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• China and Pakistan talk security as they target terrorism against belt and road projects
• Trump’s tariff obsession is no match for China’s growth model
• China and Russia agree to deepen cooperation on Arctic shipping route
• Great wall of Taklamakan: China surrounds its largest desert with giant green belt
• Chinese navy to make regular visits to Hong Kong, in move praised by analysts
• Top Chinese PLA general probed, Shanghai edges New York: SCMP daily catch-up
• Mexico scrambles to reassure Chinese investors amid Trump tariff threats
• China pulls ahead in hi-tech race with graphite purity ‘close to theoretical limit’
• China teacher’s affair with student exposed when chat messages projected on class big screen
• South China Sea: US alliances mar peace and stability, Beijing’s envoy tells Asean
• Chinese retailer Miniso’s founder slams ByteDance-owned Douyin for exorbitant fees
• China expands consumer subsidies, but can it ‘save the day’ for economic growth in 2024?
• China’s tariff troubles pale beside Germany’s economic woes
• AI Musk as Ming official, China singer Zhang Mi’s cancer battle: 5 trending stories
• Police officer in China faces nationwide outrage for beating child accused of bullying
• High-ranking Chinese military official under probe for ‘serious rule violations’
• Chinese golden monkeys to head to France on 10-year goodwill conservation mission
• Chinese diplomat’s endorsement sparks outrage in Japan over foreign interference in elections
• China’s EV boom threatens to push petrol demand off a cliff
• Chinese EVs are poised to push out to global markets, using Hong Kong as a stepping stone
• Chinese security firms in Myanmar risk escalating civil war and diplomatic tensions
• Chinese analyst forecasts more troubles at sea after US-Philippine task force revealed
• China needs US$1.4 trillion to boost domestic consumption amid impending ‘trade war 2.0’
• China is still smarting from Trump’s last tariff blitz. Is it ready for round 2?

China and Pakistan talk security as they target terrorism against belt and road projects

https://www.scmp.com/news/china/military/article/3288560/china-and-pakistan-talk-security-they-target-terrorism-against-belt-and-road-projects?utm_source=rss_feed

China’s top military official held security talks with his Pakistani counterpart on Wednesday amid joint counterterrorism drills in the wake of several attacks targeting Chinese interests and citizens in the South Asian country.

Zhang Youxia, vice-chairman of the Central Military Commission (CMC), met Pakistani Chief of Army Staff Syed Asim Munir during a visit to Pakistan, where he is leading a high-level delegation. Zhang vowed to strengthen ties as the two countries held their first joint anti-terrorism drills in five years.

Their talks focused on “regional security dynamics, measures for regional stability, and enhancing bilateral defence cooperation”, according to Pakistan’s military.

The two countries kicked off the Warrior-8 counterterrorism exercise last week in Pakistan. The drills came after a string of deadly attacks targeting Chinese citizens and interests over the past year, which have deepened concerns about regional security and overshadowed economic cooperation.

Four terrorists were killed last week in three separate incidents in Balochistan province, home to major projects under China’s Belt and Road Initiative, Pakistan Armed Forces said.

On November 19, when China unveiled the plan for the joint exercises, Islamabad announced a new military offensive against separatist insurgents in Balochistan.

China sent more than 300 troops from the People’s Liberation Army (PLA) Western Theatre Command to take part in the joint exercise. The drills, held from late November to mid-December, will focus on clean-up and strike operations.

China’s defence ministry said the exercises were aimed at “testing and enhancing joint counterterrorism capabilities” and “consolidating and deepening pragmatic exchanges and cooperation” between the two militaries.

It added that the drills involved “multilevel, multi-speciality integrated training” and simulating real combat scenarios.

Chinese military analyst Song Zhongping said joint counterterrorism exercises could deter terrorist groups and improve bilateral political and economic ties.

“China-Pakistan economic cooperation requires a strong security guarantee, as the security situation in Pakistan has been relatively complicated in recent years,” he said.

Song noted that the China-Pakistan Economic Corridor – a flagship project under Beijing’s belt and road plan to grow global trade – had been particularly vulnerable to attacks and interference by local terror groups.

A suicide bombing outside Jinnah International Airport in Karachi killed two Chinese citizens and wounded another in early October. A separatist group, the Balochistan Liberation Army, has claimed responsibility for the attack.

Following the attack, China sent a task force to Pakistan and urged authorities to step up security measures and ensure the safety of Chinese citizens working on projects in the country.

The joint drill is the eighth in the Warrior series of exercises between the Chinese and Pakistani militaries and the first since 2019.

Song noted the PLA had brought more unmanned devices to recent joint exercises. He said this was a way for China to showcase its military advancements while testing the equipment in different environments.

He added that the Ukraine war and other conflicts showed that unmanned equipment was crucial to counterterrorism operations and full-fledged military conflicts, and the PLA wanted to be a leader in this area.

On Tuesday, China concluded joint army training with Singapore focused on urban counterterrorism operations. The drills, held in central China, featured window-breaking drones, wall-climbing robots, explosive ordnance disposal robots, and unmanned reconnaissance and strike vehicles, according to the PLA’s official news portal.

Drones also featured heavily in joint exercises between China and Laos in July, according to state-owned newspaper Global Times. Those drills included training on drone countermeasures.

“China has a large amount of unmanned equipment already,” Song said. “It is necessary for the PLA to test it comprehensively in combat-like environments in these joint drills so we can improve it,” Song said.

Hong Kong-based military commentator Liang Guoliang said that unlike the US, which had taken a “high-end and expensive path” in its drone strategy, China “strives to develop both high-end and value-for-money drones”.

“The PLA has numerous drones and robot fighters with varying performance and quality. This will not only help the PLA to reduce casualties, but also greatly improve the combat effectiveness of Chinese soldiers,” Liang said. “One soldier equipped with various unmanned equipment can take on many more enemies.”

“By showcasing the latest unmanned weapons, China can help its neighbours to improve their understanding of the latest military tech and gain a better footing.”

Trump’s tariff obsession is no match for China’s growth model

https://www.scmp.com/opinion/china-opinion/article/3288327/trumps-tariff-obsession-no-match-chinas-growth-model?utm_source=rss_feed

US president-elect Donald Trump’s proposal for new tariffs on Canada, Mexico and China reveals striking differences in policy solutions employed by the world’s two largest economies. Trump’s tariffs starkly contrast with China’s plan to drive sustainable growth by boosting domestic consumption.

The results of Trump’s first-term tariffs reveal the pitfalls of protectionism while China’s pivot towards internal demand shows a forward-thinking approach to resilience and prosperity. These divergent strategies underline why Trump’s tariff proposal is ill-suited to solving America’s economic problems. If enacted, the US risks ceding global economic leadership to a more adaptive China.

During Trump’s first presidency, tariffs were a cornerstone of his trade policy. Levies on steel, aluminium and a vast array of Chinese goods were intended to reduce trade deficits, protect US jobs and revive manufacturing. Yet, the reality fell far short of these promises. Tariffs operate as taxes on imports. Businesses typically pass the costs onto consumers.

For American families, this meant higher prices on electronics, furniture and clothing. According to the Peterson Institute for International Economics, Trump’s latest tariff proposals would cost the typical American household over US$2,600 a year.

For businesses, the consequences were also stark. Many US manufacturers rely on imported raw materials and components. Tariffs raised production costs, making US goods less competitive both domestically and globally. Industries such as automotive manufacturing and construction faced steep price hikes for inputs like steel and aluminium, ultimately causing lay-offs amid negligible gains in job creation.

Retaliatory tariffs imposed by trade partners like China further compounded the damage. For instance, Beijing’s tariffs on US farm goods decimated demand for key exports such as soybeans and pork, forcing the US government to spend billions of dollars in subsidies to bail out struggling farmers.

Despite these economic disruptions, Trump’s tariffs failed to reduce the trade deficit, which actually grew during his presidency, peaking at around US$419 billion with China in 2018. The tariffs disrupted global supply chains without addressing structural issues such as automation, which has had a far greater impact on manufacturing jobs.

Additionally, the tariffs contributed to inflation by raising the cost of imported goods and domestic substitutes. In today’s economy, where inflation remains a pressing concern, new tariffs on Canada, Mexico and China would exacerbate price increases, further straining household budgets and business costs.

In contrast, China has chosen a different path by focusing on strengthening domestic consumption as a driver of economic growth. Recognising that its reliance on exports and investment-led growth is unsustainable, Beijing has pivoted to a consumption-driven model to ensure long-term stability and resilience. This approach reflects China’s desire to reduce its vulnerability to external shocks, particularly amid ongoing trade tensions with the US.

China’s pivot is fuelled by its growing middle class, estimated to be over 400 million strong. Rising incomes, increasing urbanisation and evolving consumer preferences are transforming China into a consumption powerhouse.

To capitalise on this trend, the government has rolled out policies such as tax cuts and subsidies to encourage people to spend on items like electric vehicles, energy-efficient appliances and other consumer goods.

China also says it is expanding its social safety net – including its healthcare and pension programmes – to reduce the need for savings and hopefully encourage domestic consumption. Meanwhile, policies to improve rural incomes and infrastructure are helping to bridge the gap between urban and rural consumers, ensuring more equitable growth.

This focus on domestic consumption stands in stark contrast to Trump’s renewed push for tariffs. While protectionist policies raise costs and disrupt trade, China’s approach fosters internal economic resilience and positions the country as a leader in sustainable growth.

The implications of these contrasting strategies extend beyond their respective borders. In particular, China’s focus on domestic consumption has far-reaching consequences for the global economy. As it reduces its dependence on exports, global trade dynamics are shifting.

For multinational companies, China’s rising middle class represents a lucrative market for high-quality goods and services, from luxury brands to advanced technologies. Meanwhile, China’s emphasis on green consumption bolsters its leadership in sustainability, setting global standards for environmentally responsible development.

For the US, Trump’s tariff-focused approach is likely to result in missed opportunities. Instead of resorting to protectionism, which raises costs for consumers and businesses, the US should adopt policies that strengthen its economy’s domestic resilience and global competitiveness.

Investing in infrastructure, modernising supply chains and supporting research in emerging sectors such as green technology and advanced manufacturing would drive sustainable growth without the economic distortions caused by tariffs.

Expanding workforce training programmes in high-demand industries could help address skills gaps and help people find high-paying jobs. Moreover, strengthening trade relationships through fair agreements, rather than imposing tariffs, could open new markets for US goods and reduce trade imbalances.

Trump’s proposed tariffs on Canada, Mexico and China reflect a protectionist mindset that has proven to be ineffective. By raising costs for consumers, disrupting supply chains and exacerbating inflation, these measures will harm the very economy they aim to protect. China’s focus on enhancing domestic consumption, meanwhile, offers a model for long-term growth and stability.

The US should take note of China’s strategy and consider policies that empower consumers, promote innovation and strengthen global collaboration. Tariffs may provide short-term political gains but their long-term economic consequences are hindered growth and strained international relationships. The US will become much less competitive in an interconnected world.

By adopting a forward-looking approach that prioritises innovation and resilience, the US can reclaim its economic leadership in the 21st century.

China and Russia agree to deepen cooperation on Arctic shipping route

https://www.scmp.com/economy/global-economy/article/3288537/china-and-russia-agree-deepen-cooperation-arctic-shipping-route?utm_source=rss_feed

China and Russia are stepping up efforts to develop Arctic shipping routes amid growing geopolitical tensions between both countries and the West.

The two nations had reached consensus on the mechanism and goals of a subcommittee on cooperation on the Northern Sea Route – which spans 5,600km (3,480 miles) from the Barents Sea near Scandinavia to the Bering Strait near Alaska – China’s Transport Ministry said on Tuesday.

The subcommittee met for the first time on Monday, in Saint Petersburg, with Transport Minister Liu Wei heading the Chinese delegation and Alexey Likhachev, the chief of Russia’s state-owned atomic energy conglomerate Rosatom, leading the Russian one.

“The Chinese side is willing to work with Russia to fully leverage the role of the mechanism, enhance the shipping capacity of the Arctic area, ensure sailing safety of the region, and promote new progress in polar vessel construction,” said Liu, who was appointed transport minister this month.

Likhachev said Rosatom, which Moscow has tasked with developing the Northern Sea Route, looked forward to deepening cooperation with the Chinese side in areas including Arctic shipping, sailing safety and vessel technology.

The subcommittee, established in August, is a dialogue mechanism linked to the annual meetings between the heads of the Chinese and Russian governments.

As well as focusing on collaboration on sailing development, shipping security, and vessel technology and construction in the Arctic area, it also aims to promote the role of Arctic passages in international sailing, enhance the service capacities of icebreakers, and encourage Chinese and Russian firms to work together to operate shipping businesses in the region.

Wang Yiwei, director of the Institute of International Affairs at Beijing’s Renmin University, said the exploration of Arctic passages would be of strategic importance for China as a major exporter to Europe.

“Marine logistics from China to Europe has traditionally been reliant on the Suez Canal,” he said. “Now such routes are affected by hostilities in the Middle East, and the Russia-Ukraine conflict has had an impact on railway logistics. Therefore, it would be strategically important to connect China and Europe through Arctic sea routes.”

But Wang added that the Arctic’s potential was tied up with geopolitical tensions, and it would be challenging for China and Russia to coordinate with European countries in conducting scientific research and formulating regional rules.

Arctic issues have been frequently discussed at the bilateral heads of government meetings since 2018, when Beijing published a white paper on its Arctic policies, aiming to integrate the Arctic waterways into its Belt and Road Initiative as a “Polar Silk Road”.

China, which has positioned itself as a “near-Arctic state”, has been eyeing the Arctic Circle’s shipping potential as climate change melts away the ice that previously blocked passages providing short cuts from East Asia to western Europe.

The shipping route from Lianyungang in the eastern Chinese province of Jiangsu to Rotterdam in the Netherlands is traditionally around 20,000km. But it could be shortened by 25 per cent and the sailing time could be reduced by 10 to 15 days via the Arctic region, according to a study by Pei Yunying, a manager of state-owned PetroChina International, that was published this year in the Journal of Eurasian Economy.

Wang said that as the country with the largest sovereignty claim in the Arctic, Russia was previously not interested in development initiatives from other countries, including China. But sanctions imposed following its invasion of Ukraine had changed its outlook.

“Now it is sanctioned by the West, while China has made progress in different aspects including scientific research, shipbuilding and logistics … Russia can now leverage investments and technology from China in the Arctic area to break through blockages and bottlenecks from the West,” he said.

All the Arctic countries except Russia – the United States, Canada, Denmark, Iceland, Finland, Sweden and Norway – are members of the Nato transatlantic security alliance.

In addition to the Northern Sea Route along Russia’s northern coastline, the Chinese government is also keeping an eye on the future viability of two other “Arctic passages”: the Northwest Passage running mostly through Canadian waters; and a potential transpolar route crossing the North Pole.

Although the North Pole is only expected to be ice-free and navigable for a few months a year by the 2050s, China has been paying a great deal of attention to the strategic implications of the transpolar route, according to an earlier Post report.

Foreign vessels, including Chinese ones, have to pay duties to Russia for sailing through the Northern Sea Route. But ships of all countries could expect to travel freely on the shorter transpolar route, which would lie outside the territorial waters of any state.

Great wall of Taklamakan: China surrounds its largest desert with giant green belt

https://www.scmp.com/news/china/science/article/3288549/great-wall-taklamakan-china-surrounds-its-largest-desert-giant-green-belt?utm_source=rss_feed

China’s largest desert, and the world’s second-largest sand-shifting desert – is now surrounded by a green belt of various trees and shrubs, as well as a solar-based sand blocking technology.

The encirclement of the Taklamakan Desert in China’s northwestern Xinjiang Uygur autonomous region – an area about the size of Germany – is meant to prevent sandstorms and protect local infrastructure, as well as boost regional economic opportunities.

The green belt – which stretches 3,050km (1,900 miles) – was completed on Thursday after the final batch of several types of vegetation was planted in Yutian county at the desert’s southern edge, according to state media.

Sand-shifting deserts like the Taklamakan are dominated by wind-driven sand dunes and frequent sandstorms, which can affect weather, agriculture and human health.

About 85 per cent of the 337,600 sq km (130,350 square mile) desert is covered by shifting sand dunes, earning the Taklamakan the label “sea of death”.

“The wind and sand action on the edge of the desert is extremely strong, and the sand dunes expand outward,” Lei Qiang, a researcher at the Chinese Academy of Sciences Xinjiang Institute of Ecology and Geography, told state-owned news site The Paper.

Lei said the effort to “lock” the edge of the desert using green belts and solar-based sand control measures such as solar panels, would protect the ecology while safeguarding railways and roads.

It took 40 years to construct the first 2,761km of the green belt. In November last year, efforts were begun to close the remaining 285km around the desert, according to state broadcaster CCTV.

An army of 600,000 people worked to plant species such as desert poplar, red willow and saxaul trees to complete the final stretch of the belt.

Lei said some of the species, such as the medicinal plant desert hyacinth, could produce economic spin-offs.

Green belts are being deployed around the world to combat desertification and desert expansion, such as the Great Green Wall initiative, which stretches 8,000km across Africa’s Sahara Desert.

In 2022, a new rail link – the Hotan-Ruoqiang railway – went into service to help integrate the desert region with the rest of the country.

The 2,712km loop is the world’s first circumnavigation of a desert and now connects various cities around the Taklamakan, transporting minerals and specialities like walnuts and red dates to the rest of China.

In October, the China Three Gorges Corporation announced plans to build a new energy project in the Taklamakan to supply 8.5 gigawatts of solar and 4GW of wind power, according to another report by The Paper. Construction is expected to be completed within four years and complement energy storage and coal-fired power projects.

Xinjiang has abundant sources of clean energy including solar and wind, and in the first half of this year it ranked first in China for installed capacity of new energy, according to the State Council.

Now that the Taklamakan Desert green belt is completed, Lei said work would continue to improve its efficiency and quality.

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Chinese navy to make regular visits to Hong Kong, in move praised by analysts

https://www.scmp.com/news/hong-kong/politics/article/3288569/chinese-navy-make-regular-visits-hong-kong-move-praised-analysts?utm_source=rss_feed

The Chinese navy will start making regular visits to Hong Kong, in a move analysts have said will help boost national identity and pride.

Senior Colonel Wu Qian, from the Ministry of National Defence, made the announcement on Thursday after two of the country’s vessels arrived in the city last week for a five-day visit.

“In recent years, the navy has held many open days in coastal cities both at home and abroad, displaying its confidence and openness,” Wu said.

“In the future, the People’s Liberation Army Navy will make visits to Hong Kong on a regular basis.”

The amphibious assault ship Hainan and the guided-missile destroyer Changsha held a series of activities during their visit last week, including deck receptions, open days, national defence lectures and cultural exchanges.

“Between November 22 and 24, Hainan and Changsha were respectively open to the public, and were visited by over 15,000 residents, students and officials from Hong Kong and Macau with an enthusiastic response,” Wu said.

About 700 students also attended seminars to understand the achievements of the Chinese navy.

Lau Siu-kai, a consultant with the Chinese Association of Hong Kong and Macau Studies, a semi-official think tank, said the visits could help improve Hongkongers’ sense of national identification and pride.

“Another significance is that because of the tension in both the South China Sea and the Taiwan Strait, the visits of large warships to Hong Kong could have a stabilising effect politically and that China places emphasis on Hong Kong’s defence,” Lau said.

Their presence could show off the country’s military might to residents, especially the younger generation, as the largest navy in the world in terms of fleet size, he said.

Lawmaker Starry Lee Wai-king, the city’s sole representative to the nation’s top legislative body, said the latest visit was “exciting” and showed Beijing’s care for Hong Kong.

“The visits could help Hong Kong residents understand the latest development in national defence, which is an important topic in patriotic education,” Lee said. “I believe that the regular visits can greatly enhance Hong Kong’s knowledge in national defence and affection for the country.”

Hainan’s arrival marks the first Hong Kong port call by such a vessel. Commissioned on April 23, 2021, Hainan is the lead ship of the Type 075 landing helicopter dock class, known to be the largest amphibious warship of the PLA Navy and which can carry up to 30 aircraft.

It can be used as a mother ship for amphibious warfare and can transport soldiers and vehicles for landing operations.

Changsha is one of the navy’s Type 052D guided missile destroyers.

It was commissioned on August 12, 2015, and it is armed with a vertical launching system that can fire a variety of air defence, land attack, anti-ship and anti-submarine missiles with the help of active electronically scanned array radar.

Hong Kong last welcomed a US Navy ship in 2019.

Top Chinese PLA general probed, Shanghai edges New York: SCMP daily catch-up

https://www.scmp.com/news/china/article/3288536/top-chinese-pla-general-under-investigation-shanghai-edges-new-york-scmp-daily-catch?utm_source=rss_feed

Catch up on some of SCMP’s biggest China and Economy stories of the day. If you would like to see more of our reporting, please consider .

With more tariffs certain once Donald Trump returns to the White House, China must ready its response – this time knowing what to expect.

Miao Hua, one of the top generals at China’s mighty Central Military Commission (CMC), has been placed under investigation for suspected serious violation of rules, the defence ministry said.

For the first time, Shanghai has powered past New York to claim the second spot among global science cities, propelled by strengths in biopharmaceutical research, advanced materials and artificial intelligence, according to this year’s Nature Index Science Cities supplement.

A Chinese analyst of the South China Sea has warned of more trouble at sea after revelations about the involvement of a US special task force at a disputed shoal.

To fund a futuristic megacity that has been one of President Xi Jinping’s pet projects for the better part of a decade, China has accelerated the issuance of ultra-long special bonds – intent on ensuring that the sprawling city is “basically completed” by 2035.

China’s second-largest provincial economy and its biggest city have expanded consumer subsidy schemes to boost household spending despite the risk of hollowing out demand in 2025 but foreshadowing more stimulus next year.

A trio of golden snub-nosed monkeys will make their way from China to France as part of an international cooperation programme to mark 60 years of diplomatic relations.

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Mexico scrambles to reassure Chinese investors amid Trump tariff threats

https://www.scmp.com/economy/global-economy/article/3288524/mexico-scrambles-reassure-chinese-investors-amid-trump-tariff-threats?utm_source=rss_feed

Mexican envoys are rushing to reassure Chinese companies that they will remain welcome to invest in Mexico, as the country faces growing pressure to clamp down on Chinese-funded factories.

Chinese businesses in Mexico should remain calm and “wait” to see what happens after US president-elect Donald Trump takes office, said Santiago Toledo, a commercial counsellor at the Mexican embassy in China, on Wednesday.

While acknowledging the future of North America’s trading relations remains uncertain, Toledo stressed that any Chinese company setting up a factory in Mexico is treated as a local manufacturer under existing laws.

“It doesn’t matter if it’s from Japan, from Germany, from China, it becomes a Mexican company, and it becomes part of the regional supply chain,” said Toledo, who was speaking on the sidelines of China International Supply Chain Expo in Beijing.

Chinese exporters have poured investment into Mexico over the past few years, seeking a cheaper route into the US market amid the US-China trade war.

The Latin American nation is a popular choice thanks to its proximity to the US and its participation in the United States-Mexico-Canada Agreement (USMCA) – which guarantees as long as a certain percentage of content is made locally in North America, products can enter the US market free of taxes.

But Chinese investment into Mexico has shown signs of slowing down in recent months, with Trump repeatedly threatening to stop Chinese-funded factories in Mexico sending cars to the US tariff-free once he takes office.

“We don’t know what’s going to happen in the future,” Toledo said. “But right now investments are protected.”

Last week, Mexican President Claudia Sheinbaum added to the uncertainty facing Chinese businesses by announcing her government had a plan to reduce the amount of Chinese-imported parts in products for export to the US and Canada, by substituting them for components made by North American companies.

But Toledo stressed that Chinese companies could simply set up plants to produce those parts in Mexico, as the parts would then be classified as locally made.

“When they’re in Mexico, they’re not any more Chinese,” he said. “They are Mexican companies.”

What Mexico wants is to build a North American supply chain in which the origin of the investment does not matter, Toledo said.

But he also admitted it was impossible to predict how trading relations would develop over the coming years.

“We don’t know what’s going to happen in the future,” Toledo said. “But right now investments are protected.”

Chinese-funded factories are likely to become a major issue in trade negotiations between the US, Canada and Mexico, as the three countries gear up to start reviewing the USMCA next year. A deal to extend the agreement must be confirmed by 2026.

Trump announced on Monday that he would levy tariffs of 25 per cent on all Canadian and Mexican imports, along with additional 10 per cent tariffs on all Chinese goods. Sheinbaum said on Wednesday that Mexico would impose retaliatory tariffs in response.

“What I will say is, let’s wait,” Toledo said. “Mexico is an open country for investment. We rule ourselves. We have to negotiate. We have to rebuild the free trade agreement. But right now nothing has happened yet.”

Mexico remains heavily dependent on Chinese trade and investment, according to Victor Cadena, executive vice-president of the Mexican Chamber of Commerce in China.

If Mexico tried to exclude Chinese investment, it would be impossible to keep the country’s supply chain functioning smoothly, Cadena said on Wednesday.

“Mexico doesn’t have the resources or the expertise or even the technology to do it,” said Cadena, who was also speaking at the supply chain expo in Beijing. “It is just not possible.”

Cadena predicted that China and Mexico would continue to develop closer ties, with more Chinese companies setting up operations in Mexico and more Mexican firms coming to China.

“Just two weeks ago, we received a delegation from Shandong with around 30 people,” Cadena said. “We are expecting more delegations [to visit Mexico] in January and February, regardless of what happens in the US.”

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China pulls ahead in hi-tech race with graphite purity ‘close to theoretical limit’

https://www.scmp.com/news/china/science/article/3288493/china-pulls-ahead-hi-tech-race-graphite-purity-close-theoretical-limit?utm_source=rss_feed

A Chinese state-owned company has reported a breakthrough in the mass production of almost 100 per cent pure graphite.

The feat is expected to consolidate China’s global leadership in producing the strategic material seen as a vital weapon in the country’s hi-tech war with the West.

Science and Technology Daily reported on Tuesday that China Electronics Technology Group Corporation (CETC) had developed its own horizontal purification equipment for low-cost, high-purity graphite production on an industrial scale.

High-purity graphite, with carbon content exceeding 99.99 per cent, is known for its excellent self-lubrication, electrical conductivity, corrosion resistance, high-temperature stability and outstanding chemical stability.

It is widely used in sectors such as nuclear energy, semiconductors and aerospace.

“Our newly developed equipment has successfully refined graphite powder from purity of 99.93 per cent to over 99.99995 per cent,” CETC general manager Xie Yongqiang said in the report.

“This purity is close to the theoretical limit, with impurities reduced to virtually negligible levels.”

This would make their product the purest graphite available in large quantities commercially.

China is the world’s largest producer and exporter of graphite and has used the material as a geopolitical trump card.

High-purity graphite material has been on China’s export control list since December 1, under a declaration from Beijing in October last year.

The move is seen as a countermeasure against the United States and European Union, which have imposed a series of trade restrictions on China – particularly in the electric vehicle (EV) and semiconductor sectors – citing alleged unfair practices. Graphite is an essential material for the production of EV batteries.

“China holds the largest and highest-quality reserves of natural flake graphite globally. Much like rare earths, graphite is precious and non-renewable; it cannot be sold at low prices only after being roughly processed,” Sun Qing, honorary chairman of the China Carbon Industry Association, told state-owned Global Times in an interview published in October last year.

High-purity, high-strength and high-density artificial graphite materials had significant military and aerospace applications, Sun said, adding that the export controls were possibly aimed at preventing the spread of sensitive technologies related to nuclear applications, fulfilling China’s international non-proliferation obligations.

Apart from significantly improving purity, CETC’s new process also reduces the cost of high-purity graphite to just 40 per cent of that produced by traditional methods, according to the report. “This process has already been scaled up for mass production, with stable results and strong customer approval,” Xie said.

In September, China Minmetals Corporation – another state-owned enterprise – also achieved 99.99995 per cent graphite purity via what is called a “continuous purification” process.

Its method employs a “cascade” combination of physical-chemical purification, low and high-temperature continuous refining, and ultra-high vacuum techniques to ensure product quality and cost efficiency. However, no details on mass production were provided.

CETC, in China’s central Shanxi province, was set up in 2010 and specialises in high-purity graphite materials for third-generation semiconductors and carbon-based composite materials for photovoltaic applications.

China teacher’s affair with student exposed when chat messages projected on class big screen

https://www.scmp.com/news/people-culture/trending-china/article/3288178/china-teachers-affair-student-exposed-when-chat-messages-projected-class-big-screen?utm_source=rss_feed

A vocational school in northern China has suspended a teacher after her online chat messages, revealing an affair with a male student, were inadvertently projected on a screen in front of the class.

The teacher, surnamed Zhang, is married and has a daughter. She works at a vocational school in Qinyuan county, Shanxi province, as reported by Dawan News.

Earlier this month, her chat history on the social media app WeChat with a teenage student was accidentally displayed to the class.

In the chat, the student, aged between 15 and 18, asked: “Honey, why are you crying?”

Zhang responded: “I helped my child wash her feet and asked her to wash mine too, but she refused. I then asked her father to wash my feet, and he also said no and walked away.

“I was irritated. I told him, ‘The child treats me the way you treat me.’ I am so sad! What kind of man have I married?” said Zhang.

The student, whose identity remains undisclosed, comforted her by saying: “Don’t ask him to do anything for you.”

“Even though you are married, I don’t want to hear that you let him do anything for you. Because I will be jealous,” he continued.

“Most of the time, I don’t express this feeling since I don’t have the bargaining power,” the student confessed.

“I will wash your feet next time when we live together. I will always love you,” he added.

It is believed that their conversation was revealed to the class because Zhang used a computer connected to the class projector without logging off her WeChat account.

The duration of their romantic relationship remains unclear.

The school stated that it is taking the incident very seriously and has initiated an investigation.

Zhang has been suspended from her teaching position, according to a school statement released on November 22.

The news quickly trended on mainland social media, drawing numerous comments.

“I wonder how the student’s parents feel after discovering their child is dating a married teacher,” one netizen remarked.

Another commented: “This reflects the declining moral standards of society.”

Incidents of teacher misconduct often capture the attention of mainland social media.

For example, a 50-year-old teacher at a secondary school in eastern Anhui province was investigated in July for harassing a female student by sending her messages like: “You will remain the eternal love of my life, and I will love you until I disappear from this world.”

South China Sea: US alliances mar peace and stability, Beijing’s envoy tells Asean

https://www.scmp.com/news/china/diplomacy/article/3288522/south-china-sea-us-alliances-mar-peace-and-stability-beijings-envoy-tells-asean?utm_source=rss_feed

China’s top envoy to Southeast Asia took a veiled swipe at US-led alliances in the Asia-Pacific, calling them ideology-based undermining of “peace and stability” in the South China Sea and East Asia regions.

Hou Yanqi, China’s ambassador to the Association of Southeast Asian Nations, referred to “Cold War mentality and geopolitical confrontation between major powers” on Thursday during a speech at the Asean-China Forum in Hong Kong.

“Certain countries [started] the implementation of [the] so-called Indo-Pacific strategy … This should threaten regional peace and stability,” Hou said.

“Some countries also formed exclusive, small circles, like Quad and Aukus, based on ideology,” she said, adding that these alliances had intensified regional confrontation and rivalries.

She said these unnamed countries had tried to introduce the narrative of “Ukraine today, East Asia tomorrow” and create “an Asia-Pacific version of Nato” which, along with other Western strategies, were increasing the risk of regional conflict.

Hou said the South China Sea was “not an issue” between China and Asean nations as the parties had conducted multiple dialogues under adequate mechanisms to reduce the risks.

China and Asean members signed the non-binding Declaration on the Conduct of Parties (DOC) in the South China Sea in 2002, which commits them to freedom of navigation and overflight, undertaking peaceful settlement of disputes and self-restraint in the conduct of activities. Guidelines for implementing it were agreed in 2011.

However, the Code of Conduct in the South China Sea (COC), has long been delayed. Introduced in the 1990s, the code had been expected to establish a guiding framework for preventing or solving open conflicts in the disputed waters.

“We have the working mechanism for the implementation of the DOC, and also the written mechanism for the negotiations of the COC – we don’t need any kind of so-called help from external parties,” Hou told the forum, which was organised by the Centre on Contemporary China and the World at the University of Hong Kong.

Despite both Beijing and Asean expressing optimism that an agreement would be concluded soon – the third reading of the code was held a year ago – many doubt it can be wrapped up amid growing hostility in the waterway.

The South China Sea issue is a major security concern for China and Asean nations. China’s claims to the resource-rich South China Sea are disputed by several Asean members: the Philippines, Vietnam, Malaysia and Brunei.

Concerns over the region have been increasing rapidly as the stakeholders – particularly Beijing, Manila and Hanoi – conduct aggressive moves in the region, such as growing island reclamation, coastguard patrols and confrontations.

Tensions between the United States and China over the waters have also escalated, with the US pivoting to Asia and its closer alliances in the region, including with the Philippines and Japan.

President Joe Biden’s administration has set up defence alliances – including Aukus with Australia and Britain, and the Quad security dialogue with India, Japan and Australia – in addition to stepping up military drills in the region.

Last week, defence chiefs from the US, Japan, the Philippines, South Korea and Australia held talks in Laos on the sidelines of the Asean Defence Ministers’ Meeting-Plus security conference.

In Hong Kong on Thursday, Hou made clear reference to Washington, saying that in a context of widening protectionism and deglobalisation, a “certain country perceives so-called decoupling or de-risking [strategy], builds ‘small yard high fence’ practices”.

She said the behaviours obstructed smooth and resilient digital industrial supply chains as well as cooperation in emerging industries, creating a “really disturbing atmosphere for East Asian cooperation”.

Hou said the competition wnow as between “unity and division”, “cooperation or confrontation”, suggesting that Beijing represented the former path.

Speaking at the forum, Kuik Cheng-chwee, a professor in international relations at the National University of Malaysia, said China and Asean nations should seek more than one means to solve the South China Sea dispute.

“To manage the South China Sea [issues], like other bilateral territorial problems, we need not one tool, but multiple tools,” he said, adding that the parties could actively engage in arbitration or the UN Commission on the Limits of the Continental Shelf, and use more diplomatic and economic measures to expand options for managing the South China Sea issue.

Chinese retailer Miniso’s founder slams ByteDance-owned Douyin for exorbitant fees

https://www.scmp.com/tech/big-tech/article/3288535/chinese-retailer-minisos-founder-slams-bytedance-owned-douyin-exorbitant-fees?utm_source=rss_feed

Douyin, the Chinese version of TikTok with domestic e-commerce operations, has been slammed for charging exorbitant promotion fees amid insufficient sales by the head of Chinese budget retailer Miniso Group, which runs multiple stores on the ByteDance-owned platform.

Miniso founder and chief executive Ye Guofu, 47, levelled his criticism of Douyin via his WeChat post on Wednesday that showed a video from online influencer Johnknow-nothing, who asserted in his recorded post that the ability of merchants to sell goods on the ByteDance platform was “deteriorating”. Miniso’s stores on Douyin sell a variety of lifestyle products such as beauty tools, toys and apparel.

Citing figures from the video, Ye said Douyin in 2023 recorded a gross merchandise volume (GMV) of 2 trillion yuan (US$276 billion), of which 40 per cent was refunded, while total advertising revenue reached 400 billion yuan in the same period.

In response to the social-media posts, a representative from Douyin said: “The figures [cited] are untrue.”

Neither Miniso nor the online influencer immediately responded to a request for comment. The WeChat posts of Ye and the influencer that targeted Douyin were no longer online as of noon on Thursday.

Miniso’s fault-finding post marks the second high-profile bashing of Douyin over the past several days, involving some of the wealthiest individuals on the mainland.

Zhong Shanshan, founder and chairman of China’s largest packaged drinks company Nongfu Spring, last week lashed out at ByteDance founder Zhang Yiming, 41, for “spreading rumours and misinformation” on Douyin that damaged Zhong’s reputation. The 69-year-old Zhong demanded an apology from Zhang over the online attacks.

Zhang was ranked as China’s richest individual, with a net worth of US$49.3 billion as of August 30, according to the latest survey by consultancy Hurun Research Institute.

The country’s second-wealthiest person was Zhong, with a net worth of US$47.9 billion in the same period. Miniso’s Ye was ranked at No 185, with a net worth of US$3.6 billion.

Douyin’s e-commerce business has been widely reported as having a high take rate, a measurement of how much a marketplace earns from facilitating a transaction. In 2023, Douyin’s take rate was 9 per cent, according to a July report by Guosen Securities.

That was higher than those of its competitors in the same period. PDD Holdings’ Pinduoduo had a take rate of 4.6 per cent, JD.com had 4.3 per cent and Alibaba Group Holding’s Taobao and Tmall had 3.8 per cent, according to the report. Alibaba owns the South China Morning Post.

Douyin’s GMV from August 2023 to July this year rose by 46 per cent over the comparable period in past two years, according to Wei Wenwen, president of the Chinese short-video platform’s e-commerce unit.

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China expands consumer subsidies, but can it ‘save the day’ for economic growth in 2024?

https://www.scmp.com/economy/policy/article/3288532/china-expands-consumer-subsidies-can-it-save-day-economic-growth-2024?utm_source=rss_feed

China’s second-largest provincial economy and its biggest city have expanded consumer subsidy schemes to boost household spending despite the risk of hollowing out demand in 2025 but foreshadowing more stimulus next year.

Eastern China’s Jiangsu province on Tuesday announced that it had allocated funds to subsidise trade-ins of mobile phones, tablets, digital cameras, smartwatches and wireless earphones, among other products.

Subsidies for the province of about 85 million people would cover 15 per cent of the purchase price, with discounts of up to 1,500 yuan (US$207) until the end of December, a statement on the provincial website said.

At the end of October, China’s commercial hub of Shanghai also said that it had expanded a trade-in scheme by six eligible products, including coffee machines. The updated scheme would cover 67 product types and 160,000 models.

The city said the change “steps up the enrichment of consumers’ choices”.

Harry Murphy Cruise, an economist at Moody’s Analytics, said Chinese officials would probably move to stimulate consumption again next year because the outlook for its manufacturing and exports would dim under US president-elect Donald Trump.

On Monday, Trump threatened to add an additional 10 per cent import tariff on Chinese goods when he takes office in January.

“This change in mindset bodes well for further support, including expanding national trade-in schemes,” Murphy Cruise said.

The central government rolled out its trade-in schemes for vehicles, appliances and equipment upgrades in March amid hopes of shoring up economic growth this year.

However, a property market crisis, coupled with job and income uncertainties, have cooled consumption in the world’s second-largest economy.

Retail sales, a key gauge of household consumption, grew by only 3.5 per cent in the first 10 months of 2024, compared to 7.2 per cent growth for all of 2023.

Monthly retail sales growth, though, have rebounded from 2 per cent year on year in June to 4.8 per cent last month, with some analysts attributing the mild recovery to the trade-in schemes.

During October’s “golden week” National Day holiday – seen as a bellwether to gauge China’s domestic demand – 2.52 million consumers bought home appliances under the scheme, with 3.745 million items sold for 17.83 billion yuan (US$2.46 billion).

The annual Singles’ Day shopping festival – also known as Double 11 or 11.11 – earlier this month also lifted sales as retailers and producers added to the subsidies.

But the end of subsidies across China in December would close out a “mini consumer boom”, S&P Global Ratings said on Thursday.

It called this year’s sales a “de facto overhang” on revenues for 2025 because the subsidies “pulled forward” about 6 per cent of next year’s demand for home appliances.

Alicia Garcia-Herrero, chief Asia-Pacific economist at the French investment bank Natixis, said local governments were “trying to save the day growth-wise at the end of the year”.

Many local governments, though, are reluctant to provide subsidies because of existing debt burdens.

Only “the richest” local governments can maintain the subsidies, Garcia-Herrero added, with it unclear how much more the central government wanted to spend.

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China’s tariff troubles pale beside Germany’s economic woes

https://www.scmp.com/opinion/world-opinion/article/3288452/chinas-tariff-troubles-pale-beside-germanys-economic-woes?utm_source=rss_feed

The tariff man is back. No sooner did US president-elect Donald Trump nominate a Wall-Street-friendly hedge fund manager as his Treasury secretary, easing investor fears over his protectionist agenda, than he vowed to impose new tariffs of 25 per cent on all imports from Mexico and Canada, and add 10 per cent to goods from China.

Trump, who revels in being unpredictable, has reignited speculation over the seriousness, scope and strategy behind his tariff policies. However, a cursory glance at the size of the trade surpluses the targeted countries have with the US – the three economies have the largest bilateral surpluses with the US along with the euro zone – shows Trump is behaving true to form.

Deeply suspicious of trade, which he views through the narrow and superficial lens of bilateral balances, Trump is going after countries with large surpluses with the US. In the eyes of the president-elect and his advisers, any nation that enjoys a hefty surplus with the US must be stealing well-paid manufacturing jobs from the US, hollowing out the middle class.

China has the largest surplus with the US and has gone from being a net importer of cars, when the US-China trade war began in 2018, to the world’s biggest exporter. Beijing is engaged in a geopolitically fraught and consequential trade dispute with Washington, one that unleashed the current wave of protectionism and led to the fragmentation of the global economy.

While the US has reduced its trade dependence on China since 2018, the European Union (EU) has become more reliant on the country as a supplier of manufactured goods, particularly technologically intensive ones such as batteries and other components critical to electric vehicles (EVs). This increases “the potential for future clashes between EU and US national security policies”, the Peterson Institute for International Economics said in a blog in August.

As China’s economy slowed sharply, Europe’s exporters have had to rely on US demand to pick up the slack. Nowhere is this more apparent than in Germany whose trade surplus with the US alone accounts for 40 per cent of the EU’s total, according to GlobalData TS Lombard.

The heavy exposure of Europe’s largest economy to both China and the US not only increases its vulnerability to trade shocks but is also at the root of many of Germany’s problems, which in many respects are more severe than China’s. They are also more consequential given Germany’s role as the most creditworthy economy in the euro zone, the anchor of the bloc along with France, and a linchpin of the transatlantic alliance.

While a lot of attention has been paid to the downturn in Chinese stocks, the Stoxx Europe 600 Automobiles and Parts Index, a gauge of the performance of European carmakers that is dominated by Germany’s big brands, has also suffered this year.

The nearly 30 per cent fall in the index since early April reflects a confluence of threats: the scale of the disruption caused by China’s fast-growing EV industry, the uncertainty surrounding the policies of a second Trump administration, and the striking unpreparedness of Berlin for the economic and geopolitical shocks facing the country.

Gone are the days when German carmakers could export their way out of trouble. A combination of complacency, a big bet on China that has failed to pay off, the costly transition from combustion engines to electric and the EU’s tariffs on EVs produced in China has exposed major weaknesses in corporate Germany.

According to data from Bloomberg, German carmakers’ share of the Chinese market fell from around 25 per cent in 2019 to about 14 per cent this year. The EV share of the market, by contrast, has almost quadrupled to more than 20 per cent.

But it is not all about cars. Germany has been accused of not doing enough to boost defence spending in response to Russia’s invasion of Ukraine and has been a laggard in meeting Nato’s military expenditure target, equivalent to 2 per cent of economic output.

Not only is this one of the reasons Germany is in the crosshairs of Trump – whose antagonism towards the transatlantic security alliance stems from his view that Europeans are freeriding on America’s security guarantee – it puts the spotlight on the causes of the country’s underspending when the US commitment to Nato is in doubt.

Unlike China, which bit the bullet and launched a fiscal stimulus package, Germany remains wedded to austerity, even though its stagnant economy is crying out for more spending. At the heart of the country’s problems is a constitutionally enshrined “debt brake” that prohibits the federal government from running anything other than a tiny fiscal deficit.

For a country that faces huge problems – an energy crisis, botched efforts to reduce greenhouse gas emissions, a woeful lack of investment in infrastructure and digitisation, and an acute skills shortage – such economic self-harm almost defies belief.

Hopefully, Germany will soon implement reforms. Disagreements over the debt brake precipitated the collapse of German Chancellor Olaf Scholz’s coalition government earlier this month. Even the leader of the more fiscally prudent opposition Christian Democratic Union party said the debt brake could be eased.

Germany has a mountain to climb. It must aggressively reform its economy, stabilise its political system, keep the euro zone intact and prevent Russia from winning the war in Ukraine. It can only hope that Trump does not add to its problems in China by escalating trade tensions. Germany cannot handle more pain.

AI Musk as Ming official, China singer Zhang Mi’s cancer battle: 5 trending stories

https://www.scmp.com/news/people-culture/trending-china/article/3288459/ai-musk-ming-official-china-singer-zhang-mis-cancer-battle-5-trending-stories?utm_source=rss_feed

We have selected five Trending in China stories from the past seven days that resonated with our readers. If you would like to see more of our reporting, please consider .

An AI version of Elon Musk reimagined as a Ming dynasty secret agent in a Chinese video clip has gone viral, highlighting the significance of DOGE efficiency through kung fu.

Eight months after the poignant reunion of a PhD graduate with his long-lost Chinese birth family – following his adoption to the Netherlands three decades ago – he brought his Dutch father to China to visit his birth mother, envisioning a future filled with love and care from both families.

A famous Chinese singer garnered widespread sympathy on mainland social media by announcing the heartbreaking news of her third cancer diagnosis, following her battles with two previous cancers over the past five years.

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.

Some influencers in China have spent US$2,500 to rent a United Nations conference room and US$49,999 to attend Trump’s inauguration, all in an effort to cultivate an “elite persona”.

Police officer in China faces nationwide outrage for beating child accused of bullying

https://www.scmp.com/news/people-culture/trending-china/article/3288272/police-officer-china-faces-nationwide-outrage-beating-child-accused-bullying?utm_source=rss_feed

A police officer in China ignited nationwide outrage after he slapped and kicked a primary school boy for allegedly bullying other children.

Surveillance video footage circulating online shows the officer assaulting the boy and pulling his hair near Hongzhuang Primary School in a county in northwestern China’s Ningxia Hui autonomous region. Another officer stood by and watched the incident unfold.

Following the event on November 22, the 12-year-old child’s mother took to social media to demand justice for her son, prompting widespread outrage online.

On November 24, local police announced the dismissal of the officer, who had beaten the boy, identified by the surname Wang, and who served as the deputy director of the county’s police office. The police also required Wang to apologise to the boy, surnamed Ma, and his family.

The police office’s parent unit accompanied Ma to the hospital for a medical examination, which revealed several bruises on his face and lower back.

The police report further clarified the circumstances surrounding the incident. Wang and his colleague, auxiliary police officer Dai, were called to the school after a parent of a Primary Three student reported their child was being bullied.

Upon their arrival, two Primary Three students informed them that they had been bullied multiple times by Ma, a Primary Six student. While Wang and Dai were investigating the case and comforting the bullied students and their families, Ma left the school on his own.

Wang and Dai pursued him and confronted him outside the school, leading to the assault.

While some online observers expressed sympathy for the police officer, attempting to justify his actions as “punishing the bully”, others were outraged by his violent action.

“The police officer was helping the bully’s parents and the school to educate him,” one user commented on Weibo.

“Even if the police officer was dealing with a criminal, he should not have resorted to violence but rather brought him to justice through the legal system. Dismissal from his position is too lenient a consequence for an adult assaulting a child,” another user remarked.

According to a survey by the government-affiliated China Youth and Child Research Centre, 53.5 per cent of minors have experienced bullying in schools. Many students are reluctant to report bullying to teachers and parents, often met with responses like “it was just a prank”.

In recent years, education departments nationwide have been granted greater authority to address school bullying. In May, the Ministry of Education announced an initiative requiring primary and secondary schools to hold anti-bullying meetings for each class at least twice every school term and to install surveillance cameras in hidden areas.

High-ranking Chinese military official under probe for ‘serious rule violations’

https://www.scmp.com/news/china/military/article/3288499/high-ranking-chinese-military-official-under-probe-serious-rule-violations?utm_source=rss_feed

Miao Hua, one of the top leaders of China’s mighty Central Military Commission (CMC), has been placed under investigation for suspected serious violation of rules, the defence ministry said.

Miao is director of the political work department of the CMC, which oversees China’s People’s Liberation Army.

More to follow …

Chinese golden monkeys to head to France on 10-year goodwill conservation mission

https://www.scmp.com/news/china/diplomacy/article/3288506/chinese-golden-monkeys-head-france-10-year-goodwill-conservation-mission?utm_source=rss_feed

A trio of golden snub-nosed monkeys will make their way from China to France as part of an international cooperation programme to mark 60 years of diplomatic relations.

The China Wildlife Conservation Association signed a conservation and research agreement on the endangered species with France’s Beauval Zoo in Shanghai on Wednesday, the association said.

One male and two female golden snub-nosed monkeys will take up residence at the zoo in Saint-Aignan in central France, about 250km (155 miles) south of Paris, home to a family of giant pandas.

Under the agreement, any monkeys born in France will be returned to China when they are five years old, and all of the group will go back once the 10-year agreement ends.

Golden snub-nosed monkeys, with their golden-orange fur and upturned nose, are classified by the International Union for Conservation of Nature as an endangered species, with an estimated 3,800 of the animals in the wild in the southwestern province of Yunnan in 2022.

Their range extends through central and southwestern China, from the forests of the Qinling mountain range, to Hubei, Sichuan and Yunnan provinces.

In China, they are protected as national treasures, along with the giant panda and crested ibis.

With the agreement, the French zoo will become the first outside Asia to have the animals, according to the zoo’s website.

The association said the agreement was meant to improve protection of the species, exchange of conservation research, and conservation management.

It did not say when the monkeys would arrive in France.

A pair of giant pandas have been on loan to the zoo since 2012, giving birth five years later to a male cub named Yuan Meng, the first panda born in France. Female twin cubs followed in 2021.

Last year, Yuan Meng returned to China, after his departure was delayed by the pandemic.

For decades China has used panda diplomacy as a means to soften its image on the global stage and strengthen ties with other countries.

China donated 23 giant pandas to nine countries, including France, from 1957 to 1982, before switching to short-term loan plans.

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Chinese diplomat’s endorsement sparks outrage in Japan over foreign interference in elections

https://www.scmp.com/week-asia/politics/article/3288424/chinese-diplomats-endorsement-sparks-outrage-japan-over-foreign-interference-elections?utm_source=rss_feed

China’s consul general in Osaka has ignited a diplomatic storm by endorsing a Japanese left-wing party ahead of the country’s general election, drawing sharp criticism and raising concerns over foreign interference.

Xue Jian, known as one of Beijing’s outspoken “wolf warrior” diplomats, posted a video clip to social media on October 25 featuring Taro Yamamoto, leader of the Reiwa Shinsengumi Party, urging public support for his party.

Xue added his own commentary to the post, stating, “It’s the same in every country in the world, but once politics goes wrong, the country becomes corrupt and ordinary people, except for the privileged class, become poor and eventually end up in hell.”

With more than 82,000 followers on his X account, Xue’s endorsement quickly drew attention. Although the post was later deleted, the diplomatic implications continue to unfold.

Hitoshi Matsubara, an independent Diet member and former chairman of the National Public Safety Commission, submitted an official question to the legislature on November 11, asking the Japanese government to respond to claims that Xue’s post violated the Vienna Convention on Diplomatic Relations, which prohibits envoys from interfering in a host nation’s domestic affairs.

In its reply, the Japanese government confirmed, “If a diplomat makes a contribution to a specific political party in the receiving state, it is considered a violation of this obligation.”

The government added that they requested the Chinese side remove the post, which has now been deleted.

Despite the deletion, the dispute continued on social media, with Xue calling Matsubara an “anti-China political opportunist” and suggesting the Japanese politician had “lost his mind.”

Matsubara hit back, saying, “Based on the government’s statement, we appreciate that you have humbly reflected on the matter and deleted the post.

“With that in mind,” he added, “what do you personally think was problematic about your actions that both I and the Japanese government have unanimously deemed inappropriate?”

In a statement to This Week in Asia, Matsubara said that, as a career diplomat, Xue “must be fully aware that interference in another country’s domestic affairs is unacceptable.”

He added that the foreign ministry’s “quick response in requesting removal of the post was appropriate” and believes Xue “underestimated Japan” on this issue.

It was essential for Tokyo to lodge a protest, he stated, as not doing so could be perceived as creating a “fait accompli”, and permitting Xue and other Chinese diplomats to attempt to influence elections in Japan and elsewhere in the future.

Coverage of the spat on social media has been extensive, with many in Japan insisting that Xue’s comments represent interference in Japan’s domestic politics.

“If the Japanese ambassador to China were to do the same thing, there would surely be intense dissatisfaction, yet he is so shamelessly doing it towards Japan that it is a complete mockery,” said one message. “Of course, this makes it even clearer that Reiwa is a pro-China, anti-Japan organisation.”

Others demanded that Xue be expelled.

Xue, the consul general in Osaka since June 2021, and Matsubara have a history of hostile exchanges.

In 2021, Xue posted on what was then Twitter stating, “Taiwan independence = war. Let me be clear! There is zero room for compromise with [mainland] China!” On May 31 this year, he wrote to members of the Diet, including Matsubara, demanding they cut all ties with Taiwan.

Matsubara is a member of the cross-party Japan-Taiwan Parliamentary Group and, earlier this year, travelled to Taipei to attend the inauguration of Lai Ching-te.

Matsubara recently questioned the Diet about Consul General Xue’s attempts to pressure Japanese politicians, suggesting the government consider declaring him “persona non grata and expelling him for his repeated unacceptable actions.”

In response, the government stated that it does not address every statement from Chinese officials online, “however, including on the points raised in the question, we will refrain from making any prejudgements about the future actions of our government at this time.”

China’s EV boom threatens to push petrol demand off a cliff

https://www.scmp.com/business/china-business/article/3288448/chinas-ev-boom-threatens-push-petrol-demand-cliff?utm_source=rss_feed

From Tesla chargers in the ancient alleys that surround the Forbidden City in Beijing to lonely highway rest stops with charging posts in the Western deserts, signs of the electrification of China’s transport fleet – and the demise of petrol – are everywhere.

Chinese sales of electric vehicles and hybrids reached a tipping point this year in their tug of war with internal combustion engines. They have accounted for more than half of retail passenger vehicle sales in the four months from July, according to the China Passenger Car Association, a trend that is poised to send appetite for transport fuels into a decline that will have a major impact on the oil market.

The faster-than-expected uptake of EVs has shifted views among oil forecasters at energy majors, banks and academics in recent months. Unlike in the US and Europe – where peaks in consumption were followed by long plateaus – the drop in demand in the world’s top crude importer is expected to be more pronounced. Brokerage Citic Futures sees Chinese petrol consumption dropping by 4 to 5 per cent a year through 2030.

“The future is coming faster in China,” said Ciaran Healy, an oil analyst at the International Energy Agency in Paris. “What we’re seeing now is the medium-term expectations coming ahead of schedule, and that has implications for the shape of Chinese and global demand growth through the rest of the decade.”

For a global oil market, which has come to rely on China as its main growth driver for most of this century, that will erode a major pillar of consumption. The country accounts for almost a fifth of worldwide oil demand, and petrol makes up about a quarter of that. The prospect of a sharp drop from transport is also coming on top of tepid industrial consumption due to slowing economic growth.

The growing popularity of electric trucks, as well as those that run on liquefied natural gas, is also weighing on demand for diesel. Chinese consumption of the fuel peaked in 2019 and will drop by 3 to 5 per cent a year through 2030, UBS Securities said in a note this month.

There are still a lot of unknowns about how China’s uptake of EVs will play out, such as whether full electrification can ever be achieved, and what that will mean for fuel demand. Another question mark surrounds plug-in hybrid vehicles, which can be powered by electricity or backup petrol engines. They have accounted for much of the sales growth over the past few years, but there is little data on the extent to which the drivers of these cars still rely on motor fuel.

The IEA sees “rampant, mass-market electrification” potentially pushing Chinese petrol demand into decline from 2025. That will result in an average annual drop of 2.1 per cent from 2023 through 2030. Others, like Citic, see a more rapid retreat. Improvements in fuel efficiency and a peak in car ownership would help drive the declines, along with the uptake of EVs, the brokerage said in a note in late October.

This year may be a “turning point for China’s refined oil market, with petrol consumption peaking before declining rapidly”, Luo Yantuo, a senior engineer with the PetroChina Planning & Engineering Institute, part of China’s biggest oil company, wrote this month in an analysis piece on PetroChina’s website. The amount of gasoline-powered cars on the road would peak as early as next year, she said.

Beijing planted the seeds for the transition to EVs more than a decade ago, offering subsidies that gave carmakers time to scale up output and lower costs. It began to pay off in 2021 when output of new energy vehicle shipments nearly tripled from the previous year, and they are now primed to surpass the 10 million mark for the first time in 2024.

New energy vehicles make up about 10 per cent of all cars on the road now, and that is expected to exceed 20 per cent by 2027 and could approach 100 per cent by the 2040s, said Anders Hove, a China researcher at the Oxford Institute for Energy Studies. The country’s oil demand from light vehicles will fall from around 3.5 million barrels a day at the moment to 1 million by 2040, he said.

China’s path toward electrification is faster than in other economies. In the US, EVs still represent only about 10 per cent of total car sales, and BloombergNEF sharply scaled back its forecasts for growth after the Republican election sweep.

Petrol consumption there has fallen just 12 per cent from a peak in 2004 through last year, according to IEA data. In Europe, where cars running on petrol and diesel are common, transport-sector consumption is down only 6 per cent from a high in 2007.

China’s likely drop in petrol demand due to its aggressive electric car roll-out “is completely unique in some respects”, the IEA’s Healy said. “I don’t think there’s a country that has the same, the comparable profile.”

Chinese EVs are poised to push out to global markets, using Hong Kong as a stepping stone

https://www.scmp.com/business/article/3288393/chinese-evs-are-poised-push-out-global-markets-using-hong-kong-stepping-stone?utm_source=rss_feed

The Chinese government and the nation’s electric vehicle (EV) manufacturers believe Hong Kong is a good launch pad and testing ground for their efforts to go global, as the industry faces barriers to entering key overseas markets like the US and European Union (EU).

The China Association of Automobile Manufacturers (CAAM) hosted its first automotive industry supply chain summit in Hong Kong on Wednesday, which attracted dozens of EV makers and government officials to discuss how Hong Kong can help carmakers from the mainland expand overseas.

Chinese carmakers face a series of challenges when developing their businesses overseas, including in trade coordination, complying with international standards, brand promotion, after-sales service and dealing with financial services, according to Fu Bingfeng, CAAM’s secretary general.

“Hong Kong as an international finance centre, trade centre, and innovation centre has its natural advantages and can play a crucial role in supporting Chinese enterprises’ path to globalisation,” he said.

“It can act as a two-way gateway for Chinese EV makers to go overseas and bring in new technologies.”

EV makers in China are seeking to globalise amid cutthroat competition at home, strong sales and production momentum and overseas trade curbs. In August, the Biden administration raised the tariff rate on Chinese EVs to 100 per cent from 25 per cent. Last month, the EU raised tariffs on Chinese EVs to as high as 45.3 per cent.

This has prompted some leading Chinese EV makers to set up production facilities in Europe and Mexico and explore opportunities in Africa and Southeast Asia.

As the world’s largest offshore yuan hub and the third largest global financial centre, Hong Kong can provide a platform for Chinese EV companies to attract international capital and raise funds, said Yu Fachang, chairman of state-owned China Everbright Group at the event.

Chinese EV makers are also using Hong Kong to test their new products. Premium EV maker Xpeng opened its flagship Hong Kong store in July and launched its right-hand drive cars in the city last month.

And Geely’s premium EV unit, Zeekr, debuted the 009, a six-seat pure EV in Hong Kong in July. It was Zeekr’s first launch event outside mainland China.

Wang Hui, vice-president of Changan Automobile, a Chongqing-based carmaker, said his company plans to list its luxury EV brand Avatr on Hong Kong’s stock exchange in the first quarter of next year. He also said the company will bring six to eight EV models under the brand to the city in the next five years.

The Hong Kong government unveiled a road map for EVs in 2021, under which the registration of petrol-fuelled cars – including hybrids – will not be accepted by 2035, as the city strives to achieve its 2050 net-zero emissions goal.

Chinese EV brands nearly doubled their market share to 30 per cent in Hong Kong in the first six months this year, according to London-based car distributor Inchcape, based on data from the Transport Department.

Chinese security firms in Myanmar risk escalating civil war and diplomatic tensions

https://www.scmp.com/week-asia/politics/article/3288394/chinese-security-firms-myanmar-risk-escalating-civil-war-and-diplomatic-tensions?utm_source=rss_feed

The deployment of Chinese security companies in Myanmar to safeguard Beijing’s economic and strategic interests risks drawing Chinese nationals into the nation’s civil war, potentially leading to deadly incidents and diplomatic crises, analysts warn.

Experts say Chinese security personnel will face “massive challenges” in persuading armed groups in Myanmar to allow Chinese projects to resume, particularly since many are located in areas currently controlled by the opposition.

Recent media reports from the mainland and Myanmar suggest that China plans to establish a joint security company with Myanmar’s military regime to protect its projects and personnel. On October 22, the junta formed a committee to draft a memorandum of understanding for this initiative. The BBC-Burmese Service report noted that there are already four Chinese private security companies operating in Myanmar.

This proposal follows Chinese Foreign Minister Wang Yi’s visit to Myanmar in August and the first visit to China by Myanmar’s military leader, Min Aung Hlaing, earlier this month.

Adam Simpson, a senior lecturer at the University of South Australia, said having Chinese private military corporations undertake security operations creates a high likelihood of Chinese nationals being caught up in the civil conflict and possibly killed.

“[This] will undoubtedly create a diplomatic incident,” he said, adding that for the junta, the presence of these Chinese companies is an “embarrassing recognition” that they are unable to ensure basic security for Chinese interests in Myanmar.

Additionally, having Chinese nationals in security roles “further complicates attempts by the opposition to secure control of key economic and population centres,” Simpson said.

In recent months, the junta has suffered a series of defeats in its battle against ethnic armed alliances, which now control over half of the country.

This week, a powerful rebel group, the Kachin Independence Army seized Kanpaiti, a key trading town and rare earth mining hub in northeastern Myanmar near the Chinese border. This loss leaves the Myanmar military with control of only one border town, Muse, and deprives it of potential mining profits.

Adding that the presence of the Chinese security companies is likely “one of the most disastrous developments in the almost four years of civil war since the coup”, Simpson said it further complicates all aspects of the conflict.

India is likely concerned as “proxy” People’s Liberation Army troops will be stationed in Kyaukpyu in Rakhine to protect China’s oil and gas pipeline interests, Simpson said, “just down the road” from India’s long delayed Kaladan Multi-Modal Transit Transport Project in the same state.

Bangladesh is worried about troops “on their doorstep” while Thailand will be unhappy to have Chinese nationals running security operations in the neighbouring country and “potentially sitting in on meetings with Myanmar officials”, Simpson added.

“The EU and US should emphasise that having Chinese boots on the ground in Myanmar is an unacceptable escalation of the conflict”, Simpson said, adding that even if Chinese nationals are not directly involved in fighting, their presence could “free up” junta troops to attack the opposition elsewhere.

“If the opposition eventually takes power, they will not look kindly on China for so brazenly supporting the undemocratic and illegitimate junta,” Simpson predicted.

Jason Tower, a Myanmar expert at the United States Institute of Peace, said Beijing has seen how the junta has “cannibalised” Myanmar’s own private security companies through forced conscription and is concerned that poor security will force Chinese projects in active conflict zones to cease operations.

However, Chinese security personnel will face “massive challenges” in convincing armed groups in the country to allow projects to resume, as these groups are likely to view the security forces as aligned with the Myanmar military, Tower said.

“It will prove very difficult to avoid the blurring of lines between what constitutes private security, and what constitutes a hostile force that aims to secure the regime’s economic stakes vis-a-vis China,” Tower added.

China has clearly seen that the junta is struggling to protect its investments, such as the China-Myanmar pipeline project and state-owned mines, as well as planned investments such as the deep-sea port in Kyaukphyu in Rakhine state, Tower said.

Many projects are now under the control of a mixture of ethnic armed organisation and people’s defence forces, with the military unable to access large sections of the pipeline, he noted.

With the Myanmar army growing weaker and more dependent on China for security, Beijing is using the country as a test case for expanding its security companies abroad, Tower added.

Sending large numbers of Chinese security is something that China has not been able to achieve for other critical Belt and Road Initiative projects, he added.

This includes the China-Pakistan Economic Corridor, which also faces security challenges, where Chinese nationals have been the frequent target of attacks by terrorist and insurgent groups.

Htwe Htwe Thein, an associate professor at Australia’s Curtin University, said while Chinese security companies have already been in Myanmar for quite some time, the recent signing of a government-level agreement between China and Myanmar has “profound implications”.

Apart from Beijing’s recognition of the Myanmar junta – which illegally seized power in February 2021 – as a legitimate government, many of China’s economic interests are situated in regions currently controlled by the opposition, she added.

This points to challenges and complications of implementing the agreement at the ground and operational level, Htwe said.

While Chinese security companies have operated elsewhere such as in Africa, Htwe noted that Myanmar is unique due to its ongoing conflict, and people feel “concerned and threatened” by the presence of such companies.

“This is absolutely the wrong time”, she said, adding that anti-Chinese sentiment, which has been increasing among locals and the diaspora since the coup began, will only intensify.

Myanmar diaspora groups are planning to organise rallies against perceived Chinese interference in the country, Htwe said.

“A large majority of the diaspora and the locals do not want this, this is against Myanmar people’s voices and will, and they want the Chinese government to listen to the people’s sentiments,” she added.

Chinese analyst forecasts more troubles at sea after US-Philippine task force revealed

https://www.scmp.com/news/china/diplomacy/article/3288402/chinese-analyst-forecasts-more-troubles-sea-after-us-philippine-task-force-revealed?utm_source=rss_feed

A Chinese analyst of the South China Sea has warned of more trouble at sea after revelations about the involvement of a US special task force at a disputed shoal.

US Defence Secretary Lloyd Austin last week confirmed the deployment of Task Force Ayungin, a special operations unit named after the Philippine word for Second Thomas Shoal – a flashpoint in Manila’s maritime conflict with Beijing.

It was the latest example of the US “fanning the flames” and fuelling the fight in the disputed waters, said Ding Duo, deputy director of the Centre for Oceans Law and Policy at the National Institute for South China Sea Studies in Hainan.

In an article published on Tuesday, Ding, who recently concluded a visit to the Philippines, where he said he engaged with local sources familiar with the matter, said such support by the United States had emboldened the Philippines to engage in further provocations in its ongoing dispute with China.

It also showed that cooperation between Washington and Manila under their alliance framework was becoming “more structured, task-oriented, project-based”, he added.

Ding said the task force – which comprises around 15 US troops stationed on Palawan Island – was formally established in July, around the same time an agreement was reached between Beijing and Manila over resupplying a decades-old warship deliberately grounded in the Second Thomas Shoal, known in China as Renai Jiao.

In June, during what Manila called the worst confrontation in recent years, China Coast Guard members boarded two Philippine Navy boats to stop personnel transferring food and other supplies, including firearms, to troops stationed on the shoal. Several Philippine Navy personnel were injured in the subsequent clashes, including one who lost a thumb.

A month later, the two countries reached an interim agreement to avoid violent confrontations during Manila’s resupply missions to the Sierra Madre warship, which Beijing says was illegally beached at Second Thomas Shoal by the Philippines.

Before the interim deal was reached, the shoal had become the scene of increasingly violent disputes, including vessels being rammed and the Chinese coastguard using powerful water cannons. No violent encounters have been reported since the provisional agreement came into effect.

Manila has overlapping claims with Beijing in the vast South China Sea, with clashes between the two neighbouring countries largely occurring near the shoal.

Kanishka Gangopadhyay, a spokesman for the US embassy in Manila, said the task force enhanced the alliance’s “coordination and interoperability” by allowing US forces to support Philippine military activities in the South China Sea.

Derek Grossman, a senior defence analyst at Rand Corporation, said the deployment of US soldiers to the shoal was a tacit acknowledgement of the Philippine position in the disputed waterway.

“Has anyone realised that by disclosing the existence of ‘US Task Force Ayungin’, Biden admin implicitly recognised Philippines’ sovereignty over a disputed [South China Sea] feature?” he said in a social media post, noting that Washington had never previously taken the position on a specific feature in the contested maritime zone.

“This is a clear signal to China,” Grossman said.

Ding said the special operations unit regularly conducted training exercises with the Armed Forces of the Philippines’ Western Command, including offering personnel training to the Philippine side and improving the coordination of crewed and uncrewed military equipment.

The drill mainly focused on supporting the Philippines’ resupply missions and personnel rotations to the Sierra Madre, aiming to provide maritime operational guidance to the Philippines and enhance US-Philippine intelligence interoperability, Ding said.

According to Ding, the task force trained the Philippines coastguard on small vessel defensive tactics last month. The task force has access to at least four Mantas T-12s naval surveillance drones and at least one T-38 drone boat.

“By establishing the task force, the US can gain more direct insight into the operational habits and activity modes of Chinese coastguard vessels, thereby providing information support for its situational analysis and battlefield preparation,” he said.

According to Ding, the US might also “incite the Philippines to cause trouble” through other means. For instance, the operations unit could “escort” the Philippine resupply ships before they enter areas controlled by China, serving as an opportunity to practise interoperability of information systems and share command chains, he said.

China needs US$1.4 trillion to boost domestic consumption amid impending ‘trade war 2.0’

https://www.scmp.com/business/china-business/article/3288399/china-needs-us14-trillion-boost-domestic-consumption-amid-impending-trade-war-20?utm_source=rss_feed

China might need an additional 10 trillion yuan (US$1.4 trillion) to lift domestic consumption to restore investors’ confidence, according to HSBC Asset Management’s investment outlook for 2025.

With another trade war looming with the US and a property sector that is showing no signs of a revival, China will need to seek growth by boosting domestic demand, said Caroline Yu Maurer, head of China and core Asia equities.

She said 10 trillion yuan would be sufficient to stimulate consumer spending and restore investor confidence in Chinese stocks, adding that the cash injection does not have to happen in one go or in one year, but investors would like to see a path to get there.

Since late September, Beijing has introduced a slew of measures to boost its economy, from cutting interest rates to lowering the down payment ratio for buying property. These efforts pushed Chinese stocks into a rally rarely seen in years.

However, the bull run soon lost steam, as the much-anticipated stimulus for the ailing property market and sluggish consumer spending failed to have the desired effect.

China’s benchmark CSI 300 Index has fallen by 10 per cent since a peak in mid-October, while the Hang Seng Index, which includes many big mainland Chinese companies, has lost nearly 17 per cent.

The counry is facing multiple challenges, including a slowing economy and US-China tensions. Washington’s ties with Beijing are expected to deteriorate following Donald Trump’s return to the White House.

“[For] China, next year is really a tug of war between the US trade war disruptions versus the domestic stimulus,” said Maurer. “That will basically create a bit more volatility and uncertainty.”

On Monday, Trump said he would impose an additional 10 per cent tariff, on top of all other tariffs on products from China. During his campaign, Trump said he would impose additional 60 per cent tariffs on all imports from China, and a 10 per cent to 20 per cent flat duty on all imports.

This could mean that the tariffs on China could be implemented soon after Trump’s new term starts in January, earlier than expected, according to a note from Nomura.

A potential “trade war 2.0” could force China to shift back to domestic demand, especially consumption, as exports and manufacturing, which China has been relying on for growth, will be hit, according to Macquarie analysts Larry Hu and Yuxiao Zhang.

“All in all, we believe that you’re going to see more stimulus coming in to support economic growth next year,” said HSBC’s Maurer. When that happens, stocks traded onshore in domestic-oriented sectors are likely to do better, she added.

While China’s retail sales rose in October, partly because of the week-long national day holiday, the People’s Bank of China’s survey for the second quarter conveyed a different story.

Some 62 per cent of respondents, a near historical high, said they would save more in the future, showing an unwillingness to spend. At the same time, only 13.3 per cent of those polled, a record low, said they would invest.

China is still smarting from Trump’s last tariff blitz. Is it ready for round 2?

https://www.scmp.com/economy/global-economy/article/3288360/china-still-smarting-trumps-last-tariff-blitz-it-ready-round-2?utm_source=rss_feed

This is the second in a two-part series about the tariffs likely to be levied on China during Donald Trump’s second term as US president. This part explores China’s side of the story, while examined the state of trade and taxation from the Americans’ point of view.

When insole factory owner Peter Wang pictures what life will be like under the tariff regime proposed by US president-elect Donald Trump, he quickly shifts to more pleasant mental imagery – the relatively low-stress environment for the Chinese exporters who have relocated to Southeast Asia.

Having already reduced his operations in the southern manufacturing hub of Dongguan amid a broader slowdown in the Chinese economy, a significant rise in import taxes from the US – where 80 per cent of his products are sold – would be the kiss of death.

“If the tariffs are imposed, my workers will lose their jobs, and I may move to Southeast Asia to look for opportunities,” he said. That region has been a popular destination for many Chinese manufacturers, as shipments can be routed through countries there to bypass US tariffs.

Wang’s worries are widely felt. A re-escalation of trade tensions, precipitated by Trump’s proposed 60 per cent tariff on all goods of Chinese make, would do much to stifle growth in the world’s second-largest economy, as it maintains a high reliance on exports.

However, analysts said, China is better prepared than it was during the initial tariff blitz during Trump’s first term, with more options to cushion the impact of whatever comes next. Some, they argued, could further reshape global trade dynamics.

While a campaign pledge from Trump is not equivalent to a legally binding tariff, economists have cautioned the negative effects of a new front in the trade war would exceed that of the earlier conflict.

Larry Hu, chief China economist at Macquarie Capital, has used data from the first iteration of the trade war to estimate the damage a revamped struggle could do. A 60 per cent tariff hike by the US, he said, could cause China’s total exports to fall by 8 per cent within 12 months of implementation, and its gross domestic product could decrease by 2 percentage points in the same period.

It would also mean a roughly 1 per cent hit to major Western economies over the first 12 months of their enactment, according to analysts from Barclays.

Globally, almost a third of the world’s GDP growth – an estimated reduction of 0.8 percentage points – would be lost over the same period in this scenario, Allianz Research projected in a recent note.

The president-elect has already indicated he will come out swinging. In a post this week on his Truth Social platform, Trump vowed to impose a 10 per cent tariff on all Chinese goods the day of his inauguration via executive order. He also swore to levy 25 per cent taxes on imports from Canada and Mexico.

In its 2025 China Outlook, investment bank Goldman Sachs had predicted the new administration would start on day one with an increase of 20 percentage points. Chinese real exports would “remain flat after double-digit growth in 2024, as declines in US-bound exports are offset by increases in exports to other countries”, it said.

Exports have played a crucial role in bolstering the economy as Beijing struggles to meet its annual growth target. According to Chinese customs data, last month the total value of exports rose by 12.7 per cent year on year to US$309 billion, a 27-month high.

With the return of Trump threatening to stall that growth engine, China may roll out more stimulus measures to add fuel to the domestic market. Authorities have already unveiled a series of policies to boost activity in recent months, most notably raising the quota for local special bonds by 6 trillion yuan (US$828.7 billion) over the next three years to swap out volatile “hidden debts” held by local governments.

Depending on the scale of US tariffs, Barclays projected Beijing would introduce additional tiered fiscal packages in 2025 up to 10 trillion yuan, naming the annual meeting of the national legislature in March and gatherings of the Communist Party’s decision-making Politburo in April and July as the next major windows for policy changes.

“With uncertainty surrounding the forthcoming US trade policy towards China, we think the Chinese government will introduce policy stimulus in multiple stages, rather than rolling out all of its firepower immediately,” said the bank’s chief China economist Jian Chang.

In the most extreme case, said Hu of Macquarie, “60 per cent tariffs may take 3 trillion yuan in stimulus to offset.” If the goal is to turn around domestic demand, he added, another 3 trillion yuan may be needed.

Despite the experience they gained in the rough and tumble of the last trade conflict, Chinese policymakers now face a different set of challenges that will complicate matters as Trump re-enters the White House.

“The lingering property crisis and weak domestic demand have made China more dependent on external demand,” CICC Research warned in a note earlier this month.

Though the US remains China’s top export destination, its importance has weakened as the rivalry between the two nations persists.

In 2017, it accounted for 18.9 per cent of China’s total export share, buying US$429.72 billion worth of goods. In 2023, the US’ share had dropped to 14.8 per cent even with a higher purchase volume – US$500.24 billion, according to Chinese customs data.

As with the first trade war, China may be forced to import more products from the US as the latter attempts to balance its trade books.

Chen Li, chief economist at Soochow Securities, predicted negotiations would start after the US imposes a mild tariff increase in the wake of Trump’s inauguration. Under the pressure of further hikes, Chen said, “China may take the initiative to balance the trade gap by raising its imports”.

Soybeans, crude oil and petrochemicals were the items he expected to be most affected by enforced imports, he wrote in a note on November 18.

While China has expanded its reach globally, the sheer volume and value of its exports to the US mean any significant reduction could reshape China’s economic landscape and reconfigure global supply chains.

In recent years, China has widened exports to its more geopolitically aligned partners like Russia, Singapore, Vietnam and the UAE, Allianz Trade wrote in a report earlier this month.

“In this context, bilateral trade between geopolitically aligned countries has risen by over 2 percentage points to 60 per cent of global trade in just two years,” it said.

Countries like Vietnam, Malaysia and Indonesia – already beneficiaries of supply chain diversification – could become even more critical global trade hubs, Allianz said, altering balances of economic power.

Shao Yu, director of the Shanghai Institution for Finance and Development, said since Trump’s pledged policies – tariffs of 10 to 20 per cent on rivals and allies alike – are broader this time, “it is likely that China will have to reorganise its supply chain, forming a large supply chain outside the US.”

One response, he said, could be “a substantial devaluation of the yuan” to “help absorb” some of the blow.

During the first US-China trade skirmish, the yuan depreciated by over 11 per cent, making Chinese exports relatively cheaper.

But Beijing has less space for such action this time, CICC cautioned. Unlike the second half of 2019 – when the US Federal Reserve began quantitative easing – there is less appetite for interest rate cuts and cooling, it said, “not to mention Trump’s weak dollar policy, which may constrain part of the exchange rate as a means of hedging.”

Another potential response could be incentivising overseas investments from Chinese manufacturers, including relocating production to the US to avoid tariffs.

Comments from Robin Zeng, founder of CATL – China’s battery-making giant – indicate this is at least a possibility.

“Originally, when we wanted to invest in the US, the US government said no,” the billionaire was quoted by Reuters as saying earlier this month. “For me, I’m really open-minded.”

Lian Ping, director general of the China Chief Economists Forum, said one consequence of US efforts to bring back manufacturing would be a diminished share of overseas investment for American companies.

With this in mind, he added, Chinese companies should enter the US market directly even as they strengthen their presence in Southeast Asia, the Middle East, Europe and other regions where US companies have shrunk their footprints or withdrawn entirely.

“By increasing investment in the US to enhance the economic integration of the two sides, it will make unilateral ‘decoupling’ impossible,” he said. “At the same time, it can also drive the export of upstream products such as raw materials and parts.”

Opening up China’s capital account to facilitate more efficient flows should be another tool on Beijing’s belt, said Ju Jiandong, a professor of finance at Tsinghua University.

By making it easier for funds to move in and out of the country, China can distribute risk and encourage international stakeholders to push for more rational trade policies, he said at a recent webinar hosted by Fudan University.

“After China’s capital account is opened, cooperation between China, Europe and Japan in the capital market will become closer,” he said. “If the US policy hurts China’s capital, it will also hurt Europe’s and Japan’s.”

China maintains a mostly closed capital account at present, which means companies and individuals are unable to move money in or out of the country without abiding by a strict set of standards.

Though it has a wide range of options, how Beijing will use them depends on how vigorously Trump pursues his policy agenda.

Richard Baldwin, a professor of international economics at the International Institute for Management Development, said tariffs will lead to retaliation until the two sides agree on a “managed trade deal” to stop an ascent up the escalatory ladder. The trigger for these negotiations, he said, would be inflation in the US.

“When the inevitable price shock shows up in Walmart and all those swing voters see their purchasing power plummet, he will back off and do a deal with China,” he said. Baldwin cited Trump’s last term as an example, when critical consumer goods were exempted from tariff coverage to avoid a price shock.

“It is not important how many times Trump says tariffs don’t raise prices,” Baldwin added, “because they do.”

Some observers also expressed doubt as to the feasibility of the president-elect’s vow to curb Chinese imports diverted through third countries.

Ja Ian Chong, an associate professor of political science at the National University of Singapore, said blocking all Chinese goods would be “very difficult to achieve practically, especially in the short term”, as “China-made components are in many goods”.

Jacob Grunter, an analyst from the Mercator Institute for China Studies, said he expected Chinese exporters to find new workarounds, “especially if measures have a wide scope of product types, as that’s more for the authorities to try to track”.

For Wang, the Chinese insole exporter, the simplest answer would be relocating to a country in Southeast Asia, which would carry lower production costs as well as milder tariffs.

But with the future uncertain, all he can do now – like many other industry participants – is work extra hours to deliver on a glut of pre-inauguration orders.

“When January comes, everyone will be cautious about whether to accept new orders,” he said.

If a new tariff were announced after a bundle of new shipments was confirmed, he added, “the loss would be unbearable.”

Additional reporting by Huifeng He, Xinyi Wu and Alice Li