• China’s new hypersonic drone beats F-22 in aerodynamic efficiency: study
• Chinese scientists warn crippling red tape, restrictions risk balking Beijing’s bid to create ‘new productive forces’
• South China Sea: energy exploration should not involve countries outside the region, Beijing says
• TikTok gets thumbs up in China for ‘tough stance’ against US lawmakers pushing new effort to ban the ByteDance app
• China teacher turned influencer famous for cute kindergarten song caught up in US$7,000-for-sex rumours, calls in police
• Can India forge a 3-way partnership with Japan, South Korea to ‘counter China’s actions’?
• ‘Ball in Sri Lanka’s court’ as Japan seeks to deepen ties in bid to counter China’s Indo-Pacific influence
• China’s nationalists put water firm Nongfu Spring under fire, dousing private sector’s flickering confidence
• Australian writer sentenced to death in China may never be executed, Chinese ambassador says
• [World] Can a rubberstamp parliament help China's economy?
• Brain damaged China hero hit by car while trying to save lives of injured strangers denied Good Samaritan award by officials
• Singapore charges Chinese tourist who staged own kidnapping to cheat relatives, recoup gambling debts
• China inflation: 4 takeaways from February data as consumer prices turned positive, but factory activity remained subdued
• China’s congress ending with unity behind Xi’s vision for national greatness
• Thousands of Chinese workers leave Africa as lack of funding and impact of pandemic take their toll
• [World] China says it's open for business - do we buy it?
• Enchanting merman: chubby male mermaid at China theme park becomes overnight sensation by shaking belly, making funny faces at visitors
• ‘Two sessions’ 2024: China’s lawmakers call for more AI development to catch up with US, while keeping it under regulatory control
• South China Sea: US part of Philippines’ ‘calculated’ plan to tap oil, gas in waters disputed by China
• China cuts arms imports to rely more on its own weapons tech but Russia still biggest overseas supplier: SIPRI
• Do China’s leaders fully grasp foreigners’ concerns about the country?
• China’s ‘two sessions’ 2024: new mandate, party control push central bank beyond ordinary role

China’s new hypersonic drone beats F-22 in aerodynamic efficiency: study

https://www.scmp.com/news/china/science/article/3254642/chinas-new-hypersonic-drone-beats-f-22-aerodynamic-efficiency-study?utm_source=rss_feed

A new breed of China’s unmanned hypersonic aircraft can now challenge the aerodynamic performance of the most advanced fighter aircraft in the US military, according to a group of scientists from Beijing.

The new hypersonic drone boasts a lift-to-drag ratio of 8.4 in subsonic flight. While it is not exceptionally high, it is already on a par to that of the F-22 Raptor.

The lift-to-drag ratio is a crucial parameter for measuring aerodynamic efficiency. A higher value indicates greater resistance of the aircraft to the pull of gravity and enables it to fly a greater distance.

The F-22 is the only stealth fighter in the US military capable of supercruise, or sustained flight at supersonic speeds.

Nearly 20 years after introduction, the fighter remains shrouded in secrecy.

William Oehlschlager, a senior aerospace engineer with the Federal Aviation Administration (FAA), said the F-22 could achieve a maximum lift-to-drag ratio of 8.4, according to a presentation he gave in Virginia Tech, a top military engineering university in the United States.

The efficiency is lower than that of the subsonic F-35 because it needs to maintain higher speeds.

The faster an aircraft, the greater the drag it encounters. At 1.5 Mach, the F-22’s lift-to-drag ratio drops to around 4.

China’s hypersonic vehicle maintains a lift-to-drag ratio higher than 4 even while cruising at six times the speed of sound, indicating superior aerodynamic efficiency compared to the F-22 overall.

This performance allows the drone to manoeuvre flexibly even in the thin atmosphere at high altitudes, posing a challenge to missile defence systems that rely on predicting flight trajectories.

Previously, the aerodynamic parameters of China’s hypersonic vehicles were based on theoretical models.

But this time the data comes from wind tunnel tests with “real-world engineering constraints”, according to the team led by Zhang Chenan, a researcher with the state key laboratory of high-temperature gas dynamics at the Institute of Mechanics, Chinese Academy of Sciences. Their findings were published in the peer-reviewed Chinese academic journal Acta Mechanica Sinica on February 23.

Zhang and his colleagues did not disclose the model of the drone, but it bears a strong resemblance to the MD-22 wide-speed-zone hypersonic flight vehicle, which was made public in 2019.

The MD-22, developed by the Guangdong Aerospace Science and Industry Research Institute affiliated with the Institute of Mechanics, is a reusable hypersonic technology test platform for near-space applications, offering ultra-long range and high manoeuvrability.

This unmanned aerial vehicle can deliver a 600kg (1,300lbs) payload at speeds of up to Mach 7 over a distance of 8,000km (5,000 miles), equivalent to the distance between China and the continental United States.

Weighing only 4 tonnes, the MD-22 can be propelled by an air-breathing engine for take-off on airport runways or vertically launched from a rocket launch site.

It can withstand up to six-times gravity overload while making a turn at high speeds.

The name MD-22 comes from mingdi, or whistling arrow, which was mentioned by Chinese historian Sima Qian more than 2,000 years ago when he wrote: “When the whistling arrow is fired, anyone who does not obey the person who fired it will be executed.”

The new model described by Zhang’s team measures more than 12 metres long with a wingspan of nearly six metres, significantly larger than the MD-22.

However, its aerodynamic layout, including three engine nacelles protruding from the tail, remains largely unchanged.

In their paper, Zhang and his colleagues wrote that Qian Xuesen, the father of China’s rocketry, “first proposed the concept of hypersonic flight in 1946”.

“With the advancement of aerospace technology, hypersonic technology has gradually moved from conceptual exploration to practical application,” they said.

China lab simulates attack on US warships using space weapons, hypersonic missiles

The aerodynamic design of the MD-22 family of hypersonic vehicles differs significantly from that of Lockheed Martin’s SR-72, Boeing’s Valkyrie, and the UK’s Skylon, featuring a simpler and sleeker appearance.

Chinese scientists and engineers had overcome challenges related to lift-to-drag ratio, stability, thermal protection and payload integration, achieving “engineering practicality” in this technology, Zhang’s team said in the paper.

Their future focus would be on reducing costs, improving reliability and improving radar stealth performance “to achieve a phased transition from functionality to usability”, they wrote.

Aerodynamic design is a big factor determining the success or failure of a hypersonic vehicle project. The US HTV-2 drone crashed twice due to loss of stability during high-speed flight, leading Nasa to abandon the project.

However, China has continuously supported research and development in this field and conducted many test flights.

Chinese scientists warn crippling red tape, restrictions risk balking Beijing’s bid to create ‘new productive forces’

https://www.scmp.com/economy/economic-indicators/article/3254984/chinese-scientists-warn-crippling-red-tape-restrictions-risk-balking-beijings-bid-create-new?utm_source=rss_feed

Beijing has acknowledged that the way Chinese scientists go about conducting research – often finding themselves over-encumbered by arduous red tape and becoming obsessed with recognition as they compete for funding – is impeding progress in the nation’s push for “productive forces” that drive innovation and tech self-sufficiency.

And government advisers have renewed long-standing calls for reforms to reduce burdens in academia, meet the needs of scientists and recruit fresh minds into research fields while promoting their ideas and turning them into concrete results.

Young talent, in particular, remains hindered by red tape despite repeated pleas and promised efforts to ease such burdens. These weigh on the country’s ambitions to push for tech-led economic growth, according to Yuan Yaxiang, a national committee member of the Chinese People’s Political Consultative Conference, which advises and submits proposals to government bodies on political and social issues.

‘Unacceptable and upsetting’: South Korea laments lost edge to China in key tech

“The unreasonable formats and bureaucratic requirements are all too common, with some forms and application procedures neglecting the needs of scientific researchers,” Yuan, who is vice-chairman of the China Association for Science and Technology, told the press last week during the “two sessions” parliamentary gatherings in Beijing.

“These tasks frequently demand extensive, repetitive and low-tech labour,” he said.

Also during the “two sessions”, Science and Technology Minister Yin Hejun expressed commitments by leadership to reduce such burdens and advance progress.

“The purpose is to free young tech talent from tedious tasks such as procurement, reimbursement and paperwork, ensuring they have sufficient time for research,” Yin told the media.

The fresh calls came as President Xi Jinping put the onus on home-grown technology and the greater pursuit of “new productive forces”, pointing to science-centric sectors such as new-energy vehicles, biomanufacturing and commercial space flight.

A work report and budget released by the National Development and Reform Commission last week also signalled that the government would channel more funds into the science and technology needed to make such a wholesale economic transition.

The allocations align with Beijing’s push for self-reliance on fronts ranging from chipmaking to artificial intelligence as it bids to counter tech-containment moves by the West and to wrest technological supremacy from the United States.

CPPCC member Yuan said the fact that scientific researchers frequently become entangled in cumbersome bureaucracy exposes fundamental issues within the research-management system. He also said it reflects a gap between the mechanisms of scientific innovation and the development of productive forces in the new era.

China’s ‘two sessions’: Xi tells scientists to fight the tech battle well

The high-level calls for changes in scientific research are nothing new in China. Xi in 2016 called for a better evaluation system for individual researchers. And in early 2020, ministry-level authorities in science and education said changes were coming in the way research was evaluated and reformed.

One problem targeted by special initiatives is known as the “four only” phenomenon of recognising and rewarding only papers, titles, diplomas and awards. But despite efforts, it continues to weigh on academic researchers in China.

Moving forward, Minister Yin vowed to roll out policies that encourage institutions to allocate more than half of their basic research funding to individuals under the age of 35. Additionally, in the evaluation of key laboratories, the cultivation of young researchers will be emphasised as a significant assessment criterion.

And he said efforts will also be taken to address and improve some pressing livelihood concerns, including salary benefits, researchers’ mental and physical health, and their family lives.

Many Chinese scientists have lamented that difficulties persist in obtaining funding in the early stages of scientific research, owing to a lack of prior achievements. Their requests include greater allocations of non-competitive funding that ensure scientists are funded in the early stages when they need resources the most.

In many research institutions, grants and special projects – often dubbed “hats” worn by scientists – are closely linked to internal funding and resource allocation, while having such hats can provide them with a competitive advantage in external funding applications.

Such hats tend to be directly associated with individual salaries, housing benefits, job appointments and promotions, but the pursuit of these can lead to an overemphasis on notoriety rather than encourage the focus to remain on real scientific innovations.

South China Sea: energy exploration should not involve countries outside the region, Beijing says

https://www.scmp.com/news/china/diplomacy/article/3254989/south-china-sea-energy-exploration-should-not-involve-countries-outside-region-beijing-says?utm_source=rss_feed

Manila’s plans to explore for energy in the South China Sea must not harm China’s interests or involve countries outside the region, a Chinese foreign ministry spokesman said on Monday.

Speaking at a regular press briefing in Beijing, Wang Wenbin added that territorial disputes in the South China Sea should be “negotiated and properly handled directly” between China and rival claimants.

“Regarding the disputes relating to the sea, including resource exploitation, countries concerned must not undermine China’s territorial sovereignty and maritime rights and interests in the South China Sea by exploiting resources, and they must not invite extraterritorial countries to intervene in [such disputes],” Wang said.

Wang was responding to remarks by Philippine ambassador to the United States Jose Manuel Romualdez, who said in Manila that the Philippines and its allies were “moving in a calculated” plan to drill for oil and gas in the South China Sea.

“When the time comes that we are going to start exploring it, we’ll have the options to be able to see how we can secure the expedition,” Romualdez said. “We’re working closely with our allies, not only the US but also Japan and Australia.”

Those options include inviting US companies to invest in the resource development, according to Romualdez. Discussions could also include countries such as Vietnam, which have overlapping claims with China.

The South China Sea basin is estimated to hold 11 billion barrels of untapped oil and 190 trillion cubic feet (5.4 trillion cubic metres) of natural gas, but territorial disputes among China, Vietnam, the Philippines, Taiwan, Malaysia and Brunei, as well as energy exploration in the disputed waters, have led to regular stand-offs between law enforcement vessels, further fuelling tensions among the rival claimants.

The Philippines – a net energy importer – has looked for ways to exploit energy in the contested waterway, including through a 2018 joint partnership with Beijing.

Will stronger Manila-Canberra ties lead to Western support in South China Sea?

But talks between Beijing and Manila over joint exploration were called off by the Beijing-friendly Rodrigo Duterte administration in June 2022, citing constitutional constraints and issues of sovereignty.

In January last year, Chinese President Xi Jinping and Philippine President Ferdinand Marcos Jnr agreed to restart talks, but in December, Marcos said negotiations were at a “deadlock” because of heightened tensions at sea and incidents between vessels from the two countries.

To help meet its energy needs, Manila removed a Filipino ownership requirement in 2022 and allowed full foreign ownership of renewable energy projects, such as solar, wind, hydro, and ocean or tidal energy resources, in an effort to make cleaner energy more accessible to the public.

China poised for ‘long game’ with Manila over South China Sea disputes

However, joint exploration plans with China have faced uncertainties, particularly after the Philippine Supreme Court ruled in January last year that a 2005 South China Sea oil exploration deal with China and Vietnam – the first such deal among rival claimants – violated the Philippine constitution by allowing wholly owned foreign corporations to exploit the country’s natural resources “without observing constitutional safeguards”.

As ties with have China deteriorated, the Philippines has in recent months stepped up efforts to obtain oil and gas supplies from other parts of the country, including in the Sulu Sea, where Israeli company Ratio Petroleum Energy LP was expected to send a vessel next month to conduct a 3D seismic survey, according to Alessandro Sales, the undersecretary of the Philippines energy department.

Sales said in an interview last month that the country should not rely solely on the resources in Reed Bank – an undersea mountain with a flat top northeast of the Spratly Islands – where exploration by a Philippines-contracted group has been halted because of tensions between Manila and Beijing.

TikTok gets thumbs up in China for ‘tough stance’ against US lawmakers pushing new effort to ban the ByteDance app

https://www.scmp.com/tech/tech-war/article/3254975/tiktok-gets-thumbs-china-tough-stance-against-us-lawmakers-pushing-new-effort-ban-bytedance-app?utm_source=rss_feed

ByteDance, the Chinese tech unicorn that is again facing a US ban of its flagship TikTok app unless it divests, has earned a “thumbs up” at home after rallying its young users against the legislation in an effort mirroring some of the more aggressive tactics from American platforms several years ago.

The response is in contrast to a previous effort from former US president Donald Trump to ban TikTok in 2020, when ByteDance was perceived as “kneeling down” too fast with an offer to sell its US operations to Oracle.

That same year, the Ministry of Commerce and Ministry of Science and Technology introduced regulations that would likely prevent ByteDance from exporting its TikTok algorithms, the secret sauce of its success. That leaves the Chinese firm with little recourse beyond bringing the fight to Washington, which it did last week with in-app alerts to American users telling them to “speak up” against the new US legislation. A flood of calls to representatives angered lawmakers before the House Committee on Energy and Commerce advanced the bill in a 50-0 vote.

TikTok, a subsidiary of ByteDance, struck out on X, formerly Twitter, by rhetorically asking, “Why are Members of Congress complaining about hearing from their constituents? Respectfully, isn’t that their job?” ByteDance, however, has largely remained quiet on the matter except to deny a Wall Street Journal report that Zhang Yiming, who founded the company in Beijing in 2012, had been in touch with former Activision Blizzard CEO Bobby Kotick about a TikTok acquisition.

State media blasts ‘anti-China show’ as US lawmakers seek to force sale of TikTok

The more aggressive push from TikTok quickly received praise in China.

Hu Xijin, former editor-in-chief of nationalist tabloid Global Times, said in a Sunday post on X that he supports “TikTok’s tough response”. Global Times is affiliated with People’s Daily, the mouthpiece of China’s ruling Communist Party.

“TikTok doesn’t just stay still and wait for death,” Shanghai Observer, a news site under state-owned newspaper Liberation Daily, wrote a Friday report. “It has mobilised its users to fight back”.

The topic #TikTokUsersBombardUSCongressOfficesWithCalls also went viral on Chinese social platform Weibo, attracting more than 70 million views. The topic was the eighth most-trending topic at one point over the weekend, according to data from the microblogging site.

TikTok’s response this time around reflects some of the tactics used by US tech giants in a previous era of internet legislation. In 2012, several of the largest American platforms including Google, Reddit and Firefox developer Mozilla blacked out their websites or logos in response to an anti-piracy bill they argued would stifle internet freedom.

One Weibo user nicknamed XuGuliang pointed to another case in 2014, when Uber successfully lobbied against state legislation in Virginia by mobilising its users to fight back.

In recent years, however, internet platforms have been put on the defensive with a flurry of legislative proposals and regulations globally designed to curtail their influence and market power. These concerns are only heightened around TikTok in the US, where lawmakers worry the platform is unable to operate independently of Beijing.

Some Chinese netizens worried that TikTok’s fight could further irritate undecided US lawmakers into voting for the new bill, which President Joe Biden has said he will sign if passed.

“Flooded with calls, US officials may become more determined to stifle [TikTok],” wrote a Weibo user who goes by Roc_Xu.

Nearly a fifth of TikTok’s users are below the voting age of 18 years old, according to one estimate from Affable.ai in June 2023.

The new bill from the US House of Representatives would require that app distribution platforms like Apple’s App Store and Google Play remove “foreign adversary controlled applications, such as TikTok” or other applications deemed to be controlled by people or entities based in or primarily operating out of countries considered adversaries.

The bill is the first notable legislative effort in nearly a year to get ByteDance to divest TikTok. A Senate bill last year also met with heavy lobbying by the Chinese social media giant.

Trump had sought to get TikTok and Tencent Holdings’ WeChat removed from app stores using executive orders, typically a weaker legal measure. Biden reversed the orders when he took office, calling for a more “evidence-based” approach to determining whether apps present a national security threat.

With Biden now championing the bill, Trump – again the presumptive Republican nominee for this year’s presidential election – has reversed his stance.

“If you get rid of TikTok, Facebook and Zuckerschmuck will double their business,” the former president said on Friday in a post on his social media platform Truth Social, alluding to Mark Zuckerberg, CEO of Facebook owner Meta Platforms.

China teacher turned influencer famous for cute kindergarten song caught up in US$7,000-for-sex rumours, calls in police

https://www.scmp.com/news/people-culture/china-personalities/article/3254121/china-teacher-turned-influencer-famous-cute-kindergarten-song-caught-us7000-sex-rumours-calls-police?utm_source=rss_feed

A former preschool teacher who became famous last year when she appeared in a video singing to children, has claimed she has become the target of an online pornography slur.

The woman, surnamed Huang, worked as a music teacher at a nursery school in Wuhan, Hubei province in central China.

She shot to fame in April 2023 in a video clip that showed her singing and using hand gestures to teach her pupils a song called Small Small Garden.

The video was so popular on mainland social media that it had more than 7 million likes on Huang’s Douyin account alone.

People were drawn to the young woman’s attractive smile, saying she was like the girl next door and that the simple song she taught the children was “magic and brainwashing”.

After becoming an online celebrity with 7.6 million followers, Huang quit her job at the kindergarten. She now shares video clips of children’s songs and regularly does live-streaming sessions.

She had a baby at the end of last year.

On February 28, Huang said in a video that she had discovered some rumours about her online and that she and her family were suffering psychologically because of them, news outlet The Cover reported.

Someone using the pseudonym Tianwang, claimed in a chat group that he paid Huang for sex.

“At first, she pretended to be a pure girl. But after I increased the price to 30,000 yuan (US$4,200) per night, she agreed to have sex with me,” the person claimed, according to an online chat record.

Another person released a video in which Huang’s face had been digitally attached to a naked body: “Wow, teacher Huang has got a tattoo,” someone commented.

Huang said in her video that she initially ignored the rumours as she believes “a clean hand needs no washing”.

She later changed her mind and decided to take action.

“I calmed down. The internet is still governed by law, so I collected the evidence and reported the case to the police,” she said.

“Internet users are not obliged to be responsible for what they said, but I should be responsible for my own life,” Huang added.

Online rumour-mongers are not rare in China.

Last year, a man in the southeastern province of Guangdong was jailed for a year for spreading fake news online about a “gold-digger” marrying an ageing tycoon, which showed photos of a young woman with her grandfather.

Can India forge a 3-way partnership with Japan, South Korea to ‘counter China’s actions’?

https://www.scmp.com/week-asia/politics/article/3254959/can-india-forge-3-way-partnership-japan-south-korea-counter-chinas-actions?utm_source=rss_feed

India’s bid to deepen its relations with Japan and South Korea has revived the prospect of a trilateral alliance and highlights New Delhi’s ability to serve as a go-between for the rival neighbours amid growing Chinese influence in the Indo-Pacific, analysts said.

Indian Foreign Minister Subrahmanyam Jaishankar last week visited Seoul and Tokyo, meeting his counterparts and other top politicians, in a trip focused on strengthening security and economic ties with each nation.

In South Korea, Jaishankar said India was keen to expand cooperation in areas such as emerging technologies, green hydrogen and nuclear cooperation, and in Japan, both countries welcomed the expansion of joint military exercises.

While Japan and former colony South Korea’s “strategic outlooks converge”, historical tensions between the two meant India’s presence in the strategic conversation in East Asia was crucial given the rise of China and potential regional crises such as the Taiwan Strait, said analyst Harsh V Pant.

“There’s always been this hurdle in shaping a stable security architecture where Japan and South Korea [are] not able to work together because of historical sensitivities. India perhaps is one country that can visibly take this trilateral cooperation forward,” said Pant, the Vice-President of Studies and Foreign Policy at the Observer Research Foundation in Delhi.

During the 10th India-South Korea Joint Commission Meeting (JCM) in Seoul last Wednesday, Jaishankar stressed the shared stakes of both countries in the Indo-Pacific region.

Co-chairing the meeting with his counterpart Cho Tae-yul, Jaishankar highlighted India’s interest in expanding cooperation beyond trade, defence and investment with South Korea, where a shift in China policy under President Yoon Suk-yeol has created room for countries such as India to play a more prominent role in the region.

In Tokyo, Jaishankar met top politicians, business leaders and opinion-makers, and held extensive talks with Japanese Foreign Minister Yoko Kamikawa, reaffirming the strengthening of ties in areas such as security, defence equipment and technology transfers.

“Japan especially places importance on its relations with India, which has nurtured its democracy and history and represents the Global South. In light of the increasingly severe security environment of today, we confirmed the need for our defence and security cooperation,” Kamikawa said.

Jaishankar, a distinguished diplomat of 38 years before he became India’s external affairs minister, is married to Kyoko Jaishankar, who is of Japanese origin. He speaks six languages, including conversational Japanese.

The foreign minister’s visit held heavier significance in light of coming parliamentary elections in India, where major foreign policy adjustments are rare as the country nears potential political transitions. Prime Minister Narendra Modi is widely expected to secure his third term in the April-May polls.

While a similar trilateral effort was proposed more than a decade ago, it never materialised. However, current circumstances indicate a renewed interest in establishing a trilateral alliance.

Lakhvinder Singh, director of the Department of Peace and Security Studies at the Asia Institute in Seoul, identified Indo-Pacific maritime security, infrastructure cooperation, and critical and emerging technologies as potential pillars for a robust trilateral partnership.

“Strengthening multilateral mechanisms in the Indo-Pacific allows India to engage with regional partners to address common challenges and promote a rules-based order, indirectly countering China’s unilateral actions,” Singh said.

“While China may not be explicitly mentioned in Jaishankar’s trip’s agenda, the underlying objectives and discussions likely revolve around India’s efforts to enhance its strategic partnerships in the region and counterbalance Beijing’s growing influence through diplomatic engagement and collaboration with like-minded countries,” he added.

India’s efforts to strengthen ties with Japan and South Korea are seen partly as a response to the perceived slow progress and effectiveness of the Quad, a strategic security initiative comprising Australia, Japan, India and the United States.

Analysts argue that these diplomatic engagements will act as a complementary force to the Quad rather than against it, forming a ‘Quad-Plus’ initiative.

Pant said that trilateral cooperation could become an expansion of the existing framework, with South Korea expressing early interest in joining a Quad-Plus initiative.

“From India’s point of view, the Quad is certainly moving at its own pace. All four members of the Quad are comfortable with it,” he said. “All the like-minded countries would welcome anything that enhances the ability of like-minded countries to engage with each other. A trilateral cooperation will only add to the existing framework which India is part of.”

Quad summit delay sparks fears over US commitment in Asia-Pacific

Singh said while there might be signs of frustration with the slow progress of the Quad, a trilateral grouping of India, Japan and South Korea would help in plugging those gaps.

“India’s pursuit of trilateral cooperation with South Korea and Japan could be interpreted as a strategic response to perceived limitations or challenges in the Quad framework,” he said.

“India’s willingness to explore alternative partnerships highlights its proactive approach to advancing its strategic objectives in the Indo-Pacific region.”

‘Ball in Sri Lanka’s court’ as Japan seeks to deepen ties in bid to counter China’s Indo-Pacific influence

https://www.scmp.com/week-asia/politics/article/3254971/ball-sri-lankas-court-japan-seeks-deepen-ties-bid-counter-chinas-indo-pacific-influence?utm_source=rss_feed

Sri Lanka’s vital location in the Indian Ocean and Japan’s rivalry with China over Indo-Pacific influence are strong incentives for Tokyo to mend bilateral relations with Colombo strained by the cancellation of a major infrastructure project, experts have said.

“Japan’s prime minister, foreign minister and finance minister have reached out to Sri Lanka in a consistent manner in recent months,” said George I.H. Cooke, a historian and academic who formerly worked for Sri Lanka’s diplomatic service. “The ball is in Sri Lanka’s court to deepen the connectivity in a meaningful way.”

In 2020, the Gotabaya Rajapaksa regime in Sri Lanka abruptly halted a US$2 billion light rail project (LRT) – proposed as a solution for Colombo’s congested roads – financed by Japan International Cooperation Agency (JICA), citing the project’s high costs as the reason.

The decision led to diplomatic friction between the two traditionally close countries that continued to grow amid Sri Lanka’s deepening economic crisis.

Since Ranil Wickremesinghe took over as president in July 2022, the two countries have attempted to rekindle ties and restart talks on the LRT project. Following talks that began in February 2023, Colombo agreed to pay about US$3.4 million as compensation to a consultancy led by Japanese firms.

Analysts see Tokyo’s strategic interest in Indo-Pacific maritime cooperation, as well as its concern about China’s influence in the region, as playing a key role in the revival of its relationship with Colombo.

Despite the cancellation of the LRT project, Tokyo had been “more astute” in its approach to Sri Lanka, said Punsara Amarasinghe, a senior lecturer at the General Sir John Kotelawala Defence University in Sri Lanka. This was because Japan wanted to establish a peaceful Indo-Pacific region “based on rule-based international law”, but saw China as a big obstacle, Amarasinghe said.

Japan-India drills complicate China’s calculus for Indo-Pacific, analysts say

Japan’s reluctance to accept Chinese influence in the South China Sea, coupled with its trade disputes with Beijing, meant it wanted to prevent the “unanimous supremacy of China” in the Indian Ocean, Amarasinghe added.

Against this backdrop, Colombo played a vital role as a crucial centre in the maritime region of China’s Belt and Road Initiative, he said, and during Rajapaksa’s regime, Sri Lanka’s ties with Japan declined as a result of Beijing’s growing influence.

In 2000, Japan was the largest bilateral lender to Sri Lanka, holding 32 per cent of the country’s total external debt, but was replaced by China in 2016.

Amarasinghe pointed out that Japan had been using India as a proxy in the Indian Ocean region, similar to the United States.

“[Now] the cards are playing in favour of Tokyo, New Delhi, Washington … after the regime change that took place in Sri Lanka in 2022,” he said.

Japan’s National Institute of Defence Studies (NIDS) in February disclosed a decade-long plan by Tokyo to build up the maritime capabilities of Malaysia, Indonesia, Vietnam and the Philippines to counter Beijing’s influence in the South China Sea.

Masafumi Iida, a leading China analyst at NIDS, noted that the scheme could be extended to include Sri Lanka, given its geographical location in the Indian Ocean.

Sri Lanka, located just off the southern tip of India, links maritime routes connecting Asia, Africa and Europe, making it a strategic relationship for its larger neighbours.

Japan-Sri Lanka ties strengthened in the aftermath of World War II and by March 2021, Colombo had received around 1.435 billion yen (US$9.8 million) worth of financing from Tokyo. As Sri Lanka’s second-largest bilateral creditor holding about 8 per cent of the country’s total debt as of May 2022, Japan remains important in Sri Lanka’s debt-restructuring process.

Japan has financed Sri Lanka’s investment projects over the decades, with maritime cooperation playing a prominent role through projects run via JICA, according to Rear Admiral Y. N. Jayarathna, former chief of staff of the Sri Lanka Navy.

“In the Indian Ocean region, Sri Lanka remains the primary partner for Japan when it comes to maritime safety and security,” he told This Week in Asia.

These include the Colombo Port modernisation project in 1997, gifting two new oil spill prevention vessels to Sri Lanka’s coastguard, and helping build their capacity in areas such as maritime domain awareness and disaster relief over the years.

“Unlike the land-based projects, maritime-related projects have not run into any issues in the past and are unlikely even in the future,” Jayarathna said.

Japan’s maritime investments complemented that of the US-led Indo-Pacific initiatives, given its status as “a strong US ally”, Jayarathna said.

Colombo did not need to unduly worry about Tokyo-Beijing relations, but should remain “cautious” of not playing to “each party’s demands at the expense of the other”, he added.

---

China’s nationalists put water firm Nongfu Spring under fire, dousing private sector’s flickering confidence

https://www.scmp.com/economy/china-economy/article/3254979/chinas-nationalists-put-water-firm-under-fire-dousing-private-sectors-flickering-confidence?utm_source=rss_feed

China’s drinks giant Nongfu Spring, the country’s largest bottled water producer, has become the latest target in a series of attack campaigns from an increasingly vocal constituency of nationalists online, prompting concerns over what effect this group may have on an already fragile private sector.

The company, helmed by China’s wealthiest individual Zhong Shanshan, has fallen under a wave of criticism for the perceived Japanese styling of its packaging, just days after it came under fire for Zhong’s competition with another water brand and his son’s American citizenship.

After similar waves of nationalist anger befell Western brands such as H&M and D&G a few years ago – damaging their image in the country – a domestic firm is receiving the same treatment.

This reactive trend in online opinion presents yet another challenge for China’s private businesses, even as the government has vowed to support them to jump-start the slowing economy.

With a stated goal of “around 5 per cent” for gross domestic product growth this year, Beijing has made the improvement of the operating environment for private companies a priority, as they represent about 92 per cent of all enterprises in China and play a crucial role in job creation.

Angry consumers and retailers initiated a boycott of Nongfu Spring’s products after rumours spread the company was using pictures of Japanese religious buildings on its packaging, though the bottler said last week the designs are artistic creations based on a Chinese temple.

The controversy reached a fever pitch as online content creators began to post videos of themselves pouring Nongfu Spring water into toilets, and two 7-Eleven convenience stores in Jiangsu province pledged in a statement last Friday not to sell any of the company’s products, calling it a business that “reveres Japan”.

‘Let common sense prevail’, Chinese business leader urges Beijing

The saga began late last month, with accusations that Zhong made his fortune by undermining his former partner Zong Qinghou, founder of rival drinks company Wahaha. The claims surfaced amid a nationwide mourning period for Zong after his death.

Zhong denied the allegations in a statement earlier this month, but that did little to quell the firestorm – shortly thereafter others condemned his son, Nongfu Spring non-executive director Zhong Shuzi, for holding a US passport.

Zhou Dewen, head of an association representing small and medium-sized enterprises in Wenzhou, Zhejiang province, said nationalism is an obstacle to rebuilding confidence among private companies.

“What’s most dreadful is to attack people and things that are leading the way in the name of patriotism,” he said. “We must stay sober and not be coerced by public opinion. Economic recovery is not about talking, but action.”

Noting that Wahaha and Nongfu Spring, both based in the private business hub of Zhejiang, are outstanding domestic firms that deserve praise rather than attacks, he said, “Nongfu Spring makes great contributions to the Chinese economy and society – just imagine how much tax it has paid.”

Zhong ranked first in the 2023 Forbes list of China’s 100 Richest with an estimated wealth of US$60.1 billion. He remained at the top of the ranking for the third year in a row, despite a decline in fortunes amid economic challenges.

Wu Fang, a professor at Shanghai University of Finance and Economics’ business college, said when “nationalism prevails” entrepreneurs need to keep a low profile.

“They need to avoid the spotlight, because issues such as their nationality and personal beliefs are likely to be exaggerated in such an era.”

Australian writer sentenced to death in China may never be executed, Chinese ambassador says

https://www.scmp.com/news/asia/australasia/article/3254950/australian-writer-sentenced-death-china-may-never-be-executed-chinese-ambassador-says?utm_source=rss_feed

China’s ambassador to Australia said on Monday that the suspended death sentence given last month to imprisoned Australian writer Yang Hengjun may not be carried out if the former pro-democracy blogger commits no further crimes.

The suspended sentence from a Beijing court on espionage charges does not entail immediate execution for Yang, Ambassador Xiao Qian said at the Australian Financial Review Business Summit on Monday.

If Yang complies with the terms of his imprisonment and committed no further crimes, “theoretically there is a chance he will not be executed,” Xiao said.

His comments mark the first time a Chinese official has noted that Yang might not be executed. Xiao’s comments also echoed the sentiment of Australian Trade Minister Don Farrell, who said last month that concerns over Yang’s sentence were unlikely to impact the outcome of China’s review of wine tariffs that is due later this month.

Xiao also downplayed worries over Yang’s health on Monday and said it was not as grave as described by his family, although it was “not perfect”.

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 the Guangzhou airport in 2019.

A Beijing court last month handed him 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.

Yang opted not to appeal the decision, his family said, so as not to delay urgently needed medical care for a serious kidney condition. Yang remains in prison.

Details of the case have not been officially released.

Yang has said he never worked as a spy for a foreign country, and in letters to his family from jail has denied any wrongdoing.

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 Chinese government has denied ever employing Yang.

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

Yang’s family has said he is a political prisoner and “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”.

Australia’s ties with China have steadily improved since the election of a centre-left Labor government in May 2022, resulting in Beijing scrapping a number of trade measures imposed during a nadir in relations.

China initiated a five-month review into tariffs on Australian wine in late November. A similar review process with tariffs placed on Australian barley earlier last year had led to a lifting of the sanctions.

On the tariffs, the ambassador said: “We do have differences on many issues and we’re going to manage the differences wisely and maturely.”

“They’re now carrying out those investigations and things are moving on right tracks with the right direction,” Xiao said.

---

[World] Can a rubberstamp parliament help China's economy?

https://www.bbc.co.uk/news/world-asia-china-68402147

Brain damaged China hero hit by car while trying to save lives of injured strangers denied Good Samaritan award by officials

https://www.scmp.com/news/people-culture/trending-china/article/3254113/brain-damaged-china-hero-hit-car-while-trying-save-lives-injured-strangers-denied-good-samaritan?utm_source=rss_feed

A 65-year-old man in China has been denied a Good Samaritan award by police despite the fact that he tried to save the lives of two people and was knocked down by a car and left in a vegetative state.

Zhang Shaomo was walking along the street in Gongan county, Hubei province, central China on April 7, 2023 when he saw a man and a woman fall off an electric bike, surveillance footage showed.

As Zhang approached the two people and tried to help them up, all three were hit by a car, the Xiaoxiang Morning Herald reported.

Zhang was the most seriously injured and has remained in a vegetative state since, according to his son whose name was not given in the report.

He said he had applied to the local police authority multiple times since May last year, hoping it would give his father the Good Samaritan award, but his application was repeatedly rejected.

“My father was rescuing people, but officials at the police authority told me what my father did not meet the criteria for a Good Samaritan certificate,” the son said.

When he asked for an explanation of the criteria, officials told him: “Your father did not do a grand gesture, nor was his deed touching or remarkable enough to evoke praise and tears.”

Good Samaritan awards are usually conferred by the local government on people who carry out heroic actions.

The award comes with prize money of up to one million yuan (US$140,000).

In addition to the cash prize, award winners also enjoy preferential medical treatment and admittance to schools of their children.

According to rules outlined by China’s Ministry of Public Security, a Good Samaritan is not strictly defined, but could include actions such as fighting against a crime that jeopardises public safety or property, saving a life, or protecting public property.

At the end of 2023, a county court heard the case filed by Zhang’s son against the driver of the car that knocked over his father.

Court documents showed that he was trying to save two people who were lying on the ground as the vehicle ploughed into him.

“All the evidence supports the fact that my father was saving people. I just cannot figure out why they did not approve my application,” Zhang junior said.

The court ruled that the car driver pay 960,000 (US$133,000) yuan to the Zhang family as compensation, but they had only received 110,000 yuan.

Zhang has been looked after around the clock by his wife who had to quit her job. The son said his father’s condition had placed a great financial burden on the family.

“My father is a good man. But why did he bother to save others?” the baffled and hurt son asked.

The story has resonated deeply with many on mainland social media.

“I think no-one will dare help others in future,” one online observer said on Douyin.

“I will educate my kid not to meddle in other people’s business,” another wrote.

“This has made people who have done heroic deeds feel extremely sad,” said a third.

---

Singapore charges Chinese tourist who staged own kidnapping to cheat relatives, recoup gambling debts

https://www.scmp.com/news/asia/southeast-asia/article/3254922/singapore-charges-chinese-tourist-who-staged-own-kidnapping-cheat-relatives-recoup-gambling-debts?utm_source=rss_feed

Trying to recoup his gambling debts, a Chinese national visiting Singapore allegedly decided that he could stage his own kidnapping in the Republic to scare his relatives into paying around S$5,550 (US$4,200) as ransom.

But instead of doing so, his relatives contacted Singapore’s authorities and did not accede to the ransom request.

On Monday, Liu Changjian, 33, was handed one charge of attempted cheating. Pleading not guilty, he appeared in court via video-link while on remand.

Singapore jails woman who faked assault to get back at ex-boyfriend

Liu will return to court on March 25 for a pre-trial conference.

In a statement to the media, the police said they received a call for help on March 9 at about 6:50am that Liu was allegedly kidnapped.

Liu, a tourist, was purportedly supposed to return to China on March 6 but did not do so. His aunt also received messages on WeChat from an unknown person claiming Liu was kidnapped, and that she needed to pay the ransom for the release of her nephew.

“In the text messages, the unknown person forwarded the photo of the man’s travel document as proof,” said the police.

The aunt then informed Liu’s father, who called the Singapore Police Force from China for help.

“Within three hours of [receiving] the police report, officers managed to locate the man in the vicinity of Marina Bay,” said the police, adding Liu was found safe.

The police said further investigations revealed Liu had gambling debts between S$20,000 and S$30,000.

As Singapore run ends, ‘unpaid therapist’ Taylor Swift gives fans ‘inspiration’

To recoup his debts, he allegedly pretended to be an unknown person and allegedly sent threatening messages to his aunt in hopes to get the ransom money.

“The Police take a serious view against any person who may be involved in scams, whether knowingly or unwittingly,” said the police. “Anyone found to be involved in such scams will be subjected to police investigations and may be prosecuted.”

Those found guilty of attempting to cheat others can be jailed for up to 10 years, fined or both.

This story was first published by

China inflation: 4 takeaways from February data as consumer prices turned positive, but factory activity remained subdued

https://www.scmp.com/economy/economic-indicators/article/3254919/china-inflation-4-takeaways-february-data-consumer-prices-turned-positive-factory-activity-remained?utm_source=rss_feed

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

China’s consumer price index (CPI) turned positive for the first time since September after growing in February by 0.7 per cent, year on year, compared with a fall of 0.8 per cent in January.

Analysts said the turnaround was due to temporary factors, such as volatility in food and tourism prices around last month’s Lunar New Year holiday.

“Markets were looking for a boost from food prices due to the Lunar New Year, but overall, food prices remained in negative growth for the seventh consecutive month at minus 0.1 per cent, year on year, despite an uptick in pork and fresh vegetable prices,” said analysts at ING.

China has set its CPI inflation target at 3 per cent for all of 2024 after prices rose merely 0.2 per cent across 2023.

In month-on-month terms, the CPI reading grew in February by 1 per cent, outpacing a 0.3 per cent monthly uptick in January.

China’s consumer prices rebound thanks to holiday boom, but deflation risks loom

Data for January and February showed that the CPI remained unchanged from the same period last year. The figures for January and February are combined to smooth out the impact of the Lunar New Year holiday, which falls at different times during the two months in different years.

“China’s CPI inflation turned positive in February. This was mainly due to the floating Chinese New Year holiday, which was in February this year and in January last year,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.

“If we look at the average CPI inflation of the first two months of this year versus the same period last year, prices were flat, according to the National Bureau of Statistics.”

China’s producer price index (PPI) – which gauges the cost of goods at the factory gate – fell in February by 2.7 per cent, year on year, marking 17 straight months of decline.

“PPI deflation persisted on weak upstream sector prices in the off-season and soft mid-to-downstream prices,” said analysts at Goldman Sachs.

Month on month, the PPI dipped by 0.2 per cent in February compared with January.

In combined data for January and February, PPI dropped by 2.6 per cent compared with the same period last year.

“The larger-than-expected PPI deflation suggests that factory activity remained highly subdued in February – in line with the [purchasing managers’ index] readings, despite rising global energy prices,” said Lu Ting, chief China economist at Nomura.

China’s core inflation, which excludes volatile food and energy prices, grew by 1.2 per cent, year on year, in February.

“Core inflation picked up from a seven-month low of 0.4 per cent, year on year, to 1.2 per cent, but this was largely due to residual seasonality caused by the later timing of the Lunar New Year in 2024 compared with 2023,” said analysts at Capital Economics.

Analysts at ING said that the inflation readings in February were “relatively encouraging” and that they should “temporarily quiet the deflation worries”, despite admitting that inflation would likely remain weak for the majority of the first six months of the year.

“I think it is too early to conclude that deflation in China is over. Domestic demand is still quite weak,” said Zhang at Pinpoint Asset Management.

“Property sales of new apartments have not stabilised yet. The fiscal policy stance has turned more proactive at the National People’s Congress, but the bond issuance has not picked up yet. It takes time for the fiscal boost to be transmitted to the economy and help domestic demand recover.”

Analysts at Capital Economics “expect CPI inflation to average only 0.5 per cent in 2024, still far below pre-pandemic norms”. That would be much lower than Beijing’s annual target of 3 per cent.

“We think China’s low inflation is a symptom of its growth model built on a high rate of investment,” Capital Economics said. “As reducing dependence on investment is still far off, we expect inflation to remain subdued relative to pre-pandemic norms in the long run.”

Goldman Sachs analysts said the headline CPI reading in March is likely to fall from February as the Lunar New Year effect fades out, while PPI deflation was seen persisting in the coming months.

And a takeaway from HSBC analysts was that “it is too soon to say we have fully shaken off disinflationary pressures, and more policy support is still needed to solidify growth to reach the ‘around 5 per cent’ [economic growth] target this year”.

China’s congress ending with unity behind Xi’s vision for national greatness

https://apnews.com/article/china-congress-economy-jinping-beijing-5f80fc62081cb8bd06efc74fd4810972A man takes photos near red flags on Tiananmen Square before the closing session of the Chinese People's Political Consultative Conference (CPPCC) in Beijing, Sunday, March 10, 2024. The CPPCC is an advisory body to the National People's Congress which will close Monday. (AP Photo/Ng Han Guan)

2024-03-11T04:09:22Z

BEIJING (AP) — China’s national congress is wrapping up its annual session Monday with the usual show of near-unanimous support for plans designed to carry out ruling Communist Party leader Xi Jinping’s vision for the nation.

This year’s weeklong event, replete with meetings carefully scripted to allow no surprises, has highlighted how China’s politics have become ever more calibrated to elevate Xi.

Monday’s agenda is lacking the usual closing news conference by the premier, who in the past was responsible for economic affairs as the party’s No. 2 leader — the one time each year when journalists could directly question a top leader.

The annual news conferences have been held most years since 1988, and the decision to scrap the event emphasizes Li Qiang ‘s relatively weak status. Past premiers have played a much larger role in leading key economic policies such as modernizing state enterprises, coping with economic crises and leading housing reforms that transformed China into a nation of homeowners.

A key item due to be put for a ritual vote on Monday are revisions of the “Organic Law of the State Council,” China’s version of a cabinet, that direct it to follow Xi’s vision.

“The Communist Party always called the shots but the party leaders who ran the State Council used to have a much freer hand in setting economic policy,” Neil Thomas, a Chinese politics fellow at the Asia Society Policy Institute, said in an emailed comment.

“Xi has been astonishingly successful in consolidating his personal hold over the party, which has allowed him to become the key decisionmaker in all policy domains,” Thomas said.

In foreign policy, China appears to be sticking with Wang Yi as foreign minister, who stepped back into the post last summer after his successor, Qin Gang, was abruptly dismissed without explanation after a half year on the job.

Analysts thought that the Communist Party might use the annual congress to appoint a new foreign minister and close the book on an unusual spate of political mishaps last year that also saw the firing of a new defense minister after a few months on the job.

The Organic Law of the State Council is being revised for the first time since it was adopted in 1982. The revision calls for the State Council, above all, to “uphold the leadership of the Communist Party of China.” It also adds the governor of China’s central bank as a ministerial post.

Echoing words seen in just about every proposal, law or speech made in China these days, it spells out that China’s highest governing officials must adhere to the party’s guiding ideology, which refers back to Marxism-Leninism and Mao Zedong Thought and culminates in Xi’s philosophy on “Socialism with Chinese Characteristics for a New Era.”

As Xi’s government champions innovation and self-reliance in technology as ways to build a modern, wealthy economy it is leaning heavily on more overtly communist ideology that harkens back to past eras.

Xi has fortified the party’s role across the spectrum, from culture and education to corporate management and economic planning, a potentially risky strategy.

The “benefits may be outweighed by the costs of stifling political discussion, disincentivizing local innovation and more policy shifts,” Thomas said.

During this year’s congress, many provincial meetings were opened to the media for the first time since the COVID-19 pandemic, though they were carefully scripted with speeches and other prepared remarks and none of the spontaneity once glimpsed in real group discussions on the sidelines of the meetings in decades past.

The contrast with polarized politics in the U.S. and robust debate in other democracies could not be more stark: China’s political rituals, void of any overt dissent, put unity of opinion above all.

Marching orders endorsed by the congress include calls to ensure national security and social stability, at a time when job losses and underpayment of wages have sparked rising numbers of protests.

Along with following “the guidance of Xi Jinping Thought” and other party directives, developing “new quality productive forces” — a term coined by Xi last September — emerged as a new catchphrase at this year’s congress.

The term suggests prioritizing building self-reliance in science and technology as China confronts trade sanctions and curbs on access to advanced know-how in computer chips and other areas the U.S. and other countries deem to be national security risks.

ELAINE KURTENBACH Based in Bangkok, Kurtenbach is the AP’s business editor for Asia, helping to improve and expand our coverage of regional economies, climate change and the transition toward carbon-free energy. She has been covering economic, social, environmental and political trends in China, Japan and Southeast Asia throughout her career. twitter mailto

Thousands of Chinese workers leave Africa as lack of funding and impact of pandemic take their toll

https://www.scmp.com/news/china/diplomacy/article/3254531/thousands-chinese-workers-leave-africa-lack-funding-and-impact-pandemic-take-their-toll?utm_source=rss_feed

At the beginning of the century, former Chinese president Jiang Zemin’s push for businesses to “go out” saw thousands of mainland companies head to Africa in search of new markets and raw materials.

With them, went thousands of Chinese immigrant workers. In fact, by 2015 it is estimated that there were around 263,000 Chinese workers in Africa.

But that is no longer the case. Since that 2015 peak, the number of Chinese workers in Africa has dropped significantly, mainly as a result of funding for infrastructure projects drying up – which was exacerbated by the coronavirus pandemic.

According to a recent working paper about China’s economic engagements with Africa published in February by the International Monetary Fund (IMF), by the end of 2021, the official number of Chinese workers in Africa stood at about 93,000, a fall of 64 per cent from 2015. Algeria and Angola both stand out in this metric, with an almost 90 per cent reduction in the number of registered Chinese workers. The paper did note, however, the real total may be slightly higher as those numbers do not include informal migrants such as private traders, investors and shopkeepers.

The decline in workers is inextricably linked to the gross annual revenues of Chinese companies’ construction projects in Africa.

“There is a positive correlation between the number of Chinese workers and the gross revenues of Chinese companies in Africa, especially before the pandemic,” the IMF paper said.

The IMF paper said the revenue of Chinese companies engaged in engineering and construction projects in Africa reached its peak in 2015, after which point it began gradually declining. In 2021, that revenue figure was US$37 billion, a 3 per cent drop from the previous year.

According to data compiled by the China Africa Research Initiative (CARI) at Johns Hopkins University’s School of Advanced International Studies (SAIS), in 2022, the number of Chinese workers in Africa fell again, hitting a new low of 88,371.

The pandemic was responsible for a large part of the decline. In 2020 alone, there was a 49 per cent decrease in workers due to travel challenges caused by Covid restrictions.

“So construction was still down in 2022 from Covid; China did not open its borders until January 2023,” Deborah Brautigam, a professor emerita in international political economy and CARI director, said.

Looking at the figures for 2021, CARI data showed that of the 93,526 Chinese workers in Africa, 72,526 were in project contracting and 21,000 were in services, including manufacturing labourers, hotel workers and cooks. In 2022, there were 62,686 Chinese workers in project contracting and 25,685 in services, according to CARI.

In 2022, the top five countries with Chinese workers were the Democratic Republic of the Congo, Algeria, Egypt, Nigeria and Angola, which accounted for 42 per cent of all Chinese workers in Africa.

China targeted by climate activists over contentious East Africa oil pipeline

CARI data also showed that in 2013, Angola had 50,526 Chinese workers but the number dropped to 6,784 by 2022. Likewise, Algeria had 91,596 Chinese workers in 2015 but by 2022, the number of Chinese workers had plummeted to 7,462.

Dominik Kopinski, an associate professor in the Institute of Economics at the University of Wroclaw and senior adviser at the Polish Economic Institute, said that in Angola, the decline was directly linked to two factors: the economic crisis following the post-2014 oil price plunge and the drying up of Chinese loans.

This led to the disappearance of most Chinese state-owned enterprises (SOEs) and their workers, as well as many Chinese businesses catering to Chinese migrants, such as restaurants, according to Kopinski, who has done studies on China-Angola relations.

He said Angola is notable because, after the civil war ended there in 2002, the government essentially outsourced national reconstruction to Chinese firms. This resulted in a significant influx of Chinese SOEs, subcontractors and around 300,000 migrants.

“Today the estimates vary, but my guesstimate based on the interviews we did back in 2022 is that there are around 20,000 Chinese migrants living in Angola,” he said.

Kopinski expects that figure to rise, but he predicts it will be a moderate and gradual increase – nothing nearly as dramatic as pre-2014. He said large loans and multibillion-dollar infrastructure projects are very unlikely to return.

“Chinese migration in Angola has become more reminiscent of Portuguese migration after 1910, with small family businesses, traders and farmers venturing into inhospitable lands outside of large urban areas, where others do not dare to go,” he said.

Not every African country has seen falls, though. Egypt is bucking the trend, recording increases in Chinese workers in recent years, albeit small ones. Massive projects at the Suez Canal as well as building work of the new administrative capital in Cairo have been undertaken by Chinese companies. It has meant the number of Chinese workers there has risen from just over 2000 in 2015 to 7,358 in 2022.

It is a similar story in the DRC. Chinese investors and immigrant workers have continued to follow the fortunes of the country’s mining industry, which provides most of China’s cobalt. The number of Chinese workers in the DRC rose to 8,705 in 2021 from 5,155 in 2014. That figure does not include many more undocumented Chinese immigrants who run small businesses, including in artisanal mining.

But while the overall presence of Chinese workers in Africa has declined as the number of Chinese projects have reduced – as well as due to the Covid-19 pandemic – that may not tell the whole story.

There are also indications that some Chinese companies have been conducting training and employing local workers in their construction projects.

That explains the recent emergence of the so-called Luban workshops, a Chinese-backed vocational training programme initiated in 2016 under President Xi Jinping’s transcontinental Belt and Road Initiative.

The workshops contribute to educational advancement by building schools, introducing technology and organising trips to Chinese vocational schools for local educators.

CARI’s Brautigam said the presence of Chinese workers is closely correlated with available project finance, such as bank lending in Angola and Republic of Congo or commodity export revenues in Algeria.

She said Chinese project lending flattened out and then declined after the peak of 2013, since Africa looked riskier as the price of commodities, like oil, fell sharply.

“So fewer new projects were started and fewer workers were sent,” Brautigam said.

She said some of the decline is also because research shows that Chinese companies increasingly hire local workers the longer they are present in a country.

“And of course the sharp drop in 2020 and 2021 reflects the impact of the pandemic,” she said.

Going forward, Brautigam said there will be a recovery but not at the same levels that were seen previously.

“We are unlikely to see a return to the high numbers of the past decade,” she said.

---

[World] China says it's open for business - do we buy it?

https://www.bbc.co.uk/news/world-asia-68508868

Enchanting merman: chubby male mermaid at China theme park becomes overnight sensation by shaking belly, making funny faces at visitors

https://www.scmp.com/news/people-culture/trending-china/article/3254102/enchanting-merman-chubby-male-mermaid-china-theme-park-becomes-overnight-sensation-shaking-belly?utm_source=rss_feed

A chubby merman who performs at an aquarium in China has become an overnight online sensation thanks to his hilarious antics.

Several online videos have amassed millions of views showing the topless man, decked out in a floral print mermaid tail, pinching and shaking his belly painted with fake abdominal muscles while making funny faces and heart gestures with his hands to visitors.

His performance style amused visitors to the Changchun Zhongtai Ocean World in northeastern China’s Jilin province, as well as many other people online.

The man, whose name was not disclosed, said he began working as a part-time merman while the regular female performers were on leave during the Spring Festival holiday in February.

He said he had worked in another positions in the aquarium, and after going viral, he was promoted to full-time merman, on what he said was irresistible pay.

He admitted that he was so chubby there was no suitable outfit for him, and the aquarium had to make a tail using a famous fabric design that it uses to adorn its penguins in adorable waistcoats.

The style was created by a group of Shanghai designers in the 1950s and combines traditional flora and phoenix patterns from the Yangtze River Delta area, which covers nine provinces from the east to the west of the country.

It rose to fame in the 1990s thanks to comedians from northeastern China who wore it on national television shows.

The design’s iconic red and green colours are also associated with the comedians’ straightforward and humorous characters.

Many Chinese celebrities have dressed in the design on international occasions, one of the most famous being 58-year-old actress, Gong Li, who wore a red qipao featuring the design while winning the Golden Lion award at the Venice International Film Festival in 1992.

On mainland social media, many nicknamed the merman “bighead carp” because the species name in Chinese uses the character for “fat”.

Some joked that the merman was a realistic portrayal of deep-water creatures that need blubber to survive a cold climate.

“Perform more and he will have real six-pack abs,” said one online observer on Weibo.

“Thank you for putting on the show, but I will pass, because I already have a husband with a similar figure at home,” another woman quipped.

‘Two sessions’ 2024: China’s lawmakers call for more AI development to catch up with US, while keeping it under regulatory control

https://www.scmp.com/tech/policy/article/3254851/two-sessions-2024-chinas-lawmakers-call-more-ai-development-catch-us-while-keeping-it-under?utm_source=rss_feed

Artificial intelligence (AI) was a key topic discussed by the business and political elite attending China’s annual legislative gathering last week, as the country seeks to leverage ChatGPT-like technology to drive economic growth while maintaining strict regulatory control.

Technology and academic delegates to the National People’s Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC) tabled multiple suggestions to advance AI, from the pooling of algorithm training infrastructure to more support from Beijing to ensure China does not fall behind in the global AI arms race.

Yu Xiaohui, head of the China Academy of Information and Communications Technology (CAICT), which is backed by the Ministry of Industry and Information Technology (MIIT), suggested that the government should pool resources to build a “unified national market” of computing power services.

“We must establish a unified market for computing power services and the effective use of resources across the country,” Yu, a CPPCC member, said.

Xi Jinping’s hi-tech push steals the spotlight at China’s ‘two sessions’

His appeal resonated with other delegates, including telecoms equipment maker ZTE’s senior vice-president Miao Wei and Ma Kui, general manager at China Mobile’s Sichuan branch, who both called for increased investment in and more coordinated development of computing infrastructure. Miao and Ma are NPC delegates.

“Computing power … has become the focus of international competition,” said Ma, who also highlighted the imbalance of the Chinese AI industry, with research teams located mostly in first -tier cities such as Beijing and Shanghai but computing resources clustered in other smaller cities.

The calls for a state-orchestrated computing infrastructure come after five Chinese government bodies, including MIIT and the National Development and Reform Commission, the country’s top economic planner, issued a policy titled “East-West Compute Transfer” to coordinate computing resources between China’s eastern and coastal provinces and its western inland regions.

But Zhang Yunquan, a CPPCC member and a research fellow from the Chinese Academy of Sciences, said the project would not help efforts to train large language (LLM) models for AI, as it mainly serves traditional data centre and cloud computing demands.

Instead, Zhang proposed state-led efforts to coordinate academic and industrial resources to build up a “sovereign LLM”.

Cao Peng, chair of the technology committee at Chinese e-commerce giant JD.com and head of its cloud unit, called for the development of home-made AI chips to circumvent Washington’s export controls.

‘Two sessions’ 2024: China’s construction of particle collider may start in 2027

Liu Qingfeng, chairman at iFlyTek, a Chinese AI specialist known for its voice recognition capability, called for a national-level approach to “systematically and rapidly propel our country’s artificial general intelligence growth”.

“We need to acknowledge the gap … and consolidate resources from the state level to accelerate the catch-up [with US AI firms],” according to Liu.

Zeng Yi, a CPPCC member and head of China Electronics Corporation, warned that China was lagging in generative AI when it came to talent and basic scientific research. “We are all very anxious” about being left behind, Zeng said.

Premier Li Qiang introduced an AI+ initiative to integrate the power of AI across traditional sectors to drive economic growth, and to push for technology upgrades. Meanwhile, China’s lawmakers and political advisers voiced concern about potential disruptions from AI, and called for effective regulation.

Lou Xiangping, head of China Mobile’s branch in the central Henan province, proposed an accountability system to hold service providers – such as operators of local ChatGPT-like services – responsible for possible mishaps.

China has already implemented a registration system that requires local LLMs to apply for approval before providing public services. More than 40, or around one-fifth of the country’s total number of LLMs, have been given the green light for public release.

Zhang Yi, a CPPCC member and senior partner at law firm King & Wood Mallesons, tabled his proposal about improving AI regulation but also cautioned that too many laws might hinder the development of the local industry.

In explaining his proposal to local media, Zhang said China needs to balance regulation and development through an approach that clearly defines what is illegal, while also allowing companies to innovate and explore new areas.

“As global AI competition intensifies …[we] need to be wary of how overbearing legal intervention could inhibit the healthy and orderly development of AI,” he said.

South China Sea: US part of Philippines’ ‘calculated’ plan to tap oil, gas in waters disputed by China

https://www.scmp.com/news/asia/southeast-asia/article/3254887/south-china-sea-us-part-philippines-calculated-plan-tap-oil-gas-waters-disputed-china?utm_source=rss_feed

The Philippines is counting on the US and its allies to play a crucial role in its plans to explore energy resources in the disputed South China Sea, according to Manila’s envoy to Washington.

The country is seeking to parlay its deepening security ties with Washington into broader economic benefits, said Philippine Ambassador to the US Jose Manuel Romualdez.

“When the time comes that we are going to start exploring it, we’ll have the options to be able to see how we can secure the expedition,” Romualdez said in an interview in Manila. “We’re working closely with our allies, not only the US but also Japan and Australia,” he said.

Risk of South China Sea conflict ‘much higher now’: Philippines’ Marcos Jnr

The Philippines is exploring several options in its quest to tap the resource-rich South China Sea, waters that China claims almost in its entirety. The body of water is estimated to hold significant quantities of oil and gas, according to the US Energy Information Administration.

Inviting US companies to invest in the exploration as well as development efforts and discussions with countries like Vietnam that also have overlapping claims with China are among the possible courses of action, he said on March 5.

The Philippines imports almost all its fuel needs and has been trying for years to start energy exploration in the disputed waters, including through a partnership with China. Negotiations between Manila and Beijing have, however, stalled amid heightened tensions, with their coastguard vessels recently clashing again at sea.

Now the Philippines and its allies are “moving in a calculated way,” the envoy said, declining to provide more details on the energy plan, except to say that it is likely to happen within President Ferdinand Marcos Jnr’s term ending in 2028. “It’s part of our energy package,” he said, referring to a broad strategy to bring power costs – among the highest in the region – lower to attract investors.

As the Philippines builds its security alliances amid tensions with Beijing, it wants these partnerships to yield more trade and investment, said Romualdez. “While we have all these defence ties, the bottom line is economic prosperity. If we do not have economic security, we can have all these defence agreements, and it would mean nothing to us,” the envoy, a cousin of Marcos, said.

China is also keen on reaping benefits from the resource-rich waters. President Xi Jinping has called on the military to align its maritime strategy with economic development, in what may further intensify its dispute with the Philippines.

‘These are red lines’: Philippines won’t let China remove disputed shoal outpost

In a wide-ranging interview ahead of the US trade and investment mission this week, Romualdez said Marcos is trying to leverage his rising influence on the global stage to win deals for the country. Over the past year, Marcos has deepened security ties with the US. The Philippine leader last month addressed the Australian parliament and in May will be the keynote speaker at a regional security forum.

Marcos is scheduled to meet with US Secretary of Commerce Gina Raimondo on Monday before he heads to Germany for meetings with Chancellor Olaf Scholz, alongside other Southeast Asian leaders.

“President Marcos is very, very keen on trying to catch these investment opportunities open to us now because we’re in the centre,” Romualdez said. Even European countries are taking interest, he added.

Raimondo will lead a delegation to Manila that also includes about 20 American executives from Microsoft, United Airlines, Alphabet’s Google and some energy firms, aiming to strengthen economic relations and spur investment into an increasingly important ally. Raimondo will then proceed to Thailand, in hopes of boosting ties in areas including supply chain diversification.

While the Philippines’ strong relations with the US is an advantage, competition for investment among Southeast Asian nations is intense. Marcos has to prove that his government can provide a conducive business environment, including less red tape and lower electricity costs, the envoy said.

High power costs remain one of the biggest hurdles for investors, according to Romualdez, and is one of the incentives driving the Philippines’ push to explore its own energy resources.

Marcos’s defence chief, earlier this year, said that it’s increasingly urgent for the Philippines to pursue resource exploration in contested waters, as a key gas field nears depletion.

Last month, the nation’s foreign affairs secretary signalled openness to energy talks with Beijing, while maintaining that Manila would not yield control of any venture to China.

For Philippine Ambassador Romualdez, the time for being soft with Beijing is over.

“What is ours is ours, and we’re not going to stop,” he said of the nation’s plans to explore resources in its exclusive economic zone. “We’ll do it when we feel like it’s time for us to do it,” he said.

---

China cuts arms imports to rely more on its own weapons tech but Russia still biggest overseas supplier: SIPRI

https://www.scmp.com/news/china/military/article/3254853/china-cuts-arms-imports-rely-more-its-own-weapons-tech-russia-still-biggest-overseas-supplier-sipri?utm_source=rss_feed

China nearly halved its arms imports over the past five years as it replaced foreign weapons with its own technology but Russia still accounted for the bulk of Beijing’s overseas purchases, according to a Swedish think tank.

In a report released on Monday, the Stockholm International Peace Research Institute (SIPRI) said China’s arms imports in 2019-23 fell by 44 per cent from the previous five years, putting it 10th on the list of the world’s biggest buyers of foreign weapons.

Russia supplied 77 per cent of China’s purchases, including aircraft engines and helicopter systems, followed by France with 13 per cent.

Despite the war with Russia, Ukraine remained the third-largest source of China’s imports with 8.2 per cent, supplying gas turbines for destroyers and engines for China’s L-15 trainer/light combat aircraft.

SIPRI did not say how China’s imports from Russia and Ukraine changed after the Russian invasion in early 2022. But previous reports from the institute said Ukraine accounted for 5.9 per cent of China’s total arms imports in 2017-21.

Siemon Wezeman, a senior researcher with the SIPRI Arms Transfers Programme, said Russia could not replace Ukraine as a supplier for some of China’s equipment.

“When the ships and aircraft were designed and production started, Russia did not produce these types of gas turbines or jet engines – Russia actually depended also on Ukraine for these same engines for their own ships and trainer/combat aircraft,” Wezeman said.

The report said the rapid drop in Chinese imports overall was because of Beijing’s “growing ability to design and produce its own major arms” and would probably “decrease further as it develops this capacity”.

Wezeman said China had localised several systems in the past few years, such as engines for combat and transport aircraft that it imported from Russia and marine engines from Ukraine, France and Germany.

But there was no sign of a political change between Beijing and Kyiv.

“As far as we can see, any change in Chinese arms relations with Ukraine is linked to China becoming more capable to design and produce its own weapons and major components – as part of a long-existing policy,” he said.

“The invasions of 2022 may have given Ukrainian companies more problems to supply China, which may give an extra impetus to China’s do-it-yourself efforts. However, we have not seen an political rift between Ukraine and China impacting on the arms relations.”

Wezeman said that by the end of last year, new versions of aircraft and ships with Chinese engines came into production, with no need for foreign supplies.

“Helicopters are probably the last bulwark of difficulty. Helicopters are incredibly difficult to produce … China has a long-term problem with that. That’s why they kept producing under-licensed French helicopters and kept importing Russian helicopters,” he said.

“But also China has shown that it can now produce engines, rotors, and transmission systems. There are still Russian helicopters being imported, but in very limited numbers, and new Chinese designs are coming up and probably taking over in the coming years.”

Overall, Asia and Oceania had six of the world’s 10 largest arms importers in 2019–23: India, Pakistan, Japan, Australia, South Korea and China.

India topped the list with 9.8 per cent of the global arms imports, up from 9.1 per cent in 2014-18, largely driven by “tensions with Pakistan and China”.

Japan and South Korea also had a greater share of arms imports, with Tokyo increasing its weapons purchases by 155 per cent, and Seoul by 6.5 per cent. The United States was the biggest source for both countries.

“There is little doubt that the sustained high levels of arms imports by Japan and other US allies and partners in Asia and Oceania are largely driven by one key factor: concern over China’s ambitions,” Wezeman said.

“The [US], which shares their perception of a Chinese threat, is a growing supplier to the region.”

China had a 19 per cent share of arms imports in sub-Saharan Africa, narrowly overtaking Russia with 17 per cent, to become the largest arms supplier to the region in 2019-23.

European countries almost doubled their arms imports between 2014-18 and 2019-23, with more than half of the weapons supplied by the US. Ukraine emerged as the biggest European arms importer and the fourth largest in the world after at least 30 states supplied military aid to counter Russia’s invasion in February 2022.

Despite the ongoing war in Gaza and the Red Sea, the Middle East saw a 12 per cent decrease in arms imports in 2019-23 compared with the previous five years, while three countries – Saudi Arabia, Qatar and Egypt – were among the top 10 importers.

In arms exports, China sold weapons to 40 states, ranking fourth in global share on a steady 5.8 per cent although export volumes were down by 5.3 per cent.

Pakistan took 61 per cent of China’s arms exports, followed by Bangladesh with 11 per cent and Thailand 6 per cent.

The US’ global arms exports grew by 17 per cent, with weapons delivered to 107 states in the past five years, more than in any previous five-year period and far more than any other arms exporter. Its overall share rose from 34 per cent to 42 per cent.

“The [US] has increased its global role as an arms supplier – an important aspect of its foreign policy – exporting more arms to more countries than it has ever done in the past,” said Mathew George, director of the SIPRI Arms Transfers Programme.

“This comes at a time when [Washington’s] economic and geopolitical dominance is being challenged by emerging powers.”

France, for the first time, became the second-largest weapons exporter on 11 per cent, overtaking Russia, which had a 53 per cent decrease in arms export volume between 2014-18 and 2019-23.

China took 21 per cent of Russian exports after India, which had 34 per cent.

Do China’s leaders fully grasp foreigners’ concerns about the country?

https://www.scmp.com/comment/opinion/hong-kong/article/3254518/do-chinas-leaders-fully-grasp-foreigners-concerns-about-country?utm_source=rss_feed

China’s Luckin Coffee, founded in 2017, is the country’s largest coffee chain, with more stores and higher revenue than Starbucks. Its cashless grab-and-go model, where customers order on the app and pick up at the store, is key to its success. But for walk-in customers, and overseas visitors who have neither the app nor the e-wallets it accepts, this model is a nuisance.

I bought a Luckin coffee recently in Zhuhai. The young barista behind what looked like a till refused to take my order verbally, insisting I order from the app. After finding the app and surrendering some personal information, I finally placed my order, leaving with a bad taste in my mouth.

For mainlanders, Luckin Coffee is a shining example of China’s leadership in an increasingly cashless world, where people use digital devices to pay for everything from a taxi ride and restaurant meal to groceries and air tickets. Many Chinese are proud of carrying neither cash nor credit cards. Most business operators refuse to accept cash, let alone credit cards, even though it is against the law.

My Luckin Coffee encounter, however, highlights the cons of a cashless society, with daily life increasingly inconvenient for older, cash-using Chinese and overseas visitors – just as the government is keen to welcome back foreign tourists and businesspeople.

After nearly three years of self-imposed isolation to combat Covid-19, China reopened its borders at the end of 2022. The initial anticipation that tourists and business travellers would flood back evaporated quickly.

Last year, foreign arrivals were down 60 per cent from pre-pandemic levels. Anecdotes suggest international arrival and departure areas of major airports are eerily empty, with passengers on international flights mostly Chinese.

Foreigners are deterred from visiting China for multiple reasons, from the difficulties of securing visas and moving around the country to rising international concerns about China’s geopolitical tensions with the West.

There is also the predominantly negative Western media coverage of China’s political and economic developments, partly driven by China’s pivot to national security and its support for Russia after the invasion of Ukraine.

The problem with China these days is that every decision takes much longer to be implemented, and with great awkwardness and difficulty. China announced it had rolled out the red carpet to outsiders more than a year ago but its embassies and consulates still required visa applicants to go through cumbersome processes.

When the authorities finally realised foreigners were not flooding in, they started to take effective measures including granting visa-free travel to visitors from some Western countries, including Germany and France.

Recently, the government announced that identity verification would be simplified for travellers to link their international credit cards to e-wallets Alipay and WeChat Pay – a process that is a major source of complaints from tourists and travellers.

Whether those inducements will encourage more to visit remains to be seen. The difficulties of spending money in China is just a minor concern for foreign travellers, businesspeople in particular.

Last year, foreign direct investment into China fell for the first time in over a decade, according to official data, as Western governments and businesses talk about “de-risking” and “friend-shoring”.

How China can reassure nervous foreign investors before it’s too late

Chinese officials are apparently concerned, hence the slew of measures to reassure investors. The country needs foreign investment to bolster its slowing economy, not least because overseas firms employ tens of millions of Chinese workers.

But do China’s leaders truly appreciate the multitude and scale of concerns foreigners have about the country?

It is hard to be sure. For instance, China’s past success in attracting overseas investment have led some officials to develop a complacency bordering on arrogance: believing the country’s middle class of over 400 million is too big a market to miss, and that investors, although burned, would return.

The faster they dismiss that thought, the better. It is true that investors will go where the money is, irrespective of ideology. But it is equally true that the refrain that “China has become uninvestable” is constant and widespread because investors are worried about leadership and economic uncertainties.

If this thought is allowed to fester, it could be very bad for China. Beijing kicked out Facebook, Instagram, WhatsApp (all three now owned by Meta) and Google some years ago but they, along with other foreign social media companies, are doing a roaring business in the rest of the world.

Last Wednesday, Hong Kong released a summary of public views on the proposed Article 23 national security legislation which includes suggestions that Facebook and YouTube be removed, along with Telegram, Signal and other encrypted communication software.

It caused a major stir on social media, prompting the Hong Kong government to announce that it has no intention of banning any social media platform, saying those opinions were merely public suggestions.

Another Article 23 debacle would shatter government’s credibility

The concerns should not be dismissed, particularly for Hong Kong. An unfettered flow of information is crucial for the city to maintain its status as Asia’s financial centre. Last summer, the city’s bid to ban a controversial protest song sparked concern that American social media companies could choose to leave.

As Beijing and Hong Kong officials brace for a fallout from the Article 23 legislation, due to be completed soon, it is neither absurd nor sensationalistic to think Google or other foreign social media companies could leave the city, either of their own will or under pressure from their governments. In the unlikely event that they do, what would the future hold for Hong Kong?

Should Beijing fail to address investors’ fundamental concerns, letting the trickle of foreign capital flight become a flood, it will suffer greatly.

China’s ‘two sessions’ 2024: new mandate, party control push central bank beyond ordinary role

https://www.scmp.com/economy/china-economy/article/3254841/chinas-two-sessions-2024-new-mandate-party-control-push-central-bank-beyond-ordinary-role?utm_source=rss_feed

Wang Qishan’s phone was ringing, and the news was grim.

When Wang, then vice-premier of China, answered an emergency call from US Treasury Secretary Henry Paulson in 2008 – the year the global economy was upended by the subprime mortgage crisis – he was preparing for an investment fair in the southern city of Xiamen.

Wang, known even then for his hands-on experience defusing fiscal troubles, had planned to use the fair to assure overseas investors of the speed with which China was embracing global norms – but the financial tsunami coming from across the Pacific seemed a more pressing matter.

Rather than take drastic action to silo China from the US and insulate its economy from what already looked like a ticking time bomb, Wang promised his old friend the country would not dump its massive holdings of US treasury bills.

Though that news was a massive relief for the imperiled US economy, it did not come lightly. According to Paulson’s memoir, published in 2010, Wang ended the call with a warning: “I know you think this may end all of your problems, but it may not be over yet.”

If anything, that was an understatement. The earth-shattering event that followed – brought on by deregulation, speculation, over-leveraging and a reckless intrusion of Wall Street into housing markets – triggered a widespread reconsideration of the Western model by economists and cadres in China’s financial sector.

That decisive moment, and the years of tensions and trade war that would follow, hardened Beijing’s determination to walk a different road.

Those sentiments have reached an inflection point. In early December, following China’s twice-a-decade central financial work conference, the country’s top financial regulatory commission declared the country has “fully learned the lessons of Western financial development” and touted the features that distinguish socialist China from the “monopolistic, predatory and vulnerable” capitalist framework.

To codify these ideas, the People’s Bank of China (PBOC) – essential to President Xi Jinping’s explicit ambition of building the country into a “financial superpower” – will fall under stricter Communist Party control following a revision to the 42-year-old Organic Law of the State Council.

The amendment is expected to be approved by lawmakers at this year’s session of the top legislature, which will end on Monday.

For many observers, the PBOC has already departed from its ostensible mission to become a Western-style central bank. Those institutions, like the US Federal Reserve and the European Central Bank, carry relative independence in policymaking and hold inflation control as their primary responsibility.

Instead, two laws in the drafting process appear poised to more explicitly define the bank’s role as a powerful engine for Beijing’s economic prosperity – particularly its real economy, or non-financial sectors, which are proportionally far greater than those of the US.

It will step in to defuse risk for property markets, local debtors and small banks, and serve as a gatekeeper for financial security, both in terms of domestic markets and in countermeasures for potential Western sanctions.

“In China’s context, the party is always in charge of all major matters,” said Rui Meng, a professor of finance at the China Europe International Business School in Shanghai.

Preventing, resolving China’s financial risks are ‘eternal theme’: Xi Jinping

“A smaller, more streamlined but powerful central bank is a key pillar of the ambitions [to be a] financial superpower.”

On the surface, last year’s overhaul of the financial regime seemed to have weakened its independence, with a new party body – the Central Financial Commission, headed by Premier Li Qiang and with daily operations overseen by Vice-Premier He Lifeng – at the pinnacle of decision-making.

Some of the PBOC’s functions, like oversight of financial holding companies and consumer rights protection, have been absorbed by the newly established National Administration for Financial Regulations and the China Securities Regulatory Commission.

And in terms of personnel, bank governor and party secretary Pan Gongsheng – who replaced Yi Gang as governor last July – is not even a full or alternate member of the party’s powerful Central Committee.

However, as Xi enumerated in a speech at the Central Party School in January, success for the country’s broad financial aspirations will rest on several factors, a strong central bank among them.

With the volume of change already undertaken and in the works, Rui said, the question of whether the PBOC resembles its Western peers is no longer relevant.

“It has been assigned important tasks,” he said. The new central bank has become focused on fewer tasks, but they are more vital, and ones Western central banks [seldom do]: serving the economy and fighting risk.”

The new mandate comes after years of deep analysis of the Western financial system, changes in domestic circumstances and rising geopolitical tensions.

After the trade war launched during the Donald Trump administration and an intensified campaign against China’s tech sector from Trump’s successor, Joe Biden, Beijing has only had greater cause to spurn the Washington consensus on most matters, finance included.

It has also watched with great interest the situation in Russia, where blanket financial sanctions – including the freezing of central bank assets and its removal from international financial messaging service Swift – have been imposed after the Ukraine war began in February 2022.

Consequently, China has stepped up its criticism of US hegemony and weaponisation of the dollar while prioritising risk prevention and control in its financial work, which includes precautionary measures and counteroffensives against sanctions regimes both real and hypothetical.

Analysts have expected greater functionality for the Chinese central bank in defending financial security, as well, as it has an irreplaceable role in handling several issues of concern: internationalisation of the yuan; establishing a digital currency; backing the country’s global infrastructure strategy, the Belt and Road Initiative; managing capital flows and countering sanctions in the event of a financial decoupling.

“Beijing has prioritised financial security and control against this international and geopolitical backdrop. The PBOC plays a central role here,” said Yan Shaohua, a researcher with Fudan University’s Institute of International Studies.

“A superpower like China has to make precautions and contingency planning for a full-blown financial war, even though it’s unlikely – at least for now.”

Beijing’s yuan internationalisation plan, which promotes greater use of the Chinese currency in overseas payments, trade settlements, forex trading and government reserves, dates back to 2009, when former PBOC governor Zhou Xiaochuan approved its use for trade settlements on a limited basis.

Zhou spearheaded reform of Beijing’s financial system to bring the bank’s work closer to international norms in his early years at the helm, instituting a managed float regime for the yuan’s exchange rate in July 2005, as well as liberalisation of current accounts and the recruitment of overseas Chinese talent to restructure operations.

After the global financial crisis, he spent time and political capital on improving mechanisms to rebalance the prominence of the US dollar, convincing the International Monetary Fund (IMF) in 2015 to add the yuan to the basket of currencies designated for special drawing rights, and was a pioneer among major economies in implementing a central bank digital currency, the e-CNY.

China has already slashed its holdings of US Treasury bills by over a third from its 2014 peak, down to US$770 billion in October, though they have slightly rebounded in recent months. It has also attempted to diversify its foreign reserves away from US dollar dependence.

These moves come in the context of broad directives from Xi, who has requested greater balance between financial security and opening up and called for an independent, secure and efficient financial infrastructure.

More foreign investors to get a crack at China’s repo market in latest tweak

Russia, Brazil and several other countries have been using the yuan more frequently. But the Chinese currency’s place in international trades remains far behind the US dollar.

The yuan’s share of cross-border purchases was 4.5 per cent in January, compared to 46.6 per cent for the US dollar according to Swift data – nearly double the figure from the previous year, but starting from a low baseline. Government foreign reserves held in yuan stood at 2.4 per cent of the total for the third quarter of 2023 according to the IMF, much lower than the US dollar’s 59.2 per cent.

To hasten the shedding of China’s reliance on Western financial infrastructure, authorities have also built the Cross-Border Interbank Payment System to make international yuan settlements easier. Thousands of financial institutions have signed on, and in 2022, 4.4 million transactions were handled by the system, processing a total of 96.7 trillion yuan (US$13.4 trillion) through its facility.

Meanwhile, transactions using the e-CNY have reached a scale of hundreds of billions of yuan, and the digital currency has made it across some borders via the mBridge project, conducted with the participation of the Bank for International Settlements. The currency is widely believed to have potential in bypassing sanctions.

The central bank is also expected to be more aggressive in fighting for China’s say in international affairs by firming up ties through the Belt and Road Initiative and the Brics bloc of emerging economies, as well as winning a more prominent spot in international organizations led by Western countries.

Lu Lei, deputy governor of the PBOC, discussed China’s position in “improving the international financial framework” at the G20 meeting of finance ministers and central bank governors in late February in Sao Paulo, Brazil.

The country has long demanded a higher voting share at the Washington-based IMF, contending the proportionality of its 6 per cent compared to the US’ 16.5 per cent in proposed reforms for the United Nations agency.

Were all these plans and initiatives to come to fruition, it would alter the domestic financial landscape in numerous ways. The size of the monetary supply pumped into the economy, cost of funds, direction of capital flows, international monetary cooperation would all irrevocably change, analysts said, as would the ways Wall Street banks and their Chinese peers do business in the world’s second-largest financial market - one with 452 trillion yuan in assets per PBOC figures.

During Yi’s tenure as central bank governor between 2018 and 2023, the PBOC has diverged from the policy approaches of the Federal Reserve, as the two countries are officially in different economic cycles.

Despite this, he resisted calls for debt monetisation and refrained from a massive stimulus, as the bank was preoccupied with the debt load that came from previous rounds of spending to offset market slowdowns and spur growth.

Instead, Yi, who earned a doctorate in economics in the US and worked as an associate professor there in the late 1980s and early 1990s, created structural tools to support the private economy, small businesses, tech and other areas spotlighted by the central government.

Now, under Pan, analysts anticipate a stronger pro-growth stance. The bank’s leadership and decision-making structures are more formally bound to the Communist Party, and the world’s second-largest economy is fighting a war of narratives to play up its prospects.

The central bank convened a meeting of regulatory officials and representatives from major banks in late February, rallying funding for five areas deemed a priority by Xi: science and technology, the green economy, inclusive finance, care for the elderly and the digital economy

Monetary authorities have also taken a firmer hand to boost growth directly . New loans in January hit 4.92 trillion yuan, a monthly record, adding to an already considerable balance of 22.75 trillion yuan for last year.

But in the present environment, China may be more reluctant to enhance capital account liberalisation or the free float of yuan exchange rates, measures long pushed by Western observers but viewed by Beijing’s policymakers as risky.

Alicia Garcia-Herrero, chief Asia-Pacific economist at French investment bank Natixis and a former adviser at the European Central Bank, downplayed the prospect of major liberalisation.

“We haven’t seen any additional reforms in terms of the way interest rates operate or capital controls,” she said.

At a press conference on Wednesday, held on the sidelines of the “two sessions” parliamentary meetings in Beijing, Pan announced the creation of two more relending tools for tech innovation and renovation, in line with the leadership’s call to fund the country’s upgrade to high-value industries and advanced manufacturing.

Pan said China has “ample monetary policy space” and a “deep toolbox” to accomplish its goals.

We’ll create a good monetary and financial environment for the operation of financial markets and the economy,” he said on Wednesday.

‘A step in the right direction’: China makes largest cut to key mortgage rate

“There is further room for more reserve requirement ratio cuts and lowering financing costs,” he said, after a surprising cut to the former by 50 basis points in January and a subsequent cut of 25 basis points to the mortgage reference rate.

Li Xunlei, chief economist at Zhongtai Securities, said special refinancing debts and the “three key projects” – affordable housing, renovations for urban villages and the construction of emergency public facilities – would need support from the Chinese central bank to bolster the money supply.

“Its balance sheet may expand further this year,” he wrote in a note last week.

The PBOC’s new role will be finalised with the passage of a law on financial stability and an amendment to the laws governing the bank.

According to a draft version of the revised PBOC law, the bank will legalise the digital yuan and spearhead the country’s financial security review process.

Jin Penghui, deputy director of the bank’s Shanghai headquarters, urged adoption of the amendment to reflect the PBOC’s changing responsibilities.

“The amendment should concentrate on the three tasks given to the PBOC: serving the real economy, controlling risks and deepening reforms, with a focus on building a strong central bank mechanism,” he told state media on the sidelines of the two sessions.

The proposed changes have not been met with enthusiasm from all quarters. Garcia-Herrero said passage would likely heighten concerns over whether the PBOC should still be defined by the standards of modern central banking.

“The latest changes have entrenched these doubts,” she said, citing its diminished autonomy in policymaking.

“This has made the PBOC more dependent on the party, in a nutshell. That’s a whole new ball game.”