• Why Chinese feminists are doing stand-up comedy in New York City | Podcasts
• Italy tells China it will terminate belt and road agreement, eliminating G7 participation
• Hong Kong hits back at ‘unfounded comments’ after ratings agency Moody’s downgrades credit outlook to negative over closer ties with mainland China
• China spy agency lashes out at ‘ill-intentioned foreign forces’ that conflate espionage with business
• China and Iran vow to work together for peace amid Israel-Gaza war
• Generative AI translation lifts overseas sales of Chinese online literature industry: report
• Chinese warships visit controversial Cambodian naval base for joint exercise
• China plans to diversify US$406 billion social security fund with ETFs, index products and more to improve returns
• Shidaowan: world’s first fourth-generation nuclear reactor begins commercial operation on China’s east coast
• China lays out contrasting vision for financial system, rejects ‘predatory’ Western outlook
• In Asean, only Philippines embraces US’ Indo-Pacific strategy that is ‘trigger’ for South China Sea tensions
• Chinese automakers splurge on huge carriers to meet overseas demand, ro-ro-rolling their cars abroad
• EU-China summit: thorny issues to dominate as tense ties reflect ‘sober realism’
• Tragic plunge death of China toddler descends into bitter legal battle as nanny counter-sues grieving parents for defamation
• Brazen man in China demands US$280 to return lost mobile phone, threatens to delete contents if owner doesn’t pay up
• Israel-Gaza war: China’s top diplomat calls for ‘major countries’ to be fair and impartial
• A ‘new era’ of Singapore-China ties? Lawrence Wong eyes stronger partnership on Beijing trip
• ‘Too vulgar’: waiter’s hip-twist intimate dance with woman customer sparks criticism of well-known hotpot chain in China
• China sees great potential and room for growth in ties with Mexico, Wang Yi tells visiting foreign minister
• Singapore must consider Asean interests in its US-China calculations: Sinologist Wang Gungwu
• Chinese EV battery giant CATL will set up research and development centre in Hong Kong, in win for government innovation hub push
• Are high-speed trains becoming Xi Jinping’s preferred way to travel in China?
• ‘This is a joke’: police in China fine ‘irresponsible’ woman for riding electric suitcase down busy Shanghai street
• China advises state firms to keep eye on finances as risk becomes economic watchword
• China’s education reforms were meant to lower costs. So why is schooling more expensive?

Why Chinese feminists are doing stand-up comedy in New York City | Podcasts

https://www.economist.com/podcasts/2023/12/05/why-chinese-feminists-are-doing-stand-up-comedy-in-new-york-city

Tickets for “Nvzizhuyi”—a monthly stand-up comedy show in New York City— often sell out in less than a minute. The show invites Chinese citizens, mostly women, to tell jokes, perform skits and recount the absurd challenges they’ve encountered as feminist activists in China—things they could never utter in public back home.

This week, Alice Su, our senior China correspondent, reports from the dark basement of a comedy club. Together with David Rennie, The Economist’s Beijing bureau chief, they ask: Why are some of China’s exiled feminists doing stand-up comedy abroad? And can their performances have any impact back home? Runtime: 34 mins

Correction (December 6th 2023): An earlier version of this episode referred to a trans person as “he” rather than “they”. We have now corrected that error.

Listen on: Apple Podcasts | Spotify

Sign up for a free trial of Economist Podcasts+. If you’re already a subscriber to The Economist, you have full access to all our shows as part of your subscription. For more information about how to access Economist Podcasts+, please visit our FAQs page or watch our video explaining how to link your account.

Podcast transcripts are available upon request at [email protected]. We are committed to improving accessibility even further and are exploring new ways to expand our podcast-transcript offering.

Italy tells China it will terminate belt and road agreement, eliminating G7 participation

https://www.scmp.com/news/china/diplomacy/article/3244120/italy-tells-china-it-will-terminate-belt-and-road-agreement-eliminating-g7-participation?utm_source=rss_feed

Italy has formally told the Chinese government that it has decided to end its membership of the Belt and Road Initiative, leaving China’s flagship infrastructure drive without any G7 members.

A diplomatic note was delivered to Beijing three days ago on behalf of Prime Minister Giorgia Meloni, explaining that Rome would not renew a memorandum of participation.

The 2019 memorandum authorising Italy’s belt-and-road participation expires in March 2024 and if Rome did not give written warning of a decision to pull out three months ahead of time, would have automatically renewed for a further five years.

First reported on by the Italian newspaper Corriere della Sera, with multiple Western news outlets subsequently reporting the news, the note also said that Italy wanted to “maintain a strategic friendship with China”.

Foreign Minister Antonio Tajani appeared to confirm the news at an event in Rome on Wednesday, Bloomberg reported. Tajani said Italy’s participation “has not produced the desired effects” and is no longer “a priority”, adding that non-participants have had “better results” than Italy.

The exit has been the subject of great speculation in recent months. Far-right leader Meloni vowed to leave the initiative when campaigning for office, describing the decision to sign up as “a mistake”, but has attempted to handle the departure delicately lest Beijing retaliate.

Italy was one of 148 countries to have signed a memorandum of understanding that it would participate in the infrastructure programme that has been one of Chinese President Xi Jinping’s signature initiatives.

4 lost years: how the EU fumbled its response to China’s belt and road

However, it was the only one from the Group of 7 economically advanced nations to sign on, and Rome’s participation has long been a bone of contention with Western allies, particularly the United States.

More than half of the EU’s members are still part of the Belt and Road Initiative: Austria, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, and Romania.

Interest has waned in recent years as EU-China ties became strained. Viktor Orban was the only sitting head of state from an EU member to attend the recent Belt and Road forum in Beijing this year, although some other members sent lower-level delegations.

News of Italy’s exit comes on the eve of a high-stakes summit in Beijing. European Council and Commission Presidents Charles Michel and Ursula von der Leyen, along with the bloc’s top diplomat Josep Borrell, will meet with Xi and Premier Li Qiang on Thursday for talks on thorny issues ranging from trade grievances to China’s relationship with Russia.

Von der Leyen, in particular, has been a staunch belt-and-road critic, and has spearheaded the launch of Global Gateway, pitched in Brussels as a European alternative. In a now-famous speech on China in March, the German used the initiative as an example of Beijing’s global ambitions.

“The Chinese Communist Party’s clear goal is a systemic change of the international order with China at its centre … we have seen it with the Belt and Road Initiative, new international banks or other China-led institutions set up to rival the current international system,” she said.

Chinese diplomats, however, have frequently floated the idea of collaborative projects between the two programmes. The EU’s official response is that Global Gateway is open to any partner who can meet standards on metrics such as transparency, human rights, and sustainability.

“I don’t see much space for cooperation between Belt and Road and Global Gateway. I don’t think that’s the intention,” said a senior EU official ahead of the summit.

“I don’t see any overlap in terms of what the largest Global Gateway is doing – partially because we have a very different mindset about these projects about transparency, about not bringing countries into a debt trap,” the official said.

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Hong Kong hits back at ‘unfounded comments’ after ratings agency Moody’s downgrades credit outlook to negative over closer ties with mainland China

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3244118/hong-kong-hits-back-unfounded-comments-after-ratings-agency-moodys-downgrades-credit-outlook?utm_source=rss_feed

International ratings agency Moody’s Investors Service has downgraded the credit outlook for Hong Kong from stable to negative, citing the city’s closer economic ties with mainland China and the erosion of its autonomy under the national security law, prompting a government rebuke of its “unfounded comments”.

In a statement on Wednesday evening, the government said it disagreed with the changes based on Hong Kong’s deepening ties with the mainland, and that the agency had made unfounded comments about the city’s autonomy decreasing.

“Contrary to what Moody’s has suggested in its assessment, the implementation of the [national security law] has put an end to the chaotic situation and serious violence, which occurred between June 2019 and early 2020,” the government said.

It said the legislation, which bans acts of secession, subversion, terrorism and collusion with foreign or external forces, had restored stability and increased confidence in Hong Kong, allowing the city to resume its normal operations and return to the path of development.

“Moody’s also made unfounded comments on the high degree of autonomy of the Hong Kong Special Administrative Region, our political and judicial institutions, the implementation of the national security law and changes to the electoral system,” it said.

Citing an International Monetary Fund report released in May, the government said that it reaffirmed once again the city’s status as a major international financial centre, adding that “the strengths of Hong Kong have withstood different tests over time, and will continue to do so in the future”.

China ‘disappointed’ at Moody’s downgrade of sovereign bonds outlook to negative

Analysts said there could be political considerations in the rating change and the downgrade might not deter investors, especially mainland businesses, from coming to Hong Kong, but it served as a sign the world had been watching the city’s developments closely.

The move on Wednesday followed a similar change by Moody’s on the outlook for Chinese sovereign bonds, also from stable to negative, on Tuesday.

The US-based agency attributed its decision to downgrade Hong Kong’s credit profile to negative – the second time since 2019 – to institutional and political changes in the city.

“Following signs of reduced autonomy of Hong Kong’s political and judiciary institutions, notably with the imposition of a national security law in 2020 and changes to Hong Kong’s electoral system, Moody’s expects further erosion of [Hong Kong’s] autonomy of political, institutional and economic decisions to continue incrementally,” the agency said.

Hong Kong leader points to economic strides as finance chief warns of deficit

The company said Hong Kong following in the mainland’s footsteps reflected its assessment of the “tight” political, institutional, economic and financial linkages between the two, which kept the ratings gap no wider than one notch.

“Weakening trend growth on the mainland will affect Hong Kong’s economy through the strong trade and investment linkages including through more slowly expanding opportunities for Hong Kong as the key regional economic and financial hub,” it said.

The agency, meanwhile, kept its Aa3 rating for Hong Kong’s long-term sovereign bonds unchanged at the fourth-highest level – high-quality investment grade and subject to very low credit risk.

It added from a longer-term perspective, despite the institutional and political changes that were likely to erode Hong Kong’s attractiveness to international companies, they were balanced by the city’s long-established and largely unchanged economic, legal, business and taxation frameworks.

Hong Kong ‘pushing for deeper ties with Middle East, China’ to bring in new capital

Moody’s said it expected Hong Kong to continue to maximise its competitive advantages as a key regional trade and financial hub, including as an economic stepping stone into the large and still thriving mainland economy.

The Ministry of Finance in Beijing also slammed Tuesday’s downgrade, calling the agency’s concerns “unnecessary”.

The agency said the drop in China’s outlook was due to “rising evidence” that the government and the public sector would provide support to financially stressed regional and local governments and state-owned enterprises, posing broad downside risks to China’s fiscal, economic and institutional strength.

The agency previously changed Hong Kong’s outlook from stable to negative in September 2019 during the anti-government protests and raised it to stable again the following year, while downgrading its credit rating one notch from Aa2 to Aa3.

Economist Simon Lee Siu-po, an honorary fellow at the Asia-Pacific Institute of Business at Chinese University, said Moody’s ratings were generous to Hong Kong given the indicators of the property and stock markets were not showing good signs and that the government was recording deficits.

“This is now a warm reminder, a signal that the world will keep monitoring. If the situation gets worse, there will be a more concrete evaluation,” he said, referring to a downgrading of the credit rating as opposed to just the outlook.

But Lee also said there were “definitely” political considerations behind the outlook downgrade, adding that the ratings were not always fair.

“In the US, there are a lot of interactions between politics and the economy. I’m not surprised,” he said. “This is how the game is played. The US election might have a role in this, too.”

Market indicators show Hong Kong still ‘brilliant’ global financial centre: John Lee

For businesses in Hong Kong, he said, the downgraded outlook would mean higher operating and financing costs as interest rates might be raised when they borrowed.

Terence Chong Tai-leung, executive director of Chinese University’s Lau Chor Tak Institute of Global Economics and Finance, said other than Hong Kong and the mainland, the pandemic had worsened the fiscal situation of governments globally.

“Despite Hong Kong’s budget deficit, we are one of the few governments with rich reserves. The grading should only consider fiscal situations,” he said.

“Downgrading us because we are getting closer to the mainland seems unreasonable. But if it’s because we are in deficit for two years straight then that makes sense.”

China spy agency lashes out at ‘ill-intentioned foreign forces’ that conflate espionage with business

https://www.scmp.com/economy/china-economy/article/3244104/china-spy-agency-lashes-out-ill-intentioned-foreign-forces-conflate-espionage-business?utm_source=rss_feed

China’s top spy agency has once again hit back at criticism of anti-espionage and state-secret laws, in an effort to assuage rising concerns among foreign investors about the nation’s increasingly opaque business environment.

The claim that the anti-espionage law worsens the business environment and has a chilling effect on foreign investment in China is “a fallacy”, while the law is designed to “further clarify the boundaries between legal and illegal, reduce uncertainties and assist businesses in operating more effectively in accordance with the law,” China’s Ministry of State Security (MSS) said on its official WeChat account on Wednesday.

“Some ill-intentioned foreign forces are fanning the flames and smearing China by accusing it of generalising national security and creating an atmosphere where normal business activities in China could be labelled ‘spy behaviour’,” the security agency said.

It explicitly called out the United States for using the Economic Espionage Act of 1996 to “suppress international competitors” and “concoct dozens of so-called Chinese economic espionage cases” – similar to allegations that Washington is making of Beijing now.

For economy to flourish, China must ‘spell out, ram home’ private sector’s role

And the MSS said any suggestions that China’s anti-espionage law has led to an acceleration in economic decoupling equate to standing the facts on their head.

The rebuttal came as the foreign business community has repeatedly raised concerns about China’s recently revised anti-espionage law, as well as a series of raids of foreign consultancy firms earlier this year. Foreign firms have also flagged a lack of transparency in regulations concerning portfolio investments, cross-border data transfers and intellectual property protection.

Foreign chambers have also voiced worries over policy ambiguity and data security, as businesses struggle to figure out where the red lines have been drawn.

The contention comes at a critical time for China as its leaders attempt to charm and reassure Western investors who are so concerned about the prospects of relying on China that they have ramped up de-risking efforts by diversifying business away from the country.

Under pressure to fend off such efforts and retain foreign firms, Beijing has released guidelines pledging more market access, speedier cross-border data flows and easier visa access, with an aim to lure foreign talent and capital. But analysts often point out that such measures will take time to yield results, and some contend that more still needs to be done.

The MSS contends that the anti-espionage law targets a very small number of espionage activities that pose a threat to national security, without focusing on regular business activities. And it said the law will have no impact on the “legitimate” investments and operations of foreign enterprises in China.

“Distorting the lawful investigation of espionage criminal activities as ‘crackdowns on foreign businesses’ is a typical case of concept manipulation and flawed logic,” the ministry statement said. “And it is clearly an intentional effort to mislead and create confusion to conflate state secrets with trade secrets and forcibly link business activities with espionage.”

According to Ministry of Commerce data, the number of newly established foreign-invested enterprises reached 41,947 in the first 10 months of this year, representing year-on-year growth of 32 per cent.

However, the actual foreign capital used in the same period totalled 987.01 billion yuan (US$136 billion) – a year-on-year decrease of 9.4 per cent.

And direct investment liabilities – a broad measure of foreign direct investment that includes foreign companies’ retained earnings in China – stood at a deficit of US$11.8 billion in the third quarter, according to the preliminary balance of payments data released by the State Administration of Foreign Exchange, marking the first quarterly deficit since 1998.

China and Iran vow to work together for peace amid Israel-Gaza war

https://www.scmp.com/news/china/diplomacy/article/3244090/china-and-iran-vow-work-together-peace-amid-israel-gaza-war?utm_source=rss_feed

Beijing and Tehran have vowed to support and coordinate with each other diplomatically amid the Israel-Gaza war.

Communist Party international department chief Liu Jianchao visited Tehran where he met several senior politicians on Tuesday.

They included Mohammad Bagher Zolghadr, secretary of the Expediency Discernment Council of Iran, an administrative assembly that plays an advisory role to the head of state, and Ghodrat Ali Heshmatian, the chairman of Iran’s House of Parties, a government-funded organisation aimed at minimising differences between the country’s registered political parties.

Israel-Gaza war: China sends ex-diplomat to Iran on ‘friendship’ mission

China said it supported Iran in playing its role to maintain regional peace and stability, while Iran pledged to step up coordination with China on international and regional affairs.

During Liu’s meeting with Heshmatian, he said Beijing would like to “strengthen communication and cooperation” with Tehran and support it to “maintain regional peace and stability, and firmly defend international justice”.

Heshmatian said Iran supported China’s position on promoting a ceasefire in the Israel-Gaza conflict, adding that Iran was willing to “strengthen cooperation with China under the United Nations framework and jointly address the challenges of the crisis”.

Zolghadr expressed his support for China during his meeting with Liu, saying Iran was “ready to work with China to end the Palestinian-Israeli conflict, to resolve the Palestinian-Israeli issue and achieve justice”.

China helped broker a deal to resume diplomatic relations between Iran and Saudi Arabia earlier this year, but it has had few official exchanges with Tehran since the Israel-Gaza war started, despite Beijing being widely seen as having leverage with Iran.

Iran is believed to be a key military and financial backer of Hamas but has denied any involvement in the group’s sudden assault on Israel on October 7, which ignited the war in Gaza.

Tehran has backed other regional enemies of Israel, such as Hezbollah, a militant group and political party in Lebanon. It is also a key ally of Syria’s Bashar al-Assad government.

Iran says it hopes to work with China to de-escalate Israel-Gaza war

Chinese Foreign Minister Wang Yi spoke to his counterpart Hossein Amir-Abdollahian on the Gaza situation in early October.

Zhai Jun, Beijing’s special envoy to the Middle East, has made several trips to the region but has yet to visit Iran.

Beijing has stepped up its engagement with Tehran at the semi-official level.

Veteran diplomat Yang Wanming, chairman of the Chinese People’s Association for Friendship with Foreign Countries, was in Tehran last week to discuss people-to-people exchanges.

This followed a trip by Wang Di, China’s head diplomat for West Asian and North African affairs, to Tehran in early November and Chinese Premier Li Qiang’s meeting with Iranian First Vice-President Mohammad Mokhber in late October.

During Liu’s meeting with Zolghadr, he said China would cooperate with Iran under the framework of the Shanghai Cooperation Organisation (SCO) and Brics, two blocs that are largely led by Beijing.

Earlier this year, Iran became the ninth member of the SCO, a security and economic grouping that includes Russia, China, India, Pakistan and four ex-Soviet Central Asian states – Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

Chinese President Xi Jinping pledged to work with Iran on multilateral alliances during his last meeting with Iranian President Ebrahim Raisi in August on the sidelines of the Brics summit in Johannesburg.

China has been a crucial trading partner and oil buyer for Iran, which has been sanctioned by the United States and European powers. China has been Iran’s biggest trading partner for the past 10 consecutive years, according to the Chinese commerce ministry.

Generative AI translation lifts overseas sales of Chinese online literature industry: report

https://www.scmp.com/tech/big-tech/article/3244110/generative-ai-translation-lifts-overseas-sales-chinese-online-literature-industry-report?utm_source=rss_feed

China’s online literature industry has enjoyed a boom in overseas sales, thanks to the rapid development of artificial intelligence (AI) technology that allows Chinese web novels to be translated quickly for foreign consumption, new research shows.

In 2022, the sector raked in 4.06 billion yuan (US$572 million) in sales from abroad, representing a nearly 40 per cent year-on-year jump, according to a report published on Tuesday by Tencent Holdings-backed China Literature.

The report – supported by the China Audio-Video and Digital Publishing Association, a trade body under the Communist Party’s Publicity Department – highlighted the role of technologies such as generative AI in enhancing efficiency and reducing costs.

These AI tools have streamlined the once labour-intensive translation process, enabling the adaptation of Chinese content into various languages for global markets, the report said.

As of last year, the Chinese industry had released more than 34 million online publications, with some being translated into over 20 different languages and marketed them in more than 40 countries and regions across Southeast Asia, North America, Europe and Africa, according to the report.

The findings were presented at the second Shanghai International Online Literature Week, which takes place from December 5 to 8. The event brings together writers, translators, scholars and representatives from 18 countries.

Since Microsoft-backed US start-up OpenAI released ChatGPT to the public a year ago, generative AI has transformed the way many businesses operate, helping users draft emails, summarise reports and write speeches.

Chinese companies from Big Tech firms to AI start-ups have since launched similar chatbots and promoted the use of their ChatGPT rivals in traditional industries.

AI has improved translation efficiency by more than 100 times and cut costs by over 90 per cent, according to China Literature, which said it had been increasing investments in the technology since earlier this year to improve its internal translation workflow.

The company said some of its biggest global web novel hits that were translated with the help of AI include Mythical Era: I Evolved Into A Stellar-Level Beast, a fantasy novel translated from Chinese to English, and The Duke’s Masked Wife, a fantasy romance translated from English to Spanish.

Not all readers were impressed, though.

“Terrible translation and poor grammar make this painful to read and ultimately not worth the headache,” a user named Kastelan commented on the page of Mythical Era.

“Good story ruined by garbage machine translation,” wrote another user named Tardtastic.

Others were more supportive.

“I won’t lie, the beginning is rough, especially the translation of names, but if you stick with it, it gets a lot better,” said a user named BadgeLeopard2A7.

WebNovel, the global online fiction platform operated by China Literature, has released more than 3,600 works translated from Chinese, according to the Shanghai-based firm. It plans to use AI to translate its works into more languages, including English, Spanish, Bahasa Indonesia, German, French, Japanese and Portuguese.

The report also found that Gen-Z, referring to those born between mid-to-late 1990s and early 2010s, made up more than 80 per cent of the readership on WebNovel, with readers coming from over 200 countries and regions.

Chinese warships visit controversial Cambodian naval base for joint exercise

https://www.scmp.com/news/china/military/article/3244083/chinese-warships-visit-controversial-cambodian-naval-base-joint-exercise?utm_source=rss_feed

Chinese naval ships have arrived for a military exercise at a Cambodian naval port where the United States has previously expressed concern about the possible involvement of the People’s Liberation Army.

It is the first time ships from a foreign navy are known to have used the new pier at Ream naval base, which Chinese companies helped build.

The ships, including the Wenshan, a Type 056A corvette, were seen moored at the base on Sunday in photos posted on Facebook by General Tea Seiha, the Cambodian deputy prime minister and defence minister.

He was accompanied by his father, General Tea Banh, a former defence minister, the Chinese ambassador Wang Wentian and military officers from both countries.

Tea Seiha wrote in a Facebook post that they had visited a “ship docked at Ream seaport to prepare for training with our Cambodian Navy captain and inspected the construction of the infrastructure, which is actively under way according to plan. The major construction will advance the navy’s capability”.

The two countries have close military and economic ties and Chinese firms – many of them state-owned – have invested heavily in transport, agriculture, mining and energy infrastructure.

Cambodia cut from US military scholarship programme due to China ties

The expansion of the Ream naval base has been one of the major infrastructure projects that attracted Chinese investment, but it has caused concern in the United States.

Washington has previously accused Cambodia of not being fully transparent about the port’s intended purpose and the role of the People’s Liberation Army.

The Cambodian government has denied that China was upgrading the base for the PLA’s use and said giving Chinese troops exclusive access to the base would violate its constitution.

However, when the US defence attaché in Cambodia was invited to visit the base, he was denied full access.

Cambodia’s close ties with Beijing have split the Association of Southeast Nations over territorial disputes in the South China Sea. Several Asean members have rival claims to China’s in the resource-rich waters, but Cambodia is not directly involved.

Imagery from a satellite operated by the European Space Agency showed that two ships of the same length were moored side by side at Ream as early as Monday. Their positions matched two Chinese ships in the photos posted by the Cambodian minister.

The Chinese and Cambodian defence ministries have not responded to multiple requests for comment.

Construction at the Ream base progressed rapidly this year, and the pier where the Chinese ships are docked was completed in less than 12 months.

On Saturday in Phnom Penh, Tea Seiha discussed military relations and international affairs with China’s General He Weidong, the second-ranking vice-chairman on the Central Military Commission, China’s top command body.

US sanctions Cambodian officials over alleged corruption at Ream Naval Base

The general met Cambodian Prime Minister Hun Manet and his father and long-serving predecessor Hun Sen on Monday, when he described the relationship as an “ironclad friendship”.

In China, foreign visits are normally undertaken by the defence minister. But Li Shangfu’s unexplained dismissal in October has left the post empty. Since then, He and General Zhang Youxia, the other CMC vice-chairman, have become the faces of China’s military diplomacy.

The vice-chairmen rank directly under President Xi Jinping and higher than any defence minister. Unlike in other countries, the minister has no decision-making powers and only carries out those made by Xi, who chairs the commission.

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China plans to diversify US$406 billion social security fund with ETFs, index products and more to improve returns

https://www.scmp.com/business/china-business/article/3244091/china-plans-diversify-us406-billion-social-security-fund-etfs-index-products-and-more-improve?utm_source=rss_feed

China has proposed broadening the investment scope of the nation’s 2.88 trillion yuan (US$406 billion) social security fund to include exchange-traded funds (ETFs), index funds and other financial products, in a move seen as helping diversify and improve its returns.

Other options include direct investments into bank loans, negotiable certificates of deposit, industry funds, and equity funds, according to a draft published by the finance ministry on Wednesday. The fund is seeking public feedback on the proposals until January 5.

The move also aims to lower management fees to “maintain and increase” the fund’s value, according to the draft.

“Regulators are again extending official influence over private markets with this latest proposal” by directing support for bank capital and retirement funds to boost markets, said Brock Silvers, managing director at Kaiyuan Capital in Hong Kong. “This may help to stabilise markets in the near term but does little to encourage foreign investment.”

China introduced the social security fund in 2000 to support the nation’s welfare system, including pensions and public medical insurance coverage, to help the population cope with retirement shortfall.

The social security fund directly managed one-third of its assets and farmed out the rest to outside managers, based on the end-2022 statistics. The fund allocated 90 per cent of its assets to domestic investments and 10 per cent in overseas markets.

It lost 5.1 per cent, or 138 billion yuan, last year amid a stock market slump, according to its annual report. It was the third annual loss in its history, after similar setbacks in 2008 during the global financial crisis and 2018 during the US-China trade war.

Still, it has generated a 7.66 per cent average annual gain since its inception, the annual report showed, more than twice the 3.6 per cent annualised returns of the Shanghai Composite Index over the same period, according to Bloomberg data.

In the latest draft, the state-run fund has also proposed to cap annual management fees for stock, bond, money-market, and equity-fund investments at 0.8 per cent, 0.3 per cent, 0.1 per cent, and 1.5 per cent, respectively, of the total assets under custody.

The social security fund has been seen as part of the “national team”, a term coined by local investors to refer to state buyers of stocks.

At a meeting with 23 asset-management funds in October, Liu Wei, head of the National Council for Social Security Fund, urged its managers and entrusted fund managers to retain confidence in China’s economy and capital markets, saying the nation’s economic growth remained intact.

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Shidaowan: world’s first fourth-generation nuclear reactor begins commercial operation on China’s east coast

https://www.scmp.com/news/china/science/article/3244102/shidaowan-worlds-first-4th-generation-nuclear-reactor-begins-commercial-operation-chinas-east-coast?utm_source=rss_feed

China’s Shidaowan nuclear power plant, the world’s first fourth-generation reactor, has begun commercial operations, one of the companies behind its development said.

The high temperature gas-cooled reactor (HTGR) went online following a week-long (168 hours) continuous operation test, state-owned China National Nuclear Corporation (CNNC) said in announcing the feat on Wednesday.

Fourth-generation nuclear reactors are designed to be successors for the existing, often water-cooled, nuclear reactors in operation around the world.

The reactor at the Shidaowan plant in China’s eastern Shandong province is part of a global push for safer, more sustainable and efficient nuclear operations.

Instead of using water to cool the system, the high-temperature reactor will be cooled using helium gas, offering a promising way to develop more inland nuclear plants, as they will not need to be located next to a water source.

High-temperature reactors can produce heat, power, and hydrogen, and would help China and the world “become carbon neutral”, said Zhang Zuoyi, dean of the Tsinghua University Institute of Nuclear and New Energy Technology and chief designer of the Shidaowan reactor project.

CNNC, Tsinghua and state-owned China Huaneng Group are the joint developers and operators of the plant.

China fires up high-temperature nuclear reactor in zero-carbon push

The facility, which began construction in 2012, features two 250 megawatt thermal reactors and a steam generator with an installed capacity of 200 megawatts, according to CNNC. Up to 93.4 per cent of the material used in the Shidaowan HTGR was domestically sourced, the company said.

A feature of the reactor’s design is “inherent safety”, as in the event of a sudden reactor failure or external disturbance, “the core will not melt,” a Tsinghua press release said.

Fourth-generation reactors aim to limit the environmental impact, nuclear waste burden, risk of nuclear meltdown, and opportunities for nuclear proliferation, according to the Gen IV International Forum (GIF), an international cooperative framework of major nuclear nations.

The GIF, initiated by the US Department of Energy in 2000, represents 13 nuclear nations – including China, France, Japan and Russia – along with the European Union.

Fourth-generation reactors are intended to operate at higher temperatures than most of the reactors around the world today, which allows them to generate both electricity and hydrogen, according to the GIF.

The GIF has identified six types of nuclear technology that represent the fourth-generation, and most countries in the framework are committed to producing at least one.

Apart from gas reactors like the Shidaowan HTGR, which use helium to cool, there are also lead, molten-salt or sodium-cooled fast reactors, capable of turning nuclear waste into fuel, and supercritical water-cooled reactors – which directly use water to drive a turbine instead of steam for electricity generation.

Reactors like Shidaowan will be able to produce hydrogen alongside electricity for the grid.

Hydrogen produced by the reactors can be used as fuel, as well as in a variety of industrial applications.

Most hydrogen produced in the world today is made from carbon-based materials and therefore creates carbon dioxide emissions, according to the World Nuclear Association.

However, high temperature reactors can use thermochemical processes to produce zero-carbon hydrogen using water.

While Shidaowan is the world’s first HTGR to enter commercial operation, other Chinese fourth-generation plants may soon be on their way.

In southeast China’s Fujian province, the CNNC-managed Xiapu sodium-cooled fast reactor pilot project is also under construction, and is expected to be connected to the grid by 2025.

Unlike the HTGRs, sodium-cooled fast reactors are able to recycle depleted uranium, allowing the fuel to be reused again.

There are other sodium-cooled reactors in operation in the world, but they are third-generation.

Other fourth-generation nuclear reactor projects are undergoing research and design in the United States, Japan, and Canada, but have yet to begin construction, according to the International Energy Agency.

China has been increasing its nuclear capacity at the highest rate globally. However, as of this year, nuclear power still made up only 5 per cent of China’s energy generation as the country continues to rely on coal, according to the World Nuclear Association.

China gives nod to ancient myth amid launch of nuclear fusion research centre

Lu Hua Quan, chairman of the Nuclear Research Institute at Huaneng, told the association last year that HTGRs had “great potential to help the world decarbonise hard-to-abate sectors”.

However, safeguards and waste management, as well as regulatory frameworks, still need to be addressed if the technology is to be broadly deployed.

Lu said HTGRs could be very helpful in countries where freshwater was limited, as it did not require large amounts of it in order to cool the reactors.

And for nations where large capacity nuclear plants do not fit into local power grids, the ability to create small modular reactions can be built with smaller capacities that suit the needs of the power grid, he said.

China lays out contrasting vision for financial system, rejects ‘predatory’ Western outlook

https://www.scmp.com/economy/china-economy/article/3244071/china-lays-out-contrasting-vision-financial-system-rejects-predatory-western-outlook?utm_source=rss_feed

After years spent emulating some Western practices in the construction of its financial system, China has begun to turn its back on an ideology recent articles have deemed an unacceptable source of risk and inequality – a change in perspective likely to have been a factor in this year’s regulatory overhaul.

The choice by official publications to highlight ideological cleavages and domestic policy goals indicate a different development path is planned for China’s finance industry compared to the United States or Europe.

In an article published Friday in the Communist Party’s theoretical journal Qiushi, the newly formed Central Financial Commission declared China has “fully learned the lessons of Western financial development” and has answered “many major theoretical and practical issues that Western financial theory has never been able to solve”.

The commission also had strong words for the consequences it found that theory has wrought. “Under the capitalist ideology and social system, finance capital reveals its monopolistic, predatory and vulnerable nature,” it said. “It not only creates a huge gap between rich and poor, but also triggers recurring economic and financial crises.”

To control those perceived risks, enhancing the party’s leadership was top of the agenda at the twice-a-decade central financial work conference, held at the end of October.

“It is to be understood that the operations of Chinese financial institutions, under the guidance of the [Communist Party], are driven by a different imperative compared to their Western counterparts,” said Wang Zichen and Jia Yuxuan, researchers with the Beijing-based Centre for China and Globalisation think tank.

In the Western context, profitability, maximising returns for shareholders and adhering to regulatory requirements is the primary objective of financial institutions, they said in a note last month. In contrast, they added, Chinese institutions hold as their prime directive the faithful execution of tasks assigned by the party.

Observers have noted President Xi Jinping has also taken a direct interest in finance, with a rare personal visit to the country’s central bank in late October and a trip to Shanghai’s futures exchange as part of an inspection tour of the city last week.

The added value of China’s financial industry accounted for 8 per cent of the national gross domestic product last year, higher than the 4.9 per cent average for Organisation for Economic Cooperation and Development member countries and approaching the level of the US and the United Kingdom, according to minutes distributed by the National People’s Congress.

Some of the country’s state-owned banks, such as the Industrial and Commercial Bank of China, have entered the world’s top 10 in terms of revenue. Five are included in the list of global systemically important banks as designated by the Bank for International Settlements.

When discussing financial problems in late October, lawmakers said the domestic industry’s competitiveness needs to improve and its support for the real economy – those sectors which produce or trade in goods and services – is inadequate, particularly when it comes to private firms.

What medicine does China’s economy need as property hangover haunts outlook?

In the Qiushi article, the top party finance organ made clear that domestic financial institutions must maintain a correct perspective on business, performance and risk.

“We must strike a fine balance between functionality and profitability,” it said, “but bear in mind that functionality always comes first.”

Financial inclusiveness, or letting the people share in the fruits of China’s finance, is a distinctive characteristic of the country’s system compared to those in the West, it added.

With security remaining a major area of focus given lingering tensions with Washington, Beijing’s state-backed garrison of financial players should better serve the real economy, buttress “weak links” and support strategic projects such as the Belt and Road Initiative and yuan internationalisation, the commission said.

In a Monday article from People’s Daily, the party’s official newspaper, central bank governor Pan Gongsheng said the party’s centralised and unified leadership over financial affairs is essential to solving institutional problems in finance.

Pan admitted neither the quality nor efficiency of financial services provided to the real economy are high, adding some enterprises manage a large share of financial resources inefficiently.

“Financial chaos and corruption persist, financial supervision and governance capabilities are weak, and there are still many hidden economic and financial risks,” he said.

“We must continuously enhance the party’s leadership of finance, so that such political and institutional advantages can be effectively transformed into a boost to financial governance.”

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In Asean, only Philippines embraces US’ Indo-Pacific strategy that is ‘trigger’ for South China Sea tensions

https://www.scmp.com/week-asia/politics/article/3244100/asean-only-philippines-embraces-us-indo-pacific-strategy-trigger-south-china-sea-tensions?utm_source=rss_feed

The Philippines is the odd one out in Asean in its total, welcoming embrace of the United States’ Indo-Pacific strategy, while other member states have viewed Washington with caution and concern, according to speakers at a conference in Manila on South China Sea maritime security.

“The Indo-Pacific concept [by the US] is a trigger for South China Sea tensions,” Dr Supartono, director of Hang Tuah University in Surabaya, Indonesia, told the Maritime Security Conference in Metro Manila, held on November 22 by Singapore’s Asia Collective and the Manila-based International Development and Security Cooperation founded by security analyst Chester Cabalza.

The retired rear admiral of Indonesia’s navy said while “the United States is a friend of Indonesia”, its Indo-Pacific policy had brought “increased activity and presence” of military exercises from the US, India, Germany and even Russia, involving port visits and warship transits in the South and East China seas.

South China Sea skirmishes loom over Asean defence ministers’ meeting

According to him, this has stirred up a “South China Sea conflict vortex”, where China has exhibited high confidence or assertiveness, buoyed by Washington’s view that Beijing had become its “strategic competitor” and threatens its dominant position globally and regionally.

Supartono stressed that unlike other claimant states in the South China Sea such as China, the Philippines, Malaysia, Vietnam, Taiwan and Brunei, non-claimant Indonesia was mainly concerned with preventing an open war and maintaining peace. However, Jakarta did not recognise Beijing’s nine-dash line that claims almost all the South China Sea, he warned.

Supartono pointed out that other Asean non-claimant states such as Laos, Cambodia and Myanmar were all “dependent on China and [therefore] have no interest in the issue”.

Meanwhile, despite being a claimant state, “Malaysia has been slow to get on board” with US strategy and has instead opted for “a more neutral stand”, according to Mohd Hazmi Rusli, an associate professor at the Faculty of Syariah and Law at the Universiti Sains Islam Malaysia, and a former Australian National University research fellow.

Hazmi emphasised at the conference that Malaysia “does not acknowledge the nine-dash line” and “we do not see China as our immediate neighbour”.

“But other than that, we are very good [friends] with China … just like [with] the United States. We are friendly with everyone except North Korea.”

What’s China’s ‘nine-dash line’ and why has it created so much tension in the South China Sea?

As for Vietnam, RAND Corporation’s senior defence analyst Derek Grossman noted that the country “has been coy” in voicing its support for the Indo-Pacific strategy, “but it is clear in Hanoi’s actions that it sees benefits to strengthening ties with Washington”.

This was evidenced by US President Joe Biden’s visit to Vietnam in September, he said, to elevate relations to a “Comprehensive Strategic Partnership” despite Vietnam’s “Four Nos defence policy” that excluded the forging of military alliances and siding with one country against another.

The highlight of the conference was the lively exchange between Grossman and Dr Yan Yan, director of the Research Centre for Oceans Law in Xiamen University, and policy director of the National Institute for South China Sea Studies in Hainan.

Yan began by saying, “if you look at maritime cooperation, China and the US did cooperate very well in the past”. She gave as examples the cooperation between the two nation’s coastguards in combating illegal and unregulated fishing in the North Pacific in 1994, as well as the rules of conduct both parties agreed on during a close encounter of their ships and aeroplanes.

While acknowledging any form of dialogue was healthy, Grossman said: “But the reality is, US-China relations are coming out of a low, low point before the Apec summit. The disagreements are vast and they really centre on the status of Taiwan, but as we talk about here today, the South China Sea is another area.

“And I can’t see frankly anything coming out of the Biden-Xi summit that gave me hope that that particular issue could be addressed.”

He argued: “Let’s not also kid ourselves. There has been a direct phone line from the Pentagon to the Chinese Ministry of Defence for many years now … The infrastructure is there. But the problem is, when there’s an incident, and the US tries to call to sort it out, nobody picks up the phone.”

Grossman added: “China is still using fishing militia to set [up] a de facto operating presence throughout the disputed region. That is something China still says doesn’t exist. There is no fishing militia. But we have said on many occasions, notably in our latest China Military Report to Congress – it came out in October – that it is a part of the PLA (People’s Liberation Army).”

He described the militia as fishermen first and foremost who are given surveillance equipment and sometimes activated to conduct activities “to support the coastguard and Navy”.

Yan, however, pointed out that Vietnamese fishermen had been involved, too, in incidents with Malaysia and Indonesia. “It’s just that people don’t care about what other countries are doing like China, so Chinese activities in the South China Sea have been enlarged so much.”

She said when Chinese coastguards used water cannons they were still not targeting Philippine ships but directing the spray 10 metres away.

Yan also criticised US commitment to the Philippines under the Mutual Defence Treaty. She recalled that Articles 24 and 25 of the treaty only applied to mainland Philippines, “but it does not say specifically whether … Second Thomas Shoal [where the Philippine navy had beached a vessel to serve as an outpost] is within the scope of the MDT”.

“The US so far has not given any specific promise to the Philippines,” Yan said. “My question actually is whether the US wants China to trigger the MDT.

“Do you really want to go to war with China for helping the Philippines in Second Thomas Shoal or the Scarborough Shoal?” Yan challenged Grossman, who said it was “outrageous” to think the US was intentionally trying to trigger the MDT, “as if we don’t have enough going on in the world”.

“We’re supporting Ukraine resistance on Russia, we’re supporting Israel in their military campaign against Hamas, and possibly against Hezbollah. We have a lot of other things going on that I don’t think we want to add fighting over Second Thomas Shoal as one of them,” he added.

“But I do think, Dr Yan, you are right that the Mutual Defense Treaty is pretty clear about mainland Philippines … maintaining the territorial integrity and sovereignty of mainland Philippines. US policy has never taken a decision on the disputed territorial features within the region.”

However, he recalled, in 2020 then-secretary of state Mike Pompeo said the US recognised EEZs “which was roundly applauded by everybody in the region except China”.

Indonesia’s South China Sea remarks show a ‘level up’ of support for claimants

Grossman was referring to America’s top diplomat saying China “cannot lawfully assert a maritime claim – including any exclusive economic zone (EEZ) claims derived from Scarborough Reef and the Spratly Islands – vis-à-vis the Philippines in areas that the Tribunal found to be in the Philippines’ EEZ or on its continental shelf”.

According to a CNN report, Pompeo had also rejected China’s claims to Mischief Reef and Second Thomas Shoal – “both of which fall fully under the Philippines’ sovereign rights and jurisdiction”. China also “has no lawful territorial or maritime claim to (or derived from) James Shoal, an entirely submerged feature only 50 nautical miles from Malaysia and some 1,000 nautical miles from China’s coast” and the US “rejects any PRC maritime claim in the waters surrounding Vanguard Bank (off Vietnam), Luconia Shoals (off Malaysia), waters in Brunei’s EEZ, and Natuna Besar (off Indonesia).”

Dr Yan sounded a reminder to conference participants: “One thing we need to remember is that we will be neighbours for the next thousands of years. So most urgently for us to do now is to establish a crisis management and incident prevention regime or mechanism bilaterally or multilaterally.

“I don’t want to see any armed conflict in the region. So now let’s guarantee peace and stability in the region.”

Chinese automakers splurge on huge carriers to meet overseas demand, ro-ro-rolling their cars abroad

https://www.scmp.com/economy/china-economy/article/3244069/chinese-automakers-splurge-huge-carriers-meet-overseas-demand-ro-ro-rolling-their-cars-abroad?utm_source=rss_feed

China has christened and launched its largest ship for transporting cars around the world – a massive carrier expected to help Chinese automakers keep pace with a pedal-to-the-metal rise in the country’s new export machine: the auto sector.

The Jiuyang Blossom, made in Croatia and purchased from a Norwegian company for US$63 million, departed from Shanghai on Monday. The so-called ro-ro ship, short for “roll-on/roll-off”, carries wheeled cargo that can easily be rolled on and off the vessel.

It’s a 55,775-tonne pure car carrier, with 13 decks totalling 60,000 square metres (645,834 square feet), and is the largest ro-ro ship ever operated by a Chinese company. The vessel is designed to haul more than 7,000 vehicles to far-flung destinations, according to a press release by Beijing-based Changjiu Logistics, the ship’s new operator.

“This car carrier represents our confidence that global vehicle logistics are increasingly geared towards China … The question is how to tap the buoyant demand,” said Bo Shijiu, president of Changjiu Logistics.

‘The economy stagnated in November’: 4 takeaways from China’s activity data

China’s vehicle exports have skyrocketed, edging past Japan and Germany within just two years, which is about how long it typically takes to design and construct a modern ro-ro ship.

China exported 3.92 million vehicles in the first 10 months of this year, a year-on-year rise of 59.7 per cent, according to figures from the China Association of Automobile Manufacturers. And market research firm Canalys expects the annual total to cross the 5-million mark.

EVs now account for about 40 per cent of all outbound deliveries, as China leads the charge in the electrification of the global auto sector.

But despite being the world’s largest shipbuilder by deliveries, China is struggling to keep up with demand.

The first home-grown ro-ro ship of comparable carrying capacity will not be put to sea until after 2024, and additional capacity will only slowly be added in 2025, China News Service reported.

“Japanese and Korean operators serving their compatriot carmakers are still at the helm of existing global shipping capacity, with a combined share of 70 per cent in 2022,” Citic Securities analyst Hu Shimin said in a recent note.

“New capacity that is in the pipeline – mostly from China in 2024 and beyond – may still fall short of the capacity expected to be lost to obsolescence and the decommissioning of old vessels across the globe,” added Hu, who specialises in the transport industry.

As a result, the scramble for available vessels has pitted Chinese auto exporters against each other in a price war, pushing the daily rental costs of ro-ro ships to US$110,000 in September, almost double the moving average from a year prior, according to global maritime consultancy Clarksons.

China’s Hozon kicks off operations at its first overseas factory, in Thailand

Some Chinese automakers have also sought alternative means, such as retrofitting or repurposing container ships, despite the impact on loading efficiency compared with ro-ro ships that are specially designed for loading cars.

Chinese auto giants are also splashing out cash for ships of their own.

In October 2022, BYD, the world’s largest EV maker, struck deals worth 5 billion yuan (US$700 million) with a shipbuilder in the eastern province of Shandong for six car carriers that will each hold 7,700 cars.

The Chinese EV king’s first ship, the Explorer 1, wrapped up a week-long series of trial cruises in waters off the provincial coast last month, when work also started on BYD’s first LNG-powered ro-ro ship at a China State Shipbuilding Corp’s (CSSC) shipyard in Guangzhou, Guangdong province.

SAIC Motor, which exported more than a million vehicles in 2022, also has controlling stakes in two maritime firms with a fleet of 22 ships. In August, it announced a partnership with the CSSC’s Jiangnan Shipyard to co-design, build and operate bespoke ro-ro ships capable of carrying 9,000 cars, by 2026.

EU-China summit: thorny issues to dominate as tense ties reflect ‘sober realism’

https://www.scmp.com/news/china/article/3243989/eu-china-summit-thorny-issues-dominate-tense-ties-reflect-sober-realism?utm_source=rss_feed

When EU and Chinese leaders last met for an in-person summit in April 2019, they signed a joint statement running to nearly 3,000 words.

Filled with pledges that would be hard to imagine today, the document now reads like a relic from another era.

The sides vowed to cooperate on steel overcapacity and on 5G, “the basic backbone for future economic and social development”. In the South China Sea, they urged restraint “from actions likely to increase tensions”, and threw their joint weight behind the “full implementation of the Minsk agreements” on Ukraine.

Even on arguably the longest-standing bilateral grievance, both agreed that “all human rights are universal, indivisible, interdependent”.

The statement was signed just weeks after the EU first designated China a “systemic rival”, giving Brussels leverage in negotiations, according to people involved in the talks. But four years on, it provides a perfect illustration of how far ties have slipped.

Sources say Germany, the bloc’s biggest member, is on the verge of following 10 others in kicking Chinese companies like Huawei out of its 5G network. And on human rights, the EU sanctioned Chinese officials for alleged abuses in the Xinjiang Uygur autonomous region in 2021, helping scupper an investment pact the pair were prioritising in 2019.

Moscow’s 2014 annexation of Crimea has evolved into the bloodiest armed conflict on the European continent since the second world war, with China’s close ties to Russia hugely denting its standing in Europe.

The coronavirus pandemic, meanwhile, has helped fuel a de-risking movement that aims to reduce Europe’s dependencies on China for critical imports.

Even Taiwan – an issue previously only whispered in closed-door meetings in Europe and not mentioned by name in the 2019 statement – is now discussed at the bloc’s top-level summits, amid fears China may alter the status quo by force.

EU set to ask Xi to stop Chinese firms getting around sanctions on Russia

So when leaders sit down for a day of talks in Beijing on Thursday, there will be no joint statement. Indeed, recognising it would be impossible to negotiate, neither side bothered to propose one.

“The times of intense negotiations over days and nights for joint statements seem to be over,” said Gunnar Wiegand, until recently the top EU official for the Asia-Pacific and now at the German Marshall Fund. “These things happen in international relations. It shows our relationship is in a period of sober realism.”

This is despite intense engagement before the summit. Eight EU commissioners visited China in recent months, teeing up narrow technical deals, some of which are bearing fruit.

An EU-China working group on export controls met for the first time on October 26, for instance, while similar formats on market access for European firms in China’s wine and spirits and cosmetics sectors will convene before the end of the year.

But EU leaders Ursula von der Leyen and Charles Michel declined the opportunity to sign other oven-ready agreements proposed by Beijing, preferring instead to use valuable face time with President Xi Jinping and Premier Li Qiang to push them on the prickliest geopolitical and commercial issues of the day.

“In a system which is centralised very much on one individual, if you’re not having a discussion with that individual, and you’re not spending time and you’re not passing your messages, how on earth do you expect to have any influence?” asked one senior EU official involved in the planning.

A second said China needed to “offer us more on the political front before we give them their photo opportunity” with deal signings that they worried would gather dust in a Beijing drawer.

Instead, over lunch with Xi and then dinner with Li, they will again urge them to exert influence over Russian leader Vladimir Putin to end his nearly two-year war on Ukraine and to go back to engaging with Kyiv-backed multilateral peace talks.

While China has not condemned the invasion and Xi has maintained a close relationship with Putin, Brussels believes its constant warnings that systemically arming Russia would irreparably damage EU-China ties have hit home.

“China has been very cautiously operating,” said a third senior EU source. “If there was support, it was in a way that was very, very difficult to see and not publicly advertised. An unlimited partnership would allow for direct military support, which we have not seen.”

China wants to deepen ‘everlasting’ good ties with Russia: Xi Jinping

Still, the leaders will personally press Xi over 13 Chinese firms that they accuse of circumventing EU sanctions on Russia, allowing its military to access goods that have been placed under the bloc’s embargo.

A failure to do so could result in those firms being added to a blacklist, a move that would cause more reputational damage to China than commercial harm.

“There’s no doubt in my mind, if they want that they can handle it, they can fix the problems that we see,” the source said.

Some experts consider the plan risky.

“I am not sure on the political calculation,” said Abigaël Vasselier of the Mercator Institute for China Studies and until recently the deputy head of the China desk in the EU’s diplomatic service.

“By raising it at this level, EU leaders will invest their political capital on it,” Vasselier added. “If the Chinese leadership strongly pushes back, which is highly likely, you know that this is going to become the next irritant in the relationship. Is this level the most appropriate?”

Further ultimatums will be delivered on trade, with many in Europe growing weary over Beijing’s unfulfilled promises to open up its giant market to the bloc’s firms.

For months, the European Commission has been ready to launch an investigation into China’s medical devices sector in what would be an early use of its new international procurement instrument.

Beijing has promised to issue guidelines granting EU firms making these devices in China access to its procurement market by the end of the year.

But if nothing positive comes from the summit, the trigger could be pulled, sources said, eventually excluding Chinese firms from procurement processes in Europe.

EU-China summit: the trust deficit threatening trade and diplomacy

The bilateral trade deficit, meanwhile, has doubled in the space of two years. On this, the EU largely blames China’s domestic policies of restricted market access and overcapacity stemming from illegal subsidies.

With India, Japan and the United States broadly closing their markets to Chinese products because of these practices, Europe is one of the few remaining destinations.

Brussels is already investigating subsidies in China’s electric vehicle sector, and it will lobby Xi to rein in the practice in other key “sunrise sectors” such as wind turbines, heat pumps and solar panels.

The EU will also ask him to control the level of bank credit being extended to manufacturers in these sectors and suggest they reduce production targets in saturated sectors.

“There are different ways to address overcapacity and I think the most powerful way is for the Chinese to address overcapacities themselves,” said one of the sources. “There are always trade defence instruments to protect your market, but the smartest way is for China to act against it now.”

Perhaps looking at the spartan agenda, Beijing has embarked on a mini-charm offensive ahead of the summit.

EU sources have described the preparations as constructive, and while the Chinese government declined to add Taiwan or human rights to the official agenda, sources said it had acquiesced to the issues being discussed under other agenda items.

Last month, Beijing announced visa-free access for travellers from five major EU members: France, Germany, Italy, the Netherlands and Spain.

Also of note, Lithuania said illegal trade measures against its exporters following a spat over Taiwan had largely been lifted.

But these overtures will not change the overall dynamic. A senior EU official said the visa gesture had not been made “in a fair way, because it’s only a few member states” rather than 27.

EU targets Chinese plastics under drive to counter ‘unfair’ trade practice

A few weeks ago, industry figures visiting China were given a heads-up on the visa news by Chinese interlocutors and were surprised when it was announced so quickly.

“It shows they can move quickly when they want to,” said a business leader, who described the news as welcome but doing little to address the many issues facing European businesses in China.

The sense of control in the country was strangling international businesses, they said, using the example of one firm that was offered a 5-square-metre corporate booth at a trade expo only to be told that a space of that size would require five security cameras.

In conversations with Chinese ministries, business figures noted official translators were editing their responses in real time, omitting words such as “war” when they discussed Ukraine.

The anecdotes left the impression that China had changed drastically since 2019.

“We thought we would get a diversity of voices among think tanks and non-government bodies,” said a second businessperson. “But nothing, the message was the same wherever you went. Everyone is singing from the same sheet.”

EU values-based policy will create a ‘lot of rivals’, Chinese envoy warns

Officials in Europe, meanwhile, have been frustrated by Chinese diplomats’ efforts at events to gloss over the irritants in the relationship.

Europeans’ complaints are often dismissed, with China blaming the US for poisoning the well, and insisting that Beijing and Brussels are partners, rather than rivals.

The dynamic moved the EU’s top diplomat to dismiss last April’s summit as a “dialogue of the deaf”.

“China wanted to set aside our differences on Ukraine. They didn’t want to talk about Ukraine,” Josep Borrell told the European Parliament days later.

Officials have since “worked hard to try to explain that our issues with China are stemming from its own coercive behaviour, its overcapacity, its overreactions”, said a senior official who recently visited Beijing.

“But the responses to me and my colleagues is usually the same,” the official added. “It’s America, stupid.”

Tragic plunge death of China toddler descends into bitter legal battle as nanny counter-sues grieving parents for defamation

https://www.scmp.com/news/people-culture/trending-china/article/3243555/tragic-plunge-death-china-toddler-descends-bitter-legal-battle-nanny-counter-sues-grieving-parents?utm_source=rss_feed

Relatives of a nanny in China whose negligence led to the death of a toddler have filed a defamation lawsuit against the grieving family of the dead child.

The move is the latest twist in a bitter feud between two families involved in the tragic death of a two-year-old girl who plunged from the 23rd floor of a residential building three years ago.

In 2020, the nanny, surnamed Liang, was employed by a woman called Xie to look after her daughter, Mili, in the eastern province of Zhejiang,

The tragedy unfolded on December 15 the same year when Xie was at work and Liang took Mili to visit her own daughter, Zuo, who lived in a flat on the 23rd floor of a residential building.

Liang left Mili in a room and the child somehow managed to fall out of a window.

Grieving mother Xie said she has been left upset by the fact that instead of apologising for the death of her daughter, the Liang family has decided to sue her for defamation.

The legal suit alleges that the family of the dead girl spread private information about Liang which was designed to smear her name, according to a report by Star Video.

Earlier, Xie had signed an understanding agreement with Liang instead of suing her.

That agreement broke down and in May 2022, a local court handed Liang a one-year prison term plus two years probation. This was followed by an order to pay compensation to Xie.

However, Xie wanted Liang to take full responsibility for what had happened to her daughter and launched an appeal against the verdict of the local court.

It was at this point Xie received a summons to appear in court on November 29 to face the defamation claims.

“Mili has been gone for three years. I have yet to receive an apology, but all I get is a lawsuit against me,” Xie told Star Video.

The dispute has outraged many people on mainland social media.

One online observer said: “The nanny’s family is shameless.”

“The nanny should bear legal liability,” said another.

Stories about careless babysitters are not uncommon in China.

At the beginning of this year, a 21-month-old child in eastern China plunged eight floors to her death due to the actions of a negligent nanny.

In June last year, a two-year-old girl in eastern China fell to her death from the eighth floor of a residential building after she was left in a lift by her nanny.

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Brazen man in China demands US$280 to return lost mobile phone, threatens to delete contents if owner doesn’t pay up

https://www.scmp.com/news/people-culture/trending-china/article/3244065/brazen-man-china-demands-us280-return-lost-mobile-phone-threatens-delete-contents-if-owner-doesnt?utm_source=rss_feed

A “shameless” man in China who refused to return a mobile phone he picked up before threatening the owner with resetting it unless she paid him 2,000 yuan (US$280), has shocked mainland social media.

A university student surnamed Zhang lost the iPhone 13 she bought for 6,000 yuan less than a year ago in a buffet restaurant in eastern China’s Anhui province on November 19.

She called the police and was thrilled to learn that they tracked down a man in his 30s, who was filmed by a surveillance camera covering the phone with a plate as he picked it up.

However, when she contacted the man, she was shocked when he demanded 2,000 yuan for the phone’s return.

The man, surnamed Geng, threatened to reset her phone and remove all the data if she refused to pay.

Zhang said, as a student, she did not have much money and the man reduced his demand to 1,500 yuan, 500 of which he said should be paid by the restaurant as a finder’s fee.

Zhang told the mainland media outlet Jimu News the phone was important to her as it contained valuable data including photos of her deceased family members.

She agreed to Geng’s request, and gave him a 500-yuan deposit, which she scraped together from her 1,000-yuan monthly living expenses.

Zhang promised to pay him the remaining 500 yuan after she received the phone by post.

But Geng insisted she pay the full amount as he had scheduled a courier service, and later returned her deposit and blacklisted her on WeChat.

A member of staff from the restaurant told Jimu News that Geng had called them demanding a reward, but they turned him down.

Zhang said the police told her they could not force Geng to return the phone and suggested she sue him.

The authorities said the man would be breaking the law by keeping the personal belongings of another person and might even be guilty of embezzlement if the property was valuable.

Geng’s behaviour shocked mainland social media as in Chinese culture the returning of lost property is deemed a traditional virtue.

“This is blackmail. The woman should sue him and put him in jail,” said one person on Douyin.

“What a greedy and shameless person. He was stealing the phone not picking it up,” said another.

Israel-Gaza war: China’s top diplomat calls for ‘major countries’ to be fair and impartial

https://www.scmp.com/news/china/diplomacy/article/3244062/israel-gaza-war-chinas-top-diplomat-calls-major-countries-be-fair-and-impartial?utm_source=rss_feed

Chinese Foreign Minister Wang Yi on Wednesday called for “major countries” to be fair and impartial in their efforts to cool the situation in the Middle East, as Israel expanded its military campaign in the Gaza Strip.

In a telephone call with US Secretary of State Antony Blinken, Wang renewed calls for a two-state solution, saying any arrangement concerning the future of Palestine “must reflect the will of the Palestinian people”.

“The top priority is to cease fire and to stop the war as soon as possible,” Wang said, according to a Chinese foreign ministry readout.

“At the crossroads of war and peace, major countries must adhere to fairness and justice, uphold objectivity and impartiality, demonstrate calmness and rationality, and make every effort to cool down the situation and prevent larger-scale humanitarian disasters.”

Wang said China believed that the “core” of the solution was to “respect Palestine’s right to statehood and self-determination”. He said Beijing was willing to work with all parties to make efforts to that end.

The two sides agreed to maintain communication on the situation in the Middle East.

According to US State Department spokesman Matthew Miller, Blinken discussed with Wang his recent trip to the Middle East and Washington’s diplomatic efforts in the region.

“The secretary reiterated the imperative of all parties working to prevent the conflict from spreading,” Miller said.

He also said Blinken had underscored that recent attacks by Yemen’s Houthi rebels against commercial ships in the Red Sea “pose an unacceptable threat to maritime security and international law that all nations have an obligation to uphold”.

Since the Gaza conflict erupted in October, triggered by an attack on southern Israel by Hamas, Washington has firmly backed Israel’s actions and has pledged military support for its close ally.

US President Joe Biden visited Israel in the weeks following the October attack and, most recently, Blinken also visited and pledged Washington’s support but also urged Israeli officials to avoid massive civilian losses as it continued its military operations.

China, meanwhile, has not condemned Hamas’ actions, with top officials labelling Israel’s retaliation as going beyond self-defence.

Beijing last week released a five-point proposal calling for a “comprehensive ceasefire” and for a “concrete” timeline towards a two-state solution.

During Wednesday’s call, Wang also emphasised Beijing’s “solemn stance” on Taiwan and stressed that Washington should not interfere in its internal affairs.

Taiwan – which Beijing views as a renegade province awaiting reunification with the mainland – has been a key issue dividing China and the US. It was among the topics aired during the four-hour meeting between Biden and Chinese leader Xi Jinping in California last month.

Xi told Biden that Taiwan was the most dangerous issue in bilateral ties, warning the US to stop arming the self-ruled island.

The leaders also agreed to resume military-to-military communications during that meeting, in a sign that strained ties between the two superpowers were improving.

Miller, the US State Department spokesman, said Wang and Blinken on Wednesday emphasised the importance of building upon the progress made on key issues during the leaders’ summit.

Wang, according to Beijing’s readout, said the important task now would be to build on the momentum of stabilising US-China ties, and to promote the development of relations in a “healthy, stable and sustainable direction”.

“This is in the common interest of China and the United States, and it is also the responsibility of the two major countries,” he said.

A ‘new era’ of Singapore-China ties? Lawrence Wong eyes stronger partnership on Beijing trip

https://www.scmp.com/week-asia/politics/article/3244055/new-era-singapore-china-ties-lawrence-wong-eyes-stronger-partnership-beijing-trip?utm_source=rss_feed

Singapore’s incoming prime minister Lawrence Wong is in Beijing this week for a four-day visit, during which he will co-chair an annual bilateral forum that analysts say will provide a key platform for the new leadership on both sides to get to know each other better.

Even though Singapore and China have a strong relationship girded by powerful economic links, Wong will have his work cut out for him, the observers said, pointing out that he has not had a long runway to forge connections with emerging Chinese leaders.

This is Wong’s first trip to China since Prime Minister Lee Hsien Loong announced a more precise succession timeline. Wong is expected to take over as leader before the ruling People’s Action Party’s 70th anniversary next November, Lee revealed last month.

Wong’s Chinese counterpart, Ding Xuexiang, was made the executive vice-premier in March following the Communist Party’s twice-a-decade leadership shuffle.

Both last met in May, when Wong was on his first official trip to Beijing after being made deputy prime minister in June 2022. Wong reaffirmed bilateral ties during the visit and also called on Chinese Premier Li Qiang.

In a Facebook post on Tuesday ahead of the trip, Wong, who will also meet Li in this latest visit, wrote that Singapore and China had an “excellent, wide-ranging relationship and we want to continue to grow these strong people-to-people linkages”.

“Together with my colleagues, we will also have bilateral meetings with Chinese leaders – looking forward to taking our partnership with China to greater heights,” he wrote.

Tomorrow will be Wong’s first time co-chairing the Joint Council for Bilateral Cooperation (JCBC), which is the highest platform for Singapore and China to review areas for cooperation.

Analysts said his elevation to cochairmanship was only right, given that he would be the incoming premier and the move recognises the importance of the JCBC mechanism for Singapore.

“The previous co-chair was Deputy Prime Minister Heng, who was then slated to replace Prime Minister Lee, so I think it is natural the new future prime minister helms this position now, underlying the level of importance Singapore places in the JCBC mechanism and in the overall importance of our ties with China,” said Dylan Loh, assistant professor in foreign policy at Singapore’s Nanyang Technological University.

On the scheduled meetings this week, Loh said: “This is an important opportunity for the new leadership in Singapore to also get to know the new leadership in Beijing after their Party Congress.”

Singapore must be alert to US-China rivalry for regional influence: ex-envoys

In April this year, Singapore and China upgraded ties to an “all-round, high-quality, future-oriented partnership”, ushering what both sides described as a new phase of diplomatic relations.

Wong will have to give flesh to this “new era”, analysts said, pointing out that Singapore had built up much political capital with the Chinese over the years but that its relations must be “carefully managed and continually cultivated”.

“Singapore has enjoyed a fairly deep reservoir of political capital built up by our first and second-generation leaders, but of course, this is not a given and needs to be carefully managed and cultivated,” Loh said.

Chong Ja-Ian, a political scientist from the National University of Singapore, noted that the late Lee Kuan Yew, Singapore’s first prime minister, had accumulated enormous political goodwill at a time when Deng Xiaoping, the late communist leader of China, sought deeper engagement with the rest of the world.

“Subsequent Singapore leaders established rapport with [Chinese] leaders through frequent contact, but none replicated the Lee Kuan Yew-Deng Xiao Ping relationship since [China and the Communist Party] had much more options for contact with politicians and business elites subsequently,” he said.

Singapore’s PM Lee will hand over power to Lawrence Wong ‘before next election’

But compared to previous premiers, who had portfolios in defence and a lengthier period in preparation for the top job, Wong seems to have had less security, foreign policy and defence-related issues, Chong said.

Wong was appointed deputy prime minister during a cabinet reshuffle last year, and is currently also the finance minister, after having done stints in national development and education.

“How he will gain experience and develop judgment in these areas is not yet known,” Chong said. “In fact, there is little known about his foreign policy orientation at this point, apart from cutting and pasting from Lee Hsien Loong’s existing policies, which were developed for a different, more globalised and less competitive world.”

Chong suggested Wong could build on the networks in finance and commerce-related spaces that he had nurtured during his tenure in his previous portfolios, including as finance minister.

Loh pointed out that the last two years of the pandemic had restricted opportunities for face-to-face engagement, and more such encounters would be needed to prepare Wong for premiership. “I do think that there is a greater desire for Singapore to let the deputy prime minister take the lead and take increased responsibility in international affairs as we move towards him taking over the prime minister role proper,” he said.

Alan Chong, a senior fellow at the S. Rajaratnam School of International Studies, said he believed Wong’s Mandarin proficiency was up to par in being able to engage the Chinese, comparable to predecessor Goh Chok Tong’s command of the language and Wong should be able to acquit himself well.

Singapore must weigh Asean interests amid US-China rivalry: historian Wang Gungwu

Analysts said they would also be observing how both sides deal with issues such as the management of investment and capital flows into Singapore, and disputes over the South China Sea and Taiwan.

“I would be watching the nature of economic engagement as well as Singapore’s willingness to maintain its position on rule of law, due process and an avoidance of coercion when it comes to contentious issues in the region, such as the South China Sea and Taiwan,” Chong said.

During his visit, Wong and Ding will also co-chair the Joint Steering Committee meetings of three major government-to-government projects in Suzhou, Tianjin and Chongqing.

The last iteration of the JCBC, which was co-chaired by former Chinese vice-premier Han Zheng and Singapore’s Deputy Prime Minister Heng Swee Keat, saw both sides agreeing to strengthen cooperation in various areas such as trade, finance, public health and pandemic response, with a total of 19 memorandums of understanding and agreements signed. It was the first physical forum in two years.

In the coming days, Wong will also meet Chen Miner, Secretary of the Communist Party’s Tianjin Municipal Committee, and Minister of Finance Lan Fo’an, among others.

Over the past decade, China has been Singapore’s largest trading partner and Singapore has been China’s largest foreign investor, according to Singapore’s Ministry of Foreign Affairs website.

China was the top recipient of investment from Singapore in 2021, with S$195.5 billion (US$145 billion) invested, official data indicated.

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‘Too vulgar’: waiter’s hip-twist intimate dance with woman customer sparks criticism of well-known hotpot chain in China

https://www.scmp.com/news/people-culture/trending-china/article/3243517/too-vulgar-waiters-hip-twist-intimate-dance-woman-customer-sparks-criticism-well-known-hotpot-chain?utm_source=rss_feed

A famous hotpot restaurant chain in China has faced censure after a waiter in one of its outlets performed what has been described as a “vulgar” dance with a female customer.

A video clip of the routine, which was performed in a Haidilao outlet in Liaoning province in northeastern China, has gone viral, with many people criticising as “too vulgar”.

On November 28, a representative of the restaurant chain said employees are encouraged to provide a personalised service, but in doing so they should not make customers feel uncomfortable.

The waiter was performing a version of the Ke Mu San dance, or “subject three” in English, which can be performed solo or in groups.

It involves significant hip movement which creates a perception of grinding if performed with another person.

Young people originally performed the folk dance at weddings in the Guangxi Zhuang autonomous region in southern China.

It has recently become a popular online meme because of its engaging moves and catchy music.

Cultural pundits said its characteristic hip and ankle twisting movement represents “the true mental state of young Chinese people”, who are burdened by heavy workloads and intense pressure.

Its name is a nod to the third part of the driving test in China, and one explanation of how it came about is that dance is considered the third required skill in Guangxi, along with singing folk songs and eating rice noodles.

Haidilao began promoting the dance across all mainland outlets after some of its employees performed it for customers and received positive feedback.

After footage of the performances in different branches became a phenomenon, the hotpot chain bought the copyright of the dance’s music and asked its employees nationwide to learn the moves.

Haidilao is famous for its performance-based service, the most notable being the “noodle dance” it uses to make fresh noodles. The company also provides manicures, hair washing, and other services for free across its 1,382 outlets in the Greater China area.

However, the new Ke Mu San dance performance has not been a universal success.

One customer complained that during a family dinner, they were overwhelmed by the dance that was “too loud and made them uncomfortable”.

On November 25, a waitress at a Haidilao restaurant in China’s northern Hebei province went viral after she was filmed performing the dance without smiling.

The incident resonated with many because of “the pain the dance must inflict on” introverted customers and staff.

“Haidilao is a restaurant, not a club, ballroom, or beauty parlour. I only expect it to provide good food,” one online observer said on Weibo.

The chain is not new to controversy.

In March, one of their outlets allowed a university student who missed her train to stay on the premises overnight, triggering a debate about whether a restaurant could provide accommodation services.

In October, a customer complained that Haidilao rejected her request to seat her doll in a baby chair.

China sees great potential and room for growth in ties with Mexico, Wang Yi tells visiting foreign minister

https://www.scmp.com/news/china/diplomacy/article/3244036/china-sees-great-potential-and-room-growth-ties-mexico-wang-yi-tells-visiting-foreign-minister?utm_source=rss_feed

China vows to strengthen cooperation with Mexico and their bilateral relations have great potential and room for development, Foreign Minister Wang Yi told his Mexican counterpart Alicia Barcena.

In a meeting with Barcena in Beijing on Tuesday, Wang emphasised the huge potential for China-Mexico cooperation and said the two sides should “advance all-round exchanges and cooperation” in economy, trade, people-to-people cultural exchanges and other fields, according to a foreign ministry readout.

A China-Mexico working group was established when a Mexican delegation visited China in October. They agreed to jointly combat the trafficking of precursor chemicals used to make synthetic drugs and fentanyl.

Wang and Barcena agreed on the importance of the October visit, according to a Mexican foreign ministry readout.

The two countries will also monitor the production chain and exchange information about the illegal use of these substances.

Drug control is an important part of China-Mexico cooperation, and the current US administration has sought to work with Mexico and China to halt the flow of fentanyl into the US.

Washington has accused China of supplying an illicit flow of precursor chemicals that has resulted in a sharp surge in fentanyl-related overdose deaths.

How is Chinese diplomacy like the Monkey King? Its many virtues, says ex-envoy

In October, it imposed sanctions against 28 individuals and businesses related to fentanyl, a move Beijing criticised while saying the crisis was a problem rooted in the US.

Nonetheless, the two countries struck a deal last month during the leaders’ meeting between Chinese President Xi Jinping and US President Joe Biden, where Beijing and Washington agreed to work together on narcotics control. China urged its chemical companies to curtail production and shipments of the materials used to produce fentanyl.

Xi also met Mexican leaders at the Apec summit last month, and they agreed to combat illegal drug trafficking between their countries and expand bilateral trade and investment.

Expressing the hope of furthering China-Latin America relations, Wang said on Tuesday that China and Mexico – as major developing countries – should strengthen multilateral coordination, safeguard the common interests of developing countries and jointly address global challenges.

On the same day, Wang also held phone talks with David Cameron, the former British prime minister who has taken the role as the UK’s foreign secretary.

Wang told Cameron the two sides should “maintain dialogue and communication, enhance coordination and deepen cooperation” in the face of complex international situations and global challenges, according to a Chinese readout.

‘Sad to see them go’: UK’s only pandas return to China after 12 years

Hoping Britain could establish a “correct understanding” of China, Wang said his country opposed unilateral sanctions and trade protectionism.

“China’s development is a growing force for world peace and a strengthening factor for the stability of the international community,” he said.

Singapore must consider Asean interests in its US-China calculations: Sinologist Wang Gungwu

https://www.scmp.com/week-asia/politics/article/3244004/singapore-must-consider-asean-interests-its-us-china-calculations-sinologist-wang-gungwu?utm_source=rss_feed

Singapore tells an extraordinary story of adjustment and adaptation that is especially pertinent to the subject of these lectures. As an unexpected nation-state, its first leaders did well by their decision to embrace its modern administrative and legal heritage, and expand the range of its imperial economic connections. It saw the United Nations organisation as the embodiment of a renewed Enlightenment civilisation. This protected sovereign nation states wherever located and however small.

With this shield, the island-state was enabled to nation-build with a plural society that drew from several living civilisations. From a unique combination of policies and practices, the new state laid the foundations of a first-world nation at the heart of Southeast Asia.

Everyone was conscious that three-quarters of Singapore’s population was of Chinese origin. That had always been a source of unease in the region. Furthermore, no one foresaw the swift rise of China and its turn towards a state-centred capitalism that provided it with the economic power to make it appear as a threat to the United States.

Nobody anticipated that the severely weakened Sinic civilisation could have used its two revolutions to achieve modernisation so quickly. It now claimed to be the successor to a continuous Sinic centralised state. When China also claimed to have drawn inspiration from the same Enlightenment roots as the West, the US began to demonise the Communist Party-led party-state as returning to the ideology previously represented by the Soviet Union. This ignores China’s deep roots in a civilisation that had considered itself central and exceptional for millennia.

China’s success in using the developed world’s free-market economy to reach out to the developing world has made its modern claims more credible than anyone thought possible. Equally surprising has been the American response. Politically polarised by extremists of every colour and creed, the US has called for an aggressive nationalism against China. That seemed to have been the only call that could unite the country.

In response, China has revived the nationalism that had enabled its people to resist Japanese invasions a century earlier. What is new is that both China and the US now see themselves as representatives of progressive civilisations. The US, as guardian of the liberal Enlightenment, has portrayed China as a throwback to the failed ideology of communism. It has now asked for its military allies in Nato to move further east to help end the threat of a rerun. Together, they hope to restore the liberal dominance that had triumphantly won the Cold War.

US-China rivalry won’t ‘split’ Southeast Asia into two camps: Singapore’s PM

I cannot predict the outcome of that dangerous rivalry. The uncertainty is likely to stay. Where Singapore in Southeast Asia is concerned, I am one of many who have been concerned as to what those of Chinese origins might do when China calls on them as Chinese to sympathise with its aspirations for the future. Needless to say, there will also be repercussions in other Asean states. But no other state has a majority whose populace might be expected to provide a singular response to this inescapable dilemma.

Given Southeast Asia’s history of local cultures selecting what they needed from the civilisations they encountered, Singapore’s best interest seems to be to support the common aspirations of all member states of our region.

What it could do is to remind the new nation-states of their experiences with civilisations in the past, and the way they grew their local cultures by dealing with and learning from neighbouring civilisations. What they had chosen to learn were qualities that were borderless, those not identified with any national political system. Having done that for centuries, each Asean member had become confident in dealing with unpredictable conditions. In that way, each has been able to strengthen its local cultures and shape its own modern national culture. This was why the nation-states were able to come together and stay united as Asean when it was in their combined interests to do so.

Singapore as a state has chosen to stay with this common experience. It is committed to the idea that its citizens of whatever origin should respond only to borderless civilisational appeals and not to nationalist ones. At its simplest where China is concerned, it could distinguish between the current national culture and timeless Sinic civilisation. In Chinese, this would recognise a difference between zhongguo wenhua (中国文化) and zhonghua wenming (中华文明). China today has them both and may not think it necessary or important to project them separately. Singapore’s modern culture would require its leaders to try their hardest to keep the national and the civilisational clearly differentiated.

I do not want to give the impression that this would be easy to do. Careful judgments would have to be consistently made, and many cultural specialists would have to be involved to distinguish the two. But if successfully done, it should produce results that avoid any misunderstanding for all concerned.

The most important contribution of this differentiation is to ensure that Singaporeans of Chinese origin would be able to act in ways that the whole Asean community can understand and be comfortable with. That would show how a modern nation-state could, as with cultures in the past, coexist with a variety of living civilisations.

‘Careful’: Singapore’s Wong warns China about growing influence

There is no question that all Asean states will closely observe how Singapore resolves its exceptional conundrum. The modernity with which the nation-states have identified should provide each of them with the capacity to deal with social plurality, although the scale of each manifestation is different.

Furthermore, if Singapore can sort out its problems with its citizenry and show how that response conforms to Southeast Asian experiences, it should strengthen the region’s confidence in responding to its relations with other civilisations. The region is fortunate to be one that is both maritime and continental, and also located strategically between two oceans that are vital to global prosperity. If it can hold firm as a united Asean that coexists with living civilisations, that might help to prevent our peace-seeking multi-civilisational world from descending into the warring nationalist cultures that threaten us today.

In Living With Civilisations, a published lecture by historian Wang Gungwu, is available online at .

Chinese EV battery giant CATL will set up research and development centre in Hong Kong, in win for government innovation hub push

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3244015/chinese-ev-battery-giant-catl-will-set-research-and-development-centre-hong-kong-win-government?utm_source=rss_feed

The world’s biggest maker of batteries for electric vehicles (EVs), Contemporary Amperex Technology (CATL), will set up a research and development centre in Hong Kong, the Post has learned.

The establishment of the centre would mark another win for a push by authorities to turn the city into an innovation hub, following the announcement of a similar move by UK drug giant AstraZeneca.

The CATL centre, to be established at the Hong Kong Science Park, is expected to recruit about 500 staff and begin operating next year at the earliest, according to a government source familiar with the situation.

Drug giant AstraZeneca to open Hong Kong R&D centre by late 2024 at earliest

“The company is a giant in the industry and it aligns with the city’s development strategy to encourage the use of vehicles powered by clean energy,” the source said. “Research and development is a start, production in the city is the next step for exploration.”

More details are expected to be revealed in a ceremony on Thursday when CATL, the Fujian-based EV battery giant, will sign a memorandum of understanding with local authorities.

Financial Secretary Paul Chan Mo-po is understood to have met the company’s representatives earlier this year to discuss possible investments in Hong Kong.

CATL to make battery offering 400km driving range from 10-minute charge

CATL accounts for the largest share of the global EV battery market, according to analysts. It supplies major carmakers including Volkswagen AG, BMW, Nissan Motor and Tesla.

It announced in August that it would start producing the world’s fastest-charging EV battery by the end of 2023, two years after unveiling the first sodium-ion battery – a new technology using cheaper raw materials to save production costs.

Hong Kong has been stepping up efforts into luring foreign investment. Last month, the government’s Office for Attracting Strategic Enterprises announced that it had attracted more than 30 foreign and mainland Chinese companies which pledged to invest about HK$30 billion (US$3.8 billion) in the city, including the UK drug giant AstraZeneca.

Chinese chip makers plan to invest billions on R&D, production in Hong Kong

The drug company will set up a research base in the Lok Ma Chau Loop by late 2024 at the earliest and will focus on developing cell and gene therapies.

CATL’s plan to set up a research centre in Hong Kong comes as the EV battery firm diversifies its markets amid intensifying geopolitical risks, the latest example being its collaboration with Ford Motors in the United States.

UK drug giant AstraZeneca to set up research base in Hong Kong: Paul Chan

Ford’s plan to use technology developed by CATL at its new US$3.5 billion EV plant in Michigan has been questioned by some US lawmakers, who requested the Biden administration to review the licensing agreement to ensure no subsidies under the country’s Inflation Reduction Act (IRA) would be given to the Chinese company.

The IRA was signed into law by Biden last year and is regarded as the most significant effort in US history to curb the effects of climate change, with US$360 billion allocated for a shift towards renewable energy.

Are high-speed trains becoming Xi Jinping’s preferred way to travel in China?

https://www.scmp.com/news/china/politics/article/3243951/are-high-speed-trains-becoming-xi-jinpings-preferred-way-travel-china?utm_source=rss_feed

Official media reports suggest Xi Jinping is taking bullet trains more often for his China tours, with sources and observers saying the high-speed railway offers security, flexibility and more opportunity for the president to see what is happening on the ground.

A report from state news agency Xinhua said Xi arrived in Shanghai by train when he visited the city last week.

“On the afternoon of the 28th [of November], Xi Jinping went to the Shanghai Futures Exchange for an inspection as soon as he got off the train,” according to the report.

He stopped at a memorial hall for the New Fourth Army in Yancheng, a city about 300km (186 miles) northwest of Shanghai, on his way back to Beijing on Sunday, though the report did not mention how he travelled.

However, sources familiar with the matter said Xi also took the train back to Beijing.

“He came to Shanghai by train and he went back by train, too – that’s why he was able to stop in Yancheng,” said one source, who declined to be named.

A second source, who also did not wish to be identified, said the high-speed train was a faster and cheaper option than flying between Beijing and Shanghai and also provided more flexibility for an additional stop.

The 1,300km route between the two cities takes less than 4½ hours by bullet train.

“If you count the door-to-door time, a high-speed rail trip is actually faster than taking the two hours and 15 minutes flight, because the travel time back and forth from the airport can be very long,” he said.

“The train is more economical than a flight, and it gives the leader the option of an additional stop on the return trip … which is much more trouble if you’re taking flights,” he said, adding that a bigger entourage could also join Xi on the train.

“It also signals his endorsement of China’s high-speed rail network, which is unparalleled in the world.”

Xi has gone on 13 regional inspection tours so far this year and while official media did not say how he travelled for all of them, he has taken the train at least four times, including the latest trip to Shanghai, according to Xinhua reports.

In September, after he visited the eastern province of Zhejiang, Xi took a train to Zaozhuang in Shandong on his way back to Beijing, Xinhua reported.

The president also travelled by train to Hanzhong, in his home province of Shaanxi in the northwest, after a trip to southwestern Sichuan in July.

Xinhua also reported that Xi took a train to Yuncheng in Shanxi en route to Xian in Shaanxi to host the China-Central Asia Summit in May.

Last October, he travelled by train to Yanan in Shaanxi – a city revered by the ruling Communist Party as the cradle of the revolutionary movement.

And in 2020, when he visited Hong Kong for celebrations marking the 25th anniversary of the city’s return to China, Xi also chose to travel by train. He and his wife Peng Liyuan arrived at Hong Kong West Kowloon Station on a special train from neighbouring Shenzhen.

Trains have always been the preferred mode of transport for China’s party leaders, especially the founding generation. Mao Zedong took a 10-day train trip to Moscow in 1949, his first trip abroad, telling cadres that he liked rail travel because “you stop whenever you want and leave whenever you want”.

Party patriarch Deng Xiaoping also took trains as his main form of transport. He spent more than a month travelling by train on his famed southern tour in 1992 – a pivotal moment in China’s opening up and reform.

A political science researcher at Peking University said the train was likely to be the preferred choice for Xi when travelling in China since it is safer than flying and could also offer some insight during the journey.

“It is very difficult for regional governments to cover up all the problems along the railway lines,” the researcher said. “Xi can see a lot more from the train than he could if he was on a plane. Also, the train is much safer than a flight, especially given concerns about aviation safety in China.”

Additional reporting by Daniel Ren

‘This is a joke’: police in China fine ‘irresponsible’ woman for riding electric suitcase down busy Shanghai street

https://www.scmp.com/news/people-culture/trending-china/article/3243310/joke-police-china-fine-irresponsible-woman-riding-electric-suitcase-down-busy-shanghai-street?utm_source=rss_feed

A woman who was discovered riding an electric suitcase down a busy street in China has been slapped with a fine and a reprimand by traffic police.

The unidentified luggage driver, who was in her home city of Shanghai at the time, was crossing a busy intersection when police stopped her, The Paper reported.

In a video clip, filmed by an onlooker, surnamed Zhou, the woman is seen sitting on her electric suitcase while trying to convince two police officers that it was the best way for her to get to work.

The officers told her that she was a safety risk and a danger to life.

It is unclear if the woman knew what she was doing was illegal, but she kept going until the police stopped her.

The woman continued arguing with the officers, even asking them if they would be prepared to give her a lift to work, at which point she was fined and reprimanded.

Police say electric suitcases are banned on the road because they are neither vehicles nor non-motorised vehicles, such as bicycles. They added that the e-luggage could be used indoors and on closed private roads in residential areas.

The officers said that a suitcase rider would be responsible for the consequences of any traffic accident they caused.

People on mainland social media have slammed the woman as irresponsible.

“This is a joke,” said one online observer, while another added: “The woman ignored traffic rules and showed no respect for life”.

Electric suitcases are becoming increasingly popular in China. The average price per suitcase stands at around 2,000 yuan (US$280). Many people use them to move around shopping malls and airports.

Due to the absence of specific regulations governing the use of electric suitcases in China, policies regarding these items may vary among airlines and metro groups.

While certain airlines permit passengers to bring electric suitcases on board as long as the size is under 20 inches and they are not equipped with batteries, Amoy Transit Rail in Xiamen in southeastern China’s Fujian province, for instance, prohibits the entry of electric suitcases.

China advises state firms to keep eye on finances as risk becomes economic watchword

https://www.scmp.com/economy/china-economy/article/3243942/china-advises-state-firms-keep-eye-finances-risk-becomes-economic-watchword?utm_source=rss_feed

China’s state assets watchdog has identified four areas within enterprises run by the central government worthy of careful monitoring – trust companies, finance subsidiaries, private equity and commercial factoring – indicating a tendency towards risk control running deep throughout the country’s economy.

Including state-owned industrial giants in a call for mitigation of systemic shortfalls shows the uncertainty generated by solvency concerns over local government financing vehicles, property firms and smaller banks is not strictly limited to those precarious institutions.

“[The central financial work conference] underscored the importance that each unit within state-owned enterprises confronts prominent issues,” the State-owned Assets Supervision and Administration Commission of the State Council (Sasac) said at a recent meeting.

“[The conference] firmly called for rectifying issues of formalism and bureaucracy, proactively preventing and resolving risks in the financial sectors of central enterprises,” the commission said in an online statement published Monday.

Sasac has already set up a leading group to manage the tasks deemed necessary for a thorough de-risking process.

“Overall risks in the corporate financial sector need to be comprehensively assessed, identified, warned, exposed and disposed of at an early stage,” the watchdog said.

“Once risks surface, decisive action must be taken promptly to eradicate them in their infancy, establishing robust and enduring mechanisms to firmly secure the baseline.”

The agency oversees more than 90 state-owned industrial giants, including China Mobile, China National Petroleum Corporation, contractor China State Construction Engineering Corporation and the Commercial Aircraft Corporation of China. Firms supervised by Sasac had total assets of 81 trillion yuan (US$11.4 trillion) at the end of last year.

China’s major financial players – including major insurers, investment houses and the “Big Four” state-owned banks – count Central Huijin, a subsidiary of the sovereign wealth fund China Investment Corp, as a controlling or majority shareholder, while many national joint-stock banks or regional lenders are controlled by governments at different levels.

Central enterprises only control some small brokerage houses, banks or trusts. To facilitate cash flow, many have financial subsidiaries.

In addition to their property development subsidiaries, some enterprises also have heavy exposure to the property or construction sectors through financing or ownership shares.

The warning from Sasac came as President Xi Jinping named financial risks as an “eternal theme” for the Chinese government during the central financial work conference in October.

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Beijing has also reshuffled China’s financial regulatory regime – establishing the Central Financial Commission as an instrument of direct Communist Party control over the sector – to coordinate the country’s risk management.

De-risking is thereby likely to remain a buzzword at the coming central economic work conference.

China’s property crisis, marked by the failure of development conglomerates Evergrande Group and Country Garden to honour their debts on schedule, has continued this year despite rounds of policy stimulus.

Local government debts have reached 38 trillion yuan, but hidden debts – borrowed through local government financing vehicles (LGFVs) to skirt restrictions on government borrowing – are believed to be even bigger.

The International Monetary Fund estimated that total LGFV debt had swollen to a record 66 trillion yuan this year, more than double the 30.7 trillion yuan figure from 2017.

Central enterprises also wield significant control and regulatory oversight over major banks, who are grappling with bad loans and record-low net-interest margins while still functioning as a lifeline for developers on the verge of default or collapse.

China’s education reforms were meant to lower costs. So why is schooling more expensive?

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For Tan Biao, mother of a 15-year-old boy from a rural area in southern China’s Guangdong province, finding a suitable after-school tutor has been a challenge verging on the impossible.

As in the past, doing so is expensive. But now, money is not the only factor – extensive connections are required to find any service, much less one of quality, as most collapsed overnight after a sweeping ban on after-school tutoring took effect in 2021. Those which survived are mostly operating underground.

“We don’t have any channel for them, nor are their prices affordable,” Tan said. She earns an irregular income at a foreign trade company in Guangzhou and rarely sees her children, who stayed in their hometown of Renhua county in the province’s far north.

In the more than two years since Beijing shook up the education system with its “double reduction” policy – placing strict limitations on the volume and difficulty of homework as well as the scope and scale of private or after-school tutoring – parents and researchers have detected a widening gap in learning outcomes among students from different backgrounds.

Like Tan, many ordinary parents can no longer find tutoring resources since the crackdown, as learning centres disappeared and the threshold for market entry was raised, said Huang Bin, a professor at Nanjing University’s Institute of Education.

“But children from advantaged families are still able to find services,” he said. “The price may have increased, but these families can afford it.”

As a result, disparities in the academic inputs of students from different backgrounds have been exacerbated, which has “profound implications for how children from different families will end up,” he said.

Huang’s observations echoed the findings of a study by a group of Peking University researchers on how the government’s efforts, intended to reduce students’ time burdens and stress levels, worsened educational inequality over a longer period.

Chinese authorities have issued a slew of directives to reduce children’s academic workloads beginning in the 1990s, but implementation of these policies was only intensified in the past decade, with the 2021 crackdown marking the peak.

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Analysing nearly 15,000 families from 25 provinces and municipalities from 2008 to 2018, the Peking University researchers found that children from families in the bottom decile of income were 9.3 per cent less likely to be admitted into a senior high school after the policy change.

In contrast, those from the top decile were 5.3 per cent more likely to gain admission, according to the research paper. The findings were published in the May edition of the China Economic Quarterly.

Disparate outcomes in school enrolment were correlated with vast gulfs in inputs, the Peking University researchers found. For poorer families, educational expenses dropped by 21 per cent and children’s study time fell by over nine hours per week, while for richer ones, expenses rose by 66 per cent and study time grew by more than 10 hours a week.

“It is worth noting that the education model that did not rely on family education and financial expenditure in the past is disappearing,” they wrote in the paper. “Those families that rely more on talent and hard work and thus have low economic investment have to increase financial input after the ‘burden reduction’ policies.”

Pupils in China are entitled to nine years of compulsory education. After completion, they must take a notoriously difficult exam, known as the zhongkao, to be admitted into a senior high school. There, they spend three years before competing for a university spot.

Tan, the mother from Guangdong, said she did manage to find her son an online English tutor earlier this year, as the boy is set to take the zhongkao soon. “But we quit after just a few classes, because it was too expensive for us,” she said.

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She said she felt that her limited resources are dragging the boy down as he tries to achieve – he has performed well enough to be enrolled in either of the two high schools in the county, but his dream is to attend a top-ranked institution in a bigger city. “This would be really hard. The competition would be huge,” Tan said.

Shanghai mother Shirley Dai has taken pains to avoid those regrets. With a much higher household income, she has ensured that her 11-year-old daughter always studies ahead of the curriculum and gets additional help off campus, even after the tutoring clampdown.

Her daughter, who is studying at a top private school in downtown Shanghai, has taken extra classes after school every workday with a home tutor since last autumn.

“We used to study in small classes at learning centres, which cost around 20,000 yuan a year, but they collapsed since the ‘double reduction’ policy,” said Dai, who works as an office manager while her husband runs a small business. “We now have turned to a one-on-one tutor, who charges nearly 2,000 yuan for a single week.”

Home tutors are also illegal under the policy changes, but they are hard to track.

Dai said her investment in private tutoring has borne some fruit – her daughter outshines most of her classmates, at least for now.

Though unsure whether she can keep it up indefinitely, Dai said she remains committed. “I’ll certainly go on spending in this regard as long as we’re financially comfortable.”

To avoid the dramatic gap epitomised by the two families’ situations, educational authorities should reform how students are appraised, said Chu Zhaohui, a senior researcher at the National Institute of Education Sciences, an institution under the Ministry of Education.

“We should consider the students’ background, say, whether they’re from a good school in a big city or a poor one in a rural area, when scoring them on a test,” he said. “This is not hard to do in an open and transparent society.”

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However, progress on such reform – which requires independent evaluation beyond the school or educational authority – has been slow.

“It’s not compatible with the system we have now – one that is dominated by the government … so how to make the change happen?” Chu asked. “It lies in streamlining administration and delegating power, letting professional organisations do what they specialise in.”

For parents, a more direct method is to push schools to do more themselves.

Over 60 per cent of parents of primary and middle school students said they wanted schools to provide more extracurricular activities, and the same portion said they hoped schoolteachers can provide extra attention to children who lag behind academically, according to a survey of over 1,300 parents published by China Youth Daily earlier this month.

Notably, over a quarter also expressed hopes that students in remote areas would have better access to educational resources.

Huang, the Nanjing professor, said schools in rural China have improved their facilities and equipment, but still lack qualified teachers.

“We can build a pretty school for a rural area in a short period, but it remains a difficult issue to recruit enough quality teachers,” he said. “The biggest problem for China’s education now is [this] acute shortage.”

Rural schools are largely having trouble attracting talent because of the poor pay they are offering, he added.

“Our education sector competes with other public and private sectors for quality labour,” he explained. “Only when the bids are high enough and the compensation for teachers in rural and remote areas is large enough can more high-quality labour be attracted to grass roots schools.”

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Tan, the mother from Guangdong, said in her hometown it is a well-known fact that only half of zhongkao participants will be able to enter a senior high school.

Parents’ efforts in demanding better educational resources, she added, have yet to improve conditions.

“Generally, people in the countryside don’t pay as much attention to their kids’ studies [compared to the city],” she said. “So they’ll just accept it if the kid doesn’t perform well enough.”