Mistral点评

• US sues TikTok and China’s ByteDance over children privacy violations
• Death toll in China bridge collapse rises to 38, with 24 missing
• Hamas chief Ismail Haniyeh’s killing ‘may push Iran to seek closer ties with China’
• US bill to bar ‘cheating’ Chinese solar firms could pass, but counterproductive: analysts
• Temu sellers struggle with disputes amid complex company structure outside China
• China rolls out new rules to help veterans find jobs and start businesses
• Tencent, NetEase win big with Rainbow Six and Marvel video game approvals in China
• US-China trade war could be the death knell for advanced economies
• China court punishes chefs who put drug in ‘rather unhygienic’ food to prevent diarrhoea
• South China Sea: Japan, Philippines hold first joint naval exercise
• Foreigners invest more in China’s advanced manufacturing even as total FDI drops
• Malaysia launches home-grown electric car as Chinese EV makers target market
• South African import probes targeting China prompt call for free-trade zone
• China sees highest number of significant floods since records began
• US-China fentanyl cooperation gathers momentum with senior meeting in Washington
• China food delivery rider treated ‘like a dog’ by security guard using riot control device
• China urged to stabilise yuan to lift domestic demand, with high exports ‘unsustainable’
• Airship aiming for China’s low-altitude tourism market makes 2-hour test flight
• China’s land purchases shrank 38% in first 7 months of 2024 amid festering property slump
• Fire rips through building in Manila’s Chinatown, killing 11
• Is Indonesia limiting Chinese nickel investments to gain US trade benefits?
• ‘Perfect Hong Kong girl’ Vivian Kong, China’s commercial jets, Singapore row: 7 highlights
• As Chinese graduates opt for government jobs, what of the private sector?
• Scorching heatwave in China’s Yangtze Delta threatens power crunch, economy
• US-South Korea military relations, which focused on North Korea, now have a China-sized gap
• Birth rate woes hit China where schools are closing for lack of children
• Legal complexities add to Beijing’s South China Sea disputes with its neighbours

US sues TikTok and China’s ByteDance over children privacy violations

https://www.scmp.com/news/china/article/3273043/us-sues-tiktok-and-chinas-bytedance-over-children-privacy-violations?utm_source=rss_feed

The US Justice Department and Federal Trade Commission filed a lawsuit on Friday against TikTok and parent company ByteDance for failing to protect children’s privacy on the social media app.

The government said TikTok violated a law that prohibits collecting, using, or disclosing personal information from children under 13 without parental consent.

The Justice Department said TikTok knowingly permitted children to create regular TikTok accounts, and then create and share short-form videos and messages with adults and others on the regular TikTok platform.

TikTok collected personal information from these children without obtaining consent from their parents.

In March, a source told Reuters the FTC could resolve a probe into TikTok over allegedly faulty privacy and data security practices by either filing suit or reaching a settlement.

Reuters in 2020 first reported the FTC and the Justice Department were looking into allegations the popular social media app failed to live up to a 2019 agreement aimed at protecting children’s privacy.

The Chinese-owned short-video platform boasts around 170 million US users, and is currently fighting a new law that would force ByteDance to divest TikTok’s US assets by January 19 or face a ban.

The company last year faced fines from the European Union and U. over its handling of children’s data.

On Tuesday, US Senate passed a bill that would extend COPPA to cover teenagers up to age 17, ban targeted advertising to children and teens, and give parents and children the option to delete their information from social media platforms.

The bill would need to pass in the Republican-controlled House, currently on recess until September, to become law.

TikTok said in June it has been working with the FTC for more than a year to address the agency’s concerns and said it was “disappointed the agency is pursuing litigation instead of continuing to work with us on a reasonable solution”.

Death toll in China bridge collapse rises to 38, with 24 missing

https://www.scmp.com/news/china/article/3273039/death-toll-china-bridge-collapse-rises-38-24-missing?utm_source=rss_feed

The death toll from a highway bridge collapse in northern China after heavy rains two weeks ago has climbed to at least 38, with 24 still missing, state media said Friday.

The bridge in Shangluo in Shaanxi province partially collapsed on July 19 “due to a sudden downpour and flash floods”, state news agency Xinhua reported at the time.

A three-lane section of the bridge plunged into a river, CCTV footage showed, dumping cars and trucks into the torrent below.

On Friday, authorities revised the death toll up from 12 to 38, with 24 still missing, according to Xinhua.

Authorities have also confirmed that 25 vehicles were swept away when the bridge collapsed, CCTV reported.

China is enduring a summer of extreme weather, with heavy rains across the east and south coming as much of the north has sweltered under successive heatwaves.

Climate change, which scientists say is exacerbated by greenhouse gas emissions, is making such extreme weather phenomena more frequent and more intense.

In May, a highway in southern China collapsed after days of rain, leaving 48 dead.

Heavy rains this week in central China have also left at least 30 people dead, state media said on Thursday, the same day that weather authorities reported that July had been China’s hottest month since record-keeping began six decades ago.

Hamas chief Ismail Haniyeh’s killing ‘may push Iran to seek closer ties with China’

https://www.scmp.com/news/china/diplomacy/article/3273019/hamas-chief-ismail-haniyehs-killing-may-push-iran-seek-closer-ties-china?utm_source=rss_feed

The assassination of Hamas leader Ismail Haniyeh might push Iran to seek closer ties with China, according to a report by a Chinese credit ratings agency.

Ayatollah Ali Khamenei, Iran’s supreme leader, has reportedly ordered “harsh punishment” for Israel in retaliation for the killing of Haniyeh, who had attended the inauguration of President Masoud Pezeshkian last week.

Israel has not publicly acknowledged responsibility for Haniyeh’s death, but the attack on Wednesday has raised concerns of a wider war in the Middle East.

The attack follows air strikes on the Iranian consulate in the Syrian capital Damascus in April that killed 16 people, including seven members of the Revolutionary Guard.

This week also saw the death of Hezbollah commander Fuad Shukur and an Iranian military adviser in an Israeli air strike on a suburb of Beirut.

In a brief analysis published on Thursday, China Chengxin International Credit Ratings Company, a joint venture with Moody’s Investors Service, said Haniyeh’s assassination may force Tehran to rethink its foreign policy and step up efforts to move closer to countries like China.

It said the attack that killed Haniyeh showed that Iran could “hardly ensure the safety of a visiting ally” and had “in some way weakened Iran’s position as a regional power”.

Pezeshkian has previously said that his priorities would be about strengthening ties with neighbours and supporting the establishment of a “strong region”.

“The incident will intensify Iran’s demand for greater national security and strategic autonomy, and consolidate its strategic dominance in the Middle East region, which will drive Iran to rely more on external strengths to build up its security system and at the same time prompt its military deployment and geopolitical camp to move closer to third parties such as China,” the report said.

Nadeem Ahmed Moonakal, a research scholar at the International Institute for Iranian Studies in Riyadh, said the killing “may prompt Iran to seek more robust external support and reassess its security strategies, potentially leading to increased military and security collaboration with China while also placing greater emphasis on strengthening its indigenous capabilities”.

He said that in recent years, Iran had increasingly focused on making and exporting its own military equipment as part of its plans to ensure greater autonomy.

Haniyeh’s death was not the first time Iran’s security system has been compromised in attacks it blamed on Israel.

In 2020, Mohsen Fakhrizadeh, considered one of the masterminds of Iran’s nuclear programme, was killed after his car was ambushed in east Tehran. A year later, the internal power system of Iran’s Natanz uranium enrichment site was hit by an explosion.

But Ma Xiaolin, an international relations specialist at Zhejiang International Studies University, said the latest killing highlighted Iran’s intelligence and security failures and its “strategic negligence”.

He added: “The security, military and even policymaking departments in Iran didn’t expect that Israel would chase [Haniyeh] to Iran’s capital.”

Ma added: “This is just one of many security incidents in Iran, and it is unlikely that Iran will become too close to any country in terms of defence, security or technical equipment, or openly cooperate with countries like China and Russia.”

US sanctions may also limit the security cooperation between Iran and China.

On Wednesday, Beijing tightened its controls on drone exports with fresh restrictions on unmanned aerial vehicles and parts that have potential military uses.

China has been a key supplier for Iran, but Moonakal said it remained to be seen how these new controls would affect Iran’s ability to procure supplies.

“China has strategically expanded its diplomatic influence in the region, balancing relationships with all regional powers in the Middle East with strong economic ties,” Moonakal said.

“As a result, while recent developments are likely to push Iran closer to China, the specifics of their defence and security partnership will ultimately be determined by Beijing.”

When Chinese President Xi Jinping hosted Iran’s late president Ebrahim Raisi in February last year, the two sides said they would further security cooperation but stopped short of mentioning if joint research and weapons development was included.

Ma said Beijing had been “very cautious” over military cooperation with Iran, taking into consideration its relationships with the United States, Saudi Arabia and Israel.

“Iran may be keen to seek closer ties to Russia and China to counterbalance sanctions and military pressure from the US, but it won’t put all its security eggs in the Russian and Chinese baskets,” he said.

US bill to bar ‘cheating’ Chinese solar firms could pass, but counterproductive: analysts

https://www.scmp.com/economy/global-economy/article/3272984/us-bill-bar-cheating-chinese-solar-firms-could-pass-counterproductive-analysts?utm_source=rss_feed

A proposed bill to prevent Chinese solar panel makers from receiving tax credits for their US factories could end up hurting the American photovoltaic sector, analysts said, and could be viewed as “discriminatory”.

A bipartisan group of four US senators announced the American Tax Dollars for American Solar Manufacturing Act on Wednesday, with the aim of “further strengthening American energy independence and solar manufacturing”.

“We cannot allow American tax dollars to go to Chinese companies that cheat and undermine American solar manufacturing,” Sherrod Brown, a Democratic Party senator from the US state of Ohio, said in a statement by the four lawmakers.

“Our bipartisan bill will make sure that only American companies are supported by taxpayer dollars, and support the creation of manufacturing jobs throughout the solar supply chain across Ohio.

“We will not allow the Chinese government to take down the American solar manufacturing industry.”

The proposed bill follows the Biden administration’s Inflation Reduction Act, which was introduced in August 2022 to provide direct subsidies for US-based photovoltaic products, including silicon, wafers, cells and tubes.

The tax credits also took effect in 2022, but will be phased out by 25 per cent per year for components sold after December 2029.

Jon Ossoff, a Democratic senator from the state of Georgia, added that the tax credits should skip Chinese solar companies that “threaten” American energy security.

“At the end of the day, it’s a credit offered by the US government, so if [the senators] felt because a particular country was engaging in an unfair competition supported by subsidies from its own government, there’s no reason [the senators] can’t say that,” said Mark Natkin, a California-based managing director with market research firm Marbridge Consulting.

The bill must be negotiated and voted on by the US Senate, as well as the US House of Representatives, and finally signed by the president, before it becomes law.

Congressional bills have high odds of passing if they target China, said Ker Gibbs, executive-in-residence at the University of San Francisco’s Centre for Business Studies and Innovation in Asia-Pacific.

“China has become a very hot potato for both the Republicans and Democrats and there’s a pressure from everybody to show that they are strong against China,” said Alexander Vuving, professor at the Daniel K. Inouye Asia-Pacific Centre for Security Studies in Hawaii.

“Based on that pressure, you can say [the bill is likely to pass].”

And with solar energy’s status as a Democratic Party initiative opposed by Republican presidential candidate Donald Trump, it may add pressure to pass the bill relatively quickly ahead of November’s election, said Chong Jia Ian, an associate professor of political science at the National University of Singapore.

“That said, both the Democrats and [Republicans] are eager to protect US industry and technology, especially in relation to [China], so the bill may still pass even if there is a Republican in the White House,” he said.

“A lot may come down to lobbying by the industry in both Congress and the executive branch.”

Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition, said that his trade advocacy group supported the bill.

Washington had already announced in May a 50 per cent tariff on Chinese photovoltaics, up from 25 per cent.

But the act, which was supposed to take effect on Thursday, has been delayed by at least two weeks.

Chinese companies are “rapidly” building solar plants in the US with a projected capacity to fulfil half the country’s solar panel demand, British financial news website Value the Markets said in July.

China's leading solar panel companies, including Xi’an LONGI Silicon Materials and Trina Solar, have already invested in module manufacturing plants in the US to avoid extra tariffs.

But Christopher Tang, a professor at the University of California, Los Angeles, Anderson School of Management, said the proposed bill goes against the spirit of a free market and is politically driven.

It focuses on protectionism to the extreme as it only targets Chinese-owned factories, he said.

“These [Chinese-owned] factories hire American workers to produce these panels, follow US labour laws, and pay taxes, as such, this new act is discriminatory,” Tang said.

“This new act will impede the green economy transition in the US because many solar panel factories in the US are Chinese-owned.

“By singling them out, it would make solar panels more expensive, which would reduce the demand for solar panels.”

Temu sellers struggle with disputes amid complex company structure outside China

https://www.scmp.com/tech/big-tech/article/3273015/temu-sellers-struggle-disputes-amid-complex-company-structure-outside-china?utm_source=rss_feed

Merchants selling on the Chinese international e-commerce app Temu that have protested against the platform’s harsh fines for after-sales issues are struggling to address disputes through legal channels on the mainland because of the company’s complex ownership structure, according to lawyers.

Merchants sign agreements with Temu through its operator Whaleco’s entities in either Dublin or Boston, depending on where they sell, according to sellers and the platform’s official website. These agreements specify that disputes must be submitted to the Hong Kong International Arbitration Centre, placing them outside the jurisdiction of domestic judicial and regulatory bodies.

Temu claims its global headquarters as Boston in the US. But like its China-based sibling Pinduoduo, Temu is owned by PDD Holdings, which operates mainly out of Shanghai, although it changed its principal business address to Dublin last year.

“Given the cross-border nature of these transactions, it’s logical for both parties to agree on a dispute resolution method and set Hong Kong as the arbitration venue,” said Wu Libin, senior partner at M&T Lawyers. “However, many merchants are unfamiliar with Hong Kong’s legal framework, and the high costs of litigation pose a significant barrier to seeking legal remedies.”

Merchants said that the company’s agreements disadvantage them, with updates often appearing as pop-up windows on the seller’s back-end system, requiring immediate consent to continue operations. This has resulted in some cases to hundreds of thousands of dollars in fines and withheld earnings over issues such as alleged intellectual property infringement and poor product quality.

In response, hundreds of suppliers stormed the office of Temu logistics affiliate in Guangzhou.

In a statement to the Post, Temu said the disputes stem from dissatisfaction with how the platform handles after-sales issues related to product quality and compliance. “These merchants have declined to resolve the disputes through the normal arbitration and legal channels stated in the seller agreements,” Temu said.

While digital contracts are legally valid, Wu said there is still a need to scrutinise whether the platform operator is exploiting its dominant position.

“Legally, if a standard contract is significantly unfair or open to multiple interpretations, it should be construed against the party that drafted it,” he said. “Sellers seeking legal remedies must demonstrate that the contract is significantly unfair or that its terms are ambiguous.”

Disputes between merchants and e-commerce platforms are not uncommon, according to a UBS report that cites similar issues with Amazon.com. Removing non-compliant merchants and products are part of Temu’s efforts to ensure long-term sustainable growth, according to the report.

“Initially, the penalty for merchants may be larger due to the delayed impact from accumulated sales, as well as possibly less focus on compliance and consumer complaints given Temu’s small scale last year,” UBS said in the report. “This should gradually smooth out as Temu’s penalty policies are executed on a more real-time basis and merchants become increasingly compliant with the requirements.”

Screenshots provided by Temu suppliers show that the platform has changed the terms used on the back end that are points of reference in their disputes. For example, the term “after-sales release amount” was changed to “non-merchant responsibility platform after-sales subsidy.” This refers to payments withheld by the platform when there are after-sales issues.

Some merchants are unhappy with Temu’s refund-only policy, which allows consumers to request refunds without returning products or providing proof of loss or damage, raising concerns about potential abuse.

In a related move, Alibaba announced last Friday that it would start rewarding sellers with good track records on Taobao by loosening the refund-only policy from August 9. Alibaba, which owns the South China Morning Post, also owns AliExpress and Lazada, direct competitors to Temu.

China rolls out new rules to help veterans find jobs and start businesses

https://www.scmp.com/news/china/military/article/3272957/china-rolls-out-new-rules-help-veterans-find-jobs-and-start-businesses?utm_source=rss_feed

Beijing has rolled out new rules to help veterans start businesses and advance their education, responding to social pressure to improve welfare for military personnel transitioning to civilian life.

Under the new regulations, state institutions that hire veterans must relax age and educational requirements – a departure from common recruitment policies around the country with rules such as age caps of 35.

Veterans will also be entitled to preferential treatment when competing against equally qualified non-veterans for jobs.

The changes were released by the Central Military Commission and the State Council as an update to regulations in place since 2011, according to a document made public by state news agency Xinhua on Thursday.

The rules will come into effect on September 1.

The regulations say that state institutions that hire veterans may not raise hiring conditions or requirements beyond the thresholds set by national policies, and organisations that violate this rule will be subject to disciplinary action.

They also encourage veterans to start their own businesses with help from government initiatives, market guidance and social support.

The rules include new sections on training and education opportunities to ensure veterans have the necessary skills to perform their jobs and provide financial subsidies for veterans who take part in vocational skills training.

Veterans would have opportunities to study at higher education institutions with support from their state sector employers, it said.

The regulations also outline stringent requirements for veterans. According to the new rules, veterans should “maintain military secrets, uphold and promote the glorious traditions and fine conduct of the People’s Liberation Army” after their transition into civilian life.

The rules come just days after Chinese President Xi Jinping called for “solid efforts” to support veterans in finding work after they leave the military so they can play a role in society and have their rights and interests protected.

“[We must] let military service be a profession that is respected by the whole society, and let our veterans become among the most respected people in society,” Xi said at a meeting on veterans’ affairs in Beijing on Monday, according to Xinhua.

For years, a lack support for China’s veterans has led to social problems, including protests by veterans demanding proper welfare.

China established its Ministry of Veterans Affairs in 2018 to find a solution to these problems.

The country has adopted more rules in recent years to increase its support for veterans.

A document released by the State Council in 2022 said that “veterans are an important talent resource and a crucial force in the modernisation of socialism” and called for more measures to support them to start businesses.

In addition, a law took effect in January 2021 to strengthen protection of the legitimate rights and benefits of veterans.

Tencent, NetEase win big with Rainbow Six and Marvel video game approvals in China

https://www.scmp.com/tech/big-tech/article/3273012/tencent-netease-win-big-rainbow-six-and-marvel-video-game-approvals-china?utm_source=rss_feed

China’s video game regulator has approved another 15 foreign-developed titles for the local market, bringing this year’s total to 75, with domestic tech giants Tencent Holdings and NetEase securing licenses for some big games.

Tencent secured approval to release Tom Clancy’s Rainbow Six, one of the most popular tactical shooter games, and role-playing game Paper Mario: The Origami King for the Nintendo Switch platform in China, according to a Friday statement by the National Press and Publication Administration (NPPA).

NetEase received approval for two Marvel titles: Marvel Rivals and Marvel Snap, which both feature famous Marvel Comics characters.

Some other famous titles also made the cut this month, including Final Fantasy XIV, a massively multiplayer online role-playing game that is part of the hit franchise from Square Enix, and Mario Golf: Super Rush for the Switch.

This year’s approvals of foreign video games have already surpassed the 44 titles approved in 2022, when the industry was recovering from an eight-month licensing freeze. At the current pace, it could be on track to surpass last year’s 98 approvals, as Beijing tries to instil confidence in the domestic video game industry after its 2021 crackdown.

In 2020 and 2021, the NPPA approved 96 and 76 imported games, respectively.

Out of the 75 foreign titles approved this year, 11 have been for the Switch, making it the largest batch since the NPPA took the charge of licensing video games in 2019. They included three Pokémon titles – Let’s Go, Pikachu!, Let’s Go, Eevee! and New Pokémon Snap – the rhythm game Taiko no Tatsujin, and the fighting game Samurai Shodown.

Only six Switch titles were approved in 2023, and three the previous year, according to NPPA data. The Switch has been available in China since 2019, when Tencent reached a deal with Nintendo to be the console’s exclusive distributor in the country.

China’s video gaming market has been on the rise after a long halt to new video game licenses, which for foreign titles lasted 18 months until December 2022. Total sales in China’s video gaming market soared nearly 14 per cent to almost 303 billion yuan (US$41.8 billion) last year, with the number of gamers reaching a record of 668 million, according to the Game Publishing Committee of the China Audio-video and Digital Publishing Association.

US-China trade war could be the death knell for advanced economies

https://www.scmp.com/opinion/world-opinion/article/3272609/us-china-trade-war-could-be-death-knell-advanced-economies?utm_source=rss_feed

The US’ China containment strategy and its shift towards re-industrialisation are shrinking the market for competitive industries in high-income economies. Ultimately, these economies could face increasing competition with a technologically independent China, as well as higher prices for raw materials.

The squeeze on multiple fronts may push them into middle-income status. Currencies such as the yen, the euro, the won and even the New Taiwan dollar have been on trajectories similar to that of a secular bear market.

High-income economies, such as Germany, Japan and South Korea, carved out their competitive niches in the US-centric global economy after World War II. They achieved an edge with pricing power in specific areas such as technology, manufacturing or branding.

Pricing power in the right sectors is the key to reaching high-income status. After China launched the reform and opening up policy four decades ago and entered the global economy, the advantages that high-income economies had gained were amplified. Costs were lowered by some of them shifting production to China.

This equilibrium has been under stress with China’s rapid technological development and improved manufacturing sophistication. The price war in China’s car market is a good example. The market is the biggest in the world and has been dominated by multinational companies for decades. They produced cars in China at low cost and sold them at high prices. The rise of Chinese car manufacturers has changed that dynamic. Global carmakers now face a prolonged crisis.

The US’ containment strategy towards China is another blow to these advanced economies. The US wants to dent or reverse China’s tech rise. One method of doing this is cutting off China from the hi-tech supply chain.

Restrictions on China’s access to the equipment needed for making chips are perhaps the best illustration. They shrink the market for these high-income powers. As China develops its own supply chain, it will compete in overseas markets, further denting their revenues.

US sanctions haven’t worked out well so far. China’s technological advancements show no sign of slowing down. However, the next US administration, whether it is run by the country’s vice-president Kamala Harris or former president Donald Trump, is likely to expand tech sanctions on China.

US chip equipment manufacturers have been able to sell more products that existing sanctions don’t apply to yet, more than likely compensating for any lost sales. But if the US expands the sanctions list sharply next year, revenues could significantly decline.

In response, China is likely to pour more resources into technologies that the US denies it access to. If that strategy is successful, it could mean the permanent loss of the Chinese market and, over time, competition in other markets. When it comes to production, China has lower costs and a larger scale. Middle powers such as Germany and Japan will be at a considerable disadvantage.

The US has been aiming to re-industrialise for years and there seems to be a sense of urgency among US policy elites. Manufacturing subsidies in the Inflation Reduction Act are a case in point.

The next administration is likely to step up measures to support national industries. Subsidies could be expanded, with a continued role for the free market of course. Tariffs could be increased for other countries aside from China. Procurement by the US government and its contractors could become conditional on production localisation.

One of the quickest ways for the US to re-industrialise is by relocating production away from its allies to within its own borders. However, relying on local capacity has not worked and is unlikely to work in the future.

The loss of access to China’s market, increased Chinese competition and decreased exports to the US could hollow out the economies of middle powers. They could also be pressured into buying energy and minerals from the US. Their terms of trade are on a slippery downward slope.

The strength of currencies in high-income economies depends on their terms of trade. When they lose industries with pricing power, they are arguably no different from middle-income economies. In the current geopolitical environment, their currencies are facing a downward trend. What is happening to the yen will expand to other middle power currencies.

The US dollar is overvalued, as shown by the US’ large current account and fiscal deficits. As the currencies of middle powers decline, the dollar will become more overvalued.

The dollar is held up by money inflow. The dollar’s dominance in the global currency market makes this possible.

East Asia accounts for much of global savings. Some US politicians have discussed the possibility of a war over Taiwan. One effect of this has been scaring rich people in the region to move money out. That potentially leads to more purchases of dollar assets.

The US needs a realistic value for the dollar to make its re-industrialisation viable in the long run. That will require China revaluing its currency. However, China cannot be coerced into doing so, as Japan was in the 1985 Plaza Accords. The US would have to make a deal with China to achieve that. China would certainly demand many concessions in return. When the US is willing to properly deal with China, the dollar’s value will normalise.

China court punishes chefs who put drug in ‘rather unhygienic’ food to prevent diarrhoea

https://www.scmp.com/news/people-culture/article/3272860/china-court-punishes-chefs-who-put-drug-rather-unhygienic-food-prevent-diarrhoea?utm_source=rss_feed

Two chefs in China have been handed suspended prison sentences for adding antibiotics to food in a misguided attempt to prevent customers from developing diarrhoea after eating in their restaurant.

Last month, a court in Nantong, eastern China’s Jiangsu province, sentenced a chef, surnamed Sha, and his colleague identified as Fu, to two years and 18 months in jail respectively, on the charge of producing and selling toxic and harmful food.

Their sentences were suspended for an unidentified period, according to the Modern Express.

The pair were also fined a combined 160,000 yuan (US$22,000) and ordered to apologise publicly via the media.

They were caught in September last year after a restaurant employee told the authorities that some chefs had injected gentamicin sulphate into dishes before serving them to customers.

Law enforcement officials promptly arrived at the restaurant, the name of which was not released in the report, for an inspection.

Officials found four empty boxes of the medicine in a kitchen dustbin and 101 unused boxes in the office of Sha, who was the head chef.

Examination of some dishes at the site showed the food contained traces of the medicine.

Gentamicin sulphate, a type of antibiotic, was widely used to treat diarrhoea in China decades ago because it was cheap. Today, it is available on prescription from pharmacies or doctors’ surgeries.

Experts say it should not be taken by elderly people or children because of its possible side effects, which include the potential to damage hearing and kidneys.

The two defendants said they injected the dishes with the antibiotics so that customers would not suffer from diarrhoea after eating their “rather unhygienic” food.

They said they added a small amount by pouring a 2ml bottle of the medicine into cold appetisers per table.

Since the beginning of last year, more than 1,600 dishes, worth about 80,000 yuan (US$11,000), have been tainted with the drug, the chefs confessed.

The restaurant where the duo worked was fined 1.18 million yuan (US$165,000) and has had its business license revoked.

The market supervising authority banned Sha and Fu from working in the food industry for life, while the two managers of the eatery were each banned for five years.

Food scandals frequently make headlines in mainland China.

Last year, a college in eastern Jiangxi province shocked the nation after investigators concluded a foreign object found in a duck’s neck dish served in the students’ canteen was a mouse’s head.

South China Sea: Japan, Philippines hold first joint naval exercise

https://www.scmp.com/news/asia/east-asia/article/3272991/south-china-sea-japan-philippines-hold-first-joint-naval-exercise?utm_source=rss_feed

The Philippine and Japanese navies held their first joint exercise on Friday in the South China Sea, as the two US allies boost security ties in the face of China’s growing pressure.

The drills followed the signing less than a month ago of an agreement between Manila and Tokyo to allow the deployment of troops on each other’s territory.

The Japanese destroyer JS Sazanami and the Philippine guided missile frigate BRP Jose Rizal took part in the two countries’ first bilateral “Maritime Cooperative Activity”, the Philippine military said in a statement.

“This activity was part of the ongoing efforts to strengthen regional and international cooperation towards realising a free and open Indo-Pacific.”

The two vessels held a communications exercise and undertook tactical manoeuvres in the West Philippine Sea, Manila’s name for parts of the South China Sea that are closest to the Philippine coast.

These “enhanced the tactical capabilities of the Philippine navy and the (Japan Maritime Self-Defence Force) and reinforced the strong ties and mutual commitment to maintaining peace and stability in the region”, the statement added.

A similar exercise was held two days earlier, also in South China Sea waters close to the Philippines, between the Filipino navy patrol ship BRP Ramon Alcaraz and the US Navy’s littoral combat ship USS Mobile.

The Philippines and Japan are longtime allies of the United States, which has been strengthening its alliances from Canberra to Tokyo to counter China’s growing military might and influence in the region.

The deepening of Philippine-Japanese security ties comes as China’s sabre-rattling towards Taiwan and over the South China Sea fuels fears of a potential conflict that could drag in the United States.

There have been escalating confrontations at sea between Chinese and Philippine ships as Beijing steps up efforts to push its claims to nearly all of the strategic South China Sea.

Foreigners invest more in China’s advanced manufacturing even as total FDI drops

https://www.scmp.com/economy/economic-indicators/article/3272998/foreigners-invest-more-chinas-advanced-manufacturing-even-total-fdi-drops?utm_source=rss_feed

Despite an overall drop in foreign direct investment (FDI), China says more funds from overseas are being channelled into its advanced manufacturing sector.

“While FDI in the first half of this year was at a relatively high level if we look at it over the span of the past decade, frankly the scale of the investment has dropped on a year-on-year basis, mainly due to a high base from last year,” said Zhu Bing, director of the Foreign Investment Administration under the Ministry of Commerce, at a press briefing on Friday.

From January to June, FDI in China saw a 29.1 per cent year-on-year drop to 498.9 billion yuan (US$69 billion), according to official figures.

However, investment in manufacturing increased by 2.4 percentage points, totalling 141.86 billion yuan during the period and accounting for 28.4 per cent of all FDI in the first half of the year.

In particular, FDI in hi-tech manufacturing reached 63.75 billion yuan – also a 2.4 percentage point increase from the same period a year prior.

Zhu said the numbers show that foreign investors are “proactively managing their investment plans across industries”, and that China’s FDI landscape has entered a period of “adjustments”.

He added that the higher proportion of investment seen in manufacturing is indicative of China’s enhanced focus on improving the sector as a whole.

Beijing has tried to regain its allure among foreign investors by promising to remove market-access barriers in relation to a so-called negative list that outlines sectors off limits for foreign investment – including healthcare and telecommunications.

While market access has been given to foreigners in manufacturing sectors in specific free-trade zones, the policy has yet to be implemented nationwide. During his first work report in March, Premier Li Qiang vowed to open up more sectors to foreign investment and to “completely scrap” the threshold for foreign investment in the manufacturing sector.

But without a confirmed timeframe for widening market access in more sectors, investors have been left waiting amid China’s weak domestic demand and economic slowdown. Surveys from a number of foreign chambers of commerce over the past year have subsequently shown how their confidence in China has taken a hit.

Zhu said on Friday that China would open up telecommunications, internet, education, cultural and medical sectors for foreign investment “in an orderly manner”.

China’s total FDI in manufacturing last year was 317.92 billion yuan, a 1.8 per cent dip from the previous year. Yet, FDI in hi-tech manufacturing grew 6.5 per cent in 2023.

The July-released figures highlighted that FDI in the manufacturing of medical equipment and measuring devices, as well as in professional and technical services, respectively surged by 87.5 per cent and 43.4 per cent in the January-June period, year on year.

Germany and Singapore’s investment in China grew 18.1 per cent and 10.5 per cent, respectively, in the first six months of 2024, commerce authorities noted in their July data release.

Meanwhile, China made non-financial outbound direct investments of 516 billion yuan in the same period, marking a 19.5 per cent increase from the year before.

China has not released FDI data in US-dollar terms for more than a year.

Malaysia launches home-grown electric car as Chinese EV makers target market

https://www.scmp.com/week-asia/economics/article/3273001/malaysia-launches-home-grown-electric-car-chinese-ev-makers-target-market?utm_source=rss_feed

Malaysia has just launched one of its first home-grown electric cars, but analysts predict it will face stiff competition from a flood of Chinese EVs as manufacturers from China shift focus to Southeast Asia’s lucrative $100 billion market, driven by prohibitive tariffs in the US and EU.

On Friday, national carmaker Proton unveiled their e.MAS7 – slated to be one of Malaysia’s first locally badged EVs – as part of the government’s strategy to make sure local firms can keep pace with the influx of foreign electric vehicles in the market.

Chinese carmakers have ramped up their search for alternative markets to sell their electric cars after the US in May imposed a 100 per cent tariff on EVs imported from China, the latest salvo in the ongoing US-China tech and trade war.

The EU followed suit, imposing tariffs of up to 38 per cent effective July 4 on three Chinese brands – BYD, the world’s second-largest EV maker by sales volume, Geely and SAIC – after the bloc found that the companies had benefited from Beijing’s “unfair subsidisation” that threatened to undercut Europe’s EV sector.

The shift in Chinese focus is likely to drive higher EV sales in Asean, particularly in countries like Malaysia and Indonesia that offer favourable regulations and where partnerships are established between local and Chinese carmakers, according to Maybank Investment Bank.

“We prefer Asean companies that partner Chinese car makers for manufacturing and sales, and companies in the battery value chain,” Maybank IB said in a Thursday note, referring to the Association of Southeast Asian Nations.

Prior to the launch, Proton’s e. MAS7 was widely rumoured to be a rebadge of an SUV model built by Geely – which holds a 49.9 per cent stake in the Malaysian firm. Proton executives denied the claim, saying the e. MAS7 was designed specifically for the Malaysian market.

Perodua, Malaysia’s largest domestic carmaker by sales volume, has yet to unveil its own EV car. Its chief executive, Zainal Abidin Ahmad, said in May that it was 60 per cent complete and will be sold for under 100,000 ringgit (US$21,000) once it hits the market in 2025.

Malaysia saw robust demand for electric vehicles in 2023, surging by nearly 290 per cent to 10,159 units compared to just 2,631 the previous year.

The sharp focus on Southeast Asia by Chinese EV makers, however, has triggered growing complaints over steep discounts to spur sales in Thailand, which upset early adopters who had to pay more.

Authorities in Thailand, the region’s largest EV market, have since launched a probe into the issue after customers complained about being misled into buying their cars before a fresh round of discounts.

Existing regulations may insulate Malaysia from a similar problem, as car pricing typically requires approval from the automotive business development committee led by the ministry of trade and investment, said Shahrol Azral Ibrahim Halmi, the president of the Malaysian EV Owners Club.

“This is one way the government can help moderate wild price swings. This will also help manage risks to financial institutions given their exposure,” Shahrol told This Week in Asia.

South African import probes targeting China prompt call for free-trade zone

https://www.scmp.com/news/china/diplomacy/article/3272958/south-african-import-probes-targeting-china-prompt-call-free-trade-zone?utm_source=rss_feed

China and South Africa should establish a free-trade zone “as soon as possible”, a Renmin University academic has suggested as Beijing has been the top target of the country’s anti-dumping actions.

In an article published on Wednesday, Song Lifang, vice-president of the university’s Belt and Road Economic Research Institute, suggested that Beijing set up an economic integration organisation in the region to counter anti-dumping measures.

Despite being South Africa’s biggest trade partner, Beijing faced 44 anti-dumping investigations and 25 anti-dumping measures from its fellow Brics member between 1995 and 2021, according to Song, referring to data from the World Trade Organization and China’s Ministry of Commerce.

The action accounts for 17.53 of South Africa’s anti-dumping investigations and 17.36 per cent of its anti-dumping measures in the 26-year period.

In comparison, South Africa launched 23 anti-dumping investigations against India, 16 against South Korea and 13 against Taipei in the same period.

Anti-dumping duties are protectionist tariffs that a government imposes on imports.

Chinese steel products have been the main targets of South Africa’s actions. Steel products are the subject of more than one-third of South Africa’s anti-dumping investigations against China, and a quarter of the country’s steel-related investigations target Beijing.

Steel is a pillar industry in South Africa, and China is the primary source of South Africa’s steel imports.

China should “actively respond” to South Africa’s anti-dumping policies and “expand direct investment in South Africa with a focus on the steel industry”, said Song, who teaches at Renmin University’s school of economics.

“China should … establish a regional economic integration organisation represented by a free-trade zone with South Africa as soon as possible, attach importance to the study of the Southern African Customs Union and its anti-dumping [policies] against China,” Song said.

China and South Africa launched free-trade negotiations as early as two decades ago, but a substantial arrangement has yet to be reached. At last year’s Brics summit, Chinese companies signed deals to buy US$2.2 billion worth of South African products.

Last month, South Africa imposed an import duty of 45 per cent plus value-added tax on all clothing, up from a tariff of 20 per cent previously imposed on low-value parcels. The move was seen as part of efforts to stop Chinese-backed shopping platforms like Shein and Temu from undercutting domestic retailers.

Song noted that the other members of the Southern African Customs Union, including Botswana, eSwatini, Lesotho and Namibia, have adopted measures identical to those of South Africa.

“The impact and losses caused by South Africa’s anti-dumping against China, in fact, not only involve bilateral trade between China and South Africa, but also multilateral trade between China and the five countries of the Southern African Customs Union,” she wrote.

Song said that South Africa’s economic reconstruction and recovery plan should be coordinated with China’s Belt and Road Initiative, Beijing’s strategy to build global trade and infrastructure links.

She added that the two sides should focus on deepening post-Covid economic recovery and cooperation in industrial and supply chains.

China sees highest number of significant floods since records began

https://www.theguardian.com/world/article/2024/aug/02/china-flooding-record-weather

Halfway through the peak flood season, China has already experienced the highest number of significant floods since record keeping began in 1998, and the hottest July since 1961, authorities said on Friday.

This year so far it has recorded 25 “numbered” events, which the Chinese Ministry of Water Resources defined as having water levels that prompt an official warning or are measured at a magnitude of a “once in two to five years” event.

At a press conference this week, authorities said 3,683 river flood warnings and 81 mountain flood disaster warnings had been issued, state media reported. Almost 5,000 reservoirs had been put into operation diverting 99bn litres of floodwaterto prevent the relocation of more than 6.5 million people.

China has been hit by wild weather this summer, including heatwaves, drought, an early start to the annual flood season, and the remnants of typhoon Gaemi which brought floods and destruction to the Philippines and Taiwan before reaching China’s east coast. Dozens of people have been killed and hundreds of thousands have been forced to evacuate after floods and landslides across several provinces. Thousands of homes have been damaged and crops and livestock wiped out.

On Thursday, state media said Gaemi had killed at least 30 people in Hunan, with about 35 others still missing.

The national meteorological administration said the climate had “deviated from the norm” in China this year, driving the natural disasters. The national rainfall average was 13.3% higher than average, with 30 weather stations recording record highs. Four major rivers received above average rain. The Huaihe river and the Liaohe river basins received double the average.

China is the world’s largest producer of carbon emissions, which are driving the climate crisis. It has pledged to peak emissions by 2030 and bring them to a net zero by 2060, with ambitious state-backed renewables projects. Research released last month showed that China is building almost twice as much wind and solar energy capacity than every other country combined.

The national weather office also said last month was the hottest July since observations began in 1961, and “the hottest single month in the history of observation”. The average July air temperature was 23.21 degrees Celsius, exceeding the previous record set in 2017 of 23.17C, and every province in China reported a mean temperature in July higher than average for previous years.

High temperatures and rainfall in China were expected to continue in the next 10 days, with a red alert for extreme heat, up to 40C, issued for Shanghai on Friday. Hangzhou could potentially reach 43C, authorities said. The typhoon season also continues through August.

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US-China fentanyl cooperation gathers momentum with senior meeting in Washington

https://www.scmp.com/news/china/diplomacy/article/3272926/us-china-fentanyl-cooperation-gathers-momentum-senior-meeting-washington?utm_source=rss_feed

China and the US have agreed to further strengthen dialogue and promote “in-depth” drug control, in the first senior-level meeting of the working group formed after the mechanism was agreed at the leaders’ summit in November.

The cross-sectoral delegations met in Washington, where they “exchanged their respective concerns, exchanged views and suggestions, and clarified the direction of cooperation, according to China’s state news agency Xinhua.

A White House readout on Thursday said discussions had focused on ways to strengthen coordination on law enforcement actions, disrupt the illicit financing of transnational criminal organisation networks, and accelerate the scheduling of synthetic drugs and precursor chemicals.

The meeting also covered measures to address the illicit diversion of precursor chemicals, exchange information on emerging threats and advance progress in multilateral forums, it said.

Jennifer Daskal, deputy assistant to the president and deputy homeland security adviser, led the US delegation, while the head of the Chinese side was Wei Xiaojun, director general of the Ministry of Public Security’s Narcotics Control Bureau.

The US-China Counternarcotics Working Group mechanism was launched in January, following the 2023 summit in San Francisco between Chinese President Xi Jinping and his US counterpart Joe Biden.

The leaders agreed to resume bilateral anti-narcotics cooperation – stalled since former House speaker Nancy Pelosi’s visit to Taiwan in August 2022 – to combat global manufacturing and trafficking of synthetic drugs, including fentanyl.

Since then, Chinese police have shut down 14 websites, suspended 332 business accounts and 1,016 online shops and operations, and “significantly reduced the number of online advertisements related to fentanyl”, the public security ministry said in June.

The agency added 46 new psychoactive substances to its controlled-substances list and issued a notice warning companies against trading precursor chemicals that might be used for producing fentanyl, it said.

Also in June, Chinese law enforcement arrested a suspected money launderer alleged to be working for a Mexican drug cartel, following a tip-off from US intelligence services.

China imposed class-wide controls over all fentanyl-related substances in 2019. Chinese courts sentenced a number of defendants for trafficking fentanyl to the US and Canada, as a result of joint US-China investigations in 2019 and 2021.

The opioid has led to the deaths of more than 100,000 Americans a year for the past few years, as the US fentanyl crisis continues to worsen, according to the US Centres for Disease Control and Prevention.

China food delivery rider treated ‘like a dog’ by security guard using riot control device

https://www.scmp.com/news/people-culture/trending-china/article/3272770/china-food-delivery-rider-treated-dog-security-guard-using-riot-control-device?utm_source=rss_feed

A security guard in China has triggered outrage by using a riot control device to lock the ankle of a delivery rider, prompting accusations that he treated him “like a dog”.

The incident, which was filmed by a passer-by, took place on July 23 in a residential compound in central China’s Hubei province.

Footage shows the security guard using a riot control device shaped like an extended fork to restrain a Meituan food delivery worker by one of his ankles.

The guard said it was a punishment for the rider trying to enter the compound without his consent.

The passer-by, who claimed to be a courier himself, asked the restrained rider to call the police, and told off the guard by saying: “He is a human, not an animal”.

The compound’s property management company has admitted that the guard’s actions were wrong and asked him to apologise to the delivery rider.

The company also reportedly paid the victim 1,500 yuan (US$210) in compensation.

The incident attracted 8 million views on Douyin, and sparked widespread online outrage.

“It is humiliating to lock his ankle like that as if dealing with a dog,” one observer said on Douyin.

“What gives the security guard such great power to mistreat other people? Apologising as a punishment seems too light,” another said.

“The delivery rider and the security guard, who are both low-wage labourers, are put against each other while the system that caused this remains invisible,” said a third person.

The mistreatment of delivery workers, especially from security guards, often makes news in China.

In one extreme case, a 54-year-old security guard at a residential compound in eastern China’s Shandong province killed a 32-year-old Meituan food delivery rider following quarrels at the compound’s gate in December last year.

Ren Hao, a researcher at Beijing’s Renmin University, worked as a food delivery rider in 2020 as part of a field study.

He said food delivery workers constantly faced discrimination in residential compounds, office buildings and shopping malls.

Some riders had to take off their uniforms to enter such places.

Ren’s teacher, He Lingmin, said many security guards blindly follow the orders of property management companies.

One guard told He there were concerns that riders may drive too fast and threaten the safety of residents.

But riders must make full use of every minute to meet delivery deadlines or they face wage deductions.

China has seen a rise in the number of delivery riders in recent years as the country faces growing unemployment.

Chinese food delivery giants Meituan and Ele.me had 7.45 million and 4 million active delivery workers respectively last year.

China urged to stabilise yuan to lift domestic demand, with high exports ‘unsustainable’

https://www.scmp.com/economy/global-economy/article/3272938/china-urged-stabilise-yuan-lift-domestic-demand-high-exports-unsustainable?utm_source=rss_feed

China needs to prevent a large slide of the yuan’s exchange rate, appropriately cut interest rates and stabilise the property market to help boost its weak domestic demand as it can no longer count on high export growth to drive its economy, according to a leading economist.

“High export growth is unsustainable,” Lu Ting, chief China economist for Japanese investment bank Nomura, told a conference in Guangzhou arranged by the Guangzhou Development District Holding Group and the Shanghai-based China Chief Economist Forum think tank on Thursday.

The yuan has come under renewed depreciation pressure since the start of the year, and has weakened by more than 2 per cent against the US dollar.

But early on Friday afternoon, China’s onshore yuan surged past 7.2 against the US dollar to a high of 7.194, which was the strongest level since May 3.

China’s exports rose by 8.6 per cent from a year earlier in June, but Lu estimated that growth would likely to decline to below 5 per cent and may even return to zero toward the end of this year or next year, citing cycles of the global economy and rising trade disputes as among the reasons for softer demand for Chinese goods.

“At this rapid rate of growth, and at this low level of price, it will definitely be targeted by other countries,” said Lu, adding that Republicans in the United States have already advocated for a 50 per cent tariff on Chinese imports as part of the 2024 presidential campaign.

Lu also expected global trade imbalance would continue, with China and US running trade imbalances.

China’s trade surplus – it exports more goods than it imports – stood at US$99.05 billion in June, representing the highest since records began in 1981, while the US trade deficit – it imports more goods than it exports – stood at US$96.8 billion in June.

“Given the serious trade imbalance, if the yuan depreciates a lot or very rapidly, it will not be conducive to resolve the trade imbalance and it will not be conducive to managing relations with other countries,” added Lu.

“Also it is not conducive to steadying domestic demand, given it’s already dragged down by instability in capital and property markets.”

Dong Zhongyun, chief economist at AVIC Securities, also warned that there would be more uncertainty to China’s foreign trade should Donald Trump win the 2024 presidential election.

“China needs to step up to boost domestic demand,” Dong also told the conference in Guangzhou.

“If there are more restrictions and sanctions, China’s economy can still be maintained.”

Meanwhile, Lu said an “appropriate” amount of interest rate reductions would help to bring down rates on outstanding mortgage loans to ease the pressure on homeowners.

Additionally, steadying China’s property market remains key because there is still room for the industry to develop in the coming years because of urbanisation, he added.

“One lesson we can learn from the US Federal Reserve when it comes to maintaining the economy is to steady the US housing market,” Lu said, referring to the US central bank’s handling of the subprime mortgage crisis.

Lu also urged for acceleration of fiscal spending and reforms of the social security system in China to improve basic pension and medical insurance for urban and rural residents.

“We should encourage childbirth, and we should provide such a subsidy to the poorest people, the lowest-income group,” Lu added.

Airship aiming for China’s low-altitude tourism market makes 2-hour test flight

https://www.scmp.com/news/china/science/article/3272929/airship-aiming-chinas-low-altitude-tourism-market-makes-2-hour-test-flight?utm_source=rss_feed

A Chinese tourist airship could soon have its passengers almost “walking in the clouds” after it made a successful test flight on Thursday.

China’s first self-developed civil manned airship has shown it can function in the low-altitude tourism sector, the ship’s designer said.

The AS700 airship flew above several tourist attractions along the planned test route at a speed of 60km/h (37mph) and an altitude of 500 metres (1,640 feet) for about two hours during its flight in the central province of Hubei.

The AS700 can travel uninterrupted for 10 hours and holds up to nine passengers to reach its maximum 700km range and flight time, its manufacturer, the state-owned Aviation Industry Corporation of China (Avic), said on its official WeChat account.

“The speed and flight altitude allows tourists to enjoy a high level of stability and security, experiencing the leisure and comfort of ‘walking in the clouds’,” Avic said.

Like hot-air balloons, airships are flexible with flight altitude and can stay in the air for a long time, allowing for many potential applications, according to state broadcaster CCTV.

As well as tourism, they could be used in logistics, intelligent topography, emergency rescue, anti-terrorism tasks and security control, Avic said.

“Airships are more flexible than the commonly-used hot air balloons in the low-altitude tourism market, as the latter have to depend on weather,” Zhang Hua, senior engineer of the China Special Aircraft Research Institute, told CCTV.

Development of the AS700 started in June 2018 amid China’s intensified efforts to boost its aviation manufacturing capabilities.

Avic said development of the airship prompted production in China of the main materials, on-board systems and equipment, and established an autonomous and controllable supply chain system for manned airships.

China has pinned high hopes on the low-altitude economy as a new engine to upgrade its industrial chain and power economic growth.

The Civil Aviation Administration of China said in June that the market had surpassed 500 billion yuan (US$70 billion) in 2023 and was expected to reach 2 trillion yuan by 2030.

The AS700 was deemed qualified for the market when it was awarded one of the three major certificates required for official operation from the aviation regulator in December.

In April, Zhou Lei, chief designer of the project, said the company had 20 orders for the airship from domestic travel agencies and tourist attractions, according to Avic’s WeChat account, with the first aircraft scheduled to be delivered at the end of the year.

China’s land purchases shrank 38% in first 7 months of 2024 amid festering property slump

https://www.scmp.com/business/article/3272924/chinas-land-purchases-shrank-38-first-7-months-2024-amid-festering-property-slump?utm_source=rss_feed

China’s property developers have slowed their land grab as a slowdown in home sales continued in the industry, deterring their appetite to invest or expand their land bank.

Land purchases by mainland China’s 100 largest developers declined by 38 per cent in the first seven months of this year to a combined 430.7 billion yuan (US$59.6 billion), compared with the same period last year. The rate of decline picked up by 2.2 percentage points compared to the first half of this year, according to a report published on Thursday by the China Index Academy.

C&D Group, a state-owned developer based in the Fujian provincial city of Xiamen in southeastern China, led the pack, spending 27.9 billion yuan during the period on land acquisitions. State-owned developers dominate the property market due to easier access to funding, challenging the ability of private developers to catch up in the near future, according to analysts.

China Greentown Holdings Limited, whose largest shareholder is the state-owned China Communications Construction Group based in the Zhejiang provincial capital of Hangzhou, was the second-largest buyer, sending 22.8 billion yuan acquiring plots.

CSCEC Yipin, which builds upmarket homes and provides management services for state-owned China State Construction Engineering Corporation, ranked third with 21.3 billion yuan in land acquisitions.

“In the current environment, central state-owned enterprises (SOEs) are still more active than private players, mainly due to their smooth financing channels,” said Wang Xingping, a senior analyst at Fitch Bohua.

This is reflected in the fact that SOEs controlled by the central government accounted for over 90 per cent of real estate bonds successfully issued this year, she noted.

“In addition to their financing advantage, state-owned developers benefit from strong brand recognition, which makes them more resilient to market fluctuations during periods of significant adjustment,” said Liu Shui, corporate research director at the China Index Academy. “The market share of property sales and land acquisitions by central and state-owned enterprises is also likely going to continue to increase in the coming years.”

Data from the China Real Estate Information Corporation (CRIC) reveals that the land acquisition threshold for the nation’s top 100 developers has been reduced by 40 per cent. This move aligns with local governments’ ‘quality over quantity’ strategy in land supply, aimed at bolstering land transactions amid a market downturn.

“In light of poor home sales, property companies have raised their standards for land acquisition. Plots in subpar locations or of lower quality are likely to result in poor sales once developed, making them more likely to fail in auctions,” said Fitch Bohua’s Wang.

“Aside from the high transaction activity for premium plots in some hotspot cities, the overall land market remains sluggish. We believe that it will be difficult to significantly boost the land market in the short term,” she said.

Despite a slew of measures issued by Chinese authorities to support developers and shore up homebuyer sentiment, the prices of new homes declined for the 13th consecutive month in June, falling 0.7 per cent from a month earlier, according to official data. June’s prices for lived-in homes also dropped 0.9 per cent from the previous month, at a slower pace compared to May’s 1 per cent.

“Whether the trend in land transactions can be reversed in the future will depend on improvements in the overall real estate market environment,” said Wang.

Fire rips through building in Manila’s Chinatown, killing 11

https://www.scmp.com/news/asia/southeast-asia/article/3272925/fire-rips-through-building-manilas-chinatown-killing-11?utm_source=rss_feed

A fire ripped through a building in the Philippine capital’s Chinatown early Friday, killing 11 people, authorities said.

Crews from 14 fire trucks took two hours to control the morning blaze in Manila’s Binondo district, the city’s fire bureau said in an initial report.

Rescue personnel later found the bodies of 11 people inside the five-storey mixed-use building, it added.

The cause of the blaze and identities of the victims were not immediately known.

By noon, mortuary vehicles were waiting on the street to take the bodies away.

“The wife of the building owner was among those that died,” Nelson Ty, an elected official for the community where the fire broke out, told radio station DZRH, adding that vendors had used the structure to store their goods at night.

The Philippines has a patchy record in enforcing fire safety in buildings, homes and offices.

Sixteen people died in a fire at a residential and warehouse building in August last year, while a massive fire engulfed the capital’s historic Central Post Office building in May 2023.

In 2017, a fire at a shopping mall in southern Davao City killed 37 call centre agents and a security officer.

Agence France-Presse and Reuters

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Is Indonesia limiting Chinese nickel investments to gain US trade benefits?

https://www.scmp.com/week-asia/economics/article/3272838/indonesia-limiting-chinese-nickel-investments-gain-us-trade-benefits?utm_source=rss_feed

Indonesia is sending mixed signals about Chinese investment in its nickel industry as it aims to align its policies with US tax credit eligibility under a trade deal with Washington, with the government denying placing limits on Chinese involvement even as reports suggest new deals are being structured to minimise their ownership.

Experts say Indonesia’s approach reflects a desire to balance national interests against geopolitical tensions as Jakarta attempts to diversify its investment partners and export markets to reduce its dependency on China.

Septian Hario Seto, deputy coordinating minister for investment and mining, told This Week in Asia on Wednesday that “there are no [efforts] by the government to limit [Chinese investments]” in the industry.

His statement came in response to questions raised by a July 26 report in the Financial Times, citing three unnamed sources, saying the Indonesian government and nickel industry players are trying “to structure new nickel investment deals with Chinese companies as minority shareholders”.

The report said the reason behind this is Washington’s classification of China as a “foreign entity of concern” under its Inflation Reduction Act (IRA), signed by President Joe Biden in 2022, which dictates that electric vehicles containing China-sourced batteries and metal components would not be eligible for US$7,500 tax rebates.

EV batteries containing Indonesia-sourced components would thus not qualify for the tax credits as China heavily dominates the country’s nickel extraction and processing industry, particularly after Jakarta banned the exports of raw nickel ore in 2020 as part of a value-added strategy to generate more revenue by requiring miners and producers to build refining facilities onshore.

The Financial Times report said Septian confirmed the industry and government efforts to limit future Chinese investment.

“It’s not just about IRA, but also diversification,” he told the newspaper. “This is a very important policy because we do not want to get trapped in geopolitical tensions. We have to look out for national interests.”

However, the report also noted that the government is not imposing mandatory limits on ownership by Chinese companies.

“All dealings are done business-to-business,” Septian told This Week in Asia, giving the example of a deal already made by businesses in which a Chinese company would be the minority shareholder, while their Indonesian and South Korean partners would be the major shareholders, in a project valued at about US$700 million. He declined to elaborate further on the specifics of the deal.

Navigating trade tensions

Kyunghoon Kim, an associate research fellow at the Korea Institute for International Economic Policy focusing on industrial policies in Asia’s developing economies, said that Indonesia’s key concern regarding the IRA should not be China’s domination of the nickel industry but the lack of a free-trade agreement (FTA) with the US.

“The ‘entities of concern’ clause only matters if Indonesia’s nickel qualifies to benefit from the IRA in the first place. This is why the Indonesian government attempted, but is failing, to arrange a narrow FTA with the US,” Kim told This Week in Asia.

According to Kim, the US Senate “very strongly” opposes an FTA with Indonesia, as both US parties are competing to be tough on China.

In October, a group of nine US senators wrote a letter addressed to Treasury Secretary Janet Yellen, Commerce Secretary Gina Raimondo, Energy Secretary Jennifer Granholm and US Trade Representative Katherine Tai, rejecting a potential FTA with Indonesia due to “weak labour protections, Chinese dominance of Indonesian mining and refining, significant biodiversity impacts of open pit mining and lack of environmental protections in law,” among others.

During his visit to the White House in November, President Joko Widodo and Biden said they would “commit to develop a critical minerals action plan” to increase “high-standard investment in the critical minerals sectors in both countries”.

During his visit to Indonesia on July 15, US Under Secretary of State for Economic Growth, Energy, and the Environment Jose Fernandez told reporters that the discussion with the Indonesian government was “progressing positively”.

“We are very satisfied with the way that our discussions are ongoing. We will continue to expand on those discussions going forward,” he said, as cited by Reuters.

Driving diversification

According to Kim, Jakarta “is definitely trying to diversify” its nickel processing industry, as the country, which is the world’s biggest producer of the mineral, seeks to strengthen its supply chain resilience amid shifting geopolitical tensions, including the US-China trade war.

Currently, Chinese companies such as steel giant Tsingshan Holding Group, Zhejiang Huayou Cobalt, and Ningbo Lygend, have built more than 90 per cent of nickel smelters in Indonesia, according to the country’s Association of Indonesian Nickel Miners.

“This process will be slow. Chinese companies are masters of the key technology, high-pressure acid leaching (HPAL), needed to turn Indonesia’s class two ores into battery-quality nickel intermediates,” Kim said.

“As a result, the Indonesian government will not explicitly adopt policies to reduce Chinese dominance in the short term,” he said.

Instead, Kim said it was more likely the government would come up with “smarter policy alternatives” to expand domestic ownership, value addition and enhance ESG [environmental, social, and governance] investment guidelines.

Indonesia’s nickel policy has yielded mixed results, with some firms increasing their investment commitments while others pull back for various reasons.

South Korean carmaker giant Hyundai Motor Group would fall under the first camp, as it launched Indonesia’s first EV battery plant on July 3 in a joint venture with battery maker LG Energy Solution (LGES). The plant, located in the West Java town of Karawang, is run by a joint venture company, PT HLI Green Power, which said that it would invest an additional US$2 billion to increase production to 20 gigawatt hours worth of battery cells annually, doubling its current capacity of 10 GWh.

On the other hand, German multinational BASF and French mining group Eramet in June cancelled their joint plan to build a HPAL processor in North Maluku, with BASF citing “low global nickel prices” as the main reason behind the decision.

The two companies’ planned HPAL facility would have been “the only European investment in nickel processing in Indonesia since the 1990s,” Kevin O’Rourke, an Indonesia-focused policy analyst, wrote in his newsletter Reformasi on June 28. HPAL processors built by Chinese investors are proliferating in nickel hubs in Eastern Sulawesi and North Maluku, he noted.

“Low prices are the ostensible reason for the withdrawal of BASF-Eramet, but in fact, this is unconvincing. It seems more likely that the European companies perceived difficulties in maintaining acceptable standards, especially for environmental impacts, using HPAL in Indonesia,” O’Rourke wrote.

“Furthermore, the arena features formidable competition from other producers with fewer obligations or scruples regarding the impacts of their operations and waste.”

Kim argued that Jakarta may try to revive the plan as “the withdrawal [of BASF and Eramet] is a serious concern for the Indonesian government considering it was a major non-Chinese project.”

Jakarta is also attempting to sell its domestically produced EV batteries to markets beyond the West. Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan said that he is eyeing African countries, especially Kenya and South Africa, as target markets.

“The population in Africa will double by 2045. This will be a huge market. They see Indonesia as a country that can help them regarding these electric vehicles,” Luhut told journalists during the International Battery Summit in Jakarta on Monday.

Indonesia itself remains a small player in the global EV supply chain as the nation is only expected to generate 10 GWh of battery energy this year, less than 0.4 per cent of the world’s total projected battery energy output of 2,800 GWh, according to energy think tank Energy Shift Institute.

‘Perfect Hong Kong girl’ Vivian Kong, China’s commercial jets, Singapore row: 7 highlights

https://www.scmp.com/news/world/article/3272756/perfect-hong-kong-girl-vivian-kong-chinas-commercial-jets-singapore-row-7-highlights?utm_source=rss_feed

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

Even as Hong Kong waits with excitement at the prospect of more medals for the city at the Paris Olympics, residents cannot seem to get enough of their current heroine, Vivian Kong Man-wai. The star fencer topped the list of biggest trending searches on Google on Saturday shortly after her historic triumph, as curious residents rushed to learn more about the 30-year-old épéeist.

China’s coastguard has found itself embroiled in a series of intense confrontations in three major hotspots – with tensions simultaneously coming to a head in a two-week period in late June. In one of the most dramatic incidents, the Philippines accused China of acting like “pirates” and carrying out “aggressive and illegal” operations after one Philippine sailor lost a thumb when coastguards armed with axes and knives boarded resupply vessels.

Chinese swimmer Zhang Yufei’s bronze medal in the women’s 100m butterfly has been met with encouragement and cynicism on social media. United States swimmer Torri Huske clinched the gold medal, with compatriot and world-record holder Gretchen Walsh in second place.

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.

A Singapore politician’s comments about a foreign girl featured in National Day posters have stirred debate on xenophobia in the city state, with experts saying the opposition is capitalising on anti-foreigner sentiment for political mileage.

Beijing has urged Southeast Asian countries to resist alleged US and Nato-led “external interference” in the South China Sea and other regional hotspots, stepping up pressure on its neighbours amid an escalating war of words with Washington. Top Chinese diplomat Wang Yi hammered home the message on the sidelines of an Asean foreign ministers’ meeting in Laos last week, saying that the United States had “no right” to intervene in the South China Sea.

The story of an uncared-for little girl in China who became a different person thanks to the love of her stepmother has melted hearts on mainland social media.

As Chinese graduates opt for government jobs, what of the private sector?

https://www.scmp.com/opinion/china-opinion/article/3272476/chinese-graduates-opt-government-jobs-what-private-sector?utm_source=rss_feed

In China, people are notoriously practical when it comes to selecting college majors. My personal experience illustrates that. After ranking among the top 10 students in my home province’s college entrance examination scores, I received unsolicited advice on picking majors.

My parents were counselled to steer me away from journalism, as it no longer promised a decent job placement after graduation. I was also cautioned against majoring in international economics, despite my high scores, because it was considered “too popular” at the time. Instead, international politics was suggested as a safer alternative.

Little did we anticipate the profound shifts that would occur. With the abolishment of the job assignment policy and as China’s reform and opening up picked up momentum in the 1990s, the job market changed dramatically. Degrees in international politics lost their lustre, while entering the business world became the aspirational choice for many of my classmates.

However, as the Chinese saying goes, “thirty years east of the river, thirty years west of the river”. In other words, fortunes can change dramatically over time. In an ironic twist, legal- and politics-related majors have now become favoured choices for prospective college students.

This category of majors is quite broad, encompassing distinct fields including law, public security, international politics and even ideological and political education.

How popular are these majors? China University Rankings recently released the 2024 rankings of the most searched majors during the college entrance examination period. Law ranked first, while international economics and trade now rank 44th.

Meanwhile, the popularity of police academies has also increased. In both Heilongjiang province and Shanghai, nearly 10 per cent of college applicants are vying for spots in these institutions. Perhaps more tellingly, many high-scoring students, despite qualifying for elite universities, are opting instead for police academies.

This shift reflects drastic changes in China’s employment landscape. Despite nearly 12 million new graduates reportedly entering the workforce in 2024, the private sector struggles to generate adequate job opportunities.

The Covid-19 pandemic’s lingering effects and government regulations have stifled growth in service sectors – traditionally sectors most likely to hire youth. In June 2023, the youth unemployment rate soared to an unprecedented 21.3 per cent, prompting the government to cease reporting the numbers.

Against this backdrop, the public sector becomes the premier career choice. Data shows the proportion of new college graduates preferring to work in state-owned enterprises, government agencies or public institutions surged from more than 51 per cent in 2019 to 73.1 per cent in 2024. The appeal is clear: a secure position, decent pay and favourable work-life balance.

A former classmate of mine, who recently retired as a court judge, now receives a monthly pension of around US$3,000 – a stark contrast in a nation where one report suggests that nearly 1 billion people subsist on less than US$300 per month. Equally significant is the expansion of the public sector over the past years.

Research conducted by Ma Yingyi of Syracuse University suggests that recruitment through the Chinese national civil service exam soared by 173 per cent over the past five years. Provincial service recruitment rose by nearly 55 per cent in the same period.

The gravitation of college graduates towards public sector careers illuminates the growing popularity of legal majors. Graduates majoring in these fields might enjoy a distinct edge in civil service recruitment, benefiting from a higher quota of available positions.

This trend in China mirrors patterns observed in other developing economies, such as India and Egypt. This pivot is quite recent and pronounced in China, reflecting acute economic uncertainties and evolving social values.

As China’s talent pool increasingly gravitates towards the public sector, it might lead to a shortage of skilled professionals in the private sector, potentially stunting business growth and innovation.

The rising popularity of legal majors could trigger a brain drain from crucial fields, jeopardising President Xi Jinping’s agenda of bolstering China as a science and technology superpower. This reallocation of human capital could influence global trade patterns and investment flows, particularly in industries where China has been a key player or innovator.

While a robust public sector is essential for any country, a rapid expansion of China’s public sector and oversupply of legal graduates present significant challenges. To begin with, it intensifies competition for positions in the public sector. Some media have reported that for this year’s national civil service examination, the ratio of applicants to available positions reached a staggering 100:1 for many positions.

In an extreme case, a single position at the National Bureau of Statistics’ survey team in Ningxia province attracted over 1,400 applicants. The fierce competition could breed social instability, as seen in recent student protests in Bangladesh, where competition for limited public service jobs sparked a massive movement against the quota system.

Moreover, it strains public finances. Some estimate the burgeoning government payroll now exceeds 80 million employees and retirees, consuming about 40 per cent of China’s tax revenue. This fiscal burden threatens long-term sustainability, particularly for pension systems.

Lastly, overstaffing risks bureaucratic bloat and reduced government efficiency. The influx of legal graduates into the bureaucracy could institutionalise a security-oriented policy structure, potentially nudging China towards a more repressive state.

While legal majors offer individuals short-term job security, they may exact a heavy toll on China’s economic vitality and societal balance. The ramifications of this shift extend far beyond personal career paths, potentially reshaping China’s economic landscape and state-society dynamics for years to come.

Scorching heatwave in China’s Yangtze Delta threatens power crunch, economy

https://www.scmp.com/economy/china-economy/article/3272830/scorching-heatwave-chinas-yangtze-delta-threatens-power-crunch-economy?utm_source=rss_feed

A scorching heatwave has left Zhejiang province and global financial hub Shanghai teetering on the brink of recurring power shortages that may crimp production and exports, at a time Beijing has put the onus on regional powerhouse regions to buttress China’s economic growth.

Analysts said rising power demand was proof that the local economies were booming, but persistent supply crunches laid bare planning and management inadequacies and the impact from new energy sources, with an urgent need for Beijing to expedite reforms to avoid stunting growth in rich regions.

Officials in the Yangtze River Delta, though, face a quandary over Beijing’s request to prioritise residential use during peak periods and the imperative to maintain high regional growth to supercharge the struggling national economy.

As temperatures are set to hit 40 degrees Celsius (104 degrees Fahrenheit) next week, and as factories enter a peak production period to meet strong overseas demand, officials in Zhejiang have drafted contingency plans.

Cities have appealed to owners of electric vehicles to only charge cars late, since demand from air conditioning and manufacturing in the province of 66 million people would soar further.

“Please charge your car after 11pm and only when the battery level drops below 20 per cent … Your efforts to help stagger electricity use is appreciated,” said a notice from several district governments in the port city of Ningbo.

Since July 4, the province’s electricity use has set a new record four times in a row, with the highest peak load exceeding 120 million kilowatts (kW), according to State Grid’s provincial branch.

Last week, Zhejiang governor Wang Hao inspected State Grid’s provincial office and several power plants, as some counties mull temporarily reopening coal-fired power plants decommissioned amid Beijing’s decarbonisation drive, according to sources familiar with the matter.

In Shanghai, the usually glittering billboards and architectural lighting on The Bund promenade and in the Lujiazui financial district will also be turned off to save power.

Shanghai’s Baowu, the world’s largest steel producer, and Sinopec’s Shanghai Petrochemical Company are among the enterprises told to prepare for intermittent power cuts, as the financial hub prioritises households and commercial users.

Shanghai’s supply gap could hit 3.77 million kW in coming weeks, according to government documents seen by the Post.

The city’s peak load this summer is forecast to be 41.5 million kW, 9 per cent higher than the record set in 2022.

“The export-oriented economy is doing well in the Yangtze River Delta this summer and driving up power demand. Officials face the choice between production lines and household air conditioners as they allocate the precious electricity,” said a Zhejiang University professor, who asked not to be named as they are not authorised to speak to the media.

Cities in Jiangsu, China’s second-largest provincial economy and exporter, are also bracing for power shortage as authorities in Nanjing, Suzhou and Wuxi have issued calls to stagger power use.

The province has compiled a list of key exporters to be guaranteed power supply in a shortage, according to the Xinhua Daily newspaper.

Zhejiang’s economy expanded by 5.6 per cent year on year in the first six months of the year, outpacing the national average.

Its industrial output and exports also saw robust growth of 8 per cent and 8.6 per cent, respectively.

Shanghai’s economy also grew 4.8 per cent in the first half of the year.

“Now it’s a choice between GDP and livelihood. Shanghai will cut supply to big manufacturers to ensure household use. While this is the right thing to do, the economy is unavoidably affected,” added the academic.

He said should power shortages worsen in August, they could knock between 1 and 2 percentage points off industrial output growth in Zhejiang and Shanghai in the third quarter, when factories need to ramp up production in anticipation of demand from the West ahead of the festive season in the fourth quarter.

“When power shortage becomes a regular occurrence and is escalating in coastal regions, Beijing should find solutions and adjust its energy policies,” the academic said.

One underlying reason could be the destabilising impact from new energy sources, with Shanghai officials having said the deployment of wind and solar energy has added to the volatility of electricity generation.

“Grid management is becoming difficult as wind, solar and hydro power fluctuates greatly and is not always in sync with demand peaks,” the Shanghai Municipal Commission on Economy and Information Technology said in a reply to inquiries from policy advisers in July.

“For the sake of normal economic operation, energy planning and policies should be optimised.”

Recommendations, including tariff differences for peak and off-peak periods and more energy storage facilities, have been raised by experts.

In April, the National Energy Administration identified power storage projects as a key focus for electricity management in promoting renewable energy use.

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US-South Korea military relations, which focused on North Korea, now have a China-sized gap

https://www.scmp.com/week-asia/politics/article/3272837/us-south-korea-military-relations-which-focused-north-korea-now-have-china-sized-gap?utm_source=rss_feed

The gap in how Seoul and Washington perceive the role of deployed US forces became more evident this week with an American commander’s suggestion that threats faced by South Korea extended beyond Pyongyang, hinting at the spectre of China.

General Paul LaCamera, commander of US Forces Korea (USFK), on Wednesday stressed the 1953 mutual defence treaty between the allies did not specify a single adversary, adding that his troops were prepared to defend South Korea against “all threats”.

His comments come amid increasing narratives in Washington about South Korea’s role in addressing not only threats from North Korea but also other global challenges.

There are also suggestions that the roughly 28,500 US troops stationed in South Korea should contribute to deterring China.

“It’s not just DPRK (North Korea) that threatens the Republic of Korea (South Korea),” LaCamera was quoted by local South Korean media as saying at an online forum in Washington. He was responding to a question on the growing calls in Washington for US forces deployed there to shift their focus to potential Chinese threats.

Article III of the treaty states that each party declares that an armed attack “in the Pacific area on either of the parties” would be dangerous to its own peace and safety, and each side should “act to meet the common danger”.

Article IV indicates that South Korea grants the US the right to deploy land, air or sea forces on its territory “as determined by mutual agreement”.

Kim Joon-hyung, an opposition lawmaker who served as the head of the National Diplomatic Academy, said the expansion of the USFK’s roles beyond the Korean peninsula might cause the South to be dragged into a conflict over Taiwan.

It was “remarkable” that a top US military leader had “so openly” said it was not just the North that presented a threat, he told This Week in Asia.

“The United States is eager to integrate South Korea in its efforts to push through with its global strategy,” said Kim of the splinter opposition group Rebuilding Korea Party.

Furthermore, a new military command structure was announced on Sunday by Washington and Tokyo involving US Forces Japan, which will reportedly work more closely with Japanese troops under a Joint Force Headquarters reporting to the commander of US Indo-Pacific Command.

This development suggests that Japanese troops could potentially intervene in conflicts on the Korean peninsula and in the Taiwan Strait, a significant change that could impact the region, Kim said.

Kim said the US-Japan move was modelled after the US-South Korea Combined Forces Command and designed to counter China’s influence in the Indo-Pacific.

The group would have a commanding right over South Korea’s half-million troops if a war breaks out on the Korean peninsula.

The three countries in Tokyo last month signed the Trilateral Security Cooperation Framework that would usher in “security cooperation”, joint exercises and stability on the Korean peninsula, “in the Indo-Pacific region, and beyond”.

Kim and other opposition lawmakers are gathering signatures to pass a parliamentary resolution by the end of the year to “help the government fend off” mounting American demand for the South’s interventions in global challenges such as those over the Taiwan Strait or the war in Ukraine.

Lee Il-woo, a senior researcher at the Korea Defence Network, said South Korea faced double threats from Pyongyang’s nuclear arsenal and China’s missiles in Shandong and Liaoning provinces aimed at the South’s western coast.

China and Russia also on occasions flew their military aircraft threateningly close to the South’s air space, he noted. “Indeed, there exists a serious gap between Seoul and Washington in their perceptions concerning threats to the Korean peninsula.”

Seoul did not want to “grate on China” by highlighting threats from its largest trade partner, he said.

General LaCamera’s remarks came ahead of the twice-a-year massive US-South Korea military exercises that will reportedly take place from August 26-29, following a multi-domain trilateral exercise “Freedom Edge” with Japan in June.

Han Ki-bum, a researcher at the Asan Policy Institute, said the North was likely to respond with its own military drills including short-range or middle-range missile launches, but it would save its remaining cards – an ICBM test or its seventh nuclear test – for when the US presidential election in November is over.

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Birth rate woes hit China where schools are closing for lack of children

https://www.scmp.com/news/china/politics/article/3272769/birth-rate-woes-hit-china-where-schools-are-closing-lack-children?utm_source=rss_feed

Several Chinese provinces are cutting back on teacher recruitment because of the falling numbers of schoolchildren in recent years, in a reflection of the country’s deepening demographic challenges.

Deep cuts in teaching positions – widely regarded in China as stable and socially respected – add further uncertainty to the already bleak jobs market as the country grapples to create enough work for its massive labour force, especially new graduates.

Education authorities in the eastern province of Jiangxi said this year’s new preschool, primary and secondary school teaching positions would be cut by 54.7 per cent to 4,968 – less than one-third of its recruitment two years ago.

In neighbouring Hubei province, recruitment of schoolteachers has dropped one-fifth over the same period.

The main reason for the fall appears to be the declining numbers of schoolchildren, as China experiences a period of “ultra-low” fertility, with fewer than 1.4 live births per woman over a lifetime.

The China Population and Development Research Centre estimates that the total fertility rate dropped to 1.09 in 2022, while the number of births halved between 2016 and 2023, to 9.02 million.

Jiangxi’s education department acknowledged the challenge in an official reply to suggestions on system reform at the end of June. “[The] low fertility rate will become one of the main risks for the country’s population development,” it said.

According to the Jiangxi authorities, the province’s population share of children aged 0-15 has fallen in each of the past four years, with a drop of 480,900 last year – the biggest decline since 2020.

Education resources must be restructured in response to the decreasing fertility rate, the department said, noting the closure of one-fifth of schools in the province’s rural areas with fewer than 100 students.

A similar situation in Hunan province, in central China, last year prompted education authorities to announce there would be no new kindergartens built in rural areas.

The number of children in Hunan’s kindergartens decreased by 14.79 per cent to 319,400 in 2023, compared to the previous year.

The same pattern occurred across the country, with national data showing a decrease in the number of preschool children for the third consecutive year.

According to the Ministry of Education, there were fewer than 275,000 kindergartens last year – a drop of 14,800 from 2022. Enrolments declined in the same period by 5.35 million to 40.9 million.

Rural areas are under greater pressure from the demographic changes, according to Dong Yuzheng, president of the Guangdong Social Sciences Association in southern China.

As the population urbanises and concentrates in large and medium-sized cities, rural areas experience a decrease in population, which also leads to a reduction of preschool students, Dong told business media outlet Yicai.com.

Legal complexities add to Beijing’s South China Sea disputes with its neighbours

https://www.scmp.com/news/china/diplomacy/article/3272766/legal-complexities-add-beijings-south-china-sea-disputes-its-neighbours?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 third instalment of a four-part series we look at some of the claimants’ legal efforts to support their case.

In recent weeks, two of the countries with competing territorial claims in the South China Sea have asked the United Nations to recognise that the outer limits of their boundaries should extend beyond 200 nautical miles (370km).

Vietnam’s proposal in July to the UN Commission on the Limits of the Continental Shelf (CLCS) followed a similar submission the previous month by the Philippines. Both could bring added complexity to the tensions surrounding the disputed waterway.

Hanoi and Manila are each seeking formal recognition that they have an extended continental shelf (ECS) into a contested part of the South China Sea which is subject to multiple claims – including from both parties, as well as Beijing.

The latest requests bring the total ECS submissions in the South China Sea to five, with the first dating back as far as 2009. None have been resolved and the outer limits outlined in the proposals frequently overlap.

Success would grant the submitting states exclusive sovereign rights to the natural resources of their continental shelves. But to complicate matters further, the CLCS will not review submissions that are embroiled in land or maritime territorial disputes.

While there is a strong possibility that the submissions may not be actively reviewed by the CLCS, Chinese experts are keeping a keen eye on the potential repercussions they could have on Beijing’s claims in the waters.

According to an associate professor in Guangzhou who specialises in the South China Sea and asked to remain anonymous, the number of ECS submissions related to the waterway could continue to grow and Beijing should not overlook them.

“Staking claims to ECS is poised to deepen the intricacies of the already complex dispute. Each nation involved is keen to innovate strategies to bolster its maritime claims, with the ECS claim to emerge as a key tactic,” he said.

“This approach could potentially open up a new front for verbal skirmishes among the claimant countries.”

The area within 200 nautical miles of a state’s coastline is generally recognised as its exclusive economic zone, with the waters beyond designated as the high seas.

However, if a state has a continental shelf that extends beyond 200 nautical miles of its coastline, the CLCS is the only viable channel to establish sovereign rights over the area.

The 21-member body, established under the United Nations Convention on the Law of the Sea (UNCLOS) includes experts on geology, geophysics and hydrography, who consider geophysical and bathymetric information presented by claimants.

However, the CLCS “is purely a scientific body, not a legal body”, explained Chen Chen-ju, associate professor of National Chengchi University’s College of Law in Taiwan.

“The roles of its members differ from those in courts or arbitration tribunals. Hence, the commission is not tasked with dispute settlement,” she said.

The CLCS reviews the submitted material and determines whether it meets the requirements laid out in the convention, before making its recommendations – which countries can choose not to follow or make a revised submission, but that will become binding if accepted.

“Although the legal term is a ‘recommendation’, it comes with legally binding effect, which means that the outer limits will become a fixed boundary separating seabed areas within national jurisdictions and the international seabed areas, which are reserved for the common heritage of humanity,” Chen said.

The Philippines’ claims have so far been rejected by China, Vietnam and Malaysia and other states are likely to reject the Vietnamese claim, potentially stalling the progress of both submissions.

According to maritime experts, considerations of the unilateral submissions from the Philippines and Vietnam are likely to be deferred by the CLCS, which has yet to review more than 40 claims accumulated internationally since 2001.

Liu Dan, a research fellow at Shanghai Jiao Tong University’s KoGuan School of Law, said that even an uncontested ECS submission usually took years to consider because “the caseload is piling up for the commission to review”.

But coastal states were entitled to file submissions and it was worth doing, because of the potential benefits of obtaining maritime entitlements from a legally recognised continental shelf, she said.

“Filing a claim poses no risk to the Philippines, as the worst-case scenario is that the claim might not be considered by the commission. However, it could help attract support from other countries, helping to reinforce its footing in the South China Sea.”

Chen said Manila’s ECS submission could be interpreted as a continuation and practical application of its South China Sea lawfare – which culminated in a 2016 arbitration ruling in its favour, a result Beijing has not accepted.

According to Chen, “by inheriting the results of the arbitration finding and proposing that the seabed surrounding features [in the Spratly Islands] is within part of its ECS, Manila is leveraging the arbitration to further advocate its South China Sea claims”.

In the anonymous Guangzhou academic’s view, the invocation of the ECS represents a strategic move from Manila to effectively challenge Beijing, “compelling it to stretch its resources in response”.

“Such an approach of extending its continental shelf is a coordinated move together with the arbitration ruling to further cause harm to Beijing’s stance,” she said.

Expert opinion diverged on Hanoi’s impetus for following Manila’s lead and seeking recognition of its own extended continental shelf, and whether the claimants were coordinating their submissions to the CLCS.

Isaac Kardon, senior fellow for China studies at the Carnegie Endowment for International Peace, said that Vietnam and the Philippines might demonstrate a certain level of coordination, or at least convergence of interests in their latest actions.

“There appears to be some coordination between them, or at least shared sympathies and momentum towards making clear, legal claims that contradict and counteract China’s opaque claims,” he said.

The associate professor in Guangzhou contended that Vietnam’s submission was likely to have been approved by President To Lam to score domestic political support by increasing his country’s posture in the dispute.

Ding Duo, deputy director of the Institute of Maritime Law and Policy at the National Institute for South China Sea Studies, said Vietnam’s submission was “clearly a countermeasure” to the Philippines’ ECS claims.

“The Philippines’ submission is notably extensive and stretches westward, encroaching significantly into the area Vietnam recognises as its 200 nautical mile exclusive economic zone and continental shelf boundaries,” he said.

But Ding noted that the timing was opportune for Hanoi and it had its “nuanced calculations”.

“The Philippines’ current maritime provocations have significantly dominated China’s attention and energy. Consequently, should Vietnam lodge a similar claim now, it is less likely to become the main focus of attention,” he said.

“This strategic timing means Vietnam can assert its claims without becoming a main target of China’s, [as opposed to] if it were to proceed alone at a different time, which might spotlight Vietnam undesirably.”

According to Shanghai Jiao Tong University’s Liu, the latest ECS claims could lead to a “spillover effect”, encouraging other claimant states to make similar moves.

The enduring negative impact of the 2016 arbitration case, coupled with the repercussions of such ECS claims in the region, could pose a serious threat to Beijing’s claims, she said.

“[These factors] could potentially encourage other claimants to overlook China’s legal assertions in the South China Sea, opting to partition and gradually encroach upon the waters through ECS claims or bilateral or multilateral boundary agreements.”

Liu was referring to the 2009 maritime boundary agreement between Brunei and Malaysia, as well as the 2003 continental shelf delimitation agreement between Indonesia and Vietnam.

In late 2022, Hanoi and Jakarta also successfully finalised long-running negotiations to delineate the borders of their exclusive economic zones in the region.

Strategically, China could not afford to disregard the ECS claims, even though the possibility they would be reviewed by the CLCS might be minimal, Liu said.

“China should attach great importance to such submissions. They are essentially tests to determine its stance and resolve amid the ongoing and intense disputes in the South China Sea.”

Experts noted that China had yet to publish its baselines in the broader South China Sea region, a necessary step before the breadth of a maritime territory can be measured under UNCLOS.

Beijing has only specified a set of base points in the Gulf of Tonkin, the northwestern portion of the South China Sea where Beijing and Hanoi signed a delineation agreement in 2000.

Beijing has also not clarified the legal meaning of its vast nine-dash line, which encompasses up to 90 per cent of the disputed waters, stretching about 2,000km (1,240 miles) from the Chinese mainland to within just a few hundred kilometres of the Philippines, Malaysia, and Vietnam.

Ding noted that baseline information was a prerequisite for the CLCS to make a determination. China’s lack of defined baselines would present a legal and technical challenge when it tried to submit its own ECS claims, he said.

According to Chen, Beijing could hit a bottleneck in its narrative if it advances ECS claims in the southern part of the South China Sea. It may become difficult to reconcile such submissions with the established stance of its nine-dash line, she said.

Beijing may opt out of submitting its own ECS proposals in the Spratly Islands, avoiding the need to clarify the legal justification of the nine-dash line and preserve the flexibility of its interpretation, Chen said.

Ding said another calculation that Beijing may be making in not actively seeking the validation of an ECS lies in the fact that such submissions are not conducive to solving maritime disagreements among the claimant states.

“China’s primary priority is to tackle issues of territorial sovereignty and manage conflicts effectively,” he said. “Ultimately, the path to resolving the disputes will necessitate a return to the negotiation table and claimant states engaging in thorough consultations.”