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• How China became a major policy issue in Philippines’ midterm elections
• China’s central bank, ministries pledge green finance support for dense economic zone
• Indian solar panels face US scrutiny for possible links to China forced labour
• China’s Y-20 transport plane heads to Egypt on Mideast military influence mission
• China says it has ‘no intention’ of breaching any nation’s airspace after Japan claim
• China father, 47, and son both pass key university exam after helping each other study
• China adds 2 new multi-use firefighting planes to emergency fleet
• IBM lay-offs at China R&D teams send shock waves across local tech community
• China’s ‘hidden debt’ drive controls borrowing for municipal infrastructure projects
• South China Sea: US condemns ‘aggressive’ Chinese actions, ‘stands with’ the Philippines
• [Sport] Top-level meeting shows China - and Xi - still a priority for Biden
• Place of pilgrimage: China agency offers US$8 tour of dive queen Quan Hongchan’s hometown
• Jake Sullivan lands in China, first US national security adviser to visit in 8 years
• China’s C919 passenger jet spreads its wings with delivery milestone to 3 carriers
• China’s Xinjiang officials want to build ‘strategic barrier for geopolitical security’
• South China Sea powder keg: trio of China-Philippines clashes in 5 days stokes alarm
• Japan decries Chinese military plane’s ‘totally unacceptable’ airspace incursion
• Chinese military plane reportedly carries out first violation of Japanese airspace
• Why China’s video gaming industry needs more titles like Black Myth: Wukong
• Black Myth: Wukong boom plays into China’s desire to lift demand, economy
• To restore consumer confidence, China must save the property sector
• China’s PLA air and ground forces start live-fire drill near Myanmar border
• [Sport] Canada hits China-made electric cars with 100% tariff
• China’s urban-rural gap is a threat to growth. Is the divide too wide to fix?
• Experts: China“s “Birth-friendly“ Society at Odds with Urbanization Plans

How China became a major policy issue in Philippines’ midterm elections

https://www.scmp.com/opinion/asia-opinion/article/3275938/how-china-became-major-policy-issue-philippines-midterm-elections?utm_source=rss_feed

“[H]eads will roll,” Philippine President Ferdinand Marcos Jnr warned after mayor-turned-fugitive Alice Guo fled the country, evading authorities while facing an arrest warrant over multiple charges related to involvement with criminal syndicates.

Guo’s controversial case came to light following several high-profile hearings by the Philippine Senate which uncovered doubts over her nationality. Philippine law enforcement authorities had earlier linked her to a Chinese online casino, allegedly involved in torture, kidnapping and hacking of government websites.

Guo’s case provoked a national uproar and widespread concern over the potential infiltration of the country’s state institutions by syndicates and spies of Chinese origin. Last month, Marcos announced a blanket ban on Chinese online casinos, otherwise known as Philippine offshore gaming operators (Pogos), accusing them of a “grave abuse and disrespect to our system of laws”.

Pogos, he said, disguised themselves as legitimate entities but in reality ventured into “illicit areas furthest from gaming, such as financial scamming, money laundering, prostitution, human trafficking, kidnapping, brutal torture, even murder”.

Many Chinese citizens, seeking overseas work on false promises, have fallen victim to criminal syndicate groups operating online casinos in the Philippines.

Indonesian authorities detained the sister and another known associate of Guo last week. However, the fugitive ex-mayor’s case has opened a Pandora’s box with major geopolitical ramifications. Ahead of the midterm elections, the Marcos administration and its allies are making China a central policy issue.

Aside from the law and order concerns, they are also seeking to reduce the Philippines’ economic dependence on China while taking a more assertive stance on South China Sea issues amid the festering disputes.

Marcos allies are bent on portraying the Duterte dynasty – which has positioned itself as a major opposition force and has historically enjoyed warm ties with Beijing – as nothing less than China’s proxy and, by extension, a threat to national security.

In the Philippines, as in other democracies, domestic issues consistently top voter’s priority lists. A survey released last month by Pulse Asia showed that 72 per cent of Filipinos said inflation was their biggest concern, followed by raising workers’ pay (44 per cent), reducing poverty (32 per cent), creating jobs (30 per cent) and fighting corruption in government (22 per cent).

The Philippines has been suffering from high inflation for the past two years, a particularly devastating state of affairs in a country where millions live close to the poverty line. This has resulted in a dip in Marcos’ approval and trust ratings, which are well below his predecessors’ at this phase in their presidencies.

The one area where Marcos enjoys widespread public support, including from his former critics in the liberal camp, is foreign policy. In the Pulse Asia survey, the Marcos administration enjoyed a net plus-30 per cent approval rating on “defending the integrity of Philippine territory against foreigners”.

In contrast to his predecessor Rodrigo Duterte, known for his Beijing-friendly foreign policy, Marcos has adopted an uncompromising stance on the Philippines’ sovereign rights and claims. This is not an urgent concern for voters but could have a rallying effect if included in a package of compelling national concerns.

China-related themes have become central to Philippine national discourse. The Duterte administration oversaw the proliferation of Pogos, which precipitated a massive influx of mainland criminal syndicate groups into the country.

Accordingly, the Marcos administration is positioning itself as a restorer of law and order by banning Pogos and cracking down on Chinese criminal groups.

It is de-risking from China on multiple fronts. Manila has tightened visa restrictions on Chinese nationals, leading to a dramatic reduction in tourist arrivals from the mainland. Intelligence services, meanwhile, are tracking down Chinese journalists allegedly acting as spies, most notably Zhang “Steve” Song, the Manila bureau chief for the Wenhui Daily who is accused of infiltrating elite policy and business circles.

Philippine authorities are also confronting China-backed disinformation campaigns favouring the Dutertes and targeting top Filipino officials, including Marcos, ahead of the midterm elections in May 2025.

Crucially, the Philippines is also seeking Western and Japanese investment, positioning itself as a “China-free” producer of critical minerals such as nickel, as well as a potential site for semiconductor production beyond neighbouring Taiwan.

In short, the Marcos administration is leveraging the Philippines’ position as a “frontline state” and a Western-friendly democracy to attract investment from China’s rivals.

Ultimately, the Marcos administration is portraying China as a clear and present danger to vital Philippine interests in the South China Sea, especially following multiple near-collisions between Chinese and Filipino maritime forces in recent months. Home to massive fisheries resources and untapped hydrocarbon reserves, the disputed area is essential to Philippine food and energy security.

Accordingly, Marcos allies are portraying the Dutertes, who have opposed closer security relations with the West, as unpatriotic. Duterte is facing congressional investigations over an alleged “gentleman’s agreement” with Beijing while he was president, while Vice-President Sara Duterte has been criticised for her silence on all major China-related issues.

By including the China issue in a larger package of interrelated economic and social concerns, Marcos and his allies are in a prime position to make foreign policy a major theme in the coming elections, like never before.

China’s central bank, ministries pledge green finance support for dense economic zone

https://www.scmp.com/economy/china-economy/article/3276125/chinas-central-bank-ministries-pledge-green-finance-support-dense-economic-zone?utm_source=rss_feed

The Chinese government rolled out a set of guidelines on Tuesday to support its biggest economic zone as the area pursues its green transition and turns to “higher-quality” growth – priorities shared by the country at large – via multilevel capital markets.

Eligible companies in the sprawling Yangtze River Economic Belt – an area with 21 per cent of China’s surface area but 44 per cent of its gross domestic product – will be encouraged to raise capital via green bonds and equity, according to a directive jointly released by the country’s central bank and seven other ministries. The proceeds would be deployed to improve waste treatment, green tech and pollution control.

The move follows pledges made at last month’s third plenum of the Communist Party’s Central Committee, a major economic conference, to promote green finance. The world’s second-largest economy has frequently cited the need for financial instruments to improve climate resilience and pursue environmentally sustainable growth.

The belt, which covers 11 provinces and cities, was named by the directive as the “main battlefield” for green development, the “main artery” of the dual circulation system and the “main force” in “high-quality economic development”.

Companies in the zone that meet certain requirements – as yet unspecified – will receive support from the central authorities to use multilevel capital markets to raise funds. The guidelines state enterprises can list, refinance, perform mergers and acquisitions, and list on the National Equities Exchange and Quotations system, an over-the-counter market in mainland China known as the “third board”.

Financial institutions and enterprises in the area will be encouraged to issue green bonds in accordance with both domestic and international standards, so as to “facilitate foreign funds to invest in China’s low-carbon transformation”.

Structural monetary policy tools will also be employed to guide financial institutions to increase support for green initiatives, the ministries and central bank said, and carbon emissions data quality will be improved by nurturing “high-level” third-party tabulators.

Financial institutions were urged to back key environmental projects in the zone further, particularly urban waste treatment, pollution control, soil and water protection, climate change mitigation and biodiversity conservation.

Incentive and constraint mechanisms will also be built, with potential to establish carbon accounts for some industries and individuals to improve data efficiency in the management of carbon footprints.

Tuesday’s guidelines came two weeks after the State Council, China’s cabinet, unveiled a plan to make the country’s economy more environmentally friendly, covering major sectors like agriculture, transport and energy.

The plan outlined development of other financial instruments like green insurance, equity and trusts to support economic decarbonisation. It also set the ambitious target of cultivating an environmental protection industry worth 15 trillion yuan (US$2.1 trillion) by 2030.

Indian solar panels face US scrutiny for possible links to China forced labour

https://www.scmp.com/news/asia/south-asia/article/3276133/indian-solar-panels-face-us-scrutiny-possible-links-china-forced-labour?utm_source=rss_feed

US Customs and Border Protection have detained nearly US$43 million in shipments of electronics equipment from India since October under a 2022 law banning goods made with forced labour, according to agency data, representing a new focus for the trade enforcement agency.

While CBP does not specify what types of electronic equipment it has detained, polysilicon, a raw material in solar panels, is identified as a high-priority sector in the Uygur Forced Labor Prevention Act (UFLPA), and solar panels have historically made up most of the stopped shipments in that category, according to industry sources.

The CBP did not immediately respond to a request for comment.

The law bans goods made in China’s Xinjiang region, where Chinese authorities are reported to have established labour camps for ethnic Uygur and other Muslim groups.

China denies any abuses.

No Indian electronics shipments were detained under the UFLPA in previous years.

Nearly a third of the detained Indian electronics shipments were denied, according to CBP. By comparison, just 5.4 per cent of shipments from top US solar component suppliers Malaysia, Vietnam and Thailand were denied entry over that period.

The Indian detentions represent a small share of the US$3 billion in electronics shipments CBP has stopped at the border under the UFLPA in the last two years.

But they are a setback for Indian producers seeking to cast themselves as an alternative for US solar project developers weary of navigating tariffs and UFLPA enforcement delays on panels made by mainly Chinese companies.

“If the solar cells for Indian panels are coming from China, then there is likely a good reason why detentions of Indian products may be increasing,” said Tim Brightbill, a trade lawyer with Wiley Rein LLP. “My sense is that Customs and Border Protection did not realise for a while that many Indian solar panels contained Chinese solar cells, and therefore the UFLPA risks were [and are] high.”

Imports of solar products from India have soared in recent years, hitting US$2.3 billion last year, according to US trade data.

In the second quarter of 2024, India accounted for 11 per cent of US panel imports, more than double its share in the previous quarter, according to S&P Global Market Intelligence.

As recently as 2018, the US was not importing any solar panels from India.

The increased scrutiny of Indian shipments is a reflection of the border agency’s recent efforts to broaden UFLPA enforcement beyond just the biggest China-based solar panel makers, which have replaced their Chinese polysilicon suppliers with sources from the United States and Europe in a bid to avoid their shipments being detained, according to a trade lawyer.

“Indian module manufacturers found an opportunity to import more at a time when the Chinese manufacturers were being held up because of UFLPA,” Richard Mojica, a trade lawyer with Miller & Chevalier in Washington, said.

Waaree Technologies and Adani Enterprises are the top Indian solar suppliers to the US market.

A spokesperson for Adani confirmed that some of its shipments had been detained and that all had been released.

“This outcome reaffirms that our products imported into the US fully comply with UFLPA regulations, reinforcing customer confidence in the quality, reliability and legal adherence of our products and manufacturing,” the spokesperson said.

Waaree did not respond to requests for comment.

China’s Y-20 transport plane heads to Egypt on Mideast military influence mission

https://www.scmp.com/news/china/military/article/3276101/chinas-y-20-transport-plane-heads-egypt-mideast-military-influence-mission?utm_source=rss_feed

China’s Y-20 transport aircraft will make its overseas air show performance debut alongside J-10 jet fighters in Egypt next month as Beijing seeks to expand its military influence in the Middle East and Africa.

The Y-20 will fly nearly 10,000km (6,200 miles) to appear and perform at the first Egypt International Airshow from September 3 to 5.

The aircraft last month delivered Chinese troops to Tanzania in a joint counterterrorism exercise.

The Y-20 and seven J-10 aircraft took off from an unnamed airport in northwestern China on Monday, according to state news agency Xinhua.

It will be the Y-20’s overseas air performance debut and the first appearance in Africa for the J-10 team from the PLA Air Force’s Bayi Aerobatics Team.

China and Egypt confirmed the performance would take place at El Alamein International Airport on the country’s northern coast 160km west of Alexandria.

Wang Mingzhi, a Chinese military specialist, said the long-haul deployment reflected the Chinese air force’s “long-range mobility, delivery capabilities and combat-oriented training level”.

“The transfer range … [is] across many time zones, with rapid changes in temperature and security difficulties. It will test the pilots’ flight ability and their physical endurance, and showcase the People’s Liberation Army Air Force’s ability in long-range manoeuvres, delivery and combat-oriented training,” he said.

The J-10 – also known as the Firebird – is China’s first domestic advanced jet fighter. It is a medium-weight, single-engine jet fighter designed to operate in all weather.

The Y-20, nicknamed the “chubby girl”, is a transport aircraft that can carry out long-distance air transport of goods and personnel, while its Y-20U variant can refuel other Chinese military aircraft.

According to Xinhua, Y-20 pilot Yuan Bo said the crew had streamlined and optimised its cargo while meeting the mission requirements, and had designed specific flying moves for the mission.

As well as taking part in the Tanzanian drill, two Y-20s were spotted deployed in Russia’s far east last month.

In 2022, the Y-20 conducted a mission to send the FK-3 medium-range missile system to Serbia, with a stop in Baku, Azerbaijan.

Earlier this year, air force official Li Shining told state broadcaster CCTV that the aircraft showcased the air force’s “strategic transformation and development”, and would help pursue the goal of “all-domain operations and global reach”.

The PLA Air Force’s high-profile presence in Egypt coincides with the Middle East and North Africa region’s growing interest in buying arms from China, shifting some of their procurement away from traditional Western suppliers.

Before performing in Egypt, the Bayi team conducted similar air shows in both the United Arab Emirates and Saudi Arabia but has not been shown on the African continent.

In 2022, Saudi Arabia signed a US$4 billion arms agreement with China, including deals for armed drones, ballistic missiles and anti-drone laser-based systems, according to Bloomberg.

Beijing sealed a deal with Abu Dhabi the same year for the L-15 advanced trainer jet.

Beyond the Middle East, China’s influence extends into North Africa and the broader African continent

Last year, Egypt reportedly expressed interest in buying the J-10 to diversify its West-dominated suppliers. The country is looking to advance talks that started with China in 2022 over the purchase of around 12 of the latest versions of the J-10.

Cairo has also bought dozens of China’s Wing Loong-1D drones.

Algeria has bought several Chinese corvette ships plus various missiles and drones. In March, Algeria acquired four cutting-edge WJ-700 Falcon UAVs from China.

Along with Israel and Turkey, China has become a leading power in UAV sales on the continent. It is also a major exporter to sub-Saharan Africa of battle tanks and armoured vehicles.

According to the Stockholm International Peace Research Institute, a military think tank, China was the largest arms supplier for sub-Saharan Africa in 2019-23, with a 19 per cent share of the arms imports, narrowly overtaking Russia, the traditional arms seller to the subregion, which accounts for 17 per cent in the same period.

China says it has ‘no intention’ of breaching any nation’s airspace after Japan claim

https://www.scmp.com/news/china/diplomacy/article/3276128/china-says-it-has-no-intention-breaching-any-nations-airspace-after-japan-claim?utm_source=rss_feed

China says it has spoken with Japan and has “no intention” of violating any airspace after Tokyo claimed a People’s Liberation Army reconnaissance plane had made an “utterly unacceptable” incursion.

Chinese foreign ministry spokesman Lin Jian told reporters in Beijing on Tuesday that the two sides had “maintained communication through existing working channels”.

“I’d like to stress that China has no intention of breaching any country’s airspace,” Lin said.

It came after Japan on Monday said a Chinese military Y-9 reconnaissance plane had entered its airspace off the Danjo Islands – an uninhabited archipelago about 160km (100 miles) to the southwest of Nagasaki on the southern island of Kyushu.

The Japanese defence ministry alleged the PLA aircraft had crossed into the East China Sea islands’ territorial airspace – which extends 12 nautical miles from their coast – for about two minutes. It said fighter jets were scrambled in response, but there was no confrontation between the two sides.

Japan’s chief government spokesman Yoshimasa Hayashi called it a “serious violation” of Japanese sovereignty and a threat to its security, and said it was “the first confirmed and announced airspace incursion by a Chinese military aircraft”.

“We refrain from giving a definite answer as to the intended purpose of the Chinese aircraft’s action. However, China’s recent military activities near Japan have a tendency to expand and become increasingly active,” he said.

The Japanese foreign ministry said it had summoned acting Chinese ambassador Shi Yong “to protest extremely severely and strongly request the prevention of a recurrence”.

The fresh escalation in tensions between the two Asian neighbours came a day after talks between their top Asian affairs officials, Liu Jinsong and Hiroyuki Namazu, during which Beijing repeated its “solemn position” on Taiwan, maritime issues and historical accounts.

“Both sides had an exchange of views on China-Japan relations and issues of mutual interest and concern,” according to a statement from the Chinese foreign ministry.

It said they “mainly had an in-depth and constructive communication on properly handling the discharge of Fukushima nuclear-contaminated water into the sea”.

Japan reportedly completed an eighth release of treated radioactive waste water into the Pacific Ocean on Sunday, a year after the clean-up process began at the Fukushima plant that was hit by an earthquake and tsunami in 2011. Three more discharges are expected to follow between now and March next year.

China father, 47, and son both pass key university exam after helping each other study

https://www.scmp.com/news/people-culture/trending-china/article/3276026/china-father-47-and-son-both-pass-key-university-exam-after-helping-each-other-study?utm_source=rss_feed

A father and son in China who took the national university entrance exams together and were accepted by their institutions of choice have wowed many people online.

Liu Aohan, 18, made his family proud when he was accepted into the Future Aerospace Leadership Programme at Beihang University in Beijing, one of the world’s best universities for aerospace engineering.

He scored 625 out of 750 points, and ranked 64 in the science track of gaokao – China’s key university entrance examination – in northwestern China’s Qinghai province.

His father Liu Jianbo, 47, also took the gaokao in the same year.

He scored 454 out of 750 in the arts track, and was accepted to take a business management major at Guangxi Normal University, in southern China’s Guangxi Zhuang autonomous region.

Liu senior began studying with his son when he was in Year 2 of secondary school.

Liu junior had become distracted by games and his grades suffered as a result, so his father gave him a beating, but soon regretted his actions.

He decided to become his son’s study companion to set a good example.

His decision coincided with the Covid-19 pandemic when schooling was done online, so the pair were able to study together at home when Liu senior was not at work.

The younger Liu became the top student in his class from then on.

“My dad is my role model. His study attitude was better than mine,” he said.

What began as a way to encourage his son, soon inspired Liu senior to study for himself.

A management-level member of staff at the local railway, Liu senior said he had long dreamed of going to university, but his family could not afford it.

Despite ranking top in his prefecture in the high school entrance exams, he went to a vocational school instead, and worked right after graduation to financially support his family.

Liu senior said he was better at Chinese while his son was better at mathematics, and they helped each other to improve their grades.

He said he was more proud of his son’s achievements than his own.

Liu’s work in a so-called iron rice bowl job at a state-owned enterprise is considered to be steady with good social benefits. He struggled with his reality while harbouring his dream.

He applied for furlough but this was rejected by his company. Liu senior said he would ask for the university’s permission to study in his spare time.

Liu told Hongxing News that, as a father, his first job was to financially support his son’s studies.

He said he might give up this opportunity, but not his dream. He would consider taking another gaokao next year, or after he retires. He also plans to take a master’s degree.

“There are so many things I need to learn. It is not yet the time to ‘lie flat’,” he said.

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China adds 2 new multi-use firefighting planes to emergency fleet

https://www.scmp.com/news/china/science/article/3276076/china-adds-2-new-multi-use-firefighting-planes-emergency-fleet?utm_source=rss_feed

The Ministry of Emergency Management took delivery of two new aircraft for its fleet on Monday – the first large fixed-wing planes for aerial firefighting in China.

Built by the Aviation Industry Corporation of China, the multi-use aircraft are a variant of the Xian MA60 known as Xinzhou 60 – or Modern Ark 60.

They can carry up to 6 tonnes of water or transport 28 firefighters or 3.7 tonnes of cargo, the ministry said in a statement.

It said the planes could be used for multiple tasks including water drops, fire monitoring, communications command and transport.

The ministry said the aircraft would expand its disaster relief capabilities given that they can operate over long distances and can be used to transport water, workers and cargo. They will be deployed with other aircraft in the emergency rescue fleet including helicopters and unmanned aerial vehicles.

It took AVIC three years to develop the new planes, the ministry said. The aircraft are equipped with a system to observe the fire situation and a precision system to deliver fire retardants, both developed in China.

The ministry noted the home-grown aerodynamic design of the aircraft as well as the design of its pressure tank for water drops.

The MA60 is an improved version of the Xian Y7-200A, which was based on the Soviet-era Antonov An-24, built for rugged conditions with limited ground support and short take-off and landing capability.

State-owned AVIC last month said another firefighting aircraft in development – the AG600 Kunlong – had begun airworthiness certification test flights with the Civil Aviation Administration of China. The large amphibious aircraft, which can scoop and drop water on wildfires, is expected to be certified this year, with deliveries from 2025.

The AG600 Kunlong has about double the capacity of the Xinzhou 60. According to AVIC, it can collect up to 12 tonnes of water in 20 seconds during a firefighting mission. It can also be used to retrieve up to 50 people at sea during a search and rescue mission.

There were 204 wildfires recorded in China in the first half of this year, a record low according to a ministry report in July. But it said the wildfire risk in the north, northeast and southwest of the country remained high.

The ministry said three grassland fires were reported in the first half, all of them in the Inner Mongolia region, in April and May.

In April, five people in southwestern Guizhou province were jailed for up to 18 months for negligence that caused wildfires.

IBM lay-offs at China R&D teams send shock waves across local tech community

https://www.scmp.com/tech/big-tech/article/3276104/ibm-lay-offs-china-rd-teams-send-shock-waves-across-local-tech-community?utm_source=rss_feed

Chinese employees at US computing giant IBM, once considered a cradle of mainland engineers, have expressed dismay over a terse conference call with the company’s American executives on Monday, as the firm known by the nickname Big Blue cuts hundreds of jobs at two local research labs.

The morning town hall, organised for affected workers, had been scheduled to go for half an hour. It ended up lasting only three minutes, according to an internal meeting transcript seen by the South China Morning Post and confirmed by an employee.

During the meeting, US-based executives told staff that IBM had decided to shift some Chinese operations overseas, citing market dynamics and fierce competition in the infrastructure business on the mainland. They did not take any questions.

IBM did not immediately respond to a request for comment on Tuesday. A company representative said on Monday that the firm adapts its operations as needed to best serve its clients, adding that “these changes will not impact our ability to support clients across the Greater China region”.

Over the weekend, China-based IBM workers found themselves blocked from accessing the company’s intranet system, before they were told that the IBM China Development Lab and China Systems Lab were shutting down. Over 1,000 employees are being laid off across Beijing, Shanghai and the northern port city of Dalian, according to reports by local news outlets.

One employee, who spoke on condition of anonymity, said many IBM staff in Beijing braved heavy rain to gather in the office for the meeting on Monday, only to be disappointed by how brief it was.

On the call were Jack Hergenrother, vice-president of global enterprise systems development, Ross Mauri, general manager of IBM Z mainframe computers, and Danny Mace, vice-president of storage software engineering.

Hergenrother encouraged affected workers to arrange private discussions with their respective managers, while Mauri and Mace thanked staff for their contributions, the transcript showed.

The employee in Beijing said he spoke with his manager, who was also laid off. Staff have been offered severance packages based on tenure, plus three months’ salary if they sign the termination agreement before September 13.

Their last day on the job will be October 31.

The closure of IBM’s two China research labs has sent shock waves across the local tech community. For years, the tech giant had been considered one of the most desired employers for the nations’ top computing graduates.

A former employee, who goes by the username “Room e” on social media platform Xiaohongshu, said most of his team members at the China Development Lab were graduates from the country’s top 10 universities in the early 2000s.

However, US companies have been losing their lustre in recent years, as China intensifies its self-reliance campaign and strives to reduce dependence on foreign technologies amid growing geopolitical tensions.

In 2014, state-owned banking and telecoms enterprises – once major customers of IBM, Oracle and EMC (since merged with Dell) – launched a “de-IOE” campaign to replace US products with domestic alternatives.

IBM is the latest multinational tech giant to shed jobs in China. Sweeping lay-offs this year have affected China-based workers in companies from Ericsson and Tesla to Amazon.com and Intel.

IBM’s sales in China have steadily declined in recent years.

In 2023, IBM’s revenue in the country dropped 19.6 per cent compared to a 1.6 per cent rise in revenue across Asia-Pacific, according to the company’s annual report. Sales in China in the six months ended June 30 this year fell 5 per cent, while revenue in Asia-Pacific increased 4.4 per cent, IBM’s financial statement showed.

Additional reporting by Xinmei Shen.

China’s ‘hidden debt’ drive controls borrowing for municipal infrastructure projects

https://www.scmp.com/economy/china-economy/article/3276106/chinas-hidden-debt-drive-controls-borrowing-municipal-infrastructure-projects?utm_source=rss_feed

China’s finance ministry has banned local governments from raising illegal or non-compliant debt for municipal infrastructure projects that yield no or insufficient returns, in a bid to curb so-called hidden debt.

On Monday, the Ministry of Finance, along with five other ministries, revealed they had urged local governments at the end of July to “follow approval procedures”, “ensure money sources” and “strengthen budgetary controls” of infrastructure projects to prevent debt risks.

As part of the rules concerning municipal infrastructure asset management, revenue generated from infrastructure financed by local government special bonds must be prioritised to repay the bonds and cannot be diverted for other uses.

While no official figures have been provided on the level of local hidden debt – comprising mainly local government financing vehicle debts, including loans and bonds – estimates suggest it could be between 30 trillion yuan (US$4.2 trillion) and 50 trillion yuan, compared to China’s gross domestic product of around 126 trillion yuan last year.

In 2018, the Ministry of Finance asked local governments to clean up hidden debt within five to 10 years, which it said at the end of 2022 had shrunk by more than one-third.

In response to the concerns on local debt risks, the finance ministry stressed on Monday that risks were overall “controllable,” with the scale of hidden debt “gradually declining”.

China is seeking to clean up the massive hidden debt piled on local governments, which have been placed under increased pressure due to a prolonged property downturn that slashed the land sales that had been a major source of their revenues.

Fiscal revenues dropped by 2.6 per cent in the first seven months of the year compared to 2023, the finance ministry said, falling short of the full-year growth target of 3.3 per cent.

“To fill this gap, it would mainly rely on a rebound in economic fundamentals, non-tax support, and over-expected issuance of treasury bonds,” said Wu Qiying, a senior macro analyst at GF Securities.

Revenue in the government fund budget fell by 33.6 per cent in July year on year, with income from land use rights sales plummeting by 40.3 per cent.

“In terms of broad fiscal revenues, the sluggish land market is still a drag,” Wu added.

“This trend is unlikely to reverse in August.”

In an article published in the August issue of a Communist Party journal, the finance ministry’s party group pledged to deepen the reform of the fiscal and tax systems to accelerate the establishment of “a fiscal system compatible with Chinese-style modernisation”.

Globally, government debt is also on the rise, with data from the Institute of International Finance showing that it had reached a record high of US$91.4 trillion by the end of March.

South China Sea: US condemns ‘aggressive’ Chinese actions, ‘stands with’ the Philippines

https://www.scmp.com/news/china/military/article/3276088/south-china-sea-us-condemns-aggressive-chinese-actions-stands-philippines?utm_source=rss_feed

The US has lashed out against Chinese activities in the South China Sea, pledging to “stand with” regional allies as repeated clashes between Philippine and Chinese vessels heighten tensions in the vast, disputed waterway.

Rear Admiral Andrew Sugimoto, deputy commander of the US Coast Guard Pacific Area, said the United States “unequivocally” condemned “aggressive” actions such as the ramming of vessels.

“China wants to be seen as a member of the world that has its set of rules and enforces it. But whenever they do things like ramming or water-cannoning unarmed vessels, it does not appear to be so,” Sugimoto said on Tuesday.

He also reiterated Washington’s resolve to team up with allies to counter China in maritime disputes, saying a growing number of countries were willing to work with the US Coast Guard on this.

Sugimoto’s remarks came after Chinese and Philippine ships were involved in their third face-off in a week near the contested Sabina Shoal.

The shoal has emerged as a potential third flashpoint between Beijing and Manila in the South China Sea, after a string of clashes over the past year near the Second Thomas Shoal as well as the Scarborough Shoal – called Huangyan Island by China.

The Sabina and Second Thomas shoals are part of the Spratly Islands, called Nansha Islands by Beijing, which claims most of the South China Sea.

The Philippines, Vietnam and Malaysia are among the rival claimants to the Spratlys.

The Philippines has also accused China of launching flares “dangerously close” to its aircraft patrolling near the Beijing-controlled Scarborough Shoal and Subi Reef on at least two occasions this month.

The repeated face-offs have sparked fears of a wider conflict drawing in the US, a treaty ally of the Philippines.

“We stand together with the Philippines, and we condemn the actions of aggressive individuals that do such things as ram or try to prevent humanitarian supplies from reaching individuals, [or] resupplying their fellow citizens,” Sugimoto said on Tuesday.

Calling on China to “uphold the rules themselves” and “stand and lead by example”, he said: “That’s when the rest of the world will notice that they are, in fact, world leaders and not bullies”.

Beijing has repeatedly blamed the US for provoking the situation in the South China Sea, labelling it as “the biggest disrupter of peace” in the region.

The US has stepped up joint military drills with allies in the South China Sea, including the first such exercise outside the Philippines’ territorial waters. The defence allies have also reiterated freedom of navigation rights in South China Sea waters and airspace.

“We need to be able to send ships freely wherever the oceans are, as that is part of the right of every nation on the planet,” Sugimoto said.

The Chinese coastguard on Monday said it had fended off “illegal intrusions” by Philippine vessels, their third maritime confrontation since August 19.

This came hours after China and the Philippines traded blame over a collision on Sunday near Sabina Shoal, as they did following a similar incident six days before.

Manila alleged “aggressive and dangerous” action from the Chinese side on Sunday, including ramming and using water cannons, against what it said were vessels on a “humanitarian mission” bringing supplies to fishermen in the area.

Weeks before, the two sides reached a deal over resupply missions to a grounded Philippine navy ship at the Second Thomas Shoal, a fiercely contested feature controlled by Manila. But they have failed to agree on some key conditions for the missions.

Shortly after the aerial confrontations near the Scarborough Shoal earlier this month, Manila said the resupply arrangement might be subject to review.

China at the time said it took “necessary countermeasures” after Philippine aircraft flew into its airspace over Subi Reef. The reef is also part of the disputed Spratlys and has been turned into an artificial island by Beijing, which controls the feature.

[Sport] Top-level meeting shows China - and Xi - still a priority for Biden

https://www.bbc.com/news/articles/cg58m308glro

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Place of pilgrimage: China agency offers US$8 tour of dive queen Quan Hongchan’s hometown

https://www.scmp.com/news/people-culture/trending-china/article/3275908/place-pilgrimage-china-agency-offers-us8-tour-dive-queen-quan-hongchans-hometown?utm_source=rss_feed

In the wake of her Olympic triumph, China’s dive queen Quan Hongchan has transformed her hometown into a hot tourist destination, prompting local travel agencies to offer one-day tour packages there.

A local travel agency has launched a one-day tour to Quan’s hometown in Maihe village, Zhanjiang, Guangdong province, southern China, which costs only 58 yuan (US$8).

The tour, which has attracted widespread attention, is designed for visitors aged between 25 and 70 years old. People outside this age range must pay an additional 70 yuan.

Participants will also receive a five-litre electric hot pot cooker as a bonus gift.

A representative of the travel agency told Jiupai News that the tour is designed as a shopping trip, and that the age restriction is designed to ensure that people spend money.

Unlike the so-called “purely leisure-oriented tours”, such tours have lower fees but include several mandated shopping stops within the itinerary.

This allows travel agencies to earn commission from tourists’ purchases, thereby offsetting tour costs.

Since Quan clinched two gold medals at the Paris Olympics, her hometown has seen a surge in popularity, even being dubbed “Olympic Village” and “Champion Village” in travel advertisements.

Another travel company in Maoming, also in Guangdong province, has launched a number of tours to her hometown with prices ranging from a few dozen to several hundred yuan, offering both shopping-focused and pure leisure tours, according to The Paper.

As its popularity grows, Quan’s hometown, once a poor rural village, recently opened its first restaurant run by villagers offering local dishes such as roast suckling pig and white-cut chicken.

Quan Huacai, Quan’s neighbour, once known as “Loss Guy” due to his earlier failures in the beef offal business, decided to revive his venture and is now finding success.

“I’m not losing money now, it’s just more tiring. It takes two people two hours just to cut the beef offal every day, not to mention the other steps,” he said.

Quan Hongchan, now 17, has won three Olympic gold medals, including one from the Tokyo Olympics three years ago.

She claimed victory in the individual 10 metre platform event and, alongside teammate Chen Yuxi, also won gold in the 10 metre synchronised platform in Paris.

She first rose to fame aged just 14 at the 2020 Tokyo Olympics, where she earned three perfect scores out of her five dives and produced minimal splash, earning her the nickname “genius girl”.

She has since become one of China’s most beloved and iconic figures, with news about her consistently trending online.

Tours to her hometown have sparked lively online discussions and piqued the curiosity of many.

“It’s too far from where I am, but if it were closer, I’d definitely go. Only 58 yuan for a whole day – what a bargain!” said one person.

“Fantastic, she’s contributing to the local economy and creating more earning opportunities for villagers,” another said.

“I’d even buy pesticides if Quan Hongchan endorsed them, just for fun. I might even get some for my husband,” another joked, showing her affection for Quan.

However, some concerns have also been raised: “Is it OK to over-commercialise a young girl like this? She should have more time to do what she loves, spend time with her family, and not be kept from returning home,”one online observer said.

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Jake Sullivan lands in China, first US national security adviser to visit in 8 years

https://www.scmp.com/news/china/diplomacy/article/3276072/jake-sullivan-lands-china-first-us-national-security-adviser-visit-8-years?utm_source=rss_feed

US National Security Adviser Jake Sullivan landed in Beijing on Tuesday for a three-day visit amid an intensifying US-China rivalry and unpredictable United States election season.

His visit to China is the first by a White House national security adviser in eight years and is widely seen as laying the groundwork for another summit between US President Joe Biden and his Chinese counterpart Xi Jinping.

The arrival was reported by state broadcaster CCTV, which described his visit as an “important move” to implement consensus reached between the two leaders during their meeting in San Francisco in November.

He was received at the Beijing airport by the Chinese foreign ministry’s Department of North American and Oceanian Affairs director-general Yang Tao and the US ambassador to China, Nicholas Burns.

Sullivan will hold talks with his Chinese counterpart, Wang Yi, during his trip, the fifth meeting between the two since last year. They are expected to discuss multiple sticky bilateral issues from Taiwan to the South China Sea, as well as the US fentanyl crisis and China’s alleged support for Russia’s defence industry with the transfer of dual-use goods amid the Ukraine war – a charge Beijing denies.

“This trip marks the fifth meeting between Wang and Mr Sullivan. The channel between the national security adviser and the director has played an important role in responsibly managing the competition and the tension between our two countries,” US National Security Council spokesman John Kirby told the press on Monday.

Wang is also expected to raise the issue of what China deems America’s “arbitrary measures” in relation to tariffs, export controls and unilateral sanctions imposed, according to a Chinese foreign ministry official, as Washington continues to target China’s hi-tech development and alleged “overcapacity” in manufacturing.

Sullivan’s visit also came as China and the Philippines, a US treaty ally, have increasingly clashed in their disputed territories in the South China Sea. On Monday, Chinese Coast Guard said two Philippine ships “intruded” into its waters off Sabina Shoal, a third face-off between the two sides in a week, following a collision near the same shoal on Sunday.

A similar collision also occurred on August 19, when the US issued a statement condemning China’s “reckless manoeuvres” and reaffirmed its commitment to defend its ally if attacked in the disputed waters.

On Friday, the US sanctioned dozens of Chinese entities and individuals over their alleged roles in “bolstering” Russia’s war in Ukraine as Beijing has been under immense pressure from the West by keeping close ties with Moscow.

Sullivan’s visit to China also came as stakes become higher in the US election season, with polls showing a close race between candidates Vice-President Kamala Harris and former president Donald Trump.

While the Biden administration said Sullivan’s trip should not be tied “too closely” to the election, analysts said the poll in November would be one of the most important issues to dominate the meeting agenda.

Another meeting between Biden and Xi is also likely to be discussed, as many speculate Biden will potentially visit China before he steps down in January. He remains the only US president in decades not to visit China during his term.

More to follow ...

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China’s C919 passenger jet spreads its wings with delivery milestone to 3 carriers

https://www.scmp.com/economy/china-economy/article/3276063/chinas-c919-passenger-jet-spreads-its-wings-delivery-milestone-3-carriers?utm_source=rss_feed

China’s home-grown C919 passenger jet is set to mark a production milestone, with its manufacturer on the verge of delivering the narrowbody aircraft to three major carriers for the first time in the same month in August.

The Commercial Aircraft Corporation of China (Comac) is poised to make a first delivery of the Chinese alternative to the bestselling narrowbody jets by Airbus and Boeing to Air China and China Southern Airlines on Wednesday, on top of having continued to fill orders from China Eastern Airlines.

Air China and China Southern agreed to each buy 100 of the jet in April to be delivered between 2024 and 2031, with the Shanghai-based China Eastern Airlines having previously been the sole customer for the C919.

“The speed with which Comac is delivering the C919 to three customers in one month reflects growing capabilities to tackle production bottlenecks and coordinate with regulators and multiple suppliers and buyers for a quick turnaround between order and delivery,” said Li Hanming, an US-based aviation analyst.

China’s state-owned manufacturer is seeking a foothold in the world’s second-largest aviation market by size at a time cracks appear in the dominance of Western planemakers.

“Expanding production capacity is exigent as the order backlog swells. This is even more important than getting Western certification,” Li added, with Comac said to be optimistic about receiving certification from the European Union aviation regulator.

“If output cannot be ramped up, it will hobble sales and buyers may cancel or downsize orders.”

Comac has already started construction of a second assembly line in Shanghai to deal with the increased demand.

Air China said last week that its first C919 would bear a commemorative registration code of B-919X, and that pilots, cabin crew and maintenance teams were wrapping up three months of operation and safety training at Comac’s headquarters in Shanghai.

The Air China C919 would seat 158 passengers, six less than the seating configuration for China Eastern Airlines and China Southern Airlines, to allow more space and comfort for passengers, Air China said.

China Southern also said it had been working with Comac to prepare its first C919 for operation, with the jet set to fly key routes from Guangzhou to Beijing, Shanghai and Chengdu.

The C919 has flown more than 3,100 flights since it entered service with China Eastern Airlines in May 2023, but Air China and China Southern said they still conducted meticulous checks during manufacturing and test flights.

China Eastern Airlines, meanwhile, has inducted seven jets into service, with 98 on order.

The Shanghai-based Suparna Airlines, a subsidiary of Hainan Airlines, will be the first non-state-owned buyer of the C919, with the first delivery of its 30-unit order scheduled for the fourth quarter.

At least five C919s will also be primed to join GallopAir, a new operator backed by Chinese capital and based in Brunei, that is expected to begin service by the end of the year.

Comac would deliver 150 of the C919 annually in the coming five years, according to the Shanghai-based Airwefly aviation platform.

But the level of output still pales in comparison to Airbus, as the European multinational aerospace corporation churned out 229 A320neo aircraft – the model the C919 aspires to compete against – between January and June.

And despite being marred by crises, US-based Boeing also delivered 137 of its 737s in the first half of the year.

The delivery plan for the C919 also hinges on Comac’s ability to secure continuous imports of engines and other critical parts from Western suppliers, with the hope that commercial deals can continue to be insulated from geopolitical turbulence.

The C919 relies on engines supplied by CFM International, a joint venture between France’s Safran and America’s GE Aerospace, with only parts of the fuselage sourced domestically.

China’s Xinjiang officials want to build ‘strategic barrier for geopolitical security’

https://www.scmp.com/news/china/politics/article/3275990/xinjiang-officials-want-build-strategic-barrier-geopolitical-security?utm_source=rss_feed

Authorities in Xinjiang have vowed to make stability and security their top priority and to turn the far western region into a “strategic barrier” against geopolitical risks, according to official media.

The Xinjiang committee of China’s ruling Communist Party made the pledge in a statement at the end of its annual plenary session – attended by the top party and government officials from the region – on Saturday.

“[We should] make social stability the top priority and improve the system and mechanisms for maintaining national security,” according to the statement published in Xinjiang Daily, the mouthpiece of the regional party committee.

It said Xinjiang should also improve “the legal and work routines for counterterrorism and maintaining stability”, along with public security and stability on the border.

The Xinjiang Uygur autonomous region shares borders with countries including Afghanistan, Kazakhstan, Tajikistan and Kyrgyzstan.

China has been accused of human rights abuses in Xinjiang, including that at least 1 million Uygurs and other Muslim minorities were held in mass internment camps. Beijing has denied the claims, saying the centres were for “vocational training” and that its policies in the region are aimed at cracking down on terrorism and extremism.

In Saturday’s statement, the committee also said it would better support the modernisation of the military, improve mechanisms to fight foreign interference in Xinjiang, and build the region into “a strategic barrier to maintain national geopolitical security” for China.

It called for the sense of identity and community to be strengthened among all ethnic groups, with more efforts needed to publicise, educate, research and interpret the idea of the Chinese nation’s “one common community”.

The party’s regional committee also said the legal framework for governing religious affairs should be improved.

On developing the region, it said oil and gas exploration and development should be accelerated, with more efforts towards clean and efficient use of coal, developing green energy, and exploration of strategic mineral resources.

The committee also urged the regional government to speed up development of a free-trade pilot zone and projects linking to Central Asia.

In addition, the statement echoed a pledge made last week by Yin Bai, who heads the Central Political and Legal Affairs Commission that oversees security and law enforcement in China, to prevent and resist “colour revolutions”.

Yin told state news agency Xinhua that “safeguarding political security” and strengthening national security would be the commission’s top priority. He also stressed the need for efforts to counter terrorism, maintain stability and “fight against separatism and infiltration”.

With China locked in an escalating rivalry with the United States, Beijing is increasingly focused on national security.

An entire section of a policy document released in July after the third plenum – a key party meeting – is devoted to “modernising” national security, which the leadership sees as the “pivotal foundation” for China’s development.

The regional committee on Saturday also approved a decision to expel former Xinjiang deputy security chief Ma Guoqiang from the party, according to Xinjiang Daily. Ma, 51, was placed under investigation for corruption in August last year. He has mostly worked in Xinjiang’s Aksu prefecture, where a dozen officials have been investigated for corruption in recent years.

In March, Dou Wangui – Ma’s former boss in Aksu and vice-chairman of Xinjiang’s political advisory body – was also placed under investigation for graft.

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South China Sea powder keg: trio of China-Philippines clashes in 5 days stokes alarm

https://www.scmp.com/week-asia/politics/article/3276034/south-china-sea-powder-keg-trio-china-philippines-clashes-5-days-stokes-alarm?utm_source=rss_feed

The Philippines has condemned Beijing’s “provocative actions that destabilise regional peace” in the South China Sea, after a series of incidents involving Chinese ships and aircraft targeting Philippine vessels raised fears of a broader conflict in the contested waters.

The latest occurred on Monday, when Manila says 40 Chinese vessels, including six coastguard craft and three navy ships, blocked two Philippine coastguard patrol boats from completing a “lawful humanitarian operation”.

The vessels were en route to deliver supplies, including an ice cream treat to celebrate National Heroes Day, to a Philippine coastguard ship on patrol at Sabina Shoal. But according to coastguard spokesman Jay Tarriela, China’s “excessive use of force” prevented them from carrying out the routine mission.

It was the third such confrontation in five days. On Sunday, Philippine officials reported that at least eight Chinese coastguard ships had swarmed and blocked a Philippine fisheries enforcement vessel, the BRP Datu Sanday, as it sailed from Half Moon Shoal to Sabina Shoal to provide food and fuel to Filipino fishermen.

The Chinese ships blasted the small patrol boat with water cannons, disabling its engines, and reportedly rammed it – all while journalists on board captured the aggression on video.

On Monday, Manila’s National Task Force on the West Philippine Sea called the Chinese actions “unprofessional, aggressive and illegal”, categorically rejecting Beijing’s claims that Filipino personnel had fallen into the sea and been rescued by the Chinese coastguard as “completely unfounded” and “misinformation”.

“The Philippines has never provoked the People’s Republic of China, which in turn has relied on deliberate and international harassment and intimidation,” the task force said. Earlier, the National Maritime Council urged China to halt all provocations, stressing on Sunday that the disputed shoals are well within the Philippines’ exclusive economic zone.

A number of ambassadors also weighed in to express their condemnation on social media. Speaking on behalf of the United States, Manila’s treaty ally, Ambassador MaryKay Carlson affirmed that “the US stands firmly with the Philippines in condemning the PRC [People’s Republic of China] for launching flares at Philippine aircraft operating legally near Scarborough and Subi Reefs”. The European Union’s ambassador to the Philippines, Luc Veron, called the “dangerous manoeuvres” of the Chinese ships “disturbing”, while Japan’s envoy in Manila said Tokyo “opposes any actions which increase tensions and endanger the lives of crews”.

Philippines-based non-governmental group the Atin Ito (This is Ours) Coalition denounced the attack on the BRP Datu Sanday as “despicable” and said “China’s blatant disregard for international law is appalling”.

The latest clash follows reports emerging on Friday of flares being fired from the Chinese-occupied Subi Reef at a Philippine government aircraft being used by the Bureau of Fisheries and Aquatic Resources (BFAR).

The Philippine task force said in a statement that a Chinese fighter jet had deployed flares multiple times at the BFAR plane on August 19, coming as close as 15 meters in a “dangerously close” manoeuvre that “jeopardised the safety of the personnel on board.”

It stressed that the Chinese jet “was not provoked”, in a clear rebuke of any attempts by Beijing to justify the action, and called on China “to immediately cease all provocative and dangerous actions that threaten the safety of Philippine vessels and aircraft engaged in legitimate and regular activities” within the country’s territory and exclusive economic zone.

This was not an isolated incident. Two Chinese air force planes also reportedly dropped flares on August 8 near a Philippine military aircraft patrolling over Scarborough Shoal, an area that China has blockaded to keep out Filipino fishermen.

“China’s flares from Subi Reef were intended to warn the Philippine aircraft away from their military base,” said retired US Air Force colonel Raymond Powell, director of Stanford University’s SeaLight Project and an expert on the region.

He expressed particular concern about the Scarborough Shoal incident, describing it as “an aerial intercept” where “the flares came much closer to the Philippine aircraft”.

Defence chief Gilberto Teodoro acknowledged on Monday the need to “be ready to anticipate, to get used to these kinds of acts from China”, even as he admitted the government has repeatedly condemned them as “illegal” to no avail.

“We have repeatedly said this many times that this is illegal, but they don’t care,” he told reporters, not elaborating on what the government would do beyond filing diplomatic protests.

He also declined to speculate on what scenario would trigger support from the US under the terms of their 1951 Mutual Defence Treaty.

“That is putting the cart before the horse,” he said. “Let us deter an armed attack. That is the more important thing. That is what I’m focused on doing … Let’s make ourselves strong enough so that does not happen.”

Observers offered a clearer analysis of China’s underlying motives. Antonio Carpio, a former supreme court associate justice and maritime rights advocate, told This Week in Asia that Beijing’s actions were part of a concerted effort to enforce its sweeping territorial claims, demarcated by the controversial “10-dash line” that encompasses most of the South China Sea.

“China is implementing the 10-dash line, so that all the waters and resources within the 10-dash line will constitute China’s national territory,” he said. Carpio argued that China’s firing of flares from its artificial military outposts, such as at Subi Reef, “violates the 2002 Declaration of Conduct” that China and Asean member states have pledged to uphold.

He urged the Philippines to take further legal action, recommending the filing of “a second arbitration case to recover damages” over the recent clashes – a reference to the landmark 2016 ruling by the Permanent Court of Arbitration in The Hague that rejected China’s sweeping claims in the South China Sea.

Beijing has steadfastly refused to recognise that decision, leaving the Philippines with limited options to enforce it.

As the war of words and risky military manoeuvres continue, the need for effective deterrence and conflict prevention has never been more pressing. But with China’s growing regional influence and the Philippines’ military disadvantage, the path forward remains fraught with uncertainty and the potential for miscalculation.

Japan decries Chinese military plane’s ‘totally unacceptable’ airspace incursion

https://www.scmp.com/news/asia/east-asia/article/3276052/japan-decries-chinese-military-planes-totally-unacceptable-airspace-incursion?utm_source=rss_feed

Japan on Tuesday slammed what it called the first confirmed incursion by a Chinese military aircraft into its airspace as a “serious violation” of its sovereignty, saying Beijing was becoming “increasingly active”.

China’s growing economic and military clout in the Asia-Pacific region and its assertiveness in territorial disputes – most recently with the Philippines – has rattled the United States and its allies, and Monday’s incident represents a further heightening of tensions.

Japan, Washington’s closest ally in the region, said it scrambled fighter jets after the two-minute incursion from 11:29am on Monday by the Y-9 surveillance aircraft off the Danjo Islands in the East China Sea.

More than 24 hours later China is yet to comment, with US National Security adviser Jake Sullivan due in Beijing later on Tuesday for talks with top diplomat Wang Yi that will include the South China Sea.

Analysts said China was possibly probing Japan’s air defence network, seeking to obtain intelligence and putting pressure on Tokyo as it expands defence cooperation with the US and other countries in the region alarmed by Beijing’s behaviour.

“The violation of our airspace by Chinese military aircraft is not only a serious violation of our sovereignty but also a threat to our security and is totally unacceptable,” Japan’s chief government spokesman Yoshimasa Hayashi told reporters, describing it as “the first confirmed and announced airspace incursion by a Chinese military aircraft”.

“We refrain from giving a definite answer as to the intended purpose of the Chinese aircraft’s action. However, China’s recent military activities near Japan have a tendency to expand and become increasingly active,” he said.

The uninhabited Danjo Islands are a group of small islets also located in the East China Sea off Japan’s southern Nagasaki region, and are not disputed territory.

Japanese and Chinese vessels have been involved in tense incidents in other areas, in particular the remote Diaoyu Islands, located in the East China Sea and claimed by Beijing, which Tokyo calls the Senkakus.

Tokyo has reported the presence of Chinese coastguard vessels, a naval ship and even a nuclear-powered submarine in the area, and there have been a series of confrontations between Japanese coastguard vessels and Chinese fishing boats.

Two non-military aircraft from China – a propeller-powered China State Oceanic Administration plane and a small coastguard drone – forayed into airspace near the Diaoyu Islands in 2012 and 2017, according to Japanese broadcaster NHK.

Japan, staunchly pacifist for decades, has ramped up defence spending with US encouragement, moving to acquire “counterstrike” capabilities and easing rules on arms exports.

Tokyo is also providing funding and equipment such as patrol vessels to countries across the region and agreed in July on a deal with the Philippines allowing troop deployments on each other’s soil.

Yee Kuang Heng, a professor at the University of Tokyo, said the Y-9 in Monday’s incident “was likely probing Japan’s air defence network, collecting electronic intel such as Japan’s radar signals and coverage”.

Naoko Aoki, a political scientist at the RAND think tank, said China may be seeking “to pressure Japan as Japan continues to try to both hedge against and engage with China to balance its security concerns with economic interests”.

“The area this happened could be of significance. China claims control over a large area of the continental shelf in the East China Sea, and China may be making a point, challenging Japan’s delineation method,” she said.

Additional reporting by Reuters

Chinese military plane reportedly carries out first violation of Japanese airspace

https://www.theguardian.com/world/article/2024/aug/27/chinese-military-spy-plane-first-japan-airspace-violation

Japan scrambled fighter jets after a Chinese military aircraft “violated” its airspace in a further escalation of regional tensions, with local media reporting it as the first such move by a Chinese military plane.

The incursion into Japanese airspace was made by a Y-9 surveillance aircraft at 11.29am on Monday and lasted two minutes.

Japan’s defence ministry said the aircraft “violated the territorial airspace off the Danjo islands in Nagasaki prefecture”, prompting Japan to deploy “fighter jets on an emergency basis”.

It said steps such as “issuing warnings” to the aircraft were taken. Public broadcaster NHK reported that no weapons, such as flare guns, were used as an alert.

The defence ministry released a photograph of what it said was the plane.

Deputy foreign minister Masataka Okano summoned China’s acting ambassador late on Monday to lodge a “firm protest”, and called for measures against a recurrence, the foreign ministry said in a statement.

Interactive

The Chinese diplomat said in response that the matter would be reported to Beijing, the ministry said. There was no immediate official comment from Beijing.

Two previous incursions were by non-military aircraft, Japanese public broadcaster NHK reported. A propeller-powered plane and a small drone went into airspace near the disputed Senkaku islands in 2012 and 2017.

Chinese vessels regularly enter waters near the Senkakus, with Japan scrambling self-defence force jets in response. The territories were in the news again recently after the Japanese coastguard rescued a Mexican man who had become stranded on one of the islands after leaving the island of Yonaguni in a canoe in an apparent attempt to cross to Taiwan, 100km away.

Yee Kuang Heng, a professor at the University of Tokyo, said the Y-9 in Monday’s incident “was likely probing Japan’s air defence network, collecting electronic intel such as Japan’s radar signals and coverage”.

China’s growing economic and military clout in the Asia-Pacific region and its assertiveness in territorial disputes – in particular with Taiwan – has alarmed the United States and its allies.

Japan, staunchly pacifist for decades, has ramped up defence spending with US encouragement, moving to acquire “counter-strike” capabilities and easing rules on arms exports.

Tokyo is also providing funding and equipment such as patrol vessels to countries across the region and agreed in July on a deal with the Philippines allowing troop deployments on each other’s soil.

Japan and South Korea have also moved to bury historical tensions. Tokyo is part of the Quad alliance with the US, Australia and India, a grouping seen as a bulwark against Beijing.

Japanese and Chinese vessels have been involved in tense incidents in disputed areas, in particular the Senkaku islands in the East China Sea known by Beijing as the Diaoyus.

The remote chain has fuelled diplomatic tensions and been the scene of confrontations between Japanese coastguard vessels and Chinese fishing boats.

Tokyo has reported the presence of Chinese coastguard vessels, a naval ship and even a nuclear-powered submarine, in the area.

The Danjo Islands, the site of the latest incident, are a group of small islets also located in the East China Sea off Japan’s southern Nagasaki region.

US national security adviser Jake Sullivan is due to visit Beijing for three days from Tuesday and will meet China’s foreign minister Wang Yi in a bid to manage bilateral tensions ahead of US elections in November.

Why China’s video gaming industry needs more titles like Black Myth: Wukong

https://www.scmp.com/opinion/china-opinion/article/3275939/why-chinas-video-gaming-industry-needs-more-titles-black-myth-wukong?utm_source=rss_feed

China has long had an uneasy relationship with video games.

On the one hand, the video gaming industry has been the subject of scrutiny by authorities – just three years ago, an official newspaper had accused the sector of churning out “spiritual opium” for Chinese youth. On the other hand, a boom in the industry in recent years has made games a lucrative business.

But that tension magically dissolved with the arrival of Black Myth: Wukong, probably the most successful computer game ever made in China. The so-called AAA title, which took “a lot of time, a lot of money and a lot of resources” to make, has not only been a huge success commercially, but also politically.

Over 10 million copies of the game have been sold since its launch on August 20, paying developers and investors handsome returns. But the biggest win is on the political side, as state-run media outlets shower the title with more praise than any other video game has ever received in the country.

The government has many reasons to endorse Wukong. The game is, first of all, totally Chinese. Its plot is adapted from Journey to the West, one of the four greatest works of Chinese classic literature. Its central protagonist, the Monkey King, is a household name in the country. The game contains images of real Chinese temples and relics, and plays Chinese folk music in the background.

For many players, the game is an unprecedented digital masterpiece that is steeped in Chinese culture. Its popularity among overseas players has fanned hopes that the game could become a powerful tool for boosting China’s soft power on the global stage.

Wukong has broken long-standing norms in the domestic game industry.

China’s hard-to-please censors, for example, seem to have tolerated many of the game’s violent and dark images, from blood pools to headless monks, to preserve the game’s unique feel. And in a country where video gaming can be considered an evil – one of the rumoured “sins” of Sun Zhengcai, a former party secretary of Chongqing who is serving a life sentence, was being addicted to a popular mobile game – Wukong has not only been tolerated, but embraced.

Chinese social media is abound with video clips showing fathers getting help from their teenage children to defeat the game’s bosses, even though these appear to be contradictory to mainland regulations limiting children under 18 to playing video games for three hours a week from Friday to Sunday.

The significance of Wukong’s success is that it has elevated video gaming to the status it deserves. It has greatly boosted the morale of China’s gaming industry, as Wukong has shown them the possibility that creativity can be rewarded, both financially and politically. This is a luxury that was once out of reach for most of the country’s video gaming industry talent. For many years, China’s game developers and entrepreneurs were regarded as morally questionable.

Still, it remains to be seen whether the political capital earned by Wukong can translate into meaningful relaxations of government control over the gaming industry. China continues to maintain a rigid licensing and censorship mechanism for games, which creates huge uncertainty for studios, particularly for big productions like Wukong.

Wukong received its licence in February this year. Who knows what would have happened if it did not get the approval in time?

For the Chinese video gaming industry, Wukong is a belated beacon of hope. The market is reaching, if not already reached, its peak due to the shrinking youth population and weak consumer spending. Big titles like Wukong, which usually require many dedicated hours to play, are going out of fashion, with gamers choosing to spend more time and money on smartphone titles.

For all these reasons, the success of Wukong is worth celebrating. But let’s not forget, China’s gaming industry still needs more titles like Wukong to flourish.

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Black Myth: Wukong boom plays into China’s desire to lift demand, economy

https://www.scmp.com/economy/economic-indicators/article/3275967/black-myth-wukong-boom-plays-chinas-desire-lift-demand-economy?utm_source=rss_feed

China’s blockbuster video game Black Myth: Wukong is driving a wave of economic activities across multiple sectors, creating a “Wukong economy” from tourism to computer accessories amid soft domestic demand.

The success of China’s first triple-A premium game, based on the literary figure Monkey King from the 16th-century Chinese novel Journey to the West, has led to a travel boom in parts of China, increased demand for gaming hardware upgrades and a surge in spending on drinks and wellness services, according to local authorities and businesses.

An overnight sensation since it was released last week, the 3D role-playing game came as consumer spending is increasingly regarded as the key to revving up the engine of the world’s second-largest economy amid subdued external demand and a property market slump.

As of Monday afternoon, sales of Black Myth, which has been developed by Tencent Holdings-backed start-up studio Game Science, topped 15.4 million copies, with revenue from the title on video gaming platform Steam totalling over US$737 million, according to market research company Video Game Insights.

Calling Black Myth a “good-looking and fun-to-play” game, professor Shi Lei from Fudan University’s School of Economics said it represented a cross-cultural demand hotspot on an international scale.

Its success “offers valuable insights into how China should seek and expand new areas, models, and hotspots in cultural consumption”, he said.

The Department of Culture and Tourism in Shanxi province, where most of the locations and set pieces featured in the game are located, released a video last week that showcased the real-world attractions in response to a surge in “Wukong travel”.

In its “Travel Shanxi with Wukong” campaign launched on Thursday, it vowed to introduce themed travel routes, cultural products and events centred around the game.

The game meticulously recreates numerous Chinese architectural marvels, from polychrome Buddha statues to intricate roof decorations, fuelling a growing interest in Shanxi’s historical sites.

According to data from Chinese shopping platform Meituan, on August 20 alone, the popularity of Shanxi’s tourist attractions surged by 156 per cent, with game locations such as Yungang Grottoes, Yingxian Wooden Pagoda and Guanque Tower top destinations.

As external demand has slipped and the property market collapsed, China has been pinning its hopes on consumer spending to pick up the slack.

Retail sales of consumer goods, a gauge of household spending, increased by just 2.7 per cent from a year ago in July, although it was faster than June’s 2 per cent growth and better than a consensus forecast by Bloomberg.

In the first seven months of the year, retail sales rose by 3.5 per cent from the same period last year.

Yin Zhenxing, director of the Jade Emperor Temple Polychrome Sculpture Museum in Shanxi province, said the game’s public testing and promotional activities had led to record-breaking visitor numbers, with over 50,000 in just six months.

“Around 40 per cent of these tourists learned about the site through the game,” Yin said, according to Chinese media outlet Yicai.

George Li, a senior engineer and shareholder of a game company in Shenzhen, said Black Myth had become popular because it was the first successful product to combine China’s traditional culture with the international technology engines.

Its impressive sales on global gaming platforms “certainly demonstrates the influence of China’s so-called ‘soft power’ and the role of cultural output”, he added.

And due to the game’s high requirement for hardware, demand for consoles and other accessories has also risen, according to Li Xiang, a store owner in a computer and electronics market in the southern city of Guangzhou.

Most consumers choose the 4070 super graphics card, which brings the cost of a PC to around 12,000 yuan (US$1,684), although the hardware is in short supply, he said.

Stocks of Sony’s PlayStation 5 (PS5) console are also widely out of stock on major e-commerce platforms in China, Li added.

“We had about a dozen units in stock, and soon sold out the first day of the game’s release,” he said.

On Idle Fish, China’s leading marketplace for second-hand goods, many sellers highlighted “playable with Black Myth” when selling used PS5s, with prices ranging from around 1,300 yuan to 3,000 yuan.

Last week, Luckin Coffee also launched a special edition Cloud Riding Americano in collaboration with Black Myth, priced at 11.02 yuan (US$1.5) per cup after discount.

It marked the first time Luckin had partnered with a gaming partner to release a product, aligning with its strategy of leveraging collaborations to maintain brand visibility.

According to a report by live-streaming platform Kuaishou, where the drink was introduced during a session on Wednesday, orders via the platform had skyrocketed by more than 125 per cent per day.

In addition to food and beverage, the game has also made its way into wellness services.

Several bathhouses, including Beijing’s After Spa, have incorporated Black Myth into their offerings, according to digital news app Economic View.

Most of the guests in the spa’s game area were playing the game, according to a video report, while its manager, a man surnamed Yu, said he was preparing a mini-guide to help customers.

To restore consumer confidence, China must save the property sector

https://www.scmp.com/opinion/china-opinion/article/3275640/restore-consumer-confidence-china-must-save-property-sector?utm_source=rss_feed

Since the middle of last year, it was evident that the Chinese economy faced two major risks. The first was that deflationary expectations would depress private spending and investment. In a deflationary environment, households are less likely to spend on items financed by borrowing, while firms cut back on hiring and investing in anticipation of wages and other costs falling.

This keeps credit demand weak and renders lower interest rates less effective in boosting domestic demand. The second major risk was that property prices would continue to decline, undermining consumer confidence and spending.

The economic data for July shows that both risks have materialised and indicate that the economy’s growth momentum might be faltering. Three indicators were especially worrying.

The first was that annual gross domestic product (GDP) growth in July slowed to 4 per cent. This came after it had already slowed to 4.7 per cent in the second quarter of the year.

Second, private investment in the first seven months of the year registered zero growth – indicating a lack of investor confidence. While industrial output increased by 5.1 per cent in July compared to a year ago and fixed-asset investment was up 3.6 per cent, these increases were lower than expected and also lower than in the first half of the year.

Third, while consumer prices edged up slightly, producer prices remained firmly in deflationary territory and have been since October 2022.

With growth in much of the world likely to slow in the coming months, China cannot look to exports to drive a recovery. Instead, to achieve its growth target of around 5 per cent for 2024, it has to rely on domestic demand. This suggests a fiscal stimulus aimed at boosting household consumption in the short term, as well as reforms to the hukou household registration system and improvements to social security to reduce savings and increase consumption as a share of GDP over the long term.

As for the property debt crisis, the Chinese authorities should take a leaf from the United States’ Troubled Assets Relief Program (TARP) launched at the height of the global financial crisis in 2009. The programme was a vehicle for the US Treasury to inject US$426.4 billion in systemically important financial institutions in return for preferred shares. The Treasury eventually recouped US$441.7 billion when it disposed of those shares.

TARP not only recapitalised the banks that received the equity injections, it also restored confidence in the financial system and laid the foundations for a broader economic recovery. By 2010, the US economy was growing at a healthy clip again.

By contrast, China’s property debt crisis shows no signs of abating. Property investments fell by 10.2 per cent in July compared to a year ago, after falling by 10.1 per cent in the first half of the year.

A property rescue plan launched in May has also produced disappointing results. The latest figures from the People’s Bank of China show commercial banks have lent only 24.7 billion yuan (US$3.47 billion) under the scheme, far short of the targeted 500 billion yuan of credit to support local governments to buy unsold properties.

It is hardly surprising that the Chinese rescue plan isn’t working. First, the size of the rescue fund is too small relative to the size of the problem. Goldman Sachs has estimated that the government would need to spend 7.7 trillion yuan, buying housing inventory at half the market price.

Second, the design of the plan is also flawed. The 300 billion yuan fund provides only 60 per cent of loans; commercial banks must still cough up 40 per cent. If the loans turn bad, banks would still bear a sizeable share of the losses. This explains the reticence on the part of banks.

Third, most local governments are heavily indebted. It was unlikely that there would be strong credit demand from them to purchase housing units in an environment of (still) falling property prices.

Above all, the reason TARP worked was that it was not used to purchase troubled assets but, rather, to inject equity into troubled financial institutions. The lesson for the Chinese authorities is that instead of squandering billions of dollars buying unsold properties, they should be injecting capital into systemically important institutions.

One argument against something like TARP in China is that it is simply far too expensive. The US Treasury financed TARP with government debt. With interest rates as low as they are in China today, it is incumbent on Beijing to borrow and inject capital in China’s beleaguered real estate companies, local government enterprises and other systemically important entities.

China’s persistent failure to end the property slump is not only hurting the parts of the economy that are directly linked to the real estate industry, it is also holding back a wider economic recovery. Chinese consumer spending in particular is suppressed as real estate constitutes about 60 per cent of household wealth in China. Without property prices stabilising, it is hard to imagine the economy recovering soon.

The Chinese authorities have little choice but to consider a TARP solution, even if it is unpopular. TARP was justified on the grounds that “to save Main Street, we have to save Wall Street”. In China, it is becoming increasingly clear that “to save ordinary folks, we have to save the real estate sector”.

China’s PLA air and ground forces start live-fire drill near Myanmar border

https://www.scmp.com/news/china/military/article/3276031/chinas-pla-air-and-ground-forces-start-live-fire-drill-near-myanmar-border?utm_source=rss_feed

China’s People’s Liberation Army started a three-day live-fire exercise on Tuesday, involving ground and air forces on the Chinese side of the country’s border with Myanmar.

The drill aims to test reconnaissance, early warning, area control and firepower abilities, according to a statement from Senior Colonel Tian Junli, spokesman for the PLA’s Southern Theatre Command, on its official WeChat account.

“The units are always prepared to respond to any sudden situations, ensuring the protection of national sovereignty, border stability, and the safety of people’s lives and property,” he added.

The live-fire drill, which will run until Thursday, was announced on Monday by the PLA and the provincial government of Yunnan in southwest China which shares a 2,000km (1,240 miles) border with Myanmar.

The exercise comes amid escalating fighting on multiple fronts within Myanmar, where the military government extended a state of emergency for another six months at the end of July to try and maintain its grip on power.

The drill zones include the city of Ruili, near the townships of Huyu and Wanding, Zhenkang county near Mengdui township, as well as the autonomous county of Gengma Dai and Wa near Mengding township.

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[Sport] Canada hits China-made electric cars with 100% tariff

https://www.bbc.com/news/articles/cm2n091v4m5o

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China’s urban-rural gap is a threat to growth. Is the divide too wide to fix?

https://www.scmp.com/news/china/politics/article/3275890/chinas-urban-rural-gap-threat-growth-divide-too-wide-fix?utm_source=rss_feed

Zheng Yajun, a mainland-born PhD graduate of the University of Hong Kong, knows from personal experience how difficult it is to break through China’s urban-rural divide.

Raised and educated in a remote small town in the northwestern province of Gansu, Zheng sat for the national college entrance examination twice before she was admitted to Shanghai’s prestigious Fudan University in 2009.

Zheng did not find life easy at Fudan, where she struggled to understand her instructors and fellow classmates from big cities. Many of her classmates from less developed regions had a similar experience, she said.

“In my first year of university, I couldn’t understand why – although I had worked hard since childhood and never wasted a day – I still looked so bad compared to other students [from big cities],” she said in a widely circulated interview last year.

She managed to survive the fierce competition. After her graduation from Fudan, she expanded her master’s thesis on the gap between urban and rural students at top universities in China, and her findings were published early last year.

Zheng’s book, which discusses class differences from a sociological perspective, is one of the most prominent of several works on similar topics published in recent years in China, sparking widespread media coverage and public debate.

These discussions all point to the same question: are class divisions and the rural-urban divide irreparable in today’s China?

The Communist Party leadership is aware that if the urban-rural divide continues to widen, China’s sustainable growth could be jeopardised.

At a key plenary session in 2013, party leaders pointed out that “the dual structure of urban and rural areas is the main obstacle to the integration of urban and rural development”.

Six years later, at another plenum, party leadership proposed to “continue to promote the integrated development of compulsory education in urban and rural areas”.

The problem was again discussed among top leaders of the Communist Party last month, when they called for actions to narrow the gap during the third plenary session of the decision-making Central Committee.

Observers said while Beijing was aware of its gravity, resolving the problem was no easy task, especially in education.

In China, all children are required to complete nine years of compulsory education, including primary and junior high school.

But scholars have pointed out that the deficiencies in China’s rural education start when students are very young, and if the rural-urban divide persists, the world’s second-biggest economy, which is already slumping, will face a serious human capital crisis.

Scott Rozelle, faculty co-director of the Stanford Centre on China’s Economy and Institutions, said that low- and middle-income labour in rural areas “could be a major long-term obstacle to China’s sustainable economic growth”.

This is because a lack of skills has made it difficult for rural workers to compete in the urban labour market.

“Children attending rural schools have difficulty acquiring the academic skills needed for highly skilled jobs,” Rozelle said.

According to research by Rozelle, 40 to 50 per cent of rural children have delays in cognitive development, which can lead to difficulties in learning maths, science and languages.

“The average level of education of the entire workforce in China (aged 18 to 65) is slightly lower by international standards, almost entirely due to the lower level of education of the rural population. A significant proportion of rural workers do not have a high school diploma,” Rozelle said.

He added that if Chinese workers find it difficult to move from low-skilled to high-skilled jobs, “it could hinder China’s transition to a high-income, high-skilled economy”.

Beijing announced in 2021 that it had achieved success in eliminating extreme poverty, and President Xi Jinping hailed the lifting of 850 million people out of poverty as an “unprecedented achievement” unmatched by any country in modern history.

But Rozelle said China’s “policy focus needs to shift to addressing the challenges faced by hundreds of millions of low-income rural Chinese”.

According to the 2021 national census, the population living in rural areas stood at 509.79 million, accounting for 36.11 per cent of China’s total population.

Following the conclusion of the third plenum last month, party leaders announced an action plan for the next five years to support rural development in agriculture, housing and for migrant workers.

The plenum’s decisions hinted that some policies seen as contributing to the rural-urban divide might ease, including the much-criticised household registration system, or hukou, which restricts the movement of people from rural to urban areas where a residency often means better social welfare, medical care and education for children.

Zheng Linyi, a researcher with the China Academy for Rural Development at Zhejiang University, said some measures included in the action plan would create conditions for residents to move more freely between rural and urban areas and promote the “integrated development” of cities and the countryside.

He said the income gap between urban and rural areas in China had narrowed in the past decade, but it would be more difficult to achieve the reform goal “if there are still huge gaps in public services and infrastructure because of the imbalance of urban and rural development”.

Zheng said the education gap was a key manifestation of the urban-rural divide.

He added that if China’s population declines in the coming decades, as most demographers have predicted, mergers of some rural schools would become inevitable, and this means more rural students would have to travel longer distances for school, creating “an increased burden on farmers”.

Yuan Changgeng, an anthropologist at Yunnan University, warned that public awareness was still lacking in the discussion of the rural-urban divide.

Public discussions in recent years about the disadvantages of rural students have been dominated by “middle-class and intellectual circles”, Yuan said.

“This kind of social discussion is still small-scale,” Yuan said, adding that people from small towns or rural areas do not have enough of a voice.

Settling in the city, becoming a member of the middle class and enjoying a better life are long-held aspirations of many people from less-developed regions, especially rural areas. These aspirations have been strongly supported by nearly four decades of rapid economic growth in China.

For many decades, and especially after the reform and opening process kicked off by Deng Xiaoping, Chinese society has encouraged individual endeavours, and many people believe that hard work can lead to social mobility. The highly competitive university entrance exam system, known as the gaokao, is at the heart of this belief.

But HKU’s Zheng said things have changed. For many students from less developed regions, especially rural areas, it has become increasingly difficult to enter the middle class despite individual efforts.

She interviewed 62 students from Beijing’s Tsinghua University and Shanghai’s Fudan University and found that the differences in their life choices at university and after graduation were greatly affected by their background.

Students from big cities have a better understanding of how to survive at elite universities and are able to plan their careers in advance, and it is easier for them to find an “elite” job after graduation. Students from rural areas, however, are at a disadvantage in this game.

The elite university students interviewed by Zheng are already at the top of the rural student pyramid, while the situation seems even more acute for the vast number of students at the bottom, who are largely invisible.

According to her research, rural graduates from top universities still achieved social mobility compared to their parents, but they fell behind their urban counterparts after graduation.

Yuan, who has long studied social issues in China, said the belief that success in the gaokao could lead to social mobility might have been shaken.

Yuan grew up in a county in the eastern province of Shandong. He said that when he was in high school more than 20 years ago, most of his classmates were hard-working rural students and “their efforts were rewarded compared to the living conditions of their parents’ generation”.

But Yuan said that now some of his students are convinced they will have limited achievements, reflecting social attitudes that are different from those of their parents who came of age in the 1980s, after the gaokao had been restored following the end of the Cultural Revolution and at a time when people were generally optimistic about the future.

According to Yuan, another problem was that many people “refused to question the fairness of the gaokao”.

“As long as you have a basic understanding of China’s education system, you know that it is not the final examination that determines the results, but the years of preparations,” he said, adding that the huge rural-urban divide had made these preparations “not a fair game”.

Big Data China, a collaboration between the Washington-based think tank Centre for Strategic and International Studies and Stanford University, published an analysis last month showing how Chinese people’s beliefs about personal effort and inequality had changed based on surveys conducted over the past 20 years.

Drawing on work by Rozelle and Martin Whyte, a professor emeritus of sociology at Harvard, the report found that between 2004 and 2014, respondents believed that “lack of ability, “low education” and “lack of effort” were the three most important factors explaining poverty in China.

But by 2023, “unequal opportunity” had become the top reason respondents cited for why people were poor, while “an unfair economic system” ranked third, with only “low education” remaining in the top three.

Similarly, when asked why people became rich in China, the top three factors chosen in 2009 were “ability and talent”, “hard work” and “good education”. But as of last year, the top three factors were “having good connections”, “grew up in a rich family” and “better opportunities”.

In addition, the share of people who agreed with the statement “in our country, effort is always rewarded” fell from 62 to 28 per cent over the past two decades.

The researchers said while these changes were “shaped by the excessively strict policies implemented to control the spread of the Covid-19 virus over the course of 2022”, they actually echoed sentiments that had already been trending in Chinese society in previous years.

The idea of “lying flat” or – doing the bare minimum to get through hard times, and doing nothing except what is absolutely necessary to survive – has become popular among young people.

This means that some people have become reluctant to study hard, join the brutal competition for jobs, buy a house or start a family.

In 2021, the official censors removed much of the online discussion around lying flat after realising that the idea, if it became widespread, could affect economic development.

The Big Data China authors said the trends “point to an overall challenge for the Chinese government in the coming years, as it works to rebuild confidence in the economy’s ability to provide opportunities for all and develop a revised social contract acceptable to the populace”.

They added that if the government introduced “the right kind of policies” to promote economic growth, “it could generate a reduction in perceptions of inequity and unfairness and greater popular optimism about the future”.

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Experts: China“s “Birth-friendly“ Society at Odds with Urbanization Plans

https://learningenglish.voanews.com/a/experts-china-s-birth-friendly-society-at-odds-with-urbanization-plans/7754054.html

Mary Meng, a busy worker at a Chinese technology company in Shanghai, says she cannot imagine having a second child.

"The work pressure is such that you don't even have any time to spend with your child," she said. "How can I think about taking care of two children? I have no idea."

Urban residents in many places might agree with Meng's statement. But researchers say the speed of population decrease and aging in China means the government should consider with more urgency the effect of this fast-moving, costly city life on birth rates.

At a recent top political gathering, China announced an effort to build a "birth-friendly society." It seeks to establish measures long-called for by population experts, such as lowering childcare and education costs.

But, the same experts are concerned that China’s new effort also promises to try to get more people into urban areas.

 

The plan aims to increase housing demand to support the property sector. It also aims for economic growth through increased productivity and consumption.

Urban residents generally produce and buy higher value-added goods and services than people in rural areas.

But critics say the government’s urbanization plan overlooks basic ideas about how populations operate in different places. In the cities, people have fewer children due to high housing costs, limited space, costly education, and because they spend most of their day at work.

Infertility rates among couples in China have risen from 2 percent in the 1980s to 18 percent. The international rate is around 15 percent. Doctors blame China’s infertility rise partly on stress related to urban jobs and industrial pollution.

China's top economic planner says recent data shows the 2020 fertility rate was 1.54 in China's rural areas. The nationwide rate was lower at 1.3.

The data also showed Shanghai's fertility rate in 2023 was 0.6. The national rate was 1.1.

To have a stable population, experts say countries need fertility rates of about 2.1.

Yi Fuxian is a doctor and top scientist with the School of Public Health at the University of Wisconsin-Madison in the United States. He says Chinese officials are "foolishly" driving young people to what he called “the most birth-unfriendly big cities.” This, he argues, will lead to continued decreases in fertility and worsen China’s aging crisis.

The expert said, "The suppression of fertility rates by population density is a biological law."

There is evidence to support this argument already in East Asia. Japan, South Korea and Taiwan all urbanized and industrialized faster than most other economies following World War Two. They also have the lowest fertility rates worldwide.

While China's birth rates are also very low after many years of a strict one-child policy, not all is lost.

At 65 percent, its urbanization rate is lower than the 80 to 90 percent rates in Japan or South Korea. This reality could give China ways to make valuable changes, population experts say.

Improving rural living standards with better public services or more liberal land rights would support long-term economic growth better than urbanization, researchers say.

"The population size is always a multiplier" in the economy, said Samir KC of the Asian Demographic Research Institute at Shanghai University.

Poppy Yu, 21, who works at a film production company in Beijing six to seven days a week, wants no children.

"I don’t have the money or energy," Yu said.

China's "birth-friendly society" effort includes bringing down costs of parenting and education and lengthening parental leave from work. It also proposes expanding medical care for mothers and children, and increasing tax forgiveness for parents.

Many countries offer such support. But those with successful birth policies - such as France or Sweden - stand out for their greater gender equality, better labor rights and strong social welfare.

Reducing childcare costs does not work on its own, said Yun Zhou, a social demographer at the University of Michigan in the United States. Instead, she argues, the policy pushes a set of family values “that demand women take domestic responsibilities.”

Mary Meng, the tech worker, believes no policy can work until Chinese people start hoping again for a better life, financially.

"Now everyone thinks there is no prospect at all," she said. "No matter how hard you work, it is just survival."

I’m John Russell.

 

Farah Master and Laurie Chen reported on this story for Reuters. John Russell adapted it for VOA Learning English.

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Words in This Story

urban – adj. of, relating to, characteristic of a city

consumption – n. the use of goods and services

fertility rate -- n. the average number of children born to women during their reproductive years

suppress – v. to restrain from a usual course or action; to inhibit the growth or development of

prospect – n. possibility; something that is awaited or expected