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• Slovakia keen to join China-led group on Ukraine war, visiting leader tells Xi Jinping
• Updated Chinese J-15 fighter jet spotted in aircraft carrier drill footage
• China’s forex reserves should move away from US dollar to curb risks: economist Zhang Ming
• Chinese woman takes DNA test after joke about her looks, finds out true identity
• China’s clean-energy boom creates 7.4 million jobs, nearly half the global total
• What will a Trump or Harris win in the US election mean for China? SCMP editors give their view
• Xi Jinping wants ‘high-quality jobs’ for China’s struggling youth
• Chinese commentator Hu Xijin returns to social media after more than 3 months of silence
• Thailand set to be first country to join Chinese and US-led space initiatives
• Malaysia’s Anwar Ibrahim poised for third China trip in 2 years
• China’s crowded and closed generative AI market is facing a shakeout, analysts say
• China’s listed stocks see ever-thinner profits as economic slump chips away at bottom line
• Outcry forces Chinese health body to remove birth propaganda aimed at boosting pregnancies
• China students rally for pancake vendor with cancer-hit wife, form long queues to buy food
• What is China’s biggest security threat? The US, says a top Chinese researcher
• Can the dignity of tomatoes be protected against Chinese exports?
• SAIC Motor, Geely deny breaking ranks in China’s bargaining with Europe on EV tariffs
• New Zealand’s tech warning reflects ‘significantly hardened’ stance towards China: analysts
• North Korean defectors and Ukraine, Chinese celebrity transformation: SCMP’s 7 highlights
• China live-streamer earns less than US$1 a month, faces ‘idiot’ insults from firm staff
• Chinese market regulator grants HSBC domestic fund custody licence
• China’s factory activity swings back into expansion in October: Caixin PMI
• With EU tariffs and the US rivalry, will China be battling 2 trade wars at once?
• US calls on a silent China to use its sway over Russia and North Korea
• US and China in ‘robust conversation’ on North Korea sending troops to Russia: Blinken
• Amid EV row with EU, China to ‘stand on grounds of fair competition’, Mofcom says
• Janet Yellen and Chinese central banker discuss financial monitoring and money laundering
• Only 30% of US public think China trade has created jobs in their state: survey
• The heated US-China cable competition under the seas
• Combined China and US pressure could get warring sides to talk peace
• China’s tech factories will be a target, for Harris or Trump. Is it too late to matter?

Slovakia keen to join China-led group on Ukraine war, visiting leader tells Xi Jinping

https://www.scmp.com/news/china/diplomacy/article/3284884/slovakia-keen-join-china-led-group-ukraine-war-visiting-leader-tells-xi-jinping?utm_source=rss_feed

Slovakia is ready to join the “Friends of Peace” group launched by China and Brazil at the United Nations to resolve the war in Ukraine, the Central European country’s prime minister said on a trip to Beijing.

Slovak Prime Minister Robert Fico met Chinese President Xi Jinping on Friday. During the meeting, Fico said that “China’s position on the Ukrainian crisis is fair, objective and constructive”, according to a Chinese government statement.

“Slovakia is willing to join the ‘Friends of Peace’ group on the Ukrainian crisis and work with China to contribute to promoting a political solution to the crisis,” it continued.

Posting on his own Facebook page, Fico said: “We are very keen on China’s diplomatic efforts dedicated to regulating the conflict in Ukraine and have exchanged our attitudes on this fundamental issue.”

According to the Chinese statement, Xi said that he “appreciated Slovakia’s objective, rational and fair attitude, and welcomed Slovakia and more like-minded countries to work with China to play an active role in promoting peace and dialogue”.

Xi said he hoped that the incoming European Union commissioners, expected to be in place by the end of November following confirmation hearings this month, “would adhere to the positioning of China-EU partnership, adopt a positive and pragmatic policy towards China, properly manage differences, and avoid politicising economic and trade issues”.

The two sides issued a joint statement on the establishment of a strategic partnership between China and Slovakia, according to the Chinese statement.

Fico’s remarks, however, could enrage many of his counterparts in the European Union and Nato, of which Slovakia is a member.

Both blocs have pushed back against the Sino-Brazilian group, which was launched during the UN General Assembly in September. It also counts South Africa, Egypt, Indonesia and Turkey among its members. The group has called for political and diplomatic means to end the war and has said it will engage with all parties at different levels to achieve lasting peace.

The group does not enjoy the backing of Ukraine, with both the EU and Nato maintaining that peace terms cannot be set without the full support of Kyiv, since it was the invaded party in a war that has raged since February 2022.

Ukrainian President Volodymyr Zelensky questioned the motives of the group at the General Assembly.

“If someone in the world seeks alternatives to any of these points or tries to ignore any of them, it likely means they themselves want to do a part of what [Russian President Vladimir] Putin is doing,” Zelensky said, referring to the points of his own peace plan.

Fico’s statement on joining the group also advances the establishment of two distinct blocs within the EU: the mainstream of 25 members who fully support Ukraine, and a smaller faction of Hungary and now Slovakia, which are willing to engage with Russia and are increasingly on the same page as China.

Both Hungary and Slovakia voted against the European Commission’s plans to impose tariffs on Chinese-made electric vehicles last month, along with Germany, Slovenia and Malta.

In an hour-long interview on Russian state television this week, Fico accused the West of “prolonging the war” through its support for Ukraine and said he was ready to negotiate with Putin.

In response, Slovakia’s former prime minister Igor Matovic dismissed Fico as a “horrible treacherous ferret”.

In his Facebook post, Fico said his visit showed “mutual respect between both countries”.

“There has never been such a large representation of Slovak government and business circles on a visit in any other country in the world,” he said.

Ahead of the trip, Fico said he hoped to sign business deals to boost Slovak exports to China, adding that he would also visit Brazil and Vietnam.

“We want to go where we see business opportunities; there’s no point in visiting places across Europe where practically all options have been exhausted. We need to look for new opportunities,” Fico was quoted as saying in the English-language news outlet Slovak Spectator.

Updated Chinese J-15 fighter jet spotted in aircraft carrier drill footage

https://www.scmp.com/news/china/military/article/3284876/updated-chinese-j-15-fighter-jet-spotted-aircraft-carrier-drill-footage?utm_source=rss_feed

A more powerful and advanced version of a Chinese ship-based jet fighter seems to be in service, appearing in official footage of aircraft carrier drills, according to a military analyst.

A number of J-15Bs, an updated variant of the fourth-generation twin-jet J-15 Flying Shark, were spotted in footage and photos of high-seas navy exercises released on Thursday.

Without specifying when the exercises took place, the People’s Liberation Army Navy said the drills were the first time two of the country’s aircraft carriers – the Liaoning and the Shandong – had been involved in a joint exercise on the high seas.

Along with an escort fleet, the carriers were accompanied by at least 32 J-15s, China’s carrier-based fighters.

Andreas Rupprecht, a Germany-based China military aviation analyst, said that at least nine of the 12 airborne fighters in the images were J-15Bs.

“I must admit I’m still more than excited to see the [J-15Bs] finally in service and I cannot wait to see better images of it,” Rupprecht said.

“But there is one downside. It seems that the J-15Bs still use the old AL-31F [engines],” he said, rather than the domestically produced WS-10 turbofans, which have reportedly been tested.

Rupprecht said the J-15B had a new active electronically scanned array radar, advanced air-to-air missiles, upgraded avionics, and a cockpit tailored for carrier operations. It was also equipped for catapult launches – a more advanced form of launch system than ski-jump carrier decks.

The J-15Bs were “the pinnacle of Chinese flanker development”, and had advances that Russia did not achieve with its Su-27K/Su-33 models, he said. Flanker aircraft are designed for exceptional manoeuvrability.

He said this variant would be a cornerstone of China’s naval air power for years, comparable to the US Navy’s F/A-18E/F Super Hornet.

Two of the aircraft on the Shandong also appeared to be J-15Ds, a variant designed to interfere with enemy radar and missile systems, he said.

The J-15D, first showcased by state broadcaster CCTV in March 2024, features advanced electronic countermeasures and reconnaissance tools.

According to Pentagon reports, the aircraft is a big boost to the combat power of China’s aircraft carriers, equipping them to carry out long-range anti-ship and ground attacks while improving their defensive and offensive electronic warfare capabilities.

Military commentator and former PLA instructor Song Zhongping said the aircraft had evolved to expand the military’s mission range.

“Like the US F-16, which has evolved through numerous versions – more than 70 production batches now – the development of multiple variants in Chinese fighter jets is aimed at building versatile, multi-role combat capabilities,” Song said.

“It’s natural for a leading military power to advance its military equipment in this way, and the J-15 is no exception.”

Citing the Pentagon, the US Congressional Research Service said in a report in January that the PLA Navy would be the biggest in the world by 2030, with an overall battle force of 435 ships, and a substantial increase in “major surface combatants”.

China’s forex reserves should move away from US dollar to curb risks: economist Zhang Ming

https://www.scmp.com/economy/china-economy/article/3284850/chinas-forex-reserves-should-move-away-us-dollar-curb-risks-economist-zhang-ming?utm_source=rss_feed

Beijing should adjust its strategy in managing China’s US$3.3 trillion worth of foreign-exchange reserves, given the lingering threat of US financial sanctions, according to a prominent Chinese economist.

The warning by Zhang Ming, deputy director of the Chinese Academy of Social Sciences’ Institute of Finance and Banking, is the latest high-profile call for diversification and reducing exposure to the US dollar.

It also reflects the rising concern in Beijing’s policy circles that China needs to prepare to counter any possible actions from the new US president, with the election set to take place next week.

“The management of these [forex] reserves faces significant challenges in maintaining and increasing their value,” Zhang wrote in an article published on the website of the China Chief Economist Forum think tank on Tuesday.

“Particularly, [China must] address the financial risks associated with possible future sanctions from the US.”

China’s foreign-exchange reserves, the largest in the world, and driven by its high export revenues, totalled US$3.316 trillion as of September, according to the State Administration of Foreign Exchange.

The world’s second-largest economy has not revealed the current composition of its forex reserves, but US dollar assets accounted for 55 per cent back in 2019, and they are widely believed to still make up the majority.

According to data released by the US Treasury last month, China offloaded US$1.9 billion worth of US Treasury bills in August, reducing its holding to US$774.6 billion.

China has also slashed its holding by around a third in the past three years, and Japan has become the largest foreign owner of US Treasury securities.

Zhang said the US dollar has been “weaponised” following recent geopolitical events, posing new challenges to the central bank’s strategy for internationalising the yuan.

Blanket financial sanctions from the US and its allies were imposed on Russia following its invasion of Ukraine in February 2022, including being kicked out of the Swift international payment messaging system and seeing around US$300 billion worth of its foreign-exchange reserves frozen.

Such sanctions triggered concerns in Beijing, as China’s commercial banks could also be sanctioned for their business ties with Russia or because of other issues.

In light of such lingering risks, Zhang called for greater diversification of foreign assets, including a shift from their control by the central bank to more holdings among Chinese corporations and individuals.

Additionally, he said China should consider establishing a new sovereign pension fund to diversify foreign-exchange reserve investments.

“As the ageing population intensifies and the domestic savings-investment gap changes, China may face a situation in which the current account shifts from a surplus to a deficit,” he added.

Sovereign funds have been used around the world as a way for countries to invest in foreign assets with a decentralised approach and diversified portfolio.

In 2007, Beijing founded the China Investment Corporation, a sovereign wealth fund overseeing part of China’s forex reserves, with about US$200 billion worth of assets under its management.

US Treasury Secretary Janet Yellen said in April that Washington was prepared to use its sanctioning tools against China “if necessary”.

Chinese woman takes DNA test after joke about her looks, finds out true identity

https://www.scmp.com/news/people-culture/trending-china/article/3284479/chinese-woman-takes-dna-test-after-joke-about-her-looks-finds-out-true-identity?utm_source=rss_feed

A woman in northern China discovered she was not her parents’ biological daughter after a DNA test was prompted by her colleagues’ joke that she “did not look local”.

As a result, there has been widespread support from netizens encouraging her to search for her birth parents.

On October 24, Henan Broadcasting System reported that the 24-year-old woman, surnamed Dong, from Xinxiang in Henan province, shared during an interview how her colleagues often commented on her distinctive appearance.

“I’ve always lived in Xinxiang, but after I started working, my colleagues would say, ‘You do not look like us at all. Your nose is wide, you have thick lips, and your eyes are bigger and deeper than ours. You do not look like someone from Henan at all,’” Dong recalled.

Prompted by these comments, Dong approached her parents for answers, but they were evasive and even provided conflicting information about her birth date.

Driven by a growing curiosity and confusion about her origins, Dong decided to take a genetic test.

“Every night, I kept wondering, where do I really come from?” Dong reflected.

However, the test indicated that she likely originated from Guangxi province, located in the far southern part of China, showing no genetic connections to Henan province.

After the media reported on the incident, a woman, surnamed Qi, from Guangxi reached out, suspecting that Dong might be her long-lost daughter due to their resemblance.

“It’s quite a coincidence that this young woman is also 24. I look at her and feel she resembles my daughter in every way, but I never saw my daughter after she was born. I experienced immense pain after giving birth and cried to my husband every day, wondering where my daughter went,” Qi recounted.

Qi’s son has even begun referring to Dong as his sister, saying: “My mum is nearly 100 per cent sure, and I want to find my sister too.”

Qi and Dong share a striking resemblance, including similar facial features. Dong’s given name also contains the word “Lan”, the same as that of Qi’s lost daughter.

“If it really turns out she’s my family, then it’s truly the most wonderful news,” Dong expressed.

Currently, Qi and her son are arranging to travel to Henan to meet Dong.

Local volunteers from Baobei Huijia, a national group dedicated to finding lost young people in Guangxi province, have also been contacted to assist in collecting DNA samples and conducting tests.

Chinese netizens marvelled at the coincidence and voiced their support for Dong’s quest to locate her birth parents.

“It’s important to clarify and figure out if she was kidnapped, sold, or legally adopted. The circumstances make all the difference!” one person commented.

“This is so dramatic, but I hope she just got lost and was not abandoned. That would be so hard to bear! Wishing this young woman finds her birth family soon and sending hugs to her,” another remarked.

China’s clean-energy boom creates 7.4 million jobs, nearly half the global total

https://www.scmp.com/business/china-business/article/3284788/chinas-clean-energy-boom-creates-74-million-jobs-nearly-half-global-total?utm_source=rss_feed

China led the world in employment related to renewable energy last year, and the sector is expected to continue generating jobs, as record-breaking production, installation and export of solar panels, wind turbines, batteries and electric vehicles (EVs) stand in contrast to bleak job prospects in other sectors.

An estimated 7.4 million people in mainland China worked in renewable-energy jobs in 2023, representing 46 per cent of the global total and a 32 per cent increase over 2022, when China accounted for 41 per cent of the global total, the International Renewable Energy Agency (IRENA) and the International Labour Organisation (ILO) reported last month.

The boom in renewable-energy jobs contrasts with the country’s struggling property market and surging youth unemployment. The September jobless rate for the 16- to 24-year-old age group, excluding students, was 17.6 per cent – or roughly one out of every six people, according to data released by the National Bureau of Statistics last week.

“The annual financial reports of the leading listed Chinese renewable companies show that they have been expanding their employment in recent years despite stock market fluctuations,” said Shen Xinyi, researcher and China team lead at Helkinsi-based Centre for Research on Energy and Clean Air (CREA). “Notably, most job increases are in skilled workers and research-and-development staff.”

With China accounting for close to two-thirds of new global installations of solar and wind capacity last year, Beijing expects clean energy to be a driving force for its sluggish economy. However, the sector might not be a cure-all due to its limited size versus looming unemployment growth associated with a potentially painful transition away from fossil fuels, energy experts said.

Employment in renewable-energy jobs worldwide last year grew 18 per cent to 16.2 million – the largest increase on record – amid strong growth in generating capacity and equipment manufacturing, according to IRENA and ILO.

Europe and Brazil came well behind China with 1.8 million jobs and 1.56 million jobs, respectively, followed by the US and India with close to 1 million jobs each, the organisations said.

The rapidly expanding solar photovoltaics (PV) sector was the main driving force in employment, supporting 7.2 million jobs worldwide last year, according to IRENA and ILO. Among these, 4.6 million were in China, they said, as the country added 217 gigawatts of solar panels last year, more than half of global additions.

The International Energy Agency (IEA) last week said China’s solar PV sector created around 5.1 million jobs in 2023, accounting for more than 70 per cent of global PV employment.

In the wind sector, China also dominated, contributing 52 per cent of the global total of 1.5 million jobs last year, followed by the EU at 21 per cent, according to IRENA and ILO.

“While other countries are undertaking growing efforts to expand their own solar PV supply chains, the extent of China’s lead is such that it will not be overcome for a longer period of time,” Francesco La Camera, director general at IRENA, told the Post on Thursday. “The same is true in the wind industry.”

In contrast, jobs in China’s property sector fell by around 500,000 from 2021 to 2023, real estate research group Ke Yan Zhi Ku reported in January.

Despite the contraction, the construction sector still accounted for 13 per cent of gross domestic products (GDP) growth in 2023, according to Shen.

Like the rest of the world, China faces the difficult task of shifting a huge number of workers from fossil fuel-related industries to greener, sustainable sectors, according to ILO.

Nearly half a million coal miners face unemployment globally by 2035 due to mine closures and the shift towards clean power, with China and India likely to be hit hardest, a report by San Francisco-based non-profit Global Energy Monitor found last year.

“Investing in education, skills and training helps reskill all workers from fossil-fuel sectors, address gender and other disparities, and prepare the workforce for new clean-energy roles,” said Gilbert F. Houngbo, director general at ILO.

“It is essential if we are to equip workers with the knowledge and skills that they need to get decent jobs, and to ensure that the energy transition is a just and sustainable one.”

Clean energy contributed a record 11.4 trillion yuan (US$1.6 trillion) to China’s economy in 2023, or 9 per cent of GDP, up from 7.2 per cent in 2022, according to an analysis by CREA in January. The sector was the largest driver of GDP growth, accounting for 40 per cent.

Without clean energy, China’s GDP would have missed the government’s “around 5 per cent” target, rising by only 3 per cent instead of the 5.2 per cent recorded last year, CREA found.

What will a Trump or Harris win in the US election mean for China? SCMP editors give their view

https://www.scmp.com/opinion/article/3284668/what-will-trump-or-harris-win-us-election-mean-china-scmp-editors-give-their-view?utm_source=rss_feed

There is just one week to go before Americans decide whether Donald Trump or Kamala Harris will be the next US president.

On Thursday October 31, SCMP executive editor Chow Chung-yan, China editor Wendy Wu and North America Bureau chief Robert Delaney shared their insider knowledge in a subscribers-only event moderated by managing editor for content Yonden Lhatoo.

Below is an edited version of the main questions from subscribers and the panel’s responses. To watch the webinar in full, click on the recording below.

At the risk of oversimplification, I will say that Trump represents greater uncertainty.

The Chinese officials by now are familiar with him and his style, but no matter how powerful the president is, the complicated China-US relationship requires a lot of work between officials at all levels. China actually put 28 Trump administration officials on the sanctions list. What if Trump puts someone who is on the sanctions list back into the government?

Over the past four years, China and the US have spent a lot of effort trying to build up communications. If Trump comes back, a lot of these working-level bureaucrats or officials will leave the White House, and then there will be a period of uncertainty.

China and the US also spent a lot of capital to bring back military-to-military communication. If Trump actually comes back, his relations with the military leaders in the US at present are not very good, and he is probably going to bring a wholesale change to that. Then the two sides will need to work from scratch to rebuild trust between them.

So all this is going to be very difficult for the Chinese.

People talk about Trump as someone who knows how to make a bargain, not someone who is going to have direct conflict with China. But I argue that the conflicts between China and the US are more structural rather than any individual’s personal preference.

Some people say that Harris will be more like continuity for China, because by and large, Harris is going to inherit Biden’s policy towards China. And then even though there will also be a round of changes, at least the framework will stay.

But Harris will also be bringing her own people and many people in charge of foreign affairs will probably leave. So that will bring a level of uncertainty as well, but it is just not going to be as great as with Mr Trump.

I don’t really think China has a clear preference because each brings its own issues. And also the relationship between China and the US is really more structural [in terms of the conflicts]. The different candidate will mean that the rhetoric will be different, but the policy direction will remain probably more or less the same.

For example, for the past four years, despite all the lobbying attempts to negotiate, the Biden administration has kept most of Trump’s tariffs in place.

Another example is the so-called China Initiative under Trump. Under Biden, they removed it but actually they fully embraced something very similar.

People talk a lot about Donald Trump will be “America first”, will pay less attention to his allies, and maybe that will present an opportunity to Beijing. But I again will argue that if you compare now and back eight years ago, international politics is very different. I don’t really think [the general direction] will fundamentally shift.

Probably for the past two or three weeks, I would have said Trump. And it’s really just in the past 24 hours where I’m starting to reassess that.

If you had to make a call at this moment today, Wednesday, October 30, I will say it’s probably a little bit more in Harris’s favour at the moment.

I think the Trump campaign committed a major misstep in this rally that he had over the weekend where he invited a comedian on. He made these very disparaging remarks about just about everyone, in particular calling Puerto Rico as an island of trash or island of garbage. So that’s very significant because the reaction from the Hispanic community or the Latino vote, it could be moved by that.

There apparently is somewhere on the order of half a million Puerto Ricans that live in Pennsylvania – don’t quote me on that number. We know that Pennsylvania is a swing state. It’s very key in this election. In some small instances, developments like this can really have an outsized effect.

And then the fact that these polls are so close, it’s a very difficult question.

China’s economy is facing a lot of headwinds domestically and also externally. So no matter who is going to be in the White House for the next four years, China is going to face some questions.

Is China going to fight a trade war on two fronts, both with the European Union and the United States? Is China going to face closer coordination on the tech and economic rivalry across the Atlantic? Will China face an escalation of the US tech containment strategy and will China be able to find and expand its external markets in the emerging economies in the Global South to counter the loss?

But those external issues cannot be clearly cut from the domestic issues.

And the fundamental issue and solution for this is for the Chinese leadership to restore economic resilience to regain the public’s and the foreign investors’ confidence in China.

The market’s expectation for further fiscal stimulus is quite high.

We really need to see something to take place on the ground to move the needle, to revitalise public confidence for career prospects, for income prospects and outlook.

They have to really increase the transparency and policy consistency in order to dispel lingering suspicions and concerns for investors.

If multinational companies continue to relocate their Asian headquarters outside mainland China to Singapore or other cities, China is still going to face a really daunting challenge about this confidence crisis.

While we cannot completely rule it out, I don’t think the likelihood is very high because a lot of this depends on how China will react.

Right now China’s priority is to restructure its economy. China’s priority is to move up the value chain to complete the science and technology transformation.

China realises that time is on China’s side. China is in no rush to start an armed conflict with anyone.

In terms of Taiwan, I think Beijing’s priority now is to put enough pressure on Taiwan to make sure that Taiwan will not opt for a radical move, but at the same time Beijing will use every opportunity to gradually squeeze Taiwan to force them back to the negotiation table.

I also don’t see how there is political will in the US to go into direct conflict with China.

I agree. A Trump administration that actively pushes for anything that would trigger an attack across the Taiwan Strait would be way out of line with what he has said before. The number one concern across the American electorate is economics.

If Harris wins, she would generally continue what Biden has done, and the Biden administration has been determined to keep high-level contact with Beijing.

On both sides you see signs that they do not want to get into a conflict. Of course, Congress is another animal.

I don’t think Hong Kong is an election issue. Even China is rarely mentioned. This election is very much domestically focused. But I do think that no matter who ends up in the White House, the Hong Kong issue will get worse.

There are many people in the US that would see a failure of Hong Kong as in the interests of the US because it will be taken as proof of a failure of Beijing’s policies. Then it can be used as a case example to argue why Taiwan should at least remain to be a separate part from China and why the Chinese mode of governance is problematic.

And the fact is that the US media’s reporting on Hong Kong is very one sided, very one dimensional. But unfortunately that is how the majority of people in the US look at Hong Kong through that [national security] lens.

There are increasing warnings from Chinese researchers and diplomats that the US is escalating tech containment from a “small yard, high fence” to a “thick yard with an iron curtain”. So no matter whether it’s Trump or it’s Harris, for the next four years, this tech war is going to escalate.

China is still gradually making advancements in trying to break through the tech containment. And those containment measures will not ultimately kill China’s technology advances. More than 10 years ago, China’s solar industry was almost killed by the US and EU. But the solar sectors in China revived again and became a global leader again. So I think that time and those technology components might delay China’s tech progress, but given the Chinese strong push on tech self-reliance, progress will still be foreseeable in the near future.

But China needs to be very careful about the closer alliances that the US is trying to forge with its EU partners and also in Asia.

No matter whether it’s Trump or Kamala Harris, I think it is inevitable that the US will put more tariffs on China. The reason is because it’s a structural issue. It’s not just a personal preference.

Also, tariffs are actually a means, not an end. The first time, Trump’s goal was actually to force China to buy more products from the US and to balance this so-called unfair trade where China had a huge trade surplus against the US. The result is that China did end up buying much more from the US, particularly agriculture and energy products. So it’s effective. That is why the Biden administration, despite all the lobbying and the pressure, they by and large kept the Trump tariffs in place.

Now, the Biden administration started what people called the tech war against China, trying to restrict the most sensitive and high end of technology from China – not just the important exports, but also the capital flow, the investment. The aim really is to keep the technology advantage over China. These policies are in fact quite effective. But gradually people in Washington have started to realise the limitations to this approach. The US may still have the lead over China in technology but China is making up for this disadvantage by really strengthening its manufacturing capability. Take the example of chips. Before 2007, China’s share of so-called legacy-chip manufacturing was only 17 per cent. Today it is over 30 per cent.

So China today actually accounts for 30 per cent of the global share in manufacturing. The rest of the G7 put together is actually still not at that level. In the US, particularly from the Trump side, a lot of the talk is about the hollowing out of manufacturing jobs in the US. And the US elite are very eager to bring manufacturing back to the US for various reasons. One way for them to do that is to use tariffs – to protect US manufacturing and to encourage Chinese and also other countries’ manufacturers to move their factory to the US to set up a manufacturing centre in the US.

If Trump or Kamala Harris imposed tariffs on China, China’s way of hitting back would be very different.

Who’s going to win this war? Where does it end? It really depends because the US is weaponising a lead in technology research but China is a weaponising a unique manufacturing capability.

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Xi Jinping wants ‘high-quality jobs’ for China’s struggling youth

https://www.scmp.com/economy/china-economy/article/3284805/xi-jinping-wants-high-quality-jobs-chinas-struggling-youth?utm_source=rss_feed

President Xi Jinping has called upon Chinese officials to find solutions for the country’s prolonged unemployment issues, with the growing number of jobless youth becoming a formidable challenge for Beijing.

On Friday, the Communist Party theoretical journal Qiushi published an article featuring Xi’s speech from a Politburo study session earlier this year, where he called for “full, high-quality employment”, indicating that job creation remains a top priority.

The 2,300-word article follows similar language from Xi in late May, where he urged government personnel to prioritise job creation for graduates and young people, particularly in roles that leverage their knowledge and strengths.

“The unemployment rate may become a more important policy target,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management. “I think [the issue] makes it more likely the fiscal deficit will rise above 3 per cent next year.”

The article shows unemployment is a matter of concern, he said, adding the government is likely to introduce policies to address it in the next year.

In the article, Xi noted China’s development faces risks and “a rise in unpredictable factors,” making stability in the economy and the job market more urgent.

He attributed the current state of employment to factors such as the declining birth rate, an ageing population and the transformative impact of the digital economy.

Xi pledged to create high-quality jobs, which means “workers have not only employment but also stable positions, reasonable income, reliable security and occupational safety,” he said.

“Improving the job quality has become an urgent aspiration of workers.”

The unemployment rate for the 16-24 age group, excluding students, was 17.6 per cent in September, meaning roughly one in six of this group remains jobless.

Although this was an improvement from the previous month, it still represents the second-highest monthly rate recorded this year, with 11.79 million graduates entering the country’s job market in 2024.

Among all jobless groups, Xi listed the employment of young people – especially graduates – as a “top priority” in the article. He emphasised the development of suitable positions for them and encouraged young people to participate in small, medium and micro enterprises, as well as seek employment at the grass roots and in rural areas.

Before revising its methodology and temporarily suspending the release of youth unemployment data last July, China reported a record 21.3 per cent for the metric.

Chinese commentator Hu Xijin returns to social media after more than 3 months of silence

https://www.scmp.com/news/china/politics/article/3284861/chinese-commentator-hu-xijin-returns-social-media-after-more-3-months-silence?utm_source=rss_feed

Hu Xijin, former editor-in-chief of state-owned newspaper Global Times, is back on Chinese social media after more than three months of silence.

Hu reappeared on microblogging platform Weibo with a post on Thursday evening that expressed personal delight at a new bridge over the Chaobai River connecting the outskirts of Beijing with neighbouring Hebei province.

“I’m very happy and want to open my arms to hug it,” he wrote, adding that he and many other Beijing residents had bought homes on the Hebei side because of affordability, and the bridge would ease their commutes to the capital city.

It was Hu’s first post on social media in over three months since he disappeared from the public spotlight in late July following the deletion of his article interpreting a key Communist Party economic strategy document.

There has so far been no official explanation as to why his previously prolific social media activities stopped, leaving many to wonder whether he had faced backlash for expressing his views.

Hu, who left his position at Global Times in 2021, has nearly 25 million followers on Weibo. Known as “Old Hu”, he has not shied away from controversial opinions and has been a prominent defender of Beijing’s policies.

The firebrand former newspaper chief disappeared from social media platforms over the summer after publishing an opinion piece on China’s economic strategy on his WeChat account.

In the July 22 article, Hu wrote that the omission of the phrase “public ownership playing a dominant role” from the Communist Party’s third plenum resolution in June marked a “historic change” towards achieving true equality between private and state-owned economies.

However, his interpretation drew immediate backlash from conservative bloggers, who accused him of violating party discipline, as the “dominant role” of public ownership is enshrined in the party and national constitutions.

Without mentioning Hu’s post, the official People’s Daily later published a front-page commentary to clarify the party’s unwavering commitment to the public sector as the mainstay of China’s economic system, which allows diverse forms of ownership to develop together.

Hu’s WeChat post was soon removed, but he went on to publish six more articles before going silent on all of his social media accounts.

He has not resumed posting on X, the social media site formerly known as Twitter, or the Chinese platform WeChat.

His last update on X, where he has over 566,600 followers, was posted on July 27 when he commented about the Paris Olympics, saying, “China’s AI is bringing the Olympics into the digital era and helping transform Olympic broadcasts!”

His Thursday post on Weibo had more than 8,600 comments as of Friday afternoon, with most bloggers celebrating his comeback.

“Without Old Hu, we can’t fight a narrative war! We need strong voices like you!” wrote one commenter.

“Public opinion must be pluralistic. Your words may not always be correct, but you play a part in the side of … positive energy,” wrote another.

Thailand set to be first country to join Chinese and US-led space initiatives

https://www.scmp.com/news/china/science/article/3284728/thailand-set-be-first-country-join-chinese-and-us-led-space-initiatives?utm_source=rss_feed

Thailand is poised to become the first country to take part in Chinese and US-led space exploration initiatives, despite the two powers being seen as rivals in a new space race.

After signing a memorandum of understanding with China in April to collaborate on the International Lunar Research Station (ILRS), the Thai government has now approved a move to join the US-led Artemis Accords, according to The Nation, a Bangkok-based newspaper.

Joining the accords will give Thailand access to advanced technologies from member countries and enhance its ability to compete globally in the space economy, Thailand’s higher education, science, research and innovation minister Supamas Isarabhakdi said, according to the outlet.

John Sheldon, a partner at Dubai-based space services and investment company AzurX, said that by taking part in both the ILRS and the Artemis Accords, Thailand had proved that these initiatives “are not mutually exclusive”.

“This is important for other countries that are already a part of either the Chinese or American initiatives, or are contemplating joining them for the first time,” he said. “It shows that they can be involved in both if their national interests align.”

Thailand’s space sector was relatively mature, with a focus on satellite communications and Earth observation, alongside a small but growing commercial space sector, said Sheldon, who also publishes the Middle East and Southeast Asia Space Monitor newsletters on Substack.

But now, with its involvement in both lunar initiatives, Thailand may shift its space priorities from mainly economic activities to increased scientific exploration. For example, a Thai instrument is set to launch aboard China’s Chang’e-7 mission in 2026 to measure solar storms and cosmic rays from lunar orbit.

Sheldon also noted that since neither China nor the US had restricted countries from joining both initiatives, Thailand’s announcement was unsurprising.

A common misconception, he said, was that the Artemis Accords, a set of best practices for space exploration, and the Artemis programme, which aims to return humans to the moon and eventually Mars, were one and the same.

“They are not,” he said. “Being a signatory to the Artemis Accords does not automatically mean that a country is also part of the Artemis programme. As a result, it’s possible for a country to be a part of the ILRS initiative and a signatory of the Artemis Accords without there being any contradiction or conflict of interest.”

The ILRS seeks to establish a permanent human base at the moon’s south pole by the mid-2030s.

“What would be interesting is a country that seeks to be a part of both the ILRS and the Artemis programme,” Sheldon said.

US officials often assert that China is welcome to sign the Artemis Accords, and China has also extended cooperation offers to the US, though US legislation – such as the Wolf Amendment passed in 2011 which bans Nasa from cooperating with China unless authorised – complicates such collaboration.

“My personal opinion is that once Chinese and American astronauts are on the moon, cooperation between the two countries will become an imperative as the sheer survival of everyone on the lunar surface will depend upon it,” he said.

The Artemis Accords have 47 signatories, with Thailand awaiting its official status. Artemis programme members include the US, Canada, the European Space Agency and Japan.

Meanwhile, the ILRS has attracted more than a dozen state-level partners, as well as research institutions, universities and companies worldwide.

Malaysia’s Anwar Ibrahim poised for third China trip in 2 years

https://www.scmp.com/news/china/diplomacy/article/3284852/malaysias-anwar-ibrahim-poised-third-china-trip-two-years?utm_source=rss_feed

Malaysian Prime Minister Anwar Ibrahim will visit China next week, Beijing announced on Friday.

It will be Anwar’s third trip to China since taking office two years ago, as Malaysia tries to boost bilateral ties despite disputes in the South China Sea.

Anwar will arrive for a four-day working visit on Monday, the Chinese foreign ministry said. He is expected to stop in Shanghai before visiting Beijing to meet China’s top leaders.

Under Anwar, Malaysia has sought a close and constructive relationship with China, its biggest trading partner for the last 15 years. He visited China twice last year after being sworn into office in November 2022.

Bilateral trade reached US$190.24 billion last year, of which Chinese imports made up close to 55 per cent.

China is also the fifth biggest foreign investor in Malaysia, with total inflows of 14.5 billion ringgit (US$3.3 billion) last year, according to the Malaysian Investment Development Authority.

Among Asean states, Malaysia is China’s largest source of imports and second-biggest trading partner.

Anwar’s trip comes five months after Chinese Premier Li Qiang visited Kuala Lumpur as the two countries marked 50 years of diplomatic relations.

It was the first visit to Malaysia by a Chinese premier since 2015, and concluded with pledges to deepen economic ties. These included memorandums of understanding on Beijing’s Belt and Road Initiative, the green economy and digital economy, as well as an agreement on exporting fresh durians to China.

The two countries also renewed their five-year economic and trade cooperation plan, pledging deeper links in areas including manufacturing, agricultural infrastructure, the digital economy and logistics.

Official narratives from both sides regularly strike a positive tone, emphasising their long-standing history of friendship and collaboration, with regular visits to China by senior Malaysian officials held up as demonstrating the positive trend in relations.

Notably, Malaysia was the first Association of Southeast Asian Nations member to establish official diplomatic ties with China at the peak of the Cold War.

Despite the positive tone, fears remain that overlapping territorial claims in the South China Sea could complicate relations.

But analysts do not expect major disruptions. This is partly because Malaysia has long chosen to adopt a low profile and moderate stance where it rarely publicly criticises China.

In June, Anwar said he preferred Malaysia “to take a more aggressive way of engaging diplomatically” over South China Sea issues, and this approach had been “rather successful”, according to Malaysian state news agency Bernama.

Beijing’s expansive claims over the South China Sea also overlap with those of several other Asean members, including the Philippines and Vietnam.

Anwar emphasised that the resolution of these disputes should be handled among the Asean and China, without the interference of external parties, Bernama reported.

According to Chong Ja Ian, an associate professor of political science at the National University of Singapore, maritime disputes were unlikely to be a major issue in China-Malaysia relations, as the Anwar administration wished to “play down the dispute”.

Economic issues were likely to be the primary focus during Anwar’s visit, though he might address the South China Sea dispute in response to public pressure, Chong added.

“Beijing may wish to ask Malaysia to help avoid issues that may create complications for its interests in Southeast Asia and the Asean, such as the Philippines’ vocal position on the South China Sea dispute,” Chong said.

But Malaysia is also cautious about not being seen as entirely tilting towards China, and continues to actively engage with a range of global players. This has seen it quietly forge significant economic and security relationships beyond China and the United States.

Malaysia will take over the annual rotating chairmanship of the 10-member Asean next year, with the Philippines set to follow in 2026.

China’s worsening ties with the Philippines, especially after a string of confrontations in disputed South China Sea waters, might see it recognise the opportunity to strengthen Asean ties in 2025.

“Beijing may seek to use Malaysia’s role as Asean chair next year to reduce friction in Southeast Asia, perhaps by playing down the South China Sea dispute despite the interests of some member states like the Philippines not to do so,” Chong said.

China’s crowded and closed generative AI market is facing a shakeout, analysts say

https://www.scmp.com/tech/tech-trends/article/3284853/chinas-crowded-and-closed-generative-ai-market-facing-shakeout-analysts-say?utm_source=rss_feed

China’s crowded and closed generative artificial intelligence (AI) market, in which at least 100 large language models (LLMs) are jostling for attention and revenues, is facing consolidation, according to analysts.

One implication is that China’s AI start-ups will pivot to revenue-generating applications instead of pouring resources into basic research, an approach that would differentiate them from the US.

“We saw a lot of debates this year whether the market will become saturated due to homogeneous models,” said Su Lian Jye, chief analyst with research firm Omdia, during a conference on Thursday.

Developing big models has become more expensive as they require thousands of graphics processing units (GPUs) to generate the required computing power. Su said this requirement sets a higher bar for companies wanting to compete in the sector, and that the market will consolidate with smaller players being pushed out.

“The list of companies capable of continuing this expensive undertaking will become shorter,” Su said.

Meanwhile, the US-China tech war, focused on chips and AI, is driving a split between the two countries.

“It will form two ecosystems, as Chinese companies sell to Chinese customers, US companies sell to theirs [and] each has their own ecosystem and industry supply chain,” said Wang Shen, a principal analyst on data centres at Omdia.

“But I don’t think there’s anything to fret over because China’s strength derives from its 1.4 billion-people … a highly-digitalised market of 1.4 billion people can sustain a lot of companies,” Wang said.

More than a dozen Chinese AI and GPU companies have emerged amid the country’s quest to meet surging demand for computing power, especially as global AI chip leader Nvidia faces restrictions on what GPUs it can sell to China, its third-largest market.

Analysts said that China’s AI chip start-ups faced the problem of homogeneity as they compete in a crowded market.

“The AI chip market will face adjustment as it might not need so many vendors,” Su said, adding that Nvidia is the only dominant player, even in the US.

China’s domestic chip start-ups are benefiting from the country’s massive buildout of data centres. However, challenges remain as many brands provide similar solutions, leading to an overcrowded market, according to Su.

The collapse in September of GPU start-up Xiangdixian Computing Technology highlighted the difficulties facing domestic chip firms despite a nationwide self-sufficiency push. The firm, based in the southwestern city of Chongqing, dismissed all employees amid a cash crunch.

China’s listed stocks see ever-thinner profits as economic slump chips away at bottom line

https://www.scmp.com/business/china-business/article/3284804/chinas-listed-stocks-see-ever-thinner-profits-economic-slump-chips-away-bottom-line?utm_source=rss_feed

Chinese listed companies reported a faster rate of thinning profits in the third quarter, as the nation’s slowing economic growth sapped demand, stymied recovery and added headwinds to the stock rally that has recovered as much as US$3 trillion in market value over the past month.

The aggregate profit of the 5,000 companies trading on the mainland’s three equity exchanges dropped 3.7 per cent in the three months that ended on September 30 from a year earlier, China Merchants Securities said. That was a faster pace than the 1.5 per cent decrease in the second quarter and the 4 per cent decline in the first three months of the year, the broker said.

The disappointing results exacerbate the complications in China’s slowing economy, as authorities grapple with weakening consumer spending and the persistent downturn in home prices over the past few years. China’s third-quarter economic growth moderated to 4.6 per cent, the slowest pace in more than a year, raising the risk that the government’s 5 per cent annual target may be beyond reach. The deflationary cycle continued, with factory-gate prices falling for the 24th consecutive month in October.

“Insufficient domestic demand drove prices down and provided a drag on production,” said Zhang Xia, an analyst at China Merchants Securities. “A recovery in revenue was weak so the profitability was under pressure. While listed companies adopted cost-cutting measures, that did little to boost profitability.”

The earnings report card may throw cold water on those investors who are feverishly betting on China’s stock market rally since a deluge of stimulus policies was unleashed in late September. With gains of more than 20 per cent in key benchmarks over the past month or so, the valuations of yuan-denominated stocks have quickly approached historical averages and command no advantage over other emerging markets, according to global investment banks.

Industrial and consumer companies were the major drag on third-quarter earnings, while financial companies and property developers returned to profit growth, according to Haitong Securities.

Both China Merchants Securities and Haitong Securities expect corporate earnings to recover this quarter after Beijing in late September unveiled a package of stimulus measures, from cuts in borrowing and mortgage rates to 800 billion yuan (US$112.2 billion) in new funding tools for stock purchases, to support the economy and equities.

Some of those measures may be working. Home sales in China’s 22 key cities returned to growth for the first time this year in October, according to industrial data, while an official purchasing managers’ index report showed that the manufacturing industry halted a five-month streak of contraction last month.

“The third quarter might be the trough for earnings for the full year, and earnings are expected to improve gradually in the fourth quarter,” said Zhang.

One bright spot from the quarterly results was that more companies announced dividend payouts to heed a call by the securities regulator to boost shareholder returns.

Some 88 Shanghai-listed companies proposed issuing a total of 9 billion yuan in cash dividends in the third quarter, with the amount representing an 80 per cent year-on-year increase, according to the Shanghai exchanges. Meanwhile, 308 companies in Shenzhen paid 56.8 billion yuan of dividends in the first nine months of the year, almost double the 29.2 billion yuan paid last year, the bourse’s data showed.

Outcry forces Chinese health body to remove birth propaganda aimed at boosting pregnancies

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A public backlash has prompted China’s health authorities to remove propaganda saying that giving birth could make women smarter, prevent tumours and relieve menstrual cramps, an article posted to urge Chinese women to have children and combat a looming demographic crisis.

The WeChat article was posted on Wednesday by the National Health Commission (NHC) but by Friday it had been removed.

There was no official explanation but the disappearance of the post followed a wave of angry and dismissive posts from the public about the government’s tactics in trying to boost China’s birth rate.

In its post, the NHC said pregnancy and birth was a “difficult and beautiful journey, where women will go through physical and psychological changes”.

“There are positive and negative changes, but pregnant women and their families should focus more on the positive values of birth,” it said.

It went on to list four benefits and said each was backed by scientific explanations, including that giving birth could expand a woman’s narrow cervical canal, which could relieve menstrual cramps for some.

The article said that while pregnant, a woman’s body could also produce antibodies that prevent ovarian cancer, and hormones could “make a woman’s brain more energetic and help her face the challenges of being a mother”.

It was the latest effort from Chinese authorities to encourage more births. Just two days before the post, China’s cabinet said in a new directive it hoped to build a “birth-friendly society”, announcing a childbirth subsidy system, further tax cuts, and medical, housing and leave benefits. Some analysts forecast spending could reach 500 billion yuan (US$70 billion) a year.

But these and previous measures have not been well received by the public. According to official numbers, China’s population shrank in 2022 for the first time in 60 years. It fell for the second consecutive year in 2023, falling by 2.08 million, with a record low birth rate of 6.39 births per 1,000 people.

Analysts said official measures to boost the birth rate did not meet women’s core demands and they feared they would have little effect.

Beijing-based human resources worker Sherry said she found the new propaganda “hilarious”.

Sherry said she felt society’s pressure on women to have children whenever she visited the gynaecologist. Recently, while at a medical appointment to examine her uterus lining, the doctor told her, “Have a child, your illness will be gone”.

“The government should deal with food security, campus bullying and protecting the women and children first, otherwise who would dare to have a child in today’s environment?” she said.

Her response aligned with many online. On Weibo, netizens used their own experiences to rebuke the NHC, asking why the government failed to mention that giving birth also led to urine leaks, post-partum depression or vaginal tears. Another said studies should be done on the benefits of birth for men.

It has become clear in recent months that Chinese authorities are becoming more anxious to boost the birth rate and, as a result, turn China’s economy around. From the State Council to grass-roots offices, a slew of creative measures have been implemented, including calling women on the phone to urge them to get pregnant and conducting a nationwide survey on public views on marriage and fertility.

Xiang Dongliang, a Guangzhou-based news commentator, wrote on WeChat that it was impossible to increase the birth rate while birth restrictions remained in place.

“They encourage you to have children early and have more children, but at the same time say you cannot have more than three. That doesn’t look like a population policy, but rather a standard to raise livestock,” he wrote.

For women, the problem is not what kind of measures they need the government to implement, but rather that they need more freedom of choice, said veteran feminist and commentator Lu Pin.

“The authorities have never properly considered this issue, from the early days of the family planning era till now,” she said.

“They have policies related to women because they want to raise the birth rate, which is still treating them like a tool – and that is precisely why many women refuse to give birth.”

China students rally for pancake vendor with cancer-hit wife, form long queues to buy food

https://www.scmp.com/news/people-culture/trending-china/article/3284459/china-students-rally-pancake-vendor-cancer-hit-wife-form-long-queues-buy-food?utm_source=rss_feed

Social media in China was so moved by the plight of a street food vendor whose wife was diagnosed with breast cancer that students near where he worked were prompted to form long queues at his stall to help him out.

University students in southeastern China’s Fujian province turned up at the flatbread stall of Hu Weiguang, 54, near the Fujian University of Technology in the province’s capital city Fuzhou.

Hu has been fondly nicknamed by students as “Uncle Flatbread”.

He and his 21-year-old son Hu Jiaming found queues more than 100 metres long formed by student customers recently.

It transpired that a student, Gao Ying, posted the news about Hu’s wife, Hu Guiyuan, who was diagnosed with breast cancer in August, on social media, calling for other students to support his business.

Hu said he needed to pay a hospital 10,000 yuan (US$1,400) a month for his wife’s treatment.

As a result, Gao asked for the most expensive meat-filled flatbread, with extra meat, and to be charged more, but Hu gave her extra meat for free.

Gao’s October 18 online video amassed more than 30 million views and 2.1 million likes.

Students from the Fujian University of Technology and other nearby universities queued for hours to buy their flatbread.

Some would buy much more than they could consume, while others drove more than 100km to support Hu’s business. Some pretended to pay for the food and donated money via Hu’s payment code.

Hu junior, who suspended his studies to help out the business previously run by his parents, said their daily turnover increased from around 1,000 yuan (US$140) to more than 4,000 yuan.

Hu expressed gratitude to his customers but insisted on not making more money than he needed.

He asked students to buy no more than two flatbreads per person, he also contacted the university to donate the extra money he received.

“Both my father and I want to get through the difficult time with the money made by our hands,” Hu junior told chinanews.com.

Hu’s stall had a good reputation among students because his pricing remained affordable, charging from 4 to 7 yuan (56 US cents to 98 US cents) for different fillings.

A vendor who also sold flatbread in Fuzhou suspended his own business to cook for Hu’s stall.

Hu’s hometown in Jinyun county in eastern China’s Zhejiang province also sent two flatbread master chefs to Fujian to help out so that Hu could look after his wife.

The clay oven baked flatbread that Hu had been selling for three decades is a specialty of his hometown.

On October 24, local media outlet Fuzhou Daily also helped the wife to receive an expert health examination at the Fuzhou University Affiliated Provincial Hospital.

Online observers were moved by the actions of the students.

“These university students are the most adorable people I have ever seen,” one person said.

“Uncle Flatbread and his family received so much help from different parties because of a few seconds long video. This is the meaning of the internet,” said another.

What is China’s biggest security threat? The US, says a top Chinese researcher

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A top Chinese academic has called the United States the greatest security threat to China, urging Beijing to widen its network of friends to safeguard national security.

Wang Jisi, founding president of the Institute of International and Strategic Studies at Peking University, said China was facing “unprecedented severe challenges in all aspects” of national security, with Washington framing Beijing as a key challenger to its global hegemony.

“Over the past decade, the relationship between China and the United States has evolved from the vague terms of ‘stakeholders’ and ‘a new type of major power relationship’ to a clearer one,” he said in an article published in the October issue of the philosophy and social science edition of the Journal of Liaoning University.

“It is no secret that the external force that poses the greatest security threat to China comes from the United States.”

Wang said Washington had interfered in Beijing’s internal affairs – including on issues involving Xinjiang and Hong Kong – in what he saw as an effort to isolate China.

On the economic front, the US government’s views of national security “exceeds its consideration of commercial interests”, he said, arguing that trade cooperation was now highly politicised.

As the rivalry between the two powers deepened this year, the Biden administration increased tariffs on a list of Chinese imports, including critical materials and batteries, on the grounds of national security.

“The United States intends to reduce its dependence on my country’s supply chain while increasing its suppression of my country in areas such as chips and artificial intelligence,” Wang said.

He also said the US had expanded its military deployments in the Western Pacific and frequently sent ships and aircraft into areas around China – activities that he described as provocative.

The publication of the article followed a trip by Wang to the US last month, when he met high-ranking American officials including US deputy secretary of state Kurt Campbell.

In the article, Wang warned of escalating competition between major powers and rising geopolitical tensions, saying the world had entered a “new period of turbulence and change”.

Amid those changes, the US had continued to strengthen its security alliances – including Nato – and that its Indo-Pacific strategy sought to “encourage allies outside the region … to intervene” in regional affairs, he said.

“It goes without saying that the main goal of the US Indo-Pacific strategy is to maintain US hegemony and block the rise of China,” he wrote.

China, meanwhile, had taken a different tack to the West to play a key role in the post-Cold War multipolar security landscape.

That approach included its landmark Belt and Road Initiative and Brics, a growing grouping of emerging economies.

“There are very obvious differences between China and the United States in the concepts and practices of international security,” he said, adding that China sought to make more friends while the US aimed to form military alliances.

Wang also argued that China did not segregate countries based on ideology or political system while the US “divides countries in the world into ‘democracy’ and ‘authoritarianism’ in an attempt to isolate and attack its opponents”.

China also promoted peace in geopolitical conflicts and did not interfere in the domestic affairs of other countries while the US often supported one side in regional conflicts, “attacks the other side and intensifies conflicts”, he said.

In the article, Wang also spelled out other challenges China faced, including increasingly rampant activities by forces pushing for Taiwan’s independence, which he described as posing a “serious threat” to Chinese national security.

He suggested that recent developments, including Washington’s deepened ties with Taiwan, “challenge my country’s bottom line of resolving the Taiwan issue … forcing the central government to step up preparations … to achieve the complete reunification of the motherland”.

Beijing views Taiwan as a breakaway province, to be brought under mainland control by force, if necessary. Most countries, including the US, do not recognise the island as an independent state but Washington is opposed to a unilateral change to the status quo.

Other challenges Wang listed included risks in the South China Sea, where tensions remain high between Beijing and Manila, and the Ukraine war, which he suggested had resulted in the “largest diplomatic split” since the end of the Cold War.

“Compared with the period of rapid globalisation after the end of the Cold War, China is facing a more turbulent, chaotic, divided and unpredictable world,” he said, adding that Beijing needed to build “complex strategic thinking” to deal with the growing challenges.

On Taiwan, Wang suggested that Beijing continue to make clear its policy of peaceful reunification and ramp up efforts to curb division.

Separately, China should seek to improve the existing international order and support the rights and interests of developing countries, he said.

China should also continue to promote cooperation with Russia and seek to promote peace on the Ukraine war, with Wang suggesting that an expanded or prolonged conflict would weaken Russia’s power and in turn hurt China’s strategic interests.

Wang also suggested that China build on the “positive factors” of its relationship with the US, and improve ties with Washington’s allies and partners including the European Union, Britain, Japan and South Korea “to handle existing differences with caution and reduce friction”.

“Expanding our circle of friends and narrowing the opposition are important ways to maintain our country’s national security,” he said.

Can the dignity of tomatoes be protected against Chinese exports?

https://www.scmp.com/opinion/china-opinion/article/3284689/can-dignity-tomatoes-be-protected-against-chinese-exports?utm_source=rss_feed

Forget for the moment the world media’s obsession with wars, the US election, the British budget or China’s surging exports of electric vehicles to Europe, now subject to tariffs of up to 45.3 per cent and which have brought the EU and China to the verge of a trade war.

I want to think instead about tomatoes. Italian tomato sauce magnate Francesco Mutti is calling for tariff protection against China’s tomato exports: “The objective is to give tomatoes their dignity.”

I never previously gave a thought to the dignity of tomatoes, or the possibility that protection of their dignity might provide grounds for trade sanctions – against China or any other tomato exporter, for that matter. There could be circumstances where the World Trade Organization might agree to the need to protect the dignity of German car workers or US farmers maybe. But tomatoes?

But Mutti might be on to something of wider, long-term concern to China’s hyper-competitive exporters. From China’s point of view, the global tomato trade is hardly a high priority. Exports amounted to just US$259 million in 2022, making them China’s 708th most important export. And tomatoes are hardly a major part of the Chinese diet.

When I was first learning Mandarin, I was surprised that tomato was xihongshi, literally red Western persimmon. Probably, when the Chinese first saw tomatoes, they thought first of the persimmon common locally. Even today, China is a minnow in the global tomato trade, as the world’s ninth biggest exporter. Mexico, for example, sells 10 times as much in export value and Spain over four times more. But Mutti’s call for protection against China’s tomato farmers has gathered traction for many reasons.

First, China, as a newbie to the tomato trade, is seen as unwelcome competition by those that have been in the business for more than a century. Second, with little domestic demand, China’s tomato industry, mainly based in Xinjiang, was grown to help lift farmers there out of poverty and explicitly developed for export. Xinjiang farmers are well-placed to take advantage of the freight rail linking China with Central Asia and Europe.

Third, allegations of persecution of native Uygurs and use of slave labour have made Xinjiang exports controversial, whether of cotton, polysilicon – or tomatoes.

Rather than sell fresh tomatoes, China mainly exports tomato paste by the container load – an estimated 13 per cent goes to Europe (in particular, Italy) where much of it is mixed with local tomato products. This is a fourth source of controversy, with purebred producers like Mutti angered by other Italian tomato paste-makers adulterating their paste with what is deemed cheap, inferior Chinese stock.

A fifth source of controversy for the European Union’s fiercely proud (and protectionist) farm sector is the fear of erosion of Europe’s large surplus in farm trade with China. Overall, Europe has a huge goods trade deficit with China. Last year, its exports to China worth €223.5 billion (US$242.79 billion) were dwarfed by its Chinese imports, which amounted to €514.4 billion – leaving the EU with a trade deficit of €291 billion.

Only four EU members run a trade surplus with China – Germany, Finland, Ireland and Luxembourg – and feelings run particularly high in countries like Italy, which last year ran a bilateral trade deficit of over US$30 billion. The farm sector is one in which the EU runs a steady if modest surplus with China, and many Europeans are keen to see it stay that way.

Their problem is that China has an awesome capability to swamp world markets with its products with even small shifts in its output. For most of the past century, China was a marginal force in global trade. Domestic demand for everything was so large that very little ever became available for export. China was by far the world’s largest food producer, but even today remains the world’s largest importer of farm products.

It is the world’s largest producer of rice but exports hardly any of it. It is a major producer of wheat, poultry, eggs, rapeseed and cotton but remains a net importer. With pork, China is both a leading producer and importer.

What is true in the farm sector is doubly true across the gamut of manufacturing – which in large part explains the controversies over Chinese EVs, batteries, wind turbines, solar panels and so many other goods in rising global demand.

As the government drives hectic growth across these sectors to meet its green targets, China’s domestic demand is so huge that even small production overshoots have created surpluses large enough to disrupt global markets on a massive scale. And because of the scale economies created by such huge domestic demand, those surpluses have created price competitiveness that smaller economies find impossible to match.

These are the forces that have so perturbed Mutti and his fellow Italian tomato paste manufacturers. China is doing the same across other markets with garlic, truffles, saffron and even caviar.

Last April, the EU’s then agriculture commissioner, Janusz Wojciechowski, led a large farm trade delegation to China, aiming to boost Europe’s food exports. He insisted that open trade in food was critically important for global food security. “Food products should be excluded from problems in other sectors,” he said, clearly reflecting on the simmering row over the “dumping” of Chinese EVs in the EU market.

But it seems such hopes may be in vain. When it comes to protectionism, there is more than the dignity of tomatoes at stake.

SAIC Motor, Geely deny breaking ranks in China’s bargaining with Europe on EV tariffs

https://www.scmp.com/business/china-business/article/3284753/saic-motor-geely-deny-breaking-ranks-chinas-bargaining-europe-ev-tariffs?utm_source=rss_feed

China’s largest state-owned carmaker and the private sector’s biggest assembler, both at the top of the European Union’s electric vehicle (EV) tariffs list, denied they sought separate deals to avert the import levies.

SAIC Motor, the biggest state-owned carmaker and the partner of General Motors and Volkswagen, said it was “deeply involved” in the collective bargaining by China’s carmakers.

“There has never been a proposed deal for SAIC alone during the communications and negotiations with the European [trade bloc]”, which slapped a 35.3-per cent import tariff on it last month, SAIC said. The Shanghai carmaker, which shipped 83,000 EVs to Europe last year bearing the MG and Maxus badges, had sought to “explain its case” to the EU, according to its statement in July.

Geely Automobile Holdings, the biggest of China’s private-sector assemblers and the owner of such brands as Volvo, Lotus and Zeekr, said any suggestion it negotiated separately with the EU was “slanderous”.

“Geely unswervingly supports the efforts to strike a collective deal with the EU,” the Hangzhou-based company said on Thursday.

The two denials followed Monday’s statement by the Ministry of Commerce, which reiterated that the state-backed industry guild the China Chamber of Commerce for Import and Export of Machinery and Electronic Products was the sole representative authorised to engage with the EU on tariff. Any separate discussions would “undermine trust” and harm the “continued efforts to resolve the issue,” the ministry said.

The war of words underscores how the different assemblers in China’s automotive industry are scrambling to respond to the EU’s levies, as they seek to preserve a fast-growing exports market amid a brutal discount war at home.

“The negotiations are more than commercial talks,” said David Zhang, general secretary of the International Intelligent Vehicle Engineering Association. “The EU tariff issue is likely to trigger escalated trade frictions between the two large economies. There will be drawn-out negotiations and there are still lots of uncertainties.”

In October, 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.

SAIC faces the highest rate of 35.3 per cent while Geely is subject to additional tariff of 18.8 per cent.

The European Commission “overlooked” some of the information and counterarguments it submitted during the anti-subsidy investigation, SAIC said in July. Some incentives granted to domestic consumers by mainland Chinese authorities had been mistakenly counted as subsidies to spur EV exports, the carmaker said, adding that it would appeal to European courts.

BYD, the world’s largest EV builder, will be issued an additional tariff of 17 per cent if it ships Chinese-made pure electric cars to the EU. Tesla’s 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.

The EU’s vote to slap tariffs on EV imports was carried last month 10 to 5, with 12 abstentions that effectively counted as votes in favour. Five countries – Germany, Hungary, Malta, Slovenia and Slovakia – voted against imposing tariffs.

China’s government has instructed the nation’s carmakers to refrain from additional investments in the EU countries that voted for the tariffs.

On October 10, Mofcom summoned major automotive firms including BYD and 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.

New Zealand’s tech warning reflects ‘significantly hardened’ stance towards China: analysts

https://www.scmp.com/week-asia/politics/article/3284703/new-zealands-tech-warning-reflects-significantly-hardened-stance-towards-china-analysts?utm_source=rss_feed

New Zealand’s technology warning for companies and citizens working in China marks a “significantly hardened” stance, according to observers, who note the latest move is part of a “gradual overall deterioration” in ties between Wellington and Beijing.

The warning also points to a growing rift between China and the West in the tech space, and Wellington’s reluctance to be seen as “a point of vulnerability” when it comes to transferring technology, experts say.

On Tuesday, New Zealand intelligence agencies launched new security guidance to help protect emerging technology companies from a range of threats, particularly those posed by foreign-state actors.

The New Zealand Security Intelligence Service (NZSIS) and the Government Communications Security Bureau’s National Cyber Security Centre published the report “Secure Innovation: Security Advice for Emerging Technology Companies”.

In it, the report warned that New Zealanders should be aware of China’s strict laws in relation to national security “which may be interpreted broadly”, adding that key concepts such as “state security”, “national interest”, and “state secrets” have wide-ranging definitions in Chinese law.

“[China] can compel companies and citizens to cooperate with national security directives,” it said, adding: “New Zealand businesses operating in China are subject to these same laws and would be required to cooperate if authorities requested access to information, data and systems.”

Robert Patman, an international-relations professor at the University of Otago, said the warning was issued because New Zealand’s threat perceptions of China had “significantly hardened”.

Citing a report by the NZSIS last August, Patman said authoritarian states such as China, Russia and Iran were said to have “most consistently engaged” in interfering in the country’s domestic affairs in recent times.

In June, a Stuff team led by Paula Penfold produced The Long Game, a documentary that found the Chinese Communist Party had conducted interference operations in New Zealand for decades, Patman noted.

But whether the warning could be seen as part of Wellington’s “pivot” to the Five Eyes – which also includes Australia, Britain, Canada and the United States – remained unclear, Patman said, noting that New Zealand continued to pursue a policy towards its biggest trade partner China that could be “distinguished from that” of its partners.

“The New Zealand government is clearly signalling to Beijing that it is fully aware China is a dictatorship and has no political illusions about Beijing’s interest in spying on [Wellington’s] interests either in China or in New Zealand”.

Patman said “China will probably be angered by this message”, but if Beijing ignored the warning, it would run the risk of undermining ties and pushing New Zealand closer to its Five Eyes partners.

In December, Foreign Minister Winston Peters said he would draw New Zealand – long seen as a moderate on China in the Five Eyes – closer to the alliance, whose members have shared intelligence since World War II.

In 2023, bilateral trade between the two countries was valued at nearly NZ$38 billion (about US$23 billion), a quadruple increase since the signing of the free-trade agreement in 2008.

Geopolitical analyst Geoffrey Miller from the Victoria University of Wellington’s Democracy Project said the new warning came in the context of “a gradual overall deterioration” in relations between New Zealand and China this year, marked by various statements from Wellington that had “frustrated” Beijing.

These include an intelligence claim in March that New Zealand’s parliament had been subjected to a “state-sponsored” cyberattack by China in 2021, and a September intelligence report focusing on foreign interference which directly mentioned China at least 10 times and described Beijing as a “complex intelligence concern”, Miller noted.

The September report was met with an angry rebuff from China’s ambassador to New Zealand Wang Xiaolong, who wrote on X that “groundless finger-pointing and fearmongering will erode the foundation upon which the broad and mutually beneficial relationship between China and New Zealand is built”.

While Chinese Premier Li Qiang visited New Zealand in June, a reciprocal visit by New Zealand Prime Minister Christopher Luxon to China “has remained elusive”, Miller said.

Noting that the US election result would be “pivotal” to the next phase of Wellington-Beijing relations, Miller said if Vice-President Kamala Harris won, it was likely that New Zealand would quickly seek to join Aukus Pillar II, a grouping comprising Australia, Britain and the US – and derided by China – and which promised access to sensitive knowledge and military expertise on a host of cutting-edge innovations.

“However, if there is a Donald Trump victory, the centrist Luxon may opt for a rethink,” Miller said, as Trump’s tough talk on trade “could still bring Wellington and Beijing back closer together”.

David Capie, director of the Centre for Strategic Studies and professor in international relations at the Victoria University of Wellington, said New Zealand had a rapidly growing tech sector and the intelligence agencies wanted to make sure that those businesses were thinking about the security implications of their work and their partnerships.

“Many of those are small and middle-sized companies that perhaps haven’t had to think much about cyber threats or other potential risks in the past,” Capie said, adding that a key goal was to get people to “think proactively” about security.

Most of the advice constitutes “common sense advice”, he noted, such as knowing who your partners are, knowing the local laws, and changing of passwords.

“But there is no doubt that the backdrop to this is a growing divide between China and the West in the tech space,” Capie said. “New Zealand won’t want to be seen as a point of vulnerability when it comes to transferring technology that could potentially have military or dual use applications.”

While China is “a significant concern” for the security agencies when it comes to espionage, cybersecurity and foreign interference, Capie noted that the report was framed “in a country agnostic way”.

“China is only mentioned in the context of its national security law,” he said, adding that the report was unlikely to cause “a dramatic upheaval” in bilateral ties.

Capie said it was worth remembering that the greater willingness of the security agencies to speak out started under the previous Labour government led by Jacinda Ardern.

“So there is a fair degree of continuity here,” Capie added.

North Korean defectors and Ukraine, Chinese celebrity transformation: SCMP’s 7 highlights

https://www.scmp.com/news/world/article/3284580/north-korean-defectors-and-ukraine-chinese-celebrity-transformation-scmps-7-highlights?utm_source=rss_feed

A group of nearly 200 North Korean defectors living in South Korea is pushing to deploy to Ukraine so they can launch a psychological warfare campaign against their former comrades, now reportedly assembling in Russia.

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

A Chinese company says it has conducted a test flight of a prototype commercial transport plane that can travel at Mach 4 – or twice the speed of a Concorde. It aims to have a full-sized supersonic passenger jet ready for its maiden flight in 2027

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 was coined by Wang Mang, then a minister and “consort kin” of the Han dynasty (206BC-AD220). It would be some five centuries before the Latin concept of “Anno Domini”, or AD itself was born.

US Republican presidential candidate Donald Trump has pledged to get jailed former Hong Kong media tycoon Jimmy Lai Chee-ying out of the country if elected. “One hundred per cent, yes,” Trump said in an interview. “I’ll get him out. He’ll be easy to get out.”

As the cosmetic surgery industry continues to thrive in China many celebrities have taken advantage of a so-called nip and tuck. However, few openly admit to having work done because it can hurt their public image.

Chinese grass roots government workers, who spent decades imposing strict birth control policies, are now calling up women in their neighbourhoods to urge them to get pregnant amid China’s demographic crisis.

China live-streamer earns less than US$1 a month, faces ‘idiot’ insults from firm staff

https://www.scmp.com/news/people-culture/trending-china/article/3284446/china-live-streamer-earns-less-us1-month-faces-idiot-insults-firm-staff?utm_source=rss_feed

A man in China working as a part-time live-streaming anchor who earns just 0.3 yuan per month (5 US cents) has been insulted by company staff as an “idiot” and a “bumpkin”.

The plight of the online worker has attracted widespread sympathy and sparked a heated discussion on mainland social media.

On October 28, the 38-year-old, surnamed Yao, from Changsha, Hunan province in central China, told the Xiaoxiang Morning Herald that he felt scammed into providing free labour by the Henan-based Yutai Cultural Media Company.

Yao had found the job opportunity on a recruitment website in September.

The job advert described the position as a part-time, voice-based and talent-focused live streaming anchor on a social media platform.

The role involved chatting with audiences, singing, playing games and engaging in live interactions.

Initially, he agreed to work full-time, live-streaming for six hours a day.

However, he later requested to switch to part-time and live-stream for just three hours a day, which the company approved.

The specific date of when he started working and transitioned from full-time to part-time roles has not been disclosed.

On September 23, an operations staff member informed him that as a part-time anchor streaming three hours a day, he would not receive a base salary but would instead earn a 38 percent commission on his earnings, according to records circulated online.

The staff member also said that the monthly base salary for live streaming six hours per day was 4,000 yuan (US$560), and for nine hours, the figure was 6,000 yuan.

However, after what Yao claimed was one month of livestreaming, he had only received 0.3 yuan from the company, paid through online transactions, along with an additional 150 yuan in gift tips from viewers.

“It is really unfair. It felt like they were exploiting me as free labour,” said Yao.

“I am demanding at least half of the six-hour base pay, which is 2,000 yuan, along with an apology from the operations staff.”

During a dispute, online records revealed the operation staff insulting Yao, calling him an “idiot” and “bumpkin,” and stating: “The labour law doesn’t protect idiots. Can you even afford a lawyer?”

Yao retorted, “You’re the real bumpkin here.”

On October 28, Xu Jiqun, the legal representative of the company, told Xiaoxiang Morning Herald that base pay is awarded only when streamers meet specific hourly requirements.

These requirements do not apply to part-time employees like Yao, the legal representative said, adding that this policy was clearly communicated during the recruitment process.

Xu said that the 0.3 yuan paid to Yao was a “service subsidy,” but did not clarify how it was calculated.

Regarding the reported insults, Xu said: “If he was insulted, he can insult back or report it to the police.”

On October 30, a netizen, claiming to be the operations staff member involved alleged that Yao, who only worked for seven days, was uncooperative, displayed “negative behaviour”, and even slept during live streams.

Yao is currently considering filing a formal complaint to the relevant authorities.

The incident has ignited a backlash online.

One person quipped: “He should apply for Guinness World Records for the lowest monthly income. If he earned the title, the award would probably be more than 0.3 yuan.”

While another added: “I am able to get 0.5 yuan cashback for a good online review after a purchase order. This salary is really insane.”

Chinese market regulator grants HSBC domestic fund custody licence

https://www.scmp.com/business/article/3284694/chinese-market-regulator-grants-hsbc-domestic-fund-custody-licence?utm_source=rss_feed

The China Securities Regulatory Commission (CSRC) has granted HSBC China a domestic fund custody licence, a step that allows the lender to boost its cross-border securities services business.

With the licence, HSBC will be able to provide custody services to onshore funds offered by fund and asset managers domiciled in mainland China, it said in a statement on Thursday.

“China is the second-largest capital market in the world and continues to be an important choice for foreign institutional investors looking to diversify their global asset allocations, especially their long-term capital,” said Fiona Horsewill, global head of securities services at HSBC.

The new licence enhances HSBC China’s portfolio of custody services in mainland China and better positions the bank to directly provide custody services to locally domiciled mutual funds, private funds and private asset-management schemes, the statement said. The bank received the licence on October 25.

“The new licence marks another milestone in HSBC’s business development in China, enabling us to participate more deeply in the market’s capital-market opening and to assist overseas investors to be a part of the vast opportunities that arise,” said Mark Wang, president and CEO of HSBC China. “We will continue investing to further grow our China business and to capture the long-term potential of the market.”

HSBC is the fifth foreign bank to be granted a domestic fund custody licence. A local branch of BNP Paribas received one in June. Previously, Standard Chartered Bank (China) was the first foreign bank to receive the licence in 2018, followed by Citibank (China) and Deutsche Bank (China).

In recent years, the mutual fund market in mainland China has grown year on year, reaching nearly US$4.49 trillion as of the end of September, according to the Asset Management Association of China.

HSBC provides custody services to asset managers in nearly 100 markets globally. Total assets under custody exceeded US$9 trillion as of the end of June 2024, it said.

China’s factory activity swings back into expansion in October: Caixin PMI

https://www.scmp.com/economy/economic-indicators/article/3284720/chinas-factory-activity-swings-back-expansion-october-caixin-pmi?utm_source=rss_feed

China’s manufacturing activity swung back to growth in October as an expansion in new orders led to a pickup in production growth, signalling an improvement in the sector at the start of the final quarter, a private-sector survey showed on Friday.

The Caixin/S&P Global manufacturing PMI rose to 50.3 in October from 49.3 the previous month, beating analysts’ forecasts in a Reuters poll of 49.7.

The reading echoed an official survey on Thursday, which showed manufacturing activity expanded for the first time since April, a stabilising sign and helped by a slew of stimulus measures announced in late September as Beijing sought to pull economic growth back towards this year’s target of “around 5 per cent”.

Markets are awaiting more details on China’s extra debt to revive the fragile economy as a persistent property market downturn and record-low consumer confidence continue to drag on the recovery of the world’s second-largest economy.

Reuters on Tuesday reported that the government was considering approving new debt issuance next week of more than 10 trillion yuan (US$1.4 trillion) in the coming years.

According to the Caixin survey, incoming new orders placed with Chinese manufacturers increased at the quickest pace in four months. That also pushed production expansion to the quickest pace since June.

Manufacturers’ confidence about future output improved as their optimism levels climbed from September’s low to the highest level in five months.

Meanwhile, purchasing activity rose in response to the uptick in new work, which led to accumulation of stocks of purchases.

Manufacturers indicated that post-production inventory rose amid delays in outbound shipments and with higher production.

Both input and output prices rose slightly in October.

However, new export orders contracted for a third straight month, albeit less sharply than the prior month.

Investors are worried that a victory by Republican candidate Donald Trump in the US presidential election next week and an escalation of tariffs against Chinese products may dent Chinese exports – a lone bright spot this year.

Even if work inflows improved, the rate of job losses at factories was the fastest since May 2023.

Anecdotal evidence showed companies reduced temporary workers and refrained from replacing job leavers in October.

“The labour market remains under pressure, and price levels are still subdued,” said Wang Zhe, senior economist at Caixin Insight Group.

“Additionally, achieving China’s 2024 growth target will depend on a sustained recovery in consumer demand.

“That means policy efforts should focus on increasing household disposable income more effectively.”

With EU tariffs and the US rivalry, will China be battling 2 trade wars at once?

https://www.scmp.com/news/china/diplomacy/article/3284690/eu-tariffs-and-us-rivalry-will-china-be-battling-2-trade-wars-once?utm_source=rss_feed

China could soon be battling trade wars on two fronts, with Europe pushing ahead with big tariffs on Chinese electric cars and a deepening contest looming with the US.

The double crunch could still be avoided but conditions were only to get tougher for Beijing, according to analysts.

The European Union’s tariff increases on Chinese-made electric vehicles took effect on Wednesday after months of negotiations with China fell through.

A top rate of 35.3 per cent will apply to EVs from Chinese-state owned SAIC Motor and its subsidiaries, on top of a baseline 10 per cent duty that applies to all EV imports, which by some estimates account for about 2 per cent of total trade value between China and the EU.

China responded to the decision by filing a complaint with the World Trade Organization, saying it would take “all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies”.

In Beijing on Tuesday, Finnish President Alexander Stubb said he was concerned that there would be a cycle of escalating tariffs.

“We need to avoid that. We need to have a level playing field,” Stubb said.

Zhou Xiaoming, former deputy representative of China’s Permanent Mission to the UN Office in Geneva, said the EU anti-subsidy inquiry that led to the tariffs set a bad precedent that could be expanded to other goods and copied by other countries.

Zhou said China saw the tariff issue as a matter of principle and would not accept the duties, but there was potential for both sides to negotiate a minimum price for Chinese EV imports into the EU to get around the tariffs.

Negotiations are expected to continue, with China’s Ministry of Commerce saying on Wednesday that it was conducting a “new phase of consultations” to reach an “acceptable” solution with the EU.

“Price undertaking involves the issue of interests and is negotiable,” Zhou said, adding that in his view, China and the EU had yet to enter a trade war.

China also faces the possibility of further pressure from the United States.

Washington has in place a range of tariffs on Chinese goods – including EVs, solar cells and semiconductors – aimed at protecting American jobs from a feared flood of cheap Chinese imports.

Former US president Donald Trump, who imposed duties on around US$300 billion worth of mainland imports when he was in office, has threatened to implement a 10 per cent blanket tax on all foreign goods, and tariffs of up to 60 per cent on Chinese goods.

Wang Xiaosong, a professor at the school of economics at Renmin University in Beijing, said geopolitical factors meant that growth in Chinese exports to developed countries was already slower than that to developing countries.

And while the EU and the US might not apply joint pressure on China, each were likely to have their own containment strategy towards Beijing, Wang said.

“The external environment [for China’s foreign trade] is already less than ideal but it is likely to deteriorate further in the future. This trend can be said to be irreversible,” he added.

Yu Jie, senior research fellow on China at Chatham House, said China’s trade frictions with the US and the EU could prove “quite challenging” for Beijing both in economic and foreign affairs terms.

In response to trade wars on multiple fronts, China might dial down its Wolf Warrior diplomacy and resume dialogue with “politically difficult” but economically significant players. Beijing might also adopt punitive measures targeting European and American agriculture sectors, she said.

Jack Zhang, assistant professor of political science at the University of Kansas, called the fresh EU tariffs a diplomatic setback for Beijing but he suggested that it would not escalate into a trade war unless China retaliated disproportionately.

China could respond with regulatory barriers to harass European firms in China but doing so could hurt its corporate allies and give ammunition to the EU to push for further economic decoupling.

China could also respond with tit-for-tat tariffs but, Zhang said, its options were limited and such a response could inflict collateral damage on price-sensitive Chinese consumers.

China would be at a “structural disadvantage” if it engaged in a trade war with the EU because it exported much more to Europe – including hi-tech goods – than it imported from the bloc.

Zhang said the bigger challenge for Beijing was the ongoing trade war with the US, especially if Trump was re-elected and followed through on his campaign promise of 60 per cent tariffs on Chinese exports to the US.

That, he said, would be “much more disruptive” than the EU tariffs on electric cars, adding that China was similarly limited in its options to retaliate given its export reliance on the US.

“It is imperative for China to avoid a multi-front trade war and this is why we have seen efforts to end trade conflicts with Australia [over wine] and seek new markets for its exports like Russia and India,” he said.

“The strategically prudent thing for China to do is to avoid getting into multiple trade wars, even if that means restraint in the short-run.”

Renmin University’s Wang suggested that regardless of who won, the next US administration would likely adopt very tough trade policies towards China and prolong the trade war.

But China did not need to be too pessimistic as Chinese exports to both the US and EU grew in the first three quarters of the year, indicating that those partners still depended heavily on China for many products.

“The US wants to restructure the industry chain and supply chain through friendshoring and nearshoring but this is unfeasible in the short term,” he said.

He also said China should invest more in research and development to produce more original leading-edge technologies, which would help to counter the US stranglehold.

Zhou suggested that trade was no longer the ballast of US-China relations but had instead become a source of problems, leading to political and diplomatic issues.

He said the idea that fostering economic ties would ensure good relations between two countries was now outdated, as political considerations of national security had become more dominant in both the US and EU, with both willing to incur economic costs in defence of their national security interests.

Zhou suggested that China should nevertheless try to hold on to its existing markets in developed economies like the EU, US and Japan, where its exports carried higher added-value.

“China’s development still relies on opening,” he said.

“In the long run, we still need to open up new markets, including speeding up free-trade zone negotiations with some important regions, such as the Gulf Cooperation Council and Latin America.”

US calls on a silent China to use its sway over Russia and North Korea

https://apnews.com/article/china-north-korea-russia-ukraine-united-states-0d28afb21d3afbdbb3cb9c29a945c3f5Chinese President Xi jinping speaks during a meeting with Finnish President Alexander Stubb at the Great Hall of the People on Tuesday, Oct. 29, 2024 in Beijing, China. (Kazuki Kozaki, Pool Photo via AP)

2024-10-31T21:53:42Z

WASHINGTON (AP) — The U.S. and South Korea have called on China to use its influence over Russia and North Korea to prevent escalation after Pyongyang sent thousands of troops to Russia to aid Moscow’s war against Ukraine. Beijing has so far stayed quiet.

In a rare meeting earlier this week, three top U.S. diplomats met with China’s ambassador to the United States to emphasize U.S. concerns and urge China to use its sway with North Korea to try to curtail the cooperation, according to a State Department official, who spoke on condition of anonymity.

Secretary of State Antony Blinken said Thursday that the sides had “a robust conversation just this week” and that China knows U.S. expectations that “they’ll use the influence that they have to work to curb these activities.”

“But I think this is a demand signal that’s coming not just from us, but from countries around the world,” he said at a news conference in Washington with Defense Secretary Lloyd Austin and their South Korean counterparts.

The U.S. says 8,000 North Korean soldiers are in Russia near Ukraine’s border and are preparing to help the Kremlin fight against Ukrainian troops in the coming days.

Beijing has forged a “no limits” partnership with Moscow, and while it has been a major ally for Pyongyang, experts say Beijing might not approve of the closer military partnership between Russia and North Korea because it sees it as destabilizing in the region.

When asked about a meeting between U.S. and Chinese diplomats, Lin Jian, a spokesman for the Chinese foreign ministry, said at a briefing Wednesday in Beijing that he had “no information to provide.”

He added that China’s stances on Ukraine and on the Korean Peninsula have been consistent. China has called for a cease-fire and urged peace talks to end the war in Ukraine. And it has long advocated for a peaceful and stable Korean Peninsula.

The Russia-North Korea partnership runs contrary to Beijing’s goal for a peaceful Korean Peninsula, said Shi Yinhong, an international relations expert at China’s Renmin University.

Beijing is “aware of the complexity and danger of the situation,” Shi said, noting that the “fact that China hasn’t said anything yet on the military alliance agreement between North Korea and Russia indicates that China strongly disagrees with it.”

Dennis Wilder, senior fellow for the Initiative for U.S.-China Dialogue on global issues at Georgetown University, called Beijing’s “radio silence” on North Korea’s move “staggering.” He said Beijing must find a balance between supporting Moscow and not angering the West, and that Chinese President Xi Jinping might “for his own sake ignore the whole thing.”

Xi has built a personal relationship with Russian President Vladimir Putin, and “he cannot see Putin fail,” Wilder said this week at a panel discussion hosted by the Washington-based think tank Center for Strategic and International Studies.

At the same time, Xi cannot anger the Europeans and Americans when his country’s economy is struggling, Wilder said.

“So he’s not going to say anything publicly about this,” Wilder said.

Austin said Thursday that China “should be asking Russia some hard questions at this point and whether it intends to broaden this conflict by this kind of behavior.”

Deputy Secretary of State Kurt Campbell, Assistant Secretary of State for East Asian and Pacific Affairs Dan Kritenbrink and Assistant Secretary of State for European Affairs James O’Brien met with Chinese envoy Xie Feng in Washington on Tuesday, according to the State Department official, who would not detail the Chinese response.

Lu Chao, director of the Institute of American and East Asian Studies at Liaoning University in China’s northeastern province of Liaoning, said the U.S. should not expect China to manage North Korea.

“As for the issue of the Korean Peninsula, China is a friend of both North Korea and South Korea. It is not the case that China is responsible to manage North Korea and the U.S. is responsible for managing South Korea,” Lu said. “I hope the U.S. government could understand China’s stance.”

Lu also said the troop deployment is “a matter between Russia and North Korea,” while China’s attitude remains unchanged that the conflict should not be escalated but be resolved with a political solution.

US and China in ‘robust conversation’ on North Korea sending troops to Russia: Blinken

https://www.scmp.com/news/china/diplomacy/article/3284711/us-and-china-robust-conversation-north-korea-sending-troops-russia-blinken?utm_source=rss_feed

US and China are engaged in high-level dialogue regarding North Korea sending troops to Russia as the Kremlin wages war on Ukraine, America’s top diplomat said on Thursday.

US Secretary of State Antony Blinken described “a robust conversation” with China taking place this week about Moscow and Pyongyang’s military cooperation in the Ukraine war.

Blinken urged Beijing to “do more” to curb “provocative” actions being taken by two of its closest partners.

“I think they know well the concerns that we have and the expectations that, both in word and deed, they’ll use the influence that they have to work to curb these activities. So we’ll see if they take action,” Blinken said of China after a meeting he and Defence Secretary Lloyd Austin held with their South Korean counterparts in Washington.

His remarks came after a New York Times report on Thursday said his deputy, Kurt Campbell, and other State Department officials met Chinese diplomats “for several hours” in the residence of Xie Feng, Beijing’s envoy to Washington, on Tuesday.

The Sino-American engagement came amid Washington and Kyiv’s latest assessments that North Korean troops could see combat against Ukraine “in the coming days”.

The Chinese embassy in Washington did not immediately respond to a request for comment.

North Korean troops were reported last week to be in eastern Russia in a major escalation of the armed conflict that began in February 2022.

Blinken said at least 8,000 North Korean soldiers were now in Russia’s Kursk region and receiving training in “artillery, UAVs, basic infantry operations, including trench clearing”.

This activity, the envoy continued, indicated that Russians “fully intend to use these forces in frontline operations”.

Blinken warned that once North Korean troops engage in combat against Ukraine they would become “legitimate” military targets. And the US would closely consult its allies on what “actions” to take in response, he added.

But the Chinese foreign ministry last week said it was unaware whether North Korea had deployed troops to Russia.

When asked about what role it would play if there were escalations in Ukraine and the Korean peninsula as a result of Pyongyang’s troop deployment, Beijing called for all parties to de-escalate tensions.

The ministry stated that China was always committed to peace on the peninsula and a political solution to the Ukraine conflict.

Since last year, Russia and North Korea have moved to bolster their military ties, with Pyongyang reportedly sending tens of millions of munitions to support the Kremlin’s invasion of Ukraine.

In exchange, Pyongyang has received Moscow’s technological support for its tactical weapons.

China has largely refrained from commenting on Russia and North Korea’s apparently growing closeness, saying it is an internal matter for the two countries.

Some analysts see their unprecedented level of direct military cooperation as putting Beijing in an awkward position.

Aside from the stigma of being grouped with Russia and North Korea, China’s ties with the West have frayed over its alleged support of dual-use goods to the Kremlin.

Duyeon Kim of the Centre for a New American Security, a Washington-based think tank, said Beijing did not want regional tensions to escalate such that Moscow and Pyongyang’s actions could trigger a response by the US.

“I do not expect China to overtly make some sort of public announcement or … pressure North Korea and Russia publicly, although I would suspect it might do some of this pressuring quietly, discreetly, especially considering its strategic competition with the United States, its relationship with Russia,” Kim said last week.

South Korean Defence Minister Kim Yong-hyun on Thursday said Seoul believed Beijing could “intervene” if the two countries’ military cooperation deepened.

“I think a more clear assessment is China is watching and waiting and if the situation worsens … China either as a mediator or in any other role may be intervening,” he said.

Austin urged China to ask Russia “some hard questions” as to whether it sought to escalate the Ukraine conflict when Beijing has professed it is “serious about its desire for de-escalation”.

On Monday, Chinese Foreign Minister Wang Yi and Russian Deputy Foreign Minister Andrey Rudenko discussed the Ukraine conflict in Beijing.

The two countries reaffirmed their ties, calling them “not subject to interference”, a week after President Xi Jinping and his Russian counterpart Vladimir Putin delivered the same message during the Brics summit in Kazan.

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Amid EV row with EU, China to ‘stand on grounds of fair competition’, Mofcom says

https://www.scmp.com/economy/global-economy/article/3284677/amid-ev-row-eu-china-stand-grounds-fair-competition-mofcom-says?utm_source=rss_feed

China will continue to support the “normal trade and investment” of Chinese carmakers in Europe despite a spat over tariff hikes, the Ministry of Commerce (Mofcom) said as it still seeks to negotiate toward a resolution on levies that kicked in for Chinese electric vehicles (EVs) this week.

At a regular news briefing on Thursday, Mofcom spokesman He Yadong responded to a report alleging that China had told its car manufacturers to halt big investments in the European countries that supported tariffs on Chinese EVs.

“China has always supported and encouraged any normal trade and investment opportunities in the Chinese automobile industry,” He said when asked if Beijing could confirm the report by Reuters on Wednesday.

“China will uphold an open and market-oriented approach, and will stand on grounds of fair competition when we cooperate with countries in the automobile industry.”

Beijing and Brussels have still shown their intention to continue with trade talks despite the EU tariffs on imported Chinese EVs having kicked in on Wednesday.

While such discussions would likely feature less wiggle room than the previous rounds of talks, given that the tariffs – as high as 43.5 per cent – have already kicked off, the two sides appeared to be still exploring available bargaining chips, which include making deals with individual Chinese carmakers on how they can adjust the price and volume of their imports for the European market.

EU member countries voted to implement tariffs on Chinese EVs for five years after a year-long investigation concluded that Chinese government subsidies had allowed Chinese cars to unfairly compete in the EU market and had undermined the European job industry.

Since then, China has officially said it invited EU officials to visit China “as soon as possible” to advance discussions. Bloomberg reported on Thursday that European representatives will be sent to China, but the dates are unspecified and the EU has yet to officially confirm a trip.

The European Commission has reiterated its willingness to negotiate price undertakings with individual exporters, as allowed under EU and WTO rules.

Earlier this year, China’s top EV carmaker, BYD, announced it was considering building another factory in Europe after announcing that the first production plant would be in Hungary.

Another Chinese carmaker, Geely, was also reported in September to be scouting for a location to build its production line, but no decision has been confirmed yet.

Ten EU members, including France, Poland and Italy, supported tariffs in a vote this month, and five members, including Germany and Hungary, opposed them. Spain and Sweden were among the 12 that abstained.

German carmakers and politicians have slammed the EU tariffs. The German Association of the Automotive Industry’s president, Hildegard Mueller, warned that “the countervailing tariffs increase the risk of a far-reaching trade conflict” and urged further negotiations. Germany is home to Volkswagen, BMW and Mercedes-Benz, which have heavy business interests in China.

Both the US and Canada have launched 100 per cent tariffs on Chinese EVs this year.

Meanwhile, Chinese industrial representatives have spoken out against the EU tariffs since they went into effect this week. China Council for the Promotion of International Trade (CCPIT) spokesman Sun Xiao said at a press conference on Thursday that they found the EU’s tariffs decision “regretful” and were sternly against “trade protectionism”.

The China Association of Automobile Manufacturers also said on Wednesday, after the tariffs took hold, that the EU’s decision was “not acceptable” and that the tariffs were “unfair”. The Association has also called for a resolution under the World Trade Organization framework and urged more bilateral talks.

Janet Yellen and Chinese central banker discuss financial monitoring and money laundering

https://www.scmp.com/news/china/diplomacy/article/3284699/janet-yellen-and-chinese-central-banker-discuss-financial-monitoring-and-money-laundering?utm_source=rss_feed

US Treasury Secretary Janet Yellen has met with China’s deputy central bank governor Xuan Chengneng in Washington this week to discuss coordination on financial market monitoring and money laundering.

The talks this week marked a continuation of the sixth meeting of a bilateral economic working group and took place on the sidelines of the annual meetings of the and .

They also followed Yellen’s meeting last week with China’s vice-minister of finance Liao Min, covering Beijing’s most ambitious since the and addressing other macroeconomic issues.

Discussions about the stimulus continued during Yellen’s talks with Xuan, which was co-led by her assistant secretary for international affairs Brent Neiman.

According to a Treasury statement on Thursday, Neiman and Xuan “also received readouts from … technical exercises on international macroeconomic data reporting, strengthening communication in the event of banking stress, and climate and insurance risk”.

“The Joint Treasury-People’s Bank of China Cooperation and Exchange on Anti-Money Laundering also held its third meeting” as part of this week’s talks, and “both sides raised issues of concern”.

The statement did not elaborate.

China’s top legislative body recently conducted a review of draft revisions to its Anti-Money Laundering Law, which aim to “monitor and analyse new money-laundering risks”, with a focus on emerging technologies like cryptocurrency.

China’s Supreme People’s Court and the Supreme People’s Procuratorate revised laws in August to include cryptocurrencies, online game coins and tipping during live streaming as channels of money laundering.

Only 30% of US public think China trade has created jobs in their state: survey

https://www.scmp.com/news/china/politics/article/3284705/only-30-us-public-think-china-trade-has-created-jobs-their-state-survey?utm_source=rss_feed

A mere 30 per cent of the American public believe trade with China has created “some or a lot of jobs” in their state, a new study revealed in the lead-up to the US election.

The East-West Centre, a Washington-based research institution, found in a survey that a slight majority of the American public – more than 55 per cent – did not know the impacts on job creation of trading with Asia in general or with China in particular.

Respondents who were categorised as members of the US general public were also less worried than stateside political and business elites about the country losing its trade competitiveness to China.

Only 36 per cent of these respondents said they were “moderately or extremely concerned” compared to more than half of the surveyed political and business elites who felt that way.

The report polled about 1,000 people in January and February this year from the American general public and another 1,000 political officials and business leaders on their perceptions towards US engagement with Asia, such as trade with China.

America’s economic engagement with China has frequently been spotlighted in the 2024 presidential race.

Former US president and Republican standard-bearer Donald Trump has floated the idea of imposing a 60 per cent tariff on Chinese goods as well as a universal duty on all American imports. He has argued these moves would create more jobs stateside.

US Election Day is November 5, and early voting is under way. Trump and US Vice-President Kamala Harris are locked in a tight contest to succeed US President Joe Biden, who defeated Trump in 2020 and opted not to seek re-election.

Trump as president started a trade war with China in 2018, imposing tariffs on more than US$300 billion worth of mainland goods.

Biden has mostly kept the tariffs in place and even expanded them to apply to semiconductors and clean-energy products amid an all-round competition between the world’s two biggest economies.

Harris, who has revealed little of her trade policy plans, is largely expected to continue Biden’s stances.

Laura Silver of Pew Research Centre, a non-partisan Washington-based think tank, said American opinions tended to follow the leader they trusted on complicated issues and would “likely be guided” by the foreign policy of “whoever is in office next”.

“Most Americans have a zero-sum notion of trade,” Silver explained. “For example, if you ask Americans whether or not we benefit more than other countries, they often see other countries benefiting more than we do and that’s particularly the case when it comes to China.”

“In fact, there’re some relatively solid evidence that Americans would rather not create any jobs in the United States if it means more jobs are created in a country that Americans don’t like,” she added. “So even if we get one, if they get two, that’s seen as losing, which is obviously completely counter to what we would think as economists.”

In the survey, only a quarter of the American public deemed trade with Asia as “very or extremely beneficial”.

At the same time, it found that 55 per cent of political and business elites supported entering into a critical-minerals agreement with Asian countries and 54 per cent backed investing in Asia’s clean-energy transition.

To boost US efforts to become less dependent on China, the Biden administration created a Minerals Security Network with 13 countries and the European Union.

The mainland owns about 60 per cent of the world’s rare earth minerals, a critical component of semiconductor manufacturing.

For its part, the US has doubled down on staying competitive in clean-energy products by subsidising billions of dollars in its domestic EV industry.

Trump opposes Biden’s renewable-energy initiatives, having suggested an end to tax credits for electric-vehicle purchases. He has also threatened to impose tariffs of up to 200 per cent on Chinese EVs if re-elected.

Amid these developments, many in Asia are uneasy with America’s greater willingness to embrace protectionism and feel pressure about having to choose between siding with Washington or Beijing, according to another East-West Centre report on Tuesday.

The Indo-Pacific has become a focal point in the Sino-American rivalry as the two vie for economic and military influence in the strategically important region.

Yet the East-West Centre survey showed that 66 per cent of the US general public preferred keeping America’s military presence in Asia at the same level as it is now. In contrast, 42 per cent of the elites wanted to increase troop levels in the continent.

The heated US-China cable competition under the seas

https://www.scmp.com/news/china/science/article/3284708/heated-us-china-cable-competition-under-seas?utm_source=rss_feed

Last week, eight US senators urged President Joe Biden to order a security review of the global network of undersea communications cables, citing the “threat of sabotage” by Russia – and China.

It was just the latest expression of US concern over China’s potential espionage in handling network traffic, an accusation Beijing has repeatedly rejected.

Usually running along the bed of the world’s seas, undersea cables are the backbone of the global internet for daily communications.

About 95 per cent of the US population and nearly 75 per cent of China’s use data that is transferred through undersea cables, and the number is growing.

As global powers jockey for technological and economic supremacy, undersea cables are increasingly at the centre of the competition.

Here are five things to know about the undersea information network, and what it means to the US-China relationship.

What are undersea cables?

Undersea cables, also called submarine cables, are fibre optic cables laid on the seabed between land-based stations. They carry up to 99 per cent of internet traffic between continents and are vital for transmission of data, from personal email, online shopping to scientific research.

Financial transactions on platforms like banking networks, like Swift, as well as fintechs and blockchains also depend on data traffic through the cables.

The first undersea cable was laid in 1850 between France and Britain, and as of September, there were 532 active undersea cable systems, with another 77 planned, according to telecommunications research company Telegeography.

Their importance to national security

Data is now a driving force of digital economy, and data security has become vital to not only economic security but also the national security of governments around the world.

While undersea cables are buried in the sea – at some points as deep as 8,000 metres to protect against potential damage by fishing trawlers – this data infrastructure is not always safe.

In 1914, when Britain entered World War I, it cut German telegraph cables under the sea, forcing the Germans to shift to radio communication that was easier to intercept.

During the Cold War, the US Navy tapped into the Soviet Union’s undersea communication cables at the Sea of Okhotsk near Japan, listening in on sensitive military communications between Soviet naval bases.

Today, submarine cables are an important component of communications security, especially for coastal states.

“Having enough submarine cables is necessary to ensure resilient connectivity to global networks and, ultimately, the digital economy,” said Lane Burdette, a research analyst with Telegeography.

They are also “an important strategic component in maintaining national security”, Liu Dian, a researcher at the China Institute of Fudan University, said.

“For a country, having control over key submarine cable routes means that it is able to influence and even control the flow of data to certain countries or regions,” Liu wrote in Current Affairs Report, a magazine published by Chinese Communist Party’s central propaganda department.

Investments by China and US

Undersea cables are built, operated and maintained by private companies.

The global cable-manufacturing and -laying industry used to be dominated by western companies, including SubCom in the US, NEC in Japan and France’s Alcatel Submarine Networks.

In 2008, though, Huawei Technologies founded Huawei Marine, a submarine cable joint venture with the British company Global Marine Systems offering services such as system design, installation and integration. The company quickly grew to become the world’s fastest-growing subsea cable builder.

As geopolitical competitions intensify, Beijing has repeatedly stressed the importance of controlling critical technology, and investment in undersea cable technologies has become a priority as it aspires to become a great maritime power.

In 2021, the Chinese Ministry of Industry and Information Technology released its five-year plan, in which it stressed the support of “national shipbuilding” of undersea cable repair vessels. Last year, China launched two large home-made cable layers, Long Yin 9 and Qi Fan 19, each of which can carry 10,000 tons of cable.

The US-China rivalry

Tensions about the underwater infrastructure drew media attention in May 2019, when Huawei Marine, together with Huawei Technologies and its 67 non-US affiliates were added to the US “entity list” that restricts access to certain products and technologies.

Months later, Huawei decided to sell its stake in Huawei Marine to Hengtong Group, China’s largest power and fibre cable manufacturer, and the firm was later renamed HMN Tech.

In April 2020, following opposition from the US Justice Department, Google and Facebook withdrew plans for a Pacific Light Cable Network to connect Los Angeles and Hong Kong with an 8,000-mile internet broadband cable, which US officials said could expose Americans’ data to Beijing.

The US State Department also launched the Clean Network Initiative, which sought to ban new cables from connecting the US to Hong Kong and China directly.

Last year, the US House of Congress passed the Undersea Cable Control Act, which sought to prohibit Chinese companies from gaining access to undersea cable-related goods and technologies in the US. The bill still needs Senate approval before being signed by the president.

The US has also ramped up coordination with its allies to prevent China from becoming a major presence in undersea cables, including working with its partners Japan, Australia and India in the Quad security dialogue to invest in undersea cables in the Indo-Pacific.

Last month, Reuters reported that the US has told Vietnam to avoid Chinese vendors, including HMN Tech, in its plans to build 10 new undersea cables by 2030.

Beijing has repeatedly rejected espionage claims, which it said were “created out of nothing”, and has accused the US of using its “small yard, high fence” investment restrictions to suppress China’s development.

China has stepped up investment in undersea cables in the Global South, including in South America and Africa. One high-profile project is the Peace Cable, a 15,000km (9,320 miles) project connecting Pakistan, Singapore, Cyprus, Egypt, France and Malta and operating since August.

Will competition escalate?

The US actions appear to be working.

According to Burdette, the TeleGeography analyst, between 2010 and 2023, HMN Tech provided an estimated 10 per cent of all new kilometres of cable entering service. However, for cables planned for this year through 2026, that percentage drops to 4 per cent.

“It seems that US and allied pressure against using HMN Tech for new submarine cables may be having an effect,” she said.

Since the Pacific Light Cable Network was denied a landing license by the US Federal Communications Commission in 2020, no new cables have entered service that directly connect the US to China.

And yet a true decoupling is unlikely. The two countries are still connected digitally, as data from one side passes over multiple submarine cables before reaching the other side of the Pacific Ocean.

Combined China and US pressure could get warring sides to talk peace

https://www.scmp.com/opinion/world-opinion/article/3284154/combined-china-and-us-pressure-could-get-warring-sides-talk-peace?utm_source=rss_feed

Israel’s air strikes on Iran and military incursions into southern Lebanon against local Islamic militant group Hezbollah are visible defeats for US diplomacy aimed at de-escalation in the Middle East. China is getting involved, too, but it is still not a credible alternative to the United States as a mediating power in world crises.

In separate phone calls with his Israeli and Iranian counterparts, Foreign Minister Wang Yi recently called for a ceasefire in the Israel-Hamas conflict in Gaza and urged all sides to work for regional peace and stability. At the United Nations General Assembly in New York last month, Wang said of Russia’s war in Ukraine that “China is committed to playing a constructive role, engaging in shuttle mediation and promoting talks for peace”.

China is gaining stature on the world diplomatic stage. However, while the US is ready to take the risk of failing with its diplomatic actions, Beijing is not. The Chinese, it seems, are willing to participate in peace processes and whisper possible solutions – or, at most, facilitate talks – when actually, to play an indispensable role, they should be exerting pressure on warring parties.

It was not purely by chance that at an event on the sidelines of the UN General Assembly on September 24, Lebanese Foreign Minister Abdallah Bou Habib said that “the United States is the only country that can really make a difference in the Middle East and with regard to Lebanon”.

US President Joe Biden has called the death of Hamas leader Yahya Sinwar an opportunity to end the war in Gaza. The US government is, with the help of Qatar and Egypt, continuing to negotiate a ceasefire deal between Israel and Hamas after one year of conflict, and is trying to de-escalate the confrontation between Israel and Hezbollah. The Biden administration has, apparently, managed to mitigate Israel’s announced retaliation for Iran’s ballistic missile attacks.

Both Hamas and Hezbollah are allied with China’s friend Iran, a fact that should give Chinese diplomats room to manoeuvre. For now, that does not appear to be the case.

The dynamic is no different in Africa, which is dependent on Chinese trade, investment and loans. Sudan is a long-time energy partner of China, but the US is leading multilateral talks to end an 18-month civil conflict between the Sudanese regular army and the paramilitary Rapid Support Forces.

Somewhat surprisingly for a superpower in the making, China is not even scoring diplomatic points on its doorstep, such as in civil-war-torn Myanmar. Despite its influence on the local military junta and several ethnic armed groups, Beijing has been unable to hold warring factions to a ceasefire brokered in January. In the meantime, the US government has reached out to Myanmar’s opposition forces to increase support for a civilian transition, while India is reportedly trying to use its diplomatic influence in the country.

In July, China promoted a unity agreement among rival Palestinian factions over a post-Gaza-war settlement. Accords of this kind have been little more than hot air in the past, and it is safe to assume that Israel and the US will never come to terms with a Palestinian institutional actor that includes Hamas and other Palestinian terrorist groups.

Hamas political leader Ismail Haniyeh was killed in Tehran a week after the Chinese-mediated reconciliation deal was signed, and it is unlikely it happened by chance. Iranian authorities and their proxies have blamed the assassination on Israel.

Some observers saw last year’s mediation to restore diplomatic relations between regional rivals Iran and Saudi Arabia as a watershed moment for Chinese diplomacy. However, aside from perhaps making Iranian-Saudi regional competition more predictable, the agreement brokered by Beijing has not actually produced any substantial results.

The war in Yemen, for instance, is a proxy battlefield for Iran and Saudi Arabia’s regional power play. Nevertheless, the Chinese have not been able to, or seemingly wanted to, leverage the deal between Tehran and Riyadh to work on a permanent solution to the decade-long civil strife.

The war in Ukraine is an example of how Chinese peace diplomacy has so far been flimsy. During talks in Guangzhou on July 24, Wang reiterated to his Ukrainian counterpart Dmytro Kuleba that China was committed to encouraging a diplomatic solution for Russia’s invasion of Ukraine. A few days later, Kyiv launched an incursion into the Russian region of Kursk.

Still, at the Brics summit of emerging economies in Kazan, Russia, last week, President Xi Jinping relaunched a six-point plan aimed at de-escalating the conflict between Ukraine and Russia. Released in May by China and Brazil, it included the key principle of not expanding the battlefield.

The reality is that, when it comes to world crises, the US is leading but not delivering at the moment while China is failing without leading. So, what should we expect from the two rivals?

“In this changing and turbulent world, countries need solidarity and coordination … not exclusion or regress,” Xi said during talks with US National Security Adviser Jake Sullivan in Beijing on August 29.

A diplomatic condominium between the US and China would be optimal for conflict resolution, but that is out of the question for now because of apparently irreconcilable geopolitical differences. That does not mean the two powers cannot bring pressure to bear on actors at war, and not necessarily in a coordinated manner.

Combined pressure from the US and the Soviet Union forced Britain, France and Israel to accept a UN ceasefire and withdraw their military forces from Egypt during the Suez crisis in 1956. That was dictated more by competition than coordination, but it worked adequately nonetheless.

China’s tech factories will be a target, for Harris or Trump. Is it too late to matter?

https://www.scmp.com/economy/global-economy/article/3284577/chinas-tech-factories-will-be-target-harris-or-trump-it-too-late-matter?utm_source=rss_feed

The presidential race between Donald Trump and Kamala Harris comes at a time of rising geopolitical tensions on multiple fronts. In the 14th report of an , we look at China’s rise in hi-tech manufacturing and the US’ efforts to contain it.

After decades spent working around the clock to produce an almost unimaginable quantity of goods for global consumers, China’s factories have moved up the learning curve and begun assembling more complicated wares – and those in seats of power from Washington to Berlin have sat up and taken notice.

A seemingly endless stream of sleek electric vehicles (EVs) and other high-end tech, churned out at facilities operated by a growing contingent of sophisticated machines, has set off alarm bells in the West and prompted a raft of protectionist policies intended to reorient supply chains and bring manufacturing jobs back home.

With the US presidential race tightening, one thing remains clear regardless of the victor: China’s ascent to the bleeding edge of industrial production is not the distant possibility it once was.

Nevertheless, both major party nominees – former president Donald Trump of the Republicans and Vice-President Kamala Harris of the Democrats – are all but certain to escalate efforts to keep China's rise in check.

Their strategies – from punitive measures like tariffs and trade restrictions to positive inducements like domestic research funding – will flow from this principle, analysts said.

“The direction of travel is quite clear,” said Xu Tianchen, senior China economist with the Economist Intelligence Unit. “The tech war is only going to intensify, and the election result will matter tactically, not strategically.”

The “major difference”, Xu said, is whether the US will “leverage its allies to contain China – Trump will pursue harsh, indiscriminate actions against China and its firms more or less in isolation, while Harris is likely to favour a more targeted, concerted approach.”

Once known as the “world’s factory” and a source of low-cost goods, China now stands at the forefront of complex, high-precision industries, an evolution backed by years of industrial policy and significant state investment.

“The global landscape has shifted – China is no longer the apprentice in advanced manufacturing but stands toe-to-toe with the West, competing on equal footing,” said Zhao Zhijiang, an analyst at the Beijing-based public policy think tank Anbound.

“Chinese EV companies are now fully capable of going head-to-head with their Western counterparts, and the same holds true for industrial robotics and shipbuilding. Beyond technology, the West must [also] contend with the reality that China could dominate half, if not more, of these sectors’ global market share.”

The 30 million EVs China rolled off its assembly lines in 2023 accounted for over 60 per cent of global production. Manufacturers like BYD – laughed at by Tesla CEO Elon Musk in a now-infamous interview are figures to be reckoned with, standing toe-to-toe with legacy firms as well as the new players riding the wave of the green transition.

Executives at the Chinese company may be the ones laughing now. In figures released Wednesday, BYD outsold Musk’s firm for the first time ever, beating it in revenue for the third quarter of 2024. In the first eight months of the year, BYD outsold German stalwart Volkswagen in China across all vehicle types, including internal combustion engines, according to the China Passenger Car Association.

China’s surging EV exports pushed the country to become the world’s largest auto exporter in 2023, overtaking Japan, with over 4.91 million cars shipped overseas.

In an attempt to keep this amassing fleet at bay, this year the US quadrupled tariffs imposed on EVs of Chinese make, raising duties to 100 per cent. But fears remain that this roadblock can be bypassed by shipping across the southern border with Mexico, exempting them from import taxes under the United States-Mexico-Canada Agreement.

Worries over this potential loophole led the Alliance for American Manufacturing, a US industrial advocacy group, to urge the Joe Biden administration to limit the entry of Chinese cars into the US market in a February report.

Trump upped the ante earlier this month, saying he would impose tariffs of up to 200 per cent on Chinese cars to prevent their sale in the US and save the bedrock automotive industry. He made the remarks in appropriate surroundings – Detroit, the largest city in the battleground state of Michigan and a former artery of the country’s rust belt.

The European Union has also adopted protectionist measures to stem the flow of Chinese-made cars, approving additional tariffs of up to 35.3 per cent on top of the bloc’s standard 10 per cent vehicle import duty in a heated vote on October 4.

These geopolitical hurdles will remain “for the foreseeable future, possibly lasting several decades,” said Zhao of Anbound. “We are entering an era of deglobalisation. Global integration is proving to be the exception, while the fragmentation of international space is emerging as the dominant trend.”

China has leveraged its sizeable state resources to counteract this tendency and build up industrial capacity, with more than 1 trillion yuan (US$141 billion) earmarked for strategic emerging industries in the first seven months of the year.

While the US leads in most cutting-edge technologies – particularly artificial intelligence and software – China’s broader supply chain advantage has become undeniable. According to a report published last month by the Korea Trade-Investment Promotion Agency, China put 290,000 industrial robots to work in 2022. This represented more than 50 per cent of global installations.

In 2021, China had 12 times the rate of robot use in manufacturing as the United States, with automation a “top priority, [backed] with generous subsidies,” according to a March report from the Information Technology and Innovation Foundation, a non-profit research institute.

In shipbuilding – a notoriously difficult field to break into, requiring an enormous pool of skilled workers and a high degree of specialisation – China has vaulted to the top of the heap.

Thanks to state-owned enterprises like China State Shipbuilding Corporation, the country accounted for 55.1 per cent of global ship completions in the first nine months, 74.7 per cent of new orders and 61.4 per cent of global orders on hand, according to Beijing’s Ministry of Industry and Information Technology.

China’s rapid growth in these demanding fields can be attributed to several factors, said Yu Xiang, an adjunct fellow at the Center for International Security and Strategy at Tsinghua University.

He cited institutional openness, the “innovative spirit” of entrepreneurs – especially in the private sector – and massive investments in independent research and development.

“Despite a range of measures taken by the US and Europe to curb China’s industrial rise, these efforts can no longer fully halt China’s progress,” Yu said.

“At most, they might slow it down in the long run. However, stalling the pace of China’s industrial ascent is ultimately detrimental to the overall growth of the global economy, and this will be disadvantageous for the US and Europe as well.”

To counter these barriers, Chinese companies have begun to look abroad, establishing new international supply chains reaching previously untapped markets.

But as the trade of most cutting-edge technologies is at the mercy of unpredictable geopolitical changes, regional expansion could be more viable than a global roll-out, said Anbound’s Zhao.

“This means businesses need to be keenly aware of geopolitical risks, which markets might require a more cautious approach,” he said, adding more mid-to-low-end technology could be shipped abroad as companies adjust to new global dynamics.

“China can still excel in niche markets with precision manufacturing,” Zhao added.

“Supply chains will be shaped by ‘friendshoring’ and ‘close-in production,’ meaning they will become shorter, more regional, and selective. In certain industries, China is likely to play a crucial role within regional supply chains, though not necessarily on a global scale.”

According to data from China’s National Bureau of Statistics, in the first three quarters of 2024 the added value of hi-tech manufacturing rose by 9.1 per cent year-on-year, compared to a 5.8 per cent increase in total industrial output.

A deepening economic integration with the Asean bloc of countries is one example of China’s own overtures towards “friendshoring,” as companies ramp up their manufacturing capacities in Vietnam, Indonesia and Malaysia.

However, “China will remain the single most important player in global supply chains as a result of the unparalleled variety and cost-effectiveness of its products, a functioning industrial policy and the low cost of production factors,” said Xu of EIU.

The global expansion of Chinese firms and their increased investments will lead to stronger demand from the host country for Chinese final goods and components, and while supply chains may not be physically located in China in future, they will remain controlled by Chinese businesses, Xu added.