• China builds up electric power in Gobi and western deserts equal to half US capacity
• 2 fishermen return to mainland China after Taiwanese coastguard pursuit turns deadly
• China’s Xi Jinping hypes up obstacle-crushing economic reforms as expectations for third plenum reach fever pitch
• Chinese start-up Moonshot AI raises US$1 billion in funding round led by Alibaba and VC HongShan amid strong interest for OpenAI-type firms
• Malaysia’s Federal Court upholds constitutional right of vernacular schools to teach in Chinese, Tamil
• China launches nationwide survey on data resources, from AI firms to police
• US and China looking for ‘sustainable’ ways to live with each other
• Singapore Airshow: China’s home-grown C919 passenger jet lands 40 orders on international debut
• Chinese driverless AI firm Westwell to invest HK$300 million to attract research talent for new Hong Kong headquarters
• ‘Too thrilled to sleep’: China small business owner, 28, scoops US$96 million lottery jackpot, largest win in country’s history
• African donkey trade ban to slash China’s supply of traditional medicine ejiao
• Hong Kong’s Jimmy Lai told assistant to promote Apple Daily to mobilise ‘international front’ against mainland China, court hears
• Chinese tourists flock to Singapore, Malaysia, Thailand during Lunar New Year, as overseas travel bounces back from Covid-19
• China’s middle class crying out for reform to restore confidence
• South China Sea: PLA sends forces to monitor US-Philippines air patrols over disputed waters
• China girl, 10, shares daily life, family-related content with 7.5 million online followers, becomes one of country’s top young influencers
• Birth rates among Chinese falling everywhere, not just China, Malaysian Chinese official says
• Hong Kong patient advocacy groups urge government to clarify elderly healthcare voucher dispute procedures in mainland China
• China firms in EU firing line as Hungary yields to anti-Russia sanctions package
• Taiwan protests after China boards a tourist boat near Kinmen Island
• China coast guard boards Taiwan tourist boat in escalation of tensions
• EU sanctions on Chinese firms ‘will have little impact on Russia’s war in Ukraine’
• How US sanctions could push China and Russia closer together
• Mainland Chinese customers spent US$7.6 billion on Hong Kong insurance policies last year, but sales to fall as ‘pent-up’ demand fades: watchdog
• Millions in China inspired by drastic transformation of actress Jia Ling swoon over uplifting theme song of her box office hit ‘You Only Live Once’
• China’s economic reforms hinge on creative and courageous changes, state media says in warning of a ‘wasted opportunity’
• Chinese entrepreneurs express awe and fear of OpenAI’s Sora text-to-video generator, as US sanctions weigh on AI race
• China cuts key mortgage rate for first time since June to prop up economy
• China’s economic growth at risk from societal stagnation, scholar warns of the ‘most significant crisis of our time’

China builds up electric power in Gobi and western deserts equal to half US capacity

https://www.scmp.com/news/china/science/article/3252564/china-builds-electric-power-gobi-and-western-deserts-equal-half-us-capacity?utm_source=rss_feed

In the vast expanse of the Gobi and other deserts in northwestern China, a “world-leading” electricity production and transmission network is taking shape, according to Chinese scientists.

The engineering feat pumps cheap, clean power into the heart of Chinese manufacturing, raising the country’s living standards and bolstering China’s competitiveness in hi-tech races such as AI.

The scientists and engineers at the helm of this energy revolution estimate that the existing installed capacity for power generation in northwestern China is almost 500 gigawatts. When combined with the significant Gobi Desert area in nearby Inner Mongolia, the figure is 600GW.

In comparison, all United States power plants combined produced about 1,100GW at the end of 2022, according to the US Energy Information Administration.

Furthermore, more than half these energy facilities in northwestern China are fuelled by forces of nature: wind and solar energy. Despite the unpredictability of renewable sources, these green power plants achieve an average utilisation efficiency over 95 per cent.

Until now, no other large regional power grid has seamlessly integrated such a substantial portion of renewable energy while maintaining such high utilisation rates throughout the year, according to the scientists.

Northwest China comprises five inland provinces including Xinjiang. Spanning more than 3 million sq km (1.16 million square miles), it is an area larger than India and long regarded as one of the most underdeveloped and impoverished regions in China.

Its distance from the ocean and inhospitable terrain, characterised by harsh deserts such as the Gobi and the Taklimakan, have resulted in sparse populations.

However, the region is rich in natural resources, including oil, coal and an abundance of green energy sources. It is the source of 60 per cent of China’s solar energy and one-third of its wind power.

As far back as the 1980s Qian Xuesen, a rocket scientist who helped establish Nasa’s Jet Propulsion Laboratory and later nurtured China’s space programme, envisioned harnessing the vast wind and solar resources of the Gobi Desert to power the nation. It seemed little more than a pipe dream given the technological limitations of the time.

But now, “the northwest power grid has already brought an early stage of this new type of power system to life,” wrote Professor Ma Xiaowei and his team from the Northwest Branch of the State Grid Corporation of China and Xian Jiaotong University in a peer-reviewed paper published last month in the Chinese academic journal Power System and Clean Energy.

The installed capacity of renewable energy in the region has reached 230GW, with half that electricity transmitted over 10 ultra high-voltage direct current transmission lines to densely populated eastern coastal provinces.

These power lines span thousands of kilometres, crossing nearly the width of China, making the northwest power grid “the regional power grid with the strongest outbound capacity and the largest scale in the world,” said Ma and his colleagues in their paper.

For decades, the European Union has leveraged its economic capacity, dense population and environmental advocacy groups to spearhead a transition to green energy and combat climate change. Global giants such as Siemens in Germany and Schneider Electric in France have propelled technological advancements and expertise in this sector.

Asean renewable energy sector gets boost from China’s solar projects

But after careful comparison Ma’s team found that “China’s northwest power grid has surpassed the EU in core renewable energy utilisation indicators, reaching world-leading levels”.

If all deserts on Earth were blanketed with solar panels and wind turbines, the electricity generated would dwarf existing human needs. But engineering hurdles have long rendered this vision impractical: transmitting vast amounts of electricity over vast distances is a daunting goal and traditional grids cannot handle the wild fluctuations of renewable energy.

Chinese engineers have grappled with these challenges and learned some painful lessons. In 2014, according to Ma’s paper, a wind turbine triggered a power surge that travelled 400km (248 miles), wreaking havoc on another wind farm.

China’s explosive growth in renewable energy in recent years has compounded these issues. Changes in sunlight and weather can cause power supply capacity fluctuations of up to 50 gigawatts in a single day in the northwest grid – a gap equivalent to the combined power of all nuclear reactors operating in France.

To address this challenge, China has built the world’s most advanced high-voltage long-distance direct current transmission lines, effectively reducing power loss during long-distance transmission. Scientists and engineers in China have also incorporated artificial intelligence to enable them to predict generation capacity up to 10 days in advance by analysing large amounts of sensor data.

“In stable weather conditions the prediction accuracy is very high,” Ma’s team wrote in the paper.

Coal-fired power plants have served as the main stabilising force in China’s power grid, but they are no longer sufficient in the northwest because of the rapid growth in solar and wind power. To fill the gap, the Chinese government built hydropower stations upstream of the Yellow River, serving as the backbone for regulation and energy storage.

These reservoirs not only irrigate arid regions but also cut nearly 20 billion yuan (US$2.8 billion) in grid regulation costs, delivering huge economic and ecological benefits, according to Ma’s team.

Another core technology lies in achieving complementarity between renewables. This requires a robust and reliable information sensing and control system. Nearly half the renewable energy generation facilities have joined this responsive mutual aid system, Ma’s team said.

An AI entrepreneur in Beijing said energy supply would be pivotal in the looming competition for national strength between China and the US. The Biden administration, in a bid to stifle China’s AI progress, has banned the sale of cutting-edge AI chips to China.

“The advantage of these chips lies mainly in their slightly lower power consumption. But as China’s electricity supply grows, Chinese firms can use less advanced chips to achieve similar AI training results,” said the entrepreneur, who asked to remain anonymous.

“The increased electricity costs are negligible compared to the overall investment in the AI race.”

Before the pandemic, China’s power generation capacity was twice that of the US; now, it is nearly three times as much. US electricity prices rose 20 per cent from 2021 to 2023 because of inflation while China’s have remained steady. In some renewable-rich regions, Chinese firms have greater discounts than before.

China breaks ground on major project to boost renewable energy storage

The Chinese government is forging ahead with plans to build data centres and AI servers in energy-abundant western regions, aiming to bolster the global competitiveness of tech giants such as Huawei.

American households consume nearly 40 per cent of the total electricity generated in the country, with businesses consuming about 35 per cent and factories using roughly 25 per cent. But in China, the demand for power in commercial and industrial sectors looms large, accounting for over 80 per cent of the total.

2 fishermen return to mainland China after Taiwanese coastguard pursuit turns deadly

https://www.scmp.com/news/china/politics/article/3252594/2-fishermen-return-mainland-china-after-taiwanese-coastguard-pursuit-turns-deadly?utm_source=rss_feed

Two surviving crew members of a capsized fishing boat returned home to mainland China on Tuesday, nearly a week after their vessel capsized during a chase by a Taiwanese coastguard vessel.

The two other crew members on board the fishing boat at the time drowned during the pursuit in waters off Quemoy – a Taiwan-controlled group of islands also known as Kinmen – on Wednesday.

Before boarding a boat for Quanzhou, Fujian province, the men said they were “happy to be able to return home”.

A 10-member mainland delegation headed by Li Zhaohui, deputy director of the Taiwan Affairs Office in Quanzhou, arrived in Quemoy on Tuesday to retrieve the men and was greeted by a group of Taiwanese officials.

Li said the delegation intended to find out what exactly had caused the fatal incident, which has fuelled cross-strait tensions.

The group – which included six bereaved family members, a lawyer, and two Red Cross officials – headed directly to a funeral parlour where the deceased were placed, according to Taiwan’s coastguard administration.

In video clips posted by Taiwanese media outlets on Tuesday, Li slammed the Taiwanese coastguard for what he said was “rough dispersal of the fishing boat” leading to the deaths of two of the crew.

“Such a malicious incident has sparked indignations from various sectors in China and seriously hurt the feelings of compatriots across the strait,” he said, referring to the Taiwan Strait.

“We are here to find out the truth, assist the families with the aftermath affairs and bring home the two survivors.”

He demanded that the island’s authorities address the concerns of the families and provide help to “avoid hurting the families further”.

The incident began when the island’s coastguard started pursuing the mainland boat which it said had been trespassing in waters off Quemoy – a Taiwanese defence outpost just a few nautical miles from the mainland city of Xiamen.

The coastguard said the fishing boat’s crew refused to allow an inspection and the vessel – a speedboat used for fishing – flipped over as it sped away.

The four men were rushed to hospital after they were pulled from the water. Two of the men died while the other two were in stable condition and were later sent to the Quemoy prosecutor’s office for investigation.

Tsai Mao-cheng, director of the coastguard’s Kinmen, Matsu and Penghu branch, said Taiwanese authorities would offer whatever help the families needed.

“What the relatives most want now is to see the deceased for post-mortem arrangements,” Tsai said when asked if the Taiwanese side would release evidence of how the pursuit turned fatal.

Tsai declined to say if they would discuss the compensation issue.

The relatives later held ritual ceremonies for the deceased before cremating their bodies. They were scheduled to stay overnight and take their remains home on Wednesday morning, according to the coastguard.

Taiwan’s Mainland Affairs Council, which charts cross-strait policy, said authorities on Tuesday “arranged for the two survivors to be deported in line with the law”, and asked the mainland side to “provide help to facilitate their return home”.

Beijing regards self-ruled Taiwan as part of its territory, to be reunited by force if necessary. It has suspended official exchanges with the island since Tsai Ing-wen, of the independence-leaning Democratic Progressive Party, was elected president in 2016 and refused to accept the one-China principle.

Chinese coastguard boards Taiwan cruise ship after deadly boat incident

Most countries – including the United States, Taipei’s informal ally and top arms supplier – do not recognise Taiwan as an independent state but are opposed to any attempt to forcibly change the status quo.

On Sunday, Beijing announced that its coastguard would begin regular patrols and inspections around Quemoy, adding that there were no restricted waters around the archipelagos.

On Monday, six mainland coastguard officers boarded a Taiwanese tourist boat carrying 11 crew members and 23 passengers to check the vessel’s route plan, certificate and crew licences, prompting the island’s coastguard to send its own vessels to patrol around the waters and escort the tourist boat back to Quemoy.

Taiwanese Defence Minister Chiu Kuo-cheng said on Tuesday that to avoid a further rise in tensions, the military would not “actively intervene” in the incident.

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China’s Xi Jinping hypes up obstacle-crushing economic reforms as expectations for third plenum reach fever pitch

https://www.scmp.com/economy/china-economy/article/3252585/chinas-xi-jinping-hypes-obstacle-crushing-economic-reforms-expectations-third-plenum-reach-fever?utm_source=rss_feed

Addressing China’s top group on systemic reform, President Xi Jinping has called for the country to stay laser-focused on breaking down institutional impediments that stand in the way of nationwide modernisation efforts.

And some China-watchers say Monday’s meeting could also signal that preparatory work is well under way for the 20th Central Committee’s reform-themed third plenum – a highly anticipated party gathering that was delayed from last year and has not been formally announced.

Following discussions by the Central Commission for Comprehensively Deepening Reform that Xi steers, state media said a “milestone year” was in the making.

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

“This year’s priority is to plan further reforms in promoting Chinese-style modernisation. We must persist in using reform as part of an overarching strategy to solve risks and challenges and to boost confidence, with a key focus on institutional obstacles,” party mouthpiece Xinhua said in a readout after the meeting.

Notwithstanding the economy’s 5.2 per cent growth in 2023, confidence among foreign and private businesses in China continues to falter. Its business environment and markets have been strained by policy unpredictability and stalled reforms, hindering the appeal of the world’s second-largest economy despite Beijing’s repeated vows that a laundry list of problems are being addressed.

“How to restore confidence is one key aspect to watch, as Beijing cooks up new reform initiatives and implementation plans,” said Alex Ma, an associate professor of public administration at Peking University.

Economic confidence remains stubbornly feeble even after Beijing rolled out policy packages tailor-made for private and foreign firms in the second half of last year.

Another issue to watch, according to Ma, is how leadership intends to juggle its economic transition with growth, while ensuring that such growth can be maintained at a suitable clip.

As the post-Covid recovery needs to be further entrenched following a bumpy 2023, market expectations are building up for Beijing to recommit itself to reforms and use occasions like the third plenum to thrash out action plans for concrete implementations to rekindle the hope of businesses.

The third plenary session of the party’s Central Committee is traditionally held in the year following the party’s twice-a-decade national congress – which took place in October 2022 – and is usually centred on setting core reform and economic agendas.

China’s job pressure seen ‘worsening’ in 2024 as solutions elude workforce

Zhu Jiangnan, a political scientist at the University of Hong Kong, said the third plenum may be approaching, now that Xi has set the tone and teased more reforms for this year.

“Monday’s meeting could be in preparation of the plenum,” she said, adding that the reform message that emerges from the plenum could put the onus on economic policy with “Chinese characteristics and central leadership”, accompanied by vows of substantive “efforts to make real changes”.

Ma at Peking University said Monday’s meeting reaffirmed that reform remains a buzzword to watch for this year, which he called “reassuring”.

“The more [the plenum] is delayed, the more speculation, and the higher the expectations,” Ma said, pointing out that “the word ‘reform’ hasn’t disappeared from the official discourse, despite the slow progress”.

The “institutional obstacles” in need of overcoming are typically among the main gripes of businesses, analysts added.

Zhu Tian, an economics professor at the China Europe International Business School in Shanghai, said China must carry out real reforms to keep the government’s nose out of the day-to-day running of private and foreign firms, and must rein in policymaking vagaries and capricious enforcement.

“I think government intervention and policy unpredictability are the ‘systemic and institutional impediments’. And we don’t need to add more new government agencies to an already bloated system. We sorely need actions to revive sentiment,” he said.

State media has also amplified calls for urgent reforms. In a Monday op-ed, the Economic Daily, a State Council publication, called for more pertinent and timely reforms.

“Timely efforts must be made to break through systemic, institutional hurdles in fundamental reform realms, like a high-level unified market and opening up, as these aspects matter to the future of the party and the country,” the commentary said.

Chinese start-up Moonshot AI raises US$1 billion in funding round led by Alibaba and VC HongShan amid strong interest for OpenAI-type firms

https://www.scmp.com/tech/big-tech/article/3252574/chinese-start-moonshot-ai-raises-us1-billion-funding-round-led-alibaba-and-vc-hongshan-amid-strong?utm_source=rss_feed

Chinese artificial intelligence start-up Moonshot AI has raised more than US$1 billion in a new funding round led by e-commerce giant Alibaba Group Holding and venture capital firm HongShan, as interest among investors remains high for innovative mainland enterprises similar to ChatGPT creator OpenAI.

Beijing-based Moonshot AI, known in Chinese as Yuezhi Anmian, was valued at about US$2.5 billion in its latest funding round, according to separate reports published on Monday by local media 36Kr and LatePost. Alibaba owns the South China Morning Post.

HongShan, the Chinese spin-off of US venture capital firm Sequoia Capital, and angel investor ZhenFund were involved in Moonshot AI’s seed funding last June, according to market intelligence platform PitchBook.

The start-up in October launched smart chatbot Kimi Chat, built on its self-developed Moonshot large language model (LLM), which can process as many as 200,000 Chinese characters in a context window – referring to the swathe of text that an AI model can process during conversation with users.

Alibaba, HongShan and Moonshot AI did not immediately respond to requests for comment on Tuesday.

Moonshot AI’s new funding round marked the largest single financing raised by a Chinese AI start-up since ChatGPT was released in November 2022.

The latest investment recorded by Moonshot AI showed that interest in generative AI start-ups remains strong in mainland China, which led global investments into such firms in the first half of 2023.

China had the most number of generative AI start-ups that received funding at the time, according to a report by AI-focused research firm Zhidongxi. The mainland accounted for 22 of the 51 such start-ups around the world that raised about US$13.8 billion in investments during the period.

China has the most generative AI start-ups to receive funding in first half: report

Moonshot AI was founded in April 2023 by Yang Zhilin, a computer science graduate from Beijing’s prestigious Tsinghua University. He later received his doctoral degree in the US from Carnegie Mellon University in Pittsburgh, Pennsylvania.

In an industry event last November, Yang said that the ability to process long texts is critical to the future development of existing AI models.

An LLM’s capability partly hinges on its number of parameters, a measure of the sophistication of an AI model. While ChatGPT was trained on 175 billion parameters, the Moonshot LLM has more than 100 billion parameters, according to local media reports.

Baichuan, the AI venture established by Sogou founder Wang Xiaochuan, already launched last year an iteration of its proprietary LLM – the technology used to train generative AI services like ChatGPT – that can handle around 350,000 Chinese characters in a context window.

Chinese AI start-up claims to beat US rivals in processing long text

Also based in Beijing, Baichuan claimed at the time that its Baichuan2-192k LLM had surpassed Claude 2, the AI model of Amazon.com-backed Anthropic, as the world’s most advanced LLM in terms of the number of words that users could include in their chat queries. Claude 2’s context window was said to be capable of scrutinising around 75,000 English words, equivalent to hundreds of pages of documents or a thick book.

Mainland China had 254 LLMs as of November, according to a white paper published by the Beijing Municipal Science and Technology Commission.

The launch of various domestic LLMs, however, has been criticised by Baidu founder, chairman and chief executive Robin Li Yanhong as a “huge of waste of resources”. At an event in Shenzhen last November, Li said there were too many LLMs in China, “but too few AI-native applications based on those models”.

Meanwhile, Moonshot AI might somehow have to contend with another start-up named Moonshot AI that is based in New York City. This US firm, according to its website, provides an AI platform that helps e-commerce stores fully automate their online operations to increase conversions, sales and revenue.

Malaysia’s Federal Court upholds constitutional right of vernacular schools to teach in Chinese, Tamil

https://www.scmp.com/news/asia/southeast-asia/article/3252600/malaysias-federal-court-upholds-constitutional-right-vernacular-schools-teach-chinese-tamil?utm_source=rss_feed

Malaysia’s Federal Court has ruled that vernacular schools are constitutional in a majority two-one decision, dismissing the appeal of two non-governmental organisations (NGOs) which sought to declare that the use of Chinese and Tamil languages as the medium of instruction in vernacular schools goes against the Federal Constitution.

A three-member Federal Court bench chaired by Judges Mary Lim Thiam Suan denied a leave to appeal by the Islamic Education Development Council (Mappim) and the Coalition of National Writers’ Association (Gapena), reported Sin Chew Daily.

Justice Lim and Justice Rhodzariah Bujang dismissed the application of both petitioners, while Justice Abdul Karim Abdul Jalil dissented.

This meant that the Court of Appeal’s decision on November 23, 2023, which ruled that vernacular schools in the country were constitutional, stands.

Dark history of Malaysia’s Chinese villages underscores fury over Unesco bid

In delivering the majority decision, Justice Lim said that the court found that Mappim and Gapena failed to meet the requirements under Section 96(a) of the Courts of Judicature Act 1964 to be granted leave to appeal on constitutional matters amended by the petitioners.

“Therefore, the application for leave to appeal is dismissed with no costs,” she said.

Before this, the two NGOs, through their lawyer Mohamed Haniff Khatri Abdulla, submitted eight questions, consisting of six constitutional and two legal questions. However, the questions were later amended, and only one constitutional question was presented to the court.

The constitutional question was whether the medium of instruction in the teaching and learning process in national-type Chinese and Tamil schools, established under Sections 2, 17, and 28 of the Education Act 1996 (Act 550), is an official matter and subject to the obligation under Article 152(1) of the Federal Constitution, which mandates the use of the national language for all official matters.

As more Malaysians learn Mandarin, Chinese schools call for recognition

On December 29, 2021, High Court judge Datuk Mohd Nazlan Mohd Ghazali (now Court of Appeal judge) dismissed the lawsuits brought by GPMS, Mappim, Gapena and Isma. GPMS did not file the appeal to the Court of Appeal.

On May 292023, the Kota Bahru High Court judicial commissioner Abazafree Mohd Abbas (now High Court judge) also ruled that the existence of vernacular schools is constitutional and he dismissed the suit filed by I-Guru.

In their suit, GPMS, Mappim, Gapena and Isma named several parties, including the Malaysian Government, Chinese education groups Dong Zong and Jiao Zong, Persatuan Thamizhar Malaysia, Persatuan Tamilar Thurunal (Perak) and four political parties – MIC, MCA, Gerakan and Parti Bumiputera Perkasa Malaysia, as defendants.

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China launches nationwide survey on data resources, from AI firms to police

https://www.scmp.com/news/china/politics/article/3252555/china-launches-nationwide-survey-data-resources-ai-firms-police?utm_source=rss_feed

China has begun the first nationwide survey of data resources, with all related entities – from companies to the police – asked to provide information about their data assets.

According to one expert, the inclusion of police data in the survey suggests it has the support of the top leadership, which is pushing digitalisation as part of efforts to drive economic growth and technology development.

The new National Data Administration (NDA) is conducting the survey.

It has asked entities how they produce, store, circulate, trade, develop and use data, and also about data security, according to a statement released on Monday by the NDA, Cyberspace Administration of China (CAC), Ministry of Industry and Information Technology, and the Ministry of Public Security.

Entities required to take part in the survey include provincial data bureaus and public security departments, state-owned enterprises, internet platform companies, artificial intelligence firms, national laboratories, data exchanges and industry federations.

They will have to fill out online questionnaires, to be submitted by March 5.

China’s digital economy push for 12 sectors sets sights on finance, tech, farms

The survey aims to “provide data support for future policymaking and the establishment of data application demonstration zones”, the NDA said in the statement.

The NDA has been operating since October and was set up to oversee data governance as Beijing seeks to rise up the industrial value chain and drive growth while navigating US-led technology choke points.

In a three-year plan released at the end of last year, the NDA set the goal of achieving annual growth of more than 20 per cent for the data industry by 2026, and a doubling of data transactions.

Under the plan, China should also have more than 300 “typical” data applications, a few data application demonstration zones, and an array of “innovative and influential” data providers and third-party agencies by 2026.

China generated about 8.1 zettabytes of data in 2022, an amount that would fill more than 8 billion high-end home computers, placing it second only to the US, according to CAC data.

The value of China’s digital economy reached 50.2 trillion yuan (US$6.98 trillion) in 2022, accounting for 41.5 per cent of GDP.

A researcher with Tsinghua University in Beijing said one of the NDA’s key missions was “to integrate the massive data resources owned by various kinds of entities”.

“The involvement of the Ministry of Public Security – which was not among the 17 ministries and administrations which endorsed the [NDA’s] 2024 to 2026 action plan – probably indicates support from the top leadership,” said the researcher, who spoke on condition of anonymity.

“Understanding what they own is the only first step. The real challenge down the road will be persuading them to hand over their data, especially those in the hands of the government,” he added.

China aims to bring mega computing network online by next year in data power push

For the survey, provincial public security departments will have to state how many “key systems” and “key infrastructure” handled their “key data” in the last two years. They will also be asked how many data security cases they handled in 2022 and 2023.

Telecoms operators will have to provide the names and business areas of overseas entities that visited the top 10 websites and apps in China in the past two years. They will also be asked about traffic volume – including inbound and outbound – in 2022 and 2023.

Internet platforms and technology companies will also have to provide information on traffic, as well as users and servers, and to state whether they use AI in data analysis and other areas.

US and China looking for ‘sustainable’ ways to live with each other

https://www.scmp.com/comment/opinion/article/3252591/us-and-china-looking-sustainable-ways-live-each-other?utm_source=rss_feed

Tensions between China and the United States are continuing to thaw with a series of high-level meetings in recent weeks, including Foreign Minister Wang Yi’s meetings with top American officials Antony Blinken and Jake Sullivan.

In another effort to restart channels of communications, a meeting was also held in Vienna on Sunday between China’s Public Security Minister Wang Xiaohong and US Homeland Security Secretary Alejandro Mayorkas.

While it is too soon to expect a full reset, the resumption of regular official talks between the rival powers offers some hope that both sides want to avoid conflict and get their deeply troubled relationship back on track.

But those meetings are far from enough to reverse the spiral of hostility and mistrust between the two countries. Backchannel diplomacy and people-to-people exchanges are also badly needed to rebuild trust at a time when the two increasingly view the other side as an existential threat.

Wang Yi pretty much said so himself during his meeting with Blinken in Munich on Friday, stressing the importance of “carrying out people-to-people and cultural exchanges” as well as “exchanges at all levels”.

US national security adviser, top China diplomat to meet in Thailand

It is hardly a coincidence that the Chinese ministers blamed Washington for the lack of adequate unofficial and people-to-people exchanges during talks with their US counterparts in the past week.

According to the official Xinhua news agency, both men raised the issue of the alleged unfair treatment of Chinese nationals, with Wang Xiaohong telling Mayorkas that the US must “stop harassing and checking Chinese students for no apparent reason”.

Wang Yi echoed this, quoting a Chinese proverb that states: “An act of kindness, no matter how trivial, is worth doing, while an act of evil, no matter how small, must be shunned.”

Xinhua explained Beijing’s thinking in a separate article claiming that “these seemingly trivial actions” by the US side could “chip away at the bedrock of bilateral relations”.

A recent study by the Rand Corporation also highlighted the importance of unofficial diplomacy, in helping stabilise US-China ties, many involving incumbent and former government officials, businesspeople, think tanks and others.

“Track 2 dialogues [involving non-governmental figures] in the US-China context have helped to bridge gaps between formal diplomatic discussions and to maintain communications between the two countries even in times of government tensions,” said the study.

While it listed 30 current ongoing dialogues between the two countries, mostly focusing on security and economic issues, the Rand report said there is an essential one that has so far been absent.

“As useful as they are, these dialogues are a necessary but not sufficient step toward achieving a more fundamental long-term equilibrium in the relationship,” it said. The existing dialogues “tend to be long on inspiring rhetoric and short on practical ideas for rationalising the interests of the two sides.”

It warned that the two sides have few common interests beyond issues such as North Korea and preventing an arms race, and added that the lack of agreement on what shape future cooperation would take is troubling.

The report went on to suggest that both sides should start a Track 2 dialogue specifically focusing on a situation in which both countries can fulfil their essential interests while coexisting.

China’s police chief calls for global cooperation on public security at forum

“Despite the high levels of mistrust in the overall relationship, such an initiative could be very timely, taking advantage of the mutual interest in tension reduction mechanisms but doing so in a way that transcends some of the current mistrust by hypothesising medium-term future scenarios,” the report said.

While unofficial diplomacy may not have an immediate impact on government policy, it concluded that the two countries need “a non – zero-sum portrait of a shared future, one with which both great powers can live in a sustainable way” in the next five to 30 years.

Singapore Airshow: China’s home-grown C919 passenger jet lands 40 orders on international debut

https://www.scmp.com/economy/global-economy/article/3252569/singapore-airshow-chinas-home-grown-c919-passenger-jet-lands-40-orders-international-debut?utm_source=rss_feed

China for the first time flew the home-grown C919 narrowbody passenger jet in an international aviation event on Tuesday, securing more orders for it and the ARJ21 regional jet on the opening day of the Singapore Airshow.

The C919 conducted a flyover of Changi Exhibition Centre, marking its maiden official appearance during the largest aviation event in the Asia-Pacific region.

The Commercial Aircraft Corporation of China (Comac) said the international debut of the C919 alongside the ARJ21 highlighted the “ongoing progress in the development of China’s commercial aircraft”, the state-owned manufacturer said on Tuesday.

Comac also announced that it had signed a deal with Tibet Airlines for 40 C919 and 10 ARJ21.

The jets are designed to be suitable for high-altitude plateaus, with Tibet Airlines the first customer for the new variant being developed by the Shanghai-based state-owned manufacturer.

Comac said it would also conduct “marketing campaigns to strengthen communications with customers and partners” during the air show, adding that it is committed to better serving Southeast Asian customers, which are seen as a key market for the C919 and ARJ21.

The C919 has been designed to compete with Boeing’s 737 and Airbus’ A320.

Two C919 and three ARJ21 will remain on static display during the six-day event, while they are also expected to conduct flight performances.

The Henan Civil Aviation Development Investment Group, another Chinese state-owned company, also agreed to purchase six ARJ21 on Tuesday, including fire fighting, medical service and emergency jet versions, Comac added.

The international debut of the C919 came after the Civil Aviation Administration of China said last month that it would promote the certification of the narrowbody passenger jet in Europe.

There are also growing questions over Boeing’s share of the narrowbody passenger jet market following safety issues with its 737 Max jets.

The US manufacturer is listed as an exhibitor at the air show, but it has not showcased any of its commercial passenger jets in Singapore.

Airbus’ widebody passenger jet, the A350, was part of the line-up of commercial aircraft, helicopters and fighter jets that took part in a flying display on Tuesday.

The C919 has been in commercial service since May after 15 years of development, with Comac set to increase production.

Shanghai-based China Eastern Airlines received its fourth C919 in January, while Comac has said that it has received over 1,000 orders for the narrowbody passenger jet, with the majority from Chinese airlines.

China has invested heavily in commercial jet manufacturing in a bid to increase self-reliance to replace imports amid rising competition with the US in advanced technology.

Many of the key parts used on the C919, including its engine, are produced by foreign companies and joint ventures.

The narrowbody passenger jet made its first appearance outside mainland China in December after performing a flight demonstration in Hong Kong. It was also exhibited along with the ARJ21 at the city’s international airport.

Chinese driverless AI firm Westwell to invest HK$300 million to attract research talent for new Hong Kong headquarters

https://www.scmp.com/business/china-business/article/3252570/chinese-autonomous-driving-tech-provider-westwell-invest-hk300-million-attract-research-talent-new?utm_source=rss_feed

Westwell, a Chinese developer of AI chips for driverless vehicles, plans to invest HK$300 million (US$39.36 million) in the next five years to attract global talent to its new international headquarters in Hong Kong.

The funding will help create around 500 jobs at the centre, of which 70 per cent will be in research and development, said Kenny Tan Limin, founder and chairman of Westwell, at an opening ceremony for the new headquarters on Tuesday.

“Establishing our international headquarters in Hong Kong marks a strategic move in Westwell’s globalisation strategy, and will enable us to better serve international users and further advance our international expansion plans,” Tan said.

The Shanghai-based company designs and develops AI chips and autopilot control systems for autonomous vehicles and the broader logistics industry.

It launched its flagship product, the Q-Truck, an autonomous, battery-powered commercial vehicle, in 2018, two years after the company was formed.

After five rounds of fundraising last year, the company has a valuation of 7 billion yuan (US$973 million), with investors including China-based Essence Securities and InnoStar Venture under Shanghai-based conglomerate Fosun Group.

In 2020, Westwell made progress in the overseas market by collaborating with Hutchison Ports to introduce its autonomous trucks at Thailand’s Laem Chabang Port. The company also signed an agreement with the Port of Felixstowe, part of the Hutchison Ports network, to deploy 100 Q-Trucks at the UK’s largest container port. To date, 34 trucks have been delivered.

Westwell based its choice for its global HQ on Hong Kong’s position as a hub for international finance, trade and shipping, as well as the government’s support for innovation with fresh thinking and an industry-oriented approach, according to Tan.

Over the past year, Westwell’s Hong Kong subsidiary has promoted its local business and expanded its operations into countries such as Singapore, the United Kingdom and the Netherlands as a part of its global expansion.

Secretary for Innovation and Technology Sun Dong said the Hong Kong government had managed to attract Westwell to the city last year. Its overseas business grew rapidly via collaboration with local enterprises and thanks to Hong Kong’s unique advantages in terms of international standards, technological systems and logistics links.

“Hong Kong is helping Westwell to develop the Middle East market. The government will continue to bring in companies like Westwell, which are able to take root in Hong Kong and apply their products to local and overseas markets based on scientific research,” Sun said.

“By leveraging on Hong Kong’s unique advantage of being backed up by the motherland and connected to the world, these companies can radiate to overseas markets, especially in Southeast Asia and Belt and Road countries.”

Sun said the case of Westwell “fully reflects that Hong Kong’s technology industry is booming.”

Hong Kong unveiled an ambitious blueprint for innovation and technology development in 2022, with a plan to double the amount of talent, start-ups and unicorn enterprises in the city over the next decade, as well as push for a fourfold increase in the economic contribution of the manufacturing sector.

Tan said Hong Kong would provide the new R&D centre with a solid manpower base, with its world-class universities renowned for their scientific research and diverse talent pool.

“We look forward to extensive industry-academia cooperation with local research institutes and universities in Hong Kong, to promote the research and application of AI and autonomous vehicle technologies,” he said.

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‘Too thrilled to sleep’: China small business owner, 28, scoops US$96 million lottery jackpot, largest win in country’s history

https://www.scmp.com/news/people-culture/trending-china/article/3251504/too-thrilled-sleep-china-small-business-owner-28-scoops-us96-million-lottery-jackpot-largest-win?utm_source=rss_feed

A 28-year-old man in China has won a 680-million-yuan (US$96 million) lottery jackpot, the biggest in the country so far.

The winner is from Guizhou province in southwestern China, according to the website of the government-backed organiser China Welfare Lottery.

He bought 133 tickets at two yuan (28 US cents) each, betting on the same group of seven numbers every time, and each of his tickets won a prize of 5.16 million yuan (US$725,000), the local television station reported.

The lottery pool entitled the man, whose identity has not been released to the public, which is routine for prize winners, to receive the 680-million-yuan bonanza.

An official from the provincial welfare lottery centre said the winner came to pick up the prize on February 7.

As the Individual Income Tax Law rules, he will need to pay one-fifth of his lottery income in tax, the report said.

The man said he received the message about his massive win on his mobile phone at night and was so excited he could not sleep.

“At first I didn’t believe it, so I verified it several times. I was too thrilled to sleep,” he said.

The man, who has a small business in Anshun city, drove to Guiyang, the capital of Guizhou province, to collect his prize-winning cheque early the next morning.

“I’ve been researching the trend of numbers appearing in previous winning tickets. I chose some of those and added one of my own lucky numbers to bet on,” he said.

“I have bet on this set of figures for a long time. I will share this good news with my family during the Spring Festival holiday.”

His lottery win of 680 million yuan exceeded China’s previous record of 570 million yuan, won by a man living in Beijing in 2012.

Stories of huge lottery prizes often captivate mainland social media.

In December last year, a man in eastern Jiangxi province spent 100,000 yuan buying lottery tickets and scooping a 200-million-yuan prize, triggering public suspicion and requests for an investigation.

A man, who lives in the Guangxi Zhuang autonomous region, attracted criticism after he won 218 million yuan in 2022, but decided not to tell his wife or children because he thought they would “swell in their heart” and stop working hard.

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African donkey trade ban to slash China’s supply of traditional medicine ejiao

https://www.scmp.com/news/china/diplomacy/article/3252543/african-donkey-trade-ban-slash-chinas-supply-traditional-medicine-ejiao?utm_source=rss_feed

Africa has banned the slaughter of donkeys for their skins, dealing a significant blow to China’s lucrative market for a traditional medicine made from a gelatin extracted from the hides.

Insatiable demand for ejiao – which is said to improve vigour, enrich the blood and have anti-ageing properties – has obliterated China’s own donkey population, leading to huge export industries in Africa and South America.

But the African Union (AU) heads of state on Sunday ratified a motion proposing a 15-year ban on the donkey skin trade. Animal welfare organisations welcomed the decision as an “historic moment”.

The ban was proposed in November by the AU’s specialised technical committee for agriculture, rural development, water and environment and ratified by the leaders, who were in Addis Ababa for the 37th ordinary session of the AU Assembly.

Africa is home to about two-thirds of the world’s donkeys. Ethiopia – with nearly 100 million animals – is said to be the “world’s donkey superpower”. Sudan, Pakistan and Chad are also among the world’s top producers.

Demand for Chinese medicine fuelling illicit African donkey trade

Donkeys are stubbornly difficult to breed, with a gestation period that can last more than a year. Any obstacle to China’s imports of their skins is likely to pile on the pressure for the booming ejiao industry.

Ejiao was once known as a “medicine for emperors” but is now marketed to China’s affluent population. Collagen is extracted by boiling the donkey hides and then mixed with herbs and other ingredients into bars, pills and liquids.

Chinese demand accounts for the slaughter of more than 5 million donkeys annually, but only 2 million of those are supplied domestically. The remainder come from imported donkey hides – which could be fuelling an illegal trade in other countries.

The Africa ban follows an outcry from communities and animal rights groups, who say that the donkeys are treated cruelly or stolen from farmers who rely on them for their livelihoods.

Brooke East Africa, one of the associations that worked with the African Union Inter-African Bureau for Animal Resources to push for the ban, welcomed Sunday’s decision. “It is a great moment for donkeys all over the world and for indigenous African biodiversity conservation,” said Dr Raphael Kinoti, the association’s regional director.

“Donkey slaughter for its skin has had many negatives, from eroding livelihoods in Africa to robbing the continent of its culture, biodiversity and identity.

“We must all applaud the AU heads of states for taking these bold and drastic measures for a good cause. We urge all AU members to uphold the decision for the good of all.”

Animal welfare charity The Donkey Sanctuary also welcomed the move, saying it will help to protect the continent’s 33 million donkeys from being stolen, trafficked and slaughtered.

The charity said it would safeguard the tens of thousands of communities in Africa that rely on donkeys for their well-being and livelihoods.

“Donkeys in Africa will have enhanced protection from the devastating donkey skin trade following the ratification of a pan-African moratorium on the slaughter of donkeys for their skin,” it said.

How China’s demand for donkey skins risks ‘devastating’ African communities

The Donkey Sanctuary says at least 5.9 million donkeys are slaughtered for their skins every year across the globe. The number – which it describes as conservative – is projected to reach 6.7 million by 2027, to satisfy Chinese demand, it said.

The charity’s chief executive Marianne Steele, who described the AU decision as “enormous”, said the “agreement from leaders of the African Union strikes at the heart of the brutal skin trade”.

“It’s our hope that this decision will act as a catalyst for the rest of the world to act now, to not just save our donkey populations but to actively recognise their value and protect them properly,” she said.

According to the charity, the situation in Kenya – where authorities have closed several Chinese-owned donkey slaughterhouses – is such that the animals could become endangered.

“If the exploitation of donkeys were to continue at the rate we had been seeing, in another three to six years donkeys could be joining rhino and elephants as an endangered species in Africa,” it said.

The charity also pointed out the decision will need to be implemented and enforced by every country in the African Union.

China’s ambassador to Brazil makes Belt and Road Initiative pitch

Tanzania and Ivory Coast have already banned the trade, while Kenya closed four Chinese-owned slaughterhouses in 2020 in response to increasing cases of donkey theft.

Across the Atlantic in Brazil, a bill to ban donkey and horse slaughter will proceed to the Constitution and Justice Committee of the country’s Congress after it was passed by both the agricultural and environmental commissions.

Brazil is one of China’s biggest markets for donkey skins, but the animal also holds cultural significance for the Brazilian people. The bans in Brazil and Africa will effectively cut off China’s supply from two of the biggest markets in the trade.

Hong Kong’s Jimmy Lai told assistant to promote Apple Daily to mobilise ‘international front’ against mainland China, court hears

https://www.scmp.com/news/hong-kong/law-and-crime/article/3252556/hong-kongs-jimmy-lai-told-assistant-promote-apple-daily-mobilise-international-front-against?utm_source=rss_feed

Hong Kong tycoon Jimmy Lai Chee-ying asked his personal assistant to promote the now-defunct Apple Daily tabloid in Western media to mobilise an “international front” against mainland China, a former top aide has told a court.

Ex-associate publisher Chan Pui-man on Tuesday said Mark Simon, Lai’s right-hand man and a former United States intelligence agent, was asked to determine how Apple Daily could best publicise its English-language digital platform in the US before its official launch in May 2020.

Chan said she believed Simon became the point of contact between Lai and foreign journalists as he often represented the tycoon in interviews by overseas news outlets.

“My guess is that because Mark Simon had more frequent contact or was more familiar with foreign media, so [Lai] asked him to do some advertisements, that is to tell foreign media that [we] were working on an English edition,” said Chan, a defendant turned prosecution witness.

The ultimate goal was to garner international support for Lai and the newspaper he founded, she said, adding the mogul expected overseas countries to put pressure on China – by imposing sanctions, for example – if Apple Daily was suppressed.

Simon worked as a submarine analyst for US naval intelligence from 1987 to 1991. He arrived in Hong Kong in 2000 and gained permanent residency eight years later.

Jimmy Lai trial told Hong Kong tycoon used political figures to back Apple Daily

Chan’s evidence corroborated the prosecution’s stance that Apple Daily used its English edition to obtain “political protection” from the international community, including the US, and ward off a potential crackdown on the opposition-leaning newspaper by authorities.

Lai, 76, has denied two conspiracy charges of collusion with foreign forces under the Beijing-decreed national security law, as well as a third count of conspiracy to print and distribute seditious publications provided under colonial-era legislation.

Prosecutors are seeking to establish a case that Lai had full control over Apple Daily, including its editorial policy, and used the media outlet to facilitate his political agenda.

Lai, in a series of WhatsApp messages to editorial staff dated May 2020, stressed the English platform should focus on selected news stories about China to woo top overseas politicians, such as then US vice-president Mike Pence.

“Enlisting foreign leaders to subscribe to us is enlisting their support. They of course understand it and that’s why they would do it. Now is a good time to appeal to them when the English version is launched,” he said.

‘Hong Kong’s Lai told Apple Daily to play up Beijing’s alleged Covid cover-up’

West Kowloon Court heard editor-in-chief Ryan Law Wai-kwong, who oversaw Apple Daily’s digital content, at one point suggested engaging local youngsters to write English commentaries for the newspaper so that they could develop their own narratives about Hong Kong on the world stage.

Among the names that floated in the discussion were Yvonne Tong, former presenter for public broadcaster RTHK who triggered a political storm in 2020 after pressing a World Health Organization official on Taiwan’s membership status, and Brian Leung Kai-ping, a fugitive activist now based in the US.

Other proposed ways to publicise Apple Daily overseas included adding English subtitles to Apple Daily’s news videos and providing news digests in English on social media, the court heard.

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Chinese tourists flock to Singapore, Malaysia, Thailand during Lunar New Year, as overseas travel bounces back from Covid-19

https://www.scmp.com/news/asia/southeast-asia/article/3252557/chinese-tourists-flock-singapore-malaysia-thailand-during-lunar-new-year-overseas-travel-bounces?utm_source=rss_feed

Chinese travellers flocked to tourist hotspots across Asia over the Lunar New Year break, with visitor numbers and spending in destinations including Singapore, Thailand and Malaysia exceeding pre-Covid-19 levels.

Visa-free access for Chinese tourists to the Southeast Asia countries boosted traffic and signalled a robust revival in travel since Beijing lifted strict Covid-19 restrictions in early 2023 that had all but shut China’s borders for three years.

The increase also provides a welcome relief to countries whose tourism industries rely on the Chinese and their spending for growth, although the outlook for a sustained recovery in overseas travel is overshadowed by a sluggish mainland economy and volatile financial markets that have seen consumers tighten their belts at home.

Thai nightlife rebounds with late opening as Hong Kong revives campaign before Lunar New Year

“Despite the macroeconomic headwinds, we believe Chinese citizens are still willing to spend on travel-related experiences … we think travel-related spending could continue to outpace this overall domestic consumption,” HSBC said in a research note.

Bookings to Singapore, Thailand and Malaysia combined jumped more than 30 per cent from February 10-17 compared with 2019, according to travel website operator Trip.com, with Chinese visitors to Hong Kong, Macau, Japan and South Korea also increasing.

The holiday in 2024 lasted for eight days, one day more than the Lunar New Year break in 2019.

Reflecting the boost from visa waivers, hotel bookings for Bangkok tripled over the period from February 10-13 year-on-year, while those for Singapore jumped nine-fold, according to travel platform LY.com.

Spending in Singapore, Thailand and Malaysia combined on the Chinese mobile payment platform Alipay increased 7.5 per cent in the period from February 9-12 from 2019 levels and nearly 7-fold from last year, Alipay said.

However, overall consumer spending only recovered to 82 per cent of levels four years ago, the company said.

As Chinese scour for new adventures, the Middle East proved a popular Lunar New Year destination, with travel to Saudi Arabia up more than nine-fold from 2019 levels and bookings to the United Arab Emirates climbing 60 per cent, Trip.com said.

The gambling hub of Macau, the only place in China where citizens can legally gamble in casinos, recorded a surge in Chinese tourists with more than a million visiting over the holiday and average hotel occupancy rates reaching 95 per cent, according to official data.

The jump in tourists bodes well for some of the world’s largest casino operators in the former Portuguese territory, including Sands China and Wynn Macau.

Overseas Chinese tourists back as Alipay transactions up 7 per cent from 2019

JP Morgan said in a note it expected daily gross gaming revenues for the peak of the holiday to hit US$124 million for the first time in more than four years – higher than the US$112 million generated during the October 2023 Golden Week holiday.

Mass gaming rates were forecast to have reached 120 per cent of pre-Covid-19 levels, it said, adding that it expects February gross gaming revenues to rise by at least 80 per cent year-on-year to US$2.36 billion, the highest in more than four years.

Across the border in Hong Kong, leader John Lee Ka-chiu, said on Tuesday more than 1.2 million mainland Chinese tourists visited the city over Lunar New Year and overall hotel occupancy rates reached 90 per cent in the first few days. Around 1,980 group tours from mainland China visited Hong Kong during the holiday.

South Korea’s Justice Ministry said more than 114,000 Chinese visitors entered the country during the holiday, up 4 per cent from 2019, while some travel agents noted tourists were increasingly opting to travel on their own rather than in groups, which meant fewer organised trips to mega-stores.

“With drops in the number of group tourists, we don’t get to see Chinese tourists carrying big shopping bags any more,” an official at a travel agency in Seoul told Reuters, requesting not to be named as he is not authorised to speak to media.

In Japan, department store operator Isetan Mitsukoshi Holdings said that through to February 14 “duty-free sales were significantly higher than the previous year, partly due to the Chinese New Year”.

Visitors to China’s tourist spots spike during Lunar New Year

A shift in holiday tastes was reflected in some data as travellers sought more experience-based trips, with Alipay reporting Chinese tourists globally spent 70% more on food and beverages compared with pre-Covid-19 levels.

Trip.com said overseas car rentals on its platform jumped 53 per cent compared to 2019 and tickets for scenic experiences abroad soared more than 130 per cent.

China’s middle class crying out for reform to restore confidence

https://www.scmp.com/comment/opinion/article/3252526/chinas-middle-class-crying-out-reform-restore-confidence?utm_source=rss_feed

In the narrative of China’s rise, the middle class stands at the core of national rejuvenation – a crucible where aspirations, hard work and consumerism meld to forge progress. Yet, in the shadow of a once-burgeoning economy, this foundational group is dealing with the harsh realities of a depressed property market and wild stock fluctuations.

This economic turbulence has stripped wealth from those previously deemed pillars of China’s rapid ascent. Among polled middle-class families, about 40 per cent suffered a wealth reduction of at least 10 per cent in 2023. Eroding consumer confidence and shrinking net worth mark a stark departure from the prior engines of growth and threaten to derail the nation’s march towards prosperity.

Nowhere is this shift more visible than in the collapsing piano market, a symbol of cultural ambition now discarded as middle-class families recalibrate their finances. The trend extends to international schools, where once-abundant applications from an aspirational middle class are replaced with dwindling enrolments. Costly education and enrichment programmes, once seen as smart investments or status symbols, are now closing amid the throes of financial uncertainties.

Owning a home has long stood as a bastion of middle-class identity in China and an emblem of financial security. Yet as property values fall in an unprecedented market downturn, the once-coveted dream of owning a home has paradoxically drifted within reach, only to be met with ambivalence and economic apprehensions.

Luxury vehicles have lost their allure to electric vehicles’ fuel savings. Discount marketplaces are outpacing luxury item sales. These developments point to a distressed middle class grappling with diminished economic prospects. Their deep-seated economic anxiety is precipitating a downward spiral where diminished spending could further stifle growth.

The nation is at a critical juncture when effective reforms are needed to channel the energy of the middle class into driving economic recovery. Without such changes, China’s middle-class population – estimated to number more than 400 million people – could begin to dwindle.

Given that about two-thirds of China’s middle class falls into the lower-middle income category, a significant portion remains precariously close to the threshold defining middle-class status. In a cautionary commentary last December, the Economic Daily highlighted the looming threat of individuals slipping out of the middle class.

While China’s official unemployment rate remained low at 5.1 per cent in December, underemployment is a widespread problem. In 2021, more than 200 million people – nearly a third of China’s work force – were in flexible employment.

Some white-collar workers lost their professional jobs or accepted steep pay cuts. In the last quarter of 2023, compared to a year ago, average salaries fell by 1.3 per cent in major cities.

This calls for a strategic recalibration of government policies aimed at reviving the economic fortunes of this crucial demographic. As Beijing contemplates policy shifts to alleviate these pressures, it must balance immediate relief with long-term reforms to fortify the middle class.

To ease the struggles of the middle class, the government could implement a mortgage moratorium on halted or deserted construction projects. Prioritising citizens’ welfare over the profitability of state-owned banks is imperative. Furthermore, public housing – a foundation for Singapore’s middle class – can be significantly expanded.

The shared financial strains among public- and private-sector employees, marked by reduced wages and deferred salaries, fail to support consumer spending. To counteract this, the central government must allocate funds to local governments and ensure timely payrolls for civil servants to reinvigorate consumption.

Enhancing social welfare for rural communities is crucial during these challenging times. Providing assistance to underemployed migrant workers would also ease the financial pressures faced by the urban middle class, who often bear the responsibility of supporting parents who live in rural areas.

Amid the financial setbacks experienced by affluent Chinese investors because of underperforming domestic wealth management products, it is essential to expand their investment horizons through financial liberalisation. People are flocking to the safety of gold. Access to a diversified array of international investment opportunities could enhance the performance and resilience of their portfolios.

A comprehensive retraining programme is needed to equip the workforce to meet evolving market demands. This programme should cater not only to new graduates, who may find their qualifications mismatched with industry requirements, but also to older workers who need to update their skills.

Ultimately, fortifying China’s middle class depends on restoring economic dynamism with market reforms that spur innovation and entrepreneurship. Job creation remains the top priority. Reducing regulatory uncertainty is a critical first step in restoring business confidence.

Why is China mixing its economic messages when business confidence is so low?

The hit film goes beyond being a blockbuster and distils the middle class’s collective angst, trapped in the throes of an evolving economy and aching for true equality. The protagonists’ struggles with stunted career growth and precarious job security resonate deeply with viewers. As the echoes of laughter in cinemas fade, the audience is left with a yearning for the equitable opportunities and upward social mobility celebrated in the film.

The twin objectives of China’s resurgence – national rejuvenation and the pursuit of common prosperity – hinge on a growing middle class. The trajectory of an expanding middle class can only be supported by a meritocratic system without unfair glass ceilings.

China’s future is inextricably linked to a rule-based institutional framework that can position its citizens at the heart of its success. It is time for the “Johnny” spirit to be embodied in the nation’s ethos – unwaveringly walking forward towards a horizon of hope, achievement and common prosperity.

South China Sea: PLA sends forces to monitor US-Philippines air patrols over disputed waters

https://www.scmp.com/news/china/military/article/3252572/south-china-sea-pla-sends-forces-monitor-us-philippines-air-patrols-over-disputed-waters?utm_source=rss_feed

The People’s Liberation Army said it sent forces to the South China Sea to monitor the latest US-Philippines joint air patrol on Monday as the two allies launched their second drill in the disputed waters this month.

The air forces of the two countries conducted a patrol over the western Philippines as part of what they have called a “maritime cooperative activity”.

In response, China accused the Philippines of “roping in non-regional countries to stir trouble in the South China Sea” and “publicly hyping up a so-called joint air patrol”, though it did not directly refer to the United States.

The Southern Theatre Command, the PLA division that oversees the South China Sea, said on Monday night it had sent its naval and air forces to closely watch the situation. The command said it had kept the situation “under control” and that it would “maintain a high level of vigilance” to defend national sovereignty and preserve regional stability.

The Philippine Air Force sent three FA-50 combat aircraft while the US Pacific Air Forces sent a B-52H bomber to patrol the area, the Philippine Air Force said on Facebook.

PLA patrols South China Sea amid strained ties with the Philippines

Manila and Washington also carried out an air and sea patrol on February 9. Beijing responded with routine air and naval patrols and said it was maintaining a “high level of vigilance”.

China claims most of the South China Sea based on its “nine-dash line” – a line that Beijing says appears on historical maps and that has been used to justify its maritime claims. But Beijing’s claims to the resource-rich and strategically important waterway have been disputed by countries in the region, including the Philippines and Vietnam.

Beijing’s tensions with Manila over the South China Sea have been especially heated in recent months. The Philippines has accused China of repeatedly obstructing resupply missions within its exclusive economic zone, while Beijing said the Philippine vessels entered its territory illegally.

Clashes between the coastguards of the two countries near Second Thomas Shoal, or Renai Jiao in Chinese have also prompted Manila to mull plans to install permanent facilities on the reef, which Beijing warned would be met with “resolute responses”.

This week, the Philippines accused Chinese fishermen of using cyanide to catch fish and “intentionally destroy” the disputed Scarborough Shoal, known as Huangyan Island in China.

Cyanide fishing has been banned in many countries, including the Philippines, as the toxic chemical can devastate the marine ecosystem.

Chinese foreign ministry spokeswoman Mao Ning said on Monday the accusation was “fabricated” as the Chinese government “highly values ecological protection and fishery resources and conservation”.

Bilateral relations have pivoted since Philippine President Ferdinand Marcos Jnr took office in 2022 and did away with predecessor Rodrigo Duterte’s non-confrontational approach in the South China Sea.

Marcos has forged closer ties with the US and other allies. In November, he resumed joint patrols with the US in the South China Sea – a practice halted by Duterte in 2016.

He has also sought closer security cooperation with Japan as Tokyo’s ties with Beijing frayed over the East China Sea.

Chinese Foreign Minister Wang Yi said recent developments had brought Beijing and Manila to “a crossroads”.

In a phone call with his Filipino counterpart Enrique Manalo in December, Wang urged Manila to “act with caution” and “return to the right path” to manage the two countries’ maritime disputes.

He also warned the Philippines against “colluding with ill-intentioned external forces to continue to stir up troubles”.

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China girl, 10, shares daily life, family-related content with 7.5 million online followers, becomes one of country’s top young influencers

https://www.scmp.com/news/people-culture/china-personalities/article/3251510/china-girl-10-shares-daily-life-family-related-content-75-million-online-followers-becomes-one?utm_source=rss_feed

With 7.5 million followers, one of the top new influencers in China is a 10-year-old girl whose mother shares adorable videos of her daily life, which feature beautiful dresses, unique hairstyles, and her passion for jazz dance.

Surnamed Liu and nicknamed Gege, the girl, who lives in Hunan province in central China, is the star of family-related content shared by her mother on social media, a project that began four years ago, the Post found.

Gege’s most popular video features the girl showcasing how she tied her braids into four different fashions to cater to various scenarios. Published in March 2023, it has attracted 8.7 million likes.

One style, in which half of the hair is kept short and the other half long, was dubbed “jellyfish hair” online and resulted from a compromise because the girl rejected her mother’s insistence on cutting the hair short.

In another viral clip, which received 1.15 million likes, Gege’s mother asks two helpers to work with her to make a gown for the girl that looks similar to one a celebrity wore at a recent event. The next day, Gege wore the fairy-style dress at her 10th birthday party.

Gege’s mother, who has remained anonymous, was born in the 1990s and said she liked playing computer games, tailoring clothes, and dancing before having a child. She is married to a vegetable trader and values her husband who supports the family.

Now, she spends every day caring for her daughter and jokes that she “plays a very high-end game called ‘the realistic education simulation game’.”

The mother said Gege is an excellent student, adding that her daughter scored 95 out of 100 points in a recent exam.

“I hope my daughter can be independent and support herself financially when she grows up, which is why I am putting all of my effort into educating her,” the mother said.

On Douyin, her videos often receive positive attention.

One person wrote: “This girl is beautiful and adorable! Your videos are making me want to have daughters.”

“With such a cute daughter, this mother should be the happiest woman in the world,” said another.

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Birth rates among Chinese falling everywhere, not just China, Malaysian Chinese official says

https://www.scmp.com/news/asia/southeast-asia/article/3252531/birth-rates-among-chinese-falling-everywhere-not-just-china-malaysian-chinese-official-says?utm_source=rss_feed

Chinese communities worldwide are facing a decline in their birth rate, including in Malaysia, according to the president of the Malaysian Chinese Association.

“The Chinese in many parts of the world, they don’t have many kids,” Dr Wee Ka Siong told reporters after launching the Dato’ Teng Gaik Kwan Centre for Early Childhood Education in Tunku Abdul Rahman University of Management of Technology on Monday.

“This is the trend that is causing the Chinese population to be declining,” he said, adding that the birth rate for ethnic Malays is also dropping. “This is a very personal [choice].”

Wee said that declining birth rates were caused by the challenges young couples face when caring for their children.

This includes ensuring they can afford to send their children for a tertiary education, he said, adding that when Chinese couples calculate the expenses, they tend not to have more children.

“You have to think twice because you have to nurture the younger generation,” Wee said.

As Asia grapples with declining birth rates, Philippines wants fewer babies

Wee said that while his parents would have had around 10 siblings, members of his generation would only have two or three brothers or sisters on average.

However, he said that the lunar Year of the Dragon tends to see an increase in the birth rate among ethnic Chinese.

While agreeing that the number of ethnic Chinese students in Chinese schools would drop, he said that such schools cannot stop other students of other ethnicities from enrolling.

Around 20 per cent of students in these schools are currently non-Chinese, Wee said.

Malaysia in 2050: old, poor, sick and without children?

Wee was responding to Bayan Baru MP Sim Tze Tzin, who had expressed concern in a Facebook post on February 13 over the declining birth rate among the Chinese community in Malaysia and the effect of this on school enrolment.

Sim said data from 2022 showed that only 40,000 Malaysian-Chinese were born that year.

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Hong Kong patient advocacy groups urge government to clarify elderly healthcare voucher dispute procedures in mainland China

https://www.scmp.com/news/hong-kong/health-environment/article/3252501/hong-kong-patient-advocacy-groups-urge-government-clarify-elderly-healthcare-voucher-dispute?utm_source=rss_feed

Patient advocacy groups have urged Hong Kong authorities to release more information on the use of elderly healthcare vouchers in mainland China amid concerns over the handling of medical disputes and compensation claims across the border.

The Health Bureau on Monday announced plans to extend the city’s voucher scheme to seven more hospitals and dental centres in the Greater Bay Area by the third quarter of this year.

Secretary for Health Lo Chung-mau said service quality control would be managed by mainland authorities.

Elderly able to use Hong Kong healthcare vouchers at 7 more bay area centres

“I must emphasise that from my personal experience with the mainland healthcare services, the control by the health commission of the various cities, and also by the provincial health commissions, is very strict and serious,” he said, when asked how voucher holders could handle cases of medical disputes or blunders.

“There are ways for complaints [to be made in Hong Kong] if ... the patients feel that there are some services which are not up to their expectations. For the financial side, our Department of Health has a team to look into all the claims for the healthcare vouchers.”

The bay area is Beijing’s plan to link Hong Kong, Macau and nine Guangdong province cities into an economic powerhouse.

Lo said no serious irregularities had been recorded for services provided by the University of Hong Kong-Shenzhen Hospital, referring to one of the two medical institutions currently covered by the voucher scheme in Shenzhen.

But he did not further elaborate on how complaints would be handled on the mainland.

Alex Lam Chi-yau, a lawyer and chairman of advocacy group Hong Kong Patients’ Voices, said the scheme could help reduce the burden on the city’s public healthcare system while providing more choice for residents.

He said that in Hong Kong, patients could seek help from the Medical Council or the Dental Council over unsatisfactory services delivered by doctors or dentists, and they could also bring a court case by themselves or with a lawyer’s help.

“But this system does not apply to mainland medical institutions or staff. You cannot sue a mainland doctor in Hong Kong,” he said.

“If the resident is not familiar with the mainland system, where should they file their complaints and claims? I am afraid I am not familiar with it as well.”

Lam urged the government to explain to residents how they could file complaints and claims, while also ensuring the services of the mainland institutions were up to standard and preventing abuse as the voucher scheme involved taxpayer money.

Healthcare specialists cool to expanded Hong Kong elderly voucher scheme

“They said they would ensure there would be a complaint mechanism. But after their complaints, if it involves claims or compensation, or even insurance, what are the procedures?” he said.

The Elderly Health Care Voucher Pilot Scheme, first launched in 2009, provides an annual voucher of HK$2,000 (US$255) per person with the amount allowed to accumulate up to HK$8,000.

People aged 65 or over who hold a Hong Kong identity card or Certificate of Exemption issued by the Immigration Department are eligible for the scheme.

The government on Monday said it expected to expand the scheme to five bay area hospitals that offered integrated medical services and another two providing dental care near the border with Shenzhen from the third quarter.

Patients’ rights advocate Tim Pang Hung-cheong, of the Society for Community Organisation, also urged the government to clearly explain the channels elderly residents could use when filing complaints, such as those for overcharging.

Linda Tsang Chi-man, executive director of the Hong Kong Federation of Trade Unions’ bay area branch, also said more promotion and education should be rolled out for the expanded scheme.

“For example, when the scheme was extended to the University of Hong Kong-Shenzhen Hospital, many elderly from Hong Kong had no idea how to book appointments and calculate the voucher amount,” she said.

“We suggest that those institutions set up counters designated for Hongkongers or appoint service ambassadors to teach them how to use the vouchers.”

Hong Kong to police healthcare voucher sharing scheme for elderly to prevent fraud

She said in case of any medical disputes, elderly residents could seek help from the union’s bay area centres or its free-of-charge legal consultation hotline.

Mickie Lam Suk-mei, a 65-year-old retired logistics worker who has been living in the town of Sanxiang in Guangdong’s Zhongshan since 2019, said the location of healthcare facilities was a major concern for her.

The closest hospital under the expanded scheme – Zhongshan Chenxinhai Hospital of Integrated Traditional Chinese and Western Medicine – is a one-hour drive away.

“But with my public health insurance [on the mainland], I only need to pay less than 20 yuan (US$3) to see a doctor and get my drugs at the health station in my neighbourhood,” she said.

“I used to see a doctor at the University of Hong Kong-Shenzhen Hospital with a 2,000 yuan subsidy, but a trip to Shenzhen costs me 800 yuan and two hours each time,” she said, referring to a separate subsidy under a scheme rolled out in 2020 to let public hospital patients living on the mainland have follow-up consultations at the facility amid strict border control measures during the pandemic.

Hong Kong carers need more healthcare support from government: advocacy group

Retiree Lam, who used to see doctors at public hospitals in Hong Kong for her high blood pressure and diabetes before moving to Zhongshan, stopped visiting the Shenzhen facility after a year. Instead, she continued her regular consultation at a Zhongshan hospital and a community health station.

She was also concerned about the transparency of the fees at those facilities, saying she hoped authorities would provide more information to help patients make informed decisions.

Kane Chan, a 42-year-old gas industry worker living with his parents in Foshan, said he might consider driving his 70-year-old father, who had a stroke last year, to the Guangzhou hospitals for treatment instead of visiting a community clinic nearby.

“I suppose the Hong Kong government would have reached some agreements with those hospitals and there shouldn’t be any disputes or conflicts … my father is happy with the medical quality on the mainland, he has recovered very well.”

China firms in EU firing line as Hungary yields to anti-Russia sanctions package

https://www.scmp.com/news/china/diplomacy/article/3252535/china-firms-eu-firing-line-hungary-yields-anti-russia-sanctions-package?utm_source=rss_feed

The European Union could blacklist Chinese firms accused of circumventing sanctions as soon as Wednesday, after Hungary said it would not veto the latest package of punitive measures targeting Russia.

“There is no reason to veto it,” Hungarian Foreign Minister Peter Szijjarto said in Brussels after a meeting with his ministerial counterparts on Monday evening, adding that he thought “the EU is making the wrong decision”.

On Sunday, Chinese Public Security Minister Wang Xiaohong – who was in Budapest to sign cooperation agreements on policing and security – told Hungarian Prime Minister Viktor Orban that Hungary was “a good friend and companion who has stood the test of time”, according to a statement from China.

Diplomats said that EU ambassadors could now finalise the 13th package of sanctions at a meeting on Wednesday, since Hungary was the only holdout during initial discussions last week.

Three mainland Chinese firms and one Hong Kong company would be blacklisted and banned from trading with EU companies as part of the package, for allegedly circumventing the bloc’s efforts to choke the supply of European-made dual-use goods to Russia.

China opposes ‘unilateral sanctions’ over Ukraine as EU proposes new trade curbs

Media reports have named the companies as mainland China-based Guangzhou Ausay Technology Co Limited, Shenzhen Biguang Trading Co Limited, Yilufa Electronics Limited, and the Hong Kong-based RG Solutions Limited.

According to a post on Soapbox, a weekly newsletter about EU-China trade, the firms are listed on “some Russian e-commerce sites, and ship electronics” and were “just traders, not producers”.

The ban would mark the first listing of mainland companies on the EU’s “annex IV” roster of censured firms. Last summer, officials removed five Chinese entities from a previous sanctions package after assurances from Beijing that the practice would stop.

EU leaders directly raised the names of 13 other Chinese entities they said were providing Moscow with sanctioned goods with President Xi Jinping during a summit in Beijing in December.

Beijing has strongly condemned the suggestion that its firms could be listed. Addressing a United Nations Security Council session on the conflict last week, Chinese envoy Zhang Jun lashed out at “unilateral sanctions”.

During a meeting with US Secretary of State Antony Blinken in Munich last Friday, Foreign Minister Wang Yi asked him to “lift illegal unilateral sanctions on Chinese companies and individuals and not harm China’s legitimate development rights”.

In Munich, China defends ties with Russia, warns West on Taiwan ‘red line’

In an on-stage interview at the Munich Security Conference, Wang rejected any moves “to blame China or to shift the responsibility of resolving the Ukraine crisis to China”.

The veteran diplomat subsequently met his Ukrainian counterpart Dmytro Kuleba and told him that “[China] does not sell lethal weapons to conflict areas or parties to conflicts”, according to a foreign ministry readout.

The EU’s 13th sanctions package targets almost 200 individuals and businesses alleged to be aiding Russia’s military effort. Its passage comes as the war ticks towards its second anniversary, and as the tide looks to be turning against Ukraine.

“I hope it will be approved before the 24th of February,” the EU’s foreign affairs chief Josep Borrell said on Monday evening.

Chinese foreign minister and US secretary of state meet in Munich

The devastated city of Avdiivka fell to Russia on Saturday after months of fighting, while a mood of pessimism hung over the Munich conference last weekend. Attending the conference, Ukrainian President Volodymyr Zelensky appealed for continued Western military support, amid waning enthusiasm on US right-wing.

Monday’s meeting of the EU’s 27 foreign ministers in Brussels was attended by Yulia Navalnaya, the widow of Alexei Navalny, a Russian opposition leader who died in a remote prison in the Arctic Circle on Friday.

In a joint statement, the ministers said they would “spare no efforts to hold Russia’s political leadership and authorities to account, in close coordination with our partners; and impose further costs for their actions, including through sanctions”.

Borrell on Monday proposed renaming its human rights sanctions regime for Navalny.

“Now it will be called – if the ministers agree, they agreed politically, but it has to go through the technical process – the ‘Navalny regime on global human rights sanctions’. This will be a way of keeping his memory alive,” Borrell said.

There are currently four Chinese officials listed under this sanctions regime for their part in alleged human rights abuses in Xinjiang. One entity, the Xinjiang Production and Construction Corps Public Security Bureau, is also listed.

Taiwan protests after China boards a tourist boat near Kinmen Island

https://apnews.com/article/taiwan-china-kinmen-border-tensions-5e43867b66fe8ec6d155251541821f92FILE - Ships move through the Taiwan Strait as seen from the 68-nautical-mile scenic spot, the closest point in mainland China to the island of Taiwan, in Pingtan in southeastern China's Fujian Province, on Aug. 5, 2022. Warning of a new wave of panic, Taiwan on Tuesday, Feb. 20, 2024, protested antagonist China’s boarding of a tourist boat as tensions rise around the Kinmen archipelago that lies just off the Chinese coast but is controlled by Taiwan. (AP Photo/Ng Han Guan, File)

2024-02-20T05:14:04Z

TAIPEI, Taiwan (AP) — Taiwan on Tuesday protested China’s boarding of a tourist boat, as tensions rise around the Kinmen archipelago, which lies a short distance off China’s coast but is controlled by Taiwan.

Taiwanese media reported the King Xia, carrying 11 crew and 23 passengers, was boarded by the Chinese coast guard for about 32 minutes on Monday. Taiwan’s coast guard escorted the boat back to Kinmen, and it then continued its sight-seeing voyage.

Ocean Affairs Council Minister Kuan Bi-ling told journalists at the legislature on Tuesday that the incident “hurt the feelings of our people, created panic among the people, and was not in the interest of the people on both sides of the Taiwan Strait,” referring to the 160 kilometer- (100 mile)-wide waterway that separates mainland China from Taiwan, a self-governed island that Beijing claims as its own territory.

Premier Chen Chien-jen said Taiwan was seeking to lower tensions in the area, which have escalated as China increased military activities following Taiwan’s election of an independence-leading president in January.

China is stepping up patrols in the waters off the coast of Taiwan’s Kinmen archipelago, days after two Chinese fishermen drowned while being chased by the Taiwanese coast guard, which accused the boat of trespassing.

Taiwan’s coast guard said a boat carrying four people was fishing about one nautical mile away from Kinmen, which Taiwan has claimed as a restricted area largely for military purposes, and capsized during a chase. The two survivors remain in Taiwan’s custody.

China blamed Taiwan’s ruling Democratic Progressive Party for the fishermen’s deaths. It also said that there was no such thing as “restricted” waters.

A spokesperson for the Chinese coast guard said Sunday that its Fujian division will regularly monitor the waters off the southern coast of the city of Xiamen — a few kilometers from Kinmen — to strengthen maritime law enforcement.

Fishermen from both Taiwan and China regularly sail that stretch of water, which has seen a rise in tensions as the number of Chinese vessels — including sand dredgers and fishing boats — have notably increased in the area.

Kinmen residents have complained of both the noise and sound pollution from the vessels, as well as losses to their livelihood in fishing.

Taiwan split from China during the 1949 civil war, but Beijing continues to regard the island of 23 million and its outlying islands as Chinese territory and has been ramping up its threat to achieve that by military force if necessary.

China coast guard boards Taiwan tourist boat in escalation of tensions

https://www.theguardian.com/world/2024/feb/20/china-coast-guard-boards-taiwan-tourist-boat-king-xia-kinmen-islands

China’s coast guard has boarded a Taiwanese tourist vessel, as tensions continue to escalate in the waters between China’s mainland and Taiwan’s Kinmen islands after a capsizing killed two people last week.

The Taiwanese sight-seeing ferry King Xia was carrying 11 crew and 23 passengers on a tour around Kinmen’s main island on Monday when it was intercepted by two Chinese coast guard patrol vessels. Six officers boarded the King Xia and asked to inspect the documentation of the crew, before disembarking about 30 minutes later, Taiwan’s Coast Guard Authority (CGA) said. Soon after a Taiwan coast guard patrol arrived to escort King Xia back to port.

Kinmen is Taiwanese territory but sits just a few kilometres from the Chinese mainland. Statements from the CGA and Taiwanese officials suggest the King Xia had strayed slightly off course – which the CGA said was to avoid shoals in the area. It said Chinese and Taiwanese tourist vessels often accidentally cross into the other side’s waters but the CGA doesn’t try to board Chinese boats because it is clearly accidental, and called on Chinese authorities to “uphold peace and rationality”.

Kuan Bi-ling, head of Taiwan’s Ocean Affairs Council told reporters on Tuesday the actions of the Chinese coast guard had “triggered panic” among Taiwanese people.

“Boats like these are not illegal at all,” she said.

Taiwan’s Maritime and Port Bureau urged Taiwanese vessels to refuse future requests by Chinese coast guards to board for inspection, and instead to immediately notify the CGA.

Taiwan’s defense minister, Chiu Kuo-cheng said on Tuesday the military would not “actively intervene” in the incident, so as to not further escalate tensions.

“Let’s handle the matter peacefully,” he told reporters.

One passenger on the tourist boat told Taiwan’s United Daily News the incident was “very scary” and she was “worried that they might not be able to go back to Taiwan”.

The incident comes amid heightened tensions after a Chinese fishing boat, which was being pursued by Taiwan’s coast guard, capsized on Wednesday. Two of the four people on board died, and the other two were detained by the coast guard.

At the time, Beijing condemned the actions of Taiwan’s coast guard and called for further investigation of the deaths. It also announced it would increase inspection patrols in the area. Taiwan’s government defended the incident, saying the Chinese crew had illegally entered Taiwanese waters, “refused to cooperate” with requests to board for inspection, and sped away. It said the CGA had the right to “enforce the law”.

On Saturday, China’s Taiwan Affairs Office called for Taiwan to release the two detained fishers, and rejected Taiwan’s claim the boat had been in “restricted waters”.

The office’s spokesperson, Zhu Fenglian, said that both sides of the Taiwan Strait belong to China – a reflection of Beijing’s claim that Taiwan is a province and not a sovereign state.

“Fishermen on both sides of the Taiwan Strait have been operating in traditional fishing grounds in Xiamen and Jinhai waters since ancient times. There is no such thing as ‘prohibited or restricted waters’,” Zhu said.

On Monday the office said family members of the four fishers in the capsize would travel to Kinmen, accompanied by Chinese representatives for support.

Beijing has long claimed Taiwan, and under the rule of Xi Jinping it has strengthened its resolve to achieve what it terms “reunification”. Xi has not ruled out using force to do so, but in an effort to avoid war has instead increased military harassment, economic coercion and incentives, and cognitive warfare.

Additional research by Chi Hui Lin

EU sanctions on Chinese firms ‘will have little impact on Russia’s war in Ukraine’

https://www.scmp.com/news/china/military/article/3252480/eu-sanctions-chinese-firms-will-have-little-impact-russias-war-ukraine?utm_source=rss_feed

The European Union’s proposed sanctions on Chinese firms over their alleged links to the Russian military are unlikely to have much impact on Moscow’s war on Ukraine, according to a Swedish think tank head.

“So far as current evidence says, sanctions on Chinese companies would have little to no effect on Russia,” Dan Smith, director of Stockholm International Peace Research Institute (SIPRI) said in an interview.

“I see this as being kind of an expression of some degree of hostility towards China, without being effective about it”.

He added that there is “currently no evidence that China has transferred complete weapon systems to Russia” and that if the EU and others could recognise that sanctions are an inefficient policy instrument, they might then start to work out how diplomacy, cooperation and pragmatic relations could help achieve their goals.

“But, of course, the question then is whether the Chinese leadership is open to discussion and persuasion,” he said.

Ukraine doesn’t have enough shells. Avdiivka withdrawal shows that

The EU has reportedly asked for a blacklist of more than 20 companies, including three from mainland China and one from Hong Kong, for circumventing EU sanctions on Russia and contributing to Russia’s military development.

If approved, the blacklisted companies, mostly technology and electronics companies, will be barred from trading and engaging in businesses with the 27 member states.

It is the first time the bloc has targeted mainland Chinese firms since Russia invaded Ukraine. The EU had previously placed similar bans on more than 600 companies, including three firms based in Hong Kong.

Smith said the trade between the two countries is no different from those between the West and Moscow.

“And of course, some of that is contributing towards the Russian military effort, which is not surprising because in order to pursue this war, the government of President [Vladimir] Putin has turned Russia into an arms economy,” said Smith.

“So if you’re trading with Russia at all, you are indeed contributing to an arms economy. And despite the sanctions, there’s still a lot of Western trade with Russia. So one part of me does not really quite understand why the EU would do this.”

Beijing and Moscow have moved closer together since the start of the war, but China has consistently denied providing military support.

China’s top diplomat Wang Yi told the Munich Security Conference last week that the relationship between the two countries involves “no alliances, no confrontation and [is] not targeting any third party”.

Smith added that if China wishes to mediate a peace deal it needs to make clear its “coolness towards Russia and its dislike of Russia’s decision to seize Ukrainian territory”.

‘Eternal glory’: Putin hails Russia’s ‘important victory’ in Ukraine’s Avdiivka

“At the moment, I think it is difficult for China to be taken completely seriously by Ukraine as a mediator or facilitator of negotiations, in the same way that Russia would find it hard to take the EU or the US seriously in that role,” said Smith.

“So I think if China wants to play that role—and it would be very useful if it could do—then it needs to take a little bit more distance from Russia and make clear some criticism of Russia’s actions in Ukraine.”

How US sanctions could push China and Russia closer together

https://www.scmp.com/comment/opinion/hong-kong/article/3252416/how-us-sanctions-could-push-china-and-russia-closer-together?utm_source=rss_feed

Following Ukraine’s inconclusive counteroffensive last year to push Russian forces out of the southern part of the country, the US government has launched a series of measures ramping up pressure largely on non-Western business interests, including some in mainland China and Hong Kong, for circumventing economic sanctions over Russia’s invasion of Ukraine.

The intensifying sanctions have arisen amid a rebound in the Russian economy. The International Monetary Fund projects growth of 2.6 per cent in 2024 after a higher-than-expected 3 per cent estimated expansion for 2023.

The new wave of sanctions began in December when the White House imposed restrictions on Chinese and other non-US financial institutions providing support for Russia’s expanding war economy. The new regulation applies sanctions on international financial institutions which enable significant transactions for organisations and individuals having business ties with the Russian military-industrial complex.

The new rules appear to have extraterritorial reach, not requiring that any such financial transactions have a nexus with US legal jurisdiction. US Treasury Secretary Janet Yellen announced that the agency “will not hesitate to use the new tools provided by this authority to take decisive and surgical action against financial institutions that facilitate the supply of Russia’s war machine”.

The key industries for which international financial support is being targeted involve technology, aerospace, defence and related materials, in addition to broader manufacturing and construction sectors. Where transactions breach the regulations, US authorities can impose full sanctions to block any financial institution from engaging in services with a US organisation or individual.

Chinese banks ‘refrained’ from dealing with Russia over sanctions fears

Since the new rule was introduced, the US Treasury Department has held a meeting with leading Chinese state banks, including the Bank of China, ICBC and Bank of Communications, as well as Hong Kong financial players such as CMB Wing Lung Bank.

Reports suggest the talks were conducted in a collaborative atmosphere with discussions mainly centred on preventing indirect facilitation of financial transactions benefiting Russia’s arms industry. According to Bloomberg, a major outcome of the talks involved Chinese state banks agreeing to rein in their links to Russia’s military-industrial base.

In December, the US Treasury Department imposed sanctions on more than 150 companies and individuals, including several mainland Chinese and Hong Kong entities. The measures underscore Russia’s use of third countries “to acquire much-needed technology and equipment for its war economy”.

This came after the Atlantic Council published a report last November describing how China has enabled Russia to circumvent US sanctions.

It stated: “Open-source trade data suggests that a surge in imports of Chinese-manufactured goods with important military uses played a key role in Russia’s ability to shore up its defences on Ukrainian territory … Even as weapons and ammunition pour into Ukraine from Nato countries, they are being counterbalanced by Chinese imports – not of weapons, but of materials vital for Russia’s ability to sustain its continued stubborn efforts to hold onto Ukrainian territory.”

The report pointed to the expansion in Russian acquisitions of key strategic equipment from China such as integrated circuits, large excavation vehicles and ball bearings, which can have direct military applications.

The Atlantic Council report also claimed Russian security forces had used Chinese-produced drones in the Ukraine conflict. Meanwhile, Ukraine’s KSE Institute reported that throughout most of 2023 around two-thirds of Russia’s non-lethal battlefield and critical goods were sourced from producers in China.

The Chinese government’s response to the sanctions was vehement. The Ministry of Commerce demanded that the “United States should immediately correct its wrong practices and stop its unreasonable suppression of Chinese companies”, further accusing Washington of “unilateral bullying”.

While the European Union has not introduced sanctions targeting Chinese companies, it has raised the issue with Chinese leaders. This included during the China-EU summit held last December, when President Xi Jinping hosted European Council President Charles Michel, European Commission President Ursula von der Leyen and their delegation.

Michel conveyed to Xi a list of Chinese companies which the EU planned to discuss sanctioning for their supply of dual-use goods to Russia. Several Chinese companies are expected to be sanctioned soon, preventing them from doing business with European companies in future.

According to Chinese state media, Xi did not respond directly to the proposed sanctions discussed with the EU leaders, only stating that the two sides should not “engage in confrontation because there are disagreements”.

Recently, however, Beijing has escalated the rhetoric in its opposition to the sanctions. Perhaps the most prominent display of China’s growing disquiet with the West’s pressure arose in a video conference between Dong Jun, China’s new defence minister, and his Russian counterpart Sergei Shoigu.

During the call, on January 31, Dong said, “We have supported you on the Ukrainian issue, despite the fact that the United States and Europe continue to put pressure on the Chinese side.”

Dong’s use of the word “support” elicited some surprise as it runs counter to Beijing’s stated policy of remaining neutral on Ukraine and seeking a political settlement of the crisis – a point which Foreign Ministry spokesman Wang Wenbin later reiterated, adding that, “this position has not changed”.

Even so, as the West increasingly grows frustrated with China and the poor effectiveness of its measures against Russia, the steady increase of sanctions could at some point be conflated with heightened security tensions around Taiwan and the wider Asia-Pacific. That could push China into further deepening its economic relations with Russia as well as its military cooperation.

Mainland Chinese customers spent US$7.6 billion on Hong Kong insurance policies last year, but sales to fall as ‘pent-up’ demand fades: watchdog

https://www.scmp.com/business/banking-finance/article/3252469/mainland-chinese-customers-spent-us76-billion-hong-kong-insurance-policies-last-year-sales-fall-pent?utm_source=rss_feed

Mainland Chinese tourists spent HK$59 billion (US$7.6 billion) on insurance policies in Hong Kong last year, the Insurance Authority (IA) said.

Policy sales have been boosted by the reopening of the mainland border, a weakening yuan and the interest rate gap between China and the United States, the IA added. But sales are expected to drop to the normal levels recorded between 2017 and 2019 of about HK$43 billion and HK$51 billion a year, as “pent-up” demand fades.

“Sales to mainland visitors last year were particularly strong due to pent-up demand, as cross-border travel had been brought to a standstill due to the Covid-19 pandemic from 2020 to 2022,” Clement Cheung Wan-ching, the IA’s CEO, said on Monday.

“This pent-up demand will fade, so demand will return to the average level seen during the years before the pandemic. It is unlikely to go back to a peak of HK$72.7 billion seen in 2016.”

Last year’s tally is a significant jump on the three-year Covid-19 period, which recorded sales of HK$2.1 billion in 2022, HK$700 million in 2021 and HK$6.8 billion in 2020. It is higher than the pre-Covid era too, which reported sales worth HK$43.4 billion in 2019, HK$47.6 billion in 2018 and HK$50.8 billion in 2017, Cheung said.

A rush to buy insurance policies in Hong Kong in 2016 prompted China to introduce measures the same year that tightened cross-border payments for overseas insurance policies. Cheung, however, hopes the buying trend will continue in the current interest rates and foreign exchange scenario.

Hong Kong’s star shines as Greater Bay Area’s rich tap tax breaks, incentives

“As long as the US interest rate cuts do not happen too soon and too drastically, and the currencies stay at the current level, there is still demand among mainland visitors coming to Hong Kong for buying policies for better returns,” he said. “This is how Hong Kong can contribute to the country, as we can act as a wealth management centre for mainland visitors.”

The US Federal Reserve’s key target range currently is 5.25 to 5.5 per cent interest, after rising from zero in March 2022 in a crackdown on inflation. Hong Kong, whose currency has been pegged to the US dollar since 1983, has also increased its base rate from 0.5 per cent in March 2022 to 5.75 per cent as of July last year.

In contrast, the mainland’s one-year loan prime rate currently stands at a record low of 3.45 per cent, compared with 4.35 per cent in 2022. The insurance policies’ payout is linked to interest rates, so mainland customers who buy US dollar or Hong Kong dollar policies can enjoy a better return of about two percentage points than those on the mainland.

Pacific Century downplays FWD stake sale, says IPO will come at ‘opportune time’

Additionally, many mainland customers have turned to higher yielding bank deposits and insurance and investment products in Hong Kong amid a weakening of the yuan. The Chinese currency has lost 14 per cent against the US dollar since March 2022, when the current interest rate rise cycle started.

Cheung said the IA will continue with its educational efforts to make sure mainland customers understand the products they are buying. It will also conduct more enforcement activity to make sure insurance companies and their salespersons treat customers fairly.

“The Insurance Authority previously focused on checking the financial capacity of the insurance companies,” he said. “This year onwards, we will also check on their policies for anti-money-laundering, sales practices and other customer-protection issues.”

Jobseekers, employers in Hong Kong’s financial sector start 2024 on cautious note

The State Council, the Chinese central government’s cabinet, has been studying proposals for the set up of after-sales service centres in Greater Bay Area cities, said Stephen Yiu Kin-wah, the IA’s chairman, but a launch time table has not yet been fixed.

“[This initiative] reflects the need for insurance companies to have service centres to support policyholders on the mainland,” Yiu said.

Hong Kong regulations require mainland visitors to be in the city when buying insurance policies.

Last year, almost 34 million people visited Hong Kong, including more than 26.8 million from the mainland, according to the Hong Kong Tourism Board. In 2022, a mere 604,564 people visited the city during the pandemic.

Consumer spending during the Lunar New Year holiday has been encouraging, and will help the insurance industry, said Kenrick Chung, director of Ben. Excellence Consultancy, an insurance broker in Hong Kong.

“If other factors remain unchanged, we expect the trend for mainland visitors coming to buy policies in Hong Kong will continue in the coming year.”

Millions in China inspired by drastic transformation of actress Jia Ling swoon over uplifting theme song of her box office hit ‘You Only Live Once’

https://www.scmp.com/news/people-culture/china-personalities/article/3252447/millions-china-inspired-drastic-transformation-actress-jia-ling-swoon-over-uplifting-theme-song-her?utm_source=rss_feed

The physical transformation of famous Chinese director and actress Jia Ling from a bubbly, full-figured personality to a svelte, sexy icon, combined with the release of the theme song from her hit movie has wowed the mainland public.

Jia’s latest film, Re La Gun Tang, or You Only Live Once, which made its debut on February 10, has taken in 2.8 billion yuan (US$390 million) at the mainland box office.

This makes it the highest-grossing film in China over the eight-day Spring Festival holiday, Jimu News reported.

According to the China Film Administration, the total box office take for movies in the country during the holiday period exceeded a record eight billion yuan and attracted 163 million people to cinemas nationwide.

During the making of the film about a jobless and obese woman who “found her true self” after taking up boxing, Jia first added 20kg in weight before slimming down by 50kg within a year.

On February 18, Jia released the movie’s theme song There is Still Time for Everything on Weibo.

“This is the first song I wrote the lyrics for. It also says what I always wanted to say, that there is still time for everything, remember to love yourself,” Jia said.

In the MTV for her song, she sings a duet with her old self.

“It’s too late to do anything. After all, my life has passed the half schedule. I can’t make any changes, until, perhaps, the next life,” the previous version Jia sings at the beginning of the song.

This is followed by the all-new Jia singing: “There is still time for everything. You are the most beautiful in the world. Don’t try to fit yourself into those so-called rules. Don’t think of changing something.”

At the end of the song, the two Jias performed the chorus: “The world has been loving you all the time. You should cherish the future yourself and start to love yourself right now.”

The song has been hugely popular on mainland social media.

It has received 500,000 likes on Weibo and more than 2 million on Douyin.

“Sister, I am your die-hard supporter. From a crosstalk comedian to film actress, to director and song lyrics writer, you are so talented!” Said one online observer.

“I was moved to tears when I saw Jia Ling in the yellow evening dress and with long wavy hair. She is pretty!” Another person said, adding: “I know you worked very hard in the past year. I really love you. Your smile heals me.”

“Now you don’t need to imitate others. You are the most awesome heroine,” wrote another person.

Jia is the world’s highest-grossing female movie director, according to Variety Magazine.

Her first movie Hi, Mom, also hit the big screen over the Lunar New Year holiday period in 2021 and took in five billion yuan (US$700 million) at the box office. You Only Live Once is Jia’s second film as a director.

Jia has a huge fan base in China thanks to her upbeat personality and ability to relate to people. Audiences described her previous larger-than-life appearance as “adorable”.

China’s economic reforms hinge on creative and courageous changes, state media says in warning of a ‘wasted opportunity’

https://www.scmp.com/economy/china-economy/article/3252456/chinas-economic-reforms-hinge-creative-and-courageous-changes-state-media-says-warning-wasted?utm_source=rss_feed

China must put the economic onus on better implementation and coordination in reforms to address deep-rooted issues and energise growth, according to fresh calls in state media.

Effective and targeted reforms are essential to stimulate the vitality of all market participants, the state-run Economic Daily said in a front-page commentary on Monday, signalling Beijing’s amped-up emphasis on reform to bolster the nation’s economy.

The calls came amid market expectations for new policies on further reform to be rolled out at the delayed third plenum. This party meeting typically takes place every five years and lays out China’s development strategy and priorities.

The meeting, which would have been held in autumn if the tradition of past decades were followed, is widely expected to address some of the country’s economic woes, including improving business confidence and transforming the ailing real estate market. When exactly it will be convened has not yet been announced.

‘A flag into which all solutions can fit’? China’s provinces map out growth aims

The world’s second-largest economy has experienced a bumpy recovery since dropping its zero-Covid policy in December 2022. Despite a 5.2 per cent growth rate in 2023, the economy has yet to lift market sentiment amid a slew of challenges including job and income uncertainties, geopolitical tensions with the West, and deflation concerns.

Calling reform “the fundamental driving force of China’s modernisation”, the newspaper warned that it should “avoid wasting the opportunity for reform due to inaction and slackness”.

Efforts must continue to be focused on breaking free of shackles in the pursuit of a high-standard market economy, implementing deeper regional integration, and opening up the economy to a “higher level”, it said, reiterating some of Beijing’s often-repeated but vague dictates from recent years.

The commentary followed a State Council meeting on Sunday, when Premier Li Qiang urged government officials to solve issues with reformative methods.

They should “have the courage to break stereotypical thinking patterns and path dependence” and make their work more creative and trendsetting, he said.

In preparation for the third plenum, some local-level authorities have pledged to “emancipate the mind”, a famous slogan from Chinese reformist leader Deng Xiaoping in the late 1970s.

In the central province of Hunan, a movement is under way to help officials change their mindsets on work, according to a recent directive from provincial authorities.

Spanning from early February to late March, the initiative aims to address conceptual issues that are prevalent among officials in their push for economic development, including an obsession with growing the gross domestic product, market segmentation and a tendency to engage in reckless borrowing and regional protectionism.

And it said authorities should abandon the practice of “solely relying on resource and capital investment to stimulate economic development”, and work to “target obstacles that affect business environment”, such as arrears to private companies.

Chinese entrepreneurs express awe and fear of OpenAI’s Sora text-to-video generator, as US sanctions weigh on AI race

https://www.scmp.com/tech/tech-trends/article/3252470/chinese-entrepreneurs-express-awe-and-fear-openais-sora-text-video-generator-us-sanctions-weigh-ai?utm_source=rss_feed

China’s business and technology communities are expressing both excitement and concern about OpenAI’s latest achievement in generative artificial intelligence with its Sora text-to-video model, amid rising competition in this area and potential constraints from US-China trade tensions.

One business leader called Sora a “Newton moment”, noting how the AI video generation tech learns using the laws of physics. Another noted that the Microsoft-backed start-up behind the model could already be working on other “secret weapons” that could further widen the gap between China and the US in the field owing to US export restrictions on semiconductors and other core components needed for AI applications.

Yin Ye, CEO of genomics giant BGI Group, said that when OpenAI launched ChatGPT in 2022, Chinese AI rivals felt confident that they could catch up “because the focus was on language and text only”. Sora proves that “the digital world can truly be twinned with the laws of physics in the real world”, he added in a video he posted on Saturday to his channel on Tencent Holdings’ WeChat.

“I’d like to compare this to the Newton moment of AI development,” Yin said.

Chinese smartphone vendors from Meizu to Oppo step up AI integration in devices

Zhou Hongyi, chairman and CEO of 360 Security Technology, said on the microblogging site Weibo that the gap between China and the US in AI development “may be bigger” if OpenAI is working on other “secret weapons”.

Zhou estimated that China’s best large language models (LLMs), the tech that powers AI tools like ChatGPT, “have neared the level of GPT-3.5, but there is still a 1.5-year gap from GPT-4”. OpenAI launched GPT-4, its text generation model, in March 2023.

Some Chinese entrepreneurs say they do not want to overstate Sora’s capabilities.

“Given the demo videos provided by Sora, it hasn’t achieved great breakthroughs in understanding [the world],” said Fang Han, CEO of game developer and publisher Kunlun Tech, in an interview with government-run Shang Securities News.

“The gap between Sora and China’s home-developed text-to-video tools isn’t as big as in the LLM sector,” he added.

Domestic investors appear to have taken the news of Sora’s arrival as a positive sign for the market. The Sora Index – consisting of 49 tech, entertainment and media companies listed in Shanghai and Shenzhen that could be impacted by the AI model compiled by financial information provider Wind – soared 11.4 per cent on Monday, the first trading day after the Lunar New Year holiday.

The market sees opportunity in generative AI development. The fast-growing LLM and generative AI sector “will provide a strong impetus to the growth of computing power in China and the world”, Ping An Securities said in a report published on Monday. The finance giant added that industries including computing power, algorithms and cybersecurity will all benefit.

However, Ping An warned that there may be “supply chain risks” if the US continues to restrict chip exports to China. The sanctions “may accelerate the maturity of the domestic AI chip industry”, but “home-grown alternatives may fall short of expectations”, the report said.

BGI’s Yin also questioned whether China has enough time to catch up given “the unfavourable background of decoupling and supply chain disruptions”.

Washington has blocked Chinese companies from accessing the world’s most advanced semiconductor tools through escalating restrictions on exports of such products that use US-origin technology. In October, the US again tightened those restrictions, blocking the mainland’s access to graphics processing units (GPUs) that Nvidia had specifically designed for Chinese clients in response to earlier curbs.

As such, the US chip giant has developed three new data centre GPUs – the H20, L20 and L2. Nevertheless, US Commerce Secretary Gina Raimondo has warned that Washington will take a dim view of any workaround solutions targeted at the mainland.

China cuts key mortgage rate for first time since June to prop up economy

https://www.scmp.com/economy/economic-indicators/article/3252499/china-cuts-key-mortgage-rate-first-time-june-prop-economy?utm_source=rss_feed

China on Tuesday cut a key reference rate for mortgage loans, as policymakers attempt to stabilise the crisis-hit property market as well as the national economy.

The five-year loan prime rate (LPR), which commercial banks use as a benchmark to adjust their mortgage rates, was lowered from 4.2 to 3.95 per cent, said the People’s Bank of China.

The central bank last cut the rate by 10 basis point in June.

‘New productive forces’: empty rhetoric, or engine for China’s future growth?

The move is set to further lower household burdens and also boost home purchases.

China’s housing mortgage loans totalled 38.2 trillion yuan (US$5.3 trillion yuan) at the end of December, government data showed.

Meanwhile, the one-year LPR – an indication of market lending rates – remained unchanged at 3.45 per cent.

More to follow …

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China’s economic growth at risk from societal stagnation, scholar warns of the ‘most significant crisis of our time’

https://www.scmp.com/economy/china-economy/article/3252459/chinas-economic-growth-risk-societal-stagnation-scholar-warns-most-significant-crisis-our-time?utm_source=rss_feed

China’s economic growth is under risk of being hollowed out by formalism, bureaucracy and a growing sense of resignation from the bottom up, according to a prominent scholar from Wuhan University.

“In various sectors, there is a trend towards superficiality rather than substance, leading to societal stagnation, which constitutes the most significant crisis of our time,” Lu Dewen, a sociology professor specialising in rural governance, said in a WeChat post on Sunday following a recent field trip to rural areas in China.

“Grass-roots governments prioritise reporting to higher authorities rather than addressing real issues.

“Village-level organisations prioritise meeting superior directives over serving the community, and even when they do serve the community, it is often merely to put on a show for higher officials.”

He also mentioned that during a reunion with middle school classmates, who are public servants, teachers, doctors, businesspeople and state-owned firm employees, they all expressed concerns over the trends of formalism at work.

The formalism trend has also sullied academia, which is now subject to various metrics and standards, Lu said.

“Universities are touting innovation talent cultivation loudly, but the specific measures often only encourage low-level repetition,” he added in the WeChat post which has since been removed, having been widely reposted.

The political climate shift is also accompanied by China’s sluggish economic recovery, with a growing sense of pessimism and resignation permeating throughout society.

Factories in industrial estates are generally operating below capacity, with several experiencing a significant decrease in profit margins despite having numerous orders, Lu said.

He added that after witnessing poor domestic demand, some factories have turned to foreign trade with countries involved with China’s Belt and Road Initiative, which could be satisfactory but also filled with uncertainties, in terms of collecting payments.

“As long as migrant workers are willing to work, finding employment isn’t a problem, but discussions about wages are off-limits,” Lu said.

“In previous years, workers could protest if overtime pay was not issued in full, but now, any resistance prompts factories to immediately pay up and let them go.”

Addressing the causes likely requires intervention from the highest levels of leadership, said Peng Peng, executive chairman of the Guangdong Society of Reform, a think tank connected to the provincial government.

“Currently, the reluctance of officials to take responsibility has fostered a tendency towards neglecting tangible outcomes for symbolic gestures,” Peng said.

“It is imperative to emphasise competence in performance evaluations rather than blindly adhering to political correctness.

“If the economic growth doesn’t return after the ‘two sessions’, and pressure remains high, there might be a shift in policies. Otherwise, persisting on the same path could lead to a bleak and potentially dire outcome.”

The “two sessions”, China’s annual parliamentary meetings, is set to take place from March 5.

Outstanding and often concealed debts have also burdened grass-roots governments, with bureaucracy and political performance seen to be exacerbating the dilemma.

Some lower level governments are struggling to maintain operations, with officials unable to fulfil performance targets, while in some villages, salaries for officials cannot be paid, Lu added.

But despite the lack of funds, villages are still being tasked with onerous and bureaucratic responsibilities.

“The most frustrating aspect for villages is that all tasks prioritise form over substance, and there’s a tendency to unnecessarily complicate matters by adding unnecessary steps to each task,” he added.