• Xi, Biden conclude direct talks, progress for China-US relations in 1st call since 2022
• US ‘strongly opposes’ China’s renaming of areas along disputed Indian border
• China needs new strategy to counter US moves on global trade, analysts say
• China’s SMEs match modest manufacturing gains, but yet to show ‘strong rebound trend’
• China’s former justice minister Tang Yijun facing corruption probe, top anti-graft agency says
• Chinese smartphone giant Xiaomi sees robust demand for first EV, even as buyers face delivery wait times of more than 5 months
• China Construction Bank sees more policy support from Beijing, despite pressure on state-owned lenders to boost profit
• Kind China nephew transforms homeless uncle into ‘bossy CEO’, gifts him US$1,400 before family reunion after 25 years
• China joins chorus of condemnation over Israeli attack on Iranian consulate in Syria
• ‘New way of thinking’: Chinese researchers unveil unique strategy for tissue regeneration, function
• Ray Dalio says now is the time to buy ‘cheap’ Chinese stocks as Beijing works to revive the economy
• China burglar in hyper-real silicone old-man mask steals valuables worth US$14,000 is caught within 24 hours
• Southeast Asians swing towards China alignment as pro-Israel bias hurts US, new survey shows
• Malaysia foresees surge in Chinese tourist numbers as airlines launch new routes
• Mainland China, G7 responses to Taiwan escalation would harm all parties, research finds
• Tech war: updated US semiconductor export restrictions raise demand in China for Nvidia’s RTX 4090 graphics card
• As Myanmar’s civil war halts key India-funded transport project, will China take advantage?
• The great escape: 100 huskies run amok in China shopping centre after canine cafe door left open
• China’s military to hold live-fire exercise on Myanmar border as fighting continues
• ‘Very bad idea’: US-China full-scale trade war unlikely but soft-power gap will persist, top scholar says

Xi, Biden conclude direct talks, progress for China-US relations in 1st call since 2022

https://www.scmp.com/news/china/diplomacy/article/3257549/xi-jinping-joe-biden-conclude-phone-call-xinhua-says?utm_source=rss_feed

Chinese President Xi Jinping and his US counterpart Joe Biden spoke by phone on Tuesday, as the two countries sought to make headway in their limited areas of aligned interests amid heightening tensions between the two powers.

“The two heads of state had a candid and in-depth exchange of views on Sino-US relations and issues of common concern to both sides,” state news agency Xinhua reported.

A senior official from the White House said ahead of the call that the leaders would discuss progress on the agreements reached during their November summit in California, which effectively hit the pause button on deteriorating bilateral relations.

Cooperation on counter-narcotics, risk and safety issues related to artificial intelligence, the resumption of military-to-military communication channels and climate issues would be covered, she said.

The official also said that Secretary of State Antony Blinken is scheduling a trip to China in coming weeks and Treasury Secretary Janet Yellen is also visiting the country this month. The two sides are also expecting a call between their top military officials “soon”.

After last year’s summit with Xi, seen as a success in Washington, Biden told reporters that “[the Chinese leader] and I agreed that each is willing to pick up the phone and call directly and be heard immediately”.

Xi and Biden – who were in California for the Apec leaders’ meeting – spent several hours together at Filoli, a rural estate in Woodside, south of San Francisco, which served as the backdrop for the popular soap opera Dynasty in the 1980s.

According to Beijing’s statement published after the summit, Xi said the Biden administration’s control measures “have seriously harmed China’s legitimate interests”.

He told Biden the measures were “suppressing China’s science and technology to hinder China’s high-quality development and deprive the Chinese people of their right to development”.

Hours later, at a dinner organised by the National Committee on US-China Relations, US Commerce Secretary Gina Raimondo responded that Washington was “adopting targeted, precise protections [so] our most sensitive technology … cannot be used against us”.

She added that the measure should not be seen as an obstacle to cooperation between the two sides on matters of mutual interest.

Xi also made several references to Taiwan, calling on the US not to support independence for the island and to stop selling arms to Taipei. According to the readout, Biden assured the Chinese leader that Washington’s attitude towards the island had not changed.

Beijing regards the island as part of China and has not renounced the use of force to bring it back under its control. Like most countries, the US does not recognise Taiwan as independent, but is opposed to any unilateral change to the island’s status quo.

The latest call is part of the “ongoing effort” between the two leaders to “maintain regular open lines of communication, to responsibly manage competition and prevent unintended conflict,” the White House official said.

Xi and Biden last spoke by phone in July 2022, when tensions were soaring between Washington and Beijing over a proposed trip to Taiwan by Nancy Pelosi, in her role as US House speaker.

Military-to-military communication channels between the two powers were severed after Pelosi’s visit a few weeks later and were only restored after the Woodside summit.

Since then, military officials from both sides met at the Defence Policy Coordination Talks in Washington – where they exchanged contrary views over Taiwan – in early January.

This week, the two countries plan to hold a Military Maritime Consultative Agreement meeting in Honolulu.

The White House official said that some progress had been made on the commitment to cooperate on anti-narcotic measures, another outcome of last year’s Xi-Biden summit.

While China has implemented some initial measures to restrict the flow of chemicals used to produce illicit synthetic drugs, there is still a need for substantive law enforcement actions and close consultations from both sides, she said.

China and the US will also hold an AI dialogue in the coming weeks, to enhance mutual understanding in terms of managing the risks associated with artificial intelligence technology.

On economic and trade issues, the official said Biden would reiterate concerns about China’s “unfair economic practices” on his call with Xi and that the US would continue to prevent its advanced technologies from being used to undermine the country’s national security.

Biden was also planning to raise concerns over human rights in China’s Xinjiang and Tibet regions, as well as Hong Kong’s autonomy, while reaffirming the US stance on the one-China policy and reiterating the importance of peace and stability across the Taiwan Strait.

Other issues that the two leaders will touch on include the denuclearisation of the Korean peninsula, the war in Ukraine, and tensions in the South China Sea, according to the official.

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US ‘strongly opposes’ China’s renaming of areas along disputed Indian border

https://www.scmp.com/news/china/article/3257624/us-strongly-opposes-chinas-renaming-areas-along-disputed-indian-border?utm_source=rss_feed

Washington has criticised Beijing’s list of 30 new names for places along the 1,865-mile (3,000km) disputed Himalayan border between China and India, formally known as the Line of Actual Control, as yet another “unilateral attempt” to reassert its territorial claims.

“The United States strongly opposes any unilateral attempts to advance territorial claims by incursions or encroachments, military or civilian, across the Line of Actual Control,” a US State Department representative said on Tuesday.

On Sunday, the Post first reported about the Chinese Ministry of Civil Affairs’ fourth list of “standardised” names for places, including mountains, rivers, residential areas in the Indian-administered Arunachal Pradesh state, which China calls Zangnan and claims as part of the Tibetan autonomous region.

After the report was picked up by several Indian news outlets, New Delhi’s foreign affairs ministry rejected Beijing’s “senseless attempt” at “inventing” names and “altering reality”.

“If today I change the name of your house, will it become mine? Arunachal Pradesh was, is and will always be a state of India. Changing names does not have an effect,” the Indian external affairs minister, Subrahmanyam Jaishankar, said on Monday.

“Our army is deployed at the Line of Actual Control,” he was quoted as saying by India’s news agency ANI.

The two nuclear-armed neighbours have held 21 rounds of military-level talks since 2020, when at least 20 Indian and four Chinese soldiers were killed in a fight along the border. No breakthrough was achieved during the latest meeting in February as both sides agreed to keep communicating while also positioning extra troops and equipment. Disagreements over the poorly demarcated border led to a war between the countries in 1962.

Last month, a tunnel inaugurated by Prime Minister Narendra Modi in Arunachal Pradesh became the latest flashpoint. As India and China traded warnings and made overlapping claims of national sovereignty, Washington openly sided with its Indo-Pacific partner New Delhi – angering Beijing.

“The United States recognises Arunachal Pradesh as Indian territory,” a State Department representative said in a press briefing. Beijing then accused Washington of trying “to provoke and take advantage of other countries’ conflicts to serve its selfish geopolitical interests”.

Arunachal Pradesh, located on India’s eastern tip, is claimed in its entirety by China. The state shares historical ties with Tibet and is home to the Tawang Monastery, where the sixth Dalai Lama was born in 1683. Buddhists account for the fourth-largest religious group there, following Christians, Hindus and a mix of other local religions.

US sharing of intelligence with India in China border clash seen as pivotal

After being largely neutral on the dispute for decades, the US in recent years has strengthened its cooperation with New Delhi, including a more active role in sharing intelligence as part of its Indo-Pacific strategy to check Chinese activity in the region.

In its October 2022 National Defence Strategy, the administration of President Joe Biden pledged that it would support US allies and partners when they encounter “acute forms of grey zone coercion” from China’s “campaigns to establish control over the East China Sea, Taiwan Strait, South China Sea and disputed land borders such as with India”.

Real-time intelligence provided by the US about Chinese positions along the disputed line prepared India to successfully ward off a potential Chinese military “incursion” in December 2022, marking the first time Washington passed on key information on Chinese strength along the Sino-India in advance to its Indian counterparts.

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China needs new strategy to counter US moves on global trade, analysts say

https://www.scmp.com/economy/china-economy/article/3257589/china-needs-new-strategy-counter-us-moves-global-trade-analysts-say?utm_source=rss_feed

Washington’s efforts to divert international supply chains from China are already making enough of an impact to drive recommendations for a new game plan from analysts and manufacturers, in their view an essential step to counter a fragmentation of trade that is already under way – and likely to worsen in the coming years.

“The US strategy, despite the interruption of the coronavirus pandemic, is generating results,” wrote Liu Yuanchun, a prominent government adviser, in an article for Beijing Daily published last month.

“We must have deep analysis of the geopolitical situation and economic strategies.”

Liu, head of the Shanghai University of Finance and Economics, said subsidies provided through laws like the United States’ Infrastructure Investment and Jobs Act, Inflation Reduction Act and Chips and Science Act will continue impacting exports from China to the US and European Union.

“China’s competition with Japan, South Korea and Germany is already [heated], especially in the areas of new energy, vehicles and shipbuilding,” he warned.

“Therefore, China may have to go through some intensive adjustment with these countries that recorded trade deficits with us.”

Liu also called for more endeavours to tap opportunities in emerging markets, building on a trend that has already begun.

Chinese exporters have stepped up their operations in Mexico and Southeast Asia, both to explore alternative customer bases and as a back door into the US market. Last year, trade value between China and Mexico rose 6 per cent from the year before to reach US$100.2 billion.

Liu’s warning came as US politicians have ramped up their rhetoric around China in the run-up to November’s presidential election, with restrictions to match.

US President Joe Biden has already released a strong statement suggesting future measures against Chinese electric vehicle imports over national security concerns, and other issues have been widely discussed, including industrial overcapacity and the use of third countries to bypass trade barriers.

In particular, Washington has maintained its campaign to limit China’s access to advanced technologies, with stricter rules over the trade of semiconductors taking effect on Thursday.

But despite strains in the relationship, China and the US are likely to hold more bilateral talks later this week. US Treasury Secretary Janet Yellen is scheduled to visit Guangzhou to hear from American businesses regarding industrial overcapacity and intellectual property protection before heading to Beijing for formal discussions with her Chinese counterparts.

China’s investment in Mexico is up – but is dodging US tariffs the whole story?

However, some have expressed doubt much substantial progress can be made on economic matters, given the scope of the two countries’ differences.

Norman Cheng, founder of Strategic Sports – one of the world’s largest helmet makers with factories in China, Southeast Asia and Europe – said that the global economy is in a period of transition that is affecting every aspect of his business.

“The future will be a ‘fragmented’ world, where each market has its unique approach, and suppliers must find different ways for each factory [to adapt], even though it means higher costs,” he said.

Cheng added he expects his new factories in Vietnam and Portugal will be mature and profitable within five or 10 years.

“Due to a decrease in overseas orders, plants in China must consider what they can do in the future, to develop the Asian and European markets or provide products specifically for the Chinese market,” he said.

A senior executive at a manufacturing plant with operations in China and other neighbouring countries also noted the changing nature of her factories as supply chains shift.

“Plants in India are benefiting from the [government’s] ‘Make in India’ initiatives, and multinational brands are bullish on the rise of the Indian market,” she said, declining to provide her full name or that of her company due to the sensitive nature of the issue.

“Vietnamese plants have gradually matured in producing mid- to low-end products; many high-end productions are [retained] in China due to the complex processes [involved].”

A report issued by Allianz Trade in March pointed out that a move to stronger protectionism by the United States “would entail losses for economies that are dragged into a trade war”, particularly those which rely on globalised supply chains.

Such an escalation would hit the textile, computers and electronics industries in China hardest, the report stated, while the US will see the worst consequences in its transport equipment sector.

Brian Wong, a fellow at University of Hong Kong’s Center on Contemporary China and the World, echoed the grim prognosis, saying a “new trade war” would probably be “substantially more impactful and disruptive” than what was seen during the tenure of Biden’s predecessor, Donald Trump.

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China’s SMEs match modest manufacturing gains, but yet to show ‘strong rebound trend’

https://www.scmp.com/economy/economic-indicators/article/3257579/chinas-smes-match-modest-manufacturing-gains-yet-show-strong-rebound-trend?utm_source=rss_feed

China’s small and medium-sized companies have “yet to display a strong trend of rebound” despite showing slight improvement in business sentiment in March, according to an independent survey, following an equally modest recovery in manufacturing activities last month.

The CKGSB Business Conditions Index – a measurement of private sector sentiment for sales, revenue, the financing environment and inventory – rose from 51.6 in February to 52.1 in March, according to data published by the Cheung Kong Graduate School of Business (CKGSB) on Monday.

Like the purchasing managers’ indices (PMI), the monthly gauge – which surveys small and medium-sized firms – the 50-point mark separates growth from contraction.

“The index is currently still at watershed levels at the reading of 50, it has yet to display a strong trend of rebound,” said the school, which has been publishing the data since September 2011 from a monthly survey of alumni.

Respondents to the survey are mostly executives of successful small and medium-sized (SMEs) enterprises, who are asked to rate aspects of their business that they expect to increase and improve, remain unchanged, or decrease over the next six months compared to the same period a year earlier.

“Our sample size came from SMEs that are doing comparatively well. Therefore, the actual business environment for enterprises in China would be worse than what our index reflects,” the school added.

Market observers have been assessing whether recent economic indicators, which appeared to beat market expectations, would be short lived as China’s economic recovery from last year has been difficult and continued to be dragged down by a property slump.

The modest growth shown through the business conditions index echoed China’s official manufacturing PMI data in March, which showed a rebound to 50.8 from 49.1 in February.

The official reading ended five consecutive months of contraction, and was the highest since March last year.

The data came as other economic indicators also displayed modest upticks for the first two months of the year – including industrial output, retail sales and fixed-asset investment.

In the business conditions index, two of the four surveyed areas – sales and revenue – improved last month, while subindexes for financing and inventory weakened.

The financing environment, in particular, dropped from 45.6 in February to 45.1 in March.

China’s factory activity hits 1-year high in latest sign of economic recovery

Financing is the only subindex that reflects current business conditions, while the other three points to outlook, according to the school.

The indicator for inventory rose from 49.1 to 50, suggesting an expectation for reduced inventory.

Surveyed businesses also expected costs to rise, which the school said “does not necessarily reflect a worsening operating environment”, as it could indicate increased investment budgeted from optimism amid a recovering economy.

Meanwhile, respondents expected drops in investment and job openings, with the school saying the two indicators are strongly interrelated, and “worth paying attention to”.

The school added that the survey also showed that while there were improvements in “mid-price range products”, it continued to trend on a low trajectory, reflecting “enormous pressure” on China’s prices.

China has been seen as facing growing risks for a deflation with weak consumer demand, an accusation that Beijing continued to reject.

It has set its gross domestic product growth target at “around 5 per cent” for this year, while China is targeting consumer prices to grow by 3 per cent following 0.2 per cent growth last year.

China’s former justice minister Tang Yijun facing corruption probe, top anti-graft agency says

https://www.scmp.com/news/china/politics/article/3257603/chinas-former-justice-minister-tang-yijun-facing-corruption-probe-top-anti-graft-agency-says?utm_source=rss_feed

China’s former justice minister Tang Yijun is facing a corruption probe, the county’s top anti-graft agency has said.

In a brief statement released on its website on Tuesday, the Central Commission for Discipline Inspection, China’s top anti-corruption and political disciplinary agency, said Tang, 63, chairman of the Jiangxi provincial political advisory body, was “undergoing disciplinary review and supervisory investigation” and was “suspected of serious violations of discipline and law” – a euphemism for corruption.

Tang was appointed as justice minister in April 2020, taking over from Fu Zhenghua, a former top police officer who was also placed under investigation a year after he stepped down from the same post.

‘Not even one’: China pulls up lower-level corruption fighters over lack of cases

Fu, once one of China’s most powerful police chiefs, was accused of being part of a “political clique” led by former public security vice-minister Sun Lijun. He was jailed for life in September 2022 for taking 117 million yuan (US$16 million) in bribes and for using his position to cover up his brother’s crimes.

Wu Yingai, who was justice minister from 2005 to 2017, was stripped of her party membership four months after stepping down, after it was discovered that a senior law official had secured promotions using fake credentials.

Tang was removed from the post of justice minister in February 2023, a month before he was transferred to the political advisory role in Jiangxi province.

The downward trajectory of Tang’s political career began in October 2022, when he failed to secure a seat on the Communist Party’s 300-member Central Committee at the 20th national Congress, despite being a minister who was still years away from retirement

It is extremely rare for key Chinese ministers to be left out of the top decision-making body.

Tang had spent almost four decades climbing the political ladder in eastern Zhejiang province, where Chinese President Xi Jinping served as provincial party secretary for five years from 2002.

In 2016, after being sidelined for five years in a local political advisory body, Tang was appointed mayor of Ningbo after the downfall of the previous mayor, Lu Ziyue, and became the city’s party boss just three months later.

Chinese football officials given long jail terms over corruption scandal

His rapid political rise continued with a promotion to the post of provincial party leader of Zhejiang in 2017, and then becoming an alternate member of the Central Committee – the party’s elite ruling body – five months later.

Tang was transferred to northeast China’s Liaoning province in 2017 to be deputy party chief, and appointed governor of Liaoning in 2018, a role he held for two years before being promoted to justice minister.

Chinese smartphone giant Xiaomi sees robust demand for first EV, even as buyers face delivery wait times of more than 5 months

https://www.scmp.com/tech/big-tech/article/3257587/chinese-smartphone-giant-xiaomi-sees-robust-demand-first-ev-even-buyers-face-delivery-wait-times?utm_source=rss_feed

Chinese smartphone giant Xiaomi is seeing continued strong demand for its first electric vehicle (EV) – the SU7, short for Speed Ultra 7 – even as potential buyers face delivery wait times of more than five months, the South China Morning Post has learned.

Buyers of the standard SU7 model, which costs 215,900 yuan (US$29,859), are expected to wait at least 21 weeks for delivery on orders placed as of Tuesday, according to checks made by the Post on the Xiaomi Car app.

Xiaomi had locked in an estimated 40,000 orders as of Tuesday, according to a report by Chinese media Yicai. Xiaomi said it had nearly 89,000 pre-orders in the first 24 hours of sales last week, but buyers have seven days to cancel.

Once orders are locked in, buyers forfeit their 5,000 yuan deposit. The return rate so far is estimated to be 40 per cent, according to data from Chinese auto media Car Fans.

The Beijing-based company recorded sales of around 50,000 SU7 units in just the first 30 minutes of the EV’s commercial launch on March 28. During the Easter weekend, more than 50 Xiaomi showrooms in 29 mainland cities where the SU7 is on display saw people queue for hours to check out the EV.

Xiaomi did not immediately respond to a request for comment on Tuesday.

Shares of Xiaomi surged as much as 16 per cent on Tuesday on the back of domestic consumers’ favourable response to the SU7. The firm posted gains of 8.7 per cent at the close of trading, adding HK$33.4 billion (US$4.3 billion) to its market capitalisation.

High demand for the SU7 shows a bright spot in the world’s largest automotive and EV market, which has been shrouded in gloom amid intensifying competition and a bruising price war.

Xiaomi plans to churn out about 5,000 units of the SU7 this month, according to Yicai’s report on Tuesday that cited industry sources. On Monday, Xiaomi said it was ramping up production capacity to meet demand and cut delivery wait times.

Lei Jun, Xiaomi’s billionaire founder, chairman and chief executive has said the SU7, which has a 700-kilometre (440-mile) battery life, was benchmarked against Tesla’s Model 3. He claimed that 90 per cent of the SU7’s specifications surpassed those of Tesla’s model.

The entry cost of the SU7 is also about 30,000 yuan below the Model 3’s starting price.

China Construction Bank sees more policy support from Beijing, despite pressure on state-owned lenders to boost profit

https://www.scmp.com/business/banking-finance/article/3257609/china-construction-bank-sees-more-policy-support-beijing-despite-pressure-state-owned-lenders-boost?utm_source=rss_feed

China Construction Bank (CCB) expects Beijing to introduce more policy support to bolster the economy, even as the nation’s major state-owned lenders continue to face pressure to boost profits amid the prospect of benchmark rates decreasing further.

“China’s economy is showing signs of recovery, but there is room for more policy support, and big banks need to continue to support the real economy,” CCB chief financial officer Sheng Liurong said on Tuesday during the bank’s latest financial results briefing.

Sheng said China’s financial regulators could continue to lower financing costs as a means to shore up confidence. Key benchmarks, including banks’ reserve requirement ratios (RRR) and loan prime rates (LPR) – the pegs for household, corporate and mortgage loans – could see further cuts in the coming months, he added.

That view by CCB, the country’s second-largest bank by assets, reflects the confidence of major state-owned lenders in the strategic policy measures being pursued by Beijing.

In February, the People’s Bank of China (PBOC) unveiled a 25-basis-point cut to the five-year LPR, a key mortgage benchmark, to boost housing demand, marking the most significant cut that the mainland’s central bank has made since it revamped the system in 2019. The PBOC last cut the rate by 10 basis points in June.

That measure followed the central bank’s announcement in January, cutting the RRR by 50 basis points from February 5, in a bid to inject 1 trillion yuan (US$138 billion) worth of liquidity into the market.

Still, bank profits, measured by net interest margins (NIMs), have been further squeezed by a cut to the five-year LPR.

‘Positive signs of recovery’: China’s largest state-owned banks post earnings growth

The NIM of CCB dropped to 1.7 per cent from 2.01 per cent a year ago, while Bank of China (BOC) – the country’s oldest and largest international lender – saw its NIM fall to 1.59 per cent from 1.75 per cent in 2022.

The two banks’ senior executives, who hosted separate earnings briefings on Tuesday, said they have taken proactive measures to fend off the hit on profitability.

“[The bank’s] interest spread should still face great pressure this year,” said Zhang Yi, executive vice-president of BOC. The LPR cuts “will impact the entire year this year”.

He said BOC will continue to optimise its asset structure to fully protect the demand for real financing and increase the investment in personal housing and consumer loans.

China’s monetary mix more ‘effective’, economy-focused than West’s easing policy

“Retail loans are among our loan types with high yields, less capital occupation and low risk costs,” BOC’s Zhang said. “This year, we will increase our efforts in allocating credit resources in this regard.”

Meanwhile, CCB president Zhang Jinliang singled out a few measures to protect the bank’s profit, including stabilising its interest income, boosting its non-interest income, improving its capital structure and reducing its operating costs.

“We will also focus on preventing and containing credit risks by monitoring key areas such as property and local government debt,” he added.

Sheng, CCB’s CFO, pointed out that the bank will continue to improve its capital structure by raising the proportion of income-generating assets relative to total assets, while increasing its investments in government bonds to boost profit.

National and local debt plays a role in taxation as these debts’ after-tax returns are relatively high, forming favourable support for the bank’s profits, Sheng said.

Kind China nephew transforms homeless uncle into ‘bossy CEO’, gifts him US$1,400 before family reunion after 25 years

https://www.scmp.com/news/people-culture/trending-china/article/3255074/kind-china-nephew-transforms-homeless-uncle-bossy-ceo-gifts-him-us1400-family-reunion-after-25-years?utm_source=rss_feed

A thoughtful nephew in China who transformed the look of his shabby homeless uncle and gifted him 10,000 yuan (US$1,400) to attend a family reunion, has captured hearts on mainland social media.

The story began 25 years ago when Tan Changgen, originally from Loudi in the central Hunan province, lost contact with his family while away looking for work.

Recently, social worker Zhang Shiwei found him living under a bridge in southeastern Guangdong province.

“We inquired about his circumstances and he said he hadn’t been home for many years and wasn’t sure if his house was still standing. He wanted volunteers to help him find his family,” Zhang told The Paper.

Tan’s family had assumed he had passed away a long time ago.

However, on March 3, through the dedicated efforts of social workers Tan was reunited with his nephew Tan Wuzhao.

Although the nephew immediately recognised his uncle from a photo, the lengthy separation made Uncle Tan initially sceptical that his nephew was who he said he was.

Eventually though, trust was established.

Realising his uncle was concerned about his shabby appearance, the nephew spent half a day helping him achieve a look he had once favoured and which he referred to as a “bossy CEO”.

The generous nephew began by booking a hotel room for his uncle to take a shower, followed by a visit to the barber for a haircut. He then gave him a smart business suit to wear and gave him 10,000 yuan.

“I did not want my grandmother to see my uncle returning home in that state, it would have saddened her. I remembered what my uncle looked like when he was young, and based the transformation on that. I gave him a makeover,” the younger Tang said.

As seen in the online trending video, his uncle previously had long unkempt hair and a beard, was wearing shorts – even though it was winter – and was huddled in a blanket.

After the transformation, he appeared in a formal suit with a crisp, white shirt and his hair neatly styled, embodying the successful businessman look which is highly popular in Chinese television dramas and novels.

Proudly sporting his brand new look, Uncle Tan met his 86-year-old mother on March 4.

“My grandmother, who has been bedridden, wept and sat up in bed when she saw my uncle,” the nephew said, adding: “He said he wants to take good care of the elderly and spend some time at home with grandmother before making any further plans.”

The revamped appearance of the uncle sparked an online discussion.

“This is a true makeover, much better than those done by internet celebrities,” said one online observer.

“This nephew was raised well by his parents, he is warm, considerate and sensible,” another said.

“The nephew is filial, taking good care of his uncle before bringing him to see the elders so that it wouldn’t be so hard on them,” a third person said.

“His intentions are good, but giving a man a fish is not as good as teaching him to fish. The uncle might revert to his previous state in a matter of days,” one online observer cautioned.

China joins chorus of condemnation over Israeli attack on Iranian consulate in Syria

https://www.scmp.com/news/china/diplomacy/article/3257605/china-joins-chorus-condemnation-over-israeli-attack-iranian-consulate-syria?utm_source=rss_feed

China on Tuesday joined a host of countries including Russia in criticising Israel’s deadly attack on an Iranian diplomatic building in Syria, calling for an easing of tensions in the Middle East.

“China condemns the attack,” said foreign ministry spokesman Wang Wenbin. “The security of diplomatic institutions cannot be violated, and Syria’s sovereignty, independence and territorial integrity should be respected.”

“The current situation in the Middle East is turbulent, and we oppose any actions that lead to an escalation of tension.”

On Monday Iran said Israel had struck a consulate building in its embassy compound in the Syrian capital of Damascus, killing at least seven military advisers.

Iran’s Islamic Revolutionary Guard Corps said that among those killed were Mohammad Reza Zahedi, a top commander in its elite Quds Force, and his deputy Mohammad Hadi Haji.

Israel did not comment on the attack but Syria’s defence ministry said the attacks had come from the direction of the occupied Golan Heights.

‘Israel will be punished’: Iran supreme leader vows revenge for Syria strike

According to Iran’s ambassador to Syria Hossein Akbari, Israeli F-35 fighter jets launched six missiles in what he called a “criminal” and targeted act.

Israel has long carried out strikes on targets it believes are linked to Iran’s military and its allied armed groups. While it has reportedly ramped up on such attacks since the start of the Gaza war, Monday’s strikes signalled a significant escalation.

Syrian Foreign Minister Faisal Mekdad called the attack “heinous” and in a phone call with his Iranian counterpart Hossein Amir-Abdollahian on Monday, said they were a “flagrant violation” of international law.

Iraq, Oman, Pakistan, Qatar, Saudi Arabia and the United Arab Emirates have all condemned the attack, as has Russia which described Israel’s actions as “absolutely unacceptable and must be stopped”.

Matthew Miller, a spokesman for the US State Department, said Washington remained “concerned about anything that would be escalatory or cause an increase in conflict in the region”.

But Iranian Foreign Minister Hossein Amir-Abdollahian on Tuesday said Tehran had summoned a Swiss diplomat representing US interests in Iran to discuss the incident and highlight what it described as Washington’s responsibility.

Amir-Abdollahian had earlier said the attack was a violation of international conventions and called for a “serious response” from the international community.

Asia’s terrorism surge: Isis-K awakens sleeper cells in deadly strategy shift

Iran vowed to retaliate against the attack, with the foreign ministry spokesman saying it “preserves the right to take reciprocal measures and will decide the type of response and punishment against the aggressor”.

According to Iranian state media, President Ebrahim Raisi on Tuesday said: “Having failed to destroy the will of the resistance front, the Zionist regime has put blind assassinations back on its agenda to save itself.

“It must know that it will never achieve its goals and that this cowardly crime will not go unanswered.”

‘New way of thinking’: Chinese researchers unveil unique strategy for tissue regeneration, function

https://www.scmp.com/news/china/science/article/3257567/new-way-thinking-chinese-researchers-unveil-unique-strategy-tissue-regeneration-function?utm_source=rss_feed

Researchers in China have unveiled a new method of repairing injured tissue with the guidance of nerves, a strategy that could help patients with serious injuries, such as spinal cord injuries leading to paralysis, restore more function than current therapeutic approaches.

This new generation of neural construct implants – made of neural stem cells and inorganic biomaterials – was able to repair injured tissue and bone in rats with the guidance of nerves.

Tissue regeneration involves a complicated coordination of multiple body systems and signal pathways, including the central nervous system.

Musk’s Neuralink shows quadriplegic patient playing online chess with his mind

But most approaches to cell regeneration have typically relied on restoring cell activity while “neglecting the crucial roles of nerves in tissue repair”, according to a paper published in this month’s volume of the peer-reviewed journal National Science Review.

These attempts have led to “unsatisfactory therapeutic outcomes” for tissue engineering approaches, the researchers noted in their paper.

To address this gap, scientists from the Chinese Academy of Sciences developed a “new generation” of 3D-bioprinted neural constructs – a small implant containing neural stem cells – which they observed was able to regenerate skeletal muscle and bone in rats.

Paralysed rats implanted with the neural constructs were found to recover more hindlimb movement than the group of control rats, according to the paper.

The new neural construct “could provide a versatile platform for promoting multiple tissue regeneration” including the recovery of tissue function, the paper said.

Neural stem cells – the cells in the nervous system capable of self-renewal and differentiation into different cell types – “have the ability to reconstruct neural components”, according to the paper.

“The leading role of the nervous system in the human body means that reconstructing the neural components of injured sites is essential for ideal tissue regeneration and functional recovery,” the researchers said in their paper.

However, neural stem cells have drawbacks – they are fragile, and their differentiation is not controlled, which has limited their practical use.

To work around the limitations for their neural constructs, the researchers incorporated lithium, calcium and silicon, into a hydrogel along with the neural stem cells to improve survival rates and promote their differentiation into neurons.

The neural constructs – or inorganic bioinks – were then implanted into rats to test their efficacy. The implanted hydrogel dissolved in body heat and left behind the network structures of the stem cells and biomaterials.

When implanted into paralysed rats with induced spinal injuries, the scientists found that the neural constructs helped to reduce the lesion cavity that formed in the spinal cord as a result of the injury, and promoted the growth of neurons in the area.

This boost in neuron growth allowed for more functional injury repair, allowing the rats to gain back more hindlimb motion after eight weeks.

The scientists also tested the neural constructs in rats with skull defects, and they discovered that, compared to a control group that had formed more fibrous tissues, the rats with the construct were able to form more new bone.

Cutting-edge Chinese stem cell treatment ‘could help spinal cord patients’

The construct’s ability to repair muscle was also tested by implanting them into rats with cut leg muscles. After eight weeks, these rats formed more muscle fibres.

The study did have limitations, however, including potential long-term impact of the neutral constructs on the body’s inflammatory response, and the performance of the neural stem cells over a longer period of time.

“Overall, inorganic-biomaterial/neural stem cell-based neural constructs provide a new way of thinking and a new approach to promoting tissue regeneration from the point of view of neural modulation, which will shed light on biomaterial design for regenerative medicine,” the researchers said in the paper.

Ray Dalio says now is the time to buy ‘cheap’ Chinese stocks as Beijing works to revive the economy

https://www.scmp.com/business/markets/article/3257534/ray-dalio-says-now-time-buy-cheap-chinese-stocks-beijing-works-revive-economy?utm_source=rss_feed

Ray Dalio, the billionaire founder of world’s largest hedge fund, Bridgewater Associates, said now is the time to invest in beaten-down Chinese stocks as Beijing works to shore up the economy.

“The time to buy is when everyone hates the market and it’s cheap, which is now the case in Chinese equities,” especially as there are signs that the country’s economic leaders are preparing stimulus measures like quantitative easing and debt restructuring to deleverage the economy, he said in his LinkedIn blog on Tuesday.

“China’s problems … are manageable by Chinese leaders if they do their jobs well by being both smart and courageous. I think those who guide policy in China will eventually come around to dealing with the problems well,” he wrote.

Dalio’s remarks came as Beijing’s policymakers intensified efforts to revive the world’s second largest economy, which has been hobbled by a property market downturn, local government debt problems and deflation risks.

The central bank has lowered key interest rates and reserve ratio requirements in the last few months, and is now widely expected to resume buying treasury bonds to inject more liquidity into the economy.

Chinese stocks are now looking to recoup some US$10 trillion of losses from the last three years, with valuations hovering near a decade-low. The MSCI China Index tracking more than 700 companies traded at home and abroad has rebounded 12 per cent from a January low, ranking it among the best performers among major global peers during that period, according to Bloomberg data.

Foreign investors’ appetite for Chinese stocks continues to recover as they become less pessimistic about the prospects of a recovery. Offshore funds bought 22 billion yuan (US$3 billion) of yuan-denominated stocks in March, according to Stock Connect data, adding to 60.7 billion yuan of net purchases in February that snapped a six-month outflow from the onshore market.

To be sure, China’s problems could be still be cause for concern as its leaders need to restructure mounting debts or risk a “lost decade” like Japan’s, Dalio cautioned in a separate blog last week. Beijing needs both a deflationary deleveraging to reduce debts and easier monetary policy to support growth, which would be “difficult and politically dangerous” to engineer.

Meanwhile, geopolitical conflicts will also continue to drive global investors to diversify or leave China and to fear being discriminated against globally for being friendly to the country. That means China will continue to face difficulties attracting investment, said Dalio.

Bridgewater Associates, which manages over US$124 billion in assets, has been offloading Chinese shares in its portfolio in recent months. The hedge fund sold all of its stakes in low-cost retailer Miniso and wealth manager Noah Holdings in the final quarter of 2023, and trimmed its positions in Chinese equities, including PDD Holdings, Trip.com and Yum China, by 10 to 20 per cent.

The hedge fund had earlier joined a global exodus by getting out of 10 stocks including EV makers Xpeng and Li Auto and biopharmaceutical players HutchMed and BeiGene.

Still, none of the problems in China have outweighed its investment appeal, Dalio said, adding that the holy grail of investing is to have good uncorrelated return streams, and China will remain one of the core positions.

“To me the key question isn’t whether or not I should invest in China so much as how much I should invest,” he said.

China burglar in hyper-real silicone old-man mask steals valuables worth US$14,000 is caught within 24 hours

https://www.scmp.com/news/people-culture/trending-china/article/3256172/china-burglar-hyper-real-silicone-old-man-mask-steals-valuables-worth-us14000-caught-within-24-hours?utm_source=rss_feed

A burglar in China who tried to evade police by wearing a hyper-real silicone mask but was caught in less than 24 hours after committing the crime has caused much amusement online.

On March 6, police in Shanghai received a report of a burglary.

Four first-floor flats in a residential compound were broken into via their windows and cash and jewellery worth more than 100,000 yuan (US$14,000) in total was stolen.

Officers checked public surveillance cameras and discovered a suspicious elderly man wearing a mask. The camera captured him entering the compound but not leaving it.

Investigators found clues left by the burglar in one of the flats, matched it with their database and found a man with a criminal record, according to the Shanghai media outlet Xinmin Evening News.

To their shock, it was a man in his 40s who looked nothing like the elderly man in the surveillance footage.

In less than 24 hours, officers had located the man at a hotel 60km away from the police station. They retrieved all the stolen goods, theft tools and a hyper-real silicone mask.

The burglar, surnamed Tong, said he tried to use the mask to trick the surveillance camera and did not expect to be arrested so soon.

The mask trick reminded some of the Hollywood action spy film franchise Mission: Impossible, in which Tom Cruise, who plays the main character Ethan Hunt, uses disguise to complete his dazzling assignments.

However, Tong’s mask was rather poorly made compared to that of Cruise.

He confessed to having bought it online. On China’s e-commerce platforms, such masks are priced as cheap as a few dozen yuan.

The police did not specify what kind of trace they used to identify Tong. But on mainland social media, many speculated it was a SIM card that revealed his location.

China has required real-name registration for phone numbers and SIM cards since 2016.

During the Covid pandemic, China used itinerary codes to control people’s movements in public spaces, which also worked by tracking a person’s location through mobile phone connections.

Many online observers were amused by the burglar’s story.

In November 2023, another robber was arrested after falling asleep and snoring loudly during a break-in in southwestern China’s Yunnan province.

In 2013, a thief in eastern China’s Zhejiang province was caught while breaking into a house, because he laughed so loudly at a comedy film on TV that he was heard by the property’s owner.

Southeast Asians swing towards China alignment as pro-Israel bias hurts US, new survey shows

https://www.scmp.com/week-asia/politics/article/3257494/southeast-asians-swing-towards-china-alignment-pro-israel-bias-hurts-us-new-survey-shows?utm_source=rss_feed

For the first time, more people in Southeast Asia favour alignment with China over the United States, according to a new survey – driven by disillusionment with Washington’s foreign-policy actions and the economic benefits of Beijing’s Belt and Road Initiative, among other factors.

The Americans’ “strong, almost unquestioning” pro-Israel stance on the Gaza war, in particular, had led to “diminished confidence in US moderation and deliberation”, said Chong Ja Ian, an associate professor of political science at the National University of Singapore.

“This extends beyond the fact that there are large Muslim populations in Southeast Asia. US willingness to hold up and veto UN processes looking at Israeli behaviour have decreased trust in Washington’s commitment to the current rules-based international order,” Chong said.

US clout in Asean grows even as China still viewed as most influential: survey

The sixth edition of “The State of Southeast Asia” study was led by researchers from the ISEAS-Yusof Ishak Institute in Singapore and surveyed close to 2,000 Southeast Asians from January to February on key issues facing the region.

China saw a significant surge in popularity among respondents, with 50.5 per cent indicating that the Asian giant is their preferred choice of alignment compared with the US, up from 38.9 per cent a year earlier.

Conversely, the US saw a drop in popularity from 61.1 per cent last year to 49.5 per cent in the latest study.

China’s influence in the region was expected to “grow in the years to come if there is no balancer in the region”, said Sharon Seah, a senior fellow and coordinator of Asean studies at ISEAS-Yusof Ishak Institute.

“However, China’s ‘popularity’ is not matched by soft-power influence. The level of trust in China to ‘do the right thing’ has dropped, while the level of distrust saw a slight increase. Among those who distrust China, the most cited reason has to do with the fear of China’s military and economic power being used to threaten countries’ sovereignty,” said Seah, one of the researchers in the study.

Nonetheless, it was worthwhile noting the shift in a “binary choice question” among respondents, she said.

The shift towards China was “particularly evident” in Malaysia, Indonesia, Thailand, Brunei and Laos, the study said, as these states had benefited from Beijing’s Belt and Road Initiative. It found a 20 per cent increase in respondents’ preference for China in these countries.

Support for the US, meanwhile, has waned in Vietnam, Singapore, Myanmar and Cambodia, the study revealed.

The Philippines was an outlier, however, recording a significant increase in confidence in the Americans – primarily due to increasing tensions in the South China Sea.

“Its [Washington’s] backing from these countries has generally waned, except for the Philippines, which experienced a notable increase in confidence in the US, rising from 78.8 per cent last year to an all-time high of 83.3 per cent this year,” the study said.

However, this is a “variable and not a constant”, according to Chong.

“A lot will rest on what [China] does. Just as Beijing’s support for Russian aggression toward Ukraine raised questions about its willingness to support global stability and abide by established international law … any excessive behaviour in the South China Sea, towards Taiwan, in the East China Sea, or in support of North Korea is likely to diminish confidence in [China],” Chong said.

The region remains “pro-status quo” and any major power behaviour that “threatens to unsettle the status quo” is likely to be faced with scepticism, he added.

“Whatever benefits major powers may bring, excessive and/or unreasonable behaviour is likely to diminish trust. There will be recency bias as well as a negativity bias to such responses, especially if such action is seen to take away or threaten what Southeast Asian actors currently enjoy.”

The Israel-Gaza war has preoccupied the thoughts of respondents, the study found, with more than 46 per cent of those surveyed saying the war was a major concern for governments, with Muslim-majority countries ranking it as their top geopolitical concern.

More than half of Singaporean respondents also indicated the Israel-Gaza war was a top concern. But across the board, 41.8 per cent of those surveyed expressed concern that Israel’s assault on Gaza had gone too far, while close to one-fifth said they believed that Israel had a right to retaliate, subject to international law.

Only 8.8 per cent said that Israel had the right to retaliate as it sees fit. The survey also showed that 7.5 per cent of respondents believed Hamas’ attack on Israel could not be justified, while 5.8 per cent felt the opposite.

“While some states in the region support the position of maintaining a right of response to terrorist actions, there is a growing view that the proportionality of Israel’s response and the immense humanitarian cost that the response is exacting goes against the grain of international law,” Seah said.

While there was a religious element that influenced regional support for the Palestinians, the “growing humanitarian and human-rights violations are becoming a serious concern”, she added.

In addition to their concerns about extremist activities, many also mentioned diminished trust in the international rules-based order as a key issue.

“The ongoing Israel-Gaza conflict has emerged as a contentious issue in Southeast Asia, commanding significant attention in the region’s domestic politics. Despite its geographical distance, the conflict has reverberated strongly across this diverse multiracial and multi-religious region,” the study said.

About 27.5 per cent said their trust in international law and the rules-based order had been undermined by the war.

However, conflict in the Middle East is unlikely to divide the Association of Southeast Asian Nations, analysts say.

“Asean states are aware of the differences and nuances in each other’s positions – as they did in the case of the Russia-Ukraine war where the implicit understanding is that some states are unable or unwilling to speak out against Russia due to historical or military ties,” Seah said.

“In the case of Israel, fellow members understand the same differences in position, and this is reflected in the Asean joint statement acknowledging the respective national statements.”

The willingness of the US to veto UN processes on Israel’s excesses in Gaza had led to a perception that it was “willing to give a free pass to friends, to the extent of distorting UN processes”, Chong said.

“Making matters worse is the possibility that giving Israel what looks like a blank cheque has the potential of destabilising the Middle East, fossil-fuel supplies, and global supply chains,” he said.

“That there is a serious presidential candidate who calls into question US alliances [with Southeast Asia] and other international commitments and is against more open trade further worries Southeast Asia,” Chong added, referring to former US president Donald Trump who is contesting this year’s election against incumbent Joe Biden.

In March, the US toughened its stance on Israel, proposing a UN Security Council resolution that called for an immediate ceasefire in Gaza and an Israel-Hamas hostage deal.

Though the resolution was vetoed by Russia and China, it marked the first time Washington had supported a text that came up for a vote with the word “ceasefire” in it amid the conflict.

The US is one of five permanent members of the UN Security Council with veto powers alongside Britain, France, China and Russia.

Previously in February, the US vetoed a draft Security Council resolution calling for an immediate humanitarian ceasefire in the Gaza Strip. Of the 15-member Security Council, 13 countries voted in favour of the resolution, with Britain abstaining.

This marked the third US veto of a Security Council resolution demanding a ceasefire in Gaza, which came shortly after Washington circulated a rival resolution that would have supported a temporary ceasefire.

Malaysia foresees surge in Chinese tourist numbers as airlines launch new routes

https://www.scmp.com/news/asia/southeast-asia/article/3257513/malaysia-foresees-surge-chinese-tourist-numbers-airlines-launch-new-routes?utm_source=rss_feed

Tourism authorities in Malaysia say they are confident of achieving their target of attracting more than 5 million tourists from China this year, supported by the frequency of flights between the two countries.

Tourism Malaysia Director General P. Manoharan said that last year Malaysia received a total of 1.47 million tourists from China.

“We are positive about reaching over 5 million tourists from China because the current flight frequency is more than 247 flights weekly, and in terms of seat capacity, there are almost 4.9 million seats available from China to Kuala Lumpur,” he told reporters after attending an event to celebrate new routes from Sichuan Airlines and China Southern Airlines connecting to Kuala Lumpur.

“Flight frequencies will increase, and new routes as well, so we are positive about reaching this target.”

The first Sichuan Airlines flight from Chengdu landed at Kuala Lumpur International Airport at 10pm on Sunday, Malaysian government news agency Bernama reported. The first China Southern Airlines flight from Shenzhen arrived at 12.30am on Monday morning, it added.

Manoharan said that airlines from China have also shown interest in establishing direct flights to other major Malaysian cities such as Penang, Johor Bahru and Kuching.

Singapore pulls ahead in Southeast Asia’s race to win back Chinese tourists

“Sichuan Airlines is planning to operate flights [from China] to Kuching,” he said. “We welcome airlines from China to operate direct flights to Kuala Lumpur, in addition to charter flights.”

“This is also in line with the ministry’s goal to further increase direct flights in conjunction with the Visit Malaysia Year 2026,” Manoharan said, adding that Tourism Malaysia will collaborate with airlines and tourism operators in Malaysia and China to increase flight frequencies to the country.

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Mainland China, G7 responses to Taiwan escalation would harm all parties, research finds

https://www.scmp.com/economy/china-economy/article/3257505/mainland-china-g7-responses-taiwan-escalation-would-harm-all-parties-research-finds?utm_source=rss_feed

Mainland China would squelch hundreds of billions of US dollars in trade and investment from Western countries if ever faced with sanctions over a severe worsening of relations with Taiwan, researchers said in a recent report.

But analysts cautioned that despite that defensive capacity, the mainland’s economy may be too weak to shrug off sanctions of the type placed on Russia, while a Taiwanese business scion called the all-important tech sector on both sides conflict-proof.

If the G7 – the Group of 7, a bloc of seven advanced economies – enacts sanctions against China, Beijing can restrict exports of “critical goods” and the activity of foreign investors, the Atlantic Council think tank said in an April 2 report co-authored with research provider Rhodium Group.

“While still extremely costly in economic terms, these tools are nonetheless likely to be considered in a crisis since the costs of war are far higher,” said the report, titled “Retaliation and Resistance”.

“Just as theories of nuclear deterrence account for the concept of second-strike capabilities, so too must we consider economic retaliatory measures in assessing the deterrence character of sanctions.”

Beijing sees Taiwan as a part of China that will eventually be reunited, by force if necessary. Most countries, including the US, do not recognise Taiwan as an independent state, but Washington opposes any attempt to take the island by force and remains committed to supplying it with weapons.

Cross-strait ties have declined since August 2022, when former US House speaker Nancy Pelosi paid a visit to Taiwan in defiance of Beijing’s warnings. The mainland responded with a week of military drills around the island.

Concerns over further escalation of tensions across the strait, including but not limited to military conflict, have pushed some companies to make arrangements to mitigate possible disruptions to business operations and supply chains.

But for Frank Huang, chairman of Taiwan-based Powerchip Semiconductor Manufacturing Corp, even a hot war could not break investment and supply chain links.

His firm has no contingency plan for a conflict, and plans are in motion to expand investment in a mainland joint venture, Nexchip Semiconductor, the chairman told the Post.

“If you go down to the bottom line of the supply chain of Taiwan, you will find there won’t be a war between the two sides – it’s too big a deal, nothing the military can repress,” he said. “We have to live together.”

But Huang is eyeing India for future expansion, too. The populous, fast-growing South Asian country has its own tech ecosystem and ample educated talent, he said.

‘Bitter fruit’ for foreign supporters of Taiwan independence, Beijing warns

The Atlantic Council evaluated the mainland’s would-be response to G7 sanctions imposed under two scenarios for cross-strait tensions, “moderate” or “higher-escalation”.

G7 members may impose sanctions ahead of any military fight, the report said, and officials in Beijing are already “developing capacities” to become more resilient to Western sanctions after taking note of restrictions brought against Russia over the past two years – even if that resilience would hurt employment at home.

Export restrictions, while costly, would be among the “most impactful economic statecraft tools”, according to the Atlantic Council. Researchers said mainland China would aim to cause “asymmetric pain” through limiting shipments of rare earth materials, clean energy commodities and active pharmaceutical ingredients.

In a “higher-escalation scenario” of G7-wide sanctions, about US$358 billion in G7 exports to the mainland “could be at risk” as a consequence of imposing those measures as well as projected reprisals, the Atlantic Council said.

“On the import side, we estimate that the G7 depends on more than US$477 billion in goods from [mainland] China which could be made the target of export restrictions. Regarding investment, at least US$460 billion in G7 direct investment assets would be at immediate risk from the combined impact of G7 sanctions and retaliatory measures by Beijing,” the report read.

“While export restrictions would be one of [mainland] China’s most impactful economic statecraft tools, it would also be among the costliest options,” the report’s authors said.

Over 100 million jobs in the mainland depend on foreign final demand, with nearly 45 million premised on demand from G7 countries.

In recent years, Beijing has used tariffs, import bans, product boycotts and inspections to “punish firms and countries” for their stances on Taiwan among other sensitive issues, the research paper said, and the authors anticipated more of the same if needed. Audits, fines, permit delays and preferential treatment for non-G7 investors were all included as potential future responses.

“Many multinational corporations would be executing plans to exit the market even before considering retaliatory action,” the Atlantic Council said. “[Mainland] China would have little to gain from holding back on retaliatory actions on a pretence of maintaining ‘investability’.”

The mainland would try to divide the G7, stop any “cohesive” responses outside the G7 and leverage yuan internationalisation to wriggle out of the worst outcomes related to sanctions, the researchers said.

The think tank had posited in June that the G7 would likely consider a range of economic measures to deter or punish the mainland during a Taiwan-related crisis.

But the mainland may be preoccupied with other economic problems to fight back, said Chao Chien-min, dean of social sciences at Chinese Cultural University in Taipei. The world’s No 2 economy is struggling with a property crisis, youth unemployment and curtailed consumption, among other issues.

“Total sanctions, that would create a huge impact on the Chinese economy,” Chao said. The mainland, he added, needs Western markets.

However, that need is reciprocal, and G7 economies would suffer in tandem, said Huang Kwei-bo, professor of diplomacy at National Chengchi University in Taipei.

“The economic interdependence between the two parties has been too complicated to tell whether economic sanctions by the G7 and export reorientation by [mainland] China will work as each party wishes,” he said.

Tech war: updated US semiconductor export restrictions raise demand in China for Nvidia’s RTX 4090 graphics card

https://www.scmp.com/tech/tech-war/article/3257484/tech-war-updated-us-semiconductor-export-restrictions-raise-demand-china-nvidias-rtx-4090-graphics?utm_source=rss_feed

The latest restrictions imposed by the United States on the export of artificial intelligence (AI) semiconductors to mainland China have turned graphic cards into some of the most sought-after items in Huaqiangbei, the world’s biggest wholesale electronics marketplace.

“The demand for high-end graphic cards remains very robust, especially after the export curbs imposed by the US government,” said Cai Zhaojie, a vendor at Huaqiangbei in the Futian district of tech hub Shenzhen, southern Guangdong province.

The Biden administration last Friday revised sweeping export controls it implemented last October, making it harder for the mainland to have access to advanced AI processors, semiconductor-manufacturing equipment and even laptop computers built with those chips, according to a Reuters report. The revised rules will take effect on April 4.

“After news of the latest US restrictions broke, all merchants started stocking up on various AI-related goods they could get, and are now waiting to sell these at a high price,” Cai said on Monday.

That has made Nvidia’s GeForce RTX 4090, a top-shelf device used by video gamers and graphics designers to crank up computing performance, the most-coveted graphics card in the market.

Efforts by Huaqiangbei merchants to amass a stockpile of RTX 4090 graphics cards show the far-reaching impact of Washington’s latest chip export restrictions, which further reinforce the initial measures announced by the Biden administration in October 2022.

An update to the 2022 restrictions, announced in October last year, sought to close loopholes in the previous curbs and prevent China’s development of AI for military use, according to US Commerce Secretary Gina Raimondo.

Beijing said it opposes the revised controls announced last Friday, slamming the US government for arbitrarily changing rules and damaging the rights of both Chinese and American companies.

“It has not only set up more obstacles for Chinese and US companies to carry out normal economic and trade cooperation, while imposing a heavier burden of compliance, but also causes harm to the global semiconductor industry,” a representative of China’s Ministry of Commerce said on Sunday.

Certain versions of the RTX 4090 are available at around 20,000 yuan (US$2,768), over 70 per cent higher than Nvidia’s recommended retail price. Cai, who sells graphics cards and personal computers, said some versions of the RTX 4090 cost about 16,000 yuan.

On e-commerce platform JD.com, prices for the RTX 4090 range from 16,999 yuan to 19,999 yuan.

In China, the RTX 4090 has also been used to help run so-called perceptual functions on self-driving vehicles, according to an engineer at Autra Technology, a developer of Level-4 autonomous trucks that can operate without a driver’s active intervention.

Demand and prices for the RTX 4090 graphics cards initially surged last October, when Washington’s updated chip export restrictions sparked a panic across the mainland’s consumer market.

Nvidia, the world’s most valuable semiconductor company, removed its inventory of RTX 4090 graphics cards from its official store on Chinese shopping platform JD.com at the time and later from its official mainland website.

Washington has continued to roll out new policies to hinder China’s tech advances, especially in the semiconductor sector. The US has also asked its allies to stop their companies from servicing certain chip-making equipment for Chinese customers, according to a Reuters report last week.

As Myanmar’s civil war halts key India-funded transport project, will China take advantage?

https://www.scmp.com/week-asia/economics/article/3257489/myanmars-civil-war-halts-key-india-funded-transport-project-will-china-take-advantage?utm_source=rss_feed

Battlefield advances made by rebel groups in Myanmar against the military junta have effectively halted a critical US$484 million transport project financed by India, at a time when China is expanding its regional footprint through investments.

Earlier this year, the Arakan Army, one of the rebel groups from Myanmar’s Rakhine state, captured the strategically important Paletwa town on the Kaladan River, near the Indian border. Consequently, the military junta lost control over the Kaladan Multi-Modal Transit Transport (KMMT) project.

The India-led project aims to link Kolkata in India with the Sittwe seaport in Rakhine, primarily via the Bay of Bengal, covering more than 500km.

When the KMMT project was launched in 2008, it was scheduled to be completed in 2014 but was beset by multiple issues even before the military junta deposed the country’s elected government in 2021.

Still, progress continued on the project and many segments of it have been completed. In November, Indian officials claimed it could be wrapped up by the end of 2023.

However, a crucial 109km road between Paletwa in Myanmar and Zorinpui, at the border of the Indian state of Mizoram, is yet to be completed. Given the ongoing civil war in Myanmar, the chances of work resuming on this stretch are slim.

Is India’s opposition ‘in disarray’ to challenge Narendra Modi in election?

A large area in Rakhine state and southern Chin state has already been taken over by the Arakan Army. The Indian government issued a travel advisory earlier this month, advising all Indian nationals to avoid travel to Rakhine due to the conflict.

Following the disruptions to the KMMT project, the Indian government sent a delegation across the border for talks with the rebel group.

On February 29, an Indian delegation led by Rajya Sabha (Upper House) member K. Vanlalvena from the Mizo National Front met with senior officers of the Arakan Army inside Myanmar to discuss the matter.

Joseph Lalhmingthanga Chinzah, the general secretary of the Central Young Lai Association (CYLA) of Mizoram and one of the members of the Rajya Sabha delegation, told This Week in Asia that the project had come to complete halt on the Myanmar side.

“From the Mizoram side, the project was completed in 2023 and the public is using it efficiently. However, there is no work done from across the border,” Chinzah said.

Apart from the 109km (68 mile) Paletwa-Zorinpui road, the project will also consist of a 158km inland waterway through the Kaladan River from Paletwa to the Sittwe port.

“We [the delegation] were very disappointed to see the progress of the work. With this kind of pace it will take another five years to complete the project,” Chinzah said.

It is a crucial part of India’s Act East Policy, aimed at offering the country’s landlocked northeast access to economic opportunities in the region.

Work on the project, which was proposed by India’s Ministry of External Affair, s began in 2010 and was originally slated to be completed in 2014. The estimated project cost has already escalated from 5.3 billion rupees (US$63.6 million) to 40 billion rupees (US$484 million).

“Once the road is complete, we will have access to Southeast Asian countries like Malaysia, Indonesia, and Singapore. We can export our agricultural products to these countries, which will be a huge uplift for the economy of India,” Chinzah said.

During their inspection tour, the Arakan Army took the Indian delegation to an area 15km inside Myanmar, which showed that the project’s road corridor was currently just a muddy track.

“The Arakan Army also desires for the completion of the road given their dependency for the supply of the essential commodities from across the border,” Chinzah said. Regardless of who is controlling the Myanmar side, both sides involved in the conflict need supplies from India for their survival, he added.

Indian opposition leader’s arrest sparks row with US and Germany

The KMMT project’s legal status is uncertain as the Arakan Army is a non-state actor, despite its military gains.

Gautam Mukhopadhaya, a former Indian ambassador to Myanmar, told This Week in Asia that India had to reassess Myanmar’s future.

“It seems clear that the Arakan Army and [associated] political forces – and Chin political and armed outfits – will increasingly control and govern the eastern and southern borderlands of Manipur and Mizoram,” Mukhopadhaya said.

“We should start working with neighbouring countries, Asean and the international community towards a workable transition from military rule to a federal democratic union in line with the will of the Myanmar people.”

The project is important for Mizoram and adjacent areas to access the Bay of Bengal over the long term, especially if alternative routes via Bangladesh are unavailable, Mukhopadhaya said.

“As long as options via Bangladesh are available and the route is not economically developed, including for container traffic, its actual impact will take time,” Mukhopadhaya said.

The project is overseen by Ircon International Limited, an Indian government company that signed agreements last year with two Myanmar-based companies – Myanmar New Power Construction Limited and Su Htoo Sen – to construct different segments of the highway.

Rich in natural resources, Rakhine state’s long coastline facing the Bay of Bengal holds important strategic value for China and India.

China has begun developing Kyaukphyu as a deepwater Belt and Road Initiative port near the Kaladan port at Sittwe, allowing access to the Indian Ocean and oil imports to bypass the South China Sea.

In December, China and the junta signed a supplementary agreement to develop the Kyaukphyu port, with China’s state-owned Citic Group retaining a 70 per cent stake in the project.

“China has always had the advantage over India [with Myanmar] under military rule and that is why it was able to extract the Kyaukphyu port [project] from them. The advantages of Kyaukphyu are so great that China does not need to hinder the Kaladan project for us. India’s approach should be in line with local priorities and interests,” Mukhopadhaya said.

Despite China’s influence, Myanmar is more inclined towards India due to the shared culture and demographics between the two countries, CYLA’s Chinzah said.

“China will only do what will benefit their country. But with India, it is more of a cultural bond, which is why people relate more across the border.”

The great escape: 100 huskies run amok in China shopping centre after canine cafe door left open

https://www.scmp.com/news/people-culture/trending-china/article/3256057/great-escape-100-huskies-run-amok-china-shopping-centre-after-canine-cafe-door-left-open?utm_source=rss_feed

A story about 100 husky dogs that escaped from a pet cafe after someone forgot to close the door, has delighted mainland social media.

The beloved pets were almost lost when they rushed out of the cafe in a shopping centre in Guangdong province, southeastern China.

Staff reacted quickly and managed to round them all up, Xigua Video reported.

Surveillance footageshows the clearly delighted canines as they scamper around the shopping centre ignoring the calls of cafe staff.

“All the huskies ran out of the cafe,” a member of staff surnamed Huo told Xigua Video, adding: “It’s very lucky they were found so soon.”

The incident happened on March 12 when the owner visited her cafe and the huskies became very excited.

“The huskies haven’t seen the owner for a while,” Huo said.

A customer then arrived but forgot to close the door, which was when the dogs made their bid for freedom.

Staff immediately chased after the excited canines, and one female employee ushered some back into the cafe, while Huo scooped the rest up in his arms one by one.

After a while, most of the huskies were found, leaving a few intrepid mutts still enjoying their fun. With a bit more effort, Huo eventually rounded them all up.

“To punish the disobedient huskies, we keep delicious chicken legs for them,” Huo joked.

Many people on mainland social media were delighted by the story.

“Hahaha, it feels like the joy of pupils running out of a school,” one person said, while another wrote: “The great carnival of huskies.”

“Let’s enjoy the great escape, huskies,” said a third.

“It looks so much fun. How wonderful it would be if I met such a joyful escape,” another said.

Pet cafes have become increasingly popular in China.

According to Xifei Daily, 3,638 pet cafes were newly opened in Shanghai in 2020. To spend one hour at a cafe, the cost ranges from 60 yuan (US$8) to 200 yuan.

Chinese market research firm iiMedia Research reported in 2023 that the turnover of the country’s pet industry reached 494 billion yuan (US$69 billion) in 2022.

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China’s military to hold live-fire exercise on Myanmar border as fighting continues

https://www.scmp.com/news/china/military/article/3257477/chinas-military-hold-live-fire-exercise-myanmar-border-fighting-continues?utm_source=rss_feed

The Chinese military is set to conduct a series of live-fire exercises near its border with Myanmar as fighting between rebel forces and the ruling military junta continues.

China has frequently expressed its concerns about cross-border stability and protested after shells fired in Myanmar injured five people in the border town of Nansan in January.

The autonomous prefecture of Dehong Dai and Jingpo in Yunnan said on Monday that a joint-force live-fire exercise will take place in two counties bordering Myanmar on Tuesday and Wednesday.

During the exercise, people will not be allowed to enter five designated areas in the border counties of Yingjiang and Longchuan, take photographs or fly drones.

The People’s Liberation Army last conducted live-fire drills in the area in November – weeks after an alliance of three armed groups began a major offensive against the junta in the Kokang region of Shan state, which borders China.

That exercise took place in another border region and was described as helping the PLA to prepare for “various unexpected situations” and “safeguard border stability”.

Myanmar junta activates conscription law following battlefield losses

This type of exercise is rare and the previous one was held in March 2017, weeks after at least 30 people died in an attack by the Myanmar National Democratic Alliance Army on Laukkai, the capital of Kokang region.

That group joined forces with two other rebel groups, the Arakan Army and the Ta’ang National Liberation Army, to form the Three Brotherhood Alliance in 2019. The alliances is now fighting the junta, which overthrew the democratically elected government in February 2021.

In January the alliance gained control of the key town of Laukkai fighting alongside the pro-democracy People’s Defence Force.

Violence since the 2021 coup is estimated to have killed 50,000 people, according to the Armed Conflict Location and Event Data Project, while more than 2 million people have been displaced in the fighting.

During the fighting, Beijing has kept up its relations with the junta, working with it to combat online scammers, a particular concern of Beijing’s.

Foreign vice-minister Sun Weidong visited the country in January to discuss border security and the fight against scammers with the military ruler Senior General Min Aung Hlaing.

Liu Jingsong, head of the Asian affairs department at the Chinese foreign ministry, also met the Myanmar ambassador last Tuesday to “exchange views on issues of common concern”.

China has also been trying to broker a ceasefire in Shan state, but the most recent one in January collapsed within 24 hours.

‘Very bad idea’: US-China full-scale trade war unlikely but soft-power gap will persist, top scholar says

https://www.scmp.com/news/china/diplomacy/article/3257243/very-bad-idea-us-china-full-scale-trade-war-unlikely-soft-power-gap-will-persist-top-scholar-says?utm_source=rss_feed

For the series of interviews with global opinion leaders, Josephine Ma speaks with Joseph Nye, a former US assistant secretary of defence. Nye is university distinguished service professor, emeritus and former dean of Harvard’s John F. Kennedy School of Government, and has been ranked among the top 100 global thinkers. He discusses China’s soft-power challenges, its economic and technological hurdles, the state of relations between Beijing and Washington, and the chances of an armed conflict breaking out.

Soft power is the ability to get what you want through attraction rather than coercion or payment and China has a good deal of soft power growing out of the attractiveness of its traditional culture and the success of its economic performance. So it’s doing well, but if you look at polls that were taken recently in 27 different countries asking which countries were most attractive, China did not do so well in Asia or Europe or North America or Australia.

Leading Chinese academic and cultural figures urge Sino-US ‘friendship’

It did pretty well in Africa, but I think that in that sense, it is not getting a very good return on its investment. And I think the biggest problems for Chinese soft power are in Asia, the conflicts that China has with a number of its neighbours such as with India over the Himalaya border. And the other problem that it has which affects Chinese soft power in democratic countries, like Europe or Japan or Australia, is the insistence on tight party control, which means that civil society does not have the full range that it has in European countries or United States and so forth.

So you have a great artist like Ai Weiwei, and he gets crosswise with the party or with the government, either goes to jail or to exile and that hurts your soft power. So does China have soft power? Yes. Could it do more? Yes.

I think having the contact at the high levels is important and I think the meeting between presidents Xi and [US President Joe] Biden last November was a very useful step. But it would also be useful to find some issues which demonstrate to public opinion that the two countries benefit from cooperating, and probably the best candidate for that is climate change. Both countries will be hurt by climate change and also pandemics because Covid wasn’t the last pandemic. There are more that are going to take us by surprise. And having good scientific cooperation and public health cooperation, I think it is clearly beneficial to both countries.

One possible scenario is if Biden is re-elected, I think you will see a continuation of the policy as we’ve seen it over the last three or four years. The other scenario is that Trump is elected and that is much more unpredictable because Trump himself is very unpredictable, and you never know quite what his policies will be. But he has threatened to put high tariffs on Chinese goods. So one possibility would be a trade war.

Yeah, I think it’s a very bad idea, but Trump has talked about it.

I think there is always a certain danger that could grow out of something in the South China Sea or the Taiwan Strait, a miscalculation. I think the danger is there whether it is Trump or Biden, but I think it’s a little more dangerous under Trump.

The allies that are probably most at risk if you believe what some of the things Trump said in his first term would be for Europe, the Nato allies, and that does not directly affect China, except the extended effects – Russia.

Peter Navarro, top Trump adviser who pushed US-China trade war, enters prison

But in Asia, Trump has not had that sort of threat to the alliance with Japan or Australia. So I don’t know whether it would make as much of a difference in Asia as in Europe.

China has done very well economically and it should get full credit for that. But I think China is now facing another, or different problem, which is sometimes called the middle income trap: a decline in its population and the workforce has peaked.

The answer to the declining workforce is technology and productivity to replace workers. But if you look at the statistics, China’s total factory productivity has been going down, not up. And then if you ask where we get the new technology, most people would say it comes mostly from private entrepreneurs.

But instead the policy recently has been to encourage state-owned enterprises more than private enterprises. So those are three trends which I think make it unlikely that China will return to the high levels of growth that it had in the past.

And when you talk about how this will affect the China competition, there are some people in Washington who exaggerate the China threat. I think in fact, we should not exaggerate the China threat, and if you look at the economic prospects that I describe, that would be my reasoning.

I think it’s unlikely. I mean it used to be conventional wisdom that China would pass the US in total size of the GDP at [current] rates by 2030. I would take a bet that that does not happen.

China has done well in some technologies and some state-owned enterprises are quite good at technology. Generally speaking though, when you have a state-owned enterprise, it tends to be responsive to politics rather than fully exploring the options in technology.

Entrepreneurs are more likely to explore things that are not obvious. So China will make progress in technology. I think it would make more progress if it gave more free rein to private entrepreneurs.

I don’t think it’s high risk. I think both sides want to avoid armed conflict, but sometimes in relations between states and history, people miscalculate and the Philippines does have an alliance with the US, and you can conceive of a situation where if China treats the Philippines too badly, the US tries to help it and that one thing may lead to another that neither China nor the US want or expect but they get themselves into deeper water than they originally intend. So, I don’t expect a conflict in the South China Sea, but I don’t rule it out either.

I think it’s very often cited in Washington that President Xi would like to have the PLA ready to be able to take over Taiwan by 2027. I don’t know whether that is what he thinks or not. But that is often cited in Washington, which makes a lot of people talk about providing defences to protect Taiwan from a military takeover.

I don’t personally think that is likely. I think we saw in the failure of Putin’s ability to invade Ukraine and take over Ukraine quickly a lesson, which is that a big land army cannot do it, then amphibious invasion over a hundred miles of sea is going to have a very hard time.

China will not fall into ‘trap’ of war in Taiwan Strait: Cui Tiankai

So I don’t think that the prospects of a military conflict are as high as some people in Washington think. On the other hand, I think it is very important that the United States maintains its adherence to the one-China policy and the way the United States interprets the one-China policy is no de jure independence for Taiwan and no use of force.

That has worked for 70 some years and I think it can continue to work, which means that as Nixon and Mao put it: Chinese people on two sides of the Taiwan Strait will have to work out their relationship. If we adhere to that policy then I don’t think there will be a war.

I remember China has done very well from the post-1945 world order. It has provided an international economic framework in which China has benefited very greatly and in that sense, as some people say, that China wants to overthrow the playing board, the chess board or whatever, and I think a better way of putting it is that China does not want to overthrow the table on which the game is being played, but it would like to tip the table a little bit in its favour. And so things you mentioned are efforts to tip the table.

I don’t think it will succeed in terms of replacing the dollar, for example, as a key reserve currency because the dollar is about two-thirds of the holdings of governments in reserve. A reserve currency depends upon deep and flexible capital markets convertibility and the rule of law. And China is not willing to go that far soon. So yes, China will have more clearing of trade, and the renminbi will have more interactions with the countries you mentioned, but I don’t think it’s going to overturn the post-1945 world order.

When you look at the role of the dollar or any currency, it has different functions. One function is a payment to clear trading accounts. And so the digital one would be useful for that. But the other value, or important role of currency, is a store of value: how you hold reserves, how your banking system is organised, and the digital yuan is not going to escape the problems I mentioned earlier about the reserve currency. So it will have some effect, but it will not be a total overthrow of the dollar.

On TikTok, I cannot get all that excited about it, but it’s worth noticing the problem of reciprocity. Why should Americans allow TikTok to transfer information about Americans when China does not allow Facebook to operate inside China? So there are a number of people who feel that China’s not playing fair on this and that is the issue of TikTok.

On the issue of chips or high technology, if it relates to security then I think there’s grounds for slowing down the transfer of technology, but it shouldn’t go to the economy as a whole. National security adviser Jake Sullivan called this “putting a high fence around a small yard”. So in the small yard of things of technologies that directly affect security, I think that is justifiable. I think China does the same thing.

So I think the danger I see would be if people think that total trade war would be a good idea. I think that is not a good idea.

I think the biggest mistake that China has made was thinking after the 2009 financial crisis that the US was in decline, and dropping Deng Xiaoping’s foreign policy and replacing it with a more assertive foreign policy. Some people have called it wolf warrior foreign policy. I think that was a bad decision.

I think a good decision by China was agreeing to work together with the US on climate change by both of us adhering to the Paris climate accords in 2015. And I think that is an example of a good decision by the US as well. I think that is one of our better decisions regarding China. On bad US decisions. I think Trump’s use of tariffs against China strikes me as a bad decision.

But I think we have to realise that in both governments, people make mistakes and do things that are good and do things that are not so good. So I’m afraid we’ll see more good and bad decisions in the future.

Well, I think people who take that view have to ask themselves, has China been better off? And I would say that before you dropped the Deng Xiaoping policy, you did not scare other people and you were very attractive. It was good for your soft power. Once you start being a wolf warrior and asserting yourself, you scare people and you lose some of your soft power. So I think the evidence is in the behaviour that you’ve seen.

I think participating in things which you might call global public goods. Such as I’ve mentioned on climate change or dealing with pandemics and so forth. When you’re associated with producing things that are good for others as well as good for yourself, you become more attractive and it also reduces the degree of tension with other countries.

So I think in a sense increasing your participation in things that produce global public goods is probably the best way to increase soft power. It’s good for China. It’s good for others.