Mistral点评

• Honour reformer Deng Xiaoping by realising China’s revival, Xi Jinping urges nation
• Chinese scientists devise method to get water from the moon’s surface
• Mexican envoy to ‘good friend’ China talks trade and ‘bad news’ beef with US
• Philippine police raid Chinese-run scam centre, arrest Filipinos and 67 foreign nationals
• Beyond tech, the US-China AI race is a tussle over ethics
• PwC expecting six-month China ban over Evergrande audit
• China names healthcare, education, tech as likely venues for more foreign investment
• China warns US not to allow Dalai Lama’s ‘separatist activities’ or talks with officials
• China, Russia plot course for Arctic cooperation, shipping routes to counter West
• China confirms charges laid against Japanese citizen accused of spying
• China revenues drop for high-end hotel chains as business travel, consumer spending dip
• ‘What have you done?’ China champion skier Eileen Gu hits back at critics, cites 39 medals
• Robotaxi start-up WeRide delays US IPO days before Chinese approval expires
• Energy engineer leaves prominent US lab for Chinese university
• Guosen Securities plans to buy 53% of Vanho, heeding China’s call for brokers to combine
• Snubbed China shopper makes luxury shop staff count US$84,000 cash for 2 hours then leaves
• Harris’ VP pick Tim Walz rallies Democrats in punchy speech, sidesteps China questions
• PLA sends advanced landing craft for ‘high-intensity’ drills amid South China Sea tensions
• China, India among 35 countries added to Sri Lanka visa-free list to boost tourism
• [Sport] US charges Chinese dissident with allegedly spying for Beijing
• South China Sea: Filipinos ‘blocked’ from Scarborough Shoal amid concerns over fishing rights
• China space engineers kick ‘doomed’ satellite pair into life in lunar orbit
• US, China intensify battle for Pacific dominance in new ‘Great Game’
• One woman’s custody battle highlights the challenges facing same-sex couples in China
• Is China curbing rare earth production to raise prices as its global dominance wanes?
• China father makes children kneel on busy road in bid to force return of estranged wife
• China-Thailand joint military exercises have ‘all elements needed for a small-scale war’
• SK Group backs US$140 million fund to bring South Korean chip firms to China
• AIA first-half profit jumps 53% amid mainland Chinese insurance-buying spree in Hong Kong
• Tens of thousands of Hongkongers rush to buy tickets to shows by mainland China’s Olympians
• Paraguay open to China trade deals via Mercosur trade bloc despite Taiwan ties, Pena says
• As China celebrates Deng Xiaoping’s legacy, the country is again at a crossroads

Honour reformer Deng Xiaoping by realising China’s revival, Xi Jinping urges nation

https://www.scmp.com/news/china/politics/article/3275532/honour-reformer-deng-xiaoping-realising-chinas-revival-xi-jinping-urges-nation?utm_source=rss_feed

The best way to commemorate Communist Party patriarch Deng Xiaoping is to persevere to realise the mission of national rejuvenation, Chinese President Xi Jinping said on Thursday, the 120th anniversary of the late leader’s birth.

Paying tribute to Deng’s political legacy while also identifying with it, Xi called on the country to rally behind his own policies on establishing a modern economic system, promoting hi-tech self-reliance, and safeguarding national sovereignty and development interests.

“The enduring tribute to Comrade Deng Xiaoping is to continue pushing forward the cause of socialism with Chinese characteristics he initiated,” Xi told top government and party officials as well as Deng’s relatives and former staff at Beijing’s Great Hall of the People, according to state news agency Xinhua.

Xi delivered the address at a commemorative event held every decade around August 22 – a tradition that allows the party’s leaders to reconnect with its founding fathers and announce a path forward.

He used the event to offer a salute to the past and to acknowledge the political challenges of today.

Xi said Deng’s “one country, two systems” proposal – which defines Hong Kong and Macau’s relationship with the mainland – “opened up a new path to achieve the complete reunification” of China in a peaceful way.

The principle did so because it was centred on the country’s fundamental, overall and long-term interests, ensuring both autonomy and stability in the two special administrative regions.

“We must steadfastly implement the one country, two systems policy and promote Hong Kong and Macau’s integration into the national development framework,” Xi said, in a year that not only marks 40th anniversary of the Sino-British Joint Declaration, a key document over the handover of Hong Kong to China, but also the 25th anniversary of the return of Macau to China.

One country, two systems was also supposed to be a template for unification with Taiwan.

In his address, Xi restated Beijing’s unyielding position against Taiwanese independence, and presented himself as taking on the responsibility left by the party’s elders.

“Achieving national reunification is not merely an aspiration of past leaders like Mao Zedong and Deng Xiaoping, but a collective yearning of the Chinese people both home and abroad, and also an unstoppable historical trend.”

Beijing regards Taiwan as a part of China to be reunited by force if necessary. Most countries, including the United States, do not recognise Taiwan as an independent state, but Washington is against any move to take it by force and is committed to arming the island.

The enduring tribute to Comrade Deng Xiaoping is to continue pushing forward the cause of socialism with Chinese characteristics he initiated

Deng, who died in 1997 at the age of 92, is credited as the “architect” of China’s economic reform which transformed a poor, backward country into a global superpower.

He dismantled the constraints of a heavily regulated planned economy and pioneered a hybrid market economy that has propelled China onto the world stage.

He also reintroduced public examinations for university admissions and government jobs, laying the groundwork for the resurgence of education, science and technology in modern China.

But the anniversary comes as China grapples with unprecedented challenges, including economic sluggishness, rising unemployment and an intensified rivalry with the US.

With the country at a new crossroads, the leadership is drawing lessons from Deng but also searching for a path through the international tensions and economic headwinds.

“As we embark on this new journey in a new era, we must deeply study and apply Deng Xiaoping Theory to navigate the complexities of our time,” Xi said, directly connecting his policies to the foundational work done by Deng.

Xi has articulated clearer objectives with specific timelines, such as aiming for a “moderately developed” economy by 2035 and realising the rejuvenation of the Chinese nation by 2049.

Party discipline is central to that reform mission – “the party must have a core, and the party’s Central Committee must have authority”.

“Reforms should be bold in spirit but steady in pace, managing the relationship between reform, development, and stability, with stability being paramount. The key to handling China’s affairs lies in the party, which must focus on both reform and opening up, and on combating corruption,” he said.

Xi also reflected on Deng and China’s place in the global order.

For the first time, Xi applauded Deng as “a great internationalist who has made significant contributions to world peace and development”, remarks that tied China’s present global path to Deng’s strategy.

“China is a staunch force for world peace. We will advocate peace, development, cooperation, and win-win outcomes while pushing forward with initiatives to create a community of shared human destiny,” Xi said, reaffirming his long-held goal for China to become a peaceful global superpower on the international stage.

“[Deng] profoundly summed up the experience and lessons of the reform and opening up process, emphasising the need to concentrate on party building, strengthen ideological and political work and education on fine traditions, improve the party’s leadership level and governing ability, and ensure the stability of the red regime.”

Xie Maosong, a senior researcher at the National Institute of Strategic Studies at Tsinghua University, said the speech framed Deng as the staunch defender of China’s socialist path, a central legacy that Xi inherited and was upholding now.

“Just imagine if China were to follow the Soviet Union’s path and to fall apart. The country might be totally different now. Deng’s fundamental contribution to the party and his successors was leaving a united socialist China with the Communist Party playing an effective leadership,” Xie said.

Rana Mitter, ST Lee Chair in US-Asia Relations at Harvard Kennedy School, said not all of Deng’s approach was applicable today.

“Deng Xiaoping was a key figure in moving China from a command economy to market socialism. He worked with other key reformist figures, notably Zhao Ziyang and Hu Yaobang, and had to push back against economic conservatives such as Chen Yun,” Mitter said.

“His plans worked well during the period of high global economic growth. However, today China faces slower growth and a need to move towards a more open, tech-driven economy – the export-oriented manufacturing of Deng’s time can’t just be translated to the 2020s.”

Alfred Wu, an associate professor at the National University of Singapore, said there was a desire to return to the times of strong economic growth.

“All reforms are driven by necessity,” he said. “Now everyone is dissatisfied, as the economic downturn is quite evident, and China is facing a hostile environment amid rivalry with the US.”

Chinese scientists devise method to get water from the moon’s surface

https://www.scmp.com/news/china/science/article/3275521/chinese-scientists-devise-method-get-water-moons-surface?utm_source=rss_feed

Chinese scientists say they have come up with a method to extract water from the moon’s soil – a potentially vital step towards building a lunar research base.

The technique depends on extracting hydrogen and oxygen from the soil at extremely high temperatures, and was described on Thursday as “highly practical” by the Chinese Academy of Sciences (CAS).

The search for water has long been one of the top priorities for lunar exploration missions, but previous efforts had focused on the search for natural water reserves.

But researchers from the Ningbo Institute of Materials Technology and Engineering, the CAS Institute of Physics and other institutions came up with the new method after studying lunar rocks brought back to Earth by China’s Chang’e-5 probe in 2020.

The team found that some of the minerals in lunar soil – especially the oxide mineral ilmenite – store large amounts of hydrogen as a result of billions of years of exposure to the solar wind.

When heated, the hydrogen chemically reacts with iron oxides in the minerals to produce large amounts of water, as well as iron and ceramic glass.

Then, when the temperature passes 1,000 degrees Celsius (1,832 Fahrenheit), the lunar soil itself will start to melt, releasing the water in the form of a vapour.

The team said they had studied the lunar soil using techniques such as high-resolution electron microscopy and concluded that 1 gram of lunar soil would produce about 51 to 76 milligrams of water.

This means that a tonne of lunar soil could produce about 50 litres (13 gallons) – “basically enough for 50 people to drink in a day”, the academy said.

Based on these findings, the team proposed a method of heating the lunar soil until it melts by focusing sunlight through concave mirrors.

The researchers said that the iron produced as a by-product of this process could be used as a raw material for making electronic equipment on the moon, while the melted lunar soil could be used as a construction material for a base.

But they also warned that subsequent Chang’e lunar missions would have to carry out further feasibility checks to see if this technique can become a reality.

The academy said: “This method is highly practical and is expected to provide a design basis for the construction of future lunar research stations and space stations.”

The study was published on Thursday in The Innovation, an English-language, peer-reviewed academic journal founded by a group of young Chinese scientists in 2020, which has become one of the world’s top multidisciplinary publications.

The search for water on the moon has been a decades-long quest for lunar scientists, who now believe that ice may exist in its natural state at its south and north poles, as well as in areas that lie in perpetual shadow.

The samples brought back from Chang’e-5 have shown that some minerals in the lunar soil – including glass and pyroxene – contain small amounts of water.

A separate analysis of those samples – published in the journal Nature Astronomy last month – detected a hydrated mineral “enriched” with molecular water.

But the Chinese Academy of Sciences warned on Thursday that the water content of these minerals is very sparse, ranging from 0.0001 to 0.02 per cent, making it difficult to extract and use them.

A variety of missions in the next few years will continue the hunt for water on the moon, including Russia’s Luna 26 orbiter and China’s Chang’e-7 mission, which is scheduled to launch around 2026 and will land on the lunar south pole.

Meanwhile, Nasa’s efforts suffered a setback last month when the Viper lunar rover was cancelled on cost grounds, but the agency said it will continue the search by other means.

Beyond the immediate benefits to lunar missions, a recent article in the Bulletin of the Chinese Academy of Sciences said lunar water resources could one day be used as a fuel source for vehicles involved in deep space missions by breaking them down into oxygen and hydrogen.

The article, written by researchers from the Institute of Geology and Geophysics, added that the search could also help reveal key processes in the formation and evolution of the Earth and moon, and even the wider solar system.

Mexican envoy to ‘good friend’ China talks trade and ‘bad news’ beef with US

https://www.scmp.com/economy/economic-indicators/article/3275489/mexican-envoy-good-friend-china-talks-trade-and-bad-news-beef-us?utm_source=rss_feed

Tariffs imposed by the Mexican government serve to incentivise Chinese companies to invest and produce in Mexico – a “natural partner” for China to export its manufacturing capacity overseas, according to Mexico’s envoy to the country.

And Chinese companies investing in Mexico need not be worried about the rising wariness or even threats from the United States, as their legitimate rights are protected under Mexico’s legal framework, ambassador Jesús Seade told the South China Morning Post.

“Mexico needs diversification of its political, economic and commercial basket, and China is a key actor of that and a good friend for Mexico,” Seade said.

While it is crucial for Mexico to maintain a good relationship with the US, which has a huge influence – politically, economically and culturally – on Mexico, it is equally important to have a very good relationship with the rest of the world, he said.

The Latin American country has increasingly become a hot destination for Chinese companies venturing overseas in recent years, thanks to an ongoing restructuring of US-China trade and Washington’s nearshoring strategy.

Under the United States-Mexico-Canada Agreement (USMCA), a free-trade pact between the three countries that came into effect in 2020, products produced in Mexico that meet certain rules of origin can be exported to the US without tariffs.

That put Mexico at a big advantage, as products shipped directly from China faced much higher tariffs – many of which have been in place since the trade war initiated by former US president Donald Trump.

Last year, Mexico became the US’ biggest source of imports, ending China’s 17-year streak with that title.

But Seade, who was Mexico’s top trade negotiator for the USMCA, said tensions between China and the US are “bad news” for Mexico.

“Some people think it should be good news, because if the US is angry with China, they will buy from Mexico. That’s nonsense,” Seade said.

“The United States is our first business partner … China is our second business partner,” he explained. “We thrive when our two partners thrive. When our two partners disagree and introduce measures that do not help each other, the growth of the two partners suffers, and that is bad news for us.”

Trade between China and Mexico has been soaring of late. Annual growth in container shipping between China and Mexico increased by 34.8 per cent in 2023, compared with just a 3.5 per cent jump in 2022, according to shipping data platform Xeneta.

In the first seven months of this year, the total trade value between the two countries reached US$63.6 billion, up 12.4 per cent compared with the same period in 2023, according to data from China Customs.

But it started to rain on the parade in April, when Mexico imposed temporary tariffs between 5 and 50 per cent on the import of 544 products – including steel, textiles, footwear and electronics – from countries without free-trade pacts with Mexico. And China, given its larger trade volume with the country, has been most affected.

The tariff hikes were enacted not because of pressure from the US, but because the trade imbalance between Mexico and China “looks bad, politically”, Seade said.

China has maintained its position as Mexico’s second main supplier, with the value of products imported reaching US$114 billion in 2023, while the total value of Mexico’s exports to China was US$10.1 billion – creating a US$104 billion deficit in the bilateral trade relationship, according to data from Bank of Mexico.

“In relation to the United States, they would prefer us to work only with the United States, but we are clear we don’t want to do that,” Seade said. “On the contrary, we are eagerly working on attracting Chinese partnership and Chinese investment.

“It is just that we prefer Chinese companies to produce in Mexico, provide employment in Mexico and bring technology, rather than exporting the goods in a cold way that brings no other benefit than the goods themselves.”

Thus, tariffs can be seen as an “encouragement” for Chinese companies to invest and produce in Mexico, which would help rectify the outsized trade deficit, he added.

Still, the notion of balanced trade should be considered carefully, he said, as exported products from Mexico often contain Chinese parts.

“If we double our exports, we will probably double our imports from China. That has nothing to do with a trade imbalance,” he said, adding that while there are legitimate reasons behind that imbalance, “to the public, it looks bad. We need to address it.”

Increasing exports to China is the other way, Seade said. China is currently the third-biggest destination for Mexican exports, after the US and Canada, with products mainly comprising minerals and agricultural products.

“There are lots of further exports we want to make. We are negotiating with China very actively almost every day,” he said.

Exports to China of some Mexican products – such as avocados – lag behind those from Peru and Chile, which have free-trade agreements and can trade under zero tariffs with the Asian country.

Despite a surge in interest from Chinese companies, overall investment from China in Mexico is still just a fraction of what comes from countries such as the US. In 2023, China was not even among the top 10 investors in Mexico – though the number may be underestimated, as some Chinese companies have used their overseas subsidiaries to invest in Mexico to avoid being officially labelled a “Chinese investment”.

Among all foreign investment, Chinese investment in Mexico is particularly welcome, Seade said, because “China is the engine of growth, globally, and it’s such a fantastic manufacturer and also a source of technology”.

Mexico is a “natural partner” for Chinese investment, with its relatively young population, a long tradition of manufacturing, and a 3,145km (1,954-mile) border with the world’s biggest economy, he added.

“China needs big production bases around the world, and in particular, on the other side of the world. If you look at the world map, Mexico is at the centre of the rest of the world. So, it is an ideal location for Chinese investment.”

Currently, most Chinese plants in Mexico are located in the country’s northern states, where there has been a shortage of water and electricity. Thus, new investors are encouraged to discover the other states in the south, he added.

“We want Chinese companies to bring not only manufacturing and technology, but to actually partner up with Mexican institutions in creating that technology through research and development activities,” Seade said.

However, with the US having become increasingly wary of the closer engagement between China and Mexico, many Chinese manufacturers that have already set up plants in Mexico feel as though they are treading on thin ice.

So far, the loudest voice has come from Trump, the 2024 Republican nominee, who has repeatedly complained about Chinese firms building factories in Mexico and selling products to the US.

But ramping up rhetoric against China has long been a two-party game in the US, and just last month Democratic President Joe Biden seized on a chance to get tougher on trade by taking steps to prevent China from avoiding US tariffs on some imports routed through Mexico.

This came after US Treasury Secretary Janet Yellen visited Mexico in December to strengthen cooperation on security and financial issues, with the two sides agreeing to establish a mechanism to monitor and screen foreign investments in the country.

The mechanism is intended to prohibit companies from skirting tariffs by taking advantage of the USMCA, as there have been allegations of Chinese companies bringing inputs from China but presenting them as being of Mexican origin to qualify for the rules of origins, Seade said.

“We also don’t like bypassing the rules,” he said. “These are just questions of effectively applying the rules that already exist in Mexican law, including the USMCA, which is part of Mexican law.

“When investing in Mexico, you need to have certain standards of transparency.”

Chinese companies should not be worried, as long as they ensure strict compliance with the rules, as the monitoring mechanism can provide more legal certainty for their investment, he said.

“The law is there to protect all our companies, including those originally from China.”

Philippine police raid Chinese-run scam centre, arrest Filipinos and 67 foreign nationals

https://www.scmp.com/news/asia/southeast-asia/article/3275527/philippine-police-raid-chinese-run-scam-centre-arrest-filipinos-and-67-foreign-nationals?utm_source=rss_feed

Philippine police raided a Chinese-run scam centre in the capital Manila on Thursday, arresting dozens of Filipino and foreign workers who allegedly tricked people into investing in a “manipulated” trading platform.

Police said the centre was operating in the guise of a licensed online gaming company, which President Ferdinand Marcos Jnr banned last month over the industry’s links to scams, kidnapping, human trafficking and murder.

Among the 67 foreigners arrested during the predawn raid on an office tower in the metropolis were 58 Chinese nationals, plus people from Malaysia, Myanmar, Indonesia and Vietnam. There were also 32 Filipinos.

The owner and manager of the facility – both Chinese nationals – were among those arrested, police said in a statement.

Police said the centre was running a “cryptocurrency investment scam” and “love scam”, with employees posing as wealthy models who would “entice” victims to invest in a “manipulated” trading platform.

The Filipinos arrested told police they were forced to work as scammers, the statement said, without specifying what would happen to them if they refused.

Some employees worked as models who were made to “dress in a seductive manner” and engage in “lascivious conduct” to help lure prospective victims, the statement added.

Marcos Jnr issued the ban on online gambling operators following public outcry over allegations that a local mayor was involved in a huge scam centre north of Manila.

Alice Leal Guo, the mayor of Bamban municipality, has been on the run after she was accused of being a Chinese citizen who fraudulently obtained Filipino citizenship that enabled her to run for office.

She left the country last month, immigration officials said this week, prompting a Marcos Jnr promise to go after those who “aided in her flight”, vowing “heads will roll”.

Authorities believe there could be several hundred illegal online gambling entities – as well as many of the more than 40 licensed operators – that are running scam centres under the noses of public officials.

Beyond tech, the US-China AI race is a tussle over ethics

https://www.scmp.com/opinion/china-opinion/article/3275130/beyond-tech-us-china-ai-race-tussle-over-ethics?utm_source=rss_feed

Artificial intelligence (AI) is reshaping our industries, economies, technologies and global power dynamics. The United States and China are leading contenders in the race to dominate the rapidly advancing field of AI. But what sets these AI giants apart?

With its history of innovation and booming tech industry, the US has long been at the helm of AI development and investment. China, however, has worked on closing the gap through ambitious, state-driven initiatives. Over the years, both countries have seen their AI involvement change in the technological, medical and military fields – these changes may yet shape the US-China relationship.

The US has solidified its AI leadership by providing broad access to research resources, including through the National AI Research Resource, and investing in workforce development to build an AI-ready workforce. Examples include a pilot programme by the energy department and National Science Foundation to train more than 500 new AI researchers by 2025.

America’s plans underline its focus on the need for a skilled workforce to progress in science, the economy and national security.

China has also made remarkable strides in its AI research, surpassing the US in several key areas. According to Georgetown University’s Center for Security and Emerging Technology, China leads globally in the volume of AI research papers, with the Chinese Academy of Sciences at the forefront. While the quality of Chinese research supposedly lagged, Chinese institutions now rank highest in highly cited research.

China’s AI strategy heavily emphasises computer vision, a field that accounts for 32 per cent of global AI research and grew by 121 per cent between 2017 and 2022. This aligns with China’s strategic AI priorities, which include autonomous vehicles, manufacturing and surveillance. The US, however, maintains an edge in machine learning models, led by tech giants such as Google and Microsoft.

The intensifying AI competition between the US and China will shape global technology standards, economic policies and security frameworks, making continued investment in AI research crucial for both nations.

AI also holds great promise – and challenges – in the rapid redefinition of healthcare. While early AI systems like MYCIN struggled to integrate with clinical practice, today’s tools, powered by machine learning algorithms and big data, promise to improve diagnostics, treatment planning and patient care.

The role of AI in healthcare is growing in the US. With company healthcare plans expected to cost 9 per cent more next year, partly due to inflation, the industry is turning to AI to constrain expenses. Accenture estimates that 40 per cent of the working hours spent by healthcare providers can be supported or augmented by AI, improving efficiency. To date, the US Food and Drug Administration has approved at least 950 AI-enabled medical devices.

Advances continue, such as Google’s medical large language model, called Med-PaLM 2, which boasts an accuracy rate of 85 per cent when answering medical questions.

China also has ambitions in medical AI. Its strategy is to support commercialisation with concerted efforts to leverage its vast data repositories. By restricting access to its domestic data sets while using global data, China gains a significant competitive edge.

Given China’s goal of becoming a world AI leader by 2030, its 2030 health tech ambitions and determination to solve problems like misdiagnoses and a doctor shortage, the country is likely to set health standards worldwide.

In military and defence, AI is also a revolutionising force. Both the US and China invest heavily in their intelligent and autonomous systems. An estimated 38 per cent of public AI contracts awarded by the US military focus on autonomous vehicles, particularly aerial systems; for the Chinese military, it’s 35 per cent.

Both nations are developing advanced drones, from micro drones for surveillance to larger unmanned aerial vehicles (UAVs) for combat support, like the MQ-8C Fire Scout.

As far as intelligence, surveillance and reconnaissance is concerned, AI-driven systems remain in the spotlight on both sides.

The US and China are invested in geospatial analysis, with contracts awarded to AI-enabled platforms that can process satellite data in real time, instrumental in improving situational awareness. Both countries are also improving the sensing capabilities of unmanned systems. As the US works on outfitting drones like the MQ-9 Reaper with advanced sensors, China is working on the same for its UAVs.

That both the US and China are focused on integrating AI within their military functions – in autonomous systems, intelligence capabilities and predictive logistics – highlights the transformative potential of AI in warfare. This US-China military AI race is likely to shape military strategy and global power dynamics.

But the AI race is not just about technology. It is also about ethics and the tussle could have far-reaching consequences.

The US, for instance, has taken a central role in the research and development of ethical AI at the Organisation for Economic Cooperation and Development’s AI Policy Observatory. Meanwhile, China, in rapidly advancing its AI capabilities, has often prioritised efficiency and scale, raising questions over privacy, surveillance and potential AI misuse. China’s approach to AI ethics is more state-directed, with a greater focus on societal and national objectives.

As these two superpowers shape the future of AI, the ethical frameworks they develop will influence global standards and norms. Their competition will not only determine tech leadership but also define the ethical boundaries of AI in the coming decades.

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PwC expecting six-month China ban over Evergrande audit

https://www.theguardian.com/business/article/2024/aug/22/pwc-expecting-six-month-china-ban-over-evergrande-audit

The auditor PwC China has reportedly told clients that it expects to receive a six-month ban from Chinese authorities, and potentially a large fine, as a punishment for its role in auditing the collapsed property developer Evergrande.

PwC expects to be banned from conducting regulated activities in China, such as signing off on financial results, for six months starting in September, the Financial Times reported.

In March, Beijing’s securities regulator said that Evergrande, the world’s most indebted property developer before it collapsed in January, had inflated its revenues by almost $80bn (£61.6bn) in 2019 and 2020. Evergrande was ordered to pay a $580m fine for the alleged fraud. Its founder, Hui Ka Yan, was detained by the authorities in September and ordered to pay a $6.5m fine.

Evergrande’s downfall led to scrutiny of PwC China, which had audited the property developer’s accounts for 14 years until 2023.

The FT cited an unnamed former partner at PwC, which has more than 20,000 employees in mainland China, as saying: “The current partners are braced for impact.”

PwC China is the most prominient of the “big four ” accounting firms, a term that includes Deloitte, KMPG and EY, operating in China. In 2022, it generated nearly 8bn yuan in revenues, according to the Chinese Institute of Certified Public Accountants.

However, in recent months, amid heightened scrutiny of PwC China’s links to Evergrande, the auditor has been shedding clients. This week, its biggest mainland China-listed client, Bank of China, said it planned to switch to EY. China Life Insurance, China Telecom and PICC have also dropped PwC as a client, according to Reuters.

The regulatory action on the horizon for PwC China is expected to eclipse the punishment received last year by Deloitte, which paid a $31m fine and was suspended for three months in relation to its audit of China Huarong Asset Management.

State-owned companies in China are generally banned from hiring auditors within three years of an auditor receiving a significant regulatory punishment. In February last year it was reported that Beijing had instructed state-owned companies to phase out contracts with the big four accounting firms, as authorities tried to address security concerns and curb the influence of western-linked auditors.

PwC China said: “Given this is an ongoing regulatory matter, it would not be appropriate to comment.”

China names healthcare, education, tech as likely venues for more foreign investment

https://www.scmp.com/economy/china-economy/article/3275500/china-names-healthcare-education-tech-likely-venues-more-foreign-investment?utm_source=rss_feed

China has promised to widen market access in sectors like healthcare, education and hi-tech, part of a broader effort from the world’s second-largest economy to woo back overseas and private investment and help stabilise the country’s economic growth.

A new version of the negative list – a document detailing sectors closed to foreign and private participation, last updated in 2021- was approved during an executive meeting of the State Council on Monday, but no details have yet been published.

The council, China's cabinet, also issued a 10-point guideline on optimising national market access on Wednesday, naming it a “key pillar” of the country’s socialist market economy.

“Market access for both domestic and foreign investment should be better aligned, areas opened to foreign investors should be accessible by domestic investors, and thresholds for domestic investors should also apply to foreign investors as long as they do not violate international agreements,” the document read.

“There should be an orderly opening up of service industries not linked to national security or social stability, which would offer higher quality of service when in market competition.”

The guideline “is a response to calls from corporates and wider society,” said Guo Liyan, vice-president of the Academy of Macroeconomic Research at the National Development and Reform Commission, China’s top economic planner. “[It] emphasises policies must be implemented in an effective manner,” she was quoted by state news agency Xinhua as saying.

The council named “education, health and sports” as qualifying industries “closely tied to people’s livelihoods”, and said access in similar areas like elder care, childcare and disability aid would also be loosened.

“New industries” were also mentioned in the document, specifically deep-sea technology, aerospace, aviation, new energy, artificial intelligence, trusted computing, information security, smart rail and modern agriculture. “Pioneering tech and innovations” and making “digital productions more available” were also emphasised.

Fields related to “national security, lifeline of the national economy, key industries, strategic resources, and major public interests” would be managed in a way that takes social and economic impact into consideration, the council said.

The new set of guidelines comes as Beijing ramps up its efforts to boost confidence in its business environment, as sentiments have flagged in the wake of a historic decline in foreign investment and slowing growth in gross domestic product and consumption.

Figures from the Ministry of Commerce show the country’s foreign direct investment dropped 29.1 per cent year-on-year to 498.9 billion yuan (US$69 billion) in the first half of 2024.

China’s gross domestic product grew 4.7 per cent in the second quarter compared to a year earlier – falling short of the annual target of “around 5 per cent” – after recording 5.3 per cent growth in the first quarter.

Over the past year, Beijing has repeatedly pledged to provide more market entry points for overseas and private investors, including a complete removal of barriers on participation in the manufacturing sector.

Last month, the council announced it would be changing the rules for the entry into certain industries by foreign entities in six cities, a pilot programme that allowed or expanded access to entertainment, travel agencies and designated non-profit organisations.

Foreign chambers of commerce, however, have stated they are still waiting for concrete action to match the rhetoric, regularly calling for a full and rapid opening of the country’s markets.

China warns US not to allow Dalai Lama’s ‘separatist activities’ or talks with officials

https://www.scmp.com/news/china/diplomacy/article/3275506/china-warns-us-not-allow-dalai-lamas-separatist-activities-or-talks-officials?utm_source=rss_feed

China warned the US not to allow the Dalai Lama to engage in “separatist activities” while visiting the country and made “solemn protests” to Washington after senior American officials met the exiled Tibetan spiritual leader in New York on Wednesday.

“China firmly opposes any country allowing the Dalai Lama to visit under any pretext, and firmly opposes any government officials of any country meeting with the Dalai Lama in any form,” said Chinese foreign ministry spokeswoman Mao Ning at a regular press briefing on Thursday.

“[We] have made solemn protests to the US. The appointment of a so-called special coordinator of Tibetan issues constitutes interference in [China’s] internal affairs,” she said, adding that Beijing does not recognise the coordinator position.

Mao urged the US to abide by its commitments on Tibet-related issues and respect China’s core interests and major concerns.

“Do not allow the Dalai Lama to engage in political separatist activities in the US, and do not have any form of contact with him,” she added.

China’s protest came a day after senior US officials met the 89-year-old spiritual leader of Tibetan Buddhism in New York on Wednesday.

White House human rights director Kelly Razzouk and Uzra Zeya, the US undersecretary of state for human rights and special coordinator for Tibetan issues, travelled to New York to meet the Dalai Lama, according to a statement by the US Department of State.

The meeting “reaffirmed the US commitment to advancing the human rights of Tibetans”, the statement said.

The Dalai Lama fled to India in 1959 after a failed uprising against Chinese rule in Tibet.

He has been in the United States since June, when he travelled to New York to seek medical treatment for his knees. It is the first time he has visited the US since 2017.

A bipartisan US congressional delegation met him in June at his residence in India’s Dharamsala. The delegation included Republican congressman Michael McCaul and former US House speaker Nancy Pelosi, a Democrat. They also met officials from the Tibetan government-in-exile, which is not officially recognised by any state or government.

Last month, Beijing also expressed strong opposition to Washington after US President Joe Biden signed the Resolve Tibet Act, which urges Beijing to resume direct dialogue with the Dalai Lama to resolve differences and calls for a negotiated agreement on Tibet.

Beijing considers the Dalai Lama a separatist and opposes contact with him by foreign government officials. It has not held talks with representatives of the Dalai Lama since 2010.

China, Russia plot course for Arctic cooperation, shipping routes to counter West

https://www.scmp.com/news/china/diplomacy/article/3275490/china-russia-plot-course-arctic-cooperation-shipping-routes-counter-west?utm_source=rss_feed

China and Russia have edged closer to a deal on shipping routes in the Arctic, with both countries looking to expand economic cooperation to counter Western pressure.

In Moscow on Wednesday, Chinese Premier Li Qiang and his Russian counterpart Mikhail Mishustin signed a joint communique agreeing to develop shipping routes in the Arctic under a consensus reached in May in Beijing between the presidents of the two countries.

It was part of a bigger pledge that their nations would consolidate traditional partnerships in oil and gas production while developing cooperation in emerging sectors such as science and technology and the digital economy.

The communique stressed that “consolidating China-Russia relations is a strategic choice made by both sides based on the broad common fundamental interests of the two countries and their peoples, and is not affected by changes in the international situation”.

“Both sides resolutely defend their legitimate rights and interests and oppose any attempt to obstruct the normal development of bilateral relations, interfere in the internal affairs of the two countries, and restrict the economic, technological and international space of the two countries.”

In the communique, both sides also pledged support for their mutual sovereignty. While Russia said it opposed any form of independence for Taiwan, Beijing said it supported Russia’s territorial integrity.

Li is visiting Russia for the annual meeting between the two heads of government before travelling to Belarus. He was also received by Russian President Vladimir Putin on Wednesday.

The meeting came as both China and Russia seek to make their economies more resilient in the face of Western pressure over Beijing’s growing international influence and Russia’s invasion of Ukraine.

Russia has increasingly looked to China to help develop an Arctic sea route that could cut its shipping time to Asia by almost half, as the sanctions-hit economy continues to rely heavily on its Asian trade partners.

Beijing has maintained close trade ties with Moscow during the war, with several Chinese companies being sanctioned by the US and Europe for allegedly transferring dual-use goods that have strengthened Russia’s defence base.

Both sides condemned “unilateral” sanctions, and vowed to expand mutual use of their own currencies in trade, which stood at 95 per cent of transactions. The two countries would also push for institutional reform of the Bretton Woods system, aiming to further reduce the dominance of the US dollar, the document said.

Amid Western sanctions that have largely hit Russian gas supplies to Europe, Moscow has also looked to accelerate the construction of the controversial Power of Siberia 2 natural gas pipeline, which would cross Mongolia between China and Russia. Progress has reportedly slowed due to disagreements over pricing. Mongolia’s recent removal of the project from its 2028 development plan has also cast further uncertainty about the pipeline.

Without mentioning the pipeline, Beijing and Moscow said in the joint communique that they would work to implement key cooperation projects and tasks under the China-Mongolia-Russia Economic Corridor.

The two also agreed to continue to engage in “constructive dialogue” about allowing Chinese cargo ships through the lower Tumen River, a key waterway between China, Russia and North Korea that would give Beijing access to the Sea of Japan, or East Sea.

Russia and North Korea were believed to be hesitant about opening the waterway for Beijing, worrying that it could further expand its influence in the region. Relations between Moscow and Pyongyang have grown closer after Pyongyang allegedly provided weapons for Russia’s war in Ukraine.

Beijing is thought to be wary about being drawn into a trilateral axis with Russia and North Korea as it remains engaged with Western countries, which view alliances between the three nations as potential threats.

On Tuesday, The New York Times reported that US President Joe Biden had ordered US forces to prepare for possible coordinated nuclear confrontations with Russia, China and North Korea over their nuclear capabilities. In response, Beijing criticised Washington for being the world’s “biggest creator of nuclear threats”.

Mishustin and Li also signed a protocol for the Chinese Ministry of Science and Technology and the Russian Joint Institute for Nuclear Research to jointly fund cooperative research projects.

While meeting with Putin, Li said China would work with Russia to develop more cooperation opportunities in the fields of science and technology.

“China is willing to work with Russia … to pay more attention to using scientific and technological innovation and industrial innovation to drive cooperation, and constantly cultivate new economic growth points,” Li said.

China confirms charges laid against Japanese citizen accused of spying

https://www.scmp.com/news/china/diplomacy/article/3275504/china-confirms-charges-laid-against-japanese-citizen-accused-spying?utm_source=rss_feed

Chinese prosecutors have charged a Japanese citizen on suspicion of espionage, China’s foreign ministry said on Thursday, adding that the rights of the people involved in the case would be protected.

The individual was charged recently in line with the law, ministry spokeswoman Mao Ning said when asked about the indictment of a Japanese employee of Astellas Pharma.

Ties between China and Japan have grown tense in recent years as they contend with issues from territorial claims to Tokyo’s decision to release treated water from the crippled Fukushima nuclear plant into the sea.

Arrests of Japanese citizens in China have fuelled those tensions.

The detention of the Astellas employee in China last year has cast a chilling effect on business, some Japanese officials have said, contributing to a drop in foreign investment and an exodus of Japanese expatriates.

The Japanese pharmaceutical company said on Wednesday that one of its Japanese employees detained since March 2023 on suspicion of spying had been indicted by Chinese authorities, without naming the individual.

Japan’s foreign ministry said a man in his 50s detained in Beijing last year was charged in mid-August, also without identifying the person.

“China is a country with the rule of law, that investigates and deals with lawbreaking and illegal activities in accordance with the law,” Mao said.

“At the same time [China] safeguards the legitimate rights and interests of the people involved, and facilitates the duties of Japanese consular officials stationed in China.”

China revenues drop for high-end hotel chains as business travel, consumer spending dip

https://www.scmp.com/economy/china-economy/article/3275481/china-revenues-drop-high-end-hotel-chains-business-travel-consumer-spending-dip?utm_source=rss_feed

Softening demand for business travel, fiercer competition and a scale-down in consumer spending have all had a hand in lower prices for the China operations of several of the world’s largest hotel chains, a trend the companies have confirmed in their quarterly results reports and earnings calls.

Six international chains operating in China during the second quarter all registered a year-on-year decrease in revenue per available room (RevPAR) and average daily rate – two important metrics for hotel profitability – with China the only major market reporting negative trends for both figures.

Among the chains, Wyndham saw the largest decline in RevPAR with a drop of 17 per cent, while IHG saw a 7 per cent decline. Hilton, Marriott, and Hyatt all recorded drops ranging from 3 to 5 per cent, with Accor also logging negative growth.

In terms of average daily rate, Marriott, IHG and Hyatt each reported decreases of around 5 per cent.

Zhou Mingqi, founder of tourism consultancy Jingjian Consulting, said high-end international hotel chains primarily catering to business travellers have faced significant challenges this year due to a reduction in the volume and expense of corporate travel.

Executives from Marriott, Hyatt and Accor attributed the decline in performance to a slowing Chinese economy and more tepid consumer spending on their respective earnings calls.

“RevPAR in Greater China declined as macroeconomic pressures led to softer domestic demand. The region was also impacted by an increase in outbound high-end travellers,” said Marriott CEO Anthony Capuano on the company’s July 31 earnings call.

Following a spike in 2023 driven by the lifting of Covid-19 restrictions, demand for international hotel chains in China has slackened this year, as has the domestic hospitality sector as a whole, Zhou said.

“During past holiday seasons, hotel prices in China typically experienced sharp increases. This year, however, prices remained relatively stable.”

Retail sales grew by 3.7 per cent in China in the first half of 2024, a much slower rate compared to last year, when 8.2 per cent was recorded for the same period.

Qunar, a Chinese travel booking platform, reported relatively flat pricing trends during May’s Labour Day holiday period, with three-star hotels experiencing the most pronounced year-on-year decline at 9 per cent and two-star properties lowering their prices by 7 per cent.

Despite these setbacks, most international hotel brands still consider China an important market, with many seeking to expand their business by establishing a presence in areas off the beaten path.

Of the 31 hotels in IHG’s development pipeline, only five are located in traditional first-tier cities. The remaining projects are concentrated in “new first-tier cities” and second-or-third-tier cities. Hyatt has a similar focus, with around 80 per cent of its pipeline devoted to properties outside the first tier.

On IHG’s second quarter earnings call, CEO Elie Maalouf expressed optimism about the Chinese market, citing the continued growth of the middle class and its inherent potential for the travel industry.

“Our experience has been that there are highs and lows, there are ebbs and flows, but that the trend line is actually upwards in China,” Maalouf said.

Zhou, however, remained cautious, noting the rise of domestic hotel brands has intensified competition across the board. The ongoing property market crisis, he added, poses an additional challenge.

“In the past, international hotel chains served as a catalyst for real estate development. The presence of a high-end hotel could elevate a neighbourhood’s perceived status. However, this dynamic is no longer as prevalent,” Zhou said.

“International hotel chains will continue to invest in China, due to the fact that they generally adopt an asset-light model. However, the days of their rapid expansion in China may be over.”

‘What have you done?’ China champion skier Eileen Gu hits back at critics, cites 39 medals

https://www.scmp.com/news/people-culture/china-personalities/article/3275452/what-have-you-done-china-champion-skier-eileen-gu-hits-back-critics-cites-39-medals?utm_source=rss_feed

Champion skier Eileen Gu has hit back at critics who say she is not fully committed to China by citing the 39 medals she has won for the country over the past five years.

Born in San Francisco in the United States, the 20-year-old freestyle skier, who originally held US citizenship, announced in June 2019 that she had become a Chinese citizen and that she would represent China in future competitions.

The decision marked the beginning of the long-lasting controversy.

At the 2022 Beijing Winter Olympics, Gu made history by securing two golds and one silver medal for China.

However, she has come under fire from Chinese netizens who have accused her of being “unpatriotic” and labelled her “two-faced”.

In an Instagram post where Gu shared her performance at the 2023 World Cup in Calgary, Canada, she was accused of deliberately obscuring the nationality of Chinese skier Zhang Kexin with text and emojis.

This was seen as downplaying Zhang’s achievements and promoting herself as the only top skier in China.

Gu even cropped medalist Zhang out of a celebration photo of winners she posted.

In March, when Gu visited the White House she shared photos of herself with US Vice President Kamala Harris on her Instagram account, but not on Chinese social media platforms.

This fuelled accusations that she was “two-faced”.

Then, earlier this month, as the Paris Olympics concluded, rumours surfaced about Gu’s intimate public interactions with French Olympic swimming champion Leon Marchand in a Paris nightclub.

This came after Gu had deleted her photos with him on Instagram following backlash from Chinese netizens when Marchand appeared to ignore a handshake request from Zhu Zhigen, the coach of Chinese bronze medalist Wang Shun.

Marchand clinched four golds and a bronze in Paris, becoming the first swimmer since US legend Michael Phelps to win four individual golds at a single Olympics.

Gu’s public distancing from Marchand while maintaining private and intimate interactions with the swimmer has been decried as “hypocritical” and “self-serving behaviour”.

On Weibo, sports commentator Li Pingkang said: “There’s nothing wrong with commenting, knowing, or even being friends with someone, but immediately distancing yourself when it might cause controversy proves that she is opportunistic and utilitarian.”

As controversy raged, Gu responded to her critics by posting a video on Douyin on August 21 that highlighted her achievements.

She said: “In the past five years, I’ve represented China in 41 international competitions and have won 39 medals for China.

“I have also introduced three chief coaches and donated freestyle skis to the national team, and continually advocated for China and women on the global stage.”

She then challenged her critics and haters, asking: “What have you done for the country?”

In the caption for the video, Gu further encouraged her followers: “Be the best version of yourself and make the world a better place. If you haters are in such a bad mood, why not go out for a run?”

The video quickly gained attention on mainland social media, with the hashtag “Eileen Gu directly confronts haters” trending on Weibo and attracting almost 90 million viewers at the time of writing.

However, public opinion was sharply divided.

“I really don’t understand the hate against her, she’s such a positive role model,” said one person.

“I don’t get why people are so full of malice towards her. Why don’t you try winning a championship?” another said.

But some people disagreed: “Even as someone who’s not a hater, I find her words off-putting.

“Is she implying that Chinese people who don’t win medals haven’t contributed to the country? The billions of taxpayers haven’t contributed? Just because you won a gold medal, you’re the only one who has contributed?” said one such person.

While another added: “She only talks about her contributions, but why doesn’t she mention the benefits she’s received, how much money she has earned in China?

“She has earned billions in endorsements from the Chinese market. It’s all about money – she won gold for China, but she has also made a fortune from China. There’s no need to glorify it so much.”

Robotaxi start-up WeRide delays US IPO days before Chinese approval expires

https://www.scmp.com/tech/tech-war/article/3275472/robotaxi-start-weride-delays-us-ipo-days-chinese-approval-expires?utm_source=rss_feed

Chinese autonomous driving start-up WeRide has postponed its US initial public offering (IPO), citing the need for additional time to finalise necessary documents.

The company was looking to raise up to US$440 million in a New York listing originally scheduled for this week. WeRide said in a statement on Thursday that “the time required to update documents has taken longer than expected” and the company “is actively working on the necessary documents for the transaction”.

The delay, first reported by the International Financing Review, complicates WeRide’s plan to float on the Nasdaq, as Beijing’s approval for the deal is set to expire at the end of this week. It is unclear whether WeRide would have to seek an extension or reapply for a permit from the China Securities Regulatory Commission (CSRC) if it missed the deadline.

Under Chinese rules, WeRide, – Cayman Islands holding company operating primarily through Guangzhou Wenyuan Zhixing Technology and its subsidiaries in mainland China – needs a go-ahead from regulators to conduct an overseas IPO. The approval it obtained from the CSRC on August 25 last year is valid for 12 months.

WeRide last amended its prospectus and updated its filings with the US Securities and Exchange Commission on August 20.

Besides technical issues and paperwork, WeRide’s IPO is overshadowed by growing China-US geopolitical tensions, particularly in the technology sector. The US Department of Commerce is considering a ban on Chinese software in autonomous and connected vehicles, citing national security concerns, according to a Reuters report earlier this month.

WeRide was founded in 2017 by CEO Tony Xu Han, formerly the chief scientist at the autonomous driving unit of Chinese web search giant Baidu.

The start-up has obtained permits to operate autonomous vehicle services in China, United Arab Emirates and Singapore. Earlier this month, it received approval from California to test driverless vehicles with passengers.

In addition to robotaxis, WeRide also offers driverless buses and vans, street sweepers and advanced driver-assistance software.

WeRide is among a number of Chinese autonomous-driving unicorns that have received substantial backing, but are struggling to turn a profit.

To date, WeRide has raised US$1.4 billion from notable investors, including German car parts manufacturer Robert Bosch, Chinese carmaker GAC Group, Japanese firm Nissan Motor’s investment arm Alliance Ventures, Tokyo-based Mitsubishi Motors, French manufacturer Renault Group, and US chip designer Nvidia. Its financial investors include Qiming Ventures and IDG Capital.

According to its prospectus, WeRide last year booked a net loss of 1.95 billion yuan (US$268 million) on revenue of 402 million yuan. In the first half of this year, net loss narrowed to 882 million yuan.

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Energy engineer leaves prominent US lab for Chinese university

https://www.scmp.com/news/china/science/article/3275492/energy-engineer-leaves-prominent-us-lab-chinese-university?utm_source=rss_feed

A former researcher at one of the world’s top institutes in clean energy has become the latest scientist to return to China to take up a post.

Zhang Xiangyu, a specialist in intelligent control of new power systems, has left his job at the US National Renewable Energy Laboratory in Colorado to take up a post at Southeast University in Nanjing, Jiangsu province.

According to the university’s website, Zhang will be a doctoral supervisor and an associate researcher at its electrical engineering school.

Zhang was a postdoctoral research fellow at the laboratory from 2019 before becoming a tenured researcher at the laboratory from 2021 to April 2024.

The lab seeks to advance renewable energy and energy efficiency technologies – areas critical to China’s interests as it ramps up its technology and science drive to boost the country’s economy.

At the lab, Zhang studied the design of deep reinforcement learning algorithms for power systems and how innovative optimisation algorithms could be used in electricity systems, according to the school’s website.

He was also an algorithm engineering intern at Google in 2018, working with a team specialising in intelligent algorithms that improve energy efficiency, user experience and machine learning applications in household devices.

Zhang is one of a number of China-born scientists to take up positions in China after studying and working in the United States.

In January, award-winning mathematician Sun Song joined the faculty of the Institute for Advanced Study in Mathematics at Zhejiang University, capping more than a decade of research in the US.

Chinese-American physicist Gao Huajian also returned to China in January and joined Tsinghua University in Beijing as a full-time chair professor. Gao had been a tenured professor at Stanford and Brown universities, as well as a director of the Max Planck Institute for Metals Research in Stuttgart.

A steady stream of scientists have returned to China from the US since relations between the two countries nosedived in 2018 during the administration of US president Donald Trump.

In 2018, the administration launched the China Initiative as part of his national security strategy.

It allowed the US Department of Justice to investigate and prosecute “non-traditional collectors” such as Chinese researchers in labs, universities, and defence bases that “are being co-opted into transferring technology contrary to US interests”.

The department reportedly investigated thousands of scientists suspected of hiding Chinese connections but cases were quickly dropped due to lack of evidence.

The programme was formally ended by the Biden administration in 2022.

Zhang gained his bachelor’s degree at Wuhan University in 2012, and went on to earn his master’s at Tsinghua in 2014 and doctorate from Virginia Tech in 2018.

Guosen Securities plans to buy 53% of Vanho, heeding China’s call for brokers to combine

https://www.scmp.com/business/china-business/article/3275457/guosen-securities-plans-buy-53-vanho-heeding-chinas-call-brokers-combine?utm_source=rss_feed

Guosen Securities plans to buy control of a smaller rival in China’s technology hub of Shenzhen, answering the government’s call to consolidate the nation’s 12 trillion yuan (US$1.68 trillion) brokerage industry.

Shenzhen-based Guosen signed an agreement on Wednesday to buy 53 per cent of Vanho Securities in shares, according to a statement to the city’s stock exchange. The financial terms of the purchase will be announced within 10 days, said Guosen.

The takeover is being nudged by Shenzhen’s regulator of state-owned assets, in an attempt to cobble 145 nationwide brokerages with 11.8 trillion yuan of combined assets into fewer, bigger firms to compete with global leaders.

Guosen has not been alone in heeding the call since the State Council issued its injunction in April to nurture world-class investment banks. Zheshang Securities in Hangzhou is awaiting regulatory approval to buy 34 per cent of Guodu Securities in Beijing, while Guolian Securities in Jiangsu’s provincial city of Wuxi announced a plan to pay 29 billion yuan to buy out Minsheng Securities in Beijing. Western Securities in Shaanxi province became the latest to heed the call, with a plan in June to take over Guorong Securities in Inner Mongolia.

Guosen’s shares closed unchanged at 9.04 yuan each on Wednesday before trading was halted on the Shenzhen exchange, raising this year’s gain to almost 6 per cent. Vanho is a non-listed brokerage.

“A new round of restructuring in the brokerage industry is being driven,” said Liu Xinqi, an analyst at Guotai Junan Securities in Shanghai. “Top-ranked brokerages have strong motives for mergers and acquisitions and by doing so, they can deliver better results on their balance sheets.”

Guosen’s first-quarter profit slumped 31 per cent from last year, as revenue fell amid decreased turnover on the stock market and fewer initial public offerings. Net income rose 9 per cent from last year during the period.

Vanho is only a fraction the size of Guosen. The brokerage had 5.4 billion yuan in assets at the end of last year, ranked 85th out of 145 brokers in the industry. Guosen was in the ninth spot, with a book value of 110.5 billion yuan, according to Founder Securities.

Vanho has 27 branches and 25 bricks-and-mortar outlets mainly in Shenzhen, Guangzhou and Chengdu, where clients can open trading accounts and transact stocks offline, according to its website. It swung to a profit of 59 million yuan last year from a net loss of 215 million yuan for the previous year, with proprietary trading business contributing to almost 60 per cent of its revenue last year.

Guosen plans to buy the stake in Vanho from Shenzhen Capital Holdings, an investment arm under the Shenzhen government, the statement said. The company will hire independent financial and legal advisers, auditing firms and appraisal agencies for the acquisition, and carry out review and submission procedures during the stock suspension, it said.

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Snubbed China shopper makes luxury shop staff count US$84,000 cash for 2 hours then leaves

https://www.scmp.com/news/people-culture/trending-china/article/3275270/snubbed-china-shopper-makes-luxury-shop-staff-count-us84000-cash-2-hours-leaves?utm_source=rss_feed

Mainland social media has taken delight in an act of revenge meted out to the staff of a luxury brand store by a wealthy woman in China.

Describing it as the “most spleen-venting incident of the year”, the woman, who felt she had been snubbed by staff at a Louis Vuitton (LV) outlet, returned to the store with 600,000 yuan (US$84,000) in cash two months later to get her own back.

The woman, who uses the alias xiaomayouren on the social media platform Xiaohongshu, shared her “infuriating” experience at the StarLight Place shopping centre in Chongqing, southwestern China, in June, Sohu news outlet reported.

In the initial exchange, the woman, carrying a Hermes handbag, said she went to the LV outlet to buy clothes and staff behaved in a stand-offish way towards her.

They ignored her request for drinking water and merely pointed to old seasonal garments while she hoped to see the new arrivals.

They even rolled their eyes and looked impatient when she asked them to show her some dresses to fit.

The customer said after leaving the shop, she called “the headquarters” of the luxury brand, but was ignored.

After bearing a grudge for two months, the woman took a big bag containing 600,000 yuan to the same store. She was accompanied by her personal assistant and a friend.

They tried on some clothes before telling the sales person they would buy them. The woman then presented the shop assistants with a big bag of banknotes to pay.

After the sales staff spent two hours counting the money, the woman told them: “We don’t want to buy now. We are leaving.”

“After they finished counting it, I just took away my money and left. How is it possible for me to buy their products to improve their work performance?” she wrote on Xiaohongshu.

The woman’s story went viral online, attracting widespread praise from internet users.

“This ending is so delightful. I have always wondered why these shop assistants are so arrogant,” said one online observer.

While another said: “They sell luxury goods, but it does not mean they are luxury goods themselves.”

The China office of Louis Vuitton had not responded to questions from the Post at the time of writing.

Disputes caused by the dismissive attitude of sales staff often captivate social media in China.

In 2021, a woman customer in eastern China’s Zhejiang province told the media that she was shooed away twice within 15 minutes by a sales assistant in a luxury beauty store while she was sitting there to have a rest.

The woman said she felt discriminated against and insulted because she was dressed casually and was not wearing make-up.

The manager of the store apologised to the woman after the incident was widely reported.

Harris’ VP pick Tim Walz rallies Democrats in punchy speech, sidesteps China questions

https://www.scmp.com/news/china/article/3275440/harris-vp-pick-tim-walz-rallies-democrats-punchy-speech-sidesteps-china-questions?utm_source=rss_feed

Democratic vice-presidential candidate Tim Walz opted not to address criticisms of his long personal history with China as he accepted his party’s nomination at the Democratic National Convention in Chicago on Wednesday.

Instead, the Minnesota governor spent his concise 20-minute remarks pushing the party’s slogan of freedom and support for the middle class and lashing out at Republican presidential nominee Donald Trump as “weird” and “dangerous”.

Walz emphasised that although Trump and his Ohio running mate, J.D. Vance, have claimed ignorance about Project 2025 – a contentious conservative policy agenda – should they return to the White House, they are expected to impose a nationwide abortion ban “with or without Congress” and raise costs for the middle class.

“They spend a lot of time pretending they know nothing about this. But look, I coached high school football long enough to know, and trust me on this, when somebody takes the time to draw up a playbook, they’re going to use it,” he said, accusing Trump of benefiting “the richest and the most extreme amongst us”.

“Is it weird? Absolutely! But it’s also wrong and it’s dangerous,” Walz added.

Shortly after Walz delivered the most significant speech of his political career, Vance sought to distance the Trump campaign from Project 2025 in an ABC News interview.

He said Trump’s agenda was focused on “fighting back” against Beijing’s practices that were harming Americans.

“Project 2025 has nothing to do with this campaign,” he said.

“Remember our agenda is so simple. It’s to fight back against the Chinese theft of American manufacturing jobs, deliver rising wages for American workers, secure the southern border so that we can have more public safety and fewer people dying of fentanyl overdoses in our country.”

Earlier on Wednesday, Trump’s team claimed that Walz had “repeatedly praised Communist China”, taking dozens of trips to the country and saying the US should not have an “adversarial relationship with them”.

Since Walz burst from obscurity last month after US Vice-President Kamala Harris named him as her running mate, Republicans have been leveraging his China experience in an apparent effort to undermine his credibility.

Last week, US House Republicans opened a formal investigation into what they described as Walz’s cosy relationship with China and “long-standing connections to Chinese Communist Party entities and officials”.

US Congressman James Comer, Republican of Kentucky and chair of the US House Oversight committee, wrote to FBI director Christopher Wray asking for information on the Chinese Communist Party-connected entities and officials that Walz might have “engaged and partnered with”.

Earlier this month, US congressman Jim Banks, Republican of Indiana, asked Defence Secretary Lloyd Austin to investigate Walz’s travel to mainland China when he served in the Nebraska and Minnesota national guards.

The National Guard is primarily a state-level component of the US military, with members typically serving part time. Walz served in the guard’s army branch for about 24 years, leaving in 2005 as a senior enlisted member.

Walz spent about a year teaching high school in China in the late 1980s through Harvard University’s WorldTeach programme. After returning to the US, Walz met his wife Gwen while both taught at a Nebraska high school.

In 1994, the couple set up a company called Educational Travel Adventures that offered students summer trips to China. In 2007, Walz was a fellow at Macau Polytechnic University.

Walz, who has made about 30 trips to China since 1989, speaks some Mandarin.

Without directly responding to the attacks on his China experience, Walz in his acceptance remarks on Wednesday said: “Leaders don’t spend all day insulting people and blaming others. Leaders do the work.

“I don’t know about you, I’m ready to turn the page on these guys,” he added.

The vice-presidential candidates have agreed to debate each other in New York City on October 1. Walz appears to be more popular among Americans at the moment, according to some surveys.

A recent poll by the Associated Press-NORC Centre for Public Affairs Research showed that 44 per cent of American adults held an unfavourable view of Vance compared to 25 per cent for Walz.

PLA sends advanced landing craft for ‘high-intensity’ drills amid South China Sea tensions

https://www.scmp.com/news/china/diplomacy/article/3275459/pla-sends-advanced-landing-craft-high-intensity-drills-amid-south-china-sea-tensions?utm_source=rss_feed

The Chinese navy has staged combat drills in the South China Sea featuring one of its most advanced amphibious warfare ships.

The Jinggang Shan, a Type-071 landing ship, “recently” took part in an extensive drill over several days, according to a social media post by the People’s Liberation Army Southern Command.

It said this “high-intensity maritime training” was designed to improve the navy’s operational coordination and ability to perform diverse missions in challenging environments.

The exercises included both offensive and defensive manoeuvres, information gathering, battlefield rescues, helicopter drills and a simulation in which the ship successfully tracked and destroyed a target in the air.

Southern Command did not say where or when the exercises occurred.

The ship is capable of carrying hundreds of troops and dispatching four hovercraft and 15 amphibious vehicles at the same time.

Meanwhile state broadcaster CCTV reported that two frigates had conducted live-fire exercises in the South China Sea, including air defence and anti-submarine drills. Another exercise saw the navy practising anti-mine operations designed to “break the enemy’s blockade of shipping lanes”.

It did not say whether these exercises were related to the Jinggang Shan’s drill or were separate.

Earlier this year, the Jinggang Shan visited Cambodia and East Timor to take part in joint training exercises and boost ties with their hosts.

The ship’s recent drills in the South China Sea come amid heightened tensions between China and the Philippines.

At the same time, Manila has moved to strengthen its military ties with its neighbours and the United States, including its first joint coastguard drill with Vietnam off the west coast of Luzon earlier this month.

In 2016 the Philippines brought a case to an international tribunal in The Hague, which dismissed Beijing’s claims. China refused to participate in the process and has never accepted the ruling.

The tension between the two countries has intensified since President Ferdinand Marcos Jnr came to power two years ago, including a series of confrontations in recent months.

Many of these have taken place near the Philippine-held Second Thomas Shoal, but recently Sabina Shoal has become the main focus of their rivalry.

On Monday, two Philippine vessels on a resupply mission were damaged in a collision with a Chinese ship near the shoal, where the BRP Teresa Magbanua, one of the most advanced Philippine coastguard ships, has been stationed since April.

China has also sent several ships to the area, including the CCG-5901, the world’s biggest coastguard vessel.

Philippine fishing crews have also complained that Chinese vessels are obstructing their activities, with the most recent incident taking place near Scarborough Shoal, another disputed feature which is held by Beijing.

As well as its dispute with the Philippines, China’s sweeping claims to much of the resource-rich South China also overlap with those of Vietnam, Malaysia and Brunei.

During the recent visit to China by Vietnam’s new leader To Lam, the two countries agreed to resolve their dispute “through friendly consultations”.

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China, India among 35 countries added to Sri Lanka visa-free list to boost tourism

https://www.scmp.com/news/asia/south-asia/article/3275462/china-india-among-35-countries-added-sri-lanka-visa-free-list-boost-tourism?utm_source=rss_feed

Sri Lanka’s cabinet approved issuing free tourist visas to visitors from 35 countries including China, India and Russia, a top official said on Thursday, in an effort to boost tourism and help revive its crisis-hit economy.

Tourists will be given 30-day visas under a six-month pilot programme that will start from October 1, said cabinet spokesman and Transport Minister Bandula Gunawardana.

“The aim of the government is to transform Sri Lanka into a free visa country, much like Singapore, Thailand, and Vietnam to tap into the benefits of a rapidly growing tourism industry,” Gunawardana told reporters at a weekly cabinet briefing.

The extensive list includes India, China, the UK, Germany, the Netherlands, Belgium, Spain, Australia, Denmark, Poland, Kazakhstan, Saudi Arabia, the UAE, Nepal, Indonesia, Russia, Thailand, Malaysia, Japan, and France.

The country of 22 million people, famed for its beaches, ancient temples and aromatic tea, saw its tourism industry pummelled first by the Covid-19 pandemic and then by a severe financial crisis in 2022 that saw mass scale protests and shortages of essentials such as fuel.

But the tourism industry is reaping the benefits of a turnaround that began last year with Sri Lanka clocking nearly 2 million arrivals by mid-August, for the first time since 2019.

The island is expecting to close the year at 2.3 million arrivals.

India is the largest source of tourists with 246,922 arrivals, followed by the UK with 123,992, latest data from the Sri Lanka Development Authority showed.

Sri Lanka earned US$1.5 billion from tourism in the first six months of 2024, up from US$875 million during the same period last year, according to the central bank.

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[Sport] US charges Chinese dissident with allegedly spying for Beijing

https://www.bbc.com/news/articles/cp8nzpx45wxo

EPA-EFE/REX/Shutterstock

South China Sea: Filipinos ‘blocked’ from Scarborough Shoal amid concerns over fishing rights

https://www.scmp.com/week-asia/politics/article/3275375/south-china-sea-filipinos-blocked-scarborough-shoal-amid-concerns-over-fishing-rights?utm_source=rss_feed

Filipinos are increasingly being blocked from their traditional fishing grounds at Scarborough Shoal by Beijing’s enforcement of its territorial claims in the South China Sea, with new restrictions and aggressive patrolling creating a potential flashpoint over fishing rights and national sovereignty.

The New Masinloc Fishermen’s Association in the town of Masinloc in Zambales said its members had been unable to get closer to Scarborough Shoal ever since the Chinese coastguard began enforcing an anti-trespassing regulation on June 15.

“None from our group can go to Scarborough Shoal now. We tried several times, but the Chinese coastguard blocked our way, and then they will deploy their personnel on board rubber boats to drive us away. Maybe, if we insist on going there, they will arrest us,” Leonardo Cuaresma, the head of the association, told This Week in Asia on Wednesday.

There have been no reports so far of any arrests of Filipino fishermen since the regulation came into force.

Cuaresma said his fishermen had been severely affected by the regulation, noting how they now must fish 40 nautical miles (74km) from the shoal, where most of the fish in the area are. Before the regulation, big fishing boats could get up to 10 nautical miles from the shoal, while smaller boats could fish inside the lagoon.

He also accused the Chinese coastguard of destroying their fish aggregating device set up by the association’s members in Scarborough Shoal.

Under its anti-trespassing regulation, the China Coast Guard says it is authorised to detain foreign nationals for up to 60 days if they are caught trespassing in what it considers to be Beijing’s territorial waters, even if those waters are within the Philippines’ exclusive economic zone.

“There are Philippine Coast Guard, but they are far from the shoal. Only the Chinese coastguard and their militias are there,” Cuaresma said.

Scarborough Shoal – a triangle-shaped chain of reefs and rocks in the middle of the West Philippine Sea – is a traditional fishing area for both countries. It is located about 120 nautical miles west of the Philippine island of Luzon and 594 nautical miles from China’s Hainan Island.

Jose Antonio Custodio, a defence analyst and fellow at the Consortium of Indo-Pacific Researchers, told This Week in Asia that issues in the West Philippine Sea always boil down to “occupation is ownership”.

In 2012, China seized Scarborough Shoal, the traditional fishing ground of Filipino fishermen within the 200-nautical-mile exclusive economic zone of the Philippines, after a two-month stand-off with the Philippine Navy.

Manila took Beijing to court after alleging that Chinese naval vessels obstructed the Philippines’ entry to Scarborough Shoal, which has since remained under China’s administrative control.

“We made a strategic mistake in 2012 after the Philippines withdrew from the Scarborough Shoal. That was the worst mistake the Philippines made. It should never have withdrawn and allowed the Chinese to consolidate,” Custodio said, adding that this had brought about the issues currently facing the fishermen.

In 2016, a UN arbitration court ruled in favour of the Philippines’ claims in the South China Sea, dismissing Beijing’s historical claims to the region – delineated then in Chinese maps by a nine-dash line (now a 10-dash line) – as invalid. However, Beijing rejected the ruling and has since insisted that it has jurisdiction over all areas within that boundary.

On Tuesday, Alexander Lopez, the newly appointed presidential palace spokesman for the National Maritime Council, said the government was pursuing diplomacy over military action in response to its increasingly tense maritime row with China.

However, Custodio said for Filipino fishermen to be able to freely fish in Scarborough Shoal, Manila should order the Philippine Coast Guard to escort the fishermen and face off with the Chinese.

The other way, he suggested, was to “have negotiation with the Chinese recognising their ownership in the area and there will be something in exchange for that, which is exactly what happened during the time of former president Rodrigo Duterte where he set aside the arbitral ruling”.

Duterte, known to be pro-China, affirmed the “importance of continuing” talks in solving the maritime dispute. During his six-year presidency, he worked to rebuild ties with Beijing that had frayed after the arbitral ruling in 2016.

Analyst Chester Cabalza, president of the Manila-based International Development and Security Cooperation, said the Philippines and China could still work to resolve the dilemma and come up with an agreement similar to the pact they made regarding the Second Thomas Shoal.

“The Philippines has the legal upper hand while China has the military might in the contested large atoll near Zambales,” Cabalza told This Week in Asia.

Manila also had the “moral ascendancy to assert its sovereignty in Scarborough Shoal” which was within its exclusive economic zone, he said, adding that the shoal was a factor in the 2016 arbitral ruling being decided in favour of the Philippines.

Don McLain Gill, a geopolitical analyst and lecturer at the Department of International Studies at De La Salle University, said Beijing had been imposing an illegal de facto exclusionary policy since it occupied Scarborough Shoal in 2012.

Gill said this was done through the illegal and provocative measures of the Chinese coastguard and called on Manila to take steps to “delegitimise” their actions in the contested sea.

China space engineers kick ‘doomed’ satellite pair into life in lunar orbit

https://www.scmp.com/news/china/science/article/3275415/china-space-engineers-kick-doomed-satellite-pair-life-lunar-orbit?utm_source=rss_feed

China has “kicked” two of its experimental satellites into their designated lunar orbit, five months after they were left in limbo when the launch rocket’s upper stage did not fire.

The satellites, developed by the Chinese Academy of Sciences, were shown operating in their planned distant retrograde orbit (DRO) in a PowerPoint slide attributed to CAS that started circulating on social media platform Weibo from Tuesday.

A researcher who works for CAS in Beijing and is familiar with the project confirmed to the South China Morning Post on Wednesday that the satellites DRO-A and B had been recovered.

The recovery was achieved by getting the spacecraft to fire their engines in a series of “perigee kicks” aimed at the closest point to the Earth, increasing velocity and extending their reach, the researcher said, on condition of anonymity.

The satellites left the Xichang launch centre on March 13 on top of a Long March 2C rocket but did not reach their destination, tens of thousands of kilometres above the moon’s surface.

The rocket’s first and second stages worked normally, but the Yuanzheng-1S upper stage did not, state news agency Xinhua reported the following day. “The satellites have not been inserted into their designated orbit, and work is under way to address this problem,” it said.

Two weeks later, the US Space Force tracked the pair at a raised orbit compared to the time of the incident, suggesting they were “still trying to get to the moon”, according to Harvard astronomer and space historian Jonathan McDowell.

At the same time, Scott Tilley, an amateur astronomer based in Canada, said the apparent orbital climb had probably cost considerable satellite propellant and would still not be enough to inject the satellites directly into a moon-bound trajectory.

Other challenges included limited fuel stocks and multiple transitions through the Van Allen radiation belt, where high-energy charged particles trapped in Earth’s magnetic field could damage the satellites’ electronics and solar panels, according to Tilley.

Since then, no further signs of the satellites were detected. “I bet the Space Force has lost it, as they are not good at tracking that far out,” McDowell said.

According to the slide, the satellites are in a large, circular orbit flying in the opposite direction to the moon’s rotation, giving them long-term stability and needing less fuel to maintain.

The slide’s information matches a paper published last year in the Journal of Deep Space Exploration, which said the satellites would be working with DRO-L – a third satellite that went into low Earth orbit in February.

The satellites are testing laser-based navigation and timing technologies between Earth and the moon, known as cislunar space.

CAS is also developing a next-generation constellation of satellites in a range of orbits near Earth, the moon and in between, for precision positioning, navigation and timing of future missions to the moon and beyond, the slide showed.

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US, China intensify battle for Pacific dominance in new ‘Great Game’

https://www.scmp.com/news/asia/australasia/article/3275422/us-china-intensify-battle-pacific-dominance-new-great-game?utm_source=rss_feed

Island nations scattered across the Pacific Ocean are at the centre of an intensifying competition between China and the US for maritime routes, deepwater ports and other strategic assets in what the Lowy Institute calls a new “Great Game.”

The countries’ proximity to key shipping lanes and the communication cables that criss-cross the Pacific floor, together with fisheries and seabed minerals, also encourage the rivalry, Lowy said in a report on Wednesday. But it’s the region’s maritime location between Asia, North America and Australia that is set to keep it at the forefront of major powers’ defence strategies.

“The Pacific’s geopolitical landscape is increasingly crowded, with multiple powers vying for influence,” report authors Mihai Sora, Jessica Collins and Meg Keen said. “China is expanding its reach through diplomatic relations, infrastructure projects, and development finance, while traditional partners such as Australia and the US strive to maintain their influence.”

That is a significant turnaround for island leaders who used to complain that Western nations did not pay enough attention to the region. Lowy warns the new strategic focus is set to challenge good governance and transparency, given opportunities for local political actors to advance narrow interests over what best serves the people of the Pacific.

The Pacific region is further grappling with rising sea levels due to climate change, as well as a lost decade of development following Covid.

China is now a significant player in the Pacific via development finance, diplomatic outreach and infrastructure such as ports, airports and telecommunications. It’s also pushing to play a greater role in key sectors such as the military, policing, digital connectivity, and media, according to the report from the Sydney-based institute.

The US and its allies are also catching up. Since 2017, 18 new embassies have been established in the Pacific, including American outposts in Vanuatu and the Solomon Islands, while four have closed. Australia, which has opened six new Pacific posts since 2017, is the only country with a resident diplomatic presence in every sovereign Pacific nation.

“The frenetic tempo of global diplomatic outreach to the Pacific underscores the intensity of competition,” Lowy said. “But this sustained engagement can quickly overwhelm local systems” and may not bring “tangible benefits.”

Beijing’s loans and infrastructure investments have allowed it to bolster its presence at the expense of Taiwan, which has lost three diplomatic partners in the Pacific to mainland China since 2019.

In 2022, China signed a security pact with the Solomon Islands, triggering concerns among Western nations. That prompted the US and Australia to bolster security and other agreements with countries including Papua New Guinea. Canberra also signed an agreement with Tuvalu allowing its people to relocate to Australia as climate change worsens.

Rapid population gains and urbanisation are straining services in Pacific nations and young people often have poor employment and education prospects, according to Lowy. PNG’s population is estimated to reach 22 million by 2050, from around 10 million currently, it said.

The “Great Game” reference harks back to the 19th century competition for influence in Central Asia between the British empire and Russia’s tsarist rulers.

One of the problems of great power attention in the Pacific is that local needs like poverty reduction, education, health and other key areas are ignored in favour of strategic projects like deepwater ports and communications infrastructure. Or locally, politicians use development funds to build stadiums and other high-profile projects at the expense of more pressing needs.

The number of individual donors to the Pacific increased to 82 in 2021 from 31 in 2008 and some Pacific Islanders are concerned about the capacity of regional architecture and national systems to manage and coordinate this activity, Lowy said.

“The extent of corruption in the Pacific, including ‘capture’ of the state by elites and private interests, has seen no material improvements across the years,” the Lowy report showed.

One woman’s custody battle highlights the challenges facing same-sex couples in China

https://apnews.com/article/china-lgbtq-couple-custody-057d1dc0d467db89f7d266190d38c899Zhang Peiyi, a Shanghai resident, tears up during an interview at her home in Shanghai on July 31, 2024. (AP Photo/Ng Han Guan)

2024-08-22T03:20:43Z

BANGKOK (AP) — It’s been more than four years since Zhang Peiyi last saw her son, one of two children from her former marriage.

Denied custody of both kids, Zhang finally settled in June for visitations with her daughter. But after seeing her only once, Zhang’s ex-wife called the meetings off indefinitely. What Zhang thought was the end of a yearslong legal battle is facing yet another hurdle, as she has to go through court again to ask them to enforce her visitation rights.

“These types of disputes are not well protected in our country,” said Gao Mingyue, the lawyer representing Zhang. “This is a reminder that we have to be self-sufficient.”

LGBTQ+ families like Zhang’s have no law to cite when faced with situations like custody or divorce, as same-sex marriage is not recognized in China, meaning the outcome of each case is uncertain and inconsistent.

For straight couples — regardless of marriage status — both are recognized as custodians by law. If the two split, the court decides who gets custody based on factors like the parent’s financial resources, the child’s desire and the home environment — operating from the principle of making the best decision for the child.

But for same-sex couples who have children via surrogacy or in vitro fertilization, nothing is guaranteed.

Zhang, a Shanghai resident, knows this firsthand. She’s been fighting to see her children since 2020, after a difficult separation.

The two women went to the United States to be legally married and give birth to their children. Zhang’s ex provided the eggs, and Zhang gave birth to a girl and her ex birthed a boy. Back in China, a few years later when the relationship ended, Zhang’s ex took both children and cut off all communication.

When Zhang turned to the law, she discovered just how little protections there were for LGBTQ+ couples in China, where there’s no legal standard for two mothers or two fathers. The law around families is written exclusively for cases of a mother and a father.

While surrogacy is not illegal, hospitals are forbidden from selling eggs or sperm, so laws don’t address issues of parentage where surrogacy is involved. And the courts have so far avoided making any legal precedent; Zhang’s court granted custody to the biological mother, while another court in another case denied custody to the biological mother.

Gao represented both cases.

Zhang’s case, which landed in a Beijing court, granted her ex custody and Zhang visitation of the child she birthed. But because the outcome was reached through a settlement, there is no legal precedent set. Although China is not a precedent-dependent country in the way the U.S. is, legal judgements can still have an impact that lawyers and academics cite.

In the other case, in the southern coastal city of Xiamen, the court’s 2020 ruling said the woman suing, who provided the egg that her partner carried, “had no legal basis” for her argument and that it could not affirm that she was the child’s mother. Further, it said, “the defendant and plaintiff are same-sex partners, and this is not regulated by our country’s marriage law or any other civil laws.”

No DNA testing was done for the case, but Gao wanted to prove that his client was the genetic mother. They provided medical evidence and the opposing side admitted it was his client’s egg, but the court didn’t want to make a ruling, he said. “They just said there’s no way to prove you’re the genetic mother, but even if you had no way to affirm the parent-child relationship, the law actually allows the court to make this judgement,” he said.

“It’s quite messy, and different courts at different times and different places have come to different solutions,” said Darius Longarino, a senior fellow at the Paul Tsai China Center at Yale Law School.

The case drew criticism from one of China’s top legal experts on civil law.

“We can put aside the issue of surrogacy or same-sex couples, when a child is born, that’s a human being,” Yang Lixin, a professor at Renmin University’s law school in Beijing said in an online commentary when the Xiamen case issued a first judgement in 2020.

He said that the court’s decision was basically “nonsense,” adding that the child’s “rights and his position must be protected.”

Some LGBTQ+ couples are trying to stave off the legal ambiguities with a legal agreement, similar to how a prenup works, outlining what would happen to their children if they broke up.

“For same-sex partners, when they decide to have kids, we advise them to sign an agreement on the births,” said Gao. He said some 30 couples have come to his practice inquiring abut drafting agreements that establish the identity of the parents, their mutual agreement to have children, and the responsibility, financial and otherwise, to raise the kids.

He’s drafted eight or nine, but none have had a chance to be tested yet, so it’s unclear how the courts will receive them.

In July, when Zhang got her first legally guaranteed visit to see her daughter for the first time in more than four years, it was a subdued occasion.

“I felt very calm, in those four hours,” she said. “I couldn’t cry then. I didn’t even have time to have a happy reaction, but I was satisfied that at least in those four hours, I was in the same space as her.”

The People’s Court in Beijing’s Fengtai district granted Zhang the right to see her daughter once a month, four hours per visit, which is common in cases with young children. Zhang traveled up from Shanghai and then drove to Hebei province, two hours outside of Beijing, to a home that her ex-partner owns.

Her ex-partner, the only other person present during the visit, required their daughter to wear a face mask, and the girl spent the time doing homework, Zhang recalled. But there were moments when the little girl would sneak looks at the woman sitting with her in the quiet house. They didn’t talk at all, Zhang said, partly because she didn’t know what to say.

It was only after Zhang walked out of the house, she said, that she burst into tears.

Now, Zhang doesn’t know when she’ll see her daughter again. Her ex-partner is denying visitation on the claim that Zhang violated the children’s privacy. The woman’s lawyer, Tian Yuanyuan, said his client would not give any interviews as the court requested that both sides refrain from talking to media. He also said The Associated Press was violating their privacy by calling.

“We’ll be telling the court about this,” he said.

With few options left, Zhang says she will keep fighting by recording all that has happened to her, while taking what precautions she can such as keeping the children’s names and ages private.

“The children have the right to know what happened. And so I wanted to give my greatest effort. One day, maybe after they know, they know, ‘Our mom really tried her best and gave it her all,’” Zhang said. “I want to take 99 steps forward, and the children, after they see I’ve taken these 99 steps, they can take one step toward me.”

HUIZHONG WU China correspondent based in Taiwan twitter

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Is China curbing rare earth production to raise prices as its global dominance wanes?

https://www.scmp.com/economy/economic-indicators/article/3275353/china-curbing-rare-earth-production-raise-prices-its-global-dominance-wanes?utm_source=rss_feed

Beijing may be looking to rein in its allocated production quota for China’s rare earth elements – including strategically important metals used in ubiquitous items such as smartphones and in critical defence equipment – amid a decline in domestic prices while overseas development accelerates.

On Tuesday, the Ministry of Industry and Information Technology and the Ministry of Natural Resources jointly set the upper limit for the year’s second batch of rare earth mining output at 135,000 tonnes, and that of smelting at 127,000 tonnes. Both figures are the same as the first batch announced in February.

Combined, the two batches this year respectively stand at 270,000 tonnes and 254,000 tonnes, representing year-on-year increases of 5.9 per cent and 4.2 per cent from the first two batches of quotas released last year.

Beijing often issues two batches a year, but 2023 marked an exception with a third one. If there are no subsequent batches released this year, the year-on-year increases would be smaller than the 21.4 per cent and 20.7 per cent seen last year.

And that would mean “that the growth rate of the domestic supply of rare earths would be narrowed down this year”, according to a research note published by Topsperity Securities on Wednesday.

Such a decision, “together with the boost of demand from the new-energy-vehicle and wind-turbine sectors, is expected to drive a rebound of rare earth prices”, the note said.

China’s supply of rare earths is critical to the global supply chain, and its dominant hold on the group of 17 metals critical to tech development has drawn mounting geopolitical concerns in an intensifying tech rivalry between China and the United States.

Also, the world’s second-largest economy is restrictive in its supply and export of rare earths – identified earlier this year by the Ministry of State Security as strategic mineral resources “directly related to national security”.

Most Chinese production is controlled by six state-owned companies, and authorities have banned the export of rare earth extraction and separation technologies, as well as technology to make rare earth magnets. Meanwhile, the US Department of Commerce has called for plans to cut America’s reliance on Chinese rare earths.

China accounted for 80 to 90 per cent of global rare earth production in the early 2010s, but that dominance waned to around 70 per cent by 2023 amid a global increase in the supply of rare earths, according to the US Geological Survey.

Prices of the critical materials have been falling, overall. Based on data from Argus Media, a commodity-price consultancy, rare earths prices are down roughly 20 per cent since the beginning of this year.

With growing global concerns regarding reliance on Chinese rare earths, more governments have been pumping resources to develop their own capacities in rare earth production, including Australia, which has increased investment in rare earth mining and also ordered China-linked investors to dispose of shares in an Australian mining company.

Meanwhile, Beijing has released a new set of regulations that look to take effect on October 1 and would establish a rare earth product traceability information system.

China’s January-July rare earth exports rose 7.5 per cent, year on year, to 34,032 tonnes, while the export value plunged 40.8 per cent to US$300.4 million, customs data showed.

China father makes children kneel on busy road in bid to force return of estranged wife

https://www.scmp.com/news/people-culture/trending-china/article/3275260/china-father-makes-children-kneel-busy-road-bid-force-return-estranged-wife?utm_source=rss_feed

A father in southern China made his three young children kneel in the middle of a busy road in a bid to force the return of his estranged wife, sparking outrage on mainland social media.

On August 15, a police officer in Foshan, Guangdong province, discovered the youngsters during a patrol.

They were all under the age of seven, the youngest being only two years old, according to Southern Metropolis Daily.

Videos circulating on social media show vehicles passing close to them while their father sits in a roadside flower bed, watching passively.

Police quickly moved the youngsters to a safe area and issued a warning to the father. The children were unharmed.

Southern Metropolis Daily reported that the 30-year-old father, identified as Ling, said he was unable to contact his wife after an argument so he told their children to kneel in the road thinking it would make her respond.

His wife had reportedly returned to her hometown after deciding she wanted a separation, and refused to have any contact with him.

The reason for the quarrel is unclear.

On August 16, Foshan city government officials said that Ling and his three children had left the city and returned to their registered residence, not mentioning the specific location.

The incident has become a hot topic on mainland social media, with 63 million views on Weibo at the time of writing.

“It’s shameful and hateful that a father does not know how to love and take care of his children,” one Weibo user wrote.

“Using children as hostages like this is child abuse and violates the children’s right to personal safety,” said another.

“My father was the same as Ling. When I was young, my mother wanted to divorce him, he refused and locked me in the house in an attempt to coerce her back,” a Weibo user wrote.

In China, minor infringements on children’s rights can result in up to five days of detention or a warning.

There have been other reports of extreme parenting practices across the country.

On July 20, a two-year-old boy in southern China was struck by a car after his parents made him practise walking by crossing a motorway, according to NetEase News.

In June, a parenting blogger from eastern China put his seven-month-old son in an unprotected climbing net and on a rolling skateboard, saying it would enhance the baby’s physical development.

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China-Thailand joint military exercises have ‘all elements needed for a small-scale war’

https://www.scmp.com/news/china/military/article/3275356/china-thailand-joint-military-exercises-have-all-elements-needed-small-scale-war?utm_source=rss_feed

China has revealed details of its joint military exercises with Thailand, which involve the use of special forces for the first time and have been described as containing “all the elements needed for a small-scale war”.

The Falcon Strike 2024 drills started in northeast Thailand on Sunday and, according to Chinese state broadcaster CCTV, are more complex and broad ranging than previous exercises involving the two countries.

CCTV said the exercises, which run until August 29, would cover elements such as cross-border support, force deployment, joint air defence, deterrence and debriefing.

It said the exercises involved the use of special forces, warplanes and helicopters to “beef up military cooperation and address shared security challenges”, and that commanders on both sides were confident it would improve their troops’ tactical and technical skills.

Fu Qianshao, a military analyst and former PLA officer, said it was a “significant change with far-reaching implications”.

“The five-stage exercises … are all the elements needed for a small-scale war,” Fu added.

“The military exercise between China and Thailand, which originally focused more on joint training, has now taken on a more realistic combat nature.”

China and Thailand have been conducting annual air force exercises since 2015, with a two-year break during the Covid-19 pandemic.

Fu said the involvement of special forces and helicopter drills this year added a “new dimension”, saying: “The helicopters, in particular, allow for a low-altitude approach, enabling forces to reach key areas directly without the need for parachutes.”

Song Zhongping, a former PLA instructor, said the use of China’s long-range Y-20 transport planes in combination with special forces was a significant element of the drill.

He said that army and navy special forces would be involved and he thought the exercise would include drills to airdrop these troops “deep into enemy areas to occupy certain important targets and capture important personnel”.

“This is no longer a drill only with air force tactics, but a joint force combat exercise,” he said.

The exercise is taking place at the Udorn Royal Thai Air Force Base, which was formerly used by the US Air Force.

It comes as China is seeking to strengthen its defence relations across Southeast Asia as part of a wider strategy to counter US influence.

This year it has also staged joint exercises with Cambodia and Laos and agreed to boost security cooperation with Vietnam during this week’s visit by the country’s new leader To Lam.

Thailand, as the only US ally on the Southeast Asian mainland, offers a unique opportunity for China to expand its influence in the region.

Its relationship with Washington has come under pressure since the 2014 military coup that overthrew the democratically elected government.

China has stepped into this breach by boosting its military ties with Bangkok and striking several arms deals.

SK Group backs US$140 million fund to bring South Korean chip firms to China

https://www.scmp.com/tech/tech-war/article/3275402/sk-group-backs-us140-million-fund-bring-south-korean-chip-firms-china?utm_source=rss_feed

SK Group is putting its money into a new fund designed to help South Korean chip firms set up shop in China, even as the US ratchets up pressure on its allies to curb Beijing’s tech ambitions.

SL Capital, a private equity firm formed by SK and Beijing-based Legend Capital, signed an agreement with authorities in the eastern Chinese city of Wuxi on Tuesday to jointly set up a 1 billion yuan (US$140 million) fund, according to a statement from the local government.

SL Capital is financing the investment via a joint venture with Wuxi Industry Development Group, which is backed by the local government. The move is designed to help leading companies in South Korea’s chip supply chain set up operations in the municipality, the statement said.

The new fund also includes money from Wuxi National Hi-Tech District. The parties involved in the fund have worked together to bring South Korea’s chip equipment suppliers Nextin and Gigalane to Wuxi, according to the statement.

“SL Capital is a fund established by SK Group together with Legend Capital, but it is managed by SL Capital and SK Group is not directly involved in the fund management,” SK said in a statement to Bloomberg News, adding SL Capital has nothing to do with SK Hynix’s investment in semiconductors.

SK’s semiconductor unit is the world’s leading artificial intelligence (AI) memory chip maker and a close partner to Nvidia.

SL Capital has invested in several Chinese semiconductor firms, including AI chip maker Black Sesame International Holding, according to the fund’s official WeChat account.

A Nextin official told Bloomberg News that it is still in the process of setting up facilities in Wuxi after signing a preliminary agreement with local authorities in August 2023.

Gigalane is preparing to set up an equipment unit in Wuxi and target the Chinese market, according to a company statement in June. Multiple calls and an emailed request for comment to the company went unanswered.

China is aggressively seeking more partners to help it achieve self-sufficiency in critical fields including semiconductors to overcome growing US restrictions on the Asian nation’s access to advanced technologies.

Meanwhile, SK Hynix relies on China as a major market and a key manufacturing hub for its memory chips, operating plants in Wuxi, Chongqing and Dalian. SK Hynix, however, does not make its AI memory chips in China. The US is considering preventing Chinese firms from obtaining those sophisticated components.

AIA first-half profit jumps 53% amid mainland Chinese insurance-buying spree in Hong Kong

https://www.scmp.com/business/banking-finance/article/3275399/aias-first-half-profit-jumps-53-amid-mainlanders-insurance-buying-spree-hong-kong?utm_source=rss_feed

AIA Group, Asia’s largest insurer, reported its best first-half profit in five years, as mainland Chinese customers continue buying policies in Hong Kong with an eye on better investment returns and as a hedge against a weakening yuan.

Net profit rose 53 per cent in the six months to June to US$3.31 billion, or 29.53 US cents per share, according to a filing to the Hong Kong stock exchange on Thursday. This exceeded analysts’ estimates of a 45 per cent increase in net profit to US$3.27. It was also the best first-half result since US$3.86 billion in the same period in 2019.

Operating profit after tax, excluding one-off items and valuation gains in the company’s investment portfolio, increased 7 per cent to US$3.39 billion.

AIA’s value of new business (VONB), an important measure of sales and future growth, surged 25 per cent to US$2.46 billion.

“We have achieved record new-business profit, significant earnings growth, strong free surplus generation and returned substantial capital to shareholders,” Lee Yuan Siong, CEO and president, said in the statement.

“AIA is exceptionally well-positioned to leverage the long-term structural growth opportunities in Asia, the most attractive region in the world for life and health insurance.”

He will meet the media to discuss the results at noon.

AIA’s shares rose 3.6 per cent to HK$53.25 on Thursday morning after the earnings announcement.

The Hong Kong-based insurer declared an interim dividend of HK$0.445 per share, an increase of 5.2 per cent from a year earlier. The company in April announced an additional US$2 billion worth of share buy-back, bringing the total to US$12 billion since March 2022.

Lee said the high dividend payment and buy-back reflects “AIA’s very strong financial position and confidence in our future operational and financial delivery”.

Hong Kong and China, which represent 62 per cent of AIA’s new business, both reported strong sales growth in the first half.

VONB in Hong Kong rose 26 per cent to US$858 million as mainlanders continued to buy products in the city for better returns and better health protection.

Mainland customers like to buy insurance policies in Hong Kong as the products are sold in US dollars or Hong Kong dollars. This helps hedge the risks against a falling yuan, which has weakened 13 per cent against the US dollar over the past two years.

In the first half, 21 million travellers visited Hong Kong, an increase of 64 per cent from a year earlier, according to data published by the Hong Kong Tourism Board. Two-thirds were from the mainland.

The insurer, which traces its roots to 1919 in Shanghai, continued expanding in mainland China, where its VONB increased by 36 per cent to US$782 million.

AIA’s three biggest markets in Southeast Asia all reported VONB growth in the first half. Singapore saw the biggest growth at 27 per cent, followed by Thailand and Malaysia at 16 per cent and 14 per cent, respectively. Its other markets in Asia grew by 9 per cent.

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Tens of thousands of Hongkongers rush to buy tickets to shows by mainland China’s Olympians

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3275404/tens-thousands-hongkongers-rush-buy-tickets-shows-mainland-chinas-olympians?utm_source=rss_feed

Tens of thousands of Hongkongers have rushed to snag tickets to performances of mainland China’s Olympians due to visit the city next week.

More than 37,000 residents joined the online queue at 10am on Thursday to secure a spot in the badminton, gymnastics and table tennis shows by the mainland Olympians. It became the longest queue of all performances.

Following closely behind was the swimming and diving demonstrations queue, with more than 34,000 people in line.

Both queues to sports demonstration shows had a waiting time that exceeded two hours.

The gala show, which will be held on August 30, has attracted over 12,000 people to queue at 10am, incurring an estimated waiting time of 55 minutes.

The national team will visit the city from August 29 to 31.

About 5,300 tickets, priced at HK$20 each, will be available for a gala show that begins at 8pm on August 30 and demonstrations by the medallists the following morning.

More to follow …

Paraguay open to China trade deals via Mercosur trade bloc despite Taiwan ties, Pena says

https://www.scmp.com/news/world/americas/article/3275393/paraguay-open-china-trade-deals-mercosur-trade-bloc-despite-taiwan-ties-pena-says?utm_source=rss_feed

Paraguayan President Santiago Pena said on Wednesday that he was “fully open” to trade deals with China via South American trade bloc Mercosur, despite his country’s diplomatic ties with Taiwan.

Paraguay’s long-standing diplomatic support for Taiwan has hindered local farmers’ grains exports to China, which claims sovereignty over the self-governed island.

Paraguay is the last South American country with formal relations with Taiwan, which strongly objects to China’s sovereignty claims.

Mercosur, a customs union also including Brazil, Argentina and Uruguay, has been in talks to finalise a long-awaited trade deal with the European Union, but has also discussed a potential trade deal with China.

“Our position with China is one of total openness,” Pena said of Paraguay’s position within Mercosur, adding that the obstacle was rather China not accepting its recognition of Taiwan.

“We are in favour of advancing trade agreements,” he added in the interview with Reuters.

Mercosur officials held a dialogue with Chinese counterparts on August 12 in Uruguay’s capital.

“I see prudence on Brazil’s side,” Pena said of the possible China agreement, which he emphasised that he supported.

“I think that the most interested is Uruguay and we accompany this effort to have a conversation as a bloc.”

China’s foreign ministry and the Chinese embassy in Uruguay did not immediately reply to a request for comment.

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As China celebrates Deng Xiaoping’s legacy, the country is again at a crossroads

https://www.scmp.com/news/china/politics/article/3275339/china-celebrates-deng-xiaopings-legacy-country-again-crossroads?utm_source=rss_feed

As China commemorates the 120th anniversary of Deng Xiaoping’s birth, the Post examines his legacy across generations. In the first of a three-part series, we look at Deng’s continuing resonance with the ruling Communist Party’s leadership.

Chairman Mao Zedong called him the “steel factory” for his uncompromising resolve. Yet he was also a master of charm – winning the hearts and minds of the American public in one swoop by donning a cowboy hat on the first visit by a Chinese communist leader to the US.

The “chief architect” of the greatest economic liberation programme in history was also the man who demanded that the Communist Party “unwaveringly uphold the dictatorship of the proletariat”, nipping the country’s democracy movement in its bud.

As China celebrates the 120th anniversary of the birth of the late paramount leader Deng Xiaoping, the seemingly contradictory duality of the man and his legacy continue to resonate.

In Chinese culture, 60 years is known as jiazi, representing the full alignment cycle between heaven and earth.

The commemoration of Deng’s 120th birthday on August 22 comes at a most intriguing time. After four decades of spectacular growth thanks to Deng’s reforms, the world is again “standing at a crossroads of history”, as his modern-day successor Xi Jinping put it.

Comparisons between the two men are almost inevitable. Xi, said to be the most powerful Chinese leader since Deng, is often depicted in Western narratives as the “dismantler” of Deng’s reforms – an assertion that Beijing would angrily dismiss as a smear.

Xi, according to various official reports and his own speeches, regards himself as Deng’s true heir and the one to see through the great mission that Deng started – the rejuvenation of China as a great civilisation.

Although the two leaders differed in their strategies and approaches, closer examination reveals many core similarities.

Each of them faced critical moments that would decide the Communist Party’s very survival and reacted by breaking with the conventions and paths set by their predecessors.

Both Deng and Xi embarked on a zealous mission to restore China to its position as a great world power, and they shared a conviction that the Communist Party is indispensable to achieving that goal.

Deng was the first to warn that China must chart its own reform path and not blindly copy the Western model. He sneered at Mikhail Gorbachev’s “perestroika” reforms in the Soviet Union, even as they were widely praised in the West.

“My father thinks Gorbachev is an idiot,” Deng’s younger son, Deng Zhifang, once told a friend.

By dismantling the Communist Party’s power structure, “he [Gorbachev] will lose the power to fix the problems before people kick him out”, the younger Deng recalled his father predicting, ahead of the Soviet Union’s eventual collapse in 1991.

“Deng likes to say that he was groping for the stones as he crossed the river,” wrote Ezra Vogel in his book “But in fact, he had developed strong convictions about getting across that particular river. One was that the Communist Party should be in charge.”

Deng Yuwen, former deputy chief editor of the Central Party School’s Study Times, also called Deng “a diehard communist”.

“He did not want anyone using his reform initiative to damage the party’s rule. He laid down the ‘Four Cardinal Principles’ to safeguard that.”

The cardinal principles required Chinese leaders to adhere to the socialist path, the people’s democratic dictatorship, the party’s leadership, and Mao Zedong’s Thought and Marxism-Leninism principles – the same message that Xi likes to stress.

“The most distinct feature of Comrade Deng’s thoughts and practices is [they start] from reality, from the general trend of the world and from the situation and conditions of China,” said Xi, in a 2014 speech to mark the 110th anniversary of his predecessor’s birth.

“A developing country like China would not rise if its people had no national dignity or the country lost its independence,” Xi said. “We should not belittle ourselves, forget our heritage or betray the motherland.”

Xi upheld Deng’s Four Principles and answered with his own “Four Convictions” – officially translated as the Four Confidences.

These demand that the party’s 99 million members demonstrate full faith in China’s path, its unique political theories and system, and its rich history and culture. The language and terminology used may differ, but the two men spoke with one voice.

However, each of them inherited a China facing drastically different challenges and conditions, and each responded with a unique approach.

When Deng and his colleagues emerged from the aftermath of the Cultural Revolution, the party and the country were on the brink of collapse. The decade-long anarchy had left the party’s structure fragmented and ideologically divided.

Deng realised that his first task was to pull the party out of a quagmire of ideological infighting and shift the focus to economic growth. He opted for collective leadership – a consensus-building mechanism that gave the different factions seats at the table.

Many of the unwritten rules in Chinese politics were formed in the years that followed, including the customary retirement age of 68 for senior leaders and the immunity from prosecution for former top leaders.

These rules provided basic power-sharing and a mutual protection framework that made it possible for the factions to work together.

It was a design born out of pragmatism. Deng and his colleagues realised that factional and ideological differences would lead to little actual result and must be set aside.

If they could not reunite their divided party and refocus minds on economic development, the party’s very survival – along with the People’s Republic of China – would be in doubt.

While Deng was the unquestioned leader, he had the support of other party elders, such as Chen Yun – like Deng, a founding father of the People’s Republic – and other peers. In his book, Vogel called Deng China’s “general manager”.

Deng’s emphasis on pragmatism is best reflected in his speech at the closing of the fifth plenum of the 11th party congress.

“Meetings should be small and short. They should not be held at all unless the participants have prepared … If you don’t have anything to say, save your breath … the only reason to have meetings is to solve problems,” he said.

“There should be collective leadership in settling major issues. But when it comes to particular jobs or tasks, individual responsibility must be clearly defined, and each person should be held responsible.”

The principle of collective leadership was designed to revitalise the party, as well as to prevent any faction from total domination.

While it proved useful, its shortcomings gradually become apparent. The striving for superficial unity eventually led to extreme caution, inertia and a breakdown of party discipline.

Later party chiefs would increasingly struggle to assemble a support team of their own choosing or to carry out reform programmes that would upset entrenched interest groups.

This was most apparent under former president Hu Jintao, who expanded the powerful Politburo Standing Committee’s membership to nine to accommodate conflicting factional demands.

The decision-making body was half-jokingly referred to as the “nine dragons ruling the rainfall”, in reference to an idiom observing that when power is shared, no one is powerful enough to effect a downpour.

With no strong leadership at the top and responsibility spread across the team, party discipline broke down, breeding rampant corruption as well as abuses of power and even insubordination.

Xi responded to the crisis by launching the largest anti-corruption campaign in the party’s history and a drive to recentralise power. In the process, the unwritten rules – such as the exemption from prosecution of former top leaders – were shattered.

While the two leaders opted for opposing strategies, both Deng and Xi were aiming for the same goal – to refocus the party’s minds on the common goal of national rejuvenation.

And Xi, like Deng, is also known for his dislike of “empty talk”, often urging the party’s cadres to “roll up their sleeves and work harder”.

Xi’s move to recentralise power was based on his view that the party was in danger of losing its cohesion and being hijacked by powerful interest groups, in a repeat of Gorbachev’s Soviet Union.

Such concerns have deep roots in Chinese governing philosophy. Han Fei – whose teachings of 2,200 years ago formed the foundation of the Qin empire – said “the key to governing [a vast empire] with pressing issues on all fronts is a strong core”.

Xi cited this quote in a keynote speech to the Politburo Standing Committee on January 15, 2018 – two months before the National People’s Congress approved the amendment to the constitution removing presidential term limits.

Deng’s reforms transformed China in just 30 years – half a jiazi, before heaven and earth could complete one full cycle of alignment – from one of the poorest countries to the world’s second-largest economy.

“If there is one leader to whom most Chinese people express gratitude for improvements in their daily lives, it is Deng Xiaoping,” Vogel wrote.

“Did any other leader in the 20th century do more to improve the lives of so many? Did any other 20th-century leader have such a large and lasting influence on world history?”

Yet the Chinese leader’s unparalleled success also created a host of problems. Towards the end of Vogel’s book – written in 2011, just a year before Xi’s ascension to power – the Harvard professor listed five challenges for Deng’s successors.

They were: to contain corruption; provide universal social security; preserve the environment; maintain the party’s legitimacy to rule; and to redefine and manage the boundaries of freedom. All have been top of the agenda under Xi.

“Things have changed so much … but China still follows the route set by Deng, aiming to achieve rejuvenation by the construction of a unique China, no matter how the party’s narrative put it,” said Victor Gao, a former foreign ministry official and a translator for Deng in the 1980s.

According to Gao, vice-president of the Beijing-based think tank Centre for China and Globalisation, Deng’s “vision and thinking remain relevant today” as the country “faces many challenges on how to open up to the world”.

“It calls for an outstanding leader who can see the big picture clearly and work from the right direction, just like Deng did,” he said.

Additional reporting by Sylvie Zhuang