Mistral点评

• Chinese retail investors, battered by market winds, dial back on enthusiasm
• China is quietly extracting itself from a US helium ‘stranglehold’, experts say
• 7 takeaways from China’s trade, inflation data in September
• [Sport] BBC boss warns of Russian and Chinese propaganda
• Chinese pharmaceutical firms expand to Africa under ‘health silk road’
• Who makes China’s stimulus decisions, and what’s the procedure?
• Malaysia defends Chinese ships’ visit to Penang after criticism over ‘convivial’ welcome
• [Sport] China 'punishes' Taiwan president remarks with new drills
• Diverse China burial customs see cliff, sky, water, mummy, ancestral altar send offs
• China eyes route for C919 into Southeast Asia, with landlocked Laos on the radar
• Chinese think tank recommends Nvidia chips for data centres, warning of high transfer costs
• Public outrage as China delivery man beaten by drunk woman for giving road safety advice
• Philippines defence chief questions China’s sincerity on South China Sea code
• China’s grass-roots officials told to ‘sift out losers’ to stop random attacks on public
• China’s export grew 2.4% in September despite frictions, far lower than expectations
• Lebanon turns to Chinese electronics after West ‘lost credibility’ since deadly attacks
• China launches large-scale military drills around Taiwan after President Lai’s National Day speech
• EU braces for Chinese trade blows in aftermath of EV tariff vote
• China’s economic woes, Indonesia’s Prabowo takes the stage: 5 weekend reads you missed
• China holds large naval and air force exercises around Taiwan as a warning against independence
• ‘Empty nest youth’: China phrases that reflect country’s rapid progress, social challenges
• The Philippines and South Korea are steeling security ties. How will China respond?
• ‘Infrastructure monster’: how China built the world’s longest high-speed railway
• [Sport] The dangers of China’s cyber-nationalism
• [Sport] Harris or Trump? What Chinese people want from US election
• BBC World Service retreat ‘helping Russia and China push propaganda’
• How South China Sea disputes are uniting Asean states
• Economist Joseph Stiglitz on the US-China trade war and the death of ‘hyper-globalisation’

Chinese retail investors, battered by market winds, dial back on enthusiasm

https://www.scmp.com/economy/china-economy/article/3282320/chinese-retail-investors-battered-market-winds-dial-back-enthusiasm?utm_source=rss_feed

Wild swings in China’s stock market have created a climate of uncertainty for investors, with some seeing opportunity and others fearing deeper turmoil ahead – a state of affairs reflected in the broader population by a marked hesitancy to spend.

For Stella Li and others like her, the turbulence of recent weeks has brought little but regret.

Her mother, tempted by talk of a potential fiscal stimulus, used savings originally earmarked for an early mortgage repayment to buy into the market. She is now facing down a significant loss.

“She was furious after watching [Saturday’s] Ministry of Finance press conference, mainly because it did not clearly indicate a stimulus of specific size,” said Li, a Shenzhen-based photographer in her thirties, “which she believes will lead to the stock market losing steam.”

Their reactions contrasted sharply with those of institutional investors, who took heart from the ministry’s plans for local debt relief and assurances the “room” to raise debt or fiscal deficits still exists.

More than 90 per cent of China’s 200 million stock investors – one out of every seven people – are individuals with investments below 500,000 yuan (US$70,749).

Since late last month, Chinese exchanges surged after Beijing announced numerous policy packages to revive the economy, spurring white-hot speculation over further steps to curb drops in prices and demand, weak consumer confidence and an ailing real estate market.

For those not investing, continuing economic worries are suppressing income levels and job prospects, keeping consumer habits on a downward trend and leading to more cutbacks in personal expenses.

The government has made use of an array of tools to keep conditions stable, including cuts to interest rates, reductions in mortgage rates and tapping an unused quota of government bonds. Fiscal support for real estate is also in the mix.

Li’s mother had planned to lend her daughter and husband her savings – 500,000 yuan – for a one-time early repayment of their mortgage. But as many observers predicted an enormous fiscal stimulus was on the way to back the blitz of reforms, she could not resist the craze. She put a portion of the funds into the market on October 8, and her portfolio is now in loss.

“Future changes in mortgage rates, or speculation in the property and stock markets, no longer matter to us,” Li said. “Our confidence will only recover if our income can steadily grow again, but that seems unlikely. The risk of losing our jobs is increasing.”

Beijing-based paralegal Guo Yijia shared Li’s despondency, noting the investments she made before the pandemic have yet to break even.

“I’m already at rock bottom, so even if I’m riding a roller coaster, it’s like I’m going in circles at the lowest point – no thrills, no excitement,” she said.

Her consumption choices have consequently changed. Where she used to buy her coffee at Starbucks, spending about 35 yuan per visit, she has downgraded to cheaper domestic brands and may soon start bringing her own cup to save even more.

Guo said she is preparing to shift her money into the US dollar market, seeing it as a safer bet given the present uncertainties.

“My confidence will only come back when unemployment drops and income levels return to normal.”

Salaries across industries have stagnated in China as growth falters and demand wanes, with even dispatch positions – assignments from companies sending employees to overseas branches – not being spared.

Pay for these jobs in Mexico, for example, used to range from 30,000 yuan to 50,000 yuan per month. Now, however, 20,000 yuan is considered competitive by many.

Zhou Sida, an analyst at a multinational corporation, expressed some optimism despite having suffered losses himself.

He said the conference on Saturday showed the government’s determination to bail out the economy, which led him to increase his holdings, diversify his investments and adopt a more aggressive strategy.

“I am more confident about the government’s economic stimulus,” he said, adding he looks forward to upgrading his travel plans from domestic destinations to Europe or New Zealand once his bet pays off.

China is quietly extracting itself from a US helium ‘stranglehold’, experts say

https://www.scmp.com/news/china/science/article/3282295/china-quietly-extracting-itself-us-helium-stranglehold-experts-say?utm_source=rss_feed

In recent years, China has been discreetly reducing its dependence on US-sourced helium – a rare and strategic resource widely used in medical and hi-tech industries, including semiconductors and quantum computers.

The endeavour has involved a series of measures including diversifying overseas supplies and increasing domestic production with scientific and technological breakthroughs.

The strategy appears to be working, according to experts.

China used to depend on the US for most of its helium. “If China faces a shortage of helium, the impact on technology would be significant because in many areas, helium is hard to replace,” said Jost Wuebbeke, managing partner of Sinolytics, a research-based consultancy with offices in Berlin and Beijing.

But now, if the US attempts to use helium as leverage in a tech war with China, the potential impact would be “marginal”, said Wuebbeke, whose research focuses on China’s economy and industrial policy.

Today the US accounts for less than 5 per cent of China’s helium imports, while Qatar accounts for almost 90 per cent, with an increasing amount of helium also coming from Russia, which is expanding its capacity, he said.

The US could restrict Qatar’s access to helium extraction technology as a way of sanctioning China, but “the political costs of damaging relations with Qatar would be greater than the benefits for Washington”, Wuebbeke said.

From a supply availability perspective, while the US supplies a little less than half of the world’s helium, there are other major suppliers, notably Russia, which will become the world’s third major supplier when the Amur project – launched by Russia’s largest natural gas company – reaches full capacity in a few years, according to Phil Kornbluth, president of US-based Kornbluth Helium Consulting, which has ties to some Chinese clients.

As societies become more technology driven, demand for the valuable gas is soaring.

Helium can be chilled to near absolute zero, making it essential for cooling cutting-edge equipment such as quantum computers, magnetic resonance imaging (MRI) scanners, fusion reactors and particle accelerators. Helium is also extremely stable, making it useful in the manufacture of sensitive products such as computer chips and laser light.

Driven by rapid growth in the semiconductor industry, among others, China has become the world’s second largest user of helium; consumption grew by 7.2 per cent between 2020 and 2023.

Helium is a by-product of natural gas production, and while China has natural gas, it contains only trace amounts of helium, making direct extraction too expensive for mass production.

In an article published in late 2022 in the journal Frontiers in Environmental Science, several researchers from PetroChina’s Beijing-based Research Institute of Petroleum Exploration and Development stressed that once the US imposed a “stranglehold” blockade on helium exports to China, the country’s helium supply would be “greatly restricted”.

The US has a global monopoly on helium reserves and the most advanced helium extraction technology, they added.

But the dynamics have shifted significantly. Last month, achievements in helium extraction and related equipment development were nominated for an annual scientific award by the Chinese Academy of Sciences (CAS).

These scientific and engineering accomplishments “break the long-standing monopoly of the US and ensure the security of China’s helium resources”, according to the nomination document.

In an interview last year with Liaowang, a publication under state news agency Xinhua, Zhang Suojiang, director of the Institute of Process Engineering, which is also under the CAS, said that to address the low grade and extraction challenges of China’s helium reserves, his institute developed helium separation membrane materials and components, which have shown excellent performance in trials.

In 2020, China opened its first large-scale helium plant capable of producing the material at commercial scale. The Technical Institute of Physics and Chemistry under the CAS, which backed the project, said it had successfully extracted helium from natural gas at the plant, located in China’s northwest.

There have been other breakthroughs. China has set its sights on extracting helium from coal bed methane. Two years after it began a joint project in 2021 led by the China Coal Research Institute, the team said it had successfully overcome the challenges and mastered the technology.

The world’s first high-purity helium extraction plant for coal bed methane was commissioned in China in 2023, opening up a new avenue to boost the country’s helium production.

Scientists are also seeking alternatives to helium to produce the ultra-low temperatures needed in hi-tech industries.

For example, an international team, including physicists from a CAS institute, have discovered a cobalt-based quantum magnetic material that could theoretically achieve ultra-low temperatures without relying on helium. Their findings were published in the peer-reviewed journal Nature in January.

According to an article published in February by the China National Chemical Information Centre (CNCIC), a leading domestic consulting firm in the petroleum and chemical industry, China’s pure helium production capacity was relatively low until 2020.

But between 2020 and 2023, China saw significant expansion in production capacity, thanks to advances in helium extraction technology.

However, Wuebbeke highlighted that China’s efforts to expand domestic capacity haven’t had much effect so far, citing the fact that although helium production increased fivefold between 2018 and 2022, 92 per cent of helium consumed in the country was still imported.

CNCIC predicted that China would still rely on imports for around 60 per cent of its helium needs by 2028.

Still, it said that China’s domestic helium production could be a powerful bargaining chip to deter foreign suppliers from raising prices and cutting off supplies at will.

7 takeaways from China’s trade, inflation data in September

https://www.scmp.com/economy/economic-indicators/article/3282322/7-takeaways-chinas-trade-inflation-data-september?utm_source=rss_feed

The value of China’s exports grew by 2.4 per cent, year on year, to US$303.71 billion in September.

The figure was lower than the expected 6.18 per cent increase surveyed by Chinese financial data provider Wind and fell short of the .

“Export growth slowed last month but remained resilient, with volumes still rising at a double-digit pace. We think shipments will stay strong in the near term, supported by gains in export competitiveness,” said Zichun Huang, China economist at Capital Economics.

Customs spokesman Lu Daliang said the reading had been affected by “short-term incidental factors”, such as typhoons in port cities, a higher base last year, and global shipping congestion.

Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, noted how “export growth softened in September”.

“Some temporary factors, such as bad weather, likely played a role,” he said. “Nonetheless, China’s export growth has been remarkably strong this year and helped offset the weak domestic demand.”

China’s imports rose in September by 0.3 per cent from a year earlier, compared with 0.5 per cent growth seen in August.

“In volume terms, imports appear to have declined,” added Huang at Capital Economics. “But we think they will recover in the near term.”

Sluggish domestic demand continued to drag import demand, with many categories such as agriculture, steel and cosmetics seeing contractions in growth through the first three quarters, said Lynn Song, chief economist for Greater China at ING.

Through the first three quarters of the year, China’s imports grew by 2.2 per cent, year on year, he added.

In September, China’s exports to the United States surpassed those to the European Union and the Association of Southeast Asian Nations (Asean) to become the top destination.

Exports to the US increased by 2.16 per cent in September, while shipments to the EU rose by 1.32 per cent.

China’s exports to the Asean bloc, meanwhile, rose by 5.48 per cent in September compared with a year earlier, while exports to Russia increased by 16.6 per cent.

China’s trade surplus stood at US$81.71 billion in September, compared with US$91.02 billion in August.

“This lower surplus is expected to contribute less to third-quarter gross domestic product growth, which will be reported later this week,” added Song at ING.

China’s consumer price index (CPI), a key gauge of inflation, fell in September, with analysts pointing to an increase in food inflation being outweighed by further decreases in energy and core inflation.

China’s CPI grew in September by 0.4 per cent, year on year, compared with an the National Bureau of Statistics (NBS) said on Sunday.

But the reading fell short of the expected 0.7 per cent growth projected by economists polled by Wind, with analysts saying the miss was mainly led by non-food price inflation turning negative, despite higher food-price inflation, on a shortage of supply amid adverse weather.

Food prices grew last month by 3.3 per cent, year on year, including a 22.9 per cent jump in vegetable prices and a 16.2 per cent increase in pork prices.

“CPI inflation surprised on the downside despite a pickup in food prices,” said analysts at HSBC.

“This is reflective of recent trends in softer consumption as seen in the weaker-than-expected retail-sales data and contractions in sales of discretionary products such as clothing and cosmetics.”

China’s producer price index, which measures the cost of goods at the factory gate, deepened further on the back of worsening overcapacity after it slipped by 2.8 per cent in September, falling for the 24th consecutive month, compared with a decline of 1.8 per cent in August.

“Notably, consumer-durables prices, including that of cars and electronics, fell, which suggests that overcapacity could still be worsening,” said Gabriel Ng, assistant economist at Capital Economics.

The reading was worse than the 2.5 per cent decline forecast in a Wind poll.

“PPI deflation deepened due to weak domestic activity, particularly from the property sector, as well as softer global commodity prices,” said the analysts at HSBC.

They highlighted a drop in global oil prices, which was reflected in lower oil-related manufacturing PPI, while ferrous-metal-processing PPI also saw a steeper fall.

Sequential PPI inflation remained deeply negative in September at minus 0.6 per cent, month on month, up only marginally from minus 0.7 per cent in August, due to a continued broad-based decline in raw material prices, said analysts at Nomura.

China’s core inflation, which excludes volatile food and energy prices, saw a year-on-year fall of 0.1 per cent in September, reaching its lowest point since the start of 2021.

The key gauge used by monetary authorities dropped 0.1 per cent from August, while growth in the first nine months of the year stood at 0.5 per cent.

[Sport] BBC boss warns of Russian and Chinese propaganda

https://www.bbc.com/news/articles/cj9jgmexmx4o

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Chinese pharmaceutical firms expand to Africa under ‘health silk road’

https://www.scmp.com/news/china/diplomacy/article/3282304/chinese-pharmaceutical-firms-expand-africa-under-health-silk-road?utm_source=rss_feed

Chinese pharmaceutical giant Shanghai Fosun Pharmaceutical is expected to complete the first phase of its manufacturing facility near Abidjan, Ivory Coast’s biggest city, for antimalarial drugs and antibiotics by the end of the year.

The manufacturing facility, financed with €50 million (US$54.7) from the International Finance Corporation last year, is expected to produce 5 billion tablets annually once all three phases are completed.

According to Fosun, the project will bring nearly 1,000 job opportunities to the Grand-Bassam area east of Abidjan.

Fosun Pharma is one of a growing number of Chinese companies to set up offshore manufacturing plants in Africa as they search for markets for pharmaceuticals and medical products under the “health silk road” – a nickname for health sector investments under the Belt and Road Initiative, Beijing’s global trade and infrastructure strategy.

President Xi Jinping promised during the Forum on China-Africa Cooperation (FOCAC) summit last month that Beijing would promote pharmaceutical production and the medical equipment industry in Africa, including access to active pharmaceutical ingredients, through co-investment by Chinese and African private sector players.

The construction of the plant in Ivory Coast has been driven by huge demand in Africa. The World Health Organization estimates sub-Saharan Africa accounts for more than 95 per cent of global malaria cases and deaths.

The Chinese firm is a major producer of artemisinin medications, discovered in 1972 by Chinese scientist Tu Youyou, who in 2015 won a Nobel Prize in medicine for her work on artemisinin as an effective malaria treatment.

Fosun Pharma said in a recent statement that “artemisinin medicines developed with China’s scientific research efforts have become a ticket for China’s innovative medicines to go global”.

Ernest Tambo, professor of global health and pharmacology at the University of Global Health Equity in Rwanda, said that these medications – if produced in Africa and for Africa – could save the most vulnerable groups, especially children under age five and pregnant women, and help counter the growing trend of malaria drug resistance.

On Tuesday, Zambia’s Industrial Development Corporation signed a deal with China’s Jijia International Medical Technology Corporation to establish a cholera vaccine production factory in Zambia, the first on the continent, with an investment of about US$37 million. In the first phase of the project, the plant is expected to produce more than 3 million doses of the vaccines.

“This vaccine plant will serve not only Zambia but also the broader region and Africa,” Zambian President Hakainde Hichilema said.

“We’re grateful to President Xi Jinping and the people of China for making this vision a reality.”

Nigerian drug maker Fidson Healthcare Plc has also signed a deal with Chinese firms to build a US$100 million pharmaceutical plant in Lagos.

The agreement with Jiangsu Aidea Pharma, PharmaBlock Sciences Nanjing Inc and the China-Africa Development Fund will support the construction of a pharmaceutical plant in the Lekki free-trade zone to boost Africa’s self-reliance in healthcare delivery, particularly in tackling HIV.

The facility is expected to be completed by the spring of 2027. With around 2 million people living with HIV in Nigeria, the continent’s most populous nation, access to antiretroviral drugs is crucial, according to Fidson. The West African nation currently imports all of its antiretroviral medications.

The new plant will help fill the gap left by the exit of major Western pharmaceutical giants GSK and Sanofi from the Nigerian market last year.

Zhou Taidong, vice-president of the China Centre for International Knowledge on Development, which is affiliated with the Development Research Centre of the State Council, said the expansion of Chinese pharmaceuticals into Africa came as the continent works towards self-reliance and autonomy in health industries – especially in pharmaceutical manufacturing – in the wake of the Covid-19 pandemic.

He added that the expansion was also related to the Belt and Road Initiative, of which the health silk road is an important component.

“China will try to build diversified economic cooperation relations with [belt and road] countries beyond traditional infrastructure construction and assistance-focused health cooperation,” Zhou said.

Zhou said with China’s increasing capacity in the healthcare industry, industrial cooperation in pharmaceutical manufacturing is likely to expand quickly into other overseas markets.

Tambo said pharmaceutical co-investment in Africa was the right direction for China to take the lead and be one of the major leaders in terms of health and pharmaceutical investment and production in Africa.

“Covid-19 has shown that no country is immune, even America or China,” Tambo said of the push by countries to localise manufacturing of essential products.

Lauren Johnston, a China-Africa specialist and associate professor at the University of Sydney’s China Studies Centre, said Beijing’s health silk road aimed to improve health outcomes across belt and road countries while also creating opportunities for China’s healthcare industry, including the construction of clinics and hospitals, and provision of medical supplies and equipment.

Johnston said the health silk road was “a stunning opportunity” for Chinese investors since Africa lacked an established healthcare sector, including pharmaceutical supply chains.

“An advantage of Chinese firms is that, like Indian and Brazilian firms, they may be able to produce valuable over-the-counter and prescription medicines relatively affordably, and on the continent,” Johnston said.

China-Africa specialist David Shinn, a professor at George Washington University’s Elliott School of International Affairs, said China had a long history of investing in pharmaceuticals in Africa. He added that the recent deals were a sign of overcapacity in China and the need to move more facilities offshore to continue to make a profit.

“As China’s population decreases, domestic overcapacity will become a growing issue in a variety of industries. Africa is the fastest growing continent in the world and an obvious location for increased pharmaceutical production,” Shinn said.

Kai Xue, a Beijing-based corporate lawyer who advises on foreign direct investment and cross-border financing, said Chinese companies entering Africa’s pharmaceutical sector were partly motivated by the pursuit of higher profit margins outside their saturated home market.

Xue noted that Chinese pharmaceutical firm Humanwell has operated factories in Mali and Ethiopia for several years despite conflicts in those countries.

“These are profit-driven Chinese companies that stick to business,” he said.

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Who makes China’s stimulus decisions, and what’s the procedure?

https://www.scmp.com/economy/policy/article/3282326/who-makes-chinas-stimulus-decisions-and-whats-procedure?utm_source=rss_feed

In recent weeks, expectations of China unleashing a major stimulus reached a crescendo as the top brass of China’s major economic ministries and commissions took turns appearing on stage in the State Council’s press conference hall.

After an initial larger-than-expected monetary package unveiled in the last week of September, some market players voiced disappointment at the absence of substantial moves by the nation’s top economic planner and the lack of a fiscal stimulus figure.

With Beijing’s stimulus plans under way, a closer look at the decision-making procedure in China’s political system may help explain why the ministries have been tight-lipped.

Compared with the 2008 stimulus package announced by China’s then premier, Wen Jiabao, China’s current economic power now largely rests with the Central Financial and Economic Affairs Commission headed by President Xi Jinping.

And in the past decade, the top leadership has shunned all-out stimulus measures. The 4-trillion-yuan stimulus package rolled out in late 2008 was thought to have brought a variety of problems, including industrial overcapacity, a mountain of local-level debt through financing vehicles, heavy reliance on the property market, and rampant risk in the financial system.

Instead, they have preferred more targeted measures in trying to resolve the structural problems faced by the world’s second-largest economy.

But their tone changed when the Politburo, the centre of power within the Communist Party headed by Xi, convened an unexpected economy-centric meeting on September 26 and issued a rallying call to mobilise officials across the nation to prioritise reviving the economy, in a bid to achieve leadership’s annual growth target of “around 5 per cent”.

And Chinese leaders decided to issue “a package of incremental policies” to boost the economy.

Under China’s power hierarchy, the State Council – the executive branch of the government, responsible for ensuring that policy gets implemented from the national to the local level – was the first to take action. The executive meeting presided over by Premier Li Qiang three days later made the implementation arrangements of the Politburo’s decision.

Then the ministries unveiled their respective plans.

The National Development and Reform Commission, which is a long-term planner and a coordinator on economic issues, will focus on expanding and front-loading government investment to boost the economy, as it is responsible for approving large infrastructure projects.

And the source of funding will come from the Ministry of Finance (MOF), whose plans include debt relief for local governments, capital replenishment for major state-owned banks and fiscal support for the property market.

The MOF is also reviewing other potential policies, as finance minister Lan Foan said at a press conference on Saturday that there is a “large room” for the central government to raise debt and lift the deficit-to-GDP ratio.

In China, any reveal of a major stimulus would require the consent of top leaders.

An extra fiscal budget or bond quota requires legislative approval by China’s top legislative body, the National People’s Congress (NPC) or its Standing Committee, and the next opportunity will be in the coming weeks.

When talking on Saturday about introducing a one-time, large-scale, debt-ceiling increase for local governments to swap their hidden debts, Lan said specifics on the amount of money will be disclosed after the proper legal procedures.

Historically speaking, the NPC Standing Committee usually holds a chairman’s meeting in the second week after the National Day holiday, and the time and agenda of the upcoming legislature gathering are decided.

Thus, more details of China’s fiscal stimulus might be disclosed in late October or early November after the NPC Standing Committee meeting.

Last year, the NPC Standing Committee meeting was held from October 20-24 and a resolution was passed to issue an additional 1 trillion yuan (US$141.3 billion) worth of treasury bonds.

In December, there will be another Politburo meeting focused on economic issues and the Central Economic Work Conference will likely take place. At that time, more signals about raising the headline fiscal deficit and bond issuance for the next year should come to light.

Many economists expect that the size of the overall stimulus package might be counted in the trillions of yuan.

But Larry Hu, chief China economist at Macquarie Capital, said China’s policymakers may not announce an overall figure at all.

“First, they don’t need to come up with such a number for the [NPC] to approve. Second, it’s hard to come up with such a number, as the line between fiscal, monetary and industrial policies is often blurred in China,” he said in a note on Saturday.

And it would be politically incorrect to be seen flooding the economy with money in China, especially after the “4 trillion yuan stimulus” in 2008, he added.

Back then, the number was first announced by the former premier at a State Council executive meeting and disclosed to the public a few days later.

Malaysia defends Chinese ships’ visit to Penang after criticism over ‘convivial’ welcome

https://www.scmp.com/week-asia/politics/article/3282327/malaysia-defends-chinese-ships-visit-penang-after-criticism-over-convivial-welcome?utm_source=rss_feed

Malaysia’s government on Monday defended the visit of two Chinese navy vessels to Penang earlier this month, following public criticism of the trip, which involved a school visit during a period of high tensions over claims to the South China Sea.

The People’s Liberation Army Navy (PLAN) ships Qi Jiguang and Jinggangshan moored in Penang for a three-day goodwill visit from October 5 to 7, ending just before Southeast Asian leaders met in Laos.

Malaysians panned the warm reception for the 1,000 Chinese sailors to the island, as well as a visit involving lecturers and students from the PLA Naval University of Engineering to a Penang school, which went viral on social media.

The welcome was criticised by former deputy defence minister Ikmal Hisham Abdul Aziz, who said the visit sent the wrong message and served no logistical purpose as China had ports “illegally built” in the South China Sea that could replenish the vessels.

Responding in parliament on Monday, Defence Minister Mohamad Hasan defended the “convivial” welcome given to the ships, saying it was in line with this year’s 50th-anniversary celebration of diplomatic relations between Kuala Lumpur and Beijing.

“This has received the approval of the Defence Ministry. Meanwhile, the Foreign Ministry issued diplomatic approval for the ships to enter our waters and dock there,” Mohamad said, adding that the Penang state government organised other activities with PLAN.

His comments came shortly after Malaysia took over the chair of Asean from Laos for one year, with Prime Minister Anwar Ibrahim promising that it would entail a “clear vision and focus on inclusivity” where “every voice matters” and no one left behind.

The ships’ stopover came as events have amped up tension in the South China Sea. China has been accused of aggressive manoeuvres against other claimants of the contested waters, with Vietnam recently formally accusing Chinese law enforcement personnel of assaulting its fishermen.

Malaysia’s internet took the visit as a chance to challenge the government’s defence of the country.

On Facebook, social media influencer Azmi Saad quipped Julius Caesar’s famous quote, “I came, I saw, I conquered”, in his post, questioning the visit.

“Look at this. Such a warm welcome when they are the ones challenging us in the South China Sea right now,” Azmi said last Thursday, sharing photos from the visit.

On Friday, opposition lawmaker Wan Ahmad Fayhsal said Malaysia was sending the wrong signal to its Asean peers, particularly countries such as the Philippines and Vietnam, whose territorial waters Beijing similarly claims.

“As the chairman of Asean in 2025, Malaysia cannot give a ‘misleading’ direction to our neighbouring countries,” Fayhsal said. “What we are witnessing in Penang is very worrying and raises questions.”

Defence Minister Mohamad, however, said the Chinese embassy in Kuala Lumpur made a diplomatic request to visit “a school with a Confucianism teaching background” as one of its activities. Malaysian security forces handled it to ensure no violation.

“It is clear that everything requested in the diplomatic application did not breach national regulations,” he said.

Asean leaders recently met at a summit in Laos attended by Chinese Premier Li Qiang and US Secretary of State Antony Blinken, with the latter using the stage to condemn Beijing’s recent assertive actions in the contested waters.

At the Asean summit in Vientiane on Friday, Mohamad repeated Malaysia’s stance that diplomacy was the best way to settle the South China Sea issues and did not “shut the doors to discussion”.

“We call on all parties not to ‘slam the door’ but to come together to seek the best solution,” he said.

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[Sport] China 'punishes' Taiwan president remarks with new drills

https://www.bbc.com/news/articles/cvgd4yn45qlo

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Diverse China burial customs see cliff, sky, water, mummy, ancestral altar send offs

https://www.scmp.com/news/people-culture/article/3281871/diverse-china-burial-customs-see-cliff-sky-water-mummy-ancestral-altar-send-offs?utm_source=rss_feed

Deeply rooted in Chinese culture, burial customs stress the importance of passing away peacefully and returning to nature.

However, unconventional burials such as making use of cliffs, the sky, water and mummification all contribute to a rich tradition.

The Post takes a look at China’s unusual rituals for laying the dead to rest.

Cliff burials

One of the most well-known forms is the xuanguan, or hanging coffin, where the body is placed in a wooden casket suspended on wooden stakes driven into cliffs or placed in caves.

Commonly practised among the Miao people, who traditionally reside in remote mountainous areas, this practice holds that the higher the coffin is placed, the greater the respect for the deceased.

In addition, they believed that high-altitude burials allowed the dead to “watch over their ancestral homeland” in central China.

Also, given the harsh local environment, where farmland was scarce and predatory animals were prevalent, burying the dead in the cliffs not only saved farmland but also protected the bodies from wildlife.

This practice further gave rise to a specialised role known as body carriers, or so-called spider people, who were skilled in climbing mountains while carrying coffins and bodies.

This practice further gave rise to a specialised role known as body carriers, or so-called spider people, who were skilled in climbing mountains while carrying coffins and bodies.

Sky send-off

Historically prevalent in Tibet, the body of the deceased is left exposed in the wilderness for vultures to eat, also earning the practice the moniker “bird burials”.

Challenging geographic conditions in Tibet meant traditional earth or cremation burials were impractical. The practice is also linked to Buddhist beliefs.

Buddhism considers offering the body to living creatures after death as an act of virtue.

During the ceremony, a burial master prepares the site, lights a fire, recites prayers and signals to the vultures around.

The body is then dismembered and offered up to the birds.

Water way out

These include floating the corpse, “throwing” the corpse or scattering ashes.

In the floating corpse burial, the body is placed on a specially constructed raft or bamboo platform, sometimes accompanied by offerings of food or clothing.

Family members or tribal elders push the raft into the river, allowing the body to drift away.

A “throwing” corpse burial involves dismembering the body and throwing it into the river, or tying it with stones before doing so, as an offering to the river god.

In ash scattering, the cremated remains are spread into bodies of water, symbolising a return to nature.

Mummification

These are typically associated with ancient Egypt where pharaohs were dried and preserved for thousands of years after death.

This practice also existed in ancient China.

Archaeologists discovered hundreds of Bronze Age mummies in the Tarim Basin in northern China. These belonged to the Xiaohe people who lived about 4,000 years ago.

The mummies were naturally preserved due to the extreme dry and hot climate of the Taklimakan Desert, which caused only minimal decomposition of the body.

Ancestral shrines

Ancestral altars are often established in funeral homes for worship and prayer.

They serve as a place to honour the deceased and seek protection from the ancestors, with offerings typically placed on the altar as part of the ritual to show respect.

Common offerings include paper money, symbolising the wealth for the dead to use in their afterlife.

Incense, candles, and flowers are also placed on the altar to express reverence for the deceased.

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China eyes route for C919 into Southeast Asia, with landlocked Laos on the radar

https://www.scmp.com/economy/global-economy/article/3282255/china-eyes-route-c919-southeast-asia-landlocked-laos-radar?utm_source=rss_feed

China’s commercial aircraft have received interest from Laos, after Premier Li Qiang rolled his sleeves up to promote the symbol of advanced Chinese manufacturing and technology during his Southeast Asia tour.

In a joint communique with China’s Southeast Asian neighbour on Saturday, the countries agreed to strengthen cooperation under China’s Belt and Road Initiative and Laos’ strategy of going from “landlocked to land-linked”.

“China appreciates Laos’ interest in and intention to cooperate on Chinese commercial aircraft and welcomes Laos’ aviation enterprises to introduce these aircraft,” the communique said.

“China is also willing to further cooperate with Laos in technical support for Chinese commercial aircraft operations and customer service network.”

The communique, though, did not specify the narrowbody C919 passenger jet or the regional ARJ21, both of which are produced by the state-owned Commercial Aircraft Corporation of China (Comac).

Analysts said on Monday that Southeast Asian airlines would likely buy aircraft from Comac to elevate wider economic relations, with the region’s high number of budget airlines likely to opt for the C919 or ARJ21 if the price was right.

“There are certain industries that have outsized political influence and aircraft manufacturing is one of them, if you look at the history,” said David Bach, president of the Institute of Management Development in Switzerland, who is visiting China this week.

“Clearly the decision to purchase Chinese aircraft would not just be a commercial decision.”

China’s high-speed railway tracks and trains have already been used on Indonesia’s Jakarta-Bandung line, while they are also poised to be adopted in Thailand and other countries.

Southeast Asia, given its close economic ties with China and aircraft certification agreement, is widely viewed as a perfect destination for the C919, which is the Chinese equivalent to the Boeing 737 and Airbus 320 families of aircraft.

Indonesian budget carrier TransNusa is also the sole overseas operator of ARJ21, a turbofan aircraft with between 78 and 97 seats and a flight range of between 2,225km (1,383 miles) and 3,700km.

No overseas deals for the C919 have been publicised, despite Brazil-based cargo and charter carrier Total Linhas Aereas reportedly to have been in talks with Comac about an order for four C919.

Deals in Southeast Asia could come down to price, especially if buyers question the C919’s product support or technical specifications, said Richard Aboulafia, managing director of the US-based aerospace consultancy AeroDynamic Advisory.

“If heavily discounted and aggressively financed, it’s certainly possible,” he said.

Shanghai-based aircraft producer Comac has also stepped up efforts to tap the Southeast Asian market.

In February, Comac carried out demonstration flights of the C919 and ARJ21 in Cambodia, Indonesia, Laos, Malaysia and Vietnam after the C919 made its international debut at the largest regional aviation event in Singapore.

With over 1,000 C919 orders from domestic airlines, Comac is also looking to ramp up production to meet demand.

It has delivered 10 since it began commercial operations in May 2023, including eight for China Eastern Airlines, with at least three more set to be delivered in the final quarter of the year.

In January 2023, Comac deputy general manager Zhang Yujin told Chinese media that the annual production capacity of the C919 is expected to reach 150 within five years.

Comac has already introduced a second assembly line at its factory in Shanghai.

And overseas deals are vital for Comac to build its brand internationally, and also challenge the duopoly of Boeing and Airbus.

Southeast Asian airlines would consider the C919 more positively in view of Boeing’s safety woes and the needs of their own growing passenger markets, said Hugh Ritchie, CEO of Aviation Analysts International in Australia.

The region has one of the world’s most elaborate budget airline networks with more than 17 carriers reaching all 10 Association of Southeast Asian Nations (Asean) countries.

“Southeast Asia is a positive market for this aircraft,” Ritchie said. “You’ve got some of the fastest growing passenger numbers in the world in Southeast Asia, in India and in China.”

To widen its export prospects, Comac has been aggressively pushing for C919 certification from the European Union Aviation Safety Agency.

Laos previously signed a bilateral memorandum of understanding, which recognised and accepted the Chinese aviation regulator’s certification.

According to the statement, the two sides also agreed to promote the operation, maintenance and development along the China-Laos Railway and to promote the implementation of the development concept of the China-Laos-Thailand connection.

China is the largest foreign investor in Laos, and there is further potential to deepen cooperation in various fields, including the export of agricultural products, the import of electric vehicles and trucks, tourism, hotels and restaurants, and electricity, mining, and solar energy, the state-backed Xinhua News Agency said in an another report on Sunday.

Chinese think tank recommends Nvidia chips for data centres, warning of high transfer costs

https://www.scmp.com/tech/tech-trends/article/3282279/chinese-think-tank-recommends-nvidia-chips-data-centres-warning-high-transfer-costs?utm_source=rss_feed

A government-backed think tank has suggested that data centres in mainland China should choose Nvidia chips, warning of the high costs involved in shifting to domestic solutions.

“If the conditions allow, [data centres] can choose [Nvidia’s] A100 and H100 high-performance computing units. If the need for computing power is limited, they can also choose H20 or alternative domestic solutions,” the China Academy of Information and Communications Technology (CAICT), a government-backed think tank, said in a report on China’s computing power development issued on Sunday.

Nvidia’s chips have been highly coveted in China by big internet companies and other entities alike, but the California-based company is facing intensified US pressure not to ship its advanced graphics processing units (GPUs) to the mainland, its third-largest market in the financial year ended January 28, over fears the technology will be used to enhance the Chinese military.

Amid US sanctions, China’s domestic GPU start-ups have flourished, with progress in both hardware and software over the past three years, according to CAICT. However, the think tank pointed out that “it involves complex engineering to transfer models trained on Nvidia GPUs to domestic solutions due to differences in hardware and software”.

The A100 and H100 data centre GPUs – two of the most in-demand chips for training and running AI models – have been barred from export to China since August 2022. To get around the restrictions, Nvidia modified those chips to create the A800 and H800, but Washington subsequently barred them from being sold to China last October.

Nvidia has since developed the H20, L20 and L2 GPUs in an effort to maintain its market share in China. However, there have been reports from Chinese server makers that they encountered difficulties in placing orders for the H20.

As of the end of 2023, China’s total computing power from servers based on central processing units (CPUs) and GPUs, as well as supercomputers, grew to 230 Eflops, an increase of 27 per cent year on year, according to calculations done by the Post based on reports published by CAICT. Eflops refers to a unit for measuring the speed of a computer system.

The GPU-based computing power for AI training and inference grew at a much higher pace of 70 per cent year on year, a sign that China is accelerating its AI hardware development amid a global race in the sector.

As of June, more than 250 internet data centres (IDCs) have either been built or are under construction in China, as local governments, state-owned telecommunication network operators and private investors pour money into the “new infrastructure”. Industry experts have warned of a computing glut, as many of these facilities are located in areas far from the nation’s technology centres and sit idle.

CAICT’s latest report echoed that concern, warning that China’s massive buildout of IDCs has been marred by supply-demand mismatches, low hardware use rates, mismanagement, and low data quality.

“The trend of computing power fragmentation is increasingly severe, with GPU average use rates less than 40 per cent,” the report said. “There are big discrepancies on hardware in IDCs, such as in GPUs, AI accelerators and network structures, which made it harder to manage and dispatch hardware resources to accommodate for differential computing needs of AI tasks, further impeding the use rate.”

Most IDCs have to form computing clusters that combine hardware from different suppliers, each having technology barriers and mutually-incompatible software ecosystems and computing platforms, which made them hard to integrate, the report said.

Public outrage as China delivery man beaten by drunk woman for giving road safety advice

https://www.scmp.com/news/people-culture/trending-china/article/3282036/public-outrage-china-delivery-man-beaten-drunk-woman-giving-road-safety-advice?utm_source=rss_feed

A drunk woman in China kicked and slapped a food delivery driver who reminded her about road safety, sparking nationwide outrage on social media.

The 42-year-old woman, surnamed Huang, was detained by police in Chongqing, southwestern China, for attacking the delivery worker, surnamed Ran, in the street earlier this month, Xinmin Evening News reported.

Ran, 21, was sent to hospital for treatment, but the extent of his injuries was not reported.

According to the police statement, Huang was drunk that day and a passenger on the back of an electric bike her friend was riding.

Ran, who noticed the bike was swerving dangerously, chided them and reminded them of road safety rules when they got close to his bike.

His remarks annoyed Huang who angrily responded then pulled him onto the ground.

Video footage that went viral on mainland social media showed Huang kicking Ran, stomping on his face and hitting him.

Ran, who did not attempt to fight back, was heard shouting: “Do not we food delivery workers have human rights? You think you can beat us as much as you like?”

Other couriers gathered around and asked Huang to stop, while her friend tried to persuade her to leave, but one courier said: “You want to walk away after beating someone?”

Officers soon arrived and took Huang to the police station for questioning.

It was Ran’s first day in the food delivery job and he said he suffered physical and mental trauma as a result of Huang’s assault.

“She kicked my body and my head. I did not strike back. I am still quite dizzy,” he said.

The incident caused a considerable stir on mainland social media.

“This woman is outrageous! She thinks she can do what she likes?” said one netizen on Douyin.

“What a difficult situation for the courier. He could not fight back because he would also be punished,” said another person. “He is so young and just started the job. This incident will surely leave a big mark.”

“The woman should be punished seriously. We cannot let good-hearted people be bullied,” a third commented.

Philippines defence chief questions China’s sincerity on South China Sea code

https://www.scmp.com/news/asia/southeast-asia/article/3282251/philippines-defence-chief-questions-chinas-sincerity-south-china-sea-code?utm_source=rss_feed

The Philippines doubts China’s intention to negotiate a regional code of conduct in the South China Sea although Manila is looking forward to continuing discussions, Defence Minister Gilberto Teodoro said on Monday.

Teodoro said that while President Ferdinand Marcos Jnr had approved “good-faith discussions” with China over the long-delayed code, he doubted Beijing’s sincerity.

“Right now, honestly speaking, I do not see that,” Teodoro told reporters.

China’s embassy in Manila did not immediately respond to a request for comment.

Southeast Asian leaders called on Sunday for swift agreement on a code of conduct for the South China Sea based on international law, after escalating confrontations in the strategic waterway where US$3 trillion worth of trade passes annually.

China claims sovereignty over nearly all of the South China Sea, including areas claimed by Brunei, Indonesia, Malaysia, the Philippines and Vietnam.

The Philippines has complained of Chinese vessels’ use of water cannon, collision and ramming tactics to stop resupply and patrol missions in disputed waters.

The maritime code, which could help avoid such confrontations and prevent conflict, has been mooted for years but talks led by the Association of Southeast Asian Nations have made slow progress.

China’s grass-roots officials told to ‘sift out losers’ to stop random attacks on public

https://www.scmp.com/news/china/politics/article/3282044/chinas-grass-roots-officials-told-sift-out-losers-stop-random-attacks-public?utm_source=rss_feed

Chinese authorities are stepping up efforts to screen people at risk of taking out their anger on innocent members of the public following a series of attacks involving mass stabbings or cars being deliberately driven into pedestrians.

At the grass roots level, there is a long-standing tradition of identifying people with financial and emotional problems. But in recent months there has been a shift away from doing so with the aim of providing social support to trying to spot people “prone to vent their anger on the public”, media reports and officials say.

These groups are sometimes referred to as people who have experienced five or six “kinds of failures” but official definitions of these categories are hard to come by.

But one official in the eastern province of Zhejiang said they typically include people with psychological and mental health problems, relationship difficulties, those whose investments have failed, those struggling to make a living or juveniles who lack sufficient supervision.

“Before the latest round of surveys starting in early September, the police came to brief us on the recent cases of random attacks on the public,” said the official, who asked to be identified by his surname Chen.

“They told us that our job is very important because if we can sift out all these so-called losers and put them under watch, we can reduce the chances of them hurting people on the streets randomly.”

Chen said officials already keep former convicts and drug users under watch in the community to give the police “early prediction and warnings”.

The latest drive comes after a series of attacks on random members of the public. Recent high-profile cases include a knifeman who went on the rampage in a supermarket in Shanghai on September 30, killing three people and injuring 15.

Police arrested a man at the scene and said the 37-year-old suspect had come to Shanghai to “vent his anger due to a personal economic dispute”.

There have been other similar incidents this year, including a man arrested after three people were stabbed outside a school in Guangzhou in southern China on Tuesday, but local police do not always provide much information about the attacks or possible motives.

An official in the northern city of Tianjin named Wang said his district had started a similar drive to screen potential attackers in September.

Wang said he had been asked to submit a database of potentially dangerous residents to his superiors before the National Day holiday began on October 1 and he is also expected to file an update every time he visits households where residents “need extra attention”.

“While previously the focus was more on providing timely help, now it is more on checking on their mental stability. We were told that if a resident carries out a random attack, officials in charge of his or her district will be questioned on why the potential danger was not spotted earlier,” he said.

The authorities in some cities have started to publicise their efforts to identify dangerous elements.

In July, Guisi, a subdistrict of Ningbo, a city in Zhejiang, said visits to 3,000 households and 120 companies had uncovered 16 people who had suffered major failures in their lives as well as allowing them to verify the identities of more than 10,000 residents.

The Binfeng subdistrict office in Binzhou, a city in Shandong, published a statement on its website last month saying officials would “resolutely control … individuals with the five kinds of failures” to ensure there were no “extreme cases”.

China’s extensive and highly effective grass-roots control networks are the most effective way of curbing such attacks and nipping the danger in the bud, according to Deng Yuwen, former deputy editor of Study Times, the newspaper of the Central Party School, where cadres are trained.

“After all, the system has proven its effectiveness – often been overzealous – during Beijing’s pandemic control … But it is a slippery slope, they might put too many people under surveillance,” Deng said.

China’s export grew 2.4% in September despite frictions, far lower than expectations

https://www.scmp.com/economy/economic-indicators/article/3282281/chinas-export-grew-24-september-despite-frictions-far-lower-expectations?utm_source=rss_feed

China’s export growth slowed in September amid increasing investigations into its goods, however, Beijing remains optimistic about fourth-quarter shipments and believes it has advantages to withstand the barriers.

Exports grew by 2.4 per cent year on year to US$303.71 billion in September, according to customs data released on Monday.

The figure was lower than the expected 6.18 per cent increase surveyed by Chinese financial data provider Wind, and fell short of the 8.7 per cent rise recorded in August.

As with much of this year’s export growth data, the figure likely benefited from the base effect, after exports had contracted by a revised 8.55 per cent during the same period last year.

Imports, meanwhile, rose by 0.3 per cent from a year earlier in September, compared to the 0.5 per cent growth seen in August.

This led to a trade surplus of US$81.71 billion in September, compared with US$91.02 billion in August.

More to follow …

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Lebanon turns to Chinese electronics after West ‘lost credibility’ since deadly attacks

https://www.scmp.com/news/china/diplomacy/article/3282273/lebanon-turns-chinese-electronics-after-west-lost-credibility-deadly-attacks?utm_source=rss_feed

Lebanon will begin importing more telecoms products from China after a wave of deadly attacks last month that targeted electronic devices, according to a Lebanese business group, which said the West had “lost credibility”.

Ali Al Abdullah, president of the Lebanese Chinese Business Association, said his country, along with “many other countries”, would reduce purchases of tech products from Western countries and “turn east for technology” due to safety concerns, adding that Western companies would “suffer major losses”.

“What happened is a lesson for Lebanon and the world,” he told China Global Television Network, a state-backed news channel, in an interview released on Sunday.

There has been no official confirmation from Chinese authorities that imports of telecom products from China to Lebanon would be increased.

The two days of attacks in Lebanon targeted pagers and then walkie-talkies, which killed dozens of people and wounded thousands, including civilians as well as members of Lebanese armed group Hezbollah.

The attacks were widely believed to be orchestrated by Israel, Lebanon’s southern neighbour, targeting Iran-backed Hezbollah, but Israel has not directly claimed responsibility for the operation.

Media reports, citing US and other officials, said that Israel had hidden explosive material in a batch of pagers made by a Taiwanese manufacturer before the devices were sent to Lebanon.

Since the assaults, military attacks between Israel and Hezbollah have intensified, with Israel launching thousands of air strikes targeting Hezbollah-dominated areas in Lebanon, as well as what Israel has called “limited” ground incursion this month, fuelling fears of an all-out war.

The armed clashes have disrupted Lebanon’s trade, particularly with its largest trading partner, China, according to Al Abdullah.

Bilateral trade between the two countries amounted to US$2.44 billion last year. In the first half of this year, trade volume reached US$1.14 billion.

Lebanon imports electronics, electric appliances, shoes, clothes, and office and home furniture from China, while Lebanon’s exports to China include copper, olive oil, alcohol, mixed nuts, beauty products and jewellery.

“But now it’s decreasing because of the war,” Al Abdullah said, adding that despite most Chinese having been evacuated earlier this month due to safety concerns as the year-old conflict escalates, some companies have stayed.

“This gives us encouragement that they will stick with us,” he said.

More than 200 Chinese citizens along with foreign family members have been evacuated from Lebanon.

The Israel-Gaza war began after Palestinian militants from Hamas launched attacks on Israel on October 7, 2023. Hezbollah, which is based in Lebanon, later launched missile and rocket attacks at northern Israel, in an attempt to force Israel to fight on two fronts. The armed conflicts have fuelled fears of a regional escalation.

Lebanon’s Ministry of Public Health said Israel has killed more than 2,200 people and injured more than 10,000 after a year of fighting against Hezbollah forces.

China has provided humanitarian and emergency medical aid to the country, where more than 1.2 million people have been displaced, most since September 23, according to Lebanese authorities.

China launches large-scale military drills around Taiwan after President Lai’s National Day speech

https://www.theguardian.com/world/2024/oct/14/china-military-taiwan-drills-president-lai-national-day-speech

China’s military and coast guard have surrounded Taiwan’s main island as part of large-scale drills that it said were a warning against “separatist acts”, in the wake of a recent speech by Taiwan’s president.

State media linked Monday’s drills to a National Day speech last Thursday by Taiwan’s president, Lai Ching-te, in which he repeated that the People’s Republic of China “has no right to represent Taiwan”, but he was willing to work with it to maintain peace and stability.

On Monday the People’s Liberation Army (PLA) said all branches of the military were approaching Taiwan by sea and air. The joint drills would focus on sea and air combat-readiness, blockading key Taiwanese ports and areas, and assaults on maritime and ground targets, said the Eastern Theatre Command’s spokesperson, senior captain Li Xi.

“The drill also serves as a stern warning to the separatist acts of ‘Taiwan Independence’ forces,” Li added.

At the same time the Chinese Coast Guard, which is separate to the military but serves under the same commanding body, also announced “law enforcement patrols” around the main Taiwan island. The illustrated patrol paths encircled Taiwan’s main island, and were described as “a practical action to control Taiwan Island in accordance with the law based on the one-China principle”.

The PLA did not say when the drills would end, and did not announce any live-fire or no-fly zones. Provided maps showed nine declared zones for the exercises, including six large areas near Taiwan’s major ports.

As expected, China announces PLA Joint Sword-2024B exercises (1st map). China Coast Guard exercises as well (2nd map). https://t.co/OSaC8uikOghttps://t.co/eZa2wheu77 pic.twitter.com/H8LKSzX6JJ

— Brian Hart (@BrianTHart) October 14, 2024

Taiwan’s Mainland Affairs Council called Monday’s drills “blatant provocations” that seriously undermined regional peace and stability. The Ministry of Foreign Affairs called on Beijing to “pull back from the brink of a precipice”, while the president’s office urged Beijing to accept the “good will” offered in Lai’s speech. It said Lai had convened a national security meeting to respond.

In Washington, officials from the Biden administration said they were monitoring the drills and there was no justification for them after Lai’s “routine” speech.

“We call on the PRC to act with restraint and to avoid any further actions that may undermine peace and stability across the Taiwan Strait and in the broader region, which is essential to regional peace and prosperity and a matter of international concern,” state department spokesperson Matthew Miller said, using the initials for China’s official name.

China’s leader, Xi Jinping, claims Taiwan is a Chinese province and has urged it to accept what he calls “peaceful reunification”. But an overwhelming majority of Taiwan’s people and parliament reject the prospect of Communist party rule. In response, Beijing has escalated military exercises and incursions into Taiwan’s air defence zone, as well as cognitive, technological and economic warfare, and mass disinformation campaigns. US intelligence reportedly claims Xi has instructed the military to be capable of a full-scale invasion of Taiwan by 2027.

Lai’s National Day speech was seen by analysts as restrained, and more measured than his May inauguration speech. Writing for the Council on Foreign Relations, David Sacks said on Friday that if China were to react aggressively to it, then “Lai may very well conclude (not without reason) that there is little to be gained through restraint and may embrace more explicit rhetoric on cross-strait relations”.

Monday’s exercises, codenamed “Joint Sword 2024B”, had been largely expected by observers. Exercises named “Joint Sword 2024A” were launched after Lai’s inauguration, the “A” suffix suggesting there were more to come this year.

The PLA regularly runs military drills and at least one or two a year have focused on an invasion or blockade of Taiwan. Such military drills take substantial preparation but are usually linked to a speech or action in Taiwan which Beijing says it finds provocative.

Military analysts have warned each new set of drills has demonstrated strategic improvements or escalation in the PLA’s approach to Taiwan, even if there appears to be less firepower.

Last month China test-launched and intercontinental ballistic missile for the first time since the 1980s. The missile landed in the south Pacific, near French Polynesia, prompting statements of concern from Pacific nations. Last week China also participated in joint drills with Russia. On Monday Russian state media said the two militaries were continuing with anti-submarine firing exercises in the north-west Pacific.

EU braces for Chinese trade blows in aftermath of EV tariff vote

https://www.scmp.com/news/china/diplomacy/article/3282235/eu-braces-chinese-trade-blows-aftermath-ev-tariff-vote?utm_source=rss_feed

European Union officials are bracing for an onslaught of retaliatory trade actions after a team of Chinese officials tasked with resolving an EV tariff row were hauled back to Beijing over the weekend.

The bloc’s punitive import tariffs of up to 35.3 per cent on Chinese electric vehicles are set to kick in by the end of the month, capping a year-long anti-subsidy investigation that China fought ferociously.

Talks aimed at reaching a deal have continued in the background, but negotiators remain miles apart, according to people familiar with the discussions.

On Saturday, China’s Ministry of Commerce said its officials had returned to Beijing, having failed to reach a deal. “So far, the consultations have not reached a solution acceptable to both sides,” the ministry said.

People involved in the talks said that, at times, it was as if the two sides were discussing separate issues, one source said. China wanted to negotiate an umbrella deal that would set a price for all exporters whereas the European Commission is adamant that individual companies must reach agreements on their own.

The ministry warned on Saturday that this would not work. “If the EU conducts price commitment negotiations with some companies separately while negotiating with China, it will shake the basis and mutual trust of the negotiations,” it said.

On this basic point, differences appear irreconcilable. The two sides cannot agree on how the basic tenets of a price undertaking should work, let alone who would pay what, leaving little hope of a resolution before EV duties are due to take effect by Halloween.

Now, the relief felt in Brussels after member states endorsed the tariffs on October 4 is morphing into anxiety for some, with the Chinese government threatening a barrage of punishment.

Throughout the talks, China has linked a settlement with future investment in Europe’s floundering EV sector, saying lower duties would free up liquidity for Chinese companies to build factories there.

But this carrot is usually swiftly followed by the stick: if there is no deal, Brussels has been told to expect dozens of retaliatory actions in sensitive economic sectors from November, and say goodbye to the investment.

Brandy tariffs introduced by Beijing last week caught the European Commission off guard – they had been expected next month, but they were nevertheless well telegraphed and seen as the tip of the iceberg.

Among the expected punishments is a tariff increase on large-engine cars that would affect Germany and Slovakia, both of which voted against the EV tariffs. The Chinese government has repeatedly referred to the cars both publicly and behind closed doors, where it is clear that the actions are all retaliation for the EV duties.

Car industry sources see the long-mooted increase in duties as a fait accompli: one European industry executive said the Chinese Ministry of Commerce had been laying the groundwork for months and had encouraged local operators to complain about specific issues.

As talks on EVs go down to the wire, senior EU figures are expecting China to instrumentalise investment pledges to heap further pressure on Brussels. This could be used alongside new trade barriers and investigations designed to provoke maximum outrage.

“China opposes the EU’s imposition of anti-subsidy duties on Chinese EVs as this won’t solve any problem and will only shake the determination of Chinese companies to invest in Europe,” Wang Lutong, the top foreign ministry official for Europe, wrote on X last week.

Influential EU members, including France and Spain, had supported the duties in the hope that they would force Chinese exporters to build factories on their turf. Paris has been keen to tap the advanced EV technology of Chinese firms, despite reports that they are under instruction from the Commerce Ministry not to transfer it to foreign partners.

The Chinese pressure is also seen as a way to deter the EU from launching more high-profile trade actions against China, with Beijing hoping the hullabaloo around EVs will sap capitals’ appetite for more clashes.

This approach appears unlikely to succeed. In Brussels, the EV decision appears to have shifted the bloc’s position on China, with Berlin failing to hold sway and no longer calling the shots.

Until June, China concentrated its lobbying efforts on Germany, convinced that Berlin would be able to kill the investigation. It shifted its full court press towards Brussels only when it was clear over the summer that Chancellor Olaf Scholz was increasingly isolated on the issue. But, by that point, the investigation was complete and difficult to undo.

Hawkish commission chief Ursula von der Leyen has autonomy on trade and competition matters for the 27-member union and appears intent on using it to mitigate the perceived impact of persistent overcapacity and long-term deflation in the Chinese economy.

With weak governments in Germany and France, her hand has been strengthened – and the number of cases against China will continue to swell.

A planned anti-dumping inquiry into some Chinese timber imports – expected at any time – will be the 19th investigation launched against China this year using trade and competition tools alone.

Wind turbines, lithium batteries and heat pumps are also on the commission’s radar as imports creep up and European companies complain about being undercut. Online marketplaces Shein, Temu and AliExpress, meanwhile, face scrutiny under its digital services act over a litany of allegations.

AliExpress is owned by Alibaba, which also owns the South China Morning Post.

“Let’s be clear: China has created excess capacity in many essential sectors compared to global market demand,” the bloc’s outgoing competition chief, Margrethe Vestager, said in an interview with French journal Le Grand Continent last week.

“The idea that we would just wait for our sectors to die – as happened with solar panels – has no place in the debate. It cannot be done.”

But not everyone is happy. Brandy producers are seething at being dragged into a fight not of their making. Cognac brands including Hennessy and Remy Martin face tariffs of between 34 and 39 per cent to get their goods into China, a booming market for spirits.

One industry figure fumed that it was no consolation that other sectors would also face sanction, saying that the first person killed in a war would take no solace from knowing others would follow.

As it scrambled to respond to Beijing’s duties, the commission pledged immediately to defend the sector at the World Trade Organization, but this process will take years to complete and is seen as too little, too late.

On Tuesday, the commission pledged financial support for brandy producers – probably under its common agricultural policy, a giant subsidies programme – in a move encouraged by the French government.

As soon as the word was out, officials’ phones started buzzing with calls from pork and dairy farmers who, too, had been threatened with tariffs and were demanding compensation. With the EU and China edging perilously close to a full-blown trade war, commission coffers could be in line for a costly hit.

ENDS

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China’s economic woes, Indonesia’s Prabowo takes the stage: 5 weekend reads you missed

https://www.scmp.com/news/world/article/3282230/chinas-economic-woes-indonesias-prabowo-takes-stage-5-weekend-reads-you-missed?utm_source=rss_feed

We have put together stories from our coverage last weekend to help you stay informed about news across Asia and beyond. If you would like to see more of our reporting, please consider .

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China holds large naval and air force exercises around Taiwan as a warning against independence

https://apnews.com/article/taiwan-china-military-drills-053fbadaf1125be4adfee7a7e6d1ce79Taiwanese President Lai Ching-te delivers a speech during National Day celebrations in front of the Presidential Building in Taipei, Taiwan, Thursday, Oct. 10, 2024. (AP Photo/Chiang Ying-ying)

2024-10-14T01:12:33Z

TAIPEI, Taiwan (AP) — China held large-scale military exercises surrounding Taiwan and its outlying islands Monday in what it called a warning against Taiwan independence.

China’s Defense Ministry said the drills were a response to Taiwanese President Lai Ching-te’s refusal to concede to Beijing’s demands that Taiwan acknowledge itself as a part of the People’s Republic of China under the rule of the Communist Party.

Taiwan’s Defense Ministry called the drills a provocation and said its forces were prepared to respond.

The PLA’s Eastern Theater Command spokesperson Navy Senior Captain Li Xi said the navy, army air force, missile corps were all mobilized for the drills. “This is a major warning to those who back Taiwan independence and a signifier of our determination to safeguard our national sovereignty,” Li said in a statement on the service’s public media channel.

Taiwan was a Japanese colony before being unified with China at the end of World War II. It split away in 1949 when Chiang Kai-shek’s Nationalists fled to the island as Mao Zedong’s Communists swept to power on the mainland.

Lai took office in May, continuing the eight-year rule of the Democratic Progressive Party that rejects China’s demand that it recognize Taiwan is a part of China. China routinely states that Taiwan independence is a “dead end” and that annexation by Beijing is a historical inevitability.

‘Empty nest youth’: China phrases that reflect country’s rapid progress, social challenges

https://www.scmp.com/news/people-culture/article/3281891/empty-nest-youth-china-phrases-reflect-countrys-rapid-progress-social-challenges?utm_source=rss_feed

In part one of a two-part series, the Post takes a look at some of the descriptions and phrases which have arisen in modern-day China.

These highlight the dramatic changes that mainland society has undergone in recent times and reflect the very real struggles that people face as they strive for a better life, often in very challenging circumstances.

Empty nest youth, or kong chao qing nian, refers to young people in China who are single and live alone.

The term originated from a promotional slogan by a film company, likening these young people to lonely birds in an empty nest.

More and more young people are moving to big cities for career opportunities and want privacy and independence.

According to the 2020 census, more than 125 million people in China live alone, more than 63 per cent of whom are aged between 20 and 59.

They often lack emotional support to cope with work and life pressures.

A woman surnamed Guo in her 20s described her life to the Post.

“I have a decent job in a first-tier city and rent a one-bedroom apartment for 4,000 yuan (US$560) a month. My only conversation partner is my cat, and I mostly eat convenience store food or takeouts.

“Loneliness is the price I have to pay for choosing a better life in Shanghai,” she said.

The 996 work culture, or 996 gong zuo wen hua, describes a gruelling overtime system employed by some companies in China, where the work day lasts from 9am to 9pm daily, six days a week.

In March 2019, an anonymous internet user initiated an online protest on GitHub, a global developer platform owned by Microsoft, exposing their company’s 996 work mode and criticising it for severely threatening the health of tech workers.

Due to peer pressure and “unwritten company rules”, employees are often forced to work overtime.

In August 2021, China’s top court ruled that the 996 policy was illegal.

However, excessive overtime remains a heated topic of complaint on mainland social media .

Left-behind children, or liu shou er tong, refers to youngsters who remain in rural areas while their parents leave to work in big cities.

In search of better jobs, many rural residents have migrated to urban areas.

However, China’s household registration system restricts their children’s access to public schools in cities, compelling parents to leave them behind.

In many cases, left-behind children are cared for by grandparents or family friends.

Last year, there were 15.5 million left-behind children in rural areas according to the Chinese Ministry of Education.

These children often live in poor conditions. Due to financial difficulties, they reside in basic housing and have limited access to quality education.

The absence of parents over time often leaves them feeling lonely, which can lead to introversion and low self-esteem.

Beijing drifters, known as bei piao in Mandarin, describes young people living and working in Beijing without a local household registration, including many foreigners.

In their quest for better lives and careers, these people migrate to the capital from lower-tier cities.

However, high rental costs mean they often lack a stable home, leading to frequent relocations and a diminished sense of security and belonging in Beijing.

In the early 2000s, Beijing’s Haidian district was home to around 100,000 non-local college students working part-time, marking the rise of the term bei piao.

There are 8.24 million bei piaos in Beijing, who often face significant challenges, including soaring living costs, household registration restrictions and unemployment.

One of the most notable bei piao in the entertainment industry is famous director Zhang Yimou, who was born in Shaanxi province, northern China, is renowned for films such as Red Sorghum and Raise the Red Lantern.

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The Philippines and South Korea are steeling security ties. How will China respond?

https://www.scmp.com/news/china/military/article/3282160/philippines-and-south-korea-are-steeling-security-ties-how-will-china-respond?utm_source=rss_feed

The Philippines can expect some kind of hybrid response from China as Manila works with other US allies to challenge Beijing’s dominance in the South China Sea, an observer said after Manila elevated defence ties with Seoul last week.

In talks in the Philippine capital on Monday, South Korean President Yoon Suk-yeol and Philippine President Ferdinand Marcos Jnr agreed to establish a “strategic partnership” between the two countries, the first since diplomatic ties began 75 years ago.

In a declaration after the talks, Seoul and Manila agreed to increase cooperation on defence and reaffirmed the “importance of respect for the rule of law, maritime security and safety, and the peaceful resolution of disputes” in the South China Sea.

“Both countries share concerns about actions in the South China Sea that are inconsistent with the rules-based international order, which undermines peace and prosperity,” the declaration said without referring directly to China.

“The two countries oppose militarisation of reclaimed features, the dangerous use of coastguard and maritime militia vessels, and coercive activities.”

The two countries’ coastguards also signed a nonbinding agreement on maritime security cooperation, including combating transnational crime, information sharing and joint search-and-rescue operations.

Kang Jun-young, a professor of Chinese studies at Hankuk University of Foreign Studies in Seoul, said the strategic partnership between South Korea and the Philippines was significant because it was at the highest level of cooperation.

“By forming a strategic partnership, issues other than bilateral relations can always be discussed on the formal agenda, and long-term cooperation is possible,” Kang said.

“Security cooperation between South Korea, the US, Japan, and the Philippines may also be strengthened, particularly as the United States pursues a grid-type alliance and strengthens relations with the Philippines over the South China Sea issue.”

Stephen Nagy, a visiting fellow at the Japan Institute for International Affairs, said the Philippines was trying to “send a signal to China that Manila has strong allies”, but, even so, Beijing was likely to push back.

Nagy said that while China was expected to “temporarily” reduce its pressure in the face of such cooperation, “as soon as those partners leave the vicinity of the Philippines, the Chinese tend to test and escalate their actions using hybrid tactics”.

“I believe that we will continue to see this pattern emerge until either the Philippines, partners and allies permanently create cooperative networks within the region to push back against Chinese assertive behaviour, or the Chinese are successful in securing their territorial interests.”

Collin Koh, a senior fellow at the S. Rajaratnam School of International Studies in Singapore, said the agreement with the Philippines marked a turning point for South Korea on the South China Sea.

“For decades Seoul has largely been held back by primary security concerns in the Korean peninsula. Given the strategic priorities now, Korea is … stepping up its presence in this dimension,” Koh said.

Koh said Manila also wanted to sign a reciprocal access agreement with Seoul, just as it did with Tokyo in July.

Such an agreement would make it easier for military equipment and troops to enter the other country for combat training and disaster response.

He said a deal in this case would depend on South Korea’s evolving strategic priorities and whether Yoon’s policy would continue in the next administration.

The Philippines has been at the forefront of clashes with China in the disputed waters in recent months. Most recently, three China Coast Guard ships and one Chinese military vessel reportedly fired water cannons at two Philippine boats on a resupply mission for other Philippine fishing boats in the waters off Scarborough Shoal on Tuesday.

To strengthen its position, the Philippines has been expanding military cooperation with the US and its allies.

Just as Marcos and Yoon were agreeing to the strategic partnership on Monday, the Philippines and the US started two weeks of naval exercises with four other allies – Australia, Japan, Canada and France.

The Sama Sama 2024 exercises involve more than 1,000 naval personnel and will cover anti-submarine, air and surface warfare as well as maritime domain awareness.

Last month, the People’s Liberation Army Southern Theatre Command conducted naval and air drills near Scarborough Shoal.

Koh said that while the Sama Sama exercise was not something new, the backing of “foreign friends” to expand the ⁠Philippines’ maritime security programmes would in the long run strengthen Manila’s ability to assert national interests in the South China Sea.

“Growing maritime security capacity, especially in the form of maritime domain awareness and physical assets to project and sustain presence in key areas of concern … would challenge China’s primacy – though it might not compel Beijing to roll back,” Koh said.

Gregory Poling, a senior fellow and director of the Southeast Asia Programme and Asia Maritime Transparency Initiative at Washington-based think tank Centre for Strategic and International Studies, said Seoul and Manila’s “frustration” at Beijing’s behaviour had prompted them to deepen their alliances.

“South Korea has been the number one defence partner of the Philippines in terms of commercial sales. In particular, the most advanced platforms of both the Philippine Navy and Air Force are Korea-made,” Poling said.

“If this new partnership leads to more information sharing, joint exercises, and training, that would be a natural evolution. China will of course complain about it.”

‘Infrastructure monster’: how China built the world’s longest high-speed railway

https://www.scmp.com/news/china/science/article/3282099/infrastructure-monster-how-china-built-worlds-longest-high-speed-railway?utm_source=rss_feed

China has the world’s largest high-speed railway. Known as an “infrastructure monster”, it only took about 20 years for the country to develop the 45,000km (28,000-mile) network. The country also exports railway technology as a key part of the Belt and Road Initiative, the central government’s plan to link economies into a China-centred trading network.

The scope of the infrastructure project was hailed as an example of the sort of development that was only possible thanks to China’s central planning and top-down leadership.

However, the rapid development of the high-speed transport system has also raised some environmental concerns.

[Sport] The dangers of China’s cyber-nationalism

https://www.bbc.com/news/articles/cly6xpz9p1no

BBC

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[Sport] Harris or Trump? What Chinese people want from US election

https://www.bbc.com/news/articles/cn4zpy3zj7ro

BBC

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BBC World Service retreat ‘helping Russia and China push propaganda’

https://www.theguardian.com/media/2024/oct/13/bbc-world-services-retreat-helping-russia-and-china-push-propaganda

The BBC director-general will warn that the retreat of its World Service because of funding cuts has helped Russia and China broadcast “unchallenged propaganda”.

In a speech at the Future Resilience Forum, a non-partisan meeting in London attended by international political figures, Tim Davie will discuss the global importance of the BBC World Service, which operates across more than 40 languages.

While addressing the war in Ukraine and unrest in the Middle East, Davie is expected to say: “Free and fair reporting has never been more essential – for global democracy and for audiences of most need around the world.”

He will add: “Perhaps most worrying from the BBC point of view is that we can now see clear evidence of the fact that, when the World Service retreats, state-funded media operators move in to take advantage.

“What we are facing is an all-out assault on truth worldwide – and with it security, stability and democracy. And no one should underestimate the impact the BBC has had in the global news landscape to this point – as an entirely independent force …”

During his Monday afternoon speech, Davie will also discuss the impact and growth of news outlets controlled by Russia and China, and how they are outspending BBC investment “by a multiple of thousands”.

“Together they are spending an estimated £6-8bn on expanding their global media activities – investing hard to grow their audiences in key markets in Africa, the Middle East and Latin America,” he will say.

“Across Africa in particular, Russian media is incredibly active in promoting its narratives, with social media influencers amplifying propaganda and so-called ‘activists’ live-streaming pro-Russia rallies.

“And this investment is seeing significant returns, not only in terms of the reach of Russian state broadcaster RT and China’s CGTN, but also in terms of trust.”

In his speech, Davie will discuss how other companies have filled the “gaps” the BBC left in Africa after its “retreat”.

“Kenya’s state broadcaster KBC has taken up Chinese output on TV and radio, as has Liberia’s state broadcaster LBS,” he will say. “Meanwhile, in Lebanon, Russian-backed media is now transmitting on the radio frequency previously occupied by BBC Arabic.

“Last month, our outstanding BBC Monitoring teams listened in to that Russian output on the day thousands of pagers and radio devices exploded. What they heard was unchallenged propaganda and narratives being delivered to local communities.

“Had the BBC been able to retain our impartial radio output, these messages would have been much harder for local audiences to find. In this context, the further retreat of the BBC World Service should be a cause for serious global concern.”

In 2022, the BBC announced the proposed closure of about 382 posts at the World Service as well as the closure of its Arabic and Persian radio services.

In April an inquiry was launched into the future funding of the service, focusing on the corporation’s influence as a soft power and establishing whether increased government support was needed.

The World Service is the BBC’s international broadcaster and is predominantly funded by the UK licence fee. It receives additional grant funding of £104.4m from the Foreign, Commonwealth and Development Office.

Under its current support package, the World Service has agreed not to close any language services, but this condition is set to be lifted in 2025.

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How South China Sea disputes are uniting Asean states

https://www.scmp.com/opinion/asia-opinion/article/3281677/how-south-china-sea-disputes-are-uniting-asean-states?utm_source=rss_feed

“We strongly condemned the violent and illegal actions of Chinese maritime authorities against Vietnamese fishermen near the Paracel Islands on September 29,” the Philippine National Security Council said in a statement on October 4 following yet another incident in the South China Sea.

As many as 40 Chinese law enforcers reportedly used force against Vietnamese fishermen near the disputed Paracel Islands – which China calls the Xisha Islands and Vietnam the Hoang Sa Islands – in the northern part of the South China Sea.

The Philippines has overlapping claims with both China and Vietnam in the Spratly Islands in the southern part of the South China Sea, but it has no maritime or territorial claims in the Paracels. The latest statement of solidarity was particularly poignant since it signalled an attempt by Manila to build a united front in the disputed waters with fellow Asean members.

The Philippines and Vietnam are exploring closer strategic cooperation among maritime forces and negotiating potential agreements to resolve their overlapping claims. Meanwhile, Malaysia – which will take over the rotating chair of the Association of Southeast Asian Nations next year – is adopting a tougher stance in the disputed waters, rejecting Beijing’s call for it to end unilateral oil exploration activities in disputed waters.

For its part, Indonesia has pushed for more intraregional solidarity to assert Asean centrality. Though not a direct claimant state in the South China Sea, Indonesia has also adopted a more critical stance towards Beijing amid its overlapping claims in the North Natuna Sea. In spite of Asean’s limitations, key Southeast Asian states are not only holding their ground in disputed waters but also exploring more strategic cooperation with each other.

It’s hard to overstate China’s influence across Southeast Asia. As a whole, Asean has risen to become China’s largest export market. Thanks to its remarkable innovations in electric vehicle production and other vital industries, China has also become a top source of high-quality manufacturing investment in places such as Thailand and Vietnam.

China’s economic centrality is even more pronounced in less-developed parts of Asean, most especially Cambodia and Laos. These countries are heavily reliant on aid and investment from Beijing.

Contrast this with US policy in the region over the past decade. From the Trans-Pacific Partnership to the Indo-Pacific Economic Framework, both the Barack Obama and Joe Biden administrations have been hamstrung by protectionist sentiments at home. In addition, the United States has alienated the public in some Asean states with what they see as selective application of international law, such as in its support for Israel’s military operations in Gaza and Lebanon.

China has portrayed itself as the leader of the Global South and champion of the Palestinian people with its criticism of the US, the West and Israel. It is little surprise, then, that sentiment among respondents swung towards China in the latest ISEAS-Yusof Ishak Institute survey of Southeast Asian thought leaders and business executives.

Even so, there are good reasons China can’t be complacent about its influence in Asean, especially when it comes to the high-stakes South China Sea disputes. To begin with, Asean claimant states have to grapple with domestic political pressure amid widespread nationalist sentiments.

Despite the differences between their political systems, the ruling regimes in Manila and Hanoi have been deeply in tune with public sentiment, which tends to be highly critical of China’s actions in the disputed waters.

In the Philippines, a survey from March found that 91 per cent of respondents had unfavourable views of China while another in June found 93 per cent wanted the Philippines to “regain control of the islands occupied by China in the West Philippine Sea”. Vietnam has been the site of major anti-China protests, most dramatically after China moved an oil rig into contested waters in 2014.

While Malaysia has historically opted for quiet but firm diplomacy on the issue, it must also contend with hardening public opinion. Last year, Malaysian Prime Minister Anwar Ibrahim faced a firestorm of criticism after hinting at being open to joint exploration deals with China in energy-rich areas of the South China Sea.

In rejecting Beijing’s demands to stop oil and gas exploration, Malaysia’s Foreign Ministry said “China is a great friend, but of course we have to operate in our waters and secure economic advantage, including drilling for oil in our territory”.

Core Asean states are developing a great sense of themselves as rising middle powers and becoming deeply concerned about the erosion of Asean centrality. Indonesia, the de facto leader of Asean, has stepped up its efforts and is directly resisting China’s expansive claims, most notably in its exclusive economic zone in the North Natuna Sea. Indonesia also hosted the first all-Asean naval drills with an eye towards more regular joint exercises with regional states.

Frustrated by Asean’s slow, consensus-based approach, Southeast Asian claimant states such as the Philippines and Vietnam are also pursuing closer minilateral cooperation. The two recently conducted their first joint coastguard drills, paving the way for closer naval cooperation in the future.

They have also diplomatically supported each other, with Vietnam backing the Philippines’ arbitration case against China and Manila expressing solidarity with Hanoi during clashes in the Paracels.

Crucially, Vietnam has also expressed its openness to resolving overlapping maritime claims with the Philippines, potentially providing a template for similar agreements for all Asean claimant states. Asean nations might adopt different diplomatic tones towards China, but they all have a shared interest in protecting their core interests through cooperation.

Economist Joseph Stiglitz on the US-China trade war and the death of ‘hyper-globalisation’

https://www.scmp.com/economy/global-economy/article/3282186/economist-joseph-stiglitz-china-us-trade-war-and-death-hyper-globalisation?utm_source=rss_feed

American economist Joseph Stiglitz, who won the Nobel Prize for economics in 2001, served as chairman of the Clinton administration’s Council of Economic Advisers. He is a professor at Columbia University and a former chief economist at the World Bank.

Stiglitz spoke to the Post about the US-China trade war, the economic ramifications of next month’s presidential election in the United States and the future of globalisation. This interview first appeared in . For other interviews in the Open Questions series, click .

I thought that the Fed increased interest rates too far and too fast, because it made a fundamental error of judgment that the inflation we were experiencing was due to excess demand but, in fact, it was a result of the shock of the Covid-19 pandemic and the war in Ukraine. I thought that the higher interest rates might actually worsen the problems, not improve them.

So, for instance, if we have supply side interruptions, you want to make investments to alleviate them, and the higher interest rates make those investments more difficult. A significant contributor to inflation has been the price of housing, and raising interest rates exacerbates the shortage of housing. So it was exactly the wrong medicine. It was a medicine that hurt the economy. So I am very pleased that they’re lowering interest rates, and I think it will be good for the economy.

I think the US economy has been very robust. The data says it’s slowing, so the rate cut was a little late. I think they have made a double mistake in that sense, because I didn’t think they should have increased it as much or as fast. I think their rates should have been lower, and we will pay a price for their mistake. I don’t think it’s going to be too high of a price, it’s just that I think they should have cut it earlier.

I think it’s unambiguous that Harris will be much, much better for the economy than Trump. I think Trump’s policy will result in higher inflation and a weaker GDP and more inequality and poorer health. Just to go over them very quickly, the higher inflation is going to be a result of his extremely high increases in the tariffs on China, which particularly hurt ordinary Americans with increased prices of apparel and appliances and so forth.

Harris may increase the tariffs, but it will be much more moderate. [Trump’s] threat to reduce or eliminate the independence of the Fed will create more uncertainty, which will weaken the economy. The higher inflation will result in the Fed raising interest rates wrongly, but they will do it anyway … and that will weaken the economy. The tax cuts for the rich, if he gets them, won’t stimulate the economy much, but will create more inequality. And of course, if he has his way, he’ll eliminate Obamacare which will worsen the health status of ordinary Americans. So in every dimension, he’s a danger to our economy.

I think, quite frankly, both [candidates] are pushing for weaker economic ties, but I think the difference is that Harris will be de-risking, making the US less dependent on China, and in particular making the West, more generally, less dependent on China in certain areas of technology.

Whereas Trump has a mistaken zero-sum view of the world, and he has no sense of the capacity of economies to adjust. So raising tariffs very rapidly will be a major distortion to the economy, a major disturbance to the economy, both in China and the US, but more in the US, which we will have a hard time adjusting. Tariffs of 10 per cent is one thing, 50 or 60 per cent is another.

The Harris administration will believe in multilateralism, and will be engaged very strongly with promoting good relations with most economies around the world. Not with Russia, obviously, and we’ve already talked about China, but with most other countries a Harris administration will be working very hard to improve relations. There’s often a tension in a country like the US, where money has such an influence in our political system, so that special interests prevail over the national interest. So, for instance, the US has not, I think, pushed for global policies with respect to intellectual property or multinational taxation that would be supported by most countries in the world. So that is going to be a problem. It has been a problem in the Biden administration.

Well, I think the distinction, as I said before, is that the US wants de-risking and the current administration does not see the world in the same zero-sum way. But it has been, you might say, equally strong, aggressive, in certain areas where they have contended that China has unfairly subsidised, areas which are of particular importance, like electric vehicles (EVs) and solar panels.

There is a big debate in the US. There are two arguments going on. One is the allegation that China’s advantage in EVs and solar panels is because of government subsidies. Many people believe that is not true. The advantage China has in EVs is a result of a process that began 25 years ago of moving in that direction, the larger EV market in China, and the commitment of so much more resources. So it is not that it has been subsidised, but that there has just been more momentum in China.

The second is that even if China subsidised solar panels, the need for a green transition is more important than the need to create solar panel jobs, and that we should accept a gift from China of cheap solar panels, because it is very important for the rapid green transition. So my own view is very much that we need to have the capacity to produce both EVs and solar panels, but that the imperative of making a green transition rapidly means that we should not exclude cheap EVs and solar panels from our market, and we should find other ways of developing our capacity.

What I think is, we really are behind in addressing climate change, and so it is really important to use every cheap thing we can, including cheap EVs and cheap solar panels, to make the green transition. But we have to also have our capacity. That is the point of de-risking. We have to have our production capacity.

So my view would be, we accept the cheap goods from China and subsidise, if necessary, the production of solar panels and EVs to develop the capacity ourselves. Maybe China will continue being the cheapest producer. We will just have to develop our own capacities, in case something happens.

When it started, I thought of it as mostly a Trump phenomenon, but to be frank, I did hear rumblings from the national security people and bipartisan concerns about excessive exposure to China and that we needed to de-risk. So I think I did [expect it to last]. And one more thing. Trump politicised relations with China in a way that would make it difficult for a Democratic administration to alter the course too much.

What I mean is, you never know the direction of politics, but Trump has, I think, falsely sold the notion that America’s political economic problems were due to China. There was evidence that the rapid increase of imports from China after the accession of China to the [World Trade Organization] did have a very negative effect on the American economy. There is evidence that those places in the country where there was a surge of imports have lower wages, more unemployment and lower property values. So that view is pretty well established now.

The question is, do you blame China, or do you blame the US government for not having provided education and help for adjustment to that? We said globalisation was good, but rapid globalisation was a shock. And we didn’t help the people who were hurt by the shock to adjust. It is always much easier to blame others than to accept your responsibility for not having done what you could have done to help adjust to the changing global economic situation.

I have three strategic concerns. If we were engaged in a new cold war, including a strategic trade war, I am disappointed that we have not managed our global policies better.

The first is we imposed restrictions on sales to China, for instance, of the very nano chips, the most advanced semiconductors. That only motivated China to work faster to develop its own capacity. So I think we were a little bit myopic in not understanding that that was actually helping China. We had a short-term advantage. But by imposing those sanctions, we are actually encouraging China to develop its own capacity faster.

The second thing is, we passed a very important bill, the Chips and Science Act in 2022.

But at least from my discussions with several people in the industry, and at least in Europe, their view is that as big as that bill was, it was not going to really be able to develop America’s capacity to make chips on its own, at least to the extent necessary for adequate de-risking. So it is naive thinking that we could, in this way, very rapidly increase our own competence in this area.

And the third is if you were waging a new cold war, I would have put more emphasis on winning the hearts and minds of those in the rest of the world, in the emerging markets and developing countries. And I think what we have done there has been a disaster. Just to name a few issues: vaccine apartheid, the position that we have taken in multinational taxation and many arenas where we’ve not been as helpful in the debt crisis. So I think overall, we have failed to win the hearts and minds of the people in the Third World. And you see that in some of the votes at the United Nations.

I think I would say it has benefited, but I think we paid a cost, a price, for it. But I think we made a mistake, beginning in 1980 with then-president Ronald Reagan, in weakening our industrial capacity too far, and [the tariffs] are beginning to restore our industrial capacity.

I think yes, there will be an end to it. I think we’re not going to go to autarky. I think [economic protectionism] has remained very selective so far. I think we may wind up moving towards more regional trade groups, and also political trade groups.

I could easily see a weakening of trade between China and the West, but a strengthening of trade between the West and other countries in the emerging markets.

That is what you would expect, because part of the basis of trade is differences in costs, like the cost of labour. And still with the US, we will want to import goods produced where labour is less expensive.

But one of the things that the data has showed so far is that it seems as if China is exporting a lot of goods to countries in Southeast Asia, and those countries are exporting them to the US. So there is indeed a change in the overall patterns of trade, but I am not sure that there is a significant reduction in overall trade, so that we’re not moving into autarky, with every country on its own.

I think this is true. I have not looked at the data that closely, but for example, there has been an increase in trade between the US and Mexico. And I think if China manages its politics correctly, there could be an increase in trade within Asia.

One of the problems is that, for a reason that I don’t fully understand, China has been very aggressive in the South China Sea, and that of course is alienating, is a source of concern, for all the countries in the region, and that may be counterproductive for China’s economic relations with those countries. So for very little benefit in security, China seems to be risking its very deep economic integration with the countries in the region. I don’t understand why they are doing it.

I have not studied that closely enough to really make a judgment now, but one of the important things I would emphasise here is that the pandemic showed that our supply chains were not very resilient, and so there is going to be a lot of re-examination of our supply chains in order to make sure that they’re more resilient. And that means, to some extent, having our supply chains closer to home, but also a move away from just-in-time for inventory [management] and other practices that made our supply chains insufficiently resilient.

Some people describe the era before 2008 as the era of “hyper-globalisation”. I think that era is over. And actually, in some of the financial flows, you see a decrease, even beginning with the global financial crisis of 2008. I think Trump and the new cold war have accelerated that. But as I said before, it’s not the end of the era of globalisation. It’s the end of “hyper-globalisation”, and it is a restructuring of the patterns of globalisation.

I think there will be lots of cooperation, as I mentioned before, in regional groups and politically aligned groups. I think tensions will remain, but I hope that there will be a lot of cooperation in many areas as well. We need to cooperate on the area of climate change. And so the need for cooperation on climate change may itself motivate more cooperation in trade.

One thing I could imagine is countries signing on to narrower trade agreements, like green trade agreements. So the next rounds of trade discussion probably may not be of the comprehensive kind, and it has been 30 years since we’ve had a successful comprehensive trade negotiation. It will be more towards a particular sector, and green is the sector that I am the most optimistic about.

I think the political reality is that the old regime didn’t work out well for a lot of people. It worked out very well for some people, but for many people it did not work out well. And we have to accept where we are and figure out how to work best within the current reality.

What keeps me up at night, really, is the war in Ukraine, Russia’s aggression, its attempt to annex an independent country, and what would happen if it were successful to the international rule of law and democracy.

If Russia were to prevail – and I worry that if Trump were to win, he might force a settlement that would be a victory, even if only a partial one, for [Russian President Vladimir] Putin – that would undermine the international rule of law, democracy, and would only lead to more problems down the line. So that is one issue that keeps me up, and I think it has a very big implication for the whole era of globalisation.

I think if that dispute saw Putin defeated and that China was no longer seen as supporting Putin, that would be a big help for the global economy.