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• Apple reports robust demand for iPhone 16 even as overall sales in China slow
• Chinese smartphone brands beat Apple to the AI punch at home
• From Zhu Rongji to Wang Qishan, reins pass at a back channel of Chinese diplomacy
• China investigation of drug firm exec deals latest blow to foreign business confidence
• China’s central bank holds steady with 200 billion yuan net bond purchase
• China’s eastern Zhejiang province rolls out platform to grow cross-border e-commerce
• China outlook murky for executives as companies plan for Trump tariff blitz
• Chinese navy holds first dual aircraft carrier drills in South China Sea
• Philippine coastguard hailed as ‘vigilant stewards’ against China - but why no new ships?
• EU to investigate China’s Temu over suspected illegal products and ‘addictive’ platform
• Philippines’ probe on land-owning Chinese with fake citizenship stirs security fears
• 2 separately married China parents meet in kids’ class chat group, abandon families, elope
• China takes aim at energy replacement with plan to rely on renewables, reduce coal use
• India and China troop disengagement ‘almost complete’ after historic border pact
• China voices support for Nasa over botched Boeing Starliner space mission
• South China Sea: how does Philippines’ coastguard measure up against others?
• Why the year AD1 was also a new era for ancient China
• Beijing to Chinese EV makers: think twice about investing in tariff-backing EU countries
• Will China replace India and Japan as Asia’s new investment darling?
• EU investments in China soar to new quarterly record of US$3.9 billion
• Assault vessel? Research ship? Both? Mystery of new Chinese ship caught on satellite
• China’s factory activity returns to growth, ends 5 months of contraction
• China floats wave, wind and solar power plan for South China Sea outposts
• Chinese AI unicorn MiniMax scores big in US with Talkie chatbot entertainment app
• Leading human rights lawyer Xu Zhiyong on hunger strike in Chinese prison, family says
• China’s finance sector comes to grips with new normal in year since landmark conference
• Chinese student in Michigan arrested for trying to vote in 2024 US presidential election
• AstraZeneca’s China president under ‘ongoing investigation’, company says
• US sanctions China and India suppliers of Russia’s war machine in Ukraine
• Biden’s Middle East failures leave door open for Chinese advances
• Trump or Harris? Why China-born scientists fear US shadow of suspicion will persist

Apple reports robust demand for iPhone 16 even as overall sales in China slow

https://www.theguardian.com/technology/2024/oct/31/apple-quarterly-earnings-iphone-16-china

Apple reported strong demand for the iPhone 16 in its quarterly earnings report on Thursday, though sales in China slightly decreased year-over-year. The company reported $94.9bn in revenue, up 6% year-over-year, and $1.64 in earnings per share (EPS). The company’s earnings slightly beat Wall Street projections of $94.4bn in sales and an EPS of $1.60.

The company saw $46.2bn in revenue from iPhone sales, up from $43.8bn year-over-year. Fourth-quarter revenue from its services division, which include subscriptions, increased from $22.31bn to $24.97bn year-over-year.

The earnings report is the first look at demand for the iPhone 16, which Apple released days before the end of the fourth quarter. The launch of the latest iPhone was expected to be a boon for Apple in China and could enable it to claw back market share, according to an analysis by market intelligence firm International Data Corporation. Due to tight competition from players such as Huawei and Xiaomi, the company had fallen to sixth place among smartphone sellers last quarter.

In a statement, CEO Tim Cook touted the release of the company’s “best products yet”, which included Apple Intelligence in addition to the iPhone 16.

“And this week, we released our first set of features for Apple Intelligence, which sets a new standard for privacy in AI and supercharges our lineup heading into the holiday season,” Cook said in a statement.

Apple has struggled with flagging demand for its other devices over the past year. Sales of its wearable devices such as the Apple Watch and Airpods have declined for four straight quarters. Sales of the Vision Pro headset, Apple’s first new hardware product in the better part of a decade, have also failed to take off.

In addition to the latest on iPhone 16 demand, investors will be looking for the company’s updates on the slow roll out of its suite of AI features, called Apple Intelligence, which is included in the latest version of Apple’s iPhone operating system. Cook has defended the company’s decision to take its time releasing a competitor to Google’s Gemini, OpenAI’s ChatGPT and Meta AI. In an interview with the Wall Street Journal, he said the company wanted to focus on creating the best AI assistant, not the first.

“We weren’t the first to do intelligence,” he said. “But we’ve done it in a way that we think is the best for the customer.”

The bare-bones version of Apple Intelligence, which some users got a hold of in a limited release, has had some trouble on the intelligence front. The AI feature has woefully misinterpreted news alerts and shared inaccurate summaries, according to several examples users have shared on social media.

The company has not rolled out the feature in important markets such as Europe and China, where it still faces steep competition. Apple has also faced some pressure in other parts of Asia. Indonesia banned iPhone 16 sales after the government said the company failed to come through on its promise to invest more in the local economy.

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Chinese smartphone brands beat Apple to the AI punch at home

https://www.scmp.com/tech/tech-trends/article/3284663/chinese-smartphone-brands-beat-apple-ai-punch-home?utm_source=rss_feed

Chinese smartphone makers from Honor to Xiaomi are flexing their muscles in on-device artificial-intelligence (AI) software, trying to get a head start in their home market before Apple launches its own competing system there.

Honor, a spin-off from Huawei Technologies, on Wednesday debuted its self-developed AI agent Yoyo on its new flagship Magic 7 series handsets. The tool is designed to help users complete tasks on their smartphones with simple voice commands.

At the launch event, Honor CEO George Zhao Ming demonstrated the feature by asking his Magic 7 handset to “order something to drink for 2,000 people”. Without Zhao touching the screen, the AI agent automatically placed an order based on his past purchase preferences.

The Magic 7 will be the first smartphone that allows Chinese consumers to experience an AI agent similar to Apple Intelligence, the iPhone’s on-device AI system, Zhao had said earlier. The US tech giant is still working with mainland authorities to clear the regulatory hurdles needed to bring its new AI features to the country.

Xiaomi, China’s third bestselling smartphone brand, also compared its HyperAI system to Apple Intelligence. At a launch event on Tuesday, the company said its new Xiaomi 15 handset series “comprehensively surpasses” the iPhone 16 Pro in AI capabilities, offering writing assistance, real-time transcription and translation.

With Apple Intelligence still unavailable on the mainland, Chinese handset makers have been racing to roll out AI functions on their devices.

While consumers in the world’s largest smartphone market still consider generative AI (GenAI) a “nice-to-have” feature, it is important for manufacturers to make a mark, said Will Wong, senior research manager for client devices at IDC Asia-Pacific.

“GenAI technology still significantly influences consumer perception of a brand as a tech leader, or its ability to offer the most advanced products,” he said. “Consequently, brands are eager to stay competitive in the GenAI race.”

Whether Chinese players can sustain their first-mover advantage on the mainland will depend on how quickly Apple can bring some of its unique features to the market, according to Wong.

Apple released its AI service as part of the iOS 18.1 update on Monday, but the feature has been disabled for devices purchased in mainland China, the company said. Apple has said that the Chinese-language version of its AI features will be introduced in April, without specifying when it will be accessible to mainland users.

Even though Chinese brands may have an early advantage, “constructing an AI ecosystem is a long-term endeavour”, said Lucas Zhong, analyst at consultancy Canalys.

“Apple’s integrated ecosystem and its unified environment are expected to sustain its AI competitiveness in the long run,” he said.

From Zhu Rongji to Wang Qishan, reins pass at a back channel of Chinese diplomacy

https://www.scmp.com/news/china/politics/article/3284682/chinas-key-track-15-diplomacy-channel-sees-reins-pass-zhu-rongji-wang-qishan?utm_source=rss_feed

Former Chinese vice-president Wang Qishan has replaced ex-premier Zhu Rongji as honorary chairman of a high-profile multinational academic board that serves as a key “track 1.5” diplomacy channel for Beijing.

The advisory board of the Tsinghua University school of economics and management was founded by Zhu in the year 2000 to be a platform for dialogue among the world’s business titans, leading academics and Chinese officials.

Tsinghua University president Li Luming conveyed a message of regards from Zhu when the board met for its annual meeting in Beijing last Friday.

“Tsinghua will continue to be open-minded and spare no effort to nurture high-quality innovation talent to cope with new challenges and the complicated [international] situation,” Li said, according to a statement posted on the university’s social media account on Thursday.

The notice referred to Wang as honorary chairman of the advisory board and Zhu as the “founding honorary chairman”.

Zhu, China’s “economic tsar” and premier from 1998 to 2003, graduated from Tsinghua with a degree in electrical engineering in 1951.

In 1984, he was named founding dean of the Tsinghua University school of economics and management, a position he held for 17 years.

About a third of the advisory board’s 64 members, including 18 from overseas, attended last week’s meeting.

They included Apple CEO Tim Cook, who became chairman of the board in 2019. Apple would like to seize opportunities in China’s economic development and expand investments in the country, the Tsinghua statement quoted him as saying.

Other attendees included Raymond Dalio, founder of asset management firm Bridgewater Associates, Richard Li Tzar-kai, chairman of Hong Kong’s private investment group Pacific Century, and executives from international giants such as Shell, Walmart, Blackstone and Budweiser, as well as Singapore’s sovereign wealth fund Temasek.

Ding Xuexiang, China’s top-ranking vice-premier, met board representatives before Friday’s meeting and assured them of China’s firm support for economic globalisation as well as an open-door policy.

The assurances come as investor confidence in China runs low amid slow economic recovery and perceived erosion of the ease of doing business.

Wang hosted a dinner for board members the same day at Beijing’s Diaoyutai State Guesthouse, where Chinese leaders regularly receive foreign heads of state and government.

Senior Chinese officials present included foreign vice-minister Ma Zhaoxu and former central bank governor Zhou Xiaochuan.

Wang, 76, is an influential member of the Communist Party and a seasoned financial expert who was deputy governor of China’s central bank in the 1990s and later served as a vice-premier.

Long seen as a right-hand man to President Xi Jinping, Wang oversaw Xi’s sweeping anti-corruption campaign launched in late 2012. He became vice-president of China in 2018 and retired from politics in 2023.

Zhu, 96, has rarely been seen at public events since retiring in 2003.

He was absent from the National Day banquet hosted by Xi on the eve of the 75th anniversary of the People’s Republic on October 1. Senior party officials and cadres and retired leaders usually attend the event if their health allows.

In an open letter to the board in 2019, Zhu, then 91, explained that he would not attend the annual meeting due to “health reasons”. He has not attended any of the meetings since.

In his letter, he underscored the importance of the board as “an important bridge” for communication between China and the world. The top leadership always attached great importance to the meeting, he said, noting that Xi had met some representatives in 2013 and 2017.

China investigation of drug firm exec deals latest blow to foreign business confidence

https://www.scmp.com/news/china/politics/article/3284686/china-investigation-drug-firm-exec-deals-latest-blow-foreign-business-confidence?utm_source=rss_feed

An investigation of a top China executive from British-Swedish company AstraZeneca – and the lack of transparency surrounding the case – is set to deal another blow to foreign business confidence in the country, according to observers.

AstraZeneca, the largest foreign pharmaceutical company in China, said on Wednesday that its China president, Leon Wang, was being investigated on the mainland, and that he had been cooperating with an ongoing inquiry.

The case appeared to be the first such investigation of a high-ranking executive for a foreign company in China in recent years.

Chinese foreign ministry spokesman Lin Jian did not confirm or deny the news on Thursday.

“China will protect foreign companies investing in China and protect their legitimate rights and interests in accordance with the law,” Lin said, without offering a reason for the investigation, giving any details about Wang’s whereabouts, or confirming whether he was in custody.

Chinese investigators were looking into aggressive sales tactics for the firm’s oncology drugs, Bloomberg reported, citing people familiar with the matter.

On Thursday, Jens Eskelund, the president of the European Union Chamber of Commerce in China, called for more transparency and fairness in such investigations.

“Ambiguity in rules and regulations” was the number one regulatory challenge that European companies had faced in recent years, he said.

“This highlights the need to ensure that investigations into such cases are carried out in a fair and transparent manner,” Eskelund said.

Alicia Garcia-Herrero, chief economist for Asia-Pacific at French investment bank Natixis, said the key concern for foreign companies was the ease of doing business in China, which was now in doubt. “The takeaway [of] this news is basically [that it would] destroy any confidence that foreign companies may have in China,” she said.

“Foreign workers or their employees are reluctant to work in China and this is only going to get worse.”

The case also “clearly” related to the ongoing nationwide anti-corruption campaign on pharmaceutical and healthcare sectors, she added.

Since last year, the campaign has ensnared more than 30 executives from Chinese drug makers, in addition to more than 300 hospital chiefs and Communist Party secretaries.

Beijing launched the crackdown on the medical sector in August last year to look into the misuse of funds and bribery in pharmaceutical sales. It is part of President Xi Jinping’s wider anti-corruption crackdown.

The investigation into Wang came months after it was reported that police had detained several AstraZeneca employees – all Chinese nationals – and questioned dozens of others over an unauthorised cancer drug that was brought into the country.

China’s corruption investigators, namely members of supervision committees, have extensive powers to investigate suspects, including detaining them for up to six months without access to lawyers.

Tao Jingzhou, an international arbitrator, said the lack of transparency in such cases could hinder Beijing’s efforts to attract foreign investment.

“I do think that Chinese authorities should be more transparent about such arrests and ensure that Mr Wang will have full access to his lawyers.

“No transparency will inevitably lead to all kinds of rumours which might well be destructive to Chinese government efforts to create an investment environment with rule of law and international standards,” Tao said.

There are growing concerns among China’s foreign business community over the expanding regulatory activities of authorities.

China amended its anti-espionage law last year with a broader definition on spying, as well as a law about guarding national security. In 2021, China has also issued a Data Protection Law.

Other recent investigations have fuelled concerns about doing business in China. In 2023, the chairman of investment banking for China at Nomura International (Hong Kong) Ltd, Charles Wang Zhonghe, was banned from travelling outside the mainland, without any explanation from authorities.

Also last year, the offices of US consulting firms Bain and Capvision were raided in an industry crackdown.

China’s central bank holds steady with 200 billion yuan net bond purchase

https://www.scmp.com/economy/china-economy/article/3284680/chinas-central-bank-holds-steady-200-billion-yuan-net-bond-purchase?utm_source=rss_feed

China’s central bank bought a net 200 billion yuan (US$28.07 billion) in treasury bonds in October, to provide what it termed a “reasonable” level of liquidity as the country grapples with a set of economic challenges and attempts to meet its annual growth target.

The People’s Bank of China said on Thursday that the net injection, kept at the same level as the 200 billion yuan purchased in September, is intended to “increase the intensity of countercyclical monetary policy adjustments and maintain a reasonable level of liquidity in the banking system.”

The central bank’s holdings of central government bonds had climbed to 2.26 trillion yuan (US$317.14 billion) by the end of September, up from 2.03 trillion in August and 1.52 trillion in July.

The holdings account for 5 per cent of the central bank’s total assets, up by 1.5 percentage points in two months.

The purchase came after its announcement of a larger-than-expected monetary easing package. The market has been expecting a large issuance of government bonds next year, including special treasury bonds, ultra-long treasury bonds and local special-purpose bonds, to defuse debt risk and provide funding for construction.

The National People’s Congress Standing Committee, China’s top legislative body, is scheduled to meet in Beijing next week, where lawmakers may discuss or approve a new bond quota.

The PBOC resumed treasury bond purchases in late August with a 100 billion yuan net trade, marking the first use of the tool in nearly two decades and the start of a new money supply mechanism by the monetary authority.

PBOC governor Pan Gongsheng said at the Financial Street Forum earlier this month that the bank would continue to enrich and expand its monetary policy toolbox to give full play to structural monetary policy tools and gradually increase treasury bond trading in open market operations.

At the first working group meeting between the PBOC and China’s finance ministry, the two agencies pledged to work closely to provide an “appropriate” environment for future operations, according to an official statement on October 9.

China’s bond yields have come under sustained downward pressure as sluggish economic recovery and expectations of further interest rate cuts made government debt more attractive to investors.

The yield on 10-year government bonds, which had fallen to 2.04 per cent in late September, rebounded to 2.22 per cent following the announcement of new stimulus measures last month. They are now fluctuating at around 2.15 per cent.

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China’s eastern Zhejiang province rolls out platform to grow cross-border e-commerce

https://www.scmp.com/tech/policy/article/3284644/chinas-eastern-zhejiang-province-rolls-out-platform-grow-cross-border-e-commerce?utm_source=rss_feed

Eastern China’s Zhejiang province, which accounts for about a fifth of the country’s annual online exports and imports, has launched a cross-border initiative that streamlines government processes and other services to help merchants increase sales.

The Zhejiang Cross-Border E-commerce Comprehensive Service Platform, launched on Wednesday in the provincial capital of Hangzhou, aims to offer integrated services that address fundraising, regulatory compliance and other industry concerns of businesses in the province and across the mainland, according to a report by the official Zhejiang Daily.

The platform expects to serve 15,000 enterprises within the next three years, covering a total of 35 billion yuan (US$4.9 billion) in cross-border e-commerce export value, according to the report.

About 69 companies – including those that provide logistics and warehousing, as well as cross-border payments – have already joined the new platform, according to Chen Mingchun, an official from the state-backed Zhejiang International E-Commerce Holdings, one of the organisers behind the platform.

Chen said the platform covers both offline and online services. It provides support across different stages of business, from store opening and product selection to tax refund and financing.

“We have refined and learned from our rich experience in the field of cross-border e-commerce for many years,” he said.

The Zhejiang provincial government’s latest initiative reflects the increased importance of overseas markets for Chinese e-commerce merchants and their suppliers amid weak consumption on the mainland, even as they face growing regulatory scrutiny overseas.

The coastal province last year recorded 510 billion yuan in total imports and exports related to cross-border e-commerce. That accounted for more than 20 per cent of the nationwide total in the same period, according to official data.

In the first half of this year, the value of cross-border e-commerce exports from Zhejiang surged 38.5 per cent year on year to 180 billion yuan, outpacing the national growth rate of 21.6 per cent.

Hangzhou is also home to Alibaba Group Holding, China’s largest e-commerce company and owner of the South China Morning Post. Alibaba has stepped up its overseas efforts over the past few years through its global unit Alibaba International Digital Commerce Group.

Yiwu, another city in Zhejiang, is regarded as the country’s global wholesale capital, which attracts a large number of international buyers every year to source products at ultra-low prices.

China outlook murky for executives as companies plan for Trump tariff blitz

https://www.scmp.com/economy/china-economy/article/3284659/china-outlook-murky-executives-companies-plan-trump-tariff-blitz?utm_source=rss_feed

More companies operating in China are considering closing factories and exiting the country, according to a survey of corporate executives – a strategic shift in anticipation of the higher tariffs applied to Chinese goods if former United States president Donald Trump is elected to a new term next week.

In particular, manufacturing exporters showed greater intent to shift supply chains and expressed a more subdued outlook for the future of their businesses in the survey, released by financial services firm UBS on Thursday.

Sentiment has worsened as uncertainty over US-China trade relations compounds other issues in the Chinese economy, and the country has struggled to lure new investment and retain extant capital.

More than 90 per cent of the 419 CFOs polled anticipated additional tariffs in the event of a Trump re-election. The UBS survey was conducted between August and September.

While most expect tariffs to stay below 60 per cent, companies are already strategising, the survey report said, with many planning to expand into other markets, lower export prices and relocate supply chains to mitigate risks.

During his campaign, Trump has pledged to impose up to 20 per cent tariffs on all imports and 60 per cent on those from China – presumably on top of the 25 per cent rate put in place on some goods during his first term.

Nearly a third of the CFOs said they may close their factories or depart the country if tariff hikes materialise, a notable increase from the quarter of respondents who gave the same answer in the previous survey.

Three in every four executives surveyed said their companies already had about 40 per cent of their production and capital expenditures positioned overseas. Japan, the US, South Korea, Taiwan, and Southeast Asian countries like Malaysia and Vietnam were among the top destinations mentioned.

Domestically, the outlook appears muted. CFOs expect declines in domestic orders, profit margins and pricing power in their China business for the first half of 2025.

In the survey report, UBS analysts suggested export orders might see growth from a sustained recovery this year. “However, we think the recovery may be at risk from higher US tariffs if former president Trump is re-elected,” they wrote.

Compared to earlier surveys, more senior executives said they anticipated lower pricing power and weaker demand, and fewer respondents said they expect to boost capital spending in the future.

Chinese navy holds first dual aircraft carrier drills in South China Sea

https://www.scmp.com/news/china/military/article/3284678/chinese-navy-holds-first-dual-aircraft-carrier-drills-south-china-sea?utm_source=rss_feed

The Chinese navy’s two active aircraft carriers – the Liaoning and the Shandong – have completed their first dual carrier exercises in the South China Sea, state broadcaster CCTV reported on Thursday.

The report did not give details of the drills, but it included footage showing multiple J-15 fighter jets taking off from the Liaoning, with at least a dozen of the warplanes taking part in live combat drills.

The two aircraft carriers were also shown sailing side by side.

Military commentator and former PLA instructor Song Zhongping said the dual carrier formation offered a significant “force multiplier effect”.

He said the strength of aircraft carriers was mainly to do with the number of aircraft, adding that the combined air power and strike force of the Liaoning and Shandong exceeded that of some small or medium militaries.

Song noted that the two carrier groups also had different early warning systems and supporting destroyers and frigates that gave them different air defence, anti-submarine and anti-ship capabilities.

“It’s not merely a case of one plus one is greater than two; it’s far greater than that,” Song said, adding that the two aircraft carriers would be more effective by operating together.

The CCTV report said the Liaoning group had been operating in the Yellow Sea, East China Sea and South China Sea before returning to its home port of Qingdao on China’s east coast.

Senior Colonel Zhang Xiaogang, a spokesman for the defence ministry, told reporters in Beijing on Thursday that the exercises were not targeted at the recent passage of American and European warships in the Taiwan Strait but were part of a “routine arrangement in the annual plan”.

He said the open-sea combat drills included “real combat scenario training” and were aimed at improving “systematic combat capability” as a cohesive unit.

It comes after satellite images were posted on multiple open-source intelligence accounts on social media earlier this month, around October 8, showing the two warships docked at the same pier at the Sanya naval base on Hainan Island, in southern China.

The images showed the aircraft carriers docked alongside Type 051B and Type 052D guided-missile destroyers.

The Liaoning was also spotted in waters east of the Philippines and west of Guam from September 17 to October 1.

Video footage released by the People’s Liberation Army Eastern Theatre Command also showed the Liaoning taking part in war games near Taiwan on October 14 that it said were “stern deterrence to the separatist acts of Taiwan independence forces”.

Beijing sees Taiwan as part of China to be reunited by force if necessary. Most countries, including the United States, do not recognise self-governed Taiwan as an independent state but oppose any attempt to take the island by force.

Last Wednesday, Taiwan’s defence ministry said the Liaoning strike group had sailed north through the Taiwan Strait.

Philippine coastguard hailed as ‘vigilant stewards’ against China - but why no new ships?

https://www.scmp.com/week-asia/politics/article/3284679/philippine-coastguard-hailed-vigilant-stewards-against-china-why-no-new-ships?utm_source=rss_feed

The Philippine coastguard (PCG) will not be getting funding to buy new vessels next year despite the president’s promise to strengthen the agency’s capabilities, as it remains at the forefront of defending the country’s sovereignty against Beijing’s assertiveness in the disputed South China Sea.

Addressing the PCG on its 123rd anniversary on October 22, President Ferdinand Marcos Jnr hailed the agency as the “vigilant stewards of peace and order”.

Praising the PCG for defending the Philippines’ maritime borders, Marcos Jnr said the country has “borne witness to foreign vessels sailing in, some carrying the promise of trade, others cloaked in conquest”.

“Be assured you are never alone in carrying the weight of this mission,” Marcos Jnr promised the PCG, without naming China.

“This administration reaffirms its support to efforts that will improve your fleet and our air assets ... to maritime domain awareness, weapons capability, and necessary infrastructure development. This will boost your capacity to respond to any operations,” he added.

His commitment, however, would not be backed by funding for the PCG for next year, with the agency unable to acquire new vessels to patrol the country’s 37 million km coastline.

The PCG’s entire budget of 31.28 billion pesos (US$537 million) for 2025 was read out and approved in under five minutes by the House Committee on Appropriations on August 28.

One Rider party-list congressman Ramon Gutierrez noted then that the PCG budget had no “specific line item for purchases of new assets. I hope that’s something we can do as long as it is fiscally possible”. He praised the agency for “doing a hell of a job in the West Philippine Sea”, referring to an area in the South China Sea that the Philippines considered as its maritime territory, including its exclusive economic zone.

While the budget is 1.86 billion pesos more than the current year’s 29.42 billion pesos budget, most of next year’s funding – like this year’s budget – will go towards PCG personnel-related expenses.

Jaime Bautista, Secretary of the Department of Transportation and Communications, which oversees the PCG, told the committee that of the 128 projects the department had proposed for next year for the maritime sector, only three were approved for inclusion in its 2025 budget.

Of the three projects, only two will be funded.

The first is a 300 million pesos sheltered port project on Pag-Asa or Thitu island, which hosts a civilian community and military reservation to defend the country’s Kalayaan islands, situated beyond the 200 nautical miles of the country’s exclusive economic zone.

The second is the long-delayed 133 million pesos phase one of a project involving the acquisition of patrol vessels mainly for use along the country’s major ports but not the West Philippine Sea.

Last year, then Senate President Juan Miguel Zubiri expressed support for the construction of 40 new PCG vessels in a local shipyard in Cebu but there has been no follow-up on his proposal.

The Philippines has received funding support from its allies, the US and Japan, to boost the capabilities of the PCG.

Last week, the US Bureau of International Narcotics and Law Enforcement said it would allocate US$8 million to support the PCG’s “infrastructure enhancements, training programme development and resource acquisition and management planning”.

In May, the Japan International Cooperation Agency promised to lend 64.3 billion yen (US$422 million) at low interest rates to the Philippines to buy five 97-metre vessels for maritime surveillance in the disputed waterways. The vessels are expected to be delivered in phases from 2027.

Japan had previously loaned money to the Philippines to buy two 97-metre vessels - BRP Teresa Magbanua and BRP Melchora Aquino.

BRP Teresa Magbanua was involved in several confrontations with Chinese coastguard vessels off Sabina Shoal over five months earlier this year. It was recalled from service in August after sustaining damage due to three collisions with Chinese vessels.

BRP Melchora Aquino has been used to escort Manila’s resupply missions to BRP Sierra Madre, a ship grounded on Second Thomas Shoal as a military base since 1999.

PCG Commandant Ronnie Gil Gavan told congressmen in the same House Committee on Appropriations hearing that the agency was aiming to hire 4,000 new personnel and boost its ranks to 137,000 by 2025.

Other congressmen, however, said Gavan’s projection was overly optimistic given that the PCG only had around 30,000 personnel currently.

In January, then PCG spokesman Armand Balilo said the agency was doing a “massive recruitment” of some 100,000 men to protect the country’s coastline but this could only achieved within 10 to 15 years.

The Senate still has to hold its separate budget hearing and reconcile any modifications with that of the House version before the 2025 national budget is passed by December.

EU to investigate China’s Temu over suspected illegal products and ‘addictive’ platform

https://www.scmp.com/news/china/diplomacy/article/3284671/eu-investigate-chinas-temu-over-suspected-illegal-products-and-addictive-platform?utm_source=rss_feed

The European Union has launched an investigation into Chinese online marketplace Temu, under suspicions that it is not cracking down on the sale of illegal products and that the platform’s design is “addictive” for users.

The investigation comes under the European Commission’s Digital Services Act, a powerful instrument that gives it sweeping powers over online businesses operating in the 27-member bloc.

If found guilty, Temu could face fines amounting to 6 per cent of its annual global revenue.

The commission has asked Temu at several points in recent months to supply more information about its efforts to stop the sale of illegal items on the platform. It also asked for information about “risks relating to consumer protection, public health and users’ well-being”.

Based on Temu’s responses, the commission decided to launch an in-depth investigation.

The investigation will assess Temu’s efforts to “limit the sale of non-compliant products” in the EU, including efforts to limit the “reappearance of previously suspended rogue traders” who have sold illegal items in the past.

It is assessing the addictiveness of the platform itself, “including game-like reward programmes”, which the commission said “could have negative consequences to a person’s physical and mental well-being”.

It will also investigate how content and products are recommended to users on Temu’s platform. The company is required under the DSA to disclose how these recommendations are made and to permit users to opt out of recommendations based on profiling.

Finally, it will look at how Temu grants researchers access to its company data, another tenet of the DSA, under which the company was designated a “very large online platform” on May 31.

The investigation has no deadline, but action could be taken against Temu if it is seen to be non-compliant with the commission’s inquiries. The inquiry does not preclude the launch of separate investigations, either by Brussels or national-level authorities in the EU, a statement said.

“We want to ensure that Temu is complying with the Digital Services Act, particularly in ensuring that products sold on their platform meet EU standards and do not harm consumers,” said Margrethe Vestager, the EU’s competition chief.

“Our enforcement will guarantee a level playing field and that every platform, including Temu, fully respects the laws that keep our European market safe and fair for all,” she added.

Temu said that it “takes its obligations under the DSA seriously, continuously investing to strengthen our compliance system and safeguard consumer interests on our platform”.

“We will cooperate fully with regulators to support our shared goal of a safe, trusted marketplace for consumers,” the company said.

EU sources say they are moving quickly because of the astronomical growth of Temu, along with Chinese fast fashion marketplace Shein. Brussels suspects that because their growth has been so fast, the companies have not been able to implement the many guardrails required under the DSA, leading policymakers to consider curtailing the flow of goods. In addition to concerns about safety and quality concerns, some governments are worried that they are undercutting local competition.

Proposals are circulating in the commission about launching trade cases based on suspected postal and transport subsidies for the companies in China, which would give them an unfair advantage. There have also been discussions about scrapping the “de minimis” rule, whereby items enter EU markets tariff-free because they are below a certain value.

Over the first nine months of 2024, sales of “articles of low value in simplified customs procedures” – those that qualify for the de minimis rule – rose 40.2 per cent in value terms to US$12.2 billion, according to calculations based on Chinese customs statistics. In volume terms, they were up 27 per cent to 665,400 tonnes.

In a hearing before the French parliament on Wednesday, Philippe Wahl, the CEO of French postal operator La Poste, said that Shein and Temu now “represent 22 per cent of our parcels”, up from less than 5 per cent five years ago.

In September, the governments of Germany, France, Poland, Austria, Denmark and the Netherlands urged the commission to use the DSA to clamp down on the surge in low-value imports.

“These parcels are a direct threat to European industrial producers as well as law-abiding trading companies,” Germany’s then-deputy economy minister Sven Giegold said last month.

“Every day, hundreds of parcels come mainly from China with goods which do not correspond regularly with EU market rules,” Giegold said.

In March, AliExpress became the first online platform to be investigated under the DSA, with the commission exploring the “dissemination of illegal content” on the platform. AliExpress is a subsidiary of Alibaba, which owns the South China Morning Post.

Commission sources said both AliExpress and Temu had been “extremely responsive” to their queries.

Earlier this year, a report from the Toy Industries of Europe (TIE), which bills itself as “the voice of reputable toy manufacturers” in the bloc, raised the alarm about the safety of children’s toys bought from Temu.

“TIE bought 19 toys from online marketplace Temu. None of the toys fully complied with EU legislation and 18 posed a real safety risk for children,” read the report, which listed “cutting, blockage, choking, strangulation, puncturing and chemical danger” as major hazards across the 19 products it bought.

Temu said that product quality and consumer safety were “top priorities” at the company.

“All merchants on our platform must meet strict safety standards. Our quality control measures include requiring proper documentation, conducting spot checks, and continuously monitoring the platform,” the company added.

“We act swiftly on feedback, take prompt action to remove non-compliant products and address any issues. We are committed to continuously improving our processes to ensure that consumers can shop with peace of mind.”

Philippines’ probe on land-owning Chinese with fake citizenship stirs security fears

https://www.scmp.com/week-asia/politics/article/3284643/philippines-probe-land-owning-chinese-fake-citizenship-stirs-security-fears?utm_source=rss_feed

Philippine authorities are cracking down on Chinese nationals with fake Filipino citizenship who have snapped up plots of land in Luzon, a trend that observers say has been going on for decades and poses a security threat amid fears of criminal operations with possible links to such sales.

Several Chinese individuals were reported by local media this week to have bought thousands of hectares of land in the Central Luzon region, northwest of Manila, and provided “fake and spurious documents” to bypass ownership laws, according to a Senate committee investigating links between offshore gaming operators (Pogos), suspicious land purchases, and killings tied to former president Rodrigo Duterte’s drug war.

Lawmakers pointed to Chinese nationals Aedi Tai Yang and Willie Ong, who were found to be involved in dubious land transactions in Pampanga province. Yang allegedly falsified documents to obtain Philippine citizenship, which he used to buy land and establish local businesses, while Ong was said to have owned up to 300 property titles.

The Presidential Anti-Organised Crime Commission (PAOCC) revealed that its investigations showed Chinese nationals leased or bought large swathes of farmland for as much as 90,000 pesos (US$1,547) per hectare, or every 10,000 square metres.

“Instead of farmers planting in these lots, the Chinese pay them to lease the properties instead – it’s up to them to decide what they want to do with these properties,” PAOCC chief Gilbert Cruz told local media last month.

The Office of the Solicitor General said it was reviewing the Senate’s documents and gathering sufficient evidence to “commence the appropriate legal actions”, which might include seizing such properties and cancelling the owners’ birth certificates.

Observers told This Week in Asia that such illegal land purchases by foreign nationals, especially Chinese nationals, began decades ago.

Foreigners have been acquiring citizenship – often through spurious means – to circumvent Philippine laws that limit foreign ownership in most industries to 40 per cent, with Filipino entities accounting for the remaining 60 per cent, according to Alvin Camba, a critical materials specialist at the Associated Universities Incorporated, who has researched Chinese investments in the Philippines and Asia.

Having fake Philippine citizenship to acquire properties was a common money-laundering tactic for actors involved in gambling or scam operations, Camba said. “A lot of these people convert or buy citizenships and then convert these funds from online gambling or scam compounds into actual economic assets in the country.”

The practice enables the quick setup of enterprises linked to criminal activities in the Philippines, he added.

“If there’s land already owned by Chinese nationals and they are willing to work with a foreign company that comes in – such as a Chinese Macau and Hong Kong company in cyber scams, they could easily find a partner.

“So if some of these people are already Filipinos, it’s a lot easier for them to bring investments and money abroad that can be used for criminal activities,” Camba said.

The strategy allowed Chinese actors to mask their involvement in such operations and make it harder for Manila to deal with the “big security issue”, he added.

Camba cited the case of dismissed Bamban town mayor Alice Guo, who faced accusations of being a Chinese state agent and was found to have fingerprints that matched with those of a Chinese national named Guo Hua Ping, who entered the Philippines in 2003.

The Department of Foreign Affairs had cancelled her passport, citing fraud, and the Office of the Solicitor General filed a petition to cancel her birth certificate in July although Guo has insisted that she is a Filipino born in the Philippines.

Sherwin Ona, a visiting fellow at the Institute for National Defence and Security Research in Taiwan, said many such property acquisitions could be “part of a broader influence agenda and even possibly espionage activities”.

Ona pointed out that Chinese nationals were found to have bought properties adjacent to military bases and sites under the Enhanced Defence Cooperation Agreement, the latter of which allowed American forces to operate in these locations in line with Manila’s 73-year-old treaty alliance with the United States.

According to defence analyst Santiago Castillo, the use of illegal assets to facilitate the operations of these individuals reflected the “Chinese intelligence playbook” with Pogo facilities located near Philippine military sites used as “targets for Chinese intelligence operations”, he added

By locating Pogo facilities in Central Luzon, Chinese-linked illegal activities have been able to flourish far away from Manila, where security was tighter, Castillo said.

The problem of foreign nationals illegally acquiring Philippine citizenship had previously surfaced in other parts of the country. In July, the National Bureau of Investigation uncovered nearly 1,200 falsified birth certificates – mostly belonging to Chinese nationals – registered in the local civil registry of Sta Cruz town in Davao del Sur since 2016.

“These malign activities are happening not only in the Philippines but also others like the US and Taiwan, to name a few,” Ona, who is also an associate professor at the De La Salle University’s political science department, told This Week in Asia.

Camba said that long before the recent Pogo raids, Chinese criminal organisations had already been involved in illegal business activities in the Philippines, such as smuggling and unauthorised mining.

From as early as the 1990s, some Chinese nationals would acquire Philippine citizenship fraudulently to buy land or set up local companies, Camba added, citing his findings.

“For instance, they would buy certain ports and the ports would give an opportunity for these organisations to smuggle goods,” he said. Buying properties near port areas, such as at resorts, would also provide a cover for them, he added.

Endemic corruption in the Philippines has enabled Chinese nationals to acquire citizenship illegally, analysts say.

The country’s inefficient bureaucracy has also allowed these nationals’ activities to go on and compromise security, Castillo said. According to Ona, there was a need for better coordination between the country’s immigration and civil administration systems so that they could help strengthen the capabilities of the intelligence agencies to combat the problem.

The latest findings by the authorities on the illicit activities involving Chinese nationals were just “scratching the surface”, Camba said.

“I don’t think the government has yet to uncover the sheer number of Chinese or illegal firms that have been opened by Chinese citizens who have bought Philippine citizenship,” he added.

2 separately married China parents meet in kids’ class chat group, abandon families, elope

https://www.scmp.com/news/people-culture/trending-china/article/3284438/2-separately-married-china-parents-meet-kids-class-chat-group-abandon-families-elope?utm_source=rss_feed

Two married individuals in China developed a romantic relationship after meeting in their children’s class chat group, abandoned their families, and eloped.

The pair, surnamed Zhang and Wen, both living in Henan province in central China, each had families of their own, the mainland media Xiaoxiang Morning News reported.

Zhang was married through a matchmaking arrangement and had four children with her husband, while Wen and his wife were parents to two children.

The two connected through their children’s class chat group, set up by the teacher to help parents stay updated on homework and track their children’s progress.

Zhang and Wen swapped contact details and gradually developed feelings for each other through frequent chats.

Online reports indicate that Wen often expressed care for Zhang, making her feel a warmth she had never experienced before.

Zhang said she frequently suffered from domestic violence, leaving her mentally and physically exhausted.

In June 2019, after being beaten and verbally abused by her husband once again, she suggested to Wen that they elope to Tianjin, a northern Chinese city 680km away, to start a new life.

Without divorcing his wife, Wen left his children behind and moved to Tianjin with Zhang. The pair lived together for nearly five years.

When Zhang became pregnant, Wen returned to Henan to finalise his divorce. After giving birth, Zhang also divorced her husband.

It remains unclear if they kept in touch with their families during their cohabitation.

On May 24, the pair returned to Henan and told their of cohabitation to the police, though the reason they did this has not been disclosed.

An online observer speculated that they may have turned themselves in after realising that they could not obtain a marriage certificate and were unable to register the newborn’s household.

In China, cohabiting with someone other than a spouse is legally and morally unacceptable, with bigamy punishable by up to two years in prison.

“Maybe they surrendered for their child’s future,” the user wrote on social media, adding: “Ironically, they ended up neglecting the kids in their own families.”

The verdict from their first trial was recently made public, with the court finding Zhang and Wen guilty of bigamy and sentencing them to four months in prison.

Zhang’s sentence was suspended for six months, considering her need to care for her child.

The sentencing ignited discussions on mainland social media.

One online observer said: “Marriage is not a game but a responsibility. In tough times, calm communication and protecting family should come first.”

Another person shared their insights from a woman’s perspective: “Women facing domestic violence are extremely vulnerable. Getting professional legal help is key to keeping yourself and your kids safe. Don’t rely on others. Only you can save yourself.”

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China takes aim at energy replacement with plan to rely on renewables, reduce coal use

https://www.scmp.com/economy/china-economy/article/3284650/china-takes-aim-energy-replacement-plan-rely-renewables-reduce-coal-use?utm_source=rss_feed

China has unveiled a 17-point renewable-energy-substitution plan that spans multiple industries, aiming to accelerate the nation’s clean-energy transition while taking a gradual approach to phasing out fossil fuels in a bid to avoid crippling power disruptions like those seen in recent years.

The country’s top economic planner, the National Development and Reform Commission (NDRC), is urging industries to carry out their energy transition in a “safe”, “orderly” and “diverse” manner. And the underlying goal is to reach a nationwide renewable-energy consumption target for 2025 that is equivalent to the energy produced from more than 1.1 billion tonnes of standard coal, exceeding the 2022 goal by 100 million tonnes.

By 2030, that coal-use equivalency should rise to 1.5 billion tonnes as the steady increase in renewable energy supports efforts to see carbon emissions peak by that year and to achieve net-zero emissions before 2060 – pledges made by President Xi Jinping in 2020.

“[We need to] comprehensively enhance the capability to supply renewable energy,” said the plan unveiled on Wednesday and jointly issued by six departments. It also emphasised the need to “accelerate the building up of relevant infrastructure”.

After nearly four years of vigorous development in clean-energy sectors – mainly involving solar, wind and marine energies – the world’s biggest carbon emitter has met some targets ahead of schedule.

For instance, China in August achieved its 1,200-gigawatt solar and wind capacity targets six years early, according to the National Energy Administration.

However, clean energy accounted for only 26.4 per cent of China’s total power consumption at the end of last year, while around half of all energy used was generated by burning coal.

“Beijing’s efforts aim not only to fulfil its peak-carbon and carbon-neutrality commitments, but also to enhance energy security, particularly as power shortages have become more frequent in recent years,” said Peng Peng, executive chairman of the Guangdong Society of Reform.

In the Wednesday document, the NDRC asked each region to “fully understand the importance and urgency of renewable-energy alternatives” and to accelerate efforts to promote them.

The plan outlined sectors targeted for energy replacement, including traditional industries such as iron and steel, building materials, transport, construction, agriculture, and new infrastructure.

These industries are required to gradually phase out traditional energy sources and opt for clean energy suited to their locations – such as solar, wind, biomass and tidal power.

Beijing is cautiously implementing the plan to avoid disrupting the existing energy supply and production order. It is promoting a complementary system between new and traditional energy sources, integrating new energy facilities with existing power, gas and heat infrastructure, and encouraging the cross-use and blending of energy sources.

Furthermore, the plan encourages market entities – those capable of supplying clean energy – to participate in China’s power market and to establish pilot green-energy parks in economic development zones, fully powered by renewable energy.

Following Xi’s carbon-reduction commitments to the United Nations, Beijing’s strides in research, investment, manufacturing and deployment for decarbonisation have yielded substantial economic gains.

These stem from the nation’s robust exports of electric vehicles, photovoltaics, and lithium batteries – industries that have become points of national pride while resulting in international criticism and tariffs amid overcapacity allegations from the West.

As the world’s largest developer of solar and wind energy, China accounted for 66 per cent of the world’s newly added wind-energy capacity last year, and for more than 60 per cent of the added solar capacity, the International Energy Agency (IEA) said in a recent report.

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India and China troop disengagement ‘almost complete’ after historic border pact

https://www.scmp.com/news/asia/south-asia/article/3284667/india-and-china-troop-disengagement-almost-complete-after-historic-border-pact?utm_source=rss_feed

India and China have moved most of their frontline troops further from their disputed border in a remote region in the northern Himalayas, India’s defence minister said Thursday, some 10 days after the two countries reached a new pact on military patrols that aims to end a four-year stand-off that’s strained relations.

Rajnath Singh said the “process of disengagement” of Indian and Chinese troops near the Line of Actual Control in Ladakh is “almost complete.”

The Line of Actual Control separates Chinese and Indian-held territories from Ladakh in the west to India’s eastern state of Arunachal Pradesh, which China claims in its entirety. India and China fought a deadly war over the border in 1962.

Ties between the two countries deteriorated in July 2020 after a military clash killed at least 20 Indian soldiers and four Chinese. That turned into a long-running stand-off in the rugged mountainous area, as each side stationed tens of thousands of military personnel backed by artillery, tanks and fighter jets in close confrontation positions.

Earlier this month the two neighbours announced a border accord aimed at ending the stand-off, followed by a meeting between India’s Prime Minister Narendra Modi and China’s President Xi Jinping on the sidelines of the recent Brics summit in Russia, their first bilateral meeting in five years.

It’s not clear how far back the troops were moved, or whether the pact will lead to an overall reduction in the number of soldiers deployed along the border.

“Our efforts will be to take the matter beyond disengagement; but for that, we will have to wait a little longer,” Singh said.

Chinese Defense Ministry spokesperson Zhang Xiaogang said on Thursday that the frontline troops were “making progress in implementing the resolutions in an orderly manner.”

The pact called for Indian and Chinese troops to pull back from the last two areas of the border where they were in close positions. After the deadly confrontation in 2020, soldiers were placed in what commanders called “eyeball to eyeball” positions at least six sites. Most were resolved after previous rounds of military and diplomatic talks, as the two nations agreed to the creation of buffer zones.

However, disagreements over pulling back from in the Depsang and Demchok areas lasted until the October 21 pact.

“It is a positive move,” said Lieutenant General D.S. Hooda, who from 2014 to 2016 headed Indian military’s Northern Command, which controls Kashmir region, including Ladakh. “Given how deep mistrust has been between the two countries and how all confidence building measures collapsed, it is quite a positive beginning,” he said.

However, Hooda added, it will take time for both countries to return to their pre-2020 positions. “It does not mean everything is going to as normal as it existed earlier. We have to re-establish traditional patrolling and also the buffer zones need to be sorted out,” he said.

The border stand-off also damaged business ties between the two nations, as India halted investments from Chinese firms and major projects banned.

China voices support for Nasa over botched Boeing Starliner space mission

https://www.scmp.com/news/china/science/article/3284616/china-voices-support-nasa-over-botched-boeing-starliner-space-mission?utm_source=rss_feed

The China Manned Space Agency has extended the country’s good wishes for the safe return of two American astronauts who have been stranded on board the International Space Station (ISS) since June.

Speaking to reporters shortly before the launch of China’s Shenzhou-19 mission to deliver the next crew to the Tiangong space station, spokesman Lin Xiqiang also expressed the agency’s support for Nasa’s decision to prioritise safety.

“Human space flight has always been fraught with risks and challenges, and astronaut safety is a top priority for governments and people worldwide,” Lin said, adding that the agency is “closely following the situation involving the delayed return of our American colleagues”.

“We commend Nasa’s emphasis on astronaut safety and wish them both a safe journey home,” he said.

Nasa astronauts Butch Wilmore and Suni Williams arrived at the ISS on board Boeing’s Starliner capsule on June 5 for what was initially intended to be an eight-day mission.

However, after a series of technical issues – including helium leaks and propulsion malfunctions – with the Starliner, Nasa determined in August that it would be unsafe for Wilmore and Williams to return on the spacecraft.

The Starliner returned to Earth without the two astronauts. They are now scheduled to make their homeward journey with SpaceX’s Dragon capsule in February, turning what was meant to be a week-long trip into several months.

The US, China and Russia are the only nations with fully independent human space flight programmes, each capable of building, launching and operating crewed spacecraft.

The ISS and China’s Tiangong are the only two facilities supporting a long-term human presence in low-Earth orbit. A total of 13 astronauts are living on board the space outposts – six from China, four from the US, and three from Russia.

When asked how China would handle a similar situation, Lin said that the Chinese agency follows strict quality controls to ensure that “no issues go unresolved before launch”.

Since the Tiangong’s completion two years ago, China has implemented a comprehensive quality assurance system at each stage – from individual component production to final assembly and testing at the launch site – with regular reviews and rechecks, he noted.

According to Lin, the agency has also refined its emergency response plans to address threats such as space debris, which could collide with the space station and potentially lead to leaks.

“Compared with the early days of Tiangong, the time available for our astronauts to respond to emergencies has increased fivefold,” he said.

China is also prepared to conduct rescue missions in extreme circumstances, Lin told reporters.

“The Shenzhou-20 spacecraft and a Long March 2F rocket are on standby at the launch centre. They can quickly convert to launch status to carry out emergency rescue missions for astronauts aboard the Tiangong space station,” he said.

Boeing, Nasa’s prime contractor for the ISS, is reported to be considering the sale of its space business following financial losses and multiple accidents – including the recent explosion of a large communications satellite built by the company.

The hundreds of pieces of debris scattered into space by the blast pose a threat to other satellites in orbit.

Meanwhile, despite missing next week’s Election Day, Wilmore and Williams are planning to cast their votes from space, according to US media reports.

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South China Sea: how does Philippines’ coastguard measure up against others?

https://www.scmp.com/week-asia/politics/article/3284596/south-china-sea-how-does-philippines-coastguard-measure-against-others?utm_source=rss_feed

An injection of US$8 million by the US into the Philippine coastguard has shone the spotlight on Manila’s maritime strategy amid its ongoing territorial row with Beijing in the South China Sea while also bringing attention to similar fleets of claimant states in the region.

Observers say that coastguard fleet sizes and capabilities in the disputed waterway vary according to each nation’s history and strategic interests, with states such as Indonesia and Malaysia relying more on their navies to deter any foreign incursions.

One analyst argues that many regional countries do not possess adequate fleet sizes for their coastguards.

The Philippines, according to other experts, should hedge its bets on a hybrid strategy of “quiet diplomacy” and “active measures”, such as leveraging on US funding to improve its coastguard capabilities, even if the amount is not expected to yield any long-term boost to its defensive posture against increased Chinese aggression.

On Monday, the US embassy in the Philippines said in a statement that the US$8 million funding would support the Philippine coastguard’s (PCG) “infrastructure enhancements, training programme development and resource acquisition and management planning”.

Chris Gardiner, CEO of the Institute for Regional Security in Canberra, told This Week in Asia that the move was a modest contribution that complemented significant support already provided by Japan to the PCG.

The PCG currently operates 62 patrol vessels, four support ships and 469 auxiliary boats. Tokyo previously delivered maritime equipment to Manila – two 97m patrol vessels and 10 multi-role response vessels – under the Japan International Cooperation Agency Official Development Assistance loan.

“Strengthening the coastguard matters. The People’s Republic of China wages its campaign of territorial expansion in part through the use of [domestic] lawfare and grey-zone ambiguity,” Gardiner said.

“Its extensive use of coastguard vessels in contesting maritime boundaries is meant to signal that it’s simply deploying non-military assets and personnel who are going about enforcing domestic laws in PRC territorial waters.”

Gardiner also warned that the Philippines should be wary of using naval assets to counter China in the disputed waters.

“The use of naval assets in response opens the responding state to the charge that it has militarised a conflict and used military forces to attack non-military Chinese assets and personnel,” he said.

The Ferdinand Marcos Jnr administration, according to Gardiner, is not alone in underinvesting in coastguard forces. More funding for Manila was needed to address Chinese actions, such as militia-backed fishing fleets, as well as other issues like organised crime, human-smuggling, and illegal resource extraction and shipping, he said.

Beijing has been accused of employing aggressive tactics against Philippine ships in the South China Sea, such as firing water cannons and using high-intensity lasers, in a bid to assert its territorial claims in the disputed waters.

The US$8 million funding is the second round of US financial help this year for Manila to boost its defence capabilities.

China claims nearly the entire South China Sea, including areas also claimed by the Philippines, Brunei, Malaysia and Vietnam. An international tribunal dismissed China’s territorial assertions in 2016, declaring them without legal basis – a verdict that Beijing has consistently rejected.

Compared with other claimant states in the South China Sea, China has the largest coastguard fleet, with around 500 surface vessels. These include more than 155 large ships equipped with substantial armaments, including naval-grade guns.

One of the Chinese coastguard’s assets, the 165-metre vessel nicknamed “The Monster”, was deployed previously off the Scarborough Shoal, a highly contested maritime feature in the South China Sea that Manila claims is within its exclusive economic zone.

Chester Cabalza, president of the Manila-based International Development and Security Cooperation think tank, said each claimant state tailored its coastguard fleet strategy and material requirements to suit specific strategic interests.

Indonesia started its defence reforms and military modernisation early, he noted. It has seven 60-metre large Class 1 patrol boats, 15 40-meter Class 2 patrol boats, and 300 smaller vessels patrol boats across various classes.

While Indonesia is not one of the South China Sea claimant states, an area in the disputed waters overlaps with its exclusive economic zone off the Natuna coast.

“Indonesia bought advanced defence weapons for the coastguard and manufactured warships and warplanes. It has advanced its legal and sovereignty rights using the Unclos,” he said, referring to the United Nations Convention on the Law of the Sea.

Vietnam’s drive to modernise its coastguard and navy was a reflection of its past battles against foreign invaders, Cabalza said. Hanoi, which has a history of maritime confrontations with China, appeared to be bolstering its assets in the disputed Paracel and Spratly Islands, he added.

The Vietnamese coastguard (VCG) operates 64 vessels larger than 100 tons, including multirole patrol vessels and larger cutters. It has acquired locally-built 2,200 tons DN-2000-class vessels along with four DN-4000-class vessels.

Malaysia’s fleet, meanwhile, has six Bagan Datuk-class patrol vessels and three Tun Fatimah-class offshore patrol vessels, with the first from the latter group delivered early this year.

Cabalza said Malaysia has adopted “quiet diplomacy” with China even as it boosted its coastguard capabilities. “They possess strong coastguard ships but exercise restraint while de-risking their strategic goals,” he added.

However, Abdul Rahman Yaacob, a research fellow with the Lowy Institute’s Southeast Asia programme, said the Malaysian and Indonesian coastguards still lacked sufficient vessels to police and protect their maritime interests, especially in deeper waters.

“These two countries still primarily rely on their navies,” Yaacob told This Week in Asia.

“The recent Indonesian engagements with the Chinese coastguard demonstrated Indonesia’s reliance on the navy for protecting its maritime interests. An Indonesian warship assisted the Indonesian coastguard to shadow and chase a Chinese coastguard vessel out of the waters around the Natuna Islands,” he added.

Yaacob said that with the PCG stepping up its patrolling and inspection in the South China Sea, it should also be mindful of the jurisdiction of regional agencies.

“If there are overlapping jurisdiction, it may pose a problem for shipping, especially commercial ones, travelling within the Philippines’ waters as they may face inspections from different government agencies,” he cited.

Cabalza said that Manila should adopt a broader approach to counter Beijing’s activities in the waterways.

“The Philippines has maximised its transparency strategy in exposing the China coastguard’s grey-zone and unlawful activities in the West Philippine Sea. It must now adopt a hybrid approach – combining quiet diplomacy with active measures – to further its strategic objectives,” he added.

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Why the year AD1 was also a new era for ancient China

https://www.scmp.com/news/china/science/article/3284474/why-year-ad1-was-also-new-era-ancient-china?utm_source=rss_feed

In the ancient Chinese calendar, the year corresponding to AD1 is called yuan shi yuan nian, or the “first year of a primordial beginning”.

The official reign name, which symbolises a new start, was coined by Wang Mang, then a minister and “consort kin” of the Han dynasty (206BC-AD220), a title referring to his being a cousin of the 12th emperor.

It would be some five centuries before the Latin concept of “Anno Domini”, or AD itself was born.

This is why some Chinese history enthusiasts call Wang a “time traveller”.

The counting system for “Anno Domini” or “in the year of the Lord” starts from the presumed birth date of Jesus Christ. While developed by the eastern Roman or Byzantine scholar Dionysius Exiguus in AD525, its use was only popularised in the Latin West by the English historian Bede a century or so later.

Over the centuries it came to be adopted as a standard counting system in Christian Europe. In 1582, Pope Gregory XIII used an estimated birth date for Jesus Christ to introduce the Gregorian calendar to replace the Julian version. This corrected the inaccuracies of the Julian calendar with the introduction of leap years, unknown until then to Europeans. By the 20th century, AD had become widely used around the world.

The South China Morning Post spoke to historians to explore the coincidence in time calculation between the East and West, albeit separated by several hundred years, and to delve into the pivotal figure of Wang.

He is now viewed as a man of the moment who brought about changes in an era in Chinese history defined by a deep yearning for renewal and transformation in nearly all walks of life – including science.

According to government records, Wang undertook many unprecedented actions resembling scientific endeavours undertaken well after his time.

For instance, during Emperor Ping of Han’s reign from 1BC-AD6, Wang initiated China’s earliest known population census and also its first recorded locust control efforts.

He is also known to have vacated houses to isolate and treat patients, in the earliest recorded Chinese instance of using quarantine to control infectious diseases.

When he became an emperor himself in AD9, Wang ordered an “autopsy experiment” on an insurgent in the year 16. Three years later, he watched a short-lived “flying performance” of an inventor of a flying machine loaded with bird feathers. He also invented a caliper – almost identical to the instrument used today – to measure lengths with a moving ruler.

Spanning 400 years, the Han imperial dynasty lasted longer than any other and is viewed as a golden age in Chinese history. It was divided into two periods – the Western and Eastern Han – interrupted by the Xin dynasty (AD9-23) founded by Wang Mang. He ruled until he was overthrown by rebels, followed by the beginning of the Eastern or “later” Han.

According to Wicky Tse Wai-kit, associate director of the Centre for Chinese History at Chinese University of Hong Kong, the Western Han period had left the people longing for change after “many natural disasters, man-made calamities and social issues”.

“Wang rode on the social climate of seeking change in his rise to power,” Tse said.

A symbolic way to reset after setbacks and declare a new beginning was to coin a new reign name. After the weak 13th Western Han Emperor Ai died without leaving an heir in 1BC, Wang supported his cousin, the minor Emperor Ping, to succeed to the throne and named himself regent.

The following year, Wang introduced the reign name “primordial commencement”, referring to the start of a new era.

Lo Wing Sang, director of the centre for research and teaching in Chinese history at Hong Kong Shue Yan University, said coining a new reign name was also a political move to declare power, to establish “credibility and authority”.

Fast forward to the end of imperial China in 1912 when – in an attempt to break away from imperial authority – the nascent Republic of China (ROC) adopted the Western Gregorian calendar.

Today’s Taiwan, where ROC founders the Kuomintang fled after their defeat by the Communists in the Chinese civil war, uses the Minguo or “country of the people” calendar. This takes 1912, the founding of the ROC government, as the start of the epoch.

In 1949, the victorious Communist Party chose to use the Gregorian calendar when founding the People’s Republic of China, thus adopting a system used by most countries in the modern world.

Beijing to Chinese EV makers: think twice about investing in tariff-backing EU countries

https://www.scmp.com/business/china-business/article/3284591/beijing-chinese-ev-makers-think-twice-about-investing-tariff-backing-eu-countries?utm_source=rss_feed

Beijing asked the nation’s carmakers to refrain from making major investments in European Union (EU) countries that backed additional tariffs of up to 35 per cent on Chinese-made electric vehicles (EVs).

On October 10, the Ministry of Commerce (Mofcom) summoned major automotive firms including BYD Auto, the world’s largest EV builder, as well as Volvo owner Geely. The ministry warned those assembled about the risks of setting up factories in countries like France and Italy, Reuters reported, citing people familiar with the matter.

The directive came after a vote on Chinese EV tariffs at the beginning of October: 10 EU countries supported the action and five members – including Germany and Hungary – opposed it. Another 12 members, including Spain and Belgium, abstained.

Two executives with Chinese carmakers, who spoke on condition of anonymity, told the Post that the Mofcom order is not compulsory and can be characterised as “window guidance”.

On the mainland, this kind of guidance is used by authorities to deliver verbal or written instructions to companies on government policies. Generally speaking, companies that do not comply with those directives are not punished. Mofcom did not respond to queries from the Post. Companies like BYD and Jetour that were contacted by the Post declined to comment.

The EU voted to impose tariffs on Chinese-built pure-electric cars following an anti-subsidy investigation that began in September last year. The new 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.

Shanghai-based SAIC Motor, the largest of China’s “big four” state-owned carmakers, faces the highest tariff rate of 35.3 per cent. BYD will be issued an additional tariff of 17 per cent if it ships Chinese-made pure electric cars to the EU, while Geely’s rate is 18.8 per cent. Tesla cars assembled at its Gigafactory in Shanghai are subject to a lower duty of 7.8 per cent. Other Chinese carmakers will have to incur a 20.7 per cent rate.

In response, China has threatened to levy ­tariffs on European products like dairy items.

“It is advisable for Chinese carmakers to take a wait-and-see attitude if they have plans to expand into EU countries,” said David Zhang, general secretary of the International Intelligent Vehicle Engineering Association. “Over the next five years, the tariffs could be adjusted as governments continue their negotiations.”

Chinese companies have been looking to localise their production in Europe to sidestep the tariffs, but analysts said large-scale investments there carry high risks because the mainland EV brands have yet to convince EU consumers about their quality and reliability.

Chinese carmakers have a major 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.

In July, Mofcom urged carmakers not to invest in countries like Turkey and India to better protect their assets and technology, the Post reported last month.

Will China replace India and Japan as Asia’s new investment darling?

https://www.scmp.com/opinion/china-opinion/article/3284566/will-china-replace-india-and-japan-asias-new-investment-darling?utm_source=rss_feed

Among Asia’s leading equity markets, India and Japan have reigned supreme since the eruption of the Covid-19 pandemic. Even before the virus struck, Indian stocks had been enjoying a spectacular bull run, powered by the country’s rapid growth and strong corporate earnings. Since 2014, the Nifty 50, one of India’s main stock indices, has soared nearly 300 per cent.

The fierce rally in Japan’s stock market is more remarkable given that it took over three decades for the country’s two main equity gauges to surpass the levels reached just before the bursting of the late 1980s asset bubble. The combination of the end of decades of deflation, far-reaching corporate governance reforms, and political and policy stability convinced many fund managers the rally was built on solid foundations.

India and Japan also benefited from the deterioration in sentiment towards Asia’s largest economy. The reshaping of global supply chains and the cyclical and structural downturn in China proved a boon for both countries’ stock markets.

Beijing’s zero-Covid strategy, the succession of regulatory clampdowns and the crisis in China’s property market accentuated the appeal of India’s economy. Japan provided investors with a safe, deep and liquid alternative to China’s equity market.

However, over the past months, the two linchpins of the “Asia ex-China” trade have lost some of their lustre. Several factors are at play. The most important one is Beijing’s announcement in late September of a sweeping stimulus package that sent a powerful signal that policymakers are increasingly concerned about the severity of the downturn and are willing to take action on multiple fronts to revive growth.

The facts speak for themselves. In September alone, foreign investors bought a net US$20 billion of Chinese securities, the largest monthly inflow since 2021. The CSI 300 index of Shanghai and Shenzen-listed shares has entered a bull market and is up 23 per cent since September 13. According to data from HSBC, emerging market funds have an overweight position in Chinese stocks for the first time in 10 months while Asian funds’ holdings have risen to a five-year high.

The sharp improvement in sentiment towards China is amplified by vulnerabilities in India and Japan. For some time, foreign investors have been concerned about what Nomura calls “the shaky ground for Indian stocks.”

Even though corporate earnings are falling short of market expectations, Indian stock valuations remain the second most expensive in the world after the United States. Concerns about lofty valuations intensified in June when the ruling Bharatiya Janata Party lost its parliamentary majority, making it more difficult to implement crucial policy reforms.

A bigger shock occurred in Japan on Sunday when the governing Liberal Democratic Party lost its parliamentary majority for the first time in 15 years. Not only did the decision by the country’s new prime minister to call a snap election backfire spectacularly, but it also revealed the scale of public discontent over the cost-of-living crisis, years of declining real wages and the slush-fund scandal.

The emergence of political instability in Asia’s second-largest economy strikes at the heart of the investment case for Japanese stocks. A key pillar of the “bullish Japan” thesis has been the idea that “Japan is a bastion of political and policy stability”, according to Jesper Koll, publisher of the Japan Optimist newsletter. He writes that, after the election result, “this will become more difficult to argue”.

Sentiment towards Japan had already deteriorated before the election, partly because of the greater sensitivity of the country’s equity market to global risk appetite. This year, foreign investors have bought only US$5.9 billion worth of Japanese shares, compared with US$23.9 billion in 2023. Overseas investors have also become increasingly bearish on India, selling US$7.8 billion of Indian stocks in the first three weeks of October, data from HSBC shows.

However, the shifts in Asia’s equity markets should be treated with caution. First, much of what has happened in China’s stock market since the stimulus package was announced is a reduction in regional and global funds’ underweight positions instead of an outright bullish stance. While even a less bearish view of China has had an impact, “policy delivery now needs to meet high expectations” to validate the rally, JPMorgan notes.

This is a tall order. Markets are fixated on the size of the fiscal stimulus as opposed to the effectiveness of the whole package, even though some of the measures, especially a huge debt swap to improve local government finances, are praiseworthy. Investors’ lack of patience and the scale of the policy action required warrant significant caution when it comes to Chinese assets.

Second, while overseas investors have turned bearish on Indian stocks, domestic investors – the driving force behind the rally – remain bullish. Indian mutual funds, banks and insurance firms poured a further US$10 billion into the stock market in the first three weeks of October, taking inflows this year to more than US$50 billion.

The shift in Indian household savings into stocks, while fuelling concerns about excessive speculation, is one of the big trends in Asian finance.

Third, while political risk in Japan has risen, the battle against deflation has been won. Political instability, moreover, might cause the Bank of Japan to be more cautious in raising interest rates, especially given the unpredictability of next week’s US presidential election. Japan remains one of the safest and most widely traded markets in Asia.

China is having a moment. The fact that it is happening when India and Japan are losing some of their appeal is pushing sentiment towards China further. But it remains to be seen if China will prove to be more than just the flavour of the month.

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EU investments in China soar to new quarterly record of US$3.9 billion

https://www.scmp.com/news/china/article/3284530/eu-investments-china-soar-new-quarterly-record-us39-billion?utm_source=rss_feed

Despite calls by European Union political leaders to “de-risk” economic ties with China, EU businesses’ greenfield investments there surged to record levels in the second quarter of 2024, led by German car makers.

Greenfield investments – the creation of a new company or establishment of new facilities – soared to €3.6 billion (US$3.9 billion) in China from April through June, according to the Rhodium Group consultancy.

This was the highest quarterly level on record and well above the average quarterly EU investment of €1.8 billion since 2022. German companies accounted for 57 per cent of the total EU greenfield investment in China over the first half of the year.

The top five EU corporate investors were Germany’s Volkswagen, BMW and chemicals giant BASF, Sweden’s Ingka Group – which owns furniture retailer Ikea – and Dutch-incorporated tech company STMicroelectronics.

According to the Rhodium Group analysis, car makers have accounted for roughly half of all EU investments in China since 2022. The splurge on greenfield sites is likely driven by companies’ desire to localise their production; in a bid to protect their Chinese supply chains from geopolitical tensions, more firms are manufacturing “in China for China”.

The investment surge comes despite a rise in trade tensions between the EU and China, partly centred on the automotive sector.

On Wednesday, the European Commission started collecting hefty tariffs on Chinese-made electric vehicles. The duties are intended to counteract the impact of state subsidies by Beijing, and range from 7.8 per cent for Tesla models imported from China to 35.3 per cent to those made by SAIC Group.

Germany’s car industry has strongly opposed the tariffs, with German Association of the Automotive Industry (VDA) President Hildegard Mueller calling them “a step backwards for free global trade”.

“The countervailing tariffs increase the risk of a far-reaching trade conflict,” she said, adding that “the door for negotiations remains open”.

Documents published by the commission upon confirmation of the tariffs showed just how fiercely the VDA advocated against their imposition. At various points in negotiations, the group suggested the “market shares of Chinese companies were too small to cause the threat of injury”, and that “the market share of Chinese brands would not increase significantly in the foreseeable future”.

German car companies’ heavy trade and investment relations with China also leaves them vulnerable to retaliation from Beijing – a point the VDA made several times.

Already, China’s Ministry of Commerce has floated plans to raise existing tariffs on large-engine cars to 25 per cent from 15 per cent. This would affect German exporters, but also those from Slovakia, whose Prime Minister Robert Fico arrived in Beijing for talks on Wednesday.

“These investments are deepening the dependency of some of Germany’s largest companies on the Chinese market at a time when economic de-risking from China is a stated policy goal in Berlin and Brussels,” the Rhodium report found.

“As we saw in October, when the German government voted against EU duties on electric vehicle imports from China, these deepening ties can have a major influence on Germany’s policy toward China. This is likely to become a growing source of tension within the EU and between Europe and the United States.”

The car industry itself is struggling to deal with fierce Chinese competition. This week, it was reported that Volkswagen would close three plants in Germany partly due to stiff competition from China. On Tuesday, Audi announced it would stop making EVs in Brussels, with reports citing reduced market share in China.

Mercedes-Benz and Porsche, meanwhile, vowed to cut costs following sharp quarterly profit declines, in part thanks to a sales slump in China. Sales of Mercedes-Benz in China were down 17 per cent over the last quarter, compared to a 25 per cent fall in Germany. Operating profits were down 41 per cent at Porsche, with the company blaming “a structural shift in demand” in the Chinese market.

In this climate, Rhodium called the growth in European investment in China surprising.

“China’s business environment is becoming ever more challenging for foreign companies. Business sentiment among European firms in China stands at an all-time low amid growing concerns about a lack of economic reform, increasingly politicised, securitised, and unpredictable policymaking, and faltering growth,” its analysts wrote.

Assault vessel? Research ship? Both? Mystery of new Chinese ship caught on satellite

https://www.scmp.com/news/china/military/article/3284551/assault-vessel-research-ship-both-mystery-new-chinese-ship-caught-satellite?utm_source=rss_feed

China is building a mysterious new ship with some of the features of an amphibious assault craft or a civilian ocean research vessel, recent satellite imagery suggests.

The vessel, which is being built by Guangzhou Shipyard International on Longxue island in southern China, has a large open flight deck, according to pictures taken by Planet Earth last Wednesday and published by US military platform The Warzone on Monday.

Its configuration resembles a light aircraft carrier or amphibious assault ships, such as Japan’s Hyuga class helicopter destroyer or China’s 075 assault ships, according to Tom Shugart, an adjunct senior fellow at the Washington-based security think tank Centre for a New American Security.

Shugart, who circulated the images on X, formerly Twitter, posted that the ship appears to be 200 metres (655ft) long with a beam of about 40 metres, and asked whether it was “possibly a new aircraft carrier or amphibious assault ship of some sort” or even a “‘research’ carrier”.

The Warzone also highlighted the possibility the new ship had been designed to carry military aircraft, saying: “China does have a long history of developing and fielding new maritime scientific research capabilities with clear potential military applicability.”

Shugart also said his attention had been drawn by a 60-metre uncrewed trimaran that is being built nearby by the China State Shipbuilding Corporation’s No 716 Research Institute. The Chinese authorities have not commented on either ship, nor confirmed their purpose.

The shipbuilder has described the trimaran as having a “long-endurance and fully domestically developed propulsion system” and said it “could independently carry out missions under different scenarios”.

The Warzone pointed out the similarities to the US Navy’s Seahunter drone ship, which is designed for anti-submarine warfare.

Beijing has been building up both its navy and fleet of civilian research vessels in recent years and now has 64 of the latter in use, according to a recent report by the Centre for Strategic and International Studies think tank.

Although the country has been looking to expand its scientific research it has been accused of blurring the line between civilian and military technology.

But in recent years, the voyages of its civilian ocean research ships have raised alarm among various parties who are concerned about the blurred boundaries between China’s military and civil technologies.

For example, the Xiang Yang Hong class of ocean survey ships were originally built for the military before being transferred to the civilian fleet.

In February, Sri Lanka refused to allow China’s research ship Xiang Yang Hong 03 to dock at its port, reportedly under pressure from its neighbour India, which has accused Chinese research ships of “spying” on its military.

In July, Taiwanese coastguards warned off a mainland research ship that had come within 20 nautical miles (37km) of the island’s coastline. Taipei said the approach was part of Beijing’s “grey zone” tactics to pressure the island without resorting to full-scale war.

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China’s factory activity returns to growth, ends 5 months of contraction

https://www.scmp.com/economy/economic-indicators/article/3284542/chinas-factory-activity-returns-growth-ends-5-months-contraction?utm_source=rss_feed

Factory activity in China swung back into growth in October on the back of Beijing’s recent policy support, ending five straight months of contraction and signalling that the world’s second-largest economy might be on the edge of a recovery.

The official manufacturing purchasing managers’ index (PMI) – a survey of sentiment among factory owners – rose to 50.1 in October, compared to September’s reading of 49.8, the National Bureau of Statistics (NBS) said on Thursday.

It exceeded the 49.5 projected by economists surveyed by Chinese financial data provider Wind.

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

Meanwhile, China’s non-manufacturing PMI – which tracks both the service and construction sectors – also returned to growth at 50.2 in October, from 50 in September.

Thursday’s data followed China’s launch of a policy bazooka in late September to jolt the economy, an effort that included key rate cuts and a 1 trillion yuan (US$140 billion) liquidity injection into the interbank market.

Beijing has since unveiled additional support measures, with one of its latest moves being a further cut to mortgage rates last week.

More to follow …

China floats wave, wind and solar power plan for South China Sea outposts

https://www.scmp.com/news/china/science/article/3284506/china-floats-wave-wind-and-solar-power-plan-south-china-sea-outposts?utm_source=rss_feed

China is looking to large-scale renewable energy sources – particularly wave power – to overcome electricity shortages at outposts in the South China Sea.

The Guangzhou Institute of Energy Conversion – part of the Chinese Academy of Sciences – is looking into the feasibility of integrating wave, wind and solar energy into power systems to meet the daily needs of users and support development in the contested waters.

Wang Zhenpeng, an associate professor and member of the GEIC team, said on Thursday that the project aimed to prove the feasibility of large-scale renewable energy technology generation in the high seas.

“This initiative builds on the GIEC’s earlier endeavours in wave-energy power generation devices, addressing energy shortages during the remote island development process,” Wang said.

China’s nine-dash claim covers much of the South China Sea, overlapping with rival claims by most other countries in the region. The waters not only harbour a wealth of resources, they are of great strategic importance and a source of tension between the neighbouring claimants.

The team did not say which South China Sea outposts were covered by the project but China has expanded a number of features in the waters into artificial islands over the past decade.

Essential services such as electricity, communications, and fresh water are in short supply in many of these outposts, where diesel presents logistical and environmental challenges. Solar and wind power are also not the whole solution because they do not produce energy all year round.

“In contrast, wave energy can be harvested throughout the year, unaffected by day, night, or cloud cover, making it a consistent and stable energy source,” Wang said.

The project will be headed by Sheng Songwei, a professor at the GIEC, which has been researching wave power since 1979.

The institute has developed a range of technology to harvest wave energy, although it is not clear which systems would be deployed.

One of the systems developed by Sheng’s team is the Nankun power generator, which by the institute’s estimates could support a community of 1,000 people.

The Nankun system was deployed in the southern city of Zhuhai in June last year.

“Chinese wave energy collection technology is now at an international leading level,” Chen Yong, a member of the Chinese Academy of Engineering, said at the system’s launch.

“This development not only improves the commercial viability of wave energy but also supports the growth of marine aquaculture.”

The Nankun has a “hawk-style” power generation platform equipped with wave-absorbing floaters resembling a hawk’s beak on either side.

“Due to the variability of wave energy, we incorporated an energy storage system within the platform. It’s similar to a dam, which collects smaller waves and releases accumulated energy once it’s full,” Wang said.

Researchers have also used wave energy to power aquaculture projects with the institute’s Penghu platform, which submerges itself during typhoons to avoid damage.

The Penghu combines seawater desalination, waste water treatment, and modern aquaculture production facilities such as automatic feeding, fish monitoring, water quality sensors, and live fish transport systems.

Wang said the institute had orders for 20 platforms from five provinces.

He said the team planned to refine the integration of offshore wave power generation platforms to include wind and solar power and energy storage to improve energy supplies for the islands in the South China Sea.

Chinese AI unicorn MiniMax scores big in US with Talkie chatbot entertainment app

https://www.scmp.com/tech/tech-trends/article/3284511/chinese-ai-unicorn-minimax-scores-big-us-talkie-chatbot-entertainment-app?utm_source=rss_feed

Chinese artificial intelligence (AI) unicorn MiniMax has become the mainland’s latest social-media star overseas, on the back of its popular Talkie chatbot entertainment app.

Data from market research firm Sensor Tower showed that Talkie – part of the fast-growing “companion AI” market segment – was the fourth most-downloaded AI app in the United States in the first half of 2024, ahead of Google-backed rival Character.ai which ranked 10th.

Globally, Talkie recorded 17 million downloads in the first eight months of the year, trailing Character.ai with nearly 19 million downloads in the same period, according to a Sensor Tower report last month. Using generative AI (GenAI) technology, both apps enable users to create and have conversations with virtual characters based on fiction or real people.

Shanghai-based MiniMax is expected to take in around US$70 million in sales this year, according to a recent report by The Financial Times citing anonymous sources. The bulk of that revenue is expected to come from the start-up’s avatar chatbot platform, which targets the US and other overseas markets.

MiniMax did not immediately respond to a request for comment on Wednesday.

Companion AI apps are particularly popular among younger users, with those aged 18-35 accounting for more than 70 per cent of the user base for top apps like Character.ai, Talkie, Linky AI and HiWaifu, according to Sensor Tower.

The success of Talkie reflects how a number of Chinese AI companies are seeing greater demand for their GenAI-powered social-media applications in overseas markets, as adoption on the mainland has been slower by comparison.

GenAI are algorithms used to create new content, including audio, code, images, text, simulations and videos.

MiniMax co-founder Yan Junjie, a former executive at Chinese AI giant SenseTime, last May said there was “more free competition in many foreign markets” because the mainland is dominated by Big Tech firms, according to a report by local tech media GeekPark.

MiniMax app Glow as well as Alienchat, developed by start-up Alien Intelligence, have already been removed from mainland app stores. The two apps were previously used to create personalised AI companions.

While ChatGPT creator OpenAI was the first to introduce a text-to-video model, Sora, in a preview last February, the Microsoft-backed start-up has delayed the product’s launch owing partly to security concerns.

That left a void that is quickly being filled by Chinese AI firms, with Kuaishou Technology’s Kling model leading the pack.

Kuaishou vice-president Zhang Di told an industry forum last week that Kling now has more than 3.6 million users worldwide, generating more than 37 million video clips and over 100 million still images.

Short-video app operator Kuaishou in August started offering a monthly subscription to its Sora-like video-generating service, charging 19 yuan (US$2.66) for the first month and 58 yuan per month thereafter under a “gold member” plan. The company said that plan would support the generation of around 3,300 photos and 66 videos per month.

Following Kuaishou’s lead, Alibaba Group Holding and Tencent Holdings-backed tech unicorn Zhipu AI, TikTok owner ByteDance and Beijing-based AI start-up Shengshu have also launched similar video-generating AI tools to early adopters on the mainland and overseas. Alibaba owns the South China Morning Post.

Chinese-developed education apps powered by GenAI have also been making a splash in the US, as their creators seek out overseas markets to drive growth.

Leading the charge are Question.AI from educational technology start-up Zuoyebang and ByteDance’s Gauth. Both GenAI-driven homework helpers were ranked among the top three free educational apps in the US on Apple’s iOS store and Google Play so far this year, according to the latest data from mobile app intelligence service AppMagic.

Still, the No 1 free educational app in the US remains Duolingo, the world’s largest language-learning platform that has been operating for more than 13 years.

Leading human rights lawyer Xu Zhiyong on hunger strike in Chinese prison, family says

https://www.theguardian.com/world/2024/oct/31/xu-zhiyong-hunger-strike-china-prison

Concerns are growing about the health of Xu Zhiyong, China’s most prominent imprisoned human rights lawyer, who is thought to have been on hunger strike for nearly a month.

Xu, a scholar and leading figure in China’s embattled civil rights movement, started his hunger strike on 4 October, according to Chinese Human Rights Defenders, an NGO. He is protesting against what he describes as inhumane treatment in prison, including lack of contact with his family and intensive surveillance by other prisoners, according to reports released through his relatives.

Xu has been detained since February 2020 after he attended an informal gathering of lawyers and activists who had met in December 2019 to discuss civil society and current affairs. Several of the meeting’s participants were arrested, including Ding Jiaxi, another human rights lawyer whose case was handled with Xu’s. The men were convicted of subverting state power. Last year, Xu was sentenced to 14 years and Ding to 12 years, lengthy punishments that the UN’s human rights chief criticised.

It is Xu’s second time behind bars. In 2014, he was sentenced to four years in jail for “gathering crowds to disrupt public order”.

Xu is the founding father of the New Citizens’ Movement, a loose collective of scholars, lawyers and activists who called for improved civil rights and government transparency. The movement has largely been squashed in the era of Xi Jinping, China’s leader since 2012, who has cracked down on civil society.

Since the death of Liu Xiaobo, the Nobel peace prize-winning activist who died in 2017 while serving an 11-year jail sentence, Xu is considered by many to be the most significant dissident in China.

“I would say that Xu Zhiyong at this point is China’s most important living activist,” said Thomas Kellogg, the executive director of the Centre for Asian Law at Georgetown University, who worked with Xu when Xu was a visiting law professor at Yale University. “His career as a lawyer and an activist tracks the broader trend of civil society development and then the crackdown under Xi Jinping.”

Maya Wang, the associate China director at Human Rights Watch, said: “Given that this is Xu’s second imprisonment, he is certainly not someone who is new to Chinese prisons and their mistreatment and torture of prisoners. The fact that he is going on hunger strike now probably testifies to how harshly and badly he is being treated.”

On 23 October, Xu was able to speak on the phone to a relative. He said he had not been able to communicate with his partner, Li Qiaochu, an activist recently released from prison herself. “You must tell Qiaochu and my friends about my hunger strike, otherwise my hunger strike will be in vain. I will continue to insist until they guarantee the right of communication between Qiaochu and me,” Xu said, according to a statement published by his supporters.

Xu’s imprisonment and the difficulty of maintaining contact with the outside world has reduced his fame inside China, where he was once a well-known figure.

In 2009, charges against him for tax evasion were dropped, reportedly because of a public outcry. But Li Fangping, a human rights lawyer and friend of Xu’s, said the Chinese government had been effective at silencing Xu’s impact. “They want him to disappear completely, and they want no one to remember him,” Li said. “There are many young people and lawyers who haven’t heard of Xu Zhiyong today.”

Xu is being held in Lunan prison in Shandong province. The prison could not be reached for comment.

Additional research by Chi-hui Lin

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China’s finance sector comes to grips with new normal in year since landmark conference

https://www.scmp.com/economy/china-economy/article/3284476/chinas-finance-sector-comes-grips-new-normal-year-landmark-conference?utm_source=rss_feed

Over the past year, China’s once-flamboyant financial sector has been subject to strict oversight and rigorous regulatory compliance – a tightening of rules that has dampened moods and slammed shut pocketbooks that had been overflowing for decades.

While this change had already been in motion before the twice-a-decade central financial work conference was held, exactly one year ago – a meeting where President Xi Jinping set forth the goal to forge China into a “financial powerhouse” – weaker-than-expected growth for the world’s second-largest economy has complicated matters.

At banks and securities firms alike, pay cuts have been rampant. The industry has also seen occasional lay-offs – a rare phenomenon for a field worth 481 trillion yuan (US$67.4 trillion) and mostly consisting of state-owned institutions.

At the same time, a structural overhaul has been gathering pace as more resources are diverted to bigger market players, with the smaller specimens consolidated through mergers and acquisitions.

“We had a big meeting and again they kept talking about the seriousness of the situation,” said a Shanghai-based analyst at a top Chinese investment bank on Monday. He spoke on the condition of anonymity.

For the analyst, the biggest change the industry has seen in the past year is much stricter regulatory supervision – though he said this is not necessarily a bad thing.

“It might be good news for the leading securities firms, because after all, the business has become more compliant,” he said.

But sometimes the supervision could become so broad that incentives to work are curtailed, he added. Changes to salary tables and non-market interventions like “window guidance” – where regulators instruct securities firms directly to refrain from selling – have been on the rise.

In the statement issued after last year’s conference, “outstanding financial and economic risks” were brought to the fore. Their prevention was deemed an “eternal theme” for China as it deals with a prolonged crisis in the property market and growing debt burdens for local governments, as well as greater turbulence in the geopolitical environment.

Controlling risks has not been limited to institutions; the list of officials and company executives under investigation for corruption was most recently updated on Sunday, with the addition of a deputy general manager at Bank of China named Guan Xiaohu.

The names on that list are the tip of the iceberg for personnel changes in the sector. Massive reshuffles in senior management have taken place over the last year, with many others transferred or forced to relinquish their posts.

The banking sector is the spine of China’s financial industry, accounting for over 90 per cent of overall assets as of the second quarter of 2024.

The country’s banks have experienced persistent profitability pressures due to tepid demand for retail loans and narrowing net interest margins, said Elaine Xu, director of Asia-Pacific Financial Institution at Fitch Ratings.

Weakness in property and local government-related exposures are weighing on domestic demand, Xu added, while government initiatives to bolster the economy are likely to cause further strain on margins.

Though tackling risks has been designated as a top priority, she said, there was a modest pickup of non-performing loans in residential mortgage loans due to weak incomes and declining property prices.

However, Xu added, the systems’ non-performing loans ratio stood at 1.6 per cent at the end of the second quarter – similar to the year before – thanks to active resolution and regulatory forbearance.

For many in the industry, sentiment took a positive turn near the end of September, when Beijing announced that it is mulling a large-scale stimulus to boost the economy – although few think the good old days are coming back.

“We do not expect a sharp rise in credit growth or a reversal of previously implemented financial reforms, as China authorities remain highly committed to maintaining general financial stability,” Xu said.

Chinese student in Michigan arrested for trying to vote in 2024 US presidential election

https://www.scmp.com/news/china/article/3284534/chinese-student-michigan-arrested-trying-vote-2024-us-presidential-election?utm_source=rss_feed

A Chinese student at the University of Michigan was arrested on Wednesday after he found himself caught up in the Republican campaign in recent months claiming widespread voter fraud by illegal immigrants.

The Michigan Department of State said the unnamed 19-year old student voted in the US presidential election on Sunday in Ann Arbor and was subsequently charged with acting as an “unauthorised elector attempting to vote” and with “perjury” for making a false statement to secure registration.

“Only US citizens can register and vote in our elections,” the state office said, noting that voting by non-citizens was extremely isolated and rare.

“It is illegal to lie on any registration forms or voting applications about one’s citizenship status,” it added. “Doing so is a felony.”

US congressman John Moolenaar, a Michigan Republican and chair of the House select committee on China’s Communist Party, seized on the issue.

Moolenaar is running for re-election in the battleground state widely regarded as one of several in the country that will determine who will win the tight presidential race.

In a press release, the lawmaker slammed Michigan’s state secretary, Jocelyn Benson, for not preventing the student from voting.

Moolenaar also urged the university to expel the student “for violating our laws” and criticised state leaders who should “take serious action against the Chinese Communist Party’s attempts to influence our state”.

Moolenaar also called on the university’s president, Santa Ono, to shut down its collaboration with mainland-based Shanghai Jiao Tong University, citing its links to China’s military.

“Until these actions happen, our state’s security, elections, universities and auto supply chains will remain vulnerable to CCP influence,” the congressman added.

According to the secretary of state’s office, the Chinese student, who entered the states legally and holds US permanent residency but not American citizenship, registered to vote on Sunday using his student identification and other documents indicating he was a resident of the city of Ann Arbor.

He then reportedly signed a document identifying himself as a US citizen and entered his ballot into an automatic tabulator.

According to The Detroit News, the ballot was cast at an early-voting site in the university’s art museum.

Later, the student reportedly contacted the local clerk’s office, asking if he could retrieve his ballot, although this was not possible once the vote had entered the counting machinery.

US states determine their own voting rules, and under Michigan law, attempting to vote as an unauthorised elector is punishable by up to four years in prison. Perjury can result in up to 15 years in prison.

A joint statement released by Benson and Washtenaw county’s prosecutor, Eli Savit, voiced appreciation for the “swift action” of the clerk who discovered the issue and referred the case to law enforcement.

“Anyone who attempts to vote illegally faces significant consequences,” the two offices said, “including but not limited to arrest and prosecution”.

After narrowly losing Michigan in 2020 to then US Vice-President Joe Biden, Republican candidate Donald Trump claimed falsely that widespread voter fraud influenced the outcome in the state.

In the wake of those claims, bipartisan canvassing boards, court rulings and an investigation by the state’s Republican-controlled Senate Oversight committee all upheld Biden’s victory.

But repeated false claims by Trump that the 2020 election was “rigged” and “stolen” have led to widespread and unsubstantiated claims, heightening scrutiny over the 2024 vote.

Billionaire Elon Musk, a prominent Trump supporter, has posted in recent weeks on social media about Michigan’s voter rolls.

And at a rally in Michigan on Saturday, Trump slammed the state’s early-voting system.

The former president also expressed support for making people “prove” they were US citizens before casting their ballots and restated his view that all voting should occur on Election Day with paper ballots.

“You know what the ridiculous system is,” Trump told supporters. “You have the rest of your life to vote anytime you want. Come on.”

Gabriel Chin of the University of California, Davis School of Law said it was “an unfortunate fact” that crimes committed by non-American citizens “get disproportionate media coverage and are sometimes treated as political footballs”.

“Immigrants commit less crime than native-born Americans,” he added. “I’d bet that is true for election crimes just as it is for other offences.”

AstraZeneca’s China president under ‘ongoing investigation’, company says

https://www.scmp.com/news/china/science/article/3284525/astrazenecas-china-president-under-ongoing-investigation-company-says?utm_source=rss_feed

AstraZeneca’s China president is under investigation in mainland China, the drug company said on Wednesday.

Leon Wang was described as cooperating “with an ongoing investigation”, the pharmaceutical and biotechnology company said in a statement.

“Our China operations continue under the leadership of the current general manager of AstraZeneca China,” the British-Swedish company added.

The company has yet to elaborate whether Wang is in custody, nor have his whereabouts been disclosed.

AstraZeneca China said it would “fully cooperate with the investigation”.

According to his LinkedIn page, Wang joined AstraZeneca in 2013 and became the company’s country president in 2014. He has served as an executive vice-president responsible for commercial operations in China since 2017.

More to follow …

US sanctions China and India suppliers of Russia’s war machine in Ukraine

https://www.scmp.com/news/world/russia-central-asia/article/3284529/us-sanctions-china-and-india-suppliers-russias-war-machine-ukraine?utm_source=rss_feed

The US is sanctioning almost 400 individuals and companies in India, China and Turkey as part of a bid to crack down on a sprawling network that has helped keep Russia’s war machine running nearly three years into the full-scale invasion of Ukraine.

The list of targets includes companies in China, a US adversary that has openly helped President Vladimir Putin, as well as entities in countries that work with the US such as India, Turkey and Switzerland. That risks new friction with the very governments the US is hoping it can count on to further isolate Russia.

The US and its allies have piled thousands of sanctions on Russia since the invasion in February of 2022, yet the country’s GDP is projected to grow 3.5 per cent to 4 per cent in 2024.

The new actions are intended in part as a warning to countries outside the US and Russia about the risk of doing business with the Kremlin, a senior US official told reporters on condition of anonymity.

“As evidenced by today’s action, we are unyielding in our resolve to diminish and degrade Russia’s ability to equip its war machine and stop those seeking to aid their efforts through circumvention or evasion of our sanctions and export controls,” Deputy Treasury Secretary Wally Adeyemo said in a statement.

Shreya Life Sciences, a pharmaceutical company based in India, is accused of sending Russia hundreds of shipments of US-trademarked technology, including advanced servers designed for artificial intelligence and machine learning. India has risen to become Russia’s No 2 supplier of critical goods in recent months, second only to China.

The sanctions also targeted more than two dozen Hong Kong-based entities for shipping components and microelectronics for use in Russia’s defence industry, including Ace Electronic (HK) Co. Last month, a Bloomberg Businessweek story exposed how the company was shipping chips used in a deadly missile attack on Ukraine in 2023.

The Biden administration’s move is the latest step in a so-far unsuccessful push to clamp down on the flow of microchips, machine tools and advanced electronics via third countries that continue to supply Russia’s defence-industrial base.

After the US restricted the flow of such goods via the United Arab Emirates and other nations, India emerged as a new transshipment hub. Earlier in October, people familiar with the matter said that India has surged to become the second-biggest supplier of restricted critical technologies to Russia.

Companies based in Turkey, China and India are accused of sending Russia materiel critical to the war effort, including roller bearings, fuses and microelectronics. The US also sanctioned Anna Tsivileva, the daughter of Putin’s late cousin. She was appointed deputy defence minister this year.

A pair of Swiss lawyers, Andres Baumgartner and Fabio Libero Delco, were among those sanctioned on Wednesday as the US also seeks to put pressure on intermediaries in Switzerland that offer legal cover for continued violations.

The Treasury and the US State Department also targeted elements of the Russian defence-industrial complex as well as Russian officials responsible for procuring critical materials from abroad for use in ships, drones and other weapons systems.

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Biden’s Middle East failures leave door open for Chinese advances

https://www.scmp.com/opinion/world-opinion/article/3283806/bidens-middle-east-failures-leave-door-open-chinese-advances?utm_source=rss_feed

Shortly after winning the 2020 presidential election, Joe Biden vowed to “restore the soul of America, to rebuild the backbone of this nation, and to make America respected around the world again and to unite us here at home”. In the succeeding months, he presented a new global vision for the United States after four years of divisive politics and unilateralist foreign policy under Donald Trump.

In a speech before US diplomats at the Harry S Truman building in 2o21, Biden struck a confident tone by declaring, “America is back. Diplomacy is back at the centre of our foreign policy.”

He set a goal to “repair our moral leadership” and announced the launch of a Summit of Democracy. The latter would “rally the nations of the world to defend democracy globally, to push back … authoritarianism’s advance, we’ll be a much more credible partner because of these efforts to shore up our own foundations”.

In his first State of the Union address, Biden said that “America is on the move again” and went so far as state: “We’re in competition with China and other countries to win the 21st century.” After decades in foreign policy – beginning with his stint on the Senate Foreign Relations Committee and later as vice-president in the Obama administration – the then-newly elected US president enjoyed tremendous credibility around the world.

In Southeast Asia, for instance, the US found more favour among regional thought leaders, far surpassing China, according to the annual State of Southeast Asia survey. Allies in Europe, Australia and Japan, as well as rising powers such as India, also welcomed Biden’s ascent to power.

Four years on, as Biden enters his final few months in office, however, it’s clear that America’s global position is in peril. No place better exhibits the deficiencies of current US foreign policy than the Middle East.

Biden’s calamitous withdrawal from Afghanistan and his mismanagement of a brewing regional war in the Middle East have alienated many nations in the Global South and could hamper US attempts to compete with China over the long run.

Beginning with the Obama administration, a series of US administrations have tried to decouple the country from the geopolitical quagmire that is the Middle East – with varying degrees of success. While the US managed to seal a consequential nuclear deal with Iran under Barack Obama, the Trump administration tried to bury the Israeli-Palestinian conflict by ramming through the Abraham Accords to normalise relations between Tel Aviv and a number of regional governments.

Biden’s foray into the Middle East, however, was bound for disaster. He continued to pursue Donald Trump’s deeply flawed exit plan for Afghanistan and largely overlooked the Palestinian question in attempts to expand the Abraham Accords to include Saudi Arabia. His administration also made no meaningful effort to revive the Iran nuclear deal, which was nixed by the Trump administration, setting the stage for a regional conflagration with dire consequences for American power.

Threats against international organisations investigating alleged war crimes by Israel do nothing to advance US leadership of the “rules-based international order”. With the Biden administration largely sticking to its guns despite civilian casualties rapidly piling up from Gaza to Beirut, the Middle East is quickly becoming a graveyard of international law.

Questions are being asked over whether Biden – who has repeatedly called for ceasefires – is strong enough to rein in a militarily adventurous and vengeful Israel in the wake of the Hamas attacks on October 7 last year or if instead he is secretly supportive of an expanded conflict in the Middle East to weaken the Iran-led axis.

The US now finds itself in the unenviable position of trying to prevent all-out war in the Middle East while risking sleepwalking into a direct military confrontation with Iran. The leadership in Tehran has repeatedly warned of large-scale retribution, including against US interests in the Gulf region, if Israel targets Iran’s critical infrastructure and nuclear facilities.

Any direct conflict with Iran is likely to be catastrophic given its topography, military strength and preparation for attrition warfare. There is also the risk posed by Iran’s ability to choke the global supply of energy by restricting shipments of oil through the Strait of Hormuz.

With the US likely to be bogged down in the Middle East for the foreseeable future, China is in position to exercise its global influence. Beijing has deftly positioned itself as a champion of the Palestinian cause and the broader Islamic world, paving the way for closer strategic cooperation with major Muslim nations.

China can also take advantage of the situation to more effectively present itself as a constructive player and developmental partner in the Middle East and other major theatres of competition. Crucially, direct involvement in festering conflicts in Ukraine and the Middle East could undermine the US ability to effectively respond to any contingency in Asia, especially as China adopts a more confrontational stance in the Taiwan Strait and the South China Sea.

The US is unlikely to be in a position to effectively wage simultaneous conflicts with multiple major adversaries. If anything, China has the option of scaling up its strategic assistance to both Russia and Iran to weaken the US in faraway theatres.

Four years ago, Biden’s arrival as president heralded a new era of revitalised US diplomacy and global leadership against a rising China. Despite his best intentions, however, the country is stuck in multiple conflicts which have only strengthened Beijing’s global influence.

Trump or Harris? Why China-born scientists fear US shadow of suspicion will persist

https://www.scmp.com/news/china/science/article/3284513/trump-or-harris-why-china-born-scientists-fear-us-shadow-suspicion-will-persist?utm_source=rss_feed

The presidential race between and comes as geopolitical tensions escalate on multiple fronts. In the 14th report of an , Ling Xin looks at the stakes for Chinese-born scientists after government investigations targeted researchers.

Experimental economist Yan Chen is not so much hoping for a Harris win as hoping for a Trump loss in next week’s US presidential election

“It is not going to be a good outcome for the Chinese-American scholars if Donald Trump gets elected,” said Chen, who works at the University of Michigan, Ann Arbor.

“If is elected, there will be a lot of unknowns, but at least we know she’s half Asian and the child of an immigrant scientist. I’m hoping she will have more empathy towards the Asian and scholars community,” Chen said.

, a physicist at Temple University in Philadelphia, is not won over by either camp, saying that both the Trump and Biden administrations had viewed China as the biggest threat to the US.

“This is a point that has been driven home by both parties, and it is the new geopolitical reality we all live in,” he said.

While their perspectives on the candidates may differ, scientists like Chen and Xi have a major area of common ground – they have been discouraged by the recent passage of to reinstate the Trump-era . The initiative was meant to combat economic and technological espionage from China, but ended up disproportionately affecting academics of Chinese descent before it was shut down in 2022.

The bill – passed with the support of 214 Republicans and 23 Democrats last month – is not expected to advance in the Senate. However, the community fears that a new version of the may be inevitable.

“It’s just a matter of time,” Xi said. “‘Chinese-born scientists are spies’; as long as this assumption remains unchanged, there will be more effort to bring it back. I would not be surprised if the China Initiative is reinstated at some point in the future.”

Denis Simon, a visiting professor at Duke University’s Asian/Pacific Studies Institute, emphasised that Chinese-Americans had been at the forefront of advancing US science and technology.

“This action by the House is purely political and reflects an unwarranted fear of people who have given so much to this country,” said Simon, a long-time STEM educator and former executive vice-chancellor of Duke Kunshan University in China.

The US Department of Justice officially launched the China Initiative in 2018. Before long, the programme was scrutinising Chinese-born researchers over issues such as failures to disclose academic affiliations or income in China – matters not directly related to economic espionage or technology theft.

The initiative has not exposed a single spy, however many researchers who were investigated have lost their jobs, and lives have been turned upside down.

Franklin Tao, a former tenured associate professor in chemical engineering at the University of Kansas, spent five years fighting legal battles to overturn convictions for allegedly concealing his research ties to China.

Despite support from community donations and his wife working three jobs, Tao’s efforts to defend himself virtually bankrupted his family. By July, he still owed over US$1 million in legal fees to his lawyer.

Anming Hu, a Chinese-Canadian professor at the University of Tennessee, Knoxville, said his ordeal under the China Initiative began when an FBI agent used Google to find information about a summer seminar he had given in China. The agent then used Google Translate to render the content in English.

“The FBI’s actions in my case demonstrated a fundamental misunderstanding of academic activities and criminalised any professional connections to China, even when they were legitimate,” he said.

In September 2021, Hu was acquitted of all charges after a federal judge found the evidence insufficient for a conviction. However, the prosecution devastated every aspect of his life and inflicted immense harm on his family, Hu said.

“To this day, my wife still feels anxious whenever the phone rings in the afternoon – it was during such a call that our son informed her of my arrest. The stress caused her to lose a significant amount of hair, and my sons became frightened of living in the US,” he said.

It took two years for his family to regain a measure of normalcy, Hu said, but the emotional scars “will remain with us forever”.

As one of the earliest subjects of the investigations, Xi said his volume of research had shrunk significantly. Many scientists had either cut their workloads or simply stopped applying for federal grants, he said.

The scientists have also become extremely cautious. “Now, I check everything five or six times, going back and forth to make sure it’s accurate and that nothing can be twisted. It’s so stressful,” Hu said.

Xi’s ordeal began well before the China Initiative began, but it was no less dramatic.

In 2015, he was arrested at gunpoint and charged with sharing information about a device known as a “pocket heater” with researchers in China. Relying on intercepted email exchanges between Xi and his Chinese colleagues, the FBI mistakenly confused the device with some other superconducting technology that had been in the public domain for years.

Xi’s case was dropped later that year. “But if you think about it, my case happened before the China Initiative was even launched. It was during the Obama administration,” he said.

According to research by Andrew Chongseh Kim, a foreign lawyer at Bae, Kim & Lee in Seoul, South Korea, bias against Chinese-born individuals in economic espionage investigations began as early as 2009.

While practicing law in Texas, Kim questioned whether cases like Xi’s were isolated incidents sensationalised by the media, or part of systemic issues within the US government. “I didn’t know what I would find,” he said.

After going through every name charged with economic espionage between 1996 and 2020, Kim said he was shocked by the numbers.

“From 1996 to 2008, only about 16 per cent of defendants accused of economic espionage crimes were of Chinese origin. But that percentage tripled in 2009, and since then, the majority of defendants have been of Chinese descent,” he said.

The shift might indicate when the US began to see China as a serious economic rival – and threat, he noted.

Kim recalled investigations targeting China-born researchers at the University of Texas MD Anderson Cancer Centre around 2016. The FBI had examined years of emails from dozens of researchers at MD Anderson, almost all of whom were Chinese-Americans. Federal and state authorities questioned these researchers, many of whom were US citizens and, in one case, even installed a hidden surveillance camera, Kim said.

None of the investigations uncovered spies or espionage, according to Kim. However, many leading cancer researchers were fired, blacklisted from future government research grants, and effectively became unemployable in the US.

The investigations into the life sciences, later by the National Institutes of Health (NIH) – the world’s largest medical research funding agency – have disrupted lives in much the same way as the China Initiative.

For example, according to an anonymous source, at least three China-born researchers at a university in the US Midwest were investigated for their China ties, denied access to their labs and students for two years, and had their NIH grants reassigned to other faculty members.

The researchers, who declined to speak to the media fearing retaliation, each made different decisions after their careers were put on hold. One retired early and another resigned, with both returning to China. The third researcher stayed at the university, focusing on teaching until they were allowed to resume research.

On September 16, a public forum was held by the Asian American Scholar Forum on NIH leadership to meet with Chinese-American scholars and hear their concerns.

“It was a good first step,” said Chen, who attended the event online, noting that the leaders seemed willing to engage with the community and acknowledge the overzealous targeting of researchers of Chinese descent.

Chen stressed, however, that accountability was necessary. “Someone needs to apologise or resign. Those who made phone calls to universities pushing them to implement these punishments need to apologise or resign. The victims should be compensated – at the very least, they deserve to have their research funding back,” she said.

The chilling effect of the China Initiative has also been a significant factor in the decline of Chinese STEM students studying in the US, according to Simon, from Duke University.

“We are in danger in the United States of a dramatic impact on our talent pipeline … Whether it’s artificial intelligence, quantum computing, or life sciences, a large part of the faculty and research community working in these cutting edge areas happens to be ethnically Chinese,” he said.

With 40 years of experience working in STEM education in the US and China, Simon said he was among those trying to build bridges of understanding and trust between the two countries. “Even when the political relationship soured, science, technology and education could have served as a support infrastructure,” he said.

However, science and technology have become flashpoints themselves over the past five years. “They’ve been torn asunder by congressional activities, by former president Trump, and to the great surprise of many, by the Biden administration continuing in the same vein,” he said.

“American universities are running scared these days,” Simon said. “They fear that if they became too friendly to China or enrolled too many Chinese students, they could lose access to federal research dollars.”

Many say that if Harris is elected, there will be no radical change in US policy toward China. “What worries me is that the conflicts in science, technology, talent and education will do such damage to the relationship that it could take us 10 years to recover,” Simon said.

The US would lose by cutting off access to China, he said. “We clearly need access to China to understand not only their current science and technology, but also where it is headed, in order to avoid any kind of ‘technological surprise’. That is very important.”

Even since the China Initiative was officially terminated, the Department of Justice has continued to investigate China-born researchers.

New cases have focused on charges related to traditional espionage, violations of the Foreign Agents Registration Act, and transnational repression, according to Ashley Gorski, senior staff attorney at the American Civil Liberties Union.

Meanwhile, the NIH and universities are still conducting investigations into disclosure issues. These inquiries had remained behind closed doors, but raised serious concerns about due process and discrimination, Gorski said.

“I’m deeply grateful for the independent legal system in the US that ultimately upheld justice and proved my innocence,” said Hu, the Chinese-Canadian professor at the University of Tennessee, Knoxville. “However, the malicious prosecution of Chinese-American scientists is a short-sighted approach that undermines the foundation of this country’s leadership in science and technology.”

“As a nation, we can only grow stronger by learning from these mistakes and ensuring that such injustices are never repeated,” he added.

The China Initiative was fundamentally wrong, Xi said, arguing that it was discriminatory by nature, based solely on people’s origins.

“It goes against the basic ideals of the US,” he said.

Xi urged Chinese-American researchers to speak out in defence of their rights. “We didn’t come to the US just to enjoy the benefits of democracy without participating in or contributing to it. We need to be part of that democracy,” he said.

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