Mistral点评

• Chinese tech workers expecting to attend Consumer Electronics Show report US visa problems
• Russia’s plunging rouble puts pressure on Chinese e-commerce merchants
• China sentences journalist to seven years on spy charges, family says
• [Sport] Uniqlo faces China backlash over cotton comments
• China’s next-gen BeiDou satellite system to ramp up rivalry with US-based GPS
• Europe’s battery crisis a humiliating reminder of China’s EV dominance
• China, Russia warplanes over Sea of Japan, scientists leaving West: SCMP daily catch-up
• Travel fund shortage leads Chinese student to scam 63 hotels with dead roaches, used condoms
• Why are top scientists leaving the West for China?
• Jack Ma returns to Alibaba campus, as China moves to boost business confidence
• Is the EU hatching a new weapon for dealing with Chinese overcapacity?
• China wants to turn Xinjiang’s vast deserts into a string of pearls
• China M&A outlook calls for Hong Kong talent influx, Deutsche Bank Asia head says
• Chinese, Russian bombers conduct joint air patrol over Sea of Japan, defence ministry says
• Renault goes on China hiring spree to bolster EV push at home
• China insurance firm offers ‘996’ package to cover sudden death, accidents related to overwork
• China, India find common ground for ‘strategic recalibration’ in post-clash thaw
• Chinese man says he defaced Yasukuni Shrine with ‘toilet’ graffiti to protest Fukushima discharge
• Will the EU and China form a united front against Trump’s tariff offensive?
• How China can set the tone for global climate action
• China expands health insurance coverage with 91 new drugs, breakthrough treatments
• What Xi’s flying visit to Morocco means for China’s EV industry
• Trump 2.0’s China tariffs
• High-flying Malay student at Penang Chinese school becomes education sensation
• China boosts fighter jet afterburner, tycoon offloads luxury flats: SCMP’s 7 highlights
• [Sport] Sweden asks China to co-operate over severed cables
• China’s logistical dream: Beijing has a new plan to counter supply-chain threats
• Man in China obsessed with KOL spends US$550,000 on gifts, hopes she will call him ‘brother’
• Is Hanoi quietly building Asean alliances on a South China Sea code of conduct?
• Volkswagen’s controversial Xinjiang plant sale signals strategic shift in China
• Sweden seeks clarity from China about suspected sabotage of undersea cables
• Trump tariffs could be a blessing in disguise for China’s reformers
• Trump vows to end Ukraine war. What does that mean for China?

Chinese tech workers expecting to attend Consumer Electronics Show report US visa problems

https://www.scmp.com/news/china/diplomacy/article/3288777/chinese-tech-workers-expecting-attend-consumer-electronics-show-report-visa-problems?utm_source=rss_feed

As more than a thousand Chinese tech companies prepare to showcase their latest products at the Consumer Electronics Show in Las Vegas, the world’s leading tech exhibition, many employees are reporting being denied US visas despite holding invitations to attend.

Analysts said that such CES visa denials were unprecedented and signalled a further deterioration in bilateral relations.

First held in 1967, CES is a global platform for the technology industry and a business-to-business hub that sets the stage for the year ahead in trade and innovation. The next show takes place from January 7 through 10, days before US president-elect Donald Trump assumes office on January 20.

Around 4,000 exhibitors from around the world have registered to attend, with more than 30 per cent estimated to be from China.

The visa rejections come as US-China tensions escalate, with Trump vowing to impose a 10 per cent tariff on all Chinese imports and pledging to protect American manufacturers by imposing stricter restrictions on Chinese companies’ access to the US market.

“There’s so much disappointment,” said a 28-year-old tech marketer in Beijing, who requested anonymity because she plans to reapply at a different US consulate in China.

At her visa interview at the US embassy, she recounted, she told her interviewer that “I would visit my clients in the States and attend the CES. I showed her the invitation letter, which clearly states that I’m attending the CES.

“I don’t think she considered that.”

After speaking with industry colleagues, she said, she learned that many other tech companies were facing the same issue. “They told me that if you mention attending CES, there’s a 90 per cent chance you’ll be denied a visa.”

The US State Department did not immediately respond to a request for comment.

Chris Pereira, the founder of iMpact, a New York-based consultancy, posted this month on LinkedIn that during a cross-cultural leadership training programme for Chinese companies expanding abroad, he learned that “half of the 40 companies in attendance reported their staff were being denied visas, despite holding official invitation letters from CES”.

Since his post, Pereira said in an interview, at least three more clients had reported employees had been denied visas to attend CES.

“They were immediately refused with no reason given. And that’s relatively unheard of for CES to have that type of visa refused,” he said.

“Even during Covid, if you were applying, you could get” a visa to attend CES, Pereira said.

In an email, a CES spokesperson said that “we are aware of some CES attendees and exhibitors from China whose business travel visa applications are being denied”.

“We encourage the US government to expedite and approve visas for individuals who are travelling to the US for legitimate business reasons,” the statement added.

Chinese companies have maintained a strong presence at CES since 1991. However, in recent years, participation has fluctuated, influenced by the US-China trade war that began in 2018 during Trump’s first administration, as well as strict Covid measures in China.

In 2018, a record 1,551 Chinese firms took part in CES, making up more than a third of all exhibitors. The number dropped to 1,213 in 2019, then a little over 1,000 attended in 2020 before the onset of the worldwide pandemic.

In 2021, attendance plummeted to just 210 in 2021, 159 in 2022, and 493 in 2023 as US President Joe Biden continued to target Chinese tech companies like Huawei Technologies over national security concerns.

Following Biden’s meeting with Chinese President Xi Jinping on the sidelines of the Apec forum in California in November 2023, CES saw a significant increase in Chinese participation in the 2024 show in January, with 1,114 Chinese companies – out of 4,314 exhibitors – showcasing their products.

Liu Pengyu, spokesman for the Chinese Embassy in Washington, called CES “an important platform for exchanges and cooperation between Chinese companies and companies from all over the world. Chinese companies are the main force of exhibitors over the years”.

“We hope that the United States will work with China to reduce policy obstacles such as visa and entry, take concrete actions to encourage and support more exchanges between people from business, science and technology and other sectors of the two countries,” Liu added in an email statement.

Pereira said that the CES visa rejections reflected US efforts to reduce exchanges, including flights, trade, and dialogue.

“The more connections we remove from the relationship, the easier it is for conflict to arise,” he said. Exhibitions like CES, he said, were “wonderful opportunities for business exchanges between companies from China, the US and the rest of the world”

“It is frustrating to see even events like this being impacted,” he said.

Russia’s plunging rouble puts pressure on Chinese e-commerce merchants

https://www.scmp.com/economy/global-economy/article/3288688/russias-plunging-rouble-puts-pressure-chinese-e-commerce-merchants?utm_source=rss_feed

The sharp depreciation of the Russian rouble and growing devaluation expectations have caused widespread concern among Chinese exporters, prompting many to suspend sales on Russian e-commerce platforms, according to industry insiders.

Data from the People’s Bank of China shows that the yuan-rouble exchange rate rose from 1 yuan to 13.9913 roubles on November 22 to 15.6113 roubles on Thursday, before falling to to 14.91 roubles on Friday.

During trading on Wednesday, the rouble-US dollar exchange rate fell by over 8.5 per cent to a one-year low of 114.75 roubles to the dollar.

“The continued depreciation of the rouble is posing serious losses for Chinese exporters,” said Andy Guo, the founder of Waimaojia, a business platform on WeChat that has attracted many exporters focused on the Russian market.

“On the one hand, the rouble’s depreciation causes a sharp increase in domestic commodity prices, weakening Russian consumers’ willingness to buy and thus reducing orders from us. On the other hand, exchange rate fluctuations further erode the profit margins of Chinese merchants after settlement.”

He said the impact will be felt mainly by e-commerce platforms pricing goods in roubles and Chinese businesses operating in Russia in trade denominated in roubles.

E-commerce platforms using yuan or US dollar pricing are less affected, Guo added.

There are about 150,000 Chinese cross-border e-commerce merchants active on several mainstream e-commerce platforms in Russia – including Ozon, Wildberries and Yandex Market – and the number is still growing rapidly, he said.

One Chinese merchant, Jordan Si, said: “Russian consumers do have purchasing power compared to peers in other emerging markets. But now the rouble devaluation is so scary, and the rate of customer returns is so high, as well as logistics costs, that many Chinese merchants have to give up on returning their products to China, and we are losing a lot of money.”

The increasing risks are seeing more merchants choose to wait and see.

“The tariff barriers will be even tougher next year,” said Peng Biao, a clothing supply chain specialist.

“Few want to give up the Russian market, but the current risks make us hesitate. It’s a real dilemma.”

Meanwhile, the effects of Western financial sanctions on the payment systems of Russia’s mainstream e-commerce platforms are complicating the issue.

“Currently, Chinese exporters still need to rely on third-party payment providers, with fees exceeding 1 per cent, significantly higher than the commissions of a few thousandths charged by international platforms,” Guo said.

One cross-border e-commerce operator based in Shenzhen who sought help from the local commerce bureau said, “My firm sold products worth millions of yuan on the Russian e-commerce platform Wildberries, but I have not received any money back yet.”

He said it was a problem faced by many Shenzhen cross-border e-commerce companies that focus on the Russian market, resulting in a severe shortage of operating capital.

Another Chinese trader, Lin Yan, said Chinese exporters who are desperate to receive payment can only accept roubles, but they have to exchange them for yuan through the black market, which is becoming increasingly risky.

Some Russian e-commerce platforms are launching promotions in China, hoping to attract more Chinese merchants.

Internet penetration in Russia has risen to around 70 per cent, with about 40 per cent of the country’s 145 million people buying goods online. According to official estimates, Russia’s e-commerce market is predicted to be worth US$53 billion this year.

China sentences journalist to seven years on spy charges, family says

https://www.theguardian.com/world/2024/nov/29/china-sentences-journalist-dong-yuyu-to-seven-years-on-spy-charges-family-says

A veteran Chinese state media journalist has been sentenced by a Beijing court to seven years in prison on espionage charges, his family has said.

Dong Yuyu, a senior columnist at the Communist party newspaper Guangming Daily, was detained in February 2022 along with a Japanese diplomat at a Beijing restaurant.

The diplomat was released after a few hours of questioning, but Dong, 62, has been in custody ever since and was charged with spying last year.

Dong’s work has been published in the Chinese editions of the New York Times and Financial Times. He won the prestigious Nieman Fellowship at Harvard University in 2006-07 and was also a visiting fellow at Keio University in Japan in 2010 and a visiting professor at Hokkaido University in 2014.

According to the judgment, the Japanese diplomats Dong met, including then ambassador Hideo Tarumi and current Shanghai-based chief diplomat Masaru Okada, were named as agents of an “espionage organisation”, his family said in a statement.

“We are shocked that the Chinese authorities would blatantly deem a foreign embassy as an ‘espionage organisation’ and accuse the former Japanese ambassador and his fellow diplomats of being spies,” the statement added.

Beijing’s foreign ministry responded to Dong’s case by saying: “China is a country ruled by law.”

“Chinese judicial authorities strictly handle cases in accordance with the law, and those who violate the law and commit crimes will be investigated according to the law,” spokesperson Mao Ning said at a press conference on Friday.

The Japanese embassy said it would not comment about the case.

“In any case, the diplomatic activities of Japanese diplomatic missions abroad are carried out in a legitimate manner,” an embassy spokesperson said in an email.

Ian Johnson, a writer and friend of Dong, said the sentence “shows that the government is trying to send a message that normal contacts with the outside world are undesirable. The government presented no evidence that Mr Dong committed espionage. Instead, it made the dubious argument that meeting with diplomats is in itself suspicious behaviour.”

Under Chinese law, someone convicted of espionage can be jailed for three to 10 years for less severe cases or receive heavy punishment, including life imprisonment, for serious cases.

Civil liberties and freedom of expression have dramatically receded in China under President Xi Jinping’s decade-long tenure. The Communist party maintains tight restrictions on domestic media outlets, and Chinese nationals who work with foreign outlets are routinely harassed.

China is the worst country for jailing media workers, with 44 journalists behind bars as of December last year, according to a Committee to Protect Journalists ranking.

Beh Lih Yi, the Asia programme coordinator of the Committee to Protect Journalists, said: “Interacting with diplomats is part of a journalist’s job. Jailing journalists on bogus and unjust charges like espionage is a travesty of justice.

“We condemn this unjust verdict, and call on the Chinese authorities to protect the right of journalists to work freely and safely in China. Dong Yuyu should be reunited with his family immediately.”

In February, a Beijing court handed a suspended death sentence to the jailed dissident writer Yang Hengjun after finding the dual Chinese-Australian citizen guilty on espionage charges.

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[Sport] Uniqlo faces China backlash over cotton comments

https://www.bbc.com/news/articles/ckgld4y4l12o

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China’s next-gen BeiDou satellite system to ramp up rivalry with US-based GPS

https://www.scmp.com/economy/china-economy/article/3288672/chinas-next-gen-beidou-satellite-system-ramp-rivalry-us-based-gps?utm_source=rss_feed

China expects to launch the next generation of its BeiDou Navigation Satellite System by 2035, following a series of upgrades – a development that would help it vie with the US-backed Global Positioning System (GPS) for international clients.

BeiDou’s developers anticipate “breakthroughs” in key technology next year, state media reported, citing a government-organised seminar on Thursday to mark the 30th anniversary of the home-grown navigation system’s conception.

Three pilot satellites could be sent into space by around 2027, followed by a “system networking satellite” launch around 2029. And by 2035, the creation of the next iteration of BeiDou should be complete.

“China will build a next-generation BeiDou system with more advanced technology, more powerful functions and better services,” Xinhua reported.

BeiDou’s name comes from the Big Dipper asterism – a set of stars historically used in navigation to locate the North Star. The current generation, BeiDou-3, became fully operational in 2020. And plans for the next generation were released at the seminar.

China has been developing BeiDou to vie for a piece of the lucrative satellite communications market with the 31-year-old GPS. Both compete with Europe’s Galileo, Glonass from Russia and the Quasi-Zenith Satellite System from Japan for users.

BeiDou’s next generation aims to form a “hybrid constellation” of high, medium and low orbits to improve accuracy and “autonomous operation” capabilities, according to Xinhua. And the upgraded system will include an “efficient integrated ground system” to advance information sharing.

“High-precision” navigation, timing and positioning will be utilised to cover the Earth’s surface and near-Earth space, the agency said.

In China, 1.4 billion pieces of equipment on the ground were using BeiDou as of October. That month, the system also received commitments totalling 12.7 billion yuan (US$1.76 billion) for new projects.

Developing countries – those unable to create their own satellite systems – may prefer BeiDou over its rivals if it is just as reliable, yet cheaper, and with no perceived security risks, said Alexander Vuving, a professor at the Daniel K. Inouye Asia-Pacific Centre for Security Studies in Hawaii.

“From a developing-county point of view, you are just a consumer,” Vuving said. Whether BeiDou or GPS has better technology, he said, will become a “cat and mouse game” where they take turns outperforming each other over the years ahead.

The existing BeiDou system can guide telecommunications, transport, natural resource management and the detection of pipeline leaks.

Overseas, Chinese officials have said the system is already helping manage ports in Pakistan, river transport in Myanmar, urban planning in Brunei and agriculture in Laos.

Egypt and South Africa have also signed BeiDou cooperation agreements.

An early-warning system under Indonesia’s disaster-prevention agency is another overseas signatory. Indonesia’s Bandung Institute of Technology began using the system in 2016.

BeiDou stands “on par” with GPS, and the overseas deployment of China’s system means it is “positioning itself to expand its influence”, the Indonesia Sentinel news outlet said in September.

Europe’s battery crisis a humiliating reminder of China’s EV dominance

https://www.scmp.com/opinion/china-opinion/article/3288490/europes-battery-crisis-humiliating-reminder-chinas-ev-dominance?utm_source=rss_feed

While many businesses worldwide are wringing their hands about Donald Trump’s plans for a “beautiful” tariff war – targeting Canada, Mexico and China on his first day back in the Oval Office – my attention was focused on the sub-Arctic town of Skelleftea in Sweden and the collapse of Northvolt, Europe’s electric-vehicle battery champion.

Richard Milne at the Financial Times called Northvolt’s resort to Chapter 11 bankruptcy protection, with US$5.8 billion of debts and just US$30 million cash in its coffers, a “Nordic noir thriller”. The collapse is nothing less than a dagger thrust into the heart of Europe’s future as a global automotive industry leader. Volkswagen has written down most of its 21 per cent stake in the venture. Goldman Sachs is writing off US$896 million in the venture. European taxpayers will have to provide $313 million because of EU guarantees.

The collapse threatens the European Union’s plan for its registered vehicles to reach net zero emissions by 2035 and to address the challenge from China as a world leader across the spectrum of clean energy industries.

The most direct impact of the Northvolt collapse will be on Europe’s critically important automotive sector, which has been a symbol of the continent’s economic virility for half a century. The sector accounts for 13.8 million jobs – over 6 per cent of Europe’s total employment. In Germany, Sweden and four other EU economies it accounts for over 10 per cent of manufacturing jobs.

Companies like Volkswagen, BMW, Mercedes and Porsche may have been global giants as car manufacturers for most of our lifetimes but their tardiness in addressing the shift to EVs has jeopardised not only their futures but those of the smaller manufacturing businesses that rely on them. Northvolt’s bankruptcy leaves them frantically searching for new EV battery suppliers, most of which are in Asia.

The Chinese EV challenge has been front of mind in Europe for some time. As worldwide EV sales rose to 14 million in 2023 – about 18 per cent of global car sales and up from a minuscule 2 per cent in 2018 – China’s share of the EU market for EVs leapt from less than 5 per cent in 2020 to 29.3 per cent. While many of those cars were made by European companies operating in China, the blow to pride and self-confidence has been palpable.

But the failure of Northvolt, as the main home-grown battery maker set to compete with Chinese, South Korean and Japanese battery makers, represents a competitive catastrophe on a new and humiliating scale. It is a reminder that there is almost no aspect of the EV (and clean technology) supply chain that is not today dominated by Chinese companies.

The failure is notable not only because of what it means for future car-making, but also because the battery sector has in its own right become globally important. Global battery demand has grown worldwide from 51 gigawatt-hours in 2016 to 772GWh last year and is forecast to grow to over US$200 billion by 2030.

As Fatih Birol, head of the International Energy Agency, recently told the Financial Times, “China is like Real Madrid in the Champions League. Almost every energy story today is essentially a China story.”

China dominates the biggest green industries, from battery cells, solar panels and wind turbines to refined minerals like lithium, cobalt and nickel. When it comes to batteries, Chinese companies account for 97 per cent of the world’s anode active material capacity and almost 90 per cent of cathode active material capacity.

Even if the EU were to be successful in keeping Chinese-brand EVs out of the European market – as it is trying to do with the imposition of additional duties ranging from 17 to 35.3 per cent – and manufacturing its own EV batteries, it would still be heavily reliant on Chinese companies for raw materials and components.

US car manufacturers are not immune from this pervasive challenge either. Raising tariffs on EVs made in China might keep Chinese clean tech companies at bay for a while but US carmakers also lack the refined materials and components needed in EVs.

Europe’s carmakers have limited options. They could slow their transition away from conventional internal combustion engines. However, this would profoundly frustrate EU ambitions to reduce carbon emissions, address global warming and grow an EV industry. It would also harm EU car export prospects when foreign markets are increasingly attracted to the low-cost, high-quality EVs they can buy from China.

Alternatively, the EU could invite investment from the Chinese and Korean companies that are leading the clean energy transition. This would ensure that European manufacturers keep pace with the technological changes linked to the clean energy revolution and would secure future job growth inside Europe. However, it would mean inviting Chinese investors to play a larger role in the EU, which might alarm those who are obsessed with China as a national security threat.

Perhaps the choice has already been made. BMW, which had an order with Northvolt worth US$2 billion, has turned to Korea’s Samsung. China’s CATL is building new plants in Germany and Hungary.

As Renault’s chief executive Luca De Meo warned last month: “We need to find a deal with China because we won’t be able to compete”. At present, Donald Trump thinks his proposed tariffs will suffice to keep China’s EV dragons at bay. But perhaps Europe’s sobering experience with Northvolt provides a warning US carmakers should not ignore.

China, Russia warplanes over Sea of Japan, scientists leaving West: SCMP daily catch-up

https://www.scmp.com/news/china/article/3288739/china-russia-warplanes-over-sea-japan-scientists-leaving-west-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 .

South Korea scrambled fighter jets on Friday after spotting Chinese and Russian military aircraft entering its air defence identification zone during a joint aerial patrol over the Sea of Japan.

After more than a decade of working in the US, at the start of this year, star geometer Sun Song made the move back to China.

Some pundits say a peace deal could ease Beijing’s tensions with EU, but mistrust remains over Russia ties, Taiwan and South China Sea.

Cargo ships ply the Saigon River deep into the night, delivering materials to factory hubs near Ho Chi Minh City, Vietnam’s main financial centre.

Vietnam and Malaysia have upgraded diplomatic ties and pledged to deepen their cooperation on the South China Sea dispute ahead of a second Donald Trump administration in the US and rising maritime tensions between Beijing and Manila.

The thaw in China-India relations began with a pact to disengage troops at their disputed border in the Himalayas, laying the groundwork for a reunion between President Xi Jinping and Prime Minister Narendra Modi at the Brics summit in October.

An ambitious undertaking could help China reduce its per-unit logistics cost by 6.3 per cent in three years, as the country seeks to empower its domestic market and boost offshore competitiveness amid escalating trade protectionism.

Travel fund shortage leads Chinese student to scam 63 hotels with dead roaches, used condoms

https://www.scmp.com/news/people-culture/trending-china/article/3288306/travel-fund-shortage-leads-chinese-student-scam-63-hotels-dead-roaches-used-condoms?utm_source=rss_feed

A man in eastern China spent his university tuition on travel instead of enrolling and scammed multiple hotels by placing dead cockroaches and used condoms in rooms when his funds ran out.

He employed this scheme to blackmail 63 hotels, seeking free accommodation and compensation, which ultimately led to his arrest and sparked public outrage online.

The 21-year-old man from Taizhou, Zhejiang province, known only by his surname Jiang, began his deceptive journey in September last year after opting to forgo university enrolment in favour of travelling with his tuition money.

It remains unclear whether the school funds were provided by his parents or the total amount spent.

However, when his finances dwindled, Jiang resorted to a “creative” scheme to extort compensation from hotels.

He meticulously prepared a collection of “props” in advance – including dead cockroaches, cicadas, strands of hair, and used condoms – to fabricate unsanitary conditions and extract compensation from multiple establishments.

“Over a span of 10 months, Jiang frequently stayed at hotels, sometimes checking into three or four different ones in a single day. He would exploit minor flaws or plant insects, bugs, and hair to threaten hotels with complaints or online exposure, demanding free stays or compensation,” explained an unnamed police officer from Linhai in Zhejiang.

While many hotels complied with Jiang’s demands to protect their reputations, his scam was finally exposed on August 8 when a manager, surnamed Ke, from one of the hotels reported Jiang to the police for extorting 400 yuan (US$55) by alleging hygiene issues.

“His complaints about supposed bugs and hair in the rooms were alarming. Upon discussing these incidents with several other hotels, we noticed a recurring pattern with this guest,” disclosed an anonymous staff member from one of the victimised hotels.

Preliminary investigations led police to apprehend Jiang at a local hotel, where a thorough search of his belongings uncovered 23 packets containing items he used to stage his scam, including dead cockroaches and dirty condoms.

Further investigation revealed that since November last year, Jiang had stayed in more than 380 hotels, many of which showed suspicious financial transactions labelled as refunds or compensation.

Later, police contacted hotels across five provinces to gather evidence, while Jiang eventually confessed to orchestrating 63 scams, extorting a total of more than 38,000 yuan (US$5,200).

The case has since been transferred to the Linhai People’s Procuratorate for further legal proceedings.

Jiang’s scam has triggered public outrage online, reported Jiupai News.

“I would like to know what major he planned to study in university. Fraud and deception? Does he have any basic morality left?” one angry observer asked.

“His parents must have worked so hard to provide this money, hoping he would learn and grow, but instead, he not only skipped school but also pulled stunts like this. Truly heartbreaking for his family,” another remarked.

“Well, now he’ll have free accommodation – in prison. He deserves it!” commented a third.

Why are top scientists leaving the West for China?

https://www.scmp.com/news/china/science/article/3288447/why-are-top-scientists-leaving-west-china?utm_source=rss_feed

After more than a decade of working in the US, at the start of this year, star geometer Sun Song made the move back to China.

He joined Zhejiang University’s Institute for Advanced Study in Mathematics after leaving his most recent post as a professor at the University of California, Berkeley.

Sun, who has been hailed as a strong candidate for the Fields Medal, also known as the “Nobel Prize for mathematics”, said in a university statement that he wanted to help students in China pursue maths, and to pass on his expertise on to a younger generation.

He joined a growing list of world-leading scientists and mathematicians have taken up roles at Chinese universities this year, after relocating from Western countries including the United States, Germany and Australia.

While some have said they were swayed by China’s scientific strength, others have been drawn by the opportunities to take on leading roles to help advance the country’s scientific push.

Both ethnic Chinese researchers and foreign researchers who have joined institutes in China have indicated that its rising academic power – as well as its base of young talent – is a major draw.

Mathematics has seen a particularly high influx of top-level expertise in recent years, which may signal China’s growing competitiveness and influence within the field.

While some mathematicians say that China is still decades behind the US, others – including this year’s winner of the Shaw Prize in Mathematical Sciences, Peter Sarnak – say China is becoming very competitive and the country has “tremendous talent”.

Before recruiting Sun Song this year, Zhejiang University also attracted former University of Michigan geometer Ruan Yongbin in 2021 and Harvard University number theory specialist Liu Yifei in 2022.

Award-winning Japanese mathematician Kenji Fukaya said he hoped more Chinese-born researchers would return to the country, both to teach and to help build a community of highly skilled mathematicians.

He joined Tsinghua University as a full-time professor in September, after leaving US-based Stony Brook University.

Fukaya, who focuses on symplectic geometry in research that bridges maths and physics, said Chinese students showed strong dedication and focus when studying mathematics, reminding him of Japanese students from his youth.

In November, the Post found that two more award-winning China-born mathematicians had also returned to teach after decades abroad.

Ma Xiaonan, who taught in institutions in France and Germany for several decades, joined Nankai University in Tianjin as a chair professor at the Chern Institute of Mathematics.

The leader in global analysis on manifolds and complex geometry said he was attracted to the institute due to its “strong academic foundation and spirit of innovation”, and intended to cultivate new talent with innovative skills and a global perspective.

And Chinese-Australian mathematician Wang Xujia returned to his hometown of Hangzhou to join Westlake University after nearly three decades abroad, most recently at the Australian National University’s Centre for Mathematics and its Applications.

Wang, well known for his work on differential equations, received the Australian Mathematical Society Medal in 2002, and in 2007 he was the first mainland Chinese PhD recipient to win gold in the Morningside Mathematics Prize, sometimes referred to as the Chinese Fields Medal.

Another draw for professors taking up roles in China has been the potential to expand their academic resumes, which includes setting up new institutes.

French physicist Gerard Mourou, Nobel laureate and a pioneer of the field of electrical engineering and lasers, joined China’s top-ranked Peking University as a chair professor in October.

The university announced that Mourou would play a crucial role in the establishment of a new institute at the school of physics focused on research and international collaboration.

In 2018 after he was awarded the Nobel Prize for physics, Mourou said at an event in Beijing that the gap in scientific progress “is really narrowing” and that the Chinese government better prioritised science than in the US.

Nanotechnology and nanoscience specialist Wang Zhonglin, also known as the “father of nanogenerators”, was officially sworn in as the director and inaugural chief scientist of the newly chartered Beijing Institute of Nanoenergy and Nanosystems in July.

Wang Zhonglin, who was first in this year’s Stanford/Elsevier ranking of the top 2 per cent of scientists worldwide, helped start the institute over a decade ago while still working at the Georgia Institute of Technology.

Wang remained a professor and director of nanostructure characterisation at Georgia Tech throughout the construction of the institute, but his research affiliation switched in 2023 and multiple sources confirmed he had moved to China full-time to head the new institute.

Nanoscience and nanotechnology are of vital interest to both Beijing and Washington because of their wide applications in medicine, industry, energy and military technology.

Retired Harvard University nanoscientist and chemist Charles Lieber confirmed to the Post in August that he was exploring work opportunities in different institutes, including in mainland China and Hong Kong.

Lieber, named the leading chemist in the world from 2000 to 2010 for cumulative impact and citations, was convicted in the US in 2021 for failing to disclose ties to a Chinese talent programme and tax violations.

The nanoscientist was targeted under the now-defunct China Initiative, which launched in 2018 under the Trump administration to investigate researchers believed to be contributing to the theft of technical secrets and intellectual property.

The initiative led to racial profiling of ethnic Chinese researchers as well as bias against researchers with any ties to the country, and became a major push factor for ethnically Chinese researchers to leave the US and join institutes in China.

With president-elect Donald Trump’s impending return to the White House next year, ethnic Chinese researchers in the US have mixed emotions about how they will be treated, which could lead to another exodus of talent from the country.

Some of the researchers returning to China this year indicated that they had missed the country or had always planned to return from abroad.

Multi-award winning Chinese-American physicist Gao Huajian joined Tsinghua University at the start of the year after more than four decades teaching across the US, Europe and Asia.

Gao said in a video posted by the university in January that he was thrilled to return to China to inspire passion for research among students, and that he had been wanting to return to the country for a long time.

The return to China of “star” twin scientists Ma Donghan and Ma Dongxin following the end of their postdoctoral research in North America was celebrated on Chinese social media after an announcement by their alma mater Tsinghua University.

Ma Donghan joined Dalian University of Technology with a focus on microscopy, while Ma Dongxin, whose expertise is high-performance LED lights, returned to Tsinghua.

According to Tsinghua, Dongxin said that while her research abroad “went smoothly”, she did not feel like she belonged in North America and had been looking forward to returning to China after completing her studies.

Several scientists working in climate and energy-related fields have also returned to China this year. Highly cited climatologist Chen Deliang joined Tsinghua University in November after more than three decades in Europe, most recently at the University of Gothenburg in Germany.

Energy engineer Zhang Xiangyu left the US National Renewable Energy Lab, where he worked on energy efficiency projects, and joined Southeast University in Nanjing in August.

The incoming Trump administration has sparked worry among those working in the environment and climate fields, as the former president has promised to roll back on climate legislation, pull out of the Paris Agreement and boost fossil fuel production.

Jack Ma returns to Alibaba campus, as China moves to boost business confidence

https://www.scmp.com/tech/big-tech/article/3288737/jack-ma-returns-alibaba-campus-china-moves-boost-business-confidence?utm_source=rss_feed

Jack Ma, founder of Alibaba Group Holding, on Friday visited the company’s campus in Hangzhou, capital of eastern Zhejiang province, in a show of support for the e-commerce empire he created a quarter of a century ago, according to employees.

Ma’s visit was his first known trip back to to his hometown since March 2023, when the billionaire visited a school that he established. While Ma resigned as Alibaba’s executive chairman in 2019 and has kept a low profile since 2020, he remains widely seen as the spiritual leader of the company and the face of Chinese entrepreneurship.

His low-key visit to Alibaba’s campus comes at a time when the Chinese government is trying to boost confidence in the country’s private sector, as the world’s second-largest economy grapples with a slew of challenges, ranging from a persistent property market downturn to renewed geopolitical headwinds after US president-elect Donald Trump threatened to levy additional tariffs on Chinese imports.

In a photo taken by an employee on site and shared with the South China Morning Post, a smiling and relaxed Ma, wearing a white cap, was seen waving to staff.

Alibaba, owner of the Post, did not immediately respond to a request for comment on Friday.

Ma’s appearance comes a week after Alibaba announced its largest internal adjustment after implementing a corporate restructuring in early 2023 that carved up its sprawling business empire into six units.

In its latest revamp, Alibaba merged its domestic and overseas e-commerce operations into one unit, furthering its effort to seek greater synergy across its domestic and international supply chains amid intensifying competition with rivals such as Pinduoduo owner PDD Holdings.

Alibaba is also doubling down on artificial intelligence. Its September-quarter revenue from the Cloud Intelligence Group, one of the company’s most important growth engines, rose 7 per cent to 29.6 billion yuan (US$4.1 billion).

Alibaba shares rose slightly on Friday to close at HK$83.65. They have, however, fallen by more than two-thirds from their peak in late 2020.

Ma and Alibaba co-founder Joe Tsai are currently the two largest shareholders of the e-commerce giant, after they aggressively scooped up its tumbling shares in New York and Hong Kong. Ma bought about US$50 million of shares in the fourth quarter last year, raising his stake beyond 4.3 per cent at the end of 2021, making him the largest single shareholder.

Is the EU hatching a new weapon for dealing with Chinese overcapacity?

https://www.scmp.com/news/china/diplomacy/article/3288716/eu-hatching-new-weapon-dealing-chinese-overcapacity?utm_source=rss_feed

European Union lawmakers narrowly approved European Commission President Ursula von der Leyen’s team for her second term in office on Wednesday, but it was a mysterious event in Brussels last week that gave a better indication of where she plans to go on China policy over the next five years.

In an auditorium tucked away in the bowels of the commission’s Charlemagne building, guests gathered last Friday for the clunkily titled “High-Level Forum on Global Non-Market Overcapacity”. For those not fluent in EU-speak, this means China.

The EU’s civil service flew officials and experts in, at von der Leyen’s personal invitation, from around Europe and the United States for a full day devoted to Chinese overcapacity – an issue former trade chief Valdis Dombrovskis described as a “significant threat”.

“From steel and solar panels to shipbuilding and the automotive industry – this is not an abstract challenge, it is reality. And for many businesses, both in Europe and within our partners, it is an existential challenge,” Dombrovskis said.

Over the day, speakers thrashed out ways to define the problem, and proposed ideas for how to deal with it. The fact that the commission even held this forum spoke volumes about von der Leyen’s ambitions: she is laser-focused on China and is looking for new ways to crack down on its economic overflows.

But it also showed that Brussels believes it needs a new weapon – an “overcapacity instrument” – and that its army of bureaucrats is already analysing what that might look like.

“President von der Leyen has been clear on the political direction of the future – we need stronger tools to tackle overcapacity. It’s time to stop letting others flood our market while we hold the door open,” said one of the speakers, who were granted anonymity to speak freely.

The issue of overcapacity has become a huge bone of contention in China’s ties with Europe and other trading partners.

A report published this week by the Mercator Institute for China Studies, a German think tank, detailed the efforts of 50 governments around the world to react to a surge in Chinese exports in recent years.

According to the report, the products they are protecting “vary significantly, take for example ‘elephant-print trousers’ (Thailand) and brass keys (Brazil) to semiconductors and ship-to-shore cranes for the US”.

For Europe, it has become a particularly sensitive issue. For decades, booming trade with China underpinned bilateral ties, even if the two sides clashed occasionally over issues such as human rights. But in recent years, the dynamic has changed.

China’s imports from Europe have grown 45.7 per cent in the eight years since Donald Trump was first elected president of the US, according to Chinese customs data covering the first 10 months of 2024. Over the same period, China’s exports to Europe have risen 85.5 per cent.

EU policymakers believe Beijing’s economic policies are at the core of this gear shift. State subsidies, they say, have led to a rush of investment into manufacturing sectors, meaning a surge in production of goods ranging from steel, chemicals and cement to solar panels, wind turbines and electric vehicles.

With sluggish demand weighing on the Chinese economy – which has endured 25 consecutive months of producer price deflation – these goods cannot be absorbed domestically. Europe believes the goods are bound for export, with many landing at EU ports, which remain relatively open to China.

The bloc worries that local industries could be washed away in waves of cheap Chinese imports and that, in sectors such as legacy semiconductors, Beijing is intentionally building up its capacity to create dependencies that could be weaponised in the future.

“Why do we worry?” asked one speaker. “In major economies, overcapacity can be a challenge to global trade. It can undermine fair competition, lead to domestic and external imbalances, hit profits and lead to price wars in many cases.”

The debate has taken on new urgency in light of Europe’s economic woes. Amid stiff competition from China, companies including ThyssenKrupp and Volkswagen are downsizing steel plant and car factories in Germany and Belgium.

While Chinese officials have admitted to overcapacity in heavy industries such as metal and concrete, they have pushed back fiercely against the notion that it exists in hi-tech sectors.

“Regarding overcapacity, in a globalised world no country consumes what they produce. For new energy sectors, the problem is undercapacity,” said one defender of the Chinese government, who pushed back during von der Leyen’s overcapacity extravaganza.

Talk of a specific trade weapon to deal with overcapacity has been spreading in Brussels in recent weeks. It would join other tools in the commission’s armoury aimed at curtailing the impact of China’s economic model in Europe.

Several officials and diplomats confirmed there had been internal discussions on developing a new instrument to deal with China’s spillover, but noted that these were at an early stage.

The bloc is also involved in Group of Seven (G7) discussions on how the club of rich nations could work together to mitigate the negative impacts of overcapacity.

“We express our concerns about China’s non-market policies and practices that are leading to harmful overcapacity and market distortions, undermining our workers, industries and economic resilience and security,” G7 foreign ministers said in a statement after a meeting in Italy last week.

Sabine Weyand, EU director general for trade, said it “remains to be seen” whether a specific tool would be developed to tackle the problem.

“This is something the next commission will have to look at. I am not going to curtail their freedom of action on that one. It’s an issue which is being analysed at this stage,” the German official said at another event in Brussels last week.

Maros Sefcovic, who took over as EU trade commissioner this week, faced calls from French lawmakers during his parliamentary hearing to explore such a tool.

“We will tackle with all our force overcapacities being created by China and threatening our industry in Europe,” said Sefcovic, who will also oversee economic security in von der Leyen’s new-look commission.

“We cannot tolerate where subsidies are aimed to preserve Chinese jobs at the expense of jobs for Europeans.”

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China wants to turn Xinjiang’s vast deserts into a string of pearls

https://www.scmp.com/economy/china-economy/article/3288686/china-wants-turn-xinjiangs-vast-deserts-string-pearls?utm_source=rss_feed

Millions of pearls are being artificially cultivated in the deserts of the Xinjiang Uygur autonomous region, as China pushes forward with an ambitious plan to turn the arid region into a hub for aquaculture.

The pearl farming project was first launched in 2022, but only recently attracted public attention in China when a video of a local farmer showing off a fistful of pearls went viral on social media, state news agency Xinhua reported.

Chinese authorities have been encouraging private investment in aquaculture across China’s northwestern provinces since 2017, with companies using innovative techniques to convert the water inside the region’s saline-alkaline lakes into artificial seawater.

Salmon, lobster, shrimp and tilapia are already being farmed on an industrial scale in lakes dotted across the Taklimakan Desert – a vast desert in Xinjiang known as the “Sea of Death” – and “produced in Xinjiang” seafood is being used by restaurants in many Chinese cities.

Now, efforts are under way to harvest pearls in the area. Investors from southern China have reportedly established a seafood breeding base in Qiemo county – in the heart of the Taklimakan – using micro-organisms to transform a local saline lake into a usable water source.

Last year, the investors began cultivating about 2 million pearl oysters, and they aim to begin selling their first pearls during the second half of 2025.

According to local media, Xinjiang’s unique climate – with its huge temperature swings between night and day, and its long hours of sunshine – is excellent for pearl farming, as the pearls develop a rich lustre and texture.

The cultured pearls also have a side benefit of helping improve the water quality of local lakes, reducing water treatment costs for aqua farms in Xinjiang.

Xinjiang produced 184,000 tonnes (405.7 million pounds) of aquatic products worth 3.86 billion yuan (US$530 million) last year, according to local government data.

By 2025, the local government predicts that the output value of Xinjiang’s entire aquaculture industry will reach about 20 billion yuan.

China M&A outlook calls for Hong Kong talent influx, Deutsche Bank Asia head says

https://www.scmp.com/business/banking-finance/article/3288617/china-ma-outlook-calls-hong-kong-talent-influx-deutsche-bank-asia-head-says?utm_source=rss_feed

Hong Kong will require an influx of banking talent as the market rebounds and cross-border activity with mainland Chinese companies picks up, according to the Asia-Pacific head of Deutsche Bank.

“Hong Kong has always benefited from its proximity to mainland China, and that’s a strength, not a weakness,” Alexander von zur Muehlen said during a recent visit to Hong Kong. “It’s the window to the world, and it will continue to require an influx of talent.”

The German lender’s Hong Kong headcount remained steady at around 850 between 2021 and 2023. In mainland China, the bank increased its staff by nearly 18 per cent to 634 from 2020 to 2023, and it hopes to expand further.

The bank has moved a few dozen internal employees to Hong Kong since 2023, said von zur Muehlen, who serves as CEO for Asia-Pacific, Europe, the Middle East and Africa region, and Germany.

“To understand the trade corridors and the channels better, it requires us to move talent both ways,” he said, referring to the mainland and Hong Kong. “And I think moving people into Hong Kong in particular is a strong sign of our commitment and our overall positive outlook on the market.”

Deutsche Bank’s China revenues have steadily increased since 2020, growing more than 70 per cent to €233 million (US$246 million) as of 2023.

As deal flows slowed in the region, leading to a wave of lay-offs by major investment banks, Deutsche Bank took the opportunity to pick up top talent to its advisory team.

“In this very short span of time, because we stayed committed and invested [in China] when others didn’t, [it has] allowed us to reposition ourselves nicely,” von zur Muehlen said.

“We wanted to proactively make use of the opportunities as other banks were reducing capacity.”

The additions have paid off, with the lender ranked second in the Asia region in the merger and acquisition (M&A) league tables throughout 2024, up from ninth last year, according to Dealogic.

Top deals in Asia have included HKT’s US$870 million sale of 40 per cent of its passive network assets to China Merchants Capital and Wanda’s US$8.3 billion sale of a 60 per cent stake in Zhuhai Wanda to a PAG-led consortium.

M&A activity is expected to pick up as Chinese firms move to accelerate their globalisation as a way to mitigate tariffs the Trump administration is expected to impose.

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

For Chinese companies, the need to refinance and enter markets they have not operated in before is “very high on their radar”, von zur Muehlen said.

“Lessons learned from Covid-19 around supply chains means there is a lot happening in the corporate space for the multinationals, in particular, solidifying their supply chains and becoming more local wherever they work.”

Chinese, Russian bombers conduct joint air patrol over Sea of Japan, defence ministry says

https://www.scmp.com/news/china/military/article/3288626/chinese-russian-bombers-conduct-joint-air-patrol-over-sea-japan-defence-ministry-says?utm_source=rss_feed

China and Russia conducted a joint aerial patrol over the Sea of Japan on Friday, China’s defence ministry said.

It was the ninth joint strategic aerial patrol between the two militaries since 2019, and the ministry said the patrols were based on an annual plan of bilateral military cooperation.

During the previous operation in July, the two countries’ militaries conducted a joint air patrol over the Bering Sea. Two Russian Tu-95 and two Chinese H-6 bombers were spotted off the coast of the US state of Alaska, the first time they held such an exercise in the area.

The patrol in July was held in international airspace, and was intercepted by US and Canadian fighter jets under Norad’s lead, the binational command between the United States and Canada.

China said then that such patrols were not aimed at any third party, in line with international practice, and were unrelated to the current international and regional situation.

Renault goes on China hiring spree to bolster EV push at home

https://www.scmp.com/business/china-evs/article/3288628/renault-goes-china-hiring-spree-bolster-ev-push-home?utm_source=rss_feed

Renault SA is trying to strengthen its electric-vehicle (EV) business at a time of flagging demand by building up its footprint in a country where it does not even sell cars – China.

The French carmaker is turning to one of the few markets where battery-powered cars are selling well to access new technology and learn how to make EVs faster. The company has hired some 200 people in Shanghai, mainly hardware engineers working on the development of a sub-€20,000 (US$21,106) electric Twingo, and also plans to add software engineers, according to people familiar with the situation.

“We are there to learn and we will integrate this knowledge into our own teams,” in France, Francois Provost, Renault’s chief procurement, partnerships and public affairs officer, said in an interview.

Expanding in China is a sensitive subject in France, where some unions are pushing back against management efforts to raise efficiencies via measures including limiting remote work to 2.5 days per week. Renault’s decision to develop much of its new Twingo in China has been criticised internally, and the manufacturer also employs about 3,000 engineers in India.

Renault confirmed its full-year guidance last month, making it an outlier in the industry. Peers including Stellantis NV, Volkswagen AG and BMW AG have issued profit warnings in recent weeks, citing slower EV demand, supplier issues and a slump in China sales. VW and Stellantis, which have been dogged by delays in the introduction of new EVs due to software problems, have since announced plans to cut jobs and close factories.

Renault is betting on its electric €25,000 R5 city car to bolster sales in the near term, and in 2025 plans to introduce models including an electric version of the 1960s-era 4L economy car and the sub-€35,000 R4. By early 2026, all of the group’s EVs, including older models, will be available with cheaper lithium iron phosphate, or LFP, batteries, Provost said.

Renault shelved plans to sell shares of its EV and software unit Ampere in an initial public offering earlier this year due to poor demand for battery-powered cars. One of Ampere’s current goals is helping Renault attract more local partners in China, Provost said.

“For example, we work very closely with our suppliers in Europe, but European ones tend to focus on higher-margin, value-added parts,” he said. “At times I am missing some basic parts. It’s in China that I can find these simpler, high-quality parts.”

Renault plans to deploy the lessons learned in China in its home market. CEO Luca de Meo is attempting to make affordable EVs in France, where labour costs are relatively high. He has retooled local factories including one in Douai in the country’s north that is already manufacturing the new R5.

The stakes are high for Renault, which last year loosened ties with long-time alliance partner Nissan Motor. Pricier EVs such as the new Scenic have not been selling as well as hoped. Many consider the group too small to survive on its own in spite of being 15 per cent owned by the French government.

“We are catching up and we are accessing technology bricks more quickly,” Provost said. “By 2026, our competitiveness – in terms of software, in terms of batteries – will be comparable to that of Chinese manufacturers building locally in Europe.”

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China insurance firm offers ‘996’ package to cover sudden death, accidents related to overwork

https://www.scmp.com/news/people-culture/trending-china/article/3288515/china-insurance-firm-offers-996-package-cover-sudden-death-accidents-related-overwork?utm_source=rss_feed

A leading Chinese insurance company’s “996 overtime work insurance” has sparked significant backlash as the public accuses it of promoting the controversial workplace culture.

The advertisement for a policy named “996 Hard-working Worry-free Insurance,” issued by China Pingan Insurance, has been circulating widely on mainland social media, according to the Xiaoxiang Morning Herald.

“No fear of overtime. Get stay-up-late insurance to cheer for your dream,” reads the slogan.

At the centre of the ad is a cartoon depicting a man working on a computer, with a dark night sky visible outside a window and a wall clock showing the time as after 10pm.

According to the promotional document, a buyer needs to pay at least 18 yuan (US$2.5) per year to receive insurance benefits of up to 600,000 yuan (US$83,000) for various scenarios involving sudden death or accidents.

An unidentified insurance agent noted that the coverage for sudden death and accidents in this policy is common among other products.

“However, the issue with this policy is that its advertisement offends clients,” the agent was quoted as saying. “It places the unreasonable overtime system, like 996, at the centre of its marketing material, which tends to make the public feel uncomfortable.”

A client service representative informed the newspaper that this product, launched by Pingan in collaboration with another insurance firm, is not currently sold on its own platform.

Instead, Pingan offers group insurance targeted at large companies, covering incidents of sudden death, medical accidents, and more. The policy is priced at 3,500 yuan (US$480) for every 10 employees annually.

The 996 working hour system derives its name from the schedule of working from 9am to 9pm, six days a week.

Despite the fact that China’s Supreme Court and the Ministry of Human Resources and Social Security highlighted this overtime arrangement as illegal in 2021, it remains a common practice among tech enterprises and start-ups, where workers are encouraged or coerced to extend their hours.

In recent years, an increasing number of young people have joined the movement to boycott this overtime culture, which is labelled by the mainland public and media as a “toxic” or “bloodsucking” system.

The “996” insurance policy has quickly provoked widespread criticism on mainland social media.

“This insurance product will only intensify workplace competition. Employees are not moneymaking tools. Employers should focus on improving the work environment and increasing workers’ pay, rather than shifting risks to the insurance company,” commented one online observer.

Another individual remarked: “The 996 overtime system is illegal. This insurance policy endorses an illegal practice. I am speechless.”

Tragedies related to long work schedules frequently attract attention on social media in China.

Earlier this month, a 39-year-old man who took a demanding job at a factory in eastern Shandong province died from heart disease at the workplace. His attendance record indicated he had worked a total of 41 hours of overtime over eight consecutive days before his death.

China, India find common ground for ‘strategic recalibration’ in post-clash thaw

https://www.scmp.com/news/china/diplomacy/article/3288629/china-india-find-common-ground-strategic-recalibration-post-clash-thaw?utm_source=rss_feed

The thaw in China-India relations began with a pact to disengage troops at their disputed border in the Himalayas, laying the groundwork for a reunion between President Xi Jinping and Prime Minister Narendra Modi at the Brics summit in October.

Last week, the two countries’ defence chiefs held talks in Laos and committed to cooperation – the latest in a series of moves that analysts have called a “strategic recalibration” in response to pressures from the West.

As Beijing seeks to reform the global economic architecture and New Delhi pursues its multidimensional foreign policy, their visions have proven more complimentary than conflicting since a bloody border clash in June 2020 plunged ties to historic lows.

Numerous rounds of negotiations have taken place in the past four years, but it took October’s accord on military disengagement to restore both countries’ troop positions to pre-crisis locations in the border region of Ladakh.

According to Chietigj Bajpaee, a senior research fellow for South Asia in the Asia-Pacific Programme at Chatham House, the agreement followed “a recognition by New Delhi that it had backed itself into a corner after the clashes”.

“De-escalation of border tensions [was] a prerequisite to engagement on other issues, including the economy,” said Bajpaee, author of China in India’s Post-Cold War Engagement with Southeast Asia.

Bajpaee said that “economic and strategic compulsions” faced by the Asian giants played a role in their reconciliation, including a potentially volatile relationship with the US from next year when president-elect Donald Trump begins his second term.

Tightening foreign investment restrictions in Western countries have also prompted China to seek stable relations and deeper engagement with the Global South, of which India is a key member, he said.

“India’s tensions with the West, on issues ranging from relations with Russia to Canada, also reaffirmed the need for New Delhi to maintain a multidimensional foreign policy.”

Veteran journalist Kalinga Seneviratne, who lectures at the Shinawatra University in Bangkok, said that New Delhi was vexed by Washington’s “concerted pressure” to halt India’s long-standing trade with Russia after the invasion of Ukraine.

There has also been a perception in India that the US has quietly supported Canada over its recent frictions with India, sparked by the killing of a prominent Sikh activist in June, he said.

Hardeep Singh Nijjar, a Canadian citizen who advocated for an independent Khalistan, was shot outside a temple in Surrey, British Columbia. India has strongly denied involvement in his death and recently accused Canada of sheltering violent extremists.

“The spat with Canada over its alleged harbouring of Sikh ‘terrorists’ and accusation of Indian diplomats being involved in the murder of a Sikh community leader in Canada has spurred some anti-Western sentiments in India, especially in the media.”

According to Seneviratne, despite attempts by Beijing and New Delhi to improve relations, some efforts have been slowed by “strong sentiments among Indians that the Chinese cannot be trusted”.

Seneviratne noted that for at least the past two years, India’s foreign minister Subrahmanyam Jaishankar has repeatedly referred to the two countries’ shared history when asked by Western journalists about the Chinese “threat”.

“For the past two years or so, [Jaishankar] has kept on pointing to the two countries being ancient civilisations that have lived peacefully next to each other for 5,000 years,” he said.

Seneviratne, author of Geopolitics and the Media in Asia and the Pacific: Pulling in Different Directions, said that widely circulated Western media in India “played a big role in fomenting Sinophobia”.

“But Indians are not fools, they can clearly see the plot,” he said.

According to Seneviratne, when it comes to reforming global architecture, “India and China, along with Russia and Brazil, are on the same wavelength”.

He added that India’s business sector pushed New Delhi to mend fences with Beijing by lifting trade restrictions imposed after the 2020 dispute.

Bajpaee said there is growing recognition by India that it cannot meet its ambitions to emerge as a global manufacturing hub without sourcing components and raw materials from China.

“Indian corporations have been lobbying to relax visa rules and investment restrictions [and] Indian companies are also seeking ways to help Chinese companies enter the Indian market, although investment restrictions will remain in place for politically-sensitive sectors,” he said.

In Seneviratne’s view, Beijing also wants India to play a more active role in the Brics grouping of developing economies and the Shanghai Cooperation Organisation to avoid its mission of “reforming the global economic architecture” being spoiled.

“For Brics to succeed, India and China need to cooperate. Both countries see themselves as leaders or spokespeople of the Global South – if they can do it together, that will be a formidable alliance,” he said.

Colombo-based journalist and researcher Rathindra Kuruwita said there have been signs in recent years that the containment policies imposed on China by the West might be applied to India as its economic prowess grows – hence the “strategic recalibration” by both countries.

“The evolving global order, characterised by shifting alliances and emerging blocs like Brics, has underscored the importance of collaboration between India and China. Both countries aim to assert their influence in multilateral forums, making improved bilateral ties strategically advantageous.”

According to Kuruwita, progress in China-India relations can be expected in the resumption of direct flights and other areas of people-to-people exchanges, as emphasised by Wang Yi, the Chinese foreign minister.

“Simplification of visa processes is likely, aiming to boost tourism, business travel, and academic exchanges. Both sides have also discussed improving cooperation in media by enabling the exchange of journalists, fostering better mutual understanding,” Kuruwita said.

Seneviratne noted that Beijing and New Delhi have been “very strict” over granting visas for academic exchanges between the two countries.

“There needs to be more interaction between them … Visa liberalisation may help,” he said, adding that opportunities for student exchanges should be increased.

Chinese man says he defaced Yasukuni Shrine with ‘toilet’ graffiti to protest Fukushima discharge

https://www.scmp.com/news/asia/east-asia/article/3288644/chinese-man-says-he-defaced-yasukuni-shrine-toilet-graffiti-protest-fukushima-discharge?utm_source=rss_feed

A Chinese national living in Japan on Friday admitted to his involvement in a graffiti incident at the war-linked Yasukuni Shrine in Tokyo in May.

Jiang Zhuojun, 29, pleaded guilty at the Tokyo District Court to charges of damaging property and disrespecting a place of worship, and said the motive behind his actions was not related to history issues.

“I was protesting against the discharge of treated radioactive water,” he said in court, referring to the treated water from Fukushima nuclear power plant that has been released into the ocean since 2023. “I wanted to protect the ocean.”

Jiang was indicted for allegedly conspiring with two other men to vandalise a stone pillar at the shrine and spray-paint the word “toilet” in English on May 31. The damage is estimated at 4.6 million yen (US$30,000).

The two other men are also Chinese nationals, Dong Guangming and Xu Laiyu, who left Japan for China on June 1. A video was posted on Chinese social media showing a man appearing to urinate on the stone pillar before spray-painting it.

Dong and Xu were placed on the wanted list in July when Jiang was arrested.

Yasukuni has long been a source of diplomatic friction with China and other Asian countries as it honours Japan’s wartime leaders, who were convicted as war criminals in a post-World War II international tribunal, along with the war dead.

Will the EU and China form a united front against Trump’s tariff offensive?

https://www.scmp.com/economy/global-economy/article/3288627/will-eu-and-china-form-united-front-against-trumps-tariff-offensive?utm_source=rss_feed

As mixed signals emanate from negotiations between China and the European Union over tariffs on electric vehicles (EVs), experts said the talks and their outcome will be useful for determining the state of trade relations during the fast-approaching second term of US president-elect Donald Trump.

In a report over the weekend, German broadcaster N-TV cited remarks by the chair of the European Parliament’s trade committee saying an agreement was near. But both Bloomberg and Reuters cited sources this week saying “not much has changed” since Nov 2, when EU officials arrived in Beijing for “technical talks”.

With no official announcements on progress from either side, observers are paying close attention to any developments from the negotiations, eager for a sign of how the two will manage their economic relationship in what is likely to be a more fraught trade environment.

“I am not too optimistic [on China-EU trade relations], but I am at least more optimistic than before Trump was elected,” said He Weiwen, former commercial counsellor at the Chinese consulates in New York and San Francisco.

“The objective need for each other’s markets [should] increase under Trump, as we expect a more protectionist and unilateral approach from the US in dealing with trade.”

Trump, already having vowed to hike tariffs by 60 to 100 per cent on Chinese goods at various stops on the campaign trail, announced he would impose a 10 per cent duty immediately upon taking office via executive order. He also revealed his plans to tax Canadian and Mexican goods by 25 per cent.

He Weiwen, now a senior fellow at the Beijing-based Centre for China and Globalisation think tank, said the European market – recipient of almost 20 per cent of China’s exports – will only be more crucial as the US grows more hostile.

“Half of our export profile now is in Asia. If we can secure our trade with Europe, this makes up nearly 70 per cent of our exports,” He said. “So even if we face volatility from the US, we can be less affected. To show that we want to pursue a better trade relationship, we should also import more from Europe.”

However, a surge in Chinese exports has become Europe’s rationale for a year-long anti-subsidy investigation into Chinese EVs. Last month, the European Commission confirmed tariffs of up to 35 per cent on Chinese electric vehicles, on top of an existing 10 per cent duty.

While it lodges protests – and also plays defence against tariff increases by the US and Canada – Beijing has continued to press for negotiations to carve out a space for its EVs.

Analysts said even if Trump’s second term does create more challenges for China and the EU, it would not be enough to repair the fraying ties between the two.

“That was the overall belief, but it didn’t happen under Trump’s first term, and it will not happen now, for many reasons,” said Joerg Wuttke, president emeritus of the European Union Chamber of Commerce in China.

A Beijing-based economist who has advised China’s State Council on foreign trade relations said he “at least sees a possibility” of working with the EU, as both sides had friction with the US in Trump’s first term.

“It was exactly why the EU-China Comprehensive Agreement on Investment (CAI) was able to come to an initial agreement after seven years of negotiations,” said the economist, who asked to remain anonymous because of his previous role.

Wuttke disagreed, saying the agreement – and its subsequent stalling out – only show why relations would not improve.

“During Trump’s last term, there was not a single easing moment for Europe and China. We got the [CAI] going, but again, that was demolished by the Chinese with sanctions.”

The terms of the CAI were agreed to in principle on December 2020, but the European Parliament voted to freeze ratification in May 2021. The vote came after a round of sanctions and counter-sanctions between Beijing and Brussels over alleged human rights violations in China’s Xinjiang Uygur autonomous region.

“China is only looking after its own interests, and they find it very difficult to be more easy on trading partners. They just full throttle go for their own interests, which is fair enough,” Wuttke said.

“Trump will definitely extract concessions from the Europeans. And the US is by far a more important trading partner for Europe. It is unrealistic to believe that because the US is tough on China, that Europe and China will find more common ground than before.”

What has been made public on the EV talks has focused on the sticking points in negotiations.

According to official releases from the EU, the two sides have been exploring an agreement on “price undertakings” – controls on prices and export volume employed as an alternative to tariffs. The discussions, sources said, also involve an enforcement mechanism.

Brussels pushed for individual agreements with carmakers, which they emphasised would be compliant with World Trade Organization rules. But the idea was repeatedly rejected by the Chinese government, who insisted a trade body under its Ministry of Commerce should stand on behalf of the country’s automotive firms.

Whatever the results of the talks, the two sides are already preparing for more protective measures all but certain to hamper trade relations.

EU member countries are expecting China to put the European cosmetic industry under the microscope, two sources said. This, they added, would be a blow for Italy and France, top players in the field.

The sources also said members are anticipating exports of “large engine petrol-powered vehicles” to be affected if China’s commerce ministry elects to take further action, as Beijing said it was looking into the sector a week after EU member countries announced provisional tariffs on Chinese EVs.

These would come on top of an expansion of China’s anti-dumping investigation into European dairy and pork announced by the ministry last week.

Meanwhile, the EU filed a case at the WTO on Monday against China’s decision to collect anti-dumping duties on European brandy imports. The EU’s tariffs on EVs are already subject to a WTO complaint from Beijing.

The EU is also planning to compel Chinese companies to transfer technology to European businesses to qualify for battery development subsidies, the Financial Times reported this month, citing two senior EU officials.

“I honestly only see the likelihood of a deterioration in trade relations,” said an official who attended closed-door meetings between China and the EU.

“When we complained about China’s tariffs on brandy, they started talking about EVs. To us it’s obvious that they are doing it as retaliation.”

Rui Meng, a professor with the China Europe International Business School, said China-EU trade relations cannot improve without improvement in the overall relationship.

“Our problem with Europe is much more than trade,” Rui said. “Europeans actually have the intention to work with us, but the bottom line is what they have been repeatedly telling us: they want us to show our stance on the conflict in Ukraine.”

Following Russia’s invasion of Ukraine in February 2022, China has faced pressure from the US and Europe for its heightened economic and political ties with Moscow. Earlier this month, EU foreign ministers warned of “consequences” if it was proved that armed drones used in Ukraine were made in China.

Abigael Vasselier, head of the foreign relations team at Berlin-based think tank Merics, said the bloc may not stay resolute as Trump’s trade actions enter into force and China attempts to mend fences.

“There will probably be a Chinese offer, be it at the multilateral level, for instance, on the reform of the WTO, or at the bilateral level, with investment,” she said. “In short, we should expect that European unity is going to be tested. There are likely to be some divisions over where we land, vis-a-vis China.”

How China can set the tone for global climate action

https://www.scmp.com/opinion/china-opinion/article/3288211/how-china-can-set-tone-global-climate-action?utm_source=rss_feed

Two announcements at Cop29, the recent UN climate conference in Baku, Azerbaijan, show China’s consistent leadership in climate change diplomacy and cooperation, especially from the vantage point of the Global South.

The first was Beijing’s commitment to working with all countries to advance the UN’s Early Warnings for All initiative, announced by Chinese President Xi Jinping’s special representative, Vice-Premier Ding Xuexiang. Ding proposed three vital tasks: improving global risk assessments, building a global early warning network, and fostering a climate adaptation partnership.

Notably, China touted a South-South cooperation project to equip nations with meteorological observation tools and early warning systems.

The second announcement was the publication of China’s Action Plan on Early Warning for Climate Change Adaptation (2025-2027). It aims to establish a joint platform for monitoring, forecasting and early warning of extreme weather and climate events to support disaster-risk management and climate-resilient community building. Beijing said it would use geostationary satellites to provide high-frequency disaster monitoring across Africa, Asia and the Pacific.

These developments reinforce China’s commitment to domestic policies that support the world’s most climate-vulnerable nations.

With the US expected to retreat from international climate leadership under a second Donald Trump presidency, China’s role in shaping global climate diplomacy may become even more crucial.

Trump, who dismissed climate change as a hoax, rolled back environmental protections during his first term. He has pledged to withdraw from the Paris Agreement again, potentially leaving a leadership vacuum that Beijing is positioned to fill.

Meanwhile, China is fast-tracking its climate policies, positioning itself as a leader in both adaptation and mitigation. Faced with increasingly severe climate impacts, such as droughts that have caused billions of dollars in damage, Xi has committed to peak carbon emissions by 2030 and achieving carbon neutrality by 2060.

As part of its broader climate policy, China has made substantial investments in renewable energy. In 2023, it poured US$273 billion into clean energy – nearly one-third of global spending – cementing its dominance in solar and wind power.

As the world’s largest producer of solar panels and the largest energy consumer, China is driving the global energy transition. In 2023, it reportedly installed 57 per cent of global capacity in solar power – 253 gigawatts – equivalent to the levels installed globally in 2022. Meanwhile, China’s wind capacity grew by 66 per cent year on year.

By driving growth in clean energy and diversifying its energy mix, China is shaping the future of not only its domestic climate efforts but the entire world’s.

China has the chance to set a new standard for climate diplomacy, particularly in the Global South. This could enhance its geopolitical influence and underscore the need for more international cooperation on climate change. In this context, Beijing’s climate policies could reshape global diplomacy, challenging the West’s traditional dominance.

However, China faces growing scrutiny on climate finance, as highlighted in Cop29 discussions on the New Collective Quantified Goal, which aims to support developing countries. While climate finance responsibilities are assigned to developed nations based on their historical emissions, many negotiators have urged China to contribute more.

Since 2016, China has provided over US$24.5 billion to developing nations, a considerable amount but still below the US$100 billion annual target for developed countries. Beijing maintains that, as a developing country, it is not obliged to provide funding for the goal.

Chinese representatives support voluntary contributions but resist calls for mandatory financial commitments. Critics argue that, despite China’s rise as a global power, it still seeks preferential treatment in climate negotiations, which seems at odds with its growing influence.

With its expanding economic capabilities and status as the world’s largest emitter of greenhouse gas emissions since 2006, many say China should be more responsible. Thus, China’s climate finance role will face increased scrutiny, especially if it seeks a more prominent position in international climate diplomacy.

China’s climate policies are also complicated by its reliance on fossil fuels. Despite significant investments in renewables, coal remains dominant in its energy mix. In 2023, coal production reached a record high, raising concerns about Beijing’s ability to meet its carbon-neutral targets amid projected increases in energy demand.

This tension is reflected in China’s ranking of 55th out of more than 6o countries plus the European Union on the Climate Change Performance Index, highlighting the challenge of pursuing ambitious climate goals and reducing fossil fuel dependence. Overcoming this reliance requires a more aggressive shift towards renewable energy.

Despite its reliance on coal and limited financial contributions, China has made significant strides in addressing climate change. With growing influence, particularly in the Global South, it is poised to play a pivotal role in shaping global climate action.

China expands health insurance coverage with 91 new drugs, breakthrough treatments

https://www.scmp.com/business/article/3288691/china-expands-health-insurance-coverage-91-new-drugs-breakthrough-treatments?utm_source=rss_feed

China has added dozens of new drugs to its health insurance reimbursement list, signalling support for innovative treatments while keeping a tight control on spending.

The National Healthcare Security Administration on Thursday pre-approved 91 medicines, taking the total to 3,159. Meanwhile, 43 drugs that have with better alternatives or that are no longer manufactured were ejected.

The additions comprise 26 anti-tumour drugs, 15 for treating diabetes and other chronic diseases, 13 rare disease drugs, seven anti-infection medications, 11 traditional Chinese medicine products, four psychiatric drugs and 15 other drugs, according to investment bank Jefferies.

The average price reduction of the newly qualified drugs is 63 per cent, compared with 62 per cent in last year’s negotiations with drug makers. This is likely to save the government about 50 billion yuan (US$6.9 billion) in public health expenditure next year.

As China’s population ages, Beijing is under pressure to contain growing healthcare costs by driving hard bargains with drug and medical device makers, while supporting innovative products as demand for better services and treatment continues to grow.

The central government has slowed the rate of spending growth by the medical insurance fund to 9 per cent in the first 10 months of the year, from 17 per cent in the first half, Industrial Securities’ analysts said in a note on Monday.

More than 92 per cent of innovative drugs that took part in this year’s negotiations were included in the reimbursement list, much higher than the overall success rate of 76 per cent.

“The results show a strong signal to support innovative drugs, despite the overall price cut of 63 per cent under budget control,” analysts led by Cui Cui said in the Jefferies report. “Notably, we see the inclusion of DS-8201 as a breakthrough, showing dedicated support and higher tolerance for drugs with clinical superiority, despite higher cost.”

Co-developed by UK’s AstraZeneca and Japan’s Daiichi Sankyo, the drug is marketed as Enhertu for treating breast, gastric and esophageal cancers.

The antibody drug, which targets and kills tumour cells while sparing healthy cells, was rejected in last year’s negotiations, Cui said.

Domestic innovative drugs that made it to the list include Akeso’s metastatic non-small cell lung cancer drug Ivonescimab and Cadonilimab, which treats liver, lung, pancreas and cervical cancers.

Innovent Biologics, Jiangsu Hengrui Pharmaceuticals, CSPC Pharmaceutical and Zai Lab were the other domestic pharmaceutical firms whose drugs were included in the list.

“Going forward, drugs in areas of high competition and past-generation bestsellers could be exposed to higher pricing pressure, or [be] more vulnerable to removal, to make room for innovative drugs,” Cui said.

What Xi’s flying visit to Morocco means for China’s EV industry

https://www.scmp.com/news/china/diplomacy/article/3288608/what-xis-flying-visit-morocco-means-chinas-ev-industry?utm_source=rss_feed

On his way back from the G20 summit in Brazil last week, Chinese President Xi Jinping made a quick, but important, stop in Morocco.

There, he met the 21-year-old Moroccan Crown Prince Moulay Hassan, with the pair reaffirming their joint commitments to deepen ties between the two countries.

It may have been a flying visit, but it was also a strategic one.

According to observers, Morocco and other countries in the Maghreb region, which takes in western and central North Africa, are pivotal to solving two important issues for China: sourcing critical materials needed in electric vehicle (EV) manufacture and bypassing import restrictions imposed by the United States and Europe.

They said while the Chinese presence in the region had previously been concentrated on Egypt and Algeria, Beijing was now expanding its economic and diplomatic ties into other countries such as Morocco and Tunisia, where relations have been minimal throughout the past decade. Also, China and Libya are in talks to rebuild relations, more than a decade since Chinese companies left following political turmoil in the North African country.

Xi said China’s engagement with Morocco has become “increasingly active”, with Chinese companies stepping up investments in the North African nation’s EV battery and vehicle manufacturing sectors.

For example, Chinese-European battery maker Gotion High-Tech announced in June plans to build Africa’s first “gigafactory” in Kenitra, around 40km (25 miles) north of the Moroccan capital, Rabat, at a cost of US$1.3 billion. Chinese battery maker BTR New Material Group is also building a US$300 million cathode factory in the country, while Chinese anode producer Shinzoom is building a US$690 million anode factory.

According to David Shinn, a professor at George Washington University’s Elliott School of International Affairs, Beijing has identified Morocco as a place where commercial opportunities can offer entry into European markets. Meanwhile in Tunisia, a growing authoritarianism that is damaging its traditionally strong ties with the West is presenting a unique opportunity for China.

François Conradie, Casablanca-based lead political economist at Oxford Economics Africa, said a number of Chinese firms active in EV technology had set up operations in Morocco to benefit from its advantages in the production of green energy and thus of green hydrogen – hydrogen produced by splitting water using electrolysis.

Morocco’s proximity to the European market, and its reserves of lithium and phosphate used in the production of certain vehicle batteries, present further opportunities.

“In the longer term, these producers can benefit from the African Continental Free Trade Area,” Conradie said.

Charlie Robertson, head of macro strategy at asset management firm FIM Partners, said Morocco was industrialising and China was keen on building relationships with a country that had strong trade with Europe.

“Morocco is a big car producer and exporter now, and Chinese firms are supplying products like car tyres to support that,” Robertson said.

Tunisia is also in Beijing’s sights.

In May, Xi met Tunisian President Kais Saied in Beijing, where the two countries signed a strategic partnership that would open up the doors for Chinese investment in the North African nation.

It was the first time a Tunisian president had visited China in more than three decades. Over that time, the country has faced political and economic turmoil, particularly since the 2011 Arab spring which ousted then-president Zine El Abidine Ben Ali.

China is the third-largest supplier of consumer goods to Tunisia, with two-way trade standing at US$2.2 billion last year, of which about US$2 billion was Chinese exports to the North African nation. The American Enterprise Institute’s China Global Investment Tracker records only a single Chinese construction contract, worth US$110 million.

Similarly, in Libya, the country’s reconstruction presents a lucrative market for Chinese companies, particularly in infrastructure.

Chinese firms had left Libya following the 2011 revolution that toppled leader Muammar Gaddafi. At the time, 75 Chinese companies controlled 50 large projects with a contract value of more than US$20 billion, according to estimates by China’s Ministry of Commerce. In the wake of the government’s collapse, Beijing evacuated almost 36,000 Chinese nationals, most of them involved in infrastructure construction.

According to John Calabrese, a senior fellow at the Middle East Institute in Washington, Chinese companies are expected to return to Libya following the activation of the Libyan-Chinese Joint Economic Chamber to boost investment and cooperation, particularly in Belt and Road Initiative projects, infrastructure and renewables.

In August, Libya further strengthened ties with Beijing by discussing reactivating contracts stalled by conflict and pursuing new collaborations in industrial technology and urban planning.

“China has been trying to regain its business activity there ever since, and to resume modest oil imports from Libya,” Shinn said. “As stability slowly improves in Libya, China is ramping up its engagement.”

Yet China’s aggressive push into Morocco could pose a challenge for its policy in North Africa, due to issues between Morocco and Beijing’s long-time trading partner, Algeria.

Morocco claims the resource-rich Western Sahara is part of its territory. But Algeria supports the Polisario Front, which has fought for the independence of the Sahrawi Arab Republic since the 1970s – a move that has put it in conflict with its neighbour, Morocco.

Shinn said Morocco and Algeria “strongly disagree about the Western Sahara, which Morocco controls but Algeria believes should become an independent state”.

“Too close of a Chinese relationship with Morocco could endanger its cordial ties with Algeria,” Shinn said.

But Calabrese noted that China’s inroads to building ties with Morocco, Tunisia and Libya did not mean that it had prioritised those relationships over its connections with Egypt and Algeria.

On the contrary, he said, China’s relations with Egypt remained robust, while its economic and military cooperation with Algeria had also deepened, with Chinese carmakers planning to set up factories there.

“Of course, China must navigate delicate relations with Morocco and Algeria, particularly regarding the Western Sahara issue,” Calabrese said. “But one of the hallmarks of China’s approach to regional disputes is balancing its relationships – and to date has been pretty successful doing it.”

Trump 2.0’s China tariffs

https://www.scmp.com/economy/series/3288612/trump-20s-china-tariffs?utm_source=rss_feed

High-flying Malay student at Penang Chinese school becomes education sensation

https://www.scmp.com/week-asia/people/article/3288616/high-flying-malay-student-penang-chinese-school-becomes-education-sensation?utm_source=rss_feed

Malaysians have commended a Malay pupil for his stellar academic performance at a Chinese institution, a rare example of a non-Chinese student securing the top spot in the country’s hyper-competitive Chinese school syllabus.

The achievements of Ahmad Khidir Ahmad Nazri, 17, emerged on Sunday after his sister shared a TikTok video of him receiving five top awards including for Top Student and Best in Year from SMJK Heng Ee school in Penang.

The video, which garnered 1.7 million views and more than 200,000 likes, was widely circulated by local media as Malaysians flooded social media with positive messages and posts congratulating him for his achievements.

“Congratulations Ahmad Khidir. I will use this name for my son. May he be successful like you,” read a comment by one Farah on TikTok.

Ahmad Khidir’s accomplishments stand out as non-Chinese students remain the minority in Malaysian Chinese medium schools, which are widely seen as having higher academic standards among public schools with the added difficulty of using Mandarin as the medium of instruction.

Those sentiments were echoed by many on Malaysian social media, who shared their struggles navigating the strict syllabus at Chinese schools.

“It is not easy for a Malay to survive in [Chinese schools] … it is hard to find those who excel,” read one comment on X.

There is, however, a growing trend of students from among Malaysia’s bumiputra – which loosely translates to sons of the soil and includes the Malay-Muslim majority and indigenous groups – enrolling in Chinese schools.

In 2024, more than 18 per cent of the student population at Chinese medium schools is bumiputra, according to government data, up from around 11 per cent a decade earlier.

Ahmad Khidir, who was educated entirely under the Chinese syllabus since kindergarten, admitted that it was not easy to build proficiency in Mandarin.

“You have to try and try again … there is no straight road to success,” he said in an interview with a local radio station on Tuesday.

“Difficulties are only temporary. Stay strong, motivated and keep trying.”

Ahmad Khidir’s success despite the challenging learning environment was not lost on Malaysians, including some ethnic Chinese who felt embarrassed that his Mandarin was better than theirs.

“Tsinghua University China is waiting for you. You won’t need to apply, they will come to you,” read a comment to his sister’s TikTok video, referring to one of China’s top public varsities.

China boosts fighter jet afterburner, tycoon offloads luxury flats: SCMP’s 7 highlights

https://www.scmp.com/news/world/article/3288507/china-boosts-fighter-jet-afterburner-tycoon-offloads-luxury-flats-scmps-7-highlights?utm_source=rss_feed

Technology developed by Chinese scientists that gives fighter jet engines an unprecedented level of thrust when the afterburner is activated could give the Chinese military the edge in air combat, according to researchers with the Aero Engine Academy of China in Beijing.

In a rare move, Taiwan’s military is using a Taipei university campus to train reservists to prepare for the possibility of urban warfare against the People’s Liberation Army (PLA), prompting concerns and criticism.

Hong Kong flag carrier Cathay Pacific Airways is facing a backlash after more than 200 passengers were forced to remain in an aircraft in Bangkok for five hours when their flight was cancelled, and were then shuttled to a hotel with their passports taken away without explanation.

Malaysia is witnessing an exodus of nurses to overseas jobs paying three or four times the starting salary at home, prompting warnings that low wages and poor conditions are hollowing out essential healthcare services.

Beijing’s top trade negotiator met the head of Nvidia’s global business operations on Monday, ahead of an expected escalation of US restrictions on China’s semiconductor industry, which reportedly could come as soon as this week.

Former Chinese gymnast Wu Liufang has been slammed by compatriot and Olympic champion Guan Chenchen for posting viral “thirst trap” videos on social media that led to her account being partially banned on Sunday.

Chen Zhuolin, the chairman of distressed mainland Chinese developer Agile Group, has sold all nine units he owned in a Hong Kong luxury residential project at less than half the original investment six years ago.

[Sport] Sweden asks China to co-operate over severed cables

https://www.bbc.com/news/articles/c748210k82wo

Reuters

China’s logistical dream: Beijing has a new plan to counter supply-chain threats

https://www.scmp.com/economy/china-economy/article/3288550/chinas-logistical-dream-beijing-has-new-plan-counter-supply-chain-threats?utm_source=rss_feed

An ambitious undertaking could help China reduce its per-unit logistics cost by 6.3 per cent in three years, as the country seeks to empower its domestic market and boost offshore competitiveness amid escalating trade protectionism.

The world’s second-largest economy aims to establish a “unified, efficient and well-ordered logistics market” by 2027. And for every 100 yuan (US$13.79) of gross domestic product that China creates, the logistics cost is expected to be trimmed from last year’s rate of 14.4 yuan to 13.5 yuan, according to a new seven-part action plan posted on the government’s official website.

“[We will] address chokepoints in international logistics … and enhance the service and security of international supply-chain logistics,” Meng Xiaoyu, deputy director of transport services at the Ministry of Transport, said on Thursday at a briefing for the plan.

Compared with the logistics costs in 2023, the move is estimated to save more than 1 trillion yuan (US$138 billion) and benefit manufacturing industries that are the backbone of the Chinese economy.

The initiative came as the world’s second-largest economy seeks to shore up its exports to counter the potential impact of US president-elect Donald Trump’s ramped-up tariff threats, also as part of China’s efforts to bolster domestic demand and revive its role in driving the national economy amid heightened external uncertainties.

Three main features of the plan involve highlighting areas of reform and innovation; clearing bottlenecks; and systematic planning and promotion efforts.

The plan calls on port-storage facilities to improve efficiency surrounding the country’s “new three” sectors – a term coined by state media to describe the new leading drivers of exports – electric vehicles, lithium batteries and solar panels – which represent a shift away from China’s “old three” pillars of exports that comprised clothing, home appliances and furniture.

The country should also enhance the quality and efficiency of international supply chains, the plan said while stressing the need to optimise schedules and capacity for China-Europe freight trains, as well as increase the number of scheduled services along the route.

The release of the plan follows Premier Li Qiang’s call in May at a State Council meeting to reduce logistics costs, which built on commitments made at the Communist Party’s central economic work conference in December, as well as in a government report published in March.

“Overall, there is still relatively large room to lower logistics costs across society,” Zhang Shixin, deputy secretary general of the National Development and Reform Commission, said at the Thursday briefing.

The plan also targets reforms in the rail and road freight sectors, calling for an open logistics data-sharing mechanism across transport and customs departments.

Cities are encouraged to integrate industrial clusters with logistics hubs, expand airport and port economies, and develop logistics-driven economic zones around national hubs.

The plan also emphasised advancing digital transformations via technologies such as big data, 5G, and the BeiDou satellite navigation system.

“By 2027, the country aims to foster a group of internationally competitive modern logistics enterprises … and modern logistics will largely strengthen its strategic role in enhancing the resilience and security of industrial and supply chains,” it said.

Man in China obsessed with KOL spends US$550,000 on gifts, hopes she will call him ‘brother’

https://www.scmp.com/news/people-culture/article/3288202/man-china-obsessed-kol-spends-us550000-gifts-hopes-she-will-call-him-brother?utm_source=rss_feed

A man in China became the target of ridicule on mainland social media after spending over 4 million yuan (US$550,000) on tipping a live-streaming anchor, all in a desperate attempt to hear her call him “brother”.

He resorted to eating plain steamed buns to survive amid his financial ruin.

The man, whose surname is Hong, hails from Ningbo in Zhejiang province in southeastern China.

Earlier this year, he developed an obsession with online live-streaming and began funnelling money into supporting a particular female anchor, whose identity remains undisclosed.

Initially, he drained his family’s savings, prompting them to restrict his access to funds.

Undeterred, Hong continued to exploit his position to finance his addiction.

Working in the hardware trade, he started stealing copper materials during deliveries for his family business.

Beginning in May, he routinely pilfered copper during these deliveries and sold it to waste recycling stations for cash. This continued until October 15, when the factory reported a significant quantity of missing copper to the Hengjie police station, suspecting theft.

Following a police investigation, Hong, accompanied by his family, turned himself in.

At first, he confessed to only two recent thefts, denying any further involvement.

However, when confronted with evidence from his financial transactions, which revealed unexplained income and substantial expenditures on the live-streaming platform, Hong ultimately confessed.

He admitted to committing over 40 thefts since May, amassing about 2.3 million yuan (US$316,000), all of which he spent on tipping the live-streaming host to elevate her rankings.

Explaining his motives, Hong stated: “I didn’t want to meet her; I just wanted to hear her call me ‘brother’.”

He also revealed that his obsession forced him to rely on plain steamed buns to stave off hunger and sustain himself.

Hong was eventually arrested on suspicion of theft, and so far, over 1 million yuan has been recovered and returned to the factory.

In China, the fascination with key opinion leaders (KOLs) has become a significant source of income, allowing them to earn a living through tips and virtual gifts.

According to iResearch, the market size for virtual gift donations during live-streams in China reached 140 billion yuan (US$19 billion) in 2019 and is projected to grow to 417 billion yuan (US$57 billion) by next year.

Hong’s actions, reported by Jiupai News, have shocked many on Chinese social media.

One user joked: “What kind of copper is worth over 2 million yuan? This really blows my mind!”

Another added: “If you just want to hear it, why not record it and play it on repeat?”

A third remarked: “Four million yuan for a single word, ‘Brother’? Maybe he should see a psychiatrist.”

Is Hanoi quietly building Asean alliances on a South China Sea code of conduct?

https://www.scmp.com/news/china/diplomacy/article/3288482/hanoi-quietly-building-asean-alliances-south-china-sea-code-conduct?utm_source=rss_feed

Vietnam and Malaysia have upgraded diplomatic ties and pledged to deepen their cooperation on the South China Sea dispute ahead of a second Donald Trump administration in the US and rising maritime tensions between Beijing and Manila.

The elevation in ties to a comprehensive strategic partnership – announced last week during Vietnamese Communist Party chief To Lam’s visit to Malaysia – is a step towards easing tensions over the competing territorial claims in the waterway, according to observers.

The move also signals an accelerating realignment of power in Southeast Asia, which could lead to a more united front from claimant countries in the overarching maritime dispute with China, the analysts said.

The agreement makes Malaysia the first Asean member state to become a top-tier diplomatic partner with Vietnam, a status it shares with China.

In a joint statement, Kuala Lumpur and Hanoi pledged to continue working together to “maintain peace, security, stability, safety, and freedom of navigation” in the South China Sea, as well as “peaceful resolution of disputes without resorting to threats or use of force”.

They also “reaffirmed the importance for all parties concerned to exercise self-restraint in the conduct of activities and to refrain from undertaking activities that could escalate tension which in turn could affect peace and stability in the South China Sea”.

At a joint press conference with Malaysian Prime Minister Anwar Ibrahim, Lam reiterated the call for restraint by “all relevant parties” while committing to the early adoption of a “substantive and effective” South China Sea code of conduct (COC).

According to the official Vietnam News Agency, Lam specified that the code should be in line with international law, including the 1982 United Nations Convention on the Law of the Sea (UNCLOS).

Negotiations for a COC started in the 1990s, but remain unresolved. Despite the Association of Southeast Asian Nations and China agreeing last year to conclude talks by 2026, they remain divided – including on whether it should be legally binding.

Aside from differences with China, a lack of unity among the Asean member states – including over competing claims with each other – has also contributed to the slow pace of progress.

The diplomatic upgrade between Kuala Lumpur and Hanoi followed a report by Reuters in October that Malaysia had lodged a rare protest over Vietnam’s alleged expansion of a South China Sea reef in the Spratly Islands that is claimed by both countries.

The Malaysian and Vietnamese claims, alongside those of the Philippines and Brunei, also overlap with China’s expansive assertions of territorial rights over much of the waterway.

Zhang Mingliang, an expert on regional affairs at Jinan University in Guangzhou, southern China, said Lam’s visit and the upgrade of ties highlighted Vietnam’s backing for Malaysia’s turn in 2025 as rotating chair of Asean.

“Both sides see Malaysia’s Asean chairmanship next year as an opportunity to push the maritime issue in the direction desired by both countries, that is, a legally binding COC as soon as possible,” he said.

According to Zhang, the timing – just ahead of Trump’s return to the White House in January – also underlines the worries in Southeast Asia about the possibility of declining US support for the region.

“Asean nations are particularly sensitive to possible US policy changes and it would be only natural for them to take precautions against uncertainty. Securing a binding South China Sea code of conduct with China is probably the best option at the moment.”

Nguyen Khac Giang, a visiting fellow at the ISEAS-Yusof Ishak Institute’s Vietnam Studies Programme in Singapore, said the elevation of ties sent a “strong signal of shared priorities” from both members of the 10-strong Association of Southeast Asian Nations.

“Despite their own overlapping claims, Hanoi and Kuala Lumpur recognise that a fragmented Asean only benefits those who wish to dominate the South China Sea,” he said.

According to Giang, the move to lift Malaysia to the top-tier of Vietnam’s partnerships – an eight-strong group that also includes the US, Russia, India, Japan and France – fits well into Hanoi’s broader diplomatic strategy.

Indonesia and Singapore could follow Malaysia’s lead, with reports that the two countries are in discussions to upgrade their ties with Vietnam to the highest level next year.

“By forging stronger bonds with Indonesia, Malaysia, with the Philippines potentially next, Hanoi is quietly weaving a network of partnerships that could help Southeast Asian nations better coordinate their approach to maritime disputes,” Giang said.

While the diplomatic upgrade underscores a growing coordination between claimant states, it may not have an immediate impact on the South China Sea dynamics, but could build momentum for a more cohesive regional response, according to Giang.

“The Philippines might view this as encouragement to deepen its own partnerships, while Malaysia’s coming Asean chairmanship in 2025 presents a critical opportunity to shape a more unified … stance on the South China Sea,” he said.

“Vietnam’s early engagement with Kuala Lumpur is clearly aimed at encouraging a more proactive role from the host.”

A China-based Southeast Asia specialist, who spoke on condition of anonymity because of the subject’s sensitivity, was also of the view that the elevation of Vietnam-Malaysia ties was at least partly aimed at Beijing.

“Both countries are among those that have encountered constant pressure from China over the past decade in the disputed waters they each claim in the South China Sea,” the academic said.

“In a sense, Malaysia – which is under increasing pressure in the disputed waters from China – is in a rather similar position to Vietnam. That’s why they’ve edged closer, trying to reinvigorate efforts within Asean to push for the binding code of conduct with China.”

According to the mainland-based specialist, Lam has appeared to be more assertive on the South China Sea issue than his predecessor Nguyen Phu Trong, who died in July at the age of 80.

“For instance, Vietnam and Malaysia have shown unprecedented intentions to cooperate on maritime issues since Lam came to power [in August].”

The academic also noted Lam’s mid-November visit to Bach Long Vi island in the Gulf of Tonkin, observing that his pointed remarks on the island’s strategic importance to Vietnam’s national security and sovereignty were obviously aimed at Beijing.

It was the first visit to the island – controlled by China until 1957 when Beijing transferred it to Hanoi – by a Vietnamese leader since 2014, when a diplomatic crisis over a Chinese deepwater oil rig in the contested waters sent their ties to a low point.

In his remarks, Lam described the island as “a key maritime gateway … providing logistics services for military activities at sea” and added that it should become “a fortress for defending Vietnam’s maritime sovereignty”.

Lucio Blanco Pitlo III, research fellow at the Asia-Pacific Pathways to Progress Foundation, a Manila-based think tank, described Malaysia and Vietnam as “pragmatic and flexible actors”, despite their different approaches and thresholds.

“Both jointly submitted an extended continental shelf claim [to the United Nations in 2009] and pursued joint offshore petroleum development in the resource-rich sea,” he noted.

According to Pitlo, much of their offshore oil and gas blocks are in choppy waters where China’s claims are becoming more felt – through Beijing’s growing enforcement capacity and frequent disruption of regular marine security and economic activities.

“Both countries see China’s increasing omnipresence in the disputed sea and airspace and the challenge these present to their interests,” Pitlo said.

“But relative distance and burgeoning economic ties may explain Malaysia’s higher bar in pushing back against China. It can tolerate the passage and presence of Chinese ships, so long as they do not interfere with the country’s petroleum fields or projects.”

Pitlo noted that Malaysia and Vietnam had opposed China’s claims and actions and registered their displeasure through diplomatic channels.

“However, they may also have apprehensions about Manila inviting greater US and allied military footprints, which may raise the possibility of accidents in the hotspot,” he said.

Unlike the Philippines, Malaysia and Vietnam seem to have “more confidence in dealing with their big northern neighbour”, according to Pitlo, who pointed out that both Kuala Lumpur and Hanoi have channels for dialogue with China about the sea.

Ngeow Chow Bing, director of the Institute of China Studies at the University of Malaya, said the upgraded partnership between Vietnam and Malaysia was not necessarily meant as a strategic statement towards China or the Philippines.

Instead, the wording of the joint statement – such as “peaceful settlement” and “self-restraint” – were standard phrases that are common among the Asean nations, he said.

“So these are not particularly aimed at the current tensions or towards China or the Philippines … The upgrade … is bilateral in nature and does not indicate any form of united front against China on the South China Sea.”

According to Ngeow, the recent dispute between Kuala Lumpur and Hanoi was not a factor in the timing of the upgrade’s announcement because “incidents like this, on their own, are no obstacles for improved diplomatic relations”.

Carl Thayer, emeritus professor at the University of New South Wales in Australia, agreed, noting that both countries had signalled that priority would be given to “self-restraint towards each other in the South China Sea and negotiations to address outstanding issues”.

Thayer added that the Vietnam-Malaysia statement merely repeated their support for the standard Asean position on the maritime dispute with regard to China.

While both countries stood to benefit from better trade and investment, deepened defence and security cooperation, as well as greater Asean-wide coordination, Vietnam’s support would also enhance Malaysia’s position as Asean’s 2025 chair, he said.

However, the upgrade could presage a realignment within a deeply divided Asean, with Vietnam emerging as “the hub of a network” that includes Malaysia, Indonesia and Singapore, according to Thayer.

“This new realignment could influence the Philippines to put greater trust in Asean, [rather] than relying primarily on its alliance with the US. China would find it more difficult to play its ‘divide and conquer’ strategy,” he said.

“A united front of claimant states against China is unlikely until Malaysia, Vietnam and the Philippines resolve their own overlapping claims,” Thayer added.

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Volkswagen’s controversial Xinjiang plant sale signals strategic shift in China

https://www.scmp.com/business/china-business/article/3288552/vws-controversial-xinjiang-plant-sale-signals-strategic-shift-china?utm_source=rss_feed

Volkswagen’s (VW) sale of a controversial plant in China will come as a relief to the German carmaker, as it rationalises its flagging operation amid cutthroat competition in the world’s largest automotive market, industry observers say.

The divestment could see international carmakers reduce their capacity by as much as 10 million units on the mainland as they continue to lose market share to more nimble local electric vehicle makers amid an accelerated pace of electrification in China, according to UBS.

VW announced on Wednesday that the plant in Urumqi, the capital of the Xinjiang Uygur autonomous region in western China, and two test tracks in Turpan, Xinjiang and Anting, Shanghai, will be sold to Shanghai Motor Vehicle Inspection Certification, a subsidiary of Shanghai Lingang Development Group.

All three assets are owned by VW and its Chinese partner SAIC Motor. Details of the transaction were not disclosed.

“By selling the plant in Xinjiang, VW can quell fears about political risks and cut excess capacity to adapt to a changing market where its petrol vehicles are no longer easy sales,” said Qian Kang, who owns car-component businesses in eastern Zhejiang province. “After all, the factory has been idle over the past five years.”

VW, one of the largest carmakers in mainland China for the past four decades, has been under pressure to dispose of the assets in Xinjiang amid controversies about China’s alleged human rights violations against Uygur Muslims in Xinjiang. It will no longer have a presence in the region following the sale.

VW said in a statement that the transaction was undertaken because of “economic reasons”.

“The site has now been sold by the joint venture [with SAIC] as part of the realignment,” the statement said. “The same applies to the test tracks in Turpan and Anting.”

Chinese foreign ministry spokeswoman Mao Ning told a press conference in Beijing on Thursday that some foreign politicians and organisations had spread false information about Xinjiang, including the use of forced labour.

“China will open up further to drive high-quality economic growth and the country will provide more opportunities for foreign businesses, including German companies, to invest and operate in China,” she said.

At the same time, VW said that it would extend its partnership with SAIC by another 10 years to 2040, as part of its efforts to regain pole position in China’s automotive market.

VW, which also has partnerships with state-owned FAW and JAC Group, to make petrol cars and EVs, is likely to lose its title to BYD as China’s largest carmaker after deliveries slumped 8.5 per cent in the first 10 months of 2024.

Through its mainland ventures, VW sold 2.23 million vehicles to Chinese buyers from January to October, compared with BYD’s 2.9 million, according to data provider CnEVPost. BYD’s sales jumped 35 per cent in the same period.

On the mainland, EVs – pure electric and plug-in hybrids – have outsold conventional petrol vehicles since July, buoyed by drivers’ increasing penchant for intelligent and environment-friendly cars.

International carmakers are unable to develop and make electric cars that are to Chinese consumers’ liking, according to a sales director at Shanghai-based dealer Wan Zhuo Auto. It will be some years before companies like VW and General Motors (GM) catch up with their Chinese rivals, he added.

It has been reported that GM is in talks with its joint venture partner SAIC on plant closure and asset disposals amid falling sales on the mainland.

The venture between SAIC and GM reported sales of 533,152 units between January and October this year, a decline of 32.8 per cent year on year.

On Monday, Paul Gong, head of China automotive research at UBS, said diminished demand for foreign brands would lead to an over­capacity of 10 million vehicles on the mainland.

These carmakers are also at risk of losing up to US$20 billion in profit annually in China amid heightened competition with domestic rivals and a rapid market shift towards EVs and smart vehicles, he said.

Sweden seeks clarity from China about suspected sabotage of undersea cables

https://www.theguardian.com/world/2024/nov/28/sweden-seeks-clarity-from-china-about-suspected-sabotage-of-undersea-cables

Sweden has announced that it has sent a formal request to China for cooperation over the suspected sabotage of two undersea cables in the Baltic sea.

The prime minister, Ulf Kristersson, said on Thursday that Swedish authorities were seeking “clarity” from China on what happened to the two fibre-optic cables between Finland and Germany and Sweden and Lithuania last week.

“Today I can tell you that we have additionally sent a formal request to work together with Swedish authorities to get clarity about what has happened,” he said in a press conference.

“We expect China will choose to work together as we have requested.”

It comes amid speculation about the Chinese ship Yi Peng 3, which sailed over the cables at about the time they were severed and has remained anchored in the Kattegat strait between Sweden and Denmark since 19 November, where it is being monitored by multiple vessels, including the Danish navy.

Sweden, which is leading the investigation, has declined to comment on the claims and China’s foreign ministry has denied any responsibility.

The Wall Street Journal reported that investigators suspect the crew of the Chinese vessel deliberately severed the cables last week by dragging an anchor along the seabed for over 100 miles.

The Swedish police and prosecutor declined to comment on the claim, saying they had nothing to add to Wednesday’s statements when they announced that the crime scene investigations of the two cables had been completed and that analysis was continuing.

The Swedish navy and coastguard also declined to comment.

The absence of any seismic signals to indicate explosions, as there were with the Nord Stream and Balticconnector pipelines, could support the theory that the damage was caused by an anchor, Norsar, the Norwegian national datacentre for the comprehensive nuclear test ban treaty, said. Kjølv Egeland, a senior researcher at Norsar, said: “There was no explosion or seismic signal at all, so that could be consistent with this anchor theory.”

The Nord Stream 1 and 2 pipelines, which carried natural gas from Russia to Germany under the Baltic Sea, were damaged in explosions in September 2022. In August this year it was claimed that the explosions were the work of a small Ukrainian sabotage team – this was denied by the Ukrainian president, Volodymyr Zelenskyy.

In a subsequent incident in the Baltic, in October 2023, the Balticconnector gas pipeline was extensively damaged. Finnish investigators recovered a large ship’s anchor near the spot which was linked to a Chinese container vessel, NewNew Polar Bear.

The Swedish prosecutor said: “The cable between Sweden and Lithuania, which is owned by a Swedish company, was damaged on 17 November. The cable between Finland and Germany, located south of the Sweden-Lithuania cable, was damaged a number of hours later. Both damage sites are located within the Swedish economic zone.”

Finnish police said investigators at the crime scene investigation into the cable rupture site between Finland and Germany had collected cable samples for further analysis and the damage is being investigated as aggravated criminal damage and aggravated interference with communications.

Kristersson said on Wednesday that the Baltic sea is now a “high risk” zone as he met Nordic and Baltic leaders at a summit in Harpsund, Sweden.

“We are aware that there is a high risk for different types of activities on the Baltic sea that are dangerous,” he said.

He added: “Now we are careful about not accusing anybody right now of anything. We don’t know that this is sabotage. But we are investigating the matter very carefully.”

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Trump tariffs could be a blessing in disguise for China’s reformers

https://www.scmp.com/opinion/china-opinion/article/3288154/trump-tariffs-could-be-blessing-disguise-chinas-reformers?utm_source=rss_feed

The imminent emergence of Trump 2.0 has sparked global concerns, particularly over the possibility of an escalating trade war with China. However, Donald Trump might just provide China with the “geopolitical stimulus” it needs to rebalance its economy. In fact, his policies could be the catalyst for much-needed reforms in China as it grapples with an economic downturn.

Historically, China has shown a tendency to enact rapid changes in response to external pressures or implement difficult domestic reforms amid the complexities of the world. In 1999, then Chinese premier Zhu Rongji strategically pursued China’s entry into the World Trade Organization to leverage external forces for a transformative shift towards a market economy.

Similarly, the challenges posed by the new Trump administration’s containment strategy could compel China to implement essential reforms to revitalise its economy and navigate the evolving global economic landscape.

China faces a multitude of economic challenges, including decelerating growth, mounting debt levels and a changing relationship with the United States. While Chinese policymakers agree on the need to expand China’s internal market for sustained growth, progress has been slow.

In anticipation of escalating economic tensions with the US, China introduced the dual circulation strategy in 2020. This strategy prioritises the domestic market as the primary driver of growth while fostering synergy with external markets. Despite initial criticisms of this inward-focused approach, dual circulation aims to create a viable solution for a China seeking to build resilience against external shocks.

There have been some positive developments in this direction. Despite low consumer confidence, China’s consumption expenditure in the first half of this year contributed to 60.5 per cent of economic growth, boosting GDP growth by 3 percentage points, according to Xinhua News Agency.

However, China’s internal consumption still lags behind as a portion of GDP growth. Consumption’s share of China’s gross domestic product has yet to exceed 55 per cent, remaining lower than the global average of around 75 per cent. This places China behind both developed economies and other emerging markets in terms of consumption as a percentage of GDP.

To address these challenges, China began taking steps in late September to rebuild consumer confidence through stock market interventions. Additionally, China allocated 10 trillion yuan (US$1.38 trillion) for helping local governments to refinance their debts and hopefully ease pressures on government workers and local businesses.

However, a more comprehensive approach involving direct income transfers to households, such as increased pensions and rent subsidies, would be crucial to bolstering consumer spending and driving economic growth. Measures that directly boost household incomes are likely to strengthen the demand side of the economy.

Pressure from Trump’s policies could ultimately prompt Beijing to implement reforms aimed at increasing domestic consumption’s contribution to the Chinese economy.

Reforms could include initiatives to speed up the establishment of a unified national market in China, creating an internal circulation market without barriers. To this end, China has pledged to intensify efforts to eliminate local protectionism and other hurdles. This push comes at a time of increasing complexity in the global geoeconomic landscape.

Despite China boasting one of the world’s largest markets, it remains relatively fragmented and inefficient. Unlike the US or even the European Union, which is a unified market across 27 member countries, China’s economy seems to lack cohesion.

The goal is to dismantle trade barriers and ease the flow of goods, capital and productive forces between regions in a manner that reduces transaction costs, aligns with market economy principles, fosters economic integration across regions and promotes innovation and competition.

These structural changes could drive economic dynamism and efficiency within China, positioning the country for sustainable growth and resilience in the global marketplace. However, progress has been limited.

China’s local protectionism has become increasingly sophisticated, with municipal and provincial governments setting up barriers to protect regional interests and ensure growth within their own jurisdictions. This approach hinders outside companies in competing with local firms.

For example, numerous cities and provinces have sought to attract electric vehicle manufacturers and investors. By 2019, there were about 500 Chinese EV manufacturers but intense competition reduced this number to only 100 by 2023, according to Bloomberg. This has led to wasted resources and investment. A unified national market might have helped local governments avoid such massive wastage.

Establishing a unified national market could help reduce costs related to research and development, manufacturing, labour, logistics and marketing. Varied regulations and standards from region to region can lead to disparities in the quality of products and services available, which ultimately hurts consumers.

Leveraging the pressure from Trump’s policies, China may be forced to address internal barriers and create a more open and equitable domestic market.

As the next chapter of the US-China trade war looms on the horizon, a Reuters poll of more than 50 economists projects new tariffs on Chinese goods to reach a median 38 per cent. The tariffs could reduce China’s GDP growth next year by up to 1 percentage point, according to the economists surveyed by Reuters.

The longer-term economic outlook for China is clouded by the looming threat of Trump’s tariffs, prompting the need for swift and disruptive changes to prevent a contraction of economic output.

Despite the challenges that lie ahead, Trump’s second term may not be completely bad for China. It presents an opportunity for China to implement crucial reforms essential for restoring confidence among consumers and businesses, as well as establishing a more robust foundation for its US$18 trillion economy.

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Trump vows to end Ukraine war. What does that mean for China?

https://www.scmp.com/news/china/diplomacy/article/3288543/trump-vows-end-ukraine-war-what-does-mean-china?utm_source=rss_feed

As the war in Ukraine reached the 1,000-day mark last week, Ukrainian troops hit targets inside Russia with long-range missiles supplied by the US and Britain.

In response, Russia launched a ballistic missile at the Ukrainian city of Dnipro in a blitz that analysts say has intensified as Moscow and Kyiv have tried to seize the upper hand for future negotiations.

The prospect of talks has grown since Donald Trump, who has boasted of being able to end the war “within 24 hours”, won the US presidential election this month and prepares to return to the White House.

For China, the implications of a resolution to the conflict could be wide-ranging.

Throughout the war, China has claimed neutrality and sought to play the role of peacemaker – even as it has built strong ties and kept in regular communication with sanctions-hit and diplomatically isolated Russia.

That China-Russia connection has strained Beijing’s ties with Brussels, one of its major trading partners.

An end to the war in Ukraine could go some way to easing that pressure on China-EU relations and enable Chinese companies to return to the Russian market, some observers say. But others say the conflict has been a turning point in how the European Union views China and its ties with Russia, with only further tensions to come.

Trump’s transition team is reportedly considering a range of options to end the conflict, although details leaked to the media so far have probably raised some hackles.

There is growing concern that a resolution to the war could be on terms that are more favourable to Russia, potentially forcing Ukraine into recognising Russia’s territorial gains, including the annexation of Crimea in 2014 and other areas seized by Moscow.

Feng Zhongping, director of the institute of European studies at the Chinese Academy of Social Sciences, noted that European countries were concerned that Trump might address the conflict in a manner they deem unacceptable, possibly forcing Ukraine to make concessions that could lead to a disproportionately one-sided resolution.

Ukrainian President Volodymyr Zelensky has said that peace cannot be achieved until all Russian troops are withdrawn and all territory seized by Moscow, including Crimea, is returned to Ukraine. Earlier this month, though, he left the door open to negotiation, saying said Kyiv would like to end the war with Russia next year through “diplomatic means”.

A key concern for Ukraine would be that a “bad peace would otherwise be a truce”, giving Russia time to “replace their horrendous losses and launch a fresh assault on Ukraine in the future”, according to William Freer, a research fellow in national security at the UK-based think tank Council on Geostrategy.

In any case, forcing Ukraine to cease its resistance would prove challenging. Even if Trump were to completely cut off weapon supplies, EU members were able to supply Kyiv with enough arms to prevent a total defeat, analysts said.

According to Wang Yiwei, director of Renmin University’s institute of international affairs, Brussels and Kyiv might only sit down at the negotiating table when war efforts were no longer sustainable, and the situation could eventually end up like the “Israel model”. This model, he said, reflected Israel’s status as an ally of Washington, which provides substantial support for its security.

“Ukraine’s future relationship with Nato could mirror that of Israel’s – a partnership without explicit statutes [governing it], with the security of Ukraine effectively being ‘outsourced’ to Nato,” Wang said.

Despite Beijing positioning itself as a neutral arbiter, it is widely seen by Ukraine and its allies in the US and Europe as a crucial backer of Russia, enabling Moscow to continue its war.

Eva Seiwert, an analyst with the Berlin-based Mercator Institute for China Studies, said the impact of a peace deal on China’s global standing would hinge significantly on the degree of Beijing’s involvement in the negotiations.

“Beijing has tried hard to be perceived as a constructive potential peace actor, so a ‘win’ for the US as peace broker in the Russia-Ukraine war would be a serious blowback China will want to avoid,” she said.

Yun Sun, director of the China programme and co-director of the East Asia programme at the Stimson Centre in Washington, said Beijing would like to see the end of the Ukraine war, irrespective of whether the resolution happened under Chinese mediation.

She added that the end of the war would help to alleviate the pressure on China-EU relations, as well as on China-US relations.

“I don’t think we should expect Trump’s proposal to be a done deal. Instead, it is something to form the basis for more negotiation.”

Beijing’s close ties with Moscow have become a stumbling block for its relationship with Brussels, and diplomatic experts said that a resolution of the conflict, even under Trump’s watch, would not bring a fundamental change to the now thorny relations between China and the European Union.

Seiwert said the Russia-Ukraine conflict had become a turning point in China-EU relations, and a resolution of the conflict would not solve the bloc’s concerns about China.

“The war has led European policymakers to start paying closer attention to the close relationship between Beijing and Moscow, and this will not go away even once the war has ended,” Seiwert said.

She added than given its persistent economic tensions with China, the EU would be vigilant about China-Russia ties, viewing Beijing with heightened scepticism, particularly in the context of Taiwan and the South China Sea.

In recent years, the EU has regarded China as a partner for cooperation, an economic competitor, and a systemic rival. Brussels has taken steps to reduce its dependence on China-centric supply chains and has become increasingly outspoken and assertive on issues such as human rights, territorial disputes in the South China Sea, and Taiwan.

Ties have also been strained by Brussels’ introduction of punitive tariffs on electric vehicles manufactured in China, a measure that Beijing condemned as protectionist.

Despite these escalating tensions, Beijing has consistently described the bloc as one of its most crucial partners in upholding multilateralism and combating the forces of deglobalisation.

But experts said Russia’s invasion of Ukraine had changed how Europe viewed future ties with China, the top source of goods imported to the EU and the third-ranked destination for EU products.

According to Grace Theodoulou, policy fellow for the China Observatory at the Council on Geostrategy, China’s response to the conflict – including its reluctance to condemn Russia’s invasion despite the EU’s demands – has led Brussels to develop “a deep sense of mistrust” in its relationship with Beijing.

“Economically, the EU has taken few direct economic actions against China. But one could say that the recent tariffs on electric vehicles are also borne out of a sense of fear of the long-term geopolitical consequences of being significantly dependent on China when it so openly supports the EU’s most aggressive neighbour,” she said.

According to Jian Junbo, an associate professor at the Centre for China-Europe Relations, the Russia-Ukraine conflict has propelled the bloc to view its economic and trade relations with China through a lens of intensified geopolitical competition and security concerns.

He added that the Ukraine war had heightened the EU’s focus on geopolitical competition.

“Consequently, the EU places greater emphasis on security and geopolitical competition when assessing its economic and trade relations with China,” Jian said.

Jian added that future interactions between Beijing and Brussels were poised to oscillate between cooperation and tension, even with a settlement of the Russia-Ukraine conflict.

Feng echoed this sentiment, noting: “Efforts to foster mutual cooperation will continue despite ongoing tensions, but these tensions will be a constant presence alongside collaborative endeavours.”

More uncertain would be the impact of a peace deal on China-Russia relations, according to observers.

“An end of the war would lead to the lifting of some sanctions on Russia and this would be welcomed by enterprises in Europe, the US and China,” said Wang of Renmin University.

Wang added that Trump might exempt certain interest groups, such as Russian energy companies, from US sanctions, and Chinese companies would accelerate their entry into the Russian market.

“Moreover, the Ukraine war has disrupted as much as 80 per cent of railway freight between China and Europe, and the disruption will go away as soon as the war ends – without any doubts,” he added.

However, Zheng Chunrong, director of the German Studies Centre at Tongji University in Shanghai, said the end of the conflict could have unpredictable results given the complicated relationships and new power dynamics between the US, EU, Russia and China.

“One school of thought is that while [the US] wants to resolve conflicts between Russia and Ukraine, it in fact wants to sabotage the relationship between China and Russia,” Zheng said.

“Its goal is to win over Russia and hence it may bring greater pressure on China.”

“But it is much too complicated to predict the outcome of such a scenario because it involves how the different parties interact and seek to balance power,” he added.

US allies in the Indo-Pacific are still waiting to see how their partnership with Washington – bolstered under US President Joe Biden’s administration – will unfold under Trump 2.0.

Many are also watching to see how Trump’s second term and a potential Russia-Ukraine peace deal will affect tensions in the South China Sea and Taiwan.

Zheng Zhihua, a research associate professor specialising in maritime affairs at Shanghai Jiao Tong University, said the US would continue to use Taiwan and the South China Sea as bargaining chips in its dealings with Beijing.

“There are two possibilities here. It depends on whether the issues Trump is concerned with, such as tariffs and trade, are effectively addressed,” he said.

“If these are resolved, tensions in the South China Sea and Taiwan Strait might ease. Otherwise, Trump might tend to use these issues as leverage and bargaining chips in dealing with China.

“Even in a Trump 2.0 era, the US is unlikely to abandon these issues as they remain effective bargaining tools when dealing with China.”

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