• China and India hold further round of border talks along disputed frontier
• China’s foldable smartphone shipments more than double in 2023, as Huawei continues to lead the growing handset segment
• EU agrees to blacklist Chinese firms for first time in latest Russian sanctions package
• China rails against EU’s train subsidy probe – will relations be thrown off-track?
• China debuts latest Z-10ME attack helicopter at Singapore Airshow
• In the loo-vre: helpful Chinese tourist returns schoolbooks left in Paris cafe toilet by mainland student
• US moves against cybersecurity ‘risk’ posed by China-made port infrastructure
• Red Sea crisis sees China’s brisk business in Africa waver under high shipping costs amid Houthi attacks
• Bank of East Asia cut its exposure to China’s troubled commercial property sector last year
• China’s Wang Yi urges France to play ‘constructive role’ as Ukraine and trade woes cloud Beijing’s EU ties
• Electric vehicles: Chinese robot chargers start-up GGSN eyes investors, international expansion via new Hong Kong facilities
• Cost-conscious Chinese tourists skip Australia for visa-free countries in Southeast Asia
• China needs to do more on ‘silent crisis’ of debt, says World Bank official
• Woman without legs banned from boarding China plane as airline forbids people in wheelchairs with no companion from travel, triggering public outrage
• Malaysian beautician detained in China for carrying friend’s bag filled with TCM pills
• China affirms Fukushima stance in rare ministerial meeting for Japan’s new envoy
• Siemens boss demands EU action to fend off ‘cheap’ Chinese wind power imports
• Chinese man arrested in Australia faces extradition to US over North Korea tobacco smuggling
• Taiwan chases Chinese coast guard boat away from frontline islands amid heightened tensions
• Just another Chinese city? 3 reasons you can’t write off Hong Kong
• US-China relations: how Washington’s Pacific funding crunch ‘plays right into’ Beijing’s hands
• China-Australia relations: writer Yang Hengjun, jailed on the mainland, won’t appeal suspended death sentence
• China’s new financial regulator pledges transparency to bring investors back from the brink

China and India hold further round of border talks along disputed frontier

https://www.scmp.com/news/china/diplomacy/article/3252749/china-and-india-hold-further-round-border-talks-along-disputed-frontier?utm_source=rss_feed

China and India completed another round of their marathon border talks this week, the two sides announced on Wednesday.

The 21st round of corps commander-level talks were held on Monday at the Chusual-Moldo meeting point on the Line of Actual Control.

Monday’s negotiations sought a “complete disengagement” along the line in Eastern Ladakh, according to India’s Ministry of External Affairs.

China’s Ministry of Defence said the commanders had agreed to look for a mutually acceptable solution “at the earliest possible time” and to “turn the page” – echoing language used during separate talks in November.

China described the talks as “positive, in-depth and constructive”, while India said they had been “held in a friendly and cordial atmosphere”.

Both sides said they had agreed to keep communicating through the relevant military and diplomatic mechanisms. In the interim, they were committed to maintaining peace on the ground in the border areas.

The two countries have a long-running border dispute over a territory that runs for thousands of kilometres along the Himalayas, including a border war in 1962.

Since then, there have been repeated stand-offs and clashes along the Line of Actual Control, a loosely defined ceasefire line that stretches for 3,200km. However, they have agreed not to use firearms to avoid escalation.

The current round of talks began in May 2020, focusing on disputes along the western section of the line between Chinese-controlled Aksai Chin and Indian-controlled Eastern Ladakh.

Unreported border clashes between Chinese, Indian troops took place in 2022

But just a month after the first round of talks, the deadliest conflict between China and India in 45 years broke out in the Galwan Valley in June 2020, when at least 20 Indian soldiers and four Chinese were killed in a skirmish.

Since then, the two sides have staged regular exercises in the region and built up troops and infrastructure, but have also emphasised the need to continue talking to ensure peace along the disputed frontier.

China’s foldable smartphone shipments more than double in 2023, as Huawei continues to lead the growing handset segment

https://www.scmp.com/tech/tech-trends/article/3252718/chinas-foldable-smartphone-shipments-more-double-2023-huawei-continues-lead-growing-handset-segment?utm_source=rss_feed

Foldable phone shipments in mainland China more than doubled last year in spite of overall weakness in the world’s largest smartphone market, with Huawei Technologies remaining the country’s top vendor in this growing handset segment.

Mainland shipments of foldable smartphones reached 7.01 million units last year, up 114 per cent from 3.2 million in 2022, according to a report on Tuesday by tech market research firm IDC.

That marked the fourth consecutive year of triple-digit annual growth for this segment – including clamshell-type handsets that flip open vertically and those designed like a booklet that expand horizontally into tablet form – since the first such models were introduced on the mainland in 2019, IDC data showed.

Shenzhen-based Huawei led the segment with a 37.4 per cent market share, driven by demand for its popular Mate X5 model launched in September. Major rivals Oppo and Honor, formerly Huawei’s budget smartphone brand, had an 18.3 per cent and 17.7 per cent share, respectively.

Samsung Electronics, which accounted for more than half of global foldable phone shipments last year, ranked fourth on the mainland with an 11 per cent share, according to the IDC report.

The segment’s growth was driven by both hardware and software improvements in various foldable phone models, along with lower prices that helped encourage more consumers to buy these handsets, according to the report.

Strong foldable phone demand was a bright spot in an otherwise sluggish domestic market, which saw handset shipments decline 5 per cent year on year to 271.3 million units – the lowest annual volume in a decade, according to IDC – amid the country’s shaky post-pandemic economic recovery.

Foldable models will remain a focus of many smartphone makers this year, according to IDC analyst Guo Tianxiang. “It is important to note that features around ‘thinness’ and ‘lightness’ are increasingly influencing consumers’ choice of foldable smartphone brand,” Guo said.

While demand for lower-priced and handy clamshell-type foldable phones remained strong, IDC data showed that booklet-style models gained more ground on the mainland. These booklet models, such as Huawei’s popular Mate X5, accounted for 68.1 per cent of the segment, up from 57.7 per cent in 2022.

Despite their premium price tag, these booklet-type foldable phones, which provide a tablet-sized display when fully opened, have become the preferred model for businesspeople who work remotely.

Foldable phones, however, still make up a small fraction of overall smartphone shipments on the mainland and globally. Apple, which unseated Samsung as the world’s No 1 smartphone vendor in 2023, has not released a foldable model.

But that has not stopped the iPhone maker from remaining “undisputed leader” in the global premium smartphone market, where handsets are priced from US$600, with a dominant 71 per cent share last year, according to a report from Counterpoint Research last month.

Apple is said to be developing prototypes for a clamshell iPhone, according to a report earlier this month by online tech media outlet The Information, which cited an anonymous source.

EU agrees to blacklist Chinese firms for first time in latest Russian sanctions package

https://www.scmp.com/news/china/diplomacy/article/3252736/eu-agrees-blacklist-chinese-firms-first-time-latest-russian-sanctions-package?utm_source=rss_feed

The European Union has for the first time agreed to blacklist Chinese companies as part of its attempts to hobble Russia’s military.

On Wednesday ambassadors from the union’s 27 member states greenlit its 13th package of sanctions since the Russian invasion of Ukraine began almost two years ago.

As part of this, three mainland Chinese entities and one registered in Hong Kong will be barred from doing business with European counterparts. They stand accused of helping Russian buyers access goods with dual military and civilian uses that were made in Europe, but banned from being exported to Russia by the EU.

Hungary, a close partner of Beijing, decided not to veto the package, after its passage was delayed last week.

A diplomat familiar with the discussions said “Hungary had requested more time” last week.

White House promises ‘major sanctions’ on Russia over Alexei Navalny’s death

The diplomat continued: “In the past days, we had received clear signs from Hungary that they would not oppose the sanctions’ package. Coreper [the ambassadors’ group that passed the measures] approved the package very quickly, without discussion, except one statement from Hungary.”

Lawyers will now prepare a text for final adoption before February 24, the second anniversary of the start of the war.

The three mainland Chinese companies are Guangzhou Ausay Technology Co Limited, Shenzhen Biguang Trading Co Limited, Yilufa Electronics Limited. The Hong Kong company is RG Solutions Limited.

They are part of a group of 193 named entities on the latest round of sanctions, including firms from Turkey, Kazakhstan, North Korea and India, bringing the total number blacklisted to almost 2,000.

“I welcome the agreement on our 13th sanctions package against Russia. We must keep degrading [Vladimir] Putin’s war machine,” said European Commission President Ursula von der Leyen.

For China, it marks the end of a long quest to prevent its companies from being blacklisted over the Ukraine war.

Last summer, officials removed five Chinese entities from a previous sanctions package after intense lobbying from diplomats in Europe and assurances the firms would stop supplying Russia.

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.

The Chinese mission to the EU did not immediately respond to a request for comment.

In an interview last June, after the Chinese companies had been removed from the list, Beijing’s ambassador to the EU Fu Cong said “we’re glad that the Chinese companies have been removed from the list, and it shows that dialogue can work”.

The European Commission last year introduced a nuclear option that would allow the bloc to target countries as a whole, rather than individual entities, should there be persistent flouting of sanctions.

However with EU unity on Ukraine fraying at the seams, particularly on sanctions, it appears unlikely that the unanimity required to adopt such a measure will be reached.

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

While Hungary did not block the latest package, its officials have made clear that they disagree with it.

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

China rails against EU’s train subsidy probe – will relations be thrown off-track?

https://www.scmp.com/economy/china-economy/article/3252712/china-rails-against-eus-train-subsidy-probe-will-relations-be-thrown-track?utm_source=rss_feed

A recently unveiled probe by the European Union into a Chinese state-owned train maker – the first in-depth examination conducted under the EU’s newly implemented Foreign Subsidies Regulation – could inject more uncertainty into relations and signify an intensification of efforts to execute Brussels’ de-risking strategy.

Friday’s move against CRRC Qingdao Sifang Locomotive – a subsidiary owned by CRRC Corporation, the world’s largest rolling stock manufacturer – may bring some “roughness” to the bilateral trade and investment relationship, analysts said, although the multi-decade trade history between China and the bloc is likely to provide some cushion against drastic changes.

But the timing suggests more action may be forthcoming, as the investigation was launched only five months after the EU began a separate inquiry over subsidies received by Chinese electric vehicle producers.

The contract which prompted the EU probe was issued by Bulgaria’s Ministry of Transport and Communications. It covers the purchase of 20 electric “push-pull” trains, as well as maintenance and staff training. The tender had an estimated value of €610 million (US$658.4 million), and CRRC Qingdao Sifang’s bid was €300 million – 46.7 per cent lower than projections from Bulgarian railways and 47.5 per cent lower than the nearest competitor, according to the Financial Times.

Per the regulation, companies are “obliged” to provide notification for any public procurement tenders with a contract value of more than €250 million.

CRRC Qingdao Sifang submitted its notice in full on January 22. The regulation has a statutory mandate of 110 days to deliver a result, meaning the verdict will be known no later than July 2. The strictest consequences under the terms of the regulation would bar the company from fulfilling the contract.

“The EU has a clear direction of setting up rules … to protect its own competitive edge and ensure economic safety,” said Cui Hongjian, a scholar at the China Institute for International Studies.

“Both sides will have some back-and-forth bargaining. They will discuss, negotiate – even go into legal proceedings.”

China and the EU, historically major trading partners, are undergoing changes in their relationship as the bloc attempts to limit its reliance on Beijing.

Ties have worsened in recent years. Tit-for-tat sanctions related to Beijing’s policies in the Xinjiang Uygur autonomous region, along with other issues, have stalled the ratification of the Comprehensive Agreement on Investment, a landmark opening of China’s market to European business.

Since last year, both sides have taken steps to ease tensions, but frictions over new energy have prevented a total thaw.

Europe’s back-to-back investigations are also happening in a politically charged environment, with this year’s elections for the European Parliament and the White House likely to motivate candidates to take a critical stance on engagement.

As China-EU ‘de-risking’ voices crescendo, why the focus on electric cars?

Stephen Olson, a senior adjunct fellow at the Pacific Forum and visiting lecturer at the Yeutter Institute of International Trade said that the EU and China will continue to be close trading partners for “the foreseeable future” but China will have to “walk a delicate tightrope”.

“[China] will feel the need to respond in kind to any measures taken by the EU, but at the same time, it wants to foster closer trade relations as a bulwark against the EU’s trade policies aligning too closely with those of the US,” he added.

Figures from China’s General Administration of Customs showed that total imports and exports between China and the EU decreased 7.6 per cent to US$782.9 billion in 2023, a contrast to the 2.4 per cent yearly growth to US$847.3 billion recorded in 2022.

“The relatively distant bilateral trade relationship between both sides isn’t due to the investigations, even though China-EU trade recorded constant growth before 2022,” said Ding Chun, director of Fudan University’s Centre for European Studies.

“Since 2016, the EU started rolling out a series of restrictive trade and investment measures towards China related to foreign subsidies and de-risking, which led to an abnormal drop of trade figures last year.”

In 2016, the EU launched an inquiry into Chinese subsidies for steel sold to the bloc after the European Steel Association submitted a claim about the Chinese government subsidising its producers with preferential lending rates and low energy charges.

On Saturday, the day after Brussels launched its CRRC probe, EU competition chief Margrethe Vestager said the bloc is “absolutely willing to use” its suite of trade tools to combat perceived unfair competition from China.

In a response statement issued on Friday, the China Chamber of Commerce to the EU (CCCEU) said that any adoption and application of policy tools “should avoid having a discriminative impact towards foreign companies.”

“Throughout the EU legislative process of the Foreign Subsidies Regulation and its Implementing Regulation, the CCCEU actively participated in public consultations on the draft legislation and the draft implementation rules multiple times,” the statement read.

The business group also noted that it has provided feedback to the European Commission and the EU legislative bodies in several forms, and expressed member companies’ concerns about what it termed unreasonable reporting obligations imposed after the application of the regulation.

Dong Jinyue, a senior economist at BBVA Research, said that it will be a “lose-lose scenario for the EU” if the bloc mirrors the aggressive stance of the US.

“The current main conflict of the international relationship is the China-US competition … The main strategy of the EU is ‘not to take sides’ and to seek its own economic development, as the intrinsic risk of the EU economy is almost zero growth, if not recession,” she added.

Shen Dingli, an international relations scholar based in Shanghai, added that there are many avenues to resolving a dispute, such as the World Trade Organization.

“No matter which way both sides take, the precondition for the EU is to launch a fair inspection that can clarify differences,” he said.

“To clear up contradictions with facts, China should cooperate in the probe [to] help develop better opportunities for bilateral trade and investment.”

China debuts latest Z-10ME attack helicopter at Singapore Airshow

https://www.scmp.com/news/china/military/article/3252744/china-debuts-latest-z-10me-attack-helicopter-singapore-air-show?utm_source=rss_feed

China’s latest Z-10ME attack helicopter is on display at the Singapore Airshow, the first time it has featured in an overseas exhibition.

Analysts said the international debut indicated China was on the lookout for new buyers as global weapons demand soars.

The Z-10 is already in service with the People’s Liberation Army, and is among the helicopter models used in drills on the border with India and near Taiwan.

State-owned Aviation Industry Corporation of China (AVIC), one of the developers of the aircraft, said an upgraded export version was being showcased at the Singapore Airshow, which opened on Tuesday.

The exhibition runs until Sunday and is open to the public over the weekend.

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

This comes about six years after a production-ready version of the multirole attack helicopter was unveiled at a national air show in China. Miniature versions have been showcased within the country as well as overseas, like at the 2017 Paris Airshow.

The new model is designed to provide “fire support” for ground forces, and has improved resistance and attack power, according to the official website of its manufacturer, Changhe Aircraft Industries Corporation (CAIC).

It is equipped with warning systems for laser weapons and missiles, countermeasure systems for electronic and infrared interference, as well as a sand filter on the engine for operations in the desert, the CAIC website said. Performance in altitudes below 100 metres (328 feet) has also been improved.

The medium-sized aircraft can carry 23mm high-explosive incendiary ammunition and a 280kg (617-pound) drop tank, online media Defense News reported, citing the air show magazine.

Pakistan, a key importer of Chinese arms, reportedly bought the model in 2022.

Collin Koh, a senior fellow at the S. Rajaratnam School of International Studies in Singapore, said that China was “definitely seeking to capitalise” on the rising global demand for weapons given the surge in global tensions and conflicts.

This was driving its increased presence at the air show, including aerial weapons, he said.

Along with the Z-10ME, AVIC is also showcasing rocket launchers, GR5 guided rockets, CM-502KG air-to-surface missiles and TY-90 air-to-air missiles at the event.

The Z-10ME is widely seen as a competitor to the US military’s Boeing AH-64 Apache helicopter.

“Given that the Singapore Airshow is one of the premier international aerospace and defence expos, naturally Beijing is interested in promoting its arms sales at the event,” Koh said. “[We might see] China ramping up its presence in defence expos around the world in a bid to grab a larger slice of the global arms market.”

Harry Boneham, a senior analyst at global military intelligence company Janes, said the advantages of the Z-10ME were its reportedly capable platform, “equipped with a range of guided rockets and air-to-air missiles”.

“Additionally, in general one of the key draws for Chinese defence products is the relatively low price-point. Therefore, Z-10ME is likely more affordable than Western alternatives.”

However, its “relatively unproven platforming comparison to the AH-64 Apache” could be a concern, Boneham added.

He said historical purchasers of Chinese equipment, such as countries in the Middle East and Africa, could represent potential future markets for further Chinese platforms.

“Potential buyers for this Chinese-made alternative are likely to be countries which do not have access to Western platforms. Another potential factor driving countries to procure the Z-10ME could be sanctions on Russia, making maintenance and operation of Russian made attack helicopter fleets untenable.”

China’s arms exports dropped from 2018 to 2022 after rising in previous decades, with analysts citing domestic stockpiling needs amid rising geopolitical tensions and production shutdowns during the Covid-19 pandemic.

China’s first home-grown passenger jet C919 – which is seeking European regulatory approval – was also featured at the Singapore event and performed its first overseas fly-by.

In the loo-vre: helpful Chinese tourist returns schoolbooks left in Paris cafe toilet by mainland student

https://www.scmp.com/news/people-culture/trending-china/article/3252519/loo-vre-helpful-chinese-tourist-returns-schoolbooks-left-paris-cafe-toilet-mainland-student?utm_source=rss_feed

A thoughtful tourist from China who went searching for a student who had left his schoolbooks in a cafe washroom during a visit to Paris has delighted mainland social media.

The tourist from Zhejiang province in eastern China, whose Weibo account is @Thurmanmaoyizhi_ was enjoying a trip to the French capital on February 16.

While in a café, a waiter told her he had found two Chinese exercise books in the toilet and hoped she could find the owner.

She shared a video clip in her search for the Primary One pupil called Qin Lang, according to a Sina News report.

In a viral video, she has a conversation with the waiter who is off-camera. When he passes her two exercise books, she looks surprised.

“Are these books yours?” He asks.

“No, no, no, they are not mine. Where did you find them?” She responds, and he tells her they had been left in the toilet and asks if she can return them to their owner.

The name on the cover of the exercise books revealed they belonged to a Primary One pupil called Qin Lang, and when the tourist flicked through the pages she laughed when saw he had not completed his homework.

She understood the boy would be in trouble for not doing the work before the start of the new term, so she bought a pencil and spent an evening answering the questions. She was also curious about whether she knew the answers.

At the airport in Paris as she was about to take her flight home, she filmed herself and said she wanted to return the finished exercise books to the pupil soon.

“You’re welcome,” she says with a big smile.

Her video was soon circulated online, and on February 18, Qin’s uncle saw it.

According to Star Video, he said he was going to tell Qin’s mother and he planned to buy a new set of exercise books for his nephew.

The story has gone viral on mainland social media, with many people leaving comments.

“Hahaha, if the boy forgot his exercise books, he probably wasn’t desperate to complete his homework,” one online observer wrote.

US moves against cybersecurity ‘risk’ posed by China-made port infrastructure

https://www.scmp.com/news/china/diplomacy/article/3252660/us-moves-against-cybersecurity-risk-posed-china-made-port-infrastructure?utm_source=rss_feed

US President Joe Biden and the American coastguard are announcing a series of actions on Wednesday to guard against China’s presence in the country’s port infrastructure.

Biden will sign an executive order to push maritime vessels and facilities to shore up their cybersecurity and mandate the reporting of cyber incidents, according to deputy national security adviser Anne Neuberger.

At a press briefing on Tuesday, Neuberger said the administration will also be investing more than US$20 billion into US port infrastructure over the next five years, including an effort to onshore American crane manufacturing.

Rear Admiral Jay Vann, commander of the United States Coast Guard Cyber Command, told the same briefing that the service will impose cybersecurity requirements on the owners and operators of Chinese-manufactured cranes in the US.

The coastguard – the sole branch of the US military housed under the Department of Homeland Security – will release a plan to establish baseline cybersecurity requirements for the entire marine transport system, he said.

Wang Yi raises Taiwan, trade and anti-Chinese ‘harassment’ in Antony Blinken talks

US officials have been raising alarms that Beijing could remotely operate Chinese-manufactured cranes to disrupt the flow of goods. They are also concerned that data collected from the cranes could reveal information about US military shipments.

Last year, lawmakers wrote several letters to the Homeland Security secretary highlighting the national security risks.

In a letter co-signed by the chairman of the House Select Committee on the Chinese Communist Party, legislators said cranes made by state-owned Shanghai Zhenhua Heavy Industries (ZPMC) made up the vast majority of “ship-to-shore” cranes in the US.

Security risks posed by ZPMC include “cyberattacks, espionage, and supply chain vulnerabilities due to the shared software and interconnectivity among ZPMC cranes operating at our nation’s ports,” the letter said.

Vann told the press briefing that Chinese-manufactured ship-to-shore cranes make up the largest share of the global market and account for nearly 80 per cent of cranes at US ports.

He said the coastguard has already assessed the cybersecurity of 92 Chinese-made cranes out of the “over 200” installed at American ports.

What latest US privacy row says about Washington’s concerns about China

China’s embassy in Washington has called the US concerns about cranes a “paranoia-driven” attempt to impede bilateral trade and economic cooperation.

Beijing is not the only driver of Wednesday’s initiatives. Neuberger said that criminal cyber activity was another motivator behind the administration’s efforts.

Biden’s executive order will broadly expand the coastguard’s authorities to respond to cyber threats, including by giving it control over the movement of vessels that present a known or suspected cyber threat.

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Red Sea crisis sees China’s brisk business in Africa waver under high shipping costs amid Houthi attacks

https://www.scmp.com/economy/global-economy/article/3252694/red-sea-crisis-sees-chinas-brisk-business-africa-waver-under-high-shipping-costs-amid-houthi-attacks?utm_source=rss_feed

Avoiding attacks in the Red Sea has raised the cost of business for Chinese firms in East Africa, which borders the embattled waterway, and shaken the production of companies that cannot afford the more costly alternative transport options, analysts said.

Chinese traders are gingerly eyeing the use of circuitous air, land and sea routes for safety, hiring risk-tolerant so-called feeder shipping lines or producing less until the attacks by Houthi militants stop.

“Chinese companies with a substantial presence in African markets are facing heightened uncertainties and complexities as they navigate these disruptions, prompting a re-evaluation of their shipping strategies and contingency plans to mitigate the impact on their operations,” said Gary Lau, chairman of the Hong Kong Association of Freight Forwarding and Logistics.

Houthi militants have launched attacks in the Red Sea shipping lanes around Yemen, which lies along the waterway opposite East Africa, since the Israel-Gaza war began in October, forcing some shipping firms to suspend transits through the Suez Canal.

China has particular exposure to Africa as its fifth-largest source of foreign direct investment stock in 2021, United Nations Conference on Trade and Development data showed.

Its investments in Africa reached US$1.8 billion in the first half of 2023, up by 4.4 per cent year on year, the Ministry of Commerce said in October.

China is also Africa’s biggest trading partner, the state-owned news outlet said.

Chinese foreign direct investment in Africa has grown steadily from US$75 million in 2003 to US$5 billion in 2021, according to the China Africa Research Initiative at Johns Hopkins University.

Along the Red Sea, port operator China Merchants Group signed a US$350 million agreement in 2020 to modernise the strategically important Port of Djibouti.

Chinese investors have signed contracts to build two airports and a pipeline to send water from Ethiopia to Djibouti, while a Chinese-funded railway from Djibouti to Ethiopia opened in 2018.

In the neighbouring coastal nation of Eritrea, Chinese invest in the mining of gold, copper ore and potassium-rich potash.

A “suspension of shipping” in the Red Sea has impacted Djibouti, Ethiopia, Eritrea and Sudan, according to He Liehui, vice-president of the African-Chinese People’s Friendship Association.

The geographic locations in East Africa and the “distribution” of world shipping routes mean shippers have no way to detour around the Cape of Good Hope at the southern tip of Africa, He said.

They are also seen to lack the advanced road and rail systems found elsewhere in the world.

Firms eye Plan B ahead of Lunar New Year as Red Sea crisis roils supply chains

“The import and export of trade goods and raw and auxiliary materials, for project construction, of many Chinese-funded enterprises in those countries have been severely affected by the Red Sea crisis, which has triggered a chain effect and caused suspension of production,” He said in an interview with domestic news website Guancha last week.

Chinese shippers face higher cargo rates, a lack of empty containers and decisions on whether to use land routes from China to Europe, said Sunny Huang, a director at Fitch Ratings in Hong Kong.

Port operators have also felt the impact, although to a lesser degree, on their operating efficiency and costs, Huang added.

But while Chinese businesses in East Africa have to pay more, they do not need to stop shipping outright because of the Red Sea problem, said Christian Roeloffs, chief executive officer of German container logistics platform Container xChange.

Shippers can still hire feeder ships in India, Pakistan or the Persian Gulf that do not mind the risk of crossing the Red Sea into Africa, Roeloffs added.

But the transfer of cargo from Chinese ships to feeder vessels in places such as Kolkata in India or Karachi in Pakistan adds one to two weeks and US$100 to US$200 per box for every offload from one vessel or load onto another, he said.

Feeder lines, which range from three to more than 100 vessels, were popular during the coronavirus pandemic when world shipping demand surged, Roeloffs added.

Some Chinese shippers are exploring ocean routes around the Cape of Good Hope or air and rail combinations – a popular option for e-commerce transport – Lau said.

Some cargo also reaches Dubai by sea from China before continuing by costly air routes to its final destinations.

“While we expect some stabilisation, the overall outlook underscores the need for adaptive, agile strategies to mitigate the impact of ongoing disruptions,” Lau said.

Huang from Fitch expects supply chain disruptions caused by the Red Sea issue to be “temporary”, with container shipping capacity set to grow within the year.

But a prolonged disruption in the Red Sea could eventually benefit China’s investment in Africa by shifting it away from shipping-linked infrastructure, such as ports, and toward higher value labour-intensive manufacturing, said T.L. Yip, an associate professor in the Department of Logistics and Maritime Studies at The Hong Kong Polytechnic University.

“In Africa, China’s investments in infrastructure and then labour-intensive manufacturing are repeating the China model in the 1990s through the 2010s,” Yip said.

“The Red Sea disruption, if it is expected to last long, will encourage the development of labour-intensive manufacturing in Africa.”

Bank of East Asia cut its exposure to China’s troubled commercial property sector last year

https://www.scmp.com/business/banking-finance/article/3252692/bank-east-asia-cut-its-exposure-chinas-troubled-commercial-property-sector-last-year?utm_source=rss_feed

Bank of East Asia, Hong Kong’s largest family-owned lender, said its non-performing loans ratio in mainland China dropped by 0.47 percentage points to 2.68 per cent at the end of 2023 compared with the first half, as its overall exposure to troubled Chinese property developers shrank.

The bank’s debt in the country’s commercial real estate sector has come down to 7.7 per cent of total lending, just over half what it was two years ago, and is expected to continue downwards. Yet BEA still made significant provisions for bad loans.

“We continued efforts to improve asset quality, notably exposure to the Chinese commercial real estate sector, including both state-owned and foreign enterprises,” said co-chief executive Adrian Li in a teleconference about BEA’s financial results on Wednesday.

Another 1 per cent decrease in the proportion of commercial property debt can be expected in the next year, the bank said.

“Falling sales and refinancing difficulties have continued to present challenges to mainland developers,” Li said. “With further downgrades, additional provisions were made in the second half. Full-year impairment losses on financial instruments reached HK$5.5 billion (US$ 700 million).

“Some 82 per cent of these provisions were related to the Chinese [commercial property] sector.”

The bank took a proactive approach to extending more loans covered by collateral in the past year, especially in high risk sectors.

“The group’s coverage ratio without collateral declined to 35.8 per cent from 50.4 per cent at 2022 year-end,” said Dawn Tao, BEA’s chief financial officer. “A few of our new impact loan accounts in 2023 are collateralised. So significant provisions were not necessary.

“Loans with higher uncertainties over repayment were written off. The remaining loans in our portfolio have lower coverage, but better recoverability prospects.”

Meanwhile, the bank’s exposure to Hong Kong’s commercial real estate sector decreased to 13.7 per cent of the group’s total loans, from 14.5 per cent in the previous year.

“We are very selective in extending new loans to the sector under current market conditions,” said Tao. “Average loan to value ratio is around 50 per cent. And our collateral is diversified across various property types. We are satisfied with the buffer for this exposure, even under stressed conditions.”

BEA’s net profit dropped 5.5 per cent to HK$4.12 billion for the whole of 2023, from HK$4.36 billion the previous year, missing the HK$5.53 billion expected by analysts polled by Bloomberg.

“Excluding two extraordinary items booked in 2022, namely the gain recorded on sale of our insurance subsidiary and the one time shared profit from an associate, profit before tax would have recorded a 74.6 per cent year-on-year increase,” Li said.

BEA benefited from widened margins thanks to the high interest rate environment. It hopes to maintain growth by diversifying revenue sources, developing cross-border business and enhancing operational efficiency.

It announced an additional HK$500 million budget to continue its share buyback programme, which started in the second half of 2022.

BEA is betting on Hong Kong’s expanding role in the Greater Bay Area to tap the growing affluence and potential for wealth management in southern China. Last month, the bank opened its 18-storey BEA Tower in the Qianhai special economic zone in Shenzhen.

The new office building, with a gross floor area of 460,000 square feet, houses the bank’s Qianhai branch and also a fintech innovation centre called Beast – which refers to BEA and start-ups – that supports innovative companies in Qianhai and Shenzhen.

China’s Wang Yi urges France to play ‘constructive role’ as Ukraine and trade woes cloud Beijing’s EU ties

https://www.scmp.com/news/china/diplomacy/article/3252700/chinas-wang-yi-urges-france-play-constructive-role-ukraine-and-trade-woes-cloud-beijings-eu-ties?utm_source=rss_feed

China’s top diplomat called on France to play a “constructive role” in its relations with the European Union and to work with Beijing as a “stabilising force” in the world as he visited the country for strategic talks.

Chinese Foreign Minister Wang Yi met Emmanuel Bonne, foreign affairs adviser to French President Emmanuel Macron, for strategic dialogues in Paris on Tuesday.

Wang also held a separate meeting with Macron on the sidelines of the strategic talks, which are typically held once or twice a year.

“As China and France are both major independent countries, permanent members of the United Nations Security Council and important forces in the multipolar world, [we] should strengthen strategic coordination, deepen strategic cooperation, and make contributions to promoting global peace and stability,” Wang told Macron, according to the Chinese foreign ministry.

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

“China appreciates that France insists on being [an] independent [force] and hopes that France will continue to play a constructive role in the healthy and stable development of China-EU relations, enhance mutual trust, promote the integration of interests, and jointly serve as a stabilising force in today’s world.”

Macron, quoted by the Chinese foreign ministry, said France adhered to “strategic autonomy” and was willing to strengthen coordination with China to safeguard peace and stability in the face of global challenges.

Macron has championed strategic autonomy for the EU – the idea that the bloc should become more powerful on the world stage and operate independently in a wide range of areas, from military operations to industrial policy. He has urged the bloc not to become a “vassal” of the US or get caught up in escalating tensions between Beijing and Washington.

Before arriving in France, he visited Spain and attended the annual Munich Security Conference in Germany, where the Ukraine war dominated the agenda.

The Elysee Palace said Macron and Wang discussed the conflict during their meeting and that they shared the same goal of “contributing to peace”, according to broadcaster France 24.

According to Macron’s office, the French leader told Wang that he hoped China would “pressure Russia to return to the negotiating table”.

Russia’s invasion of Ukraine, which is about to enter its third year, has long clouded China’s relations with most EU countries as Beijing has maintained close ties with Moscow despite taking a neutral stance on the war.

EU’s plans for tougher China stance risk coming off the rails

During the Munich security conference, Wang said Beijing’s relations with Russia did not target any third party. Later in a separate meeting with his Ukrainian counterpart Dmytro Kuleba, Wang reaffirmed that China would not supply weapons to either side of the conflict.

Macron, along with other European leaders, attempted to reassure Ukrainian President Volodymyr Zelensky of Brussels’ defence commitment to his country amid concerns over stalled aid from the US. France and Germany both signed security pacts with Ukraine in the wake of the Munich conference promising long-term funding for Kyiv.

In Munich, Wang pitched China as a “stabiliser” – not just in conflicts but also on global economic growth, as trade disputes continue to loom over ties between Beijing and Brussels.

Last month, China announced an anti-dumping investigation into brandy from the EU. France is a major producer of the liquor. The measure, which was supported by Paris, was seen as retaliation for Brussels’ probe into Chinese electric vehicles.

The EU has long complained about a €400 billion (US$430 billion) trade deficit with China and is weighing various measures to address the trade imbalance.

In talks with Macron, Wang said China would continue to open its market to France, adding that the country hoped France would also create a fair and just business environment for Chinese companies.

Despite strained ties, China appears to be trying to improve relations with the EU amid its rivalry with the US.

Last year, China waived entry visas for several European countries, including France, in an effort to boost exchanges with the continent.

In Wang’s talks with Bonne, both sides agreed to increase direct flights and strengthen cooperation in climate change, clean and nuclear energy and artificial intelligence.

Electric vehicles: Chinese robot chargers start-up GGSN eyes investors, international expansion via new Hong Kong facilities

https://www.scmp.com/business/companies/article/3252664/electric-vehicles-chinese-robot-chargers-start-ggsn-eyes-investors-international-expansion-new-hong?utm_source=rss_feed

Guoguangshunneng (Shanghai) Energy Technology (GGSN), a mobile electric vehicle charging start-up partly owned by New World Group, is in talks to set up research, product development and marketing facilities in Hong Kong.

The two-year-old Shanghai-based firm, which is seeking to commercialise its autonomous EV charging robots, is in discussion with Hong Kong Science and Technology Parks Corporation, said Kevin Deng Xiaoguang.

It is also seeking to broaden its shareholder base to help fund expansion plans that include a product roll-out in Hong Kong, said Deng, the former director of electric power systems at China’s largest car maker, SAIC Motor.

Deng is one of the key contributors to the drafting of China’s industry standards for EV battery charging.

“We pay a lot of attention to the Hong Kong market, which can be a platform for developing overseas markets,” he said in an interview.

“We have been conducting market research and developing partnerships in the Middle East, Europe, Southeast Asia and other regions, and hope to see further results on the ground this year.”

GGSN would welcome equity investment from supply chain, market development and energy supply partners, Deng said.

The company targets commercial customers such as shopping malls and office complexes with its mobile chargers, which can be deployed in their car parks. In Hong Kong, it aims to carry out tests of its autonomous robots at some commercial office towers once approval is granted by car park operators and site owners, Deng said.

Deng is a speaker at the Hong Kong GreenTech Summit on February 26, an event that will kick off the government’s Hong Kong Green Week series to promote green technology and finance.

Majority controlled by its founders, the company’s shareholders include venture capital firms Sequoia Capital China and Linear Venture, as well as Hong Kong conglomerate New World Group, and Zhongguancun Development Group, a technology commercialisation unit backed by the Beijing municipal government.

The start-up has developed four mobile charging robots, launching pilot programmes to demonstrate their technical and commercial viability, Deng said. It has received orders of around 1,000 units so far.

GGSN has been demonstrating both autonomous and manually-operated mobile charging machines for a year at New World Group’s K11 shopping mall in the Xintiandi district of Shanghai.

Drivers who choose to use the autonomous service can park their cars in any parking space in the mall, scan a QR code and place their order through a mobile app. A robot about the size of a wheelie bin is then deployed as instructed by a cloud computing system to make its way to the car where the driver or an operator can plug it in.

For the non-autonomous option, a member of staff at the car park has to wheel the robot to the vehicle once the order is received.

The number of EVs in mainland China may surge 50 per cent to 30 million units by the end of this year, Deng forecast, and GGSN aims to serve a substantial portion of the fleet’s charging needs.

Sales of pure battery and plug-in hybrid cars grew 38.6 per cent to 7.43 million units last year, taking the total fleet to 20.41 million.

“Surveys have found that as many as 70 per cent of EV owners are not satisfied with the availability of charging facilities in China,” Deng said. “We aim to fill the gap by offering a mobile service so that drivers will no longer need to compete with other drivers for parking spaces that have access to charging points, and we will also offer quicker charging services.

“We have seen better-than-expected demand for our devices in office-retail complexes and highway service stations,” he said.

Besides selling the mobile charging devices, which can themselves be charged up during downtime, taking advantage of off-peak power tariffs, GGSN also offers its cloud platform and mobile software to support end-user engagement, orders management and equipment dispatch activities.

Its G30 entry model charger, which is 1.46 metres (4.66 feet) long, 1.2 metres (3.94 feet) high and weighs 880kg (1,940lbs), has 70 kilowatt-hours of storage capacity and is priced at 99,900 yuan (US$13,900). A 10-minute charge can provide 150km of driving distance.

Cost-conscious Chinese tourists skip Australia for visa-free countries in Southeast Asia

https://www.scmp.com/news/asia/australasia/article/3252686/cost-conscious-chinese-tourists-skip-australia-visa-free-countries-southeast-asia?utm_source=rss_feed

As Chinese tourism booms to visa-free countries in Southeast Asia, Australia is losing out, with more cost-conscious mainland travellers also choosing cheaper destinations closer to home, according to tour operators and industry data.

Once a magnet for Chinese holidaymakers, Australia’s tourism industry is getting squeezed by visa demands at a time when Singapore, Thailand and Malaysia have waived such requirements and as mainland consumers tighten their belts.

Johnny Nee, Director at Easy Going Travel Services Pty Ltd in Perth, Western Australia, said his business only recovered to 40 per cent of pre-Covid levels over Lunar New Year earlier this month even as Singapore, Thailand and Malaysia saw visitor numbers and spending exceed pre-Covid levels.

“Given China’s economic outlook is not so certain and Chinese tourists are rather price conscious, this means they would prefer somewhere that is easier to get to and the travelling experience … is not too bad either,” said Nee, whose company also provides group tours for Chinese.

Can Malaysia attract ‘picky’ tourists as TikTok changes Chinese travel habits?

Costs for travellers, including some flights and accommodation, had risen 20 per cent over pre-Covid levels, he added.

“The visa-free policies from Thailand and Singapore are quite appealing and I personally do think it has helped divert some Chinese tourists away from Australia.”

A sluggish economy, property sector debt crisis and volatile financial markets have weighed on Chinese consumer demand, which in turn has crimped how much they splurge in countries that have traditionally banked on Chinese spending to boost tourism.

Chinese holidaymakers made up around 26 per cent of visitors over the Lunar New Year period to Australia, compared with more than 50 per cent in pre-Covid 2019, the Australian Tourism Export Council (ATEC) said.

Inbound tour operators were reporting turnover is less than 50 Covid of 2019 revenues, it added.

“The Chinese holiday travel segment, which makes a significant contribution to the Australian economy, has been slow to shake off the effects of the pandemic,” ATEC managing director Peter Shelley said.

China needs to do more on ‘silent crisis’ of debt, says World Bank official

https://www.theguardian.com/business/2024/feb/21/china-debt-relief-world-bank-ayhan-kose

China holds the key to speeding up debt relief and ending the “silent crisis” that is holding back attempts to tackle poverty in the world’s poorest countries, a senior World Bank official has said.

Ayhan Kose, the Bank’s deputy chief economist, said Beijing needed to be more active in negotiations to provide financial support for those countries already in, or close to, debt distress.

Kose said China’s emergence as a significant creditor country over the past 15 years meant it needed to take responsibility for making a post-pandemic debt relief system work.

“China needs to be more active,” Kose told the Guardian. “On debt relief China is the big player. China is critical.”

The World Bank and its sister organisation, the International Monetary Fund, have grown increasingly concerned that the pandemic and higher interest rates have made life more difficult for low income countries, with 11 in distress and a further 28 at high risk of becoming so.

Only a small number of countries have so far been given financial support through the Common Framework – the system to provide debt relief on a country-by-country basis established by the G20 group of developed and developing nations in 2020.

Kose said poor countries were unable to borrow on global financial markets and were not getting debt relief. “So what are they going to do? They are going to cut education spending and cut health spending, and they are going to regress. That’s the opposite of what you want them to do. It makes things worse. It makes the crisis permanent,” he added.

The World Bank official said it was a “silent crisis” because debt is not covered in TV headlines and no systemically important country had yet defaulted. Instead, debtors tended to be small countries, often with economic problems exacerbated by conflict, but accounting collectively for 16% of the global population.

Kose added that 40% of low income countries would have lower per capita incomes by the end of this year than they had in 2019. “By not addressing debt relief we are delaying development. That’s a sad, sad outcome for the global community,” he said.

Four countries have applied for help since the Common Framework was established, but only two – Chad and Zambia – have reached an agreement.

Kose said the global community needed to make the Common Framework work better rather than consider at this stage a “grand scheme” along the lines of the heavily indebted poor country initiative launched by the Bank and the IMF in 1996.

“But we need to be frank about the extent of the problem and establish what needs to be done and what the consequences will be if countries stay in debt paralysis for an extended period of time,” he added.

Woman without legs banned from boarding China plane as airline forbids people in wheelchairs with no companion from travel, triggering public outrage

https://www.scmp.com/news/people-culture/trending-china/article/3251525/woman-without-legs-banned-boarding-china-plane-airline-forbids-people-wheelchairs-no-companion?utm_source=rss_feed

An airline in China banned a woman with no legs in a wheelchair from boarding a flight, even though she notified them that she would need a wheelchair 48 hours in advance.

The woman, surnamed Zhang, from Hubei province in central China, was angry and confused when ground staff from China Southern Airlines stopped her from boarding.

The staff told Zhang she needed a travel companion because they could not provide a wheelchair service for her.

Zhang produced paperwork clearly showing she had complied with the airline’s policy and showed proof that she frequently travelled alone.

However, the airline said she still needed to travel with a companion.

Before boarding, Zhang had called the airline and received approval that she could board the flight without a companion.

Despite trying hard to explain that she had received permission to fly with the wheelchair, she could not convince the staff, who even gave her an official certificate of “refusal of carriage” at the counter.

“Not only do they not have service for people in wheelchairs, but they refused to let me board,” said Zhang.

“What makes China Southern Airlines think that disabled people in wheelchairs cannot live and travel alone?”

The shunned flier pointed out that another passenger had had the same experience, and neither understood why China Southern Airlines had launched a policy inconsistent with domestic standards.

When asked about the details of the policy, a customer service agent replied that passengers in wheelchairs who have a travel companion could apply for the wheelchair service in the passenger cabin 48 hours in advance.

The incident triggered widespread criticism of the airline on mainland social media.

“Is China Southern Airlines discriminating against disabled people?” One person asked.

Another said: “China Southern Airlines needs to provide a reasonable explanation.”

The story reminded many people of an incident in March 2023 when a blind woman and her guide dog in Beijing were refused entry to a park by a security guard who accused her of pretending to be disabled.

Malaysian beautician detained in China for carrying friend’s bag filled with TCM pills

https://www.scmp.com/news/asia/southeast-asia/article/3252640/malaysian-beautician-detained-china-carrying-friends-bag-filled-tcm-pills?utm_source=rss_feed

A favour of carrying a friend’s luggage at the airport had landed a Malaysian beautician a month-long stint in a Chinese lock-up.

The bag appeared to contain a large amount of traditional Chinese medicine, which was compressed in pill form.

Despite drug-sniffing dogs discovering no signs of narcotics, Lisa Lim, 45, was still detained for further investigations. Her ordeal began when her friend and business supplier, who holds the honorific title Datin, sought her help to carry a luggage as they arrived at the airport upon completing a group holiday in Kunming on January 7.

“My friend said she had other baggage to look after, so I did not think much [of it] and agreed.

“At the security checkpoint, the personnel found a huge amount of traditional Chinese medicine in the luggage and detained me,” she said, adding she was left alone while her friends, including the bag’s owner, boarded the flight to return home.

Lim said she was first told that she would only be kept for three days.

However, she ended up spending 30 days in the lock-up.

Can Malaysia attract ‘picky’ tourists as TikTok changes Chinese travel habits?

“I was unable to contact my family and friends until my release on February 7 and came back the following day.

“People thought I was involved in criminal activities,” Lim told a press conference arranged by the Malaysian Chinese Association’s Public Services and Complaints Department head Michael Chong on Tuesday.

When Lim confronted the luggage’s owner, she was brushed off while her friends, who had joined in the trip, told her to let go and just forget about what had happened, she claimed, adding that she was appalled by the Datin’s attitude.

Chong said the incident had damaged Lim’s reputation and caused great stress to her and her family.

“She is lucky that she was released and that there had been no narcotics found.

“She does not blame the Chinese authorities because they were merely doing their job. But it is greatly irresponsible of the luggage owner, who does not care or bother about what had happened to Lim,” he said. He warned all travellers to not hold any belongings of others, even for a friend.

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

Department legal adviser James Ee said Chinese law allows the authorities to hold a suspected person in custody for around 37 days.

“They also have the right to prevent a detainee from using a phone if they feel it would jeopardise their investigations,” he said.

Ee said Lim has been advised of her legal options and that a suit against the Datin is being considered. “Lim told us she needs more time to think through [the matter],” he added.

This story was first published by

China affirms Fukushima stance in rare ministerial meeting for Japan’s new envoy

https://www.scmp.com/news/china/diplomacy/article/3252648/china-affirms-fukushima-stance-rare-ministerial-meeting-japans-new-envoy?utm_source=rss_feed

The Fukushima nuclear plant water releases were raised in one of the first ministerial-level meetings attended by Japan’s new ambassador to China, suggesting the row between the two countries over the issue is likely to continue.

Kenji Kanasugi has met relatively few ministers since he arrived in Beijing in December, but at a meeting with China’s environment minister on Tuesday was told that Japan should “take responsibility” for the situation.

According to a readout from the ecology and environment ministry, Huang Runqiu reiterated Beijing’s position on Japan’s release of treated radioactive water into the sea from the Fukushima nuclear power plant.

“Japan should dispose of the nuclear-contaminated water in a responsible manner and cooperate fully with stakeholders like Japan’s neighbouring countries,” Huang told Kanasugi.

He repeated China’s call for “active participation” between Japan and its neighbours “through the establishment of a long-term and effective international monitoring arrangement”.

Huang added that China is willing to promote Sino-Japanese cooperation in the field of green and low-carbon emissions, the readout said, adding that Kanasugi expressed Japan’s willingness to deepen and expand environmental cooperation with China.

Included in the talks were discussions of exchange visits for young environmentalists from China and Japan, and other matters, the statement said.

Kanasugi, 64, presented his credentials to President Xi Jinping late last month after beginning his tenure on December 19 with a promise to negotiate “tenaciously” with Beijing to resolve the row over Fukushima water discharges.

China is the strongest opponent to the controlled waste water releases from Fukushima into the Pacific since they began last August.

Despite Tokyo’s assurances that the water is treated before discharge, Beijing insists that nuclear elements remain in the water and has banned all seafood imports from Japan.

Since his arrival, Kanasugi has met Liu Jianchao, director of the Communist Party’s International Department, but not China’s Foreign Minister Wang Yi or his deputy Sun Weidong.

Veteran diplomat is Japan’s pick for China role in bid to cool tensions

Kanasugi has previously said that his task in Beijing is to try and arrange an environment for dialogue and consultations under a broad framework.

The two neighbours need to “work constructively based on science” to find common ground, he said.

Kanasugi, formerly senior deputy foreign minister for economic affairs and chief of Asian affairs, is the first Japanese ambassador to Beijing in seven years who is not one of the “China School”, a group of Chinese-speaking diplomats within the Japanese foreign ministry regarded as advocates of improved ties with Beijing.

Siemens boss demands EU action to fend off ‘cheap’ Chinese wind power imports

https://www.scmp.com/news/china/diplomacy/article/3252627/siemens-boss-demands-eu-action-fend-cheap-chinese-wind-power-imports?utm_source=rss_feed

Europe’s wind power sector will suffer the same fate as its devastated solar industry if authorities do not cut market access for “cheap” Chinese wind power equipment, according to the head of one of its top energy firms.

Siemens Energy CEO Christian Bruch said the company would back “a combination of either a quota or qualitative criteria” to boost the European Union wind sector and make it more difficult for Chinese competition to gain a foothold in Europe.

“If you do not act it will go [to the same direction as the solar sector]. If you only decide on price, what we all did on solar, it’s not possible to really compete because I would say you don’t have a level playing field,” Bruch said in an interview on Saturday.

“We don’t ask to fence off the European market but to install principles to create a level playing field, which today is not there with Chinese suppliers,” he told the South China Morning Post on the sidelines of the Munich Security Conference.

“That is something we would insist on if you want to have a pan-European industry. If not, if price is the only determining element, the European wind industry is going to have a challenge.”

Siemens Energy, a subsidiary of Siemens Group and the parent company of Siemens Gamesa, one of the world’s top manufacturers of wind turbines, has had a troubled year.

In November, amid major losses at its wind energy subsidiary and struggles to secure commercial lending, the company tapped the German government for loan guarantees worth €7.5 billion (US$8 billion).

Bruch said Siemens would be open to quotas on imports from China, “if you do it smartly, if used properly”. “It’s not easy to do these things.”

The industry has long-warned of the potential threat from Chinese competition. In a report last year, lobby group WindEurope wrote that “constraints in Europe’s wind energy supply chain mean Chinese turbine manufacturers are now starting to win orders here, not least with their cheaper turbines, looser standards and unconventional financial terms”.

“There is a very real risk that the expansion of wind energy will be made in China not in Europe,” the group said.

There has been speculation in Brussels about a possible investigation into Chinese subsidies but the European Commission said it had not received a formal complaint and did not have the evidence to launch such an inquiry.

“The legal conditions for launching an investigation are very strict, requiring sufficient evidence of a surge in low-priced and subsidised imports of wind turbines into the EU that are harming or may harm the EU’s wind turbine industry,” commission spokesman Olof Gill said.

Nonetheless, Gill said, the commission was “ready to robustly defend” the sector from “unfair imports” when conditions were right.

The case is similar to that of the solar industry.

The European Solar Manufacturing Council warned this month that photovoltaic panel makers would be put out of business without protection from cheap Chinese imports.

European solar makers seek ‘emergency’ EU steps to block Chinese ‘oversupply’

However, no EU member state lodged the formal complaint needed to trigger an investigation. France is understood to have considered doing so – until Beijing hit back at a Paris-backed probe into Chinese-made electric vehicles with an inquiry into French brandy.

Bruch said one option was to restrict access to wind power auctions based on qualitative factors that would favour European firms, such as where the research and development was done and whether the materials used were recyclable. Supply chain labour standards could also qualify as a criterion.

“We have to make a choice to say: is it important for us if a company does R&D or manufacturing in Europe, yes or no? It does play a role [for the industry] because obviously the wage costs are higher in Europe,” he said.

The commission has taken some steps in this direction.

In October, it unveiled a package designed to speed up approvals in the wind power sector and improve access to funding for European firms.

“The EU will also use the measures provided for by the Foreign Subsidies Regulation. The European wind industry is encouraged to submit further evidence,” it said.

In December, all EU countries except Hungary signed a joint declaration to protect the industry from “unfair trade practices” coming from Chinese manufacturers.

In addition, tight supply chain due diligence rules are being negotiated in Brussels to require big companies to do in-depth auditing of their suppliers for labour, and environmental and social standards.

The proposed rules would only apply to non-EU companies if they had €300 million of net turnover generated in the EU.

China’s climate envoy decries trade curbs for ‘politicising’ renewables

However, the legislation is on life support after Germany and other member states abstained or voted against it earlier this month. Pro-business parties turned against the proposal amid intense lobbying from business groups about the red tape involved.

Bruch said the €300 million threshold created unfair conditions and all Chinese entrants to the European markets should be subject to the rules, if they were passed.

Bruch said complying with the proposed rules, which would come on top of separate due diligence requirements in Germany, would be a “massive effort”, particularly in markets where there was a lack of transparency further down the supply chain.

He said that while European firms were required to fully audit their “sub-suppliers”, the same may not be required of Chinese competitors “who come [to the market] with a full product”.

“What is his or her requirement to demonstrate this in Europe? If that’s not absolutely on a level playing field, we have unfair competition,” Bruch said.

Chinese man arrested in Australia faces extradition to US over North Korea tobacco smuggling

https://www.scmp.com/news/asia/australasia/article/3252653/chinese-man-arrested-australia-faces-extradition-us-over-north-korea-tobacco-smuggling?utm_source=rss_feed

A Chinese man arrested in Australia is awaiting extradition to the United States for alleged involvement in a North Korean scheme to generate revenue by selling counterfeit cigarettes, Australian authorities said on Wednesday.

Jin Guanghua was arrested in Victoria state in March in response to a request from the United States and remains in custody, Australia’s Attorney General’s Department said.

“The individual is wanted to face prosecution in the United States for a number of sanctions, bank fraud, money laundering, and conspiracy offences,” a spokesman for the department said in a statement.

The extradition warrant and Jin’s arrest was first reported by the Guardian on Tuesday.

A US indictment unsealed last year alleges Jin, a Chinese citizen, committed bank fraud in an illegal scheme by North Korea to generate revenue through the purchase and sale of tobacco.

To avoid United Nations sanctions, North Korean banks used front companies, according to the indictment.

North Korea’s thwarted smugglers lay bare abusable UN sanctions regime

Jin was among three Chinese nationals acting as middlemen, purchasing tobacco for companies owned by North Korea’s military and government, and used to manufacture counterfeit cigarettes to generate hard currency, the FBI alleged.

North Korea is one of the largest producers globally of contraband cigarettes, including fake Western and Japanese brands, that are sold in Asia, the indictment said.

The raw tobacco was bought from international suppliers and shipped to Dalian in China, where it was smuggled to North Korea, it said.

Jin was involved in the scheme between 2009 and 2019, the indictment said.

A Victorian magistrates court spokeswoman on Wednesday said a warrant for Jin was executed in court in August, and he was returned to the Metropolitan Remand Centre to await extradition.

Jin remains in custody “pursuant to the United States of America’s request for his extradition to face criminal charges in the United States”, the Attorney General’s department said.

The Chinese embassy in Australia did not immediately respond to a request for comment.

Taiwan chases Chinese coast guard boat away from frontline islands amid heightened tensions

https://www.theguardian.com/world/2024/feb/21/china-coast-guard-boat-taiwan-waters-driven-away-8029

Taiwan on Tuesday drove away a Chinese coast guard boat that entered waters near its sensitive frontline islands, one day after China’s coast guard boarded a Taiwanese tourist boat amid an escalating dispute sparked by a fatal capsize last week.

A Chinese coast guard boat, numbered 8029, entered Taiwan’s waters near Kinmen on Tuesday morning, Taiwan’s coast guard said, adding that it dispatched a boat and used radio and broadcast to drive away its Chinese counterpart, which left the area an hour later.

Taiwan’s coast guard said it will continue to use radar, surveillance and patrols to ensure the “harmony and safety” in the area around the Kinmen archipelago, which is Taiwanese territory but sits just a few kilometres from the Chinese mainland.

It came less than a day after China’s coast guard stopped a Taiwan tour boat for inspection, after it appeared to stray into Chinese waters while avoiding shoals. Six officers inspected the documentation of crew before disembarking about 30 minutes later. Passengers on board told Taiwanese media they were scared during the incident, and a minister accused the coast guard of triggering “panic”.

The inspection was the first since Chinese authorities announced they would increase patrols in the area, in response to the fatal capsize a week ago.

Two Chinese people died after their boat capsized inside Taiwan’s restricted waters last Wednesday. Taiwan’s coast guard said the boat, which was carrying four people, was about one nautical mile from Kinmen, and fled after being told to stop for inspection. The two surviving crew were detained and held on Kinmen, and deported back to China on Tuesday afternoon.

Chinese authorities condemned the deaths and called for a full investigation, saying the “vicious” incident had hurt people on both sides of the Strait and worsened relations.

Taiwan’s early inquiries defended the actions of its coastguard, saying the Chinese vessel was well inside Taiwan’s restricted or prohibited waters, but had refused to cooperate and sped off.

Family members of the two men killed in the capsize arrived on Kinmen island on Tuesday to hold funeral rituals and a cremation before returning to China, CNA reported. The six relatives were accompanied to Kinmen by a lawyer, officials from the Red Cross and China’s Association for Relations Across the Taiwan Straits.

“What we need is to find out the truth of the matter and give us justice,” said He Daibo, the son-in-law of one of the decease, according to Chinese state media.

Observers are wary of the situation escalating. China’s ruling Communist party claims Taiwan as a province and intends to annex it, and is particularly opposed to the current Democratic Progressive Party (DPP) government in Taiwan, which it labels as a separatist party. The pro-sovereignty DPP won a historic third term in power in January, and president-elect Lai Ching-te will be inaugurated in May, succeeding Tsai Ing-wen who will step down under constitutional term limits. Beijing has not responded to the election result with any significant hostility, but officials and observers in Taiwan remain on alert.

Taiwan’s government has called for calm over the Kinmen incident. Its defence minister said “not escalating tensions” was their response and the military would not actively intervene. However it has also told Taiwanese vessels to refuse any future attempts by China’s coastguard to board for inspections, and China’s Taiwan Affairs Office has used the incident to reject the legitimacy of Taiwan’s decades-long designation of “restricted waters”, under Beijing’s claim that Taiwan is not a sovereign state.

On Tuesday Taiwan’s Premier Chen Chien-jen urged for rationality and equality on all sides, and said Taiwan will continue to uphold maritime safety and fishers’s rights.

The US state department said it was “closely monitoring Beijing’s actions.”

“We continue to urge restraint and no unilateral change to the status quo, which has preserved peace and stability in the Taiwan Strait and throughout the region for decades,” spokesperson Matthew Miller told a regular news briefing.

Additional research by Chi Hui Lin

Just another Chinese city? 3 reasons you can’t write off Hong Kong

https://www.scmp.com/comment/opinion/hong-kong/article/3252483/just-another-chinese-city-three-reasons-you-cant-write-hong-kong?utm_source=rss_feed

Over the past few years, and more recently, commentators – often from afar – have tried to write off Hong Kong or say that our time is over. Nothing could be further from the truth.

Hong Kong is at the heart of a newly emerging economic powerhouse with extraordinary growth potential. Our stock market ranks sixth in the Asia-Pacific by capitalisation, and ninth globally. London, a long-established economic and financial hub, ranks 11th. While the Hong Kong market has had a few tough years, it also pays out dividends that are three times that of the Southeast Asian bourses combined and double Japan’s – indeed, its payout is the highest after mainland China’s.

Change and reinvention are central to Hong Kong’s DNA, as are our legendary resilience and fortitude. Time and again, we have been told that our days were numbered, that we would become “just another” Chinese city.

Looking at the success of many Chinese cities compared to their Western counterparts, this seems like a good plan, but for many reasons, it simply will not happen. Hong Kong, as always, will redefine itself and chart its own course.

As a strong starting point, our ratio of debt to gross domestic product is extremely low (at 7 per cent), so the government has the financial capacity to continue to invest, whereas many global economies exited the pandemic with heavy debt loads.

I am confident that our success will be based on three factors. First, Hong Kong is at the heart of the economic and commercial Greater Bay Area rocket ship in southern China.

With 11 cities, a population of 86 million and a GDP of about US$2 trillion (on a par with South Korea’s), the only way is up for the Greater Bay Area. By 2030, the World Economic Forum expects the Greater Bay Area’s GDP to more than double to US$4.6 trillion – this is equivalent to about 10 per cent growth every year, against 2.2 per cent for global GDP.

Shenzhen, just one Greater Bay Area city out of many, has a population of nearly 18 million, close to what London and New York have combined. Hong Kong is already a financial hub similar to London or New York. Shenzhen will be, or possibly is, the new Silicon Valley, while Macau can be a family-friendly Las Vegas.

Now imagine all these cities being less than an hour away from one another, rather than thousands of miles apart. While the precise outcome cannot be predicted, the Greater Bay Area offers limitless economic, business and societal potential.

Second, our closer ties with North and Southeast Asia, the Middle East and mainland China offer Hong Kong tremendous opportunities for business and economic growth.

Global GDP reached US$100 trillion in 2022 with the Asia-Pacific and the Middle East accounting for more than a third, at around 35 per cent. Regionally, we are among the top trading partners for Japan, South Korea, Singapore and Vietnam.

Looking towards the Middle East, we are the United Arab Emirates’ eighth-largest partner. Last month, Hong Kong signed a memorandum of understanding with the kingdom of Saudi Arabia to enhance financial market connectivity.

The direction is clear: new economic blocs are being developed and Hong Kong will be a key player in this emerging environment. The mainland is just one of many players in Hong Kong’s economic future.

Third, Hong Kong is both an international lifestyle centre and a financial centre. It is a wonderful place to live, work and play in, along with fast-growing cities in the Greater Bay Area that are less well-known, such as Zhuhai, Foshan and Huizhou.

Hong Kong has mountains, beaches, world-class restaurants, superb public transport and warm weather, all within 1,115 sq km and at a top income tax rate of 17 per cent. We are an incredibly safe city, have a vibrant multinational culture, and offer direct travel connections to the rest of the world from our award-winning airport.

The development of the airport alone is a metaphor for Hong Kong’s growth. As anyone flying over the construction will have seen, the scale is breathtaking. Our very own 50,000-seat Kai Tak stadium will soon open, which will help Hong Kong attract and retain international talent.

Art Basel will return the city next month. The Milken Institute will hold its first-ever Global Investors’ Symposium in Hong Kong on March 26, attracting leaders from the Asia-Pacific and globally. Soon, we will also welcome LIV Golf and the best players from around the world.

Hong Kong must look beyond outdated formulas to thrive

Economies are like pendulums: development and growth come in cycles. Like every global economy, Hong Kong has experienced numerous swings, both positive and negative. We adapt and change each time to thrive in the next. Our critics would be well advised to focus on the future of Hong Kong as well as the present.

I like the perspective of Austrian economist Joseph Schumpeter who coined the term “creative destruction” in 1942. He characterised it as the process of industrial change which constantly revolutionises economic structures from within, creating new ones. This seems like an excellent metaphor for our future. In with the new. See you in Hong Kong.

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US-China relations: how Washington’s Pacific funding crunch ‘plays right into’ Beijing’s hands

https://www.scmp.com/week-asia/politics/article/3252597/us-china-relations-how-washingtons-pacific-funding-crunch-plays-right-beijings-hands?utm_source=rss_feed

A failure in Washington to break a deadlock over US$2.3 billion for three Pacific island nations in return for exclusive US security access – including bases for missiles and radar – may open the door for China, leaders and experts have warned.

While a US$95 billion military aid package including for Ukraine and Israel was agreed last week, the relatively small change contained in a 20-year-old renewal deal called the Compact of Free Association (COFA) is yet to be signed off by the US Congress.

The COFA covers Palau, Federated States of Micronesia and the Republic of the Marshall Islands, tiny economies representing nearly 175,000 people yet with an outsize geopolitical role, thanks to their location in the northern Pacific stretching between the Philippines and Hawaii.

The deal, which dates back to former US President Ronald Reagan’s administration and equates to about US$100 million a year, funds education, infrastructure, disaster preparedness and climate change resilience, among other urgent needs.

Last year, the fund made up about 20 per cent of the Marshall Islands’ annual government revenue and roughly 30 per cent of Palau’s.

Australia pledges aid to East Timor in bid to boost diplomatic ties in region

In exchange, Washington is granted exclusive military access to key waters with missile testing sites and bases for weapons and radar.

But it has been held up in Congress and as Washington vacillates, Beijing could be about to step in as small, strategically located countries become a contest ground for rivalry between the world’s two largest economies.

“It plays right into the way the Communist Party of China thinks, or what it tries to tell us,” Palau President Surangel Whipps Jnr told This Week in Asia.

“‘Join us and the sky is the limit.’ You need tourists? We can give you a million tourists, we can build all the resorts you want. Just sign diplomatic relations with us. But you have to denounce Taiwan.”

Beijing views Taiwan as part of China which must be reunited, by force if necessary.

Most countries do not recognise the self-governed island as an independent state but are opposed to any unilateral change to the status quo.

‘Natural’ for Japan to play larger Aukus role, but likely not as partner

“Of course, we said we’re not denouncing Taiwan,” Whipps Jnr said. “They’re an ally and friend. We will stand by them.”

But his words carry a warning in a Pacific island region where the Solomon Islands, Kiribati and Nauru have already dropped their recognition of Taipei in exchange for billions of donor dollars from Beijing.

Last year some of that cash built a stadium for the Pacific Games in Honiara, Solomon Islands, while Chinese language teachers, doctors and agricultural advisers have rushed to Kiribati, which is close to the US Pacific territories of Palmyra Atoll, Kingman Reef, Jarvis Island, and Baker Island.

Details on Nauru’s deal with Beijing remain unclear, but reports suggest it will receive US$100 million for its change of allegiance.

Marshall Islands and Palau have diplomatic ties with Taiwan while the Federated States of Micronesia recognises Beijing’s one-China policy.

In April last year, the Micronesian Congress reaffirmed its ties with Beijing after outgoing President David Panuelo held talks with Taipei two months earlier about a diplomatic switch in exchange for US$50 million in assistance. Panuelo had publicly complained that Beijing threatened him and used bribes to interfere in Micronesian politics, The Guardian reported.

Collectively, the three island nations are also called the “Freely Associated States” (FAS).

Following the funding block they have sent a series of stern letters to America’s congressional leaders, including Senate leaders Charles Schumer, Mitch McConnell, Patty Murray and Susan Collins, warning delay carries diplomatic danger.

One letter seen by This Week in Asia said the FAS deal “effectively expands the United States for defence purposes” across the Pacific “stretching from west of Hawaii to the Philippines to Indonesia”.

The partnership allows the US to base missiles and its earliest warning radars trained on Asia in Palau and what the US military says is the world’s premier range for ICBM testing and military space operations in the Marshall Islands, FAS leaders said in the letter.

“They also make it possible for the US to conduct military exercises in the Federated States of Micronesia,” the leaders added.

The funding issue is sending ripples across America’s Pacific territories, especially on the US military installation island of Guam, at which China, Russia and North Korea have weapons pointed, according to a report from Time magazine in 2022.

US-China’s Pacific power play to persist after Australia-Papua New Guinea pact

President Whipps Jnr says he has Palau’s 18,000 people across 300 islands to think about, while his political opponents are circling ahead of a planned November election with many eyeing money from Beijing.

“It doesn’t really matter that we stand up for Taiwan. It doesn’t really matter that we’re a radar site.

“We’re not as significant or as important as Ukraine or Israel … It gets to be difficult here for our people to understand what goes on in Washington,” he said.

“I’ve been doing all I can to explain, this is democracy, this is how it works.”

But the lack of urgency from Washington is also causing alarm inside the United States among those very aware of the speed at which China may step in while Congress dawdles over a small sum of money by aid standards.

Facing oblivion, Pacific nations condemn ‘catastrophic’ Cop28 deal

“Funding for COFA cannot be the victim of apathy. The stakes are too high,” said Ginger Cruz, a professor of US foreign policy at the University of Guam and a US House Representative primary candidate for the Democratic Party.

“The annual amount of funding sought by each of the three COFA states is roughly equal to the cost of just one ICBM missile. But for that amount, you cover diplomacy and development – key areas where China is surging.”

Cruz has done the maths and says the deal allows the US to lease “some of the most valuable strategic real estate in the Indo-Pacific” for US$213 per square mile, per day.

“COFA funding is the biggest bang for your buck,” she added.

The US’ key Pacific ally Japan is also watching how the funding crunch plays out as it handles its tensions with Beijing and the uncertainty over Taiwan.

“The main reason why Solomon Islands, Kiribati and Nauru switched diplomatic relations from Taiwan to Beijing was due to [local] financial issues and development funding,” said Hideyuki Shiozawa, a senior programme officer of the Pacific island nations programme at the Ocean Policy Research Institute of the Sasakawa Peace Foundation.

‘What’s next’ as China’s Pacific island diplomatic wins mount?

“These US Freely Associated States are beginning to distrust the United States. This is a situation where the US government needs to send a clear message that it does not disrespect Palau, FSM [Federated States of Micronesia] and Marshall Islands,” he added.

Washington’s delay is adding complexity to already knotted relations in a region facing myriad internal challenges – from domestic finances to the climate crisis – and pressure from two big powers increasingly keen on securing their interests through the area.

“I see little reason to think that in the long term, the flux in island-states’ relations with the major powers will settle down”, said Glenn Petersen a professor of anthropology and international affairs at Baruch College, City University of New York

“This applies to the rest of the Pacific islands, I suspect.”

China-Australia relations: writer Yang Hengjun, jailed on the mainland, won’t appeal suspended death sentence

https://www.scmp.com/news/asia/east-asia/article/3252612/china-australia-relations-writer-yang-hengjun-jailed-mainland-wont-appeal-suspended-death-sentence?utm_source=rss_feed

Australian writer Yang Hengjun will not appeal a suspended death sentence in China because the process would delay the possibility of supervised medical care, his family said in a statement on Wednesday.

A pro-democracy blogger and spy novelist, Yang is an Australian citizen born in China who was working in New York before his arrest at Guangzhou airport in 2019.

A Beijing court this month handed Yang a suspended death sentence on espionage charges, shocking his family and supporters, after five years in detention in Beijing and three years after his closed-door trial.

The sentence was described as an “outrage” by Prime Minister Anthony Albanese and threatens a recent rebound in bilateral ties that followed several years of strained relations between Beijing and Canberra.

Australian minister to press China on trade barriers, Yang Hengjun sentence

Yang’s family, including his two Australian-based sons and close friends, said in a statement on Wednesday that Yang had decided to waive his legal right to appeal the suspended death sentence.

There were no grounds to believe the Chinese court could remedy “the injustice of his sentence”, the statement released to media said. Chinese courts have a conviction rate of 99.9 per cent and acquittals are rare.

“Commencing an appeal would only delay the possibility of adequate and supervised medical care, after five years of inhumane treatment and abject medical neglect,” it added, noting Yang had developed a serious kidney condition.

“Yang’s decision to forgo the appeals process does not in any way change the fact that he is both innocent and morally unbreakable,” the family said.

China’s foreign ministry has previously said the Beijing court had heard the trial in strict accordance with Chinese law and ensured Yang’s procedural rights, and Australia’s consular rights.

Australia voices ‘outrage’ at China’s suspended death sentence for writer

A suspended death sentence in China gives the accused a two-year reprieve from being executed, after which it is automatically converted to life imprisonment.

His family urged the Australian government to seek his release on medical parole or a transfer to Australia.

Although the details of the case have not been officially released, Yang’s long-time friend, Sydney-based scholar Feng Chongyi, said the verdict read in court alleged he had given secrets to Taiwan in 1994.

Yang worked for China’s Ministry of State Security for a decade starting in 1989, including in Hong Kong and Washington, before quitting and moving to Australia.

“The absurdity of the 30-year-old espionage accusations that have been dredged up against him speaks to the prosecution’s failure to extract any kind of confession,” the family said, in their first comment on the matter.

Yang is “an Australian political prisoner who has been sentenced to death because of his writings in support of individual freedoms, constitutional democracy and rule-of-law”, they said.

Yang wrote about Chinese and US politics as a high-profile blogger and was a visiting scholar at Columbia University.

Australia would continue to advocate for Yang, Australia’s Foreign Minister Penny Wong said in a statement.

“The Australian government understands and respects the difficult decision that Dr Yang has made with regard to his appeal,” she said.

China’s new financial regulator pledges transparency to bring investors back from the brink

https://www.scmp.com/economy/china-economy/article/3252580/chinas-new-financial-regulator-pledges-transparency-bring-investors-back-brink?utm_source=rss_feed

China’s new financial regulator has made fresh pledges to increase regulatory transparency, stability and predictability, the latest of several attempts to restore investor confidence following a stock meltdown and high-profile personnel changes.

The country will benchmark its financial policies against international rules and reduce restrictive measures to make itself more open and integrated with the global market, the Communist Party’s newly created Central Financial Commission (CFC) said in an article published by People’s Daily, the party’s press organ, on Tuesday.

“[We’ll] strengthen the interconnection of domestic and overseas financial markets and better facilitate cross-border investment and financing,” the commission said in its article, which detailed how to make China a “financial superpower”.

These signals are being sent at a time when foreign investors, including greenfield capital and portfolio holders, are hesitant to decide their next move and worried over the future of China’s policy choices.

The world’s second-biggest economy achieved 5.2 per cent gross domestic product growth in 2023, but market sentiment has remained low thanks to a protracted property industry slump, beleaguered employment figures and ballooning debts held by local governments.

Foreign investors have turned to other markets in the past year amid these factors and heightened geopolitical tensions, pushing the country’s annual net receipt of foreign direct investment (FDI) to a 30-year low in 2023.

‘We play with our money, so are careful’: is China uninvestable or invaluable?

According to data released by the State Administration of Foreign Exchange on Sunday, direct investment liabilities – a measure of both FDI inflows and outflows – rose by US$33 billion last year over 2022. This was a drop of 82 per cent year on year, and the lowest annual level for the investment metric since 1993.

While more money has left China, share prices have plunged, leading Beijing to sack the chair of its securities regulator, Yi Huiman, earlier this month.

However, Wang Chunying, a spokesperson for the forex regulator, said the foreign inflow of securities investment in China improved in the fourth quarter of 2023, with net inflow reaching a two-year high.

“This shows more foreign capital comes to China to invest in business and allocate renminbi assets”, she said in a statement, adding that China’s balance of payments will stabilise in 2024 as “both the internal and external environments will generally improve”.

China’s CSI 300 stock index, the benchmark index covering leading stocks in Shanghai and Shenzhen, lost about 11 per cent in 2023 as investor confidence waned.

The gauge rose more than 1 per cent on Monday and 0.2 per cent on Tuesday, following a long Lunar New Year holiday that saw stronger-than-expected consumer spending led by tourism and cinema sales.

China’s middle class seek safe haven for wealth amid economic slowdown

While committing to more openness and transparency, the CFC vowed to make Shanghai more competitive and influential as an international financial centre and consolidate the status of Hong Kong.

It also emphasised the importance of “high-level security”, pledging to keep all financial activities under control.

Officials should “identify, warn against, expose and handle risks as early as possible, and prevent small things from becoming magnified and big things from blowing up”, said the commission in the article.

Beijing sees managing financial risks as critical for China’s future development, as stability is being tested by government debt loads, widespread corruption and financial services that are lagging behind the country’s rapid advances in technology and manufacturing.

Preventing and resolving financial risks was termed an “eternal theme” for the Chinese government by President Xi Jinping at the twice-a-decade central financial work conference in October.