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• China’s consumer inflation edges down, but ‘upside’ around the corner: 4 takeaways from June
• Top American scientist warns China could soon overtake US in STEM leadership
• US, Mexico move to thwart China circumvention of steel, aluminium tariffs
• China and Bangladesh pledge to fight external interference and boost economic cooperation
• Cooking oil scandal may prompt China to tighten food safety policies, observers say
• With China’s homebuyers crying out for help, analysts say time is ripe for mortgage relief
• Microsoft defends iPhone-only order for China employees amid online backlash from patriots
• China dials up scrutiny of Big Four audit firms after Evergrande probe, sources say
• Apec business travel card holders can apply for new mainland China travel permit for Hongkongers
• China firm confines worker to ‘small dark room’ for 4 days with no power, computer or phone
• China rates Beijing-controlled Scarborough Shoal healthy in second reef report
• Mainland China travel permits a boon to Hong Kong business community
• PwC starts mass lay-off in China amid exodus of clients in the wake of Evergrande’s fraud
• Storm traps more than 130 people near Tibetan border with China and Nepal
• Premier faces China’s economic issues square on in meeting as inflation adds to pressures
• Why China ties will hold firm under Iran’s new reformist president
• Hong Kong to hold special lights show marking 75th anniversary of People’s Republic of China
• Man in China caught smuggling 100 live snakes in his trousers
• Britons spend on rollercoasters and beaches over DIY and clothes; China inflation slows – business live
• Rejection of US help in South China Sea shows Philippines acting on its own: analysts
• Can China’s development-based social contract withstand unemployment pressures?
• China to probe EU’s trade barriers
• China rebukes Philippines, denies blocking medical evacuation from Second Thomas Shoal
• China’s landfills brim with textile waste as fast fashion reigns and recycling takes a back seat
• Chinese community hit hardest amid Malaysia’s suicide surge
• China’s dormant job market inflames anxieties, simmering social tensions to surface
• China leads world in generative AI adoption, underscoring country’s progress
• China’s financial sector jobs seen losing their lustre as salaries tumble amid crackdown
• Cabbage trick stops China toddler going off rails on high-speed train
• South China Sea: despite clashes, Beijing and Manila must keep talking
• China’s consumer inflation falls short of expectations, but faster recovery expected
• China’s state-owned defence firms pledge to tackle corruption
• India races to build power plants in region claimed by China, which could add to tensions
• In global survey, people say China exerts economic influence on their country
• Why China’s gains from multipolarity have yet to outpace US dominance
• Singapore’s hell theme park featuring Chinese folklore is dead serious about the afterlife
• Official indictment of fallen Chinese defence minister Wei Fenghe may include coded hint he was compromised by hostile force
• Decline of US Students in China Means Fewer Experts

China’s consumer inflation edges down, but ‘upside’ around the corner: 4 takeaways from June

https://www.scmp.com/economy/economic-indicators/article/3269898/chinas-consumer-inflation-edges-down-upside-around-corner-4-takeaways-june?utm_source=rss_feed

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China’s consumer price index (CPI), a key gauge of inflation, grew in June by 0.2 per cent, year on year, edging down to a three-month low following an increase of 0.3 per cent in May, though the gauge remained in positive territory for the fifth consecutive month

The reading fell short of expectations, with analysts at Capital Economics pointing to deepening food-price deflation.

“Pork prices rose sharply, but the prices of fruits and vegetables both fell, which pulled down overall food inflation,” they said, adding that energy-price inflation also eased.

Non-food inflation continued to see drags from several categories, including vehicles, household appliances and communications devices, while rents also fell further into negative territory, said Lynn Song, chief economist for Greater China at ING.

Services inflation, meanwhile, saw its year-on-year growth pace slow to 0.7 per cent in June from 0.8 per cent in May.

On a month-by-month basis, China’s CPI remained negative by falling 0.2 per cent in June following a 0.1 per cent decrease in May, according to the NBS.

“Weak consumer confidence continues to drive consumption in the direction of seeking better value-for-money purchases, and competition in the [electric vehicle] sector continues to drive prices down, suppressing overall inflation,” said Song at ING.

China’s producer price index (PPI) – which measures the cost of goods at the factory gate – improved having fallen by 1.4 per cent in May to minus 0.8 per cent last month, hitting a 17-month high.

“PPI inflation showed a slightly more favourable read, with a smaller contraction,” said Song at ING.

But analysts at Capital Economics said the reading was “entirely due to base effects” as the gauge fell for the 21st consecutive month.

In month-on-month terms, factory-gate prices fell by 0.2 per cent in June, reversing May’s rise.

Capital Economics said the 0.7 per cent month-on-month fall in the output prices of consumer durables was the largest decline on record, with “a big factor” being the rapid fall in car prices.

China’s core inflation, which excludes volatile food and energy prices, rose by 0.6 per cent in June compared with a year earlier, with the reading unchanged from May.

Analysts at Capital Economics expect a slight uptick in CPI inflation over the coming months, but worsening overcapacity would keep it very low by global standards, they added.

“We still see some upside to inflation in the coming months given that the economy is in the midst of a cyclical recovery. However, the deepening decline in factory-gate prices of consumer durables underscores that excess manufacturing capacity remains a worsening issue.

“And government policy is still prioritising investment, which is set to exacerbate the problem further. This will continue to weigh on inflation, and we think CPI will rise just 0.5 per cent, year on year, this year.”

Song at ING expects producer prices, having remained in deflation since September 2022, to exit deflation in the second half of the year if the current trajectory holds.

“Moving forward, we expect inflation to trend gradually higher in the second half of the year. Recent data has indicated that this process could be a little slower than previously anticipated,” he said.

But soft inflation and weak credit data are still presenting a compelling case for further monetary-policy easing from the People’s Bank of China in the coming months, according to Song.

“The PBOC may prefer to first make another required-reserve-ratio (RRR) cut, but the February RRR cut showed this policy tool is seeing diminishing returns and effectiveness.

“We continue to see real interest rates as too high for the current state of the economy, and we believe the economy would benefit more from rate cuts. While we believe the PBOC has likely held back on cuts to avoid adding to yuan-depreciation pressure, we expect to see one to two rate cuts in the second half of the year, with a stronger case for cuts if the [US Federal Reserve] begins its rate-cut cycle.”

Top American scientist warns China could soon overtake US in STEM leadership

https://www.scmp.com/news/china/science/article/3269964/top-american-scientist-warns-china-could-soon-overtake-us-stem-leadership?utm_source=rss_feed

The US appears to be losing the race for global scientific leadership to China but could counter the trend by adapting to the emerging research environment and trying “new things”, according to a senior American science official.

Delivering last month’s inaugural State of the Science address in Washington, National Academy of Sciences (NAS) president Marcia McNutt said the US was still the world’s biggest investor in research and development, but it would not be long before China took over.

The US spent US$806 billion versus China’s US$668 billion on R&D in 2021, but China’s rate of investment was twice that of the United States, said McNutt, a geophysicist and the first woman president of the NAS since its establishment in 1863.

McNutt is also the first woman editor-in-chief of Science magazine, and was elected as a foreign member of the Chinese Academy of Sciences in 2019.

Since the end of World War II, the US had been “not just world-leading but world-dominating” in science and engineering, accounting for nearly 60 per cent of all Nobel Prizes ever awarded, she said.

Meanwhile, China has been catching up quickly in both the quantity and quality of papers published, while doubling the number of patents filed by the US in 2021. “This all suggests to me that there are very worrying trends.”

Various ranking methods, including those used by analytical institutions in the US, Britain and Japan, all suggest that China has surpassed the US in the number of most-cited papers, a key measure of research impact.

According to McNutt, the US has become “exceptionally dependent” on international students in science, technology, engineering and mathematics (STEM), including from China and India.

Foreign students not only outnumbered domestic students in American university graduate programmes, 65 per cent remained in the US for at least 10 years, maintaining the country’s STEM workforce, she said.

“We literally couldn’t fill our STEM jobs if it were not for these foreign students coming and staying in the US.”

However, as China’s R&D efforts have grown, US universities have seen a decline in the number of Chinese students in recent years. “International students have so many choices, and we are no longer a destination of choice,” McNutt said.

McNutt recommended protecting US leadership in science by strengthening its own K-12 STEM education and building a domestic scientific workforce for the future.

The tradition of having other nations – especially those in Asia – invest in their K-12 training and then “steal their students to come here” should be changed, she said.

According to McNutt, the US should also work on luring “the best and brightest talent” from around the world by reducing red tape for student visas. A top-down national research strategy was also critical to help coordinate R&D spending by government agencies and the private sector, she added.

Fan-Gang Zeng, an auditory scientist from the University of California, Irvine, said McNutt’s talk presented many good ideas, but implementing some of the recommendations would be challenging due to different goals or competing interests.

“Some may even be inherently incompatible, such as federal versus industrial support, domestic versus international students, and national security versus international collaboration,” Zeng wrote on his LinkedIn account.

US, Mexico move to thwart China circumvention of steel, aluminium tariffs

https://www.scmp.com/news/world/united-states-canada/article/3269976/us-mexico-move-thwart-china-circumvention-steel-aluminium-tariffs?utm_source=rss_feed

The US and Mexico on Wednesday announced new steps to fight the circumvention of US tariffs on steel and aluminium by China and other countries that ship products through Mexico, implementing a North American “melted and poured” standard for steel.

The election-season moves by President Joe Biden’s administration mark the latest in a series of efforts to guard against excess industrial capacity in China – which Washington has repeatedly warned could bring a flood of unfairly priced goods to other markets.

The White House said that under a new policy implemented by President Joe Biden, steel product imports from Mexico will be subject to 25 per cent US “Section 232” tariffs unless the steel is documented to have been melted and poured in Mexico, the US or Canada.

Similarly, for aluminium product imports from Mexico to escape the 10 per cent Section 232 tariffs, they must not contain primary aluminium that is smelt or cast in China, Russia, Belarus or Iran.

“These actions fix a major loophole that the previous administration failed to address, and that countries like China use to avoid US tariffs by shipping their products through Mexico,” White House National Economic Adviser Lael Brainard told reporters.

She charged that “Chinese steel and aluminium entering the US market through Mexico evades tariffs, undermines our investments and harms American workers in states like Pennsylvania and Ohio.”

Mexico has agreed to require importers of steel products across its borders to provide more information on the country of origin of these products, Biden and Mexican President Andres Manuel Lopez Obrador said in a joint statement.

“Both countries will implement policies to jointly prevent tariff evasion on steel and aluminium, and strengthen North American steel and aluminium supply chains,” the presidents said in the statement released by the White House.

Biden has courted the votes of union members and particularly the United Steelworkers in his bid for re-election in November, opposing a takeover by Japan’s Nippon Steel of Pittsburgh-based US Steel.

The new import requirements come amid increasing concerns about China’s excess industrial capacity flooding global markets with exports amid weak domestic demand. It comes after Biden in May hiked tariffs on a broad array of strategic goods from China, including steel and aluminium, electric vehicles, batteries, semiconductors and critical minerals.

But US officials have grown increasingly concerned that Mexico could become a back door for China into the US market, taking advantage of Mexico’s duty-free access through the North American trade pact.

Reuters reported in April that the US officials cautioned their Mexican counterparts against offering incentives to Chinese electric vehicle manufacturers that were scouting out potential factory sites in Mexico.

“These joint actions with Mexico will help to ensure the long-term viability of our steel and aluminium industries,” said US Trade Representative Katherine Tai.

Metal found to have Chinese origin would also be subject to 25 per cent Section 301 duties, a rate increased by Biden in May.

Volumes of steel imports from Mexico originating elsewhere were small in 2023, making up only about 13 per cent of the 3.8 million tons of steel imported from Mexico, according to US Census Bureau data. But a Biden administration official said the new requirements were “forward-looking,” meant to head off an expected surge of imports as China’s steel-consuming sectors such as real estate struggle.

The American Iron and Steel Institute, an industry group, applauded the step to close off an avenue for Chinese steel into the US market, but said its effectiveness depended on Mexico providing accurate information on the metals that it imports.

“We urge the US government to continue to press for additional actions to address the many schemes by steel traders to circumvent and evade US trade laws, and to ensure this new arrangement is vigorously and fully enforced,” the group said.

Biden and Lopez Obrador in their statement pledged more US-Mexico cooperation in coming weeks and months “to protect the North American steel and aluminium markets from unfair trade practices.”

China and Bangladesh pledge to fight external interference and boost economic cooperation

https://www.scmp.com/news/china/diplomacy/article/3269975/china-and-bangladesh-pledge-fight-external-interference-and-boost-economic-cooperation?utm_source=rss_feed

China and Bangladesh have pledged to deepen economic cooperation and fight foreign interference.

Chinese President Xi Jinping announced relations with Bangladesh would be upgraded to a comprehensive strategic partnership during the visit of Prime Minister Sheikh Hasina on Wednesday.

State broadcaster CCTV reported that Xi had said “China … is willing to take the 50th anniversary of the establishment of diplomatic relations next year as an opportunity to deepen high-quality joint construction of the Belt and Road Initiative, expand the breadth and depth of cooperation in various fields”.

He said: “The two sides should carry forward the fine tradition of mutual support and deepen political mutual trust. China supports Bangladesh in adhering to an independent foreign policy, following a development path that suits its national conditions … and opposing any external interference.”

Hasina is leading a delegation of political and business leaders on her first visit to the country since 2019.

She thanked China for supporting the country’s economic development, saying the country would “actively participate” in the Belt and Road Initiative, and welcomed China’s backing for the country’s plans to become a developed nation by 2041.

Hasina also reassured Xi over Taiwan – Beijing’s most sensitive issue – saying “Bangladesh firmly adheres to the one-China principle, supports China’s position on the Taiwan issue, and resolutely opposes external forces interfering in China’s internal affairs”.

She also met Premier Li Qiang, to witness the signing of more than 20 memorandums of understanding covering areas such as trade, the digital economy and infrastructure. They also announced that a feasibility study into a free-trade agreement had been completed.

On Tuesday she attended an investment summit in Beijing, where a further 16 MoUs were signed, including an agreement to develop digital payments between Bangladeshi financial service company Nagad and Huawei Technologies.

Li said China would always prioritise the development of relations with Bangladesh” and would back its firms in “strengthening industrial investment cooperation” and improving the security of supply chains.

“China is willing to strengthen communication and coordination with Bangladesh in multilateral fields, oppose hegemony and power politics, and better safeguard international fairness and justice and the common interests of developing countries,” he said, according to CCTV.

Bangladesh’s Foreign Minister Hasan Mahmud told the United News of Bangladesh that China has offered US$1 billion in economic assistance. The news agency also reported that Li had backed Bangladeshi participation in the Brics bloc of developing nations.

Bangladesh was the first South Asian nation to sign on the Belt and Road Initiative, Xi’s signature infrastructure scheme. Since 2016 it has helped fund the building of roads, bridges and power projects in Bangladesh and, according to Chinese ambassador Yao Wen, the country had received US$1.4 billion of Chinese investment by the end of last year.

But the scale of China’s loans to the debt-ridden country – which have passed US$5 billion according to the Daily Star newspaper – have raised fears that the country will be caught in a “debt trap” and struggle to repay them.

On Tuesday, Hasina met Jin Liqun, president of the Asia Infrastructure Investment Bank, to ask for the country’s interest payments to be reduced.

In addition, before the visit Mahmud had said the country, which is facing a shortage of foreign currency reserves, would seek a further US$5 billion in loans from China.

There has been no immediate response from China to the requests.

China’s growing influence in the region has caused concern in India, leaving Bangladesh trying to strike a balance between the two rivals, prompting Hasina to visit the country twice last month.

Separately on Tuesday, she met Wang Huning, the No. 4 in China’s political hierarchy, to ask for help in repatriating Rohingya refugees back to Myanmar, according to the Daily Star.

Nearly one million of Rohingyas have been living in Bangladesh since they were forced to flee a violent crackdown in 2017, according to the United Nations Refugee Agency.

Wang told Hasina that China will make the “highest efforts” to resolve the issue, including talks with Myanmar’s ruling junta.

Cooking oil scandal may prompt China to tighten food safety policies, observers say

https://www.scmp.com/news/china/politics/article/3269969/cooking-oil-scandal-may-prompt-china-tighten-food-safety-policies-observers-say?utm_source=rss_feed

Allegations that Chinese companies have been using the same trucks to transport fuel and cooking oil are likely to be raised at a key political meeting next week and could prompt Beijing to tighten food safety policies, observers say.

An investigative report by state-backed Beijing News last week said the tankers were being used for both fuel and food products like cooking oil, soybean oil and syrup. It said it was an “open secret” that the tankers did not get cleaned between deliveries to save costs.

The report has sparked widespread public concern and calls for more oversight of the industry, and on Tuesday China’s cabinet, the State Council, set up a team to investigate the allegations.

Observers say Beijing does not appear to be trying to cover up the scandal, even though it has emerged at a politically sensitive time ahead of the third plenum of the Communist Party’s Central Committee, which starts on Monday.

There has been limited censorship around the report, which implicated a subsidiary of state-owned stockpiler Sinograin and private firm the Hopefull Grain and Oil Group. Both companies have launched their own investigations.

As well as a public outcry on social media, the report has prompted harsh criticism from state media over the alleged wrongdoing.

Wang Xiangwei, an associate professor at Hong Kong Baptist University’s School of Communication, said Beijing appeared to have taken the attitude of “facing this problem head-on”.

“China’s internet users have been able to make sarcastic comments on the scandal so far. Meanwhile, the State Council also took immediate action to assemble a joint inspection team to tackle it,” said Wang, a former editor-in-chief of the South China Morning Post.

“It all seems to indicate that they want to turn the scandal into an opportunity for the party to live up to Xi’s famous command: the party’s mission is to meet people’s desire for a happy life.”

President Xi Jinping has repeatedly vowed to tackle China’s notorious food safety problems. In a 2013 speech, he said his heart “became very heavy” when he thought of these issues, and warned that the party’s legitimacy to rule would be questioned if it “cannot even do a good job in food safety”.

One political analyst based in mainland China said given the latest scandal, food safety was likely to be raised when the party’s Central Committee holds its third plenum from Monday, and it could be mentioned in the “resolution document” released after the meeting.

“Discussions including on reform will certainly include this topic as it’s the most crucial and important issue concerning people’s lives,” said the analyst, who spoke on condition of anonymity.

He said the scandal would highlight the need to strengthen regulatory supervision and it could also have an impact on related Chinese exports and how they are transported.

Xie Maosong, a senior researcher at the National Institute of Strategic Studies at Tsinghua University in Beijing, agreed that food safety could get “a higher priority” in the final communique of the third plenum.

Meanwhile, the report that exposed the alleged malpractice shows that “media oversight is indispensable in any country, especially in contemporary China”, according to Zhan Jiang, who was a journalism professor at Beijing Foreign Studies University before he retired.

He said it could lead to a shift in the official mindset “that views media reporting on social issues and negative reports as disruptive and affecting stability”.

Investigative reporters have uncovered multiple food and drug safety scandals in China in recent decades, including milk formula being tainted with the chemical melamine which resulted in the deaths of six infants.

But their work has become increasingly difficult as Beijing has continued to tighten control over the media.

Wang from Baptist University said the Beijing News report had uncovered a major scandal and “demonstrated that investigative journalism on the mainland is not dead … despite the political climate”.

With China’s homebuyers crying out for help, analysts say time is ripe for mortgage relief

https://www.scmp.com/economy/china-economy/article/3269921/chinas-homebuyers-crying-out-help-analysts-say-time-ripe-mortgage-relief?utm_source=rss_feed

China’s central bank should take an active role in reducing the financial burden of hundreds of millions of homeowners, and the government should step in to provide affordable housing to migrant workers – actions which would both serve to release much-needed consumer demand, a former government researcher has said.

Many residents in China are still paying hefty interest on their mortgages because they bought their homes when prices were high, said Zhou Tianyong, a professor with the Dongbei University of Finance and Economics and a former senior researcher with the Central Party School in Beijing.

“The central bank could introduce monetary policy to reduce interest rates on existing loans for hundreds of millions of residents who bought homes at high prices,” said Zhou in a post on his WeChat account on Tuesday.

“It is possible that the previous generation won’t be able to repay it, and the next generation will now have to pay. This may not be in line with the [government’s] people-centred approach,” Zhou said.

The academic estimated that homebuyers had to pay a cumulative 5.74 trillion yuan (US$789 billion) in interest on their mortgages, and – after factoring in the allocation of extra income to cover high housing costs in addition to interest – 41 trillion yuan of consumption was lost between 2000 and 2023.

Zhou also urged central and local governments to provide affordable housing for migrant workers, including college and technical school graduates with rural household registration looking for jobs in cities.

This, he said, would lower the costs of moving and urban living for the rural population, and would in turn help boost the labour force as well as their overall income – seen as essential in stabilising China’s future economic growth.

Zhou has joined a growing chorus of analysts who have argued homeowners who bought their houses at peak pricing are less inclined to benefit from easing measures introduced last year.

Last week, a commentary in the state-run Economic Observer questioned the “fairness” of the current policy. First-time homeowners in Beijing, for instance, who took out a mortgage in 2019 had to pay 4.75 per cent on their loans compared to 3.5 per cent if they had bought a house this year.

Several local governments have intensified their efforts to shore up demand in the beleaguered property market by cutting minimum ratios for down payment.

The discussions around lower mortgage costs revolve around whether Chinese banks should conduct a new round of discounts for existing mortgage loans, said Vivian Xue, director of Asia-Pacific financial institution ratings at Fitch Ratings.

According to data from the Shanghai-based E-House Real Estate Research Institute, the average mortgage rate in the country’s financial centre fell to 4.1 per cent for first-time buyers from 4.55 per cent last year, following the start of mortgage relaxations.

Yan Yuejin, research director at the institute, said in some cases rates could be as high as 6 per cent, prompting a need for renegotiation with banks.

“[Expert] voices reflect certain opinions from the public, given their considerations on current economic conditions,” Yan said.

“The banks won’t be willing to cut mortgage rates voluntarily. But they might also face rising risk of default, so the banks will have to balance their need to maintain profits as well as the security of the loans.”

However, Xue at Fitch Ratings said a mandatory, blanket rate reduction across all outstanding residential mortgages is less likely because it might add more pressure on banks’ net interest margin (NIM), a major gauge of profitability.

Home mortgages accounted for around 15 per cent of the banking sector’s loan portfolio at the end of the first quarter this year, Xue said.

“The authorities have publicly conveyed their concerns about the current low level of Chinese banks’ NIM, and highlighted the importance of maintaining a reasonable NIM and profitability for banks to ensure a robust capital buffer through economic cycles.”

Microsoft defends iPhone-only order for China employees amid online backlash from patriots

https://www.scmp.com/tech/big-tech/article/3269940/microsoft-defends-iphone-only-order-china-employees-amid-online-backlash-patriots?utm_source=rss_feed

Microsoft defended its request for all mainland China-based employees to use iPhones at work, saying it is necessary due to the absence of Google’s Android services there, after the decision triggered speculation over the company’s intent.

As part of its global cybersecurity initiative to fend off worldwide hackers, the US tech giant has started requiring all employees in mainland China to verify their identities through the Microsoft Authenticator password manager and Identity Pass apps, available on Apple’s App Store and Google Play only.

Microsoft plans to offer Apple’s iOS devices to employees so they can access those apps because of the “lack of availability of Google Mobile Services in this region”, a company representative said on Tuesday.

Google Mobile Services – a collection of Google apps and other tools, such as Play, Search, YouTube and Gmail – are blocked in mainland China.

Microsoft employees in the country who are currently using Android handsets will be given an iPhone 15, according to Bloomberg, which first reported the news on Monday.

The move by Microsoft shows the challenges faced by multinational companies when operating in a global technology sphere divided between US and Chinese systems.

Google pulled its search engine out of mainland China in 2010 after it refused to follow domestic censorship regulations. Since then, users of Android devices in the country cannot access the vast majority of Google services, relying instead on domestic alternatives, including app stores run by local companies.

Microsoft, on the other hand, has been operating in the country since 1992, providing access to its 365 Office suite, search engine Bing and Azure cloud computing services, while adapting to Beijing’s growing regulatory demand over data security, as well as intensifying competition with local rivals.

At home, Microsoft is contending with growing political scrutiny amid rising US-China tensions.

Microsoft president Brad Smith was questioned by American lawmakers last month over how the company can safeguard US national security while still involved in China’s tech development.

The executive said China accounts for just 1.5 per cent of Microsoft’s global revenue, and confirmed that the company is offering 700 to 800 mainland-based employees working on artificial intelligence to relocate to other markets.

While Microsoft maintained that its switch to iOS devices is based on practical reasons, it still caused an uproar among patriotic Chinese social media users who favour local brands.

A Weibo post describing Microsoft’s new rules has drawn 27,000 comments, with one user commenting that the company has set a precedent for foreign firms to ban the internal use of Chinese Android smartphones.

Another user questioned Microsoft’s decision, suggesting that the company should consider HarmonyOS, an Android alternative developed by Huawei Technologies.

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China dials up scrutiny of Big Four audit firms after Evergrande probe, sources say

https://www.scmp.com/business/banking-finance/article/3269957/china-dials-scrutiny-big-four-audit-firms-after-evergrande-probe-sources-say?utm_source=rss_feed

China’s Ministry of Finance is conducting more rigorous checks of work done by the Big Four auditing firms for local companies, three people with knowledge of the matter said, amid concerns auditors are not doing enough to uncover corporate wrongdoing.

The tighter scrutiny, which has not been previously reported, is mainly focused on Deloitte, EY, PwC, KPMG and their audits of some financial firms as well as highly leveraged companies, said the people.

It began a couple of months ago and comes in the wake of a regulatory probe into “intermediaries” for property giant China Evergrande Group, which refers to auditors, rating agencies and other providers of financial services.

Evergrande, which defaulted on its debt and has been ordered into liquidation, was found by authorities to have inflated its revenue by US$78 billion.

It is only one of scores of property developers to have defaulted on debt – a crisis that has hobbled economic growth and triggered concerns about just how much exposure financial firms have to the sector. Chinese regulators this month pledged a clampdown on financial fraud, seeking to restore confidence in country’s struggling stock markets.

The finance ministry makes routine checks of audits done by the Big Four but this year it has demanded far more documents than previously and the number of queries the audit firms have had to field has jumped, the people said.

According to two of the sources, the ministry is particularly interested in audits of small and weak lenders from debt-laden Chinese provinces.

Audits of Chinese asset management companies are also under the microscope, said one source. Audits for highly leveraged state-owned enterprises and property developers are also being scrutinised, the second person said.

All sources, two of whom had direct knowledge of the scrutiny, declined to be identified due to the sensitivity of the matter.

PwC declined to comment. The Ministry of Finance, Deloitte, EY and KPMG did not respond to Reuters requests for comment.

The Big Four firms have built up a substantial presence in China over the last couple of decades as Chinese companies set their sights on listing in Hong Kong and overseas and as the world’s second-largest economy became more open to foreign investors.

But the problems at Evergrande have highlighted failures on the part of auditors “to catch … issues before it’s too late,” said Francine McKenna, founder of accounting and auditing newsletter The Dig.

“The Ministry of Finance is rightfully concerned about whether China’s financial services firms are vulnerable to the ongoing issues in the real estate sector,” she said.

She added that regulators are probably keen to know if audit firms have captured the true picture about concerns such as bad loan exposure and the extent of leverage at their client companies.

PwC is facing a record fine of at least 1 billion yuan (US$138 million) due to failings in auditing Evergrande, Bloomberg reported in May.

One of the sources said the fine was still being finalised and is not likely to be announced this month.

Even before the spotlight fell on PwC’s work for Evergrande, Deloitte was fined $30.8 million last year by Chinese authorities for failing to perform its duty in assessing asset quality at China Huarong Asset Management.

Huarong failed to release its 2020 earnings on time, eventually reporting a huge loss. It then had to submit to a government-led restructuring that saw noncore businesses sold.

Apec business travel card holders can apply for new mainland China travel permit for Hongkongers

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3269962/apec-business-travel-card-holders-can-apply-new-mainland-china-travel-permit-hongkongers?utm_source=rss_feed

Apec business travel card holders can apply for a new five-year mainland China travel permit for non-Chinese Hong Kong permanent residents, the chairman of the agency handling applications has clarified.

Confusion over their eligibility arose after notices posted at the service counters at the Mong Kok and Tuen Mun centres of China Travel Service (Hong Kong) (CTS) on Wednesday informed people that if they applied for the new permit, their other forms of mainland visas would be cancelled. Those holding Apec business travel cards were not eligible for the new permit, the notices said.

But CTS Hong Kong chairman Perry Yiu Pak-leung later clarified that those with valid Apec business travel cards could apply, according to his understanding.

“It is OK for Apec business travel card holders to apply for the new permit. All they need to do is bring all three documents required, including a valid passport, Hong Kong ID card and the document issued by the Immigration Department,” Yiu said.

He was referring to a “Notice of Application for Access to Information” stating their Hong Kong permanent resident status and nationality information.

“The goal of the new permit is to facilitate their return to the mainland and reduce their inconvenience,” he said.

The new five-year permit allows non-Chinese nationals with permanent residency in Hong Kong and Macau to enter the mainland multiple times for purposes such as visiting relatives, tourism, business, seminars and exchanges, up to 90 days each stay.

They can also enjoy self-service clearance at control checkpoints once they have their fingerprints taken at ports of entry.

The Apec business travel card scheme is intended to make it easier for businesspeople to move among Asia-Pacific Economic Cooperation countries, according to the Immigration Department.

Once all economies make a pre-clearance decision, the applicant will be issued a listing of the approved travel destinations. Each economy manages its own pre-clearance application.

The card, valid for five years, is good for multiple visits of two to three months each to 19 participating economies, without the need to obtain a visa if pre-clearance has been granted.

Participating countries include China, Singapore, Japan, South Korea, Australia and Russia, and among others.

Foreigners with valid passports and with China listed on the back of the card can enter the mainland without a visa and stay for up to 60 days, according to the National Immigration Administration.

To qualify for a card in Hong Kong, a businessperson must have a valid national passport and a Hong Kong permanent ID card without a record of entry denial or criminal conviction and must be actively involved in trade, services or investment activities, excluding entertainers, musicians, artists or similar professions.

A supporting letter from the applicant’s employing company is also required.

Johannes Hack, president of the German Chamber of Commerce in Hong Kong, said Apec business travel cards were very popular among the city’s permanent residents in the business community.

But he added it was “less practical” than the new five-year permit for entering the mainland as Apec card holders were unable to use e-channels for clearance.

China firm confines worker to ‘small dark room’ for 4 days with no power, computer or phone

https://www.scmp.com/news/people-culture/trending-china/article/3269623/china-firm-confines-worker-small-dark-room-4-days-no-power-computer-or-phone?utm_source=rss_feed

A bitter labour dispute in China has seen a company confine an employee to “small dark room” for four days in a draconian bid to make him resign.

In an unusual twist, the incident came to light not via the employee but the company, Guangzhou Duoyi Network Co., Ltd after they challenged a court ruling on the case.

The firm published the full court document on its official Weibo account, openly disagreeing with a ruling made in May by a district-level court in Sichuan Province, southwestern China.

The court decided that Guangzhou Duoyi Network’s subsidiary in Sichuan should pay the employee, Liu Linzhu, 380,000 yuan (US$52,000) in compensation for their actions.

However, the company responded by saying: “We believe that there are many problems with the labour laws which severely hinder economic development and are arbitrarily enforced by judges who distort the facts.”

The court’s official website has not yet made records of the trial public.

Liu’s lawyer confirmed the authenticity of the published court document with Shangyou News, a municipal government-owned newspaper.

The story began to unfold in December 2022 when Liu found that he could not log into the company’s computer system or use his entry pass.

This happened following protracted negotiations over his resignation.

The firm told Liu he was required to participate in “training” and took him to a room of a different floor from his usual work station.

The room was completely dark because there was no power supply.

It was devoid of colleagues and computers, and was furnished only with a table and chair.

Over a four-day period, although Liu was allowed to leave the room “freely”, including going home after “work”, he was assigned no tasks and his mobile phone was confiscated.

It was only on day five, after Liu’s wife reported the company’s treatment of her husband to the police, that an official notice laying him off was issued.

In a bid to avoid paying compensation, Guangzhou Duoyi Network insisted the lay-off was because Liu had violated company policies.

He was accused of viewing nude images and browsing unrelated websites during working hours.

However, as a game art editor, Liu argued that the images he viewed were for work purposes.

The lower court agreed with Liu.

It ruled that confining Liu to the dark room was illegal under Labour Contract Law, which mandates employers provide proper working conditions for employees.

The company have made no further comment on the case, while online observers largely supported the court’s decision.

They also expressed astonishment at the company’s strict regulations prohibiting employees from carrying mobile phones at work, communicating privately among themselves or engaging in social activities together after work.

“You are the only company I have seen that dares to place your own policies above the labour laws,” one person commented under the company’s Weibo post, attracting more than 4,000 likes.

“Who else would dare to work at this company now?” said another person.

It is not the first time the company also has found itself in hot water.

In 2020 the firm’s chief executive officer, Xu Bo, said in a statement: “This year the company has performed well, with significant profit growth.

“The company has decided to allow employees to voluntarily apply for a 10 per cent reduction in their monthly salary.”

Several employees told the mainland publication Hongxing News that the so-called “voluntary pay cut” was actually a test of obedience and loyalty.

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China rates Beijing-controlled Scarborough Shoal healthy in second reef report

https://www.scmp.com/news/china/diplomacy/article/3269890/china-rates-beijing-controlled-scarborough-shoal-healthy-second-reef-report?utm_source=rss_feed

A Chinese investigation into the marine conditions at Scarborough Shoal has found the area in good health – in stark contrast to an earlier evaluation this week of Second Thomas Shoal, another flashpoint between Manila and Beijing in the South China Sea.

According to Chinese state broadcaster CCTV, a “comprehensive” examination of the ecological environment surrounding Scarborough Shoal – known as Hanyang Island in China – determined that the environmental quality of its waters was “excellent”.

Scarborough Shoal is claimed by both Beijing and Manila and has been effectively controlled by China since an intense stand-off in 2012. Filipino fishermen have been barred by the Chinese coastguard from entering the lagoon ever since.

The latest investigation’s results were unveiled on Wednesday at a briefing by the Ministry of Ecology and Environment. The investigating team was formed from three of the ministry’s agencies.

The team conducted a “systematic on-site investigation” from May to June, covering seawater quality, biological quality and marine debris, as well as coral communities. Satellite remote sensing technology was also used in the analysis, CCTV said.

Residues of pollutants were found to be below the evaluation standard limits, the coral reef ecosystem was “healthy”, and the diversity of reef-building coral species was said to be “rich”.

According to the CCTV report, this is the first time a Chinese investigation team has determined pollution levels of marine debris around Scarborough Shoal and the status of reef-dwelling fish there.

The positive findings contrasted with a Ministry of Natural Resources report released on Monday, which said a grounded Philippine warship at another disputed shoal had “seriously damaged the diversity, stability and sustainability of the coral reef ecosystems”.

The earlier report found the BRP Sierra Madre – grounded in 1999 by the Philippines to serve as an outpost in the disputed waters – had caused serious harm at Second Thomas Shoal, called Renai Reef in China and Ayungin Shoal in the Philippines, and must be removed to stop the damage.

Chief scientist Xiong Xiaofei from the South China Sea Ecological Centre, which operates under the ministry’s auspices, told state media that “only by eliminating the source of pollution can we avoid continuing and cumulative harm to the Renai Reef … ecosystem”.

The Chinese assessment – based on satellite sensing technology and on-the-spot studies from April to June – found severe destruction of coral cover, heavy metal contamination, active phosphate and oil pollution at Second Thomas Shoal.

Contaminants, which included human waste such as fishing nets, were found especially in the waters surrounding the Sierra Madre, according to the report.

Manila on Tuesday rejected the accusation, accusing “Chinese experts” of trying to sow disinformation and calling for an independent third-party marine scientific assessment of the causes of coral reef damage in the South China Sea.

The Philippines has previously said that it plans to file a formal complaint against the Chinese government, citing environmental damage to coral in several areas of the South China Sea.

The Chinese reports have landed at a time of heightened tensions between the two countries in the South China Sea, which is claimed almost in its entirety by Beijing. There are also overlapping claims by the Philippines, Brunei, Malaysia and Vietnam.

Beijing and Manila have clashed several times in the past year over Philippine resupply efforts to the Sierra Madre outpost.

One of the most serious confrontations occurred on June 17, when a Chinese coastguard vessel rammed a Philippine resupply ship, injuring eight Philippine sailors, including one who lost his thumb, according to Manila.

China has dismissed the Philippines’ account, countering that the Philippine vessels attacked Chinese boats.

Mainland China travel permits a boon to Hong Kong business community

https://www.scmp.com/opinion/hong-kong-opinion/article/3269773/mainland-china-travel-permits-boon-hong-kong-business-community?utm_source=rss_feed

Today marks a historic moment for Hong Kong. A new, long-awaited visa-free scheme takes effect, ensuring seamless travel for non-Chinese permanent residents in Hong Kong and Macau to the mainland.

Announced on July 1, the 27th anniversary of the establishment of the Hong Kong Special Administrative Region, these non-Chinese permanent residents can apply for a mainland China travel permit with validity of five years, during which they can make multiple visits to the mainland of up to 90 days each for both business and leisure.

This is an excellent move that will bolster both cross-border travel and commercial activity. In addition, it will signal the country’s determination for Hong Kong to continue to serve as an international hub under the “one country, two systems” framework. It demonstrates that the central government and the Hong Kong government are working together to enhance this framework to bolster the city’s international appeal.

As someone who was born in Hong Kong and has lived abroad, I have benefited from our city’s international openness, dynamic multinationalism and flourishing business community.

Many of my friends hail from non-Chinese families who settled here several generations ago and built their bases here, and they passionately identify with this city as their home. One area that is often highlighted to boost cross-border travel is clearance at immigration checkpoints.

With our unique East-meets-West cultural ambience, recreation and dining scene in Hong Kong, we are well-placed to help non-Chinese residents acclimatise to and cultivate deeper contextual expertise on China. Our institutional distinctiveness, common law jurisdiction and quality of life for expatriate workers are all conducive to attracting talented people, capital and firms to Hong Kong.

All these strengths exist on top of the city’s Top Talent Pass Scheme, introduced in late 2022, which has received more than 72,000 applications, among which some 60,000 have been approved. The relaxation of cross-border travel adds to a highly competitive offer for global talent, forming a pathway for these people to capitalise on their expertise and contribute to the development of Hong Kong and beyond.

For leading international firms looking to deepen their trade and knowledge exchange with mainland China, they can tap into Hong Kong as a premier hub for their management and regional executives. The international business community, which includes the American Chamber of Commerce, the European Chamber of Commerce and many others, has voiced its support for Hong Kong’s new business-friendly scheme.

The more interconnectivity there is between Hong Kong and the rest of the Greater Bay Area, the better. Creating easier cross-border travel and greater intensity and volume of people-to-people exchanges is conducive to the deepening of mutual understanding and appreciation between the Chinese people and their friends. Hong Kong can capitalise on this opportunity to attract talented people from Southeast Asia and beyond.

Many friends from Southeast Asia who have lived here in Hong Kong for decades shared their delight with me after reading the news of the visa-free scheme. They see it as a recognition of their contributions towards China’s growth trajectory for years to come. With the new scheme, these overseas friends can now enjoy the international lifestyle in Hong Kong while carrying out their business seamlessly in mainland China.

It is not only the added convenience that they cherish but also the sense of togetherness. In playing their role in serving and building up the resilience of Hong Kong, they are also collectively leaving a positive mark on China’s opening-up to the world at large.

Hong Kong must capitalise on this opportunity and formulate more measures to attract talented people from Southeast Asia to Hong Kong, an ideal gateway into the mainland.

Businesses across a wide range of industries can engage and collaborate with their counterparts in the region to devise exchanges and programmes to tap into the talent pool. Together, they can form ecosystems covering talent development, in collaboration with overseas and regional partners.

The government could also consider opening the door wider, for instance, by adding top-tier universities in Southeast Asian countries and their graduates to the eligibility list for the Top Talent Pass Scheme.

In the current geopolitical climate of competition and friendshoring, enacting the visa-free mainland travel scheme is a wise move by the central government and Hong Kong’s administration. It adds value to both Hong Kong’s attractiveness as an international hub and shows the world that China knows how to use the one country, two systems framework to secure added value for both Hong Kong and the mainland.

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PwC starts mass lay-off in China amid exodus of clients in the wake of Evergrande’s fraud

https://www.scmp.com/business/article/3269917/pwc-starts-mass-lay-china-amid-exodus-clients-wake-evergrandes-fraud?utm_source=rss_feed

PricewaterhouseCoopers is cutting staff across its China operations, according to people familiar with the matter, after an exodus of corporate clients diminished the accounting firm’s revenue prospects in the country.

At least 100 staffers from different teams at PwC China’s offices in Beijing, Shanghai and other locations are being let go, the people said, asking not to be identified discussing private matters. More than half of one team was laid off, according to one of the people. The final tally of firmwide cuts wasn’t immediately clear.

“In light of changes to the external environment, we are making some adjustments to better optimise our organisational structure to align with market demand,” a PwC spokesperson said in response to a query from Bloomberg News. The firm did not provide details on the number of staffers who were cut.

“These adjustments are a difficult decision. We are actively communicating with our people and will ensure that the plan is in compliance with all relevant labour laws in China,” the spokesperson added.

Before the latest round of lay-offs, the threat of regulatory penalties and the loss of Chinese corporate clients had unnerved PwC China staffers and prompted some to seek opportunities elsewhere, Bloomberg reported last week. Partners at other major international and domestic accounting firms received dozens of job inquiries from their peers at PwC, people familiar with the matter had said.

More than 30 publicly listed companies based in mainland China, including state-owned giants PetroChina, China Life Insurance and Bank of China, have dropped PwC as their auditor this year. Most of the changes happened after the firm came under scrutiny for its role in an alleged accounting fraud at property developer China Evergrande Group.

Regulators have been examining PwC’s role in its accounting services for Evergrande, after the developer was accused of inflating its revenue by US$78 billion from 2019 to 2020. The China Securities Regulatory Commission had vowed further probes into “intermediary agencies” involved in the case.

Authorities are weighing a record fine of at least 1 billion yuan (US$138 million) on PwC and could suspend some of its onshore operations, Bloomberg News reported in May.

PwC’s onshore arm, PricewaterhouseCoopers Zhong Tian, had 291 partners and more than 1,700 accountants in mainland China at the end of last year, according to regulatory filings. The firm was the top earner among accounting firms in mainland China in 2022, and reported 7.9 billion yuan of revenue that year, according to official data. It audited roughly 400 Chinese firms listed in Shanghai, Shenzhen, Hong Kong or New York.

PwC earlier this month appointed Daniel Li, a Shanghai-based partner, as its new Asia-Pacific and China chair. The firm said he is the first leader from mainland China to hold that position.

The auditor has run into trouble in other jurisdictions. In Hong Kong, the city’s accounting regulator has been investigating the audits of Evergrande’s financial statements, and more recently said it was looking into allegations over PwC’s role following a “whistle-blower report” about the accounting firm.

The accounting firm also pledged earlier to boost governance controls in Australia over questions of a serious conflict of interest in leaking government tax plans to its clients. Its UK network was separately fined £5.6 million (US$7.2 million) for failures in auditing Babcock International Group.

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Storm traps more than 130 people near Tibetan border with China and Nepal

https://www.scmp.com/news/china/science/article/3269934/storm-traps-more-130-people-near-tibetan-border-china-and-nepal?utm_source=rss_feed

More than 130 people, including tourists, were trapped in Tibet, near China’s border with Nepal.

Heavy rain triggered floods and landslides, washing away road links.

An evacuation operation was under way as rescuers and tourists had to hike up a mountain to relative safety.

Premier faces China’s economic issues square on in meeting as inflation adds to pressures

https://www.scmp.com/economy/china-economy/article/3269922/premier-faces-chinas-economic-issues-square-meeting-inflation-adds-pressures?utm_source=rss_feed

Premier Li Qiang struck a positive tone on the state of China’s economy in a meeting with business leaders and economists, while also cautioning heightened complexities choking growth, as inflation data added to persistent pressures.

Stressing that China’s economy was in “stable operation”, Li admitted that factors affecting growth are “more complex than before” and that the difficulties needed to be resolved with greater efforts.

“We must candidly analyse the situation and not avoid the problems so as to accurately grasp the situation and make scientific policy decisions,” the premier said during the symposium in Beijing on Tuesday.

The world’s second-largest economy continues to grapple with an uneven recovery, but Li and other top leaders have tipped stable growth in the first half of the year and said that the around 5 per cent annual growth objective was attainable.

Beijing is trying to whip up more positivity in the lead-up to the reform and economy-centric third plenum slated to be convened next week, but the upbeat official portrayal of the economy is marred by poor demand and confidence, which has been further compounded by weak inflation.

China’s consumer price index (CPI) edged down to a three-month low in June after growing by a paltry 0.2 per cent year on year, compared to an increase of 0.3 per cent in May, the National Bureau of Statistics said on Wednesday.

The producer price index – which measures the cost of goods at the factory gate – dipped 0.8 per cent last month, falling for the 21st straight month, although the reading represented a 17-month high.

Amid uncertainties, consumers and businesses are seen unwilling to spend due to a prolonged property slump and a bleak jobs market, with the CPI having stagnated around zero since April 2023, in contrast to Beijing’s annual target of around 3 per cent.

At the meeting on Tuesday, Li said efforts must be dialled up to tackle the “troubles” in economic operation and that scientific decisions must be based on a factual diagnosis of the situation.

He also urged solid implementation of macro policies to unleash their effectiveness to promote development, while giving full support to the role of enterprises, who can expect targeted policy support to be further strengthened to bring about tech and innovation breakthroughs.

Echoing President Xi Jinping’s vows in a rare dialogue with business leaders in May, the premier also urged “unreasonable systems and mechanisms” to be reformed to boost enthusiasm, initiative and creativity of all entities.

The attendees at Tuesday’s meeting included the heads of state-owned enterprises and private entrepreneurs, including tech start-up founders, and economists.

A Beijing-based scholar said the Chinese economy was set to grow by 5 per cent or slightly higher this year, but that the premier’s remarks were proof that his attention was on the complexities and deeply-entrenched problems.

“The premier has admitted to these challenges in a face-to-face meeting with business representatives and experts, not to cadres,” said the scholar, who spoke on the condition of anonymity due to the sensitivity of the issue.

“This is a gesture by Li, who is tasked by Xi to run the economy, to assure entrepreneurs that he knows their difficulties and complaints.

“Compared with Xi’s remarks in the May meeting, Li’s words are more reflective of the headwinds and problems.

“It’s a bid to reassure businesses that their hardship is not ignored, a bid to restore confidence as the premier will face the issues squarely.”

The scholar added that with the recent exchanges with the business community before the third plenum, expectations for reform policies and implementation had been raised.

Peng Peng, executive chairman of the Guangdong Society of Reform think tank in Guangzhou, also said the top leadership was keenly aware of challenges and expectations.

“As we head into the second half of the year, stakes are high as we anticipate the third plenum to come up with strong reform measures and effective economic policies,” said Peng.

“Although the economy remains on a growth trajectory, the consumption sector is not optimistic. This is not only reflected in the weak growth of retail sales but also in the sluggish CPI.

“The fact is that residents are saving rather than spending under pessimistic expectations for employment, income and business profitability. It even puts pressure on achieving the annual growth target.”

Why China ties will hold firm under Iran’s new reformist president

https://www.scmp.com/news/china/diplomacy/article/3269761/why-china-ties-will-hold-firm-under-irans-new-reformist-president?utm_source=rss_feed

Iran’s incoming reformist president was not likely to fundamentally change the Islamic Republic’s foreign policy towards Beijing, observers said, citing his limited powers and Tehran’s economic and geopolitical dependence on Beijing.

Masoud Pezeshkian defeated hardcore conservative Saeed Jalili in a presidential run-off election on Saturday, held after no candidate secured a majority in the first round on June 28. He will replace the late ultraconservative Ebrahim Raisi, who was killed in a helicopter crash in May.

Chinese President Xi Jinping sent Pezeshkian a congratulatory message on Saturday, vowing deeper connections in the face of “complex landscapes”.

According to the Chinese foreign ministry, Xi said he attached great importance to the development of bilateral relations and was willing to work with Pezeshkian to “guide the deepening of the comprehensive strategic partnership”.

“In the face of the complex regional and international landscapes, China and Iran have always supported each other … and maintained sound communication and coordination on regional and international affairs.

“It has not only benefited the two peoples but also made positive contributions to promoting regional and world peace and stability,” Xi was quoted as saying.

The presidency of Pezeshkian, who has called for “constructive relations” with the West, is expected to be marked by a shift to a more liberal, pro-Western stance, in contrast to the hawkish US policy of his hardline predecessor.

However, Tehran’s China policy is unlikely to change, according to Fan Hongda, a professor at the Shanghai International Studies University’s Middle East Studies Institute.

This was because Iran’s supreme leader, Ayatollah Ali Khamenei, had the final say in its foreign policy, said Fan, who was in Tehran during the election.

The Islamic Revolutionary Guard Corps, the main force of the Iranian military, also had more of a say in the matter, and just a political spectrum change with regard to the president’s office would not have a significant impact, Fan said.

A balancing act from Tehran was more likely, he suggested. “Under the leadership of the new government, Tehran may conduct balancing acts in great power diplomacy, it will not alienate Russia and China despite seeking closer ties with the United States,” Fan said.

According to Iranian state media, Pezeshkian will be sworn in before parliament early next month as Iran’s ninth president.

He takes office against a backdrop of sharp regional tensions over the Israel-Gaza war, with Tehran a major supporter of Palestinian militant groups, and as years of US sanctions over Iran’s nuclear programme spark crippling shortages and discontent at home, especially over jobs and inflation.

For a China keen to extend its Middle East influence beyond the economic front, Iran has become a crucial target for greater engagement.

China helped Iran to avoid large-scale isolation in the face of US sanctions during Raisi’s four years of hardline rule.

Last year, Beijing brokered a peace deal between long-time adversaries Iran and Saudi Arabia, reshaping relations between the Middle Eastern powerhouses that had formally cut ties in 2016.

Iran also joined the Beijing-backed Shanghai Cooperation Organisation and Brics groups last year.

“Even if Iran seeks warmer relations with the US and the West, ‘looking eastward’ will still be an important part of its multilateral diplomacy strategy. Tehran will simply not give up on China,” Fan said.

Iran on Monday pledged to continue to deepen relations with China.

Commenting on the future of ties with China following Pezeshkian’s victory, Iran’s foreign ministry spokesman said: “China is one of the most important and influential countries. Our relations with China will continue normally.

“Iran’s relations with friendly countries are based on … comprehensive and stable policies … [and] will be strengthened and consolidated by focusing on common interests.”

China has been Iran’s biggest trading partner for more than a decade, a relationship largely driven by oil – a revenue lifeline for Tehran – especially after it was severely sanctioned by the West.

Chinese imports of Iranian oil tripled between 2020 and 2023, marking a 10-year-high. To get around US sanctions, Iranian oil entering China is branded as originating from Malaysia or other Middle Eastern countries.

Wang Jin, an associate professor at the Institute of Middle East Studies at China’s Northwest University, said economic cooperation with China would still take precedence during Pezeshkian’s presidency.

Developing “friendly economic relations with China is still a major option [for Tehran]” he said, citing the US sanctions and wider Western restrictions on exports.

Wang said although Pezeshkian was likely to pursue friendly relations with the West, Iran’s conservative-leaning parliament and uncertain US policy towards Tehran meant cooperation with China would still be an “important and realistic” part of his foreign policy.

But Pezeshkian has been critical of Beijing in the past, such as during his election campaign, when he highlighted Beijing’s reluctance to implement a landmark 25-year cooperation deal signed in 2021.

The agreement, which has yet to be publicised, reportedly includes a promise of more than US$400 billion in Chinese investment in return for a steady and discounted oil supply from Iran, according to The New York Times. But implementation has largely stalled.

In a presidential debate on Monday, Pezeshkian suggested that China was not investing because Iran continued to be on the global blacklist of the Financial Action Task Force, arguing that Tehran should avoid economic or political isolation.

Fan in Shanghai said the agreement had been criticised a lot and become a “central debate for China-Iranian relations”, and there was little hope of it being implemented during Pezeshkian’s four-year term.

“The implementation of the 25-year cooperation agreement has been an old and much-criticised issue. This is not a new topic in Iran … The official publicity in both countries has a relatively high tone, but the reality does not seem to be too favourable.”

Hong Kong to hold special lights show marking 75th anniversary of People’s Republic of China

https://www.scmp.com/news/hong-kong/society/article/3269946/hong-kong-hold-special-lights-show-marking-75th-anniversary-peoples-republic-china?utm_source=rss_feed

Hong Kong authorities will hold a special lights show and a Mid-Autumn Festival lantern display at Victoria Park themed around National Day as part of celebrations to mark the 75th anniversary of the establishment of the People’s Republic of China.

Secretary for Culture, Sports and Tourism Kevin Yeung Yun-hung on Wednesday told lawmakers that some museums would also offer free admission as different government bureaus and departments rolled up their sleeves to prepare for this year’s October 1 anniversary.

“The Chief Secretary for Administration has given instructions [...] asking all bureaus and departments to make concerted efforts to plan and take forward the preparatory work for the National Day celebrations on all fronts” he said.

“Apart from the key programmes such as the annual large-scale National Day reception, flag-raising ceremony, variety show and fireworks display, all bureaus and their departments will also organise an array of celebratory activities [...] with a view to enabling more members of the public from different backgrounds and age groups to take part in and share the joy of National Day.”

Among the highlights revealed by Yeung are a special National Day edition of Victoria Harbour’s nightly light show “A Symphony of Lights” that will be held throughout October; a Mid-Autumn Festival lantern carnival at Victoria Park in Causeway Bay; and free admission to all museums managed by the Leisure and Cultural Services Department on October 1.

“The lantern carnival at Victoria Park will also invite secondary and primary school pupils from all over Hong Kong to submit their concepts for lanterns under the topic of celebrating National Day,” Yeung said.

The culture minister added that the Home Affairs Department would lead efforts to celebrate the occasion at a district level.

“We are hoping to push or utilise different resources in the community do a good job in organising activities that promote National Day,” he said.

Yeung also said the government had encouraged private museums to mark the occasion with some special offers or exhibitions.

Apart from the events revealed by Yeung, city leader John Lee Ka-chiu previously said he would strive for a pair of pandas being gifted by Beijing to arrive in Hong Kong by National Day.

He revealed on Tuesday that the pair would be young adults of an age suitable for breeding and described them as “agile”, “gentle” and “adorable”.

The pair are currently being prepared for transfer to Hong Kong but must undergo 30 days of quarantine on the mainland and another 30 in the city before they can be introduced to the public.

Man in China caught smuggling 100 live snakes in his trousers

https://www.theguardian.com/world/article/2024/jul/10/man-in-china-caught-smuggling-100-live-snakes-in-his-trousers

A man has been caught trying to smuggle more than 100 live snakes into mainland China by cramming them into his trousers, according to the country’s customs authority.

The unnamed traveller was stopped by customs officers as he sought to slip out of semi-autonomous Hong Kong and into the border city of Shenzhen, China Customs said in a statement on Tuesday.

“Upon inspection, customs officers discovered that the pockets of the trousers the passenger was wearing were packed with six canvas drawstring bags and sealed with tape,” the statement said.

“Once opened, each bag was found to contain living snakes in all kinds of shapes, sizes and colours,” it added.

The statement said officers seized 104 of the reptiles, including milk snakes and corn snakes, many of which were non-native species.

An accompanying video showed two border agents peering into transparent plastic bags filled with squirming red, pink and white snakes.

China is one of the world’s biggest animal trafficking hubs, but authorities have cracked down on the illicit trade in recent years.

The country’s biosecurity and disease control laws forbid people from bringing in non-native species without permission.

“Those who break the rules will be … held liable in accordance with the law,” the customs authority said, without specifying the man’s punishment.

Britons spend on rollercoasters and beaches over DIY and clothes; China inflation slows – business live

https://www.theguardian.com/business/live/2024/jul/10/britons-spend-rollercoasters-beaches-diy-clothes-china-inflation-slows-powell-fed-business-live

Rejection of US help in South China Sea shows Philippines acting on its own: analysts

https://www.scmp.com/week-asia/politics/article/3269880/rejection-us-help-south-china-sea-shows-philippines-acting-its-own-analysts?utm_source=rss_feed

The Philippines’ rejection of a US offer to help with regular resupply missions for troops on a disputed shoal in the South China Sea shows Manila prefers to handle operations on its own and Beijing could view Washington’s involvement as attempts to incite conflict in the waterway, analysts say.

Chinese and Philippine ships have been embroiled in a series of confrontations in the contested seaway in recent months.

A Filipino sailor lost a thumb during a June 17 clash when the Philippine side attempted to deliver essentials to soldiers manning a military outpost at the Second Thomas Shoal.

The United States has reiterated its ironclad defence commitments against any attack on Philippine aircraft or vessels in the South China Sea under their 1951 Mutual Defence Treaty.

But Philippine military chief General Romeo Brawner said his country would “try to exhaust all possible options that we have before we ask for help” after revealing that the US had extended its support.

“Yes, of course, they have been offering help and they asked us how they could help us in any way,” Brawner said last week.

Rej Torrecampo, a security analyst at the Political Economic Elemental Researchers and Strategists think tank, said Manila’s decision was “a sign that we can do our own military and civilian missions”.

“China’s criticism against us since last year when we started making public what is happening in the West Philippine Sea is that our actions were dictated by the US which is not correct. It’s a wrong characterisation of our action,” Torrecampo said.

The West Philippine Sea is the term Manila uses to describe a portion of the South China Sea that falls within its exclusive economic zone (EEZ).

Torrecampo added roping in the US or other allies to assist operations in the waterway could anger China and influence its aggressive maritime tactics.

“When other countries step in, what will they do? Will they change their standard operating procedure which we have not seen yet? For sure, knowing China, they would be preparing for that because we already announced the US is offering help,” he said.

The Philippines has deepened defence ties with the US after President Ferdinand Marcos Jnr took office in 2022, providing Washington access to multiple military sites in the Southeast Asian nation. The two sides have also hosted large-scale joint security drills.

Jose Antonio Custodio, a defence analyst and fellow at the Consortium of Indo-Pacific Researchers, said Manila can resupply its troops even without US help as the country’s naval capabilities had improved but American drones or reconnaissance aircraft that can patrol and send real-time information would be useful.

Custodio also suggested the Philippines could opt for non-lethal measures or equip its personnel with riot gear in case a June 17 type of incident occurs again and airdrop the supplies to prevent violent maritime run-ins.

“It’s just a matter of will, strategy and tactics,” he said.

Custodio said the US Typhon missile system installed in the Philippines can deter Beijing and protect the country’s beyond its EEZ, the Taiwan Strait and down to Palawan, an island facing the South China Sea.

“It will complement our ships and aircraft … but that’s for the future as we need to secure more batteries. If we only have one, we should ensure the location where to deploy so China cannot knock it out,” he said.

Louie Dema-ala, the Philippine army spokesperson, said on Tuesday that 35 personnel have completed training as part of an ongoing exercise to familiarise with the ground-launched system.

Can China’s development-based social contract withstand unemployment pressures?

https://www.scmp.com/news/china/politics/article/3269727/can-chinas-development-based-social-contract-withstand-unemployment-pressures?utm_source=rss_feed

Amid China’s ongoing economic struggles, unemployment remains a headache for Beijing. In the last instalment of on the range of unemployment issues facing the world’s second-largest economy, we examine the ruling party’s implicit social contract to deliver improved living standards through development. Read the previous story

For decades, economic development and improvements to people’s lives have been at the core of the ruling Communist Party’s legitimacy, but experts warn the narrative may backfire in times of high unemployment.

The tone was set in 1992 by China’s then paramount leader Deng Xiaoping, in a famous speech that settled all debate about his economic reforms, delivered during a trip to the southern province of Guangdong.

“Development is the hard truth,” Deng said, and all debates about whether reform policies were capitalist or socialist should stop. Instead, support should go to whatever reforms benefited productivity, the overall strength of the country and living standards of the people.

Generations of Chinese leaders have stayed true to that principle. President Xi Jinping, who in recent years has made poverty relief and the pursuit of “common prosperity” his signature policies, acknowledged as much in his first speech as party leader in 2012.

“Our people love life and yearn for better education, stable jobs, more satisfactory income, greater social security, improved medical and healthcare, more comfortable living conditions, and a better environment,” he said.

The focus on development is built into the official rhetoric, with Chinese authorities applying its lens to the country’s human rights record with distinctly different parameters from those used by Western governments.

Speaking at an international human rights event in December, Foreign Minister Wang Yi said China had always taken development as the foundation for human rights, and ensured more effectively the rights to subsistence and development for its people.

He said China had solved absolute poverty and built the world’s largest education, social benefit and medical systems.

Dali Yang, a political scientist at the University of Chicago, said people in China “always believed” in an implicit social contract – “that when there’s economic growth, when individual wealth and living standards are on the rise, there’s high support for the government”.

This implicit contract can also mean heightened risks to stability in times of unemployment, which can affect the public’s trust and support in the government, Yang said.

“In the 1990s, the crime rate was quite high in many cities, including the capital Beijing and Guangzhou … the public worried about robberies and didn’t dare travel outside the cities,” he noted.

“From this angle, when there’s unemployment, there are bound to be concerns about crime.”

The problem has even come to the attention of top adviser Liu Yuanchun, president of the Shanghai University of Finance and Economics who has previously advised the Politburo, China’s highest policymaking body.

In a report published last month by the China Macroeconomy Forum, Liu wrote that the issue of youth unemployment is likely to continue for the next decade and worsen in the short term.

“If not properly handled, it might cause other social issues or even trigger political problems,” he said.

While the modern party’s legitimacy is based on a growing and diverse range of sources, “performance-based legitimacy” remains a central pillar of stability, as it has for many decades, said Eli Friedman from Cornell University’s School of Industrial and Labour Relations.

“There are other sources of legitimacy the party draws on, most importantly patriotic pride in China’s increased power in the world,” Friedman said.

“But most analysts agree that people have generally been supportive of the state due to plentiful jobs, improving transport, and opportunities for upward socio-economic mobility.”

According to Friedman, the Chinese Communist Party needs to figure out ways to try and at least stabilise the livelihoods of its citizenry. He proposes relieving public anxiety by focusing on initiatives like publicly funded healthcare and pensions.

“The single most important thing they could do would be to make large investments in social infrastructure to match the investments they have already made in physical infrastructure,” he said.

China to probe EU’s trade barriers

https://www.scmp.com/economy/global-economy/article/3269892/china-probe-eus-trade-barriers?utm_source=rss_feed

China has announced a probe into the European Union’s trade barriers, following the bloc’s countervailing tariff decision on Chinese electric vehicles.

The investigation will be conducted via questionnaires, public hearings and field inspections, and it will be concluded before January 10, the Ministry of Commerce said in an online statement.

The move came as a Chinese commerce chamber lodged complaints over the EU practices in the name of anti-subsidies starting from late last year.

The EU’s provisional countervailing tariffs on Chinese EV makers took effect on Friday, though the matter is still being negotiated with the Chinese side, and the final verdict is expected in four months.

More to follow …

China rebukes Philippines, denies blocking medical evacuation from Second Thomas Shoal

https://www.scmp.com/news/china/diplomacy/article/3269876/china-rebukes-philippines-denies-blocking-medical-evacuation-second-thomas-shoal?utm_source=rss_feed

China has hit out at the Philippines, accusing it of “deliberately misleading” the international community over their latest squabble in the South China Sea in which Philippine forces claimed Chinese vessels tried to block the evacuation of a sick soldier.

In a statement on Tuesday, China Coast Guard said it had allowed the Philippines to evacuate an ill person from an “illegally grounded warship” under “humanitarian considerations” and had “monitored and verified” their actions in accordance with the law.

According to the Philippine Navy, the navy patient was taken from the BRP Sierra Madre – a rusting vessel that was run aground at Second Thomas Shoal 25 years ago – to Camp Ricarte Station Hospital in Puerto Princesa, Palawan.

It said the Philippine coastguard had “faced numerous obstructing and delaying manoeuvres” by its Chinese counterpart but “remained steadfast”.

Chinese coastguard spokesman Gan Yu said in the statement: “The relevant Philippine parties ignored the facts, maliciously hyped up [accusations], and deliberately misled international cognition”.

“The Chinese coastguard will continue to carry out rights protection and law enforcement activities in China’s jurisdictional waters in accordance with the law, and resolutely safeguard the country’s territorial sovereignty and maritime rights and interests,” Gan said.

He said China had “indisputable sovereignty” over the Nansha Islands, also known as the Spratly Islands, including Renai Reef and its surrounding waters.

Renai Reef – which is also known as Second Thomas Shoal or in the Philippines as Ayungin Shoal – is within the 200-nautical mile (370km) exclusive economic zone of the Philippines but is also claimed by China.

The hotspot has seen clashes occur repeatedly between China and the Philippines for more than a year. The most recent and serious confrontation was on June 17 when, according to Beijing, Philippine vessels attacked Chinese boats. Manila claimed a Chinese coastguard vessel rammed a Philippine resupply ship.

A month ago, the Philippine coastguard accused its Chinese counterpart of blocking a medical evacuation from the warship, calling the actions “barbaric and inhumane”.

The latest row came just a day after China’s Ministry of Natural Resources released a report that said the Sierra Madre had “seriously damaged the diversity, stability and sustainability of the coral reef ecosystems”.

“The Philippines should remove the warship and eliminate the source of the pollution to avoid persistent and cumulative harm to the coral reef ecosystem of Renai Reef,” the ministry said.

It said its latest conclusion was drawn from assessments based on satellite sensing technology and on-the-spot studies conducted from April to June this year.

China’s landfills brim with textile waste as fast fashion reigns and recycling takes a back seat

https://apnews.com/article/china-clothing-fast-fashion-recycling-brands-shein-f0c54f50588c9a4f00073cd5e0e4d086A worker feeds discarded textiles to a shredding machine at the Wenzhou Tiancheng Textile Company, one of China's largest cotton recycling plants in Wenzhou in eastern China's Zhejiang province on March 20, 2024. The recycling factory that repurposes discarded cotton clothes is trying to deal with the urgent waste problem. (AP Photo/Ng Han Guan)

2024-07-10T04:03:34Z

WENZHOU, China (AP) — At a factory in Zhejiang province on China’s eastern coast, two mounds of discarded cotton clothing and bed linens, loosely separated into dark and light colors, pile up on a workroom floor. Jacket sleeves, collars and brand labels protrude from the stacks as workers feed the garments into shredding machines.

It’s the first stage of a new life for the textiles, part of a recycling effort at the Wenzhou Tiancheng Textile Company, one of the largest cotton recycling plants in China.

Textile waste is an urgent global problem, with only 12% recycled worldwide, according to fashion sustainability nonprofit Ellen MacArthur Foundation. Even less — only 1% — are castoff clothes recycled into new garments; the majority is used for low-value items like insulation or mattress stuffing.

Nowhere is the problem more pressing than in China, the world’s largest textile producer and consumer, where more than 26 million tons of clothes are thrown away each year, according to government statistics. Most of it ends up in landfills.

And factories like this one are barely making a dent in a country whose clothing industry is dominated by “fast fashion” — cheap clothes made from unrecyclable synthetics, not cotton. Produced from petrochemicals that contribute to climate change, air and water pollution, synthetics account for 70% of domestic clothing sales in China.

China’s footprint is worldwide: E-commerce juggernaut brands Shein and Temu make the country one of the world’s largest producers of cheap fashion, selling in more than 150 countries.

To achieve a game-changing impact, what fashion expert Shaway Yeh calls “circular sustainability” is needed among major Chinese clothing brands so waste is avoided entirely.

“You need to start it from recyclable fibers and then all these waste textiles will be put into use again,” she said.

But that is an elusive goal: Only about 20% of China’s textiles are recycled, according to the Chinese government — and almost all of that is cotton.

Chinese cotton is not without a taint of its own, said Claudia Bennett of the nonprofit Human Rights Foundation. Much of it comes from forced labor in Xinjiang province by the country’s ethnic Uyghur minority.

“One-in-five cotton garments globally is linked to Uyghur forced labor,” Bennett said.

In May, the U.S. blocked imports from 26 Chinese cotton traders and warehouses to avoid goods made with Uyghur forced labor. But because the supply chain is so sketchy, Uyghur cotton is used in garments produced in other countries that don’t bear the “made-in-China” label, Bennett said.

“Many, many, many clothing brands are linked to Uyghur forced labor through the cotton,” she said. They “hide behind the lack of transparency in the supply chain.”

While China is a global leader in the production of electric cars and electric-powered public transit and has set a goal of achieving carbon neutrality by 2060, its efforts in promoting fashion sustainability and recycling textiles have taken a back seat.

According to a report this year from independent fashion watchdog Remake assessing major clothing companies on their environmental, human rights and equitability practices, there’s little accountability among the best-known brands.

The group gave Shein, whose online marketplace groups about 6,000 Chinese clothing factories under its label, just 6 out of a possible 150 points. Temu scored zero.

Also getting zero were U.S. label SKIMS, co-founded by Kim Kardashian, and low-price brand Fashion Nova. U.S. retailer Everlane was the highest-scorer at 40 points, with only half of those for sustainability practices.

China’s domestic policy doesn’t help.

Cotton recycled from used clothing is banned from being used to make new garments inside China. This rule was initially aimed at stamping out fly-by-night Chinese operations recycling dirty or otherwise contaminated material.

But now it means the huge spools of tightly woven rope-like cotton yarn produced at the Wenzhou Tiancheng factory from used clothing can only be sold for export, mostly to Europe.

Making matters worse, many Chinese consumers are unwilling to buy used items anyway, something the Wenzhou factory sales director, Kowen Tang, attributes to increasing household incomes.

“They want to buy new clothes, the new stuff,” he said of the stigma associated with buying used.

Still, among younger Chinese, a growing awareness of sustainability has contributed to the emergence of fledgling “remade” clothing businesses.

Thirty-year-old designer Da Bao founded Times Remake in 2019, a Shanghai-based brand that takes secondhand clothes and refashions them into new garments. At the company’s work room in Shanghai, tailors work with secondhand denims and sweatshirts, stitching them into funky new fashions.

The venture, which began with Da Bao and his father-in-law posting their one-off designs online, now has a flagship store in Shanghai’s trendy Jing’an District that stocks their remade garments alongside vintage items, such as Levi’s and Carhartt jackets.

The designs are “a combination of the past style and current fashion aesthetic to create something unique,” Bao said.

Zhang Na has a fashion label, Reclothing Bank, that sells clothes, bags and other accessories made from materials such as plastic bottles, fishing nets and flour sacks.

The items’ labels have QR codes that show their composition, how they were made and the provenance of the materials. Zhang draws on well-established production methods, such as textile fibers made from pineapple leaf, a centuries-old tradition originating in the Philippines.

“We can basically develop thousands of new fabrics and new materials,” she said.

Reclothing Bank began in 2010 to give “new life to old things,” Zhang said of her store in a historic Shanghai alley with a mix of Western and Chinese architecture. A large used clothes deposit box sat outside the entrance.

“Old items actually carry a lot of people’s memories and emotions,” she said.

Zhang said she has seen sustainability consciousness grow since she opened her store, with core customers in their 20s and 30s.

Bao Yang, a college student who dropped by the store on a visit to Shanghai, said she was surprised at the feel of the clothes.

“I think it’s amazing, because when I first entered the door, I heard that many of the clothes were actually made of shells or corn (husks), but when I touched the clothes in detail, I had absolutely no idea that they would have this very comfortable feel,” she said.

Still, she conceded that buying sustainable clothing is a hard sell. “People of my age are more addicted to fast fashion, or they do not think about the sustainability of clothes,” she said.

Recycled garments sold at stores like Reclothing Bank have a much higher price tag than fast-fashion brands due to their costly production methods.

And therein lies the real problem, said Sheng Lu, professor of fashion and apparel studies at the University of Delaware.

“Studies repeatedly show consumers are not willing to pay higher for clothing made from recycled materials, and instead they actually expect a lower price because they see such clothing as made of secondhand stuff,” he said.

With higher costs in acquiring, sorting and processing used garments, he doesn’t see sustainable fashion succeeding on a wide scale in China, where clothes are so cheap to make.

“Companies do not have the financial incentive,” he said.

For real change there needs to be “more clear signals from the very top,” he added, referring to government targets like the ones that propelled China’s EV industry.

Still, in China “government can be a friend to any sector,” Lu said, so if China’s communist leaders see economic potential, it could trigger a policy shift that drives new investment in sustainable fashion.

But for now, the plastic-wrapped cones of tightly-wound cotton being loaded onto trucks outside the Wenzhou Tiancheng factory were all headed to overseas markets, far from where their recycling journey began.

“Fast fashion definitely is not out of fashion” in China, Lu said.

___

Associated Press writer Isabella O’Malley in Philadelphia contributed to this report.

___ The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

Chinese community hit hardest amid Malaysia’s suicide surge

https://www.scmp.com/news/asia/southeast-asia/article/3269867/chinese-community-hit-hardest-amid-malaysias-suicide-surge?utm_source=rss_feed

Suicide rates in Malaysia have surged in recent years, the country’s deputy prime minister told parliament – with 4,440 Malaysians taking their own lives since 2019.

Men in Malaysia were four times more likely to die by suicide than women, Deputy Prime Minister Ahmad Zahid Hamidi said on Tuesday while revealing the statistics.

“The number of suicides has surged, particularly since 2021, with almost or over 1,000 cases per passing year,” he said in a statement after chairing a meeting of the National Social Council.

“There were 609 cases in 2019, 621 in 2020, 1,142 in 2021, 981 in 2022, and 1,087 last year.”

Most suicides involved men, with over 3,600 cases, while more than 780 involved women, Ahmad Zahid said, added that there was concern about the Chinese community experiencing the highest number of suicides annually since 2019.

Suicides were the second highest among foreigners over the past five years, followed by Indians and Malays, he said.

“There is no doubt that the country is currently experiencing drastic social and economic change,” Ahmad Zahid said.

“[This is] due to the emergence of various new trends such as demographic changes, urbanisation, digital innovation, economic inequality, changing global economic power, and global hyperconnectivity,” he said.

“This change has resulted in significant shifts in terms of social behaviours, cultural change, and behavioural change, as well as a dynamic change in family institutions and general society.”

The deputy prime minister said this showed “a significant need for drastic early change in social policy approaches to keep up”.

Malaysia’s National Mental Health Crisis Line, or HEAL Line 15555 (Help with Empathy and Love), received more than 48,900 calls from October 2022 to June this year, Ahmad Zahid revealed.

Of these calls, a total of 28,870 received emotional support, while 20,030 involved special interventions such as psychoeducation, positive coping skills, and cognitive behaviour therapy.

This article was first published by

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China’s dormant job market inflames anxieties, simmering social tensions to surface

https://www.scmp.com/economy/china-economy/article/3269764/chinas-dormant-job-market-inflames-anxieties-simmering-social-tensions-surface?utm_source=rss_feed

Amid China’s ongoing economic struggles, unemployment remains a headache for Beijing. In we examine the range of unemployment issues facing the world’s second-largest economy, from young people to “the curse of 35”, as well as gig workers and the political implications.

Liu Fei, a grass roots community worker in the southern Chinese province of Guangdong, has been busy of late.

She and her colleagues are carrying out what they term “stability maintenance” work to, in part, defuse potential social unrest – and the present state of the economy has made the triggers for such incidents numerous.

Paired with residents in need of help, they carry out daily door-to-door visits and run errands for them if needed, with particular focus on “five special groups”: those with frustrations, failed investments, psychological imbalances, relationship problems or mental disorders.

“Everyone [working] has been quite tense,” Liu said. “[We’re] paying attention to families that are long-term unemployed or in debt, offering them one-on-one care to divert their depression and anger.”

Their work appears more essential now, as the frequency of public displays of anger has been on the upswing. As China’s economy faces troubling headwinds – with growth in traditional pillars such as real estate and infrastructure in a pronounced slump – a large number of families are dealing with reduced income, increased life pressure and a lack of confidence in the future.

The reaction of Chinese social media users to a recent series of violent attacks reflects widespread dissatisfaction over the country’s economic downturn and worsening employment prospects.

On June 10, a 55-year-old Chinese man was arrested for stabbing four US university tutors at a public park in the northern province of Jilin.

“Police told us that [the attacker] was unemployed and down on his luck, and that somebody in our group bumped into the man,” one of the four was quoted as saying by NBC News.

“And he decided to respond in the way he responded.”

On June 19, a man reportedly attacked three passengers with a knife at a subway station in Shanghai. The case is under investigation.

Around the same time, two separate clashes between customers and employees at Manner Coffee in Shanghai sparked heated discussion on the internet, with related topics on the microblogging platform Weibo garnering billions of views.

In one conflict, a male employee had a physical altercation with a customer. In another, a female clerk – frustrated by complaints about service – lost control and threw coffee powder on the customer, shouting “Go ahead and complain!” The company later confirmed that the employee in the latter altercation had been fired.

On posts about the incidents, tens of thousands of users left comments discussing whether high work intensity and low wages led to the fracas.

According to local media reports, an average barista at Manner has to make over 300 cups of coffee per day on a monthly salary of about 6,000 yuan (US$825).

The rise in these incidents can be blamed at least in part on rising unemployment, said Yu Hai, a sociology professor at Fudan University in Shanghai. “The middle class, in particular, is the group that has been hit most by unemployment and shrinking incomes.”

Yu asked policymakers to be sensitive to social conditions and implement policies that will stabilise employment in enterprises, and stop any policy that could harm the confidence of the private sector.

China’s private firms, which have struggled to return to even footing since the pandemic, employ more than 80 per cent of the urban workforce.

“Declining job and income expectations are causing conflicts between different social classes. The government needs to recognise that these incidents are not isolated but reflect broader social trends,” Yu said. “In particular, the middle class will decline during this wave of economic downturn, and their anxiety and despair will increase accordingly.”

An article published on the official website of China Police Daily in May pointed out that “public anxiety” exists at various levels – from the grass roots up to large companies.

This is caused by a “negative evolution of social mentality” in the domestic and international environment, the article said.

“Factors such as children’s education, income pressure, mortgage costs, and mental stress resistance have led to the gradual transformation of offline pressure to online, resulting in increased hostility and intensified confrontations in public opinion.”

Liu Fei, the community worker, said this fits with her own experience. “When the economy is in downturn, people become more aggressive, and conflicts between strangers increase. I remind my family daily not to argue with strangers.”

Official Chinese data shows that the unemployment rate for the 16-24 age group, excluding those in school, was 14.2 per cent in May – slightly lower than the 14.7 per cent recorded in April.

Last year, China’s statistics bureau adjusted its methodology to no longer include students after the youth unemployment rate reached around 20 per cent. The Ministry of Education has projected 11.79 million people will graduate college this year.

According to the People’s Bank of China’s Urban Depositor Survey Report – a survey of more than 20,000 households nationwide – for the past three years the income sentiment index, income confidence index and employment sentiment index have been on the decline, lingering at low levels.

In the first quarter of 2024, 13.2 per cent of residents said they believe their income will increase, 69.6 per cent said they thought their income will remain the same, and 17.3 per cent expected their income to drop compared to the previous quarter.

The income confidence index was 47.0 per cent, the PBOC said, with 10.5 per cent of residents agreeing with the statement “the situation is good, employment is easy”. Meanwhile, 43.0 per cent called the situation “average,” and 46.5 per cent agreed with the statement “the situation is severe, employment is difficult”.

In May, President Xi Jinping ordered China’s cadres to put employment and job creation “at the forefront of their mind” as Beijing tries to anchor market confidence and maintain stability in the run-up to the third plenum of the Communist Party’s Central Committee, a major economic conclave scheduled for next week.

In calling for “full, high-quality employment,” Xi explicitly addressed widespread complaints about illegal lay-offs by some companies and pointed to a mismatch between job supply and demand in some sectors, especially among young people.

“Employment is the most basic livelihood of the people. It is related to the healthy development of the economy and society, and the long-term stability of the country,” Xi was quoted as saying by the official Xinhua news agency.

“The core of the current government’s policies is still to [control risk], but the government should work with society to overcome difficulties,” Yu said. “Social governance and urban management policies must be tolerant, compassionate and empathetic.”

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China leads world in generative AI adoption, underscoring country’s progress

https://www.scmp.com/tech/tech-trends/article/3269866/china-leads-world-generative-ai-adoption-underscoring-countrys-progress?utm_source=rss_feed

China is leading the world in adopting generative AI, a new survey shows, the latest sign the country is making strides in the technology that gained global attention after US-based OpenAI’s ChatGPT launched in late 2022.

In a survey of 1,600 decision-makers in industries worldwide by US AI and analytics software company SAS and Coleman Parkes Research, 83 per cent of Chinese respondents said they used generative AI, the technology underpinning ChatGPT.

That was higher than the 16 other countries and regions in the survey, including the United States, where 65 per cent of respondents said they had adopted GenAI.

The global average was 54 per cent.

The industries surveyed included banking, insurance, healthcare, telecommunications, manufacturing, retail and energy.

The results underscore China’s rapid progress in the generative AI field, which gained momentum after Microsoft-backed OpenAI released ChatGPT in November 2022, prompting dozens of Chinese companies to launch their own versions.

Last week, a report by the United Nations’ World Intellectual Property Organization showed China was leading the GenAI patent race, filing more than 38,000 between 2014 and 2023 against 6,276 filed by the United States in the same period.

While many leading international generative AI service providers, including OpenAI, face curbs in China, the country has developed a robust domestic industry, with offerings from tech giants such as ByteDance to start-ups such as Zhipu.

Enterprise adoption of generative AI in China is expected to accelerate as a price war is likely to further reduce the cost of large language model services for businesses.

The SAS report also said China led the world in continuous automated monitoring (CAM), which it described as “a controversial but widely-deployed use case for generative AI tools”.

This technology can collect and analyse vast amounts of data on users’ activities, behaviour and communications, which can lead to privacy infringements as they are not aware of the extent of the data being collected or how it is used, said Udo Sglavo, vice-president of applied AI and modelling at SAS.

“The algorithms and processes used in CAM are often proprietary and not transparent,” Sglavo added.

“This can make it difficult to hold the entities using CAM accountable for misuse or errors.”

He added, “China’s advancements in CAM contribute to its broader strategy of becoming a global leader in artificial intelligence and surveillance technologies.”

China’s financial sector jobs seen losing their lustre as salaries tumble amid crackdown

https://www.scmp.com/economy/economic-indicators/article/3269737/chinas-financial-sector-jobs-seen-losing-their-lustre-salaries-tumble-amid-crackdown?utm_source=rss_feed

Amid China’s ongoing economic struggles, unemployment remains a headache for Beijing. In we examine the range of unemployment issues facing the world’s second-largest economy, from young people to “the curse of 35”, as well as gig workers and political implications.

A well-to-do couple in Shenzhen who once banked on a boom in China’s financial sector for their handsome income has seen their family finances deteriorate to such an extent they had to remove their son from an exclusive international school.

The father, once a high-flying account manager at a state-owned securities firm, made the difficult decision when his income was drastically cut, having previously earned up to 100,000 yuan (US$13,753) a month.

The couple will transfer their son to a public school in September to save 300,000 yuan in annual tuition fees after the father’s basic monthly salary dropped to around 10,000 yuan per month.

Deep and widespread pay cuts are among Beijing’s fresh mandates to rein in financial sector excesses and whip bankers into line amid the sector’s shifting role and new emphasis on equality and tech.

And while public controversy toward fat pay cheques has been assuaged, concerns remain over morale and a brain drain at a critical time when Beijing needs the financial sector to prop up economic growth.

“It’s a rectification,” said Rui Meng, a finance professor with the China Europe International Business School.

“Few would dispute that financial workers are overpaid, which does not sit well with public perception when other sectors are struggling to keep people on the payroll.”

China’s financial industry used to be full to the brim with well-paid bankers and brokers, with Beijing encouraging financial players since the 2010s to model the industry after Western peers – including generous salaries – in a push to incentivise performance and internationalise operations.

One flagship case surrounded investment bank China International Capital Corporation (CICC), which boosted average annual pay from 700,000 yuan in 2018 to 1.15 million yuan (US$158,000) in 2020, according to annual reports, despite the national per capita income being only 35,128 yuan.

But as staggering pay rises raised eyebrows, the Wall Street way eventually fell out of favour as Beijing observed how some Western giants collapsed under the watch of well-paid executives and how bankers, acting only in self-interest, triggered and exacerbated financial crises.

Then came a rethink of the roles and responsibilities of financial workers and how to keep tabs on them.

In 2022, the opening salvo of what would be a succession of pay cuts was fired by the Ministry of Finance, when it issued a document requesting financial state-owned enterprises (SOEs) to limit packages for senior management.

In October, the twice-a-decade central financial work conference heralded Beijing’s remoulding of the vast industry, with pay cuts an eye-catching hallmark.

Directives were given to financial institutions to bankroll national strategies, including technology, and forgo excessive profits while keeping risks at bay.

Unfurling his “financial superpower” vision at a party conclave in January, President Xi Jinping laid down distinguishing attributes and disciplines for China’s financial industry that contrasted sharply with Wall Street’s profit-seeking ethos.

Warning of elitism and extravagance, Xi said financial workers must stay honest and trustworthy, righteously pursue profits and not seek quick success or benefits.

The developments also happened under Beijing’s common prosperity drive to narrow yawning income gaps among industries, with a succession of anti-corruption investigations since 2023 dislodging financial officials and executives.

Watchdogs were quick to heed Beijing’s call, and in April, financial regulators announced new rules to cap commission rates at public investment funds, who are forbidden to pay more than 15 per cent of their total commissions to a single broker.

Regulators are also on the cusp of capping annual salaries at state banks at 3 million yuan, which could be applied retroactively.

And the case of the couple in Shenzhen, amid the whirlwind changes, is hardly unique.

Many who climbed onto the finance gravy train in previous years now find their pay packages shrinking.

The average annual salary at Citic Securities in 2023 fell by 3.4 per cent to 775,900 yuan (US$106,700) from a year earlier.

Total pay for its directors and senior management at Citic Limited also dropped to 6.7 million yuan last year from 7 million in 2022.

CICC’s average annual salary, meanwhile, nearly halved to 696,800 yuan in 2023 from the highs of the 2020s.

The Hong Kong branches of some mainland Chinese banks have also been reviewing pay and making reductions in recent months.

Some are also streamlining operations in the city and replacing local staff with colleagues from mainland China.

Chen Zhiwu, a chair professor of finance at the University of Hong Kong, said while such pay corrections are warranted, a market-oriented way is better than top-down directives to decide compensation for financial professionals.

“China needs to loosen regulations, increase competition to drive down the price of financial services [to benefit people and businesses],” said Chen, adding that the sector’s high pay was also due to the shortage of financial services amid government overregulation and controls.

The pay cuts and salary cap, nonetheless, can alleviate the burden facing many financial institutions amid a dearth of initial public offerings, thinner interest margins and shrinking profitability, when China’s economic recovery is made uneven by stock and property sector slumps.

“Morale can be low, with the impact on work performance already there,” said Fu Weigang, executive president of the Shanghai Institute of Finance and Law think tank, warning high staff turnover may affect the sector’s ability to help stabilise growth.

Fu also said while watchdogs have every right to intervene as key stakeholders in financial SOEs, law and contracts must still be upheld.

“Clawing back paid bonuses could contravene labour laws and employment contracts, and there could be lawsuits,” Fu added.

Yao Yang, a Peking University professor, said that salary cuts are “not punitive” in nature, with some aimed at boosting other sectors deemed more important by Beijing amid manufacturing upgrades and tech self-sufficiency endeavours.

“[They are] intended to take the lustre off the financial sector so more talent and resources can flow to manufacturing and the real economy,” Yao said at a forum earlier this year.

“The starting salary in the financial sector has come down to the level of the tech sector.”

Rui from the China Europe International Business School also said, with the allure of the finance sector dimming, China’s best and brightest may flow to the tech sector.

Artificial intelligence surpassed finance for the first time in a second-quarter salary ranking by online recruitment platform Zhilian Zhaopin.

But Chen at the University of Hong Kong warned that such pay cuts may only serve to drive away skilled financial professionals and depress supply of risk capital and other financial services.

“[Over time], tech start-ups and the real economy will also suffer if there is fewer risk capital and financial products to support them,” he said.

Cabbage trick stops China toddler going off rails on high-speed train

https://www.scmp.com/news/people-culture/trending-china/article/3269558/cabbage-trick-stops-china-toddler-going-rails-high-speed-train?utm_source=rss_feed

It is a dilemma for parents everywhere, how to keep your child occupied during a long journey, especially on public transport.

One father recently came up with a cheap and easy solution that went viral when a video of his daughter was posted on social media, amusing many people online.

The father from Kunming, Yunnan, in southwestern China, was travelling with his child on a high-speed train, reported the newspaper Dushi Shibao.

Concerned that his young daughter might be noisy on the train and disturb other passengers, he gave her a cabbage to peel during the journey.

In the trending video, the little girl is clearly absorbed in the task of peeling back the layers from various angles and placing the leaves on the tray table in front of her.

Sometimes she sits on her father’s lap and other times on her own seat, while the father naps or plays games on his phone.

For the duration of the journey, which transitions from day to night, she remains engaged in her task.

“The child is very lively and energetic. To prevent her from disturbing others, he brought a cabbage for her to peel. The girl was peeling for more than an hour,” the unnamed person who filmed the pair said.

The destination of the train was not specified, but before leaving, the girl and her father collected the cabbage leaves and disposed of them in a rubbish bag before tidying up their area.

This creative solution to managing the behaviour of a child on public transport has resonated widely.

“If the child can peel for an hour, it shows she has strong focus. Many children would lose interest in a few minutes and start playing with something else. She might be a top student in the future,” said one online observer.

“When my child was only a year old, I gave him a big steamed bun to nibble on bit by bit on the train, keeping him occupied without needing to buy train food,” another person said.

“What a unique way to keep a child occupied. After the train ride, you can cook the cabbage,” said another.

“It shows there’s no child that cannot be managed, just parents who do not want to manage them,” said a fourth.

The father was not the only parent to keep his child occupied in this way during a long journey.

In June, a couple from Shenzhen did the same with their one-year-old daughter who was dressed in a princess outfit.

In another case in the southeastern province of Fujian, parents gave their child three pounds of green beans to snap during a trip.

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South China Sea: despite clashes, Beijing and Manila must keep talking

https://www.scmp.com/opinion/asia-opinion/article/3269608/south-china-sea-despite-clashes-beijing-and-manila-must-keep-talking?utm_source=rss_feed

Just weeks after one of the most violent incidents between the Philippines and China, high-level diplomats from both sides met in Manila to de-escalate rising tensions. The ninth round of the bilateral consultation mechanism was a welcome respite, given a string of close calls in contested waters. Although expectations remain low, the talks put a momentary pause on an otherwise dangerous downward turn between the two countries.

Since its first meeting in 2017, the consultation mechanism has been a regular channel for handling maritime disputes. The meetings occurred frequently until the Covid-19 pandemic, but no high-level visits have followed Philippine President Ferdinand Marcos Jnr’s trip to Beijing in January 2023.

Last year, a consultation mechanism meeting was convened a month after the Philippine coastguard alleged its Chinese counterpart had pointed a military-grade laser that temporarily blinded some of the former’s crew. In the months following, a stand-off and a collision occurred in the Second Thomas Shoal.

In September, the Philippine coastguard removed a floating barrier put up by the Chinese coastguard in the Scarborough Shoal that blocked access by Filipino fishers. In November and December, Manila said the Chinese coastguard employed water cannons against Filipino supply ships bound for the Second Thomas Shoal.

The lack of timely diplomatic intervention allowed the maritime tiff to fester and poison overall ties. Talking does not resolve everything, but not talking can make it worse. The lack of high-level exchange comes amid a legislative probe of previous arrangements to soothe tensions allegedly reached during the Duterte administration. Such crucifixion of dispute management, coupled with low mutual trust and the absence of effective hotline communications, set the stage for more dangerous clashes.

To arrest further deterioration of the situation, Philippine foreign affairs undersecretary Maria Theresa Lazaro and Chinese foreign vice-minister Chen Xiaodong met in Manila on July 2. They discussed improving maritime communication mechanisms and promoting dialogue between their coastguards, including possibly resuming a joint coastguard committee set up during the Duterte administration.

The meeting came amid calls for greater diplomacy to stave off conflict. In a rare display, 33 Filipino-Chinese business groups issued a statement in support of de-escalation, appealing to both governments to “consider paths that will safeguard the peace, order and safety of both countries and its peoples”. They called for the establishment of a “neutral and diplomatic venue for discussion that will uphold mutual respect for one another”.

China remains the Philippines’ largest trade partner and a major investor. But tensions have affected economic ties. Chinese infrastructure investment, tourism and capital flows to the Philippines have declined to the benefit of other Southeast Asian countries. Failure to offset lost opportunities may put the Philippines behind the region in areas where cooperation with China is critical.

Importantly, the brazen incidents at sea have occurred in spite of Philippine deterrence. Manila has given the United States military access to four additional sites across the country and allowed Washington to deploy the American Typhon mid-range missile system on its soil, including in northern Luzon close to Taiwan. The US and Philippines also undertook more joint military exercises in the South China Sea. At the Shangri-La Dialogue in Singapore, Marcos said the death of a Filipino citizen by “a wilful act” would be “very close to what we define as an act of war”, thus potentially triggering the 1951 Mutual Defence Treaty with the US.

Chinese research and naval ships have been spotted in the country’s eastern and southwestern waters during combined drills with the US and other partners. In clashes in March and April, there were either recorded injuries to sailors or damage to ships.

On June 17, a Filipino sailor in the Second Thomas Shoal lost a thumb in an altercation that broke out when the Chinese coastguard intercepted a Philippine resupply run to BRP Sierra Madre, a stranded navy vessel that serves as an outpost in the disputed area. Manila has accused the Chinese side of damaging equipment worth 60 million pesos (US$1.02 million).

The encounter occurred right after China instituted a controversial measure to arrest and detain foreign nationals “trespassing” in its claimed waters. The prospect of another aggressive episode may have added urgency to bilateral talks.

The ninth bilateral consultation mechanism also came after not only Chinese but also Russian objections to US missile deployment in the Philippines. After Washington placed the Typhon mid-range missile systems in Denmark and the Philippines, Moscow called for production of more intermediate-range nuclear-capable missiles. Beijing criticised the missile installation in a meeting between Chinese and American defence chiefs on the sidelines of the Shangri-la Dialogue.

Parallels can be drawn between the reaction to the Typhon missile presence in the Philippines and the Cuban missile crisis, which brought the world to the brink of nuclear war. The Soviet Union’s decision to place nuclear missiles in Cuba was a response to the US placing Jupiter missiles in Turkey the year before.

For Cuba, the Soviet missiles were meant to deter a US invasion. Similarly, deterring China was among the arguments raised in favour of stationing the US missile system in northern Luzon.

Fortunately, negotiations led Moscow to withdraw its missiles from the island, as well as for the US to withdraw its Jupiter missiles from Italy and Turkey. Despite the breakthrough, Cuba has been subjected to one of the world’s longest embargoes. This shows the fallout for countries caught between great power competition.

Manila said the US missiles would be pulled out by September. Whether the bilateral consultation mechanism played a part in such withdrawal is unknown, but any dialogue to manage tensions, stabilise relations and contribute to peace should be welcomed.

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China’s consumer inflation falls short of expectations, but faster recovery expected

https://www.scmp.com/economy/economic-indicators/article/3269845/chinas-consumer-inflation-falls-short-expectations-faster-recovery-expected?utm_source=rss_feed

China’s consumer price growth marginally fell short of expectations in June, continuing over a year of weakness, but analysts have still predicted a faster recovery in the coming months as demand for residential services consumption improves.

China’s consumer price index (CPI), a key gauge of inflation, grew by 0.2 per cent year on year in June, compared to an increase of 0.3 per cent in May, the National Bureau of Statistics (NBS) said on Wednesday.

The reading fell short of the expected 0.42 per cent growth projected by economists polled by Chinese financial data provider Wind.

Meanwhile, China’s producer price index (PPI) – which measures the cost of goods at the factory gate – slipped by 0.8 per cent last month, falling for the 21st consecutive month, having also fallen by 1.4 per cent in May.

The reading fell short of the expected 0.75 per cent decrease projected by Wind.

Elsewhere, China’s core inflation, which excludes volatile food and energy prices, rose by 0.6 per cent last month compared to a year earlier.

On a month-on-month basis, China’s inflation in June remained negative after falling by 0.2 per cent following a 0.1 per cent decrease in May, according to the NBS.

Amid an overall economic slowdown, consumers in China are unwilling to spend due to a prolonged property slump and a bleak job market, with the CPI having stagnated around zero since April last year.

The world’s second-largest economy is experiencing its longest period of deflation since the 2009 global financial crisis, fuelling market concerns about whether Beijing can meet its 3 per cent annual CPI growth target.

Several of China’s public utility companies have increased the price of some services, including water, electricity and gas, amid rising cost pressures and tightened finances.

However, the increased prices have a relatively limited impact on overall consumer prices as they constitute only about 5 per cent of the CPI, according to the Bank of China’s third-quarter economic outlook report released at the end of June.

Economists at the Bank of China expect consumer prices to rise by 0.7 per cent in the third quarter and 1.4 per cent in the fourth quarter, with annual growth averaging at 0.6 per cent.

“The upcoming summer holiday, Mid-Autumn Festival and National Day holidays are bright spots for tourism consumption, residents’ spending willingness on tourism, education and other services has increased, and service consumption prices will remain on the upwards trajectory,” they said.

More to follow …

China’s state-owned defence firms pledge to tackle corruption

https://www.scmp.com/news/china/military/article/3269803/chinas-state-owned-defence-firms-pledge-tackle-corruption?utm_source=rss_feed

Chinese state-owned defence companies have promised to step up efforts to tackle corruption after the former defence minister Li Shangfu was accused of “polluting the equipment sector”.

Nine firms operating in sectors that include nuclear, aerospace and shipbuilding promised to tighten their rules on bidding and procurement as well as looking at areas such as hiring and quality control following a series of inspections by the Central Commission for Discipline Inspection (CCDI), the top anti-corruption agency.

A number of senior commanders and defence company executives have already been caught up in the ongoing anti-corruption campaign targeting the military.

Last month, Li and his predecessor as defence minister Wei Fenghe were expelled from the Communist Party as Beijing confirmed they were being investigated on suspicion of corruption.

Li, who had an aerospace background and spent decades in the military’s equipment department, was accused of “severely polluting the political ecology in the military equipment sector and atmosphere in the industry”.

Wei was also accused of accepting a huge amount of money and helping others gain improper benefits.

Nine generals – including previous and serving commanders from the rocket and air forces – as well as officials from the equipment development departments were also dismissed from the National People’s Congress late last year after being caught up in the investigation.

Among the companies that set out their efforts to tackle corruption was the China National Nuclear Corporation, which oversees the country’s civilian and military nuclear programmes.

It pledged to strengthen the oversight of its “top leaders” and “standardise the management of bidding and procurement”, adding that it was also carrying out an investigation into improper employment practices – a problem highlighted in a series of inspections carried out by the CCDI last year.

China Aerospace Science and Technology Corporation, a main contractor for the country’s space programme said 36 employees had been the subject of Communist Party disciplinary action and seven had been handed over to the judicial authorities.

Wu Yansheng, the company’s former chairman, was removed from his role on the country’s top political advisory body, the Chinese People’s Political Consultative Conference (CPPCC), last December.

The company said other problems relating to quality control had been uncovered and promised to improve product design to “ensure the stable operation of satellites in orbit” and strengthen employees’ awareness of safety and confidentiality

Another company, the China Aerospace Science and Industry Corporation, which is the country’s largest maker of missiles, vowed to improve secrecy and address irregular procurement. Its former deputy manager Wang Changqing was also removed from the CPPCC in December.

Two military equipment giants, China North Industries Group Corporation and China South Industries Group Corporation, also promised to act. The latter said it would address irregular transactions and the revolving door between government and business, as well as ensuring executives who resign from the firm cannot evade scrutiny.

Other firms that pledged to act include the Aviation Industry Corporation of China, the Aero Engine Corporation of China and China Electronics Technology Group Corporation.

India races to build power plants in region claimed by China, which could add to tensions

https://www.scmp.com/news/asia/south-asia/article/3269806/india-races-build-power-plants-region-claimed-china-which-could-add-tensions?utm_source=rss_feed

India plans to spend US$1 billion to expedite the construction of 12 hydropower stations in the northeastern Himalayan state of Arunachal Pradesh, two government sources said, a move that could raise tensions with China that lays claims to the region.

The federal finance ministry under Nirmala Sitharaman recently approved up to 7.5 billion rupees (US$89.85 million) in financial help to each hydropower project in the northeastern region, the sources said.

Under the scheme, about 90 billion rupees is likely to be allotted for the 12 hydropower projects in Arunachal Pradesh, said the sources, who have direct knowledge of the matter.

The scheme is likely to support northeastern states and help them finance equity holdings in the projects they host. Having state governments on board generally helps in expediting regulatory clearances, locals rehabilitation and negotiations on sharing electricity with the host state.

The plans for the hydropower stations are expected to be announced in the 2024/2025 federal budget that Prime Minister Narendra Modi’s government will unveil on July 23, the sources said, declining to be named as the information remained confidential.

The Indian finance and power ministries and China’s foreign ministry did not immediately respond to requests for comment.

Last August, the government awarded contracts to state-run firms NHPC, SJVNL and NEEPCO for the construction of the 11.5-gigawatt-capacity plants entailing an estimated investment of US$11 billion, as part of a broader project to develop infrastructure in the border region.

None of the companies responded to a request for comments.

These power plants were earlier enlisted with private sector firms, but remained non-starters due to various reasons.

India has built less than 15-gigawatt hydropower plants in the last 20 years, while installations of new coal and other renewable sources of energy were nearly 10 times of the new hydropower projects.

India and China share a 2,500km (1553.43 mile) largely un-demarcated border, over which they fought a war in 1962.

India says Arunachal Pradesh is an integral part of the country, but China claims it is a part of southern Tibet, and has objected to other Indian infrastructure projects there. The Indian government is pushing projects in the eastern region following reports that Beijing could construct dams on a section of the Brahmaputra river, known as the Yarlung Tsangpo in China, that flows from Tibet through Arunachal Pradesh.

India is concerned that Chinese projects in the region could trigger flash floods or create water scarcity.

Both countries are working to improve infrastructure along their border regions since clashes in western Himalayas left 20 Indian and at least four Chinese troops dead in 2020.

Last week, India Foreign Minister Subrahmanyam Jaishankar met his Chinese counterpart Wang Yi in Kazakhstan, where the two agreed to step up talks to resolve issues along their border.

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In global survey, people say China exerts economic influence on their country

https://www.scmp.com/news/china/article/3269828/global-survey-people-say-china-exerts-economic-influence-their-country?utm_source=rss_feed

People in middle-income countries view China’s overseas economic influence more positively than those in high-income ones, according to a Pew Research Centre survey conducted in 35 nations.

“Large majorities in nearly all the nations we polled – spanning six continents and ranging in income level – say China has a great deal or a fair amount of influence on their country’s economic conditions,” the Washington-based think tank said in a report release on Monday.

In 10 of 13 countries, more people said China had a great deal of impact on their country’s economy than when the same question was asked five years ago, Pew said.

The biggest jump was in Brazil – from 26 per cent in 2019 to 51 per cent in 2024 – followed by India, Kenya, Argentina, Mexico, Tunisia and Turkey, with the increases ranging from 12 to 19 per cent.

Chile also saw a marked climb although in a different survey time frame. Sixty per cent of Chileans surveyed this year said China was influential in their economy, up from 29 per cent in 2013.

The findings were gathered after a survey of more than 44,000 adults in 35 countries conducted between January and May. The countries encompass the Asia-Pacific region, Europe, the Americas, Africa and the Middle East-North Africa region.

Much of the overseas economic influence is the result of China’s Belt and Road Initiative, which began more than 10 years ago. Now, China’s “global outward foreign direct investment is close to US$3 trillion”, the Pew report said.

The report also tracked how views of China’s impact on domestic economic conditions have changed over time.

In eight of the 15 countries where data from previous surveys was available, people’s views of China’s impact have become more negative, Pew found.

Japan saw the biggest jump – from 42 per cent in 2019 to 67 per cent in 2024 – of respondents who said China had a negative impact on their economic conditions.

Israel followed with a rise of 16 percentage points. Argentina increased by 8 percentage points, and South Korea and Tunisia by 7 points compared with 2019.

Mexico was the only country where more people considered China’s influence to be positive, growing from 53 per cent in 2019 to 60 per cent this year.

Looking at results from this year alone, the survey showed that views on China’s economic impact were divided between different income levels.

In the 17 middle-income countries surveyed, a median of 47 per cent of people said China has a positive influence on their country’s economy. When it comes to the 18 high-income countries polled, the survey shows that a median of 57 per cent of people found it negative.

The most negative view was found in the United States, where 76 per cent of respondents said China’s impact was negative, followed by Germany at 69 per cent, France at 68 per cent and Canada, Japan, South Korea and Australia at 67 per cent.

In Singapore, Malaysia, Nigeria, Thailand and Peru, 60 per cent or more respondents said China was having a positive impact.

Why China’s gains from multipolarity have yet to outpace US dominance

https://www.scmp.com/opinion/asia-opinion/article/3269716/why-chinas-gains-multipolarity-have-yet-outpace-us-dominance?utm_source=rss_feed

At the Shanghai Cooperation Organisation (SCO) summit in Astana, Kazakhstan, on July 4, Chinese President Xi Jinping emphasised that “the international landscape is undergoing rapid transformation”, a euphemistic way of saying that the post-Cold War international order dominated by the United States is coming to an end, to be replaced by “an equal and orderly multipolar world”.

De-dollarisation of the global economy has been cited by some as one of the main changes in international power play as China continues its rise at the expense of the US’ decades-long leadership. But dollar dominance in reserves, trade and transactions is still rock-solid, as signalled by the Atlantic Council’s Dollar Dominance Monitor.

The current geopolitical trend is actually a different one that goes against the narrative of US decline. If the international system is experiencing a rapid transformation, this is because “de-Sinicisation” of world trade is accelerating.

The European Union’s recent decision to impose provisional extra tariffs on Chinese-made electric vehicles – pending an anti-subsidy investigation that the EU Commission is due to conclude in November – is part of a series of protective measures adopted by countries or entities challenging what they say are Beijing’s market distortions.

The list is lengthening. In May, the United States announced new tariffs on US$18 billion worth of Chinese imports, including a 100 per cent duty on the import of Chinese-manufactured electric vehicles. Turkey and Brazil have their own trade barriers to Chinese electric cars. India says its car market is “well-protected” by high tariffs on the import of electric vehicles, and Canada is considering imposing penalties similar to those of the EU.

Chinese trade practices are also in the crosshairs of countries in Southeast Asia. Thailand is mulling anti-dumping actions against a host of Chinese goods, and Indonesia is preparing to do the same for textiles.

In some cases, Chinese carmakers could be able to absorb the costs of the new trade barriers or bypass imposed duties by manufacturing electric vehicles in third countries, but the stakes are higher.

Regardless of the economic impact of the hikes in tariffs, the increase in anti-Chinese trade protections confirms the anarchic tenor of the international system. It’s not just the US and its Western allies targeting Chinese exports with accusations of oversupply and dumping, but also countries in the so-called Global South, which Beijing sees as an alternative pole to withstand Washington’s containment policies.

Brazil is a founding member of the Brics grouping, which for over a decade until its recent expansion comprised China, Russia, India and South Africa. Turkey is part of the North Atlantic Treaty Organisation, but has increased its geopolitical closeness to China through its participation in the SCO as a dialogue partner, and is reportedly interested in joining Brics. Thailand has taken steps to join Brics too. Both Thailand and Indonesia are the major economies within the Association of Southeast Asian Nations, which is China’s largest export market.

At the SCO meeting in Kazakhstan, Xi said the organisation’s member countries should work on promoting the stability of industrial and supply chains. Other SCO leaders apparently support his vision. For instance, Kazakh President Kassym-Jomart Tokayev reportedly stressed the importance of synergies between China’s Belt and Road Initiative and the trans-Eurasian economic corridors passing through Kazakhstan.

Every nation wants to maximise its own national interests, and this also applies to a multipolar world. That’s why Chinese partners in the Global South will safeguard China-dominated supply chains if they believe doing so benefits them.

Turkey and Thailand are two cases in point when it comes to the increasingly ambivalent nature of trade relations between China and its non-Western interlocutors.

Even though Turkey levelled an additional 40 per cent duty on vehicles imported from China, Turkish electric vehicle producer TOGG is reportedly interested in a joint production venture with Chinese carmaker Guangzhou Automobile Group. It’s also worth mentioning that Ankara is negotiating with the Chinese regarding the construction of a nuclear power plant.

Concerned about the impact of cheap Chinese imports on Thai businesses, Bangkok is embracing protectionism. However, at the same time, China’s BYD said it will buy a 20 per cent stake in its Thai distributor Rever Automotive, after the Chinese carmaker opened its first factory in Thailand last week.

Overall, the international system may be more multipolar than a few years ago, but it remains extremely fluid. Moreoever, through its global transport and infrastructure scheme, China has tried to create a system of trade dependencies, but this has not translated into an automatic political alignment by Belt and Road Initiative participants.

China’s rival, the US, cannot escape such constraints either. Washington is reinforcing its tech cooperation with Japan and South Korea, but its key two allies in East Asia have so far been hesitant to follow the US government in raising duties against Chinese goods or blocking China’s acquisition of high-end technology.

There is however a difference between the two great powers. Beijing’s aversion to formal alliances does not help its efforts to prevent possible forms of decoupling or de-risking from trade partners. Instead, while systems of alliances, like those sponsored by the US, are intended to protect their members from external threats, they also have the political purpose of mitigating potential and actual tensions, and settling disagreement among allied nations.

Singapore’s hell theme park featuring Chinese folklore is dead serious about the afterlife

https://www.scmp.com/news/asia/southeast-asia/article/3269782/singapores-hell-theme-park-featuring-chinese-folklore-dead-serious-about-afterlife?utm_source=rss_feed

Gory grottos with demons impaling sinners on stakes and people drowning in a pool of blood are not part of your average theme park experience.

But at Hell’s Museum in Singapore, the main attraction at the Haw Par Villa park, visitors are welcomed to a kitschy, air-conditioned hell on Earth.

Inside the sprawling park complex with more than 1,000 statues and dioramas showcasing Asian culture, faiths and philosophy, Hell’s Museum exhibits various religious views on the afterlife.

Visitors are encouraged to learn about the 10 Courts of Hell through intense depictions of punishments for earthly sins.

At court number two, for instance, corruption gets you frozen in ice while rapists at court seven are thrown in boiling oil.

The 10 Courts of Hell are “the result of the mixing of four different religions and philosophies: Buddhism, Taoism, Hinduism, Confucianism”, said Eisen Teo, the chief curator of Hell’s Museum in the multicultural city state.

“The sculptures and dioramas are a visual dissection of many classics, stories and moral values that many Singaporeans have and are familiar with,” Teo said.

Visitor Gin Goldberg said she wasn’t so surprised to learn that many religions had differing opinions on the afterlife.

“One person’s heaven would be another person’s hell,” the American said.

The odd park stands apart from gleaming Singapore’s mainstream tourist attractions such as the luxury shops of Marina Bay Sands or the towering “supertrees” of Gardens by the Bay.

Haw Par Villa was built in 1937 by entrepreneur Aw Boon Haw, known for co-developing Asia’s much-loved Tiger Balm pain relief rub.

While fondly remembered by older generations, the park has had trouble attracting the Gen Z crowd and younger millennials, according to Journeys, the firm that manages the park.

To broaden appeal, it has held several rave parties and other private events – but not too near to religious exhibits.

“After they came here [for the parties] they fell in love with the quirky, eccentric park, with these cool sculptures. Fell in love with them, and they keep doing repeat visits,” said Savita Kashyap, Journeys’ executive director.

While Haw Par Villa isn’t just about the afterlife, and raves – it also displays scenes from Chinese folklore such as “Romance of the Three Kingdoms” – its hellish attraction remains the top draw.

But not for all.

One visitor from the Philippines said while leaving that she won’t be returning any time soon.

“It’s very scary,” she said.

Official indictment of fallen Chinese defence minister Wei Fenghe may include coded hint he was compromised by hostile force

https://www.scmp.com/news/china/politics/article/3269799/official-indictment-fallen-chinese-defence-minister-wei-fenghe-may-include-coded-hint-he-was?utm_source=rss_feed

China’s fallen former defence minister Wei Fenghe may have been compromised by a hostile force as the peculiar wording of the official indictment hinted.

In an unprecedented move, Wei, along with his successor Li Shangfu, was officially impeached by the Politburo headed by President Xi Jinping on June 27. The duo were expelled from the party and could face further legal action.

While Beijing has not revealed details of their offences, one particular phrase from the official impeachment against Wei caught the attention of seasoned Chinese experts.

Of the all top generals who fell in Xi’s war against corruption, Wei was the only one described as “zhongcheng shi jie” or “ being disloyal and losing one’s chastity”.

The hard-to-translate phrase “shi jie” has its origins in Chinese history, where it was used to describe the moral degradation of the scholar-gentry who formed the ruling class.

In the fourth century BC the word “jie” was a bamboo or bronze sceptre representing royal authority – while “shi” means to lose – so a betrayal or defection would imply the loss of this jie.

Later in the Song dynasty (which ruled from the 10th to 13th centuries), it referred to women perceived as unchaste, such as widows who remarried.

China watchers familiar with the Communist Party’s history note that it has used the phrase as a euphemism for betraying the party and being compromised by a hostile force.

A search of statements published by the Central Commission for Discipline Inspection (CCDI), the top civilian anti-corruption body, and its military counterpart shows that Wei is the only person to whom the phrase has been attached in the last decade.

A political scientist from Beijing’s Renmin university said the characters“shi jie” are most prominently associated with former Communist Party leaders such Xiang Zhongfa or Gu Shunzhang, who defected to the Kuomintang, or Nationalists, the Communists’ bitter rivals during the civil war.

“Ask any party historian, what are the names that pop out in their mind when you mention ‘shi jie” to them, they will tell you the story of Xiang Zhongfa, who was regarded as a major disgrace to the party,” said the researcher, who requested anonymity.

Xiang was the only general secretary, or head of the party, to defect in its history. He revealed all he knew about the party and its secret services to his Kuomintang captors in June 1931 just days before his execution. This gave them a chance to uproot the whole underground Communist network in Shanghai.

Gu, who once headed the party’s spy network, also defected to the KMT after his capture.

His defection led to the arrest of many prominent Communist leaders and even future premier Zhou Enlai only narrowly escaped. For that, Gu was often termed as “the most dangerous traitor in the history of the CCP” and often described as an example of “shi jie” in official histories or media reports.

Hong Kong military commentator Liang Guoliang said such a rare and harsh accusation suggests “Wei’s crimes are probably beyond taking bribes”.

He also contrasted it with the statement about Li, which although it was equally stern in tone, said only that he had “abandoned his original aspirations and lost his party principles” – a standard line used to criticise those who give or receive bribes.

“What exactly happened is certainly top secret and we won’t know what actually happened. But the term ‘shi jie’ seems to suggest that Wei’s conduct might have allowed China’s enemies to gain an advantage from it,” Liang said.

Wei was the first officer promoted to the rank of full general by Xi, who hosted a promotion ceremony for Wei only ten days after he became the head of the party and the military in November 2012.

Three years later he became the first head of the rocket force and was appointed defence minister in 2018 after Xi began his second term as president.

His two successors as commander of the rocket force, Zhou Yaning and Li Yuchao, were both ousted last year.

Alfred Wu, an associate professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy said the language seems to indicate “an external element” in Wei’s misdeeds.

“The word ‘shi jie’ is not applicable when the CCDI is only describing wrong behaviour that caused internal harm within the party or within China,” Wu said.

The statement also said Wei had “betrayed the trust” of the party’s central leadership and the CMC, “seriously polluting the political environment of the military, and causing great damage to the party’s cause, national defence and military construction, as well as the image of its senior leaders”.

Li and Wei will also face criminal charges from military prosecutors.

They are the latest senior PLA officers to be brought down in the ongoing anti-graft campaign.

Nine generals, including the former rocket force heads as well as a former air force chief and a number of CMC officials from the equipment development department were dismissed from the National People’s Congress in December.

Xi’s anti-corruption campaign has shown no signs of slowing down after entering its second decade. Last year the CCDI set a new record for the number of senior officials being investigated for corruption, while the first six months of this year set a further record for the numbers targeted.

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Decline of US Students in China Means Fewer Experts

https://learningenglish.voanews.com/a/decline-of-us-students-in-china-means-fewer-experts/7674670.html

The number of Americans studying in China has decreased by large amounts in recent years, from around 11,000 in 2019 to 800 this year.

Some people with knowledge of China worry that the U.S. could lose a generation of “China experts” as a result.

David Moser is an American who has lived and worked in China for more than 30 years. He is the former academic director of China Educational Tours (CET) in Beijing. He said, “I haven’t seen an American student in years.”

CET was launched in 1982. The organization helps bring American students to China for language and cultural studies. It used to have programs in several cities in China, including Beijing, Shanghai, Harbin and Hangzhou. Now, the program is only available in Beijing and Shanghai.

Moser thinks the U.S. has already lost a generation of students who could be Chinese experts 10 years from now.

During the 2011-12 school year, the number of American students in China was around 15,000. Since then, under Xi Jinping’s leadership and growing tension between the two countries, the number has decreased. At one point after the pandemic, the number dropped to 200 students.

Loss of understanding

Moser said having fewer people who understand China is a huge loss for the U.S. "You really need people who understand the two academic systems, the two college systems, and the way these things work in order to not make a huge mistake,” he said.

Compared with China, however, CET's projects in Taiwan have been attracting students.

Moser said CET started its first summer study abroad program at National Taiwan University in 2022. The program brought in more than 120 American students. He said the program was set up in Taiwan because too few American students wanted to go to China.

Moser believes that starting around 2008, air pollution and reports of human rights violations in China began to turn some American students away.

China's strict lockdown during the COVID-19 pandemic also had a large effect. At that time, many foreigners, including American students, left China.

In addition, a revised Chinese anti-spying law that took effect on July 1, 2023, has made some Americans worry about traveling to China. The law expands how the Chinese government can look into the activities of foreigners in China.

As the law negatively affected China, the Chinese government tried to build up exchange programs. In November 2023, President Xi offered to invite 50,000 Americans to China for exchanges and studies for the next five years.

Meghan Burke is a former sociology professor at Illinois Wesleyan University. When VOA asked her about the 800 American students in China today, she said that the low number was a problem for the United States.

"Language is key to understanding culture. So, any (limits) on learning Mandarin or other Chinese languages only hold back our ability to have a broader and more complex intercultural understanding,” Burke said.

In contrast, 300,000 Chinese students are studying in the U.S.

Moser, of CET, said the unequal number of students between the two countries is bad for both countries. However, he added that it is even worse for the U.S.

Moser said while the U.S. lacks knowledge of China, “The Chinese have very good knowledge of the U.S., of its culture, of its government, everything.”

I’m Andrew Smith.

 

Bo Gu reported this story for VOA News. Andrew Smith adapted the story for Learning English.

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Words in This Story

academic -adj. relating to work done in schools, colleges, universities

abroad -adj. relating to foreign countries or being in a foreign countries

key -adj. central or very important for doing or understanding something