• US charges 4 Chinese nationals with smuggling US-made electronics to Iran
• Chinese hackers determined to ‘wreak havoc’ on US critical infrastructure, FBI chief warns
• US deems more Chinese tech companies ‘military’ and a national security risk
• Chinese leaders hint at increased focus on politics and Communist Party discipline for coming year
• China-US talks in Bangkok yield ‘useful’ discussions on Taiwan, other issues: Sullivan
• China and US vow closer cooperation in fighting America’s fentanyl crisis as drugs group begins its work
• Myanmar hands over junta-backed warlords to China in telecoms scam case
• China’s top fabless chip firms estimate big 2023 losses despite push for greater self-sufficiency in semiconductors
• Couple in China kick elderly parents out of own home after transferring flat ownership to grandson
• Chinese Premier Li Qiang urges manufacturing firms to ‘spare extra money’ for R&D investment
• Chinese selfie apps giant Meitu sees profits triple in 2023 on back of new generative AI-powered tools
• China Evergrande liquidation: ‘thin payout’ likely for offshore creditors as legal drama plays out, S&P says
• Chinese archeologists have dug up fresh clues about early humans – and stunning new insights
• ‘Extremely heinous’: Myanmar hands over 10 leading cyber scam suspects to China
• ‘10 cups of tea’: for first time China’s top intelligence agency spells out reasons for questioning by authorities
• South China Sea: Chinese coastguard ‘drove off’ Filipinos in latest run-in at disputed Scarborough Shoal
• China EVs: lithium producers Ganfeng, Tianqi issue profit warnings, blame price plunge for battery material as stocks sink
• South China Sea: Philippines alarmed by 200 Chinese vessels at Mischief Reef, Marcos urges dialogue
• Woman in China threatens to ditch fiancé for oversharing personal life on WeChat reigniting debate on social media addiction
• 4-year-old mainland Chinese girl accidentally hit in face when 10 assailants attack group of diners at Hong Kong restaurant
• China’s Shenzhen reveals bold tech plans for an economic, industrial resurgence in 2024
• Asean can add momentum to Australia’s call for US-China detente, ex-minister says
• Could reports of a North Korean workers’ riot in China ‘pose threats’ to the regime?
• China’s young chow down on ‘dangerous’ deep-fried starch toothpicks inspired by South Korea food fad, sparking mainland health warning
• China’s manufacturing activity rebounds slightly in January, but remains in contraction
• Evergrande’s liquidation is a new low in China’s property crisis | Finance & economics
• US Congress considers new legislation to further restrict investment in Chinese tech sectors
• Blizzards and extreme weather could disrupt China’s Lunar New Year travel

US charges 4 Chinese nationals with smuggling US-made electronics to Iran

https://www.scmp.com/news/world/united-states-canada/article/3250490/us-charges-4-chinese-nationals-smuggling-us-made-electronics-iran?utm_source=rss_feed

US authorities have charged four Chinese nationals with crimes related to the smuggling of US-made electronic components, including some with possible military use, to Iran, the Justice Department said on Wednesday.

The Chinese nationals are accused of moving US export-controlled items through China and Hong Kong to sanctioned entities affiliated with Iran’s Islamic Revolutionary Guard Corps (IRGC) and its defence ministry, the department said in a statement.

The accused were identified as Baoxia Liu, aka Emily Liu; Yiu Wa Yung, aka Stephen Yung; Yongxin Li, aka Emma Lee; and Yanlai Zhong, aka Sydney Chung.

The US alleges that between May 2007 and July 2020, the four used front companies in China to funnel electronics, including some that could be used

in the production of drones, ballistic missile systems, and other military end uses.

The alleged scheme resulted in the export of a “vast amount” of dual-use US-origin commodities with military capabilities from the United States to Iran, the Justice Department said.

Iranian and Chinese duo charged by US with exporting drone components to Iran

“Such efforts to unlawfully obtain US technology directly threaten our national security, and we will use every tool at our disposal to sever the illicit supply chains that fuel the Iranian regime’s malign activity,” Assistant Attorney General Matthew Olsen of the Justice Department’s national security division said in the statement.

The US has issued arrest warrants for the accused, who all remain fugitives, according to the statement.

Chinese hackers determined to ‘wreak havoc’ on US critical infrastructure, FBI chief warns

https://www.scmp.com/news/china/diplomacy/article/3250492/chinese-hackers-determined-wreak-havoc-us-critical-infrastructure-fbi-chief-warns?utm_source=rss_feed

Chinese government hackers are busily targeting water treatment plants, the electrical grid, transport systems and other critical infrastructure inside the United States, FBI Director Chris Wray told House lawmakers on Wednesday in a fresh warning from Washington about Beijing’s global ambitions.

Underscoring the threat, the US Justice Department and Federal Bureau of Investigation announced just before the hearing that they had disrupted a botnet of hundreds of US-based small office and home routers owned by private citizens and companies and hijacked by the Chinese state hackers to cover their tracks and hide their origin as they sowed the malware.

Speaking before the House Select Committee on the Chinese Communist Party, Wray said there’s been “far too little public focus” on a cyber threat that affects “every American.”

“China’s hackers are positioning on American infrastructure in preparation to wreak havoc and cause real-world harm to American citizens and communities, if or when China decides the time has come to strike,” Wray he said.

Jen Easterly, the director of the Department of Homeland Security’s cybersecurity arm, voiced a similar sentiment at the hearing.

“This is a world where a major crisis halfway across the planet could well endanger the lives of Americans here at home through the disruption of our pipelines, the severing of our telecommunications, the pollution of our water facilities, the crippling of our transportation modes – all to ensure that they can incite societal panic and chaos and to deter our ability” to respond, she said.

The comments align with assessments from outside cybersecurity firms including Microsoft, which said in May that state-backed Chinese hackers had been targeting US critical infrastructure and could be laying the technical groundwork for the potential disruption of critical communications between the US and Asia during future crises.

That operation, attributed to a group of hackers known as Volt Typhoon, has now been disrupted after FBI and Justice Department officials obtained search-and-seizure orders in a Texas federal court. The hackers infiltrated targets through multiple avenues, including cloud and internet providers, disguising themselves as normal traffic.

Chinese hackers spying on US critical infrastructure, Western agencies say

The US has in the past few years become more aggressive in trying to disrupt and dismantle both criminal and state-backed cyber operations. But state-backed hackers, especially Chinese and Russian, are good at adapting and finding new intrusion methods and avenues.

“Today, and literally every day, they’re actively attacking our economic security, engaging in wholesale theft of our innovation, and our personal and corporate data,” Wray said of China.

US officials have long been concerned about such hackers hiding in US-based infrastructure, and the end-of-life Cisco and NetGear routers exploited by Volt Typhoon were easy prey because they were no longer supported by their manufacturers with security updates.

Because of the urgency, law enforcement officials said, US cyber operators deleted the malware in those routers without notifying their owners directly – and added code to prevent reinfection.

A Justice Department official who briefed reporters on condition of anonymity under ground rules set by the government said officials were determined to disrupt the Volt Typhoon operation as soon as possible because the hackers were using the botnet as a stepping stone to hide in US internet traffic while burrowing into the networks of critical infrastructure, ready to maliciously exploit that access at a time of their choosing.

China has called the US government’s allegations baseless. Beijing has accused the US of “almost daily” and “huge amounts of intrusions against Chinese government, with Wang Wenbin, a spokesman for the Chinese foreign ministry, saying last year that “China is the biggest victim of cyberattacks”.

But General Paul Nakasone, the outgoing commander of US Cyber Command, said “responsible cyber actors” do not target civilian infrastructure.

“There’s no reason for them to be in our water,” Nakasone said. “There’s no reason for them to be in our power.”

US deems more Chinese tech companies ‘military’ and a national security risk

https://www.scmp.com/news/china/article/3250493/us-deems-more-chinese-tech-companies-military-and-national-security-risk?utm_source=rss_feed

The Pentagon on Wednesday labelled more than a dozen Chinese tech firms, including memory-chip maker Yangtze Memory Technologies Corp (YMTC), as “military companies” that pose a national security risk to the US.

Artificial intelligence companies Yitu Technology and Beijing Megvii, drone maker Chengdu JOUAV, lidar maker Hesai Technology and tech company NetPosa are also entities that operate in the United States but have ties to the Chinese military, according to the US Defence Department.

They join Shenzhen-based consumer drone maker DJI Technology and China’s leading genetics firm, BGI, on what is called the 1260H list, which makes US and international companies aware of entities that could be supporting Beijing’s military-industrial complex.

US further restricts China from AI chips to hinder military development

First established under the National Defence Authorisation Act for fiscal year 2021, the 1260H list is updated annually by the Defence Department.

Being named on the list does not involve a complete ban, but it does render the firms ineligible for Defence Department contracts. Additionally, the label could lead to blacklisting by the US Treasury Department to curb the companies’ access to American capital.

Three Chinese firms were also removed from the updated list on Wednesday: hi-tech electronic components manufacturer Fujian Torch Electron Technology, the China International Engineering Consulting Corp and SMIC Hong Kong International Co Ltd, which makes semiconductors.

However, despite pressure from the US House committee on competition with China, Quectel, a Chinese Internet of Things firm, was not added to the list.

According to Bill Drexel of the Center for a New American Security, a Washington-based think tank, the update to the list “stands as a reminder that the Sino-American economic relationship – especially around technology – is continuing to fray, and for good reason”.

He said that while the Chinese Communist Party would not back down from its military-civil fusion strategy, “Americans cannot afford to be naive about the pronounced role that ostensibly private companies in China play in building out China’s military might, with direct strategic implications for American national security.”

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Chinese leaders hint at increased focus on politics and Communist Party discipline for coming year

https://www.scmp.com/news/china/politics/article/3250481/chinese-leaders-hint-increased-focus-politics-and-communist-party-discipline-coming-year?utm_source=rss_feed

The Chinese Communist Party leadership held the first Politburo meeting of the year on Wednesday, setting the tone and direction for the upcoming national parliamentary sessions.

While China’s lacklustre economic recovery continues to be a major concern for foreign investors, Chinese leaders focused on strengthening political control and party discipline in a statement issued after the meeting.

Maintaining stable economic growth remains an important objective, but the main stress is squarely on the political front in a year that will see the People’s Republic celebrate its 75th anniversary.

The central government may still unveil more forceful stimulus packages later at the annual “two sessions”, when the national legislature and top political advisory body meet, but it is unlikely Beijing will make economic growth the only priority.

But, in a break with precedent, Wednesday’s meeting concluded with no reference to the third plenum, an important part of the five-year political cycle that usually sets out the path for future economic policy.

The omission suggests that the event, which many observers had expected to take place last year, will not be held before the two sessions.

The third plenum is usually held in October or early November, although in 2018 it was also delayed to make space for a constitutional amendment that scrapped the term limits on the presidency, allowing Xi Jinping a third term in office.

However, the plenary meeting has not been held this late in the political cycle since 1978, when Deng Xiaoping used it to introduce much-needed economic reforms in the wake of the Cultural Revolution.

China’s admin restructure ripples out to provinces to tighten party control

The Politburo statement published by state news agency Xinhua had a strong political tone and emphasised the need for party discipline, consolidating the political base and “maintaining a fighting spirit and strengthening the ability to struggle”.

It said the meeting had reviewed the work of five top party organs, concluding they had “performed their duties diligently surrounding the party and the country” and “contributed to economic development and social stability, achieving a good start in all aspects”.

It said that one of these bodies, the Central Secretariat, had “worked effectively in promoting and implementing party policies and strengthening intraparty laws and regulations”.

The meeting has now set the stage for the two sessions, giving the National People’s Congress and Chinese People’s Political Consultative Committee a chance to report to the Politburo before the main event.

The Politburo meeting also reviewed a report on studying Xi’s political philosophy and party regulations on inspection work.

The Politburo heard it was important to focus on “the highest political principle of centralised and unified leadership of the Party Central Committee, focusing on the biggest political issue of promoting Chinese-style modernisation” and continue to implement the party’s major strategic plans.

There was also an emphasis on educating cadres about the party’s new theories, urging them to correct bureaucracy and formalism and do practical work for the people. The meeting also heard that an eye must be kept on “senior cadres” as well as issues which generate strong public grievances.

The meeting also stressed that high-quality development and deepening reform and opening-up were also major tasks and were necessary to ensure the main points of the Central Economic Work Conference are faithfully implemented.

This year marks the 75th anniversary of the establishment of the People’s Republic of China and a key year in the current five-year plan, which was drafted in 2020.

‘Long and arduous’ road ahead for China’s attempt to discipline party ranks

The country’s economy is currently facing a series of challenges as it seeks to recover from the impact of the Covid-19 pandemic.

Last week, Premier Li Qiang ordered authorities to find ways to attract more long-term investors to the country’s capital markets, after stock markets in Shanghai, Shenzhen and Hong Kong suffered sharp falls.

But Beijing also faces a challenging situation as it seeks to regain confidence internationally while facing a series of geopolitical tensions and the uncertain impact of this year’s US elections.

Brian Wong Yue-shun, assistant professor of philosophy at the University of Hong Kong, said that the Politburo meeting signalled three key priorities.

“The most crucial [priority] is still about national security and defence against potential foreign interference, followed by alignment between the central and local governments and the ongoing graft-busting and disciplining of ‘insubordinate or wayward’ bureaucrats,” he said.

“Bolstering youth employment and other economic rejuvenation matters seems ranked lower than the first two goals, and only matters insofar as [creating] jobs are concerned. GDP targets are not super important, but keeping the ‘rice bowls’ full is.”

On Wednesday, Xinhua also published an article by Xi, which will also be carried in the Communist Party’s top theoretical journal Qiushi, emphasising the need to “forge a sense of community of the Chinese nation”.

The article said since the 18th party congress in November 2012, when Xi was confirmed as top leader, the party has stressed the concept of the “big family of the Chinese nation” and promoted a sense of community.

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China-US talks in Bangkok yield ‘useful’ discussions on Taiwan, other issues: Sullivan

https://www.scmp.com/news/china/diplomacy/article/3250399/china-us-talks-bangkok-yield-useful-discussions-taiwan-other-issues-sullivan?utm_source=rss_feed

The US and China made progress in last week’s talks in Thailand on starting a dialogue in “the spring” on the responsible use of artificial intelligence, Washington’s top national security official said late on Tuesday.

US national security adviser Jake Sullivan said his nine hours of talks with Chinese Foreign Minister Wang Yi also included “very useful direct” talks over Taiwan and frank discussions on instability in the Red Sea, the Ukraine war and the Korean peninsula.

The Bangkok talks on Friday and Saturday were the first high-level meetings between the two wary giants since Presidents Xi Jinping and Joe Biden met in November in California.

“Both of us leave feeling that we didn’t agree or see eye to eye on everything but that there was a lot of work to carry forward,” Sullivan told a conference sponsored by the University of California, San Diego and the Council on Foreign Relations.

“Both of us agreed that we would report back to our leaders and we would get them on the phone sooner rather than later,” he added, without providing a date.

China-US relations: ambassadors foresee warmer future between recent rivals

While reviewing the China-US relationship at the conference, Sullivan suggested that Washington is prepared to sanction Beijing over its growing non-lethal support to Moscow, including heavy trucks and other equipment used in the Ukraine war.

“We’re prepared to take steps to respond to that kind of activity because we believe that Russia’s defence industrial base is basically building up to continue to support an imperial war of conquest in Europe,” he said.

“And that’s a fundamental national security interest of the United States. And I made no bones about that in my conversations with my counterpart.”

An executive order signed in late December strengthens US sanctions authority against those supporting Russia’s war effort, giving Biden expanded legal authority.

“It’s not directed at [China]. It is general to countries that are supporting Russia’s defence industrial base,” he said. “But it gives us tools in this regard.”

Sullivan added that Washington will soon release another round of export restrictions, hinting that this could come in the autumn.

Ukraine envoy offers support for one-China principle in Beijing talks

The first tranche of restricted US items, including high-end semiconductors, deemed useful for China’s military advancement was released in October 2022 and an updated list rolled out in October last year.

“The world can expect that will be part of the process going forward because, as the technology evolves, our controls have to evolve,” he said.

During their meeting, Sullivan said he made clear to Wang that the US continues to hold to the one-China policy, Taiwan Relations Act, six assurances and other pillars of US-China understanding in relation to the self-governed island.

“It was also clear that we continue to have concerns about elevated levels of aggressive military activity around the [Taiwan] Strait,” he added. “We don’t regard that as conducive to peace and stability.”

Beijing sees Taiwan as part of its territory, to be brought under mainland control by force if necessary. Like most countries, the US does not recognise Taiwan as an independent state.

But Washington maintains robust unofficial ties with Taipei, opposes any attempt to take the island by force, and is committed to supplying it with weapons – positions that anger Beijing.

China has repeatedly slammed US human rights and hi-tech sanctions, characterising them as evidence of a “cold war mentality” and an effort to hold back China’s development.

Sullivan said the Biden administration has been careful to telegraph its policies to Beijing, explain its intentions and make it clear these are intended to protect US national interests and not undercut China or decouple the two economies.

US-China ties should not be ‘held hostage’ by Taiwan issue: Beijing adviser

But he also pushed back in Bangkok during discussions with Wang on the boundary between economics and national interests, he said.

“It’s really important to recognise that, for a very long time, [China] has taken measures on explicit grounds of national security that have had an adverse impact on American workers, American businesses, the American economy. And so this cannot be a one-way street of a conversation.”

Sullivan said Washington, Beijing and Taipei all worked to reduce tensions in and around Taiwan’s recent elections, which followed a Xi-Biden agreement in November to resume military-to-military communication.

“The question now is whether that will continue even in the face of future turbulence. We for our part will continue to make the case the military-to-military communication is critical at all times, but especially in times of tension,” he said.

Sullivan, who did an internship at the Council on Foreign Relations while in college, used the opportunity to take a broader look at US-China policy – and take a bit of a victory lap.

When the Biden administration came to power, it was fighting a narrative espoused by China that the East was on the rise and the West in inexorable decline, its alliances in disarray, its industrial base decaying, he told the conference.

And while the administration of former president Donald Trump had correctly assessed the need to reshape strategy, it never developed effective tools and was too often confrontational, Sullivan said.

The Biden administration has since developed its “invest, align, compete” approach while focusing on addressing US problems and investing in US infrastructure and industrial revival, he said.

US visit firms speculation Liu Jianchao will be China’s next foreign minister

According to Sullivan, investments in semiconductors and clean energy are up twentyfold, construction spending has doubled and an estimated US$3.5 trillion in investments has been released by the Chips and Science Act and other legislation.

“America in this moment is once more showing its capacity for resilience and reinvention,” he said.

Left unspoken by the senior official – who artfully evaded the topic during questioning – was any overt comparison with the Chinese economy, where youth unemployment has risen sharply, growth is slowing and its real estate industry swoons.

Sullivan conceded that the US has abandoned its mistaken belief over decades that it could shape or change China.

He argued that a key to improved relations has been dogged, hard-nosed diplomacy since a Chinese balloon crossed the US mainland and was shot down a year ago, derailing efforts to put a floor under ties.

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China and US vow closer cooperation in fighting America’s fentanyl crisis as drugs group begins its work

https://www.scmp.com/news/china/diplomacy/article/3250435/china-and-us-vow-closer-cooperation-fighting-americas-fentanyl-crisis-drugs-group-begins-its-work?utm_source=rss_feed

China and the United States have pledged to step up efforts to fight illicit drugs such as fentanyl as part of their latest efforts to stabilise relations.

An inter-agency US delegation led by deputy homeland security adviser Jen Daskal travelled to Beijing on Tuesday for a two-day talk with their Chinese counterparts and to launch a counternarcotics working group.

“It is hoped that both sides will … continually expand cooperation in various fields to inject more positive energy for the stable, healthy and sustainable development of China-US relations,” Wang Xiaohong, the Chinese Minister of Public Security, told the working group’s inaugural session, according to a report by state news agency Xinhua.

The US said the two sides had agreed to better coordinate efforts by law enforcement to disrupt the flow of fentanyl and its precursor chemicals, address the illicit financing of transnational networks and improve information sharing.

“It was a good set of discussions,” White House national security council spokesman John Kirby told the press on Tuesday. “That’s a good start, but it is just a start. And there’s a lot more work to be done.

“The goal here is to produce concrete and measurable actions that lead to a reduction in the supply of these precursor chemicals that are killing, again, so many Americans.”

Washington described the working group as “one of the breakthrough agreements” at a meeting between Presidents Joe Biden and Xi Jinping in California two months ago.

US officials have been repeatedly pressuring Beijing to act on the fentanyl issue after it froze counternarcotics cooperation in 2022 August in retaliation for the visit by the then US House speaker Nancy Pelosi to Taiwan, which it saw as a serious breach of its sovereignty.

US lawmakers criticise lifting of sanctions to gain China’s help on fentanyl

The US has also labelled China as a “primary source” of ingredients used in manufacturing fentanyl and fentanyl-related substances illegally brought into the US largely by Mexican cartels, but Beijing has long denied any involvement in America’s deadly opioid crisis.

After the Xi-Biden summit, the US removed China’s Institute of Forensic Science, which analyses and monitors narcotics, from a blacklist.

The Ministry of Public Security lab had been sanctioned in 2020 over alleged human rights violations in Xinjiang, accusations China strongly denies.

Meanwhile, the Chinese narcotics control commission warned companies and individuals against selling equipment and precursor chemicals that could be used to produce the opioid overseas, and the authorities have also pledged to target the “smuggling and trafficking of fentanyl-type substances”.

Opioid overdoses killed more than 80,000 people in the US in 2021, according to the US Centres for Disease Control and Prevention.

Nearly 88 per cent of those deaths involved low-cost and highly potent synthetic opioids such as fentanyl.

In an address to US business leaders in San Francisco in November, Xi said that China “sympathises deeply with the American people, especially the young” over the suffering caused by fentanyl.

During the same trip, Xi met his Mexican counterpart Andres Manuel Lopez Obrador, who also pledged to work with China to combat the problem.

Xi and Biden working to enhance trust, says Chinese foreign minister

The US and China are also stepping up cooperation in other fields – including climate change and agriculture – following the Xi-Biden summit, while high-level communications between the two militaries, another casualty of the Pelosi visit to Taiwan, have also resumed.

China, which sees Taiwan as part of China, viewed her trip as a serious breach of its sovereignty. The US, in common with most countries, does not recognise Taiwan as independent but opposes any forcible change in the status quo.

A financial working group has also been meeting and the two countries are planning talks on artificial intelligence and to hold the first meeting of a new commercial working group in the coming weeks.

Myanmar hands over junta-backed warlords to China in telecoms scam case

https://www.theguardian.com/world/2024/jan/31/myanmar-hands-over-junta-backed-warlords-china-telecoms-scam-case-fraud-trafficking

Myanmar has extradited 10 people, including notorious warlords, to China, where they are wanted for their alleged role in running abusive online and telephone fraud centres in which tens of thousands of foreign nationals are trapped and forced to run scams.

The centres – which target people in China as well as in other countries - have flourished since the Covid-19 pandemic and China says about 44,000 people have been involved, including victims of human trafficking.

The Chinese embassy in Myanmar on Tuesday named six of the people who had been handed over to China’s ministry of public security from the Kokang self-administered zone. They included Bai Suocheng, a Chinese warlord who heads one of the four families who have effectively ruled the area in north-east Myanmar for several years.

Chinese authorities in December issued warrants and bounties, which ranged from 100,000 yuan (£11,108) to 500,000 yuan, for the capture of Bai and nine other key figures accused of being involved in the scam centres.

A military coup in 2021 in Myanmar toppled the government and started a civil war that has enabled armed groups and criminal gangs to take control over parts of the country. The 44,000 people thought to have been involved in the scam centres include thousands who have been trafficked, as well as nearly 3,000 fugitives who are wanted in China.

Beijing has long pressed Naypyidaw to crack down on the scam centres but to little effect. Gen Min Aung Hlaing, Myanmar’s military ruler, has supported the Chinese mafia families, straining relations with Beijing.

In October, an alliance of ethnic rebel groups launched a major offensive, known as Operation 1027, which pledged to root out telecom fraud operators as well as toppling the junta – a commitment that some analysts says was designed to win support from China.

The Chinese embassy’s statement on Tuesday praised the “landmark success in the cooperation of China-Myanmar law enforcement in international police affairs”.

Chinese media published photographs and videos of the suspects on their chartered flight to Kunming, the capital of China’s south-west Yunnan province, where they were escorted on to the asphalt by dozens of Swat officers. The suspects had their hands tied behind their backs and wore large white placards stating their names in English.

Between September and November last year, Myanmar handed over 31,000 telecom fraud suspects to China, according to the Chinese authorities.

China’s top fabless chip firms estimate big 2023 losses despite push for greater self-sufficiency in semiconductors

https://www.scmp.com/tech/tech-war/article/3250465/chinas-top-fabless-chip-firms-estimate-big-2023-losses-despite-push-greater-self-sufficiency?utm_source=rss_feed

China’s leading chip companies, from Loongson Technology to Cambricon Technologies, expect to log huge losses for 2023 in spite of Beijing’s push for greater self-sufficiency in semiconductors, according to corporate filings.

Loongson Technology, a fabless chip firm that is a firm advocate for domestic semiconductor development, is estimating a full-year loss of 310 million yuan (US$43.36 million) against a 51.8 million yuan profit in 2022. It also expects 2023 revenue to come in at about 508 million yuan, down 31 per cent year-on-year, according to an earnings release on Tuesday.

Meanwhile Beijing-based Cambricon Technologies, which produces artificial intelligence (AI) accelerators, is projecting a full-year loss of up to 924 million yuan, which would be 40 per cent narrower than its loss in 2022 due to cost-cutting efforts. It is forecasting 2023 revenue to be slightly down from 722 million yuan in 2022, according to an earnings forecast also issued on Tuesday.

Loongson cited softness in the industrial chips market and heavy spending on research and development for the weaker performance in 2023. Cambricon did not elaborate on the reasons behind its weaker showing. Both companies are on a US Commerce Department trade blacklist, which restricts their ability to buy advanced US-origin technologies and sell to certain customers.

China’s flagship CPU designer puts on a brave face amid US sanctions

Tougher US sanctions since October 2022 have further restricted what global semiconductor companies such as Intel and Nvidia can sell to Chinese customers. Although Beijing is pushing the development of domestic alternatives, it appears progress is slow.

Industry professionals and analysts say the strict US sanctions and limited product catalogues at Chinese firms are hindering this domestic development, along with a tougher environment in 2023.

“It’s not just them [Loongson and Cambricon], everyone struggled a bit last year,” said Stewart Randall, head of electronics and embedded software at consultancy Intralink. “A lot of companies like Loongson and Cambricon, they don’t really sell into the mass market, and that is where semiconductor companies make real money.”

Randall pointed out that government procurement from these companies lacks volume and economy of scale to prop up their businesses, coupled with US sanctions that impact their access to the services of global foundries.

An engineer at Chinese server and internet gear company H3C, who declined to be named due to the sensitivity of the matter, said Loongsoon’s home-grown architecture is niche and the performance of its chips not as good relative to peers, meaning less adoption in the server market.

Loongson has developed several server-facing central processing units – including the 3C5000 and 3D5000 – while Cambricon has rolled out cloud-facing AI chips for both training and reference purposes.

China has been keen to build up GPU-based computing power since OpenAI’s ChatGPT ignited a new global AI race in late 2022, with companies vying to produce bigger-parameter models and killer applications.

Computing power is the key to win this AI game as it helps shorten the time to train the large language models the technology is based on, and increase the speed of reference and citations. Chinese tech firms with deep pockets like Baidu, Tencent Holdings, Alibaba Group Holding and ByteDance were big buyers of Nvidia’s latest GPUs before sanctions kicked in.

Beijing has laid out a plan to boost the country’s aggregate computing power by more than 50 per cent by 2025. By the end of June last year, China’s total computing power reached 197 EFLOPS, equal to one quintillion floating-point operations per second, a measure of a computer’s speed, according to government data.

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Couple in China kick elderly parents out of own home after transferring flat ownership to grandson

https://www.scmp.com/news/people-culture/trending-china/article/3249458/heartless-couple-kick-elderly-china-parents-out-own-home-after-transferring-flat-ownership-grandson?utm_source=rss_feed

The plight of an elderly couple driven out of their own home by their son after signing the property over to their grandson, has outraged mainland social media.

Jin, 86, regretted his decision after his son and daughter-in-law threw him out, forcing him and his wife, also in her eighties, to stay in a guest house.

They had been living in the flat since the 1990s when the university Jin was working at allocated it to the couple.

A few years ago when he was in poor health after an operation, Jin’s son and daughter-in-law began hounding him to sign the property over to their son.

Jin’s wife was concerned about losing their home, but Jin chose to trust his family, so he signed the document without telling his wife.

“The flat would go to my son and grandson in the end, so I did not think they would do anything terrible to me before I died,” Jin said.

The value of the ownership transfer was 1.05 million yuan (US$150,000).

“They did not actually pay a penny. The ownership went straight to my grandson,” Jin told reporters. “But I have the right to use the flat. My wife and I can live in it until we die,” he said.

When Jin’s health took a turn for the worse and he had difficulty entering and leaving the flat because it does not have a lift, he leased the place to a friend and moved into a property on a lower floor in another residential community.

Jin’s nightmare began last year when his son told him he was going to sell the flat and buy a villa with the money.

When a shocked Jin tried to dissuade him, he was verbally abused by his son, who had also kept all the rental income.

When the tenant’s lease ended, Jin and his wife tried to move back into their home but discovered the locks had been changed by their son.

The helpless couple slept on the cold, hard floor outside the flat, but the heartless son and daughter-in-law did not appear to care.

“Your grandson says it’s his flat, so you do not have the right to use it,” they said.

The stressful situation caused Jin to collapse and he was taken to hospital.

When his wife asked their son if she could rest in the flat, he refused to open the door.

The homeless old couple were forced to move into a guest house, while they sought legal advice to try and get their home back.

The story has sparked widespread outrage on mainland social media.

“The son is really a demon,” one online observer said.

“How awful! I hope Jin gets his home back,” said another.

Stories about property disputes often make headlines in China.

Earlier this month, a property management company in Shanghai used the flat of a dead former owner with no living relatives to inherit it as staff accommodation.

Last year, an 18-year-old man in central China sold an inherited property worth one million yuan (US$140,000) at half price to buy a motorbike until legal action by his family cancelled the sale.

Chinese Premier Li Qiang urges manufacturing firms to ‘spare extra money’ for R&D investment

https://www.scmp.com/economy/china-economy/article/3250451/chinese-premier-li-qiang-urges-manufacturing-firms-spare-extra-money-rd-investment?utm_source=rss_feed

Premier Li Qiang asked manufacturers to increase investment in research and development after completing a two-day trip to the central province of Shaanxi on Tuesday, with China struggling to climb up the value chain amid ongoing US technology restrictions and gradually cooling economic momentum.

Shaanxi is a vital energy hub due to its rich coal and oil resources, while it also boasts one of the world’s largest producers of heavy truck transmissions and monocrystalline silicon.

Its semiconductor industry is also the fourth-largest in China in terms of scale, according to the Shaanxi government.

“If manufacturing companies want to stand firm in a competitive market, they must spare extra money on research and development,” Li said in a statement, according to the official Xinhua News Agency.

China plans to turn hi-tech lab innovations into globally competitive goods

During his second trip of the year, following a visit to Hubei province earlier this month, Li continued to visit hi-tech manufacturing companies.

China is endeavouring to shift its traditional economic model of mass production by moving up the hi-tech value chain, amid a fading demographic dividend and a faltering economic recovery.

The quest for home-grown technology has also become more urgent amid Washington’s technology curbs.

Li visited Shaanxi Fast Auto Drive Group, which is one of the world’s largest suppliers of commercial vehicle transmissions.

He asked the manufacturer to embrace the automotive industry’s emerging trends by boosting the integration of digital technologies and green initiatives into their production lines.

“We should strive to crack the core bottom technological problems [in the chips field], and grasp greater market discourse and development initiative,” Li said during a visit to ESWIN Technology Group, which produces semiconductors used in communications and automobiles.

The chip maker, like the other companies Li visited during the two-day trip, is not included on Washington’s so-called entity list, which restricts American tech products, talent and investment flows between China and the US.

The premier also visited Western Superconducting Technologies, which claims to be the world’s only full-process producer of niobium-titanium ingot rods, superconducting wires and magnets, that are widely used in medical MRI imaging and maglev trains.

China needs ‘groundbreaking’ policy changes to embrace disruptive technologies

The company says it is also the only company in China that commercially produces low-temperature superconducting wires.

Low-temperature superconductivity is an emerging sector targeted by major countries, and it is seen as another potential disruptive technology following artificial intelligence and new energy.

Li encouraged the former research institute to focus on creating more technologies and continuously improving the transformation and industrialisation of scientific and technological achievements.

China’s manufacturing industry has long faced low investment in research and development (R&D), a gap that is particularly pronounced with the US.

Chinese investment in applied research, mainly driven by enterprises, accounts for about 10 per cent of its total R&D investment, lagging behind 19 to 23 per cent in the US, according to a study by Chinese economist Wu Fuxiang in October.

“China’s manufacturing R&D investment is seriously insufficient, which leads to a lack of innovation of its manufactures, this has made the gap between China’s manufacturing technology and the US’ to widen further,” said Wu, who is a professor at the School of Business at Nanjing University.

Wu predicted that the size of the US R&D talent pool would be three times the size of China’s by 2025, down from four times as big in 2015. He said the ratio would fall to 2.8 by 2030, but that it would continue to pose a problem for China.

“It will be harder for China to overtake the US in terms of the size of its R&D workforce in the future,” he added.

In the manufacturing sector, the share of medium to hi-tech output in China and the US would stand at 46.02 per cent and 44.54 per cent by 2025, respectively, according to Wu.

“The fading demographic dividend in China and the continuing decreasing labour productivity means that increasing the share of medium- and hi-tech output is an important breakthrough for China’s manufacturing sector to compete globally,” Wu said.

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Chinese selfie apps giant Meitu sees profits triple in 2023 on back of new generative AI-powered tools

https://www.scmp.com/tech/tech-trends/article/3250454/chinese-selfie-apps-giant-meitu-sees-profits-triple-2023-back-new-generative-ai-powered-tools?utm_source=rss_feed

Chinese selfie apps giant Meitu said new image-and-video-editing tools powered by artificial intelligence (AI) helped the company triple its profits last year, in stark contrast to how many other firms struggle to monetise the technology through their own generative AI initiatives.

Citing its preliminary assessment of unaudited accounts, Hong Kong-listed Meitu estimated net profit last year to be between 330 million yuan and 370 million yuan (US$46.36 million and US$51.98 million), up more than 200 per cent from 2022’s net profit of 111 million yuan, according to the company’s statement last week.

The surge in profits was attributed to its generative AI-based image and productivity tools that include Action, which enables users to produce narrated videos, and X-Design, a platform that allows users to create graphics design for posters of products and services.

Both of those tools “exceeded expectations” in terms of user growth and subscription conversion, according to Meitu.

Generative AI refers to algorithms, such as those in ChatGPT and similar services, that can be used to create new content, including audio, code, images, text, simulations and videos.

Meitu’s success in monetising its generative AI tools comes as major tech companies in the United States, China and elsewhere are struggling to turn a profit from their own initiatives, while continuing to make huge capital outlays in this market segment.

Microsoft, Alphabet’s Google and Advanced Micro Devices, three US Big Tech firms striving to incorporate AI into their products, saw their shares slip in late trading on Tuesday, as investors sought more clarity and tangible results from these companies’ AI efforts.

Companies continue to face challenges in generating income from their AI initiatives, according to Kenneth Fong, head of China internet research at Swiss investment bank UBS, in a briefing in Hong Kong on Tuesday. He said it was “not easy” to get Chinese consumers to pay for software and to convince enterprises to adopt these solutions when they are looking to cut costs in a bad economy.

Microsoft, Alphabet and AMD tout AI progress, but investors want tangible results

Meitu also said it has made significant headway on its global expansion last year, as its products are now available in 195 countries and regions, according to the company’s statement. The firm also indicated that it recorded “rapid growth” of subscribers outside mainland China last year.

Founded in 2008 in Xiamen, a city in southeastern Fujian province, Meitu announced a major push into generative AI last June when it launched a range of new AI tools for images and videos, as well as the latest iteration of MiracleVision – its self-developed AI large vision model.

That followed internal efforts that included introducing AI tools into employee workflows and training programmes for workers to better understand the technology, according to Meitu founder and chief executive Wu Xinhong, who was cited in a report by technology media outlet 36Kr in June.

Meitu’s generative AI push appears to have boosted investor confidence in the company when its shares jumped more than 7 per cent last week after its 2023 profit estimates were announced. On Wednesday, Meitu’s shares closed down 3.73 per cent to HK$2.32.

Meitu, China’s selfie king

Meitu went public in Hong Kong in 2016 after the worldwide success of its app, which enabled people to touch up their selfies by removing blemishes, enlarging their eyes or making their faces and bodies look slim.

Still, the app maker’s share price went through a slump when several earlier bets did not pay off. The company tried to compete in the smartphone market, pivoted to social media and then made large investments into cryptocurrencies.

In July 2022, Meitu warned investors that its losses could widen by as much as 154 per cent after cryptocurrency prices plunged owing to a series of exchange meltdowns.

China Evergrande liquidation: ‘thin payout’ likely for offshore creditors as legal drama plays out, S&P says

https://www.scmp.com/business/china-business/article/3250460/china-evergrande-liquidation-thin-payout-likely-offshore-creditors-legal-drama-plays-out-sp-says?utm_source=rss_feed

An agreement struck in 2021 to mutually recognise liquidation orders in mainland China and Hong Kong may not apply to China Evergrande Group, according to a S&P Global Ratings report on Wednesday.

The liquidation order is difficult to implement because most of Evergrande’s assets are not in the three mainland China cities – Shanghai, Xiamen and Shenzhen -covered under the pilot programme, according to the report.

The agreement – the Mainland-Hong Kong Cooperation Mechanism – was struck in May 2021 for mutual recognition and assistance in insolvency proceedings between the courts in the three mainland cities and Hong Kong.

“The liquidation is a milestone for China’s biggest corporate defaulter with US$337 billion in liabilities,” said Esther Liu, credit analyst at S&P Global Ratings. “But much of this story is yet to be told. The bulk of the issuer’s assets and liabilities are in mainland China, outside the purview of the Hong Kong court.”

Adding to the pain, Evergrande’s offshore creditors will only be paid after the onshore creditors, as they rank lower in the repayment pecking order when the assets are liquidated, the report said.

Evergrande, one of the world’s most indebted property developers, was ordered to wind up by a Hong Kong court on Monday, after it failed to reach a consensus with creditors on a “concrete restructuring proposal” following years of discussions. The court appointed Eddie Middleton and Tiffany Wong Wing-sze, managing directors of the consulting firm Alvarez & Marsal, as provisional liquidators for the developer.

Why offshore creditors will remain nervous about Evergrande liquidation

The court’s liquidation order triggered an implosion in the shares and bonds of Evergrande and its affiliates, further diminishing the value of its recoverable assets.

Meanwhile, Fengtao (Shanghai) Property Company, an indirect subsidiary of Evergrande that was set up in 2016, will be put up for auction on Thursday, according to local media Guandian.

The Shanghai No 3 Intermediate People’s Court accepted the company’s bankruptcy liquidation case in May last year, the report said. Dues owed to Fengtao amounting to some 11.48 billion yuan (US$1.6 billion) will be auctioned, it added.

S&P said it expected the winding-up to highlight the arduous task of liquidating a large company, and reset expectations about recovery rates on defaulted Chinese speculative-grade bonds in the offshore market.

There is substantial legal and execution risk when trying to extract value from the onshore entities, the report said.

A research report by Natixis on Wednesday noted that more Chinese developers could possibly end up in the same situation as Evergrande, as a precedent was set.

Natixis said the dilemma for offshore creditors is that the enforcement of the ruling will be carried out in a different jurisdiction, and those developments may affect foreign investors’ perspective.

The liquidation order comes at a tricky time when China’s capital flows through direct and portfolio investment face more pressure, according to the report. “Such risk-averse sentiment can be amplified with the lower repayment priority for offshore bondholders, confirming our prediction in October 2021, and the potential losses for shareholders.”

Markets see a silver lining for China property in Evergrande’s liquidation order

Evergrande has more than 1,200 projects at different stages of progress, ranging from near completion to under construction, according to its 2022 annual report.

It would be difficult for offshore creditors to take control of Evergrande’s mainland assets, especially considering the priority to deliver 1.6 million pre-sold homes, according to a Citi report on Wednesday.

The offshore liquidator has to deal with each entity and its own set of managers, shareholders and onshore creditors in their respective legal jurisdictions.

“We assume offshore bondholders will get a few cents on the dollar once the liquidation plays out,” said Chang Li, S&P Global Ratings’ China companies specialist.

“They will likely have to wait years even for this thin payout.”

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Chinese archeologists have dug up fresh clues about early humans – and stunning new insights

https://www.scmp.com/news/china/science/article/3250455/chinese-archeologists-have-dug-fresh-clues-about-early-humans-and-stunning-new-insights?utm_source=rss_feed

As the waters began to recede from a flash flood on a river in southwestern China in 2021, few could have predicted how such a rare weather event would illuminate the region’s distant past – and the lives of some of its earliest palaeolithic human inhabitants.

The Mengxi River site in Sichuan province has since revealed clues about how people lived 50,000 to 70,000 years ago, a key moment in the study of the origin and spread of modern humans.

It seems the ancient riverside hunting settlement was a thriving hive of activity. Scientists have unearthed a trove of tools, animal fossils and plant remains. But signs of ancient carvings and cuttings, as well as the use of fire point to the wisdom and specialisation of the site’s residents.

Discovery of ancient Chinese dam points to rise of ‘great power’ 5,000 years ago

“They lived by a small river, surrounded by ancient forests with towering trees, that were home to elephants, rhinos, deer and other animals,” Wang Youping, a professor of the School of Archaeology and Museology at Peking University, told local outlet Sichuan Online.

“Tens of thousands of years have gone by. Mighty trees fell, leaving behind countless branches and trunks, while animals turned into fragments of fossils,” he said.

Wang, who specialises in paleolithic archaeology, said the scene is unusual in the field of palaeolithic archaeology, adding that its protection should be carefully considered.

The discovery is so significant that is was declared one of the six most important archaeological findings of 2023 in China this month during an archaeology forum organised by the Chinese Academy of Social Sciences, along with other sites in Fujian, Hubei, Inner Mongolia, Shaanxi and Xinjiang.

The site is rich in animal fossils and reveals a profound understanding of animal resources, as well as the hunting capabilities of the inhabitants, according to Zheng Zhexuan, leader of the archaeological team from the Sichuan Provincial Cultural Relics and Archaeology Research Institute.

Zheng said at least 30 species of animal fossils have been found, including elephants, rhinoceroses, bears, cattle, deer, macaques, fish, turtles, snakes, frogs, birds, porcupines and bamboo rats.

“They represent almost all large groups of animals, including different sizes, water, land and air animals, as well as carnivores and herbivores,” he said.

The Mengxi River site, he added, is the earliest site in China where abundant aquatic animal remains were uncovered and one of the earliest locations that reveals clear evidence of carnivores being processed and consumed.

Researchers found cutting marks on a bear’s toe bone, which could point to ancient humans breaking animal bones to eat the marrow inside.

The scientists said humans at the site were very good hunters because they were going after large carnivores such as bears – very dangerous even in modern times – and giant animals such as elephants and rhinos.

One piece of animal bone recovered from the site revealed more than 10 parallel lines scratched onto a surface area about 3.5mm (0.14 inches) wide, and “X”-shaped scratches on other bones, possibly pointing to symbolic behaviours exploring art or the spiritual world.

Plant remains were also rare finds for archaeologists. It is generally believed that palaeolithic people were hunter-gatherers, but the scarcity of plant remains has kept research limited in this area.

The team found seeds and fruits of mostly edible plants from in the soil. Zheng said the specimens included fruit such as peaches and grapes, and nuts such as acorns and walnuts – the earliest evidence of nuts at any palaeolithic site.

Scientists also uncovered clues that suggested the early use of medicinal plants, such as a species of elderberry known as Chinese elder and the Ajuga ciliata Bunge, which are used in Chinese medicine to treat injuries, relax muscles and enhance blood circulation.

Scientists find first genetic evidence of multiracial population in ancient China

The widespread use of plants was previously thought to have begun during the transitional period from the Old to New Stone Age.

“But the discovery of a large number of plant remains at the site shows that ancient humans here had a profound knowledge and utilisation of plant resources, which will greatly rewrite the history of the use of plants by prehistoric humans,” he said.

“The rich animal and plant resources provide invaluable materials to understand the environment and climate at that time.”

People at the time mostly made tools from petrified wood – fossils of wood that have turned to stone – but they also fashioned the bones of large mammals into tools, the researchers said.

As for the use of fire, archaeologists discovered carbonised wood, burnt acorns and the jaw bones of a stegodon – an extinct type of elephant – that had been exposed to high heat, possibly through the use of fire.

Chen Shengqian, a professor at the Department of Archaeology and Museology at China’s Renmin University, said the discoveries at the site could disrupt the current understanding of ancient humans and enrich our knowledge of the Middle Paleolithic.

“Many carved symbols were found there, some very finely done, providing us with precious materials for studying non-functional behaviours of ancient humans,” he told Sichuan Online.

“If unearthed fish bone fossils were used by humans, it means that they began to utilise aquatic resources tens of thousands of years ago, challenging the current belief that human use of fish only began 10,000 years ago.

“If acorns with traces of fire roasting were confirmed to be processed by humans, it would also upend our current understanding,” he said.

‘Extremely heinous’: Myanmar hands over 10 leading cyber scam suspects to China

https://www.scmp.com/news/china/diplomacy/article/3250407/extremely-heinous-myanmar-hands-over-10-leading-cyber-scam-suspects-china?utm_source=rss_feed

Myanmar authorities handed over 10 alleged cyber scam suspects to China, a move Beijing hailed as a “historic and significant” moment since launching a sweeping crackdown against online fraud last year.

They were extradited to China on Tuesday and include six accused ringleaders of cybercrime gangs and four others who are considered “major criminal suspects”, according to the Chinese Ministry of Public Security.

The suspects include Bai Suocheng, former chairman of northern Myanmar’s Kokang self-administered zone, and his son and daughter. Members of two other alleged crime families – the Wei and Liu families – and Xu Laofa, who is accused of leading another fraud gang, were also extradited, the ministry said on Tuesday.

The 10 suspects were named to Beijing’s wanted list in December, with authorities offering cash rewards of up to 500,000 yuan (US$70,000) for any information leading to the arrests.

China issues most wanted list in bid to hunt down Myanmar cybercrime kingpins

The ministry said the criminal enterprises “vigorously organised and established fraudulent hideouts, openly armed themselves to protect the fraud activities, and relentlessly carried out telecommunications network fraud crimes against Chinese citizens”.

They are accused of “extremely heinous” crimes, including intentional murder, intentional injury and illegal detention, it said.

Since the two countries launched the crackdown in September, Myanmar has handed over 44,000 fraud suspects to China, including 171 core members and “financiers” to the criminal enterprises.

The ministry said the progress reflected the “historic and significant” result of its efforts in combating these crimes and dealt a “heavy blow to arrogant overseas fraud syndicates”.

China, Thailand, Laos team up to fight cybercrime gangs in Myanmar

Beijing has increased measures to tackle cyber fraud as cases have gained notoriety online and the public has grown increasingly concerned about the scams, which often lure Chinese nationals to northern Myanmar, where they are then trapped and forced to work for criminal gangs.

Many posts on Chinese social media describe how people were tricked and then coerced into taking part in investment fraud, romance scams and extortion on behalf of the syndicates.

The money generated from the scams is often diverted through casinos and converted into hard-to-trace cryptocurrencies. Beijing has responded by targeting Chinese fugitives believed to be at the apex of the criminal enterprises.

In November, Beijing arrested members from the Ming crime family, whose leader owned the infamous Crouching Tiger Villa, a large telecoms scam compound in Kokang.

The head of the family, Ming Xuechang, also known as Myin Shaw Chang, is believed to have committed suicide while on the run from the Myanmar police, according to Chinese authorities.

China’s assistant foreign minister Nong Rong visited Myanmar in November and called for joint efforts in tackling cross-border crime and maintaining border stability.

Since October, Myanmar’s ruling military has faced attacks in the country’s borderlands as an alliance of ethnic minority insurgent groups and pro-democracy fighters have joined forces to challenge the junta’s rule.

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‘10 cups of tea’: for first time China’s top intelligence agency spells out reasons for questioning by authorities

https://www.scmp.com/news/china/politics/article/3250419/10-cups-tea-first-time-chinas-top-intelligence-agency-spells-out-reasons-questioning-authorities?utm_source=rss_feed

For the first time, Beijing’s top intelligence agency has laid out 10 conditions subject to scrutiny by its agencies – mainly concerning national security, state secrets and violating the country’s updated anti-espionage law – that could lead to questioning, known in slang as “an invitation to tea”.

In an article posted to its WeChat account on Tuesday, the Ministry of State Security acknowledged the euphemism by referring to “10 cups of tea” that could lead to a summons.

The 10 offences include endangering national security, illegally acquiring or holding state secrets and committing or assisting espionage. It warned against refusing to cooperate in an espionage investigation, leaking state secrets related to counter-espionage and intelligence works and failing to take security precautions against spying.

The emphasis comes as authorities in mainland China and Hong Kong plug legal loopholes to tackle potential threats to national security.

Also on Tuesday, Hong Kong Chief Executive John Lee Ka-chiu unveiled plans to enact sweeping domestic national security legislation targeting offences including ­treason, theft of state secrets and espionage.

Beijing ramped up its anti-espionage efforts last year, and the ministry has called for tip-offs from the public about suspected foreign spy activity.

China says it detained ‘foreign spy’ accused of passing secrets to MI6

The updated counter-espionage law that came into effect in July expanded both the definition of spying and the investigative powers of national security law enforcement agencies.

Late last year, the country’s Law on Guarding State Secrets also had its first major proposed update in a decade to expand the depth and reach of its coverage amid rising geopolitical tensions.

The tightened national security scrutiny saw several foreign consulting companies targeted in raids. In April, local police questioned staff at US consultancy Bain & Company’s Shanghai office and in May authorities raided international consulting firm Capvision.

The Ministry of State Security’s WeChat article acknowledged that the phrase “invitation for a tea” had become an internet buzzword to mean “being summoned or investigated for suspected offences”.

It warned individuals and organisations against illegally producing, selling, holding or using spy devices such as wiretapping and interception devices.

The ministry also drew attention to an aspect of the anti-espionage law regarding construction projects in security control areas surrounding important units and facilities which it said were subject to the approval of state security agencies.

The ministry said the legal provision aimed to “detect and prevent in a timely manner” the use of construction projects by foreign spy agencies.

Foreigners found violating the anti-espionage law could be ordered to leave the country within a designated period and violating the official decision could trigger a summons.

China targets devices it says are used to send flight data to ‘foreign entities’

While listing the conditions that could trigger a summons, the ministry added a warning that other acts that endanger national security could also lead to legal consequences.

“The whole society should firmly establish the concept of national security,” the ministry said in the article.

It called on “joint hands to build a solid barrier to safeguard national security”.

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South China Sea: Chinese coastguard ‘drove off’ Filipinos in latest run-in at disputed Scarborough Shoal

https://www.scmp.com/news/china/diplomacy/article/3250413/south-china-sea-chinese-coastguard-drove-filipinos-latest-run-disputed-scarborough-shoal?utm_source=rss_feed

The Chinese coastguard says it “drove off” four Filipinos from a disputed shoal in the South China Sea, the latest run-in between the two nations over the rich fishing waters.

In a statement released late on Tuesday, the coastguard claimed the Filipinos had “illegally intruded into” Scarborough Shoal on Sunday, without saying if the four people were on a fishing boat.

Spokesman Gan Yu said the coastguard had “issued a warning and drove them off in accordance with the law, in a professional and standard manner”.

“China has indisputable sovereignty over Huangyan Island and its adjacent waters and has always resolutely countered the infringing acts of the Philippine side,” he said, using the Chinese name for the shoal.

He said the coastguard “will, as always, safeguard and enforce its rights and interests in the waters under China’s jurisdiction, and resolutely defend national sovereignty and maritime rights and interests”.

China’s expansive claims over most of the South China Sea are contested by neighbouring countries, including the Philippines.

The latest confrontation comes less than two weeks after Beijing and Manila agreed to manage their disputes in the South China Sea during talks in Shanghai on January 17.

China’s statement on the incident was also released hours after the Philippines and Vietnam agreed to expand cooperation between their coastguards when Philippine President Ferdinand Marcos Jnr was in Hanoi on Tuesday. Like the Philippines, Vietnam has territorial disputes with China in the South China Sea and is a vocal critic of its vast claims to the waters.

The Chinese coastguard also released a video it said was filmed on a vessel involved in Sunday’s confrontation. The footage shows an officer issuing a radio warning in both Chinese and English.

“You have severely interfered with our sovereignty and security of China and severely violated international law and the laws of the People’s Republic of China,” he says. “Stop your illegal access and leave this area.”

Scarborough Shoal – a triangle-shaped chain of reefs and rocks in the middle of the South China Sea – is a traditional fishing area for both countries. It is located about 120 nautical miles west of the Philippine island of Luzon and 594 nautical miles from China’s Hainan Island.

China took control of Scarborough Shoal after a tense stand-off between Chinese and Philippine ships in 2012, an incident that prompted Manila to launch an international arbitration case over their disputes in the South China Sea. Four years later, the Permanent Court of Arbitration in The Hague dismissed Beijing’s sweeping claims over the waterway – though China did not take part in the process and has rejected the ruling.

Tensions over Scarborough Shoal were reignited in September after the Chinese coastguard installed a floating barrier to stop Philippine fishing boats from entering its lagoon, a prime fishing patch. The Philippine coastguard said it had removed the barrier, but the Chinese coastguard later said it had dismantled the barrier voluntarily.

‘I just laughed at them’: the Filipino fishermen facing off against China

In December, the Philippines accused China’s coastguard of using water cannon to “obstruct” three government boats delivering fuel and food supplies to Philippine fishing vessels near Scarborough Shoal. China claimed the boats had “intruded” into the waters.

Filipino fishermen also told Manila’s coastguard they had been driven away from Scarborough Shoal by the Chinese coastguard earlier this month and ordered to dump their catch at sea.

China EVs: lithium producers Ganfeng, Tianqi issue profit warnings, blame price plunge for battery material as stocks sink

https://www.scmp.com/business/commodities/article/3250393/china-evs-lithium-producers-ganfeng-tianqi-issue-profit-warnings-blame-price-plunge-battery-material?utm_source=rss_feed

Shares of Ganfeng Lithium and Tianqi Lithium, two of the world’s largest producers of the metal that powers batteries for all kinds of products including electric vehicles (EVs), fell after warning their profits plunged last year due to sharply lower prices.

Xinyu, Jiangxi province-based Ganfeng, which said its production capacity was the world’s third largest and China’s biggest last year, said in a filing late on Tuesday that it expects its 2023 net profit to decline between 70 and 80 per cent year on year to between 4.2 billion yuan (US$587 million) and 6.2 billion yuan.

After accounting for non-recurring losses and gains, net profit will amount to between 2.3 billion yuan and 3.4 billion yuan, down between 83 and 88.5 per cent from the 2022 level, it added.

Sichuan province-based rival Tianqi also posted a profit warning on Tuesday, saying it expects net profit to decline between 62.9 and 72.6 per cent to between 6.62 billion yuan and 8.95 billion yuan.

“Due to the cyclical [nature] of the lithium industry and the growth rate of [end-user] demand slowing down, [there was] a significant decrease in the price of lithium-salt products,” Ganfeng said in its filing to Hong Kong’s bourse.

This meant the company had to book major provisions for asset impairments, resulting in lower profits, according to accounting rules. It had 35.68 billion yuan worth of lithium ore at the end of June last year, according to its interim results report.

Tianqi also cited declining lithium prices for the need to book asset-impairment losses.

Ganfeng shares dropped 3.8 per cent to HK$21.15 at the noon trading break on Wednesday in Hong Kong, after falling as much as 6.6 per cent in morning trading. Tianqi declined 2.9 per cent to HK$35.55.

Both companies produce lithium carbonate and lithium hydroxide, which are key compounds used to make cathodes and electrolytes in batteries.

The average price of China-produced lithium hydroxide exported to South Korea fell to US$35.50 per kilogram last month, 45 per cent lower than the two-year peak of US$64.40 seen in February last year, according to a January 18 Daiwa Capital Market report, which cited China Customs.

Chinese EV battery giant CATL to share swapping tech with Didi in joint venture

Sales of electric vehicles, the largest source of lithium demand, are expected to grow 20 per cent this year in China, down from 30 per cent last year, Fitch Ratings forecast in a report in November. The nation accounted for around 58 per cent of global battery-powered vehicles last year, according to market research firm Counterpoint.

Global lithium demand is projected to rise 27 per cent this year to 1.23 million tonnes of lithium-carbonate equivalent, after growing 5 per cent last year and 54 per cent in 2022, according to Daiwa’s forecast.

Meanwhile, supply is forecast to grow 30 per cent to 1.26 million tonnes this year, resulting in a 31,000-tonne surplus. This excess is expected to surge to 118,000 tonnes next year before turning to a deficit of 69,000 tonnes in 2026.

“In 2024, we believe the focus will be on the supply side,” said Daiwa’s analysts in the report. “De-capacity is the name of the game.”

South China Sea: Philippines alarmed by 200 Chinese vessels at Mischief Reef, Marcos urges dialogue

https://www.scmp.com/week-asia/politics/article/3250405/south-china-sea-philippines-alarmed-200-chinese-vessels-mischief-reef-marcos-urges-dialogue?utm_source=rss_feed

The Philippine navy has expressed alarm over the growing presence of Chinese warships and maritime militia boats around Mischief Reef in the disputed South China Sea, as President Ferdinand Marcos Jnr vowed to protect the country’s sovereignty and called for dialogue with Beijing.

Navy spokesman Roy Vincent Trinidad said about 200 vessels, including coastguard fleets, were swarming the outcrop some 37km away from Second Thomas Shoal, where Filipino troops are stationed on a rusty old warship.

The Philippines grounded the BRP Sierra Madre in 1999 to reinforce its claim to Second Thomas Shoal, which it calls Ayungin.

The Mischief Reef has been under China’s control since 1995 and hosts a military base.

Marcos’ plan to amend Philippine constitution for China deal sparks backlash

Trinidad said every now and then, the Chinese vessels would be deployed to different parts of the resource-rich waterway.

“So a lot of these are under the [Chinese navy’s] South Sea Fleet. It’s their grey ships,” he said on Tuesday, adding their presence was “consistent throughout the past years”.

Trinidad also said the rising stream of militia vessels could pose a threat to Philippine troops.

“What we are really concerned about is their actions towards our own troops,” he said.

He said Beijing’s naval presence would not deter the Philippine military from supporting its personnel patrolling the hotly-contested sea, where it has in the past accused the Chinese coastguard of confronting Philippine ships including firing water cannons at them.

How Philippines-China ideology clash could spike tensions in disputed waters

Trinidad’s comments came as Marcos asserted that he would “remain firm in defending our sovereignty and jurisdiction against any provocations”, the Philippine Daily Inquirer reported.

“But at the same time, we are also seeking to address these issues with China through peaceful dialogue and consultations as two equal sovereign states,” Marcos told his Vietnamese counterpart Vo Van Thuong as he concluded a two-day state visit to Hanoi.

The Philippines and Vietnam also signed pacts to manage incidents in the South China Sea and start a communication link between their coastguards.

Marcos maintained he considered the United States and China as “key actors in maintaining peace and security, as well as economic growth and development of the region”.

He added Manila would continue to deepen military ties with Washington amid accusations from Beijing that the Southeast Asian nation was letting foreign powers meddle in the South China Sea.

Beijing claims sovereignty over almost the entirety of the South China Sea – where the Philippines and several other nations have competing claims – and has rejected a 2016 international ruling that ruled in favour of Manila and found China’s assertions have no legal basis.

Meanwhile, the Philippine military said April’s annual Balikatan exercises with US troops will be “bigger”, involving more drills in key bases across the country, including islands facing Taiwan.

More than 17,000 defence personnel took part in the joint war games last year.

Woman in China threatens to ditch fiancé for oversharing personal life on WeChat reigniting debate on social media addiction

https://www.scmp.com/news/people-culture/gender-diversity/article/3249449/woman-china-threatens-ditch-fiance-oversharing-personal-life-wechat-reigniting-debate-social-media?utm_source=rss_feed

A woman in China has told her fiance she will leave him if he does not stop his obsession with sharing every little detail of their lives on social media, sparking a public debate about online addiction.

A man, surnamed Chen, who lives in Zhejiang province in eastern China, puts more than 10 posts a day on the Moments of WeChat, the most popular social media app in China, according to a report by Hangzhou Radio.

He thinks a beautiful flower he saw on the street or a bowl of noodles he found delicious is worth being posted on the platform to share with his contacts.

One day in November last year, he posted more than 10 items on WeChat, including an image of a lazy cat to “demonstrate my spiritual status today”, a picture of leaves falling on the ground with the caption “one would easily feel sad and dismal in autumn” and a post to recommend trying a dish called wine preserved crab.

Chen said he enjoys replying to people’s comments about his online posts because it enhances his communication with others.

He often shares photos of his girlfriend, whom he has been dating for three years, but she does not like it and frequently asks him to delete them.

“If you insist on sharing so much about your everyday life on WeChat, I will break up with you,” she told him.

Chen said he does not understand why his girlfriend dislikes posting on social media.

“It helps me make more friends. What’s wrong with that?” He asked.

His fiancée said overactive social media sharing makes it look like he is not focusing on his job and his real life.

“You play with your mobile phone all the time and it means you are slack in your work. Is your real life as wonderful as you describe in your online posts?” She asked.

“It’s better to spend your efforts on your work and real life, rather than trying so hard to think what to post on social media,” she added.

The story of Chen’s enthusiasm for WeChat posting trended on mainland social media and received 150,000 comments on Douyin alone.

“A person who loves sharing on social media is passionate about his life. At least he is not a workaholic,” one online observer said.

“It’s good to post on WeChat because you will remember those happy days when browsing your social media account many years later,” another person wrote.

One online observer held a different view: “It’s too much to release over 10 posts online a day, especially about trivial things. If I had a friend like that on WeChat, I would block his posts.”

4-year-old mainland Chinese girl accidentally hit in face when 10 assailants attack group of diners at Hong Kong restaurant

https://www.scmp.com/news/hong-kong/law-and-crime/article/3250398/4-year-old-mainland-chinese-girl-accidentally-hit-face-when-10-assailants-attack-group-diners-hong?utm_source=rss_feed

A four-year-old mainland Chinese girl has suffered facial injuries after being accidentally hit when about 10 assailants rushed into a Hong Kong restaurant and assaulted three other diners.

Police said the girl was eating a late-night meal with her 30-year-old mother and their family friend at the Kimberly Road restaurant in the bustling Tsim Sha Tsui shopping district when the gang attacked the diners at an adjacent table at around 12.10am on Wednesday.

“Some of the assailants were armed with weapons such as a retractable baton and a pair of scissors, and they attacked three male diners,” a source familiar with the case said.

“During the assault, one of the attackers accidentally injured the girl at a nearby table. She was slightly injured in the left cheek.”

Hong Kong police ‘hunting triad leader’ after second mahjong parlour stormed

The girl had only just arrived in the city from the mainland earlier on Tuesday.

A video posted online showed some of the culprits hurling plastic chairs and utensils, with one seen holding a mobile phone and stamping on victims.

In the clip, one of the attackers wearing a white down jacket was seen hitting a victim with a hard object repeatedly, leaving bloodstains on his sleeves.

The assailants fled in two cars before police arrived. Officers mounted a search but made no arrests.

The restaurant was left in disarray with tables overturned and chairs, food, bowls and plates scattered on the floor.

Emergency services personnel bandaged the girl’s face with gauze at the scene before she was taken to Kwong Wah Hospital in Yau Ma Tei for treatment.

Hong Kong police arrest 8 suspected triad members over weekend nightclub brawl

The three injured diners, aged from 19 to 26, were injured in the heads and arms and they were rushed to Queen Elizabeth Hospital.

Another source said the attack could be a case of targeted revenge.

Officers from the Yau Tsim criminal investigation unit are following up on the case.

Last month, a traveller from Singapore was attacked following a noise complaint at an outdoor dining spot in Yau Ma Tei.

Hong Kong police arrest woman for allegedly attacking children over singing

The 54-year-old man, his wife and their son complained to a waiter at a dai pai dong in Woosung Street Temporary Cooked Food Hawker Bazaar about another 54-year-old man who was talking loudly with his friends.

Police said no altercation took place and the family left shortly after dining.

But while the family was waiting for a taxi in the area, the diner from earlier struck the father in the head with a glass cup and fled on foot. The family gave chase and intercepted the man before police arrived.

Last year, police handled 3,636 reports of wounding and serious assault across the city, an increase of 22 cases compared with 2022.

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China’s Shenzhen reveals bold tech plans for an economic, industrial resurgence in 2024

https://www.scmp.com/economy/china-economy/article/3250323/chinas-shenzhen-reveals-bold-tech-plans-economic-industrial-resurgence-2024?utm_source=rss_feed

The southern city where China’s economic transformation began more than four decades ago, and which has seen its hi-tech industry become the bellwether for growth, is vowing to double down on efforts to shore up the sector as the nation strives to move up the industrial chain and counteract US-led tech restrictions.

Renowned for its cutting-edge industrial chains that have earned it the nickname “China’s Silicon Valley”, Shenzhen plans to achieve industrial output of more than 1.5 trillion yuan (US$209 billion) in its strategic emerging industries in 2024, which would represent a growth pace of more than 7 per cent.

That’s a lofty target, given the high base of comparison from 2023, when the tech hub’s strategic industries – including those specialising in new energy and artificial intelligence – grew by 8 per cent and accounted for 41.9 per cent of the city’s gross domestic product (GDP).

Shenzhen’s overall economy grew by 6 per cent in 2023, in line with its official target and outpacing both the 4.6 per cent growth in Guangzhou, the capital of Guangdong province, and the projected 3.2 per cent growth in Hong Kong, just across the border.

This year, Shenzhen aims to grow its economy by 5.5 per cent, city mayor Qin Weizhong said at a parliamentary meeting on Tuesday. That goal exceeds the anticipated 2024 growths set by Guangzhou and Shanghai of 5 per cent.

“We have to break free of the West’s tech strangulation, break through their ‘small-yard, high-fence’ strategy, and forge strong scientific and technological innovation,” Qin said.

The referenced strategy refers to Washington’s bans or restrictions on the export of hi-tech products to China, as well as related investment and talent flows.

As China’s pre-eminent tech hub, Shenzhen is home to industry giants such as Huawei Technologies, BYD and DJI. Yet, dozens of companies headquartered here are now on Washington’s “Entity List” that comprises companies and individuals from a range of countries, and which represents perceived threats to US national security.

Shenzhen unveils 20-point plan to boost funding for local tech companies

Nonetheless, Shenzhen is shouldering the weight of innovation to achieve Chinese tech breakthroughs in strategic industries while propelling the entire country up the value chain to hedge against economic headwinds, punctuated by four “D’s” – debt, deflation, de-risking and demographics.

“Shenzhen was the first [municipal] victim in the US-China tech war, and this shows that the city has the capability to even affect global markets,” said Peng Peng, executive chairman of the Guangdong Society of Reform.

“Therefore, Shenzhen has a very urgent task of stabilising China’s industrial and supply chain, and needs to provide experience in industrial upgrading nationwide,” Peng added, noting how the city’s new plans for a tech revamp remain closely related to a broader transformation of the world’s second-largest economy.

According to its governmental report, Shenzhen aims to further upgrade its pillar industries – including those dealing in communications and smart devices – while exploring prospects in emerging sectors such as internet-connected vehicles, aerospace, and the low-altitude economy, which could include drones and even flying cars.

The city is also striving for further developments in automobiles, semiconductors and high-end precision instruments, while fostering future industries that include intelligent robots, synthetic biology, brain science, cellular genetics and quantum information.

Shenzhen, which remains in a prominent position to lead integration in the Greater Bay Area (GBA), also vowed to establish an international commercial dispute resolution service centre and an international legal services centre, which appear intended to help resolve disputes involving foreign investors.

The Greater Bay Area refers to the central government’s ambitious scheme to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business hub.

Additionally, Shenzhen intends to “add more than 20 high-end scientific research institutes, enterprise R&D centres and high-level scientific research teams”, but details remained scarce.

Last year, exports of Shenzhen’s “new three” – electric vehicles, solar cells and lithium batteries – rose by 33.9 per cent, which surpassed the national level of 29.9 per cent and was higher than the 19.7 per cent recorded in the Yangtze River Delta, another big manufacturing hub and economic driver for China.

The “new three” reflects a shift from China’s “old three” pillars of exports that comprised clothing, home appliances and furniture.

“The 0.5-percentage-point reduction in Shenzhen’s growth target [for 2024] is due to last year’s high base, but its goals for fixed-asset investment, retail sales and trade are very similar,” Peng said.

“So, given all of the external uncertainties in the environment, Shenzhen could play a much bigger role in the GBA, and even in science and technological innovations and in counterbalancing the West, for the whole country,” Peng added.

Asean can add momentum to Australia’s call for US-China detente, ex-minister says

https://www.scmp.com/week-asia/politics/article/3250352/asean-can-add-momentum-australias-call-us-china-detente-ex-minister-says?utm_source=rss_feed

A congregation of Asean leaders in March could prove timely in providing an impetus to a detente between the United States and China called by a group of notable Australians, a former minister has said.

Bob Carr, Australia’s former foreign minister, and 49 ex-statesmen and politicians as well as academics and advocates on Wednesday called for the establishment of a detente – or an “easing of hostility or strained relations” – between the US and China to avoid the possibility of Australia being dragged into conflict.

It follows the detente struck between the US and the Soviet Union in the 1970s that led to arms control agreements and easing of political tensions between the superpowers, and was critical to averting the escalating danger of nuclear war at that time.

It is now when relations between the US and China are “less alarming” – compared with a year ago – that no country should be complacent, according to both Carr and former foreign minister Gareth Evans, who is also a signatory.

Others who have joined the call for detente include former diplomats John Menadue, Alison and Richard Brionowski, ex-politicians Bob Brown and John Hewson, as well as human rights lawyer Greg Barns and economist Saul Eslake.

In a statement, they said they were concerned tensions between Australia’s closest ally and key trading partner “might lead to direct military conflict, which would risk dragging Australia into war”.

While a detente was not easily achieved, it could reduce those threats and potentially bring about cooperation between the two superpowers in tackling global issues such as the war in Ukraine and cyber regulation.

How the detente takes shape can also be influenced by conversations that Australia has with other regional leaders, who have also expressed their interest in peace security, according to Carr.

The early March meeting of leaders of the Association of Southeast Asian Nations in Melbourne could provide a platform for these discussions, he added. The leaders will attend the Asean-Australia Special Summit to celebrate 50 years since Australia became the bloc’s first dialogue partner.

“Asean leaders want to talk to Australia and all their other partners about peace and security in the region,” Carr said. “The overwhelming sentiment in Southeast Asia is that areas of collaboration between China and the US ought to be enhanced, and both sides ought to minimise the risk of war.

“It is a very valid subject for discussion with not just Asean leaders but with Australia’s Asian partners in the Quadrilateral Security Dialogue, Japan and India, who both appear to want to contain the chances of conflict between America and China.”

Australia, Japan, India and the US are members of the Quadrilateral Security Dialogue.

Australian Prime Minister Anthony Albanese said last year the Asean summit would facilitate both diplomatic bilateral meetings and business forums.

The call for detente now is deliberate, according to Carr and Evans.

Even with less tension, the US-China strategic competition remained “very real” and that provided a setting for potential flashpoints in the Asia-Pacific, they said.

“All this means that the time is ripe for reinforcing and consolidating the recent gains to ensure that they are not just fleeting and transitory,” they said.

The US and China should commit towards living cooperatively, with neither claiming to be “top dog”, they added.

Australia could play a key role in the detente given its experience in activist middle-power diplomacy, as shown by the establishment of the Canberra Commission on the Elimination of Nuclear Weapons in 1995 among others, the group of 50 said.

But they agreed Australia should maintain a strong defence policy, as supporting a detente was not about “pacifism or appeasement”.

“For too long, Australia has avoided taking a practical policy position on the relationship between the US and China. It’s not possible to continue to play war games with the Americans and trade games with China and hope to live on in blissful prosperity,” Carr said.

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Could reports of a North Korean workers’ riot in China ‘pose threats’ to the regime?

https://www.scmp.com/week-asia/economics/article/3250287/could-reports-north-korean-workers-riot-china-pose-threats-regime?utm_source=rss_feed

Pyongyang’s persistence in funding its weapons programme could become a “political time bomb” for the regime, observers have warned, after North Korean workers in China were said to have rioted over the discovery their back wages had been transferred to prop up their country’s arms production.

Reports of the deadly incident earlier this month have sparked concern it could trigger a chain of protests among other disgruntled North Korean workers at Pyongyang-controlled factories who are owed wages and have been stranded in China for years because of pandemic lockdowns.

South Korea’s spy agency on Tuesday reported multiple incidents of “various accidents” involving North Korean workers abroad, citing “poor working conditions”. “We’re closely following this situation,” a spokesman for the National Intelligence Service told This Week in Asia without elaborating.

‘At all levels’: China, North Korea vow deeper ties amid no let-up in missile tests

Cho Han-bum, a senior analyst at South Korea’s Institute of National Unification, said the riots erupted around January 11 at a garment factory in China’s Jilin province, where some 2,500 North Koreans are hired by the Jonsung trading firm operated by the North’s defence ministry.

“A North Korean manager was killed, and three other executives were seriously injured,” Cho told This Week in Asia on Tuesday.

The workers were angered to find out earlier this month that their back payments had been transferred to Pyongyang as special contributions for the regime’s weapons programme, he said, citing unidentified sources in Jilin.

Their owed wages totalled an estimated US$10 million, according to Cho. “When they found out their wages were gone, they just exploded,” he said of the apparent riots.

North Koreans hired for jobs in China usually work for three years, earning some US$200 monthly. When they return home, the sums would be enough for them to buy a modest house in the suburbs of Pyongyang, Cho said.

But many of the workers have been held back in China for up to seven years because of the North’s pandemic lockdowns. Only selected workers were allowed to return, leaving most of the workers in limbo in China.

According to Cho, Pyongyang wants them to stay in China for as long as possible, as Beijing is wary that United Nations sanctions would prevent a fresh intake of workers from replacing those who have left.

US at UN condemns North Korean ICBM launch, as China and Russia defend ally

Alarmed by the rare upheaval, North Korean authorities are said to have quickly dispatched a local consul general to restore order, borrowing several months’ worth of back wages from another trading company to pay off the rioters.

But Cho warned the regime faced the threat of similar riots taking place elsewhere as other North Korean-run factories also owed salaries.

“Workers in China have been toiling for years, and their discontent is reaching a boiling point as they are selectively allowed to return home,” he said.

Separately, former North Korean diplomat Ko Young-hwan also broke the news to Japan’s Sankei daily last week, citing multiple North Korean sources in three northeastern Chinese provinces.

He said North Korean workers in one factory walked off the job on January 11, and the strike soon spread to other Pyongyang-run plants in Jilin province. After occupying the premises, the workers took North Korean executives hostage and vandalised factory equipment, according to Ko.

“This will remain a political time bomb and may well trigger actions by other workers in China and other foreign countries,” Cho said.

Workers are usually hired collectively in China through government-controlled North Korean trading companies.

They are unaware of their true salary amounts, as they receive their pay only after deductions of “loyal funds” to Pyongyang, and various fees and bribes.

Why North Korea rejects US talks: regime ‘never negotiates if it feels strong’

In contrast, North Korean workers in Russia are usually individually hired, mostly in housing projects, making them less prone to exploitation by the Pyongyang authorities, Cho said.

He estimated there were 100,000 North Koreans working overseas as of 2019, with 80,000 in China and 10,000 in Russia. Many work in labour-intensive roles, including at construction sites, factories and logging camps, Cho said.

Most North Korean workers sent overseas are from privileged families in Pyongyang who have expressed loyalty to the ruling Workers’ Party.

“But if the party brings them all back to North Korea at once, it would pose threats to the regime” because of the fear they might also protest back in North Korea”, Cho said.

“On the other hand, it cannot hold them back there for good for fear that they might act out together. It’s a tense time now,” he said.

A 2017 UN Security Council resolution required countries to repatriate North Koreans earning income abroad by the end of 2019.

But the North’s lockdown against the global pandemic has prevented the repatriation of its own citizens and left them in limbo.

Kim In-ae, a deputy spokeswoman for South Korea’s Ministry of Unification, said the agency had no official comment on the reported riot.

“In accordance with UN sanctions, North Korean workers should no longer be sent abroad, and we hope that the poor human rights situation of workers will improve,” she said.

China’s young chow down on ‘dangerous’ deep-fried starch toothpicks inspired by South Korea food fad, sparking mainland health warning

https://www.scmp.com/news/people-culture/trending-china/article/3250176/chinas-young-chow-down-dangerous-deep-fried-starch-toothpicks-inspired-south-korea-food-fad-sparking?utm_source=rss_feed

Health officials in China have issued a health warning over a new craze for eating deep-fried starch toothpicks which has spread among mainland youngsters after going viral in South Korea.

CCTV reported parents in China have become concerned about the potential health effects the new fad could have on their children.

In a video clip by CCTV, the toothpicks made from starch are shown being turned green by using a form of colouring and then cooked in hot oil with spices.

The craze took hold in South Korea after it was introduced on a live-streaming platform that shows content creators eating excessive amounts of strange or unusual foods.

It quickly spread to TikTok and Instagram also picked it up.

Short videos showed people putting the toothpicks in sizzling oil until curly, then adding seasonings like cheese or spicy powder before eating. The clips have been shared and liked thousands of times.

CCTV said people believed that the food was tasty and healthy.

However, the snack is made from sweet corn and potato mixed with sorbitol, a sugar substitute which can have negative health effects like bloating and flatulence.

On January 24, the Ministry of Food and Drug Safety issued a warning on social media platform X, formerly known as Twitter, urging people to refrain from consuming the “deep-fried toothpicks”.

“Starch toothpicks are not edible products. Their safety as food has not been verified,” the ministry said, adding: “Please do not eat them.”

The story has sparked widespread public response in China. At the time of writing it had attracted 3.33 million views on Weibo.

While some online observers were worried on a food safety basis, many were simply surprised by the fad.

“The food colouring in the toothpicks is indeed unhealthy,” said one.

While another said: “They look like worms, disgusting” and a third asked: “Is this really delicious?”

Stories about bizarre food fads regularly make headlines in China.

In September 2023, another South Korean-inspired dietary plan involving taking supplements like coenzyme Q10, fish oil, lutein, and vitamin D3, became all the rage with young people in China as they tried to balance unhealthy lifestyle choices.

Last July, mainland youngsters began “raising” the seeds of mangoes as “pets” by grooming their sprouting hair and even keeping diaries for them, shocking mainland social media.

China’s manufacturing activity rebounds slightly in January, but remains in contraction

https://www.scmp.com/economy/economic-indicators/article/3250366/chinas-manufacturing-activity-rebounds-slightly-january-remains-contraction?utm_source=rss_feed

China’s manufacturing activity rebounded slightly in January, but remained in contraction despite Beijing’s efforts to regain economic growth momentum at the start of the year.

The official manufacturing purchasing managers’ index (PMI) stood at 49.2 in January, the National Bureau of Statistics said on Wednesday, compared with a reading of 49 in December.

It was in line with the medium forecast of 49.2 among economists surveyed by Reuters.

China’s manufacturing PMI readings fell for five consecutive months from April last year, and despite a brief expansion in September, fell back into contraction in October.

A reading higher than 50 suggests manufacturing is expanding, while a figure below 50 indicates contraction.

Beijing still needs to buttress its economic recovery even after last year’s higher-than-expected growth of 5.2 per cent.

Sentiment among manufacturers has dampened amid lukewarm demand, while the property sector – an economic pillar that spans numerous manufacturing industries – remains in doldrums.

A protracted local government debt crisis and external complexities, including waning overseas orders, have also added to the headwinds.

More measures have been urged to boost the economy, with Beijing again expected to set a growth target of around 5 per cent for this year.

Meanwhile, the non-manufacturing PMI – an indicator of services activity – continued to improve in January, climbing to 50.7 from 50.4 in December.

More to follow …

Evergrande’s liquidation is a new low in China’s property crisis | Finance & economics

https://www.economist.com/finance-and-economics/2024/01/29/evergrandes-liquidation-is-a-new-low-in-chinas-property-crisis

“Enough is enough,” declared a Hong Kong judge on January 29th of Evergrande, a failing Chinese property behemoth, and its two-year struggle to avoid repaying its creditors. In a landmark ruling, the court ordered a liquidation of the company, which, with more than $300bn in liabilities, is the world’s most indebted real-estate developer. A provisional liquidator will be appointed, assuming management of the company. Now foreign creditors must attempt to recoup their losses from a firm that holds most of its assets in mainland China. The ruling could pit Hong Kong’s courts against a Chinese government determined to restore public confidence to a struggling market.

No firm has been more central to China’s property crisis, which kicked off when Evergrande first showed signs of weakening in mid-2021. Government rules meant to wean developers from debt eventually pushed the company to default later that year. Since then a majority of China’s listed property developers have either failed to pay their investors back or have been forced into restructuring. Their access to credit has been virtually cut off, causing builders to stop working on projects across the country. Prospective homebuyers have delayed purchases, leading to a 6.5% decline in the value of sales, year on year. This has unnerved a population that stores most of its wealth in property.

Until relatively recently policymakers had hoped that a successful restructuring of Evergrande could pave the way for a slow but steady revitalisation of the market. Instead, Evergrande missed important deadlines for producing a restructuring plan and, when it did offer one, underwhelmed investors. Its proposal, which was panned by bondholders, involved giving creditors a stake in some of Evergrande’s other businesses, such as its electric-vehicle line. Far from restoring confidence, the battle became increasingly ugly. At one point a group of bondholders demanded that Hui Ka Yan, Evergrande’s chairman, put up $2bn of his own money. Mr Hui was later detained by Chinese authorities. His whereabouts are unknown.

The housing crisis has drained global investors of confidence in Chinese policymaking. It is now doing similar damage to Hong Kong’s reputation. For decades, foreign investors have gained access to China through Hong Kong. One of Hong Kong’s distinct features has been a legal system, separate from China’s, that is based on common law. But court rulings in Hong Kong have no guarantee of being upheld in mainland China, where almost all of Evergrande’s assets are based.

The liquidator appointed by a Hong Kong court will be forced to deal with local authorities that may not recognise an order drawn up outside China’s legal system. Although a pilot project to recognise cross-border rulings was set up in 2021, qualification requirements are tough and the scheme is only recognised in a few cities. Hong Kong rulings can easily be shot down by mainland courts if they have the potential to disturb public order.

Indeed, as Tommy Wu of Commerzbank, a German lender, has written, a full liquidation of Evergrande’s Chinese assets would probably send a shock through the Chinese economy. Property developers have sold many properties to ordinary Chinese folk that they have not yet provided. Investors’ claims on Evergrande’s projects, or any cash holdings it still has, could get in the way of their delivery. This would work against Beijing’s best efforts to restore confidence in the market. Any such activity would be viewed by policymakers as unacceptable, almost guaranteeing that the liquidation process will be long and drawn out.

The latest Hong Kong ruling leaves room for restructuring, with the judge noting that Evergrande can still offer this to creditors. The company says that it aims to produce a new plan, possibly by March, and since a liquidator will be taking over negotiations there may now be a better chance of a deal. But it will not be one that includes many Chinese assets. And for a firm that mainly owns Chinese property, that is a problem. Evergrande’s liquidation marks a new low in China’s property crisis—it is far from the end of it. ■

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US Congress considers new legislation to further restrict investment in Chinese tech sectors

https://www.scmp.com/news/china/article/3250360/us-congress-considers-new-legislation-further-restrict-investment-chinese-tech-sectors?utm_source=rss_feed

Amid the growing tech war between the world’s two largest economies, the US Congress considered new ways on Tuesday to restrict US investment in China that involves sensitive technology.

The hearing by the House Financial Services subcommittee on national security, illicit finance and international financial institutions followed US President Joe Biden’s executive order in August prohibiting US private equity and venture capital investments from flowing into four Chinese tech sectors: artificial intelligence, quantum computing, semiconductors and microelectronics.

Biden’s order “took a step in the right direction but could be improved through legislative action, which is more permanent”, Representative Blaine Luetkemeyer, a Missouri Republican who chairs the subcommittee, said.

Representative Joyce Beatty, an Ohio Democrat, noted that “while there may be varying approaches, there is a strong bipartisan, bicameral support for outbound investment screening”.

The hearing – “Better Investment Barriers: Strengthening CCP Sanctions and Exploring Alternatives to Bureaucratic Regimes” – explored additional ideas for legislation to block US money from bolstering China’s technological and military sectors.

Three major bills have been introduced in Congress, including one by Representative Andy Barr, a Kentucky Republican, that would prohibit nearly all economic interactions with Chinese firms crucial to China’s defence and surveillance technology sectors.

Another House bill, introduced by Representatives Michael McCaul, Republican of Texas, and Gregory Meeks, a New York Democrat, seeks to build upon Biden’s order by expanding the restricted tech sectors to include hypersonics and high-performance computing.

And in the Senate, the Outbound Investment Transparency Act was introduced to require US companies to notify the Treasury Department before making investments in certain sectors.

US wants Big Tech AI providers to disclose foreign customers

Witnesses at the Tuesday hearing urged lawmakers to leverage existing authorities, including the US government’s current export control lists, to avoid extra work creating new mechanisms.

“Establishing a unified definition of ‘critical technology’ and grounding that definition in well-defined export control lists such as the Commerce Control List and the United States Munitions List created clear, specific, updatable mechanisms for regulators to target specific threats,” said Richard Ashooh, vice-president of the Lam Research Corporation, a supplier to the semiconductor industry.

Thomas Feddo, founder of Rubicon Advisors, a national security consulting firm, said “creating a new outbound investment authority – whether a screening mechanism or a sector-like regime – is a mistake”.

“Since the start of the policy debate regarding the regulation of outbound investment, it has been my strongly held view that existing authorities provide the best means to address the asserted gap,” said Feddo. He proposed combining both House bills to construct a sanctions-based approach that applies existing export-control lists.

The proposals follow other similar measures fortifying the legislative branch’s ability to assert some control over Biden’s China policies.

Otherwise criticised for a failure to produce legislation, for example, the current Congress still moved quickly last year to force the Biden administration to submit to its authority concerning economic ties with Taiwan.

The United States-Taiwan Initiative on 21st-Century Trade First Agreement Implementation Act was announced in June by the Senate Finance Committee and the House Ways and Means Committee; it passed the House the same month and the Senate in July.

Biden signed it weeks later, effectively giving Congress authority over agreements that the White House negotiates with Taipei.

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Blizzards and extreme weather could disrupt China’s Lunar New Year travel

https://www.scmp.com/news/china/article/3250317/blizzards-and-extreme-weather-could-disrupt-chinas-lunar-new-year-travel?utm_source=rss_feed

Snowstorms and other extreme weather could disrupt transport for the hundreds of millions travelling across China during the Lunar New Year travel period, known as .

The China Meteorological Administration (CMA) said on Tuesday that “complex” winter weather across the country, including rain and snow, could have “a significant impact” on transport during this year’s holiday travel period, which began on January 26 and will end on March 5.

Northern China, including the northeastern provinces of Jilin and Liaoning and the far western Xinjiang Uygur autonomous region, were hit by a blizzard on Tuesday, according to the CMA.

Meanwhile, parts of Zhejiang province in the east and Guangdong province in the south were blanketed by heavy fog.

More Chinese expected to travel abroad for Lunar New Year

According to the CMA, the worst is yet to come as northern China will continue to experience snowstorms, while areas further south along the Yangtze River will be hit by heavy rain starting on Wednesday.

Freezing rain is forecast to arrive in central and eastern China on Thursday and last for four days, the CMA said.

The freezing rain is expected to hit parts of the provinces of Henan, Hebei, Anhui, Jiangsu, Shandong, Hunan and Guizhou, potentially affecting transport, telecommunications and agriculture production.

The CMA said this year’s Lunar New Year weather could be the most “complex” since 2008. A deadly winter storm that year killed 107 people, left more than 5.8 million passengers stranded and disrupted basic necessities such as water and power supply for more than 100 million people, according to state broadcaster CCTV.

Beijing has repeatedly called for safeguarding safety and social stability ahead of the Lunar New Year, also known as Spring Festival, which falls on February 10.

China has already suffered several weather-related disasters this winter.

A total of 44 people were killed in a landslide in the southwestern province of Yunnan on January 22, which was caused in part by rain and snow in the region, according to state news agency Xinhua.

China is hoping the eight-day public holiday will inject some momentum into its sluggish post-pandemic economy.

The country’s transport ministry said earlier this month that it expected a record 9 billion trips to be made during the 40-day chun yun travel period, which is considered the world’s biggest annual human migration.

Major travel agencies have reported bookings exceeding pre-pandemic levels.

Travel company Fliggy said in a January 16 report that hotel bookings via its platform were up 160 per cent compared with the same period in 2019, with group tours up by 34 per cent. Fliggy is owned by the Alibaba Group, which also owns the South China Morning Post.

Average prices for domestic flights have soared to the highest levels since 2019, Tongcheng Travel said earlier this month.