• China’s businesses in Mexico
• The new border fearmongering: China is ‘building an army’ in the U.S.
• As Chinese businesses launch operations in Mexico, managers learn cross-cultural lessons
• China’s cyberspace regulator vows to work with Africa on AI governance
• Beloved panda Fu Bao starts quarantine in China after arriving from South Korea
• Janet Yellen in China: US treasury secretary aiming to keep trade relations on firmer footing
• China divorce court orders man who called disabled wife ‘trash’ to pay US$4,200 compensation as insult is ‘domestic violence’
• Young Taiwanese urged to ‘remember the roots of the Chinese nation’ by island’s former leader Ma Ying-jeou
• Yu Hua on why young Chinese no longer want to work for private firms | By Invitation
• Ex-Marine in Australia facing extradition to US says he wasn’t American citizen during China pilot training
• Professional China tomb-sweepers spruce up sites, perform rituals, live-stream rites for absent clients
• Home-grown hydrogen energy start-up Epago aims to tap Hong Kong’s innovation ecosystem to expand to China and overseas
• China military on ‘high alert’ at Myanmar border after live-fire drill ends
• Donald Trump won’t rock US-Japan alliance, to keep firm focus on China if he returns to power: ex-aide
• A second KMT leader from Taiwan plans a visit to mainland China next week
• China’s economy must ‘return to basics’ amid tech reform push, outspoken economist Wu Jinglian says
• Treasury secretary heads to China to talk trade, anti-money laundering and Chinese ‘overproduction’
• Janet Yellen in China: what’s on the table as Washington’s ‘effective emissary’ begins her trip?
• Why Nongfu Spring’s online attackers are no Chinese patriots
• Shock as freak winds in China kill 3, including a child, by sucking them out of broken high-rise windows as they slept
• Indonesia’s Prabowo scores ‘major diplomatic coup’ with China, Japan visits in signal of future policy direction
• China’s Communist Party finance organ draws institutional road map for sector

China’s businesses in Mexico

https://www.scmp.com/news/china/series/3257891/chinas-businesses-mexico?utm_source=rss_feed

The new border fearmongering: China is ‘building an army’ in the U.S.

https://www.washingtonpost.com/politics/2024/04/04/trump-china-army-border/2024-04-04T16:19:33.124Z

We are by now largely inured to Donald Trump’s more extreme observations about the world, having spent nearly nine years immersed in them. This is particularly true when he’s discussing the U.S.-Mexico border, the subject of his first exaggerations and fearmongering back when he announced his 2016 candidacy and an acute point of commentary as the 2024 contest approaches.

It is with that baseline, then, that we must point out that Trump’s comments about the border Thursday are unusually alarmist (if not unusually exaggerated) — even by his standards.

Trump was speaking with conservative radio host Hugh Hewitt. Hewitt brought up a segment that had aired on Laura Ingraham’s Fox News program Wednesday evening, centered on immigrants from China.

Ingraham and former secretary of state Mike Pompeo, Hewitt said, “went over the numbers, and it’s really startling. In the last year that you were president, 342 Chinese nationals crossed our southern border. Last year, 24,000 did, and this year thus far, 22,200 — 46,000 Chinese nationals in 18 months. What do you think they’re up to?”

Trump riffed about border security and immigrants from Congo for a while before Hewitt refocused him. What did the former president think the “Chinese nationals” were doing?

“They’re probably building an army,” Trump replied. “They’re probably building an army from within. I mean, you look at what’s happening, because they’re very healthy young men for the most part. And it’s up to over 30,000 now. That’s a lot of people. It’s up to over 30,000.”

It is true that the number of immigrants from China that have arrived at the southern border is up since Trump’s last year in office — a year in which immigration was exceptionally low thanks to the coronavirus pandemic. But there is no reason to think that they are coming to the United States to “build an army.”

Before we explore that point, though, let’s go back to the Ingraham-Pompeo conversation itself, one that Trump probably saw, given his loyalty to Fox News.

Ingraham began by showing a clip of National Security Council spokesman John Kirby speaking to reporters this week about a conversation between President Biden and Chinese President Xi Jinping.

“The two leaders held a candid and constructive discussion on a range of bilateral, regional and global issues, including … continuing efforts on climate change and people-to-people exchanges,” Kirby was shown saying.

“Climate change!” Ingraham remarked, then introducing Pompeo.

“You know,” Pompeo began, “it’s very interesting — if you read the Chinese readout, what they say took place? Very different than what Admiral Kirby described.”

Particularly in the video snippet Ingraham aired. It clipped out most of what Kirby said about the call, that the two presidents discussed “areas of cooperation and areas of differences. They encouraged continued progress on issues discussed at the Woodside Summit, including counternarcotics cooperation, ongoing military-to-military communications, talks to address artificial-intelligence-related risks” — and climate change.

Pompeo quickly transitioned into this question about immigrants from China.

“It doesn’t sound like [Biden] made a single statement about them coming across our southern border,” he said to Ingraham. “There’s no chance that this is accidental, that these folks are actually seeking asylum. The Chinese Communist Party has enormous control over who gets to leave their country. And so, there’s something afoot here when we now having more come across the border in the last two years than the previous decade combined.”

He went on for a bit, with Ingraham marveling at his observations. Then he offered that we did know some things about those arriving.

“We know for sure that we don’t have any idea who they are,” Pompeo said. “Not only are they mostly got-aways, but even the vetting that we’re doing with them is just a handful of simple questions and then we release them.”

This is perhaps the most important point: The numbers being cited are numbers of immigrants being stopped at the border. These are not “got-aways,” people who enter the United States without being detained. Pompeo knows this, since he immediately follows up that claim by saying that we ask them questions. (Try asking a question of someone who is not in your presence and see how successful that is.) It means, too, that we do know who they are. Because most are, in fact, single adults, they are also less likely to be released from custody.

None of this is a mystery, despite the collective presentation of Ingraham, Pompeo, Hewitt and Trump. In March, Meredith Oyen, an associate professor of history and Asian studies at the University of Maryland at Baltimore County, wrote an essay for the Conversation exploring the increase in southern-border arrivals.

“The dramatic uptick is the result of a confluence of factors,” Oyen wrote, “that range from a slowing Chinese economy and tightening political control by President Xi Jinping to the easy access to online information on Chinese social media about how to make the trip.”

Those arriving are largely members of China’s middle class, she noted, “not rich enough to use education or work opportunities as a means of entry, but they can afford to fly across the world.”

A large percentage of those arriving in the United States over the southern border do so to claim asylum. For immigrants from China, Oyen notes, those claims are more likely to be successful, given the oppression and religious intolerance in their home country.

In other words, there’s every indication that the increase in immigrants from China is a function of their seeking to live in the United States and enjoy its freedoms and economy — not that they are here to “build an army.” (The logistics of arming and aggregating a fighting force of thousands of people within a foreign country would seem to make that idea incorrect from the outset, but again, this is Trump theorizing.)

The point is obvious, just as it is obvious when Trump and others describe immigrants as “military-aged males”: People coming to the United States seeking work or safety are inherent threats to public safety or elections or, apparently, national security. It isn’t that anyone could realistically assume that 3,500 people from China coming into the United States in February — 680 of whom were members of families with kids, mind you — were preparing for a fourth-column assault on the country. It’s that it is politically beneficial for Trump and his allies (including Pompeo, Ingraham and Hewitt) to pretend that Biden’s border policies are indisputably dangerous to American voters.

It’s just caravans all over again.

As Chinese businesses launch operations in Mexico, managers learn cross-cultural lessons

https://www.scmp.com/news/china/article/3257822/chinese-businesses-launch-operations-mexico-managers-learn-cross-cultural-lessons?utm_source=rss_feed

Mexico, often perceived in China as a remote and dangerous place, has also become a gold rush destination for Chinese companies looking to serve both the local market and possibly the US. As they learn to adapt to a new environment, Washington policymakers are wary. The once and possibly future US president, Donald Trump, is threatening to slap tariffs on products coming from Mexico, including electric vehicles, to block China. In the first of a three-part series, the South China Morning Post looks at how Chinese manufacturers in Mexico are approaching concerns about profitability, trade policy and safety – as well as vast differences in work cultures.

In a weeds-strewn field on a 300-hectare undeveloped industrial land in western Mexico, tequila, local folk songs and braised pork welcomed a delegation of travellers from Shenzhen, China in February.

Dispatched by BYD, the world’s biggest electric vehicle manufacturer, the visitors were on a tour around the Latin American country looking for potential sites to build a car factory that could hire 6,000 local workers.

The land is what Centro Logistico Jalisco, the biggest industrial park in the state of Jalisco, offered BYD. And it was already equipped with a power substation, water pipes, and railway lines, all of which are essential facilities sought by industrial manufacturers.

“I think it was a nice way of imagining and dreaming about the project being on the land,” said Gabriela Martin, the park’s general manager.

For two distant countries, the attraction goes both ways. Mexico has become a hot destination for Chinese manufacturers heading overseas, and local officials in Mexico are also flocking to China, hoping to woo more investment from companies there, offering huge incentives - from tax breaks to free land.

Still, for many Chinese firms that do venture out, or wish to, concerns linger over profitability, policy uncertainties and safety – as well as vast differences in the work cultures.

“It was very tough to convince or to try to explain to Chinese companies from mainland China why they should come to Mexico and what the benefit was. But this has changed dramatically,” said Cesar Fragoso, executive vice president at the China Chamber of Commerce and Technology Mexico.

The shift came when former US president Donald Trump initiated the trade war with China in 2018. The restructuring of US-China trade has benefited Mexico, a key destination for US “nearshoring” – where products that meet certain rules of origin can enter the American market with zero tariffs.

After Covid, the trend further “exploded”, Fragoso added: “Two years ago, [Chinese investors] basically understood that the situation of trade between China and the US was not going to be better, it was only going to get worse.”

Initially, Chinese companies expanding into Mexico focused primarily on the US market, particularly those that set up plants in the northern states near the border.

But as the industrial chain in Mexico gradually extended and local acceptance of Chinese-branded products increased, many companies began to develop their Mexican consumer markets.

The shift was especially noticeable in sectors like renewable energy and electric vehicles, which are not only seen as future economic growth engines by the Mexican government but are also dominated by Chinese companies in the global supply chain.

Investors venturing into Jalisco – whose capital Guadalajara is nearly 1,290km (800 miles) from the US border and much closer to the large container port of Manzanillo – typically don’t view the state as a “back door” to the American market, according to Roberto Arechederra, Jalisco’s secretary of economic development.

Instead, they see the state as the “front door” to Mexico and South America.

“What BYD told us is their plant would serve the local market, not export to the US,” Arechederra said.

BYD did not immediately respond to requests for comment.

Last year, investment from Chinese companies in Jalisco was still just US$17.7 million, compared with US$777.2 million from the US, which remains the state’s leading foreign investor, Arechederra said.

However, he added: “We believe that in the coming years, this figure [for Chinese investment] will increase at least tenfold.”

With ‘made-by-China’ under US pressure, Mexico’s trade probes spark concerns

Recent figures show this trend. In 2023, China was not even among the top 10 investors in Mexico. But from January 1 to March 15 of this year, the country moved up to the fourth biggest source of foreign direct investment, according to data from the Mexican Federal Ministry of Economy.

Despite the rising number of Chinese companies establishing plants in Mexico, the value of individual investments is still relatively low compared with those from other countries. It remains unusual for major international brands from China to build manufacturing facilities there; existing companies are typically suppliers for other multinationals.

“For most of the multinational companies coming and making big investments in Mexico, like Tesla, BMW, you name it, they don’t come for the local market, they come for the North American market,” Fragoso noted.

“The market in Mexico is too small. If you are coming just to sell your products in the domestic market, it doesn’t make sense to have a facility in Mexico,” he added.

Still, Victor Gonzalez, a senior adviser for China-Latin America legal affairs at Beijing-based law firm PC Woo & Zhonglun Wende and Jalisco’s special adviser for China, said many Chinese companies know that even if it is just to tap the local market, it is still worth investing in Mexico.

In 2023, Chinese cars accounted for 19.5 per cent of all car sales in Mexico, compared with only 6.4 per cent in 2019, data from Mexican Association of Automobile Distributors showed. The country was also the second-largest Chinese car importer last year, after Russia.

And Mexico “would be No 1 by far, if it wasn’t for Russia because of the conflict with Ukraine”, Gonzalez said. Amid western sanctions on Moscow and an exodus of other foreign automakers, sales of Chinese cars have soared in Russia in the wake of the Ukraine war.

Chinese companies, Gonzalez said, “can tap the local market first and understand that we can be profitable locally”.

“Then they can go ahead to see if their products can reach North America through their Mexico plants, as all other foreign companies do,” he added.

Nevertheless, the biggest issue concerning all Chinese companies - whether they have invested in Mexico or are considering it - is profitability. Operating in Mexico carries considerably higher costs and business risks than in China or Southeast Asian countries, according to several factory managers.

“Mexico is a place that combines opportunities and dilemmas,” said Chen Yi, an administration director at Hengli Mexico, a branch of a hydraulic components manufacturer based in Jiangsu, China that supplies engine equipment makers such as Caterpillar.

Language barriers and cultural incompatibility are the biggest challenges, Chen said, noting that there are significant differences in the two nations’ attitudes towards work.

For instance, she added, Chinese work culture tends to emphasise efficiency, while Mexicans often strive for a more balanced integration of personal and professional life.

China’s 17-year run as top source of US imports ends as Mexico rises

“If a company wants to transplant their Chinese way of management here, it would be 100 per cent irreplicable,” she said. “Many Chinese companies have learned hard lessons.”

The main cause of the challenges is Chinese firms’ relatively recent entry into the market. Their unfamiliarity makes them more inclined to use a Chinese management team, according to industrial insiders. But now many are actively adapting and localizing.

Haitian, an injection-moulding machine maker from China’s Ningbo city, hopes to resolve the cultural differences by blending its management teams with Chinese and Mexican staff.

Since 2021, the company has operated one of its largest factories outside China in Centro Logistico Jalisco - the first Chinese-financed plant in the industrial park.

Language was the first hurdle. The Chinese managers, who did not understand Spanish, found communicating with the locals difficult. In addition, many of the company’s operational systems were written in Chinese, which hindered training of the first teams of Mexican workers.

It also became necessary to educate the managers about Mexican labour law. Hector Renova, an administrative manager at Haitian’s Mexican branch, studied the work methods and procedures at the Ningbo headquarters and realised that many of them could not be replicated in Jalisco.

Renova explained: “I know that the laws are different in China, that an employee there can be paid for the things he produces, for example. But that doesn’t exist in Mexico. Payment is based on the number of days worked – and I can’t cut anyone’s salary.”

Given the differences, Haitian decided that every Chinese manager should have a Mexican counterpart. The company also invested in fostering unity among employees of both nationalities.

Chinese employees taught the company’s Mexican cooks how to prepare dishes from various Chinese provinces. Despite the language barrier, they learned the recipes and now offer typical Chinese menus every day. A table tennis table has also been installed in the cafeteria and the staff often organise amateur championships during lunch breaks.

“The Chinese didn’t like it when the Mexicans started winning some games,” Renova joked.

Shunned by US, China investors eye Mexico to grab North American market

He also said the factory had partnered with universities in Jalisco to hire recent graduates. This lets Haitian train new employees according to its culture while fostering a closer relationship with the local academic community.

Apart from the cultural hurdles, labour costs in Mexico are double those of many Southeast Asian countries, several Chinese factory managers said.

In the fourth quarter of 2023, the average monthly income of a Vietnamese worker was around US$290, according to Vietnam’s General Statistics Office. In January 2024, the average hourly wage in Mexico’s manufacturing sector was US$4.10 - or more than US$600 a month, data from Mexico’s National Institute of Statistics and Geography showed.

Logistical safety and efficiency are also one of the major concerns: robberies of truck drivers are rampant.

“The key is expectation management. Just don’t always compare with everything in China,” a manager of a Chinese factory which was launched last year in Monterrey, the industrial centre of northern Mexico, said on condition of anonymity.

“We will definitely lose money in the beginning. It is just about how much time you spend to improve your cost efficiency in all aspects.”

In the same way big multinationals have brought over their smaller Chinese suppliers, the Chinese companies which set foot earlier in Mexico are also bringing over their business partners from back home - including logistics firms.

“Before last year, there were maybe only four or five Chinese logistics companies with business here,” said Chen Kang, local manager at Topasia International Logistics, a Zhejiang company which expanded to Mexico in 2022. “In the past 12 months, there seemed to be about five to 10 firms coming all at once.”

Within two years, his company has helped sharply reduce the waiting time for import customs clearance at ports and subsequent transportation to Monterrey from 30 days, sometimes to as few as seven, Chen said.

“We have brought over the Chinese working mode. Some colleagues in China are on the night shift just to support us. So our clients can always find us 24 hours a day and know the location of their containers in real time,” Chen said.

China’s BYD looking for Mexico EV plant location, Americas CEO Stella Li says

Mexico’s business community is still waiting for any announcement from BYD: whether it will decide to come, and if so, which state it will choose.

The carmaker told Centro Logistico Jalisco officials it would give them an answer about whether to buy the 300-hectare site within three months. But many doubt it will make a commitment so soon, especially as the prospect of Chinese EVs entering the US market becomes a political pinata during this presidential election year.

On Wednesday, BYD Mexico’s general director Jorge Vallejo said in an interview with Mexican newspaper Excélsior that a formal announcement for the plant will be made in the coming weeks.

“What I really want,” Arechederra, the economic secretary, said “is that they come to Mexico.

“For Jalisco, it would be a great opportunity if they do – no matter in which state, because we would have an industry that can develop suppliers for them.”

China’s cyberspace regulator vows to work with Africa on AI governance

https://www.scmp.com/news/china/diplomacy/article/3257862/chinas-cyberspace-regulator-vows-work-africa-ai-governance?utm_source=rss_feed

China’s top cyberspace regulator has pledged to deepen the push for artificial intelligence governance with African countries at a China-Africa internet forum this week.

Cyberspace Administration of China director Zhuang Rongwen said the country would work with Africa to share opportunities brought by the information revolution and improve the global internet governance system.

Zhuang made the comments during the opening ceremony of the China-Africa Internet Development and Cooperation Forum on Tuesday in the southeastern port city of Xiamen.

China launches AI framework, urges equal AI rights for all nations

A statement from the forum called on China and Africa to strengthen coordination and cooperation within multilateral frameworks such as the United Nations and to support the UN in establishing an international AI governing institution.

It also called for better representation of developing countries in the global development and governance of the technology.

Hosted by the Cyberspace Administration of China and the Fujian provincial government, the conference was attended by Chinese authorities and representatives from 20 African countries, including government officials from Benin, Gabon and the Democratic Republic of the Congo. African envoys to China and representatives of international organisations also took part in the event.

China is in intense competition with the United States to dominate AI, an industry that is still in the early stages of developing regulations and governance institutions.

In late March, the United Nations General Assembly adopted its first resolution regulating AI to “[steer] the use of artificial intelligence towards global good”.

The UN said the non-binding resolution, proposed by the United States and co-sponsored by China, aimed to promote “‘safe, secure and trustworthy’ AI systems that will also benefit sustainable development for all”.

Beijing laid out its position and proposals in its Global AI Governance Initiative in October. It aims to ensure that AI is a force for good and that the technology remains under human control, while adhering to fairness during data collection, algorithm design, development and application.

According to an analysis published by American think tank Brookings Institution last month, only seven African nations have drafted national AI strategies so far, while no country on the continent has implemented formal regulation of artificial intelligence.

While regulating AI might not be a priority for many nations on the continent, “African governments must first work toward reinforcing data regulation along with building the human capital necessary to sustain AI ecosystems”, the report said.

The Xiamen forum statement said that Africa is an “important participant in scientific and technological progress” and that the development and application of AI is of “great significance to developing countries”.

It added that China is willing to work together with the continent to “seize opportunities, meet challenges and strengthen cooperation” in AI.

The statement called for strengthened policy dialogue, research and development, industrial cooperation, talent exchanges and safeguards for cyber and data security.

It called for China and Africa to share best practices and to hold exchanges and dialogues on AI policy, technology, industry, applications and governance.

US-China decoupling would harm AI governance: Henry Kissinger

“[We should] encourage China-Africa cooperation in enhancing AI capacity building, conduct online courses and professional training, and help countries improve AI technology and governance capabilities,” the statement said.

It also called for research and development cooperation on big data analytics, machine learning, natural language processing and computer vision, as well as the use of AI in agriculture, healthcare, education and urban management in Africa.

It was announced at the forum that the Cyberspace Administration of China will establish the China-Africa Exchange and Cooperation Center on Cybersecurity and Digital Economy in Xiamen to promote cyberspace collaboration between Beijing and African countries.

The internet watchdog will also hold a China-Africa cybersecurity training course this year to improve the capabilities of both sides.

Beloved panda Fu Bao starts quarantine in China after arriving from South Korea

https://www.scmp.com/news/china/science/article/3257864/beloved-panda-fu-bao-starts-quarantine-china-after-arriving-south-korea?utm_source=rss_feed

Fu Bao, the first giant panda born in South Korea, has arrived in China and is now in quarantine at a nature reserve in the southwest, where she will join a breeding programme.

Born in 2020 to a panda pair on loan from China, Fu Bao – or lucky treasure – is beloved in South Korea. She left the country on a charter flight from Incheon airport on Wednesday afternoon and arrived in Chengdu, Sichuan province in the evening.

Fu Bao was accompanied by staff from the Everland zoo near Seoul, who confirmed that she was in “stable health” after a check-up, the China Conservation and Research Centre for Giant Pandas said in a post on Weibo.

After clearing customs, she was transported to the Shenshuping giant panda base at the Wolong National Nature Reserve in Sichuan, where she will spend a month in quarantine, the research centre said in another post on Thursday.

But her arrival was not without controversy. Concerns were raised on social media over Fu Bao’s treatment at the airport after a video clip showed a person in a staff vest and with no gloves on poking a finger into an air hole of her carrier.

The footage prompted a discussion about the panda’s health and safety, with comments left under the research centre’s posts asking how an airport worker could be allowed to do this.

The research centre responded that the video clip showed “a warm touch from a veterinarian with the panda centre”, that it was a “necessary physical examination”, and that Fu Bao was “fine”.

It said the vet was wearing the staff vest because it was an airport requirement, and that he had disinfected his hands beforehand.

The response drew thousands of comments from Weibo users in both China and South Korea, many asking why a vet was not wearing protective gear and questioning his professionalism.

Others were concerned that people had used cameras with a flash to take pictures of Fu Bao at the airport, which could have frightened the animal.

Fu Bao will spend the next month in an isolated enclosure at the Shenshuping panda base, which has indoor and outdoor areas and “an ample supply of bamboo” and food, the research centre said.

Her health and feeding habits will be monitored to ensure she adapts to her new environment “as quickly as possible”.

It has not yet been confirmed where she will be moved to after the quarantine period is over, according to state media reports.

Janet Yellen in China: US treasury secretary aiming to keep trade relations on firmer footing

https://www.scmp.com/economy/global-economy/article/3257874/janet-yellen-china-us-treasury-secretary-aiming-keep-trade-relations-firmer-footing?utm_source=rss_feed

US Treasury Secretary Janet Yellen arrived in the southern Chinese city of Guangzhou on Thursday for the first leg of her week-long trip aimed at helping manage the trade relations between the world’s two largest economies.

Yellen, who arrived in Guangzhou just after 6pm local time, media reports said, was greeted by China’s vice-minister of finance, Liao Min, and US ambassador to China Nicholas Burns.

Ahead of her trip, Yellen said she would seek to “advance America’s economic and national security interests”, adding that the US had worked to “responsibly manage” its relationship with China.

“During my time in China, I’ll focus on advancing a healthy economic relationship that provides a level playing field for American workers and firms, and furthering cooperation on shared challenges like illicit finance and climate change,” she wrote Thursday morning on X, formerly known as Twitter.

“As the world’s two largest economies, it is critical that we maintain clear channels of communication – particularly when we disagree. The American people expect us to responsibly manage this relationship, and the world expects that we work together where we can.”

Her trip followed Tuesday’s phone call between Chinese President Xi Jinping and his US counterpart Joe Biden, with the two leaders exchanging views and discussing their differences on a wide range of issues, including US tech curbs and Chinese barriers.

Yellen is widely viewed as one of the most dovish members of the Biden administration, and has years of experience in negotiating with the Chinese officials.

Supply chain shifts, US curbs prompt calls for rethink of China’s trade strategy

Before her departure on Tuesday, Yellen said she would advocate for American workers and businesses to ensure they are treated fairly.

Yellen said she would also “press Chinese counterparts on unfair trade practices”, as well as industrial overcapacity, and to discuss cooperation in the fight against illicit finance, global financial stability, climate change and debt relief of some developing countries.

According to Bloomberg, Yellen suggested that the US would retain the option to protect new industrial sectors against China as Beijing poured money into manufacturing and exporting goods in new industries such as renewable energy.

US-China all-out trade war unlikely but soft-power gap will persist: Joseph Nye

The treasury secretary had earlier warned that Beijing’s past support for sectors like steel and aluminium had led to “substantial overinvestment and excess capacity”, and that this was now happening in industries like solar and electric vehicles.

Yellen is scheduled to have a round table discussion with economists to discuss challenges and opportunities in the Chinese economy on Friday morning, before meeting US business representatives to hear their thoughts on China’s overcapacity, intellectual property protection, and other on-the-ground issues in the afternoon.

She is then expected to begin talks with Chinese Vice-Premier He Lifeng in Guangzhou before heading for Beijing to meet high-ranking officials, including Premier Li Qiang, Minister of Finance Lan Fo’an and central bank governor Pan Gongsheng.

The trip is Yellen’s second visit to China in less than a year. She last visited in July 2023 when tensions between the two countries were also high, but her engagement helped to restart dialogue and launch bilateral working groups on economic and financial policy.

Supply chain shifts, US curbs prompt calls for rethink of China’s trade strategy

China divorce court orders man who called disabled wife ‘trash’ to pay US$4,200 compensation as insult is ‘domestic violence’

https://www.scmp.com/news/people-culture/gender-diversity/article/3256304/china-divorce-court-orders-man-who-called-disabled-wife-trash-pay-us4200-compensation-insult?utm_source=rss_feed

A divorce court in China has ordered a man who called his disabled wife “trash” to pay her 30,000 yuan (US$4,200) in compensation.

The man, Zhao, from Sichuan province in southwestern China – whose outburst has attracted widespread attention on mainland social media – was described by the court as a domestic abuser because he frequently insulted his wife, surnamed Qian.

After Qian became disabled in a traffic accident in 2015, her husband began treating her differently, Star Video reported.

The couple, who married in 2007 and raised two sons, had lived a happy and peaceful family life before Qian was seriously injured in a car accident.

Qian was lucky to survive the accident, but she almost lost her life and her ability to work.

From then on, Zhao began to disrespect his wife, ignoring her and verbally abusing her.

When Zhao filed for divorce, Qian consented and made a claim for damages.

During several hearings, the court learned that Zhao showed no love or care for Qian. When his wife needed more support because of her disability, he constantly humiliated and oppressed her instead.

The court believed Zhao did harm to Qian.

It also ruled that the belittling behaviour dished out by Zhao constituted psychological abuse and that his verbal attacks amounted to domestic violence.

The court decided Zhao should pay Qian compensation of 30,000 yuan (US$4,200) and be awarded only 40 per cent of the value of the jointly-owned property.

The story sparked anger on the mainland social media

“There was no need to humiliate her. She must have suffered a lot,” one online observer said.

“Since the beginning of her disability, the man’s purpose has clearly been to divorce her,” said another.

“Do you not think the penalty was too mild?” another asked.

“How did she tolerate the abuse for years? Poor woman,” another wrote.

China’s Anti-Domestic Violence Law of 2016 stipulates that abusers who cause severe injury or death to victims can be jailed for up to seven years.

According to a news report in March by Nanfang Daily, the Supreme People’s Court dealt with 2.17 million domestic violence cases in 2023, a 19.5 per cent increase from 2022.

During the same period, the court issued 5,695 personal safety protection orders to victims of domestic violence, a 41.5 per cent year-on-year growth from 2022.

Young Taiwanese urged to ‘remember the roots of the Chinese nation’ by island’s former leader Ma Ying-jeou

https://www.scmp.com/news/china/politics/article/3257850/young-taiwanese-urged-remember-roots-chinese-nation-islands-former-leader-ma-ying-jeou?utm_source=rss_feed

Former Taiwanese president Ma Ying-jeou has called on the island’s young people to “remember the roots of the Chinese nation” as he visited a site laden with symbolic importance.

On Thursday, Ma visited the northwestern province of Shaanxi to pay tribute to the Yellow Emperor, a legendary ruler from 5,000 years ago who is considered an ancestor of the Chinese people.

Speaking after the ceremony – which took place on Ching Ming, a festival where people traditionally honour their ancestors – Ma said these shows of respect are “both a core value of Chinese culture and one of the virtues of the Taiwanese people”.

He added: “I also hope that through this rare opportunity, young people from Taiwan will remember the roots of Chinese culture and the Chinese nation, as well as the pride of being a descendant of the Yellow Emperor.”

Although Ma did not mention reunification, the official tribute from the Shaanxi authorities said “cross-strait reunification is a historical inevitability”.

The most senior Beijing official to attend the ceremony held in Huangling county was Peng Qinghua, vice-chairman of the Standing Committee of the National People’s Congress, China’s top legislature, who laid a basket of flowers. Song Tao, director of Beijing’s Taiwan Affairs Office, also joined Ma.

Ma Ying-jeou calls for both sides of Taiwan Strait to work together, ‘avoid war’

Shaanxi is one of the cradles of Chinese civilisation. In recent years the local authorities have raised the profile of the ceremony to honour the Yellow Emperor and other events celebrating the country’s roots in line with President Xi Jinping’s drive to promote Chinese civilisation and its long history.

Ma is on an 11-day trip to the mainland, which he has described as a “journey of peace”, accompanied by 20 Taiwanese students. He will remain in Shaanxi until Sunday, when he will travel to Beijing, and is expected to meet Xi on Monday.

The meeting has yet to be confirmed but it would be their first since a summit in Singapore in 2015, when Ma was Taiwan’s president. The event was the first such meeting since the Communist party defeated the Nationalists, or Kuomintang, in 1949.

Ma is still seen as an influential figure in Taiwan’s mainland-friendly camp and remains a senior member of the modern-day Kuomintang.

Ma’s visit comes at a time of heightened tensions. Although he followed a policy of engagement with the mainland during his eight years in power, cross-strait relations have deteriorated since his successor, Tsai Ing-wen of the Democratic Progressive Party, came to power in 2016.

Her successor, the current Vice-President William Lai Ching-te, will be inaugurated on May 20, which could see relations worsening further because Beijing views Lai as a “separatist” and “troublemaker”.

Beijing sees Taiwan as part of its territory to be brought under mainland control, by force if necessary. Most countries do not recognise Taiwan as independent but many, including the United States, its main unofficial partner, oppose any unilateral change in the cross-strait status quo by force.

On Wednesday, Ma visited the former site of the Huangpu Military Academy – formerly known as the Whampoa Military Academy – in the southern city of Guangzhou.

Taiwan opposition questions President Tsai’s absence from Taiping pier ceremony

Set up by KMT’s founding father Sun Yat-sen, the academy is one of Guangzhou’s most important landmarks, having trained almost all of the KMT’s early senior officials and many Communist Party generals.

During his time in the city, Ma also visited a revolutionary ceremony to pay tribute to those who died in 1911 uprising against the Qing dynasty that helped pave the way for the founding of the Republic of China the following year.

Hau Lung-bin, a former mayor of Taipei, will visit mainland China next week and take part in another ceremony to honour the Yellow Emperor in Zhengzhou in the central province of Henan.

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Yu Hua on why young Chinese no longer want to work for private firms | By Invitation

https://www.economist.com/by-invitation/2024/04/02/yu-hua-on-why-young-chinese-no-longer-want-to-work-for-private-firms

WHAT LIES at the far reaches of the universe? This is a question that science has yet to answer, but most young people in China today already have an answer. According to them, at the end of the universe is not the Milky Way, the Andromeda Galaxy or the Canes Venatici Constellation, but a government job.

Observing changing attitudes about government jobs among young people in China over the course of the past four decades of the reform era can reveal the deep-seated changes that have taken place in the structure of Chinese society.

During the early days of the reform era in the 1980s, there were three categories of government jobs for urban residents: the collective positions (jiti bianzhi), the general positions (quanmin bianzhi) and the cadre positions (ganbu bianzhi). The cadre positions were equivalent to the civil-service system of today. At the time, all young people craved an opportunity to enter that system. But by the 1990s that was no longer something they desired.

If we were to describe the pace of economic development in the 1980s as walking, by the 1990s it was akin to a horse galloping. College graduates in particular turned their backs on the bureaucratic system in favour of seeking employment with foreign firms or joint ventures, or founding their own firms. The incentive was obvious: they could earn more, possibly a lot more, in the private sector.

In 1992 alone, more than 120,000 cadre-level bureaucrats—the backbone of various government departments at the time—resigned from their positions to work in the private sector. Seeing the tremendous opportunities of the market economy, some sought employment with foreign firms or joint ventures. Others drew on their savings and borrowed money from friends and family to start their own businesses. The most outstanding of them would later become China’s best-known entrepreneurs. Those taking the private-sector plunge described it as “diving into the sea”, as the market economy was metaphorically referred to as a great sea.

But as the Chinese economy slowed, young people began to rekindle their desire for jobs within the government system—and this time their desire was even more fervent. It was referred to as “coming ashore”.

For the past decade the number of Chinese college graduates applying for jobs in the civil service has surged. In 2023 some 2.8m applicants qualified for the civil-service examinations, chasing an estimated 39,000 available positions. The media described this as “an army of soldiers and horses attempting to cross a single-plank bridge”.

What’s more, having a bachelor’s degree is no longer an advantage; one needs to have at least a master’s degree. And for an application to be truly competitive, one needs a doctorate.

The fierce competition in the labour market has deprived young job-seekers of the ability to be selective when it comes to employment; as long as there is a secure government bureaucratic job available, no matter where or what the nature of the job, there are always large numbers of applicants. In 2020 a small subdistrict office in Hangzhou made the news when people with PhDs from some of China’s most prestigious universities were among those applying for an open position. In the remote Ali region of Tibet, where living conditions are extremely difficult, a job advertised in 2021 for a clerk at the local post office drew a staggering 20,813 applications.

Shutdowns, layoffs, unemployment and bankruptcy have all become key words to describe the economy of today. For young Chinese, high-paying jobs are no longer the be-all and end-all; what they want are stable jobs within the state bureaucratic system. After living through three years of pandemic lockdowns, it is not only the young who have realised the importance of these bureaucratic jobs. Everyone has.

No matter how long you might end up quarantined at home, government jobs are the only form of employment you can count on to continue paying you a full salary. Without a government job, the second the next lockdown comes along, your source of income may well be cut off. That is why “At the far reaches of the universe lies a government job” has become a popular phrase online in China today.

The Chinese people have always loved palm-reading, which is the simplest and most straightforward form of fortune-telling. In the past, palm-readers would base someone’s fortune on three lines which represented one’s longevity, career and love life. When young people get their fortunes told today, they care only about the career line, and all they want to know is: will there be a government job in their future.

I don’t know how these young people invented this new form of divination, but I can only marvel at the awe-inspiring power of government jobs, as they have now even entered into the long tradition of Chinese fortune-telling. ■

Yu Hua is a novelist and essayist, known primarily for his avant-garde fiction. His novels include “To Live” (1993), “Brothers” (2005) and “The Seventh Day” (2015)

This article was translated by Michael Berry.

Ex-Marine in Australia facing extradition to US says he wasn’t American citizen during China pilot training

https://www.scmp.com/news/asia/australasia/article/3257810/ex-marine-australia-facing-extradition-us-says-he-wasnt-american-citizen-during-china-pilot-training?utm_source=rss_feed

A former US Marine Corps pilot facing extradition to the United States from Australia will argue he was no longer a US citizen at the time of two of the alleged offences, which include training Chinese pilots, a Sydney court heard on Thursday.

Daniel Duggan, a 55-year-old Australian citizen, is facing extradition from Australia on charges including money laundering and breaking US law by training Chinese military pilots to land on aircraft carriers.

He was arrested by Australian federal police in a rural town in New South Wales state in October 2022, shortly after returning from China, where he had lived since 2014.

In the same week, Britain issued a warning to its former defence staff not to train Chinese People’s Liberation Army pilots at a South African flying academy where Duggan had also worked.

Duggan, whose wife and six children are also Australian, has been held in a maximum-security prison since his arrest.

‘Can’t imagine what secrets he’d have’: US pilot’s arrest for China work puzzles

His barrister Bernard Collaery told the court on Thursday that Duggan would argue he renounced his US citizenship in January 2012 and was not a US citizen at the time of two of the offences alleged in a US indictment.

The US government has argued Duggan did not lose his US citizenship until 2016.

Collaery told the court that Duggan’s family is seeking government aid to continue his legal defence, after spending A$800,000 on legal fees that could not be paid after the US government froze the sale of an Australian property owned by Duggan and his wife.

Australia-China ties back on track as Wang Yi urges more bilateral cooperation

Duggan’s previous lawyers are no longer acting in the case, the court heard, and Legal Aid was needed to pay fees for the new lawyers to prepare for a hearing on May 24, where Duggan’s response to the US extradition request will finally be made.

Magistrate Daniel Reiss noted Duggan had already had 14 months to prepare for a hearing on his eligibility for extradition, and refused an application to delay the May 24 hearing.

“I am satisfied there has been a reasonable opportunity to prepare for the hearing,” he said.

Professional China tomb-sweepers spruce up sites, perform rituals, live-stream rites for absent clients

https://www.scmp.com/news/people-culture/trending-china/article/3257618/professional-china-tomb-sweepers-spruce-sites-perform-rituals-live-stream-rites-absent-clients?utm_source=rss_feed

Ching Ming Festival, also known as the Tomb Sweeping Festival, has seen the growth of a unique service in China, the outsourcing of graveside rituals to professionals.

Some practitioners even live-stream the whole process for people who cannot attend in person.

In Hangzhou, the capital city of Zhejiang province in southeastern China, professional funeral ritualist Zou Mengjun says she has seen demand for her services grow.

At present, she is responsible for cleaning 20 to 30 graves daily for absent clients. The workload means she has to bow more than 100 times a day.

Her services include cleaning tombstones and then adorning them with fruit, fresh flowers and memorial ribbons.

Based on client requests, Zou may also recite eulogies, play the deceased’s favourite music at their grave and even live-stream the entire process.

In one touching scene featured in a trending online video, Zou recites a heartfelt message sent via WeChat on behalf of her client.

“Dear Grandma, I am your youngest granddaughter-in-law. Although I’ve been unable to visit you for two years, you’re always in my thoughts. The peach blossoms bloom, your favourite scene,” the message said.

“With the arrival of our third child, I’m unable to travel, so I’ve asked the funeral ritualist to express our family’s love,” it added.

The price of packages ranges from 98 to 398 yuan (US$14 to US$55).

A 298-yuan package includes a complete ritual service with three respectful bows, complete photography and videography and even a pot of yellow rice wine for the deceased.

Zou said she has been working in this field for almost six years and has seen the business flourish, with order numbers for the whole festival period leaping from around 20 to 30 in 2020 to 200-300 this year.

“Every Ching Ming and Winter Solstice are peak times for our grave-tidying service. For each grave, we must bow at least three times,” said Zou.

“So, if you think about it, if one person is tidying 20 to 30 graves, we are definitely bowing over 100 times per day,” she told Zhejiang Daily Press Group.

“When we are performing these services, sometimes family members who are at the site become curious about our work. They also think our service is very good, saying that when they get older and can’t move as easily, they will hire us to perform this service for them,” the professional ritualist said.

She added that some clients send them thank you letters, and even appreciation banners to them.

Online opinions on the service were mixed, with some viewing it as thoughtful while others arguing that it dilutes tradition.

“This is the first time I’ve heard of this profession. It truly solves a significant problem for those unable to return home!” said one online observer.

While another countered: “If you are unable to attend, you can perform the rituals before or after the festival. Hiring someone else has already lost the original meaning of worship. If the deceased could sense it, do you think they would accept it?”

“Let’s first acknowledge the funeral worker’s dedication! However, outsourcing someone to perform the rites loses the meaning of the ritual – tidying the ancestors’ graves must be done personally,” said a third.

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Home-grown hydrogen energy start-up Epago aims to tap Hong Kong’s innovation ecosystem to expand to China and overseas

https://www.scmp.com/business/china-business/article/3257811/home-grown-hydrogen-energy-start-epago-aims-tap-hong-kongs-innovation-ecosystem-expand-china-and?utm_source=rss_feed

Epago Technologies, a Hong Kong green energy start-up which makes “new-generation electrodes” for hydrogen fuel cell batteries, aims to use the city’s innovation, policy, and geographical advantages as a springboard to access bigger markets in mainland China and Europe.

The company, founded in 2022, is the first spin-off of the government’s InnoHK initiative to fund research projects in different industries, and will participate in the incubation programme at the Hong Kong Science and Technology Park (HKSTP) in Pak Shek Kok this August.

“We see Hong Kong as a good place to start, to test our prototypes, and to run some small-scale manufacturing activities. The city has skilled talent for research and development (R&D), and government support for early-stage entrepreneurship,” Andrea Grippi, co-founder and CEO, said at the company’s office in HKSTP last week.

Having started out as a research project looking at fuel cell electrodes at HKSTP, the company has developed a new structure of membrane electrode assemblies (MEA), the most critical component of hydrogen fuel cell batteries which makes it possible to convert hydrogen into electricity.

Because of its complicated structure and use of expensive platinum as a catalyst, MEA accounts for around half of the cost of a hydrogen fuel cell stack, and requires a huge amount of energy during the production process.

Using patented technology developed by its team from Hong Kong University and the California Institute of Technology, Epago is able to restructure the MEA in fuel cells to save up to 80 per cent on the production costs and make the manufacturing process five times faster, according to Zhu Haoyu, co-founder and chief technology officer at Epago.

Epago signed an agreement with the city government of Wuxi in Jiangsu province in February last year, under which the city will provide manpower, access to production facilities, and tax breaks to the company for their development in mainland China.

The company is seeking to raise HK$15 million by the end of May, and has HK$$5.4 million already committed and another HK$2.5 million under discussion.

It is planning to set up a prototype production line in Italy later this year, and begin series A fundraising and expand its manufacturing base to mainland China next year.

With current production capacity at the laboratory scale, Epago is planning to reach a cumulative output of 30,000 square metres of electrodes in five years, once it has expanded its client base to China, Japan, Italy, Germany and France.

“Hong Kong will forever be the R&D and prototype centre, but it’s limited in large-scale industrial capability due to the land and costs,” said Grippi.

Epago expects to leverage Hong Kong’s unique position in the Greater Bay Area to tap China’s low production costs and sophisticated supply chain. It is currently in talks with the city government of Foshan in Guangdong province about future partnerships.

“China has a plan that’s very ambitious and realistic in developing its hydrogen economy,” said Grippi. “We’ve found ourselves in a very good moment in time where we have the technology, the vision to bring a change, and we are in a place where there are the resources for the innovation to come to life.”

China, already the world’s largest producer of hydrogen, sees the clean fuel as one of the new vehicles for nurturing nascent technologies and industries, on top of advancements in solar power, wind farms, electric vehicles, lithium batteries and the electrification of transport.

In 2022, the country introduced its first ever national hydrogen strategy – a medium and long-term plan for the development of the hydrogen energy industry between 2021 and 2035. Under this, China aims to have at least 50,000 hydrogen fuel-cell electric vehicles on the road and produce 100,000 to 200,000 tonnes of “green hydrogen” – hydrogen produced using electricity generated by renewable resources – annually by 2025.

China military on ‘high alert’ at Myanmar border after live-fire drill ends

https://www.scmp.com/news/china/military/article/3257812/china-military-high-alert-myanmar-border-after-live-fire-drill-ends?utm_source=rss_feed

The People’s Liberation Army said it will remain on high alert and “further strengthen” its patrols and control along China’s border with Myanmar, after conducting a live-fire drill in the area this week.

An article published by the official PLA Daily said on Thursday that tensions had intensified recently in northern Myanmar, where rebel groups are resisting the country’s military rulers.

While the two countries have been “friendly” neighbours for decades, the war in northern Myanmar has “seriously threatened” security and stability in the border region and “the safety of lives and property of the border residents on both sides”, it said.

“The Chinese military has always been on high alert and will further strengthen border patrol and control, as well as security protection between China and Myanmar,” the article said, stressing that the PLA will take “all necessary measures” to safeguard national sovereignty and the safety of its people.

Myanmar has experienced persistent resistance by rebel groups since its military seized power from the democratically elected government in 2021, sparking civil disobedience.

China has repeatedly raised concerns over the security of the border region during the unrest, conducting its first live-fire drill since the coup in November, followed by this week’s exercise five months later.

According to the PLA, the latest exercise – a joint drill on Tuesday involving land and air forces – was aimed at improving China’s capacity to “handle various emergencies” on the border.

The article repeated China’s calls for a ceasefire in northern Myanmar, urging “relevant parties to maintain maximum restraint and continue to resolve issues through dialogue and negotiation”.

Beijing has attempted to broker talks between Myanmar’s junta and the Three Brotherhood Alliance – ethnic armed groups which launched a major offensive in the northern Shan state in October last year.

Four rounds of discussions have taken place so far, with the third leading to a ceasefire agreement that was reportedly breached a day later by the military junta.

In addition to security, China has also been concerned about the disruption to trade caused by the instability in northern Myanmar.

A fourth round of peace talks – held last month in Kunming, capital of Yunnan province which shares a border with the Shan state – focused on the resumption of border trade but yielded no significant breakthroughs, according to Irrawaddy, an independent Myanmar news outlet based in Thailand.

Irrawaddy reported on a visit to Myanmar in February by Yunnan governor Wang Yubo. According to the report, Wang and junta chief Min Aung Hlaing discussed the restoration of trade and the flow of goods between Myanmar and Yunnan.

According to the Yunnan government website, Wang also met Myanmar’s commerce minister during the same trip.

Donald Trump won’t rock US-Japan alliance, to keep firm focus on China if he returns to power: ex-aide

https://www.scmp.com/news/asia/east-asia/article/3257828/donald-trump-wont-rock-us-japan-alliance-keep-firm-focus-china-if-he-returns-power-ex-aide?utm_source=rss_feed

Donald Trump is almost certain to attach great importance to the US-Japan alliance if he returns to the White House, one of his former aides said on Wednesday.

“I predict a lot of continuity, and the same things that motivated him when he was elected the first time, I think, continue to motivate him,” Alexander Gray, who was deputy assistant to the former president, said.

For Trump, Gray said that China would likely be regarded as the greatest threat to national security, and his foreign policy approach, with a strong emphasis on enhancing deterrence capabilities, is more relevant in 2025 than it was in 2017 when first he took office.

Referring to the decades-old US-Japan alliance, he said it is “beyond any one prime minister, any one president. It has such extraordinary strategic significance” to serve US interests and ensure stability in the Indo-Pacific region.

China, Japan visits a ‘major diplomatic coup’ for Indonesia’s Prabowo

He also shrugged off deep-seated speculation should Trump win the November general election, he would significantly alter the trajectory of US foreign policy set forth by the administration of President Joe Biden, which has been marked by a focus on multilateral cooperation.

“My sense is he doesn’t have a preference. If you asked him that question, I don’t think he’d have a preference. I think his preference is for alliances that work, whether it’s US-Japan, or US-Japan-South Korea, or Nato or whatever it might be,” he said.

“If it’s effective, if it keeps the peace and if it serves US interests, I think the [former] president is all for it.”

In his view, the Biden administration has inherited the elevation of the US-Japan relationship from Trump’s era and cooperation of the two countries is set to deepen across various domains, ranging from defence to economic security, and extend its reach to Southeast Asia, the Middle East and beyond.

Asked about what may be the biggest foreign policy issue for a second Trump presidency, Gray, who helped to shape the previous administration’s approach to Asia, said, “China will continue to be probably the dominant focus.”

Gray, who was also chief of staff of the National Security Council, said China is “more malign than before” on the trade front “so I absolutely think there’s going to be a significant increase in tariffs, maybe as high as 60 per cent.”

He also spotlighted that China and Russia are more integrated as “an axis of autocracy” than when Trump was president.

He contended that the increasing alignment between Beijing and Moscow in an anti-American partnership is partially attributable to the shortcomings of the Biden administration.

“It’s going to be very difficult to separate the two the way we were really able to in [former] president Trump’s first term,” said Gray, who is now chief executive officer of American Global Strategies LLC.

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

The failure came despite Trump’s “greatest historical legacy” of transforming Washington’s approach to Beijing “180 degrees from his predecessor” Barack Obama.

“When I started, there were still big parts of the US government that viewed China as a potential friend and partner,” he said. “When I left, every agency of the US government was focused on how do we win a great power competition.”

Similarly, he expressed disappointment over North Korea’s deepening ties with Russia, whose utilisation of Pyongyang’s artillery shells to kill Ukrainians has destabilised the security situation not only on the Korean peninsula but also elsewhere in the world.

“So, you know, as much as I think [former] president Trump wants to have reduction of tensions, the world has changed for the worse under President Biden, and that’s just a reality he’s going to have to confront,” he said.

A second KMT leader from Taiwan plans a visit to mainland China next week

https://www.scmp.com/news/china/politics/article/3257785/second-kmt-leader-plans-visit-mainland-china-next-week?utm_source=rss_feed

Hau Lung-bin, a former mayor of Taipei, will visit mainland China next week, following the “journey of peace” visit by former Taiwan president Ma Ying-jeou which began this week.

Speaking on a radio programme on Wednesday, Hau, the son of former Taiwan premier Hau Pei-tsun, said he would spend three to four days visiting central Henan province.

On the same day, the Taiwanese government declined Beijing’s offer of aid for a deadly earthquake in the island’s east coast. The magnitude 7.3 earthquake occurred Wednesday morning, killing at least nine and injuring over 900 in Hualien County.

During the trip, Hau said, he would take part in a tribute ceremony for the Yellow Emperor in Zhengzhou, an annual local cultural extravaganza to celebrate the long history of the Chinese civilisation.

“The purpose of me paying homage to the Yellow Emperor is to honour our ancestry and heritage, and more importantly, to emphasise the fact that the people from both sides of the Taiwan Strait share the same root, the same origin, and the same historical and cultural backgrounds, which should go beyond the political differences,” Hau said.

The Yellow Emperor, or Huangdi, was a legendary king some 5,000 years ago in Chinese mythology considered one of the ancestors of the Chinese civilisation.

“It would be unreasonable for the cross-strait relations to end up in a military crisis or dangerous war caused by political manipulation,” Hau added.

Hau’s visit is to come near the end of Ma’s 11-day trip, which began on Monday. There has been speculation that the tour by Ma, Taiwan’s president from 2008 to 2016 and a former chairman of the mainland-friendly KMT party, will include a meeting with Chinese President Xi Jinping next week, though neither side has confirmed that.

Echoing Ma’s message of peace, Hau said Taiwan and the mainland now face “the danger of war” and his visit aims “to reduce misunderstandings and increase understanding” across the Taiwan Strait.

Ma Ying-jeou calls for both sides of Taiwan Strait to work together, ‘avoid war’

The KMT lost Taiwan’s presidential election in January to the more independence-leaning Democratic Progressive Party (DPP), but won most seats in the Legislative Yuan.

Hau also urged William Lai Ching-te, the DPP president-elect, to “release goodwill messages” in his inauguration speech on May 20.

Hau and Ma are not the only KMT politicians with mainland itineraries on their agendas: former legislative chief Wang Jin-pyng and former KMT chairwoman Hung Hsiu-chu are said to be planning visits in coming months too.

Tensions between Taiwan and Beijing have escalated since two mainland fishermen died in a chase by Taiwanese coastguard near Quemoy last month. Days after the incident, KMT vice-chairman Andrew Hsia Li-yan visited Shanghai and met with the mainland’s Taiwan Affairs Office chief Song Tao.

On Wednesday, Ma visited the cemetery of nationalist revolutionaries in Guangzhou, Guangdong province and paid tribute to those who died in an uprising against the Qing dynasty in 1911. The uprising was part of the revolution that led to the birth of the Republic of China (ROC) the next year.

The KMT ruled the ROC in the mainland from 1927 to 1949, when it was defeated by the Communist Party in the Chinese civil war and fled to the island of Taiwan. The People’s Republic of China (PRC) was then founded on the mainland while the ROC has remained Taiwan’s official name.

Beijing regards Taiwan to be a rogue province, to be eventually reunified with the mainland – by force if necessary. Most countries in the world, including the US, do not recognise Taiwan as an independent country but Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with arms.

China’s economy must ‘return to basics’ amid tech reform push, outspoken economist Wu Jinglian says

https://www.scmp.com/economy/china-economy/article/3257735/chinas-economy-must-return-basics-amid-tech-reform-push-outspoken-economist-wu-jinglian-says?utm_source=rss_feed

One of China’s most outspoken and liberal economists has called for the Chinese economy to “return to the basics” by building an “open, competitive and orderly” market.

Wu Jinglian, 94, believes the key lies in the “reform of the economic system, transformation of the growth model” and is dependent on the form of the market and the rule of law.

“Right now, it is important to coordinate all short and long-term policies and make building a unified, open, competitive, orderly market system a core mission,” Wu said in the March issue of the Exploration and Free Views academic journal.

“[China] should seize the new wave of tech reform, and push further on reform and opening up.”

Actions still louder than words for foreign firms, expats as China ups the ante

Wu was quoted among his peers for his views on how China should proceed in transforming its economy.

His comments were part of academic discussions organised by the monthly publication over the relation between President Xi Jinping’s “new quality productive forces”, a catchphrase largely referring to tech innovation, and reform and opening-up policies.

Wu was a key adviser to the Chinese government from the 1980s during China’s famous reform and opening-up movement, which was one of the most important governance legacies of China’s late paramount leader Deng Xiaoping, that helped transform China into the world’s second-largest economy.

The open discussions over the economic reforms have gradually died down in recent years, despite China’s economy encountering a variety of problems, including a slowdown of headline growth, a property slump and a demographic crisis.

Xi has vowed to deepen reforms and open the market wider several times during speeches and also in government documents, with the latest made during his field inspection in the central province of Hunan last month.

However, overseas questions remain over China increasingly swaying away from the direction of an open market.

There has also been an increase in state ownership in the overall economy and in the fickle regulatory environment, including introducing new laws, including the anti-espionage law seen by foreign businesses as deterring investment.

Reforms suggested by pro-reformists over the years include raising the retirement age, reforming state-owned enterprises and the hukou household registration document, and also the removal of market entry barriers for private firms.

And despite appearing less in public events in recent years, Wu continued to speak about implementing Beijing’s 2013 reform document, which for the first time mentioned letting the market play a “decisive” role in the economy and set out 336 detailed reform tasks.

A report published by the US-based Rhodium Group in February suggested that results of China’s efforts to turn into a “market-based” economy were mixed, as the government had made “meaningful” progress in attracting foreign investment, but had not addressed structural problems that resulted in mounting local government debt.

‘Too soon to let our guards down’ for China’s economic recovery despite uptick

China’s economic indicators have shown signs of a moderate pick up in the first quarter following an uneven recovery from the coronavirus pandemic last year.

But the property slump, ballooning local government debts following years of large-scale credit and investment expansions continue to weaken confidence in the private sector, and are weighed further down by problems such as the ageing population.

International Monetary Fund managing director Kristalina Georgieva called for “deep structural reforms” to “enhance conditions for entrepreneurship, innovation and economic performance” during the China Development Forum in Beijing last month.

Treasury secretary heads to China to talk trade, anti-money laundering and Chinese ‘overproduction’

https://apnews.com/article/china-yellen-trade-solar-chips-manufacturing-f68bfec543be2b1e50d72d4dca4fea45FILE - Treasury Secretary Janet Yellen, right, greets Chinese Vice Premier He Lifeng, Nov. 9, 2023, in San Francisco. Yellen is headed to China to Guangzhou and Beijing for meetings with finance leaders and state officials. Her engagements will include Vice Premier He Lifeng, Chinese Central Bank Governor Pan Gongsheng, former Vice Premier Liu He, leaders of American businesses operating in China, university students and local leaders. (AP Photo/Eric Risberg, File)

2024-04-04T04:04:00Z

JOINT BASE ELMENDORF-RICHARDSON, Alaska (AP) — Treasury Secretary Janet Yellen is headed to a China determined to avoid open conflict with the United States, yet the world’s two largest economies still appear to be hashing out the rules on how to compete against each other.

There are tensions over Chinese government support for the manufacturing of electric vehicles and solar panels, just as the U.S. government ramps up its own aid for those tech sectors. There are differences in trade, ownership of TikTok, access to computer chips and national security — all of them a risk to what has become a carefully managed relationship.

The 77-year-old Yellen, a renowned economist and former Federal Reserve chair, laid out to reporters the issues that she intends to raise with her Chinese counterparts during her five-day visit. Yellen is headed to Guangzhou and Beijing for meetings with finance leaders and state officials. Her engagements will include Vice Premier He Lifeng, Chinese Central Bank Governor Pan Gongsheng, former Vice Premier Liu He, leaders of American businesses operating in China, university students and local leaders.

Yellen, speaking to reporters Wednesday during a refueling stop in Alaska en route to Asia, said her visit would be a “continuation of the dialogue that we have been engaged and deepening” ever since U.S. President Joe Biden and Chinese President Xi Jinping met in 2022 in Indonesia. She noted that it would be her third meeting with China’s vice premier.

Yellen recently accused China of flooding global markets with heavily subsidized green energy products, possibly undercutting the subsidies the U.S. has provided to its own renewable energy and EV sector with funds provided by the Democrats’ Inflation Reduction Act. She said she intends to repeat her concerns to Chinese officials that they’re flooding the global market with cheap solar panels and EVs that thwart the ability of other countries to develop those sectors.

“We need to have a level playing field,” Yellen told reporters. “We’re concerned about a massive investment in China in a set of industries that’s resulting in overcapacity.”

Yellen didn’t rule out taking additional steps to counter Chinese subsidies in the green energy sectors, adding, “It’s not just the United States but quite a few countries, including Mexico, Europe, Japan, that are feeling the pressure from massive investment, in these industries in China.”

The Treasury secretary’s travels come after Biden and Xi held their first call in five months on Tuesday, meant to demonstrate a return to regular leader-to-leader dialogue between the two powers. The leaders discussed Taiwan, artificial intelligence and security issues.

The call, described by the White House as “candid and constructive,” was the leaders’ first conversation since their November summit in California, which renewed ties between the two nations’ militaries and enhanced cooperation on stemming the flow of deadly fentanyl and its precursors from China.

Still, it appears to be difficult for the two countries to strike a balance between competition and antagonism.

For instance, Xi last week hosted American CEOs in Beijing to court them on investing in China. Meanwhile, Biden last August issued an executive order that instructed an inter-agency committee, chaired by Yellen, to closely monitor U.S. investment in China related to high-tech manufacturing.

Jude Blanchette, a China expert at the Center for Strategic & International Studies, said, “the Biden administration’s efforts over the last year to stabilize the relationship are clearly working, but the main friction points all remain unresolved and will likely challenge the relationship for the foreseeable future.”

“For the time being, a ‘managed rivalry’ might be the best we can hope for, given the potentially catastrophic consequences of the relationship really going off the rails,” he said.

Yellen last week said China is flooding the market with green energy that “distorts global prices,” and plans to tell her counterparts that Beijing’s increased production of solar energy, electric vehicles and lithium-ion batteries poses risks to productivity and growth to the global economy.

China began to broaden its presence in the global economy more than two decades ago, exporting cheap goods that appealed to U.S. consumers at the expense of factory jobs in many of those consumers’ hometowns. Research by the economists David Autor, David Dorn and Gordon Hanson into what’s known as the “China Shock” led to the steady demise of many factory towns, and in some cases led to greater political discontent.

Still, some experts see a benefit in an economic showdown to produce green products.

Shang-Jin Wei, a professor of Chinese business at Columbia University, says that a subsidy war could ultimately help consumers in both countries buy more climate-friendly products, which is an aim of the Biden administration.

“In contrast, a U.S. tariff on EV imports could raise the price of EVs in the U.S. and is therefore counterproductive for the purpose of inducing a green transition.”

Yellen’s trip will run from April 4 to 9. It’s intended as a follow-up to Yellen’s travel to China last July, which resulted in the launch of a pair of economic working groups between the two nations’ finance departments to ease tensions and deepen ties.

But this visit falls in an election year, where tough talk on China has increased by Democrats and Republicans — who criticize Chinese ownership of popular social media app TikTok, the nation’s censorship and human rights record and hold a deep mistrust over recent acts of espionage such as hacking and the use of a spy balloon.

Scheherazade S. Rehman, a professor of International Business and Finance and International Affairs at George Washington University, said while “it’s an election year, so all the rhetoric is going to be sharper, the U.S and China are in a symbiotic trading relationship and ultimately need each other.”

China is one of the United States’ biggest trading partners, and economic competition between the two nations has increased in recent years. Yellen stressed Wednesday that the United States has no interest in decoupling from China.

China’s support of Russia as it continues its invasion of neighboring Ukraine is another issue that will come up during the meetings. As the U.S. and its allies sanction Russian officials and entire sectors of the Russian economy, like banking, oil production and manufacturing, trade between China and Russia has increased.

___

Associated Press writers Josh Boak in Washington and Ken Moritsugu in Beijing contributed to this report.

FATIMA HUSSEIN Hussein reports on the U.S. Treasury Department for The Associated Press. She covers tax policy, sanctions and any issue that relates to money. twitter mailto

Janet Yellen in China: what’s on the table as Washington’s ‘effective emissary’ begins her trip?

https://www.scmp.com/economy/global-economy/article/3257734/janet-yellen-china-whats-table-washingtons-effective-emissary-begins-her-trip?utm_source=rss_feed

US Treasury Secretary Janet Yellen would be viewed in China as an “effective emissary” to manage trade tensions, but analysts are watching for any meaningful results from her week-long trip, which starts on Thursday.

The planned visit follows Tuesday’s “candid” and “constructive” phone call between President Xi Jinping and US counterpart Joe Biden, and is seen as another bellwether of relations between Beijing and Washington ahead of November’s presidential election.

The US Treasury confirmed on Tuesday that Yellen’s itinerary in the southern city of Guangzhou and capital city of Beijing would include meetings with economists, American businesses, Guangdong governor Wang Weizhong and Beijing mayor Yin Yong.

Premier Li Qiang, Vice-Premier He Lifeng, Minister of Finance Lan Fo’an, central bank governor Pan Gongsheng and Liu He, China’s former vice-premier who led previous trade negotiations with the US, would also meet with Yellen during trip, the US Treasury statement added.

Current affairs: sparks fly between China, US over EVs before Janet Yellen visit

“Secretary Yellen is widely respected and is seen as an effective emissary because she focuses on the issues and doesn’t let side problems get in the way of the discussion,” said Cameron Johnson, a Shanghai-based senior partner at consultancy firm Tidalwave Solutions.

Johnson added that trade is “a key driver in the US-China relationship and its ballast” could help reach the goal of maintaining “fairly stable ties” in a US election year, so “it does not affect the outcome of the election”.

Yellen, seen as one of the most dovish members of the Biden administration, is on a mission to “press Chinese counterparts on unfair trade practices”, as well as industrial overcapacity, and to discuss cooperation in the fight against illicit finance, financial stability, climate change and debt relief of some developing countries, according to the US Treasury statement.

Her trip – having last visited China in July – is expected to precede a visit by US State Secretary Antony Blinken, although details have yet to be revealed.

“The most challenging part for bilateral relations is the trade war and the tariff issues, following that is the US restrictions on tech-related bilateral [foreign direct investment],” said Dong Jinyue, a senior economist at BBVA Research.

She added that the military issues related to Taiwan and South China Sea are “equally challenging” compared to economic differences, but dealing with trade and investment is “easier to maintain the status quo”.

During Tuesday’s phone call, Xi raised the “endless measures” by the US to suppress China’s economy, trade, science and technology, and a “longer and longer” list of sanctions against Chinese firms.

“If the US is willing to carry out mutually beneficial cooperation and share the dividends of China’s development, China’s door will always be open,” said Xi, according to the state-backed Xinhua News Agency.

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

But Alicia Garcia-Herrero, chief economist for Asia-Pacific at Natixis, doubted whether there could be quick results over such issues, including overcapacity, during Yellen’s visit.

“I don’t think China has a solution for that because very clearly the three new sectors are engines of growth,” she said, adding that it is directly related to the export markets.

Since last year, electric vehicles, lithium batteries and solar cells have become China’s new export pillars, with their value exceeding 1 trillion yuan (US$138 billion).

“How [are the Chinese officials] going to react to Yellen’s request to stop overproducing?” added Garcia-Herrero.

“I think they’re going to hit the wall on this one.”

Wang Zichen, a research fellow at the Beijing-based Centre for China and Globalisation think tank, said Yellen could find some common ground on the issue of global financial stability.

However, Wang warned there are “many more landmines” buried in the trade relationship, citing US concerns over alleged ties with China in the acquisition of the Pittsburgh-based US Steel by Japanese steelmaker Nippon Steel.

“[It] demonstrates the dire business atmosphere Chinese companies are facing in the US,” he said, adding other examples, including US export controls over China and the “displeasure” shown by former president Donald Trump with Chinese products.

Why Nongfu Spring’s online attackers are no Chinese patriots

https://www.scmp.com/opinion/china-opinion/article/3257473/why-nongfu-springs-online-attackers-are-no-chinese-patriots?utm_source=rss_feed

Zhong Shanshan, China’s bottled water king, remains the richest man in China, according to the Hurun Global Rich List 2024. But few people in China, it seems, are in the mood for congratulations.

The rich list came out last month, right after Zhong, the founder of Nongfu Spring, found himself caught in the eye of an internet storm. A large number of nationalist internet users in China had attacked him, accusing his firm of, among other things, having pictures of Japanese religious buildings on its packaging. A boycott followed and the company’s Hong Kong-listed shares lost as much as 8 per cent last month, though have since recovered.

I am not surprised that few Chinese internet users are happy for Zhong; as some have put it, what has Zhong’s status as China’s richest man got to do with them? It is also understandable that, with China’s economy struggling, people find themselves unable to muster much sympathy for Zhong – his immense wealth is estimated at US$63 billion.

The rich are so widely despised in China that there is even a term chou fu – resenting or hating the rich – to describe the feeling. Many believe the rich obtain their wealth through unfair means, such as personal connections or corruption.

But I believe attacking Zhong or boycotting his products is unreasonable and unwise. It is a move that is bad for China’s economy and the attackers themselves.

Zhong’s “rags to riches” story is inspiring. In 1996, he established his company, a private firm, in his hometown of Hangzhou. It slowly grew to be the largest bottled water company in China. In 2020, the company went public on the Hong Kong stock exchange, which suddenly made Zhong extremely rich.

The online denunciations of him have so far failed to produce any evidence of actual wrongdoing. If he has not violated any law, he should, at the very least, be left alone. What would those nationalist trolls hope to see? The collapse of his company? More than 20,000 employees losing their jobs?

For me, the Nongfu Spring saga points to the fraught relationship between China and its entrepreneurs. Let’s face it – the Communist Party has never had an easy relationship with private enterprise. Running one’s own business was illegal for many years under Mao Zedong.

After Deng Xiaoping gingerly introduced economic reforms, he allowed getihu – individual entrepreneurs – to set up their own businesses. “To get rich is glorious,” as the saying went. However, Chinese society was still unsure about such people. My mother thought she had degraded herself after she retired from a state-owned enterprise (SOE) in the early 1980s and started work as an administrator at a local market, collecting fees from getihu.

These private businesses started small, but gradually they grew and played an increasingly vital role in the economy, so much so that in 1999 China amended its constitution and acknowledged that the private sector was an important component of the economy rather than a mere complement to the public sector. To this day, however, private enterprises are subjected to discriminatory treatment in terms of taxation, market access and restrictions on bank loans. Banks in China prefer to lend money to SOEs.

Remarkably, private business rose out of this not-so-fertile ground and proliferated throughout the country. In a speech at the Private Enterprises Symposium in 2018, President Xi Jinping pledged support for entrepreneurs. By then, the private sector was providing more than 50 per cent of the tax revenue, 60 per cent of economic output and 80 per cent of employment in China.

Even so, the private sector is facing unprecedented challenges. While Beijing has promised to improve the operating environment for private businesses, few have benefited from it in recent years. In fact, the opposite seems true.

China must stop chipping away at Deng Xiaoping’s economic legacy

The share of China’s private sector among the country’s 100 largest listed companies has fallen from 55.4 per cent in mid-2021 to 36.8 per cent at the end of 2023, according to a study by the Peterson Institute for International Economics. The Covid-19 pandemic and the crackdown on the tech sector are likely drivers behind the fall.

Xi’s “common prosperity” strategy has also caused fears that the authorities could tighten control over the private sector. Already, large companies have been pressured to make “voluntary donations” towards Xi’s vision. Tencent and other tech companies have duly complied.

I believe the government’s ambivalent attitude towards private enterprise gives a lot of space to nationalist trolls. If Beijing is sincere about putting its weight behind the private sector to revive the economy, then it should stop the boycott against Nongfu Spring.

Trashing the business simply because it is successful is wrong. Nongfu Spring is one of the country’s most successful domestic brands. We should all cherish it, and any private enterprise that generates tax revenue and provides employment should be encouraged. How well the private sector fares has a direct impact on China’s economy and its stability.

I am pleased to see that some disagree with those nationalist trolls. They are appalled that the attack was carried out in the name of “patriotism” and said such behaviour was hindering China. A true patriot is someone who puts the national interest first. Attacking a home-grown brand for no good reason is not patriotic.

Shock as freak winds in China kill 3, including a child, by sucking them out of broken high-rise windows as they slept

https://www.scmp.com/news/people-culture/environment/article/3257686/shock-freak-china-winds-kill-3-including-child-sucking-them-out-broken-high-rise-windows-they-slept?utm_source=rss_feed

The death of three people in China who were swept up and blown out of the windows of their homes by strong winds has shocked mainland social media.

A series of freakishly strong winds hit Jiangxi province in southern China in the middle of the night of March 31.

A total of four people were killed and at least 10 were injured. Three of the dead, who lived in the same residential building, were ripped from their high-rise flats by the powerful gusts, but it is not clear how the fourth victim was killed.

One of those caught up in the chaos was a man, surnamed Xu, whose flat is on the 20th floor.

He said that the wind swept his 64-year-old mother and 11-year-old son out of the flat after blowing out all the living room and bedroom windows.

The third fatality, a 60-year-old woman, lived on the 11th floor.

Her husband, surnamed Wan, said his wife fell to her death after being sucked out of a broken bedroom window.

Wan survived because the room he was sleeping in that night escaped the damage.

He recalled that he woke up with a startle due to loud noises and rushed into the badly damaged living room to check if everything was alright.

Wan then dashed into his wife’s bedroom.

“I called her name, but there was no response,” he said.

Eventually, after a frantic search of the whole house, Wan discovered that a floor-to-ceiling room window had been blown out completely. He also heard the sound of crying outside.

In a viral video, his wife’s bed is seen next to the glassless window.

Details about how his wife was swept out of the building are unclear, but Wan found her body at the foot of the residential building.

“I am totally at a loss,” he said.

The story has startled, and puzzled, mainland social media.

“Oh my god, this is so horrible,” said one online observer.

Another shocked internet user said: “How can the winds sweep the windows away?”

While a third asked: “What exactly is this residential building made of ?”

An equally puzzled online observer said: “Why is it that the other flats in the building remain intact?”

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Indonesia’s Prabowo scores ‘major diplomatic coup’ with China, Japan visits in signal of future policy direction

https://www.scmp.com/week-asia/politics/article/3257764/indonesias-prabowo-scores-major-diplomatic-coup-china-japan-visits-signal-future-policy-direction?utm_source=rss_feed

This week’s visits by Prabowo Subianto – Indonesia’s president-elect and current defence minister – to China and Japan are being seen as a “major diplomatic coup” that analysts say signal his objectives of strengthening Jakarta’s defensive capacity with the West while maintaining good economic ties with Beijing.

Following a three-day visit to Beijing at the invitation of China’s leader Xi Jinping, Prabowo touched down in Tokyo on Wednesday, where he met Japanese Prime Minister Fumio Kishida and Defence Minister Minoru Kihara.

Kishida said the visit showed that Prabowo attached “great importance to Japan”, which is a “long-standing” friend of Indonesia.

“Prime Minister Kishida stated that Japan would contribute to Indonesia’s development through cooperation in such fields as infrastructure development and energy and support Indonesia’s efforts to proceed with the process of its accession to the OECD,” Japan’s ministry of foreign affairs said in a statement released on Wednesday.

“In response, President-elect Prabowo expressed his gratitude for Japan’s assistance to date and his hope to further enhance bilateral cooperation in a broad range of areas including security, agriculture and fisheries as well as disaster prevention,” the statement said.

Prabowo visited China and Japan in his capacity as defence minister.

Indonesia is trying to join the Organisation for Economic Cooperation and Development, a group of 38 member countries, including Japan and the United States, that are typically democratic and support free markets.

Kishida and Prabowo also discussed regional issues such as the situation in the East and South China Seas, dealing with North Korea on the nuclear and missile issues, and the crisis in Myanmar.

Meanwhile, Kihara “reiterated [to Prabowo] his opposition to any unilateral change of status quo by force as well as any actions that increase tensions in the South China Sea”, according to a statement from Japan’s ministry of defence.

Kihara also said he “wants to maintain and enhance a ‘Free and Open Indo-Pacific’ based on the rule of law together with Indonesia”.

Prabowo’s stated intention of enhancing security ties was not reserved for Tokyo. During a meeting with his Chinese counterpart Dong Jun on Tuesday, Prabowo said Indonesia was “willing to further strengthen defence cooperation with the Chinese side and continuously promote the development of the relations between the armed forces of the two countries”, according to state news agency Xinhua.

An editorial in The Jakarta Post newspaper on Wednesday lauded Prabowo’s China and Japan trips as a “major diplomatic coup”, saying they were a “very positive step in laying the groundwork for the larger diplomatic arena that he will navigate once he takes office in October”.

Lina Alexandra, an international relations expert with the Centre of Strategic and International Studies (CSIS) in Indonesia, said Prabowo’s trips this week were a “symbolic move” signalling his future foreign policy direction, one in which he could “interact with anyone”.

“Prabowo gave a signal that he wanted balanced relations with all countries. He wants to show his ‘good neighbour policy’, at a very early level,” she said.

Prabowo’s trips also showed he wanted to strengthen Indonesia’s defence capacity while simultaneously growing the country’s economy, said Ahmad Rizky Umar, a lecturer at the School of Political Science and International Studies at the University of Queensland in Australia.

“Prabowo’s campaign manifesto placed great emphasis on the modernisation of defence equipment. In the last five years, Prabowo has struggled to negotiate defence issues in the cabinet because [Indonesia’s] fiscal capacity is limited,” he said.

The lack of budget for defence equipment procurement has strained Prabowo’s relationship with Finance Minister Sri Mulyani, who reportedly will not be joining his incoming cabinet.

“As president, Prabowo will be in a more powerful position in negotiating the budget in the cabinet,” Ahmad said.

Jakarta and Beijing generally enjoy a close bilateral relationship. China was Indonesia’s second-largest foreign investor last year with US$7.4 billion worth of investments, behind Singapore’s US$15.4 billion. Japan ranked fourth with US$4.6 billion.

In his campaign, Prabowo vowed continuity with outgoing president Joko Widodo’s programmes, including boosting China’s investments in Southeast Asia’s largest economy. That vow was delivered personally when he met Xi on Monday.

“Once again, I would like to emphasise that I would like to continue the policies of President Jokowi,” Prabowo told Xi, according to state news outlet CCTV, referring to Widodo’s nickname.

“I am determined to use all his achievements as a foundation for my programmes. I fully support a closer and higher quality relationship between [China] and Indonesia.”

But Beijing’s aggression in the South China Sea has caused skirmishes in the North Natuna Sea, which is internationally recognised as part of Indonesia’s exclusive economic zone but falls within China’s nine-dash line that claims more than 90 per cent of the resource-rich waters as theirs.

Prabowo’s Japan visit, however, indicates he may take a tougher line when Indonesia’s sovereignty is at stake, according to Nur Rachmat Yuliantoro, head of the international relations department at Gadjah Mada University in Yogyakarta.

“Japan is seen as the ‘strongest face’ of the defence alliance with the US in the region. Prabowo can use Japan to get closer to the US, win them over and, at the same time, put pressure on China,” he said.

Prabowo has long been seen as a close friend of Washington, despite his chequered human rights record earning him a ban on entering the US and Australia at the turn of the century. That ban was overturned after he was installed as defence minister in Widodo’s cabinet in 2019.

Lina of CSIS said it was a “smart move” by Beijing to quickly extend an invitation to Prabowo, making it the first country that the former general visited following his victory in February’s national polls.

“I think they know that Prabowo’s preferences are more towards Western countries, especially the US. If we look at his schedule after his inauguration [in October] as president, he has to attend the G20 summit in Rio de Janeiro [in November], after that he goes to Peru for the Apec summit,” Lina said.

“With a schedule like that, Prabowo will almost certainly stop by the US. China would be concerned if Prabowo’s first overseas trip as a president is to the US.”

China’s Communist Party finance organ draws institutional road map for sector

https://www.scmp.com/economy/china-economy/article/3257750/chinas-communist-party-finance-organ-draws-institutional-road-map-sector?utm_source=rss_feed

China’s 461-trillion-yuan (US$63.7 trillion) financial industry and its regulatory regime will be heavily prioritised in a broad economic reshuffle engendered by the country’s top leadership, with the sector remoulded to serve national objectives like sustainable growth and advancement in the global tech race.

The Central Financial Commission (CFC), a recently established regulatory body operating under the country’s Communist Party, laid out its vision for the field in an extensive article in the Study Times – media arm of the Central Party School, the national ideological training centre.

“China has cyclical and aggregate problems in its economic development, but structural problems are the most prominent, and the main contradiction lies on the supply side,” the article read. The piece was published on Wednesday and attributed to the CFC general office, headed by Vice-Premier He Lifeng.

“The key to promoting high-quality financial development is to deepen financial supply-side structural reform.”

China’s financial sector is expected to play an indispensable role in underwriting the country’s economic growth while defusing sources of systemic risk, like the flagging property market and debt-burdened local government financing vehicles.

The comments from the CFC follow a pronouncement from President Xi Jinping the country would become a “financial superpower” at the twice-a-decade central financial work conference in October, as well as further elaboration on what this would entail during a speech in January.

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

Government action soon followed, with cuts to pay in major banks, merger orders for smaller, riskier banks and a crackdown on unlicensed financial activities.

The CFC, designated to coordinate financial regulation and stave off risk in this endeavour, set broad goals for the sector in the article. These included a scientific, stable financial management system and a better-structured financial market.

“We must enhance the adaptability, competitiveness and inclusiveness of the financial system,” the commission said.

Specifically, it vowed to rein in Wall Street-style practices seen as unsustainable and crisis-prone, and move toward functionality as an overriding value for the financial system rather than profitability.

It also mandated that Chinese financial institutions have “higher efficiency” than their peers in the capitalist world and provide inclusive, accessible services in the pursuit of common prosperity.

“Like it or not, banks and other institutions on the supply side should expect top-down directives and overhauls cued by the CFC,” said Zhu Tian, a professor with the China Europe International Business School (CEIBS).

‘A whole new ball game’: China’s central bank looks to learn from US blunders

Use of the term “supply side” is reflective of Beijing’s prioritising financial institutions in its reform, he said.

“To adapt, their management and stakeholders should understand Beijing’s logic,” Zhu said. “Change is here, and old business and profit models may no longer apply. [They] may even land them in trouble.”

China now possesses the world’s largest banking sector, and its capital market ranks only behind the United States in terms of size. Banks, largely owned by governments at different levels, account for around 90 per cent of the country’s financial assets.

Despite the growing presence of foreign-funded players, their share in China’s banking industry is only around 1 per cent, while their proportion in bond and stock markets is estimated to be less than 3 per cent.

One potential outlet for structural change in the financial system could be its share of direct financing.

Hu Haifeng, a finance professor at Beijing Normal University, told Communist Party press arm People’s Daily last month the proportion of indirect financing remained too high when the current financial structure still favoured bank credit and loans.

“Reforms are long overdue to benefit the real economy,” Hu said.

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

Data from the People’s Bank of China, the central bank, showed direct financing including bonds and stocks represented 31 per cent of total social financing in 2023, with the remainder dominated by bank loans.

In the Study Times article, the CFC called for coordination and a holistic approach to reforms and management.

It demanded joint efforts from all levels of government – including financial regulators, economic and industrial planners, judicial authorities and disciplinary inspection agencies – as they all have “corresponding responsibilities.”

CEIBS’ Zhu said China’s financial players need to embrace these changes, including new responsibilities that fell outside their scope in the past, but more detailed measures should be rolled out to provide a clearer picture of what is expected of them.

“Financial reform narratives are usually laden with generalities but vague on specific, executable measures,” he added.

“Beijing’s focus should shift to ‘how’ after declaring ‘what’ it wants China’s financial sector to be.”

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