Mistral点评

• Chinese foreign minister warns relations with Japan risk going backwards
• Intern’s leaked video clip exposes chaotic management at leading Chinese brokerage
• Tencent, Microsoft, Amazon pitch AI tools for video game developers at ChinaJoy expo
• As Micron president visits China, chip maker stays silent in US-China balancing act
• China’s economic powerhouse seeks AI, humanoid robotics, low-altitude economy upgrade
• China’s former Hainan party chief Luo Baoming faces corruption investigation
• China comic expo kicks out Kimono-clad cosplayer imitating Japan ‘Demon Slayer’ character
• China sets launch date for world’s first thorium molten salt nuclear power station
• China’s crippling debt levels seen worsening as government measures focus on ‘buying time’
• How one Chinese machine tool maker is helping Russia’s war against Ukraine
• ‘Money, money’ Japan knife-wielding mugger who stabbed China tourist sparks mainland fury
• Apple falls: iPhone maker out of China’s top 5 as Huawei ascends
• Resilient China acting ‘goddess’ Wang Churan ridiculed for going make-up free
• China biologist behind gene-edited baby scandal reveals million-dollar US work offer
• China, Russia bombers enter Alaska, Philippines’ Chinese-infiltration fears: 7 highlights
• China’s Guangdong, once a major economic driver, lags national growth average
• ‘I did it as quietly as I could’: the navy chief who wrecked his ship to scupper China’s ambitions
• What Vietnam’s leadership change could mean for Beijing, and the South China Sea dispute
• South China Sea: ‘bullied by China’? Philippine-Vietnam joint drills mark peace bid
• China boy, 11, writes 600 lines of code to build rocket after mastering physics, chemistry
• Chinese and Russian bombers patrolling off Alaska raise concerns about growing military cooperation
• China drives Asia’s venture capital market with 6 of the top 10 quarterly deals: KPMG
• US senator attacks Biden administration for failing to halt sales of advanced chips to China
• Solutions to China’s birth rate problem don’t lie in Japan’s playbook
• At Paris Olympics, Chinese manufacturers won big before the Games even started

Chinese foreign minister warns relations with Japan risk going backwards

https://www.scmp.com/news/china/diplomacy/article/3272080/chinese-foreign-minister-warns-relations-japan-risk-going-backwards?utm_source=rss_feed

China-Japan relations are at a “critical stage” and risk going backwards, Beijing’s Foreign Minister Wang Yi warned on Friday.

He told his Japanese counterpart Yoko Kamikawa that he hoped Tokyo would take an “objective and correct” view of China and pursue a “positive and rational” approach, according to the foreign ministry in Beijing.

“Currently, the China-Japan relationship is at a critical stage where if it fails to move forward it regresses. China’s policy towards Japan has always been stable and consistent,” said Wang, urging the two countries to work together to safeguard the political foundations of their relationship.

Japan’s foreign ministry said: “The two foreign ministers confirmed that they will continue to build up … persistent communication, including mutual visits by foreign ministers at each other’s invitation.”

The talks between the two, held on the sidelines of a meeting of Association of Southeast Nations foreign ministers in Laos, were their first since November.

They followed this week’s visit to Tokyo by Chinese foreign vice-minister Ma Zhaoxu, which saw the resumption of a dialogue mechanism that had been suspended for over four years.

Apart from the long-running grievances over Japan’s wartime record and the territorial dispute in the East China Sea over the Diaoyu Islands (known in Japan as the Senkakus), Beijing has recently been angered by Tokyo’s increasing support for US efforts to pressure China, including efforts to limit its access to advanced microchips.

Kamikawa told Wang on Friday that Japan’s semiconductor export restrictions do not target any specific country but the country was ready to hold constructive talks on the issue, according to the Chinese statement.

For its part, Tokyo has repeatedly expressed frustration at China’s suspension of all Japanese seafood imports following last year’s decision to release treated waste water from the Fukushima nuclear power plant, and on Friday Kamikawa again urged Beijing to lift the ban.

Wang responded that there should be a “long-term international monitoring mechanism” for the Fukushima discharges.

Kamikawa also called for action on the East China Sea and “expressed Japan’s serious concerns regarding China’s intensifying military activities around Japan – including in cooperation with Russia – as well as issues in the South China Sea, Hong Kong, and the Xinjiang Uygur autonomous region and reiterated the importance of peace and stability in the Taiwan Strait.”

Beijing sees Taiwan as part of China that must be reunited with the mainland, by force if necessary. Japan, in common with most countries, does not recognise Taiwan as independent.

Next week Kamikawa, will welcome a US delegation, including Secretary of State Antony Blinken and Defence Secretary Lloyd Austin, to Japan. The talks will include a meeting of the foreign ministers of the Quad, which also includes Australia and India.

Wang also met his South Korean counterpart Cho Tae-yul in Laos on Friday, urging the two sides to step up talks on a free-trade agreement and expand cooperation in areas such as high-end manufacturing, biopharmaceuticals and artificial intelligence.

Relations between the two countries have also been under a growing strain in recent years, with Seoul moving closer to the US. According to the Chinese statement, Wang said relations between the two should “avoid the impact and interference of external factors”.

South Korea said Cho had expressed concern about Russia’s stronger military and economic ties and asked Beijing to play a constructive role to ensure peace and stability on the Korean peninsula.

Intern’s leaked video clip exposes chaotic management at leading Chinese brokerage

https://www.scmp.com/business/china-business/article/3272066/interns-leaked-video-clip-exposes-chaotic-management-leading-chinese-brokerage?utm_source=rss_feed

China Securities, the sixth-largest brokerage in mainland China, has found itself in a tight spot after an intern leaked information about its clients, causing yet another stir in the country’s embattled securities industry.

The Beijing-based brokerage said in a statement on Friday that a video clip containing the company’s name and logo was filmed by an intern without permission.

“The content of the clip leaked sensitive information about our customers and violated the company’s compliance rules,” China Securities said. “We have launched a procedure to hold relevant people accountable for the mistake.”

The company said it would strengthen internal management and introduce disciplinary actions to ward off such leaks in the future.

At least two documents about clients’ fundraising plans were contained in the short video clip of a university student showing his internship experience at China Securities. The logo of another client is also visible in the video.

The video clip went viral on the mainland’s major social media platforms including Douyin and Xiaohongshu, with thousands of users leaving comments that questioned the company’s professionalism.

“The securities sector, due to a beleaguered stock market, has been surrounded by criticism as millions of retail investors are licking their wounds,” said Wang Feng, chairman of Shanghai-based financial services group Ye Lang Capital.

“A lack of oversight caused the leak and exposed China Securities’ chaotic management.”

The benchmark Shanghai Composite Index, which fell below the psychologically important 3,000-point level on June 21, has languished below the threshold amid a crisis of confidence. On Friday, the gauge rose 0.1 per cent to 2,890.90.

Institutional and individual investors are expecting a further decline in key indicators, battered by worries of weakening consumer sentiment, falling housing prices and slumping foreign investment.

Securities firms have been badly exposed to the poorly performing A-share market. They have seen brokerage fees fall and income drop from investment banking businesses.

Of the 24 securities companies trading on the Shanghai and Shenzhen stock exchanges, 16 have issued profit warnings for the first half of 2024. Their net profit from January to June could turn out to be lower than the same period last year.

Beijing’s efforts to reverse the slide in mainland-listed A shares, one of the worst performers worldwide this year, has proved to be unsuccessful as the market downturn has further eroded the wealth of the nation’s 220 million investors.

The financial service industry, which is seen as elite in China, pays lofty salaries to employees, but it does not align with President Xi Jinping’s initiative of common prosperity, which stresses equitable wealth distribution at a time when the nation is facing economic headwinds.

Top regulators plan to cap the annual salaries of financial workers at around 3 million yuan (US$413,702), as part of a campaign to eradicate extravagance and hedonism from the industry and narrow the wealth gap, sources said.

Tencent, Microsoft, Amazon pitch AI tools for video game developers at ChinaJoy expo

https://www.scmp.com/tech/big-tech/article/3272074/tencent-microsoft-amazon-pitch-ai-tools-video-game-developers-chinajoy-expo?utm_source=rss_feed

Big Tech companies, from Tencent Holdings to Microsoft and Amazon.com, have rushed to pitch their artificial intelligence (AI) tools to Chinese video gaming firms at ChinaJoy, the country’s biggest annual digital entertainment expo in Shanghai.

Shenzhen-based Tencent, which runs the world’s biggest video gaming business by revenue, is offering a range of AI services to cover the “full life cycle” of game development, Tencent Cloud Internet Industry general manager Chen Liang told the South China Morning Post on Friday at ChinaJoy, which concludes on Sunday.

“AI has been used in video games as early as the 1990s,” Chen said. “But the current generative AI (GenAI) boom has raised people’s expectations of the entire market.”

Citing an example, Chen said large language models – the technology underpinning GenAI services like ChatGPT – have helped shorten the time for content generation in video games. “There are many things we want to do in the future, including using AI in character production, scene production and making bots,” he said.

Tencent Cloud, which is responsible for the internet giant’s AI operations, has been working on Wuthering Waves – a hit action role-playing mobile game developed by Guangzhou-based Kuro Games – since the project was started several years ago, according to Chen.

The Tencent unit accounts for 42.9 per cent of cloud services adoption in the domestic gaming sector during the second half of 2023, the company cited an IDC report as saying. The report also said more than 90 per cent of China’s top gaming companies, including Perfect World and 37Games, use Tencent Cloud’s solutions.

Cloud computing technology enables companies to distribute, manage or process over the internet a range of software and other digital resources as an on-demand service, just like electricity from a power grid. These resources are stored inside data centres, where AI systems training is typically done.

The positive response to GenAI advances at ChinaJoy reflects the continued optimism for further developing and expanding adoption of the technology in the world’s second-largest economy.

Microsoft, which just went through a global outage of cloud computing services last week, said the company’s AI platform is providing support for a number of local video-gaming firms. Through Microsoft’s Azure OpenAI, Beijing-based Perfect World is able to create non-player characters and digital humans, according to the company.

Johnny Tian, a vice-president at Microsoft Greater China Region, said at ChinaJoy that the US tech company’s “huge AI system” will continue to support the overseas expansion plans of Chinese game developers.

Amazon Web Services, meanwhile, has been supporting various Chinese video gaming studios to improve their workflow efficiency through its Amazon Bedrock service, according to Zhang Xiaofeng, gaming principal architect at the Seattle-based firm. These include analysing user comments for ByteDance-owned Moonton Technology, and operations and maintenance management at Shanghai-based Lilith Games.

“The [emergence of] generative AI is similar to the invention of the steam engine,” Zhang said. “It can bring about an industrial revolution in the video game industry.”

Still, China’s video gaming market has seen growth slow in the first half, when total sales rose 2.1 per cent year on year to 147.3 billion yuan (US$20.3 million), according to a report released on Thursday by the semi-official trade body Game Publishing Committee of the China Audio-Video and Digital Publishing Association.

While the industry saw a 2.4 per cent revenue drop in the first half of 2023, full-year growth was at 14 per cent, according to the association’s earlier reports.

“I personally think the gaming industry is still in the early stage of the so-called explosion in AI applications,” Tencent Cloud’s Chen said. He pointed out that developers are trying to strike a balance between achieving quality with AI applications, while managing the cost of computing power consumption.

As Micron president visits China, chip maker stays silent in US-China balancing act

https://www.scmp.com/tech/big-tech/article/3272012/micron-president-visits-china-chip-maker-stays-silent-us-china-balancing-act?utm_source=rss_feed

US chip maker Micron Technology, which Beijing targeted last year with a partial sales ban, has stayed tight-lipped about the company president’s visit to China, reflecting the uneasiness of semiconductor firms as they try to maintain business in the world’s second-largest economy amid geopolitical uncertainty.

Sanjay Mehrotra was among a group of US executives who this week met with top Chinese top officials, including Vice-Premier He Lifeng and Foreign Minister Wang Yi. Chinese officials asked US businesses to “play a strong role” in the country’s development. Micron and Mehrotra were not mentioned in China’s official readout, but a picture from the Foreign Ministry on Monday showed Mehrotra among the visitors.

Micron also made no mention of the visit on social media, and there have been no public reports about Mehrotra’s visit. In contrast, Apple chief operating officer Jeff Williams, who was also in the group, separately met Shenzhen party secretary Meng Fanli and visited Apple stores in China.

Micron did not immediately respond to a request for comment on Friday.

Mehrotra’s low-profile trip comes as the Boise, Idaho-based memory chip maker tries to maintain its global business amid an escalating US-China tech war.

Pressure has risen as Washington has ramped up scrutiny and export restrictions on China, cutting the country off from some of the world’s most advanced semiconductors. In what was widely seen as a response, China’s Cyberspace Administration ruled that Micron failed to pass a “cybersecurity review”, barring key infrastructure operators in the country buying its products.

For the financial year ended August 31, 2023, Micron reported a 31 per cent decline in its mainland China revenue to US$2.2 billion, and an 80 per cent decline in Hong Kong to US$340 million.

Yangtze Memory Technologies Corporation (YMTC), China’s top memory chip maker, has also filed several lawsuits against its American rival in both the US and China.

In the latest lawsuit filed to a California court this month, YMTC accuses Micron of infringing on 11 of its patents related to 3D NAND Flash and DRAM products. The Chinese chip maker requested a court order to stop Micron from selling the identified memory products in the US.

YMTC first filed a civil lawsuit against the largest US memory chip maker last November in the same court, alleging that Micron and its subsidiary Micron Consumer Products Group together infringed on eight of YMTC’s patents for flash memory chips.

In a separate case, YMTC has filed lawsuits against Micron at the Beijing Intellectual Property Court, asserting that its American rival infringed three of its Chinese patents. It asked the court to ban the sale of related products in the country, according to a disclosure in Micron’s second-quarter financial report.

Micron has since reiterated its commitment to the China market. It announced last year a plan to invest US$600 million to upgrade its chip assembly and packaging plant in Xian, including a buyout of its Taiwanese partner Powertech Technology.

Mehrotra met Chinese commerce minister Wang Wentao in Beijing last November. Wang said China welcomes Micron to grow its business “under the precondition of following Chinese laws and regulations”, while Mehrotra “expressed willingness to expand investments in China”, according to a brief statement from the ministry at the time.

China’s economic powerhouse seeks AI, humanoid robotics, low-altitude economy upgrade

https://www.scmp.com/economy/china-economy/article/3272011/chinas-economic-powerhouse-seeks-ai-humanoid-robotics-low-altitude-economy-upgrade?utm_source=rss_feed

China’s economic powerhouse of Shanghai would focus on artificial intelligence (AI), humanoid robotics and the low-altitude economy in efforts to upgrade services for its industrial producers amid the country’s overall transition towards technology-driven growth.

In a three-year action plan released on Thursday, the Shanghai municipal government vowed to attract more than 100 AI companies, build a national humanoid robot manufacturing innovation centre and test low-altitude industrial logistics in its suburbs by 2027.

The emerging sectors are intended to strengthen industrial services – a form of producer services – which, in contrast to consumer services, mainly target businesses and are regarded as a major shortcoming in the Chinese economy.

Shanghai sees industrial services as “a key link in promoting new industrialisation and cultivating new quality productive force”, according to the plan.

Surrounding the strategic sectors, the business centre of the world’s second-largest economy is aiming to cultivate 50 platform enterprises with revenue of more than 1 billion yuan (US$138 million) and “outstanding” service capabilities, including more than five unicorn firms “with international influence”, it said.

Pledging to build a batch of first-class AI companies, the plan emphasised the application of large AI models in drug screening, molecular structure prediction and pharmaceutical testing.

AI-powered humanlike robots, which are expected to replace human labour and significantly liberate productivity in the future, are to be used in car making, equipment production and parts processing as the city works towards establishing a humanoid innovation centre amid a worldwide race in the burgeoning industry.

The World Artificial Intelligence Conference held in Shanghai earlier this month showcased 25 humanoid robots, including Tesla’s second-generation Optimus and China’s first full-size, general-purpose humanoid Qinglong, setting a record for the number of robots displayed.

A number of humanoid robot companies have emerged in Shanghai in the past few years, accumulating key technologies in various modules, including hands, feet and joints, and achieving small-scale production.

Four out of the 12 humanoid robots released in China last year were from Shanghai’s Pudong district, according to official media reports.

The plan released on Thursday also indicated that Shanghai would expedite the development of the low-altitude economy, which China has been pushing to foster high-value jobs, bolster innovation and inject momentum into its slowing economy.

The city is planning the layout of low-altitude routes, “tentatively opening” some commercial routes for drone cargo and electric vertical take-off and landing applications, while encouraging experiments to be carried out in the suburban district of Qingpu, it said.

The municipal government also vowed to enhance services in industrial design, testing and legal services to improve the reputation and quality of Shanghai-made products.

Authorities have been urged to enhance producer services by some politicians, with Huang Qifan, the outspoken former mayor of Chongqing, calling it the “weakest link” in China’s production system.

Producer services contribute less than a fifth of China’s gross domestic product, compared to more than a half in the United States, Huang, who remains an influential figure for his economic insights, told a forum in Guangzhou in October.

China’s former Hainan party chief Luo Baoming faces corruption investigation

https://www.scmp.com/news/china/politics/article/3272010/chinas-former-hainan-party-chief-luo-baoming-faces-corruption-investigation?utm_source=rss_feed

The former Communist Party boss of the southern Chinese province of Hainan who helped transform it into a strategic hub in the South China Sea has been placed under investigation for corruption.

China’s top corruption watchdog, the Central Commission for Discipline Inspection (CCDI), said on Thursday that Luo Baoming was being investigated for suspected severe violations of party discipline and the law – the usual euphemism for corruption.

Luo, who went on to serve as the vice-chairman of the Overseas Chinese Affairs Committee of the National People’s Congress, China’s legislature, “voluntarily turned himself in”, according to the commission. No further details were given.

Luo, 72, a native of northern city of Tianjin, started his career at the Inner Mongolia Production and Construction Corporation in 1969, then returned to Tianjin in 1973, where he rose through the ranks to eventually head the city’s Communist Party propaganda department in 1997, according to public records.

Luo rose to prominence in Hainan where he spent more than 15 years in various senior roles.

During his time in office, the rustic island was transformed into one of the region’s most popular tourist destinations, and has become a strategic Chinese outpost in the northern part of the South China Sea, where China has staked vast territorial claims that have fuelled tensions between Beijing, its neighbours and Washington.

In 2001, Luo was promoted to deputy secretary of the party committee in Hainan. He became the provincial governor in 2007 and was appointed as the province’s Communist Party chief in 2011.

Hainan, which is almost the size of Taiwan, has gone through rapid development on its way to becoming a major resort.

After being approved by the State Council, the province established the prefecture-level city of Sansha in 2012 at Yongxing Island – or Woody Island – under Luo’s watch. The city, which is situated in the contested Paracel Islands, is responsible for managing the islands, reefs, and surrounding waters in the South China Sea.

While Luo was in power, Hainan invested in building, upgrading and expanding critical civilian infrastructure, including railways, ports and airports – such as Meilan International airport in Haikou city – to boost capacity and connectivity, transforming the island into a strategic and economic hub.

In 2016, Luo led a delegation to Canada and the United States and said Chinese provincial party secretaries should be invited “to lead Communist Party delegations to visit the US annually to enhance dialogue, exchanges, and mutual trust between the two sides”, according to the official Hainan Daily.

Luo stepped down from his role as Hainan’s party secretary in 2017 to serve as the vice-chairman of the Overseas Chinese Affairs Committee of the 12th and 13th National People’s Congress until 2023, according to public records.

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China comic expo kicks out Kimono-clad cosplayer imitating Japan ‘Demon Slayer’ character

https://www.scmp.com/news/people-culture/trending-china/article/3271954/china-comic-expo-kicks-out-kimono-clad-cosplayer-imitating-japan-demon-slayer-character?utm_source=rss_feed

A woman who wore a kimono to cosplay a popular manga character and attend an anime exhibition in China was refused entry and told that wearing the traditional Japanese attire was not allowed.

The incident happened on July 20 at the entrance of the Huanying Cartoon Exhibition in Jinan, eastern Shandong province.

A Chinese visitor dressed in a kimono like Nezuko Kamado, the main character in the manga series Demon Slayer, was refused entry to the hall where the event was being held, reported the news portal Net Ease.

“Please get out. We have this rule and it is my duty. Please understand this,” the security worker said in a viral video.

“What a nonsense rule. Which company made this rule? Can you take me to talk to your manager?” the woman replied.

The security guard shouted: “Who do you think you are?”.

“It’s just not allowed to wear a kimono here. This is China. Wearing a kimono is not allowed, you know?” he said. The visitor then left.

The manga series Demon Slayer, published during 2016-2020, tells the story of a young boy Tanjirō Kamado who becomes a demon hunter after his family is brutally murdered by demons.

He sets out on a journey to find a way to turn his younger sister Nezuko back into a human.

The books and videos have been translated into Chinese have been well received on the mainland.

It is not clear whether the Huanying event had issued any dress code restrictions in advance.

There was a similar case in central Hunan province in which two Chinese women wearing kimono were barred from visiting an anime show.

A security guard showed them a poster which said visitors were forbidden from wearing the garment because it is related to sensitive political, ethnic, historical and religious topics.

The controversies sparked discussion on mainland social media.

“I don’t understand. The animation show is all about Japanese manga culture. Why does it prohibit visitors from cosplaying characters in kimonos?” one online observer on Douyin said.

Others took a different view, with one internet user writing: “I side with the security guard. Kimonos are not simply Japanese clothes. It reminds us of a humiliating time in history.”

China sets launch date for world’s first thorium molten salt nuclear power station

https://www.scmp.com/news/china/science/article/3271978/china-sets-launch-date-worlds-first-thorium-molten-salt-nuclear-power-station?utm_source=rss_feed

China plans to start building the world’s first molten salt reactor power station next year in the Gobi Desert.

The reactor does not need water for cooling because it uses liquid salt and carbon dioxide to transfer heat and generate electricity.

Using thorium as its primary fuel, it means worries over a potential shortage of uranium – the usual fuel used in nuclear reactors – are allayed, as thorium is more abundant than uranium.

According to some scientists’ estimates, China has enough thorium reserves to meet its energy needs for 20,000 years.

The reactor is scheduled to be completed and operational in 2029, generating heat at a maximum power of 60 megawatts.

Part of the thermal energy will drive a 10MW electric power unit, and the rest will produce hydrogen by splitting water molecules at high temperature.

The small, modular, thorium-based molten salt reactor power station will be constructed and operated by the Shanghai Institute of Applied Physics, Chinese Academy of Sciences.

The institute disclosed the construction plan in an environmental assessment report posted on its website this week.

This project will “drive the development of a wide range of technologies involving materials and high-end equipment manufacturing”, said the report compiled by the Shanghai Nuclear Engineering Research and Design Institute.

It will help China achieve “energy independence”, it added.

Currently, the only operating thorium reactor on Earth is located in the Gobi Desert around 120km northwest of the city of Wuwei, Gansu province.

This experimental reactor can only produce 2MW of thermal power and does not generate electricity.

However, it incorporates some revolutionary technologies, including superalloys that can withstand high temperatures, radiation and chemical corrosion.

This small reactor received operational approval from China’s Nuclear Safety Administration in June last year and achieved criticality, or sustainable, chain nuclear reaction in October.

The success of this pilot project has provided a basis and experience for constructing larger reactors capable of power generation, according to the report.

This is the first time China has disclosed the operational status of this experimental reactor to the public.

Thorium-based molten salt reactors have some potential military applications due to their compact structure and safety, such as powering naval ships, submarines and even aircraft.

The site for the new power generation reactor will be west of the experimental small reactor, occupying an area smaller than a soccer field.

Molten salt carrying thorium fuel enters the reactor core through pipes to undergo a chain reaction. After the temperature rises, it flows out the other side and transfers heat to the molten salt without thorium that is circulating in a separate loop.

The hot but non-radioactive molten salt then flows into the electricity plant next to the reactor to drive a carbon dioxide-based gas turbine for power generation.

The new project also includes many other facilities, such as a research centre and spent fuel processing plant.

According to the report, more than 80 per cent of the spent fuel material will be recycled, and the remaining radioactive waste will be solidified into glass and transported to a national nuclear waste disposal site deep underground in the Gobi Desert.

Currently, most uranium fuel reactors using water for cooling have the risk of explosion if the pumps malfunction.

But in the thorium reactor, the molten salt can drop into a container below the reactor, posing no threat to the surrounding environment.

According to the report, the new reactor will be used for research purposes, primarily serving scientists. However, a wind power base, a solar power station, a molten salt-based energy storage power station, a thermal power plant and a chemical production base will also be constructed at the same time as the thorium power plant.

The different types of energy will all be integrated into a smart grid to provide low-cost, low-carbon, stable and sufficient electricity for industrial production.

Then starting from 2030, China will begin constructing commercial modular thorium-based reactors with an electric generation capacity of 100MW or more.

Chinese shipbuilders have also recently unveiled the world’s first design for a giant container ship powered by this molten salt reactor. Some transport experts believe it could start a new revolution in human logistics.

The world’s first thorium-based molten salt reactor was built and operated at the Oak Ridge National Laboratory in the United States in the 1960s for four years.

Due to technical limitations at the time, the reactor encountered many problems, resulting in half of its operational time being spent on shutdowns for maintenance.

The reactor was permanently closed in December 1969.

In recent years, TerraPower, founded by Bill Gates, has been collaborating with Oak Ridge Laboratory to restart the thorium fuel reactor project and promote the development of sustainable nuclear energy technologies.

Some countries rich in thorium, including Malaysia and Indonesia, have also begun nuclear research projects.

But some scientists still have doubts about the feasibility of this technology.

One of the significant challenges faced by the Oak Ridge reactor was that metal pipes became brittle and even ruptured under the effects of high temperature, high corrosion and highly radioactive molten salt.

The discovery of new uranium reserves and increased production also seem to make the substitution of thorium fuel less urgent.

“Molten salt reactors are a bad idea,” M.V. Ramana, a public policy professor at the University of British Columbia, said in an article published in the Bulletin of the Atomic Scientists in 2022.

Other paths for new-generation nuclear power technologies include high-temperature gas-cooled reactors, sodium-cooled fast reactors, accelerator-driven reactors and lead-cooled fast reactors.

China has invested in research into all of these and is at the forefront of actual construction progress.

As the world’s first commercial fourth-generation nuclear power station, the Shidaowan high-temperature gas-cooled reactor was connected to the grid in December 2023, with its reactor core temperature reaching a record-breaking 1,000 degrees Celsius (1,832 degrees Fahrenheit).

The United States has 93 nuclear power units, significantly more than China’s 56.

However, most American nuclear power plants use technologies from the Cold War era. According to a study in June by the Information Technology & Innovation Foundation, a non-partisan research institute in Washington, the US could be up to 15 years behind China in developing hi-tech nuclear power.

Currently, China is growing at a rate of six to eight nuclear reactors per year using self-developed new technologies.

In fact, Beijing’s plan is that by 2035, the number of advanced reactors in China will reach 150, surpassing the combined total of the United States and France.

China’s crippling debt levels seen worsening as government measures focus on ‘buying time’

https://www.scmp.com/economy/economic-indicators/article/3272025/chinas-crippling-debt-levels-seen-worsening-government-measures-focus-buying-time?utm_source=rss_feed

China’s rescue plan to resolve its local government debt crisis has thus far provided only temporary fixes, with default risks remaining significant and the debt pile set to grow in the coming two years, according to a new S&P Global Ratings report.

A series of measures implemented a year ago after a meeting of the Politburo – the centre of power within the Communist Party – included a debt-swap programme and loan restructuring aimed at defusing what threatens to be a financial time bomb that could damage China’s banking system.

“So far, we see temporary fixes for China’s heavily indebted local government financing vehicles (LGFVs),” S&P Global Ratings credit analyst Laura Li said in the report, released on Thursday.

“The measures are more focused on ‘buying time’ than addressing the weak fundamentals of local government corporate arms.”

It is difficult to reverse course after years of rapid debt growth from LGFVs, the US rating agency said.

LGFVs, which have proliferated since the global financial crisis in 2008, are hybrid entities that are both public and corporate and were created to skirt restrictions on local government borrowing.

“Last year, LGFV-debt growth dropped moderately – but was still single-digit growth. We think borrowings will likely grow at a mid-to-high single-digit level over the next couple of years,” the report said.

Under the package of measures announced last year, local governments, financial institutions and investors are all required to shoulder some of the cost of resolving this sector’s outsized debt burdens, the report added.

“In our view, local and regional governments will try to avoid any type of default that would cause systemic risk,” said S&P Global Ratings credit analyst Wenyin Huang. “However, they are likely to allow low-impact credit events to happen, such as defaults on selected non-standard debt and commercial paper.”

The S&P report suggested that smaller regional banks, especially those in northeastern and southwestern China, will suffer the most relative to their asset size, since they have the highest exposure to weaker LGFVs.

The International Monetary Fund estimated that China’s total LGFV debt hit 66 trillion yuan (US$9.1 trillion) in 2023, or more than half of the nation’s gross domestic product.

Finance minister Lan Foan has said coordinated efforts have led to an overall alleviation of local debt risks, that debt problems remained under control, and that associated risks were being addressed through “high-quality development”.

However, while there has not been a default in the listed market, LGFVs have missed interest payments and defaulted on their borrowings in private transactions, according to estimates from Shenwan Hongyuan Securities.

The Chinese broker estimated that there were at least 49 credit-risk events in the first half of 2024 for LGFVs, up from 41 over the same period in 2023, and that two-thirds of the risk events were actual defaults.

Financing vehicles from Shandong and Guizhou provinces accounted for 74 per cent of all credit-risk events, according to a note by the broker last week.

Government finances also have not improved. In June, national fiscal revenue posted a 2.6 per cent year-on-year contraction, following a 3.2 per cent drop in May, data from the Ministry of Finance showed on Monday.

Bank of America estimated that revenue growth contracted by 1.1 per cent in June, compared with a rise of 2.1 per cent in May.

The US bank also estimated that, for the first half of this year, actual fiscal revenue was only at 51.8 per cent of the annual budget, below the rate seen most years, except for 2022.

How one Chinese machine tool maker is helping Russia’s war against Ukraine

https://www.washingtonpost.com/world/2024/07/26/russia-china-military-drones-ukraine-war/2024-07-18T03:02:18.779Z

When NATO this month accused China of being a “decisive enabler” of Russia’s war in Ukraine, the bloc wasn’t referring to Chinese tanks, or ammunition, or troops.

The statement instead pointed to Chinese transfers of “dual use” equipment, like sophisticated machine tools, that have been used to make Russian weapons. China’s exports of those machine tools more than doubled last year, according to trade data collated by the United Nations.

One of the companies that has benefited from Russia’s hunger for these goods is a midsize laser machine tool company called Shandong Oree Laser Technology Co. — one of dozens of Chinese companies that the U.S. Treasury Department sanctioned last month.

The Washington Post reviewed company records, videos, advertising materials and other open-source material to sketch a profile of Oree Laser, offering a glimpse into the myriad ways the Russian war effort relies on Chinese industry.

Oree Laser is emblematic of the vital and increasing support that Chinese companies are providing to Russia: It makes fiber laser cutters, which have civilian applications but are also used in the production of military drones, a weapon that has defined the war in Ukraine.

Beijing confirmed this week that it will not supply weapons to Russia, Ukrainian President Volodymyr Zelensky said Wednesday after his foreign minister, Dmytro Kuleba, met his Chinese counterpart, Wang Yi.

But analysts say that Chinese exports to Russia — not just in sectors like machine tools, but also specialized electronic equipment and other high-end technology components — enable Moscow to expand its military productive capabilities and evade global efforts to end the war in Ukraine, which will enter its 900th day next month.

Oree Laser was one of the dozens of Chinese companies that the U.S. Treasury sanctioned last month in an effort to curb “Russia’s ability to benefit from access to foreign technology, equipment, software, and IT services.”

The Treasury said Oree Laser has shipped metalworking and other related equipment to Russia, and sanctioned it under the category of “PRC-based suppliers to Russian Military-Industrial Base.”

A review of the United Nations’ Comtrade database following NATO’s unprecedented assertion this month showed that China exported more than $245 million worth of laser machine tools to Russia last year and $162 million in 2022, according to the latest available U.N. Comtrade data. Russia invaded Ukraine on Feb. 24, 2022. In 2021, Chinese exports of laser machine tools to Russia totaled only $90 million, according to the database.

China also separately exported $390 million in metalworking machines to Russia in 2023, up from $94 million the year before.

Russia “has become completely dependent from supplies of all types of machine tools and their parts from China,” said Pavel Luzin, a visiting scholar at Tufts University and an expert on the Russian armed forces.

Luzin estimates that 90 percent of imported machine tools come from China, and even those made in Russia are produced with Chinese components, parts and engines.

Beijing has not officially, on a state level, provided military support to Russia in a substantial way, and it has dismissed U.S. and NATO accusations that it is supporting the Russian war machine, calling these politically motivated and groundless.

Still, analysts say Beijing, which tightly controls its private sector, has allowed companies to continue doing any business it wants with Russia — a relationship that is working for both Russia and China.

“[Russia] knows that its strategic partnership with China will likely be a lasting one, which gives it confidence to focus on its confrontation with NATO,” said Cheng Chen, a professor of political science and an expert on Russia-China ties at the University at Albany, SUNY.

‘Welcome Russian customers’

Oree Laser’s business dealings with Russia predate Moscow’s invasion of Ukraine, with the company posting videos taken before 2022 showing Russian customers posing next to their machines with a thumbs-up sign, saying it had their “trust and praise.”

But the business relationship appears to have deepened after the invasion and Russia’s increasing isolation.

Oree Laser is privately held and does not release financial statements or trade data, but says on an advertising page that it ships the products it makes — laser machine tools — to 100 countries, including Russia.

Oree Laser did not respond to a request for an interview or to emailed questions sent Tuesday about its business in Russia, if it knows the end use of its equipment there, and the recent sanctions. It has not commented publicly on the Treasury designation.

The company has leaned heavily into business with Russian clients after the war, including by hiring more Russian speakers and participating in major Moscow-based trade fairs.

Oree Laser posted ads last August looking for salespeople who spoke Russian, and it separately advertised for employees to be stationed in the country to join the nine fluent Russian speakers it says it has there for “good customer service.”

An Oree employee last July uploaded a video to Douyin, the Chinese version of TikTok, enthusiastically giving Russian clients a tour of the factory and a demonstration of its machines. “Welcome Russian customers,” the employee wrote in a caption. “We hope that our cooperation will be smooth and that our customers will not regret their visit!”

The company has made other accommodations to adapt to the needs of Russian clients. At the trade fair in Moscow last year, an employee promoted a cutting machine that could have its operating system in Russian.

Oree Laser participated in the same trade show this year, where it said Russian visitors were “captivated by the live demonstrations showcasing the precision and speed of our machines.”

Russia’s own manufacturing sector does not produce machine tools like the precision laser cutters Oree manufactures, and it has long relied on imports to procure these tools and the parts needed to operate them.

Before the invasion, it sourced these tools from European, Japanese, South Korean and other manufacturers. But many of those supply lines have been cut off, analysts say, either because of sanctions or concerns about their application for military purposes.

The company’s fiber laser tools are an example of machines that have been used by Russia’s defense industry to produce military drones, reactive armor and other military equipment, said Allen Maggard, an analyst at the Washington-based global security nonprofit C4ADS, who reviewed Oree Laser’s company advertisements.

Fiber laser cutters are able to cut metal into precise shapes, something that cannot be replicated by the human hand, and are used to create parts such as military drone frames.

“Oree Laser’s overall profile aligns with other Chinese manufacturers of laser machine tools used by the Russian defense industry,” said Maggard. Laser cutters, he added, have been used by Aeroscan, a Russian manufacturer of military drones, while other Russian companies use Chinese laser cutters to manufacture buggies and reactive armor for military users.

A recent article in a government-owned newspaper said Oree Laser’s products have been sold to industries including the military — without specifying which military — and are also used for automobile manufacturing and to make precision instruments. In promotional videos, it has touted its machines’ usage in bridge construction and shipbuilding.

Pride of Jinan city

Oree Laser is among the Chinese companies that have been elevated and supported by local officials, despite mounting Western pressure on third-country support for Russia’s war machine.

Beijing has so far done little to stop private companies from supplying the Russian defense industries, even though it can and does have significant control over its industries. NATO will not be able to stop the export of dual-use goods like these laser machine tools without Chinese government cooperation, analysts say.

There has been “little incentive to crack down hard as its strategic competition with the U.S. continues to heat up,” said Chen of the University at Albany, SUNY.

For Oree Laser, business seems to be going well. It said in April that it would be expanding significantly so that it could produce 10,000 medium- and high-end laser machines per year, with construction expected to be completed this year.

The expansion plan has been selected as a key project of the city of Jinan, where Oree is based, for 2024. Communist Party officials from Jinan have visited Oree every month since May to learn about the expansion and Oree’s needs, according to posts on its website.

Just this month, officials said the expansion was a key project for the city, as well as wider Shandong province, as an “important engine” for economic development.

Still, burgeoning business ties with Russia come at a cost, even if that is difficult to quantify because of its opacity.

Oree Laser officials had been preparing to go to Chicago in September for the International Manufacturing Technology Show, the largest trade fair of its kind in the Western Hemisphere. It posted on its YouTube page, offering exclusive deals and discounts.

The Association for Manufacturing Technology, which organizes the trade show, canceled Oree Laser’s participation after seeing it was sanctioned by the Treasury.

“As soon as we saw their name, we removed them from the show,” said Bonnie Gurney, the association’s vice president for strategic content and partnerships.

Some analysts say, however, that some sanctioned companies will remain undeterred and isolation could push these companies to go all in on Russia.

“When a company has been sanctioned, it is then free to switch its entire business to Russia,” said Jack Watling, a senior research fellow at the Royal United Services Institute. “It doesn’t have an alternative market, so it may as well go with it.”

Mahtani reported from Singapore and Wu from Taipei. Catherine Belton contributed to this report.

‘Money, money’ Japan knife-wielding mugger who stabbed China tourist sparks mainland fury

https://www.scmp.com/news/people-culture/trending-china/article/3271851/money-money-japan-knife-wielding-mugger-who-stabbed-china-tourist-sparks-mainland-fury?utm_source=rss_feed

The plight of a tourist from China who was stabbed by a mugger in Japan who shouted “money money” as he staged the violent robbery has flooded mainland social media with outrage.

Su Weihao,53, ands his wife were returning to their hotel in the city of Osaka on the Japanese island of Honshu when the robber struck on July 22, according to a report in The Mainichi Shimbun newspaper.

The knife-wielding attacker repeatedly shouted “money, money” during the incident in which Su suffered a stab wound to his left arm and hand. His wife was unharmed.

The couple sought refuge in a nearby convenience store where customers called the police. Their assailant fled empty-handed.

Police, who described the assailant as approximately 1.7 metres tall, wearing a white T-shirt, say he is facing charges of robbery and personal injury.

On July 23, staff from the Chinese Consulate in Osaka told Southern Metropolis Daily that the incident has been properly handled, adding that they will provide assistance as soon as they receive a request.

The attack has triggered a significant discussions on mainland social media about deteriorating public safety in Japan.

Data from the country’s National Police Agency shows that while the number of reported crimes in Japan had been declining for two decades following a peak in 2002, it began rising again in 2022.

Last year, a total of 12,372 major crimes, including murder, robbery, indecent assault and kidnapping, were reported, a 29.8 per cent increase from the previous year, reported Nippon.com.

A post by an online observer in China who expressed a reluctance to travel overseas received 14,000 likes.

“After reading this, I wonder why people don’t appreciate the great landscapes in China. Travelling within our own country is not only comparable to other countries but also safer. There have been similar incidents in the US too,” the person said.

Others recalled the case of Hu Youping, who died after shielding a Japanese mother and her child during a knife attack on a school bus in Suzhou, north of Shanghai, in June.

The attacker was a 52-year-old unemployed Chinese man.

One internet user said: “Two Japanese were stabbed in China, and not only did a Chinese woman even sacrificed herself to save them, but the attacker was also caught immediately.

“Two Chinese people were stabbed in Japan, and not only did no one help, but the attacker is still at large. I remember people saying that stabbing Japanese people would harm the business environment.

“Will this attack on a Chinese person harm the business environment in Japan?”

Another person said: “It seems that Suzhou has heroes like Hu Youping, but Japan only has indifference!”

Apple falls: iPhone maker out of China’s top 5 as Huawei ascends

https://www.scmp.com/tech/big-tech/article/3271994/apple-falls-iphone-maker-out-chinas-top-5-huawei-ascends?utm_source=rss_feed

Apple has fallen out of the top 5 ranking of smartphone vendors in China, according to data trackers, marking the first time in years the iPhone maker has fallen so low in one of its most important markets.

iPhone shipments in China in the three months ended June declined 2 per cent year on year, bumping Apple down to No 6 on Canalys’ list of top vendors by shipments, putting it behind Vivo, Oppo, Honor, Huawei Technologies and Xiaomi, according to a report from the market research firm on Thursday.

“It is the first quarter in history that domestic vendors dominate all the top five positions,” Canalys analyst Lucas Zhong wrote. “Conversely, Apple is facing a bottleneck in mainland China.”

The Chinese smartphone market, the world’s largest, is extremely competitive, with the top six brands competing for roughly 95 per cent of the market. Apple is the last foreign brand standing in this group after Samsung Electronics lost relevance.

iPhone sales have been slumping in China this year amid fierce competition from local vendors, including Huawei, which has experienced a resurgence in the higher-end smartphone market thanks to an advanced processor produced entirely in China that has ignited patriotic fervour at home.

“In the first half of the year, Huawei was the leader in the market despite the US trade restrictions, further closing the gap with Apple in the >US$600 segment,” research firm IDC’s senior analyst Arthur Guo wrote in a report published on Friday.

Apple did not immediately respond to a request for comment on Friday.

Huawei, Vivo and Xiaomi all saw double-digit year-on-year growth in the second quarter, according to both Canalys and IDC.

While the Android smartphone market in China grew 11.1 per cent, Apple shipments this quarter decreased 3.1 per cent from the same period a year ago, despite promotions that helped improve iPhone demand in the country, according to IDC, which also ranked Apple 6th in market share for the quarter.

According to IDC’s data, Apple last dipped out of the top five in the third quarter of 2020, Guo said in response to written questions.

A separate report from research firm Counterpoint that tracks sales instead of shipments offered a rosier outlook for Apple, placing the iPhone maker at No 2 in China for the quarter with a market share of 15.5 per cent. It was closely trailed by Huawei at 15.4 per cent, Xiaomi at 15.3 per cent, and Honor at 15.2 per cent.

“Despite a single-digit year-on-year decline, Apple’s performance in the second quarter remains impressive,” said Counterpoint senior analyst Ivan Lam. “However, Apple is expected to experience a traditional slump in the third quarter, as consumers awaiting the release of the iPhone 16 may delay their upgrades.”

Apple this year has repeatedly offered discounts, as steep as 23 per cent at one point, through local retailers. It is an important market for the tech giant, which has been trying to navigate the choppy waters of increasing tensions between the US and China.

Apple chief operating officer Jeff Williams visited China this week, meeting with officials in Beijing and Shenzhen, where he pledged to deepen the Cupertino, California-headquartered tech giant’s cooperation with the country.

In Beijing, Williams was among American executives who met with Chinese Vice-Premier He Lifeng and Foreign Minister Wang Yi on Monday as part of the first US business delegation to visit China after a key Communist Party meeting this month, which also included executives from FedEx and Micron.

Williams also met with Meng Fanli, Shenzhen’s Communist Party secretary. The executive reportedly told Meng that Apple would increase its investment in the southern Chinese tech hub, praising the city’s smartphone supply chain.

Resilient China acting ‘goddess’ Wang Churan ridiculed for going make-up free

https://www.scmp.com/news/people-culture/china-personalities/article/3271838/resilient-china-acting-goddess-wang-churan-ridiculed-going-make-free?utm_source=rss_feed

A photo of Chinese actress Wang Churan minus her make-up has sparked mockery with online observers saying it had cured their “appearance anxiety”.

The unofficial image of the actress – who is known as “Goddess of Historical Dramas” – was posted on Xiaohongshu by somene who saw Wang on a flight and asked for her autograph.

“When I was on the plane, I thought the girl behind me really looked like Wang Churan. I could not resist asking her, but she seemed shocked to be recognised,” the woman wrote.

“Later, during the meal service, I boldly asked for her autograph. Since she was with her family and without make-up, I felt it was rude to ask for a photo.”

However, a photo showing Wang relaxing in her seat while frowning at her phone was later added to the post.

What suprised many was her completely bare face, showing dull, oily skin and messy hair – a stark contrast to the polished and glamorous look she usually displays on screen.

The woman who shared the post said that Wang looking this way significantly alleviated her own appearance anxiety.

“Seeing her like this made me feel much better about my own looks. But she is indeed very tall and slim.”

The post quickly made “Wang Churan’s bare face under scrutiny” a trending topic on Weibo, with numerous internet users expressing their shock at the stark contrast.

“Are you sure this is Wang Churan? If it is, you’ll be getting a call from her studio soon, asking you to delete the photo,” one person said.

“Honestly, if she were just an ordinary person, she looks fine. But for someone who markets herself as a beauty icon, this is really disappointing,” said another.

“I’m more shocked by her age. She is only 25? From the photo, I thought she was at least 35,” a third person said.

The scrutiny of Wang’s appearance partly stems from long-standing criticism of her acting skills, with many labelling her a “pretty face” rather than a talented actress.

Wang has portrayed several beautiful characters, notably the role of imperial concubine Zhang Bihan in Serenade of Peaceful Joy, a character that was pampered and arrogant.

The role provoked an online backlash and animosity towards the character spilled over into the actress’s real life.

Many people expressed their anger on her Weibo account, saying: “Seeing your smug face as Concubine Zhang, I cannot wait for you to be written out of the show.”

Wang remained resilient in the face of the harsh comments, even engaging humorously with her critics.

“Is Zhang Bihan still being a troublemaker tonight? Yes, she has not stopped. Feel free to share and vent with Zhang Bihan memes, let’s vent together,” she posted on social media.

Despite her efforts, doubts about her acting skills and personality persist.

This year, when she appeared in the national hit TV drama Joy of Life 2 as a famous singer in a brothel, she was again praised for her looks but criticised for her performance and dialogue delivery.

It seems little had change since her role in 2013’s Fireworks of My Heart, which received a dismal 2.7/10 rating on Douban, the Chinese equivalent of IMDb. Her acting then was called wooden and soulless.

China biologist behind gene-edited baby scandal reveals million-dollar US work offer

https://www.scmp.com/news/china/science/article/3271952/china-biologist-behind-gene-edited-baby-scandal-reveals-million-dollar-us-work-offer?utm_source=rss_feed

The Chinese scientist who sparked global uproar in 2018 by creating the world’s first gene-edited babies said on Thursday that he is considering an offer to work in the United States.

Biophysicist He Jiankui told an online round table that an investor from Silicon Valley has offered him US$1 million to help start a company in the US focused on gene-editing technologies to prevent Alzheimer’s disease.

“It’s a very interesting proposal, and I’ll consider it. I would be happy to work in the United States if there is a good opportunity,” he told the round table organised by the magazine MIT Technology Review.

He served a three-year sentence for illegal medical practices and has struggled to regain a foothold in the research community since his release from prison in 2022.

Plans to work in Hong Kong under the city’s top talent scheme were dashed last year, when He’s visa was revoked over suspicions that he had made false statements in the application paperwork.

In addition to a laboratory in Wuhan, central China, He said he has also opened a relatively new and “independent” facility at Sanya, in the southern island province of Hainan, with funding from American donors and Chinese companies.

During the round table, He said that people from a “small Eastern European country” and an unnamed island nation had invited him to continue his research there but he had rejected these offers. “I need to do research in the US and China or other major countries,” he said.

The US-trained scientist, who earned his PhD from Rice University and did postdoctoral research at Stanford University, said he decided to study Alzheimer’s because his mother has the condition.

He told the round table that he proposes using a relatively new gene-editing technology, known as base editing, to introduce a specific genetic mutation into human embryos to protect against the most common cause of dementia.

He emphasised that his work would be restricted to mice, monkeys and non-viable human embryos, with no intention to implant an embryo to create a pregnancy or any subsequent children. “The basic research part can be completed in two years.”

However, He said that he would have no say in determining when this technology might enter human trials. That would be up to society, he said.

Embryo editing is banned in China and the US, as well as several other countries, but “will be as common as IVF babies” in 50 years, according to He, who added that all babies will be born free of known diseases as a result.

“I believe society will eventually accept that embryo genetic editing is a good thing, because it improves human health. So I’m waiting for society to accept that,” he said.

China, Russia bombers enter Alaska, Philippines’ Chinese-infiltration fears: 7 highlights

https://www.scmp.com/news/asia/article/3271939/china-russia-bombers-enter-alaska-philippines-chinese-infiltration-fears-7-highlights?utm_source=rss_feed

We have selected seven stories from this week’s news across Hong Kong, mainland China, the wider Asia region and beyond that resonated with our readers and shed light on topical issues. If you would like to see more of our reporting, please consider .

Chinese and Russian bombers were detected and intercepted off the coast of Alaska for the first time on Wednesday, according to joint US and Canadian defence agency Norad.

University of Kansas academic Franklin Tao speaks of charges amid the China Initiative, “losing almost everything” and a bittersweet victory.

Trains will not stop at Prince Edward, Mong Kok, Yau Ma Tei and Ho Man Tin stations on the Kwun Tong line as the MTR Corp carries out unprecedented upgrades.

China has successfully tested the third-stage engine of its Long March-10 moon rocket, moving one step closer towards putting Chinese astronauts on the lunar surface before 2030.

The case of Alice Guo, a fugitive mayor accused of being a Chinese spy, has exposed numerous vulnerabilities to foreign actors in the country’s legal and administrative systems, observers warn.

A century-old fermented tofu business that imported bean curd from mainland China while saying its products were local has raised concerns about labelling products as Hong Kong made.

A Japanese man who lived an extremely frugal life for 21 years because he wanted to save 100 million yen (US$640,000) to retire early has shocked internet users in China.

China’s Guangdong, once a major economic driver, lags national growth average

https://www.scmp.com/economy/china-economy/article/3271935/chinas-guangdong-once-major-economic-driver-lags-national-growth-average?utm_source=rss_feed

Guangdong, China’s largest provincial economy, has underperformed the national average for gross domestic product growth by a large margin in the first half of the year, threatening to turn from economic driver to drag despite Beijing’s exhortations for powerhouse regions to do their part.

The southern province’s GDP expanded by 3.9 per cent in the first six months of 2024, 1.1 percentage points lower than the national average, though it still boasts the country’s largest regional GDP. Guangdong’s growth rate in the first quarter was 4.4 per cent.

Last week, Beijing reaffirmed its resolve to meet its annual national growth target of “around 5 per cent” in a communique released at the conclusion of the third plenum – a major conclave for economic policy – a few days after the country reported slower-than-expected growth of 4.7 per cent for the second quarter.

Authorities in coastal regions, traditionally the most reliable centres for growth as industrial and trade hubs, have taken steps to boost economic activity and contribute to the national economy – with Guangdong, historically the top performer, feeling a great deal of the pressure.

Analysts blame tepid investment, consumption and business sentiment as well as protracted distress in the property sector for the subdued growth.

Guangdong’s services sector output grew 2.7 per cent in the first half of 2024 over the year prior, and retail sales grew a paltry 1.2 per cent.

Bogged down by a 16 per cent slump in property sector investment and a 30.6 per cent reduction in home sales, Guangdong’s overall fixed-asset investment dipped 1.5 per cent between January and June over a year ago. Evergrande, the world’s most indebted developer, is based in Guangdong.

Peng Peng, executive president of the Guangdong Society of Reform think tank, said the broader contraction in the property market has had a knock-on effect for Guangdong – particularly its private sector – and will continue to do so.

“The decline in fixed asset investment indicates weakened confidence among enterprises who ‘voted with their feet’ not to invest,” he said. “Guangdong should make efforts to further stabilise the property sector.

“Insufficient recovery in the service industry has also led to significant employment pressure, further impacting market confidence,” he added.

“Guangdong’s tertiary industries grew by only 2.7 per cent in the first half, compared with Shanghai’s 5.8 per cent.”

Some cities have managed to buck the trend and aid in the province's quest to buoy growth, with tech hub Shenzhen registering a robust 5.9 per cent for the period. This has helped offset the subpar performance from other major cities like Guangzhou, the provincial capital.

But retail sales of consumer goods in the two cities, the largest in the province, were lacking. For this metric, Guangzhou and Shenzhen registered a year-on-year growth rate of only 2 and 1.8 per cent respectively during the period. Exports appear to be the one remaining pillar buttressing Guangdong’s growth, as foreign trade soared by 13.8 per cent year on year.

“Tech industries and advanced manufacturing should be more vigorously promoted to offset the property sector drag,” Peng said. “In light of geopolitics, Guangdong’s exporters should proactively tap emerging markets like Southeast Asia.”

Home to tech giants Huawei and Tencent, electric vehicle maker BYD and state-owned carrier China Southern Airlines, Guangdong saw its economy grew by 4.8 per cent in 2023 to 13.6 trillion yuan (US$1.9 trillion), putting it on a par with Australia and South Korea and leading all other Chinese provinces in GDP for 35 years running. But the southern province is under growing pressure to defend its lead.

Guangdong’s growth has also fallen behind other powerhouse regions, as Zhejiang, Jiangsu and Shandong provinces all reported more than 5.5 per cent growth for the first half of 2024.

As of Thursday, 23 provinces and regions have released their growth data for the first half of the year.

Of these, 16 – including Guangdong, the Xinjiang Uygur autonomous region and Hainan – missed their targets and underperformed the national average.

‘I did it as quietly as I could’: the navy chief who wrecked his ship to scupper China’s ambitions

https://www.theguardian.com/world/article/2024/jul/26/i-did-it-as-quietly-as-i-could-the-navy-chief-who-wrecked-his-ship-to-scupper-chinas-ambitions

More than 25 years ago, the BRP Sierra Madre was sent off for one final, secret voyage. In the darkness of night, the Philippine navy ship sailed from Manila Bay into the remote waters of the South China Sea. Then, to the surprise of many, it ran aground, and hasn’t moved since.

“I did it as quietly as I could, so I would not raise any hackles among anybody,” says Vice Adm Eduardo Santos, who was chief of the navy at the time. To him, it was a case of mission accomplished. His plan had been to run the ship on to a small reef known as Second Thomas Shoal, one of the world’s most fiercely contested maritime sites, without China knowing. The move would help the Philippines defend the area for decades to come.

“The first reaction was the Chinese ambassador knocking at my office early in the morning when they heard about it … I said, ‘well, it was supposed to be on the way [to a mission], and it ran aground’,” says Santos. With hindsight, Santos, who is now 80, can smile about it, though he, more than most, is keenly aware of how delicate the issue remains.

If the shoal had been left unoccupied, it would have been lost to Beijing, he says, because the Philippines was already facing a “creeping invasion” by China.

Beijing had already seized Mischief Reef, an atoll just 21 nautical miles away, despite being within the Philippines’ exclusive economic zone (EEZ) – an area that stretches 200 nautical miles from a state’s coast, giving it special rights to build or exploit resources in the area. Second Thomas Shoal is also with the Philippines’ EEZ.

The Sierra Madre’s last journey, in 1999 was a crucial milestone in the wider, long-running dispute over the South China Sea, a region that hosts one of the world’s busiest trade routes, and thought to be rich in oil and gas deposits.

In the years since, the crumbling vessel’s dogged presence at Second Thomas Shoal has enraged Beijing. It has been at the centre of at least eight maritime confrontations in the past 18 months alone, as China has sought to disrupt missions delivering supplies to the shoal. The ship serves as a de-facto military outpost, preventing China from expanding further towards the Philippines’ coast. China claims much of the sea, despite a Hague tribunal ruling finding otherwise.

Tanks loaded, guns ready, but only one engine

In the 1990s, there were few options for the Philippines, says Santos, beyond a cat-and-mouse game of removing structures being put up by China. The exit of US forces from the Philippines in 1992 after a 94-year presence had also left a vacuum, he adds.

The navy’s attention then turned to a ship that was due to be decommissioned: BRP Sierra Madre, a tank-landing vessel built for the US navy in the second world war that passed to the Philippines, a US ally, in 1976.

Months were spent reviving it. “I had to do some repairs, quietly, make sure that the tanks were loaded, ammunition loaded, guns firing and all that,” Santos says. “I needed power for the radar and for the people that would be staying there.”

Only one engine was fitted, rather than the usual two; it wasn’t expected to be doing much future travel. It was sent off in May 1999, with about 20 men on board, says Santos. Only the captain knew details of the mission.

Interactive

Soldiers would be based on the vessel for three months or so. “In the beginning, it was nice because we fixed the ship. It’s painted, the interior … [There’s] air conditioning. They had the Betamax [video player to watch movies],” he says. There was a karaoke machine, and the helipad was used for basketball. Troops were already used to the loneliness of being stationed far from home and, in a region known for typhoons and intense storms, the Sierra Madre was preferable to a small island.

“In their spare time, they would be fishing and then drying up the fish and then selling the dried fish when they would go home, so they had extra income,” says Santos.

However, after decades of being battered by strong winds, and weathered by sea spray, the ship is in a dilapidated state, with some fearing it is on the brink of collapse – a prospect that could leave the shoal vulnerable to China once again. Beijing has repeatedly blocked efforts to resupply the vessel, particularly those it believed to be carrying building materials, though it says it acts professionally and with restraint.

China claims the Sierra Madre’s presence is illegal and has demanded it be towed away.

“I’m told that they were able to do some minor alterations so that the ceiling of the ship would not [leak], so during the rain, they would not get wet,” he said. “They were able to do some things to be able to sleep on a dry space.”

Even walking across the main deck was, at times, hazardous according to one report, which said visitors would need to walk across a plank because it had deteriorated so heavily.

Santos said he was saddened by the state of the ship. “There’s always a possibility that it may not really last longer, it may not really last for another five years maybe,” says Santos, who added he wasn’t sure of the latest details on the state of the ship.

‘We cannot fight them by force of arms’

China, he adds, wants the whole of the South China Sea and East China Sea. “There’s almost US$3tn worth of goods flowing through that area [every year] … There’s always an opportunity to make money out of that,” he says. “Of course, there’s also oil in that area. [China] knows that because they did joint surveys with us.”

Santos welcomed the government’s broader efforts to publicise incidents where Chinese vessels act aggressively at sea, and to deepen defence ties with allies and partners.

A recent survey found that 73% of Filipinos want both military and diplomatic action to defend the West Philippine Sea, the name the country uses to describe its exclusive economic zone. It’s easy to say in a survey that you want to fight, says Santos. “For us in the armed forces, no, we don’t like to fight.”

“We cannot fight them by force of arms. [So] then we should use the law. I would think that the Philippines is now moving to file another case with the permanent court of arbitration. We already got the favourable decision of 2016 [in a tribunal at The Hague]. We could do that now,” Santos says.

Many have suggested the Philippines should try to ground another ship, in the same style of the Sierra Madre, to protect other locations within the Philippines’ EEZ. Given China’s now-extensive surveillance capabilities, he doubts this would be possible: “They know already … When they saw the same thing happen in another island, they immediately demanded that it be removed,” says Santos.

What Vietnam’s leadership change could mean for Beijing, and the South China Sea dispute

https://www.scmp.com/news/china/diplomacy/article/3271831/what-vietnams-leadership-change-could-mean-beijing-and-south-china-sea-dispute?utm_source=rss_feed

China’s ties with Vietnam are expected to remain largely stable, observers say, even as uncertainty looms in Hanoi following the death of long-serving leader Nguyen Phu Trong.

Trong, 80, who died last week after a long unspecified illness, has left a mixed political and economic legacy after overseeing Vietnam’s rapid economic growth and a “blazing furnace” crackdown on corruption to consolidate the Communist Party’s power.

But observers were generally positive about Hanoi’s pragmatic “bamboo diplomacy” under Trong’s watch – a delicate balancing act between China and the United States amid a deepening rift with its northern neighbour in the South China Sea.

Paying tribute in a rare visit to Vietnam’s embassy in Beijing on Saturday, Chinese President Xi Jinping spoke of their “deep camaraderie” and praised Trong’s “outstanding contribution” to ties between the two countries and their ruling parties.

The Communist Party of China also sent a condolence message hours after Trong’s death was announced, calling him “a good comrade, a good brother and a good friend”. China’s No 4 official, Wang Huning, will lead a delegation to Vietnam to attend Nguyen’s state funeral on Friday.

Hanoi emphasised the importance of its relations with Beijing, with its ambassador to China Pham Sao Mai pledging to “adhere to the strategic choice and top priority of developing friendly cooperation with China”, according to official news agency Xinhua.

Zhang Mingliang, a Southeast Asian affairs specialist at Jinan University in Guangzhou, said Xi’s embassy visit showed Beijing was relatively satisfied with the development of bilateral ties in the Trong era.

“Compared with ties during the oil rig crisis in 2014 and [former US president Donald] Trump’s state visit to Vietnam in 2017, Sino-Vietnamese relations have shown clear improvement, marked by Hanoi’s embrace of the concept of a ‘community of shared destiny’ last year at Beijing’s request,” he said.

“And compared with rancorous tensions with the Philippines in the South China Sea, Vietnam and China have managed to get along without hyping up their deep-seated differences on territorial issues.”

Ties between the communist neighbours had been turbulent in past decades, with clashes over the disputed Paracel Islands in the 1970s and a brief but bloody border war in 1979.

Zhang noted that relations also hit a low point during a 2014 diplomatic stand-off over China’s deployment of a deepwater oil rig near the Paracels, an incident widely seen as a turning point in Hanoi’s ties with Washington.

“Under Trong’s stewardship, Vietnam has managed to forge rather friendly ties with China, at least superficially. But at the same time, Vietnam’s ties with the US and Russia have also been elevated to unprecedented heights,” Zhang said.

“This is all aimed at keeping China in check so that Vietnam can have a favourable international environment and relatively steady ties with China that are largely under Hanoi’s control,” he added. “It may seem like mission impossible but Trong’s Vietnam managed to hedge its bets with the major powers.”

Arguably Vietnam’s most influential leader since its founding revolutionary Ho Chi Minh, Trong became the ruling party’s general secretary in 2011 and secured a precedent-breaking third five-year term in 2021. He also served as Vietnam’s president from 2018 to 2020.

As speculation swirled about his declining health, Trong visited Beijing in October 2022 – his first overseas trip after having a stroke in 2019 – becoming the first foreign leader to meet Xi after he secured his own third term.

Over the past 10 months, Trong hosted both Xi and US President Joe Biden in Hanoi and met Russian President Vladimir Putin in June, despite his frailty. Hanoi has also elevated Japan, India, South Korea and Australia to its top-tier comprehensive strategic partners.

Carl Thayer, emeritus professor at the University of New South Wales in Australia, said Trong would be remembered for his trips to the US and Japan in 2015, which set the foundations for closer ties with the West.

Thayer expected Hanoi’s ties with Beijing to remain “stable and amicable” because Vietnam would not abandon its foreign policy of “peace, cooperation and development”.

“China plays a special role in Vietnam’s foreign relations. It was Vietnam’s first comprehensive strategic partner and it is the only major power to be called a comprehensive strategic cooperative partner,” he said.

Analysts also pointed to Trong’s personal bond with Xi and ties between the two communist parties, which have over the years acted as a ballast in the love-hate relationship between Hanoi and Beijing.

“Although Vietnam broadened its diplomacy and improved ties with the US, I think that Trong was able to assuage Beijing that Vietnam really was neutral and independent and improved ties with Washington would not come at the expense of Beijing,” said Zachary Abuza, a Southeast Asia expert and professor at the National War College in Washington.

“This was possible because of Trong’s committed communist ideology. He viewed the world very much the way Xi Jinping does.”

Abuza also noted China’s party-to-party channels with Vietnam that ensured a constant stream of communication between senior-level officials – a channel unavailable to the US.

According to Nguyen Khac Giang, an analyst at Singapore’s ISEAS-Yusof Ishak Institute, there was a close relationship between Trong and Xi due to their shared commitments to Marxism-Leninism.

“This helped stabilise bilateral relations during times of tension, particularly over maritime disputes in the South China Sea,” he said. “Trong also had a very favourable view on China and admired the Chinese Communist Party, although he was pragmatic in dealing with them on many thorny issues.”

Giang said that while Trong’s potential successors – such as President To Lam – do not have this bond with Xi, “I don’t think this will greatly affect Hanoi’s ability to maintain good relations with China as the party-to-party link remains strong”.

He said the bamboo diplomacy approach was “working well” and Trong’s successor was unlikely to change it or his key policies, at least in the medium term “to prove their legitimacy as his rightful heir”.

A day before he died, Trong’s duties were temporarily assigned to Lam. The 66-year-old, who became president in May, was previously Vietnam’s public security minister, overseeing the anti-corruption drive. That campaign has ensnared 40 members of the party’s Central Committee and dozens of military and police generals since 2016.

While the crackdown has been popular with the public, the removal of six out of 18 members of the Politburo since December 2022 – including three of Vietnam’s top five leaders since March – has raised concerns about factional infighting amid fears of a succession crisis.

Despite the political turmoil, Abuza said he expected “absolutely no change” in Vietnam’s foreign policy, with Hanoi remaining “studiously neutral” – with deep economic ties to both China and the US and its allies.

But the new leader could look to make changes on the economic front.

“Like in China, where Xi Jinping has reasserted control at the expense of economic growth, Vietnam did that under Trong, though to a lesser extent,” Abuza said.

“I think the next general secretary will be more pragmatic. Economic growth is the key to the party’s legitimacy. But I expect there to be few changes before the 14th party congress in January 2026. The leadership is consumed with preparations for the party congress and is more or less in a lame-duck session.”

Thayer warned there were limits to personal diplomacy between Chinese and Vietnamese leaders when it came to the South China Sea dispute.

“Personal relationships are important in relations between states … but they are not sufficient – structure matters,” he said, noting the Steering Committee for Bilateral Relations set up in 2008 that allows senior officials to meet on a regular basis.

He said China refused to respond to nearly 40 hotline calls from Vietnam over several months during the 2014 crisis, despite the personal ties between leaders.

“China only agreed to accept a special envoy from Trong when it learned that angry Vietnamese officials were calling for a special meeting of the Central Committee to exit China’s orbit,” he said.

Thayer said Vietnam’s protest over China sending a hospital ship to the Paracels in May and its move last week to file a claim with the UN for an extended continental shelf in the South China Sea were the “new normal”.

Zhang from Jinan University said the maritime dispute remained one of the biggest variables in bilateral relations.

He said Hanoi’s request to extend the continental shelf beyond the current 200 nautical miles – following a similar move by Manila last month – was likely done under Lam’s watch.

“The timing is intriguing – it was probably aimed at … demonstrating a tough position on China for the domestic audience while also trying to increase Lam’s bargaining power vis-à-vis China,” Zhang said.

“It showed that Lam, on the one hand, will stick with Trong’s approach in dealing with major powers … but on the other hand there will be differences, variations and innovative steps,” he said. “While bilateral ties are at a high point … Vietnam is unlikely to make major compromises with China.”

Meanwhile, Vietnam has accelerated expansion of its outposts in the contested Spratly Islands over the last six months, according to a June report by the Centre for Strategic and International Studies’ Asia Maritime Transparency Initiative.

It said Vietnam’s overall dredging and landfill in disputed areas of the South China Sea was now roughly half of China’s total of 1,880 hectares (4,650 acres). The total was less than one-tenth of China’s just three years ago.

“It’s just a matter of how long China will put up with Vietnam’s island-building efforts in the South China Sea,” Zhang said.

South China Sea: ‘bullied by China’? Philippine-Vietnam joint drills mark peace bid

https://www.scmp.com/week-asia/politics/article/3271877/south-china-sea-bullied-china-philippine-vietnam-joint-drills-mark-peace-bid?utm_source=rss_feed

Philippine and Vietnam coastguards are in talks for first-ever joint drills despite overlapping claims in the South China Sea, the latest in a series of steps between Southeast Asian neighbours towards a peaceful settlement of maritime disputes.

Delegates of the Vietnam coastguard, as well as a 2,400-tonne vessel from their side, will reportedly be in Manila in August as both parties seek to finalise plans for a joint exercise on search-and-rescue and fire-and-explosion prevention.

Observers say a peaceful negotiation between Hanoi and Manila over their overlapping claims to extended continental shelves may undermine Beijing’s own assertions.

The closer cooperation between the Philippines and Vietnam comes amid heightened maritime tensions, with Beijing’s increasingly assertive actions affecting both countries as it lays claim to nearly the entire South China Sea.

The planned exercises between Hanoi and Manila follow a memorandum of understanding for coastguards of both sides, signed by Philippine President Ferdinand Marcos Jnr during his visit to the Vietnamese capital in January, where he called his host the “sole strategic partner of the Philippines”.

Philippine and Vietnamese defence officials are also slated to meet in Manila this week over talks of closer defence cooperation.

The Philippine Department of Foreign Affairs said last week it was ready to discuss overlapping continental shelf claims with Vietnam after Hanoi followed suit with its own filing before the UN this month, with Manila having done so in June.

The Chinese foreign ministry had last week protested against Vietnam’s “unilaterally submitted claim”, alleging it included maritime areas covering parts of the Spratly Islands and infringed upon China’s “territorial sovereignty and maritime rights”.

The Spratly Islands are a flashpoint in competing claims between Hanoi and Beijing – which calls the land masses Nansha Islands.

“It would be good if the two fellow Asean claimants negotiate how to demarcate overlaps in their extended continental shelf claims. The move may isolate China’s maritime claims in choppy waters as excessive and contrary to Unclos,” said Lucio Blanco Pitlo III, a research fellow at the Asia-Pacific Pathways to Progress Foundation.

Chester Cabalza, president of think tank International Development and Security Cooperation, told This Week in Asia the “mutual and pivotal security cooperation” despite overlapping claims between the Philippines and Vietnam, “shows the fraternity and camaraderie of Asean neighbours, by all accounts antagonised and bullied by China in their respective maritime features”.

He called Hanoi’s following of Manila’s model of filing an extended continental shelf claims a “significant leap of maritime rules-based order to prevail in the contested islands” amid China’s “intimidating 10-dash line and its new law to forbid foreign fishers in their self-described maritime domains”.

Cabalza said a reconciliation between the Philippines and Vietnam over disputed maritime claims was more likely as “Vietnam echoes a language of equality and respect to its Asean neighbour, unlike China that utilises an ineffective grey-zone tactic against the Philippines”.

“Hanoi does not bully Manila but uses diplomacy and strategic partnership to peacefully resolve the South China Sea conundrum,” he said.

At a July 12 forum marking the eighth year of The Hague’s arbitral ruling in favour of the Philippines over territorial rights in the South China Sea, former Philippine Supreme Court associate justice Antonio Carpio said his country could invite Vietnam to jointly file another arbitration case against China for its refusal to allow Filipino and Vietnamese fishermen to operate in the Scarborough Shoal.

“The arbitral award of July 12, 2016, declared that the territorial sea of Scarborough Shoal is a traditional common fishing ground of Filipino, Chinese, and Vietnamese fishermen. The lagoon of Scarborough Shoal is part of the territorial sea of Scarborough Shoal, since only a few high tide features surround the lagoon.

“However, the Chinese coastguard has been preventing Filipino fishermen from entering the lagoon of Scarborough Shoal to fish even as Chinese fishermen freely fish inside the lagoon,” he said.

Carpio added that the Philippines could submit a proposed set of common fishing rules equally applicable to Filipino, Chinese, and Vietnamese fishermen for arbitration.

These include the months of fishing season and a moratorium for fish regeneration, the total catch weight each country may take, and the type of fishing gear allowed within the area.

“These rules applicable equally to Filipino, Chinese, and Vietnamese fishermen are needed to make fishing sustainable in the lagoon of Scarborough Shoal,” he said, adding that an arbitral tribunal would most likely adopt these recommendations despite China’s protests.

Cabalza from the International Development and Security Cooperation echoed the same sentiment: “Hanoi and Manila can set examples as champions of international law, military resistance to Beijing’s grand strategy on using a hostile coastguard, and setting a consistent tone of narrative that China is not the lone owner of the South China Sea.”

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China boy, 11, writes 600 lines of code to build rocket after mastering physics, chemistry

https://www.scmp.com/news/people-culture/trending-china/article/3271669/china-boy-11-writes-600-lines-code-build-rocket-after-mastering-physics-chemistry?utm_source=rss_feed

An 11-year-old boy who taught himself programming, physics, and chemistry, then wrote 600 lines of code to build a rocket, has become an online sensation in China.

Yan Hongsen, who has become known as “rocket boy”, is a Primary Five student from Zhejiang province in eastern China.

The only child has been documenting his rocket development journey on Douyin, attracting 440,000 followers.

His father told the Post that after visiting a launch centre and witnessing the Long March-2 liftoff when he was four years old, Yan fell in love with rockets and astronomy.

Since kindergarten, he has taken online programming courses and self-studied physics and chemistry via books, videos and forums with astronomy enthusiasts.

To support his interest in aerospace, Yan’s parents converted their living room into a rocket research studio for their son.

Starting in August 2022, Yan spent 10 months building his first homemade solid-fuel rocket.

In June 2023, he launched his first rocket, naming it Sen Xing, which means “moving forward”, and symbolises his desire to reach greater heights in aerospace.

However, shortly after the rocket ascended, its booster failed to deploy its parachute after separation. The remaining components also sustained damage, leading to its crash.

Undeterred, Yan gathered the scattered debris without showing any sadness, and set about analysing the cause of the failure.

“The nitrocellulose didn’t explode as expected, the spring and lithium battery were also damaged. Maybe there is still an issue with the rocket’s body connection,” Yan said.

The boy’s father recounted the maiden launch, telling the Post: “For me, although it crashed, the rocket’s first flight was still a success. I was extremely excited and thrilled, while my son remained very calm.”

Now, the rocket boy is modifying his second version of the rocket, hoping to launch it again in the future.

In his latest video, Yan showcased over 600 lines of code he wrote for the latest rocket’s flight control system.

His father said that Yan has a clear plan for his future, hoping to get into one of China’s seven prestigious civilian defence universities.

Yan’s dream is to build a real rocket for China to explore the universe when he grows up.

His father, who works in the tourism industry, wrote on social media: “I don’t understand aerospace, but I will always accompany my son.”

“As parents, we fully support our child’s dreams. If he encounters technical difficulties that he can’t solve, he always contacts me, and I try my best to reach out to experts for help,” the father told the Post.

He added that his son’s academic performance in other subjects ranks among the top in his class.

The youngster’s story has attracted much attention on mainland social media.

“This must be the youngest person to build a rocket in China. I’m so proud of him,” one online observer wrote on Weibo.

“His parents are remarkable for unconditionally supporting their child’s dreams,” said another.

It is not first time rocket boy has made national headlines in China.

In July 2022, aged nine, he gained recognition for pointing out factual errors in an astronomy documentary. He was also teaching aerospace classes to fellow pupils at his primary school by this point.

Chinese and Russian bombers patrolling off Alaska raise concerns about growing military cooperation

https://apnews.com/article/china-russia-us-military-planes-norad-alaska-4994b489e75ae636b4a4cd5bb40f91acIn this photo taken from video released by Russian Defense Ministry Press Service on Thursday, July 25, 2024, A H-6K long-range bomber of the Chinese air force, upper left, is seen escorted by a Su-30 fighter of the Russian air force during a joint Russia-China air patrol. (Russian Defense Ministry Press Service via AP)

2024-07-25T04:06:40Z

WASHINGTON (AP) — Russian and Chinese bombers flew together for the first time in international airspace off the coast of Alaska, in a new show of expanding military cooperation that Defense Secretary Lloyd Austin said Thursday raises concerns.

The flights Wednesday were not seen as a threat, and the bombers were tracked and intercepted by U.S. and Canadian fighter jets. But it was the first time that Chinese bomber aircraft have flown within the Alaskan Air Defense Identification Zone. And it was the first time Chinese and Russian aircraft have taken off from the same base in northeast Russia.

“This is a relationship that we have been concerned about throughout — mostly because we’re concerned about China providing support to Russia’s illegal and unnecessary war in Ukraine,” Austin told reporters.

The North American Aerospace Defense Command, or NORAD, detected, tracked and intercepted the two Russian Tupolev Tu-95 long-range bombers and the two Chinese H-6 bombers. The aircraft, said Austin, didn’t enter U.S. airspace and only got within about 200 miles (320 kilometers) of the coast.

They were, however, within the ADIZ, which begins where sovereign airspace ends, and aircraft must be easily identifiable and file flight plans for authorization in order to meet national security requirements.

China and Russia both acknowledged what they called a joint patrol over the Bering Sea, which divides Russia and Alaska.

Their growing military relationship has triggered concerns both among NATO allies and with nations in the Asia-Pacific. NATO allies have called China a “decisive enabler” of Russia’s war against Ukraine through its “no-limits partnership” with Russia and its large-scale support for Russia’s defense industrial base.

The allies issues a sternly worded statement, approved by the 32 members at their summit in Washington earlier this month.

The Russian Defense Ministry said the patrol also flew over the Chukchi Sea, which is on the north side of the Bering Strait, and that the exercises lasted more than five hours.

The joint patrol tested and improved coordination between the two air forces, said Zhang Xiaogang, a spokesperson for China’s Defense Ministry. He said it was the eighth joint strategic air patrol since 2019. He declined to comment when asked if it was the first such patrol over the Bering Sea.

While Russia’s military has long been active in the north Pacific, China has emerged as a new actor in recent years as its growing navy and air force expand their presence farther from the country’s shores.

Shen Yi, a professor of international politics at Fudan University, wrote in his column that the Chinese flights were to “tell certain countries our strategic deterrence strength” and had symbolic significance in the U.S.-China rivalry.

“China’s boosting its capabilities to carry out effective strategic gaming with the United States and to maintain strategic stability,” Shen wrote. “As this system continuously improves, it can effectively deter the U.S.”

A photo released by the Russian Defense Ministry showed a Russian Su-30 fighter jet escorting a Chinese bomber. Another photo posted online by the military channel of China’s state broadcaster CCTV showed Russian and Chinese long-winged bombers flying in parallel formation against mostly blue skies.

The Japanese military has grown increasingly concerned about joint China-Russia drills and the potential threat they pose to the security of Japan and the region.

A fleet of Russian and Chinese warplanes including Tu-95s and H-6s was seen flying together last December over the waters between Japan and Korea, Japan’s Defense Ministry said. At the time, China’s Defense Ministry called it the seventh joint strategic air patrol with Russia.

Chinese naval ships have showed up in international waters near Alaska, most recently in mid-July when the Coast Guard spotted four ships in the U.S. Exclusive Economic Zone, which extends 200 nautical miles (370 kilometers) from the shore.

Zhang described the naval activity as routine combat readiness training and said that China would continue to conduct far-seas training to improve the capabilities of its troops.

China drives Asia’s venture capital market with 6 of the top 10 quarterly deals: KPMG

https://www.scmp.com/business/banking-finance/article/3271878/china-drives-asias-venture-capital-market-6-top-10-quarterly-deals-kpmg?utm_source=rss_feed

China dominated Asia’s subdued venture capital scene in the second quarter, as state-backed investors poured money into sectors such as artificial intelligence (AI), electric vehicles (EV) and semiconductors to bolster the nation’s technological prowess.

China accounted for six of the top 10 venture-capital investments in the Asia-Pacific region, according to a report published by KPMG on Thursday. A total of 2,155 deals worth US$17.4 billion were reached in the three months to June. The deal volume, however, was 16.3 per cent lower than the previous quarter.

New energy vehicles and semiconductors were among the hottest sectors in China. EV maker Neta Auto raised US$693 million, while CRRC Times Semiconductor scooped up US$599 million, according to the report.

AI companies continue to gain traction in China, even as investors tread cautiously. Top deals in this space include US$528.7 million raised by Zunyuan Supermarket, a retailer that incorporates AI followed by generative AI company Zhipu AI at US$400 million.

“The AI space continued to attract strong venture capital investment in China during the second quarter of the year, with investors showing particular interest in AI-driven applications,” said Zoe Shi, partner at KPMG China.

The number of AI focused start-ups has “grown considerably” over the past year, and the big question now is which of these companies will be able to produce results and successfully commercialise their offerings, she added.

China has been pumping money and vast state resources behind companies in strategic sectors like semiconductor and AI, as its technology war with the US escalates.

In May, Beijing set up a 344 billion yuan (US$47.5 billion) state-backed investment fund to bolster its semiconductor industry.

The China Integrated Circuit Industry Investment Fund is the largest of the three chip investment funds that have been launched so far by the government. The previous two funds raised 204 billion yuan and 138.7 billion yuan in 2019 and 2014, respectively.

Meanwhile, local authorities are ramping up support for AI and other technology sectors as investors remain on the sidelines.

“Venture capital investors in China showed no rush to dive into making major deals during the second quarter, taking as much time as needed to conduct due diligence and, in some cases, delaying decisions to see how targets preformed for a longer period,” said Angela Chiu, director of deal strategy and M&A at KPMG China.

“To spur investment, local governments have provided significant matching funds aimed at companies focused on areas of strategic importance,” she added.

Looking ahead into the third quarter, AI and EV are expected to continue dominating venture capital investments in China, owing to generous state support, according to the KPMG report.

And while deal activity remains lacklustre, the initial public offering market could see a rebound in 2025 as many Chinese companies prepare to go public, the report added.

US senator attacks Biden administration for failing to halt sales of advanced chips to China

https://www.scmp.com/news/china/science/article/3271933/us-senator-attacks-biden-administration-failing-halt-sales-advanced-chips-china?utm_source=rss_feed

US President Joe Biden’s administration came under fire on Capitol Hill on Thursday over reports that illicit networks are selling advanced semiconductor chips made by Nvidia to China, evading export controls meant to block such sales.

Citing an investigation by The Wall Street Journal this month that found more than 70 distributors selling restricted Nvidia chips to entities in China, Senator John Kennedy, Republican of Louisiana, confronted Thea Kendler, assistant secretary of commerce for export administration, about the sales.

“You’ll find 70 distributors … which will sell Nvidia’s supposedly restricted chips to China,” Kennedy said in a Senate Banking Committee hearing. “And in fact, some of them will sell to China the entire servers. They cost about [US$] 300,000 apiece, they’ve got eight chips in them. Isn’t that a fact?”

Kennedy also cited research by the Centre for a New American Security (CNAS), a non-partisan Washington think tank, which reported in October that “there are already underground markets for small quantities of smuggled AI chips, according to on-the-ground reports from Shenzhen”.

Kendler – previously a national security lawyer in the US Justice Department who worked on the criminal case against China’s Huawei Technologies and its chief financial officer Meng Wanzhou – defended Commerce’s work by insisting that “any diversion of our controls would be a matter for export enforcement and we are tracking that very closely”.

The exchange, the most heated in the two-hour hearing, underscored the concern that both US political parties have about China’s ability to pull ahead of the US in the most advanced technologies, particularly artificial intelligence innovations, many of which rely on Nvidia semiconductors.

Much of the hearing concerned efforts to address sales of advanced semiconductors and chipmaking equipment by other countries to China as well as networks that channel restricted US products to Chinese markets.

The Commerce Department announced rules in October to further restrict China’s access to advanced chips and chipmaking tools, after it found that companies – including Nvidia – were designing products that fell just below the performance threshold of rules rolled out a year earlier and were thus being exported.

These restriction efforts have pushed Chinese companies and research groups to seek other ways to obtain the chips for AI platforms, which have become increasingly important in next-generation military applications.

According to The Journal, the merchants it tracked are selling the restricted Nvidia products, or servers containing the company’s advanced chips, to Chinese AI start-ups or research institutions because the vendors cannot source enough to satisfy the demands of the country’s larger tech companies.

“Despite impressive progress to date, indigenous Chinese chips will likely lag in performance compared to chips from the United States and its allies for years to come. This all makes smuggling a potentially lucrative endeavour,” CNAS concluded.

“Only a relatively small number of controlled AI chips will make it into China in 2023, likely in the hundreds, but plausibly in the low thousands.”

Earlier in the hearing, Kendler appealed to the committee for more funding, which she said was needed to enable the Commerce Department’s networks to track circumvention.

Sympathetic to the request, Senator Catherine Cortez Masto, Democrat of New Mexico, said that she had been told the division had not received a funding increase since 2010. “I would imagine it is challenging now because of the increased capacity of your jurisdiction and oversight to cover some of the coverage that you need,” she said.

Kendler replied that her department needs “roughly $100 million to take antiquated systems and turn them into useful, productive data and analytic support”.

“With more funds, we would enhance our technical expertise. We would work on data and analytic capabilities, and then certainly our enforcement capacity as well,” she said.

Kennedy, though, dismissed Kendler’s request, contending that Kendler’s staff only needed an internet connection to conduct the work.

Solutions to China’s birth rate problem don’t lie in Japan’s playbook

https://www.scmp.com/opinion/china-opinion/article/3271573/solutions-chinas-birth-rate-problem-dont-lie-japans-playbook?utm_source=rss_feed

After the fiasco of the selective two-child policy, the universal two-child policy and the three-child policy, China introduced new policies at the third plenum of the Communist Party’s 20th Central Committee to address population ageing and the country’s declining birth rate.

These policies include lowering the cost of childbirth, parenting and education, providing couples with children with childbirth subsidies, tax breaks, affordable childcare and possibly longer parental leave.

In fact, the Japanese government has already done what China’s government intends to do. Japan’s approach has proved expensive and inefficient, temporarily boosting the total fertility rate – the number of births expected in a woman’s reproductive lifetime – from 1.26 births per woman in 2005 to 1.45 in 2015 before it slid back down to 1.2 in 2023. China, which is getting old before it gets rich, does not have the financial resources to fully follow Japan’s path.

The decline in the fertility rate is inevitable, like a giant rock rolling down a hill. The one-child policy accelerated the process, and now the giant rock is at the foot of the hill. It will be very difficult to move it back uphill. China’s fertility rate was only about 1 birth per woman last year, less than half of the replacement level of 2.1. Shanghai’s fertility rate was 0.6, well below the 0.72 which has made South Korea the country with the world’s lowest fertility rate.

China’s efforts to boost its fertility rate face three major challenges: economic, physical and cultural. Economically, the one-child policy reshaped China’s socioeconomic landscape, dramatically increasing the cost of raising children.

For example, household disposable income as a share of GDP is 73 per cent in the United States and about 55 per cent in Japan but only 44 per cent in China, making it harder for ordinary Chinese families to raise a child. China’s housing market was valued at more than four times the country’s GDP in 2020, compared with almost 1.6 times in the US and 2.1 times in Japan.

The government stopped reporting official figures after the youth unemployment rate rose to 21.3 per cent in June 2023, and the rate under the government’s new method is still three to four times higher than Japan’s. Young people in China are struggling to find jobs to support themselves, let alone a spouse and children.

Physiologically, the age of marriage and childbearing is being delayed, infertility rates and the proportion of childless people are increasing, and the number of marriages and women of childbearing age are dwindling rapidly. For 95 per cent of women, only 12 per cent of their maximum ovarian reserve – a woman’s reproductive potential – is present by age 30. At 40 years old, only 3 per cent remains.

The age of first marriage for Chinese women has risen from 23 in 2000 to 28 in 2020 and is expected to continue rising. The infertility rate in China has increased from 1 to 2 per cent in the 1970s to 18 per cent in 2020.

China’s tertiary education enrolment rate has surpassed that of Japan. Under the Chinese government’s policies in pursuit of a talent dividend and “new quality productive forces”, young people’s attainment of college and postgraduate education will continue to increase. Given that higher levels of education are strongly negatively correlated with marriage and childbirth, this in turn will see further rises in the rate of unmarried people and delays in the age of childbearing.

The number of first marriages in China fell from 23.9 million in 2013 to 10.5 million in 2022, another trend that is likely to continue. Meanwhile, according to my own estimates, the number of women aged 20-34 fell from 149 million in 2012 to 119 million in 2023 and will further decline to 81 million in 2040.

Culturally, decades of the state’s family planning policy have undermined family values associated with traditional beliefs, making it socially acceptable and even desirable for couples to have one child or fewer. The more recent the cohort of Chinese women, the less willing to have children they seem to be. A 2022 survey found that while the average number of intended children among women in China was 1.64, the average fell to 1.54 for women born after 1990 and 1.48 for women born after 2000.

For comparison, in Japan and South Korea the average intended number of children is 2.01 and 1.68, respectively, but the actual fertility rate in 2023 was only 1.2 and 0.72. If this declining interest in having children is any indication, China will struggle to stabilise its fertility rate and is likely to see its population continue to shrink.

It is unlikely that the Chinese authorities will encourage childbearing as coercively as they enforced the one-child policy. Governments can reduce births by forcing people into sterilisation and abortion, but they cannot force them to marry or get treatment for infertility.

Encouraging childbearing requires increased government spending on parental subsidies, child welfare and education. It takes upwards of 20 years for a child to become a taxpayer.

Debt-ridden local governments will struggle to simply encourage childbirth, let alone force it. Some local governments might attempt to introduce mandatory measures to increase births, but these will only backfire and meet public resistance.

Low fertility and population ageing are global crises, and many countries urgently need to explore solutions. If China can achieve some success without violating people’s human rights, the international community should encourage it.

At Paris Olympics, Chinese manufacturers won big before the Games even started

https://www.scmp.com/economy/article/3271872/paris-olympics-chinese-manufacturers-won-big-games-even-started?utm_source=rss_feed

With China long established as the world’s factory, the United States has led a push to divert manufacturing and supply chains away from the world’s second-largest economy. In this three-part series, we look at whether the widely termed “China plus one” strategy is working for global manufacturers. You can .

At the Paris Olympics, all the cuisine will be French, but mass-produced goods from China will be everywhere, from cutting-edge sports equipment to dinky souvenirs.

It is a grand summer stage on which Chinese manufacturers can show off their wares and bask in the knowledge that nobody else can match them in mass production amid the “China plus one” trend of diversifying business into other countries.

Yan Zaixing is general manager of Sonic Composite Technology – the only manufacturer selected to provide windsurfing equipment for the Paris Olympics, which begins with the opening ceremony on Friday.

Yan said that “there are almost no comparable competitors” – in terms of the iterative speed of new materials and production process – in the same field, and this makes his company stand out from the crowd.

“I think that is key to successfully winning an order for the Olympic Games,” he added. “We are the only company in the world that covers the whole industrial chain to produce high-performance hydrofoil equipment.”

The official Olympics website explains how the windsurfing race, to be held in Paris’ Marseille Marina, features a new format called iQFOiL this year, replacing the old Olympic format known as RS:X. The main difference is that the daggerboard – a kind of retractable centreboard through the keel of a sailboat – has been replaced by a foil.

“So, instead of floating, the board appears to fly thanks to the use of hydrofoils attached to the bottom of the board that lift the board completely out of the water at planing speeds,” the official website of the Games explained.

As manufacturers and suppliers cope with cost concerns and geopolitical situations, some low-end manufacturers have shifted operations from China to places such as Vietnam and India.

But industry players say that the holistic, comprehensive and well-organised supply-chain network built over decades is what has reinforced a global reliance on the world’s second-largest economy.

Paul Tai, regional director at global retail solutions provider and manufacturer Mainetti Group, explained that there is not a lot of time to fulfil an order for a world event such as the Olympics. And he added that there are no second chances to get the orders right.

“Not many places can do it, given the fact that they have to deliver within a short period of time with good quality and standards,” he added, noting that there were structured clusters in China, and that suppliers know where to buy various materials.

Tai’s company produces souvenirs for Chinese gymnasts for the Paris Olympics and supports the Chinese sports-equipment company Anta by providing accessories such as clothing hangers to the Chinese team. Before that, Tai’s firm had been a working partner of the International Olympic Committee since 2020, providing packaging products for the Tokyo Olympics and the 2022 Beijing Olympics.

Tai added that China’s manufacturing sector has become “pretty cost-competitive” over the past 30 years, with many factories producing high-level original equipment.

“Going forward, Chinese manufacturing will move up the value chain by using more artificial intelligence or automation in the production process,” he noted.

Adding to the sectoral transformation, according to Fan Di, an associate professor and assistant dean for fashion and textiles at Hong Kong Polytechnic University, many buyers have developed mature corporate-social-responsibility systems with their Chinese suppliers over the past decades.

“Whether it be Malaysia, Vietnam or India, they’re slower than China in terms of building globally recognised systems,” Fan said.

According to French weekly news magazine L’Express, 90 per cent of the Paris Olympics mascots are made in China. And Chinese state media Xinhua reported that various types of Olympic souvenirs, including caps, T-shirts, toys, pens, wristbands and notebooks being sold in Paris were “made in China”, and that some manufacturers started getting orders in the second half of last year.

Other Olympics-related products – from the athletes’ sportswear to lazy sofas used in the Olympic Village – were made in the eastern province of Zhejiang, Xinhua said.

State media also said that other sports gear came from the northeastern province of Shandong, including road-race bikes used by the Chinese national team.

“Although labour costs have risen in China, logistics, work efficiency and transport are much better in China than in those Southeast Asian countries,” said Qiu Dongxiao, head of economics at Lingnan University in Hong Kong.

The Chinese manufacturing sector is very large, he added, and it is hard to find such a scale in other countries.

“For products such as souvenirs and sports items, they are less politically sensitive and face less geopolitical risk by staying in China,” Qiu explained.

Customs authorities in Xiamen, Fujian province, said 1,116 sets of apparel and gear were exported on June 21 for the International Olympic Committee work staff, and the shipment was one of the largest batches of goods that China has sent to Paris.

And customs data from Hangzhou, Zhejiang province, indicated that the value of sports-related exports from the province exceeded 10 billion yuan (US$1.38 billion) between January and April – a nearly 25 per cent increase from a year earlier and accounting for a quarter of the country’s total such exports.

Data from e-commerce giant Alibaba also showed a jump in exports of sports equipment to France in March, and popular items including tennis attire, custom sportswear, training helmets and golf bags. Alibaba is the owner of the South China Morning Post.

“In China’s case, even though it has become a world leader in many advanced manufacturing sectors, not all of the low-end manufacturing has migrated out,” said Stephen Olson, a senior adjunct fellow at the Pacific Forum and a visiting lecturer and non-resident fellow at the Yeutter Institute in the US state of Nebraska.

“China remains competitive at both ends of the spectrum,” he added. “Over time … I would expect to see more low-cost manufacturing move to lower-cost locations such as Vietnam or India, but at least for now China has unique competitive advantages.”

Qiu with Hong Kong’s Lingnan University said that other places such as Vietnam and India would not be able to supplant China’s role in the next four years, in terms of producing supplies for world events.

“Given the limited capacity of those countries’ productions [compared with] the excellent production and services environment in China, multinationals will not leave China too fast,” he noted.

“China now does not need such a world event to promote its products overseas, given its economic and trade performances in the past decades,” Qiu said. “What China needs to do is to move up the value chain, improve production quality and further innovate.”

Yan at Sonic Composite Technology Company, the windsurfing-equipment producer, said his company is looking to build an assembly plant in the European Union. That, he said, would allow the firm to ship from there with less logistical constraints and shorter lead times, to better serve its global customers.

Meanwhile, Tai at Mainetti Group said that some countries now prefer to develop their high-end and hi-tech manufacturing sectors, aiming to boost GDP growth.

“[Those countries] would rather buy from China than make [low-end products] themselves,” he added. “Some manufacturers may build factories elsewhere, due to geopolitical concerns, but eventually they have to buy parts and materials from China for assembling – this is what ‘China plus one’ means.”

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