Mistral点评

• China, Vietnam pledge renewed diplomacy over South China Sea disputes
• US clinical trials in China draw questions on IP theft, forced Uygur involvement
• China’s most advanced amphibious assault ship spotted near Japanese waters
• China President Xi praises Olympians for winning ‘glory for the country and people’
• As China’s consumption picture changes, think tank argues, so must its policies
• China promises to help Fiji tackle climate change as Beijing seeks greater Pacific role
• Hong Kong hedge fund SVI winds down bets on Chinese equities, returns capital to investors
• Can China present a ‘credible, lovable and respectable’ image to the world?
• Beijing seeks to boost military cooperation with Vietnam despite South China Sea dispute
• Tesla faces lowest duty on Chinese-made cars exported to EU
• Philippines to seek ‘peaceful approach’ with China over ship collision
• China targets cryptocurrencies, online game coins in intensified money-laundering crackdown
• China’s AAA game Black Myth: Wukong tops Cyberpunk 2077, Elden Ring for most Steam players
• Why Harris-Walz is still the better pick for US-China engagement
• China research ‘bridges gap’ between power hungry AI models and the human brain
• China AI: game company launches tool for creating 3-minute dramas with music and plot
• China man awaiting sex reassignment surgery sues hospital over forced electroshock therapy
• Tesla reaps benefits as EU cuts planned tariffs on Chinese-made electric vehicles
• China’s courier industry warned over spy threat amid national security drive
• China seeks to heat up economy with US$28 billion nuclear power investment in 11 reactors
• China woman weighing 50kg left infertile after having liposuction to lose ‘little belly’
• Chinese cartoon campaign warns village clans against hindering Communist Party
• Kamala Harris could be the next Richard Nixon on US-China relations
• Joe Biden touts policies for US middle class, says Chinese economic dominance not assured
• Chinese craft beer maker RichKat taps into Hong Kong’s frothy market
• Hong Kong Island site for 500 flats, once Chinese developer Agile’s, put up for tender
• As China’s pet lovers turn to domestic brands for value, investors sniff opportunity
• China vows to make key social security fund ‘bigger, stronger’ amid ageing population
• Remembering Deng Xiaoping: why ‘thought emancipation’ points the way on China’s future
• Some of China’s best cultural ambassadors are foreign vloggers
• As Chinese students forgo US university degrees, the impact on brainpower transcends borders

China, Vietnam pledge renewed diplomacy over South China Sea disputes

https://www.scmp.com/news/china/diplomacy/article/3275247/china-vietnam-pledge-renewed-diplomacy-over-south-china-sea-disputes?utm_source=rss_feed

China and Vietnam issued a joint declaration on Tuesday vowing to better manage and resolve their disputes over the South China Sea through friendly consultations.

The declaration came at the end of Vietnamese Communist Party chief To Lam’s official visit to China. In the document, both sides renewed a pledge made by Lam’s predecessor, Nguyen Phu Trong, and Chinese President Xi Jinping in November to build a “China-Vietnam community of shared destiny with strategic significance”.

Lam succeeded Trong as the general secretary of the Vietnamese Communist Party after the long-serving leader died last month. Lam’s three-day visit to China was his first foreign visit since becoming the general secretary, and he met Xi in Beijing on Monday.

The joint declaration issued after Lam and Xi’s meeting reiterated the “high-level consensus” to jointly maintain peace and stability in the South China Sea, and mostly repeated the lines of the agreement made last year.

“[The two sides] will continue to actively seek a fundamental and sustainable solution that is acceptable to both sides through friendly consultations,” the declaration said.

The solution must be consistent with the existing basic principle agreement on maritime issues between Chinese and Vietnamese governments, as well as international laws, including the United Nations Convention on the Law of the Sea (UNCLOS), it said.

“[We] will refrain from actions that will complicate the situation and aggravate disputes,” it said.

The declaration reiterated the need for promoting joint maritime development and accelerating talks on maritime delimitation in the Gulf of Tonkin.

It also said China and Vietnam agreed to effectively implement the Declaration on the Conduct of Parties in the South China Sea (DOC), push for an earlier conclusion of the Code of Conduct (COC), while actively cooperating in maritime issues such as the conservation of biological resources and humanitarian search and rescue in the South China Sea.

While the DOC is only a non-binding guideline that calls on all parties to peacefully handle the South China Sea disputes “with restraint”, the COC, once its negotiations are completed, will be a legally binding document between China and the Asean countries designed to regulate nations’ behaviours in the disputed waters. But the negotiation of the COC has been long behind schedule.

China and Vietnam have complex and unresolved disputes in the South China Sea, alongside others including the Philippines, Malaysia and Brunei. Both China and Vietnam have made extensive claims of the resource-rich waters and built artificial islands to reinforce control of the reefs.

The two countries fought a brief war over the Paracel Islands in 1974, followed by another military conflict in the Spratly Islands in 1988. Incidents over oil and gas development or fishery rights also frequently occurred in recent years. In March, China announced its territorial sea baseline north of the Gulf of Tonkin.

Although tensions over South China Sea reefs have rapidly escalated between China and the Philippines since last year, Vietnam has taken a lower-key stance as the ruling Vietnamese Communist Party emphasises cooperation with Chinese counterparts.

US clinical trials in China draw questions on IP theft, forced Uygur involvement

https://www.scmp.com/news/world/united-states-canada/article/3275248/us-clinical-trials-china-draw-questions-ip-theft-forced-uygur-involvement?utm_source=rss_feed

A bipartisan group of lawmakers on Tuesday called on the Biden administration to ramp up scrutiny of US clinical trials conducted in China, citing the risk of intellectual property theft and the possibility of forced participation of Uygurs.

Republican John Moolenaar, who chairs the House Select Committee on China, and senior Democrat Raja Krishnamoorthi said US drug companies have collaborated with Chinese military-run hospitals to conduct hundreds of clinical trials over the last decade, including in Xinjiang, home to China’s Uygur minority group.

The Chinese embassy and the US Federal Drug Administration did not immediately respond to requests for comment.

“Given the historical suppression and medical discrimination against ethnic minorities in this region, there are significant ethical concerns around conducting clinical trials in [Xinjiang],” Moolenaar and Krishnamoorthi wrote in a letter dated August 19 and addressed to Robert Califf, who oversees the FDA.

Beijing denies all accusations of abuse against Uygurs.

The letter, also signed by Democrat Anna Eshoo and Republican Neal Dunn, went on: “These collaborative research activities raise serious concerns that critical intellectual property is at risk of being transferred to the [People’s Liberation Army] or being co-opted under the People’s Republic of China’s National Security Law.”

The letter is a sign of growing concern over China’s role in the biotechnology industry.

In April, Krishnamoorthi and Moolenaar’s Republican predecessor congressman Michael Gallagher called on the Biden administration to add seven Chinese biotech firms to a list created by the US Defence Department to highlight firms it says are allegedly working with Beijing’s military.

Lawmakers are also considering legislation that would restrict US business with certain Chinese biotechnology companies including WuXi AppTec and BGI.

The letter asks the FDA to answer a series of questions about the trials by October 1.

China’s most advanced amphibious assault ship spotted near Japanese waters

https://www.scmp.com/news/china/military/article/3275224/chinas-most-advanced-amphibious-assault-ship-spotted-near-japanese-waters?utm_source=rss_feed

China’s most advanced amphibious assault vessel has been spotted in the western Pacific for the first time in a year – an appearance that analysts said was aimed at showing the country’s ability to break through US-led strategic containment.

Japan’s Joint Staff Office said on Monday that two Chinese naval vessels – a Type 075 Yushen-class amphibious assault ship and a Type 052D Luyang-class guided missile destroyer – were spotted about 120km (75 miles) northeast of the Miyako Islands in Okinawa prefecture on Saturday.

The two ships sailed southeast between the main islands of Miyako and Okinawa towards the Pacific Ocean, according to the office.

“The Ministry of Defence and the Self-Defence Forces carried out warning surveillance and information gathering by the Maritime Self-Defence Force’s 8th Escort Squadron ‘Kirisame’,” the office said.

It’s been more than a year since a Type 075 was last spotted in the western Pacific near the first island chain, a series of archipelagos running from the Japanese mainland through Taiwan and the Philippines off mainland Asia.

The deployments are intended to “assert Beijing’s freedom of navigation through these waters, and symbolically to demonstrate its ability to break past the supposed US-led strategic containment within this chain,” said Collin Koh, a senior fellow at the S. Rajaratnam School of International Studies in Singapore.

“In recent years, more clearly, these missions are designed with plausible wartime scenarios in mind, chiefly related to countering an American military intervention from the eastern direction, namely, from Guam and Hawaii,” he added.

In July last year, the Guangxi, one of the three Type 075s in service, sailed from the East China Sea towards the Pacific Ocean through the Osumi Strait off Kagoshima prefecture in southwestern Japan. It was reportedly the first time that particular type of warship had crossed into Japanese waters.

In March that year, the vessel was put through its first far sea drills in the western Pacific as part of a 30-day live-fire exercise.

The Type 075 is the People’s Liberation Army’s latest and largest class of landing helicopter dock amphibious assault ship. It has a full-length flight deck that allows six helicopters to take off at one time and the capacity to carry 30 helicopters.

Analysts say the ships could play a key role in a potential military campaign against Taiwan, and they could also be converted into drone carriers.

Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute, said the Type 075 was designed to allow aviation and amphibious forces to operate from sea to shore and support those forces while ashore.

“So in a Taiwan crisis, such a vessel could be employed to seize Taiwanese offshore territories, or support a direct invasion of the main island,” Davis said.

“The 075, and the larger 076, which is still under construction, would be essential for success in any Chinese operation against Taiwan. They will also be important in other disputes in the South China Sea, and also to undertake blue water deployments beyond the first island chain.”

Beijing regards Taiwan as part of its territory to be united with the mainland – by force if necessary. Most countries, including the United States, do not recognise Taiwan as independent, but Washington opposes any attempt to take control of the island by force and is committed to supplying weapons for its defence.

Song Zhongping, a former PLA instructor and commentator, said the sightings should not be considered alarming, adding that it was “natural” that training and patrols would be extended to various regions.

“China’s naval power is growing, and whether it’s aircraft carriers or amphibious assault ships, they’re not meant to stay close to home. They need to train in different areas. So, we should view this as a routine activity.

“This small-scale fleet, led by the Type 075 amphibious assault ship, needs to adapt to various environments. It’s not just patrolling near China’s coast but also in the South China Sea and waters near Japan.”

The deployment might also be primarily aimed at “giving the crew and the PLA Marine Corps valuable sea time” and experience, according to Koh.

“The presence of an amphibious assault ship is rare mostly because the naval campaign scenarios for counter-intervention would necessitate the typical surface combatants such as destroyers and frigates, as well as submarines,” Koh said.

Last week Japan spotted the Shandong – China’s first domestically built aircraft carrier – and three other naval vessels sailing from the Philippine Sea towards the South China Sea near Taiwa.

Koh said that in the event of conflict in the Taiwan Strait, having PLA naval assets, such as the Type 075, operating off the island’s east coast could complicate Beijing’s planning.

“Suppose it is meant to undertake amphibious assault landing operations, then the prerequisite operating environment has to be one that is secure for such a ship,” he said.

“Especially given that support from mainland Chinese bases this far to the east of the first island chain might not be forthcoming and there’s a real threat of the ship being cut off to the east of this chain, become isolated and then destroyed piecemeal.”

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China President Xi praises Olympians for winning ‘glory for the country and people’

https://www.scmp.com/sport/china/article/3275243/china-president-xi-praises-olympians-winning-glory-country-and-people?utm_source=rss_feed

Chinese President Xi Jinping met the country’s Olympic heroes at the Great Hall of the People in Beijing on Tuesday, and praised them for their performance and sportsmanship throughout the Paris Games.

Xi said the athletes had “won glory for the country and people”, and told an audience including the likes of Pan Zhanle, Quan Hongchan and Zheng Qinwen to continue striving for success to further establish China as a sporting powerhouse.

China had its most successful overseas Games in the French capital, winning 40 golds to finish level with the United States. The team won 91 medals overall, just one fewer than they managed in London in 2012, the most outside the 2008 Beijing Olympics, when China won 48 golds and 100 medals in total.

The delegation’s performance has met with widespread acclaim at home and Xi said it showed China’s sporting prowess and national strength.

“The motherland and the people are proud of you and applaud you,” Xi told the athletes. “The Chinese delegation’s excellent performance in Paris has carried forward the spirit of Chinese sports, as well as the Olympic spirit.”

China has increasingly focused on sports development, which is seen as a reflection of the growing strength of the country itself, and some commentators have called the performance in Paris evidence of a continuing trend of first equalling and then overhauling the US on the world stage.

“The excellent results of the Chinese sports delegation is a concentrated reflection of the development and progress of the country’s sports cause, and also a microcosm of the achievements of China’s modern construction, fully demonstrating the strength of China in the new era,” Xi said.

And after an Olympics overshadowed by a growing row with the United States over failed drug tests and the policing of doping generally, China’s leader said the country’s athletes had also won medals the right way.

“China’s delegation has been committed to winning gold medals for morality, conduct and integrity, and has demonstrated sportsmanship and earned broad respect and recognition,” he said.

“On the field, they obeyed the rules, respected the opponents … maintained good race discipline and civilised etiquette.”

While swimmers from other countries refused to shake hands with the likes of record-breaking 100m gold medallist Pan, China’s athletes kept their composure and the 20-year-old revealed he had been subjected to 21 doping tests from May to July before the Games.

Earlier this year, it was revealed that 23 Chinese swimmers had tested positive for a banned substance ahead of the Tokyo Games, but were allowed to compete after officials deemed the substance entered their bodies unknowingly.

Xi was seen chatting happily with Pan, weightlifting gold medallist Li Wenwen as well as table tennis star Ma Long, diving queen Quan, tennis champion Zheng, swimmer Zhang Yufei and other stand-out Chinese athletes from Paris.

Ex-NBA star Yao Ming, who helped coach the women’s basketball team in Paris, and had been expected to be in Hong Kong for a charity game on Tuesday travelled to Beijing for the event. He was scheduled to return to Hong Kong afterwards.

“You showed the belief of winning by tenacious struggle and self-improvement, showing the qualities of unity and cooperation, fighting side by side, and showed the temperament of the young generation of Chinese athletes with confidence, optimism, enthusiasm and friendliness,” Xi told the athletes.

Other officials attending the event included members of the Standing Committee of the Political Bureau of the Communist Party Central Committee, and Vice-President Han Zheng.

While China’s Olympians have been welcomed across the country with open arms, fan behaviour has occasionally become disruptive and aggressive, something authorities have actively addressed.

In early August, Beijing police arrested a woman suspected of defaming table tennis player Chen Meng and her coach, after she beat fan favourite Sun Yingsha in the women’s singles final.

Pan, meanwhile, has disbanded his fan group page on the social media platform Weibo and told state broadcaster CCTV that he preferred to maintain a low profile.

Looking ahead to the 2028 Games in Los Angeles, where China ended its self-imposed Olympic exile at the 1984 Olympics, Xi promised a commitment to promoting the integration of national fitness and national health initiatives, as well as an environment “conducive to greater athletic glory”.

He said preparations in the country were already under way and urged Chinese athletes to “remain humble” while working toward increased success in LA.

“They should continue to excel in competitive sports, and help promote national fitness and the development of youth sports,” Xi said.

Additional reporting by Vivian Au

As China’s consumption picture changes, think tank argues, so must its policies

https://www.scmp.com/economy/china-economy/article/3275223/chinas-consumption-picture-changes-think-tank-argues-so-must-its-policies?utm_source=rss_feed

China’s policymakers must assess and accommodate a dramatic shift in consumption patterns to effectively incentivise spending – a task that becomes more crucial as pressures to stimulate economic activity grow – a Beijing-based think tank has said.

“The government’s approaches to boost consumption have failed to accurately capture the shifts in consumer behaviour observed in certain sectors,” said public policy consultancy Anbound in a report published Sunday. Chinese consumers, the report said, are more inclined to make spending decisions based on factors like quality, self-development and pleasure as budgets become more “subdued”.

The comments came as China’s consumption continues to weaken despite a raft of policies designed to buoy spending. Consumers, haunted by cloudy economic prospects and reduced incomes, have grown increasingly cautious about parting with their hard-earned money.

In July, retail sales grew by 2.7 per cent year-on-year, while consumption related to sports and entertainment increased by 10.7 per cent, according to the National Bureau of Statistics – a tendency mirrored across the first seven months of the year.

The Anbound report pointed out that measures to promote consumption continued to focus on the supply side, primarily targeting “collective consumption” – goods and services directly provided by the state or otherwise dependent on regulatory intervention – including real estate, automobiles and service industries aided by subsidy.

“From China’s current mainstream macroeconomic perspective, the logic of consumption still starts from the supply side,” Anbound said. “Within this policy framework there are many tools available, such as industrial funds and subsidies.”

However, these time-tested methods have not taken revolutionary shifts in the consumer sector into account, Anbound said, relying instead on existing modalities that might not address “more complex underlying issues” or reflect current trends.

“Once the macroeconomy recognises mass consumption and regards it as an important strategic path for economic development,” the report authors said, “it must inevitably confront these underlying issues and the systemic problems they create, which would be undoubtedly challenging.”

Anbound said in the present environment Chinese consumers are gravitating towards higher quality products to satisfy their needs, while investments in premium shopping have outpaced those in traditional consumer sectors as well as high-end luxury markets.

Young consumers were also found to be more willing to pay for emotional satisfaction, splurging on experiences like concerts and shows they believe will make them happier.

While the economic downturn has impacted most industries, the think tank added, sectors that cater to the developmental needs of individuals and families – such as sports and study tours marketed to young students – have stayed resilient.

The educational tourism market grew nearly 62 per cent in 2023 to 146.9 billion yuan, with market value expected to reach 242.2 billion yuan by 2026, according to iiMedia Research, an industry research firm.

Earlier this month the State Council - China’s cabinet - released a 20-point directive vowing to increase support for a wide range of services, which taken as a whole have outpaced goods in growth.

China has also allocated around 300 billion yuan (US$42 billion) in “ultra-long-term” special government bonds to support upgrades to industrial equipment and a consumer goods trade-in programme analysts have argued will play a crucial role in stabilising China’s economy over the second half of the year.

China promises to help Fiji tackle climate change as Beijing seeks greater Pacific role

https://www.scmp.com/news/china/diplomacy/article/3275229/china-promises-help-fiji-tackle-climate-change-beijing-seeks-greater-pacific-role?utm_source=rss_feed

China has pledged to support Fiji’s development and help tackle the impact of climate change during Prime Minister Sitiveni Rabuka’s visit to Beijing.

President Xi Jinping, who met Rabuka on Tuesday, told him that China attaches “great importance” to the relationship and “is willing to continue to provide assistance to Fiji in economic and social development”.

State broadcaster CCTV reported that he also said China is ready to assist Fiji and other Pacific island countries “in dealing with climate change” and work to make the Pacific Ocean “an ocean of peace, friendship and cooperation”.

In turn, Rabuka expressed interest in learning from China’s successes in fighting poverty and developing its infrastructure, according to CCTV.

Rabuka’s first visit as prime minister comes at a time of heightened geopolitical tensions in the Pacific, where various global powers are seeking to assert their influence.

As well as meeting Xi, Rabuka’s 10-day trip included a meeting with Premier Li Qiang, tours of the economic hubs of Zhejiang and Fujian, and a trip to Yunnan, a key province in the country’s poverty alleviation efforts.

During their discussions on Sunday, Rabuka and Li agreed to enhance cooperation in a range of areas, including infrastructure, agriculture, fisheries, light industry, education, tourism and poverty alleviation, according to China’s foreign ministry.

Rabuka highlighted Fiji’s eagerness to work with China on “poverty alleviation, infrastructure development including land and maritime connectivity, the Belt and Road Initiative and rural revitalisation,” a Facebook post by the Fijian government said.

Rabuka’s visit followed similar trips by leaders from the Solomon Islands and Vanuatu as part of Beijing’s broader strategy to bolster influence in Oceania.

Mihai Sora, director of the Pacific Islands Programme at the Lowy Institute in Australia, said: “China is eager to strengthen its relations with key Pacific leaders as part of its ambition to increase its political access and influence in the Pacific … The visits signal China’s ongoing ambition to deepen its political influence in the Pacific, with the objective of increasing its strategic access to the region.

“Fiji holds significant geopolitical importance for China due to its central location in the South Pacific, its leadership role within the key institutions, such as the Pacific Islands Forum, and its informal influence over regional dynamics,” he said.

Earlier this year, Rabuka decided to review a controversial policing agreement signed in 2011 allowing Chinese police officers to be stationed in Fiji.

Suva eventually upheld the agreement – which also saw Fijian officers being trained in China while Beijing provided equipment such as surveillance gear and drones – but Chinese police will no longer be deployed inside Fiji.

In 2022, China and the Solomon Islands signed a similar policing pact, while Papua New Guinea confirmed in February that a similar deal was in the pipeline.

“The increased tensions in the region arise from China’s push into the security space, particularly when considered alongside its actions in the South China Sea,” Sora said.

However, he said positive relations with Fiji largely relied on economic ties as the country, like most Pacific Island nations, had “made clear strategic choices so far, siding with the United States and Australia for security cooperation”.

But such cooperation has attracted further scrutiny – primarily from Canberra and Washington – because of geopolitical concerns and Chinese loans, mostly in the form of aid, to Pacific nations.

Last year, when Fiji said it was likely to work with China to develop its ports and shipbuilding industry, it immediately drew questions from regional stakeholders concerned about China’s influence.

By April last year, Fiji owed the Export-Import Bank of China at least US$167 million, according to a government report.

Chinese grants and loans to island nations fell to US$241 million in 2021 from a peak of US$384 million in 2016, according to the Lowy Institute, which said Australia remained their biggest donor by some measure.

Hong Kong hedge fund SVI winds down bets on Chinese equities, returns capital to investors

https://www.scmp.com/business/markets/article/3275235/hong-kong-hedge-fund-svi-winds-down-bets-chinese-equities-returns-capital-investors?utm_source=rss_feed

Hong Kong-based hedge fund Strategic Vision Investment (SVI) has wound down its main Value Multiplier Fund, which invested in Chinese equities, three sources said.

SVI liquidated the holdings of the long-short fund at the end of July and is returning its external capital to investors, said the sources, who are directly aware of the developments. It sees limited room to expand its strategy, given geopolitical tensions and shifts in the investment landscape in the region, one of them said.

SVI declined to comment.

Founded by Ken Xu as BosValen Asset Management in 2014 and rebranded as SVI six years later, the firm managed more than US$1 billion (HK$7.82 billion) in assets last year. It now plans to use its own capital and investment from new strategic partners to form a multifamily office, or an entity to manage the wealth of rich families.

The Value Multiplier Fund managed more than US$400 million at its peak and suffered a 1.1 per cent loss last year, according to a person familiar with its performance. The Eurekahedge Greater China Hedge Fund Index fell 8 per cent last year. The multiplier fund had an annualised return of 28 per cent since 2020, the person added.

The liquidation of the fund’s positions comes at a time when Chinese funds face mounting pressures on raising fresh capital and performance, owing to the country’s faltering economic growth, policy uncertainties and geopolitical tensions.

Some foreign investors are leaving China, while others are cautious about their exposure to the country.

China’s stock markets have struggled since 2021, with both the local benchmark CSI 300 Index and MSCI China Index falling between 2021 and 2023. China shares rebounded earlier this year, but have weakened again since June as investor confidence ebbed.

SVI’s family office will focus on global alternative investments, as well as opportunities in artificial intelligence and space technology, one of the sources said.

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Can China present a ‘credible, lovable and respectable’ image to the world?

https://www.scmp.com/news/china/diplomacy/article/3275236/can-china-present-credible-lovable-and-respectable-image-world?utm_source=rss_feed

Joseph Nye, the academic who coined the term soft power, recently weighed in on the debate about whether China should continue to follow Deng Xiaoping’s approach of lying low and biding its time.

In an interview with the South China Morning Post, the Harvard academic pointed to Beijing’s image problems in Asia and democratic countries.

“I would say that before you dropped the Deng Xiaoping policy, you did not scare other people and you were very attractive. It was good for your soft power. Once you start being a wolf warrior and asserting yourself, you scare people and you lose some of your soft power,” he said, citing various polls.

Although Beijing has effectively ditched Deng’s dictum in the era of Xi Jinping, it rarely acknowledges this publicly or blames itself for its image problem.

As China marks Deng’s 120th birthday this week, the country’s top diplomat Wang Yi has called for concerted efforts to “foster a favourable external environment”.

In an article published last week in the party’s mouthpiece People’s Daily, Wang claimed that China was in a “period of development in which strategic opportunities, risks and challenges are concurrent, and uncertainties and unforeseen factors are rising”.

Without naming the US and its key allies, such as Japan, Wang slammed the “encirclement and suppression of emerging forces” by “individual big powers” but insisted China still faced “new strategic opportunities”.

Wang also offered clues about how Beijing would balance its ties between the West and Russia, saying it would continue to promote its partnership with Moscow but wanted to “explore the right way for China and the United States to get along” and promote “health and stable” relations with Europe.

Despite its regular clashes with the Philippines in the South China Sea, Wang also said China would continue to “deepen friendship, mutual trust and interest integration” with neighbouring countries.

But in a tacit admission of China’s reputational woes, he said the country would need to “comprehensively improve the effectiveness of international communication and present a credible, lovable and respectable image of China.”

Wang also indicated China has no intention of ditching its much-criticised “wolf warrior” diplomacy in exchange for better ties with the West.

“General Secretary Xi Jinping has pointed out … that as long as we maintain confidence and determination, take on responsibilities actively, dare to be good at struggle … we will surely be able to open up new horizons to advance our cause,” he wrote.

Beijing appears largely unfazed by plummeting relations with the US, Europe and other developed countries as a result of its strong-arm approach to maritime disputes and close ties with Russia, Iran and North Korea.

Instead, there are signs it is becoming increasingly ambitious and assertive. Both Chinese and overseas observers attribute this to its confidence about its popularity in the Global South and its bleak assessment that there is little chance to repair its image in the West for the foreseeable future.

Some even argue that even if it does not want to break ties with the West, Beijing would regard that as a price worth paying to secure world power status on a par with the US.

A poll of 35 countries published last month by the US-based Pew Research Centre showed people in 17 countries, mostly middle-income nations in Asia, Africa and Latin America, viewed China’s economic influence positively. But in 24 countries – mostly high and middle-income ones – more people had a favourable view of the US than they did of China.

Respondents in nine of the Indo-Pacific countries surveyed – the Philippines, Japan, India, South Korea, Australia, Malaysia, Sri Lanka, Bangladesh and Singapore – expressed concern about China’s territorial disputes with its neighbours. Thailand was the only place where people were not worried.

Meanwhile, in a rare glimpse into how the Chinese public view their government’s handling of the rivalry with the US, a poll last year found 43.9 per cent of respondents believed both sides should be blamed, while 43.8 per cent felt Washington was solely responsible – down from 78 per cent the previous year.

The survey by China International Communications Group and Genron NPO, a Japanese think tank, questioned 1,500 people in 10 Chinese cities. While it may be debatable how convincing a single poll can be, it is worrying that a growing number of people were voicing dissatisfaction with the deepening feud.

That should at least cause concern in Beijing, which needs to do a better job at explaining the rationale behind its current approach to people at home and abroad.

As Nye argued over a decade ago, failing to forge high-quality partnerships and being seen as a bully will hamper its ability to compete with Washington. “In that sense, only China can contain China,” he said.

Beijing seeks to boost military cooperation with Vietnam despite South China Sea dispute

https://www.scmp.com/news/china/military/article/3275237/beijing-seeks-boost-military-cooperation-vietnam-despite-south-china-sea-dispute?utm_source=rss_feed

China has urged Vietnam to “seize the opportunity” by boosting military cooperation between the two countries.

China’s Defence Minister Dong Jun made the appeal in a meeting with his Vietnamese counterpart Phan Van Giang in Beijing on Tuesday.

Their emphasis on cooperating despite their long-running territorial dispute in the South China Sea is in stark contrast to the rising tensions between China and the Philippines in the contested waterway.

In recent years Manila, which is a close ally of the United States, has taken a more confrontational approach in contrast to Vietnam’s lower-key stance.

On Monday, Chinese and Philippine coastguard ships collided near Sabina Shoal in the Spratly Islands, with each side blaming the other.

On Tuesday, the Chinese foreign ministry also criticised the US, saying it had “no right to intervene” in the dispute after Washington condemned China’s “dangerous actions” in response to “lawful” Philippine operations.

The meeting between Dong and Giang was part of a series of high-level meetings between China and Vietnam and came two days after the country’s new leader To Lam visited Beijing for talks with President Xi Jinping.

Hailing the relationship between China and Vietnam as “a community of shared destiny with strategic significance”, Dong stressed the need for the two countries’ armed forces to “improve the quality and efficiency of cooperation”, according to state news agency Xinhua.

He said the two militaries should “seize the opportunity” after Xi and Lam’s meeting and boost cooperation in areas such as training, joint exercises and international cooperation.

According to Xinhua, Giang said Vietnam is willing to strengthen cooperation between the two militaries through mutual visits and border exchanges and to elevate ties to a new level.

On Monday Lam also met Chinese Premier Li Qiang, who focused on the close economic and trade ties between the two countries and said there was space for industrial cooperation.

According to Xinhua, Li also pledged to deepen cooperation and strive for stronger political trust, security cooperation, and “better management and resolution of differences”.

Li further said that China is willing to build synergies between the China-led Belt and Road Initiative and Vietnam’s own development strategy to enhance connectivity and expand trade and investment between the two countries.

He also said China and Vietnam should enhance coordination through multilateral mechanisms such as the United Nations, Association of Southeast Asian Nations and Lancang-Mekong Cooperation.

According to China’s statement, Lam stressed that Vietnam has always give top priority to relations with Beijing and is willing to work together to strengthen exchanges at all levels, consolidate mutual trust, and deepen cooperation in trade, investment, transport, tourism and education.

Tesla faces lowest duty on Chinese-made cars exported to EU

https://www.theguardian.com/technology/article/2024/aug/20/tesla-faces-lowest-duty-on-chinese-made-cars-exported-to-eu

Tesla will face a 9% levy on its Chinese-made cars exported to the EU, the European Commission has said, as it issued an update on its sweeping investigation into Beijing’s “unfair” subsidies of electric vehicles.

The tariff on Tesla – far lower than the 21.3% average on companies that cooperated with the EU investigation and 36.3% on those that did not – came after the California-headquartered firm requested individual treatment as part of the wider Brussels inquiry.

The levies – far lower than the 100% tariffs imposed by the US – come on top of the EU’s existing 10% duty on EVs from China.

EU officials visited Tesla’s Shanghai operations in June and said on Tuesday that the company had benefited from Chinese state subsidies, mainly below-cost batteries, but also cheap land and grants for exporters.

The 9% tariff will apply by 31 October at the latest, subject to approval from EU member states.

The Tesla decision was revealed as the commission announced modest downward tweaks to the tariff rates on Chinese-made EVs after technical talks with the companies.

Under the latest proposals, China’s BYD, which vies with Tesla for the title of the world’s largest producer of electric vehicles, will face a 17% tariff; Geely 19.3% and SAIC 36.3%. The three rates have been revised downwards since provisional measures were published in June and could be changed again.

EU officials also announced on Tuesday that no company would have to pay provisional tariffs before the likely entry into force by the end of October. Companies are being spared interim duties because EU officials have concluded that European carmakers face “the threat of injury” rather than actual harm, such as factory closures and job losses.

An EU official said if nothing was done, the growth of subsidy-powered Chinese EV exports would soon lead to “material injury” for EU producers, adding: “Our legislation allows us to act before people are fired and factories are shut down.”

The Kiel Institute for the World Economy thinktank estimated earlier this year that China’s aid to EVs amounted to about $5.6bn (€5.05bn, £4.3bn) in 2022 when direct payments to manufacturers were phased out.

By far the biggest beneficiary was BYD, which received $3.7bn. Although Tesla’s aid was dwarfed by its Chinese rival, it was the second biggest beneficiary, with about $426m in support for its Shanghai plant.

The China trade specialist website Soapbox released an analysis this week of figures from the European Commission’s data body Eurostat and Chinese customs authorities that found the EU accounted for 45% of the total value of EVs exported by Beijing between June 2020 and June 2024.

Customs data shows a spike in exports in April by China’s manufacturers ahead of anticipated tariffs, while at the same time registrations of imports of Chinese EVs increased between April and May, dipping thereafter.

Philippines to seek ‘peaceful approach’ with China over ship collision

https://www.scmp.com/week-asia/politics/article/3275220/philippines-seek-peaceful-approach-china-over-ship-collision?utm_source=rss_feed

The Philippines will pursue diplomacy over military action in response to rising maritime tensions with China including considering new agreements to manage air and sea encounters, the National Maritime Council said on Tuesday.

“Because if we would be going beyond a diplomatic or peaceful approach, you can just imagine, maybe if you’re referring to more kinetic [military] actions, that would not be to the best interest of our country and of China and even in the region,” Alexander Lopez, the newly appointed presidential palace spokesman for the council, said in his first press briefing.

The briefing took place a day after Philippine coastguard vessels were damaged when they collided with Chinese coastguard vessels near the contested Sabina Shoal inside the Philippine exclusive economic zone early on Monday morning – the latest in a series of similar clashes in the disputed waterway.

Manila and Beijing have traded accusations about the other party being at fault for the latest incident, which caused damage to two Philippine vessels but no reported injuries. A Philippine military spokesman said the collision was caused by the “dangerous and illegal manoeuvres” of the Chinese coastguard.

When Lopez was asked whether the government would respond beyond the usual diplomatic protests to counter China’s latest actions, the retired navy vice-admiral said the diplomatic approach was “in line with the President’s directive”.

Lopez was referring to previous statements made by President Ferdinand Marcos Jnr telling the military that he wanted to resolve the South China Sea conflict through diplomatic measures rather than “instigate war”.

The former military commander overseeing operations in the West Philippine Sea said: “We can never go wrong by using this diplomatic and peaceful approach. And we are compliant with the [Asean] Code of Conduct that we have signed in 2002 that among others, parties will exercise restraint in the conduct of activities that would complicate or even escalate the dispute in the area, among others.”

He also said the Philippine coastguard has been ordered to gather evidence from Monday’s collisions and proper documentation for a possible filing of diplomatic protest by the foreign affairs department.

“The Philippines will continue to uphold its rights and jurisdictions in the West Philippine Sea, and protect its territory and maritime zones from environmental degradation and other illegal activities,” said Lopez, referring to the part of the South China Sea considered by the country as its maritime territory.

Lopez also floated the idea that the foreign affairs department could negotiate with China for an extension of the current provisional arrangement allowing the Philippine military to conduct resupply missions to the BRP Sierra Madre, a dilapidated ship serving as an outpost on the Second Thomas Shoal.

“Maybe [such an arrangement] could also be extended to other areas in our maritime domain,” he said. He added that the foreign affairs office was studying this possibility and “whether it would merit coverage of maybe a bigger area or maybe the entire [West Philippine Sea].”

China claims 90 per cent of Manila’s maritime domain through its so-called nine-dash line, which a 2016 ruling by an arbitral tribunal in The Hague declared as a violation of the United Nations Convention on the Law of the Sea. One of the 157 signatories of Unclos, China ratified the convention in 1996.

Lopez’s comments echoed that of government officials calling for a broader bilateral agreement to manage the territorial row.

In a radio interview, Philippine coastguard Commodore Jay Tarriela suggested that Manila and Beijing should negotiate a new agreement covering the entire West Philippine Sea.

Tarriela said: “We are once again hoping and praying that China will eventually realise that this bullying – unlawful acts they are doing – of course with the pressure from the international community, would again compel China to join us in the negotiating table so we can have a proper dialogue.”

Philippine Foreign Secretary Enrique Manalo told Congress during a budget hearing last Tuesday that an expansion of the agreement with Beijing on Manila’s resupply missions was “certainly an interesting idea”.

National Security Council assistant director general Jonathan Malaya said in an interview with ANC TV on Tuesday that the National Maritime Council should consider formulating with China some guidelines to manage air encounters.

He made this suggestion one week after a Chinese air force plane fired flares in the path of a Philippine air force plane near the contested Scarborough Shoal.

He told ANC TV that Asean defence ministers in 2018 agreed to work towards adopting multilateral guidelines for air encounters.

“For example, in the case of the air incident over the Bajo de Masinloc [Manila’s name for Scarborough Shoal], the use of flares is not standard among friendly nations. So the use of flares in the flight path of a Philippine air force aircraft could be considered a hostile act,” Malaya said.

China has justified its use of flares in the incident as an exercise in defending its maritime sovereignty.

More countries have voiced support for the Philippine position over its maritime row. In addition to statements from Japan and the US, Germany, France, New Zealand and Australia have expressed concern about the latest incident.

The Japanese embassy said in a statement that it was “seriously concerned over the recent aggressive conduct causing damage to the Philippine vessels. Any harassment and actions which increase tensions or disturb navigational rights are not tolerated. Japan stands with the Philippines by upholding rules-based order and peaceful settlement of disputes based on international law.”

The two ships that were damaged in Monday’s collisions were the first ever modern, multi-role response vessels acquired by the Philippine coastguard in 2018 under an official development assistance loan administered by the OECD.

US State Department principal deputy spokesman Vedant Patel issued a statement saying: “The United States reaffirms that Article IV of the 1951 US-Philippines Mutual Defence Treaty extends to armed attacks on Philippine armed forces, public vessels, or aircraft – including those of its coastguard – anywhere in the South China Sea.”

China targets cryptocurrencies, online game coins in intensified money-laundering crackdown

https://www.scmp.com/economy/china-economy/article/3275211/china-targets-cryptocurrencies-online-game-coins-intensified-money-laundering-crackdown?utm_source=rss_feed

Cryptocurrencies, online game coins and tipping during live streaming would be considered money laundering in China, according to the highest judicial bodies, marking the first instance of Beijing revising its laws to target the use of virtual assets.

The Supreme People’s Court and the Supreme People’s Procuratorate said on Monday that the 13 revisions would take effect from Tuesday.

The transfer and conversion of criminal proceeds and their benefits through virtual asset transactions and financial asset exchanges would be covered under regulations that prohibit “covering up and concealing the source and nature of criminal proceeds and their benefits by other means”, the Supreme People’s Court said on Monday.

In recent years, there has been growth of online platforms being used for money laundering through virtual rewards via live streaming and gaming.

Virtual currency, game coins, internet platforms and payments through live streaming have become new money-laundering channels, showing more complex and hidden networking and chainlike characteristics, the statement said.

In February, authorities in Shanghai charged four live streamers with money laundering after they exchanged virtual gifts and rewards that were found to be part of an illegal fundraising scheme totalling 1.2 billion yuan (US$168 million).

In 2021, authorities in Shanghai also found that an “underground bank” had engaged in illegal exchange of foreign currencies worth 2.5 billion yuan over six years using game cards – prepaid cards that allow users to buy virtual currency for online games.

Regulators have sought to revamp China’s anti-money-laundering laws to bolster a crackdown on illegal activities and address risks related to virtual assets.

A draft amendment to the anti-money-laundering law, which was enacted in 2006 and took effect in 2007, was discussed at a State Council meeting chaired by Premier Li Qiang in January, with the law later submitted for review by the national legislature.

In 2023, 2,971 people were prosecuted for money laundering, representing a nearly twentyfold increase from 2019, Zhang Jianzhong, an official from the top prosecuting body said on Monday.

Zhang added that in the first half of 2024, 1,391 people had been prosecuted for money laundering, up by 28.4 per cent year on year.

“The crackdown on money-laundering crimes continued to intensify,” Zhang said.

Other amendments announced on Monday included clearer guidelines around “serious circumstances” in money-laundering cases, such as refusal to cooperate with authorities or if the amount being laundered was more than 5 million yuan.

Offenders could face between five and 10 years in prison and a minimum fine of 200,000 yuan (US$28,000).

Criminals use virtual currencies and game coins to make transfers across China’s borders through underground banks, making the cases difficult to investigate and prosecute, the statement said, adding that the transaction amounts were often sizeable.

Smuggling, corruption and bribery and financial crimes committed through cross-border transfer of assets were among the most common money-laundering cases investigated by authorities between 2022 and 2023, the Supreme People’s Court statement said.

China’s central bank has previously urged banks and mobile payment providers to be vigilant and stop providing services related to virtual currency activities.

Prosecutors in the likes of Beijing, Zhejiang, Fujian, Henan and Hubei have actively worked with relevant departments to strengthen the coordination between law enforcement and anti-money-laundering through measures such as information sharing, regular joint meetings and the setting up of a financial judicial coordination centre.

China’s AAA game Black Myth: Wukong tops Cyberpunk 2077, Elden Ring for most Steam players

https://www.scmp.com/tech/big-tech/article/3275227/chinas-aaa-game-black-myth-wukong-tops-cyberpunk-2077-elden-ring-most-steam-players?utm_source=rss_feed

Black Myth: Wukong, China’s first AAA video game, has broken the record to become the most-played title of its kind on its first day of release on the digital games store Steam, marking a major milestone for the Chinese developers.

The action role-playing game, developed by the Tencent Holdings-backed studio Game Science and inspired by the classic Chinese novel Journey to the West, recorded 1.4 million concurrent players in the first three hours of its release, surpassing the world’s most popular single-player games that in recent years include hits such as Cyberpunk 2077, Elden Ring and Baldur’s Gate 3.

The rush to play the title, which spent six years in development, has made it No 4 on Steam’s chart for having the most concurrent players of all time, following PUBG: Battlegrounds, Palworld and Counter-Strike 2, according to the store’s real-time ranking on Tuesday.

The biggest reason behind the popularity is China’s long absence from AAA games – an informal classification that refers to games from a mid-sized or major publisher that typically have higher development and marketing budgets – according to Zhang Shule, an analyst with CBJ Think Tank.

“As the world’s largest gaming market and [home to] the richest gaming company [Tencent], there were no products that were truly recognised as AAA games globally. This has become a pain in the hearts of Chinese game developers and players,” Zhang said. “This is also the reason why Black Myth: Wukong was so highly anticipated.”

Zhang previously predicted that the game would need to sell 5 million copies to be considered a well-performing domestic AAA title, but raised his forecast amid its tremendous popularity. “Now I have reason to believe that this game will have a chance to reach 10 million [in sales volume],” he said.

In comparison, Cyberpunk 2077, released by Polish game developer CD Projekt in December 2020, had sold 25 million copies by October 2023. Elden Ring, from Japan’s FromSoftware, reached the same sales volume by June this year after its February 2022 launch.

As the game became available to players at 10am Tuesday, China time, nearly 1,000 live-streaming sessions were set up on the Chinese video-streaming platform Bilibili, where people played the game live or discussed their initial impressions of the game.

Qian Xuecheng, a 30-year-old gamer in Shanghai who has been playing single-player titles for a decade, explained how he took a day off from work – his first leave of the year – just so he could start the game as soon as it was released.

“I’ve been waiting for Wukong for so long,” said Qian, adding that the game’s quality was beyond his expectations.

“Good graphics, good character design, good battle scenes. Although it might be a bit too difficult for fresh players who have not tried any Souls-like games,” he said, referring to the subgenre of action role-playing games named after FromSoftware’s Souls franchise and known for their high difficulty level dark fantasy settings.

Feng Ji, founder and CEO of Game Science, said in a Weibo post on Tuesday that his team aimed to make the game playable for both fresh and experienced gamers.

“In the last year before release, the most-discussed topic between me and the designers was how to increase the flexibility and tolerance of the game’s difficulty,” said Feng, who was a game designer at Tencent before starting his own company.

In addition to a number of brand tie-ins, the studio’s investors have stepped up efforts to promote the game for its release.

Beijing-based Hero Games, an early investor and joint distributor of Black Myth: Wukong, put up huge posters of the Monkey King at a 20,000-square-metre complex – a project initiated by the company’s founder Dino Ying – in the heart of Shanghai on Tuesday, along with music events about the game staged to host excited players.

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Why Harris-Walz is still the better pick for US-China engagement

https://www.scmp.com/opinion/world-opinion/article/3274658/why-harris-walz-still-better-pick-us-china-engagement?utm_source=rss_feed

There has been a lot of chatter and misinformation online about Tim Walz and his connection to China since US Vice-President Kamala Harris named the Minnesota governor, former congressman, teacher and football coach as her running mate.

Republicans, led by Donald Trump, a convicted felon who clocked up a reported 30,573 false or misleading statements during his presidency, have swallowed the orange Kool-Aid and are painting a weird and false portrait of Walz. Typical drivel includes the post on X by Trump acolyte and potential secretary of state Richard Grenell: “Communist China is very happy with @GovTimWalz as Kamala’s VP pick. No one is more pro-China than Marxist Walz.”

It reminds me of the hilarious ways in which Republicans successfully demonised legendary Florida congressman Claude Pepper in 1950, including by calling him “Red Pepper” for his liberal views, during the anti-communist “red scare”.

Let’s try to set the record straight for Walz.

It is true that young Walz was a high school teacher of American culture and history as well as English in southern China on a programme founded by Harvard students in the momentous 1989-1990 period, and was among the earliest cohort of American teachers in China.

It is also true that he has made more than 30 trips to China and even honeymooned there, giving rise to unsubstantiated accusations that he must have been a spy, based on the weak argument that overworked and underpaid teachers could never have afforded such luxuries. Critics are also incensed that years ago, Walz had the temerity to suggest that the US and China did not need to have an “adversarial relationship”.

As a football coach at Mankato West High School in Minnesota, Walz took his team from a bunch of losers to state champions in 1999. In China, Walz’s young students at Foshan No 1 High School nicknamed him “Fields of China” for his kindness.

While friendly with the Chinese people, Walz is no fan of China’s Communist Party and has criticised the government. From 2007 to 2018, he served on the Congressional-Executive Commission on China, which monitors its legal and human rights developments, and was described as a “stalwart” member by the chairman. He was a frequent critic of China’s human rights record – his photo with the Dalai Lama is well-known.

My view is that electorally, Walz’s China affinity will have a modestly negative effect at worst, especially if he and Harris can win over the moderate voters in the swing states. As a Jew, I don’t believe that Walz will seriously imperil the ticket’s chances in the way that Pennsylvania governor Josh Shapiro, an observant Jew whom Harris reportedly considered for running mate, would have.

If Harris-Walz can win the November 5 election – widely seen as a virtual toss-up – it will be a net win for US-China relations, as Walz has a genuine affection for China and its people. Michael Hayden, a former director of the CIA and National Security Agency, has said of Walz’s knowledge of China: “So he knows a lot about it. That’s great.” If Harris wins, Walz would be in a prime position to influence policy in an administration whose leader lacks foreign policy experience, especially with China.

Knowledge is power and so is personal experience. Walz looks set to be the perfect realpolitik practitioner, capable of building bridges and being frank in private negotiations while publicly displaying a pragmatism – because he “gets” China from having lived there and being familiar with the Chinese culture, language and people.

More than seven decades ago, China’s first premier, Zhou Enlai, was prescient in proposing a model of diplomacy that he called “folk diplomacy”. Today, such a concept is more commonly known as people-to-people connectivity, a key element of a nation’s soft power, its influence in shaping the preferences of others using a toolkit that includes culture, foreign policy and tourism – as distinct from hard power, which involves the use of force and coercion.

In this spirit, what a contrast Walz can offer to the name-calling and the “small yard, high fence” (although in my view, it is actually “big yard, high fence”) erected by the US and its allies to keep China from again becoming a global leader, as it was for millennia during its storied history.

While it may be too much to see an instant reset in US-China relations, even from a Harris-Walz administration, we can at least hope for an initial modus vivendi where both countries can find a coexistence capable of addressing our shared existential challenges.

These challenges are not abstract or wonky, but increasingly part of everyday life. They include global warming and extreme weather, which threaten to destroy life as we know it. They also include preventing the next pandemic, which scientists tell us is a matter of time – and could be just around the corner. And they include the “AA” threats arising from artificial intelligence and autonomous weapons, and the “ABC” threats of atomic, biological and chemical weapons based in the sea, on land or out in space.

Only by building a global community with a shared future and working together, whether bilaterally or in international, regional and multilateral groupings, might we avoid a certain extinction.

Unlike the Trump-Vance Republican team, which I see as false prophets of gloom and doom, I believe a Harris-Walz administration has the potential to slow the downward spiral of US-China relations and engage where we can and must, starting at noon on January 20, 2025.

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China research ‘bridges gap’ between power hungry AI models and the human brain

https://www.scmp.com/news/china/science/article/3275165/china-research-bridges-gap-between-power-hungry-ai-models-and-human-brain?utm_source=rss_feed

Scientists in China said they have simulated an artificial intelligence model that mimics the behaviour of neurons in the human brain to achieve computational power without the high energy consumption associated with silicon-based processors.

According to a paper published by Nature Computational Science on Friday, the researchers developed a model that bridges the gap between big, externally complex AI networks and the small, internally complex workings of the brain.

Industry experts said the team’s findings could mark a pivotal shift in AI development, prompting further exploration of computing solutions that are not dependent on silicon chips.

Current AI trends largely revolve around building ever-bigger neural networks, an approach that is fuelling concerns about unsustainable energy demands and a lack of interpretability.

In contrast, the human brain – with its 100 billion neurons and around 100 trillion synaptic connections – consumes about 20 watts of power. At the same time, each of the brain’s neurons is more diverse and complex than any existing AI model.

Researchers Li Guoqi and Xu Bo from the Chinese Academy of Sciences’ Institute of Automation, along with Peking University’s Tian Yonghong, noted that the two models shared a symbiotic relationship.

But while the brain’s neurons produce and transfer complex signals that can change over time, the silicon chip-based AI model – which the researchers described as a “coarse abstraction” of a biological neuron – can only ever generate noughts and ones.

The researchers used a mathematical model first described in 1952 by neurologists Alan Hodgkin and Andrew Huxley to build a neural network that effectively replicated the capabilities of the larger, simpler model in a smaller, internally complex structure.

According to the paper, the network – consisting of four leaky integrate-and-fire neurons – was able to reproduce the behaviour of a single Hodgkin-Huxley neuron through a range of theoretical proofs and simulations.

In an interview with state news agency Xinhua, co-author Li said that the research team’s innovative approach not only maintained performance levels but also doubled processing speed, while cutting memory usage by four times.

“This development could pave the way for optimising AI models in practical applications, boosting performance,” Li said.

“The experimental results confirm that the internal complexity model is effective and reliable for complex tasks, providing new methods and theories for incorporating neuroscience’s dynamics into AI.”

In an article on the paper that appeared in the same publication, Jason Eshraghian, a University of California assistant professor in electrical and computer engineering, said it motivated an exploration of hardware “beyond silicon-based computing”.

“By revisiting and deepening the connection between neuroscience and AI, we may uncover new ways to build more efficient, powerful, and perhaps even more ‘brain-like’ artificial intelligence systems,” he said.

The future of AI development may hinge on combining detailed imitation of biological neuron dynamics with the expansion of larger models and more robust hardware, steered by continuous advancements in neuroscience.

The CAS Institute of Automation marked another significant AI milestone in June when a collaboration with Swiss corporation SynSense yielded Speck – a brain-like neuromorphic chip with integrated dynamic vision sensors.

Speck not only enhances task accuracy by 9 per cent but also reduces average power consumption by 60 per cent, according to its developers.

China AI: game company launches tool for creating 3-minute dramas with music and plot

https://www.scmp.com/tech/tech-trends/article/3275186/china-ai-game-company-launches-tool-creating-3-minute-dramas-music-and-plot?utm_source=rss_feed

Kunlun Tech, an online game publisher, has launched an artificial intelligence (AI) tool that it says can produce short dramas, the latest example of a Chinese business hoping to profit from AI-generated content.

Skyreels, the “world’s first AI reels platform”, is able to generate scripts, characters, plots, storyboards, dialogue and music to create a short video, according to a demo showing the product’s operating interface and a statement published by Shenzhen-listed Kunlun Tech on its WeChat account on Monday.

The platform is based on Kunlun’s self-developed large language models (LLMs) and can generate videos each running up to 180 seconds long, surpassing industry leader OpenAI’s text-to-video tool Sora, which can make 60-second clips, according to the Beijing-based company.

A long list of Chinese companies are exploring ways to build useful tools supported by generative AI, making the country one of the most crowded markets for AI apps. Kunlun Tech has already launched an AI streaming music platform and a music creation tool called Mureka.

Founded in 2008, Kunlun Tech is known locally for online games such as Girl’s Dream Factory and Tale of Wuxia. After going public on Shenzhen’s ChiNext stock market in 2015, it expanded into the social network and entertainment industries. It is active in overseas markets, including Southeast Asia, Africa and the Middle East.

The company had an average of nearly 400 million monthly active users worldwide last year, with overseas sales accounting for 86 per cent of total revenue, according to its annual financial report.

Last year, shares of Kunlun Tech jumped more than threefold from 14.85 yuan on January 20 to 65.16 yuan on April 28, during the height of the AI frenzy that fuelled a rally in related stocks.

Kunlun Tech rolled out its first LLM, Skywork, in April 2023 and has expanded its AI products to the web search, music, video gaming and video sectors, amassing more than 1 million daily active users by May this year, the company said.

“The opportunities of customer-focused products are unprecedented, as AI has greatly reduced the cost of content creation,” said Fang Han, CEO of Kunlun Tech, in an interview with Chinese media in June.

He said the company will continue to work on AI products to empower users to create entertainment content.

China man awaiting sex reassignment surgery sues hospital over forced electroshock therapy

https://www.scmp.com/news/people-culture/gender-diversity/article/3275106/china-man-awaiting-sex-reassignment-surgery-sues-hospital-over-forced-electroshock-therapy?utm_source=rss_feed

A man in China who is awaiting gender reassignment surgery has sued a hospital for 80,000 yuan (US$11,000) claiming he was forced to undergo electroshock therapy.

Linger, 27, is a live-streamer from Hebei province in northern China, who posts videos of himself online wearing make-up and women’s clothing.

He told Hongxing News that, although his biological sex is male, he has preferred the company of girls since childhood and, upon starting university, realised he identified as a woman.

Linger began taking oestrogen, one of the main female sex hormones. His facial hair became sparse, his voice softened, and he grew his hair long.

He has been saving money he made from live-streaming for years, hoping to undergo gender reassignment surgery.

Studies show that around four million people in China identify as transgender.

However, changing gender on official documents such as identity cards is only permitted after undergoing reassignment surgery.

The country’s strict standards require parental consent, and the procedure costs at least 150,000 yuan (US$21,000).

But Linger’s parents could not accept their son’s transition, which led to many arguments.

Traditional Chinese beliefs hold that the body is a gift from one’s parents and that gender is innate and should not be changed. Otherwise, it is considered disrespectful to parents.

Linger told Hongxing News that, to avoid further family conflict, he agreed to go to Jiulongshan Hospital in 2022 at his parents’ request.

He knew it was a psychiatric hospital, but he did not think he had a mental illness.

However, he did not expect the doctor to diagnose him with an “anxiety disorder” and “ego-dystonic sexual orientation”, which is a mental disorder that describes a conflict between a person’s desired and actual sexual orientation.

He was then stripped of his phone by medical staff and forcibly hospitalised for 97 days, according to Hongxing News.

“After being admitted to the hospital, I was tied to the bed with ropes, and many doctors controlled my body and administered electroshock therapy for days,” Linger said.

This year, Linger filed a lawsuit against the hospital for human rights violations, seeking 80,000 yuan in compensation.

On August 13, the hospital stated during the trial that they had “done nothing wrong”.

They argued that the purpose of electroshock was to control the emotions of psychiatric patients and enhance their self-awareness.

In China, being transgender is not classified as a mental illness.

Pan Bailin, a plastic surgeon in Beijing, said that using electroconvulsive therapy to try and reverse gender identity was not scientific.

“Transgender people are not mentally ill. They can alleviate their gender anxiety through psychological counselling, hormone therapy and voice training,” Pan said.

The hospital claimed that Linger’s mother had signed a consent form.

Chinese law allows for the involuntary hospitalisation of patients with mental disorders in specific cases, such as when they have shown, or are at risk of, self-harm or endangering others.

Legal experts contend that if these criteria are unmet, forced hospitalisation is unjustified.

Linger’s case is still being heard in court.

Tesla reaps benefits as EU cuts planned tariffs on Chinese-made electric vehicles

https://www.scmp.com/news/china/diplomacy/article/3275210/tesla-reaps-benefits-eu-cuts-planned-tariffs-chinese-made-electric-vehicles?utm_source=rss_feed

Tesla is the big winner from a European Commission’s move to lower proposed tariff rates on Chinese-made electric vehicles.

On Tuesday, the European Union’s secretariat announced a revision to its provisional duties, with a top-end rate of 36.3 per cent for companies that include state-owned SAIC. This was lowered from the initial proposal of 37.4 per cent following consultations with car makers.

Tesla will pay the lowest rate of 9 per cent after Elon Musk’s company asked for a separate investigation into the level of subsidies it had received from the Chinese government.

It was not included in the sample of three Chinese companies on which the weighted average tariff was based.

The new rates still mark a hefty rise in tariff rates for most companies making EVs in China. The previous import duty stood at 10 per cent across the board.

EVs made by BYD, the world’s biggest-selling battery electric vehicle company, will face a tariff rate of 17 per cent rather than 17.4 per cent. For Geely-made EVs, the rate dropped from 20 per cent to 19.3 per cent.

Another 17 companies deemed to have cooperated with the EU’s probe will face a slightly higher rate of 21.3 per cent, up from 20.8 per cent, after the commission found errors in its initial calculations. Non-cooperating companies will pay the 36.3 per cent top rate.

The duties are the results of an anti-subsidy investigation that finished in June. It investigated more than 100 firms and found market-distorting subsidies across the entire EV supply chain in China.

Provisional tariffs were imposed last month, but the commission announced on Tuesday that it would not collect those duties before the more permanent rates are written into EU law. This must happen by October 30 at the latest and will take effect a day later.

The commission has also decided not to retroactively collect backdated tariffs, a move floated earlier this year.

It plans to offer reduced tariffs of 21.3 per cent – down from 37.4 per cent – to Chinese firms that launched EV joint ventures with EU companies such as BMW and Volkswagen since the initial probe was launched in September 2023

One of the vehicles receiving the lower duty will be the Cupra Tavascan, made by a joint venture between Volkswagen and Chinese company JAC Group.

The reduction in duties came after consultations with carmakers. In some cases, BYD, Geely and SAIC have been able to prove that certain things the commission had thought were subsidies were intercompany transactions.

In other cases there were technical mistakes found in the commission’s calculations, leading to minor tweaks in the tariff rate.

The definitive proposal will be voted on by the EU’s 27 member states in October, before being written into law for five years.

The proposal can only be reversed if a majority of capitals vote against the duties. In an indicative vote taken in July, only four countries voted against them.

The proposed tariff rates could still change, and car makers now have a period of 10 days to submit their views after being told of the plans on Tuesday.

The information has also been transmitted to EU member states and the Chinese government.

The European Commission has been locked in technical talks with Beijing and says it is still open to a deal.

“The EU is open to reaching an alternative solution on the position of the duties that would be effective and WTO [World Trade Organization] compatible. It would align with WTO rules and provide a solution to the problems we find,” a senior EU official said.

In other words: the ball is in Beijing’s court to come up with something that would have the same desired effect as the duties.

Behind the scenes, however, expectations of a deal are low, with EU officials pointing to China’s failure to even acknowledge there is a problem with subsidies.

China has disputed the findings of the EU’s probe, which has become a persistent drag on relations.

Last week the Chinese government lodged a complaint at the WTO, requesting consultations with the EU in what is a standard precursor to a dispute settlement case.

The EU will accept the request for consultations, sources said, and it is expected that the previous talks on EVs will continue in this stream in Geneva.

It has also launched what are broadly seen as retaliatory probes against EU-made brandy and pork products.

China’s courier industry warned over spy threat amid national security drive

https://www.scmp.com/news/china/politics/article/3275196/chinas-courier-industry-warned-over-spy-threat-amid-national-security-drive?utm_source=rss_feed

China’s top intelligence agency has taken aim at the courier industry and called for the public to guard against sending and receiving goods that threaten national security.

The Ministry of State Security’s latest warning comes as Beijing steps up its national security drive amid China’s rivalry with the US and its allies.

In a post on its WeChat account published on Tuesday, it said “the courier industry is closely connected not only to economic and social development and people’s daily lives but also to national security”.

According to the ministry’s post, foreign spy agencies have increasingly used delivery channels to steal secrets in recent years.

It said a Chinese citizen had been sentenced to 10 years in prison for leaking confidential and classified-level documents to foreign spy agencies through a courier service.

The suspect, identified only by the surname Zhang, was discovered after another Chinese resident reported that “classified publications” had been leaked, according to the post.

The ministry’s investigation found that Zhang, who it said had been recruited by foreign spies, had taken advantage of his position, allowing him to access and subscribe to China’s classified publications and send that information to foreign spies through courier services.

The post did not specify which country recruited Zhang, what classified publications it referred to, what harm it had caused, or when and where these events took place.

In another example, it said “a foreign organisation, under the guise of a research collaboration” has sent an unspecified chemical powder to a Chinese research institution, which turned out to be a catalyst for harmful chemical experiments.

It would “pose significant risks to the key research projects at the institute if it had been successfully delivered,” according to the post. It did not name the country sending the powder nor when and where it occurred.

The ministry said further examples included some “foreign organisations and individuals” sending species such as red-eared slider turtles, snapping turtles and American bullfrogs into China through the mail, posing “serious risks to our country’s biological and ecological safety, and could even endanger people’s lives and property”.

National security has become a top priority in China, with Communist Party leaders highlighting the drive at the twice-a-decade third plenum in July.

The Ministry of State Security’s warning also comes amid intensifying strategic competition between China and the US-led West in all domains, including technology and trade.

Last year, Beijing expanded both the definition of spying and the investigative powers of national security agencies under its counter-espionage law.

And China’s newly amended law on guarding state secrets that came into effect in May – the biggest revision in more than a decade – stipulates that it is illegal to send state secrets out of the country without permission from the relevant authorities. Anyone guilty of a serious breach faces criminal charges.

China seeks to heat up economy with US$28 billion nuclear power investment in 11 reactors

https://www.scmp.com/economy/china-economy/article/3275184/china-seeks-heat-economy-us28-billion-nuclear-power-investment-11-reactors?utm_source=rss_feed

China accelerated its nuclear power expansion with the approval of five new projects totalling over an estimated 200 billion yuan (US$28 billion) as Beijing stepped up efforts to boost investment in the sector and accomplish its annual economic growth target.

The approval for the projects in the coastal provinces of Shandong, Zhejiang, Jiangsu, Guangdong and the Guangxi Zhuang autonomous region was given during an executive meeting of China’s cabinet, the State Council, chaired by Premier Li Qiang on Monday.

The five projects involve 11 reactors, which represents the largest number of units approved since 2019.

“The uptick in industry sentiment, coupled with the increase in new nuclear power project approvals, is poised to drive growth for equipment suppliers and operators,” Guolian Securities analyst He Zhaohui said on Tuesday.

The approvals followed a call from China’s top leaders during the third plenum in July to be “firmly committed to accomplishing the goals for this year’s economic and social development”.

China National Nuclear Power received approval for three reactors, the company said in a statement on Monday, while the State Power Investment Corporation said it had received approval for two units.

CGN Power, the listed unit of the state-owned China General Nuclear Power Corporation, said in a Hong Kong stock exchange filing on Tuesday that it had received approvals for six reactors across three sites.

China has been steadily expanding its nuclear power investment over the past five years, with the finished value of investment climbing year by year since 2019, when investment stood at 33.5 billion yuan (US$4.7 billion), according to data from the National Energy Administration.

In the first half of the year, such investment stood at more than 40 billion yuan, representing 13.5 per cent growth year-on-year, according to Guolian Securities.

In 2023, the finished value of investment in nuclear power plants grew by 20 per cent from 2022 to more than 90 billion yuan, marking a five-year peak.

China operates 55 nuclear power plants, ranking third globally, and with 36 units under construction, it possesses the world’s largest nuclear power construction pipeline, according to the state-backed Xinhua News Agency.

According to the World Nuclear Association, about 60 power reactors are being constructed in 16 counties, with about 50 per cent in China.

On Monday, TerraPower – whose chairman is Microsoft co-founder Bill Gates – broke ground on a nuclear power plant in the US state of Wyoming.

China’s latest approval followed the release of new green-transition guidelines by the State Council last week, which vowed to accelerate the construction of green energy bases, including nuclear power plants in coastal areas, wind and solar farms in the northwest and thermal power plants in the southwest.

China has set a goal of reaching peak carbon dioxide emissions before 2030, and achieving carbon neutrality by 2060.

It aims to raise the share of non-fossil consumption to 25 per cent by 2030, and gradually reduce coal consumption in the next five years.

China’s nuclear power units generated 433.3 billion kilowatt-hours of electricity in 2023, contributing around 5 per cent of the nation’s power supply and displacing over 123.3 million tonnes of coal, according to the China Nuclear Energy Association.

China woman weighing 50kg left infertile after having liposuction to lose ‘little belly’

https://www.scmp.com/news/people-culture/trending-china/article/3275104/china-woman-weighing-50kg-left-infertile-after-having-liposuction-lose-little-belly?utm_source=rss_feed

A young woman in China has been rendered permanently infertile after having liposuction on her stomach because she thought she was too fat.

The 25-year-old called Mei, who weighed 50 kilos and was 1.65 metres tall, underwent the procedure at Shulan Hangzhou Hospital in Zhejiang province, eastern China, the Hangzhou City Express reported on August 14.

Zhong Chao, a doctor from the reproductive medicine department at the hospital, said Mei told her she had tried other ways to lose the fat on her stomach but failed.

Zhong said she opted for liposuction, because she felt she was “too much of a perfectionist to allow a little fat on her belly”.

Her menstruation stopped following the surgery and Zhong discovered that Mei’s ovaries had atrophied and she had lost her fertility permanently.

Zhong said even though obesity was often related to infertility, low body weight in women could be the cause as well.

A sharp decrease in body fat leads to a decrease in level of oestrogen, the female sex hormone, and causes ovarian dysfunction, she said.

Chen Shihong, a doctor at Peking University Shenzhen Hospital, said a “little belly” is normal for women, as the fat protects the uterus and ovaries.

Chen criticised internet challenges such as ant waist, chopsticks legs, palm face – which promote a skinny body as beautiful regardless of the individual, and create appearance anxiety.

“It is more important to stay healthy than skinny,” said one person on Weibo.

“Exercise is your best friend if you want to lose weight,” another said.

“There is no short cut to losing weight,” commented a third.

This is not the first time a cosmetic surgery procedure carried out in China has had very serious negative consequences.

In 2021, a 33-year-old online influencer with 130,000 followers on Weibo died after stomach liposuction and breast augmentation surgery.

She was diagnosed with necrotising fasciitis, a bacterial infection that quickly destroyed her tissue and caused multiple organ failure.

The clinic that performed the surgery in eastern China’s Zhejiang province reportedly removed more fat from her than the 2,000ml upper limit set out by the state health authority.

A doctor was later suspended for malpractice and the clinic was closed.

In March, a 43-year-old mother of three died from cardiac arrest, after having fat removed from her stomach and waist in eastern China’s Anhui province.

The woman’s husband claimed the clinic’s staff persuaded his wife to have the surgery while he was on a business trip, knowing that he was against it.

They clinic’s staff did not have cosmetic surgery qualifications They also ignored an ECG monitor alert when complications arose during surgery.

Chinese cartoon campaign warns village clans against hindering Communist Party

https://www.scmp.com/news/china/politics/article/3275135/chinese-cartoon-campaign-warns-village-clans-against-hindering-communist-party?utm_source=rss_feed

Beijing is urging family clans in rural areas not to stand in the way of Communist Party and government policies being introduced as part of a campaign to promote internal party discipline.

In a cartoon circulating on government websites and social media since last week, a family elder demands that his nephew, a village official, block the construction of a telecommunications tower.

It goes on to say the tower was demolished by the villagers, “causing more than 200,000 yuan [US$28,000] damage” and the village official was expelled from the party.

The illustrated narrative, which was published on August 12 on the WeChat account of the Organisation Department of the eastern province of Jiangsu’s party committee, has been reproduced on the social media accounts and web pages of courts and anti-corruption agencies in different regions of China.

The publication described the cartoon as a “case study”, but did not say whether it was based on a real case – and if so, when or where the incident took place.

The text accompanying the cartoon warned that “in recent years, a small number of people with bad intentions have organised themselves and used the solidarity and cooperation within clans to confront the party and the government”.

In many rural areas of China where people value family heritage, clans – often made up of male relatives with the same surname – hold considerable influence.

Under China’s village committee organisation law, villagers can elect officials to form a committee to run their village and decide some village affairs by voting.

The government post last week said the clans had “formed a ‘state within a state’, which has had extremely bad social effects”. It called on party members and cadres to “consciously resist” such behaviour.

The cartoon is part of a massive public education campaign launched by Beijing regarding new party discipline rules announced at the end of last year.

The new rules, which came into force this year, broadened the scope of violations and punishments, such as banning party members from reading the party’s bad history. They also reaffirmed the party’s rules against clan influence, including the disqualification of party members who “organise and use clan influence to confront the party and the government”.

In some areas with strong clan influence – such as Guangdong and Fujian provinces in southern China – and in some areas with ethnic minority populations, village administrators are often from the same surname. Their defence of clan interests has challenged the introduction of party policies in the villages.

Over the years, Beijing has repeatedly called for family clans and gangsters who have taken root in the countryside to be punished, demanding that local governments prevent them from “undermining the primary-level political system”.

Kamala Harris could be the next Richard Nixon on US-China relations

https://www.scmp.com/opinion/world-opinion/article/3275132/kamala-harris-could-be-next-richard-nixon-us-china-relations?utm_source=rss_feed

Fifty years ago this month, Richard Nixon resigned as US president. With all eyes on November’s presidential election, the anniversary provides an occasion to consider the inherent contradictions of American political leadership.

Nixon’s abuses of executive power contrasted sharply with his foreign policy achievements. As an avowed anti-communist, he surprised the world by going to China in 1972. Nixon’s triangulation strategy effectively isolated the former Soviet Union, ultimately helping to bring the Cold War to an end.

Could such a breakthrough happen again? The looming superpower clash between the United States and China certainly begs for another strategic breakthrough. The two countries are on a collision course with no realistic off-ramp. It wouldn’t take much – an incident in the Taiwan Strait or the South China Sea, or an escalation of US containment policy – to trigger conflict escalation.

Former president Donald Trump, should he win in November, seems unlikely to resolve the US-China conflict. As he did in his first administration, he intends to lead with tariffs. Trump has proposed raising US tariffs on Chinese imports to between 50 per cent and 60 per cent after having raised them during his first administration from 3 per cent in early 2018 to 19 per cent in 2020.

As was the case with Trump’s earlier tariffs, this effort would backfire. For starters, tariffs are a tax on Chinese exporters that raise prices for US consumers. According to recent research by the Peterson Institute of International Economics, the additional costs from Trump’s new proposed tariffs would be at least 1.8 per cent of GDP, nearly five times those caused by his first round.

Second, tariffs on China do not reduce the overall trade deficit for a savings-short US economy. Instead, they shift the deficit to other, largely higher-cost, foreign producers. That is what happened after Trump’s initial tariffs: the bilateral imbalance with China shrank, but increased deficits with other countries more than offset it.

US Vice-President Kamala Harris, by contrast, appears to have no intention to up the ante on tariffs. But she does seem inclined to endorse President Joe Biden’s “small yard, high fence” doctrine. That would include a continuation of Biden’s tariffs (largely carried over from Trump) and targeted sanctions, along with de-risking and friendshoring strategies.

While less aggressive than Trump’s potential mega tariffs, the anti-China approach that Harris inherits from Biden would hardly de-escalate tensions.

The two candidates seem likely to hold different views on Taiwan. In a June interview with Bloomberg Businessweek, Trump emphasised a more transactional approach to defending Taiwan. He argued that, like an insurance premium, “Taiwan should pay us for defence”. Trump has previously taken the same stance – that wealthy countries should pay for US protection – with Europe, Nato and even Japan.

I am not in favour of a mercenary approach to US foreign policy. But I must concede that Trump’s tactics could well shift the burden of deterring Beijing from the US to Taiwan. This could be a positive development, to the extent that it reduces direct tensions between the two superpowers. But it would still be far from a strategic recipe for conflict resolution.

While neither Trump nor Harris are predisposed toward ending the US-China conflict, there is a potential twist that hints at a Nixonian breakthrough with China: Harris’ selection of Minnesota Governor Tim Walz as her running mate.

Like former US president George H.W. Bush, who served as chief of the US Liaison Office in Beijing in 1974-75, Walz has a special connection with China. He first travelled there as a teacher in 1989, during the tragic events in Tiananmen Square, which shaped his views on what he later described as China’s “unthinkable” tendencies. Walz even chose to get married on June 4, 1994, the fifth anniversary of the Tiananmen tragedy.

But, in addition to his concerns about human rights and Chinese military aggression in the South China Sea, Walz has also stressed the importance of a sustainable US-China relationship, arguing that dialogue is essential and “absolutely has to happen”. In other words, he would bring a pragmatism that is sorely missing from the US stance towards China.

Vice-presidents rarely shape major policy initiatives. But, in this case, Walz’s views on China raise the chances of a Nixon-like initiative by a Harris administration. Harris and Walz share concerns about Chinese human rights and South China Sea tensions. But they also recognise the need to face the urgent imperative for a course correction in a troubled Sino-American relationship.

This nuanced perspective would allow them to walk and chew gum at the same time. It would encourage them to prioritise re-engagement over digging in their heels at every point of friction in a conflicted relationship. That is what freed Nixon to put aside his ideological biases and engage China in 1972. Walz might well help tip the scales for Harris’ China policy.

Many of today’s geostrategic circumstances are eerily similar to the Cold War climate half a century ago. Who better than a thoughtful new US president to mitigate a dangerous dynamic with another superpower and shift the relationship from conflict escalation to conflict resolution?

Under the watch of Trump and Biden, America’s China problem went from bad to worse. If Harris prevails in November, that need not be the case.

Joe Biden touts policies for US middle class, says Chinese economic dominance not assured

https://www.scmp.com/news/china/article/3275155/joe-biden-touts-policies-us-middle-class-says-chinese-economic-dominance-not-assured?utm_source=rss_feed

US President Joe Biden touted his economic and foreign policies on the opening night of the Democratic National Convention on Monday in a speech that symbolised the passing of his authority to Vice-President Kamala Harris and sought to draw a sharp contrast with her Republican opponent, Donald Trump.

Focusing on a need to create greater opportunities for the American middle class through policies that support unionised manufacturing jobs and spur growth “from the bottom up and the middle out”, Biden’s message in Chicago aligned closely with themes that Harris previewed last week in her economic agenda.

In the only mention about China in a speech that ran nearly 50 minutes, Biden cited doubt over the inevitability of the country surpassing the US economically as proof of the efficacy of his economic policies.

“When I came to office, the conventional wisdom was that China would inevitably surpass the United States,” he said. “No one’s saying that now.”

The Biden administration has championed legislation to address the loss of American manufacturing jobs shed over decades, an erosion that came to a head in the 2016 US election and helped propel Trump to victory.

That history has made China a driving factor in many of Biden’s initiatives, even when the country is not mentioned.

A significant number of those jobs vanished in a handful of “swing states” – including Michigan, Pennsylvania and Wisconsin – widely expected to determine the outcome of the November 5 election, as they had in the past two presidential races.

Trump in the 2016 campaign made China’s trade surplus with the US and accusations that Beijing deliberately sought to hollow out America’s manufacturing base a central part of his messaging.

The rhetoric translated into a trade war that Trump formally launched in 2018 plus a turn away from multilateral trade deals, a stance Biden adopted after winning the White House in 2020, and which his US Trade Representative Katherine Tai calls a “worker-centric” approach to trade negotiations and policy.

Keeping with a populist, pro-union message, Biden reiterated a claim that nearly 800,000 new manufacturing jobs have been created in America since he took office.

According to PolitiFact, a non-partisan fact-checking website, the number is largely accurate, but should take into account that “the first three-quarters of those job gains” represented a return to levels immediately before the Covid-19 pandemic.

“With every new job, with every new factory, pride and hope is being brought back to communities throughout the country that were left behind,” he told the cheering crowd. “Now you’re back once again, proving that Wall Street didn’t build America. The middle class built America and … unions built the middle class.”

That stance has kept Biden’s administration reluctant to negotiate into the Comprehensive and Progressive Trans-Pacific Partnership. Instead, the president has pushed his Indo-Pacific Economic Framework to bolster economic engagement with China’s neighbours, an initiative that has drawn criticism for its lack of any tariff reduction measures.

Aiming to bring manufacturing back stateside, Biden in 2022 signed the Inflation Reduction Act, a wide-ranging law that invests in domestic industries while also promoting America’s transition to clean energy. The law dovetails with Washington’s efforts to remove Chinese companies from the supply chain for these technologies.

Biden also in 2022 signed into law the Chips and Science Act, earmarking US$53 billion in subsidies for US-based chip makers and prohibiting beneficiaries from significantly expanding semiconductor manufacturing capacity in “foreign countries of concern”, including China, for 10 years.

“How can we be the strongest nation in the world without leading the world in science and technology. After years of importing 90 per cent of our semiconductor chips from abroad … private companies from around the world are now investing literally tens of billions of dollars to build new chip factories right here in America,” Biden said in his speech.

Acting on national-security apprehensions as well as anticipation that Beijing would try to export its way out of a systemic economic slowdown, Biden has signed executive orders restricting the sale of cutting-edge semiconductors and other advanced technology to China and slapping a 100 per cent tariff on Chinese EVs.

Taken together, these efforts amount to “a real experiment in trying to slow China’s access to emerging American technologies”, said Dennis Wilder of the Initiative for US-China Dialogue on Global Issues at Georgetown University.

“Too many American technologies have been given away to China … and there is a need to get our companies thinking far more about the security of their intellectual property and create government laws that really restrict some of these areas,” said Wilder, who served as the National Security Council’s director for China in the George W. Bush administration.

However, Wilder noted, the 100 per cent tariff on Chinese EVs and other efforts to completely block Chinese products “is beyond what’s called for”.

“There is obviously the question of dumping … but there’s also, on the other side, the fact that an excellent EV is being made and we can move much faster on climate issues by giving many more Americans the ability to buy them,” he said.

“I’m unsympathetic to huge American auto companies who have had every opportunity to get in this game, and if they want to get in this game, I think joint ventures are a great idea,” Wilder added.

While Biden spent much of his time drawing distinctions with Trump on abortion, racial animosity and other domestic cultural issues, on the foreign policy front, he suggested that their differences on foreign policy brought Nato back from the brink of extinction.

“When Trump left office, Europe and Nato were in tatters. [Trump’s] ‘America First’ doctrine changed our whole image in the world,” Biden told the crowd in Chicago, adding that he spent some 190 hours during the early part of his administration working with European leaders to strengthen the defence bloc.

Biden also accused the former president of kowtowing to Russian President Vladimir Putin, and said Harris would stick with his hardline stance against the Kremlin’s war on neighbouring Ukraine, now in its third year.

The president has been one of the world’s strongest proponents for the defence of Ukraine, and worked with US lawmakers to get an aid package worth some US$60 billion dollars for the country passed earlier this year.

“Just as no commander-in-chief should ever bow down to dictators the way Trump bows down to Putin, I never have and I promise you Kamala Harris will never do it.”

Chinese craft beer maker RichKat taps into Hong Kong’s frothy market

https://www.scmp.com/business/article/3275116/chinese-craft-beer-maker-richkat-taps-hong-kongs-frothy-market?utm_source=rss_feed

RichKat Craft Brewing, a Shenzhen-based beer brand, has opened two pubs in Hong Kong, a move that could benefit the company as the beverage is tipped to become one of the fastest-growing alcoholic drink segments in the city, according to one forecast.

The outlets are located on Pottinger Street in Central and on Hollywood Road in Sheung Wan, areas that are known to attract locals and expatriates after office hours. The outlets, which opened in July and early this month, currently only offer canned beer.

“The diverse market environment and customer base can provide us with cutting-edge feedback, which in turn drives us to develop products and brand strategies with a more international perspective,” a RichKat spokeswoman said.

Consumers in Hong Kong have a deeper understanding of craft beer and are more attuned to quality, she added.

Hong Kong’s retail industry is witnessing an upheaval as some of the city’s mainstay concepts and brands have had to adjust their strategy, as residents increasingly cross the border to mainland China to shop and dine where the prices are lower and splurge on overseas travel.

Outback Steakhouse, an American restaurant chain serving Australian-style food that has been operating in the city since 1999, recently closed nine of its 19 branches, citing poor market conditions.

On the other hand, mainland brands have become more aggressive in their expansion in Hong Kong. New leases by mainland Chinese brands surged 215 per cent year on year in the first seven months of the year, according to JLL.

RichKat’s expansion can prove to be a winning move if Euromonitor International’s forecast proves accurate. The city’s beer drinking segment is tipped to grow by 15.7 per cent between 2023 and 2026 to 183 million litres, second only to the 18.5 per cent increase predicted for the wine segment, according to the market research provider. The sparkling wine and champagne category is tipped to grow by 12. 9 per cent and whiskey by 12 per cent.

On the mainland, beer consumption is seen growing 1.1 per cent to 43.3 billion litres in the same period, Euromonitor said.

“Craft beer continues to gain popularity in Hong Kong as local consumers increasingly seek more refined and varied flavours of beer,” said Clifton Chiu, senior analyst at Euromonitor.

Hong Kong’s global events, designed to attract tourists, are also “set to play a major role in supporting beer sales as the local bar and drinking scene is revitalised”, Chiu said.

RichKat, which was founded in 2017 and currently operates more than 150 outlets on the mainland, appears to be getting a favourable response from Hongkongers.

“The products are good when considering the cheaper price,” said Porter Li, a university student who has been frequenting the Sheung Wan outlet since its opening.

A can of beer is available for as low as HK$28 (US$3.6) during happy hours, according to a menu posted on the online restaurant guide OpenRice. A special deal for a 12-inch pizza and two drinks is also available for HK$99 before 8pm.

“RichKat is positioned as a brand for mass consumption and we strive to offer high-quality products at affordable prices,” the spokeswoman said. A decline in rental costs opened up an opportunity to enter the market, she added.

High-street rents in Hong Kong have fallen by about 30 per cent from a peak in 2019, according to CBRE. S&P Global Rating, meanwhile, expects retail landlords to sign new leases at up to 5 per cent lower than current ones.

“The retailing sector in Hong Kong is worse than expected,” said Alicia Garcia-Herrero, chief economist for Asia-Pacific at French investment bank Natixis. Foreign brands that brave the market could be doing so as “a branding strategy” to showcase their products, she added.

Hong Kong Island site for 500 flats, once Chinese developer Agile’s, put up for tender

https://www.scmp.com/business/article/3275092/hong-kong-island-site-500-flats-once-chinese-developer-agiles-put-tender?utm_source=rss_feed

The receiver of a nearly 450,000 sq ft residential site in Hong Kong Island’s Eastern district, once owned by distressed Chinese developer Agile Group Holdings, put the property up for sale by tender on Monday.

Agile paid a total of about HK$3.3 billion (US$423 million) for the two sites that make up the tender, at 992-998 King’s Road and 2-16 Mount Parker Road in Quarry Bay, in 2017 and 2022, according to Savills, the sole agent for the sale.

The site area is around 50,000 sq ft and supports a maximum gross floor area of around 448,000 sq ft. The deadline for expression of interest is noon on October 2.

“Upon completion, the project is expected to provide over 500 residential units and more than 190 car parking spaces,” said Tommy Chan, senior director of investment of Savills. With scarce new residential supply in the urban areas of Hong Kong Island, coupled with the site’s proximity to the Quarry Bay MTR station and the Taikoo Place office complex, the development is expected to appeal to both owner-occupiers and investors, he added.

Agile held 100 per cent interest in the project as of December 31, according to its 2023 annual report.

“The group has two high-quality property projects,” the report said, listing the King’s Road and Mount Parker Road sites, plus a project on Eastbourne Road in Kowloon Tong.

Last year, Agile paid HK$966 million for Dragon Court, a 44-unit building at 6 Eastbourne Road, in a compulsory en-bloc sale for the redevelopment of the building. The company has an 82 per cent interest in the project, according to its annual report.

The Quarry Bay tender comes a week after the chairman of Agile, Chen Zhuolin, sold a flat in a neighbouring project to Dragon Court, Hamburg Villa at 8-10 Eastbourne Road, for less than half the price paid six years ago.

The 1,239 sq ft, three-bedroom flat fetched HK$14.3 million, compared with HK$31 million in 2018 when the city’s property market was still soaring, according to an agent with Centaline, which closed the deal.

The price per square foot of HK$11,525 was about 15 per cent lower than the prevailing market rate.

The property was acquired in 2018 by Joint Smart Development, whose director is Chen, according to the Companies Registry.

Agile has acquired one-third of the 33 units in Hamburg Villa, and the developer had expressed a desire to acquire the entire building. In 2018, Agile bought five flats in Hamburg Villa for HK$73 million. As of last December, the developer owned a 23 per cent interest in the project.

Now, with the developer selling a flat in Hamburg Villa at a steep loss, market observers speculate that Agile may suspend the acquisition of the remaining units in the building. In May, the cash-strapped Guangzhou-based developer failed to pay interest on a US$483 million bond maturing in 2025.

Agile said in a filing to the Hong Kong stock exchange that it “will not be able to fulfil all payment obligations under its offshore debts” in light of the liquidity pressure.

Luk Sin-fong, Agile’s former vice-chairwoman and Chen’s wife, had taken out a loan for an undisclosed amount, using as collateral 39 South Bay Road, a multi-storey luxury residential building in Repulse Bay, a source said in February.

Luk had been shopping for a HK$500 million facility, the source said.

Agile also took out a two-year, HK$894 million loan in June 2022 at an annual interest rate of 20 per cent as part of a plan to trim a debt load that amounted to 59.49 billion yuan (US$8.3 billion) at the time.

It was seeking to refinance its HK$894 million facility, for which the residential sites on Mount Parker Road and King’s Road serve as collateral, the sources said.

Agile’s total borrowings, including bank loans, senior notes and mainland corporate bonds, had fallen to 53.55 billion yuan at the end of December 2023. The company reported a loss of 13.8 billion yuan in 2023.

As China’s pet lovers turn to domestic brands for value, investors sniff opportunity

https://www.scmp.com/business/companies/article/3274967/chinas-pet-lovers-turn-domestic-brands-value-investors-sniff-opportunity?utm_source=rss_feed

Amid a nationwide spending decline, China’s pet owners are looking for higher value for money when it comes to food and other products for their furry companions. This shift, according to analysts, gives domestic companies a chance to fetch themselves a larger share of the country’s 279.3 billion yuan (US$39 billion) pet market.

Investors who are betting big on this trend have identified manufacturers as likely winners. For instance, US private equity giant Advent International and Chinese investment firm Boyu Capital announced on August 12 that they had acquired a stake in Seek Pet Food, a Shandong-based manufacturer of mid-range and high-end pet food. The transaction was reportedly valued at over 1 billion yuan, making it the largest deal in the sector in China this year.

In May, China’s Legend Capital took a stake in functional pet food maker RedDog. And Last February, L Catterton, a US consumer-focused investment firm, injected capital into Partner Pet, a Chinese brand known for its premium freeze-dried pet food.

“China’s pet food sector is still fragmented, with the top 10 companies’ market share only accounting for 31 per cent of the total, and local companies grew faster than imported brands in recent years, leaving large upside for those local brands,” said Nina Jiang, China consumer analyst at UBS. Substitution of domestic brands for imported ones will accelerate as consumers seek value and awareness of local brands grows, she said.

The pet food market was worth 69 billion yuan in 2023.

An increase in deal activity in pet-related industries reflects investors’ enthusiasm for the sector. In the first half of the year, the industry saw 16 investments, surpassing the 13 deals recorded throughout the entirety of 2023. Pet food was the most active segment with five deals, three of which involved domestic manufacturers, according to data compiled by CSC Financial.

“Investors are turning their attention to companies that are moving upstream on the value chain,” said Derek Deng, head of Bain & Co’s Greater China consumer products practice. “The majority of brands still rely on [contract manufacturers], but given how quickly trends can emerge and fade, choosing the right [brand to invest in] can be challenging. Manufacturers, in contrast, are more stable.”

As China is grappling with an ageing population and historically low birth rates not seen since 1949, consumers, especially older generations, are attaching greater emotional value to their pets and dedicating more time and money to caring for them.

The pet market expanded by 14.3 per cent between 2019 and 2022, making it one of the best-performing consumer categories. The segment is estimated to grow another 2.6 times to 756.5 billion yuan by 2030, according to UBS.

“There is a unique human aspect to the pet sector’s growth,” said Jason Wang, director of private equity at KKR, which backs Gambol, China’s largest pet food manufacturer. “Two big baby booms occurred in the 1960s and late 1980s, and what we have been observing is greater demand for pet companionship from these demographics, who also have greater ability to provide their pets with higher quality food and attention.”

However, years of stop-start economic activity, a persistent property crisis and rising unemployment are dampening consumer confidence. Pet owners are not immune. Euromonitor data shows that growth in the pet-food market has slowed to the mid-single digits after the Covid-19 pandemic, compared with its peak of 45 per cent in 2016.

Moreover, per capita spending on pets in mainland China has stagnated at around US$5 per pet per year, markedly lower than in other regions: US$170 in the US, US$103 in Hong Kong, and US$109 in Australia.

“During times of economic prosperity, the pet industry has seen substantial growth, especially due to trends like an ageing population,” said Richard Lin, chief consumer analyst at SPDB International. “However, in the current economic environment, the investment logic that once applied may no longer hold true.”

In addition to macroeconomic headwinds dampening spending, China’s pet food companies are also struggling to build their brands and gain loyalty among Chinese consumers, who switch brands more frequently than their peers in more mature markets, according to Bain.

“The entry barrier is low, and competition remains intense due to the fragmented market,” said UBS’s Jiang. “Currently, most domestic companies are focused on gaining market share rather than profitability. Establishing brand awareness for local brands may take a significant amount of time.”

And for investors keen on building the next industry champion and profiting from mergers and acquisitions, the market may simply not be ready.

“When it comes to acquisitions, consolidation typically only occurs when there are two or three strong companies in the market. Among Chinese firms, few have the strength to acquire smaller companies, and many smaller brands lack the brand power to make such acquisitions worthwhile,” said SPDB International’s Lin.

The prevalence of e-commerce in China, with its low barriers to entry, will support “numerous innovative pet food brands”, according to David Chen, managing director at Advent International.

“We expect the pet food brand landscape in China to remain fragmented compared with the US and Europe, partially due to China’s much higher penetration of the e-commerce channel for pet food sales, which offers democratized shelf space that enables a wide array of brands to emerge and thrive,” the company said.

Additional reporting by Mark Gong and Eric Jiang

China vows to make key social security fund ‘bigger, stronger’ amid ageing population

https://www.scmp.com/economy/economic-indicators/article/3275034/china-vows-make-key-social-security-fund-bigger-stronger-amid-ageing-population?utm_source=rss_feed

Authorities have pledged to make China’s 2.88 trillion yuan (US$402 billion) social security fund “bigger and stronger”, allowing it to serve as a safety net for a rapidly-ageing population.

The pension fund would also increase investment in the domestic capital market, especially strategic sectors, National Council for Social Security Fund party secretary and vice chair Ding Xuedong said.

“[The National Social Security Fund is] a strategic reserve fund for social security needs during the peak period of population ageing, and is the ballast stone of the country’s social security system,” Ding said, in an article published by the Study Times, the Central Party School’s official newspaper, on Monday.

Introduced in 2000 in response to an ageing population, the fund has supported China’s welfare system, including pensions and work injuries, as well as medical, unemployment and maternity insurance.

As of 2023, China had nearly 297 million people aged 60 or above, accounting for 21.1 per cent of the national population.

And China has, according to Ding, entered a moderate ageing stage, and it is expected to enter a severe ageing stage around 2035 that is set to last for a long time.

“It is unprecedentedly urgent and arduous to make the strategic reserve fund bigger and stronger,” Ding added.

The general public in China – especially the younger generation – have long-standing concerns over the sustainability of the state pension system.

In 2019, a report from the Chinese Academy of Social Sciences warned that the main state pension fund - the urban worker pension fund which is the backbone of the country’s state pension system - would run out of money by 2035 amid China’s shrinking workforce.

Ding added that the National Social Security Fund would seize the opportunity for fund accumulation, promoting the establishment of a stable capital injection mechanism and expanding funding sources.

According to the fund’s annual report published in September, its total assets were 2.88 trillion yuan at the end of 2022, with 90 per cent allocated to domestic investments and 10 per cent in overseas markets.

It had generated more than 7 per cent of average annual gains since its inception, Ding said.

The fund would also expand the scale of its investment operations and optimise the scope and tools of investment, while strengthening risk monitoring and early warning mechanisms to “maintain the safety bottom line”, he said.

“[We must] strive for better investment returns through sound investment operations … and continuously consolidate the wealth foundation to actively respond to the ageing population,” Ding added.

Ding also vowed to improve the disclosure mechanism for pension fund investment and social supervision to ensure the openness and transparency of operations and to stabilise the public expectation for a secure pension system.

Meanwhile, the fund would also step up investment in the domestic capital market and increase long-term equity investment in strategic and basic areas related to the lifeline of the national economy, as well as technological innovation.

As one of China’s biggest state-run investors, the fund must help the stable and healthy development of the capital market, and support the construction of a modern industrial system and the development of the real economy, Ding said.

“We will actively smooth the ‘technology-industry-finance’ cycle and strive to achieve a ‘win-win’ of serving technological innovation and expanding the scale of pension funds,” he added.

Remembering Deng Xiaoping: why ‘thought emancipation’ points the way on China’s future

https://www.scmp.com/economy/china-economy/article/3275079/remembering-deng-xiaoping-why-thought-emancipation-points-way-chinas-future?utm_source=rss_feed

As China prepares to commemorate this month the 120th anniversary of the birth of Deng Xiaoping, the “general architect” of the nation’s reforms and opening up, it is important to revisit one of his key legacies: China’s “thought emancipation”.

While the term may sound like just another piece of communist jargon, it is anything but. In essence, it is about freeing the minds and ideas of the Chinese people from Maoist dogmas by removing ideological taboos, thus unleashing people’s creativity and entrepreneurship for the country’s development.

In the short span of a few years, the way the Chinese people view their lives, country and the world has changed from ideological to pragmatic, making it possible for economic liberalisation to take place.

One key aspect of the movement is the disregard for orthodox “political correctness”. Many economic practices that are taken for granted these days once seemed to be insurmountable obstacles.

For instance, today nobody would bat an eyelid at a private enterprise hiring hundreds of employees. But back in the early 1980s, whether China should allow private capital to hire labour at scale was a hugely controversial issue. Private employment of labour in for-profit production was once regarded as a textbook example of exploitation. But once the atmosphere turned pro-development, that taboo quickly dissipated.

In another example, when China just started embracing market-oriented reforms, the command economy, or planned economy, was still regarded as a hallmark of socialist China. Throughout the 1980s, China tried to position “commodity economy” or “market economy” as a supplement to a planned economy.

It was only after Deng’s famous Southern Tour in early 1992 that China began to accept how socialism can also embrace a market economy. As a result, a purely planned economy was no longer regarded as politically correct.

Nowadays, in search of the “Chinese way of modernisation”, the country is in need of Deng’s wisdom and courage to remove ideological roadblocks for economic progress.

Some Chinese scholars, for example, have deemed Beijing’s insistence in dividing the country’s economy into “public ownership” and “private ownership” unnecessary.

Despite the government’s repeated promise that private businesses will be treated equally, its distinction between public and private continues to convey that public ownership is more politically correct than private ownership, a message that the country’s capitalists have not missed.

A constant hostility towards private “capital”, a highly ideological term in China, has deterred private entrepreneurs from making new investments. This hurts the country, as the private economy now accounts for the bulk of China’s economic output and employment.

In addition to economic reforms, Deng’s “thought emancipation” has also created a tolerant and open social environment, as well as a respect for common sense.

As the state intervened less in social life, more Chinese people gained greater freedom in choosing their way of life. It became acceptable to wear jeans, once regarded as a symbol of a decadent capitalist lifestyle. Listening to folk music from Taiwan or even rock ‘n’ roll from the United States, once deemed a counterrevolutionary activity during the Cultural Revolution that warranted prison time, became an entirely personal choice.

Chinese society nowadays has become far more diverse and vibrant compared with four decades ago. But there is a worrying trend of the heavy burden of “political correctness” crawling back into daily life.

A talk-show production company was shut down because of one bad joke. A journalist was suspended for criticising a teenage Olympics gold medallist. Businesses have to pay close attention to their logos and posters to ensure there are no “Japanese elements” that might invite nationalist backlash. Most business leaders are laying low to avoid unwanted attention.

History has proved that Deng made the right decision to free China from ideological shackles. Today, the country has a new chance to make history, and it would be a mistake to let unnecessary ideological doctrines limit its development.

Some of China’s best cultural ambassadors are foreign vloggers

https://www.scmp.com/opinion/china-opinion/article/3274706/some-chinas-best-cultural-ambassadors-are-foreign-vloggers?utm_source=rss_feed

I never expected that foreigners could become the strongest “spokespeople” for China. On YouTube, I’ve come across video headlines such as “CHINA is NOT what we expected”, “I Was Wrong About China...So I Came Back” and “The Media Doesn’t Want You To See THIS in China” made by foreign vloggers - some of whom have many followers.

A China travel rush is under way, thanks in part to China rolling out a visa-free 24-hour transit policy for people from other countries around the world at all of its accessible exit-entry ports. Forty-one such ports - encompassing 19 provinces, autonomous regions and municipalities - have implemented a 72-hour or 144-hour visa-free transit period for foreign nationals from 54 countries.

According to data released by the National Immigration Administration, more than 14.6 million foreigners entered China in the first half of 2024, a year-on-year increase of 152.7 per cent. Among them, 8.5 million people entered China without a visa, accounting for 52 per cent - a year-on-year increase of 190.1 per cent. With the support of the visa-free transit policy, it is more convenient for foreign tourists to explore China.

Foreign vloggers have made videos about their experiences in China and posted them on social media. They are amazed by China’s high-speed trains, skyscrapers, mobile payment systems, electric cars, mega airports, delicious and varied food, friendly people, unique culture and history and how people can walk at night without fearing being attacked.

I was impressed that a couple from Britain and Italy, on their YouTube channel, said that people in China completely blew them away because they “never expected anyone could be so lovely, so friendly, so helpful, so welcoming and so patient”, and “so nice”. It was the first time I had seen someone put so many kind adjectives together to describe Chinese people.

In a video posted to Douyin, a father from Britain said he took his son to see a dentist in China. He was shocked by how efficient and affordable it was to go to the hospital. He said the whole process, from the professional consultation and X-ray to his son getting the filling, took just a few hours and cost them 287 yuan (US$40).

Some vloggers even went to Xinjiang Uygur and Tibet autonomous regions, places often described as being full of problems. These two regions are targeted by Western countries and media over allegations of human rights violations and even genocide. If you go by some rumours, foreigners are not allowed to enter. However, videos shot in Xinjiang and Tibet, uploaded by foreign vloggers, throw water on these narratives. They have shown residents living peaceful lives.

These videos are just the tip of the iceberg. To be honest, the China travel rush has shocked not only foreigners who had no idea of China, but some Chinese people too. Perhaps some of us have taken the positive aspects of our country for granted, as we live with them. But look at this phenomenon from another perspective. Can you think of any better way to tell good China stories to the international community?

Negative reports about China have been prevalent in Western media for quite some time. Reports often criticise China’s political system, human rights issues and treatment of ethnic minorities, as well as exaggerate the nature of its economic and environmental problems. There’s also selective reporting on China’s social problems, such as the wealth gap and food safety.

Meanwhile, China’s efforts and achievements in social governance and improving people’s livelihoods are largely ignored. The lack of comprehensive, objective and in-depth perspectives in China coverage has resulted in one-sidedness, which likely shapes a negative image of China and reinforces stereotypes in Western countries. To change this, we must help the world see the real China, by showing its culture, history, development and achievements through honest and compelling stories.

In Confucianism, a central school of Chinese philosophy, the principle of the “golden mean” advocates for the pursuit of impartiality, harmony and balance. This idea permeates into daily life; people tend to be implicit in their expressions to avoid direct conflicts or hurting the feelings of others.

Confucianism also advocates self-discipline and propriety, which also might lead to an implicit culture. Examining oneself every day, a concept from The Analects of Confucius, encourages people to repeatedly reflect on their conduct to identify their shortcomings and improve themselves.

Influenced by this traditional culture, when facing criticism or stigma, what many Chinese do first, maybe unconsciously, is check if we’ve done anything wrong. If we have, we will immediately adjust. To paraphrase a popular idiom, “the wise man knows he knows nothing, and the fool thinks he knows all”.

We believe in “winning people over by virtue”. China is just doing its best to develop and create a better life for its people. It is always ready to welcome friends from around the world with open arms, letting them see the country as it is. So it’s heartening to see that foreign visitors are sharing their positive experiences, debunking misconceptions and showcasing China’s warmth, progress and diversity. Their firsthand accounts are invaluable in offering a balanced and genuine portrayal of China to the global audience. No doubt, these are perfect China stories.

As Chinese students forgo US university degrees, the impact on brainpower transcends borders

https://www.scmp.com/economy/global-economy/article/3275037/chinese-students-forgo-us-university-degrees-impact-brainpower-transcends-borders?utm_source=rss_feed

With an eye on studying chemistry abroad, Rafael Wang set his sights on master’s programmes in the United States. So, it came as an element of surprise when he learned that his university had been placed on a US sanctions list in 2020, and he had to react accordingly.

Now 24, Wang recalled how Washington’s decision to target the Nanjing University of Science and Technology threw a wrench in his plans.

“The US is still attractive to me,” Wang said, pointing to its prowess in science and technology. “But the problem was that even if a university admitted me, it was impossible to get a study visa. So, I decided to study in Europe.”

In 2022, the native of Xian, Shaanxi province, settled on Chalmers University of Technology in Sweden.

Wang’s case illustrates how some Chinese students in recent years have been shying away from degree programmes in the US – traditionally a top destination in their desire to study abroad. Some fear getting caught in the intensified geopolitical crossfire between the two countries, others worry about being denied a visa, and some say they are deterred by the possibility of violence.

Meanwhile, universities in China have continued to improve, rising up the global rankings and taking some of the shine off an overseas degree.

The drop in enrolment among Chinese at US universities has subsequently taken a toll on foreign talent in the country while bolstering brainpower in China at a time when it faces a shortage of skilled technicians in critically important industries.

According to the 2023 Open Doors report by the New York-based non-profit Institute of International Education, Chinese students in the United States numbered 289,526 during the 2022-23 academic year. That marked a year-on-year decline of 0.2 per cent and a 22 per cent drop from the peak of 372,532 Chinese students in the United States during the 2019-20 academic year.

The report also noted how some US schools had lost 89 per cent of their Chinese enrolment since 2017.

Nonetheless, despite the decline, US State Department figures for last year showed that students from China still comprised the largest group of international students in the US, according to the federally funded Voice of America broadcaster.

Deborah Seligsohn, an assistant political science professor at Villanova University in the US state of Pennsylvania, pointed to a rise in anti-Asian sentiment in the US during the pandemic, and she noted how some Chinese students have expressed concerns about the possibility of being interrogated upon entering the US, or accused of being a foreign agent for Beijing.

In January, China accused US authorities of harassing inbound Chinese students and said “tens” of Chinese nationals were being denied entry every month. China-US ties have soured since 2018 over trade, tech transfers and a host of geopolitical differences.

“That’s why parents worry about the state of US-China relations, because that is what’s affecting the behaviour of people at the border,” Seligsohn said.

Compounding concerns, US deputy secretary of state Kurt Campbell said in June that his country needed to recruit more international students in science, technology, engineering and mathematics, just not from China.

The US issued visas to 115,000 Chinese students in the six months from October after approving nearly 300,000 over the previous full fiscal year.

Li Huiyan, 22, a 2023 University of California, Berkeley, summer-session student from Hubei province, found that “living in the US can feel unsafe”, while the cost of living in the US exceeds that in many other countries.

Higher education in the US costs each student an average of US$38,270 per year – including tuition, books and living expenses – the Education Data Initiative research organisation estimated in May. And the Organisation for Economic Cooperation and Development (OECD) says a US bachelor’s degree costs an average of US$8,200 more than in most of the OECD’s 38 member countries.

Undergraduates at public universities in China pay about US$2,000 to US$10,000 per year, according to estimates by the online student resource platform Keystone Education Group.

Now finishing her undergraduate studies at a university in Wuhan, Li weighed safety and costs against US academic “diversity”, fast degree completion times and programmes that are “practical and job-oriented” compared with China.

Other Chinese nationals have also lauded US campuses for their “diversity”, said Albert Ma, who graduated last year with a political economy degree from UC Berkeley. They could be heard discussing “how great it is to interact with people from all different backgrounds”, he recalled.

Su Di of Beijing wanted to pursue a master’s degree in gender studies and found that her ideal programme was in Chicago. But that was in 2020, when Chicago and other major US cities faced a rise in street violence following the murder of a black man in police custody.

She, too, went to Sweden.

“When I was about to apply, there was turmoil in Chicago – security was really bad at that time,” said Su, 26.

But the US still has not lost all of its glow. San Francisco State University film master’s student Lin Xinjiang pushed safety concerns aside 2.5 years ago to begin his studies because he equated the US with the top talent in cinema.

Late last month, he sat down in the campus library lounge to read an academic paper and said other people of Asian descent in the lounge were from South Korea or had been born in the US.

“America has the best film industry in the world, so that’s basically why I came to study here,” the 27-year-old said. His parents in Henan province cautioned him against going out at night, and he calls downtown San Francisco a “ghost town”. But the often foggy, tree-shrouded campus, he said, is “fine” in terms of safety.

Lin said he planned to spend a year looking for work in the US after getting his degree.

The decline in Chinese students will hurt US science and research by taking Chinese citizens out of the mix, said Rory Truex, an assistant professor with Princeton University’s Department of Politics.

“We know that Chinese students, especially PhD students, are increasingly feeling unwelcome in the United States,” Truex said. “This population is incredibly talented and important to the American scientific and research enterprise, but unfortunately they have been branded as potential threats.

“In my view, the current strategic competition between the United States and China is about human capital more than anything.”

China’s universities have improved over the past three to four years on higher average scores in teaching and research, the British Council’s cultural and educational agency said in an October study. Thirteen universities in the 2024 Times Higher Education World University Rankings were in China, up from seven in 2020.

“The value of a foreign degree has lost value,” Seligsohn said. “They can do better with a university degree from China.”

The return rate of Chinese students from abroad had already grown from 14 per cent in 2002 to more than 80 per cent by 2019, according to a York University study. And the state-run publication China Daily placed the 2021 return rate at 69 per cent.

Trouble finding jobs and retaining US visas has motivated many to return to China, according to the Washington-based Centre for Strategic & International Studies.

Faculty and staff members at San Francisco State University have noticed that Chinese-student enrolment has dropped since pre-pandemic 2019. A spokesman for the college confirmed that the figure had fallen from 446 students from China in the autumn of 2019 to only 112 last autumn.

The dance programme, for example, gets two or three per year – a consistent average over the years – but international enrolment is also down overall. The university’s Lam Family College of Business, which graduated 1,068 people last year, has seen a more obvious drop, said Jeff O’Toole, a student-engagement analyst for the college.

San Francisco’s reputation for safety and homelessness has put off Chinese parents, O’Toole said, and “of course there’s politics involved”. He found campus interactions to be richer when more Chinese were enrolled.

“I remember around 2015 or 2016 we had so many, and it’s kind of gone down,” he said. “I had tonnes of Chinese friends, and now I still have a couple, but it’s kind of tapering off.”