Mistral点评

• China’s trade with Mexico is not reciprocal, says finance minister, echoing US concerns
• Top US envoy expects to meet with Chinese foreign minister during tour of Asian allies
• Pentagon to bolster response to China, Russia in melting Arctic
• Chinese university sacks professor after social media accusation of sexual harassment
• Ukraine’s foreign minister Dmytro Kuleba to visit China for talks in search for end to war
• Taiwan kicks off Han Kuang war games with live-fire drills closer to mainland China
• China could use ‘green cards’ to lure foreign scientists
• CrowdStrike-Microsoft outage: China avoids disruption on back of cybersecurity drive
• Hong Kong talent trawl ‘should focus on quality over quantity’ after China’s third plenum
• Expect same China policy from US if Kamala Harris wins the White House, or worse: analysts
• China’s rural land reform could be a cash cow for farmers after bold move at third plenum
• Nvidia preparing a version of new Blackwell AI chip for China market, sources say
• China’s third plenum vows to support ‘capable’ private sector to lead tech innovation
• Nepal’s political shift complicates its India-China balancing act
• Chinese leadership says retirement age should rise in ‘voluntary and flexible’ way
• China’s housing sector could be mired in a slump despite possible rescue measures: analysts
• China boosts infrastructure checks after second deadly highway collapse in 3 months
• New health trend hits China workplaces – jogging with laptops, lifting lunch packs
• Promises abound of deepened reform, but what did China’s third plenum tell us?
• Bohai Bank to sell US$3.5 billion in loans to China’s bad banks in bid to shore up capital
• China’s central bank cuts interest rates, moving to put more pep into the economy
• China’s youth, anxious over job market, trust in science to secure their future
• What’s wrong with professional football in China?
• Century-old Hong Kong business admits importing fermented bean curd from mainland China
• India’s China loophole concerns fuel Asean free trade deal rethink
• RNA could be used for safer and more effective gene therapies, Chinese study finds
• A Chinese actor was enslaved in a compound running online scams
• China and Philippines reach tentative deal to defuse tensions at South China Sea flashpoint
• How Nato’s China focus obscures greater threats coming from within
• China cuts loan prime rates, key short-term rate to support economy
• China’s third plenum holds out hope for debt-hit local governments with funding reform
• Philippines risks Beijing’s ire as it weighs using allies for South China Sea resupply runs
• The next 10 years: Tsinghua’s Yan Xuetong talks Trump, Taiwan and what it means for China

China’s trade with Mexico is not reciprocal, says finance minister, echoing US concerns

https://www.scmp.com/news/china/article/3271476/chinas-trade-mexico-not-reciprocal-says-finance-minister-echoing-us-concerns?utm_source=rss_feed

Sino-Mexican trade is not reciprocal and the North American country must review China’s practices, its finance minister said on Saturday, echoing American concerns about industrial overcapacity.

Mexico buys “US$119 billion a year from China and we sell US$11 billion”, according to Rogelio Ramirez de la O, who accused Beijing of boosting its share of global exports “at the expense of North America”.

Washington had “facilitated China’s entry into the World Trade Organization, opening the door for [Beijing] to increase its production destined for North America – not only for the US but also for Mexico”, he continued.

“China has increased its global exports from 3.8 per cent to 14 per cent in just 22 years, and this increase has largely come at North America’s expense,” Ramirez de la O said.

Meanwhile, the region’s share of global exports “has fallen from 19 per cent in 2000 to 13 per cent in 2022”, he added.

Ramirez de la O offered the critical observations during an event in the Mexican city of San Luis Potosi attended by President Andres Manuel Lopez Obrador, President-elect Claudia Sheinbaum and incoming economy minister Marcelo Ebrard.

Over the period from 2000 to 2022, China’s share of global GDP surged by more than 15 per cent while North American countries experienced a decline, Ramirez de la O said.

“It is only logical to expect that both Americans and Mexicans demand our fair share of this global demand.”

Ramirez de la O believed the government had to make Mexicans aware that “it is necessary to produce more than we consume because we are heavily dependent on the Chinese for basic products for our households”.

This is why “we are now considering making changes to investment policy and paying more attention to foreign investment, focusing on production policy”, he said.

And despite the USMCA – a 2020 free-trade pact between the United States, Mexico and Canada – the region “remains very dependent on imports from China,” Ramirez de la O warned.

Canada depends on China for 13.5 per cent of all its consumption, he said, describing US dependence as even higher at 16.5 per cent and Mexico’s at 19.6 per cent.

In contrast, Ramírez de la O noted, China was only 8.8 per cent dependent on imports from North America.

Ebrard, a former Mexican foreign minister whom Sheinbaum has chosen to handle the country’s economy portfolio, reiterated Ramirez de la O’s message.

He hailed the fact that the US is Mexico’s main trading partner and said he planned to continue integrating the two economies when Sheinbaum takes office in October.

Tensions between Beijing and Washington have recently sharpened American scrutiny of Mexico’s relationship with China.

In December, US Treasury Secretary Janet Yellen visited Mexico to discuss strengthening financial cooperation between the two countries and defended a mechanism to monitor foreign investments in Mexican territory.

The goal, Biden administration officials said, was to prevent Chinese companies from skirting tariffs and sanctions by taking advantage of USMCA rules.

Former American president and 2024 Republican nominee Donald Trump has also been vocal on the issue.

During a speech last week at the Republican Party’s national convention in Milwaukee, Wisconsin, he complained about large Chinese factories being built on the US-Mexico border.

“They’re being built by China to make cars and to sell them into our country, no tax, no anything,” said Trump. “We have long been taken advantage of by other countries. And think of it, oftentimes these other countries are considered so-called allies. They’ve taken advantage of us for years.”

Top US envoy expects to meet with Chinese foreign minister during tour of Asian allies

https://www.scmp.com/news/asia/southeast-asia/article/3271480/top-us-envoy-expects-meet-chinese-foreign-minister-during-tour-asian-allies?utm_source=rss_feed

US Secretary of State Antony Blinken is expected to meet with Chinese Foreign Minister Wang Yi this week, with issues to include Beijing’s purported aid for Russian military against Ukraine and its assertive behaviour in the contested South China Sea.

The discussion is expected on the sidelines of the Association of Southeast Asian Nations meeting, which runs through Sunday in Vientiane, Laos.

“We do anticipate that he’ll have an opportunity to engage with Wang Yi, and we’ll have more details to announce,” Daniel Kritenbrink, the assistant secretary of state for East Asian and Pacific affairs, said on Monday.

Kritenbrink was previewing Blinken’s Asian tour, which is scheduled to run from Tuesday through August 3, and includes stops in Vietnam, Japan, the Philippines, Singapore and Mongolia.

Blinken’s visit to Asia comes as regional allies’ uncertainties rise about the direction of Washington’s foreign policy. The US elections in November and the possible return of former president Donald Trump to the White House have raised the question of whether the US might turn toward isolationism.

Moreover, the announcement by President Joe Biden on Sunday that he was withdrawing from the race and endorsing Vice-President Kamala Harris for the Democratic Party nomination could only add to the concerns.

While not directly addressing the US political climate, Kritenbrink said that “apart from our engagement with Asean and Southeast Asian partners, this trip is also an opportunity to highlight the unprecedented work we’ve done to strengthen relationships with our treaty allies in the Indo-Pacific”.

In a separate briefing Monday, though, State Department spokesman Matthew Miller was asked whether the end of Biden’s re-election bid had prompted internal discussions about cancelling Blinken’s Asia trip.

“We still have an eighth of the president’s term remaining,” he responded.

“A lot of important work remains to be done,” Miller added, and Biden “expects our team to continue to focus on getting that work done”.

Neither the US nor China is a member of Asean, but they are regularly invited to participate in associated regional meetings, where they often hold talks on the sidelines.

On Monday, Kritenbrink fell short of directly confirming the meeting but cited a “long-standing precedent” to meet with “a number of counterparts, including his Chinese counterpart Wang Yi” when Blinken travels to the region for multilateral events.

He said that during the Asean regional meetings, Blinken would emphasise “promoting adherence to international law in the South China Sea” and “speak out” against Russia’s “illegal war” against Ukraine.

Blinken and Wang last met in April in Beijing, for nearly six hours. During those talks he raised concerns about Beijing’s alleged support for Russia’s military industry. Earlier this month, Washington, and its allies in Europe, accused Beijing of being a “decisive enabler” of Moscow’s “war machine” and asserted that Europe’s security was connected to security in the Indo-Pacific.

China has said it “does not provide weapons to the parties to the conflict and strictly controls the export of dual-use articles, which is widely applauded by the international community”.

Meanwhile, five Asean member states – Vietnam, Malaysia, the Philippines, Brunei and Indonesia – remain party to the territorial dispute with China in the South China Sea. Since 2018, Asean has negotiated with Beijing on a code of conduct to avoid conflict in the hotly contested economically vital waterway. The talks are expected to conclude by 2026.

On Sunday, Beijing and Manila announced they had reached “an understanding on the provisional arrangement” for Philippine resupply missions to its long-grounded warship, the BRP Sierra Madre, which was intentionally beached 25 years ago to serve as an outpost for its claim to Second Thomas Shoal.

The deal follows incidents of Chinese vessels colliding with Philippine supply boats and coastguard ships, and using high-pressured water cannons to block the resupply missions.

On Monday Kritenbrink welcomed the agreement, reiterating Washington’s strong support for Manila, its oldest mutual defence treaty ally in Asia.

“As the Philippines’ ally, we do support the diplomacy that they’ve chosen to conduct,” he said, adding that the key was to “ensure that it is implemented and that China ceases its provocative and destabilising activities”.

In Hanoi, Blinken is to attend the funeral of Nguyen Phu Trọng, the general secretary of the Vietnam Communist Party, which is scheduled for Thursday and Friday. According to the State Department, Blinken will “further underscore the strength of the Comprehensive Strategic Partnership” with his Vietnamese counterparts.

Blinken is also to travel to Manila and Tokyo. On Sunday, he is scheduled to meet with his counterparts from India, Japan, and Australia, the other nations in the Quad, an informal bloc aimed at countering China’s influence in the Indo-Pacific.

Along with US Defence Secretary Lloyd Austin, Blinken will also meet their Japanese counterparts to build on the trilateral partnerships the US has developed with South Korea and the Philippines.

On July 30, the US and Philippine foreign and defence secretaries will hold a 2+2 dialogue. Blinken and Austin are also expected to meet Philippine President Ferdinand Marcos Jnr, who took office two years ago. Since then, the US has gained access to four more military sites in the country.

“The officials will reaffirm our nation’s shared vision of a free and open Indo-Pacific region and support for adherence to international law in maritime domains,” Kritenbrink said.

“They will discuss ways to deepen coordination on shared challenges, including in the South China Sea, while also advancing our critically important bilateral economic agenda,” he added.

Pentagon to bolster response to China, Russia in melting Arctic

https://www.scmp.com/news/world/united-states-canada/article/3271479/pentagon-bolster-response-china-russia-melting-arctic?utm_source=rss_feed

The United States will expand its military readiness and surveillance in the Arctic given heightened Chinese and Russian interest coupled with new risks brought on by accelerating climate change, the Pentagon said in a new report.

Measures are needed “to ensure the Arctic does not become a strategic blind spot” as melting ice makes the region more accessible economically and militarily, according to the Defence Department’s 2024 Arctic Strategy released on Monday.

“We’ve seen growing cooperation between the PRC and Russia in the Arctic commercially, with the PRC being a major funder of Russian energy exploitation in the Arctic,” Deputy Secretary of Defence Kathleen Hicks told journalists, using an abbreviation for the People’s Republic of China.

Priorities include better surveillance of the vast region, as well as research into space-based missile warning systems, deeper coordination across Nato and with Canada through the North American Aerospace Defence Command, and improved satellite and data communications.

The Pentagon also said it needs better modelling and forecasting of the rapidly changing environment to prepare for potential combat in increasingly unpredictable conditions so far north.

“The United States is an Arctic nation, and the region is critical to the defence of our homeland, the protection of US national sovereignty and our defence treaty commitments,” Defence Secretary Lloyd Austin said in an attached memo. “Major geopolitical changes are driving the need for this new strategic approach to the Arctic.”

The Pentagon highlighted concern over a “growing alignment” between China and Russia, Washington’s two top national security competitors.

Russia’s invasion of Ukraine has isolated it from the seven other nations that ring the Arctic, all of them now members of Nato, and made it more dependent on China, which is pursuing its own agenda in the region. Arctic countries in North America and Europe have also found themselves facing new threats, from GPS jamming to alleged spy balloons.

China, while not an Arctic nation, is attempting to gain influence, access “and play a larger role in regional governance”. It operates three icebreakers in the region for dual civil-military research and has tested unstaffed underwater vehicles and polar-capable fixed-wing aircraft, the Pentagon said.

The region’s strategic importance is also changing as sea ice melts, meaning the Bering Strait between Alaska and Russia and the Barents Sea north of Norway “are becoming more navigable and more economically and militarily significant”, according to the report.

Russia has in recent years strengthened its military presence in the Arctic by reopening and modernising several bases and airfields abandoned since the end of the Soviet era, while China has poured money into polar exploration and research.

Russia has “a clear avenue of approach to the US homeland through the Arctic” and could use its capabilities there to stop the US from responding to crises in Europe or the Indo-Pacific region. Its maritime infrastructure could also allow it to control the Northern Sea Route, even in areas where it has no legal claims, according to the report.

“The Arctic may experience its first practically ice-free summer by 2030, and the loss of sea ice will increase the viability of Arctic maritime transit routes and access to undersea resources,” the report says.

“Increases in human activity will elevate the risk of accidents, miscalculation, and environmental degradation,” and US forces “must be ready and equipped to mitigate the risks associated with potential contingencies in the Arctic.”

Additional reporting by Agence France-Presse

Chinese university sacks professor after social media accusation of sexual harassment

https://www.theguardian.com/world/article/2024/jul/22/chinese-university-sacks-professor-after-social-media-accusation-of-sexual-harassment

A top Chinese university has fired a professor, a day after a graduate student accused him of sexual harassment on social media in a rare public allegation and posted recordings as evidence, drawing widespread support.

The woman, who identified herself as Wang Di, said she is studying in a doctoral programme at Renmin University of China’s school of liberal arts. She posted a 59-minute video on Sunday on the Weibo social media platform in which she said her supervisor, an ex-vice dean and former Communist party representative at the university in Beijing, physically and verbally abused her.

She also said that for more than two years after she rejected him, he assigned her many tasks, scolded her and threatened that she would not graduate. She also posted audio clips that she said were evidence of the harassment. In one, a man can be heard trying to kiss a woman, who keeps saying: “No, no, teacher.”

“At this moment, I can no longer endure it and have nowhere to retreat, so I am speaking out,” she wrote. She demanded that the professor be punished and a new supervisor be appointed for her. She wore a mask in the video but held up an identification card.

Her post drew 2.2m likes as of Monday evening, with many users leaving comments in support of the student.

Renmin University said on Monday that, after an investigation, it had concluded the complaints against the professor were true. In addition to sacking him, it also revoked his party membership and reported the incident to authorities in accordance with the law, it said in a statement on Weibo.

It said the academic had “seriously betrayed the original mission of teaching and educating” and that his acts violated party discipline and university rules.

The professor did not immediately respond to a request for comment.

After the university announced its decision, the woman’s post on Weibo disappeared.

In China, public accusations of sexual harassment have become rare in recent years, following an increase during a brief #MeToo movement that was swiftly snuffed out by the government. The ruling Communist party views powerful social movements as a potential threat to stability and its hold on power.

In June, a Chinese journalist who promoted women’s rights as part of the #MeToo movement was sentenced to five years in prison on charges of incitement to subvert state authority, according to her supporters.

In one of the most high-profile cases, the former Chinese tennis star Peng Shuai disappeared from public view after accusing former high-level official Zhang Gaoli of sexual assault in 2021. Her accusation was quickly scrubbed from the internet and discussion of it remains heavily censored.

Ukraine’s foreign minister Dmytro Kuleba to visit China for talks in search for end to war

https://www.scmp.com/news/china/diplomacy/article/3271434/ukraines-foreign-minister-visit-china-talks-search-end-war?utm_source=rss_feed

Ukrainian Foreign Minister Dmytro Kuleba is set to begin a high-stakes visit to China on Tuesday, with the mission focused on a potential Chinese role in restoring peace in Ukraine.

“The main topic of discussion will be the search for ways to stop Russian aggression and China’s possible role in achieving a sustainable and just peace,” the Ukrainian foreign ministry said in a statement, adding that both nations would also discuss the state of bilateral relations and prospects for development.

The four-day visit was initiated by Chinese Foreign Minister Wang Yi, according to statements from both country’s foreign ministries on Monday.

In a video speech released on Weibo, China’s equivalent of X, Kuleba said they would discuss matters such as the “restoration of peace, deepening our bilateral dialogue, and expanding trade and economic cooperation”.

This will be Kuleba’s first visit to China as foreign minister since the start of the war, and follows talks between Chinese foreign vice-minister Sun Weidong and Andriy Sybiha, Ukraine’s first deputy foreign minister, in Beijing last month.

During those talks, the Ukrainian official urged Beijing to send a delegation to last month’s peace summit in Switzerland. China did not attend, and said the participation of both warring parties was a prerequisite for any meaningful peace summit.

Ukrainian President Volodymyr Zelensky had openly criticised Beijing for trying to dissuade other countries from attending the peace conference.

Last week, Zelensky announced that his country aimed to hold another peace conference by November, focusing on his vision for peace in Ukraine, and urged Russian representatives to attend.

Kyiv has been seeking to improve communication with Beijing over the Russian invasion of Ukraine. In March, Kuleba said China held “great potential” to help end the conflict, and that both nations remained confident in each other.

Kuleba met Wang in February on the sidelines of the Munich Security Conference, when Wang reassured him that China would not sell any lethal arms to either side.

During a tour of Europe in May, Chinese President Xi Jinping also sought to counter criticisms that his country was supporting Russia’s war in Ukraine, telling European leaders that Beijing would not sell weapons to Russia and would control the flow of dual-use goods to the Russian military.

Beijing has stressed it is neutral in the conflict but has faced disapproval for offering economic support to Moscow amid international sanctions. China has also not condemned Russia’s invasion.

In May, China and Brazil presented a joint proposal to de-escalate the war, calling for an international peace conference “at a proper time that is recognised by both Russia and Ukraine, with equal participation of all parties as well as fair discussion of all peace plans”.

In the proposal, they urged relevant parties to adhere to three principles for de-escalation: no expansion of the battlefield, no escalation of fighting, and no provocation by any side.

Taiwan kicks off Han Kuang war games with live-fire drills closer to mainland China

https://www.scmp.com/news/china/politics/article/3271439/taiwan-kicks-han-kuang-war-games-live-fire-drills-closer-mainland-china?utm_source=rss_feed

Taiwan has kicked off its annual Han Kuang war games to assess its forces’ capacity to tackle a full-scale attack from the People’s Liberation Army.

The five-day mega exercise beginning on Monday also coincides with annual drills to test residents’ response to missile and air raids from across the Taiwan Strait.

Unlike previous Han Kuang exercises, which were pre-rehearsed, this year’s games will focus on mimicking actual combat as closely as possible, according to Taiwan’s defence ministry.

“These [real-life battlefield] scenarios guide officers and soldiers to validate through exercises the feasibility of joint operation plans and the ability of all military units to execute these plans in a real combat situation,” the ministry said in an earlier statement.

This is also the first Han Kuang exercise since William Lai Ching-te – branded by Beijing as an “obstinate separatist” – took office as Taiwanese leader in May.

At least two regular features have been cancelled for this year’s exercise.

There will be no exhibition drills staged for the island’s leaders, and no live-ammunition exercises in the island proper.

Rather, the live-fire component of the drills have been moved to Taiwan’s outlying islets closer to the mainland coast, including the defence outposts of Matsu and Quemoy, also known as Kinmen.

Monday’s drills tested how far the military could sustain and preserve its combat power in the event of a full-scale PLA attack.

Dozens of warplanes based in western Taiwan took off on Monday morning for the underground Jiashan base in the eastern county of Hualien and the nearby Chihang base in Taitung county, according to the ministry.

The planes included F-16 fighter jets, Indigenous Defence Fighters, Mirage-2000 fighters, as well as P3C anti-submarine and E2K early warning aircraft.

With western Taiwan just a short hop from the mainland Chinese coast, fighter jets based there are seen as more vulnerable to direct cross-strait strikes. Sending them to the east would help to preserve forces for a counterstrike, defence ministry officials said.

Major naval vessels, including Taiwan’s new “carrier killer” Tuo Jiang-class corvettes, also left their home ports on Monday morning and sailed to designated locations to take on “enemy” vessels in combat scenarios. Naval mines were also deployed to assist the ships in fending off the simulated PLA attack.

Later in the day, troops also practised defending the capital Taipei and preventing the key political and financial hub from being bombarded in the event of a PLA “decapitation” strike aimed at wiping out the top leadership or command centre.

The games are also testing nighttime troop performance – with drills held around the clock – and the ability to safeguard critical infrastructure in Taipei and boost key supply line resilience in the event of a blockade by the PLA.

A major area of focus this time is information systems competence, including troop response to loss of contact with central command, according to Admiral Mei Chia-shu, the chief of general staff.

Mei said the drills would also test how well soldiers from different units were able to independently implement rules of engagement in combat situations where communication with higher command is disrupted or cut off.

The largest war games of the year are being held in conjunction with the annual Wan An air raid drills, which simulate missile and warplane attacks from the PLA.

On Monday, vehicles and pedestrians were taken off the streets for 30 minutes as the four-day drills took off, with people asked to stay indoors or move to local air raid shelters.

Beijing sees Taiwan as part of China, to be reunited by force if necessary. Like most countries, the United States does not recognise Taiwan as independent but opposes any attempt to take the island by force and is legally bound to supplying it with defensive weapons.

Cross-strait relations have worsened since Lai, of the independence-leaning Democratic Progressive Party, was elected in January. Beijing labelled the result of the vote as “unacceptable”, warning that his leadership would bring war to Taiwan.

Lai’s inaugural address on May 20 provoked Beijing further when he declared that Taiwan and the mainland were “not subordinate to each other”.

In response, Beijing launched large-scale military drills around Taiwan, simulating a blockade.

China could use ‘green cards’ to lure foreign scientists

https://www.scmp.com/news/china/science/article/3271453/china-could-use-green-cards-lure-foreign-scientists?utm_source=rss_feed

China is considering changes to the immigration system to attract more foreign scientists, including offering permanent residency.

In a resolution published after last week’s third plenum, a key policy meeting, the Communist Party said it hopes to “improve the support mechanisms for recruiting talent from overseas and create internationally competitive personnel systems”.

“We will also explore avenues for establishing an immigration system for highly skilled personnel,” the resolution read.

In a written document released on Monday, President Xi Jinping said the country’s “innovation capacity falls short of the requirements for high-quality development” and warned it is too reliant on key and core technologies controlled by others.”

Alexey Kavokin, a Russian-French theoretical physicist and director of the International Centre for Polaritonics at Westlake University in Zhejiang province, said he would welcome a Chinese equivalent of the US green card scheme.

“I would be delighted to have a Chinese green card. Currently, I have a residence permit and a work permit. [Renewing] them was not so easy,” Kavokin said.

He said his own experience had highlighted some of the difficulties foreigners face in China, such as salary payments being delayed and needing permission to travel out of the country.

He also said that his funds could be frozen without warning or explanation and international sanctions mean that Russian citizens like him are unable to transfer money out of the country.

“The decision making system in China is far from being transparent. Frequently, administrative officials avoid assuming responsibility for any decision. Requests are passed from one department to another endlessly. Rules and policies are invented to treat specific cases and they are quickly forgotten later,” he said.

“More transparency and easier communications between foreign scientists and administrative officials would help [with] eliminating mutual mistrust.”

Despite these barriers, Kavokin said that “China is rapidly becoming a scientific superpower, the progress in many research fields is tremendous, and being a part of it is enjoyable”.

Kovokin said he had moved to China in 2018, leaving behind a professorship at a British university he had held for over a decade, but he had been attracted by the “exceptional research opportunities” on offer, including 100 million yuan (US$13.75 million) in funding.

“This size of funding would not be possible to secure in Europe. Thanks to this funding, I was able to build the International Centre for Polaritonics which is one of the world leading research centres in my area,” he said.

“China is very attractive for physicists, in general, because of excellent funding opportunities, a multitude of very well equipped laboratories, [and] motivated students. Once the bureaucratic obstacles are removed, it could become a Mecca for physicists, similar to how it used to be in the USA in the 1950s-1960s.”

The resolution also pledged to “expand international science and technology exchanges and cooperation, encourage the establishment of international science and technology organisations in China” and improve communication between Chinese groups and their foreign counterparts.

It also said the country needs to become more self reliant in the face of growing pressure from the United States and its allies, saying: “We will establish risk monitoring, early warning, and response systems to safeguard science and technology security, and ensure self-sufficiency in scientific and technological infrastructure.”

Qi Mingjing, a professor at Beihang University’s school of energy and power engineering, said he was worried that international exchanges are being “severely hampered” and that China could only keep up with the latest technological developments by opening the door to innovation.

The US has long offered the most attractive environment for aspiring scientists around the world – including Chinese scientists.

But Fan Xiulin, a researcher at Zhejiang University who has previously lived in the US, said many of the country’s scientific facilities are on a par or even better than those available in America and Europe.

Fan said the low crime rate was another potential attraction. “Having lived in the United States for about six years, I personally feel that there is another advantage [for attracting international talent], which is that the country is much safer than the United States in terms of personal security.”

But he also said there are major barriers to hiring foreign researchers, including the language barrier.

The resolution also committed to do more to develop domestic researchers by “identifying, selecting, and training young innovators and ensuring better pay and benefits for our young scientists and engineers”.

It continued: “Relevant systems will be refined to ensure that researchers can concentrate on research.”

Xi also said public research institutes would be allowed more flexibility than other public institutions, giving them greater control over funding and resources and help develop young talent in disciplines with “national strategic importance”.

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CrowdStrike-Microsoft outage: China avoids disruption on back of cybersecurity drive

https://www.scmp.com/tech/policy/article/3271451/crowdstrike-microsoft-outage-china-avoids-disruption-back-cybersecurity-drive?utm_source=rss_feed

Mainland China’s self-sufficiency drive in cybersecurity enabled the world’s second-largest economy to emerge unscathed from Microsoft’s global outage of cloud computing services, according to industry insiders, after a botched software update by US tech firm CrowdStrike.

While that disruption affected 8.5 million Microsoft Windows-based devices worldwide, China saw only minimal impact in installations numbering “tens of thousands” at mostly local offices of foreign enterprises or their mainland joint ventures, according to a report on Sunday by cybersecurity systems provider QAX in Beijing.

“The use [of CrowdStrike cybersecurity products] in government, state-owned enterprises and large private corporations is extremely small,” the report said.

QAX, a spin-off from the enterprise business of Shenzhen-listed 360 Security Technology, said organisations on the mainland should “prioritise domestic suppliers” of cybersecurity software, “especially given the current complex international environment”.

Citing Beijing’s efforts since 2018 to promote the development of alternative local solutions for cybersecurity, QAX said: “[We] must ensure that security software, tools and platforms, which are as significant as operating systems, should be self-supporting and controllable.”

The global outage stemmed from the latest version of CrowdStrike’s Falcon Sensor software, which was meant to make the computer systems of its clients more secure against hacking by updating the threats it defends against. A faulty code in the update, however, resulted in one of the most widespread tech outages in recent years for many companies, including banks and airports, that use Microsoft’s Windows operating system and cloud computing services.

CrowdStrike subsequently released information to fix affected systems.

Emerging largely unharmed from the global tech disruption shows that China’s push for “safe and controllable” computing systems has paid off, while speeding up the development and deployment of domestic cybersecurity solutions.

QAX estimated that it would take “weeks” for many organisations around the world to fully recover from the outage.

Chinese cybersecurity stocks gained the most on Monday compared with other industries, with an average increase of 4 per cent, according to financial information provider Wind, which compiles an index of more than 40 companies in the sector listed in Shanghai and Shenzhen.

360 Security Technology, a Chinese rival to CrowdStrike, said in a social media post last Friday that its technology was “more reliable, stable, comprehensive and intelligent”, compared with those from the US firm.

“When selecting endpoint security software, it is important to fully evaluate its defence capabilities to avoid potential security risks and ensure that business continuity and data security are not threatened,” 360 Security Technology’s post said.

The massive tech outage has come years after CrowdStrike blamed China for cybersecurity incidents at US firms. As early as 2015, CrowdStrike reported several Chinese cyberattacks against US technology and pharmaceutical companies, which were denied by China’s foreign ministry. In its latest annual report, CrowdStrike said the “China-nexus adversaries increasingly targeted third-party relationships” in 2023.

David Ip Ching-yeung, the founding chairman of the Hong Kong China Network Security Association, said the mainland is not immune to disruptions because it is possible for every software development company to make mistakes.

As such, Ip said governments and businesses must have redundant systems. That means when the primary system collapses, the backup can take over to ensure continuity of operations.

China’s cybersecurity market was projected to grow 13.5 per cent annually from 2022 to reach US$23 billion by 2027, faster than the global industry’s annual growth of 11.7 per cent in the same period, according to tech market research firm IDC.

United States Federal Trade Commissioner Lina Khan, meanwhile, wrote in a post on X that the recent outage “reveals how concentration can create fragile systems”. She said: “Concentrating production can concentrate risk, so that a single natural disaster or disruption has cascading effects.”

Hong Kong talent trawl ‘should focus on quality over quantity’ after China’s third plenum

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3271457/hong-kong-talent-trawl-should-focus-quality-over-quantity-after-chinas-third-plenum?utm_source=rss_feed

Hong Kong’s talent trawling schemes should focus on quality over quantity and seek a diverse range of professionals to meet the central government’s expectation that the city becomes a hub for international high-fliers, experts have said.

They also called on local authorities to offer more support to new arrivals, as many faced a wide range of challenges such as getting their own businesses started, finding work and settling their families.

Beijing has already thrown its weight behind Hong Kong’s efforts to become a hub for international high-end talent, with the Communist Party last week passing a resolution at the third plenary session for its 20th Central Committee.

The paper said central authorities backed Hong Kong’s global talent trawl, while also calling on the city to improve the mechanism so it could better support the country’s efforts to open up.

In 2022, the city’s current administration under Chief Executive John Lee Ka-chiu launched a series of measures that sought to attract fresh talent and help counter an emigration wave.

The policies include the Top Talent Pass Scheme, which is open to candidates who earned more than HK$2.5 million (US$320,000) over the past 12 months and graduates of the world’s top 100 universities.

The scheme has received more than 85,000 applications, with 68,000 being approved, between its launch in late 2022 and May of this year.

Combined with the other policies, the city has welcomed more than 130,000 people by June, surpassing the government’s target of bringing in 105,000 over three years.

Alexa Chow Yee-ping, managing director of AMAC Human Resources Consultants, said the government needed to review the Top Talent Pass Scheme’s criteria if it wanted to attract international high-end talent.

“The requirements of the Top Talent Pass Scheme are loose … those graduates from the top 100 universities and with three years of experience or less are surely young talent, but they are not quite high-end,” she said.

“With most talent coming from the mainland, how are we different from a mainland city?”

Among those admitted under the city’s talent schemes, only 25 per cent of successful candidates were from outside mainland China.

For the Top Talent Pass Scheme, more than 90 per cent of approved applicants were from across the border.

Chow urged the government to roll out more incentives to lure high-earners, who accounted for fewer than 30 per cent of all applications, with her suggestions including more support for those starting their own businesses.

Authorities could tighten requirements for policies targeting younger talent, opting for candidates with master’s degrees or doctorates rather than bachelor’s degrees, she added.

Chow said that more incentives were needed to diversify the talent profile, which was dominated by mainlanders.

“We have had a slow recovery from the pandemic compared with other parts of the world. We need more promotions to tell the world that Hong Kong still has potential and opportunities – that’s what talent is looking for,” she said.

Authorities could also increase local university quotas for international students, who would have better adapted to the city by the time they graduated and were more likely to stay if they found work, she added.

Lawmaker Shang Hailong, who is also chairman of the Hong Kong Top Talent Services Association, said the supply of high-paying jobs in the city could hardly keep up with the demand created by the influx of talent.

He said authorities needed to encourage a wider variety of companies to set up or expand their operations in Hong Kong to “provide a bigger stage for talent to shine”.

He also observed a growing demand among high-earning talent to start their own businesses as they were struggling to find other high-paying jobs and their expertise had limited demand in the city, citing electric car designers as an example.

“They are not starting traditional businesses, but artificial intelligence, biotech, Web3, and new energy, which they have a strong confidence in … but they are new to the city and need more support, ranging from funding to office space.”

He said the current support measures for business starters were disorganised, with companies of different scales and types being handled by different government offices.

Shang instead urged authorities to establish a one-stop service that supported businesses of all sizes.

The government in the long run should also offer more details about the types of talent it needed, citing how some places stipulated they wanted patent holders and the winners of internationally recognised awards.

Armstrong Lee Hon-cheung, managing director of Worldwide Consulting Group, said the government could roll out specific incentives for high-end talent, such as tax reductions, housing and education allowances.

Lee said the government’s plan to transform part of the New Territories into an innovation and technology hub under the Northern Metropolis mega project could be used as a lure for high-end professionals.

“The Northern Metropolis will create abundant job opportunities for such talent … the government should build more flats for talent there and liaise with other cities in the Greater Bay Area about the talent they need to reduce competition.”

The bay area refers to Beijing’s ambitious initiative to turn Hong Kong, Macau and nine mainland cities into a hi-tech powerhouse by 2035.

The Labour and Welfare Bureau said on Monday that the government was “deeply encouraged by the resolution” and pledged to continue to attract, retain and nurture sufficient talent to maintain Hong Kong’s competitiveness.

The government was reviewing the Top Talent Pass Scheme and other admission schemes to ensure they effectively addressed the city’s staffing demands, a spokesman said.

“In the review, we will take heed of the operational experience in the implementation of various talent admission schemes, the current labour market situation and feedback from various quarters of the community,” he said.

Expect same China policy from US if Kamala Harris wins the White House, or worse: analysts

https://www.scmp.com/news/china/diplomacy/article/3271456/expect-same-china-policy-us-if-kamala-harris-wins-white-house-or-worse-analysts?utm_source=rss_feed

US President Joe Biden’s abrupt withdrawal and endorsement of Vice-President Kamala Harris on Sunday has paved the way for a presidential bid that would largely follow Biden’s China policy, if she is elected, according to analysts.

But there were uncertainties over whether she could win the Democratic Party’s nomination due to her mixed record while in political office, they said.

Chong Ja Ian, a US-China relations specialist at the National University of Singapore, said he expected Harris to follow the China policy set by Biden.

“A Harris administration may be more consistent and systematic in its approach to policies toward [China] … Harris has been on record supporting human rights issues that [China] and the [Communist Party of China] finds critical,” he said.

Harris is considered to be tough on issues such as human rights in Hong Kong and Xinjiang, as well as Washington’s Indo-Pacific strategy. She has stepped up contacts with US partners in the region and pledged US commitment to help counter China’s military activities in the disputed South China Sea.

She met with Taiwanese leader William Lai Ching-te at the inauguration of Honduran President Xiomara Castro in 2022 and has not flinched over continued US support for the island, while also being vocal in her support for the US Chips and Science Act to compete with China’s semiconductor industry.

Shen Dingli, an international relations analyst based in Shanghai, said it remained unclear how Harris’ foreign policy would be different since she has mostly echoed Biden’s foreign policy on the international stage.

However, to boost her chances during a heated election campaign, Harris could propose tougher policies on China, including higher tariffs on Chinese products, similar to what former president Donald Trump imposed, Shen said.

Trump imposed US$50 billion worth of tariffs on Chinese imports during his presidency and has threatened to target all Chinese goods with a 60 per cent tariff if re-elected, including duties of up to 200 per cent on Chinese electric vehicles. Chinese EVs already face 100 per cent duties under Biden as part of US$18 billion worth of tariffs on Beijing imposed in May.

“[Harris] will do it even more harshly than Biden to compete with Trump … Next, she will tell his audience and the Democratic Party that she can target China more harshly than other Democratic candidates,” Shen said.

Shen added he did not think the Democrats could win in November even with Harris, who he believed had a smaller chance of beating Trump than Biden.

“The Democratic Party faces two crises: one is about its platform, and the other is about its [lack of] talent,” he said, adding that the party’s border and immigration policy were driving voters away.

Harris was given the job of tackling the US’ border issues when she entered office but her efforts have been criticised for lacking results. More than 2.4 million illegal immigrants crossed the US border from Mexico in the 2023 financial year, a 40 per cent increase over 2021, according to data from the US House Committee on Homeland Security.

Einar Tangen, a senior fellow at the Taihe Institute, a Beijing-based think tank, said Biden’s withdrawal was the best scenario for Democrats to boost their election chances, but he said he doubted if Harris could be a capable leader due to a troubled record at home.

“She has not really been very visible … She has not really been able to handle any major policy initiatives. And her background is not stellar,” Tangen said.

“I think [if the Democrats] really want to beat Donald Trump … they need somebody who’s a moderate Republican. It’s not clear what she stands for.”

During her time as the attorney general of California in 2014, Harris approved a controversial law that made theft of items valued under US$950 misdemeanors. She has also raised questions about her leadership style, with a staff exodus from her office reported in 2021.

In terms of China policy, Tangen said Harris had not shown any distinctive policy vision as vice-president as there was “no daylight” between her views and Biden’s.

And given the previous reports of “problems” with her staff, Tangen wondered how many people in Biden’s cabinet in charge of China policy – such as diplomats Antony Blinken and Kurt Campbell – would want to work with her.

While Biden was quick to endorse Harris on Sunday, top Democrats, such as former president Barack Obama and House speaker Nancy Pelosi have been silent. The Democrats will announce their presidential nominee during their national convention next month.

China’s rural land reform could be a cash cow for farmers after bold move at third plenum

https://www.scmp.com/economy/economic-indicators/article/3271423/chinas-rural-land-reform-could-be-cash-cow-farmers-after-bold-move-third-plenum?utm_source=rss_feed

China’s latest blueprint on rural land reform features a major push toward an issue that farmers and analysts have been anticipating, but which Beijing has been prudent in embracing.

Through easing restrictions on the use of residential property in the countryside, farmers should be able to explore various commercial purposes to capitalise on the land.

Instead of emphasising caution in this field as it had in key directives over the past decade, the Communist Part vowed to “allow farmers to revitalise and utilise their legally owned homes via renting, becoming shareholders, and cooperating with others”, according to details announced on Sunday after last week’s third plenum.

Under existing laws, rural homes are only tradeable within the same village and cannot be used as collateral for loans – a rule widely believed to have led to wasted resources while hindering farmers from raising capital amid the process of urbanisation.

The pledge, among a 60-point list of policy measures from the plenary session that set the tone for China’s economic development over the medium term, came as a wide rural-urban income gap continues to challenge President Xi Jinping’s “common prosperity” goal.

And while it was ambiguous and will need to be laid out later in legislation, the pledge represents an important policy decision in breaking down limitations to the use of rural property, which on paper is owned by village collectives and only meant to serve as farmers’ current residence, according to Zheng Linyi, a researcher with the China Academy for Rural Development at Zhejiang University.

Calling it a “very valuable” proposal, he said it not only opened the door for rural homes to be used for commercial purposes, it also covered all rural residents instead of just those who have left to work in the cities.

“This is quite a big breakthrough,” Zheng said. “I hope it will transform from the party’s decision to a state policy and be reflected in law.”

Local authorities have launched a series of experiments in reforming the rural land system over the past decades, allowing transactions and the use of property as collateral within small scopes, but none of the trials have been expanded nationally.

These included a widely lauded pilot scheme called the land-coupon system, which was introduced in Chongqing municipality in 2008. A land coupon represents entitlements granted by the government that allow holders to lease land for development purposes, and coupons may be traded or sold among developers and investors, thus increasing the value of rural resources and improving farmers’ income.

“In the past, when they touched upon the topic of homesteads in rural areas, they would use the phrase ‘cautiously pushing’ reform in this regard, but this time it disappeared from the document,” said Zheng Fengtian, a professor with Renmin University’s School of Agricultural Economics and Rural Development in Beijing.

“Instead, they said rural homes can be utilised in multiple ways, which I believe is big progress,” he said.

In the meantime, the reform plan also touched on the need for more urban construction to support larger permanent metropolitan populations – a means of supporting Beijing’s push to better integrate migrant workers into cities.

China had 297 million migrant workers as of last year, but they mostly do not have urban hukou, or a local permanent residence, without which they are not counted as part of the permanent population and cannot enjoy all the same public services as local residents.

The measure was written into a policy directive for the first time after being urged over the past couple of years, Zheng Fengtian noted.

Sunday’s plan also pledged to safeguard migrant workers’ rights to their rural property, even when their hukou status changes to bigger cities, including by still being entitled to contract farmland, using the homestead, and being paid when there is a collective income.

They can also voluntarily give up their rights in return for compensation, but it said that detailed measures for this have not yet been fully explored nor established.

“Only when they feel secure in cities will they be willing to give up their property in rural areas,” said Zheng Fengtian.

Nvidia preparing a version of new Blackwell AI chip for China market, sources say

https://www.scmp.com/tech/big-tech/article/3271466/nvidia-preparing-version-new-blackwell-ai-chip-china-market-sources-say?utm_source=rss_feed

Nvidia is working on a version of its new flagship artificial intelligence (AI) chips for the China market that would be compatible with current US export controls, four sources familiar with the matter said.

Chief executive Jensen Huang in March unveiled Nvidia’s Blackwell series, which is set for mass production later this year. The new graphics processing units (GPUs) combine two squares of silicon the size of the company’s previous offering. Within the series, the B200 is 30 times speedier than its predecessor at some tasks like serving up answers from chatbots.

Nvidia will work with Inspur, one of its major distributor partners in China, on the launch and distribution of the chip which is tentatively named the “B20”, two of the sources said. Shipments of the “B20” are planned to start in the second quarter of 2025, a separate source told Reuters.

The sources declined to be identified as Nvidia has yet to make a public announcement.

A spokesman for Nvidia declined to comment. Inspur did not respond to requests for comment.

Shares of Nvidia rose 1.4 per cent to US$119.67 in US premarket trading.

Washington tightened its controls on exports of cutting-edge semiconductors to China in 2023, seeking to prevent breakthroughs in supercomputing that would aid China’s military.

Since then, Nvidia has developed three GPUs tailored specifically for the China market.

The advent of tighter export US controls has helped China’s Huawei Technologies and start-ups like Tencent Holdings-backed Enflame make some inroads into the domestic market for advanced AI processors.

A version of a chip from Nvidia’s Blackwell series for China would boost the Santa Clara, California-based firm’s efforts to fend off those challenges.

China accounted for around 17 per cent of Nvidia’s revenue in the 12 months to end-January in the wake of US sanctions, sliding from 26 per cent two years earlier.

Nvidia’s most advanced chip for the China market, the H20, initially got off to a weak start when deliveries began this year and the US firm priced it below a rival chip from Huawei, Reuters reported in May.

But sales are now growing rapidly, two of the sources said.

Nvidia is on track to sell over 1 million of its H20 chips in China this year, worth upwards of US$12 billion, according to an estimate from research group SemiAnalysis.

Expectations are high that the US will continue to keep up the pressure on semiconductor-related export controls.

The US wants the Netherlands and Japan to further restrict China’s access to advanced chip-making equipment, sources have said.

The Biden administration also has preliminary plans to place guardrails around the most advanced large language models, the core software behind generative AI services like ChatGPT, sources have said.

Chip stocks globally tumbled last week after Bloomberg News reported that Biden’s administration was weighing a measure called the foreign direct product rule that would allow the US to stop a product from being sold if it was made using American technology.

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China’s third plenum vows to support ‘capable’ private sector to lead tech innovation

https://www.scmp.com/economy/china-economy/article/3271422/chinas-third-plenum-vows-support-capable-private-sector-lead-tech-innovation?utm_source=rss_feed

In its quest to break out of tightening containment efforts by the United States, Beijing has vowed to give more room and better resources to the private sector to help China achieve technological breakthroughs.

It was one of the measures announced to support the private sector included in the 22,000-word resolution document unveiled on Sunday following the conclusion of the third plenum last week.

“[It is necessary] to support capable private enterprises to take the lead in undertaking major national technological research tasks, and further open up major national scientific research infrastructure to private firms,” said the decisions endorsed by the Communist Party’s 20th Central Committee.

The document also covered a wide range of reform objectives for the next five years in areas including economic development, science and technology, human capital, defence, social security and ideology.

And while the endorsement for the private sector is barely new – similar ones were made in government documents last year or even earlier – the reiteration highlighted the importance Beijing has placed on boosting sentiment among the key sector, while also upholding national security, analysts said.

“It seems to focus on how to unite private enterprises to shoulder national strategic tasks,” said Su Yue, principal economist for China at the Economist Intelligence Unit.

“Content about the private sector is not much this year.”

The third plenum also supported the formulation of a law to promote the private economy.

The law had already been introduced into the lawmaking process by the country’s top legislature in February.

“We think China may accelerate its legislation process of the law on promoting the private economy and boost the establishment of a unified and fair national market, which should help underpin investors’ confidence,” said Ning Zhang, senior China economist at UBS Investment Bank.

The third plenum pledged equal and fair market access for all firms, especially in terms of infrastructure construction, and to improve the mechanism for private companies to take part in major national projects.

The top leadership also agreed to facilitate capital support to private companies, while improving the regulatory system on debt settlement for corporate accounts in arrears, as well as administrative inspections involving the private sector.

The private sector is the backbone of China’s economy, contributing 50 per cent of tax revenues, more than 60 per cent of gross domestic product and over 70 per cent of technological innovations.

It also provides more than 80 per cent of urban employment and accounts for over 90 per cent of market entities.

But a bumpy post-Covid economic recovery has continued to weigh on the confidence of private businesses, while US-led containment efforts and a push to divert manufacturing and supply chains away from China has continued.

“The central government definitely wants to stabilise the confidence of the private economy and will definitely introduce policies, but the current international environment is not good,” Su said.

“The two factors may offset each other, so the effect seems to be very limited.”

From Beijing’s perspective, in addition to boosting the confidence of private enterprises, maintaining national security is also a priority, she added.

For the state sector, the plenum vowed support to make it “stronger, better and bigger” and enhance its core functions and competitiveness.

China intends to promote the concentration of state-owned capital in important industries related to national security and the lifeline of the national economy, including public services, emergency response capabilities, public welfare fields and forward-looking strategic emerging industries, according to the full text.

Julian Evans-Pritchard, head of China economics at Capital Economics, said the third plenum suggested Beijing would continue to endorse its use of industrial policies that involve channelling resources to favoured sectors, like hi-tech manufacturing.

“One reason the leadership appears to be sticking to its guns on industrial policy is that its objectives are not purely economic. National security concerns are increasingly driving policymaking and the third plenum communique suggests that this will likely remain the case going forward,” he said.

The problem, though, is that there is no guarantee that industrial policy would result in resources being allocated more productively, Evans-Pritchard added.

“At the macro level, industrial policy is arguably doing more harm than good, exacerbating demand and supply imbalances, deflationary pressures and financial strains,” he said.

Maximilian Butek, executive director and board member for the German Chamber of Commerce in East China, said the low confidence in the market and hesitant investments in the private sector pose challenges for German companies in China.

“China’s leadership wants more economic growth and knows that there is no way around opening up the markets. However, this opening contradicts the party’s quest for more control. The third plenum did not contribute to resolving this contradiction, but rather exacerbated it,” Butek said.

“A nationally oriented economic policy is problematic for German companies because they could be pushed further to the sidelines as a result.”

Nepal’s political shift complicates its India-China balancing act

https://www.scmp.com/week-asia/politics/article/3271362/nepals-political-shift-complicates-its-india-china-balancing-act?utm_source=rss_feed

Nepal’s domestic political manoeuvrings are poised to play a pivotal role in shaping the country’s foreign policy towards India and China, as a new alliance between the largest political parties in Kathmandu injects fresh complexities into a delicate geopolitical dynamic.

Prime Minister Pushpa Kamal Dahal, popularly known as Prachanda, was removed from office earlier this month after his Communist Party of Nepal (Maoist Centre) failed to secure a confidence vote in parliament.

His former coalition partner, Communist Party of Nepal (Unified Marxist–Leninist) chairman K.P. Sharma Oli, was sworn in as Nepal’s new leader on July 17 – with backing from the largest party in the House of Representatives, the Nepali Congress led by Sher Bahadur Deuba. On Sunday, Oli secured overwhelming support in parliament with more than two-thirds of members voting in his favour.

Oli, like Prachanda before him, is known for maintaining close ties with Beijing. However, the backing of Deuba’s party gives the new government a more India-leaning tilt – raising questions about how Nepal will manage its relationships with its two immediate and influential neighbours.

“The main problem is local, on the economic side,” said Bipin Adhikari, a professor of law at Kathmandu University, stressing more pressing issues at home. “Nepal has been suffering from instability for a long time. At least with this government, in the political sense, there will be some stability.”

Nepal’s government is its third in two years since elections to the lower house of parliament were held in 2022.

“For the first time since 2015, we have a strong government that doesn’t rely on smaller parties in parliament. Any fluctuation won’t affect the coalition, providing a strong base to proceed,” Adhikari said.

Relations with both India and China were a top priority for any Nepal government, but it would not tilt towards one country at the cost of the other, he added.

“In India, there is a popular perception that UML is pro-China and Nepali Congress is pro-India, it is just nonsense. In democracy, you cannot sustain your local politics by being pro-China and pro-India.”

Kamal Dev Bhattarai, a Kathmandu-based journalist and policy commentator, said the new government’s foreign policy was likely to be guided by its domestic priorities such as economic recovery, job creation and funding for infrastructure development.

The new government would “put differences aside because economic recovery and infrastructure development is a key priority for Nepal”, said Bhattarai, an editor at The Annapurna Express.

Both parties believed Nepal should stay non-aligned and focus on economic engagement with China and India, avoiding geopolitical tensions, he said.

“There are some differences. The Nepali Congress opposes [Belt and Road Initiative] loans, while the CPN-UML supports them if China offers concessional terms,” Bhattarai said, adding that Oli was likely to be cautious about showing his inclination towards any particular country.

S.D. Muni, a professor emeritus at the School of International Studies, Jawaharlal Nehru University, said although the Nepali Congress was seen as close to India, this would depend on domestic politics.

“Even Oli, who is being labelled as pro-China, would also [gauge] whether going on extreme to the Chinese side is beneficial and helpful to him or not,” Muni said.

From a strategic point of view, India would welcome the new coalition as it had never been comfortable with the consolidation of communist parties in Nepal, Muni said.

The implementation of China’s Belt and Road Initiative is seen as a contentious issue that both parties must resolve for the new government to function smoothly. India opposes the belt and road project, citing concerns that it undermines the territorial integrity and sovereignty of neighbouring countries.

Nihar Nayak, research fellow at the Institute for Defence Studies and Analyses (IDSA), said before settling into office, the Prachanda government signed a protocol agreement on the belt and road project after the implementation agreement was cleared by the cabinet in 2017.

“Even earlier when Prachanda was in government with the Nepali Congress, many projects like the Armoured Personnel Carrier Project and the infrastructure project in the Terai region were given to Chinese companies, sidelining Indians. This indicates that the Nepali Congress isn’t entirely pro-India,” Nayak said.

The belt and road project initially comprised 35 projects costing about US$10 billion, but was later reduced to nine priority projects.

Despite the change in government, the belt and road project was likely to proceed as Oli wanted infrastructure investment while ensuring it would not put unnecessary burden on Nepal, Muni said.

Indian firms are major investors in Nepal, contributing more than 30 per cent of the country’s approved foreign direct investment, official data shows. In January, India and Nepal signed a long-term power agreement to import 10,000MW of electricity from Nepal in the future. They also have a 1950 Treaty of Peace and Friendship, ensuring reciprocal treatment for Indian and Nepali citizens regarding residence, property, business, and movement.

Nayak from IDSA said as long as the government in Kathmandu ensured India’s security concerns, Delhi should not worry about which political party was in power.

“India has security and strategic concerns in the Himalayan region. Whichever government addresses those concerns, it doesn’t matter if the government is pro-India or pro-China,” Nayak said.

As a landlocked country sharing borders with Asian countries, Nepal had to balance its relations with both Beijing and Delhi, Nayak said.

“Nepal has followed the same foreign policy since 1955 when King Mahendra wanted to maintain distance between two Asian powers [China and India]. Since, be it the Nepali Congress or a left-wing government, they have been balancing relations with both countries economically and strategically,” he said.

Ranjit Rae, a former Indian ambassador to Nepal, said every Nepali government looked after India’s security concerns and the new administration should not be any different from its predecessors.

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Chinese leadership says retirement age should rise in ‘voluntary and flexible’ way

https://www.scmp.com/news/china/politics/article/3271430/chinese-leadership-says-retirement-age-should-rise-voluntary-and-flexible-way?utm_source=rss_feed

China’s ruling elite has said it wants to raise the country’s retirement age in a “voluntary and flexible” manner.

The country’s leadership have repeatedly suggested that this policy needs to be implemented and the language used in a document about the decisions taken during last week’s Communist Party third plenum might bring it a step closer to reality.

However, the move might prove unpopular and analysts warned it could create further pressure on the jobs market.

The document, published by state news agency Xinhua on Sunday, lists a wide range of reform objectives to be completed by 2029, including more than 300 policy measures.

It said the government would move to raise the retirement age in an “orderly” and “gradual” way and seek to develop the “silver economy” to create diverse jobs for older people.

It also said that companies would be encouraged to help with the policy and that community care for the elderly, especially in rural areas, needed to improve.

China is grappling with the problem of how to care for its rapidly ageing population as the birth rate reached a record low last year and the document called for an improved support and service system to help the population grow.

According to a 2019 government-supported report by the Chinese Academy of Social Sciences, China’s main urban state pension fund, the backbone of the country’s retirement system, will dry up by 2035.

Currently, the retirement age – first set about 70 years ago – is 60 for men, 55 for female office workers and 50 for female blue-collar workers. However, in 1949, when the People’s Republic was founded, life expectancy was just 35 and it has now risen to 77.

The authorities have repeatedly suggested the retirement age needs to rise. In 2020 the five-year plan said it needs to happen gradually to “encourage a full use of human resources”.

In March, Premier Li Qiang said in his annual work report there should be a “further push” to develop the silver economy, increase basic pensions and provide better support services for senior citizens.

The cost of paying for pensions is a major drain on local government finances and the document also included measures to address that problem.

It said there should be a “clear division of responsibilities, coordinated financial resources and regional balance” in the fiscal relationship between central and local governments.

Peng Peng, executive chairman of the Guangdong Society of Reform, a think tank connected to the southern province’s government, said delaying retirement might be a double-edged sword in today’s economy.

“It could reduce the financial burden on local governments, but it might also increase employment pressure, which is a typical example of the complexity of current reforms,” he said.

But Feng Jin, an economics professor at Fudan University specialising in social security, said it was inevitable that the retirement age would rise and a “voluntary flexible” increase might prove easier for people to accept.

“Delaying retirement faces opposition from some, particularly those with lower incomes and uneasy working conditions; after age 50, their wages remain low with limited growth potential, so they prefer to retire early and start receiving pensions sooner,” she said.

“On the other hand, individuals like female PhD graduates might find retiring at 55 premature, as they feel their human capital hasn’t been fully utilised or adequately rewarded. Thus, they prefer to retire later.”

Yuan Xin, vice-president of the China Population Association and a professor of demography at Nankai University said there should be a transition period where employers offered flexible wages, working hours and locations.

“Institutionally, relevant departments should be established to coordinate efforts and create a cross-departmental linkage mechanism. The policy system should be optimised to support health, fertility, employment, retirement, social security, and elderly services,” he said.

China’s housing sector could be mired in a slump despite possible rescue measures: analysts

https://www.scmp.com/business/china-business/article/3271432/chinas-housing-sector-could-be-mired-slump-despite-possible-rescue-measures-analysts?utm_source=rss_feed

More measures to revive China’s property sector and the economy are likely at this month’s Politburo meeting, after the third plenum pledged to overhaul the industry, according to analysts.

But the property sector will continue to be a drag on economic growth and is unlikely to see any improvement soon, considering the challenges to restore consumer confidence and weak demand, they warned.

Though no new policies to prop up the property sector have been unveiled, the central government reiterated its resolution to “accelerate the construction of a new model of real estate development” following the third plenum, a twice-a-decade event to outline the economic blueprint for the next five years, according to the full text of the meeting released by Xinhua News Agency on Sunday.

Beijing’s pledge to reform the sector includes revamping financing methods and the presale system, as well as improving the property tax, the document showed. Additionally, it called for an “integrated urban-rural development”, adding to market bets on a potential revamp to the hukou or household registration system, and urban and rural resources.

Han Wenxiu, executive deputy director of the office of the Central Committee for Financial and Economic Affairs, told a press conference on Friday that an ongoing urbanisation process will “offer space for high-quality development in the real estate sector”.

“The overall tone of the statement indicates a clear desire for a new real estate model going forward, one that is more centred around affordability and ensuring that the mass market segment has [homes] to live in,” said Michael Chang, head of Asia financials at CGS International.

“Policymakers wish to change the model of property developers raising funds from homebuyers by selling projects before they are built,” he said, adding that concerns about social stability have prompted policymakers to prioritise unfinished projects.

“The rise in unfinished real estate projects and slowing sales have pressured the presale system to shift towards selling completed properties,” said Wang Xingping, a senior analyst at Fitch Bohua.

“Some cities have begun piloting this policy, but developers face significant financial pressure, slowing the transition. With improved financing conditions and changing buyer demand, the completed property sales model is expected to expand further,” she added.

The communique suggests that policymakers are concerned about weak domestic demand and may “step up easing rhetoric and measures” at the coming July Politburo meeting, Goldman Sachs analysts led by Shan Hui said in a report.

However, the property sector remains one of the major drags on the world’s second-largest economy, according to Goldman Sachs, despite recent efforts to reverse it, including 300 billion yuan (US$41.2 billion) in funding announced in May to help clear excess housing inventory.

The US investment bank last Wednesday adjusted down the property sector’s contribution to the country’s gross domestic product (GDP) to minus 1.5 percentage points from the previous minus 1.2 percentage points, slightly bigger than the 2023 level, citing links between house prices and consumer confidence, consumption and financial spillovers.

It also cited the lacklustre economic data released last week, including year-on-year GDP growth of 4.7 per cent for the second quarter, as well as mild improvement in home prices.

The lower-than-expected figures have forced many other investment banks to revise their forecasts downwards.

“The impact on the real economy may take a few more years to fully pass through, given the length of time it takes to complete construction projects,” Goldman Sachs said. “Property prices continue to fall and have not shown signs of stabilisation.”

China boosts infrastructure checks after second deadly highway collapse in 3 months

https://www.scmp.com/news/china/politics/article/3271400/china-boosts-infrastructure-checks-after-second-deadly-highway-collapse-3-months?utm_source=rss_feed

Chinese authorities have asked for increased safety checks of key infrastructure around the nation after a second fatal highway collapse in three months killed at least 15 people as heavy rainfall continued to hit the country.

By Sunday evening, the death toll from a bridge collapse on Danning highway in China’s northwestern Shaanxi province on Friday had risen to 15, with some of the 25 vehicles that plunged into the river still missing, according to Xinhua.

The bridge in Shangluo collapsed because a flash flood stemming from a persistent storm caused vehicles to plunge into the river, state media said.

The incident occurred three months after a similar highway collapse in Meizhou, a city in southern Guangdong, caused 51 deaths.

China has been hit hard by heavy rain this year, facing particular and heightened risk in the peak rainy season which runs from mid-July to mid August, with flood alerts frequently issued and upgraded in many regions.

On Sunday, Beijing’s Ministry of Emergency Management issued a notice, saying lessons must be drawn from the most recent collapse.

“We should resolutely prevent the disasters that could lead to mass death and casualties,” it said in the statement.

The ministry urged local authorities to closely monitor major infrastructure such as highways and railways, as well as in key areas, including mountainous and water-related construction projects and high-risk locations such as bridges, urban underground spaces and tunnels.

It pushed for better application of monitoring technologies for the early detection and reporting of risk factors.

On Saturday, local authorities, including in Shaanxi and Hubei provinces, urgently launched risk inspections of infrastructure, particularly bridges.

They also called for improved coordination between departments responsible for public security, meteorology, water resources and emergency management and for responsible personnel to be on duty all day during flood season to promptly mitigate extreme weather disaster risks.

“We should adopt worst-case scenario thinking to deal with extreme weather and overcome any decline in alertness,” the Shaanxi provincial government said, urging officials not to take risks or be complacent.

The Sichuan transport department requested “full coverage and thorough” inspections on disaster-prone areas and infrastructure after communication, roads and bridges were disrupted by a flash flood in Hanyuan County in Sichuan on Saturday.

At least 10 people were reported dead and 29 people missing in the flash flood triggered by a heavy rainstorm, according to state broadcaster CCTV.

Intelligent monitoring technologies, such as ground-penetrating radar and drones, were also promoted by the Hebei provincial transport department to monitor infrastructure health in real time.

The Danning highway is a provincial road connecting three cities that is included in the national road network planning. The highway construction project is led by the Shangluo city government using a public-private partnership model for construction.

The middle section of the highway – from Shanyang to Zhashui where the collapse occurred – officially opened for operation in December 2018.

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New health trend hits China workplaces – jogging with laptops, lifting lunch packs

https://www.scmp.com/news/people-culture/trending-china/article/3271335/new-health-trend-hits-china-workplaces-jogging-laptops-lifting-lunch-packs?utm_source=rss_feed

Hard-pressed office workers in China are incorporating exercise into their work day by jogging with laptops, lifting lunch packs, doing yoga while worshipping, and office chair Pilates.

Dubbed the “5-minute quick-charge workout”, the practice has gathered momentum across the mainland.

In early July, an internet user posted a picture on Xiaohongshu of a colleague engaging in a quick-charge workout while waiting for the lift, and captioned it, “Office workers have their own gym.”

The images show a woman with a lunch delivery bag in one hand and a canvas bag in the other, which she was using in place of dumbbells and lifting them repeatedly while waiting.

She also had several food delivery bags tied around her waist, adding weight to her workout.

The colleague called her a genius, saying: “She always volunteers to bring lunch for everyone from downstairs, describing the trip as a weighted workout.

“Since she sits in the office all day with no time to go to the gym, she manages to have a quick workout while carrying takeaway or waiting for the lift, thus saving on gym fees,” the colleague said.

In another post, someone told how an intern at their company brings a yoga mat to work for exercise sessions. They asked: “I’m tempted to join in, what should I do?”

The intern had an iPad displaying the God of Wealth in front of her yoga mat, thus integrating worship into her yoga routine.

Her actions sparked vivid discussions online.

“This is genius, multitasking at its finest. Worship, exercise and a little slacking off at work all at once,” quipped one person.

Other short workouts shared online include Pilates while sitting on office chairs, swinging a badminton racket and lifting water barrels.

Chang, a copywriter from Hangzhou, Zhejiang province, shared her exercise approach with Jiupai News. She jogs to the metro station while carrying her laptop.

“My computer is a bit heavy, so it feels like weight training,” she said.

Chang embraces the quick-charge workout because she does not like all the hassle of joining a gym.

“I’m afraid I will not stick with it and waste my money,” she said.

“A 5-minute quick-charge workout is more manageable for us office workers who often work overtime and do not have much spare time. Also, it energises me during work when I’m tired,” Chang added.

She also said that the bursts of exercise are beneficial to her psychological well-being because they help “release some negative emotions” throughout the day.

Others have been sharing their speedy fitness routines online.

“Yes, my workout is picking up packages for my boss. When it gets heavy, I think of it as arm training,” one person said.

Another said they have a daily sprint to work: “I run 800 metres in three minutes every day to clock in on time. Lately, it feels so easy.”

Promises abound of deepened reform, but what did China’s third plenum tell us?

https://www.scmp.com/economy/china-economy/article/3271338/promises-abound-deepened-reform-what-did-chinas-third-plenum-tell-us?utm_source=rss_feed

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The communique released summarising China’s third plenum – one of several gatherings of the Communist Party’s elite Central Committee – was seen as seeking a delicate balance between growth and security in the face of mounting uncertainties.

It was released at the end of the four-day session, typically an occasion for the party elite to hammer out long-term strategies.

Analysts said the outcome was in line with expectations as it provided a continuation of existing policy tweaks, although nothing that hinted at China heading towards a different direction.

“China’s leadership has promised to continue comprehensively deepening reform in a wide range of areas. But there are few signs that the just-concluded third plenum marks a major change in the direction of policymaking,” said Julian Evans-Pritchard, head of China economics at Capital Economics.

“And there still appears to be a tension between policies aimed at boosting economic security and expanding the supply side of the economy, and those aimed at giving market forces a greater role and rebalancing growth toward consumption.”

The statement did acknowledge, in a rare departure from a tradition of focusing on long-term goals, that China must “unwaveringly strive to finish this year’s growth targets”.

The meeting started the same day that China revealed its economy grew by 4.7 per cent year on year in the second quarter, which fell short of expectations.

In the first half of the year, China’s gross domestic product did grow by 5 per cent year on year, which is in line with the annual target of around 5 per cent Beijing had confirmed earlier this year.

“Though the third plenum primarily focuses on the medium and long-term direction, it reiterated the need to reach this year’s GDP growth target. With growth facing near-term challenges from softer domestic consumption momentum, more near-term policy support will be needed to push along growth,” said analysts at HSBC.

“For the longer-term path, domestic consumption, technology advancement and green development remain key strategic directions, while the plenum emphasised the role of the market mechanism in resource allocation and pledged to adhere to opening up.”

The communique asked party members to “faithfully follow the party leadership’s economic decisions, take active steps to stimulate domestic consumption, and build new momentum to drive exports and imports”.

It also vowed that China would continue to deepen reforms in all areas, including the economy, rural land, taxation, environmental protection, national security, fighting corruption, and cultural development.

The communique also called for the country to deepen supply-side reform, better integrate the digital economy into the real economy, upgrade modern infrastructure and build resilience in its industrial supply chain. It identified improving human capital and talent as the foundation to achieve these goals.

On the economic front, it promised to “better leverage the role of the market” but omitted a previously used phrase granting the market a “decisive role”, deviating from rhetoric used at the same gatherings in 2013 and 2018.

It did pledge “unswerving support and guidance” to the development of the “non-state sector” and said the government should ensure “all forms of ownership” in the economy could compete fairly and lawfully “on an equal footing”, a reference to China’s depressed private sector.

And a goal to target science education and expertise by launching a five-year skills upgrade was also included as part of a 2029 deadline to develop a “quality workforce” to help power a country and economy driven by innovation.

Elsewhere, it vowed to continue the fight against corruption, particularly in the military. The plenary session received and approved reports on the corruption cases of former defence minister Li Shangfu and two other generals.

The decision to remove former foreign minister Qin Gang as a member of the Central Committee was also confirmed via the communique.

Events at the third plenum will have been as eagerly watched overseas as they were within China, with the Post reporting that a group of heavyweight US executives will head to Beijing next week to obtain first-hand insight following the meeting.

But following the release of the communique, representatives of Western firms in China expressed disappointment over Beijing’s medium-to-long-term vision for the economy, saying the document lacked specific measures to improve the climate for business despite oft-repeated pledges of support.

60-Second Catch-up

China’s Communist Party sticks to painful reform playbook to target risks and growth.

Xi Jinping tells party to show ‘unwavering faith’ in reform plan.

US executives eye first-hand insight from economy-centric conclave.

Opinion: How China’s continued opening up sets country on path to better future.

Explainer: What do investment banks think of the Chinese Communist Party’s long-overdue third plenum?.

China’s Communist Party targets another PLA Rocket Force chief in corruption investigation.

Ex-Chinese FM Qin Gang loses seat at party top table but may escape punishment.

Explainer: 4 Chinese economists and academics advising Beijing on capital, employment and finance.

Deep dives

Representatives of Western firms in China have expressed disappointment over Beijing’s medium-to-long-term vision for the economy, saying a document summarising the recently concluded third plenum lacks specific measures to improve the climate for business despite oft-repeated pledges of support.

Overseas enterprises in China will remain in a holding pattern before increasing their investments in the world’s second-largest economy, they said, waiting until a clearer picture emerges of what new reforms may be in store.

Read more.

The role of the market in China’s economy has seemingly been downgraded by the country’s political leadership, with high-level members of the Communist Party making a small but significant adjustment following a meeting expected to set the tone for economic policy over the next several years.

“We must better leverage the role of the market, foster a fairer and more dynamic market environment, and make resource allocation as efficient and productive as possible,” read the summary communique issued after the conclusion on the third plenum on Thursday, as published by state news outlet Xinhua.

Read more.

China is targeting science education and expertise, embarking on a five-year skills upgrade drive as it seeks to develop the critical technology needed to counter US-led containment efforts.

The Communist Party’s Central Committee announced on Thursday that the country had a 2029 deadline to develop a “quality workforce” to help power a country and economy driven by innovation.

Read more.

Stephen Roach is a former chairman of Morgan Stanley Asia and also served as Morgan Stanley’s chief economist during his 30-year career at the investment bank. He was later a senior lecturer at Yale University’s School of Management and is now a senior research scholar at Yale Law School’s Paul Tsai China Centre. This interview first appeared in . For other interviews in the Open Questions series, click .

Read more.

Arthur Kroeber is founding partner of Gavekal Dragonomics, a China-focused economic research firm. Before founding Dragonomics in 2002, Kroeber worked for 15 years as a financial journalist and economic analyst. He is an adjunct professor at New York University’s Stern School of Business, a member of the Council on Foreign Relations and the National Committee on US-China Relations. His book, China’s Economy: What Everyone Needs to Know, was published in 2020. For other interviews in the Open Questions series, click .

Read more.

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Bohai Bank to sell US$3.5 billion in loans to China’s bad banks in bid to shore up capital

https://www.scmp.com/business/banking-finance/article/3271368/bohai-bank-sell-us35-billion-loans-chinas-bad-banks-bid-shore-capital?utm_source=rss_feed

China Bohai Bank proposed to sell US$3.5 billion worth of assets at a discount to bidders including the nation’s bad debt managers via a public tender to shore up capital levels.

The assets, with a principal amount of 25.6 billion yuan (US$3.5 billion), will be be disposed to potential bidders, including China’s big four bad banks led by China Cinda Asset Management, according to an exchange filing on Monday.

The amount the Tianjin-based lender is seeking to sell is 54 per cent more than the 16.6 billion yuan non-performing loans that it reported having at the end of last year. Bohai also had 28.9 billion yuan in special mention loans at the end of last year. This is debt where payment is seen at risk but that has not become non-performing yet.

China’s banks have been struggling with rising bad debt after a real estate market slump and as the economy struggles to regain momentum. Margins have also narrowed to record lows after lenders were called on by Beijing to help businesses and consumers with cheap loans.

The assets for sale incurred a loss before tax of 1.58 billion yuan in 2023, the filing said, compared with the lender’s profit of 5.08 billion yuan.

Liao Zhiming, chief banking analyst at China Merchants Securities, said the assets for sale should include both NPLs and special-mention loans.

Bad asset disposal “remains a key measure for the bank to strive to clear out risks as soon as possible and improve its balance sheet,” he said, noting the discount of the sale is “not very low”.

Bohai Bank said the initial minimum consideration of the transfer will be 17.7 billion yuan, a 40 per cent discount off the 29 billion yuan aggregate amount of the assets after including interest payment, penalty and judicial fees. It hasn’t entered any agreement with the potential buyers, it said, adding they may or may not participate in the tender.

The lender expects to complete the sale in batches, with exact dates yet to be determined. It will use the proceeds to replenish working capital as well as boost its asset quality and capital buffers.

Bohai Bank’s bad loan ratio rose to a four-year high of 1.78 per cent at end-2023. Its capital adequacy ratio was 11.58 per cent as of end-December, while core-tier 1 capital adequacy ratio was 8.17 per cent, compared with regulatory requirements of 8 per cent and 5 per cent respectively.

China’s central bank cuts interest rates, moving to put more pep into the economy

https://apnews.com/article/china-property-economy-rates-pboc-4fadac1744961f47a1c10db74c9fd30dFILE - Vice President Kamala Harris, left, and President Joe Biden arrive for an event in the East Room of the White House, May 9, 2024, in Washington. She's already broken barriers, and now Harris could soon become the first Black woman to head a major party's presidential ticket after President Joe Biden's ended his reelection bid. The 59-year-old Harris was endorsed by Biden on Sunday, July 21, after he stepped aside amid widespread concerns about the viability of his candidacy. (AP Photo/Evan Vucci, File)

2024-07-22T04:24:33Z

BANGKOK (AP) — China’s central bank has cut both its five-year loan prime rate and its one-year rate, moving to revive its ailing property sector and rev up the slowing economy.

The five-year rate, which is a benchmark for mortgages, was cut by 10 basis points to 3.85% from 3.95%. The one-year rate was reduced to 3.35% from 3.45%.

The People’s Bank of China also reduced collateral requirements for its medium-term lending facility for banks. It said that was intended to ease pressure on the bond market.

The world’s second largest economy has struggled to regain momentum since the COVID-19 pandemic and a slump in the property market has been a major hindrance.

Economic growth fell to 4.7% in the last quarter, but remained at the government’s target rate of about 5% for the first half of the year.

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China’s youth, anxious over job market, trust in science to secure their future

https://www.scmp.com/economy/china-economy/article/3271122/chinas-youth-anxious-over-job-market-trust-science-secure-their-future?utm_source=rss_feed

Evon Wang, a high school graduate from Dongguan, grew up dreaming of becoming an English teacher. But when she began to apply for universities and majors late last month, she eventually chose to take her mother’s more pragmatically minded advice.

“An engineering major,” the 18-year-old said, “means a higher rate of employment and better pay.”

In China, getting into a sought-after programme of study is considered a prerequisite to advance up the career ladder. Subjects at the country’s top institutions which tend to correlate with better prospects – finance, law, medicine or computer science, to name a few – are thought to be well worth the gruelling hours of study and high exam scores necessary to secure a spot.

“Education and employment [choices] must keep up closely with government policies,” Wang’s mother said. “Now, the [national] strategy is ‘invigorating China through science and education’, so engineering is the mainstream option.”

At Evon’s school, around 70 per cent of graduates chose to study the sciences – representative of a larger trend as students and parents see potential for well-paying jobs in the country’s high-profile pursuit of tech innovation.

According to a survey conducted by Zhaopin, a leading online recruitment platform, varieties of engineering occupy 41 slots in the platform’s ranking of the 50 best-paid majors for those with three years of work experience. The remaining places were taken by subjects in science and management, with no arts degrees to be found.

Additionally, the higher education research firm MyCos has released its annual ranking of university majors after calculating their employment rates, salaries and levels of career satisfaction. The highest-scoring majors for upward mobility – those it deems “Green Card” programmes – were all related to engineering.

Another survey, released by consultancy iiMedia, found similar results. Engineering, science and economics were the top three subjects of preference for those taking the college entrance exam, while arts, agriculture and philosophy were among the least popular fields.

Graduates with degrees in subjects such as electrical engineering, mechanical engineering, chemistry, accounting, electronic information, and computer science – all well in line with Beijing’s pursuit of “new quality productive forces” – have better chances of entering state-owned enterprises after graduation, iiMedia said in its report.

Both education policies and the job market are driving more young Chinese to choose engineering and science majors, making the highest achievers also the most tech-savvy, said David Wen, a middle school principal in Guangdong whose own son is studying nuclear engineering.

He said teachers and parents believe such policies, along with social consensus, will help maintain a strong “engineer dividend” even with an overall population decline.

The country’s plan to cultivate talents in basic academic disciplines, particularly the sciences, has prompted a number of parents to invest heavily in extracurricular classes in mathematics, physics and biology.

Training institutions nationwide have launched their own courses on these subjects, with parents like Wen eagerly signing up – in his case for his second child, who is still in junior school.

But with a record 11.79 million college graduates entering the job market this summer, the present employment situation remains grim.

“My good friend, a master’s degree holder in stomatology from a prestigious university, couldn’t get an offer from a public hospital in a big city,” said Li Ying, a 23-year-old in Guangzhou. “But she doesn’t want to work at a small clinic, so she plans to go to Japan for a Ph.D.”

Li, a recent graduate hired as a labour dispatcher for a state-owned company, makes 5,000 yuan (US$689) a month after tax and social security payments. Despite winning competitions and scholarships as she earned her degree in mass communication, these honours did not give Li a competitive edge in the job market.

Analysts worry that individuals and families will find it difficult to balance academic interest with the need for employment as economic headwinds become more pitched.

Policies surrounding education and industry have profound social impact, but public discussion is far from sufficient, said Xiong Bingqi, deputy director of the Shanghai-based 21st Century Education Research Institute.

“When choosing a major, many factors should be considered, not just employment rate and salary. Many Chinese students lack a clear plan, which reflects a deficiency of basic education in cultivating interest,” Xiong said.

This will make it difficult for the country to cultivate world-class talent in the long run, he added, because those who have made the greatest achievements in their disciplines are those with a firm interest and a desire to explore their fields further.

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What’s wrong with professional football in China?

https://www.scmp.com/news/article/3271332/whats-wrong-professional-football-china?utm_source=rss_feed

The Chinese professional football scene – and the men’s national team in particular – has been mired in scandal and stories of poor performance.

The most recent example emerged as hundreds of Chinese athletes prepared to compete for gold at the 2024 Paris Olympics, and the national football team was eliminated in the qualifying rounds.

So, what has gone wrong with professional football in China and why has the nation struggled to make its mark on the beautiful game?

Century-old Hong Kong business admits importing fermented bean curd from mainland China

https://www.scmp.com/news/hong-kong/health-environment/article/3271347/century-old-hong-kong-business-admits-importing-fermented-bean-curd-mainland-china?utm_source=rss_feed

A 119-year-old Hong Kong fermented tofu company was forced to import bean curd instead of manufacturing its own due to failure to comply with tightened sewage regulations, the fourth-generation operator has revealed while insisting products are still locally made.

Jay Liu Fong-yip, a grandson of the family running Liu Ma Kee, also apologised to health authorities on Monday for overreacting to recent revelations from the Centre for Food Safety, which found unsatisfactory level of bacteria in the famous local brand’s products.

On behalf of the family business, Liu admitted for the first time that the white fermented bean curd was not manufactured by Liu Ma Kee over the past 30 years but rather imported from mainland China.

“The white fermented bean curd was not manufactured by Liu Ma Kee, they [Centre for Food Safety] told the truth. It was imported from another manufacturer,” he told a radio programme.

His remarks were made after the centre said last week that the products were not completely made in the city, triggering intense online criticism against the shop once featured in a Hong Kong Tourism Board campaign highlighting heritage businesses.

Liu said the family started importing bean curd about 30 years ago because they could not meet the stricter sewage treatment regulations.

He added that even with the costly treatment equipment installed, the acidic water, a by-product of making the raw fermented tofu, could not be diluted to become water before being discharged.

But he said his parents at the time hoped to keep the business, so they chose to import the raw ones from the mainland.

Liu insisted that their products were still manufactured in Hong Kong as the government documents also recognised them.

He added the whole manufacturing process still involved another five to six procedures, including further fermentation, seasoning and filling in bottles, which were conducted in the city.

Yet, he admitted some customers might still misunderstand that the whole product was made in Hong Kong.

The fourth-generation business known for its fermented tofu products was at the centre of damning revelations from the food safety authorities, which announced early this month that bottles of its fermented bean curd taken from a Sai Ying Pun retailer had shown unsatisfactory levels of the bacteria Bacillus cereus.

It came under further criticism after food safety authorities revealed on Saturday that it had imported preserved bean curd rather than manufacturing its own, and resold it with additives introduced under poor hygiene conditions.

Its store in Yau Ma Tei was abruptly closed last week, while a family member challenged the government’s findings in a television programme and blamed authorities for “sending the shop to hell overnight” and for destroying customers’ trust in the brand.

Liu said on Monday his mother was frustrated after years of persistence to keep the business going.

“I want to apologise to the staff of the Centre for Food Safety. Sorry. As we, Lee Ma Kee, responded and have done lots of things but we overreacted,” he said.

India’s China loophole concerns fuel Asean free trade deal rethink

https://www.scmp.com/week-asia/economics/article/3271185/indias-china-loophole-concerns-fuel-asean-free-trade-deal-rethink?utm_source=rss_feed

India faces a delicate balancing act as it prepares to review zero-duty imports under its free-trade agreement with Southeast Asian nations.

On one hand, domestic businesses are anxious about cheap imports flooding the market. On the other, New Delhi must safeguard its strategic interests in maintaining ties with Asean.

Economists like Biswajit Dhar, a professor at the Council for Social Development in Delhi, warn that the FTA has provided a back door for China to route duty-free supplies into the Indian market, eroding the competitiveness of local companies.

“While there is a case [to raise import duties], we will have to tread carefully,” Dhar said. “Any talk of increasing duty will be like jarring notes,” he added, noting that FTAs also signify strategic partnerships that extend beyond just economic ties.

India’s coming talks with the Association of Southeast Asian Nations, scheduled for July 29-31 in Jakarta, will test its ability to strike this balance.

The Asean bloc, which includes some of the region’s fastest-growing economies, presents a formidable challenge for India. Chinese firms have a strong presence across the 10 nations – Indonesia, Malaysia, Singapore and Thailand among them.

In the broader context of maintaining strategic partnerships, Delhi should avoid taking drastic measures to avoid pushing the bloc deeper into Beijing’s rival sphere of influence, Dhar warned.

Bilateral trade under the Asean-India Trade in Goods Agreement reached US$122.67 billion last financial year. The pact, signed in 2009 after six years of negotiations, aims to achieve a free flow of goods and deeper economic integration.

But Delhi is concerned that this trade is skewed in favour of Asean, which is a formidable manufacturing powerhouse. Much of India’s trade under the agreement is directed towards Singapore, Malaysia, and Thailand.

As India reassesses its trade ties with Asean, one solution on the table is strategic tariff adjustments within the Asean-India Free Trade Area framework.

“India might consider adjusting import tariffs on specific items, such as mobile phone and automobile parts,” said Soumya Bhowmick, an associate fellow specialising in sustainable development and globalisation economics at the Observer Research Foundation think tank.

“The agreement allows certain products to be included on ‘highly sensitive lists’ and ‘exclusion lists’, which can be reviewed annually. This flexibility enables India to manage the impact on domestic industries by adjusting tariffs to support local manufacturers and address trade imbalances.”

India has been on a mission in recent years to steer its economy from the services sector more towards manufacturing.

“India can protect its burgeoning manufacturing sectors, encourage domestic production, and enhance its self-reliance while still adhering to international trade agreements,” Bhowmick said. “Negotiations with Asean partners would ensure these measures are balanced and mutually beneficial.”

However, this delicate balancing act comes with its own risks. Experts say India will need to provide robust evidence of cheap imports flooding the market to justify tariff increases.

If Delhi seeks to increase duties on specific items, it may be required to offer compensation by lowering tariffs in other areas, Dhar of the Council for Social Development cautioned.

Such actions could also risk damaging India’s reputation among global investors, who have often criticised its perceived protectionist trade regime – although some economics argues this is overblown, noting that the country’s surging exports and imports now rank among the top 10 in the world.

“There is this perception about India being a protectionist country, but in actuality this is not true,” said Sujan Hajra, group chief economist and executive director at Mumbai-based Anand Rathi Financial Services.

The high tariff rates set at the World Trade Organization do not reflect the actual lower tariffs India applied in practice, he said.

RNA could be used for safer and more effective gene therapies, Chinese study finds

https://www.scmp.com/news/china/science/article/3271230/rna-could-be-used-safer-and-more-effective-gene-therapies-chinese-study-finds?utm_source=rss_feed

Chinese scientists have successfully used RNA to precisely gene-edit mammalian cells – something that could be used to develop safer, more effective and lower-cost gene therapies.

RNA, or ribonucleic acid, is one of three macromolecules along with DNA and proteins that are key to many processes in the body.

“We realised all-RNA-based, targeted, full-length functional gene integration in mammalian cells by developing new gene integration tools from naturally occurring [genetic elements known as] retrotransposons,” the researchers from the Chinese Academy of Sciences wrote in a paper published in the peer-reviewed journal Cell on July 8.

Gene integration is a targeted gene-editing method in which an entire gene of interest is inserted into a target genome, allowing cells to generate a desired protein. It can be used to treat diseases in which production of a protein is impaired.

The development of CRISPR-based gene-editing systems has pushed forward technology but finding a way to efficiently integrate large DNA fragments on a gene scale into genomes “remains a challenge”, study author Li Wei told state-run Science and Technology Daily.

Most gene-editing systems rely on DNA donors – such as plasmids or viral vectors – to carry a gene of interest into a cell so that it can be integrated into the host genome.

But RNA donors offer advantages over DNA donors, including a lower risk of provoking an immune response and the ability to be delivered by non-viral vectors like nanoparticles, which degrade rapidly in the cell and lead to a lower risk of non-intended gene integration.

“Therefore, the technology of precise large-fragment insertion mediated by RNA has significant advantages in terms of safety and deliverability,” said Li, a professor at the CAS Institute for Stem Cell and Regeneration in Beijing.

Retrotransposons are mobile elements which can move into a host genome by converting RNA into DNA within the cell using reverse transcription. R2 retrotransposons are one type found naturally in the genomes of many organisms that have some unique properties.

They include the ability to insert into a specific DNA sequence, allowing them a high specificity. They can also multiply autonomously, allowing them to distribute widely.

“R2 retrotransposons have great potential for development into next-generation gene integration tools; however, few studies have systematically explored the properties of R2 elements in mammalian cells,” the researchers wrote.

When studying R2 elements, one barrier they came across was that the retrotransposons had “little to no ability to insert genes” in a different cell environment than the source, which could be a result of natural selection.

The team found that by leveraging protein engineering through evolutionary data and artificial intelligence, R2 retrotransposons could be used to achieve “effective gene integration into human cells via all-RNA delivery”.

“Importantly, the all-RNA-delivered engineered R2 system showed effective integration activity, with efficiency over 60 per cent in mouse embryos,” and 99 per cent on-target integration specificity, the team said.

“Furthermore, systematic high-throughput evaluation revealed that our final engineered R2 gene integration tool has high specificity in human cells.”

The engineered R2 tools are able to perform hit-and-run targeted DNA integration, or permanent modification of a target sequence without leaving behind foreign genetic material.

“We anticipate that the R2 tools can extend the applications of gene addition technologies and facilitate the generation of novel gene therapeutics,” the team wrote.

They noted that as a new technology, further studies would need to be done to characterise the tools, including for mutation potential.

They also emphasised that the RNA donor-based integration technology would not replace DNA donor-based technologies, which can be used to insert long DNA fragments.

“Instead, the advantages of deliverability and accuracy put R2 systems in a unique technological niche and have also been explored in mammalian cells from a different pathway,” the team said.

A Chinese actor was enslaved in a compound running online scams

https://www.washingtonpost.com/world/2024/07/22/myanmar-cyberscams-china-trafficking/2024-05-14T14:55:16.204Z

For Xu Bochun, left down and nearly out in Shanghai by pandemic layoffs, a month’s work as a movie extra in balmy southwest China sounded like easy money.

It turned out to be anything but.

Armed men kidnapped the aspiring actor, then 37, last year after he showed up for what proved to be a fake part and marched him at knifepoint through jungle and across the border into northern Myanmar. There, he was beaten and sold to a criminal group running cyber scams, targeting victims with fake investment schemes and online romance. He was forced to spend three months duping people out of their money until his family paid a ransom for his release in October.

Xu was one of at least 48,000 Chinese nationals that worked in a lawless, isolated corner of Myanmar called Kokang until a Beijing-led crackdown there last year. He provided screenshots of his initial chat messages about the movie part, photos of the cash ransom payment and Chinese police documents about his case to support his account.

His experiences are similar to those of six other people interviewed by The Washington Post who were trafficked or misled into traveling to Myanmar, including from Thailand and Taiwan. All responded to similarly fraudulent job postings, some asking for candidates with experience in web management or online advertising, before being kidnapped. The U.N. Human Rights Office estimated in a report last August that more than 200,000 people are still being forced to work as scammers in Myanmar, Cambodia and Laos, the epicenter of this global, multibillion-dollar criminal industry, run predominantly by Chinese criminal gangs.

Accounts from those who escape, the United Nations and human rights groups say, offer a window into this new iteration of global human trafficking and the digital platforms fueling it. The problem has not been met with a global or even regional response, the groups add, even as victims continue to be recruited from more than three dozen countries, predominantly through social media apps like WeChat, Telegram and Facebook. The U.S. State Department said in June that forced labor in scam compounds has continued to grow. Citing the expansion of scamming operations, its latest Trafficking in Persons report put both Cambodia and Myanmar on its blacklist, opening the door to possible penalties and sanctions.

“There has been an extreme uptick in sophistication and reach of these recruitment networks,” said Jacob Sims, a visiting expert on transnational crime at the United States Institute of Peace.

Sold to scammers

In June 2023, Xu was living job to job, scouring casual work groups on WeChat when he came across an offer of 10,000 yuan ($1,380) for an acting gig in the tourist town of Xishuangbanna, on China’s border with Myanmar.

Xu signed up, despite the ad offering few details.

On arrival, Xu and a handful of other people from across the country gathered in a hotel and were then taken by car to an unlit street near the mountains. The setting immediately seemed off. Ten men in camo and hiking boots, knives hanging from their belts, appeared out of the dark. One tried to calm everyone down while the rest stood in menacing silence.

“It’s not a big deal,” the man said, according to Xu. “We are still going to give you part-time work, it just won’t be the work you thought you’d be doing.”

After taking everyone’s luggage, phone and identity cards, the men marched them down overgrown mountain paths in the pitch black, then drove them on dirt bikes. They eventually reached a wire fence — the border — with a gap big enough to wriggle through one at a time.

Uniformed guards at checkpoints in Myanmar showed little interest in them as they were transported from the border — so long as drivers handed over one to two thousand Chinese yuan in cash.

“The whole way we were yelling to sound the alarm, calling ‘save us.’ They understood too. They’d say ‘Chinese?’ But nobody cared,” he said. “They only recognized money, not people. It was a lawless place.”

On arrival in Laukkaing, the capital of the Kokang region, Xu felt he had been transported back 40 years to a far-flung town only just emerging from poverty. Then, sticking out from among the run-down buildings and dirt roads, he spotted signs of extreme wealth, flashy sports cars and a handful of palatial hotels.

Xu’s first stop in what he called a “supply chain” of criminality was a walled compound on the outskirts of town used by traffickers to hold abductees before they were sold on to scammers. Beneath a roof of plastic sheeting that blocked out the sun, 70 to 80 young Chinese men squatted shackled in the mud as 20 armed guards enforced silence by meting out beatings with plastic pipes.

Every day, scam “agents” would come in search of new workers for their operations, Xu said, while the traffickers would bring in 15 to 20 new arrivals, mostly from China. Many were in their 20s or 30s. Some were teenagers.

Xu, who was considered old, was held for an unusually long 10 days. His legs grew numb from beatings, he said. There were no showers or toothbrushes and the beds were stained with blood.

“They were training us to obey like slaves,” he said.

The traffickers robbed them by forcing captives to unlock accounts on online payment services like WeChat Pay and Alipay and transfer cash out. They would then use the apps to apply for personal loans to ensure a steady supply of funds.

Five or six days after arriving — Xu had lost count — he said he saw four people shot dead when they tried to grab guns from the guards.

“I don’t know their names, don’t know where they were from, don’t know if they were Chinese, I just know they were cheated into going there,” Xu said. “I bet their families don’t even know they were in Myanmar, don’t know that they died.”

In July, Xu was eventually sold to a scamming outfit run from the Red Lotus Hotel. It was owned, he said, by Liu Abao, a nickname for Liu Zhengxiang, a patriarch of one of the three crime families that ruled over Kokang, according to U.N. officials, Chinese court records and analysts.

In January, Myanmar police handed Liu to the authorities in China, where he is awaiting trial on suspicion of violent crimes including illegal detention. He could not be reached for comment.

Xu’s team on the seventh floor of the hotel targeted people in Southeast Asia. With four phones each logged into 20-odd Instagram and Facebook accounts, they would rely on machine translation to send messages to hundreds of potential victims from 10 a.m. to 2 a.m. every day.

After establishing a rapport, they would switch to WhatsApp or Line messaging apps and try to interest the mark in buying Tether coins, one of the world’s largest cryptocurrencies which is pegged to the dollar. Anyone who agreed got sent a link to a fake platform built to look like a crypto exchange.

A slow and costly release

At Red Lotus, beatings were a tool to enforce a frantic work pace. Xu regularly failed to meet targets. The most severe punishment was reserved for people who tried to escape or contact families back home.

Once every couple of weeks, the bosses would gather the workers — under strict supervision — to send messages of reassurance to family members. Only approved text and photos were allowed.

That itself was another ploy, according to Xu. The scammers wanted families to know just enough that they were ready to pay a ransom if needed.

It was in one of these sessions that Xu was able to send a single line of text to a childhood friend, alerting him to his captivity. At first, nothing happened. In late September, over Mid-Autumn Festival, Xu again briefly contacted his friend, only to discover that Chinese police had refused to look at his case, citing a lack of evidence.

Eventually, Xu’s family gathered enough proof for police in Yunnan to start negotiating for his release. Handling the process were brokers from overseas Chinese business associations in Kokang who approached scam ringleaders to negotiate terms.

Xu’s captors initially didn’t want to let him go. He begged them to accept the deal, saying that he was too old and unsuited to scamming. “People like me are just a waste,” he recalled telling the boss while bowing repeatedly. “If you let my family buy me back, you’ll definitely make more money.”

After his family agreed to pay 620,000 yuan ($85,300) in cash, his boss relented. His mother handed stacks of bills to intermediaries in a hotel room near the border. Xu was returned to Chinese authorities at Qingshuihe port, a border crossing on Kokang’s southern tip recently upgraded by Chinese investment.

Police on the border took two tubes of blood — one to check for drugs, the other to check for infectious diseases — and interrogated him for 10 days. Then he was flown to Nanjing, the eastern Chinese city where he attended university, for another full day of questioning.

When Xu was finally let go — his mother first had to pay Chinese police to cover his travel expenses — he learned that his mother had sold her house to pay his ransom.

Though the scam compounds in Kokang have been closed, new centers continue to crop up all over the region and in burgeoning hotspots, including Dubai.

“There must still be so many people waiting to be saved,” he said.

China and Philippines reach tentative deal to defuse tensions at South China Sea flashpoint

https://www.theguardian.com/world/article/2024/jul/22/china-and-philippines-deal-south-china-sea-sierra-madre

The Philippines says it has “reached an understanding” with China on resupply missions to a beached Filipino naval ship that has been a key flashpoint between the two countries in the South China Sea

The Chinese foreign ministry confirmed the “temporary arrangement” with the two sides agreeing to jointly manage maritime differences and de-escalate the situation in the South China Sea.

Manila deliberately beached a naval ship, the Sierra Madre, on Second Thomas Shoal in 1999 to reinforce its claims over disputed waters surrounding it, and it has since maintained a small contingent of sailors aboard the vessel who require resupply missions that China has been accused of repeatedly trying to block.

The Philippines Department of Foreign Affairs (DFA) did not provide details on the “provisional arrangement’ agreed on Sunday for the resupply missions to the Sierra Madre but said it followed “frank and constructive discussions” between the two sides earlier this month.

“Both sides continue to recognise the need to de-escalate the situation in the South China Sea and manage differences through dialogue and consultation and agree that the agreement will not prejudice each other’s positions in the South China Sea,” the DFA said.

The Chinese foreign ministry confirmed the arrangement, adding: “The Chinese side still demands that the Philippine side tow away the ship and restore the original status of [Second Thomas Shoal] as if it were unmanned and without facilities,” a spokesperson said in a statement released early on Monday.

“If the Philippines needs to provide supplies to the ship’s occupants before the Philippines tows away the beached warship, the Chinese side is willing to allow the Philippine side to carry out the transportation and replenishment on humanitarian grounds,” the spokesperson said.

China stood firm over its territorial claims regarding the disputed waters.

“If the Philippines transports a large amount of building materials to the ship and tries to build fixed facilities and permanent outposts, China will never accept it and will resolutely block it in accordance with laws and regulations, so as to safeguard China’s sovereignty,” the spokesperson added.

Philippine security officials also said on Sunday they would carry out the resupply missions on their own despite an offer of help from the US.

White House national security adviser Jake Sullivan said on Friday the US would “do what is necessary” to ensure its treaty ally can resupply the Sierra Madre on the Second Thomas Shoal. Sullivan’s Filipino counterpart, Eduardo Año, said the resupply will remain “a pure Philippine operation”.

“There is no need at this time for any direct involvement of US forces in RORE [resupply] mission,” Año said in a statement.

Reuters had previously reported that the Philippines had turned down offers from the US to assist its operations in the South China Sea.

Tensions in the disputed waterway have boiled over into violence in the past year, with a Filipino soldier losing a finger last month in a clash that Manila described as an “intentional-high speed ramming” by the China Coast Guard.

Manila and Washington are bound by the 1951 Mutual Defense Treaty, a pact that can be invoked in case of an armed attack against Philippine forces, public vessels or aircraft in the South China Sea. President Joe Biden has affirmed an “ironclad” commitment to aid the Philippines.

China claims nearly all of the South China Sea, overlapping maritime claims of the Philippines, Vietnam, Malaysia and Brunei. In 2016, a Hague-based tribunal said China’s claims had no legal basis, a decision Beijing has rejected.

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How Nato’s China focus obscures greater threats coming from within

https://www.scmp.com/opinion/world-opinion/article/3271129/how-natos-china-focus-obscures-greater-threats-coming-within?utm_source=rss_feed

While the recent Nato summit celebrated the organisation’s 75th anniversary, its focus on China underscored a shift in geopolitical dynamics. The transatlantic alliance, which was founded to defend against the threat from the Soviet Union and later Russia, is increasingly critical of China and its global role.

Nato has voiced deep concern over China’s failure to condemn Russia’s invasion of Ukraine and accused Beijing of providing material and political support for Moscow’s war efforts. This marks a significant turn, with Nato Secretary General Jens Stoltenberg calling it the alliance’s strongest message to date on China’s involvement in the conflict.

The intense focus on China comes at the same time as a growing feeling of unease within Nato. Some Western strategists had anticipated that Russia’s invasion of Ukraine could end up akin to the Soviet quagmire in Afghanistan, potentially leading to the downfall of Russian President Vladimir Putin. Yet, despite funnelling large amounts of financial support and military equipment to Ukraine and imposing severe financial restrictions on Russia – including freezing large parts of its foreign reserves – the conflict in Ukraine has continued into a third year.

Russia has spent heavily on defence during the conflict, allocating upwards of 6 per cent of its GDP to military spending since its invasion began in February 2022. This is in contrast to Nato member countries, whose defence spending as a percentage of GDP tends to be lower.

Moscow has also shown economic resilience thanks to its considerable financial resources, including US$580 billion in foreign currency and gold reserves. This economic cushion supports its military efforts and allows for sustained investment in its defence industries.

Meanwhile, the defence industries in many Nato countries, particularly in Europe, have largely been scaled back following the end of the Cold War. War games and assessments have indicated potential shortfalls in ammunition production and military readiness among alliance members, highlighting a gap in industrial capacity and preparedness for high-intensity conflicts.

While European allies remain wary of China, many are also concerned about being caught in the crossfire of escalating Sino-American tensions in addition to the effects of Russia’s war in Ukraine. They still consider Russia as the main threat to Nato and are sceptical about suggestions of expanding the alliance’s role into the Indo-Pacific.

This scepticism towards Nato’s approach is exemplified by Hungarian Prime Minister Viktor Orban, who is far friendlier towards China and Russia than many of his counterparts in western Europe. Just a few days before the Nato summit, Orban visited Putin and President Xi Jinping. Orban has moved to increase Hungary’s engagement with China, resulting in €16 billion (US$17.4 billion) of investment by Chinese firms, making China the top investor in Hungary.

European nations who rely on commerce with China want to avoid anything that would increase tensions with an important trade partner. Consider Germany, the economic engine of the European Union. In April, German Chancellor Olaf Scholz visited China and discussed how to consolidate and develop their relations. As the second- and third-largest economies globally, their strategic partnership not only enhances bilateral ties but also influences the Eurasian continent and global stability.

Germany is feeling the effects of the deterioration of economic ties with Russia. No longer having access to cheap natural gas from Russia has resulted in a prolonged energy crisis and an economic downturn reminiscent of the 2008 financial crisis, according to a report from two former economic advisers to the German government.

While many commentators are likely to focus on the anti-Chinese rhetoric that dominated the Nato summit, far fewer will recognise that the greatest threat to the transatlantic alliance is coming from within. The unsuccessful assassination attempt on former US president Donald Trump appears to have been a significant boost to his hopes of returning to the White House in November’s election.

Trump was one of the alliance’s loudest and most vociferous critics during his tenure. If he does return to office, it seems likely he will demand reversals of several current positions currently held by the US government, including its generous support for Ukraine’s war effort.

Media reports suggest Trump will pressure Ukraine to give up some of its territory in a peace plan that will include the easing, and perhaps full suspension, of sanctions against Russia. He is also likely to step up his criticism of Nato and member countries who do not increase their military spending.

This is why Nato leaders are making moves behind closed doors to “Trump-proof” the alliance, putting in place contingency plans to keep the group together through a second Trump term. Their options include streamlining procurement of critical military equipment for Kyiv.

Even with a head start in planning, Nato faces an uncertain future. In a piece last month titled “Could Nato survive a second Trump administration?”, Brookings Institute senior fellow Steven Pifer wrote that the alliance would not survive in its current form if Trump is re-elected, “at least not with the United States as a committed ally and alliance leader”.

As Nato moves on from its 75th anniversary celebrations, it confronts profound challenges both from without and within. The intensified focus on China risks taking attention away from internal rifts and the prospect of Trump altering the course of the alliance’s future. The path ahead remains fraught with uncertainty as Nato’s leaders fortify against these threats.

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China cuts loan prime rates, key short-term rate to support economy

https://www.scmp.com/economy/economic-indicators/article/3271334/china-cuts-loan-prime-rates-key-short-term-rate-support-economy?utm_source=rss_feed

The People’s Bank of China lowered the seven-day reverse repo rate by 10 basis points to 1.7 per cent on Monday, in a move to increase financial support for the real economy.

China’s central bank also announced 10 basis points cuts for both the one-year and five-year loan prime rates.

Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, said that more rate cuts are expected after the US Federal Reserve enters a rate cut cycle.

“The rate cut is one step in the right direction,” he said.

More to follow …

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China’s third plenum holds out hope for debt-hit local governments with funding reform

https://www.scmp.com/news/china/politics/article/3271324/chinas-third-plenum-holds-out-hope-debt-hit-local-governments-funding-reform?utm_source=rss_feed

China’s ruling elites have committed to boosting the financial power of local governments, to address a decades-old economic imbalance and overcome a vital structural problem for the world’s No 2 economy.

Over the next five years, China will aim for a “clear division of responsibilities, coordinated financial resources and regional balance” in the fiscal relationship between central and local governments, according to decisions endorsed by the Communist Party’s 20th Central Committee.

The full text of the decisions document from the committee’s long-awaited third plenum last week was released by state news agency Xinhua on Sunday.

The leadership agreed to grant local governments more “autonomous fiscal capacity”, allowing them to increase their tax sources and “appropriately” expand their management authority relating to taxation, the document revealed.

The policy measures from the four-day, closed-door plenary session – aimed at laying out China’s economic road map for the medium term – come as local authorities battle a cash drain, with the risk of waves of defaults on trillions of dollars worth of debt casting a shadow over prospects for the Chinese economy.

Meanwhile, the gulf between central and local wallets is widely regarded as one of the fundamental contradictions in the country’s allegedly uneven development. Tackling the issue could be crucial for a sustainable path forward in an increasingly fraught global geopolitical scenario.

The financial crunch at local levels has also contributed to lukewarm consumer demand. These authorities are the main spenders on various local public services like education and healthcare. Lacking their continued input, the high cost of these services deters households from spending more on other areas.

Insufficient demand at home to absorb domestic production has been broadly viewed as the flip side of the so-called “overcapacity” in China, grounds cited by the United States, the European Union and many Asia-Pacific neighbours in seeking more trade restrictions on Chinese products.

The decisions document of the third plenum, which lists a wide range of reform objectives to be completed by 2029 with more than 300 policy measures, pledges that the central budget will take on more expenditure and reduce the delegation of spending responsibilities to localities.

“The document seems to indicate an important fiscal reform [is] coming,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

“I think the objective is to help local governments to make their fiscal positions sustainable by adding more revenue sources and relocating some expenditures to the central government,” he wrote in a note on Sunday.

Zhang expects the local government bond programme to play a more effective role, with the rules eased so that the funds can be utilised more freely.

He said that the third plenum did not change the government’s policy objectives, but it introduced new measures to achieve such objectives

Since Beijing began market reforms over four decades ago, taxation and central-local relationship reforms have long been regarded as the thorniest and most fundamental elements of a true overhaul of China’s economic system.

In the 1980s, China set up a de facto tax contracting system, with high revenue retention rates for local governments. However, that weakened the central authorities’ fiscal capacity, making many reforms difficult to implement.

The tax-sharing reform in 1994, launched by then-premier Zhu Rongji, eased the central government’s revenue shortfall but was blamed for leading to issues such as increased burdens on local governments.

As a result, local governments turned to auctioning land use rights for more revenue, which helped to create a real estate bubble.

The free fall in the property sector over the past few years has been a key reason for the financial difficulties faced by local governments.

Last year, local government fiscal revenues accounted for 54 per cent of the national total, while they shouldered as much as 86 per cent of the total expenditure, according to data from the finance ministry.

The funds crunch amid a post-pandemic economic slowdown and real estate crisis had added to concerns about the financial risks from China’s over 300 prefecture-level and about 3,000 county-level jurisdictions, some of them mired in crippling debt.

The third plenum has decided that the country will set up a “long-term mechanism” to defuse hidden debt risk, and “reasonably” expand the usage of money raised from local government special bonds.

Measures in the pipeline also include increasing the general transfer payments from the central government to local authorities, handing over consumption tax collection to local governments and improving the central-local split for shared tax revenue – such as value-added taxes.

The central government will also delegate some of its non-tax revenue management authority, according to the plenary document.

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Philippines risks Beijing’s ire as it weighs using allies for South China Sea resupply runs

https://www.scmp.com/week-asia/politics/article/3271263/philippines-risks-beijings-ire-it-weighs-using-allies-south-china-sea-resupply-runs?utm_source=rss_feed

The Philippines is considering a plan to involve units from other countries in its regular resupply missions to a flashpoint in the South China Sea, with observers praising the move even as it risks being perceived as an escalation by Beijing.

News of the proposal first emerged on July 16 after the television show 24 Oras reported that the Armed Forces of the Philippines might combine its resupply missions to Second Thomas Shoal – known locally as Ayungin Shoal – with a joint exercise involving ships and aircraft from partner countries such as the US, Japan and Britain.

The report was soon shared on the Philippine military’s official Facebook page. Three days later, it also shared on Facebook that the country’s navy was considering a “joint sail” with its foreign partners for the resupply missions, without specifying any date.

“We’ll wait for the National Maritime Council to give us the appropriate guidance in terms of timing and other issues,” Defence Secretary Gilberto Teodoro told reporters on July 16. He said the decision would be made by the council and the foreign affairs department.

A former senior government official, who asked not to be named, called the plan “good but possibly dangerous”. While it would provide some cover to Philippine vessels during their resupply missions, analysts say it could be construed as “an escalation” by China.

A plan to combine a resupply mission with a joint exercise “could prove dangerous, but so is current Chinese behaviour. China has been steadily escalating [tension], not the Philippines”, said Gregory Poling, director of the Washington-based Asia Maritime Transparency Initiative.

The Philippine Navy has conducted joint exercises with other countries previously, but any involvement of foreign armed forces in an exercise held in conjunction with Manila’s resupply mission would constitute a major development, analysts say.

The Philippines deliberately grounded a World War II ship, the BRP Sierra Madre, on the Second Thomas Shoal in 1999 to assert its territorial rights. The decrepit hulk has since been garrisoned by a handful of marines, who are provisioned and replaced regularly.

In recent months, Chinese forces have harassed Philippine resupply vessels heading to the shoal on several occasions in a bid to impose Beijing’s territorial claim. The resupply missions were disrupted on June 17 after Chinese coastguard personnel armed with axes and machetes rammed and boarded a Philippine vessel, causing several injuries to several Filipinos, including a sailor who lost a thumb.

China said the Philippines had promised to remove the wreck at the shoal, but Manila dismissed Beijing’s statement, saying it did not make any such commitment.

In the event of the Philippines asking for US help with resupply missions, Washington was likely to answer the call, Poling told This Week in Asia.

On Friday, US national security adviser Jake Sullivan said the US “would do what is necessary” to help the Philippines in its resupply efforts, with Washington’s preference being to maintain the regional status quo.

“We have tried to consult very closely with the Philippines because these are decisions they should lead on, how to most effectively reprovision this ship so that the sailors on board have the food and water and other provisions they need to continue to fulfil their mission,” Sullivan said, speaking at the Aspen Security Forum in Colorado.

If the Philippines were to find it difficult or dangerous to resume its resupply missions on its own, leveraging the support of its allies to deter Chinese aggression would be a feasible option, Poling said.

Chester Cabalza, founder and president of the International Development and Security Cooperation think tank in Manila, told This Week in Asia that the Philippines’s idea for wider maritime participation was “astute”.

Such partnerships would reinforce “Manila’s credible leadership and moral ascendancy on maritime rules-based norms by not stooping to China’s mischievous grey zone tactics”, Cabalza said.

“Manila’s ahead of the curve, drawing a flock of maritime powers to sail with its coastguard and navy. It would mean the Philippines has growing followers of its advocacy to assert its sovereignty.”

The proposal comes as public support grows stronger in the Philippines for the government of President Ferdinand Marcos Jnr to respond more robustly against Beijing over the South China Sea dispute, including forming partnerships with Manila’s allies.

About 71 per cent of Filipinos want such an alliance to defend the country’s territorial and economic rights in the West Philippine Sea – Manila’s name for the part of the South China Sea that includes its exclusive economic zone – according to a survey by Social Weather Stations released on Friday.

Rear Admiral Roy Vincent Trinidad, a spokesman for the Philippine Navy, acknowledged the importance of public support, saying it has contributed to boosting the “sky high” morale of the marine personnel involved in the resupply missions and ensuring they had sufficient supplies.

Philippine forces will continue with their resupply missions and maritime air surveillance flights to protect the country’s territorial rights in the West Philippine Sea, Trinidad said in a press conference on Thursday.

“All our actions are governed by the rules of engagement and international law. Again, we have never been escalatory in our actions. The Communist Party of China’s actions in the West Philippine Sea have always been escalatory.”

The next 10 years: Tsinghua’s Yan Xuetong talks Trump, Taiwan and what it means for China

https://www.scmp.com/news/china/diplomacy/article/3271304/next-10-years-tsinghuas-yan-xuetong-talks-trump-taiwan-and-what-it-means-china?utm_source=rss_feed

In 2013, Yan Xuetong, dean of the Institute of International Relations at Tsinghua University, made nearly 300 predictions on international relations in his book Inertia of History: China and the World by 2023. Ten years later, his predictions had an accuracy of 82.3 per cent, including the forecast of an emerging bipolar world between the US and China. This interview first appeared in . For other interviews in the Open Questions series, click .

I don’t think Trump will go further than US President Joe Biden on the Taiwan issue. If you compare the policies of the Biden and Trump eras, Biden’s [administration] is more inclined towards Taiwan’s independence than Trump. One thing you may have noticed is that Trump always claimed that he was the only US president since the Cold War who had not been involved in a new war. What does this mean? Trump really does not want to go to war with China in the Taiwan Strait. He will be more cautious than Biden in terms of preventing a war across the strait.

The San Francisco summit actually prevented China and the US from going to war over Taiwan. It resolved the main core issue between China and the US.

On the last day of the drills in the Taiwan Strait this time following Taiwanese leader William Lai Ching-te’s inauguration, Chinese and American military officials held a video call. That shows that China and the US had already established a crisis management mechanism to prevent the Taiwan conflict from escalating into a war.

The conflict and confrontation between China and the US didn’t stop after the summit but it changed in two important ways. First, for the worse – the United States has expanded its containment of China from technology decoupling to commercial protectionism … I think the trade dispute between China and the US will continue to worsen.

So what is the other relatively positive change? The two sides have reached an agreement to strengthen social exchanges, including between students, in second-track dialogues, and with academic exchanges. The social exchanges between China and the US have become more relaxed than in the previous year.

Regardless of the election’s outcome, whether Trump or Biden wins, the general trend of China-US relations from now until the first half of next year will be continuous deterioration. As the election is becoming more intense, both sides and their parties are having to be tougher on China, so the Biden administration will definitely introduce some new policies that are not constructive to bilateral relations.

But the impacts will be different depending on who wins. If Biden wins, the bilateral relationship will basically continue along the same path as it does now. But if Trump wins – and the possibility of his winning is growing – the economic confrontation between China and the US will increase, and it will be even more serious than their disputes on security.

If Trump increases tariffs on Chinese products on a greater scale than Biden, China will definitely respond with its own measures. If [Washington] restricts imports of Chinese products, China can only impose a certain degree of restrictions on American products.

Regardless of whether Biden or Trump wins, there should be gradual improvement in China-EU relations in the coming year. This is because the Israel-Hamas war has widened the distance between the European countries and the United States.

As long as European countries distance themselves from the US strategically on the Gaza issue, their positions on this issue will inevitably be close to those of China. So the political conditions for improving relations between China and Europe will be better than when there was only the Ukraine war, an issue on which European countries are criticising China.

US allies have begun to prepare for this. Already this year, German Chancellor [Olaf Scholz] has visited China, and the dialogue between China, Japan and South Korea has resumed after 4½ years. The reason is obvious: they don’t think that Trump will confront China as strongly as Biden on security issues. In other words, the security protections provided by Trump to his allies will be much weaker than during the Biden era, so they know that they need to adjust the balance they keep between China and the US.

As the US’ main strategic competitor, China must be prepared too. I think China will also take the initiative to improve relations with US allies – probably not in terms of security. It is more likely that China will … emphasise economic and social relations with these countries. Because whether it’s Europe, Japan, South Korea or any other country, they still need the Chinese market.

Economic relations between China and US allies will not automatically improve just because the US has distanced itself from its allies on security. China still needs to do a lot of work on this.

The European Union is a good case in point. Regardless of the strategic relationship between China and the US, Europe tends to be more protective of the European market. Populism and protectionism are also on the rise.

I personally think that if China and countries in Europe want to resolve trade disputes, they have to focus on cooperation in new fields, rather than tit-for-tat retaliation against each other. For example, on electric cars, Europe may reconsider cooperation if it can explore joint work with China on production and make it profitable for European countries. If it imports more cars from China, it means it can export more parts for China to make electric cars. If it doesn’t import Chinese cars, China will produce less, and then it will also export less parts. It has to form such a relationship of interest that could possibly help improve economic relations between China and Europe.

In terms of international relations, the Israel-Gaza war will reduce the global political influence of the United States. This is already very obvious, because even its allies have to distance themselves from it on this issue. This will not change until the end of the war.

While US [international] relations will become worse, China’s [international] relations may not necessarily improve. But as the US’ strategic relations with other major powers will be undermined, the strategic balance between China and the US will become less favourable to the US.

In terms of comprehensive strength, China and the United States will widen their gaps with other countries over the next 10 years, given the economic size of China or the US is already four to seven times that of other major powers. The US’ GDP is at least seven times more than that of each major country, except China. If the US economy grows 1 per cent annually, countries other than China must grow at least 7 per cent to avoid widening the gap. This is impossible to achieve.

Then what about China? The GDP gap between other countries and China is at least four times, which means that … if China grows 2 per cent annually, these countries will need to grow 8 per cent to prevent the gap from widening. This is also only a slight possibility. It is not difficult for China to maintain at least 2 per cent annual growth – or more.

The result of this is the bipolar structure between China and the US will become more prominent.

Second, the GDP gap between China and the US in the next five years, from 2024 to 2029, is in danger of widening. Why? The gap between China and the US in AI and chip research and manufacturing is growing and these two things have a great impact on the future digital economy, something that both the Chinese and US economies are increasingly dependent on.

Another factor is that within the next five years, foreign and Chinese private investment in China may be smaller than foreign and American private investment in the US. So, the total investment in the US is larger than that of China, and the US gap with China in AI and chip research and development may also widen. As a result, China and the US’ GDP gap is in danger of widening.

In terms of defence spending, the US spends over US$900 billion per year. China spends less than 30 per cent of that. The US is also involved in wars and is amassing combat experience. So in the next five years, it is less possible for China to narrow the gap with the US in military strength.

From 2030 to 2034, it’s more difficult to forecast. Because by 2030, “counter-globalisation” will be stronger, and both China and the US will face greater development problems than in the previous five years. Populism will dominate the world’s ideology and both countries will need to make major policy adjustments to cope with it. There will be greater difficulties for both countries at home and abroad. So let’s see who can cope with it better.

During this period, I don’t think there is a big prospect of China closing the gap in strength with the US. But it is possible to stop the gap from widening. Can the gap between China and the US start to narrow again in this period? It’s possible, but it depends on whether China can make greater policy reform than the US.

There are two problems with saying “the East is rising and the West is declining”. First, it’s not clear who the East and the West are. Does the East include India, Brazil, South Africa, Vietnam, or Cuba? Does the East include Russia? Russia certainly does not see itself that way. So if we don’t know what the groups are, how do we know who is rising and who is declining?

Second, how do you judge a rise and decline? Does rapid GDP growth or a large share of the world’s GDP equate to a rise? Or is it faster improvements in technology? When we don’t know who the East and the West are and the criteria for rising and declining, I think this saying just reflects [some] people’s wishful thinking … What they wish will not be the reality – it depends on the change in comparative power.

If you simply define the East as China only and the West as the US only, in the 10 years from 2002 to 2012, China did indeed quickly narrow the gap with the US, in terms of GDP. But today it is no longer the case. If we compare the proportion of China and the US in the world’s total GDP in US dollars, it is not narrowing now, but widening.

The term “multipolarity” is not an objective description of the world – it is a wish, not a reality. Many countries want to advance multipolarisation, even the US. The US … does not say that [the world is] bipolar, because the US does not want to admit that China is on an equal footing with it. Other major countries also insist on multipolarisation, because they wish to be one pole of the world.

China hopes the world will become multipolar, so it says it will promote multipolarisation. However, the current trend towards a bipolar configuration is obviously far stronger than any country’s ability to stop it.

In any bipolar world, two superpowers will compete for the so-called middle-zone countries. [These countries] prefer not to take sides, to be nonaligned, thus, they can benefit from both. But when it comes to a unipolar world, they can’t use this strategy.

The “Global South” concept has started to become popular again because when China and the US compete, these countries can use the conflicts between them to serve their own interests. This puts China at a disadvantage.

China’s policy on the Global South is different from – for example – India’s. China’s current policy is preventing itself from being excluded from the concept of the Global South. The Indian government’s policy is exactly the opposite – to exclude China from the concept of the Global South, to highlight that it is the most important representative of the grouping.

China hopes to promote this concept with Russia in multilateral organisations such as Brics, which do not include Western countries. [China hopes for] all of the non-Western organisations where it has membership in this concept of the Global South, so that it can naturally achieve its strategic goal of being part of this group.

I think it is unlikely that Russia and Ukraine will have direct dialogue this year. There is no absolute stalemate on the battlefield so it’s unlikely the two sides will sit down and talk. Both now believe that it is possible for them to advance on the battlefield.

Assuming Trump wins the election and takes office next year, if he changes US policy on Ukraine, direct negotiations will be possible. Because the US is Ukraine’s main military supporter, the military aid provided by Europe is not enough to support Ukraine in the long-term. In this case, a negotiation cannot be ruled out in 2025.

China is neither the initiator of the war nor a participant. It is unlike the European countries and the US which are actually indirectly involved in the war as providers of military aid. So, the role that China can play is not as big as theirs. China’s peacemaking is constructive, but it may not have much of a role to play in facilitating negotiations.

When I visited Europe in April, many people asked me this question. I think they ask this question because they lack understanding of the basic law of international politics. Russia is a world nuclear power and a permanent member of the [UN] Security Council. How can China influence Russia to make any major policy changes? This is impossible. Israel is not a major power, although it has nuclear weapons, and it is not a permanent member of the Security Council. It is such a small country but European states plus the United States together cannot stop it from continuing the war in Gaza. It is beyond China’s capability to persuade Russia into peace.

I think that China does not believe Hamas and Fatah have to wait until after the war to discuss how they can reconcile, jointly manage, or form certain political relationships. China believes that it is possible now to encourage them to negotiate on their position on Gaza and how they will approach the Palestinian issue in the future.

This is why China invited Hamas and Fatah to hold talks in Beijing. I think this has created a starting point for reconciliation between the two sides. I don’t know whether this can eventually lead to a reconciliation between them and achieve joint management of the Gaza Strip, because the outcome of the negotiations depends not only on whether Fatah and Hamas can reconcile, but also on whether Israel and the US allow them to manage the region. So I’m afraid the negotiations would need to be pushed through in a more multilateral international setting.

The Taiwan issue is now less likely to cause military conflict between China and the US because the two countries have a management mechanism. The military conflict in the Taiwan Strait has been controlled, so now everyone has shifted to discussing the South China Sea issue. Both issues have the risk of igniting a conflict accidentally, but there is no risk of it escalating into a war between China and the US.

You can see that since 1991, there have been many small-scale military conflicts in East Asia, including in the South China Sea, but there has been no war between countries in this region. It has been 33 years since then, so I think China and the US are capable of preventing the possibility of small-scale military conflicts or accidents from escalating into wars in East Asia.

North Korea’s economic and military strength is so small that the support it can provide to Russia is very limited, whether it’s on the battlefield, in economic development, or in terms of international influence. For Russia, North Korea’s support is better than nothing but it has no substantive significance. Similarly, Russia is now going all out in the war, so it is also unable to provide decisive and large-scale support to North Korea.

So in this sense, no matter how the relationship between the two sides develops, North Korea’s and Russia’s need for China is far greater than their mutual need for each other. So this determines that [no matter] what kind of relationship they develop, the relationship between North Korea and China, and the relationship between Russia and China will not be significantly affected.

For China, our security focus on the Korean peninsula depends on what is happening on the ground. Different problems have led to different crises at different times, and you always have to tackle the most urgent ones first.

The biggest source of instability for now is US policy, and the increasing military exercises between the US, Japan and South Korea. North Korea has not had a nuclear test for several years. Its nuclear weapons may not be a positive factor but they aren’t the most direct cause of the current instability on the Korean peninsula.

[Both North Korea and the US] have an impact on regional instability, but the US factor is now bigger, more direct and more urgent.

I think there may be some shifts if Trump takes office, because the United States is already involved in the wars in Gaza and Ukraine Is it good for the US to provoke a third military conflict in East Asia? It is in trouble both at home and abroad. So why would Trump follow Biden’s policies and get himself into the same trouble?