Mistral点评

• Chinese believed to have targeted Trump’s and Vance’s phones in US telecommunications breach
• [Sport] Trump and Vance possible targets of China-backed cyber attack
• How China and the United States have parted ways in AI power race
• Chinese hackers targeted phones used by Trump and Vance, US report says
• China counts on sales season to coax cautious consumers into spending spree
• China approves 128 titles in October, including hit Korean game Goddess of Victory: Nikke
• China Geological Survey’s former head Zhong Ziran charged with state secrets leak, bribery
• Chinese EV maker GAC to invest in Europe even after report that Beijing is against plan
• China slaps performance ban on famous transgender TV host Jin Xing who seeks explanation
• ‘Good restart’: India-China thaw driven by economic, security interests, experts say
• Chinese and Russian coastguard chiefs call for more cooperation on ‘far seas’
• Reunited after 30 years, China twins face bitter rift as 1 disappears with start-up cash
• China, Brics bloc not ready to reject US dollar despite Russian entreaties
• Chinese space tourism set for 2027 take-off with aerospace firm offering US$210,000 seats
• South China Sea: Vietnam’s growing Spratly outposts spark flashpoint concern in China
• Star Chinese fund manager bets on Alibaba, liquor stocks for shareholder returns
• China’s top legislature to meet November 4-8, as market awaits stimulus plans
• China sees ‘sudden’ rise in sea water, jobs for Hong Kong top talents: SCMP’s 7 highlights
• China satellites ‘at risk’ as debris count from Intelsat explosion rises
• Mainland China’s latest Taiwan military drills condemned by European Parliament
• China dad criticised for not holding school bullies accountable after daughter bled from mouth
• China-Pakistan economic ties could change ‘fundamentally’ if attacks on Chinese continue
• China trans woman beats up man for mocking her then posts video denouncing violence
• China’s Hesai to keep challenging Pentagon’s blacklist decision
• Excavation begins below East China Sea for undersea high-speed railway tunnel
• Trump says China’s leader will bully Harris ‘like a baby’ as allies try to infantilize her
• Apple iPhone 16 sales in China put it back at No 2 in local smartphone market for Q3
• Huawei staff arrives at new mega-campus, hub of China’s tech drive
• North Korean forces in Ukraine would put China in a tight spot: analysts
• US issues AI national security memo to cut risks and avoid ‘strategic surprise’ by China
• Number of Chinese migrants at US-Mexico border drops to lowest count of the year
• Chinese investment banks turn inward as global dreams fade from view

Chinese believed to have targeted Trump’s and Vance’s phones in US telecommunications breach

https://www.theguardian.com/us-news/2024/oct/25/china-hack-trump-vance

Chinese government-linked hackers are believed to have targeted phones used by Donald Trump and his running mate, JD Vance, as part of a larger breach of US telecommunications networks, according to a New York Times report.

The Trump campaign was informed this week that the phone numbers of the Republican presidential and vice-presidential nominee were among those targeted during a breach of the Verizon network, the paper said, citing sources.

Investigators are working to determine what data, if any, was accessed by the “sophisticated” hack, the sources said. Other current and former government officials were also targeted, according to the report.

The FBI and the Cybersecurity and Infrastructure Security Agency confirmed an investigation was under way into the “unauthorized access to commercial telecommunications infrastructure by actors affiliated with the People’s Republic of China”. It did not name the Trump campaign in the statement.

“After the FBI identified specific malicious activity targeting the sector, the FBI and the Cybersecurity and Infrastructure Security Agency (CISA) immediately notified affected companies, rendered technical assistance, and rapidly shared information to assist other potential victims,” the agency said.

The Trump campaign did not directly address whether the phones used by Trump and Vance had been targeted.

In a statement, a Trump campaign spokesperson, Steven Cheung, criticized the White House and Trump’s opponent, Kamala Harris, and sought to blame them for allowing a foreign adversary to target the campaign, the Times reported.

A Wall Street Journal report last month said a cyber-attack linked to the Chinese government had infiltrated multiple US telecommunications firms and may have gained access to systems used by the federal government in court-approved wiretapping efforts.

The hackers accessed at least three telecommunication companies – AT&T, Verizon and Lumen Technologies – in what may have been an attempt to find sensitive information related to national security, according to the report.

The Trump campaign earlier this year revealed it had been hacked and said Iranian actors had stolen and distributed sensitive internal documents.

The US justice department unsealed criminal charges in September against three members of Iran’s Revolutionary Guards Corps suspected of hacking the Trump campaign.

Justice department officials said hackers were trying to undermine Trump’s campaign and intended to sow discord, exploit divisions within American society and potentially influence the outcome of the 5 November election.

With the election under two weeks away, Trump and Kamala Harris are locked in a tight race. In both national head-to-head polls and surveys in the crucial swing states where the election will be decided, the pair seem almost deadlocked.

[Sport] Trump and Vance possible targets of China-backed cyber attack

https://www.bbc.com/news/articles/cwyg9w7g6zlo

AFP

How China and the United States have parted ways in AI power race

https://www.scmp.com/news/china/science/article/3283901/how-china-and-united-states-have-parted-ways-ai-power-race?utm_source=rss_feed

As China embraces the coming AI era, a programme to set up a computing power corridor across the country will cover 99 per cent of the nation’s population, according to a key architect of the project.

It is the complete opposite of the United States’ approach.

In the US, most AI computing facilities are being built in northern Virginia, an area which already boasts 70 per cent of the world’s data centres.

Meanwhile China’s corridor, launched earlier this month, has facilities distributed across a wide region, from economically developed coastal areas to the western Gobi Desert, the northern borders to Siberia, and even taking in Tibet.

By 2030, these centres will be linked by high-speed optical fibres, forming a unified network. Even in a smaller city of around 500,000 people, a start-up will be able to leverage a nearby massive computing cluster to process AI tasks with a latency of under three milliseconds – faster than the refresh rate of a smartphone screen.

This approach is obviously more expensive and less convenient than building a centralised hub.

In an article in the journal E-Governance on October 21, Yu Shiyang, director of the Big Data Development Department at the State Information Centre of China, explained the rationale behind this strategy.

First, there is the idea of fairness. The AI revolution risks exacerbating the concentration of wealth in the hands of a few. Northern Virginia is already one of the wealthiest regions in America. Of the seven US counties with the highest household income, four are in this area.

“Most of the ultra-large data centres are concentrated in northern Virginia, where tech giants like Microsoft, Google and Meta have set up their bases,” Yu wrote.

China also grapples with economic imbalance, with eastern regions richer than the west.

“Optimising the distribution of computing resources, fostering a balanced digital industry layout and coordinating east-west industrial development can unlock new innovation and growth opportunities in vast regions like the west and northeast,” Yu said.

The second reason is efficiency.

Overly concentrated data centres hinder efficient energy use, particularly green power.

Due to energy shortages, Microsoft even plans to reopen the Three Mile Island nuclear plant not far from Northern Virginia, despite the nuclear meltdown which took place there in 1979.

According to a map in Yu’s article, China’s computing power corridor aligns closely with its ultra-high-voltage transmission network.

This ensures abundant power supply, including wind and solar energy from the Gobi and other deserts.

Some US industry insiders envy this.

“There are calls from them to learn from China,” Yu wrote.

Higher voltage means longer electricity transmission. Last year, China built more than 40,000km of high-voltage grids, some reaching 1,100 kilovolts in capacity. In contrast, the US built less than 1 per cent of that length, with a maximum voltage of 345 kilovolts.

Decentralised facilities could also be also safer, Yu said.

Northern Virginia’s proximity to the ocean poses risks. Some US security experts warn of potential destruction from natural disasters or attacks.

China has chosen lower-risk western regions as a strategic hinterland for its computing power corridor, according to Yu.

“Building data centres in strategically deep regions like Guizhou, Xinjiang and Tibet, which are remote and far from economic centres, reduces geopolitical security risks and enhances resilience and risk resistance in extreme situations,” he wrote.

China is ramping up R&D efforts to bring this megaproject to life.

Last year, the United States accounted for 32 per cent of global computing power, ranking first worldwide.

China ranked second with a share of around 26 per cent, in part due to US sanctions.

But China’s AI chip manufacturing is rapidly growing, thanks to the efforts of hi-tech companies such as Huawei Technologies.

These companies are also breaking world records in long-distance, large-capacity data transmission.

By June this year, data exchange latency between China’s east and west was reduced to 20 milliseconds, supporting large-scale AI training and task processing, according to Yu.

This has allowed Chinese companies to surpass the US in certain commercial applications.

For instance, while OpenAI’s Sora remains in the lab, some Chinese companies already offer similar text-to-video services to global users.

The impact of China’s computing power corridor will be felt around the world, according to Yu.

“High-capacity computing channels will be extended to countries and regions along the ‘belt and road’ in the future,” he wrote, referring to China’s Belt and Road Initiative.

“We will fully leverage the regional advantages of Xinjiang, Qinghai, Gansu, Inner Mongolia and other regions to export computing resources to Central Asia, West Asia and the Middle East.

“We will also promote regions such as Chongqing, Guizhou, Yunnan, Guangdong, Guangxi, Hainan and others to provide computing supply services to South Asia and Southeast Asia, and guide northeastern regions such as Heilongjiang to export computing capabilities to Northeast Asia.”

Chinese hackers targeted phones used by Trump and Vance, US report says

https://www.scmp.com/news/china/article/3283955/chinese-hackers-targeted-phones-used-trump-and-vance-us-report-says?utm_source=rss_feed

Chinese hackers who tapped into Verizon’s system targeted phones used by Republican US presidential candidate Donald Trump and his running mate J.D. Vance, The New York Times reported on Friday, citing people familiar with the matter.

The newspaper said investigators were working to determine what communications, if any, were taken.

The Trump campaign was made aware this week that Trump and Vance were among a number of people inside and outside of government whose phone numbers were targeted through the infiltration of Verizon phone systems, it added.

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

The Trump campaign was hacked earlier this year. The US Justice Department charged three members of Iran’s Revolutionary Guards Corps with the hack and trying to disrupt the November 5 election.

China counts on sales season to coax cautious consumers into spending spree

https://www.scmp.com/economy/china-economy/article/3283897/china-counts-sales-season-coax-cautious-consumers-spending-spree?utm_source=rss_feed

Though the year’s figures for consumer spending have largely disappointed, China is recording an early surge in parcel shipments as the Singles’ Day shopping season – the country’s largest annual consumer event – kicked off earlier than usual.

As authorities roll out an array of stimulus measures aimed to inject momentum into the faltering economy and revive household consumption, e-commerce platforms are also employing their own incentives during the critical period for retailers.

In a departure from previous years, major online venues like Tmall, Taobao, JD.com, and Pinduoduo moved up the start date for the mass discount period by 10 days. With presales launching on October 14, shoppers and media outlets have dubbed this year’s edition as “the longest shopping season ever”.

With the shopping festival taking a head start, China’s courier industry has also entered peak season ahead of schedule. On Tuesday – two days after e-commerce platform Taobao started its first round of major sales – 729 million packages were collected. According to China Post, the national mail service, this was a 74 per cent jump from the same day last year and broke the record for daily shipping volume.

Between Monday and Wednesday, couriers nationwide collected around 1.92 billion parcels, a nearly 50 per cent year-on-year increase.

Beijing is banking on the shopping season to buoy consumer confidence, subdued this year by a slump in the property sector, uncertain job prospects and volatility in the stock market.

The Ministry of Commerce has urged its local bureaus to implement “trade-in” programmes for consumer goods, encouraging them to treat the shopping season as a “key moment to boost consumption” and “match supply with consumer demand” during a press conference on Thursday.

The programme, in place since March, incentivises trade-ins of household appliances and automobiles with support from about 300 billion yuan (US$42 billion) in special government bond funds. The initiative is expected to play a crucial role in boosting consumption, especially with the added motivator of Singles’ Day promotional discounts.

Retail sales grew 3.2 per cent in September after a 2.1 per cent uptick in August, data from the National Bureau of Statistics showed.

Despite hitting a four-month high – in part due to the trade-in programme – spending still largely lagged behind last year, even with the roll-out of numerous heavyweight stimulus measures that began with an unexpected round of monetary easing in September.

Liu Yixuan, a 28-year-old working at a biopharmaceutical company in Beijing, bought a water heater, refrigerator and floor cleaner during the sale period, taking advantage of the trade-in programme to save even more.

The water heater was originally priced at 2,879 yuan (US$404) but cost only 2,067 yuan (US$290) after discounts, while the refrigerator was marked at 3,499 yuan and reduced to 2,694 yuan when the order was completed.

“The discounts definitely boosted my interest in buying, but I wouldn’t have made the purchase if we didn’t genuinely need these items at home,” she said, adding her company’s lay-offs since the pandemic and reduced income had caused her to watch her spending.

“I don’t shop for [pricey clothes] at the mall any more, and always use coupons online.”

China approves 128 titles in October, including hit Korean game Goddess of Victory: Nikke

https://www.scmp.com/tech/big-tech/article/3283940/china-approves-128-titles-october-including-hit-korean-game-goddess-victory-nikke?utm_source=rss_feed

China has given the nod to 128 Chinese and foreign video games for domestic release in October, a batch that includes the highly anticipated Goddess of Victory: Nikke, backed by Tencent Holdings, as excitement in the country’s gaming industry continues following the release of Black Myth: Wukong.

The National Press and Publication Administration, the agency responsible for licensing video games, approved the release of 113 domestically developed titles and 15 imported titles, according to the two lists it released on its official website on Friday.

The most notable approved foreign game is Goddess of Victory: New Hope, the domestic version of Goddess of Victory: Nikke, an anime-style role-playing shooting game developed by South Korean gaming studio Shift Up, in which Tencent owns a 35 per cent stake, according to the company’s stock exchange filing in July.

The international version of Goddess of Victory: Nikke, published by Tencent’s video game publishing division Level Infinite, has been a global hit since launching in November 2022.

The domestic title will be jointly published by Tencent and Migu Fun, the gaming platform owned by China’s biggest telecommunications company, China Mobile.

Shenzhen-based Tencent appears to be the big winner in the latest batch of approvals, as it is also the domestic distributor of another approved game, Squad Busters, a mobile action game developed by Finnish video game developer Supercell.

The regulator has kept its pace of approvals for domestic video games above 100 per month this year. Approval of foreign video games are fewer and come roughly every two months. Approvals have picked up this year as the government seeks to revive the industry after a prolonged down period following a 2021 crackdown.

The latest batch of approvals came two months after the release of the blockbuster title , regarded as China’s first AAA game. It took the global video gaming community by storm and put the country’s US$45 billion video gaming industry in the international spotlight.

The game, developed by Tencent-backed studio Game Science, has continued to enjoy an enthusiastic response from gamers. Sales have surpassed 21.5 million units on online video games store Steam, according to industry analytics firm VG Insights.

The title also propelled China’s video gaming market to reach record-high revenue in the third quarter. Sales in the world’s second-largest video gaming market by revenue rose 8.95 per cent year on year to 91.8 billion yuan, according to a report by the Gaming Publishing Committee of the China Audio-Video and Digital Publishing Association.

China Geological Survey’s former head Zhong Ziran charged with state secrets leak, bribery

https://www.scmp.com/news/china/politics/article/3283933/china-geological-surveys-former-head-zhong-ziran-charged-state-secrets-leak-bribery?utm_source=rss_feed

The former head of China Geological Survey has been charged with bribe-taking and leaking state secrets by the country’s highest prosecutorial agency.

Zhong Ziran, 62, is accused of using his senior positions at the natural resources ministry as well as its affiliated China Geological Survey to take a “particularly big” amount of bribes, the Supreme People’s Procuratorate said in a notice on its website on Friday.

The sum involved was not disclosed.

The notice added that Zhong, who was also Communist Party head at China Geological survey, had intentionally leaked state secrets.

The nature of the breach was “serious” and Zhong had violated the law of guarding state secrets, it said, but did not offer details.

Zhong is the most senior among a string of officials at government agencies overseeing natural resources to have faced corruption probes in recent months.

The raft of investigations come as China doubles down on national security concerns.

In June, Zhong was expelled from the party over “serious violations of disciplines and laws”, following an investigation launched six months earlier by the top anti-corruption bodies of the party and state.

In July, state media reported that he had been arrested by the Supreme People’s Procuratorate.

Zhong spent his career in government agencies overlooking mining, land survey and natural resources. In 2011, he became chief engineer of the erstwhile land and resources ministry, and was promoted to become a member of the ministry party committee and head of the Geological Survey in 2014.

He remained on the party committee when the ministry was restructured and renamed in 2018 as the Ministry of Natural Resources, and held the role until he retired in 2022.

China Geological survey is the country’s largest geoscience agency.

A statement issued by the procuratorate when Zhong was expelled from the party said he had forsaken Marxism and believed in superstitions. It also accused Zhong of using geological surveys, mine exploration approvals and staff promotions as means to take bribes.

Zhong also allegedly received “enormous” sums of money to help corporations win government projects or get mining approval, and abused his position for sexual favours.

He was also said to have resisted and lied during investigations by the party.

An article published earlier this year on the website of the Central Commission for Discipline Inspection and the National Supervisory Commission, the party and state corruption watchdogs respectively, highlighted Zhong’s case.

It said the investigation, along with those against other local-level senior officials in the natural resources agencies, sent a strong signal about China’s determination to clamp down on corruption in the sector.

The article was published in January, days after Zhong was first placed under investigation.

It said government agencies in charge of land resources faced “corruption risks” as they had the power to approve mining, farmland protection and ecological restoration measures, as well as monitor and enforce land use laws.

Government land leases, land evaluation, change of land use, land surveys, land records, and building demolitions were all potential bribery traps, it said.

While Friday’s official statement did not reveal what kind of state secrets Zhong had leaked, an amended state secrets law that took effect on May 1 has tightened requirements for government officials to protect work secrets.

Chinese EV maker GAC to invest in Europe even after report that Beijing is against plan

https://www.scmp.com/business/china-business/article/3283923/chinese-ev-maker-gac-invest-europe-even-after-report-beijing-against-plan?utm_source=rss_feed

State-owned carmaker GAC Group plans to set up factories in Europe in an effort to mitigate damage caused by the tariffs imposed on Chinese-made electric vehicles (EVs).

Wei Haigang, the general manager of GAC International, said expansion into Europe is an important part of the Guangzhou-based company’s growth strategy, adding that it expects to bring a large number of electric cars to the European market next year.

“We are reviewing the plans to localise production [in Europe],” he said in Hong Kong on Friday. “A final decision will be made if there is substantial demand.”

GAC International is a subsidiary that focuses on business outside China.

Wei’s remarks came after Bloomberg News reported that authorities in Beijing were pressuring mainland carmakers to refrain from investing in European Union (EU) countries while negotiations over EU tariffs were ongoing, citing unidentified people familiar with the matter.

The report added that the government request was not a mandatory order.

Wei said he was not aware of such a directive from Beijing and GAC is adamant about tapping into the European market – even with the additional tariffs of up to 35.3 per cent that are applied to Chinese-made EVs.

Earlier this month, EU members voted to impose punitive tariffs on Chinese-made EVs following an anti-subsidy investigation that began in September 2023. The duties are on top of the standard 10 per cent tariff applied to pure electric cars made in China. The tariffs will be in effect for five years.

China threatened to levy punitive duties on European products like dairy and pork.

“Setting up assemblies in the European market requires a big investment and the carmakers would suffer huge losses if the cars do not sell well,” said David Zhang, general secretary of the International Intelligent Vehicle Engineering Association. “The Chinese companies must be very careful in assessing the feasibility of their local production plans.”

China is now the world’s largest automotive and EV market. China sales of electric cars accounted for 65 per cent of the global total in the first half of 2024, according to the China Passenger Car Association.

In theory, local plants should enable Chinese EV makers to avoid EU tariffs while helping them build their brands around the world. But industry participants said most of the Chinese car brands have yet to convince foreign customers about their quality and reliability.

“Overseas consumers may be worried about their capabilities in aftermarket services and their financial strength to sustain operations,” said Gao Shen, an independent analyst in Shanghai. “It is reasonable for some of the carmakers to slow down the pace of going global.”

Wei of GAC said a small number of pure electric cars assembled on the mainland would be exported to Europe by the end of the year. EVs made by GAC are subject to a 20.7 per cent additional tariff in the EU.

Chinese carmakers have a huge cost advantage over their global rivals in building EVs, with a fully developed supply chain and strong manufacturing heft, according to Stephen Dyer, Greater China co-leader and head of the Asia automotive practice at global consultancy AlixPartners.

Chinese-made EVs cost 35 per cent less to produce than those made by other carmakers, he said in July.

Analysts said the EU duties were not enough to shut Chinese EVs out because some mainland carmakers would be able to digest the tariffs by taking full advantage of their production advantages.

Shenzhen-based BYD, the world’s largest EV builder, is subject to a 17 per cent punitive tariff. The company has a cost advantage of 25 per cent over traditional brands in the EU, according to a report published by UBS last year.

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China slaps performance ban on famous transgender TV host Jin Xing who seeks explanation

https://www.scmp.com/news/people-culture/china-personalities/article/3283874/china-slaps-performance-ban-famous-transgender-tv-host-jin-xing-who-seeks-explanation?utm_source=rss_feed

Famed Chinese transgender icon and TV host Jin Xing has reportedly faced an official ban on performing in the southern city of Guangzhou, allegedly due to her pro-LGBTQ stance.

This apparent ban has prompted her to seek an explanation publicly on social media in a move which has reignited significant online anti-LGBTQ sentiments.

The controversy arose on October 22 when Jin, who has nearly 14 million followers on Weibo, disclosed that her stage adaptation of Cao Yu’s classic work Sunrise was denied approval by Guangzhou Municipal Culture, Radio, Television and Tourism Bureau for its scheduled performance in December.

Jin self-directs and stars in the stage play, and since its debut in Shanghai in May 2021, the play has been well-received in many cities such as Beijing, Xiamen, Suzhou, Chengdu, Chongqing and Nanjing.

In the social media post, she described the Guangzhou ban as an “abuse of public power” by the Director of the Approval Department at the Tourism Bureau, a woman surnamed Song.

Jin directly tagged the official, and demanded an explanation.

“I have learned that the approval for my self-directed and self-starred stage play Sunrise has been rejected for personal reasons. Please provide the real reason for the refusal and present an official document. Otherwise, stop abusing your power,” said Jin.

“We all live under the same policies. Why has this stage play, which has toured the country for four years and received widespread acclaim from audiences, been denied approval in Guangzhou? Please respond, thank you!” she added.

Born in 1967 in Shenyang in northeastern China, Jin is known as China’s first transgender celebrity and an LGBTQ icon.

She underwent sex reassignment surgeries in 1995 in Beijing and later married her German husband, Heinz-Gerd Oidtmann, in 2005.

In 2012, the renowned modern dancer and pioneering artist launched The Jin Xing Show, which celebrates her sharp wit and candid personality.

However, it was abruptly cancelled in August 2017 without a clear reason being given.

Staff from the Tourism Bureau told Modern Express on October 23 that the approval process for performances is not dependent on the decision of a single leader and suggested that the rejection might be due to incomplete application materials.

At the time of writing, Jin had not responded to an interview request from the Post.

The apparent ban sparked online speculation that it was due to Jin’s pro-LGBTQ stance, which was highlighted during her previous performance in Taiyuan on January 13.

During a curtain call, an audience member raised a rainbow flag bearing the message “Love is regardless of gender” to promote LGBTQ rights.

Jin took the flag onto the stage and said: “Young man, I agree with you. Love is love, regardless of gender,” after which she tossed the flag behind her and continued the curtain call.

The TV host later clarified in a Weibo post that she had “immediately taken the flag from his hands and disposed of it,” adding that the matter was fairly resolved after a thorough investigation and her subsequent performances across the country were allowed to proceed smoothly.

However, many continued to interpret her action as a public endorsement of homosexuality, prompting them to support Guangzhou’s apparent decision.

A military blogger, known as Earth Lens A, who boasts nearly one million followers on Weibo, said: “Honestly, the rejection is legally justified. Whether from the perspective of traditional Chinese ethical values or current laws and regulations, it neither supports nor promotes LGBT behaviour, which at best can be considered a violation of traditional morals, and at worst, against humanity.

“As a public figure who practises and openly promotes LGBT, preventing you from using public spaces to pollute public morals is entirely justified,” the blogger said.

Another online observer agreed, saying: “Jin Xing, the moment you raised the rainbow flag during your performance, Guangzhou’s decision to reject the approval was the right one.”

‘Good restart’: India-China thaw driven by economic, security interests, experts say

https://www.scmp.com/week-asia/politics/article/3283934/good-restart-india-china-thaw-driven-economic-security-interests-experts-say?utm_source=rss_feed

India and China have agreed to ease border restrictions with resumed patrols, a move experts say is driven as much by economic imperatives as by security concerns, with both nations looking to bolster trade ties.

The Indian government announced on Monday that the two nations would restart patrols in the contested region, where tensions have simmered since the Galwan Valley clash in 2020.

China’s Ministry of Foreign Affairs spokesman Lin Jian confirmed the development, stating that Beijing would work with New Delhi to implement the agreement.

Experts view the move as a positive step towards stabilising bilateral relations after years of fraught tensions.

Saheli Chattaraj, assistant professor of Chinese studies at Somaiya Vidyavihar University, said India remained cautiously optimistic about Beijing’s intentions but that stability at the border served both nations’ interests.

“Our differences at the border still continue, with China’s stand being that differences left from history need to be resolved through mutual consultation,” Chattaraj said.

She noted that breaking the diplomatic deadlock implied both countries were motivated to improve relations through peaceful and political means.

“There is impetus for improving the relation by bringing in positive impact and by narrowing down differences,” she said.

The disengagement announcement followed a bilateral meeting between India’s Prime Minister Narendra Modi and China’s President Xi Jinping on the sidelines of the Brics summit in Kazan, Russia – the first such in-person meeting between the two leaders since 2019.

Both leaders stressed the importance of handling their border disputes and agreed that India and China could have a “peaceful and stable” relationship by displaying maturity and mutual respect.

Atul Kumar, a fellow of the Delhi-based Observer Research Foundation’s strategic studies programme, said building trust would take time.

“As long as mutual respect and sensitivity to each other’s national interests and red lines can be reflected in this bilateral relationship, the situation will remain stable,” he said. “It’s indubitably a good restart for the bilateral relationship, and both countries are cautiously optimistic at present.”

Kumar said Brics had helped build momentum for China and India to discuss and seek resolution to their bilateral problems under its framework.

“President Xi Jinping gives enormous importance to this alternative global platform, and the fact that he decided to use it to seek a resolution to the current stalemate also speaks volumes about his consistent effort to promote Brics in the changing geopolitical environment,” he said.

Bilateral ties nosedived after the deadly 2020 clash in the Galwan Valley, which left 20 Indian soldiers and at least four Chinese troops dead. The two countries also experienced tensions during the 2017 Doklam stand-off and confrontations along the border in Sikkim and Arunachal Pradesh.

Rakesh Sharma, a defence analyst and distinguished fellow at the Delhi-based Centre for Land Warfare Studies, noted that while the latest attempts to resolve the prolonged impasse in eastern Ladakh were encouraging, rebuilding trust would require sustained effort.

“Previous confidence-building measures [CBMs] established between 1993 and 2013 have lost their efficacy. Newer CBMs will take quite some time to establish. So, it will be essential to remain cautious,” he said.

M.S. Prathibha, an associate fellow at the Institute for Defence Studies and Analyses, told This Week in Asia that China had been very diligent in resuming economic ties with India given its security and trade tensions with the West.

“The agreement has given cautious optimism in India-China relations. India wanted the border situation to de-escalate and resolve issues of patrolling at all friction points before resuming any economic ties,” Prathiba said, adding that India also hoped China could abide by the bilateral agreements signed between the two countries.

Analysts say economic interests between India and China have driven both countries to address and resolve their border issues.

“India and China are interdependent on each other. India doesn’t want to entirely rely on the West and is finding it hard in negotiating with Korea and Japan. Meanwhile, China needs access to the Indian market, especially given its strained relations with the West,” said an economic analyst working in a think tank organisation, who requested anonymity.

China is seen as easier to work with from Delhi’s perspective, compared to countries such as Japan and South Korea which tend to treat India as a junior partner, analysts say. Commerce and Industry Minister Piyush Goyal said on July 30 that India was pushing to speed up negotiations to review the free-trade agreements implemented with Japan, South Korea and Asean.

“There is also pressure from Indian business houses on the government to improve trade relations ties with China, given the economic opportunities and benefits such ties could bring,” the unnamed analyst said.

“Both countries have larger economic interests and they can’t afford to be bereft of economic benefits because of their border disputes.”

In the financial year that ended in March 2024, India’s exports to China stood at US$16.65 billion, while imports totalled US$101.75 billion, resulting in a trade deficit exceeding US$85 billion, according to data from the economic think tank Global Trade Research Initiative.

India’s annual Economic Survey report, issued in July, emphasised the importance of attracting foreign direct investment from China to enhance India’s exports to the United States and other Western countries, thereby addressing Delhi’s escalating trade deficit with Beijing.

Arun Kumar, a retired professor of economics at Jawaharlal Nehru University, offered a different view, saying that the latest agreement concerned the geopolitics of the region.

“The West wants India to be [the] counterpoint to China [in Asia], that is why the US has been building a strategic relationship with India,” Kumar said.

“So, it is in China’s interest to see that India doesn’t go too much to the West and remains neutral between the two blocs, that is why China has agreed to tone down on the border issue.”

Chinese and Russian coastguard chiefs call for more cooperation on ‘far seas’

https://www.scmp.com/news/china/military/article/3283880/chinese-and-russian-coastguard-chiefs-call-more-cooperation-far-seas?utm_source=rss_feed

The Chinese and Russian coastguards have pledged to coordinate more on “far seas” following their joint patrols in the Arctic and northern Pacific oceans last month.

Meeting in Beijing on Monday, Chinese coastguard chief Major General Yu Zhong and Admiral Roman Tolok, head of Russia’s coastguard, called for deeper “pragmatic maritime cooperation”, according to a readout posted on the Chinese coastguard’s social media account on Thursday.

They also vowed to improve “joint long-distance operations” between the two coastguards in the “far seas”, and to “actively contribute to consolidating and developing the comprehensive strategic cooperative partnership between China and Russia in the new era”.

It was the second meeting between the Chinese and Russian coastguards since April last year, when a memorandum of understanding was signed on strengthening maritime law enforcement cooperation.

The coastguard chiefs on Monday also praised their first joint exercise and patrol in the Arctic – where China and Russia share mutual interests in shipping routes – and pledged to maintain maritime security and stability.

In September, the Chinese coastguard sent its Meishan and Xiushan ships to the Peter the Great Gulf in the Sea of Japan, or East Sea, where they took part in drills with the Russian coastguard. They were put through their paces on maritime law enforcement security threats, intercepting suspected criminal ships, sea rescues and firefighting.

The two coastguards then carried out a patrol in the northern Pacific and the Arctic – the first time the Chinese coastguard has entered the Arctic Ocean.

The Arctic’s Northwest Passage holds significant strategic and commercial interest for China and Russia, as well as the United States. It links the Atlantic and Pacific oceans but is only open for a few months of the year, when the ice has melted enough to make it accessible to ships. However, melting ice from climate change raises the possibility of a permanent sea lane, which would cut shipping time between Europe and Asia.

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

Monday’s coastguard meeting also follows a visit to Beijing by Russia’s new defence chief Andrey Belousov last week, as China comes under growing pressure from the US and its allies over its close ties with Russia.

During talks with Zhang Youxia, the vice-chairman of China’s top command body the Central Military Commission, Belousov said the two nations’ defence ministries were “united in their assessments of global processes, and they have a common understanding of what needs to be done in the current situation”, according to Russian news agency Tass. Zhang said China was “ready to deepen and expand military ties with Russia”.

Reunited after 30 years, China twins face bitter rift as 1 disappears with start-up cash

https://www.scmp.com/news/people-culture/trending-china/article/3283346/reunited-after-30-years-china-twins-face-bitter-rift-one-disappears-start-cash?utm_source=rss_feed

Twin sisters in China were reunited after 30 years, only to become estranged following unsuccessful business ventures, with one sister disappearing with the start-up funds.

The twins, originally from central China’s Henan province, were separated at birth and adopted by different families living 50km apart, reported mainland media outlet Zhengguan News.

In rural China, some impoverished parents send their newborns to strangers in hopes of a better life. Such informal adoptions are illegal without official documentation.

In March 2021, Zhang Li, 30, discovered a video on a social media platform featuring a woman who looked identical to her, named Cheng Keke.

After chatting, they realised they shared not only the same birthday but also the same blood type, interests, and even similar fashion tastes.

The two visited a hospital for a DNA test, which confirmed they were twin sisters. At that time, both were living in different locations in Henan province.

Their emotional reunion quickly garnered headlines across China.

Zhang, the older sister, reminisced about the trips she took Cheng on.

“We went to Beijing for Peking duck, and we also visited the Bund and the Oriental Pearl Tower in Shanghai. We were so happy back then,” Zhang recalled.

Cheng expressed her long-held desire for an older sister.

“After we met, I stayed with her almost every day. I just wanted to spend every moment with my sister. There was so much I wanted to share,” Cheng said.

The sisters then joined forces to sell food and lifestyle products on Douyin. During this time, they travelled to different cities in Henan and southern China to conduct their online sales.

Despite their growing fan base, the business faced challenges and operated at a loss.

Cheng eventually grew frustrated, accusing Zhang of neglecting the business while frequently returning to her Dengfeng hometown in Henan. Cheng was left to cover all travel, rent, and meal expenses.

Zhang, however, attributed their conflict to personality differences: “I speak directly, but my sister tends to bottle things up.”

She also pointed to Cheng as a key factor in their failed venture, claiming she lost over 500,000 yuan (US$70,000) while working together.

Zhang stated: “In the end, I told her I could not continue the live-streaming business with her any more.”

In early February, they opened a restaurant in Henan, hoping for a fresh start, but disagreements over management and investments led to a complete fallout.

Cheng subsequently took over 20,000 yuan from their business funds and blocked Zhang’s contact.

She denied the allegations of theft, asserting that she took her share and returned the remaining money to investors after paying wages and rent.

Cheng stated that this chapter of their twin lives has ended and mentioned that she is preparing to open a new store in her Gongyi hometown in Henan.

Zhang now manages the Henan restaurant alone.

She remarked: “I won’t attempt to contact Cheng again. This experience taught me that money can outweigh family bonds.”

“If I could go back, I’d choose not to meet her. The joy of reuniting was genuine, but the heartbreak was equally real.”

Their tumultuous journey has captivated mainland social media.

“After the reunion, they barely knew each other and hastily embarked on a business together. That was their first mistake,” reflected one observer.

China, Brics bloc not ready to reject US dollar despite Russian entreaties

https://www.scmp.com/economy/global-economy/article/3283877/china-brics-bloc-not-ready-reject-us-dollar-despite-russian-entreaties?utm_source=rss_feed

While there are growing concerns among the Brics bloc of emerging economies over the scope of financial sanctions from the United States, few countries in the grouping seem ready to ditch the US dollar despite Russian President Vladimir Putin’s recent efforts to encourage an alternative system of payment among members.

Following an expanded summit for the bloc hosted in his country – and a communique indicating little progress had been made on such a system, analysts said – Putin appeared to concede the matter, saying the bloc’s constituent nations “have not and are not” pursuing the idea.

His stance by summit’s end on Thursday was a marked contrast with his opening speech for the gathering the day before, where he issued a call for an international payments system that could prevent the US from using its dollar as a political weapon.

One reason an alternative system has not been adopted is that few countries are willing to give up the US dollar entirely, said James Chin, a professor of Asian Studies at the University of Tasmania in Australia.

“It’s very difficult to bypass the US dollar,” Chin said. “A bilateral currency agreement seems to be the easiest way. In some ways, it is a bit clumsy, but it can be done if the amount is big enough.”

Chin was referencing efforts by the People’s Bank of China, which has agreed to 40 bilateral swap lines with other central banks enabling them to exchange their local currencies for the yuan.

Before the summit in Kazan, Russia sketched an outline for a payment platform in national Brics currencies that would include a new messaging system and a network of national commercial banks linked through the Brics central banks.

The incentive for alternatives to the US dollar is stronger for Russia than most other Brics members; it is grappling with unprecedented US-led sanctions levied after its invasion of Ukraine in February 2022.

Delays in trade payments have become a major headache for Russian companies and banks, even with major partners like China or Turkey, as banks everywhere come under pressure from Western regulators to scrutinise transactions.

As geopolitical frictions continue to mount, financial institutions in China and Russia are looking to minimise their exposure to the US-led financial order – particularly the Society for Worldwide Interbank Financial Telecommunication, a messaging system that facilitates rapid cross-border payments.

A higher reliance on barter trades and Russia’s home-grown Mir payment system, set up by the Bank of Russia as an alternative to Visa and Mastercard, are two of several possibilities that have been discussed between the two neighbours.

Former PBOC governor Zhou Xiaochuan said the focus for China, Southeast Asia and the Gulf states should be to “strengthen the cross-border use of local currencies”, while still acknowledging the importance of the US dollar assets and the depth of US capital markets.

Zhou cited the example of mBridge, China’s cross-border digital currency initiative, as a means of filling vacancies in the international payment system.

“Using local currencies for cross-border payments is very important for implementing independent monetary policies and maintaining monetary sovereignty,” said Zhou at a forum in Beijing on Wednesday, according to a Thursday report by the Beijing News.

“Whether the US dollar can continue to be used as a reserve currency and international trade settlement currency depends largely on the US government itself. If the US uses the dollar as a weapon, it will reduce the willingness of other countries to use the dollar.”

Chinese space tourism set for 2027 take-off with aerospace firm offering US$210,000 seats

https://www.scmp.com/news/china/science/article/3283890/chinese-space-tourism-set-2027-take-aerospace-firm-offering-us210000-seats?utm_source=rss_feed

Chinese tourists are set to enjoy the country’s maiden space travel in 2027, after a private space firm on Thursday sold the first two tickets in the country – costing 1.5 million yuan (US$210,000) each – for seats on a rocket ride.

Tech start-up Deep Blue Aerospace, which is based in eastern Jiangsu province, said its first passengers would be sent on a journey of around 12 minutes during which they could experience at least five minutes of weightlessness in outer space before heading back to Earth.

The company put the tickets on sale at 6pm on Thursday and they were sold within 20 minutes during a live stream event on China’s e-commerce giant Taobao, according to Chinese media outlets.

It plans to release more tickets next month, the company announced.

During the 2027 flight, the passengers will be taken on a suborbital flight, meaning the rocket will reach outer space but not enter orbit around the Earth, according to a statement the company posted to social media on Wednesday.

The company planned to conduct dozens of trials over the next two years, saying it “understands profoundly the complexity and risks” of rocket technology, to ensure the safety and reliability of space travel before officially launching commercial space tourism in 2027, it said.

Huo Liang, chairman of Deep Blue Aerospace, said during the live stream that “ticket prices at several hundred thousand yuan may soon become a reality” as the technology for orbit-capable, reusable rockets advances.

Chinese social media users have been actively discussing the relatively “low price” of this newly-announced domestic space flight.

“For most people, this is still a very luxurious trip,” one person wrote on the Weibo social media platform. “But compared to tickets [in other countries] … this alternative is a bargain.

“It seems that Chinese companies might soon drive down prices in the space tourism sector, making space travel far more affordable.”

Reusable rockets are crucial for reducing the high cost of space tourism, the company said in its statement. Despite China’s well-established operational history of manned spacecraft, space tourism is challenged by the cost of launching the missions.

Virgin Galactic, the space tourism company founded by British billionaire Richard Branson, completed its first commercial space flight in August last year, joining Jeff Bezos’ Blue Origin and Elon Musk’s SpaceX, both of the US, in the space tourism business.

Virgin Galactic is charging a US$600,000 per seat, according to its website, more than double the price of Deep Blue Aerospace’s flight – yet it does not specify the duration of every space flight.

In June, the company said it sent four tourists to the edge of space and back aboard its spaceplane, marking its seventh commercial space flight mission.

South China Sea: Vietnam’s growing Spratly outposts spark flashpoint concern in China

https://www.scmp.com/news/china/diplomacy/article/3283834/south-china-sea-vietnams-growing-spratly-outposts-spark-flashpoint-concern-china?utm_source=rss_feed

Recent reports from a Chinese think tank have reignited concerns over Vietnam’s quiet and swift expansion of its South China Sea outposts as Chinese experts urge greater awareness that Vietnam’s efforts could be an underlying risk point in the region.

Maritime analysts said Beijing was likely to be concerned about upgrades made to Hanoi’s outposts, and while effective communication channels between the two might help manage maritime disputes, the basic differences between them were expected to endure.

The latest findings based on satellite images from the South China Sea Probing Initiative (SCSPI) show that in the past five months Vietnam’s land reclamation in the contentious Spratly Islands, known by China as the Nansha Islands, has expanded by nearly 2.23 sq km (0.86 square miles) across seven of its held features.

There has been a more than 7.73 sq km expansion on 11 features since October 2021, SCSPI said in a post on X.

The Washington-based Asia Maritime Transparency Initiative (AMTI) at the Centre for Strategic and International Studies made a similar observation.

Their report in June said Hanoi was on track this year to surpass previous records of island construction. It said that between November and May, Vietnam added around 692 acres (about 2.8 sq km) to 10 different features in the Spratly Islands, a sign of intensifying territorial advancement.

“Hanoi has been consistently expanding its occupied features in the Spratly Islands since 1970s … and there has been a dramatic acceleration in both the pace and scale of these modifications since the latest round of expansion starting in October 2021,” said Hu Bo, director of SCSPI.

Hu said Vietnam – which occupies the most features among claimant states in the Spratly Islands with a total of 29 features – had been actively reclaiming land on 11 of those features and showed no signs of slowing down.

“Vietnam’s land reclamation efforts could potentially exceed the scale of China’s past activities in the region,” Hu said, adding that Beijing should openly deal with Hanoi, as “private protests are meaningless”.

Chen Xiangmiao, an associate research fellow at the Hainan-based National Institute for South China Sea Studies, said Vietnam aimed to leverage its island construction to strengthen control over the Spratly Islands, as it is likely to establish a constant presence of maritime enforcement vessels and expand the deployment of military facilities there.

“Previously, Hanoi maintained a limited number of bases in the Spratlys, capable only of accommodating small vessels. However, with recent upgrades to its port facilities, Vietnam is poised to maintain a continuous maritime law enforcement presence, which will significantly strengthen its control over the entire Spratly region,” Chen said.

Among the numerous reefs under Vietnamese control, Barque Canada Reef stood out as Vietnam’s largest outpost and the fourth-largest feature in the Spratly Islands. Malaysia also claims the reef and is concerned about Vietnam’s outposts constructions there.

The AMTI report noted that Barque Canada Reef spanned 1.66 sq km in May, and was the only Vietnamese-controlled outpost that could host a 3km (1.86 mile) runway capable of landing most Vietnamese military aircraft.

According to SCSPI, the reef currently measures 2.66 sq km and an airstrip was being rapidly built on Barque Canada Reef, with more than 410 metres of runway observed so far.

“The recent upgrades to outposts have enhanced Vietnamese capacity to accommodate large vessels – from thousands to nearly 10 thousand tonnes – showcasing their potential for future military ship docking,” Chen said. He said the defence structures being built were outfitted with barracks, artillery and other military facilities.

The Spratly Islands are not under the control of any single nation but are variously located within the 200 nautical mile exclusive economic zones of Malaysia, Brunei, Vietnam and the Philippines, as well as within the scope of China’s extensive nine-dash line that claims the most of the waterway.

Chen said Vietnam’s attempts to “illegally and permanently” occupy those features would pose a significant challenge for China because they could potentially prompt similar actions from the Philippines and other claimant countries.

“Vietnamese vessels may venture into maritime zones around islands and reefs controlled by China, or attempt to establish a presence on some unoccupied features in the Spratlys,” Chen said.

“These manoeuvres could lead to an escalation in maritime interactions and competition between China and Vietnam, raising significant concerns for Chinese authorities.”

Chen said uncertainties surrounding Vietnam’s outpost upgrade were set to become even more complex.

China has so far offered a subdued response to Vietnam’s land reclamation efforts in the Spratly Islands, in contrast to its more assertive stance towards the Philippines. Experts say the difference in Beijing’s approach is related to political mutual trust between the two socialist nations that comes with considerable resilience.

China has maintained a close exchange with Vietnam’s new top leadership following a power reshuffle. This week, military general Luong Cuong was elected as the new state president to succeed To Lam, who served as president even after his formal appointment as the general secretary of the ruling Communist Party in August.

Cuong was received by Chinese President Xi Jinping this month and they reaffirmed their commitment to strengthening ties between the two countries. To Lam visited China in August on his first foreign trip after taking office and pledge to solve their maritime dispute through dialogue.

Luo Liang, an assistant research fellow at the National Institute for South China Sea Studies, said it was too early to discern the foreign policy direction of the new administration in Vietnam, “however, a radical transformation towards its stance on China seems unlikely”.

According to Luo, Vietnam’s actions have been met with negotiations and objections through Beijing’s internal diplomatic channels.

“But frequent engagements between top officials and the smooth, open communication channels between China and Vietnam have enabled effective handling of maritime differences, helping to minimise a detrimental impact on bilateral ties,” Luo said.

Despite these efforts, the fundamental disagreements over the South China Sea disputes continue to be a thorny and unresolved challenge, according to Luo.

In 2013, China embarked on a major island-building programme of its own in the Spratly Islands, building both civilian and military infrastructure in the South China Sea, including military-grade airstrips, radar stations, harbours and accommodation for troops.

It said they were built on features controlled by Beijing and that its actions were “lawful and justified”.

Vietnam’s resolute actions in defending its claims are poised to complicate China’s future efforts to assert its rights in the South China Sea, according to an associate professor in Guangzhou who specialises in the South China Sea, and has asked to remain anonymous.

Sea face-offs between Beijing and Hanoi are not only persistent but are likely to escalate in future, the academic said, citing the latest incident in which Chinese law enforcement personnel were accused of brutally attacking Vietnamese fishermen.

Earlier this month, Vietnam accused China of attacking 10 Vietnamese fishermen in an incident that left three with broken limbs. The confrontation also resulted in their fishing gear being damaged and their fish catch being confiscated near the contested Paracel Islands.

Beijing refuted the allegations, claiming the Vietnamese fishing boats were illegally fishing in the area. China said it responded professionally and with restraint to stop the boats, and that no injuries were found.

Following his participation in a regional forum in Laos, Chinese Premier Li Qiang travelled to Vietnam for discussions with To Lam and Prime Minister Pham Minh Chinh. It presented Beijing with an opportunity to repair relations after the unusual maritime confrontation.

In the declaration document, Beijing and Hanoi committed to “refrain from taking actions that complicate the situation and widen disputes”.

Additionally, they agreed to initiate joint maritime development projects in areas of low sensitivity and enhance interaction between their defence and security sectors.

“The intensity and severity of the next clash between China and Vietnam could surpass earlier incidents. However, frictions are likely to be temporarily stabilised and cooled down by high-level dialogues, but they fall short of addressing the core problem,” said the academic in Guangzhou.

Star Chinese fund manager bets on Alibaba, liquor stocks for shareholder returns

https://www.scmp.com/business/china-business/article/3283850/star-chinese-fund-manager-bets-alibaba-liquor-stocks-shareholder-returns?utm_source=rss_feed

A star Chinese fund manager made new investments in Alibaba Group Holding in the third quarter, making the e-commerce giant the second-biggest holding in his US$8.5 billion portfolio, as leading technology and consumer stocks look attractive in terms of shareholder returns after years of underperformance.

Zhang Kun of Guangzhou-based E Fund Management – who manages the biggest pool of money in China’s mutual-fund industry – bought 40.4 million Hong Kong-listed shares of Alibaba through his E Fund Blue Chip Selected Mixed Fund, according to the fund’s quarterly report released on Friday.

The 4 billion yuan (US$561.4 million) investment as of the end of September represented 9.1 per cent of the fund’s assets, it said. Alibaba was not part of Zhang’s portfolio in June, the fund’s interim report showed.

“We’ve observed that the dividend yields of some leading consumer companies are ranked among the top across the market and even surpass those of the constituents on the dividend indexes,” Zhang said in the report. “Considering comprehensive shareholder returns, including buy-backs and dividend payouts, some leading technology and consumer stocks offer very high returns on either an absolute or a relative level.”

Zhang is known for his value-investing mentality and the size of the funds he manages. The US$6.2 billion Blue Chip fund is his flagship product.

That fund delivered a 15.1 per cent return last quarter under the strategy of buying Alibaba and other large-capitalisation stocks like Chinese liquor producer Shanxi Xinghuacun Fen Wine Factory. That beat the 12 per cent gain in a customised benchmark designed to gauge the fund’s performance, which includes onshore stocks, Hong Kong-listed shares and bonds, according to the quarterly report.

Mainland and Hong Kong stocks got a big lift from a raft of stimulus measures unveiled by Beijing in late September to shore up stocks and rejuvenate economic growth. These included 800 billion yuan in new funding facilities to support institutional stock investments, cuts in borrowing costs and the removal of purchase restrictions on the property market.

Alibaba’s shares jumped 56 per cent in Hong Kong in the third quarter, the best performance for the three-month period since it listed in the city in 2019, as the company rolled out a share buy-back plan worth a combined US$65 billion and its e-commerce business showed signs of stabilising. Zhang may be taking a position ahead of Alibaba reporting its second-quarter results on November 15, and placing a bet on the likely performance of the Singles Day shopping festival.

Even after the sharp gain, Alibaba remains nearly 70 per cent off its peak in October 2020, with its valuation below the three-year average on a price-to-earnings basis, according to Bloomberg data. Alibaba owns the Post.

Stocks of big companies like Alibaba still look attractive even after the recent upsurge, given relatively high shareholder returns and the near-record low of longer-dated Chinese sovereign bonds, Zhang said.

In the third quarter, he more than doubled his holdings of Shanxi Xinghuacun Fen Wine to 14.8 million shares, and increased his position in rival Luzhou Laojiao by 780,000 shares while cutting exposure to Tencent Holdings by 1.7 million shares, the report showed.

The three companies were all among Zhang’s top 10 holdings by the end of the third quarter. His biggest holding in the span was Wuliangye Yibin, China’s second-largest baijiu producer, which was worth 4.29 billion yuan in value and represented 9.8 per cent of the fund’s investments.

“The economy is expected to stabilise after a slew of policies that were announced in late September,” he said. “That is also expected to dispel the pessimistic expectations about the economy and downward revision of corporate earnings.”

China’s top legislature to meet November 4-8, as market awaits stimulus plans

https://www.scmp.com/economy/economic-indicators/article/3283851/chinas-top-legislature-meet-november-4-8-market-awaits-stimulus-plans?utm_source=rss_feed

China’s top legislature will convene a meeting from November 4-8 to discuss a wide range of issues facing the world’s second-largest economy.

It was announced at a Friday meeting chaired by Zhao Leji, chairman of the Standing Committee of the National People’s Congress.

The meeting of the NPC Standing Committee will come with the market eagerly awaiting new information about the country’s latest developments in its economic stimulus plans.

Its agenda includes a discussion over the country’s financial work and review of some law revisions. So far, no bills related to the financial ministry nor budget plans have been mentioned in the official statement.

More to follow …

China sees ‘sudden’ rise in sea water, jobs for Hong Kong top talents: SCMP’s 7 highlights

https://www.scmp.com/news/world/article/3283634/china-sees-sudden-rise-sea-water-jobs-hong-kong-top-talents-scmps-7-highlights?utm_source=rss_feed

Late Monday evening, along the coast of northeastern China’s Bohai Sea, the water began to rise as it normally does when tide comes in. But the water kept rising. It quickly flooded inland areas, prompting emergency responses and shattering official records.

While their strategies for the region are expected to be similar, analysts see Kamala Harris taking a more “personal” approach and paying more attention to issues like the South China Sea. Donald Trump might be more assertive on the disputed waterway – potentially worsening tensions and increasing the risk of confrontation with China.

Washington is closely monitoring developments following New Delhi’s announcement of an agreement with Beijing on patrolling their 3,000km (1,860-mile) disputed border.

In being granted asylum in the UK, Lee Hsien Yang, the younger son of ’s founding prime minister Lee Kuan Yew, joins the ranks of other political dissidents from the city state who took up such a status abroad out of fear of persecution.

An auto company senior executive in China sparked significant backlash after sharing a video of himself enjoying a hotpot meal inside a new car model from his firm, aiming to promote its multipurpose use and air filtration system.

Launched in December 2022, Hong Kong’s top talent scheme aimed to attract global top graduates, professionals and entrepreneurs amid the city’s brain drain following the Covid-19 pandemic. Authorities have said that those recruited under the scheme earned a median monthly salary of HK$50,000 (US$6,390) and were estimated to have added HK$34 billion to the economy.

But behind this rosy picture, not all has been smooth sailing.

When the autumn edition of China’s oldest and largest trade fair opened its doors last week, many Chinese exporters could not help but notice that Europeans and North Americans were less represented among the bustle of buyers at the twice-yearly event.

China satellites ‘at risk’ as debris count from Intelsat explosion rises

https://www.scmp.com/news/china/science/article/3283790/china-satellites-risk-debris-count-intelsat-explosion-rises?utm_source=rss_feed

More debris has been detected from the Intelsat 33e communications satellite that disintegrated over the Indian Ocean, threatening hundreds of satellites in geostationary orbit, including those operated by China.

The 6,600kg (14,600lb) satellite – built by Boeing for Virginia-based Intelsat to provide internet and phone services across Europe, Africa and the Asia-Pacific region – broke apart at around noon Beijing time on Saturday, according to the US Space Force.

Around 20 fragments were initially tracked but the number has grown to more than 80, according to reports from commercial companies as well as the Russian space agency Roscosmos.

The satellite, which was around 36,000km (22,236 miles) above the Earth when it broke up, was roughly the size of a shipping container and had experienced thruster and propulsion issues since its launch in 2016, according to Intelsat.

The company said on Monday that it is working with Boeing and government agencies to analyse data and observations of the “anomaly” that resulted in the total loss of the satellite.

Harvard astronomer Jonathan McDowell, who tracks space activities, said that the satellite’s high altitude has made the break-up harder to monitor, but there was “definitely” some risk to other satellites.

“It’s hard to assess how bad it is yet,” he told the South China Morning Post via email on Thursday. According to McDowell, the incident could have been caused by a collision with space debris or an internal event, such as a propulsion system explosion.

Geostationary orbit – where the Intelsat 33e was positioned – is much further than low Earth orbit, which hosts most spacecraft, including the International Space Station and China’s Tiangong space station.

China has several satellite series in geostationary orbit, including the Fengyun weather satellites and BeiDou navigation network, as well as Zhongxing communications satellites for civilian and military use.

Three Chinese “high-orbit internet satellites” were also launched towards geostationary orbit this year, although little is known about them.

According to McDowell, the latest incident is likely to be similar in scale to China’s major space accident in August, when a Long March 6A rocket’s upper stage exploded in low Earth orbit.

US Space Command and commercial monitoring companies estimate that more than 700 pieces of space debris were generated in the blast, which occurred during deployment of China’s first batch of satellites for its Qianfan broadband internet constellation.

“Both incidents are at the worse end of what we’ve seen in space. There is definitely some risk to other satellites,” McDowell said.

The Kessler effect is one of the biggest threats posed by space debris but is less likely to occur in geostationary orbit, because of its much larger volume and relatively lower velocities between objects.

Nasa scientist Donald Kessler described in 1978 how the density of objects in low Earth orbit could become so high that collisions of debris would generate even more debris, leading to a chain reaction that may eventually make certain orbits unusable.

Mainland China’s latest Taiwan military drills condemned by European Parliament

https://www.scmp.com/news/china/diplomacy/article/3283811/mainland-chinas-latest-taiwan-military-drills-condemned-european-parliament?utm_source=rss_feed

The European Parliament has condemned Beijing’s recent military drills around Taiwan, in a resolution that threw the chamber’s support behind Taipei by a landslide majority.

In total, 432 members of the parliament voted in favour of a resolution that lashed out at mainland China’s “continued military provocations against Taiwan and its continued military build-up that is changing the balance of power in the Indo-Pacific”.

Just 60 lawmakers voted against the motion, with 71 abstaining.

The figures reflect a continued push from the parliament for the EU to bolster ties with Taiwan, and comes a week after it hosted the island’s former leader Tsai Ing-wen. The visit marked the highest-profile Taiwanese visit to Brussels to date.

The resolution called for Taipei’s admission to international bodies such as the World Health Organization and Interpol, and was held to coincide with the 53rd anniversary of United Nations resolution 2578, which saw Beijing replace Taipei as the official representative of China at the UN.

The European Parliament’s motion accused Beijing of “constant distortion of UN Resolution 2758 and its efforts to block Taiwan’s participation in multilateral organisations”.

It said that “UN Resolution 2758 takes no position on Taiwan; strongly rejects and refutes the PRC’s attempts to distort history and international rules”.

The motion also stated that “the EU’s ‘one-China’ policy corresponds to UN Resolution 2758, while the PRC’s ‘one-China’ principle is not endorsed by it”.

Beijing sees Taiwan as part of China, to be reunited by force if necessary. Most countries, including the US and all EU members, do not recognise Taiwan as an independent state.

Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons, while European governments have made no military commitments.

The UN resolution in question states that the body would recognise the People’s Republic of China “as the only legitimate representatives of China to the United Nations, and to expel forthwith the representatives of Chiang Kai-shek from the place which they unlawfully occupy at the United Nations and in all the organisations related to it”.

The parliament’s vote is non-binding, meaning it will not change the European Union’s official position. Rather, it is seen as a recommendation from the parliament to the other major policymaking functions, the European Commission and Council, to adjust their positions.

Speaking at a debate on the resolution on Tuesday, the European Commissioner Nicolas Schmit, speaking on behalf of its top diplomat Josep Borrell, reiterated that the bloc would adhere to its one-China policy.

“First, let me recall that the EU maintains our one-China policy, and this means that we recognise the government of the People’s Republic of China as the sole legal government of China,” Schmit said, before saying that it would continue to expand ties with Taipei, short of diplomatic recognition.

“Taiwan is a vibrant democracy. Our cooperation and dialogue with Taiwan are getting more intense … in many ways, the EU and Taiwan are like-minded. In short, we engage with Taiwan in the absence of diplomatic relations,” he said.

The Luxembourger, who is the commissioner for jobs and social rights, said Beijing’s “military activities around Taiwan increase cross-strait tensions”. He urged both parties “to exercise restraint and avoid any actions that may further escalate cross-strait tensions”.

Schmit’s intervention served to demonstrate the distance between the parliament and other EU institutions on Taiwan.

The commission, which has autonomy on trade policy, has declined to meet parliament’s demands to launch negotiations on a bilateral investment agreement with Taipei, which was reiterated in this week’s resolution.

Insiders say such talks could only come about with the resurrection of an investment pact with mainland China, concluded in 2020 but put on the back burner following a clash over human rights sanctions.

At the same time, it is clear that such a move would not gain the requisite backing from the European Council, made up of the bloc’s 27 member states. The council is unable to even add Taiwan to official agendas because it is blocked by countries led by Cyprus.

Nicosia objects to formal discussions about Taiwan due to a dispute with Turkey over Northern Cyprus. Turkish officials more than a decade ago posited a “Taiwan solution” to the territorial dispute that would have given Northern Cyprus admission to such bodies as the World Trade Organization, where Taipei has a seat.

During the parliamentary debate, a string of MEPs took the floor to criticise Beijing’s plans to pursue reunification and its cross-strait military build up. Several lawmakers spoke against the resolution – all of them from the far left or far right of the parliament’s political spectrum.

China dad criticised for not holding school bullies accountable after daughter bled from mouth

https://www.scmp.com/news/people-culture/trending-china/article/3282709/china-dad-criticised-not-holding-school-bullies-accountable-after-daughter-bled-mouth?utm_source=rss_feed

A father in China faced heated online debate after posting a video of his crying daughter, who had been bullied at school, to the point of suffering a bleeding mouth.

Despite his daughter’s distress, the man declared he would not hold the bullies accountable.

The father, from a county in central China’s Shanxi province, shared the emotional video of his six-year-old daughter on his Douyin account, @huodarensheng.

In the video, she expressed her desire to “quit school” after being cornered by a group of classmates. A hospital examination confirmed that she had lost a front tooth.

Reacting with unusual calmness, the father deleted the initial video shortly before posting a follow-up on October 16.

In this new video, he stated that the school and “relevant departments” had promptly addressed the situation, noting that the seven bullies and their parents had apologised to his daughter.

He chose not to hold the school responsible, asserting that “it was mainly the parents who should be accountable for their children’s education”.

Additionally, he decided against seeking compensation from the parents.

While he did not elaborate on his reasoning, he pointed out that his family lived in a small county with just 210,000 residents, implying that making enemies in a relationship-driven society can be unwise.

He also noted that the law does not hold children aged seven to eight criminally responsible, deeming it “meaningless” to pursue the matter further.

In China, the age of criminal responsibility is set at 16 years, with minors over 12 held criminally accountable only for serious offences like intentional homicide or injury, subject to approval by the Supreme People’s Procuratorate.

Neither the school nor the local government has publicly responded to the incident.

The father stated his intention to allow his daughter to continue in the same school and class.

On October 17, he released another video in which he asked his daughter if she wanted to transfer to a different class or school; she firmly replied “no,” expressing her reluctance to attend an “unfamiliar” school.

He remarked that his daughter is “strong-minded and capable of making her own decisions”.

Online observers criticised the father for being “too calm, like a stranger”, and disapproved of his handling of the situation.

One commenter on Douyin stated: “You did not fulfil your responsibility as a father and did not protect your daughter.”

Another added: “Poor girl to have a father who does not stand up for her. The bullies will only target her more if there are no consequences.”

Research conducted by students at Shanghai International Studies University highlighted a significant lack of official statistics on school violence in China.

A 2018 study by researchers at Southwest University found that over half of students in rural areas – which typically experience less economic development and educational resources – reported having experienced bullying.

Many victims have shared online that they still endure trauma from such experiences, often leading to low self-esteem.

However, public legal documents indicate that victims are more inclined to seek compensation for physical injuries while struggling to achieve justice for the mental anguish inflicted by school violence.

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China-Pakistan economic ties could change ‘fundamentally’ if attacks on Chinese continue

https://www.scmp.com/news/china/diplomacy/article/3283625/china-pakistan-economic-ties-could-change-fundamentally-if-attacks-chinese-continue?utm_source=rss_feed

Economic ties between China and Pakistan could slide into a “fundamental change” if attacks on Chinese citizens and investments in the South Asian country continue to grow , according to observers.

While there are signs of more direct Chinese involvement in Pakistan’s counterterrorism efforts since the deadly attack outside Jinnah International Airport in Karachi earlier this month, any help is likely to remain low key, they say.

In the wake of the blast, which killed two Chinese workers, China’s Ministry of State Security called for better early warning systems in areas with significant Chinese interests, as well as better collaboration on intelligence and law enforcement.

The latest attack also led to renewed calls in China for a greater security presence in Pakistan, such as trained personnel to protect Chinese construction projects and workers.

Attacks targeting Chinese citizens and investments in Pakistan have been on the rise in recent years, with seven people killed in two incidents this year alone.

However, a stronger Chinese security presence was unlikely, because of Islamabad’s reluctance to have China too involved in its security systems, the experts said.

When Chinese Premier Li Qiang visited Pakistan in October – less than a fortnight after the airport attack – he brought security pacts for the provision of bulletproof vehicles and firefighting trucks.

However, the previously reported joint security company initiative – which allows China to deploy protective personnel in Pakistan – was not mentioned, according to Pakistan’s English-language newspaper The Express Tribune.

Commenting on the security pact signed during Li’s visit, Chinese foreign ministry spokeswoman Mao Ning said China was “willing to help Pakistan strengthen its counterterrorism capacity” and “create a safe environment for bilateral cooperation”.

Zhu Yongbiao, a professor at Lanzhou University’s school of politics and international relations, warned that China’s investments faced a critical bottleneck as security worsened in Pakistan, particularly in Balochistan province.

“Since the United States withdrew from Afghanistan with the Taliban regime gaining power, Pakistan’s security situation has seen a significant decrease, it is pretty clear,” he said.

“Though the attacks can directly impact on [Chinese investment], the overall investment will not be seriously affected for now. However, if the security situation in [Balochistan] continues to deteriorate, it will definitely have a greater impact on Chinese investment and at some point, there may be a fundamental change.”

Pakistan is one of the most crucial investment destinations for China’s massive Belt and Road Initiative infrastructure scheme.

The China-Pakistan Economic Corridor (CPEC) – a flagship belt and road project – has seen more than US$65 billion in Chinese investment, including the landmark Gwadar Port, which gave China access to the Arabian Sea.

However, China’s growing investment in Balochistan in Pakistan’s southwest, has been branded as exploitation of local resources – especially by the region’s separatist Balochistan Liberation Army (BLA).

According to Lin Minwang, deputy director of Fudan University’s Centre for South Asian Studies, it is “highly possible” that China will seek counterterrorism capacity-building in Pakistan.

“In recent years, there has been no significant reduction in the number of terrorist attacks on Chinese personnel and Chinese projects in Pakistan, which shows that Pakistan saw real capacity deficits and real-life dilemmas in countering terrorism.”

Lin added that China’s experience in counterterrorism might be able to help Pakistan’s response to the situation.

But Abdul Basit, an associate research fellow at the S. Rajaratnam School of International Studies in Singapore’s Nanyang Technological University, said Pakistan would only accommodate Beijing’s security presence within certain limits.

“[Pakistan] won’t allow China to operate outside of the Pakistani security framework … whether [China] are forming their security forces or whether they are from private companies, they will be the inner layer of the security, and Pakistani troops will be the outer layer of security,” he said.

“Whether Chinese [security] people can hold guns and escort Chinese people on the streets … is [that] going to happen? I think that will take a lot of time. That is, I don’t see that happening any time soon.”

China faces multiple obstacles to the deployment of security personnel in Pakistan. Chinese citizens cannot legally carry weapons overseas, especially guns, and most of its companies rely on the local police and military for help.

According to a Nikkei Asia report in September, the joint security companies framework negotiated between the two countries stipulates that Chinese personnel will only “be in the inner cordon for protection of Chinese nationals”.

Basit pointed out that at least three types of agreements had been reached between China and Pakistan: for joint investigations of any attacks, for Chinese training for Pakistani troops in counterterrorism, and for Chinese help “in the form of specialised equipment against terrorists”.

However, it would certainly not be helpful if China’s security presence in Pakistan was high-profile, Basit added.

“If Chinese forces come into Pakistan to protect Chinese nationals, they are likely to become targets instead of truly providing security,” he said, citing China’s limited knowledge of Pakistani culture and society.

Lanzhou University’s Zhu noted that despite the unprecedented controversy between China and Pakistan over security issues, “the impact on cooperation at the governmental level remains modest at the moment”.

“China-Pakistan cooperation is carried out in a very complex environment, so [China] anticipates all kinds of possible difficulties, and it’s the same with other countries, such as African countries,” he said.

According to its consulate in Hong Kong, Pakistan had nearly US$700 million in net Chinese investment last year, up more than 16 per cent compared to 2022. But it was still only about half the level of investment made in 2018.

Lin, from Fudan University, shared Zhu’s assessment and said the large government-to-government cooperative projects were not the most affected.

“The scale of China’s investment in Pakistan over the past few years is not comparable to before, but that has more to do with the fact that construction of the CPEC is now entering a cycle of smaller projects than with the issue of terrorist attacks alone,” Lin said.

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China trans woman beats up man for mocking her then posts video denouncing violence

https://www.scmp.com/news/people-culture/trending-china/article/3283230/china-trans-woman-beats-man-mocking-her-then-posts-video-denouncing-violence?utm_source=rss_feed

A transgender woman in China who beat up a man for insulting her at a restaurant has subsequently issued a video online in which she denounces violence.

Jiang Yan, who was born in Hunan province in southern China, reportedly underwent gender reassignment surgery in November last year.

She is an online beauty influencer who shares fashion outfits with 44,000 followers.

A recent video which is circulating on mainland social media shows Jiang pinning a man to the ground, slapping him repeatedly, and hitting his head with a high-heeled shoe at a Haidilao hotpot restaurant in Hunan.

Jiang said the man had claimed to be a lawyer from Hong Kong. He insulted her, calling people from Hunan “poor and ugly”, and threw food and rubbish at her.

Jiang accused the man of striking her temple multiple times with his phone, prompting her to fight back, adding that she has a background in sports and martial arts training.

She added that the man’s comments were “inciting regional discrimination”, and she felt obliged to defend her hometown’s honour.

“I have become a woman, but if my hometown needs me, I will still stand up and fight for it without hesitation,” she wrote online.

After police intervened, the man apologised, blaming his actions on being drunk and denying any intent to stir up regional discrimination.

Police said the man was not from Hong Kong but was a Hunan-based office worker whose name has not been released.

Some netizens likened Jiang’s actions to Wu Song, a legendary hero in Chinese folklore who killed a tiger with his bare hands to protect others.

One online observer nicknamed Jiang “the real-life female Wu Song”, praising her for “bravely standing up for her hometown’s reputation”.

However, critics argued her response was inappropriate.

“Responding to violence with violence can only bring more injustice and suffering. The right thing to do would have been to gather evidence, call the police, and stay away from the drunk man,” said one online commenter.

On October 18, Jiang went online and said: “We’ve both apologised to each other. I hope people stop calling me the ‘Wu Song’ and stop focusing on this incident.”

She said that she had reflected on her behaviour and condemned violence in any form.

Jiang and the man reportedly plan to issue a public apology to the hotpot restaurant chain and compensate Haidilao for any damage caused.

In China, causing a public disturbance or intentionally harming others can lead to up to five years in prison and fines.

China’s Hesai to keep challenging Pentagon’s blacklist decision

https://www.scmp.com/tech/tech-war/article/3283773/chinas-hesai-keep-challenging-pentagons-blacklist-decision?utm_source=rss_feed

Hesai Group on Thursday said it plans to continue its legal process against the US after the Pentagon reinstated the lidar manufacturer on its blacklist of Chinese firms allegedly working with Beijing’s military.

The US Justice Department said in a court filing last week that the Pentagon removed Hesai from the blacklist, but planned to relist the Chinese company “based on the latest information available”.

Hesai, whose lidars help self-driving cars and driver-assistance systems gain a three-dimensional map of the road, was added to the list by the US Department of Defence in January along with more than a dozen other firms. The company sued the US government in May after it was added to the blacklist.

Hesai’s products are “strictly for commercial and civilian use” and it has no connection “to the Chinese military or any other military body”, the company told Reuters in an emailed statement. The lawsuit was a continuation of the ongoing legal process and the company will continue the proceedings to “correct these mistakes”, it added.

The US Department of Defence declined to comment.

Being placed on the so-called 1260H list represents a warning to US entities and companies about the national security risks of conducting business with them.

The Financial Times first reported the news on Thursday.

Last week, Chinese drone maker DJI sued the US Defence Department for adding it to a list of companies allegedly working with Beijing’s military.

Excavation begins below East China Sea for undersea high-speed railway tunnel

https://www.scmp.com/news/china/science/article/3283727/excavation-begins-below-east-china-sea-undersea-high-speed-railway-tunnel?utm_source=rss_feed

China is a step closer to completing what will be one of the world’s longest undersea high-speed railway tunnels, with excavation work under way on the section below the sea.

The Jintang tunnel will link Ningbo – a city south of Shanghai – with the Zhoushan islands, in the eastern province of Zhejiang.

Excavation work on the undersea segment of the tunnel began on Tuesday and is advancing at a rate of 16 metres (52 feet) a day on average, according to state media.

The tunnel will span 16.18km (10 miles) and is expected to be completed by the end of 2026, with the railway due to be ready for operation by 2028.

Ningbo and Zhoushan are currently connected by a cross-sea bridge and ferries. The 76.4km section of railway that will link them is designed for trains travelling at speeds up to 250km/h. It will cut travel time from 1½ hours by car to just 26 minutes.

The new tunnel will also link Zhoushan with the country’s high-speed railway network, reducing the journey between Zhoushan and Hangzhou from 3½ hours to 77 minutes.

China has built the world’s largest high-speed railway network, with more than 46,000km of railway in operation – accounting for more than 70 per cent of the world’s total, according to state media.

Construction of the Jintang tunnel began in May, with two boring machines working simultaneously from its two ends. They will meet in the middle, beneath the Jintang Waterway in the East China Sea – a transport route for the Ningbo-Zhoushan Port.

Undersea tunnel project director Zhang Jintao told state broadcaster CCTV on Wednesday that there were many technical challenges ahead.

“After officially entering the sea section of the construction, we will face several risks, including crossing navigation channels and anchorages,” Zhang said.

“We will also encounter challenges such as complex and variable geological conditions, difficulties in tunnelling under high water pressure, and the need for high precision over a long-distance excavation.”

The CCTV report emphasised the railway’s benefits for Ningbo and Zhoushan, including speeding up their integration into the Yangtze River Economic Belt.

The Yangtze belt is China’s largest economic zone, sprawling across 11 provinces and municipalities. It covers more than 21 per cent of the country’s land area and accounts for nearly half of its population and total economic output.

Zhoushan sits at the junction of the Yangtze belt and the midpoint of China’s east coast and is seen as a key driver of economic growth – as a hub for river-sea shipping routes including international links that support food, energy and mineral resource security.

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Trump says China’s leader will bully Harris ‘like a baby’ as allies try to infantilize her

https://apnews.com/article/trump-insults-harris-infantilize-baby-sexism-b2ab4c91580d87d843aa3b19f958a6e8Republican presidential nominee former President Donald Trump arrives at a campaign rally at Mullett Arena, Thursday, Oct. 24, 2024, in Tempe, Ariz. (AP Photo/Alex Brandon)

2024-10-24T23:03:36Z

WASHINGTON (AP) — Donald Trump said Thursday that China’s leader would handle Vice President Kamala Harris “like a baby” if she’s elected to the White House, as the former president and his top allies increasingly have moved to infantilize the Democratic nominee.

“If somehow Kamala wins, she’d have to deal with Xi Jinping,” conservative radio host Hugh Hewitt said of the Chinese president. “How would he handle her?”

Trump replied, “Like a baby.”

“He’d take all the candy away very quickly,” Trump continued. “She wouldn’t have any idea what happened. It would be like a grand chess master playing a beginner.”

Trump has built his political career around name-calling, inventing jeers for his opponents going back to his first run for president in 2016, when he slammed Republican primary rivals like “Low Energy” Jeb Bush, the former governor of Florida, and “Little” Marco Rubio, the Florida senator. The former president also has a long history of belittling women.

But Trump has unleashed a special array of personal — often condescending — attacks against Harris, from calling her “lazy” — a word long used to demean Black people in racist terms — to insisting she’s a “stupid person” and asking whether she is “on drugs.” He’s also called Harris, the first woman of color to lead a major-party ticket, “slow” and has accused her of having a “low IQ.”

The latest line of attack, combining sexism and deeply personal jeers with referring to Harris as a child, comes with Election Day now barely a week off. His campaign did not immediately respond to a request for comment about the remarks.

The former president, who has escalated his already dark and inflammatory rhetoric in the race’s final stretch, spoke at a rally later Thursday in Tempe, Arizona, where he criticized Harris’ handling of immigration. He accused Harris of perpetrating “a wicked betrayal of America” and having “orchestrated the most egregious betrayal that any leader in American history has ever inflicted upon our people,” even though crime is down. His campaign was holding an evening event in Las Vegas.

Harris has offered her own share of insults against Trump, calling him “increasingly unhinged and unstable.” During a CNN town hall Wednesday she also called Trump a “fascist.” She was set to join a rally Thursday night in the Atlanta suburbs with former President Barack Obama and musician Bruce Springsteen.

In his Thursday morning interview with Hewitt, Trump said he watched Harris’ town hall on CNN and described her as coming off “like a child, almost.”

“She’s an empty vessel,” Trump said. “But she’s beautifully pushed around by a very smart, very powerful, very liberal, viciously liberal but very, very smart, powerful party called the Democrats.”

Some of Trump’s allies have used similar attack lines. On Wednesday, former Fox News Channel host Tucker Carlson was warming up the crowd at a Trump rally in Georgia when he suggested that Trump was ready to punish the vice president.

“Dad is pissed,” Carlson told the crowd. “And when dad gets home, you know what he says? ‘You’ve been a bad girl. You’ve been a bad little girl, and you’re getting a vigorous spanking right now.’”

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Associated Press reporters Jill Colvin and Jonathan J. Cooper in Tempe, Arizona and Will Weissert in Washington contributed.

DAN MERICA Merica is an investigative reporter in Washington, covering the intersection of politics and artificial intelligence. twitter mailto

Apple iPhone 16 sales in China put it back at No 2 in local smartphone market for Q3

https://www.scmp.com/tech/big-tech/article/3283738/apple-iphone-16-sales-china-put-it-back-no-2-local-smartphone-market-q3?utm_source=rss_feed

Strong iPhone 16 sales in China have returned Apple to the No 2 spot in the local smartphone market in the third quarter, after it had fallen out of the top five in the previous three months, according to the latest data from research firm IDC.

iPhone shipments captured 15.6 per cent of the market in the three months ended September, behind only Vivo at 18.6 per cent, according to IDC on Friday. While Apple’s latest handsets helped it perform better than earlier in the year, its market share was down from 16.1 per cent in the same period last year.

Apple’s smartphone sales fell 0.3 per cent year on year, but initial uptake of the iPhone 16 series, which hit the shelves in September, has largely been on par with the previous generation, according to the report.

Huawei Technologies’ shipments surged 42 per cent in the quarter to take 15.3 per cent of the market, just behind Apple. It marked four consecutive quarters of at least double-digit growth, according to IDC. The US-sanctioned company staged a comeback in the premium handset market last year with an advanced processor produced entirely in China that ignited patriotic fervour at home.

In the June quarter, Apple was pushed to No 6 in China by shipments amid fierce competition with local players, putting it behind Vivo, Huawei, Oppo, Honor and Xiaomi, according to IDC data. It was the first time in years the iPhone maker fell so low in one of its most important markets.

China, the world’s largest smartphone market, has seen handset shipments grow 3.2 per cent to 68.8 million units in the third quarter, marking the fourth consecutive quarter of growth, according to IDC.

“A significant wave of device upgrades is propelling the sustained recovery of the Chinese smartphone market,” Arthur Guo, senior research analyst for IDC China, wrote in the report.

Chinese smartphone vendors Vivo, Huawei and Xiaomi all achieved double-digit year-on-year growth in the third quarter. Vivo remained the leader on the back of strong 21.5 per cent shipment growth, according to IDC.

Xiaomi ranked fourth with 14.8 per cent of the market, as shipments grew 12.8 per cent year on year amid a push in both the budget and premium segments.

Honor, the spin-off brand of Huawei, followed closely in fifth place with 14.6 per cent of the market, although its shipments fell 22.5 per cent in the quarter.

Amid an intensifying rivalry with local players, Apple has been offering promotions for the iPhone 16 in China to boost sales. Before its official release, Chinese online retailers including PDD Holdings’ Pinduoduo and Alibaba Group Holding’s Taobao marketplace had already discounted the latest model. Alibaba owns the South China Morning Post.

Apple offered additional price cuts on online platforms this month as China’s Singles’ Day shopping festival kicked off.

Apple CEO Tim Cook visited mainland China this week for the second time this year, where he met with officials from the Ministry of Industry and Information Technology to discuss topics that included the company’s further development in China and cyber and data security.

The regulator’s announcement about the meeting did not provide any information on when Apple’s new artificial intelligence service for iPhones would be made available in the country. The company has marketed its Apple Intelligence feature as one of the primary selling points of the new iPhones.

Huawei staff arrives at new mega-campus, hub of China’s tech drive

https://www.scmp.com/tech/big-tech/article/3283700/huawei-staff-arrives-new-mega-campus-hub-chinas-tech-drive?utm_source=rss_feed

Huawei Technologies has opened a massive campus in a suburb of Shanghai, which serves as a base to promote innovations for China’s technology self-sufficiency drive, as the company demonstrates its resilience under US sanctions.

The Lianqiu Lake campus, which boasts a floor area more than 10 times larger than that of Alphabet’s Googleplex headquarters in Mountain View, California, is set to house around 35,000 researchers, according to Huawei.

While the first batch of employees arrived on October 14, only two blocks were occupied when the Post paid a visit this week, leaving most of the spacious complex empty.

Some 20,000 employees are expected to arrive around Lunar New Year in February, with the workforce growing to 30,000 by the end of 2026, according to a report from Chinese media outlet The Paper, citing a district official.

Huawei did not respond to an inquiry on when the new centre will be fully staffed.

The 2 million-square-metre (21.5 million-square-foot) research and development centre is set to play an important role for Huawei – which already has campuses in Dongguan and Shenzhen in southern Guangdong province – as well as for China, which is pushing for breakthroughs in chips and other areas.

Shanghai HiSilicon Technologies, Huawei’s semiconductor arm, is registered in Shanghai’s Qingpu district, home to the new campus.

The campus, over 70 kilometres (43 miles) from Huawei’s existing base in Shanghai’s Pudong district, completed construction in June. It includes eight blocks of buildings painted in muted shades of brown and beige, as well as various amenities, including dining halls and fitness centres. Shuttle buses, electric bicycles and trams provide transport across the sprawling 160-hectare (395-acre) complex, studded with lakes and bridges.

In a show of official support, Qingpu authorities have launched several new bus routes for Huawei staff, and a nearby subway station is under construction.

In a company meeting in 2021, Huawei founder Ren Zhengfei described the campus as a scenic and appealing workplace, and a magnet for top talent, such as foreign scientists. “It’s ideal for modern young professionals,” he was quoted as saying by state broadcaster China Central Television.

The influx of tech workers in Qingpu has sharply raised rents and property prices near the Huawei campus, bucking a nationwide downturn in the real estate market. Monthly rents for a three-bedroom flat in the closest residential block exceed 6,000 yuan (US$841), nearly double the rate a year ago.

Huawei has emerged as a champion of China’s self-reliance drive, aimed at reducing dependence on foreign technology. The company is a leading provider of home-grown alternatives to Nvidia’s artificial intelligence processors, such as the Ascend 910B, which Huawei claims is on a par with Nvidia’s A100 chip. Huawei has been testing the next-generation 910C and sending them to major Chinese clients.

Last year, Huawei made a surprise comeback in the 5G smartphone market with its Mate 60 series, equipped with advanced chips.

On Tuesday, the company launched the latest version of its self-developed mobile operating system, HarmonyOS. At the event, Richard Yu Chengdong, chairman of Huawei’s consumer business group, said that sales of the firm’s flagship handsets surged 71 per cent year on year in the first three quarters.

North Korean forces in Ukraine would put China in a tight spot: analysts

https://www.scmp.com/news/china/diplomacy/article/3283672/north-korean-forces-ukraine-would-put-china-tight-spot-analysts?utm_source=rss_feed

The reported involvement of North Korean troops in Russia’s war against Ukraine would put China in a tight spot and could also lead to closer cooperation between the Nato countries and Northeast Asia, analysts said.

Kyiv and Seoul have accused Pyongyang of allocating more than 12,000 troops – including 3,000 already in Russia – to support the Russian war effort, a claim supported by the United States on Wednesday.

US Defence Secretary Lloyd Austin said there was evidence to support the claim that North Korean forces were in Russia, but added that it remained to be seen what role, if any, they would play in the war.

“If they are cobelligerents, [if] their intention is to participate in this war on Russia’s behalf, that is a very, very serious issue,” Austin said.

Satellite imagery suggests that hundreds of North Korean troops left Chongjin port in the country’s northeast and are assembled and training in Ussuriysk and Khabarovsk in the Russian Far East.

According to defence officials in Seoul and Kyiv, North Korean military officers and engineers are already in Ukraine and helping the Russians use North Korea’s ballistic missiles. Some had been killed in battle, the officials said.

At the UN General Assembly on Monday, North Korea dismissed the accusations as “groundless rumours”, claiming its relations with Moscow were “legitimate and cooperative”. The Kremlin called the reports “contradictory”.

SK-Korea Foundation chair of Korea studies Andrew Yeo, at Washington-based think tank the Brookings Institution, said US confirmation of North Korean troops in Russia “removes any lingering doubt about the veracity of this news”.

According to Yeo, the deployment would be the first combat experience in decades for Pyongyang’s military, something it has lacked since the end of the Korean war. “It’s an opportunity for their soldiers to gain some experience … see how their weapons [and] missiles are being deployed, and how they fare in battle,” he said.

Analysts said the deployment signalled Moscow’s increasing influence over Pyongyang, after months of growing security ties. A possible arms deal has been in the air since North Korean leader Kim Jong-un’s trip to the Russian Far East last September.

Kim’s visit included a meeting with Russian President Vladimir Putin as well as a tour of Russian aerospace and weapons facilities. It was followed by Putin’s trip to Pyongyang in June, when the two sides signed a comprehensive strategic partnership pact to come to each other’s aid in times of attack.

Sydney Seiler, a Korea Chair senior adviser at Washington-based think tank the Centre for Strategic and International Studies, said the sending of North Korean troops to Russia “reflects the benefits both sides hope to obtain” from the June treaty.

“Moscow’s goal is pragmatic and symbolic, hoping to supplement weakened forces on the ground with any help it can find,” said Seiler, a former US national intelligence officer for North Korea.

“Kim Jong-un, meanwhile, likely hopes to obtain some tangible benefits from Russia by dispatching Korean People’s Army soldiers.”

Cho Han-bum, a senior research fellow at the Korea Institute for National Unification in Seoul, described the deployment as an “action that crosses China’s red line”, because closer Pyongyang-Moscow ties could weaken Beijing’s influence on North Korea.

“Their ‘forbidden mischiefs’ are raising international suspicions of authoritarian solidarity between North Korea, China, and Russia, which is likely to lead to global anti-China sentiment,” Cho said.

“[It] will not only harm China’s economy but also lower its international standing. So China will be in a very displeased and uneasy state.”

Cho noted that the June treaty allowed Russia to intervene militarily in North Korea, violating China’s strategic interests and worsening relations between Beijing and Pyongyang.

Sending troops would further damage those relations.

“North Korea will also try to reduce its dependence on China,” he said.

Shi Yinhong, professor of international relations at Renmin University of China, said it was “obvious” that Beijing had been “quite uneasy and potentially angry” towards the Russia-North Korea military alliance.

“It’s also obvious that [Beijing] has not taken any public words and deeds to warn or even entreat Pyongyang, in spite of its very dangerous actions in the [Korean] peninsula and now over the battlefield in Europe,” he said.

According to Shi, concerns about “losing an ‘ally’ and annoying another strategic partner” may be leaving China “unable to substantially oppose actions which threaten not only China’s vital interest but also those of [North Korea and Russia]”.

Beijing, which has not condemned Russia’s invasion of Ukraine in 2022, has been involved in peace mediation efforts, which have yet to bear fruit. However, North Korea’s support for the Russian war effort has driven Beijing’s relations with Pyongyang into a stalemate.

In contrast to the recent exchange of visits between Putin and Kim, Chinese President Xi Jinping has held no meetings with the North Korean leader since June 2019.

Responding to the reports on Monday, China’s foreign ministry said Beijing’s position on the Ukrainian crisis was “consistent and clear”. China hoped that “all parties will promote easing of the situation and commit to a political solution”.

Ramon Pacheco Pardo, an international relations professor at King’s College London, said Beijing would “not welcome” the dispatch of North Korean troops to the Russian battlefield, but added “there is little that China can do”.

“As long as Russia’s aggression of Ukraine continues, Moscow will have Pyongyang’s back, and Beijing will be secondary to the Kim regime’s short-term needs,” he said.

“Once the war is over, the relationship between North Korea and its two neighbours will depend on the type of Russia that we have … If Putin continues to be Russia’s leader, I assume that Russo-North Korean ties will continue to be closer than Sino-North Korean ties.”

Seiler said that Pyongyang’s growing relationship with Moscow “comes at the expense of Beijing’s influence and leverage over Kim”. Russia could “empower and encourage” Kim to destabilise the region, “while showing no concern about blowback” from China.

“The very lack of leverage points to the difficulty Beijing is likely to have in discouraging Pyongyang or Moscow away from dangerous behaviour,” he said.

“The bar continues to move higher for Beijing to be able to credibly convince the outside that it is not aligned with Moscow regarding its actions in Ukraine.”

Seiler added that Russia’s support of military technology to North Korea would be likely to enable Pyongyang’s more aggressive actions targeting South Korea.

“With the risk of military escalation in Northeast Asia growing, Beijing may seek to determine how to exploit this tension in support of its own strategic goals vis-a-vis Taiwan,” he said.

“In other words, in regard to [North Korean] misbehaviour, ‘If we cannot stop it, how can we exploit it’ is a possible approach Beijing might consider.”

Meanwhile, the deployment of North Korean troops in Ukraine “only strengthens the rationale” for tightened cooperation between South Korea, the US and Japan, according to Yeo.

“[North Korea] have short-range ballistic missiles that are being used against Ukrainians … if they’re fitted with a nuclear warhead, [they] could be used on South Korea,” he said.

“So it’s certainly a security concern for the South Koreans, and it comes at a time where we’ve seen in the past couple of weeks, inter-Korean relations [have] deteriorated even further,” Yeo added.

“Assuming Russia will be increasing support for North Korea in return for North Korean troops, the ROK [Republic of Korea], US, and Japan will need to be vigilant for increased shipments of arms, weapons, and fuel to North Korea from Russia and possibly other countries.”

Cho echoed the view and said that with the deployment of the North Korean military, Europe and Asia-Pacific were “connected into a single security terrain”.

“It is unclear whether there will be an Asian version of Nato, but security cooperation between Nato and northeast Asia and the Korean peninsula will be strengthened, and security cooperation between South Korea, the US, and Japan will also gain momentum,” Cho said.

“Russia-North Korea military cooperation not only affects Russia, but also influences North Korea’s military build-up, which means increased security threats to the Korean peninsula and Northeast Asia.”

An official from South Korea’s presidential office said Seoul was preparing diplomatic, economic and military responses to various scenarios of military cooperation between Pyongyang and Moscow – including providing Ukraine with lethal weapons if the situation worsened.

US issues AI national security memo to cut risks and avoid ‘strategic surprise’ by China

https://www.scmp.com/news/china/diplomacy/article/3283702/us-unveil-ai-national-security-memo-avoid-chinas-strategic-surprise-and-cut-risks?utm_source=rss_feed

US President Joe Biden has signed a national security memorandum to guide US military and intelligence agencies on the risks of AI and its responsible use, with the aim of improving America’s edge against rivals such as China while minimising associated dangers.

“This is our nation’s first ever strategy for harnessing the power and managing the risks of AI to advance our national security,” National Security Adviser Jake Sullivan announced at the National Defense University in Washington on Thursday.

“We know that China is building its own technological ecosystem with digital infrastructure that won’t protect sensitive data that can enable can enable mass surveillance and censorship that can spread misinformation, and that can make countries vulnerable to coercion,” he said.

He warned that the US has “to compete, to provide a more attractive path, ideally before countries go too far down an untrusted road from which it can be expensive and difficult to return”.

Sullivan said the US government was “fully capable of managing this healthy tension, as long as we’re honest and clear-eyed about it, and we have to get this right, because there is probably no other technology that will be more critical to our national security in the years ahead”.

The memorandum, issued on Thursday, encourages the use of artificial intelligence systems while setting restrictions. It bans the use of AI to unlawfully suppress free speech or legal counsel, and in important decisions about nuclear weapons and military action.

The memo also addresses how the US can work with allies on this framework to protect national security, and will include a classified section on dealing with threats from adversaries.

Sullivan highlighted recent US-China engagement on the issue and said Washington was “willing to engage in dialogue” with China and others “to better understand risks and counter misperceptions”.

During talks in November 2023, Biden and Chinese leader Xi Jinping agreed to a dialogue on AI risk and safety. In May, American AI experts met with Chinese officials in Geneva to discuss the issue, with Sullivan calling it “a candid and constructive initial conversation”.

In Beijing in February, China and Russia pledged to better coordinate on military AI use. In March, the US sponsored the first UN General Assembly Resolution on AI, which passed unanimously and included China as a co-sponsor.

However, Sullivan emphasised that “those meetings do not diminish our deep concerns about the ways” in which China “continues to use AI to repress its population, spread misinformation and undermine the security of the United States and our allies and partners”.

“AI should be used to unleash possibilities and empower people, and nations around the world, especially developing economies, want to know how to do that. They don’t want to be left behind, and we don’t want that either,” he said.

According to the White House, the memo issues on Thursday designates monitoring US competitors’ actions against the country’s AI sector “a top-tier intelligence priority”, directing government entities to provide AI developers “with the timely cybersecurity and counter-intelligence information necessary to keep their inventions secure”.

The document also calls for steps to improve the security and diversity of chip supply chains as the US develops the next generation of government supercomputers and other advanced technologies.

During a background briefing on Wednesday, a senior official stressed that if national security agencies did not adopt AI technologies in “ways that align with our values”, the US would be at “risk of a strategic surprise by our rivals, such as China”.

The official noted that countries such as China were modernising their military and intelligence capabilities through AI, making it “particularly imperative that we accelerate our national security community’s adoption and use of cutting-edge AI capabilities to maintain our competitive edge”.

The US-China tech rivalry has intensified, with Washington subsidising billions of dollars to America’s semiconductor industry and strengthening measures targeting China’s hi-tech sector, an area that it says could advance the People’s Liberation Army and pose national security threats.

Apart from a chip ban, the Biden administration is rolling out export controls and investment bans relating to AI while weighing further actions to curb Chinese access to large language models that could help Beijing develop an AI system like ChatGPT.

It has also urged allies to impose semiconductor export controls and launched a minerals security network in an attempt to cut China off from the tech supply chain.

China has made hi-tech manufacturing and innovation a top priority, as well as figuring out ways to get around US restrictions.

Huawei has led a chip breakthrough for the country, and Sullivan said American companies were going “head to head” with the Chinese tech giant. Beijing has also retaliated with export controls against the US and its allies on minerals needed for chip manufacturing.

The new memo could have a big effect on cloud service providers and frontier model developers. It builds on Biden’s October 2023 executive order that requires creators of cutting-edge AI systems to share details of their testing and training with the US government.

The memo includes steps to ensure lethal autonomous weapons will be “used responsibly” and highlights “prohibited use cases” such as those that “unlawfully suppress rights or remove humans from critical decision-making processes”.

Both the US and China have taken steps to expand their role in the global regulation of AI, particularly regarding its military use.

Washington issued a political declaration last year to establish a legal and diplomatic framework for responsible military use of AI and autonomy, which the administration official said has been endorsed by around 60 nations.

But China and Russia have not signed on to the plan, and Beijing is pushing for the United Nations to take a role in AI’s global governance.

China announced its first Global AI Governance Initiative last year, calling on major powers to take “a prudent and responsible attitude” towards the military use of AI technologies. It also voiced support for a legal ban on lethal autonomous weapons systems.

Number of Chinese migrants at US-Mexico border drops to lowest count of the year

https://www.scmp.com/news/china/article/3283762/number-chinese-migrants-us-southern-border-drops-lowest-count-year?utm_source=rss_feed

The number of Chinese migrants trying to cross the US southern border illegally has fallen to its lowest monthly count this year, three months after US President Joe Biden imposed significant restrictions on the processing of asylum claims.

According to the US Customs and Border Protection, authorities detained or found inadmissible 1,326 Chinese migrants along the border in September, a 40 per cent decline from the 2,198 recorded in June. The number of Chinese migrants attempting to enter the US without proper documentation had reached a three-year peak of 5,980 in December.

In June, Biden signed an executive order that prevents migrants from seeking asylum along the US-Mexico border once the seven-day average for daily illegal crossings reaches 2,500. The border would reopen only after the figure falls to 1,500 for seven consecutive days and remains that way for two weeks.

Overall migrant encounters with authorities have dropped since. “Encounters” refer to either when individuals seek admission at ports of entry but are found to be inadmissible, or when individuals are found between ports of entry and are detained.

In September, authorities encountered a total of 101,790 migrants, largely from Latin America, at the southern border – the lowest monthly figure recorded this year. Since the beginning of the year, there were over 1.3 million such encounters.

The Biden administration has faced increasing pressure to handle the influx of migrants crossing illegally into the US in an election year where immigration is a key issue.

The Department of Homeland Security said it had operated nearly 400 repatriation flights from June to August to more than 140 countries, including China.

Last week, the DHS said that a large repatriation flight had departed for China, the second since July, with 131 Chinese nationals aboard.

Washington had Beijing of being uncooperative in repatriating its nationals, but recent signs point to increased coordination. The DHS said the two flights were arranged in collaboration with China’s National Immigration Administration.

In recent years, Chinese had been the fastest growing group to cross illegally into the US from the southern border. Since China began lifting its strict zero-Covid controls in December 2022, loosening travel restrictions, US authorities encountered more than 56,000 Chinese nationals along the US-Mexico border.

From January to September this year, there were over 23,000 encounters with Chinese nationals. But monthly figures have been gradually decreasing since May.

Chinese nationals seeking to come to the US face barriers elsewhere as well. In July, Ecuador suspended its visa-free programme for Chinese travellers. Before that policy change, many Chinese migrants had flown to Ecuador before making the trek up Latin America to the US-Mexico border.

In August, in a bid to stem US-bound migration, Panama’s government announced flights for several countries including China.

Republican presidential nominee Donald Trump has claimed that China is sending an “army” of “fighting-age” migrants and has threatened to impose tariffs on countries that do not accept deported migrants.

Chinese investment banks turn inward as global dreams fade from view

https://www.scmp.com/economy/china-economy/article/3283690/chinese-investment-banks-turn-inward-global-dreams-fade-view?utm_source=rss_feed

The former head of investment banking at Haitong Securities, Jiang Chengjun, was in handcuffs in late August as police led him from a plane at an undisclosed airport on his return to China to face allegations of “work-related” crimes.

Photos of his high-profile arrest were splashed across media outlets and social media platforms in mainland China, with the investment banker’s precipitous fall standing in stark contrast to the high-flying international ambitions of the country’s financial institutions.

Haitong is one of China’s top five brokerages, but the delisting of its Hong Kong unit, Haitong International, in January highlighted the challenges mainland financial institutions face as they aspire to expand overseas and take on Wall Street.

Analysts say overreliance on their mainland parents, lack of sufficient compliance and innovation in their products, relatively small scale and a tough environment – including weak deal-making activities and fierce competition in Hong Kong in recent years – have all contributed to the dimming of their dreams of becoming leading players in the global market.

Haitong International, once dubbed the “King of Hong Kong IPOs” by local media, has been weighed down by heavy losses in volatile markets in recent years.

Its profit plummeted by 84.6 per cent last year to 1.01 billion yuan (US$142.79 million), and it was delisted from the Hong Kong stock exchange in January, ending a 14-year presence.

“Unfortunately, Chinese securities firms are fighting for domestic survival as the future of China’s securities markets is in doubt, so their global prospects and challenges are things of the least importance to them,” said Chen Zhiwu, chair professor of finance at the University of Hong Kong.

In the first half of this year, the revenue of the mainland’s 147 registered securities companies totalled 203.316 billion yuan, a year-on-year decrease of 9.44 per cent, with net profits of 79.99 billion yuan, down 5.95 per cent, according to data from the China Securities Association published in September.

Brokers’ business picked up in late September after Beijing unveiled a stimulus package that included 800 billion yuan worth of new funding tools for buying stocks and a pledge of more monetary easing in an effort to boost the slowing mainland economy, which has been beset by a simmering housing crisis, trade tensions and low consumer confidence.

In the week following the introduction of the new policies by the People’s Bank of China, the benchmark CSI 300 Index, which tracks the top stocks on the Shanghai and Shenzhen exchanges, recorded its biggest advance in years, as did Hong Kong’s Hang Seng Index. Even after weeks of volatile trading, as of Thursday – exactly one month since the initial volley of stimulus announcements – the CSI 300 was up 22.29 per cent.

Analysts said there are few options for brokers looking for long-term boosts to their profitability, noting that there are more fundamental challenges faced by Chinese financial institutions.

At the central financial work conference in November, President Xi Jinping envisioned China becoming a “financial superpower” with a strong currency, central bank, regulation and talent pool. According to an official summary of the meeting, mainland financial institutions will play a key role in achieving that ambition.

At a study session in January, Xi called for Chinese and overseas markets to become more connected, while stressing that “the opening of the domestic financial industry should be carefully managed”.

He added that the development of China’s financial sector will be “distinct from Western models”, with an emphasis on support for the real economy.

Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, said mainland financial institutions have little exposure in overseas markets, and expanding their capital base would prove challenging.

“Financial firms such as brokers need to generate revenue to fund their overseas expansion,” Zhang said.

“Relying on the domestic market to cross-subsidise the overseas expansion may prompt questions of sustainability. And servicing local clients in overseas markets is not easy, as competition is fierce.”

According to a summary released after the study session in January, Xi said that preventing and defusing “financial risks” needs to remain the Chinese government’s “eternal theme” as it plots the future of the world’s second-largest economy.

While introducing policies to boost the funds available to financial institutions, Beijing has also tightened controls in an effort to stamp out unlawful practices.

Following the appointment of Wu Qing – dubbed China’s “broker butcher” for his track record of shutting down errant brokerages – as head of the China Securities Regulatory Commission in February, a list of drastic measures has been unveiled, including imposing stricter rules for new stock offerings, cracking down on fraudulent deals, and tightening oversight of high-frequency trading.

Bloomberg reported in July that some Hong Kong-based executives and former employees at financial institutions including China Everbright Group and China Huarong International Holdings had been asked to pay back part of their bonuses.

That followed earlier reports that state-owned financial conglomerates had placed caps on the pay of mainland-based employees.

Chen at the University of Hong Kong said the industry is experiencing an overall tightening of Beijing’s grip as it undergoes “fundamental adjustments and reorientation”.

“Given China’s current institutional set-up and policy positions, its financial sector will, in a few years, return to a state dominated by state-owned commercial banks and insurance companies, with little role played by the capital markets,” he said.

But China still has international financial ambitions, with its securities regulator saying in March that it aimed to develop about 10 leading financial institutions in around five years, and form two to three market-leading and internationally competitive investment banks or other financial institutions by 2035.

Mergers are one of the preferred ways of building such heavyweights.

On September 5, Guotai Junan announced plans to merge with Haitong Securities, with the Shanghai authorities believed to have played a role in orchestrating the move.

State media and some financial analysts hailed the proposed merger as a step towards creating a mega-sized firm that would fit in with Beijing’s goal of building world-class investment banks. The merged entity would have combined assets of 1.619 trillion yuan, surpassing current mainland market leader Citic Securities’ 1.495 trillion yuan.

“The merger between Guotai Junan Securities and Haitong Securities aims to consolidate resources, reduce fragmentation, and enhance competitive positioning both domestically and internationally,” said Rowena Chang, director of Asia-Pacific nonbank financial institution ratings at Fitch Ratings.

“In terms of global competitiveness, scale benefits are crucial.”

She said the high level of market fragmentation remained a challenge in China, because it created “intense competition within the sector”.

Wilson Chan Fung-cheung, a long-time Hong Kong banker who is now associate director of the MBA programme at City University of Hong Kong, said market consolidation has been a global phenomenon over the past decade.

“The vast emergence of a number of financial institutions, not just in China but around the world, makes it more competitive for financial institutions to survive as profit margins continue to drop,” Chan said. “So it’s just natural for mergers and market consolidation to happen.”

In the case of the proposed merger between Guotai Junan and Haitong, analysts say challenges remain because the new entity – with assets of around US$229 billion – would still be dwarfed by the world’s two leading investment banks, which are both based in the United States.

Goldman Sachs had assets of US$1.64 trillion at the end of last year, and Morgan Stanley more than US$1 trillion.

However, Pinpoint’s Zhang said there could be more opportunities because more listed Chinese companies are interested in expanding their businesses abroad nowadays, which gave financial firms incentives to follow their clients to overseas markets.

Chan said the internationalisation of mainland financial institutions is likely to involve establishing footholds in emerging markets, deviating from the traditional view that the only way to internationalise is going through Western markets, mostly in the US.

“Top banks in China are already expanding their market in emerging markets,” he said.

“Because if they continue to focus on the US market, they will only face hurdles and will not gain a proportional profit from their efforts.”

Chan said US sanctions do not make such grinding effort worthwhile.

“And when China’s trade with Asean countries has already surpassed that with the US and Europe, why wouldn’t banks and financial institutions follow that direction?” he asked, instead of battling huge roadblocks elsewhere.

Chan said Hong Kong will continue to occupy a key position for mainland financial institutions in emerging markets.

“Bank of China’s branches in Southeast Asia are all reporting to Hong Kong instead of the mainland headquarters,” he said.

But Chen at the University of Hong Kong said he was more concerned about Hong Kong’s role in the global financial industry.

Hong Kong would still be the main capital markets centre for China, he said, but political and economic changes in the past few years had led to a diminished presence of North American and West European financial institutions and individual investors, who used to play large roles in liquidity provision and pricing for the city’s financial markets, which in turn had made it an attractive hub for mainland financial institutions.

“It would be difficult for Hong Kong to regain its old glory in the global financial landscape,” Chen said.