• China’s financial regulator pledges steps to shore up property market
• Tsinghua University’s genius twin scientists return to China from the US, Canada
• Hong Kong education chief pulls out of UK trade show talk amid criticism of visit by anti-China activist group
• China’s luxury goods market posts ‘robust rebound’, but post-Covid uncertainties remain
• Iran and Pakistan set to meet on Monday to repair ties after tit-for-tat strikes, decline China’s mediation offer
• China pledges to upgrade relations with new ‘all-weather friend’ Uzbekistan is seeks to strengthen links with Central Asia
• World’s richest YouTuber MrBeast sparks global frenzy with US$25,000 cash giveaway to each of 10 random followers in wake of China debut
• China denies providing weapons to Hamas in Israel-Gaza war
• Chinese fintech giant Ant Group sets up AI unit led by former Google researcher
• How far-reaching is China’s assimilation policy? | Podcasts
• Chinese leader Xi Jinping calls for ‘deep reflection’ on frequent accidents as deadly Jiangxi fire makes it 3 in a row
• Hong Kong police arrest 13 on suspicion of medical voucher fraud, including 7 traditional Chinese medicine practitioners
• Wedded miss: China mother pressures son into marriage with suicide threat, couple divorce after 6 months
• US House panel renews push to punish trade fraud by Chinese companies, warning of ‘catastrophic impact’ on manufacturing
• Why China must waste no time in pivoting to a consumption-based economy
• China, Singapore agree visa-free deal for travel stays of up to 30 days
• China’s PLA watches as US warship sails through Taiwan Strait in ‘provocative’ move
• China’s Lunar New Year travel surge to boost economy, but property market and private firms remain top priority
• 2024 AFF: China’s policies to boost bonds and wealth management will help Hong Kong’s companies and home buyers, delegates say
• Alfresco blind dating takes hold among young in China who see rigours of outdoor activity as effective test of character
• EU says any retaliatory trade probe by China must be ‘based on facts’
• China sees hi-tech innovation as a boon for its global competitiveness and manufacturing dominance
• Tuvalu election: what’s happening, and what could it mean for Taiwan, China and the Pacific?
• ‘Do zero hours of work’: China engineer in New Zealand boasts about skiving off work during office hours, triggers official probe
• Why America’s controls on sales of AI tech to China are so leaky | Business
• EU slows down de-risking plans for China in face of member state resistance
• Hong Kong’s first Chinese medicine hospital to showcase Western and TCM collaboration, city’s health minister says, ahead of late 2025 opening
• China and Iran push public diplomacy, but will Beijing’s soft power tactics work in the Islamic Republic?
• China GDP: provinces set conservative 2024 economic growth targets as debt hangover bites
• Ant Group-backed credit scorer Qiantang closer to licence in China after two-year wait, as PBOC to ‘guide’ application

China’s financial regulator pledges steps to shore up property market

https://www.scmp.com/economy/china-economy/article/3249799/chinas-financial-regulator-pledges-steps-shore-property-market?utm_source=rss_feed

China’s financial regulator turned its sights on the property market on Thursday, vowing measures such as better support for cash-strapped developers and mortgage policies designed to offer more help for households.

Xiao Yuanqi, deputy head of the National Administration of Financial Regulation, said the priority for this year was to “accelerate the implementation of the urban real estate financing coordination mechanism” – a measure announced earlier this month to ask local governments to better coordinate with financial institutions to provide financial support for real estate projects.

“[We will] ask banks to take action as soon as possible... [and] make good use of the policy toolbox and accurately support the reasonable financing needs of real estate projects,” he added.

Xiao said the regulator will soon convene a meeting, asking local governments to work with housing and construction departments to implement city-specific measures.

Meanwhile, the People’s Bank of China announced it would inject 1 trillion yuan (US$141 billion) of liquidity by slashing the reserve requirement ratio by 50 basis points and lowering the relending rate for some banks loans by 25 basis points.

With Lunar New Year boon a stopgap, China’s economy has other 2024 priorities

The central bank also decided to set up a new department to oversee credit support, a sign it will provide tailor-made support to the country’s weak links.

Analysts have long urged the authorities to act to fend off the so-called 4Ds of an economic apocalypse – debt, deflation, de-risking and demographics – but doubts, mainly from overseas, remains about how the top leadership will overcome the barriers to solving these problems or manage wider challenges such as global market turmoil and wider geopolitical tensions.

“Beijing’s policy announcements will provide only a small boost for China’s economy,” Capital Economics said in a report published Wednesday.

“Much of China’s weakness is structural rather than cyclical. Wholehearted loosening would add to China’s debt without having a lasting impact on growth,” the London-based research firm warned.

The property sector, together with construction, materials and downstream home appliances, used to contribute to around a quarter of the country’s economic output. But in terms of added value, its share dropped to 5.8 per cent of gross domestic product last year, according to government data.

On Wednesday, central bank governor Pan Gongsheng hinted at a cut in loan prime rates, a reference point for mortgage rates widely watched by Chinese households, next month and subsequently a policy rate cut in its medium-term lending facility.

The central bank and regulator jointly issued a notice the same day to allow real estate developers to bank loans backed by their firms’ commercial properties to repay other outstanding loans and bonds.

Increasing lack of funds and debt defaults from developers across the country have led to numerous unfinished houses being sold , which caused many buyers to stop repaying their mortgages two years ago, risking a greater knock-on impact on the financial stability of the world’s second largest economy.

The situation has heightened concern among the authorities about social instability and Chinese banks have already extended 350 billion yuan of loans to ensure housing units are completed.

Xiao indicated that the property sector’s woes have not yet hit the country’s banks, as the non-performing loan ratio stood at 1.62 per cent in the fourth quarter last year, compared with 1.61 per cent a quarter earlier.

China property: why an uptick in Beijing, Shanghai home sales is unlikely to last

The latest moves from the financial watchdogs follow a meeting of the State Council, the country’s cabinet following a sharp decline in Chinese stock markets that fuelled wider worries about the Chinese economy.

The meeting called for efforts to “enhance the innovation and coordination of policy tools” to support the economic recovery.

“We see the eased monetary policy stance aiming to increase coordination around other policy moves,” HSBC said in its note.

Other parallel policy support were also introduced to help stabilise the property sector, including 350 billion yuan in pledged supplementary lending to policy banks – money which could help fund affordable housing, urban village redevelopment and public facilities.

However, “China’s current economic weakness has structural roots and that a credit-fuelled turnaround would provide only temporary relief at the cost of adding to financial risks,” HSBC added.

Independent think tank Anbound also argued on Sunday that the key lies not in “technical stimulus policies”, but Beijing’s determination to follow a market-oriented path and insist on reform and opening-up.

Tsinghua University’s genius twin scientists return to China from the US, Canada

https://www.scmp.com/news/china/science/article/3249698/tsinghua-universitys-genius-twin-scientists-return-china-us-canada?utm_source=rss_feed

The return to China of Tsinghua University’s “star” twin scientists at the end of their postdoctoral research in North America was celebrated on Chinese social media after it was announced last week on the alma mater’s website.

The sisters Ma Donghan and Ma Dongxin, who were born in Dalian in 1989, were top students at Tsinghua when they shot to fame after their study schedule was published online. Commenters were amazed at their daily 6am-1am routine.

The twins each received special scholarships from Tsinghua University in 2012, an honour awarded to the best five undergraduates each year. They remained at Tsinghua and earned their PhDs before heading overseas.

Elder sister Ma Donghan, who continued her studies at Purdue University in the US, has joined Dalian University of Technology in Liaoning province, northeastern China as a professor. Her research focuses on super-resolution microscopy.

Ma Dongxin, whose expertise is in novel, high-performance LED lights, has returned to Tsinghua in Beijing as an assistant professor and teacher. She completed her postdoctoral research at the University of Toronto in Canada.

China to revive top science awards after 2-year suspension

Both women have made important contributions, with each of them responsible for developments that have advanced scientific understanding and led to improvements in their respective fields.

During her postgraduate study in West Lafayette, Indiana, Donghan solved the problem of inaccurate modelling, which had plagued the technology since the invention of single-molecule positioning microscopy.

Super-resolution microscopes can find and track individual molecules, helping scientists to study cells in more detail than any regular microscope can achieve.

Donghan has published a dozen papers in high-profile journals, including Nature Methods, Nature Communications, ACS Sensors and the Science Citation Index.

Dongxin’s research interests include improving the performance of light-emitting diodes (LEDs) by looking into the limitations of perovskite, the mineral widely used as a building block for LED and photovoltaic applications.

By developing a new class of organic additives to fabricate perovskite films, Dongxin helped to develop record-performance LEDs, according to the MIT Technology Review’s selection committee for its Innovators Under 35 prize in 2022.

Dongxin’s perovskite film – developed in Toronto – set a world record for the efficiency and longevity of perovskite LEDs, thanks to the more uniform and efficient layering of the material. The lights she designed were brighter, more efficient and lasted longer.

“My research abroad went smoothly, but I didn’t feel like I belonged. I was looking forward to coming back to China immediately after completing my studies,” Dongxin said, according to the Tsinghua website.

“Now as a teacher, I feel greater responsibilities, and I’m learning to better understand the courses and guide my students to tackle the most challenging scientific questions,” she said.

Hong Kong education chief pulls out of UK trade show talk amid criticism of visit by anti-China activist group

https://www.scmp.com/news/hong-kong/education/article/3249787/hong-kong-education-chief-pulls-out-uk-trade-show-talk-amid-criticism-visit-anti-china-activist?utm_source=rss_feed

Hong Kong’s education minister has withdrawn at the last minute from joining a panel discussion at a British trade show, citing scheduling issues, amid objections to her UK visit by an anti-China activist group.

Secretary for Education Christine Choi Yuk-lin had been expected to attend the British Educational Training and Technology Show in London as part of a visit to the United Kingdom and Finland this week, according to a government statement last Saturday.

Choi was set to “speak at a panel session … and support Hong Kong teachers and students who will participate in the show”, the statement said.

An Education Bureau spokesman said on Thursday that the minister had a “very intensive” schedule and that she had also been invited to attend “different activities” by “different stakeholders in the local education sector”.

“Team members may adjust the itinerary according to the actual situation to strengthen exchanges and contact with people from different education sectors, and promote and introduce Hong Kong’s education work, so they can understand the actual situation, development opportunities and advantages of Hong Kong,” the spokesman added.

Hong Kong DSE vocational courses hit record high as extra lesson time released

Choi’s trip to the UK and Finland included meetings with education experts and Hong Kong students, according to her initial itinerary.

The Post has contacted the show organiser for comment.

Choi’s trip to Britain has drawn the ire of a number of groups.

British-based anti-China activist group Hong Kong Watch said on X, formerly Twitter, that it welcomed confirmation Choi’s talk had been called off, after earlier issuing a statement calling for action against her. It accused her of “continuing to dismantle academic freedoms in Hong Kong”.

Hong Kong will not use performance goals to measure patriotic education: minister

The US-based Committee for Freedom in Hong Kong Foundation earlier this week also took aim at her trip, and called on the British government to cancel “all such visits” by city officials.

On Thursday she was scheduled to attend an exhibition in the Finnish capital Helsinki for a “topical discussion on the role of education for the future” with a group of international representatives.

She left Hong Kong for Britain on January 21 and is scheduled to return on Sunday.

Choi attracted similar criticism last year when she attended the Education World Forum in London.

Last April, financial affairs and treasury chief Christopher Hui Ching-yu became the first Hong Kong minister to visit the UK in three years, and met top British officials. During his trip, a group of protesters chased after and intercepted his car, resulting in an altercation.

In 2019, then justice secretary Teresa Cheng Yeuk-wah suffered a fracture and partial dislocation of her wrist after a fall while visiting London on an official visit. She had been surrounded by a group protesting against a now-shelved extradition bill that triggered months of unrest that year.

China’s luxury goods market posts ‘robust rebound’, but post-Covid uncertainties remain

https://www.scmp.com/economy/economic-indicators/article/3249766/chinas-luxury-goods-market-posts-robust-rebound-post-covid-uncertainties-remain?utm_source=rss_feed

China’s luxury goods market enjoyed a “robust rebound” last year, but a challenging economic climate and increased overseas shopping limited its recovery, according to a new report from a global consulting firm.

The sector recorded 12 per cent year-on-year growth in 2023, Bain & Company said on Wednesday, following a 10 per cent decline a year earlier.

The recovery in the gauge that measures the purchasing power of expensive goods was helped by a low base in the second quarter of 2022.

But the second half of last year witnessed weaker growth mainly driven by a decline in consumer sentiment among middle- and high-income individuals, coupled with a high base in the third quarter, the report added.

In 2021, China’s domestic sales of personal luxury goods increased by 36 per cent year on year to nearly 471 billion yuan (US$66 billion), according to Bain, as Chinese consumers were largely limited to domestic travel due to the coronavirus.

“As the market transitions to a post-Covid growth phase, uncertainties remain regarding the speed at which consumer confidence will resume and how overseas luxury shopping will evolve,” said Bruno Lannes, a Shanghai-based senior partner at Bain.

China, though, is still regarded as a leading luxury market despite a sluggish stock market adding to its economic recovery concerns.

“By 2030, Chinese luxury consumption is expected to reach 35 to 40 per cent of the world’s total, with consumption in mainland China reaching 24 to 26 per cent,” Bain said.

Middle-class Chinese shun luxury spending amid hazy outlook

The recovery in 2023 was supported by the likes of fashion, lifestyle and jewellery sales, which witnessed a growth rate of between 15 and 20 per cent.

But sales of watches had a “softer rebound”, after increasing by between 5 and 10 per cent.

China’s middle-class – a key group of some 400 million – are seen as a main engine for luxury businesses, but the cohort has been hit hard by the property market meltdown and free-falling stock market amid the post-pandemic economic recovery.

The consulting firm highlighted that duty-free sales in China’s southern island province of Hainan expanded by about 25 per cent year on year in 2023, “though not back to its 2021 high”.

Such a rebound could be attributed to the recovery in domestic travel and stimulus measures implemented by the Hainan government, Bain added.

But the average spending per shopper decreased by more than 25 per cent, it added, “likely due to lower discount levels, fewer daigou activities and an increased rationality among consumers”.

who would traditionally travel abroad on shopping trips for their customers.

“The extent of this recovery in 2024 will primarily depend on the speed of economic recovery and changes in travel and lodging costs,” said Weiwei Xing, a partner at Bain & Company in Hong Kong.

“Another year of recovery for Chinese overseas luxury consumption, particularly in Asian destinations, is expected.”

In December, a joint study by Bain and market research firm Kantar Worldpanel showed Chinese consumers, spooked by concerns over their job prospects amid a bleak economic outlook, were actively hunting bargains for consumer goods.

Total spending on fast-moving consumer goods, ranging from food and drink to cosmetics, dropped by 0.9 per cent year on year during the third quarter of 2023, the research report said.

The decline followed a 1.8 per cent year-on-year increase in the previous quarter.

Bain said Chinese luxury consumption – excluding daigou sales – is estimated to have accounted for between 22 and 24 per cent of the world’s total in 2023, with overall consumption about 16 per cent.

Bain forecast that spending on luxury items by Chinese consumers at home and abroad would make up between 35 and 40 per cent of the global total in 2030, buoyed by middle-class consumers increasing interest in expansive leather bags and watches.

Sales of luxury goods in China are also expected to account for between 24 and 26 per cent of the world’s total in 2030, it added.

“Excellent marketing strategies and smooth execution by luxury brands will continue to whet Chinese consumers’ buying appetite,” said Xing.

“The Chinese market will become a benchmark for the global luxury goods sector.”

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Iran and Pakistan set to meet on Monday to repair ties after tit-for-tat strikes, decline China’s mediation offer

https://www.scmp.com/week-asia/politics/article/3249773/iran-and-pakistan-set-meet-monday-repair-ties-after-tit-tat-strikes-decline-chinas-mediation-offer?utm_source=rss_feed

The foreign ministers of Iran and Pakistan will focus on avoiding a repeat of last week’s tit-for-tat cross-border air strikes at talks set to take place in Islamabad next Monday, according to officials in both countries.

While China has offered to mediate between both sides, Iran and Pakistan are expected to turn Beijing down as the two neighbours believe they can resolve the conflict on their own and quickly restore their historically cordial and close ties.

The two countries have a “joint interest in combating the menace” of the ethnic Baloch militant groups waging insurgencies against Pakistani and Iranian security forces, a senior Pakistani official told This Week In Asia on condition of anonymity, citing diplomatic sensitivities.

The official said the Iranian foreign minister Hossein Amir-Abdollahian would discuss with his Pakistani counterpart Jalil Abbas Jilani on “how best to combat” the threat posed by ethnic Baloch insurgents from their hideouts in the remote region bordering both countries, which was also a haven for human smugglers and narcotics traffickers.

He said “both sides will have ideas” but talks will focus on “what could have been done to avoid” Iran’s air strikes against the anti-Iran militant group Jaish al-Adl (Army of Justice), whose members are mostly ethnic Baloch, in the western Pakistani region of Panjgur on January 18, in which two children were killed and three other people were injured.

Iran’s attacks in Pakistan, Iraq to avoid ‘losing face’ risk irking China

Islamabad retaliated the following night by launching air strikes on the hideouts of two anti-Pakistan Baloch insurgent groups based in the southeastern Iranian area of Saravan, killing nine people.

Seyed Mohammed Marandi, a noted Iranian academic who has advised the government on nuclear talks with the West, agreed that border security would top the bill when Amir-Abdollahian visits Islamabad for talks on Monday.

“I’m sure the border is a top priority” for Tehran because “the Israelis are trying hard to strike back at Iran” after its non-state militia allies in Iraq, Lebanon, Syria and Yemen targeted Israel in response to the Jewish-majority state’s ongoing military campaign in Gaza, he said.

Marandi did not expect Iran and Pakistan to accept China’s offer to mediate between its two allies because “there is no need”, an assessment shared by the Pakistani official.

“The relationship is solid. But the border region needs money and infrastructure,” Marandi said.

Chinese vice foreign ministers Sun Weidong and Ma Zhaoxu respectively “had an exchange of views” on the “international and regional situation” with top Pakistani and Iranian diplomats on Saturday and Sunday, according to official statements issued by Beijing, which did not specifically mention the exchange of air strikes.

The Islamabad-based official said the onus during Amir-Abdollahian’s visit would be on him to show how Tehran would improve its border security, because “Pakistan has already constructed a fence along about 85 per cent” of their undisputed 904km border.

He described Iran’s military action in Pakistani territory as “an own goal” because Tehran had targeted its “only peaceful” major border.

Iran also has good neighbourly relations with Armenia and Turkmenistan. It has sided with Armenia in the former Soviet republic’s longstanding conflict with Azerbaijan over the disputed Nagorno-Karabakh region. Azerbaijan reclaimed control of the region last September in a lightning military offensive in which Armenia was not involved.

Balochistan women hailed for their sacrifices in Pakistan art exhibition

This has raised tensions between Iran and Turkey, Azerbaijan’s closest ally. Iran has accused Ankara of hosting Israeli operatives near the Turkish border with its west Asian neighbour.

Israel is the largest supplier of military hardware including drones to Azerbaijan, which in return supplies crude oil extracted from beneath the Caspian Sea, the world’s largest lake.

The Islamabad-based official said Pakistan’s two-and-a-half hour retaliatory air strike, during which it completely jammed Iran’s eastern air defences, had “destroyed the Iranian aura” of invincibility within its neighbourhood.

Pakistan’s national security council last Friday decided to de-escalate tensions, having initially recalling its ambassador and asking Iran’s envoy not to return from Tehran.

It hoped that Pakistan and Iran would “mutually be able to overcome minor irritants” through diplomatic dialogue but warned Tehran it would again respond in kind to any further cross-border strikes.

Iran’s foreign ministry replied by issuing a statement shortly afterwards on the same day which said it “adheres to the policy of good neighbourliness and brotherhood between the two nations and the two governments”.

This set the stage for a telephone conversation hours later between the Iranian and Pakistani foreign ministers, during which they agreed to restore full diplomatic relations and reinstate their ambassadors by Friday.

Iran explained in the statement and to Pakistan in diplomatic conversations that it was forced to act unilaterally to prevent an imminent cross-border terrorist attack by Jaish al-Adl.

Tehran emphasised that it had only attacked Iranian nationals in Panjgur, in the west Balochistan province of Pakistan, while acknowledging that Pakistan had hit its rebellious citizens in Iranian territory. In a bid to ease bilateral tensions, the Iranians promised to launch an investigation into how the insurgents had established hideouts on Iranian soil.

‘Why bother to vote’: dissecting Pakistan’s polls along the Karakoram Highway

“I think Pakistani officials soon realised that this [Panjgur target] was a real military base and that a large number of Iranian-born terrorists were gathered for an operation,” said Marandi, who is a professor of English literature and Orientalism at the University of Tehran.

“They recognised that it was a very difficult decision for Iran” because it has recently witnessed several terror attacks, two of which were “devastating”, he said.

At least 90 people were killed in a twin suicide bombing attack in the southern Iranian city of Kerman on January 3, where people had gathered to commemorate the United States’ assassination of top Islamic Revolutionary Guards Corps commander Qassem Soleimani four years ago.

The attack was claimed by Islamic State (Isis) and Iranian investigations identified one of the two suicide bombers as a Tajikistan national based in Afghanistan. Not wanting to antagonise the Taliban regime by bombing Afghan territory, Iran responded by launching ballistic missiles at Isis targets in Syria.

A further 15 Iranians were killed by Jaish al-Adl militants in December during an attack on a police station in the southeast province of Sistan and Baluchistan, which borders Pakistan’s Balochistan province.

Following the police station attack, Iranian officials had warned Islamabad of cross-border strikes in the event of further attacks, but these were dismissed by Pakistan as political rhetoric for domestic consumption.

Iran’s air strikes came “as a rude shock to Pakistan”, which had not thought that Iran “could even contemplate an action of this kind”, said Maleeha Lodhi, a former ambassador of Pakistan to Britain, the United States, and the United Nations.

Pakistan’s retaliatory strike was intended to “send a message, loud and clear, to deter and dissuade Iran from trying anything similar to that in the future”, she said.

This message was also aimed at other countries that “may contemplate any cross-border action”, in particular Pakistan’s long-standing enemy India, which has strong historic relations with Iran.

“The fact that Iran very quickly stepped back after Pakistan’s retaliatory strike may have reflected Iran’s acknowledgement that it had made a mistake by taking the [initial] action [to attack],” Lodhi said.

China pledges to upgrade relations with new ‘all-weather friend’ Uzbekistan is seeks to strengthen links with Central Asia

https://www.scmp.com/news/china/diplomacy/article/3249783/china-pledges-upgrade-relations-new-all-weather-friend-uzbekistan-seeks-strengthen-links-central?utm_source=rss_feed

China and Uzbekistan have pledged to upgrade relations to an “all-weather comprehensive strategic partnership” and boost cooperation in economic, security and diplomatic affairs as Beijing continues its pivot to Central Asia.

Uzbek President Shavkat Mirziyoyev’s three-day visit to China concluded on Thursday with both countries pledging to support each other on matters that concern their “core interests”.

The two countries said they hope new measures to boost trade between the two countries will help double last year’s total volume of US$10 billion by an unspecified “early date”, according to Chinese state news agency Xinhua.

On Wednesday, Chinese President Xi Jinping told Mirziyoyev that the two sides should begin work as soon as possible on a railway that would run through Kyrgyzstan to link the two countries and boost landlocked Uzbekistan’s connectivity with the wider world, according to an earlier report from Xinhua.

A Central Asian rail link would also help open new trades as shippers shun the existing overland links through Russia following its invasion of Ukraine and the introduction of Western sanctions.

Xi also pledged Chinese funding, technology and know-how in areas such as new energy vehicles as well as solar, wind and hydropower to support Uzbekistan’s green development strategy.

China’s Xi to chair C+C5 summit with Central Asian presidents from May 18

The Beijing-based Asian Infrastructure and Investment Bank, China’s answer to the World Bank, has previously approved loans worth US$3.1 billion for the country.

On Thursday it said it had approved further lending to fund 14 projects in the country, including transport, energy, water resources and environmental projects, with a with a memorandum of understanding to be signed in September.

The two countries also agreed to boost cooperation in healthcare, tackling climate change and fighting terrorism and extremism.

Beijing previously defined its relations with Uzbekistan as a “comprehensive strategic partnership”, one of the over 20 different categories it uses to define foreign affairs.

The upgrade to an “all-weather comprehensive strategic partnership” puts it on the same level as countries such as Pakistan, Belarus and Venezuela.

It means cooperation will be “comprehensive and deep”, and the two partners will support each other in regional and international affairs, according to Xiang Haoyu, a researcher with China Institute of International Studies in Beijing.

“All-weather means bilateral relations can stand the test of a changing international environment, showing ironclad friendship based on high political trust,” Xiang added.

Mirziyoyev said Uzbekistan abides firmly by the one-China principle, strictly opposes external interference in China’s internal affairs and stands ready to provide firm support on issues concerning its core interests, including Taiwan, Xinjiang and human rights, according to Xinhua.

In recent years China has been working to strengthen ties with countries in Central Asia, where the issue of Xinjiang is a particular concern due to family and cultural ties.

A United Nations report has said China may have committed crimes against humanity against Uygurs and other Muslim minority groups in the region – accusations Beijing strongly denies – and the details of what Mirziyoyev said on the subject have not been made public.

Qin Gang vows China will work with Uzbekistan on energy and projects

The two countries also reaffirmed their position on Afghanistan, saying they respected its sovereignty and territorial integrity, opposed interference in its domestic affairs and expressed the hope it could play a part in boosting regional connectivity.

In common with the rest of the world, neither country has officially recognised the Taliban regime since it returned to power in 2021.

However, China has worked to boost unofficial ties with the Islamist group, including welcoming Taliban representatives to last year’s Belt and Road Forum in Beijing, which included a focus on strengthening ties with Central Asia.

World’s richest YouTuber MrBeast sparks global frenzy with US$25,000 cash giveaway to each of 10 random followers in wake of China debut

https://www.scmp.com/news/people-culture/china-personalities/article/3249760/worlds-richest-youtuber-mrbeast-sparks-global-frenzy-us25000-cash-giveaway-each-10-random-followers?utm_source=rss_feed

MrBeast, the world’s richest YouTuber, has bolstered his blistering arrival on social media in China by sparking a fresh global frenzy with a cash giveaway offer of US$25,000 to each of 10 random individuals.

The US-based online personality – whose personal net worth is estimated to be US$500 million – is famous for his extravagant, luxurious and bold videos which cover everything from philanthropy to science experiments and survival challenges.

Super successful MrBeast – whose real name is Jimmy Donaldson – has attracted a vast audience, the Chinese portion of which has exploded since he officially launched on the mainland video platform Bilibili on January 22.

In an introductory video on the platform, the 25-year-old said: “Right now we’re doing around 200 million views a video. We have an audience basically all over the world except China, so I thought it would be cool to start getting the content over to China.

“I’m just super curious to see what everyone over here in China thinks of the videos I make. It’s going to be a fun ride!”

In a post immediately following his Bilibili launch, MrBeast pledged US$25,000 to each of 10 random individuals who reposted his giveaway post and followed him on X, formerly Twitter, the giveaway sum being derived from the earnings made from the video.

“I’m gonna give 10 random people that repost this and follow me $25,000 for fun. I’ll pick the winners in 72 hours,” he said.

Despite Twitter being inaccessible in China – unless via third party routes – news of the cash giveaway spread rapidly on Weibo, with local influencers sharing the information and inviting their followers to participate in what they called a “free lottery”.

The giveaway post, applications for which close at 2.32 am Hong Kong time (GMT+8) on January 26, quickly gained traction, amassing 3.5 million reposts and 2.1 million likes at the time of writing.

MrBeast is known for his fast-paced and high-production-value videos.

In November 2023, he recreated a scene from US film director Quentin Tarantino’s Kill Bill blockbuster by undertaking the challenge of surviving being buried alive for a week.

While describing the stunt, inside a transparent coffin with food and water provided, as “mental torture”, it attracted an astounding number of viewers to his channel.

MrBeast has also demonstrated his commitment to philanthropy by producing a video in which he sponsored surgery for 1,000 people who suffer from cataracts.

His entry to the mainland market has been warmly welcomed.

One follower said: “I followed you from YouTube to Bilibili, I’m so moved. Welcome, MrBeast!”

Another said: “Wow, this is a milestone! On behalf of everyone, I want to ask, when are you visiting China?”

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China denies providing weapons to Hamas in Israel-Gaza war

https://www.scmp.com/news/china/military/article/3249784/china-denies-providing-weapons-hamas-israel-gaza-war?utm_source=rss_feed

China has “never provided any weapons” to conflict areas, including in the Israel-Gaza war, the Chinese defence ministry said – the first time Beijing has denied arming Hamas militants since the conflict began.

Colonel Wu Qian, the ministry’s spokesman, said on Thursday that China had provided food, medical and other emergency aid to the Palestinians but had never provided any weapons or equipment to conflict areas.

“It needs to be emphasised that China has always adopted a prudent and responsible attitude when it comes to arms exports and strictly follows the three principles of arms exports,” Wu said.

Has China ‘clearly estranged Israel’ with its stance on the war in Gaza?

According to China’s regulations on arms exports, Beijing’s weapons sales should serve the legitimate self-defence capabilities of the recipient country, should not harm world and regional peace, security and stability, and should not interfere in the recipient country’s domestic affairs.

This is the first time since the war between Israel and Gaza began in October that Beijing has denied its direct involvement following allegations that the Palestinian militant group Hamas is using weapons and equipment made in China.

Earlier this month, the Israel Defence Forces (IDF) said it discovered a “massive” stockpile of Chinese-made weapons being used by Hamas, according to a report by The Telegraph.

The IDF’s investigation said Hamas possessed advanced weapons and equipment made in China, such as cartridges and rifle sights for M16 assault rifles, automatic grenade launchers and communications devices.

“This is top-grade weaponry and communications technology, stuff that Hamas did not have before, with very sophisticated explosives which have never been found before and especially on such a large scale,” an Israeli intelligence source said, according to The Telegraph.

The US and other Western allies have stood with Israel after Hamas militants launched a surprise attack against Israel on October 7 that left an estimated 1,200 dead and about 240 taken hostage. Hamas has released about 100 of the hostages, but Israel says about 130 remain in Gaza.

Why China is unlikely to join US-led force against Houthi attacks in Red Sea

The conflict has escalated as the US and Britain launched air strikes earlier this month against Iran-aligned Houthi in Yemen after the militant group attacked international and commercial shipping in the Red Sea to show its support for the Palestinians.

China has refused to take sides in the Israel-Gaza war and urged the two sides to seek peace in the conflict. But it has also repeatedly called out Israel’s “excessive self-defence” in its operations in Gaza.

Last week while visiting Cairo, China’s top diplomat Wang Yi called for the convening of a “larger-scale, more authoritative and more effective international peace conference” to implement a “two-state solution” and resume peace talks to end the war in Gaza.

Chinese fintech giant Ant Group sets up AI unit led by former Google researcher

https://www.scmp.com/tech/big-tech/article/3249737/chinese-fintech-giant-ant-group-sets-ai-unit-led-former-google-researcher?utm_source=rss_feed

Ant Group, the Chinese fintech giant affiliated with Alibaba Group Holding, has set up a new artificial intelligence (AI) unit led by a former engineer at Google, demonstrating its ambitions in applying the fast-developing technology to its expanding business.

The new unit – called NextEvo and headed by Xu Peng, a vice-president of engineering at Ant – will drive and coordinate the fintech powerhouse’s core AI efforts, according to people familiar with the matter who requested anonymity to discuss internal developments.

The news was first reported by Chinese online media outlet 36Kr. Alibaba owns the South China Morning Post.

Ant’s increased AI efforts come at a time when most major Chinese tech companies are investing in large language models (LLMs) – the technology that underpins ChatGPT and similar AI chatbots – and exploring ways to boost growth through innovations in the area.

NextEvo will be in charge of Ant’s own LLM, Bailing, as well as AI algorithms and engineering, natural language processing (NLP) and AI-generated content operations, sources said.

Beijing has been relaxing some restrictions on Ant’s businesses after the Hangzhou-based company took several steps to restructure following the last-minute cancellation of its planned dual listing in Shanghai and Hong Kong in 2020.

The People’s Bank of China and the government of Zhejiang province were preparing to grant Qiantang Credit Rating, an Ant-affiliated agency, a “personal credit information collection licence”, a necessary permit for Ant to grow its credit business, central bank governor Pan Gongsheng said on Wednesday.

Ant applied for the permit as early as 2021, but since then Chinese financial regulators have imposed regulatory requirements that demand the company’s credit service to operate under conventional banking rules, effectively curbing its expansion.

As Ant underwent a restructuring, founder Jack Ma’s voting rights at the firm’s payment app Alipay shrank from over 53 per cent to just above 6 per cent. The Chinese central bank confirmed last month that Alipay had no controller, bringing Ant another step closer towards resuming its listing.

Last year, Ant became one of the first Chinese tech companies to receive a green light from the government to release consumer-facing products and applications built on LLMs.

Xu, the head of NextEvo, joined Ant in 2016 and has been leading the company’s AI research lab from Silicon Valley.

After graduating with a bachelor’s degree in engineering from Tsinghua University and a doctorate from Johns Hopkins University focusing on NLP, Xu worked for over a decade at Google, where he held research roles related to machine translation and advertising algorithms, according to his LinkedIn profile.

Xu has said that Bailing is designed to be used to build more innovative products in various services and “create value in the industry”.

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How far-reaching is China’s assimilation policy? | Podcasts

https://www.economist.com/podcasts/2024/01/23/how-far-reaching-is-chinas-assimilation-policy

China’s attempt to assimilate ethnic minorities leaves no stone unturned. It has even reached one of China’s quirkiest communities—a pocket of 6,000 people in a Mongolian township in Yunnan province, more than 2,500km from Inner Mongolia where most ethnic Mongols live.

David Rennie, our Beijing bureau chief reports from a traditional Naadam ceremony in Xingmeng. Together with Alice Su, our senior China correspondent, they ask: What does the Party’s treatment of this tiny community tell us about ethnic policy in Xi Jinping’s China?

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

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

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Chinese leader Xi Jinping calls for ‘deep reflection’ on frequent accidents as deadly Jiangxi fire makes it 3 in a row

https://www.scmp.com/news/china/politics/article/3249751/chinese-leader-xi-jinping-calls-deep-reflection-frequent-accidents-deadly-jiangxi-fire-makes-it-3?utm_source=rss_feed

Chinese President Xi Jinping has called on local authorities to “curb the trend of repeated” accidents, calling for “deep reflection” after a fire in Jiangxi province became the third deadly tragedy to hit the country in less than a week.

Wednesday’s blaze at a shophouse in Xinyu city claimed at least 39 lives. Nine other people were injured, with eight of them in stable condition, state news agency Xinhua reported.

Local media said a number of college students studying for an exam were among the casualties.

Local police had detained 12 people, including the owner of the exam training centre on an upper floor, Xinhua said on Thursday morning.

It was the latest major accident to hit China since Friday, when 13 children were killed after a fire broke out at a primary school dormitory in central Henan province. Teachers said all of the victims were third-graders, or about nine years old.

On Monday, a landslide in southwestern Yunnan province buried a mountain village, trapping dozens under the rubble and prompting a call from Xi for “all-out” search and rescue efforts. The death toll had risen to 34 as of Wednesday evening, with at least 10 people still missing.

Hours after the Xinyu fire, Xi urged authorities to “find out the cause as soon as possible, seriously investigate it in accordance with the law, and make a deep reflection”, according to Xinhua.

“[The authorities] should curb the trend of repeated and consecutive occurrences of various safety accidents,” Xi said on Wednesday night, while urging local governments to help ensure social stability.

Xu Hong, the mayor of Xinyu, a city of 1.2 million, said that the blaze was sparked after renovation workers “illegally lit a fire” in the basement of the building. The fire then spread to street-level shops and a hotel on the first floor, as well as the exam training centre.

“We apologise to the families of the victims, the injured and their families,” Xu said on Thursday morning.

Eyewitnesses quoted by mainland media said classes were being held on the first floor when the fire broke out on Wednesday afternoon, with flames blocking the only exit staircase. Videos circulating on social media showed several people jumping out of windows to escape the blaze.

The building is in an old residential area, with no property managers in charge, local media said.

The second deadly fire within a week sparked widespread concern online, with several fire-related hashtags trending on Chinese social media platform Weibo.

Multiple trending posts questioned whether safety checks in Xinyu were adequate.

Web users also raised questions about the infrastructure and fire prevention capabilities of the stricken school in Henan. Local police later detained seven staff.

The back-to-back blazes occurred just two months after another deadly fire that drew comment from Xi.

In November, 26 people were killed when a fire broke out at a mining company office in the central province of Shanxi, China’s coal hub, in one of the country’s deadliest workplace accidents in recent years.

Xi had then also urged officials to identify risks and improve emergency plans to “curb major accidents”.

Following the Yunnan landslide, he called on local bodies to be alert for natural disasters, traffic accidents and work safety incidents amid a cold wave sweeping southern China ahead of next month’s Lunar New Year travel period, so as to “effectively ensure the safety of people’s lives and property”.

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Hong Kong police arrest 13 on suspicion of medical voucher fraud, including 7 traditional Chinese medicine practitioners

https://www.scmp.com/news/hong-kong/law-and-crime/article/3249767/hong-kong-police-arrest-13-suspicion-medical-voucher-fraud-including-7-traditional-chinese-medicine?utm_source=rss_feed

Seven practitioners of traditional Chinese medicine were among 13 Hongkongers arrested on suspicion of using government-issued medical vouchers to pay for non-existent consultations, police revealed on Thursday.

Some of the vouchers belonged to residents who had recently died, according to the force.

Apart from the seven practitioners, four suspects were relatives of deceased residents, while the remaining two taken into custody were either staff members or operators of two dispensaries, according to the force, adding the alleged fraud amounted to more than HK$40,000 (US$5,115.).

Following a referral by the Department of Health about the potential misuse of the vouchers, police launched an investigation, which led them to focus on seven dispensaries, all located in Tseung Kwan O.

The stores offered consultations by registered herbalists, as well as traditional Chinese medicine and dried seafood.

Senior Inspector Chan Kwong-hei of the Tseung Kwan O district crime squad said the practitioners allegedly conspired with family members of deceased voucher holders to use the remaining balance.

“Some family members brought the identity cards of their deceased relatives to support the use of the remaining balance at these stores,” he said. “During the process, unscrupulous practitioners allegedly colluded with these family members to forge signatures on the consent forms in order to deceive the government subsidy [scheme].”

Hong Kong pharmacy operator accused of providing illegal voucher cash-in bid

A source familiar with the case said the claims involved more than 10 voucher holders, all dead.

He said some store operators allegedly took advantage of elderly people who did not want the vouchers to go to waste and convinced them to use the remaining balance to buy products.

“These stores sold items such as dried seafood and medication at prices about 10 times higher than the market price,” the senior inspector said.

Chan said the operators were suspected of instructing the elderly residents to falsely claim they had received medical consultation services.

Hong Kong man arrested for pretending to be Covid patient to get free medication

He added that the operators then allegedly conspired with registered herbalists to claim relevant voucher subsidies and embezzle public funds, with the practitioners taking a share of the proceeds.

After gathering evidence, police apprehended nine men and four women in a series of raids on Wednesday and Thursday.

The suspects, aged 40 to 83, were detained on suspicion of conspiracy to defraud – an offence punishable by up to 14 years in jail. The suspects have been released on bail pending further investigation.

Acting chief inspector Chan Yu-wing said using illegal means to deceive the government by misusing healthcare vouchers would “waste resources intended to assist the elderly, go against ethical principles and potentially constitute fraud”.

“The healthcare voucher scheme must be used to uphold the health of the elderly and alleviate pressure on public hospitals, and it should never provide an opportunity for unscrupulous businesses to exploit the vouchers for their personal gain,” she said.

The investigation was still under way and further arrests were possible, she added.

Under the Elderly Health Care Voucher Scheme, introduced in 2009 and made permanent in 2014, eligible residents aged 65 or older are given a HK$2,000 voucher each year to help pay for certain medical services in the private sector, including consultations with traditional Chinese medicine practitioners.

Users must receive healthcare services in person before they can use their vouchers to settle fees. Vouchers cannot be used for purchasing products, redeemed for cash, or shared with others.

Wedded miss: China mother pressures son into marriage with suicide threat, couple divorce after 6 months

https://www.scmp.com/news/people-culture/trending-china/article/3248502/wedded-miss-china-mother-pressures-son-marriage-suicide-threat-couple-divorce-after-6-months?utm_source=rss_feed

A mother in China who pressured her son into marriage by threatening to take her own life has seen her extreme form of coercion backfire.

In what many people on mainland social media said was an expected outcome, the marriage only lasted six months, according to a report by Wenzhou City Daily.

The failed marriage has reignited online discussions about so-called “vowels couples”, denoting poorly matched people who cannot or refuse to communicate with each other and are reduced to using vowel sounds like “uhm” and “ah”.

It was coined by therapists at the Seventh People’s Hospital in Wenzhou, Zhejiang province in the east of the country.

In the “suicide threat” case, a man, nicknamed Xiaojin, from Wenzhou married due to pressure from his mother as he approached his 30s.

Despite lacking an emotional connection with his wife-to-be and being reluctant to discuss marriage, Xiaojin was coerced into tying the knot after his mother threatened to kill herself.

Not only did the mismatched couple fail to communicate properly, they also argued over who was responsible for domestic chores, to such an extent that both refused to have sex.

The “vowels couples” phenomenon and the increasing trend of forced marriages point to a broader societal issue in China.

While the number of marriages in the country has significantly decreased, from approximately 13.5 million couples in 2013 to 6.8 million in 2022, many Chinese parents, driven by traditional views and societal expectations, pressure young people into marriage for fear of losing face or concern about their child’s future.

However, this approach often worsens the situation.

One online observer said: “This is typical Chinese-style marriage pressure. Love doesn’t matter, just get married, happiness doesn’t matter, just get married.”

“It’s the mother who should see a therapist, but she’ll probably blame the son’s wife and keep pressuring him to remarry,” said another.

A third shared their approach to dealing with the situation: “My mum once cried, saying she didn’t want to live if I didn’t get married.

“I responded, ‘Let’s die together then, as I don’t want to live either.’ After that, she stopped the drama, and there were no more discussions.”

“Many parents force their children to marry just to fulfil their own desires, never considering their children’s feelings or happiness. They say it’s for their children, but it’s actually selfishness,” said a fourth.

US House panel renews push to punish trade fraud by Chinese companies, warning of ‘catastrophic impact’ on manufacturing

https://www.scmp.com/news/china/diplomacy/article/3249729/us-house-panel-renews-push-punish-trade-fraud-chinese-companies-warning-catastrophic-impact?utm_source=rss_feed

A US House of Representatives committee focused on China has made a renewed push for action against alleged trade fraud conducted by Chinese companies, days after federal agents raided a US subsidiary of a Chinese company.

But observers have said that the lack of precision in the rules determining fraud makes it hard to prove violations.

The US House Select Committee on the Chinese Communist Party said this week that tariff evasion by Chinese companies was having a “catastrophic impact” on American manufacturers and raised concerns that relevant fines and penalties were not being enforced.

They cited disclosures from Chinese automotive industry supplier Qingdao Sunsong, noting that the effect of outsourced processing in Thailand added between 4 to 8 per cent of the declared value of assembly between 2019 and 2021, which they argued was “far below” the “substantial transformation” threshold used to determine the origin of goods produced in multiple countries.

US House panel targeting Chinese influence makes its mark, to mixed reviews

In September, the House committee wrote to Secretary of Homeland Security Alejandro Mayorkas, claiming that Qingdao Sunsong was evading US tariffs by transhipping their products through Thailand and having them enter the country under the guise of being Thai-made goods.

Last week, local media reported that the Department of Homeland Security executed a federal search warrant for Harco Manufacturing Group, a firm based in Moraine, Ohio that was acquired by Qingdao Sunsong in 2015.

The homeland security department declined a request to outline the nature of the warrant, noting there was “an ongoing investigation and no further information is available at this time”.

In 2018 and 2019, then US president Donald Trump imposed four rounds of tariffs on Chinese imported goods under Section 301 of the Trade Act of 1974, ultimately affecting an estimated US$550 billion in annual trade value.

Joe Biden’s administration has so far kept these tariffs in place, though it is in the process of conducting a four-year review of them.

US House panel urges moving China to ‘new tariff column’

In recent years, Chinese manufacturers have been accused of shipping their products to countries that do not face additional tariffs, where the products would undergo minor or no changes then be labelled as made outside China and shipped to the US.

In 2019, Vietnam announced it would crack down on goods of Chinese origin illegally labelled as being “made in Vietnam”.

Identifying the origin of a product is important in determining if it is eligible for preferential tariff rates. When a good does not come entirely from a single country, the internationally recognised legal principle of substantial transformation – whether the product has undergone a fundamental change – is used to determine the product’s origin.

Substantial transformation is often defined in value terms or a change in tariff classification, which involves looking at the materials used in the final product. But the process to determine it is complex and without standardised thresholds, and there has been little data on the extent to which tariff evasion through transshipment is happening.

Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, said that the committee’s allegations fell “far short” of proving that Qingdao Sunsong was deliberately evading US Section 301 tariffs.

“It requires detailed investigation to determine whether substantial transformation has taken place,” he said.

But according to Jayant Menon, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore, Chinese firms have a great incentive to try to evade tariffs.

“New firms try this because the US is a very important market and the ‘Made in China’ tariffs are still quite significant,” he said.

Menon added that the lack of precision in the rules made them prone to manipulation on both sides.

“If countries want to increase barriers against a particular country, then the way in which these rules are implemented can be varied to serve that purpose,” he said.

Qingdao Sunsong did not respond to a request for comment.

Why China must waste no time in pivoting to a consumption-based economy

https://www.scmp.com/comment/opinion/article/3249150/why-china-must-waste-no-time-pivoting-consumption-based-economy?utm_source=rss_feed

China’s 2023 economic data, just released by the National Bureau of Statistics, turned up few surprises. Gross domestic product grew by 5.2 per cent year on year in the last quarter and in 2023. While economists debate the veracity of this, there is a bigger issue at stake: weak consumption.

Wage growth tends to lag behind productivity gains and it gets worse when gross domestic product grows faster. This is an issue at the heart of China’s economic malaise.

Consumption has fallen as a proportion of China’s economy, estimated to make up just 53 per cent of GDP in 2022, down from over 63 per cent in 2000, and 65 per cent in 1980. For decades, China’s blistering economic growth has come not from consumers but from investment – and there is such a thing as too much of it, especially when investments become unproductive.

China’s investments make up a big proportion of its GDP, at an estimated 42.5 per cent last year, from 33.7 per cent in 2000, and 35 per cent in 1980. For too long, infrastructure and manufacturing have been two of the biggest pots for that investment.

But while expanding public investment can help ease infrastructure bottlenecks, scaling up too fast can be inefficient. It is difficult for infrastructure investments to be absorbed as they are costs of growth more than sources of growth.

Infrastructure investments make local government officials look good but there are significant diminishing returns as provinces become saturated with it. The overflowing public debt in high-growth Guizhou is a good example.

On the other hand, China’s overt focus on manufacturing comes with two costs. First, it means a greater dependence on exports, which requires a weaker yuan. This raises the cost of imports and thus reduces the purchasing power of households, shifting wealth from consumers into manufacturing.

Second, the model is unsustainable as the rest of the world struggles to absorb the enormous trade surplus China generates.

To make up for the lack of consumption, China must rely increasingly on investment, which it props up with extensive subsidies. Though official comments on the 2023 data claim there was no massive economic stimulus, that China’s debt-to-GDP ratio has risen to a record high suggests otherwise.

Subsidies are problematic because they obscure the costs (and therefore value) of investment, and in effect transfer wealth from households into investment and manufacturing. Worse, many of these investments are failing, hence the official clampdown on local government financing vehicles (LGFVs).

Designed to subsidise and generate investments for states, LGFVs have been hit by poor returns and caught in the property slowdown. LGFVs now have massive debt obligations linked to infrastructure investments. The net result is a destruction of wealth.

There are parallels with Japan in the 1980s and Brazil in the 1950s and 1960s, when both countries ran economies based on heavy subsidies for investment.

Japan drove growth through low interest rates and a devalued currency, which improved exports but hurt imports, and therefore consumption. Brazil drove growth with investment and subsidised it with high income taxes, which also hurt consumption. Very quickly, both ran out of investment opportunities and their economies, with minimal consumption to keep them up, collapsed.

China is edging close to these cautionary tales.

Maintaining China’s high GDP growth under the current model would require more investment growth and manufacturing, which requires more transfers of wealth from households and higher debt. In this vicious circle, already hurting households will have to hurt some more just to keep the ship afloat.

There are mixed signals in the government’s comments on its willingness to fix the issue. For one, China wants to strengthen the renminbi, as President Xi Jinping noted in a recent speech on financial reforms. This is productive, because a weak currency is an implicit tax on households to subsidise manufacturing growth.

Yet China also intends to introduce more subsidies, even if gradually. This is part of the problem, not the solution. Barring a miraculous new field of investment opportunities, more subsidies for investment will do nothing to improve consumption. Much is at stake, as we saw from Japan’s and Brazil’s “lost decades”.

At the risk of oversimplifying a complex subject, China has an array of tools to fix its economic woes, some of which require major shifts in its policy mindset.

To reboot China’s economy, Beijing must have the confidence to let go

First, abandon its subsidy-based investment growth model by pivoting to boosting consumption’s share of GDP. This also means embracing lower GDP growth as a difficult but necessary medicine towards a more sustainable model of growth based on consumption.

Second, it will allow China to cut subsidies and misallocated investments, reversing transfers to contribute to consumption, rather than drain it.

Third, strengthen the yuan to lower the cost of imports and improve consumption. Pumping more subsidies into manufacturing will help exports but hurt consumption.

Finally, urgently improve household wealth and income. As many economists have pointed out, one way is to increase market efficiency and increase household participation in markets. This captures a range of long-term solutions already proposed, such as improving trust and transparency in markets.

But there are also some unorthodox ones, such as transferring ownership of companies to households. While many might decry this as extreme, given China’s economic woes, extreme might just be the new rational.

China, Singapore agree visa-free deal for travel stays of up to 30 days

https://www.scmp.com/news/china/diplomacy/article/3249746/china-singapore-agree-visa-free-deal-travel-stays-30-days?utm_source=rss_feed

China and Singapore will introduce a 30-day mutual visa exemption agreement from February 9 – Lunar New Year’s Eve – allowing citizens of the two countries to travel, visit families and go on business trips.

The agreement was signed by representatives from the two countries on Thursday, according to China’s state broadcaster CCTV.

Mainland Chinese citizens have always needed a visa to enter Singapore, while Singaporeans could visit China for up to 15 days for non-work purposes – an arrangement that was reinstated in July after its suspension during the Covid-19 pandemic.

Travellers from both countries who want to work, report the news or stay longer than 30 days will still require a visa, CCTV said.

More to follow …

China’s PLA watches as US warship sails through Taiwan Strait in ‘provocative’ move

https://www.scmp.com/news/china/military/article/3249719/pla-watches-us-warship-sails-through-taiwan-strait-provocative-move?utm_source=rss_feed

A US Navy warship transited the Taiwan Strait for the first time since the self-ruled island’s elections, a move the People’s Liberation Army said was “provocative” and “maliciously undermined” peace and stability.

In a statement, Senior Colonel Shi Yi, a spokesman for the PLA’s Eastern Theatre Command, said the USS John Finn, an Arleigh Burke-class destroyer, had sailed through the strait on Wednesday.

He said the PLA monitored the US Navy vessel “throughout the entire process, and dealt with it in accordance with laws and regulations”.

“Recently, the US military has frequently carried out provocative actions and maliciously undermined regional peace and stability,” Shi said. “Troops in the theatre remain on high alert at all times and resolutely safeguard national sovereignty and security as well as regional peace and stability.”

The US Seventh Fleet said the destroyer had conducted the transit in waters where “high-seas freedoms of navigation and overflight apply in accordance with international law”.

“The ship transited through a corridor in the strait that is beyond the territorial sea of any coastal state. John Finn’s transit through the Taiwan Strait demonstrates the United States’ commitment to upholding freedom of navigation for all nations as a principle,” Vice-Admiral Karl Thomas, commander of the Seventh Fleet, said in the statement.

“No member of the international community should be intimidated or coerced into giving up their rights and freedoms. The United States military flies, sails and operates anywhere international law allows.”

It is the first time in a month that the US Navy has passed through the Taiwan Strait. In December, the Seventh Fleet’s P-8A Poseidon maritime patrol and reconnaissance plane flew over the strait, prompting the PLA to send fighter jets to monitor and warn the US aircraft.

Wednesday’s transit was also the first by the US military since William Lai Ching-te, of the independence-leaning Democratic Progressive Party, was elected president of Taiwan on January 13. It is an unprecedented third term in power for the DPP, after Beijing had warned that re-electing the party could raise the risk of conflict across the strait.

Beijing sees Taiwan as part of China to be reunited – by force if necessary. Most countries, including the US, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the island by force and is committed to arming it.

Beijing and Washington have attempted to improve their damaged relations in recent months, with leaders Xi Jinping and Joe Biden pledging to restore military communications during talks in San Francisco in November. Military dialogue was suspended after Nancy Pelosi visited Taiwan in August 2022 when she was US House speaker, angering Beijing.

The two powers have made progress on military talks, including a conversation last month between General Charles Q. Brown, chairman of the US Joint Chiefs of Staff, and his Chinese counterpart General Liu Zhenli.

But military posturing in the region has continued. The US has deployed its third aircraft carrier, the USS Theodore Roosevelt, to the Seventh Fleet, which operates in the Indo-Pacific, the US Naval Institute’s online news portal USNI News reported on Tuesday.

Meanwhile, PLA activities have resumed around Taiwan, with aircraft making regular sorties near the island after a brief pause when the elections were held.

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China’s Lunar New Year travel surge to boost economy, but property market and private firms remain top priority

https://www.scmp.com/economy/economic-indicators/article/3249720/chinas-lunar-new-year-travel-surge-boost-economy-property-market-and-private-firms-remain-top?utm_source=rss_feed

From Friday, billions of Chinese are expected to join the world’s largest human migration, which is set to be the biggest ever as China embraces the first Lunar New Year free from the shackles of the coronavirus.

A record high 9 billion trips are expected to be made within China during the annual 40-day chun yun travel period, the Ministry of Transport said last week, with family reunions, sightseeing and leisure activities on the agenda.

But while official figures suggest a robust rebound in transport, and after catering and hotels were both a major contributor to China’s upbeat 5.2 per cent growth rate in 2023, these bright spots are seen only to be short-term solutions and not enough to spur an entire year’s growth.

And economists said China needs to focus on solving its ongoing property market crisis and helping private firms to ensure similar expansion in 2024 as pent-up demand fades.

‘Growth nothing to write home about’: 7 takeaways from China’s economic data

After a fall of 2.3 per cent in 2022 due to frequent lockdowns under China’s zero-Covid policy, China’s accommodation and catering industry surged by 14.5 year on year in 2023, becoming a major gross domestic product growth (GDP) driver, the National Bureau of Statistics said last week.

It represented the second biggest year-on-year increase in three decades, after the 15.6 per cent rise in 2021, when the industry rebounded from a very low comparison base due to the unprecedented coronavirus pandemic.

China’s transport, warehousing and postal industries also combined to post a strong rally last year, with 8 per cent growth, having fallen into negative expansion in 2022.

The trend is set to continue during the extended eight-day Lunar New Year holiday in February, with travel bookings through major agencies exceeding pre-pandemic levels.

China had lifted its health control measures at the start of 2023, but the Lunar New Year travel period was hit by a surge in coronavirus cases triggered by the reopening.

“There is clear certainty in continuous enthusiasm in travelling during this year’s [Lunar New Year] period, which is also the most important busy season for the catering sector,” Shanghai Securities said on Sunday.

“The performance of the 2024 [Lunar New Year] is expected to catalyse the market’s optimistic expectations for service consumption.”

Hotel bookings for the 2024 holiday via Fliggy Travel were already 160 per cent above the same period in 2019, with group tours up by 34 per cent, the firm said last week.

Average prices for domestic flight have also been pushed to the highest since 2019, Tongcheng Travel said last week.

Air China confirmed this week that it had arranged nearly 1,700 flights per day during the 40-day chun yun travel period to meet the extraordinary demand, representing a 32 per cent increase from 2019.

But while China’s economic growth last year fell in line with its “around 5 per cent” target, a similar goal in 2024 would not be as easy to obtain as low base effects and pent-up demand fade, said Lian Ping, the director general of the China Chief Economists Forum.

“Consumption, which was responsible for a rare high of 82.5 per cent of GDP growth last year, will drop back to normal levels of contributing around 60 per cent this year,” he noted.

“Economic growth will mostly depend on how the private sector performs, whether market risks are eased, and most importantly, if the real estate industry can stabilise.”

The property sector, which saw its added value fall by 1.3 per cent in 2023 compared to a year earlier, has dragged down not only local government revenues, but also numerous related sectors ranging from furniture to textiles.

Local authorities have rolled out a series of supportive measures to stimulate home purchases in the past months, and they may bear fruit in the coming months, Lian added.

But Moody’s Analytics economist Harry Murphy Cruise said last week that ongoing trouble in the property market would hold back private investment as well as consumer spending.

“The success of 2024 will largely be driven by how effective officials are in turning the property market around,” he said.

“Absent the monster spending splurge of years gone by, real estate investment, dwelling prices and new dwelling sales are set to fall throughout 2024.”

China’s traditional exports have also slumped in the past year amid intense geopolitical and economic volatility, and would also not be a driving force this year as global economic prospects remain weak, said Zhang Jun, dean of the School of Economics at Fudan University in Shanghai.

China’s three-legged race to fend off the 4 D’s of an economic apocalypse

“We should focus on the sectors that failed to fully recover in 2023,” he said, pointing to China’s millions of small and medium-sized enterprises (SMEs), which suffered great losses during the pandemic and have yet to return to normal.

“Local governments are no more financially capable of building infrastructure, as they often involve big money and bank loans, which may further weigh on the economy,” he added.

“Instead, they’d better make full use of the resources at hand to help SMEs and individually-owned businesses, which may bring more direct results to the economy.”

Following years of borrowing, many local governments are under tremendous debt burdens due to the economic downturn and free fall in the property sector.

A confidence deficit among private businesses has also been widely regarded as a major challenge for China since its reopening last year, with most of the firms the SMEs which contribute over 60 per cent to China’s GDP and account for 80 per cent of jobs.

2024 AFF: China’s policies to boost bonds and wealth management will help Hong Kong’s companies and home buyers, delegates say

https://www.scmp.com/business/banking-finance/article/3249707/2024-aff-chinas-policies-boost-bonds-and-wealth-management-will-help-hong-kongs-companies-and-home?utm_source=rss_feed

Hong Kong’s role as the trading hub for offshore yuan will get a leg up from the policies unveiled by the People’s Bank of China to enhance wealth management and the Bond Connect transborder investment channel, according to speakers at the Asian Financial Forum (AFF).

The new policies will also benefit Hong Kong’s developers as they relaxed cross-border payment rules between the 11 cities of the Greater Bay Area to make it easier for the residents of Hong Kong and Macau to buy homes in southern China, said New World Development’s Chief Financial Officer Edward Lau Fu-keung.

“It is very beneficial to companies and other stakeholders,” Lau said during a panel discussion on the second day of the AFF in Hong Kong. “It is particularly helpful for companies like New World, with a strong presence in the Greater Bay Area,” as it stimulates transactions, he said.

Another new policy known as cross-boundary credit referencing will allow banks in Hong Kong and the mainland to share credit information of the companies.

“This will facilitate companies to do cross border financing and allow Hong Kong companies to take the cheap funding,” Lau said.

The policies will be a boon for central bank digital currencies such as Hong Kong’s e-HKD and the mainland’s e-CNY, as they get the go-ahead for simultaneous trials in the city.

The expansion of the Bond Connect allows foreign investors to use onshore bonds as collateral for yuan-denominated funding from the Hong Kong Monetary Authority. They will also get access to the onshore repo market. Both policies will be implemented on February 26.

These measures would help bond investors to enjoy better liquidity and help them better manage their portfolio risks, and hence will encourage more foreign investors to buy in the onshore yuan bond, said Karen Ng, managing director, China opening and RMB internationalisation of Standard Chartered.

HKMA nudges e-HKD with consultation on merits of digital currency

Ding Chen, CEO of CSOP Asset Management, said the new measures announced by the PBOC on Wednesday and other developments in the Greater Bay Area will attract more overseas investors to trade in yuan and will also strengthen Hong Kong’s role as an offshore yuan trading centre.

“Hong Kong is the central part of the GBA and the development of the GBA will greatly improve the ecosystem of renminbi internationalisation,” Ding said. “This is because of the capacity that Hong Kong can easily access to the wealth of GBA. All these policies are [key in] promoting the global influence of the renminbi.”

Hong Kong can provide more investment products and risk management tools to meet the need for investors to manage their yuan portfolio, Ding said.

‘Higher quotas, more choice’ are key to Wealth Management Connect scheme

Alson Ho, head of Hong Kong Wealth Management at Standard Chartered said the new enhancement measures of the Wealth Management Scheme to be implemented from February 26 will boost sales.

The relaxation will allow residents in the nine Guangdong provincial cities that make up the GBA to invest up to 3 million yuan (US$420,000) each in Hong Kong’s wealth management products, triple the previous limit under the scheme. It will also expand product sales under the scheme to include the Greater China equities funds.

“The expansion of quota and products will encourage more wealth management clients to invest in the scheme,” Ho said at the AFF. “The relaxation of the sales process to allow banks to introduce products would also be important to boost sales.

The devil in Greater Bay Area’s blueprint stunts cross-border wealth plan

Introduced in September 2021, the Wealth Management Connect scheme allows cross-border trading of investment products, but sales were poor due to the pandemic. Limited choices in the financial products and tough restrictions also sapped investors’ interest. New enhancement would solve the problem, Ho said.

UBS’ Asia chairman of global wealth management Amy Lo Choi-wan also welcomed the enhancements but wants the quota to rise further.

“It would need to increase the quota to US$1 million (HK$7.8 million) to make the scheme relevant to the private banking and wealth management sector,” she said on Wednesday in another panel at the AFF.

Alfresco blind dating takes hold among young in China who see rigours of outdoor activity as effective test of character

https://www.scmp.com/news/people-culture/trending-china/article/3248594/alfresco-blind-dating-takes-hold-among-young-china-who-see-rigours-outdoor-activity-effective-test?utm_source=rss_feed

A new recreational activity that combines blind dating and outdoor sports is becoming increasingly popular among young people in China.

Those who sign up for the activities believe a physically demanding environment is the fastest way to see the true character of a date.

It is also seen as a great way to have fun even if they fail to find a romantic partner.

On the mainland social media platform Xiaohongshu, a woman known as @Yangmaomao shared her tips for finding “Mr Right” at an outdoor blind date event.

“Fix your eyes on the men who are mostly quiet but volunteer to help others when they get in trouble. You can rely on such guys,” she said.

The idea was thought up by outdoors enthusiasts amid the tourism boom in open-air activities last year.

At that time travel agencies began organising one-day dating tours that became so popular that places had to be booked weeks in advance.

A single woman who goes by the tag @Fuguibansheng shared her experience of taking part in a one-day dating tour in Beijing.

She discovered that the trip, which cost her 168 yuan (US$24), really did make it easier to connect to people.

The woman began her day on a bus in which the passengers were seated in pairs and shared basic information about themselves, such as where they live and what they do for a living.

When the coach arrived at a rural destination, group games were organised to break the ice, before people were again divided into pairs to hike up a mountain.

@Fuguibansheng’s date offered her his hiking pole, and she said it made her feel good, adding: “Kindness is a good start to a romantic relationship.”

Many believe the physically demanding conditions of outdoor activities mean people do not have the energy to create a facade as they might during a traditional blind date at a restaurant or cinema.

The conditions could also be an effective way of testing a person’s character through their reactions to unexpected situations.

A 35-year-old woman called Sally said her date carried her across a stream after she hurt her foot on a rock. She felt she was being well looked after – something she said she had not felt for a long time.

China’s single population over the age of 15 reached 239 million in 2022, according to the China Statistical Yearbook.

Research by the Chinese consulting firm BDR, found that the online matchmaking business has grown in recent years, with more than 33 million people registering with online dating services by the first half of 2022.

For many young people, China’s dropping marriage rate - the number of people tying the knot has been dropping since 2014 and hit a record low of 6.83 million in 2022 - did not necessarily represent an unwillingness to wed.

Rather, they chose to not rush into marriage despite pressure coming from their parents and wider society but were seeking love at their own pace.

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EU says any retaliatory trade probe by China must be ‘based on facts’

https://www.scmp.com/news/china/article/3249697/eu-says-any-retaliatory-trade-probe-china-must-be-based-facts?utm_source=rss_feed

China must stick to the facts if it is to launch trade investigations into European products. That was the message from the European Union’s trade chief Valdis Dombrovskis in an interview in Brussels on Wednesday, in response to a veiled Chinese threat that it would retaliate over the bloc’s trade measures against it.

The EU is investigating industrial subsidies in China’s electric vehicle sector, which could result in duties being imposed on their imports, while it is rumoured that other products are being lined up for scrutiny.

In what was seen as a retaliatory move, China started an investigation into French cognac this month. Its envoy to the EU, Fu Cong, told Bloomberg on Wednesday that “there are many things that could be subject to investigation” if China chose to follow the EU approach, fuelling fears that a trade war is in the works.

“Something I’ve emphasised in my contacts with Chinese counterparts is that our investigation is going to be based on the rules and based on facts and figures, so it’s not arbitrary,” said Dombrovskis, who is from Latvia.

“Countries may have trade disputes, that is not unheard of, but it’s important that we follow rules and procedures to address them … I am emphasising the need for all sides to stick with a rules-based, facts-based approach.”

He warned Beijing, however, that the bloc would respond if China did not positively address EU demands over market access for European firms in China and overcapacity in the Chinese economy.

“There are no preset timelines … we are doing our assessments and decision-making on a case-by-case basis,” Dombrovskis said when asked how long the EU would give China before taking action.

He added that “we are going to be more assertive and act if we see objective reasons to act, and we see other countries not following internationally agreed rules”.

Dombrovskis was speaking after announcing an update to the EU’s economic security strategy, the flagship element of European Commission President Ursula von der Leyen’s move to de-risk ties with China.

China-EU trade disputes on table as Beijing pursues ‘strategic trust’: analysts

He admitted that some of the bloc’s 27 member states had been “cautious and critical” of a commission plan to implement outbound investment controls on private capital going into some hi-tech sectors in perceived risky markets, such as China.

Capitals have three common complaints, he said.

The first is the question of “competence between the EU and its member states”, with national security powers resting squarely with the 27 member governments. “We do not want to impinge on this competence,” Dombrovskis said.

Other members worried that the economic security drive would “become a pretext for protectionism”, while still more worried about the “administrative burden” placed on national bodies.

Wednesday’s release was meant to address these concerns, launching an extensive consultation and monitoring approach to build a body of evidence for outbound investment trends, Dombrovskis said.

Only after these are complete will the commission “discuss if and what kind of measures we need. I am not rushing to conclusions before we have some data and evidence,” he said.

In a reflection of the challenge facing Brussels in convincing member states, Hungarian foreign minister Peter Szijjarto on Tuesday panned its de-risking agenda.

“The ideas of decoupling, de-risking, isolating eastern and western economies are something we definitely do not support,” he said, adding that investment screening was a “political procedure”.

“We see many hostile statements towards the Chinese investments that are sometimes used as instruments by those member states who are not competitive enough,” Szijjarto said.

EU to unveil forced labour ban amid pushback over Xinjiang

As part of Wednesday’s package, the European Commission wants to tighten rules on investments into the EU as well. If approved by members, it would see mandatory screening of all investments into sensitive sectors, including solar photovoltaic and batteries, two industries in which China is dominant.

Dombrovskis also hoped that a forced labour ban would be finalised before elections in June, saying there was a willingness among the European Parliament and Council to come to a common position.

The commissioner, who has already announced that he would run for a seat in the European Parliament in June, said he would welcome the shot at another five-year term in the trade post to deliver the economic security strategy.

“Given the opportunity, I would be interested to continue working in the commission,” he said.

China sees hi-tech innovation as a boon for its global competitiveness and manufacturing dominance

https://www.scmp.com/economy/china-economy/article/3249642/china-sees-hi-tech-innovation-boon-its-global-competitiveness-and-manufacturing-dominance?utm_source=rss_feed

In the face of Washington’s tech-containment efforts, Beijing has unveiled a new strategy to turn home-grown innovations into commercialised products that it hopes will compete with international offerings.

The ambitious plan, unveiled on Tuesday, will revolve around forming five advanced pilot-scale production facilities that are intended to help China climb up the global value chain and consolidate its status as the world’s top manufacturer.

“We need to promote the simultaneous development of pilot-scale trials, innovation chains and industrial chains to provide strong support for the high-quality development of the manufacturing industry,” the Ministry of Industry and Information Technology said.

China’s economic malaise, stock slump raises alarms: ‘Where do we go from here?’

Pilot-scale production is a process linking laboratory research with mass production. And Beijing considers this vital as it strives to cultivate various speciality giants to strengthen the resiliency of its supply chains and also catch up in areas such as artificial intelligence, quantum computing and biomedical manufacturing.

The ministry said it would increase the supply of products commonly used in pilot tests, including precise measuring instruments, high-end testing equipment and design simulation software.

“We will prioritise testing materials, products and equipment with major application prospects and high value-added [benefits] … for an industrial restructuring,” it added.

Also, manufacturers were urged to increase their use of machine-learning, artificial intelligence and digital technologies in pilot tests, and to share data with suppliers, in a bid to shorten research-and-development cycles while reducing related costs.

Peng Peng, executive chairman of the Guangdong Society of Reform, called these pilot tests “a crucial step toward converting scientific research into real-life production”.

“China has the world’s top-ranked volume of published papers and numerous patents for inventions, but they are put on the shelf without mass applications,” he said. “Apart from insufficient input in R&D, most Chinese manufacturers are pursuing quick market results, but are impatient with pilot research.”

And Peng said it was inevitable that Beijing would take the lead in strengthening manufacturers’ willingness to carry out pilot experiments if China wants to improve the conversion rate of scientific results while addressing vulnerabilities in its industrial chains.

China has long strived to enhance its industrial development, which helped turn the nation into the so-called world’s factory and sent China-made products to every corner of the world.

China cuts banks’ reserve ratio, signals more tools in pipeline to quell fears

But in the last several years, challenges have intensified. Many manufacturers in low-end industries are shifting to more cost-effective neighbouring countries such as Vietnam and India, while the US and its allies have intensified tech curbs, as seen in its restrictions placed on shipments of high-end chips.

Currently, only 37.3 per cent of China’s industrial companies with annual revenue greater than 20 million yuan (US$3.07 million) have carried out research-and-testing activities, according to the ministry.

National spending on R&D accounted for 2.64 per cent of China’s gross domestic product last year, according to data provided by the National Bureau of Statistics. In comparison, the percentage is lower than the 3.46 per cent in the US and 4.93 per cent in South Korea back in 2021, according to the most recently available World Bank data.

Tuvalu election: what’s happening, and what could it mean for Taiwan, China and the Pacific?

https://www.theguardian.com/world/2024/jan/25/tuvalu-general-election-2024-impact-china-taiwan-pacific-relations-prime-minister-kausea-natano-seve-paeniu

On Friday, the small Pacific island nation of Tuvalu will head to the polls to elect members of its 16-seat parliament.

With the country’s population sitting at just over 11,000, Tuvalu’s elections rarely spark international headlines. But, against a backdrop of intense geopolitical competition and China’s rising influence in the region, greater scrutiny surrounds this year’s vote – and its outcome may have implications far beyond Tuvalu’s shores.

What is happening?

Candidates in Tuvalu are battling for one of the two seats in each of Tuvalu’s eight island electorates. Many islands have fewer than 1,500 eligible voters, and often only a handful of votes separates the winners and losers in each electorate.

There are no political parties in Tuvalu, and candidates are all running as independents. Once counting is over – which is expected some hours after polls close on Friday – a period of complex negotiations will begin, where the 16 newly elected parliamentary members develop factions. The largest group will form a government and elect the prime minister.

As a result, even if the current prime minister, Kausea Natano, successfully defends his seat of Funafuti, he may not be re-elected as the nation’s leader. In fact, Natano’s finance minister, Seve Paeniu, is aiming for the prime ministership himself, and has already secured a seat in parliament by running unopposed in his electorate of Nukulaelae. He says he has begun talks with other candidates in an attempt to seal his leadership.

Opposition leader Enele Sopoaga is also vying for another term as Tuvalu’s prime minister, having lost his prime ministership to Natano in the previous 2019 election.

What could the outcome mean for China and Taiwan?

Tuvalu is one of only 12 countries in the world that maintains diplomatic relations with Taiwan. The nearby Pacific nation of Nauru switched its allegiance from Taiwan to China earlier this month, just days after presidential elections in Taiwan.

There is speculation that Tuvalu may do the same following its elections on Friday, though Taiwan’s foreign ministry official Eric Chen condemned such rumours. “The Tuvalu government once again emphasised that it will firm up diplomatic ties with us,” said Chen at a recent press briefing.

Sopoaga, who has served as Tuvalu’s ambassador to Taiwan, told the Guardian he “strongly believe[s] Tuvalu should continue to recognise Taiwan as a sovereign independent state and a diplomatic friend”.

However, Paeniu said if he were to become prime minister, he would “review” the country’s relationship with Taiwan and China, to ensure Tuvalu’s foreign policy was the most beneficial to the country.

“Even within our government that has led Tuvalu for the past four years, we also have different and differing opinions on certain topics, including the Taiwan-China issue,” he told the Guardian. “So I take the view that this is something that is open for review.”

Mihai Sora, a research fellow from the Pacific Islands programme at the Lowy Institute, an Australian thinktank, said that since 2016 there had been a global acceleration of countries forfeiting their support of Taiwan in favour of China, and elections often marked an “inflection point” for new governments to make “major changes in foreign policy”.

“The Taiwanese government would be quite concerned that this [election] might bring about another potential change, and it might result in the loss of another diplomatic partner, which is an ever-dwindling number for Taiwan, around the world,” Sora said.

Results from Tuvalu’s election are expected on Friday night, with a government expected to be formed in the days that follow.

What could the election mean for Australia’s treaty with Tuvalu?

Foreign policy is expected to play a large part in the leadership bids of the candidates, and a migration and security treaty signed between Tuvalu and Australia in November is weighing heavily on the vote.

The deal is yet to be ratified by either country, and has led to heated debate in Tuvalu’s parliament. Opposition leader Sopoaga says he would scrap the deal if elected as prime minister.

“The arrangement is one-sided, it’s all to do with what Tuvalu must commit [to], but Australia is not committing [to] anything at all,” Sopoaga told the Guardian.

Meanwhile, Paeniu – who was instrumental in negotiating the agreement with Australia – says he would continue to support the treaty and ensure it comes into force if elected as prime minister. However, he said he would make “slight modifications” to a controversial element of the agreement that states Tuvalu must “mutually agree with Australia” if it wants to strike a deal with any other country on security or defence-related matters.

“That’s something that would need to be negotiated with Australia,” Paeniu said.

Sora describes the situation as a potential “stress point” for Australia. “It’s a tense moment for Australian diplomacy in some respects,” Sora said. “I would expect that that agreement will come under scrutiny in any new government.”

‘Do zero hours of work’: China engineer in New Zealand boasts about skiving off work during office hours, triggers official probe

https://www.scmp.com/news/people-culture/trending-china/article/3248465/do-zero-hours-work-china-engineer-new-zealand-boasts-about-skiving-work-during-office-hours-triggers?utm_source=rss_feed

A woman from China who works for a publicly-owned water company in New Zealand has sparked an online storm after boasting about skiving off work on mainland social media.

Her antics at Wellington Water have touched a raw nerve because they came at a time of water shortages in the country.

The employee, who recently earned a Master’s degree in Operations Research and Analytics, joined the company as an engineer last May.

In a now-deleted video posted on the Xiaohongshu social media platform the woman laid out her plans to be lazy on January 5.

It said: “Council Engineer – Challenge one day slacking off and doing no work. Making money while I play.”

She first noted that on her arrival at the office, it was almost empty, with just one other person in the work area, implying that everyone at the company was slacking off.

She then proceeds to check her emails and says in the video: “Most companies are still on holiday. I completed all my tasks before the Christmas break, so there seemed to be nothing left for me to do other than replying to emails.”

The woman stayed at work until 11:40am, after which she left to go to the cinema and gym as well as visit a car wash, reasoning that “the weather outside looked very nice”.

In conclusion, she wrote: “I spent only 2.5 hours at the office with effective working hours being zero.”

Her actions drew ire from social media observers in China who criticised her lack of responsibility, suggesting that she likely burdened her colleagues with extra work.

However, the woman remained unapologetic, even saying: “In 2024, I hope nothing changes, so I don’t have to work and can still receive my salary.”

In China, a prevalent “skiving off” culture, or mo yu in Chinese, sees employees boldly engage in personal activities during working hours.

The attitude is seen both as a sign of laziness and as a silent protest against low wages, excessive overtime and distorted work cultures.

However, her video quickly spread to New Zealand, where it was reported by a number of media outlets, leaving many locals, struggling with severe water shortage and quality issues, in shock.

Many people expressed their dismay and disbelief online, with comments such as: “Wellington water engineer probably had nothing to do because you guys have no water.”

A spokesperson for Wellington Water confirmed that the employee was part of their team and emphasised that her lax attitude does not represent their wider, dedicated workforce.

“We are now undertaking an internal staff investigation of this employee as part of the organisation’s code of conduct principles. This video is not representative of Wellington Water staff, who are a dedicated team focused on providing water services to our communities 24/7,” reported the New Zealand Herald.

The woman also faced a barrage of criticism on mainland social media, with many labelling her foolish for openly flaunting her laziness.

One person said: “Slacking off is one thing, but bragging about it online? She must have holes in her brain.”

“She is not only lazy but also stupid. Being fired is the right punishment for fools like her,” said another.

Why America’s controls on sales of AI tech to China are so leaky | Business

https://www.economist.com/business/2024/01/21/why-americas-controls-on-sales-of-ai-tech-to-china-are-so-leaky

GINA RAIMONDO seemed frustrated when she took the stage at the Reagan National Defence Forum in California in December. The Department of Commerce, which she leads, had just tightened restrictions on the sale of American semiconductors to China. But Nvidia, the world’s most valuable chipmaker, had immediately started developing a new, slightly less powerful artificial-intelligence (AI) chip for the Chinese market, to which the restrictions would not apply. “If you redesign a chip…that enables [China] to do AI, I’m going to control it the very next day,” Ms Raimondo warned.

That was bombastic, given that it had taken her department a full year to rework the restrictions to cut off Nvidia’s previous workaround. But America’s five-year campaign against Chinese technology is intensifying. Earlier this month it was reported that Jensen Huang, Nvidia’s chief executive, and two fellow chip bosses had been summoned to testify in Congress about their Chinese business. On January 19th ABB, a Swiss industrial group, revealed that American lawmakers were investigating its links with China. ABB said it was co-operating with the investigation; Nvidia has said that it is working closely with the government to ensure compliance with the export controls.

Neither Democrats nor Republicans are likely to relent. In a presidential-election year Joe Biden, the unpopular Democratic president, cannot afford to look weak on China. His Republican predecessor and main rival, Donald Trump, has long been America’s China-basher-in-chief. China hawks in Washington want to stymie Chinese efforts both to get around the rules and to recreate the necessary technological capabilities at home. However, the mixed record of export controls so far shows why harsher measures will be difficult to design—and not necessarily more successful.

China has found some ways to work around the existing controls. To Ms Raimondo’s chagrin, for instance, it is possible to train AI models using chips that are not necessarily at the cutting edge, so long as you have enough of them. If the sale of any chip which can “do AI” is to be banned, as she implies, America must restrict the flow of a much broader array of chips to China.

The clearest evidence that this is happening comes from Huawei. The company, whose core business is making telecoms gear, was first targeted by America in 2019 for allegedly breaching sanctions on Iran. A measure called the “foreign direct product rule” (FDPR) cut Huawei off from any chips that had been produced using American technology (which is to say virtually all sophisticated ones). In 2022 the FDPR was deployed against the entire Chinese AI industry, and broadened in October to encompass a wider range of AI chips and chipmaking tools, and to require licences to ship products to countries such as the United Arab Emirates (albeit not Singapore) that are thought to serve as middlemen for Chinese buyers.

Before it was blacklisted, Huawei had its microprocessors manufactured by TSMC, a Taiwanese contract chipmaker. It spent $5.4bn on TSMC-made chips in 2020, before America’s export controls extended to the Taiwanese firm. Now it is doing more business with SMIC, China’s biggest chipmaker. SMIC’s capabilities were thought to be many years behind those of TSMC. But last year it came to light that the company was making a Huawei-designed AI chip, the Ascend (and a smartphone chip, the Kirin, which raised many Western eyebrows after Huawei unexpectedly launched a handset containing it in September).

With their access to foreign chips curtailed, Chinese AI companies are now turning to Huawei and SMIC for chips. China’s government is encouraging them, and continuing to shower the industry with subsidies in the hope of creating an industry to rival Nvidia and other American companies. Export controls have, in effect, forced China to embrace import substitution.

The designers of America’s controls foresaw some of this. That is why, from the start, they also targeted China’s ability to recreate advanced technology at home. The controls restrict trade not just in chips themselves but also in tools used to make them. That has involved bringing on board allies such as the Netherlands and Japan, home to many of the toolmakers. As with chips, the tool controls place limits on the sophistication of the equipment that can be sold to Chinese buyers. And as with chips, just how sophisticated a tool has to be to fall under the controls has been the subject of intense debate.

The critical machines are those used to etch transistors onto silicon wafers. The most cutting-edge equipment of this sort is made and sold exclusively by ASML, a Dutch company, and has been blocked from China for years. But older generations of such lithography tools can still be sold there. ASML’s sales to China have grown dramatically over the past year, as have those of companies that produce other chipmaking tools. In the most recent quarter Chinese sales made up almost half of ASML’s total revenue. Other toolmakers also sell lots of their wares to China (see chart).

But, as with chips, export controls are giving Chinese toolmakers a strong incentive to invest in catching up technologically with foreign rivals. Already domestic toolmakers’ sales are growing. On January 15th one of them, NAURA, which manufactures other etching tools, said it expected its revenue to have risen by almost 50% in 2023.

America’s campaign against Chinese technology may, then, be both ineffective and counterproductive. Ineffective, because China is adept at exploiting loopholes. And counterproductive, because it is leading to the creation of a more sophisticated Chinese industry. It may also be predicated on a wrong assumption: that the future economic and military balance of power depends on AI, and that AI depends on computing power. “Both of these are guesses,” points out Chris Miller, a historian of technology at Tufts University in Boston. It is far from clear that AI will have strategic importance. And even if it does, computing power may not be the overriding factor in its development. As Mr Miller points out, oomph is expensive, so AI developers will try to use it as sparingly as possible.

Despite all this, America seems likely to toughen up its export controls on ai chips, as Ms Raimondo all but promised in December. And Republican lawmakers are eyeing more expansive controls still. Some of them see a new threat coming from the other end of the sophistication spectrum, which is less about China’s techno-military might and more about its economic power. Chips are required in growing volumes as components in everything from electric vehicles and heat pumps to electricity grids. By 2027 China could be making almost 40% of such semiconductors, reckons TrendForce, a research firm. The current export controls do nothing to curb China’s dominance of this business, which uses a lot of older American technology.

Three congressional Republicans, Mike Gallagher, Elise Stefanik and Michael McCaul, are thus working on a bill which will force the commerce department to cut China off from all American chip technology, not just the most advanced stuff. Gaining support from allies for such an extreme policy will be hard. Japanese and Dutch businesses—and their governments—rankle even at the porous controls that are in place today. But if Mr Trump, an alliance sceptic, returns to power, the lack of support is unlikely to matter one bit. ■

EU slows down de-risking plans for China in face of member state resistance

https://www.scmp.com/news/china/diplomacy/article/3249663/eu-slows-down-de-risking-plans-china-face-member-state-resistance?utm_source=rss_feed

The European Union inched forward with its plans to de-risk its relationship with China on Wednesday, unveiling an update to its economic security strategy, but the most controversial elements have been tempered amid pushback from member states.

A senior Brussels official denied that it had been forced to “water down its plans” and insisted the European Commission was determined to push on with the strategy.

EU firms are reluctant to speak up on China as Brussels tries to de-risk

The Commission wants to revise rules on vetting foreign investments and set guidelines on academic collaboration to protect European researchers from industrial espionage and foreign interference.

“In 2022 investigative journalists found almost 3,000 scientific collaborations of EU universities with Chinese military institutes since the year 2000,” EU competition boss Margrethe Vestager told a press conference.

“This may not have been illegal then. But the question, of course, is: is it desirable? Is this what we want?”

The most controversial elements of the strategy, first proposed last June, have faced opposition from EU member states.

Instead of proposing a law for screening the investments of private instead companies into 10 hi-tech sectors in perceived risky markets like China, Brussels will embark on a series of monitoring exercises, aiming to propose a policy by the end of next year. In reality, it could be many years before any proposal becomes law.

“I would not agree that the package is watered down,” EU trade chief Valdis Dombrovskis told reporters. “All the initiatives we announced in June, we are following through in consultation with member states and stakeholders.”

Brussels has also been pushing to harmonise member states’ export control regimes. A senior EU official, speaking on condition of anonymity, said this was to reduce the risk that “through certain investments, in certain countries, the technology could leak, know-how is passed on and gets into the hands of military intelligence and is used back against us”.

But some member states are unwilling to hand these powers over to the Commission. So rather than proposing a law, it has published a white paper “to assess whether current rules can be improved in the face of geopolitical challenges”.

Since Commission President Ursula von der Leyen announced plans to de-risk ties with China last March, with outbound investment screening at its core, the commission has become embroiled in a tussle with powerful member states such as France and Germany.

The stand-off highlights concerns about the conflation of national and economic security, in an age when it is getting harder to distinguish between products with civil and military purposes.

As a result, the Commission, which sets trade policy for the bloc, wants to expand its responsibilities to address these concerns – much to capitals’ chagrin.

It may also face an uphill struggle to get member states to centralise European export control authority.

Vestager said that the commission was trying to avoid a “turf war” with its members.

“We could have a turf war, we could just suggest that competency moves and then we would have I think a very conflictual discussion about competencies,” she said.

“I hope that it is clear that by this sort of step-by-step approach, we are doing what we can in order to work with member states without asking for competences to be moved.”

While China has not been named in the discussion on export controls, Brussels sources privately admit they want to stop European technology such as quantum computing and artificial intelligence from strengthening the People’s Liberation Army.

The EU and China can’t agree on key issues. Is this ‘a recipe for a trade war’?

The idea is that a Europeanised export controls regime would eventually work in tandem with outbound investment screening to make sure that restrictions on exports to certain countries are not undercut by factories being built or companies bought there.

The commission has suggested “introducing uniform EU controls on new items that were not adopted by the multilateral export control regimes because they were blocked by certain countries, notably Russia”.

The current system “creates loopholes that we cannot afford to have”, trade chief Valdis Dombrovskis told reporters. “We also see a multiplication of new national controls on emerging and sensitive technologies imposed by some countries.”

There is also a determination to break free of the United States’ extraterritorial use of export controls.

Last year, the Netherlands was forced to comply with US curbs on China, meaning Europe’s most valuable tech company ASML had to stop selling high-end lithography machines to Chinese buyers.

The only legislative proposal in the new package is a tightening of existing screening of investments into the EU, which would require all members to vet foreign takeovers to ensure they align with its security interests.

The bloc already has a foreign direct investment screening mechanism, which has been adopted by all but five of its members and was introduced largely in response to Beijing’s hoovering up of strategic European tech companies.

But Brussels fears that until it is harmonised, companies in key industries such as robotics, biotech or aerospace could fall into the hands of Chinese or other authoritarian powers.

Under the new proposals, the Commission will focus on “risky transactions” in sectors with military connections or in the 10 critical technologies the bloc named last year. It would also extend the screening to include intra-EU deals where the buyer is not European.

EU envoy slams China’s ‘national security obsession’, questions growth rebound

The commission’s statistics show that 32 per cent of all investments scrutinised in 2022 under existing mechanisms were American. Just 5.4 per cent were Chinese.

Despite this, concern over Chinese ownership of strategic European infrastructure has risen. Last week, the European Parliament passed a non-binding resolution demanding that European critical assets, such as ports and transport networks, undergo mandatory screening to exclude “suspicious investments from China”.

Hong Kong’s first Chinese medicine hospital to showcase Western and TCM collaboration, city’s health minister says, ahead of late 2025 opening

https://www.scmp.com/news/hong-kong/health-environment/article/3249665/hong-kongs-first-chinese-medicine-hospital-showcase-western-and-tcm-collaboration-citys-health?utm_source=rss_feed

Hong Kong’s first Chinese medicine hospital can serve as a showcase of collaborative efforts between Western and traditional methods to the world, the city’s health minister has said, ahead of the facility’s phased opening in late 2025.

The government-funded hospital on Wednesday signed an agreement with the Guangdong Provincial Hospital of Traditional Chinese Medicine to cooperate on areas such as joint talent exchanges, setting up a database and developing a scientific research network.

Secretary for Health Lo Chung-mau said the collaboration with the Guangdong hospital, a state-level institution, would take the development of Chinese medicine in Hong Kong to “new heights”.

“With the rich experience and technology sharing from the [Guangdong hospital], I believe that the Chinese Medicine Hospital of Hong Kong will be able to launch its services smoothly,” he said at the signing ceremony.

“Hong Kong’s Chinese medicine sector should seize the opportunity to capitalise on our characteristics and strengths … to demonstrate the value of traditional Chinese medicine and the collaboration between Chinese and Western medicine to the world.”

The board of the hospital also announced the members of its management team, appointing leading Chinese medicine expert Professor Bian Zhaoxiang as its chief executive.

The construction of the hospital, which began in 2021, is set to be completed in 2025. It is expected to start its operation in late 2025 and provide outpatient services in the first year, followed by inpatient services the next year.

Hong Kong TCM practitioners ‘can play bigger role’ in primary healthcare

Situated in Pak Shing Kok in Tseung Kwan O, the hospital is expected to open all of its 400 beds by 2027, including 250 at inpatient wards, 90 in day wards, 40 in paediatrics wards and 20 in the clinical trial and research centre.

Bian said 65 per cent of its services would be subsidised by the government, while the remaining 35 per cent would be provided by the private sector.

“This is a Chinese medicine hospital, but there will be a number of Western medicine examination facilities, including those for laboratory testing, X-ray and computerised tomography scans, magnetic resonance imaging and ultrasonography,” Bian said.

“There will be a number of Chinese medicine inpatient wards, which is the first time in Hong Kong’s history that there will be such services.”

Bian, who was Hong Kong Baptist University’s associate vice-president for Chinese medicine development, said managing Chinese medicine hospitals could be “challenging” given the city only had experience in operating Western medicine hospitals.

He added that the city could focus on providing high-quality services for its patients, while those who required stroke rehabilitation and pain management would benefit most from the hospital’s services.

Could traditional Chinese medicine be key to treating cardiac disease?

Administrative matters such as manpower planning and fees would be determined after the yearly plan was formulated, he added.

Dr Arthur Lau Chun-wing, who was appointed as the deputy chief executive in Western medicine, said he hoped the hospital would capitalise on the advantages of both Chinese and Western medicine.

“I hope we can formulate standards that can serve as the blueprint for the world to follow and reference,” said Lau, who was previously the deputy chief executive at the Pamela Youde Nethersole Eastern Hospital in Chai Wan.

The hospital will provide pure Chinese medicine services and integrated Chinese-Western medicine services.

Its Chinese medicine specialities include internal medicine, external medicine, gynaecology, paediatrics, orthopaedics and traumatology, and acupuncture and moxibustion. There will also be allied health services, as well as training and education facilities.

China and Iran push public diplomacy, but will Beijing’s soft power tactics work in the Islamic Republic?

https://www.scmp.com/news/china/diplomacy/article/3249668/china-and-iran-push-public-diplomacy-will-beijings-soft-power-tactics-work-islamic-republic?utm_source=rss_feed

As soon as Eva Liang stepped onto the streets of Tehran, Iran’s capital, she knew her adventure in the Middle Eastern country would be completely different from what she had learned from books, the media and other people’s travel stories.

During her trip through Tehran, Shiraz, Isfahan, Kashan and Yazd, she was warmly welcomed by locals and invited to take selfies. Free tea and hookah sessions often followed.

More surprisingly, she saw Iranian people openly discussing politics in cafes and squares and scrolling through popular apps such as Instagram, WhatsApp, TikTok and foreign news channels on their mobile phones.

“Everyone, everything is thriving. [Iranian] people care about each other, and they talk about politics. It is like China 20 to 30 years ago,” Liang said.

The Chinese national added that she felt people in her home country seemed to have stopped caring about politics as they were discouraged from doing so and it was too far removed from their lives.

Liang, a 27-year-old consultant from Shanghai, chose Iran as her first travel destination after Covid-19 restrictions were eased, joining a growing number of Chinese tourists who have visited the country since Tehran waived visa requirements in 2019.

The visa policy is part of Beijing and Tehran’s push to boost culture, tourism, education and people-to-people exchanges so their citizens can “get to know each other directly”, in the words of Iranian President Ebrahim Raisi.

This comes as the two countries face an increasingly hostile international environment and antagonism from the West.

China, Iran sign policing pledge during Iranian police chief’s Beijing visit

However, some sceptics question the impact of China’s public diplomacy in Iran, saying Beijing’s public relations outreach pales in comparison with its economic prowess. Observers also say Beijing may rely too much on official channels for its soft power push, which could alienate some Iranians who are suspicious of government initiatives.

Beijing’s public diplomacy efforts in the country date back as early as 2016, when Chinese President Xi Jinping called for strengthened exchanges in culture, education, journalism, publishing and tourism ahead of his state visit to Iran.

Raisi echoed the sentiment seven years later. Before visiting China in early 2023, he wrote that China and Iran should promote people-to-people exchanges so people from the two countries could “get to know each other directly in the new era” rather than getting to know each other “through third parties”.

Since the two leaders met last year, the countries have held at least 10 meetings between senior officials focusing on such exchanges, according to data collected by the Post.

Chang Hua, China’s ambassador to Iran, welcomed the first Chinese tourist group to visit the Islamic republic in April.

In October, China’s vice-minister of culture and tourism, Lu Yingchuan, signed a five-year implementation plan for cultural and educational exchanges in Iran.

Fan Hongda, a professor at the Middle East Studies Institute at Shanghai International Studies University, said China and Iran’s efforts to boost public diplomacy filled a gap with respect to their booming economic and diplomatic ties.

“Both China and Iran are facing a number of development difficulties, and their mutual needs are quite strong. However, in actual cooperation, there is a prominent feature that there is more governmental cooperation and not enough civil interactions,” he said.

Beijing and Tehran have become closer than ever. Despite sanctions imposed by Washington, China’s oil imports from Iran jumped 48 per cent year-on-year in the first half of 2023, making Iran its third-largest oil supplier, following Saudi Arabia and Angola.

Tehran sees closer economic ties with Beijing as an escape route from the international isolation it has faced. Last year, China helped broker a peace deal between Iran and Saudi Arabia.

China and Iran pledge cooperation ahead of Brics summit

Iran became a member of the Shanghai Cooperation Organisation (SCO), a Beijing-led security bloc, in July and will officially join Brics this year.

Fan added that a lack of people-to-people interactions would limit the effectiveness of government cooperation. “Therefore, both countries hope to increase civil exchanges in the fields of culture and education,” he said.

Alex Vatanka, founding director of the Iran programme at the Washington-based Middle East Institute, said that both China and Iran were eager to boost their presence in each other’s societies, but for different reasons.

He said for China, a bigger presence in Iran was part of Beijing’s ambition and strategy to play a bigger role in the Middle East.

As for Iran, its deteriorating image in the West has forced Tehran to attract Chinese support, especially in tourism, Vatanka said.

Both countries appear to be making progress on their goals. Some 50,000 Chinese travellers visited Iran during the first seven months of 2023, while just under 1,400 came during the same period of 2019, according to Ali Asghar Shalbafian, Iran’s deputy minister for culture and tourism.

An Iranian travel agency worker, who did not want to be named due to the sensitivity of the issue, told the Post that the number of Chinese tourists jumped last year, compared with those from Western countries.

The worker added that most foreign visitors now in Iran were Chinese because tourist numbers from other countries had not yet rebounded despite the end of the Covid-19 pandemic.

China’s efforts to transform from an economic partner to a powerful player on all fronts in Iran have also paid off, especially in the academic and educational fields.

Mandarin learning boom as China extends its soft power in Middle East

Nika, an Iranian master’s degree student studying in Zhengzhou in central China, said there were around 1,000 Iranian students in the city. The number before the pandemic was only about 50.

Iranian students think “Chinese universities are quite good” and the costs are not too high, according to Nika, who added that of the 1,000 Iranian students in China, most were self-funded, as “only a few dozen” had scholarships.

“Many people support me when they learn that I am studying in China, and they would like to come to China to study,” said Nika, who will begin PhD studies in Shanghai in September. She added that most of her friends and family think “China is a very developed country”.

Saeideh Zarrin, a PhD student in Shanghai studying Chinese history, said most Iranian students in China were focusing on Chinese language, but increasing numbers were choosing science disciplines such as medicine.

Zarrin studied Chinese as an undergraduate student at the University of Isfahan, one of only two universities in Iran that offered Chinese as a major when she was in university – the other being Shahid Beheshti University in Tehran. Since then, two other Iranian universities have started to offer Chinese as a major.

The Chinese learning boom is not limited to the country’s universities. Iran will include Chinese as an optional language in secondary schools from 2024.

During Raisi’s visit to Beijing in early 2023, the two countries agreed to boost Chinese and Farsi education in each other’s countries. China also agreed to provide international scholarships for Iran’s Chinese language teachers.

However, analysts said the exchanges had not necessarily succeeded in Beijing and Tehran’s goals of projecting a positive image to ordinary people in each other’s countries.

‘The truth’: China seeks to build soft power through cultural counteroffensive

John Calabrese, a senior fellow at the Washington-based Middle East Institute and an associate professor at American University, said Iranians “vary widely” in their views on China, which tend to be influenced by their stance on the Iranian government.

“Some likely view China’s development model as a source of emulation and regard the boosting of economic ties with China and other Asian countries as highly desirable,” he said.

“Others are no doubt wary of China, concerned that the economic relationship already is, or is likely to become, unbalanced. Still others are presumably disappointed that China has been slow to ‘deliver’ on its economic pledges.

“Similarly, I would venture to say that there are diverse opinions within Iran regarding the Chinese political system.”

Zarrin, the PhD student in Shanghai, said most ordinary Iranian people had a “very vague impression of China”, and some of them held negative ideas popularised by foreign media.

“The [Iranian] people are affected by international news. It’s not because of China, but some Iranians are not happy with the government, so whichever government has a good relationship with Tehran, [they] will naturally dislike that country,” she said.

But Vatanka said China’s efforts to counter other narratives in Iran had not been effective.

“I don’t see China playing a big role in public diplomacy. It’s not evident in Iranian media. When you go on the internet, you don’t see much mention of Chinese efforts alone in public diplomacy. So if it’s been done, it’s been done quietly, which means it’s not very effective.”

Despite government restrictions, Iranian people can easily access international Farsi-language media based in London or Washington, such as BBC Persian, Vatanka said.

“They [the Western media] are the most popular programmes that ordinary Iranians watch. Ordinary Iranians don’t watch anything from China. This is something China can try and fix,” he said.

Iran launches satellite as part of Western-criticised programme

Steering exchanges through officially sanctioned channels has been another obstacle for China in overhauling its image in Iran, according to Fan from Shanghai.

“In some countries, the relationship between the government and the people is not good, and in such cases, the people tend to be suspicious of government-led actions,” he said.

“This phenomenon exists in Iran, so it is difficult to rely solely on government-to-government communication, or government-led communication, to achieve mutual awareness among the people.”

Alireza Khoshrou, a senior research associate at Iran’s Islamic Cultural and Relations Organisation, agreed, adding that until both countries prioritise public diplomacy based on “scientific principles”, their current approaches would remain “propagandistic”.

“Iran lacks the necessary foundations to fully understand China, particularly in the scientific field of public diplomacy as well as in terms of people-to-people exchanges. It would take at least a decade for Iran to develop this understanding.”

According to Vatanka, China and Iran must strengthen their foundation for cooperation as their shared anti-American and anti-Western sentiments were currently the main driving force.

“There are inherent limitations to how close these entities can move together. They’re very different entities, the Islamic Republic of Iran and the Communist Party of China, he said, adding that “anti-Americanism and anti-Western [sentiment] are such important factors in keeping China and Iran together.”

“This is not enough in the long term to maintain close relations, you need to make the relations deeper. And you can only make it deeper by appealing to the Iranian public as well,” he said.

China GDP: provinces set conservative 2024 economic growth targets as debt hangover bites

https://www.scmp.com/economy/economic-indicators/article/3249636/china-gdp-provinces-set-conservative-2024-economic-growth-targets-debt-hangover-bites?utm_source=rss_feed

Some of China’s most indebted regions have set conservative economic growth targets for 2024 after being told to concentrate on defusing the debt bomb, adding to the headwinds that are set to haunt the world’s second-largest economy this year.

The northern municipality of Tianjin, which lies 100km (62 miles) east of Beijing, announced a 4.5 per cent gross domestic product (GDP) growth goal on Tuesday, after reporting subpar expansion of 4.3 per cent year on year for 2023.

China’s overall economy grew by 5.2 per cent last year, while the national target for 2024 is widely estimated to be set again at around 5 per cent.

Tianjin, having relied on debt to fund massive infrastructure projects to fuel growth, owed 864.5 billion yuan at the end of 2022, according to the Guangzhou-based Yuekai Securities.

‘Growth nothing to write home about’: 7 takeaways from China’s economic data

But its total fiscal revenue in 2022, including transfer payments from the central government, was less than 300 billion yuan.

Fixed-asset investment in Tianjin dropped by 16.4 per cent year on year in 2023, as officials scrambled to accomplish a debt-reduction plan.

Mayor Zhang Gong told the city’s people’s congress this week that Tianjin plans to ensure positive investment growth this year, pointing to Airbus’ second assembly line and government-advocated affordable housing and emergency facility projects.

Beijing has mandated debt-ridden localities to restructure their debt and rein in spending, as local governments grapple with falling revenues and a protracted property sector downturn.

China seeks economic ‘strength down the road’ with 1 trillion yuan debt plan

Beijing has allowed local governments to issue special refinancing bonds to avoid defaults, while the central government has leveraged its low debt ratio to also increase their transfer payments.

In October, Beijing approved a 1 trillion yuan issuance of sovereign bonds aimed at supporting reconstruction and improving disaster prevention and relief capabilities.

With the local debt mountain viewed as being among the key threats to China’s fiscal and economic stability, the Ministry of Finance said local governments owed 40.6 trillion yuan at the end of November.

However, there could be more implicit liabilities hidden in local government financing vehicles (LGFVs), state-owned enterprises and public-private partnership projects.

The International Monetary Fund estimated in a report last year the total debt for LGFVs had swollen to a record 66 trillion yuan.

The southwestern province of Yunnan, which saw its debt climb to 1.2 trillion yuan in 2022, registered 4.4 per cent growth in 2023. The agrarian province has set a target of around 5 per cent for this year.

Guizhou, the southern province known for its many underused roads and other infrastructure financed by debt, also underperformed with GDP growth of 4.9 per cent last year. It has set a target of 5.5 per cent for 2024.

The northeastern backwater of Heilongjiang recorded dismal growth of 2.6 per cent last year, but it is also targeting 5.5 per cent growth in 2024 amid rising tourism revenues.

Beijing has pinned its hope on major economic powerhouses, including Guangdong, Jiangsu and Zhejiang, to deliver higher growth this year.

On Tuesday, China’s southern powerhouse of Guangdong province set a 5 per cent growth target for 2024, having posted disappointing 4.8 per cent year-on-year growth last year.

Ant Group-backed credit scorer Qiantang closer to licence in China after two-year wait, as PBOC to ‘guide’ application

https://www.scmp.com/business/banking-finance/article/3249658/ant-group-backed-credit-scorer-qiantang-closer-licence-china-after-two-year-wait-pboc-guide?utm_source=rss_feed

Qiantang Credit Rating, backed by Alibaba Group Holding’s fintech arm Ant Group and Zhejiang Tourism Investment Group, appears to be headed for official approval to begin operations after a wait of more than two years.

Pan Gongsheng, the governor of the People’s Bank of China (PBOC), said on Wednesday that the PBOC and the government of Zhejiang province are gearing up to guide Qiantang through the application process.

The company’s wait stretches back to November 2021 when the PBOC, China’s central bank, said it had accepted an application from Ant Group, state-backed Zhejiang Tourism Investment Group and four other investors to set up Qiantang as a joint-venture firm.

If approved, Qiantang would become the third licensed personal credit firm in mainland China. Known as credit scoring or credit investigation companies, such firms examine the credit histories of individuals and share that information with financial institutions to help the latter assess creditworthiness.

LianLian seeks to revive Hong Kong IPO in second stab at fundraising

The company will have 1 billion yuan (US$141 million) in registered capital and will be owned 35 per cent each by Ant Group and Zhejiang Tourism, which is controlled by the government of Zhejiang. The rest will belong to investors including Zhejiang-based conglomerate Transfar Group and state-owned Hangzhou Financial Investment Group, according to a notice published on the PBOC website.

Qiantang was set up as part of a sweeping overhaul that transformed Ant Group into a financial holding company after regulators pulled the plug on its highly anticipated US$34 billion initial public offering in 2020.

According to guidelines published by the PBOC in 2020, the central bank needs to process all licence applications for personal-credit scoring companies within 60 days of formal submission.

End of Jack Ma’s reign at Ant Group approved by central bank

The last licence was granted in December 2020 to Pudao Credit Rating, backed by e-commerce company JD.com, smartphone maker Xiaomi and artificial intelligence firm Megvii.

The central bank will promote the development of the country’s credit investigation and payment industries while pushing for the reform and opening up of China’s financial sectors, PBOC’s Pan said during Wednesday’s media briefing. These efforts will make the financial markets more “standardised, transparent, open, dynamic and resilient”, he said.

Additionally, the bank pledged to provide China’s real economy with higher quality and more efficient financing services by “further improving financing structures, market systems and product systems”.

Alibaba owns the South China Morning Post.

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