• US-China relations: defence chiefs expected to speak ‘soon’ after latest talks between Joe Biden and Xi Jinping
• Beijing’s top man in Hong Kong to brief officials, lawmakers on ‘spirit’ of China’s ‘two sessions’
• Hong Kong’s examination authority says it will deliver university entrance test papers to mainland China under tight security
• China and Indonesia vow to boost defence ties as Prabowo Subianto seeks to reassure Beijing ahead of inauguration
• Chinese-linked firms targeted as EU launches probes into solar subsidies
• China doubles subsidies for child, elderly care facilities to deal with demographic decline
• Dive, abseil, hike: China ancestor worshippers go extra mile to pay respect during tomb-sweeping festival
• Taiwan earthquake disrupts trains in mainland China at start of Ching Ming travel rush
• Fairfax police academy bars Herndon officers in dispute over Chinese signature
• China’s new data agency plans fast track to powerful national computing network
• South China Sea: Philippines taking ‘dangerous path’ with President Marcos Jnr’s anti-China moves, sister Imee says
• ‘Disgusting’ China tourist swaps water bottle for new souvenir flask at British Museum angering mainland social media
• South Koreans bid emotional farewell to beloved panda leaving for China
• US report blames Microsoft’s ‘inadequate’ cybersecurity for Chinese hack
• US court orders exiled Chinese billionaire Guo Wengui to face fraud indictment
• China names pioneer team of state firms to take pole position in race to tech’s bleeding edge
• New dating trend sees China youth flock to live matchmaking events at famous tourist site in search of love
• Can China’s hopes that Shanghai Cooperation Organisation will offer new model for international relations come to pass?
• Hong Kong residents make 1.76 million outbound trips over Easter break as mainland China tours surge in popularity
• China’s services activity growth speeds up in March as new business rises at quickest pace in 3 months
• South China Sea: US, Philippines, Japan, Australia to hold naval drill on Sunday amid China’s aggressive actions
• [World] China will soon have 300m pensioners. Can it afford them?
• Biden and Xi seek to manage tensions in phone call as US officials head to China
• China’s property market is at risk of an overcorrection, not oversupply
• Call between Xi Jinping and Joe Biden conveys stability, deep disconnect in US-China ties: analysts
• Review board faults Microsoft for ‘cascade’ of errors in China hack

US-China relations: defence chiefs expected to speak ‘soon’ after latest talks between Joe Biden and Xi Jinping

https://www.scmp.com/news/china/diplomacy/article/3257768/us-china-relations-defence-chiefs-expected-speak-soon-after-latest-talks-between-joe-biden-and-xi?utm_source=rss_feed

The Chinese and US defence ministers are expected to end a 17-month hiatus and speak “soon” following this week’s phone call between Presidents Xi Jinping and Joe Biden.

It was also confirmed that US Treasury Secretary Janet Yellen will arrive in China on Thursday and Secretary of State Antony Blinken will also visit “in the coming weeks” as the two sides seek to keep relations stable in the run-up to November’s presidential election.

The two presidents agreed to ask their teams to “advance” military-to-military communications, according to the Chinese statement issued after the call. A senior White House official had earlier told a press briefing: “We also expect a SecDef [Secretary of Defence]-Minister of Defence call soon.”

The official had also said that the two countries were planning to hold talks in Hawaii this week through the Military Maritime Consultative Agreement, a platform for theatre operators to discuss maritime safety.

The last formal interaction between senior defence officials was in November 2022, when US Defence Secretary Lloyd Austin met the then-Chinese defence minister Wei Fenghe in Cambodia.

That meeting took place after China froze high-level military contacts in protest at then-House speaker Nancy Pelosi’s visit to Taiwan, something Beijing saw as a major breach of its sovereignty.

Xi-Biden phone call signals deepening disconnect on tech, economy: analysts

Since then Wen’s successor Li Shangfu was abruptly dismissed just months into the post – for reasons that have not been explained – and the new defence minister Dong Jun appointed in December.

The issue of Taiwan remains a major area of contention between the two powers, and heightened cross-strait tensions in the run-up to the inauguration of the island’s next president William Lai Ching-te – whom Beijing sees as a separatist – along with a series of clashes between China and the Philippines, a US ally, in the South China Sea, have raised concerns about potential flashpoints between the two countries’ militaries.

Beijing views Taiwan as part of China and has never renounced the use of force to bring it back under its control. The US, in common with most countries, does not officially recognise Taiwan as independent but opposes any forcible change in the status quo and is legally bound to help the island defend itself.

Ren Xiao, director of the Centre for the Study of Chinese Foreign Policy at Fudan University in Shanghai, said the talks between the two militaries are showing “relatively positive momentum”.

He said: “Communication and contact at all levels between the two militaries are conducive to avoiding tensions or even clashes between the two sides in those regions.”

Efforts to resume high-level exchanges faltered last year following a series of incidents, especially the discovery of an alleged Chinese spy balloon over the US that saw Blinken call off a trip.

However, Xi and Biden eventually met face-to-face in California in November, where they agreed to resume military communications. Since then a number of senior commanders have spoken, including Chairman of the US Joint Chiefs of Staff Charles Brown and his Chinese counterpart Liu Zhenli in December.

Xi and Biden also agreed to further talks on non-defence matters in their call, and Ren said: “My feeling is that from now until the US elections in November, [relations] can generally remain stable.”

But he said expectations for future exchanges “should not be too high”, adding: “Under the current situation where the general strategic landscape is difficult to change, there can only be some relatively small and pragmatic progress.”

Xi, Biden have ‘candid’ talks, progress relations in first phone call since 2022

The two leaders’ phone call was “a very important step”, according to James Heimowitz, honorary chair of the New York-based China Institute.

“The fact that the next step is going to be more communications with people at the next level down, who are going to further articulate their anxieties and concerns and aspirations, is nothing but good,” said Heimowitz, who is also a senior adviser to the South China Morning Post.

“It’s a step in the direction of the renormalisation and recalibration of what should be a very long-term relationship.”

The two presidents have also agreed to talks on artificial intelligence, but the first meeting of their inter-governmental dialogue mechanism on AI has yet to take place.

“If the US side expresses interest, I think the Chinese side will surely be willing to talk,” Ren said.

Beijing’s top man in Hong Kong to brief officials, lawmakers on ‘spirit’ of China’s ‘two sessions’

https://www.scmp.com/news/hong-kong/politics/article/3257766/beijings-top-man-hong-kong-brief-officials-lawmakers-spirit-chinas-two-sessions?utm_source=rss_feed

Beijing’s top man in Hong Kong will brief city officials and lawmakers on the “spirit” of the country’s annual parliamentary meetings in a closed-door seminar on Tuesday, the Post has learned.

Zheng Yanxiong, director of the central government’s liaison office in Hong Kong, is expected to provide key takeaways from the “two sessions” of the National People’s Congress (NPC) and National Committee of the Chinese People’s Political Consultative Conference (CPPCC), which ended on March 11.

Chief Executive John Lee Ka-chiu will preside over the seminar, to be held at the government headquarters in Tamar, with senior officials and lawmakers taking part, according to a government insider.

The source said the seminar was being held nearly a month after the end of the two sessions, or lianghui, because the government and Legislative Council were previously busy with the city’s domestic national security law.

“We finally made the time after the previous busy schedule,” the insider said.

Hong Kong enacted the Safeguarding National Security Ordinance, mandated under Article 23 of the Basic Law, the city’s mini-constitution, on March 23 after a series of marathon vetting procedures that kicked off on March 8.

Several Hong Kong NPC and CPPCC delegates had asked to leave the meetings in Beijing to attend the bill scrutiny sessions in Legco.

Hong Kong should use its ‘super roles’ to spur development: Beijing official

At a meeting with Hong Kong NPC deputies in Beijing during the two sessions this year, Zheng called on the city to draw on its “super roles” as an international financial centre to amass capital, as well as connect with and support investors to help the country become a powerhouse in the sector.

His call echoed remarks by Chinese Premier Li Qiang, who used his work report to encourage Hong Kong to “play to its distinctive strengths” and take on the role of better integrating with national development.

It will be the second time Zheng has offered lianghui takeaways to Hong Kong officials and lawmakers since assuming the post in January 2023.

He told 180 participants in the first briefing on March 28 last year that one of the key points of the two sessions was to grasp the spirit of Chinese President Xi Jinping’s speech at the meetings.

‘Hong Kong CPPCC members must be totally committed to supporting security law’

Last year, Xi stressed Beijing’s commitment to upholding the “one country, two systems” governing principle and that the long-term prosperity and stability of Hong Kong was part and parcel of the building of a strong China.

The liaison chief asked Hong Kong to strengthen its position as an international financial, shipping and trade centre, develop its new strength as an international innovation and technology centre, and maintain a free and open business environment.

He also said Hong Kong should maintain its edge in the rule of law and its common law system, and set itself on a path of internationalisation.

Besides the two sessions briefing, Zheng also gave talks at the government headquarters on the topics of district governance and national security in the past year.

Hong Kong’s examination authority says it will deliver university entrance test papers to mainland China under tight security

https://www.scmp.com/news/hong-kong/education/article/3257752/hong-kongs-examination-authority-says-it-will-deliver-university-entrance-test-papers-mainland-china?utm_source=rss_feed

Hong Kong’s examination authority has said it will transport test papers for the first batch of pupils sitting the local university entrance exams in mainland China next week under tight security measures.

The Hong Kong Examinations and Assessment Authority said on Wednesday it had rehearsed transporting Diploma of Secondary Education (DSE) exam papers, safely locked and monitored by security cameras round the clock, to and from two centres on the mainland several times.

Chairman Samuel Yung Wing-ki said he personally inspected the entire transport process twice, adding staff conducted even more rehearsals to ensure operations ran smoothly on April 11, the first day of DSE exams on the mainland.

“The examination papers will be escorted by security vehicles across the border ahead of the exam date and locked in a room on campus, with tight security around the clock, to prevent any delays caused by traffic or other unpredictable scenarios,” he said.

Yung added that the board had formulated contingency plans for possible disruptions, while the examinations at the mainland centres would be invigilated by Hong Kong staff with more than a decade of experience.

Exam papers of pupils sitting the test on the mainland and in Hong Kong would be marked by the same group of teachers, he said.

“This is to ensure that the standards, fairness and credibility of the examination are consistent with those at Hong Kong examination sites.”

About 110 pupils from the Shenzhen Hong Kong Pui Kiu College Longhua Xinyi School and the Affiliated School of JNU for Hong Kong & Macau Students will be the first to take their DSE examinations on the mainland on April 11.

In February, the board announced that it would allow some pupils to sit their university entrance exams on the mainland, a U-turn after security fears over the transport and storage of exam papers were resolved.

The city’s DSE exams will kick off next week, with the first core subject scheduled for April 11 and most of the elective subjects to be held from April 18.

Mainland pupils taking Hong Kong school exams must still travel to city

Wei Xiangdong, secretary general of the authority, stressed that the DSE was a widely recognised certification by prestigious universities around the world.

“Citizenship and social development replacing the subject of liberal studies will have no impact on the DSE qualifications,” he said, dismissing concerns that universities might not recognise the new core subject.

The curriculum of the subject, which was introduced in September 2021 to replace liberal studies, focuses on national security, identity, lawfulness and patriotism.

First introduced in 2009, liberal studies aimed to enhance senior secondary students’ social awareness and critical thinking skills. But the Education Bureau overhauled it early last year after the pro-Beijing camp blamed the subject for radicalising youth during the 2019 protests.

“For the time being, I have not come across any university that does not accept the DSE as a qualification for admission,” Wei said.

The board surveyed 150 secondary schools in the city recently and found that more than 300 DSE candidates this year had already received conditional offers from more than 100 institutions, including Oxford and Cambridge, using provisional results under the new syllabus.

Staff also reached out to the consulates in the city, including those of Germany and the Netherlands, which recently recognised the DSE to be comparable with the local secondary education diploma, making it more convenient for Hong Kong students to apply to Dutch institutions.

China and Indonesia vow to boost defence ties as Prabowo Subianto seeks to reassure Beijing ahead of inauguration

https://www.scmp.com/news/china/military/article/3257751/china-and-indonesia-vow-boost-defence-ties-prabowo-subianto-seeks-reassure-beijing-ahead?utm_source=rss_feed

China pledged to strengthen joint military exercises and personnel exchanges with Indonesia as president-elect Prabowo Subianto visited Beijing.

Prabowo, currently serving as Indonesia’s defence minister, met Chinese defence chief Dong Jun on Tuesday as part of his first overseas trip since his country’s election in February. Earlier in the week, Prabowo met Chinese President Xi Jinping and Premier Li Qiang.

Dong told Prabowo that as the world and the region face multiple challenges, the two countries should “work together to safeguard international fairness and justice as well as regional security and stability”.

China not expected to let past overshadow ties with Indonesia’s new leader

“The Chinese military is willing to consolidate strategic trust, deepen joint exercises and training, and increase personnel exchanges with the Indonesian military,” Dong said, according to the Chinese defence ministry.

Prabowo agreed, according to a statement from Jakarta, saying Indonesia was willing to strengthen defence cooperation with China and continue promoting the development of ties between the armed forces of the two countries.

Prabowo is set to take office as Indonesia’s next leader in October, succeeding Joko Widodo. He began a rare pre-inauguration trip to China on Sunday to reinforce friendly ties and offer reassurance to Beijing about future policies.

But Jakarta, a key member of the Association of Southeast Asian Nations, has maintained a policy of non-alignment amid rising tensions in the South China Sea. And it chose Japan – a US ally – as the next stop on Prabowo’s tour.

Prabowo told Xi on Monday that he would continue Widodo’s “friendly policy” towards China and was ready to strengthen coordination on international and regional affairs.

China willing to work with Indonesia to ‘run relay race well’, Xi tells Prabowo

Xi praised China-Indonesia cooperation under Widodo, which he said hinged on their “strategic independence and mutual trust”.

As the countries continue joint projects and free-trade agreements under the Belt and Road Initiative, they should understand and support one another on issues involving each other’s “core interests and major concerns”, he told Prabowo.

Economic relations between the two countries have grown substantially under Widodo’s decade of leadership. Indonesia was the biggest recipient of Chinese foreign direct investment in the Asia-Pacific region last year, according to a report by Griffith Asia Institute in March.

Meanwhile, Jakarta and Washington have upgraded security ties. The two signed a defence cooperation arrangement last November as Washington attempted to upgrade relations with Indo-Pacific countries to counter Beijing’s growing influence.

Writing of South China Sea rule book delayed by lack of trust: maritime expert

Beijing and Jakarta have conflicting territorial claims in the South China Sea, where tensions have increased in the past year due to stand-offs between China and the Philippines.

Negotiations for a legally binding code of conduct for the South China Sea, which Indonesia pledged to accelerate, have also slowed because of disagreements.

When Xi and Widodo met in October, they agreed to establish a dialogue mechanism between defence ministers and foreign ministers to “expand high-level channels for strategic communication and dialogue platforms for political, defence and security cooperation”.

Chinese-linked firms targeted as EU launches probes into solar subsidies

https://www.scmp.com/news/china/diplomacy/article/3257754/chinese-linked-firms-targeted-eu-launches-probes-solar-subsidies?utm_source=rss_feed

The European Commission is investigating whether two Chinese-linked companies used state subsidies to undercut rival bids in a Romanian solar project.

Two probes have been launched under the European Union’s new foreign subsidies regulation, with the commission stating that it has “sufficient indications” that the firms bidding for procurement contracts “have been granted foreign subsidies that distort the internal market”.

The first investigation concerns a consortium involving a German subsidiary of Longi Green Energy Technology Co. Hong Kong-listed Longi is the world’s largest manufacturer of solar panels and is headquartered in the Chinese city of Xian. The second investigation concerns two subsidiaries of Shanghai Electric Group Co, a Chinese state-owned company.

“Solar panels have become strategically important for Europe: for our clean energy production, jobs in Europe, and security of supply,” said EU industry boss Thierry Breton.

“The two new in-depth investigations on foreign subsidies in the solar panel sector aim to preserve Europe’s economic security and competitiveness by ensuring that companies in our single market are truly competitive and play fair,” he added.

It marks the second use of the EU’s foreign subsidies regulation to probe Chinese firms since February, and demonstrates Brussels’ willingness to use the commercial weaponry at its disposal to counter what it sees as unfair competition from Beijing.

Last week, a Chinese train maker withdrew from a public tender in Bulgaria after the EU launched an investigation into a bid it said was undercutting local firms.

The inquiry, announced in February, was the first of its kind and marked the maiden use of the foreign subsidies regulation designed to stop state handouts from distorting the EU’s single market.

EU ‘absolutely willing’ to use trade tools against China: top official

CRRC Qingdao Sifang Locomotive Co, a division of state-owned rolling stock manufacturer CRRC Corporation, had hoped to provide 20 electric push-pull trains and their maintenance.

After CRRC withdrew from proceedings, Breton said that “in just a few weeks, our first investigation under the foreign subsidies regulation has already yielded results”.

The foreign subsidies regulation, which took effect last July, obliges firms bidding for EU public procurement contracts worth over €250 million (US$268.7 million) to be open about the level of state subsidies they received in the proceeding three years, provided that was higher than €4 million (US$4.3 million).

While the EU avoids saying its trade weapons are aimed at China to avoid breaching global trading rules, it was long expected that this regulation would hit Chinese firms, given the widespread suspicions about the levels of government subsidies there.

Europe and China have tangled on solar before: a trade war flared in the sector 10 years ago, and has threatened to rear its head in recent months after manufacturers complained they were being pummelled by cheap imports from the world’s second largest economy.

Chinese solar power industry urged to stay united in face of US pressure

So far, Brussels has declined to slap new import tariffs or market entry restrictions on Chinese supplies, despite the demands of some manufacturers.

In February, European solar panel producers called for urgent curbs on Chinese access to the EU photovoltaic (PV) market, which they said was required if they were to save their industry.

In a letter sent to the European Commission, a group representing “nearly the entire European PV manufacturing industry” called for “emergency measures” to safeguard the EU supply chain amid “significant oversupply” from China.

It claimed that oversupply of PV modules from China late in 2022 and through 2023 had “triggered a drastic reduction in prices”, forcing European manufacturers to reduce production and leaving stocks “languishing” in warehouses.

The EU’s powerful department of trade decided against trade measures, however, after noting the industry’s divisions on whether they would be beneficial.

China doubles subsidies for child, elderly care facilities to deal with demographic decline

https://www.scmp.com/economy/china-economy/article/3257727/china-doubles-subsidies-child-elderly-care-facilities-deal-demographic-decline?utm_source=rss_feed

To address the rapidly evolving needs of its ageing population – a pressing issue made all the more severe by a sinking birth rate – China has disclosed a strategy to expand its community-based elderly care networks, as well as childcare centres.

In a revised version of an implementation plan for care services covering those both young and old, Beijing said it will further improve resource networks in rural areas. The new iteration of the plan was published in a document released Tuesday by the National Development and Reform Commission – the country’s top economic planner – as well as the Ministry of Civil Affairs and the National Health Commission.

In the adjusted plan, Beijing bumped up subsidies for new establishments for both elderly care and childcare, with each new bed for elderly care added to an eligible facility netting the facility a grant of 50,000 yuan (US$6,911), and 20,000 yuan for each new slot in universal childcare service venues.

In the original plan, published in June 2021, the corresponding rates were 20,000 yuan and 10,000 yuan per new slot.

The change comes as China grapples with twin demographic challenges – an ageing population and a declining birth rate. These trends have fuelled fears of a diminished labour force, stretched social welfare systems and substantial healthcare expenses.

These looming worries have cast a shadow over the nation’s economic growth – already haunted by a slump in the property market, debt woes for local governments and a need to alter China’s conventional investment and export-oriented growth model as global socioeconomic conditions grow complicated.

China had 216.76 million people aged over 65 last year, up from 200 million in 2021 according to official data. The Economist Intelligence Unit said in a February report that people over 60 will account for 32.7 per cent of China’s population by 2035, up from 21.1 per cent in 2023. The proportion of those 65 and above will also rise, from 15.4 per cent last year to 25.1 per cent by 2035.

Low birth rates have compounded these trends. The country’s population dropped for a second year in a row in 2023, down to 1.4097 after a 2.08-million-person decline. In the same year, only 9.02 million births were reported – the lowest level since record-keeping began in 1949.

To account for these changes – and the resultant shrinking of informal familial care networks for both groups – the country will “further improve the infrastructure conditions for elderly care and childcare services,” the plan said, encouraging greater provision of “inclusive services” and a strengthening of the three-tiered elder care network linking counties and rural areas.

However, the original plan had apportioned up to 100 million yuan to pilot cities as part of a project for what were termed “child-friendly cities”, places which would build robust public services to improve quality of life for the youth.

That rhetoric was omitted entirely in the new version, with the focus shifted towards elderly care. The plan named home-based community care networks as another method to tailor to the needs of the elderly, encompassing disability care, provision of meals and help with bathing, cleaning, medical care and transport.

“Support will be extended to public healthcare institutions in areas with surplus medical resources and underutilised bed capacity to establish new facilities,” it said, “or expand existing ones for integrated medical and elderly care services.”

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Dive, abseil, hike: China ancestor worshippers go extra mile to pay respect during tomb-sweeping festival

https://www.scmp.com/news/people-culture/trending-china/article/3257292/dive-abseil-hike-china-ancestor-worshippers-go-extra-mile-pay-respect-during-tomb-sweeping-festival?utm_source=rss_feed

You might think a visit to a dead relative’s grave would be a solemn occasion, but that is not the case for residents in some parts of rural China.

Ancestor worshipping rituals in some of the country’s southern provinces during the Ching Ming Festival, have been dubbed “survival training in the wild” due to the difficulty of reaching the gravesites.

The purpose of the annual event, which is also known as the Tomb Sweeping Festival, is to visit and clean ancestors’ graves to show respect and pray for blessings.

Residents in Guangdong, Guangxi and Hainan, in rural southern China, are determined to overcome obstacles on the challenging terrain, such as rugged mountains, riverbeds, and caves, the Guangxi Daily reported.

Many tombs are in remote areas and are difficult to access, but the locations were carefully chosen based on feng shui. These includes hillsides, beside streams and sunny spots. It is widely believed that a tomb with good feng shui will bring fortune to the family.

Since the beginning of March, internet users from the three provinces have been sharing their gravesite experiences, describing them as physically challenging, the report said.

Some even bring scythes to cut down trees or grass and often they will need to use both hands and legs to scramble up mountains. They might also wade, swim, or place a stick on the banks to get across a river.

In extreme cases, people will crawl into caves where their ancestors were buried to worship them because they think doing it outside is not demonstrating enough devotion.

A Guangxi-based Douyin blogger identified as Huang Ci Wei, released a video clip showing how he and his relatives spent three hours on craggy mountain roads before reaching its peak to sweep the tomb of the “great-grandfather of my great-grandfather”.

Huang and his family brought roast chicken, liquor, firecrackers, and paper hell money for the ceremony.

“Perhaps blazing a way through all manner of obstacles to visit the ancestors’ tombs will ensure we never forget them, and they will live in our hearts forever,” he said in the video.

These exhausting expeditions have created a buzz on mainland social media.

“It’s a normal traditional practice in my hometown. I always thought it was the same in other provinces. Kids as young as three will climb mountains with their parents to worship ancestors,” one internet user from Guangdong province said.

“Every year, after I visit my ancestors’ tombs, I will need to rest for a whole week,” said another.

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Taiwan earthquake disrupts trains in mainland China at start of Ching Ming travel rush

https://www.scmp.com/news/china/politics/article/3257741/taiwan-earthquake-disrupts-trains-mainland-china-start-ching-ming-travel-rush?utm_source=rss_feed

The earthquake that shook Taiwan on Wednesday also caused major disruptions to public transport in mainland China, with several coastal provinces reporting tremors that prompted suspensions and major delays to rail services.

Affected provinces included Fujian and Jiangxi in the southeast, Guangdong in southern China and Zhejiang on the east coast. The eastern metropolis of Shanghai also felt the impact, with some high-speed rail services suspended.

Local railway operators issued notices advising passengers that some services were suspended or operating at limited speed, and said they should expect delays.

The 7.3 magnitude earthquake struck the east coast of Taiwan at 7.58am, causing buildings to collapse and killing at least nine. There are 880 people reported to be injured, while efforts are continuing to rescue 130 trapped in the wreckage.

While Taiwan’s eastern Hualien county suffered the brunt of the quake, its effects were felt across the island.

According to the China Earthquake Networks Centre, the quake was monitored at a depth of about 12km (7.46 miles), with its epicentre in the waters south of Hualien.

The Ministry of Natural Resources’ tsunami warning centre issued a level 1 red alert – the highest of four levels – after the earthquake struck, which it lifted before noon.

Tremors were felt in cities in Fujian – the mainland coastal province facing Taiwan – and other metropolitan areas, including Shanghai, Suzhou, Shenzhen, Guangzhou and Shantou.

Among the affected rail services were some linking Fujian to its neighbouring province Guangdong. Other trains operating within Fujian, Jiangxi and Zhejiang provinces were also suspended while tracks were inspected.

The delays left Fujian passengers stranded at stations in the provincial capital Fuzhou, as well as the cities of Quanzhou and Xiamen, according to media reports.

Passengers told state news agency Xinhua that they were evacuated from trains that stopped soon after they started to leave the station, and were waiting for operations to resume.

Media outlets reported that two stations in Fuzhou had suspended 28 services, as of 10am on Wednesday. The railway operator also announced delays of several services passing through the city.

A dozen high-speed rail services were suspended in Shanghai on Wednesday morning, including trains to Xiamen and Ningbo in neighbouring Zhejiang province, and Kunming, provincial capital of Yunnan in southwestern China.

The disrupted services could have a major impact, with a five-day travel rush expected for the Ching Ming Festival – also known as tomb-sweeping day – which starts on Wednesday.

The national rail operator forecast that 75 million trips will be made during the travel period, with an average of 15 million journeys each day.

The operator of services in the Yangtze River Delta region – which covers Shanghai and the three neighbouring provinces of Jiangsu, Zhejiang and Anhui – was expecting to handle 3.15 million trips on Wednesday.

In Fuzhou, one station said it was expecting an average of 104,000 journeys for each day of the travel rush.

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Fairfax police academy bars Herndon officers in dispute over Chinese signature

https://www.washingtonpost.com/dc-md-va/2024/04/03/fairfax-herndon-dipute-chinese-signature/2024-03-29T19:41:16.670Z

When 61 law enforcement trainees graduated last month from Fairfax County’s Criminal Justice Training Academy, including county police officers and some from smaller departments in Fairfax, each received a certificate signed by the academy’s director, county police Maj. Wilson Lee, who is Chinese American.

Lee, whose given name is Lee Wai-Shun, signed the certificates in Chinese, as he typically does. Among those who received them March 7 were three new officers from the Herndon town police force — the first trainees from that department to attend the academy since Lee took command more than a year ago. When Herndon Police Chief Maggie DeBoard noticed the Chinese signature shortly before the graduation ceremony, she was not pleased.

“This is not acceptable for my agency,” she told Lee in an email. “I don’t want our Herndon officers to receive these.”

Not only did Fairfax County refuse to issue new certificates as DeBoard requested, but a top Fairfax official has notified DeBoard that Herndon police trainees will no longer be welcome at the academy.

In a March 18 letter to DeBoard, Deputy County Executive Thomas Arnold, who oversees public safety, said he had decided “to terminate the Town of Herndon Police Department’s affiliation with the Fairfax County Criminal Justice Academy effective June 1.” Although the letter did not mention DeBoard’s complaint about the signature, Arnold said in an email to The Washington Post that her “comments and actions … were inconsistent with the culture of Fairfax County and our One Fairfax Policy.”

The written policy, applicable to all Fairfax government and school agencies, articulates the county’s code of inclusion, laying out “expectations for consideration of racial and social equity … when planning, developing, and implementing policies, practices, and initiatives.” Arnold did not specify which provisions of the policy he thought DeBoard had violated.

Fairfax police academy certificates are provided before graduation to the chiefs of the new officers, who add their signatures to the academy certificate. That was how DeBoard noticed Lee’s signature in Chinese.

“Hello Wilson, I just found out that the academy graduation certificates were signed by you in some other language, not in English,” she told Lee in an email shortly before the graduation. After calling the signature “unacceptable,” she asked him to sign new certificates for her officers in English, “the language that they are expected to use as an officer.” She said the Chinese signature was a change “implemented with zero input from the participating chiefs and sheriffs.”

According to witnesses, the complaint led to a heated discussion at the graduation ceremony between DeBoard and Fairfax Police Chief Kevin Davis, followed by the county’s decision to bar Herndon officers from future academy classes.

DeBoard, whose department has about 54 officers, declined to comment on why she objected to the signature. Among Herndon’s 24,000 residents, 16 percent are of Asian descent, according to 2022 census data. The countywide figure is about 21 percent.

Davis also declined to comment on the dispute, as did Lee.

Fairfax police declined to reissue the certificates and later said in a statement: “Our last several recruit classes are majority minority as we make historic strides to better reflect the community we serve. Any expressed sentiments that appear to take issue with these realities are unfortunate and not reflective of Fairfax County’s commitment” to its One Fairfax policy.

Herndon Mayor Sheila Olem and Town Manager Bill Ashton also declined to be interviewed about the decision to bar Herndon officers from the academy. But town spokeswoman Anne E. Papa said in a statement, “Herndon’s residents are also taxpaying residents of Fairfax County, and it is a matter of public safety for our law enforcement officers to continue coordinating as much as possible.”

She said Herndon officers have been attending the academy “for many years, and we are hopeful that we will be able to continue working together.”

In addition to the Fairfax and Herndon police, the academy trains Vienna police officers, Fairfax sheriff’s deputies and Fairfax fire marshals. There are two other police academies in the region: the Northern Virginia Criminal Justice Academy in Ashburn, attended by police officers and sheriff’s deputies from Loudoun and Arlington counties and the city of Alexandria, and the Prince William County Criminal Justice Academy.

DeBoard, 60, started her career as a Fairfax County police officer in 1987 and rose through the ranks to major before becoming the first female police chief in Northern Virginia in 2012. She has taken numerous steps to reach out to her non-White constituents, including attending a “Justice for Black Lives” rally after the death of George Floyd in 2020 and sending a letter to the immigrant community urging them to call police without fear of deportation.

The letter, in Spanish and English, was sent home with schoolchildren and posted throughout apartment complexes in the town.

She served as head of the Virginia Association of Chiefs of Police in 2020 and 2021 and opposed some police restructuring passed by the General Assembly, as many police groups nationwide did. And she was accused by the NAACP in 2020 of racial bias after a fight between a Black and a White student on a Herndon Middle School bus. A Herndon officer found that the Black youth had instigated the incident, but his mother disagreed and said a video from the bus corroborated her version.

DeBoard held a news conference to deny any racial motivation and said eight witnesses had named the Black youth as the instigator, although she acknowledged she had not watched the video of the incident. Neither youth was charged.

After DeBoard’s complaint about the signature was first reported by WRC (Channel 4) on March 8, a day after the graduation, the National Asian Peace Officers Association sent a letter to Davis, thanking him for defending Lee.

“We want to extend our heartfelt gratitude for your continued support and commitment in your efforts to exemplify Diversity, Equity, and Inclusion in your workplace,” Shane W. Liu, the association president, wrote, adding that Davis’s department “clearly models and reflects the expectations of the community you serve.”

Later, after Fairfax’s decision to exclude Herndon officers from future academy classes, officials with the Hamkae Center, a grass-roots nonprofit that organizes Asian Americans in Virginia for social, racial and economic justice, praised the move in a statement.

“Residents of color are already less likely to trust police,” wrote Zowee Aquino, a leader of the center. “How are we supposed to trust that we will be treated with respect if this is how a chief of police is willing to treat a colleague?”

Aquino said Asian American advocates have “warned our state officials that using such race and ethnicity-based rhetoric … will negatively impact Asian Americans. Attempting to reject and delegitimize a signature from a highly-ranked official — because the name was written in an unfamiliar language that uses a non-Latin alphabet — is a direct example of that impact.”

China’s new data agency plans fast track to powerful national computing network

https://www.scmp.com/news/china/politics/article/3257681/chinas-new-data-agency-plans-fast-track-powerful-national-computing-network?utm_source=rss_feed

China will accelerate construction of a nationwide integrated computing power network, its top data regulator vowed at its first annual meeting as Beijing seeks to boost innovation in a technology competition with the United States.

At the two-day national data work conference which ended on Tuesday, National Data Administration (NDA) head Liu Liehong vowed to “optimise data infrastructure distribution” and “accelerate construction of the computing power network”.

“We are working to improve the distribution of general purpose, intelligent and supercomputing power, increase the synergy of east-middle-west regions, support the integration of computing power and green electricity, as well as balance between its development and security,” he said, according to an NDA post on social media platform WeChat.

The conference took place just months after the NDA was inaugurated at the end of October, in response to President Xi Jinping’s calls to drive digital development and innovation in a competition with the US for hi-tech dominance.

The nationwide computing power network, which will be up and running by next year, is designed to unite computing centres across the country, addressing regional digital imbalances between the more prosperous areas of eastern China and the energy-rich west, the NDA has said.

China is spending billions on a national computing network. Its data chief says why

China, which is second only to the US in aggregated computing power, aims to scale up its capacity by half by 2025. Demand for computing power, particularly the GPU power necessary for artificial intelligence learning, has been surging in recent years.

The graphics processing unit (GPU) was originally designed to accelerate computer graphics and image processing in games. But it can also perform high-speed calculations and has become integral to the development of large language models.

But the US Commerce Department tightened hi-tech export controls in October, citing national security concerns. The sanctions prevent Nvidia – which has a near monopoly on GPUs – from exporting its advanced chips to China.

Xue Lan, professor and director of Tsinghua University’s Institute for AI International Governance, said in February that many Chinese companies had been affected by the Nvidia ban.

“GPU power has become a bottleneck [for China’s AI ambitions],” he told a forum in Hangzhou, provincial capital of Zhejiang, in eastern China.

Xue noted that another problem faced by China’s technology companies and researchers is “the relatively low quality” of data. “China has a large amount of data, but it has not been industrialised. Standardised data service providers are few,” he said.

According to the NDA’s WeChat post, Liu also vowed at this week’s conference to make good use of government investments and facilitate the production of data and its circulation.

The agency had heard Xi’s “concerns on data development and security” and put the marketisation of data resources front and centre in its efforts to support China’s “high quality” development, he said.

This year, the NDA will prioritise improving data ownership, circulation and transaction policies and increasing data development and utilisation, it said.

The NDA will also maintain “high alert” on data security and promote international cooperation by optimising regulations to facilitate cross-border data flows, according to its social media post.

South China Sea: Philippines taking ‘dangerous path’ with President Marcos Jnr’s anti-China moves, sister Imee says

https://www.scmp.com/week-asia/politics/article/3257672/south-china-sea-philippines-taking-dangerous-path-president-marcos-jnrs-anti-china-moves-sister-imee?utm_source=rss_feed

Senator Imee Marcos, sister to President Ferdinand Marcos Jnr, has voiced her disagreement with her brother’s recent efforts to counter China’s aggression in the South China Sea, saying that it’s leading the country down a “dangerous path”.

In response to a March 23 incident in the disputed waters in which three Philippine Navy sailors were injured after Chinese Coast Guard personnel fired water cannons at their vessel, Marcos Jnr signed an executive order creating a National Maritime Council (NMC) with a mandate to “strengthen the Philippines’ maritime security and maritime domain awareness”.

Under the directive, the Philippine president authorised the council to accept “donations, contributions, grants, bequests or gifts” from allies to improve maritime security.

US, Philippines, Japan, Australia to hold South China Sea drill amid China actions

But in a statement released on Monday, Senator Marcos referenced the wars in Ukraine and Gaza, describing defence and maritime security donations as “the fuel to never-ending conflict”.

The lawmaker, who chairs the Philippine Senate Committee on Foreign Relations, went on to warn that every action that may put Filipinos in danger is a “gross irresponsibility [that] must be avoided at all costs.”

“Let’s not be hasty, let’s not be hot-headed so that we can take care of the welfare of our people,” she said.

“Emotion rather than reason has prevailed in our maritime conflict with China and is leading us down a dangerous path that will cost us more than just Filipino pride.”

General Andres Centino, whom Marcos Jnr appointed as chief of the NMC, rebuked the president’s sister, saying that allowing foreign aid to strengthen the country’s maritime defence would not equate to foreign intervention.

“This has been a practice even before the creation of the National Maritime Council,” Centino said, explaining that the central government had in the past received maritime security aid from other countries, including the United States, Britain, Australia and Japan.

“I don’t think it is foreign intervention. It would be more of acknowledging that we need the help of our partners and allies.”

On March 23, three Philippine Navy sailors were injured when Chinese coastguard personnel fired water cannons at their vessels. Manila also accused the Chinese ships of conducting “dangerous” manoeuvres and blocking a civilian chartered resupply ship, the Unaizah May 4, at the Second Thomas Shoal in the West Philippine Sea, Manila’s name for the parts of the South China Sea that lie within the Philippines’ exclusive economic zone (EEZ).

“We now see the execution of more dangerous manoeuvres and even the ramming of their boats against ours and more recently, the excessive use of water cannons at full force,” Centino said, noting that despite China’s actions, Manila would not use similar tactics.

“We don’t want to follow their ways. The other countries have actually criticised what they’re doing. We will not follow their lead of using illegal actions.”

Senator Marcos, however, reasoned that emotion rather than reason has prevailed in the country’s maritime conflict with China.

“To prevent yet another regional conflict, what we need instead are solutions for peace from those who claim to be our genuine allies,” she said.

The president’s sister was not the only lawmaker to voice her disagreement. Congressman Pantaleon Alvarez has also been a vocal critic of the president’ handling of the issue and even called for Marcos Jnr’s immediate resignation.

Last week during Holy Week, the most sacred week in the Christian calendar, Alvarez proposed that the president leave office and make way for Vice-President Sara Duterte to de-escalate tensions with China.

“I will advise the president to reflect and meditate this Holy Week. If Jesus Christ himself made sacrifices for the people, maybe it is his turn to do the same by voluntarily resigning from his position and turn over the functions of the presidency to the duly elected vice-president,” he said.

Sara Duterte, former President Rodrigo Duterte’s popular daughter, has previously expressed sentiments echoing her father’s comparatively China-friendly foreign policy stance, although she has remained silent on President Marcos Jnr’s recent actions regarding the West Philippine Sea. The vice-president is also known to be a close friend and ally of Senator Imee Marcos.

Antonio J Montalvan II, a social anthropologist, public writer and university professor, told This Week in Asia that the Marcos government is serious about reversing Duterte’s policy of deference towards China, in part as an effort to improve his family’s image on the world stage.

“What could be the politics behind it? I think he is determined to deodorise the tarnished Marcos image. By being pro-United States, he removes the Duterte stigma but also becomes the darling of the Western world,” Montalvan II said.

On Tuesday, Defence Secretary Gilbert Teodoro Jnr urged the public not to lose sight of the fact that the main threat to the country’s rights in the West Philippine Sea was the Chinese government’s illegal activities.

“Let us not fall into the trap set by Chinese propaganda of refocusing the debate on a so-called promise while deflecting attention away from China’s government, thereby freeing and allowing them to continue with their illegal activities in our EEZ,” Teodoro said, referring to the alleged “gentleman’s agreement” between former President Duterte and Chinese President Xi Jinping to maintain the status quo in the South China Sea.

China has competing claims in the disputed water with the Philippines, Malaysia, Brunei and Vietnam. In 2016, The Hague’s international tribunal dismissed China’s sweeping claims over the South China Sea – a ruling that Beijing rejected and ignored.

On Monday, US National Security Adviser Jake Sullivan spoke with his Philippine counterpart, National Security Adviser Eduardo Año, and affirmed Washington’s commitment to its defence treaty with Manila.

“Mr. Sullivan underscored the ironclad US alliance commitments to the Philippines under the US-Philippines Mutual Defence Treaty, which extends to armed attacks on Philippine armed forces, public vessels, or aircraft – to include those of its coastguard – anywhere in the South China Sea,” said the readout published on the White House website.

Signed in 1951, the Mutual Defence Treaty calls on both countries to aid each other in times of aggression by an external power. The Pentagon previously said it was prepared to assist Manila if it invoked the treaty amid threats from other nations.

‘Disgusting’ China tourist swaps water bottle for new souvenir flask at British Museum angering mainland social media

https://www.scmp.com/news/people-culture/trending-china/article/3256576/disgusting-china-tourist-swaps-water-bottle-new-souvenir-flask-british-museum-angering-mainland?utm_source=rss_feed

A visitor from China touring the British Museum has come under fire after she opened a box containing a souvenir flask and replaced it with a used water bottle.

A video of the incident went viral in mid-March after a user on Xiaohongshu, China’s Instagram, brought attention to the incident and said she felt “speechless” when she watched it , according to the news outlet Illnews.com.

Online sleuths are confident the woman is from China because the water bottle was marked in both English and simplified Chinese characters, the mainland’s official written language.

The characters indicate that the water bottle was from the Xinfu branch of Jinzhou Bank of Liaoning province in northeastern China and was likely given away for free as a marketing tool, a common strategy worldwide.

There is no proof the person is from the mainland, and the person could be from other parts of the world where simplified characters are relatively common.

The online observer pointed said: “Many people only visit the British Museum once in their life. Imagine buying a souvenir and opening the package only to discover a used, dirty bottle. What would they think?

“What’s more, this flask is not expensive. Please do not do this again. It’s really disgusting behaviour!”

Before the Covid-19 pandemic, tourists from China were developing a bad reputation abroad for behavior that reflected poorly on the country.

Over the past two decades, China’s Foreign Ministry frequently issued notices to remind its citizens to pay attention to their manners.

The number of Chinese tourists traveling abroad has dropped dramatically since the pandemic.

According to Statistica, an online statistics outlet , 87 million Chinese residents left the country in 2023, a significant drop from the 155 million who went abroad in 2019.

One notice sent out in September 2013, ahead of the annual National Day holiday period, a peak time for traveling abroad, said.

“Please do in Rome as the Romans do. Act appropriately, mind your image, get along with local people in a friendly way, and demonstrate the good image of Chinese tourists.”

The flask-swapping incident has captivated mainland social media.

One person on Weibo described the incident as a “shame for us.”

“The blue water bottle is obviously owned by an older person in his or her 60s or 70s. Maybe they thought stealing the property from Britain was patriotic,” referencing the British pillaging of China during the Opium Wars.

South Koreans bid emotional farewell to beloved panda leaving for China

https://apnews.com/article/south-korea-panda-farewell-china-83688054b1bf1319ea6d7692367e5409A vehicle carrying Fu Bao, the first giant panda born in South Korea, arrives for a farewell ceremony before Fu Bao is transferred to the airport for China at the Everland amusement park in Yongin, South Korea, Wednesday, April 3, 2024. A crowd of people, some weeping, gathered at the rain-soaked amusement park in South Korea to bid farewell to their beloved giant panda before her departure to China on Wednesday.(AP Photo/Lee Jin-man)

2024-04-03T03:26:40Z

SEOUL, South Korea (AP) — A crowd of people, some weeping, gathered at a rain-soaked amusement park in South Korea to bid farewell to a beloved giant panda before her departure to China on Wednesday.

Fu Bao has been a major attraction at the Everland theme park near Seoul since she was born there in 2020 to pandas Ai Bao and Le Bao, who came from China in 2016 on a 15-year lease program.

China sends pandas abroad as a sign of goodwill but maintains ownership over the animals and their cubs. Decades of conservation efforts in the wild and study in captivity saved the species from extinction, increasing its population from fewer than 1,000 at one time to more than 1,800 in the wild and in captivity.

On Wednesday, many panda fans in South Korea braved rain to attend a farewell ceremony at the Everland park for Fu Bao, who was to be flown to China later in the day.

As a truck carrying Fu Bao slowly moved to a plaza in the rain, many visitors wearing raincoats or holding umbrellas waved flags, shouted their parting messages and took photos with their mobile phones. Some loudly cried or wiped away tears.

The truck was decorated with a huge picture of Fu Bao and the message “It was a miracle that we met you. Thank you, Fu Bao.”

But she wasn’t shown to the public on Wednesday. The park last showed her to the public on March 3.

“You are our baby panda forever even if 10 years pass or 100 years pass,” zookeeper Kang Cheol-won said in a speech during the ceremony. “Dear all, Fu Bao is now leaving. Please, remember Fu Bao for a long, long time … and please don’t cry much!”

Fu Bao’s mother, Ai Bao, gave birth last year to female twin cubs, the first panda twins born in South Korea.

US report blames Microsoft’s ‘inadequate’ cybersecurity for Chinese hack

https://www.scmp.com/news/world/united-states-canada/article/3257656/us-report-blames-microsofts-inadequate-cybersecurity-chinese-hack?utm_source=rss_feed

A Chinese-state intrusion last year of Microsoft Corp. technology that enabled hackers to gather US officials’ emails “should never have occurred,” according to a report released on Tuesday from a government cyber review board.

The Cyber Safety Review Board, a White House-mandated group designed to examine major cyberattacks, said Microsoft displayed corporate practices that “deprioritised both enterprise security investments and rigorous risk management.” The company security culture was “inadequate” and “requires an overhaul,” the report said.

The review board examined the 2023 hack of Microsoft Exchange Online inboxes, in which outsiders breached 22 organisations and hundreds of individuals. US Commerce Secretary Gina Raimondo; the US ambassador to China, Nicholas Burns; and Representative Don Bacon, a Nebraska Republican, were among those ensnared in the campaign.

A hacking group associated with the Chinese government known as Storm-0558 was behind the effort, the report said. Microsoft still has yet to determine how attackers infiltrated the company, according to the report.

US congressman Don Bacon says Chinese Microsoft spies hacked his emails

Reviewers also determined that the company was slow to update misleading or inaccurate disclosures about the incident. In one case, Microsoft suggested in September 2023 that hackers had used a tool known as a digital certificate to steal emails. It wasn’t until November that the firm acknowledged to the board that its September disclosure was “inaccurate,” according to the report.

Microsoft said it would review the report for additional recommendations.

“While no organisation is immune to cyberattack from well-resourced adversaries, we have mobilised our engineering teams to identify and mitigate legacy infrastructure, improve processes and enforce security benchmarks,” a Microsoft spokesperson said.

While Microsoft is primarily known for its software for corporations and consumers, the Redmond, Washington-based company has emerged as the biggest provider of cybersecurity products in recent years – an area of the business that’s grown to about US$20 billion annually.

US Senator Ron Wyden, who called for the probe, said that federal agencies share some of the blame for the breach “for showering Microsoft with billions of dollars in government contracts, without demanding the company meet minimum cybersecurity standards.”

“The government’s dependence on Microsoft poses a serious national security threat, which requires strong action,” the Democrat from Oregon said in a statement.

“The government must set strict, minimum cybersecurity standards for technology vendors, adherence to those standards must be verified through independent audits, and companies and their senior executives that violate those standards must be held accountable.”

US court orders exiled Chinese billionaire Guo Wengui to face fraud indictment

https://www.scmp.com/news/world/united-states-canada/article/3257651/us-court-orders-exiled-chinese-billionaire-guo-wengui-face-fraud-indictment?utm_source=rss_feed

A US judge on Tuesday rejected exiled Chinese businessman Guo Wengui’s bid to dismiss an indictment accusing him of defrauding thousands of investors out of more than US$1 billion.

US District Judge Analisa Torres in Manhattan said prosecutors sufficiently alleged that Guo engaged in a pattern of racketeering through four fraud schemes, and that proving it was a matter for trial.

Lawyers for Guo did not immediately respond to requests for comment after business hours.

Guo has pleaded not guilty to 12 criminal charges that included securities fraud, wire fraud, unlawful monetary transactions and conspiracy, including for money laundering.

According to the indictment, Guo and his accomplices defrauded investors in a media company, cryptocurrency and other ventures.

No bail for exiled Chinese businessman Guo Wengui

The indictment said Guo took advantage of his prolific online presence and hundreds of thousands of followers by promising outsize financial returns and other benefits.

In reality, the scheme allowed the co-conspirators to enrich themselves and family members, and fund Guo’s “extravagant lifestyle”, the indictment said.

Two co-defendants face related criminal charges, including one defendant charged with obstruction.

Also known as Ho Wan Kwok and Miles Kwok, Guo is a critic of China’s Communist Party and business associate of former US president Donald Trump’s one-time adviser Steve Bannon.

Guo has been jailed in Brooklyn since his March 2023 arrest, with Torres and a federal appeal court rejecting his proposed US$25 million bail package last year.

Jury selection in his trial is scheduled to begin on May 20.

Prosecutors also sought the forfeiture of various assets including bank accounts, a US$37 million yacht, a New Jersey mansion, a Bugatti, a Lamborghini and a Rolls-Royce.

Guo filed for Chapter 11 bankruptcy protection in Connecticut in February 2022. That case was later combined with the bankruptcies of other companies he controlled. Torres has twice rejected Guo’s bid to stay the bankruptcy proceedings.

China names pioneer team of state firms to take pole position in race to tech’s bleeding edge

https://www.scmp.com/economy/china-economy/article/3257597/china-names-pioneer-team-state-firms-take-pole-position-race-techs-bleeding-edge?utm_source=rss_feed

A select group of China’s state-owned enterprises (SOEs) has been designated as the vanguard of development for emerging and future industries, another step in Beijing’s campaign to break through to the bleeding edge in technologies like artificial intelligence, neuroscience, quantum computing and nuclear fusion to reorient its growth model and counter containment attempts from the West.

The State-owned Assets Supervision and Administration Commission (SASAC) – which oversees 97 large industrial conglomerates – launched a pioneer scheme on Friday for major conglomerates to cultivate unicorn companies and tech start-ups to form clusters and work for new innovations, with the commission promising ample support and resources along the way, state outlet Xinhua reported.

The scheme is seen as the state assets watchdog’s answer to President Xi Jinping’s exhortations to develop “new quality productive forces”, an overall strategy to spur growth for the world’s second-largest economy through home-grown innovation while mitigating the effects of tech export bans and the vagaries of geopolitics.

SASAC director Zhang Yuzhuo said at the country’s annual parliamentary sessions last month that central SOEs – those controlled by the central government – will earn 35 per cent of their income from strategic industries in 2025.

Several up-and-coming tech subsidiaries nurtured under their larger state parents within the past three years made the initial round, including China Telecom’s Telecom Quantum, China Aerospace Science and Technology Corp’s Rocket Medical and an AI-powered geological survey company operating under China Coal Technology and Engineering Group.

“SASAC has given a clear mandate that developing emerging and future industries is a pivotal task. While cultivating start-ups and units within their ecosystems, SOEs will also tap external investment and merger opportunities,” wrote Lin Xipeng, an analyst with China Merchants Securities, in a note on Monday.

Hu Yongjun, an official with the State Information Center under the National Development and Reform Commission – the country’s top economic planner – told state media last week it would be urgent for China to plan in advance to be a leader in the global tech race.

“It’s exigent to have forward-looking plans for future industries, when America and Europe have launched similar programmes. History offers lessons about China’s failure to cultivate competitiveness in photolithography machines, industrial software and operating systems, the future industries in the 1970s and 80s,” he said, adding this had led to the West’s current “chokehold” on China’s tech development.

But Fu Weigang, president of the Shanghai Institute of Finance and Law think tank, has questioned whether SOEs – especially the lumbering giants under the central government – will be nimble and flexible enough to lead the hi-tech charge.

“There are risks and uncertainties when SOEs run tech firms. A not so distant example is how the [Communist Party media outlet] People’s Daily spent huge to launch a search engine but failed. There could be a repeat of such failures in realms like AI,” he said.

“One underlying reason is that the core assets of hi-tech firms are usually technologies and researchers, but [they] can be undermined when many SOEs cap pay and bonuses and prioritise other issues over efficiency.”

This is not the first instance of Beijing choosing a select group of companies to advance national objectives. In recent years government support has been levied to form an army of small-yet-successful “hidden champions”, as well as a cohort of small but advanced “little giant” tech manufacturers. However, most of the beneficiaries of these initiatives were private SMEs.

Alex Ma, an assistant professor of public administration with Peking University, said those prospective “hidden champions” and “little giants” could worry about being left behind as a “national team” of SOEs joins the tech crusade.

“They may wonder whether government support will be pared back to favour SOEs, or even if they will be acquired,” he said.

“The hope is that there could be synergy, as hidden champions and little giants focus on advanced manufacturing while SOEs strive to attain breakthroughs in future industries.”

New dating trend sees China youth flock to live matchmaking events at famous tourist site in search of love

https://www.scmp.com/news/people-culture/trending-china/article/3255915/new-dating-trend-sees-china-youth-flock-live-matchmaking-events-famous-tourist-site-search-love?utm_source=rss_feed

A new matchmaking trend has emerged among young adults in China in which women boldly declare their preferences on stage at a famous tourist site, and men step forward if they meet the criteria.

The live event, called “Auntie Wang’s Matchmaking,” which takes place in Kaifeng, in China’s northern Henan province, has attracted widespread attention on mainland social media.

An enthusiastic crowd of young adults attended one recent gathering, with some even climbing trees to get a better view.

Women at the event were encouraged by Auntie Wang, the host and the matchmaker, to openly share their requirements in a partner, prompting interested men who met the criteria to step forward.

Emphasis was placed on directness, with potential matches quickly exchanging WeChat contact details to further explore their connections.

Auntie Wang also provides guidance on how they should approach and date each other.

One notable attendee, a 20-year-old woman from Shandong province in eastern China, had travelled for nine hours to take part in the event.

In a trending online video, another woman expressed her preference for “handsome, wealthy” men, capturing the attention of two young men who competed for her interest on stage.

One came from Shandong and claimed to own a mountain and eight properties.

The other was a “second-generation” beneficiary of a demolition and relocation from Zhengzhou, Henan, who told the woman he had attended the event specifically hoping to find her.

An amused Auntie Wang advised the Shandong suitor to focus on expressing genuine affection rather than simply showcasing his wealth.

“Can’t you say ‘I cannot contain my feelings, I came here just for you. I fell for you at first sight, I think of you day and night?’,” she suggested.

Originally intended to be a local performance, the event has unexpectedly become a dating platform for many of the post-2000 generation, creating a new space for them to explore romantic possibilities.

Auntie Wang disclosed that a one-day event at the location could easily accommodate three online matchmaking groups, each made up of 500 members.

She told Henan Broadcasting System that a young man, who had silently harboured feelings for a young woman for seven years, finally gathered the courage to confess his affection at the event. Live on stage, she agreed to start a relationship with him.

So far, the function has brought together about 50 couples.

“Among the guests who have come up on my stage, one couple has already had a child, and there are others deeply in love. I feel that is quite an accomplishment,” said Wang.

“At over 60 years old, I’m thrilled to still be able to make a difference by helping the youth in my own small way,” she said.

In 2023, China experienced its first marriage-rate rebound after a decade-long decline, with 7.68 million couples tying the knot, according to data released by the Ministry of Civil Affairs on March 15, 2023.

This trend has resonated with the public.

“Why did I not know Kaifeng had such a place earlier?” one online observer said.

“No joke, I suggest this matchmaker goes on a national tour,” said another.

“Wait for me, I’m heading there at the end of this month,” a third said.

Can China’s hopes that Shanghai Cooperation Organisation will offer new model for international relations come to pass?

https://www.scmp.com/news/china/diplomacy/article/3257606/can-chinas-hopes-shanghai-cooperation-organisation-will-offer-new-model-international-relations-come?utm_source=rss_feed

China has high hopes that the Shanghai Cooperation Organisation will come to represent what foreign policy chief Wang Yi has called a “new type of international relations”.

But while the bloc has expanded its role and membership since its formation as Eurasian security bloc in 2001, many diplomatic analysts say it still holds little sway on global issues, including the wars in Ukraine and the Middle East.

Although it has become a key diplomatic tool for China as it seeks to steer regional priorities and increase economic cooperation among neighbouring states, some observers warned that serious disagreements among members – especially India, Pakistan and China – limit its effectiveness on the world stage.

China set up the group in Shanghai along with Russia and Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan as a way of building trust and easing border tensions in the wake of the collapse of the Soviet Union. At the time its priorities were stated as fighting the “three devils” of terrorism, separatism and extremism.

Since then its role has expanded to include areas such as economics and trade and the organisation now bills itself as the world’s largest regional grouping – covering more than 40 per cent of the global population – after India, Pakistan and Iran became members, with Belarus on track to join this year.

Highlighting the importance China attaches to the bloc, Wang told an event in February to mark the 20th anniversary of the establishment of its secretariat in Beijing that the SCO “remains a diplomatic priority”.

China and Russia seek to expand bloc as alternative to Western order: analysts

He described the “Shanghai spirit” as one based on “mutual trust, mutual benefit, equality, consultation, respect for the diversity of civilisations and pursuit of common development, setting an example of a new type of international relations and regional cooperation”.

He went on to say: “All member states should work together to make the SCO bigger, stronger and more solid, so that the SCO can play the role of a ‘stabilising anchor’ amid changes unseen in a century”, according to a statement from the Chinese foreign ministry.

“Noting the accelerated evolution of changes unseen in a century and the volatile and chaotic international situation at present, Wang Yi said that there is a greater need for carrying forward the Shanghai spirit and a cooperation platform such as the SCO.”

Rabia Akhtar, director of the Centre for Security, Strategy and Policy Research at the University of Lahore in Pakistan, said the bloc’s relevance has “increased over the years” with more countries looking to join.

She said: “Member states can now voice their views on key regional and global issues through the organisation’s platform while getting a buy-in from one an another.

“At a time when diplomacy is again taking a back seat, groupings like this must be valued and strengthened.”

She said its role had evolved to focus more on boosting economic cooperation among members and address increasing concerns about issues such as counterterrorism, energy security and climate change.

But Akhtar and other diplomatic analysts pointed to the limits on the bloc’s influence on the world stage

“As of now, the SCO does not have the clout or the capacity to play a critical role in putting out fires in Europe and the Middle East,” she said.

In the case of the Ukraine war – now in its third year – she argued the SCO has been “restricted” from playing any meaningful role given Russia’s membership.

She said the group could still strongly advocate for dialogue between warring parties and “had major stakes” in resolving these conflicts because “the region’s politics of pipelines and corridors could be greatly affected by the war in Europe”.

China’s outgoing EU envoy gets top job at Shanghai Cooperation Organisation

Li Lifan, head of the SCO centre at the Shanghai Academy of Social Sciences, said its expansion over the years helped raise its international status and promote regional cooperation, but warned that the grouping has been unable to help resolve the conflicts in the Middle East and Ukraine because there were “so many differences” between members.

Amitendu Palit, senior research fellow at the National University of Singapore’s Institute of South Asian Studies, said: “It certainly has an importance in potential resolution of conflicts in West Asia, the Middle East and the central Asian region.”

But he said that “until now, its role in this regard has been minimal”, again pointing to disagreements between the members.

For instance, Chinese President Xi Jinping has called for more collaboration on regional projects, but India has consistently opposed China’s flagship Belt and Road Initiative because a key element, the China-Pakistan Economic Corridor passes through parts of Pakistan-controlled Kashmir that New Delhi claims.

At last year’s SCO summit chaired by India, Prime Minister Narendra Modi said that while better connectivity would boost trade and foster trust, it was “essential” to respect the sovereignty and territorial integrity of member states.

However, in a sign of the internal tensions within the group, theIndian leader also appeared to be targeting another member country, Pakistan when he spoke about cross-border terrorism.

Russia stands ‘united’, Putin tells SCO virtual summit days after Wagner mutiny

Considering these problems, Palit said there was a need for member countries to agree on “core areas and approach conflict resolution processes accordingly” if the regional grouping wanted to be more effective.

Fan Hongda, a professor at Shanghai International Studies University’s Middle East Studies Institute, suggested that the organisation should also further clarify its goals and improve coordination among members.

“There is a lot of uncertainty at a time when the world is undergoing major changes. Unfortunately, the SCO has not demonstrated a trustworthy ability to deal with regional crises so far,” he said.

“The complex bilateral relations between member states and the differences in their respective development demands obviously limit the effectiveness of the cooperation.”

He cited the “quite conflictual” nature of some of the relations among members, and the differences in political systems, values and levels of economic development as being factors that “obviously limit the effectiveness of the cooperation”.

However, the bloc continues to grow and attract global attention, and remains a key prong of China’s diplomatic strategy.

Fan said Beijing viewed it as a “tool to expand its influence and deal with regional problems” in a changing world and had played a leading role in “developing” the group.

Alessandro Arduino, an affiliate lecturer at the Lau China Institute at King’s College London, said that since its establishment in 2001, it has evolved into a “significant platform aimed at challenging Western influence in Asia and the Middle East”.

While the SCO was not intended to be a “Nato of the East”, he said it was aimed at countering the “dominant Western-led international order”.

Arduino said the bloc “advances Beijing’s idea of a multipolar global order”, adding: “Across regions from Tashkent to Tehran, Beijing’s strategic narrative appears to be gaining traction.”

Chinese President Xi Jinping told last year’s SCO summit that members should keep their foreign policies independent, warning against “external attempts to foment a new Cold War”.

“We must resolutely reject any interference in our internal affairs and the instigation of ‘colour revolutions’ by any country under whatever pretext. The future of our development must be held firmly in our own hands,” he said in a veiled swipe at the West.

Arduino said Beijing’s desire to extend its reach from central Asia to the Persian Gulf went beyond leveraging its economic might. It would involve a “charm offensive” and rising security cooperation.

From a geopolitical perspective, he added that the SCO has seen growing interest from the Middle East, having recruited Iran as a full member and with others such as Turkey, Saudi Arabia and Egypt interested in joining.

This, Arduino said, also aligned with China’s push to foster closer ties with central Asian leaders in recent years.

Akhtar from the University of Lahore added that China’s foreign policy in the broader Eurasian region has been centred on creating stability through regional connectivity and economic integration.

China, she said, would want a “peaceful periphery” so it could advance its economic influence in the region and beyond.

The SCO, which Akhtar called an “important tool of Chinese diplomacy”, enabled China to take on a leadership role, set and steer regional priorities, and share its global outlook with member states.

“It is reasonable to argue that SCO has increased China’s bandwidth in the region, especially in Central Asia, to establish rules that not only benefit it but also attract other regional players,” she said.

Hong Kong residents make 1.76 million outbound trips over Easter break as mainland China tours surge in popularity

https://www.scmp.com/news/hong-kong/society/article/3257614/hong-kong-residents-make-176-million-outbound-trips-over-easter-break-mainland-china-tours-surge?utm_source=rss_feed

Cross-border tours to Guangdong, Fujian and Guizhou provinces in mainland China have gained in popularity among Hong Kong residents who made nearly 1.76 million outbound trips over the Easter break.

The number of Hongkongers who headed out of the city over the four-day holiday from Friday to Monday dwarfed the 400,000 or so inbound trips made by mainland visitors and other tourists, Immigration Department figures showed.

About 1.51 million, or 86 per cent, of the outbound trips by residents were made using the eight land crossings for passengers including Lo Wu, the high-speed rail link and Hong Kong-Zhuhai-Macau Bridge.

City tour agencies said on Tuesday that they had noticed a surge in the popularity of mainland destinations. Steve Huen Kwok-chuen, the executive director of EGL Tours, said the number of residents who joined the company’s cross-border tours tripled compared with last Easter.

“We have seen a ‘China fever’ among Hong Kong tourists after the coronavirus pandemic,” he said. “The number of Hongkongers opting for mainland destinations has surged, encompassing not only the Greater Bay Area but various places across mainland China.”

The bay area refers to the central government’s scheme to link Hong Kong, Macau and nine cities in neighbouring Guangdong into an integrated economic and business hub.

Huen said the most sought-after mainland destinations included bay area cities such as Foshan, Dongguan and Huizhou, while Sichuan, Yunnan, Beijing, Shanghai and Qingdao, among others, had also gained in popularity.

About 30 tours, each made up of 25 to 35 people, departed daily for the mainland over the four-day break, he said.

The operator also introduced new tours this year, taking tourists to see flowers in Wuhan and the Three Gorges reservoir area.

Hongkongers make 1.5 million outbound trips in first 3 days of Easter break

Vicky Tsim, who manages tour guides at travel agency Yummy Holiday, said more than 300 mainland-bound tours left from five checkpoints over the holiday, double last year’s number. Each tour had 30 to 40 members from Hong Kong.

She said tours to Guangdong cities accounted for about 80 per cent of all the ones to the mainland, and the most popular destinations included Guangzhou and Huizhou.

About 20 tours each went to Fujian province and Guilin city, a dozen to Guizhou, and nearly 20 to the Three Gorges reservoir region that stretches along the Yangtze River.

She said the company also organised three to four trips with a dozen Hongkongers each to the Xinjiang Uygur autonomous region.

Tsim attributed the surge in popularity of such tours to convenient transport, improved hotel facilities and lower prices across the border, as well as Hongkongers’ better understanding of the mainland.

Hong Kong recorded about 1.56 million outbound trips by residents over the four-day Easter holiday in 2018, before the coronavirus crisis, and around 617,000 inbound trips by mainlanders and other visitors.

The trend of Hongkongers to north to spend the Easter break this year left city tourism operators and restaurants complaining of sluggish business and calling for more support.

11 million people visit Hong Kong in first quarter, more than double 2023 number

Kelvin Yau Kam-wing, honorary chairman of trade body the Institute of Dining Professionals, said business in the catering sector dropped 20 to 30 per cent compared with the same period in previous years.

He said those who travelled elsewhere had stronger consumption power than those who remained in the city.

Yau appealed to the government to offer more support, such as more consumption vouchers to be used during holidays or in the evenings.

“Many residents think products and services are cheaper and better across the border than in Hong Kong, while we are losing our advantages,” he told a radio programme on Tuesday. “We must think of ways to maintain Hong Kong’s status as a gourmet paradise.”

Leung Fong-yuen, chairwoman of the Federation of Hong Kong Trade Unions in Tourism, highlighted on the same programme that Easter was not a public holiday on the mainland.

She said she expected that the number of visitors during the Labour Day “golden week” holiday next month would better reflect the city’s tourism position.

Hong Kong malls offer free parking as 541,000 people leave city for Easter break

Assistant professor Johnson Chan Chung-shing of the Chinese University of Hong Kong attributed the trend to the improved transport infrastructure that made trips to Shenzhen and other mainland bay area cities easier.

“The shift may reflect a broader trend of Hong Kong residents seeking travel experiences and exploring destinations outside the city,” he said.

“This trend may continue beyond the current economic cycle as preferences and behaviour evolve, which could lead to a sustained northbound shift, especially during long weekends or holiday breaks.”

Chan stressed the need for policymakers to closely monitor changes in travel patterns and consumer behaviour so they could better tackle the problem.

He said strategies to promote domestic tourism and support city businesses, as well the diversification of city attractions, could help make the city more appealing to different groups of people.

Additional reporting by Kahon Chan

China’s services activity growth speeds up in March as new business rises at quickest pace in 3 months

https://www.scmp.com/economy/economic-indicators/article/3257640/chinas-services-activity-growth-speeds-march-new-business-rises-quickest-pace-3-months?utm_source=rss_feed

China’s services activity growth accelerated in March as new business rose at the quickest pace in three months, a private-sector survey showed on Wednesday, a sign sentiment was staging a tentative recovery in the world’s second-largest economy.

Together with other better-than-expected manufacturing surveys, the data added to evidence that parts of China’s economy are gaining momentum in the first quarter.

The Caixin/S&P Global services purchasing managers’ index (PMI) edged up to 52.7 from 52.5 in February, above the 50-mark that separates expansion from contraction for the 15th consecutive month.

Thanks to improving underlying demand and efforts to boost new orders, the pace of new business expansion was the fastest since December.

That also pushed up business confidence as the subindex of future activity increased for the first time in three months amid hopes that new product lines, expansion plans and rises in client budgets will help boost sales.

However, better sales and business confidence failed to translate into higher recruitment.

Employment levels shrank for a second successive month in March, though the rate of job shedding eased from February.

According to respondents, resignations among staff and redundancies to improve productivity resulted in the fall in payroll numbers.

Taken together with the upbeat Caixin manufacturing PMI, the Caixin/S&P’s composite PMI rose to 52.7 last month from 52.5 in February.

It marked the highest reading since May 2023.

“Growth in supply and demand in both the manufacturing and services sectors accelerated slightly, with improved exports and sustained market optimism,” said Wang Zhe, economist at Caixin Insight Group.

But Wang noted employment in both sectors continued to contract, while input and output prices remaining low, indicating that “sluggish demand persisted”.

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South China Sea: US, Philippines, Japan, Australia to hold naval drill on Sunday amid China’s aggressive actions

https://www.scmp.com/news/asia/southeast-asia/article/3257621/south-china-sea-us-philippines-japan-australia-hold-naval-drill-sunday-amid-chinas-aggressive?utm_source=rss_feed

Japan, the United States, Australia and the Philippines are set to hold a joint naval exercise on Sunday off the Southeast Asian country’s Palawan Island in the South China Sea, multiple government sources said on Tuesday, amid China’s continuing aggressive actions.

It would be the first full-scale exercise involving the four countries aimed at enhancing interoperability among their forces, the sources said. The exercise will include anti-submarine warfare training, communication drills and sailing ships in formation.

In August, the same countries conducted joint training on offshore replenishment off the northwest Philippines. Their crews simply exchanged salutes and assembled for a photo exercise.

Will China’s fourth aircraft carrier steer towards troubled waters in Asia?

Sunday’s planned drill would occur against the backdrop of China’s assertiveness in the resource-rich South China Sea. The latest incident happened on March 23 when the Chinese Coast Guard fired a water cannon at a Philippine vessel on a mission to the Manila-controlled Second Thomas Shoal.

The vessel was heavily damaged in the incident, while Filipino servicemen aboard were injured.

Since last year, the Philippines has held separate “maritime cooperative activities” with the United States and Australia, which have agreements for visiting forces.

The Royal Australian Navy’s frigate Warramunga arrived in Palawan for a port call ahead of the joint exercise, with Commander Jennifer Graham paying a courtesy call on the Philippine military commander in the area, a Philippine source said.

The Warramunga, an Australian aircraft, a Japanese destroyer, and several naval assets from the United States and the Philippines are taking part in the drill, another source said. The exercise will be conducted outside Philippine territorial waters but within its exclusive economic zone.

The Philippines has expressed its intention to hold a joint exercise with the three countries several times a year, the source added.

Philippines boosts maritime security as tension with China boils over

Philippine President Ferdinand Marcos Jnr said on March 28 that he has been in constant communication with his country’s allies and that his government is preparing a “response and countermeasure package that is proportionate, deliberate, and reasonable” to the dangerous attacks by the China Coast Guard and its militia vessels in the South China Sea.

Marcos is set to meet with US President Joe Biden and Japanese Prime Minister Fumio Kishida in Washington on April 11. Marcos has said that he and the leaders are expected to forge an agreement that will add more structure to the three countries’ interoperability and joint cruises.

China claims sovereignty over almost the entire South China Sea, even though the Permanent Court of Arbitration in The Hague invalidated its sweeping claims in a 2016 ruling. The Philippines, Brunei, Malaysia, Vietnam and Taiwan also claim parts of the resource-rich international waterway.

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[World] China will soon have 300m pensioners. Can it afford them?

https://www.bbc.co.uk/news/world-asia-china-68595450

Biden and Xi seek to manage tensions in phone call as US officials head to China

https://www.theguardian.com/us-news/2024/apr/02/biden-xi-phone-call-us-officials-china-relations

Joe Biden and Xi Jinping have clashed in a telephone call about Taiwan and US trade restrictions on technology, but sought to manage their tensions, as two top US officials prepare to visit Beijing.

The nearly two-hour telephone conversation on Tuesday was the two leaders’ first direct interaction since a summit in November in California that saw a marked thaw in tone, if not the long-term rivalry, between the world’s two largest economies.

The treasury secretary, Janet Yellen, will leave Wednesday and visit both Guangzhou, the southern city emblematic of China’s manufacturing power, and Beijing, with Secretary of State, Antony Blinken, due in China in the coming weeks, officials said.

“We believe that there is no substitute for regular communication at the leader level to effectively manage this complex and often tense bilateral relationship,” national security council spokesman John Kirby told reporters after the call.

US officials said the talks were not aimed at managing but rather than resolving differences, and the two leaders were open about heated disagreements.

Xi accused the United States of creating economic risks through Biden’s sweeping ban on high-tech exports to China.

“If the United States insists on suppressing China’s high-tech development and depriving China of its legitimate right to development, we will not sit idly by,” Xi warned, according to Chinese state media.

Biden rebuffed his appeal, with the White House saying he told him “the United States will continue to take necessary actions to prevent advanced US technologies from being used to undermine our national security, without unduly limiting trade and investment.”

Biden also refused to back down on TikTok, the blockbuster Chinese-owned app that Congress is threatening to ban unless it changes hands, with Kirby saying Biden insisted he wanted to protect Americans’ data security.

Xi, China’s most powerful leader in decades, has solidified power at home and taken a tough approach in Asia, with a crackdown on freedoms in Hong Kong and assertive confrontations in recent weeks with the Philippines on the South China Sea.

But US observers see Xi as eager to temper the friction with the United States as China weathers rough economic headwinds.

At the California summit, he agreed to two key asks by the United States – curbs on precursor chemicals for making fentanyl, the synthetic painkiller behind a US overdose epidemic, and restoring dialogue between the two militaries to manage crises.

Xi may also believe there is more opportunity to work with Biden, who faces a rematch in November’s presidential election with Donald Trump, who has cast China as an arch-enemy.

Biden has preserved or even accelerated some of Trump’s tough measures, but has also identified areas of common interest, such as fighting climate change.

The White House said Biden pressed Xi to ensure “peace and stability” across the Taiwan Strait ahead of the inauguration on 20 May of President-elect Lai Ching-te.

China has denounced Lai, a longtime supporter of a separate identity for the self-ruling democracy claimed by Beijing, but US officials have been cautiously optimistic that China’s military moves ahead of the inauguration will not go beyond past practice.

In the phone call, Xi told Biden that Taiwan remains an “uncrossable red line” for China, according to state media.

The United States has voiced growing alarm over rising Chinese moves against the Philippines in the dispute-rife South China Sea.

The Biden administration, while maintaining dialogue with China, has put a strong focus on supporting allies.

In the midst of the diplomatic flurry with China, the Japanese prime minister, Fumio Kishida, will pay a state visit to Washington next week, with the Philippine president, Ferdinand Marcos, joining for three-way talks.

Blinken and Yellen will both be paying their second visits to China in less than a year, marking a return to more routine interaction following the Covid pandemic and soaring tensions under Trump.

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China’s property market is at risk of an overcorrection, not oversupply

https://www.scmp.com/opinion/china-opinion/article/3257492/chinas-property-market-risk-overcorrection-not-oversupply?utm_source=rss_feed

A Chinese former official made headlines last September by saying that China had so many vacant homes that even its 1.4 billion population cannot hope to fill them all. Estimates suggested there were enough vacant properties to house as many as 3 billion people.

If true, China’s housing market is doomed. But, to paraphrase Mark Twain, reports of the market’s demise are an exaggeration.

According to the national statistics bureau, China has built 14.4 billion square metres (155 billion square feet) of saleable homes – excluding self-built homes such as in rural areas – over the past 30 years. In 2020, the per capita urban living space was 38.6 square metres, meaning that in three decades, China had built enough housing for 370 million people, just 40 per cent of its urban population of 920 million. How many empty homes can there be?

There are two signs of significant oversupply in residential markets, according to economist Gao Shanwen, who based his work on data from economies including Japan and the United States.

The first is a prolonged contraction in transactions for resale homes. But in China last year, according to Beike Research Institute, resale home transactions surged, rising by 44 per cent in terms of floor space sold and by 30 per cent in transaction value.

The second is when investments in residential property development represent more than 7 per cent of a country’s gross domestic product. In China, this ratio hit about 12 per cent in 2013 but has fallen since, and is expected to be around 5.5 per cent this year.

Therefore, Gao concludes, while there is a significant overcorrection in China’s residential property development sector, there is no oversupply in the housing market. The market correction has been so severe it has tipped over into an overcorrection.

China’s housing crisis isn’t over.

Even though overall home sales rose last year, by 6.3 per cent in floor space and 5.8 per cent in value, sales of new homes slumped by 8.2 per cent in floor space and 6 per cent in value. This is because developers are prohibited from selling new homes below certain prices, presumably to protect property values. Consequently, developers may not be able to offer new homes at market-clearing prices.

As of the end of last year, China’s home price index has slid 9 per cent from its 2021 peak, creating a “negative wealth” effect that is dampening consumption and slowing down the economy’s transition from being investment-led to consumption-driven.

Beijing, Shanghai among casualties as China’s pre-owned home prices slip again

Meanwhile, many Chinese property developers are mired in financial difficulty or insolvency. Bankruptcies of property companies almost quintupled from 123 in 2022 to 590 last year. Defaults or the restructurings of offshore bonds issued by Chinese developers are more the rule than the exception.

Will China’s housing sector woes lead to a financial crisis like in the US and Europe in 2008? The answer is no, for two reasons.

First, the average loan-to-value ratio of home mortgages in China’s major cities is about 50 per cent, which means that housing prices will have to fall by more than half to put mortgages at risk. That is not even remotely likely, and the ratio of non-performing housing loans among Chinese banks remains below 1 per cent, according to ratings agency S&P.

Second, home loans are unlimited personal liabilities in China, so homeowners cannot simply walk away from them as one can in the US. So defaults are rare.

Third, banks’ exposure to developers represents less than 5 per cent of their loan book, all of which is collateralised. Chinese banks are well-capitalised, with an average capital adequacy ratio of more than 15 per cent, and an average non-performing loan ratio of about 1.6 per cent.

Yes, non-performing loans have been rising in recent years. But banks are selling or writing them off quickly because the regulatory requirement for reserves to cover non-performing loans is more than 100 per cent, making such debt not worth holding on to.

Indeed, China’s banking system faces a unique problem of having too much cash. Household deposits increased by 18 trillion yuan (US$2.5 trillion) in 2022 and a further 17 trillion yuan last year as consumers continue to hold back.

But the housing crisis continues to retard China’s economic recovery. The property sector’s contribution to gross domestic growth was a negative 4 per cent in 2022. The good news is that this recovered to a negative 1.3 per cent last year and is expected to further improve to a negative 0.9 per cent this year, according to UBS.

The prevailing view of China’s property market is that the housing crisis was inevitable, driven by the bursting of a property bubble and the immutable laws of supply and demand. In fact, it was largely policy-induced, as the government took measures to cool down the overheated sector by limiting purchases and controlling prices, mortgages and credit to developers.

The tightening in recent years has become so draconian as to choke the air out of the property market. Many of these cooling policies continue to suppress demand. For example, Chinese can buy properties around the world but not in some major Chinese cities unless they are residents buying their primary home. Where else do policymakers handle a housing crisis by limiting home purchases?

Why China needs urgent reform to revive middle-class prosperity

The latent demand for housing is substantial. Chinese have always considered residential properties the most preferred asset class to invest in. Whereas in the US, residential properties represent only about 25 per cent of household wealth, this ratio is about 59 per cent in China.

China is on track to increase its urbanisation rate from around 65 per cent now to 73 per cent by 2035, which will add more than 100 million people to the urban population – all of whom require housing.

To avoid prolonged pain, it is advisable to remove all remaining restrictions on housing prices and demand, allowing the market to adjust itself and find its footing. Hong Kong set a good example by doing so in February, which immediately sparked a surge in property transactions. It is only by stabilising the property market that public confidence can be restored, private consumption can resume and economic growth can reaccelerate.

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Call between Xi Jinping and Joe Biden conveys stability, deep disconnect in US-China ties: analysts

https://www.scmp.com/news/china/article/3257632/call-between-xi-jinping-and-joe-biden-conveys-stability-deep-disconnect-us-china-ties-analysts?utm_source=rss_feed

The first phone call in nearly two years between Xi Jinping and Joe Biden conveyed stability overall in a bilateral relationship previously marked by contention on all fronts, while also signalling a deepening disconnect on tech restrictions and economic disputes, analysts said.

“What’s important is that the top level of communication is very frequent, is regular,” said Rhodium Group’s Daniel Rosen of the conversation between the leaders on Tuesday.

“Summits are important, but there’s no replacement for regular top-level communication, especially given the nature of the Chinese system where the person at the top is the one who matters most,” Rosen added.

With both sides using “candid” and “constructive” as key descriptors for the talk – and expressing a willingness to build on a foundation laid down when the two leaders met face-to-face in November – they allowed space to air grievances diplomatically but in no uncertain terms.

During the call, Xi accused the US of launching “an endless stream of measures to suppress China’s economy, trade, science and technology” as more mainland companies have been added to American sanction lists, according to Xinhua.

“This is not de-risking, but creation of risks,” it reported Xi as saying.

“If the US insists on suppressing China’s hi-tech development and depriving China of its legitimate right to develop, we will not sit idly by,” he added.

Biden, meanwhile, said the US would continue to take necessary actions to prevent advanced American technologies from being used to undermine US national security, without unduly limiting trade and investment, according to a White House statement.

US National Security spokesman John Kirby at a press briefing after the call said Biden “feels obligated and responsible for protecting the national security interests of the United States”.

China-US relations: state media backs Xi Jinping in call for ‘brighter future’

“Much of his conversation with President Xi this morning – which was candid and constructive, very professional, businesslike – was arranged around those priorities that President Biden holds so seriously,” Kirby added.

While the US and China not seeing eye to eye on de-risking and technology restrictions “is nothing new”, it has become “a new normal”, said Rosen, adding: “We’re gonna be hearing this for a long time.”

Tuesday’s call clearly highlighted that tech competition was China’s primary concern in bilateral relations moving forward, according to Dominic Chiu of Eurasia Group.

“Xi’s statement that China will ‘not stand idly by’ is a sign that Beijing will prepare retaliatory options if the issue is left unaddressed. This is what Xi meant by creating risks from de-risking,” Chiu said.

A further message from the Chinese read-out was that the Biden administration’s vow to continue communicating its next steps on tech restrictions targeting China would not satisfy Beijing’s demand for fair treatment, he added.

Yun Sun of the Stimson Centre said the call represented a continuation of the tone and directions set forth in San Francisco last November.

The two presidents met in person during the Apec leaders’ meeting in California, where they reached modest agreements on continuing cooperation in anti-drug measures, artificial intelligence and military-to-military communication.

“Even though very few things are new, it is more important that the leaders talked to each other,” Sun said. “It sends a message of stability to the rest of the world and also signifies the pursuit of stability by both sides.”

While not mentioned in the official read-outs, the controversy around popular Chinese-owned short-video app TikTok, which faces a possible ban in the US, also came up during the call.

Last month American lawmakers introduced a bipartisan bill giving Chinese tech firm ByteDance 165 days to divest TikTok or else the app would no longer be available on app stores or accessible on US-based web hosting services.

Fewer than 3 in 10 Americans support China TikTok bill: poll

Eight days later, the House of Representatives overwhelmingly passed the bill, which now heads to the Senate.

Biden “reiterated our concerns” about TikTok’s ownership, Kirby said in his briefing.

“He made it clear to President Xi that this was not about a ban of the application, but rather our interest in divestiture so that the national security interest and the data security of the American people can be protected.”

Asked whether there had been any “progress” in reaching a deal, Kirby said only that “the legislation hasn’t reached [Biden’s] desk, and it’s still on Capitol Hill”.

Andrew Bishop of Signum Global Advisors believed the Xi-Biden call was “not likely a harbinger of stability”, given the “hawkish” tone in parts of the Xinhua read-out.

US Treasury Secretary Janet Yellen to press China on green energy spending

“Senior US-Chinese officials’ prior interactions over the past couple years have not been correlated with stability,” Bishop said.

Despite the disagreement, engagement among senior officials from both sides was continuing. US Treasury Secretary Janet Yellen is scheduled to begin a week-long trip to China on Wednesday.

Yellen will visit Guangzhou and Beijing, meeting with Chinese officials including Premier Li Qiang and Vice-Premier He Lifeng, representatives of the American business community as well as Chinese economists, according to a Treasury Department press release.

She will press her Chinese counterparts on “unfair trade practices” and underscore the global economic consequences of Chinese industrial overcapacity, while working to expand bilateral cooperation on countering illicit finance, it added.

US Secretary of State Antony Blinken is also scheduling a visit to China in the coming weeks, and the two sides were expecting a call between their top military officials “soon”, according to the White House.

Review board faults Microsoft for ‘cascade’ of errors in China hack

https://www.washingtonpost.com/national-security/2024/04/02/microsoft-cyber-china-hack-report/2024-03-30T21:27:50.360Z

A review board, mandated by President Biden, is expected to issue a scathing report detailing lapses by the tech giant Microsoft that led to a targeted Chinese hack last year of top U.S. government officials’ emails, including those of Commerce Secretary Gina Raimondo.

The Cyber Safety Review Board’s report, a copy of which was obtained by The Washington Post, takes aim at shoddy cybersecurity practices, lax corporate culture and a deliberate lack of transparency over what Microsoft knew about the origins of the breach. It is a blistering indictment of a tech titan whose cloud infrastructure is widely used by consumers and governments around the world.

The intrusion, which ransacked the Microsoft Exchange Online mailboxes of 22 organizations and more than 500 individuals around the world, was “preventable” and “should never have occurred,” the report concludes.

Perhaps most concerning, the board report makes clear, Microsoft still does not know how the Chinese carried out the attack.

In a statement to The Post, Microsoft said it appreciated the board’s work.

“Recent events have demonstrated a need to adopt a new culture of engineering security in our own networks,” a spokesperson for the firm said, noting that Microsoft had created a new initiative to do so. “While no organization is immune to cyberattack from well-resourced adversaries, we have mobilized our engineering teams to identify and mitigate legacy infrastructure, improve processes, and enforce security benchmarks. Our security engineers continue to harden all our systems against attack and implement even more robust sensors and logs to help us detect and repel the cyber-armies of our adversaries. We will also review the final report for additional recommendations.”

The report is the third and most significant review by the independent two-year-old board, which investigates such incidents so that government officials and the broader security community can better protect the nation’s digital networks and infrastructure. The board, made up of government and industry experts, is chaired by Robert Silvers, the Homeland Security Department’s undersecretary for policy.

U.S. intelligence agencies say the breach, discovered last June, was carried out on behalf of Beijing’s top spy service, the Ministry of State Security (MSS). The service runs a vast hacking operation that includes the group that carried out the intrusion campaign dubbed Operation Aurora, which was first publicly disclosed in 2010 by Google.

The 2023 Microsoft intrusions exploited security gaps in the company’s cloud, allowing MSS hackers to forge credentials that enabled them to siphon emails from Cabinet officials such as Raimondo, as well as Nicholas Burns, the U.S. ambassador to China, and other top State Department officials.

“Throughout this review, the board identified a series of Microsoft operational and strategic decisions that collectively points to a corporate culture that deprioritized both enterprise security investments and rigorous risk management,” it said.

In other words, the report says, the firm’s “security culture was inadequate and requires an overhaul.”

The U.S. government relies on Microsoft as one of its largest providers of software and cloud services — contracts worth billions of dollars a year.

One of the sharpest rebukes is reserved for the company’s public messaging around the case. Microsoft, the board found, for months did not correct inaccurate or misleading statements suggesting the breach was due to a “crash dump,” or leftover data contained in the wake of a system crash. In fact, the report notes, Microsoft remains unsure if this event led to the breach.

Microsoft amended its public security statements only on March 12 after repeated questioning by the board about plans to issue a correction and when it was clear the board was concluding its review.

The board faults “Microsoft’s decision not to correct in a timely manner its inaccurate public statements about this incident, including a corporate statement that Microsoft believed it had determined the likely root cause of the intrusion when in fact, it still has not,” according to the report.

Microsoft’s initial statement about the intrusion was made in July, noting that a China-based adversary had somehow obtained a “signing” key — or digital certificate — allowing the hackers to forge users’ credentials and steal Outlook emails.

In a Sept. 6 statement update, Microsoft suggested that the hackers obtained the key through its inadvertent inclusion in the crash dump, which was not detected by the firm’s security systems.

However, in November, Microsoft acknowledged to the board that the September blog post “was inaccurate,” the report stated.

“Left with the mistaken impression that Microsoft has conclusively identified the root cause of this incident, Microsoft’s customers did not have essential facts needed to make their own risk assessments about the security of Microsoft cloud environments in the wake of this intrusion,” the report said.

Microsoft updated the post a few weeks ago. In the update, the Microsoft Security Response Center admits that “we have not found a crash dump containing the impacted key material.”

After years of touting the strength of its cybersecurity, Microsoft — the world’s most valuable company — has in recent years been beset by embarrassing breaches. In early 2021, Chinese government-sponsored hackers compromised Microsoft Exchange email servers, putting at risk at least 30,000 public and private entities in the United States alone and at least 200,000 worldwide.

In January of this year, Microsoft detected an attack on its corporate email systems by the Russian foreign spy service, the SVR. The company said the spies broke into a testing unit, moving from there into emails of senior executives and security personnel. Microsoft alerted its customer Hewlett-Packard Enterprise that it had been hacked as part of that campaign, and U.S. officials told The Post last month there were dozens of other victims, including Microsoft resellers.

Taken together, “these are indications things are quite broken,” said one person familiar with the board’s findings, who like others spoke on the condition of anonymity because the report was not yet public.

The State Department detected the breach last June and informed Microsoft, according to U.S. officials. The report notes that the agency was able to detect the intrusion in part because it had paid for a higher tier of service that included audit logs, which helped it determine that the hackers had downloaded some 60,000 emails. The company is now providing U.S. agencies that service for free after negotiations with federal officials.

The report details what it calls a “cascade of avoidable errors.” For instance, Microsoft had not noticed the presence of an old signing key from 2016 that should have been disabled but wasn’t. “That one just sat for years, kind of forgotten,” said a second person. Part of the problem was that Microsoft was supposed to switch from a manual key rotation to an automated system that minimized the chance of human error. But for whatever reason, that switch never happened. “They never prioritized fixing the problem,” said the first person.

Another error was that the key worked on both business and consumer networks, in violation of standard protocol. “There were multiple points where just basic things would have made a difference,” said the second person.

A third error noted in the report was that Microsoft security teams did not realize that an engineer whose firm had been acquired in 2020 was working on a compromised laptop that in 2021 was allowed to access the corporate network. According to people familiar with the board’s findings, there’s no evidence that the engineer’s machine was the cause of the breach, though Microsoft suggested in its March update that a “compromised engineering account” is the “leading hypothesis” for how the breach occurred.

The root cause may never be known, the report indicates, but Microsoft failed to do an adequate assessment of the acquired firm’s network security before allowing the engineer to plug in his laptop — a basic failure to follow standard cybersecurity practice.

Microsoft cooperated with the board’s investigation, the report notes.

The report caps years of growing frustration with Microsoft among lawmakers, government officials and industry experts. In 2020, Russian government hackers penetrated the network software company SolarWinds to target emails of U.S. government agency employees. One way they stole emails was by exploiting weaknesses in a Microsoft program that some companies use on their own email servers to authenticate employees. The SolarWinds breach affected at least nine federal agencies and 100 private-sector companies.

The following year, Microsoft President Brad Smith told Senate lawmakers that customers who want “the best security should move to the cloud” — the same cloud, or remote servers, that fell victim to the Chinese hack last year. Following that intrusion, Sen. Ron Wyden (D-Ore.) wrote to several government agencies asking that they hold Microsoft accountable for its pattern of lapses.

The 2023 breach could have been far broader. With the stolen key, the hackers “could have minted authentication tokens [credentials] for pretty much any online Microsoft account,” said a third person familiar with the matter. But they apparently opted to target particular people of interest, such as the commerce secretary, a congressman and State Department officials who handle China issues, the person said.

The report emphasizes that big cloud providers, such as Microsoft, Amazon and Google, are enormous targets and must do better for everyone’s sake. “The entire industry must come together to dramatically improve the identity and access infrastructure. … Global security relies upon it.”

It also makes recommendations, that for instance, address practices such as handling signing keys and managing credentials.

One recommendation borrows from the company’s founder, Bill Gates, who in 2002 wrote an email to his staff emphasizing that security was a priority. “In the past,” Gates noted in his missive, “we’ve made our software and services more compelling for users by adding new features and functionality.” None of that matters unless customers can trust the software, he said. “So now, when we face a choice between adding features and resolving security issues, we need to choose security,” he wrote.

The panel recommended that Microsoft should heed Gates’s strategy and consider holding off on new features until it has fixed its security issues.

The panel’s independent nature means no government body — not the White House or the Department of Homeland Security, which houses the panel — can dictate the report’s findings or recommendations.

“It took the creation of something like this board to produce a credible and unbiased assessment of Microsoft’s behavior, which is a necessary step to accountability,” said Jason Kikta, former head of private sector partnerships at U.S. Cyber Command and now chief information security officer at the IT software firm Automox.

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