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• Can Chinese wine become mainstream after support from Hong Kong’s CY Leung?
• Beijing looks for echoes of the past as Vietnam’s new leader visits China
• Integrated patrols signal Beijing ‘asserting claims’ in Taiwan Strait, South China Sea
• China’s ties with Vietnam are a diplomatic priority, Xi Jinping tells To Lam on state visit
• Alibaba’s long-awaited China stock link may provide timely boost
• Philippines slams China coastguard’s ‘dangerous’ clash with its ships near Sabina Shoal
• China’s selective shoppers embrace members-only retailers like Walmart’s Sam’s Club
• Where did Alice Guo? Philippine mayor who allegedly spied for China has fled country: senator
• Luxury properties defy China’s slumping home sales as big-city buyers splash out
• 2 more top Chinese football officials netted in corruption crackdown
• 23,000 mainland Chinese obtain multi-entry 30-day talent visas to visit Hong Kong
• Critics of China Olympic diving queen Quan Hongchan slammed for ‘uneducated idiot’ insults
• China’s relaxed visa rules pay off as more overseas travellers arrive
• China’s first AAA game Black Myth: Wukong has both fans and brands excited
• US-China financial working group seek to ‘strengthen’ cooperation in times of stress
• Chinese team thinks ‘outside the box’ to find a cool solution to hypersonic heat
• China swimmer saves drowning father and son, tells them to thank Taiwan singer Richie Ren
• China expands export controls on drones, parts with potential for military use
• In Cuba, China’s drive for EVs reshapes the roads of Havana
• Future murky for Russia-China pipeline as Mongolia omits project from long-term plan
• Chinese and Philippine ships collide near disputed Sabina Shoal in South China Sea
• China is using 2+2 talks with its neighbours to ‘get its plans back on track’
• Why China’s public sector workers are in a rush to retire early
• China accuses the Philippines of deliberately crashing one of its ships into a Chinese vessel
• China accuses Philippines coastguard of ‘ramming’ in Sabina Shoal collision
• China or India? Sri Lanka’s presidential election becomes a battleground for influence
• Lost China girl, 8, uses ATM for help, joyfully reunited with family, amusing many online
• Warnings of overcapacity in China’s ride-hailing sector spread amid weak demand
• Why there’s no quick fix in the South China Sea disputes, and war ‘cannot be ruled out’

Can Chinese wine become mainstream after support from Hong Kong’s CY Leung?

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3275095/can-chinese-wine-become-mainstream-after-support-hong-kongs-cy-leung?utm_source=rss_feed

Chinese wines are once again in the spotlight after Hong Kong’s former leader Leung Chun-ying called for the products to be made mandatory for all National Day celebrations on October 1.

Leung, now a vice-chairman of the country’s top political advisory body, the Chinese People’s Political Consultative Conference, said the quality of Chinese wine had improved and was also reasonably priced, arguing it was “inexcusable and unjustifiable” to not drink domestic alcohol on National Day.

Some applauded the suggestion, while others remain sceptical about the prospect of Chinese wines in the local and international markets.

The Post speaks to experts and industry players to find out more about Chinese wines and how far they have come.

1. What are Chinese wines?

China started systematic and large-scale wine grape cultivation about four decades ago following investment from French companies.

Since then, the country is home to about a dozen wine regions, including Shandong, Xinjiang and Ningxia, with a total of over 200 wineries.

But it was not until the recent decade that Chinese wines started to be seen on the international stage and received recognition from critics.

Max Wong from the Hong Kong Wine Chamber of Commerce told the Post that Chinese wines remain a relatively new product and had adopted a high-end approach, with the good-quality ones costing at least four digits per bottle.

“The market is still exploring the products, like the quality-price ratio, the flavour, and the occasions for them to be served,” he said. “When the market position is unclear, there is no stable consumer group.”

2. What are their strengths and weaknesses?

Philippe Bera, CEO of Omtis Fine Wines, a Chinese wine distributor in Hong Kong, said the diversity of Chinese wines was one of the strengths.

“You can go from the high altitude in Ningxia to the low altitude in Shandong … it’s so broad that you can showcase different attributes of wine from the same country,” he said.

He added that in terms of quality, many Chinese wines had received very high ratings despite coming from young vineyards that were relatively less mature.

Wong, who is also the general manager of King’s Wine Cellar, a distributor of Chinese wines, said many Chinese vineyards were rich enough to invest in branding.

But the harsh weather in some of the wine regions also resulted in a higher labour cost, making the price of good-quality Chinese wines less affordable to general consumers, he added.

3. Where do Chinese wines stand internationally?

Shuai Zekun, a veteran connoisseur with the online site of American critic James Suckling, said the quality of Chinese wines had improved significantly over the past decade and garnered interest from experts as well, but the export volume was low.

“Only major brands can export their products, but the prices were not competitive,” he said.

“Nevertheless, Chinese wines were rich and full-bodied in general, which is mainstream and should be quite accepted by consumers.”

Chinese offerings accounted for 500 out of 40,000 wines tasted by his company each year, he added.

Bera from Omtis Fine Wines said the Chinese diaspora outside China was very keen to experience the quality and technical expertise of wines from their homeland.

The company has been exporting Chinese wines to Asian countries such as Singapore, Malaysia, Indonesia, and Cambodia since 2021.

4. How popular are these wines in Hong Kong?

Chinese wines were available in some luxury hotels such as Four Seasons but products had not been flying off shelves, said Max Wong from King’s Wine Cellar.

It was not common for regular restaurants and bars to purchase Chinese wines for their patrons either, he added.

“It’s rare for Hongkongers to order a whole bottle of expensive wine at restaurants, instead they order wines in glasses, but Chinese wines are too expensive to be served this way,” he said.

“Nevertheless, the Chinese wines would surely cater to some foreign visitors who were keen to try local wines.”

He added that Chinese wines only accounted for less than 1 per cent of this company’s business, and that it was “impossible” for them to become mainstream in the short term.

Wong estimated the market share of Chinese wines in the city to stand at less than 10 per cent.

5. Will serving it exclusively on National Day help?

Jacky Cheung Yiu-shing, president of the Wine Association of Hong Kong, said serving Chinese alcohol on that special occasion would be a great opportunity to promote the products.

He said it was difficult to promote the lesser-known products in the city amid a downturn in the bar and catering businesses.

Cheung believed a lot more incentives were needed to help bring the products to people’s dining tables, noting a drop in demand for alcohol in general.

Connoisseur Shuai said the city could act as a springboard in promoting Chinese wines, given that opportunities for international showcase were limited to mostly competitions or wine tasting by critics.

“Hong Kong would be a great platform to bring Chinese wines to the international market, as it had long been an international trade centre and dining hub,” he said.

6. What are its prospects?

Shuai expected the trade to grow steadily in the following decades, but he warned against over-commercialisation of Chinese wines.

“Many investors of Chinese wines did not know much about wines and wanted to make quick money out of it, but this is a long-term business which takes at least two decades to see the return.”

Max Wong took a more cautious approach, noting that the wine market has limited space for new products given that the production volume is shrinking globally.

“The key is to maintain the quality, instead of churning something out … it would be great if the authorities could come up with a ranking system,” he said.

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Beijing looks for echoes of the past as Vietnam’s new leader visits China

https://www.scmp.com/news/china/diplomacy/article/3275089/beijing-looks-echoes-past-vietnams-new-leader-visits-china?utm_source=rss_feed

Xi Jinping has showered Vietnam’s new leader To Lam with honours during his visit to China highlighting the historic relationship between the two countries’ Communist parties.

On the second day of Lam’s China trip, Xi and his wife Peng Liyuan hosted a grand welcoming ceremony for Lam, who is both party chief and head of state, and his wife Ngo Phuong Ly outside the Great Hall of the People in Beijing.

As well as the customary flag-waving, 21-gun salute and honour guard, the ceremony also included a marching performance by China’s military band, an honour only granted to select foreign leaders such as Vladimir Putin.

Xi, who told his visitor that he was keen to establish a “good working relationship and personal friendship”, also hosted a small-scale tea ceremony after their formal meeting in an effort to foster what state media described as a “cordial and friendly” atmosphere.

That continued a tradition that Xi initiated for Lam’s predecessor Nguyen Phu Trong, who died last month.

Lam’s visit is his first foreign trip since he succeeded Trong as party chief two weeks ago and, in another sign of how seriously Beijing is taking the visit, he was greeted on arrival in China by foreign policy chief Wang Yi, something that has not been done for other visiting foreign leaders, not even Putin.

Lam’s first port of call was the southern city of Guangzhou, a destination with plenty of symbolic importance for the Vietnamese Communist Party because it hosted many exiled revolutionary leaders, including Ho Chi Minh.

On arrival Lam was greeted by the song Việt Nam – Trung Hoa, a piece written during the Vietnam war that celebrates the relationship between Ho and Mao Zedong.

Further emphasising these ties, the Vietnamese leader’s tour of the city included a visit to headquarters of the Communist Youth League and the grave of Vietnamese activist Pham Hong Thai, who died after a failed attempt to assassinate the French governor of Indochina Martial Merlin in the city in 1924.

But for all these professions of friendship, the relationship between the two countries is far more complex. Parts of northern Vietnam spent centuries under Chinese rule, prompting frequent rebellions and uprising.

Relations between the two countries also soured dramatically in the 1970s as Vietnam sided with Moscow in the Sino-Soviet split before they fought a brief border war in 1979 that remains a source of lingering resentment.

The two sides did not reestablish normal relations until 1991 and their long-running dispute over the Paracel and Spratly Islands remains unresolved.

Integrated patrols signal Beijing ‘asserting claims’ in Taiwan Strait, South China Sea

https://www.scmp.com/news/china/military/article/3275086/integrated-patrols-signal-beijing-asserting-claims-taiwan-strait-south-china-sea?utm_source=rss_feed

Ramped-up mainland Chinese patrols in the Taiwan Strait signal Beijing’s resolve to intensify maritime control amid heightened tensions with Taipei, according to analysts.

The mainland’s Ministry of Transport said it had carried out a patrol and law enforcement operation in the Taiwan Strait on the weekend, in an operation designed to “enhance maritime traffic control and emergency rescue capabilities”.

Observers said the 30-hour exercise starting Saturday was the latest in integrated mainland patrol operations – involving navy, coastguard and other law enforcement and civil forces – to assert Beijing’s rights in the strait and in disputed waters including the South China Sea.

Reports in mainland state media also indicated that the forces would “coordinate” further amid escalating cross-strait tensions.

The patrol came shortly after the start of the fishing season along the southeastern mainland coast on Friday, a time when a large number of fishing vessels enter the strait, the South China Sea and other regional waters.

This raised the risk of collision with commercial ships, state-backed Beijing News cited the ministry as saying.

As many as 55,000 fishing vessels entered the East China Sea and South China Sea as a 3½-month summer fishing moratorium ended on Friday, the report said.

The ministry said that it would step up patrols to ensure transport safety in those areas, according to the report.

Song Zhongping, a former instructor with the People’s Liberation Army, said that once the fishing ban ended, the risk of accidents increased in the busy waterways. He said there were now more fishing boats now operating in the Taiwan Strait, which was also an important global shipping lane.

“This is a necessary and timely protection measure for mainland, Taiwanese, and international ships and their crews,” Song added.

According to state news agency Xinhua, the mainland operation involved three public service ships from the Fujian Maritime Safety Administration and the East China Sea rescue bureau. Both bodies are under the jurisdiction of the ministry.

The patrol lasted 30½ hours and covered a total distance of 413 nautical miles (765km), Xinhua said.

This year’s operation covered a wider area than previous years, according to Yuyuan Tantian, a social media account affiliated with state broadcaster CCTV.

It extended to within 2 nautical miles east of the Taiwan Strait median line, reaching as far south as the Taiwan Shoal, an underwater bank at the southern end of the strait, Yuyuan Tantian said in a WeChat post on Sunday.

Taiwan said it had kept a watchful eye on the three mainland vessels as they crossed the strait median line, an unofficial barrier between the two sides.

“The vessels briefly crossed the median line around noon on Sunday before sailing back towards China. They did not enter Taiwan’s restricted waters,” the Taiwanese coastguard said in a statement on Monday.

Analysts said the moves indicated Beijing’s aims to assert its jurisdiction over the Taiwan Strait. Beijing, which sees Taiwan as part of China to be reunited by force if necessary, has also increased military patrols across the median line in recent years.

Fu Qianshao, a military analyst and former PLA officer, said Beijing might soon extend such maritime safety operations to the South China Sea, to protect the large number of fishing boats there.

It was also prepared to respond to any potential “provocative actions from foreign countries” to defend mainland Chinese maritime interests, Fu said.

Tensions have escalated in the South China Sea between rival claimants Beijing and Manila, with both sides on Monday trading “ramming” claims in the latest incident involving their coastguard vessels near the disputed Sabina Shoal.

In a decision passed at the Communist Party’s third plenum – a conclave held last month to set out long-term policy measures – Beijing pledged to improve joint management of the party, government, military, police, and civilian bodies to tighten land border and coastal defence.

The PLA, the mainland coastguard and other law enforcement agencies, including the Ministry of Transport, have increased activities in the South China Sea and near Taiwan in recent months.

These include PLA drills around Taiwan launched shortly after the inauguration of William Lai Ching-te from the independence-leaning Democratic Progressive Party as the self-governed island’s new leader in May.

It marked the first time that the China Coast Guard were included in the military drills.

Cross-strait relations remain strained since Lai was elected in January. Beijing says Lai is a “troublemaker” with a stubborn independence stance and has warned that he would bring the risk of war to Taiwan.

According to Yuyuan Tantian, maritime patrol and law enforcement operations in the Taiwan Strait have also achieved “multi-departmental” cooperation and military-police coordination.

Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute, said patrols using non-navy vessels allowed Beijing to “assert [its] presence [and] influence, and challenge other states’ interests but at a level that is short of war”.

He said these activities constituted “a ‘grey zone’ operation, which can be masked behind legitimate purpose, such as maritime safety patrols, and fishery inspections”.

China’s ties with Vietnam are a diplomatic priority, Xi Jinping tells To Lam on state visit

https://www.scmp.com/news/china/diplomacy/article/3275063/chinas-ties-vietnam-are-diplomatic-priority-xi-jinping-tells-lam-state-visit?utm_source=rss_feed

China reaffirmed its “high-level and strategic” ties with Vietnam are a “priority” in its neighbourhood diplomacy, as the leaders of the two countries met in Beijing on Monday.

Putting maritime disputes and concerns about stability in Hanoi on the back burner, Chinese President Xi Jinping thanked his Vietnamese counterpart, To Lam, for making China his first overseas trip since rising to general secretary of Vietnam’s ruling Communist Party.

“[The visit] fully reflects the great importance you attach to the relations between the two parties and countries, as well as the high level and strategic nature of China-Vietnam relations,” Xi said at the Great Hall of the People.

“I am willing to build a good working relationship and personal friendship with you, and jointly lead the construction of a community of destiny between China and Vietnam in a deeper and more practical way.”

Less than three weeks have passed since Lam was confirmed as the party chief, succeeding Nguyen Phu Trong, one of Vietnam’s most influential leaders who died on July 19 after 13 years as general secretary.

Xi spoke highly of Trong – describing him as “a good comrade and friend” – and of Trong’s contribution to bilateral ties, despite a deepening rift in the South China Sea between Beijing and Hanoi and Vietnam’s elevation of ties with the United States.

“China has always regarded Vietnam as a priority in its neighbourhood diplomacy, supporting Vietnam in adhering to the leadership of the party, following the path of socialism in line with the country’s national conditions, and pushing forward the cause of innovation, openness and socialist modernisation,” Xi was quoted as saying.

Xi also said Beijing and Hanoi “have maintained rapid economic development and long-term social stability, highlighting the superiority of the socialist system” in the face of “changes in the world, the times and history”.

He urged Lam to focus on developing “higher political mutual trust, more solid security cooperation, deeper practical cooperation, a stronger foundation of public opinion … and better management and resolution of differences”.

The reaffirmation of ties between the neighbours and rival claimants was in contrast to the tensions that flared again between China and the Philippines in the disputed waters on Monday.

Chinese and Philippine coastguard ships collided near Sabina Shoal in the Spratly Islands, with each blaming the other for the clash.

While both Hanoi and Manila are among the most vocal rival claimants in the South China Sea, Vietnam under Trong’s watch has managed to repair political ties with China, without playing up their differences on highly charged territorial issues.

Pundits said strong party-to-party relations, a personal bond between top leaders, and the shared commitment on both sides to communist ideology had helped to stabilise their ties after the diplomatic stand-off in 2014 over a Chinese deepwater oil rig in the waters.

Despite his poor health, Trong visited Beijing in October 2022, becoming the first foreign leader to meet Xi after he secured his third term at the Chinese Communist Party’s 20th national congress.

Xi repaid the trip with a state visit to Hanoi in December. During the trip, China and Vietnam elevated their ties to a “community with a shared future”, which Hanoi had resisted in the past mostly due to the maritime dispute.

During his meeting with Lam on Monday, the Chinese leader renewed Beijing’s pledges to “accelerate the promotion of railway, highway and port infrastructure” and to “actively explore” the expansion of other Chinese-funded projects under the Belt and Road Initiative.

They also signed a joint declaration and more than a dozen cooperation documents covering cross-border railways and other areas ranging from health, industry, finance, customs to party schools, news agencies and media, Chinese state news agency Xinhua said.

According to a mainland-based analyst, who spoke on condition of anonymity citing the sensitivity of the subject, Lam is Vietnam’s first leader since its founding revolutionary Ho Chi Minh to visit China as president and party chief.

But both Chinese and overseas observers said Beijing was clearly concerned about Vietnam’s warming ties with the US and the impact of its southern neighbour’s unprecedented political turmoil in the past months.

“I believe To Lam’s visit is intended to reassure China of Vietnam’s commitment to maintaining a cordial relationship, particularly in light of the recent political changes and leadership succession in Vietnam,” said Nguyen Khac Giang, an analyst at Singapore’s ISEAS-Yusof Ishak Institute.

Uncertainty has hung over Hanoi since the rise of Lam, a public security minister who oversaw a “blazing furnace” anti-corruption drive, and Trong’s death from a long unspecified illness.

Although the crackdown has been popular with the public – ensnaring 40 members of the party’s Central Committee since 2016 and removing three of Vietnam’s top five leaders since March – it has raised fears about a succession crisis and instability.

Lam, who arrived in the Chinese capital on Sunday after a brief visit to Guangzhou, also tried to reassure China that Beijing was a priority for Hanoi in its “bamboo diplomacy”, a phrase Trong coined about the country’s balancing act between Beijing and Washington.

In Guangzhou on Sunday, Lam was quoted by Xinhua as saying that “his party and country have always considered the development of relations with China as the top priority in their foreign policy”.

Although the South China Sea remains a top obstacle to bilateral ties, Giang said it was not expected to be a major focus during Lam’s visit, unless there was an emergency or a significant incident.

“From Vietnam’s perspective, the primary focus will likely be on economic cooperation, especially in areas such as investment and infrastructure development. This emphasis is evident in To Lam’s decision to visit Guangdong before heading to Beijing,” he said.

The mainland-based analyst said that given the growing political uncertainty in Hanoi ahead of a major power reshuffle in 2026, bilateral ties still faced major challenges, especially over the acrimonious maritime feud.

Hanoi protested in May over Beijing’s dispatch of a hospital ship to the Paracel Islands and followed in Manila’s footsteps by filing a claim last month with the United Nations for an extended continental shelf in the South China Sea beyond the existing 200 nautical miles.

To China’s dismay, a Vietnamese coastguard ship also took part in the first-ever joint drills in the Philippines early this month.

Alibaba’s long-awaited China stock link may provide timely boost

https://www.scmp.com/business/article/3275078/alibabas-long-awaited-china-stock-link-may-provide-timely-boost?utm_source=rss_feed

Chinese investors finally being able to buy shares of Alibaba Group Holding may provide a much-needed boost for the e-commerce firm’s stock, with an inflow of up to about US$20 billion into next year.

The company first hatched the plan for an upgrade to a primary listing in Hong Kong two years ago amid heightened tensions with the US. It may at last be realised by the end of the month, paving the way for it to join a programme that connects the Shanghai and Shenzhen bourses to the Hong Kong exchange.

This new source of funds via the so-called southbound link could support the shares, which have underperformed those of key rival Tencent Holdings amid concerns over the impact of competition and sluggish China consumption.

“We think the addition of Alibaba to the Stock Connect would have a positive impact on the stock and can help stabilise sentiment given that it is a household name among mainland investors,” said Marvin Chen, an analyst with Bloomberg Intelligence. Mainland holdings of the stock could reach double-digit percentages, similar to other tech giants, Chen added.

Shares of Alibaba are up only 2 per cent so far this year in Hong Kong, while major peers Tencent and Meituan are up 25 per cent each. China’s weak retail sales have hurt Alibaba’s key business, and price wars in cloud services are curbing the growth of a potential new driver. Alibaba’s American depositary receipts (ADRs) rose as much as 5.8 per cent Friday, their largest intraday gain since May.

On Thursday, Alibaba posted an anaemic 4 per cent rise in first-quarter revenue after its Chinese e-commerce business shrank for the first time in at least a year. Profit plunged 27 per cent, dispelling hopes of a quick turnaround.

The company originally devised the dual primary listing in 2022 amid fears of a potential delisting for its ADRs, a threat which subsequently receded. The next step for the plan is a vote by shareholders at the annual general meeting on August 22. If the upgrade to primary listing in Hong Kong is completed by the end of the month, the shares could join Stock Connect on September 9 at the earliest, according to Morgan Stanley.

“We expect some inflows but not major,” at about US$12 billion in the first six months after inclusion, or about 7 per cent of Alibaba’s total outstanding shares, analyst Laura Wang wrote in a note in June. Bloomberg Intelligence’s Chen sees up to around US$19.5 billion in inflows, though “this will take time to accumulate and the initial impact will not be as large”.

Share price performance for other Stock Connect joiners has been mixed. Xpeng and Kuaishou Technology declined in the month following the move. JPMorgan Chase quants strategist Xipu Han expects Alibaba to be more like Meituan, whose stock outperformed the benchmark in the month after inclusion, with trading volume growing 20 per cent in six months.

Of course how the stock does may hinge more on the company’s fundamentals and the environment in which it operates. But access for Chinese investors can add to momentum, especially amid the recent outflow of foreign funds.

Philippines slams China coastguard’s ‘dangerous’ clash with its ships near Sabina Shoal

https://www.scmp.com/week-asia/politics/article/3275080/philippines-slams-china-coastguards-dangerous-clash-its-ships-near-sabina-shoal?utm_source=rss_feed

The Philippine government on Monday slammed the “dangerous and illegal manoeuvres” of Chinese coastguard vessels that led to a collision with two Philippine coastguard vessels in Manila’s exclusive economic zone.

Analysts warn that the mild statement from the Philippines – issued by Jonathan Malaya, a spokesman for the multi-agency National Task Force on the West Philippine Sea (NTF-WPS) – could embolden China to carry out further provocations.

It has also raised concerns about whether the Philippines would seek stronger support from its allies or defuse tensions on its own over its longstanding maritime row with China.

The incident took place early on Monday morning near the disputed Sabina Shoal in the South China Sea.

In a statement, the Chinese coastguard (CCG) claimed the “deliberate” collision arose from the “unprofessional and dangerous” behaviour of the Philippine coastguard (PCG).

The CCG released two videos of the ramming incident on Monday near what Beijing referred to as Xianbin Jiao, its name for the Sabina Shoal.

The collision resulted in damage to two PCG vessels. No Filipino sailors were injured, according to media reports.

In response to China’s statements, Malaya criticised the CCG in a statement but stopped short of condemning Beijing over the incident.

Malaya urged China to observe “restraint and adherence to the United Nations Convention on the Law of the Sea (Unclos) and other relevant international laws to prevent further escalations and ensure the safety of all vessels operating in the region”.

The latest escalation in the dispute occurred 11 days after a Chinese air force plane fired a series of flares in the path of a Philippine air force plane.

In another incident two months ago, a Filipino navy man lost his thumb after the Chinese navy rammed a Philippine vessel. Chinese sailors boarded and vandalised several Philippine vessels while wielding spears and long knives, and seized firearms during the incident.

Malaya’s NTF-WPS statement also said two Philippine coastguard vessels were damaged in three collision incidents near the Escoda Shoal after being rammed by Chinese coastguard ships.

The Chinese state-owned Global Times, however, claimed that the incidents were provoked by the Philippine vessels, including one in which the BRP Bagacay allegedly rammed the Chinese ship CCGV 21551 at 3.24 am despite repeated warnings.

Malaya, however, rejected the Chinese coastguard’s version, saying the second collision happened at 3.40 am southeast of the Escoda Shoal, when BRP Bagacay MRRV-4410 “was rammed twice on both her port and starboard sides by CCGV 21551, leading to minor structural damage”.

Nearly 90 per cent of the Philippines’ exclusive economic zone falls under what China claims is its maritime territory within its so-called nine-dash line. An arbitral tribunal in The Hague ruled in 2016 that China’s claim had no legal basis under Unclos, a ruling not recognised by Beijing.

Retired Philippine Supreme Court associate justice Antonio Carpio told This Week in Asia on Monday that the Philippines could file a case before an Unclos tribunal and demand damages over the latest incident.

Foreign Secretary Enrique Manalo told the Foreign Correspondents Association of the Philippines on August 16 that Manila was not in a hurry to demand any compensation. The government was “still studying” how much to demand from China for damages, he said.

Manalo also said the provisional agreement reached with China during the latest round of bilateral talks only covered the Philippines’ resupply missions to the Ayungin Shoal – Manila’s name for the Second Thomas Shoal – and excluded other contested features in the South China Sea.

He declined to describe the situation in the South China Sea as “a flashpoint” but said it was a challenge to deal with the simmering tensions.

Ray Powell, a maritime security analyst, told This Week in Asia that China had attempted to block the Philippine vessels because it believed they were going to the Sabina Shoal, which “provided the pretext for its aggressions” there.

Powell, a retired American air force colonel who heads Stanford University’s Sea Light project, told This Week in Asia: “Beijing’s propaganda has been telegraphing its intent to aggressively blockade the Sabina Shoal for much of the past week. For several months, it has been drawing parallels between the BRP Teresa Magbanua, the Philippine coastguard’s ship anchored there, and the grounded BRP Sierra Madre at the Second Thomas Shoal.”

By doing so, China has moved the frontlines of the maritime spat to within 75 nautical miles of the Philippine coastline, according to Powell.

“The Philippines will again be challenged to consider whether now is the time to look to its US ally for more direct support,” he added.

On Monday, US envoy to Manila MaryKay Carlson posted on ‘X” that Washington was in solidarity with Manila and condemned the incident. “We are committed to supporting the rights of our #FriendsPartnersAllies under international law.”

The Akbayan opposition party called China a “bully” in a statement, dismissing Beijing’s “absurd” claim that Filipino sailors were responsible for the incident.

The US had previously offered its help after the June 17 incident but the Philippine military turned it down.

Lucio Blanco Pitlo III, a research fellow at the Asia-Pacific Pathways to Progress think tank in Manila, told This Week in Asia that China was likely wary of Philippine vessels being in the Sabina Shoal area, similar to Beijing’s presence in the Scarborough Shoal. On the other hand, the Philippines was concerned that China could build structures on the Sabina Shoal just as Beijing did previously for the Mischief Reef, Pitlo said.

Pitlo, currently a visiting fellow at Taiwan’s Department of Diplomacy at National Chengchi University, said the Sabina Shoal was a strategic point for Manila’s resupply missions to the Second Thomas Shoal.

“Chinese control of Sabina may further isolate Ayungin Shoal [Second Thomas Shoal] and bring Beijing closer to the coast of Palawan. The reported presence of damaged or dead corals in Sabina stoked fears that China may do another fait accompli in the unoccupied reef.”

China’s selective shoppers embrace members-only retailers like Walmart’s Sam’s Club

https://www.scmp.com/economy/economic-indicators/article/3275043/chinas-selective-shoppers-embrace-members-only-retailers-walmarts-sams-club?utm_source=rss_feed

While traditional brick-and-mortar supermarkets struggle amid the rise of e-commerce, Linda Wang from Shanghai still visits Sam’s Club, a membership-only bulk retailer owned by Walmart, the world’s largest retailer.

“Their selection feels more curated,” said Wang, a corporate executive who spends an average of more than 1,000 yuan (US$140) each time she shops for her family of four.

“Unlike traditional supermarkets, where there are just too many options, and you end up feeling overwhelmed by the choices, when you shop at Sam’s Club, you start developing this habit of trusting that they’ve already done the selection for you.

“They have their own brands, the ones with the Sam’s Club label. And you just trust that their private-label products are definitely of good quality and reasonably priced.”

As China’s retail landscape continues to evolve, membership-only bulk retailers such as Sam’s Club have emerged as key players catering to a growing middle class that values quality and exclusivity.

And locations on the mainland also appeal to Hong Kong residents looking for quality goods at bargain prices.

Other members-only retailers such as Costco and Alibaba’s grocery brand Hema Fresh, have also been burgeoning in China’s big cities in recent years. Alibaba owns the South China Morning Post.

Sam’s Club has carved out a niche role by offering a curated selection of goods, appealing to consumers willing to pay a premium for convenience and trusted brands.

This strategy helped fuel Walmart China’s 17.7 per cent sales growth in the second quarter of the current fiscal year, outpacing the global average of 4.8 per cent, according to its second-quarter earnings report released last week.

The company also revealed that Walmart China’s quarterly net sales reached US$4.6 billion, or about 33 billion yuan, and said this was fuelled by the rapid growth of Sam’s Club and its e-commerce business, with Sam’s Club seeing increased foot traffic, a record number of members, and a 23 per cent year-over-year rise in membership income.

Middle-class consumers desire quality goods that are rarely found in traditional grocery stores, including imported meat and produce, and they are willing to pay a membership fee at bulk retail stores such as Sam’s Club and Costco for an upmarket shopping experience.

Sam’s Club has nearly 50 stores in China, with plans to open six to seven new ones a year.

Beyond mainland China, Sam’s Club has also become a destination for shoppers from Hong Kong, drawn by the promise of relatively low prices and good quality, especially at stores in the Greater Bay Area.

Thanks to the scheme that allows private cars from Hong Kong to travel between Hong Kong and Guangdong via the Hong Kong-Zhuhai-Macau Bridge, Hong Kong shoppers can spend more freely at Sam’s Club locations in the Greater Bay Area.

William Au, 53, is among the Hong Kong residents who have frequented Sam’s Club in Shenzhen and Zhuhai over the past year.

“Every time we go to Zhuhai, we shop at Sam’s Club and we notice that almost half of the cars parked there have Hong Kong plates,” said Au, a Hong Kong university lecturer, adding that his family spends about 800 to 1,000 yuan on each visit to Sam’s Club, largely on groceries, as prices tend to be lower than in Hong Kong.

Where did Alice Guo? Philippine mayor who allegedly spied for China has fled country: senator

https://www.scmp.com/week-asia/politics/article/3275083/fugitive-former-mayor-accused-being-chinese-spy-already-fled-philippines-senator?utm_source=rss_feed

Alice Guo, the fugitive former Philippine town mayor accused of being a Chinese spy and having links to organised crime groups, may have left the country in July, according to evidence presented by a lawmaker on Monday.

Senator Risa Hontiveros, who led the Senate hearing committee that grilled Guo’s links to criminality involving Philippine offshore gambling operators (Pogos) as well as her citizenship, revealed information that Guo left the country last month and travelled to Kuala Lumpur.

As proof, Hontiveros presented the Senate with an immigration entry card that Guo supposedly used to enter Malaysia that showed she entered Kuala Lumpur past midnight on July 18.

The senator added that one of her sources had told her Guo had then travelled to Singapore where she met her father, as well as her suspected mother and brother, who reportedly flew in from China.

“Who allowed this travesty to happen? Who is responsible for this? Alice Guo would not have been able to leave if there was no government official helping her,” Hontiveros said, adding that the situation felt like they were being “cooked in their own grease.”

The revelation comes a week after Guo was dismissed from her position as mayor of Bamban, a town in Tarlac province, and barred from holding public office for life by the ombudsman, which investigates government officials accused of crime.

Guo’s lawyer Stephen David said they planned to appeal the dismissal after the ombudsman found the mayor guilty of “grave misconduct” for her ties to the gaming firm found in her hometown.

Yet the Department of Justice denied Hontiveros’ claim that Guo left the country, saying that they did not receive reports of any attempted departure from the Bureau of Immigration.

Guo had also reportedly filed a motion in her case before the Department of Justice on Friday, attaching a notarised counter affidavit dated August 14, Justice officials said.

Justice undersecretary Nicholas Ty added that law enforcement agencies reported sightings of Guo after July 18.

Yet senator and broadcaster Raffy Tulfo said that it was still possible that Guo boarded a private plane to flee the Philippines.

“Passengers who want to fly abroad in a chartered plane no longer have to go through the process and go through immigration. You just go straight through the gate with your limousine, SUV, and once you hit the tarmac, you just board your plane,” Tulfo said.

Guo came under fire after authorities in March raided an 80,000-square-metre Pogo facility in Bamban, the town in Tarlac province where she holds the office of mayor. During the raid, nearly 700 workers were rescued and evidence of criminal activities, such as scamming operations, was uncovered.

Authorities found a billing statement and a vehicle registered to Guo’s name during the raid and later discovered that the mayor partly owned the land on which the compound was built.

Previous investigations revealed that Guo owned the property that Hongsheng Gaming Technology – later renamed to Zun Yuan – was leasing and previously secured a no-objection letter from the Bamban municipal council in 2021, part of the requirements needed for the firm to establish operations.

The National Bureau of Investigation’s fingerprint test also found that her prints matched those of Guo Hua Ping, who entered the Philippines from China as a young teen with her family in 2003 on a special investor resident visa.

Doubts about Guo’s identity first surfaced after she admitted during a Senate hearing on May 7 that her birth certificate was only registered when she was 17 and she had no educational records, claiming that she was home-schooled.

In a social media post published on July 18 – the same date as her supposed departure from the Philippines – Guo explained that she had stopped attending the senate hearings due to “severe exhaustion and trauma”.

Hontiveros raised the possibility that law enforcement agencies in charge of apprehending Guo may need to be investigated.

“What if law enforcement [agencies] need to be investigated? What if they dropped the ball? The Bureau of Immigration promised us that they would not allow Guo Hua Ping to leave the country, but she’s already gone,” she said.

The lawmaker added, “If we do not find a solution to this, as an institution, as a country, it would be as if we allowed ourselves to be slapped in the face by this foreigner who has continuously debased our laws, policies, and processes.”

Luxury properties defy China’s slumping home sales as big-city buyers splash out

https://www.scmp.com/business/china-business/article/3275032/luxury-properties-defy-chinas-slumping-home-sales-big-city-buyers-splash-out?utm_source=rss_feed

China’s premium property market is in the midst of a recovery despite the gloomy mass market, as two luxury projects in Shanghai sold out soon after they were launched over the weekend.

A batch of 110 flats at One Sino Park, developed by Sunac China Holdings, sold out within two hours of launch on Saturday, pulling in 5.7 billion yuan (US$798 million). Located in Huangpu district, the project, priced at 171,000 yuan per square metre (15,886 yuan per square foot), was nearly double subscribed ahead of the launch.

In nearby Putuo district, Yuexiu Property’s Suhe Grand Mansion also sold all 124 flats it offered on Saturday, attracting 350 subscriptions before the launch despite a price of 103,570 yuan per square metre. The average price of new homes sold in Shanghai in July was 64,466 yuan per square metre, according to real estate information provider Fang.com.

The successful sales continue a trend of robust performance by luxury projects so far this year, despite the country’s downtrodden property sector. Homebuyers snapped up 1,544 luxury homes with prices above 30 million yuan in Shanghai in the first half of the year, the highest in 10 years, CRIC data showed.

Overall, China’s property market suffered the 14th consecutive month of decline in new home prices in July, and the country’s top 100 developers recorded a 40 per cent drop in home sales in the first six months to 1.85 trillion yuan, according to China Real Estate Information Corp (CRIC).

Over the first six months this year in Shanghai, 20 out of 23 premium residential projects – priced at more than 100,000 yuan per square metre – sold more than 70 per cent of their inventory on the launch date, CRIC added.

Nor has the strong performance been limited to Shanghai. A total of 500 luxury homes priced at 20 million yuan or more in Beijing, Shanghai and Shenzhen changed hands in July, a 28 per cent increase compared with a year earlier, according to Shanghai-based E-house China Research and Development Institute.

The premium residential segment is the hottest property category, with transactions growing for seven consecutive months this year, an analysis from E-house showed.

“The rebound in the luxury market sends a signal of recovery in the current cycle,” said Yan Yuejin, vice-president for E-house. “Still, the divergence between the luxury market and the mass market remains huge. It also reflects the risk-averse sentiment from buyers, as premium residential projects always demonstrate more resilience amid market downturns.”

An increase in the supply of premium properties, as well as lower prices offered by developers that want to clear their inventories quickly, have provided a huge boost to market sentiment, he added.

“The robust sales for luxury projects will help developers with their balance sheet, and those with good transactions will also be the main force of buying land in future,” he said.

One Sino Park also sold all 204 units in a batch of flats it made available in April. Combined with the results on Saturday, the project has reaped 15.6 billion yuan.

Driven by the strong sales, Sunac said it plans to launch the project’s remaining 158 units in the fall. The developer also opened subscriptions for another luxury project on Friday.

2 more top Chinese football officials netted in corruption crackdown

https://www.scmp.com/news/china/politics/article/3275038/2-more-top-chinese-football-officials-netted-corruption-crackdown?utm_source=rss_feed

China on Monday handed down two more severe sentences to former senior sports officials involved in the sector’s nationwide corruption scandal.

Li Yuyi, a former vice-chairman of the Chinese Football Association (CFA), was sentenced to 11 years in prison, The Beijing News reported.

He was convicted of taking bribes worth over 12 million yuan (US$1.7 million) between 2004 and 2021, according to the Communist Party-backed paper.

Besides being CFA head, Li was the party secretary and head of Shanghai’s Jinshan district, and held several other senior roles during those years.

In its verdict, an intermediate court in central China’s Hubei province said that that Li did favours for football clubs facing relegation, and also helped companies to secure construction projects during his leadership of Jinshan, the CFA, and the Chinese Super League Company – which handles commercial matters for the eponymous major professional football league.

A separate court in Hubei handed down a 11-year sentence to Fu Xiang, a former director of the sport’s administrative centre in provincial capital Wuhan and vice-chairman of the Wuhan Football Association.

Fu was guilty of embezzlement, taking and giving bribes, according to state news agency Xinhua. The court statement did not specify the time frame when the crimes were committed.

Li’s case dated back among the farthest in the long list of high-profile officials investigated and sentenced over the past year or so.

While the officials on the list belonged to a range of sports administrations – ranging from track and field and rowing to winter sports – the high-profile football sector has taken centre stage in the investigations, with allegations including bribery and match-fixing.

The most severe penalty thus far has been the life sentence handed down in March to Chen Xuyuan, who was CFA chairman from 2019 to 2021. The court said he had accepted bribes “in particularly large amounts” and “seriously damaging fair competition and order in the football sector”.

He was found guilty of taking bribes worth 81.03 million yuan between 2010 and 2023. This included his term as the president and chairman of Shanghai International Port Group (SIPG) from 2010 to 2019 before he took the helm at the CFA.

SIPG owns the football club that bears the same name and won the Chinese Super League in 2018.

At least three other senior national football officials received heavy court penalties for corruption this year, including former CFA executive deputy secretary general Chen Yongliang; former CFA vice-chairman and ex-president of the Chinese Athletics Association, Yu Hongchen; and former CFA Super League general manager Dong Zheng.

Liu Lei, the former head of the competition department at the Wuhan Football Association, where Fu served as vice-chair, received a 30-month jail sentence in March. The association is in charge of organising football games and training programmes around the city.

An investigation was announced into Ma Chengquan, an ex-chairman of the Chinese Super League Company, at the same time as that for Li Yuyi.

Ma’s trial began in March but a verdict has yet to be announced, according to party mouthpiece People’s Daily.

In another high-profile case, Li Tie, the former head coach of the men’s national football team and a former English Premier League player, is awaiting sentencing after pleading guilty in April to accepting more than US$10 million in bribes between 2017 and 2021.

23,000 mainland Chinese obtain multi-entry 30-day talent visas to visit Hong Kong

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3275050/23000-mainland-chinese-obtain-multi-entry-30-day-talent-visas-visit-hong-kong?utm_source=rss_feed

More than 23,000 mainland Chinese people have obtained multi-entry talent visas allowing them to stay in Hong Kong for up to 30 days to take part in technology, innovation, culture and education-related activities since the policy rolled out in February of last year, according to Beijing’s immigration authorities.

Peng Ling, head of the Immigration Administration’s exit-entry management authorities, shared the latest figure on Monday, which marked an increase from data released in mid-April that logged 18,000 successful candidates.

“With this visa, they have sufficient time to engage in scientific research exchanges, academic discussions and other activities in Hong Kong, effectively promoting the free, convenient and efficient flow of talent and technology,” she said at a regular media briefing in the nation’s capital.

Central authorities launched the scheme in February 2023, allowing mainland talent in science, technology, innovation, culture and education sectors to apply for multi-entry visas valid for one to five years that granted stays of up to 30 days each in Hong Kong and Macau.

In comparison, the duration of stay is typically seven days for other types of exit endorsements.

Beijing began launching a string of more flexible visa measures between Hong Kong and the mainland in early 2023.

Other policies include an extension of the duration of stay for business visits to Hong Kong from seven days to 14, the introduction of multi-entry “northbound” visas for foreign employees working in the city and a five-year multi-entry mainland travel permit for Hong Kong’s 270,000 permanent residents who hold foreign passports.

Peng said more than 30,000 requests had been filed for the new permit for Hongkongers with foreign passports since applications launched on July 10.

“Permanent residents holding foreign passports are the builders and contributors to Hong Kong society. Granting them the permits is a significant reform measure that fully and accurately implements the ‘one country, two systems’ principle,” Peng said.

She said the new permit had actively responded to the new needs and expectations of Hong Kong society, and comprehensively accelerated institutional-level opening up in the field of entry and exit.

Peng added that around 312,000 Hong Kong residents had applied for home return permits to the mainland since October 2020, when Beijing launched the policy to simplify the replacement and reapplication process.

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Critics of China Olympic diving queen Quan Hongchan slammed for ‘uneducated idiot’ insults

https://www.scmp.com/news/people-culture/china-personalities/article/3275016/critics-china-olympic-diving-queen-quan-hongchan-slammed-uneducated-idiot-insults?utm_source=rss_feed

China’s newest Olympic diving star, Quan Hongchan, has faced hostile questions from sections of the media who have described her as an “idiot” and suggested she lacks education.

In response to the negative line of questioning, fans of Quan, who is just 17, have rallied behind the young athlete who now holds a position in world diving that belies her age.

To date, she has won five world championships and three Olympic golds, earning her the affectionate title of “Diving Queen”.

On August 7, during a post-event interview at the Paris Olympics, a journalist tried to teach Quan how to speak English.

In Mandarin, the reporter asked her: “You always say ‘the Paris Olympics is a piece of cake’. Do you know how to say this sentence in English? Let me teach you.”

Quan’s response was polite, yet distant: “No need, I don’t want to know.”

Later, during a live-stream, Nanfang Daily sports reporter Zhu Xiaolong accused the youngster of being unwilling to learn English and implied that she was not bright.

Zhu said Quan was not interested in studying, adding: “Learning English is a good way to communicate with other athletes on the international stage.

“She is undoubtedly an excellent athlete. But as a person, she is still not fully developed. Quan is too young to handle many things well. Can she survive without diving in the future? Quan can’t keep acting like an idiot.”

Zhu also criticised Quan for pouting, shaking her head, and wiggling her fingers when she excitedly showed her gold medal to a German athlete, describing the behaviour as “crazy”.

The criticisms, which have become a hot topic online attracting more than 140 million views on Weibo, have sparked a wave of outrage.

Many people, fans and observers alike, have rallied behind Quan.

One Weibo user wrote: “This reporter is so unprofessional! How can he describe Quan as an ‘idiot’? This is insulting to an athlete who brings glory to the country.”

“Quan has dedicated the best years of her youth to diving. It’s completely understandable that she hasn’t had time to learn English or other things,” said another.

While a third person said: “She still has a long road ahead for learning after retirement. She can take her time.”

On August 15, Nanfang Daily issued a statement saying that Zhu’s inappropriate remarks about the athlete were made during an unauthorised live-stream, and said he would face punishment.

Quan was born in a modest village with a population of 3,000 in southern China’s Guangdong province to parents who were orange farmers and factory workers.

After her mother was injured in a car accident, she focused on becoming a star to earn money to pay for the treatment.

The teenager’s playful innocence always shines through.

During the Paris Olympics, Quan became a standout figure by sporting funny fish slippers, Olympic rings glasses during a post-event interview, and a backpack adorned with an array of stuffed animals.

Her answers to media questions are always genuine, straightforward, and unfiltered.

During one interview, a reporter asked: “People are impressed by the success you have achieved, but do you ever feel tired?”

Quan replied: “What kind of question is that? Who doesn’t get tired? Don’t you feel tired at work?”

Many people have also praised Quan for “daring to speak the truth”.

In another interview with the state television broadcaster CCTV, Quan said that she was not very happy despite winning gold medals in two Olympics.

Her bigger concern was for fellow diver Chen Yuxi, who secured the silver medal: “Chen trained very hard too. I wonder if it was wrong for me to win the gold medal,” said Quan.

On August 16, she returned to Guangzhou to visit a zoo and coverage of her interactions with the animals has touched the hearts of many online.

Quan has already attracted 2.1 million followers on Weibo.

One Weibo user wrote: “The Olympics are over! Take a good break little sister Quan. Don’t need to care about these nasty comments about you. Just be yourself.”

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China’s relaxed visa rules pay off as more overseas travellers arrive

https://www.scmp.com/news/china/diplomacy/article/3275056/chinas-relaxed-visa-rules-pay-more-overseas-travellers-arrive?utm_source=rss_feed

The number of travellers into China more than doubled in the first seven months of the year after Beijing eased visa rules for foreigners to try to revive its economy.

The National Immigration Administration said on Monday that from January to July, 17.254 million foreigners entered the country through various ports, a year-on-year increase of 129.9 per cent.

About 846,000 of those people entered China on “port visas” – visas issued on arrival – up 182.9 per cent on the same time last year.

The administration said the higher numbers were expected to amount to more than 100 billion yuan (about US$14 billion) in direct spending.

After three years of Covid-19 restrictions, China reopened its borders in January last year.

It also began easing visa rules for overseas travellers, granting exemptions for visitors from 12 nations in Europe and a few in Southeast Asia.

Visitors from 54 countries including the United States and 40 of those in Europe are also allowed to stop for up to 144 hours as they transit via 37 ports in China. In addition, foreign businesspeople can apply for a visa on arrival at 100 ports across 73 cities in the country.

Eligible foreign professionals going to China for business and cooperation on technology can apply for multiple entry visas valid for between two and 10 years.

As its economy tried to recover from the pandemic and tensions rose with the West, China reported a general decline in overseas visitors and investment.

One of the brighter spots, though, was the Belt and Road Initiative, the country’s flagship international infrastructure drive, which started to regain some momentum as the trillion-dollar development scheme entered its second decade last year.

The immigration administration said a total of 10.66 million people from countries taking part in the belt and road entered and exited China in the first half of this year, the number for the same time last year.

More than 200 special channels at 24 ports have been set up to enable visitors from these countries clear customs.

A key element of the belt and road is transcontinental rail freight.

The administration said 78,000 border inspection and freight customs clearances were carried out for China-Europe express trains, 23.4 per cent more than a year earlier. Using this rail system, fruit and vegetables from China could now reach Europe 30 days sooner than via sea routes.

Other services have been launched to help foreigners living in China.

In December, authorities started issuing new foreign permanent resident ID cards, enabling holders to check in at airports, high-speed train stations, and hotels without presenting their passports.

The cards can also be used as ID to pay for utilities via platforms such as Alipay and WeChat, putting the documents on a par with those held by Chinese citizens.

In July, mainland authorities also opened up cross-border travel permits to foreigners who are permanent residents of Hong Kong or Macau, allowing them to stay on the mainland visa-free for up to 90 days. More than 30,000 people had applied for the permits, the administration said.

More than 300,000 Hong Kong or Macau residents have been able to apply for their mainland travel permits from the mainland, rather than having to complete the process in their home city.

At the same time, nearly 800,000 travel permits have been issued to Taiwanese residents this year. The administration said the number of residents from the island who applied to live in Fujian province exceeded the total of the past 10 years.

China’s first AAA game Black Myth: Wukong has both fans and brands excited

https://www.scmp.com/tech/big-tech/article/3275044/chinas-first-aaa-game-black-myth-wukong-has-both-fans-and-brands-excited?utm_source=rss_feed

Ahead of Tuesday’s release of China’s first AAA video game, Black Myth: Wukong, Chinese brands are rushing to link themselves to the highly anticipated title through partnerships and product tie-ins.

Lenovo Group, Luckin Coffee and Didi Bike are among those giving their products a design makeover drawing inspiration from what could become China’s first blockbuster game to become a global hit, generating excitement among domestic gamers.

Inspired by the classic Chinese novel Journey to the West, the action role-playing game from Hangzhou-based studio Game Science is already receiving rave reviews, placing it among the best-rated titles to come out of China and putting it in league with hits such as Activision Blizzard’s Diablo IV and Microsoft’s Halo Infinite.

Unlike other major Chinese titles, Black Myth is one of the first to spend years in development with much of its large budget going toward advanced graphics for computer and console gaming – a classification known as AAA. Two years after development started, Game Science first unveiled a 13-minute demo reel in 2020, attracting widespread attention for its fluid combat scenes and cinematic visuals. Earlier this month, the studio released its final pre-launch trailer, generating more buzz and racking up more than 14 million views on the Chinese streaming site Bilibili and 1 million on YouTube.

“I’ve played a lot of games since I was a kid, but most of them were based on Western culture, so I’m very excited to finally be able to play a game purely based on Chinese culture,” said Eric Wu, a sophomore at Guangzhou University. Wu bought the game for Sony’s PlayStation 5 on June 8, the first day of pre-orders.

Wu added that he is looking forward to the combat and monster designs, as well as the graphics and art style based on traditional Chinese culture.

“As a video game fan, I can’t wait to play and show my support to the first home-made AAA video game,” said Ors Xing, a student at the City University of Macau.

“Last year, I already watched the demo reels, and I’ve read a few other views of the title,” said Xing, who bought the game on Steam in June. “All of them make me feel confident about this home-made game.”

With years of brewing excitement, the game has found willing corporate partners such as Luckin Coffee, a local Starbucks competitor that this week started offering drinks with special handbags and promotional gift cards. Luckin’s announcement on the microblogging platform Weibo garnered more than 396,000 likes and more than 5,400 comments.

Didi Bike, the bike-sharing service from China’s ride-hailing giant Didi Chuxing, said it is also cooperating with Game Science on a batch of specially decorated bikes featuring elements from Black Myth. Didi also made its announcement on Weibo, but did not specify when or where these bikes will be available.

Personal computer maker Lenovo is the global partner for the game through its gaming PC brand Legion. It is offering special-edition desktops and laptops with a design based on the game to coincide with its release this week.

As of Monday, Black Myth had received 54 reviews from professional game reviewers, earning a score of 82 on Metacritic, a review aggregator. That places it among the top-ranked Chinese games of all time, which are often free-to-play titles that derive revenue from the sale of in-game items, such as miHoYo’s Genshin Impact and Tencent Holdings’ PUBG Mobile.

Black Myth follows the more traditional business model for AAA games, selling for US$60 on Steam in the US. The best-ranked AAA titles on Metacritic are still from Western and Japanese firms, such as FromSoftware’s Elden Ring and Nintedo’s The Legend of Zelda: Tears of the Kingdom, which both have scores of 96.

Since development started, Black Myth has been the subject of some controversy. Social media posts from the CEO and developers at Game Science containing misogynistic remarks circulated online, drawing backlash from gaming communities when reported by IGN, one of the biggest video game news websites based in the US.

US-China financial working group seek to ‘strengthen’ cooperation in times of stress

https://www.scmp.com/economy/global-economy/article/3275045/us-china-financial-working-group-seek-strengthen-cooperation-times-stress?utm_source=rss_feed

Senior finance officials from China and the United States agreed to carry out timely communication in times of financial stress to reduce uncertainty during a two-day meeting in Shanghai last week.

On Monday, the People’s Bank of China said the fifth meeting of the Financial Working Group held “professional, pragmatic, candid and constructive” talks on Thursday and Friday.

The central bank said the two sides signed an agreement to “strengthen” financial stability cooperation and exchanged lists of contacts, aiming to “enable the financial management departments of both sides to maintain timely and smooth communication channels” when financial institutions are facing operational risks and in times of financial stress events.

It was their first set of meetings since China’s tone-setting third plenum concluded last month.

The working group was co-chaired deputy central bank governor Xuan Changneng and Brent Neiman, the assistant secretary for international finance at the US Department of the Treasury.

On Saturday, in a post on X, the social media site formally known as Twitter, Neiman confirmed he was “Just back from the 5th meeting of the US-China Financial Working Group in Shanghai”.

It was also attended by officials from the National Financial Regulatory and Administration and the China Securities Regulatory Commission, as well as the US Federal Reserve and the US Securities and Exchange Commission, the statement added.

During the meetings, the two sides discussed reform plans outlined in the communique issued following the third plenum – a high-level meeting held roughly once every five years to map out the general direction of China’s long-term social and economic policies.

They also communicated over the economic and financial situation, monetary policies in China and the US, financial stability and supervision, securities and capital markets, as well as cross-border payments and data.

International financial governance, financial technology, sustainable finance, anti-money-laundering and counterterrorist financing were also discussed, according to the statement.

The first financial institution round table was also held during the two-day meeting, which involved Chinese and American financial institutions, and focused on sustainable finance, sharing respective experiences and practices, and exchanging views on potential cooperation opportunities, it added.

A “technical expert group” also presented a report on a resolution mechanism for each global systemically important bank, the operational resilience of financial institutions, climate risk stress testing and supervision on cross-border payments and settlement.

The US side had intended to discuss financial stability, issues related to cross-border data, lending, payments and private sector efforts to advance transition finance, according to Neiman, The New York Times reported at the start of last week.

He had also said the conversations with China would include concrete steps to improve communication in the event of financial stress

Although communication between China and the US have improved over the past year, the economic relationship remains fraught over disagreements, including over industrial policy and advanced technology investments.

The financial working group, along with an economic equivalent, was launched in September after a visit to Beijing by US Secretary of the Treasury Janet Yellen, with both groups aimed at fostering regular communication.

The first meetings took place in October, with both working groups reporting directly to Vice-Premier He Lifeng and Yellen.

Chinese team thinks ‘outside the box’ to find a cool solution to hypersonic heat

https://www.scmp.com/news/china/science/article/3274827/chinese-team-thinks-outside-box-find-cool-solution-hypersonic-heat?utm_source=rss_feed

A Chinese military research institute says it has developed an efficient way to control one of the biggest challenges to hypersonic flight: searing heat.

The new cooling device can operate for up to 2½ hours – significantly longer than previously reported solutions and enough for a journey from one side of the Earth to the other.

It has a simple structure and the cost is relatively low because it does not have complex components like heat pipes or booster pumps. And it is reusable – it just needs clean water added before each flight.

The team behind it was led by Li Shibin, an assistant researcher with the National University of Defence Technology’s College of Aerospace Science and Engineering in Changsha, Hunan.

They reported on their invention in the Journal of National University of Defence Technology this month.

“The system effectively utilises the thermal energy generated by aerodynamic heating as the driving force for the active cooling cycle, achieving autonomous pressurisation and cooling of the heat control device,” the paper said.

“It ensures the normal operation of critical components in special sections under long-duration flight conditions and meets the design objective of efficient thermal utilisation for hypersonic aircraft.”

China is in a race with the United States and Russia to develop hypersonic capabilities. It has conducted test flights of long-duration, long-range hypersonic unmanned aircraft and aims for crewed global flights by 2035.

There is also a rush to develop hypersonic weapons, which can travel at more than five times the speed of sound within the atmosphere and have unpredictable trajectories – making them difficult to intercept.

China unveiled the world’s first hypersonic glide missile, the DF-17, five years ago. The US Army tested a similar weapon, the C-HGB, this month and hopes to get production approval soon.

But flight duration is limited. Some estimates say the C-HGB can fly for less than half an hour, with a range of about 3,000km (1,860 miles), while China’s new hypersonic weapons can enter and exit the atmosphere multiple times, with a global range, flight time of over an hour and a top speed close to Mach 20.

These weapons pose new challenges for thermal management.

“In high-speed flight environments, the heat flux density on the aircraft’s surface increases rapidly to the power of three of the flight speed,” Li and his team wrote in the paper. “Especially under long-duration conditions, the accumulation of aerodynamic heat makes thermal protection a crucial factor affecting the success or failure of the project.”

Traditional cooling approaches no longer work in these conditions. To find a solution the team said they had to “think outside the box”.

Their cylindrical cooling device was designed for the new generation of hypersonic aircraft and underwent ground tests in 2022 or earlier, according to the paper.

The bottom of the cylinder is in contact with the underside of the aircraft, where it heats up. During flight, that heat moves to the top of the cylinder, while cooling water flows clockwise inside the device, driven by the pressure produced by temperature-sensitive components. A water storage container at the top is filled with an aerogel that can absorb water.

Testing has shown that the device can control the cabin temperature to below 100 degrees Celsius (212 degrees Fahrenheit) during the first 50 minutes of flight, according to the paper. After that, the coolant starts to boil and vaporise, transferring heat at a faster speed until it reaches peak efficiency by the 66th minute.

At this point, high-temperature steam is slowly released from a pressure relief valve and the porous structure of the aerogel ensures a stable and prolonged vaporisation process. The aerogel also provides thermal insulation, keeping the cabin temperature low even after the water evaporates.

Li’s team said their device was simpler than high-temperature heat pipes that use liquid metal as a cooling medium. They also claim it would be easier to put into practice than active cooling systems driven by external forces such as devices that simulate perspiration.

“Without increasing system complexity, it can maximise the use of a cooling medium to absorb and release heat in different phases, achieving optimal temperature control,” the scientists said.

Since hypersonic flight requires an extensive and complex thermal management system, the new device would need to be used in conjunction with other thermal protection technologies such as high-temperature-resistant coatings and lightweight insulation structures.

The device would be suitable to cool critical areas including air rudders and important electronic equipment, according to the team.

A US congressional investigation last year found that inadequate cooling systems were the main reason the United States is lagging behind China on hypersonic weapons.

“The fundamental remaining challenge involves managing the extreme heat that hypersonic missiles are exposed to by travelling at high speeds in the atmosphere for most of their flight,” said the congressional report released in January 2023.

“Shielding hypersonic missiles’ sensitive electronics, understanding how various materials perform, and predicting aerodynamics at sustained temperatures as high as 3,000 degrees Fahrenheit require extensive flight testing,” it said. “Tests are ongoing, but failures in recent years have delayed progress.”

China swimmer saves drowning father and son, tells them to thank Taiwan singer Richie Ren

https://www.scmp.com/news/people-culture/trending-china/article/3274966/china-swimmer-saves-drowning-father-and-son-tells-them-thank-taiwan-singer-richie-ren?utm_source=rss_feed

A Chinese man who saved a father and son from drowning said they should not thank him, but to be grateful to his idol, Taiwanese singer Richie Ren instead.

The Good Samaritan, Liu Zhongpeng, rescued the pair at a seaside resort in Dalian in northeastern China’s Liaoning province, on August 10.

Liu was playing with his toddler daughter on the beach when he heard a man calling for help in the sea. He immediately dived into the crashing waves and brought the father and his son to the shore.

He said the pair were reckless for swimming among the big waves without life jackets

Liu, who lives in Shenyang city in the northeastern province of Liaoning, said he and his family were only in Dalian that day because they were going to a Richie Ren concert.

“Do not thank me. Thank Richie Ren,” he wrote on Douyin, adding: “I wouldn’t be here if he hadn’t been.”

To Liu’s surprise Ren found out about his good deed and invited him to his next concert in Shanghai in September.

On August 14, Ren thanked the “brother who saved life”, and looked for him on Douyin. The post went viral and attracted 6 million views on the platform.

Liu then posted in the comment section: “I dreamed about becoming friends with you two times recently, and I cannot believe my dreams have come true.”

“Helping others makes me happy,” he said.

Ren posted another video the next day, thanking Liu Zhongpeng and giving safety reminders to those who play on beaches.

The interactions between the fan and his idol have moved many online.

Liu, 36, is a loyal fan who uses Ren’s music as the background for most of the videos he posts on Douyin.

Taiwanese singer and actor Richie Ren, 58, became a household name in 1997 for his hit song “Too Softhearted”.

He captivated many fans in the 1990s and early 2000s for several songs such as The Sad Pacific, Girl Look This Way and Wave after Wave.

The evergreen star is also admired for his compassion and generosity.

He donated money to build roads and libraries in his father’s hometown Wuhan, in central China’s Hubei province in the 1990s when the region was less developed.

In 2020, when Covid-19 was first reported in Wuhan, he immediately donated 1 million yuan (US$139,000) and 200,000 masks to the city.

Ren, who is an enthusiastic cyclist, went to China’s alpine region to donate 500 bikes to children there in 2013 so they could commute to school more easily.

Last year, a 23-year-old Chinese woman showed up at one of the singer’s concerts in Shenyang to thank him for saving her life 22 years ago, which was a complete surprise to him.

It turned out Ren had donated 30,000 yuan (US$4,000) to her impoverished family when he had a concert in the same city in 2001, which paid for an operation to treat her congenital heart disease.

China expands export controls on drones, parts with potential for military use

https://www.scmp.com/economy/global-economy/article/3274968/china-expands-export-controls-drones-parts-potential-military-use?utm_source=rss_feed

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In the past couple of years, China has tightened its drone-export controls amid growing international pressure on the top maker of unmanned aerial vehicles (UAVs) to curb its dual-use product sales.

In the latest policy to take effect from September 1, Chinese authorities have banned unpermitted exports of drones and parts of certain specifications, such as aero engines with an output above 16 kilowatts.

Payload components that could obviously have military applications, or the potential to, are also included in the ban. These include infrared imaging devices, high-precision inertial measuring units, synthetic-aperture radars, high-performance indicating lasers, as well as wireless communication devices with a range beyond 50km (31 miles).

Consoles that can control more than 10 drones at the same time will also be restricted, as will general civilian counter-UAV equipment – drone jammers with an effective range of more than 5km or anti-drone lasers with an output power higher than 1.5kw.

In addition, export operators will still be punished for selling products not listed, “if they have known or reasonably should know that the export will be used for the proliferation of weapons of mass destruction, terrorist activities or military purposes”, said an announcement by the Ministry of Commerce.

Exporters in China will need to apply for approval of these dual-use items or technologies from the ministry, with evidence of the end users and their ultimate use.

For the items with “a significant impact on national security”, the ministry would report to the State Council, it said.

Failing to comply with the restriction could lead to administrative punishments, or even criminal charges, the ministry added.

This represented the second time Beijing has amended its drone-export policy in just a year, after tightening its 2015 control measures from September last year.

The new measures could be seen as a result of Chinese manufacturers craving the international market, and owing to rising pressure from the United States and its allies’ sanctions citing weapon proliferation.

“[The] Chinese government firmly supports Chinese companies conducting international trade and cooperation of drones in civilian areas [and] opposes civilian drones being used for non-peaceful means,” the Ministry of Commerce said, adding that the decision was based on feedback from of a “wide range of stakeholders” in the past year.

With the latest restriction in place, last year’s “temporary measures”, such as limiting the maximum out-of-sight controllable operation time to only 30 minutes and the maximum take-off weight to under 7kg, will be revoked, effectively easing the restrictions on “consumer-grade drones”.

However, as “consumer” or “civilian” drones are being increasingly used in the likes of Ukraine and the Middle East for various purposes, including reconnaissance, surveillance, communication, or so-called suicide bombings, China’s UAV exports have been put under stricter scrutiny.

Made-in-China UAV components also believed to have played an important part in some countries’ own military or dual-use drone-making supply chains, especially among nations that are sanctioned by the West, including Russia and Iran,

However, they appear to account for only a small number of China’s exports of either whole UAVs or key parts, including radar or infrared thermal imagers, according to official Chinese customs statistics.

But the US and its G7 allies have accused China of providing key dual-use items, including drone parts, to Russian military industries and of being a “decisive enabler” of Russia’s invasion of Ukraine.

Just a day before China’s new restrictions were announced, the US Department of the Treasury added several individuals and entities based in mainland China and Hong Kong to its sanctions list for “procuring key components” for Iran’s ballistic-missile and UAV programmes.

The booming Chinese drone industry itself had already become a direct target of Washington in the escalating tech war.

US Congress passed a Countering CCP (Chinese Communist Party) Drones Act as part of this year’s annual National Defence Authorisation Act in July, which called the China’s DJI a “threat to national security”, following an existing ban from the Pentagon on buying or using drones and components manufactured in China since 2019.

Chinese authorities condemned “the imposition of illegal sanctions on Chinese companies and individuals by certain countries using the excuse of [proliferation of weapon-capable] drones”.

And they said China’s new export-control regulations were intended to “better safeguard China’s national security and interests, better serve the non-proliferation of weapons obligations, and benefit the security of the global supply chain”.

60-Second Catch-up

China imposes export controls on drones and parts with potential for military use.

Giant Chinese cargo drone lifts off on first test flight.

China eyes anti-drone technology as key to future battlefield success.

China tests drone-based cloud seeding in Xinjiang to bring rain to dry regions.

Deep Dives

Global Impact is a weekly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world.

The rise of military drones has transformed modern warfare in conflict zones like Ukraine and Gaza, a development that has not gone unnoticed by the US – the world’s most powerful military – and its second-placed rival China.

Both countries have been eyeing the technology, its most effective strategic uses, and the implications of artificial intelligence, to determine what it could mean for any confrontation in the Indo-Pacific region.

Read more.

Chinese battery giant CATL is investing hundreds of millions of dollars into AutoFlight, a maker of electric vertical take-off and landing (eVTOL) vehicles, amid rapid development of the domestic low-altitude economy.

The Shanghai-based aerial vehicle firm on Saturday announced the new financing from the world’s largest supplier of electric car batteries, but did not disclose the exact amount. The investment makes CATL, based in southeastern Fujian province, a strategic investor in AutoFlight.

Read more.

Japan and the United States are on the verge of signing an agreement on the joint development of high-power microwave weapons designed to protect military personnel and equipment from attacks by drones.

The deal comes as little surprise given the spectacular successes of unmanned vehicles deployed in conflicts such as the Russia-Ukraine war, analysts say, with Tokyo particularly keen to develop countermeasures against swarms of drones that are expected to accompany any contingency involving Chinese forces in areas off southern Japan.

Read more.

A university in China has become the country’s first to deliver admission notices to students using drones.

On July 15, an unmanned aerial vehicle (UAV) carried four admission letters from the South China University of Technology in the southern province of Guangdong to a residential area in the same district in Guangzhou.

Read more.

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In Cuba, China’s drive for EVs reshapes the roads of Havana

https://www.scmp.com/news/china/diplomacy/article/3275006/cuba-chinas-drive-evs-reshapes-roads-havana?utm_source=rss_feed

Cubans across the country have started using Chinese-made electric cars and scooters. They are seen as a more cost-effective mode of transport, as fuel prices remain high and public transport unreliable.

To increase the presence of electric vehicles, China’s Tianjin Dongxing Industrial, along with Cuban state-owned company Minerva, created Caribbean Electric Vehicles (Vedca), a joint venture that has quickly changed the face of transportation in the capital Havana.

Future murky for Russia-China pipeline as Mongolia omits project from long-term plan

https://www.scmp.com/economy/china-economy/article/3275022/future-murky-russia-china-pipeline-mongolia-omits-project-long-term-plan?utm_source=rss_feed

Mongolia has not included the Power of Siberia 2 natural gas pipeline connecting Russia and China in its action programme through 2028, a decision interpreted by many as a shelving of the controversial project that could have provided Moscow with a financial lifeline as it grapples with sanctions and the ongoing war in Ukraine.

The landlocked country would cover much of the proposed route for the 2,594km pipeline, necessitating its involvement in construction and transmission fee negotiations.

The programme was announced last Friday by Mongolia’s “national unity” coalition government, whose three parties hold 118 out of 126 seats in the State Great Khural – the country’s parliament – following elections in June.

Analysts attributed the hiatus to pricing disagreements between Beijing and Moscow as well as geopolitical factors, with concerns over secondary sanctions from Western countries levied against those seen as aiding Russia’s military in Ukraine.

“We are entering a long pause, where Moscow no longer believes it can get the deal it wishes from Beijing and will probably park the project until better times,” said Munkhnaran Bayarlkhagva, a former official at the National Security Council of Mongolia.

Bayarlkhagva said that Beijing may not be happy with Gazprom – Russia’s state energy giant – over a perception the company wishes to “unilaterally” control the Mongolian section of the pipeline.

“This would have meant a sudden and long-term increase of Moscow’s influence in Mongolia, to the detriment of Beijing,” he said. “Though never explicitly verbalised, it would have been ‘fair’ to include the Chinese into the Mongolian section’s development from the beginning.”

The pipeline – a project jointly overseen by the China National Petroleum Corporation (CNPC) and Gazprom – is expected to take at least five years to complete and would deliver 50 billion cubic metres (1.8 trillion cubic feet) of gas annually to China, much of which was originally set to supply European clients.

CNPC reportedly asked for a price similar to Russia’s domestic market, according to Anna Kireeva, associate professor at the Moscow State Institute of International Relations. This request was “not suitable for Gazprom,” she said, because “great financial resources” will be demanded in the construction of the pipeline.

“[These differences] can be overcome as the project is in the interests of both Russia and China, but the two sides should be ready for a healthy compromise,” Kireeva added. “It is difficult to make a prognosis on the further course of negotiations.”

Li Lifan, a Russia and Central Asia specialist at the Shanghai Academy of Social Sciences, concurred. “Mongolia hopes to get investment from China and Russia, [but] Russia does not have the money and China is not in a rush to build the pipeline.”

Russia needs customers for the supply generated by its Yamal gas field, which connects its territory with Poland and Germany through Belarus. After the outbreak of war in Ukraine and the subsequent cutting of most direct economic ties between Moscow and the West, China is the only buyer large enough to fill the gap.

With Russia’s copious fossil fuel resources, energy is a major aspect of its economic relations - particularly with China, the recipient of 75.4 million tonnes of natural gas imports for the first seven months of the year. The fuel trade is expected to weigh heavily in discussions as Premier Li Qiang heads to Moscow on Tuesday for an official visit.

Zhao Long, deputy director of the Institute for Global Governance Studies at the Shanghai Institutes for International Studies, said energy cooperation requires a weighing of “strategic values” between the two countries for Beijing, adding import diversification should be based on “a standard market benchmark”.

“This project has a complementary nature for all three countries,” he added. “I believe a consensus will be reached on pricing and other technicalities. It won’t remain unsettled.”

Mongolian president Ukhnaagiin Khurelsukh told his Russian counterpart Vladimir Putin at the July summit of the Shanghai Cooperation Organisation his country is waiting for Russia and China to move the pipeline forward, calling it a project “of importance to the economy”.

Aleksei Chigadaev, a former visiting lecturer at the Higher School of Economics in Moscow, described the decision from Mongolia’s parliament as “sober” and “rational”, naming 2028 as “a reference point for further observation” of the project’s potential beginning.

Chinese and Philippine ships collide near disputed Sabina Shoal in South China Sea

https://www.theguardian.com/world/article/2024/aug/19/china-philippine-ships-crash-sabina-shoal-south-china-sea

Chinese and Philippine vessels collided on Monday during a confrontation near a disputed shoal in the South China Sea, the two countries said.

Both countries blamed each other for the incident near the Sabina Shoal.

China and the Philippines have had repeated confrontations in the vital waterway in recent months, including around a warship grounded years ago by Manila on the contested Second Thomas Shoal that hosts a garrison. Beijing has continued to press its claims to almost the entire South China Sea despite an international tribunal ruling that its assertion has no legal basis.

China Coast Guard spokesperson Geng Yu said a Philippine vessel had “deliberately collided” with a Chinese ship early on Monday.

“Philippine coast guard vessels ... illegally entered the waters near the Xianbin Reef in the Nansha Islands without permission from the Chinese government,” Geng said, using the Chinese names for the Sabina Shoal and the Spratly Islands.

“The China coast guard took control measures against the Philippine vessels in accordance with the law,” Geng added.

Manila’s National Task Force on the West Philippine Sea, meanwhile, said two of its coast guard ships were damaged in collisions with Chinese vessels that were conducting “unlawful and aggressive manoeuvres” near the Sabina Shoal.

The confrontation “resulted in collisions causing structural damage to both Philippine Coast Guard vessels”, Manila said.

China claims the Sabina Shoal, which is located 140km (86 miles) west of the Philippine island of Palawan, the closest major land mass. It is more than 1,000km from China’s nearest major landmass, Hainan island.

Interactive

Manila and Beijing have stationed coast guard vessels around the shoal in recent months, with the Philippines fearing China is about to build an artificial island there.

Footage purporting to show the incident attributed to the Chinese coast guard and shared by state broadcaster CCTV showed one ship, identified as a Philippine vessel by the Beijing side, apparently running into the left side of a Chinese ship before moving on.

Another 15-second clip appears to show the Chinese vessel making contact with the rear of the Philippine ship. Captions alongside the footage claimed the Philippine ship made a “sudden change of direction” and caused the crash.

The Chinese coast guard spokesperson accused Philippine vessels of acting “in an unprofessional and dangerous manner, resulting in a glancing collision”.

“We sternly warn the Philippine side to immediately cease its infringement and provocations,” Geng said.

Manila, however, blamed Beijing, with the National Security Council director general, Jonathan Malaya, saying the Philippines’ BRP Cape Engano sustained a 13cm (five-inch) hole in its right beam after “aggressive manoeuvres” by a China coast guard vessel caused a collision.

A second Philippine coast guard ship, the BRP Bagacay, was “rammed twice” by a China coast guard vessel about 15 minutes later and suffered “minor structural damage”, Malaya said.

The Filipino crew were unhurt and proceeded with their mission to resupply Philippine-garrisoned islands in the Spratly group, he added.

Chinese state news agency Xinhua reported that the incident took place at 3.24am local time on Monday (1924 GMT Sunday). It also said a Philippine coast guard ship had then entered waters near the Second Thomas Shoal around 6am.

The repeated clashes in the South China Sea have sparked concern that Manila’s ally the United States could be drawn into a conflict as Beijing steps up efforts to push its claims in the sea.

Analysts have said Beijing’s aim is to push towards Sabina Shoal from the neighbouring Second Thomas Shoal, encroaching on Manila’s exclusive economic zone and normalising Chinese control of the area.

The situation has echoes of 2012, when Beijing took control of Scarborough Shoal, another strategic area of the South China Sea closest to the Philippines.

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China is using 2+2 talks with its neighbours to ‘get its plans back on track’

https://www.scmp.com/news/china/diplomacy/article/3274906/china-using-22-talks-its-neighbours-get-its-plans-back-track?utm_source=rss_feed

China’s recent engagement with its neighbours could point to a “more comprehensive” diplomatic strategy as countries in the region draw closer to the Quad powers, according to observers.

The latest example was the first “2+2” dialogue between China and Indonesia last week, involving senior officials from their foreign and defence ministries.

China’s foreign ministry said the talks in Jakarta reflected the “high-level and strategic nature” of the two countries’ relations and marked “a new level of strategic mutual trust” between them.

China’s delegation at the talks was led by foreign vice-minister Sun Weidong and Zhang Baoqun, deputy director of the Central Military Commission’s Office for International Military Cooperation.

Abdul Kadir Jailani, director general for Asia-Pacific and African affairs at Indonesia’s foreign ministry, and Oktaheroe Ramsi, the secretary directorate general for defence strategy, headed the Indonesian side.

China held a similar dialogue with South Korea in June. Beijing said the two countries had agreed to build mutual trust and push for cooperation through mechanisms including a 2+2 diplomatic and security dialogue.

It was the first meeting held under an upgraded dialogue mechanism at the vice-ministerial level that was set up in 2020. China’s Sun and his South Korean counterpart Kim Hong-kyun attended the June talks.

While the 2+2 dialogue mechanism is not new – major powers like the United States use this format with key allies including Japan and the Philippines – China has typically only used it informally.

Dylan Loh, assistant professor of foreign policy at Nanyang Technological University in Singapore, said the recent meetings did not indicate a big shift in China’s diplomatic strategy.

He said they represented “more of an evolution and also a recognition that defence and foreign policy are more intertwined than ever before”.

According to David Arase, resident professor of international politics with the Hopkins-Nanjing Centre, China’s 2+2 meetings with Indonesia and South Korea marked a “more comprehensive strategy of diplomatic and strategic engagement” with its neighbours.

“China wants to better leverage its rising military power to bring the politico-military orientation of key neighbours like South Korea and Indonesia in line with a China-centred regional order,” he said.

Arase said engaging with countries in this format meant that discussions would focus not only on bilateral cooperation but also on the countries’ strategic perceptions and relations with third parties.

“China will then better grasp its partner’s overall geopolitical thinking and the direction of current strategic relations with others such as the Quad powers,” he said, referring to the partnership between Australia, India, Japan and the US. “This is a good move for China.”

But he said for China’s “smaller and weaker” neighbours – with which it has sovereignty disputes – it was debatable what could be gained from 2+2 dialogue.

These talks would only “add leverage to China’s coercive diplomacy and push more effectively for concessions to Chinese demands”, he added.

Loh said the 2+2 format could in theory be used to establish or signal strategic relationships between countries but that did not appear to be the case for China’s recent talks with South Korea and Indonesia.

“If we see more 2+2s in the region, we can make such an assessment,” he said, adding that Beijing was likely to be learning from and experimenting with the format.

“If they find it worthwhile, there is a possibility of expanding it and institutionalising it elsewhere.”

Zha Daojiong, a professor of international studies at Peking University, said last week’s talks would have been driven by Jakarta’s interests and it was “first and foremost a demonstration of agency on the part of the Indonesian government”.

“The timing of the dialogue is indicative – [that is] before the transition of presidential power to Prabowo Subianto in October,” he said. “Continuity in both overall policy orientation and familiarity among high-ranking officials is important in bilateral diplomacy.”

Zha said security issues involving the South China Sea were a high priority for the US and Japan, but for China and Indonesia there was a “much longer list of tasks that demand attention”.

“In a sense, the 2+2 mechanism works to signal a commitment to not letting maritime issues define the overall relationship,” he said. “[It] should not derail cooperation in other fields.”

Indonesia is not a claimant in the South China Sea but its exclusive economic zone in the North Natuna Sea falls within China’s so-called nine-dash line, on which Beijing bases its claim to around 90 per cent of the disputed waters.

According to Arase from the Hopkins-Nanjing Centre, China’s recent 2+2 meetings also reflected “the leap of a muscle-bound [military] onto the world stage to strategically reshape Asia into a rejuvenated Sinocentric order after over a decade of Xi Jinping’s leadership”.

Arase noted that the development came as smaller Asian neighbours – which Beijing sees as “strategically malleable economic supplicants” – have pushed back by upgrading their strategic engagement with Quad powers.

One example is the Philippines, which has drawn closer to countries such as the US and Japan amid heightened tensions with China in the South China Sea. Vietnam has also pledged deeper ties with Japan and Australia.

“China needs something like the 2+2 formula to turn this situation around and get its plans back on track,” he said.

“South Korea and Indonesia are moving closer to alignment with the Quad but their moves are tentative and uncertain – the perfect time for China to penetrate and reverse their policy thinking with the 2+2 formula.”

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Why China’s public sector workers are in a rush to retire early

https://www.scmp.com/news/china/politics/article/3274780/why-chinas-public-sector-workers-are-rush-retire-early?utm_source=rss_feed

Some Chinese public sector workers are opting to take early retirement in the coming months, fearing they will lose out when a new pension scheme kicks in from October.

Several civil servants, speaking on condition of anonymity, told the South China Morning Post that they were also concerned about the impact of pay cuts on their pensions.

Beijing announced a national pension reform plan in 2015, aiming to make the public and private sector retirement schemes more equitable. The public sector pension system has long been criticised as too generous compared to the private sector.

Under the new system, China’s 8 million civil servants and 32 million employees of public institutions must pay 8 per cent of their salaries into the pension scheme, while their employers contribute 20 per cent.

Previously, public sector workers did not have to make any contributions and were paid up to 80 per cent of their salary as a pension when they retired.

The transition period for the public sector to make the switch to the new scheme ends in October.

Public sector employees have raised concerns that the change could leave them worse off when they retire.

A 59-year-old civil servant in southern Guangdong province, who wished to be identified only by his surname Huang, said he had decided to stop working a year earlier than the retirement age of 60.

He said that was mainly due to uncertainty around the new pension scheme, and because of government belt-tightening amid the softening economy.

China’s civil servants have been facing big cuts to their wages and benefits in recent years.

Huang said his human resources department could not give him an exact figure for his pension if he chose to retire next year under the new scheme.

“For many of us in the system, a bird in the hand is worth two in the bush,” Huang said. “I know of a dozen others who are a similar age to me who have also applied for early retirement.”

He said his pension under the “old scheme” will be about 12,000 yuan (US$1,680) a month since he earns about 15,000 a month.

Huang said that would be enough to live comfortably in his hometown, Huizhou, where the average monthly salary is around 10,000 yuan.

Two officials in Shanghai, who have also applied for early retirement, shared Huang’s sentiments.

One of them said he was worried about the ongoing cuts to civil servants’ pay and their impact on retirement benefits.

“We’ve seen pay cuts even in Shanghai – the country’s commercial and financial centre – not to mention other cities,” the official said.

“That will have a negative impact on our pensions so it might be better to retire early, so we end at a higher point.”

Some employers are trying to entice those seeking early retirement to stay on.

A surgeon at a public hospital and a university lecturer, both in Guangdong, said they had applied to retire early because they were also concerned about losing out under the new pension system. Their employers asked them to remain in their jobs for 20 months, offering to match the retirement benefits they would get under the old scheme.

The surgeon, who sought early retirement on medical grounds since he is recovering from treatment for stomach cancer, said he was persuaded to stay on to help train younger surgeons. The hospital promised to pay him a slightly higher pension with full medical coverage.

Alfred Wu, an associate professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy, said the current rush among public sector workers to take early retirement shows that Beijing needs to do more to boost confidence in the new system.

“Many civil servants who want to lock in their retirement benefits are trying to hedge against future risks,” Wu said. “They are the insiders, knowing the actual financial situation of the government and public institutions.”

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China accuses the Philippines of deliberately crashing one of its ships into a Chinese vessel

https://apnews.com/article/china-philippines-sabina-shoal-collision-fd76fcfcbcfcfdce5eb81c9422e8216cFILE - A member of the Philippine Coast Guard holds flags during the arrival of Chinese naval training ship, Qi Jiguang, for a goodwill visit at Manila's port, Philippines, June 14, 2023. (AP Photo/Basilio Sepe, File)

2024-08-19T02:21:46Z

TAIPEI, Taiwan (AP) — China’s coast guard accused the Philippines of deliberately crashing one of its ships into a Chinese vessel early Monday near Sabina Shoal, a new flashpoint in the increasingly alarming territorial disputes between the countries in the South China Sea.

Two Philippine coast guard ships entered waters near the shoal, ignored the Chinese coast guard’s warning and “deliberately collided” with one of China’s boats at 3:24 a.m., a spokesperson said in a statement on the Chinese coast guard’s website.

Philippine authorities did not immediately comment on the encounter near the disputed atoll in the Spratly Islands, where overlapping claims are also made by Vietnam and Taiwan.

“The Philippine side is entirely responsible for the collision,” spokesman Gan Yu said. “We warn the Philippine side to immediately stop its infringement and provocation, otherwise it will bear all the consequences arising from that.”

Gan added China claimed “indisputable sovereignty” over the Spratly Islands, known in Chinese as Nansha Islands, including Sabina Shoal and its adjacent waters. The Chinese name for Sabina Shoal is Xianbin Reef.

In a separate statement, he said the Philippine ship that was turned away from Sabina Shoal entered waters near the disputed Second Thomas Shoal, ignoring the Chinese coast guard’s warnings. “The Chinese coast guard took control measures against the Philippine ship in accordance with law and regulation,” he added.

Sabina Shoal, which lies about 140 kilometers (87 miles) west of the Philippines’ western island province of Palawan, has become a new flashpoint in the territorial disputes between China and the Philippines.

The Philippine coast guard deployed one of its key patrol ships, the BRP Teresa Magbanua, to Sabina in April after Filipino scientists discovered submerged piles of crushed corals in its shallows which sparked suspicions that China may be bracing to build a structure in the atoll. The Chinese coast guard later deployed a ship to Sabina.

Sabina lies near the Philippine-occupied Second Thomas Shoal, which has been the scene of increasingly alarming confrontations between Chinese and Philippine coast guard ships and accompanying vessels since last year.

China and the Philippines reached an agreement last month to prevent further confrontations when the Philippines transports new batches of sentry forces, along with food and other supplies, to Manila’s territorial outpost in the Second Thomas Shoal, which has been closely guarded by Chinese coast guard, navy and suspected militia ships.

The Philippine navy transported food and personnel to the Second Thomas Shoal a week after the deal was reached and no incident was reported, sparking hope that tensions in the shoal would eventually ease.

___

Gomez reported from Manila, Philippines.

SIMINA MISTREANU Mistreanu is a Greater China reporter for The Associated Press, based in Taipei, Taiwan. She has reported on China since 2015. twitter mailto JIM GOMEZ Gomez is The AP Chief Correspondent in the Philippines. twitter mailto

China accuses Philippines coastguard of ‘ramming’ in Sabina Shoal collision

https://www.scmp.com/news/china/diplomacy/article/3274971/china-accuses-philippines-coastguard-ramming-sabina-shoal-collision?utm_source=rss_feed

The Chinese coastguard has accused its Philippine counterpart of “unprofessional and dangerous” behaviour after a “deliberate” collision in the South China Sea early on Monday morning, near the disputed Sabina Shoal.

“We solemnly warn the Philippine side to immediately cease its infringement and provocation, or else the [Philippines] will bear all the consequences,” spokesman Gan Yu said.

According to the Chinese coastguard, the encounter began when two vessels from its Philippine counterpart entered the waters off Sabina Shoal – known as Xianbin Reef in China and Escoda Shoal by the Philippines.

At 3.24am, one of the Philippine vessels, No. 4410, ignored repeated warnings and rammed vessel 21551 from its Chinese counterpart, according to the China Coast Guard, which also released two short videos of the incident.

In a separate statement on Monday morning, the Chinese coastguard said the Philippine vessel 4410 approached Second Thomas Shoal – also subject of competing claims between the two countries – at about 6am.

Chinese coastguards took control measures against the Philippine vessel in accordance with the law, the statement said.

The Chinese coastguard accused the Philippine side of “repeatedly provoking trouble” and “violating” a temporary agreement reached last month over the delivery of supplies to a Philippines-controlled ship deliberately grounded at Second Thomas Shoal.

Gan said the Chinese coastguard would continue to carry out law enforcement activities for the “protection of rights and interests in the waters under China’s jurisdiction”, and “resolutely safeguard the country’s territorial sovereignty and maritime rights and interests”.

China or India? Sri Lanka’s presidential election becomes a battleground for influence

https://www.scmp.com/week-asia/politics/article/3274831/china-or-india-sri-lankas-presidential-election-becomes-battleground-influence?utm_source=rss_feed

As candidates in Sri Lanka prepare for next month’s pivotal presidential election, analysts warn its future relations with India and China will hinge on the winner’s policies.

The race is on, with a diverse field of 39 candidates vying to lead the island nation out of its worst economic crisis in decades. It’s the country’s first presidential elections since the turmoil of 2022, which saw the once-dominant Rajapaksa political dynasty tumble from power amid mass protests and a crippling financial collapse.

Among the most closely watched contenders is Namal Rajapaksa, the 38-year-old scion of the former ruling clan. Representing the Sri Lanka People’s Front (SLPP), the son of popular wartime leader Mahinda Rajapaksa is seeking to restore his family’s legacy.

Other aspirants include incumbent President Ranil Wickremesinghe, contesting as an independent candidate instead of representing the United National Party (UNP) he has been associated with for close to five decades.

Sajith Premadasa, who split from the UNP in 2019, will represent Samagi Jana Balawegaya (SJB), while Anura Kumara Dissanayake of National People’s Power (NPP), and leftist Janatha Vimukthi Peramuna (JVP) are also candidates.

The winner will decide the economic direction of the nation, which is currently in the process of implementing structural changes under a US$2.9 billion International Monetary Fund programme secured following 2022’s historic default.

Analysts say the outcome of the polls could shift the country’s delicate geopolitical balancing act between its two regional powerhouse neighbours – especially if the NPP’s Dissanayake wins a majority.

With recent political surprises in the region – including India’s Narendra Modi losing the majority in parliamentary elections, and given strained relations between New Delhi and Dhaka after the fall of Sheikh Hasina, India may be wary of supporting a single regime in Sri Lanka, says Uditha Devapriya, chief analyst at Factum, a Sri Lanka-based foreign policy think tank.

“India is obviously going to look at this election with very, very sharp eyes,” he said.

President Wickremesinghe is viewed as an astute diplomat for navigating and maintaining amicable relations with nations in conflict with each other. For instance, Sri Lanka sent migrant workers to Israel, aid to Gaza, and to US operations against the Houthis in the Red Sea, even hosting the late Iranian president Ebrahim Raisi over the span of a year amid the violence in Gaza.

But Devapriya said Wickremesinghe – with his talks about currency integration with Indian rupee and affinity for Modi-backed Adani investments, thought to be the financing arm of the Indian government – is “as pro Indian as can be”, while there was a definite resistance from the Premada-led opposition on such controversial investment projects.

“So obviously for the Indians this [election] is going to be a game changer, but for the Chinese I’m not too sure,” he noted, adding that he did not think there would be any fundamental reset in Sri Lanka-China relations.

He also cited Wickremesinghe’s decision to hand over the China-built Hambantota Port in Southern Sri Lanka to state-controlled China Merchants Port Holdings on a 99-year lease, while he was prime minister in 2017, despite his previous criticisms.

Nilanthi Samaranayake, visiting expert at the US Institute of Peace and adjunct fellow at the East-West Center in Washington, said India would seek to preserve positive relations with Sri Lanka as another important neighbour, especially given the challenges posed by a post-Hasina Bangladesh.

India has extensive experience working with the current president and the Rajapaksas, despite complicated relations with both, she noted, while China would seek to engage with whomever emerged victorious, based on its previous outreach to Sri Lanka because the “bilateral relationship is entrenched”.

Harindra B Dassanayake, an analyst at Muragala Centre for Progressive Politics and Policy from Sri Lanka, views NPP’s strong anti-India policy and its close ties to China, as a thorn in New Delhi’s side, especially given the leftist and revolutionary credentials of the NPP’s main alliance member, the Janatha VImukthi Peramuna (JVP).

“India will be compelled to be cautious with a potential NPP leadership, while China will see it as an opportunity to increase their presence in the region,” he said.

Samaranayake noted the NPP would be a “new and uncertain dynamic for India to manage in its external relations”.

Sri Lanka often prioritised domestic interests and preferences in the conduct of its international relations, but pulls back if it upsets New Delhi’s threat perception in the process, she added, citing Sri Lanka’s ban on foreign research vessels docking in its ports following Indian concerns over Chinese ships in Sri Lankan waters.

“This reflects the asymmetry of power for a smaller state, navigating the dominant country in its region. If the NPP wins, this will be a new development in Sri Lanka’s history that observers will need to track for potential shifts in the country’s external approach,” she said.

Meanwhile, Dassanayake sees the leadership of Wickremesinghe or Premadasa to be a continuation of the current status quo from the perspective of China or India, while Beijing might profit from already-good relations with the Rajapaksa clan.

“However, the potentially weak political legitimacy of an incoming president would open a new avenue for increased pressure from geopolitical actors,” he pointed out.

But, Colombo has always viewed its foreign policy through an economic lens, Devapriya says, although there is a broad recognition that Sri Lanka needs to be both non-aligned and multi-aligned.

“Multi aligned in terms of trying to gain economic leverage by being as friendly as possible with everyone. Non-aligned in terms of not being involved or privy to any of the big power plays and power conflicts and tensions that we are seeing right now.”

Lost China girl, 8, uses ATM for help, joyfully reunited with family, amusing many online

https://www.scmp.com/news/people-culture/trending-china/article/3274934/lost-china-girl-8-uses-atm-help-joyfully-reunited-family-amusing-many-online?utm_source=rss_feed

A quick-thinking eight-year-old Chinese girl who was lost, figured out a way to get help without a mobile phone or asking a stranger in the street, earning praise on social media.

On July 30, the youngster from Quzhou, Zhejiang province, in southeastern China, became separated from her grandfather on the way home from her dancing class.

Unable to contact her family, the girl grew anxious.

However, she noticed an ATM nearby and pressed the red button beside the machine, which connected her with the bank’s monitoring centre.

Zhou Dongying, a staff member from the Quzhou Rural Commercial Bank, answered the girl’s call through the intercom service.

“Do you have your grandpa’s phone number?”asked Zhou, but the girl did not and neither could she recall the phone numbers of other members of her family.

Zhou alerted the police and told the girl to stay put while continuing to comfort her.

“Stay here and don’t move, the police are on their way,” Zhou assured her.

Officers from Huabu Police Station, Kaihua County Public Security Bureau soon arrived and the girl was reunited with her grandfather, who had been searching for her.

According to Tide News, many local self-service ATM stations in Hangzhou province feature two types of emergency assistance buttons beside the machine, an “emergency call” button and a red “emergency alarm” button.

The bank said the “emergency call” button, which was used by a girl in a recent incident, enables people to establish direct communication with the bank’s monitoring centre.

The alarm button, on the other hand, is designed to quickly alert the police during emergencies at the ATM.

While this was the first time Zhou encountered such a situation on duty, the method has been successfully used in other cases.

For instance, in February 2021, a five-year-old boy from Hubei province got separated from his mother in a supermarket and used the button, eventually reuniting with his family.

His effort to stand on his tiptoes to press the emergency button beside an ATM was captured on a video that went viral online, earning widespread praise with netizens dubbing it a “textbook example of how to find your mum.”

The online community also praised the girl for her smartness and expressed surprise at the novel use of an ATM.

“She is so clever,” said one person.

“This is the first time I’ve learned that an ATM can be used like this. Kudos to the smart little girl and the warm-hearted staff,” another said.

“I feel like I’m not as smart as a child. I’ve learned a new emergency skill today,” a third person wrote.

Warnings of overcapacity in China’s ride-hailing sector spread amid weak demand

https://www.scmp.com/economy/china-economy/article/3274774/warnings-overcapacity-chinas-ride-hailing-sector-spread-amid-weak-demand?utm_source=rss_feed

For years, becoming a ride-hailing driver had been considered a last resort for many jobless people in China, but it may not be the case any more.

A growing number of local governments have issued warnings about a saturation of the market, advising caution for new joiners after millions rushed to become gig drivers in recent years amid a bleak job market.

The road authority in Jiaxing in eastern China’s Zhejiang province released a risk alert on Tuesday that ride-hailing drivers had seen their average daily orders and incomes decline due to an oversupply of vehicles, warning against “blindly entering the market”.

In the past month, at least five other cities, including the southern cities of Shenzhen and Suzhou, have issued similar alerts, suggesting the industry in many regions is approaching or has already reached a state of overcapacity.

The warnings also came as growth in demand slows amid weak economic activity and challenges from driverless taxis emerge, said analysts.

Jiaxing reported an increase in the number of orders in the second quarter, but each vehicle on average took 11.9 orders per day, with average daily revenues of 214.7 yuan (US$30) before deducting operating costs, down by 0.6 orders and 9.9 yuan, respectively, compared to the first quarter, according to the Jiaxing Public Road and Transportation Management Centre.

In Nanning, the provincial capital of the southern Guangxi Zhuang autonomous region, the average number of order per day per vehicle in the second quarter dropped by over 10 per cent from a year earlier, while the daily revenue for a full-time driver fell by about 1.3 per cent year on year, the local road authority said in a similar warning on August 1.

“The market is now starting to fall primarily because economic activity is getting weak, as demand decreases with the shutdown of businesses and unemployment of individuals,” said Tang Dajie, a senior researcher with Beijing-based China Enterprise Institute think tank

“The downgrading in spending may also have contributed as car-hailing services are relatively more expensive than traditional taxis and public transport.”

As of the end of June, there were over 7.1 million registered ride-hailing drivers in China, compared with 4.5 million two years ago, according to the Ministry of Transport.

Ride-hailing had gained popularity, especially among laid-off workers, as it only required a car and a driving licence.

With a lower-than-expected growth of 4.7 per cent in the second quarter, the world’s second-largest economy continues to be dragged down by insufficient domestic demand, a persistent property slump and elevated unemployment.

The overall urban unemployment rate stood at 5.2 per cent in July, representing the first rise since February, according to the National Bureau of Statistics, having stood at 5 per cent for the previous three months.

New technologies, including driverless vehicles, are also poised to further disrupt the traditional ride-hailing market.

A report by Guotai Junan Securities in July highlighted the success of Apollo Go, an autonomous driving ride-hailing service by search engine giant Baidu, in Wuhan, suggesting that the model could be replicated in other cities.

Noting its competitiveness in price and passenger experience, the report said, “self-driving taxis may challenge the conventional taxi and online car-hailing industry”.

The company plans to deploy 1,000 sixth-generation autonomous vehicles in Wuhan by the end of 2024, it said in May, with trial services available in 11 cities, including Beijing, Shenzhen, and Shanghai.

Why there’s no quick fix in the South China Sea disputes, and war ‘cannot be ruled out’

https://www.scmp.com/news/china/diplomacy/article/3274829/why-theres-no-quick-fix-south-china-sea-disputes-and-war-cannot-be-ruled-out?utm_source=rss_feed

Wu Shicun founded the state-funded National Institute for South China Sea Studies. He has spent years researching the South China Sea – its history and geography as well as the regional disputes over this strategic waterway. This interview first appeared in . For other interviews in the Open Questions series, click .

First, the US-led militarisation in the South China Sea is intensifying. Over the years, multilateral security mechanisms led by the US have taken shape. And after the US, the Philippines, Japan and Australia held military drills in these disputed waters in April for the first time, the South China Sea issue has spilled over from what was previously the political-diplomatic realm to the military-security realm.

Secondly, rival claimants have ramped up their unilateral behaviour in the disputed waters. Namely, the Philippines, Vietnam and Malaysia who are all eager to reinforce their presence in contested waters after the US abandoned neutrality in the South China Sea dispute and as the window narrows for negotiations on a code of conduct.

The foreign ministers of China and the Asean member states agreed to accelerate talks on the code of conduct for the South China Sea in July last year, and they announced a three-year deadline to complete the talks. But the negotiations have not gone smoothly.

When the talks started in 2013, it was believed the rival claimants were looking for a set of rules as a way to regulate China’s land reclamation activities and restrain its expanding maritime powers and law enforcement. But now – with China having completed its island-building – rival claimants are thinking of building their own islands or trying to cement control over disputed waters. That means countries are now less motivated about the code of conduct talks.

So while negotiations are still going on at the working group level or at the level of senior officials, progress is very slow – or there is no progress at all.

The code covers a wide range of contentious issues and it needs the nod from China and the 10 Asean member states before it can go ahead.

There is no agreement on whether it will be legally binding. Its geographical scope is also contentious: Vietnam wants to include the Xisha [Paracel] Islands; China believes it should only cover the Nansha [Spratly] Islands; the Philippines wants it to cover not just the Nansha Islands but also Huangyan Island [Scarborough Shoal].

There is the issue of third parties. For example, whether the US should be allowed to conduct military exercises in the South China Sea. Or whether companies from countries outside the region should be allowed to carry out oil and gas exploration in these waters.

Another issue is whether the final code of conduct will have to be passed by the parliaments of each signatory. Also, China sees it as a mechanism for crisis management, while rival claimants such as Vietnam and the Philippines see it as a dispute settlement mechanism.

Let’s review the history. The Philippines was the first country to violate China’s rights in the South China Sea in the 1970s, when China was in the grip of the Cultural Revolution. Then-president Ferdinand Marcos Snr sent the military to take over a number of islands, including Feixin [Flat] Island and Zhongye [Thitu] Island.

Beijing and Taipei didn’t respond militarily and Manila in 1971 gained control of more islands and reefs. The Philippines carried out five military operations and illegally took over eight Chinese islands and reefs – not including Renai Jiao [Second Thomas Shoal].

It was also the Philippines that used a third-party mechanism for arbitration [an international tribunal in The Hague which in 2016 backed Manila and rejected Beijing’s claims to the South China Sea]. That move went against the consensus of trying to resolve the dispute through dialogue.

The Philippines is the only US treaty ally in the South China Sea, and what Manila is doing in these waters echoes Washington’s strategic realignment that seeks to contain China’s rise.

I see no problem with the “four noes” policy. China regards the South China Sea dispute as a very complex issue – unparalleled in the global context – that involves many countries with overlapping claims, and one that can only be resolved through bilateral negotiation.

If China had taken part in the arbitration it would have been inconsistent with the usual practice of resolving maritime disputes through diplomatic negotiation and consultation.

But there are things that China can reflect on, such as whether it should have taken stronger countermeasures against the Philippines. Could Huangyan Island have been reclaimed? I think it was possible. Could China have removed the Philippine warship from Renai Jiao? I think it could have.

Instead, China issued a rebuke but stopped short of taking countermeasures after the Rodrigo Duterte administration said it wanted to improve relations.

It is unlikely that the arbitration ruling would have had such a negative impact if there were strong countermeasures in place. Manila would also have been less likely to launch a second arbitration case.

The Philippines has signalled that it will seek a second arbitration and the possibility is very high. In doing so, Manila would be trying to consolidate its control over disputed reefs – including Houteng Jiao [Iroquois Reef] and Renai Jiao – that it claims as part of its exclusive economic zone.

The Philippines is also trying to win the sympathy from the international community so that it can continue to control Renai Jiao and perhaps try to return to Huangyan Island. A Philippine [coastguard] ship is currently refusing to leave Xianbin Jiao [Sabina Shoal], and the Philippines has grounded ships several times at Sandy Cay [Tiexian Jiao] that were then removed by China.

I don’t know how China will react if the Philippines files a second arbitration case, but I believe it won’t be the same as eight years ago – it won’t be that simple.

There’s no standards for right and wrong when it comes to the South China Sea any more. Now, whatever China does is wrong. And whatever violates China’s rights and interests is right. The “discourse power” is not on China’s side.

If you look at maps from the Ming dynasty (1368-1644) – from the government of the Republic of China and even from the US – you can see “China” written in pinyin in parentheses behind the Xisha Islands.

In 1931, after Imperial Japan seized northeast China, France – which had colonised Indochina – was deeply worried about the threat to its geopolitical interests in the region if Japan moved south. So France took control of nine islands and reefs [including Zhongye Island] in the South China Sea.

But those islands and reefs were originally China’s. Beijing has never said that the whole of the South China Sea belongs to China, but that these islands and reefs should be returned to the Chinese people.

China has been criticised for recent incidents when its coastguard fired water cannons at Philippine vessels near Renai Jiao. To me, this showed restraint and they could have been a lot tougher. But the narrative is now upside down – China is the victim, but in the current narrative China has become the invader.

The South China Sea has become an important factor for the US to sustain its hegemony in the western Pacific and maintain its maritime primacy. As China expands its maritime power, the US tends to believe that China wants to drive it out of the South China Sea. But China doesn’t want to do that.

The significance of the South China Sea for China is more than the islands and reefs that are illegally occupied by neighbouring countries. It is a crucial sea lane for China and provides important access to the western Pacific and Indian Ocean.

Also, if China suffers a nuclear strike it will launch a retaliatory strike from the South China Sea.

I think the US has seen this, and that’s why it started to provoke China in the South China Sea and tried to jeopardise China’s ties with rival claimants. The issue should be viewed against the backdrop of the power rivalry between China and the US. The US has abandoned its neutrality in the South China Sea disputes because it knew it was not in its strategic interest to be neutral. In this context, as long as there is competition between China and the US the South China Sea issues will not be resolved simply through negotiation and consultation.

China should take countermeasures against Vietnam’s illegal behaviour in the South China Sea.

First, it has violated the Declaration on the Conduct of Parties in the South China Sea (DOC) and changed the status quo. After the land reclamation, military deployment can be expected. And if you look at the depth of Vietnam’s security cooperation with the US and Japan, it is possible that the military facilities Vietnam builds in the South China Sea could be offered to Japan and the US. That would significantly compromise China’s defence, deterrence and military projection in the South China Sea.

According to the CSIS report, Vietnam has constructed an outpost in the South China Sea with a base as long as 4km [2.5 miles], which could support a 3km [1.9 miles] runway.

Vietnam’s land reclamation is taking place in some of the best locations in the South China Sea and once finished it could be a game-changer for the geopolitical landscape.

This has also set a bad precedent. Maybe China protested quietly, but without international pressure Vietnam will continue with these activities. We need to keep up international pressure through diplomatic notes or countermeasures and with a certain level of transparency.

Some Americans are confused as to why China has so far taken no action against Vietnam while keeping such a close eye on the grounded Philippine warship [used as a military outpost] at Renai Jiao. The land reclamation has more of a negative impact than the Philippine ship, so is this a double standard? In the past, China has used diplomatic pressure and even maritime operations against Vietnamese island-building and unilateral oil and gas exploration.

Meanwhile, Vietnam has constantly protested against what China has done in the Xisha Islands. Even a hotpot restaurant on Yongxing [Woody] Island drew a protest from Vietnam.

China will not recognise the continental shelf delimitation between Vietnam and the Philippines.

On the surface it is the Philippines taking the lead, but behind this I think it is Vietnam attempting to consolidate its illegal controls in the South China Sea. Vietnam’s strategy is very clear – it is using land reclamation to consolidate its illegal gains and develop military and civil facilities in the South China Sea.

Meanwhile, Vietnam joined Malaysia in 2009 in a joint submission relating to a southern area of the South China Sea. And in December 2022, Vietnam signed an agreement with Indonesia on the demarcation of their exclusive economic zones, part of which fall within China’s dash line. That creates a dilemma for China since it will have to deal with a third country if it rejects Vietnam’s delimitation.

I don’t think there’s any problem with the general principle, but under the 2016 arbitration ruling, joint development has reached a dead end.

The tribunal ruled that none of the Nansha Islands are legally islands that are entitled to a 12-nautical-mile territorial sea, and it rejected China’s claim to the entirety of Nansha Islands as a single archipelagic feature. So from the perspective of Vietnam and the Philippines, there’s no dispute with China in the Nansha Islands, so there’s no need for joint exploration. The unilateral oil and gas exploration is actually based on the ruling.

The principle is part of China’s goodwill to ensure peace and stability in the South China Sea and it is a temporary arrangement before disputes are resolved. But no countries really believe in China’s initiative now, and that’s the biggest challenge. So the possibility of joint exploration becoming a reality is extremely low.

China and the Philippines did set up the Intergovernmental Joint Steering Committee on Oil and Gas Development in October 2019, when oil firms from the two sides started talks. China also proposed three areas for cooperation on oil and gas, but no progress has been made and a memorandum of understanding was ended before Duterte left office.

An agreement was signed in 2005 on joint marine seismic surveys by China, the Philippines and Vietnam but that expired in 2008.

With so many factors at play, how can countries think of engaging in joint oil and gas exploration? China will continue to push for joint development but it should harbour no illusions.

If China is willing to build new islands, it can do so at any time. But I don’t think it’s necessary at this stage.

Existing islands in Xisha can be developed and civilian facilities expanded – they could be opened to the international community in the future.

In the Nansha Islands, new reclamation works are only necessary if China is provoked. For example, if Vietnam were to reclaim too much land, or if the Philippines were to increase its control over Renai Jiao, China would have to retaliate.

In that case, would it be possible to reclaim Huangyan Island? I don’t think it’s impossible. It’s not necessary at the moment, but if China is forced to take a final step as a countermeasure against the US and the Philippines, I think it would be necessary to take that kind of approach.

The possibility of war cannot be ruled out 100 per cent. For example, on June 17 when the Chinese coastguard seized firearms from Filipino sailors [at Renai Jiao] during a confrontation, a trigger could have accidentally been pulled – you can’t rule out the possibility of armed conflict.

But it would not be easy for the US to step in, and be willing to have a direct conflict with China for the Philippines.

There are many factors behind the high risk of collision between China and the US. They include the increasing frequency of joint anti-China patrols in the South China Sea, some of which have taken place in disputed waters. Also the multinational Code for Unplanned Encounters at Sea is not binding. China and the US still don’t have an effective mechanism to manage crises at sea. And Chinese maritime militia have a large presence in these waters. A collision could easily happen without a proper crisis management mechanism.

Concerns about this risk could partly explain why the US pushed for military-to-military communication with China to be resumed after the leaders met in November, and why the Americans pressed for calls between senior military officials at the Shangri-La Dialogue in Singapore.

It will not be simple if an armed conflict breaks out – it’s not 2001, when the two fighter jets collided. The consequences will be more serious.

A new consensus is needed. For example, can the rival claimants work together to demilitarise the South China Sea? Let’s forget about military deployment on those islands and reefs.

If a code of conduct can’t be agreed, could other agreements be reached to slowly demilitarise the South China Sea? Every claimant could offer an island to develop civilian facilities including scientific stations and environmental research centres to monitor sea levels and restore coral reefs.

China should take the lead by providing an island – like Meiji Jiao [Mischief Reef] – where an oceanic observatory could be built and scientists from the Philippines and Vietnam could be invited to take part in it.

There’s no quick solution for the South China Sea disputes. From China’s perspective, these islands and reefs belong to China. From the point of view of rival claimants, it’s impossible for them to just return the islands and reefs to China. Maintaining the status quo is all we can do, and then we can start to talk about demilitarisation, about environmental protection, about sustainable fishing.

Meanwhile, countries from outside the region should not be allowed to step in. China – as the largest littoral country of the South China Sea – will take more countermeasures if other nations are encouraged by the US to confront it, and it will become an endless loop.