• Consensus no more? Following Biden, Democrats start to split from Republicans on China policy
• IMF warns of China/US blocs deepening trade fragmentation, with ‘fault lines’ emerging
• China inflation: 4 takeaways from November’s data as deflationary pressure heightened
• Rising Philippine-China tensions in South China Sea: 5 moments from 2023
• China brokers talks in Myanmar between military junta and rebel groups that yield ‘positive results’
• Southeast Asia eyes ‘double benefit’ of tapping China, India tourists post-Covid
• Ex-Xinjiang official under investigation by China’s top anti-corruption watchdog
• Taiwanese pilot planned to defect to mainland China with US-made army helicopter, court told
• China should keep inflation around 4% to boost activity, household wealth, economist says
• China’s cyber army is invading critical U.S. services
• Whistleblowing doctor who revealed China’s AIDS epidemic dies at 95
• ‘No way out’: JD.com founder Richard Liu warns staff not to ‘lie flat’ as China’s e-commerce incumbents fall behind PDD
• China’s grain harvest hits record high amid food security drive, helped by 16% increase from Xinjiang
• ‘Spoilt pest’: abusive China teen girl threatens to stab bus passengers who refuse to offer her seat despite back pain claim, gets scolded
• China cracks down on theft of geographic data, warning of national security threat
• China issues most wanted list in latest bid to clamp down on Myanmar’s sprawling cybercrime industry
• Prostitute prank: suspicious woman in China ends up in custody after calling police to claim innocent boyfriend was with sex worker at massage shop
• COP28 tackles climate finance and recognises China’s crucial role in advancing the energy transition
• Exiled China Aids activist Gao Yaojie has died in New York, aged 95
• Malaysia’s coffin homes, China’s rail gun, 2024 travel recommendations: 5 weekend reads you may have missed
• Mainland China’s Li Ning buys Henderson Land’s Harbour East for US$282 million to house its Hong Kong headquarters
• South China Sea: Philippines summons Chinese envoy, ‘undeterred’ by ‘provocations’, Marcos Jnr says
• PNG ‘keeps’ China for the economy, US for external defence, Australia for internal security: PM
• Global travel demand to and from mainland China recovering at strong pace, IATA chief says, but analysts cautious amid economic slowdown, geopolitical rifts
• ‘The air is polluted’: stuck-up woman kicked out of China Starbucks after complaining ‘dirty’ food delivery man on break in cafe
• China-led team creates soft ‘octopus’ arm in reach for intuitive human-robot interaction
• Golden era of China-Vietnam relations is at hand, never mind the West
• China debt: beyond the boondoggles, is China worth further investment, and why is water controversial?

Consensus no more? Following Biden, Democrats start to split from Republicans on China policy

https://www.scmp.com/news/china/diplomacy/article/3244692/consensus-no-more-following-biden-democrats-start-split-republicans-china-policy?utm_source=rss_feed

“Bipartisan consensus” is the catchphrase in Congress when it comes to US-China relations, but partisan differences have become increasingly visible as the two parties ramp up their campaigns for the 2024 elections.

Ahead of the meeting between US President Joe Biden and Chinese President Xi Jinping in California last month, Senator Chris Van Hollen, Democrat of Maryland, said at an event co-hosted by Foreign Policy magazine and the Quincy Institute of Responsible Statecraft: “Those who say we shouldn’t be talking to China, we shouldn’t be travelling to China, are taking the wrong path.”

And following the meeting, which occurred on the sidelines of the Asia-Pacific Economic Cooperation summit, over a dozen congressional Democrats released statements applauding Biden’s engagement efforts.

“President Biden’s decision to combine vigorous competition with sustained diplomacy is not just prudent, it is paying off for the American people,” said Representative Gregory Meeks, the senior Democrat on the House Foreign Affairs Committee, and Representative Ami Bera, the senior Democrat on its Indo-Pacific subcommittee.

Earlier in the year, Meeks wrote that while there is “bipartisan consensus that China is the United States’ central geostrategic challenge,” the US “cannot confuse hawkishness for strategy, or bluster for strength”.

The Democratic tone differs drastically from that of Republicans, and comes as the Biden administration has combined a return to high-level diplomacy with a continued embrace of export controls on advanced tech and Trump-era tariffs on China.

“De-risking, not decoupling” has become the Biden administration adage for managing its relationship with Beijing, and Congressional Democrats are increasingly falling in line publicly – a move that some analysts say may open up more room for diverse views and policies on Capitol Hill.

“The turns of diplomacy create an opening … to push the relationship in a different direction that could get us off the trajectory towards conflict,” said Jake Werner, the acting director of the East Asian programme at Quincy, which advocates for a more restrained US foreign policy.

Are we headed for a new dynasty of US-China relations after Xi-Biden meeting?

But as senior Republicans continue to assail engagement and tough-on-China bills – including ones that would revoke China’s preferential trade status – sit in Congress, any momentum to sustain engagement is in question. Over US$750 billion in annual US-China trade, and direct US investment that has grown more than 10-fold over the past 20 years, stands at risk.

“The president has yet again undermined US national security interests and significantly narrowed the space for bipartisan cooperation on China,” Senator James Risch of Idaho, the senior Republican on the Senate Foreign Relations Committee, said of the Xi-Biden meeting.

Similarly, Republicans on the House select committee on China chose to temporarily discard the bipartisanship its chair Mike Gallagher had emphasised since the panel’s founding in January.

Ahead of the meeting, committee Republicans called it an example of “zombie engagement”, and issued a list of demands for Biden to raise with Xi. After it, Gallagher took to television to dismiss the bilateral efforts made on climate change cooperation.

For his part, the committee’s senior Democrat, Raja Krishnamoorthi, had called dialogue with China “invaluable” and said agreements from the meeting – which included resuming military-to-military talks and pledges from Beijing to crack down on Chinese producers of fentanyl precursors – were “encouraging potential steps forward”.

Democrats on the committee – the full name is Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party – have generally pursued a more moderate, less ideologically driven line towards China.

Representative Andy Kim of New Jersey has advocated taking a multidimensional approach to China beyond pure national security concerns, and emphasised a more inward-looking approach to countering China, including fixing democracy domestically.

“What is it that the United States can do to strengthen itself?” he asked in October.

Other committee Democrats, like Ro Khanna of California, have championed a revitalised industrial policy as a key part of their messaging – in line with the Biden administration.

“We need to have a balance between a free market system but also strategic investment in critical industries to remain the pre-eminent nation in the 21st century,” Khanna said in July.

While Republicans haven’t rejected a focus on competing economically with China, they have taken a less active stance on stimulating strategic industries at home.

Most, including all Republicans on the select committee, voted against the Democratic-promoted Chips and Science Act of 2022 – which incentivises domestic production of advanced semiconductors, a key to the Biden administration’s China strategy.

For the most part, Krishnamoorthi has tried to maintain a bipartisan line, joining Gallagher on numerous efforts like investigating Chinese hi-tech investments, supporting Taiwan’s defence, and condemning China’s human rights record. However, he has also increasingly promoted issues Republicans have largely avoided.

In a speech last month at the Johns Hopkins University’s School of Advanced International Studies, Krishnamoorthi highlighted the need to fix the “broken” US immigration system as a pillar of outpacing China.

“We cannot out-compete the CCP unless more of the world’s best and brightest and most hardworking people come to this country and stay here,” he said.

Krishnamoorthi also highlighted the importance of combatting anti-Asian hate spurred by anti-China rhetoric and advocated for people-to-people-ties, including by reinstating the Fulbright programme in China, which was terminated in 2020 by then-president Donald Trump.

Other congressional Democrats who have rarely shied away from criticising China have recently taken a more moderate tone as well.

At the Foreign Policy-Quincy event, Representative Adam Smith of Washington, the House Armed Services Committee’s senior Democrat, said the US must maintain opportunities for partnerships with China, while seeking a rebalancing of the past two decades.

“When you look at problems we face, one of the largest economies in the world can be a positive part of that,” he said.

“I freak out when other members start talking about ‘China is the enemy’, ‘China is an existential threat’ … that’s not the way the world’s going to work. It’s more complicated than that.”

At the same event, Van Hollen, a member of the Senate Foreign Relations Committee who has sponsored numerous bills and resolutions to counter Beijing, said that while depending less on China for strategic sectors was important, he was firmly against decoupling.

Early progress hours before Biden-Xi meeting: a rare US-China climate accord

While Democrats are willing to pass tough-on-China bills that fit their priorities like human rights and US economic competitiveness, Republicans have focused more on a “whole of society” exclusion of China.

This includes highlighting issues like Confucius Institutes, visa restrictions for Chinese students in the US, the purchase of American land by Chinese companies and security risks posed by the Chinese-owned video platform TikTok.

Evan Medeiros, a professor at Georgetown University and former White House adviser on Asia, said that any convergence or divergence between the two parties may be as much driven by the pursuit of domestic partisan agendas as they are by competing with China.

“Many legislators’ policy choices on China are not just about strategic concerns but are increasingly about instrumental political advantage and advancing their political priorities,” he wrote last week.

Werner of the Quincy Institute noted that the Republican maximalist positions were partly a reflection of being out of power: “Partisan-inspired condemnations will tend to be sweeping and say everything that the other side is doing is wrong.”

“When they get into power, they follow a much more nuanced or complex approach.”

But even before the 2024 elections, these tonal shifts may impact Congress’s work, which since 2018 has seen a dramatic rise in bills and resolutions on China and bipartisan passage of such legislation.

Christopher Chivvis, director of the American Statecraft programme at the Carnegie Endowment for International Peace, flagged the October visit to China by Charles Schumer, the Senate majority leader, as an important indication of changing attitudes, at least by Democrats.

“It does indicate a willingness to steer the tenor of the discussion in a somewhat different direction than it has been going over the course of the last five years,” he said of the bipartisan trip – the first congressional delegation to mainland China since 2019.

But Chivvis said it remained too early to analyse the extent of this shift and where the shift might lead, noting also some intraparty divisions that may come into play.

In a reflection of splits among Republicans, Representative Patrick McHenry, chair of the House Financial Services Committee, pushed to drop tightened controls on US investment in Chinese technology from Congress’s annual defence authorisation bill this year.

For now, Chivvis noted that Capitol Hill’s China moderates must still contend with an institution that leans towards a more aggressive approach towards Beijing.

“There’s a lot of negotiation at staff level over some of these issues, even where there appears to be consensus,” he said. But “what it comes down to … is an effort to water down more hawkish pieces of legislation”.

“They’re always on the back foot,” he said.

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IMF warns of China/US blocs deepening trade fragmentation, with ‘fault lines’ emerging

https://www.scmp.com/economy/china-economy/article/3244690/imf-warns-china/us-blocs-deepening-trade-fragmentation-fault-lines-emerging?utm_source=rss_feed

As national security concerns are shaping economic policy worldwide, the International Monetary Fund has warned that shifting investment trends and trade fragmentation could result in long-term losses in a world divided into two blocs centred on the United States and China.

In a speech delivered on Monday at the opening of the 20th World Congress of the International Economic Association in Colombia, Gita Gopinath – the first deputy managing director at the IMF – explained that China is “no longer” the largest trading partner of the US, as the US-China trade war since 2018 has “effectively” curbed Chinese imports of tariffed products. The comments were taken from an embargoed copy of her speech provided to the Post.

According to official Chinese customs data, the US was the third-largest trading partner of China up to November of this year, following the Association of Southeast Asian Nations and the European Union.

China is also “no longer” a prominent destination for outward US foreign direct investment, Gopinath added, and China is losing ground to emerging markets such as India, Mexico and the United Arab Emirates.

Made-in-China still dominates US holiday sales, but do Americans even care?

Gopinath also said there is “suggestive evidence” indicating that direct links seen between the US and China in the past are being replaced by indirect links.

“For example, large electronics manufacturers have accelerated relocating production from China to Vietnam, given US tariffs on Chinese goods,” she explained. “However, Vietnam sources most inputs from China, while most exports go to the US.

“Meanwhile, Mexico eclipsed China as the biggest exporter of goods to the US in 2023. But many manufacturers opening plants in Mexico are Chinese companies, targeting the US market.”

Figures from the Mexican Association of Private Industrial Parks suggest that one in five new businesses in the next two years will be Chinese.

Meanwhile, Gopinath said that “fault lines” are emerging as geoeconomic fragmentation increases, even though “there are no signs of a broad-based retreat from globalisation”.

“If fragmentation deepens, we could find ourselves in a new cold war,” she warned, adding that any descent into such conditions could bring about “an annihilation of the gains from open trade”.

“Ultimately … it is in [policymakers’] – and everyone’s – best interests to advocate strongly for a multilateral rules-based trading system and the institutions that support it,” she advised.

Gopinath also warned that the degree of economic interdependence between countries now is higher than in the past – global trade currently accounts for about 60 per cent of the world’s gross domestic product (GDP), compared with 24 per cent during the Cold War between the US and the Soviet Union from about 1946 to 1989.

Sustained export growth in ‘doubt’: 5 takeaways from China’s trade data

“[A]s economies have become much more integrated into the global marketplace and through complex global value chains, this will likely raise the costs of fragmentation,” she said.

Another concern of fragmentation is the disconnection of international cooperation.

“The breadth of those challenges – from climate change to AI – is immense,” Gopinath said.

Citing a recent IMF analysis, she highlighted that the fragmentation of trade in minerals critical for the global green transition – such as copper, nickel, cobalt and lithium – would make the transition “more costly” because these minerals are geographically concentrated and not easily substituted.

A disruption in the trade of such essential minerals, she said, “would lead to sharp swings in their prices, suppressing investment in renewables and EV production”.

China inflation: 4 takeaways from November’s data as deflationary pressure heightened

https://www.scmp.com/economy/economic-indicators/article/3244649/china-inflation-4-takeaways-novembers-data-deflationary-pressure-heightened?utm_source=rss_feed

If you would like to see more of our reporting, please consider .

China’s consumer price index (CPI) fell 0.5 per cent year on year in November, a steeper drop compared to the 0.2 per cent fall in October.

The year-on-year decline was the sharpest since November 2020.

“CPI fell deeper into deflationary territory last month,” said analysts at Capital Economics.

“The main culprit was a deepening of food price deflation, from minus 4 per cent year on year to minus 4.2 per cent, with food prices falling 0.5 per cent month on month last month after accounting for seasonality.

“In addition, energy prices fell 2.7 per cent month on month, which pushed energy price inflation back into negative territory again.”

China’s producer price index (PPI) – which reflects the prices that factories charge wholesalers for products – fell for the 14th straight month in November after falling by 3 per cent, year on year, compared to a 2.6 per cent drop in October.

On a month-on-month basis, the PPI dropped by 0.3 per cent after a flat reading in October.

The biggest declines in November were in energy and metal prices, said analysts at Capital Economics.

China’s core inflation, excluding food and fuel prices, remained at 0.6 per cent in November, unchanged from October.

Analysts at Capital Economics said low core goods inflation, which rebounded last month from zero per cent year on year to 0.2 per cent, reflected price cutting by manufacturers in a bid to defend export market share as the coronavirus pandemic boom in global goods demand petered out.

Service deflation, meanwhile, fell to a five-month low of 1 per cent from 1.2 per cent in October, which added to evidence of renewed weakness in the labour market, analysts at Capital Economics said.

Analysts at Capital Economics said they expect Chinese inflation to stay low in the near term, but do not think it will enter a deflationary spiral.

Core inflation, though, is likely to rise in the first half of 2024, they added, with the recent step up in policy support likely to boost domestic demand and push up services inflation.

Food and energy price deflation is likely to alleviate due to shifting base effects, and they expect CPI inflation to average 1 per cent in 2024, up from 0.3 per cent so far this year.

“Deflationary pressure has heightened as domestic demand remains weak. This highlights the importance of more supportive fiscal policy to boost domestic demand and avoid a further downward spiral in prices,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.

Rising Philippine-China tensions in South China Sea: 5 moments from 2023

https://www.washingtonpost.com/world/2023/12/11/philippines-china-south-china-sea-incidents/2023-12-11T04:31:22.988Z

MANILA — From flashing lasers to collisions and water cannons, it has been an increasingly incident-filled year in the brewing conflict between China and the Philippines in the South China Sea, one of the most vital trade routes in the world and a potential global tinderbox.

After a collision this weekend between Chinese and Philippine vessels, and the use of water cannons a dozen times, the Philippines on Monday condemned what it called a “serious escalation” of Chinese aggression. The Philippines has a mutual defense treaty with the United States.

China’s actions “really show a desire on their part to escalate the situation,” said Jonathan Malaya, spokesman for the national task force on the West Philippine Sea, the name for the region of the South China Sea under Philippine jurisdiction.

China’s coast guard spokesman, Gan Yu, said on Sunday its operations were “professional, standardized, legitimate and legal,” and that the collision that day was deliberately caused by the Philippines.

The conflict is part of a series of overlapping territorial disputes China has with other countries around the South China Sea, including Indonesia, Malaysia and Vietnam. China has been militarizing the islands in the area to support its claims. In 2016, an international arbitration tribunal ruled in favor of the Philippines — a ruling that China has ignored.

Here are five incidents this year that capture the steadily escalating tension in the West Philippine Sea.

February: China flashes laser

In February, China flashed a military-grade laser at a Philippine coast guard vessel approaching the Second Thomas Shoal, temporarily blinding its crew, according to the Philippines’ account. A laser attack is typically seen as hostile because as it can also precede firing on a target.

The incident took place about a month after what was initially seen to be as a fruitful visit by President Ferdinand Marcos Jr. to Beijing. Analysts cite the moment as a turning point for Philippines’ policy after years of a more muted approach. The president summoned the Chinese ambassador himself — an unusual move, as the Foreign Ministry typically oversees such summons.

“This is where the Philippines made its choice,” said Ray Powell, SeaLight director at the Gordian Knot Center for National Security Innovation. Its decision to release visuals of the event kick-started what Powell calls its “assertive transparency” campaign. After February, the Philippines would actively document and publicize China’s actions, shoring up support from other countries.

[Rebuffed by China, Philippines’ Marcos toughens line on contested waters]

March, December: China swarms

Swarming, or the deployment of a flotilla of vessels to intimidate or overwhelm a target, has been a signature move China uses to assert its presence. China sends a combination of coast guard, navy and militia vessels to surround a site or block and cut off target ships. Its maritime militia is a force of fishing vessels that works with the state.

One of the first swarms recorded this year was in March, when over 40 Chinese vessels gathered around Thitu Island, known to Filipinos as Pag-asa, which is home to a civilian settlement. On Dec. 3, the Philippine coast guard released video of 135 Chinese vessels swarming Whitsun Reef, known locally as Julian Felipe.

Swarming is “at the core of [China’s] aggressive, coercive behavior,” said Victor Andres Manhit, president of Manila-based think tank Stratbase Albert del Rosario Institute. All other actions are enabled by its capacity to swarm and bully their target, he added.

August: China deploys water cannon

The first recorded Chinese use of a water cannon against a Philippine ship this year came in August. The ship was resupplying Philippine Marines on to the Sierra Madre, an outpost on a rusting ship that was run aground on Second Thomas Shoal to support the Philippine claim. The Philippine Department of Foreign Affairs called an emergency hotline — established during Marcos’s Beijing trip — after the incident but China did not answer for six hours.

It was only the second known use of the water cannon in the West Philippine Sea and important because it was caught “in broad daylight [with] multiple views,” maritime expert Jay Batongbacal said in August. At the time, pro-China commentators were quick to emphasize the event was nonlethal.

“The truth is … the high pressure actually can potentially sink that wooden vessel,” Batongbacal said. “It definitely can injure persons perhaps seriously and even fatally under the right conditions.”

September: Philippines cuts floating barrier

In two back-to-back incidents in September, the Philippines released footage of extensive damage in Iroquois Reef, locally known as Rozul. It alleged the damage was caused by the earlier swarming of Chinese militia ships in the area. Justice Secretary Jesus Crispin Remulla called for environmental charges against China at the arbitration court, a proposal that is under government review.

The next week, it cut a floating barrier that it said China planted in Scarborough Shoal, another disputed site in the West Philippine Sea and a traditional fishing ground to which China has been blocking access.

December: China uses water cannons again

In the past week, the Philippines sent two missions into the disputed area, a humanitarian mission to distribute goods to fishermen near Scarborough Shoal, and a resupply mission to the outpost on Second Thomas Shoal. China used a water cannon eight times on the fishing vessels in the first mission, and then four times on the resupply mission.

One vessel had to be towed back after water cannon damage disabled its engine, “seriously endangering the lives of its crew,” the Philippine coast guard said. Another sustained damage to its mast, and another was rammed.

The Philippines coast guard said it was harassed by a total of 13 Chinese coast guard and militia ships. It also detected over 48 China vessels in the area, the “largest number of maritime forces we have documented” in recent resupply missions, spokesman Jay Tarriela said Monday.

Following the uptick in harassment, Philippine officials said they were looking at adjusting the nation’s strategy but declined to provide details.

A 30-vessel civilian convoy over the weekend was also interrupted after being harassed by China, its organizers said. Donations meant for soldiers have been turned over to authorities, and the volunteer ship returned to base for security reasons. But the caravan was the first of “many more to come,” said Rafaela David, organizer of the “Atin Ito” or “It’s Ours” coalition.

“Our goal is to regularize and normalize the travel and movement of the Filipino people in this region,” she said. “After all, it is ours.”

Meaghan Tobin in Taipei, Tawain, contributed to this report.

China brokers talks in Myanmar between military junta and rebel groups that yield ‘positive results’

https://www.scmp.com/news/asia/southeast-asia/article/3244699/china-brokers-talks-myanmar-between-military-junta-and-rebel-groups-yield-positive-results?utm_source=rss_feed

Representatives from Myanmar’s ruling military have met with three armed rebel groups involved in an ongoing anti-junta offensive, state media reported a junta spokesperson as saying on Monday.

The meeting was facilitated by China and there would likely be another such meeting by the end of this month, Zaw Min Tun said, according to MRTV’s Telegram channel.

“Myanmar’s National Unity and Peacemaking Coordination Committee met with representatives of MNDAA, TNLA and AA with the help of China,” he said, referring to the armed ethnic groups.

“Based on the development of the conversation, there is likely to be another meeting at the end of this month.”

China said on Monday that peace talks had yielded “positive results”.

“China is happy to see the parties to the conflict in northern Myanmar hold peace talks and achieve positive results,” foreign ministry spokeswoman Mao Ning said.

Beijing would “continue to provide support and facilitation to this end”, she added.

“We believe that the easing of the situation in northern Myanmar serves the interests of all parties in Myanmar and is conducive to maintaining tranquillity and stability along the China-Myanmar border,” Mao said.

It was unclear when or where the meeting took place and Zaw Min Tun did not elaborate on what was discussed.

Myanmar’s military, which seized power in a 2021 coup, is facing a fresh surge in fighting amid a coordinated offensive mounted by three rebel groups that have since late October managed to take control of several military posts and towns near the border with China in the north and in western states.

Representatives of the three rebel groups did not immediately respond to request for comment.

Last week the junta’s foreign minister met the deputy secretary of the Yunnan Provincial Party Committee in China’s Kunming, where they discussed “peace and stability along the border areas,” according to the Global New Light of Myanmar.

Myanmar’s junta wants China’s support. Analysts expect ‘cautious pragmatism’

Beijing is a major ally and arms supplier of Myanmar’s junta and has refused to label its 2021 power grab a coup.

The offensive by the alliance of ethnic minority armed groups has galvanised other opponents of the junta.

Clashes have spread to the east and the west of the country and forced more than half a million people to flee their homes, according to the United Nations.

Analysts say China maintains ties with ethnic armed groups in northern Myanmar, some of whom share close kinship and cultural ties with China and use Chinese currency and phone networks in the territory they control.

Protesters gathered at a rare demonstration in Yangon last month to accuse China of backing the ethnic minority alliance, in what analysts say was a move sanctioned by junta authorities.

Beijing has expressed “strong dissatisfaction” over the clashes in Shan state, home to oil and gas pipelines that supply China and a planned billion-dollar railway link.

Southeast Asia eyes ‘double benefit’ of tapping China, India tourists post-Covid

https://www.scmp.com/week-asia/economics/article/3244643/southeast-asia-eyes-double-benefit-tapping-china-india-tourists-post-covid?utm_source=rss_feed

Viraj Bisht regularly flies with a bunch of travel buddies from India to Thailand, where they motor across the country’s northern highlands in Chiang Mai.

“I love the culture, it’s very secluded, cheap to stay, and the food is great,” he said. “I am planning to go again in February or March.”

Other Southeast Asian nations are also opening their doors wider to Indian travellers, with Malaysia allowing visa-free travel for up to 30 days since this month and Indonesia reportedly considering the same for travellers from 20 nations.

Unlike the United States and Europe, Vietnam and Cambodia, too, have relatively easy visa access for Indian nationals, helping to usher in a tourism rebound this year across Southeast Asia despite a slower-than-anticipated tourism recovery from the region’s mainstay Chinese travellers.

“More destinations in Southeast Asia are introducing direct flights to/from India to meet increasing demand for travel to the region,” said Gary Bowerman, director of Check in Asia and co-host of travel podcast The South East Asia Travel Show. “Through 2030, India will be the fastest growing inbound market in percentage terms for many Southeast Asian countries.”

With around 5.3 million tourist arrivals from India to the 10 Asean nations before Covid-19 hit in 2019, compared to China’s 32.2 million before the pandemic in 2019, clearly India has a lot of catching up to do.

Rising income levels across India – expected to be the fastest-growing major economy – are supplanting travel demand that are making tourism earnings from across the region more resilient even as Western tourists are pruning budgets.

India’s outbound travel has the potential to grow from 13 million trips in 2022 to over 80 million by 2040, said a McKinsey report published in November, noting that its population has surpassed China’s to stand at 1.4 billion people.

“What’s more, consumption of goods and services, including leisure and recreation, is forecast to double by 2030. Adding a strong post-pandemic travel recovery, and a growing appetite for international travel, these factors point to India’s significant potential for outbound tourism,” the report said.

Proximity is a key factor in the choice of destinations for 70 per cent of Indian travellers, who prefer places that take less than four hours to get to, it added.

Airlines across Southeast Asia, which have been struggling to add capacity due to broken supply chains for aircraft as well as crew shortages since the pandemic, are also now eager to tap the potential Indian demand, say experts.

Edward Clayton, partner at PwC Malaysia, told a webinar by global information and analytics provider OAG Aviation that several Southeast nations “have made a significant increase in flights or destinations in India”, resulting in diversion of domestic flight capacity.

“Airlines see that [India] as a very attractive market moving forward, and that is very visible,” he said.

International visitor arrivals in key Southeast Asian destinations are yet to fully recover amid the slower than expected uptick from China.

Total passenger arrivals for the first 10 months of this year at Singapore’s Changi Airport were 48 million, compared to 56.2 million for the same period in 2019, Bowerman said. “So there is still a gap to bridge,” he said.

In 2019, Chinese travellers made 155 million trips abroad and spent nearly US$255 million, accounting for about 14 per cent of the global tourism spend.

Bertrand Saillet, managing director of travel management company FCM Travel Asia, said airline capacity in Southeast Asia was currently at 77 per cent of pre-Covid levels, adding that data from aviation analytics firm Citrium suggested that there would be an additional 6-9 per cent capacity over the next 12 months.

Hotel occupancy in December across China and the rest of Asia, except Malaysia, remained lower than 2019 levels but stood higher than last year. “Within Asia, India has been robust for both corporate travel and meetings and events,” he said.

Southeast Asia’s tourism sector will struggle amid slow China recovery

Overall, there is resilient demand for air travel despite economic challenges faced by consumers such as higher costs of living and fuel prices, Saillet said.

“In 2024, arrival numbers [in Southeast Asia] will probably reach the 2019 level or almost the 2019 level,” said Wolfgang Georg Arlt, CEO of the China Outbound Tourism Research Institute.

“Chinese are travelling again, but the number of social climbers in Chinese society who are for the first time able to afford a trip to Southeast Asia, will be less than before the pandemic,” he said.

They are also likely to splurge less than before, and “getting value for money will be the new thing to brag about”, Arlt said. “It is a good idea [for Southeast Asia] not to put all eggs in one basket. On the other hand, China will remain the most important market.”

Indian travel industry executives are optimistic about a further pickup in travel from the country.

“Given the exceptional backlog for visas [for Indians] to the US and Europe, Europe’s loss is Asia’s gain,” said Rajeev Kohli, president of Euromic, a non-profit marketing association of the world’s leading destination management companies. “Secondly, the cost of air travel to the West is exceptionally high compared to Asia.”

Fares from India to Europe are 40-60 per cent higher than pre-pandemic levels, whereas those to Asia have not increased significantly, he said.

“Southeast Asian nations have made a concerted effort to attract Indians,” Kohli said. But it would be wrong to think that Indian tourists are replacing Chinese visitors, he added.

“We have filled the [market] gap, we have not replaced the Chinese. When the Chinese start travelling again, these countries will have double the benefit,” he said.

Ex-Xinjiang official under investigation by China’s top anti-corruption watchdog

https://www.scmp.com/news/china/politics/article/3244688/former-xinjiang-official-under-investigation-chinas-top-anti-corruption-watchdog?utm_source=rss_feed

Xinjiang’s former education chief Li Pengxin has been detained by China’s top anti-corruption watchdog.

The Central Commission for Discipline Inspection (CCDI) said on its website on Monday that Li, 63, the former deputy secretary of the Xinjiang Uygur autonomous region’s party committee and secretary of the region’s education work committee, was being investigated for “suspected serious violations of discipline and law” – the usual euphemism for corruption.

The announcement came just days after the Politburo urged its discipline inspection and supervision organs to make more of an effort to tighten the political oversight of party cadres and target industries and places where corruption is rife.

The Politburo’s meeting on Friday also announced that the CCDI would hold its plenary session, where it sets out the main focus of its work for the year, between January 8 and January 10.

Li, who held a vice-ministerial rank before he stepped down from his role in 2021, is the second “tiger”, or senior official, in the sensitive far-western region to be targeted by the CCDI this year.

US sanctions more Chinese officials and firms over alleged abuses in Xinjiang

In October Han Yong, the region’s former deputy secretary and the party secretary of the Xinjiang Production and Construction Corps – a state-owned enterprise and paramilitary group – was detained on suspicion of corruption.

A Shanxi native, Li spent the first three decades of his political career in the northwestern Qinghai province, where around half the population are ethnic minorities, after he graduated from Qinghai Normal University with a degree of Chinese studies.

He served in various Communist Youth League posts in the province in 1990s, then a common route for younger cadres to rise up the ranks.

Li achieved vice-ministerial rank at the age of 45 in 2005, when he was promoted to become a member of Qinghai’s standing committee and party chief of the Haixi Mongolian and Tibetan autonomous prefecture.

Beijing’s anti-corruption and environment watchdogs have been investigating corruption and breaches of environmental protection laws in Haixi, detaining dozens of local officials in the process.

Wen Guodong, Li’s successor in Haixi, turned himself in to the corruption watchdog in 2020. Last year he was given an 11-year jail term and fined 2 million yuan (US$280,000) for bribery.

At the start of the month, Beijing’s ecological and environmental inspection team criticised the Haixi government for failing to tackle serious problems that were harming the grasslands surrounding the salt lakes in the Qaidam Basin.

In November 2011, Li was transferred to the Inner Mongolia autonomous region, serving as director of its organisation department.

He was then transferred to Xinjiang, serving as deputy secretary and secretary of the education works committee in 2016, when the regional government started an overhaul of Uygur-language textbooks and purge of officials in the education sector.

State Council’s free-trade plans for Xinjiang look to sharpen geopolitical edge

The former head of the Xinjiang education department, Sattar Sawut, was handed a suspended death sentence with a two-year reprieve, and five other Uygurs given hefty prison terms, in 2021 for their roles in writing and publishing of a number of textbooks deemed “problematic” by local authorities.

The court ruled that the textbooks had incited people to carry out a series of violent and sometimes deadly attacks in Xinjiang between 2009 and 2014. Close to 200 people were killed in the 2009 riots in Urumqi, the regional capital.

In 2020, Xinjiang’s then-deputy chairwoman of the government and party chief of the region’s education department Ren Hua, was also placed under investigation. In January last year she was jailed for 14 years and fined 4 million yuan for bribery.

Taiwanese pilot planned to defect to mainland China with US-made army helicopter, court told

https://www.scmp.com/news/china/politics/article/3244696/taiwanese-pilot-planned-defect-mainland-china-us-made-army-helicopter-court-told?utm_source=rss_feed

A Taiwanese army pilot was offered US$15 million to defect by landing an US-made transport helicopter on a People’s Liberation Army Navy aircraft carrier during a military drill near the island, according to prosecutors.

But the scheme fell through after the officer was arrested in August for allegedly spying for Beijing, a Taiwan court has heard.

The pilot, identified by his surname Hsieh, was approached in June by mainland Chinese intelligence officials through a retired Taiwanese army officer to fly the CH-47 Chinook helicopter onto the aircraft carrier, the Taiwan High Court Prosecutors Office said in an indictment revealed by lawmakers on Monday.

“According to the instruction from the [mainland] agents, Lieutenant Colonel Hsieh was asked to fly the helicopter at low altitude along the coastline to the Chinese Communist carrier which would be staging drills close to the waters 24 nautical miles [44km] off [Taiwan],” the indictment said.

In exchange, prosecutors said Hsieh would be paid NT$200,000 (US$6,355) per month, and the mainland side would help evacuate his family to Thailand in the event of a cross-strait conflict.

Hsieh initially declined the offer because it was too risky, but later accepted the proposition when mainland agents raised their offer to US$15 million with a US$1 million “deposit”, if he accepted, the indictment said.

Hsieh also proposed that the PLA stage the drill in waters near the southern Taiwanese city of Kaohsiung so that he would not need to cross the median line that separates the island and the mainland in the Taiwan Strait, therefore minimising the chance the helicopter would be intercepted by Taiwan’s air force, according to prosecutors.

The indictment said that Hsieh held a teleconference with mainland operatives in July to discuss the details of the alleged defection, including helping his family immigrate to Thailand.

The prosecutors later arrested Hsieh and the retired officer following a tip-off, which “prevented the US-made aircraft from falling into the hands of the communist force”, the indictment said.

Chinese President Xi Jinping visits helicopter supplier for PLA’s Taiwan sorties

The would-be defection came to light on Monday after lawmakers grilled Taiwan’s defence minister Chiu Kuo-cheng in a meeting over the security lapse within the military and measures the ministry were to adopt in response.

“I feel pained too, to have discovered a case like this and those allegedly involved must be dealt with according to the law,” Chiu told lawmakers.

The defence ministry also issued a separate statement on Monday, saying the military and security agencies in Taiwan had conducted an internal investigation and fully cooperated with the judiciary in its probes.

Hsieh’s case surfaced a week after Taiwanese prosecutors indicted a group of active and retired officers on November 27 for allegedly spying for Beijing.

The case also came as the ministry reported that the PLA’s Shandong battle group sailed south through the Taiwan Strait on Monday on the mainland side of the median line. No further details were provided by the ministry.

Around the time Hsieh was first approached by the mainland agents, the same battle group passed through the same area on June 21.

Taiwan’s military must objectively assess PLA then ‘strengthen ourselves’

Beijing, which views Taiwan as its territory, to be taken under control by force if necessary, has intensified its military operations around the self-ruled island since August last year after then US House Speaker Nancy Pelosi visited Taipei.

Beijing said the visit was a violation of its sovereignty and a breach of the US’s one-China policy.

The United States, like most countries, does not recognise Taiwan as an independent state, but is opposed to any unilateral change by force in the cross-strait status quo.

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China should keep inflation around 4% to boost activity, household wealth, economist says

https://www.scmp.com/economy/china-economy/article/3244681/china-should-keep-inflation-around-4-boost-activity-household-wealth-economist-says?utm_source=rss_feed

A prominent analyst has said China should target a yearly inflation rate of 4 to 6 per cent to recover household wealth and drive its economy, after a recent decline in consumer prices has renewed deflationary concerns and fuelled calls for policy shifts to stimulate domestic demand.

“Apart from not restraining housing prices, China’s central bank needs to push the yearly inflation rate to about 6 per cent as soon as possible, and then drive it to 4 per cent until the overall economy has significantly improved,” Steven Ng-Sheong Cheung, a Hong Kong-born American economist, said in his Sina blog on Friday.

His remarks were widely circulated on Chinese social media over the weekend after China reported a drop of 0.5 per cent in the consumer price index (CPI) in November from a year earlier, the lowest reading in three years.

Eight straight months of near-zero growth in China’s CPI, and 14 months of contraction for its producer price index – a gauge of factory-gate prices – have compounded concerns over weak domestic demand and low confidence, two phenomena that have hampered the country’s economic recovery since the lifting of pandemic-induced restrictions at the beginning of the year.

According to Cheung, the falling wealth of Chinese residents, largely caused by uncertainties in the property market, has weighed on the desire for consumption and stifled economic activity.

“The decline in wealth is seriously damaging to the economy,” said Cheung, who is known for his pro-market stances. “Residents’ incomes are transitory, but their wealth is not. Declining wealth means that residents’ expectations for future income are permanently falling.”

CPI rose 0.3 per cent from January to November, year on year, far behind the government target of 3 per cent.

Beijing has refrained from quantitative easing or stimulus measures like the 4-trillion-yuan package it levied in 2008 and 2009 to rescue the economy in the wake of the global financial crisis. It has taken an alternative approach to avoid overcapacity, property bubbles or adding to local government debts.

Teng Tai, director of WANB Institute, a Beijing-based non-profit think tank, said the government should not underestimate the drag deflation can exert on the job market and economic growth.

“The current deflation in China is one of the most serious economic challenges it has to face,” he said. “To reverse this trend, China needs to move away from the traditional policy mindset of preventing inflation and exchange rate depreciation, and perform a U-turn.”

Core inflation, which excludes food and fuel prices, stood at 0.6 per cent in November. That number was lower than the average 1.5 per cent observed from 2012 to 2021, indicating that China is still facing a mild economic recovery and poor demand, said Ding Shuang, chief Greater China economist at Standard Chartered Bank.

“Beijing’s policies should address how to boost confidence in the private sector, [as well as] investment and consumption, and create healthy and sustainable internal economic impetus through reforms,” Ding said.

China’s cyber army is invading critical U.S. services

https://www.washingtonpost.com/technology/2023/12/11/china-hacking-hawaii-pacific-taiwan-conflict/2023-11-25T20:44:45.623Z

The Chinese military is ramping up its ability to disrupt key American infrastructure, including power and water utilities as well as communications and transportation systems, according to U.S. officials and industry security officials.

Hackers affiliated with China’s People’s Liberation Army have burrowed into the computer systems of about two dozen critical entities over the past year, these experts said.

The intrusions are part of a broader effort to develop ways to sow panic and chaos or snarl logistics in the event of a U.S.-China conflict in the Pacific, they said.

Among the victims are a water utility in Hawaii, a major West Coast port and at least one oil and gas pipeline, people familiar with the incidents told The Washington Post. The hackers also attempted to break into the operator of Texas’s power grid, which operates independently from electrical systems in the rest of the country.

Several entities outside the United States, including electric utilities, also have been victimized by the hackers, said the people, who spoke on the condition of anonymity because of the matter’s sensitivity.

None of the intrusions affected industrial control systems that operate pumps, pistons or any critical function, or caused a disruption, U.S. officials said. But they said the attention to Hawaii, which is home to the Pacific Fleet, and to at least one port as well as logistics centers suggests the Chinese military wants the ability to complicate U.S. efforts to ship troops and equipment to the region if a conflict breaks out over Taiwan.

These previously undisclosed details help fill out a picture of a cyber campaign dubbed Volt Typhoon, first detected about a year ago by the U.S. government, as the United States and China struggle to stabilize a relationship more antagonistic now than it has been in decades. Chinese military commanders refused for more than a year to speak to American counterparts even as close-call intercepts by Chinese fighter jets of U.S. spy planes surged in the western Pacific. President Biden and Chinese President Xi Jinping agreed only last month to restore those communication channels.

“It is very clear that Chinese attempts to compromise critical infrastructure are in part to pre-position themselves to be able to disrupt or destroy that critical infrastructure in the event of a conflict, to either prevent the United States from being able to project power into Asia or to cause societal chaos inside the United States — to affect our decision-making around a crisis,” said Brandon Wales, executive director of the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA). “That is a significant change from Chinese cyber activity from seven to 10 years ago that was focused primarily on political and economic espionage.”

Morgan Adamski, director of the National Security Agency’s Cybersecurity Collaboration Center, confirmed in an email that Volt Typhoon activity “appears to be focused on targets within the Indo-Pacific region, to include Hawaii.”

The hackers often sought to mask their tracks by threading their attacks through innocuous devices such as home or office routers before reaching their victims, officials said. A key goal was to steal employee credentials they could use to return, posing as normal users. But some of their entry methods have not been determined.

The hackers are looking for a way to get in and stay in without being detected, said Joe McReynolds, a China security studies fellow at the Jamestown Foundation, a think tank focused on security issues. “You’re trying to build tunnels into your enemies’ infrastructure that you can later use to attack. Until then you lie in wait, carry out reconnaissance, figure out if you can move into industrial control systems or more critical companies or targets upstream. And one day, if you get the order from on high, you switch from reconnaissance to attack.”

The disclosures to The Post build on the annual threat assessment in February by the Office of the Director of National Intelligence, which warned that China “almost certainly is capable” of launching cyberattacks that would disrupt U.S. critical infrastructure, including oil and gas pipelines and rail systems.

“If Beijing feared that a major conflict with the United States were imminent, it almost certainly would consider undertaking aggressive cyber operations against U.S. homeland critical infrastructure and military assets worldwide,” the assessment said.

Some of the victims compromised by Volt Typhoon were smaller companies and organizations across a range of sectors and “not necessarily those that would have an immediate relevant connection to a critical function upon which many Americans depend,” said Eric Goldstein, CISA’s executive assistant director. This may have been “opportunistic targeting ... based upon where they can gain access” — a way to get a toehold into a supply chain in the hopes of one day moving into larger, more-critical customers, he said.

Chinese military officers have described in internal documents how they might use cyber tools or “network warfare” in a conflict, said McReynolds, who has seen some of the writings. He said military strategists speak of synchronizing air and missile strikes with disruption of command-and-control networks, critical infrastructure, satellite networks and military logistics systems.

They have talked about these tools applying in amphibious invasions, he said. “This is stuff they pretty clearly see as relevant to a Taiwan scenario,” he said, “though they don’t explicitly say this is how we’re going to take over Taiwan.”

This is far from China’s first foray into hacking critical infrastructure. In 2012, a Canadian company, Telvent, whose software remotely operated major natural gas pipelines in North America, notified customers that a sophisticated hacker had breached its firewalls and stolen data relating to industrial control systems. The cybersecurity firm Mandiant traced the breach to a prolific PLA hacking group, Unit 61398. Five members of the unit were indicted in 2014 for hacking U.S. companies.

At the time, the U.S. government wasn’t sure whether China’s aim was to collect intelligence or pre-position itself to disrupt. Today, based on intelligence collection and the fact that the facilities targeted have little intelligence of political or economic value, U.S. officials say it’s clear that the only reason to penetrate them is to be able to conduct disruptive or destructive actions later.

Threat researcher Jonathan Condra of security company Recorded Future — which during the summer found Volt Typhoon probing the Texas grid — said the secrecy with which the Chinese have conducted the attacks argues against any notion that they wanted the United States to know their capabilities.

The hackers “were doing this a lot more stealthily than if they were trying to get caught,” he said.

The U.S. government has long sought to improve coordination with the private sector, which owns most of the nation’s critical infrastructure, and with tech companies that can detect cyberthreats. Companies such as Microsoft share anonymized information about adversary tactics, indicators that a system has been compromised, and mitigations, said CISA’s Goldstein. Generally, these companies are not seeing the hacker’s presence within the customers’ networks, but rather are detecting it through communications to the servers the hacker is using to direct the attack, he said.

In some cases, the victims themselves seek assistance from CISA. In others, Goldstein said, CISA is alerted by a software or communications vendor to a victim and the government must seek a court order to compel the vendor to reveal the victim’s identity.

In May, Microsoft said it had found Volt Typhoon infiltrating critical infrastructure in Guam and elsewhere, listing a number of sectors. Those included telecommunications firms, according to people familiar with the matter. The hacks were especially concerning, analysts said, because Guam is the closest U.S. territory to the contested Taiwan Strait.

The intrusions into sectors like water and energy systems come as the Biden administration has sought to strengthen industries’ ability to defend themselves by issuing mandatory cybersecurity rules. In the summer of 2021, the administration rolled out first-ever oil and gas pipeline cyber regulations. In March, the Environmental Protection Agency announced a requirement for states to report on cyberthreats in their public water system audits. Soon after, however, three states sued the administration, charging regulatory overreach.

The EPA pulled back the rule and has asked Congress to act on a regulation. In the meantime, the agency must rely on states to report threats voluntarily.

In a joint advisory issued in May, the Five Eyes intelligence alliance of the United States, Britain, Canada, Australia and New Zealand offered advice on how to hunt for the intruders. One of the challenges is the hackers’ tactic of evading detection by firewalls and other defenses by using legitimate tools so that the hackers’ presence blends in with normal network activity. The technique is called “living off the land.”

“The two toughest challenges with these techniques are determining that a compromise has occurred, and then once detected, having confidence that the actor was evicted,” said the NSA’s Adamski, whose Cybersecurity Collaboration Center coordinates with private industry.

The NSA and other agencies recommend mass password resets and better monitoring of accounts that have high network privileges. They have also urged companies to require more secure forms of multifactor authentication, such as hardware tokens, rather than relying on a text message to a user’s phone, which can be intercepted by foreign governments.

Despite the heightened scrutiny growing out of the May advisory, the hackers persisted, seeking new targets.

In August, according to Recorded Future, the hackers attempted to make connections from infrastructure that had been used by Volt Typhoon to internet domains or subdomains used by the Public Utility Commission of Texas and the Electric Reliability Council of Texas, which operates that state’s electric grid. Though there is no evidence the attempts succeeded in penetrating the system, the effort highlights the kinds of targets the Chinese military is interested in. The two Texas agencies declined to answer questions about the incidents from The Post.

The Reliability Council said it works closely with federal agencies and industry groups and that it has redundant systems and controlled access as part of a “layered defense.”

In the weeks leading up to the Biden-Xi meeting last month, NSA officials speaking at industry conferences repeated the call to the private sector to share information on hacking attempts. The NSA can peer into adversaries’ networks overseas, while U.S. companies have visibility into domestic corporate networks. Together, industry and government can have a fuller picture of attackers’ goals, tactics and motives, U.S. officials say.

China “is sitting on a stockpile of strategic” vulnerabilities, or undisclosed security flaws it can use in stealthy attacks, Adamski said last month at the CyberWarCon conference in Washington. “This is a fight for our critical infrastructure. We have to make it harder for them.”

The topic of Chinese cyber intrusions into critical infrastructure was on a proposed list of talking points to raise in Biden’s encounter with Xi, according to people familiar with the matter, but it did not come up in the four-hour meeting.

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Whistleblowing doctor who revealed China’s AIDS epidemic dies at 95

https://www.washingtonpost.com/world/2023/12/11/gao-yaojie-china-aids-obituary/2023-12-11T03:07:09.395Z

Gao Yaojie, a doctor exiled from China under pressure from authorities after she exposed an AIDS epidemic in the 1990s, died at her home in New York on Sunday, little more than a week before her 96th birthday.

Gao, a retired gynecologist, gained international acclaim when she uncovered a blood collection program as the locus of an AIDS epidemic that ultimately contributed to tens of thousands of deaths, largely among poor farmers in rural China.

Her refusal to keep quiet about the scale of what she termed a “man-made catastrophe” drew accolades abroad and censure from Chinese officials.

China bars AIDS activist from traveling despite talk of ending discrimination

Well into her 70s, Gao was regularly chased out of villages across Henan province, where she insisted infection rates had skyrocketed because of the blood collection program and worked to educate people about the spread of AIDS while officials denied the existence of the outbreak.

She was heralded for her activism by Secretary of State Hillary Clinton but was put under surveillance in China and lived for years under house arrest before escaping to New York in 2009.

The only way she would return to China was as ashes, she predicted.

From her exile in New York, Gao continued to lobby on behalf of those infected while contending with her own health conditions that left her with difficulty eating and breathing.

Gao was frequently visited by a circle of Chinese supporters, according to Andrew J. Nathan, a professor of political science at Columbia University, who managed her affairs in the United States.

“She was a hero to them, very deeply respected and admired,” said Nathan, who confirmed her death.

After her experiences in China, Gao was wary of surveillance and vigilant that her voice not be co-opted for other causes. She was adamant that she not be viewed as aligned with other anti-Communist Party activists.

After living through decades of change and challenge, telling the truth about the AIDS epidemic was her only goal, she said.

Gao was born in Shandong province in 1927 and lived with physical reminders of the cataclysmic transformations that engulfed China over the past century. She walked with a limp after her feet were bound for several years as a child. She lived through the Japanese invasion of China, the civil war that delivered the Communist Party to victory, and hunger during the famine that followed. A beating during the Cultural Revolution permanently damaged her stomach.

Gao’s discovery of the extent of the epidemic in Henan began in 1996 when she examined a patient suffering from otherwise unexplained complications after surgery. The patient tested positive for AIDS and had recently received a transfusion from a blood bank.

Gao knew infection rates were on the rise, and determining the blood bank as the source made her realize the scale of infection was probably far greater than reported. The blood collection programs had been promoted by the government and were frequented by farmers selling their blood to supplement their incomes. Many collection points reused needles and mixed donors’ blood, and infection quickly spread.

Shuping Wang, whistleblower who exposed China’s HIV/AIDS crisis, dies at 59

Officials suppressed reporting about the scale of the epidemic. Gao defied the narrative and traveled to villages across Henan distributing AIDS prevention guides.

“I am not afraid of death,” she wrote in a 2020 essay. “What I am afraid of is that the real information on the AIDS epidemic in China will be forgotten.”

Chinese social media was awash with posts mourning Gao on Monday.

Some likened her to other whistleblowing doctors who refused to stay silent, including Li Wenliang, the Wuhan doctor who died within weeks of spreading the news about the coronavirus pandemic in early 2020.

Chinese doctor who tried to raise alarm on coronavirus in Wuhan dies on ‘front line’ of medical fight

“They are heroes of our nation. They did not get the honor they deserved but were suppressed,” said one post on Weibo.

Lin Shiyu, who cared for Gao early in her time in the United States and wrote a book about her life, said that, with the doctor’s passing, “we have lost a kind grandmother and a ballast stone of the nation.”

“I have not done anything extraordinary,” said Gao in a 2019 video address at the launch of Lin’s book. “What I have done is what everyone should do.”

Pei-Lin Wu contributed to this report.

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‘No way out’: JD.com founder Richard Liu warns staff not to ‘lie flat’ as China’s e-commerce incumbents fall behind PDD

https://www.scmp.com/tech/big-tech/article/3244664/no-way-out-jdcom-founder-richard-liu-warns-staff-not-lie-flat-chinas-e-commerce-incumbents-fall?utm_source=rss_feed

JD.com founder and chairman Richard Liu Qiangdong has urged his staff to take more proactive actions to fend off competition and fix management problems or else there would be “no way out” for the e-commerce giant.

The Chinese billionaire entrepreneur made those comments in a a thread on JD.com’s internal discussion board, where an employee listed out major challenges faced by the company, including inadequate support for third-party vendors and insufficient supply of low-price products on the platform.

In response, 50-year-old Liu, who helmed JD.com as CEO from its founding in 1998 until early 2022, agreed that the issues were real, but added that the firm still has a solid foundation to turn around and urged staff not to “lie flat”, or – a Chinese term that means refusing to work too hard.

“So many issues have emerged, certainly because I mismanaged,” Liu wrote. “I blame myself for it.” He added that he would not “lie fat”, although it would take time to make changes at a company that was “large, unwieldy and inefficient”.

Liu’s remarks were first reported by Chinese media LatePost. A person familiar with the matter confirmed the veracity of the content to the Post.

Some analysts believe that JD.com is plagued by issues such as a relatively small user pool compared to its rivals, high operating costs owing to its positioning as a high-quality service provider, and a complicated organisational structure that hinders strategy implementation, according to Zhuang Shuai, founder and chief analyst at e-commerce consultancy Bailian.

Liu’s rallying call comes weeks after Alibaba Group Holding’s retired founder Jack Ma left a comment on the company’s internal forum, praising rival Pinduoduo and calling on staff to embrace change. “I firmly believe that Alibaba will change and adapt,” he wrote.

Both Alibaba and JD.com have taken a hit from China’s unstable economic recovery, with consumers cutting back on discretionary spending.

This year’s Singles’ Day online shopping festival saw only a 2 per cent sales increase from last year, much slower than the double-digit growth in 2022, according to data compiled by market consultancy Syntun.

In the September quarter, JD.com and Alibaba posted revenue growth of 1.7 per cent and 9 per cent, respectively. In comparison, PDD Holdings, owner of Pinduoduo, nearly doubled its revenue, helped by the budget retail platform’s low-price strategy and its fast-rising overseas platform Temu.

While revenue at Alibaba, owner of the South China Morning Post, was still about three times larger than that of PDD, investors betting on Pinduoduo’s growth prospects have driven up the shares of its US-listed parent, whose market capitalisation surpassed that of Alibaba as of market close on Friday.

JD.com’s Liu said he trusted that the company would be able to alter its course.

“Any person or company will go through peaks and troughs on their way to greatness,” he wrote.

Since late last year, Liu has been urging JD.com to cut product prices. The company, which had traditionally been conservative with taking on third-party vendors, has been courting smaller merchants to sell more affordable goods on its platform.

That strategy may eventually pose a conundrum for JD.com, as it tries to retain its premium reputation while catering to price-conscious shoppers, according to Li Chengdong, founder of market consultancy Dolphin.

“The measures JD.com has taken so far will not yield results in the short-term,” he said.

China’s grain harvest hits record high amid food security drive, helped by 16% increase from Xinjiang

https://www.scmp.com/economy/economic-indicators/article/3244665/chinas-grain-harvest-hits-record-high-amid-food-security-drive-helped-16-increase-xinjiang?utm_source=rss_feed

China’s grain output increased to a record high again this year amid Beijing’s agricultural push that has seen growing areas expanded in a western region traditionally known for its cotton production.

The world’s biggest crop producer and consumer produced 695.41 million tonnes of grain in 2023, marking a 1.3 per cent increase from last year, the National Bureau of Statistics (NBS) said on Monday.

The bumper grain harvest was, according to Wang Guirong, director of the Rural Affairs Department at the NBS, the result of local government efforts to tackle extreme weather events, including serious flooding in the north and northeast during the summer and unusual heavy rains that battered large areas of wheat in central China in the spring.

China’s grain output has climbed over the past two decades, and has remained above 650 million tonnes for the last nine years since 2015.

Beijing’s increasing emphasis on food security amid worsening climate change and an uncertain global market, though, has pushed local governments to further keep land available for farming and improve agricultural yields.

But the Xinjiang Uygur autonomous region, which traditionally contributes to the bulk of China’s cotton production but not food due to a lack of water, saw a growth of over 16 per cent in terms of planting area and output in 2023 compared with last year.

“That was mainly driven by improvement in water-saving agriculture,” said Professor Zheng Fengtian from Renmin University’s School of Agricultural Economics and Rural Development.

Xinjiang could offer a solution to increased crop-sowing acreage as China seeks continuous growth in food production, “as long as it can boost water utilisation efficiency”, he added.

Meanwhile, as China attempts to boost self-sufficiency amid a heavy reliance on imports, China’s soybean harvest in 2023 grew by 2.8 per cent from last year to 20.84 million tonnes.

China’s domestic production, though, remains relatively small compared to the 91 million tonnes of soybeans it imported in 2022, according to customs data.

Partly due to a slight drop in the acreage and output of rice, China has grown more than 10 million hectares (25 million acres) of soybeans for each of the last two years due to incentives offered to farmers, Wang said.

But it has long been accepted by officials that China’s soybean yield per unit lags behind the world average.

Amid continued efforts to feed its 1.4 billion population, China has always placed strategic importance on food security.

But Beijing made it a top priority in recent years to guard against volatility in global food supply chains due to tensions with the West and the war in Ukraine.

“China’s potential in planting area and production are nearing the limit,” said Renmin University’s Zheng.

And in the coming decades, it would have to rely on advancements in breeding technology, in which China has invested huge funds since 2021, for further growth, he added.

‘Spoilt pest’: abusive China teen girl threatens to stab bus passengers who refuse to offer her seat despite back pain claim, gets scolded

https://www.scmp.com/news/people-culture/trending-china/article/3243992/spoilt-pest-abusive-china-teen-girl-threatens-stab-bus-passengers-who-refuse-offer-her-seat-despite?utm_source=rss_feed

A teenage girl in China who cursed and threatened passengers on a crowded bus, and shouted, “I’ll stab you”, after failing to get a seat has ignited a storm of criticism on mainland social media.

The incident took place on December 2 in Shanghai, when the girl, who was wearing a school uniform and carrying a backpack, could not find a seat on the bus.

As soon as she boarded the crowded bus, she started filming with her mobile phone and noted: “There’s not a single available seat.”

The student’s fury escalated when a passenger, who had given her seat to an elderly woman, accidentally touched her backpack

She shouted: “Are you crazy? You just touched my bag. Idiot!”

To which the passenger responded: “When you call others idiots, you might be the one who’s an idiot.”

The retort intensified the teenager’s anger and she threatened: “I’ll stab you!” And she continued her aggressive demand for a seat.

“Hurry up, and let me sit down. My back isn’t in a good condition,” she screeched.

Another female passenger attempted to intervene and said: “If your back hurts, go home and tell your mum. Your parents probably spoil you at home, but nobody will tolerate your behaviour outside.”

This further agitated the girl, who shouted: “I’m not happy, I’ll kill you!”

An elderly man tried to calm her by saying: “Don’t speak like that. Children should be polite.”

The student retorted: “Move away as far as you can! My freaking back hurts!”

When a woman offered her seat to the elderly man, the student grabbed it and repeated the claims about her back pain.

While seated, she called her mother, tearfully complaining about being insulted and about the “unfair treatment”, exclaiming: “They insulted me. They called me a psychopath. They said I’m a ‘pest’.”

The incident sparked a wave of online anger, with commenters criticising the girl’s behaviour and questioning her upbringing.

“The passengers are correct. She is definitely a ‘pest,’ no doubt about it,” commented one online observer.

“How could parents raise a daughter who behaves so badly? When she enters the workplace, she’ll face even more challenges and suffering with that attitude,” warned another.

“A teenager threatening to stab other people? So frightening,” a third said.

“She might have bipolar disorder. She should see a doctor soon,” another concerned commenter said.

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China cracks down on theft of geographic data, warning of national security threat

https://www.scmp.com/news/china/politics/article/3244672/china-cracks-down-theft-geographic-data-warning-national-security-threat?utm_source=rss_feed

China’s security authorities have kicked off a national inspection to crack down on theft of data from geographic information systems, warning that these data leaks pose a threat to national security.

The Ministry of State Security said security authorities are conducting the inspection to cut off perpetrators and guide and assist in investigations to “promptly eliminate security risks of major data theft and data leaks”.

In an article posted to its WeChat account on Monday, the ministry said security organs had found cases in which foreign geographic information system (GIS) software used in important industries had collected and transferred data.

“Some of the data is important and sensitive, and even involves state secrets, posing a serious threat to our national security,” it said, without naming specific GIS software.

Cyber dangers threaten China’s infrastructure, state security chief warns

The ministry noted that as information technology advances, GIS data is both “an important strategic data resource” and “a new production factor” that has been widely applied in industry and everyday life.

“However, some organisations and individuals with ulterior motives have made use of GIS software in an attempt to steal classified and sensitive geographic data, posing threats and hidden dangers to national security,” it said.

In recent years, Chinese authorities have stressed the need to tighten control over cybersecurity and have repeatedly highlighted data leaks as one of the growing risks.

Beijing has scaled up its anti-espionage efforts this year, with warnings over the unauthorised acquisition of “documents, data, materials and items related to national security and interests”.

In the Monday article, the ministry noted that “geographic data is classified as high-value intelligence and is a key target for foreign spy agencies in their intelligence theft efforts”.

It said high-precision geographic information could be used to recreate 3D maps related to the country’s transport systems, energy and the military.

This could provide “crucial support for reconnaissance, surveillance and military operations, posing a serious threat to our military security”, it said.

The article said “certain foreign organisations, institutions, and individuals … are attempting to conduct intelligence theft activities using GIS software” through methods including “automatically connecting the software to foreign servers to collect user data without restrictions”.

It also warned users who use GIS software to identify the coordinates of infrastructure, military targets and entities related to classified information, noting that this “creates serious risks of leaks that could result in irreparable losses”.

Citing China’s Data Security Law, implemented in September 2021 to limit the ways data can be processed, the article urged individuals and companies to choose secure and reliable GIS software when collecting and processing geographical information.

They should also set up strict permission for access in accordance with the level of importance of the data, it said.

China issues most wanted list in latest bid to clamp down on Myanmar’s sprawling cybercrime industry

https://www.scmp.com/news/china/article/3244648/china-issues-most-wanted-list-latest-bid-clamp-down-myanmars-sprawling-cybercrime-industry?utm_source=rss_feed

Police in China have issued a most wanted list for 10 alleged ringleaders of telecoms and online fraud gangs that includes businesspeople and a former politician.

The people, from northern Myanmar’s Kokang Self-Administered Zone, belong to three “family crime syndicates”, as well as another gang involved in online fraud targeting Chinese citizens, the Ministry of Public Security said on its website on Sunday.

The gangs were suspected of violent crimes including intentional homicide, intentional injury and unlawful detention, according to the ministry.

Three of the people on the list are members of the Bai family, reported by Chinese media to be one of Kokang’s “four big families”, who are wanted by authorities in the northeastern province of Liaoning. The head of the family, 74-year-old Bai Suocheng, a former leader of the Kokang region, is wanted along with his son and daughter.

Other wanted individuals belonged to the Wei and Liu families – both known crime families according to the police – who were wanted by authorities in the southeastern province of Fujian.

Police in the southwestern city of Chongqing were looking for another individual, Xu Laofa, who was believed to be leading another scam ring.

Authorities offered cash rewards of 100,000 to 500,000 yuan (US$14,00 to US$70,000) for “information and assistance” leading to arrests.

The wanted list was Beijing’s latest move to ramp up pressure on Myanmar’s military government to crack down on the country’s massive cybercrime industry.

The northern Myanmar region that borders China’s southwestern province of Yunnan has become a base for cyber fraud operations which have reportedly swindled and trapped hundreds of thousands of people from China.

Is it the beginning of the end for Myanmar’s junta?

The area, which has close cultural and political ties to China, has lured Chinese people who were attracted to investment schemes and promises of love or employment, who are then trapped and forced to work in the cyber scams.

An August report by the Office of the United Nations High Commissioner for Human Rights said at least 120,000 people in conflict-ridden Myanmar and about 100,000 in Cambodia “may be held in situations where they are forced to carry out online scams”.

Forced cybercrimes included online romance scams, sham crypto schemes and illegal gambling, in which the victims endured “inhumane treatment”, the report said.

Chinese authorities were forced to step up their crackdown in the region after news of forced labour and online fraud hit the headlines in the summer. They have repeatedly promised to crack down on online fraud.

China vows closer Mekong security ties amid cyber scams, Myanmar unrest

Last month, Chinese police issued a warrant for four members of Kokang’s Ming family, accusing them of being a crime syndicate running major telecoms scams targeting Chinese nationals.

A few days later, Ming Xuechang, the leader of the clan, died by suicide and three of his relatives were detained by Chinese police, according to state news agency Xinhua.

Also last month, Myanmar handed over 31,000 suspected telecoms fraudsters to China, including several accused ringleaders.

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Prostitute prank: suspicious woman in China ends up in custody after calling police to claim innocent boyfriend was with sex worker at massage shop

https://www.scmp.com/news/people-culture/trending-china/article/3243893/prostitute-prank-suspicious-woman-china-ends-custody-after-calling-police-claim-innocent-boyfriend?utm_source=rss_feed

A suspicious woman in China who was angry with her boyfriend for not answering her calls tried to get back at him by making a prank call to the police claiming he was visiting a prostitute.

However, the woman’s revenge attempt backfired after she was detained for fabricating facts and disturbing the public order, Xingmu Video reported.

The girlfriend, surnamed Yue, was put under administrative detention by Shanghai police.

Earlier this month, she called the police station with a “tip off” that sex trade activities were taking place in a foot massage parlour and that her boyfriend was one of the customers.

However, when officers arrived they found the premises were closed.

Officers contacted Yue’s boyfriend, surnamed Song, and he told them he was having dinner with colleagues at a restaurant next door.

Yue then admitted she had made a fake report, adding that Song had told her he planned to go out with his colleagues that evening.

When she became agitated after her calls had gone unanswered, she then checked his location services and found that he was at the foot massage parlour.

The woman, who was drinking alcohol at home alone, became convinced her boyfriend was hiring a prostitute.

It is not clear how long she spent in police custody, the report said.

The story was met with derision and criticism on mainland social media.

“If I were the man, I would leave her. Such a control freak,” said one person on Douyin.

“If you don’t trust him, don’t stay together. What’s more, you have wasted police resources,” said another user.

“Now the man has total freedom for several days. He can do whatever he wants, haha,” quipped another.

Cases of false reporting to the police are not uncommon in China.

In July, three boys, all under 14 years old, made a bet and called the police in the southern Guangxi Zhuang autonomous region, to make a false report saying that someone was drowning in a lake.

Their prank call led to a two-hour search by 40 police officers and firefighters.

Later the boys admitted to their prank call. Police reprimanded them before releasing them due to their young age.

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COP28 tackles climate finance and recognises China’s crucial role in advancing the energy transition

https://www.scmp.com/presented/news/people-culture/environment/topics/rethinking-climate-agenda/article/3244615/cop28-climate-finance?utm_source=rss_feed

Ambassador Majid Al Suwaidi, director general of the 28th Conference of the Parties of the United Nations Framework Convention on Climate Change (COP28), has delivered a compelling call to action for developed countries to unite in mobilising capital to support emerging markets in their transition to clean energy.

Held from November 30 to December 12 in the United Arab Emirates (UAE), COP28 addressed the first Global Stocktake (GST) under the Paris Agreement, which evaluates progress towards climate goals and establishes an ambitious action plan. The COP28 Presidency aims to deliver a robust decision on the GST with a strong mitigation outcome, a comprehensive adaptation agreement, and groundbreaking solutions on climate finance that are more available, affordable and accessible.

Fixing climate finance is one of the key pillars of the COP28 Presidency, and in the first few days of the conference, it established a significant standard for achievement, generating momentum, traction, positivity and excitement. To date, the COP28 Presidency has operationalised the Loss and Damage Fund and capitalised it with US$790 million, launched the world’s largest private-market investment climate finance vehicle with US$30 billion, brought 50 national and international energy companies together around ambitious decarbonisation targets, seen 130 countries sign its renewable energy and efficiency pledge, and secured the largest-ever replenishment of the Green Climate Fund with US$12.8 billion. And this is before the conference has even concluded.

On December 4, major international financial institutions and countries made new commitments to offer climate-resilient debt clauses (CRDCs) in their lending. These clauses allow debt service to be paused in order to provide breathing space when countries are hit by climate catastrophes. The UAE has committed US$200 million to help low-income and vulnerable countries.

On top of that, parties have rallied around a number of pledges and declarations to get the world moving in the right direction. The COP28 Presidency is the first to actively call on parties to come forward with language on all fossil fuels for the negotiated text.

The COP28 Presidency also brought the US and China together in an unprecedented commitment to an economy-wide reduction of methane and other non-CO2 gasses. These gasses are over 80 times more damaging than CO2. Tackling methane will have a massive near-term impact on keeping the global warming threshold of 1.5 degrees Celsius (2.7 degrees Fahrenheit) within reach.

As a regional green finance hub, China is spearheading Asia’s response to the GST. On December 8, COP28’s Hong Kong Climate Day, an event led by the Hong Kong Ambassadors Club and curated by Wang Shi, founder of DeepRock Group, featured presentations from prominent Chinese business leaders. They covered topics ranging from financing climate-proof technologies to the role of next-generation family offices and technology entrepreneurs.

It is hoped that strategic alliances and partnership agreements will be signed to contribute towards the call for developed countries to pledge US$100 billion annually in climate financing for emerging markets.

Watch the video to learn more about the role of climate finance at COP28.

Exiled China Aids activist Gao Yaojie has died in New York, aged 95

https://www.scmp.com/news/china/politics/article/3244633/exiled-china-aids-activist-gao-yaojie-has-died-new-york-aged-95?utm_source=rss_feed

China’s most prominent Aids activist Gao Yaojie, who exposed the “plasma economy” that led to an epidemic of the disease in Henan province in the 1990s, has died in New York. She was 95.

Gao’s death on Sunday was confirmed by Andrew J. Nathan, the Columbia University political science professor who helped her during the years of exile from China, which she left in 2009.

Gao struggled in later years with spreading thrombosis, which made it difficult to walk without support.

Despite her declining health, Gao devoted her years in New York – where she lived in a one-bedroom Manhattan flat – to writing books about China’s handling of the Aids crisis.

Gao lost part of her stomach during the Cultural Revolution and could hardly eat anything but noodles and buns. Her hearing was also impaired and she spoke loudly with the heavy accent of her native Henan in central China.

After she was hospitalised for a week with pneumonia in 2016, Gao went online to express her wish to be cremated after death, and her ashes scattered on the Yellow River.

Chinese blood plasma ‘clear’ of HIV as authorities give mixed messages

“I do not want what I have worked for and achieved in this life to become a tool for others to gain fame and profit,” she wrote.

Gao’s fight against Aids began in 1996, after her retirement as a respected gynaecologist in Zhengzhou, the provincial capital of her native Henan.

Her interest was sparked when she took part in a consultation for a woman who had not recovered after surgery. The symptoms struck Gao as similar to the books she was reading on Aids, although sexual transmission was ruled out.

Gao’s investigation revealed the patient had contracted the disease from a transfusion during the operation. She realised that even professionals like herself had neglected the fact that Aids could also be spread by blood transmission.

The realisation spurred Gao to take on a new career at the age of 69, as a campaigner for people with HIV-Aids which was ravaging Henan in the 1990s.

Poor sex education the main cause of HIV spread in China

Estimates vary on the size of Henan’s epidemic, from 50,000 to hundreds of thousands, and even 1 million. Government data in 2004 put the number affected in the central Chinese province as 25,000 people with HIV and 11,000 with Aids.

Gao’s campaign took her to dozens of villages in Henan and it became increasingly clear to her that illegal blood collection stations and unsanitary transfusion practices were driving the epidemic.

Plasma imports were banned by China in the 1980s but the high demand – driven by the booming biomedicine industry – led to the rise in Henan of a hidden economy in the blood product.

Dealers eager to make quick money and ignorant of the consequences – sometimes with the encouragement of local officials – collected blood from donors which was pooled into a central collection point where the plasma was extracted.

12,000 Chinese blood plasma treatments contaminated with HIV

The rest of the blood was pumped back to the donors so they could recover sooner and donate more often. Once HIV had contaminated the pool it quickly spread.

Gao spent her own money on an educational campaign, printing 670,000 leaflets across Henan, paid for from her earnings writing articles, giving lectures and winning awards.

She also spoke out against the plasma economy and criticised the local government for covering it up. Gao’s findings were reported by some investigative journalists in China and made international headlines.

When then vice-premier Wu Yi, who also headed the health ministry, visited Henan she met Gao and said she had been told HIV was only transmitted sexually and through drug use. “They lied to you!” was Gao’s response.

Wu visited several villages where Aids patients had become infected from their involvement in the plasma economy. After her visit, China officially recognised the existence of blood-transmitted HIV and began an unprecedented survey into the Henan epidemic.

Gao’s interest in the welfare of Aids patients made her home a popular hang-out for people with the disease, as well as activists and educators. She gave tens of lectures every year and continued to send leaflets to support groups. Gao also paid for medicines and helped to support Aids orphans.

But Gao’s work estranged her family. Her three children did not support her efforts and one of her daughters lost her job in the health sector after Gao’s expose.

Gao’s husband, who was also a doctor and tolerant of her retirement activities, took over the family finances and gave her only an allowance after Gao spent her award money and family savings on helping Aids patients and orphans.

In an interview with People.com.cn, Gao said she had spent more than 200,000 yuan (US$28,000) on the Aids educational campaign, and all her prize money from the United Nations, Health and Human Rights and the Ford Foundation.

Gao’s awards included a 2007 honour from the Vital Voices Global Partnership, a non-profit women’s advocacy group, but while her outspokenness contributed to China’s fight against HIV, she also upset local officials, who were embarrassed by the exposure.

She was barred from leaving the country to accept the award until the vice-premier Wu Yi intervened at the request of then senator Hillary Clinton.

But Gao was also constantly harassed, with local agents following her and watching her movements. At one point, her phone line was cut. Worried for her freedom, and trying not to implicate her children, Gao left China in 2009 for the US. Her husband had died three years earlier from throat cancer.

Gao was supported in her first year in the US by a visiting scholarship from the University of Columbia and later through private donations. A group of Chinese students took turns to visit Gao, helping her type notes and edit her manuscripts.

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Malaysia’s coffin homes, China’s rail gun, 2024 travel recommendations: 5 weekend reads you may have missed

https://www.scmp.com/news/world/article/3244583/malaysias-coffin-homes-chinas-rail-gun-2024-travel-recommendations-5-weekend-reads-you-may-have?utm_source=rss_feed

We have put together stories from our coverage last weekend to help you stay informed about news across Asia and beyond. If you would like to see more of our reporting, please consider .

Mainland China’s Li Ning buys Henderson Land’s Harbour East for US$282 million to house its Hong Kong headquarters

https://www.scmp.com/business/article/3244619/mainland-chinas-li-ning-buys-henderson-lands-harbour-east-us282-million-house-its-hong-kong?utm_source=rss_feed

Li Ning, China’s biggest sportswear manufacturer, bought a 25-storey mixed office and retail building in North Point from Henderson Land for HK$2.2 billion (US$282 million), to house its headquarters in Hong Kong, in what is seen as a shot in the arm for the city’s slowing office property market.

Li Ning’s acquisition of the property comes at a challenging time for Hong Kong’s property sector, particularly the office segment, which is grappling with record-high vacancy rates.

The building, known as Harbour East, houses retail tenants such as Five Guys, Frites, Pacific Coffee and Subway, and has a total land area of about 9,600 sq ft and a gross floor of about 144,000 square feet. The building includes 22 storeys of office space and two storeys of retail areas.

“The purchase of the property for use as Hong Kong headquarters of the group via the acquisition demonstrates the group’s confidence in its business prospects in Hong Kong and marks the implementation of its plan to strengthen its business development internationally,” the company said in a filing with the Hong Kong exchange late on Sunday.

“The board believes that the development potential of the group’s business in Hong Kong is substantial,” the filing said.

Li Ning’s purchase emerges amid declining office rents in one of the world’s priciest property markets.

Two creative ways for Hong Kong to keep its property market on an even keel

In October, average monthly rent per square foot for Hong Kong offices declined by 0.5 per cent to HK$52.60 per square foot, according to property consultant JLL.

Although, overall vacancy rate dropped to 12.6 per cent from 12.7 per cent in September, those for office properties in certain Hong Kong Island neighbourhoods, like the Central district, edged up to 9.8 per cent from 9.6 per cent while those in the eastern part of the Hong Kong Island rose to 13.3 per cent from 13.1 per cent in the previous month, JLL said.

“This is good news for the capital markets as investors have been quiet for a while,” said Martin Wong, director and head of research and consultancy for Greater China at Knight Frank. “Given that the current interest rate is still at a high level, cash buyers would be more likely to make a move, especially on distressed assets.”

However, Li Ning’s optimism about its prospects in Hong Kong was not shared by the stock market, and its shares fell 15 per cent to HK$18.12 as of 11am. So far this year, the stock has fallen nearly 74 per cent as the company struggled with slowing sales.

“The performance of its shares had nothing to do with its purchase of a property in Hong Kong,” said Louis Tse Ming-kwong, managing director of brokerage Wealthy Securities. “It is a good time to buy a property to build their headquarters in Hong Kong. I would say it is because other mainland Chinese brands have become more competitive amid a slowing economy.”

Tse added that there was no “impetus” for consumers to buy Li Ning products.

“Li Ning has been trying to clear their inventory and they are reducing their prices but you cannot buy running shoes every day,” he said. “If you buy a pair of running shoes today, you will not be buying them again next month. I do not see any new sales strategy for the brand to get more market share.”

Last year, Li Ning leased a 7,000 sq ft shop on Canton Road for HK$2 million a month, which was billed as its first flagship store in Hong Kong.

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South China Sea: Philippines summons Chinese envoy, ‘undeterred’ by ‘provocations’, Marcos Jnr says

https://www.scmp.com/news/asia/southeast-asia/article/3244606/south-china-sea-philippines-undeterred-chinese-aggression-provocations-marcos-jnr-says?utm_source=rss_feed

Philippine President Ferdinand Marcos Jnr has slammed China’s “dangerous actions” against Manila’s ships in the South China Sea over the past two days including ramming a Filipino boat, saying they’re an “outright and blatant violation of international law”.

“The aggression and provocations perpetrated by the China Coast Guard and their Chinese maritime militia against our vessels and personnel over the weekend have only further steeled our determination to defend and protect our nation’s sovereignty, sovereign rights, and jurisdiction in the West Philippine Sea,” Marcos said in a post on X late on Sunday, using Manila’s term for the parts of the South China Sea within the country’s exclusive economic zone. “We remain undeterred,” he added.

On Monday, Manila’s National Security Council spokesman Jonathan Malaya said China’s “aggressive” actions against Philippine vessels in the South China Sea were a “serious escalation” on the part of Beijing’s agents, adding that China’s claim that the United States is fuelling the Philippines’ audacity for provocation has no basis.

The Philippines said its vessels were damaged after being “directly targeted” on Sunday by a Chinese coastguard ship with a water cannon during a supply mission to Second Thomas Shoal. Manila also reported that the Chinese coastguard fired water cannons on Saturday at Filipino civilian ships near Scarborough Shoal, drawing US condemnation.

Marcos Jnr said he was in constant communication with the Philippines’ national security and defence chiefs, and had directed uniformed personnel “to conduct their missions with the utmost regard for the safety of our personnel, yet proceed with a mission-oriented mindset”.

He reiterated that both Scarborough Shoal and Second Thomas Shoal are within Philippine territory. “No one but the Philippines has a legitimate right or legal basis to operate anywhere in the West Philippine Sea,” he said. Diplomatic protests had been filed and “the Chinese ambassador has also been summoned”, foreign ministry spokeswoman Teresita Daza told reporters on Monday.

China coastguard faces off with Philippine vessels near Scarborough Shoal

China has laid sweeping claims over the South China Sea, an assertion that’s been met by growing resistance in the Philippines under Marcos Jnr, whose administration has publicised Beijing’s tactics in the disputed waters.

The US responded by calling for Beijing to halt its “dangerous and destabilising” actions in the disputed waterway.

China and the Philippines traded blame after the Sunday incident, which occurred during a Philippine resupply mission to a tiny garrison on Second Thomas Shoal in the Spratly Islands, a flashpoint for Manila and Beijing – coming a day after another incident near Scarborough Shoal.

On both days Chinese ships “employed water cannons and reckless manoeuvres, including forcing a collision, causing damage to Philippine vessels undertaking official supply missions to those locations, and jeopardising the safety of the Filipino crew,” State Department spokesman Matthew Miller said in a statement on Sunday.

The ships at Scarborough Shoal “also used acoustic devices, incapacitating the Filipino crew members, and drove away Philippine fishing vessels,” he said.

“These actions reflect not only reckless disregard for the safety and livelihoods of Filipinos, but also for international law,” Miller said.

China has ignored an international tribunal ruling that its claims to almost the entirety of the South China Sea have no legal basis. It deploys boats to patrol the busy waterway and has built artificial islands that it has militarised to reinforce its claims.

China’s coastguard blames Philippine boats for ‘collision’ near disputed shoal

Miller said The Hague tribunal’s 2016 decision “is final and legally binding on the PRC and the Philippines.”

The US “calls upon the PRC to abide by the ruling and desist from its dangerous and destabilising conduct,” he added, using an acronym for the People’s Republic of China.

“The United States stands with our Philippine allies in the face of these dangerous and unlawful actions,” he said, adding that a mutual defence treaty between the US and Philippines “extends to armed attacks on Philippine armed forces, public vessels, or aircraft – including those of its coastguard – anywhere in the South China Sea.”

The Philippines said one of its boats was “rammed” by China during the incident on Sunday. China’s coastguard, however, accused the Philippine boat of “deliberately colliding” with the Chinese vessel after disregarding “multiple stern warnings”.

Additional reporting by Agence France-Presse, Reuters

PNG ‘keeps’ China for the economy, US for external defence, Australia for internal security: PM

https://www.scmp.com/news/asia/australasia/article/3244600/png-keeps-china-economy-us-external-defence-australia-internal-security-pm?utm_source=rss_feed

Papua New Guinea Prime Minister James Marape said on Monday there had been no recent talks with China on security after the resource-rich nation signed a security agreement with neighbour Australia last week.

Marape said PNG had been transparent, and when he visited Beijing this year with his ministers “there was no conversation on security”.

“We keep them in the space of the economy, we went with traditional security partners for security,” he told a resources-investment conference in Sydney.

PNG signed a defence agreement with the United States in May, and struck a security deal with Australia last week that Marape said was focused on internal security, including boosting police numbers and the judiciary.

“These two are complementary. External security with the USA, and internal security with Australia,” he said.

The resource rich but largely undeveloped nation north of Australia is seeking to boost foreign investment and trade to boost its economy, amid an increasing jostle for influence in the region between the US and China, which signed a security pact with neighbouring Solomon Islands last year.

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

Marape said improving security was important for foreign investors.

PNG’s exports are dominated by resources and energy, including liquefied natural gas.

Marape said he did not want to be lectured on climate change, and nations with the biggest carbon footprints and affluent lifestyles needed to take the lead in curbing emissions.

“My country is in the oil and gas business. Lucky for me we have the big forest and ocean to offset,” he said.

With 70 per cent of PNG forested, Marape said it was a “carbon negative” country and offered a green label to energy investors.

Global travel demand to and from mainland China recovering at strong pace, IATA chief says, but analysts cautious amid economic slowdown, geopolitical rifts

https://www.scmp.com/news/china/article/3244562/global-travel-demand-and-mainland-china-recovering-strong-pace-iata-chief-says-analysts-cautious?utm_source=rss_feed

Global travel demand to and from mainland China is recovering at a “strong” pace, an international airline association head has said, but analysts have warned that the country’s economic slowdown and geopolitical tensions could hinder a return to pre-pandemic levels next year.

International Air Transport Association (IATA) director general Willie Walsh also told the Post the trade lobby had predicted that the mainland’s international travel demand would recover next year.

“The pace of recovery since the market reopened earlier this year has been quite strong, so I think that is the reason we are optimistic about it going forward,” he said last week while on the sidelines of a media event at the association’s headquarters in Geneva.

According to the association, international travel demand to and from the mainland remained 40 per cent below pre-pandemic levels.

The mainland accounted for 9 per cent of all international air passenger demand before the Covid-19 pandemic in early 2020, it said.

Figures from consultant McKinsey showed mainland travellers made more than 150 million international trips in 2019, spending about US$1 trillion.

International travel to and from the mainland ground to a halt for about three years under Beijing’s stringent coronavirus curbs, before authorities lifted restrictions in January and resumed issuing tourist visas from March.

The revival of the mainland’s international flight capacity from unprecedented lows is is taking time.

Recovery of Hong Kong aviation sector ‘stronger than expected’: IATA chief

At the same time, difficulties securing visas, strong demand for domestic flights and weaker economic growth weighing on recovery efforts have hamstrung demand for international flights.

Aviation analytics firm Cirium noted that scheduled seat capacity on international flights to and from the mainland last month was 38 per cent lower than the level recorded for December 2019.

But domestic seat capacity in December was almost 12.5 per cent higher than levels recorded for the same month in 2019.

The slower-than-expected rebound for travel from the mainland is also expected to affect the full recovery of airlines in the Asia-Pacific region.

At a meeting of 14 members of the Association of Asia-Pacific Airlines in November, Japan Airlines and Thai Airways representatives told the Post they were shifting capacity away from the mainland, where travel demand was weak, and directing resources towards markets such as Hong Kong and Europe.

Thailand had previously banked on a resurgence of mainland tourists to support its economy, later revising estimates that it would welcome 5 million visitors by year’s end from its regional neighbour and cutting the figure down to about 3.5 million.

IATA chief economist Marie Owens Thomsen said there was cause for optimism after Chinese President Xi Jinping and his US counterpart Joe Biden agreed last month to increase direct flights between the two countries.

She said the push to increase flights between the two countries was essential in bringing the mainland’s international traffic back up to pre-pandemic levels, which had been hampered amid a period of growing geopolitical tensions.

Recovery of Hong Kong aviation sector ‘stronger than expected’: IATA chief

The number of flights between the US and the mainland currently stands at about 70 per week, compared with more than 300 each week in 2019.

But Owens Thomsen said the association’s forecast could be upended by factors such as a decline in Chinese trade, high youth unemployment and the “fragility” of the local property sector.

The latter recently came under the spotlight as big developers on the mainland struggled to pay off debts and owners raised concerns over unfinished properties.

Discussing the potential risks on the horizon, the association’s chief economist said she believed they would not “dominate” the situation and that international demand would still rise to 2019 levels in the first half of 2024.

“If the economy slows, demand is more than likely to slow, but it still looks like people are increasingly regarding travel as a necessity, and will still allocate budget to that,” she said.

Dr Xie Xingquan, IATA’s regional vice-president for North Asia, said perceptions about the safety and security of some international destinations were also having an effect on demand for flights from the mainland.

He also voiced approval for the decision by authorities on the mainland to grant visa free travel for one year to French, German, Dutch, Spanish, Italian and Malaysia passport holders.

“We hope the government will consider expanding the list, which will help facilitate international travel to China,” Xie said.

Asia Aviation Valuation Advisors chairman David Yu said there was pent-up demand for leisure and business travel to and from the mainland, but a lack of aircraft supply and backed up order books among manufacturers Boeing and Airbus were continuing to have a damping effect on international flight capacity.

Airlines pivot to Hong Kong, other markets amid sluggish mainland travel demand

Other elements included a lack of available older aircraft, economic factors and the closure of Russian airspace amid tensions over the country’s invasion of Ukraine in 2022.

The war prompted Western countries to impose flight bans on Russia, while Moscow retaliated by closing off its airspace to nations it considered hostile.

Some European and United States carriers warned that the situation had created an uneven playing field as Chinese, Gulf state and Indian carriers still enjoyed access to the country’s airspace and could avoid making costly detours.

“From a bilateral standpoint, the US and Europe are not going to let the Chinese carriers fly over Russia, because it is going to make their own carriers not competitive,” he said.

“You have a choice of flying two or three extra hours or not, at similar prices? It’s a pretty easy equation.”

Sky-high air fares new normal for Hong Kong and rest of world: top Cathay executive

Yu also compared carrier China Eastern’s decision to reinstate flights between Shanghai and New York, while United Airlines had yet to make a similar move.

But industry leaders have described the lack of flights between the mainland and the US as a boon for Hong Kong flag carrier Cathay Pacific Airways, with travellers from over the border using the city as a gateway to America.

Yu said he agreed with a HSBC report from November 24 that warned Cathay Pacific’s long-haul traffic could be affected by a resumption of direct flights between the mainland and the US.

Touching on the future prospects of the mainland’s international travel demand, he said: “It is going to recover, but it is going to be slower than what they think. Next year? Doubtful from my perspective. I am looking at 2025 for recovery.”

‘The air is polluted’: stuck-up woman kicked out of China Starbucks after complaining ‘dirty’ food delivery man on break in cafe

https://www.scmp.com/news/people-culture/trending-china/article/3243887/air-polluted-stuck-woman-kicked-out-china-starbucks-after-complaining-dirty-food-delivery-man-break?utm_source=rss_feed

A snobbish woman in China who tried to get a food delivery worker ejected from a Starbucks coffee shop because she thought he was inferior has outraged mainland social media.

The unidentified woman from Sichuan province in southwestern China was eventually kicked out of the cafe by staff after she kept trying to shame the delivery rider on November 29.

Not only did she claim he was inferior, she also said that he “polluted” the air, Guangdong News reported.

In a viral video, the woman is seen quarrelling with a service worker and a security guard about the delivery man. The uniformed delivery man gets up from his chair but does not try to fight back.

“I can’t sit here any longer. There’s absolutely no way to sit with him in the store. Not a chance,” the woman said to a coffee shop server.

The customer who filmed the video said the woman complained that she could not tolerate being in the same shop as a food delivery rider.

“She said that the delivery man could never be in the same class as her,” the customer told Guangdong News.

Eventually, the coffee shop staff member asked the woman to leave.

“Thanks for coming, goodbye,” the staff member told her.

At the time of writing, the story had attracted 25,000 comments on Douyin with many criticising the woman’s rudeness.

One person said: “This woman pollutes our planet.”

“Why does she think she is superior?” Asked another.

“Does she really think she is noble? She proves that she is very ugly,” said a third.

While another online observer said: “This makes me want to cry. I can’t even imagine how the delivery man feels.”

Stories about customers behaving badly regularly spark a storm in China.

In July, online observers slammed two well-dressed women on a riverbank picnic in southern China who made a food delivery driver’s life hell with their vague directions and arrogant attitude.

In July last year, a student in eastern China working as a part-time food delivery driver was abused by a customer who refused to let her use the building lift, insulted her work ethic, and then threw hot noodles at her.

China-led team creates soft ‘octopus’ arm in reach for intuitive human-robot interaction

https://www.scmp.com/news/china/science/article/3244564/china-led-team-creates-soft-octopus-arm-reach-intuitive-human-robot-interaction?utm_source=rss_feed

A research team led by a professor from China’s Beihang University has created a soft robotic arm that closely mimics the intricate movements of an octopus, representing a step forward for advanced human-robot interaction.

The device could also transform medical and elderly care services, as well as delicate underwater operations.

Capable of being controlled with a finger glove, the highly pliable robotic device could one day give users a shot at playing “Doctor Octopus” from the Marvel films, whose “multiple arms perform various tasks simultaneously”, project lead Wen Li said.

The electronics-integrated soft robotic octopus arm (E-SOAM) combines the natural agility of an octopus with cutting-edge technology.

The team behind the invention wrote about their work in a recently published article in the peer-reviewed journal Science Robotics.

Chinese scientists create smart fingertip that can feel textures

“A key innovation of this robotic design is its departure from traditional mechanical arms that rely on end-effectors for interaction. Instead, the octopus-inspired movements of the E-SOAM enable a broader range of capturing,” Wen said.

The E-SOAM replicates the “bend propagation” motion observed in the tentacles of sea creatures like octopuses, which reach and grasp their prey. It can extend up to 1½ times its original length with a flexibility that mimics those creatures’ movement and perform similarly intricate tasks in confined spaces.

A soft robotic system must integrate sensory, signal processing, and communication components to interact with the world around it. But incorporating circuits into this extendable soft-bodied robot presented another challenge, as traditional rigid circuits and bendable ordinary flexible circuits could not maintain functionality during extensive stretching.

This problem was resolved through the design and manufacture of electronic circuits based on liquid metals.

The arm’s circuits are designed to withstand significant stretching, which is essential for maintaining functionality in highly deformed states. This advancement lets the robotic arm process the complex sensory data behind bending and suction actions, and detect temperature changes.

“The E-SOAM’s interactivity is further enhanced by a wearable finger glove, which allows human operators to remotely control the robotic arm,” Wen said.

The glove provides tactile feedback, mimicking the sensations of touch and suction, thus enabling precise manipulation of the arm both in air and underwater. Operators using the glove can feel the suction at the tentacles’ ends, while the tactile feedback also varies with the intensity of suction.

In scenarios demonstrated by the researchers, an operator was able to grab a toy shark only with a wave and grasping movement of his fingers.

Apart from being a technological achievement, the feature is also expected to bring more intuitive human-robot interactions a step closer.

“We believe in the future, operators could manipulate multiple tentacles through touch, potentially realising a scenario akin to the fictional Doctor Octopus, where multiple arms perform various tasks simultaneously,” Wen said.

E-SOAM’s adaptability and dexterity make it an ideal candidate for tasks in confined or delicate environments, such as in healthcare and underwater exploration. “The arm’s design and functionality are especially promising for medical and elderly care services, as well as for non-destructive underwater operations,” Wen added.

The success of the E-SOAM provided valuable insights into the development of future bio-inspired autonomous systems that could seamlessly interact with humans and their environments, the team said.

According to their paper, “future enhancements might include integrating wearable fluidic pumps or vibration systems to achieve a fully wireless and untethered human-machine interface”.

Golden era of China-Vietnam relations is at hand, never mind the West

https://www.scmp.com/comment/opinion/article/3244414/golden-era-china-vietnam-relations-hand-never-mind-west?utm_source=rss_feed

“[Vietnam] supports Japan playing a more important and active role in the Indo-Pacific and Asia-Pacific,” Vietnamese President Vo Van Thuong said during a historic speech before Japan’s parliament in late November. After a meeting with Japanese Prime Minister Fumio Kishida, the two countries upgraded their ties to a comprehensive strategic partnership, vowing to enhance cooperation in all key dimensions, including maritime security and national defence.

Days earlier, Thuong was also on a charm offensive in the United States. During a widely covered speech at the Council on Foreign Relations on the sidelines of the Asia-Pacific Economic Cooperation summit in San Francisco, he praised the speed and breadth of transformation in Vietnam-US relations. It goes without saying that China was at the centre of discussions between the Vietnamese leader and his US and Japanese counterparts.

The once-impoverished and war-stricken nation has quickly transformed into the new darling of the West, which sees Vietnam as a potential geopolitical and economic counterbalance to China. On closer examination, however, it’s clear Vietnam is far from interested in joining any anti-China alliance.

If anything, it has gradually recognised the centrality of stable ties with Beijing to fulfil its national goals, including becoming a high-income nation by the middle of the century. This could explain the uptick in high-level Vietnam-China exchanges in the past year alone, which will culminate in a visit by President Xi Jinping to Hanoi this coming week.

Mainstream discussions of Vietnam’s foreign policy are replete with clichés. There is the narrative of Vietnam’s thousands of years of dealing with China, even if the nation as we know it today is a more recent political construct. The country’s bitter maritime disputes with Beijing in the South China Sea are often seen as a continuation of this seemingly eternal conflict.

The reality, however, is more nuanced. As scholars such as Cornell University’s Keith Weller Taylor have argued, Sino-Vietnamese relations were often marked by long periods of peaceful coexistence, with Vietnamese autonomy “dependent upon a successful practice of mimicry” of China.

If anything, Maoist China served as a major patron as well as an ideological blueprint for Vietnam’s communist leadership. Even more fascinating is how Vietnam’s post-Cold-War was inspired by China’s market reforms under Deng Xiaoping.

Moreover, there is the cliché of Vietnam’s supposed strategic opportunism, namely its penchant for playing multiple powers against each other. Similar to many of its neighbours, contemporary Vietnam is committed to a policy of non-alignment and refusing to side with one superpower against the other. This was born out of the country’s traumatic experience during the Cold War, when it was caught between the Soviet Union, the US and China.

But Vietnam’s foreign policy is far from static and monolithic. In the past decade alone, its balancing strategy has undergone a remarkable transformation, thanks to historic changes at home and in the broader international system.

In the early 2010s, Hanoi’s more reform-minded leadership, buoyed by deepening economic ties to the West, welcomed strategic cooperation with the US to expand Vietnam’s export markets as well as enhance its deterrence capabilities against a rising China. Vietnam has also flirted with a potential security partnership with the Philippines, a US treaty ally, to jointly constrain China’s ambitions in the South China Sea.

Pursuing a strategic partnership with the West was part of a broader diversification strategy, given Hanoi’s historical dependence on Russia, now a declining power. This West-looking strategy reached its peak during the Trump administration in the US, which actively courted Hanoi to hem in China.

In recent years, however, Vietnam’s foreign policy has taken a more China-friendly turn for three reasons. First, on the domestic front, more liberal and West-friendly elements have been purged under the guise of anti-corruption initiatives.

Second, Vietnam’s communist leadership prefers a more multipolar international order and has resisted key tenets of Western foreign policy in recent years. Vietnam has not only refused to condemn Russia’s invasion of Ukraine, reports suggest it is also circumventing Western sanctions by negotiating a new major defence deal with Moscow.

More recently, Vietnam drew on its own anti-colonial struggle as it took up the Palestinian cause, refusing to condemn Hamas’ October 7 attack while advocating for an immediate ceasefire amid the rising civilian death toll in Gaza. In effect, Vietnam has mirrored China’s positioning on the latest global conflicts.

The third, and arguably most important, factor in Vietnam’s more Beijing-friendly turn is the physics of trade and investment. Vietnam relies heavily on imports of raw materials and intermediate goods from China amid a boom in its manufacturing capacity.

A significant part of Vietnamese exports to the West draws from both Chinese capital and technology. In many ways, Vietnam has been absorbed into China’s gigantic Pearl River Delta production hub.

Vietnam is also deeply invested in a stable US-China relationship. A fully fledged economic war between the two nations could, according to one study, lead to a reduction of up to 4.7 per cent in the gross domestic product of regional states. An actual war would be even more devastating for countries such as Vietnam.

As Vietnam’s president recently put it, his country’s motto now is “to [shelve] the past, overcome differences, optimise similarities and look toward the future”.

Notwithstanding its contentious history and ongoing maritime disputes with China, Vietnam’s future is ultimately dependent on maintaining stable ties with its communist neighbour to the north. Xi’s upcoming visit to Hanoi is expected to cement a new golden era of bilateral relations.

China debt: beyond the boondoggles, is China worth further investment, and why is water controversial?

https://www.scmp.com/economy/china-economy/article/3244430/china-debt-beyond-boondoggles-china-worth-further-investment-and-why-water-controversial?utm_source=rss_feed

China’s top leaders are expected to assemble soon at the central economic work conference in Beijing to hammer out economic goals for 2024. This is the fourth part looking at what to expect from China’s economy next year.

When Shanghai announced it would modernise water systems for households in suburban areas, the initiative generated a stir among local residents keen on seeing quality-of-life improvements.

Through the pilot scheme, about 10,000 households in suburban towns may finally be able to glug potable water right from the taps in the coming years. It is meant to be a prelude to a broader upgrade across the city of 25 million that local authorities say should be finished by 2035.

But to achieve that goal, several billion yuan will be needed to upgrade existing pipelines, water-purification equipment and waste-disposal facilities.

Yet, in a time of mounting local-level debt across China – due in part to unchecked spending on infrastructure projects intended to stimulate local economies – even efforts to bring potable water to the people are raising questions about whom should bear the investment costs, and how to pass on extra utility expenses to households.

What GDP target must China set for 2024 to double its economy by 2035?

The fact that households under the jurisdiction of mainland China’s most affluent city lack drinkable tap water – a decades-old requirement not only in international cities such as London and New York, but also in small towns of developed nations – has complicated the debate over whether the world’s second-largest economy is overinvested.

These types of investment decisions are expected to be discussed when China’s leaders convene at the upcoming central economic work conference – possibly in December – to map out economic growth targets for 2024 and agree on a budget-deficit ratio, local bond quotas and policy priorities.

“The economy doesn’t need the government to invest more in big infrastructure or boondoggles going forward,” said Chen Zhiwu, a chair professor of finance at the University of Hong Kong.

The economist explained that the speed and scale of China’s infrastructure development means that it essentially crammed between 50 and 60 years worth of normal construction and investments in developed countries into about 30 years.

“It needs a rethink on this model,” Chen warned.

China’s homologous infrastructure buildout has seen mountains levelled, canyons bridged, and new cities created in numerous mega projects. Much of that resulted from Beijing’s utilisation of a 4-trillion-yuan (US$562 billion) stimulus package in 2008 to counter the shocks of the global financial crisis.

The spend-and-build drive, however, landed many local governments in considerable and sometimes crippling debt, and it is not uncommon to see underused roads, empty airports and unoccupied residential complexes, especially in western China.

Local officials often use off-budget local government financing vehicles (LGFVs) to fund such infrastructure projects, and the Ministry of Finance estimated that the debt from those vehicles stood at 55 trillion yuan in June, and some economists say it could be higher.

Many institutions, including the International Monetary Fund (IMF), have called on China to transition into a consumption-driven economic growth model for sustainability while strengthening the social safety net and welfare to help boost consumption, as many Chinese people have reported uncertainties over their income in the post-Covid era.

China tightens the leash on vulnerable banks in domestic de-risking campaign

“It will be important to change the sources of growth to rebalancing from overly relying on investment towards more consumption,” Thomas Helbling, deputy director of the IMF’s Asia-Pacific Department, said in early November.

Some advisers, however, have argued that investment remains the best pillar to support the economy in the short term when exports could continue faltering and residents are reluctant to loosen purse strings.

Yu Yongding, a prominent economist with the Chinese Academy of Social Sciences and a former adviser to the central bank, has firmly called for more expansionary fiscal spending to keep the economy ticking.

“There is ‘big room’ for expansionary fiscal policies, and time is essential in adopting them,” Yu said at a recent forum in Shanghai, warning that China’s low inflation rate would discourage investments.

Yu also proposed scrapping the 3 per cent deficit cap for governments to spend more and get businesses and people to spend, too. Beijing’s issuance of 1 trillion yuan worth of additional bonds in October pushed the budget deficit ratio to 3.8 per cent of China’s gross domestic product (GDP).

Investments accounted for 1.6 percentage points of GDP growth in the first three quarters of the year, compared with 4.4 percentage points for consumption. Net exports dragged growth by 0.7 percentage points.

Meanwhile, Beijing is being pushed and prodded to foot the bill when it comes to infrastructure that enhances livelihoods, as private investors are unlikely to plough funds into such products when local government finances are in such dire straits.

Zhu Tian, a professor at the China Europe International Business School, said sizeable investments remain a key catalyst for economic growth.

“More government-led investments should concentrate on livelihoods and leave other [investments] for the market – especially the private sector – to decide,” he said.

China’s total fixed-asset investments grew 2.9 per cent, year on year, in the first 10 months to 41.94 trillion yuan, yet private investment dipped 0.5 per cent in the same period.

As China looks to shore up economy, geopolitics, US rate cuts weigh on outlook

Beijing has been prioritising water-conservancy projects, new data centres, and three key initiatives – urban village redevelopment, affordable housing and emergency facilities.

Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at Natixis, said China should proceed with welfare-enhancing projects, including upgrades to water-supply systems and more hospitals.

“China seems to only spend money where there is clear, immediate productivity or GDP gains, but not so much for people’s welfare,” she said.

Such investments, while unlikely to offer much of a boost to economic activities, would still be in line with Beijing’s philosophy of “high-quality development” in its modernisation drive.

“Somehow [policymakers] feel [welfare] doesn’t contribute to growth. But that’s wrong, because if people feel more protected, they will consume more,” Garcia-Herrero said, adding that spending decisions need to be made with the public’s well-being in mind.