• Trump tariff on China could lower global inflation, says UK economist
• China’s GDP forecast cut as Trump trade worries take hold before new term
• European Union launches WTO case against Chinese tariffs on brandy exports
• Hong Kong’s Jimmy Lai wanted to lure foreign readers with ‘negative’ mainland China news
• China ‘diamond bachelor’ cons 3 women, uses ill-gotten funds to lavish gifts on real lover
• Hong Kong to boost financial reforms to aid Chinese firms, Paul Chan says
• Never underestimate the Chinese people, says ex-Singapore prime minister Lee Hsien Loong
• Apple’s Cook makes third trip to China in 2024 amid iPhone slump and AI uncertainty
• Chinese woman dies after laser treatments for spot and birthmark removal
• China builds a machine capable of laying submarine cables in the Challenger Deep
• Chinese military disguised as fishing boats? Philippine defence chief raises concerns
• China aims for more than 100 ‘trusted data spaces’ by 2028 under national action plan
• China hits jackpot with gold reserves, Japan’s first kiss rate: 5 weekend reads you missed
• Yuan to catch up to China’s position in world’s economy: ex-official
• New coating can make China’s stealth aircraft invisible to anti-stealth radar: study
• Chinese firms likely to boost M&A activity in response to Trump threats: analysts
• Europe expert Cui Hongjian on why China, EU face worst-case scenario as Trump returns
• Hope grows for India-China economic ties amid Trump’s tariff threats
• China Builds Test Version of Nuclear Reactor for Navy

Trump tariff on China could lower global inflation, says UK economist

https://www.theguardian.com/business/2024/nov/25/trump-tariff-on-china-could-lower-global-inflation-says-bank-economist

Donald Trump imposing massive US tariffs on Chinese imports could drag down global inflation by lowering the price of goods in other countries, a senior Bank of England policymaker has said.

Swati Dhingra, an external member of the Bank’s rate-setting monetary policy committee, said Trump imposing a threatened 60% tariff on goods from China sold in the US could lead Chinese exporters to cut their prices elsewhere to ensure they maintained current trade volumes.

“If there is the kind of big 60% type of tariff increase that’s been proposed, that will have repercussions on to world prices, and mostly on the downward direction,” she said.

Speaking at a conference in London on Monday, the economist said there was heightened uncertainty about what policies the president-elect would carry through from the campaign trail. Trump warned before this month’s election that he would slap tariffs of up to 60% on China and up to 20% on other US trade partners.

However, Dhingra said the “textbook” impact of the world’s largest goods importer imposing such a large tariff on products from the world’s biggest exporter would be for global goods prices to fall.

Chinese firms would respond to tougher trade barriers by attempting to find buyers in alternative markets, which could lead them to lower their prices to sell similar volumes, including in the UK, she said.

“It takes a massive amount of demand out of the world market. The way exporters, say in China, would respond to that would be to respond with prices, world prices, as they don’t want to lose market share,” she said.

Economists have warned Trump imposing punitive import tariffs on US trading partners will drive up inflation in the world’s largest economy, as the costs would be borne by US consumers. However, it would also impact the wider global economy.

Dhingra said much would depend on the response to a burgeoning trade war, particularly if governments chose to retaliate with “tit for tat” tariffs on US imports, or with protectionist measures to prevent an influx of cheap Chinese goods reallocating away from the US market.

“Then we’re in a completely different situation,” she said.

Drawing a comparison with Brexit, Dhingra said that leaving the EU had led to “permanently” higher prices of products for British households. This had generated inflation as prices rose, before prices stabilised at a higher level.

“We saw much higher price increases in the UK compared to everywhere else and those pressures have now come off much more quickly as well, for the reason they’re not inflationary, they change the price levels, permanently,” she said.

Analysts have warned that the euro risks falling to parity with the US dollar for the first time since late 2022 if a new transatlantic trade war weakens the already struggling eurozone economy.

China’s GDP forecast cut as Trump trade worries take hold before new term

https://www.scmp.com/economy/china-economy/article/3288033/chinas-gdp-forecast-cut-trump-trade-worries-take-hold-new-term?utm_source=rss_feed

A top credit rating agency has cut its forecast for China’s economic growth next year and in 2026, saying the renewed threat of higher tariffs under president-elect Donald Trump “blurs” the economic landscape in the Asia-Pacific.

S&P Global Ratings said on Sunday it expected China’s gross domestic product to expand by 4.1 per cent in 2025 and 3.8 per cent in 2026, down by 0.2 and 0.7 percentage points, respectively, from its September projections.

“We expect China’s economy to be hit by the US tariff increases on its exports. Exports will obviously grow much less, and investment too,” said economists at S&P in their first-quarter 2025 Asia-Pacific outlook.

“The impact on investment will in part kick in even before US tariff implementation, because of the increased uncertainty.”

The report, co-authored by S&P’s chief economist for Asia-Pacific Louis Kuijs and senior economist Vishrut Rana, also lowered inflation forecasts for the coming years and projected a weaker yuan, citing expected US tariffs and their associated downward pressure on prices.

Tariff increases’ spillover effects on employment, income and confidence will also weigh on consumption, the economists added.

While Beijing’s stimulus measures have helped shore up growth in recent months, S&P noted that so far there has only been “modest new growth-enhancing fiscal expansion”, with no significant direct support for households and consumption.

The report pointed to the Finance Minister Lan Foan’s recent promise that China would “actively utilise” room for higher budget deficit in 2025, suggesting more growth support from fiscal policy next year.

British multinational bank Barclays said on Friday it would maintain its 4 per cent GDP growth forecast for China in 2025, citing “persistent structural headwinds”, “likely US tariff hikes on Chinese goods” and Beijing’s “moderate and reactive fiscal package.”

If only half Trump’s proposed 60 per cent tariff increase on Chinese goods took effect, the bank estimated, this would be enough to shave 0.8 to 1 percentage point off China’s GDP growth.

New tariffs are unlikely to be implemented all at once on the first day of Trump’s second term in January, Barclays said, but in stages starting in the late second quarter or early third quarter of 2025.

“The implication is that exporters could front-load shipments (to escape tariff hikes), lending some support to exports in the first half of 2025,” the bank said.

Regarding the broader region, S&P said while the Asia-Pacific’s growth will be impeded by slower global demand and US trade policy, lower interest rates and inflation should ease the drag on spending power.

It cautioned against swings in capital flows caused by shifts in expectations about US interest rates and trade policies, which will require the region’s central banks to be vigilant.

“Rising risks are blurring the economic outlook for Asia-Pacific in the first quarter of 2025,” Kuijs said.

“While much of the region should be able to continue to grow solidly, central banks will probably remain cautious by not reducing their policy rates too fast.”

European Union launches WTO case against Chinese tariffs on brandy exports

https://www.scmp.com/news/china/diplomacy/article/3288073/european-union-launches-wto-case-against-chinese-tariffs-brandy-exports?utm_source=rss_feed

The European Union has launched a World Trade Organization case against Chinese tariffs on the bloc’s exports of brandy in the latest gambit in an increasingly tense trade dispute.

Last month, China’s commerce ministry announced it would start collecting provisional anti-dumping duties ranging from 30.6 per cent to 39 per cent on liquors, mainly on cognac shipments from France.

The move was broadly seen as retaliation against the European Commission’s anti-subsidy investigation and subsequently countervailing duties of up to 35.3 per cent on Chinese-made electric vehicles.

A request for consultation was formally lodged at the Geneva body on Monday. It is the first step in a dispute settlement process, to which China has 10 days to respond. If subsequent consultations do not resolve the dispute, it will proceed to a disputes panel that could – if appealed – take years to finalise.

While the WTO’s Appellate Court has been sidelined because the United States’ has blocked new judges, both China and the EU are signatories to the alternative Multi-Party Interim Appeal Arbitration Arrangement, meaning the case can be heard to its conclusion.

In a statement, the European Commission said “China’s provisional measures on EU brandy are not based on facts, and thus are not in line with WTO rules”.

“The EU takes very seriously any unfair or questionable use of trade defence instruments against any sector of our economy,” said Valdis Dombrovskis, the bloc’s outgoing trade commissioner.

“By requesting consultations with China over its provisional anti-dumping measures on EU brandy, the commission is following through on its commitment to protect our industry from unfounded accusations and misuse of trade defence measures,” he added.

To retaliate for the high-profile EV duties, China has also launched investigations into dumping by the EU’s pork and dairy sectors. Brussels has already launched a WTO challenge against the dairy probe at the nascent investigatory stage, the first time it has appealed on a case at such an early stage.

The brandy dispute has led to farmers’ protests in France, with the industry complaining it is “collateral damage” in a trade war not of its making. Last week, staff at brandy-producer Hennessey were striking over a decision to bottle cognac in China in a bid to circumvent the Chinese duties.

The issue has been high on the political agenda too: during a meeting on the sidelines of the G20 summit in Rio de Janeiro last week, French President Emmanuel Macron urged Chinese counterpart Xi Jinping to drop the tariffs.

The Chinese market has been big business for Europe’s cognac makers, although in recent months it looked as though political factors were bleeding into commerce.

In October, exports of the French liquor to China had fallen 39.5 per cent to US$115 million from a year earlier, according to Chinese customs figures.

For the first 10 months of 2024, it had dropped 26.4 per cent in value terms to just over US$1 billion.

Meanwhile, negotiations are continuing between the EU and China in a bid to reach a deal that would soften the impact of EV tariffs. The sides are at loggerheads over the structure of a price undertaking arrangement that would see a minimum price placed on vehicle imports to the union, sources said.

Over the weekend, German lawmaker Bernd Lange – the head of the European Parliament’s trade committee – suggested a deal was close.

“We are close to an agreement: China could commit to offering e-cars in the EU at a minimum price,” Lange told German broadcaster n-tv.

“This would eliminate the distortion of competition through unfair subsidies, which is why the tariffs were originally introduced.”

However EU sources denied that any deal was imminent. Marginal progress has been made on some technical points during multiple rounds of talks, but the parties remain divided on some of the “fundamental elements” of price undertaking, including how the minimum price would be calculated, they said.

Hong Kong’s Jimmy Lai wanted to lure foreign readers with ‘negative’ mainland China news

https://www.scmp.com/news/hong-kong/law-and-crime/article/3288069/hong-kongs-jimmy-lai-wanted-lure-foreign-readers-negative-mainland-china-news?utm_source=rss_feed

Former Hong Kong media boss Jimmy Lai Chee-ying has said he wanted his now-defunct newspaper to attract overseas readers by publishing “negative” articles in English about mainland China, while dismissing accusations that also he intended to trigger Western sanctions.

Lai, 76, told West Kowloon Court on Monday that he felt a newspaper’s credibility was not built upon balanced coverage, but on reporting what it perceived to be the truth.

The ex-mogul’s oral testimony in his high-profile trial entered its fourth day, with his lawyers turning their attention to the Apple Daily tabloid’s online English-language edition.

The English version launched in May 2020, a month before the Beijing-decreed national security law took effect.

Lai, who is contesting three charges related to foreign collusion and sedition, said in a text message to senior editorial staff that they did not need to provide foreigners with “a balanced view of what happens here of every different colour”.

He said the English edition should represent the views of “the yellow side” – referring to the colour adopted by the protest movement during the 2019 social unrest – without necessarily providing balance.

“Because at that time, because of the [Covid-19] pandemic, the world was a bit negative about China,” he told the three presiding High Court judges.

“They would want to read more about the negative news of China so as to protect themselves, just as the negative influence China would have rendered them.”

Lai said he intended for the new English website to be “the most reliable and popular” platform in the world for news on the Communist Party.

He said “a lot of positive news [about the country] was exaggerated and a lot of negative news was ignored”, adding he wished to “reflect China more objectively”.

Asked whether this was inconsistent with his intent to publish lopsided stories, Lai said: “A balanced view doesn’t mean credibility. Truth means credibility.”

Former Apple Daily publisher Cheung Kim-hung, who earlier testified for prosecutors after pleading guilty to conspiracy to collude with foreign forces, had said Lai wanted to inflame anti-China sentiments in the United States through the new platform and instigate hostile acts such as sanctions.

Lai on Monday denied ever mentioning sanctions in his conversations with Cheung, suggesting his former top aide “made it up”.

“I would not have specified something like hostile actions, because hostility is a word I really seldom used, you know, I don’t remember I have ever used it,” he said.

In regards to the tabloid’s promotion strategy, Lai said he had asked right-hand man Mark Simon to appeal to senior US officials, such as then vice-president Mike Pence and then secretary of state Mike Pompeo, to subscribe to Apple Daily’s mobile app.

“Because Pence [was] the vice-president, with his prestige, that would arouse a lot of attention for people to pay attention to Apple Daily,” the ex-mogul said.

But Lai added the attempt was unsuccessful because senior officials in Washington had a strict security protocol to follow.

The defence also asked Lai to explain his reasons for starting an account on Twitter, now known as X, when the Beijing-decreed security legislation was looming.

Text exchanges between Lai and Simon in May 2020 showed the latter had pitched the idea of starting an account for the media mogul, noting it could attract “hundreds of thousands” of followers including “many, many people we want to reach”.

Lai was initially hesitant about the move, questioning whether it would be too time-consuming.

But Simon, who formerly worked with US naval intelligence, pressed on and said even retired Catholic leader Joseph Zen Ze-kiun found social media “highly effective”, adding that Lai could have someone manage the account in his place.

“I’m not one that recommends you tweet every day like [Donald] Trump,” Simon said, referring to the then US president. “But it is a great tool for debate and a political confrontation.”

The court heard Lai eventually enlisted the help of columnist Simon Lee Chao-fu, who was Cheung’s assistant, to operate the account.

In subsequent messages with Lee, Lai said he had hoped to “let the world be aware of what is going to happen to [Hong Kong]” after the “newfangled and illegal” security law took effect.

“I hope I’ll be able to show with facts [the Communist Party’s] total disregard of our rule of law and the fact that [it] is not to be trusted,” Lai wrote.

Lai also highlighted an Apple Daily campaign calling on readers to petition Trump to “save Hong Kong”, saying he expected “a million letters flooding the White House” as a result.

“I hope it’ll work because foreign support, especially America’s support, is our only salvation at this time of crisis,” he added.

Lai admitted writing the messages but denied trying to use the social media platform to enhance his own influence abroad. “I’m not so presumptuous as a person,” he told the court.

The trial resumes on Wednesday, with the defence expected to argue Lai never issued editorial directions in high-level “lunchbox” meetings with senior staff.

Additional reporting by Sammy Heung and Fiona Chow

China ‘diamond bachelor’ cons 3 women, uses ill-gotten funds to lavish gifts on real lover

https://www.scmp.com/news/people-culture/trending-china/article/3287513/china-diamond-bachelor-cons-3-women-uses-ill-gotten-funds-lavish-gifts-real-lover?utm_source=rss_feed

A man in China has been jailed for conning three women out of a total of 540,000 yuan (US$75,000), using the money to present himself as a “diamond bachelor” and lavish gifts on his “real girlfriend”.

When arrested by police in Wugong county, Shaanxi province, northwestern China, the man, identified as Wang, did not acknowledge his crime but defended himself by claiming that the victims “were willing to date him and were willing to send money to him,” according to Jiupai News.

At the end of last year, a woman reported to the police that Wang, whom she had been dating for several months, had borrowed money from her under false pretences. He used various excuses, including claims that his sister had cancer, that he needed to buy an electric bike and a mobile phone, and that he had to pay medical bills for his own kidney problems.

When the woman asked him to return the money, Wang initially promised to do so but repeatedly delayed repayment, citing various reasons. Eventually, he cut off all contact with her.

Police discovered that two other women had also fallen victim to Wang’s scam. All three victims are single and divorced, in their 30s, according to the police.

Wang, who posed as a wealthy businessman, was actually a migrant worker with a low income and no car or house, as revealed by the police investigation.

He spent the ill-gotten funds on another woman, purchasing luxury items for her and taking her on trips. Wang referred to this woman, surnamed Cheng, as his “real girlfriend”.

The couple met before Wang encountered the three victims online. He resorted to the love scam scheme to obtain money because he feared that Cheng would look down upon him due to his impoverished background.

The police found that to lend money to Wang, some victims not only depleted their savings but also borrowed from relatives and online platforms, placing them under significant financial strain.

In January, a local court sentenced Wang to eight years and three months in prison and fined him 50,000 yuan (US$6,900). He wrote a letter of apology to the three victims, vowing to work hard to repay the money after his release from prison.

The Shaanxi Provincial Women’s Association, a semi-government body dedicated to women’s rights protection, later highlighted this case in its legal awareness campaign aimed at women.

Similar love scams frequently make headlines in mainland China.

In another love scam, a man in eastern China’s Anhui province was arrested last year for stealing three million yuan (US$420,000) from eight women he met online and with whom he cultivated relationships.

Hong Kong to boost financial reforms to aid Chinese firms, Paul Chan says

https://www.scmp.com/business/banking-finance/article/3288041/hong-kong-boost-financial-reforms-aid-chinese-firms-paul-chan-says?utm_source=rss_feed

Hong Kong plans more financial reforms to aid mainland Chinese companies facing investment and funding challenges in Western markets, the city’s financial head said on Monday, while a top central government official in Hong Kong called for support for “integrated development”.

“Under the shadow of geopolitical tensions, mainland enterprises now face unprecedented challenges in raising funds and investing in Western markets,” Financial Secretary Paul Chan Mo-po said at a forum discussing how to attract Chinese companies to list in Hong Kong.

“In response to these circumstances, Hong Kong will implement further reforms in its securities and financial markets to attract more domestic and international capital, supporting the development needs of projects and businesses in the Greater Bay Area.”

Qi Bin, the newly installed deputy at the central government’s liaison office in Hong Kong, reiterated that top leaders support the Greater Bay Area and said the region and listed enterprises should better support the “integrated development” of Hong Kong and the mainland.

“The Guangdong-Hong Kong-Macau Greater Bay Area is home to 5,000 listed companies and has played a significant role in participating in the construction of major cooperation platforms, deepening financial connectivity between the two regions, and promoting financial and trade collaboration between them,” Qi said.

Chan and Qi spoke at the Guangdong-Hong Kong-Macau Greater Bay Area Listed Companies Summit 2024 in Hong Kong.

“We hope that listed companies in the Greater Bay Area will actively leverage Hong Kong’s advantages, using Hong Kong as a base for overseas expansion,” Qi said. “While consolidating markets in Europe and the United States, they should also join hands to explore emerging markets such as Asean, the Middle East, and Latin America.”

The initial public offering (IPO) market in Hong Kong began to pick up in the second half of the year, following a long period of low activity. For the first six months, the Hong Kong stock exchange recorded its lowest first-half total of IPOs in more than two decades, according to data from the London Stock Exchange Group.

In June, QuantumPharm, an artificial intelligence drug researcher, raised HK$989.3 million (US$126.8 million), under a new rule Hong Kong announced late last year that allows pre-revenue technology unicorns to raise funds in Hong Kong.

In September, Chinese appliance maker Midea raised US$4.6 billion in the largest share offering in three years. Driven largely by this, Hong Kong regained its position as one of the world’s top five IPO venues as of the end of the third quarter.

Beijing has stepped up scrutiny of companies that want to list on domestic markets, leading many to pivot to listing in Hong Kong.

Hong Kong can also reposition itself as an important venue for the funding needs of Chinese companies seeking to expand overseas, said Ba Shusong, chief China economist at bourse operator Hong Kong Exchanges and Clearing.

“In recent years, we have observed a shift from the previously one-way flow of international capital into China to an increasing number of mainland enterprises leveraging Hong Kong to access international markets and provide supply chain services,” he said. “Currently, approximately half of mainland China’s investments routed through Hong Kong are ultimately directed to other regions.”

In addition to providing financing for mainland enterprises, the Hong Kong market also serves as a platform for mainland companies to go global, he added.

“It facilitates overseas mergers and acquisitions,” Ba said. “After the establishment of international businesses, these companies could also return to Hong Kong for listing.”

Never underestimate the Chinese people, says ex-Singapore prime minister Lee Hsien Loong

https://www.scmp.com/news/china/diplomacy/article/3288057/never-underestimate-chinese-people-says-ex-singapore-prime-minister-lee-hsien-loong?utm_source=rss_feed

Singapore’s former prime minister Lee Hsien Loong has warned it would be “short-sighted” to discount China, citing its ability to follow consistent policies over the long term and the people’s resolve to succeed.

He said the world’s second largest economy is facing different challenges after almost five decades of rapid growth following its reform and opening up process, including a property crisis and shrinking population, as well as rising tensions with the United States.

But Lee, who is now senior minister, told a business event in Suzhou it would be “unwise” to write China off, according to Singaporean broadcaster CNA.

“China’s development is an enterprise that will take 100 years. It has shown that it can take a strategic perspective to maintain consistent policies and direction over the long term, riding through transient ups and downs in its development journey,” he said.

In particular, he said the country’s economy has “considerable capacity” to grow given its untapped potential in its workforce and higher productivity from an increasingly urbanised population.

“We must never underestimate the Chinese people’s determination for their nation to succeed and stand tall in the world. This is a driving ambition. Its impact cannot be captured in economic statistics, but it will make all the difference,” he said.

Lee also said Singapore believed a growing and prospering China could contribute to the “prosperity and well-being of other countries and a stable international order where all countries big and small coexist peacefully together”.

He also cited its leadership in new energy sectors such as electric vehicles, batteries and solar panels.

During the visit to to mark the 30th anniversary of the China-Singapore Suzhou Industrial Park, he met Vice-Premier He Lifeng, who described the project as a “microcosm of China’s reform and opening up”, according to Singapore’s Chinese-language newspaper Lianhe Zaobao.

Lee said that while the success of the park was important, with a reputation that had spread “far and wide”, it was also a model that showed how China could adapt previous models of economic development and urban planning to suit its own circumstances.

Singapore’s foreign ministry said that Lee and He expressed confidence that the project would “continue to serve as a pathfinder and model for future bilateral cooperation” and had witnessed the signing of various initiatives, including one to promote the park’s development over the next decade.

Lee, who last visited Suzhou in 2010, is on a six-day visit to China, and will also visit Shanghai and Beijing in what is his first visit to the country since he stepped down as prime minister in May.

The Singaporean Prime Minister’s Office said Lee will meet President Xi Jinping during his visit to the Chinese capital.

He has been a regular visitor to China, travelling there 14 times during his two decades as prime minister.

Lee was the first co-chair of the Joint Steering Council for the Suzhou Industrial Park, which later evolved into the Joint Council for Bilateral Cooperation, a key platform to discuss collaborative projects.

His upbeat comments about the Chinese economy echo remarks he made last month, when he said that despite the economic headwinds Beijing was facing, “there are some reasons [for] which we can be confident that this is a country which is going to be there for a very long time”.

He told a forum in Singapore that Beijing’s plans to raise the retirement age would allow for “better use of the population”, adding that the country’s rural population could be another way to strengthen the workforce as urbanisation continues.

“These are all ways in which China can continue to grow,” he said, stressing: “We should not think that China has peaked”.

Apple’s Cook makes third trip to China in 2024 amid iPhone slump and AI uncertainty

https://www.scmp.com/tech/big-tech/article/3288001/apples-cook-makes-third-trip-china-2024-amid-iphone-slump-and-ai-uncertainty?utm_source=rss_feed

Apple CEO Tim Cook turned up at a supply chain conference in Beijing on Monday, his third public appearance in China this year, as the executive courts the world’s biggest smartphone market amid an iPhone sales slump and uncertainty around the local launch of the Apple Intelligence system.

Cook, seen in a short video clip published on Monday, said he valued Apple’s Chinese partners “very highly”. “We could not do what we do without them,” he said in response to a question from an online media outlet affiliated with state broadcaster China Central Television.

The executive appeared at the China International Supply Chain Expo, which is set to kick off on Tuesday. It was his first time attending the show, Cook told Ren Hongbin, chairman of the China Council for the Promotion of International Trade, the event organiser.

Apple did not disclose Cook’s itinerary. The company did not immediately respond to a request for comment on Monday.

Cook’s latest trip to China reflects the importance of the market to Apple, even as the company moves to diversify its production chain away from the country to counter geopolitical risks.

Heated competition from domestic vendors has battered iPhone sales on the mainland. And while local rivals like Xiaomi and Huawei Technologies spin-off Honor have already introduced artificial intelligence software to their handsets, Apple is still awaiting approval from Chinese regulators to launch its AI services.

Huawei is slated to debut on Tuesday its Mate 70 smartphone series, the successor to the Mate 60 series that surprised many with its 5G capability and advanced processor when it was launched last year. The official Huawei online store showed that over 3 million people had signed up for pre-orders of various Mate 70 models on Monday. Pre-orders only signal an intention to buy, without requiring a deposit.

Despite the worldwide popularity of its iPhone 16 Pro launched in September, Apple saw a sharp double-digit year-on-year decrease in smartphone sales in China during this year’s Singles’ Day, according to research firm Counterpoint. In contrast, sales of Huawei’s handsets grew 7 per cent during the world’s biggest online shopping event.

Apple’s revenue in the 12 months ended September 28 fell 7.7 per cent year on year in the Greater China market, which includes the mainland, Hong Kong, Macau and Taiwan, according to its latest financial report.

Amid the growing challenges, Cook in March went on a charm offensive in Shanghai, where he met local video game developers, a filmmaker and Wang Chuanfu, the billionaire founder of electric vehicle maker BYD. He also opened a new Apple store.

In October, Cook travelled to Beijing to meet top Chinese officials, including the head of the Ministry of Industry and Information Technology and the minister of commerce. They discussed Apple’s development in China, cyber and data security, and cloud services, according to official readouts.

Chinese woman dies after laser treatments for spot and birthmark removal

https://www.scmp.com/news/people-culture/trending-china/article/3287694/china-woman-dies-after-laser-treatments-spot-birthmark-removal-raising-serious-concerns?utm_source=rss_feed

A woman in China died 10 days after undergoing a series of laser treatments for spot and birthmark removal, raising significant concerns about the safety of cosmetic surgery.

The 27-year-old, identified by her surname Liu, was from Tianjin, a northern city in China. Her husband reported that she had numerous spots on her body, some of which were dark and large.

Liu had been diagnosed with neurofibromatosis and cafe-au-lait spots, necessitating multiple freckle removal procedures. She underwent nine laser treatments at Tianjin’s Jinmen Dermatology Hospital, a private clinic, after spending over 100,000 yuan (US$14,000).

However, Liu informed her doctors that her symptoms were worsening following the procedures. Her mother revealed that Liu had once halted treatment due to severe pain caused by uneven application of anaesthetic.

On October 21, during her 10th procedure, Liu experienced dizziness after anaesthetic cream was applied. Although the doctors quickly removed the cream, she went into shock, suffered convulsions, and experienced cardiac arrest.

Emergency services were called, and Liu was transferred to another hospital for urgent care, but she succumbed to her condition 10 days later.

Emergency doctors reported that Liu died from complications related to excessive intracranial pressure. Her body has been sent for a forensic autopsy, with results pending.

Liu’s husband suspects that an excessive amount of anaesthetic triggered an allergic reaction that led to her death.

Staff at Jinmen Dermatology Hospital defended their procedures, stating that the anaesthetic cream was applied according to standard protocols and that allergy tests were available upon request.

The hospital director, Zhang, expressed regret over Liu’s death, stating: “We will take full responsibility if found at fault.”

In China, medical professionals who cause a patient’s death through negligence can face up to three years in prison and fines.

The incident quickly gained attention on mainland social media, with related topics amassing 58 million views on Weibo.

A woman on Weibo, claiming to be Liu’s friend, alleged that the hospital lacked adequate emergency care, resulting in a missed critical window to save Liu’s life.

One online observer commented: “If Liu hadn’t undergone the surgery, this tragedy might not have happened. Compared to health, beauty is insignificant.”

Another emphasised the importance of respecting the deceased, stating: “Café-au-lait spots do not just affect looks; they can significantly impact one’s mental health. Liu wasn’t wrong to seek treatment; the issue lies with the hospital.”

A third commenter highlighted broader issues in the medical industry: “Private clinics often lack safety and reliability. Surgeries should be performed in reputable public hospitals.”

The cosmetic industry is fraught with medical disputes. Statistics indicate that only 12 per cent of 13,000 cosmetic clinics in China comply with legal regulations.

Reports of fatalities from cosmetic surgeries have emerged across the country.

In January last year, a 43-year-old woman in eastern China died due to medical negligence during a liposuction procedure.

In December 2020, a woman from southern China died after undergoing six cosmetic procedures within 24 hours

---

China builds a machine capable of laying submarine cables in the Challenger Deep

https://www.scmp.com/news/china/science/article/3287733/china-builds-machine-capable-laying-submarine-cables-challenger-deep?utm_source=rss_feed

China has built the world’s first machine capable of laying submarine cables in the Challenger Deep, the deepest known place on Earth.

Positioned at the southern end of the Mariana Trench in the western Pacific Ocean, the Challenger Deep has a maximum depth of nearly 11,000 metres (36,089 feet) below sea level. Yet this is within the range of China’s new all-depth optical cable winch system, the Haiwei GD11000.

Jointly developed by Dalian Maritime University, Liaoning province, and a number of domestic machinery and sci-tech companies, it can deploy cables to a maximum depth of more than 11,000 metres (36,089 feet), according to a university statement on November 16.

The Challenger Deep lies about 322km (200 miles) southwest of the island of Guam, home to a major US military base. Being able to use the underwater trench could potentially give the Chinese military a way to break through the “second island chain” – a strategic collection of Pacific bases forming a line of defence for mainland America.

Li Wenhua, a professor at the university’s marine engineering college and chief scientist on the project, said the Haiwei GD11000 could conduct marine scientific research “at the maximum depth of all the oceans in the world”.

The previous record for the world’s deepest subsea cable was set by Italian cable manufacturer and installation services provider Prysmian. The company announced in July that it had completed an ultra-deep submarine cable installation at a depth of 2,150 metres (7,053 feet).

Described as “China’s first and the world’s only all-depth optical cable winch system”, the Haiwei GD11000 is an entirely independent development. And it has already demonstrated its full capabilities for maximum-depth ocean research by recently completing its first deep-sea survey in the South China Sea.

During the voyage aboard the Guangzhou Marine Geological Survey Bureau’s Ocean Geology 2 vessel in October, the system completed two deep-sea towing operations in water depths of more than 4,000 metres (13,123 feet), with the maximum cable deployment length of 11,228.7 metres (36,840 feet).

Haiwei GD11000 also demonstrated the use of cable-controlled underwater robots for seabed observation, marker placement and sampling.

“This fully validated its stability and operational capability,” the statement said.

The optical cable winch system – designed to deploy, recover and tow large systems such as cable-operated underwater robots – serves as an indispensable piece of equipment for deep-sea resource exploration and development.

As marine scientific research has moved into deeper waters and harsher environments, the demand for a more advanced winch system has increased.

So, a national joint research and development project to address this need was approved by the Chinese Ministry of Science and Technology in December 2023.

Now, after overcoming technological and engineering challenges, the team has delivered a cutting-edge product.

Li said the Haiwei GD11000 has a safe working load of greater than 15 tonnes and a speed of up to 120 metres per minute (393 feet per minute). It is also ultra-thin, with a cable diameter of less than 34mm (1.3 inches), but the transmission power can reach more than 51 kilowatts.

In the future, the machine will be deployed for routine deep-sea and polar survey operations on board research vessels.

“It will provide technological support for China’s marine scientific research efforts and deep-sea resource exploration,” the university said.

Chinese military disguised as fishing boats? Philippine defence chief raises concerns

https://www.scmp.com/week-asia/politics/article/3287962/chinese-military-disguised-fishing-boats-philippine-defence-chief-raises-concerns?utm_source=rss_feed

The Philippines’ defence chief has accused Beijing of sending military vessels disguised as fishing boats to block access to areas in the South China Sea, with observers noting that the alleged tactic would add a “new dimension” to Chinese grey-zone activities amid a long-running maritime row with Manila.

Defence Secretary Gilberto Teodoro made the comments during a visit on November 19 to Palawan with US counterpart Lloyd Austin, where both men condemned what they said was “dangerous and escalatory” behaviour by China in the disputed waters.

Beijing’s foreign ministry has yet to respond to the allegations.

“[Beijing has] been more aggressive in denying us access to our exclusive economic zone in the western Philippines. They have really placed a lot of these pseudo-military vessels disguised as Coast Guard vessels and maritime militia vessels in the areas west of the Philippine Sea,” Teodoro told a press briefing.

In September, the Armed Forces of the Philippines tallied a record-high 251 Chinese vessels in the West Philippine Sea – Manila’s term for waters in the South China Sea that it considers part of its exclusive economic zone – including People’s Liberation Army Navy warships, coastguard vessels, and maritime militia boats.

Observers say the alleged use of these military vessels disguised as fishing boats would add a new dimension to Beijing’s usual tactics in its grey-zone strategy as it continued to assert control over disputed maritime areas.

“At the same time, it can be part of their deception strategy to mask their presence and intent. This can also be a tactic to stretch the naval and Coast Guard resources,” Sherwin Ona, a visiting fellow at the Institute for National Defence and Security Research in Taiwan, told This Week in Asia.

Yet, China using fishing boats to engage in anti-access and area denial activities was “not a particularly new or groundbreaking tactic” as Beijing’s maritime militia has long been using both standard fishing boats and larger purpose-built vessels to do so, according to Vincent Kyle Parada, a former defence analyst for the Philippine Navy and a graduate student at the S. Rajaratnam School of International Studies.

Parada added that the China Coast Guard (CCG) far exceeded “in both numbers and tonnage the navies of many of its regional neighbours” and employed several former PLA Navy warships.

He said that the real “novel” strategy would be the use of uniformed personnel aboard the fishing boats as these were different from militia members.

“Normally, PLA Navy and CCG personnel would be restricted to just training and instruction as far as these non-commissioned vessels were concerned. Their presence on these ships could indicate a more active and potentially hostile posture against Philippine forces in the South China Sea,” Parada said, adding that “you don’t send soldiers to do civilian law enforcement’s job”.

Last Thursday, Philippine lawmaker Robert Ace Barbers, head of a committee investigating Philippine offshore gaming operators (Pogos), cited Teodoro’s statements and reignited concerns China might have sent military intelligence officers disguised as workers of such gaming hubs to conduct surveillance operations.

Ona said this was a possibility, citing an incident in 2020 when then senator Panfilo Lacson expressed concern and revealed that between 2,000 to 3,000 PLA members were in the Philippines for an immersion mission.

Parada said the usage of fishing boats was consistent with China’s actions to rely heavily on coastguard and militia operations to deny opponents access to the South China Sea “while falling below the threshold of armed conflict”.

“Civilian vessels or ‘white hulls’ are extremely valuable in that regard because their presence is not usually seen as escalatory. They could generally get away with more aggressive manoeuvres, which warships or ‘grey hulls’ could not,” he said.

Yet Parada added that the challenge “lies in the fact that the CCG is no ordinary coastguard. “Apart from its superior numbers and capabilities, the CCG is a gendarmerie-type force and is both armed and legally empowered to use force to defend China’s national sovereignty, sovereign rights, and jurisdiction.”

Ona said the Philippines should continue exposing China’s tactics and boost awareness and cooperation with allies.

Parada meanwhile suggested Manila could counter Beijing’s grey-zone operations by “pre-emptively eliminating as much of the unknowns”, including preparing for “every scenario” in confrontations, adding: “Certainty is the best weapon against ambiguity.”

China aims for more than 100 ‘trusted data spaces’ by 2028 under national action plan

https://www.scmp.com/news/china/politics/article/3287937/china-aims-more-100-trusted-data-spaces-2028-under-national-action-plan?utm_source=rss_feed

China aims to build more than 100 “trusted data spaces” by 2028 and develop a series of data space solutions and best practices, according to an action plan released over the weekend.

The move marks a major step forward in building a national integrated data market with secure links to other countries.

A trusted data space is an infrastructure for secure data circulation and use, connecting trusted players including data owners, providers, users and developers. The storage and exchange of this data is based on consensus rules and standards, enabling efficient sharing.

According to the 2024-2028 action plan released on Saturday by the National Data Administration (NDA), initiatives will be launched to promote trusted data spaces across enterprises, industries, cities and beyond.

The administration pledged to set up an “efficient, convenient and secure” cross-border data flow mechanism based on multilateral frameworks, such as the Shanghai Cooperation Organisation, Brics and Group of 20.

“We will explore the establishment of a trusted data space dialogue and cooperation mechanism, and promote the construction of international cooperation demonstration projects for trusted data space under regional cooperation platforms such as the Belt and Road Initiative,” the action plan said, referring to Beijing’s cross-continental trade and infrastructure strategy.

It also pledged to “explore the interconnection of domestic and foreign data spaces”.

Within the country, the NDA will build a secure and reliable data space framework, with clearly identified rights and responsibilities for resource management, and safe and reliable application services.

Trusted data space operators will also be encouraged to ensure full traceability of data resource development and utilisation, so as to safeguard the rights and interests of all parties involved.

Operators of the trusted data space will also provide technical services such as data identification and semantic conversion.

Wu Hequan, an academician at the Chinese Academy of Engineering, said that many cities in China generated a vast amount of data that required a lot of pre-processing, because the receiving parties did not always have the capability to handle it.

Trusted data spaces would facilitate data resource retrieval and utilisation, by providing a secure environment for their development and application, Wu was quoted as saying by state news agency Xinhua.

The trusted data spaces plan is one of eight development policy guidelines expected from the NDA, which was set up in October last year to promote the building of a “digital China”.

According to NDA director Liu Liehong in July, the eight guidelines would relate to issues including data property rights, data circulation, data revenue sharing, security governance, public data development, enterprise data development and high-quality development of the digital economy.

On Friday, a day before releasing the trusted data space plan, the NDA released a set of draft guidelines for national data infrastructure construction. The guidelines are open for public feedback until December 1.

China hits jackpot with gold reserves, Japan’s first kiss rate: 5 weekend reads you missed

https://www.scmp.com/news/world/article/3287951/china-hits-jackpot-gold-reserves-japans-first-kiss-rate-5-weekend-reads-you-missed?utm_source=rss_feed

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

---

Yuan to catch up to China’s position in world’s economy: ex-official

https://www.scmp.com/economy/global-economy/article/3287977/yuan-catch-chinas-position-worlds-economy-ex-official?utm_source=rss_feed

Beijing would continue to advance the internationalisation of the yuan and further leverage Hong Kong’s role as a centre for offshore transactions, with the goal of aligning the currency’s share in worldwide payments with China’s proportion of global gross domestic product, according to a prominent former senior official.

It is estimated that yuan’s share in global payments would increase by 1 percentage point annually to about 17 per cent by 2035, as its usage in cross-border payments would gradually catch up to China’s position in the world’s economy, said Huang Qifan, the former mayor of the western megacity Chongqing, at the International Finance Forum (IFF) annual meeting on Friday.

“The internationalisation of the yuan will contribute to stabilising the global supply chain,” he said, suggesting China should improve yuan settlement services to facilitate the currency’s use in emerging sectors, such as cross-border e-commerce.

The yuan’s share in global payments had been on a steady rise over past years, hitting a record high of 4.74 per cent in July, according data from the Society for Worldwide Interbank Financial Telecommunication (Swift).

It did weaken to 2.93 per cent in October, but remained the fifth most active currency for global payments by value after the US dollar, euro, British pound and Japanese yen.

Swift payment data is a major indicator for the relative status of international currencies, with other metrics including frequency of use in foreign exchange markets, commodity trading and governments’ foreign reserves.

In contrast in 2023, China’s GDP accounted for 16.9 per cent of the global economy, according to the World Bank.

Beijing has continued to promote the yuan as an alternative currency in international trade, as the perceived weaponisation of the US dollar against Russia has sent chills through emerging markets.

China, meanwhile, should accelerate the development of the offshore yuan market in Hong Kong and offer a wider range of yuan-denominated financial products, promoting the currency’s use within Regional Comprehensive Economic Partnership (RCEP) member countries, Huang added.

“Promoting the use of the yuan within the RCEP region is also key to the development of yuan’s offshore market,” Huang said.

RCEP is the world’s largest free-trade pact, encompassing all 10 Association of Southeast Asian Nations member states, plus China, Japan, South Korea, Australia and New Zealand, with Hong Kong having made an application to join the trade bloc.

Huang’s call to strengthen Hong Kong’s position as the hub for offshore yuan transactions was echoed by the city’s former financial secretary, Antony Leung Kam-chung, at the IFF meeting on Friday.

Leung said that given the yuan may not achieve full convertibility in the “short term, or even the medium term”, Hong Kong should take on the responsibility of advancing its global use by establishing an offshore asset management centre, as the city is home to the world’s deepest yuan liquidity pool outside mainland China.

“The use of yuan is continuously expanding, and more countries are using it for trade settlements,” he said.

Amid uncertainties in international trade and the risk of being excluded from financial messaging system Swift, Hong Kong could help mitigate the risks by developing mBridge – an alternative for cross-border payments – in collaboration with the People’s Bank of China and other regional central banks, Leung added.

Launched in 2021, the project was jointly developed by the Bank for International Settlements Innovation Hub and the central banks of China, Hong Kong, Thailand and the United Arab Emirates. Saudi Arabia joined the project in June, although the project is under development.

It would be part of the combined efforts in promoting the internationalisation of yuan, alongside China’s Cross-Border Interbank Payment System (CIPS).

CIPS was launched in October 2015 to provide an independent international yuan payment and clearing system connecting both onshore and offshore clearing markets and participating banks.

New coating can make China’s stealth aircraft invisible to anti-stealth radar: study

https://www.scmp.com/news/china/science/article/3287546/new-coating-can-make-chinas-stealth-aircraft-invisible-anti-stealth-radar-study?utm_source=rss_feed

The Chinese military has unveiled a stealth material capable of blinding anti-stealth radars.

Laboratory tests have demonstrated that it can effectively absorb low-frequency electromagnetic waves from various angles, with a thickness equivalent to just two sheets of printing paper – a feat previously deemed impossible.

Anti-stealth radars emit electromagnetic waves with wavelengths reaching centimetres or even metres. Currently, due to their thinness, the materials coated on stealth aircraft are unable to effectively absorb these long-wave signals.

China has deployed a large number of anti-stealth radars along its coastline and on naval ships, and the People’s Liberation Army (PLA) claims the radars can detect stealth fighter jets such as the US F-22 and F-35 from considerable distances.

But now the new material developed by scientists from the National University of Defence Technology (NUDT) can convert electromagnetic waves with wavelengths ranging from 70cm (2.3 feet) to 20cm into heat.

This covers the operating bandwidths of most current anti-stealth radars, namely the P-band and L-band.

This material is lightweight, flexible and easy to produce in large quantities, making it suitable for covering aircraft or other weapon platforms requiring stealth capabilities.

The scientists involved in the project said their work “does not violate the fundamental laws of physics”.

“Emerging artificial composite materials, through periodic or aperiodic arrangements, exhibit unusual properties and can achieve physical phenomena and applications that natural materials cannot,” wrote the project team led by Cui Kaibo, a researcher with the State Key Laboratory of Complex Electromagnetic Environment Effects on Electronics and Information System, in a peer-reviewed paper published in the Chinese language journal Telecommunication Engineering in October.

This special structure is also known as a metamaterial. Cui and his colleagues used an unidentified metal to create a special circuit over the coating. When low-frequency electromagnetic waves hit the coating, they induce currents on the surface of the metal foil layer.

These currents can then be converted into heat and quickly dissipated into the air.

This technology achieves unprecedented ultra-wideband low-frequency stealth effects without the need for heavy and expensive magnetic ingredients, according to the researchers. This makes the material cost-effective and scalable for application on various types of military equipment.

This technology may become “the key for China to win future wars”, according to Cui and his colleagues.

China currently holds the most patents in metamaterials. At the China Airshow held in Zhuhai earlier this month, a private enterprise headquartered in Shenzhen unveiled the world’s first drone completely covered in metamaterials.

This drone is said to possess unprecedented stealth capabilities. The mass-produced version is scheduled to roll off the production line at a factory in Zhuzhou, Hunan next year.

Chinese firms likely to boost M&A activity in response to Trump threats: analysts

https://www.scmp.com/business/banking-finance/article/3287798/chinese-firms-likely-boost-ma-activity-response-trump-threats-analysts?utm_source=rss_feed

China’s outbound mergers and acquisitions (M&A) activity could jump, as US president-elect Donald Trump’s tariff threats accelerate the globalisation of mainland enterprises, according to industry experts.

Bracing for the possibility of 60 to 100 per cent tariffs on Chinese goods, firms in the world’s second-largest economy are exploring ways to reduce reliance on the US, albeit in a frail global M&A environment beset by high interest rates and ongoing geopolitical tensions.

“More tariffs may mean that the globalisation of Chinese companies is going to get faster,” said Stanley Lah, Asia-Pacific and China M&A services leader at Deloitte. “Chinese companies will consider moving faster to look for alternatives in shipping or selling to the US. That is quite loud and clear.”

M&A activity should emerge as a speedier solution to satisfy Chinese companies’ objective of being more effective in global markets, compared with greenfield investments such as setting up sales offices or manufacturing facilities, he added.

Chinese outbound M&A deals fell 16.5 per cent to US$17 billion so far this year, compared with the same period last year, according to London Stock Exchange Group data. Last year, the tally rose 59 per cent year on year to US$27 billion – still far below the 2016 peak of US$202 billion.

Dealmakers have seen some rebound in China’s outbound M&A, especially in the sectors with Beijing’s “blessings”, according to Federico Bazzoni, CEO of investment banking at Vantage Capital Markets.

“I see some activities coming back in specific sectors,” he said, mentioning manufacturing, technology, new energy such as solar power and batteries, and “a little bit” on consumer products. “Valuations are coming down.”

Earlier this month, a unit of Tencent Holdings acquired Cyprus-based game maker Easybrain from Embracer Group in Sweden for US$1.2 billion. In April, Chinese home appliance giant Midea Group agreed to acquire the climate division of Arbonia, a Swiss manufacturer of heating equipment, for around US$811 million.

Mega cross-border deals have been rare globally, not just in China, said Deloitte’s Lah, citing uncertainties in getting regulatory approval. “Geopolitical sentiment is sensitive, and deals are complicated, pushing down the headline deals in recent years,” he said.

The size of recent M&A deals contrasts starkly with Chinachem’s US$43 billion acquisition of Syngenta, one of the world’s largest agricultural technology firms, in 2017, and Chinese conglomerate HNA Group’s US$6.5 billion purchase of a quarter stake in Hilton Worldwide in 2016.

The market may see outbound activity from Chinese firms pick up in the second quarter of 2025 after getting more clarity on policies at home and abroad, Vantage’s Bazzoni said.

“From my conversations with some of the state-owned enterprises, some of the corporates, they are waiting to see what’s happening,” he said. “They are not engaging with new targets unless there will be some clarity from the [Chinese] government and from the Trump administration.”

Meanwhile, the picture for the inbound M&A activity in China is gloomier with Trump’s return to the White House.

It is obvious that US investors are not comfortable investing in China, as Trump seems likely to intensify restrictions on Chinese access to advanced technologies such as artificial intelligence and semiconductors.

The investment community is looking for the differences between the Biden and Trump administrations to identify opportunities, according to analysts.

Recent assurances from Beijing’s top policymakers that China is open for business and foreign capital have boosted investors’ confidence in the stock market despite long-term capital in M&A being more cautious.

“Investors are looking to confirm that the country’s efforts to support economic development are a priority and sustainable,” Deloitte’s Lah said. “There are more activities that we’re seeing, more inquiries, but obviously, some deals [take] a little bit more time to cook.”

Europe expert Cui Hongjian on why China, EU face worst-case scenario as Trump returns

https://www.scmp.com/news/china/diplomacy/article/3287856/europe-expert-cui-hongjian-why-china-eu-face-worst-case-scenario-trump-returns?utm_source=rss_feed

Cui Hongjian is a leading Chinese researcher on European studies. A former diplomat, he is the head of European Union studies at Beijing Foreign Studies University. Talking to the South China Morning Post, Cui delves into the changing dynamics of China-EU relations and the impact of a strong comeback by Donald Trump, the US president-elect. For other interviews in the Open Questions series, click .

The fundamentals that define China-EU relations have changed in recent years. The gap in perception of each other is deeper, which has also dealt a blow to academic exchanges.

China’s stance of a comprehensive strategic partnership with the EU – that views cooperation as greater than competition and consensus as greater than differences – has been rejected by the EU.

India, Africa and Latin America – but not China – have been listed by the European Union as its next-generation strategic partnerships.

In the EU’s view, its triple positioning on China – as a cooperative partner, an economic competitor and a systemic rival – is based on reality and objectively reflects the status and trajectory of Europe’s policy logic towards China.

Meanwhile, China is still focused on the expectations of a bilateral relationship.

There has also been a shift in power dynamics. China has become stronger and more influential while Europe feels it is in a decline.

Europe has always been anxious about competitiveness. In the past, it was the US and Japan that Brussels was worried about but in recent years, it has been taking China’s role into account.

The EU’s anxiety has so far remained focused on economic and technological competitiveness, but risks are mounting that the anxiety might exacerbate to the strategic level, including institutional competition.

China needs to improve and update its own perception of Europe. We cannot remain in the past. We used to focus on the economic aspect but neglected exchanges in the areas of security and geopolitics.

We also used to say that China and Europe do not share historical legacy issues nor geopolitical conflicts, which are two fundamental premises for formulating policies for bilateral relations. But these two premises have been weakened in recent years.

Both sides share different or even contrasting perceptions of history. From our perspective, the history of China’s entry into modernisation was a period of anti-imperialism and anti-colonialism, while many Europeans view it as the conquest of civilisation over barbarism – a notion that is deeply rooted in Europe.

Correspondingly, there is a clear and significant cognitive difference between China and the EU on the question of whether China is still a developing country or has become a developed economy.

We also need to go beyond conventional notions of geopolitical conflict.

China and Europe don’t have territorial conflicts that require military tools as a solution, but they have indeed had conflicts in cyberspace, with some mentioning a Chinese threat on the cyber front. It is a new geopolitical conflict.

China’s relations with Russia, such as joint military drills in the Baltic and the Mediterranean, have raised concerns in the EU. Germany, France and the Netherlands have conducted naval ship transits through the Taiwan Strait in recent years.

The differences in security concepts between the two sides have the potential to evolve into real security differences and risks.

Those developments indicate that we cannot ignore the geopolitical factor in bilateral relations. We need to find a new fundamental positioning and logic for the bilateral relationship. We hope to find a path to enter the next phase as soon as possible.

I believe that these dramatic changes will also be strongly felt by policymakers and policy implementers on both sides. The contradictions and conflicts that arise between the policy logics and the realities of the relationship need to be resolved to achieve a rebalancing. They may have to re-evaluate their work to reflect the changing circumstances, and in turn to reconsider policies and strategies.

There is a huge contrast between strategic judgment and practice. Over the years, the focus of both parties has been to update the top-level design, but from now on more attention needs to be paid to the underlying logic that can support it. Top-level design is a macro-level approach, while it also requires feedback, revisions and improvements based on practice.

The situation might be complicated, as we may face a triad game.

The European Union will try to find common ground with the United States to deal with China, but Trump may not necessarily buy into this approach. One major issue is that Europe has little influence over Trump.

If Trump imposes tariffs both on China and the EU, the EU may try to influence Trump’s team and divert the target to China by blaming China’s overcapacity, just like it did in Trump’s first term on steel and aluminium tariffs.

But it may not work as Trump has voiced his dissatisfaction on US imports of European cars.

The EU and the US set up three dialogue mechanisms – the Trade and Technology Council (TCC), as well as bilateral dialogues on China and the Indo-Pacific – to coordinate their policies against China.

The EU is now in touch with Trump’s transition team. First, Brussels expects Trump’s team to agree on negotiations to solve the tariff issues, hoping the new administration will continue with the TCC and other talks.

But it has also prepared for retaliation measures if Trump insists on imposing tariffs. By doing so, it could send a strong message to Trump that it would be a lose-lose game which might ultimately benefit China.

The current relationship between China, the US and Europe is not as simple as we might think. Some people might think that if Trump treats Europe poorly, Europe might then lean towards China. But it’s not that simple.

Although its current capabilities are limited, the EU’S ultimate goal is not to swing back and forth between China and the US. The EU wants to find its own baseline, to build up its capacity to support its ambition of “strategic autonomy”.

It is not easy to do so over the short term, and that is why it has taken a de-risking tactic towards Trump’s USA.

In the past, the EU built its strength based on coordination with other countries, such as with Russia in energy, with China in the economy and the US in security, which can be summarised as the global diversification of resources.

Now it has realised all those are not reliable, even its judgment about “over-reliance on the Chinese market” does not seem true in China.

But the EU has not reached a consensus yet, especially on strategic autonomy. It aims to become the third power between China and the USA but this path is a long one, and many issues in the middle are not yet clear, yet time is running out.

Compared with the situation of Trump’s first term, the EU is likely to face more weakness in security.

The strategy that Trump may employ is to link economic issues with security, using them as leverage against Europe. This approach would be very difficult for Europe to navigate, as they could be caught in a complicated set of interdependent issues where concessions in one area could lead to demands in another.

China and the EU must prepare for the worst-case scenario in Trump’s second term. Both sides will closely monitor each other’s moves at the beginning.

For instance, how China plans to respond and counteract will be of great interest to Europe, and vice versa. China should also watch out for the extent to which the US and Europe reach agreement on certain issues.

There may be areas where cooperation between China and Europe is possible, but it is very unrealistic to think that Europe will take a side between China and the US. Meanwhile, it is not realistic to assess US-EU relations without taking into account China’s influence.

Brussels and Beijing exchanged tit-for-tat sanctions in 2021. They discussed possibilities to remove them but the talks ended in a stalemate on who should take the main responsibility.

We hope the new European institutions may offer an opportunity for a change. And Trump’s tariff policy may add more urgency for both sides to remove obstacles to meaningful discussion on the issue of sanctions, to open up prospects for cooperation.

The conflict has caused spillovers on China. Beijing is under huge diplomatic pressure from the EU, while Russia may not be completely satisfied with China’s stand

On the economic front, Europe is increasingly treating China as a de facto ally of Russia’s, which means it is not just a matter of making money or not with China, but whether it is still worth collaborating with Beijing.

For Europe, the logic is straightforward: it should not be “blackmailed” by Russia on energy reliance, nor by China on markets.

The EU has undertaken measures to reduce economic dependency on China. There are also calls in the US, including from some Republicans, to work with Russia to counter China. Such possibilities should not be completely ruled out.

If the conflict comes to an end quickly, China would still face challenges controlling the spillover impact. How the conflict ends will be decided by how Russia and the US manage their relations. No matter which way it ends, it will directly affect China.

Given current US-China tensions, a change in Russia-US relations will inevitably affect the mutual trust between Beijing and Moscow.

Beijing also needs to consider possible reactions from the EU and Ukraine, such as whether they would place more expectations on China to influence Moscow. At least at the moment, some Europeans think China holds the key to solving the conflict, believing that Beijing should be able to influence Russian President Vladimir Putin.

No matter whether the conflict gets a quick resolution as Trump promised, or becomes more complicated, China-European relations will face further headwinds in political trust and economic cooperation.

Putin may have underestimated the reactions from Western countries, including German resolve to cut energy reliance on Russia, and did not expect Finland’s swift joining of Nato, while Europe mistakenly thought sanctions would crush Russia.

Looking east, Russia is also adjusting its strategic planning, such as promoting its relations with Mongolia, North Korea and India. This may complicate the geopolitical situation in China’s neighbourhood.

Russia and North Korea have moved closer recently, which would not only influence Pyongyang’s mindset in managing ties with China, but also might lead to subtle changes, like a chain reaction, in South Korea and Japan on how they view their security environment and China’s security role in the region.

There is also a misconception among the Chinese public. Some Chinese support Russia, not because they understand Russia but out of the shared need to counter the US. But somehow, it is a simplified thought. Just because China and Russia are facing the United States together does not mean that China and Russia are allies already.

The US-Russia conflicts vary greatly from China-US conflicts. For example, Russia has been expelled from the Swift interbanking system and therefore wants to set up its own currency settlement system, but China does not share the same interests, as its major trading partners are the United States and the EU.

We need to bring more nuance to our understanding of Nato. On the one hand, it has indeed been used as a tool for great power rivalry by the US. On the other, it also reflects to some extent the security demands and desire for protection of smaller European countries. We need to find a balance in assessing our relations with Nato.

China’s position, I think, is that it opposes Nato being leveraged by individual countries as a tool for power plays, but it does not have a general opposition to the membership of some European countries. For example, Finland’s accession to Nato does not affect its bilateral relations with China.

We need to distinguish different issues when dealing with Nato. In addition, Nato may face an existential crisis in Trump’s second term.

Will Nato deliberately say something to cater to Trump – just like European Commission President Ursula von der Leyen who, immediately after his victory, said the EU was willing to buy more energy products from the US? We need to wait and see.

So at the current stage, facing a mix of truth and falsehood, reality and pretence, we need to make good judgments, realise the complications of Nato itself and refrain from oversimplifying issues.

Nato has also tried to reduce the impact of Trump and to strengthen its European dimension – to turn itself into a security grouping for Europe would be a reasonable reaction towards possible pressure from Trump.

Meanwhile, Nato has also seen growing internal conflicts over strategic interests in recent years. For example, there have been debates within Nato over whether it should follow the US to pivot to the Indo-Pacific. Not all members are willing or capable of going to the Indo-Pacific.

We should be keenly aware that Nato is becoming more Europeanised and the trend may gather pace if Trump continues his previous policies against Europe.

At this juncture, we need a new perspective on Nato. To some extent, we must acknowledge that it has a certain rationality in addressing the security concerns of smaller nations, but it cannot continue down the path of becoming a tool for great power competition.

China and Nato have maintained engagement. There is a dialogue mechanism in place. I think China needs to convey a message that what suits Nato does not necessarily suit Asia.

It is unlikely and unrealistic that Nato will have new members from Asia and the Pacific, but it is indeed forging closer security relations with some Asian countries.

These relations are likely to be strengthened based on two conditions: a consensus among regional countries that China is a security threat to the region, as well as China’s handling of regional hotspot issues, such as with the Philippines and Japan, and the issue over Taiwan.

The US is now trying to draw the Asia-Pacific into a bloc confrontation over the issue of Taiwan, and may forge a security alliance in the region to counter Beijing.

China should be clear about the risks. China has bilateral security arrangements but lacks a multilateral security arrangement in the region. The changing dynamics require China to take some constructive moves, or to find a framework to resolve issues with India, Japan, the Philippines and even potential issues with other regional players.

The EU and the US share the notion that countries should abide by “the rules-based order” and have criticised China for violating such an order.

China’s accession to the World Trade Organization [in 2001] kicked off the best time in its relations with the West. But from 2008, the West’s mindset changed to the view that China was showing signs of being “assertive” and “not accepting rules”.

China’s refusal to accept The Hague tribunal’s ruling on the South China Sea in 2016 further changed the EU’s perception of China. Now its view is that China not only refuses the current order, but also tries to establish new orders based on its own rules.

The EU, however, has fewer policy levers against China. The Taiwan issue is something it views as capable of containing China. It is becoming more complicated in China-EU relations.

Beijing has also adjusted its policy focus over the Taiwan issue in recent years and the EU is concerned that Beijing might have given up peaceful measures in seeking unification.

This concern pushes European powers to increase their presence in the sensitive waters, such as more naval transits through the Taiwan Strait. In China’s view, the EU’s actions are a game of marginality between “upholding freedom of navigation rules” and “exerting diplomatic pressure”.

Europe has also paid more attention to the Taiwan issue out of concerns over disruption to the semiconductor supply chain in case of military conflict. It has even tried to persuade Taiwan to move factories from the island to the European continent.

In addition, both the EU and some of its members have continued to challenge Beijing’s one-China principle with their “one-China policy” that they can define at will. They are expanding their relations with Taiwan, such as official visits and economic talks, while testing the boundary of Beijing’s tolerance – whether such moves may or may not fuel strong opposition or retaliation from Beijing.

The US has also attempted to make Taiwan the Ukraine of the East in its strategic constraints on China. What policy Trump will implement over the issue of Taiwan will also affect Europeans’ approach.

So it may require Beijing to rethink its policies: clarify and add specific requirements to the one-China principle, discuss and be clear with its European counterparts what is permissible and what is not under the one-China principle.

This cannot be just a game of words, but has to be implemented in practice. Otherwise, the one-China principle will be consistently hollowed out.

China has always deemed the Taiwan issue as part of its internal affairs. It should rethink whether there are other options, apart from military ones, to ensure security across the strait.

On the South China Sea disputes between China and neighbouring countries, the EU has actually over-read the situation.

China, including its researchers, need to tell their European counterparts that the South China Sea tribunal is just an individual case and China’s rejection of the tribunal ruling does not mean a blanket rejection of all international rules. The EU should not use it as a pretext in its judgment.

It requires a lot of work on clarification and explanation, and China is also open to discussion on the rules-based order. Both sides also have to shake off political influence that has weighed in too much recently on many issues and squeezed room for meaningful exchanges at all levels.

Without substantial exchanges, tit-for-tat policy responses to each other will only lead to a downward spiral in relations.

China has never encountered such a complex situation before. In the past, China cooperated with major members to influence EU policies, and economic cooperation used to be the starting point to push forward engagement on other areas, such as political and cultural exchanges.

But it is time to rethink whether that approach still works.

Looking ahead, China needs to find areas for cooperation based on the different needs of these countries. The paradox is that while you cooperate with one country on one issue, you can be in a competition with it in another sector.

Take France as an example. China and France have stepped up strategic cooperation but are in conflict about electric vehicles.

The EU has also considered adjusting weightings in its triple positioning on China – as a partner for cooperation, an economic competitor and a systemic rival.

It used to put equal weightings on each of the three, while the reality is that in an ever-changing international environment, countries will inevitably face more competition and confrontation rather than cooperation.

For example on climate change, cooperation must outweigh competition at the macro level, but there has to be competition in the industrial sectors, such as we are facing now in the electric vehicle market.

We should also say no to the simplified notion that the China-European relationship is subordinate to Sino-American ties. The European Union is playing a vital role in the new bloc confrontation.

We need to brace for the notion of “endogenous momentum”, which means to discover how much benefit economic interaction and trade will bring to both sides, and to what extent these benefits are irreplaceable.

Same with the security issue, especially to find shared responsibilities on Ukraine, the Middle East or some other regional conflicts. It means we can find common ground on what both sides want to avoid, such as opposition to the use of nuclear weapons.

There is a negative perception of China in Europe. It is a belief that Russia is in decline and is a short-term threat, but that China represents a long-term comprehensive challenge.

First and foremost, we need to update our mindset. The intense way in which great power rivalry is unfolding has, to a certain extent, caught us off guard.

We also need to enhance our strategic response abilities. It is about how quickly we can form a complete set of strategic thinking and cognition in response to unexpected events, and how we can make sufficient reactions in the short term.

On this aspect, I think there is a lot we can learn from the US. We should look at how the US reacts throughout the development of a big event. For example, how does it incorporate unexpected events into its existing strategic goal system?

For the US, the first issue that arises is whether to prioritise Europe or the Asia-Pacific region. It quickly came up with a response: China is a long-term comprehensive challenge and Russia is a short-term direct threat. This differentiation determines how it allocates its strategic capabilities.

Third, the competition between major powers is ultimately about controlling the situation. What is the real relationship between the US and Russia? Who can control the development of the situation, and who can make the situation go in the direction they hope for? That’s the most important thing we need to observe.

Russia has refrained from mobilising the whole nation or using nuclear weapons. The US has said it won’t send soldiers, even though it has the ability. It’s all about preventing the situation from spiralling out of their control.

If we assume China might face similar issues in the future, such as in the Taiwan Strait, how should it prepare? Some researchers have warned that the US is setting traps or exerting pressure on China to escalate tensions there. And inevitably it is aiming to narrow China’s options on the issue.

How to accurately identify and avoid falling into the strategic traps set by others – and how to adopt a systematic rather than a singular approach to deal with complex challenges, including the Taiwan issue – will be something that China needs to continue to learn and practise in future.

Hope grows for India-China economic ties amid Trump’s tariff threats

https://www.scmp.com/week-asia/economics/article/3287770/hope-grows-india-china-economic-ties-amid-trumps-tariff-threats?utm_source=rss_feed

For years, the frosty aftermath of a flare-up at their disputed border defined relations between Asia’s two largest economies, but a recent thaw in China-India ties has reignited hopes of renewed economic cooperation – just as Donald Trump’s return to the White House threatens to upend global trade.

With the US president-elect vowing to impose tariffs of at least 60 per cent on imports from China and 20 per cent on all other nations, few are expected to escape his “America first” protectionism unscathed.

India is no exception. On the campaign trail, Trump labelled the South Asian nation “a very big abuser” of trade relations with the US, promising “reciprocal tariffs” against its heavily protected markets.

This makes the easing of border tensions with China “very well timed before the Trump presidency kicks in”, according to supply chain specialist Nidhi Gupta.

Last year, China edged out the United States as India’s top trade partner, but economic ties have been hamstrung since a deadly 2020 border clash that resulted in casualties on both sides. Direct flights have yet to resume post-pandemic, and the fallout from the incident brought intensified scrutiny of Chinese visa applications and investments in India.

A glimmer of hope for future ties was visible on the sidelines of last week’s G20 summit in Brazil, however. Indian foreign minister S. Jaishankar hinted at talk of “next steps” following a meeting with his Chinese counterpart Wang Yi, referencing in a post on X “progress in the recent disengagement” at the border.

“The relationship between India and China will continue to remain cautious,” said Gupta, the Singapore-based CEO of supply chain analytics company Portcast. “But I think that it [the border thaw] allows economic cooperation.”

Despite two-way trade hitting US$118.4 billion last year, US$101.75 billion of that was in the form of Chinese exports to India, leaving a gaping trade deficit of over US$85 billion. Chinese companies such as Oppo and Vivo have also captured a sizeable chunk of India’s mobile phone market.

At the same time, some Indian firms have made inroads into China in areas such as IT, pharmaceutical and auto parts – and both countries’ companies are increasingly finding common cause with joint ventures like the one between Tata Group’s Tata AutoComp and China’s Gotion High Tech for a battery energy storage plant in Pune, India’s Maharashtra state.

However, restrictions on people-to-people exchanges have hampered deeper cooperation, and the Chinese investments desired by India’s electronics industry remain largely absent.

Meanwhile, India has positioned itself as a strategic Indo-Pacific ally to the West in recent years, and Prime Minister Narendra Modi’s personal rapport with Trump has led some to speculate that any impending US trade blows may be less severe.

But “if the world struggles as a result of strong protectionism in the US, India will suffer with the rest of the world,” said Naushad Forbes, a former president of the Confederation of Indian Industry.

During his first term, Trump raised the issue of India’s high import tariffs, labelling it and Vietnam as among the worst-offenders – after China – in terms of trade imbalances with the US.

India enjoys a trade surplus of around US$28.3 billion with the US, levying import duties of between 50-75 per cent on American motorcycles such as Harley-Davidsons, and up to 150 per cent on US whiskies.

“The incoming Trump administration … would likely push these two countries to lower tariffs or negotiate for military bases to counter China,” said Soh Keng Lin, senior business lecturer at Monash University Malaysia, referring to both India and Vietnam.

Aware of his country’s high billing on the Trump White House’s trade hit list, Vietnam’s new president, Luong Cuong, rebuked blanket protectionism during the recent Apec summit in Peru.

“Imposing new trade and investment standards without scientific rationale or objective assessment, while overlooking the unique development levels and circumstances of each country, unfairly deprives millions of job opportunities, stifles innovation and hampers business growth,” he said, imploring nations to adhere to World Trade Organization rules.

With its export-reliant economy, Vietnam has much at stake. The US is its largest export market, meaning heavy tariffs could jeopardise Hanoi’s growth target of 6.5 to 7 per cent next year.

“Countries which could pose economic and technological threats to the US would be its tariff targets,” said Soh, while noting that excessively high tariffs may “alienate some Southeast Asian countries and encourage intra-Asia trade”.

Signs of regional cooperation are already emerging in sectors such as renewable energy, where China has established itself as a world leader.

Trump is expected to reduce the US’ commitment to his predecessor’s landmark Inflation Reduction Act, which funnelled billions of dollars into clean energy.

“This opens up strategic opportunities for cooperation for many countries, including both Australia and India,” said Tim Buckley, director of the Sydney-based Climate Energy Finance think tank.

In October, China’s Trina Solar signed an agreement to co-invest with Australia’s Sundrive Solar in a 660 megawatt project, while Pacific Blue, an Australian company owned by China’s State Power Investment Corporation, has secured preliminary approval for a 300MW expansion of its Haughton Solar Farm project.

In the run up to this year’s presidential election, Trump lauded Modi as a “fantastic leader”, and observers anticipate that the Indian prime minister will leverage this personal connection.

Vivek Mishra, a visiting fellow at the Observer Research Foundation America specialising in US foreign policy, believes Modi will use backchannels to negotiate trade tariffs.

“Broadly, it is Trump who is going to prevail over other team members in trade negotiations,” he said. “For certain sectors, he will quote a number and negotiate. The good thing is Trump can be brought down because he prefers a deal to confrontation.”

China Builds Test Version of Nuclear Reactor for Navy

https://learningenglish.voanews.com/a/china-builds-test-version-of-nuclear-reactor-for-navy/7863772.html

China has built a land-based test version of a nuclear reactor for a large warship. The development is the clearest sign yet that Beijing is moving toward producing the country’s first nuclear-powered aircraft carrier. This information comes from a new study of satellite imagery and Chinese government documents provided to the Associated Press.

Why is this development important?

There has long been talk that China is planning to build a nuclear-powered aircraft carrier. But the recent research by the Middlebury Institute of International Studies in California is the first to confirm the country is working on a nuclear-powered movement system for a carrier-sized surface warship.

China’s navy is already the world’s largest in terms of numbers.

China's navy has also been developing quickly. Adding nuclear-powered carriers to its fleet would be a major step in realizing its hopes for a force capable of operating around the globe.

Nuclear carriers take longer to build than conventional carriers.

But once nuclear carriers are in operation, they are able to stay at sea for much longer because they do not need to refuel. In addition, there is more room on board for fuel and weapons for aircraft. Nuclear carriers are also able to produce more power to run advanced systems.

Right now, only the United States and France have nuclear-powered carriers. The U.S. has 11 in total, which permits it to keep multiple strike groups deployed around the world at all times, including in the Indo-Pacific area.

But the Pentagon is increasingly concerned about China’s modernization of its fleet, including the design and building of new carriers.

China currently has three carriers, including the new Type 003 Fujian, which was the first both designed and built by China. Officials have said work is already underway on a fourth ship.

But the government has not announced whether that ship will be nuclear or conventionally powered.

How did the researchers arrive at their conclusion?

Middlebury researchers were at first investigating a mountain site outside the city of Leshan in the southwest Chinese province of Sichuan. They had suspicions that China was building a reactor to produce radioactive materials such as plutonium or tritium for weapons. Instead, the researchers said they determined that China was building a test version of a reactor for a large warship.

A number of sources, including satellite images, project tenders, employee files, and environmental impact studies, led researchers to their conclusion.

The reactor is housed in a new structure built at the site known as Base 909, which is under the control of the Nuclear Power Institute of China.

Documents show that China’s 701 Institute, which is responsible for aircraft carrier development, got reactor equipment meant “for installation on a large surface warship.”

The project’s “national defense designation” also helped lead to the conclusion the sizeable reactor is a test version for a next-generation aircraft carrier.

What does China say?

Chinese President Xi Jinping has tasked defense officials with building a “first-class” navy and becoming a naval power as part of his plan for the country.

China’s most recent white paper on national defense, dated 2019, said the Chinese navy was changing due to strategic requirements. The goal was to speed up “the transition of its tasks from defense on the near seas to protection missions on the far seas.”

I’m Mario Ritter, Jr.

 

David Rising and Didi Tang reported on this story for the Associated Press. John Russell adapted it for VOA Learning English.

________________________________________________

Words in This Story

conventional – adj. of traditional design

advanced – adj. greatly developed beyond an early stage

tender – n. an invitation to present an offer or bid (for a project)

install – v. to set up for use or service

transition – n. a change or shift from one state or place to another

---