Mistral点评

• EU must tackle China, US threats without being protectionist: Draghi
• Threat assessment: ranking risk among US companies dealing with China
• Will suing the Taliban protect Afghan women? Maybe with China’s help
• Ukraine ‘disappointed’ at Swiss support for China-Brazil peace plan
• As China’s ‘shock and awe’ strategy simmers: 4 takeaways from September’s PMIs
• VP of China-based AIIB says bank has proven doubters ‘100 per cent wrong’
• China and Russia team up on Arctic coastguard mission, with new shipping routes on horizon
• China manufacturing hub warns of offshoring, ‘hollowing out’ risks, eyes local investment
• China-developed photovoltaic nuclear battery could run for centuries: scientists
• Bullish Chinese investors charge into Hong Kong stocks in stimulus-ignited buying frenzy
• China actress Huang Yi puts past of abuse by ex behind her, looks to future with optimism
• Former Chinese finance official urges crypto research as US softens stance
• China’s premier affirms need for policy speed as stimulus package sets markets ablaze
• Hong Kong among top destinations for mainland Chinese tourists during ‘golden week’ break
• China’s Xi Jinping lobs warning to ‘separatists’ across Taiwan Strait in National Day speech
• China set to beat pre-pandemic travel levels during ‘golden week’ holiday
• After ditching Chinese funding, UAE forges AI alliance with US in ‘tech hedging strategy’
• Scarborough Shoal ‘completely surrounded’ by Chinese ships, Filipino fishers say
• Chinese woman finds type 1 diabetes reversed after stem cell transplant in world first
• China remains a talking point as election day looms for Trump and Harris
• [Sport] Does Chinese investment benefit or damage Ireland?
• China’s factory activity shows marginal improvement in September, beats expectation
• 4 China KOLs who are known for their quirkiness, unique styles, advocacy for greater good
• Our Hong Kong Foundation vows to mend ‘huge reputation damage’ to city amid US-China rift
• How China and the US went from ‘90% cooperation to 90% competition’

EU must tackle China, US threats without being protectionist: Draghi

https://www.scmp.com/news/china/diplomacy/article/3280620/eu-must-tackle-china-us-threats-without-being-protectionist-draghi?utm_source=rss_feed

The European Union must defend itself against the challenges from China and the United States without resorting to protectionism, former Italian prime minister Mario Draghi said on Monday.

Draghi, also the former head of the European Central Bank, delivered the strong message just weeks after warning in a much-anticipated report that Europe faced “existential” challenges.

EU chief Ursula von der Leyen last year asked Draghi to report back on how the 27-country bloc could boost its competitiveness amid increasing global insecurity and economic challenges.

Draghi is now working to ensure his warnings are heeded by EU policymakers.

“The European Union is an open economy, and it’s more open than anybody else. Fifty per cent of our GDP comes from trade, versus something like 37 per cent in China, 27 per cent in the United States,” Draghi said.

“We are different from the United States. We cannot build a protectionist wall,” he told an event hosted by the Bruegel think-tank in Brussels.

“We cannot do it and we wouldn’t be able to do it even if we wanted to do it because we would harm ourselves.”

Draghi said there should be “very cautious, sector by sector” measures that “directly addressed only at making the playing field level” in the face of threats from abroad, notably China and the United States.

Beijing and Washington have ploughed billions into developing clean technologies locally, which Europe fears will leave its industry falling further behind them.

Draghi said competition abroad was being driven by innovation but “also by subsidies, industrial policies, state ownership and other practices”.

The EU’s priority, he said, should be “to rebuild” respect for the World Trade Organization’s rules, but he accepted that the world had changed.

Brussels has already acted more cautiously than the United States against China.

While Washington imposed duties of 100 per cent on electric cars made in China, the EU has moved to impose tariffs of up to 36 per cent, on top of the current 10 per cent.

The EU says the duties – on which member states are expected to vote this week – are intended to level the playing field, after an investigation concluded that Chinese state subsidies were unfairly undercutting European rivals.

Threat assessment: ranking risk among US companies dealing with China

https://www.scmp.com/news/china/article/3280621/threat-assessment-ranking-risk-among-us-companies-dealing-china?utm_source=rss_feed

Of the major US corporations reliant on their business in China, which are most at risk in the geopolitical competition between the world’s two largest economies?

On Monday, the market research firm Strategy Risks identified what it determined to be the 250 most vulnerable publicly traded US companies, led by the car maker Ford Motor, consumer appliance giant Carrier, the electric vehicle manufacturer Tesla, tech titan Apple and global drink brand Coca-Cola.

The firm analysed a range of public information sources – company communications like annual and sales reports; media coverage; and government data – to assess exposure on a scale from 0 to 100.

The evaluation included categories like supply chain dynamics, connections with the Chinese government and Communist Party officials and industry regulations in China.

With a score of 69, Ford topped the list, followed closely by Apple and Carrier, each charting a score of 65. Tesla and Coca-Cola also scored 63, while other notable companies, including Honeywell and Walt Disney, are just below at around 60.

Concerns about exposure to China have intensified after China’s Commerce Ministry announced an investigation last week into fashion retailer PVH Corp – the owner of Calvin Klein and Tommy Hilfiger – for refusing to source cotton from the Xinjiang region.

The ministry added that the firm could be placed on the “unreliable entities list”, which would prevent it from operating in China. The US has banned imports of products from Xinjiang, unless clear evidence is provided that no forced labour was involved. Beijing denies the existence of forced labour in the region.

Isaac Stone Fish, chief executive of Strategy Risks, told the South China Morning Post that “a greater exposure to China means an elevated risk of political scrutiny, supply chain disruption, and broadly speaking, geopolitical risk in the vast majority of cases”.

However, he noted, these weren’t corporate “existential risks”.

“Rather, we feel like ranking high on our index is an important risk factor for companies, investors and regulators and consumers to be aware of when they’re engaging with these companies,” he said.

While it was not surprising to see Ford top the list, he added, he found the “prevalence of defence contractors high on the list” even more notable.

The US aerospace and defence giant RTX Corp; Caterpillar Inc, a global leader in construction, mining and engineering equipment; and Cummins Inc, known for its diesel and alternative fuel engines and generators, were also in the top 10.

Tesla, Carrier and Apple each received a score of 20 out of 25 for their exposure related to their dependency on the Chinese market. Tesla and Ford each also scored 20 out of 25 for exposure to sensitive political issues and alleged human rights abuses within their operations and supply chains.

In an emailed statement, a Ford representative said that “given that we have no insights into the methodologies or how these rankings were made, and we have significant questions about the validity of the scoring, we have nothing to contribute to the story”.

Other top 10 companies did not immediately respond to requests for comment.

Ford is involved in at least three joint ventures in China, but faces tough competition from domestic car giants like Xiaomi. In June, a group of Republican lawmakers also called for a ban on import of goods into the US from China’s CATL battery giant, a Ford partner, alleging that its supply chains use forced labour.

For Tesla, nearly a third of its sales come from China. Earlier this year, Human Rights Watch said that the company was “failing to minimise the risk of Uygur forced labour being used in their aluminium supply chains”.

About 19 per cent of Apple’s revenues in 2023 were generated in China. Most of its popular products like iPods, iPhones and iPads have been assembled in China since 2001.

Though it has moved some production to Southeast Asia and India, it remains deeply involved in China. In April, Nikkei reported that Chinese suppliers have constituted the largest group of Apple suppliers since 2020.

Since 2018, during the Donald Trump administration, the US has imposed trade tariffs on Chinese imports worth billions of dollars annually.

In 2022, US President Joe Biden added restrictions on exports of critical technologies like AI and semiconductors to China. Last year, he signed an executive order to ban American investment in Chinese companies involved in critical technologies.

In May, Biden imposed 100 per cent tariffs on Chinese electric vehicles and in September banned Chinese software and hardware from installation in EVs in the US.

With Trump running for the White House again and vowing more than 60 per cent tariffs on Chinese imports if he wins, business anxiety has increased.

The US-China Business Council last month warned that China tariffs made it “harder for American companies to compete in the US and abroad, cost American jobs, increase consumer prices, and invite Chinese retaliation”.

The concerns have been exacerbated by China’s sluggish economic growth and fierce competition in the market from Chinese rivals. Last year, Chinese regulators also launched a crackdown on foreign lobbying firms with surprise raids and fines, citing national security concerns.

Last month, the American Chamber of Commerce in Shanghai reported a significant decline in confidence among US businesses operating in China.

Only 47 per cent of US firms were optimistic about their five-year China business outlook, a fall of five percentage points from 2023 – the lowest positive response since the survey’s inception in 1999.

“These companies do have more to lose because they are more exposed to China,” Stone Fish contended, adding that the US businesses face “a lot of very stern competition from Chinese companies in their space”.

Chinese consumer brands have “much better ties” to the Communist Party and are a “lot more comfortable” with the Chinese law, he said.

“Just because a company has high China exposure doesn’t mean that Beijing adores them or that the path for them in China has been smooth”.

“Far from it: these companies have, broadly speaking, faced immense challenges in the Chinese market.”

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Will suing the Taliban protect Afghan women? Maybe with China’s help

https://www.scmp.com/opinion/china-opinion/article/3280488/will-suing-taliban-protect-afghan-women-maybe-chinas-help?utm_source=rss_feed

Pressure is mounting on the Taliban to respect the rights of women after Western governments decided to take the group to the International Court of Justice for gender discrimination.

The Netherlands, Canada, Germany and Australia announced the move on Wednesday at the United Nations General Assembly, marking only the second time a country is sent to the International Court of Justice for violating the Convention on the Elimination of All Forms of Discrimination of Women (CEDAW).

Dutch foreign minister Caspar Veldkamp said the situation was “heartbreaking” while Australian foreign minister Penny Wong said the four countries would “hold the Taliban to account” for its treatment of women in Afghanistan.

Since returning to power in August 2021, the Taliban has treated women and girls abysmally. According to the UN, 2.5 million school-age girls have been denied their right to education while women have been banned from working for aid organisations and UN agencies.

The Taliban has also rolled out “vice and virtue” laws prohibiting women from speaking or showing their faces in public, and forbidding them to look directly at strange men or catch taxis without a male escort. This comes after the Taliban banned beauty parlours, a transparently cruel move designed to remove women from public spaces.

Women also face a culture of extreme violence. In March, the Taliban declared that stoning as a punishment would return to Afghanistan; in August, a woman in Balkh province was reportedly sentenced to death by stoning. The Centre of Information Resilience’s Afghan Witness project reveals more than 300 reported cases of women being killed by men since the Taliban seized power, saying this is the “tip of the iceberg”.

The situation for Afghan women has gotten so bad the UN said it was the worst globally last year, while a UN special rapporteur labelled the Taliban’s actions “gender apartheid”.

The international community feels it has few other options, for not even the tantalising prospect of international recognition has persuaded the Taliban to respect women. Having left women and girls to the mercy of the Taliban since August 2021, holding it accountable is the least these governments can do.

Unfortunately for the Taliban, the previous regime under president Hamid Karzai ratified CEDAW in 2003, meaning that whoever governs Afghanistan is liable if the tenets of the convention are violated. This suggests the group has a case to answer for its brutal treatment of women.

But there are questions around the court’s jurisdiction, given that none of the countries taking the Taliban to court recognise it as the legitimate government in Kabul. The Taliban also does not hold Afghanistan’s seat in the UN General Assembly. The four countries may argue that the Taliban is the de facto administration of Afghanistan, and in effect unofficially recognised by countries like China, but there is a significant risk that the court will throw out the case because the group is not widely and officially recognised.

The Taliban could also simply refuse to accept the International Court of Justice’s authority, neither taking part in any court proceedings nor complying with any measures ordered by the court to protect Afghan women and girls. The Taliban would not be alone in doing this, with Israel having repeatedly defied the court’s rulings on protecting Palestinians in its war against Hamas in Gaza.

But the hope is that even if the Taliban refuses to acknowledge the court’s authority, a ruling could deter other states from legitimising the Taliban through diplomatic relations as signatories to the World Court are expected to abide by its rulings.

This is where China can play a role in protecting women and girls in Afghanistan.

China’s position on women in Afghanistan has been consistent with that of the broader international community, demanding the Taliban respect the rights of women and girls. But this has not stopped Beijing from seeking closer ties with the Taliban.

In January, China became the first major country to host a Taliban-appointed envoy, months after Beijing became the first government to appoint a new ambassador to Kabul following the Taliban’s return to power. De facto recognition from China only serves to embolden the Taliban and reinforce its brutal stance on women.

But China is a signatory to the International Court of Justice and has a permanent seat on the UN Security Council, meaning it can play a significant role in voting through any measures ordered by the World Court, turning them into legally binding resolutions.

China also has a proud legacy on women’s rights, with its 1954 Constitution enshrining equality between men and women and the government enacting over 100 laws and regulations that safeguard the rights of women. China also ratified CEDAW in 1980, and it was one of the first countries to do so.

This puts China in a powerful position to influence the Taliban over how it treats women. Instead of legitimising the Taliban, Beijing can use its political influence to convince Kabul to reverse its brutal policies. If the Taliban still will not budge, China should work with the broader international community to hold the group accountable if the International Court of Justice orders measures against the Taliban.

Mao Zedong famously said that “women hold up half the sky”, in reference to the important role they play in Chinese society. Women and girls in Afghanistan will be hoping Beijing still remembers that sentiment.

Ukraine ‘disappointed’ at Swiss support for China-Brazil peace plan

https://www.scmp.com/news/world/europe/article/3280617/ukraine-disappointed-swiss-support-china-brazil-peace-plan?utm_source=rss_feed

Ukraine expressed “disappointment” on Monday at Switzerland’s support for a peace plan put forward by China and Brazil aimed at ending more than two and a half years of war with Russia.

“We find the logic behind this decision difficult to comprehend,” a Foreign Ministry statement said, noting that Ukraine had organised a global peace summit in Switzerland in June at which its demands were set out.

All plans regarding the restoration of peace for Ukraine had to be based on the principles of “nothing about Ukraine without Ukraine” and on the UN Charter, including respect for Ukraine’s sovereignty and territorial integrity within its internationally recognised borders, the statement said.

Any initiatives failing to guarantee the full restoration of Ukraine’s territorial integrity were unacceptable, it said, adding that initiatives of this kind created an illusion of dialogue while Russia continued its criminal actions.

According to media reports, Switzerland took part in a meeting between Brazil and China on the sidelines of the UN General Assembly in New York last week, at which a six-point peace plan was proposed.

The United States and its European allies have rejected the plan, as it lacked a reference to the UN Charter and the inviolability of Ukraine’s territorial integrity.

The Swiss Foreign Ministry said it had noted the omission of the reference, but that it was nevertheless an initiative that called for a ceasefire and a political solution, according to remarks by spokesman Nicolas Bideau reported by the Keystone SDA news agency.

At the peace summit organised in Switzerland in June, without Moscow’s presence, a peace plan put forward by Ukrainian President Volodymyr Zelensky in the autumn of 2022 was discussed.

It demands the complete withdrawal of Russian forces. A second summit involving Russia has been proposed.

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As China’s ‘shock and awe’ strategy simmers: 4 takeaways from September’s PMIs

https://www.scmp.com/economy/economic-indicators/article/3280550/chinas-shock-and-awe-strategy-simmers-4-takeaways-septembers-pmis?utm_source=rss_feed

China’s official manufacturing purchasing managers’ index (PMI) – a survey of sentiment among factory owners – rose to a five-month high of 49.8 in September, compared with August’s reading of 49.1.

It exceeded the expected reading of 49.5 predicted by economists polled by Bloomberg but remained in contractionary territory for the fifth consecutive month, “signalling still-subdued factory activity”, according to analysts.

A reading above 50 typically indicates an expansion of economic activity, whereas a reading below implies a contraction.

“The upside surprise was largely due to incomplete seasonal adjustments, as September is usually a month of more robust manufacturing activity, rather than a real improvement in the economy,” said analysts at Japanese investment bank Nomura.

Within the official manufacturing PMI, the new manufacturing export order subindex fell to 47.5 in September from 48.7 in August.

Meanwhile, the Caixin/S&P Global manufacturing PMI, which was also released on Monday, slipped to 49.3 in September from 50.4 in August.

The reading, which has a greater representation from smaller, privately owned companies, compared with the official PMI, fell short of analysts’ forecasts for a reading of 50.5 in a Bloomberg poll.

“The NBS and Caixin manufacturing PMIs pointed to different directions for the manufacturing sector in September, potentially due to their differences in sample coverage,” said analysts at Goldman Sachs, as the Caixin survey is conducted in the middle of the month, while NBS survey is conducted between the 20th and 25th of the month.

“Overall, both PMIs suggest China’s manufacturing activity slowed in September, and adverse weather [such as from Typhoon Yagi] impacted the PMI readouts.”

China’s non-manufacturing PMI – which tracks both the service and construction sectors – fell to 50 in September from 50.3 in August, ending a run of 20 straight months of expansion.

Within the non-manufacturing PMI, the construction sector subindex stood at 50.7 in September, up slightly from 50.6 in August.

But the service sector subindex fell to 49.9 from 50.2, falling into contractionary territory for the first time since December.

“It signals that consumer sentiment remained dire, at least before the latest surprise from the Politburo meeting” on Thursday, added analysts at Nomura.

The Caixin services PMI, meanwhile, fell to 50.3 in September from 51.6 in August.

“[The survey suggested] service sector activity continued to expand, but at a much slower pace in September,” said analysts at Goldman Sachs.

“Surveyed companies mentioned that the slowdown in growth led to a marked reduction in optimism levels among service providers.”

China’s official composite PMI – which tracks both the services and manufacturing sectors – stood at 50.4 in September, up from 50.1 in August.

The Caixin composite PMI, meanwhile, inched down to 50.3 in September, from 51.2 in August.

“Overall, the average of the official and Caixin composite PMIs fell from 50.6 to 50.3, an 11-month low,” said Gabriel Ng, assistant economist at Capital Economics.

Last week’s policy-stimulus measures and a statement from the top-level Politburo came too late to be reflected in September’s PMI readings.

But analysts said that, with investors keen on knowing how to track economic activity, the PMIs in the coming months could provide useful signals for policy implementation and impacts.

“While the official PMIs held up OK in September, the Caixin PMIs dropped quite sharply, which suggests that the economy lost some momentum this month,” said Ng at Capital Economics.

“The stimulus package announced last week thus comes at a much-needed time, and should provide some near-term support to activity,” Ng added. “But the key to a cyclical recovery is fiscal support – the scale of which has yet to be confirmed.”

And despite last week’s moves, Nomura maintained its forecast for China’s economy to grow in the third quarter by 4.1 per cent, year on year.

“Following the unexpected September Politburo economic meeting, together with the funding and spending measures reported by some global media outlets and the batch of monetary and credit stimulus announced earlier, it seems Beijing is finally determined to roll out its ‘bazooka’ stimulus in rapid succession,” Nomura’s analysts said.

“This ‘shock and awe’ strategy could be meant to jump-start markets, but Beijing still needs to introduce well-thought policies to address many of the deep-rooted problems, particularly regarding how to stabilise the property sector.”

VP of China-based AIIB says bank has proven doubters ‘100 per cent wrong’

https://www.scmp.com/economy/china-economy/article/3280568/vp-china-based-aiib-says-bank-has-proven-doubters-100-cent-wrong?utm_source=rss_feed

In the more than 10 years since its inception, the Asian Infrastructure Investment Bank (AIIB) – a Beijing-headquartered multilateral development lender representing 110 member states – has proved critics “100 per cent wrong”, a senior executive said, adding its door will “always” be open to new entrants as well as private capital.

Danny Alexander – who moved to Beijing in February 2016 to serve as the bank’s vice-president – called the AIIB a “remarkable” institution in an interview during the bank’s annual meeting in Samarkand, Uzbekistan on Thursday.

“When AIIB was first being proposed, people thought: was AIIB going to have lower standards? Was AIIB going to try to undermine the existing international system? We’ve proved all those things wrong,” he said.

Alexander works directly with Jin Liqun, the bank’s president and a former Chinese vice-minister of finance, to shape the institution’s overall strategy and philosophy of governance. Before that, he was Chief Secretary to the Treasury of the United Kingdom – a founding member of the bank with a 2.88 per cent voting share.

“AIIB was first proposed by China, but what’s been created is a genuinely multilateral institution where all the members are listening and engaged, and we have common high standards,” he said.

Since the concept of an “Asian infrastructure bank” was first introduced by President Xi Jinping in October 2013 – one month after the announcement of the Belt and Road Initiative, an infrastructure-focused programme of global integration – the AIIB has faced accusations of acting as a proxy for China’s interests.

Suspicion was stoked further as competition between the United States and China intensified, spurred by Washington’s imposition of tariffs and controls on technology exports. Presumptions of a rivalry between the world’s two largest economies extended to almost every sphere of life, development finance included.

China, AIIB’s largest shareholder, holds a 26.6 per cent voting share – larger than the holdings of the next five largest members combined and enough to veto some measures single-handedly, though it has yet to exercise that power.

The US and Japan were the most notable holdouts during the formation of the bank, with the other five countries in the Group of Seven bloc of major economies holding individual voting shares between 0.83 and 4.15 per cent.

Washington is still the biggest shareholder at major Bretton Woods institutions. It controls an about 17 per cent stake at the International Monetary Fund versus around 6 per cent for China, and it has 15.88 per cent of voting power in the International Bank for Reconstruction and Development compared to China’s 5.88 per cent.

“People who understand multilateral development banks see AIIB as a multilateral bank,” Alexander said. “It’s not a Chinese bank. It’s not a bank that’s focused on the interest of any single shareholder. It’s a collective enterprise among all the members.”

The AIIB has remained open to new member countries – the South Pacific island nation of Nauru was admitted as its 110th member on Thursday – and Alexander said any application is a state’s sovereign decision.

Asia is big enough to have plenty of business,” he said. “AIIB will always be AIIB

“According to our articles of agreement, membership is open to any member of the World Bank or of the Asian Development Bank. So the door for new members is always open and we welcome any applicants,” he added.

Current members account for 81 per cent of the world’s population, 65 per cent of global GDP and about 70 per cent of the world’s carbon emissions. Although half are not in the region, Alexander said the focus will always be Asia.

“Asia is big enough to have plenty of business,” he said. “AIIB will always be AIIB.”

Alexander, who is set to leave the bank next month for a position at HSBC, said he is proudest of the governance mechanism he introduced and the institution’s recent emphasis on climate finance.

Two months ago, the bank unveiled its vision for climate-focused policy-based financing, a new financial instrument, and in 2022 it announced it had allocated more than 50 per cent of all financing to climate projects, hitting its own target three years ahead of schedule.

“I think on climate, especially now, AIIB has a toolbox across the full range of instruments,” he said. “I’m particularly proud of the way that AIIB has become globally recognised as a leader in climate finance.”

To ensure at least half its funding comes from private sources by 2030, a new initiative called AIIB+ was launched at the bank’s annual meeting to solicit greater participation from the private sector.

Despite his imminent departure, Alexander said he loved “every minute” of his work at the development bank.

“In my life, I’ve always believed very deeply that multilateralism is the best way for the world to cooperate, to solve challenges,” he said.

“Through my work in AIIB, that belief has been reinforced even more.”

China and Russia team up on Arctic coastguard mission, with new shipping routes on horizon

https://www.scmp.com/news/china/diplomacy/article/3280601/china-and-russia-team-arctic-coastguard-mission-new-shipping-routes-horizon?utm_source=rss_feed

China and Russia signalled their closer ties and interest in Arctic shipping routes with their first joint coastguard exercise and patrol earlier this month, observers said.

The China Coast Guard said its vessels, the Meishan and Xiushan, sailed to the Peter the Great Gulf in the Sea of Japan, or East Sea, for the drill from September 16-20.

China said the exercise tested personnel on dealing with maritime law enforcement security threats, interception of suspected criminal ships, sea rescue, and firefighting.

On September 21, the vessels embarked on a patrol with their Russian counterparts in the high seas of the North Pacific, the China Coast Guard said on its Weibo social media account.

The patrol took the ships close to the Arctic, according to footage posted online on Sunday by Yuyuan Tantian, a social media channel affiliated with China Central Television.

Earlier in the month, Russian naval and air forces joined the Chinese People’s Liberation Army for drills in the same area.

State news agency Xinhua said the activities were not aimed at third parties and were unrelated to international or regional issues.

Zhou Bo, a senior fellow at Tsinghua University’s Centre for International Security and Strategy, said the joint coastguard patrol was new and “reflects a new height of the political trust between the two countries”.

Military commentator Song Zhongping said the location of the joint patrol near Arctic shipping routes also showed that China wanted to work with Russia on Beijing’s “Polar Silk Road” plan.

The plan was released in 2018 and designed to harness resource and shipping opportunities in the Arctic that could arise from climate change.

The Arctic’s Northwest Passage links the Atlantic and Pacific oceans but is only open part of the year. Melting ice from climate change raises the possibility of a permanent sea lane, which would halve shipping time between Europe and Asia.

Russia, China and the United States are each eyeing the route as one of the most important maritime assets of this century.

In May, Chinese Premier Li Qiang and his Russian counterpart, Mikhail Mishustin, signed a joint communique agreeing to develop Arctic shipping routes.

Song said the coastguard would be responsible for safeguarding those routes.

“Ensuring the safety of the Arctic routes aligns closely with the practical interests of both China and Russia,” he said.

“It is crucial that the coastguards of the two countries conduct joint patrols to ensure the safety of the navigation routes.”

Fu Qianshao, a former PLA equipment expert, said the joint patrol was a response to US claims over the Bering Strait, as well as its cooperation with Canada and some Nordic countries.

It was also important to prepare for any international emergencies.

“This route passes through many countries, so it is necessary to establish corresponding law enforcement training to prevent accidents along this route in the future,” Fu said.

Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute, said the joint patrol was more important for China than for Russia.

“China’s coastguard is large and powerful, and many of the ships are former PLA Navy, so are far more capable than typical coastguard-type vessels,” Davis said.

“By exercising with the Russians, particularly in this location, along the Northeast Passage above Siberia, China sends a strong signal to Moscow – and to other Arctic states that it will be an active power in the region.”

China manufacturing hub warns of offshoring, ‘hollowing out’ risks, eyes local investment

https://www.scmp.com/economy/policy/article/3280524/china-manufacturing-hub-warns-offshoring-hollowing-out-risks-eyes-local-investment?utm_source=rss_feed

A prosperous city in one of China’s regional manufacturing powerhouse has underlined the need to retain investment locally to counter the rising momentum of offshoring, while also warning of the risks of “hollowing out.”

A report from Nanhu district in Jiaxing, a city in eastern China’s Zhejiang province, called for a holistic survey into flagship local enterprises about their investment intent.

It also urged for more precise and targeted support to encourage firms with overseas investment plans in the next three years to prioritise local development.

“In the short term, it is crucial to remain vigilant regarding the risk of leading enterprises relocating,” said the report published in the August issue of Zhejiang Economy, a magazine affiliated with the provincial Development and Reform Commission.

“Currently, key industries in Nanhu district have not yet formed complete industrial chains or upstream core drivers. Some sectors face a dominance by a single enterprise, making it difficult with the dual pressures of manufacturing investment outflows and capacity reductions from leading firms.

“Some new service industries in Nanhu are heavily dependent on related manufacturing sectors, and as both upstream and downstream industries contract, there is a pressing need to pay close attention to the dangers of industrial ‘hollowing out’.”

So-called hollowing out refers to the disappearance of a manufacturing sector when producers move to low-cost facilities overseas.

The survey, led by Zhang Jian, the chairman of the Nanhu District Political Consultative Conference in the city’s Nanhu district, was conducted in March among 1,194 enterprises, with an additional study focused on 65 companies that have existing foreign investments.

Nanhu district is the main urban area of Jiaxing city, and it has a highly industrialised manufacturing sector worth tens of billions of yuan.

The report came as China’s position as the so-called world’s factory has been threatened by a growing trend of industrial relocation amid its transitions toward higher value-added industries, while companies offshore production and investments in response to rising labour costs and geopolitical tensions.

In the meantime, China risks losing its manufacturing edge and fragmenting its supply chains, while the economy could also face instability and exacerbated unemployment.

“Disorderly outbound investments, particularly by key manufacturing enterprises, will have a significant impact on the economic stability of Nanhu district,” the survey said.

Since 2016, 70 companies have ventured into overseas markets, amassing US$5.79 billion in investments, with manufacturing alone accounting for 30.7 per cent, the survey said.

A third of the enterprises in the Nanhu district with overseas interests primarily invest in Southeast Asian countries like Vietnam and Indonesia, focusing on low-end manufacturing, particularly in industries such as computing, communication and other electronic equipment manufacturing, as well as chemical raw materials.

Investments in mid- to high-end technology-intensive manufacturing are directed toward the United States and Europe to establish research and development technology centres and collaborate with local partners to acquire advanced technologies, “due to the Biden administration’s focus on curbing China’s chip and semiconductor industries”, Zhang said.

The US has imposed export controls on China’s access to cutting-edge computer chips and manufacturing equipment amid an ongoing tech war.

Some telecommunications equipment manufacturers have also offshored to Mexico to reduce the impact of the US tariffs and supply chain restrictions.

Other companies like Wingtech Technology, a partially state-owned semiconductor and communications product company based in Jiaxing and listed on the Shanghai Stock Exchange, have also invested 1.7 billion yuan (US$242 million) in India, doubling its global share.

Zhang said that the outbound investment made by local enterprises are an inevitable consequence of the market economy, and the only way to realise industrial upgrades, but that it could also harm global competitiveness.

“For key industries, headquarters enterprises, and those with strong development potential that express further outbound investment intentions, every effort should be made to help them overcome difficulties and provide maximum support for various resources to ensure that enterprises invest funds and increase capacity in Nanhu,” the report said.

Local departments, such as development and reform, economic and information technology, commerce and natural resources planning, should propose more precise, effective and operationally feasible resource guarantee policies, the report added.

“Estimates suggest that foreign investments and capacity relocations will impact the industrial output growth rate in Nanhu district by 2 to 3.5 percentage points this year,” the report said.

In 2023, exports of labour-intensive products from Nanhu district to the US dropped by 7.3 per cent, while shipments to Europe and Japan decreased by 4.4 per cent, and 6.1 per cent, respectively, the survey said.

China-developed photovoltaic nuclear battery could run for centuries: scientists

https://www.scmp.com/news/china/science/article/3280512/china-developed-photovoltaic-nuclear-battery-could-run-centuries-scientists?utm_source=rss_feed

Chinese scientists say they have developed a nuclear-powered battery with a photovoltaic cell that could generate electricity for hundreds of years, at an overall efficiency thousands of times higher than its closest rivals.

According to a paper published in the peer-reviewed journal Nature, the researchers were looking for a way to harness alpha rays released by decaying radioactive isotopes, in a field where most advances have focused on beta radiation.

The increasing demand for clean energy solutions and small, long-lasting alternative power sources have sparked broad research interest in nuclear batteries but alpha-radioisotopes are considered the most likely contenders for a micronuclear battery.

This is because the high decay energy of alpha-radioisotopes – between four and six mega electron volts (MeV) – offers the potential to far outstrip beta-radioisotope devices, whose decay energies reach several tens of kiloelectron volts (keV) at best.

However, with their extremely short penetration in solids, alpha particles lose substantial energy through the self-absorption effect.

“This self-absorption significantly reduces the actual output power of tested alpha-radioisotope micronuclear batteries to levels far below theoretical expectations,” said the study’s lead author Wang Shuao from Soochow University.

Wang – whose achievements include significant advances in the treatment of nuclear waste and waste water, as well as emergency response protocols for accidents – has spent years focused on China’s strategic needs for sustainable nuclear development and safety.

Now, along with a team of researchers from the Northwest Institute of Nuclear Technology and Xiangtan University, Wang has designed a nuclear battery that has an inbuilt layer that works like a solar panel to optimally use alpha radiation.

The team incorporated an “inbuilt energy converter” – a polymer layer surrounding the isotopes that transmits the energy released during radiation by converting it into light and then electricity, just like a photovoltaic cell.

Using only 11 micro curie of the synthetic radioactive chemical 243Am, the assembly produced visible radioluminescence from the alpha ray emitted by the isotope’s decay, according to the paper.

Further experiments determined that the power output of the luminescence was 11.88 nanowatts, with a decay-to-light energy conversion efficiency reaching an impressive 3.43 per cent, the paper said.

The Chinese researchers said their device – a type of photovoltaic nuclear battery – converts radioactivity into electrical energy, has an extraordinarily long lifespan, and performs independently of temperature variations.

According to the paper, the experimental battery boasts a total power conversion efficiency of 0.889 per cent and produces 139 microwatts per curie.

The researchers said the design was rigorously validated through experimental and theoretical tests which showed an 8,000-fold enhancement in energy conversion efficiency compared to conventional battery architectures.

According to the paper, the energy converter is exceptionally stable, with performance parameters nearly unchanged over 200 hours of continuous operation. Given that the half-life of 243Am spans several centuries, the battery may have an equal lifespan, it said.

China’s Science and Technology Daily newspaper hailed the achievement as “one of the significant breakthroughs in the nuclear battery field in recent decades”.

The breakthrough not only addresses major strategic needs in China’s nuclear safety and sustainable nuclear development, but also offers a new approach to the resource utilisation of nuclear waste, the newspaper said.

The extremely long half-lives and high-energy alpha decay of some isotopes manifests as the long-term radiotoxicity of nuclear waste. But as an energy source, they offer the advantages of a long lifespan and high energy, according to the article.

“This achievement, as one of the significant breakthroughs in the nuclear battery field in recent decades, opens new directions for the utilisation of actinide nuclides outside the nuclear fuel cycle,” the newspaper report said.

Bullish Chinese investors charge into Hong Kong stocks in stimulus-ignited buying frenzy

https://www.scmp.com/business/markets/article/3280558/bullish-chinese-investors-charge-hong-kong-stocks-stimulus-ignited-buying-frenzy?utm_source=rss_feed

Traders in mainland China rushed to snap up Hong Kong stocks before the "golden week" holiday begins, as Beijing’s surprise policy bazooka ignited a buying spree.

Southbound investors bought HK$12.1 billion (US$1.6 billion) worth of local shares on Monday, the biggest single-day total in more than six months, according to stock exchange data. That helped propel overall turnover in Hong Kong to HK$505.8 billion, a record high.

Alibaba Group Holding, Hong Kong Exchanges and Clearing, and Wuxi Biologics were the most popular local shares bought through the Stock Connect scheme amid the frenzy, with a total net inflow of US$1.9 billion last week, according to data from Goldman Sachs. The Tracker Fund, which mirrors the Hang Seng Index, and an ETF (exchange-traded fund) tracking the Hong Kong-listed Chinese stocks are the best-selling ETFs; their combined inflow topped US$110 million.

So far this year, mainland investors have bought US$64 billion worth of Hong Kong stocks, surpassing last year’s total of US$42 billion and heading towards the biggest year since a US$87 billion buying spree in 2020, according to data from Goldman Sachs.

“[We] see more upside coming from a lower interest rate, weaker US dollar, stronger than expected policy stimuli and improved earnings revisions,” said Angus Chan, head of Hong Kong strategy at UBS Investment Bank.

The bank now expects the Hang Seng Index to end the year at 22,100 and the MSCI Hong Kong Index to hit 9,600, 7 per cent and 1 per cent higher than the bank’s previous targets, respectively, according to a report to clients. Stocks that offer high yields and companies in the travel industry that are sensitive to changes in the Chinese economy are some of their favourite picks, they added.

The Hang Seng Index jumped another 2.4 per cent on Monday to extend its best weekly run in 26 years, bringing gains since the most recent trough in August to more than 20 per cent – the definition of a bull market.

The recent buying spree comes after Beijing unleashed an unprecedented stimulus package to boost market confidence and economic growth. The measures include cutting the reserve requirement ratio for banks, relaxing home-purchase restrictions in major cities, and an 800 billion yuan (US$114 billion) stock-buying facility to shore up the market.

Investors are also betting on further policy support, including more fiscal stimulus, as the economic recovery still faces headwinds from a property market slump and weak manufacturing activity.

If history is any guide, bullish bets are likely to reap big rewards. The city’s stock market has gained during the weeklong mainland holiday six times out of the past 10 years, dating back to when the connect scheme launched in 2014, according to Bloomberg data.

China actress Huang Yi puts past of abuse by ex behind her, looks to future with optimism

https://www.scmp.com/news/people-culture/china-personalities/article/3279901/china-actress-huang-yi-puts-past-abuse-ex-behind-her-looks-future-optimism?utm_source=rss_feed

Chinese actress Huang Yi, 47, is often said to have ruined her successful career by marrying the wrong man, but she recently said she had made peace with her past and still had hopes to find true love.

Huang was born in Shanghai in 1977, and grew up with her grandparents after her mother and father divorced.

She made her acting debut in 1999 shortly after graduating as a performing arts major at Shanghai Oriental Culture College.

Television dramas starring her as a leading actress, such as Wrong Carriage, Right Groom (2001), Crouching Tiger, Hidden Dragon (2001), and My Fair Princess 3 (2003) have become nationwide hits, boosting her fame.

She has also appeared in several Hong Kong films such as Drug War (2012) and Overheard 3 (2014).

Huang’s love life has not been as successful as her acting career.

She married investor Jiang Kai 41 days after meeting him at a party in the US and divorced him a few months later.

Then her second husband, Huang Yiqing, caused a devastating blow to her career.

She married the owner of a Shanghai sports car club in 2012, gave birth to their daughter in 2013, and began a years-long feud with him at the end of 2013.

Huang Yiqing defamed her on his Weibo account, spread rumours that she cheated on him and slept with the male stars she worked with, and even posted her ID number and scantily dressed photos.

Huang Yi said he was a habitual domestic violence offender and posted photos of shocking injuries on her forehead.

Years later she revealed that he installed more than 20 surveillance cameras at their home.

Despite other people telling her to leave him, she forgave him many times because of the baby.

She sued him, got a divorce and the custody of their daughter in 2014.

Huang Yiqing continued to harass her after the divorce, complaining about losing custody of the daughter he had once given up.

He also spread rumours about other celebrities and caused public outrage.

In 2020, he was sentenced to 15 years in jail for drug trafficking, and another 14 months for defaming Chinese actress Ma Su.

Huang Yi dated other people in the 2021 reality show A Journey for Love, and announced to her 6 million followers on Weibo that she had met a younger boyfriend last year.

She said growing up in a single-parent family made her yearn for love and marriage, so much that she tended to ignore her own happiness, but she had learned to love herself through failures.

“I have the courage to accept my failures and have made peace with my past. I’m still looking forward to a romantic relationship with an evenly-matched partner,” she said.

Former Chinese finance official urges crypto research as US softens stance

https://www.scmp.com/tech/blockchain/article/3280517/former-chinese-finance-official-urges-crypto-research-us-softens-stance?utm_source=rss_feed

Cryptocurrencies are “crucial” for the digital economy and China should catch up as the US embraces the industry, according to a former senior Ministry of Finance official, as more experts openly urge the central government to re-evaluate its ban on the virtual assets.

Crypto policy in the US has “changed significantly” this year, and China should study its impact and other global policy developments for the sector, Zhu Guangyao, China’s former finance vice-minister, said on Saturday during a panel discussion at an economic forum in Beijing.

While cryptocurrencies have risks and could harm the capital market, it is also a “crucial aspect for the development of the entire digital economy”, he added.

Zhu, who was second in command at the finance ministry from 2010 to 2018, is among a growing number of Chinese economists calling for Beijing to review its crypto ban on the mainland amid a global expansion in recent years.

Beijing first banned initial coin offerings and ordered the closure of crypto exchanges in 2017. It intensified its crackdown in 2021, when it banned bitcoin mining and declared crypto-related business to be illegal. Chinese authorities consider cryptoassets to be a threat to financial stability and a breeding ground for criminal activity.

Zhu said the risks from cryptocurrencies – which include impacts on countering terrorist financing and anti-money-laundering efforts, as well as capital market volatility – can be addressed through regulation.

“Our current gap [with the US] is that we don’t participate,” Zhu said. “Even with such restrictions, underground trading channels still exist, but you don’t have the ability to utilise it for production because it is prohibited by law.”

“Therefore, we need to study new issues, confront them directly, discuss, and resolve them,” he added.

Since 2022, Hong Kong has been developing its crypto market, as a separate legal jurisdiction, in an effort to become a global hub for such business with the implicit approval of Beijing. Regulations on the mainland have remained unchanged.

While mainland investors have still found ways to trade cryptoassets, there have also been calls for the government to loosen its strict ban as other markets, the US in particular, have taken a more welcoming stance.

Republican presidential candidate Donald Trump, in an effort to appeal to cryptocurrency investors, said at a bitcoin conference in July that the US must embrace crypto to avoid letting China “dominate”. Democratic presidential nominee Kamala Harris earlier this month also said that she would encourage “innovative technologies” such as digital assets.

Banning crypto mining in China was “very unwise” because it drove business to the US, Wang Yang, vice-president for institutional advancement and chair professor of mathematics at Hong Kong University of Science and Technology, said during a panel discussion in July.

If former US president Trump retakes the White House, Wang said, China could be removed from the Swift financial messaging system or at least face restrictions, Wang claimed. The country should also look into tokenisation as a way to prepare for decoupling risks, he added.

In late 2022, Chinese economist Huang Yiping, a former member of the monetary policy committee at the People’s Bank of China, also said China should consider whether its cryptocurrency ban was sustainable in the long run, as it could miss opportunities in technologies such as blockchain.

China’s premier affirms need for policy speed as stimulus package sets markets ablaze

https://www.scmp.com/economy/policy/article/3280567/chinas-premier-affirms-need-policy-speed-stimulus-package-sets-markets-ablaze?utm_source=rss_feed

In the wake of last week’s salvo of stimulus measures – a “policy bazooka” deployed to fast track China’s economic recovery – Premier Li Qiang has urged government departments to implement high-level edicts as quickly as possible.

“[We must] expedite the roll-out and implementation of policies, with those relatively mature launched immediately,” said Li at an executive meeting of the State Council on Sunday. “All departments should not circumvent difficulties or pass the buck, but rather form strong synergy in their work.”

He also called on the government to strengthen coordination through “effective macroeconomic control” and develop “new incremental policies” in response to evolving circumstances.

Li’s comments serve as additional incentive for China’s vast state apparatus to mobilise and meet the annual gross domestic product growth target of “around 5 per cent” – a task made harder by weak domestic demand, distress in the property sector and strains on local government coffers.

To heed this call, the People’s Bank of China and the country’s biggest economic centres have lowered mortgage rates for existing home loans and loosened restrictions on real estate purchases.

Markets have responded in turn, with the Hang Seng Index surging around 2.4 per cent on Monday to hit 21,133.68 at close. Some HK$505.8 billion (US$65.1 billion) in shares changed hands, setting a record for a second business day in a row.

The index has gone up 13.8 per cent since the PBOC made the announcement on Tuesday.

Also on Monday, the Shanghai Composite Index soared by 8.1 per cent and the CSI 300 Index jumped 8.5 per cent, a frenzy that pushed turnover on the Shanghai and Shenzhen bourses to reach a combined record of about 2.6 trillion yuan (US$370.75 billion).

China’s 10-year treasury bond yield traded at around 2.2 per cent on the same day, and the yield on its 30-year treasury bonds stood at about 2.4 per cent.

The yuan also continued to strengthen, as the PBOC set the daily fixing rate at 7.0074 yuan per US dollar – topping Friday’s rate of 7.0101 – with the offshore rate hovering around 6.99 as of Monday afternoon.

At an unexpected meeting of the Communist Party’s Politburo on Thursday, President Xi Jinping called for stronger support for the private sector and encouraged officials to prioritise economic revival without worrying about consequences for making mistakes.

The PBOC said on Sunday that commercial banks need to complete mortgage rate cuts for existing home loans by October 31, with an expected cut of about 0.5 percentage points on average. The move follows an earlier pledge to implement interest-rate cuts and monetary easing measures to bolster the beleaguered property sector.

“As significant changes occur in the supply-demand dynamics of the real estate market, shortcomings in the current mortgage rate pricing mechanism have become apparent,” the central bank said.

“It has drawn strong public concern and underscored the urgent need for adjustment and optimisation.”

Major Chinese cities are also rolling out measures to further relax restrictions on home purchases. The southern powerhouse Guangzhou announced starting Monday homebuyers no longer have to be vetted for eligibility if they want to own one or more flats in the city – an exemption that applies to locals and non-locals alike.

Financial capital Shanghai has also made changes, allowing those from outside the city who have paid local taxes for 12 months to own a flat, a reduction of the previous eligibility period by two years.

Outspoken economist Yu Yongding said at a forum in Beijing on Saturday the country urgently needs a fiscal policy package to complement last week’s stimulus measures and fully energise markets.

“I think the ball is now in the Ministry of Finance’s court. We hope to see new action from them,” Yu said. He recommended China begin by increasing infrastructure investment, “or we won’t meet this year’s 5 per cent growth target”.

Investment bank Goldman Sachs said in a Sunday research note that the recent moves represent a break from the “previous piecemeal style” of easing and provide a “sizeable dose” of stimulus the market “has long been hoping for.”

The bank estimated the PBOC’s easing measures as boosting real GDP by 0.4 percentage points, but added the growth implications of potential fiscal measures reported by the media are “difficult to pin down.”

“Altogether, we still see risks to our 4.3 per cent real GDP growth forecast for 2025 as two-sided, although the flurry of policy news in recent days has widened the range of potential outcomes,” the bank said.

Hong Kong among top destinations for mainland Chinese tourists during ‘golden week’ break

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3280581/hong-kong-among-top-destinations-mainland-chinese-tourists-during-golden-week-break?utm_source=rss_feed

Hong Kong is among the top destinations for mainland Chinese visitors for the coming National Day “golden week”, state media has said, while tourism industry leaders have attributed the city’s appeal to its strong transport network.

Popular destinations in Asia included Bangkok in Thailand, Seoul in South Korea, Osaka in Japan and Kuala Lumpur in Malaysia, according to state broadcaster CCTV which looked into outbound flight ticket orders from various travel platforms.

The media outlet said on Monday that these locations could be reached within a five-hour flight for mainland travellers.

Timothy Chui Ting-pong, executive director of the Hong Kong Tourism Association said the city has a competitive edge over other countries as a destination for Chinese tourists, thanks to its convenient transport network including frequent flights and high-speed rail.

“The number of flights from the mainland to the city exceeds those to other destinations,” he said.

He cited Monday data as an example, saying there were in total 58 flights from the mainland to Singapore, compared with 89 flights to Hong Kong.

“The number of flights from mainland to Hong Kong far exceeds other destinations, resulting in cheaper air tickets,” he said, adding that travellers were therefore more inclined to visit the city.

Chui also expected the large number of tourists would still benefit the local economy including retail and hotel industries, even though the sluggish economy might affect travellers’ willingness to spend.

He said bookings at his hotel in To Kwa Wan were already full for the coming week.

The Immigration Department earlier this month said about 10 million people, including residents and tourists, would pass through the city’s sea, land and air crossings from September 28 to October 7.

Authorities said the travel figures were expected to peak on National Day on October 1 – the start of the seven-day “golden week”. They anticipated around 523,000 outbound and 632,000 inbound trips.

According to the Travel Industry Council, Hong Kong is expected to welcome as many as 1.2 million mainland visitors during the golden week holiday, up 10 per cent from last year.

Sara Leung Fong-yuen, chairwoman of the Hong Kong Tourism Industry, said that Asian cities including Hong Kong were popular destinations of the mainland tourists given the sluggish economy.

“The economy in China is still recovering. Travellers may be reluctant to spend significantly and are likely to choose short-term trips,” she said.

Leung added that Hong Kong had its attractions particularly for tourists from the Greater Bay Area, citing the scheme by the Chinese government to integrate the cities of Hong Kong, Macau and nine other cities of Guangdong province into an economic hub.

“The transport between the Greater Bay Area and Hong Kong is very convenient compared with the past,” she said, adding that travellers can take the train to visit the city within a few hours.

Leung said the retail industry should enhance efforts to provide the best experience for travellers to increase the city’s competitiveness.

“Mainland travellers are staying fewer days in the city while some just come for a walk without staying overnight,” she said.

The biggest attractions for travellers were in-depth tours and traditional elements such as the neon signs of Hong Kong, she said.

She called on the government to keep the traditional elements of the city, while the retail industry could provide services such as delivering purchased goods to customers’ homes.

China’s Xi Jinping lobs warning to ‘separatists’ across Taiwan Strait in National Day speech

https://www.scmp.com/news/china/politics/article/3280590/chinas-xi-jinping-lobs-warning-separatists-across-taiwan-strait-national-day-speech?utm_source=rss_feed

President Xi Jinping used his annual National Day address on Monday to call for all-out effort to counter mounting uncertainty and to send a strong warning to “separatists” on Taiwan.

“Be prepared for the future and resolutely overcome all uncertainties,” Xi said at an official event in Beijing to mark the 75th anniversary of the founding of the People’s Republic on Tuesday.

He also said Taiwan was “China’s sacred territory” and “the people on both sides of the [Taiwan] Strait are connected by blood”.

“We must … promote the spiritual harmony of compatriots on both sides of the strait, and resolutely oppose Taiwan independence separatist activities,” Xi said.

In addition, Xi pledged to press ahead with reform and opening up, state broadcaster CCTV reported.

The commitments come as Beijing moves to regain economic momentum in the face of an increasingly challenging set of geopolitical headwinds.

Last week, the Politburo called a meeting to discuss economic affairs, something that is usually reserved for the months of April, July and October.

At the meeting it issued a rallying call to help tide over enterprises facing hardship and salvage the distressed property market.

China’s central bank and financial regulators also unveiled a slew of measures last week, including interest rate cuts. More supportive fiscal policies are expected to be on the way.

More to follow …

China set to beat pre-pandemic travel levels during ‘golden week’ holiday

https://www.scmp.com/news/china/politics/article/3280595/china-set-beat-pre-pandemic-travel-levels-during-golden-week-holiday?utm_source=rss_feed

China is expected to beat pre-pandemic levels of domestic travel during this year’s week-long National Day holiday.

“Golden week” is typically one of the country’s busiest travel periods and this year is expected to see a total of 1.94 billion journeys during the holiday, which starts on Tuesday, according to Li Yang, the vice-minister for transport.

The average number of daily trips is expected to reach 277 million, a slight increase of 0.7 per cent compared with last year, and almost 20 per cent more than in 2019.

“More than 80 per cent of the trips, around 1.526 billion, will be made by people driving themselves, and the remaining 20 per cent will be by commercial transport, including trains, buses, planes, and ships,” Li said.

Around 175 million passengers are expected to use the railways between Sunday and next Tuesday, according to China Railway. This Tuesday is expected to be the busiest day for train travel, with more than 21 million journeys.

Trip.com, an online travel agency based in Shanghai, said earlier this month that it expected spending on travel and tourism to reach record levels this week, thanks in part to lower hotel and air ticket prices.

This year’s “golden week” comes as China’s economy is grappling with flagging growth as consumer confidence lingers just above historic lows.

The authorities are trying to boost domestic consumption to counter the problem and state news agency Xinhua said “consumers are becoming increasingly rational, with a focus on value for money becoming dominant”.

The ministry of tourism has said that the first three quarters of the year saw 4.29 billion domestic trips, with total spending of 4.32 trillion yuan (US$616 billion).

Meanwhile, the number of trips from overseas reached 95 million, a 55.4 per cent year-on-year increase, recovering to 93.4 per cent of 2019 levels after visa restrictions were eased for travellers from 54 countries.

The authorities are expecting to see a rising number of cross-border trips during golden week.

The average daily number of inbound and outbound travellers is expected to reach 1.75 million, a year-on-year increase of 18.5 per cent, according to the National Immigration Administration.

Hong Kong’s immigration department has predicted a total of 10 million border crossings between September 28 and October 7, with the busiest checkpoint, the Lo Wu crossing, seeing around 208,000 travellers each day.

Beijing has recently eased restrictions on residents of Fujian province visiting the Taiwanese-controlled islands of Matsu and Quemoy.

In response to a question by a Taiwanese journalist, Zhang Zheng, vice-minister for tourism, said on Monday that visits to those areas were expected to peak during the holiday week. Zhang also said “we hope that mainland residents will soon be able to travel to Taiwan”, and called for “smooth cross-strait exchanges”.

After ditching Chinese funding, UAE forges AI alliance with US in ‘tech hedging strategy’

https://www.scmp.com/week-asia/politics/article/3280515/after-ditching-chinese-funding-uae-forges-ai-alliance-us-tech-hedging-strategy?utm_source=rss_feed

Months after backing out of investments in Chinese tech firms under American pressure, the United Arab Emirates has formed a partnership with the United States to lead global advancements in artificial intelligence (AI).

The agreement was formalised last Monday, with the two countries’ national security advisers endorsing “common principles for cooperation on AI” during a meeting in Washington.

Under these principles, state-owned Emirati tech companies will avoid partnerships with Chinese AI firms flagged by the US for national security concerns.

But analysts expect collaboration with Chinese firms to continue in politically neutral fields like renewable energy.

The AI partnership was one of three areas highlighted by US President Joe Biden during his discussions on September 23 with Emirati President Sheikh Mohammed bin Zayed Al Nahyan.

Biden highlighted the pact, along with deepening defence ties and the nations shared interests in “preventing conflict and de-escalation”, as grounds for formally recognising the UAE as a “major defence partner” – a status that will enhance military cooperation, interoperability and advanced weapons transfers between the two.

The US has previously granted this status to India, which is part of key strategic alliances like the Quadrilateral Security Dialogue with Australia and Japan.

According to a joint statement after the presidential meeting, the US and UAE aim to “strengthen cooperation, develop regulatory frameworks” and promote the safe deployment of emerging technologies through their shared AI principles.

This new partnership builds on a quid pro quo established in February, when Abu Dhabi’s state-owned AI holding company G42 divested from Chinese tech firms, ensuring access to critical US technologies, including Nvidia chips.

Sales of such chips to the Middle East have been restricted as part of a US national security review.

G42 owned an estimated US$100 million investment in ByteDance, owner of the app TikTok, which the US could ban in January under a controversial law that seeks to force the Chinese firm to sell the platform.

G42 also previously collaborated with Chinese AI firm BGI Genomics – blacklisted by the US in 2021 as a Chinese military venture – in biotechnology projects, including one to trace the Covid virus during the pandemic.

Following its divestment from China, US tech giant Microsoft bought a US$1.5 stake in G42 with the goal of developing and deploying advanced AI and digital infrastructure in the Middle East, Central Asia and Africa.

The Microsoft-G42 partnership quickly unveiled a project that plans to leverage 1 gigawatt (GW) of geothermal energy to power data centres in Kenya, which the US designated as its first “major non-Nato ally” in sub-Saharan Africa in May.

During a June speech at the Council on Foreign Relations in New York, White House technology adviser Tarun Chhabra said the Microsoft partnership with G42 was part of intensified US efforts to prevent Middle Eastern states from collaborating with China’s Huawei on AI development.

“The effort to work with Microsoft as an alternative to Huawei is generally a positive development and one that we want to encourage,” Chhabra said.

The UAE has otherwise resisted American pressure to stop doing business with Huawei, which installed the country’s 5G infrastructure in 2019.

The dispute was further fuelled by American allegations that China was building an intelligence facility at a container terminal operated by Cosco Shipping Ports at Abu Dhabi’s Port Khalifa – claims the UAE rejected as unfounded after conducting an investigation.

The tensions led the UAE to pull out of talks for a US$23 billion deal to acquire US F-35 stealth warplanes and MQ-9 Reaper drones.

As part of its drive to become a major player in the technology industry, the UAE also plans to establish AI data centres across Asia, including in India, Indonesia, Malaysia, and the Philippines.

On September 18, G42 announced it would build AI data centres in India with a dedicated power generation capacity of up to 2GW – about double the country’s currently installed capacity – and deploy a powerful supercomputer.

On the same day, Abu Dhabi’s global technology investment firm MGX – partly owned by G42 – joined the Global AI Infrastructure Investment Partnership, a consortium that includes top US corporations Microsoft, BlackRock and Global Infrastructure Partners.

The consortium aims to invest up to US$100 billion in AI data centres and supporting energy infrastructure using Nvidia’s expertise. Short term plans call for raising US$30 billion in private equity.

But the newly announced AI partnership between Abu Dhabi and Washington “should not be understood” as the UAE joining the US-led chips and AI coalition that includes Japan, and South Korea, said Ahmed Aboudouh, China studies research head at the Emirates Policy Centre in Abu Dhabi.

“I don’t think the Emirati leadership is interested in putting the UAE in this position,” he told This Week In Asia.

Instead, Abu Dhabi is charting its own path, focusing on maximising self-interest by developing its industrial and tech sectors and positioning itself as a major tech power in the future.

“The UAE has a vision to be the Taiwan of the Global South when it comes to tech power,” said Aboudouh, who is also an associate fellow of the British think tank Chatham House.

As such, he does not think the UAE has completely abandoned its AI cooperation with China.

The UAE’s “strategic, long-term priority” is to diversify its options in AI and other advanced technologies, ensuring its tech development is not reliant on any single player in the future, Aboudouh said.

“Think about it as a tech hedging strategy,” he added.

Robert Mogielnicki, a senior resident scholar of the Arab Gulf States Institute in Washington, said the US-UAE plan to deepen AI cooperation reflects the UAE’s ambitious technology goals, the technology expertise the US contributes, and their robust bilateral relationship.

“While US-China competition in the technology space isn’t going away, these two countries bring very different types of partnerships to the Middle East, Africa, and Central Asia,” he told This Week In Asia.

“I see both the US and China playing important but differing roles in these parts of the world,” Mogielnicki said.

Scarborough Shoal ‘completely surrounded’ by Chinese ships, Filipino fishers say

https://www.scmp.com/week-asia/politics/article/3280472/scarborough-shoal-completely-surrounded-chinese-ships-filipino-fishers-say?utm_source=rss_feed

China’s annual four-month fishing ban in the South China Sea may have ended, but fisherfolk of the Philippines’ Zambales province report the persistent presence of Chinese vessels around Scarborough Shoal, just 120 nautical miles (222km) away.

The shoal, known locally as Bajo de Masinloc, has been “completely surrounded” by Chinese coastguard and militia vessels, New Masinloc Fisherman’s Association President Leonardo Cuaresma told This Week in Asia.

This area has long been a traditional fishing ground for Filipino fishermen, who now find themselves pushed back to nearly 40 nautical miles (74km) away, with Chinese vessels aggressively chasing them off if they venture closer, Cuaresma said.

Despite the Philippines’ claim to Scarborough Shoal as part of its 200 nautical-mile exclusive economic zone under the United Nations Convention on the Law of the Sea, China asserts “indisputable sovereignty” over the area.

The recent fishing moratorium, which began on May 1 and ended on September 16, was framed by state-run news agency Xinhua as a measure to “safeguard the rights and interests of marine fisheries and protect the marine ecological environment”.

China’s coastguard announced in May that it would begin enforcing an order allowing the detention for up to 60 days of foreign boats deemed to be “trespassing” in the South China Sea.

While China has long implemented fishing bans affecting its Southeast Asian neighbours, it has not strictly enforced them, said foreign policy and security analyst Lucio Pitlo III, a research fellow at the Asia-Pacific Pathways to Progress Foundation.

In the past, the ban “had not affected the normal livelihoods of fishermen from bordering coastal states”, he said – though it has been “the perennial subject of diplomatic protests”, especially from the Philippines and Vietnam.

Yet local fishermen report seeing a marked increase in Chinese patrols over recent months.

“Since June 15 up to present, Bajo de Masinloc has been heavily guarded and no one can enter,” Cuaresma said.

Tasked by the Philippine Navy with monitoring the area, he and his group have counted around 14 vessels regularly patrolling the shoal, with four ships continuously present since June. “It’s as if they’re there 24/7; they don’t leave,” he said.

Eyewitness accounts further support Cuaresma’s observations. A local fisherman returning from a month-long trip noted an uptick in Chinese vessels surrounding Scarborough Shoal.

“We couldn’t get close, but even from a distance, we could spot eight vessels,” Leonido Moralde, who mistook a grey ship for a Philippine vessel until he spotted its red flag, was quoted as saying by the Philippine Daily Inquirer.

Cuaresma fears that the presence of Chinese ships will not diminish any time soon. Just two weeks after the moratorium was lifted, a small group of fishermen from nearby Subic attempted to fish near the shoal but were blocked and threatened.

“They were chased away and had weapons pointed at them,” he said.

The intimidation tactics employed by Chinese vessels have gravely affected local livelihoods, Cuaresma said.

Fishermen who deploy traditional fish-aggregating devices, or payao, near the shoal have been unable to harvest their catch due to fear of harassment. Cuaresma estimates that those fishing commercially have seen their catch plummet by nearly 70 per cent, forcing them to fish closer to home.

This shift has caused overcrowding in smaller fishing grounds, as deep-sea fishermen encroach on areas typically reserved for local fishers.

“These fishermen who used to go to Scarborough Shoal are now crowding this part of the sea,” Cuaresma said, noting a significant reduction in available fishing grounds.

Philippine Coast Guard spokesman Commodore Jay Tarriela recently urged local fishermen to reclaim their livelihoods in the West Philippine Sea – Manila’s term for the waters it claims – and help assert the Philippines’ sovereignty.

But many, like Moralde, remain apprehensive, citing continued harassment even far from Scarborough Shoal.

Some fishermen have indicated they would only return to fishing if provided with communication devices to alert the coastguard in case of incidents.

“But the truth is, even if they give us radios, they have nothing to rescue us with,” Cuaresma said. “Each day we monitor, we see only one Philippine Coast Guard ship at Bajo de Masinloc, and they’re not even there every day.”

In May, the Philippine Navy had promised to increase its patrols in areas where fishermen are regularly harassed.

Cuaresma said he opposed Tarriela’s suggestion to return to fishing without adequate safeguards, stressing there was “no guarantee” of protection.

“It seems they are just putting the fishermen’s lives at risk,” he said. As a leader, I will not allow any of our members and fellow fishermen to be endangered.”

Tarriela acknowledged at a forum for fishermen last Tuesday that the coastguard and Bureau of Fisheries and Aquatic Resources face resource constraints that prevent round-the-clock patrols. He also noted that their vessels are deployed “strategically” based on “when the weather is favourable around Bajo de Masinloc”.

“[Authorities] have hardly gone with the fishermen to see and watch over them … the fishermen at Scarborough Shoal have returned to shore as they are scared of China’s threats that they would be detained if caught,” Cuaresma added.

Security analyst Chester Cabalza, president of the International Development and Security Cooperation think tank, criticised China’s fishing moratorium as a source of “fear and confusion”.

It creates “a lose-lose situation for both sides”, he said, highlighting the lack of clear objectives in managing traditional fishing areas amid ongoing territorial disputes.

Pitlo suggested that a joint or scientifically informed fishing ban could foster practical cooperation among littoral states “in choppy waters”.

Meanwhile, Cabalza emphasised that fishing activities in international waters were a matter of human rights.

“As long as China’s fishing moratorium is not fair to claimant states in the South China Sea, Manila should continue to advance its steadfast advocacy for the international rules-based order,” he added.

Chinese woman finds type 1 diabetes reversed after stem cell transplant in world first

https://www.scmp.com/news/china/science/article/3280444/chinese-woman-finds-type-1-diabetes-reversed-after-stem-cell-transplant-world-first?utm_source=rss_feed

Chinese scientists have reported the world’s first case of using cell transplants to treat type 1 diabetes.

The patient, a 25-year-old who had the chronic condition for over a decade, was able to naturally regulate her blood sugar some 2½ months after undergoing the minimally invasive surgery, Shanghai-based news outlet The Paper reported on Saturday.

According to the report, the surgery took just half an hour.

The team behind the breakthrough published their findings in the peer-reviewed journal Cell on Wednesday. Researchers from Tianjin First Central Hospital and Peking University were among those who took part in the study.

Diabetes is a major health threat worldwide. According to the International Diabetes Federation, China has the highest number of cases globally, with over 140 million patients and a prevalence rate exceeding 12 per cent.

Type 1 diabetes accounts for about 5 per cent of all cases of the disease. It is caused by an autoimmune reaction that destroys insulin-producing cells and often develops in children and adolescents. Patients with this condition cannot produce enough insulin to regulate blood glucose.

Insulin injections and glucose-lowering drugs often struggle to maintain precise blood sugar control, leading to various complications that severely affect the quality of life and can even be life-threatening.

Islet transplant, which involves removing islet cells from the pancreas of a deceased donor and implanting them in the liver of someone with type 1 diabetes, is an effective clinical treatment but is hindered by donor shortages.

Islet cells in the pancreas are responsible for producing hormones like insulin and glucagon which are then released into the blood stream and help to control glucose levels.

Now, stem cell therapy has opened up new possibilities for diabetes treatment.

The treatment outlined in the Cell paper utilised “chemically induced pluripotent stem-cell-derived islets” or CiPSC islets.

To do this, the researchers first collected adipose tissue cells from the patient and used small molecule chemicals to reprogramme these cells into pluripotent stem cells.

These cells were then transformed into islet cells and transplanted back into the patient’s body. Because these pancreatic cells originated from the patient, there was no immune rejection.

In June last year, the research team received official approval for clinical research and subsequently carried out the transplant on their first patient.

The young woman from Tianjin was diagnosed with type 1 diabetes 11 years ago and had already undergone two liver transplants and one unsuccessful pancreatic islet cell transplant.

Following the CiPSC islet transplant, the patient’s fasting blood glucose levels gradually normalised, and her need for external insulin steadily decreased. She completely stopped needing insulin injections 75 days after the transplant, and the improvement has lasted for over a year.

She used to experience significant swings in blood sugar levels and also suffered multiple episodes of severe hypoglycaemia. By five months post-transplant, her sugar levels stayed within the target range more than 98 per cent of the time, and this stability has been maintained.

The team also simplified the surgery and chose to transplant the cells into the abdominal muscles instead of the liver and avoid the inflammation risks associated with traditional islet transplants.

The injection was minimally invasive, the shallow site facilitated imaging monitoring, and the cells could be retrieved anytime if needed. The entire procedure took less than half an hour.

At the one year mark, “the clinical data met all study endpoints with no indication of transplant-related abnormalities. Promising results from this patient suggest that further clinical studies assessing CiPSC islet transplant in type 1 diabetes are warranted”, the team noted in the paper.

More importantly, the success of functional cells derived from chemically reprogrammed stem cells in clinical treatment suggests that chemical reprogramming could become a general platform technology for efficiently producing various functional cell types.

According to a report on the website of the Peking University Health Science Centre: “This could pave the way for broader use of cell therapy in treating major diseases – a breakthrough that may represent one of the first instances of induced pluripotent stem technology curing a serious disease in clinical settings.”

However, given that the patient was on immunosuppressants due to her liver transplants, the rejection risk of CiPSC islet cells cannot yet be fully assessed.

Long-term follow-up of the patient’s recovery would still be necessary.

“Two additional participants in this clinical study will reach their one-year follow-up by the end of this year,” The Paper’s report said.

China remains a talking point as election day looms for Trump and Harris

https://www.scmp.com/economy/global-economy/article/3280464/china-remains-talking-point-election-day-looms-trump-and-harris?utm_source=rss_feed

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China was top of mind for outgoing US President Joe Biden and his administration recently, along with the increasingly related war against Ukraine by Russian forces.

With a transatlantic consensus over China’s “very substantial” support for the Kremlin’s military production base solidifying, Biden used his final speech before the United Nations to underscore a theme that he has emphasised throughout his administration: the importance of international coalitions in managing relations with China.

The speech came just three days after a Quad summit with the leaders of Australia, India and Japan – held in Biden’s hometown of Wilmington, Delaware – a gathering that underscored the US leader’s effort poured into building alliances as a bulwark against Beijing.

And while Biden has made high-level engagement with Beijing a core part of his China strategy, he again showed a willingness to take direct action against national-security threats that the country poses, by proposing new rules that would ban Chinese connectivity from US vehicles.

How much of this boils down to Biden’s own determination – as opposed to pressure from US lawmakers from both parties, who have hauled his top officials in for hearings on China – is anyone’s guess. The House of Representatives, in particular, has pushed for stricter measures than what Biden has done.

Whatever the case, building alliances and partnerships with other countries – in addition to new tariffs, export restrictions and product bans – has defined Biden’s strategy, which sought to “change the environment in which China operated” instead of relying only on tools meant to change Beijing’s behaviour.

But now that the page is turning on Biden, the world is wondering what the next Oval Office occupant will do about China, and, of the two candidates – Vice-President Kamala Harris and former president Donald Trump – the latter has generated the most chatter.

In their first and possibly only debate, Trump reiterated his intention to slap more tariffs on all imports to the US, and by a larger margin on those from China, while Harris took aim at Trump’s penchant for tariffs and chastised the former president for admiring “dictators”.

However, the match-up – in which Harris was widely seen as the winner – produced little else of substance on the China front.

Foreign policy rarely motivates American voters as much as economic issues, so there’s significant risk in providing details. But inflation, in particular, has a direct China tie, given that a sixth of America’s imports originate from the country, so higher tariffs on its products will attract attention.

While China has been dethroned as the United States’ top source of imports – evidence that Washington’s tariffs and supply-chain diversification efforts are bearing fruit – US companies still sourced some US$430 billion worth of the country’s products last year, according to US government data.

Both major US presidential candidates fundamentally agree on international trade objectives, but look for more threats, posturing and volatile tariff barriers under a Trump 2.0 administration, particularly against China.

That was the message from an August panel hosted by the Asia Society Policy Institute (ASPI), which included Clete Willems, who served at the National Economic Council, National Security Council and US Trade Representative office (USTR) during the Trump administration; and Wendy Cutler, who worked for more than a decade at the USTR before becoming the ASPI’s vice-president.

This was no real surprise since Trump had already changed the course of US-China relations – dating back to when Washington established diplomatic relations with the People’s Republic of China in 1979 – by starting a tariff war in 2018.

While Trump has repeatedly insisted that the US makes “billions and billions” of dollars from the tariffs, most economists point out that US importers foot the bill, and that most of the added cost gets passed on to consumers.

The steady stream of reports criticising Trump’s tariff strategy includes a letter signed by 16 Nobel Prize-winning economists in June warning that the US and world economy will suffer if Trump wins the US presidential election in November.

The most damning response came last week in the form of an analysis by the Peterson Institute for International Economics warning of dire effects for the American economy, the world’s largest, if Trump’s plans were to materialise. This included a scenario where America’s real gross domestic product could plummet by nearly 10 per cent, with some impact expected to be felt through 2040.

Foreign policy also touches voter concerns on other fronts.

Nowhere is that more apparent than in the battleground state of Michigan, where an American subsidiary of the China-based Gotion High Tech faced public and political backlash because of speculation over its alleged ties to the Communist Party.

The issue pits governor Gretchen Whitmer, who touts the more than 2,000 jobs that the company plans to create at its proposed facility, against a wide range of local politicians and activists determined to kill the project, which had secured rights and funding.

With China topping the list of countries that Americans see as their enemy, it has been easy for opponents of the plan to gain the upper hand, despite the prospect of jobs in hi-tech manufacturing.

But there’s also a positive racial dimension amid the tumult of the US election thus far.

As the Democratic Party unites behind Harris, the nation’s first Asian-American and African-American woman to be nominated for president by a major political party, many Asian-Americans said they feel increasingly emboldened and optimistic that their voices will be heard.

Research published by the Committee of 100 last week showed how much this matters to the community that has faced an increase in violence and harassment in recent years, owing to factors ranging from misplaced blame for the Covid-19 pandemic to the scrutiny that US authorities have put on Chinese living in the country.

The death of Jane Wu, a prominent China-born neuroscientist at Northwestern University in Illinois, who took her own life in her Chicago home in June after her lab was shut down, has drawn attention to the latter.

Whether Harris’ policies would actually make a difference for the community if she makes it to the White House remains to be seen.

60-Second Catch-up

Joe Biden stresses foreign policy legacy, including China relations, in final UN speech.

PLA sends South China Sea commander to US for first time in over 2 years.

China raises Xinjiang cotton with parent firm for Calvin Klein and Tommy Hilfiger.

Opinion: Asian-American voters must figure out how to make their numbers count.

Harris-Trump: tough talk on China but little substance in first US presidential debate.

US House approves legislation to restrict tax credits for EVs using Chinese battery technology.

US plans phased security ban on China-, Russia-made connected vehicle software.

Eyeing China, Quad leaders expand joint maritime security operations in Indo-Pacific.

US called out China for supporting Russia in Ukraine, says Pentagon.

Deep Dives

Southeast Asia is playing an ever-growing part in China’s investment and diplomatic decisions, particularly as Beijing’s rivalry with Washington heats up. In the second of a four-part series on China’s ties with Asean, Dewey Sim looks at the challenges facing the bloc and what it must do to remain relevant.

A long and heated rivalry between the United States and China could spell trouble for Asean – a scenario that would expose cracks within – and pose “tremendous risk” to – the regional bloc as member states grow increasingly divided over their approaches to the superpowers, according to diplomatic observers.

Read more.

Southeast Asia is playing an ever-growing part in China’s investment and diplomatic decisions, particularly as Beijing’s rivalry with Washington heats up. In the first of a four-part series on China’s ties with Asean, Shi Jiangtao looks at the wider implications of the increasingly adversarial relationship between Beijing and Manila.

Escalating hostilities between Beijing and Manila in the South China Sea has brought the region closer to an undesired conflict, putting Southeast Asia’s growing China conundrum on the spot.

Read more.

A majority of Chinese-Americans believe Washington is not doing enough to combat discrimination, overwhelmingly see US-China relations as dismal and find that deteriorating bilateral ties fuel the discrimination and hateful rhetoric they face personally, according to a survey released on Wednesday.

Respondents noted struggling with psychological issues, particularly those who are younger, female and regularly experience racial discrimination, the report by the non-profit Committee of 100 added.

Read more.

Republican presidential nominee Donald Trump’s vows to usher in a “manufacturing renaissance” in America have intensified as he seeks to differentiate himself from Democratic hopeful US Vice-President Kamala Harris ahead of US election day.

Standing before a ‘Made-in-USA’ banner at a campaign rally in Savannah, Georgia, on Tuesday, the former US president pledged to snatch “other countries’ jobs” and slap hefty tariffs on foreign-made goods to shield American industries.

Read more.

America’s top envoy to Beijing said the US will not tolerate a “second China shock” and expressed support for a “global pushback” to surging capacity in China’s electric vehicle (EV) industry and other sectors.

Speaking via video link from Beijing on Thursday, US ambassador to China Nicholas Burns called on European allies to jointly address China’s overcapacity issues and support to Russia’s war against Ukraine. He also warned of more sanctions if Beijing did not cease supplies of dual-use goods to Moscow.

Read more.

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[Sport] Does Chinese investment benefit or damage Ireland?

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China’s factory activity shows marginal improvement in September, beats expectation

https://www.scmp.com/economy/economic-indicators/article/3280465/chinas-factory-activity-shows-marginal-improvement-september-beats-expectation?utm_source=rss_feed

Factory activity in China marginally improved in September, but remained in contraction for a fifth consecutive month, suggesting continued weakness in the world’s second-largest economy.

The official manufacturing purchasing managers’ index (PMI) – a survey of sentiment among factory owners – rose to 49.8 in September, compared to August’s reading of 49.1, according to data released by the National Bureau of Statistics (NBS) on Monday.

It exceeded the expected reading of 49.5 predicted by economists polled by Bloomberg.

A reading above 50 typically indicates an expansion of economic activity, whereas a reading below implies a contraction.

Meanwhile, China’s non-manufacturing PMI – which tracks both the service and construction sectors – fell to 50 in September from 50.3 in August, ending a run of 20 straight months of expansion.

September’s data comes just after Beijing announced a slew of heavyweight policies to boost its ailing economy last week, including cuts to the mortgage rate for existing housing and its reserve requirement ratio.

The State Council also unveiled a set of guidelines last week, placing employment as a top priority, while the top-level Politburo vowed to help tide over enterprises facing hardships in an unexpected meeting.

Any impact from the measures, though, would not have been reflected in September’s PMI sentiment as the surveys are believed to be conducted in the middle of the month.

More to follow …

4 China KOLs who are known for their quirkiness, unique styles, advocacy for greater good

https://www.scmp.com/news/people-culture/china-personalities/article/3279789/4-china-kols-who-are-known-their-quirkiness-unique-styles-advocacy-greater-good?utm_source=rss_feed

As China’s live-streaming and e-commerce industries continue to expand, influencers are resorting to tricks and stunts to capture eyeballs in their quest for followers and revenue.

While some have garnered praise and recognition, others have encountered criticism for their controversial or bizarre content.

The Post examines four key opinion leaders (KOLs) noted for their distinctive style.

Han Meijuan

Known for his “cross-dressing” persona, this influencer has attracted more than 9 million followers on Douyin.

He wears exaggerated, quirky make-up and flamboyant wigs. This combined with his distinctive voice has made him a viral sensation.

Han’s signature catchphrase is “every cause has an effect, and your retribution is me” followed by “remember to double-click, mwah”.

Born in 2000 in Heilongjiang province, northeastern China, his original name was Han Peiquan.

He was born with a cleft lip and palate and had undergone seven rounds of surgery by the age of 14.

Despite his love for singing, his condition initially prevented him from doing so clearly.

In 2021, he took part in Produce Camp 2021, a Chinese idol survival show that selects male trainees to form a boy group. His humorous remarks garnered significant attention.

Iron Head

Known by his real name, Dong Guangming, and born in 1987 in the eastern province of Zhejiang, Iron Head gained initial fame by posting videos that exposed tourist scams at seafood markets and supermarket lottery frauds.

His efforts helped visitors avoid scams and earned him millions of followers and praise online.

Despite his early reputation for promoting good, Iron Head was embroiled in a criminal investigation amid allegations of extortion over threats to another live-streaming host.

In June, he attracted significant attention by admitting to painting the word “toilet” on a stone pillar at the politically sensitive Yasukuni Shrine in Japan.

Han Anran

With 3.5 million followers on Douyin, Han Anran is known for frequently documenting her private events such as marriages, divorces and childbirth live on camera.

Han first rose to fame at 16 after appearing on the reality show X-Change, where she sparked controversy by saying: “Never too old to do plastic surgery,” a play on the traditional saying: “One is never too old to learn.”

Now at just 25, she has gone through four marriages, three divorces and undergone dozens of cosmetic procedures, earning her the playful nickname “the marriage review KOL”.

This month, Han announced the birth of her second child and immediately took to live-streaming the event.

During the broadcast, her partner, Song Haoran, was seen holding the newborn while promoting products.

In 2019, she even live-streamed her labour pains during the birth of her first child.

Yin Shihang

Like his friend Han Anran, Yin Shihang, who has 1.4 million followers on Xiaohongshu, has also leveraged his relationships to boost his live-streaming traffic, earning him the nickname “marriage proposal blogger”.

Between 2020 and 2021, Yin proposed four times to his second girlfriend, Tao Lulu, during live-streams, all while selling products.

During one of the proposals, as Yin knelt on one knee, a viewer sent a gift that popped up on the screen. Yin immediately turned to the camera to thank the viewer.

The situation became even more dramatic when Yin’s ex-girlfriend, He Jingjing, appeared in the live-stream sending virtual gifts.

Later, both Tao and He admitted that the entire event was staged, and Yin had paid them for their participation.

Despite this, Yin’s final proposal live-stream drew an audience of more than 1.7 million viewers, generated 45 million yuan (US$6.4 million) in sales and earned him 16 million yuan.

Our Hong Kong Foundation vows to mend ‘huge reputation damage’ to city amid US-China rift

https://www.scmp.com/news/hong-kong/society/article/3280438/our-hong-kong-foundation-vows-mend-huge-reputation-damage-city-amid-us-china-rift?utm_source=rss_feed

Hong Kong’s largest think tank has a pressing task to help repair the “huge reputational damage” the city has suffered as a result of strained US-China ties.

Bernard Chan, chairman of the Our Hong Kong Foundation, said it would expand its overseas exchanges to persuade outsiders to come and see the city for themselves, at a time when both the government and businesses feared repercussions amid ongoing geopolitical tensions.

The prominent businessman and former convenor of the key decision-making Executive Council also said that as a financial hub, Hong Kong should be under no illusion that US-China ties would return to the way they used to be, regardless of the outcome of November’s US presidential election.

Urging local businesses to accept the “new norm”, he said that if US Vice-President Kamala Harris won, President Joe Biden’s policy towards China would continue.

If former president Donald Trump won, he added, policies could become more unpredictable.

In an interview with the Post to mark the foundation’s 10th anniversary, Chan said the priority for the think tank was to help the city retain its global competitiveness.

The think tank was founded in 2014 by the city’s first chief executive, Tung Chee-hwa, who passed the chairmanship to Chan last year.

Speaking at its anniversary banquet last Tuesday, Xia Baolong, director of the Hong Kong and Macau Affairs Office, called on local businessmen to transform their patriotism into action.

Zheng Yanxiong, Beijing’s liaison office chief in the city, also said he hoped that locals would take on “new responsibilities” to contribute to the country.

Elaborating on the need for the think tank to help repair the city’s reputation, Chan said government-to-government exchanges were challenging, and the business sector also faced difficulties.

“Sometimes they may not want to go high-profile talks about anything because of [fears about] repercussions,” he said.

Instead, he felt it might be helpful to extend engagement to a wider cross-section of international organisations and find “common ground outside politics”.

“If I manage to convince them to even make an effort to come to Hong Kong and see for themselves, that would already be a huge win for us,” he said.

Asked about the role of think tanks since political changes in the city had marginalised some groups on the other end of the political spectrum, Chan said: “There’s still lots of sectoral interest and resistance in every part of society. These are the things we tackle.”

Chan, 59, is president of Asia Financial Holdings and Asia Insurance and also has key public roles, including as vice-chairman of the West Kowloon Cultural District Authority.

He studied in the US and held US citizenship until 2004 when he joined the Executive Council, a key decision-making body reporting to Hong Kong’s chief executive. He was the group’s convenor from 2017 to 2022.

US-Hong Kong ties soured after Beijing imposed the national security law in the city in 2020, following months of anti-government protests in 2019.

Then-president Trump responded by slapping sanctions on Hong Kong’s top officials and depriving the city of its preferential trading status. The current Biden administration has maintained a tough position against China, and tensions have intensified.

Chan said these tensions had contributed to the “massive departures” from Hong Kong of US companies or those with American interests.

He said that even before the US House of Representatives approved a bill this month that could close Hong Kong’s Economic and Trade Offices in the US, the city’s ability to engage meaningfully with Americans had been compromised.

“The damage was all done,” he said. “The relationship is so sour and so toxic, such that a lot of people just didn’t want to be seen dealing with [Hong Kong].”

He expected ties to remain strained even after the US presidential election, regardless of who won.

“There is no illusion that things will dramatically return to what they used to be. I think China will still be considered a threat to Americans, they’ll take advantage of that,” he said. “This is the new norm.”

The Our Hong Kong Foundation has three arms – the Public Policy Institute, the Academy of Chinese Studies and the Hong Kong Chronicles Institute.

Last year, it published four policy research reports and held 12 forums in an effort to broaden its international network.

Its benefactors include property developers, banks, conglomerates and individuals.

Chan said that amid the economic downturn, the level of support and donations were unlikely to remain the same as before. Since he became chairman, the management had also trimmed costs.

He said The Tung Foundation remained the single largest financial supporter, and the active involvement of former city leader Tung’s son Alan had helped donors stay committed.

Alan Tung is on the think tank’s board of governors and is a member of its finance committee.

Former city leader Tung, 87, remains an honorary chairman of the think tank, but has not appeared at public events for almost three years. He is known to have undergone heart surgery in 2021.

Chan said: “I’m grateful that Mr Tung set this platform up, but the foundation needs to evolve as well. Like the rest of Hong Kong, we need to make sure that we stay relevant.”

How China and the US went from ‘90% cooperation to 90% competition’

https://www.scmp.com/news/china/diplomacy/article/3280445/how-china-and-us-went-90-cooperation-90-competition?utm_source=rss_feed

Elizabeth Economy is a senior fellow at Stanford University’s Hoover Institution, an expert on Chinese politics and foreign policy, and was a senior adviser on China at the US Department of Commerce. Her most recent book is The World According to China. This interview first appeared in . For other interviews in the Open Questions series, click .

The Chips and Science Act is about ensuring that the United States is not overly dependent on any one source, namely Taiwan, for such a critical technology, and about ensuring that the United States can remain competitive, not only as an innovator but also as a manufacturer. So at the heart of the Chips and Science Act is bringing back advanced manufacturing to the United States, and ensuring US competitiveness and supply chain resilience.

The US government is investing US$39 billion into manufacturing, and an additional US$13 billion into R&D, but it has attracted over US$400 billion in private sector investment into manufacturing as a result of the Chips and Science Act. It’s moving at an incredibly aggressive pace, and I would say that has been quite successful to date.

In terms of export controls, those are really directed at chips and equipment that the United States believes can be used for military applications that would undermine US national security.

I don’t think that we have seen a full study of the efficacy of export controls. My preliminary assessment based on what I’ve read is that the export controls are having mixed success. But I think that more work needs to be done to assess the real implications or the ramifications of the export controls.

Yes, I think so. It is also important to note that China is an incredibly innovative society, and coupled with IP theft and forced technology transfer, whatever delays the country may face are likely to be reasonably short-lived because it will find ways to advance its own industry.

China has had a much longer history than the United States of significantly limiting foreign trade and investment on the grounds of national security. The United States has come much later to the game. And because this is a new area of policy, there is the potential to swing too wide, and then to have to recalibrate.

China has been on a more consistent trajectory of having national security be the priority through programmes, for example, such as military-civil fusion. There have also always been sectors in China that have been largely closed to foreign investment, such as the media sector.

Policies are going to evolve in the United States, and different people will have different lines that will represent a bridge too far. Once we are talking about consumer goods or services that have no national security applications, you have definitely crossed the line.

There’s no doubt that both countries have significantly ramped up their rhetoric and expanded their rules around what parts of the economy need to be protected in trade and investment on the grounds of national security.

But it is important to find the right balance.

There is an enormous amount of space to continue to trade and invest with China. [Commerce Secretary Gina] Raimondo has also said that the US wants its companies to succeed in China. There is no reason that we don’t want Starbucks selling lattes. We want non-security oriented trade and investment to continue and to thrive. It is an important source of civil society connectivity. But I think that’s not a message that either country has made clearly and strongly enough. There’s room to do more on that side of the ledger.

It is important to recognise that this issue of overcapacity with China is not simply an issue for Washington. We tend to frame everything in a US-China competition narrative. But the truth is that this isn’t even just an advanced economy issue. We’ve seen Brazil, India and Mexico also raise concerns about Chinese overcapacity in the clean energy sector.

This is not about the United States versus China, but actually an issue of how China is developing its economy, the choices that it makes, and the impact of those choices on the global economy.

The United States is in the midst of trying to develop its own clean tech sector. It passed the Inflation Reduction Act and is investing heavily in clean tech here at home. But it also has seen significant investment from European and Asian advanced economies into the US clean tech sector as a result of the IRA. In that context, it is very challenging to have heavily subsidised Chinese clean tech companies exporting but actually not making profits and swamping other markets. That’s why you’ve seen these new tariffs put in place.

Beyond that, we will likely see the administration put out a final ruling on the outbound investment. We will probably see additional export controls. And there may be additional secondary sanctions on Chinese companies that are exporting restricted products and technologies to Russia. I don’t see any let-up in the use of US defensive economic tools before the election.

PGII is not going to be a counter to the Belt and Road Initiative. It is an effort to do investment differently – with stronger financial and political governance standards. It is not going to attain the same level of financing and investment that the belt and road has.

Maybe over a very long period of time, it could be a true alternative to the Belt and Road Initiative, depending on what happens to belt and road support in China.

China has a state-directed model of the Belt and Road Initiative. The US is a larger source of overall investment in Africa, Southeast Asia and Latin America than China, but it’s private sector investment. The US has enormous investment by foundations – the Gates Foundation in Africa, for example. But that doesn’t get counted as US investment.

And so the implications of it both in terms of policy and in terms of just brand recognition don’t redound to the US government in the same way that the Belt and Road Initiative redounds to China.

China and Russia as governments appear more present in Africa. The US image has also suffered throughout much of the world as a result of its strong support of Israel.

There are also specific countries in Africa where the United States has taken actions that are unpopular. For example, Washington removed Uganda, Niger, Gabon and the Central African Republic as beneficiaries of the African Growth and Opportunity Act for human rights violations.

Frankly speaking, these polls tend to go back and forth year after year. A better measure of influence and popularity might be where Africans want to go to study and live. When China and Russia supplant the United States on that metric, I will be concerned.

I’ve always understood the Chinese economy as being very complex, like the United States, which means that it is quite reasonable to have strengths in some parts of the economy and weaknesses in other parts.

I also think of the Chinese economy as two economies. There is much of the coastal economy and some major interior regions like Chongqing, which essentially operate at the level of advanced economies. They possess world-leading talent and technology, and have incredible innovation and manufacturing ecosystems.

Then there is most of the interior part of the country and some parts of the coastal economy that have, in many respects, been left behind in terms of the Chinese economic miracle.

So it wouldn’t surprise me to see positive growth as a result of significant government investment in technology and advanced manufacturing in the already developed part of the country but at the same time continued weakness in much of the rest of the country.

Xi Jinping is not investing heavily in bolstering the social welfare net and building up consumer demand. So I would anticipate, again, that you’re going to see big growth numbers based on government investment and the coastal economy’s success, but this growth is not necessarily going to be felt by the average Chinese consumer or the interior parts of the country.

In 2017, Xi Jinping said that China offered an alternative model to that of market democracy. In that context, how China’s economy develops, how it distributes the benefits and wealth of its economy, the strides that it makes in cleaning up its environment, the relative degree of political liberalisation – all of these things play into how appealing the rest of the world might find China as a model.

The strength of the Chinese economy is one of the most important elements in terms of other countries’ interests in emulating China. It is also what enables China to continue to pursue its Belt and Road Initiative, which has been very successful and helped fill the gap in global infrastructure needs, but also has had some challenges in terms of the way that it’s been implemented.

There have been many protests in belt and road recipient countries around the lack of environmental and labour safeguards, the lack of transparency in deal-making, and in the level of debt some countries have incurred.

But overall, it’s had a big impact and it’s been important to China’s overall ability, as Xi Jinping says, to move towards centre stage or reclaim a degree of centrality on the global stage.

Before we talk about the Sinocentric model and its appeal, we have to understand the elements of it and the different international audiences that will be affected.

The Sinocentric model includes, for example, China’s moves to reclaim territory that it considers to be its sovereign territory. That’s not something that most of its neighbouring countries find appealing, because it means that they’re going to lose territory. So that’s not an element of Sinocentrism that many countries latch on to.

If you’re talking about the desire to push the United States out as the dominant military power in the Asia-Pacific or the Indo-Pacific, I think you would also find that most countries in the region want the United States to remain as a hedge against China’s rising military power and aggression.

When you talk about the Belt and Road Initiative, there are many aspects – for example, China’s desire to embed its policies, its technical standards, its technology, globally – that many countries might find appealing.

Again, how the Belt and Road Initiative has been pursued may not be appealing, but a new high-speed rail or bridge may be very appealing.

China’s push on de-dollarising the global economy is also clearly appealing to many countries. There is a very interesting nuance to China’s policy evolution. For many years, China has pushed the notion of internationalisation of the renminbi but did not have much success.

On other areas of global governance, China has had mixed success in advancing its normative views. It has not made much progress in advancing its preference for state control over the internet or the dissolution of the US-led alliance systems. But it has found supporters for its views on the primacy of economic development rights as opposed to individual, political and civil rights.

I think the most important lesson that the United States should take from China is to develop a vision for where it wants to be in 2050 and beyond and what kind of world it envisions.

One of the challenges for the US with a four-year election cycle is that it is very difficult for any one president to articulate a long-term vision, pursue it, and then ensure that it will be maintained over time.

But it is essential. Otherwise, you are constantly in a reactive mode, responding to the impulses of the moment. You may be trying to hold on to a version of the international system that isn’t flexible or adaptable enough or that doesn’t represent the current moment as well as it should. Having a long-term strategic vision also enables you to set priorities and make more considered policy trade-offs against that vision.

China also effectively leverages its companies to realise its broader foreign policy objectives. The United States doesn’t control its companies in the same way that China does, but it could nonetheless do a better job of engaging with its private sector.

The private sector is one of the great strengths of the United States. It is highly innovative and globally recognisable. The US educational system is still among the best in the world, and many people – including hundreds of thousands from China – want to study, work and live there.

Immigration is clearly an issue that the US needs to address. Some people have forgotten that, with very few exceptions, all Americans are immigrants and have been the lifeblood of our economy. We have thrived as a country because we attract the best and the brightest from all over the world. They want to live and work in an environment that is both politically free and economically dynamic.

The United States has strong economic and political fundamentals, but to continue to play a leadership role globally, it will need to develop a vision of itself and the international system for the 21st century that is broadly appealing and reflects the interests and needs of others.

There is bipartisan consensus that China is a near-peer economic and military competitor and that it is the greatest long-term strategic challenge that the United States faces.

It is important again as we are framing this to bear in mind two things.

First, as Chinese international relations scholar Wang Jisi has said, if you want to understand why US policy towards China has changed, it is because China has changed. The United States had the same policy of engagement for decades. So, this new bipartisan consensus is a natural reaction to all the changes we see in China primarily, although not entirely, initiated by President Xi Jinping. He has made China much more repressive and authoritarian at home and much more ambitiously expansive abroad.

The second thing to bear in mind is that this concern about the direction in which Chinese domestic and foreign policy has been moving is not unique to the United States. Many countries find dealing with China more challenging today than previously. They have all experienced China’s Wolf Warrior diplomacy, its secrecy around Covid-19, its military assertiveness in the Indo-Pacific and its support for Russia’s invasion of Ukraine.

Chinese overcapacity is another concern that many countries share and causes them to see China through a more competitive lens.

My first book, which was published in 2004, was on China and the environment. And my first real engagement – beyond my dissertation work in China in the early 1990s – was working on this book in the mid-1990s to early 2000s.

As a result of this research, I got to know and became friends with many Chinese environmental activists in China. They were at the forefront of civil society development in the country. Chinese society was blossoming and blooming and full of dynamism. And you had the internet coming into China and communication was flowing freely.

The partnership between the United States and China on the environment was growing in leaps and bounds. Chinese environmental officials and NGO leaders would travel to the United States for educational opportunities and to be trained, and US scientists went to China to work on issues like climate change and develop partnerships.

So my intellectual introduction to China came at a time of increasing political and economic openness.

I never would have imagined the country could move backwards – become less politically and economically open, drastically reduce the opportunities for civil society engagement with US and other foreign counterparts, and constrain the flow of critical economic and other data. For me, it’s just a very sad and depressing change.

My initial inclination is to answer on a personal level. I think that there is still an important coterie of people in both countries who want to find a path for cooperation and believe that many of the biggest issues that the world faces today – like climate change, health security and food security – can be most effectively addressed through cooperation.

Of course, they can also be addressed if each country does the right thing independently, but I think that there are synergies that will come about if the two countries find ways to work together that will be greater than each country simply following its own path.

Still, it is not easy. There was hope in the United States – and even in some parts of China – that Beijing would align with the West to condemn Russia’s invasion of Ukraine. I think that could have been a pivotal moment for the US-China relationship and for China’s relationship with the EU. Now it has become one more obstacle in the relationship.

Barring any significant shift in the direction of China, any sort of return to a policy of reform and opening, the competition is going to continue to be challenging. I think it’s going to be the job of both sets of leaders to try to set some clear boundaries on the nature of the competition, and to try to develop additional areas of cooperation.

For most of the relationship over the decades, it’s been 90 per cent cooperation and perhaps 10 per cent competition or conflict. Now, we are at 90 per cent competition and 10 per cent cooperation. I would like to find our way back to a middle ground, but it will be challenging and will require real leadership on both sides.