Mistral点评

• Former CIA officer sentenced to 10 years in prison for spying for China
• Taiwan the biggest issue in US-mainland China ties, experts at Xiangshan defence forum say
• China’s debtors get ray of hope as Shenzhen shares bankruptcy data
• European Commission rejects Chinese EV price floor offer as tariff vote looms
• China says Fujian aircraft carrier has tested catapult launch system
• From Chinese to Italians and beyond, maligning a culture via its foods is a longtime American habit
• Parents of China doctor who died donate his organs enabling him to ‘save lives one last time’
• On Riyadh trip, Chinese Premier vows stronger trade, investment ties with Saudi Arabia
• Chinese chip making shows progress with new EUV patent from domestic lithography champion
• Tech war: US-sanctioned Chinese AI chip rival to Nvidia, Biren Technology, plans IPO
• China’s police chief urges ‘new chapter’ of Pacific Island security cooperation
• Beijing urges Chinese EV makers to avoid investments in countries like India and Turkey
• China’s economy isn’t becoming Japanified, at least not yet
• China, Philippines agree to keep talking after ‘candid’ Sabina Shoal discussions
• China creates ‘concerto’ of rules for insurance sector, promotes long-term investment
• China kindergarten criticised for asking parents to collectively pledge not to behave uncivilly
• Profits for Chinese firms fall in second quarter; trend seen reversing in fourth
• South China Sea: Philippines, Beijing hold ‘frank’ talks amid Sabina Shoal feud
• Central Asia: China touts ‘universal security’ at forum to counter terrorism, crime
• Apple starts iPhone 16 production in India, diversifying supply chain away from China
• LandSpace’s Zhuque-3 reusable rocket test a ‘breakthrough’ for China space race
• HSBC tops Nestle as world’s best dividend payer while China Mobile leads Hong Kong peers
• Indonesia’s US$20 billion Bali LRT raises eyebrows over heavy China reliance
• Confidence of US firms in China wanes as record numbers cut investments amid hardships
• Bill reviving US Justice Department’s ‘China Initiative’ passes House of Representatives
• Must have experience: impossible catch for pressured Chinese students seeking internships

Former CIA officer sentenced to 10 years in prison for spying for China

https://www.theguardian.com/world/2024/sep/12/former-cia-officer-sentenced-10-years-spying-china

A former CIA officer and contract linguist for the FBI who received cash, golf clubs and other expensive gifts in exchange for spying for China was sentenced on Wednesday to 10 years in prison.

Alexander Yuk Ching Ma, 71, made a deal in May with federal prosecutors, who agreed to recommend the 10-year term in exchange for his guilty plea to a count of conspiracy to gather or deliver national defense information to a foreign government. The deal also requires him to submit to polygraph tests, whenever requested by the US government, for the rest of his life.

A US judge approved the deal on Wednesday and handed down the agreed-upon sentence, according to court records.

“I hope God and America will forgive me for what I have done,” Ma, who has been in custody since his 2020 arrest, wrote in a letter to chief US district judge Derrick Watson in Honolulu before his sentencing.

Without the deal, Ma faced up to life in prison. He would have been allowed to withdraw from the agreement if Watson rejected the 10-year sentence.

Ma was born in Hong Kong, moved to Honolulu in 1968 and became a US citizen in 1975. He joined the CIA in 1982, was assigned overseas the next year and resigned in 1989. He held a top secret security clearance, according to court documents.

During a three-day meeting in a Hong Kong hotel room that year, Ma’s brother – identified in the plea agreement as “co-conspirator #1” – provided Chinese intelligence officers with a “large volume of classified and sensitive information”, according to the document. They were paid $50,000; prosecutors said they had an hourlong video from the meeting that showed Ma counting the money.

Two years later, Ma applied for a job as a contract linguist in the FBI’s Honolulu field office. By then, the Americans knew he was collaborating with Chinese intelligence officers, and they hired him in 2004 so they could keep an eye on his espionage activities.

Over the next six years, Ma regularly copied, photographed and stole classified documents, prosecutors said. He often took them on trips to China, returning with thousands of dollars in cash and expensive gifts, including a new set of golf clubs, prosecutors said.

At one point in 2006, his handlers at the Shanghai state security bureau asked Ma to get his brother to help identify four people in photographs, and the brother did identify two of them.

During a sting operation, Ma accepted thousands of dollars in cash in exchange for past espionage activities, and he told an undercover FBI agent posing as a Chinese intelligence officer that he wanted to see the “motherland” succeed, prosecutors have said.

“Let it be a message to anyone else thinking of doing the same,” FBI Honolulu special agent-in-charge Steven Merrill said in a statement after Ma was sentenced. “No matter how long it takes, or how much time passes, you will be brought to justice.”

The brother was never prosecuted. He suffered from debilitating symptoms of Alzheimer’s disease and has since died, court documents say.

“Because of my brother, I could not bring myself to report this crime,” Ma said in his letter to the judge. “He was like a father figure to me. In a way, I am also glad that he left this world, as that made me free to admit what I did.”

The plea agreement also called for Ma to cooperate with the US government by providing more details about his case and submitting to polygraph tests for the rest of his life.

Prosecutors said that since pleading guilty, Ma has already taken part in five “lengthy, and sometimes grueling, sessions over the course of four weeks, some spanning as long as six hours, wherein he provided valuable information and endeavored to answer the government’s inquiries to the best of his ability”.

Taiwan the biggest issue in US-mainland China ties, experts at Xiangshan defence forum say

https://www.scmp.com/news/china/military/article/3278291/taiwan-biggest-issue-us-china-ties-experts-xiangshan-defence-forum-say?utm_source=rss_feed

Washington’s stand on Taiwan is the main factor driving negative momentum in US-China relations, Chinese observers said on the first day of a defence forum in Beijing on Thursday.

“The US wants to dominate the world and suppress China, and does not want China to be unified. That’s a fundamental contradiction [between the two nations],” said Lieutenant General He Lei, former vice-president of the PLA Academy of Military Sciences.

He, who was speaking on the sidelines of the annual Xiangshan Forum, said the Taiwan issue was the biggest barrier to military dialogue. “Despite the US stance, we must sharpen our core interest,” he said.

His comments were echoed by Wu Xinbo, director of the Centre for American Studies at Fudan University in Shanghai, during a discussion at the forum.

Wu said the US was “playing the Taiwan card more and more” and that its position on the island made Beijing feel that Washington was “no longer committed to the one-China policy and … that it’s encouraging Taiwan independence – either overtly or covertly”.

“All three sides are making preparations for the worst-case scenario,” Wu said. “That’s very dangerous.”

In conversation with Rick Waters, former US deputy assistant secretary of state for China and Taiwan, Wu called for Washington, as a first step, to join Beijing in trying to prevent Taiwan independence.

“The second step is that all the sides – Beijing, Washington and even Taipei – can work to create an environment favourable to ultimate peaceful reunification,” he said.

“The third step is that [Beijing and Taipei] finally sit down for negotiations,” Wu said, adding that the US was “very important” in shaping an environment conducive to achieving peaceful reunification.

Military-to-military ties between the US and China have improved in recent months after they broke down in 2022 following Nancy Pelosi’s visit to Taiwan, when she was US House speaker. The two militaries held their first theatre-level talks in more than two years on Tuesday.

Taiwan has remained the main issue in Beijing’s talking points during meetings with US officials at various levels. Chinese officials are particularly concerned about US arms sales to Taiwan that Washington says it is bound by law to provide.

Beijing sees the self-governed island as part of China, to be brought under its control – by force if necessary. Most countries, including the US, do not see Taiwan as an independent state but many are opposed to any change to the status quo by force.

The People’s Liberation Army has ramped up pressure on Taiwan in recent years, sending fighter jets and warships near the island on an almost daily basis.

While Washington has said it adheres to the one-China policy and does not encourage Taiwan independence, US President Joe Biden in 2021 said it was for the Taiwanese people to decide.

Speaking on the sidelines of the forum, Waters also said it was “not an issue for the US and China to decide”. “The 23 million people on Taiwan have agency, and so it has to be that this issue, however it’s managed … has to address their concerns,” he said.

Waters, who is now managing director of Eurasia Group’s China practice, said he did not “see any evidence” that Taipei was pursuing de jure independence and noted that such a move was not supported by US policy.

“So I’m left with the question here: what is China’s ultimate intention?” he said. “That’s a very difficult question to assess … because the inducements to any Taiwan leader right now [to move in the direction of unification] are not … really present.

“The strategy is much more one of carrots and sticks – of the application of pressure against actors on the island who are not in Beijing’s favour, and very limited inducements that don’t really create a context within which you can manage the politics of this issue.”

A slew of bilateral meetings are expected to be held between senior Chinese military officials and their visiting counterparts during the three-day forum, which is seen as Beijing’s answer to the Shangri-la Dialogue in Singapore.

Around 20 defence chiefs are attending the event, mainly from Southeast Asian nations such as Singapore, Cambodia, Vietnam and Laos, and former Soviet republics including Armenia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan.

Moscow has sent its deputy defence minister Aleksandr Fomin, while Kyiv sent its defence attaché in China, Petro Klymyshyn.

But US ally the Philippines is conspicuously absent from the forum at a time when tensions with China are soaring in the disputed South China Sea, with frequent run-ins between their coastguards in recent months.

The US delegation is being led by Michael Chase, the deputy assistant secretary of defence for China.

The forum is expected to cover a broad range of issues – from US-China relations to European and Middle Eastern security, the Global South, and emerging technologies such as artificial intelligence and aerospace.

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China’s debtors get ray of hope as Shenzhen shares bankruptcy data

https://www.scmp.com/economy/china-economy/article/3278293/chinas-debtors-get-ray-hope-shenzhen-shares-bankruptcy-data?utm_source=rss_feed

A court in southern China approved the personal bankruptcy of a local couple who owed 9.28 million yuan (US$1.3 million) late last month, raising hopes of relief for financially struggling individuals as the domestic economy remains languid.

The couple’s case is the latest instance of personal bankruptcy to be made public in Shenzhen, a major tech hub and the only city in mainland China that allows residents to discharge outstanding debts three years after a successful filing.

As of the end of August, the Shenzhen Intermediate People’s Court said it had accepted about 350 personal bankruptcy cases, covering debt restructuring, liquidation and reconciliation. The city launched its pilot programme for personal bankruptcy in March 2021.

Though decades of reform have turned China from a centrally planned system into a market economy – with a law on enterprise bankruptcy enacted in 2007 to help troubled companies recover from crippling debt – the development of a personal bankruptcy system has been comparatively slow.

A portion of personal bankruptcy applications have not been filed for review or accepted by the court, said Cao Qixuan, chief judge of the Shenzhen bankruptcy court, as quoted by the state-owned Yangcheng Evening News on Tuesday.

This is due to several factors, such as incomplete information from applicants or errors in the submission of materials. Promotion of the personal bankruptcy system, Cao said, needs to be cautious, especially for those debtors whose requests for relief are significant.

The city’s regulations mandate that applicants have lived in Shenzhen and made contributions to social security there for at least three years.

Personal and household debts, especially among owners of small businesses, have become more prevalent in the ongoing economic downturn. This has made the broader establishment of a personal bankruptcy system more urgent, said Guangzhou-based lawyer Luo Aiping. Luo and other attorneys have received numerous queries from indebted individuals, asking whether they can go bankrupt in their city.

According to data from the China Association of Small and Medium Enterprises, China has 53 million micro, small, and medium-sized enterprises (SMEs), many solely funded by individual families through personal assets and loans.

“As strong as the demand is, there are equally strong voices of opposition,” Luo said.

“From the perspective of protecting creditors’ interests, especially government-backed banks, local courts lack the incentive to push for personal bankruptcy,” he added. “Many small and medium-sized creditors also strongly oppose it, fearing that it will become harder to recover their claims.”

The Shenzhen couple approved for personal bankruptcy had run a towel wholesaling and retailing business since the 1990s. Between 2012 and 2023, they borrowed money from relatives and friends, various lending platforms and banks to pay off earlier debts and maintain operations.

By the time they had closed their shop last October, their liabilities had grown to nearly 9.3 million yuan.

With slim odds of clearing the debt – the husband has no income, the wife a monthly pension of 4,000 yuan, less than 400 yuan in cash and savings and three dependents to look after – the court determined that they met the conditions for bankruptcy.

In cases of this sort, creditors will have the opportunity to be partially repaid, but may not be allowed to take legal action. Three years after the declaration of bankruptcy, the local court will decide whether to discharge the couple’s outstanding debts.

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European Commission rejects Chinese EV price floor offer as tariff vote looms

https://www.scmp.com/news/china/diplomacy/article/3278299/european-commission-rejects-chinese-ev-price-floor-offer-tariff-vote-looms?utm_source=rss_feed

The European Commission has rejected offers from Chinese exporters to put a price floor on their electric vehicle shipments amid intense wrangling over the highest-profile trade dispute between Brussels and Beijing in a decade.

Several Chinese exporters submitted offers for “price undertakings”, which were deemed to be incompatible with World Trade Organization and European Union rules, commission trade spokesman Olof Gill confirmed on Thursday.

“Our review focused on whether the offers would eliminate the injurious effects of subsidies and could be effectively monitored and enforced. The commission has concluded that none of the offers met these requirements,” Gill said at a media briefing in Brussels.

“The commission remains open to a negotiated solution, but it must fully comply with WTO rules and fully remedy the injurious effects of subsidies identified,” he said, adding that the ball was now in Beijing’s court to propose a counter offer that would tick those boxes.

The announcement came as the debate over EV tariffs reached fever pitch. The EU has complained that Chinese imports are too cheap as a result of industrial subsidies, and therefore create unfair competition for local models.

Powerful member states are now urging the commission to rethink the trade action, while Chinese officials continue to push for a negotiated resolution ahead of a crunch vote that would see the duties signed into law for a five-year period. The vote is expected to take place later this month.

The proposals would have granted Chinese companies amnesty from punitive import tariffs for vehicles sold above a certain price. They were made by some of the Chinese manufacturers targeted a fortnight ago during online hearings, including SAIC, Geely and BYD.

Some of the companies also offered to put a quota on the number of vehicles shipped, above which the punitive duties of up to 35.3 per cent would be applied, but sources said the offers were not seen to be binding enough.

Such a deal would closely mirror one reached 11 years ago during a trade war over cheap Chinese solar panel imports. That deal ended in tatters, leaving the EU’s nascent solar industry decimated by Chinese competition.

Negotiations will continue in Brussels next week when Chinese Commerce Minister Wang Wentao meets EU trade chief Valdis Dombrovskis. In the interim, influential EU members have been wavering on their support for the anti-subsidy inquiry.

In a major coup for Beijing, Spanish Prime Minister Pedro Sanchez on Wednesday called on the EU to rethink the duties. Spain had previously been one of the biggest supporters of the probe.

“I have to be blunt and frank with you that we need to reconsider – all of us, not only member states but also the [European] Commission,” Sanchez said during a visit to Kunshan in eastern China, following talks with Chinese President Xi Jinping in Beijing earlier this week.

“We don’t need another war, in this case a trade war,” Sanchez said when asked about how Spain plans to vote later this month.

German Chancellor Olaf Scholz expressed support for Sanchez’s position, saying via his spokesman that this “direction of travel is one that we share”, Bloomberg reported.

In an indicative vote in July, Spain voted in favour of the duties.

In the coming binding vote, 15 of the bloc’s 27 member governments, accounting for 65 per cent of its population, will have to vote against the duties or they will come into force for five years.

Germany, meanwhile, abstained – although Scholz has long been critical of any effort to disrupt the automotive trade.

Before the chancellor’s public comment on the vote, German diplomats had said that Berlin’s abstention would remain, given that its ministries were divided on the topic. Both the economic and foreign ministries have supported the duties.

In addition to Brussels, Wang intends to visit Rome next week, where he will surely be looking for good news on the EV front. In July, Italy also voted in favour of tariffs.

Speaking to Reuters on Wednesday, Italian Industry Minister Adolfo Urso said he expected a “negotiated solution” to the dispute.

“They are discussing it in Geneva at the moment,” he said, referring to the WTO headquarters.

However, even if populous Germany, Italy and Spain voted against the tariffs, it would not be enough to nix the duties unless several other members flip their votes, although the commission may find itself under pressure from powerful member states to reach a negotiated solution.

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China says Fujian aircraft carrier has tested catapult launch system

https://www.scmp.com/news/china/military/article/3278269/china-says-fujian-aircraft-carrier-has-tested-catapult-launch-system?utm_source=rss_feed

Beijing has said for the first time that its most advanced aircraft carrier, the Fujian, has tested its launch catapult.

A trailer for a military-themed TV series released by state broadcaster CCTV on Wednesday showed footage apparently filmed from the carrier’s flight deck.

These included shots seemingly taken from a camera mounted under a warplane as it took off using the electromagnetic launch system and what appeared to be a sailor in an operations room triggering the device.

The Fujian, launched in June 2022, is China’s first aircraft carrier to be equipped with electromagnetic catapults, which will allow the vessel to launch planes more regularly.

It was not clear when the footage was taken or whether the test was carried out when the Fujian, which has not yet entered service, was in port or out at sea.

“We have waited too long for our military to become strong and world class. We must be at the forefront of defending our country’s interests,” a narrator said during the three-minute trailer.

The Fujian is believed to have begun its fourth sea trial following the release of maritime safety notices by the Shanghai authorities earlier this month.

Its first three sea trials did not test the launch mechanism and military analysts have previously said the test was likely to occur during its fourth or fifth trial.

Currently the USS Gerald R. Ford is the only other carrier to use the advanced catapult launch system, although the United States is building more Ford-class nuclear-powered carriers.

The PLA plans to have six aircraft carriers by 2035, making it the world’s second-largest blue-water navy after the United States.

The trailer was released ahead of a six-part CCTV series, but the first episode – broadcast on Wednesday night – did not feature the Fujian.

Instead it showed footage of an army operation to “defend the country and guard the border” on a high plateau.

The People’s Liberation Army has been steadily boosting its military presence along its disputed Himalayan border with India following a deadly clash in June 2020.

CCTV said that the feature focused on how PLA soldiers “are fighting a tough battle” to reach the goal of becoming a “world-class military” by the army’s centenary in 2027.

Taiwan’s defence ministry has warned that the Fujian would pose a “substantial threat” to the island, which Beijing considers part of its territory, in the event of a cross-strait conflict.

Most countries, including the island’s main international partner the US, do not formally recognise Taiwan as an independent state, but Washington opposes any attempt to take the by force and is committed to arming the island to help it defend itself.

CCTV said the series was jointly produced by the political work department of the Central Military Commission, the top command body; the Cyberspace Administration of China, which regulates the internet; and the China Media Group, which manages CCTV.

From Chinese to Italians and beyond, maligning a culture via its foods is a longtime American habit

https://apnews.com/article/haitians-food-pets-false-stereotypes-e857fcc1ca18c77d1c890ec5e41f4f65FILE - Crispy Pork Belly is presented at "Love & Thai" restaurant in Fresno, Calif., Wednesday, Dec. 20, 2023. The Thai restaurant, is back in operation after being wrongfully accused of abusing a dog to turn it into meat. It may be astonishing to some that a claim rooted in a racist stereotype took down a restaurant three years after "Stop Asian Hate" became a rallying cry. (AP Photo/Richard Vogel, File)

2024-09-12T04:23:15Z

NEW YORK (AP) — It’s a practice that’s about as American as apple pie — accusing immigrant and minority communities of engaging in bizarre or disgusting behaviors when it comes to what and how they eat and drink, a kind of shorthand for saying they don’t belong.

The latest iteration came at Tuesday’s presidential debate, when former President Donald Trump spotlighted a false online tempest around the Haitian immigrant community of Springfield, Ohio. He repeated the groundless claim previously spread by his running mate, JD Vance, that the immigrants were stealing dogs and cats, the precious pets belonging to their American neighbors, and eating them. The furor got enough attention that officials had to step in to refute it, saying there was no credible evidence of any such thing.

But while it might be enough to turn your stomach, such food-based accusations are not new. Far from it.

Food-related scorn and insults were hurled at immigrant Chinese communities on the West Coast in the late 1800s as they started coming to the United States in larger numbers, and in later decades spread to other Asian and Pacific Islander communities like Thai or Vietnamese. As recently as last year, a Thai restaurant in California was hit with the stereotype, which caused such an outpouring of undeserved vitriol that the owner had to close and move to another location.

Behind it is the idea that “you’re engaging in something that is not just a matter of taste, but a violation of what it is to be human,” says Paul Freedman, a professor of history at Yale University. By tarring Chinese immigrants as those who would eat things Americans would refuse to, it made them the “other.”

In the US, foods can be flashpoints

Other communities, while not being accused of eating pets, have been criticized for the perceived strangeness of what they were cooking when they were new arrivals, such as Italians using too much garlic or Indians too much curry powder. Minority groups with a longer presence in the country were and are still not exempt from racist stereotypes — think derogatory references to Mexicans and beans or insulting African Americans with remarks about fried chicken and watermelon.

“There’s a slur for every almost every ethnicity based on some kind of food that they eat,” says Amy Bentley, professor of nutrition and food Studies at New York University. “And so that’s a very good way of disparaging people.”

That’s because food isn’t just sustenance. Embedded in human eating habits are some of the very building blocks of culture — things that make different peoples distinct and can be commandeered as fodder for ethnic hatred or political polemics.

“We need it to survive, but it’s also highly ritualized and highly symbolic. So the birthday cake, the anniversary, the things are commemorated and celebrated with food and drink,” Bentley says. “It’s just so highly integrated in all parts of our lives.”

And because “there’s specific variations of how humans do those rituals, how they eat, how they have shaped their cuisines, how they eat their food,” she adds, “It can be as a theme of commonality ... or it can be a form of distinct division.”

It’s not just the what. Insults can come from the how as well — eating with hands or chopsticks instead of forks and knives, for example. It can be seen in class-based bias against poorer people who didn’t have the same access to elaborate table settings or couldn’t afford to eat the same way the rich did — and used different, perhaps unfamiliar ingredients out of necessity.

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Such disparagement can extend directly into current events. During the Second Gulf War, for example, Americans angry at France’s opposition of the U.S. invasion of Iraq started calling french fries “freedom fries.” And a much-used insulting term in the United States for Germans during the first two world wars was “krauts” — a slam on a culture where sauerkraut was a traditional food.

“Just what was wrong with the way urban immigrants ate?” Donna R. Gabaccia wrote in her 1998 book, “We Are What We Eat: Ethnic Food and the Making of Americans.” In reviewing attitudes of the early 20th century and its demands for “100% Americanism,” she noted that “sauerkraut became ‘victory cabbage’” and one account complained of an Italian family “still eating spaghetti, not yet assimilated.”

The expanding food culture provides continuing fodder

Such stereotypes have persisted despite the fact that the American palate has significantly expanded in recent decades, thanks in part to the influx of those immigrant communities, with grocery stories carrying a wealth of ingredients that would baffle previous generations. The rise of restaurant culture has introduced many diners to authentic examples of cuisines they might have needed a passport to access in other eras.

After all, Bentley says, “when immigrants migrate to a different country, they bring their foodways with them and maintain them as they can. ... It’s so reminiscent of family, community, home. They’re just really material, multisensory manifestations of who we are.”

Haitian food is just one example of that. Communities like those found in New York City have added to the culinary landscape, using ingredients like goat, plantains and cassava.

So when Trump said that immigrants in Springfield — whom he called “the people that came in” — were eating dogs and cats and “the pets of the people that live there,” the echoes of his remarks played into not just food but culture itself.

And even though the American palate has broadened in recent decades, the persistence of food stereotypes — and outright insults, whether based in fact or completely made up — shows that just because Americans eat more broadly, it doesn’t mean that carries over into tolerance or nuance about other groups.

“It’s a fallacy to think that,” Freedman says. “It’s like the tourism fallacy that travel makes us more understanding of diversity. The best example right now is Mexican food. Lots and lots of people like Mexican food AND think that immigration needs to be stopped. There’s no link between enjoyment of a foreigner’s cuisine and that openness.”

DEEPTI HAJELA Hajela writes about the ways in which America is changing as part of the AP’s Trends+Culture team. She is based in New York City.

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Parents of China doctor who died donate his organs enabling him to ‘save lives one last time’

https://www.scmp.com/news/people-culture/trending-china/article/3277935/parents-china-doctor-who-died-donate-his-organs-enabling-him-save-lives-one-last-time?utm_source=rss_feed

The parents of a young doctor who died in early August chose to donate his organs to allow him to “save lives one last time”, a decision that touched many on Chinese social media.

Luo Sizheng, a young surgeon at Hongji Hospital in southwestern China’s Chongqing municipality, died in a motorcycle accident on August 4 when he was travelling to visit his parents. He was 24 years old.

Luo’s mother, surnamed Ma, expressed her sorrow, noting that her son rarely had time off to visit family. When she and Luo’s father rushed to the hospital, they found him in a deep coma. Despite the rescue efforts, Luo unfortunately passed away later.

Ma said it felt like “the end of the world” when she learned that her son could not be saved.

Even amidst their profound grief, Ma and her husband, in Luo’s final moments, discovered the strength to make the selfless decision to donate their son’s organs.

“He was proud of his profession and thought he was truly helping people. We were proud of him, and the donations will be like he is saving lives for the last time,” said Ma.

She expressed that the decision to donate was also made so that their son “will never truly leave us.”

On August 11, Ma and her husband signed the donation agreement, enabling the donation of their son’s heart, liver, kidneys, and corneas, bringing hope to five individuals and their families, and ensuring that their son’s legacy continues through the gift of life.

His story has moved many people on the mainland internet.

“I am heartbroken and moved. The ‘angel in white’ has become a real angel,” said one person on mainland short video platform Douyin, referring to the common nickname “angel in white” for doctors and nurses in China.

Another person said: “I salute the young doctor. Both you and your parents are great souls.”

China’s Regulations on Human Organ Donation and Transplantation were revised on May 1.

The new regulations enhance the standards for organ transplantation procedures and impose stricter penalties for malpractice. This updated legislation is designed to foster an environment that encourages more individuals to become volunteer donors.

More than 6.8 million people in China have registered as organ donors, and some 54,000 people have donated their organs as of September 7.

China hopes to raise the current annual organ donation rate of 4.6 donations per million people last year to 8 per million in five years, according to the General Office of the National Health Commission.

According to a 2020 article in the journal Therapieforum Transplant, the US averages about 30 organ donations per million people annually, and in Europe, that number is about 20 per million.

Chinese tradition holds that only a burial brings peace to the deceased and that organ donation may disrupt their tranquility. This belief dampens enthusiasm for organ donation, according to the vice president of the Gansu branch of the Red Cross Society in an interview with Xinhua News.

On Riyadh trip, Chinese Premier vows stronger trade, investment ties with Saudi Arabia

https://www.scmp.com/news/china/diplomacy/article/3278213/riyadh-trip-chinese-premier-vows-stronger-trade-investment-ties-saudi-arabia?utm_source=rss_feed

Chinese Premier Li Qiang has pledged to strengthen trade and investment with Saudi Arabia in fields from traditional energy and infrastructure to the emerging new-energy, hi-tech and digital economy, and vowed to protect the global supply chain with the kingdom.

Li was speaking at the fourth meeting of the High-Level Chinese-Saudi Joint Committee with Crown Prince Mohammed bin Salman on Wednesday. The framework was established after Chinese President Xi Jinping’s landmark visit to the kingdom in 2016.

Li is in Riyadh to chair the meeting on his first trip as premier to the Middle East. He will also visit the United Arab Emirates (UAE) from Thursday.

“China and Saudi Arabia should further expand the scale of bilateral trade, deepen cooperation in traditional areas such as oil and gas, petrochemicals and infrastructure construction … [while expanding] to new energy, information and communications, digital economy, green economy … and work together to maintain the stability of the global industrial supply chain,” the premier said, according to the official People’s Daily newspaper.

Salman largely echoed Li’s call for economic cooperation, while adding that Riyadh and Beijing share a “similar position and take [the] same responsibility” on regional and international affairs. He said Riyadh was willing to cooperate with Beijing on global security, the newspaper said.

Li’s visit to Riyadh marked one of China’s highest profile meetings in the region for years. Wang Wentao, the Minister of Commerce, and Jin Zhuanglong, the Minister of Industry and Information Technology, also attended the meeting, the Riyadh-based Saudi Press Agency said.

In addition to Salman, at least nine Saudi ministers attended the meeting, the agency said.

Earlier, China’s premier and the two Chinese ministers attended an investment conference during which Li called for confidence in China despite foreign investment headwinds.

Representatives of flagship Saudi companies – including from Public Investment Fund (PIF), Aramco and SABIC – attended the conference.

Li said China has a “mega-market of 1.4 billion people” and their demands are “sustained releasing”, suggesting continuing growth. Meanwhile, he said China was actively upgrading its industry to high-end science and technology, which would provide more opportunities for foreign investors.

The premier also pledged to the Saudi high-profile investors that China would further relax market access and protect foreign investors rights.

Beijing has a great demand for foreign investment. From January to July, foreign direct investment plunged nearly 30 per cent year on year to 539.5 billion yuan (US$76 billion), government data showed.

On Wednesday, Li also met Gulf Cooperation Council (GCC) secretary general Jasem al-Budaiwi.

Saudi Arabia is China’s largest trading partner in the region and its foremost supplier of oil. For the past decade, China has also been Saudi Arabia’s leading trade partner.

The kingdom has enjoyed a rare trade surplus with the world’s second largest economy, bolstered by significant oil exports. In 2023, trade volumes between the two nations surpassed US$107 billion, with China importing goods worth US$64 billion.

A pivotal aspect of China-Saudi economic discussions revolves around the use of local currencies in trade. Last year, the central banks of both nations signed a local currency swap agreement valued at 50 billion yuan (around US$7.02 billion).

In an exclusive interview with the South China Morning Post on Saturday, Bandar al-Khorayef, the Saudi minister for industry and mineral resources, expressed Riyadh’s openness to expanding its use of the yuan in crude oil transactions.

Khorayef was speaking to the South China Morning Post at the end of a tour of Guangdong and Hong Kong which included visits to telecommunications giant Huawei and China’s leading electric vehicle company GAC Group.

His trip underscored Riyadh’s commitment to collaborating with China in green energy and hi-tech sectors, which have come under increasing scrutiny from Western countries.

While Chinese electric vehicle manufacturers face punitive tariffs from the European Union and Washington, Saudi Arabia has largely welcomed China’s burgeoning industries to support its national industrial strategy.

Riyadh has also flagged its intention to partner with companies such as Huawei to develop “innovative smart solutions” and leverage technologies for the “Fourth Industrial Revolution”, characterised by AI and the Internet of Things.

In another notable development this year, the Saudi defence minister Prince Khalid bin Salman visited Beijing in July to discuss strengthening military ties between the two countries.

The visit highlighted the rapid evolution of Sino-Saudi defence relations – particularly in light of regional unrest and Washington’s arms sales restrictions.

Riyadh’s shift towards Beijing comes as the Biden administration prepares to lift restrictions on arms sales to Saudi Arabia, in place since 2021 because of human rights concerns.

In 2022, Saudi Arabia signed arms agreements worth US$4 billion with China, including deals for advanced military technologies. And earlier this year, Chinese arms suppliers had a high-profile display at Riyadh’s defence show.

The two countries also conducted a joint naval counterterrorism exercise last year, days after the start of the Israel-Gaza war.

China’s growing arms sales and clear charm offensive towards Saudi Arabia is a sign of Beijing’s growing ambition to extend its influence in the Middle East beyond the economy.

Last year, Beijing brokered a peace deal between Saudi Arabia and Iran, restoring diplomatic relations after nearly a decade of tensions.

China is also seen as having crucial leverage with Iran – still Riyadh’s biggest regional competitor, and a potential key player in attempts to secure an end to the conflict in Gaza.

Chinese chip making shows progress with new EUV patent from domestic lithography champion

https://www.scmp.com/tech/big-tech/article/3278235/chinese-chip-making-shows-progress-new-euv-patent-domestic-lithography-champion?utm_source=rss_feed

A newly revealed patent from Chinese lithography systems maker Shanghai Micro Electronics Equipment (SMEE) shows how domestic firms could progress in the local advanced lithography tools market despite US sanctions.

The “extreme ultraviolet [EUV] radiation generators and lithography equipment” patent, filed in March 2023, was published publicly on Tuesday and is still being vetted by the China National Intellectual Property Administration, according to a record from company registry website Qichacha.

The patent shows how SMEE is progressing in EUV lithography, which is considered the Achilles’ heel of the Chinese semiconductor industry. Despite years of efforts, SMEE remains behind ASML in reliably mass producing lithography gear that can be used for processes at the 28-nanometre level and below.

Netherlands-based ASML currently has a near monopoly on EUV machines, and it has been restricted from exporting that equipment to China since 2019.

SMEE was added to a US Commerce Department blacklist in December 2022, along with 35 other Chinese companies, which also restricted its ability to import certain US technologies.

China’s market for lithography machines, which print highly complex circuit patterns onto silicon wafers, is 99 per cent controlled by ASML and Japanese companies Nikon and Canon. Only the Dutch firm produces machines capable of making chips smaller than 7-nm.

ASML is now facing mounting pressure to serve customers on the mainland, its second-largest market by revenue in 2023 after Taiwan. It has been only able to fill 50 per cent of orders from China due to a heavy backlog, according to its 2023 annual report.

As of September 6, when the Netherlands updated its export restrictions, ASML requires a licence to provide spare parts and software updates for its lithography systems in China. Servicing the equipment is also regulated, Reuters reported, citing a Dutch government statement.

In 2023, EUV machines accounted for 42 per cent of AMSL’s system sales of €21.9 billion (US$24.2 billion), as global foundries from Taiwan Semiconductor Manufacturing Company to Samsung Electronics snapped up these tools to continue manufacturing chips down to a 3-nm grade.

EUV lithography uses light with a wavelength of just 13.5 nanometres – nearly X-ray level – a reduction of almost 14 times from deep ultraviolet lithography, which uses 193-nm waves. The advanced EUV scanners are considered necessary for mass producing semiconductors smaller than 7-nm, as they provide better production yields, a measure of the percentage of non-defective items produced in a manufacturing process.

China’s top foundry Semiconductor International Manufacturing Corporation, which is also under US sanctions, had to resort to multiple patterning in its 7-nm process node to make the system-on-a-chip powering Huawei’s flagship Mate 60 handset issued last year at the expense of lower yields.

Tech war: US-sanctioned Chinese AI chip rival to Nvidia, Biren Technology, plans IPO

https://www.scmp.com/tech/tech-war/article/3278210/tech-war-us-sanctioned-chinese-ai-chip-rival-nvidia-biren-technology-plans-ipo?utm_source=rss_feed

Artificial intelligence (AI) chip start-up Biren Technology, one of China’s best hopes for challenging Nvidia, has hired an investment bank to commence the required “tutoring” process, a precursor to an initial public offering (IPO) in the country.

The Shanghai-based unicorn – valued at US$2.19 billion last November, according to venture deal tracker Pitchbook – has hired the city’s largest brokerage, Guotai Junan Securities, to coach company executives on IPO-related issues, the China Securities Regulatory Commission (CSRC) said on Wednesday.

The tutoring process, which is mandatory for all IPO applicants in China before filing a listing plan, usually takes between three to 12 months. Neither Biren nor the CSRC has disclosed the planned location or fundraising target for the IPO.

Biren’s move comes two weeks after crosstown rival Enflame kicked off its tutoring process, as more Chinese chip designers look to raise capital in the public markets.

In China, the integrated-circuit industry has bred more unicorns than any other sector in the past three years, according to a report earlier this week by Great Wall Strategy Consultants. However, the country’s tech sector has been too heavily reliant on state-backed investments, which could lead to a “big problem”, said Fang Fenglei, widely known as China’s “first investment banker”, at a forum on Wednesday.

Biren counts venture capital firm HongShan, formerly Sequoia China, as one of its investors. The start-up had raised more than US$780 million from eight funding rounds as of April, Pitchbook data showed.

Still, Biren has tried to obtain more support from the Chinese government after the US Commerce Department added the company and its Beijing-based rival Moore Threads onto a trade blacklist a year ago, according to people with direct knowledge of the matter, who declined to be named because the information is private.

US sanctions have prevented Biren from engaging the service of world-leading foundries, including Taiwan Semiconductor Manufacturing Company, hobbling the start-up’s chip production.

Founded by Wall Street veteran Zhang Wen in 2019, Biren is among a group of Chinese graphics processing unit (GPU) developers hoping to take advantage of the absence of advanced chips from Nvidia and Advanced Micro Devices on the mainland. Under US export controls, the two California-based companies are barred from selling their best GPUs to customers in China.

Biren launched its BR100 GPU in August 2022, claiming it had broken world records for computing power. The chip received substantial media coverage globally and raised eyebrows in the US. The BR100 is no longer listed on the company’s website.

The start-up’s current offerings include the Bili GPU series, which has entered mass production, according to the company.

China’s police chief urges ‘new chapter’ of Pacific Island security cooperation

https://www.scmp.com/news/china/diplomacy/article/3278225/chinas-police-chief-urges-new-chapter-pacific-island-security-cooperation?utm_source=rss_feed

China’s Minister of Public Security Wang Xiaohong on Wednesday called for a “new chapter” of law enforcement cooperation with Pacific Island nations amid broader efforts by Beijing to strengthen security ties in the region and assert its leadership on global security governance.

Speaking at a forum on China-Pacific Island police cooperation in the southeastern city of Fuzhou, Wang said China was willing to create a “more professional” law enforcement team to ensure “high-level security guarantees” and achieve “lasting security” in the region.

According to state news agency Xinhua, Wang called for China and Pacific Island countries to write a “new chapter of mutually beneficial law enforcement and security cooperation” to help build a “closer community with a shared future”.

“China is ready to work together with all parties to focus on establishing friendlier cooperative relationships, adopting more efficient modes of cooperation, and building a more professional law enforcement team,” he said in his speech at the third ministerial dialogue on police capacity building.

Wang’s comments come after Australia, one of China’s rivals for influence in the region, scored diplomatic points by securing the endorsement of Pacific island leaders for a A$400 million (US$266.3 million) Pacific Policing Initiative at a summit in Tonga last month.

Under the initiative, four training centres will be set up across the Pacific, with a separate hub in Australia, and a multi-country policing force of about 200 officers will be created and deployed in the region during major events or crises.

In February, following reports of Chinese police working in Kiribati, Australian Minister for International Development and the Pacific Pat Conroy said there should be “no role” for China in policing the Pacific Islands, and that Australia would train more local security forces to fill gaps.

Beijing has in recent years sought to play a bigger role in global security governance, which has been seen as an effort to build a security architecture to rival the Western-led system.

Earlier in the week, at a separate security forum in the eastern Chinese province of Jiangsu, Wang said that over the next year, China would help train 3,000 foreign law enforcement officials to tackle global security issues and better protect Chinese interests beyond its borders.

China will also send police consultants and working units to countries to help improve their law enforcement capacity, conduct joint patrols and investigations, and tackle cross-border crime.

At the Jiangsu forum, attended by representatives from 122 countries, regions and international organisations, Wang said China would continue to promote the development of the global public security governance system in a “more fair, reasonable and efficient direction”.

Ahead of the forum in Fuzhou on Wednesday, Wang held talks with several leaders from the Pacific Islands, a region that Beijing has been eager to court.

Wang told Pio Tikoduadua, Fiji’s minister for home affairs and immigration, that China attached “great importance” to its security ties with the country and was willing to work with it to boost cooperation and mutual trust and jointly tackle transnational crime such as drug trafficking.

In a separate meeting with Jimson Tanangada, the Solomon Islands’ minister of police, national security and correctional services, Wang pledged deeper cooperation in the fields of law enforcement and security.

Wang said China was willing to “jointly embark on a new journey of high-level police cooperation” with the Solomon Islands.

China’s growing security ties with the Pacific Islands, including a controversial policing pact it signed with the Solomon Islands, have attracted scrutiny and raised concerns in Australia and other Western countries.

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Beijing urges Chinese EV makers to avoid investments in countries like India and Turkey

https://www.scmp.com/business/china-business/article/3278236/beijing-urges-chinese-ev-makers-avoid-investments-countries-india-and-turkey?utm_source=rss_feed

Chinese electric-vehicle (EV) makers’ drive to go global hit a snag after Beijing urged them to avoid investing in countries like India and Turkey.

The Ministry of Commerce convened executives from more than a dozen electric car makers in July, under so-called “window guidance”, to discuss the risks of building plants abroad, according to Bloomberg.

Two industry officials with knowledge of the situation confirmed the meeting took place and said the ministry told carmakers to better protect their assets and technology as they ramp up their expansion overseas.

In mainland China, authorities use window guidance to give verbal or written instructions to companies on government policy. Generally, companies that fail to comply with policy directions delivered via window guidance will not be punished in accordance with the country’s rules and laws.

During the meeting, the EV makers were encouraged to focus on knock-down assembly lines – where key components are produced at home before being shipped overseas where they are assembled closer to the consumption markets – rather than setting up supply chains and large-scale facilities outside the mainland.

They were also told not to make any investments in countries like India and Turkey, the sources said.

The commerce ministry did not respond to queries by the Post on Thursday.

The sources said the guidance arose from policymakers’ concerns about Beijing’s rising tensions with certain countries where Chinese businesses and products could be boycotted by local authorities and consumers. In addition, government officials are worried about the risk of Chinese technology being stolen by foreign counterparts.

“The instructions [by the ministry] are interpreted as a warning to the companies since they are now actively looking to raise manufacturing capacity in markets such as Southeast Asia and some European countries,” said Chen Jinzhu, the chief executive of Shanghai Mingliang Auto Service, a consultancy. “It may cause some of the companies to slow down their overseas plant building pace.”

Chinese EV makers and vendors in the automotive supply chain are at the global vanguard because they have capitalised on core technologies for batteries, self-driving and in-car entertainment, according to David Xu Daquan, the China president of Bosch, the world’s largest automotive supplier.

The mainland is also the world’s largest EV market, where sales of pure electric and hybrid cars represented 65 per cent of the global total in the first half of this year, according to the China Passenger Car Association.

However, EV makers from BYD – the world’s largest electric car maker – to start-up Hozon New Energy Automobile are running into trade barriers set up by developed economies.

In May, the White House quadrupled ­tariffs on Chinese-made EVs, which now stand at 100 per cent.

Last month, the European Union said additional duties of 9 to 36.3 per cent would be applied to EVs imported from China, 11 months after it launched an anti-subsidy investigation into battery-powered cars assembled on the mainland.

A number of companies from BYD to Great Wall Motors are aggressively expanding production abroad with plans to build electric cars in or close to consumption markets as a way of avoiding high tariffs.

The ministry told the carmakers at the meeting that some countries who are inviting Chinese EV assemblers to build factories are not treating them fairly because the overseas governments are also erecting or considering trade barriers against vehicles made on the mainland.

Chinese EV makers are also engaged in a brutal price war at home.

In April, Goldman Sachs estimated in a research report that the profitability of the entire Chinese EV industry could turn negative this year if BYD were to slice another 7 per cent, or 10,300 yuan (US$1,447), off the price of its cars.

China’s economy isn’t becoming Japanified, at least not yet

https://www.scmp.com/opinion/china-opinion/article/3278189/chinas-economy-isnt-becoming-japanified-least-not-yet?utm_source=rss_feed

Is China at risk of turning Japanese? It is a question that has been asked repeatedly over the past decade as analysts and investors worry that China’s economy is vulnerable to the type of crisis that condemned Japan to decades of deflation and stagnant growth following the bursting of its asset bubble in the early 1990s.

The debate over the Japanification of China intensified last year when the country’s post-pandemic recovery stalled, undermined by a debilitating crisis in the property sector. The downturn exposed long-standing structural problems in the economy and gave rise to a loss of confidence among consumers and businesses that threatens to become self-fulfilling.

There are reasons to worry that China is going the way of 1990s Japan. Deflationary forces are taking root. Data published by the National Bureau o f Statistics shows that China’s core inflation rate, which strips out volatile food and energy prices, fell to just 0.3 per cent last month, its lowest level since March 2021.

More worryingly, a broader and more reliable measure of inflation known as the gross domestic product (GDP) deflator contracted for the fifth straight quarter in the second quarter.

The pernicious effects of deflation are already apparent. Real interest rates have risen dramatically, increasing the burden on debtors. As nominal growth has slowed, debt-to-GDP ratios have surged. Most troublingly, deflation has eaten into corporate revenues and profits, prompting many firms to cut costs and wages, and exacerbating the decline in household consumption. An economist at Morgan Stanley suggests this has created a vicious Japanese-style feedback loop of weak demand, deflationary pressures and mounting debts.

Fears that China has entered a “balance sheet recession” – a term used by Nomura Research Institute’s Richard Koo to describe Japan’s “lost decade”, in which a huge overhang of debt forced businesses and households to focus on deleveraging as opposed to investing and spending – have become more widespread.

The findings of a Bank of America’s recent China consumer survey show that the share of respondents who planned to spend more in the next six months fell to 30 per cent, down from 55 per cent in its April survey. China’s consumer confidence index, meanwhile, is just a whisker above its all-time low reached in November 2022 when the economy had yet to reopen.

A woefully inadequate policy response has added to concerns about Japanification. Last week, Yi Gang, the respected former governor of the People’s Bank of China, stuck his neck out by urging the government to take swift action to end deflation, partly through “proactive fiscal policy.”

Morgan Stanley says this requires a pivot towards stimulating consumption. “The longer the pivot is delayed”, the bigger the risk that “control over inflation and property price expectations is lost”.

Yet while the similarities with 1990s Japan are alarming, the differences are more important. To be sure, in some respects China’s current predicament is worse than Japan’s three decades ago. China is ageing more quickly than Japan was when the bubble burst. Moreover, its GDP per head is much lower than Japan’s in the 1990s, meaning that it is “becoming old and high[ly] indebted before it becomes rich,” said JPMorgan.

Furthermore, the geopolitical landscape is far more treacherous today, while the scope for large-scale stimulus in China in the coming years is much more limited than in Japan some 30 years before.

However, there are other differences that work in China’s favour. First, when Japan’s bubble burst, policymakers struggled to make sense of the crisis. China, on the other hand, has been studying Japan’s balance sheet recession for decades and is acutely aware of the dangers of allowing deflation to fester for too long. The question is whether Beijing is willing to do what it takes to stabilise the housing market, boost consumption and boost confidence in the economy.

Second, China has a much bigger domestic market, a much lower urbanisation rate, and much more catch-up growth potential than Japan, giving it more levers to pull to reflate the economy.

Third, although China’s property market is in deep crisis, the correction is less severe than in Japan partly due to long-standing price controls, leaving transaction volumes to bear the brunt of the downturn. Moreover, China’s state-owned financial system gives the government stronger control of both the asset and liability sides of the debt problem, JPMorgan notes, making it more likely that the country will avoid a banking crisis.

China’s largely closed capital account – another crucial difference – also minimises the threat of large-scale capital flight, further diminishing systemic risk. This is one of the reasons why China’s economic problems do not figure among the top “tail risks” in financial markets, according to the findings of Bank of America’s latest global fund manager survey.

Japan, meanwhile, having finally shaken off deflation, is now struggling to come to terms with the consequences of a surge in inflation amid persistently weak growth. One of the factors that forced Japanese Prime Minister Fumio Kishida to announce last month that he would not seek re-election as head of the ruling Liberal Democratic Party was a public backlash against the cost-of-living crisis. Wages have not kept up with the increase in inflation.

That Beijing needs to do much more to fight deflation is indisputable. But those worried that China resembles 1990s Japan and needs to unleash large-scale stimulus should pay more attention to the incipient stagflation that Japan is now enduring.

China, Philippines agree to keep talking after ‘candid’ Sabina Shoal discussions

https://www.scmp.com/news/china/diplomacy/article/3278211/china-philippines-agree-keep-talking-after-candid-sabina-shoal-discussions?utm_source=rss_feed

China and the Philippines described their latest round of high-level maritime talks as “candid”, with both sides agreeing to continue conversations.

China’s foreign affairs vice-minister Chen Xiaodong and Maria Theresa Lazaro, the Philippine undersecretary for foreign affairs, met in Beijing on Tuesday for the 10th cycle of the China-Philippines Bilateral Consultation Mechanism (BCM).

The BCM was established in May 2017 as a platform for the neighbouring states to discuss issues of mutual concern in the South China Sea and explore possible areas of cooperation. The most recent previous meeting was held in Manila in July.

According to a statement from the Chinese foreign ministry, both sides agreed to maintain communication through continued use of diplomatic channels, including the BCM.

Discussions covered the disputed atoll where the Philippine coastguard deployed the BRP Teresa Magbanua four months ago, claiming that China was carrying out reclamation around the shoal, the statement said.

The disagreement at Sabina Shoal has shifted focus from another South China Sea flashpoint between Manila and Beijing – the World War II-era BRP Sierra Madre that serves as a Philippine outpost at the disputed Second Thomas Shoal.

“The two sides had a candid and in-depth exchange of views on the maritime issues between China and the Philippines, in particular the issue of Xianbin Jiao,” – the Chinese name for Sabina Shoal, which is known in the Philippines as the Escoda Shoal.

“The Chinese side reiterated its principled position on the issue of Xianbin Jiao and urged the Philippine side to immediately withdraw relevant vessels,” it continued, adding that China will “firmly safeguard its sovereignty” and observe the Declaration on the Conduct of Parties in the South China Sea (DOC).

Two days before the talks, Beijing’s official mouthpiece People’s Daily published a commentary calling on Manila to “seriously consider the future” of a relationship “at a crossroads”.

Two Chinese navy tug boats – Nantuo 175 and 185 – spotted near the Teresa Magbanua by the Philippine coastguard led to speculation that Beijing was considering towing the vessels it regards as illegally deployed in its waters.

After the talks, Lazaro posted an all-smiles picture of the top officials on X and said they had “frank and candid discussions on managing the situation in the West Philippine Sea” – a reference to the portion of the South China Sea claimed by Manila as part of its exclusive economic zone.

“We agreed to continue discussions on areas of cooperation, especially on hotline mechanisms, coastguard cooperation, and marine scientific and technological cooperation.”

Lazaro added that she had reaffirmed the Philippines’ “consistent position” and explored ways to calm tensions.

The meeting’s conciliatory tone echoed the July talks, which included an agreement to extend the communication line between Beijing and Manila to include presidential representatives and top diplomats.

But the intervening weeks have seen growing tensions between the two countries, including three vessel collisions in August.

Manila’s Washington envoy Jose Manuel Romualdez hinted on Tuesday that a summit of at least 20 nations is planned on the sidelines of this month’s UN General Assembly in New York to seek ways “to talk some sense” into China over the confrontations.

China creates ‘concerto’ of rules for insurance sector, promotes long-term investment

https://www.scmp.com/economy/policy/article/3278220/china-creates-concerto-rules-insurance-sector-promotes-long-term-investment?utm_source=rss_feed

China has taken steps to mitigate financial risks by tightening regulations around the insurance sector, encouraging the development of so-called patient capital and boosting investment in the technology sector.

The country’s cabinet, the State Council, on Wednesday issued a 10-point document outlining comprehensive regulations for the insurance industry, using strong wording like “long teeth with thorns” and “angular” to describe the stricter measures.

The plan also aims to boost the insurance sector’s investment in emerging industries, advanced manufacturing and new infrastructure - key areas that Beijing sees as vital to countering the effects of weak domestic demand and external economic risks.

“We need to fully leverage the long-term investment advantages of insurance funds, foster genuinely patient capital, and promote a virtuous cycle between funds, capital, and assets,” the document said.

Patient capital refers to funds oriented towards the longer term with greater risk tolerance, and it has recently taken on more meaning in China’s official discourse, as state assets and securities watchdogs have called for longer-term financial resources to be pooled into key sectors.

Additionally as part of the new regulations, Beijing will tighten the vetting process for insurance companies entering the market, including scrutinising the backgrounds of managers and shareholders.

The 10-point guidelines are “composing a concerto of strict regulation, risk prevention and development promotion,” Soochow Securities analysts led by Hu Xiang said on Thursday.

It will also establish an information database to conduct background checks on key personnel in the insurance industry, aiming to prevent the transfer of problematic individuals within the sector.

Beijing’s approach to the vast financial sector has shifted significantly, when it issued 10-point documents in 2006 and 2014 aimed at expanding the sector’s size.

However, amid China’s economic downturn, declining investment, falling market interest rates and shareholder defaults, issues related to governance, capital utilisation and returns in the insurance sector have become more pronounced.

The 30 trillion-yuan (4.2 billion) industry now poses a growing threat to the country’s financial stability.

To further mitigate and share risks, Beijing will support high-quality foreign insurance institutions in establishing operations in China and encourage qualified foreign entities to invest in domestic insurance firms, according to the new regulations.

Additionally, it will urge Chinese insurance companies to steadily expand their overseas business.

According to the government’s outlook released as part of the regulations, the insurance industry - whose total assets were equivalent to more than 22 per cent of China’s gross domestic product last year - is expected to achieve stable asset allocation and adequate solvency by 2029.

By 2035, the sector also aims to establish a comprehensive market structure with strong international competitiveness, according to the outlook.

Profits in the insurance industry, though, continue to decline due to the economic downturn and falling interest rates, impacting insurers’ ability to meet their obligations.

While premium incomes in 2023 grew by 9.13 per cent, investment yields reached their lowest level since 2008.

China has at least 600 billion yuan (US$84 billion) in risky assets within the insurance industry, according to Chinese media outlet Caixin in March.

China kindergarten criticised for asking parents to collectively pledge not to behave uncivilly

https://www.scmp.com/news/people-culture/trending-china/article/3277923/china-kindergarten-criticised-asking-parents-collectively-pledge-not-behave-uncivilly?utm_source=rss_feed

The head of a kindergarten in northern China was suspended after a viral video captured her organising parents to pledge to “not be bear parents” and to show respect for teachers.

The principal, identified only by her surname Wang, gathered dozens of parents on September 2 at Hanlin Kindergarten in Shanxi province, where they all placed their right hands on their hearts to take an oath, as reported by Yellow River News.

Among their vows were commitments to “never use WeChat to request that teachers hydrate or change clothes for my child” and “never get angry when my child sustains a small bruise from playing at school.”

Other promises included not threatening punishment at school for misbehaving at home, or blaming the school if their child gets sick.

“Whatever the circumstances, never scowl at teachers. Communicate with teachers positively. We must trust teachers, for they have looked after more children than us and are professionals,” the parents swore, adding: “Don’t be a bear parent.”

The term “bear parent” is borrowed from the common Chinese slang “bear child”, which describes naughty or undisciplined children.

The parents’ pledge, which quickly went viral across China, sparked a national discourse about parent-teacher relationships. The story has attracted 13 million views on Weibo.

“This kindergarten is extremely arrogant!” exclaimed one online observer on Douyin, reflecting the intense public reaction to the pledge. “Is the principal hoping that the kindergarten goes bankrupt? Look at what she is doing.”

Another commented: “Is the kindergarten crazy? Who gave the principal power to educate parents? This pledge is meaningless.”

However, many netizens showed understanding of the school’s position, emphasising the need to consider the teachers’ perspective. “Let’s imagine the teachers’ standpoint. They work hard, and we must understand them,” one commenter noted.

In light of the public scrutiny, Wang expressed her surprise at the controversy surrounding the pledge. She told the media that she had not anticipated such a strong reaction from the community.

“Our intention is to set up rules of communication between parents and teachers so that parents won’t ask unnecessary questions to disturb our teachers’ work,” she was quoted as saying.

For example, teachers will organise children to drink water nine times a day, so parents do not need to remind teachers.

The local education authority, in response to the controversy, issued a statement on September 4 that criticised the kindergarten and announced the suspension of its principal from her job.

“The pledge content is not appropriate. We are conducting an investigation,” stated a representative from the local education department.

News about kindergartens in China frequently makes headlines.

A kindergarten principal in southwestern Chongqing municipality was sacked last year for accepting a small gift worth only six yuan (85 US cents) from her pupil to mark the annual Teachers’ Day. She sued her former employer and won the case. The school was ordered to pay her compensation.

Profits for Chinese firms fall in second quarter; trend seen reversing in fourth

https://www.scmp.com/business/china-business/article/3278207/profits-chinese-firms-fall-second-quarter-trend-seen-reversing-fourth?utm_source=rss_feed

Mainland-listed companies reported a collective decline in profit for the second quarter, due in part to a weak domestic economy, though some veteran analysts believe growth could resume in the final period of the year.

Profits for the 5,350 companies trading on the Beijing, Shanghai and Shenzhen stock exchanges fell 1.5 per cent from a year earlier – and revenue dropped 2 per cent – according to Huafu Securities. That compared with a 4 per cent profit decline in the first quarter, a reversal after two periods of increases.

The lacklustre earnings season, which concluded last month, dealt another blow to investor confidence, which was already low because of a raft of disappointing economic data and a dearth of major stimulus measures. The latest macroeconomic reports showed China’s deflationary trend has persisted, the manufacturing industry shrank and the services sector has slowed. China’s benchmark CSI 300 Index has erased any gains made due to buying from the government earlier this year, and it is headed toward its lowest point in more than five years.

“The double declines in revenue and profit reflected the pain of China’s economic transition,” said Zhu Bin, an analyst at Huafu Securities. “Stock valuations have been squeezed over the past two years. Those sectors whose fundamentals will improve going forward will draw the attention from investors.”

The best performers sectors in the second quarter were carmakers and electronics manufacturers, which benefited from the rise of electric vehicles and a recovery in the global semiconductor industry, according to the brokerage. While food and drink companies and appliance makers recorded greater profits, their growth moderated, reflecting weak consumer demand that could linger into the third quarter, the brokerage said.

Property developers and makers of building materials were among the worst performers, a reflection of the ongoing misery in the housing market, despite the introduction of a rescue package that included cutting mortgage rates and the down-payment ratio, Huafu said. Steelmakers and coal producers, which are closely tied to the strength of the economy, also reported declining profits.

The darkest moment might come in the third quarter, when revenue for listed companies is expected to continue its decline, before the trend reverses in the final period of the year, according to Chen Li, chief economist at Soochow Securities in Shanghai. Both revenue and profits will probably return to growth in the fourth quarter, he said, which will mark the bottom for the stock market.

Chen said his argument was based on historical data showing that revenue declines for listed Chinese companies have never spanned across more than three quarters.

His view is echoed by UBS Group. A strategist from the Swiss bank, James Wang, expects 7 per cent full-year profit growth for companies on the MSCI China Index, which tracks 655 firms trading both overseas and domestically.

That prediction implies that second-half earnings growth would accelerate from the first six months of the year. China’s slightly higher fiscal spending, a lower year-earlier base of comparison and the nation’s trade-in programme for equipment would drive the growth pickup, Wang said.

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South China Sea: Philippines, Beijing hold ‘frank’ talks amid Sabina Shoal feud

https://www.scmp.com/news/asia/southeast-asia/article/3278172/south-china-sea-philippines-beijing-hold-frank-talks-amid-sabina-shoal-feud?utm_source=rss_feed

The Philippines reaffirmed its position on Sabina Shoal in the South China Sea even as it agreed with China to explore ways to lower tension in the area, its foreign ministry said on Thursday.

Manila and Beijing held another round of talks under its bilateral consultation mechanism in China on September 11, where the two nations also “agreed to continue discussions on areas of cooperation, especially on hotline mechanisms, coastguard cooperation, and marine scientific and technological cooperation,” the ministry said in a statement.

The Chinese foreign ministry, in a statement on the talks it issued on Wednesday night, said it reiterated its demand for the immediate withdrawal of a Philippine vessel and vowed to “firmly uphold its sovereignty”.

The talks, which both sides described as “frank”, come at a time of heightened tensions in Sabina Shoal, where both the Philippines and China had accused each other of ramming their vessels last month.

The Philippine coastguard has anchored its Theresa Magbanua vessel since mid-April on suspicion that China was undertaking reclamation activities around the shoal.

The Philippine military also said on Tuesday it monitored 207 ships in the contested waters over the past week, the highest number this year, with a sizeable flotilla spotted near Sabina Shoal.

The Philippines and China last held bilateral consultation mechanism talks in July, where they reached a “provisional arrangement” on Manila’s resupply missions to soldiers stationed in a beached naval vessel in Second Thomas Shoal.

China claims sovereignty over most of the South China Sea, overlapping into maritime zones of the Philippines, Vietnam, Malaysia and Brunei.

A 2016 arbitral tribunal award had voided China’s expansive and historical claims, a decision Beijing has rejected.

Central Asia: China touts ‘universal security’ at forum to counter terrorism, crime

https://www.scmp.com/news/china/diplomacy/article/3278141/central-asia-china-touts-universal-security-forum-counter-terrorism-crime?utm_source=rss_feed

China has held its first ever public security ministers’ meeting with Central Asian countries as Beijing looks to protect belt and road interests in the region.

China’s Minister of Public Security Wang Xiaohong met his counterparts from Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan for the inaugural Conference of Global Public Security Cooperation Forum on Tuesday in Lianyungang, in the eastern province of Jiangsu.

The forum on public security and internal affairs was intended to “establish a sense of a security community and deepen strategic mutual trust and cooperation”, Wang said.

“China is willing to enhance the capability for counterterrorism and transnational crime fighting, and build an efficient and pragmatic cooperation platform with Central Asian countries to achieve the vision of universal security,” Wang said.

The meeting came a year after the launch of the China Central Asia Summit, which expanded Beijing’s cooperation with its neighbours beyond trade and investment into security and stability.

“All parties should … ensure the security of major projects under the Belt and Road Initiative, enhance the capability for counterterrorism and transnational crime fighting, and build an efficient and pragmatic cooperation platform,” Wang added.

The meeting was a bid to ensure Central Asia is “stable, peaceful and thriving”, according to Zoon Ahmed Khan, a research fellow at Tsinghua University’s Belt and Road Strategy Institute in Beijing.

Khan said the dialogue was an extension of a previous consensus “to continue tackling the three evil forces, help CARs [Central Asian Republics] build capacity in addressing security challenges, and upgrade their expertise and equipment to tackle new transnational threats”.

The “three evils” is a Beijing euphemism to describe terrorism, separatism and religious extremism.

In June, China signed an agreement with landlocked Kyrgyzstan and Uzbekistan to build a key railway linking the three countries. The project, now part of the belt and road strategy, was first proposed in the 1990s but was stalled by technical, political and geopolitical issues.

The 523km (325-mile) link will provide China with an alternative route to Europe, without passingthrough Russia, which has recently warmed to China’s projects in its backyard through collaborations between the belt and road and the Eurasian Economic Union.

One of the belt and road’s objectives is to enhance land links across Asia, Africa and Europe.

The China Central Asia Summit – a “permanent body for multilateralism” – was the basis on which Tuesday’s talks were built upon, according to Khan.

“From security and development, to agriculture, trade, tourism, the quality and frequency of exchanges between both sides will be aimed at tangible outcomes in terms of the relations and mutual gains,” Khan said.

Kyrgyz Parliament Speaker Nurlanbek Shakiev will lead a delegation to China on Friday at the invitation of Zhao Leji, chairman of the National People’s Congress Standing Committee.

The ministerial conference on security cooperation was held concurrently with the Global Security Forum, which is billed as a platform to improve global security governance and promote durable peace.

Law enforcement representatives from 122 countries and regions, as well as international organisations such as Interpol, took part in that event.

“Security and development from the perspectives of China, Central Asia and the Shanghai Cooperation Organisation (SCO) are deeply intertwined,” Khan said.

“Central Asia is the starting point of the belt and road, and a critical region in the SCO.”

Apple starts iPhone 16 production in India, diversifying supply chain away from China

https://www.scmp.com/week-asia/economics/article/3278143/apple-starts-iphone-16-production-india-diversifying-supply-chain-away-china?utm_source=rss_feed

Apple’s decision to produce its newly launched iPhone 16 series in India marks a significant shift in the tech giant’s strategy as it looks to diversify its supply chains amid geopolitical challenges, analysts say.

Historically, the California-based company has relied on China to manufacture and produce all of its high-end smartphone models, while Indian suppliers primarily handled low-end and older versions of the iPhone.

However, new reports indicate that Apple is mass-producing its latest iPhone line-up, including the high-end Pro series, on a large scale in India alongside production in China.

The initiative could be part of Apple’s efforts to build resilience in its supply chain outside China, as relations between Beijing and Washington sour, analysts say, but it also shows increased confidence in India’s hi-tech manufacturing capabilities.

“These moves reflect a broader shift unfolding where major tech companies like Apple, Microsoft, Amazon are moving production away from China, given various security and economic risks,” said Karthik Nachiappan, a research fellow at the National University of Singapore’s Institute of South Asian Studies.

“India’s in a prime position to support this shift and has been doing so through a set of policies, incentives and subsidies,” he added.

At the forefront of these efforts is India’s Production Linked Incentive (PLI) scheme, which offers subsidies to major tech hardware companies, including Apple supplier Foxconn Technology Group and computer giant Lenovo Group, to boost domestic manufacturing.

Apple first started assembling iPhones in India in 2017, and has ramped up production in recent years.

According to market research firm Canalys, Apple produced nearly 15 million iPhones in India in 2022, rising to 25 million last year, or about 12 per cent of all phones produced.

In the first half of 2024, Apple produced at least 18 million phones in India and is projected to account for 23 per cent of its total production volume by the end of 2025.

“With the Pro-series now being manufactured in India, it’s clear that Apple’s production capabilities in the country are becoming more efficient,” said Sanyam Chaurasia, a senior analyst at Canalys.

In June of last year, Apple CEO Tim Cook and other tech executives met India’s Prime Minister Narendra Modi, and highlighted that the South Asian country represented a “huge opportunity”.

On Tuesday, American electronic components maker Jabil said it would establish a manufacturing plant in the southern Indian state of Tamil Nadu with an investment of 20 billion rupees (US$238 million). It will join several Apple suppliers already based in Tamil Nadu, including Foxconn and Pegatron.

It is a “rational” move for US-based companies like Apple to expand production locations, especially given the risk of heightened tensions following the coming US presidential election, according to Nachiappan.

“So better to start preparing and moving forward given that reality,” he said.

China remains an essential market for Apple, but sales have had a difficult start to the year, with the US smartphone maker facing strong competition from domestic manufacturers like Huawei Technologies.

A report by Counterpoint Research in March revealed that iPhone sales in China fell by 24 per cent in the first six weeks of 2024.

As Apple seeks to diversify its markets and supply chains, India and Vietnam have emerged as the biggest beneficiaries, although analysts assert that China will remain a vital production hub.

Chaurasia from Canalys predicts that manufacturing in India and Vietnam are likely to expand into other product categories, but ultimately, Apple will want to “maintain a balanced approach”.

“In the long term, China will remain a key hub due to the increasing complexity of device manufacturing and the difficulty in training skilled labour,” he said.

Although India has expanded its supply networks, it focuses only on final product assembly, while China excels in multiple aspects of the production and manufacturing process.

Most iPhones continue to be assembled in China, and experts note that Apple will face challenges to continue its expansion in India. A key issue is the slow learning curve in training a skilled workforce, especially as device designs become increasingly more complex, according to Chaurasia.

Nachiappan noted that Apple and its main supplier Foxconn must establish more sustainable and viable supply chains to improve production, which will involve prioritising the upskilling of labour.

India’s strained relationship with China could also affect its manufacturing capacity, as imports from China are subject to tariffs and stricter monitoring.

Ultimately, Nachiappan noted, it remains to be seen whether India will work with Apple and its suppliers to establish a complete supply chain in the country or continue to focus primarily on assembly.

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LandSpace’s Zhuque-3 reusable rocket test a ‘breakthrough’ for China space race

https://www.scmp.com/news/china/science/article/3278193/landspaces-zhuque-3-reusable-rocket-test-breakthrough-china-space-race?utm_source=rss_feed

Beijing-based company LandSpace set the stage for next year’s maiden flight of its reusable Zhuque-3 rocket with a 10km (6-mile) vertical take-off, vertical landing (VTVL) test in China’s Gobi Desert on Wednesday.

The 200-second test flight was also the first time engine reignition – a critical deceleration phase in rocket recovery – was tested in China, in what state broadcaster CCTV called a “breakthrough” for the country’s commercial space sector.

Dai Zheng, commander of the Zhuque-3 project, said the test validated in-flight engine cut-off and restart, as well as other key technologies including joint guidance and control, as well as precise landing.

The test marked a “crucial step” towards low-cost, high-frequency space launches, said Dai in the CCTV report. “We have verified these core technologies in advance, laying a solid foundation for the flight and recovery of the rocket.”

An engineer from the Zhuque-3 team, speaking anonymously to the South China Morning Post, said that Wednesday’s test – which was postponed three times before going ahead – exceeded expectations.

However, the technologies still lag significantly behind industry leaders like the Texas-based rocket company SpaceX, he said. “China may have its own Falcon 9 rocket in five years and Starship in 20 years. We need to work hard to catch up.”

Wednesday’s test rocket was 18.3 metres (60ft) tall and powered by a single Tianque-12B engine, independently developed by LandSpace. The Zhuque-3 will eventually stand at 76.6 metres (251ft), with nine Tianque-12B engines.

Around 113 seconds after lift-off from the Jiuquan Satellite Launch Centre in northern China, the engine shut down and the test rocket coasted on inertia to its peak altitude of 10,002 metres (32,800ft), the company said on its WeChat account.

The engine was fired again for deceleration and landing during the rocket’s descent at 4,640 metres (15,200ft) above the ground. The test rocket landed precisely – less than two metres from the landing pad’s centre – 3.2km (two miles) from the launch site.

The two-stage Zhuque-3 will be China’s first stainless steel liquid propellant rocket, using methane and liquid oxygen to produce a combined thrust of 900 tonnes at lift-off.

Designed to deliver up to 21.3 tonnes to low Earth orbit for single-use missions and 18.3 tonnes for recovery missions, the developers expect the rocket’s first stage will be reused at least 20 times.

A successful maiden flight in 2025 – the company’s stated goal on its WeChat account – would position LandSpace as a strong competitor in China’s broadband satellite constellation launch services.

Along with other reusable rockets being developed in China, Zhuque-3 will support the high-frequency launches for China’s broadband internet constellations, including Guo Wang and Thousand Sails, each eventually comprising more than 13,000 satellites.

HSBC tops Nestle as world’s best dividend payer while China Mobile leads Hong Kong peers

https://www.scmp.com/business/banking-finance/article/3278057/hsbc-tops-nestle-worlds-best-dividend-payer-while-china-mobile-leads-hong-kong-peers?utm_source=rss_feed

HSBC Holdings emerged as the world’s largest dividend payer during the second quarter of this year, while growth in the Asia-Pacific region lagged behind the rest of the world during the period, according to asset manager Janus Henderson Investors’ latest global dividend index.

The largest bank in Europe and Hong Kong topped the dividend-payout list with a total disbursement of US$11.7 billion for the June quarter, aided by a US$4 billion special dividend with proceeds from the sale of its Canadian operations. That was the single largest special dividend in the world during the quarter, accounting for nearly a third of the global tally.

The British bank’s payout increased following a call from its largest shareholder, Ping An Asset Management, who urged HSBC to improve its dividends last year.

Some individual Hong Kong shareholders backed by Ping An had sought a return to the annual pre-pandemic payout of 51 US cents a share, which was distributed for four years from 2015. The bank cancelled its fourth-quarter 2019 dividend and the payout for all of 2020 at the request of the UK regulators, who wanted HSBC and other British banks to shore up their balance sheets during the pandemic.

HSBC set a 2023 dividend of 61 US cents per share, its highest full-year payout since 2008. This year’s forecast is for 71 US cents a share, according to Morningstar.

HSBC outranked consumer goods producer Nestle, the world’s biggest mobile phone carrier China Mobile and German carmaker Mercedes Benz Group in the global list. Allianz SE, BNP Paribas, Microsoft, Stellantis, Sanofi and Axa completed the top 10 members.

China Mobile, which has the biggest base of cellular subscribers, topped the list in Hong Kong. It paid out US$6.3 billion in the second quarter, according to Janus Henderson’s report, which was published Tuesday.

The total dividend payout in the second quarter for Hong Kong companies was generally in line with the 1.1 per cent growth for the Asia-Pacific region excluding Japan, primarily constrained by substantial cuts from shipping giant Cosco.

The payout in the Asia-Pacific ex-Japan region rose to US$39.5 billion, while global dividends jumped 8.2 per cent to a record US$606.1 billion, the report said.

A drop in Australia and relatively flat growth in Hong Kong led to a subdued expansion in dividends among APAC companies, but the region’s outlook for the year is brighter as government policies are expected to boost corporate confidence, according to Sat Duhra, a portfolio manager for Asian dividend income at Janus Henderson.

“From the viewpoint of our Asian income portfolios, we have seen some of the largest increases in dividends in recent years”, Duhra said. “The government push for dividends in some of our markets should not be underestimated.”

He added that some Asian governments are “at the beginning of a multi-year focus on dividend growth.”

In April, China’s State Council released a document with nine guidelines that pledged better investor returns and a new round of reforms for state-owned enterprises, in an effort to support the country’s US$9 trillion stock market.

China’s collective dividend payout in the second quarter rose to US$6.3 billion, an increase of 37.4 per cent from a year earlier on an underlying basis that is adjusted for special dividends, currency changes, timing effects and index changes.

In South Korea, the government rolled out a programme in February and May to help tackle the comparatively low valuations in its domestic stock market. South Korean companies’ dividends grew 12.6 per cent on an underlying basis to US$9.3 billion in the second quarter.

“The ‘Value-Up’ corporate reform in Korea and initiatives such as the ‘nine-point’ plan in China have boosted dividends for a wide range of names, this should be evident in the coming year”, Duhra said.

Australia recorded a 24.3 per cent decline in payouts during the second quarter, which is “not seasonally very important”, and its effect on the whole year will “be more muted”, according to the report.

Elsewhere, Singapore and Taiwan recorded double-digit growth in total payouts. Taiwan was led by banks, motor manufacturers and Taiwan Semiconductor Manufacturing (TSMC). Singapore rose 15.2 per cent to US$5 billion, with DBS contributing US$2.1 billion. Taiwan grew 27.1 per cent to US$3.9 billion, with TSMC chipping in US$2.8 billion.

Janus Henderson predicted global dividend payments in 2024 would increase by 6.4 per cent to US$1.74 trillion.

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Indonesia’s US$20 billion Bali LRT raises eyebrows over heavy China reliance

https://www.scmp.com/week-asia/economics/article/3278133/indonesias-us20-billion-bali-lrt-raises-eyebrows-over-heavy-china-reliance?utm_source=rss_feed

A US$20 billion underground light rail project in Bali promises to be a boost for its tourism, but analysts say Indonesia’s reliance on Chinese contractors and the resort island’s cultural and spatial regulations could pose significant hurdles.

Dubbed the Bali Urban Subway, the project is overseen by PT Sarana Bali Dwipa Jaya (SBDJ) and will be built by local firm Indotek and the China Railway Construction Corporation (CRCC), the project’s main contractors, and PT Sinar Bali Bina Karya.

“We chose CRCC because it has a reputation as a global rail transport contractor, which has experience building 200,000km in more than 100 countries,” SBDJ President Director Ari Askhara told reporters during the groundbreaking on September 4 involving a ngeruwak, a Hindu ritual to cleanse a construction area before the project’s first stone was laid.

The LRT marks another milestone for state-owned companies from China, strengthening their grip on Indonesia’s infrastructure market, particularly in public transport. CRCC was one of the contractors that launched the US$7.2 billion Jakarta-Bandung high-speed railway, a flagship Belt and Road Initiative project in Indonesia, for commercial operations last year.

“This shows the closeness between Indonesia and China, between government to government and government to businesses,” said Bhima Yudhistira, executive director at Jakarta-based economic and policy research think-tank Center of Economic and Law Studies.

“But why was it given to China? It should be done by those who do the feasibility study. It’s more likely because that is [Indonesia’s] preference, that China will be a priority [partner], especially in the development of public transport in the future.”

The Jakarta-Bandung high-speed railway caused an uproar when Indonesia announced in 2015 that its project partner would be China. Japan, Indonesia’s long-time infrastructure partner, had earlier completed a feasibility study for the project.

In the case of the Bali Urban Subway, South Korea did a feasibility study in January 2023 and submitted it to the Indonesian government in June.

“We ask for the full support of the South Korean government to Korea Eximbank, Korea National Railways, and other related parties so that Bali can enjoy better mass transport,” Indonesian Transport Minister Budi Karya Sumadi said in a statement on January 12 after he met with his South Korean counterpart Sangwoo Park.

On Monday, Budi told reporters that South Korea remained keen to invest in the project but did not elaborate.

Bhima said CRCC’s involvement in the Bali LRT development has highlighted Indonesia’s growing economic dependency on China, whether for funding or technology.

“It is detrimental because there are special preferences enjoyed by China and its companies. For Indonesia, which must diversify its trading and investment partners, this preference for China increasingly limits Indonesia from being able to embrace other countries fairly and transparently,” he added.

Besides the Bali LRT and the Jakarta-Bandung high-speed railway, Chinese companies have also made inroads in other areas of the local transport sector.

In July, PT Kereta Api Indonesia requested a budget of 1.8 trillion rupiah (US$116.4 million) to procure 11 train sets from the China Railway Rolling Stock Corporation to replace the ageing Jakarta electric rail system.

Indonesia has also announced plans to buy three China-made trains for an autonomous rail transit system in Nusantara, the new capital city in Borneo, each costing 70 billion rupiah.

In 2022, it was reported that China Construction First Group Corp. Ltd would fund the development of the North Bali Airport, which was delayed in February 2023 due to a lack of supporting infrastructure.

When the Jakarta-Bandung high-speed railway project was announced in 2015, President Joko Widodo vowed not to fund it through the state coffers, but Jakarta later confirmed it would finance the project, including the US$1.2 billion cost overrun. In comparison, the Bali LRT system is set to be fully funded by investors, the Bali government has said.

Besides the hefty price tag of the Bali LRT system, analysts are concerned about traffic jams during the project’s construction.

“As a tourist destination, Bali has limitations in the form of minimal road-based public transport, limited width and length of roads and the absence of integrated mass transport modes,” said Aditya Dwi Laksana, head of the railway sector of the Indonesian Transportation Society, an organisation comprising transport experts.

“The plan to build rail-based mass transport such as LRT or MRT, whether built on the surface or underground, is worth welcoming. However, the investment costs for construction are very high and take a long time, as well as the high impact of traffic congestion that occurs during construction due to limited road space.”

Due to Bali’s spatial and infrastructure constraints, it would not be easy to develop modern transport technology on the island, said Putu Rumawan Salain, a spatial and urban expert from the University of Warmadewa in Denpasar.

“The planning of the cities in Bali still follows planning in the past, when people used horses and chariots, so the distances [between buildings] are short, the roads are narrow, and the houses are dense,” Putu said. The narrow roads are also why the people of Bali typically shun public transport in favour of two-wheelers, according to Putu.

“We have tried introducing public transport with buses. It was a bit of a failure, I am afraid the bus [transit system] is burning money without any benefit to the community.”

Microbuses and mini buses were the right mode of transport for the island’s narrow roads, Aditya said.

Development projects in Bali have to follow rules such as protection of temples and a ban of any building taller than a coconut tree, or 15 metres. These rules mean that the planned rail transit system would have to be built at least 30 metres underground, according to the National Planning Agency overseeing the country’s major infrastructure projects.

Gusti Ngurah Rai Suryawijaya, vice-chairman of the Indonesian Hotel and Restaurant Association in Bali, said the LRT would be underground and not disrupt Bali. It would provide a respite for tourists put off by the challenges of moving around the island, he added.

“Hotel guests have complained about traffic jams in Bali. It can have a negative impact on the image of tourism itself.”

Proposed flyovers to smoothen traffic flow did not take off in the past as locals were afraid that it would affect the annual Melasti ceremony, which involves Hindu devotees carrying a religious statue by foot, according to Suryawijaya. During the ritual, it is common for cars to be stuck on the road for hours.

The LRT’s first stage, which will connect Bali Airport and a central parking area in Kuta, is expected to be operational by 2028. Foreign tourists using the LRT have to buy a weekly pass costing around US$35 to US$40 while it is free for Balinese.

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Confidence of US firms in China wanes as record numbers cut investments amid hardships

https://www.scmp.com/economy/global-economy/article/3278127/confidence-us-firms-china-wanes-record-numbers-cut-investments-amid-hardships?utm_source=rss_feed

American firms in China appear to have soured on the business climate and prospects, an annual survey by a leading business chamber has found. But potential investments are seen “waiting at China’s door”, despite the nation’s patchy economic recovery complicated by geopolitical fickleness in a presidential election year for the United States.

The China Business Climate Report, compiled by the American Chamber of Commerce in Shanghai based on the feedback from 306 members in Shanghai and elsewhere in eastern China, showed on Thursday that their confidence has continued to wane.

This is marked by all-time-low metrics on performance and perception compared with previous years’ findings: 66 per cent of the respondents were profitable in 2023, down from 68 per cent in 2022; while only 47 per cent remained optimistic about China’s five-year outlook in 2023, down from 52 per cent a year earlier.

Only 13 per cent of them still ranked China as their top investment choice, compared with 17 per cent in 2022, while a record-high 25 per cent of respondents cut investment in the country last year.

American businesses see the strained ties between the two countries or broader geostrategic tensions as the biggest challenge to both their China operations and China’s potential growth, on top of concerns over China’s economic slowdown, according to the report.

“Many members have spent decades building their brands in China and must now manage a changing environment that may require them to make tough near-term decisions as they adjust to navigate new markets and geopolitical dynamics,” said Allan Gabor, chair of AmCham Shanghai.

More than two-thirds of companies are following a de-risking strategy like segregating China and non-China data and information, with 40 per cent of respondents redirecting planned investments to Southeast Asia and the Indian subcontinent.

That said, in calling for Beijing to press ahead with opening its markets further – a pledge that has been reaffirmed by top leadership – the survey revealed that among those respondents whose industries are not yet fully open, 56 per cent would increase China-bound investments if provided with greater market access.

Jeff Yuan, tax markets leader at PwC China, said in the survey report that although foreign companies face increasing economic headwinds and fierce competition, staying in China is crucial for them to remain globally competitive.

“The large amount of potential investment waiting at the door, hingeing on further market reform, is a testament to foreign firms’ dedication to this market,” Yuan noted.

Meanwhile, the Chinese government’s efforts to optimise the regulatory environment have also been recognised, with a higher rate of US businesses this year noting improvements in policies and regulations, as well as more transparency. Also notably, nearly one-third of surveyed companies said China’s enforcement of intellectual property rights improved last year.

While hoping for more pro-market reforms from Beijing, US firms in China also would like the US government to avoid relying on tariffs, tit-for-tat behaviour and aggressive rhetoric.

“[Washington should] instead engage with the business community on how to support bilateral cooperation,” the report suggested.

When asked how the US government could support foreign firms in China, close to half suggested Washington should reduce tariffs on Chinese goods.

“We encourage both governments [in Washington and Beijing] to continue to engage in bilateral talks so as to stabilise the relationship,” said AmCham Shanghai president Eric Zheng.

Furthermore, half of respondents saw higher revenue in 2023 than the year prior and said that revenue expectations for this year were cheerier, with 54 per cent expecting revenue to rise over last year. Operating margins also rose for 40 per cent of companies in 2023 – a slight improvement from 2022’s result of 37 per cent.

Bill reviving US Justice Department’s ‘China Initiative’ passes House of Representatives

https://www.scmp.com/news/china/article/3278161/bill-reviving-us-justice-departments-china-initiative-passes-house-representatives?utm_source=rss_feed

Two Republican bills that would revive the US Justice Department’s “China Initiative” and increase scrutiny of Chinese property purchases passed the House of Representatives on Wednesday, as the White House expressed opposition to both.

The bills, as well as a third concerning the World Health Organization, were passed as part of “China Week”, a House Republican-led effort to advance China-related legislation. About two dozen bills targeting Beijing’s economic, political and technological influence have already been passed since Monday.

All legislation that passes the House must also clear the full Senate before it can be sent to the president’s desk to be signed into law.

The first bill, sponsored by Representative Lance Gooden, Republican of Texas, would launch a six-year “CCP Initiative” under the Department of Justice to curb spying of US intellectual property and academic institutions as well as develop an enforcement strategy concerning researchers in labs and universities. It passed 237-180.

Citing China as responsible for the majority of trade theft against the US, Gooden said the bill aims to resurrect the China Initiative launched in 2018 during Donald Trump’s administration – which, similarly intended to combat economic espionage, was widely criticised for leading to misguided, racially motivated and excessive prosecutions.

The initiative was scrapped by US President Joe Biden’s administration in February 2022, with the department pledging to use a “broader approach” beyond just focusing on the threat from Beijing.

According to the Department of Justice, only eight of 28 China Initiative cases resulted in convictions or guilty pleas as of August 2021. Four of the convictions or pleas related to academic fraud, and four related to economic espionage and trade theft. As of 2024, an archived department webpage identified 58 cases tied to the China Initiative – a list believed to be incomplete.

Meanwhile, the initiative led to widespread fear among Chinese-American scientists.

“The trauma of my experience lingers to this day,” said MIT mechanical engineering professor Gang Chen, one of the targeted – and later vindicated – Chinese-American researchers, at a presidential campaign event last week for Vice-President Kamala Harris. “I was charged for standard academic activities such as writing letters of recommendation for students.”

“The China Initiative created an atmosphere of fear among scientists, drove out and deterred highly talented individuals from coming to [the] US, and harmed our country’s leadership in science and technology,” he added.

On Tuesday, Chen joined Representative Judy Chu, the California Democrat who chairs the Congressional Asian Pacific American Caucus, to oppose Gooden’s bill.

Speaking on the House floor, Chu said the China Initiative had been reflective of “the new McCarthyism” and responsible for “racially profiling innocent Asian-American scientists because of their ethnicity”.

The second bill, sponsored by Representative Dan Newhouse, Republican of Washington, would add the secretary of agriculture to the Committee on Foreign Investment in the United States (CFIUS), an inter-agency body responsible for screening international mergers and acquisitions for national security concerns. It passed 269-149.

Newhouse’s legislation would require the secretary to report to CFIUS purchases of agricultural land by “a foreign person” from China, Iran, North Korea or Russia.

“The Communist Chinese Party is planting roots in our homeland and working around the clock to infiltrate our institutions,” Newhouse said on Wednesday. “Today, we are taking an important step in keeping them out.”

Newhouse said that Chinese acquisition of agricultural land in the US had grown “tenfold in the last decade”. As of 2022, foreign ownership accounted for about 3 per cent of privately held agricultural land in the US, and Chinese entities owned less than 1 per cent of that amount.

Foreign governments cannot directly own land in the US, though Republican lawmakers counter that “there is no such thing as a private company in China”.

Democrats speaking in opposition to the bill said that it would excessively expand the type of transactions the agriculture secretary would be required to report.

The “broad definition of foreign persons” in the bill “opens the door to treating immigrants as national security threats solely because of their country of origin, and harms Asian American communities across the board,” said Representative Mark Takano of California.

Bills to restrict Chinese property ownership have been introduced or have become law in a number of US states in recent years. Earlier this week, members of the Chinese community in Texas spoke at a state hearing about the potentially harmful consequences of proposals to revive a controversial bill that would restrict Chinese citizens from purchasing property in the state.

The Biden administration takes issue with both Gooden and Newhouse’s bills. In a statement Tuesday, the White House said that it “strongly opposes” Gooden’s bill, despite remaining “committed to winning the economic competition of the 21st century against China”.

“Grouping cases in the manner contemplated by this legislation would undermine [the Justice Department’s] ability to investigate and prosecute such criminal activity, including by making it more difficult for the department to obtain cooperation from victims and witnesses,” it said.

As for the Newhouse bill, the White House said Wednesday it supports a role for the secretary of agriculture on CFIUS – who, it notes, is already included through an interdepartmental agreement – but that it opposes the bill because it “differs in several material and meaningful ways that are inconsistent with CFIUS processes and would not be implementable as drafted”.

Separately on Wednesday, the House passed another Republican bill, 219-199, that would require the approval of a Senate supermajority before the US takes part in any World Health Assembly agreement, convention or other instrument for pandemic prevention and response – a high bar usually reserved for treaties.

The bill, sponsored by Representative Tom Tiffany of Wisconsin, said that “a significant segment of the American public is deeply sceptical of the World Health Organization, its leadership, and its independence from the pernicious political influence of certain member states,” including China.

Representative Gregory Meeks, a New York Democrat, called the bill “part of Republicans’ polarisation of Covid responses”. The White House also expressed its “strong opposition”, contending the legislation would undermine efforts to prepare for future public health emergencies.

Must have experience: impossible catch for pressured Chinese students seeking internships

https://www.scmp.com/news/china/politics/article/3274337/must-have-experience-impossible-catch-pressured-chinese-students-seeking-internships?utm_source=rss_feed

In the first of a four-part series on China’s universities and campus life, Alcott Wei investigates the fierce competition for intern placements that can make or break future employment prospects.

David Ji’s internship ended before it had even started.

Ji, who is expected to graduate from university next year, had passed an interview for an internship at ByteDance, which owns TikTok and is one of the country’s top social media companies, but did not receive an offer.

When he contacted the company’s human resources department to ask why his recruitment process was halted in its system he was told the firm had cancelled the internship.

The 21-year-old, who was studying communication at a non-elite university in China, was surprised – and desperate. He had applied for the internship and secured interviews before the holiday season, but now his hopes were dashed.

“If you don’t intern, it will be very difficult for you to get a job at a big company later,” Ji said.

Internships allow college students to gain work experience before graduating. They are now seen as a valuable ticket to employment as China struggles with a slackening economy weighed down by a sluggish job market.

Internet companies are usually students’ first choice for graduate jobs, according to the 2023 College Students Employment Survey published by recruitment portal Zhaopin.

These companies, led by companies such as Alibaba, which owns the South China Morning Post, ByteDance and Tencent, typically operate in first- and second-tier cities and offer higher salaries and benefits.

But the brutal battle starts early – almost as soon as the students enter college – and, according to Ji, competition for internships adds to the pressure.

“In the first year, I accidentally saw on social media that some of my peers had already started internships at big companies. I began to worry about whether I could find an internship to prepare for employment,” he said.

Duan Yongxue, a Zhaopin recruitment consultant, said it was almost impossible for young people to find a job at a big company unless they have internship experience.

“Now big companies generally require two or three episodes of highly relevant work experience in medium or large company internships,” she said.

On Xiaohongshu, a popular social media platform, young people share their experiences – and even their ordeals – of applying for internships at big Chinese companies.

The application process usually begins in May when the students send their CVs to businesses offering internships. Then they wait – sometimes for months.

A junior student at the Communication University of China, who asked to be identified only as Qin, said the waiting period was torment.

“Generally, the companies may take a month or so to screen the applications, and losing sleep [over the applications] is very common during this month,” said Qin, who has had five internships since entering college.

“I would often [get up at night] to check emails, do it over and over again just to see if my resume has been reviewed by HR, but then never get a reply.”

Even those who have made it through the screening are met by written tests and then rounds of interviews to further eliminate the unsuitable – or unlucky – ones.

When they applied for an internship at leading internet companies in China, Ji and Qin also had to sit a two to three-hour-long assessment that included personality and IQ tests.

“I think my pass rate for written tests is less than 30 per cent,” Qin said.

Only those with a good score are invited to the interviews, which are not just about skills but the applicant’s knowledge of the company and how the industry works. Often, the interviewers drill the applicants on their past internship experiences to choose interns who can hit the ground running. These interviews usually comprise more than one round.

So, this creates a paradox: finding an internship requires having internship experience.

Facing this competition, many applicants would spend hours – if not days – polishing their CVs for internships to enhance their chances. Some even take the risk of “borrowing” experience from others.

“I don’t have a lot of experience so I include in my resume work done by others that I saw when I interned at a smaller company,” said a computer student who gave his name as Li.

The ordeal can affect more than the individual, and pose a challenge for their entire family.

Li’s father said: “I tried my best to ask my classmates to help my son find an internship as a programmer in a small company. But my son wanted to find a position in a better company and I was powerless to help him.”

The fact that many major companies today are not interested in offering internships to greenhorns is discouraging and frustrating to these applicants without the right kind of experience.

“After spending a lot of time gaining some experiences, when you try to find another decent internship, and you realise that your past experiences are of little value, the frustration feels like a punch,” said a communication student who gave his name as Richard Chan.

Recruiters said the applicants now might need to go through what they called “horizontal comparison”, in which the companies identify the successful candidates but still keep other finalists waiting.

Chan said he was kept waiting for two weeks during horizontal comparison when he applied for a product operations position at ByteDance. During that period, his account at the company was frozen and he was not allowed to apply for other internship positions at the company.

“It’s just an internship! I can’t even [automatically] become a regular employee from an internship. Why do they have to torment me like this?” he said.

Even then onboarding to an internship is not guaranteed. For fast-moving and competitive businesses such as e-commerce and social media, offers – and even intern positions – can be cancelled at the last minute.

Duan of Zhaopin said most internet companies now had little appetite or budget for training, expecting interns to deliver as soon as they are on the job.

ByteDance has not responded to an interview request.

In addition, household registration plays a role in internship recruitment. Students with local household registration or school registration are likely to be given priority because companies do not need to provide housing subsidies, according to an anonymous Baidu human resources worker.

Another student, Yuan, once applied for an internship at the Shanghai branch of the internet company Tencent, but was rejected in the second round of interviews because he was not a local Shanghai resident.

And even those who secure offers may face difficult choices, with some internships continuing to run after the university semester resumes.

Ji, who received an offer from software developer Kingsoft last summer that required him to work during the semester, had to reschedule all his classes to the evening so he could keep attending the internship during the day. Ji said it was an unusual decision but he was afraid that giving up the internship would hurt him more than juggling both work experience and study.

“I didn’t even realise how crazy that semester was; I just felt extremely tired and anxious. But the position was good, and I was afraid to miss the opportunity,” he said.

Despite this, Ji’s quest for an internship this year has not been smooth, and after multiple rejections, he has taken an HR internship at Tencent.

“The HR position doesn’t match the gaming position I want and might not help my search for game operations. But I had to settle for it – at least it’s Tencent. Otherwise, I might not get any internship experience this holiday,” he said.