no longer enjoys a high degree of autonomy from Beijing.

Sponsored by Republican congressman Chris Smith of New Jersey, the bill was approved by the House Foreign Affairs Committee and is now expected to go to the full chamber for a vote. A Senate version of the bill passed that chamber’s foreign relations committee in July, but has not yet been put to a vote on the floor.

Assuming both chambers pass the legislation and Biden signs it, the American leader would be required to explain to Congress why the city’s offices in the US should retain or lose their diplomatic privileges, which were granted under the Hong Kong Policy Act of 1992.

That law went into effect ahead of Britain’s handover of Hong Kong to Beijing in 1997 and was intended to keep American trade and other privileges the city enjoyed in place following the transfer of control.

The city’s three representative offices in the US – in Washington, New York and San Francisco – would be required to close within 180 days if the president opted for decertification. Both versions include a “disapproval resolution” clause that would allow Congress to override the president’s assessment and force the offices to close.

Don’t make waves: openness advised in wake of South China Sea disputes

The congressional committee on Wednesday also passed a bill urging Washington to bolster cooperation with India, Japan and Australia, which with the US comprise the Quadrilateral Security Dialogue, or the Quad.

Introduced in September by Democratic congressman Gregory Meeks of New York and a ranking member of the House Foreign Affairs Committee, the Strengthening the Quad Act seeks to upgrade the grouping by establishing an inter-parliamentary working group to enhance dialogue between the legislatures of the four member countries.

The Quad was established in 2004 for humanitarian and disaster relief efforts, but remained largely dormant until 2017.

Resurrected by then-US president Donald Trump as a group of democracies against an “autocratic” China, the alliance has since been embraced by Biden as part of his Indo-Pacific strategy. In March 2021, Biden elevated the group to the leaders’ level and hosted the first-ever Quad Leaders’ summit in virtual format.

Though the Biden administration has claimed that the Quad is aimed at “maintaining peace and stability” in the Indo-Pacific, Beijing has criticised it as a “small clique” that is “bent on provoking confrontation”.

Without naming China, the Strengthening the Quad Act calls on the US to expand cooperation on issues such as freedom of navigation and overflight, the peaceful resolution of disputes as well as democratic resilience in the Indo-Pacific. It also urges the US to ensure that the region is “free from undue influence and coercion”.

Last week, Beijing and Washington traded accusations after China’s military said it had driven away a US warship in the contested South China Sea. The US Navy countered that it was on a “routine freedom-of-navigation operation”.

Beijing claims almost all of the South China Sea, a key transit point for commercial shipping in an area of immense natural resources. Other parties to the dispute include the Philippines, Vietnam, Indonesia, Malaysia and Brunei. The Permanent Court of Arbitration in 2016 said China’s claims had no legal basis.

South China Sea sees flurry of activity from PLA, US and Philippines

While the US does not make any territorial claims there, it has repeatedly challenged Chinese assertions of sovereignty through its freedom-of-navigation operations.

As Beijing’s infrastructure initiatives are another area of concern for Washington, the proposed legislation involving the Quad asks member countries to collaborate with global and regional financial institutions to back competitive, transparent, and sustainable development and infrastructure projects in the Indo-Pacific.

Human rights were another focal point for the committee on Wednesday.

The Promoting a Resolution to the Tibet-China Conflict Act, which passed the committee without the need for a roll-call, would amend the Tibetan Policy Act of 2002 to authorise government efforts to counter disinformation about Tibet from Beijing.

The comprehensive legislation would make it official US policy that “Tibet” refers to not only the autonomous region as defined by the Chinese government but also the Tibetan areas of Qinghai, Sichuan, Gansu and Yunnan provinces.

While Washington considers Tibet part of the People’s Republic of China, it does not hold that Beijing’s control over the region is consistent with international law.

The Uygur Policy Act of 2023, also approved on Wednesday, would appoint a “special coordinator for Uygur issues” in the US State Department.

Biden at Apec with Xi should ‘shine light’ on political prisoners: US panel

It would authorise funding for human rights advocates to speak in countries part of the Organisation of Islamic Cooperation, an intergovernmental group comprising mostly majority-Muslim countries.

In addition, the act pushes the US government to develop a coordination plan with “like-minded countries” to pressure Beijing to close all detention facilities and “political re-education” camps housing Uygurs and other minorities in Xinjiang Uygur autonomous region.

The Chinese government has repeatedly denied the existence of such camps, claiming the facilities are “vocational training centres” aimed at responding to the threat of religious extremism.

Taiwan president Tsai Ing-wen says China attack unlikely for now

https://www.scmp.com/news/china/article/3243289/taiwan-president-tsai-ing-wen-says-china-attack-unlikely-now?utm_source=rss_feed

China is not likely to consider a major attack on Taiwan for now due to domestic challenges, the island’s President Tsai Ing-wen said on Wednesday, although Beijing is trying to sway its coming election.

“I think the Chinese leadership at this juncture is overwhelmed by its internal challenges,” Tsai told the 2023 DealBook Summit in New York.

“My thought is that perhaps this is not a time for them to consider a major invasion of Taiwan,” she added in a recorded interview.

Tsai was responding to questions about the risks of an attack, in the aftermath of a closely watched meeting between the US and Chinese presidents, Joe Biden and Xi Jinping, in California this month.

The leaders’ talks, on the sidelines of the Asia-Pacific Economic Cooperation summit, were aimed at preventing growing tensions from spiralling into conflict.

But Xi and Biden remain far apart on the flashpoint of Taiwan, with the Chinese leader telling his US counterpart that reunification was “unstoppable”.

Beijing regards the island as a breakaway province to be brought under mainland control – by force, if necessary. Many countries, including the US, do not officially recognise Taiwan as an independent state but oppose the use of force to change the status quo.

For the moment however, Beijing is grappling with domestic economic, financial and political challenges, Tsai said. The international community has also made it clear that war is no option, she added.

Risk of war: Beijing urges ‘return to 1992 consensus’ for peace with Taiwan

But China is still “interested in interfering” in Taiwan’s coming presidential election, Tsai said, adding that Beijing is attempting to sway the outcome in its favour.

“All major elections in Taiwan since 1996 have seen similar influence operations from China,” she said, noting these include the use of military threats and economic coercion.

Instead of hoping Beijing would give up on its tactics, Taiwan should “focus on strengthening the resilience of our democracy”, she added.

Self-ruled Taiwan is holding its presidential election in January, and this is under scrutiny including by policymakers in Beijing and Washington, as it could determine Taipei’s ties with an increasingly bellicose Beijing.

Asked if the United States’ attempt to boost its chip manufacturing capabilities could make Washington’s ties with Taipei less valuable in the long run, Tsai added that the island’s current semiconductor industry cannot be replaced by anywhere else.

Tsai is not able to run in the coming election, as she will have completed the maximum of two terms in office.

People’s Daily calls for tighter control of live-streaming e-commerce in China as controversies mount

https://www.scmp.com/tech/policy/article/3243239/peoples-daily-calls-tighter-control-live-streaming-e-commerce-china-controversies-mount?utm_source=rss_feed

An opinion piece published by the chief mouthpiece of the Chinese Communist Party has called for tighter oversight of live-streaming e-commerce, a popular but controversial segment of the country’s online shopping industry, in a sign that government attitude towards the sector may be shifting.

While employing influencers to sell goods online has become an important way for e-commerce platforms to attract consumers, China should improve regulation of the thriving sector, which is creating “chaos”, according to the People’s Daily piece published on Wednesday.

A series of misconduct in the live-streaming industry, from fraudulent advertising to misleading pricing, should be addressed and punished for the sake of the sector’s healthy and sustained growth, the piece said.

Live-streaming e-commerce has seen exponential growth in recent years. Sales in the sector jumped 58.9 per cent year on year in the first 10 months of this year, reaching 2.2 trillion yuan (US$311 billion) and accounting for 18.1 per cent of all online shopping sales in China, according to data by the Ministry of Commerce.

Some of the top industry players include Alibaba Group Holding’s Taobao, ByteDance’s Douyin and Kuaishou Technology. Alibaba owns the South China Morning Post.

However, the market is also seeing some early signs of saturation.

China gained 51 million new users of e-commerce live-streaming last year, fewer than the 75.8 million added in 2021. The numbers are likely to decline further this year, with only 12 million new users added in the first six months.

Still, the People’s Daily piece warned about what it saw as unchecked abuses in a burgeoning market, which it said could hurt consumer rights and reduce market competition.

While China has tolerated live-streaming e-commerce, the model is facing increased scrutiny abroad. Indonesia in September banned e-commerce transactions on social media, including ByteDance-owned TikTok, to protect the country’s smaller offline merchants, becoming the first government to do so.

The opinion piece said that advocating for tighter control of the sector does not mean “hindering its development, but rather ensuring that it stays on a healthy development track to strengthen its future growth”. The piece called on regulators, online shopping sites and merchants to cooperate in fighting market abnormalities.

Chinese authorities have already introduced several rules targeting the industry. In April 2021, the Cyberspace Administration of China and six other regulators jointly released regulations aimed at reining in malpractices such as selling fake products, falsifying view numbers and promoting pyramid schemes.

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Chinese leader Xi Jinping showcases policy priorities on first trip to Shanghai since 2020

https://www.scmp.com/news/china/politics/article/3243278/chinese-leader-xi-jinping-showcases-policy-priorities-first-trip-shanghai-2020?utm_source=rss_feed

Chinese President Xi Jinping is making his first visit to Shanghai since 2020, state media reported on Wednesday, on a trip that highlights some key aspects of his policy agenda in areas such as finance, technology and welfare.

On Monday, the Post was the first to report that Xi would be visiting the city this week. Sources familiar with the matter said he had postponed his visit, after originally planning to make it his first stop on his way back from the United States, where he met Joe Biden and attended the Asia-Pacific Economic Cooperation summit in San Francisco.

Power play: Chinese engines rev up for Shanghai air show’s long-delayed return

State broadcaster CCTV reported that the Chinese leader was in the city on Tuesday and Wednesday, visiting the Shanghai Futures Exchange, the ongoing Shanghai Science and Technology Innovation Exhibition and an affordable accomodation project.

Footage from the innovation exhibition showed Xi examining a display of semiconductor integrated circuits – a technology that lies at the heart of China’s tech competition with the US – and watching a walking, human-shaped robot in the artificial intelligence section.

He also visited a project providing affordable rental accomodation for migrant workers in the city’s Minhang district and gave a speech to the tenants outside.

It was Xi’s first visit to Shanghai since the end of the Covid-19 pandemic and follows last year’s prolonged, two-month lockdown that caused the city to virtually grind to a halt.

Xi last visited Shanghai in 2020, when he attended a celebration of the 30th anniversary of the development of Pudong, the city’s financial hub.

This week, the Post also reported exclusively that Xi will host a meeting to discuss the Yangtze River Economic Belt, one of his signature projects, with officials from the city and three neighbouring provinces.

Earlier this week, the Communist Party Politburo endorsed plans to speed up the development of the region, one of China’s most important economic hubs.

However, the meeting did not announce a date for the third plenary session of the 20th Central Committee, an event that usually sets the country’s development strategy and priorities for the next five to 10 years.

That omission means the plenum is unlikely to happen this year because the Politburo will only meet once more before the new year, in late December, which will be the next window of opportunity to announce the date of the plenum.

Shanghai developers lure buyers with easy down payments, free parking spaces

Xi’s visit comes just after the end of the China International Import Expo – a major showcase for the country’s vast market. It also coincided with the 10th anniversary of the creation of the Shanghai Free-Trade Zone, a testing ground for China’s economic reforms.

Five years ago, on a visit to the first import expo, Xi announced that a 120sq km (46sq mile) area in the eastern part of the city would be given free-trade zone status in a bid to attract global investors.

Since then a host of major foreign companies have since set up shops and factories, including Tesla, which began delivering its Shanghai-made vehicles in January 2020.

With a population of more than 25 million residents contributing nearly 4 per cent of China’s economic output, Shanghai is home to some of the biggest foreign investors in the country. These include General Motors and the Walt Disney Company, as well as the electric car maker.

Additional reporting by Phoebe Zhang

China-Turkey business deals on rise as ‘strategic partnership’ evolves out of geopolitical strife with West

https://www.scmp.com/economy/china-economy/article/3243269/china-turkey-business-deals-rise-strategic-partnership-evolves-out-geopolitical-strife-west?utm_source=rss_feed

Turkish businesses say they are keen on further tapping into China’s market, with an eye on ramping up their position as a midpoint for Chinese investment amid rising geopolitical tensions with the West.

A business delegation of around 50 representatives from Turkey visited Beijing for a bilateral business forum on the sidelines of China’s inaugural International Supply Chain Expo – designed to show China’s resilience as many foreign companies have begun “de-risking” by shifting investments away from China.

“From digital platforms to telecommunications, renewable energy to electric vehicles, cloud technology to the defence industry, we are building a strong and wide range of cooperation with China,” Ismail Hak Musa, Turkish ambassador to China, said at the second Turkey-China Business Conference on Wednesday. The first was in July in Istanbul.

“The political stability that China and Turkey both enjoy is an important foundation for prosperity and development,” he added, noting that the trade delegation was expecting to find new trade opportunities with China.

‘A very feasible target’: Turkey predicts 2 million Chinese tourists by 2030

China had been trying to woo and charm foreign investment to bring their money back after three years of stringent Covid policies, but leaders have been struggling to restore business confidence, especially among Western companies, as geopolitical wrangling with the United States has grown more hostile.

The Turkish ambassador said that his country, in a position that connects Asia, Europe and Africa, sees itself as being the ideal location for China’s business.

“Turkey would make a very important strategic partner for China’s trade with the world,” the ambassador said, noting how Turkey enjoys certain free-trade terms with the European Union (EU).

China and the European Union have failed to proceed with their Comprehensive Agreement on Investment after seven years of negotiations stalled in early 2021 after Beijing imposed sanctions on Europeans and entities in retaliation for similar EU actions over alleged human rights abuses in Xinjiang, accusations that Beijing denies.

Musa said he expects China to increase its foreign direct investment to Turkey, as investment in the country accounts for less than 1 per cent of China’s overseas investment portfolio.

The two countries’ bilateral trade rose 12.8 per cent to US$38.5 billion in 2022, but the trade was almost one-way, with Turkey’s trade deficit with China being around US$38 billion, according to China’s official figures.

Turkey in March imposed an additional 40 per cent customs duty on imports of electric vehicles from China – a decision that the presidential office said was to protect Turkey’s domestic industry.

“We are not afraid of an imbalance in trade and economic relations, but to have a sustainable relationship, it is better to balance them in an acceptable way,” Musa said, clarifying that he does not expect them to be perfectly on par.

China-Middle East to step up trade amid strained ties with Western partners

A representative from a Chinese state-owned company, who asked to remain anonymous as he was not authorised to talk to the media, said that after being focused on investing in the semiconductor sector in Turkey for more than three years, they have now decided to broaden investment in Turkey’s energy sector.

“We have been growing increasingly interested in Turkey’s energy market. This has especially been the case because of the two ongoing wars,” he said, referring to Russia’s invasion of Ukraine and the more recent Israel-Gaza conflict.

A North Atlantic Treaty Organisation (Nato) member, Turkey’s already-volatile relations with the West have worsened following its condemnation of Western sanctions against Russia.

Beijing has also refrained from condemning Moscow. And while ramping up oil imports from Russia, as Russian oil exports face sanctions from Europe, China has also been looking for new energy sources from the Middle East region.

Turkey has also been an investment destination for Chinese tech companies, which are facing more scrutiny in Western countries.

Chinese tech giants Huawei and ZTE, both on a US sanctions list and under scrutiny by a number of European Union members, have continued with expansion efforts in recent years. Huawei’s largest research and development (R&D) centre abroad is in Turkey.

China, India court Global South in competing bids to lead developing countries

https://www.scmp.com/news/china/diplomacy/article/3243204/china-india-court-global-south-competing-bids-lead-developing-countries?utm_source=rss_feed

India’s year in the G20 presidency has seen it emerge as a serious challenger to China’s aspirations to lead the developing world, with New Delhi also hosting its second virtual Voice of the Global South summit of the year in November.

“We are more than 100 countries but our priorities are similar,” Indian Prime Minister Narendra Modi said in his opening remarks to the latest meeting, intended as a briefing to attendees on the Group of 20 summit hosted by New Delhi in September.

“From a geographic perspective, the Global South has always existed but it has received a voice of its own for the first time,” he said.

As a G20 member, China was not invited to the virtual summits which were widely seen as a ramping up of India’s efforts to court the Global South – a term broadly used to refer to developing countries in Africa, Asia and Latin America.

Use of the term – attributed to US political activist Carl Ogelsby in 1969 – has exploded in recent years as a “convenient shorthand” for countries that want the global economy’s structures overturned in favour of a more multipolar system, according to the Carnegie Endowment for International Peace.

While China and India have adopted different approaches – with the former focusing on investments and infrastructure – analysts said that both countries regard the Global South as increasingly important to their ambitions to expand influence and shape the changing international order.

Ali Wyne, senior analyst with Eurasia Group’s Global Macro-Geopolitics practice, said the key focus of India’s pitch to developing countries has been that it would strive to make prominent global institutions more inclusive and responsive to their voices.

In addition to the virtual summits, New Delhi has used its presidency of the G20 to work on ensuring that “the concerns of the Global South receive due cognisance”, according to the Indian external affairs ministry.

In an added boost to India’s efforts, the 55-member African Union (AU) was formally admitted to membership of the G20 at the New Delhi summit in September.

In Africa, China is building influence, brick by brick

While both India and China supported the AU’s bid, it was Modi who welcomed its chairman Azali Assoumani into the G20 fold with a wide grin and a warm embrace. Chinese President Xi Jinping did not attend the event.

The African Union’s admission would “strengthen the G20 and also strengthen the voice of the Global South”, Modi said.

According to Wyne, India was also able to make sure that the Russian war in Ukraine did not distract the G20 from focusing on developing countries’ priorities, including enhancing pandemic preparedness and reducing the global debt burden.

Byron Chong, a research associate at the Lee Kuan Yew School of Public Policy in Singapore, said India announced a number of initiatives at the G20 that had allowed it to “position itself as a serious contender to China for leadership of the Global South”.

Among the initiatives – which champion the interests of developing countries – is a plan to reform multilateral development banks and expand their lending capacities.

This would help improve access to funding but could also be seen as “an attempt to weaken China’s influence and status as the key source of developmental loans and aid for poorer nations”, Chong wrote, in a September article for the school’s Centre on Asia and Globalisation.

India also announced a massive rail and shipping project connecting India with Europe through the Middle East in partnership with the US, EU and some Gulf and European states – “the most overt indication of India’s intention to compete with China”, according to Chong.

Developing countries, particularly in regions such as Africa and Central Asia, have been the key beneficiaries of China’s landmark Belt and Road Initiative since its launch a decade ago.

‘G20 coming out party’: India can be bridge in polarised world, say analysts

At the third belt and road forum in October, Xi renewed his commitment to the development of emerging economies and stressed that China’s modernisation was “for all developing countries”.

Amitendu Palit, senior research fellow at the National University of Singapore’s Institute of South Asian Studies, said that China “has been able to mobilise some strategic influence through its infrastructure-building efforts”.

“India has instead focused on bringing the concerns of the Global South to the world’s largest and most influential policy forums. It has tried to ensure that specific challenges of the Global South, such as in addressing climate change, get to be heard and responded to.”

Palit said the importance of the Global South’s support has grown for both China and India, as countries look to form coalitions with like-minded nations. “China and India are keen on reshaping the international order. In this regard, the Global South is very important for them.”

The Global South had also become more significant because of the shifts in the international order that followed the Covid-19 pandemic, which saw the delivery of “global public goods” becoming an “important source of obtaining strategic influence”, Palit said.

At the height of the pandemic in December 2021, Chinese state news agency Xinhua reported that China had provided more than 1.8 billion vaccine doses to more than 120 countries and international organisations.

Indian media said India supplied some 235 million doses to countries including Bangladesh, Nepal and Bhutan.

China’s focus on developing countries was also on display in August, when Xi attended the Brics summit in Johannesburg, in just his second overseas trip this year.

The bloc of emerging economies – which includes Brazil, Russia, India, China and South Africa – was an important platform that would “elevate the solidarity and cooperation of developing countries to a higher level”, Xi said.

New Brics members boast oil, deep pockets and strategic locations: analysts

The Brics leaders agreed at the summit to invite Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates to join the bloc, a move that reflected China’s growing influence, according to observers.

Alessandro Arduino, affiliate lecturer at King’s College London’s Lau China Institute, said the expansion aligns with China’s extensive involvement with the Global South as the international governance landscape undergoes a “seismic shift”.

“Beijing’s quest to seize the helm of Global South leadership is a crucial component of its strategy to shape a world characterised by multiple power centres, aiming to exert a more potent influence in global affairs,” he said.

“In pursuit of global prominence, China positions itself as the champion of developing nations, attempting to redefine major power dynamics by prioritising development.”

Eurasia Group’s Wyne said China believes that building greater influence in the developing world will be essential to offset growing pressures by advanced industrial democracies – especially the United States – to contest its influence.

India, meanwhile, is of the view that its moves will help it to transform from an Indo-Pacific power into a global one, Wyne said.

Competition between China and India to court the Global South will heighten amid the growing distrust between the two powers, whose worsening relations in recent years have been punctuated by clashes along their shared border in the Himalayas, he said.

According to Wyne, India is likely to consider more ways to include representatives from developing countries at prominent gatherings, such as inviting officials from Southeast Asian nations to attend Quad meetings as guests.

“China will continue to leverage its geoeconomic statecraft to make inroads, but with an emphasis on greener, more sustainable investments,” he added.

‘Freewheeling days’ are over? China’s belt and road plan makes financing pivot

Palit said that he expects both countries to further engage with developing countries, with the rivalry spreading across infrastructure development, people-to-people connectivity, and environmental cooperation.

The India-Middle East-Europe Economic Corridor, announced at the G20, is likely to be joined by more infrastructure projects led by India, according to Palit.

China is already expanding its support for African countries, and in a concrete way, paying for parliamentary buildings, sports stadiums and conference centres across the continent.

Beijing has also delivered gifts of a US$200 million headquarters for the African Union and an US$80 million base for the Africa Centres for Disease Control and Prevention, both in the Ethiopian capital Addis Ababa.

While analysts agreed that the competition between China and India is set to intensify, they suggested that it may not be possible for one leader to represent all the countries of the Global South, given their vast differences and varied needs.

According to Zack Cooper, senior fellow at Washington-based think tank American Enterprise Institute, while the Brics members share general concerns, there appears to be a lack of agreement on a broad set of rules governing trade, technology and other interactions.

“The core problem is that there are fundamental differences among the Brics-Plus members, which will limit its ability to actually deliver results,” he said.

“Countries don’t appear to have a consolidated view … They can’t articulate a shared vision for the future.”

Bigger Brics bloc helps China but also brings fresh risks: analysts

Palit said that China and India’s bids to position themselves as champions of the Global South have met with a mixed response, largely because developing countries are not homogenous and their interests are not always identical.

Other large middle and regional powers such as Russia, Brazil and South Africa might also aspire to lead countries belonging to the Global South, he suggested.

But because of the differences among developing countries and the evolving global situation, it was difficult to visualise one leader that could helm the Global South, Palit said.

According to Wyne, “it would be presumptuous for any one country to conclude that it is ‘the’ representative of the developing world”.

“And it is doubtful that developing countries would want to rely wholly on India, China, or any other given country as they look to stabilise their economies amid systemic instability in the international order.”

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Chinese celebrity chef offends China with egg fried rice video

https://www.theguardian.com/world/2023/nov/29/chinese-celebrity-chef-wang-gang-offends-china-with-egg-fried-rice-video

A Chinese celebrity chef has apologised after he was accused of insulting the memory of Mao Zedong’s son by posting a video about how to cook egg fried rice.

Wang Gang, who has more than 3.3 million followers on Weibo and more than 2 million on YouTube, faced a torrent of criticism by viewers who accused him of deliberately publishing his cooking tutorial around the anniversary of the death of Mao Anying as an act of mockery.

“As a chef, I will never make fried rice again,” Wang said in his apology on Monday after taking down the video.

Mao Anying, a Chinese military officer, was killed by US bombers on 25 November 1950 during the Korean war. A persistent but frequently denied rumour says he was trying to cook egg fried rice instead of taking shelter, and the smoke from the fire exposed his position to enemy forces.

One commenter wrote on Weibo of Wang’s video: “As an ordinary person who gets a lot of money by posting some cooking videos, he should at least not be disrespectful to this country and the people who sacrificed for this country.”

In 2018, China’s government criminalised the act of insulting “heroes and martyrs” said to have sacrificed themselves for China or the Communist party cause.

The Chinese Academy of History has said the claim about Mao Anying is a “most vicious rumour”, but the story remains popular. The rumour – and references to egg fried rice – are now a taboo topic in China’s highly sensitive and controlled political environment. References to the dish are not censored but are fraught around this time of year.

Hu Xijin, a public commentator and nationalistic media personality, said: “In the future, around the anniversary of the death of martyr Mao Anying, the public opinion field should avoid touching the topic of egg fried rice.”

Some supported Wang. “There’s nothing wrong with egg fried rice,” said one Weibo user. “What’s wrong is that you were born in the wrong place. Chefs can consider going abroad to find freedom in food teaching.”

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‘New normal’ in US-China ties should avoid sweeping view of ‘security’ risks, foreign policy expert says

https://www.scmp.com/news/china/diplomacy/article/3243271/new-normal-us-china-ties-should-avoid-sweeping-view-security-risks-foreign-policy-expert-says?utm_source=rss_feed

A leading US-China expert in Beijing warned against too loose of a definition of “security” in bilateral relations as the two major powers agreed to stabilise ties following the Xi-Biden summit earlier this month.

Defining security issues too broadly can suppress levels of innovation and social vitality, said Da Wei, director of the Centre for International Security and Strategy at Tsinghua University.

In an opinion piece published on Tuesday on Chinese news site ThePaper.cn, Da described a potential “new normal” for China-US relations in the wake of the meeting between Chinese leader Xi Jinping and US President Joe Biden earlier this month.

He observed that “the level of concern and dedication to China-US competition and its impact appeared to be noticeably higher in China” compared to the United States, likely due to the gap in national strength.

He said China, as the “weaker side of the game”, should be aware of the risk of oversecuritisation – an academic term for the excessive identification of issues as security threats.

Xi-Biden summit hit pause on troubled US-China relations: analysts

Speaking to the Post, Da cited supply chain globalisation as an example of something that should not be considered a security issue. If China and the United States move supply chains back to their own territories because of security concerns, it could cause inefficiency, he said.

He added that as a developing country, “China does not have that luxury to oversecuritise” and should judge “security issues” reasonably to ensure continuous development.

“Oversecuritisation means you need to devote a lot of resources to deal with a range of issues, so they can’t be devoted somewhere else. That’s the dilemma between security and development,” he said.

Incorrectly defining “security threats” could even hurt security if a state spends “excessive resources on a wrong goal”, causing it to miss out on other threats, he added.

Da noted that oversecuritisation is a global trend that is not limited to the US or China.

In his opinion piece, the international relations scholar warned that oversecuritisation could cause relations with the US to overshadow China’s ties with other countries.

“When deciding the attitude and relations with third parties, we should not draw the line with sole reference to the US,” he wrote.

Da said the past five years had convinced both sides that they should accept an “uncomfortable coexistence” as decoupling and military conflicts come with higher costs than benefits.

US-China defence dialogues restored but unlikely to resolve disputes: analysts

Chinese officials and scholars have dubbed the outcome of the recent Xi-Biden summit the “San Francisco Vision”, named after the city where the meeting took place.

It was the first between the two leaders since they met a year ago in Indonesia, where they reached what Beijing called the “Bali Consensus”

This month’s meeting resulted in a series of agreements to resume high-level military and strategic talks.

Under the San Francisco Vision, China and the US should develop correct perceptions of each other, manage differences effectively, promote mutually beneficial cooperation and people-to-people exchanges, and take on the responsibilities of major powers, according to the Chinese embassy in the US.

Beijing also signalled the start of a “new phase of China-US relations” after the meeting and called the Xi-Biden summit an “important milestone” following a period of heightened tensions.

In a WeChat article posted on Tuesday, the embassy said the San Francisco Vision had given new momentum to China-US relations after numerous hiccups and difficulties.

It also emphasised the US should “stop arming Taiwan and support China’s peaceful reunification” and the two sides should respect each other’s “red lines”.

State-run news agency Xinhua published a column on the same day highlighting the “highly complementary” nature of the world’s two largest economies and the importance of them cooperating “to overcome global challenges and enhance the well-being of all humanity”.

‘China’s position is clear’: Foreign Minister Wang Yi pushes for one UN voice on Gaza ceasefire

https://www.scmp.com/news/china/diplomacy/article/3243234/chinas-position-clear-foreign-minister-wang-yi-pushes-one-un-voice-gaza-ceasefire?utm_source=rss_feed

China is pushing hard for a united global voice seeking a comprehensive and lasting ceasefire in Gaza before its presidency of the UN Security Council ends this week.

Chinese Foreign Minister Wang Yi called for an extended truce and humanitarian aid to Gaza as he met his Brazilian and Malaysian counterparts as well as the United Nations head on Tuesday, a day ahead of chairing a high-level council meeting.

“China’s position is clear … a comprehensive ceasefire should be realised, so as to avoid further humanitarian disasters,” Wang told Antonio Guterres, the UN secretary-general, at the world body’s headquarters in New York.

Wang also hailed Resolution 2712 – the council’s first resolution for a Gaza ceasefire on humanitarian grounds, adopted earlier this month – as the first step in promoting a ceasefire and a good start to resolving the Palestinian-Israeli conflict through political means.

China and some Arab and Islamic countries hope the Security Council will be able to speak in “a unified voice” on the conflict, Wang told Guterres.

‘Halt the fighting’: China and Arab nations renew call for ceasefire in Gaza

Last week, Beijing hosted foreign ministers from Arab and Muslim-majority countries trying to rally the international community to end hostilities.

The Security Council should reach another consensus, Wang told his Brazilian counterpart Mauro Vieira in a separate meeting, according to a readout from the Chinese foreign ministry.

“We should seek a new consensus in the council to promote a comprehensive and lasting ceasefire, the release of detainees and a return to the two-state solution, which is the fundamental solution to the Palestine problem,” Wang said.

Vieira said Brazil stood ready to work closely with China to promote new action by the Security Council and to forge a unified voice, the readout said.

“Brazil expects China to play an influential and leading role, and is ready to work closely with China to promote new action by the Security Council, and to [speak in] a unanimous and clear voice,” Vieira.

During his meeting with Malaysian Foreign Minister Zambry Abdul Kadir, Wang emphasised that preventing a resurgence in fighting and the spread of humanitarian disasters was a position that every responsible country should take.

The three meetings came with less than 24 hours to go before the Security Council meeting on the Israel-Gaza conflict, to be hosted by Wang. China’s month-long rotating presidency of the council ends on Thursday.

Wang said Wednesday’s high-level meeting comes at a crucial time, being the last day of a temporary ceasefire. It will aim to push the council to reach a consensus on a ceasefire, a lasting peace and a unified voice on the conflict, he told Zambry, repeating comments made to the other leaders.

On Friday, a four-day humanitarian ceasefire mediated by Qatar, Egypt and the United States was put into effect, temporarily halting Israel’s military actions in the Gaza Strip. A deal to extend the ceasefire by two days was announced on Monday.

Egyptian media reports on Wednesday said that a preliminary understanding had been reached to extend the truce by another two days. The reports quoted Egyptian officials, but there has been no official confirmation as yet.

Hong Kong’s Audit Commission finds Chinese University has not done enough to safeguard national security

https://www.scmp.com/news/hong-kong/education/article/3243229/hong-kongs-audit-commission-finds-chinese-university-has-not-done-enough-safeguard-national-security?utm_source=rss_feed

Hong Kong’s Audit Commission has found that Chinese University has not done enough to safeguard national security and also raised concerns about the management of campus facilities.

In a report released on Wednesday, the commission said the university had yet to incorporate ensuring national security in its tender documents, contracts and guidelines calling on the institution to strengthen its “guidance and regulations” for facilities operated by external contractors.

“For instance, the bookstore operator was only required not to use or cause or permit the bookstore to be used for any unlawful or immoral purpose, and not to display or sell merchandise of obscene or immoral nature,” it said.

“However, [the university] did not issue any guidelines related to the safeguarding of national security for the operation of the bookstore.”

The report is the latest in a turbulent year for the publicly-funded university and comes just weeks after the city’s legislature passed a controversial bill shaking up its governing council.

The commission urged the university president to provide guidance to those overseeing campus facilities, as well as incorporate clauses in the tender documents and the contracts to allow disqualification of tenderers and termination of agreements in the interest of national security.

The national security law, imposed by Beijing on the city in June 2020 following months of anti-government protests, criminalises acts of secession, subversion, terrorism and collusion with foreign forces, with a maximum penalty of life imprisonment.

Chinese University head out of sight, but at the centre of storm over council reforms

Article 9 of the law dictates that the government will take “necessary measures to strengthen public communication, guidance, supervision and regulation over matters concerning national security, including those relating to schools, universities, social organisations, the media and the internet.”

The campus is one of eight tertiary institutions which receives publicly-funded grants through the University Grants Committee.

In its report, the auditor called on the university to step up its monitoring of operations at campus facilities.

The commission said it carried out numerous site visits during its investigation and found operators were providing services which were prohibited by their contract. In one example, it discovered the bookstore was selling miniature rechargeable fans and toy dolls, products which fell outside those stipulated in the agreements.

Hong Kong lawmakers pass bill reforming Chinese University’s governing council

It also found that all of the university’s catering outlets had failed to obtain a food business licence, and that none of the operators served exclusively to students and staff.

The commission also concluded that there was “limited competition” in its tendering exercises owing to “lukewarm” interest from external operators looking to use the campus facilities. In two-thirds of the tender exercises analysed by the commission, it found fewer than three tenders were received.

It also highlighted that the operators for the supermarket, convenience store, hair salon and bookstore had not changed since 1981, 2001, 2005, and 2012, respectively.

The commission called on the university to “explore measures to attract more potential operators to submit tenders and step up the publicity of tender invitations”.

Responding to the report, the university said its vice-chancellor agreed with the commission’s recommendations.

Hong Kong graft-buster probes Chinese University research centre over misconduct

The institution has garnered widespread public attention this year.

Earlier this month, the city’s legislature passed a controversial bill shaking up the campus’ governing council by increasing the number of external members and changing the process for appointing the president.

The Independent Commission Against Corruption earlier in August said it was looking into allegations of corruption, misconduct in public office and misappropriation of funds in connection with the operation of a medical research centre at the university.

The university, one of the oldest in the city which consistently places among its best in highly regarded annual rankings, is led by Rocky Tuan Sung-chi.

Tung’s reappointment last year drew criticism from the pro-establishment camp. Some complained it amounted to rewarding him for his actions during the 2019 anti-government protests, when he showed sympathy for student protesters.

Young Hongkongers over the moon at meeting down-to-earth Chinese astronaut Chen Dong during school visit by space programme team

https://www.scmp.com/news/hong-kong/education/article/3243232/young-hongkongers-over-moon-meeting-down-earth-chinese-astronaut-chen-dong-during-school-visit-space?utm_source=rss_feed

Hundreds of young Hongkongers were over the moon at meeting Chinese astronaut Chen Dong on Wednesday morning, with the visitor sharing a rare first-hand account of the exciting but challenging daily routine of living in space.

The astronaut and two colleagues from the country’s manned space programme spoke to pupils at Pui Kiu Middle School in North Point, one of the stops on a four-day trip by a 17-strong delegation.

During the session, Chen Dong also met Chen Man-lin, a 16-year-old pupil he wrote to from space last year as part of a campaign to connect astronauts with the country’s students.

Space agency official praises aerospace efforts as astronauts land in Hong Kong

“It is inspiring to hear about the endurance and the resilience they have to demonstrate in space,” Chen Man-lin said.

The talk was one of many similar sessions taking place at schools across the city, with members of the delegation meeting more than 1,000 pupils from 20 primary and 21 secondary schools.

The four-day visit, led by China Manned Space Agency Deputy Director General Lin Xiqiang, is the first by Chinese astronauts since 2012, when crew members from the Shenzhou-9 mission toured the city.

Chen Man-lin was the only local pupil selected to receive a reply from the astronauts in the countrywide campaign. In his reply letter, Chen Dong, who was involved in the Shenzhou-11 and 14 missions, talked about his gruelling journey to become an astronaut and encouraged the student to keep pursuing her interest in the aerospace field.

The pupil said that given their last interaction had taken place at more than “400km [249 miles] between the ground and the sky”, meeting Chen Dong face to face was “incredibly exciting”.

She also received a signed photograph from the astronaut, which she said she would treasure forever.

It was not the first time for the school to receive members of China’s space programme. Yang Liwei, the country’s first astronaut in space, visited the school and planted an oak tree on its grounds in 2003.

At least 2 Hongkongers in final stage of China’s astronaut selection drive

Principal Ng Wun Kit said the institution was very honoured to again welcome guests from the programme, and believed the school had been selected because of its longstanding emphasis on national education.

“Astronauts contribute so much to our country, so when Yang came to our school, it symbolised him planting a seed from space in Pui Kiu and also in Hong Kong,” he said, describing the visit as highly meaningful.

Yalena Chen Ying-lam, 15, who was among the pupils chosen to welcome the delegation, said Chen Dong was down to earth and unlike her stereotypical idea of an astronaut.

“He’s a very cool person,” she said. “He doesn’t act the way we think astronauts are, like very scientific and logical. Perhaps this is the only chance I get to meet someone this famous face to face.”

She previously took part in a live lecture broadcast from the Tiangong space station by astronauts on the Shenzhou-13 mission in 2021, which she credited with helping her realise that physics was “not that boring”.

Chinese astronaut recruitment drive attracts 120 hopefuls in Hong Kong

She said she was uncertain whether she wanted to become an astronaut herself, but the group’s visit helped open her eyes to other possibilities. “Each small step contributes to the larger one, so even if we don’t go to space we can still play a role, like being engineers or designers.”

Addressing a session at another school, Permanent Secretary for Education Michelle Li Mei-sheung said the government had introduced space science in primary schools as part of its drive to promote STEAM – science, technology, engineering, the arts and mathematics – education.

The move was part of authorities’ broader strategy of “invigorating the country through science and education” and nurturing young talent in the sciences, she said.

At the welcome reception for the delegation on Tuesday, Chief Executive John Lee Ka-chiu said the astronauts’ visit showed that the nation championed local youth and the innovation and technology sector.

“The visit reflects how the country values our city’s youth,” Lee said.

The group arrived in Hong Kong on Tuesday and will depart on December 1.

China releases first panoramic images of Tiangong space station

https://www.scmp.com/news/china/science/article/3243235/china-releases-first-panoramic-images-tiangong-space-station?utm_source=rss_feed

China has released panoramic images showing the full structure of its Tiangong space station for the first time.

The photographs – taken by a Shenzhou 16 astronaut from above the Tiangong before the spacecraft returned to Earth last month – mark a historic moment in the country’s three-decade crewed space programme.

They show the complete 90-tonne, T-shaped station, its gigantic solar panels and main robotic arm, along with other details, and a stunning view of Earth in the background.

The images of the Tiangong – a project that began in 1992 and was completed last year – were released on Tuesday in Hong Kong by a visiting delegation from the China Manned Space Agency.

The space agency said there had been few opportunities for Chinese astronauts to capture a full image of the Tiangong through its viewing windows since construction began in 2021.

But on October 30, after undocking from the Tiangong, the Shenzhou 16 spacecraft made a special trip past the space station for the crew to take photographs from a few hundred metres above the structure.

The photos released on Tuesday were taken by Gui Haichao, the first Chinese researcher and civilian astronaut to enter space.

They show the symmetry of the space station, with its core module Tianhe at the centre and two laboratory modules, Mengtian and Wentian, docked at either side, each with a pair of solar panels spanning 55 metres (180 feet). The three modules were launched separately and assembled in orbit.

The images also show the Shenzhou 17 spacecraft and Tianzhou 6 cargo ship docked at the front and rear of the Tianhe module.

The space station’s 10-metre robotic arm is pictured at the Wentian module, having apparently left its base on the Tianhe. Slots for exposure experiments on the Mengtian module are also visible in the high-resolution photographs.

China’s space station is about 20 per cent of the weight of the International Space Station, the largest man-made structure in space which is currently in a slightly higher orbit than the Tiangong. But the Tiangong still has more than half the capacity for experiments of the International Space Station and a more spacious environment for astronauts to live and work in.

China’s next space mission set to reveal secrets from the far side of the moon

Senior Chinese space officials have said the country plans to expand the Tiangong from a three-module, T-shaped structure to a six-module, cross-shaped one in coming years.

The expanded space station is expected to weigh around 180 tonnes and double its capabilities in low-Earth orbit, Zhang Qiao from the China Academy of Space Technology said during a space conference in Baku, Azerbaijan in October.

The Tiangong is currently in a development phase that is expected to continue for at least 10 years.

Meanwhile, the International Space Station’s operations have been extended until 2030. Nasa has said it could cost US$1 billion to destroy the ISS.

Cross-border consumption reflects further integration with mainland China, Hong Kong leader John Lee says

https://www.scmp.com/news/hong-kong/society/article/3243247/cross-border-consumption-reflects-further-integration-mainland-china-hong-kong-leader-john-lee-says?utm_source=rss_feed

The trend of Hongkongers heading north and spending their cash across the border reflects deeper integration with mainland China, the city leader has said, calling on local businesses to explore ways to draw residents in.

Chief Executive John Lee Ka-chiu said that more than 200,000 Hongkongers travelled to the mainland every weekend.

“When we do well in our integration with the mainland, of course many people will go across the border,” he added in an interview with RTHK set to be broadcast on Wednesday.

But he also noted that there were still more than 7 million residents staying in Hong Kong, as he called on society to work on attracting them to spend their money locally.

“Why can’t you attract more than 7 million residents to spend money here?” he said. “The comparison between more than 7 million and more than 200,000 is 97 per cent and 3 per cent.

“We have such a large number of people consuming here. We need to think about how to get them to consume.”

The immigration figures showed that more than 375,000 city residents left Hong Kong on Saturday last week, mostly through land checkpoints into the mainland. More than 259,000 Hongkongers left the city on Sunday.

Large numbers of Hongkongers have flocked to the mainland for weekends and holidays since the full resumption of cross-border travel after three years of the coronavirus pandemic.

Travellers crossing the Hong Kong-mainland border enjoyed shorter journeys after authorities in the north lifted a mandatory health declaration earlier this month, the final pandemic curb to be axed.

Number of Hong Kong high-speed rail passengers exceeds pre-pandemic levels

Hong Kong’s MTR Corporation earlier said the number of passengers on the cross-border high-speed railway had exceeded pre-pandemic levels, surpassing 17 million this year.

The passenger figures for the National Day and Mid-Autumn Festival holidays reached a record-high of more than 100,000, according to the rail operator.

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Bogus China fortune teller convinces gullible ‘best friend’, 30, she only has a year to live, swindles her out of US$210,000 to ‘extend life’

https://www.scmp.com/news/people-culture/trending-china/article/3242723/bogus-china-fortune-teller-convinces-gullible-best-friend-30-she-only-has-year-live-swindles-her-out?utm_source=rss_feed

A superstitious woman in China, who was told she had less than a year to live by her “best friend” posing as an online fortune-teller, handed over a total of 1.5 million yuan (US$210,000) to extend her life.

The woman, who uses the pseudonym, Xiaoxia, said she was told in 2021 at the age of 30 by a “senior Taoist priest” that she would not live past 31, and she needed to buy a talisman acquired after innumerable hardships to “extend her life”.

The fortune-teller also told Xiaoxia to keep their transaction secret or “it would not be effective”.

Xiaoxia believed the so-called priest and raised one million yuan by borrowing from her relatives and friends, with online loans, and by mortgaging an apartment her sister registered under her name, to pay for the talisman via a chat app.

Her family realised something was wrong and took Xiaoxia to the police. It transpired the fortune-teller was actually disguised by her “best friend” and roommate, surnamed Lu.

Xiaoxia and Lu met online and became real-life friends in 2012.

In 2019, Xiaoxia told Lu she had trouble finding a job and Lu recommended using the Chinese horoscope and fortune-telling to improve her luck.

In 2020, Lu invited Xiaoxia to live with her in Shanghai. After Xiaoxia moved in, Lu introduced her to a “senior Taoist priest”, surnamed Wang, on a chat app.

Wang told Xiaoxia her fortune could be improved at a cost of 10,000 yuan (US$1,400) a month, as well as selling her several objects to bring her luck.

Xiaoxia left Shanghai in 2021 and stopped offering her “monthly sacrifice”.

Xiaoxia was conned out of 1.5 million yuan in total by her so-called best friend.

In November, the Shanghai Qingpu Procuratorate prosecuted Lu for fraud and ordered her to return 275,000 yuan to Xiaoxia.

In May, another Shanghai procuratorate took legal action against a man who scammed his ex-girlfriend of 45,000 yuan to gamble and later tried to escape the debt by disguising himself as his brother and telling the ex-girlfriend he had “died from cancer”.

The next front in the tech war with China: Graphite (and clean energy)

https://www.washingtonpost.com/world/2023/11/29/china-critical-minerals-graphite-trade-united-states/2023-11-13T20:57:54.492Z

A new front has opened in the intensifying U.S.-China tech war: This time, it’s over the metals needed to power electric vehicles and make the computer chips and electronics that fuel the U.S. economy.

And Beijing has made clear its restrictions on critical minerals are payback for Washington’s efforts to curtain Chinese access to advanced American semiconductors.

“This is just the beginning,” Wei Jianguo, former vice commerce minister, said in July, when China restricted exports of gallium and germanium, which are used in high-performance semiconductors, weapons systems and solar panels.

“China has many means and types of sanctions it can use. If restrictions on our high-tech industry continue to escalate, China’s countermeasures will also escalate,” he warned.

China is now doing just that. From Friday, new restrictions on another key mineral — graphite, a soft form of carbon used in almost all electric car batteries, as well as semiconductors and nuclear reactors — will come into effect. The rules will require exporters of high-grade graphite to apply for approval, and were announced just three days after Washington released new controls to limit artificial intelligence chips heading to China.

It is Beijing’s newest and possibly most potent weapon to wield in its competition with Washington, one that could strike at the heart of American efforts to create green jobs while weaning the country off fossil fuels.

Washington has deemed all three minerals targeted — graphite, gallium and germanium — as “critical,” meaning they are key to the United States’ economic or national security and vulnerable to supply chain disruptions. The United States is reliant on Chinese imports for all three of them.

The mood was good, but little has changed between the U.S. and China

China is using its dominance over key materials to exert political pressure, said Jost Wubbeke, an expert in Chinese industrial policy and co-founder at Sinolytics, a research consultancy. “The U.S. is also doing it very well, so that’s what China is trying to do.”

The tit-for-tat export controls underline how much U.S.-China competition has widened. China and the United States have been locked in a years-long rivalry over issues like Taiwan, the South China Sea, the Ukraine war and China’s human rights record. As the world’s two largest economies jockey for global leadership, export controls and protectionist policies are becoming a bigger part of the fractious relationship.

It’s no accident that China dominates critical metals, including another key set of minerals: rare earths, a group of 17 elements needed for almost all of today’s clean energy technology and advanced manufacturing, from smartphones to weapons systems. Between 2018 and 2021, 74 percent of U.S. imports of rare earths came from China.

China’s control of rare earths began three decades ago with targeted industrial policies and export subsidies, helped by cheap labor and a willingness to withstand the heavy environmental toll of mining and processing. The architect of China’s economic transformation, Deng Xiaoping, quipped in 1992 that “the Middle East has oil; China has rare earths.”

As of last year, China accounted for 70 percent of the world’s production of rare earths. China also refines more than half of the world’s lithium and 80 percent of its cobalt, both key parts of batteries, and dominates supplies of nickel and manganese.

China is set to dominate the deep sea and its wealth of rare metals

China is the world’s top producer of graphite as well as the United States’ single largest source of the material, accounting for a third of U.S imports of graphite. Other U.S. allies are even more dependent. South Korea and Japan rely on China for more than 90 percent of their graphite needs.

Just as Washington imposed semiconductor export controls to slow China’s military ambitions, Beijing says its new restrictions on minerals exports will be “conducive to better safeguarding national security and interests.”

This is not the first time Beijing has used its chokehold over critical materials against rivals. In 2010, after a maritime dispute where Japan arrested the captain of a Chinese fishing boat, China blocked exports rare earths — which are needed for making permanent magnets, an essential component in clean energy products including electric vehicle motor — to Japan for two months.

Even as it targets graphite, China is not yet blocking American access to rare earths.

“If they really wanted to kill us, they would [restrict exports of] rare earths. We know they’re willing to use them,” said Gracelin Baskaran, a mining economist focused on critical minerals at the Center for Strategic and International Studies, citing the action against Japan.

Chinese state media and officials have long hinted that this is a possibility. This month, China’s Commerce Ministry issued new rules requiring that exporters of rare earths report details of their overseas shipments to the government.

China’s Xi, in need of a win, appears ready to engage with Biden

Chinese leader Xi Jinping stressed the importance of rare earths as a “strategic resource” during a visit to a magnet maker in Jiangxi province in 2019 at the height of the trade war with the Trump administration.

The People’s Daily, the mouthpiece of the Communist Party, then ran an article saying there was “no mystery” about whether China would use its rare earths as a “counter weapon.”

Just last month the head of the Nonferrous Metals Society of China told the Global Times that China’s prowess in rare-earth refining means it could impose “reciprocal sanctions” on competitors. A communiqué from a rare earths forum organized by the China Nonferrous Metals Industry this month called on the country to “consolidate the advantages of being a global resource power.”

Still, China appears to be allowing some room to maneuver with its recent measures targeting graphite, which the U.S. government had deemed critical in the short-term because of its importance to energy security and threats to supply.

The new restrictions are not a wholesale ban on graphite exports. Instead they let authorities pick and choose what companies will be blocked from importing Chinese graphite. Under the new rules, which categorize the metal as a “dual-use” item that can be used in military or civil applications, Chinese exporters must apply for special licenses and disclose the details of their buyers.

Chinese authorities can choose to block those applications in the name of national security, or they can continue approving them as has been the case for the last several years. Analysts said it won’t be clear for another few months, after new license applications are processed, whether Beijing really intends to limit exports of these minerals.

“This is a warning shot for a sure,” said Emily Benson, a senior fellow at the Center for Strategic and International Studies focusing on trade and technology. “Will they really bite? Probably not, but it’s a sign that the more tools you use to combat China economically, the greater the risk of retaliation.”

For China, restricting the exports of raw materials like graphite could enable it to kill two birds with one stone: Not only will it punish the United States, it could also encourage Chinese companies to move up the value chain and export finished products like magnets, batteries, EVs, solar panels and wind turbines.

But the strategy is not without risks. Even some within China have criticized the controls.

Controlling rare earth exports would encourage more investment elsewhere and “weaken the international influence of our country’s rare earth industry,” Chen Zhanheng, deputy secretary general of the China Rare Earth Industry Association, told the Chinese outlet Cailian in August.

An industry analyst, Zhang Jun, said controls would only raise prices and encourage companies to move away from using rare earths. Tesla said in March that its next-generation batteries would be free of rare earths. Any restrictions on exports, on top of the dire state of the Chinese economy, would hit Chinese companies all along the supply chain hard.

As Australian leader heads to China, a critical (minerals) issue looms

“The market is so bad this year that many small- and medium-sized magnet makers cannot survive,” Zhang told Cailian.

The United States and like-minded countries — including Japan, South Korea and some in Europe — are already looking to diversify their supply chains to rely less on China.

Lynas, the largest rare earths miner outside China, is building a rare earths refinery in Australia. Production has resumed at a rare earths mine in Mountain Pass, between California and Nevada, that had been shuttered for years. Chile, Vietnam and Malaysia are all home to rare earth projects.

China’s measures on graphite, gallium and germanium has made the prospect of similar measures on rare earths more real, hastening the need for an alternative to Chinese supply.

“If China were to force manufacturers to look for other supplies they would be able to find them, given enough time,” said Scott Moore, author of “China’s Next Act,” a book about Chinese sustainability and technology. “There would be a cost factor, but it’s doable.”

Pei-Lin Wu in Taipei, Taiwan, contributed to this report.

Child respiratory sickness overloads China’s paediatric clinics – reports

https://www.theguardian.com/world/2023/nov/29/china-child-respiratory-illness-spike-paediatric-clinics-multiple-pathogens-covid-19-lockdowns-end

A surge in respiratory illnesses in China, particularly among children, has reportedly swamped paediatric units in city hospitals, while authorities have urged calm, attributing it to a post-lockdown wave of illness.

Many hospital wards are full, according to state and other media reports in China. The Global Times reported on Tuesday that the Beijing Children’s hospital was receiving up to 9,378 patients a day and had been at full capacity during the past two months. It also said outpatient clinics, paediatric clinics, and respiratory departments at several Beijing hospitals were booked out for at least seven days.

Photos and videos online and on state media showed crowded waiting rooms with beds lining hallways in a Hebei hospital. One report quoted parents in Jinan saying that half the students in their child’s class were sick. Footage of students doing homework while in hospital reportedly prompted warnings from local officials that schools should not make children catch up on work while they are ill. In Hangzhou one parent told media that classes had been suspended because so many children were away.

Last week the World Health Organization said it was monitoring an increase in “undiagnosed pneumonia in children’s hospitals in Beijing, Liaoning and other places in China”.

Available data suggests rates of flu-like illnesses are more than double those of recent years, but authorities have urged calm, attributing the rise in cases to the beginning of the first flu season since pandemic restrictions were lifted.

At a press conference on Sunday the national health commission urged local authorities to open more fever clinics, extend service hours, and increase supplies of medications.

“We also remind everyone to adhere to the hygienic habits of wearing masks, ventilating frequently, and washing hands frequently, and encourage key groups such as the elderly and the young to actively receive relevant vaccines,” said Wang Huaqing, head of the CDC’s immunisation programme.

“Those who can be vaccinated should try their best to get vaccinated to prevent the occurrence of infectious diseases.”

They said the rise in cases was not being driven by any new pathogens, but instead by the spread of bacteria such as mycoplasma pneumoniae and common pathogens including influenza, rhinovirus, adenovirus and RSV.

Chinese authorities responded to the WHO’s request for information within 24 hours, and during a teleconference provided data that the WHO said indicated increases in doctor consultations and hospital admissions of children due to mycoplasma pneumoniae since May, and RSV, adenovirus and influenza viruses since October. It said this was not unusual given the contributing factors, and did not recommend any travel or trade restrictions.

Maria Van Kerkhove, acting director of the WHO department of epidemic and pandemic preparedness and prevention, said the rise in cases was in line with “what most countries dealt with a year or two ago”.

China was one of the last countries to lift restrictions when it formally ended its zero-Covid policies in January. Other nations saw spikes in respiratory illnesses after the end of Covid-19 restrictions.

“This phenomenon of lockdown exit waves of respiratory infections is sometimes referred to as immunity debt,” Prof Francois Balloux, of University College London, told the Independent.

“Since China experienced a far longer and harsher lockdown than essentially any other country on Earth, it was anticipated that those lockdown exit waves could be substantial in China.”

Some neighbouring countries have expressed concern, given the Chinese government’s lack of transparency regarding previous outbreaks, in particular Covid-19. Some governments are monitoring the outbreak closely, including in Taiwan where the CDC issued warnings for people to take greater care with hygiene and symptom monitoring, given the high volume of cross-strait travel and exchange.

Chi Hui Lin contributed to this report

‘Let nature take its course’: secret China donor gives US$2.3 million over 25 years to fund education, help destitute families

https://www.scmp.com/news/people-culture/trending-china/article/3242616/let-nature-take-its-course-secret-china-donor-gives-us23-million-over-25-years-fund-education-help?utm_source=rss_feed

An anonymous philanthropist in China who uses the alias shun qi zi ran, or “let nature take its course”, has donated at least 15 million yuan (US$2.3 million) over the past 25 years to help deprived children and fund educational facilities.

In the latest act of generosity, Ningbo Charity Federation in the eastern province of Zhejiang received a letter on November 15, signed by the mystery donor which came with more than 100 remittance certificates valuing a total of 1.08 million yuan (US$150,000).

It is the 25th time the charity has received a donation from the same source, state media CCTV reported.

Remittance documents have been sent to the charity every year – always in November or early December – routinely from a non-existent return address in the accompanying letter, according to the report.

Many separate remittance certificates were used for each large donation in order to maintain the donor’s anonymity. Mainland banking rules stipulate that anyone who remits 10,000 yuan (US$1,400) or more must provide a real name.

The donor first sent 50,000 yuan to the charity at the end of 1999 and increased the annual donations to hundreds of thousands of yuan as time went on.

Over the past decade, about one million yuan has been donated each year.

According to the charity, the donor’s identity could potentially be traced by using clues in the letters, but they have not done so to respect the person’s wish for anonymity.

“He sent us a letter. I remember he said in it, ‘I will not do bad things and will also not speak about the good things I did. Just let nature take its course’,” Gao Peng, secretary-general of the Ningbo charity, was quoted as saying.

“So we respected his wish and did not try to find him. We also followed his request of using his donations for education.”

The charity said the donations had been used to help build school facilities and financially aid poor students in Zhejiang and further afield.

The mystery donor has become an online sensation, with many people moved by the kindness and persistence shown in giving to the charity.

“It’s really difficult to donate for 25 years! I wish shun qi zi ran can go smoothly in everything and live to a ripe old age,” one person said.

“This world does have good-hearted people,” said another.

Stories about anonymous donations often trend in China.

In October, a woman representing her older brother, whose alias is “old friend”, donated 155,000 yuan to a charity in central Hubei province.

The man has donated 875,000 yuan (US$122,000) in total over the past six years and requires his donations to be used to help senior citizens in need.

Cocaine-like price hike: China’s new cancer drug is approved in the US but will cost 30 times more

https://www.scmp.com/news/china/science/article/3243209/cocaine-price-hike-chinas-new-cancer-drug-approved-us-will-cost-30-times-more?utm_source=rss_feed

A cancer drug developed by Chinese scientists and that recently received American FDA approval will cost over 30 times more in the US than in China, with two other Chinese cancer drugs set to experience similar price bumps in the US market.

However, even with the huge price mark-up in America, the Chinese cancer drugs will still be priced significantly less than similar drugs sold in the US.

On Monday, California-based Coherus Biosciences, which partnered with Shanghai Junshi Biosciences to market their Toripalimab drug, revealed the price of Loqtorzi, the name it is marketed under in the US.

In China, the cost of a single-dose vial of Toripalimab is around 2,000 yuan (US$280), according to Chinese cancer informational websites. The cost of a single-dose vial in the US will wholesale for US$8,892.03, Coherus wrote in a filing to the US Securities and Exchange Commission on Monday. The American price is more than 31 times the price of the same drug marketed in China.

The raised price will still be 20 per cent less than Keytruda, the top selling PD-1 antibody drug in the US, according to the FiercePharma analysis website.

In China, the price of the drug is based on enrolment into the national healthcare insurance system, and is not its wholesale price. However, by the end of last year, 95 per cent of Chinese citizens were enrolled in the system with basic coverage – nearly universal access – according to the National Medical Insurance Administration.

The drug price spike is comparable to the illicit cocaine market. US media reports the American street value is 40 times that of the price in Colombia where the narcotic originates.

Following approval by the Food and Drug Administration (FDA) for Toripalimab, two more Chinese-made cancer drugs have received approval for distribution in the US this month.

Fruquintinib, an oral medication developed by Chinese biopharmaceutical company HutchMed, was approved on November 9 to treat adults with previously treated metastatic colorectal cancer.

Efbemalenograstim alfa, an injectable drug developed by Evive Biotech, a global biopharma subsidiary of Hangzhou-based Yifan Pharmaceutical, received approval on November 16 to treat chemotherapy-induced neutropenia, or low levels of a type of white blood cells.

Fruquintinib, which will be marketed as Fruzaqla in the US by Tokyo-based Takeda Pharmaceutical Company, will also face a price bump similar to that of Toripalimab.

A box of 21 pills each containing 5mg of the drug is sold in China for around 7,500 yuan (US$1,050), according to Chinese medical news site Medical Valley. Its US wholesale price will be US$25,200 for the same amount of medication, according to a Takeda prescribing document, putting it at 24 times the cost in China.

Drug companies in the US have claimed the high cost of research and development is behind the price of drugs in the country, however a study published last year in the Journal of the American Medical Association challenged this idea.

The US has the highest prices for new drugs in the world, but the country’s federal health insurance agency historically has had no ability to negotiate these prices, according to the study.

The authors found that of the 60 drugs they studied – representing one-fifth of all drugs approved in their study time period of 2009 to 2018 – there was no association between estimated research costs and the drugs’ listed price.

“Drug companies charge what the market will bear,” the researchers said. This is influenced by demand for the drug, whether patients need to continuously take it, and existing market competition.

Chinese scientists develop early screening method for pancreatic cancer

When Toripalimab was approved, there was speculation the drug could be priced at a significant discount compared to its main competitor on the US market. This stemmed from pharmaceutical giant Eli Lilly promising that the Chinese PD-1 inhibitor they were seeking FDA approval for would come at a 40 per cent discount if approved.

But during an investor call after Toripalimab received approval, Dennis Lanfear, the CEO of Coherus, said such a “heavily” reduced price was off the table, according to FiercePharma.

Keytruda, New Jersey-based Merck & Co’s main counterpart to Toripalimab, is also sold in China and its list price on entering the market was half its price in the US, according to FiercePharma.

Fruquintinib is an oral medication approved to treat patients with metastatic colorectal cancer, the first chemotherapy-free treatment option approved for patients with all types of the cancer in over a decade. It first received approval by the Chinese National Medical Products Administration (NMPA) in 2018.

Colorectal cancer – which begins in the colon or rectum – is the third most commonly diagnosed cancer and third leading cause of cancer related deaths for both men and women in the US, according to the American Cancer Society. Worldwide, colorectal cancer was the third most prevalent type, Takeda said in a press release on the medication.

“For more than a decade there has been limited innovation for patients with metastatic colorectal cancer,” said Teresa Bitetti, president of global oncology business at Takeda.

Colorectal cancer accounts for 7.8 per cent of all new cancer cases diagnosed in the US, and 70 per cent of patients with the cancer will experience metastasis – when cancerous growths spread beyond the colon and rectum – according to Takeda.

“Metastatic cancer patients often present with inoperable disease … we must evaluate and consider treatment options that will improve overall survival without compromising quality of life,” Cathy Eng, a doctor at Vanderbilt University Medical Centre, said in a HutchMed press release.

The approval of Fruquintinib is based on two trials with more than 1,000 patients. During the trials, those who received the medication with supportive care had double the amount of progression-free survival compared to those who received a placebo and supportive care. Patients receiving Fruquintinib had their risk of death cut by 34 per cent, according to Takeda. The most common side-effect of the medication was hypertension, followed by hand-foot syndrome and elevated protein in the urine, according to the FDA.

For the three Chinese drugs approved by the FDA this month, rights to market the product in the US belong to other companies.

While Takeda will manufacture and commercialise Fruquintinib outside China, HutchMed will receive royalties on net sales, and could receive other payouts if major milestones are hit by the drug, HutchMed said.

Efbemalenograstim alfa – which will be marketed as Ryzneuta in the US by New Jersey-based Acrotech Biopharma – will help prevent the side-effects associated with low neutrophil levels, the company said in a press release.

Having low neutrophil levels increases a patient’s risk of infection, and chemotherapy-induced low levels often happen in the weeks after treatment, according to the Centres for Disease Control and Prevention.

Western drug makers pivot to India as China becomes ‘less attractive option’

The drug, which was approved by China’s NMPA in May, has undergone 12 clinical trials involving more than 1,200 patients across the world, and found to be effective in cutting the time patients experience severe low neutrophil levels, Acrotech said in a press release.

Wang Xiaodong, co-founder of biotechnology firm BeiGene, said on the sidelines of the Hong Kong Laureate Forum this month that China would drive a boom in the research of innovative medicines.

“China has already caught up [with the West]. As long as a product is available overseas, Chinese companies will produce even more,” Wang said.

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Xi Jinping’s grip on Chinese enterprise gets uncomfortably tight | Business

https://www.economist.com/business/2023/11/26/xi-jinpings-grip-on-chinese-enterprise-gets-uncomfortably-tight

AS THE HEAD office of Northern Heavy Industries (NHI) comes into view, so does a huge slogan fixed permanently to its roof in metre-high red Chinese characters, where you might usually see a company name. The 22-character mouthful reads: “Wave High the Great Banner of Xi Jinping Thought in the New Era of Socialism with Chinese Characteristics.” A billboard-sized image of Mr Xi, China’s leader, waves to visitors as they enter the lobby. In a nearby factory NHI’s tunnel-boring machines, used for digging metro lines, rise four storeys into the air. The company was founded by the state many decades ago. Today more than ever it embodies an archetypal image of a state-owned enterprise (SoE).

Except that on paper NHI is private. A company called Fangda Group, which is listed in Shenzhen and fully privately owned, took a 47% stake in NHI in 2019, in a rare instance of a private company bailing out a state one. This made Fangda by far the largest single shareholder. The deal should have privatised NHI.

But in China’s corporate sector nothing is so straightforward. Fangda is not the controlling shareholder. Executives say it does not have one. Some staff in its factories call it a state firm; some say it is private. When asked about Fangda’s involvement in NHI, a manager says the investment was a “policy decision”. An investment adviser says that, for reasons he cannot divulge, investors should approach Fangda itself as if it had the backing of the state—even though the state does not feature in its shareholder register. Fangda’s website is covered in Communist Party imagery such as sickles and hammers. It describes its corporate mission as “listening to the party and following the party”.

Chinese business has become much more professional in the past three decades. Its stockmarket is one of the world’s largest and has been rapidly opening up to Western investors. In futuristic industries like electric vehicles and green energy Chinese firms lead the world. China’s digital economy has produced rare rivals to America’s internet giants. Many have global ambitions and are backed by some of the world’s savviest asset managers.

Yet over the same period the lines between the state sector and private business have grown blurrier. Many global investors increasingly view China’s private sector as a captive of the Communist Party. So do Western politicians, who rail against companies such as Huawei and TikTok for their alleged links to the party (which the firms deny). A recent paper from the Centre for Strategic and International Studies, a think-tank in Washington, asks: “Can Chinese firms be truly private?” Monitoring state influence has thus become more important than ever. It has also become more difficult than at any time in the past.

One factor that has complicated matters is the central government’s policy that explicitly seeks to blend state and private interests. Launched in 2013, “mixed-ownership reform”, as it is known, has encouraged private investments in some state firms and vice versa. The philosophy behind the policy was to introduce private capital into clunky state firms.

Most of the investment since then, however, has flowed in the other direction. According to Fitch, a ratings agency, on average 50 state companies a year took the controlling rights of listed private business between 2019 and 2021, up from fewer than 20 in 2018. Privately owned firms’ share of market value among China’s 100 largest listed firms shrank from a peak of about 55% in mid-2021 to just 39% at the end of June this year, according to the Peterson Institute for International Economics (PIIE), another Washington think-tank. State companies may have spent around $390bn investing in private companies since 2018, according to data from Dealogic, a research firm.

Mixed-ownership reform may have helped some SoEs perform better. Several academic studies found that it improves innovation and the return on assets. However, the reform has also created a vast grey sector that has characteristics of both state and private companies. The rise of government-backed funds armed with $1trn in capital has injected state funding into many private technology companies, including plenty of promising startups. State investors have also been taking “golden shares”, tiny stakes that grant outsized voting powers, in China’s internet giants. In October it was revealed that a government agency had taken a 1% stake in a subsidiary belonging to Tencent, China’s mightiest internet titan.

With the exception of top executives and government officials no one really understands what golden shares do. Company spokespeople say they are harmless. Investors disagree. When earlier this year such an arrangement came to light at Tencent and Alibaba, another internet giant, their share prices sank. An investment manager in Hong Kong explains that the discount was the result of state links being associated with corporate and financial stability, not risky innovation and animal spirits. From the state’s perspective, he adds, rapid profit growth and high valuations could be perceived as dangerous if they take place in the wrong sectors.

Distinguishing between state and private companies is becoming more difficult because state influence over companies is no longer just tied to ownership, says Margaret Pearson of the University of Maryland, College Park. In “The State and Capitalism in China”, published in May, Ms Pearson and her co-authors say that China is moving from state capitalism, where business is guided by national interests, to “party-state capitalism”, in which it is organised around the interests of the Communist Party.

Until the late 2000s how the party exercised its power over corporate management was mainly evident in its appointments of SoE bosses. That has changed significantly since Mr Xi became party chief in 2012. A sweeping anti-corruption campaign, followed by a crackdown on tech companies, has helped deflate and reshape China’s digital economy. Outspoken tech entrepreneurs have vanished. A handful of tech founders and other business leaders have stepped down. Alibaba is splitting itself into several firms. Tencent has shed tens of billions of dollars in assets. New Oriental, China’s most promising private-education group before the state snuffed out its entire industry almost overnight, has become an online marketplace for agricultural and other products. Insiders argue about precisely how much direct influence the party had on such corporate decisions. Most agree that it is pleased with the outcome.

State support, implicit or explicit, can help businesses aligned to Mr Xi’s vision. A lot of innovation in green energy, electric vehicles, robotics and digitisation is done by private firms but bankrolled by the state. Many entrepreneurs report that life is good in those areas. In sensitive domains like generative artificial intelligence (AI), new services are developed hand in hand with the state. Private companies working on AI frequently consult regulators, who provide guidance for what development is and is not permissible. Rather than regarding such consultations as an obstacle to innovation, Chinese AI firms often see it as a fast track to success.

The party exercises control in subtler ways, too. One tool is its corporate “social credit” system. Launched not long after Mr Xi came to power, it rates companies based on factors including legal and debt-payment record. A recent review of all publicly available scores in Zhejiang, a wealthy coastal province, by Lauren Yu-Hsin Lin at the City University of Hong Kong and Curtis Milhaupt of Stanford Law School, found that companies with more political connections had higher scores. Other than a company’s size, the variable most closely associated with a high score is having directors or a chief executive who served in important government or party positions.

Firms with high scores can be “red-listed”, or given preferential access to credit. Ending up on the system’s blacklist makes it exceedingly hard to get loans. This gives private firms a strong incentive to follow state policies even in the absence of direct state ownership.

Another way for the party to control firms is through party committees, where employees who are party members meet to discuss ideology and its place in corporate life. These cells typically do not have formal administrative clout. But they channel information about the company or its industry to regulators. This information may in turn shape local regulations, notes a banker. As with golden shares, the clearest impact that party committees have had so far is to breed distrust among foreign investors, and between foreign firms’ local subsidiaries and their headquarters.

Many of the changes in the private sector can be explained as an attempt on the part of entrepreneurs to balance commercial activity while also showing loyalty to the party and fulfilling political duties, says Huang Tianlei of PIIE. Showing loyalty does not necessarily make them less profit-seeking. They are simply trying to adapt to a political economy founded on the supremacy of the party.

Yet the blurrier the line between the state and the private sector, the harder it becomes for entrepreneurs to strike a balance between party and profit. Ms Pearson and her co-authors find that private companies may not be “secure enough in their autonomy from the state to pursue their own interests with ease”. It is not just investors who find the system tiresomely muddled. The view from within is getting hazier, too. ■

China’s C919 clears the runway for overseas suppliers, broadening market appeal despite headwinds

https://www.scmp.com/economy/china-economy/article/3243191/chinas-c919-clears-runway-overseas-suppliers-broadening-market-appeal-despite-headwinds?utm_source=rss_feed

Though the success of China’s home-grown narrowbody passenger jet is clearing the runway for the world’s top transport equipment firms to enter its market, there may be turbulence along the way, as some foreign investors have expressed concern over intellectual property rights and domestic competition is on the rise.

The C919, which completed its maiden commercial flight in May with China Eastern Airlines, is a symbol of the country’s aim to carve out a share of the billion-dollar passenger jet market presently dominated by Boeing and Airbus.

The two manufacturing giants have estimated China would take at least 20 per cent of global plane deliveries in the next two decades.

Stakes are thus high for Commercial Aircraft Corporation of China (Comac), the C919’s manufacturer. To keep ahead of industrial and geopolitical changes, the company is ramping up production and driving further investment in China’s aviation supply chain through overseas partnerships.

This need has become all the more urgent given the heated competition between Beijing and Washington in advanced technology.

The US government has tightened exports to China of dual-use items, products which by its definitions have both commercial and military applications. China, meanwhile, has focused on self-reliance and made hefty investments in aviation, in part to offset those controls.

But autarky in an industry like aviation, which is highly technological and almost inextricably globalised, appears a functional impossibility.

As the sector struggles to recover from the coronavirus pandemic and the loss of most business with Russia following its invasion of Ukraine last year, China’s market size is too large to be ignored.

Last week, French maintenance tooling company Dedienne Aerospace opened a new factory in Shanghai, a clear vote of confidence in the country’s prospects.

Guillaume Justamon, Dedienne’s sales and marketing director, was quoted by the official Xinhua news service as saying China’s market for aviation maintenance services will grow at an annual rate of 6.9 per cent over the next 10 years.

Manager Carrie Qi of Zhengzhou Constant Holy Kay Trade, which imports and distributes aerospace cable products from companies such as Prysmian Group, said competition is becoming more intense.

“Chinese companies are building up their capacity to develop products,” Qi said at the Shanghai International Commercial Airshow last week, adding that local firms are particularly competitive when it comes to pricing and delivery.

“They also want to match the quality of multinationals, although it’s difficult when it comes to switching brands.

“We are hoping C919 can ramp up production, then we can go to our suppliers and discuss pricing. Now that the pandemic is behind us, logistics costs are also coming down a bit and we can count on delivery time a bit better.”

For some overseas players, however, impediments to expansion continue to exist. Another foreign supplier to Comac who did not want to be named said intellectual property protection is still weak in China.

“We have seen some suppliers producing cheaper and lower quality products that are similar to ours,” one manager of aviation equipment said at the air show.

“Of course it’s a competitive market here, now that the C919 is operating commercially. We hope that China will improve its intellectual property protection, but in practice there are some instances that still concern us. It’s always a risk here.”

Wang Feng, a technical aerospace adviser for the Greater China region at French software maker Dassault Systemes – a supplier to the C919 – said the company is also facing issues relating to pirated software.

“It is something we have had to spend resources on,” Wang said, adding that improving transparency in company registration in China has helped the identification of software piracy in the open market.

Alex Vlielander, chief customer officer at Liebherr-Aerospace, said the Chinese aerospace market is huge and will increase considerably during the coming years.

Despite uncertainty surrounding China-US relations, the German equipment maker – which has been operating in China since 1978 and served as supplier to the C919 and Comac’s regional ARJ21 jet – continues to invest.

In September, Liebherr-Aerospace signed a letter of intent covering customer service and spare parts for the air management and landing gear systems on Comac’s two vessels.

Per a press release announcing the deal, the German company will provide life-cycle support for its onboard systems and train maintenance personnel.

For Liebherr, China is a particularly relevant production location, Vlielander said, but the company has always sought to “counteract dependencies” in individual markets.

“We do know that as China industrialises and develops, it is going to be less reliant on foreign companies. The Chinese have proven time and time again that they are very capable in developing businesses,” he added.

“We will be engaged in China for as long as it makes sense for us.”

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Chinese navy visits Myanmar in ‘show of friendship’ following upsurge in fighting along border

https://www.scmp.com/news/china/diplomacy/article/3243147/chinese-navy-visits-myanmar-show-friendship-following-upsurge-fighting-along-border?utm_source=rss_feed

Chinese warships are visiting Myanmar, highlighting the strong relationship between the two countries’ militaries amid recent clashes in border regions that threaten to complicate relations.

The PLA Navy ships, including the Zibo, a guided-missile destroyer, and the Jinzhou, a guided-missile frigate, arrived in Yangon on Monday for a four-day visit and were met by senior Myanmese officers, state broadcaster CCTV reported on Tuesday.

The Chinese delegation will take part in “professional exchanges, cultural and sports competitions, and mutual visits to military facilities with officers and sailors of the Myanmar Navy”, according to the report.

A spokesman for the ruling junta Zaw Min Tun confirmed that the two warships and a supply vessel, carrying more than 700 sailors between them, had arrived at Thilawa port on Monday ahead of “naval security exercises between Myanmar and China”, according to the Global New Light of Myanmar newspaper.

He did not give further information about the exercises, but said the visit reflected the “strong friendship” between the two militaries.

It is the first Chinese naval visit to the country since 2017.

Could Myanmar’s military be deposed by armed groups fighting across the country?

Fan Hongwei, a specialist in China-Myanmar relations at Xiamen University, said the visit “indicates that military exchanges between China and Myanmar have not been affected by the situation in the north [of Myanmar]”.

The visit coincides with an upsurge in fighting close to the Chinese border in Shan state between the junta and the Three Brotherhood alliance, made up of armed groups representing ethnic minorities. The militia groups have taken over a number of crucial trade hubs since launching an offensive last month.

Last week the People’s Liberation Army also announced a live-fire exercise involving troops from both countries along the border.

Meanwhile, China is engaged in a crackdown on telecoms scams run from the lawless border region. This has already resulted in the death of a leading warlord in custody and members of his family, along with thousands of other suspects being handed over to the Chinese authorities.

Reports that the rebel groups have been helping to close cybercrime bases have heightened speculation that Beijing may adjust its approach and put even greater pressure on the junta if its fails to put a stop to cross-border telecoms scams.

Yin Yihang, a fellow with Beijing-based think tank the Taihe Institute, said violence in the border regions could create further uncertainty in relations between the two countries.

Distrust of China runs deep in Myanmar, especially since Beijing refused to condemn or sanction the generals behind a coup that removed Aung San Suu Kyi’s democratically elected government and saw tens of thousands of people being thrown into jail.

“Any comments by China could be seen as interference in Myanmar’s internal affairs and create a backlash from the people in Myanmar,” Yin said. “So China needs to tread very carefully to avoid being drawn into the domestic conflicts in Myanmar.”

Yin said the crackdown on fraudsters was a question of law and order rather than security, and said it was unclear how much influence Beijing had over the armed rebel groups.

“That’s why China started live-fire drills at the border regions, which is not just a warning to the military government but also to the rebel groups that their conflicts should not jeopardise peace and stable bilateral ties.”

UN says Myanmar imported US$1 billion in arms from China, others since coup

In a rare demonstration in Yangon last week, protesters gathered in front of the Chinese embassy, accusing Beijing of backing the armed groups.

Sun Yun, a senior fellow at Washington’s Stimson Centre, said: “It is better for the bilateral relations that the cyber scams are pushed out by the ethnic rebels rather than a solution imposed by China.

“For China to push harder may not bring a solution but bring more stress to the bilateral ties.”

Sun said it was unlikely Beijing would change its strategy in Myanmar and the crackdown highlighted its influence.

“In fact, the fact that China has spent so much time and efforts to persuade the military government to cooperate with China on the cyber scams is a good example of China’s approach, which may appear to many Chinese as too tolerant,” she said.

“I don’t think China is aiming to alter the political reality in Myanmar today, but I do think China aims at protecting itself from cyber scams.”

Fan said China would continue to push for peace talks in Myanmar.

“Both the internal conflicts and the telecoms scam have demonstrated that China is a direct victim of the instability and unrest in Myanmar,” Fan said.

“Only when peace, stability and development are achieved in Myanmar, can Chinese investment in Myanmar and cooperation between the two sides really move forward.”

Climate change: record clean energy generation could propel China to peak power sector emissions by 2025, report says

https://www.scmp.com/business/china-business/article/3243124/climate-change-record-clean-energy-generation-could-propel-china-peak-power-sector-emissions-2025?utm_source=rss_feed

Record clean energy installations could help China’s power sector to reach peak emissions in the next two years, but continued investment in coal-based capacity and a lack of firm emissions targets could undermine optimism about the country’s green transition, according to climate researchers.

China is expected to generate 440 terawatt hours (TWh) of clean electricity from solar, wind, hydro and nuclear sources in 2023, exceeding the country’s 10-year average electricity demand growth of 367 TWh for the first time, said Helsinki-based climate think tank the Centre for Research on Energy and Clean Air (CREA).

This could mark an “inflection point” in the country’s energy system, whereby non-fossil energy installations have reached a level at which they can start not only to cover all of the additional electricity demand, but to replace coal, CREA said in a report on Wednesday.

If the trend continues, China’s power sector emissions could peak and begin to fall in the next two years, CREA’s analysts estimated.

“The astonishing growth of clean energy installations in China up to 2023 means the country now has the ability to peak and decline carbon dioxide emissions imminently by ensuring the continuation of that growth,” said Lauri Myllyvirta, lead analyst at CREA, in an email separate to the report.

“Yet, China’s current climate commitments leave space for carbon dioxide emissions to increase until the end of this decade, which would make meeting the goals of the Paris Agreement all but impossible.”

The think tank urged China to strictly control new coal power capacity, firm up its targets for capping power sector emissions, and accelerate investment in clean power generation and electricity storage to reduce its reliance on coal power.

China, the world’s largest greenhouse gas emitter, is targeting peak carbon emissions by 2030 and net-zero emissions by 2060.

According to another report, published on Monday by CREA and the Heinrich Böll Foundation (HBF), a German think tank, China’s carbon dioxide emissions are forecast to rebound in 2023 from a slight decline last year, increasing by at least 4 per cent year on year, as a result of a collapse in hydropower output caused by a historical drought that drove up coal-fired power generation, and the reopening of the economy after almost three years of Covid-19 restrictions.

While China’s deployment of clean energy generation has reached a scale aligned with the Paris Agreement goals of limiting global warming to 1.5 degrees Celsius, its total carbon emissions, energy consumption and investment in coal-fired power capacity remain off track, according to CREA and HBF.

Despite President Xi Jinping’s declaration that China would “phase down” coal use starting from 2026, the government has been promoting a massive wave of new coal power plants on the basis of energy security concerns. From the start of 2022 to July this year, China’s coal power capacity saw a net increase of 40 gigawatts (GW), while the rest of the world saw a net reduction of 19GW, according to the CREA and HBF report.

Construction of new coal plants outside China is on track to decline for the second year in a row and reach a record annual low in 2023, according to a report by Global Energy Monitor published on Tuesday.

“China’s emissions matter hugely for the global climate trajectory,” said Jörg Haas, head of the globalisation and transformation division of HBF.

The expansion of coal-fired power generation in China has been by far the main driver of increases in global emissions, responsible for three quarters of total emissions growth since the signing of the Paris Agreement in 2015, according to CREA.

“To keep [the Paris Agreement] goals within reach, it’s essential for China to commit to reducing power sector emissions as soon as possible,” said Myllyvirta.

How China’s lottery boom reflects a ‘long and challenging road’ to its economic recovery

https://www.scmp.com/economy/china-economy/article/3243129/how-chinas-lottery-boom-reflects-long-and-challenging-road-its-economic-recovery?utm_source=rss_feed

Every time she travels to a new Chinese city, Shi Xiangyu tries her luck at one of the local lottery shops that have become increasingly ubiquitous across the country over the past couple of years.

“I am seeing more lottery shops everywhere, which has fuelled my interest,” the 28-year-old said. “Sometimes there are city-exclusive scratch cards, too.

“Seeing other people win makes me want to try my luck, or just for fun.”

Indeed, as economic uncertainties mount and the nation’s uneven recovery has suppressed incomes, many Chinese people have grown more passionate about partaking in the lottery.

‘Tax on the poor’ or short cut to riches? China’s disgruntled youth take a punt

The shifting risk appetite among some consumers means they are more willing to spend a small amount of money on a lottery ticket to test their luck, even if the odds of winning are astronomical, according to analysts.

Lottery sales totalled nearly 476 billion yuan (US$66.6 billion) in the first 10 months of the year, according to data from the Ministry of Finance. That equates to an average of 340 yuan (US$47.50) spent on tickets by each of China’s 1.4 billion residents. Additionally, sales were up 53 per cent nationwide, compared with the same period last year – a rise of nearly 165 billion yuan.

Qichacha, a corporate data provider, said the registration of lottery-related companies in China grew by 38 per cent during the first 10 months of 2023, compared with a year earlier. In the past five years, such registrations have increased by 188 per cent, and each newly registered company can bring a number of new lottery booths.

However, in a June report, researchers at Anbound, an independent think tank headquartered in Beijing, said that “booming lottery sales signal a long and challenging road ahead for the domestic economic recovery, indicating that market confidence still needs to be stimulated”.

“As economic recovery is sluggish and consumer spending is subdued, lottery tickets should represent a non-essential expenditure, while people seem to be moving from a ‘relatively risk-averse’ stance to a ‘relatively risk-seeking’ one,” the report said. “The rise in lottery consumption suggests that opportunities for wealth accumulation through working are thought to be diminishing.

“Hence, people are more inclined to take a chance with a lottery ticket, hoping for a stroke of luck that could lead to sudden wealth.”

Consumers and investors have been struggling through China’s post-Covid economic recovery that has been slowed by domestic and international headwinds and tumult in the property market.

All 31 provincial-level jurisdictions saw lottery sales jump in the year’s first 10 months, with Guangdong, Jiangsu and Zhejiang taking the lead in sales growth.

Gambling in China is generally banned apart from the China Sports Lottery and China Welfare Lottery, both of which have traditional lotteries that involve selecting numbers and buying scratch cards.

Finance ministry figures show that sports betting grew by 68 per cent in the first 10 months of 2023, year on year, while lottery and scratch-off sales grew by 91 and 88 per cent, respectively.

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Fiji woos China for upgrade of ‘strategically important’ ports even as debt concerns mount

https://www.scmp.com/week-asia/economics/article/3243118/fiji-woos-china-upgrade-strategically-important-ports-even-debt-concerns-mount?utm_source=rss_feed

Fiji’s deal to partner China to develop its ports and shipbuilding industry has raised questions over the wider security implications of waving in Belt and Road Initiative projects, experts say, as well as fears over who picks up the tab in small, indebted Pacific nations.

With an economy worth just US$4.8 billion and home to fewer than 1 million people, Fiji sits in waters between Australia and Hawaii, where deep water port access appeals to Beijing as the contest for influence across the Pacific heats up.

Fiji Prime Minister Sitiveni Rabuka last week announced the “potential collaboration with China” to modernise port facilities and shipyards, adding Beijing’s global security outlook and Belt and Road Initiative “aligns with our nation’s development agenda”.

That statement, which followed a meeting with Chinese President Xi Jinping on the sidelines of the Apec summit in San Francisco, appeared to unexpectedly tread away from long-term security ties with Australia, New Zealand and the United States, bonds put on a surer footing since

Fiji suspended a police training deal with Beijing earlier this year.

“Like many Pacific leaders, Rabuka senses that this time in the geostrategic light is an opportunity to boost livelihoods through an emphasis on commercial relations,” said Henryk Szadziewski, affiliate at the Center for Pacific Islands Studies at the University of Hawaii. “If he can achieve this goal, it would provide an interesting template for other states attempting to control polarising power politics.”

While Western nations are left speculating over the motivation of Rabuka’s China pivot, analysts say simple pragmatism is at play.

“In the end, he is about Fiji and getting things for Fiji,” said Graeme Smith, associate professor of politics at Australia National University, adding Rabuka had already “reached out to Australia” for help with the shipbuilding programme .

‘Our values differ’: Fiji rethinks China security ties as Pacific tensions rise

Fiji has some of the best ports among developing Pacific nations, a boon to its exports of sugar, rice and bottled water label Fiji Water.

Upgrading them would be quicker than starting from scratch in places that Beijing might have security goals in the region, notably the Bina Harbour project on Malaita in the Solomon Islands.

Climate change-fuelled tropical cyclones have damaged ports in countries indebted to China, such as Tonga and Vanuatu, and may also make Fiji appear attractive to Beijing.

Fiji’s port of Lautoka is on the west coast of the main island Viti Levu near the Bligh Water, the centre of Fiji’s dreams for the future.

“Its location is strategically important for Pacific maritime routes, and in particular for connecting Fiji to the global economy,” said Mihai Sora, a research fellow in the Pacific Islands Programme and project director of the Aus-PNG Network at Australia’s Lowy Institute.

But first, there are questions over money.

Fiji has debt of some US$4.29 billion, most of it domestically held.

Of this debt, the nation owes US$167.5 million to the Export-Import Bank of China, according to a Fiji finance ministry report.

Government-owned Fiji Ports Corporation Limited (FPCL) took US$77.5 million in bank loans to upgrade port facilities in the early 2000s.

Last year, Fiji’s then economy minister Aiyaz Sayed-Khaiyum said it would cost the FPCL US$26.7 million to clear Suva Harbour, Lautoka and Levuka port of 17 sunk vessels and 32 wrecks.

From Papua New Guinea to Vanuatu, China has some US$1.3 billion in outstanding bilateral loans across the Pacific Islands, according to a December 2022 report by New Delhi-based think tank Observer Research Foundation.

Solomon Islands hosts China-funded Pacific Games amid big-power rivalry

In 2020, the Solomon Islands sought US$100 billion in loans, according to Reuters, after cutting diplomatic ties with Taiwan.

This resulted in the Solomon Islands becoming a crucial chess piece for Beijing’s Belt and Road Initiative. Last year, the Solomons took a US$66 million loan from China to install 161 Huawei telecommunication towers while Beijing stumped up US$119 million into the ongoing Pacific Islands Games in Honiara, a win for Prime Minister Manasseh Sogavare in attracting leaders from across the region to the island group.

“China is at pains to brand itself as both a leader and fellow member of the Global South,” Sora of the Lowy Institute said. “Xi would have been looking to woo Rabuka by promising something he knows the Fijian prime minister wants – not more security cooperation with China, but more support for infrastructure projects.”

China has dismissed talk of geopolitical agendas, saying its goal is development and commercial ties.

“If we really need to compete, let’s see who provides more effective assistance to Pacific Island countries,” China’s ambassador to Fiji Zhou Jian said last week.

But Chinese financing alone does not guarantee fast friendship with the Pacific nations, experts say, citing the failure last year of Chinese foreign minister Wang Yi to seal a regional security pact that was widely rejected by 10 Pacific nations.

Fiji’s government did not immediately reply to questions on the nature of the partnership with China. But experts warn of adding to the nation’s debt.

“With Fiji’s debt levels already high, it would be sensible for China to be careful about offering another huge infrastructure loan, unless the conditions are extremely favourable to Fiji,” Sora said. “There’s not a lot of transparency about the details, yet.”

Fiji’s locals are also anxious about Chinese workers taking on the job of building their nation’s infrastructure.

“Chinese contractors will be the people pushing the deals and hustling on the ground,” Smith of ANU said, explaining they would have “some capacity down the line to have maintenance work done on Chinese ships”.

‘Insult to civilisation’: dead girl, 16, sold for US$9,300 as ‘ghost bride’ in China shocking social media, sparking call to ban ‘corrupt custom’

https://www.scmp.com/news/people-culture/trending-china/article/3242608/insult-civilisation-dead-girl-16-sold-us9300-ghost-bride-china-shocking-social-media-sparking-call?utm_source=rss_feed

A man in China has accused the adoptive parents of his 16-year-old daughter of selling her as a “ghost bride” after she committed suicide.

However, while the police have been able to track down the 66,000 yuan (US$9,300) bride price transfer, they say there are no grounds for a prosecution.

The man, surnamed Sun, from eastern China’s Shandong province, said his biological daughter, Xiaodan, committed suicide by jumping from her ninth-floor home last December after long-term emotional abuse by her adoptive parents.

Sun said he and his wife put Xiaodan up for adoption in 2006 because they already had twins and could not afford to raise her. They visited her sometimes, pretending to be relatives of the adoptive family.

Sun accused the adoptive parents of “marrying” her to a young dead man, surnamed Zhang, after she died, and receiving a 66,000-yuan (US$9,300) bride price from his parents.

Ghost marriages have a 3,000-year history in China and are still practised in certain less-developed rural areas.

An ancient tradition holds that a person who dies single will not be blessed in the afterlife and should be matched with others who have died unmarried.

As with traditional Chinese weddings, families of a newlywed “ghost couple” exchange both bride price and dowry and regard each other as relatives by marriage.

One online observer has described ghost marriages as “an insult to the dead and modern civilisation in the name of love”.

The practice has led to crimes such as the theft of corpses or bone ashes of young women, which are then sold to become the “bride” of a dead man.

Sun said Xiaodan was buried with Zhang to complete the wedding ceremony.

He asked the police to punish the adoptive parents for domestic violence and desecrating corpses.

However, according to the Shanghai Morning Post, the police could not find any evidence of a crime, despite tracking down the 66,000-yuan money transfer from the dead man’s parents to Xiaodan’s adoptive parents.

Investigators said there were no legal grounds for punishing people involved in ghost marriages.

Yao Jianlong, director of the Shanghai Academy of Social Sciences Institute of Law, told China Women’s News that arranging a ghost marriage is not a crime under Chinese law, and previous cases led to punishment only because those involved had broken other laws, such as stealing and damaging the corpses.

Japan’s push for anti-China security alliance hits rough waters in Southeast Asia

https://www.scmp.com/comment/opinion/article/3242965/japans-push-anti-china-security-alliance-hits-rough-waters-southeast-asia?utm_source=rss_feed

“We would like to strengthen our cooperation with the Philippines to maintain and strengthen a free and open international order based on the rule of law,” Japanese Prime Minister Fumio Kishida said during his visit to Manila this month. Describing the Philippines as an “irreplaceable partner”, Kishida called for tighter security ties among like-minded nations, most notably an emerging trilateral cooperation among Japan, the Philippines and the United States.

Kishida visited Malaysia soon after, speaking of a “new vision of cooperation” with Prime Minister Anwar Ibrahim. Throughout his historic trip to Southeast Asia, where he launched post-war Japan’s first Official Security Assistance (OSA) initiative, Kishida never directly mentioned China. By all indications, however, he sought to mobilise regional support for a more assertive Japanese defence policy in the region with an eye on Beijing.

Tokyo’s stance is that its new strategic posture is a reflection of the country’s still-sizeable economy and new geopolitical uncertainties in the wake of Russia’s invasion of Ukraine. In many ways, Japan no longer wants to be just a capable sidekick to the US but a full and equal partner in a group of like-minded regional powers.

While many in Southeast Asia might welcome a more assertive Japan as a potential counterweight to China, the reality is that Tokyo’s security assistance package is still too modest to make a dent. Japan also risks overstretching itself by transcending its traditional role as a constructive economic power.

In addition, there are doubts as to whether either the unpopular Kishida administration or its key partners in Southeast Asia are in a position to sustain a major strategic realignment against China, which wields tremendous influence in the region.

Kishida has gradually signalled a new foreign policy direction during the past year. In his keynote address at the 2022 Shangri-La Dialogue in Singapore, he launched his “realism diplomacy”, which effectively ended the country’s development-centred foreign policy. With a reminder that Japan is the world’s third-largest economy, he underscored the necessity for his country to play a more pivotal role in shaping the international security architecture.

Accordingly, Tokyo has decided to double its defence spending as a percentage of its gross domestic product during the next five years. It wants to expand its naval capacity through production of modern frigates to project power globally and develop long-range missiles as well as next-generation military technology, most notably sixth-generation fighter jets.

While Japan has expanded security cooperation with India, Australia and North Atlantic Treaty Organization members, it has also stepped up defence aid to friendly nations in its own neighbourhood. Under its new security assistance package, Japan designated Bangladesh, Fiji, Malaysia and the Philippines as its first recipients.

“Japan will continue to contribute to the enhancement of the Philippines’ security capabilities, thereby contributing to regional peace and stability,” Kishida said before a joint session of the Philippine legislature this month. He similarly emphasised expanded maritime security cooperation during his visit to Malaysia, which like the Philippines has been at loggerheads with China over disputed features in the South China Sea.

Japan’s new strategic direction raises three major questions. To begin with, the new security assistance package is too modest to make any major impact. The total amount for the four designated nations is only 2 billion yen (US$13.4 million). A significant portion is for the Philippines, most notably the 600 million yen coastal radar system for the armed forces.

With China rapidly modernising its navy, Japan’s assistance seems like a drop in the ocean. Given the asymmetry of military power between Beijing and its rival claimants in Southeast Asia, the security assistance package will have to be expanded.

Second, a more substantial Japanese defence role in the region carries its own set of risks. For instance, there is growing possibility of a Visiting Forces Agreement-style deal between Tokyo and Manila, which would allow the Japanese military to expand its access to strategic Philippine bases.

In theory, this should enhance Philippine-Japan interoperability and Manila’s overall deterrence capabilities. However, it could also inadvertently reinforce brinkmanship between Manila and Beijing amid an already volatile situation in the South China Sea.

If anything, Tokyo also risks undermining its traditional area of strength. Historically, post-war Japan has gained tremendous soft power in Southeast Asia through its development-oriented foreign policy. A more military-oriented Japan could end up overstretching its finite resources and alienating some regional partners.

‘Clearly a concern’: Japan’s hardening China stance sparks regional unease

This brings us to the final hurdle. Many in Southeast Asia still remember Imperial Japan’s atrocities during World War II. It remains to be seen how Tokyo will address lingering concerns over a seeming lack of a full apology and reparations for surviving victims, most notably “comfort women” in places such as the Philippines.

Also consider the unpopularity of the current right-wing government in Tokyo, which has yet to overcome factional differences over the direction of the country’s foreign policy, including the controversial proposal to amend the country’s pacifist constitution.

Meanwhile, key Southeast Asian nations have made it clear they will steer clear of aligning with any major power against the other. They also want to maintain their robust economic ties with China in spite of maritime disputes in the South China Sea.

As Anwar argued in a recent public event in the US, “Malaysia, just like many other countries in Asean, remains fiercely independent. We work to serve our country and we will continue to engage everyone.” In short, Japan could have a hard time assembling an anti-China alliance in Southeast Asia, which still prefers to focus on constructive and developmental cooperation.

China’s AI aspirations will fuel economy, drive investment into the trillions of dollars: McKinsey

https://www.scmp.com/economy/china-economy/article/3243101/chinas-ai-aspirations-will-fuel-economy-drive-investment-trillions-dollars-mckinsey?utm_source=rss_feed

Chinese companies that believe the smart money is on advancing artificial intelligence are poised to invest heavily over the next decade, and the annual windfall will stretch into the trillions of dollars and become a strategic driver of economic growth, according to a major US-based management consultancy.

“Generative AI will be one of the most important research areas in the coming future, especially after ChatGPT came into being [a year ago],” said Joe Ngai, senior partner and chairman of McKinsey & Company’s offices in Greater China, adding that Chinese companies are eyeing AI as they enter new arenas with hopes of winning a competitive edge in an uncertain business environment.

“Companies in China have been growing effectively in a data environment, and we believe that AI and digitisation will be an area where Chinese companies can excel,” he said, speaking to the media on Monday.

China has been beefing up its AI sector since leadership in 2021 deemed it to be one of seven “frontier technologies” that would be pursued in the interest of technological self-reliance. Quantum information science and semiconductors were also high on the list.

The surge in popularity of ChatGPT, which was released last November, has also kick-started a new AI race.

“Generative AI could further release US$2 trillion worth of economic benefits in China [each year], on the basis of the traditional AI and advanced analytics technologies,” said Violet Chung, senior partner at McKinsey & Company in Greater China, during the same press event.

By 2030, more than half of the jobs in China will be automated, and the automation rate will rise to 90 per cent by 2050, McKinsey said in a new report.

AI advancements could have profound implications on China’s labour market, said Yi Gang, former governor of the People’s Bank of China and a professor at Peking University.

“As AI sets to replace human workers, the structural mismatch between labour supply and demand could persist in the future,” he said in an article earlier this month.

However, Beijing’s AI ambitions are facing growing headwinds as the US government looks to curb Chinese companies’ access to American cloud-computing services, which would bar mainland clients from using the power of advanced AI chips remotely.

Despite its strategic importance to drive up the economy and catalyse industrial transformation, the rapid development of AI has also raised concerns, with state media saying the risks involve intellectual property rights, privacy and fraud.

In June, China issued the world’s earliest regulations on generative AI models, as Beijing sought to control the roll-out of ChatGPT-type services.

“The impact of generative AI is mainly evident in four domains: research and development; software engineering and information technology; customer operations; in addition to marketing and sales,” McKinsey said in the report.

To counter China, India will add US$5 billion aircraft carrier to its navy fleet

https://www.scmp.com/news/asia/south-asia/article/3243142/counter-china-india-will-add-us5-billion-aircraft-carrier-its-navy-fleet?utm_source=rss_feed

India is set to add another aircraft carrier to its fleet worth almost 400 billion rupees (US$4.8 billion) as it seeks to counter China’s naval presence in the Indian Ocean region, according to people familiar with the matter.

The Defense Acquisition Council – the country’s top defence decision-making body headed by defence minister, Rajnath Singh – is expected to clear the acquisition of its second indigenous carrier on Friday, people with direct knowledge of the development said, asking not to be named because the discussions are private.

The new carrier, which can hold at least 28 fighter jets and helicopters and displaces 45,000 tons of water – a measure of size for ships, will be flying the French Rafale jets, the people said. India’s first home-made carrier, INS Vikrant, joined the fleet last year and was built by Cochin Shipyard Ltd. The country also has a Russia-made aircraft carrier.

A three-carrier battle group will be a show of strength for the Indian navy in the Indian Ocean at a time when the naval wing of the China’s People’s Liberation Army – the largest navy in the world, with 370 ships and submarines – is increasingly marking its presence in the region.

An enlarged fleet also gives India the ability to exert influence in the seas by being present at many faraway places continuously, the people said.

Representatives for the ministry of defence and Indian Navy declined to comment.

Asia has 5 of the world’s top 7 most powerful navies. Singapore ranks No 24

The Indian Ocean is already heavily militarised with as many as 125 naval vessels, including those from the US, France and Japan, roaming its waters any given time, roughly three times the number of vessels deployed in the wake of the September 11 terrorist attacks when the Washington invaded Kabul.

The waters off India haven’t seen such intense competition since World War II as both China and the US and its allies deploy more warships in the area. That’s forcing the South Asian nation to also raise its game.

India plans to have 160 warships by 2030 and 175 by 2035 at an estimated cost of 2 trillion rupees, according to people familiar. More than 60 vessels of the Indian Navy are currently at various stages of construction, they added.

The country is carrying out more warship patrols than ever before, amid growing concerns over China’s rising naval prowess.

India has also upgraded the runway facilities at the Andaman and Nicobar Islands allowing the aircraft to land at night, the people said. That’s a bid to keep a tighter watch over the narrow water straits of Malacca, Sunda and Lombok in the southern Indian Ocean.

The island chain is used by India and its partners for maritime surveillance.