Mistral点评

• After reports on Chinese swimmers, US bill threatens to cut funding for anti-doping agency
• Washington must prioritise matching China’s presence in Global South, a top US envoy says
• China’s BYD explores Canadian car market entry, regulatory filing shows
• Why is aspiring naval power China focusing on Central Asia and Middle East?
• US says start of new China tariffs will be delayed by at least two weeks
• Chinese vice-premier lays out road map for industrial policy at ‘unprecedented’ time
• China’s new ultra-fast chip could double the pace of electronic warfare: research team
• Chinese University of Hong Kong council was fully aware of logo redesign, school president says
• Standard Chartered plays down fears of US-China trade war under Trump
• Russia needs China’s market more than China needs Russian gas
• ‘Cold war relic’: China takes aim at US-Japan alliance under American nuclear umbrella
• As China’s population shrinks, it’s time to look at healthy ageing
• China supports Malaysia’s Brics application, saying ‘like-minded partners’ are welcome
• Huawei steals spotlight at ChinaJoy expo as HarmonyOS Next promotion entices gamers
• Philippine regulator says enforcing ban on China-linked Pogos ‘challenging’, wants exemptions
• Hong Kong can play a ‘favourable role’ in elevating China-Cambodia ties: Chinese envoy
• China and Australia can team up to boost Asean’s energy transition
• Chinese firms start work on DRC road projects under renegotiated mining deal
• Chinese suppliers storm Temu office in Guangzhou in protest over ‘harsh’ policies
• EU disputes China claim that it supports Beijing’s proposal to end Ukraine war
• ‘Signal to China’: US military command upgrade in Japan mark of commitment to region, analysts say
• China actress Xue Jianing who became a ‘nun’ blossoms after split with star actor Hu Ge
• China’s Politburo pledges support, sending stronger-than-expected signal to boost economy
• How can China’s ultra-long-term special government bonds get its economic gears turning?
• Mainland China and Taiwan reach deal to resolve crisis over fishing crew deaths near Quemoy
• US boosting alliance with the Philippines with military funding and pact amid concern over China
• Here are China’s 4 commercial jets, from the ARJ21 and C919 to the jumbo C929 and C939
• Southeast Asia seen to ‘tick all the boxes’ as China seeks C919 buyers
• China bank staff solves cash jigsaw puzzle after depressed woman cuts bills into 100,000 pieces
• Fear and ambition: why the South China Sea is so important to Beijing

After reports on Chinese swimmers, US bill threatens to cut funding for anti-doping agency

https://www.scmp.com/news/china/article/3272544/after-reports-chinese-swimmers-us-bill-threatens-cut-funding-anti-doping-agency?utm_source=rss_feed

A bipartisan group of US lawmakers announced legislation on Tuesday that would give Washington greater authority to withhold funding from the global body that oversees national drug-testing programmes, amid reports of Chinese Olympic athletes being cleared after testing positive for performance-enhancing drugs.

Introduced by Senators Marsha Blackburn, Republican of Tennessee, and Chris Van Hollen, Democrat of Maryland, the Restoring Confidence in the World Anti-Doping Agency Act of 2024 was also supported by the leaders of the House select committee on China, Representatives John Moolenaar, Republican of Michigan, and Raja Krishnamoorthi, Democrat of Illinois.

The bill would require the US Office of National Drug Control Policy to assess the World Anti-Doping Agency’s independence and would give it permanent authority to withhold voluntary contributions to the agency if independence is found lacking. With a 2023 payment of US$3.4 million, the US is the largest donor to the agency, known as Wada.

If a conclusion of faulty conduct is made, the bill would also push the office to get the US representation on Wada, including on its executive committee. While Wada does not have the authority to guarantee the US seats, lawmakers say the ultimate goal of the bill is to empower US agencies to “use all available tools” to ensure that the global body has a “credible and independent governance model”.

In introducing the bill, legislators referenced a New York Times report from Tuesday, which cites anonymous sources saying that Wada declined the opportunity to appeal China’s decision to not impose bans on two elite swimmers who tested positive for metandienone, an anabolic steroid, in 2022. One of the swimmers, Tang Muhan, is a member of China’s team for the 2024 Paris Olympics.

That report followed another one from earlier in the year revealing that 23 Chinese swimmers tested positive for trimetazidine, another powerful performance-enhancing drug, before the Tokyo Summer Olympics in 2021 and were allowed to compete.

In both cases, Beijing said it was likely the athletes unwittingly ingested food that contained the drugs – attributing the 2022 tests to hamburgers from a Beijing restaurant.

“We owe it to the athletes of every nation to take a stand in favour of a fair, drug-free Olympics,” Moolenaar said on Tuesday.

“While we may not be able to bring the [Chinese Communist Party] officials responsible for these crimes to justice, we can hold their foreign co-conspirators accountable.”

Lawmakers accused Wada of failing to independently investigate and verify the findings of Chinese authorities.

The agency issued a statement refuting the fresh accusations related to the 2022 positive tests, saying it “thoroughly reviewed the cases in early 2024 with all due scepticism, and concluded that there was no evidence to challenge contaminated meat as the source of the positive tests and therefore decided not to appeal”.

“The politicisation of Chinese swimming continues with this latest attempt by the media in the United States to imply wrongdoing on the part of Wada and the broader anti-doping community,” it continued.

“As we have seen over recent months, Wada has been unfairly caught in the middle of geopolitical tensions between superpowers but has no mandate to participate in that.”

According to World Aquatics, the international governing body for aquatic sports, swimmers from China were the most tested athletes before the Paris Olympics with an average of 21 anti-doping tests each – almost four times as much as their US counterparts.

Chinese athletes, for their part, have complained about the effects of the tests on their performance at the Paris Games.

Washington must prioritise matching China’s presence in Global South, a top US envoy says

https://www.scmp.com/news/china/diplomacy/article/3272546/washington-must-prioritise-matching-chinas-presence-global-south-top-us-envoy-says?utm_source=rss_feed

After building alliances in Europe and the Indo-Pacific to counter China and its closer engagement with Russia, Washington has much more work to do in the Global South to meet this goal, a top official in US President Joe Biden’s administration told lawmakers on Tuesday.

Appearing before the Senate Foreign Relations committee, Deputy Secretary of State Kurt Campbell ticked off a list of the administration’s accomplishments, including proposed sanctions action against Beijing by the EU as well as US trilateral cooperation with Japan and South Korea.

However, the US is far behind China in Africa and other Global South regions, risking failure in specific objectives like securing critical minerals and broader goals such as fighting misinformation, Campbell said.

“We have to contest Chinese actions not only in terms of their forward-facing strategy but their desire to go after Africa’s rare earths that will be critical for our industrial and technological capabilities,” he said.

Committee chairman Ben Cardin, Democrat of Delaware, attributed much of the blame to Republicans for not approving career diplomats who have been nominated for ambassadorial posts. Cardin cited 20 countries where China has an ambassador and the US does not.

Also noting the lack of ambassador confirmations, Senator Jeanne Shaheen, Democrat of New Hampshire, said: “I’m sorry that our colleagues on the other side of the aisle aren’t here because China continues to prioritise their diplomatic engagement, their ambassadors around the world, particularly in the Global South.

“And yet we can’t get our ambassadors approved, even the career ambassadors, not just in Africa and South America, but also in places like Albania and Montenegro,” Shaheen added.

As is customary, committee members of both parties came in and out of the hearing to attend other meetings. However, no Republicans on the panel addressed the ambassadorial appointment backlog. Senators can place “holds” on nominations even if they are in the minority party.

According to the American Foreign Service Association, more than 30 Biden nominees for ambassador and high-ranking diplomatic postings have yet to be confirmed by the Senate.

“There’s sometimes a tendency to underestimate how important our diplomats are in international organisations in the Global South – particularly when in small countries in Africa, they view the ambassador as the representative of the United States,” Campbell said.

“Washington is distant and so getting those people in place … is among our most important priorities.”

Still, committee Democrats and Republicans agreed on some areas that the Biden administration has prioritised, including support for Pacific Island nations and efforts to get the European Union to align more with Washington’s efforts.

The panel’s senior Republican, Senator Jim Risch of Idaho, praised bipartisan efforts to approve promised economic assistance for three allied Pacific island nations to blunt China’s influence in the strategically vital region.

“Probably most Americans don’t have a full appreciation of how important the Pacific Region is as far as our competition with China is concerned; China is incredibly active there,” he said.

“I was happy to hear your assessment of where the Europeans are,” added Risch, referring to Campbell’s testimony. “As far as their view of China, it’s been evolving, fortunately.”

Another topic Campbell found support among committee Republicans for was the dire need to restore American shipbuilding capacity, much of which has migrated to China. The issue has emerged regularly in recent months as a key bipartisan concern.

Senator Marco Rubio, Republican of Florida, grilled Campbell on the extent to which China has been able to wield power and influence through this capacity.

“They’re building aircraft carriers. They’re building this fleet of LNG ships. They’re even building cruise ships. And we all understand that shipbuilding is at the core of the ability to project power, not just military, but commercial power,” Rubio said.

“And they are the undisputed king of basic industrial inputs, steel and cement – and these things that are not glamorous.

“So how does that fit, this whole view of this domination that they’re establishing in these key core industries … into our strategy?”

After telling Rubio that “I accept and deeply support that general world view”, Campbell went on to say that “there are a thousand reasons why naval shipbuilding is challenging.

“I would like us to think there might be ways that we could work with allies and partners here, but it’s extremely difficult,” he said. “But I will tell you … the difference in shipbuilding between the United States and China is deeply, deeply concerning.

“We have to do better in this arena, or we will not be the great naval power that we need to be for the 21st century,” Campbell added.

China’s BYD explores Canadian car market entry, regulatory filing shows

https://www.scmp.com/news/world/united-states-canada/article/3272547/chinas-byd-explores-canadian-car-market-entry-regulatory-filing-shows?utm_source=rss_feed

Chinese electric vehicle (EV) maker BYD, is looking to enter the Canadian automotive market, according to a regulatory document filed earlier this month, even as Canadian officials consider imposing tariffs on vehicles imported from China.

Canada, following in the footsteps of the United States and the European Union, said in June it was considering imposing tariffs on Chinese-made electric vehicles as it seeks to align itself with its allies against what the West views as a heavily subsidised Chinese industry.

Ottawa opened a month-long public consultation period on July 2 to weigh its response, noting “China’s unfair support for the EV sector, if left unchecked, could lead to an exponential surge of imports that will adversely affect planned EV investments and the transformation of Canada’s automotive sector”.

It was not immediately clear when representatives of the company’s Canadian unit, BYD Canada, met the government officials.

While the document did not specify a timeline of BYD’s plans, it did discuss the potential application of tariffs on EVs, along with the Shenzhen-based company’s plans to begin selling passenger EVs in Canada.

Meanwhile in May, BYD unveiled the Shark, a mid-size hybrid-electric pickup truck in Mexico, even as its regional chief brushed off new US tariff rises on Chinese EVs, saying the company was not targeting the US market.

Why is aspiring naval power China focusing on Central Asia and Middle East?

https://www.scmp.com/opinion/china-opinion/article/3272346/why-aspiring-naval-power-china-focusing-central-asia-and-middle-east?utm_source=rss_feed

Russian President Vladimir Putin’s preoccupation with his country’s invasion of Ukraine is allowing China to dabble in areas once solidly in Moscow’s sphere of interest. Recent diplomatic breakthroughs with regard to Ukraine, Gaza and Afghanistan show Beijing trying to fill this widening political vacuum, even as Putin focuses all his dwindling assets on defeating Ukraine. Such temptations could precipitate Chinese overextension.

First, Ukrainian Foreign Minister Dmytro Kuleba’s visit to Guangzhou for talks with Foreign Minister Wang Yi reflects China’s continental aspirations. In May, China co-published a peace proposal with Brazil to end the Russo-Ukrainian War.

After last week’s talks, Kuleba announced Kyiv’s willingness to open negotiations with Moscow, but only if Russia “is ready to do so in good faith”. While Beijing has offered Moscow its “no limits” friendship and resisted pressure to condemn Putin’s war, China’s foreign ministry has also stated it would “continue to expand its food imports from Ukraine”. Beijing is positioning itself to mediate in the Russo-Ukrainian war.

Second, regarding Israel’s war in Gaza, China negotiated an agreement among Hamas, Fatah and several other smaller factions last week. Each of the parties signed a joint statement saying it would support a temporary Palestinian government for post-war Gaza and the Israeli-occupied West Bank.

While some critics might dismiss these developments as all being for show, others see it as a chance to bring about Palestinian unity. Beijing has again positioned itself to become the mediator, a new role for China in the Middle East.

Third, by recognising the Taliban envoy to China, Beijing became the first government to give de facto recognition to the Taliban government in Kabul. Apparently Chinese communist atheists and Afghan theocrats now have economics in common, in particular the oil pipeline being built through Afghanistan and the 25-year cooperation agreement between China and Iran.

This strategically located pipeline bringing much-needed petroleum to China’s western border avoids both the Russian sphere of interest immediately to the north and the Indian Ocean route to the south. As a result, Beijing has good reason to encourage Kabul to ensure the safety of China’s geostrategic interests in Central Asia.

Thus China has added these three new landward security responsibilities to its numerous pre-existing seaward problems. Tensions on the Korean peninsula could always reignite. China and Japan remain at odds over control of the Diaoyu Islands, known as the Senkaku Islands in Japan.

China has said it favours peaceful reunification with Taiwan but will not renounce the use of force. In the South China Sea, Beijing continues to reject the 2016 Permanent Court of Arbitration ruling that the parts of the South China Sea nearest the Philippines lie within its exclusive economic zone and not China’s Recent political instability in Vietnam must also be a worry for China.

Since 2001, there has often been an uneasy peace between the US Navy and the People’s Liberation Army Navy, especially in waters bordering China. Despite its neighbours’ objections, China has built island bases, military airstrips and fortifications across the South China Sea, all of which are non-income-producing investments.

China’s expansion has threatened its maritime neighbours, increasing support among them for cooperation with the Quad grouping of Japan, India, Australia and the United States. Meanwhile, at the same time as China faces a domestic economic slowdown, Belt and Road Initiative projects are not generating enough income for recipient countries to pay back their loans.

Given its resource limitations and the prospect of both military and economic overextension, China must decide whether to prioritise its land borders or sea borders. The Ming dynasty was perhaps the most famous case when China faced a similar choice. The Ming government built an enormous treasure fleet of more than 300 ships that made seven journeys to the Malacca Strait, the Indian Ocean and as far as eastern Africa.

While the Ming expeditions linked China with half the known world, the cost of the voyages did not provide comparable financial benefits to the state. A decade after emperor Yongle’s death in 1424, Ming bureaucrats cancelled the expeditions, with some scholars arguing it was out of self-interest or concerns that overseas trade served little purpose in a country such as China.

Beijing’s recent diplomatic successes with regard to Ukraine, Gaza and Afghanistan indicate a possible shift away from the sea and towards the land. Just last week, Beijing and Manila reached a provisional arrangement allowing the Philippines to resupply its Second Thomas Shoal naval base.

If this arrangement holds, it could suggest China has decided to de-escalate tensions in the South China Sea. Rather than risk war over Taiwan or the South China Sea, Beijing could decide to recover China’s sphere of influence in Central Asia which was lost to Russia.

All this recent diplomacy has perhaps made Beijing feel strategically overextended. A shift from the seas back to the land would echo the Ming’s landward shift five centuries ago. China’s ongoing transition to becoming a sea power is in no way certain, in particular if Beijing’s very real continental security challenges were to outweigh its potential benefits from the sea.

US says start of new China tariffs will be delayed by at least two weeks

https://www.scmp.com/news/world/united-states-canada/article/3272538/us-says-start-new-china-tariffs-will-be-delayed-least-two-weeks?utm_source=rss_feed

The US Trade Representative’s office said on Tuesday some of the steep US tariff increases on an array of Chinese imports, including electric vehicles (EVs) and their batteries, computer chips and medical products will be delayed by at least two weeks.

USTR said in May those tariffs would take effect on August 1 but the office said it is still reviewing 1,100 comments received and now expects to issue a final determination in August. The office added the new tariffs will take effect around two weeks after the final determination is released.

US President Joe Biden in May opted to keep tariffs put in place by his Republican predecessor Donald Trump while ratcheting up others, including a quadrupling of import duties on Chinese EVs to over 100 per cent and doubling semiconductor duties to 50 per cent.

USTR also sought input whether a proposed 25 per cent duty on medical masks, gloves and a planned 50 per cent tariff on syringes should be higher.

Washington is investing hundreds of billions of dollars in clean energy tax subsidies to develop US EV, solar and other new industries, and has said China’s state-driven excess production capacity in these sectors threatens the viability of US companies. The tariffs are meant to protect American jobs from a feared flood of cheap Chinese imports.

The new measures affect US$18 billion in current imported Chinese goods including steel and aluminium, semiconductors, electric vehicles, critical minerals, solar cells and cranes, the White House said. The EV figure may have more political than practical impact in the United States, which imports few Chinese EVs that are subject to prior vehicle tariffs.

The Port Authority of New York and New Jersey said the tariffs would increase the cost of each crane by US$4.5 million “causing a significant strain on the port’s limited resources.”

The largest two categories, making up US$13.2 billion of the targeted imports from China in 2023, are lithium-ion batteries, according to US Census Bureau data.

The US imported US$427 billion in goods from China in 2023 and exported US$148 billion to the world’s number two economy, a trade gap that has persisted for decades and become an ever more sensitive subject in Washington.

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Chinese vice-premier lays out road map for industrial policy at ‘unprecedented’ time

https://www.scmp.com/economy/global-economy/article/3272495/chinese-vice-premier-lays-out-road-map-industrial-policy-unprecedented-time?utm_source=rss_feed

China’s government and the market must work together to develop “new quality productive forces” to compete with other major countries, Vice-Premier He Lifeng said.

“Developing new quality productive forces is a long-term task and a systematic project. We need both historical patience and a sense of urgency,” he wrote in an article published by the People’s Daily newspaper on Tuesday.

“We must not only plan systematically and promote it, but also adopt appropriate ways to prevent deviations.”

President Xi Jinping introduced the term last year, focusing on scientific research and technological advancements within China’s sprawling industrial complex.

The vice-premier said scientific and technological innovation had entered into an “unprecedented period of intensive activity” and changes in biotechnology, new materials and new energy would reshape the global landscape and drive competition with other major countries.

He also stressed the government’s role in creating a scientific layout and rules with fiscal and tax support to prevent overcapacity and wasted resources due to repeated construction.

The role of the market, he said, was to foster technological and industrial innovation.

“We must give full play to the decisive role of the market in resource allocation, strengthen the leading role of enterprises in scientific and technological innovation, and enable all types of enterprises to become the main force in developing new quality productive forces,” the vice-premier added.

The actual conditions of different regions and industries must also be assessed to better grasp the new development, He said.

There is not a single model, and participants should not “blindly” follow trends, the vice-premier added.

“Developing new quality productive forces does not mean blindly pursuing innovation and replacing the old with the new,” He said, adding that traditional industries remain integral to the real economy and should not be simply regarded as “outdated” and replaced.

While strategic emerging industries have flourished, accounting for 13 per cent of China’s gross domestic product in 2023 from 7.6 per cent in 2014, He acknowledged that the foundation of key core technologies was weak.

There is also repetition in regional planning, and a lack of talent, He said.

He pledged to maintain an “open innovative ecosystem” and attract “high-quality capital, key resources, advanced technology, top talent” from all over the world.

He added developing “new productive forces” was a response to win the initiative in development, as the United States and other Western countries suppress China and try to decouple and delink.

“Currently, in the face of fierce competition from major countries, China’s future industrial development faces a situation: if we stop moving forward, we fall back; if we move forward slowly, we fall back too,” He added.

China’s new ultra-fast chip could double the pace of electronic warfare: research team

https://www.scmp.com/news/china/science/article/3272480/chinas-new-ultra-fast-chip-could-double-pace-electronic-warfare-research-team?utm_source=rss_feed

Chinese scientists have developed what could be the fastest analogue-to-digital converter (ADC) for military use.

The device can reduce the time delay of electronic warfare receivers from nanoseconds to picoseconds – or one-trillionth of a second – researchers behind the development said.

The chip technology would make radar signal detection and responses 91.46 per cent faster, nearly doubling the speed of combat to give the Chinese military a critical edge, according to the team from the University of Electronic Science and Technology of China (UESTC).

The research was led by Professor Ning Ning at the UESTC, which is based in the tech hub of Chengdu and closely linked to major defence contractor China Electronics Technology Group.

In electronic warfare, military forces must first convert detected electromagnetic waves, which are analogue signals, into digital format composed of the zeros and ones.

They must then analyse the digital signals on computers to be able to perform tactical actions such as identification, localisation, deception or suppression of enemy defences.

To avoid missing signals, ADCs must work at full capacity, collecting billions of samples per second and generating massive amounts of data.

This process “severely restricts the response speed of equipment and leads to high power consumption and severe heat generation in advanced electronic warfare receivers”, Ning and his colleagues wrote in a peer-reviewed paper published in the Chinese academic journal Microelectronics earlier this month.

“In the field of electronic warfare receivers, the industry is still focused on reducing signal processing delay and enhancing equipment response speed by increasing the conversion rate of ADCs, and reducing equipment power consumption by lowering the power consumption of ADCs,” they wrote.

“However, the design difficulty of ultra-high-speed, low-power ADCs has increased dramatically, while the improvement in equipment performance has become increasingly marginal.

“This path has reached its limit.”

Ning is also the director of an application-specific integrated circuit (ASIC) innovation laboratory, jointly set up by UESTC and Chinese telecoms giant Huawei Technologies.

The joint laboratory was set up in May last year with 23 million yuan (US$3.17 million) from Huawei. It is dedicated to research and technology transfer in the field of ultra-low power analogue-digital mixed integrated circuits, according to UESTC’s webpage.

Huawei and Ning’s team have collaborated on intelligent detection systems for sensing and transmission, resulting in multiple achievements such as lightweight, high-accuracy sensing detection chips, algorithms and hardware systems.

For the ultra-fast ADC, Ning’s team drew inspiration from electroencephalogram (EEG) monitors, which measure electrical activity in the brain.

In real electronic confrontations, radar signals are usually intermittent like brain signals. Most of the time, the brain sensors receive just noise.

To save power, some wearable EEG monitors use event-triggered ADCs to simplify signal conversion and feature extraction.

This was the inspiration for Ning’s team to develop the world’s first reported smart ADC for military applications.

This chip can analyse analogue signals before they are converted into digital signals, determining whether they are target radar signals or noise.

It only issues alerts and begins full-power analogue-to-digital conversion when a radar signal is confirmed.

“[Therefore] power consumption savings of over 30 per cent can be achieved consistently under various environments,” Ning’s team wrote in the paper, describing it as “groundbreaking”.

The chip is based on a mature 28-nanometer process, which makes it cost-effective and easy to mass-produce.

China can independently build 28-nanometer photolithography machines and has also imported a large number of such chip manufacturing equipment in recent years to boost production capacity, as its hi-tech access is increasingly restricted by US-led export controls.

In the first half of this year, China exported nearly 260 billion mature-process chips, according to Chinese customs data – an increase of more than 25 per cent.

With the support of advanced technology, the Chinese military has started to shift from defence to offence.

Earlier this year, state media reported that a Chinese Type 055 destroyer equipped with an advanced electronic warfare system had blocked an entire US aircraft carrier strike group in the South China Sea.

Earlier this month, four Chinese naval ships appeared in waters near Alaska for a “freedom of navigation” operation. Shortly after, two Chinese H-6K strategic bombers with nuclear strike capabilities joined a Russian bomber formation in the same area.

Chinese state media said it was the first time the Chinese military had carried out operations in sensitive waters near North America, highlighting its expanded information support abilities.

Instead of strategic missiles, the Chinese bombers were carrying large electronic warfare pods under their wings, according to video footage released by the US military, which intercepted the warplanes along with Canadian fighters.

Some military experts say the rapid growth of China’s electronic warfare abilities is driven by a booming communication industry.

According to the latest official data, China has built nearly 4 million 5G base stations, or 20 times more than the United States.

Despite US sanctions, Huawei recorded 145.5 per cent growth in profit last year because of significant breakthroughs in microchips and other cutting-edge technologies, including the world’s first smartphone that can connect to a satellite 36,000km away without an external antenna.

The company stands as the top employer for Ning’s students after graduation, according to the team’s website.

Every year, around 1.6 million Chinese university students graduate in telecommunication engineering, more than any other major.

Chinese University of Hong Kong council was fully aware of logo redesign, school president says

https://www.scmp.com/news/hong-kong/politics/article/3272535/chinese-university-hong-kong-council-was-fully-aware-logo-redesign-school-president-says?utm_source=rss_feed

The president of the Chinese University of Hong Kong said on Tuesday its governing council was fully informed about an ill-fated redesign of the school’s emblem, a day after the body said he would bear all responsibility for the affair.

President Rocky Tuan Sung-chi also expressed regret over what he said was a failure to consult him on the date of a council meeting, held Monday, where members were presented with an external consultant’s second report on the redesign.

While conceding school management had “room for improvement” in how the matter was handled, Tuan maintained the council was fully aware of the project when it was undertaken two years ago.

“The content of the stakeholders engagement and image-building project and the redesigned emblem were passed by the university council on September 22, 2022,” he said.

A report on the shelving of the emblem was also submitted to the council on December 16 that same year, with acknowledgement from the body, the president added.

Tuan explained that upon realising there was a backlash over the redesign, he immediately discussed the matter with senior management and decided to shelve the project in the end.

“Regarding opinions that there was an oversight, the school admits that there is room for improvement,” Tuan said, as he pledged to learn from the affair while also taking the university to new heights.

He, as well as administrative staff, had “fully cooperated” with the council’s investigation over the shelving of the emblem, attending investigative interviews and submitting more than 500 documents, he added.

The revamp, part of a brand refresh for the university’s 60th anniversary, drew widespread criticism, including from three lawmakers sitting on the council who accused the institution of poor governance.

After the meeting on Monday, council chairman John Chai Yat-chiu lashed out at Tuan, saying he “could not accept” the lack of cooperation from university management.

He also said Tuan had gone on a planned business trip instead of attending the meeting, even after being notified of the date.

The president said he was not consulted about setting the meeting for Monday and expressed “regret” he was only notified of the date after it was decided. He said he had to attend a prearranged work trip to Yunnan province.

Meanwhile, lawmaker Tommy Cheung Yu-yan posted a video on his Facebook page declaring his intention to “follow up” on the whereabouts of HK$14 million (US$1.8 million) of funding approved for the project, questioning how the money was used and why it “had never been disclosed” by management.

Council chairman John Chai Yat-chiu on Monday said HK$4 million was spent on the redesign, with most of the money going to consultation fees paid to an international branding consultancy.

Without naming Cheung, the university later issued a statement clarifying that all unused funds after the revamped emblem was shelved had been refunded to the institution’s central budget and reallocated to strategic communications and global promotion projects.

The university also said it regretted what it called “groundless rumours” and “untrue remarks”.

Tuan resigned in January but is staying on for a final year to “ensure a smooth transition”. He had been accused of being sympathetic towards protesting students during the social unrest in 2019 by some pro-establishment figures.

Standard Chartered plays down fears of US-China trade war under Trump

https://www.theguardian.com/business/article/2024/jul/30/standard-chartered-plays-down-fears-of-us-china-trade-war-under-trump

Fears of a China trade war erupting under a second Trump presidential term are overblown, according to bosses at Standard Chartered bank, as they suggested that the country’s real estate woes were “largely in the rearview mirror”.

While the London-headquartered bank makes most of its money in Asia, particularly in Hong Kong and Singapore, its chief executive, Bill Winters, played down the impact that increasingly strained relations between Washington and Beijing might have on the business.

Winters told journalists on Tuesday that the administration of US president, Joe Biden, had already been “very hawkish on China”, implementing trade restrictions and sanctions that had not exactly thawed relations with one of the world’s largest economies.

“Whoever wins this election, Harris or Trump, is likely to continue to be hawkish on China,” Winters said.

Any pressure to open up China to the rest of the world will boost business for a cross-border lender like Standard Chartered, Winters added.

“The more China is under pressure from international partners, the more they’re inclined to open up, in order to establish China as a very substantial trade and investment player globally,” Winters said.

He added: “So I won’t say we’re not worried because tension in and of itself is bad for global sentiment and undermines business confidence to some degree. But this is not impacting our business and, you might say, quite the contrary.”

The comments came as the bank reported pre-tax profits of $1.6bn (£1.25bn) in the second quarter, having beat the $1.5bn forecasted by analysts, thanks in part to growth across its wealth division that manages and invests money for rich clients.

Official figures released earlier this month also showed that China’s economy grew 4.7% in the second quarter, falling short of expectations for a 5.1% rise.

Standard Chartered warned that China’s growth rate was “unlikely to return to pre-pandemic levels”, but Winters insisted policymakers were being very deliberate in their management of a maturing economy, including a recent real estate crisis that resulted in the forced liquidation of developer Evergrande.

The bank’s chief financial officer, Diego De Giorgi, said it would be a “fool’s errand” to call a bottom on the China real estate market woes. However, he believed the financial ripple effects had largely been accounted for.

“From our point of view, it’s a problem that is largely in the rearview mirror,” De Giorgi said. In February, the bank said it was expecting a maximum $1.2bn hit linked to its Chinese commercial real estate portfolio.

“We have every confidence that China will maintain strong growth,” Winters added. “It’s still the the largest, or the second largest, contributor to global growth in any particular period, and we expect that will be the case in the quarters and years to come.”

Russia needs China’s market more than China needs Russian gas

https://www.scmp.com/opinion/asia-opinion/article/3271667/russia-needs-chinas-market-more-china-needs-russian-gas?utm_source=rss_feed

Despite its ambitious plans to become carbon neutral and energy self-sufficient by 2060, China remains dependent on the import of fossil fuels. But China - unlike the European Union, which has begun an “energy divorce” from Russia since the invasion of Ukraine - can still rely on inexpensive Russian natural gas and oil.

Cut off from Western markets, Russia – whose oil and gas income accounts for nearly 30 per cent of its national budget – desperately aims to find new customers for its energy. Over the past two years, Russia has significantly increased its oil exports to India. Now it seeks to build the Power of Siberia 2 pipeline that would allow for the supply of 50 billion cubic metres of natural gas per year to China.

In 2023, Russia became China’s top source of crude oil imports. Russian exports of natural gas to China increased by 61.7 per cent compared to 2022. However, China appears not to be in a hurry over the Power of Siberia 2 pipeline. One of the main reasons for this delay could be concerns over price.

It is no secret that China is taking advantage of Russia’s “energy decoupling” from Europe to get better prices for Russian gas. The European Union has found ways to significantly reduce its gas imports from Russia. However, energy cooperation with China has not allowed Russia to fully make up for the loss of the European market.

In 2023, Russia exported only 28.3 billion cubic metres of natural gas to Europe, which is a drop in the ocean compared to the 192 billion cubic metres that Gazprom alone sold to European countries in 2019.

In 2023, China bought 22.7 billion cubic metres of Russian natural gas, and was paying US$286.9 for 1,000 cubic metres of gas. The Kremlin charged much more for European countries, selling natural gas at US$461.3 for 1,000 cubic metres.

But even though China eagerly takes advantage of significant discounts on Russian gas, it reportedly seeks to secure even lower rates. Reports suggest that Beijing expects to pay at rates close to Russia’s heavily subsidised domestic prices, around US$84 for 1,000 cubic metres. More importantly, China will allegedly commit to buying only a small fraction of the Power of Siberia 2 pipeline’s planned annual capacity of 50 billion cubic metres of gas.

Since the Kremlin, at least for now, does not seem ready to make such huge concessions to its strategic partner, the realisation of the Power of Siberia 2 project remains uncertain. Also, it is questionable whether China even needs another pipeline that would supply it with Russian natural gas, if it is perfectly satisfied with the volume of gas it gets through the already existing Power of Siberia.

Like Europe, China also aims to diversify and expand the sources of oil and gas imports. Geography plays an important role in Beijing’s energy policy. China is surrounded by energy suppliers. That is why it has struck deals to import energy not only from Russia, but also from countries such as Turkmenistan, Myanmar, Kazakhstan and Uzbekistan.

According to energy experts, China’s natural gas imports will amount to 250 billion cubic metres by 2030, which can almost completely be covered by current contracts with its suppliers. Moreover, China has bought large amounts of liquefied natural gas from Australia, Qatar and Russia.

But China’s gas imports could reach 300 billion cubic metres per year by 2040, with only half of that volume expected to be covered by existing contracts. As a result, China might have to eventually reach a deal with Moscow on the Power of Siberia 2 pipeline. But what if, in the meantime, China manages to significantly reduce its dependence on fossil fuels?

China is poised to grow its green hydrogen sector, as well as increase production of green ammonia, methanol and biomass to help meet its energy needs. Following Beijing’s “historic increases” in installations of solar, wind and other renewables last year, renewable energy is expected to be the dominant energy source in China between 2035 and 2040.

It is, therefore, no surprise that China will this year hold several important energy summits, where experts from all over the globe will discuss energy security, climate change, and the low-carbon economy.

But even if China does not achieve all of its ambitious plans regarding transition from fossil fuels to renewables, it is not very probable that the Power of Siberia 2 will become its top energy priority any time soon, if at all. Russian energy-giant Gazprom has reported its first loss in more than 20 years, the result of Europe’s “energy divorce”. Russia appears to need the Chinese market more than China needs Russian gas.

Quite aware of that, Beijing is now in position to dictate its own terms to the Kremlin. The problem for Moscow is that the Power of Siberia 2 project may turn out to be financially unviable. With an ongoing war in Ukraine, persistent isolation from the West and its energy giant losing money, Russia is unlikely to be able to fund the construction of a multibillion-dollar, 2,600-kilometre pipeline (1,616 miles) passing through Russia, Mongolia and China.

Thus, if the Kremlin continues to reduce prices of the gas it sells to China and make extra concessions, it is highly unlikely to benefit even from the Power of Siberia 2 pipeline, if the project ends up going forward.

‘Cold war relic’: China takes aim at US-Japan alliance under American nuclear umbrella

https://www.scmp.com/news/china/diplomacy/article/3272512/cold-war-relic-china-takes-aim-us-japan-alliance-under-american-nuclear-umbrella?utm_source=rss_feed

Beijing has again hit out at Tokyo over security talks with the United States on the weekend, calling on Japan to stop allying with countries outside the region.

For a second day in a row, Chinese officials protested on Tuesday against the “2+2” meeting of Japanese and US defence and foreign ministers in Tokyo on Sunday.

“China demands that Japan adopt a rational view of China, stop meddling in China’s internal affairs for political gain, cease provocations over maritime issues, and end the practice of rallying non-regional countries to create divisions and confrontations in the region,” Chinese foreign ministry spokesman Lin Jian said.

The ministry accused the allies of “smearing and attacking China over maritime issues, clinging to a cold war mentality, manipulating group politics, and stirring up confrontations”.

He added that Beijing had lodged a stern protest with Japan through diplomatic channels over the meetings and a joint statement after the talks.

In the statement, Japan and the US expressed grave concerns over China’s “provocative” actions in the South and East China seas, its military cooperation with Russia, and the swift and opaque expansion of its nuclear arsenal.

The ministers also discussed extended deterrence, Washington’s strategy of using nuclear and conventional weapons to deter attacks on its allies.

Since 2010, the issue has been addressed mainly through a lower-level dialogue. This is the first time that it has been elevated to a ministerial discussion.

The ministers said the region was in the midst of “an increasingly deteriorating regional security environment”, with North Korea’s development of nuclear weapons and delivery missiles, China’s expanding nuclear arsenal, and Russia’s military cooperation with North Korea.

“Under these circumstances, the United States and Japan reiterated the need to reinforce the alliance’s deterrence posture, and manage existing and emerging strategic threats through deterrence, arms control, risk reduction, and non-proliferation,” the ministers said.

But Lin said this kind of cooperation under Washington’s nuclear umbrella was “a relic of the cold war” and would only escalate regional tension and increase the risk of nuclear proliferation.

“China urged the US and Japan to abandon cold war thinking, and genuinely reduce the role of nuclear weapons in their national and collective security policies,” he said.

Lin also defended Beijing’s nuclear development, saying its nuclear capacity remained “at the minimum level needed for national security”.

“As long as no country uses or threatens to use nuclear weapons against China, they won’t face a threat from China’s nuclear weapons,” he said.

Lin also urged Tokyo, the only country to have been attacked with an atomic bomb, to “critically reassess its strategic security policies” and adhere to its three non-nuclear principles of never possessing, producing, or permitting atomic weapons on its territory.

Japanese newspaper Yomiuri reported that Washington and Tokyo intend to compile their first joint document on extended deterrence within the year.

The document would include Washington’s commitment to use its nuclear weapons and other abilities to bolster deterrence around Japan, as well as outline the conditions that would prompt US retaliation in defence of Japan, the report said.

As China’s population shrinks, it’s time to look at healthy ageing

https://www.scmp.com/opinion/china-opinion/article/3272516/chinas-population-shrinks-its-time-look-healthy-ageing?utm_source=rss_feed

A United Nations report estimating that China’s population of 1.4 billion could shrink to half its size by 2100 has fuelled discussion about the potential impact.

The report projects that China’s population could return to a size comparable to what it was in the late 1950s, as it may lose 786 million people in the next 70 years amid a declining birth rate. There is a 50 per cent chance of that happening, according to the latest edition of the UN’s World Population Prospects released earlier this month.

The projection has again ignited debate about whether China can maintain its global dominance and strong economic growth – the latter enabled by what is described as the country’s “demographic dividend”.

This dividend occurs when the proportion of the working population is high, and coupled with globalisation it has seen China become a global manufacturing powerhouse in the last two decades.

But gauging a country’s economic prowess just by looking at its population size is simplistic, and it may be misleading. In fact there has long been differing views over whether China’s large population has been a blessing or a curse.

For example, the leadership has for many years said that China is still a developing country because of its vast population and a low GDP per capita. They have also stressed that ensuring there is enough food and necessities for such a large population is an uphill task.

This reason has also been used to justify the controversial one-child policy from 1979 to 2015 that resulted in many forced and voluntary abortions.

But back in the 1950s, Mao Zedong actually encouraged large families so he could have the people needed to power his Great Leap Forward campaign.

The narrative about whether a large population is a blessing or a curse has changed again in recent years as China began facing a declining population.

What matters about this latest warning is the potential change to the demographic structure. It will mean a greying population due to the low birth rate, which Beijing has failed to boost despite bringing in a three-child policy and local governments offering incentives for people to have children.

China is facing a long period where there will be fewer people of working age and a higher proportion of older people, which will add pressure on welfare and the healthcare system.

According to the national census conducted in 2020, the age dependency ratio in China increased to 46.6 per cent in 2022. So for every 100 people of working age – defined as 15 to 64 – more than 46 elderly people and children were being supported.

The World Bank estimate is higher – it put the age dependency ratio in China at 54.7 per cent in 2022 and projects it will reach 61.5 per cent by 2035.

With a ratio so high, it will not just be a problem for the country’s productivity. Tackling the burden on the healthcare system will also be of utmost importance because China’s elderly population is already big in terms of the absolute number compared to other greying societies such as Japan.

But so far there is no clear picture for healthcare investment and reform.

Chinese experts have said the government has long planned to conduct a national survey on the health status of the elderly population, but it has been delayed for undisclosed reasons – one of which could be the cost.

If and when it does happen, an important part of the survey will be assessing the mental health of the elderly.

This information will be crucial for accurate policy planning, whether it is building facilities or training healthcare workers, or even technological research for devices that may help.

Such information will also help China to plan for how it can help the population to age more healthily – a far more useful discussion than just focusing on the numbers.

China supports Malaysia’s Brics application, saying ‘like-minded partners’ are welcome

https://www.scmp.com/news/china/diplomacy/article/3272504/china-supports-malaysias-brics-application-saying-minded-partners-are-welcome?utm_source=rss_feed

China has supported Malaysia’s application to join Brics, saying it would welcome “like-minded partners” to the bloc.

Malaysian Prime Minister Anwar Ibrahim said on Sunday that he had sent a letter of application to Russia, the current chair of the group of emerging economies.

“We welcome more like-minded partners joining [Brics] and working together to make the international order more just and equitable,” Chinese foreign ministry spokesman Lin Jian said on Monday.

“The development and expansion of the Brics mechanism reflects the trend of the times, serves the interests of relevant countries, and provides a strong driving force for multipolarity in the world and greater democracy in international relations.

“That is exactly why more and more emerging markets and developing countries, such as Malaysia, show a keen interest in Brics and have expressed recognition for and hope to join the group.”

The organisation was founded by Russia, China, India and Brazil 15 years ago. It has since welcomed several emerging economies, including South Africa in 2010 and more recently Iran, Egypt, Ethiopia and the United Arab Emirates.

It now has 10 members and some 30 other counties, including Thailand – a US treaty ally – have expressed interest in joining.

Xu Qinduo, a senior fellow at the Chinese think tank Pangoal Institution, said Malaysia and Thailand were unlikely to join in the immediate future, pointing to Russian Foreign Minister Sergey Lavrov’s comments that the bloc had decided to “take a pause” on admitting new members.

However, Xu also said that Malaysia joining can “only be a plus”.

“China supports Malaysia’s application as it sees the group’s expansion as being in line with a multipolar system. As a founding member of Brics, China plays a key role in [progressing] Malaysia’s prospective membership, [a role] that is as important as Russia’s – if not more important, given the size of its economy,” Xu added.

“Economically, Brics membership means better business opportunities and market access for Malaysia. Politically, Brics members share Malaysia’s concerns about the West, in particular the continued US support for Israel in its ongoing attacks on Palestinians.”

Koh King Kee, president of the Centre for New Inclusive Asia, a Kuala Lumpur-based think tank, said Malaysian membership could prompt interest among other Southeast Asian countries wanting to establish a collective position on the world stage.

“Many global institutions have not been effective in addressing the issues of regional conflicts, trade restrictions and climate change,” Koh said.

“Brics provides Malaysia with an alternative platform to voice its views on global issues, particularly the views of the Muslim world, given [Anwar’s] standing in Muslim countries.”

Koh added that Malaysian membership of the bloc would be in line with China’s policy of “neighbourhood diplomacy”, which focuses on seeking common ground with other countries and putting their differences aside.

“Brics membership will enable Kuala Lumpur to collaborate and cooperate more closely with Beijing on global issues of common interest, such as the conflict in Gaza and low carbon development,” Koh added.

Huawei steals spotlight at ChinaJoy expo as HarmonyOS Next promotion entices gamers

https://www.scmp.com/tech/big-tech/article/3272494/huawei-steals-spotlight-chinajoy-expo-harmonyos-next-promotion-entices-gamers?utm_source=rss_feed

Huawei Technologies stole the spotlight at this year’s edition of ChinaJoy, the country’s biggest annual digital entertainment expo in Shanghai, as the telecommunications equipment giant unveiled more than 40 video games that can run on HarmonyOS Next, the latest iteration of its mobile operating system.

HarmonyOS Next, which will end support for Android apps, will be officially launched for commercial use on Huawei’s upcoming flagship 5G smartphone series, the Mate 70, in the fourth quarter this year.

The titles showcased by Huawei at ChinaJoy, which was held from July 26 to 29, include: Crystal of Atlan from ByteDance; from NetEase; Reverse: 1999 from Guangzhou-based Bluepoch; and Sky: Children of the Light by US studio Thatgamecompany.

Its HarmonyOS promotion marked Shenzhen-based Huawei’s first year with a central booth at the ChinaJoy exhibition floor inside the Shanghai New International Expo Centre.

Long queues formed at four separate sections exhibiting those featured titles at the HarmonyOS booth, as ChinaJoy attendees waited to take part in interactive activities, get free gifts and play video games on Huawei’s latest smartphones.

“It was exciting to see one of my favourite games Narake: Bladepoint Mobile and be able to run it on the new [mobile operating] system,” said Xu Xiaoyi, a 25-year-old Shanghai resident, who joined the queue for Huawei after initially setting out to see NetEase’s booth.

Xu said he hoped to see more foreign titles supported on HarmonyOS Next in the future, as ChinaJoy – with 369,000 total visitors this year, according to the event’s organiser – witnessed growing interest in the mobile platform’s launch and the native apps created for the system.

Huawei’s campaign at ChinaJoy showed how the company is building up anticipation for HarmonyOS Next, after the platform’s current iteration unseated Apple’s iOS as the second-biggest mobile operating system on the mainland in the first quarter.

HarmonyOS was launched as an alternative to Android in August 2019, three months after the US government added Huawei to its Entity List. Under this trade blacklist, Huawei is barred from buying software, chips and other US-origin technologies from suppliers without Washington’s approval.

While some major Chinese video gaming studios, such as miHoYo and Perfect World, did not return as exhibitors this year, Sony Interactive Entertainment once again put on a major display at the event, where its PlayStation gaming console and a wide range of titles saw plenty of interest. Visitors had the opportunity to play more than 30 games, including yet-to-be-released titles, on the popular PS5.

Sony is the only one among the industry’s big-three game console vendors that continues to exhibit at ChinaJoy. Microsoft and Nintendo have been absent from the expo for years.

Other popular booths at ChinaJoy were those of Blizzard Entertainment and NetEase, which renewed their partnership in April, as well as Tencent Holdings’ US subsidiary Riot Games, which featured shooting game .

“This was my first year here, and I got here early … to get the very first batch of gifts including Valorant,” said Qiao Ni, a 19-year-old Shanghai gamer, who was keen to visit the booths of foreign studios. He expects to return to ChinaJoy next year.

Philippine regulator says enforcing ban on China-linked Pogos ‘challenging’, wants exemptions

https://www.scmp.com/news/asia/southeast-asia/article/3272496/philippine-regulator-says-enforcing-ban-china-linked-pogos-challenging-wants-exemptions?utm_source=rss_feed

The head of the Philippines’ gaming regulator said implementing a ban on online casinos would be a challenge, as he pitched to exempt about a dozen outsourcing companies working for foreign gaming firms from the prohibition.

Most online casinos previously stripped of licenses “are still around” and operating illegally, said Alejandro Tengco, Chairman and Chief Executive Officer of the Philippine Amusement and Gaming Corp., or Pagcor.

“The big issue here really is as soon as we are able to successfully wind down, the next challenge would be enforcement,” he said in an interview with ABS-CBN News Channel on Tuesday.

Philippine President Ferdinand Marcos Jnr, in his state of the nation address last week, banned online casinos catering to Chinese gamblers, responding to calls to shut down an industry that he said stoked crimes including money laundering. He gave Philippine offshore gaming operators, or Pogos, until the end of the year to wind down their operations.

There are some 12 or 14 business process outsourcing companies that have special licenses to provide customer service to gaming companies based in Australia, US, Canada and Europe, Tengco said. Since these outsourcing firms are engaged in back room operations and do not take bets, they should be excluded from the ban, he said, adding that another six of such companies have pending applications.

All 43 internet gaming licenses covered by the ban directly employ more than 31,000 Filipino workers, while outsourcing firms holding special licenses employ some 8,000 to 9,000 nationals, Tengco told a Senate hearing on Monday. He’s meeting this week with key government officials to discuss other opportunities for displaced workers.

Similarly, there are about 31,000 foreign workers who would be affected once all 43 licensed internet gaming operators are closed, he said.

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Hong Kong can play a ‘favourable role’ in elevating China-Cambodia ties: Chinese envoy

https://www.scmp.com/news/hong-kong/politics/article/3272511/hong-kong-can-play-favourable-role-elevating-china-cambodia-ties-chinese-envoy?utm_source=rss_feed

China’s top diplomat in Cambodia has said that the Hong Kong leader’s visit to the Southeast Asian country is “particularly meaningful” in highlighting the city’s key role in promoting relations between Beijing and Phnom Penh.

Chief Executive John Lee Ka-chiu left Laos for the Cambodian capital Phnom Penh on Tuesday afternoon to kick off the second part of his three-nation tour.

The city leader was received at the airport by Chinese ambassador Wang Wenbin, who was posted to Cambodia about four weeks ago and is better known for his former role as a spokesman for the foreign ministry in Beijing.

“We believe that the chief executive’s visit to Cambodia will definitely promote mutually beneficial cooperation between Cambodia and Hong Kong, and will also play a favourable role in further promoting the China-Cambodia relations,” Wen said in a reception held at his official residence.

China’s relationship with Cambodia remains one of the closest in the Association of Southeast Asian Nations (Asean). There are no territorial disputes between the two countries, and Phnom Penh is heavily dependent on Chinese trade and investment.

The veteran diplomat said the day also marked a “particularly meaningful moment” because Lee arrived in Phnom Penh merely hours after the departure of Leung Chun-ying, the city’s former chief executive and now vice-chairman of China’s top political advisory body.

Leung, also a founder of the GX Foundation, was in the country to commemorate the elimination of cataract blindness backlog cases in the Prey Veng province through the NGO’s efforts, and sign new projects on eye surgeries and dengue prevention.

“[The back to back visits] show that Hong Kong attaches great importance to fostering friendly cooperation with Cambodia and promoting China-Cambodia relations,” Wen told the city leader.

Lee expressed gratitude to the ambassador’s support in his visit to Cambodia, adding that the government’s role was to “open the doors” and lay the friendly foundations to facilitate Hong Kong businesses’ entry into the country.

The chief executive later paid a visit to Canadia Integrated Group, which owns the country’s largest bank, Canadia Bank. He will also speak at a dinner event attended by local business representatives.

Lee was expected to meet the Cambodia leadership and attend a lunch on Wednesday before proceeding to Hanoi, the capital of Vietnam. He will return to Hong Kong on Friday.

China and Australia can team up to boost Asean’s energy transition

https://www.scmp.com/opinion/asia-opinion/article/3271915/china-and-australia-can-team-boost-aseans-energy-transition?utm_source=rss_feed

The Australia-China relationship has stabilised after years of geopolitical and trade turbulence. This lays the groundwork for further cooperation, including through joint initiatives in Asia. A significant opportunity lies in Southeast Asia’s push towards an electrified future.

Almost all countries in the region have committed to achieving net zero carbon emissions, and electrifying the end-user sectors, including transport, is a crucial strategy in this effort.

According to the International Renewable Energy Agency’s road map to keep the global temperature rise under 1.5 degrees Celsius by 2050, Southeast Asia is set for a rapid electrification, with more than half of its energy consumption coming from electricity by 2050, up from 22 per cent in 2018. This shift will drive a substantial rise in electric vehicle (EV) sales, reaching about 8.5 million units by 2035, according to EY-Parthenon analysis.

This burgeoning market presents an attractive opportunity for Chinese EV makers, which increasingly seek growth overseas amid domestic competition so fierce it has been described as a bloodbath. Southeast Asia’s close economic ties with China, coupled with Chinese companies’ narrowing prospects in Western markets amid rising import tariffs, is boosting interest in the region.

Chinese brands have shown remarkable growth, from just 38 per cent of the region’s EV market in 2022 to over 70 per cent last year. These efforts are supported by an influx of Chinese investment in EV manufacturing and the upstream supply chain, including mining, mineral processing and battery manufacturing.

Notably, in 2022, leading Chinese battery maker Contemporary Amperex Technology (CATL) announced a nearly US$6 billion joint venture in Indonesia to develop an end-to-end lithium-ion battery supply chain, spanning mining, material processing, battery manufacturing and recycling.

It is not the only Chinese company to do so. CNGR Advanced Material produces nickel and other battery minerals in Indonesia and other leading Chinese battery material producers from Zhejiang Huayou Cobalt to Ningbo Lygend Mining also have their sights set on Indonesia. In Malaysia and Thailand too, companies like NV Gotion, EVE Energy and Senior Technology Material are undertaking significant investments in battery manufacturing.

More Chinese companies are looking around in Southeast Asia for other key materials used in mobility batteries and EVs, such as aluminium and rare earth elements.

This enormous Chinese investment in battery manufacturing and the upstream supply chain offers significant potential for economic growth and job creation in Southeast Asia. It also offers lucrative opportunities for Chinese investors and companies. But to fully realise these benefits, it is crucial to address the environmental and social challenges often associated with mining and processing activities.

Concerns have emerged regarding mining activities in Sulawesi, Indonesia’s nickel hub. These activities have reportedly caused damage to tropical rainforests and disrupted the traditional way of life of the indigenous Bajau people.

Indonesia’s frequent rainfall further complicates these issues. If not properly managed, pollutants from nickel tailings can seep into the groundwater or flow into the ocean, posing environmental and health risks. These issues are not unique to Indonesia but are echoed across the region.

Indeed, they highlight a broader issue: how to manage the rapid expansion of mining and processing activities – to support the region’s transition to an electrified future – while upholding environmental and social responsibilities.

While mining and mineral processing inherently involves environmental and social challenges, there are numerous ways to manage them more responsibly. In this regard, Australia can play a crucial role, with its waste management practices, mine site rehabilitation and indigenous community engagement often being cited as global examples of sustainable mining.

Interestingly, Chinese investments in Australia’s mining sector have encountered fewer socio-environmental concerns, likely due to the expertise brought in by local management in implementing eco-conscious practices, such as wildlife protection initiatives and educational programmes for indigenous communities.

A South-South-North cooperation model presents a promising way forward. By leveraging its proven expertise, Australia can help integrate responsible practices into mining and mineral processing, ensuring that Southeast Asia’s pursuit of an electrified future does not come at the expense of its environmental and social integrity.

This collaboration will also benefit Australian companies and investors. Given Australia’s rich reserves of key minerals such as lithium and bauxite – essential for batteries and EV production – there is a substantial opportunity for mutual gain.

Australia, China and Southeast Asia can harness their collective strengths to build a regional clean tech ecosystem, characterised by diverse and resilient supply chains with interdependent and mutually reinforcing relationships.

While some might question the feasibility of such trilateral cooperation amid geopolitical tensions, history shows that Australia, as a middle power, can actively engage with major powers, mediate conflicts and foster multipolarity.

A successful trilateral cooperation in battery and mineral supply chains among Australia, China and Southeast Asia would show the world that working together is both feasible and beneficial. This South-South-North cooperation could serve as a model, inspiring other countries to join and fostering a growing network of efforts towards a clean, sustainable and prosperous future.

Chinese firms start work on DRC road projects under renegotiated mining deal

https://www.scmp.com/news/china/diplomacy/article/3272077/chinese-firms-start-work-drc-road-projects-under-renegotiated-mining-deal?utm_source=rss_feed

Chinese companies have broken ground on three major road projects linking resource-rich regions of the Democratic Republic of Congo (DRC) with its capital Kinshasa as part of a renegotiated minerals-for-infrastructure deal.

Work began last month on a US$300 million ring road in Kinshasa – a 63km (39-mile) project connecting the southwest and southeast ring roads to ease traffic congestion in the city.

It came just a few months after Sinohydro Corporation and China Railway Group agreed to invest up to US$7 billion in infrastructure as part of a revised agreement on the Sicomines copper and cobalt joint venture.

A statement from President Felix Tshisekedi’s office after the groundbreaking ceremony said the Kinshasa ring road was made possible because of the renegotiated deal.

Tshisekedi has pushed for an overhaul of mining contracts he said had been “poorly negotiated” under his predecessor Joseph Kabila, and raised the issue when he visited China last year.

The Chinese firms had previously agreed to invest US$3 billion in infrastructure, funded from the mine’s revenue, and another US$3 billion to develop a copper and cobalt mine, in exchange for a 68 per cent stake in the joint venture – called Sicomines – with state-owned Congolese company Gecamines.

Under the new deal, the companies agreed to increase their spending on infrastructure from US$3 billion to US$7 billion.

The ring road project will cross four communities of Kinshasa – home to more than 17 million people – and is expected to take three years to complete. It is a priority infrastructure project under the renegotiated deal.

“Where a road goes, development follows,” Du Xiaohui, the Chinese foreign ministry’s director general of African affairs, wrote on X, referring to the road projects being built by Chinese firms.

Zhao Bin, China’s ambassador to the DRC, said at the groundbreaking ceremony for the Kinshasa project that other works would be launched by Chinese firms in coming months. He said the ring road was “a road to prosperity for the Congo and the Congolese people”.

“As the first project of the new phase of Sino-Congolese cooperation ‘resources for projects’, I am confident that it will become a new landmark of Kinshasa and a new symbol of Sino-Congolese cooperation in infrastructure,” Zhao said.

He said the renegotiated deal would “inject new impetus into this win-win cooperation by improving the content of the said agreement”.

Another groundbreaking ceremony was held earlier this month in the village of Nguba, in the southeastern province of Lualaba, for a second project under the deal – an upgrade of the Mbuji Mayi-Nguba Road. The 900km road is part of the N1 National Road linking Kinshasa and Lubumbashi, the DRC’s mining capital.

China Railway Engineering Corporation on July 23 said work had begun on the project – to widen and upgrade the road from dirt to asphalt – and it would improve logistics between the two cities.

Construction also started on a third project in early July – an upgrade of the 230km Kananga-Kalamba Mbuji Road that goes to the border with Angola. The road is expected to be used to transport mineral resources to the ports.

Christian-Geraud Neema, Africa editor at the China Global South Project and a non-resident scholar at Carnegie Endowment, said the projects were part of the revised Sicomines contract signed earlier this year.

Neema said that under the deal, the joint venture would disburse US$324 million a year to finance these infrastructure projects. He said in 2024, the first year of the revised deal, the DRC would receive some US$650 million so “we should expect a lot of projects popping up around the country”.

“The DRC government is looking forward to these projects to demonstrate its success in renegotiating this contract,” Neema said. “Sicomines is also communicating on that, showing how it’s abiding by the terms of the agreement and how they’re DRC’s partner in achieving success.”

But he said it was too early to say if the projects would actually be completed, or when. “For President Tshisekedi, starting is good enough PR content for himself and his regime,” Neema added.

State-owned Congolese mining company Gecamines formed the Sicomines joint venture in 2008 – with a consortium of Chinese firms led by Sinohydro and China Railway Group – to trade copper and cobalt for infrastructure such as roads and hospitals.

The DRC supplies more than 60 per cent of China’s cobalt – a key component in batteries for electric vehicles and electronics – making it a key player in the Chinese transition to green energy.

Neema said the minerals-for-infrastructure model could be improved with better governance and by addressing the information asymmetry around the real value of the minerals versus what the country gets in exchange.

Resource-backed deals have been criticised by African Development Bank President Akinwumi Adesina as “asymmetrical” and “non-transparent”.

“I think it’s time for us to have debt transparency accountability and make sure that this whole thing of these opaque natural resource-backed loans actually ends, because it complicates the debt issue and the debt resolution issue,” Adesina said in April.

Chinese suppliers storm Temu office in Guangzhou in protest over ‘harsh’ policies

https://www.scmp.com/tech/big-tech/article/3272437/chinese-suppliers-storm-temu-office-guangzhou-protest-over-harsh-policies?utm_source=rss_feed

Hundreds of Chinese suppliers on Temu, the overseas shopping app run by PDD Holdings, staged a protest at the e-commerce giant’s office in Guangzhou, alleging unreasonable platform policies, according to merchants and local Chinese media reports.

Dozens of protesters stormed the PDD office on Monday afternoon, according to video clips posted on social media and confirmed as authentic by merchants. The Chinese media outlet, Yi Magazine, reported on Tuesday that about 80 merchants entered the PDD office on Monday, but left after police intervened.

It is not the first time merchants have protested against Temu. In a statement issued on Tuesday, the company said that “a group of merchants gathered at the office of a Temu logistics affiliate in Guangzhou” recently.

“They were unhappy with how Temu handled after-sales issues related to the quality and compliance of their products, disputing an amount worth several million yuan,” the statement said, without referencing the July 29 protest.

“These merchants have declined to resolve the disputes through the normal arbitration and legal channels stated in the seller agreements. The situation is stable, and the company is actively working with the merchants to find a solution,” Temu said

PDD’s stock price lost 2.5 per cent in New York overnight.

The actions by Chinese suppliers could add to the uncertainty around Temu, which is facing other risk factors such as strict import duties imposed by the US and European Union. Temu competes against Shein and TikTok Shop, as well as Alibaba Group Holding’s AliExpress, in selling made-in-China products directly to overseas buyers. Alibaba owns the South China Morning Post.

Temu is expanding its sales outreach to consumers in the US and other overseas markets, offering products such as US$6.92 dresses and US$3.99 sandals. But many Chinese suppliers complain that the platform has set harsh terms, including hefty “fines” if customers complain or request refunds. Temu allows consumers to keep refunded items due to the high cost of cross-border logistics, but some merchants said they have not received any reimbursement in these cases.

One Guangzhou-based merchant, who did not attend the protest on Monday, said he was told about the incident by his peers, adding that he regarded himself as a “victim” of Temu’s policies. The merchant, who declined to be identified, said he had 40 million yuan (US$5.5 million) turnover on the platform last year, but Temu deducted a “fine” of 3 million yuan due to customer refunds and complaints, which wiped out almost all his profits.

The merchant said when a post-sale issue arises, Temu gives a refund to customers and lets them keep the product, while fining the seller at over double the price for the after-sale problem. He noted that as sales increased, fines also rose. He does not see much chance of getting his money back.

A second merchant, who also declined to be identified, said PDD is yet to provide a solution for the merchants’ complaints. In his case, he sold about 800,000 yuan worth of products on Temu, but the platform has withheld around 300,000 yuan for fines and refunds.

A Shenzhen-based mobile phone seller said he had incurred losses of around US$80,000 on Temu, including fines and unpaid funds for sold products. In addition, the merchant said he suffered a loss equivalent to around 200 units of smartphones due to Temu’s no-return refund policy, and he is still waiting for this money. The merchant noted that Temu can fine merchants up to five times the product’s sales value.

EU disputes China claim that it supports Beijing’s proposal to end Ukraine war

https://www.scmp.com/news/china/diplomacy/article/3272380/eu-disputes-china-claim-it-supports-beijings-proposal-end-ukraine-war?utm_source=rss_feed

Brussels sources have pushed back against China’s claims that the EU’s top diplomat “attaches great importance” to a Sino-Brazilian statement on ending the war in Ukraine, stating he did not say such a thing.

Josep Borrell met Chinese Foreign Minister Wang Yi on the margins of an Asean summit in Laos on Friday.

A foreign ministry statement released shortly afterwards said: “The EU attaches importance to the peace initiatives of China and Brazil on the political solution of the Ukrainian crisis.”

Senior EU sources said Borrell did not use those words. A statement from the bloc’s External Action Service later in the day tried to correct the record.

“Josep Borrell asked China to use its influence on Russia to contribute to ending the war,” said the statement, which was published in both English and Chinese.

“He asked China to support the Ukrainian peace process and believed that the joint statement between China and Brazil in May 2024 did not move in this direction,” it added.

The behind-the-scenes pushback highlights the sensitivity of the issue: while Brussels continues to ask for Beijing’s help in ending the war, launched by a Russian military invasion in February 2022, it fears China is moving ever closer to Moscow.

“Josep Borrell outlined the EU’s characterisation of Russia’s war on Ukraine as an existential threat to all of Europe and expressed concern about China’s massive exports of dual-use goods and items to support Russian military hardware,” Brussels’ account said.

While discrepancies in diplomatic records are common, they are rarely egregious enough to cause major outcry. In Europe, the Chinese foreign ministry is widely seen to publish its statements quickly to help steer the narrative.

Some governments have tried to counter this. For example, a concerted effort emerged last year when touring Eurasian affairs diplomat Li Hui visited Warsaw to push the Polish version out first, so that journalists would not rely on Beijing’s take of events to guide their stories.

In the latest instance, China’s foreign ministry has hit an especially sensitive European nerve. Beijing claims it is neutral in the war, but is broadly seen in the West to have sided with Russia in the first major armed conflict on European soil in a generation.

Shipments of dual-use items to Russia have escalated in recent months, various research papers have shown, while both Kyiv and Brussels accused Beijing of trying to “sabotage” a Ukraine-backed peace summit in Geneva last month.

In the run-up to the summit, the Chinese foreign ministry was phoning embassies in Beijing to promote an alternative Sino-Brazilian proposal.

That plan would see Russia’s security claims represented, Moscow given a seat at the table and “fair discussion of all peace plans”, EU sources said.

Europeans, meanwhile, have backed Ukraine to the hilt rhetorically, diplomatically and financially.

A senior EU official said the read-out of last week’s bilateral summit was the “most serious effort” they had noticed in Beijing’s attempt to set the narrative.

A second diplomatic source accused the Chinese foreign ministry of trying to “put words in Europe’s mouths”.

The development comes as China’s point man on Ukraine, Li Hui, embarks on his latest shuttle diplomacy aimed at pitching the country as a mediator in a war that has run well into its third year.

On this trip, Li will visit Brazil, South Africa and Indonesia “to further exchange views with members of the Global South and accumulate conditions for restoring peace talks”, according to Wang Lutong, the foreign ministry’s top Europe official, who posted on X, formerly Twitter.

Ukrainian Foreign Minister Dmytro Kuleba visited China last week for talks with Wang, as well as Guangdong provincial officials, before a meeting with Hong Kong Chief Executive John Lee Ka-chiu.

“I am convinced that a just peace in Ukraine is in China’s strategic interests and China’s role as a global force for peace is important,” Kuleba told Wang, according to Kyiv’s version of the meeting, which said he also briefed the veteran Chinese diplomat on the Swiss peace talks.

In Beijing’s official statement, Kuleba “attaches importance to China’s opinions and has carefully studied the ‘six-point consensus’ reached by China and Brazil on the political solution to the Ukrainian crisis”.

“Ukraine is willing and ready to engage in dialogue and negotiations with Russia,” read China’s account. “Of course, the negotiations should be rational and substantive, aiming to achieve a just and lasting peace.”

‘Signal to China’: US military command upgrade in Japan mark of commitment to region, analysts say

https://www.scmp.com/week-asia/politics/article/3272455/signal-china-us-military-command-upgrade-japan-mark-commitment-region-analysts-say?utm_source=rss_feed

The upgrading of the command and control of US forces in Japan will allow both countries to better deal with “fluid circumstances” and sends a “powerful geopolitical signal to China” on the strength of Washington’s commitment to Tokyo and the region, according to observers.

On Sunday, US and Japanese defence chiefs and top diplomats agreed at the Japan-US Security Consultative Committee in Tokyo, known as the “2+2” security talks, to further bolster military cooperation by upgrading the command and control of American forces in the East Asian country.

US Secretary of State Antony Blinken and Defence Secretary Lloyd Austin and their Japanese counterparts, Yoko Kamikawa and Minoru Kihara, also agreed to strengthen American-licensed missile production in Japan, describing the rising threat from China as “the greatest strategic challenge”.

Japan is home to more than 50,000 American troops, but the commander for the US Forces Japan headquartered in Yokota in the western suburbs of Tokyo, tasked with managing their bases, has no commanding authority.

The change in plans will give the USFJ greater capability while still reporting to the US Indo-Pacific Command in Hawaii.

Austin said the command upgrade “will be the most significant change to the US Forces Japan since its creation and one of the strongest improvements in our military ties with Japan in 70 years”.

“We are standing at a historic turning point as the rules-based, free and open international order is shaken to the core,” Kamikawa said. “Now is a critical phase when our decision today determines our future.”

In the joint statement issued after the talks, the ministers said China’s foreign policy “seeks to reshape the international order for its own benefit at the expense of others” and that “such behavior is a serious concern to the alliance and the entire international community and represents the greatest strategic challenge in the Indo-Pacific region and beyond”.

Ryo Hinata-Yamaguchi, an assistant professor of international relations at the University of Tokyo, said the joint command allowed the United States and Japan to work in a much more coordinated and efficient manner.

Together with efforts undertaken with South Korea, the upgraded alliance puts the US, Japan, and South Korea “in a better position to deal with the fluid circumstances in the Indo-Pacific”, he added.

“However, we can expect China, North Korea, and Russia to take their own disruptive measures,” Hinata-Yamaguchi warned.

On Sunday, defence chiefs from the US, Japan and South Korea agreed to a landmark security cooperation framework to institutionalise their trilateral defence ties through efforts such as real-time sharing of North Korean missile warning data and joint military exercises.

Benjamin Ascione, lecturer at the Graduate School of Asia-Pacific Studies in Waseda University, said the new military command was significant as it “sends a powerful geopolitical signal to China about the strength of the US commitment to Japan and the region”.

Apart from aligning with Japan’s own military plans and a coordinated US-Japan approach to defence modernisation, the joint command will strengthen the integration of the two countries’ forces in planning, exercises, and potential combat operations.

Noting that the command structure addressed long-standing concerns about the viability of controlling operations from Hawaii “in a conflict scenario where communications might be disrupted”, Ascione said the actual impact of the new military command would depend heavily on how related issues were tackled.

These include the size and capabilities of the command, its specific powers and authority, and the degree of cooperation with other regional allies such as Australia and the Philippines.

Ascione added that the command paved the way for strengthening Japanese roles and burden-sharing in the alliance, which was a key attack on the alliance raised during the previous administration.

During Donald Trump’s administration from 2017 to 2021, the then US president often said Japan was not paying more for its own defence and security.

Former defence secretary Mark Esper, who served under Trump, said in April that if Trump returned to the White House, he could call on Japan to increase defence spending beyond the 2 per cent of gross domestic product Tokyo had promised.

Prime Minister Fumio Kishida pledged in November 2022 to increase his country’s defence budget to around 2 per cent of GDP starting April 2027.

Ascione said diplomatic efforts remained indispensable, as deterrence alone could not ensure regional stability.

“The military upgrade should be viewed as complementary to, not a replacement for, robust diplomatic engagement with China,” Ascione said.

Yoichiro Sato, a professor of Asia-Pacific studies at Japan’s Ritsumeikan Asia Pacific University, said the bilateral cooperation to strengthen missile production in Japan increased efficiency for the US as it was able to utilise dual-use technology of Japanese firms in defence production.

“Japanese firms benefit from an improved scale of economy in defence production, as weapons systems are increasingly standardised between the US and Japan,” Sato said, noting that the joint statement also specified its focus on the Southwestern Island Chain, a chain of Japanese islands that stretched southwest from Kyushu to Taiwan.

The statement said Japan’s own efforts in the Southwest Islands, combined with alliance exercises, training, posture and other defence-related activities, were expected to enhance “deterrence and response capabilities in this critical region”.

The statement also pointed to greater technical cooperation in areas including cyber, space, electromagnetic and information warfare, Sato noted.

Describing the US-Japan alliance as the “linchpin” of US strategy towards the Indo-Pacific, Sato said the alliance helped anchor US commitments to the region’s security against isolationist voices within the US and in case Washington diverted its attention elsewhere to conflict regions such as the Middle East.

“Given the highly contested rivalry between the US and China, the role Japan plays is a stabilising one for the region,” he added.

However, Chinese state tabloid the Global Times said in an article on Sunday that the boosting of military cooperation between the US and Japan reflected Washington’s intention of “using Japan as an outpost in the Asia-Pacific region to boost its nuclear deterrence to contain countries such as China”.

“[It is also aimed at] elevating the role of the Japan Self-Defence Forces in the US-Japan military alliance,” the daily said.

Citing Chinese analysts, the paper said “this will put Tokyo in the front line of a counter-attack from other countries, including a nuclear conflict”, adding that the enhanced US-Japan alliance was “likely [to] provoke a new round of arms race in tactical nuclear weapons in the region”.

China actress Xue Jianing who became a ‘nun’ blossoms after split with star actor Hu Ge

https://www.scmp.com/news/people-culture/china-personalities/article/3272400/china-actress-xue-jianing-who-became-nun-blossoms-after-split-star-actor-hu-ge?utm_source=rss_feed

Chinese actress Xue Jianing is frequently referred to as the ex-girlfriend of renowned Blossoms Shanghai actor Hu Ge, but she has blossomed very well on her own without him.

Xue, 45, is the former lover about whom Hu once said he had “most regrets”. Her name is still mentioned every time he and his wife, whom he married in 2022, appear in the news.

When Xue met Hu in 2004, she was already nationally famous for her role as Ha Mei in the 2002 television series Pink Ladies while Hu had yet to make his name as an actor.

Adapted from Taiwan cartoonist Zhu Deyong’s work of the same name, Pink Ladies was the most-watched show on the mainland and in Taiwan when it was aired.

Xue played the part of a woman with no interest in having a romantic relationship, and was a big fan of Japanese and South Korean pop culture.

Her cute appearance and lively personality were considered a perfect match for the role.

But the actress said she was nothing like her character because she did not follow trends blindly.

Xue was born to an intellectual family in northeastern China’s Heilongjiang province. She began hosting television shows at the age of eight and was a local star.

In 1999, she graduated with a major in performing arts from the Shanghai Theatre Academy, achieving the highest score in her class.

Xue and Hu, who attended the same theatre academy, began dating in 2006.

Hu’s career was in its infancy and he was appearing in the television drama Chinese Paladin which shot him to fame.

In August that year, he was involved in an car accident in which his female assistant died and Hu was left with serious injuries to his face.

Hu later revealed that Xue had stopped working for a year to look after him.

They separated in 2008 soon after Hu had recovered. At the time, he said he believed men should be more successful than women, and he was uncertain about his future, which is why he had broken up with her.

Xue seldom mentioned Hu after their relationship ended.

When Hu became popular again in 2015 for the dramas The Disguiser and Nirvana in Fire, Xue responded to media requests by saying: “I will not take advantage of his popularity.”

Xue later developed faith in Buddhism.

In 2017, she announced on Weibo that she had completed the five Buddhist paths – a demanding practice believed to lead to spiritual awakening – after a year, and that the religion had helped her “see things more clearly.”

During that time, she was in Tibet and living in a temple, leading some to speculate that she had become a nun for a short period.

She continued to believe in Buddhism after that and often practises meditation.

Xue remains unmarried and continues to appear in television series and theatre plays once in a while.

Although she said she enjoys the challenge of different kinds of roles, Xue said she is not interested in the trappings of fame or fortune.

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China’s Politburo pledges support, sending stronger-than-expected signal to boost economy

https://www.scmp.com/economy/global-economy/article/3272435/chinas-politburo-pledges-support-sending-stronger-expected-signal-boost-economy?utm_source=rss_feed

China has vowed to step up macro policies and stabilise market confidence to ensure it achieves leaderships’ full-year economic growth goal as the economy faces “increasing negative influence” from the outside world and insufficient demand at home.

The top leadership signalled more support for emerging sectors, vowed to unleash more domestic demand, and warned against “vicious competition” among local companies, according to a meeting on Tuesday of the Chinese Communist Party’s 24-member Politburo, the party’s top decision-making body led by President Xi Jinping.

The country will make unwavering efforts to keep economic growth at around 5 per cent after official data showed the recovery momentum slowing in the second quarter, leaders said at the meeting – a traditional midyear review of the economy during which leaders set the rest of the year’s policy agenda following the third plenum, which set medium to long-term goals.

More to follow ...

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How can China’s ultra-long-term special government bonds get its economic gears turning?

https://www.scmp.com/economy/economic-indicators/article/3272348/how-can-chinas-ultra-long-term-special-government-bonds-get-its-economic-gears-turning?utm_source=rss_feed

Against the backdrop of weak economic growth and subdued domestic demand, around 300 billion yuan (US$41.3 billion) worth of ultra-long-term special government bonds – being allocated to support industrial-equipment upgrades and a consumer goods trade-in programme – will play a crucial role in stabilising China’s economy in the second half of the year, according to analysts.

China’s 4.7 per cent economic growth in the second quarter has made leadership’s “challenging” annual-growth target of around 5 per cent more precarious, and the issuance of government funds is among the policy roll-outs being employed in an amped-up effort to boost demand and promote growth, according to Lu Zhe, chief economist at Founder Securities.

“Assuming that the 300 billion yuan fund can drive … 300 billion to 900 billion yuan worth of additional investment in the second half of the year, this could boost nominal economic growth by 0.4 to 1.3 percentage points in the second half, showing a significant impact,” Lu said in a report published on Friday.

China’s state planner and the Ministry of Finance said last week that approximately 148 billion yuan will be earmarked for updating equipment in key sectors and for scrapping and renewing old operational ships, while 150 billion yuan will be designated for renewals of old trucks, agricultural machinery, new-energy buses, automobiles and trade-ins of household appliances.

According to a report published on Sunday by GF Securities analyst Wang Dan, an estimated 100 billion yuan will be allocated for consumer product trade-ins. And with the 15 to 20 per cent household-appliance subsidy rate, and a passenger-car subsidy rate roughly estimated to be between 10 and 13 per cent, the 100 billion yuan could boost consumption by 666.7 billion to 769.2 billion yuan.

It will also boost both total retail sales and the portion of consumer spending in GDP by around 1.4 to 1.6 percentage points, Wang said.

“Assuming the policy effects are fully realised, and based on the 2023 ratio of consumer spending to nominal GDP at 39.2 per cent, the theoretical impact [of the 100-billion-yuan ultra-long-term bond] on nominal growth would be around 0.6 percentage points,” Wang explained.

China has been grappling with weak domestic demand, with growth levels in retail sales and fixed-asset investments, as well as real estate investment, continuing to disappoint.

China has banked on industrial and equipment upgrades and consumer goods to revive its sluggish economic growth, but business and consumer confidence has remained tenuous while many people – faced with uncertain employment prospects and potential pay cuts and lay-offs – have grown increasingly careful about spending their hard-earned money.

China’s central bank cut several key rates last week, with more policy easing expected to come amid a greater determination by Beijing to shore up the nation’s economic activities.

In addition, it is estimated that 200 billion yuan of the 300 billion ultra-long-term bond total will be allocated to corporate industrial equipment upgrades, which could drive investment of around 1 trillion to 2 trillion yuan, boosting fixed-asset investments by 2 to 4 percentage points, according to estimates in the GF Securities report.

“Given the lack of local infrastructure projects and the slow progress of special bond issuance in the first half of the year, investing in equipment upgrades and trade-ins should yield higher marginal benefits,” the report said. “Implementing this policy will be conducive to economic growth in the second half of the year.”

Mainland China and Taiwan reach deal to resolve crisis over fishing crew deaths near Quemoy

https://www.scmp.com/news/china/politics/article/3272410/mainland-china-and-taiwan-reach-deal-resolve-crisis-over-fishing-crew-deaths-near-quemoy?utm_source=rss_feed

Mainland China and Taiwan have reached a deal over the deaths of two mainland fishermen in February, agreeing to compensate the victims’ families and repatriate the bodies of the two men.

The agreement broke a political stalemate and ended months of finger-pointing between the two sides, which had not officially met to resolve the incident since March.

The men drowned after their boat capsized during a chase by the Taiwanese coastguard in waters off the Taiwanese defence outpost of Quemoy, also known as Kinmen, on February 14.

Mainland and Taiwanese officials met soon after the incident, holding 15 rounds of talks, but the negotiations stalled in March.

The incident added fuel to the flames of cross-strait relations, with the Taiwanese coastguard accusing the men of trespassing in restricted waters and mainland officials accusing the island’s authorities of “rough dispersal of the fishing boat”.

However, the mainland and Taiwan signed an agreement on the return of the bodies and their vessel and compensation.

“It has been over five months since the incident occurred. The two sides have finally reached consensus in their negotiations,” said Li Zhaohui, deputy director of the Quanzhou Taiwan Affairs Office.

“We hope that the relevant parties in Taiwan will actively implement the agreed-upon terms, to bring peace to the victims and their families.”

The agreement was witnessed by members of the affected families, in the presence of Li and Xu Weiwei, from the Association for Relations Across the Taiwan Straits.

Taiwan Coast Guard Administration deputy director General Hsieh Ching-chin was among the Taiwanese officials who took part in the talks at the Jinhu Hotel in Quemoy.

However, the two sides have yet to disclose the details of the terms. When asked, Hsieh said only that an agreement was reached after Tuesday’s talks, and that the atmosphere of the talks was nice.

The agreement comes after signs of progress earlier this month, when TAO spokeswoman Zhu Fenglian said the two sides were in touch on the matter and hoped the issues “can be properly resolved through negotiation”.

Discussions were scheduled last week but postponed because of Typhoon Gaemi.

The talks were a rare instance of direct discussions between officials from both sides. Beijing cut off communication with Taipei in 2016 in protest over the decision by Taiwan’s then leader Tsai Ing-wen not to acknowledge the one-China principle – something Beijing regards as the foundation for any talks.

Liang Wen-chieh, vice-chairman of Taiwan’s Mainland Affairs Council, described the talks as “between the parties involved” rather than “official-to-official”.

Prospects for an improvement in cross-strait relations remained dim after William Lai Ching-te, of the independence-leaning Democratic Progressive Party and a man branded by Beijing as a “troublemaker”, was elected to succeed Tsai as Taiwan’s leader.

Beijing sees Taiwan as part of China to be reunited by force if necessary. Most countries, including the United States, do not recognise Taiwan as an independent state. However, Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons.

US boosting alliance with the Philippines with military funding and pact amid concern over China

https://apnews.com/article/united-states-philippines-antony-blinken-lloyd-austin-e8bc7af9b5a60f51cf60ffcf22748836Philippine President Ferdinand Marcos Jr., center, greets U.S. Secretary of State Antony Blinken, left, and U.S. Secretary of Defense Lloyd Austin at the Malacanang presidential palace in Manila, Philippines on Tuesday, July 30, 2024. (AP Photo/Basilio Sepe, Pool)

2024-07-30T01:47:55Z

MANILA, Philippines (AP) — Washington’s top diplomat and defense chief, in Manila for talks Tuesday, will announce $500 million in military funding to boost Philippine defenses and progress in a proposed military pact, given that China’s increasingly aggressive actions in the region “will not stop,” a Philippine official said.

U.S. Secretary of State Antony Blinken and Defense Secretary Lloyd Austin called on President Ferdinand Marcos Jr., who has fortified Manila’s decades-old treaty alliance with Washington as hostilities between Philippine and Chinese forces flared since last year in the disputed South China Sea.

Marcos welcomed Blinken and Austin, praising the “very open” communication lines between Washington and Manila so that their treaty alliance and the issues on the South China Sea and the Indo-Pacific region “are continuously examined and reexamined so we are agile in terms of our responses.”

Blinken, along with Austin, expressed their condolences over the dozens of deaths wrought by typhoon-worsened monsoon rains in recent weeks and offered U.S. assistance.

Blinked said there was “really evidence of a steady drumbeat, very high-level engagements between our countries that are covering the full range of issues and opportunities that bring us together, not only security but also economic.”

Marcos has underscored the need for a U.S. military presence for Asian stability and peace.

The Philippines and China last week reached a temporary arrangement to prevent clashes like the violent faceoff between their forces on June 17 in the Philippine-occupied Second Thomas Shoal. Philippine forces transported food and other supplies and a fresh batch of navy personnel Saturday to Manila’s territorial outpost at the shoal, which has been closely guarded by Beijing’s forces, but no confrontations were reported for the first time.

The Philippines, however, would continue strengthening its territorial defense with the assistance of the U.S. and other friendly military powers and build new security alliances, Philippine Ambassador to the U.S. Jose Manuel Romualdez said.

“The non-confrontational resupply and rotation is purely temporary. The People’s Republic of China will not stop and we are determined just as well,” Romualdez told The Associated Press.

The $500 million in U.S. military financing to be announced by Austin in Manila would include funding for various Philippine navy equipment. About $125 million would be used for constructions and other improvements in areas within Philippine military bases to be occupied by U.S. forces under the 2014 Enhanced Defense Cooperation Agreement of the longtime treaty allies, Romualdez said, adding that the funds were approved with strong bipartisan support in the U.S. Congress.

The U.S. military funding may double next year “depending on our capacity to absorb it.” Romualdez said.

Progress in negotiations on a proposed military pact, the General Security of Military Information Agreement would also be high in the agenda of the talks between Austin and Philippine Defense Secretary Gilberto Teodoro Jr., Romualdez said.

The agreement, which Washington has forged with other allied countries, would allow the U.S. to provide high-level intelligence and more sophisticated weapons, including missile systems, to the Philippines with an assurance that such intelligence and details about sophisticated weapons would be closely kept secret in a highly secured manner to prevent leaks, a Philippine official told AP on condition of anonymity because of a lack of authority to discuss the issue publicly.

Philippine efforts to obtain sophisticated weapons from the U.S. military in the past, including during a major siege of Islamic State group-aligned militants on the southern Islamic city of Marawi in 2017, have been hampered by the lack of such agreement, the official said.

Meanwhile, Romualdez said, “absolutely,” that U.S. support to the Philippines would not change regardless of who becomes America’s next president. Numerous countries have expressed concerns about the implications of former President Donald Trump returning to the White House in January after President Joe Biden withdrew and threw his support to Vice President Kamala Harris.

“Both Republicans and Democrats are in full agreement for the Philippines,” he said, adding that both sides have given their assurances of continued support to Manila.

In his meeting with Blinken and Austin, Marcos alluded to the intense political issues in the U.S. ahead of the presidential elections this year.

“I’m a bit surprised considering how interesting your political situation has become back in the States, but I’m glad that you found the time to come and visit with us,” Marcos said.

Marcos approved last year an expansion of U.S. military presence in four more Philippine military camps under the 2014 defense agreement and the largest war drills between Filipino and U.S. forces have been staged under his administration in the country, drawing opposition and alarm from China, which said that increased deployments of American forces would endanger regional peace and security.

Marcos, Teodoro and the Philippine military have responded to that by saying the Philippines has the right to move to safeguard its territorial interests and national security.

___

Lee reported from Singapore.

JIM GOMEZ Gomez is The AP Chief Correspondent in the Philippines. twitter mailto

Here are China’s 4 commercial jets, from the ARJ21 and C919 to the jumbo C929 and C939

https://www.scmp.com/economy/economic-indicators/article/3272330/here-are-chinas-4-commercial-jets-arj21-and-c919-jumbo-c929-and-c939?utm_source=rss_feed

The state-owned Commercial Aircraft Corporation of China (Comac) has put two types of civilian jets in the air and two bigger ones on the drawing board after 22 years of work.

Comac aims to advance China’s goal of technological self-sufficiency and sell its aircraft overseas. The Shanghai-based manufacturer seeks to compete largely with Airbus and Boeing, because their aircraft have similar specs.

Here is a dossier on each of the four aircraft types:

The ARJ21 covers a series of turbofan aircraft for 78 to 97 seats and relatively short flights of 2,225 to 3,700km (1,382-2,299 miles) – far enough to fly popular domestic routes in China. ARJ stands for “advanced regional jet”.

ARJ21 development started in 2002, and the aircraft flew six years later. Regional carrier Chengdu Airlines began using the aircraft – China’s first for civilian use – in 2015, and TransNusa Airlines of Indonesia has bought the planes since 2022. An estimated 100 have been sold altogether.

Comac reported a combined 200,000 flight hours for this aircraft type as of March last year, according to the CAPA Centre for Aviation market research organisation.

The ARJ21 compares in size to the defunct Boeing 717, the retired McDonnell Douglas MD 80-90 line of planes, and the Embraer E190-E2 model.

McDonnell Douglas manufactured in Shanghai before merging with Boeing in 1997, and Comac has used MD90 tooling for ARJ21 assembly. General Electric supplies the Chinese plane’s twin CF34 engines, and Ukrainian planemaker Antonov designed the wings.

The still-flying Embraer planes can take 106 passengers and fly as far as 5,278km per trip.

C919 narrowbody planes can fit 158 to 192 seats and fly from 4,075 to 5,555km. After 15 years of research, the plane debuted in May 2023 as part of the China Eastern Airlines fleet. Comac has received at least 300 orders this year from major Chinese airlines.

Many key parts of the C919 are said to be made by American or European suppliers.

Its engine, for example, is produced by CFM International, a joint venture between GE Aerospace of the US and France’s Safran Aircraft Engines.

The C919 compares most closely to the Airbus 320 and Boeing 737 lines of aircraft.

Planes in the A320 series can seat 140 to 180 passengers and can fly 6,300km in one journey. Boeing 737s hold 138 to 230 seats and fly 5,954 to 7,084km.

Comac says it is working on a twin-aisle plane, the C929, for as many as 290 passengers. It would be able to fly as far as 12,000km in one trip. The distance from Beijing to New York is about 11,000km.

Airlines could take deliveries of this model as soon as 2027.

The aircraft firm said last month that it was scouting for experts across industries to build the C2929 with made-in-China parts and technology.

It is not yet clear how Comac will source other parts for the aircraft, said Eric Lin, head of Greater China research with UBS in Hong Kong.

Comac has completed an agreement for the construction of metals, composites and components for the C929 aircraft in a deal with Hunan Aerospace Huanyu Communication Technology at no more than US$175 million, according to a stock market filing.

The C929 would compare closest to the Airbus A350 and Boeing 787 aircraft families in terms of maximum flight distances, Lin said. A350 models can take 300 to 350 passengers on flights up to 15,000km. Boeing 787 models can fly 13,600 to 14,600km and carry 242 to 290 passengers.

China has worked out preliminary designs for this giant plane, though it could take years before Comac develops a testable prototype, a source familiar with the aircraft maker’s work told the Post.

The C939 will be a widebody, twinjet airliner similar to the Boeing 777, said Mayur Patel, the Asia head for industry data platform OAG Aviation. It would have the capacity for 400 seats and a range of 13,000km, he said.

Boeing 777 can seat 301 to 368 passengers and fly 9,700 to 15,840km.

It is too early to know where Comac would source parts, but China is working separately on its first turbofan commercial aircraft engine, the CJ1000.

Deliveries of the C939 will not start for at least 10 years, and will occur only if Comac has “adequate resources” with mostly imported components, said Richard Aboulafia, managing director of the US-based aerospace consultancy AeroDynamic Advisory.

Southeast Asia seen to ‘tick all the boxes’ as China seeks C919 buyers

https://www.scmp.com/economy/china-economy/article/3272326/southeast-asia-seen-tick-all-boxes-china-seeks-c919-buyers?utm_source=rss_feed

For China, its skies are not vast enough to accommodate the ambitions for its home-grown passenger jets.

It wants Chinese jets to spread their wings and go further, but for now, its desire remains aspirational at best, despite having made a small breakthrough in the Southeast Asian region that is seen to offer great potential.

The Commercial Aircraft Corporation of China (Comac) has been flooded with domestic orders for its home-grown narrowbody C919, and while these have shed light on its production capacity, the state-owned manufacturer is already plotting a course for the jet’s overseas expansion to nibble at the duopoly held by Airbus and Boeing.

The harsh reality is that a lack of a crucial certification from aviation regulators in Europe or the United States, as well as widespread geopolitical problems, may threaten to ground Comac’s high hopes for the C919, which is viewed as a potential challenger to the Boeing 737 and Airbus A320 families of aircraft.

But it is Southeast Asia that offers hope, with Jakarta-based airline TransNusa already firmly on the radar, while Brunei and the Middle East are also being explored.

“I expect TransNusa to stay loyal to Comac and it will eventually take the C919, as it needs larger jets to grow and compete effectively,” said Shukor Yusof, founder of Singapore-based aviation consultancy Endau Analytics.

“I wouldn’t be surprised if a firm order is placed within the next two years.”

Comac’s team in Jakarta, which is helping TransNusa train pilots, aims to replicate the success of the two Comac ARJ21 regional jets, which have been criss-crossing the Indonesian archipelago for a year.

A third ARJ-21 also arrived in Jakarta in May and is being primed to start service, with Yusof expecting Comac to offer discounts and incentives as TransNusa nudges closer to more deals as its existing fleet is ageing.

“While they keep buying from Airbus or obtaining second-hand jets from others, it will explore options with Comac regarding the C919,” he added.

Other than the ARJ21, TransNusa’s fleet includes four A320s, which have an average age of 18 years, and it may need to buy new planes to maintain trunk routes from its base in Jakarta to Singapore, Kuala Lumpur and Chinese hubs including Guangzhou.

The China Aircraft Leasing Group, which is under the umbrella of the state-owned financial conglomerate China Everbright Group, is also a stakeholder in TransNusa.

In June, Everbright renewed its own strategic partnership with Comac that had first been agreed in 2018, and the link could play a role in brokering and assisting with future deals.

TransNusa did not respond to Post’s request for comment.

Comac’s Jakarta team, though, is eyeing more than just TransNusa, with a forecast from the Airports Council International predicting Indonesia would be the world’s fourth-largest market by traffic by the 2040s after China, the United States and India.

Indonesia, which is the largest and most populous economy in Southeast Asia, was the world’s 13th-largest aviation market last year and largest within the Association of Southeast Asian Nations bloc.

And although Western endorsement is not a must, as seen in the case of the ARJ21, approval from the authorities in Jakarta is still needed for the C919 to fly in Indonesia, which has built rapport with China on transport and infrastructure cooperation.

It took two years for ARJ21 to be certified in Indonesia, with the inaugural flight from Jakarta to Bali taking place in April 2023.

Comac is also eying Brunei as another launch pad having signed a US$2 billion deal with start-up carrier GallopAir for 30 aircraft, including the C919, in September.

GallopAir, which is owned by China’s Shaanxi-based Tianju Investment Group, hopes to start operations by the end of 2024.

GallopAir CEO Cham Chi said in February, according to Reuters, that the carrier had already applied for certification for the C919 from regulators in Brunei.

“[The opportunity in Southeast Asia] may last for several years, and it’s wise for Comac to pitch the C919 to small carriers that are more nimble to explore new aircraft types,” said Zhang Xin, the Swire professor of aerospace engineering at the Hong Kong University of Science and Technology.

“From trade ties, geographic proximity to market potential, Southeast Asia’s vibrant new carriers tick all the right boxes.”

Zhang said Boeing’s accident-prone 737 series could add to the appeal of the C919, while Airbus is hamstrung by capacity constraints.

“I’d say it's a leg-up for the C919, when the two rivals you strive to take on are marred in woes, and Southeast Asia is seeing a new breed of airlines,” added Zhang, who was formerly the Airbus professor of aircraft engineering and director of the Airbus Noise Technology Centre at the University of Southampton.

The Middle East is also on Comac’s radar, with president He Dongfeng visiting Saudi Arabia in May and holding talks with national carrier Saudia.

“Passengers from Asia and Europe heading for the Arabian Peninsula and Africa may first fly to hubs like Dubai, Doha or Riyadh and then transfer to flights on narrowbodies to reach their final destinations … It’s another potential market for the C919,” added Zhang.

But other issues may threaten to clip the wings of the C919 as other regions are unlikely to embrace the Chinese jet.

“The geopolitical reality means it will be difficult for the C919 to be certified in Europe or America any time soon,” warned a report by Renmin University’s Economy and Diplomacy Research Institute published in February.

“Other than the West, Japan, South Korea and India are unlikely to open up their skies.”

Nathaniel Sher, a senior researcher at Carnegie China, said Beijing may leverage diplomatic influence and trade ties to entice foreign buyers and that the Civil Aviation Administration of China (CAAC) could form partnerships with its foreign peers as it seeks overseas certification for the C919.

“Several of Comac’s early international customers maintain direct connections to Chinese investors … and Indonesia certified the ARJ21 with the CAAC’s help,” Sher said.

But he cautioned that supply chain disruptions could influence potential customers due to geopolitical risks.

“It’s among several risks that international customers must consider when deciding whether to buy and operate the C919,” Sher added.

China bank staff solves cash jigsaw puzzle after depressed woman cuts bills into 100,000 pieces

https://www.scmp.com/news/people-culture/trending-china/article/3272395/china-bank-staff-solves-cash-jigsaw-puzzle-after-depressed-woman-cuts-bills-100000-pieces?utm_source=rss_feed

A bank in China has been praised for repairing banknotes that were cut into more than 100,000 pieces by a woman suffering from depression.

The task of piecing together 32,000 yuan (US$4,500) worth of banknotes took four employees more than 20 days to complete.

A woman, surnamed Zhang, brought the cash into the Industrial and Commercial Bank of China (ICBC) in Kunming, Yunnan province, southwestern China, in June, the Beijing Youth Daily reported.

She said that, five years before, the money had been cut up by her sister-in-law who had been struggling with mental health issues and who had recently died.

Zhang’s brother is now a widower with four children living in a mountainous village in Sichuan province in the southwest of the country.

The family is impoverished and desperately needed the money.

They took the fragments to some local banks, hoping it could be converted into intact banknotes.

Although China’s regulations stipulate banks should exchange incomplete or stained banknotes for free, the banks Zhang’s brother visited all turned down his request, saying it was too much trouble for them to piece the fragments together.

When Zhang visited her brother’s family in Sichuan, he asked if she could take the damaged money to Kunming to exchange it.

“My brother’s life is not easy, and if the money could be exchanged it would be a big help to them, so I decided to try my luck,” Zhang said.

What she did not expect was that an ICBC branch immediately agreed to help her by repairing the money.

The bank assigned four employees to piece together the damaged notes.

“It is the first time we have seen so many fragmented notes. There are more than 100,000 pieces with some even smaller than a fingernail.

“There are three types of currency with different patterns,” one of the workers said, adding: “We were quite confused at first.”

She said they used magnifiers to identify the broken pieces during the task, which took 22 days of intensive work.

Finally, they managed to splice together notes with a combined value of 32,000 yuan.

Zhang sent a tailor-made silk banner to the bank to thank the staff.

“Take people’s difficulties into consideration, solve problems and warm hearts,” the Chinese characters on the banner read.

The incident attracted a wave of compliments about the bank on mainland social media.

“Thumbs up for the bank. They are so compassionate towards ordinary people,” one person said on Douyin.

“How hard-working the bank staffers are. They might get depressed after dealing with so many damaged notes,” said another.

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Fear and ambition: why the South China Sea is so important to Beijing

https://www.scmp.com/news/china/diplomacy/article/3272302/fear-and-ambition-why-south-china-sea-so-important-beijing?utm_source=rss_feed

Tensions are mounting in the South China Sea – a hotly contested and globally significant waterway that’s become a flashpoint for conflict. In the first instalment of a four-part series we look at why it’s so critical for Beijing.

Boiling tensions between Beijing and Manila have given disputes over the South China Sea new prominence, with analysts warning that hostilities could escalate and regional polarisation may worsen.

Beijing’s approach to asserting its sovereignty claims to most of the waterway – often at the expense of its neighbours – is back in the spotlight, as China increasingly views these territorial disputes through the lens of its rivalry with the US.

It is not just rocks, reefs and resources at stake. The South China Sea is rich in oil, natural gas and fish, but it is also one of the world’s busiest shipping routes, through which more than 20 per cent of global trade passes.

China’s expansive territorial claims in the South China Sea overlap with those of the Philippines, Vietnam, Malaysia and Brunei.

For these smaller neighbours, their sovereign rights, fisheries and economic livelihoods are on the line. For Beijing, it is more about vital shipping lanes, deep-sea exploration, its goal for “reunification” with Taiwan, and even the future regional and global order, analysts say.

While Beijing emphasises its sovereignty over the South China Sea, its maritime interests extend beyond territorial claims, according to a senior researcher from the government-linked Chinese Academy of Social Sciences (CASS), who spoke on condition of anonymity.

But that does not mean China wants to close off the sea route or reclaim every island and reef. “The sea lanes must remain open for trade and commerce, and ensuring freedom of navigation is crucial for China’s outward-oriented economy,” the researcher said.

The South China Sea also serves as a gateway to the deep sea – key to Beijing’s ambition to transform its navy from a coastal defence force into one of the world’s largest blue-water fleets.

Noting the shallow waters of both the Yellow Sea and East China Sea and other unfavourable conditions, the researcher said China “needs to further increase its presence in the South China Sea, which provides a strategic channel for Chinese navy ships and commercial vessels to go out”.

They said the South China Sea was also crucial for the country’s security in the region as it needed the support of neighbouring countries while countering US-led efforts to “encircle and contain” China.

“The significance of maintaining stability in the South China Sea has grown relative to China’s broader strategic interests,” the researcher said. “Given America’s heightened strategic presence in the region, China must also strengthen its own strategic position in the South China Sea.”

Ding Duo, an associate research fellow at the Hainan-based National Institute for South China Sea Studies, also noted the growing significance of the waterway and Beijing’s efforts to maintain stability while “protecting its sovereignty” over contested islands.

China claims sovereignty over four archipelagos in the South China Sea, including the Spratlys and Paracels – known in Chinese as the Nansha and Xisha islands.

But Maria Thaemar Tana, a non-resident fellow at the Stratbase ADR Institute in Manila, said the South China Sea was mainly about strategic control for Beijing.

“The South China Sea provides a buffer zone for China, which is critical given the US presence in the region. Controlling the area increases China’s military power and deters potential threats,” she said.

It also serves as a platform to project power further into the Pacific, an important part of establishing maritime trade routes under Beijing’s Belt and Road Initiative. “Controlling the South China Sea enables China to exert influence over these vital shipping lanes,” Tana said.

But she said an increasingly powerful China with a significant military presence in the region raises security concerns for the Philippines and other Southeast Asian claimants.

“China’s encroachment is seen as a violation of territorial integrity. In addition, fishing and resource extraction are crucial to their economies. China’s dominance puts their access to these resources at risk,” she said.

“Because they lack the military power to directly challenge China, they often rely on allies such as the United States for assistance and a rules-based order to deter Chinese aggression.”

Patrick Cronin, the Asia-Pacific security chair at Hudson Institute in Washington, said China’s interests in the South China Sea were mainly driven by fear and ambition.

“Beijing fears that outside powers might disrupt vital sea lines of communication. This concern is compounded by the prevailing domestic historical narrative that sees the world through the glasses of a century of humiliation,” he said.

Then there are Beijing’s ambitions. “A core PLA mission is to be prepared soon to forcibly unify Taiwan, should [Chinese President] Xi Jinping and the Communist Party deem it necessary,” he said.

According to Cronin, fortified artificial island reef outposts in the Spratly Islands and maritime peacetime confrontation operations against the Philippines are seen as stepping stones towards achieving control over the South China Sea and the so-called first island chain.

Beijing sees the first island chain – which runs from the Japanese mainland through Taiwan and the Philippines – as the first maritime line of defence against the US trying to contain China.

“These ambitions are deemed necessary by Xi to ensure Beijing will be able to act freely to unify Taiwan, a goal portrayed by the party as a prerequisite to national rejuvenation,” Cronin said.

According to Carl Thayer, emeritus professor at the University of New South Wales in Australia, Beijing’s geostrategic interest in the South China Sea has evolved with its ascendance as an economic and military power.

He said a turning point was Beijing’s 2009 submission to the United Nations of its nine-dash line map, and tensions with Hanoi and Manila had escalated “in scope and intensity ever since”.

The Philippines brought an arbitration case against China after Beijing seized Scarborough Shoal, or Huangyan Island in Chinese, in 2012. Four years later an international tribunal dismissed China’s claims.

Beijing refused to participate in the arbitration and rejected the ruling. It has also built six artificial islands in the Spratly archipelago.

Thayer said the future of regional order was at stake as the era of US primacy was challenged by China’s rise.

“First, China seeks to break through the US-dominated first island chain from Japan to the Philippines to shore up its deterrence against nuclear threats from the US,” he said.

“This means expelling US military presence from the Philippines and securing undetected passage of Chinese ballistic nuclear submarines from the mainland or Hainan Island to the western Pacific.”

He said Beijing would also try to disrupt the US alliance network with Japan, South Korea, Australia and the Philippines and the threat this poses to Beijing’s drive to bring self-ruled Taiwan under its control.

“Second, China seeks to negotiate a South China Sea code of conduct with Southeast Asian states that excludes states from outside the region in developing marine resources or engaging in military activities with regional states,” Thayer said.

“The US seeks to contain China by reinforcing its position in the first island chain so it can safeguard Taiwan’s independence by maintaining a military presence in and over the South China Sea as well as in the Philippines and northern Australia.”

He said China’s continued pressure on other littoral states would only raise tensions, intensify regional polarisation and likely scupper negotiations on the code of conduct. “The ball is now in China’s court,” he said.

Shi Yinhong, a professor of international relations at Renmin University in Beijing, said China appeared to have the upper hand over the Philippines with its “grey zone” tactics such as the coastguard’s use of water cannons against Philippine vessels.

But he said these pressure tactics had pushed its smaller neighbours closer to the US, Japan and others.

“China’s actions in the South China Sea have both positive and negative consequences and it’s likely that the negative ones may prevail,” he said.

According to the CASS researcher, what started as territorial disputes between Beijing and several littoral states has morphed into a showdown for regional supremacy between China and the US.

“China has attached unprecedented importance to the South China Sea, mostly as a result of growing global focus on the region and the concerted effort by the US, the Philippines and others [aimed at China],” the researcher said.

“The nature of the issue has transformed significantly, as the South China Sea has become primarily a theatre for the Sino-US strategic competition.”

The researcher said Washington’s Indo-Pacific strategy, launched during the Donald Trump administration, and a statement by Mike Pompeo in 2020 when he was secretary of state were among the biggest drivers behind the shift.

Pompeo marked the fourth anniversary of the 2016 ruling by backing China’s rival claimants in the South China Sea, accusing Beijing of trying to set up a “maritime empire”, and pledging to reject any attempt to impose “might makes right”.

“China is facing a delicate balancing act – it’s actually trying to manage the dispute with restraint and avoid any excessive escalation or a breakdown, which is not in China’s interests at all because heightened security tensions could disrupt regional cooperation,” the researcher said. “The tree wants to remain quiet but the wind simply won’t stop.”

Tana said ideological differences between China and the US would make it difficult to de-escalate tensions or reach any compromises.

Diplomats from China and the Philippines agreed early this month to “control disputes and differences” after eight Filipino sailors were said to have been injured in the worst clash between the two sides in months. The skirmish on June 17 took place near Second Thomas Shoal, known in China as Renai Jiao. The Philippines carried out a resupply mission on Saturday without “untoward incidents” after the two sides on July 21 reached a “provisional arrangement on humanitarian resupply of living necessities” for Filipino troops stationed on a grounded warship at the disputed shoal.

“Domestic pressure and nationalistic sentiments in China and Southeast Asian nations make it challenging to compromise or back down in the dispute,” Tana said. “The region is becoming more divided, with other neighbouring states preferring a neutral position but perceiving the Philippines’ actions as challenging China by bringing in the United States and consequently disrupting the regional balance of power.”

Cronin blamed China’s maritime ambition and the coastguard’s “aggressive and reckless” behaviour for the heightened tensions in the region.

“China wishes to dominate the South China Sea and Southeast Asia, while the United States simply wishes to deny any one power from dominating the region. Beijing wants greater control, while Washington seeks a stable balance of power,” he said.

“These two positions are not necessarily incompatible, but the way China is going about exercising its influence in the South China Sea threatens smaller neighbours and established rules and norms,” he added. “The obvious way to de-escalate is to halt aggressive maritime behaviour and use diplomacy to resolve or at least better manage disputed claims.”

Ling Bing, a professor of Chinese law at the University of Sydney, also said Beijing should also reflect on its failure to prevent Manila from tilting towards Washington under President Ferdinand Marcos Jnr.

“The fact that China failed miserably in this diplomatic game and finds itself now facing an ever stronger US-Philippine alliance is one of the major failures of its foreign policy,” he said.

Ling said it was “a lesson that China must learn before similar debacles occur in relation to other South China Sea powers such as Vietnam and Indonesia”.

He also pointed to a maritime delimitation agreement in the Gulf of Tonkin, signed in 2000 between China and Vietnam, as “an apt example” of how to settle maritime disputes.

“In the appropriate circumstances, China has shown a clear ability and willingness to resolve territorial and maritime disputes with neighbouring states,” he said. “Even in ways that are not advantageous to China.”